HZO, INC.
 
VOTING AGREEMENT
 
This Voting Agreement (this “Agreement”) is made as of September 25, 2009 by and
among hZo, Inc., a Delaware corporation (the “Company”), the persons and
entities listed on Exhibit A attached hereto (each an “Investor,” and
collectively the “Investors”), and the persons listed on Exhibit B hereto (each
a “Key Holder,” and collectively the “Key Holders”).  The Key Holders and the
Investors are referred to herein collectively as the “Voting Parties.”
 
WHEREAS, the Company proposes to sell shares of the Company’s Series A Preferred
Stock (the “Series A Preferred”) to the Investors pursuant to the Series A
Preferred Stock Purchase Agreement (the “Purchase Agreement”) of even date
herewith (the “Financing”);
 
WHEREAS, Article III, Section 3.5(b) of the Company’s Amended and Restated
Certificate of Incorporation (the “Certificate”) provides that (i) the holders
of the Company’s Preferred Stock shall be entitled to elect two directors (the
“Series A Directors”), (ii) the holders of the Company’s Common Stock, shall be
entitled to elect one director (the “Common Director”) and (iii) the holders of
the Company’s Common Stock and Preferred Stock, voting together as a single
class on an as-converted basis shall be entitled to elect any additional
directors (each an “Additional Director”); and
 
WHEREAS, as a condition to the Financing, the Voting Parties have agreed to
enter into this Agreement;
 
NOW, THEREFORE, in consideration of the mutual promises and covenants herein
contained, and other consideration, the receipt and adequacy of which is hereby
acknowledged, the parties hereto agree as follows:
 
1. Shares.  During the term of this Agreement, the Voting Parties each agree to
vote all shares of the Company’s voting securities now or hereafter owned by
them, whether beneficially or otherwise, or as to which they have voting power
(the “Shares”) in accordance with the provisions of this Agreement.
 
2. Board of Directors; Election
 
(a) Voting. During the term of this Agreement, each Voting Party agrees to vote
all Shares in such manner as may be necessary to elect (and maintain in office)
as members of the Company’s Board of Directors (the “Board”) the following
individuals:
 
(i) The vSpring Designee (as defined below) as one the Series A Directors, so
long as vSpring (as defined below) holds at least 1,000,000 shares of Series A
Preferred (as adjusted for stock splits, stock dividends or distributions,
recapitalizations and similar events);
 
 
 
 

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(ii) The ZAGG Designee (as defined below) as one of the Series A Directors, so
long as ZAGG (as defined below) holds at least 1,000,000 shares of Series A
Preferred (as adjusted for stock splits, stock dividends or distributions,
recapitalizations and similar events);
 
(iii) The CEO Designee (as defined below) as the Common Director; and
 
(iv) Two Mutual Designees (as defined below) Additional Directors.
 
(v) The NMI Designee (as defined below) as an Additional Director, if
applicable, pursuant to Section 2(e) below.
 
(b) Designation of Directors.  The designees to the Board described above (each
a “Designee”) shall be selected as follows:
 
(i) the “vSpring Designee” shall be chosen by vSpring III, L.P. (“vSpring”).
 
(ii) the “ZAGG Designee” shall be chosen by Zagg, Inc. (“ZAGG”).
 
(iii) The “CEO Designee” shall be the Company’s then serving Chief Executive
Officer.
 
(iv) The “Mutual Designees” shall be chosen by a majority of the other then
serving directors.
 
(v) The NMI Designee (as defined below), if applicable, pursuant to Section
2(e).
 
(c) Current Designees.  For the purpose of this Agreement, the current directors
of the Company shall be deemed to be the following Designees: (i) Ed Ekstrom
shall be deemed to be the vSpring Designee, (ii) Robert G. Pedersen II shall be
deemed to be the ZAGG Designee and (iii)  Larry Harmer shall be deemed to be one
of the Mutual Designees.
 
(d) Changes in Designees.  From time to time during the term of this Agreement,
Voting Parties who hold sufficient Shares to select a Designee pursuant to this
Agreement may, in their sole discretion:
 
(i) notify the Company in writing of an intention to remove from the Board any
incumbent Designee who occupies a Board seat for which such Voting Parties are
entitled to designate the Designee; or
 
(ii) notify the Company in writing of an intention to select a new Designee for
election to a Board seat for which such Voting Parties are entitled to designate
the Designee (whether to replace a prior Designee or to fill a vacancy in such
Board seat).
 
In the event of such an initiation of a removal or selection of a Designee under
this section, the Company shall take such reasonable actions as are necessary to
facilitate such removals or elections, including, without limitation, soliciting
the votes of the appropriate stockholders, and the Voting Parties shall vote
their Shares to cause the removal from the Board of the Designee or Designees so
designated for removal and the election to the Company’s Board Directors of any
new Designee or Designees so designated.
 
 
 
 

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(e) Additional Directors.  Notwithstanding the above, if at any time Northeast
Maritime Institute, Inc. (“NMI”) gives written notice to the Company that NMI
desires representation on the Board and so long as NMI owns not less than five
percent (5%) of the voting capital stock of the Company, then, the Company shall
as soon as practicable undertake to increase the size of the Board to a total of
seven (7) members.  In order to fill the resulting vacancies, each Voting Party
shall cause to be elected to the Board one (1) additional Mutual Designee and,
so long as NMI owns not less than five percent (5%) of the voting capital stock
of the Company, one (1) individual designated from time to time in a writing
delivered to the Company and signed by NMI (the “NMI Designee”).
 
(f) Board Observers.  Notwithstanding anything to the contrary herein, so long
as NMI owns not less than five percent (5%) of the voting stock of the Company,
the Company shall invite a representative of NMI, who shall initially be Eric
Dawicki, to attend all regular meetings of the Board in a nonvoting observer
capacity and, in this respect, shall give such representative copies of all
notices, minutes, consents, and other materials that it provides to its
directors at the same time and in the same manner as provided to such directors;
provided, however, that such representative shall agree to hold in confidence
and trust and to act in a fiduciary manner with respect to all information so
provided; and, provided further, that the Company reserves the right to withhold
any information and to exclude such representative from any meeting or portion
thereof if access to such information or attendance at such meeting could
adversely affect the attorney-client privilege between the Company and its
counsel, result in disclosure of trade secrets or a conflict of interest, or if
NMI or its representative is a competitor of the Company.
 
3. Drag-Along Right.  If any Investor or the Company receives a bona fide offer
from a person or entity that is not an Affiliate (as defined in Rule 405 of the
Securities Act) of any Investor or the Company to effect a Change of Control
Transaction (as defined below) and such transaction is approved by the Board and
Investors holding two-thirds (2/3rds) or more of the shares of Series A
Preferred Stock, each Investor and Key Holder hereby agrees to (i) vote all
shares held by such Voting Party in favor of such Change of Control Transaction,
(ii) to sell or exchange all shares of stock then held by such Voting Party
pursuant to the terms and conditions of such Change of Control Transaction,
(iii) not to assert any “dissenters” or similar statutory or legal right or
otherwise challenge the Change of Control Transaction, and (iv) take any and all
other steps required to consummate such Change of Control Transaction; subject
to the following conditions:
 
(a) no Key Holder shall be required to provide any indemnification or
contribution disproportionate to that of the Investors in light of the
allocation of the proceeds from the sale, and the maximum obligation of any
Voting Party under such provisions shall be limited to the amount of such Voting
Party’s proceeds (whether cash or otherwise) from the sale;
 
 
 
 

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(b) the consideration payable with respect to each share in each class or series
as a result of such Change of Control Transaction is the same (except for cash
payments in lieu of fractional shares) as for each other share in such class or
series;
 
(c) each class and series of capital stock of the Company will be entitled to
receive the same form of consideration (and be subject to the same indemnity and
escrow provisions) as a result of such Change of Control Transaction;
 
(d) the payment with respect to each share of Common Stock is an amount at least
equal to the amount payable in accordance with the Certificate, if such Change
of Control Transaction were deemed a Liquidation Event (as defined therein); and
 
(e) no Key Holder (other than then current officers of the Company) will be
required to make any representation, warranty or certification, or give an
indemnity, other than regarding its ownership of the shares to be sold by it,
the absence of any lien thereon, such Key Holder’s ability to take the actions
required of such shareholder to consummate the sale of the Company, and the
enforceability against such Key Holder of the agreements relating to such sale
to which such Key Holder is a party.
 
4. Termination.  This Agreement shall automatically terminate upon the earlier
of (i) the consummation of a Change of Control Transaction (as defined below) or
(ii) at such time as the Investors owns less than 25% of the Series A Preferred
originally purchased by the Investors (as adjusted for stock splits, stock
dividends or distributions, recapitalizations and similar events).  The
provisions of Section 3 shall automatically terminate upon the closing of the
Company’s first firm commitment underwritten public offering pursuant to an
effective registration statement filed under the Securities Act of 1933, as
amended, covering the offer and sale of the Company’s Common Stock, with gross
proceeds to the Company in excess of $25,000,000.
 
5. Additional Shares.  In the event that subsequent to the date of this
Agreement any shares or other securities (other than pursuant to a Change of
Control Transaction) are issued on, or in exchange for, any of the Shares by
reason of any stock dividend, stock split, consolidation of shares,
reclassification or consolidation involving the Company, such shares or
securities shall be deemed to be Shares for purposes of this Agreement.
 
6. Restrictive Legend.  Each certificate representing any of the Shares subject
to this Agreement shall be marked by the Company with a legend reading as
follows:
 
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A VOTING AGREEMENT AND
BY ACCEPTING ANY INTEREST IN SUCH SHARES THE PERSON HOLDING SUCH INTEREST SHALL
BE DEEMED TO AGREE TO AND SHALL BECOME BOUND BY ALL THE PROVISIONS OF SAID
VOTING AGREEMENT, A COPY OF WHICH MAY BE OBTAINED AT THE PRINCIPAL OFFICE OF THE
COMPANY
 
 
 
 

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7. Miscellaneous
 
(a) Certain Definitions.
 
(i) “Change of Control Transaction” means (i) the acquisition of the Company by
another entity by means of any transaction or series of related transactions to
which the Company is party (including, without limitation, any stock
acquisition, reorganization, merger or consolidation but excluding any sale of
stock for capital raising purposes) other than a transaction or series of
transactions in which the holders of the voting securities of the Company
outstanding immediately prior to such transaction continue to retain (either by
such voting securities remaining outstanding or by such voting securities being
converted into voting securities of the surviving entity), as a result of shares
in the Company held by such holders prior to such transaction, at least fifty
percent (50%) of the total voting power represented by the voting securities of
the Company or such surviving entity outstanding immediately after such
transaction or series of transactions; (ii) a sale, lease or other conveyance of
all or substantially all of the assets of the Company; or (iii) any liquidation,
dissolution or winding up of the Company, whether voluntary or involuntary.
 
(ii) Shares “held” by a Voting Party shall mean any Shares directly or
indirectly owned (of record or beneficially) by such Voting Party or as to which
such Voting Party has voting power.
 
(iii) “Vote” shall include any exercise of voting rights whether at an annual or
special meeting or by written consent or in any other manner permitted by
applicable law.
 
(b) Notices.  All notices and other communications required or permitted
hereunder shall be in writing and shall be mailed by registered or certified
mail, postage prepaid, sent by facsimile or otherwise delivered by hand or by
messenger addressed:
 
(i) if to an Investor, at the Investor’s address or facsimile number as shown in
the Company’s records, as may be updated in accordance with the provisions
hereof;
 
(ii) if to any Key Holder, at such address or facsimile number as shown in the
Company’s records, or, until any such holder so furnishes an address or
facsimile number to the Company, then to and at the address of the last holder
of such shares for which the Company has contact information in its records; or
 
(iii) if to the Company, to 3855 South 500 West, Suite J, Salt Lake City, UT
84115, Attn: President, or to such other address as the Company shall have
furnished to the Investors.
 
Each such notice or other communication shall for all purposes of this Agreement
be treated as effective or having been given when delivered if delivered
personally, or, if sent by mail, at the earlier of its receipt or 72 hours after
the same has been deposited in a regularly maintained receptacle for the deposit
of the United States mail, addressed and mailed as aforesaid or, if sent by
facsimile, upon confirmation of facsimile transfer.  In the event of any
conflict between the Company’s books and records and this Agreement or any
notice delivered hereunder, the Company’s books and records will control absent
fraud or error.
 
 
 
 

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(c) Successors and Assigns.  The provisions of this Agreement shall inure to the
benefit of, and be binding upon, the successors, assigns, heirs, executors and
administrators of the parties hereto. The Company shall not permit the transfer
of any Shares on its books or issue a new certificate representing any Shares
unless and until the person to whom such security is to be transferred shall
have executed a written agreement pursuant to which such person becomes a party
to this Agreement and agrees to be bound by all the provisions hereof as if such
person was a Voting Party hereunder.
 
(d) Governing Law.  This Agreement shall be governed in all respects by the
internal laws of the State of Delaware as applied to agreements entered into
among Delaware residents to be performed entirely within Delaware, without
regard to principles of conflicts of law.
 
(e) Titles and Subtitles.  The titles and subtitles used in this Agreement are
used for convenience only and are not to be considered in construing or
interpreting this Agreement.  All references in this Agreement to sections,
paragraphs and exhibits shall, unless otherwise provided, refer to sections and
paragraphs hereof and exhibits attached hereto.
 
(f) Further Assurances.  Each party hereto agrees to execute and deliver, by the
proper exercise of its corporate, limited liability company, partnership or
other powers, all such other and additional instruments and documents and so all
such other acts and things as may be necessary to more fully effectuate this
Agreement.
 
(g) Entire Agreement.  This Agreement and the exhibits hereto constitute the
full and entire understanding and agreement between the parties with regard to
the subjects hereof.  No party hereto shall be liable or bound to any other
party in any manner with regard to the subjects hereof or thereof by any
warranties, representations or covenants except as specifically set forth
herein.
 
(h) Grant of Proxy.  Upon the failure of any Voting Party to vote their Shares
in accordance with the terms of this Agreement, such Voting Party hereby grants
to a stockholder designated by the Board a proxy coupled with an interest in all
Shares owned by such party to vote such Shares in accordance with the terms of
this Agreement, which proxy shall be irrevocable until this Agreement terminates
pursuant to its terms or this Section 7(h) is amended to remove such grant of
proxy.
 
(i) Not a Voting Trust.  This Agreement is not a voting trust governed by
Section 218 of the Delaware General Corporation Law and should not be
interpreted as such.
 
(j) Specific Performance.  It is agreed and understood that monetary damages
would not adequately compensate an injured party for the breach of this
Agreement by any party, that this Agreement shall be specifically enforceable,
and that any breach or threatened breach of this Agreement shall be the proper
subject of a temporary or permanent injunction or restraining order.  Further,
each party hereto waives any claim or defense that there is an adequate remedy
at law for such breach or threatened breach.
 
 
 
 

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(k) Amendment.  Except as expressly provided herein, neither this Agreement nor
any term hereof may be amended, waived, discharged or terminated other than by a
written instrument referencing this Agreement and signed by the Company and the
holders of at least two-thirds (2/3rds) of the Shares held by the Voting
Parties; provided, however, that if any amendment, waiver, discharge or
termination operates in a manner that treats any Key Holder or Investor
different from other Key Holders or Investors, as the case may be, the consent
of such Key Holder or Investor shall also be required for such amendment,
waiver, discharge or termination; and provided, further, that Investors
purchasing shares of Series A Preferred Stock in a Subsequent Closing (as
defined in the Purchase Agreement) may become parties to this Agreement by
executing a counterpart of this Agreement, without any amendment of this
Agreement, pursuant to this paragraph or any consent or approval of any other
Investor.  Any such amendment, waiver, discharge or termination effected in
accordance with this paragraph shall be binding upon each Voting Party that has
entered into this voting agreement.  Each Voting Party acknowledges that by the
operation of this paragraph, the holders of two-thirds (2/3rds) of the Shares
held by the Voting Parties will have the right and power to diminish or
eliminate all rights of such Voting Party under this Agreement.
 
Notwithstanding the foregoing, the provisions of:
 
(i) Section 2(b)(i) may be amended and the observance of any term thereof may be
waived (either generally or in a particular instance and either retroactively or
prospectively) only with the written consent of the party or parties then
entitled to designate the vSpring Designee;
 
(ii) Section 2(b)(ii) may be amended and the observance of any term thereof may
be waived (either generally or in a particular instance and either retroactively
or prospectively) only with the written consent of the party or parties then
entitled to designate the ZAGG Designee;
 
(iii) Section 2(b)(iii) may be amended and the observance of any term thereof
may be waived (either generally or in a particular instance and either
retroactively or prospectively) only with the written consent of a
majority-in-interest of the holders of Common Stock;
 
(iv) Section 2(b)(iv) may be amended and the observance of any term thereof may
be waived (either generally or in a particular instance and either retroactively
or prospectively) only with the written consent of a majority-in-interest of the
holders of Common Stock and Series A Preferred, voting together as a single
class; and
 
(v) Section 2(b)(v) may be amended and the observance of any term thereof may be
waived (either generally or in a particular instance and either retroactively or
prospectively) only with the written consent of the party or parties then
entitled to designate the NMI Designee.
 
(l) No Waiver.  The failure or delay by a party to enforce any provision of this
Agreement will not in any way be construed as a waiver of any such provision or
prevent that party from thereafter enforcing any other provision of this
Agreement.  The rights granted both parties hereunder are cumulative and will
not constitute a waiver of either party’s right to assert any other legal remedy
available to it.
 
 
 
 

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(m) No Liability for Election of Recommended Directors.  Neither the Company,
the Key Holders, the Investors, nor any officer, director, stockholder, partner,
employee or agent of any such party, makes any representation or warranty as to
the fitness or competence of the nominee of any party hereunder to serve on the
Board by virtue of such party’s execution of this Agreement or by the act of
such party in voting for such nominee pursuant to this Agreement.
 
(n) Severability. If any provision of this Agreement becomes or is declared by a
court of competent jurisdiction to be illegal, unenforceable or void, portions
of such provision, or such provision in its entirety, to the extent necessary,
shall be severed from this Agreement, and such court will replace such illegal,
void or unenforceable provision of this Agreement with a valid and enforceable
provision that will achieve, to the extent possible, the same economic, business
and other purposes of the illegal, void or unenforceable provision.  The balance
of this Agreement shall be enforceable in accordance with its terms.
 
(o) Counterparts.  This Agreement may be executed in one or more counterparts,
each of which will be deemed an original, but all of which together will
constitute one and the same agreement.  Facsimile copies of signed signature
pages will be deemed binding originals.
 
(Signature page follows)

 
 
 
 

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The parties have executed this Voting Agreement as of the date first above
written.
 
“COMPANY”
 
HZO, INC.
a Delaware corporation
 
By:
Robert G. Pedersen II
President

 
“INVESTOR”
 
vSPRING III, L.P.
a Delaware limited partnership
By:           vSpring Management III, L.L.C.,
Its:           General Partner
 
By:                                                                    
Name:           Ed Ekstrom
Title:           Managing Member

 
“INVESTORS”

NORTHEAST MARITIME INSTITUTE, INC.

By:

Name:                                                                    

Title:                                                                    

 
 “INVESTORS”
 

ZAGG, INC.

By:

Name:                                                                    

Title:                                                                    
 
“INVESTORS”

[ADDITIONAL INVESTOR]

By:

Name:                                                                    

Title:                                                                    
 
“KEY HOLDERS”

 

 

 

 
Robert G. Pedersen II

Eric Dawicki

Larry Harmer

Ed Ekstrom

CB Gordon

Brandon O’Brien

Brian Packer

Derek Smith

Sidney Martin
 

 

 
 

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Exhibit A

INVESTORS

Investor
 
vSpring III, L.P.
2795 E. Cottonwood Pkwy., Suite 360
Salt Lake City, Utah 84121
Attn:  Ed Ekstrom
Tel: (801) 942.8999
Fax: (801) 942.1636
 
Northeast Maritime Institute, Inc.
32 Washington St.
Fairhaven, MA  02719
Attn:  President
Tel: 800-767-4025
Fax: 508-992-1236
 
ZAGG, Inc.
3855 So. 500 W. Suite B
Salt Lake City, UT 84115-4279
Attn:  President
Tel: 801-263-0699
Fax: [_________]
 
[Other Investors]
[Address]
Attn:  [__________]
Tel: [_________]
Fax: [_________]

 
 
 
 
 

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Exhibit B

KEY HOLDERS

Robert G. Pedersen II
[address]
 
Eric Dawicki
[address]
 
Larry Harmer
[address]
 
Ed Ekstrom
[address]
 
CB Gordon
[address]
 
Brandon O’Brien
[address]
 
Brian Packer
[address]
 
Derek Smith
[address]
 
Sidney Martin
[address]