EXHIBIT 3
NORTH AMERICAN TECHNOLOGIES GROUP, INC.
VOTING AGREEMENT
This VOTING AGREEMENT, dated as of February 22, 2005 (the "AGREEMENT"),
by and among Sponsor Investments, LLC ("SPONSOR"), Herakles Investments, Inc.
("HERAKLES"), Astraea Investment Management, L.P. ("ASTRAEA") and the persons
listed on Exhibit A hereto (the "INVESTORS," and together with Herakles and
Astraea, the "HOLDERS").
RECITALS
WHEREAS, pursuant to that certain Exchange Agreement, dated as of
November 8, 2004, by and among North American Technologies Group, Inc. ("NATK"),
Avalanche Resources, Ltd., Xxxxx Xxxxxx and Sponsor (the "EXCHANGE AGREEMENT"),
Sponsor shall own 43,114 shares of North American Technologies Group, Inc.
Series CC Convertible Preferred Stock (the "SERIES CC PREFERRED") and warrants
to purchase an additional 9,158 Series CC Preferred Shares (the "WARRANTS," and
together with the Series CC Preferred issued to Sponsor pursuant to the Exchange
Agreement, the "EXCHANGE SHARES," and upon conversion the common shares of NATK,
issuable upon conversion thereof, the "CONVERSION SECURITIES") upon the
consummation of the Exchange Agreement;
WHEREAS, on February 22, 2005, Sponsor distributed 3,434 Warrants to
Herakles and 1,145 Warrants to Astraea (the "WARRANT DISTRIBUTION") and assigned
2,290 Warrants to Crestview Capital Master, LLP and 2,289 Warrants to Big Bend
XI Investments Ltd.;
WHEREAS, on February 22, 2005, Sponsor distributed 36,105 Series CC
Preferred to Herakles and 5,389 Series CC Preferred to Astraea (the "SERIES CC
DISTRIBUTION");
WHEREAS, pursuant to that certain Series CC Convertible Preferred Stock
Purchase Agreement, dated as of February 22, 2005 (the "SERIES CC PURCHASE
AGREEMENT"), on February 18, 2005, Sponsor sold to the Investors an aggregate of
1,620 Series CC Preferred; and
WHEREAS, in connection with the Warrant Distribution, Series CC
Distribution and Series CC Purchase Agreement Sponsor and the Holders wish to
enter into this Agreement.
NOW, THEREFORE, in consideration of the mutual promises,
representations, warranties, covenants and conditions set forth in this
Agreement, the parties mutually agree as follows:
AGREEMENT
1. Agreement to Vote Exchange Shares. At every meeting of the
stockholders of NATK called, and at every adjournment thereof, and on every
action or approval by written consent of the stockholders of NATK, each Holder,
severally and not jointly, agrees that it shall vote or execute a written
consent, with respect to, as appropriate all the Exchange Shares or Conversion
Securities, as the case may be, as to which it has power to vote in any such
vote or consent in accordance with the written directions given by Sponsor.
2. IRREVOCABLE PROXY. EACH HOLDER HEREBY, SEVERALLY AND NOT JOINTLY,
GRANTS TO, AND APPOINTS SPONSOR AND ANY OFFICERS OF SPONSOR, AND ANY INDIVIDUAL
WHO SHALL HEREAFTER SUCCEED TO ANY SUCH OFFICE OF SPONSOR, AND ANY OTHER
DESIGNEE OF SPONSOR, EACH OF THEM INDIVIDUALLY, SUCH HOLDER'S PROXY AND
ATTORNEY-IN-FACT (WITH FULL POWER OF SUBSTITUTION) TO VOTE OR ACT BY WRITTEN
CONSENT WITH RESPECT TO SUCH HOLDER'S EXCHANGE SHARES OR CONVERSION SECURITIES
AS THE CASE MAY BE IN ACCORDANCE WITH SECTION 1 HEREOF. THIS PROXY IS COUPLED
WITH AN INTEREST AND SHALL BE IRREVOCABLE UNTIL THE TERMINATION DATE, AND EACH
HOLDER WILL TAKE SUCH FURTHER ACTION OR EXECUTE SUCH OTHER INSTRUMENTS AS MAY
REASONABLY BE NECESSARY TO EFFECTUATE THE INTENT OF THIS PROXY AND HEREBY
REVOKES ANY PROXY PREVIOUSLY GRANTED BY IT WITH RESPECT TO THE EXCHANGE SHARES
OR CONVERSION SECURITIES.
3. Representations and Warranties of the Holders. Each Holder, with
respect to itself and its Exchange Shares or Conversion Securities, as the case
may be, represents and warrants, severally and not jointly, to Sponsor as
follows:
a. Ownership of Exchange Shares. Each Holder is the record
and/or beneficial owner of the number of Exchange Shares set forth on Exhibit B.
Except as set forth herein, Holder has sole voting power and sole power to issue
instructions with respect to the voting of the Exchange Shares, sole power of
disposition, sole power of exercise and the sole power to demand appraisal
rights.
b. Power; Binding Agreement. Each Holder has the legal
capacity, power and authority to enter into and perform all of such Holder's
obligations under this Agreement. The execution, delivery and performance of
this Agreement by each Holder will not violate any other agreement relating to
the Exchange Shares to which the Holder is a party, including, without
limitation, any voting agreement, shareholder's agreement, partnership agreement
or voting trust. This Agreement has been duly and validly executed and delivered
by such Holder and constitutes a valid and binding agreement of such Holder,
enforceable against such Holder in accordance with its terms, except that (i)
such enforcement may be subject to applicable bankruptcy, insolvency or other
similar laws, now or hereafter in effect, affecting creditors' rights generally,
and (ii) the remedy of specific performance and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the discretion of
the court before which any proceeding therefor may be brought.
c. No Conflicts. No filing with, and no permit, authorization,
consent or approval of, any state or federal public body or authority is
necessary for the execution of this Agreement by such Holder and the
consummation by such Holder of the transactions contemplated hereby and neither
the execution and delivery of this Agreement by such Holder nor the consummation
by such Holder of the transactions contemplated hereby nor compliance by such
Holder with any of the provisions hereof shall conflict with or result in any
breach of any applicable partnership or other organizational documents
applicable to such Holder, result in a violation or breach of, or constitute
(with or without notice or lapse of time or both) a default (or give rise to any
third-party right of termination, cancellation, material modification or
acceleration) under any of the terms, conditions or provisions of any note,
bond, mortgage, indenture, license, contract, commitment, arrangement,
understanding, agreement or other instrument or obligation of any kind to which
such Holder is a party or by which such Holder's properties or assets may be
bound or violate any order, writ, injunction, decree, judgment, order, statute,
rule or regulation applicable to such Holder or any of such Holder's properties
or assets, except for any such conflicts, breaches, defaults or violations as
would not materially impair such Holder's performance of its obligations
hereunder.
d. No Liens. The Exchange Shares and as converted the
Conversion Securities are now and, at all times during the term hereof, will be
held by such Holder, or by a nominee or custodian for the benefit of such
Holder, free and clear of all liens, security interests, proxies, voting trusts
or agreements, understandings or arrangements or any other encumbrances
whatsoever.
e. Stockholders Agreement. Each Holder, severally and not
jointly, agrees that it shall be bound by the terms of the Stockholders
Agreement, dated as of February __, 2005, by and among Big Bend XI Investments,
Ltd., Crestview Capital Master, LLC, HLT FFT, LLC, Midsummer Investment Ltd.,
Islandia, L.P., Xxxxxxx Xxxxxxx and Sponsor, attached hereto as Exhibit C.
4. GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND DUTIES OF THE
PARTIES HERETO SHALL BE GOVERNED BY THE LAWS OF THE STATE OF DELAWARE (WITHOUT
REGARD TO PRINCIPLES OF CONFLICT OF LAWS).
5. CONSENT TO JURISDICTION. EACH PARTY HEREBY IRREVOCABLY AGREES THAT
ANY SUIT, ACTION, PROCEEDING OR CLAIM AGAINST HIM, HER OR IT ARISING OUT OF OR
IN ANY WAY RELATING TO THIS AGREEMENT OR ANY OF THE RELATED AGREEMENTS, OR ANY
JUDGMENT ENTERED BY ANY COURT IN RESPECT THEREOF, MAY BE BROUGHT OR ENFORCED IN
THE STATE OR FEDERAL COURTS LOCATED IN THE CITY OF DALLAS, TEXAS,
AND EACH PARTY HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY
PROCEEDING BROUGHT IN THE CITY OF DALLAS, TEXAS, AND FURTHER IRREVOCABLY WAIVES
ANY CLAIMS THAT ANY SUCH PROCEEDING HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
6. WAIVER OF JURY TRIAL. EACH PARTY HEREBY EXPRESSLY WAIVES ANY RIGHT
TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHT,
POWER, OR REMEDY UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE
RELATED AGREEMENTS OR UNDER OR IN CONNECTION WITH ANY AMENDMENT, INSTRUMENT,
DOCUMENT, OR AGREEMENT DELIVERED OR FROM ANY RELATIONSHIP EXISTING IN CONNECTION
WITH THIS AGREEMENT OR ANY RELATED AGREEMENT, AND AGREES THAT ANY SUCH ACTION
SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY. THE TERMS AND PROVISIONS OF
THIS SECTION 6 CONSTITUTE A MATERIAL INDUCEMENT FOR THE PARTIES ENTERING INTO
THIS AGREEMENT.
7. Specific Performance. The parties hereto agree that irreparable harm
would occur in the event that any of the provisions of this Agreement were not
performed in accordance with its specific terms or were otherwise breached. It
is accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions hereof in any court of the United States or any state
thereof having jurisdiction, this being in addition to any other remedy to which
they are entitled at law or in equity.
8. Reproduction of Documents. This Agreement and all documents relating
hereto, including, but not limited to, (a) consents, waivers, amendments and
modifications which may hereafter be executed and (b) certificates and other
information previously or hereafter furnished, may be reproduced by any
photographic, photostatic, microfilm, optical disk, micro-card, miniature
photographic or other similar process. The parties agree that any such
reproduction shall be admissible in evidence as the original itself in any
judicial or administrative proceeding, whether or not the original is in
existence and whether or not such reproduction was made by a party in the
regular course of business, and that any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence.
9. Severability. Whenever possible, each provision of this Agreement
will be interpreted in such manner as to be effective and valid under applicable
Law, but if any provision of this Agreement is held to be prohibited by or
invalid under applicable Law, such provision will be ineffective only to the
extent of such prohibition or invalidity, without invalidating the remainder of
this Agreement.
10. Entire Agreement. This Agreement, together with all Exhibits hereto
and thereto and all other agreements entered into pursuant hereto, constitute
the complete and final agreement of the parties concerning the matters referred
to herein, and supersede all prior agreements and understandings.
11. Execution in Counterparts. This Agreement may be executed in any
number of counterparts, each of which when so executed and delivered shall be
deemed an original, and such counterparts together shall constitute one
instrument
12. Termination. This Agreement shall terminate upon the earlier of (i)
February 22, 2015 or (ii) with respect to the rights and obligations of any
individual Holder, on the first day that such Holder no longer owns any of the
Exchange Shares or Convertible Securities. If the rights and obligations of any
individual Holder are terminated, all other Holders will continue to be bound by
this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first set forth above.
SPONSOR
SPONSOR INVESTMENTS LLC
By: Herakles Investments, Inc., Manager
By: /s/ Xxxxxx X. Xxxxx
---------------------------------------
Name: Xxxxxx X. Xxxxx
Title: President
HOLDERS
HERAKLES INVESTMENTS, INC. ASTRAEA INVESTMENT MANAGEMENT, L.P.
By: Astraea Investment and Management
Services Company, a Delaware corporation,
By: /s/ Xxxxxx X. Xxxxx General Partner
---------------------------
Name: Xxxxxx X. Xxxxx
---------------------------
Title: President By: /s/ Xxxxx Xxxxxxxxxx
--------------------------- ---------------------------
Name: Xxxxx Xxxxxxxxxx
---------------------------
Title: President
---------------------------
By: /s/ Xxxx Xxxxxxxxx By: /s/ Xxxxxxxxxxx Xxxxxxxx
--------------------------- ----------------------------
Name: Xxxx Xxxxxxxxx Name: Xxxxxxxxxxx Xxxxxxxx
By: /s/ Xxxxxxx Xxxxxx By: /s/ Xxxx X. Xxxxxx
--------------------------- ----------------------------
Name: Xxxxxxx Xxxxxx Name: Xxxx X. Xxxxxx
By: /s/ Xxx Xxxx Siang By: /s/ Xxx Xxxx
--------------------------- ----------------------------
Name: Xxx Xxxx Siang Name: Xxx Xxxx
By: /s/ Xxxxx Xxxxxxx By: /s/ Xxxxxxx Xxxxxx
--------------------------- ----------------------------
Name: Xxxxx Xxxxxxx Name: Xxxxxxx Xxxxxx
By: /s/ Xxxxx Xxxxxxx
---------------------------
Name: Xxxxx Xxxxxxx
Voting Agreement Signature Page
EXHIBIT A
INVESTORS
1. Xxxx Xxxxxxxxx
2. Xxxxxxxxxxx Xxxxxxxx
3. Xxxxxxx Xxxxxx
4. Xxxx X. Xxxxxx
5. Xxx Xxxx Siang
6. Xxx Xxxx
7. Xxxxx Xxxxxxx
8. Xxxxxxx Xxxxxx
9. Xxxxx Xxxxxxx
Exhibit A
EXHIBIT B
OWNERSHIP OF EXCHANGE SHARES
HOLDER PREFERRED STOCK WARRANTS
------ --------------- --------
1. Herakles Investments, Inc. 36,105 3,434
2. Astraea Investment Management, 5,389 1,145
L.P.
3. Xxxx Xxxxxxxxx 41 -
4. Xxxxxxxxxxx Xxxxxxxx 000 -
0. Xxxxxxx Xxxxxx 000 -
0. Xxxx X. Xxxxxx 81 -
7. Xxx Xxxx Siang 324 -
8. Xxx Xxxx 648 -
9. Xxxxx Xxxxxxx 20 -
10. Xxxxxxx Xxxxxx 162 -
11. Xxxxx Xxxxxxx 20 -
Exhibit B
EXHIBIT C
STOCKHOLDERS AGREEMENT
[SEE EXHIBIT 5]
Exhibit C