VOTING AGREEMENT
Voting Agreement, dated as of December 20, 1996 (this "Agreement"), among
▇▇▇▇▇▇ ▇▇▇▇▇▇ ("▇▇▇▇▇▇"), ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ Capital, Inc., BCI Growth III,
L.P., BCI Growth IV, L.P. ("BCI IV"), BT Capital Partners, Inc. ("BTC"), U.S.
Equity Partners, L.P., U.S. Equity Partners (Offshore), L.P., Cypress Ventures,
Inc. ("CVI") and ▇▇▇▇▇▇▇▇▇▇▇ & Co. Inc. ("WCI"; individually a "Participating
Party", and collectively the "Participating Parties") and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇.
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
(individually a "Terminating Party", and collectively with the Participating
Parties, "Parties"), each of which are record or beneficial owners of Common
Stock, par value $.0001 per share ("Common Stock"), of Alliance Entertainment
Corp., a Delaware corporation (the "Company").
WHEREAS, pursuant to a Purchase Agreement dated as of December 20, 1996,
among WCI, BTC and the Company (the "Purchase Agreement"), CVI will receive
shares of Series B Convertible Preferred Stock, par value $0.01 per share (the
"Series B Preferred Stock"), and WCI has entered into a standby purchase
commitment in connection with a rights offering for Series C Convertible
Preferred Stock, par value $0.01 per share (the "Series C Preferred Stock"), of
the Company,
WHEREAS, the Participating Parties are the owners of, or by proxy or
otherwise exercise irrevocable voting control over shares of Common Stock of the
Company as set forth in Attachment A hereto,
WHEREAS, the Parties wish to terminate that certain Voting Agreement dated
as of August 15, 1996 (the "August 15th Voting Agreement") among the
stockholders and optionholders thereto and that certain Voting Agreement dated
as of July 16, 1996 (the "July 16th Voting Agreement") among the stockholders
and optionholders thereto; and
WHEREAS, BTC and BCI IV desire to revoke their proxy granted to ▇▇▇▇▇▇
pursuant to Section 3(b) of that certain Inducement Agreement dated July 16,
1996 (the "Inducement Agreement") among BTC, BCI IV and ▇▇▇▇▇▇.
NOW, THEREFORE, for and in consideration of the premises and the
mutual covenants and agreements hereinafter contained, the Parties hereby agree
as follows:
1. Termination of Prior Voting Agreements. The July 16th Voting Agreement
and the August 15th Voting Agreement (other than paragraph 4 of the August 15th
Voting Agreement
which paragraph shall remain in full force and effect) are hereby terminated and
are no longer in force or effect.
2. Voting of Shares by Parties. Each Participating Party agrees to vote all
of the shares of Common Stock which are now or hereafter owned by such
Participating Party, beneficially or of record, or which he or it is entitled to
vote by proxy or otherwise, including without limitation those shares identified
on Attachment A hereto, at any special or annual meeting of the stockholders of
the Company, or by any written consent, whereat or whereby the same are
considered for approval by the stockholders of the Company, for (a) the approval
of the conversion rights and the voting rights of the Series B Preferred Stock
and the Series C Preferred Stock, as set forth in the certificates of
designations attached thereto, and the issuance of the Series B Preferred Stock
and the Series C Preferred Stock pursuant to the Purchase Agreement, and (b) the
approval of the Company's issuance of Common Stock pursuant to any Participating
Party's exercise of any such conversion rights.
3. Termination of Proxy. BTC and BCI IV hereby terminate and revoke their
proxy granted to ▇▇▇▇▇▇ pursuant to Section 3(b) of the Inducement Agreement.
4. Changes in Common Stock. In the event that subsequent to the date of
this Agreement any shares or other securities (other than any shares or
securities of another corporation issued to the stockholders of the Company
pursuant to a plan of merger) are issued on, or in exchange for, any of the
shares of the Common Stock or Preferred Stock held by the Participating Parties
by reason of any stock divided, stock split, consolidation of shares,
reclassification, or consolidation involving the Company, such shares or
securities shall be deemed to be Common Stock for purposes of this Agreement.
5. Representations of Participating Parties. Each Participating Party
hereby represents and warrants that, after the termination of the July 16th
Voting Agreement and the August 15th Voting Agreement pursuant to Section 1
hereof, (i) such Participating Party owns and/or has the right to vote the
number of shares of the Common Stock set forth opposite his or its name on
Attachment A hereto, (ii) such Participating Party has full power to enter into
this Agreement and has not, prior to the date of this Agreement, executed or
delivered any proxy or entered into any other voting agreement or similar
arrangement that would conflict with the purposes or provisions of this
Agreement, (iii) such Participating Party will not take any action inconsistent
with the purposes and provisions of
this Agreement and (iv) this Agreement is a valid, binding and enforceable
obligation of such Participating Party.
6. Enforceability. Each Party expressly agrees that this Agreement shall be
specifically enforceable in any court of competent jurisdiction in accordance
with its terms against each of the Parties hereto.
7. Benefit. This Agreement shall be binding upon and inure to the benefit
of the respective Parties hereto and their successors.
8. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN THE STATE OF NEW YORK.
9. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the Parties have executed this Agreement as of
the date first above written.
Participating Parties:
/s/▇▇▇▇▇▇ ▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇▇▇▇▇▇
/s/▇▇▇▇▇ ▇▇▇▇▇▇
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▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ CAPITAL, INC.
By:
-----------------------------
Name:
Title:
BCI GROWTH III, L.P.
By:
-----------------------------
Name:
Title:
BCI GROWTH IV, L.P.
By:
-----------------------------
Name:
Title:
BT CAPITAL PARTNERS, INC.
By:
-----------------------------
Name:
Title:
U.S. EQUITY PARTNERS, L.P.,
by its general partner,
W.P. Management Partners, L.L.C.
By:
-------------------------
Name:
Title:
U.S. EQUITY PARTNERS (OFFSHORE),
L.P., by its general partner,
W.P. Management Partners, L.L.C.
By:
--------------------------
Name:
Title:
▇▇▇▇▇▇▇▇▇▇▇ & CO., INC.
By:
--------------------------
Name:
Title:
CYPRESS VENTURES, INC.
By:
--------------------------
Name:
Title:
Terminating Parties:
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▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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R. ▇▇▇▇▇▇ ▇▇▇▇▇▇
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▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Attachment A
Common Stock
▇▇▇▇▇▇ ▇▇▇▇▇▇ 12,250,588
▇▇▇▇▇ ▇▇▇▇▇▇ 1,760,823
▇▇▇▇ Capital, Inc. 3,306,972
BCI Growth III, L.P. N/A
BCI Growth IV, L.P. 831,326
BT Capital Partners, Inc. 3,974,937
U.S. Equity Partners, L.P. and
U.S. Equity Partners (Offshore),
L.P. 4,903,162
Cypress Ventures, Inc. N/A
▇▇▇▇▇▇▇▇▇▇▇ & Co., Inc. 2,904,766