VOTING AND SHAREHOLDERS AGREEMENT dated as of November 16, 1998 by and
between Pioneer Ventures Associates Limited Partnership, having an office at 000
Xxx Xxxx Xxxx, Xxxxxxx, Xxxxxxxxxxx 00000 (the "Pioneer Partnership"), AND
certain Shareholders of American Interactive Media, Inc. (the "Company"), who
are parties hereto (collectively hereinafter referred to as the "Principal
Shareholders").
WHEREAS, the Principal Shareholders have "beneficial ownership," as that
term is defined under the Securities Exchange Act of 1934, as amended (the
"Exchange Act") of an aggregate of 3,995,000 shares of common stock, $.001 par
value per share ("Common Shares") of American Interactive Media, 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 Warrants and may make
additional investments in the Company through the exercise of the Warrants 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
Investment Agreement.
NOW, THEREFORE, in consideration of the mutual promises contained herein,
the parties hereto agree as follows:
ARTICLE I.
1.1 Voting by Principal Shareholders; Agreement to Vote.
Each of the Principal Shareholders agrees that, so long as the Pioneer
Partnership, its Partners or affiliates shall own any Preferred Stock, Warrants
or Common Stock obtained either through conversion of the Preferred Stock or
exercise of the Warrants, each of the Principal Shareholders 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 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 the Pioneer Partnership shall
reasonably request so that at least one (1) designee of the Pioneer Partnership
shall be a director of the Company at all times while any Preferred Stock or
such Common Stock is held by the Pioneer Partnership.
1.2 Special Meeting Upon Default.
In the event of a default under, or a breach of, this Agreement which (in the
reasonable judgment of the Pioneer Partnership) materially adversely affects the
Pioneer Partnership, or the Investment Agreement, or the Certificate of
Designation of Preferred Stock under which the Pioneer Partnership or its
assigns are a holder of Preferred Stock, the Principal Shareholders agree to
call and the Company agrees to pay the expenses associated with a special
meeting of
the Shareholders at the sole expense of the Company, and the Principal
Shareholders each agree that they shall vote in favor of that number of and
those nominees to the Board of Directors designated by the Pioneer Partnership
such that the nominees of the Pioneer Partnership shall be equal to the number
of directors of the Company who are designees of Xxxxxxxxx Digital, Inc.
("Xxxxxxxxx") and such that the number of directors of the Pioneer Partnership
and Xxxxxxxxx, taken in the aggregate, shall constitute a majority of the
directors of the Company, after any such defaults, for so long as the Pioneer
Partnership, its partners or affiliates own Preferred Stock, Warrants or Common
Stock obtained through the conversion of Preferred Stock or the exercise of
Warrants. The Principal Shareholders hereby agree to take no action to
contravene, limit or otherwise terminate the Pioneer Partnership and Xxxxxxxxx
board election mechanism. The Principal Shareholders agree to vote in favor of
such Pioneer Partnership and Xxxxxxxxx nominees for so long as the Pioneer
Partnership, its partners or affiliates own Preferred Stock, Warrants or Common
Stock obtained through the conversion of Preferred Stock or the exercise of
Warrants.
1.3 Preservation of Bylaws.
The provisions of Sections 1(a) and 1(b) above are in consonance with the
amendments to the Bylaws of the Company as set forth in the minutes of a special
meeting (Unanimous Written Consent) of the Board of Directors of the Company,
attached hereto as Exhibit B, and incorporated herein by this reference (the
"Resolutions"). If the directors or the shareholders of the Company further
amend such Bylaws at any time during which the Pioneer Partnership shall own any
Preferred Stock, Warrants or Common Stock obtained upon conversion of Preferred
Stock or exercise of Warrants, notice shall be given to the Pioneer Partnership,
and upon the written demand therefor by the Pioneer Partnership, the Principal
Shareholders shall promptly call a special meeting of the Shareholders and the
Company hereby agrees to pay all expenses in connection with such meeting, at
the sole expense of the Company, and the Principal Shareholders each agree that
they shall vote all of their Common Shares, whether now owned or hereafter
acquired, for the Bylaws to be restored to or retained, as the case may be, to
the form as set forth in the Resolutions, in accordance with the By-laws.
ARTICLE II. Transfers
2.1 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, other than (i) to
any person who 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, provided that
the Pioneer Partnership consents to such transfer, such consent not to be
unreasonably withheld, and (ii) beginning November 16, 1999, pursuant 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, provided that the
Pioneer Partnership consents to such sale, such consent not to be unreasonably
withheld.
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2.2 Legend on Stock Certificates.
The Principal Shareholder shall submit to the Transfer Agent for the Common
Stock the certificates evidencing the Common Stock now owned by the Principal
Shareholders (the "Restricted Shares") and the Company shall cause the Transfer
Agent to imprint upon such certificates (or replacement certificates) 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 16, 1998, 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.
ARTICLE III. Co-Sale Provisions
3.1 Third-Party Offer and Notice.
Any voluntary or involuntary transfer of the Common Shares by any Principal
Shareholder will be subject to a participation right of co-sale by the Pioneer
Partnership or its assigns on a pro rata fully diluted basis. If any one or more
of the Principal Shareholders obtain 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 the Pioneer Partnership
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, the Pioneer
Partnership 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 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 the Pioneer Partnership 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) business 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.
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3.4 Exception to this Article III.
This Article III shall not apply to transfers made pursuant to Section 14 of
that certain Voting Trust and Stockholders' Agreement dated January 1, 1997
among Xxxx Xxxxx ("Xxxxx") and certain shareholders.
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 his or her 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, and/or granting full voting authority to the Pioneer
Partnership for purposes of this Agreement, 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.
Xxxxx represents and warrants that, at the date hereof, he is the sole record
and beneficial owner of the securities of the Company set forth opposite his
name on Exhibit A to this Agreement and voting trustee with full power to bind
the other shareholders to the provisions of Article I hereof for the shares for
which he is named as voting trustee on such Exhibit A. Each of the Principal
Shareholders represents that he/she is not the beneficial owner of any Common
Shares or any warrants, options, rights to acquire or securities convertible
into Common Shares NOT disclosed herein through any affiliate or otherwise.
5.2 Term.
This Agreement shall terminate on the earlier to occur of (i) ten (10) years
from the Closing Date or (ii) the date upon which the Pioneer Partnership, its
partners and affiliates no longer own five percent (5%) of the Preferred Stock
(including for purposes of such calculation all shares of Common Stock received
upon conversion of the Preferred Stock).
5.3 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.
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5.4 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.
5.5 Modifications.
This Agreement may not be modified or discharged orally, but only in writing
duly executed by the party to be charged.
5.6 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.
5.7 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.
5.8 Governing Law.
This Agreement shall be governed by and construed in accordance with the laws of
the State of Delaware applicable to instruments made and to be performed
entirely within such State.
5.9 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.
5.10 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.
5.11 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".
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5.12 Capitalized terms use in this Agreement but not otherwise defined herein
shall have the meanings given to them in the Investment Agreement.
[ SIGNATURE PAGE TO FOLLOW ]
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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:
------------------------------------
Pioneer Ventures Corp.,
Managing Member
of the General Partner
Ventures Management Partners LLC
By: /s/ Xxxxxx X. Xxxxxx
------------------------------------
Xxxxxx X. Xxxxxx, President
the Principal Shareholders:
/s/ Xxxx Xxxxx
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Xxxx Xxxxx, individually
Xxxx Xxxxx, as Trustee for the Shareholders
listed on Exhibit A hereto
/s/ Xxxxx Xxxxxx Hatch
---------------------------------------
Xxxxx Xxxxxx Xxxxx
Consented to, and the obligation set forth in Article I to pay for such special
meetings of the Shareholders is hereby agreed to:
AMERICAN INTERACTIVE MEDIA, INC.
By: /s/ Xxxx Xxxxx
------------------------------------
Xxxx Xxxxx
President
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