EXHIBIT 10.46
EXECUTION COPY
FORM OF
SOURCE INTERLINK VOTING AGREEMENT
THIS VOTING AGREEMENT (this "AGREEMENT") is made and entered into as of
November 18, 2004, by and among Source Interlink Companies, Inc., a Missouri
corporation ("SOURCE"), Alliance Entertainment Corp., a Delaware corporation
(the "COMPANY"), and the undersigned stockholder ("STOCKHOLDER") of Source.
RECITALS
A. Concurrently with the execution of this Agreement, Source, Alligator
Acquisition, LLC, a Delaware limited liability company whose sole member is
Source ("MERGER SUB"), and the Company have entered into an Agreement and Plan
of Merger (the "MERGER AGREEMENT"), which provides for the merger (the "MERGER")
of the Company with and into Merger Sub.
B. Pursuant to the Merger, among other things, all of the issued and
outstanding shares of capital stock of the Company will be converted into the
right to receive the consideration set forth in the Merger Agreement, all upon
the terms and subject to the conditions set forth in the Merger Agreement.
C. Stockholder is the record and beneficial owner (as defined in Rule
13d-3 under the Securities Exchange Act of 1934, as amended) of the number of
shares of outstanding capital stock of Source and other securities convertible
into, or exercisable or exchangeable for, shares of capital stock of Source, all
as set forth on the signature page of this Agreement (collectively, the
"SHARES").
D. In consideration of the execution of the Merger Agreement by Source
and as a condition to the willingness of the Company to enter into the Merger
Agreement, Stockholder agrees to enter into this Agreement to restrict the
transfer or disposition of any of the Shares, or any other shares of capital
stock of Source acquired by Stockholder hereafter and prior to the Expiration
Date (as defined in Section 1(a) hereof), and desires to vote the Shares and any
other such shares of capital stock of Source so as to facilitate the
consummation of the Merger.
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. Agreement to Retain Shares.
(a)Transfer. Stockholder agrees that, at all times during the
period beginning on the date hereof and ending on the Expiration Date (as
defined below), Stockholder shall not Transfer (as defined below) any of the
Shares or any New Shares (as defined in Section 1(b) hereof), or make any
agreement relating thereto, in each case without the prior written consent of
Company.
As used herein, the term "EXPIRATION DATE" shall mean the earlier to
occur of (i) such date and time as the Merger shall become effective in
accordance with the terms and provisions of the Merger Agreement, or (ii) the
termination of the Merger Agreement in accordance with the terms
thereof. As used herein, the term "TRANSFER" shall mean, with respect to any
security, the direct or indirect assignment, sale, transfer, tender, pledge,
hypothecation, or the gift, placement in trust, or the Constructive Sale (as
defined below) or other disposition of such security (excluding transfers by
testamentary or intestate succession or otherwise by operation of law) or any
right, title or interest therein (including, but not limited to, any right or
power to vote to which the holder thereof may be entitled, whether such right or
power is granted by proxy or otherwise), or the record or beneficial ownership
thereof, excluding (i) any Transfer to a family member or charitable
organization if the transferee agrees in writing to be bound by the terms of
this Agreement to the same extent as Stockholder and (ii) any Transfer pursuant
to a court order. As used herein, the term "CONSTRUCTIVE SALE" shall mean, with
respect to any security, a short sale with respect to such security, entering
into or acquiring an offsetting derivative contract with respect to such
security, entering into or acquiring a futures or forward contract to deliver
such security or entering into any other hedging or other derivative transaction
that has the effect of materially changing the economic benefits and risks of
ownership.
(b)New Shares. Stockholder agrees that any shares of capital stock
of Source that Stockholder purchases or with respect to which Stockholder
otherwise acquires record or beneficial ownership after the date of this
Agreement and prior to the Expiration Date, including, without limitation,
shares issued or issuable upon the conversion, exercise or exchange, as the
case may be, of all securities held by Stockholder which are convertible into,
or exercisable or exchangeable for, shares of capital stock of Source ("NEW
SHARES"), shall be subject to the terms and conditions of this Agreement to the
same extent as if they constituted Shares as of the date hereof.
2. Agreement to Vote Shares.
(a) Until the Expiration Date, at every meeting of stockholders of
Source called with respect to any of the following, and at every adjournment or
postponement thereof, and every action or approval by written consent of
stockholders of Source with respect to any of the following, Stockholder shall
vote, to the extent not voted by the Company pursuant to the irrevocable proxy
in Section 3 hereof, the outstanding Shares and any outstanding New Shares (to
the extent any such New Shares may be voted):
(i) in favor of approval of the adoption of the issuance of
shares of Source Common Stock (as defined in the Merger Agreement) in connection
with the Merger (the "SHARE ISSUANCE") and in favor of each of the other actions
contemplated by the Merger Agreement and any action required in furtherance
thereof;
(ii) in favor of an amendment to Source's Articles of
Incorporation which shall, among other things, increase the authorized shares of
Source Common Stock from 40,000,000 to 100,000,000;
(iii) against approval of any proposal made in opposition to,
or in competition with, the consummation of the Merger, Share Issuance and the
transactions contemplated by the Merger Agreement, including, without
limitation, any Acquisition Proposal or Superior Proposal (as such terms are
defined in the Merger Agreement); and
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(iv) against any action that is intended, or could reasonably
be expected to, impede, interfere with, delay, postpone, discourage or adversely
affect the Merger, Share Issuance or any of the other transactions contemplated
by the Merger Agreement.
Prior to the Expiration Date, Stockholder shall not enter into any
agreement or understanding with any person to vote or give instructions in any
manner inconsistent with this Section 2(a).
(b) Following the Merger, at the 2005 annual meeting of
stockholders of Source at which any directors are to be elected (the "2005
ANNUAL MEETING"), and at every adjournment or postponement thereof, and every
action or approval by written consent of stockholders of Source with respect to
such meeting, Stockholder shall vote, to the extent not voted by the Company
pursuant to the irrevocable proxy in Section 3 hereof, the outstanding Shares
and any outstanding New Shares (to the extent any such New Shares may be voted)
in favor of the Stockholder Designated Directors (as defined in the Merger
Agreement) that are up for re-election at the 2005 Annual Meeting. Prior to the
2005 Annual Meeting, Stockholder shall not enter into any agreement or
understanding with any person to vote or give instructions in any manner
inconsistent with this Section 2(b).
3. Irrevocable Proxy. Stockholder hereby revokes any and all previous
proxies granted with respect to the Shares. By entering into this Agreement,
Stockholder hereby grants a proxy appointing the Company as Stockholder's
attorney-in-fact and proxy, with full power of substitution, for and in the
Stockholder's name, to vote, express consent or dissent, or otherwise to utilize
that voting power in the manner contemplated by Section 2 above with respect to
the Shares and any New Shares. The proxy granted by the Stockholder pursuant to
this Section 3 is irrevocable (except as provided in the following sentence) and
is granted in consideration of the Company entering into this Agreement and the
Merger Agreement and incurring certain related fees and expenses. The proxy
granted by Stockholder with respect to Section 2(a) above shall not be revoked
prior to the Expiration Date. The proxy granted by Stockholder with respect to
Section 2(b) above shall not be revoked prior to the 2005 Annual Meeting.
4. Representations, Warranties and Covenants of Stockholder.
Stockholder represents, warrants and covenants to Company as follows:
(i) Stockholder is the record and beneficial owner of the Shares,
with full power to vote or direct the voting of the Shares for and on behalf of
any and all beneficial owners of the Shares.
(ii) As of the date hereof, the Shares are, and at all times up
until the Expiration Date and the 2005 Annual Meeting the Shares, as the case
may be, will be, free and clear of any rights of first refusal, co-sale rights,
security interests, liens, pledges, claims, options, charges or other
encumbrances of any kind or nature, in each case that would impair Stockholder's
ability to fulfill its obligations under Section 2.
(iii) Stockholder does not beneficially own any shares of capital
stock of Source, or any securities convertible into, or exchangeable or
exercisable for, shares of capital stock of Source, other than the Shares.
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(iv) Stockholder has full power and authority to make, enter into
and carry out the terms of this Agreement and any other related agreements to
which Stockholder is a party.
(v) The execution and delivery of this Agreement and the
performance of this Agreement by Stockholder will not require any consent of
another person.
5. Additional Documents. Stockholder and Source hereby covenant and
agree to execute and deliver any additional documents reasonably necessary or
desirable to carry out the purpose and intent of this Agreement.
6. Termination. This Agreement shall terminate and shall have no
further force or effect: (i) with respect to the obligations set forth in
Section 2(a), as of the Expiration Date, and (ii) with respect to the
obligations set forth in Section 2(b), following the 2005 Annual Meeting.
7. Stop Transfer. Source agrees to make a notation on its records and
give instructions to its transfer agent(s) to not permit, at any time during the
term of this Agreement, the transfer of any Shares or New Shares, except as
permitted pursuant to Section 1(a).
8. Miscellaneous.
(a) Directors and Officers. Notwithstanding any provision of this
Agreement to the contrary, nothing in this Agreement shall limit or restrict
Stockholder from acting, if applicable, in the Stockholder's capacity as a
director or officer of Source (it being understood that this Agreement shall
apply to Stockholder solely in Stockholder's capacity as a stockholder of
Source) or voting in Stockholder's sole discretion on any matter other than
those matters referred to in Section 2.
(b) Severability. Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement in any other jurisdiction. If any provision of this Agreement is so
broad as to be unenforceable, the provision shall be interpreted to be only as
broad as is enforceable.
(c) Assignment. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the parties
hereto (whether by operation of law or otherwise) without the prior written
consent of the other parties. Subject to the preceding sentence, this Agreement
shall be binding upon, inure to the benefit of and be enforceable by the parties
and their respective successors and assigns. Additionally, notwithstanding the
foregoing or anything to the contrary contained in this Agreement, Source is
specifically permitted to consummate the Reincorporation (as defined in the
Merger Agreement) and assign this Agreement to its successor in such
Reincorporation.
(d) Amendment. This Agreement may not be amended except by an
instrument in writing signed on behalf of each of the parties hereto. Such
amendment may take place at any time, subject to applicable law; provided,
however, that (i) with respect to any amendment to the obligations set forth in
Section 2(a), such amendment may take place prior to the Expiration Date, and
(ii) with respect to any amendment to the obligations set forth in Section 2(b),
such amendment may take place prior to the 2005 Annual Meeting, in each case
subject to applicable law.
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(e) Waiver. At any time, the parties hereto may (a) extend the time
for the performance of any of the obligations or other acts of the other parties
hereto, (b) waive any inaccuracies in the representations and warranties
contained herein or in any document delivered pursuant thereto and (c) waive
compliance with any of the agreements or conditions contained herein; provided,
however, that (i) with respect to any such extension or waiver of the
obligations set forth in Section 2(a), such extension or waiver may take place
prior to the Expiration Date, and (ii) with respect to any such extension or
waiver of the obligations set forth in Section 2(b), such extension or waiver
may take place prior to the 2005 Annual Meeting. Any agreement on the part of a
party hereto to any such extension or waiver shall be valid only if set forth in
an instrument in writing signed on behalf of such party.
(f) Specific Performance; Injunctive Relief. The parties acknowledge
that the Company will be irreparably harmed and that there will be no adequate
remedy at law for a violation of any of the covenants or agreements of
Stockholder set forth herein. Therefore, it is agreed that, in addition to any
other remedies that may be available to the Company upon any such violation, the
Company shall have the right to enforce such covenants and agreements by
specific performance, injunctive relief or by any other means available to the
Company at law or in equity.
(g) Notices. All notices and other communications hereunder shall be
in writing and shall be deemed given if delivered personally, mailed by
registered or certified mail (return receipt requested) or sent via facsimile to
the parties at the following addresses (or at such other address for a party as
shall be specified by like notice):
(i) if to Source to:
Source Interlink Companies, Inc.
00000 Xxxxxxxxx Xxxxxx Xxxx.,
Xxxxx 000
Xxxxxx Xxxxxxx, Xxxxxxx 00000
Attention: S. Xxxxxx Xxxxxx, Chairman and Chief
Executive Officer
Facsimile: (000) 000-0000
with copies to:
Xxxxxxx X. Xxxxx, Esq.
General Counsel
Source Interlink Companies, Inc.
00000 Xxxxxxxxx Xxxxxx Xxxx.,
Xxxxx 000
Xxxxxx Xxxxxxx, Xxxxxxx 00000
Facsimile: (000) 000-0000
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and:
Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx
Professional Corporation
000 Xxxx Xxxx Xxxx
Xxxx Xxxx, Xxxxxxxxxx 00000-0000
Attention: Xxxxxx X. Xxxxxxx
Xxxxx X. Xxxxxxxx
Facsimile: (000) 000-0000
(ii) if to the Company to:
Alliance Entertainment Corp.
0000 Xxxxx Xxxxx Xx.
Xxxxx Xxxxxxx, Xxxxxxx 00000
Attention: Xxxx Xxxxxxx, President and Chief Operating
Officer
Facsimile: (000) 000-0000
with copies to:
Alliance Entertainment Corp.
0000 Xxxxx Xxxxx Xxxxx
Xxxxx Xxxxxxx, Xxxxxxx 00000
Attention: Alliance Legal Department
Facsimile: (000) 000-0000
and:
Xxxxxx, Xxxxxx & Xxxxx LLP
000 Xxxxx Xxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx
Xxxxxx Xxxxxxx-Xxxxx
Facsimile: (000) 000-0000
(iii) If to Stockholder: To the address for notice set
forth on the signature page hereof.
(h)GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED IN ALL
RESPECTS, INCLUDING VALIDITY, INTERPRETATION AND EFFECT, BY THE LAWS OF THE
STATE OF NEW YORK APPLICABLE TO CONTRACTS EXECUTED AND TO BE PERFORMED WHOLLY
WITHIN SUCH STATE.
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(i)Entire Agreement. This Agreement contains the entire
understanding of the parties in respect of the subject matter hereof and
supersede all other prior agreements and understandings, both written and oral,
among the parties, or any of them, with respect to such subject matter.
(j)Fees and Expenses. Except as may be provided in the Merger
Agreement, all costs and expenses (including, without limitation, all fees and
disbursements of counsel) incurred in connection with this Agreement and the
transactions contemplated hereby shall be paid by the party incurring such
costs and expenses.
(k)Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
shall constitute one and the same agreement.
(l)Effect of Headings. The section headings herein are for
convenience only and shall not affect the construction or interpretation of
this Agreement.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the undersigned have executed this Agreement on the date
first above written.
ALLIANCE ENTERTAINMENT CORP. STOCKHOLDER:
By: /s/ Xxxx Xxxxxxx
---------------------------------------- _________________________________
Name: Xxxx Xxxxxxx Signature
Title: President and Chief Operating Officer
_________________________________
Print name
SOURCE INTERLINK COMPANIES, INC. _________________________________
By: /s/ S. Xxxxxx Xxxxxx _________________________________
---------------------------------------- Address
Name: S. Xxxxxx Xxxxxx
Title: Chairman and Chief Executive Officer Shares:
Source Common Stock:_____________
Source Options:__________________
