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VOTING AGREEMENT

Voting Agreement

VOTING AGREEMENT | Document Parties: ZAGG INC | HZO, INC You are currently viewing:
This Voting Agreement involves

ZAGG INC | HZO, INC

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Title: VOTING AGREEMENT
Governing Law: Delaware     Date: 10/5/2009

VOTING AGREEMENT, Parties: zagg inc , hzo  inc
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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,


 
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