Re: Shareholders Voting Agreement
September
20, 2005
Netsmart
Technologies, Inc.
and
▇▇▇▇▇
Acquisition Corp.
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▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn:
▇▇▇▇▇
▇▇▇▇▇▇, CEO
Gentlemen:
Reference
is made to that certain Agreement and Plan of Merger (the “Merger
Agreement”),
dated
as of the date hereof, by and among CMHC Systems, Inc., an Ohio corporation
(“CMHC”),
▇▇▇▇▇
Acquisition Corp., an Ohio corporation (“Acquisition”),
Netsmart Technologies, Inc., a Delaware corporation (“Netsmart”)
and
▇▇▇▇ ▇▇▇▇▇, as Securities Holders’ Representative.
Unless
otherwise indicated or specifically defined, all capitalized terms used herein
shall have the meaning ascribed to them in the Merger Agreement.
This
letter agreement is the Shareholders Voting Agreement described in Section
5.4
of the Merger Agreement. As an essential condition and inducement to Netsmart
and Acquisition to enter into the Merger Agreement and in consideration
therefor, the undersigned (hereinafter the “Shareholder”) has agreed to enter
into this letter agreement.
To
that
end, in consideration of the foregoing and the mutual covenants and agreements
contained herein and in the Merger Agreement, and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged,
and
intending to be legally bound hereby, the parties hereto hereby agree as
follows:
1. Voting
of Shares.
(a) Voting
Agreement.
The
Shareholder is beneficial owner of, or has sole voting power or control with
respect to, 700,000 issued and outstanding CMHC Shares (such shares, together
with all CMHC Shares issued to, or otherwise beneficially owned by, the
Shareholder after the date hereof or as to which voting power or control
is
hereafter acquired by the Shareholder are hereinafter called the “Covered
Shares”).
The
Shareholder hereby agrees, during the period commencing on the date hereof
and
continuing until termination in accordance with Section
4
hereof
(the “Voting
Period”),
(i)
to appear or cause the holder of record of the Covered Shares on any applicable
record date (the “Record
Holder”)
to
appear for the purpose of obtaining a quorum at any annual or special meeting
of
shareholders of CMHC and at any adjournment thereof at which matters relating
to
the Merger, the Merger Agreement, or any transaction contemplated by the
Merger
Agreement are considered, and (ii) to vote, or cause the Record Holder to
vote,
in person or by proxy, at a meeting or by written consent, all of the Covered
Shares in favor of adopting and approving the Merger, the Merger Agreement
and
the transactions contemplated by the Merger Agreement.
(b) Grant
of Proxy.
(i) The
Shareholder hereby appoints Netsmart and any designee of Netsmart, and each
of
them individually, as the Shareholder’s proxy and attorney-in-fact, with full
power of substitution and resubstitution, to vote or act by written consent
during the Voting Period with respect to the Covered Shares in accordance
with
Section
1(a),
including voting in favor of adopting and approving the Merger, the Merger
Agreement and the transactions contemplated by the Merger Agreement. The
Shareholder shall promptly cause a copy of this letter agreement to be deposited
with CMHC at its principal place of business. The Shareholder shall take
such
further action and execute such other instruments as may be necessary to
effectuate the intent of this proxy. Notwithstanding the foregoing, in the
event
that Netsmart or its designee is unable or declines to exercise the power
and
authority granted by this proxy for any reason or requests the Shareholder
to
vote or act by written consent in respect of the Covered Shares in accordance
with Section
1(a),
the
Shareholder shall be entitled to vote or act by written consent during the
Voting Period with respect to the Covered Shares in accordance with Section
1(a).
(ii) The
proxy
and power of attorney granted pursuant to this Section
1(b)
by the
undersigned shall be irrevocable
during
the Voting Period, shall be deemed to be coupled with an interest sufficient
in
law to support an irrevocable proxy and shall revoke any and all prior proxies
granted by the undersigned. The power of attorney granted by the Shareholder
herein is a durable power of attorney and shall survive the dissolution,
bankruptcy, death or incompetency of the Shareholder. The proxy and power
of
attorney granted hereunder shall terminate as provided in Section
4.
(iii) Notwithstanding
anything in this letter agreement to the contrary, neither Netsmart nor any
designee of Netsmart shall have any rights to vote, or to direct the exercise
of
any rights to vote, any of the Covered Shares in the election of directors
of
CMHC.
(c) No
Inconsistent Agreements.
The
Shareholder hereby covenants and agrees that, except as contemplated by this
letter agreement and the Merger Agreement and except as disclosed in the
Schedules to the Merger Agreement, the Shareholder (i) has not entered, and
shall not enter at any time during the Voting Period, into any voting agreement
in respect of the Covered Shares, and (ii) has not granted, and shall not
grant
at any time during the Voting Period, a proxy or power of attorney in respect
of
the Covered Shares, in either case which is inconsistent with this letter
agreement.
(d) No
Transfer of Shares.
The
Shareholder hereby covenants and agrees that, during the Voting Period, the
Shareholder shall not, either directly or indirectly, sell, transfer, tender,
pledge, encumber, assign or otherwise dispose of (collectively, a “Transfer”),
or
enter into any contract, option or other agreement with respect to, or consent
to, a Transfer of any or all of the Covered Shares or any other securities
or
rights convertible into or exchangeable for the Covered Shares. The Shareholder
hereby agrees and consents to the entry of stop transfer instructions by
CMHC
against any such Transfer.
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2. Representations
and Warranties of the Shareholder.
The
Shareholder represents and warrants to Netsmart and Acquisition as of the
date
hereof as follows:
(a) Authority.
The
Shareholder has the corporate power or legal capacity, as applicable, to
enter
into this letter agreement, to perform its obligations hereunder and to carry
out the transactions contemplated hereby. This letter agreement has been
duly
executed and delivered by the Shareholder and constitutes the binding obligation
of the Shareholder, enforceable against the Shareholder in accordance with
its
terms, except as the enforcement thereof may be subject to or limited by
bankruptcy, insolvency, reorganization, moratorium or other laws affecting
the
enforcement of creditors' rights generally now or hereafter in effect and
subject to the application of equitable principles and the availability of
equitable remedies.
(b) No
Conflict.
Except
as set forth in Schedule 3.5 to the Merger Agreement:
(i) No
filing
with any governmental authority, and no authorization, consent or approval
of
any person or entity is necessary for the execution of this letter agreement
by
the undersigned or the consummation of the transactions contemplated hereby;
and
(ii) None
of
the execution and delivery of this letter agreement by the undersigned, the
consummation by the undersigned of the transactions contemplated hereby,
or
compliance by the undersigned with any of the provisions hereof shall (A)
conflict with or result in any breach of the organizational documents of
the
undersigned, if applicable, (B) result in, or give rise to, a violation or
breach of or a default under any of the terms of any contract, understanding,
agreement or other instrument or obligation to which the undersigned is a
party
or by which the undersigned or any of the Covered Shares or any assets of
the
undersigned may be bound, or (C) violate any applicable order, writ, injunction,
decree, judgment, statute, rule or regulation.
(c
) Ownership
of Shares.
(i)
The
Shareholder has good and valid title to the CMHC Shares listed on Schedule
3.4
to the Merger Agreement as being owned by the Shareholder as of the date
of such
agreement and is the sole record and beneficial owner of such CMHC Shares,
free
and clear of any and all liens.
(ii) Except
as
set forth in Schedule 3.4 to the Merger Agreement, the Shareholder does not
have
any rights, subscriptions, warrants, options, conversion rights, commitments
or
agreements of any kind authorized or outstanding to purchase or otherwise
acquire from CMHC or any other Person any capital stock, or other securities
or
obligations of any kind convertible into or exchangeable for any capital
stock
of CMHC or any other equity interest in CMHC.
(iii) Except
as
set forth in Schedule 3.4 to the Merger Agreement, the undersigned is not
a
party to any proxy, or any agreement, arrangement or understanding of any
kind
authorized or outstanding which restricts, limits or otherwise affects the
ability to transfer or the right to vote any of the Covered Shares or under
which the Shareholder has granted an option on the Covered Shares.
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3. Indemnity.
The
Shareholder agrees to indemnify and hold harmless the Netsmart Indemnified
Parties from and against any Losses which are caused by or arise out of any
breach of Section
2(b).
4. Termination.
The
agreements set forth in Section
1
shall
terminate upon the earliest to occur of (a) the termination of the Merger
Agreement in accordance with its terms, or (b) the Effective Time. Upon such
termination, no party shall have any further obligations or liabilities pursuant
to Section
1,
provided that no such termination shall relieve any party from liability
for any
breach of any such agreements prior to such termination.
5. Enforcement
of Agreement.
The
parties hereto agree that irreparable damage would occur in the event that
the
provisions set forth in Section
1
of this
letter agreement were not performed in accordance with their specified terms
or
were otherwise breached. It is accordingly agreed that the parties shall
be
entitled to an injunction or injunctions to prevent such breaches and to
specific performance of such terms and provisions in addition to any other
remedy to which they are entitled at law or in equity.
6. Miscellaneous.
(a) Successors
and Assigns.
This
letter agreement shall inure to the benefit of, and be binding upon, the
parties
hereto and their respective heirs, legal representatives and permitted assigns.
(b) Entire
Agreement.
This
letter agreement constitutes the entire agreement among the parties hereto
with
respect to the subject matter hereof and supersedes all prior agreements
and
understandings, both written and oral, among the parties with respect to
the
subject matter hereof.
(c) Construction.
The
headings in this letter agreement are for convenience only and shall not
be
considered a part of or affect the construction or interpretation of any
provision of this letter agreement. As used herein, unless the context otherwise
requires, all references to “Section” are to a section of this letter
agreement.
(d) Counterparts.
This
letter agreement may be executed in any number of counterparts, each of which
shall constitute one and the same instrument.
(e) Amendment.
This
letter agreement may not be amended except by an instrument in writing signed
by
the parties hereto.
(f) Severability.
If any
term or other provision of this letter agreement is determined to be invalid,
illegal or incapable of being enforced, all other conditions and provisions
of
this letter agreement shall remain in full force and effect.
(g) Notices.
All
notices, consents, requests, instructions, approvals and other communications
provided for herein and all legal process in regard hereto shall be validly
given, made or served, if in writing and delivered personally or sent by
certified mail (return receipt requested), postage prepaid, recognized national
or international air courier or by facsimile transmission electronically
confirmed:
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if
to
Netsmart or Acquisition:
Netsmart
Technologies, Inc.
▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Fax:
(▇▇▇) ▇▇▇-▇▇▇▇
Attn.:
▇▇▇▇▇ ▇▇▇▇▇▇, CEO
with
a
copy to:
Kramer,
Coleman, Wactlar & ▇▇▇▇▇▇▇▇▇, P.C.
▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Fax:
(▇▇▇) ▇▇▇-▇▇▇▇
Attn.:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq. or
▇▇▇▇▇▇
▇.
▇▇▇▇▇▇▇, Esq.
if
to the
Shareholder, to the address set forth below the Shareholder’s signature to this
letter agreement,
with
a
copy to:
Vorys,
▇▇▇▇▇, ▇▇▇▇▇▇▇ and ▇▇▇▇▇ LLP
▇▇
▇▇▇▇
▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇
Fax:
(▇▇▇) ▇▇▇-▇▇▇▇
Attn:
▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
or,
in
each case, at such other address or facsimile number as may be specified
in
writing to the other parties.
(h) Governing
Law.
Except
with respect to the validity of the Merger and the provisions set forth in
Section
1,
which
shall be governed by Ohio law, this letter agreement shall be governed by
and
construed in accordance with the laws of the State of New York, regardless
of
the laws that might otherwise govern under applicable principles of conflicts
of
law thereof.
(i) Officers
and Directors.
The
Shareholder has entered into this letter agreement solely in the Shareholder’s
individual capacity as a shareholder of CMHC, and not in any other capacity,
including the capacity of a director or officer of CMHC. If the Shareholder
is
or becomes during the Voting Period a director or officer of CMHC, then the
Shareholder shall not be deemed to have made any agreement or understanding
herein in his or her capacity as such director or officer, and (ii) nothing
herein will limit or affect, or give rise to any liability of the Shareholder
by
virtue of, any actions taken or to be taken by the Shareholder in his or
her
capacity as a director or officer of CMHC, including any actions taken or
to be
taken in complying with his or her obligations as a director or officer of
CMHC
under Applicable Law (including any fiduciary obligations in such capacities).
[SIGNATURES
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If
the
foregoing is acceptable to you, please so indicate by signing this letter
in the
space provided below and returning such executed copy to the Shareholder,
whereupon this letter will represent our agreement with respect to the
provisions hereof.
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Very
truly yours,
_________________________________
▇▇▇▇
▇▇▇▇▇
Address:6761
▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇
Fax:___________________________
__
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Agreed
and Accepted:
NETSMART
TECHNOLOGIES, INC.
By:_________________________________
▇▇▇▇▇
▇▇▇▇▇▇, CEO
Dated:
September 20, 2005
▇▇▇▇▇
ACQUISITION CORP.
By:_________________________________
Its:_______________________________
Dated:
September 20, 2005
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