Exhibit 99.5
TDT DEVELOPMENT, INC.
STOCKHOLDERS' AGREEMENT
THIS STOCKHOLDERS' AGREEMENT, dated as of May 16, 2002 (the "Agreement") by
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and among Xxxxxxxxxxx X. Xxxxx and Xxxx Xxxxx, individuals residing at 000
Xxxxxxxxx Xxxx, Xxxxxxxxxxxxx, Xxx Xxxxxx 00000 (collectively, the "Careys"),
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and Stanford Venture Capital Holdings, Inc., a Delaware corporation ("Stanford")
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(Xxxxx and Stanford hereinafter referred to individually as "Stockholder" or
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collectively as "Stockholders"), and TDT Development, Inc., a Nevada corporation
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(the "Company").
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W I T N E S S E T H
WHEREAS, the Careys are the owners and holders of 5,031,250 shares of the
Company's common stock, par value $0.0001 per share (the "Common Stock");
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WHEREAS, Stanford is the owner and holder of the number of shares of the
Company's Series A $1.50 Convertible Preferred Stock, par value $0.0001 per
share (the "Series A Preferred Stock") set forth in the Securities Purchase
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Agreement by and among Stanford, the Company, Stronghold Technologies, Inc., Xx.
Xxxxx and Xxxxxx Bortolatti, dated May 15, 2002 (the "Securities Purchase
Agreement"), each share of which entitles the holder thereof to such number of
votes as represented by the number of shares of Common Stock issuable upon
conversion of the Series A Preferred Stock on the record date set for such
voting and warrants to acquire the number of shares of Common Stock set forth in
the Securities Purchase Agreement (for purposes of this Agreement, all shares of
the Common Stock, Series A Preferred Stock or other capital stock of the
Company, warrants, options, and other rights to acquire additional capital stock
of the Company, and the capital stock of the Company issued or issuable upon the
conversion or the exercise of any of the foregoing, held by a Stockholder or
otherwise entitled to by such Stockholder shall be referred to collectively and
interchangeably as the "Covered Securities"); and
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WHEREAS, the parties desire to state and define their rights, interests and
obligations among each other, all as more particularly set forth and provided
hereinafter, and make provisions for the management, conduct and control of the
business operations of the Company, all as more particularly set forth and
provided hereinafter.
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration herein, it is agreed as follows:
1. RESTRICTIONS ON TRANSFER OF STOCK
(a) CONSENT PRIOR TO SALE.
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(i) The Careys may not sell, assign, pledge, hypothecate or
otherwise transfer or encumber (any of the foregoing acts, used either
as a verb or noun, "Transfer"), in any manner or by any means
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whatever, any interest in all or part of the Covered Securities held
by them, other than pursuant to the Lock Up Agreement dated May 16,
2002.
(ii) Notwithstanding the foregoing, the Careys may Transfer their
Covered Securities during such two-year restriction period pursuant to
the co-sale rights in Section 5 hereof where such sale is initiated by
Stanford.
(b) ONGOING OBLIGATIONS. Notwithstanding any such consent, such
Transfer shall in no manner relieve the Careys of any of their ongoing
obligations under this Agreement, if any, and any transferee shall accept such
stock subject to all of the restrictions, terms and conditions of this Agreement
as if such transferee were a party hereto and such transferee shall become a
signatory hereof.
(c) REGISTRATION OF SECURITIES. Each Stockholder acknowledges that the
Covered Securities held by such Stockholder have not been registered under the
Securities Act of 1933, as amended (the "Securities Act"), or qualified or
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registered under any securities laws of any state and therefore, cannot be sold
unless said securities are subsequently registered under the Securities Act or
an exemption from such registration is available. Such Covered Securities may
not be sold or transferred unless registered under the Securities Act or are
entitled to exemption therefrom and any such sale or transfer is to be
accompanied by an opinion of counsel to the Company to that effect.
(d) LEGENDS. Each certificate for the shares of stock of the Company
now or hereafter issued shall bear the following legends:
"THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS AND
CONDITIONS OF AN AGREEMENT AMONG THE STOCKHOLDERS OF THE COMPANY, DATED AS OF
MAY 16, 2002, A COPY OF WHICH IS ON FILE AT THE OFFICES OF THE COMPANY."
"THESE SECURITIES (INCLUDING ANY UNDERLYING SECURITIES) HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THE SECURITIES MAY NOT
BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THE SECURITIES UNDER SAID
ACT OR AN OPINION OF COUNSEL OR OTHER EVIDENCE REASONABLY SATISFACTORY TO THE
COMPANY THAT SUCH REGISTRATION SHALL NO LONGER BE REQUIRED."
2. VOTING
(a) IN GENERAL. Each Stockholder shall appear, or cause the record owner to
of the Covered Securities which have voting rights (the "Voting Securities") to
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appear, in person, or by proxy, at any annual, special or adjourned meeting of
the stockholders of the Company (or in connection with any written consent of
the holders of Covered Securities) and vote, or cause
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to be voted, the Voting Securities owned by such Stockholder upon any matters so
as to be consistent, and not in conflict, with the terms of this Agreement.
(b) VOTE WITH RESPECT TO COMPANY OPTION TO PURCHASE OFFERED SHARES. With
respect to any vote on any question concerning the Company's election to
exercise its option to purchase any Offered Shares (as defined hereafter)
pursuant to Section 4, the Selling Stockholder (as defined hereafter) shall
vote, or cause to be voted, such Selling Stockholder's Voting Securities as
directed by the Remaining Stockholder (as defined hereafter) at such meeting and
if such Selling Stockholder is a director at the time of such sale, shall
abstain from voting as a director on such proposal if presented to the Board of
Directors of the Company.
(c) OBLIGATION TO VOTE UPON DEATH, DISSOLUTION OF TRANSFER AS AN OPERATION
OF LAW. The legal representative of the estate of a Stockholder upon the death
of such Stockholder or of a Stockholder upon the dissolution of such Stockholder
or any transferee by operation of law, shall vote, or cause to be voted, on each
matter requiring the vote of the Voting Securities owned by each, in the same
manner as the Voting Securities owned by the other Stockholders.
(d) VOTE UPON OCCURRENCE OF MATERIAL ADVERSE EVENTS. The Careys shall vote
their Voting Securities as directed by Stanford in a vote to remove and replace
the members of the Board of Directors with designees nominated by Stanford if
there has occurred any of the following events (each a "Material Adverse
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Event"), and the Careys shall continue to vote in such a manner until such time
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as the matter(s) or circumstance(s) or other actions or inactions creating the
Material Adverse Event are cured and/or there is no existence of any Material
Adverse Event:
(i) Material breach of any covenant, representation or warranty by the
Company or Xx. Xxxxx as contained in the Securities Purchase Agreement
dated as of the even date herewith and the other Primary Documents as such
term is defined in the Securities Purchase Agreement;
(ii) Dissolution, termination of existence, insolvency or business
failure of the Company or any of its subsidiaries or the appointment of a
receiver, trustee or custodian, for all or any part of the property of,
assignment for the benefit of creditors by, or the commencement of any
proceeding by or against the Company or any of its subsidiaries under any
reorganization, bankruptcy, insolvency, arrangement, readjustment of debt,
dissolution or liquidation law or statute of any jurisdiction;
(iii) The termination of employment of Xx. Xxxxx for cause by the
Company or without cause by Xx. Xxxxx, unless a replacement satisfactory to
Stanford at the sole discretion of Stanford is employed by the Company
within 90 days of such termination;
(iv) Any material default or event of default under any credit
arrangement, facility or borrowing of the Company or any of its
subsidiaries that continues to exist after the expiration of any applicable
period to cure such default or event of default;
(v) Any material non-payment of federal, state or local income, excise
or sales tax by the Company or any of its subsidiaries when due, as such
date may be extended,
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or the date of such payment otherwise permitted or allowed to be extended
by rule, regulation, adjudication or operation of law;
(vi) The non-payment of any key man insurance, in such benefit amounts
and under policies as approved by the Board of Directors of the Company,
pursuant to which the insured is Xx. Xxxxx and the beneficiary is the
Company; or
(vii) The material non-compliance by the Company with the Securities
Act and/or the Securities Exchange Act of 1934, as amended.
In the event that Xx. Xxxxx voluntarily terminates his employment with the
Company or such employment is terminated for cause, the voting arrangement
provided in this Section 2(d) shall remain effective until the third anniversary
of such termination of employment. In the event that the Company terminates Xx.
Xxxxx'x employment without cause, the voting arrangement provided in this
Section 2(d) shall remain effective until after 180 days following such
termination of employment.
3. BOARD OF DIRECTORS
(a) RIGHT TO NOMINATE DIRECTORS. The Board of Directors of the Company
shall consist of five directors. Xxxxxxxxx and the Careys shall have the right
to nominate one and four of the members of the Board, respectively. Any vacancy
created due to the death, removal or resignation of a director nominated by one
Stockholder may only be replaced with a nominee designated by such Stockholder
(all the nominees designated pursuant to this Section 3(a) collectively, the
"Stockholders' Nominees") in accordance with Nevada law.
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(b) VOTING ON MEMBERS OF THE BOARD OF DIRECTORS. So long as this Agreement
is in effect, each Stockholder agrees to vote such Stockholder's Voting
Securities in favor of each of the Stockholders' Nominees to serve as members of
the Board of Directors of the Company.
4. RIGHT OF FIRST REFUSAL
(a) IN GENERAL. Subject to the restrictions set forth in Section 1(a), in
the event a Stockholder shall desire to sell any Covered Securities held by such
Stockholder, such Stockholder may only sell all, or part, of such securities, in
the following manner:
(b) NOTICE TO SELL. If any Stockholder shall desire to Transfer any of its
Covered Securities then such Stockholder (the "Selling Stockholder") shall give
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written notice of the proposed transaction, by at least 30 days prior to the
effective date of such proposed transaction (the "Notice to Sell"), to the other
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Stockholder (the "Remaining Stockholder") and to the Company, offering to sell
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to the Remaining Stockholder, all of such Stockholder's Covered Securities.
(i) The Notice to Sell shall be in writing and shall include the
number and kind of shares of Covered Securities which the Selling
Stockholder desires to sell or otherwise dispose of (the "Offered Shares"),
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the name and address of any prospective third party desiring to purchase
the Offered Shares (the "Transferee"), the terms of such sale or
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disposition,
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including the consideration offered, and a copy of any written agreement or
other document setting forth the information herein required.
(c) NOTICE OF ACCEPTANCE. The Remaining Stockholder may exercise the option
to purchase all or part of the Offered Shares by causing a written notice to be
served upon the Selling Stockholder (the "Notice of Acceptance") within 15 days
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after the receipt of the Notice to Sell. The exercise of such option by such
Remaining Stockholder shall be conditioned upon the Remaining Stockholder
agreeing to hold the Offered Shares so acquired subject to the terms and
conditions of this Agreement.
(d) PURCHASE OF REMAINING SHARES BY COMPANY. If the Remaining Stockholder
for any reason shall fail or refuse to exercise the option to purchase all or
part of the Offered Shares in accordance with Section 4(d), then the Company
shall have the option in its sole discretion to purchase any or all of the
Offered Shares not purchased by the Remaining Stockholder. Within 30 days of the
giving of the Notice to Sell, the Remaining Stockholder and the Board of
Directors of the Company shall cause the Board of Directors of the Company to
vote on the exercise of said option, and by a resolution thereof and shall
deliver a Notice of Acceptance, if applicable, within 10 days after such
meeting.
(e) FAILURE TO EXERCISE OPTIONS. If the Remaining Stockholder and the
Company fail to exercise the option to purchase all of the Offered Shares, the
Selling Stockholder may sell, encumber or otherwise dispose of the Offered
Shares to the prospective Transferee named in the Notice to Sell in strict
accordance with the terms therein stated, at a price not less than, and on terms
and conditions not more favorable to the Transferee than, are set forth in the
Notice to Sell; provided that, if the Transferee shall agree in writing, prior
to such transfer, with the Company, the Remaining Stockholder and the Selling
Stockholder, as may be applicable, to be bound by all the terms and provisions
of this Agreement as though such transferee were an original signatory hereto.
(f) PURCHASE PRICE. If the option to purchase the Offered Shares shall be
made, the purchase price shall be that as offered by such third party, except
that if the Transferee is an exchange, the purchase price shall be the closing
bid price of the Offered Shares on such exchange on the date of the Notice to
Sell.
(g) CLOSING. The Notice of Acceptance shall, for the purpose of this
Agreement, be a written notice delivered in person or by registered or certified
mail, return receipt requested, to the Selling Stockholder; said notice shall
specify a place for the closing, and an hour and a date not earlier than 30 days
or later than 60 days after the sending of such Notice of Acceptance as the time
for closing.
(h) PAYMENT OF DEBTS. In the event that at the time of purchase, the
Selling Stockholder shall be indebted to the Company for any sum whatsoever, the
amount of each indebtedness shall be paid to the Company by the Selling
Stockholder at closing, or in the event that the purchaser of the Offered Shares
shall be the Company, then the amount of such indebtedness shall be deducted
from the purchase price to be paid by the Company. In the event that the Company
shall be indebted to the Selling Stockholder at the time of purchase, then the
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amount of such indebtedness shall be paid by the Company, in addition to the
purchase price to be paid for the shares of stock of the Selling Stockholder.
5. CO-SALE RIGHTS
Upon receipt of the Notice to Sell, the Remaining Stockholder may, by
giving written notice to the Selling Stockholder within 15 days after the
receipt of the Notice to Sell, require the Selling Stockholder to request that
the proposed purchaser or transferee extend its offer to the Remaining
Stockholder permitting the Remaining Stockholder to Transfer its Covered
Securities in the same proportion and on the same terms and for the same type of
consideration as the Covered Securities to be sold by the Selling Stockholder.
If the proposed purchaser or transferee refuses to extend its offer to the
Remaining Stockholder, unless the Remaining Stockholder consents in writing, the
Selling Stockholder shall only be permitted to sell and accept such an offer by
the proposed purchaser or transferee provided that the number of Covered
Securities to be purchased from the Selling Stockholder is reduced on a pro-rata
basis so as to permit the Remaining Stockholder to participate in such sale. The
total amount of Covered Securities to be sold hereunder by each Stockholder
shall be equal to (A) the total number amount of Covered Securities to be sold
to the proposed purchaser or transferee and which such proposed purchaser or
transferee is willing to purchase, multiplied by (B) a fraction, the numerator
of which shall be equal to the total amount of Covered Securities to be sold by
each Stockholder (the Selling Stockholder or the Remaining Stockholder, as
applicable), and the denominator of which is equal to the total amount of
Covered Securities that both the Stockholders desire to sell hereunder. The
consideration shall be allocated between the Stockholders on a pro-rata basis in
accordance with the amount of Covered Securities they are selling. If the
Remaining Stockholder fails to deliver a written notice to the Selling
Stockholder of its intention to participate in such sale within the time period
prescribed herein, the Remaining Stockholder will be deemed to have waived its
tag-along rights hereunder with respect to such Transfer.
6. DEATH OR DISSOLUTION OF A STOCKHOLDER
(a) In the event of the death or the dissolution of a Stockholder (the
"Disappearing Stockholder"), the Company and/or the Stockholder surviving such
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death or dissolution, as applicable (the "Surviving Stockholder"), shall have
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the option to purchase, and the estate of the Disappearing Stockholder or the
Disappearing Stockholder upon dissolution shall sell if such option is
exercised, all of the Covered Securities owned by the Disappearing Stockholder.
The Company and/or the Surviving Stockholder, severally or jointly, may elect to
purchase the Disappearing Stockholder's Covered Securities, which purchase shall
be made under the following terms and conditions:
(b) NOTICE OF ACCEPTANCE. The Surviving Stockholder and the Company shall
provide a Notice of Acceptance in accordance with Sections 4(c) and 4(d),
respectively.
(c) PURCHASE PRICE. The purchase price to be paid for the Covered
Securities of the Disappearing Stockholder, and the terms of payment thereof,
shall be determined in accordance with the provisions of Sections 6(e) and 7 of
this Agreement.
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(d) PAYMENT OF DEBTS. In the event that, at the time of death or
dissolution, the Disappearing Stockholder is indebted to the Company for any sum
whatsoever, then the amount of such indebtedness shall be paid to the Company by
the Disappearing Stockholder or the estate of the Disappearing Stockholder, or,
in the event that the purchaser of the Covered Securities of the Disappearing
Stockholder shall be the Company, then the amount of such indebtedness shall be
deducted from the purchase price to be paid by the Company. In the event that
the Company shall be indebted to the Disappearing Stockholder at the time of
death or dissolution of the Disappearing Stockholder, then the amount of such
indebtedness shall be paid by the Company, at the closing, in addition to the
purchase price to be paid for the Covered Securities of the Disappearing
Stockholder.
(e) VALUATION. For the purposes of valuation of Covered Securities offered
or sold under Section 6 of this Agreement, the value of each share of the Common
Stock shall be equal to the average of the closing sales prices of the Company's
Common Stock, as reported on the Nasdaq Over the Counter Bulletin Board (or such
other exchange on which the Company's common stock is then traded), for the five
consecutive trading days prior to the date of the event requiring the need for
such valuation. For the purpose of determining the valuation of the Series A
Preferred Stock, the price shall be equal to the number of shares of the Common
Stock such Series A Preferred Stock would be convertible into at the time
multiplied by the per-share price determined in accordance with the preceding
sentence. The Stockholders and/or the Company shall mutually agree on the
valuation of the warrants, options, and other rights to acquire additional
capital stock of the Company that are offered or sold under Section 6 of this
Agreement.
7. MANNER OF PAYMENT FOR STOCK
(a) UPON THE DEATH OR DISSOLUTION OF A STOCKHOLDER. The purchase price for
the Covered Securities of a Disappearing Stockholder shall be paid in no more
than three equal consecutive monthly installments after the closing.
(b) UPON THE EXERCISE OF THE RIGHT OF FIRST REFUSAL. The purchase price for
the Offered Shares purchased from a Selling Stockholder pursuant to the exercise
of the right of first refusal shall be paid as follows:
(i) If the sale is proposed to be completed through an exchange where
the Offered Shares will be sold, the aggregate purchase price of the
Offered Shares shall be paid by the Remaining Stockholder or the Company,
as the case may be, in no more than 12 equal consecutive monthly
installments at the valuation determined in accordance with Section 6(e).
(ii) If the Transferee is a third party, the aggregate purchase price
of the Offered Shares shall be paid under the same terms as set forth in
the Notice to Sell.
(iii) Notwithstanding anything herein to the contrary, in the event
that the entire purchase price is not paid at closing, the Selling
Stockholder shall have the option to elect any installment sales method
which may be available under the Internal Revenue Code for the payment.
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(c) EVIDENCE OF INDEBTEDNESS. Any deferred portion of the purchase price
payable in accordance with Sections 7(b)(i) or 7(b)(ii) hereinabove, shall be
evidenced by a promissory note which shall bear annual interest at (a) the prime
rate as reported in The Wall Street Journal, for purchases in accordance with
Section 7(b)(i); or (b) the rate, if any, as included in the Notice to Sell.
Such promissory note shall provide for acceleration of the entire remaining
balance in the event of a default in the payment of any installment not cured
within seven days after its due date. The maker shall have the right to prepay
all or any of said notes in the inverse order of their maturity, with interest,
but without premium or penalty.
(d) ESCROW. Until the receipt of the purchase price in full, the legal
representative of the Disappearing Stockholder or the Selling Stockholder, as
the case may be (hereinafter the "Seller"), shall deliver the certificates for
such shares, together with a stock power executed in blank and an executed
standard form general release (collectively, the "Escrowed Property"), in favor
of the Company and the Remaining Stockholder, to the attorney for the Company,
as escrow agent ("Escrow Agent"), who shall hold the Escrowed Property in escrow
until all of the unpaid balance has been received and collected by the Seller,
at which time Escrow Agent shall deliver the Escrowed Property to the
purchasers, as their interests may appear and have appropriate tax transfer
stamps affixed thereto. The purchasers shall have all the rights of ownership
during the time said stock is held in escrow and shall be entitled to vote said
stock, and shall be entitled to receive any dividends or other emoluments so
long as said purchasers are not in default under the terms of this Agreement.
(e) SECURITY FOR PAYMENT OF THE OBLIGATION. During the period in which all
or any part of the purchase price remains unpaid, the Remaining Stockholder
covenants and agrees that it shall not vote the Remaining Stockholder's Voting
Securities or to so act as directors to effectuate the following, except where
the consent, in writing, of the legal representative of the Disappearing
Stockholder or the Selling Stockholder, whichever the case may be, has been
obtained prior to taking such action:
(i) The declaration of any dividends, except as required by the
certificate of designations of the preferred stock of the Company;
(ii) The taking of any action except in the normal, regular and
customary course of the Company's business;
(iii) The approval of any merge into any other corporation or the
merger of any corporation into the Company, the consolidation with any
other person, firm or corporation and the sale of the Company's business or
assets or the purchase of the assets or business of any person, firm or
corporation;
(iv) A change in the Company's authorized or issued capital stock;
(v) The mortgage, pledge, lien or other encumbrance of any property of
the Company.
(f) DEFAULT. In the event that there is a default in payment or in any
other terms of the sale and purchase, the Seller shall have the right to require
the Escrow Agent, after giving the notice of the sale and its time and place,
then required by law, but in no event less than
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20 days after notice sent by registered or certified mail, return receipt
requested (hereinafter "Grace Period"), and without any liability on the part of
the Seller or the Escrow Agent for any diminution in the price of the pledged
stock which may have occurred, to cause all or part of said stock to be sold at
public or private sale subject to and in accordance with the terms of the
Uniform Commercial Code of the State of Florida then existing. The sale may be
public or private, and at such sale, if public, the Seller shall have the right
to purchase all or any part of the pledged stock. Out of the proceeds of any
such sale, the Escrow Agent shall reimburse himself or otherwise pay any of the
expenses of said sale including reasonable attorneys' fees and shall deliver an
amount equal to the full principal and interest remaining unpaid in connection
with the sale of the stock pledged to the Seller and pay over any balance of
such proceeds to the purchaser. In the event that the proceeds of any such sale
are insufficient to cover the entire unpaid principal and interest due in
connection with the sale, plus the expenses of the sale, the purchaser shall
remain fully and completely liable to the Seller for any resulting deficiency.
In addition to the foregoing, the Seller shall have all other rights of a
secured party under the Uniform Commercial Code of the State of Florida then
existing.
(i) In addition, if the default in the payment of the purchase price
is by the Company, and such default shall remain in effect beyond the Grace
Period, the Seller shall have the option to cause a dissolution of the
Company, and upon giving written notice to the Remaining Stockholders and
to the Company by registered or certified mail, return receipt requested,
within 20 days after the expiration of the Grace Period following a
default, the Remaining Stockholders agree for themselves and for their
personal representatives that they will so vote their stock of the Company
to effectuate such a dissolution forthwith and shall execute and cause to
be executed any instruments or certificates required under the laws of the
State of Nevada in order consummate such dissolution of the Company. Upon
such dissolution, the Seller shall be paid the balance of the purchase
price and all accrued interest thereon in full, if possible, prior to any
distribution of funds or assets to the Remaining Stockholders.
(ii) If the Seller does not choose to exercise any of the foregoing
remedies, the Seller may require the Escrow Agent to redeliver all of his
shares of stock held in escrow with the stock power pertaining thereto and
upon such redelivery the Company shall cause said shares to be transferred
to the Seller who may retain all sums paid in connection with the sale and
purchase in full satisfaction of the purchase price and all damages caused
by the default, subject to complying with the requirements of the Uniform
Commercial Code of the State of Florida pertaining thereto, if any.
(iii) None of the foregoing remedies shall be deemed as being
exclusive of any other remedy herein set forth and in addition, the Seller
may resort to any other legal or equitable remedy available to him or it
under the law.
(iv) If any of the foregoing remedies shall be unenforceable, the
unenforceability thereof shall not affect or in any way deter or detract
from any other remedy herein set forth.
(g) DELIVERY OF ADDITIONAL ITEMS AT CLOSING. The legal representative of
the Disappearing Stockholder shall be required to deliver an appropriate tax
waiver and a Certificate
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of Letters Testamentary or Letters of Administration to the attorney for the
purchaser upon receipt of purchase price in full or in cash and notes as
provided above.
8. ACTIONS IN VIOLATION OF THIS AGREEMENT
(a) PURCHASE FROM TRANSFEREE. In the event the Covered Securities of any
Stockholder are pledged, hypothecated, transferred or disposed of in any manner,
without complying with the provision of this Agreement, or if such securities
are taken in execution or sold in any voluntary or involuntary legal proceeding,
sale, bankruptcy, insolvency or in any other manner, the Company and the other
Stockholder shall, upon actual notice thereof, in addition to their rights and
remedies under this Agreement, be entitled to purchase such securities from the
Transferee thereof, under the same terms and conditions and at the same price as
set forth in the provisions of this Agreement dealing with the sale of such
securities held by such Transferee, as if the Transferee had offered to sell
such securities, but in no event shall the purchase price exceed the amount paid
for said shares by the Transferee. The Company may, at its option, refuse to
transfer on its books and its records any securities transferred in violation of
this Agreement.
(b) ADDITIONAL REMEDIES. In the event of a breach of any material provision
hereof by either Stockholder, the other Stockholder shall, in addition to all
other remedies, be entitled to:
(i) A temporary and permanent injunction without showing any actual
damage;
(ii) A decree of specific performance of the terms hereof; and
(iii) An option to purchase all of the Covered Securities owned by
such violating Stockholder. The terms, provisions, manner, method and the
period of time of exercising said option shall be the same as provided for
in Section 4 herein as if such violating Stockholder were a Selling
Stockholder except that the period of time shall be counted from the day
after knowledge is received of the event of the breach or a threatened or
attempted breach instead of from the day of receipt of the Notice to Sell.
9. TERMINATION OF AGREEMENT
(a) TERMINATION EVENTS. This Agreement shall terminate on the occurrence of
any of the following:
(i) The dissolution of the Company;
(ii) The acquisition of all stock in the Company by any individual
firm, corporation, or other entity;
(iii) The mutual consent of the Stockholders; or
(iv) If either Stanford or the Careys owns less than 5% of the Voting
Securities not as a result of any violation of this Agreement.
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(b) EFFECT OF NOTICE TO SELL. Anything in this Section 9 to the contrary
notwithstanding, this Agreement and all of its terms shall continue in full
force and effect so long as any Notice to Sell by a Selling Stockholder or the
representative of a Disappearing Stockholder is outstanding and/or until any
pending sale and purchase of stock provided for in this Agreement is consummated
by payment in full.
10. GOVERNING LAW; JURISDICTION
This Agreement shall be governed by and interpreted in accordance with the
laws of the State of Delaware, without regard to its principles of conflict of
laws. Any action or proceeding seeking to enforce any provision of, or based on
any right arising out of, this Agreement may be brought against any party in the
federal courts of Florida or the state courts of the State of Florida, and each
of the parties consents to the jurisdiction of such courts and hereby waives, to
the maximum extent permitted by law, any objection, including any objections
based on forum non conveniens, to the bringing of any such proceeding in such
jurisdictions.
11. ASSIGNMENT
Parties acknowledge that Stanford is permitted to assign any and all of its
warrants acquired pursuant to the Securities Purchase Agreement to any of its
affiliates or senior management of an affiliate (such term is used in Rule 144
promulgated pursuant to the Securities Act). Parties further agree that any such
assignee shall be required to agree in writing, prior to such assignment, to be
bound by all the terms and obligations of this Agreement as though such
transferee were an original signatory hereto.
12. ENDORSEMENT
All stock certificates of the Company shall contain an endorsement that
they are subject to the terms and provisions of this Agreement.
13. NOTICE
Any notice required or permitted hereunder shall be given in writing
(unless otherwise specified herein) and shall be effective upon personal
delivery, via facsimile (upon receipt of confirmation of error-free transmission
and mailing a copy of such confirmation, postage prepaid by certified mail,
return receipt requested) or two business days following deposit of such notice
with an internationally recognized courier service, with postage prepaid and
addressed to each of the other parties thereunto entitled at the following
addresses, or at such other addresses as a party may designate by five days
advance written notice to each of the other parties hereto.
COMPANY: TDT Development, Inc.
000 Xxxxxxx Xxxxxx
Xxxxxxxxx Xxxxxxx, XX 00000
Attention: Xxxxxxxxxxx X. Xxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
11
WITH A COPY TO: Xxxx and Xxxx, LLP
000 Xxxxxxx Xxxx Xxxx
Xxxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
STANFORD: Stanford Venture Capital Holdings, Inc.
0000 Xxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxx, President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
WITH A COPY TO: Stanford Financial Group
0000 Xxxxxxxxxx
Xxxxxxx, XX 00000
Attention: Xxxxxxxx Xxxxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
XXXXX: Xxxxxxxxxxx X. Xxxxx
000 Xxxxxxxxx Xxxx
Xxxxxxxxxxxxx, Xxx Xxxxxx 00000
Telephone: (000) 000-0000
14. MISCELLANEOUS
(a) ENTIRE AGREEMENT. This Agreement supersedes all prior agreements and
understandings among the parties hereto with respect to the subject matter
hereof. This Agreement, including any certificate, schedule, exhibit or other
document delivered pursuant to their terms, constitutes the entire agreement
among the parties hereto with respect to the subject matters hereof and thereof,
and supersedes all prior agreements and understandings, whether written or oral,
among the parties with respect to such subject matters.
(b) AMENDMENTS. This Agreement may not be amended except by an instrument
in writing signed by the party to be charged with enforcement.
(c) WAIVER. No waiver of any provision of this Agreement shall be deemed a
waiver of any other provisions or shall a waiver of the performance of a
provision in one or more instances be deemed a waiver of future performance
thereof.
(d) CONSTRUCTION. This Agreement and each of the Primary Documents have
been entered into freely by each of the parties, following consultation with
their respective counsel, and shall be interpreted fairly in accordance with its
respective terms, without any construction in favor of or against either party.
12
(e) BINDING EFFECT OF AGREEMENT. This Agreement shall inure to the benefit
of, and be binding upon the successors and assigns of each of the parties
hereto.
(f) SEVERABILITY. If any provision of this Agreement shall be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall not
affect the validity or enforceability of the remainder of this Agreement or the
validity or unenforceability of this Agreement in any other jurisdiction.
(g) ATTORNEYS' FEES. If any action should arise between the parties hereto
to enforce or interpret the provisions of this Agreement, the prevailing party
in such action shall be reimbursed for all reasonable expenses incurred in
connection with such action, including reasonable attorneys' fees.
(h) HEADINGS. The headings of this Agreement are for convenience of
reference only and shall not form part of, or affect the interpretation of this
Agreement.
(i) COUNTERPARTS. This Agreement may be signed in one or more counterparts,
each of which shall be deemed an original and all of which, when taken together,
will be deemed to constitute one and the same agreement.
[SIGNATURES ON FOLLOWING PAGE]
13
IN WITNESS WHEREOF, the parties hereto have hereunto set their hands and
seals the day, month and year first above written.
TDT DEVELOPMENT, INC.
By: /s/ Xxxxxxxxxxx X. Xxxxx
---------------------------------------------------
Name: Xxxxxxxxxxx X. Xxxxx
---------------------------------------------
Title: President
--------------------------------------------
STANFORD VENTURE CAPITAL HOLDINGS, INC.
By: /s/ Xxxxx X. Xxxxx
---------------------------------------------------
Name: Xxxxx X. Xxxxx
---------------------------------------------
Title: President and CFO
--------------------------------------------
/s/ Xxxxxxxxxxx X. Xxxxx
-----------------------------------------------------
XXXXXXXXXXX X. XXXXX, an individual
/s/ Xxxx Xxxxx
-----------------------------------------------------
XXXX XXXXX, an individual
14
SPOUSAL CONSENT
---------------
The undersigned is spouse of Xxxxxxxxxxx X. Xxxxx (the "Stockholder") and
acknowledges that she has read and understands the provisions of the foregoing
Stockholders' Agreement (the "Agreement"), by and among Stockholder and Stanford
Venture Capital Holdings, Inc., a Delaware corporation, and TDT Development,
Inc., a Nevada corporation (the "Company"). The undersigned is aware that the
provisions of the Agreement govern and control the Stockholder's interests in
the Company, including any community property interest or quasi-community
property interest they undersigned may have, in accordance with the terms and
provisions of the Agreement. The undersigned hereby expressly approves of and
agrees to be bound by the provisions of the Agreement in its entirety,
including, but not limited to, those provisions relating to the voting rights
and sales and transfers of securities, and the restrictions thereon. If the
undersigned predeceases the Stockholder when the Stockholder owns any interests
in the Company, she hereby agrees not to devise or bequeath whatever community
property interest or quasi-community property interest she may have in the
Company in contravention of the Agreement.
Dated: May 16, 2002
/s/ Xxxx Xxxxx
-------------------------------------------
XXXX XXXXX
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