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SHAREHOLDERS AGREEMENT
Extended Shareholders Agreement, effective as of August 25, 1996, by and
among All American Communications, Inc., a Delaware corporation (the "Company"),
Xxxxxxx X. Xxxxxx ("X. Xxxxxx"), Xxxxxxxx X. Xxxxxx ("X. Xxxxxx") (X. Xxxxxx and
X. Xxxxxx being hereinafter collectively referred to as the "Xxxxxx Group"),
Xxxxxx Xxxxxxxx ("Xxxxxxxx"), Xxxxx Xxxx ("Xxxx"), and Sydney X. Xxxxxxxx
("Xxxxxxxx") (Xxxxxxxx, Xxxx and Xxxxxxxx being hereinafter collectively
referred to as the "Management Group").
WHEREAS, the Company, the Management Group and the Xxxxxx Group have
entered into a Shareholders Agreement dated as of February 25, 1991 (the
"Original Shareholders Agreement") regarding the disposition of the Management
Stock (as defined in the Original Shareholders Agreement) and certain other
rights of the Company and the Xxxxxx Group;
WHEREAS, the parties hereto desire to enter into an agreement
regarding their respective rights and obligations with respect to the
Management Stock and certain other matters for an extended term and to provide
for continuity in the operations of the Company as controlled by X. Xxxxxx and
X. Xxxxxx;
NOW, THEREFORE, in consideration of the agreements and mutual covenants
contained herein, the parties hereby agree as follows:
1. Definitions.
1.1 Capitalized Terms. Capitalized terms used herein
without definition shall have the respective meanings set forth in the Original
Shareholders Agreement.
2. Right of First Refusal.
(a) All Management Stock shall be subject to the following
"right of First Refusal" in favor of first X. Xxxxxx and X. Xxxxxx, and second
the Company to the extent that X. Xxxxxx and X. Xxxxxx elect not to exercise
their Right of First Refusal with respect to any shares of Management Stock
subject to such Right of First Refusal.
(b) For a period of five years following the effective date
hereof, no shares of Management Stock may be sold, transferred, pledged,
encumbered or otherwise disposed of (collectively "Transfer") by Xxxxxxxx, Xxxx
or Xxxxxxxx (as the case may be) without first offering (i) X. Xxxxxx and X.
Xxxxxx and (ii) the Company (to the extent that X. Xxxxxx and X. Xxxxxx elect
not to exercise their right of First Refusal with respect to all such offered
shares) the right to purchase such portion of the Management Stock.
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sought to be transferred by Xxxxxxxx, Xxxx or Xxxxxxxx (as the case may be), at
such purchase price and upon such terms as shall have been offered in writing
by a third party. If the proposed consideration is other than cash, the person
who has the Right of First Refusal may elect to pay either (i) cash in lieu of
such other non-cash consideration or (ii) non-cash consideration of equal
value. In that case, the value of the non-cash consideration will be determined
within thirty (30) days by an independent appraiser reasonably mutually
acceptable to the Investor and the person having the Right of First Refusal, or
if the parties are unable to select a mutually acceptable appraiser, such
appraiser shall be selected by the Presiding Judge of the Superior Court of Los
Angeles County and shall determine the value of the non-cash consideration
within thirty (30) days of selection. Any exercise of these Right of First
Refusal must be communicated in writing to Xxxxxxxx, Xxxx or Xxxxxxxx (as the
case may be) within five (5) business days of notification to X. Xxxxxx and X.
Xxxxxx (or the Company) of the proposed transfer of any Management Stock.
(c) In the event that Xxxxxxxx, Xxxx or Xxxxxxxx (as the case may be)
should seek to Transfer any Management Stock owed by him in the course of an
ordinary public market transaction, then the purchase price per share of
Management Stock to be paid by the person electing to exercise the Right of
First Refusal shall be equal to the average of the Closing Prices (as
hereinafter defined) for the 10 consecutive Trading Days (as hereinafter
defined) immediately preceding the date of written notification of the exercise
of the Right of First Refusal ("Exercise Date"). For purposes of the
Shareholders Agreement, the term "Closing Price" shall mean the last reported
sales price regular way for the Common Stock on the National Association of
Securities Dealers Inc. Automated Quotation System (the "NASDAQ System") if the
Common Stock is then listed thereon or, if not so listed, on the principal
national stock exchange on which the Common Stock is then listed for the 10
consecutive Trading Days immediately preceding the Exercise Date. A "Trading
Day" is a business day in which shares of the Common Stock have actually
traded; provided, that (i) if at the time of any computation pursuant to this
paragraph the Common Stock is not then traded on any trading market or (ii) if
there have not been 10 Trading Days in the last 30 calendar days, the purchase
price for the shares of Management Stock sought to be transferred shall be the
fair value as reasonably determined in good faith by the Board of Directors of
the Company.
(d) Notwithstanding the foregoing, the provisions of this Section 2
shall not apply to any shares of Common Stock owned by Xxxxxxxx prior to
February 25, 1991.
3. Restrictions on Transfer of Management Stock. No Transfer of any
shares of Management Stock may be made except in compliance with the provisions
of the Shareholders Agreement and all applicable federal, state and foreign
securities laws. No Transfer of Management Stock, other than a permitted
Transfer (as hereinafter defined), shall be made unless (i) the transferor
shall deliver to the Company a written opinion of counsel (which opinion shall
be satisfactory in form and substance to the Company) to the effect that an
exemption from registration under the Securities Act is available and
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that the proposed Transfer will not violate applicable federal, state or
foreign securities laws and (ii) the transferee delivers to the Company a
written agreement (in form and substance reasonably satisfactory to the
Company) providing that such transferee will be bound by the provisions
restricting Transfers set forth in this Section 3. For purposes of this Section
3, a ""Permitted Transfer" is any Transfer made (i) pursuant to an effective
registration statement filed under the Securities Act or (ii) in the public
market in ordinary market transactions regular way.
4. Legend. In addition to any other legend that may appear on the
certificates representing the shares of Common Stock owned by the parties
hereto, the Company agrees to cause all certificates for shares of Management
Stock to bear the following legend:
THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, HAVE BEEN TAKEN FOR
INVESTMENT AND ARE SUBJECT TO THE PROVISIONS OF A SHAREHOLDERS
AGREEMENT DATED AS OF AUGUST 25, 1996. NEITHER THIS CERTIFICATE NOR
THE SHARES REPRESENTED BY IT ARE ASSIGNABLE OR OTHERWISE
TRANSFERABLE EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF SUCH
AGREEMENT, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE
COMPANY.
5. Irrevocable Proxy. Each of Xxxxxxxx, Xxxxxxxx and Xxxx hereby grant
to X. Xxxxxx and irrevocable proxy, coupled with an interest, to vote all
shares of Management Stock owned by him with respect to any and all matters
with respect to which a holder of shares of Common Stock is entitled to vote.
In the event that the proxy shall be unenforceable for any reason, each of
Xxxxxxxx, Xxxxxxxx and Xxxx hereby agree to vote all such shares as directed by
X. Xxxxxx. Notwithstanding the foregoing, the provisions of this Section 5
shall not apply to any shares of Common Stock owned by Xxxxxxxx prior to
February 25, 1991.
6. Termination. Unless otherwise indicated herein, this Shareholders
Agreement shall terminate five years and six months from the date hereof.
7. Notices. All notices, consents and other communications under this
Shareholders Agreement shall be in writing and shall be deemed to have been
duly given when (a) delivered by hand, (b) sent by telex or telecopier (with
receipt confirmed), provided that a copy is mailed by registered mail, return
receipt requested, or (c) when received by the addressee, if sent by Express
Mail, Federal Express or other express delivery service (receipt requested), in
each case at the principal executive offices of the Company or to the
appropriate addresses, telex numbers and telecopier numbers as a party may
designate as to itself by notice to the other parties).
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8. Successors and Assigns. This Shareholders Agreement shall be
binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns; provided, however, that this
Shareholders Agreement may not be assigned by X. Xxxxxx, X. Xxxxxx, Xxxxxxxx,
Xxxxxxxx or Xxxx without the express written consent of the company other than
to the respective heirs, legal representative, conservator or guardian of any
party hereto; and, provided, further, that a transferee pursuant to a Permitted
Transfer shall not be deemed to the a successor or assignee of any party
hereto.
9. Entire Agreement; Amendment and Waiver; Counterparts. This
Shareholders Agreement contains the sole and entire understanding of the
parties with respect to its subject matter and all prior negotiations,
discussions, commitments and understandings heretofore had between them with
respect thereto are merged herein. No waivers of, or consents to departures
from, any provision hereof shall be effective as to any party entitled to the
benefits thereof unless given in writing by such party. This Shareholders
Agreement may be executed in two or more counterparts, each of which shall be
deemed an original, but all of which shall constitute one and the same
agreement. This Shareholders Agreement may not be amended as to any party
unless such amendment is consented to in writing by such party.
10. Business Day. Any action which is to be taken on any day which
is not a business day shall be deemed to have been taken on such day if taken
on the next succeeding business day. For purposes of this Shareholders
Agreement, a "business day" shall mean any day excluding any Saturday, Sunday
and any day which is a legal holiday under the laws of the State of New York,
or is a day on which banking institutions located in such state are required or
authorized by law or other governmental action to close.
11. Governing Law. This Shareholders Agreement and all amendments
hereof and waivers and consents hereunder shall be governed by the internal law
of the State of New York without regard to the conflicts of law principles
thereof.
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IN WITNESS WHEREOF, the parties have caused this Shareholders Agreement
to be duly executed as of the 25th day of August, 1996.
ALL AMERICAN COMMUNICATIONS, INC.
By: /s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx,
Chief Executive Officer
"XXXXXX GROUP":
/s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx
/s/ Xxxxxxxx X. Xxxxxx
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Xxxxxxxx X. Xxxxxx
"MANAGEMENT GROUP":
/s/ Xxxxxx Xxxxxxxx
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Xxxxxx Xxxxxxxx
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Xxxxx Xxxx
/s/ Sydney X. Xxxxxxxx
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Xxxxxx X. Xxxxxxxx
