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EXHIBIT 4.3
VOTING AND SHAREHOLDERS AGREEMENT
VOTING AND SHAREHOLDERS AGREEMENT dated as of November 5, 1999
by and between Pioneer Ventures Associates Limited Partnership, having an office
at 000 Xxx Xxxx Xxxx, Xxxxxxx, Xxxxxxxxxxx 00000 (the "Pioneer Partnership "),
AND Xxxxxx X. Xxxxxx, Xx. and Xxxxxx Xxxxxx, or any trusts, or other entities or
affiliates (collectively hereinafter referred to as the "Principal
Shareholders").
WHEREAS, the Principal Shareholders have or will have sole or
shared voting power over an aggregate of at least eight million (8,000,000) of
the common shares, $.001 par value per share ("Common Shares") of Compass
Knowledge Group, Inc. (the "Company") as more specifically set forth in Exhibit
A attached hereto;
WHEREAS, pursuant to a certain Investment Agreement dated the
date hereof (the "Investment Agreement"), the Pioneer Partnership is investing
in the Company through the purchase of Preferred Stock; and
WHEREAS, the execution of this Agreement by the parties hereto
is a condition precedent to the consummation of the transactions provided for in
the Investment.
NOW, THEREFORE, in consideration of the mutual promises
contained herein, the parties hereto agree as follows:
ARTICLE I. Voting by Principal Shareholders.
1.1 Agreement to Vote. Each of the Principal Shareholders agrees that,
so long as the Pioneer Partnership shall own at least three (3%) percent of the
Company's Common Stock either directly or through the conversion of its
Preferred Stock, all on a fully diluted basis, each of them shall vote all of
their Common Shares, whether now owned or hereafter acquired, for the election
as a director(s) of the Company of the designee(s) of the Pioneer Partnership in
accordance with paragraph 1.10 of the Investment Agreement at any meeting of the
Company's
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shareholders at which such designee shall be nominated as a director. Without
limiting the generality of the foregoing, the Principal Shareholders agree to
execute and deliver any and all reasonable and necessary to documents,
agreements and instruments, including, without limitation, proxies, as the
Pioneer Partnership shall reasonably request so that at least one (1) designee
of the Pioneer Partnership shall be a director of the Company for so long as the
Pioneer Partnership shall own at least three (3%) percent of the Company's
Common Stock either directly or through the conversion of its Preferred Stock,
all on a fully diluted basis.
Article II. Transfers
2.1 Transfer of Common Shares to Affiliates. For so long as the Pioneer
Partnership shall own at least three (3%) percent of the Company's Common Stock
either directly or through the conversion of its Preferred Stock, all on a fully
diluted basis, neither the Principal Shareholders nor any other person who shall
become a party to or bound by this Agreement shall transfer any Common Shares,
whether now or hereafter acquired, (i) to any person without the prior written
consent of the Pioneer Partnership, (ii) to any affiliate, as hereinafter
defined, unless such affiliate shall have first delivered a written agreement
between the affiliate, the Pioneer Partnership and the Company such that the
affiliate agrees to be bound by and be subject to the terms and conditions of
this Agreement with the same force and effect as if such person were named as a
party to this Agreement or as a Principal Shareholder hereunder, and in such
agreement the Pioneer Partnership consents to such transfer, such consent shall
not be unreasonably withheld, or (iii) pursuant to a registration statement
without the prior written approval of the Pioneer Partnership which consent will
not be unreasonably withheld (sales by the Principal Shareholders shall not be
deemed unreasonable if pursuant to an underwritten offering whereby the Pioneer
Partnership is entitled to its proportionate co-sale rights, subject to the
limitations set forth in the Investment Agreement, or (iv) such that the
aggregate holdings of the Principal Shareholders shall not equal less than
fifty-one (51%)
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percent on a fully diluted basis including all of the issued Series A Preferred
Stock, except in the case where such holdings would fall below 51% as a result
of (x) the sale of the Company securities for purposes of raising capital, or
(y) as a result of an acquisition, merger or reorganization of the Company, its
subsidiaries or the acquisition of another company. The term "affiliate" shall
have the meaning assigned in Rule 144 of the Securities Act of 1933 and shall
also include (a) any spouse, parent, parent-in-law, grandparent, child,
grandchild, sibling, uncle, aunt, niece, nephew or first cousin of the
transferor or (b) any person which the transferor directly or indirectly
controls, or (c) any transfer to any "person" whether a natural person,
corporation, partnership, trust company, or otherwise as used if the transferor
remains a "beneficial owner", as those terms are used in Section 13(d) of the
Securities Exchange Act of 1934, as amended, of the transferred shares.
2.2 Legend on Stock Certificates. The certificates of the Common Stock
now owned by the Principal Shareholders shall be subject to and bear a
restrictive legend as follows:
The shares of stock represented by this certificate are subject to all
of the terms of a certain Voting and Shareholders Agreement dated
November 4, 1999, a copy of which is on file at the offices of the
issuer of this certificate. The shares are subject to certain voting,
co-sale and transfer restrictions. Any actions taken in contravention
to that agreement shall be null and void.
The terms of such endorsement and restrictions are hereby expressly consented to
and accepted.
2.3 Lock-Up. Except in the event of an exchange of stock whereby the
Principal Shareholders exchange their Common Shares pursuant to a plan of
reorganization of the Company and provided that the Principal Shareholders
acquire a controlling interest in the target company which has a class of stock
which is publicly traded, the Principal Shareholders shall agree to restrict all
sales, transfers or other dispositions of their securities of the Company for a
period of not less than one hundred eighty (180) days from the date of Closing.
Upon expiration of the Lock-Up period, all sales, transfers or other
dispositions of the securities of the
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Restricted Principal Shareholders shall be
governed by ss.2.1 and Article III hereof. However, the Pioneer Partnership in,
its sole discretion, may waive such restriction for a particular transfer upon
request, prior to such transaction.
ARTICLE III. Co-Sale Provisions
3.1 Third-Party Offer and Notice. For so long as the Pioneer
Partnership shall own at least three (3%) percent of the Company's Common Stock
either directly or through the conversion of its Preferred Stock, all on a fully
diluted basis, any voluntary or involuntary transfer of the Common Shares by any
Principal Shareholder will be subject to a participation right of co-sale by
Pioneer Ventures or its assigns on a pro rata fully diluted basis. If any one or
more of the Principal Shareholders obtains from a third party ("Third Party
Purchaser") an offer to purchase any amount of his or her Shares, and the
Principal Shareholder(s) wish to accept such offer, the Principal Shareholder(s)
shall submit a written notice (the "Co-Sale Notice") to Pioneer Ventures
disclosing the amount of Common Shares proposed to be sold, the offered purchase
price, the proposed closing date, and the total number of Common Shares owned by
the Principal Shareholder(s).
3.2 Co-Sale Right of Participation. Upon receipt of a Co-Sale Notice
from any Principal Shareholder, Pioneer Ventures or its assigns may elect to
participate in such transaction and shall have the right to offer its
securities, at the same price and on the same terms, on a fully diluted pro rata
basis with the proposed selling shareholder(s) as set forth in the offer made by
the Third Party Purchaser. Each participating selling party shall in turn be
entitled to receive at the applicable closing the net proceeds of the sale
allocable to the securities sold on behalf of each selling shareholder, after
deduction of such selling shareholder's proportionate share of the reasonable
expenses of the sale. These co-sale provisions will not apply to any sale of
securities pursuant to a distribution to the public, whether pursuant to a
registered public offering, a Rule 144 sale or otherwise. If less than all of a
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shareholder's securities are being sold pursuant to this Article III, the
securities to be sold shall be determined on a pro rata fully diluted basis.
3.3 Notice of Intent to Participate in Co-Sale. If the Pioneer
Partnership wishes to participate in any sale under this Article III, then
Pioneer Ventures shall notify the selling Principal Shareholder(s) in writing of
such intention as soon as practicable after such Pioneer Partnership's receipt
of the Co-Sale Notice made pursuant to Section 3.1, and in any event within
fifteen (15) days after the date of such Co-Sale Notice has been delivered. Such
notification shall be delivered in person or by facsimile to the Principal
Shareholder(s) at the Company's offices.
ARTICLE IV. Remedies
4.1. Violation of Agreement; Consent to Injunctive Relief. Each of the
Principal Shareholders recognizes and agrees that any violation of any of their
obligations set forth in this Agreement would cause irreparable damage which
could not be compensated by monetary damages. Such violation shall constitute an
Event of Default under the Investment Agreement. Accordingly, in the event of
any breach of a Principal Shareholder's obligations under this Agreement, such
Principal Shareholder consents to the entry of injunctive relief, including the
remedy of specific performance, by a court of competent jurisdiction restraining
any such violation or threatened violation, in addition to any other remedies
available at law or in equity. The Principal Shareholders agree to pay the
reasonable costs of the Pioneer Partnership, including reasonable attorneys
fees, incurred in enforcing the provisions of this Article IV.
Article V. Miscellaneous
5.1. Representations. Each of the Principal Shareholders represents and
warrants that, at the date hereof, he/she or it is the sole record and
beneficial owner of the securities of the Company set forth opposite his/her
name on Exhibit A to this Agreement. Each of the Principal Shareholders
represents that he/she is not the beneficial owner of any Common
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Shares NOT
disclosed herein through any affiliate or otherwise.
5.2 Further Assurances. From and after the date of this Agreement, the
parties hereto shall from time to time, at the request of any other party and
without further consideration, do, execute and deliver, or cause to be done,
executed and delivered, all such further acts, things and instruments as may be
reasonably requested or required more effectively to evidence and give effect to
the transactions provided for in this Agreement.
5.3. Notices. All notices, requests, demands and other communications
required or permitted under this Agreement shall be in writing and shall be
deemed to have been duly given if personally delivered or if mailed by first
class registered or certified mail return receipt requested, or by first class
mail or overnight courier if received, addressed to the parties at their
respective addresses set forth on the first page of this Agreement, or to such
other person or address as may be designated by like notice hereunder.
5.4 Modifications. This Agreement may not be modified or discharged
orally, but only in writing duly executed by the party to be charged.
5.5 Successors and Assigns. All the covenants, stipulations, promises
and agreements in this Agreement shall bind the parties' respective heirs,
successors and assigns, whether so expressed or not.
5.6 Headings. The headings of the various sections of this Agreement
are for convenience of reference only and shall in no way modify any of the
terms or provisions of this Agreement.
5.7 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Florida applicable to instruments made
and to be performed entirely within such State.
5.8 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same document.
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5.9 Gender. All pronouns used herein are inserted for convenience only
and shall be applied in the masculine, feminine, or third person as appropriate
for each party signing hereto.
5.10 Use of Term "Pioneer Partnership". Notwithstanding any provision
of this Agreement to the contrary, included in the definition and meaning of the
"Pioneer Partnership" shall be any one or more parallel limited partnerships
which have been or shall be organized by Ventures Management Partners LLC as the
general partner to invest in parallel with Pioneer Ventures Associates Limited
Partnership on the same economic terms and pro rata based upon their aggregate
subscriptions. The limited partners of Pioneer Ventures Associates Limited
Partnership and the parallel partnerships shall be referred to herein as the
"limited partners". IN WITNESS WHEREOF, the parties have duly executed this
Agreement as of the date and year first above written.
By the Pioneer Partnership:
PIONEER VENTURES ASSOCIATES LIMITED
PARTNERSHIP
By: Ventures Management Partners LLC
Its General Partner
By: Pioneer Ventures Corp.,
Its Managing Member
By:
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Xxxx X. Xxxxxxx
a Director of the Managing Member
By the Principal Shareholders:
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Xxxxxx X. Xxxxxx, Xx. Xxxxxx Xxxxxx
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EXHIBIT A
to
VOTING AGREEMENT
Principal Shareholders
No. of Voting & Ownership
Name and Address(1) Common Shares Percentage
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Xxxxxx X. Xxxxxx, Xx. 4,809,289 51.85%
Xxxxxx Xxxxxx 3,482,587 37.65%
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(1) The address for these individuals and entities is c/o Compass Knowledge
Group, Inc., 0000 Xxx Xxxxxx, Xxxxx 000, Xxxxx, Xxxxxxx 00000
