VOTING AGREEMENT
AGREEMENT dated as of the day of , 1998 by and between
PIONEER VENTURES ASSOCIATES LIMITED PARTNERSHIP, having an office at 000 Xxx
Xxxx Xxxx, Xxxxxxx, Xxxxxxxxxxx 00000 ("PVALP"), and the persons and entities
set forth on the signature page hereof (collectively hereinafter referred to as
the "Principal Shareholders").
WHEREAS, the Principal Shareholders have sole or shared voting power
over the common shares, $.01 par value per share ("Common Shares"), of Initio,
Inc. (the "Company") as more specifically set forth in Exhibit A attached
hereto;
WHEREAS, pursuant to a certain Debenture Commitment Agreement dated
the date hereof (the "Debenture Commitment Agreement"), PVALP is making a loan
to the Company through a First Subordinated Debenture and may make a second loan
to the Company through a series of Second Subordinated Debentures in the future;
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
Debenture Commitment Agreement.
NOW, THEREFORE, in consideration of the mutual promises contained
herein, the parties hereto agree as follows:
1. Voting by Principal Shareholders.
(a) Each of the Principal Shareholders agrees that, so long as there
shall remain outstanding any principal amount and/or unpaid interest under the
Debentures (as that term is
defined in the Debenture Commitment Agreement) and so long as PVALP shall own
any Conversion Shares (as that term is defined in the Debentures (as that term
is defined in the Debenture Commitment Agreement)), each of them shall vote all
of his Common Shares, whether now owned or hereafter acquired, for the election
as a director(s) of the Company of the designee(s) of PVALP in accordance with
paragraph 4 of the Debenture Commitment Agreement at any meeting of the
Company's 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 documents, agreements and instruments,
including, without limitation, proxies, as PVALP shall reasonably request so
that a designee of PVALP shall at all times while there shall remain outstanding
any principal amount and/or unpaid interest under the Debentures be a director
of the Company.
(b) In the event of a default under the Debenture Commitment
Agreement, or of this Agreement, or any debenture issued by the Company of which
PVALP or its assigns are a holder, the Principal Shareholders shall vote in
favor of that number of nominees to the Board of Directors designated by PVALP
such that the Board of Directors of the Company then becomes comprised of a
majority of nominees of PVALP, after and during the continuation of any such
defaults. The Principal Shareholders hereby agree to take no action to
contravene, limit or otherwise terminate such PVALP board majority mechanism.
The Principal Shareholders agree
- 2 -
to vote in favor of such PVALP nominees for as long as any interest or principal
remains unpaid under such debentures.
2. Transfer of Common Shares to Affiliates. During the term of this
Agreement, 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 by him, (i) to any affiliate, as hereinafter
defined, without first obtaining the written agreement of such affiliate to be
bound by and 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 or (ii) pursuant to a registration
statement without the prior written approval of PVALP, which approval shall not
be unreasonably withheld. The term "affiliate" shall mean (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 a person if
the transferor remains a beneficial owner, as that term is used in Section 13(d)
of the Securities Exchange Act of 1934, as amended, of the transferred shares.
3. Other Transfers of Common Shares. Except for transfers pursuant to
Paragraph 2 of this Agreement, nothing in this Agreement shall be construed to
prohibit any transfer of Common Shares owned by any party to this Agreement free
from the voting and transfer restrictions contained in this Agreement.
- 3 -
4. Violation of Agreement; Consent to Injunctive Relief. Each of the
Principal Shareholders recognizes and agrees that any violation of any of his
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 Debentures (as that term is defined in the Debenture
Commitment 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 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.
5. Representations. Each of the Principal Shareholders represents and
warrants that, at the date hereof, he or it is the sole record and beneficial
owner of the Common Shares set forth opposite his or its name on Exhibit A to
this Agreement. Each of the Principal Shareholders represents that it is not the
beneficial owner of any Common Shares not disclosed herein through any
affiliate, other than Common Shares, which the trustee (other than Xxxxxx Xxx
and Xxxxxx XxXxxxxxx) of a trust which is a Principal Shareholder may own for
his own account or which a Principal Shareholder may own as a trustee for
unrelated third parties.
6. 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,
- 4 -
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.
7. 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.
8. Modifications. This Agreement may not be modified or discharged orally,
but only in writing duly executed by the party to be charged.
9. 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.
10. 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.
11. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Nevada
- 5 -
applicable to instruments made and to be performed entirely within such State.
12. 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.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as
of the date and year first above written.
PIONEER VENTURES ASSOCIATES
LIMITED PARTNERSHIP
By: Ventures Management
Partners, LLC
Its General Partner
By: Pioneer Ventures Corp.,
Its Managing Member
By /s/ Xxxxxx X. Xxxxxx
-----------------------------
Xxxxxx X. Xxxxxx, President
/s/ Xxxxxx Xxx
-----------------------------
Xxxxxx Xxx
/s/ Xxxxxx XxXxxxxxx
-----------------------------
Xxxxxx XxXxxxxxx
XXXXXX XXXXXXXXX RETIREMENT PLAN TRUST
By /s/ Xxxxxx XxXxxxxxx
-----------------------------
Xxxxxx XxXxxxxxx, Trustee
XXXXXX XXX RETIREMENT PLAN TRUST
By /s/ Xxxxxx Xxx
-----------------------------
Xxxxxx Xxx, Trustee
- 6 -
LFM ASSOCIATES, INC. RETIREMENT TRUST
By /s/ Xxxxxx Xxx
-----------------------------
Xxxxxx Xxx, Trustee
XXXXXXXX XXX TRUST
By /s/ Xxxxxx Xxx
-----------------------------
Xxxxxx Xxx, Trustee
XXXXXX XXX TRUST
By /s/ Xxxxxx Xxx
-----------------------------
Xxxxxx Xxx, Trustee
XxXXXXXXX CHILDREN'S TRUST
By /s/ Xxxxxx XxXxxxxxx
-----------------------------
Xxxxxx XxXxxxxxx, Trustee
- 7 -
EXHIBIT A
to
VOTING AGREEMENT
Principal Shareholders
No. of %
Name Shares Ownership
---- ------ ---------
(1)Xxxxxx XxXxxxxxx 737,358 15.20
(1)Xxxxxx XxXxxxxxx 112,138 2.31
Retirement Plan Trust
Trustee: Xxxxxx XxXxxxxxx
XxXxxxxxx Children Trust 530,546 10.94
c/o Xxxx XxXxxxxxx
00 Xxxxxxxx Xxxx
Xxxxx, Xxx Xxxxxx 00000
Trustees: Xxxx XxXxxxxxx
Xxxxxx XxXxxxxxx
(1)Xxxxxx Xxx 1,170,808 21.56
(1)Xxxxxx Xxx Retirement 85,941 1.77
Plan Trust
(1)LFM Associates, Inc. 15,855 .33
Retirement Trust
(1)Xxxxxxxx Xxx Trust 80,449 1.66
Trustees: Xxxxxx Xxx,
Xxxx Xxx, Xxxxxx X. Xxxxx
(1)Xxxxxx Xxx Trust 56,535 1.16
Trustees: Xxxxxx Xxx,
Xxxx Xxx, Xxxxxx X. Xxxxx
--------
(1) The address for these individuals and entities is c/o Initio, Inc.,
0000 Xxxxxxxx Xxxxxx, Xxxxx Xxxxxx, Xxx Xxxxxx 00000.
