SHAREHOLDER AGREEMENT
This Shareholder Agreement (this "Agreement") is made as of
this ______ day of August 1998 by and between Casinovations
Incorporated, a Washington corporation (the "Company"), Xxxxxxx
Xxxxx, an individual ("Xxxxx"), Xxxxx Xxxxx, an individual
("Xxxxx") and the Xxxxx-Xxxxx Partnership, a Washington
partnership (collectively with Xxxxx and Xxxxx, the
"Shareholders").
RECITALS
Whereas, the Company has filed a Registration Statement on
Form SB-2/A with the Securities and Exchange Commission for
1,500,000 shares (the "Shares") of the Company's common stock,
$.001 par value.
Whereas, the Company has filed an application for the
registration of the Shares with the Department of Corporations of
the State of California.
Whereas, the Department of Corporations of the State of
California has stated that, as a condition precedent to the
qualification of the Shares for offer, sale or issuance in the
State of California, certain shareholders must agree for
themselves, their successors, assigns, heirs, administrators or
executors that 1,834,402 shares of the Company's common stock
shall be subject to certain disabilities until such disabilities
are removed by the Commissioner of the Department of Corporations
of the State of California.
Whereas, the Shareholders desire to subject a certain
portion of their respective shares to the aforementioned
disabilities and desire to enter into this Agreement for the
purposes of subjecting such shares to aforementioned
disabilities.
Now, Therefore, in consideration of the several and mutual
promises, agreements, covenants, understandings, undertakings,
representations and warranties hereinafter set forth, and for
other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the Company and the
Shareholders agree that the Recitals are true and correct and by
this reference incorporated herein as if fully set forth, and
Seller and Purchaser further covenant and agree as follows:
1. Applicable Shares. The Shareholders hereby agree that
the following shares shall be restricted pursuant to the terms of
this Agreement:
a. 1,363,551 shares of the Company's common stock
held of record by Xxxxx (the "Xxxxx Shares"); and
b. 470,851 shares of the Company's common stock
either held of record by Xxxxx or to be held of record by
Xxxxx upon dissolution of the Xxxxx-Xxxxx Partnership
(collectively with the Xxxxx Shares, the "Shareholder
Shares").
The shares of the Company's common stock to be designated as
the Shareholder Shares shall be selected at the discretion of
Xxxxx and Xxxxx as long as the stock certificates evidencing the
respective shares of Xxxxx and Xxxxx are surrendered to the
Company as of or immediately after the Effective Date (as defined
herein) to comply with the terms of this Agreement.
2. Disabilities. The Shareholders hereby agree that the
Shareholder Shares shall be subject to the following disabilities
(the "Disabilities") until such disabilities are removed by the
Commissioner of the Department of Corporations of the State of
California:
a. The Shareholder Shares shall not participate in
cash or property dividends paid by the Company;
b. The Shareholder Shares shall not participate in or
be entitled to any distribution of assets in the event of a
liquidation of the Company;
c. All certificates evidencing the Shareholder Shares
shall bear upon their face a legend (the "Legend")
prominently stamped or printed thereon and in capital
letters of not less than ten-point type, as follows:
THE SHARES REPRESENTED BY THIS
CERTIFICATE ARE SUBJECT TO CERTAIN
RESTRICTIONS, INCLUDING WAIVERS OF
DIVIDENDS AND ASSETS; AND IT IS UNLAWFUL
TO CONSUMMATE A SALE OR TRANSFER OF
THEM, OR ANY INTEREST THEREIN, WITHOUT
THE PRIOR WRITTEN CONSENT OF THE
COMMISSIONER OF CORPORATIONS OR THE
STATE OF CALIFORNIA.
d. The holders or persons entitled to said
Shareholder Shares shall not consummate a sale or transfer
of such Shareholder Shares, or any interest therein, or
receive any consideration therefor, without the prior
written consent of the Commissioner of the Department of
Corporations of the State of California; except that
transfers may be effected without such consent pursuant to
the order or process of any court on condition that any
certificates evidencing the Shareholder Shares issued to
such transferee shall contain the Legend.
3. Effective Date. This Agreement shall become effective
immediately upon the date (the "Effective Date") of the order or
directive from the Department of Corporations of the State of
California authorizing the offering, sale and issuance of the
Shares in the State of California.
4. Termination. This Agreement shall terminate upon
written order or direction of the Commissioner of the Department
of Corporations of the State of California thus removing the
Disabilities. In the event that the Disabilities are removed as
to a portion of the Shares, the shares from which the
Disabilities have been removed will be allocated pro rate between
the Xxxxx Shares and the Xxxxx Shares.
5. Cooperation. The Company and Shareholders agree to
cooperate fully with one another in order to achieve the purposes
of this Agreement and to take all actions and execute and deliver
all documents. whether or not specifically described herein, that
may be required to carry out the purposes and intent of this
Agreement.
6. Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of Nevada.
7. Amendments and Modifications. The Company and the
Shareholders agree that no amendment or modification of this
Agreement shall be deemed effective unless and until it is an
express writing executed by both the Company and the
Shareholders, and notification of such amendment or modification
is provided to the Department of Corporations of the State of
California.
8. Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed an
original, but all of which together shall constitute one
instrument.
9. Binding Effect. This Agreement shall be binding upon
and inure to the benefit of the parties and their respective
successors, predecessors, parents, affiliates, subsidiaries,
divisions, officers, directors, shareholders, employees,
advisors, consultants, insurers, attorneys, heirs, executors,
administrators and any persons claiming rights by, through or
under them.
In witness whereof, the Company and Shareholders have signed
this Agreement as of the date first written above.
"Xxxxx" "Xxxxx"
Xxxxxxx Xxxxx Xxxxx Xxxxx
By:____________________________ By:___________________________
Xxxxxxx Xxxxx, an individual Xxxxx Xxxxx, an individual
The "Company"
Casinovations Incorporated
By:_______________________________________
Xxxxxx X. Xxxx
Its: Chief Executive Officer and President
