Exhibit No. 99.5
VOTING AGREEMENT
This VOTING AGREEMENT (the "Agreement") dated as of June 29, 2001, by and
among Xxxxxxx Xxxxxx and Xxxxxxx Xxxxxx (collectively referred to herein as the
"Capital Stockholders"), Xxxxx Xxxxxxxxxxx, Xxxxxxx Mastrisciani, Xxxxxx
Xxxxxxxxxxx and Xxxx Xxxxxxxxxxx (collectively referred to herein as the
"Prospect Stockholders"), Capital Beverage Corporation, a Delaware corporation
located at 0000 Xxxx Xxxxxxx Xxx., Xxxxx, Xxx Xxxx 00000 ("Capital" or the
"Company") and Prospect Beverage Corporation, a New York corporation located at
000 Xxxxxxxx Xxxxxx, Xxxx Basin, Xxxxxxxx 000, Xxxxxxxx, Xxx Xxxx 00000-0000
("Prospect").
R E C I T A L S:
WHEREAS, Capital and Prospect have entered into an asset purchase
agreement, dated May 4 , 2001 (the "Asset Purchase Agreement"); and
WHEREAS, as a condition to the closing of the Asset Purchase Agreement, the
parties hereto are required to enter into this Voting Agreement; and
WHEREAS, the Capital Stockholders and the Prospect Stockholders are
stockholders of the Company; and
WHEREAS, the parties hereto desire to set forth their agreement as to
certain matters regarding, among other things, the governance and management of
the Company and the sale or disposition of the Company's securities.
NOW, THEREFORE, in consideration of the mutual premises, covenants and
agreements contained herein, the parties agree as follows:
Section 1. Corporation Governance.
1.1 Company's Board of Directors
(a) Number of Directors; Board Representation. Commencing upon the first
annual meeting of the Company's stockholders after the date hereof, which will
be held not later than September 30, 2001 and during the term of this Agreement,
the Company shall be governed by a Board of Directors (the "Board") of eight (8)
members (or six (6) if the parties agree). The directors shall serve for periods
of one year (the first period commencing on the date of the annual meeting of
stockholders or sooner if elected prior thereto) and until their successors are
elected at the next annual meeting of the stockholders, at any special meeting,
or by majoritywritten consent, as the case may be. The Board shall nominate and
recommend to the stockholders of the Company eight (8) nominees (or six (6) as
the case may be) for election to the Board, 50% of whom shall be chosen by the
Prospect Stockholders in their sole and absolute discretion ("Prospect
Nominees") and 50% of whom shall be chosen by the Capital Stockholders in their
sole and absolute discretion (Capital Nominees"). Notwithstanding the foregoing,
the Board shall not nominate a person for election whose employment has been
terminated by Capital for cause. (b) Notwithstanding the provisions of Section
1.1(a), if the securities of Capital are no longer listed on The Nasdaq Smallcap
Market ("Nasdaq"), the Board shall take immediate action to appoint the new
board (as provided in 1.1(a)) prior to the next annual meeting of shareholders.
In addition, the Prospect Stockholders may request the Board, prior to the next
annual meeting, to seek permission from Nasdaq to elect the new board (as
provided in Section 1.1(a)) prior to the next annual meeting of shareholders,
without the need for such meeting.
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1.2 Agreement to Vote Shares.
Each Prospect Stockholder and each Capital Stockholder agrees during the
term of this Agreement to vote, or cause to be voted, the shares shown opposite
each Stockholder's name on Schedule A hereto and any other shares acquired after
the date hereof (less such shares sold pursuant to Rule 144 or in other open
market transactions) (the "Shares"), in person or by proxy, in favor of the
Prospect Nominees and Capital Nominees at every meeting of the stockholders of
the Company at which directors are elected to the Board and at every adjournment
thereof. Notwithstanding anything contained herein to the contrary, each
Prospect Stockholder and Capital Stockholder may sell any of their Shares under
Rule 144, or pursuant to an effective registration statement, at which time the
Shares sold shall be free of any restrictions or obligations imposed by this
Agreement. In connection with any such sale, the Company shall provide, or cause
to be provided, such instructions or opinions of counsel as are necessary to
remove all legends from such Shares.
1.3 Other Agreement.
Except as permitted in or required by this Agreement, no stockholder has or
shall (i) grant any proxy with respect to the Shares, (ii) enter into or agree
to be bound by any voting trust with respect to any Shares or (iii) enter into
any stockholder agreements or arrangements of any kind with any person with
respect to any Shares, which in any such case is inconsistent with the
provisions of this Agreement.
2. Right to Join in Sale.
(a) Notwithstanding anything herein to the contrary, if any of the Capital
Stockholders or any of the Prospect Stockholders ("Selling Holders") proposes,
in a single transaction or a series of related transactions, to sell, dispose of
or otherwise transfer a majority of such stockholders Shares, the Selling
Holders shall refrain from effecting such transaction unless, prior to the
consummation thereof, each of the other stockholders who are parties to this
Agreement shall have been afforded the opportunity to join in such transfer as
provided in Section 2(b). Specifically excluded from this provision are sales
made pursuant to Rule 144 or other sales in the open market.
(b) Prior to the consummation of any transaction subject to this Section 2,
the person or group (the "Proposed Purchaser") that proposes to acquire
securities in a transaction subject to Section 2(a) (the "Tag-Along Sale") shall
offer (the "Tag-Along Purchase Offer") in writing to each of the other
stockholders who are parties to this Agreement the right to include a
proportionate amount of their Shares in the proposed sale to the Proposed
Purchaser equal to the proportionate amount of the Selling Holder's Shares being
sold, at the same price and on the same terms and conditions as the Proposed
Purchaser has offered to the Selling Holders. Each stockholder shall have five
(5) days from the receipt of the Tag-Along Purchase Offer in which to accept the
Tag-Along Purchase Offer. In the event that a transfer is subject to Section
2(a), no transfer shall be consummated without the Proposed Purchaser first
complying with this Section 2(b). It shall be the responsibility of each
stockholder who is a party to this Agreement to determine whether any
transaction to which it is party is subject to Section 2(a). Specifically
excluded from this provisions are sales made pursuant to Rule 144 or other sales
in the open market.
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Section 3. Miscellaneous.
3.1 Survival of Terms. All representations, warranties and covenants
contained in this Agreement or in any certificates or other instruments
delivered by or on behalf of the parties hereto shall be continuous and survive
the execution of this Agreement.
3.2 Entire Agreement; Amendment. This Agreement contains the entire
agreement among the parties hereto with respect to the transactions contemplated
herein, supersedes all prior written agreements and negotiations and oral
understandings, if any, and may not be amended, supplemented or discharged
except by an instrument in writing signed by all parties.
3.3 Assignment. This Agreement shall be binding upon the parties hereto and
their respective successors, personal representations, heirs at law, and assigns
and shall inure to the benefit of any assignee, subject to the terms and
conditions hereof (including execution of a joinder agreement by any assignee).
3.4 No Waiver. Any waiver by either party to this Agreement of any
provision of this Agreement shall not be construed as a waiver of any other
provision of this Agreement, nor shall such waiver be construed as a waiver of
such provision respecting any future event or circumstance.
3.5 Notices. Notices hereunder shall be given only by personal delivery,
registered or certified mail, return receipt requested, overnight courier
service, or telex, telegram, facsimile or other form of electronic mail and
shall be deemed transmitted when personally delivered or deposited in the mail
or delivered to a courier service or a carrier for electronic transmittal or
electronically transmitted by facsimile (as the case may be), postage or charges
prepaid, and properly addressed to the particular party to whom the notice is to
be sent. Unless and until changed by notice given as provided herein, notices
shall be sent (i) to the Company, at 0000 Xxxx Xxxxxxx Xxx., Xxxxx, Xxx Xxxx
00000, Attention: Xxxxxxx Xxxxxx, to Prospect at, 000 Xxxxxxxx Xxxxxx, Xxxx
Basin, Xxxxxxxx 000, Xxxxxxxx, Xxx Xxxx 00000-0000 (ii) to Xxxxx Xxxxxxxxxxx,
Xxxxxxx Xxxxxxxxxxx, Xxxxxx Xxxxxxxxxxx and Xxxx Xxxxxxxxxxx at, 000 Xxxxxxxx
Xxxxxx, Xxxx Basin, Xxxxxxxx 000, Xxxxxxxx, Xxx Xxxx 00000-0000, in each case
with a copy to Xxxxxxxxx & XxXxxxx, LLP, 000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx, Xxx
Xxxx, XX 00000, Attn: Xxxxxxx Xxxxxxxxx, Esq. and to Xxxxxxx Xxxxxx and Xxxxxxx
Xxxxxx at 0000 Xxxx Xxxxxxx Xxx., Xxxxx, Xxx Xxxx 00000, in each case with a
copy to Berlack, Israels & Xxxxxxxx, 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, XX 00000,
Attn: Xxxxxx X. Xxxxxxxxx, Esq.
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3.6 Injunctive Relief. It is acknowledged that it will be impossible to
measure in money the damages that would be suffered if the parties fail to
comply with any of the obligations herein imposed on them and that in the event
of any such failure, an aggrieved party will be irreparably damaged and will not
have an adequate remedy at law. Any such party shall, therefore, be entitled to
injunctive relief, including specific performance, to ensure such obligations,
and if any action should be brought in equity to enforce any of the provisions
of this Agreement, none of the parties hereto shall raise the defense that there
is an adequate remedy at law.
3.7 Counterparts. This agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
3.8 Variations in Pronouns. All pronouns and any variations thereof shall
be deemed to refer to the masculine, feminine or neuter, singular or plural, as
the identity of the antecedent person or persons or entity or entities may
require.
3.9 Headings. The headings used in this Agreement are for convenience only
and shall not by themselves determine the interpretation, construction or
meaning of this Agreement.
3.10 Binding Effect. This Agreement, the Exhibits and all certificates or
other instruments delivered by or on behalf of the parties hereto shall be
binding upon the legal representatives, heirs, successors and assigns of the
parties hereto.
3.11 Term; Termination. This Agreement shall terminate on June 28, 2006.
Notwithstanding the above, this Agreement shall remain in full force and effect
so long as the property owned by Xxxxx Realty Properties, Inc. (located at 000
Xxxxxx Xxxxxx, Xxxxxxxx, NY) continues to secure indebtedness of Capital.
3.12 Conflicts with Charter or By-Laws. In the event that this Agreement
conflicts in any way with any provision of the Company certificate of
incorporation, as amended from time to time, by-laws or corporate resolutions,
the provisions hereof shall control.
3.13 Legend. Each stockholder and the Company agree that each outstanding
certificate representing securities of the Company shall be endorsed with
legends substantially in the following form:
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THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933 (THE "ACT") AND MAY NOT BE TRANSFERRED, SOLD, OFFERED
FOR SALE, PLEDGED, HYPOTHECATED, OR OTHERWISE DISPOSED OF UNLESS PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT, OR UNLESS IN THE OPINION OF
COUNSEL TO THE COMPANY SUCH TRANSFER IS EXEMPT FROM APPLICABLE REGISTRATION
REQUIREMENTS.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS AND
CONDITIONS SET FORTH IN A VOTING AGREEMENT DATED JUNE 29, 2001, A COPY OF WHICH
MAY BE OBTAINED FROM THE COMPANY OR FROM THE HOLDER OF THIS CERTIFICATE.
TRANSFER OF SUCH SHARES WILL NOT BE MADE ON THE BOOKS OF THE COMPANY UNLESS
ACCOMPANIED BY EVIDENCE OF COMPLIANCE WITH THE TERMS OF SUCH AGREEMENT.
A copy of this Agreement shall be filed with the Secretary of the Company
and kept with the records of the Company.
3.14 Proxy.
(a) In the event that any party to this Agreement fails to exercise his
obligations as provided herein and attend in person or by proxy at any
shareholders meeting to vote his Shares as provided in this Agreement, then, and
in that event, pursuant to Section 212 of the Delaware General Corporation Law,
such party hereby appoints the other party (ie., the Capital Stockholders and
Prospect Stockholders appoint each other) as their attorney and agent to vote,
consent or to otherwise exercise all of his rights as his proxy with respect to
his Shares in the same manner, to the full extent and with the same effect that
such party might otherwise vote, consent or exercise any rights with reference
to said Shares.
(b) The above proxy is coupled with an interest, is irrevocable and shall
survive the death or incompetency adjudication of any party.
(c) Each certificate representing the Shares subject to this Agreement or
any replacement Shares shall be marked on the face thereof with the following
legend:
"THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
AN IRREVOCABLE PROXY AND VOTING AGREEMENT BETWEEN XXXXXXX
XXXXXX, XXXXXXX XXXXXX, XXXXX XXXXXXXXXXX, XXXXXXX
XXXXXXXXXXX, XXXXXX XXXXXXXXXXX, XXXX XXXXXXXXXXX, CAPITAL
BEVERAGE CORPORATION AND PROSPECT BEVERAGE CORPORATION, A
COPY OF WHICH AGREEMENT MAY BE EXAMINED AT THE PRINCIPAL
OFFICE OF THE COMPANY."
(d) In the event that any provision or portion of this Agreement shall, for
any reason, be held invalid, unenforceable or contrary to law, the remainder of
such provision and the remaining provisions of this Agreement shall not be
affected but, rather, shall remain in full force and effect. The parties hereto
agree in such event to execute, acknowledge and deliver all such further
documents and to take all such further action as may be necessary or desirable
to carry out and make effective the terms, conditions, purposes and intent of
this Agreement including the execution of any further agreements and voting
agreements, the purpose of which shall provide the voting rights and benefits
contained in this Agreement.
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3.15 Governing Law; Arbitration of Disputes. This Agreement shall in all
respects be governed by and construed in accordance with the laws of the State
of Delaware applicable to agreements made and fully to be performed in such
state, without giving effect to conflicts of law principles. The parties agree
that any and all claims and controversies arising under this Agreement will be
resolved by arbitration in accordance with the terms and conditions of the Asset
Purchase Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
as of the day and year first above written.
CAPITAL BEVERAGE CORPORATION
By:/s/ Xxxxxxx Xxxxxx
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Name: Xxxxxxx Xxxxxx
Title: President
PROSPECT BEVERAGE CORPORATION
By: /s/ Xxxxx Xxxxxxxxxxx
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Name: Xxxxx Xxxxxxxxxxx
Title: President
PROSPECT STOCKHOLDERS:
/s/ Xxxxx Xxxxxxxxxxx
----------------------
Xxxxx Xxxxxxxxxxx
/s/ Xxxxxxx Xxxxxxxxxxx
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Xxxxxxx Xxxxxxxxxxx
/s/ Xxxxxx Xxxxxxxxxxx
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Xxxxxx Xxxxxxxxxxx
/s/ Xxxx Xxxxxxxxxxx
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Xxxx Xxxxxxxxxxx
THE CAPITAL STOCKHOLDERS:
/s/ Xxxxxxx Xxxxxx
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Xxxxxxx Xxxxxx
/s/ Xxxxxxx Xxxxxx
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Xxxxxxx Xxxxxx
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