EXHIBIT 4
STOCKHOLDERS' AGREEMENT
BY AND AMONG
XXXXXXX X. XXXXX
XXXXXX X. XXXXXX
XXXXXX XXXXXX
SKYEPHARMA PLC
XXXXXXX XXXXXX
FIFTH AVENUE CAPITAL, INC.
AND
VITAL LIVING, INC.
(A NEVADA CORPORATION)
DATED: AUGUST 20, 2003
STOCKHOLDERS' AGREEMENT
TABLE OF CONTENTS
Page
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1. CORPORATE GOVERNANCE 3
3
1.1. Board of Directors.
6
1.2. Obligations of the Company.
6
1.3. Articles of Incorporation and the By-Laws.
2. MISCELLANEOUS 6
2.1. Term. 6
2.2. No Conflicting Agreements. 6
2.3. Injunctive Relief. 6
2.4. Notices. 7
2.5. Governing Law. 8
2.6. Headings. 8
2.7. Entire Agreement; Amendment. 8
2.8. No Waiver. 8
2.9. Counterparts. 8
STOCKHOLDERS' AGREEMENT
AGREEMENT dated as of August 20, 2003 by and among XXXXXXX X. XXXXX, an
individual having an office at 0000 Xxxxx 00xx Xxxxxx, Xxxxxxx, XX 00000,
("XXXXX"); XXXXXX X. XXXXXX, an individual having an office at 0000 Xxxxx 00xx
Xxxxxx, Xxxxxxx, XX 00000 ("XXXXXX"), XXXXXX XXXXXX, an individual having an
office at 0000 Xxxxx 00xx Xxxxxx, Xxxxxxx, XX 00000 ("HANNAH"), SKYEPHARMA PLC,
a company incorporated under the laws of England and Wales having its office at
000 Xxxxxxxxxx, Xxxxxx, Xxxxxxx X0X 0XX ("Skye"), FIFTH AVENUE CAPITAL INC, a
corporation having its offices at 00 X. 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000
("Fifth Avenue Capital"), and XXXXXXX XXXXXX, an individual having his office at
00 X. 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 ("Xxxxxx") and VITAL LIVING, INC., a
Nevada corporation having an office at 0000 Xxxxx 00xx Xxxxxx, Xxxxx 000,
Xxxxxxx, XX 00000-0000 (THE "COMPANY"). Edson, Benson, and Hannah and are
collectively referred to as the "FOUNDERS Group", and Fifth Avenue Capital and
Xxxxxx are collectively referred to herein as the "XXXXXX GROUP" and Skye and
the Xxxxxx Group are together referred to herein as the "ENI GROUP". Each of the
parties hereto (other than the Company) and any other person who shall hereafter
become a party to or agree to be bound by the terms of this agreement (the
"Agreement") is sometimes referred to as a "STOCKHOLDER" and all of such parties
are referred to as the "STOCKHOLDERS."
W I T N E S S E T H:
WHEREAS, the Company, VLEN Acquisition Corp., Inc., a wholly owned
subsidiary of the Company and e-nutriceuticals, Inc., a Delaware corporation
("e-nut") are parties to a Merger Agreement dated August 20, 2003 (the "Merger
Agreement"),
WHEREAS, the execution and delivery of this Agreement is a condition to
the closing of the Merger Agreement,
WHEREAS, (i) pursuant to the Merger Agreement, the members of the ENI
Group listed on the signature pages hereto will be issued an aggregate of
23,065,123 shares of Common Stock ("ACQUISITION STOCK"); of which 8,860,575
shares of Acquisition Stock of the Xxxxxx Group are being held in escrow
pursuant to the terms of the Merger Agreement and a certain Securities Escrow
Agreement of even date herewith (the "Escrow Agreement") and (ii) Skye will be
purchasing 1,000,000 shares of Series D Convertible Preferred Stock (the
transactions described by clauses (i) and (ii), the "Transactions");
WHEREAS, as of the closing of the Transactions, the holdings of Common
Stock and options, warrants or convertible securities to purchase Common Stock,
and other voting securities of the Company (collectively "Shares") by the
Founders Group and the ENI Group) will be as follows:
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STOCKHOLDER NAME NUMBER OF SHARES NUMBER OF OPTIONS, WARRANTS OR
CONVERTIBLES
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Xxxxxxx X. Xxxxx 4,046,950 1,000,000
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Xxxxxx X. Xxxxxx 30,000 6,310,000
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Xxxxxx Xxxxxx 536,900 Zero
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Fifth Avenue Capital, Inc. 8,860,575 0
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Xxxxxxx Xxxxxx * 30,000
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Skye 14,204,548 1,000,000
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*See Fifth Avenue Capital, Inc.
WHEREAS, the parties hereto deem it in their best interests and in the
best interests of the Company to provide consistent and uniform management for
the Company and to regulate certain of their rights in connection with their
interests in the Company, and desire to enter into this Agreement in order to
effectuate those purposes.
NOW, THEREFORE, in consideration of the premises and of the covenants,
terms and conditions herein contained, the parties hereto mutually agree as
follows:
1. CORPORATE GOVERNANCE
1.1. BOARD OF DIRECTORS.
(A) NUMBER OF DIRECTORS. The Company shall be governed by a
Board of Directors consisting of nine (9) members, with three vacancies existing
at the consummation of the Transactions.
(B) NOMINATION AND ELECTION OF DIRECTORS. The following
procedures shall govern the nomination and election of directors of the Company:
(i) For so long as the Founders Group shall beneficially
own, in the aggregate, at least 65% of the Shares held by them on the
date hereof, after the consummation of the Transactions, they shall be
entitled to nominate and have elected four (4) directors acceptable to
them in their sole discretion (the "Founders Directors").
(ii) For so long as the Xxxxxx Group shall beneficially
own at least 65% of the Shares held by them on the date hereof, after
the consummation of the Transactions, they shall be entitled to
nominate and have elected one (1) director (the "Xxxxxx Director");
(iii) For so long as Skye shall beneficially own at least
65% of the Shares held by Skye on the date hereof after the
consummation of the Transactions, Skye
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shall be entitled to nominate and have elected one (1) director (the "Skye
Director", and, together with the Xxxxxx Director, the "ENI Directors").
(C) BOARD OF DIRECTORS. The Board of Directors of the Company
shall consist of the following seven members:
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NAME OF DIRECTOR TYPE OF DIRECTOR
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Xxxxxxx X. Xxxxx Founders Director
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Xxxxxx X. Xxxxxx Founders Director
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Xxxxxx X. Xxxx Founders Director
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Xxxxxx Xxxxxx Founders Director
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Xxxxx Xxxxx Independent Director
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Xxxxxx Xxxxxx Independent Director
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Xxxxxx X. Quick III Independent Director
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The ENI Directors shall be appointed in accordance with Section 1.1(e)
hereto subsequent to the consummation of the Transactions.
For purposes hereof, the term "Independent Director" shall mean a
person who is independent of the Company's management and who is not a director,
officer, in the Group of, or an employee of any Stockholder. "Group" shall mean,
in the case of any Stockholder, such Stockholder and (i) all affiliates of such
Stockholder, (ii) all partners of such Stockholder if such Stockholder is a
partnership, (iii) any person to which such Stockholder transfers all or
substantially all of its assets or any entity into which such Stockholder
merges, and (iv) in the case of a Stockholder that is an individual, the spouse
and lineal descendants of such Stockholders, any trust for the benefit of such
spouse or any such lineal descendant, or any other family member of such
Stockholder.
(D) REMOVAL OF DIRECTORS. Any director of the Company may be
removed from the Board in the manner allowed by law and the Company's
Certificate of Incorporation or By-Laws, except as otherwise provided in this
Section 1.1(d). With respect to the Founders Directors, the Xxxxxx Director and
the Skye Director, each holder of Shares agrees not to take any action or to
cause the Company to take such action to remove, with or without cause, such
director of the Company. Notwithstanding the foregoing, the Xxxxxx Group and/or
the Xxxxxx Director shall at all times have the right to recommend the removal,
with or without cause, of any Xxxxxx Director; Skye and/or the Skye Director
shall at all times have the right to recommend the removal, with or without
cause, of the Skye Director; and the Founders Group and the Founders Directors
shall have the right to recommend the removal, with or without cause, of any
Founders Directors. If the removal of any director is recommended as provided in
the immediately preceding sentence, then the Stockholders shall immediately
cause a special meeting of stockholders to be held, or shall act by written
consent without a meeting, for the purpose of removing such director, and each
Stockholder agrees to vote all its Shares, or to execute a written consent in
respect of all such Shares, for the removal of such director.
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(E) VACANCIES. If at any time a vacancy is created or exists on
the Board of Directors, the remaining directors (if any) representing the
Stockholder whose Board seat is vacant shall have the right to designate and
elect the person to fill such vacancy; subject to consultation with the other
parties hereto, it being acknowledged that the final determination shall be made
by the Stockholder whose board position is affected by such vacancy. If no
directors representing the Stockholder remain as a result of such vacancy, the
Stockholder shall have the right to designate and elect the person to fill such
vacancy. All Stockholders shall vote in favor of electing such designated
director to fill the vacancy and all such persons shall take the necessary
actions to amend the by-laws to reflect the provisions of this Agreement.
(F) COVENANT TO VOTE. Each of the Stockholders agrees to vote,
in person or by proxy, all of the Shares beneficially owned by such Stockholder
whether currently owned or hereinafter acquired (which for all purposes shall
include all Acquisition Shares held pursuant to the Escrow Agreement unless
Acquisition Shares are returned to the Company under the terms thereof, in which
event those returned shares shall be excluded), at any annual or special meeting
of stockholders of the Company called for the purpose of voting on the election
of directors or by consensual action of stockholders without a meeting with
respect to the election of directors, in favor of the election of the directors
nominated by Skye, the Xxxxxx Group and the Founders Group, respectively, as the
case may be, in accordance with Section 1.1(b) hereof. Each Stockholder shall
vote the Shares owned by such Stockholder and shall take all other actions
necessary to ensure that the Company's Articles of Incorporation and By-Laws do
not at any time conflict with the provisions of this Agreement. Each Stockholder
agrees that such Stockholder shall not deposit any Shares in a voting trust or
subject the Shares to any agreement, arrangement or understanding with respect
to the voting of the Shares of Common Stock inconsistent with this Agreement.
(G) QUORUM. No action shall be taken at any meeting of the
Board of Directors of the Company, except for the adjournment of such meeting,
unless a quorum shall be present and included at such meeting shall be one
Independent Director. For purposes of a quorum, any director may be present at
any meeting in person, by means of telephone or similar communications equipment
by means of which each person participating in the meeting can hear and speak to
each other or, to the extent permitted under applicable law, by proxy or by
nominee director. No action shall be taken at any meeting of stockholders of the
Company unless a majority of the Shares beneficially owned by the Founders Group
and Skye are represented at the meeting, in person or by proxy.
(H) COMMITTEES OF THE BOARD. The Board shall appoint such
committees, including an audit committee and a compensation committee, as shall
be permissible under applicable provisions of the Business Corporation Law of
the State of Nevada and as at all times the Board shall deem reasonable and
necessary.
(I) SPECIAL MEETINGS OF DIRECTORS. Special meetings of the Board
may be called by the President of the Company and shall be called by
the President of the Company or the Secretary of the Company upon the written
request of any Director. To the extent necessary, the parties hereto agree, as
Stockholders, to approve any amendment to effectuate the foregoing.
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(J) SPECIAL MEETINGS OF STOCKHOLDERS. Special meetings of
stockholders may be called by the Board and shall be called by the President of
the Company or the Secretary of the Company upon the written request of any
Director. To the extent necessary, the parties hereto agree, as Stockholders, to
approve any amendment to effectuate the foregoing.
(K) BOARD OF DIRECTORS AND OFFICERS OF SUBSIDIARIES. The
composition of the board of directors and officers of e-nut shall require the
approval of a majority of the Directors.
1.2 OBLIGATIONS OF THE COMPANY. The Company agrees to use its best
efforts to ensure that the rights granted hereunder are effective and that the
parties hereto enjoy the benefits hereof. Such actions include, without
limitation, the use of the Company's best efforts to cause the nomination and
election of the directors designated as provided above.
1.3 ARTICLES OF INCORPORATION AND THE BY-LAWS. The Articles of
Incorporation and the By-Laws shall be amended as necessary and appropriate to
give effect to the provisions set forth in this Agreement.
2. MISCELLANEOUS
2.1. TERM. This Agreement shall terminate on the date of the first to
occur of the following events: (i) with respect to any Stockholder, at such
point in time when such Stockholder and its Group no longer beneficially owns
50% of the Shares beneficially owned by such Stockholder on the date hereof
after consummation of the Transactions; (ii) Bankruptcy, receivership, or
dissolution of the Company; (iii) the sale, lease, assignment or other transfer
of all or substantially all of the assets of the Company to a third party,
whether effected through an asset transaction, a stock transaction, a Merger, or
otherwise; (iv) the voluntary agreement of all the parties who are then bound by
the terms hereof; (v) the acquisition of all the Shares by one of the
Stockholders; or (vi) three years from the date of this Agreement.
2.2. NO CONFLICTING AGREEMENTS.Each party hereto represents and
warrants to the other parties that it is not party to any other voting agreement
with respect to the Company's Common Stock which would conflict with its duty to
vote its shares as required under this Agreement and its other obligations
hereunder. To the extent that conflicting obligations result from contractual
obligations arising from agreements or understanding either before or after the
date of this Agreement, each party including the Company covenants to effect the
provisions of this Agreement.
2.3. INJUNCTIVE RELIEF. It is hereby agreed and acknowledged that it
will be impossible to measure in money the damages that would be suffered if the
parties fail to comply with any of the obligations herein imposed on them and
that in the event of any such failure, an aggrieved person will be irreparably
damaged and will not have an adequate remedy at law. Any such person shall,
therefore, be entitled to injunctive relief, including specific performance, to
enforce such obligations, and if any action should be brought in equity to
enforce any of the
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provisions of this Agreement, none of the parties hereto shall raise the defense
that there is an adequate remedy at law.
2.4. NOTICES. All notices, statements, instructions or other documents
required to be given hereunder, shall be in writing and shall be given either by
hand delivery, by overnight delivery service, by facsimile transmission or by
mailing the same in a sealed envelope, first-class mail, postage prepaid and
either certified or registered, return receipt requested, addressed as follows:
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IF TO THE FOUNDERS GROUP, TO: Vital Living, Inc.
0000 Xxxxx 00xx Xxxxxx
Xxxxx 000
Xxxxxxx, XX 00000-0000
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WITH A COPY TO THEIR COUNSEL: Xxxxx X. Xxxx, Esq.
Xxxxx Xxxxxx & Xxxx LLP
0000 Xxxxxx xx xxx Xxxxx
Xxx Xxxxxxx, XX 00000
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IF TO THE XXXXXX GROUP, SEND NOTICES TO Xxxxxxx Xxxxxx
THEM AT THE NOTICE ADDRESS GIVEN ON c/o Fifth Avenue Capital
THE SIGNATURE PAGE HEREOF: 00 X. 00xx Xxxxxx
Xxx Xxxx, XX 00000
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WITH A COPY TO THEIR COUNSEL: Xxxxxxx Xxxxxxxxx, Esq.
Xxxxxx Xxxxx Xxxxxxx & Xxxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
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IF TO SKYE: Attn: Company Secretary
SkyePharma PLC
000 Xxxxxxxxxx
Xxxxxx, Xxxxxxx, X0X 0XX
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WITH A COPY TO THEIR COUNSEL: Xxxxxxx X. Xxxxxxxx, Esq.
Xxxxxxxx & Xxxxxxxx LLP
0 Xxx Xxxxxx Xxxx
Xxxxxx XX0X 0XX, Xxxxxxx
==============================================================================================
and to the other parties at their addresses reflected in the stock records of
the Company. Each Stockholder, by written notice given to the Company in
accordance with this Section 2.4 may change the address to which notices,
statements, instruction or other documents are to be sent to such Stockholder.
All notices, statements, instructions and other documents hereunder that are
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(i) mailed shall be deemed to have been given on the date of mailing, (ii) sent
by hand delivery or by facsimile transmission shall be deemed to have been given
when received, or (iii) sent by overnight delivery service shall be deemed to
have been given one business day after sent. Whenever pursuant to this Agreement
any notice is required to be given by any Stockholder to any other Stockholder
or Stockholders, such Stockholder may request from the Company a list of
addresses of all Stockholders of the Company, which list shall be promptly
furnished to such Stockholder.
2.5. GOVERNING LAW. Regardless of the place of execution, this
Agreement shall be governed by and construed in accordance with the laws of the
State of New York, applicable to contracts made and to be performed entirely
within such state.
2.6. HEADINGS. All headings are inserted herein for convenience only
and do not form a part of this Agreement.
2.7. ENTIRE AGREEMENT; AMENDMENT. This Agreement and the other
agreements referenced herein contain the entire agreement among the parties
hereto with respect to the transactions contemplated herein and supersede all
prior written agreements including any voting agreements or arrangements and
negotiations and oral understandings, if any, and this Agreement may not be
amended, supplemented or discharged except by an instrument in writing signed by
all the Stockholders. Concurrently with such amendment or modification of this
Agreement the Articles of Incorporation and By-Laws of the Company shall be
amended by necessary corporate action. In the event that any Stockholder, or the
Company shall be required, as a result of the enactment, amendment or
modification, subsequent to the date hereof, of any applicable law or
regulations, or by the order of any governmental authority, to take any action
which is inconsistent with or which would constitute a violation or breach of
any terms of this Agreement, then the Stockholders, and the Company shall use
their best efforts to negotiate an appropriate amendment or modification of, or
waiver of compliance with, such terms.
2.8. NO WAIVER. No failure to exercise and no delay in exercising any
right, power or privilege of a party hereunder shall operate as a waiver nor a
consent to the modification of the terms hereof unless given by that party in
writing.
2.9. COUNTERPARTS. 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. Fax copy signatures shall
be given the same effect as original signatures.
[rest of page left blank intentionally - next page is signature page]
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IN WITNESS WHEREOF, the parties here have caused this Agreement to be
duly executed on the date first written above.
SKYEPHARMA PLC VITAL LIVING, INC.
By: /s/ Xxxxxx Xxxxxxxxx By: /s/ Xxxxxxx X. Xxxxx
----------------------------- -------------------------------
Xxxxxxx X. Xxxxx, President
/s/ Xxxxxxx Xxxxxx By: /s/ Xxxxxx X. Xxxxxx
-------------------------------- -------------------------------
Xxxxxxx Xxxxxx, Individually Xxxxxx X. Xxxxxx, Executive Vice
President
/s/ Xxxxxxx X. Xxxxx FIFTH AVENUE CAPITAL INC.
--------------------------------
Xxxxxxx X. Xxxxx, Individually By: /s/ Xxxxxxx Xxxxxx
-------------------------------
/s/ Xxxxxx X. Xxxxxx Xxxxxxx Xxxxxx, President
--------------------------------
Xxxxxx X. Xxxxxx, Individually
/s/ Xxxxxx Xxxxxx
--------------------------------
Xxxxxx Xxxxxx, Individually
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