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.
ARTICLE II.
CAPITALIZATION, GOVERNANCE AND
MANAGEMENT OF THE COMPANY
(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
(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.
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.
(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.
(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;
(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;
(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.
(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