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EXHIBIT 10.35
STOCKHOLDERS VOTING AGREEMENT
THIS STOCKHOLDERS VOTING AGREEMENT (the "Agreement"), dated as of October
20, 1997, is made by and among XXXXX XXXXX and his respective AFFILIATES
including MOUNTAINGATE PRODUCTIONS, LLC (collectively referred to herein as
"Xxxxx"), XXXXXX XXXXXXXXX and his respective AFFILIATES ("Xxxxxxxxx") (Xxxxx
and Xxxxxxxxx together are sometimes herein referred to as the "M&B Group"),
XXXXXXXX X. XXXXXXXX and his respective AFFILIATES ("Xxxxxxxx") AND XXXXXXXXX
XXXXXX and his respective AFFILIATES ("Xxxxxx") (Xxxxxx and Xxxxxxxx together
are sometimes herein referred to as the "G&J Group" and all of the parties
hereto are referred to herein collectively as the "Stockholders");
W I T N E S S E T H :
WHEREAS, Xxxxx and Xxxxxxxxx are currently members of the Board of
Directors (the "Board") of The Producers Entertainment Group Ltd. (the
"Company");
WHEREAS, Xxxxx and Xxxxxxxxx either own shares of Common Stock, $.001 par
value, of the Company ("Shares") or own options or other rights to acquire
Shares of the Company;
WHEREAS, Xxxxxx and Xxxxxxxx and the Company are each parties to
Agreements and Plans of Merger, dated as of September 15, 1997 among the
Company, Xxxxxx, Xxxxxxxx and the constituent corporations named therein (the
"Merger Agreements") which set forth the terms of merger among the parties (the
"Merger Transactions");
WHEREAS, the consideration to be paid to Xxxxxx and Xxxxxxxx pursuant to
the Merger Agreements consists of the issuance by the Company of a minimum of
5,714,285 Shares and a maximum of 6,666,666 Shares (the "Merger Shares");
WHEREAS, pursuant to the Merger Transactions, Xxxxxx and Xxxxxxxx will
become executive employees of the Company and/or of certain of its subsidiaries
(the Company and all such subsidiaries being hereinafter referred to
collectively as the "Company") and will have the right to designate members of
the Board of Directors of the Company (the "Board"), which designees may include
Xxxxxx and/or Xxxxxxxx;
WHEREAS, Xxxxxx and Xxxxxxxx and the Company are each parties to a
Confidentiality and Standstill Agreement, dated as of October 20, 1997 (the
"Confidentiality Agreement"), which, among other matters, sets forth conditions
and restrictions relating to the designation of members of the Board after the
executive employment of Xxxxxx and/or Xxxxxxxx by the Company is terminated; and
WHEREAS, the Stockholders desire to enter into this Agreement for the
purposes of assuring continuity in the composition of the management members of
the Board and in
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establishing Board practices in the best interests of the Company and the
holders of the Company's capital stock.
NOW, THEREFORE, in consideration of the mutual covenants contained herein
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties to this Agreement hereby agree as follows:
1. Board of Directors
(a) Subject to the provisions of the Confidentiality Agreement,
from and after the Effective Time (as defined in the Merger Agreements) and
until the provisions of this paragraph 1 cease to be effective, the Stockholders
shall vote all of their Shares which are voting shares and any other voting
securities of the Company over which such Stockholder has voting control and
shall take all other reasonably necessary or desirable actions within his
control (whether in his capacity as a stockholder, director, member of a board
committee or officer of the Company or otherwise, and including, without
limitation, attendance at meetings in person or by proxy for purposes of
obtaining a quorum and execution of written consents in lieu of meetings), so
that:
(i) subject to the provisions of paragraph (b), below, the
following individuals shall be elected to the Board:
(A) the three representatives who may be designated by
the M&B Group (the "M&B Directors");
(B) the three representatives who may be designated by
the G&J Group (the "G&J Directors"); and
(C) the one representative jointly designated by the
M&B Group and the G&J Group (the "Independent Director").
(ii) the removal from the Board (with or without cause) of
any representative designated hereunder by the M&B Group (pursuant to
subparagraph (i)(A) above), the G&J Group (pursuant to subparagraph (i)(B)
above) or by the Stockholders jointly (pursuant to subparagraph (i)(C)
above) shall be at the written request of the M&B Group, the G&J Group or
the M&B Group and the G&J Group jointly, as the case may be, but only upon
such written request and under no other circumstances; and
(iii) subject to paragraph (b) below, in the event that any
representative designated hereunder by the M&B Group (pursuant to
subparagraph (i)(A)), the G&J Group (pursuant to subparagraph (i)(B)) or
the Stockholders jointly (pursuant to subparagraph (i)(C) ceases, by
resignation or otherwise, to serve as a member of the Board during his
term of office, the resulting vacancy on the Board shall be filled by a
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representative designated by the M&B Group, the G&J Group or the M&B Group
and the G&J Group jointly, as the case may be, as provided herein.
(b) If any vacancy in a directorship shall exist (other than a
vacancy in a directorship to be filled by an Independent Director (which shall
be filled only pursuant to subparagraph (i)(C)) and if a representative is not
designated by either the M&B Group or the G&J Group, as the case may be, to fill
such directorship pursuant to the terms of this Section 1 within 30 days after
such vacancy shall exist, the election of an individual to such directorship
shall be accomplished in accordance with the Bylaws and applicable law. In the
event that either the M&B Group or the G&J Group has the right to fill a
directorship under this Section 1 but fails to do so and such directorship is
filled in accordance with the Bylaws and applicable law, if either such Group
has the right thereafter to fill a vacancy hereunder, such Group shall have the
right to remove the person who has filled such directorship and replace him or
her with a person chosen by such Group.
2. Termination of Obligations upon Disposition The duties and
obligations to be performed hereunder by any Stockholder shall terminate with
respect to any Shares sold or otherwise disposed of by such Stockholder upon the
sale or other disposition of such Shares unless such sale or other disposition
is made to one or more Affiliates (as hereinafter defined) of such Stockholder,
in which case any such Affiliate shall be obligated hereunder with the same
force and effect as if any such Affiliate were a signatory to this Agreement.
3. Irrevocable Proxy. In order to secure the obligation of each
Stockholder hereto to vote his Shares and other voting securities of the Company
in accordance with the provisions of Section 1 hereof, (i) the M&B Group hereby
appoints the G&J Group as their true and lawful proxies and attorneys-in-fact,
with full power of substitution, to vote all of their Shares and other voting
securities of the Company for the election and/or removal of directors and all
such other matters as expressly provided for in Section 1 and (ii) the G&J Group
hereby appoints the M&B Group as their true and lawful proxies and
attorneys-in-fact, with full power of substitution, to vote all of their Shares
and other voting securities of the Company for the election and/or removal of
directors and all such other matters as expressly provided for in Section 1. The
M&B Group and/or the G&J Group may exercise the irrevocable proxy granted to it
hereunder, in the form annexed hereto as Exhibit "A", at any time any
Stockholder fails to comply with the provisions of this Agreement. The proxies
and powers granted by each Stockholder pursuant to this Section 3 are given to
secure the performance of each Stockholder's obligations under this Agreement.
Such proxies and powers shall be irrevocable for the term of this Agreement, and
shall survive the death, incompetency, disability, bankruptcy or dissolution of
such Stockholder or his or its affiliates.
4. Representations and Warranties. Each Stockholder represents and
warrants that (i) such Stockholder and/or his Affiliates (for purposes of this
Agreement, Affiliate shall have the meaning set forth in Rule 144(a)(1) of the
Securities Act of 1933, as amended) is/are the record owner of the number of
Shares (or options to purchase Shares) set forth opposite his name on the
Schedule of Stockholders attached hereto, (ii) this Agreement has been duly
authorized, executed
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and delivered by such Stockholder and constitutes the valid and binding
obligation of such Stockholder, enforceable in accordance with its terms, and
(iii) such Stockholder has not granted and is not a party to any proxy, voting
trust or other agreement which is inconsistent with, conflicts with or violates
any provision of this Agreement. During the term hereof, no Stockholder shall
grant any proxy or become party to any voting trust or other agreement which is
inconsistent with, conflicts with or violates any provision of this Agreement.
5. Termination of Restrictions and Covenants. The restrictions set
forth in this Agreement shall continue with respect to each Stockholder until
the earlier of (i) five years from the Effective Date of the Merger Agreements,
(ii) such date as Xxxxxx and/or Xxxxxxxx cease to hold any Shares of Common
Stock of the Company and (iii) such date as Xxxxx and/or Xxxxxxxxx cease to hold
any Shares or options or other rights to purchase Shares of Common Stock of the
Company.
6. Legend. Each certificate evidencing Shares of the Stockholders shall
be stamped or otherwise imprinted with a legend in substantially the following
form:
"The securities represented by this certificate are subject to a
Stockholders Voting Agreement dated as of October 20, 1997, among
certain of the Company's stockholders, as amended and modified from
time to time. A copy of such Stockholders Agreement shall be
furnished without charge by the Company to the holder hereof upon
written request."
7. Amendment and Waiver. Except as otherwise provided herein, no
modification, amendment or waiver of any provision of this Agreement shall be
effective against the Stockholders unless such modification, amendment or waiver
is approved in writing by all of the Stockholders. The failure of any party to
enforce any of the provisions of this Agreement shall in no way be construed as
a waiver of such provisions and shall not affect the right of such party
thereafter to enforce each and every provision of this Agreement in accordance
with its terms.
8. Severability. Whenever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability shall not affect
the validity, legality or enforceability of any other provision of this
Agreement in such jurisdiction or affect the validity, legality or
enforceability of any provision in any other jurisdiction, but this Agreement
shall be reformed, construed and enforced in such jurisdiction as if such
invalid, illegal or unenforceable provision had never been contained herein.
9. Entire Agreement. Subject to the provisions of the Confidentiality
Agreement, this Agreement embodies the complete agreement and understanding
among the parties hereto with respect to the subject matter hereof and
supersedes and preempts any prior understandings,
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agreements or representations by or among the parties, written or oral, which
may have related to the subject matter hereof in any way.
10. Successors and Assigns. Except as otherwise provided herein, this
Agreement shall bind and inure to the benefit of and be enforceable by the
Stockholders and any of their respective successors and assigns, so long as they
hold Shares of the Stockholders.
11. Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be an original and all of which taken together
shall constitute one and the same agreement.
12. Remedies. The Stockholders shall be entitled to enforce their
respective rights under this Agreement specifically, to recover damages by
reason of any breach of any provision of this Agreement and to exercise all
other rights existing in their favor. The parties hereto agree and acknowledge
that money damages would not be an adequate remedy for any breach of the
provisions of this Agreement and that the Stockholders may in their sole
discretion apply to any court of law or equity of competent jurisdiction for
specific performance and/or injunctive relief (without posting a bond or other
security and without the necessity of proving actual damage) in order to enforce
or prevent any violation of the provisions of this Agreement. Should any court
determine that any of the separate covenants of this Agreement shall be
unenforceable then such covenant shall be deemed eliminated for the purpose of
those proceedings to the extent necessary to permit the remaining separate
covenants to be enforced. If any other provision of this Agreement shall be
deemed by an appropriate court to be unenforceable for any reason, then such
court shall be empowered to substitute, to the extent enforceable, provisions
similar thereto or other provisions so as to provide the non-breaching
Stockholders, to the fullest extent permitted by applicable law, the benefits
intended by this Agreement. The Stockholders jointly and severally acknowledge
that the covenants contained in this Section 12 are intended by the parties to
this Agreement to be in addition to and not in lieu of or in limitation of any
other agreement or covenant between the the Stockholders.
13. Notices. Any notice provided for in this agreement shall be in
writing and shall be either personally delivered, or mailed first class mail
(postage prepaid) or sent by reputable overnight courier service (charges
prepaid) to such address as indicated by the Stockholders, or at such address or
to the attention of such other person as the recipient party has specified by
prior written notice to the sending party. Notices shall be deemed to have been
given hereunder when delivered personally, seven days after deposit in the U.S.
mail and one day after deposit with a reputable overnight courier service.
14. Governing Law. The general corporate law of the State of Delaware,
as hereafter amended, and all decisions of the Delaware Courts thereunder or
with respect thereto shall govern all issues and questions concerning the
relationships among the Company, its Board of Directors, and its stockholders
provided for in this Agreement. All other issues and questions concerning the
construction, validity, interpretation and enforceability of this Agreement and
the exhibits and schedules hereto shall also be governed by, and construed in
accordance with, the
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laws of the State of Delaware, without giving effect to any choice of law or
conflict of law rules or provisions (whether of the State of Delaware or any
other jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of Delaware. In furtherance of the foregoing,
the internal law of the State of Delaware shall control the interpretation and
construction of this Agreement (and all schedules and exhibits hereto), even
though under that jurisdiction's choice of law or conflict of law analysis, the
substantive law of some other jurisdiction would ordinarily apply.
15. Business Days. If any time period for giving notice or taking action
hereunder expires on a day which is a Saturday, Sunday or legal holiday in the
state in which the Company's chief-executive office is located, the time period
shall automatically be extended to the business day immediately following such
Saturday, Sunday or legal holiday.
16. Descriptive Headings. The descriptive headings of this Agreement are
inserted for convenience only and do not constitute a part of this Agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
day and year first above written.
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XXXXXXXX X. XXXXXXXX
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MOUNTAINGATE PRODUCTIONS, LLC
By:____________________________
Its:
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EXHIBIT A
THE PRODUCERS ENTERTAINMENT GROUP LTD.
IRREVOCABLE PROXY
The undersigned hereby confers upon, and hereby grants to and in favor of,
Xxxxxxxxx Xxxxxx and Xxxxxxxx X. Xxxxxxxx, and each of them with full power of
substitution, an irrevocable proxy pursuant to the provisions of Section 212 of
the Delaware General Corporation Law to vote, or to execute and deliver written
consents or otherwise act with respect to, all shares of every class of capital
stock (the "Stock") of THE PRODUCERS ENTERTAINMENT GROUP LTD. (the
"Corporation") now owned or hereafter acquired by the undersigned as fully, to
the same extent and with the same effect as the undersigned might or could do
under any applicable laws or regulations governing the rights and powers of
stockholders of a Delaware corporation in connection with any and all matters
submitted for approval, authorization, ratification or consent by the
stockholders of the Corporation, including without limitation the voting of all
such shares of Stock that are the subject of this Irrevocable Proxy in
accordance with the Stockholders Voting Agreement dated as of the date hereof
(the "Stockholders Agreement") by and among the undersigned and certain other
stockholders of the Corporation. The undersigned hereby affirms that this
Irrevocable Proxy is given as a condition of Xxxxxxxxx Xxxxxx and Xxxxxxxx X.
Xxxxxxxx, entering into the Stockholders Agreement and as such is coupled with
an interest and is irrevocable. It is further understood by the undersigned that
this Irrevocable Proxy may be exercised for the period beginning the date hereof
and ending on October 20, 2002.
THIS PROXY SHALL REMAIN IN FULL FORCE AND EFFECT AND BE ENFORCEABLE
AGAINST ANY DONEE, TRANSFEREE OR ASSIGNEE OF THE STOCK.
Dated as of October 20, 1997.
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EXHIBIT A
THE PRODUCERS ENTERTAINMENT GROUP LTD.
IRREVOCABLE PROXY
The undersigned hereby confers upon, and hereby grants to and in favor of,
Xxxxx Xxxxx and Xxxxxx Xxxxxxxxx, and each of them with full power of
substitution, an irrevocable proxy pursuant to the provisions of Section 212 of
the Delaware General Corporation Law to vote, or to execute and deliver written
consents or otherwise act with respect to, all shares of every class of capital
stock (the "Stock") of THE PRODUCERS ENTERTAINMENT GROUP LTD. (the
"Corporation") now owned or hereafter acquired by the undersigned as fully, to
the same extent and with the same effect as the undersigned might or could do
under any applicable laws or regulations governing the rights and powers of
stockholders of a Delaware corporation in connection with any and all matters
submitted for approval, authorization, ratification or consent by the
stockholders of the Corporation, including without limitation the voting of all
such shares of Stock that are the subject of this Irrevocable Proxy in
accordance with the Stockholders Voting Agreement dated as of the date hereof
(the "Stockholders Agreement") by and among the undersigned and certain other
stockholders of the Corporation. The undersigned hereby affirms that this
Irrevocable Proxy is given as a condition of Xxxxx Xxxxx and Xxxxxx Xxxxxxxxx,
entering into the Stockholders Agreement and as such is coupled with an interest
and is irrevocable. It is further understood by the undersigned that this
Irrevocable Proxy may be exercised for the period beginning the date hereof and
ending on October 20, 2002.
THIS PROXY SHALL REMAIN IN FULL FORCE AND EFFECT AND BE ENFORCEABLE
AGAINST ANY DONEE, TRANSFEREE OR ASSIGNEE OF THE STOCK.
Dated as of October 20, 1997.
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