Document:

exv4w2

 

Exhibit 4.2

VOTING AGREEMENT

     This Voting Agreement, dated as of October 18, 2006 (this “Agreement”), is by and
among Vertical Communications, Inc., a Delaware corporation (“Vertical”), Vodavi
Technology, Inc., a Delaware corporation (the “Company”), and LG-Nortel Co. Ltd
(“Stockholder”).

W I T N E S S E T H

     WHEREAS, as of the date hereof, Stockholder owns beneficially the number of shares of common
stock of the Company set forth opposite Stockholder’s name on Schedule I hereto (all shares
so owned and which may hereafter be acquired by Stockholder prior to the termination of this
Agreement, whether upon the exercise of options, conversion of convertible securities, exercise of
warrants or by means of purchase, dividend, distribution or otherwise, being referred to herein
with respect to Stockholder as the “Stockholder Shares”); and

     WHEREAS, contemporaneously with the execution and delivery of this Agreement, the Company is
entering into an Agreement and Plan of Merger, dated as of the date hereof (as such agreement may
hereafter be amended from time to time, the “Merger Agreement”), along with Vertical, and
Vertical Acquisition Sub Inc., a Delaware corporation and a wholly owned subsidiary of Vertical
(“Sub”), which provides for, upon the terms and subject to the conditions set forth
therein, the merger of Sub with and into the Company (the “Merger”); and

     WHEREAS, pursuant to the Merger Agreement, the Company has agreed to call a special meeting of
its stockholders for the purpose of (the “Proposal”); and

     WHEREAS, in consideration of Vertical entering into the Merger Agreement and incurring certain
related fees and expenses relating to the Merger, Stockholder has agreed to enter into this
Agreement; and

     WHEREAS, Vodavi is a party to this Agreement for the purpose of facilitating certain
continuing relationships between Stockholder and Vertical following the Effective Time.

     NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and agreements
herein contained, and intending to be legally bound hereby, the Company, Vertical and Stockholder
hereby agree as follows:

ARTICLE I.

VOTING OF SHARES; AND OTHER COVENANTS OF STOCKHOLDER AND VERTICAL

     SECTION 1.1. Voting of Shares. From the date hereof until termination of this
Agreement pursuant to Section 3.2 hereof (the “Term”), at any meeting of the stockholders
of the Company called to vote on the Proposal or at any adjournment or postponement thereof, and in
any action by consent of the stockholders of the Company with respect to which approval of the
Proposal is sought, Stockholder shall (A) appear at such meeting or otherwise cause its Stockholder
Shares to be counted as present thereat for purposes of establishing a quorum and

 

 

(B) vote (or cause to be voted) its Stockholder Shares in favor of the Proposal and such other
matters as may be necessary or advisable to consummate the transactions contemplated by the Merger
Agreement.

     SECTION 1.2. No Inconsistent Arrangements. Except as contemplated by this Agreement,
Stockholder shall not during the Term (i) grant any proxy, power-of-attorney or other authorization
in or with respect to its Stockholder Shares which is inconsistent with the terms hereof, (ii)
deposit its Stockholder Shares into a voting trust or enter into a voting agreement or arrangement
with respect to its Stockholder Shares, (iii) sell, transfer, pledge or encumber, assign or
otherwise dispose of or enforce or permit the execution of the provisions of any redemption, share
purchase or sale, recapitalization or other agreement with the Company or enter into any contract,
option or other arrangement or understanding with respect to the offer for sale, sale, transfer,
pledge, encumbrance, assignment or other disposition of any of the Stockholder Shares except to a
person who agrees in writing to be bound by the terms and conditions of this Agreement as a
Stockholder or (iv) take any other action that would in any way restrict, limit or interfere with
the performance of its obligations hereunder or the transactions contemplated hereby or by the
Merger Agreement.

     SECTION 1.3. Disclosure. Stockholder hereby authorizes Vertical and/or the Company
to publish and disclose in any filing with the SEC, including any proxy statement relating to the
approval of the Merger Agreement by the Company’s stockholders (including all exhibits and
schedules filed with the SEC), its identity and ownership of its Stockholder Shares and the nature
of its commitments, arrangements and understandings under this Agreement.

     SECTION 1.4. Continuing Business Relationships. In consideration of Stockholder’s
compliance with its obligations contained in Section 1.1, Vertical agrees that during the Term and
continuing for a two-year period following the Term: (a) Vertical shall continue to support
Stockholder’s product line consistent with the historic relationship between the Company and
Stockholder; and (b) Vertical will distribute, on a non-exclusive basis, certain LG-Nortel products
in fulfilling purchase orders for Nortel and supporting the LG-Nortel products sold by Nortel in
North America on mutually acceptable terms; and (c) for the purpose of facilitating the transition
following the Effective Time, prior to the Effective Time, Vertical shall enter into arrangements
whereby Vodavi’s current chief executive officer and chief financial officer agree to cooperate
with transitional services related to Stockholder’s relationship with the Company for a term of no
less than nine months from the Effective Time.

ARTICLE II.

REPRESENTATIONS AND WARRANTIES OF STOCKHOLDER

     Stockholder hereby represents and warrants as follows:

     SECTION 2.1. Authority. Stockholder has all requisite power and authority to
execute, deliver and perform this Agreement and to consummate the transactions contemplated hereby.
The execution, delivery and performance of this Agreement and the consummation of the transactions
contemplated hereby have been duly authorized by all necessary action on the part of Stockholder.
This Agreement has been duly executed and delivered by or on behalf of

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Stockholder and constitutes a legal, valid and binding obligation of Stockholder, enforceable
against Stockholder in accordance with its terms, except as enforcement may be limited by
bankruptcy, insolvency, moratorium or other similar laws and except that the availability of
equitable remedies, including specific performance, is subject to the discretion of the court
before which any proceeding for such remedy may be brought.

     SECTION 2.2. Required Filings and Consents. The execution and delivery of this
Agreement by Stockholder does not, and the performance of this Agreement by Stockholder will not,
require any consent, approval, authorization or permit of, or filing with or notification to, any
governmental or regulatory authority (other than any necessary filing under the Exchange Act),
domestic or foreign, except where the failure to obtain such consents, approvals, authorizations or
permits, or to make such filings or notifications, would not prevent or delay the performance by
Stockholder of Stockholder’s obligations under this Agreement.

     SECTION 2.3. Ownership of Shares. Stockholder is the record and beneficial owner of
the Shares set forth opposite its name on Schedule I hereto. On the date hereof, such
Shares constitute all of the Shares owned of record or beneficially by Stockholder.

     SECTION 2.4. Stockholder understands and acknowledges that Vertical is entering into the
Merger Agreement in reliance upon Stockholder’s execution and delivery of this Agreement.

ARTICLE III.

MISCELLANEOUS

     SECTION 3.1. Definitions. Terms used but not otherwise defined in this Agreement
have the meanings ascribed to such terms in the Merger Agreement.

     SECTION 3.2. Termination. This Agreement shall terminate and be of no further force
and effect (i) by the written mutual consent of all of the parties hereto, (ii) upon the approval
of the Proposal by the Company’s stockholders at a meeting duly called and held for such purpose at
which a quorum was present and acting throughout, or (iii) automatically and without any required
action of the parties hereto upon termination of the Merger Agreement in accordance with its terms.
The obligations of Vertical pursuant to Section 1.4 shall survive for a two-year period following
termination of this Agreement. No such termination of this Agreement shall relieve any party
hereto from any liability for any breach of this Agreement prior to termination.

     SECTION 3.3. Further Assurance. From time to time, at another party’s request and
without consideration, each party hereto shall execute and deliver such additional documents and
take all such further action as may be necessary or desirable to consummate and make effective, in
the most expeditious manner practicable, the transactions contemplated by this Agreement.

     SECTION 3.4. No Waiver. The failure of any party hereto to exercise any right, power
or remedy provided under this Agreement or otherwise available in respect hereof at law or in
equity, or to insist upon compliance by any other party hereto with its obligations

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hereunder, or any custom or practice of the parties at variance with the terms hereof shall
not constitute a waiver by such party of its right to exercise any such right, power or remedy or
to demand such compliance.

     SECTION 3.5. Specific Performance. Stockholder acknowledges that if Stockholder
fails to perform any of its obligations under this Agreement, immediate and irreparable harm or
injury would be caused to the Company for which money damages would not be an adequate remedy. In
such event, Stockholder agrees that the Company shall have the right, in addition to any other
rights it may have, to specific performance of this Agreement. Accordingly, should the Company
institute an action or proceeding seeking specific enforcement of the provisions hereof,
Stockholder hereby waives the claim or defense that the Company has an adequate remedy at law and
hereby agrees not to assert in any such action or proceeding the claim or defense that such a
remedy at law exists.

     SECTION 3.6. Notice. All notices and other communications given or made pursuant
hereto shall be in writing and shall be deemed to have been duly given or made (i) as of the date
delivered or sent by facsimile if delivered personally or by facsimile, and (ii) on the third
business day after deposit in the U.S. mail, if mailed by registered or certified mail (postage
prepaid, return receipt requested), in each case to the parties at the following addresses (or at
such other address for a party as shall be specified by like notice, except that notices of changes
of address shall be effective upon receipt):

	 	 	 	 	 
	 

	 	(a)
	 	If to Vertical or the Company:
	 
	 	 	 	 
	 

	 	 	 	Vertical Communications, Inc.
	 

	 	 	 	One Memorial Drive
	 

	 	 	 	Cambridge, Massachusetts 02142

Attn: William Y. Tauscher
	 
	 	 	 	 
	 

	 	 	 	With a copy to:
	 
	 	 	 	 
	 

	 	(b)
	 	If to Stockholder, at the address set forth below Stockholder’s name on Schedule I
hereto.

     SECTION 3.7. Expenses. All fees, costs and expenses incurred in connection with this
Agreement and the transactions contemplated hereby shall be paid by the Company, including,
without limitation, the fees, costs and expenses incurred by Stockholder.

     SECTION 3.8. Headings. The headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of this Agreement.

     SECTION 3.9. Severability. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule of law or public policy, all other
conditions and provisions of this Agreement shall nevertheless remain in full force and effect so
long as the economic or legal substance of the transactions contemplated hereby is not affected

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in any manner adverse to any party. Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good
faith to modify this Agreement so as to effect the original intent of the parties as closely as
possible in an acceptable manner to the end that transactions contemplated hereby are fulfilled to
the maximum extent possible.

     SECTION 3.10. Entire Agreement; Third-Party Beneficiaries. This Agreement
constitutes the entire agreement and supersedes any and all other prior agreements and
undertakings, both written and oral, among the parties, or any of them, with respect to the subject
matter hereof, and this Agreement is not intended to confer upon any other person any rights or
remedies hereunder.

     SECTION 3.11. Assignment. Neither this Agreement nor any of the rights, interests or
obligations under this Agreement shall be assigned, in whole or in part, by operation of law or
otherwise.

     SECTION 3.12. Governing Law; Consent to Jurisdiction; Waiver of Jury Trial. This
Agreement shall be governed by, and construed in accordance with, the internal laws of the State of
Delaware without regard to the choice of law principles thereof. Each of the parties hereto
irrevocably submits to the exclusive jurisdiction of the courts of the State of Delaware located in
New Castle County and the United States District Court for the District of Delaware for the purpose
of any suit, action, proceeding or judgment relating to or arising out of this Agreement and the
transactions contemplated hereby. Service of process in connection with any such suit, action or
proceeding may be served on each party hereto anywhere in the world by the same methods as are
specified for the giving of notices under this Agreement. Each of the parties hereto irrevocably
consents to the jurisdiction of any such court in any such suit, action or proceeding and to the
laying of venue in such court. Each party hereto irrevocably waives any objection to the laying of
venue of any such suit, action or proceeding brought in such courts and irrevocably waives any
claim that any such suit, action or proceeding brought in any such court has been brought in an
inconvenient forum. EACH OF THE PARTIES HERETO WAIVES ANY RIGHT TO REQUEST A TRIAL BY JURY IN ANY
LITIGATION WITH RESPECT TO THIS AGREEMENT AND REPRESENTS THAT COUNSEL HAS BEEN CONSULTED
SPECIFICALLY AS TO THIS WAIVER.

     SECTION 3.13. Amendment. This Agreement may not be amended except by an instrument
in writing signed on behalf of the Company, Vertical and Stockholder.

     SECTION 3.14. Waiver. Any agreement on the part of a party hereto to any extension
of time for the performance of any of the obligations or other acts of the other parties hereto or
waiver of any inaccuracies in the representations and warranties of the other parties hereto
contained herein or in any document delivered pursuant hereto or compliance by the other parties
hereto with any of their agreements or conditions contained herein shall be valid only as against
such party and only if set forth in an instrument in writing signed by such party. The failure of
any party hereto to assert any of its rights under this Agreement or otherwise shall not constitute
a waiver of those rights.

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     SECTION 3.15. Descriptive Headings; Interpretation. The descriptive headings 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 3.16. Counterparts. This Agreement may be executed (including by facsimile
transmission) in one or more counterparts, and by the different parties hereto in separate
counterparts, each of which when executed shall be deemed to be an original but all of which shall
constitute one and the same agreement.

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

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     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the
date first written above.

	 	 	 	 	 	 	 
	 	 	VERTICAL COMMUNICATIONS, INC.
	 
	 	 	 	 	 	 
	 	 	By:	 	/s/ ken clinebell
	 	 	 	 	 
	 

	 	 	 	Name:
	 	Ken Clinebell
	 

	 	 	 	Title:
	 	CFO
	 
	 	 	 	 	 	 
	 	 	VODAVI TECHNOLOGY, INC.
	 
	 	 	 	 	 	 
	 	 	By:	 	/s/ gregory k. roeper
	 	 	 	 	 
	 

	 	 	 	Name:	 	Gregory K. Roeper
	 

	 	 	 	Title:	 	Chief Executive Officer
	 
	 	 	 	 	 	 
	 	 	STOCKHOLDER
	 
	 	 	 	 	 	 
	 	 	LG-NORTEL CO. LTD
	 
	 	 	 	 	 	 
	 	 	By:	 	/s/ peter dans
	 	 	 	 	 
	 

	 	 	 	Name:
	 	Peter Dans
	 

	 	 	 	Title:
	 	Chief Financial Officer

 

 

Schedule I

	 	 	 	 	 
	 	 	Number of Shares
	Name and Address of Stockholder	 	Beneficially Owned
	LG-Nortel Co. Ltd
	 	 	862,500	 
	G5 Tower (7th Floor)
	 	 	 	 
	679 Yoksam-dong
	 	 	 	 
	Kangnam-gu, Seoul
	 	 	 	 
	135-985, Korea
	 	 	 	 
	Attention: Peter Dans, CFOexv10w63

 

Exhibit 10.63

MEMORANDUM OF UNDERSTANDING

October 18, 2006

This Memorandum of Understanding (“Memorandum”) sets forth the agreement between LG-Nortel Co.Ltd
(“LGN”) and Vertical Communications, Inc (“Vertical”) and relates to the proposed Agreement and
Plan of Merger (the “Merger Agreement”) between Vertical, Vodavi Technology, Inc., a Delaware
corporation (“Vodavi”), a(nd Vertical Acquisition Sub, Inc., a Delaware corporation (“Vertical
Acquisition Sub”) pursuant to which Vodavi will become a wholly owned subsidiary of Vertical (the
“Merger”).

LGN owns 862,500 shares of the common stock of Vodavi. The Merger Agreement has been approved by
the Board of Directors of Vodavi, Vertical, and Vertical Acquisition Sub.

In connection with the Merger Agreement, and pursuant to that certain Voting Agreement, of even
date herewith, between Vertical, LGN, and Vodavi (the “Voting Agreement”), LGN has agreed to vote
its shares of Vodavi common stock in favor of the Merger Agreement.

Vertical and LGN have discussed the potential of LGN reinvesting the merger consideration received
as a result of the Merger into equity securities of Vertical. Vertical is currently raising funds
through both debt and equity investors to finance the transactions contemplated by the Merger.

To facilitate the transactions proposed by the Merger, and to induce LGN to sign the Voting
Agreement, Vertical hereby acknowledges to LGN the following:

	 	•	 	Vertical will continue to support the LGN product line consistent with the relationship
Vodavi has historically had with LGN;
	 
	 	•	 	Vertical will distribute, on a non-exclusive basis, certain LG-Nortel products in
fulfilling purchase orders for Nortel and supporting the LG-Nortel products sold by Nortel
in North America on mutually acceptable terms;
	 
	 	•	 	Vertical will use its best efforts to enter into reasonably acceptable consulting
agreements with the existing CEO and CFO of Vodavi for a period of not less than nine
months to support the relationship transition between LGN and Vertical;
	 
	 	•	 	Vertical will make available to LGN an investment into its equity securities on
economic terms no less favorable than those received by any other investor in its current
financing efforts, provided however, LGN shall not be accorded any
investors’ rights to approve and waive certain covenants and conditions in connection with
Vertical’s current financing efforts which may be held by other investors (the
“Investment”); and
	 
	 	•	 	Vertical shall use its best efforts to cause one (1) designee of LGN to be elected to
the Board of Directors of Vertical at the earliest feasible time following consummation of
the Merger and shall continue to do so for so long as LGN holds at least 80% of the
outstanding shares purchased by LGN in the Investment.

 

 

LGN hereby acknowledges to Vertical the following:

	 	•	 	LGN will honor its existing relationship with Vodavi and will assign all rights under
its supply agreement with Vodavi to Vertical; and
	 
	 	•	 	LGN shall use its best efforts to execute all necessary investment documents related to
the Investment, including without limitation, a legally binding Securities Purchase
Agreement contemporaneously herewith, and shall thereunder commit to invest substantially
all of the merger consideration to be received by LGN upon consummation of the merger (or
approximately $6,500,000) as part of the Investment.

[Signature Page Follows]

 

 

      In witness whereof, the parties have entered into this Memorandum as of the 18th day of
October 2006.

	 	 	 	 	 
	 	VERTICAL COMMUNICATIONS, INC.

 	 
	 	By:  	/s/ ken clinebell
 	 
	 	 	Name:  	Ken Clinebell 	 
	 	 	Title:  	CFO 	 
	 
	 	LG-NORTEL CO. LTD

 	 
	 	By:  	/s/ peter dans
 	 
	 	 	Name:  	Peter Dans 	 
	 	 	Title:  	Chief Financial Officer 	 
	 
	 	VODAVI TECHNOLOGY, INC.

 	 
	 	By:  	/s/ gregory k. roeper
 	 
	 	 	Name:  	Gregory K. Roeper 	 
	 	 	Title:  	Chief Executive Officer

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