HZO, INC.
VOTING AGREEMENT
This Voting Agreement (this “
Agreement ”) is made as of September 25, 2009
by and among hZo, Inc., a Delaware corporation (the “
Company ”), the persons and entities listed on
Exhibit A attached hereto (each an “
Investor ,” and collectively the “
Investors ”), and the persons listed on
Exhibit B hereto (each a “ Key Holder
,” and collectively the “ Key Holders
”). The Key Holders and the Investors are referred
to herein collectively as the “ Voting Parties
.”
WHEREAS, the Company proposes to sell shares of
the Company’s Series A Preferred Stock (the “
Series A Preferred ”) to the Investors pursuant
to the Series A Preferred Stock Purchase Agreement (the “
Purchase Agreement ”) of even date herewith
(the “ Financing ”);
WHEREAS, Article III, Section 3.5(b) of the
Company’s Amended and Restated Certificate of Incorporation
(the “ Certificate ”) provides that (i)
the holders of the Company’s Preferred Stock shall be
entitled to elect two directors (the “ Series A
Directors ”), (ii) the holders of the Company’s
Common Stock, shall be entitled to elect one director (the “
Common Director ”) and (iii) the holders of the
Company’s Common Stock and Preferred Stock, voting together
as a single class on an as-converted basis shall be entitled to
elect any additional directors (each an “ Additional
Director ”); and
WHEREAS, as a condition to the Financing, the
Voting Parties have agreed to enter into this Agreement;
NOW, THEREFORE, in consideration of the mutual
promises and covenants herein contained, and other consideration,
the receipt and adequacy of which is hereby acknowledged, the
parties hereto agree as follows:
1.
Shares
. During the term of this
Agreement, the Voting Parties each agree to vote all shares of the
Company’s voting securities now or hereafter owned by them,
whether beneficially or otherwise, or as to which they have voting
power (the “ Shares ”) in accordance with
the provisions of this Agreement.
2.
Board of Directors;
Election
(a)
Voting . During the term of this Agreement, each Voting
Party agrees to vote all Shares in such manner as may be necessary
to elect (and maintain in office) as members of the Company’s
Board of Directors (the “ Board ”) the
following individuals:
(i) The vSpring
Designee (as defined below) as one the Series A Directors, so long
as vSpring (as defined below) holds at least 1,000,000 shares of
Series A Preferred (as adjusted for stock splits, stock dividends
or distributions, recapitalizations and similar events);
(ii) The ZAGG Designee
(as defined below) as one of the Series A Directors, so long as
ZAGG (as defined below) holds at least 1,000,000 shares of Series A
Preferred (as adjusted for stock splits, stock dividends or
distributions, recapitalizations and similar events);
(iii) The CEO Designee
(as defined below) as the Common Director; and
(iv) Two Mutual
Designees (as defined below) Additional Directors.
(v) The NMI Designee
(as defined below) as an Additional Director, if applicable,
pursuant to Section 2(e) below.
(b)
Designation of
Directors. The
designees to the Board described above (each a “
Designee ”) shall be selected as
follows:
(i) the “
vSpring Designee ” shall be chosen by vSpring
III, L.P. (“ vSpring ”).
(ii) the “
ZAGG Designee ” shall be chosen by Zagg, Inc.
(“ ZAGG ”).
(iii) The “
CEO Designee ” shall be the Company’s
then serving Chief Executive Officer.
(iv) The “
Mutual Designees ” shall be chosen by a
majority of the other then serving directors.
(v) The NMI Designee
(as defined below), if applicable, pursuant to Section
2(e).
(c)
Current Designees
. For the purpose of this
Agreement, the current directors of the Company shall be deemed to
be the following Designees: (i) Ed Ekstrom shall be deemed to
be the vSpring Designee, (ii) Robert G. Pedersen II shall be
deemed to be the ZAGG Designee and (iii) Larry Harmer shall
be deemed to be one of the Mutual Designees.
(d)
Changes in Designees
. From time to time during
the term of this Agreement, Voting Parties who hold sufficient
Shares to select a Designee pursuant to this Agreement may, in
their sole discretion:
(i) notify the Company
in writing of an intention to remove from the Board any incumbent
Designee who occupies a Board seat for which such Voting Parties
are entitled to designate the Designee; or
(ii) notify the Company
in writing of an intention to select a new Designee for election to
a Board seat for which such Voting Parties are entitled to
designate the Designee (whether to replace a prior Designee or to
fill a vacancy in such Board seat).
In the event of such an initiation of a removal
or selection of a Designee under this section, the Company shall
take such reasonable actions as are necessary to facilitate such
removals or elections, including, without limitation, soliciting
the votes of the appropriate stockholders, and the Voting Parties
shall vote their Shares to cause the removal from the Board of the
Designee or Designees so designated for removal and the
election to the Company’s Board Directors of any new Designee
or Designees so designated.
(e)
Additional Directors
. Notwithstanding the
above, if at any time Northeast Maritime Institute, Inc. (“
NMI ”) gives written notice to the Company that
NMI desires representation on the Board and so long as NMI owns not
less than five percent (5%) of the voting capital stock of the
Company, then, the Company shall as soon as practicable undertake
to increase the size of the Board to a total of seven (7)
members. In order to fill the resulting vacancies, each
Voting Party shall cause to be elected to the Board one (1)
additional Mutual Designee and, so long as NMI owns not less than
five percent (5%) of the voting capital stock of the Company, one
(1) individual designated from time to time in a writing delivered
to the Company and signed by NMI (the “ NMI
Designee ”).
(f)
Board Observers
. Notwithstanding anything to
the contrary herein, so long as NMI owns not less than five percent
(5%) of the voting stock of the Company, the Company shall invite a
representative of NMI, who shall initially be Eric Dawicki, to
attend all regular meetings of the Board in a nonvoting observer
capacity and, in this respect, shall give such representative
copies of all notices, minutes, consents, and other materials that
it provides to its directors at the same time and in the same
manner as provided to such directors; provided, however, that such
representative shall agree to hold in confidence and trust and to
act in a fiduciary manner with respect to all information so
provided; and, provided further, that the Company reserves the
right to withhold any information and to exclude such
representative from any meeting or portion thereof if access to
such information or attendance at such meeting could adversely
affect the attorney-client privilege between the Company and its
counsel, result in disclosure of trade secrets or a conflict of
interest, or if NMI or its representative is a competitor of the
Company.
3.
Drag-Along
Right . If any
Investor or the Company receives a bona fide offer from a person or
entity that is not an Affiliate (as defined in Rule 405 of the
Securities Act) of any Investor or the Company to effect a Change
of Control Transaction (as defined below) and such transaction is
approved by the Board and Investors holding two-thirds (2/3rds) or
more of the shares of Series A Preferred Stock, each Investor and
Key Holder hereby agrees to (i) vote all shares held by such Voting
Party in favor of such Change of Control Transaction, (ii) to sell
or exchange all shares of stock then held by such Voting Party
pursuant to the terms and conditions of such Change of Control
Transaction, (iii) not to assert any “dissenters” or
similar statutory or legal right or otherwise challenge the Change
of Control Transaction, and (iv) take any and all other steps
required to consummate such Change of Control Transaction; subject
to the following conditions:
(a) no Key Holder
shall be required to provide any indemnification or contribution
disproportionate to that of the Investors in light of the
allocation of the proceeds from the sale, and the maximum
obligation of any Voting Party under such provisions shall be
limited to the amount of such Voting Party’s proceeds
(whether cash or otherwise) from the sale;
(b) the consideration
payable with respect to each share in each class or series as a
result of such Change of Control Transaction is the same (except
for cash payments in lieu of fractional shares) as for each other
share in such class or series;
(c) each class and
series of capital stock of the Company will be entitled to receive
the same form of consideration (and be subject to the same
indemnity and escrow provisions) as a result of such Change of
Control Transaction;
(d) the payment with
respect to each share of Common Stock is an amount at least equal
to the amount payable in accordance with the Certificate, if such
Change of Control Transaction were deemed a Liquidation Event (as
defined therein); and
(e) no Key Holder
(other than then current officers of the Company) will be required
to make any representation, warranty or certification, or give an
indemnity, other than regarding its ownership of the shares to be
sold by it,