CONFORMED COPY
VOTING AGREEMENT
AND
IRREVOCABLE PROXY
This VOTING AGREEMENT AND IRREVOCABLE PROXY (this "Agreement"), dated as of
June 11, 2004, by and between UTStarcom, Inc., a Delaware corporation ("UTSI")
and John J. Shalam ("Stockholder").
W I T N E S S E T H:
WHEREAS, as a condition to and contemporaneously with this Agreement,
Audiovox Communications Corp., a Delaware corporation ("ACC"), Quintex Mobile
Communications Corporation, a Delaware corporation and a wholly owned subsidiary
of ACC ("Quintex"), Audiovox Communications Canada Co., a Nova Scotia company
("ACCC"; and, together with ACC and Quintex, collectively, the "Seller"), UTSI,
UTStarcom Canada Company, a Nova Scotia company and, with respect to certain
sections only, Audiovox Corporation, a Delaware corporation (the "Company") are
entering into an Asset Purchase Agreement (the "Asset Purchase Agreement"),
dated as of the date hereof, pursuant to which UTSI has, among other things,
agreed to acquire certain of the assets, and assume certain of the liabilities,
of the Seller, all on the terms and subject to the conditions more particularly
set forth therein;
WHEREAS, the Company beneficially owns 75% of the common stock of ACC, and
Quintex and ACCC are wholly owned subsidiaries of ACC;
WHEREAS, as of the date hereof, Stockholder directly owns the number of
Voting Shares (as defined herein) of the Company as set forth on Attachment A
hereto (the "Owned Shares");
WHEREAS, pursuant to the Asset Purchase Agreement, the Company has agreed
to hold a meeting of its stockholders for the purpose of, among other things,
having such stockholders consider and vote on proposals to approve the Asset
Purchase Agreement and the transactions contemplated thereby; and
WHEREAS, as a condition to UTSI's agreement to enter into the Asset
Purchase Agreement, Stockholder has agreed to vote all of the Owned Shares,
together with any shares of Class A Common Stock, par value $0.01 per share, of
the Company and Class B Common Stock, par value $0.01 per share, of the Company,
acquired after the date of this Agreement, whether upon the exercise of options,
conversion of convertible securities or otherwise, and any other voting
securities of the Company (whether acquired heretofore or hereafter) that are
directly owned by Stockholder (collectively, the "Voting Shares"), in favor of
the approval of the Asset Purchase Agreement and the transactions contemplated
thereby.
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration given to each party hereto, the receipt and sufficiency
of which is hereby acknowledged, the parties agree as follows:
Exhibit 99.2
1
ARTICLE I
AGREEMENT TO VOTE; IRREVOCABLE PROXY
SECTION 1.01. Agreement to Vote. Stockholder hereby agrees that, during the
time this Agreement is in effect, at any meeting of the stockholders of the
Company, however called, or any adjournment thereof, or by written consent,
Stockholder shall be present (in person or by proxy) and vote (or cause to be
voted) all of its Voting Shares in favor of the approval of the Asset Purchase
Agreement and the transactions contemplated thereby.
SECTION 1.02. Irrevocable Proxy. Solely with respect to the matters
described in Section 1.01 hereof, for so long as this Agreement has not been
terminated pursuant to its terms, Stockholder hereby irrevocably appoints UTSI
as its proxy (which proxy is irrevocable and which appointment is coupled with
an interest, including for purposes of Section 212 of the Delaware General
Corporation Law) to vote solely on the matters described in Section 1.01, and in
accordance therewith. Stockholder agrees to execute any further agreement or
form reasonably necessary or appropriate to confirm and effectuate the grant of
the proxy contained herein.
ARTICLE II
TERMINATION
SECTION 2.01. Termination of this Agreement. This Agreement shall (a)
terminate automatically on the termination of the Asset Purchase Agreement in
accordance with its terms and (b) be deemed satisfied in full and terminated at
the Closing (as defined in the Asset Purchase Agreement), provided, however,
that the provisions of Section 7.05 and Section 7.06 hereof shall survive in
accordance with their terms.
SECTION 2.02. Effect of Termination. Upon termination of this Agreement
pursuant to Section 2.01 hereof, this Agreement shall become void and of no
effect with no liability on the part of any party hereto; provided, however, no
such termination shall relieve any party hereto from any liability for any
breach of this Agreement occurring prior to such termination; provided further,
that Section 7.05 and Section 7.06 hereof shall not be void and the parties
shall continue to be liable in connection therewith.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF STOCKHOLDER
Stockholder hereby represents and warrants to UTSI as follows:
SECTION 3.01. Power; Due Authorization; Binding Agreement. Stockholder has
full legal capacity, power and authority to execute and deliver this Agreement
to perform his obligations hereunder and to consummate the transactions
contemplated hereby. This Agreement has been duly and validly executed and
delivered by Stockholder and constitutes a valid and binding agreement of
Stockholder, enforceable against Stockholder in accordance with its terms,
except that enforceability may be subject to the effect of any applicable
bankruptcy, reorganization, insolvency, moratorium or other similar laws
affecting or relating to the enforcement of creditors rights generally
Exhibit 99.2
2
and to general principles of equity.
SECTION 3.02. Ownership of Shares. On the date hereof, the Owned Shares set
forth opposite Stockholder's name on Attachment A hereto are owned by
Stockholder and constitute all of the Owned Shares directly owned by
Stockholder, free and clear of any claims, liens, encumbrances, and security
interests, including, for greater certainty, any right in favor of a third party
to exercise voting rights with respect to such shares. As of the date hereof,
Stockholder has, and as of the date of the stockholder meeting of the Company
(or action by written consent) in connection with the Asset Purchase Agreement
and the transactions contemplated thereby, Stockholder will have (except as
otherwise permitted by this Agreement), sole voting power and sole dispositive
power with respect to all of the Owned Shares.
SECTION 3.03. No Conflicts. The execution and delivery of this Agreement by
Stockholder do not, and the performance of the terms of this Agreement by
Stockholder will not, (a) require Stockholder to obtain the consent or approval
of, or make any filing with or notification to, any governmental or regulatory
authority, domestic or foreign, (b) require the consent or approval of any other
person pursuant to any material agreement, obligation or instrument binding on
Stockholder or his properties and assets, (c) conflict with or violate any law,
rule, regulation, order, judgment or decree applicable to Stockholder or
pursuant to which any of his properties or assets are bound or (d) violate any
other agreement to which Stockholder is a party including, without limitation,
any voting agreement, stockholders agreement, irrevocable proxy or voting trust,
except for any consent, approval, filing or notification which has been obtained
as of the date hereof or the failure of which to obtain, make or give would not,
or any conflict or violation which would not, prevent, delay or materially
adversely affect the consummation of the transactions contemplated by this
Agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF UTSI
UTSI hereby represents and warrants to Stockholder as follows: UTSI is a
corporation duly organized and validly existing under the laws of the State of
Delaware. UTSI has full corporate power and authority to execute and deliver
this Agreement to perform its obligations hereunder and thereunder and to
consummate the transactions contemplated hereby. The execution and delivery of
this Agreement and the consummation by UTSI of the transactions contemplated
hereby have been duly and validly authorized by all necessary corporate action
on the part of UTSI, and no other proceedings on the part of UTSI are necessary
to authorize this Agreement or to consummate the transactions contemplated
hereby. This Agreement has been duly and validly executed and delivered by UTSI
and constitutes a valid and binding agreement of UTSI, except that
enforceability may be subject to the effect of any applicable bankruptcy,
reorganization, insolvency, moratorium or other similar laws affecting or
relating to the enforcement of creditors rights generally and to general
principles of equity.
Exhibit 99.2
3
ARTICLE V
CERTAIN COVENANTS OF STOCKHOLDER
Stockholder hereby covenants and agrees with UTSI as follows:
SECTION 5.01. Restriction On Transfer, Proxies and Non-Interference. Except
as contemplated herein, Stockholder hereby agrees, while this Agreement is in
effect, not to (a) sell, transfer, pledge, encumber, assign or otherwise dispose
of, or enter into any contract, option or other arrangement or understanding
with respect to the sale, transfer, pledge, encumbrance, assignment or other
disposition of, or limitation on the voting rights of, any of the Voting Shares,
(b) grant any proxies or powers of attorney, deposit any Voting Shares into a
voting trust or enter into a voting agreement with respect to any Voting Shares,
(c) take any action that would cause any representation or warranty of
Stockholder contained herein to become untrue or incorrect or have the effect of
preventing or disabling Stockholder from performing his obligations under this
Agreement or (d) commit or agree to take any of the actions prohibited by this
sentence provided, that nothing this Agreement will limit or restrict
Stockholder from acting in such Stockholder's capacity as an officer or director
of the Company (it being understood that this Agreement shall apply to
Stockholder solely in his capacity as a stockholder of the Company). Any
transfer of Voting Shares not permitted hereby shall be null and void.
Stockholder agrees that any such prohibited transfer may and should be enjoined.
If any involuntary transfer of any of the Voting Shares shall occur (including,
but not limited to, a sale by Stockholder's trustee in any bankruptcy, or a sale
to a purchaser at any creditor's or court sale), the transferee (which term, as
used herein, shall include any and all transferees and subsequent transferees of
the initial transferee) shall take and hold such Voting Shares subject to all of
the restrictions, liabilities and rights under this Agreement, which shall
continue in full force and effect; provided, however, that the restriction in
this paragraph shall not apply to any sale, transfer, pledge, encumbrance,
assignment or other disposition if, after such action, the remaining Voting
Shares constitute 50.5% of the voting power of all outstanding shares of the
Company.
SECTION 5.02. Additional Shares. Stockholder hereby agrees, while this
Agreement is in effect, to promptly notify UTSI of the number of any new Voting
Shares acquired by Stockholder, if any, after the date hereof. Any such shares
shall be subject to the terms of this Agreement.
SECTION 5.03. Further Assurances. From time to time, at the request of UTSI
or Stockholder and without further consideration, Stockholder or UTSI,
respectively, shall execute and deliver such additional documents and take all
such further action as may be necessary or desirable to consummate and make
effective the transactions contemplated by this Agreement.
ARTICLE VI
STOP TRANSFER ORDER
In furtherance of this Agreement, and concurrently herewith, Stockholder
shall authorize the Company or the Company's counsel to notify the Company's
transfer agent that there is a stop transfer order with respect to the Voting
Shares that constitute 50.5% of the voting power of all outstanding shares of
the Company. At the request of UTSI, Stockholder shall cause to be provided to
UTSI evidence of such stop transfer order.
Exhibit 99.2
4
ARTICLE VII
MISCELLANEOUS
SECTION 7.01. Non-Survival. The representations and warranties made herein
shall not survive the termination of this Agreement.
SECTION 7.02. Entire Agreement; Assignment. This Agreement constitutes the
entire agreement among the parties with respect to the subject matter hereof and
supersedes all other prior agreements and understandings, both written and oral,
among the parties with respect to the subject matter hereof. Nothing in this
Agreement, express or implied, is intended to or shall confer upon any other
person any right, benefit or remedy of any nature whatsoever under or by reason
of this Agreement. This Agreement shall not be assigned by operation of law or
otherwise and shall be binding upon and inure solely to the benefit of each
party hereto.
SECTION 7.03. Amendments This Agreement may not be modified, amended,
altered or supplemented, except upon the execution and delivery of a written
agreement executed by each of Stockholder and UTSI.
SECTION 7.04. Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly received if so given) by hand delivery, by facsimile
transmission or by mail (registered or certified mail, postage prepaid, return
receipt requested) or by any courier service, such as Federal Express, providing
proof of delivery. All communications hereunder shall be delivered to the
respective parties at the following addresses:
(a) If to Stockholder:
Audiovox Corporation
150 Marcus Blvd.
Hauppauge, NY 11788
Attention: John J. Shalam
with a copy to:
Levy, Stopol & Camelo, LLP
190 EAB Plaza
East Tower-14th fl.
Uniondale, NY 11556
Attention: Robert S. Levy
Exhibit 99.2
5
(b) If to UTSI:
UTStarcom Inc.
1275 Harbor Bay Parkway
Alameda, CA 94502
Telecopy: (510) 864-8802
Attention: General Counsel
with a copy to:
Shearman & Sterling LLP
1080 Marsh Road
Menlo Park, CA 94025
Telecopy: (650) 838-3699
Attention: Carmen Chang, Esq.
or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above.
SECTION 7.05. Governing Law.
(a) This Agreement shall be governed by and construed in accordance with
the laws of the State of Delaware, regardless of the laws that might otherwise
govern under applicable principles of conflicts of laws thereof.
(b) Each party hereto irrevocably submits to the jurisdiction of any
Delaware state court or any federal court sitting in the State of Delaware in
any action arising out of or relating to this Agreement, and hereby irrevocably
agrees that all claims in respect of such action may be heard and determined in
such Delaware state or federal court. Each party hereto hereby irrevocably
waives, to the fullest extent it may effectively do so, the defense of an
inconvenient forum to the maintenance of such action or proceeding. The parties
hereto further agree, to the extent permitted by law, that final and
unappealable judgment against any of them in any action or proceeding
contemplated above shall be conclusive and may be enforced in any other
jurisdiction within or outside the United States by suit on the judgment, a
certified copy of which shall be conclusive evidence of the fact and amount of
such judgment.
(c) To the extent that any party hereto has or hereafter may acquire any
immunity from jurisdiction of any court or from any legal process (whether
through service or notice, attachment prior to judgment, attachment in aid of
execution, execution or otherwise) with respect to itself or its property, each
party hereto hereby irrevocably waives such immunity in respect of its
obligations with respect to this Agreement.
(d) Each party hereto waives, to the fullest extent permitted by applicable
laws, any right it may have to a trial by jury in respect of any action, suit or
proceeding arising out of or relating to this Agreement. Each party hereto
certifies that it has been induced to enter into this Agreement by, among other
things, the mutual waivers and certifications set forth above in this Section.
Exhibit 99.2
6
SECTION 7.06. Remedies. (a) Each of Stockholder and UTSI recognize and
acknowledge that a breach by it of any covenants or agreements contained in this
Agreement will cause the other party to sustain irreparable injury and damages,
for which money damages would not provide an adequate remedy, and therefore each
of Stockholder and UTSI agrees that in the event of any such breach by the
other, Stockholder or UTSI, as the case may be, shall be entitled to the remedy
of specific performance of such covenants and agreements and injunctive and
other equitable relief.
(b) In the event of (i) a breach of the covenants and agreements contained
in this Agreement by Stockholder and (ii) a termination of the Asset Purchase
Agreement by UTSI pursuant to Section 9.01(e) of the Asset Purchase Agreement,
if UTSI elects to not enforce, or is unsuccessful in attempting to enforce, its
rights in Section 7.06(a) above and elects to not attempt, or is unsuccessful in
attempting, to consummate the transactions contemplated by the Asset Purchase
Agreement, UTSI may elect to seek money damages for such breach by Stockholder.
In such circumstances, UTSI and Stockholder hereby acknowledge and agree that
the actual damages suffered by UTSI for such breach might be difficult and
costly to determine and therefore agree that such damages would, at a minimum,
be equal to 3.5% of the Purchase Price set forth in the Asset Purchase Agreement
(the "Minimum Damages Amount"). Stockholder and UTSI further agree that the
actual damages suffered by UTSI in such circumstances, as a consequence of such
breach by Stockholder, may exceed the Minimum Damages Amount and such amount
shall in no way limit the amount of additional damages that UTSI may seek or
recover hereunder.
SECTION 7.07. Counterparts. This Agreement may be executed by facsimile and
in two or more counterparts, each of which shall be deemed to be an original,
but all of which together shall constitute one and the same Agreement.
SECTION 7.08. Descriptive Headings. The descriptive headings used herein
are inserted for convenience of reference only and are not intended to be part
of or to affect the meaning or interpretation of this Agreement.
SECTION 7.09. Severability. Whenever possible, each provision or portion of
any provision of this Agreement will be interpreted in such manner as to be
effective and valid under applicable law but if any provision or portion of any
provision of this Agreement is held to be invalid, illegal or unenforceable in
any respect under any applicable law or rule in any jurisdiction, such
invalidity, illegality or unenforceability will not affect any other provision
or portion of any provision in such jurisdiction, and this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision or portion of any provision had never been
contained herein.
[Remainder of page intentionally blank]
Exhibit 99.2
7
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
UTSTARCOM, INC.
By: /s/ Mike Sophie
Name: Mike Sophie
Title: CFO & SVP
JOHN J. SHALAM
By: /s/ John J. Shalam
Name: John J. Shalam
Title:
Exhibit 99.2
8
ATTACHMENT A
1,918,977 shares of Class A Common Stock
2,144,152 shares of Class B Common Stock
Exhibit 99.2
9