EXHIBIT 10.3

 

STOCKHOLDERS AGREEMENT

Among

DS HEALTHCARE GROUP, INC.

CAREY WILLIAMS

and

STEFAN RUSSELL

Dated: ________ __, 2015

 

 

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STOCKHOLDERS AGREEMENT

THIS STOCKHOLDERS AGREEMENT (this “Agreement”), to be effective as of _______
[*], 2015 (the “Effective Date”) is made and entered into by and among (A) DS
Healthcare Group, Inc., a Florida corporation (“DSH” or the “Corporation”); (B)
Stefan Russell (“Russell”); (C) Carey Williams, an individual (“Williams”); (D)
W/R Group, Inc. (formerly, WRG Acquisition Corporation), an Arizona corporation
(“WRG”) and (E) WR Group IC-Disc, Inc. (formerly, WRG Acquisition Corp.), a
Nevada corporation (“WRG DiscCo”).  Williams and Russell are hereinafter
sometimes individually referred to as a “Stockholder” or the “Stockholders” and
the Corporation, the Stockholders, WRG and WRG DiscCo are hereinafter sometimes
individually referred to as a “Party” and collectively as the “Parties.”

I N T R O D U C T I O N:

This Agreement is being entered into by the Parties with reference to the
following:

A.

Pursuant to the terms of an asset purchase agreement, dated as of August 31,
2015 (the “Asset Purchase Agreement”) among DSH, the Executive, Stefan Russell,
WRG Liquidation Corp. (formerly W/R Group, Inc.), an Arizona corporation (the
“Seller”) and DiscCo Liquidation Corp. (formerly, WR Group IC-Disc, Inc.), a
Nevada corporation (“DiscCo”), WRG acquired substantially all of the assets and
Business of the Seller (the “Purchased Assets”) and assumed certain of the
Assumed Liabilities and obligations of the Seller.

B.

Effective as of July 31, 2015, the Corporation, WRG DiscCo, DiscCo and Russell,
as sole stockholder of DiscCo, entered into an agreement and plan of merger and
reorganization (the “Merger Agreement”), pursuant to which DiscCo was merged
with and into WRG DiscCo (the “Merger”), with WRG DiscCo as the surviving
corporation of such Merger.

C.

Simultaneous with the date of this Agreement, (a) the Seller changed its
corporate name from W/R Group, Inc. to WRG Liquidation Corp., (b) DiscCo changed
its corporate name from WR Group IC-Disc, Inc. to DiscCo Liquidation Corp., and
(c) WRG DiscCo changed its corporate name from WRG Acquisition Corp. to WR Group
IC-Disc, Inc., and (d) WRG changed its corporate name from WRG Acquisition
Corporation to W/R Group, Inc.

D.

This Agreement has been entered into and executed by the Parties simultaneously
with and as a condition to the closing of the purchase of the Purchased Assets
under the Asset Purchase Agreement and the Merger pursuant to the Merger
Agreement.

E.

On the Effective Date, WRG has entered into an employment agreement with
Williams attached and annexed to the Asset Purchase Agreement as Exhibit E and
the Corporation and WRG DiscCo has entered into a separate employment agreement
with Russell attached and annexed as Exhibit F to the Asset Purchase Agreement
(collectively, the “Employment Agreements”) which provides, inter alia, for
Williams to serve as Chief Executive Officer of WRG and Russell to serve as an
Executive Vice-President of DHS and Chief Executive Officer of WRG DiscCo.

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E.

The Parties hereto also desire to set forth (i) the terms of the ongoing
relationship between the Stockholders and the Corporation, (ii) the management,
manner and operation of WRG and WRG DiscCo (collectively, the “Companies”),
(iii) provisions that will provide Williams rights to consent to certain actions
of the Companies during the Term, and (iv) to provide for certain rights and
obligations in respect thereto as hereinafter provided.

NOW, THEREFORE, in consideration of the mutual agreements and understandings set
forth herein, the Parties hereto hereby agree as follows:

ARTICLE I
Certain Definitions

Section 1.1

Definitions.  In addition to the capitalized terms defined in this Agreement,
any defined terms not set forth herein shall have the meanings ascribed to them
in the Asset Purchase Agreement. The following terms shall have the following
respective meanings:

“Affiliate” shall mean, when used with reference to a specified Person, (a) any
Person who directly or indirectly through one or more intermediaries controls,
is controlled by, or is under common control with the specified Person, (b) any
Person who is a Family Member of such Person, (c) any Person as to which such
Person serves as a trustee or general partner or in a similar fiduciary
capacity.

“Agreement” shall mean this Stockholders Agreement as in effect on the date
hereof and as hereafter from time to time amended, modified or supplemented in
accordance with the terms hereof.

“Articles of Incorporation” shall mean the Articles of Incorporation of the
Companies, as amended, restated, modified or supplemented in accordance with the
terms hereof and pursuant to applicable Law.

“Board of Directors” shall mean, as applicable, the Board of Directors of each
of the Corporation and the Companies, as duly constituted in accordance with
this Agreement, or any committee thereof duly constituted in accordance with
this Agreement, the By-Laws and applicable law and duly authorized to make the
relevant determination or take the relevant action.

“By-Laws” shall mean the By-Laws of the Companies, as amended and in effect on
the date hereof and as hereafter further amended or restated in accordance with
the terms hereof and pursuant to applicable Law.

“Common Stock”  shall mean any shares of common stock of either or both of the
Companies; provided, however, that, for the avoidance of doubt, the term “Common
Stock” shall not mean or include any shares of the DSH Common Stock or DSH
preferred stock, or other securities convertible into or exercisable for shares
of DSH Common Stock or DSH preferred stock, or any successor in interest to DSH.

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“Common Stock Equivalents” shall mean, any warrants, options, convertible
preferred stock, convertible notes or other securities or rights issued or
granted by either or both of the Companies entitling the holder(s) thereof to
purchase or receive upon exercise or conversion of such securities or rights,
shares of Common Stock of the Companies.

“Companies” shall mean the collective reference to WRG and WRG DiscCo.

“Companies Common Stock” shall mean the individual and collective reference to
any authorized, issued or outstanding shares of WRG Common Stock or WRG WRG
DiscCo Common Stock or any other class or series of capital stock of WRG or WRG
DiscCo, authorized, issued or outstanding.

“Corporation” shall mean DSH.

“DSH Common Stock” shall mean shares of voting common stock, $0.001 par value
per share, of the Corporation.

“Effective Date” shall mean the “Closing Date” of the sale and purchase of the
Purchased Assets as set forth and defined in the Asset Purchase Agreement, and
the subsequent “Effective Time” of the merger contemplated by the Merger
Agreement.

“Employment Agreements” shall have the meaning specified in the Introduction.

“Family Member” shall mean with respect to an individual, such individual’s
parents, current or former spouse, siblings or children or any trust for the
benefit of such individual or such individual’s parents, current or former
spouse, siblings or children.

“GAAP” means United States generally accepted accounting principles as in effect
from time to time.

“Governmental Authority” shall mean any governmental regulatory or
administrative body, governmental agency, governmental subdivision or authority,
any court or judicial authority, any public, private or industry governmental
regulatory authority, whether foreign, national, federal, state or local or
otherwise, or any Person lawfully empowered by any of the foregoing to enforce
or seek compliance with any Law.

“Law” shall mean any law, statute, regulation, constitution, ordinance, code,
rule, order, decree, judgment, consent decree, charge, injunction, ruling,
settlement agreement or governmental requirement enacted, promulgated, entered
into, agreed or imposed by any Governmental Authority.

“Merger Agreement” shall have the meaning specified in the Introduction.

“Notice of Exercise” shall have the meaning specified in Section 5.1(b).

“Notice of Intention” shall have the meaning specified in Section 5.1(a).

“Permitted Transfer” shall have the meaning set forth in Section 4.2(a).

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“Person” shall mean an individual, corporation, limited liability company,
partnership, joint stock company, trust, unincorporated organization, joint
venture, Governmental Authority or other entity of whatever nature.

“Required Financing” shall have the meaning ascribed to such term in the Asset
Purchase Agreement.

“Restricted Transfer” shall have the meaning specified in Section 4.1.

“Sale of Control” shall mean, as applicable:

(a) as to either or both of the Companies, the sale of all or substantially all
of the assets or securities of either of the Companies, whether by merger,
consolidation, tender offer, sale of Companies Common Stock or sale of assets,
to any Person who is not an Affiliate of DSH in a transaction or series of
transactions whereby the power to elect the board of directors of either or both
of the Companies shall pass to such non-Affiliate Person or its Affiliates; or
(b) as to DSH, the sale of all or substantially all of the assets or securities
of DSH, whether by merger, consolidation, tender offer, sale of DSH Common Stock
or sale of assets, to any Person who is not an Affiliate of DSH in a transaction
or series of transactions whereby the power to elect the board of directors of
DSH shall pass to such non-Affiliate Person or its Affiliates.

“Securities Act” shall mean the Securities Act of 1933, as amended.

“Selling Stockholder” shall have the meaning specified in Section 5.1(a).

“Asset Purchase Agreement” shall have the meaning specified in the Introduction.

“Stockholder” shall mean the individual and collective reference to Williams and
Russell, or their respective assignees.

“Subsidiary” shall mean, with respect to either of the Companies (a) any Person,
the securities or other ownership interests having ordinary voting power to
elect a majority of the board of directors or other Persons performing similar
functions are at the time directly or indirectly owned by either of the
Companies, or (b) the operating agreements, shareholders agreements or other
agreements applicable to or binding upon such corporation or other entity
entitle the board of directors of the Companies to directly or indirectly elect
a majority of the board of directors, board of managers or other Persons
performing similar functions.

“Term” shall mean the maximum term of this Agreement, being the period from the
Effective Date through and including December 31, 2020 (or such longer period
until Williams has received his final Annual Earn-Out Payment (as defined in the
Asset Purchase Agreement) and such payment is no longer subject to any dispute).

“Termination Event” shall mean with respect to any Stockholder the earliest to
occur of:

(a)

the expiration of the Term of this Agreement;

(b)

the death of such Stockholder,

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(c)

the “permanent disability” (as defined in the Employment Agreements) of such
Stockholder,

(d)

a Sale of Control of the Companies approved as a Major Decision (as such term is
defined in Section 3.4);

(e)

the termination of the applicable Employment Agreement of such Stockholder for
“Cause” (as defined in the Employment Agreements), or

(f)

the sale or disposition by a Stockholder of all of their shares of DSH Common
Stock.

For the avoidance of doubt, a Termination Event related to one Stockholder
pursuant to (b), (c), (e), or (f) above shall not be deemed to be a Termination
Event for any other Stockholder.

“Transfer Restriction” shall have the meaning given to it in Section 4.1.

“WRG” shall mean W/R Group, Inc., an Arizona corporation (formerly WRG
Acquisition Corporation).

“WRG DiscCo” shall mean WR Group IC-Disc, Inc. a domestic international sales
corporation incorporated under the laws of the State of Nevada (formerly, WRG
Acquisition Corp.), which from and after the Effective Date of this Agreement is
and shall be a one hundred percent (100%) owned Subsidiary of DSH.

“WRG DiscCo Common Stock” shall mean shares of voting common stock of WRG
DiscCo.

Section 1.3

Effective Date.  This Agreement shall be deemed to have become effective and
constitute a legal and binding agreement of the Parties hereto as of the
Effective Date of this Agreement.   

ARTICLE II
Ownership of WRG Common Stock and Management

Section 2.1

Ownership of Companies Common Stock.  As at the Effective Date, unless otherwise
provided in this Agreement, all of the issued and outstanding shares of
Companies Common Stock shall be wholly owned as of record and beneficially by
DSH or a Subsidiary of DSH, at which point DSH or Subsidiary of DSH, as the case
may be, shall be responsible for all securities law compliance with respect to
such Companies Common Stock.

Section 2.2

No Conflict with Agreement.  The Corporation hereby covenants and agrees to vote
its shares of Companies Common Stock, and take all actions necessary, to ensure
that the Articles of Incorporation and By-Laws of the Corporation and the
Companies do not, at any time, conflict with the provisions of this Agreement.
In the event of a conflict, the terms and conditions of this Agreement shall
govern.  

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Section 2.3

Management of the Companies. Throughout the term of the Employment Agreements,
Williams shall serve as the Chief Executive Officer of WRG and Russell shall
serve as Chief Executive Officer of WRG DiscCo and Executive Vice President of
DSH, respectively and as set forth in their respective Employment Agreements,
and, subject to the provisions of Section 3.4 of this Agreement, shall have the
authority and responsibility to manage the businesses of each of the Companies
in their respective positions.  

ARTICLE III
Corporate Governance

Section 3.1

Board of Directors.

(a)

Subject to Section 3.1(b) below, each of WRG and WRG DiscCo shall be authorized
to have five (5) members of their respective Board of Directors (collectively,
the “Companies Board of Directors”), provided that any modification to increase
or decrease the number of members of the Board of Directors of the respective
Companies shall be subject to the provisions of Section 3.4 below.  

(b)

The Corporation shall take all actions necessary to elect, or to cause each of
the Boards of Directors of the respective Companies to consist of five (5)
members as of the Effective Date, two (2) of whom shall be the Stockholders or
individuals designated by the Stockholders (the “Stockholder Designees”), and
three (3) of whom shall be designated by DSH (the “Corporation Designees”).  For
so long as no Termination Event shall have occurred with respect to Williams,
then Williams shall be entitled to designate one of the Stockholder Designees.
 For so long as no Termination Event shall have occurred with respect to
Russell, then Russell shall be entitled to designate one of the Stockholder
Designees.  For so long as no Termination Event shall have occurred with respect
to both of the Stockholders, the size of the Board of Directors of each of the
Companies may not be increased above five (5) members without the prior written
consent of both of the Stockholders or of the Stockholder who is not subject to
the Termination Event, as the case may be.

(c)

On the Closing Date, Russell shall be elected as a member of the Board of
Directors of the Corporation (the “DSH Board of Directors”).  In addition, the
existing members of the DSH Board of Directors shall designate Russell as a
nominee to serve on the Corporation Board of Directors at each regular or
special meeting of stockholders of DSH, and shall recommend to the stockholders
of the Corporation that Russell be elected to the DSH Board of Directors in
accordance with the provisions of the DSH Articles of Incorporation and By-Laws
.

(d)

During the Term, Williams shall have the right to attend (in the capacity of an
observer) meetings of the DSH Board of Directors and all committees thereof.
Williams shall receive the same notice of meetings as provided to the DSH Board
of Directors and all committees thereof and shall be provided with copies of all
materials provided to the DSH Board of Directors and all committees thereof. For
purposes of clarity, in not event shall Williams be considered or deemed to be a
member of the DSH Board of Directors, and shall not have any right to vote on
matters before the DSH Board of Directors.

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(e)

The Corporation shall take all actions necessary to elect, approve and appoint,
the designees described below to be members of the Board of Directors of each of
WRG and WRG DiscCo as of the Effective Date:

(i)

The Stockholder Designees shall be Williams and Russell, or any other person
designated by the Stockholders pursuant to the terms of this Agreement; and

(ii)

The Corporation Designees shall be Daniel Khesin, Abner Silva and ___________.
 DSH shall have the right to replace any or all of the Corporation Designees on
the Companies Board of Directors.

(f)

The Board of Directors of each of the Companies shall meet at least once per
fiscal year; provided, that the Companies Board of Directors shall meet more
frequently as may be required in order to consider matters covered by Section
3.4 of this Agreement.

Section 3.2

Powers of the Stockholders.

Subject to only the limitations set forth in Section 3.4, the each of Williams
and Russell shall report to the Board of Directors of each of the Companies who
shall manage the business and affairs of the Companies.  Williams and Russell
shall have the authority and responsibility to manage, perform or cause to be
performed, all management and day-to-day operational functions relating to the
businesses of each of WRG and WRG DiscCo, respectively, including without
limitation:

(a)

the right to hire and fire personnel and, from time to time, designate one or
more persons to be an officer of the Companies; any such officer or employee so
hired or designated to have such authority and perform such duties as the
Stockholders may, from time to time, delegate to them; and

(b)

except as set forth in Section 3.4, the exclusive control over the rights,
decisions and use of working capital for purposes of purchasing and selling of
inventory and contracting with trade creditors, suppliers and customers.

Section 3.3

Covenant to Vote.  The Corporation and the Stockholders hereby agree to take all
actions necessary to call, or cause the Companies and the appropriate officers
and directors of the Companies to call, an annual meeting (and when
circumstances so require, a special meeting) of the stockholders and/or Board of
Directors of the Companies, and to vote all shares of Companies Common Stock
 held of record by DSH at any such meeting and at any other annual or special
meeting of the stockholder in favor of, or take all actions by written consent
in lieu of any such meeting as may be necessary to cause, the election as
members of the Companies Board of Directors of those individuals so designated
in accordance with this Article III.

Section 3.4

Certain Material Decisions Requiring the Approval of the Companies Board of
Directors.  Notwithstanding anything in this Agreement, the Articles of
Incorporation or the By-Laws or the organizational documents of the Companies to
the contrary, before undertaking any of the following actions on behalf of
either or both of WRG or WRG DiscCo, as applicable (each a “Material Decision”),
either (i) DSH, Williams and Russell shall have unanimously approved such Major
Decision, or (ii) such Material Decision shall have been approved, either at a
duly called meeting or by written consent, by a majority of all of the five (5)

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members of the Companies Board of Directors, which majority shall include the
affirmative vote or written consent of both of the Stockholders or the
Stockholder Designees (the “Required Consent”). The following Material
Decisions, on behalf of either WRG or WRG DiscCo, require the Required Consent:

(a)

except for indebtedness relating to the approved Required Financing pursuant to
the Asset Purchase Agreement, incurring any indebtedness on behalf of either of
the Companies, whether evidenced by notes, debentures, mortgages or leases
required to be capitalized under GAAP;

(b)

except for security interests, mortgages, pledges, liens, hypothecation,
assignments or other encumbrances (collectively, “Liens”) on the assets and
properties of either of the Companies incurred in connection with the approved
Required Financing pursuant to the Asset Purchase Agreement, incurring or
obtaining placement of any Liens on the assets and properties of the Company,

(c)

refinancing of the approved Required Financing pursuant to the Asset Purchase
Agreement, or the prepayment, in whole or in part, of any other indebtedness or
modification, consolidation or extension of any such indebtedness or Liens then
binding upon either of the Companies or their assets;

(d)

executing and delivering purchase agreements, notes, leases, subleases,
applications, Transfer documents and other instruments necessary or incidental
to the consummation of financing for the businesses of the Companies;

(e)

issuing of any Companies Common Stock or Common Stock Equivalents of the
Companies;

(g)

except for the approved Required Financing pursuant to the Asset Purchase
Agreement, negotiating the terms and conditions, or consummate, any debt or
equity financing for the Companies, including but not limited to the issuance of
Companies Common Stock or Common Stock Equivalents;

(h)

making any alterations or changes to the capital structure of either of the
Companies;

(i)

entering into any commitment for or consummating any Sale of Control of either
or both of the Companies;

(j)

entering into any commitment for or consummating any acquisition, by either of
the Companies, whether by merger, stock purchase, asset purchase, consolidation
or like business combination, of the securities, assets or business divisions of
the Companies by any other Person or entity;

(k)

entering into any commitment for or consummating any direct or indirect related
party transaction with either Stockholder or any other officer, director, or
executive employee of the Companies;

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(l)

entering into any transactions between the Companies and DSH or any Affiliate of
DSH, for any overhead, home office or other operational expenditures;

(m)

amending or modifying in any material provision of the Asset Purchase Agreement
or the Merger Agreement;

(n)

undertaking any liquidation, dissolution or winding-up of the affairs of either
or both of the Companies or sale or disposition of the assets (other than sales
of inventory in the ordinary course of business), or any merger or consolidation
of either or both of the Companies with or into any other Person of entity;

(o)

initiating, entering into any commitment for or consummating (i) any corporate
insolvency, restructuring or reorganization process or (ii) on behalf of either
or both of the Companies any general assignment for the benefit of their
creditors;

(p)

making any amendment, supplement, alteration to, restatement or repeal of,
including by waiver or consent, any provision of the Articles of Incorporation,
Bylaws of the either or both of the Companies or this Agreement;

(q)

entering into any commitment for or consummating any purchase, redemption or
other acquisition of any shares of Companies Common Stock or other securities of
the Companies;

(r)

terminating or otherwise replacing executive officers, or entering into or
amending agreements, whether oral or written, relating to executive
compensation;

(s)

taking any action that would have the effect of impairing the ability of the
Stockholders to receive the Earn-Out Payments pursuant to the terms of the Asset
Purchase Agreement; or

(t)

creating or forming of any Subsidiary or the investment, receipt or holding of
any capital stock of a Subsidiary by either of the Companies.

ARTICLE IV
Transfers of the DSH Common Stock

Section 4.1

Restrictions on Transfer.  Russell hereby agrees that he will not offer, sell,
transfer, assign or otherwise dispose of (or make any exchange, gift, assignment
or pledge of) (collectively, a “Restricted Transfer”) any shares of DSH Common
Stock except as permitted in Section 4.2 (the “Transfer Restriction”) for a
period commencing on the Effective Date of this Agreement and ending December
31, 2018 (the “Restricted Period”).  Thereafter, Russell may Transfer his DSH
Common Stock.  For the avoidance of doubt, the term “Transfer” and the
restrictions set forth in Article IV and Article V hereof shall also be
applicable to any sale, Transfer, assignment or disposition of the equity
interests of the Corporation.  Each of Russell and Williams hereby severally
agrees that he will not, directly or indirectly, Transfer any of his shares of
DSH Common Stock except as permitted under the Securities Act and other
applicable securities laws.   

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Section 4.2

Exceptions to Restrictions.  The provisions of Section 4.1 and Article V shall
not apply to any of the following Transfers by Russell:

(a)

to any member of the immediate family (spouse, parent or children) of Russell;

(b)

A Sale of Control of both of the Companies approved by the Stockholders as a
Material Decision in accordance with Section 3.4 of this Agreement; or

(c)

subject to the compliance with all of the other provisions of this Agreement
(including Article V below), the waiver of the Transfer Restrictions in Section
4.1 by the Corporation.

Section 4.3

Endorsement of Certificates.

(a)

Upon the execution of this Agreement, in addition to any other legend which DSH
may deem advisable under the Securities Act and certain state securities laws,
all certificates representing shares of issued and outstanding DSH Common Stock
shall be endorsed as follows:

THIS CERTIFICATE IS SUBJECT TO, AND IS TRANSFERABLE ONLY UPON COMPLIANCE WITH,
THE PROVISIONS OF A STOCKHOLDERS AGREEMENT, DATED __________ __, 2015, AMONG DS
HEALTHCARE, INC. CAREY WILLIAMS, STEFAN RUSSELL, W/R GROUP, INC. AND WR GROUP
IC-DISC, INC.  A COPY OF THE ABOVE REFERENCED AGREEMENT IS ON FILE AT THE OFFICE
OF THE DS HEALTHCARE, INC.

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933 AND MAY NOT BE TRANSFERRED EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT, OR AN EXEMPTION FROM THE REGISTRATION
REQUIREMENTS UNDER SAID ACT.

(b)

Except as otherwise expressly provided in this Agreement, all certificates
representing shares of DSH Common Stock hereafter issued to or acquired by any
of the Stockholders or their successors hereto shall bear the legends set forth
above, and the shares of DSH Common Stock represented by such certificates shall
be subject to the applicable provisions of this Agreement.  The rights and
obligations of each Party hereto shall inure to and be binding upon any Person
to whom DSH Common Stock is transferred pursuant to Section 4.2(a) hereto.
 Prompt notice shall be given to the Corporation of any Transfer (whether or not
to a Permitted Transfer) of any DSH Common Stock.

Section 4.4

Restricted Transfer.  Any attempt to Transfer or encumber any shares of WRG
Common Stock that is considered a Transfer in violation of the Transfer
Restrictions set forth in Section 4.1 above (a “Restricted Transfer”) or not in
accordance with this Agreement shall be deemed null and void and neither the
Stockholders, DSH nor any Transfer agent of such securities shall give any
effect to such attempted Transfer or encumbrance in its stock records.

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ARTICLE V
Information Rights

Section 5.1

Access to Information.  The Corporation and each of the Companies shall permit
the Stockholders (and such persons as they may designate subject to the
Corporation’s reasonable approval and the execution of a confidentiality
agreement acceptable to the Corporation), to visit and inspect, during normal
business hours and without disruption to the Corporation’s business, any of the
properties of the Corporation or the Companies, examine its books (and take
copies and extracts therefrom), and discuss the affairs, finances, and accounts
of the Corporation or the Companies with the appropriate officers and employees,
all at reasonable times and upon reasonable notice.  Each Stockholder agrees
that he and his designees will keep confidential any confidential, proprietary,
or secret information which such Stockholder may obtain from the Corporation or
the Companies, unless such information is known to the public.

Section 5.2

Financial Information.  During the Term of this Agreement, the Corporation and
each of the Companies shall provide to each Stockholder, as soon as available,
but in any event within forty-five (45) days after the end of the fiscal year of
the Corporation and each of the Companies, copies of the combined balance sheets
of the Companies as of the end of each fiscal year, and of the related combined
statements of income and retained earnings and cash flows for such fiscal year,
all in reasonable detail and stating in comparative form beginning with the
fiscal year ending December 31, 2015, the respective combined figures as of the
end of and for the previous fiscal year, and, in the case of such combined
statements, accompanied by a report thereon of independent certified public
accountants of recognized national standing, which report shall state that such
combined financial statements present fairly the combined financial position of
the Companies as at the dates indicated and their combined income and retained
earnings and cash flows for the periods indicated in conformity with GAAP
applied on a basis consistent with prior years (except for such changes with
which the accountants shall concur) and that the examination by such accountants
in connection with such combined financial statements has been made in
accordance with generally accepted auditing standards.  In addition, the
Corporation and the Companies shall make available to the Stockholders, all
financial and operational information with respect to the Companies.  Copies of
such financial information shall be provided within five (5) days of the request
by the Stockholders.

ARTICLE VI
Miscellaneous

Section 6.1

Termination of Agreement.

          (a)

This Agreement shall terminate and shall be of no further force or effect as to
DSH, the Companies and either or both of the Stockholders, as applicable, upon
the occurrence of a Termination Event.

          (b)

Notwithstanding anything to the contrary set forth in this Agreement, upon any
permitted termination of this Agreement, whether by reason of a Termination
Event or otherwise, each of the Stockholders, his heirs, executors or trustees
shall continue to retain all of the record or beneficial ownership rights to the
DSH Common Stock then owned of record or beneficially by such Stockholder.

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Section 6.2

Successors and Assigns.  All of the terms and provisions of this Agreement shall
be binding upon, shall inure to the benefit of and shall be enforceable by the
respective successors and assigns of the Parties hereto.  No Stockholder may
assign any of its rights hereunder to any Person other than in a Transfer that
has complied with the requirements of Article IV as provided therein in all
respects.  If any Transferee of any Stockholder shall acquire any shares of DSH
Common Stock, in any manner, whether by operation of law or otherwise, such
shares shall be held subject to all of the terms of this Agreement, and by
taking and holding such shares such Person shall be entitled to receive the
benefits of and be conclusively deemed to have agreed to be bound by and to
comply with all of the terms and provisions of this Agreement.

Section 6.3

Amendment and Modification; Waiver of Compliance; Conflicts.

(c)

This Agreement may be amended only by a written instrument duly executed by the
Stockholders and DSH and approved in the manner provided in Section 3.4. In the
event of any conflict between the terms of this Agreement and the Articles of
Incorporation and By-Laws of the Companies, this Agreement shall govern.     

(d)

Except as otherwise provided in this Agreement, any failure of any of the
Parties to comply with any obligation, covenant, agreement or condition herein
may be waived by the Party entitled to the benefits thereof only by a written
instrument signed by the Party granting such waiver, but such waiver or failure
to insist upon strict compliance with such obligation, covenant, agreement or
condition shall not operate as a waiver of, or estoppel with respect to, any
subsequent or other failure.

Section 6.4

Notices.  Any notice, request, claim, demand, document and other communication
hereunder to any Party shall be effective upon receipt (or refusal of receipt)
and shall be in writing and delivered personally or sent by facsimile (with such
facsimile confirmed promptly in writing sent by first class mail), or first
class mail, or other similar means of communication, as follows:

(i)

If to Williams, addressed to c/o Carey Williams the address set forth on the
signature page to this Agreement;

(ii)

If to Russell, addressed to c/o Stefan Russell the address set forth on the
signature page to this Agreement; and

(iii)

If to the Corporation, to the address c/o Daniel Khesin DS Healthcare Group,
Inc., 1601 Green Road, Deerfield Beach 33064;

or, in each case, to such other address or facsimile number as such Party may
designate in writing to the other Party or Parties  by written notice given in
the manner specified herein.

All such communications shall be deemed to have been given, delivered or made
when so delivered by hand or sent by facsimile, or five business days after
being so mailed.

Section 6.5

Entire Agreement.  The provisions of this Agreement and the documents attached
as exhibits hereto contain the entire agreement among the Parties hereto with
respect to

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the subject transactions contemplated thereby and supersede all prior oral and
written agreements and memoranda and undertakings among the Parties hereto with
regard to such subject matter.  Each Party hereto hereby acknowledges that any
rights under any prior shareholders agreement are hereby waived and
relinquished.  

Section 6.6

Inspection.  For so long as this Agreement shall be in effect, this Agreement
shall be made available for inspection by any Party at the principal executive
offices of WRG.

Section 6.7

Headings.  The section and paragraph headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.

Section 6.8

Governing Law.  This Agreement shall be governed by, construed, applied and
enforced in accordance with the laws of the State of Florida, without giving
effect to the provisions, policies or principles of those laws relating to
choice or conflict of laws.

Section 6.9

LITIGATION.  EACH OF THE PARTIES HERETO ACKNOWLEDGES AND AGREES THAT
JURISDICTION AND VENUE WILL BE PROPER SOLELY IN THE STATE OF FLORIDA AND WAIVES
ANY OBJECTIONS BASED UPON FORUM NON CONVENIENS.  EACH PARTY WAIVES PERSONAL
SERVICE OF PROCESS AND AGREES THAT A SUMMONS AND COMPLAINT COMMENCING AN ACTION
OR PROCEEDING SHALL BE PROPERLY SERVED AND SHALL CONFER PERSONAL JURISDICTION IF
SERVED BY REGISTERED OR CERTIFIED MAIL TO THE PARTY AT THE ADDRESS SET FORTH IN
THIS AGREEMENT, OR AS OTHERWISE PROVIDED BY THE LAWS OF THE STATE OF FLORIDA.  

Section 6.10

No Strict Construction.  The language used in this Agreement will be deemed to
be the language chosen by the Parties hereto to express their mutual intent, and
no rule of strict construction will be applied against any person.

Section 6.11

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.  If the requirements of this Agreement otherwise
have been met, new holders of WRG Common Stock may become Parties to this
Agreement by executing a counterpart to this Agreement.

Section 6.12

Corporation Consents.  The Corporation agrees that this Agreement constitutes
its written consent pursuant to Title 10, Article II, Section 10-821 228 of the
Arizona Revised Statutes to each of the transactions and other matters
contemplated hereby, including (a) the election of directors of the Companies,
(b) the approval of this Agreement, (c) the ratifying of all acts of the
directors and the officers of the Companies (whether current or former) prior to
this Agreement with respect to the foregoing, and (d) any other transaction and
other matters incident to those contemplated by clauses (a) through (c).

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Section 6.13

Acknowledgment.  The Parties acknowledges and agrees that the provisions of this
Agreement have been reviewed and are understood by each Party, and expresses the
will and intention of the Parties and agrees not to take any action to violate
the purposes and provisions of this Agreement.

[Remainder of page intentionally left blank, signature page follows]

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IN WITNESS WHEREOF, the Parties hereto have caused this Stockholders Agreement
to be duly executed as of the date first above written.

Address of DSH Healthcare

 

 

 

Group, Inc.

 

DS HEALTHCARE GROUP, INC.

 

 

 

 

 

 

 

 

 

     

By:

 

 

 

Name:

Daniel Khesin

 

 

Title:

Chief Executive Officer

 

 

 

 

Addresses of Carey Williams

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

           

 

CAREY WILLIAMS

 

 

 

 

 

 

 

 

Addresses of Stefan Russell

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

STEFAN RUSSELL

 

 

 

 

 

 

WR GROUP, INC.

 

 

(formerly, WRG Acquisition Corporation)

 

 

 

 

 

 

By:

 

 

 

Name:

Carey Williams

 

 

Title:

Chief Executive Officer

 

 

 

 

 

 

 

 

 

 

WR GROUP IC-DISC, INC.

 

 

(formerly, WRG Acquisition Corp.)

 

 

a domestic international sales corporation

 

 

 

 

 

 

 

 

 

 

By:

 

 

 

Name:

Stefan Russell

 

 

Title:

Chief Executive Officer