VOTING AGREEMENT
THIS VOTING AGREEMENT (the "Agreement") is made and entered into as of this
______ day of _________________, 2001, by and among ON STAGE ENTERTAINMENT,
INC., a Nevada corporation (the "Company"), those certain holders of the
Company's Common Stock listed on Exhibit A hereto (the "Key Holders") and the
persons and entities listed on Exhibit B hereto (the "Investors").
WITNESSETH
WHEREAS, the Key Holders are the beneficial owners of an aggregate of Six
Million One Hundred Eighty One Thousand One Hundred Fifty-Five (6,181,155)
shares of the common stock of the Company (the "Common Stock");
WHEREAS, the Investors are purchasing shares of the Company's Series A
Preferred Stock (the "Preferred Stock"), pursuant to that certain Stock and
Warrant Purchase Agreement (the "Purchase Agreement") of even date herewith (the
"Financing");
WHEREAS, the Investors are holders of certain warrants to purchase Common
Stock (the "Warrants") exercisable upon receipt of a Drawdown Notice (as defined
in the Warrants) from the Company;
WHEREAS, the obligations in the Purchase Agreement are conditioned upon the
execution and delivery of this Agreement; and
WHEREAS, in connection with the consummation of the Financing, the Company,
the Key Holders and the Investors have agreed to provide for the future voting
of their shares of the Company's capital stock as set forth below.
NOW, THEREFORE, in consideration of these premises and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
AGREEMENT
1. VOTING.
1.1 Key Holder Shares; Investor Shares.
(a) The Key Holders each agree to hold all shares of voting capital stock
of the Company registered in their respective names or beneficially owned by
them as of the date hereof and any and all other securities of the Company
legally or beneficially acquired by each of the Key Holders after the date
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hereof (hereinafter collectively referred to as the "Key Holder Shares") subject
to, and to vote the Key Holder Shares in accordance with, the provisions of this
Agreement.
(b) The Investors each agree to hold all shares of voting capital stock of
the Company (including but not limited to all shares of Common Stock issued upon
conversion of the Preferred Stock) registered in their respective names or
beneficially owned by them as of the date hereof and any and all other
securities of the Company legally or beneficially acquired by each of the
Investors after the date hereof (hereinafter collectively referred to as the
"Investor Shares") subject to, and to vote the Investor Shares in accordance
with, the provisions of this Agreement.
1.2 Election of Directors. On all matters relating to the election of
directors of the Company, the Investors and Key Holders agree to vote all
Investor Shares and Key Holder Shares respectively held by them (or the holders
thereof shall consent pursuant to an action by written consent of the holders of
capital stock of the Company) so as to elect members of the Company's Board of
Directors as follows. At each election of directors, so long as the holders of
the Preferred Stock, voting as a separate class, are entitled to elect four (4)
directors of the Company, the Investors and Key Holders shall vote all of their
respective Investor Shares and Key Holder Shares accordingly to cause the
persons designated by XxXxxx De Leeuw and Company IV, LP and its affiliates to
be elected as such directors.
1.3 No Liability for Election of Recommended Director. None of the parties
hereto and no officer, director, stockholder, partner, employee or agent of any
party makes any representation or warranty as to the fitness or competence of
the nominee of any party hereunder to serve on the Board of Directors by virtue
of such party's execution of this Agreement or by the act of such party in
voting for such nominee pursuant to this Agreement.
1.4 Approval of Default Financing. If there is a Default (as defined in the
Warrants) under the terms of the Warrants, the Investors agree to vote all of
their shares for and raise no objection to the Default Financing (as defined in
the Warrants).
1.5 Legend.
(a) Concurrently with the execution of this Agreement, there shall be
imprinted or otherwise placed, on certificates representing the Key Holder
Shares and the Investor Shares the following restrictive legend (the "Legend"):
"THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE
TERMS AND CONDITIONS OF A VOTING AGREEMENT WHICH PLACES
CERTAIN RESTRICTIONS ON THE VOTING OF THE SHARES REPRESENTED
HEREBY. ANY PERSON ACCEPTING ANY INTEREST IN SUCH SHARES SHALL
BE DEEMED TO AGREE TO AND SHALL BECOME BOUND BY ALL THE
PROVISIONS OF SUCH AGREEMENT. A COPY OF SUCH VOTING AGREEMENT
WILL BE FURNISHED TO THE RECORD HOLDER OF THIS CERTIFICATE
WITHOUT CHARGE UPON WRITTEN REQUEST TO THE COMPANY AT ITS
PRINCIPAL PLACE OF BUSINESS."
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(b) The Company agrees that, during the term of this Agreement, it will not
remove, and will not permit to be removed (upon registration of transfer,
reissuance of otherwise), the Legend from any such certificate and will place or
cause to be placed the Legend on any new certificate issued to represent Key
Holder Shares or Investor Shares theretofore represented by a certificate
carrying the Legend.
1.6 Successors. The provisions of this Agreement shall be binding upon the
successors in interest to any of the Key Holder Shares or Investor Shares. The
Company shall not permit the transfer of any of the Key Holder Shares or
Investor Shares on its books or issue a new certificate representing any of the
Key Holder Shares or Investor Shares unless and until the person to whom such
security is to be transferred shall have executed a written agreement,
substantially in the form of this Agreement, pursuant to which such person
becomes a party to this Agreement and agrees to be bound by all the provisions
hereof as if such person were a Key Holder or Investor, as applicable.
1.7 Other Rights. Except as provided by this Agreement or any other
agreement entered into in connection with the Financing, each Key Holder and
Investor shall exercise the full rights of a holder of capital stock of the
Company with respect to the Key Holder Shares and the Investor Shares,
respectively.
1.8 Change of Control. In the event that holders of at least a majority of
the then outstanding Preferred Stock (the "Requisite Investors"), approve a sale
of the Company or all or substantially all of the Company's assets (an "Approved
Sale") whether by means of a merger, or consolidation, or sale of stock or
assets, or otherwise (each, a "Sale of the Company"), the Key Holders and all
Investors shall consent to, vote for and raise no objections to the Approved
Sale, and (i) if the Approved Sale is structured as a merger or consolidation of
the Company, or a sale of all or substantially all of the Company's assets, the
Key Holders and each Investor shall waive any dissenters rights, appraisal
rights or similar rights in connection with such merger, consolidation or asset
sale, or (ii) if the Approved Sale is structured as a sale of the stock of the
Company, the Key Holders and the Investors shall agree to sell their Key Holder
Shares and Investor Shares on the terms and conditions approved by the Requisite
Investors, provided such terms do not provide that the Key Holders would receive
less than the amount that would be distributed to such Key Holders in the event
the proceeds of the sale of the Company were distributed in accordance with the
Company's Amended Articles of Incorporation. The Key Holder and the Investors
shall take all necessary and desirable actions approved by the Requisite
Investors, in connection with the consummation of the Approved Sale, including
the execution of such agreements and such instruments and other actions
reasonably necessary to (i) provide the representations, warranties,
indemnities, covenants, conditions, non-compete agreements, escrow agreements
and other provisions and agreements relating to such Approved Sale and (ii)
effectuate the allocation and distribution of the aggregate consideration upon
the Approved Sale. Obligations of any Key Holder under this Section 1.8 shall be
subject to delivery of a favorable fairness opinion rendered by a Qualified
Investment Bank. A financial institution shall be deemed to be a Qualified
Investment Bank if, during the preceding twelve month period, it is ranked among
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the top 15 underwriters in total proceeds raised on a lead or co-managed basis,
according to Securities Data Corporation.
2. TERMINATION.
2.1 This Agreement shall continue in full force and effect from the date
hereof through the earliest of the following dates, on which date it shall
terminate in its entirety:
(a) ten (10) years from the date of this Agreement;
(b) the date of the closing of a sale, lease, or other disposition of all
or substantially all of the Company's assets or the Company's merger into or
consolidation with any other corporation or other entity, or any other corporate
reorganization, in which the holders of the Company's outstanding voting stock
immediately prior to such transaction own, immediately after such transaction,
securities representing less than fifty percent (50%) of the voting power of the
corporation or other entity surviving such transaction, provided that this
Section 2.1(d) shall not apply to a merger effected exclusively for the purpose
of changing the domicile of the Company; or
(c) the date as of which the parties hereto terminate this Agreement by
written consent of a majority in interest of the holders of the Preferred Stock
and a majority in interest of the Key Holders.
3. MISCELLANEOUS.
3.1 Ownership. Each Key Holder represents and warrants to the Investors and
the Company that (a) such Key Holder now owns the Key Holder Shares, free and
clear of liens or encumbrances, and has not, prior to or on the date of this
Agreement, executed or delivered any proxy or entered into any other voting
agreement or similar arrangement other than one which has expired or terminated
prior to the date hereof, and (b) such Key Holder has full power and capacity to
execute, deliver and perform this Agreement, which has been duly executed and
delivered by, and evidences the valid and binding obligation of, such Key Holder
enforceable in accordance with its terms.
3.2 Further Action. If and whenever the Key Holder Shares are sold, the Key
Holders or the personal representative of the Key Holders shall do all things
and execute and deliver all documents and make all transfers, and cause any
transferee of the Key Holder Shares to do all things and execute and deliver all
documents, as may be necessary to consummate such sale consistent with this
Agreement.
3.3 Specific Performance. The parties hereto hereby declare that it is
impossible to measure in money the damages which will accrue to a party hereto
or to their heirs, personal representatives, or assigns by reason of a failure
to perform any of the obligations under this Agreement and agree that the terms
of this Agreement shall be specifically enforceable. If any party hereto or his
heirs, personal representatives, or assigns institutes any action or proceeding
to specifically enforce the provisions hereof, any person against whom such
action or proceeding is brought hereby waives the claim or defense therein that
such party or such personal representative has an adequate remedy at law, and
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such person shall not offer in any such action or proceeding the claim or
defense that such remedy at law exists.
3.4 Governing Law. This Agreement, and the rights of the parties hereto,
shall be governed by and construed in accordance with the laws of the State of
California as such laws apply to agreements among California residents made and
to be performed entirely within the State of California.
3.5 Amendment or Waiver. This Agreement may be amended (or provisions of
this Agreement waived) only by an instrument in writing signed by (i) the
Company, (ii) a majority in interest of the holders of the Preferred Stock and
(iii) a majority in interest of the Key Holders.
3.6 Severability. In the event one or more of the provisions of this
Agreement should, for any reason, be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provisions of this Agreement, and this Agreement
shall be construed as if such invalid, illegal or unenforceable provision had
never been contained herein.
3.7 Additional Shares. In the event that subsequent to the date of this
Agreement any shares or other securities are issued on, or in exchange for, any
of the Key Holder Shares or Investor Shares by reason of any stock dividend,
stock split, combination of shares, reclassification or the like, such shares or
securities shall be deemed to be Key Holder Shares or Investor Shares, as the
case may be, for purposes of this Agreement.
3.8 Addition of Investors. Notwithstanding anything to the contrary
contained herein, if the Company shall issue additional shares of its Preferred
Stock pursuant to the Purchase Agreement, any purchaser of such shares of
Preferred Stock may become a party to this Agreement by executing and delivering
an additional counterpart signature page to this Agreement and shall be deemed
an "Investor" hereunder.
3.9 Counterparts. This Agreement may be executed in one or more
counterparts, each of which will be deemed an original but all of which together
shall constitute one and the same agreement.
3.10 Waiver. No waivers of any breach of this Agreement extended by any
party hereto to any other party shall be construed as a waiver of any rights or
remedies of any other party hereto or with respect to any subsequent breach.
3.11 Attorney's Fees. In the event that any suit or action is instituted to
enforce any provision in this Agreement, the prevailing party in such dispute
shall be entitled to recover from the losing party all fees, costs and expenses
of enforcing any right of such prevailing party under or with respect to this
Agreement, including without limitation, such reasonable fees and expenses of
attorneys and accountants, which shall include, without limitation, all fees,
costs and expenses of appeals.
3.12 Notices. Any notices required in connection with this Agreement shall
be in writing and shall be deemed effectively given: (i) upon personal delivery
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to the party to be notified, (ii) when sent by confirmed electronic mail or
facsimile if sent during normal business hours of the recipient; if not, then on
the next business day, (iii) five (5) days after having been sent by registered
or certified mail, return receipt requested, postage prepaid, or (iv) one (1)
day after deposit with a nationally recognized overnight courier, specifying
next day delivery, with written notification of receipt. All notices shall be
addressed to the holder appearing on the books of the Company or at such address
as such party may designate by ten (10) days advance written notice to the other
parties hereto.
3.13 Entire Agreement. This Agreement and the Exhibits hereto, along with
the Purchase Agreement and each of the Exhibits thereto, constitute the full and
entire understanding and agreement between the parties with regard to the
subjects hereof and thereof and no party shall be liable or bound to any other
in any manner by any representations, warranties, covenants and agreements
except as specifically set forth herein and therein.
[THIS SPACE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have executed this VOTING
AGREEMENT as of the date first above written.
COMPANY: KEY HOLDERS:
ON STAGE ENTERTAINMENT, INC.
By:________________________ ___________________________
Name: XXX PARROT
Title:
___________________________
XXXX XXXXXX
INVESTORS:
XXXXXX DE LEEUW AND COMPANY IV, LP
By:______________________________
Name:
Title:
XXXXXX DE LEEUW AND COMPANY IV
ASSOCIATES, LP
By:______________________________
Name:
Title:
DELTA FUND, LP
By:______________________________
Name:
Title:
BOARD OF TRUSTEES OF THE XXXXXX
XXXXXXXX JUNIOR UNIVERISTY
By:______________________________
Name:
Title:
INVESTORS:
XXXXX X. XXXXXXXXXXX XXXXXX X. XXXXXXX FAMILY TRUST
By:_____________________________ By:____________________________
Name:___________________________ Name:__________________________
Title: _________________________ Title:_________________________
XXXXXXX X. XXXXXXXX REVOCABLE TRUST XXXXXXX X. XXXXXX
By:_____________________________ By:____________________________
Name:___________________________ Name:__________________________
Title: _________________________ Title:_________________________
XXXXXXX X. PARROT GIDWITZ REVOCABLE TRUST DATED 9/12/96
By:_____________________________ By:____________________________
Name:___________________________ Name:__________________________
Title: _________________________ Title:_________________________
VISION SERVICE PLAN EXECUTIVE RABBI TRUSTWILLIAM XXXX
DEFERRED PLAN CORPORATION
By:_____________________________ By:____________________________
Name:___________________________ Name:__________________________
Title: _________________________ Title:_________________________
DU XXXX 1991 TRUST XXXXX AND XXXXXX XXXXX FAMILY TRUST
By:_____________________________ By:____________________________
Name:___________________________ Name:__________________________
Title: _________________________ Title:_________________________
EXHIBIT A
LIST OF KEY HOLDERS
1. Xxx Xxxxxxx
2. Xxxx Xxxxxx
EXHIBIT B
List of Investors
1. XxXxxx De Leeuw and Company IV, LP
2. XxXxxx De Leeuw and Company IV Associates, LP
3. Delta Fund, LP
4. Board of Trustees of Xxxxxx Xxxxxxxx Junior University
5. Xxxxx X. Xxxxxxxxxxx
6. Xxxxxxx Family Trust
7. Xxxxxxx X. Xxxxxxxx Revocable Trust
8. Xxxxxxx X. Xxxxxx
9. Xxxxxxx X. Xxxxxxx
10. Gidwitz Revocable Trust dated 9/12/96
11. Vision Service Plan Executive Deferred Plan Rabbi Trust
12. Xxxxxxx Xxxx Corporation
13. Du Xxxx 1991 Trust
14. Xxxxx and Xxxxxx Xxxxx Family Trust
