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STOCKHOLDER AGREEMENT

Shareholder Agreement

STOCKHOLDER AGREEMENT | Document Parties: OCTAVIAN GLOBAL TECHNOLOGIES, INC. | Ziria Enterprises Limited You are currently viewing:
This Shareholder Agreement involves

OCTAVIAN GLOBAL TECHNOLOGIES, INC. | Ziria Enterprises Limited

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Title: STOCKHOLDER AGREEMENT
Governing Law: New York     Date: 5/20/2009

STOCKHOLDER AGREEMENT, Parties: octavian global technologies  inc. , ziria enterprises limited
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STOCKHOLDER AGREEMENT

 

THIS STOCKHOLDER AGREEMENT is dated as of May 14, 2009 (this “ Agreement ”) by and among Octavian Global Technologies, Inc. (the “ Company ”), Ziria Enterprises Limited (“ Ziria ”), Harmen Brenninkmeijer (“ HB ”) and Austrian Gaming Industries GmbH (“ AGI ” and collectively with Ziria and HB, the “ Stockholders ”).

 

RECITALS

 

WHEREAS , the Stockholders are presently the owners and holders of a majority of the issued and outstanding shares of capital stock of the Company (the “ Common Stock ”) on a non-diluted and fully-diluted basis (the shares subject to this Agreement, including shares issuable pursuant to convertible instruments, warrants or options, and such instruments, the “ Shares ”).

 

WHEREAS , the Stockholders wish to set forth in this Agreement certain terms and conditions regarding the ownership of the shares of Common Stock, including certain restrictions on the transfer of such shares, and the management of the Company and the Subsidiaries.

 

NOW, THEREFORE , in consideration of the mutual agreements contained herein, the parties hereto agree as follows:

 

ARTICLE I.

DEFINITIONS

 

1.1            Definitions .  In addition to the terms defined elsewhere in this Agreement: the following terms have the meanings set forth in this Section 1.1:

 

 “ Affiliate ” means, with respect to any Person, (a) any Person directly or indirectly controlling, controlled by or under common control with such Person, (b) any Person directly or indirectly owning or controlling 5% or more of any class of outstanding voting securities of such Person or (c) any officer, director, general partner or trustee of any such Person described in clause (a) or (b)

 

 “ Business Day ” means any day except Saturday, Sunday, any day which is a federal legal holiday in the United States or any day on which banking institutions in the State of New York are authorized or required by law or other governmental action to close.

 

Common Stock Equivalents ” means any securities of the Company or the Subsidiaries which would entitle the holder thereof to acquire at any time Common Stock, including, without limitation, any debt, preferred stock, rights, options, warrants or other instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.

 

Subsidiary ” means any subsidiary of the Company.

 

 

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ARTICLE II.

CAPITALIZATION, GOVERNANCE AND MANAGEMENT OF THE COMPANY

 

2.1            Board of Directors .

 

(a)           The Stockholders agree that the board of directors of the Company (the “ Board ”) shall consist of five members which shall include each of the following:

 

(i)           HB, who shall also be the Chairman of the Board and the Chief Executive Officer of the Company;

 

(ii)          Designee of AGI (the “ AGI Designee ”);

 

(iii)         Designee of HB (the “ HB Designee ”);

 

(iv)         Peter Brenninkmeijer; and

 

(v)          Peter Moffitt.

 

(b)           Except as set forth in Section 2.1(c) below, no additional seats on the Board shall be created and no other person or entity may be appointed to the Board without the prior written consent of HB and AGI; provided , however , (i) AGI is permitted to remove the AGI Designee and replace with a different designee who shall in turn become the AGI Designee, at AGI’s sole discretion, (ii) HB is permitted to remove the HB  Designee and replace with a different designee who shall in turn become the HB Designee, at HB’s sole discretion, and (iii) HB is authorized to remove Peter Brenninkmeijer and Peter Moffitt and appoint in their place (with AGI’s prior written consent) two additional independent directors to fill any such vacancy.

 

(c)           The Stockholders agree that, subject to the terms hereof, the management of the Company shall be conducted in the manner that it has been conducted immediately prior to the execution of this Agreement; provided that AGI shall have the right, in its sole discretion, to cause the AGI Designee to be a member of the Company’s executive team which position shall have such responsibilities as shall be determined at the time of such naming (upon the reasonable satisfaction of HB and the AGI Designee).  Except as set forth herein or as may be provided for in HB’s employment agreement with the Company (the “ Employment Agreement ”), HB may not be removed as Chairman of the Board or Chief Executive Officer absent (i) gross negligence, willful misconduct in the performance of HB’s duties or a conviction of HB of a felony or (ii) the unanimous consent of all members of the Board other than HB; and, provided such removal is not as a result of Cause (as defined in the Employment Agreement), gross negligence or willful misconduct in the performance of HB’s duties, conviction of a felony by HB, violation of this Agreement by HB or Ziria through gross negligence or willful misconduct or otherwise as a result of any material violation by HB of the terms of the Employment Agreement, cash payment by the Company to HB of: (1) the remainder of HB’s Base Salary (as defined in the Employment Agreement) and (2) the issuance of any earn-out shares of Common Stock to which HB would otherwise be entitled for the calendar year in which HB is removed.  Additionally, upon HB’s removal for Cause, gross negligence or willful misconduct in the performance of HB’s duties, a conviction of HB of a felony or violation by HB or Ziria of this Agreement through gross negligence or willful misconduct or otherwise as a result of any material violation by HB of the terms of the Employment Agreement, the Company shall have the option to purchase for cash: (A) all or any portion of any outstanding shares of Common Stock then held by Ziria and HB, including, without limitation any Earn-Out Shares, at the greater of $3.10 (subject to adjustment for reverse and forward stock splits and the like) and the average market price of the Common Stock for the 30 day period immediately prior to such removal and (B) all or any portion of any Common Stock Purchase Warrants or options held by Ziria and HB for an amount equal to the Black Scholes Value of such warrants and options as calculated pursuant to Section 3(e) of the Common Stock Purchase Warrants issued pursuant to that certain Securities Purchase Agreement, dated October 30, 2008, by and among the Company and the purchasers signatory thereto.  In the event the Company determines not to exercise the foregoing option, AGI shall have the option to purchase all or any portion of such Common Stock, Common Stock Purchase Warrants or options then held by Ziria and HB.  In the event HB’s removal by the Company is for any other reason, the option of the Company set forth above shall be a binding obligation of the Company.  The rights, remedies, penalties and obligations of the parties hereto are in addition to, and not in substitution for, the terms and conditions of the Employment Agreement.

 

 

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2.2            Meetings of the Board .  The holders of the Shares will vote at regular or special meetings of stockholders, and give written consent with respect to, such Shares that they own (or as to which they have voting power) to ensure that the size of the Board shall be set and remain at five directors.

 

2.3            Director Fees and Expenses . The Company shall pay to the independent directors such reasonable fees as may be determined by a compensation committee to be created at the Closing, such committee to consist of HB and the AGI Designee.  The Company will cause each non-employee director serving on the Board to be reimbursed for all reasonable out-of-pocket costs and expenses incurred by him or her in connection with such service in accordance with compensation policies established by the Company’s compensation committee.

 

2.4            Approvals by the Board .

 

(a)           Except as required by applicable law and the by-laws of the Company, all actions requiring the approval of the Board shall be approved by a majority of the directors present at any duly convened Board meeting or by unanimous written consent of the directors without a meeting, in each case in accordance with the provisions of the Nevada Revised Statutes and the by-laws of the Company.

 

(b)           A quorum for meetings of the Board shall consist of a majority of the total authorized membership of the Board. If a quorum is not achieved at any duly called meeting, such meeting may be postponed to a time no earlier than 48 hours after written notice of such postponement has been given to the directors, and, at any such postponed meeting, a quorum shall consist of a majority of the total authorized membership of the Board.  Meetings of the Board may be called by the Chairman at any time, provided that at least 24 hours’ written notice of such meeting has been provided to the directors or notice thereof has been waived by each director.

 

 

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(c)           In addition to any vote or consent of the Board or the stockholders of the Company as required by applicable law and the by-laws of the Company, the Company shall not take (or, to the extent applicable, permit any Subsidiary to take) any of the following actions, or enter into any commitment to take any of the following actions, without the prior approval of a majority of the Board then in office at a duly called meeting of the Board (“ Majority Approval ”):

 

(i)           the incurrence, assumption or refinancing of any indebtedness or liens for borrowed money (including, without limitation, through capital leases, acting as a surety, the issuance of debt securities or the guarantee of indebtedness of another Person) in an amount less than $500,000USD per annum and not previously approved by the Board;

 

(ii)          the incurrence of capital expenditures between $200,000 and $1,000,000;

 

(iii)         enter into any joint venture with or equity investment in any Person, including any equity investment in any Subsidiary, in any amount less than $250,000USD;

 

(iv)         engage in transactions that are material to the Company with Affiliates, including, without limitation, contracts, arrangements, agreements or understandings with any member of the Board or any Affiliate or entity owned or controlled by any Board member or in which any Board member owns more than 5% of the equity of such entity (and such affiliated Board member shall not be permitted to vote on such matter or related matters);

 

(v)          granting or revoking any proxy or power attorney held by or for the benefit of the Company or any Subsidiary, other than (1) powers of attorney granted to Company employees or agents to permit the conduct of the Company’s ordinary course of business and (2) for those matters for which Special Approval is required;

 

(vi)         making a tax election or entering into any material agreement in respect of taxes, including the settlement of any material tax controversy, or similar action relating to the filing of any tax return or the payment of any tax, if such election, agreement or action would reasonably be expected to result in any direct tax liability for any of the Stockholders or any direct or indirect holder of equity in any of the Stockholders;

 

(vii)        repay, repurchase or offer to repay, repurchase or otherwise acquire more than a de minimis number of shares of Common Stock or other securities of the Company;

 

(viii)       the acquisition, disposition or encumbrance of any real estate for $500,000USD or less; or

 

(ix)          enter into any agreement or understanding with respect to any of the foregoing.

 

 

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(d)           In addition to any vote or consent of the Board or the stockholders of the Company required by applicable law, the Company shall not take (or, to the extent applicable, permit any Subsidiary to take) any of the following actions, or enter into any arrangement or contract to do any of the following actions, without the prior approval of a majority of the Board then in office at a duly called meeting of the Board, which must also include the approval of the AGI Designee (“ Special Approval ”):

 

(i)           the incurrence, assumption or refinancing of any indebtedness or liens for borrowed money (including, without limitation, through capital leases, acting as a surety, the issuance of debt securities or the guarantee of indebtedness of another Person) in an amount greater than $500,000USD per annum;

 

(ii)          any amendment to the certificate of incorporation, by-laws or other organizational document of the Company or any material subsidiary;

 

(iii)         voluntary election by the Company to liquidate or dissolve or to commence, or consent to the filing of, bankruptcy or insolvency proceedings under applicable law or the adoption of a plan with respect to any of the foregoing;

 

(iv)        consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian or any similar official for itself or any other entity;

 

(v)         make an assignment of its assets for the benefit of its creditors or an assignment of the assets of another entity for the benefit of such entity’s creditors;

 

(vi)        any amendment to, or granting of any waiver under, this Agreement in a manner materially adverse to the Company;

 

(vii)       approval of the Annual Budget and Business Plan (the “ Business Plan ”) of the Company and the Subsidiaries (and any material revisions thereto, including any increases of capital expenditures that would result in aggregate capital expenditures in excess of 20% of the amount budgeted for capital expenditures in the Business Plan);

 

(viii)      any joint venture with or equity investment in any Person, including any equity investment in any Subsidiary, in any amount more than $100,000USD;

 

(ix)         incur capital expenditures in excess of $1,000,000USD per annum;

 

(x)          any material transaction not contemplated in the most current Business Plan;

 

 

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(xi)         the commencement of any proposed transaction or series of related transactions involving a (A) the sale of fifteen percent (15%) or more of the assets of the Company to an Unaffiliated Person (as defined below), (B) a sale resulting in more than 50% of the shares of Common Stock of the Company being held by an Unaffiliated Person (C) a merger, consolidation, recapitalization or reorganization of the Company with or into another Unaffiliated Person. “ Unaffiliated Person ” means any Person who is not a Stockholder or an Affiliate of a Stockholder;

 

(xii)        any acquisition by the Company or any Subsidiary of the stock, other equity interests or assets of any Person (“ Person ” shall mean any individual, corporation, limited liability company, limited or general partnership, joint venture, association, joint-stock company, trust, unincorporated organization, government or any agency or political subdivisions thereof), in one transaction or a series of related transactions, or disposition of assets of the Company or any Subsidiary or the capital stock or other equity interests of any Subsidiary;

 

(xiii)       the issuance of Common Stock or Common Stock Equivalents other than pursuant to a stock or option plan previously approved by the Board;

 

(xiv)      create, or authorize the creation of, or issue or obligate itself to issue shares of, any additional class or series of capital stock if the same ranks pari passu or senior to the Common Stock with respect to the distribution of assets on the liquidation, dissolution or winding up of the Company, the right to the payment of dividends, the right of redemption or any other rights inherent in or applicable to the Common Stock, or increase the authorized number of shares of Common Stock, or increase the authorized number of shares of any additional class or series of capital stock of the same rank or that ranks junior to the Common  Stock with respect to the distribution of assets on the liquidation, dissolution or winding up of the Company, the right to the payment of dividends, the right of redemption or any other rights inherent in or applicable to the Common Stock, other than issuances pursuant to an employee stock option plan duly approved by the Board;

 

(xv)        defining or amending any material business practice or material policy of the Company or any Subsidiary or any transaction not in the ordinary course of business;

 

(xvi)       any payment or declaration of any dividend or other distribution on or in respect of any equity of the Company, or any redemption of any equity of the Company;

 

(xvii)      change the Company’s independent public accountants;

 

(xviii)     any material changes in any significant accounting policy of the Company or the Subsidiaries, taken as a whole;

 

 

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(xix)        the acquisition, disposition or encumbrance of any real estate for more than $500,000USD;

 

(xx)         creating or modifying any bonus, pension, retirement, profit sharing, savings, deferred compensation, incentive or other fringe, perquisite or employee benefit plans, programs, policies, and/or any agreements or arrangements for or with executive personnel or members of the Board, including, without limitation, employment, service or severance agreements; or

 

(xxi)        take any action in furtherance of the foregoing.

 

(e)           In the event of any breach of this Section 2.4 by HB or Ziria, or conviction of a felony by HB, or otherwise as a result of any material violation by HB of the terms of the Employment Agreement, and upon receipt of AGI’s written notice of such breach, there shall be a cure period of thirty (30) days in which HB may cure such breach, and if not cured: (i) HB shall immediately resign his positions as an officer, employee and member of the Board of the Company (without the payment of any severance, any of the cash payments set forth in Section 2.1(c) above or any other compensation), (ii) notwithstanding anything contained in this Agreement to the contrary, AGI shall have the right, in its sole discretion, to appoint new officers and directors to replace HB, the HB Designee and Peter Brenninkmeijer and (iii) immediately following the appointments of such new directors, this Agreement shall be deemed terminated and of no further force or effect.

 

2.5            Certain Actions, Voting Proxy .

 

(a)           Each Stockholder shall vote all of its Shares and shall take all other necessary or desirable actions within such Stockholder’s control (including, without limitation, attending meetings in person or by proxy for purposes of obtaining a quorum, execution of written consents in lieu of meetings and approval of amendments and/or restatements of the Company’s certificate of incorporation or by-laws), and the Company shall take all necessary and desirable actions within its control (including, without limitation, calling special board and stockholder meetings and approval of amendments and/or restatements of the Company’s certificate of incorporation or by-laws), at regular or special meetings of the Stockholders and/or give written notice with respect to such Shares in accordance with the provisions of this Agreement.

 

(b)           Each Stockholder, in connection with any vote or action by written consent of the stockholders of the Company relating to any matter (including, but not limited to, any Transfer (as defined below) of the Shares or amendment of the Company’s certificate of incorporation) requiring consent as specified in this Agreement, shall vote all of its Shares: (i) against (and not act by written consent to approve) such matter if such matter has not received such required consent, (ii) for (or act by written consent to approve) any matter that has received such required consent and which has been submitted to the stockholders of the Company for approval and (iii) otherwise take or cause to be taken, all other reasonable actions, at the expense of the Company, required, to the extent permitted by applicable law, to prevent the taking of any action by the Company that has not received such required consent, or to approve the taking of any such action that has received such required consent.  “ Transfer ” means, directly or indirectly, to sell, transfer, assign, pledge, encumber, hypothecate or similarly dispose of, either voluntarily or involuntarily, or to enter into any contract, option or other arrangement or understanding with respect to the sale, transfer, assignment, pledge, encumbrance, hypothecation or similar disposition of, any Shares owned by a Person or any interest (including but not limited to a beneficial interest) in any Shares owned by a Person.

 

 

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(c)           Each Stockholder hereby grants an irrevocable proxy to vote or act by written consent with respect to such Stockholder’s Shares, and grant a consent, proxy or approval in respect of such Shares, in the event that such Stockholder fails at any time to vote or act by written consent with respect to any of its Shares in the manner set forth in this Agreemen


 
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