EXHIBIT 10.2
STOCKHOLDERS' AGREEMENT
STOCKHOLDERS' AGREEMENT, made the 8th day of May, 2001, by and among
XXXXX XXXXXXXXXXX, THE XXXXXXXXXXX FOUNDATION, INC. and XXXXXXX XXXXXXXXXXX
(collectively, the "Xxxxxxxxxxx Group"), each having an address at the Carlyle
Hotel, 00 Xxxx 00xx Xxxxxx, Xxx Xxxx, XX 00000; XXXXXX X. XXXX, XX. ("Xxxx"),
having an address at 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, XX 00000; XXXXXX X. XXXXX
and M&B XXXXX FAMILY PARTNERSHIP (the "Xxxxx Group"), having an address c/o
Xxxxxxx Xxxxx Xxxxxxx Xxxxx & Xxxxxx LLP, Xxx Xxxxxxxxxxxx Xxxxx, Xxx Xxxx, XX
00000; J. XXXXXX XXXXX, X.X. XXXXX INVESTMENT BANKING CORP., RIVKALEX
CORPORATION and XXXXXXXX XXXXXXXXXX (collectively, the "Xxxxx Group"), having an
address c/o X.X. Xxxxx Investment Banking Corp., 00 Xxxx Xxxxxx, Xxx Xxxx, XX
00000, and XXXXX XXXXXXXXXXX ("Xxxxx Xxxxxxxxxxx"), having an address at 00 Xxxx
00xx Xxxxxx, 00xx Xx., Xxx Xxxx, XX 00000 (each member of the Xxxxxxxxxxx Group,
Xxxx, the Xxxxx Group and the Xxxxx Group and Xxxxxxxxxxx, individually, a
"Stockholder" and collectively the "Stockholders").
WHEREAS, the Stockholders and News Communications, Inc., a Nevada
corporation ("NCI"), are parties to an agreement (the "Letter Agreement")
pursuant to which, among other things, Xxxxx Xxxxxxxxxxx has agreed to become
President and Chief Executive Officer of NCI and purchased 1,000,000 shares of
NCI's common stock (the "Common Stock");
WHEREAS, each Stockholder owns, or will own, the number of shares of
Common Stock and/or $10 Convertible Preferred Stock (the "Preferred Stock") set
forth opposite his name on Exhibit A hereto (collectively, the "Shares"); and
WHEREAS, the Stockholders desire to provide for the composition of the
Board of Directors of NCI (the "Board"), the voting of their Shares in certain
circumstances and certain other matters relating to NCI.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein and for other good and valuable consideration, the
receipt of and sufficiency of which is hereby acknowledged, the parties agree as
follows:
1. Definitions. For the purposes of this Agreement, terms used but not
otherwise defined herein shall have the meaning set forth in the Letter
Agreement.
2. Term. Unless otherwise terminated pursuant to the provisions hereof,
the term of this Agreement shall commence on the date hereof and end on May 7,
2006.
3. Representations of the Stockholders and NCI. Each Stockholder
represents to and agrees with the other Stockholders that (i) such Stockholder
is the legal holder and beneficial owner of the Shares set forth opposite such
Stockholder's name on Exhibit A hereto, (ii) such Shares and the Shares
hereafter acquired by such Stockholder will be owned free and clear of all
liens, claims, charges, options and encumbrances other than restrictions on
transfer under this Agreement except as otherwise created by this Agreement,
(iii) such Stockholder has not entered into, and agrees that such Stockholder
will not enter into, any other agreement or arrangement the performance of which
would in any manner conflict with, restrict or be inconsistent with the
performance of such Stockholder's obligations under this Agreement and (v) this
Agreement
constitutes the legal, valid and binding obligation of such Stockholder,
enforceable against such Stockholder in accordance with its terms.
4. Corporate Governance and Related Matters.
(a) To the extent permitted by applicable law, each Stockholder
agrees to use commercially reasonable efforts to take any and all action
necessary, including, without limitation, the voting of, or the execution of
consents with respect to, their Shares, the calling of special meetings of
stockholders, the amendment of agreements and designations to the Board, the
attending of meetings and the amendment of NCI's Certificate of Incorporation
and By-Laws, to cause the size of the Board to be maintained at nine (9)
members, with such directors selected in accordance with Section 4(c) hereof.
(b) Until such time as Xxxxx Xxxxxxxxxxx ceases to be employed by
NCI or this Agreement is otherwise terminated, each member of the Xxxxx Group
hereby irrevocably appoints Xxxxx Xxxxxxxxxxx as proxy and attorney-in-fact to
vote all of such person's shares. Each member of the Xxxxx Group acknowledges
that such proxy is being given to induce Xxxxx Xxxxxxxxxxx to become engaged by,
and make an investment in, NCI and is, therefore, coupled with an interest and
shall be irrevocable; provided, however, that Xxxxx Xxxxxxxxxxx shall not vote
Shares owned by the Xxxxx Group in any manner which would conflict with the
provisions of this Agreement, which would otherwise permit Xxxxx Xxxxxxxxxxx or
an Affiliate (which for purposes of this Agreement shall have the meaning
defined in Rule 405 of the Securities Act of 1933) of Xxxxx Xxxxxxxxxxx to
acquire Shares owned by the Xxxxx Group on terms less favorable than that
outlined in the Letter Agreement or which would authorize a transaction in which
any member of the Xxxxx Group is treated less favorably than Xxxxx Xxxxxxxxxxx,
the Xxxxxxxxxxx Group, Xxxx or the Xxxxx Group or any Affiliate of such person
or entity.
(c) Xxxxx Xxxxxxxxxxx, Xxxx, each member of the Xxxxxxxxxxx Group
and each member of the Xxxxx Group hereby agrees, so long as Xxxxx Xxxxxxxxxxx
is the Chief Executive Officer and President of NCI, to vote the Shares owned or
controlled by such Stockholder and to use such Stockholder's best efforts to
cause his Affiliates (as defined in Rule 405 of the Securities Act of 1933) to
vote their Shares, or execute consents with respect to their Shares so as to
elect, and to take all other action required to elect, as directors of NCI: (i)
four persons designated by Xxxxx Xxxxxxxxxxx, one of whom shall initially be
Xxxxx Xxxxxxxxxxx, one of whom shall initially be Xxxxx Xxxxxxxxxxx; (ii) one
person to be designated by the Xxxxx Group who shall initially be Xxxxxx Xxxx;
(iii) one person to be designated by Xxxx who shall initially be Xxxxxx Xxxx;
and (iv) one person to be designated by the Xxxxx Group who shall initially be
Xxxx Xxxxx; and (v) two persons to be designated by the mutual agreement of
Xxxx, the Xxxxx Group and the Xxxxx Group.
(d) Each Stockholder agrees that if, at any time, such Stockholder
is then entitled to vote for the removal of directors of NCI, he will not vote
any the Shares owned or controlled by such Stockholder in favor of the removal
of any director who shall have been designated or nominated pursuant to Section
4(c) unless such removal shall be for Cause or the person(s) entitled to
designate or nominate such director shall have consented to such removal in
writing, provided that if the persons entitled to designate or nominate any
director pursuant to Section 4(c) shall request the removal, with or without
Cause, of such director in writing, such Stockholder shall vote such
Stockholder's Shares, and shall use such Stockholder's commercially reasonable
efforts (without requiring the expenditure of funds) to cause such Stockholder's
affiliates to vote such affiliates' Shares, in favor of such removal. Removal
for
"Cause" shall mean removal of a director because of such director's (a) willful
and continued failure substantially to perform his duties with NCI in his
established position, (b) willful conduct which is injurious to NCI or any of
its subsidiaries, monetarily or otherwise, (c) conviction for, or guilty plea
to, a felony or a crime involving moral turpitude, (d) abuse of illegal drugs or
other controlled substances or habitual intoxication or (e) willful breach of
this Agreement.
(e) If, as a result of death, disability, retirement, resignation,
removal (with or without Cause) or otherwise, there shall exist or occur any
vacancy on the Board:
(i) The person(s) entitled under Section 4(c) to designate or
nominate such director whose death, disability, retirement,
resignation or removal resulted in such vacancy, may, subject to the
provisions of Section 4(c), designate another individual (the
"Nominee") to fill such vacancy and serve as a director of the
Company; and
(ii) each Stockholder then entitled to vote for the election of
the Nominee as a director of NCI agrees that such Stockholder will
vote such Stockholder's Shares, and shall use such Stockholder's
reasonable efforts to cause its Affiliates to vote its shares, or
execute a written consent, as the case may be, in order to ensure that
the Nominee is elected to the Board.
(f) The right to designate one or more members of the Board by any
Stockholder (or group of Stockholders) pursuant to this Section 4 shall
terminate at such time that the ownership of shares by such Stockholder (or
group of Stockholders) is less than 5% of the outstanding Common Stock on a
fully diluted basis (inclusive of (i) any options, warrants or shares of
Preferred Stock owned by such Stockholder and any Affiliate of such Stockholder,
(ii) in the case of Xxxx, the shares owned by WLR Recovery Fund L.P. and (iii)
in the case of Xxxxx Xxxxxxxxxxx, the Xxxxx Group's Shares to which he has an
irrevocable proxy pursuant to Section 4(b) hereof). The obligations imposed on
the Stockholders to give effect to the rights to designate directors set forth
in Section 4(c) shall terminate as to any person when such person's right to
designate a director is terminated.
5. Injunctive Relief; Specific Performance.
Each of the Stockholders acknowledges that the other Stockholders will
be irreparably damaged in the event of a breach or threatened breach of the
terms, covenants and/or conditions of this Agreement by any Stockholder. In
addition to any other remedy to which the Stockholders may be entitled, the
Stockholders shall be entitled to a preliminary and permanent injunction,
without showing any actual damage or threat of irreparable injury, and/or a
decree for specific performance, in accordance with the provisions hereof.
6. Miscellaneous.
(a) This Agreement constitutes the entire agreement among the
Stockholders with respect to the subject matter hereof, supersedes all prior
agreements or understandings among the parties hereto with respect to the
subject matter hereof, including that certain Stockholders' Agreement dated July
28, 1999 by and among NCI, the Xxxxxxxxxxx Group, Xxxx, the Xxxxx Group and
Xxxxxx Xxxxxxx, and may not be modified, amended or terminated except by a
written agreement signed by all of the parties hereto.
(b) No waiver of any breach or default hereunder shall be considered
valid unless in writing, and no such waiver shall be deemed a waiver of any
subsequent breach or default of the same or similar nature.
(c) If any provision of this Agreement shall be held invalid or
unenforceable, such invalidity or unenforceability shall attach only to such
provision and shall not in any manner affect or render invalid or unenforceable
any other severable provision of this Agreement, and this Agreement shall be
carried out as if any such invalid or unenforceable provision were not contained
herein. In the event that any provision is declared invalid or unenforceable,
the Stockholders agree to substitute for such invalid or unenforceable provision
a new provision which reflects, to the closest extent possible, the intent of
the parties.
(d) Except as otherwise expressly provided herein, this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors, estates, heirs, legal representatives and permitted
assigns and transferees.
(e) The section headings contained herein are for the purposes of
convenience only and are not intended to define or limit the contents of said
actions.
(f) THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW
YORK (WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAW) EXCEPT THAT
MATTERS PERTAINING TO THE NEVADA BUSINESS CORPORATION LAW SHALL BE GOVERNED BY
THE NEVADA BUSINESS CORPORATION LAW. The Stockholders consent and agree that
jurisdiction and venue for all legal proceedings relating to the subject matter
of this Agreement shall lie exclusively with the appropriate federal or state
court sifting within the State of New York, County of New York.
(g) Any notice or other communications required or permitted
hereunder shall be in writing and shall be deemed effective (i) upon personal
delivery, if delivered by hand and followed by notice by mail or facsimile
transmission, (ii) three (3) days after the date of deposit in the mails, if
mailed by certified or registered mail (return receipt requested), or (iii) on
the next business day, if mailed by an overnight mail service to the parties or
sent by facsimile transmission, addressed to the Stockholders and Xxxxx
Xxxxxxxxxxx at their respective addresses first written above.
(h) This Agreement may be executed in two or more counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
(i) All representations, warranties and agreements contained herein
shall survive the execution and delivery of this Agreement.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first above written.
/s/ Xxxxx Xxxxxxxxxxx
---------------------------------
Xxxxx Xxxxxxxxxxx
/s/ Xxxxx Xxxxxxxxxxx
---------------------------------
Xxxxx Xxxxxxxxxxx
THE XXXXXXXXXXX FOUNDATION, INC.
By: /s/ Xxxxx Xxxxxxxxxxx
---------------------------------
Xxxxx Xxxxxxxxxxx
President
/s/ Xxxxxxx Xxxxxxxxxxx
---------------------------------
Xxxxxxx Xxxxxxxxxxx
/s/ Xxxxxx X. Xxxx, Xx.
---------------------------------
Xxxxxx X. Xxxx, Xx.
/s/ Xxxxxx X. Xxxxx
---------------------------------
Xxxxxx X. Xxxxx
M&B XXXXX FAMILY PARTNERSHIP
By: /s/ Xxxxxx X. Xxxxx
------------------------------
Name: Xxxxxx X. Xxxxx
General Partner
[Signature pages continue on next page]
X.X. XXXXX INVESTMENT BANKING
CORP.
By: /s/ J. Xxxxxx Xxxxx
------------------------------
J. Xxxxxx Xxxxx
RIVKALEX CORPORATION
By: /s/ Xxxxxxxx Xxxxxxxxxx
------------------------------
Xxxxxxxx Xxxxxxxxxx
President
/s/ J. Xxxxxx Xxxxx
---------------------------------
J. Xxxxxx Xxxxx
/s/ Xxxxxxxx Xxxxxxxxxx
---------------------------------
Xxxxxxxx Xxxxxxxxxx
EXHIBIT A
The Xxxxxxxxxxx Group = 264,001 shares
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Name of Holder Common Common Issuable on
Preferred Conversion
---------------------------------------------------------------------------------------------------------------
Xxxxx Xxxxxxxxxxx 187,389 --
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Xxx. Xxxxxxxxxxx (wife) 66,667 --
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The Xxxxx Xxxxxxxxxxx Foundation Inc. 9,945 --
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Xxxxxx X. Xxxx, Xx. = 585,619 shares
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Name of Holder Common Common Issuable on
Preferred Conversion
---------------------------------------------------------------------------------------------------------------
Xxxxxx X. Xxxx, Xx. 428,399 157,220(1)
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The Xxxxx Group = 4,751,773 shares
---------------------------------------------------------------------------------------------------------------
Name of Holder Common Common Issuable on
Preferred Conversion
---------------------------------------------------------------------------------------------------------------
X.X. Xxxxx Investment Banking Corp. 2,697,405(2)(3) 23,190(1)
---------------------------------------------------------------------------------------------------------------
Rivkalex Corporation 41,006 --
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Xxxxxxxx Xxxxxxxxxx (wife) 1,990,172(2) --
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The Xxxxx Group = 1,674,038 shares
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Name of Holder Common Common Issuable on
Preferred Conversion
---------------------------------------------------------------------------------------------------------------
Xxxxxx X. Xxxxx 1,138,124 78,610(1)
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M&B Xxxxx Family Partnership 457,304 --
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Xxxxx Xxxxxxxxxxx = 768,000 shares
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Name of Holder Common Common Issuable on
Preferred Conversion
---------------------------------------------------------------------------------------------------------------
Xxxxx Xxxxxxxxxxx 768,000(4) --
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(1) Based upon a conversion price of $2.5442 per share.
(2) Assumes an issuance of 1,350,000 to Xxxxxxxxxx and X.X. Xxxxx upon
conversion of their convertible notes.
(3) Includes 250,000 shares to be purchased by X.X. Xxxxx as required by that
certain Letter Agreement dated as of the date hereof by and among Xxxxx
Xxxxxxxxxxx, NCI and the other parties thereto (the "Xxxxxxxxxxx Agreement").
(4) Includes 750,000 shares to be purchased by Xxxxx Xxxxxxxxxxx as required by
the Xxxxxxxxxxx Agreement.
