Exhibit 5
DISTRIBUTION AND PURCHASE AGREEMENT
This DISTRIBUTION AND PURCHASE AGREEMENT (this "Agreement") is made
and entered into as of April 30, 2002, by and among Xxxxxx Xxxxxxx ("Xxxxxxx"),
Xxxxx XxXxxxxxx ("XxXxxxxxx") and Xxxxxxxxxx Investments, LLC, a Florida limited
liability company ("Xxxxxxxxxx").
RECITALS
WHEREAS, Kushner, DiLorenzo, Xxxxxx Xxxxxxx Boxing, Inc., a
Delaware corporation ("Boxing") and Zenascent, Inc., a Delaware corporation
("Zenascent"), have negotiated an Agreement and Plan of Merger pursuant to
which Zenascent would acquire Boxing by merger (the "Zenascent Merger
Agreement");
WHEREAS, the consummation of the transactions contemplated by the
Zenascent Merger Agreement is conditioned upon Boxing's acquisition by merger
(the "Big Content Merger") of Big Content, Inc., a Delaware corporation ("Big
Content"), all of the issued and outstanding capital stock of which is owned by
Xxxxxxxxxx and its Affiliates and XxXxxxxxx;
WHEREAS, in order to induce Xxxxxxxxxx, in its capacity as
controlling stockholder of Big Content, to approve the Big Content Merger,
Xxxxxxx and XxXxxxxxx (each, a "Restricted Person") are prepared to agree with
Xxxxxxxxxx on certain conditions to and restrictions on the transfer by
Restricted Persons of Zenascent capital stock; and
WHEREAS, in consideration for their agreement to the abovementioned
conditions and restrictions, Xxxxxxxxxx is prepared to agree with Xxxxxxx and
XxXxxxxxx on certain restrictions on its transfer of certain Zenascent capital
stock.
NOW, THEREFORE, in reliance on and in consideration of the premises
and of the mutual benefits and covenants contained herein, the parties hereto,
intending to be bound, hereby agree as follows:
1. RESTRICTIONS ON TRANSFER OF ZENASCENT STOCK
(a) A Restricted Person may not transfer, assign, sell, pledge,
hypothecate or otherwise encumber any shares of Zenascent capital stock (any
such transaction, a "Transfer") without Xxxxxxxxxx'x prior written consent,
provided that a Restricted Person may Transfer up to fifty percent (50%) of the
shares of Zenascent capital stock then held by him (a "Restricted Sale") in
compliance with the provisions of Sections 2(a) and 3.
(b) Except as contemplated under section 3(b) of the Consulting
Agreement, dated as of the date hereof, by and between Zenascent, Big Content,
Xxxxxx Xxxxxxx Promotions, Ltd., a New York corporation ("CKP"), Boxing and
Xxxxxxxxxx (the "Consulting Agreement"), Xxxxxxxxxx shall not, and shall cause
each of its Affiliates (as hereinafter defined) not to, Transfer any shares of
Series C Convertible Redeemable Preferred Stock, par value $0.01 per share, of
Zenascent ("Series C Stock"), other than to Xxxxxx Xxxxxxx, Xxxxx XxXxxxxxx or
any of their respective Affiliates. As used herein, an "Affiliate" shall have
the meaning ascribed to such term in Rule 12b-2 of the General Rules and
Regulations under the Securities and Exchange Act of 1934, as amended.
2. PURCHASE OBLIGATION
(a) Subject to the provisions of Section 3(b), within five (5) days
after the consummation of a Restricted Sale, the Restricted Person making such
Restricted Sale shall purchase from Xxxxxxxxxx, to the extent then held by
Xxxxxxxxxx, shares of Series C Stock having an aggregate value equal to the
following percentage of the net proceeds of such Restricted Sale to such
Restricted Person: (a) until such time as Xxxxxxxxxx and its Affiliates have
received an aggregate of $2,500,000 in Covered Payments (as defined in Section
4(b)), fifty percent (50%); and (b) thereafter, thirty-three percent (33%).
(b) Within five (5) days after his receipt of any cash dividends or
other distributions with respect to the Zenascent capital stock then held by
him, a Restricted Person shall purchase from Xxxxxxxxxx, to the extent then held
by Xxxxxxxxxx, Series C Stock having an aggregate value equal to fifty percent
(50%) of the net amount of such dividend or distribution.
(c) The price per share of any Series C Stock purchased from
Xxxxxxxxxx pursuant to this Section 2 shall be the liquidation value of such
Series C Stock.
3. DISTRIBUTION OF CERTAIN PROCEEDS
(a) Within five (5) days after the consummation of a Transfer of
common stock, par value $0.01 per share, of Zenascent ("Zenascent Common Stock")
by a Restricted Person, such Restricted Person shall pay over to Xxxxxxxxxx:
(i) in the event his Aggregate Proceeds (as hereinafter
defined) after giving effect to such Transfer are greater than
$10,000,000, ten percent (10%) of his net proceeds from such Transfer,
provided that no payments shall be made pursuant to this Section 3(a)(i)
in respect of Aggregate Proceeds in excess of $15,000,000; and
(ii) in the event his Aggregate Proceeds after giving effect
to such Transfer are greater than $15,000,000, fifteen percent (15%) of
his net proceeds from such Transfer (but only in respect of net proceeds
from such Transfer for which payments were not made pursuant to Section
3(a)(i)), provided that no payments shall be made pursuant to this Section
3(a)(ii) in respect of Aggregate Proceeds in excess of $50,000,000.
(b) In the event of any conflict or inconsistency between the
provisions of this Section 3 and the provisions of Section 2(a), the provisions
of this Section 3 shall govern.
(c) As used herein, "Aggregate Proceeds" shall mean the aggregate of
the gross proceeds to the Restricted Person from all his Transfers of Zenascent
Common Stock.
2
4. TERMINATION
(a) This Agreement shall terminate in accordance with the terms of
Section 4(b) hereof; provided that the provisions of Sections 3, 7(f) and 7(g)
shall survive the termination of this Agreement. The obligations of Xxxxxxx and
XxXxxxxxx pursuant to Section 2 shall terminate immediately upon the termination
of this Agreement.
(b) This Agreement shall terminate immediately upon the receipt by
Xxxxxxxxxx and its Affiliates, including but not limited to Xxxxxx Charitable
Remainder Trust, a Florida trust ("Xxxxxx"), of an aggregate of (i) $4,300,000
in Covered Payments (as hereinafter defined), if received not later than March
25, 2005 or (ii) $5,300,000 in Covered Payments, if received not later than
March 25, 2012. As used herein, "Covered Payments" shall mean all payments
pursuant to (1) this Agreement, (2) the Consulting Agreement, (3) the 10%
Promissory Note, made as of March 15, 2002, by Boxing to Xxxxxx, (4) section
1.4(b) of the Agreement and Plan of Merger, dated as of March 8, 2002, by and
among Boxing, CKP, Big Content Acquisition Corp., a Delaware corporation, Big
Content, Xxxxxx and Xxxxxxxxxx, and (5) proceeds from the sale of Zenascent
Common Stock acquired pursuant to the warrant to purchase Zenascent Common Stock
issued to Xxxxxxxxxx and/or its Affiliates pursuant to section 1.3(a)(iii) of
the Amended and Restated Agreement and Plan of Merger, dated as of February 21,
2002, by and among the Zenascent, Zenascent Newco Inc., a Delaware corporation,
Boxing, CKP, Xxxxxx Xxxxxxx and Xxxxx XxXxxxxxx.
5. REPRESENTATIONS AND WARRANTIES OF THE PARTIES
(a) Xxxxxxxxxx hereby represents and warrants to Xxxxxxx and
XxXxxxxxx that:
(i) it is a limited liability company duly organized,
validly existing and in good standing under the laws of the State of
Delaware;
(ii) this Agreement has been duly executed and delivered by it
and constitutes its legal, valid and binding obligation, enforceable
against it in accordance with its terms, except as such enforceability may
be affected by bankruptcy, insolvency, moratorium or similar laws
affecting the rights of creditors generally and by the application of
general principles of equity (whether in a proceeding in equity or at
law);
(iii) its execution, delivery and performance of this
Agreement will not conflict with or constitute a breach or default under
or violate any agreement to which it is a party or by which any of its
properties is bound, or any law, rule, regulation, order, writ, judgment,
injunction, decree, determination or award applicable it or its
properties; and
(iv) no consent, authorization, license, approval or other
action by, and no notice to or filing or registration with, any court or
governmental authority or regulatory body of any jurisdiction or any other
third party is required for its valid execution, delivery or performance
of this Agreement.
3
(b) Each of Xxxxxxx and XxXxxxxxx hereby represents and warrants
to Xxxxxxxxxx that:
(i) this Agreement has been duly executed and delivered by him
and constitutes his legal, valid and binding obligation, enforceable
against him in accordance with its terms, except as such enforceability
may be affected by bankruptcy, insolvency, moratorium or similar laws
affecting the rights of creditors generally and by the application of
general principles of equity (whether in a proceeding in equity or at
law);
(iii) his execution, delivery and performance of this
Agreement will not conflict with or constitute a breach or default under
or violate any agreement to which he is a party or by which any of his
properties is bound, or any law, rule, regulation, order, writ, judgment,
injunction, decree, determination or award applicable him or his
properties; and
(iv) no consent, authorization, license, approval or other
action by, and no notice to or filing or registration with, any court or
governmental authority or regulatory body of any jurisdiction or any other
third party is required for his valid execution, delivery or performance
of this Agreement.
6. NOTICES
All notices requests, demands, waivers and other communications
required or permitted to be given under this Agreement shall be in writing and
shall be deemed to have been duly given on the date if delivered personally, or
upon the next business day after it shall have been deposited with a nationally
recognized overnight courier (such as Federal Express), or sent by telecopier,
as follows (or at such other address or telecopier number for a party as shall
be duly specified by like notice):
(a) If to Xxxxxxx or XxXxxxxxx, to him at:
c/o Xxxxxx Xxxxxxx Boxing, Inc.
0 Xxxxxxx Xxxxxxx
Xxxxxxxxxxx, Xxx Xxxx 00000
Telecopier: (000) 000-0000,
with a copy to:
Xxxxxxxxx Xxxxxxx, LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx X. Xxxxxxx, Esq.
Telecopier: (000) 000-0000
4
(b) If to Xxxxxxxxxx, to it at
000 Xxxxxxx Xxxxx
Xxxx Xxxxx, Xxxxxxx 00000
Attn: Xxxxxxx X. English
Telecopier: (000) 000-0000
with a copy to:
Law Offices of Xxxxxxxx X. Xxxxxxxx
000 Xxxxxxx Xxxxx
Xxxx Xxxxx, Xxxxxxx 00000
Attn: Xxxx X. Xxxxx, Esq.
Telecopier: (000) 000-0000
7. MISCELLANEOUS
(a) This Agreement contains the entire agreement between the parties
hereto and supersedes all prior agreements and understandings, oral or written,
between the parties hereto with respect to the subject matter hereof.
(b) This Agreement shall inure to the benefit of, and shall be
binding upon, the parties hereto and their respective successors, permitted
assigns, heirs and legal representatives, including any corporation or other
business organization with which Xxxxxxxxxx may merge or consolidate.
(c) This Agreement shall not be assigned or otherwise transferred by
a party (other than by Xxxxxxxxxx to an Affiliate) without the prior written
consent of the other parties hereto.
(d) This Agreement may not be changed, modified or extended except
upon written amendment executed by the Xxxxxxx, XxXxxxxxx and Xxxxxxxxxx. The
waiver by a party of a breach of any of the provisions of this Agreement shall
not operate or be construed as a waiver of any subsequent breach hereof.
(e) If any provision of this Agreement is held invalid or
unenforceable by any court or other tribunal of competent jurisdiction, the
other provisions of this Agreement will remain in full force and effect. Any
provision of this Agreement held invalid or unenforceable only in part or degree
will remain in full force and effect to the extent not held invalid or
unenforceable.
(f) All questions or disputes pertaining to the validity,
construction, execution and performance of this Agreement shall be governed by
and construed in accordance with the laws of the State of New York without
regard to the conflicts of laws provisions thereof.
(g) Each of the parties hereby agrees to (i) submit to the personal
jurisdiction of the United States District Court for the Southern District of
New York (and all appropriate appellate courts), or, if jurisdiction in such
court is lacking, any court of the State of New York of competent jurisdiction
5
sitting in New York County (and all appropriate appellate courts), in connection
with any action or dispute hereunder, and (ii) irrevocably waive any objection
it may now or hereafter have as to the venue of any proceeding brought in any
such court or that any such court is an inconvenient forum. In the case any
action or dispute shall be brought hereunder, the losing party or parties
thereto shall pay all attorney fees, court costs and fees and costs of the
prevailing party or parties thereto incident to such action or dispute or the
appeal thereof.
(h) This Agreement may be executed in counterparts, each of which
shall be deemed to be an original, but all of which together shall constitute
one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the day and year first written above.
/s/ Xxxxxx Xxxxxxx
------------------------------------
XXXXXX XXXXXXX
/s/ Xxxxx XxXxxxxxx
------------------------------------
XXXXX XXXXXXXXX
XXXXXXXXXX INVESTMENTS, LLC
By: /s/ Xxxxxxx X. English
--------------------------------
Xxxxxxx X. English
Managing Member
