EXHIBIT 10.16
AMENDMENT NO. 2. TO
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AMENDED AND RESTATED SHAREHOLDERS' AGREEMENT
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THIS AMENDMENT NO. 2 TO AMENDED AND RESTATED SHAREHOLDERS' AGREEMENT (this
"AMENDMENT"), entered into as of the 12th day of November, 1996, by and among
XXXX XXXXX, an individual ("YURI"), XXXXXXX XXXXX, an individual ("MICHAIL"),
XXXXX XXXXX, an individual ("XXXXX") (Yuri, Michail and Xxxxx are sometimes
referred to collectively herein as the "ITKIS SHAREHOLDERS" and each
individually as an "ITKIS SHAREHOLDER") (the Itkis Shareholders are sometimes
referred to collectively herein as the "ORIGINAL SHAREHOLDERS" and each
individually as an "ORIGINAL SHAREHOLDER"), HYATT VENTURES, INC. a Delaware
corporation ("HYATT") and INTERACTIVE FLIGHT TECHNOLOGIES, INC., a Delaware
corporation (hereinafter the "COMPANY").
WHEREAS, the Original Shareholders are parties to that certain Amended and
Restated Shareholders' Agreement, dated as of October 6, 1994, as amended by
that certain Amendment No. 1 to Shareholders' Agreement dated as of October 14,
1994, and that certain Termination of Amended and Restated Shareholders'
Agreement as to Xxxxxx X. Xxxxxxx dated as of May 10, 1996 (as amended, the
"SHAREHOLDERS' AGREEMENT"); and
WHEREAS, the Original Shareholders and Hyatt desire that, from and after
the Closing Date (as hereinbelow defined), Hyatt become a "Shareholder" for
purposes of the Shareholders' Agreement; and
WHEREAS, pursuant to the Severance Agreements, dated as of November 2,
1996, between the Company and Xxxxxx X. Xxxxxxxx ("XXXXXX") and Xxxxx X.
Xxxxxxxx ("XXXXX"), respectively, Xxxxxx and Xxxxx have agreed that the
Shareholders' Agreement shall be terminated in all respects as to them, and the
Original Shareholders and Hyatt desire that, from and after the date hereof,
Xxxxxx and Xxxxx xxxxx to be "Shareholders" for purposes of the Shareholders'
Agreement; and
WHEREAS, the Original Shareholders' and Hyatt desire to amend the
Shareholders' Agreement further as hereinafter set forth, effective as of the
Closing Date;
NOW, THEREFORE, in consideration of the mutual promises and undertakings
set forth below and other good and valuable consideration, the receipt of which
is hereby acknowledged, the parties hereto agree as follows:
1. The term "Shareholder" as used in the Shareholders' Agreement shall
include Hyatt; provided, however, that Hyatt shall not be bound by Article IX
thereof in light of its anticipated obligations under the Strategic Alliance
Agreement described in Section 9 below.
2. The Shareholders' Agreement is hereby terminated and of no further
force or effect as to Xxxxx and Xxxxxx, and all references to Xxxxx and Xxxxxx
in the Shareholders' Agreement are hereby deleted. Accordingly, Xxxxxx and
Xxxxx shall cease to have any further rights or obligations under the
Shareholders' Agreement, including without limitation
any right to nominate directors of the Company. As to all parties to the
Shareholders' Agreement other than Xxxxxx and Xxxxx, the Shareholders' Agreement
shall continue in full force and effect in accordance with its terms except as
otherwise amended hereby.
3. Articles I and II of the Shareholders' Agreement are hereby deleted in
their entirety and shall have no further force or effect.
4. Sections 3.01(b) and (c) of the Shareholders' Agreement are hereby
amended in their entirety to read as follows:
"(b) Nomination of Directors at Annual Meeting. The following
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procedures shall govern the nomination of Directors of the Company: (1)
Xxxxxxx Xxxxx shall be entitled to nominate one Director and Xxxx Xxxxx
shall be entitled to nominate one Director (collectively, the "ITKIS
DIRECTORS"); and (2) Hyatt shall be entitled to nominate two Directors (the
"HYATT DIRECTORS"). The remaining Directors shall each be nominated by
vote of the Itkis Directors and the Hyatt Directors (subject to the
existing right of X.X. Xxxxx Investment Banking Corp. to nominate one of
such remaining directors, if it so elects).
"(c) No nominee for Director will be presented to the
shareholders of the Company at any meeting of shareholders of the Company
called for the purpose of voting on the election of directors or by
consensual action of shareholders with respect to the election of directors
unless such nominee shall have completed a questionnaire substantially
similar to that completed by the other Directors and such nominee is
reasonably acceptable to the Company."
5. Section 3.01(e) of the Shareholders' Agreement is hereby amended in
its entirety to read as follows:
"(e) Removal of Directors. Except as otherwise provided in this
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Section, each Shareholder agrees not to take any action to remove, without
cause, any Director of the Company. Notwithstanding the foregoing, each of
the Shareholders shall at all times have the right to recommend the
removal, with or without cause, of the Director or Directors which such
Shareholder has nominated pursuant to the terms of Section 3.01(b)"
6. Sections 3.02, 3.03 and 3.04 of the Shareholders' Agreement are hereby
deleted in their entirety and shall have no further force or effect. Matters
previously governed thereby shall be governed by the Company's Bylaws and the
laws of the State of Delaware, as applicable.
7. Articles IV, V, VI, VII and VIII of the Shareholders' Agreement are
hereby deleted in their entirety and shall have no further force or effect.
Concurrently with the execution of this Amendment, the Company and Fortunet,
Inc., are entering into an Amended and Restated Intellectual Property License
and Support Services Agreement. In
addition, upon request by any Original Shareholder, the Company agrees to cause
its transfer agent, without cost or expense to such Original Shareholder, to
remove, from any stock certificates evidencing ownership of Shares by such
Original Shareholder, the legend previously required by prior Section 8.05 of
the Shareholders' Agreement.
8. The lead-in clause to the first sentence of Section 10.02 (prior to
the first proviso) shall be amended to read as follows:
"This Agreement shall be effective and binding upon the parties hereto
and their respective successors and permitted assigns as of the date of
this Agreement, shall continue in force for a period of two (2) years
thereafter, unless sooner terminated by written agreement of a majority of
the Shareholders or otherwise by force of law;"
9. The provisions of Sections 1 and Sections 3 through 8 above shall be
effective only from and after the date (the "CLOSING DATE") of execution and
delivery by the Company and Hyatt of a Strategic Alliance Agreement
substantially in the form of the draft Strategic Alliance Agreement provided by
to the Company by counsel to Hyatt on October 17, 1996 (with such revisions
thereto as may subsequently be agreed upon by the Company and Hyatt). The
provisions of Section 2 above shall be effective as of the date hereof,
regardless of whether the Closing Date occurs.
10. Sections 10.04 through 10.11 of the Shareholders' Agreement are hereby
incorporated herein by reference.
IN WITNESS WHEREOF, the parties hereto have duly executed this Amendment as
of the date first above written.
_______________________ ______________
Xxxx Xxxxx Spouse
_______________________ ______________
Xxxxxxx Xxxxx Spouse
_______________________ ______________
Xxxxx Xxxxx Spouse
"Hyatt"
HYATT VENTURES, INC.
By:_______________________________
Its:______________________________
"Company"
INTERACTIVE FLIGHT TECHNOLOGIES, INC.
By:_______________________________
Its:______________________________
