SHAREHOLDERS AGREEMENT
AGREEMENT made as of January 9, 1998 between Palatin AG, a
Swiss corporation ("Palatin"), and Xxxxx Xxxxxx, an individual residing in
Larchmont, New York ("Xx. Xxxxxx").
W I T N E S S E T H:
WHEREAS, Palatin owns 1,560,000 shares of common stock, $.0001
par value per share (the "Ecomat Common Stock"), of Ecomat, Inc., a Delaware
corporation ("Ecomat");
WHEREAS, Xx. Xxxxxx owns 840,000,000 shares of Ecomat Common
Stock (such shares sometimes hereinafter referred to as "Xxxxxx Shares");
WHEREAS, Palatin and Xx. Xxxxxx, in order to assure continuity
in the management and ownership of Ecomat, consider it in the best interest of
Ecomat to make provision for the control of Ecomat;
NOW THEREFORE, in consideration of the foregoing and the
premises and mutual promises herein contained and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
1. Right of First Refusal. (a) If Xx. Xxxxxx wishes to sell
all or any portion of the Xxxxxx Shares (the Xxxxxx Shares or portion thereof to
be offered are hereinafter referred to as the "Offered Shares"), Xx. Xxxxxx
shall give Palatin written notice of her desire to do so (the "Offer Notice").
The Offer Notice shall state the price (the "Offer Price"), the terms on which
Xx. Xxxxxx intends to sell the Offered Shares (including, without limitation,
the collateral for any secured promissory note, which collateral must include
all of the Offered Shares), any assumption, indemnity, guaranty, or security
provisions relating to any material liabilities for which Xx. Xxxxxx is
personally liable, and the identity of the third party to whom Xx. Xxxxxx
intends to sell the Offered Shares. Palatin shall have the right for a period of
thirty (30) days after Palatin's receipt of the Offer Notice (the "Offering
Period") to elect to acquire the Offered Shares at the Offer Price and otherwise
on the terms set forth in the Offer Notice on a closing date and at a place in
the Borough of Manhattan, the City of New York, as designated in Xx. Xxxxxx'x
notice, which date shall not be more than sixty (60) days after the end of the
Offering Period. If Palatin does not timely deliver the Election Notice (as
hereinafter defined) to purchase the entire Offered Shares as provided in
paragraph (b) of this Section 1, Xx. Xxxxxx shall have no obligation to sell the
Offered Shares to Palatin and shall have the right to sell the Offered Shares
pursuant to paragraph (c) of this Section 1.
(b) If Palatin elects to purchase the Offered Shares, it shall
give written notice (an "Election Notice") to Xx. Xxxxxx within the Offering
Period. The notices given by Xx. Xxxxxx and Palatin pursuant to this Section 1
shall constitute a binding agreement of purchase and sale between them.
(c) If Palatin does not timely elect to purchase the Offered
Shares, Xx. Xxxxxx shall have the right to sell the Offered Shares; provided,
however, that (i) the terms and conditions of the sale, including the purchase
price, when taken as a whole, are not materially less favorable to Xx. Xxxxxx
than those set forth in the Offer Notice, (ii) the closing of such sale shall
occur not later than ninety (90) days after the expiration of the Offering
Period, (iii) such sale shall be to the party identified in the Offer
Page 8 of 13 Pages
Notice, and (iv) Xx. Xxxxxx provides Palatin with true and complete copies of
all transfer documents at least ten (10) business days prior to the date of the
sale.
(d) If Xx. Xxxxxx does not close the sale of the Offered
Shares to the party identified in the Offer Notice on terms that are consistent
with the Offer Notice, then Xx. Xxxxxx may not close a sale of any Xxxxxx Shares
without again giving notice to Palatin pursuant to paragraph (a) of this Section
1 and again complying with the procedures of this Section 1.
2. Irrevocable Proxy. Xx. Xxxxxx hereby grants to Palatin an
irrevocable proxy to vote, or to execute and deliver consents or otherwise act
with respect to, all Xxxxxx Shares as fully, to the same extent and with the
same effect as Xx. Xxxxxx might or could do under any applicable laws or
regulations governing the rights and powers of shareholders of a Delaware
corporation. As of the date hereof, Xx. Xxxxxx hereby waives, except as
otherwise prohibited by the provisions of the Delaware General Corporation Law,
any and all rights to vote, or to execute and deliver consents or otherwise act
with respect to the Xxxxxx Shares in any manner inconsistent with the foregoing.
Xx. Xxxxxx hereby affirms that this proxy is given in
consideration of Palatin's agreement to obtain from Xx. Xxxxxx a right of first
refusal with respect to the Xxxxxx Shares, all as set forth in this Agreement.
As such, this proxy is coupled with an interest and is irrevocable. This proxy
may be exercised by Palatin for the period beginning on the date hereof and
ending, with respect to any Xxxxxx Share, on the earlier of (i) the date such
Xxxxxx Share is acquired by Palatin, or (ii) the date such Xxxxxx Share is
acquired by a third party in compliance with the provisions of Section 1 hereof.
3. Compensation. As compensation for the right of first
refusal and irrevocable proxy granted pursuant to this Agreement, Palatin, on
the date hereof, shall transfer the sum of $100,000 to Xx. Xxxxxx.
4. Governing Law. This agreement shall be governed by and
construed in accordance with the laws of the State of Delaware.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
PALATIN AG
/s/ XXXXX XXXXXX By: /s/ XXXXXX XXXXXXXXX
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Xxxxx Xxxxxx Xxxxxx Xxxxxxxxx
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