WORLDWIDE FOOTBALL MANAGEMENT, INC.
SHAREHOLDERS AGREEMENT
AGREEMENT, dated as of the 16th day of April, 1997, by and
among WORLDWIDE FOOTBALL MANAGEMENT, INC., a Delaware corporation with its
principal address at ▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ (the
"Corporation"), ▇▇▇▇ ▇▇▇▇▇, residing at ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇ ("▇▇▇▇▇"), and WORLDWIDE ENTERTAINMENT & SPORTS CORP., a Delaware
corporation with its principal address at ▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇ ("Worldwide").
▇▇▇▇▇ and Worldwide (collectively, the "Shareholders") have
caused the Corporation to be formed under the corporate laws of the State of
Delaware for the purpose of engaging in the management and representation of
professional football players. ▇▇▇▇▇ has contributed certain assets to the
Corporation, including certain existing contractual rights, and Worldwide has
contributed certain assets, including cash and certain existing contractual
rights, to the Corporation.
The authorized capital stock of the Corporation consists of
three thousand shares of common stock, par value $.01 per share (the "Shares").
By extension of this Agreement, ▇▇▇▇▇ owns 20 Shares, which constitutes 20% of
the outstanding Shares, and Worldwide owns 80 Shares, which constitutes 80% of
the outstanding Shares.
The parties believe it to be in the best interest of the
Corporation and the Shareholders to set forth certain understandings with
respect to certain matters.
In consideration of the foregoing and of the mutual promises
and agreements hereinafter set forth, and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties agree as follows:
1. Assignment.
(A) ▇▇▇▇▇. By executing this Agreement, and as more fully set forth on
Exhibit A hereof, ▇▇▇▇▇ hereby assigns to the Corporation, subject to the terms
of Paragraph 5 hereof, all of ▇▇▇▇▇'▇ rights and interests in and to the revenue
generated by his services as a Player's Contract Advisor for the professional
athletes listed on Exhibit A ("▇▇▇▇▇'▇ Assignment"). Exhibit A is a complete and
accurate list, as of the date hereof of , (i) the individuals that ▇▇▇▇▇
represents as a duly certified player's agent listed with the NFLPA; (ii) the
current annual compensation amounts of each individual (including revenues from
endorsement income broken out and so identified); (iii) the number of years
remaining on each player's existing contract and the salary and guaranteed bonus
and other payments due to the player thereunder, and; (iv) the percentage of the
respective annual
compensation amounts of the listed individuals that ▇▇▇▇▇ has contracted to
receive as commission (cumulatively, "▇▇▇▇▇'▇ Client Business") pursuant to
signed and valid agent agreements, which to his best knowledge have not been or
are not being or threatened to be terminated or breached by any party thereto.
There are no unpaid fees due to ▇▇▇▇▇ as of the date hereof from any such
individuals, or any individuals for whom the ▇▇▇▇▇ has acted as a certified
player's agent since January 1, 1994, which have not been paid in full.
(B) Worldwide. In executing this Agreement, Worldwide hereby
assigns all of its rights and interests in and to the revenues it receives from
the professional athletes listed on Exhibit B ("Worldwide's Assignment") which
is a complete and accurate list of all of the players currently under contract
with Worldwide; the number of years remaining on each contract; and the amounts
of revenue expected by Worldwide from each such player contract.
2. Management and Internal Affairs.
(A) Directors. The number of directors constituting the entire Board of
Directors of the Corporation shall be three. The Shareholders agree, subject to
the provisions of this Agreement, to nominate and to vote their Shares for the
election as directors of the Corporation of two persons designated by Worldwide
and one person designated by ▇▇▇▇▇. The By-Laws of the Corporation are hereby
deemed amended so as to conform with this Section.
The foregoing notwithstanding, ▇▇▇▇▇ shall have the right to
designate one person for nomination and election to the board only so long as he
continues to own the Shares held by him or he continues to be employed by the
Corporation. In the event that he is neither the holder of Shares nor an
employee of the Corporation, the Shareholders shall be free to nominate and vote
for election as a director, in place of the person previously designated by
▇▇▇▇▇, as the case may be, any person without restriction.
(B) Officers. The Shareholders agree to use their best efforts to secure
the election and continuation in office, and to cause their nominees serving as
Directors to vote for the following persons as officers as follows:
Chairman of the Board ▇▇▇▇ ▇▇▇▇▇▇▇
President ▇▇▇▇ ▇▇▇▇▇
Secretary ▇▇▇ ▇▇▇▇▇▇▇
3. General Issue and Transfer Restrictions.
(A) Prohibition of Issuance or Transfer. The Corporation shall not
hereafter issue any Shares and neither the Corporation nor any Shareholder shall
sell, assign, pledge,
hypothecate or otherwise alienate, encumber or otherwise dispose of, in any
manner (including, without limitation, by will or intestacy), whether or not for
consideration (hereinafter referred to as a "Transfer"), any Shares except as
expressly permitted by the terms of this Agreement. Any attempted issue or
Transfer of Shares of other securities of the Corporation in violation of this
Agreement shall not be recognized and shall be deemed void ab initio.
(B) General Conditions Upon Waiver of Prohibition. In addition to and not
in limitation of any of the other restrictions and conditions, but except as
otherwise herein provided, no Shares shall hereafter be issued without the
consent of all Shareholders and no Shares shall be transferred unless each of
the following conditions is met with respect to such an issue or Transfer:
(1) the transferee agrees in writing to be
bound by all of the provisions of this Agreement to
the same extent as if he were a party to this
Agreement and a Shareholder, and a copy of such
written agreement is given to the Corporation;
(2) the transferee executes and delivers to
the Corporation an investment letter in form and
substance satisfactory to the Corporation and its
counsel, the terms of which shall include an
appropriate investment representation; and
(3) the Transfer or issue is made pursuant
to (a) an effective registration statement under the
Securities Act of 1933 and applicable state
securities laws, or (b) an appropriate exemption
therefrom, in which event the transferee, if any,
shall furnish to the Corporation an opinion of
counsel, reasonably satisfactory to the Corporation
and its counsel, that the Transfer is exempt from
such registration requirements.
(C) Restrictive Legend. Any certificate issued at any time
representing Shares shall have the following endorsement written, printed or
stamped upon the face thereof:
"NOTICE: the securities represented by this
Certificate have not been registered under the
Securities Act of 1933 and applicable state
securities law, and are subject to the terms,
conditions and restrictions of a Shareholders
Agreement among the Corporation and its Shareholders,
dated as of April 7, 1997, a copy of which is on file
with the Secretary of the Corporation, and which
includes, without limitation, certain provisions for
the election of specific directors and officers named
therein and for the issuance of securities of the
Corporation. Said securities may not be offered for
sale, sold, assigned, pledged or otherwise
transferred, encumbered or disposed of, except as
expressly provided in the Shareholders Agreement."
(D) First Refusal. If a Shareholder at any time, or from time to time
receives a bona fide offer from a person or entity not a party to this Agreement
to purchase any Shares (the "Third Party Offer"), prior to the acceptance
thereof, such Shareholder (the "Offering Shareholder") shall give notice thereof
to the other parties hereto. Such notice (the "Offering Notice") shall contain a
detailed description of the Third Party Offer, including, but not limited to,
the name and address of the offeror and the price at which and terms upon which
such Shares (the "Offered Shares") are proposed to be transferred. The Offering
Notice shall be deemed to be an offer by the Offering Shareholder to sell all
Offered Shares to the other parties hereto, who shall have the following options
to accept such offer in accordance with the terms of the Offering Notice:
(1) The Offering Shareholder shall first
offer the Offered Shares to the Corporation, which
shall have sixty days in which to accept all of the
Offered Shares at the purchase price and other terms
and conditions set forth in the Third Party Offer.
(2) If the Offered Shares offered pursuant
to the foregoing offer is not accepted, the Offered
Shares shall be offered to the other Shareholders,
who shall have sixty days in which to accept, pro
rata in accordance with the relative share holdings
of those Shareholders so electing, all of such
Offered Shares at the purchase price and other terms
and conditions set forth in the Third Party Offer.
(3) All acceptances of Offered Shares shall
be effected by notice (the "Acceptance Notice") given
to the Offering Shareholder within the applicable
time limits hereinabove specified.
(4) If all of the Offered Shares are not
accepted pursuant to the foregoing clauses 1 and 2 of
this subsection (A), then all, but not less than all,
of the Offered Shares may be transferred by the
Offering Shareholder, at any time within thirty days
after the last Acceptance Notice was permitted to
have been given, to the proposed offeree named in the
Offering Notice at the price and upon the other terms
and conditions set forth in the Offering Notice;
provided, however, that the Offering Shareholder is
able to certify and certifies to the other parties
hereto that the transfer of the Offered Shares is to
the proposed offeree named in the Offering Notice and
pursuant to the terms and conditions set forth in the
Offering Notice.
(5) Contemporaneously with the giving of an
Offering Notice, the Offering Shareholder shall seek
to assure that such notice is actually received by
the non-Offering Shareholders by making a good faith
attempt to orally notify the non-Offering
Shareholders or their respective agents of the
Offering Notice at whatever place the non-Offering
Shareholders are thought by the Offering Shareholder.
(6) The offer made in any Offering Notice
shall be deemed to be a firm non-withdrawable offer
for the applicable periods hereinabove provided.
(7) Any Shareholder transferring all of his
Shares, other than pursuant to Section 3 hereof, if
an officer, director or employee of the Corporation,
shall tender his resignation from all such positions
simultaneously with the closing of the transfer of
his Shares, and the other parties hereto shall
forthwith do all acts necessary to modify all
applicable documents filed by the Corporation with
various regulatory authorities.
(8) During any period beginning on the
giving of an Offering Notice and ending upon the
closing of the Transfer of the Shares offered
thereunder, such Shares shall not be voted and the
holder thereof shall not exercise any of the rights
attendant to ownership thereof.
(E) Drag-Along and Come-Along Requirements. If at any time
Worldwide desires to sell all of its shares of Common Stock to an unrelated
third-party purchaser, and the purchaser of such Common Stock requires, as a
condition of such sale, that such purchaser acquire all of the shares of Common
Stock of all Management Shareholders, then ▇▇▇▇▇ shall be required to (i) sell
all of his shares of Common Stock to such purchaser on the same price and other
terms and conditions as those offered to Worldwide, or (ii) effect the Share
Exchange set forth in Section 3 hereof. If at any time Worldwide desires to sell
all of its shares of Common Stock to an unrelated third-party purchaser,
Worldwide shall not consummate such purchase and sale transaction unless such
purchaser also offers to purchase all of the shares of Common Stock owned by
▇▇▇▇▇, on the same price and other terms and conditions as those offered to
Worldwide, if ▇▇▇▇▇ so demands.
(F) Bankruptcy, Incapacity or Death of a Shareholder. Anything
in this Agreement to the contrary notwithstanding, if any Shareholder dies or
becomes bankrupt or incapacitated (which incapacity results in the appointment
by the Court of a guardian to act on behalf of such Shareholder), then neither
such Shareholder nor his executor, heir, guardian, trustee or receiver (a "Legal
Substitute") shall be entitled thereafter to be offered or to purchase any
Shares pursuant to any of the provisions of this Agreement, and such
Shareholder's interests shall be disregarded for all such purposes hereof;
provided, however, that such Shareholder or his Legal Substitute, in such an
event, shall be bound, with respect to his Shares, to all of the restrictions
and obligations imposed under this Agreement. Notice of the death, bankruptcy or
incapacity of the affected Shareholder shall be given promptly after its
occurrence (which shall be within thirty days after the qualification of a
decedent or incompetent Shareholder's Legal Substitute in the event of a
Shareholder's death or incompetency or within ten days of any event constituting
bankruptcy) by the affected Shareholder to the Corporation and to the other
Shareholders. Such notice shall be deemed to be a notice of election to
effectuate a Share Exchange in accordance with the provisions of Section 4 of
this Agreement.
4. Exchange of Shares.
If on or after December 31, 1998, (i) ▇▇▇▇▇ is a licensed NFL Player's
Agent in good standing with the NFLPA and has no outstanding, pending or
threatened claims, suits or proceedings of any kind which, if resolved against
▇▇▇▇▇, could prevent him from acting in such capacity; (ii) ▇▇▇▇▇ is still
employed by the Corporation; and (iii) ▇▇▇▇▇ is listed with the NFLPA as a
Player's Contract Advisor on at least ten valid and enforceable Player
Agreements, the revenue from which has been assigned to the Corporation, then
either ▇▇▇▇▇ or the Company may, upon 15 days written notice, elect to
effectuate a share-for-share exchange of the Shares held by ▇▇▇▇▇ for shares of
Common Stock of Worldwide (the "Share Exchange"). The exchange ratio shall be
10,000 shares of Worldwide Common Stock (subject to adjustment in the event of
any stock split, reverse stock split, stock dividend or any other such equity
reconfiguration occurring after the date of this Agreement) for each Share held
by ▇▇▇▇▇. Worldwide agrees to reserve shares of its Common Stock for issuance
upon the effectuation of a Share Exchange.
5. Reassignment & Tender.
In the event ▇▇▇▇▇ ever ceases to be an employee of the Corporation during
the term of his Employment Agreement for any reason then, as of the date he
ceases to be so employed, ▇▇▇▇▇'▇ Assignment shall immediately lapse and be of
no further force or effect and all such revenues to be so derived from contracts
assigned to the Corporation by the ▇▇▇▇▇ Assignment which come due after such
cessation of employment, after deduction of applicable direct expenses, shall
revert to ▇▇▇▇▇. In addition, if such cessation of employment occurs after the
Share Exchange set forth in Section 4 hereof, ▇▇▇▇▇ shall be deemed to have
irrevocably offered to resell to the Company or its designees, that number of
shares of Worldwide Common Stock equal to the product of (A) 3,333.334 and (B)
the number of months (or portions thereof) remaining from such date until April
7, 2002 at a price of $.001 per share. If, however, the cessation of employment
occurs prior to the Share Exchange contemplated by Section 4 hereof, ▇▇▇▇▇ shall
be deemed to have irrevocably tendered his Shares to Worldwide in exchange for
that number of shares of Worldwide Common Stock derived by multiplying (x)
3,333.334 by (y) the number of months during which ▇▇▇▇▇ was employed by the
Corporation. Any fractional number of Shares derived by applying the formulae
set forth in this Section 5 will be rounded up to the next whole number.
6. Registration Rights.
(A) Demand Registration. After the Share Exchange date, Worldwide, upon
▇▇▇▇▇'▇ written demand (the "Demand Notice"), agrees to register on one
occasion, up to 70,000 of ▇▇▇▇▇'▇ shares of Common Stock of Worldwide (the
"Registrable Securities"). On such occasion, Worldwide shall file a Registration
Statement covering the Registrable Securities within thirty (30) days after
receipt of the Demand Notice and shall use its best efforts to have such
registration statement declared effective promptly thereafter.
(B) "Piggy-Back" Registration. In addition to the demand right of
registration, ▇▇▇▇▇ shall have the right for a period of three years after the
date of Share Exchange, to include shares of Common Stock of Worldwide as part
of any other registration of securities filed by Worldwide (other than in
connection with a transaction contemplated by Rule 145(a) promulgated under the
Act or pursuant to Form S-4 or Form S-8) provided, however, that the Chief
Executive Officer of Worldwide participates in such registration of shares. In
the event of such a proposed registration, Worldwide shall furnish ▇▇▇▇▇ with
not less than twenty days' written notice prior to the proposed date of filing
of such registration statement. The holders of the Registrable Securities shall
exercise the "piggyback" rights provided for herein by giving written notice,
within ten days after the receipt of Worldwide's notice of its intention to file
a registration statement. ▇▇▇▇▇ shall not be entitled to register pursuant to
piggyback registration rights in any twelve month period in excess of 10% of the
shares of Common Stock of Worldwide held by him unless another executive officer
of the Corporation is entitled to register a greater percentage of his shares.
(C) Terms. Worldwide shall bear all fees and expenses attendant to
registering the Registrable Securities, but ▇▇▇▇▇ shall pay any and all
underwriting commissions and the expenses of any legal counsel selected by ▇▇▇▇▇
to represent him in connection with the sale of the Registrable Securities and
any applicable transfer taxes. Worldwide agrees to use its prompt best efforts
to cause the filing required herein to become effective and to qualify or
register the Registrable Securities in such states as are reasonably requested
by ▇▇▇▇▇; provided, however, that in no event shall Worldwide be required to
register the Registrable Securities in a state in which such registration would
cause (i) Worldwide to be obligated to qualify to do business as a foreign
corporation in such State or to pay income, franchise or other similar taxes
solely as a result of such registration or to be subject to service of general
process, or (ii) the principal stockholders of Worldwide to be obligated to
escrow their shares of capital stock of Worldwide. Worldwide shall cause any
such registration statement to remain effective for a period of at least nine
consecutive months after the effective date of such registration statement.
(D) Indemnification. Worldwide shall indemnify ▇▇▇▇▇ against all loss,
claim, damage, expense or liability (including all reasonable attorneys' fees
and other expenses reasonably incurred in investigating, preparing or defending
against any claim whatsoever) to which any of them may become subject under the
Act, the Exchange Act or otherwise, arising from such registration statement
other than to the extent claims arise from information relating to ▇▇▇▇▇. ▇▇▇▇▇
shall indemnify Worldwide against all loss, claim, damage, expense or liability
(including all reasonable attorneys' fees and other expenses reasonably incurred
in investigating, preparing or defending against any claim whatsoever) to which
they may become subject under the Act, the Exchange Act or otherwise, arising
from information furnished by or on behalf of ▇▇▇▇▇ in writing, for specific
inclusion in such registration statement.
7. Books of Account.
Books and records of account of the Corporation shall be maintained at its
principal office, and true and accurate entries of all transactions had by and
on behalf of the Corporation shall be set down therein. Such books and records,
accounts and all other documents of the Corporation, at all times during normal
business hours, shall be open to the inspection of the Shareholders and their
authorized designees, who shall be entitled to make copies therefrom and to take
extracts thereof. Notwithstanding whether any of the parties hereto remains a
Shareholder, all such records and books of account, together with all files and
documents prepared on behalf of the Corporation, shall remain in the exclusive
possession of the Corporation.
8. Obligations of the Corporation; Conflict with By-Laws.
The parties hereto agree that all of the terms, covenants and
conditions of this Agreement shall supplement the By-Laws of the Corporation,
and, in the event of conflict therewith, shall prevail. The Corporation shall
not be deemed a party to, nor be directly obligated with respect to, any of the
voting, consent or approval provisions hereof; provided, however, that nothing
in this Section 8 or elsewhere set forth shall affect the rights and obligations
of the Shareholders among themselves under any of the provisions of this
Agreement. Wherever in any section of this Agreement reference is made to any
action to be taken or not be taken by the Corporation or otherwise or in
accordance with specified procedures, such reference shall be deemed to mean
that the Shareholders shall cast their votes and take such other action as
reasonably may be necessary or desirable or otherwise appropriate to cause the
Corporation to take or not to take such action or otherwise to effectuate such
provisions and in accordance with the procedures therein specified.
9. Binding Agreement; Assignment; Survival.
Except to the extent otherwise expressly provided herein, this Agreement
shall be binding upon the present and future parties hereto, their respective
successors, assigns, heirs, legatees and Legal Substitutes and all persons and
other entities who otherwise may derive any rights or interests hereunder from
or through any of the parties hereto, regardless, in any event, of whether any
certificate representing Shares bears the legend provided for in section 3(C)
hereof. Except to the extent otherwise expressly provided herein, this Agreement
shall inure to the benefit of the present and future parties hereto, their
respective heirs and legatees and, to the extent that a transfer of their Shares
is effected pursuant to the provisions of this Agreement, their assigns. All
agreements, covenants, representations, and warranties made herein shall survive
the execution and delivery of this Agreement and the agreements made pursuant
hereto or referred to herein.
10. Communications.
All notices, demands, requests, offers, approvals, consents, acceptances,
waivers, reports and other communications required or permitted hereunder shall
be in writing and
shall be deemed to have been duly given, received and dated when delivered
personally or, if sent by overnight courier, one day after being deposited with
such courier addressed to the parties at their addresses respectively set forth
above or at such other address as any party may give by notice. Any party may
change its address by sending notice thereof to the other parties in the manner
prescribed above, except that notice of change of address shall not be effective
until actually received.
11. Construction; Headings; Word Meanings.
This Agreement, and all related agreements, instruments and documents,
shall be construed and enforced in accordance with the laws of the State of New
York without giving effect to the principles of conflict of laws. Headings and
titles are for convenience of reference only and shall not control the
construction or interpretation of any provision hereof.
12. No Third Party Beneficiaries.
Nothing in this Agreement shall be construed as conferring upon any person
or other entity, other than the parties hereto and their Legal Substitutes (to
the extent provided herein), any right, remedy or claim under or by reason of
this Agreement.
13. Entire Agreement; Modification; Consents; Waivers.
This Agreement and the agreements and instruments referred to herein
represent the entire agreement of the parties with respect to the subject matter
hereof and no interpretation, change, termination or waiver of or extension of
time for performance under, any provision of the Agreement shall be binding upon
any party unless in writing and signed by the party intended to be bound
thereby. Any provision of this Agreement can be modified if consented to by all
of the parties hereto. Receipt by any party of money or other consideration due
under this Agreement, with or without knowledge of breach, shall not constitute
a waiver of such breach or of any provision of this Agreement. Except as
otherwise provided herein, no waiver of or other failure to exercise any right
under, or default or extension of time for performance under, any of the
provisions of this Agreement shall affect the right of any party to exercise any
subsequent right under or otherwise enforce said provision or any other
provision hereof or to exercise any right or remedy in the event of any other
default, whether or not similar. Without limitation to the generality of the
foregoing and except as otherwise provided herein, the failure of any party to
exercise any right of first refusal or any Put or Call hereunder (hereinafter
collectively referred to as "share rights") shall not in any way constitute a
waiver of or otherwise affect such party's right to exercise any of the other
share rights or to exercise any subsequent said rights to which such party may
otherwise be entitled hereunder.
14. Severability.
The invalidity or unenforceability of any particular provision of this
Agreement shall not affect any of the other provisions hereof and this Agreement
shall be construed in all respects as if such invalid or unenforceable provision
were omitted.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and date first set forth above.
WORLDWIDE FOOTBALL MANAGEMENT, INC.
By: /s/▇▇▇▇ ▇▇▇▇▇▇▇, Chairman of the Board
WORLDWIDE ENTERTAINMENT & SPORTS CORP.
By:/s/ ▇▇▇▇ ▇▇▇▇▇▇▇, President
/s/ ▇▇▇▇ ▇▇▇▇▇