Exhibit 10.12

 

STOCK GRANT AGREEMENT

 

STOCK GRANT AGREEMENT, dated as of December 22, 2017 (the “Agreement”), among FC
Global Realty Incorporated, a Nevada corporation formerly known as Photomedex,
Inc. (the “Company”), and Dr. Dolev Rafaeli, Dennis M. McGrath and Yoav Ben-Dror
(each a “Note Holder,” and collectively, the “Note Holders”). The Company and
the Note Holders are sometimes individually referred to in this Agreement as a
“Party” and, collectively, as the “Parties.” Capitalized terms used, but not
otherwise defined, in this Agreement have the meanings ascribed to them in the
Contribution Agreement (as defined below).

 

RECITALS

 

A.            On March 31, 2017, the Company, First Capital Real Estate
Operating Partnership, L.P., First Capital Real Estate Trust Incorporated and FC
Global Realty Operating Partnership LLC entered into an Interest Contribution
Agreement (the “Contribution Agreement”).

 

B.            On October 12, 2017, pursuant to the Contribution Agreement, the
Company issued to the Note Holders the Payout Notes in consideration for all
outstanding compensation liabilities owed to the Note Holders by the Company.

 

C.            The Company and Opportunity Fund I-SS, LLC (the “Fund”) are
entering into a Securities Purchase Agreement on or about the date hereof (the
“Series B Purchase Agreement”), pursuant to which the Fund will acquire $1.5
million of the Company’s newly designated Series B Preferred Stock (the “Series
B Financing”) at the initial closing that is expected to occur on or about the
date hereof.

 

D.            Concurrent with the Series B Financing, the Company and the Note
Holders are entering into this agreement to (1) cause the early conversion of
the Payout Notes into 5,628,291 shares of the Company’s Common Stock (the
“Payout Shares”), (2) effectuate the release of all security interests
associated with the Payout Notes, (3) obtain the agreement of the Note Holders
to provide certain support services to the Company, (4) obtain the conditional
resignation of certain of the Note Holders from the Board of Directors of the
Company, (5) provide for the issuance of 1,857,336 additional shares of Common
Stock to the Note Holders as consideration for the various agreements of the
Note Holders contained in this Agreement (the “Additional Shares”), (6) provide
for Cash Payments (as defined below) to the Note Holders in amounts equal to the
interest payments that would have been made to the Note Holders absent the
conversion of the Payout Notes, (7) provide for certain registration rights to
the Note Holders, (8) require certain security holders of the Company to provide
Shareholder Approval as described below, and (9) provide for certain other
representations, warranties, covenants and agreements as specified in this
Agreement.

 

 

 

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the mutual conditions and covenants
contained in this Agreement, and for other good and valuable consideration, the
sufficiency and receipt of which is hereby acknowledged, it is hereby
stipulated, consented to, and agreed by and among the Parties as follows:

 

1.             Conversion of Payout Notes. On the Closing Date (as defined
below), the Company and the Note Holders agree to accomplish the following:

 

(a)           The Payout Notes shall be converted into the Payout Shares and the
Company shall issue to each of the Note Holders the number of Payout Shares
specified opposite each such Note Holder’s name on Appendix A to this Agreement
in conversion of, and in full satisfaction of, all the obligations of the
Company under the Payout Notes.

 

(b)           Each Note Holder agrees that upon receipt of their Payout Shares
all obligations under their Payout Note will be satisfied and discharged in full
and any liens or security interests in any of the Company’s assets as security
for the Company’s obligations under such Payout Notes shall be terminated and
released without further action by or on behalf of the Note Holders. Each of the
Note Holders hereby authorize the Company, after issuance to the Payout Shares
to each of the Note Holders, to take any action as may be necessary to
effectuate a release of such security interests including filing UCC-3
termination statements in the appropriate jurisdictions. For the avoidance of
doubt, upon issuance of the Payout Shares to the Note Holders, that certain
Security Agreement, dated October 12, 2017, among the Company and the Note
Holders shall automatically be terminated and of no further force and effect
with all obligations of the parties thereunder released.

 

2.             Requirement to Make Cash Payments. The Company shall make the
cash payments to the Note Holders (the “Cash Payments”) in the amounts and on
the dates specified in Appendix B to this Agreement in consideration of the
services to be provided by such individuals under Section 4 (the “Services”).
The Cash Payments will be paid through the Company’s customary payroll system in
accordance with its payroll policy and the Note Holders shall be eligible to
participate in the Company’s health plan during the period that they provide the
Services. The Note Holders agree that the Company may, at its option, prepay the
Cash Payments at any time without any penalty or premium. Notwithstanding the
foregoing, if the Company instructs the Note Holders to cease providing the
Services or otherwise attempts or does terminate the Note Holders as Service
providers for any reason, such cessation of Services or termination will not
affect the Company’s obligation to make the Cash Payments.

 

3.             Issuance of Additional Shares; Shareholder Approval.

 

(a)           Promptly, and, in any event, within ten (10) days after obtaining
Shareholder Approval (as defined below), the Company shall issue to each Note
Holder the number of Additional Shares set forth opposite such Note Holder’s
name on Appendix A to this Agreement.

 

(b)           The rules and regulations of The Nasdaq Stock Market require
approval from the Company’s stockholders prior to the issuance of the Additional
Shares that are in excess of 19.99% of the Company’s issued and outstanding
Common Stock on the date of this Agreement. Therefore, as promptly as possible
following the Closing Date, the Company shall prepare and file with the
Securities and Exchange Commission a proxy statement and take all actions
necessary under Nevada law and the listing rules of The Nasdaq Stock Market to
hold a special meeting of its stockholders to authorize and approve the issuance
of the Additional Shares to the Note Holders (the “Shareholder Approval”).

 

- 2 - 

 

 

4.             Provision of Support Services.

 

(a)           During the period from the Closing Date and ending on the later of
(i) the effective date of the resignations provided for in Section 5 below (the
“Resignation Effective Date”), or (ii) December 31, 2018, the Note Holders shall
provide the Company with the following Services:

 

(i)           Dennis M. McGrath shall provide assistance and support to the
Company’s Chief Financial Officer, General Counsel and auditors in connection
with annual audit and quarterly filings as they relate to historical information
and background during the period that Mr. McGrath was an officer of the Company
and he will also provide assistance and support in connection with all SEC,
Sarbanes-Oxley and tax compliance matters, as well as vendor and litigation
support, particularly as it relates to prior merger and acquisition transactions
involving the Company.

 

(ii)          Dr. Dolev Rafaeli shall provide assistance and support with regard
to litigation, litigation-related and other third-party claim matters arising
during the period when Dr. Rafaeli was an officer of the Company or that occur
after such period but relate to facts and circumstances occurring during such
period, including, without limitation, support in handling No!No! product
liability claims and potential litigation involving HSN. Dr. Rafaeli will also
provide assistance and support in connection with any tax audits or tax
compliance matters involving periods during which Dr. Rafaeli was an officer of
the Company.

 

(iii)         Yoav Ben-Dror shall provide assistance and support with respect to
the winding down of the operations of the Company’s international subsidiaries
and certain domestic subsidiaries to the extent that Mr. Ben-Dror has
information regarding those domestic subsidiaries.

 

(b)           The Company and the Note Holders shall mutually agree upon what
portion of the Cash Payments shall be deemed to be compensation for the
aforementioned services and shall treat such portion of the Cash Payments as
compensation for the services described above. Dr. Dolev Rafaeli and Dennis M.
McGrath will continue to receive the employee benefits that they are currently
receiving, including existing health and disability benefits, so long as they
continue to provide the services described above. Once Dr. Dolev Rafaeli and
Dennis M. McGrath no longer provide such services, they will receive COBRA
coverage in accordance with, and as further described in, Section 6.20 of the
Contribution Agreement to be fully paid for or reimbursed to Mesrs. Rafaeli and
McGrath by the Company.

 

5.             Resignations of Dr. Dolev Rafaeli and Dennis McGrath. Dr. Dolev
Rafaeli and Dennis McGrath hereby resign from the Board of Directors of the
Company effective upon the last to occur of (a) receipt of all of the Payout
Shares and all of the Additional Shares, (b) receipt of all of the Cash Payments
(either in accordance with the schedule provided in Appendix B or, at the
Company’s option, in one lump sum on an accelerated basis), and (c) the date
that the Payout Shares and the Additional Shares have been registered for
re-sale in accordance with the Registration Rights Agreement (as defined below).
Dr. Dolev Rafaeli and Dennis McGrath hereby represent and warrant to the Company
that their resignation is not the result of any disagreement that either of them
have with the Company or the Board of Directors regarding the Company’s
financial or accounting policies or operations.

 

- 3 - 

 

 

6.             Closing. The closing of the transactions contemplated by this
Agreement (the “Closing”) shall take place on or about the date of this
Agreement and concurrently with the closing of the transactions contemplated by
the Series B Purchase Agreement (the “Series B Closing”) and this Agreement
shall have no force or effect unless and until Series B Closing has occurred.
The Closing is further conditioned upon the following:

 

(a)           The Company and the Note Holders shall have entered into a
Registration Rights Agreement in the form of Exhibit A to this Agreement (the
“Registration Rights Agreement”).

 

(b)           The Company shall have entered into a shareholder voting support
and confidentiality agreement in the form of Exhibit B with the security holders
of the Company identified in such form of agreement.

 

7.             Representations of Note Holders. Each Note Holder hereby
represents and warrants to the Company that such Note Holder owns the Payout
Note in the principal amount specified opposite his name on Appendix A
beneficially and of record, free and clear of all claims, charges, liens,
contracts, rights, options, security interests, mortgages, encumbrances and
restrictions of every kind and nature. No Note Holder has never transferred or
agreed to transfer their Payout Notes or otherwise dispose of their Payout Note,
other than pursuant to this Agreement. There is no restriction affecting the
ability of any Note Holder to transfer the legal and beneficial title and
ownership of the Payout Notes to the Company for cancellation upon conversion
thereof in accordance with this Agreement. Neither the execution and delivery of
this Agreement, the consummation of the transactions contemplated hereby, nor
the performance of this Agreement in compliance with its terms and conditions by
any Note Holder will conflict with or result in any violation of any agreement,
judgment, decree, order, statute or regulation applicable to such Note Holder,
or any breach of any agreement to which such Note Holder is a party, or
constitute a default thereunder, or result in the creation of any claim of any
kind or nature on, or with respect to such Note Holder or such Note Holder’s
assets, including, without limitation, such Note Holder’s Payout Note.

 

8.             Non-Disparagement. Each Party agrees with each other Party
hereto, not to disparage any Party hereto and further agrees to take no action
which is intended, or would reasonably be expected, to harm the reputation of
any Party hereto or which would reasonably be expected to lead to unwanted or
unfavorable publicity for any Party hereto; provided, that this provision shall
not apply with respect to any case or controversy among the parties in
contemplation or in connection with any litigation, arbitration or mediation.

 

9.             Further Assurances. At the request of the Company and without
further consideration, the Note Holders will execute and deliver such other
instruments of conversion, transfer, conveyance, assignment and confirmation as
may be reasonably requested in order to effectively convert, transfer, convey
and assign to the Company for conversion, the Payout Notes and to release any
security interest in the Company’s assets that constitutes collateral for the
Company’s obligations under the Payout Notes.

 

- 4 - 

 

 

10.           Fees and Expenses. Each party shall be responsible for his or its
own attorneys’ fees and costs in connection with the drafting and negotiation of
this Agreement and the consummation of the transactions contemplated hereby.

 

11.           Reliance. The Parties acknowledge and represent that: (a) they
have read the Agreement; (b) they clearly understand the Agreement and each of
its terms; (c) they fully and unconditionally consent to the terms of this
Agreement; (d) they have had the benefit and advice of counsel of their own
selection; (e) they have executed this Agreement, freely, with knowledge, and
without influence or duress; (f) they have not relied upon any other
representations, either written or oral, express or implied, made to them by any
person; and (g) the consideration received by them has been actual and adequate.

 

12.           Notices. Any and all notices or other communications or deliveries
required or permitted to be provided hereunder shall be in writing and shall be
deemed given and effective on the earliest of (a) the date of transmission, if
such notice or communication is delivered via (i) facsimile (provided the sender
receives a machine-generated confirmation of successful transmission) at the
facsimile number specified in this Section or (ii) electronic mail (i.e., Email)
prior to 6:30 p.m. (Eastern) on a business day, (b) the next business day after
the date of transmission, if such notice or communication is delivered via (i)
facsimile at the facsimile number specified in this Section or (ii) electronic
mail (i.e., Email) on a day that is not a business day or later than 6:30 p.m.
(Eastern) on any business day, or (c) the business day following the date of
mailing, if sent by U.S. nationally recognized overnight courier service, or (d)
upon actual receipt by the Party to whom such notice is required to be given, if
sent by any means other than facsimile or Email transmission. The address for
such notices and communications shall be as follows.

 

If to the Company: 410 Park Ave   New York, NY 10022   Attention: Suneet Singal
  Email: ssingal@photomedex.com; copy to   mpupach@photomedex.com     With a
copy to: BEVILACQUA PLLC   1050 Connecticut Ave., NW, Suite 500   Washington, DC
20036   Attention: Louis A. Bevilacqua, Esq.   Email: lou@bevilacquapllc.com    
If to the Note Holders: Dolev Rafaeli                         Dennis M. McGrath
                        Yoav Ben-Dror                  

 

- 5 - 

 

 

or such other address as may be designated in writing hereafter, in the same
manner, by such Person.

 

13.           Entire Agreement. This Agreement and the exhibits and appendices
hereto and other agreements referred to herein contain the entire agreement and
understanding concerning the subject matter hereof between the parties and
supersedes and replaces all prior negotiations, proposed agreement and
agreements, written or oral. Each of the parties hereto acknowledges that none
of the parties hereto, agents or counsel of any party, has made any promise,
representation or warranty whatsoever, express or implied, not contained herein
concerning the subject hereto, to induce it to execute this Agreement and
acknowledges and warrants that it is not executing this Agreement in reliance on
any promise, representation or warranty not contained herein.

 

14.           Amendments. This Agreement may not be modified or amended in any
manner except by an instrument in writing specifically stating that it is a
supplement, modification or amendment to the Agreement and signed by each of the
Parties hereto against whom such modification or amendment shall be claimed to
be effective.

 

15.           Enforceability. Should any provision of this Agreement be declared
or be determined by any court or tribunal to be illegal or invalid, the validity
of the remaining parts, terms or provisions shall not be affected thereby and
said illegal or invalid part, term or provision shall be severed and deemed not
to be part of this Agreement.

 

16.           Governing Law. This Agreement shall be governed, interpreted, and
construed in accordance with the laws of the State of New York without giving
effect to the conflict of laws principles thereof.

 

17.           Counterparts; Facsimile Signature. 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. Counterparts may
be delivered via facsimile, electronic mail (including pdf or any electronic
signature complying with the U.S. federal ESIGN Act of 2000, e.g.,
www.docusign.com) or other transmission method and any counterpart so delivered
shall be deemed to have been duly and validly delivered and be valid and
effective for all purposes.

 

[remainder of page intentionally left blank]

 

- 6 - 

 

 

IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the date
first indicated above.

 

  COMPANY:       FC Global Realty Incorporated        By: /s/ Suneet Singal    
Name: Suneet Singal
Title: Chief Executive Officer         NOTE HOLDERS:       /s/ Yoav Ben-Dror  
Yoav Ben-Dror       /s/ Dolev Rafaeli   Dr. Dolev Rafaeli       /s/ Dennis M.
McGrath   Dennis M. McGrath

 

 

 

 

APPENDIX A

 

Schedule of Note Holders

 

Name of Note Holder Principal Amount of Payout Note Number of Payout Shares to
be Received

Number of Additional Shares to be Received

 

Dr. Dolev Rafaeli

 

$3,133,934.00 3,134,876 1,034,509

Dennis M. McGrath

 

$977,666 977,960 322,727

Yoav Ben-Dror

 

$1,515,000 1,515,455 500,100

 

 

 

 

APPENDIX B

 

Cash Payments

 

Twelve (12) monthly payments made on the 1st of each month beginning January 1,
2018 in the following amounts:

 

Yoav: $10,310.42

 

Dolev: $21,328.16

 

Dennis: $6,653.56

 

 

 

 

EXHIBIT B

 

SHAREHOLDER VOTING SUPPORT AND CONFIDENTIALITY AGREEMENT

 

SHAREHOLDER VOTING SUPPORT AND CONFIDENTIALITY AGREEMENT (this “Agreement”),
dated as of December 22, 2017, by and among Dr. Dolev Rafaeli, Dennis M. McGrath
and Yoav Ben-Dror (each, a “Note Holder” and together, the “Note Holders”) and
those holders of securities of FC Global Realty Incorporated, formerly
PhotoMedex, Inc., a Nevada corporation (the “Company”), listed on Schedule I
annexed hereto (each a “Securityholder” and collectively, the
“Securityholders”).

 

RECITALS

 

The Company and the Note Holders have entered into a Stock Grant Agreement,
dated as of the date hereof (the “Stock Grant Agreement”), pursuant to which the
Company has agreed to issue an aggregate of 1,857,336 shares (the “Shares”) of
the Common Stock, par value $.01 per share, of the Company (the “Common Stock”)
to the Note Holders as consideration for the various agreements of the Note
Holders contained in the Stock Grant Agreement. Capitalized terms used herein
and not otherwise defined herein shall have the respective meanings set forth in
the Stock Grant Agreement.

 

As of the date hereof, each Securityholder is the record owner of the number and
type of securities of the Company set forth opposite the name of such
Securityholder on Schedule I hereto.

 

As a condition to the willingness of the Note Holders to enter into the Stock
Grant Agreement and as an inducement and in consideration therefor, each
Securityholder has agreed to enter into this Agreement.

 

AGREEMENT

 

The parties, intending to be legally bound, agree as follows:

 

SECTION 1. Securityholder Meetings; Voting. Each Securityholder hereby agrees
that from and after the date hereof and until this Agreement is terminated in
accordance with Section 8, such Securityholder shall appear in person or by
proxy at any meeting of the Securityholders of the Company called for purposes,
and any adjournment or postponement thereof, or in any other circumstances upon
which a vote, consent or other approval with respect to the Stock Grant
Agreement or the transactions contemplated by the Stock Grant Agreement is
sought by the Company and approved by the board of directors of the Company and
recommended to the Securityholders of the Company by the board of directors that
include any of the following: (i) the adoption of the Stock Grant Agreement and
the transactions contemplated by the Stock Grant Agreement or (ii) the approval
of issuance of the Shares as contemplated by the Stock Grant Agreement.

 

Each Securityholder hereby agrees that from and after the date hereof and until
this Agreement is terminated in accordance with Section 8, such Securityholder
shall exercise all of his, her or its rights as a holder of securities of the
Company to vote as follows to the extent that the following are approved by the
board of directors of the Company and recommended to the Securityholders of the
Company: (i) in favor of the adoption of the Stock Grant Agreement and the
approval of the transactions contemplated by the Stock Grant Agreement; (ii) in
favor of any proposal seeking approval for the issuance to the Note Holders or
their designees of Common Stock equal to 20% or more of the Common Stock or 20%
or more of the voting power outstanding before the issuance, in order that the
Company may issue all Shares to the Note Holders or their designees under the
Stock Grant Agreement (the “20% Proposal”); (iii) against any proposal made in
opposition to, or in competition with, the matters set forth in (i) or (ii)
above; and (iv) against any other action that is intended, or would reasonably
be expected to, impede, interfere with, delay, postpone, discourage or adversely
affect the adoption of the Stock Grant Agreement and approval of the
transactions contemplated by the Stock Grant Agreement at any meeting of the
Securityholders of the Company. It is the intention of this paragraph that each
Securityholder shall be obligated to vote in accordance with the above
regardless of the particular wording of any proposal put forth to the
Securityholders of the Company, in a manner consistent with the purpose of
authorizing the Stock Grant Agreement and the issuance to the Note Holders or
their designees of shares of Common Stock of the Company having the maximum
voting power as is contemplated by the Stock Grant Agreement.

 

 

 

 

SECTION 2. Restriction on Transfer.

 

(a) Except as provided by Sections 2(c) and 2(d), each Securityholder agrees
that he, she or it will not directly or indirectly, prior to the termination of
this Agreement: (i) transfer, assign, sell, lend, sell short, gift-over, pledge,
encumber, hypothecate, exchange or otherwise dispose (whether by sale,
liquidation, dissolution, dividend or distribution), or offer or solicit to do
any of the foregoing, of any or all of the equity securities and/or any debt or
similar securities that are convertible into equity securities of the Company
held by him, her or it, including any additional equity securities and/or any
debt or similar securities that are convertible into equity securities of the
Company which Securityholder may subsequently acquire, including all additional
equity securities which may be issued to Securityholder upon the exercise of any
options, warrants or other securities convertible into or exchangeable for
securities of the Company (all such securities of such Securityholder, “Subject
Securities”) or any right or interest therein, or consent to any of the
foregoing (any such action, a “Transfer”), (ii) enter or offer to enter into any
derivative arrangement with respect to, or create or suffer to exist any liens
or encumbrances with respect to, any or all of the Subject Securities or any
right or interest therein, in either case that would reasonably be expected to
prevent or delay such Securityholder’s compliance with his, her or its
obligations hereunder; (iii) enter of offer to enter into any contract, option
or other agreement, arrangement or understanding with respect to any Transfer;
(iv) grant any proxy, power-of-attorney or other authorization or consent with
respect to any Subject Securities with respect to any matter that is, or that
could be exercised in a manner, inconsistent with the transactions contemplated
by the Stock Grant Agreement and this Agreement or the provisions thereof and
hereof; (v) deposit any Subject Securities into a voting trust, or enter into a
voting agreement or arrangement with respect to any Subject Securities; or (vi)
enter or offer to enter into any contract or agreement that would be breached
by, or take any other action that would reasonably be expected to prevent or
delay such Securityholder’s compliance with its obligations hereunder.

 

(b) Each Securityholder hereby acknowledges and agrees that the Company shall be
entitled, during the term of this Agreement, to cause any transfer agent for the
Subject Securities to decline to effect any Transfer and to note stop transfer
restrictions on the stock register and other records relating to Subject
Securities, and each Securityholder agrees to execute and deliver any further
documents reasonably requested by the Company in furtherance of the same.

 

(c) Notwithstanding the foregoing, the restrictions set forth in this Section 2
shall not apply to the exercise of any option, warrant or other securities
convertible or exchangeable for securities of the Company.

 

(d) Notwithstanding the foregoing, the restrictions set forth in this Section 2
shall not apply to any Transfer by First Capital Real Estate Operating
Partnership, LP or First Capital Real Estate Trust Incorporated, in each case,
to any holder of a security issued by any such person.

 

2 

 

 

SECTION 3. Representations and Warranties of Securityholders. Each
Securityholder on its own behalf hereby represents and warrants to the Note
Holders as follows:

 

(a) The Securityholder is the record owner of the equity securities and/or any
debt or similar securities that are convertible into equity securities of the
Company set forth opposite the name of the Securityholder on Schedule I to this
Agreement. As of the date of this Agreement, the equity securities and/or any
debt or similar securities that are convertible into equity securities of the
Company set forth opposite the name of the Securityholder on Schedule I to this
Agreement represent all of the shares of equity securities and/or any debt or
similar securities that are convertible into equity securities of the Company
owned of record by the Securityholder.

 

(b) If the Securityholder is a corporation, partnership, limited liability
company or other entity, such Securityholder is an entity duly organized,
validly existing and in good standing under the laws of its jurisdiction, and
has all requisite organizational power and authority to execute and deliver this
Agreement and to consummate the transactions contemplated hereby, and has taken
all necessary organizational action to authorize the execution, delivery and
performance of this Agreement.

 

(c) If the Securityholder is an individual, such Securityholder has the valid
capacity to execute and deliver this Agreement and has duly executed and
delivered this Agreement.

 

(d) If the Securityholder is a corporation, partnership, limited liability
company or other entity, this Agreement has been duly authorized, executed and
delivered by such Securityholder.

 

(e) This Agreement constitutes a valid and binding obligation of the
Securityholder, enforceable against the Securityholder in accordance with its
terms, except as limited by applicable bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance and other laws of general application
affecting enforcement of creditors’ rights generally.

 

(f) The execution, delivery and performance by the Securityholder of this
Agreement does not require any consent, approval, authorization or permit of,
action by, filing with or notification to any governmental authority or other
third party, other than any consent, approval, authorization, permit, action,
filing or notification the failure of which to make or obtain would not,
individually or in the aggregate, be reasonably expected to prevent or
materially delay the consummation of the transactions contemplated by the Stock
Grant Agreement or the Securityholder’s ability to observe and perform its
material obligations hereunder (a “Securityholder Material Adverse Effect”).

 

(g) The execution, delivery and performance by the Securityholder of this
Agreement will not (i) result in a violation of, or default (with or without
notice or lapse of time, or both) under, require consent under or give rise to a
right of termination, cancellation or acceleration of any obligation or the loss
of any benefit under any (A) contract, trust, commitment, agreement,
understanding or arrangement of any kind (a “Contract”) or (B) permit,
concession, franchise, right or license binding upon the Securityholder, (ii)
result in the creation of any pledges, liens, claims, security interests,
proxies, voting trusts or agreements, options, rights (other than community
property interests), understandings or arrangements or any other encumbrance or
restriction whatsoever on title transfer (collectively, “Encumbrances”), other
than Encumbrances imposed by federal or state securities laws (collectively,
“Permitted Encumbrances”), upon any of the properties or assets of the
Securityholder, (iii) if the Securityholder is a corporation, partnership,
limited liability company or other entity, conflict with or result in any
violation of any provision of the organizational documents of such
Securityholder, or (iv) conflict with or violate any applicable laws, other
than, in the case of clauses (i), (ii) and (iv), as would not, individually or
in the aggregate, be reasonably expected to have a Securityholder Material
Adverse Effect. The consummation by the Securityholder of the transactions
contemplated by this Agreement will not (i) violate any provision of any
judgment, order or decree applicable to the Securityholder or (ii) require any
consent, approval, or notice under any statute, law, rule or regulation
applicable to such Securityholder.

 

3 

 

 

(h) The Securityholder’s Subject Securities are now, and at all times during the
term hereof will be, held by the Securityholder or by a nominee or custodian for
the benefit of the Securityholder, free and clear of all Encumbrances, except
for (i) any such Encumbrances arising hereunder, (ii) Permitted Encumbrances and
(iii) any Encumbrance imposed by any margin account in with the Subject
Securities may be held (provided, that the Securityholder retains voting and
dispositional control of any such Subject Securities).

 

(i) The Securityholder understands and acknowledges that the Note Holders are
entering into the Stock Grant Agreement in reliance upon the Securityholder’s
execution and delivery of this Agreement.

 

(j) No broker, investment bank, financial advisor or other person is entitled to
any broker’s, finder’s, financial adviser’s or similar fee or commission in
connection with the transactions contemplated hereby based upon arrangements
made by or on behalf of the Securityholder.

 

SECTION 4. Representations and Warranties of the Note Holders. Each Note Holder
hereby represents and warrants to the Securityholders as follows:

 

(a) This Agreement has been duly authorized, executed and delivered by the Note
Holder, and, assuming this Agreement constitutes a valid and binding obligation
of the other parties hereto, constitutes a valid and binding obligation of Note
Holder, enforceable against the Note Holder in accordance with its terms, except
as limited by applicable bankruptcy, insolvency, reorganization, fraudulent
conveyance, moratorium and other laws of general application affecting
enforcement of creditors’ rights generally.

 

(b) The execution, delivery and performance by the Note Holder of this Agreement
does not require any consent, approval, authorization or permit of, action by,
filing with or notification to any governmental authority or other third party,
other than any consent, approval, authorization, permit, action, filing or
notification the failure of which to make or obtain would not, individually or
in the aggregate, be reasonably expected to prevent or materially delay the
consummation of the transactions contemplated by the Stock Grant Agreement or
Note Holder’s ability to observe and perform the Note Holder’s material
obligations hereunder (a “Note Holder Material Adverse Effect”).

 

(c) The execution, delivery and performance by the Note Holder of this Agreement
will not (i) result in a violation of, or default (with or without notice or
lapse of time, or both) under, require consent under or give rise to a right of
termination, cancellation or acceleration of any obligation or the loss of any
benefit under any (A) Contract or (B) permit, concession, franchise, right or
license binding upon the Note Holder, (ii) result in the creation of
Encumbrances (other than Permitted Encumbrances) upon any of the properties or
assets of the Note Holder, (iii) conflict with or violate any applicable laws,
other than, in the case of clauses (i) and (ii), as would not, individually or
in the aggregate, be reasonably expected to have a Note Holder Material Adverse
Effect. The consummation by the Note Holder of the transactions contemplated by
this Agreement will not (i) violate any provision of any judgment, order or
decree applicable to the Note Holder or (ii) require any consent, approval, or
notice under any statute, law, rule or regulation applicable to the Note Holder.

 

4 

 

 

SECTION 5. Confidentiality.

 

(a) Confidentiality by the Securityholders. Except as otherwise required by
applicable law, each Securityholder agrees to treat and hold as confidential,
any confidential or proprietary information of the Note Holders relating, except
for any such information which is generally known to the public or becomes
generally known to the public, other than as a result of a disclosure by such
Securityholder and not due to the breach of this Agreement (“Confidential
Information”), and to refrain from disclosing any Confidential Information,
except in accordance with the provisions of this Section 5. Unless otherwise
public information, the existence of any business negotiations, discussions,
consultations or agreements in progress between the parties hereto, or between
the Note Holders and certain third parties, shall not be released to any form of
public media without the prior written consent of the Note Holders. Each
Securityholder agrees that it shall treat all Confidential Information with at
least the same degree of care as it accords to its own information of like
nature, and each Securityholder represents that it exercises at least reasonable
care to protect its own confidential information. Each Securityholder may
disclose Confidential Information only to those of its employees, officers,
directors, shareholders, partners, members, or owners of a similar equity
interest in such Securityholder, or any of such Securityholder’s agents or
representatives (all such persons or entities, collectively, “Securityholder
Representatives”) who (i) need to know such information for the purposes of
advising such Securityholder with respect to the Stock Grant Agreement and the
consummation of the transactions contemplated by the Stock Grant Agreement and
(ii) are informed by such Securityholder of the confidential nature of the
Confidential Information and the obligations under this Agreement with respect
to such Confidential Information. Each Securityholder also agrees to be
responsible for enforcing the terms of this Agreement as to its Securityholder
Representatives and maintaining the confidentiality of the Confidential
Information and to take such action, legal or otherwise, to the extent necessary
to cause them to comply with the terms and conditions of this Agreement and
thereby prevent any disclosure or prohibited use of Confidential Information by
any of its Securityholder Representatives.

 

(b) Disclosure Required by Law. Notwithstanding the foregoing, each
Securityholder or any of the Securityholder’s Representatives may disclose
Confidential Information without Note Holders’ consent to the extent required by
law or legal process (provided that, unless prohibited by law, it first provides
prompt notice to the Note Holders so that the Note Holders may seek a protective
order or other appropriate remedy or consent to the disclosure). In the event a
Securityholder or any of the Securityholder’s Representatives are required to so
disclose Confidential Information, such Securityholder or such Representative
may furnish that portion (and only that portion) of the Confidential Information
that such person or entity has been advised by legal counsel that it is legally
compelled or otherwise required to disclose, and such person or entity shall use
all reasonable efforts to obtain reliable assurance that confidential treatment
will be accorded any Confidential Information so disclosed and, if requested by
the Note Holders, shall use reasonable efforts to assist the Note Holders in
obtaining an order or other assurance that confidential treatment will be
accorded to such Confidential Information so disclosed. Notwithstanding the
foregoing or anything else in this Agreement to the contrary, the Company may
disclose the terms and conditions of this Agreement as required by the rules and
regulations of any national securities exchange, NASDAQ, or other market on
which its securities are listed or qualified, the Securities and Exchange
Commission or other applicable governmental or regulatory body. If the Company
discloses the terms and conditions of this Agreement as provided in the
immediately preceding sentence it shall use best efforts to give the other
parties reasonable advance notice of such disclosure.

 

(c) Securityholder Acknowledgment. Each Securityholder also acknowledges and
agrees that it is aware of the restrictions imposed by the United States federal
securities laws and other applicable foreign and domestic laws on a person or
entity in possession of material non-public information about a public company
and that such Securityholder will comply with such laws.

 

SECTION 6. Fiduciary Responsibilities. No Securityholder executing this
Agreement who is or becomes during the term hereof a director or officer of the
Company makes (or shall be deemed to have made) any agreement or understanding
herein in his or her capacity as such director or officer. Without limiting the
generality of the foregoing, each Securityholder signs solely in his or her
capacity as the record owner of such Securityholder’s Subject Securities and
nothing herein shall limit or affect any actions taken by such Securityholder
(or a designee of such Securityholder) in his or her capacity as an officer or
director of the Company in exercising his or her or the Company’s or the
Company’s Board of Directors’ rights in connection with the Stock Grant
Agreement or otherwise and such actions shall not be deemed to be a breach of
this Agreement.

 

5 

 

 

SECTION 7. Power of Attorney. Each Securityholder hereby irrevocably designates
and appoints the Company and its duly authorized officers and agents as its
agent and attorney in fact, which appointment is coupled with an interest, to
act on such Securityholder’s behalf to execute any proxy relating to any meeting
of the Securityholders of the Company called for the purposes set forth herein
and to do all other lawfully permitted acts to further such purposes with the
same legal force and effect as if executed by such Securityholder.

 

SECTION 8. Termination.

 

(a) This Agreement, and all rights and obligations of the parties hereunder,
shall terminate immediately upon the earliest to occur of the following:

 

(i) the first Business Day following the date of the approval of the 20%
Proposal by the Company’s stockholders;

 

(ii) the mutual written consent of the Note Holders and the Securityholders; or

 

(iii) December 31, 2018.

 

(b) Except as set forth in Section 8(c), upon termination of this Agreement,
except in the case of liability for any willful breach by any party to this
Agreement prior to termination from which liability termination shall not
relieve any such party, all obligations of the parties under this Agreement will
terminate, without any liability or other obligation on the part of any party
hereto to any person or entity in respect hereof or the transactions
contemplated hereby, and no party shall have any claim against another (and no
person shall have any rights against such party), whether under contract, tort
or otherwise.

 

(c) Section 4 of this Agreement shall survive the termination of this Agreement
until the first anniversary of the date of this Agreement. Section 8 of this
Agreement shall survive the termination of this Agreement indefinitely.

 

SECTION 9. Expenses. All fees and expenses incurred in connection with this
Agreement and the transactions contemplated hereby shall be paid by the party
incurring such fees or expenses, whether or not the transactions contemplated by
the Stock Grant Agreement are consummated.

 

SECTION 10. Miscellaneous.

 

(a) Liabilities Several. The agreements, obligations, representations and
warranties of the Securityholders hereunder are made severally and not jointly.

 

(b) Effectiveness of Agreement. The agreements, obligations, representations and
warranties of the Securityholders set forth in this Agreement shall not be
effective or binding upon any Securityholder until after such time as the Stock
Grant Agreement is executed and delivered by the parties thereto.

 

(c) Notices. All notices, consents, waivers and other communications required or
permitted by this Agreement shall be in writing and shall be deemed given to a
party when (i) delivered to the appropriate address by hand or by nationally
recognized overnight courier service; or (ii) transmitted by telecopy or e-mail
(with confirmation of transmission) by the transmitting equipment confirmed with
a copy delivered as provided in clause (i), in each case to the following
addresses, facsimile numbers or e-mail addresses and marked to the attention of
the person (by name or title) designated below (or to such other address,
telecopy number, e-mail address or person as a party may designate by notice to
the other parties).

 

6 

 

 

If to the Note Holders, to:

 

  Dolev Rafaeli                             Dennis M. McGrath                  
          Yoav Ben-Dror                    

 

If to a Securityholder, to the address set forth on Schedule I attached hereto.

 

If to the Company, to:

 

FC Global Realty Incorporated
410 Park Ave

New York, NY 10022

Attention: Suneet Singal

Email: ssingal@photomedex.com; copy to mpupach@photomedex.com

 

With a copy (which shall not constitute notice) to:

 

BEVILACQUA PLLC

1050 Connecticut Ave., NW, Suite 500

Washington, DC 20036

Attention: Louis A. Bevilacqua, Esq.

Email: lou@bevilacquapllc.com

 

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

 

(e) Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original and all of which taken together shall
constitute one and the same instrument. This Agreement or any counterpart may be
executed and delivered by facsimile copies or delivered by electronic
communications by portable document format (.pdf), each of which shall be deemed
an original to the other parties.

 

(f) Entire Agreement; No Third Party Beneficiaries. This Agreement constitutes
the entire agreement, and supersedes all prior agreements and understandings,
both written and oral, among the parties with respect to the subject matter of
this Agreement and is not intended to confer, nor shall it confer, upon any
person other than the parties hereto any legal or equitable rights or remedies
or benefits of any nature whatsoever.

 

7 

 

 

(g) Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York, regardless of the laws that
might otherwise apply under applicable principles of conflicts of law thereof.

 

(h) Waiver of Jury Trial. EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES ANY AND
ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR LITIGATION BETWEEN THE
PARTIES HERETO ARISING OUT OF OR RELATING TO THIS AGREEMENT.

 

(i) Assignment; Binding Effect. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned (in whole or in part) by
any of the parties hereto (whether by operation of law or otherwise) without the
prior written consent of the other parties, and any such assignment without such
consent shall be null and void; notwithstanding the foregoing, each Note Holder
may assign any of the rights and benefits of this Agreement to any person that
has or acquires any Shares. No assignment by any party shall relieve such party
of any of its obligations hereunder. Subject to the preceding sentences, this
Agreement shall be binding upon, and shall inure to the benefit of, and shall be
enforceable by the parties hereto and their respective successors and assigns.

 

(j) Severability of Provisions. If any term or other provision of this Agreement
is invalid, illegal or incapable of being enforced by any rule of law or public
policy, all other conditions and provisions of this Agreement shall nevertheless
remain in full force and effect, insofar as the economic or legal substance of
the transactions contemplated hereby is not affected in any manner materially
adverse to any party. Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible to the fullest extent permitted by
applicable law in an acceptable manner to the end that the transactions
contemplated hereby are fulfilled to the extent possible.

 

(k) Specific Performance, Jurisdiction, Enforcement.

 

(i) The parties agree that irreparable damage for which money damages, even if
available, would not be an adequate remedy, if any provision of this Agreement
is not performed in accordance with its specific terms or is otherwise breached.
Accordingly, the parties agree that, prior to the valid termination of this
Agreement in accordance with Section 9, each party shall be entitled to an
injunction or injunctions, or any other appropriate form of specific performance
or equitable relief, to prevent breaches of this Agreement and to enforce
specifically the terms and provisions of this Agreement exclusively in the
federal and state courts located in New York County, New York, this being in
addition to any other remedy to which they are entitled at law or in equity.
Each party further agrees that no other party shall be required to obtain,
furnish or post any bond or similar instrument in connection with or as a
condition to obtaining any remedy referred to in this Section 10(k), and each
party hereto hereby irrevocably waives any right he, she or it may have to
require the obtaining, furnishing or posting of any such bond or similar
instrument.

 

(ii) Each of the parties (A) irrevocably submits itself to the exclusive
jurisdiction of the federal and state courts located in the New York County, New
York for the purpose of any action, proceeding or litigation directly or
indirectly based upon, relating to or arising out of this Agreement or any of
the transactions contemplated by this Agreement or the negotiation, execution or
performance hereof or thereof, or any other appropriate form of specific
performance or equitable relief, (B) agrees that it will not attempt to deny or
defeat such personal jurisdiction by motion or other request for leave from any
such court and (C) agrees that it will not bring any action, proceeding or
litigation relating to this Agreement or the transactions contemplated by this
Agreement in any court other than any of the federal and state courts located in
the State of New York. Each of the parties hereby irrevocably waives, and agrees
not to assert, by way of motion, as a defense, counterclaim or otherwise, in any
action, proceeding or litigation with respect to this Agreement, (X) any claim
that it is not personally subject to the jurisdiction of the above-named courts
for any reason other than the failure to serve in accordance with this Section
10(k), (Y) any claim that it or its property is exempt or immune from
jurisdiction of any such court or from any legal process commenced in such
courts (whether through service of notice, attachment prior to judgment,
attachment in aid of execution of judgment, execution of judgment or otherwise)
and (Z) to the fullest extent permitted by the applicable law, any claim that
(1) the suit, action or proceeding in such court is brought in an inconvenient
forum, (2) the venue of such suit, action or proceeding is improper or (3) this
Agreement, or the subject matter of this Agreement, may not be enforced in or by
such courts.

 

8 

 

 

(iii) Each of the parties hereby irrevocably consents to service being made
through the notice procedures set forth in Section 10(c) and agrees that service
of any process, summons, notice or document by personal delivery or by
registered mail (return receipt requested and first-class postage prepaid) to
the respective addresses set forth in Section 10(c) and on the signature pages
hereto shall be effective service of process for any action, proceeding or
litigation in connection with this Agreement or the transactions contemplated
hereby. Nothing in this Section 10(k) shall affect the right of any party to
serve legal process in any other manner permitted by law.

 

(l) Amendment. No amendment or modification of this Agreement shall be effective
unless it shall be in writing and signed by each of the parties hereto, and no
waiver or consent hereunder shall be effective against any party unless it shall
be in writing and signed by such party.

 

(m) Miscellaneous.

 

(i) Any word or term used in this Agreement in any form shall be masculine,
feminine, neuter, singular or plural, as proper reading requires. The words
“herein”, “hereof”, “hereby” or “hereto” shall refer to this Agreement unless
otherwise expressly provided. Any reference in this Agreement to a Section or
any exhibit or schedule shall be a reference to a Section of, and an exhibit or
schedule to, this Agreement unless the context otherwise requires. Any reference
in this Agreement to a “Business Day” shall mean a day in which the New York
branch of the Federal Reserve Bank is open for business during its normal hours
of operation.

 

(ii) In any action or proceeding brought to enforce any provision of this
Agreement, or where any provision of this Agreement is validly asserted as a
defense, the successful party shall be entitled to recover its actual attorneys’
fees and all disbursements in addition to any other available remedy.

 

[Signature Page Follows]

 

9 

 

 

IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be
duly executed and delivered as of the date first written above.

 

  NOTE HOLDERS:       Yoav Ben-Dror       Dolev Rafaeli       Dennis M. McGrath

 

  SECURITYHOLDERS:       By: OP Fund I Manager, LLC        By:       Name:
Kristen Pigman
Title: Director

 

  FIRST CAPITAL REAL ESTATE OPERATING PARTNERSHIP, LP       By: First Capital
Real Estate Trust Incorporated, its general partner       By:       Name: Suneet
Singal
Title: Chief Executive Officer

 

      Yoav Ben-Dror       Dolev Rafaeli       Dennis M. McGrath

 

 

 

 

SCHEDULE I

 

Name and Address Security Held

First Capital Real Estate Operating Partnership, LP

60 Broad Street, 34th Floor

New York NY 10004

Attention: Suneet Singal

 

879,234 shares of Common Stock and 79,389.64 shares of non-voting Series A
Convertible Preferred Stock (currently convertible into 1,984,741 shares of
Common Stock).

 

Opportunity Fund I-SS, LLC
c/o OP Fund I Manager, LLC
2481 Sunrise Blvd, Suite 200
Gold River, CA 95670
Attention: Kristen E. Pigman

 

1,500,000 shares of Series B Preferred Stock.

Dolev Rafaeli

__________________

__________________

 

149,774 shares of Common Stock, 3,134,876 additional shares of Common Stock that
will be issued on the date hereof upon conversion of the Payout Note, 1,034,509
additional shares of Common Stock that will be issued following stockholder
approval pursuant to the terms of the Share Grant Agreement, 33,750 additional
shares of Common Stock subject to restriction agreements, vested options to
purchase 35,600 shares of Common Stock, and unvested options to purchase 1,900
shares of Common Stock.

 

Dennis M. McGrath

__________________

__________________

 

26,528 shares of Common Stock, 977,960 additional shares of Common Stock that
will be issued on the date hereof upon conversion of the Payout Note, 322,727
additional shares of Common Stock that will be issued following stockholder
approval pursuant to the terms of the Share Grant Agreement, 24,750 additional
shares of Common Stock subject to restriction agreements, vested options to
purchase 37,490 shares of Common Stock and unvested options to purchase 1,400
shares of Common Stock.

 

Yoav Ben-Dror

__________________

__________________

 

299,184 shares of common stock, 1,515,455 additional shares of Common Stock that
will be issued on the date hereof upon conversion of the Payout Note, 500,100
additional shares of Common Stock that will be issued following stockholder
approval pursuant to the terms of the Share Grant Agreement, and warrants to
purchase 11,500 shares of common stock.