This Voting
Agreement (this “ Agreement ”) is made and
entered into as of February 12, 2004 by and among NGTV, a
California corporation (the “ Company ”), each
of the persons and entities listed on Schedule A (collectively
referred to as the “ Investors ”), Kourosh Taj
and Janak Vibhakar (each referred to herein as a “
Founder ” and collectively as the “
Founders ”) and Gene Simmons LLC, Allan Brown and
Richard Abramson LLC (each referred to herein as a “
Principal Shareholder ” and collectively as the
“ Principal Shareholders ”).
WHEREAS ,
the Investors are the beneficial owners of common stock of the
Company as set forth in Schedule A;
WHEREAS ,
the Founders are the beneficial owners of common stock of the
Company as set forth on Schedule B hereto;
WHEREAS ,
the Principal Shareholders are the beneficial owners of common
stock of the Company as set forth on Schedule C
hereto;
WHEREAS ,
the Investors acquired their shares of common stock in connection
with or pursuant to a financing of up to $7,000,000 of units of the
Company each unit consisting of one share of common stock in the
capital of the Company and one-half of one common stock purchase
warrant (the “ Financing ”); and
WHEREAS ,
the Founders, the Principal Shareholders 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:
1.1 Founder
Shares; Principal Shareholder Shares; Investor
Shares.
(a) The
Founders each will 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
Founders after the date hereof (hereinafter collectively referred
to as the “ Founder
Shares ”) subject to, and to vote the Founder
Shares in accordance with, the provisions of this
Agreement.
(b) The
Principal Shareholders each will 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 Principal Shareholders after the date hereof
(hereinafter collectively referred to as the “ Principal
Shareholder Shares ”) subject to, and to vote the
Principal Shareholder Shares in accordance with, the provisions of
this Agreement.
(c) The
Investors each will 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
Investors after the date hereof (hereinafter collectively referred
to as “ Investor Shares ”) subject to, and to
vote the Investor Shares in accordance with, the provisions of this
Agreement.
(a) On
all matters relating to the election of directors of the Company,
the Founders, Principal Shareholders and the Investors will vote,
or cause to be voted, all Founder Shares, Principal Shareholder
Shares and Investor Shares 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:
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(i)
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the
three (3) nominees selected by a majority in interest of the
Founders;
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(ii)
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the
three (3) nominees selected by a majority in interest of the
Principal Shareholders; and
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(iii)
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the
two (2) nominees selected by a majority in interest of the
Investors.
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(b) A
quorum for a meeting of the Board of Directors shall be six
(6) directors provided that there is present at least one
nominee of the Founders, one nominee of the Principal Shareholders
and one nominee of the Investors. If a quorum is not present at the
time appointed for a meeting, or within such reasonable time
thereafter as the directors present may determine, the directors
present may adjourn the meeting to a fixed time (not to less than
7 days following such adjournment) and place (the “
Adjourned Meeting ”) but may not transact any other
business. At least 7 days prior Notice shall be given of the
time and place of the Adjourned Meeting, and the manner for
participating in the Adjourned Meeting telephonically. At any
Adjourned Meeting of the Board of Directors, the directors in
attendance regardless of number or constitution thereof, shall be
deemed to constitute a quorum for the transaction of business at
such Adjourned Meeting.
(c) Any
vote or other action taken to remove a director shall require the
consent or vote of a majority in interest of the shareholders
entitled to designate such director, and any vote or other action
to fill any vacancy created by the resignation, removal or death of
a
director shall
also be subject to the provisions of Section 1.2(a). The
parties to this Agreement agree to vote their shares consistently
with this provision.
(d) Except
for those matters set forth in Section 1.2(b) and (e), all
matters requiring approval by the Board of Directors shall require
the approval of a majority of the directors present at a duly
constituted meeting at which a quorum or deemed quorum is present
as provided for in Section 1.2(b) hereof.
(e) Notwithstanding
Section 1.2(d) hereof, the matters set forth below shall, in
addition to any approval required by the shareholders of the
Company by reason of statute contract, or otherwise, require the
approval of not less than 75% of the members of the Board of
Directors:
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(i)
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any
transaction involving the Company and (whether directly or
indirectly) a Related Party (as hereinafter defined) of a director
(a “Related Party Transaction”);
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(ii)
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any
voluntary dissolution, winding-up or liquidation of the
Company;
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(iii)
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any
issuance, authorization, designation or obligation to issue,
whether by reclassification, recapitalization, or otherwise, of any
new class or series of stock or any other securities convertible
into, or exchangeable or exercisable for, equity securities of the
Company ranking senior to the Common Stock in right of liquidation,
voting or dividends or any other right; or
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(iv)
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any
issuance of equity securities including any securities exercisable,
exchangeable or convertible into an equity security representing in
excess of 10% of the Company’s outstanding capital stock,
provided that the foregoing shall not apply to any such stock
issuances in connection with or ancillary to a matter already
approved by the Board of Directors including, without limitation,
any of the transactions referred to in Section 2.1 including
any Corporate Reorganization that does not result in a Change of
Control, or any issuance from treasury to an entity purchasing an
equity interest in the Company.
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For the
purposes of this Section 1.2(e) “Related Party”
shall mean a director and any related party of the director within
the meaning of Section 267(b) of the Internal Revenue Code of 1986,
as amended, and any person that directly or indirectly controls, is
controlled by, or is under common control with the person in
question, any person who was a Related Party during the previous 12
months or is substantially likely to become a Related Party during
the following 6 months, any person that may receive a
financial benefit in the expectation that that person will give a
corresponding financial benefit to a related party or a director, a
shareholder or holder of other securities of the Company, and any
person in which the director or a related party of the director has
a material financial interest pursuant to California Corporations
Code Section
310(a). As used
in this definition, the term “control” means the
possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of a person, whether
through ownership of more than 50% of voting securities, by
contract or otherwise, the term “person” means one or
more individuals or any form or forms of business entity, a
director includes a person that is, or within the 12 months
preceding the date of the transaction was, not a
director
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