Exhibit 10.2
VOTING AGREEMENT
This VOTING AGREEMENT (this "Agreement") dated as of May 5, 2006, among
FMFG ACQUISITIONCO, INC., a corporation organized under the laws of the State of
New Jersey ("Merger Sub"), and each person listed on the signature page hereof
as a shareholder (each, a "Shareholder" and, collectively, the "Shareholders")
of First Montauk Financial Corp. (the "Company").
RECITALS
Each Shareholder "beneficially owns" (as such term is defined in Rule
13d-3 promulgated under the Securities Exchange Act of 1934, as amended) and is
entitled to dispose of (or to direct the disposition of) and to vote (or to
direct the voting of) the number of shares of Common Stock, no par value per
share, of the Company (the "Common Stock") and of Series B Convertible Preferred
Stock, $.10 par value per share, of the Company (the "Series B Preferred Stock"
and, together with the Series A Preferred Stock, the "Stock") set forth opposite
such Shareholder's name on Schedule A hereto (such shares of Stock, together
with all other shares of capital stock of the Company acquired by any
Shareholder after the date hereof and during the term of this Agreement, being
collectively referred to herein as the "Subject Shares").
Concurrently with the execution and delivery of this Agreement, FMFG
Ownership, Inc., a corporation organized under the laws of the State of Delaware
("Parent"), Merger Sub and the Company are entering into an Agreement and Plan
of Merger (the "Merger Agreement") providing for the merger of the Company with
and into Merger Sub, with Merger Sub surviving the Merger (the "Merger") upon
the terms and subject to the conditions set forth therein.
As a condition to entering into the Merger Agreement, Merger Sub has
required that the Shareholders enter into this Agreement, and the Shareholders
desire to enter into this Agreement to induce Merger Sub to enter into the
Merger Agreement.
The Board of Directors of the Company has taken all actions so that the
restrictions contained in the Company's articles of incorporation and the New
Jersey Business Corporation Act (the "NJBCA") applicable to a "business
combination" (as defined in Section 14A:10A-3 of the NJBCA) will not apply to
the execution, delivery or performance of this Agreement or the Merger
Agreement, or to the consummation of the Merger, this Agreement and the Merger
Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual
premises, representations, warranties, covenants and agreements contained
herein, the parties hereto, intending to be legally bound, hereby agree as
follows:
1. Representations and Warranties of Each Shareholder.
Each Shareholder, severally but not jointly, represents and warrants to
Merger Sub as follows:
(a) Authority. Such Shareholder, if not an individual, is duly organized,
validly existing and in good standing under the laws of its jurisdiction of
incorporation or organization (as applicable). Such Shareholder has all
requisite legal power (corporate or other) and authority to execute and deliver
this Agreement and to consummate the transactions contemplated hereby. This
Agreement has been duly authorized, executed and delivered by such Shareholder
and constitutes a valid and binding obligation of such Shareholder enforceable
in accordance with its terms subject to (i) bankruptcy, insolvency, moratorium
and other similar laws now or hereafter in effect relating to or affecting
creditors' rights generally, and (ii) general principles of equity (regardless
of whether considered in a proceeding at law or in equity). If such Shareholder
is married and the Subject Shares of such Shareholder constitute community
property or otherwise need spousal or other approval for this Agreement to be
legal, valid and binding with respect to such Subject Shares, this Agreement has
been duly authorized, executed and delivered by, and constitutes a valid and
binding agreement of, such Shareholder's spouse, enforceable against such spouse
in accordance with its terms subject to (i) bankruptcy, insolvency, moratorium
and other similar laws now or hereafter in effect relating to or affecting
creditors' rights generally, and (ii) general principles of equity (regardless
of whether considered in a proceeding at law or in equity). If such Shareholder
is a trust, no consent of any beneficiary is required for the execution and
delivery of this Agreement or the consummation of the transactions contemplated
hereby.
(b) No Conflicts. (i) No filing by such Shareholder with any governmental
body or authority, and no authorization, consent or approval of any other person
is necessary for the execution of this Agreement by such Shareholder and the
consummation by such Shareholder of the transactions contemplated hereby and
(ii) none of the execution and delivery of this Agreement by such Shareholders,
the consummation by such Shareholder of the transactions contemplated hereby or
compliance by such Shareholder with any of the provisions hereof shall (A) if
such Shareholder is not an individual, conflict with or result in any breach of
the organizational documents of such Shareholder, (B) result in, or give rise
to, a violation or breach of or a default under (with or without notice or lapse
of time, or both) any of the terms of any material contract, trust agreement,
loan or credit agreement, note, bond, mortgage, indenture, lease, permit,
understanding, agreement or other instrument or obligation to which such
Shareholder is a party or by which such Shareholder or any of its Subject Shares
or assets may be bound, or (C) violate any applicable order, writ, injunction,
decree, judgment, statute, rule or regulation, except for any of the foregoing
as would not reasonably be expected to prevent such Shareholder from performing
its obligations under this Agreement.
(c) The Subject Shares. Schedule A sets forth, opposite the Shareholder's
name, the number of Subject Shares over which such Shareholder has record or
beneficial ownership as of the date hereof. As of the date hereof, the
Shareholder is the record or beneficial owner of the Subject Shares denoted as
being owned by such Shareholder on Schedule A (or is trustee of a trust that is
the record holder of and whose beneficiaries are the beneficial owners of such
Subject Shares) and has the sole power to vote (or cause to be voted) such
Subject Shares. Except as set forth on such Schedule A, such Shareholder nor any
controlled affiliate of a Shareholder owns or holds any right to acquire any
additional shares of any class of capital stock of the Company or other
securities of the Company or any interest therein or any voting rights with
respect to any securities of the Company. Such Shareholder has good and valid
title to the Subject Shares denoted as being owned by such Shareholder on
Schedule A, free and clear of any and all pledges, mortgages, liens, charges,
proxies, voting agreements, encumbrances, adverse claims, options, security
interests and demands of any nature or kind whatsoever, other than those created
by this Agreement, as disclosed on Schedule A, or as would not prevent such
Shareholder from performing its obligations under this Agreement.
(d) Reliance By Merger Sub. Such Shareholder understands and acknowledges
that Merger Sub is entering into the Merger Agreement in reliance upon such
Shareholder's execution and delivery of this Agreement.
(e) Litigation. As of the date hereof, there is no action, proceeding or
investigation pending or threatened against such Shareholder that questions the
validity of this Agreement or any action taken or to be taken by such
Shareholder in connection with this Agreement.
2. Representations and Warranties of Merger Sub.
Merger Sub hereby represents and warrants to the Shareholders as
follows:
(a) Due Organization, etc. Merger Sub is duly organized, validly existing
and in good standing under the laws of the State of New Jersey. Merger Sub has
all requisite corporate power and authority to execute and deliver this
Agreement and to consummate the transactions contemplated hereby. This Agreement
has been duly authorized, executed and delivered by Merger Sub and constitutes a
valid and binding obligation of Merger Sub enforceable in accordance with its
terms subject to (i) bankruptcy, insolvency, moratorium and other similar laws
now or hereafter in effect relating to or affecting creditors' rights generally,
and (ii) general principles of equity (regardless of whether considered in a
proceeding at law or in equity).
(b) Conflicts. (i) No filing by Merger Sub with any governmental body or
authority, and no authorization, consent or approval of any other person is
necessary for the execution of this Agreement by Merger Sub and the consummation
by Merger Sub of the transactions contemplated hereby and (ii) none of the
execution and delivery of this Agreement by Merger Sub, the consummation by
Merger Sub of the transactions contemplated hereby or compliance by Merger Sub
with any of the provisions hereof shall (A) conflict with or result in any
breach of the organizational documents of Merger Sub, (B) result in, or give
rise to, a violation or breach of or a default under (with or without notice or
lapse of time, or both) any of the terms of any material contract, loan or
credit agreement, note, bond, mortgage, indenture, lease, permit, understanding,
agreement or other instrument or obligation to which Merger Sub is a party or by
which Merger Sub or any of its assets may be bound, or (C) violate any
applicable order, writ, injunction, decree, judgment, statute, rule or
regulation, except for any of the foregoing as would not prevent Merger Sub from
performing its obligations under this Agreement.
(c) Reliance by the Shareholders. Merger Sub understands and acknowledges
that the Shareholder is entering into this Agreement in reliance upon the
execution and delivery of the Merger Agreement by Merger Sub.
3. Covenants of the Shareholder.
Until the termination of this Agreement in accordance with Section 5,
such Shareholder, in his, her or its capacity as such, agrees as follows:
(a) At the Company Meeting or at any adjournment, postponement or
continuation thereof or in any other circumstances occurring prior to the
Company Meeting upon which a vote, consent or other approval (including by
written consent) with respect to the Merger and the Merger Agreement is sought ,
such Shareholder shall vote (or cause to be voted) the Subject Shares (and each
class thereof) (i) in favor of the approval of the Merger and the approval and
adoption of the Merger Agreement and the transactions contemplated hereby and
any matter that could reasonably be expected to facilitate the Merger; (ii) in
favor of any alternative structure as may be agreed upon by Parent, Merger Sub
and the Company reflect the acquisition by Parent and Merger Sub of the Company
or of control of the Company, provided that such alternative structure is on
terms in the aggregate no less favorable to the Company's stockholders that the
terms of the Merger Agreement; and (iii) except with the written consent of
Merger Sub, against any Company Alternative Proposal, the consummation of any
Superior Proposal or any action, proposal, or agreement or transaction (other
than the Merger, the Merger Agreement or the transaction contemplated thereby)
that would result in a breach of any covenant, representation or warranty or any
other obligation or agreement of the Company under the Merger Agreement which
could result in any of the conditions to the Company's obligations under the
Merger Agreement not being fulfilled or which could be inconsistent with the
Merger of any other transaction contemplated by the Merger Agreement. Any such
vote shall be cast or consent shall be given in accordance with such procedures
relating thereto so as to ensure that it is duly counted for purposes of
determining that a quorum is present and for purposes of recording the results
of such vote or consent. Such Shareholder agrees not to enter into any agreement
or commitment with any person the effect of which would be inconsistent with or
violative of the provisions and agreements contained in this Section 3(a). This
Agreement is intended to bind the Shareholder as a shareholder of the Company
only with respect to the specific matters set forth herein.
(b) Such Shareholder agrees not to, directly or indirectly, (i) sell,
transfer, tender, pledge, encumber, assign or otherwise dispose of
(collectively, a "Transfer") or enter into any agreement, option or other
arrangement with respect to, or consent to a Transfer of, or convert or agree to
convert, any or all of the Subject Shares to any person, other than in
accordance with the Merger Agreement, or (ii) grant any proxies (other than the
Company proxy card in connection with the Company Meeting if and to the extent
such proxy is consistent with the Shareholder's obligations under Section 3(a)
hereof), deposit any Subject Shares into any voting trust or enter into any
voting arrangement, whether by proxy, voting agreement or otherwise, with
respect to any of the Subject Shares, other than pursuant to this Agreement.
Such Shareholder further agrees not to commit or agree to take any of the
foregoing actions or take any action that would have the effect of preventing,
impeding, interfering with or adversely affecting its ability to perform its
obligations under this Agreement.
(c) Such Shareholder shall not, nor shall such Shareholder permit any
controlled affiliate of such Shareholder to, nor shall such Shareholder act in
concert with or permit any controlled affiliate to act in concert with any
person to make, or in any manner participate in, directly or indirectly, a
"solicitation" (as such term is used in the rules of the Securities and Exchange
Commission) of proxies or powers of attorney or similar rights to vote, or seek
to advise or influence any person with respect to the voting of, any shares of
Common Stock intended to facilitate any Company Alternative Proposal or to cause
shareholders of the Company not to vote to approve and adopt the Merger
Agreement. Such Shareholder shall not, and shall direct any investment banker,
attorney, agent or other adviser or representative of such Shareholder not to,
directly or indirectly, through any officer, director, agent or otherwise, enter
into, solicit, initiate, conduct or continue any discussions or negotiations
with, or knowingly encourage or respond to any inquiries or proposals by, or
provide any information to, any person, other than Merger Sub, relating to any
Company Alternative Proposal. Such Shareholder hereby represents that, as of the
date hereof, it is not engaged in discussions or negotiations with any party
other than Merger Sub with respect to any Company Alternative Proposal.
(d) The Shareholder agrees that any shares of Stock of the Company that the
Shareholder purchases or with respect to which the Shareholder otherwise
acquires beneficial ownership after the date of this Agreement and prior to the
Expiration Date ("New Shares"), and any and all other shares or securities of
the Company issued, exchanged, issuable or exchangeable in respect of New Shares
shall be subject to the terms and conditions of this Agreement to the same
extent as if they constituted shares of Stock.
4. Shareholder Capacity.
No Person executing this Agreement who is or becomes during the term of
this Agreement a director or officer of the Company shall be deemed to make any
agreement or understanding in this Agreement in such Person's capacity as a
director or officer. The Shareholder is entering into this Agreement solely in
his or her capacity as the record holder or beneficial owner of, or the trustee
of a trust whose beneficiaries are the beneficial owners of, such Shareholder's
Subject Shares and nothing herein shall limit or affect any actions taken by the
Shareholder in his or her capacity as a director or officer of the Company to
the extent specifically permitted by the Merger Agreement or following the
termination of the Merger Agreement.
5. Termination.
This Agreement shall terminate (i) upon the earlier of (A) the
Effective Time of the Merger, and (B) the termination of the Merger Agreement,
or (ii) at any time upon notice by Merger Sub to the Shareholders; provided that
in the event of a material change to the Merger Consideration, the form of
payment of the Merger Consideration or the timing of such payment, the
Shareholder shall have the right to terminate this Agreement. No party hereto
shall be relieved from any liability for intentional breach of this Agreement by
reason of any such termination. Notwithstanding the foregoing, Section 6 and
Sections 10 through 21, inclusive, of this Agreement shall survive the
termination of this Agreement.
6. Appraisal Rights.
To the extent permitted by applicable law, the Shareholder hereby
waives any rights of appraisal or rights to dissent from the Merger that it may
have under applicable law. 7. Publication.
Such Shareholder hereby authorizes Merger Sub and the Company to
publish and disclose in the Proxy Statement and the Registration Statement
(including any and all documents and schedules filed with the Securities and
Exchange Commission ("SEC") relating thereto) such Shareholder's identity and
ownership of shares of Stock of the Company and the nature of its commitments,
arrangements and understandings pursuant to this Agreement.
8. Governing Law.
This Agreement shall be governed by and construed in accordance with
the laws of the State of Delaware, without regard to any principles or rules of
conflicts of laws thereof.
9. Jurisdiction; Waiver of Jury Trial.
(a) Each of the parties hereto irrevocably and unconditionally (i) agrees
that any legal suit, action or proceeding brought by any party hereto arising
out of or based upon this Agreement or the transactions contemplated hereby may
be brought in the courts of the State of New Jersey or the United States
District Court for the District of New Jersey (each, a "New Jersey Court"), (ii)
waives, to the fullest extent it may effectively do so, any objection which it
may now or hereafter have to the laying of venue of any such proceeding brought
in any New Jersey Court, and any claim that any such action or proceeding
brought in any New Jersey Court has been brought in an inconvenient forum, and
(iii) submits to the non-exclusive jurisdiction of New Jersey Courts in any
suit, action or proceeding. Each of the parties agrees that a judgment in any
suit, action or proceeding brought in a New Jersey Court shall be conclusive and
binding upon it and may be enforced in any other courts to whose jurisdiction it
is or may be subject, by suit upon such judgment.
(b) Each of the parties agrees and acknowledges that any controversy that
may arise under this Agreement is likely to involve complicated and difficult
issues, and therefore each such party hereby irrevocably and unconditionally
waives any right such party may have to a trial by jury in respect of any
litigation directly or indirectly arising out of or relating to this Agreement,
or the breach, termination or validity of this Agreement.
10. Specific Performance.
The Shareholder acknowledges and agrees that (i) the covenants,
obligations and agreements of such Shareholder contained in this Agreement
relate to special, unique and extraordinary matters, (ii) Merger Sub is and will
be relying on such covenants in connection with entering into the Merger
Agreement and the performance of its obligations under the Merger Agreement, and
(iii) a violation of any of the terms of such covenants, obligations or
agreements will cause Merger Sub irreparable injury for which adequate remedies
are not available at law. Therefore, such Shareholder agrees that Merger Sub
shall be entitled to seek an injunction, restraining order or such other
equitable relief (without the requirement to post bond) as a court of competent
jurisdiction may deem necessary or appropriate to restrain such Shareholder from
committing any violation of such covenants, obligations or agreements.
11. Amendment, Waivers, Etc.
Neither this Agreement nor any term hereof may be amended or otherwise
modified other than by an instrument in writing signed by Merger Sub and the
Shareholders. No provision of this Agreement may be waived, discharged or
terminated other than by an instrument in writing signed by the party against
whom the enforcement of such waiver, discharge or termination is sought.
12. Assignment; No Third Party Beneficiaries.
This Agreement shall not be assignable or otherwise transferable by a
party without the prior consent of the other parties, and any attempt to so
assign or otherwise transfer this Agreement without such consent shall be void
and of no effect; provided, however, that Merger Sub may, in its sole
discretion, assign or transfer all or any of its rights under this Agreement to
any affiliate of Merger Sub, including any direct or indirect wholly-owned
subsidiary of Merger Sub; provided that any such assignment shall not relieve
Merger Sub of its obligations hereunder. This Agreement shall be binding upon
the respective heirs, legal representatives and permitted transferees of the
parties hereto. Nothing in this Agreement shall be construed as giving any
Person, other than the parties hereto and their heirs, legal representatives and
permitted transferees, any right, remedy or claim under or in respect of this
Agreement or any provision hereof. No failure or delay by any party in
exercising any right, power or privilege under this Agreement shall operate as a
waiver thereof nor shall any single or partial exercise thereof preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege. The rights and remedies provided herein shall be cumulative and not
exclusive of any rights or remedies provided by law.
13. Notices.
All notices, consents, requests, instructions, approvals and other
communications provided for in this Agreement shall be in writing and shall be
deemed validly given upon personal delivery or one day after being sent by
overnight courier service or by telecopy (so long as for notices or other
communications sent by telecopy, the transmitting telecopy machine records
electronic conformation of the due transmission of the notice), at the following
address or telecopy number, or at such other address or telecopy number as a
party may designate to the other parties by written notice:
If to any Shareholder, to: the address set forth under such
Shareholder's name on Schedule A
hereto or to such other address
If to the Company, to: Mr. Victor K. Kurylak
President and CEO
First Montauk Financial Corp.
Parkway 109 Office Center
328 Newman Springs Road
Red Bank, NJ 07701
with a copy to: Goldstein & DiGioia, LLP
45 Broadway, 11th Floor
New York, NY 10006
Attention: Victor J. DiGioia, Esq.
Telephone: (212) 599-3322
Facsimile: (212) 557-0295
If to Merger Sub: FMFGAcquisitionCo, Inc.
10800 Midlothian Turnpike
Suite 309
Richmond, VA 23235
Attention: Lara Coleman
Telephone: (804) 594-3550
Facsimile: (804) 594-3556
with a copy to: Kutak Rock LLP
1650 Farnam Street
Omaha, NE 68102
Attention: Joseph O. Kavan, Esq.
Telephone: (402) 346-6000
Facsimile: (402) 346-1148
14. Severability.
If any provision of this Agreement is held to be invalid or
unenforceable for any reason, it shall be adjusted rather than voided, if
possible, in order to achieve the intent of the parties hereto to the maximum
extent possible. In any event, the invalidity or unenforceability of any
provision of this Agreement in any jurisdiction shall not affect the validity or
enforceability of the remainder of this Agreement in that jurisdiction or the
validity or enforceability of this Agreement, including that provision, in any
other jurisdiction.
15. Integration.
This Agreement (together with the Merger Agreement to the extent
referenced herein), including Schedule A hereto, constitutes the full and entire
understanding and agreement of the parties with respect to the subject matter
hereof and thereof and supersedes any and all prior understandings or agreements
relating to the subject matter hereof and thereof.
16. Section Headings.
The section headings of this Agreement are for convenience of reference
only and are not to be considered in construing this Agreement.
17. Counterparts.
This Agreement may be executed in several counterparts (including by
facsimile), each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
18. Acknowledgement.
The parties hereto acknowledge and agree that this Agreement is entered
into in accordance with the provisions of Section 14A:10A-1 et seq. of the
Business Corporation Act of the State of New Jersey.
19. Capitalized Terms.
For purposes of this Agreement, capitalized terms used and not defined
herein shall have the respective meanings ascribed to them in the Merger
Agreement.
20. Definitions.
References in this Agreement (except as specifically otherwise defined)
to "affiliates" shall mean, as to any person, any other person which, directly
or indirectly, controls, or is controlled by, or is under common control with,
such person. As used in this definition, "control" (including, with its
correlative meanings, "controlled by" and "under common control with") shall
mean the possession, directly or indirectly, of the power to direct or cause the
direction of management or policies of a person, whether through the ownership
of securities or partnership or other ownership interests, by contract or
otherwise. References in the Agreement to "person" shall mean an individual, a
corporation, a partnership, an association, a trust or any other entity, group
(as such term is used in Section 13 of the Securities Exchange Act of 1934, as
amended) or organization, including, without limitation, a governmental body or
authority.
21. Expenses.
If any action at law or in equity is necessary to enforce or interpret
the terms of this Agreement, the prevailing party shall be entitled to
reasonable attorneys' fees, costs and necessary disbursements in addition to any
other relief to which such party may be entitled.
22. Disclosure.
The Shareholder hereby authorizes Merger Sub or its affiliates to
publish or disclose in any requisite report filed by any of them with the SEC,
including, without limitation, a Schedule 13D, his/her identity and the nature
of the commitments, arrangements and understandings under this Agreement.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and date first above written.
FMFG ACQUISITIONCO, INC.
By: /s/ Edward H. Okun
---------------------------------------
Name: Edward H. Okun
Title: President and Chief Executive Officer
[SHAREHOLDER SIGNATURES]
/s/ Herbert Kurinsky
--------------------------------------------
Herbert Kurinsky
/s/ William J. Kurinsky
--------------------------------------------
William J. Kurinsky
WJK Charitable Foundation, Inc.
/s/ William J. Kurinsky
By: ----------------------------------------
Name: William J. Kurinsky
Title: President
/s/ Victor K. Kurylak
--------------------------------------------
Victor K. Kurylak
/s/ Robert I. Rabinowitz
--------------------------------------------
Robert I. Rabinowitz
/s/ Mindy A. Horowitz
--------------------------------------------
Mindy A. Horowitz
/s/ Brian M. Cohen
--------------------------------------------
Brian M. Cohen
EXHIBIT A
SHAREHOLDERS
NUMBER
CLASS OF STOCK: OF
COMMON OR SERIES B SHARES
NAME AND ADDRESS PREFERRED
Herbert Kurinsky Common 339,104
16 Barberry Drive
Ocean, NJ 07712
William J. Kurinsky Common 1,230,823
1504 Bay Road Series B Preferred 197,824
Apt. 1203
Miami Beach, FL 33139
The WJK Charitable Foundation Inc. Common 190,000
501 Silverside Road
Suite 123
Wilmington, DE
Victor K. Kurylak Common 1,250,000
Parkway 109 Office Center
328 Newman Springs Road
Red Bank, NJ 07701
Robert I. Rabinowitz Common 154,500
Parkway 109 Office Center
328 Newman Springs Road
Red Bank, NJ 07701
Mindy A. Horowitz Common 100,000
Parkway 109 Office Center
328 Newman Springs Road
Red Bank, NJ 07701
Brian M. Cohen Common 100,000
Parkway 109 Office Center
328 Newman Springs Road
Red Bank, NJ 07701
TOTAL Common 3,364,427
Series B Preferred 197,824