Exhibit 3.2
IRREVOCABLE PROXY
IRREVOCABLE PROXY, dated as of August 3, 1998, by and between HIAC XII
CORP., a Delaware corporation ("Buyer"), A. Xxxx Xxxx and Xxxxxxx X. Xxxx
(together with A. Xxxx Xxxx, the "Stockholders").
WHEREAS, concurrently with the execution and delivery of this
Agreement, Monarch Avalon, Inc., a Delaware corporation (the "Company") and
Buyer are entering into an Asset Purchase Agreement, dated as of August 3,
1998 (the "Asset Purchase Agreement"), providing, among other things, for
the sale by the Company and the acquisition by Buyer of certain assets of
the Company; and
WHEREAS, the Stockholders are the owners beneficially and of
record of an aggregate of 601,019 Shares and 120,000 Option Shares (as
described in the Voting Agreement dated August 3, 1998, between Buyer and
each of the Stockholders (the "Voting Agreement")); and
WHEREAS, as a condition to its willingness to enter into the
Asset Purchase Agreement, Buyer has requested that the Stockholders agree,
and the Stockholders have agreed pursuant Section 1.2 of the Voting
Agreement, to grant Buyer an irrevocable proxy (the "Proxy") with respect
to the Shares, upon the terms and subject to the conditions hereof;
NOW, THEREFORE, to induce Buyer to enter into the Asset Purchase
Agreement and in consideration of the aforesaid and the mutual
representations, warranties, covenants and agreements set forth herein and
in the Asset Purchase Agreement and the Voting Agreement, the parties
hereto agree as follows:
1. Each Stockholder hereby constitutes and appoints Buyer,
during the term of this Agreement as such Stockholder's true and lawful
proxy and attorney-in-fact, with full power of substitution and
resubstitution, to vote all of the Shares (and any and all securities
issued or issuable in respect thereof) which such Stockholder is entitled
to vote, for and in the name, place and stead of such Stockholder, at any
annual, special or other meeting of the stockholders of the Company, and at
any adjournment or adjournments thereof, or pursuant to any consent in lieu
of a meeting or otherwise,
(i) to approve the Asset Purchase Agreement and the transactions
contemplated thereby, including the change of the name of the Company
to a name not including the word "Avalon";
(ii) against any action or agreement that will result in a breach
in any material respect of any covenant, representation or warranty or
any other obligation of the Company under this Agreement or the Asset
Purchase Agreement; and
(iii) against (A) any extraordinary corporate transaction, such
as a merger, rights offering, reorganization, recapitalization or
liquidation involving the Business (as described in the Asset Purchase
Agreement), (B) a sale or transfer of the Assets, other than in the
ordinary course of business or pursuant to the Asset Purchase
Agreement, or the issuance of any securities of the Company (except
options to purchase Company Common Stock granted to directors of the
Company and the related issuance of Company Common Stock upon exercise
of such options in accordance with the terms thereof, provided, that
after the approval of such options, the number of shares of the
Company Common Stock outstanding plus the number of shares of Company
Common Stock reserved for issuance pursuant to such options to
directors shall be equal to the current number of shares of Company
Common Stock outstanding plus the number of shares of Company Common
Stock reserved for issuance pursuant to existing options to directors)
or of any subsidiary holding or having any rights to any of the
Assets, (C) any change in the executive officers or Board of Directors
of the Company, (D) any change in the present corporate structure of
the Company or the Business or (E) any action that is intended, or
could reasonably be expected, to materially impede, interfere with,
delay, postpone or adversely affect the approval of the Asset Purchase
Agreement and the transactions contemplated by the Asset Purchase
Agreement. All power and authority hereby conferred is coupled with
an interest and is irrevocable. In the event that Buyer is unable to
exercise such power and authority for any reason, each Stockholder
agrees that he will vote all the Shares owned by him in favor of
approval and adoption of the Asset Purchase Agreement and the
transactions contemplated thereby, at any such meeting or adjournment
thereof, or provide his written consent thereto.
2. Any shares of Common Stock issued to the Stockholders upon
the exercise of any stock options that are currently exercisable or become
exercisable during the term of this Agreement shall be deemed Shares for
purposes of this Agreement.
3. This Proxy shall be governed by and construed in accordance
with the laws of the State of Delaware without giving effect to the
provisions thereof relating to conflicts of law.
4. This Proxy shall be binding upon, inure to the benefit of,
and be enforceable by the successors and permitted assigns of the parties
hereto. This Proxy and the rights hereunder may not be assigned or
transferred by Buyer, except that Buyer may assign its rights hereunder to
any direct or indirect subsidiary.
5. This Proxy shall survive only until the earlier to occur of
the Closing (as described in Section 1.5 of the Asset Purchase Agreement)
or the termination of the Asset Purchase Agreement pursuant to Article VII
thereof notwithstanding the survival of any terms of the Asset Purchase
Agreement following such termination.
6. This Proxy is granted in consideration of the execution and
delivery of the Asset Purchase Agreement by Buyer. Each Stockholder agrees
that such Proxy is coupled with an interest sufficient in law to support an
irrevocable power and shall not be terminated by any act of such
Stockholder, by lack of appropriate power or authority or by the occurrence
of any other event or events.
7. The parties acknowledge and agree that performance of their
respective obligations hereunder will confer a unique benefit on the other
and that a failure of performance will not be compensable by money damages.
The parties therefore agree that this Proxy shall be specifically
enforceable and that specific enforcement and injunctive relief shall be
available to Buyer and the Stockholder for any breach of any agreement,
covenant or representation hereunder. This Proxy shall revoke all prior
proxies given by the Stockholder at any time with respect to the Shares.
8. Each Stockholder will, upon request, execute and deliver any
additional documents and take such actions as may reasonably be deemed by
Buyer to be necessary or desirable to complete the Proxy granted herein or
to carry out the provisions hereof.
9. If any term, provision, covenant, or restriction of this
Proxy is held by a court of competent jurisdiction to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Proxy shall remain in full force and effect and shall
not in any way be affected, impaired or invalidated.
10. This Proxy may be executed in two counterparts, each of
which shall be deemed to be an original but both of which together shall
constitute one and the same document.
IN WITNESS WHEREOF, Buyer and the Stockholder have caused this
Proxy to be duly executed on the date first above written.
/s/ A. Xxxx Xxxx
______________________________
A. Xxxx Xxxx
/s/ Xxxxxxx X. Xxxx
_______________________________
Xxxxxxx X. Xxxx
HIAC XII CORP.
By: /s/ Xxxxxx X. Xxxxxx
____________________________
Name: Xxxxxx X. Xxxxxx
Title: Executive Vice President
