EXHIBIT 99.1
IRREVOCABLE VOTING AGREEMENT AND PROXY
THIS VOTING AGREEMENT (the "Agreement") as of August 22, 2007 is made by
and among ▇▇▇▇▇▇ ELECTRONICS, INC., incorporated and existing under the laws of
the State of New York (the "Company"), Harborview Master Fund L.P. (the
"Shareholder") and Yorkville Advisors, LLC, a Delaware limited liability company
("Yorkville") (collectively the Company, the Shareholder and Yorkville shall be
referred to as the "Parties").
RECITALS
WHEREAS, the Shareholder is a shareholder of the Company;
WHEREAS, the Shareholder desires to enter into this Agreement, in
accordance with Section 609 of the New York Business Corporation Law , for the
purpose of granting to Yorkville an irrevocable proxy to exercise certain voting
rights of shares of stock of the Company at the special meeting of the
shareholders to be held no later than November 21, 2007 (the "Shareholders
Meeting").
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements hereinafter set forth, the parties hereto agree as follows:
ARTICLE I
SHARES SUBJECT TO AGREEMENT
1.1 Shares Subject to Agreement. The shares subject to the irrevocable
proxy provided in Section 2. are such shares of common stock of the Company (the
"Shares") that are:
(a) As of the date hereof, held in the name of the Shareholder in the
amounts set forth opposite the Shareholder's name on Schedule 1
attached hereto;
(b) As of the date hereof, shares of the Company's Common Stock to which
the Shareholder is entitled pursuant to the exercise of warrants
and/or options in the amounts as set forth opposite the Shareholder's
name on Schedule 1 attached hereto ;
(c) Any future issuance of voting shares of capital stock of the Company
to the Shareholder, provided however, that this Agreement is in effect
at the time of such issuance.
1.2 Adjustment of Shares. In the event that the number of outstanding
shares of common stock is increased by a stock dividend, stock split, or similar
recapitalization of the Company, any additional shares issued to the Shareholder
shall be deemed Shares within the meaning of this Agreement.
ARTICLE II
GRANT OF PROXY
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2.1 Grant of Proxy. Upon the execution of this Agreement, the Shareholder
agrees to grant to Yorkville or its assigns or designees, an irrevocable proxy
to vote the Shares for the sole and limited purpose of voting at the
Shareholders Meeting for (i) the approval of the issuance of shares of the
Company's Common Stock in the aggregate, in excess of 19.99% of the outstanding
shares of the Company's Common Stock in connection with but not limited to (a)
the shares issuable upon conversion of the convertible debentures (the
"Convertible Debentures") issued pursuant to the Securities Purchase Agreement
by and between the Company and YA Global Investments, L.P. ("YA Global") dated
August 22, 2007 (the "Securities Purchase Agreement"), (b) the shares of the
Company's common stock to be issued upon exercise of the warrant issued to YA
Global pursuant to the Securities Purchase Agreement (the "Warrant Shares"), and
(c) any shares of Common Stock issued as Liquidated Damages (as defined in the
Registration Rights Agreement by and between the Company and YA Global dated
August 22, 2007) (the "Total Transaction Shares"). The proxy herein provided
shall be in the same form as Exhibit A to this Agreement.
2.2 Revocation of Prior Proxies. The Shareholders hereby revoke and cancel
any and all proxies in respect of the Shares existing prior to the date of this
Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SHAREHOLDERS
Each Shareholder represents and warrants to the other Shareholder, the
following:
3.1 Requisite Power and Authority. The Shareholder has all the necessary
power and authority under all applicable provisions of law to execute and
deliver this Agreement and to carry out its provisions. All action on
Shareholder's part required for the lawful execution and delivery of this
Agreement has been taken. Upon execution and delivery, this Agreement will be
valid and binding obligation of Shareholder, enforceable in accordance with its
terms, except (a) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other laws of general application affecting
enforcement of creditors' rights, and (b) general principles of equity that
restrict the availability of equitable remedies.
3.2 Ownership of Shares. The Shareholder represents and warrants that it is
the beneficial owner of the Shares specified in Schedule 1 hereto and that it
does not own directly or indirectly, any other shares of common stock of the
Company as of the date hereof. There are no outstanding subscriptions, options,
warrants, rights, calls, commitments, conversion rights, rights of exchange,
plans or other agreements providing for the purchase, issuance or sale of the
voting shares, other than as contemplated by this Agreement.
ARTICLE IV
TERMINATION OF AGREEMENT
4.1 Termination. This Agreement shall terminate upon the casting of all of
the proxy votes as contemplated by Section 2.1 above.
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ARTICLE V
MISCELLANEOUS
5.1 Governing Law/Venue. This Agreement shall be deemed to be made in,
governed by, interpreted under and construed in all respects in accordance with
the laws of the State of New Jersey, irrespective of the place of domicile or
residence of either party hereto, and without giving effect to any choice or
conflict of laws provision or rule (whether of the State of New Jersey or any
other jurisdiction) that would cause the application of the laws of any
jurisdiction .
5.2 Remedies. The Shareholder shall have all the remedies available to them
for breach of this Agreement by law or in equity. The Shareholder further agrees
that in addition to all other remedies available at law or in equity, the
Shareholder will be entitled to specific performance of the obligations of each
party to this Agreement and immediate injunctive relief. The Shareholder also
agrees that if an action is brought in equity to enforce a party's obligations,
no Shareholder will assert as a defense that there is an adequate remedy at law.
5.3 Successors and Assigns. Except as otherwise expressly provided herein,
the provisions hereof shall inure to the benefit of, and be binding upon, the
successors, assigns, heirs, executors and administrators of the Parties hereto.
5.4 Entire Agreement. This Agreement, the Exhibits and Schedules hereto,
constitute the full and entire understanding and agreement between the Parties
with regard to the subject matter hereof and no Party shall be liable or bound
to any other in any manner by any representations, warranties, covenants and
agreements except as specifically set forth herein.
5.5 Amendment and Waiver. This Agreement may not be amended or modified.
5.6 Notices. Any notices or other communications required or permitted
hereunder shall be deemed sufficiently given if personally delivered to it or
sent by registered mail or certified mail, postage prepaid, or by prepaid
telegram addressed as follows: If to the Company, to: ▇▇▇▇▇▇ Electronics, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Attention: Telephone: Facsimile:
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With a copy to: ▇▇▇▇ ▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to Shareholder: At such address on the Company's stockholder ledger
If to Yorkville: Yorkville Advisors, LLC
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: Yorkville Advisors, LLC
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
or such other addresses as shall be furnished in writing by any party in the
manner for giving notices hereunder, and any such notice or communication shall
be deemed to have given as of the date so delivered, mailed or telegraphed.
5.7 Attorneys' Fees. In the event that any dispute among the Parties to
this Agreement should result in litigation, the prevailing party in such dispute
shall be entitled to recover from the losing party all fees, costs and expenses
of enforcing any right of such prevailing party under or with respect to this
Agreement.
5.8 Titles and Subtitles. The titles of the sections and subsections of the
Agreement are for convenience of reference only and are not to be considered in
construing this Agreement.
5.9 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument. The execution of this Agreement may be
transmitted by facsimile signatures.
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5.10 Confidentiality. The Parties agree to keep this Agreement and any
related transactions contemplated hereby and thereby confidential, except as may
be required by law.
[SIGNATURE PAGE FOLLOWS]
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[SIGNATURE PAGE TO VOTING AGREEMENT]
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
COMPANY:
▇▇▇▇▇▇ ELECTRONICS, INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Chief Financial Officer
SHAREHOLDER
HARBORVIEW MASTER FUND, L.P.
By: Navigator Management Ltd.
By: /s/Authorized Signatory
-----------------------
Date: August 23, 2007
YORKVILLE ADVISORS, LLC
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
-----------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: President
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SCHEDULE 1
[Intentionally omitted]
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EXHIBIT A
IRREVOCABLE PROXY
The undersigned shareholder, holder of the Shares (as determined pursuant
to that certain Voting Agreement dated August 21, 2007) of common stock of
▇▇▇▇▇▇ Electronics, Inc., incorporated and existing under the laws of the State
of New York, does hereby irrevocably appoint Yorkville Advisors, LLC as proxy to
vote and otherwise represent the Shares for the following matters:
1. The approval of the issuance of shares of the Company's common stock
in the aggregate, in excess of 19.99% of the outstanding shares of the
Company's common stock in connection with but not limited to (a) the
shares issuable upon conversion of the convertible debentures (the
"Convertible Debentures") issued pursuant to the Securities Purchase
Agreement by and between the Company and YA Global Investments, L.P.
("YA Global") dated August 22, 2007 (the "Securities Purchase
Agreement"), (b) the shares of the Company's common stock to be issued
upon exercise of the warrant issued to YA Global pursuant to the
Securities Purchase Agreement (the "Warrant Shares"), and (c) any
shares of Common Stock issued as Liquidated Damages (as defined in the
Registration Rights Agreement by and between the Company and YA Global
dated August 22, 2007) (the "Total Transaction Shares").
The proxy holder named herein shall represent the undersigned for the
purpose of determining a quorum at any shareholders meeting that he attends.
YORKVILLE ADVISORS, LLC
By:-------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: President
SHAREHOLDER
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