SHAREHOLDERS AGREEMENT
The parties to this Agreement are Valor Invest, Ltd., an Irish company having
an office at 00 Xxxx xxx Xxxxxxx, Xxxxxx, XX0000 Xxxxxxxxxxx ("Valor Invest"),
Corsa SA Holdings, a Luxembourg entity ("Corsa") with offices at 0 Xxxxxxx
Xxxxxx, Xxxxxxx Xxxxxx Xxxx., Xxx Xxxx 00000 Israel, and InfoImaging
Technologies, Inc., a Nevada corporation ("ITI Nevada"), having offices at
0000-0000 Xxxx Xxxxxxx Xxxxxx, Xxxxxxxxx, X.X. X0X 0X0 (the "Company").
WHEREAS, The Company has acquired control of all of the outstanding shares of
InfoImaging Technologies, Inc., a Delaware corporation ("ITI Delaware") and
WHEREAS, The Company has acquired control of all but one of the shares of
Fontech, Ltd., an Israeli company ("Fontech"), and
WHEREAS, In connection with the acquisition of control over ITI Delaware and
Fontech, Corsa as the controlling shareholder of these two entities
("Controlling Shareholder"), transferred all interest it held in Fontech and
ITI Delaware in exchange for common shares of the Company; and
WHEREAS, Fontech and/or ITI Delaware own certain technology, know-how and
patents which upon execution of the Exchange Agreement will be among the
assets to be owned by ITI Nevada, and
WHEREAS, Valor Invest and the Controlling Shareholder (together, the
"Shareholders") are the beneficial owners of certain shares of the Company,
and
WHEREAS, the Shareholders wish to enter into this agreement in order to record
their respective rights and obligations with respect to their ownership of
shares in the Company:
NOW, THEREFORE, in reliance on the mutual terms and conditions contained
within this Agreement the parties agree as follows:
SECTION ONE
DEFINITIONS
Definitions
1.0 In this Agreement, except as expressly provided or unless the context
otherwise requires,
1.1 Affiliate means a person which Controls that Shareholder or a corporation
controlled by the same person that Controls the Shareholder.
1.2 Base Shares means the shares held by Corsa, and the shares held by Valor
Invest
1.3 Board means the board of directors of the Company.
1.4 Company means ITI Nevada and any successor corporation.
1.5 Control and Controls mean in relation to a corporation the right to elect
or appoint, directly or indirectly, a majority of the directors of the
corporation or a majority of other persons who have the right to manage or
supervise the management of the affairs and business of the corporation.
1.6 Confidential Information means all confidential and proprietary
information, intellectual property (including trade secrets) and confidential
facts relating to the business and affairs of the Company and its
Subsidiaries.
1.7 Interest means, with respect to a Shareholder at any time, the entire
right, title and interest at that time of the Shareholder in and to any of the
shares of the Company and any loan and accrued interest thereon and any other
right or claim the Shareholder may have against the Company as a Shareholder
and the Shareholder's interest in and to this Agreement.
1.8 Person includes an individual, corporation, partnership, party, trust
fund, association and any other organized group of persons and the personal or
other legal representative of a person to whom the context can apply
according to law.
1.9 Shares means, with respect to a Shareholder at any time, all shares of the
Company then owned by that Shareholder, a Subsidiary or Affiliate.
1.10 Subsidiary, is relation to a person, means an other person, other than an
individual, which is controlled directly or indirectly by that person.
In this Agreement, except as expressly provided or unless the context
otherwise requires:
1.11 "This Agreement" means this Shareholders Agreement as from time to time
supplemented or amended by one or more agreements entered into pursuant to the
applicable provisions hereof.
1.12 The headings in this Agreement are inserted for convenience only and do
not form a part of this Agreement and are not intended to interpret, define or
limit the scope, extent or intent of this Agreement or any provision hereof.
1.13 The word "including", when following any general statement or term, is
not to be construed as limiting the general statement or term to the specific
items or matters set forth or to similar items or matters, but rather as
permitting the general statement or term to refer to al other items or xxxxxx
that could reasonably fall within its broadest possible scope.
1.14 All accounting terms not otherwise defined herein have the meanings
assigned to them, and all calculations to be made hereunder are to be made, in
accordance with US generally accepted accounting principles applied on a
consistent basis.
1.15 All references to currency mean currency of the United States of America.
1.16 A reference to a statute includes all regulations made thereunder, all
amendments to the statute or regulations in force from time to time, and any
statute or regulation that supplements or supersedes such statute or
regulations.
1.17 A reference to an entity includes any successor to that entity.
1.18 Words importing the masculine gender include the feminine or neuter,
words in the singular include the plural; words importing a corporate entity
include individuals, and vice versa.
1.19 A reference to "approval", "authorization" or "consent" means written
approval, authorization or consent.
1.20 A reference to a Section is to a Section of this Agreement and the symbol
s followed by a number or some combination of numbers and letters refers to
the Section, paragraph, subparagraph, clause or subclause of this Agreement so
designated.
SECTION TWO
MANAGEMENT
2.1 As long as it or he holds Shares of the Company, each Shareholder will
vote its Shares, or cause it or his Shares to be voted, in such manner that,
and use it or his best efforts to
ensure that:
2.1.1 The Company will have a Board of seven (7) directors;
2.1.2 The Board will be comprised of two individuals nominated by Valor
Invest, and five individuals nominated by Corsa.
2.1.3 Any vacancy that occurs on the Board will be filled by the election or
appointment of a replacement director by the Shareholder who nominated the
former director.
2.1.4 A quorum of the directors of the Company will be five out of the seven
directors, at least one of which must be a Valor Invest nominee, except, where
a Valor nominee fails to attend a validly called meeting of the directors for
the second time, then a quorum shall be any four directors.
2.1.5 Except with the approval of a majority of the Board of Directors at a
validly called meeting of the Board (or a written consent resolution signed by
all the directors), the Company, its Subsidiaries and Affiliates, will not:
(a) sell, lease, transfer, mortgage, pledge or otherwise dispose of its
business and undertaking, it being understood that the Company may sell or
lease all manufactured products produced in its ordinary course of business;
(b) consolidate, merge or amalgamate with any other Company, association,
partnership or legal entity;
(c) amend its Company charger;
(d) make any single capital expenditure of more than $250,000 or lease any
property having a fair market value of more than $250,000, except as may have
already been approved by the majority of the directors at the time of the
approval of the annual business plan;
(e) make any borrowing or the incurring of any debt whatsoever whereby the
aggregate consolidated indebtedness of the Company would be more than $350,000
at any one time;
(f) make any loan to a Shareholder or a Subsidiary or Affiliate of the
Shareholder;
(g) undertake any transaction out of the ordinary course of its business or
undertaking;
(h) except for the Fontech licenses, including any amendment hereto, enter
into a contract with a Shareholder or a Subsidiary or Affiliate of the
Shareholder, and
(i) enter into any exclusive licensing or technology transfer agreement with a
third party which may materially affect the commercial viability of the
technology owned or licensed to the Company, a Subsidiary or Affiliate. This
section is not intended to prevent sales of software licenses in the normal
course of the company's business.
2.1.6 The President & CEO, Vice-President-Finance, and the Corporate Secretary
of the Company will be initially appointed by Valor Invest through its
nominee. The parties agree that Xx. Xxxxx Xxxxxxxx will be appointed as
President & CEO during the term of this Agreement.
2.1.7 In addition to its audit committee, the Board will establish separate
executive and compensation committees, and a Valor Invest nominee to the Board
will be a member of each of the audit, compensation and executive committees.
Nothing in this Section will be construed so as to xxxxxx the discretion of
the
directors to act in the best interest of the Company, a subsidiary or
Affiliate or to require the directors to act in a particular manner with
respect to any of the foregoing matters.
SECTION THREE
INDEMNIFICATION
Indemnity
3.1 Without prejudice to any other remedy available to a party (the
"Indemnified Party") at law or in equity, the other party (the "Indemnifying
Party") hereby agrees, forthwith upon demand, to indemnify and save harmless
the Indemnified Party from and against any and all costs, losses, damages or
expenses suffered or incurred by the Indemnified Party in any manner arising
out of, in connection with, with respect to or relating to any representation
or warranty of
the Indemnifying Party to observe or perform any of its obligations pursuant
hereto, and any and all goods and services taxes, actions, suits, proceedings,
demand, assessments, judgments, reasonable costs and reasonable legal and
other expenses incidental thereto.
SECTION FOUR
TERM
4.1 This Agreement will terminate in its entirety on the earlier of
4.1.1 June 1, 2000.
4.1.2 the written agreement of all Shareholders.
4.1.3 the dissolution of the Company or the making by the Company of an
assignment, or the issue with respect to the Company of a receiving order,
under the provision of the United States bankruptcy laws, and
4.1.4 only one Shareholder remaining the beneficial owner of any Shares.
4.2 The termination of this Agreement will not affect or prejudice a right or
obligation that has accrued or arisen under this Agreement before the time of
termination and such right and obligation will survive the termination of this
Agreement.
SECTION FIVE
GENERAL
Compliance by Company
5.1 Subject to applicable law, the Company will, and will cause its
Subsidiaries to, carry out and be bound by the provisions of this Agreement.
Compliance by Shareholders
5.2 Each Shareholder will vote or cause to be voted such Shareholder's Shares
so as to give full effect to the provisions of this Agreement, which
provisions will supersede and have precedence over the Articles and By-laws of
the Company.
Equitable Remedies
5.3 The Parties acknowledge that a breach by a Party of any of the provisions
of this Agreement would result in damages to other Parties and that such other
Parties could not adequately be compensated for such damages by a monetary
award, and accordingly if there is any such breach, in addition to all of the
remedies available to such other Parties at law or in equity, they will be
entitled as a matter of right to apply to a court of competent jurisdiction
for such relief by way of an order for specific performance, restraining
order, injunction, or otherwise, as may be appropriate to ensure compliance
with the provisions of this Agreement.
Confidentiality
5.4 None of the Parties, other than the Company, will at any time or under any
circumstances, without the unanimous consent of the Shareholders, directly or
indirectly communicate or disclose to any person any Confidential Information
howsoever acquired by such Party nor use or make available any such
Confidential Information directly or indirectly, unless
5.4.1 the Confidential Information is available to the public or in the public
domain at the time of such disclosures or use,
5.4.2 disclosure is required to be made by any law, regulation, governmental
body or authority or by court order, or
5.4.3 disclosure is made on a confidential basis to consultants or advisors.
Waiver
5.5 No consent or waiver, express or implied, by a party to or of a breach or
default by any other party of any obligation of the other party under this
Agreement will
5.5.1 be valid unless it is in writing and stated to be a consent or waiver
pursuant to this Section,
5.5.2 be relied upon as a consent to or waiver of any other breach or default
of that or any other obligation of the other party,
5.5.3 constitute a general waiver under this Agreement, or
5.5.4 eliminate or modify the need for a specific consent waiver pursuant to
this Section in any other or later instance.
Time of the Essence
5.6 Time is of the essence in the performance of each obligation under this
Agreement.
Governing Law
5.7 This Agreement is and will be deemed to be made in the State of Nevada and
for all purposes will be governed exclusively by and construed and enforced in
accordance with the laws prevailing in the State of Nevada, and the rights and
remedies of the parties will be determined in accordance with those laws.
Attornment
5.8 Each party irrevocably attorns to the jurisdiction of the courts of the
State of Nevada and all courts having appellate jurisdiction thereover, and
any proceeding commenced or maintained in respect of or arising because of
this Agreement will be commenced or maintained only in such of xxxx Courts as
is appropriate.
Cumulative Remedies
5.9 The rights, powers and remedies of a party provided in this Agreement are
cumulative and do not affect any right, power or remedy otherwise available to
that party at law or in equity.
Notice
5.10 Every notice, request, demand or direction (each for the purposes of this
Section a notice) to be given pursuant to this Agreement by one party to
another will be in writing and will be delivered or sent by registered or
certified mail postage prepaid and mailed in any government post office in the
city listed below as the address for delivery by the parties giving notice, or
by telecopier or other similar form of written communication, in each case,
addressed as applicable as follows:
(A) If to Valor Invest:
00 Xxxx xxx Xxxxxxx
Xxxxxx, XX0000
Xxxxxxxxxxx
Attention: Xxxxxx Xxxxxxxx
(B) If to Corsa:
0 Xxxxxxx Xxxxxx
Xxxxxxx Xxxxxx Xxxx.
Xxx Xxxx 00000 Israel
Attention: Xxxxxxx Xxxxxxx
(C) If to the Company:
0000-0000 Xxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, X.X.
X0X 0X0
Attention: Xxxxx Xxxxxxxx
5.11 A notice delivered or sent in accordance with 2.10 will be deemed to be
given and received
(A) if delivered, on the day of delivery,
(B) if mailed, on the earliest of the day of actual receipt and the 20th
business day in the applicable destination listed in 5.10 (the "Destination")
after the day of mailing, or
(C) if sent by telecopier or other similar form of written communication, on
the first business day in the Destination after the day of transmittal.
5.12 If a notice is sent by mail and mail service is interrupted between the
point of mailing and the destination by strike, slowdown, force majeure or
other cause on or within 20 Business Days before or after the day of mailing,
the notice will not be deemed to be received until actually received, and the
party sending the notice will use any other service which has not been so
interrupted or will deliver the notice in order to ensure prompt receipt.
Entire Agreement
5.13 This Agreement constitutes the entire agreement among the parties and
supersedes every previous agreement, communication, expectation, negotiation,
representation or understanding, whether oral or written, express or implied,
statutory or otherwise, between the parties with respect to the subject matter
of this Agreement.
Severability
5.14 If a provision of this Agreement is at any time unenforceable or invalid
for any reason, it will be severable from the remainder of this Agreement and,
in its application at that time, this Agreement will be construed as if it had
been executed without the unenforceable or invalid provision.
Amendment
5.15 This Agreement may not amended except in writing executed by each of the
parties hereto.
Assignment
5.16 No party may assign any right, benefit or interest in this Agreement
without the written consent of every other party, and any purported assignment
without such consent will be void.
Further Assurances
5.17 Each party will, at its own expense and without expense to any other
party, execute and deliver such further agreements and other documents and do
such further acts and things as any other party reasonably requests to
evidence, carry out or give full force and effect to the intent of this
Agreement.
Binding Effect
5.18 This Agreement will endure to the benefit of and be binding upon the
respective legal representatives and/or successors of the parties.
Dated: May 31, 1998
Corsa SA Holdings Valor Invest, Ltd.
By: "Xxxxxxx Xxxxxxx" By: "Xxxxx Xxxxxxxx"
----------------- ----------------
Xxxxxxx Xxxxxxx, Director Xxxxx Xxxxxxxx, Director
