EXHIBIT 2.3
STOCKHOLDERS' AGREEMENT
BY AND AMONG
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇
SKYEPHARMA PLC
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
FIFTH AVENUE CAPITAL, INC.
AND
VITAL LIVING, INC.
(A NEVADA CORPORATION)
DATED: AUGUST 20, 2003
STOCKHOLDERS' AGREEMENT
TABLE OF CONTENTS
Page
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1. CORPORATE GOVERNANCE 3
1.1. Board of Directors. 3
1.2. Obligations of the Company. 6
1.3. Articles of Incorporation and the By-Laws. 6
2. MISCELLANEOUS 6
2.1. Term. 6
2.2. No Conflicting Agreements. 6
2.3. Injunctive Relief. 6
2.4. Notices. 7
2.5. Governing Law. 8
2.6. Headings. 8
2.7. Entire Agreement; Amendment. 8
2.8. No Waiver. 8
2.9. Counterparts. 8
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STOCKHOLDERS' AGREEMENT
AGREEMENT dated as of August 20, 2003 by and among ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇, an individual having an office at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇, ("▇▇▇▇▇"); ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, an individual having an office at ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ("▇▇▇▇▇▇"), ▇▇▇▇▇▇ ▇▇▇▇▇▇, an individual having
an office at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ("HANNAH"), SKYEPHARMA
PLC, a company incorporated under the laws of England and Wales having its
office at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇ ("Skye"), FIFTH AVENUE CAPITAL
INC, a corporation having its offices at ▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇ ("Fifth Avenue Capital"), and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, an individual having his
office at ▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ("▇▇▇▇▇▇") and VITAL
LIVING, INC., a Nevada corporation having an office at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇ (THE "COMPANY"). Edson, Benson, and Hannah and
are collectively referred to as the "FOUNDERS GROUP", and Fifth Avenue Capital
and ▇▇▇▇▇▇ are collectively referred to herein as the "▇▇▇▇▇▇ GROUP" and Skye
and the ▇▇▇▇▇▇ Group are together referred to herein as the "ENI GROUP". Each of
the parties hereto (other than the Company) and any other person who shall
hereafter become a party to or agree to be bound by the terms of this agreement
(the "Agreement") is sometimes referred to as a "STOCKHOLDER" and all of such
parties are referred to as the "STOCKHOLDERS."
W I T N E S S E T H:
WHEREAS, the Company, VLEN Acquisition Corp., Inc., a wholly owned
subsidiary of the Company and e-nutriceuticals, Inc., a Delaware corporation
("e-nut") are parties to a Merger Agreement dated August 14, 2003 (the "Merger
Agreement"),
WHEREAS, the execution and delivery of this Agreement is a condition to
the closing of the Merger Agreement,
WHEREAS, (i) pursuant to the Merger Agreement, the members of the ENI
Group listed on the signature pages hereto will be issued an aggregate of
23,065,123 shares of Common Stock ("ACQUISITION STOCK"); of which 8,860,575
shares of Acquisition Stock of the ▇▇▇▇▇▇ Group are being held in escrow
pursuant to the terms of the Merger Agreement and a certain Securities Escrow
Agreement of even date herewith (the "Escrow Agreement") and (ii) Skye will be
purchasing 1,000,000 shares of Series D Convertible Preferred Stock (the
transactions described by clauses (i) and (ii), the "Transactions");
WHEREAS, as of the closing of the Transactions, the holdings of Common
Stock and options, warrants or convertible securities to purchase Common Stock,
and other voting securities of the Company (collectively "Shares") by the
Founders Group and the ENI Group) will be as follows:
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NUMBER OF OPTIONS,
WARRANTS OR
STOCKHOLDER NAME NUMBER OF SHARES CONVERTIBLES
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ 4,046,950 1,000,000
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 30,000 6,310,000
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▇▇▇▇▇▇ ▇▇▇▇▇▇ 536,900 Zero
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Fifth Avenue Capital, Inc. 8,860,575 0
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▇▇▇▇▇▇▇ ▇▇▇▇▇▇ * 30,000
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Skye 14,204,548 1,000,000
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*See Fifth Avenue Capital, Inc.
WHEREAS, the parties hereto deem it in their best interests and in the
best interests of the Company to provide consistent and uniform management for
the Company and to regulate certain of their rights in connection with their
interests in the Company, and desire to enter into this Agreement in order to
effectuate those purposes.
NOW, THEREFORE, in consideration of the premises and of the covenants,
terms and conditions herein contained, the parties hereto mutually agree as
follows:
1. CORPORATE GOVERNANCE
1.1. BOARD OF DIRECTORS.
(a) NUMBER OF DIRECTORS. The Company shall be
governed by a Board of Directors consisting of nine (9) members, with three
vacancies existing at the consummation of the Transactions.
(b) NOMINATION AND ELECTION OF DIRECTORS. The
following procedures shall govern the nomination and election of directors of
the Company:
(i) For so long as the Founders Group
shall beneficially own ,in the aggregate, at least 65% of the Shares
held by them on the date hereof, after the consummation of the
Transactions, they shall be entitled to nominate and have elected four
(4) directors acceptable to them in their sole discretion (the
"Founders Directors").
(ii) For so long as the ▇▇▇▇▇▇ Group
shall beneficially own at least 65% of the Shares held by them on the
date hereof, after the consummation of the Transactions, they shall be
entitled to nominate and have elected one (1) director (the "▇▇▇▇▇▇
Director");
(iii) For so long as Skye shall
beneficially own at least 65% of the Shares held by Skye on the date
hereof after the consummation of the Transactions, Skye
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shall be entitled to nominate and have elected one (1) director (the "Skye
Director", and, together with the ▇▇▇▇▇▇ Director, the "ENI Directors").
(c) BOARD OF DIRECTORS. The Board of Directors
of the Company shall consist of the following seven members:
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NAME OF DIRECTOR TYPE OF DIRECTOR
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ Founders Director
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Founders Director
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▇▇▇▇▇▇ ▇. ▇▇▇▇ Founders Director
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▇▇▇▇▇▇ ▇▇▇▇▇▇ Founders Director
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▇▇▇▇▇ ▇▇▇▇▇ Independent Director
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▇▇▇▇▇▇ ▇▇▇▇▇▇ Independent Director
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▇▇▇▇▇▇ ▇. Quick III Independent Director
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The ENI Directors shall be appointed in accordance with Section 1.1(e)
hereto subsequent to the consummation of the Transactions.
For purposes hereof, the term "Independent Director" shall mean a
person who is independent of the Company's management and who is not a director,
officer, in the Group of, or an employee of any Stockholder. "Group" shall mean,
in the case of any Stockholder, such Stockholder and (i) all affiliates of such
Stockholder, (ii) all partners of such Stockholder if such Stockholder is a
partnership, (iii) any person to which such Stockholder transfers all or
substantially all of its assets or any entity into which such Stockholder
merges, and (iv) in the case of a Stockholder that is an individual, the spouse
and lineal descendants of such Stockholders, any trust for the benefit of such
spouse or any such lineal descendant, or any other family member of such
Stockholder.
(d) REMOVAL OF DIRECTORS. Any director of the
Company may be removed from the Board in the manner allowed by law and the
Company's Certificate of Incorporation or By-Laws, except as otherwise provided
in this Section 1.1(d). With respect to the Founders Directors, the ▇▇▇▇▇▇
Director and the Skye Director, each holder of Shares agrees not to take any
action or to cause the Company to take such action to remove, with or without
cause, such director of the Company. Notwithstanding the foregoing, the ▇▇▇▇▇▇
Group and/or the ▇▇▇▇▇▇ Director shall at all times have the right to recommend
the removal, with or without cause, of any ▇▇▇▇▇▇ Director; Skye and/or the Skye
Director shall at all times have the right to recommend the removal, with or
without cause, of the Skye Director; and the Founders Group and the Founders
Directors shall have the right to recommend the removal, with or without cause,
of any Founders Directors. If the removal of any director is recommended as
provided in the immediately preceding sentence, then the Stockholders shall
immediately cause a special meeting of stockholders to be held, or shall act by
written consent without a meeting, for the purpose of removing such director,
and each Stockholder agrees to vote all its Shares, or to execute a written
consent in respect of all such Shares, for the removal of such director.
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(e) VACANCIES. If at any time a vacancy is
created or exists on the Board of Directors, the remaining directors (if any)
representing the Stockholder whose Board seat is vacant shall have the right to
designate and elect the person to fill such vacancy; subject to consultation
with the other parties hereto, it being acknowledged that the final
determination shall be made by the Stockholder whose board position is affected
by such vacancy. If no directors representing the Stockholder remain as a result
of such vacancy, the Stockholder shall have the right to designate and elect the
person to fill such vacancy. All Stockholders shall vote in favor of electing
such designated director to fill the vacancy and all such persons shall take the
necessary actions to amend the by-laws to reflect the provisions of this
Agreement.
(f) COVENANT TO VOTE. Each of the Stockholders
agrees to vote, in person or by proxy, all of the Shares beneficially owned by
such Stockholder whether currently owned or hereinafter acquired (which for all
purposes shall include all Acquisition Shares held pursuant to the Escrow
Agreement unless Acquisition Shares are returned to the Company under the terms
thereof, in which event those returned shares shall be excluded), at any annual
or special meeting of stockholders of the Company called for the purpose of
voting on the election of directors or by consensual action of stockholders
without a meeting with respect to the election of directors, in favor of the
election of the directors nominated by Skye, the ▇▇▇▇▇▇ Group and the Founders
Group, respectively, as the case may be, in accordance with Section 1.1(b)
hereof. Each Stockholder shall vote the Shares owned by such Stockholder and
shall take all other actions necessary to ensure that the Company's Articles of
Incorporation and By-Laws do not at any time conflict with the provisions of
this Agreement. Each Stockholder agrees that such Stockholder shall not deposit
any Shares in a voting trust or subject the Shares to any agreement, arrangement
or understanding with respect to the voting of the Shares of Common Stock
inconsistent with this Agreement.
(g) QUORUM. No action shall be taken at any
meeting of the Board of Directors of the Company, except for the adjournment of
such meeting, unless a quorum shall be present and included at such meeting
shall be one Independent Director. For purposes of a quorum, any director may be
present at any meeting in person, by means of telephone or similar
communications equipment by means of which each person participating in the
meeting can hear and speak to each other or, to the extent permitted under
applicable law, by proxy or by nominee director. No action shall be taken at any
meeting of stockholders of the Company unless a majority of the Shares
beneficially owned by the Founders Group and Skye are represented at the
meeting, in person or by proxy.
(h) COMMITTEES OF THE BOARD. The Board shall
appoint such committees, including an audit committee and a compensation
committee, as shall be permissible under applicable provisions of the Business
Corporation Law of the State of Nevada and as at all times the Board shall deem
reasonable and necessary.
(i) SPECIAL MEETINGS OF DIRECTORS. Special
meetings of the Board may be called by the President of the Company and shall be
called by the President of the Company or the Secretary of the Company upon the
written request of any Director. To the extent necessary, the parties hereto
agree, as Stockholders, to approve any amendment to effectuate the foregoing.
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(j) SPECIAL MEETINGS OF STOCKHOLDERS. Special
meetings of stockholders may be called by the Board and shall be called by the
President of the Company or the Secretary of the Company upon the written
request of any Director. To the extent necessary, the parties hereto agree, as
Stockholders, to approve any amendment to effectuate the foregoing.
(k) BOARD OF DIRECTORS AND OFFICERS OF
SUBSIDIARIES. The composition of the board of directors and officers of e-nut
shall require the approval of a majority of the Directors.
1.2 OBLIGATIONS OF THE COMPANY. The Company agrees to use
its best efforts to ensure that the rights granted hereunder are effective and
that the parties hereto enjoy the benefits hereof. Such actions include, without
limitation, the use of the Company's best efforts to cause the nomination and
election of the directors designated as provided above.
1.3 ARTICLES OF INCORPORATION AND THE BY-LAWS. The
Articles of Incorporation and the By-Laws shall be amended as necessary and
appropriate to give effect to the provisions set forth in this Agreement.
2. MISCELLANEOUS
2.1. TERM. This Agreement shall terminate on the date of
the first to occur of the following events: (i) with respect to any Stockholder,
at such point in time when such Stockholder and its Group no longer beneficially
owns 50% of the Shares beneficially owned by such Stockholder on the date hereof
after consummation of the Transactions; (ii) Bankruptcy, receivership, or
dissolution of the Company; (iii) the sale, lease, assignment or other transfer
of all or substantially all of the assets of the Company to a third party,
whether effected through an asset transaction, a stock transaction, a Merger, or
otherwise; (iv) the voluntary agreement of all the parties who are then bound by
the terms hereof; (v) the acquisition of all the Shares by one of the
Stockholders; or (vi) three years from the date of this Agreement.
2.2. NO CONFLICTING AGREEMENTS. Each party hereto
represents and warrants to the other parties that it is not party to any other
voting agreement with respect to the Company's Common Stock which would conflict
with its duty to vote its shares as required under this Agreement and its other
obligations hereunder. To the extent that conflicting obligations result from
contractual obligations arising from agreements or understanding either before
or after the date of this Agreement, each party including the Company covenants
to effect the provisions of this Agreement.
2.3. INJUNCTIVE RELIEF. It is hereby agreed and
acknowledged that it will be impossible to measure in money the damages that
would be suffered if the parties fail to comply with any of the obligations
herein imposed on them and that in the event of any such failure, an aggrieved
person will be irreparably damaged and will not have an adequate remedy at law.
Any such person shall, therefore, be entitled to injunctive relief, including
specific performance, to enforce such obligations, and if any action should be
brought in equity to enforce any of the
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provisions of this Agreement, none of the parties hereto shall raise the defense
that there is an adequate remedy at law.
2.4. NOTICES. All notices, statements, instructions or
other documents required to be given hereunder, shall be in writing and shall be
given either by hand delivery, by overnight delivery service, by facsimile
transmission or by mailing the same in a sealed envelope, first-class mail,
postage prepaid and either certified or registered, return receipt requested,
addressed as follows:
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IF TO THE FOUNDERS GROUP, TO: Vital Living, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
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WITH A COPY TO THEIR COUNSEL: ▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
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IF TO THE ▇▇▇▇▇▇ GROUP, SEND NOTICES TO THEM AT THE ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
NOTICE ADDRESS GIVEN ON THE SIGNATURE PAGE HEREOF: ▇/▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Capital
▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
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WITH A COPY TO THEIR COUNSEL: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
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IF TO SKYE: Attn: Company Secretary
SkyePharma PLC
▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇
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WITH A COPY TO THEIR COUNSEL: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇
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and to the other parties at their addresses reflected in the stock records of
the Company. Each Stockholder, by written notice given to the Company in
accordance with this Section 2.4 may change the address to which notices,
statements, instruction or other documents are to be sent to such Stockholder.
All notices, statements, instructions and other documents hereunder that are
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(i) mailed shall be deemed to have been given on the date of mailing, (ii) sent
by hand delivery or by facsimile transmission shall be deemed to have been given
when received, or (iii) sent by overnight delivery service shall be deemed to
have been given one business day after sent. Whenever pursuant to this Agreement
any notice is required to be given by any Stockholder to any other Stockholder
or Stockholders, such Stockholder may request from the Company a list of
addresses of all Stockholders of the Company, which list shall be promptly
furnished to such Stockholder.
2.5. GOVERNING LAW. Regardless of the place of execution,
this Agreement shall be governed by and construed in accordance with the laws of
the State of New York, applicable to contracts made and to be performed entirely
within such state.
2.6. HEADINGS. All headings are inserted herein for
convenience only and do not form a part of this Agreement.
2.7. ENTIRE AGREEMENT; AMENDMENT. This Agreement and the
other agreements referenced herein contain the entire agreement among the
parties hereto with respect to the transactions contemplated herein and
supersede all prior written agreements including any voting agreements or
arrangements and negotiations and oral understandings, if any, and this
Agreement may not be amended, supplemented or discharged except by an instrument
in writing signed by all the Stockholders. Concurrently with such amendment or
modification of this Agreement the Articles of Incorporation and By-Laws of the
Company shall be amended by necessary corporate action. In the event that any
Stockholder, or the Company shall be required, as a result of the enactment,
amendment or modification, subsequent to the date hereof, of any applicable law
or regulations, or by the order of any governmental authority, to take any
action which is inconsistent with or which would constitute a violation or
breach of any terms of this Agreement, then the Stockholders, and the Company
shall use their best efforts to negotiate an appropriate amendment or
modification of, or waiver of compliance with, such terms.
2.8. NO WAIVER. No failure to exercise and no delay in
exercising any right, power or privilege of a party hereunder shall operate as a
waiver nor a consent to the modification of the terms hereof unless given by
that party in writing.
2.9. COUNTERPARTS. This Agreement may be executed in two
or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument. Fax copy signatures
shall be given the same effect as original signatures.
[rest of page left blank intentionally - next page is signature page]
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IN WITNESS WHEREOF, the parties here have caused this
Agreement to be duly executed on the date first written above.
SKYEPHARMA PLC VITAL LIVING, INC.
By: ______________________________ By:_________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, President
By: ________________________________
__________________________________ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Executive Vice
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Individually President
__________________________________ ____________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Individually Fifth Avenue Capital Inc.
__________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Individually
__________________________________
▇▇▇▇▇▇ ▇▇▇▇▇▇, Individually
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