VOTING AGREEMENT
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VOTING AGREEMENT (this "Agreement"), dated as of August 23, 2004, by
and among Vyteris, Inc., a Delaware corporation ("Vyteris"), Treasure Mountain
Holdings, Inc., a Nevada corporation ("Pubco" or "Treasure Mountain"), ▇▇▇▇▇▇▇
▇▇▇▇▇ Specialty Group, Inc. ("STSG") and Scimitar Holdings, LLC ("Scimitar,"
together with STSG, the "Voters").
WITNESSETH:
WHEREAS, Vyteris and Pubco have entered into a merger agreement and
plan of reorganization (the "Merger Agreement") pursuant to which (i) a
subsidiary of Pubco will merge with and into Vyteris (the "Merger") and Vyteris
will become a wholly-owned subsidiary of Pubco and (ii) all of the capital stock
of Vyteris will automatically convert into the right to receive the capital
stock of Pubco and all options, warrants and rights to purchase the capital
stock of Vyteris will convert into options, warrants and rights to purchase the
capital stock of Pubco;
WHEREAS, Pubco does not have sufficient authorized capital stock to
issue the shares of common stock and preferred stock to be issued pursuant to
the Merger Agreement or to cover the shares of Pubco common stock underlying the
options, warrants and other rights to purchase its capital stock which it will
be required to issue pursuant to the Merger Agreement (the "Insufficient
Authorized Shares Issue");
WHEREAS, Pubco presently does not have a stock option plan comparable
to Vyteris' stock option plan (the "Option Plan Issue");
WHEREAS, it is contemplated that after the consummation of the
Merger, the Insufficient Authorized Shares Issue and the Option Plan Issue will
be remedied either by (i) causing Pubco to reincorporate in Delaware by merging
into a subsidiary corporation that will have sufficient authorized capital stock
to cover the shares and shares underlying the options, warrants and rights
issuable pursuant to the Merger Agreement or (ii) amending its certificate of
incorporation to provide for sufficient authorized capital stock to cover the
shares, options, warrants and rights issuable pursuant to the Merger Agreement
(any such action described in clauses (i) or (ii) a "Subsequent Action").
WHEREAS, Vyteris, Treasure Mountain and certain persons who may
invest in Vyteris subsequent to the date hereof will rely upon the promises made
herein in connection with Vyteris' entering into the Merger Agreement and such
investments and would not effect such actions in the absence of this Agreement;
WHEREAS, it is a condition of Vyteris' obligations under the Merger
Agreement that Scimitar Holdings LLC and ▇▇▇▇▇▇▇ ▇▇▇▇▇ Specialty Group, LLC
agree to be bound by the terms of this Agreement and it is a condition of
Treasure Mountain's obligations under the Merger Agreement that ▇▇▇▇▇▇▇ ▇▇▇▇▇
Specialty Group, LLC be bound by the terms of this Agreement; and
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WHEREAS, the Voters or their affiliates own, or will acquire by
virtue of the Merger, capital stock of Vyteris or Pubco or both such entities
and desire to provide the inducements contemplated herein because they will
benefit from the actions currently contemplated by Vyteris.
NOW, THEREFORE, for good and valuable consideration, including the mutual
covenants contained in the Merger Agreement, the parties agree as follows:
1. (a) For a period commencing as of the date hereof and continuing
until the earlier of (i) one year after the effective time of the Merger or (ii)
the date on which one of the Subsequent Actions is consummated (the "Term"),
each Voter agrees that at any special or other meeting called for such purpose,
in any consent submitted to such Voter or otherwise such Voter will vote all of
the shares of the capital stock of Treasure Mountain now Beneficially Owned (as
hereinafter defined) and controlled or hereafter acquired and then Beneficially
Owned and controlled by such Voter (collectively, as to all Voters, the
"Treasure Mountain Shares") (i) in favor of any Subsequent Action approved by
Treasure Mountain's Board of Directors after the Merger is consummated, (ii) in
favor of any other matters presented for consideration at any meeting of
shareholders of Treasure Mountain solely to the extent to which they are
consistent with, and/or advanced for the purpose of accomplishing or furthering
the objectives of, the Merger Agreement and (iii) against any action or
agreement that would be inconsistent with the agreements set forth in clauses
(i) and (ii) of this Section 1(a).
(b) The Voters agree to be present during the Term in person or
represented by proxy, at all such special or other shareholder meetings of
Treasure Mountain called to address any Subsequent Action so that the Treasure
Mountain Shares may be counted in determining the presence of a quorum at such
meetings.
2. (a) During the Term of this Agreement, the Voters shall not sell,
dispose of (including by means of gift), pledge, assign the rights to, or
encumber any of the Treasure Mountain Shares, or enter into any contract, option
or other arrangement or understanding with respect to the Treasure Mountain
Shares or consent to the offer for sale, sale, transfer, tender, pledge,
encumbrance, assignment or other disposition of any of the Treasure Mountain
Shares or any interest therein in any manner which affects the Voters' right to
vote the Treasure Mountain Shares in the manner provided for herein (any or the
foregoing being referred to as a "Share Transaction"), without the prior written
consent of Vyteris prior to the consummation of the Merger or Treasure Mountain
after the consummation of the Merger, unless the other party to any such Share
Transaction agrees in writing to be bound by the terms of this Agreement with
copies of such agreement promptly sent to Treasure Mountain.
(b) During the Term of this Agreement, the Voters shall not enter
into any other voting or other agreement or grant any proxy or power of attorney
regarding the Treasure Mountain Shares which is inconsistent with the provisions
of this Agreement.
3. The commitments given by the Voters herein may be specifically
enforced by Vyteris prior to the consummation of the Merger and by Treasure
Mountain after the consummation of the Merger without the necessity of posting
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a bond, and shall be binding upon and inure to the benefit of any and all
permitted assignees or transferees of the Treasure Mountain Shares as well as
the executors, administrators, heirs, successors, assigns, representatives, in
whatever capacity, by operation of law or otherwise, of the parties hereto.
4. Any notice or other communication to be given under this Agreement
shall be in writing and delivered personally or by certified mail, return
receipt requested as follows:
If to Vyteris or Treasure Mountain: to such entity at its corporate
headquarters, marked Attn: President, with a copy to ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ PC, ▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇.
If to a Voter: at such Voter's last known address, as set forth in
Vyteris' records.
5. This Agreement shall be governed by and construed in accordance with
the laws of the State of New York without regard to conflicts of law principles.
6. This Agreement constitutes the entire agreement among the parties
with regard to the subject matter described herein and can be waived, modified,
amended or terminated only by a writing signed by all parties hereto. This
Agreement may be executed in counterparts, all of which, when taken together,
shall constitute one and the same instrument. Any person agreeing to be bound to
this Agreement subsequent to the date hereof shall evidence such agreement by
executing a joinder agreement in form and substance reasonably satisfactory to
Vyteris.
7. Each Voter agrees that if any "Affiliate" (as hereinafter defined)
of such Voter Beneficially Owns and controls any Treasure Mountain Shares or
hereafter acquires and then Beneficially Owns and controls any Treasure Mountain
Shares, such Voter shall use its commercially practicable efforts to cause such
Affiliate to take all actions with respect to such Treasure Mountain Shares as
such Voter is required to take with respect to such Voter's Treasure Mountain
Shares pursuant to the terms of this Agreement.
8. The following terms shall have the following meanings
(a) "Affiliate" of a Voter shall mean each individual or entity
which, directly or indirectly, controls such Voter, is controlled by such Voter
or is under common control with such Voter.
(b) "Beneficially Owns" or "Beneficially Owned" with respect to any
securities means having "beneficial ownership" of such securities as determined
pursuant to Rule 13d-3 under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"). Without duplicative counting of the same securities by the
same holder, securities Beneficially Owned by a person include securities
Beneficially Owned by all other persons with whom such person would constitute a
"group" within the meaning of Section 13(d) of the Exchange Act with respect to
the securities of the same issuer.
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9. Each Voter hereby agrees to permit Vyteris and Treasure Mountain,
upon advance written notice to such Voter if reasonably practicable, to publish
and disclose the nature of such Voter's commitments, arrangements and
understandings under this Agreement to the extent required pursuant to
applicable law or regulation. Each Voter acknowledges that this Agreement shall
constitute advance written notice that the notice of meeting and information
statement sent or to be sent to Vyteris' stockholders in connection with the
Merger, the press release announcing the execution of the Merger Agreement, the
Current Report on Form 8-K disclosing the execution of the Merger Agreement, the
press release announcing the consummation of the Merger, the Current Report on
Form 8-K announcing the consummation of the Merger and the notice of meeting and
information statement (or proxy statement) to be sent to Treasure Mountain's
stockholders in connection with the Subsequent Actions either (i) state or will
state the intention of Vyteris and/or Treasure Mountain to have this Agreement
executed by the applicable parties or (ii) will state that this Agreement has
been executed by the applicable parties.
10. (a) Each Voter hereby irrevocably, during the Term of this Agreement,
grants to, and appoints, ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, or any of
them in their respective capacities as officers of Vyteris (or, after the Merger
is consummated, Treasure Mountain), as the case may be, and any individual who
shall hereafter succeed to any such office of Treasure Mountain and each of them
individually, such Voter's (and such Voter's Affiliates') proxy and
attorney-in-fact (with full power of substitution), for and in the name, place
and stead of such Voter, to vote or cause to be voted the Treasure Mountain
Shares at any meeting of the stockholders of Treasure Mountain or at any
adjournment or postponement thereof solely in the manner described in Section
1(a) above and expressly limited to the purposes stated therein.
(b) Each Voter represents that any proxies heretofore given in
respect of the Treasure Mountain Shares are not irrevocable, and that such
proxies either have been or are hereby revoked.
(c) Each Voter hereby affirms that the irrevocable proxy set forth in
this Section 10 is given in connection with the execution of the Merger
Agreement, and that such irrevocable proxy is given to secure the performance of
the duties of such Voter under this Agreement. Each Voter hereby further affirms
that the irrevocable proxy is coupled with an interest and may not be revoked,
except by amendment, modification or termination consented to by Vyteris prior
to the consummation of the Merger or Treasure Mountain after consummation of the
Merger. Each Voter hereby ratifies and confirms all that such irrevocable proxy
may lawfully do or cause to be done by virtue hereof. Such irrevocable proxy is
executed and intended to be irrevocable during the Term in accordance with all
applicable provisions of Delaware and Nevada law. The power and authority hereby
conferred shall not be terminated by any act of such Voter (subject to the terms
hereof) or by operation of law, by the dissolution of such Voter (if such Voter
is other than a natural person), by lack of appropriate power or authority, or
by the occurrence of any other event or events (subject to the terms hereof) and
shall be binding upon all his representatives, executors, successors and/or
assigns. If after the execution of this Agreement a Voter shall dissolve (if
such Voter is other than a natural person), cease to have appropriate power or
authority, or if any other such event or events shall occur (subject to the
terms hereof), the proxies named herein are nevertheless authorized and directed
to vote the Treasure Mountain Shares in accordance with the terms of this
Agreement as if such dissolution, if applicable, lack of appropriate power or
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authority or other event or events had not occurred and regardless of notice
thereof.
11. If requested by Vyteris or Treasure Mountain, each Voter will promptly
after the date hereof surrender to Treasure Mountain all certificates
representing the Treasure Mountain Shares, and Treasure Mountain will place the
following legend on such certificates in addition to any other legend required
thereon:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
RESTRICTIONS ON TRANSFER, VOTING AND OTHER RESTRICTIONS PURSUANT TO A
VOTING AGREEMENT ENTERED INTO BY VYTERIS, INC., TREASURE MOUNTAIN
HOLDINGS, INC. AND THE STOCKHOLDERS PARTY THERETO. THE COMPANY WILL
FURNISH A COPY OF SUCH VOTING AGREEMENT TO THE HOLDER OF THIS CERTIFICATE
UPON WRITTEN REQUEST AND WITHOUT CHARGE."
Upon any placement of the foregoing legend on stock certificates, such
certificates shall promptly be returned to the applicable Voter. Following the
Term, upon the request of any Voter, any such legend shall be promptly removed
at the sole cost of Treasure Mountain.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
VYTERIS, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: CFO
TREASURE MOUNTAIN HOLDINGS, INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: President
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▇▇▇▇▇▇▇ ▇▇▇▇▇ SPECIALTY GROUP, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Chief Executive Officer
SCIMITAR HOLDINGS LLC
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., Inc.
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Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., Inc.
Title: Member Manager
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: President
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