COMMON STOCK VOTING AGREEMENT
This Common Stock Voting Agreement ("the Voting Agreement")
is made this 13th day of August, 1997 by and between X.X. Xxxxx
("Xxxxx"), Xxx Xxxx ("Page"), J. Xxxx Xxxxxxxxxxx ("Xxxxxxxxxxx")
and Xxxx Xxxxxx ("Xxxxxx") (collectively "SPHN"), and Xxxxxxxx
Xxxxxxxx-Xxxxx ("Xxxxxxxx"), and Innovo Group Inc. ("IGI").
WHEREAS, concurrent with the date hereof, Xxxxx, Xxxx,
Xxxxxxxxxxx and Xxxxxx are purchasing certain shares of the
common stock, par value $.01 per share, of Innovo Group
Inc.("IGI") pursuant to a Stock Purchase Agreement (the
"Acquisition Agreement"); and
WHEREAS, Xxxxxxxx has previously acquired shares of IGI
common stock ("the Xxxxxxxx Shares"); and
WHEREAS, as a condition to the purchase by SPHN described in
the second preceding paragraph, SPHN has requested to obtain the
right to vote, in certain circumstances, certain shares of
Xxxxxxxx Shares as Xxxxxxxx may own from time to time and have
sole voting power with respect to; and
WHEREAS, Xxxxxxxx, as an inducement to the purchase by SPHN
described in the third preceding paragraph is willing to grant to
SPHN the right to, in certain circumstances, vote certain of the
Xxxxxxxx Shares as she may from time to time own and have sole
voting power with respect to; and
WHEREAS, because the terms of this Voting Agreement would be
disclosable in any proxy statement filed by IGI under Section 14
of the Securities Act of 1934 ("xxx 0000 Xxx") and Regulation
14(a) promulgated under the 1934 Act, IGI is willing to perform
certain clerical functions to implement the terms of this Voting
Agreement and SPHN and Xxxxxxxx are willing to provide IGI with
the information necessary to prepare such disclosures;
NOW, THEREFORE, SPHN and Xxxxxxxx agree as follows, and IGI
agrees with SPHN and Xxxxxxxx as follows only as to the
procedures set forth in Section 3 of this Voting Agreement and
the related provisions of Sections 4, 5 and 6 of this Voting
Agreement:
Agreement
1. SPHN Entitlement to Direct Voting of Certain Xxxxxxxx
Shares.
(a) As to any matter submitted to a vote of the
stockholders of IGI, SPHN shall be entitled to direct the manner
in which Xxxxxxxx votes as a stockholder such number (the
"Directed Shares") of Xxxxxxxx Shares as she, absent this Voting
Agreement, has the sole power to vote as equals one half of the
difference between (i) the number of shares of common stock over
which Xxxxx, Xxxx, Xxxxxxxxxxx and Xxxxxx have sole or shared
voting power, and (ii) the number of Xxxxxxxx Shares over which
Xxxxxxxx has sole voting power, each amount determined as of the
record date for the matter as to which stockholders are voting.
Xxxxxxxx shall only be required to vote in accordance with such
agreement (A) until the earlier to occur of (x) two (2) years
from the date of this Agreement or (y) the date on which Xxxxxxxx
shall have sold not less than one (1) million shares of common
stock beneficially owned by her or hereinafter acquired by her,
including by virtue of her exercise of the 1997 Stock Purchase
Right as of the date of this Agreement and (B) provided IGI's net
income, as determined under generally accepted accounting
principles and as reported in the reports filed by IGI under the
Securities Exchange Act of 1934, is for the twelve (12) month
period ending as of the latest fiscal quarter for which a
quarterly (or annual) report has been filed by IGI under the
Securities Exchange Act of 1934 as of the applicable voting
record date, greater than (or net loss less than) the net income
or loss for the comparable twelve (12) month period as of the
prior year.
(b) By way of, and only for the purposes of
illustration, if Xxxxxxxx is required to vote her shares in
accordance with this Agreement and Xxxxx, Xxxx, Xxxxxxxxxxx and
Xxxxxx have sole or shared voting power with respect to 2,500,000
shares and Xxxxxxxx has sole voting power with respect to
4,000,000 Xxxxxxxx Shares, then the number of Directed Shares
would be (4,000,000 - 2,500,000) / 2 which equals 1,500,000 / 2
which equals 750,000.
2. No Direction Contrary to Board of Directors
Recommendation. Notwithstanding the provisions of Section 1 of
this Voting Agreement, Xxxxxxxx shall not be required to follow
any direction from SPHN which would require her to vote shares of
common stock in a manner contrary to a recommendation of the
board of directors of IGI.
3. Procedures for Direction of Voting. The following
procedures shall be used in implementing Section 1:
(a) Within two (2) business days after the selection
of a record date by the board of directors, the secretary of IGI
will notify both SPHN and Xxxxxxxx of (i) the record date
selected, and (ii) the matters as to which that record date is to
apply.
(b) Within five (5) business days of the receipt of
the notice delivered pursuant to subsection (a) above:
(i) SPHN will deliver to the secretary of IGI,
and to Xxxxxxxx, a statement setting forth the number
of shares of common stock as to which they have sole or
shared voting power as of the record date, and
indicating whether, in their view, the requirements of
Section 1 have been met;
(ii) Xxxxxxxx will deliver to the secretary of
IGI a statement indicating the number of Xxxxxxxx
Shares as to which she has sole voting power as of the
record date, and indicating whether, in her view, the
requirements of Section 1 have been met.
(c) Within two (2) business days of the receipt of the
statements from SPHN and Xxxxxxxx pursuant to subsection (b)
above, the secretary of IGI will deliver to SPHN and Xxxxxxxx a
statement (i) setting forth the calculation of the number of
Directed Shares, and (ii) indicating whether there appears to
exist any difference or disagreement as to whether the
requirements of Section 1 have been met.
(d) If, upon the receipt from the secretary of IGI of
the statement delivered pursuant to subsection (c) above, SPHN or
Xxxxxxxx disagree or have reason to disagree or question the
information set forth therein, they will, within two (2) business
days, notify both the secretary of IGI and the other party to
this Voting Agreement of the nature or such disagreement or
question. SPHN, Xxxxxxxx and the secretary of IGI will then meet
to attempt to resolve or eliminate any such disagreement or
question. Any such disagreement or question which cannot be so
resolved or eliminated will be submitted to arbitration pursuant
to Section 5 of this Voting Agreement.
(e) Upon the passage of two (2) business days without
any notification pursuant to subsection (d) above, or
alternatively upon the resolution or arbitration of and
disagreements or questions, the secretary of IGI may and shall:
(i) utilize the number of Directed Shares
determined pursuant to subsections (c) and (d) above
in the preparation of proxy materials; and
(ii) request from IGI's transfer agent a separate
proxy card or form for Anderson, in the amount of the
Directed Shares, to facilitate her voting of the
Directed Shares separately from her voting of any other
shares of common stock.
(f) If, pursuant to subsections (c) and (d) above, it
has been determined that (i) the number of Directed Shares is
greater than zero, and (ii) that the requirements of Sections 1
have been met, then, within five (5) business days after the
receipt of a definitive proxy statement, but no less than twenty
(20) days prior to the scheduled date for the meeting of the
stockholders at which the applicable vote is to take place, SPHN
shall, subject to compliance with Section 2 of this Agreement,
deliver to Xxxxxxxx a written notice indicating the manner in
which they wish the Directed Shares to be voted on each matter as
to which proxies have been solicited.
4. Representation and Agreement of Xxxxxxxx.
(a) Xxxxxxxx hereby represents to SPHN that as of the
date hereof she has sole voting power with respect to 4,363,440
shares of common stock of IGI.
(b) Xxxxxxxx hereby agrees that, as long as this
Voting Agreement remains in effect, she will take no action that
causes the voting rights of the shares identified in Section 4(a)
above to be shared with any other person or entity, without the
express written consent of SPHN.
5. Indemnification.
(a) Each of Xxxxx, Xxxx, Xxxxxxxxxxx and Xxxxxx agrees
to indemnify and hold harmless Xxxxxxxx, and her heirs,
executors, administrators, assigns, affiliates and agents, from
and against any and all losses, damages, liabilities, costs and
expenses which she or any of them may sustain or incur as the
result of any suit, complaint or other action arising out of or
alleging damages from the manner in which the Directed Shares
were voted.
(b) Each of Xxxxx, Xxxx, Xxxxxxxxxxx and Xxxxxx and
Xxxxxxxx agrees to indemnify and hold harmless IGI and its
successors, assigns, affiliates, officers, directors, employees
and agents from and against any and all losses, damages,
liabilities, costs and expenses which it or any of them may
sustain or incur in connection with or arising out of this Voting
Agreement.
6. Arbitration. Each Party agrees that any controversy or
claim by it against another Party arising directly or indirectly
out of this Agreement including, without limitation, claims for
breach of contract, breach of warranty, claims arising from the
purchase or sale of Shares, or claims for fraud, whether due to
false representations or failure to disclose, shall be submitted
to arbitration pursuant to the Federal Arbitration Act ("FAA")
and in accordance with the Commercial Arbitration Rules of the
American Arbitration Association ("AAA") before a panel of three
arbitrators and judgment upon the award rendered by the
arbitrators may be entered in any court having jurisdiction
pursuant to the FAA. In arbitration proceedings hereunder, the
Parties shall be entitled to any and all remedies that would be
available in the absence of this section and the arbitrators, in
rendering their decision, shall follow the substantive laws of
the State of Delaware. The arbitration of any dispute pursuant
to this section shall be held in Atlanta, Georgia.
Notwithstanding the foregoing in order to preserve the status quo
pending the resolution by arbitration of a claim seeking relief
of an injunctive or equitable nature, any party, upon submitting
a matter to arbitration as required by this section, may
simultaneously or thereafter seek a temporary restraining order
or preliminary injunction from a court of competent jurisdiction
pending the outcome of the arbitration. The losing Party in an
arbitration under this section shall pay all costs and expenses
reasonably incurred by the prevailing Party with respect to this
arbitration including, but not limited to, reasonable attorneys'
fees.
7. Miscellaneous.
(a) Modification; Complete Agreement. This Voting
Agreement (i) represents the entire agreement among SPHN,
Xxxxxxxx and IGI concerning the matters addressed herein, (ii)
may only be modified by a written instrument executed by IGI and
SPHN and sets forth the entire agreement of IGI and SPHN with
respect to the subject matter hereof; and (iii) shall inure to
the benefit of, and be binding upon IGI and SPHN and their
respective heirs, legal representatives and successors.
(b) Waiver. Any of the terms and conditions of this
Voting Agreement which may be lawfully waived may be waived in
writing at any time by the Party that is entitled to the benefit
thereof. Any waiver of any provision of this Voting Agreement
shall be binding only is set forth in an instrument in writing
signed on behalf of such Party. No failure to enforce any
provision of this Voting Agreement shall be deemed to or shall
constitute a waiver of such provision of this Voting Agreement,
and no waiver of a provision shall be deemed or constitute a
waiver of any other provision of this Voting Agreement, whether
or not similar, nor shall such waiver constitute a continuing
waiver.
(c) Governing Law. This Voting Agreement shall be
governed by the laws of the State of Delaware applicable to
contracts made and to be wholly performed therein.
(d) Fees and Expenses. Each Party shall bear their
own respective expenses in connection with the negotiation and
consummation of the transactions contemplated by this Voting
Agreement.
(e) Transfers and Assignments. Neither this Voting
Agreement nor any of the rights of hereunder may be transferred
or assigned except as provided herein.
(f) Gender. Unless the context otherwise requires,
all personal pronouns used in this Voting Agreement, whether in
the masculine, feminine or neuter gender, shall include all other
genders.
(g) Headings. The headings contained in this Voting
Agreement are for reference only and shall not affect in any way
the meaning of interpretation of this Voting Agreement.
(h) Severability. Any provision of this Voting
Agreement which is invalid, illegal or unenforceable in any
jurisdiction shall, as to that jurisdiction, be ineffective to
the extent of such invalidity, illegality or unenforceability,
without affecting in any way the remaining provisions hereof in
such jurisdiction or rendering that or any other provision of
this Voting Agreement invalid, illegal or unenforceable in any
other jurisdiction.
(i) Notices. All notices or other communications
hereunder shall be in writing and shall be deemed to have been
duly given (i) on the date delivered personally or by confirmed
facsimile as set forth below; (ii) two (2) days after being sent
by Express Mail or such other similar service (i.e., Federal
Express) and addressed as set forth below; or (iii) four (4) days
after being mailed by certified or registered mail, return
receipt requested, postage prepaid, and addressed as set forth
below, as follows:
If to Innovo Group:
Innovo Group Inc.
00 Xxxxx Xxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attn: Xxxxxxxx Xxxxxxxx-Xxxxx, President
Facsimile: (000) 000-0000
With a copy to:
Xxxx Moss Kline & Xxxxx LLP
000 Xxxxxxxxx Xxxx Xxxxxx, Xxxxx 000
1000 Xxxxxxxxx Road, N.E.
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxxx X. Xxxx, Esq.
Facsimile: (000) 000-0000
If to Xxxxxxxx:
Xxxxxxxx Xxxxxxxx-Xxxxx
00 Xxxxx Xxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Facsimile: (000) 000-0000
With a copy to:
Xxxx Moss Kline & Xxxxx LLP
000 Xxxxxxxxx Xxxx Xxxxxx, Xxxxx 000
1000 Xxxxxxxxx Road, N.E.
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxxx X. Xxxx, Esq.
Facsimile: (000) 000-0000
If to Xxxxx, Xxxx, Xxxxxxxxxxx or Xxxxxx:
X.X. Xxxxx or Xxx Xxxx or J. Xxxx Xxxxxxxxxxx
or Xxxx Xxxxxx
c/o Innovo Group Inc.
00 Xxxxx Xxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Facsimile: (000) 000-0000
With a copy to:
Xxxxx, Day, Xxxxxx & Xxxxx
000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000-0000
Attn: Xxxxxxx Xxxxxx
Facsimile: (000) 000-0000
or to such other address as a Party shall have designated to the
other by like notice.
(j) Public Announcements. Any and all public
announcements concerning the transactions contemplated or
completed under this Voting Agreement shall require the approval
of IGI and SPHN.
IN WITNESS WHEREOF, Xxxxx, Xxxx, Xxxxxxxxxxx, Xxxxxx and
Xxxxxxxx and IGI have executed this Voting Agreement on the date
first written above.
X.X. Xxxxx /s/ X.X. Xxxxx
_________________________
X.X. Xxxxx
Xxx Xxxx /s/ Xxx Xxxx
_________________________
Xxx Xxxx
J. Xxxx Xxxxxxxxxxx /s/ J. Xxxx Xxxxxxxxxxx
_________________________
J. Xxxx Xxxxxxxxxxx
Xxxx Xxxxxx /s/ Xxxx Xxxxxx
_________________________
Xxxx Xxxxxx
Xxxxxxxx Xxxxxxxx-Xxxxx /s/ Xxxxxxxx Xxxxxxxx-Xxxxx
_________________________
Xxxxxxxx Xxxxxxxx-Xxxxx
Innovo Group Inc.
By:/s/ Schren Head
_________________________
Schren Head, Secretary
(signing as to Sections 3, 4, 5 and 6 only)
Attest:/s/ Xxxxxxxx Xxxxxxxx-Xxxxx
_________________________
Xxxxxxxx Xxxxxxxx-Xxxxx
