EXHIBIT 10.2
STOCKHOLDER AGREEMENT BY AND AMONG SEAENA, INC.,
XXXXX XXXX AND U.C. LASER LTD. DATED MARCH 31, 2006
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STOCKHOLDER AGREEMENT
BY AND AMONG
CRYSTALIX GROUP INTERNATIONAL, INC.
AND
THOSE STOCKHOLDERS NAMED HEREIN
FEBRUARY 1, 2006
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STOCKHOLDER AGREEMENT
This Stockholder Agreement (the "AGREEMENT") is made and entered into
effective as of February 1, 2006 (the "EFFECTIVE DATE"), by and among: Crystalix
Group International, Inc., a corporation organized under the laws of the State
of Nevada, United States of America (the "COMPANY"); Xxxxx Xxxx, an officer and
principal stockholder of the Company ("XXXX"); and U.C. Laser Ltd., a company
organized under the laws of the State of Israel ("BUYER"), which concurrently
with the execution of this Agreement is acquiring 2,276,795 shares of the Class
B Preferred Stock of the Company (the "ACQUIRED SHARES"), pursuant to the terms
of an Asset Purchase Agreement dated December 29, 2005 (the "PURCHASE
AGREEMENT"). Xxxx and Buyer are sometimes referred to collectively herein as the
"STOCKHOLDERs," and individually as a "STOCKHOLDER."
RECITALS:
A. The Company is involved in the manufacture, distribution and
marketing of decorative images and products, and pursuant to the Purchase
Agreement is acquiring assets and technology from Buyer to enable the Company to
expand and enhance its business operations, in exchange for the issuance of the
Acquired Shares to Buyer.
X. Xxxx is a substantial stockholder of the Company, and as of the
date hereof the Acquired Shares represent 45% of the capital stock (on a fully
diluted basis and assuming the conversion to Common Stock of all shares of
Preferred Stock) and the voting power of all of the Company's outstanding shares
of Common Stock and Preferred Stock.
C. As provided in the Purchase Agreement, it is a condition to the
transfer of Purchased Assets (as defined in the Purchase Agreement) to the
Company as referenced above, and the issuance of the Acquired Shares to Buyer in
consideration therefore, that this Agreement be executed by the parties hereto.
D. In connection with, and as a condition to, the transactions
contemplated by the Purchase Agreement, the parties hereto desire to enter into
this Agreement to provide for certain rights and obligations of the parties as
set forth herein with respect to ownership, transfer and voting of Company
shares held by them, and the acquisition of additional shares.
NOW THEREFORE, in consideration of the foregoing premises and mutual
agreements set forth herein, the parties agree as follows:
1. DEFINITIONS.
Unless otherwise defined herein, as used in this Agreement, the
following terms shall have the meanings set forth below (and other capitalized
terms have the terms given them elsewhere in this Agreement):
1.1 "AFFILIATES" shall mean, with reference to a specified Stockholder,
any person or entity that directly or indirectly through one or more
intermediaries controls or is controlled by or
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is under common control with the specified Stockholder. For purposes of this
definition, "CONTROL" shall mean the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of the
specified person or entity, whether through the ownership of voting securities
or by contract or otherwise.
1.2 "CHANGE IN CONTROL" shall mean a Sale of the Company, or another
sale, exchange, conveyance or other disposition of shares in a transaction or
series of related transactions in which more than 50% of the outstanding shares
of the Company (determined as if all outstanding shares of Preferred Stock were
converted to Common Stock) are disposed of, including any merger, consolidation,
reorganization or similar transaction that results in a transfer of more than
50% of the outstanding shares of the Company (determined as referenced above).
1.3 "COMMON STOCK" shall mean the Common Stock of the Company.
1.4 "EQUITY SECURITIES" shall mean, for purposes of this Agreement, any
securities having voting rights in the election of the Board of Directors of the
Company (the "Board"), or any securities evidencing an ownership interest in the
Company, or any securities convertible into or exercisable for any of the
foregoing securities, or any agreement or commitment to issue any of the
foregoing securities.
1.5 "PREFERRED STOCK" shall mean all shares of Preferred Stock of the
Company, of whatever series.
1.6 "STOCKHOLDERS" shall mean Xxxx and Buyer or, in the event Buyer
distributes the Acquired Shares to its shareholders, Xxxx and Xx. Xxxxxxxx X.
Xxxxxx ("Xxxxxx"), as well as any other persons who become subject to the terms
of this Agreement as provided in Section 3.5 below.
1.7 "SALE OF THE COMPANY" shall mean either (i) the acquisition of
the Company by another entity by means of any transaction or series of related
transactions to which the Company or the Stockholders are party (including,
without limitation, any stock acquisition, reorganization, merger or
consolidation but excluding any sale of stock for capital raising purposes) that
results in the voting securities of the Company outstanding immediately prior
thereto failing to possess immediately after such transaction or series of
related transactions (either by remaining outstanding or by being converted into
voting securities of the surviving entity or the entity that controls such
surviving entity) a majority of the total voting power represented by the
outstanding voting securities of the Company, such surviving entity or the
entity that controls such surviving entity; or (ii) a sale, lease conveyance or
other distribution of all or substantially all of the assets of the Company in
one or a series of related transactions.
1.8 "SECURITIES ACT" shall mean the Securities Act of 1933, as
amended, or any similar successor federal statute and the rules and regulations
thereunder, all as the same shall be in effect from time to time.
2 RIGHT OF FIRST REFUSAL RELATING TO SUBSEQUENT OFFERINGS BY THE COMPANY.
2.1 The Company hereby grants to each of the Stockholders the right
of first refusal to
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purchase such portion of any New Securities (as defined in this Section 2.1)
which the Company may, from time to time, propose to sell and issue, as may be
required to enable such Stockholder (together with its Affiliates) to maintain
its respective percentage equity interest in the Company, without dilution as a
result of such issuance of New Securities (and assuming the exercise of all
outstanding options to purchase shares of the Company's Common Stock then held
by the Stockholders, to the extent exercisable). The right of first refusal
shall be subject to the following provisions of this Section 2.1.
2.1.1 DEFINITION OF NEW SECURITIES; EXCLUDED SECURITIES. For
purposes of this Section 2.1, the term "NEW SECURITIES" shall mean (a) any
Common Stock, Preferred Stock or other Equity Security of the Company, whether
now or hereafter authorized, (b) any right, option, warrant or other security
exercisable for or convertible into (with or without the payment of
consideration) any Common Stock or other Equity Security of the Company, and (c)
any security carrying any warrant or right to subscribe for or purchase any
Common Stock, Preferred Stock or other Equity Security; PROVIDED HOWEVER, that
the term New Securities shall not include Excluded Securities, as defined below.
For purposes of this Section 2.1, the term "EXCLUDED SECURITIES" shall mean: (i)
shares of Common Stock issuable on exercise of outstanding warrants, options or
rights to purchase shares of the Company's Equity Securities; (ii) securities
issued (x) pursuant to equity incentive, bonus, option or compensation
arrangements for the benefit of employees, consultants or directors of the
Company, (y) in consideration for the acquisition (whether by merger, purchase
of assets or otherwise) by the Company or any of its subsidiaries of stock or
assets of any other entity, or (z) in connection with equipment lease, debt
financing or borrowing transactions with commercial lending institutions
(whether issued to a lessor, lender, guarantor or other person), in each case as
approved by the Company's Board of Directors; (iii) Equity Securities issued in
connection with any stock split or stock dividend by the Company; (iv) Equity
Securities issued to specified investors with the unanimous consent of the
members of the Company's Board of Directors; and (v) Equity Securities issued
upon exercise or conversion of Excluded Securities or on exercise or conversion
of New Securities issued in accordance with the procedures set forth in this
Section 2.1.
2.1.2 NOTICE OF PROPOSED ISSUANCES; EXERCISE OF RIGHT TO
PARTICIPATE. In the event the Company proposes to undertake an issuance of New
Securities, it shall give each Stockholder written notice of its intention,
describing the number and type of New Securities proposed to be issued, and the
price and general terms upon which the Company proposes to issue such New
Securities. Each Stockholder shall have twenty (20) days after any such notice
is delivered to agree to purchase all or part of the New Securities such
Stockholder is entitled to purchase hereunder, for the price and upon the terms
specified in the notice by giving written notice to the Company and stating
therein the quantity of New Securities such Stockholder elects to purchase.
2.1.3 SALE OF NEW SECURITIES TO OTHER PURCHASERS. In the event
any Stockholder fails to exercise the right to purchase all New Securities it is
entitled to purchase hereunder, then the Company shall have sixty (60) days
thereafter to sell or enter into an agreement (pursuant to which the sale of New
Securities covered thereby shall be closed, if at all, within sixty (60) days
from the date of said agreement) to sell the New Securities respecting which the
Stockholders' right of first refusal option set forth in this Section 2.1 was
not exercised, at a price and upon
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terms no more favorable to the purchasers thereof than specified in the
Company's notice to Stockholders pursuant to Section 2.1.2. In the event the
Company has not within such sixty (60)-day period sold or entered into an
agreement to sell such New Securities in accordance with the foregoing, the
Company shall not thereafter issue or sell any such New Securities, without
first again offering to the Stockholders the right to purchase the applicable
portion of such New Securities in the manner provided in this Section 2.1.
2.1.4 TERMINATION OR WAIVER OF RIGHT OF FIRST OFFER. The right
of first refusal granted under this Section 2.1 shall expire upon the first
anniversary of the Effective Date. The rights of participation established by
this Section 2.1 may be amended, or the observance of any provisions of this
Section 2.1 may be waived (either generally or in a particular instance and
either retroactively or prospectively), only with the written consent of each of
the Stockholders. Any such amendment or waiver may be agreed and accepted
individually by any Stockholder, solely with respect to that Stockholder's right
of first refusal, provided that no amendment or waiver that may restrict, limit,
eliminate or adversely affect all or any portion of the rights of first refusal
shall be effective as to any Stockholder except upon such Stockholder's express
written consent.
2.1.5 ASSIGNMENT OF RIGHT OF FIRST REFUSAL. The right of first
refusal set forth in this Section 2.1 may be assigned or transferred by a
Stockholder to any of its Affiliates or if a Stockholder or Affiliate is an
entity, then to any of such entity's current or former general or limited
partners, members, managers, stockholders or subsidiaries.
3. RIGHTS OF FIRST OFFER AND CO-SALE REGARDING SALES BY STOCKHOLDERS.
3.1 RIGHTS OF FIRST OFFER ON TRANSFERS OF EQUITY SECURITIES.
3.1.1 NOTICE OF PROPOSED TRANSFER. If at any time, prior to
the first anniversary of the Effective Date, a Stockholder proposes to transfer
or otherwise dispose of any Equity Securities now or hereafter held by such
Stockholder to a third party (other than the Company), whether voluntarily or by
operation of law, in any transaction other than an Exempt Transfer as defined in
Section 3.5 below (a "TRANSFER"), then such Stockholder (the "TRANSFERRING
STOCKHOLDER") shall first give written notice of such Transferring Stockholder's
desire to do so (a "NOTICE OF INTENDED TRANSFER") to the Company and each
Stockholder. The Notice of Intended Transfer shall specify (i) the number and
type of Equity Securities the Transferring Stockholder desires to transfer
("OFFERED SECURITIES"), (ii) the name and address of the party to which the
Transferring Stockholder intends to transfer the Offered Securities (the
"OFFEROR"), (iii) the consideration per share to be delivered to the
Transferring Stockholder for the Offered Securities, and (iv) all other material
terms and conditions of the proposed transaction.
3.1.2 COMPANY'S OPTION TO PURCHASE.
(a) The Company shall have the first option to
purchase all or any part of the Offered Securities for the consideration per
share and on the terms specified in the Notice of Intended Transfer (except that
if the intended Transfer involves a transaction in which the proposed transferee
is not paying the full price for the Offered Securities, or if the purchase
price
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is payable other than in cash, the price (or the value of any non-cash
consideration) shall be deemed to be the fair market value of the Offered
Securities at such time as determined in good faith by the Company's Board of
Directors (taking into account the Board's determination of the fair market
value of the non-cash consideration), and the price for the Offered Securities
as determined by the Notice of Intended Transfer, subject to the adjustments
provided for herein, is referred to herein as the "OFFER PRICE"). The Company
may exercise such option only by written notice to the Transferring Stockholder
sent no later than fifteen (15) business days after receipt of the Notice of
Intended Transfer by the Company (the "PRIMARY OPTION PERIOD").
(b) If the Company duly exercises its option to
purchase all or any part of the Offered Securities, the closing of such purchase
shall take place at the offices of the Company no later than the fifth business
day after the expiration of the Primary Option Period. At such closing, the
Company will pay to the Transferring Stockholder in cash the Offer Price of the
Offered Securities, against delivery to the Company of a duly endorsed
certificate(s) or other documents representing the Offered Securities.
(c) If the Company does not exercise its right to
acquire all or any part of the Offered Securities, the Company shall, on or
before the last day of the Primary Option Period, send written notice (the
"COMPANY NOTICE") of that fact to each of the Stockholders.
3.1.3 OPTION OF STOCKHOLDERS TO PURCHASE OFFERED SECURITIES.
(a) The Stockholders (other than the Transferring
Stockholder) shall have the right and option, exercisable during the fifteen
(15) business days following the date of delivery of the Company Notice (the
"SECONDARY OPTION PERIOD"), to collectively purchase all or any part of the
Offered Securities at the Offer Price, PROVIDED, HOWEVER, that in the event the
Stockholders elect to purchase in the aggregate more than the total number of
Offered Securities, the right to purchase such shares shall be allocated pro
rata among the electing Stockholders, based upon the number of shares of Common
Stock (including shares of Common Stock issuable on conversion of outstanding
shares of Preferred Stock) owned by each of them. Stockholders may exercise
their option only by written notice to the Transferring Stockholder sent before
the end of the Secondary Offering Period. Alternatively, each Stockholder may,
within the Secondary Option Period, notify the Transferring Stockholder in
writing of its desire to participate in the sale of Offered Securities to the
Offeror at the Offer Price and on the terms and conditions set forth in the
Notice of Intended Transfer, to the extent set forth in Section 3.2 below, and
such notice to the Transferring Stockholder (a "PARTICIPATION NOTICE") shall
specify the number of Equity Securities such Stockholder intends to sell in such
transaction.
(b) If the Stockholders collectively exercise the
option to purchase all or any part of the Offered Securities, the closing of
such purchase shall take place at the offices of the Company no later than the
fifth business day after the expiration of the Secondary Option Period. At such
closing, the Stockholders exercising such option will pay to the Transferring
Stockholder in cash the Offer Price for the Offered Securities being purchased,
against delivery of a duly endorsed certificate representing the Offered
Securities being purchased.
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3.2 CO-SALE AGREEMENT.
3.2.1 RIGHT TO PARTICIPATE IN SALES BY STOCKHOLDERS. In the
event that all of the Offered Securities subject to a proposed Transfer by a
Stockholder are not purchased by the Company and/or the Stockholders through the
exercise of the rights granted in Section 3.1 above, then any Stockholder which
has, pursuant to Section 3.1.3(a) hereof, provided a Participation Notice to the
Transferring Stockholder regarding its desire to participate in the sale of
Offered Securities, at the Offer Price, and upon the terms and conditions set
forth in the Notice of Intended Transfer (a "PARTICIPATING STOCKHOLDER"), shall
be entitled to do so, upon the terms and conditions set forth herein. To the
extent one or more of the Stockholders exercises such right of participation in
accordance with the terms and conditions set forth below, the number of shares
of Equity Securities that the Transferring Stockholder may sell in the Transfer
shall be correspondingly reduced.
3.2.2 NUMBER AND TYPE OF SECURITIES PARTICIPATING STOCKHOLDERS
MAY SELL. Each Participating Stockholder may elect to sell pursuant to this
Section 3.2, at the Offer Price, and on the other terms and conditions set forth
in the Notice of Intended Transfer, all or any part of that number of shares of
Common Stock as is equal to the product obtained by multiplying (i) the
aggregate number of shares of Common Stock underlying the Offered Securities
proposed to be sold to the Offeror as set forth in the Notice of Intended
Transfer by (ii) a fraction, the numerator of which is the number of shares of
Common Stock (assuming conversion of all outstanding shares of Preferred Stock)
owned by such Participating Stockholder on the date of the Transfer Notice and
the denominator of which is the total number of shares of Common Stock
(including all shares of Common Stock issuable on conversion of all outstanding
shares of Preferred Stock) owned by all of the Stockholders on the date of the
Transfer Notice.
3.2.3 EXECUTION AND DELIVERY OF DOCUMENTS AND CERTIFICATES. As
a condition to participating in any Transfer, each Participating Stockholder
shall be required to execute and deliver the definitive documentation in
substantially the same form as that executed by the Transferring Stockholder,
and to deliver to the purchaser at the closing of the transaction one or more
certificates (or other applicable documents) representing the Equity Securities
to be transferred by such Participating Stockholder, properly endorsed for
transfer.
3.2.4 TRANSACTION WITH TRANSFERRING STOCKHOLDER IF CO-SALE
FAILS. In the event that the Offeror refuses to purchase Equity Securities from
a Participating Stockholder exercising its rights of co-sale hereunder (even
though such Participating Stockholder agrees to execute the same documentation
as is executed by the Transferring Stockholder), but the Transferring
Stockholder proceeds with the transaction to sell Equity Securities owned by the
Transferring Stockholder, then simultaneously with such transaction, the
Transferring Stockholder shall purchase from such Participating Stockholder the
number and type of Equity Securities which such Participating Stockholder was
entitled to sell in such transaction, at the price and upon the terms applicable
thereto.
3.2.5 CONTROL OF NEGOTIATIONS. The Transferring Stockholder
shall have the right to control the negotiations of each proposed sale of
Offered Securities covered by this Section
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3.2, and the Participating Stockholders who elect to participate in any such
transaction shall be required to pay a PRO-RATA share (based upon the number of
shares being sold by each Stockholder in such transaction in relation to the
total number of shares being sold in such transaction) of the expenses incurred
by the Transferring Stockholder in negotiating and documenting the transaction;
provided that if the terms of any transaction vary materially from those
described in the applicable Notice of Intended Transfer, each Participating
Stockholder may decline to participate in such transaction (and, in such event,
to decline to pay any expenses associated therewith).
3.2.6 CONTROL AND MODIFICATION OF PRICE AND TERMS. The
Transferring Stockholder will control the actual price and other terms
(consistent with the terms of this Agreement) upon which Offered Securities will
be sold in any transaction pursuant to this Section 3.2, provided that if the
terms and conditions (including purchase price) become more favorable to the
Transferring Stockholder than were specified in the Transfer Notice, then the
transaction shall again become subject to the right of co-sale provided in this
Section 3.2 and shall require compliance by the Transferring Stockholder with
the procedures described in this Section 3.2, and provided further that if the
terms and conditions (including purchase price) become any less favorable to the
Transferring Stockholder than were specified in the Transfer Notice, then the
transaction shall again become subject to the right of first offer provided in
Section 3.1 above and shall require compliance by the Transferring Stockholder
with the procedures described in Section 3.1 above.
3.3 NON-EXERCISE OF RIGHTS; TRANSFERRING STOCKHOLDER'S RIGHT TO SELL.
To the extent that the Company and the Stockholders do not exercise their rights
to purchase Offered Securities within the time periods specified in Section 3.1
above, and subject to the Stockholders' co-sale rights set forth in Section 3.2
above, the Transferring Stockholder shall have a period of ninety (90) days from
the expiration of such rights in which to sell all or any portion of the Offered
Securities to the Offeror or affiliates of the Offeror, upon terms and
conditions (including the purchase price) no more favorable to the transferee
than those specified in the Transfer Notice. The third-party transferee(s) shall
acquire the Offered Securities free and clear of subsequent rights of first
offer and co-sale rights under this Agreement. To the extent the Transferring
Stockholder does not consummate the sale or disposition of Offered Securities
within the ninety (90)-day period from the expiration of these rights, the first
offer rights of the Company and the Stockholders and the co-sale rights of the
Stockholders shall again be applicable to any subsequently proposed disposition
of the Offered Securities by the Transferring Stockholder until such right
lapses in accordance with the terms of this Agreement.
3.4 IMPACT OF NON-EXERCISE OF RIGHTS ON SUBSEQUENT TRANSACTIONS. The
exercise or non-exercise of the rights of any parties under this Section 3 to
purchase Offered Securities from a Transferring Stockholder or participate in a
sale of Offered Securities by a Transferring Stockholder shall not adversely
affect their rights to make subsequent purchases of shares of Equity Securities
from a Transferring Stockholder or participate in subsequent sales of shares of
Equity Securities by a Transferring Stockholder.
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3.5 EXEMPT TRANSFERS. For purposes hereof, "EXEMPT TRANSFERS" shall
mean the following transactions by a Stockholder, which shall be excluded from
the definition of Transfer as set forth in Section 3.1 above, and from the
application of Sections 3.1 and 3.2 above, provided, in each instance (excluding
in the case of (iv) below, a distribution of shares from Buyer to its
shareholders, in which case only Xxxxxx, and not the other shareholders of
Buyer, will be treated as Stockholders subject to this Agreement) that the
shares of Equity Securities transferred remain subject to this Agreement, so
that subsequent Transfers are subject to the rights of first offer and co-sale
rights as set forth in Sections 3.1 and 3.2 above, and the transferees agree to
be bound by the terms of this Agreement with respect thereto, as if they were
Stockholders as defined herein, and provided further that the Company is
promptly notified of such transfer: (i) any transfer among Stockholders; (ii)
any transfer by gift or bequest or through inheritance to, or for the benefit
of, any member or members of the transferor's immediate family; (iii) any
transfer to a trust, family limited partnership, or other entity created for the
benefit of the transferor or a member of the immediate family of the transferor;
(iv) any distribution of shares by a Stockholder to its stockholders, members or
partners, as applicable; (v) any transfer approved by the Board of Directors;
and (vi) an Affiliate. In addition to the foregoing, for purposes of this
Agreement, Exempt Transfers shall include sales of Common Stock into the public
market, without legend regarding restrictions on transfer and in compliance with
all applicable securities laws and regulations, including Rule 144, promulgated
pursuant to the Securities Act, and with respect to any such Exempt Transfers
into the public market, the shares of Common Stock transferred will be released
from, and no longer subject to, the terms of this Agreement.
3.6 RIGHTS OF STOCKHOLDERS IN EVENT OF CERTAIN PROHIBITED TRANSFERS.
In the event any Stockholder should sell any Equity Securities in contravention
of the co-sale rights of the other Stockholders under Section 3.2 (a "PROHIBITED
TRANSFER"), such other Stockholders, in addition to such other remedies as may
be available at law, in equity or hereunder, shall have the option provided
below, and the Stockholder shall be bound by the applicable provisions of such
option.
3.6.1 PUT OPTION. In the event of a Prohibited Transfer, each
Stockholder who failed to receive a Notice of Intended Transfer in accordance
with Section 3.1.1 above, and each Stockholder who received a Notice of Intended
Transfer in accordance with Section 3.1.1 above, and gave notice as provided in
Section 3.1.3(a) above of its election to exercise co-sale rights pursuant to
Section 3.2 above, shall have the right to sell to such Stockholder the number
and type of Equity Securities such Stockholder would have been entitled to
transfer to the third-party transferee(s) under Section 3.2 hereof had the
Prohibited Transfer been effected pursuant to and in compliance with the terms
hereof. Such sale shall be made on the following terms and conditions:
(i) The price per share at which the shares are to be
sold to such Stockholder shall be equal to the price per share paid by the
third-party transferee(s) to such Stockholder in the Prohibited Transfer. Such
Stockholder shall also reimburse each Stockholder for any and all fees and
expenses, including legal fees and expenses, incurred pursuant to the exercise
or the attempted exercise of the Stockholder's rights under this Section 3.
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(ii) Within ninety (90) days after the later of the
dates on which the Stockholder (A) received notice of the Prohibited Transfer or
(B) otherwise became aware of the Prohibited Transfer, such Stockholder shall,
if exercising the option created hereby, deliver to such Stockholder the
certificate or certificates representing shares to be sold, each certificate to
be properly endorsed for transfer.
(iii) Such Stockholder shall, upon receipt of the
certificate or certificates or other documentation for the Equity Securities to
be sold by a Stockholder, pursuant to this Section 3.6, pay the aggregate
purchase price therefor and the amount of reimbursable fees and expenses, as
specified in this Section 3.6, in cash or by other means acceptable to the
Stockholder.
(iv) Notwithstanding the foregoing, any attempt by a
Stockholder to transfer Equity Securities in violation of Section 3 hereof shall
be void and the Company agrees it will not effect such a transfer nor will it
treat any alleged transferee(s) as the holder of such shares without the written
consent of a two-thirds in interest of the Stockholders.
3.7 LEGEND. Each existing or replacement certificate for shares of
Common Stock, Preferred Stock or other Equity Securities subject to the terms of
this Section 3 now owned or hereafter acquired by any Stockholder shall bear the
following legend:
THE SALE, PLEDGE, HYPOTHECATION, ASSIGNMENT OR TRANSFER OF THE
SECURITIES REPRESENTED BY THIS CERTIFICATE ON OR BEFORE
_________, 2007 IS SUBJECT TO THE TERMS AND CONDITIONS OF A
CERTAIN STOCKHOLDER AGREEMENT BY AND AMONG THE STOCKHOLDER,
THE COMPANY AND CERTAIN HOLDERS OF STOCK OF THE COMPANY.
COPIES OF SUCH AGREEMENT MAY BE OBTAINED UPON WRITTEN REQUEST
TO THE SECRETARY OF THE COMPANY.
3.8 TERM. The provisions of this Section 3 shall terminate upon the
earlier of (i) the first anniversary of the Effective Date or (ii) the closing
of a Sale of the Company.
4. DRAG ALONG RIGHT.
4.1 DRAG ALONG RIGHT IN CONNECTION WITH SPECIFIED TRANSACTIONS. In
the event of a Change in Control that has been approved by the Board and a
majority of the shares of the Company's Common Stock (including shares issuable
on conversion of outstanding shares of Preferred Stock) held by the Stockholders
within one year following the Effective Date, each Stockholder shall take all
necessary or desirable action within such Stockholder's control (including,
without limitation, the removal and election of directors, attendance and
participation at meetings of directors or stockholders and execution of written
consent in lieu of meetings) such that any proposal or resolution requested by
the Board in connection therewith or required to effect such Change in Control
will be implemented by the Company and the Stockholders. Each Stockholder
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shall consent to, and raise no objections against, a Change in Control that has
been approved by the Board and a majority of the outstanding shares of the
Company's Common Stock (including shares issuable on conversion of outstanding
shares of Preferred Stock) within the one year period following the Effective
Date, and if such Change in Control is structured as a sale of shares of Common
Stock or Preferred Stock, each Stockholder shall sell the shares held by such
Stockholder on the terms and conditions approved in the Change in Control. Each
Stockholder will take all action necessary and desirable in connection with the
consummation of the Change in Control. Each Stockholder shall bear its pro rata
share (based upon the shares of Common Stock held (including shares of Common
Stock issuable on conversion of outstanding shares of Preferred Stock) of the
cost of any sale of shares pursuant to such Change in Control, to the extent
such costs are incurred for the benefit of all sellers of the shares and are not
otherwise paid by the Company or transferee.
5. VOTING AGREEMENT AND PROXY.
5.1 BOARD REPRESENTATION AND VOTING AGREEMENT FOR ELECTION OF
DIRECTORS.
5.1.1 MAINTENANCE OF BOARD; ELECTIONS OF DIRECTORS. Subject to
the provisions of this Section 5.1, at each meeting of the stockholders of the
Company held within the one year period following the Effective Date, at which
members of the Board are to be elected, and at any other time during such one
year period at which stockholders of the Company will have the right to or will
vote for or render consent in writing regarding the election of directors of the
Company, or the composition of the Board, then and in each event, each of the
Stockholders hereby covenants and agrees severally to vote all shares of Equity
Securities presently owned or hereafter acquired by such Stockholder (whether
owned of record or over which such Stockholder exercises, directly or
indirectly, voting control) in favor of the following actions (to the extent
such shares are eligible to vote with respect to each such action):
(a) to maintain the authorized number of directors
constituting the Board at seven; and
(b) to maintain as members of the Board the four
current members representing the current holders of the Company's Common Stock
(provided that any three of such directors may designate a different person to
fill the fourth position), and the three representatives of Buyer elected to the
Board pursuant to Section 1.4 of the Purchase Agreement (provided that any two
of such directors may designate a different person to fill the third position).
The Company shall furnish written notice to all holders of Equity Securities at
least ten (10) days prior to any meeting or proposed action by written consent
in lieu of a meeting for the election of directors.
5.1.2 REMOVAL OF DIRECTORS AND VACANCIES. No Stockholder shall
vote for the removal of a director, unless the directors referenced in Section
5.1.1 above as having the right to designate a new director to fill a position
shall request such removal in writing, in order to allow the election of such
new director. If such directors requests such removal of a director, consistent
with the provisions of this Section 5.1, then the Stockholders agree to vote all
shares of Equity
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Securities then owned by them, or as to which they have voting power, for the
removal of such director and the election of the designated replacement.
5.2 VOTING AGREEMENT; GRANT OF PROXY. For the period of one year
following the Effective Date, all of the Acquired Shares (including any shares
of Common Stock issued on conversion thereof) shall be voted as Xxxx xxx direct
or determine to be appropriate, on all matters that may be presented for a vote
or consent of the Company's stockholders, except for any matters set forth above
or if related to or in connection with the sale, purchase or issuance of any
securities of the Company or any of its subsidiaries or affiliates. Concurrently
with the execution of this Agreement, Buyer shall execute and deliver to Xxxx
and the Company an irrevocable proxy, having a duration of one year in the form
attached hereto as Exhibit A (the "Proxy"), granting to Xxxx the right and proxy
to vote the Acquired Shares and all shares of Common Stock issued on conversion
thereof, as Xxxx xxx determine to be appropriate, except for those matters
referenced in the preceding sentence and set forth in the Proxy. The provisions
of this Section 5.2 shall be binding upon the successors in interest to any of
the Acquired Shares (and shares of Common Stock issued on conversion thereof).
The Company shall not permit the transfer of any of such shares on its books or
issue a new certificate representing any of such shares unless and until the
person to whom such security is to be transferred shall have executed a written
agreement or proxy, containing provisions substantially in the form applicable
to Buyer hereunder, and such person agrees to be bound by all the provisions of
this Section 5.2, as if such person were Buyer.
5.3 TERMINATION OF VOTING PROVISIONS. The provisions of this Section
5 shall terminate on the first anniversary of the Effective Date.
6. MISCELLANEOUS.
6.1 CERTIFICATES; LEGENDS. As a condition to the issuance to any
Stockholder of any certificates representing shares of the Company's Common
Stock or Preferred Stock subject to this Agreement, and as a condition to the
transfer by a Stockholder of any Equity Securities that will, after such
transfer, continue to be subject to the terms of this Agreement, the Company
shall require that the person acquiring such securities execute this Agreement.
Each certificate representing shares of the Company's Common Stock and Preferred
Stock subject to the terms of this Agreement shall bear all legends referenced
herein or required by applicable law, as well as legends referencing the
restrictions and encumbrances on such shares as referenced herein.
6.2 GOVERNING LAW. This Agreement shall be governed in all respects
by the laws of the State of Nevada, U.S.A., as applied to agreements among
Nevada residents entered into and to be performed entirely within the State of
Nevada.
6.3 SUCCESSORS AND ASSIGNS. Except as otherwise expressly provided
herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the successors, assigns, heirs, executors and administrators of the
parties hereto.
6.4 ENTIRE AGREEMENT; AMENDMENT; WAIVER. This Agreement constitutes
the full and entire understanding and agreement between the parties with regard
to the subject matter hereof.
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Except as otherwise provided herein, neither this Agreement nor any term hereof
may be amended, waived, discharged or terminated, except by a written instrument
signed by the Company, Xxxx and Buyer. The failure of any party hereto to
enforce any of the provisions in this Agreement will in no way be construed as a
waiver of such provisions and will not affect the right of such party to
thereafter enforce each and every provision of this Agreement in accordance with
its terms.
6.5 NOTICES, ETC. All notices and other communications required or
permitted hereunder shall be in writing and shall be deemed effective when
delivered by certified mail, return receipt requested, facsimile or e-mail or
delivered personally by hand or by nationally recognized courier service,
addressed (a) if to a Stockholder, as indicated on the Company's stockholder
listing, or at such other address or facsimile number or e-mail address as shall
have been furnished to the Company in writing, or (b) if to the Company, at its
principal business address, facsimile number or e-mail address, or such other
address or facsimile number or e-mail address as the Company shall have
furnished in writing to the party giving notice. All such notices and other
written communications shall be effective on the date of delivery, as evidenced
by return receipt, confirmation of delivery or other customary evidence of
delivery.
6.6 DELAYS OR OMISSIONS. No delay or omission to exercise any right,
power or remedy accruing to any Stockholder, upon any breach or default of the
Company or a Stockholder under this Agreement shall impair any such right, power
or remedy of such Stockholder nor shall it be construed to be a waiver of any
such breach or default, or an acquiescence therein, or of or in any similar
breach or default thereafter occurring; nor shall any waiver of any single
breach or default be deemed a waiver of any other breach or default therefore or
thereafter occurring. Any waiver, permit, consent or approval of any kind or
character on the part of any Stockholder of any breach or default under this
Agreement or any waiver on the part of the Company or any Stockholder of any
provisions or conditions of this Agreement must be made in writing and shall be
effective only to the extent specifically set forth in such writing. All
remedies, either under this Agreement or by law or otherwise afforded to any
party hereto, shall be cumulative and not alternative.
6.7 RIGHTS AND OBLIGATIONS; SEVERABILITY. Unless otherwise expressly
provided herein, a party's rights and obligations hereunder are several rights
and obligations, not rights or obligations jointly held with any of the other
party. In case any provision of the Agreement shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
6.8 TITLES AND SUBTITLES. The titles of the Sections of this
Agreement are for convenience of reference only and are not to be considered in
construing or interpreting this Agreement.
6.9 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one and the same instrument. Facsimile execution and delivery
of this Agreement shall be legal, valid and binding execution and delivery for
all purposes.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement
effective as of the date first above written.
THE COMPANY:
CRYSTALIX GROUP INTERNATIONAL, INC.
By: /s/ XXXXX XXXX
----------------------------------------------
Xxxxx Xxxx, Chief Executive Officer
THE STOCKHOLDERS:
XXXX:
/s/ XXXXX XXXX
------------------------------------------
Xxxxx Xxxx
BUYER:
U.C. Laser Ltd.
By: /s/ XXXXXXXX XXXXXX
--------------------------------------
Xxxxxxxx Xxxxxx, Chairman of the Board
[Signature Page to Stockholder Agreement]
45931.0009\YOKENS\LAS\103782.1
