EXHIBIT 10.47
EXECUTION COPY
COMPANY 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 the
Company.
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 term s 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 the Company and other securities
convertible into, or exercisable or exchangeable for, shares of capital stock of
the Company, 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 Source 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 the Company 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 the Company 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
Source.
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 the Company 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 the Company
("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.
(c)Preferred Stock. Stockholder hereby elects, effective
immediately prior to the Effective Time (as such term is defined in the Merger
Agreement), to convert all shares of preferred stock of the Company, including
shares of Series A1, Series A2 and Series B Preferred Stock (the "COMPANY
PREFERRED STOCK") set forth on the signature page hereto), into Company Common
Stock at the respective conversion prices determined in accordance with the
Company's Certificate of Incorporation, as amended, then in effect; provided,
however that if such conversion shall not have taken place by the Expiration
Date, this Section 1(c) shall have no force or effect.
2. Agreement to Vote Shares. Until the Expiration Date, at every meeting
of stockholders of the Company called with respect to any of the following, and
at every adjournment or postponement thereof, and on every action or approval
by written consent of stockholders of the Company with respect to any of the
following, Stockholder shall vote, to the extent not voted by Source pursuant
to the irrevocable proxy in Section 3 hereof, the outstanding Shares, any
outstanding New Shares (to the extent such New Shares may be voted) and any
shares of Company Preferred Stock (to the extent a vote of preferred holders is
required):
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(i) in favor of the adoption of the Merger Agreement 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 the Distribution (as defined in the Merger
Agreement);
(iii) against approval of any proposal made in opposition to,
or in competition with, consummation of the Merger and the transactions
contemplated by the Merger Agreement (including the Distribution), including,
without limitation, any Acquisition Proposal or Superior Proposal (as such terms
are defined in the Merger Agreement); and
(iv) against any action that is intended, or could reasonably
be expected to, impede, interfere with, delay, postpone, discourage or adversely
affect the Merger or any of the other transactions contemplated by the Merger
Agreement (including the Distribution).
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. Stockholder hereby grants to Source
the right, if the Company fails to provide a notice of a stockholder meeting
within five (5) business days of the date that the Registration Statement (as
defined in the Merger Agreement) is declared effective, to take any and all
action to either act by written consent or call a special meeting of the
stockholders of the Company, on Stockholder's behalf, to take the actions
called for in subsections (i) and (ii).
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 Source 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 Source entering into this
Agreement and the Merger Agreement and incurring certain related fees and
expenses. The proxy granted by Stockholder shall not be revoked prior to the
Expiration Date.
4. Representations, Warranties and Covenants of Stockholder. Stockholder
represents, warrants and covenants to Source 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 the Shares 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.
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(iii) Stockholder does not beneficially own any shares of
capital stock of the Company, or any securities convertible into, or
exchangeable or exercisable for, shares of capital stock of the Company, other
than the Shares.
(iv) Stockholder has full limited liability company 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 the Company 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 as of the Expiration Date.
7. Stop Transfer. The Company agrees to make a notation on its records
and give instructions to its transfer agent(s) to not permit, 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 the Company (it being understood that this Agreement
shall apply to Stockholder solely in Stockholder's capacity as a stockholder of
the Company) 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
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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 prior to the Expiration Date, subject to
applicable law.
(e)Waiver. At any time prior to the Expiration Date, 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. 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 Source 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 Source upon any such violation, Source
shall have the right to enforce such covenants and agreements by specific
performance, injunctive relief or by any other means available to Source 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:
Source Interlink Companies, Inc.
00000 Xxxxxxxxx Xxxxxx Xxxx.,
Xxxxx 000
Xxxxxx Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxx X. Xxxxx, Esq., General Counsel
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:
Munger, Tolles, & 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]
IN WITNESS WHEREOF, the undersigned have executed this Agreement on the
date first above written.
STOCKHOLDER:
AEC Associates, LLC
By: Yucaipa One-Step Partners L.P., its
Managing Member
SOURCE INTERLINK COMPANIES, INC. By: Yucaipa AEC Associates, LLC, its
General Partner
By: /s/ S. Xxxxxx Xxxxxx By: /s/ Xxxxxx X. Xxxxxxxxxx
-------------------------------- ----------------------------------------
Name: S. Xxxxxx Xxxxxx Signature
Title: Chairman and Chief Executive
Officer
Xxxxxx X. Xxxxxxxxxx
----------------------------------------
Print Name
Title: Vice President and Secretary
ALLIANCE ENTERTAINMENT CORP. 0000 Xxxx Xxxxxx Xxxx
Xxx Xxxxxxx, XX 00000
---------------------
By: /s/ Xxxx Xxxxxxx Address
--------------------------------
Name: Xxxx Xxxxxxx
Title: President and Chief Operating
Officer
Shares:
Company Common Stock: 45,811,560
Company Series A1 Preferred Stock: 18,000
Company Series A2 Preferred Stock: 21,747
Company Series B Preferred Stock: 4,467,256
Company Options: 0
