EXHIBIT 10.45
VOTING AND SHAREHOLDERS AGREEMENT
VOTING AND SHAREHOLDERS AGREEMENT dated as of September 3, 1998 by
and between PIONEER VENTURES ASSOCIATES LIMITED PARTNERSHIP, having an office at
651 Day Hill Road, Windsor, Connecticut 06095 (the "PIONEER PARTNERSHIP "), AND,
(A) SHASHIKANT S. SHETH, JAMMADAS SHETH, KIRIT SHETH, MAHENDRA SHETH, VIREN S.
SHETH, JAY J. SHETH, B.J. HARID, NEVELL INVESTMENTS, S.A.,TRANSVIT MANUFACTURING
CORPORATION, STARION INTERNATIONAL LIMITED, STARION B.V.I., AND (B) ARON ZUTLER,
PETER LIMAN, ROBERT VIOLA, RICHARD HOWARD, RICHARD P. RIFENBURGH, ROBERT R.
SPARCINO, or any trusts, or other entities or affiliates (collectively
hereinafter referred to as the "PRINCIPAL SHAREHOLDERS"). Those Principal
Shareholders listed in (b) above shall be automatically released from their
respective obligations and rights hereunder on the date that such Principal
Shareholder ceases to be affiliated with the Company, PROVIDED that the
remaining Principal Shareholders shall maintain such 51% ownership as specified
below.
WHEREAS, the Principal Shareholders have sole or shared voting power
over an aggregate of at least 15,237,984 of the shares of the common stock, $.01
par value per share ("COMMON SHARES"), of TRISTAR CORPORATION (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 may make additional
investments in the Company through one or more Preferred Stock investments 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.
NOW, THEREFORE, in consideration of the mutual promises contained
herein, the parties hereto agree as follows:
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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 any Preferred Stock (as
defined in the Investment Agreement), or Common Stock (as defined in the
Investment Agreement), each of them shall vote all of his, hers or its 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 Section 1.10(a) 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, subject to the qualifications for such designee as set forth in the
Investment Agreement, shall be a director of the Company at all times while any
Preferred Stock or Common Stock is held by the Pioneer Partnership.
1.2 SPECIAL MEETING UPON DEFAULT. In the event the default under, or a
breach of, this Agreement, or the Investment Agreement, or the Certificate of
Designation of Preferred Stock at any time while the Pioneer Partnership or its
limited partners (in the event of a distribution of such securities to the
limited partners) are a holder of 75,000 shares or more of the Common Stock,
directly or through the possible conversion of the Preferred Stock, all on a
fully diluted basis, the Principal Shareholders agree to call a special meeting
of the Shareholders at the sole expense of the Company and they each agree that
they shall vote in favor of the nominee to the Board of Directors designated by
the Pioneer Partnership under ss.1.1 hereof and for one (1) additional nominee
designated by the Pioneer Partnership to be elected as a director. The board of
directors shall then be comprised of members constituting at least a simple
majority of directors who are independent of the Core Sheth Families (as the
term
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"Core Sheth Families" is defined in the Investment Agreement) and the Company,
and of which two directors shall be the Pioneer Partnerships' nominees; such
election or appointment shall be effective no later than 30 days after and
during the continuation of any such defaults. The nominee of the Pioneer
Partnership shall be reasonably acceptable to the board of directors of the
Company to serve as a director. Grounds for rejecting such nominee shall be any
matter of record of the nominee which would cause the Company to be in violation
of any order issued by the Commission or such nominee is disqualified as a
result of Rule 262(b) promulgated under the 1933 Act; provided, however, no such
nominee shall be an affiliate of a competitor of the Company. The two directors
designated by the Pioneer Partnership for nomination and election or appointment
together with the other independent outside directors shall form and constitute
the Company's Post-Default Executive Committee which shall be granted full
executive and operational control over the Company's operations. The Principal
Shareholders hereby agree to take no action to contravene, limit or otherwise
terminate such the Pioneer Partnership board majority mechanism. The Principal
Shareholders agree to vote in favor of such the Pioneer Partnership nominees for
as long as any interest or principal remains unpaid under such Preferred Stock.
1.3 PRESERVATION OF BYLAWS. If the directors or the shareholders of the
Company amend the Bylaws to permit more than nine (9) directors at any time
while the Pioneer Partnership or its limited partners (in the event of a
distribution of such securities to the limited partners) are a holder of 75,000
shares or more of the Common Stock, directly or through the possible conversion
of the Preferred Stock, all on a fully diluted basis, notice shall be given to
the Pioneer Partnership, thereafter, immediately upon the written demand
therefor by the Pioneer Partnership, the Principal Shareholders shall call a
special meeting of the Shareholders at the sole expense of the Company. The
Principal Shareholders each agree that they shall vote all of their Common
Shares, whether now owned or hereafter acquired, for the Bylaws to reduce the
number of directors to no more than nine (9).
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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 without the prior written consent
of the Pioneer Partnership which consent will not be unreasonably withheld,
shall transfer any Common Shares, whether now or hereafter acquired, (i) to any
person, (ii) to any affiliate, as hereinafter defined, unless the affiliate
shall have first delivered a written agreement of such affiliate agreeing 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 (iii) pursuant to a registration
statement; PROVIDED HOWEVER, the consent of the Pioneer Partnership shall not be
required if the aggregate holdings of the Principal Shareholders shall equal
fifty-one percent (51%) or more on a fully diluted basis (including all of the
issued Series C Preferred Stock) of the issued Common Shares. The term
"affiliate" shall have the same meaning as provided in Rule 405 promulgated
under the 1933 Act.
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 SEPTEMBER
3, 1998, A COPY OF WHICH IS ON FILE AT THE OFFICES OF THE ISSUER. 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.
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2.3 PERMISSIBLE PLEDGE TRANSACTIONS. Notwithstanding any legal requirement
to the contrary, the Pioneer Partnership agrees that the pledge by the Principal
Shareholders of any securities to any third-party lenders is permitted, PROVIDED
that the aggregate holdings of all of the Principal Shareholders plus the
holdings of the Pioneer Partnership shall not be less than fifty-one (51%)
percent of the issued voting stock of the Company on a fully diluted basis
including all of the issued Series C Preferred Stock (the "MINIMUM PERCENTAGE").
In the event that any of the Principal Shareholders desire to pledge any
securities which decrease the number of such aggregate holdings below the
Minimum Percentage, then the Pioneer Partnership's consent to such pledge shall
be valid only upon the third-party lenders entering into a Voting and
Shareholders Agreement with the Pioneer Partnership on terms and conditions
substantially similar to the terms hereof, and such agreement shall be
satisfactory in all respects to the Pioneer Partnership. The third-party lenders
shall agree therein that in the event that they obtain equitable or legal title,
or any voting rights, to any securities of the Company, that they shall perform
under the agreement as if they were Principal Shareholders hereunder.
ARTICLE III. CO-SALE PROVISIONS
3.1 THIRD-PARTY OFFER AND NOTICE. Any sale of the Common Shares by any
Principal Shareholder will be subject to a participation right of co-sale by
Pioneer Ventures or its limited partners, in the event of a distribution to such
limited partners, 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, such Principal Shareholders
shall submit a written notice (the "CO-SALE NOTICE") to Pioneer Ventures
disclosing the number 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 Shareholders.
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3.2 CO-SALE RIGHT OF PARTICIPATION. Upon receipt of a Co-Sale Notice from
any Principal Shareholder, Pioneer Ventures or its limited partners, in the
event of a distribution to such limited partners, 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. Each participating selling party who elects to
participate in such sale shall be entitled to sell his Pro Rata Share (as herein
defined) of the number of shares the purchaser is willing to purchase. "PRO RATA
SHARE" as used in the preceding sentence means the product of the number of
shares owned by such party and a fraction, the numerator of which is the number
of fully diluted shares held by such party, and the denominator of which is the
total number of fully diluted shares held by all shareholders participating in a
subject sale. 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, Rule 144 or otherwise.
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, 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.
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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 number of Common Shares set forth opposite his/her name
on EXHIBIT A to this Agreement.
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; provided, however, the
Pioneer Partnership shall not assign this Agreement nor any of its rights or
obligations hereunder to any party, except to its limited partners, in the event
of a distribution to its limited partners, without the prior written consent of
a majority of the Principal Shareholders.
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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 Delaware 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.
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".
5.12 Facsimile or other electronically delivered signatures may be relied
upon as valid, binding and enforceable signatures of the parties delivering such
signatures by such means.
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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: Ventures Management Partners LLC
Its General Partner
By: Pioneer Ventures Corp.,
Its Managing Member
BY: ROBERT A. LERMAN
Robert A. Lerman, President
[Signature Pages Continue on following pages]
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BY THE PRINCIPAL SHAREHOLDERS:
/s/ MAHENDRA SHETH /s/ SHASHIKANT S. SHETH
MAHENDRA SHETH SHASHIKANT S. SHETH
/s/ JAMMADAS SHETH /s/ KIRIT SHETH
JAMMADAS SHETH KIRIT SHETH
/s/ JAY J. SHETH /s/ VIREN S. SHETH
JAY J. SHETH VIREN S. SHETH
/s/ B.J. HARID
B.J. HARID
NEVELL INVESTMENTS, S.A. STARION B.V.I.
BY: ____________________ BY:_________________
Its Director Its Director
TRANSVIT MANUFACTURING CORPORATION STARION INTERNATIONAL LIMITED
BY:_________________ BY:_________________
Its Director Its Director
/s/ RICHARD P. RIFENBURGH /s/ ARON ZUTLER
RICHARD P. RIFENBURGH ARON ZUTLER
/s/ PETER LIMAN /s/ ROBERT R. SPARACINO
PETER LIMAN ROBERT R. SPARACINO
/s/ ROBERT VIOLA /s/ RICHARD HOWARD
ROBERT VIOLA RICHARD HOWARD
_____________________________
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_____________________________
CONSENTED TO, AND THE OBLIGATION SET FORTH IN ARTICLE
I TO PAY FOR SUCH SPECIAL MEETINGS OF THE SHAREHOLDERS
IS HEREBY AGREED TO:
TRISTAR CORPORATION
BY: ___________________________
Name:
Title:
EXHIBIT A
TO
VOTING AGREEMENT
PRINCIPAL SHAREHOLDERS
NO. OF PERCENTAGE
NAME AND ADDRESS(1) SHARES OWNERSHIP
------------------------ ---------- ---------------
A) CORE SHETH FAMILIES ET AL.
SHASHIKANT S. SHETH
JAMMADAS SHETH
KIRIT SHETH
MAHENDRA SHETH
VIREN S. SHETH
JAY J. SHETH
TRANSVIT MANUFACTURING CORPORATION
STARION INTERNATIONAL LIMITED
STARION B.V.I.
NEVELL INVESTMENTS, S.A.
B.J. HARID
TOTAL RE CORE SHETH FAMILIES ET AL. 14,697,984 73%
(B) OTHER OFFICERS AND DIRECTORS
ARON ZUTLER 10,000
PETER LIMAN 30,000
ROBERT VIOLA 150,000
RICHARD HOWARD 250,000
RICHARD P. RIFENBURGH 50,000
ROBERT R. SPARACINO 50,000
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(1) The address for these individuals and entities is c/o Tristar Corporation,
12500 San Pedro Avenue, Suite 500, San Antonio, Texas 78216