AGREEMENT, dated as of the 1st day of April, 1996, by and among X.
XXXXX SILVER ("Silver"), XXXXXX X. XXXXXXX ("Xxxxxxx"), XXXXX X. XXXXXXX
("Xxxxxxx"), XXXXX XXXXX ("Xxxxx"), XXXXX X. XXXXXXXX ("Xxxxxxxx"), XXXXX
XXXXXXX ("Xxxxxxx"), XXXXXX XXXXXXXXXX ("Xxxxxxxxxx"), INTEREQUITY CAPITAL
PARTNERS, LLP ("InterEquity") and MORSE, ZELNICK, ROSE & LANDER, LLP ("MZRL").
W I T N E S S E T H
WHEREAS, each of the parties hereto is a shareholder of KatManDu
Entertainment Corp. ("KEC"), a Delaware corporation, owning the number of shares
of KEC common stock, par value $.001 per share (the "Common Stock") set forth
opposite his, her or its name on Schedule A annexed hereto and made a part
hereof; and
WHEREAS, Bergman, Waugh, Gromacki, Thomsen, Rabinovici, InterEquity and
MZRL (collectively referred to herein as the "Other Shareholders") have each
agreed to grant to Silver and Xxxxxxx, jointly, the right to vote the shares of
Common Stock which they own.
NOW, THEREFORE, in consideration of the premises set forth above and
the mutual agreements, representations and warranties set forth herein and other
good and valuable consideration, the sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
1. Voting of KEC Common Stock.
---------------------------
(a) For as long as they own shares of KEC Common Stock, the
Other Shareholders agree that:
(i) At any special or annual meeting of shareholders of KEC at
which Directors are to be elected or in connection with a solicitation of
consents through which Directors are to be elected, they each shall vote (or
give a written consent with respect to) all of their shares of KEC Common Stock
as directed by Silver and Xxxxxxx.
(ii) At any special or annual meeting of shareholders of KEC
at which it is proposed to remove Directors from office, or in connection with a
solicitation of consents through which Directors are to be removed from office,
they each shall vote (or give a written consent with respect to) all of their
shares of KEC Common Stock as directed by Silver and Xxxxxxx.
(iii) At any special or annual meeting of the shareholders of
KEC or in connection with the solicitation of consents on any matter other than
the election or removal of
Directors, they each shall vote (or give a written consent with respect
to) all of their shares of KEC Common Stock in accordance with the instructions
of Silver and Xxxxxxx.
(b) In the event Silver and Xxxxxxx shall not have given any
instructions with respect to matters referred to in Section 1(a) hereof, then,
and in such event, the Other Shareholders shall be free to vote their shares of
KEC Common Stock in any manner that they so choose.
2 Proxy. In order to insure their obligations under Section 1 hereof,
-----
the Other Shareholders shall simultaneously herewith deliver to Silver and
Xxxxxxx his, her or its, as the case may be, irrevocable proxy with respect to
all of the shares of KEC Common Stock owned by such Other Shareholder from time
to time in the form annexed hereto as Exhibit A (the "Proxy"); it being agreed
that the Proxy shall be revoked immediately upon the termination of this
Agreement.
3. Restrictive Legend.
-------------------
3.1 Legend on Stock Certificates. Each certificate evidencing shares o
----------------------------
KEC Common Stock held by the Other Shareholders shall contain the following
legend:
THE RIGHT OF THE HOLDER OF THIS CERTIFICATE
TO VOTE THE SHARES REPRESENTED HEREBY MAY BE
RESTRICTED IN CERTAIN RESPECTS AS PROVIDED IN THE
TERMS OF A SHAREHOLDERS AGREEMENT DATED AS OF APRIL
1, 1996, A COPY OF WHICH IS ON FILE AT THE OFFICES OF
THE COMPANY AT 000 XXXXX XXXXXXXX XXXXXXXXX,
XXXXXXXXXXXX, XXXXXXXXXXXX 00000.
3.2 Removal of Legend. The foregoing legend, or pertinent portions
------------------
thereof, shall be removed by KEC, through delivery of a replacement certificate
not bearing such legend, if the provisions of this Agreement which are the
subject of such legend shall have terminated in accordance with their terms.
4. Termination.
------------
4.1 Change in Control. This Agreement shall terminate and be of no
------------------
further force and effect after a "Change in Control" shall have occurred. A
Change of Control will be deemed to have occurred if following: (a) a tender or
exchange offer for voting securities of KEC, (b) a proxy contest for the
election of Directors of KEC, or (c) a merger or consolidation or sale of all or
substantially all of the business or assets of KEC, the persons constituting the
Board of Directors of KEC immediately prior to the initiation of such event
cease to constitute a majority of the Board of Directors of KEC upon the
occurrence of such event or within one year after such event.
4.2 Bankruptcy. This Agreement shall terminate and be of no further
-----------
force and effect at such time as: (a) KEC, pursuant to Title 11 of the U.S. Code
or any similar federal or state law
2
for the relief of debtors ("Bankruptcy Law") (i) commences a voluntary case or
proceeding, (ii) consents to the entry of an order for relief against it in an
involuntary case or proceeding, (iii) consents to the appointment of a receiver,
trustee or similar official of it or for all or substantially all of its
property, or (iv) makes a general assignment for the benefit of its creditors;
or (b) a court of competent jurisdiction enters an order or decree under any
Bankruptcy Law that: (i) is for relief against KEC in an involuntary case or
proceeding, (ii) appoints a receiver, trustee or similar official for KEC or for
all or substantially all of its property, or (iii) orders the liquidation of KEC
and the order or decree remains unstayed and in effect for 90 days.
4.3 Events Relating to Silver and Xxxxxxx.
--------------------------------------
(a) If at any time the shares of KEC Common Stock owned,
directly and indirectly, by Silver and Xxxxxxx and any trusts of which they are
trustees and any other entities in which they own, directly or indirectly, in
excess of 50% of the equity interests, in the aggregate shall represent less
than 35% of the then outstanding shares of KEC Common Stock then, and in such
event, this Agreement shall terminate and be of no further force and effect.
(b) Upon the death and/or "disability" (as defined in the
Employment Agreements executed by Silver and KEC, and Xxxxxxx and KEC,
respectively) of both Silver and Xxxxxxx this Agreement shall terminate and be
of no further force and effect.
4.4 Sale By Other Shareholder. If an Other Shareholder shall sell or
-------------------------
otherwise transfer his, her or its shares of Common Stock to a person other than
(i) an Other Shareholder (ii) the spouse, ancestor or lineal descendant of an
Other Shareholder (including the transferor Other Shareholder) and (iii) in the
case of an Other Shareholder who is not a natural person, any partner or
shareholder of such Other Shareholder, this Agreement shall terminate
and be of no further force or effect with respect to the shares of Common Stock
so transferred.
4.5 Other Events of Termination.
---------------------------
(a) If the Board of Directors of KEC shall have approved or
recommended acceptance of (i) a tender or exchange offer for voting securities
of KEC or (ii) a merger or consolidation of KEC (each being hereinafter referred
to as an "Approved Transaction"), then and in such event, the Other Shareholders
may tender, exchange, sell or otherwise dispose of any and all of their shares
of KEC Common Stock in the manner provided for in such Approved Transaction.
(b) If immediately after the consummation of an Approved
Transaction, the persons constituting the Board of Directors immediately prior
thereto cease to constitute a majority of the Board of Directors of such
successor corporation as shall have been contemplated by such Approved
Transaction, then, and in such event, this Agreement shall terminate and be of
no further force and effect.
3
5. Miscellaneous.
--------------
5.1 Notice. Any notice, request, instruction or other document to be
-------
given hereunder by any party to any of the other parties shall be in writing and
shall be deemed to have been duly given when delivered personally or five (5)
days after dispatch by registered or certified mail, postage prepaid, return
receipt requested, to the party to whom the same is so given or made at the
address of such party as set forth on Schedule A annexed hereto and made a part
hereof or to such other address as the one party shall specify to the other
parties in writing.
5.2 Successors and Assigns.
----------------------
(a) The provisions of this Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
permitted assigns, except that no party may assign or otherwise transfer any of
its rights under this Agreement without the prior written consent of the other
parties hereto.
(b) All of the terms, covenants and agreements contained in
this Agreement are solely for the benefit of the parties hereto, and their
respective successors and assigns, and no other parties (including, without
limitation, any other stockholder or creditor of KEC, or any director, officer
or employee of KEC) are intended to be benefited by, or entitled to enforce,
this Agreement.
5.3 Entire Agreement; Amendment.
---------------------------
(a) This Agreement and the other instruments and agreements
referred to herein embody the entire agreement of the parties hereto with
respect to the subject matter hereof and supersede all prior agreements with
respect thereto.
(b) No failure or delay by any party hereto in exercising any
right, power or privilege hereunder shall operate as a waiver thereof nor shall
any single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights and
remedies herein provided shall be cumulative and not exclusive of any rights or
remedies provided by law.
(c) Since a breach of certain provisions of this Agreement
could not adequately be compensated by money damages, any party shall be
entitled, in addition to any other right or remedy available to such party, to
an injunction restraining such breach or a threatened breach and to specific
performance of any such provisions of this Agreement, and in either case no bond
or other security shall be required in connection therewith.
5.4 Choice of Law. This Agreement shall be construed in accordance with
-------------
and governed by the laws of the State of Delaware applicable to agreements made
and to be performed entirely within such state.
4
5.5 No Partnership. No partnership, joint venture or joint undertaking
--------------
is intended to be, or is, formed between any of the parties hereto by reason of
this Agreement or the transactions contemplated herein.
5.6 Counterparts and Headings. This Agreement may be executed in two or
-------------------------
more counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same instrument. All headings (including,
without limitation, Article headings and Section titles) are inserted for
convenience of reference only and shall not affect its meaning or
interpretation.
5.7 Severability. If and to the extent that any court of competent
------------
jurisdiction holds any provision (or any part thereof) of this Agreement to be
invalid or unenforceable, such holding shall in no way affect the validity of
the remainder of this Agreement
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
____________________________________
X. XXXXX SILVER
____________________________________
XXXXXX X. XXXXXXX
____________________________________
XXXXX X. XXXXXXX
____________________________________
XXXXX XXXXX
____________________________________
XXXXX X. XXXXXXXX
____________________________________
XXXXX XXXXXXX
____________________________________
XXXXXX X. XXXXXXXXXX
INTEREQUITY CAPITAL PARTNERS, LLP
By: __________________________________
MORSE, ZELNICK, ROSE & LANDER, LLP
By: __________________________________
5
EXHIBIT A
IRREVOCABLE PROXY
KNOW ALL MEN BY THESE PRESENTS that I, ______________________ do hereby
constitute and appoint X. Xxxxx Silver and Xxxxxx X. Xxxxxxx, jointly or the
survivor of them (the "Appointee"), as my agent to attend any annual or special
meetings of the shareholders of KatManDu Entertainment Corp., a Delaware
corporation (the "Company"), and any continuation or adjournment thereof, and
said Appointee shall have full power to vote all shares of common stock, par
value $.001 per share, of the Company ("Common Stock") which are held by me,
from time to time, including, without limitation, shares of Common Stock,
acquired by me after the date hereof (the "Shares") for me and to act for me and
in my name, place and xxxxx, in the same manner, to the extent, and with all
powers I would possess if personally executing such document or present at such
meeting, giving to said Appointee full power of substitution and revocation. The
Appointee shall by this appointment have all voting and consensual rights and
powers pertaining to the Shares as if he were the record and beneficial owner of
such Shares.
This proxy is given in consideration of the execution by the Company of
an Agreement, dated as of April 1, 1996, by and among the Company and the
Appointee and certain Other Shareholders (as defined therein) which by its terms
is an agreement made pursuant to the provisions of Section 212 of the Delaware
General Corporation Law.
THIS PROXY IS IRREVOCABLE and shall survive until termination of the
agreement, dated as of April 1, 1996, among the undersigned, the appointees and
other shareholders, pursuant to which this Irrevocable Proxy has been granted
as set forth therein.
Dated: ______________________
_______________________________
In Presence of:
_____________________________
Witness
6
SCHEDULE A
Name and Address Number of Shares
---------------- ----------------
X. Xxxxx Silver 659,315
0 Xxxxxxx Xxxxx
Xxxxxxx, Xxx Xxxxxx 00000
Xxxxxx X. Xxxxxxx 659,315
000 Xxxxx Xxxx Xxxx
Xxxxxxxxxxx, Xxx Xxxxxx 00000
Xxxxx X. Xxxxxxx 34,620
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Xxxxx Xxxxx 34,620
000 Xxxx Xxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Xxxxx X. Xxxxxxxx 13,845
00 Xxxx Xxxxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
Xxxxx Xxxxxxx 3,285
0000 Xxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Xxxxx Xxxxxxxxxx 60,000
00 Xxxxxxx Xxxxx
Xxxxxxxxx, Xxx Xxxx 00000
InterEquity Capital Partners, LLP 20,000
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Morse, Zelnick, Rose & Lander, LLP 40,000
000 Xxxx Xxxxxx - Xxxxx 000
Xxx Xxxx, Xxx Xxxx 00000
7
