EXHIBIT 4
XXXXXXXXXXX.XXX, INC.
STOCKHOLDERS AGREEMENT AND IRREVOCABLE PROXY
This Stockholders Agreement and irrevocable proxy (this "Agreement"),
is entered into as of August 12, 2002, among the stockholders listed on the
signature page hereto (each, a "Stockholder" and, collectively, the
"Stockholders") and XxxxXxXxxxx.xxx, Inc., a Delaware corporation ("MTO").
WHEREAS, concurrently with the execution of this Agreement, iPrint
Technologies, inc., a Delaware corporation (the "Company"), and MTO have entered
into a security agreement (the "Security Agreement") in connection with a loan
in the original principal amount of One Million Dollars ($1,000,000) made by MTO
to the Company (the "Loan"), and evidenced by a subordinated secured promissory
note (the "Note");
WHEREAS, concurrently with the execution of this Agreement and as an
inducement to MTO to make the Loan, the Company has executed a letter agreement
(the "Letter Agreement"), pursuant to which the Company, among other things, has
agreed and covenanted not to "shop" the Company or its assets to a third party
for a certain period of time;
WHEREAS, during the above-mentioned "no shop" period, iPrint and MTO
have agreed to negotiate and execute definitive agreements pursuant to which MTO
will acquire a majority of iPrint's assets and assume a majority of its
liabilities from a mutually agreeable assignee, currently designated Sherwood
Partners (the "Assignee"), following an assignment by iPrint for the benefit of
its creditors pursuant to California state law to Sherwood Partners (the "ABC
Transaction");
WHEREAS, the respective Boards of Directors of the Company and MTO have
approved and agreed upon the terms and conditions of the Loan and the ABC
Transaction, and the Board of Directors of iPrint has resolved to submit to its
shareholders a proposal to approve the ABC Transaction;
WHEREAS, as an additional condition to MTO's willingness to make the
Loan to the Company, and in consideration for MTO's willingness to enter into
the ABC Transaction with the Company and the Assignee and to consummate the
transactions contemplated thereby, MTO has required that the Stockholders enter
into this Agreement;
NOW THEREFORE, in consideration of the foregoing and the mutual
premises, representations, warranties, covenants and agreements contained herein
and in the Letter Agreement, the Security Agreement and the Note, the parties
hereto, intending to be legally bound, hereby agree as follows:
1. Certain Definitions. For purposes of this Agreement, the following
terms shall have the following meanings:
"beneficially own" or "beneficial ownership" with respect to any
securities shall mean having "beneficial ownership" of such securities (as
determined pursuant to Rule 13d-3 under the Exchange Act).
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"Company Common Stock" means the Company's shares of common
stock, par value $0.001 per share.
"Stockholder's Subject Shares" shall mean, with respect to a
particular Stockholder, the number of shares of Company Common Stock set forth
opposite such Stockholder's name on the schedule attached hereto as Exhibit A.
"Transfer" means, with respect to any security, the sale,
transfer, pledge, hypothecation, assignment or constructive sale or other
disposition of such security or the record or beneficial ownership thereof, the
offer to make such a sale, transfer, pledge, hypothecation, assignment,
constructive sale or other disposition, and each agreement, arrangement or
understanding, whether or not in writing, to effect any of the foregoing. The
term "constructive sale" means a short sale with respect to such security,
entering into or acquiring an offsetting derivative contract with respect to
such security, entering into or acquiring a futures or forward contract to
deliver such security or entering into any hedging, swap or other transaction
that is designed to or which reasonably could be expected to lead to or result
in a sale or disposition of, or reduction of economic risk with respect to, such
security.
2. Representations, Warranties and Covenants of Stockholder. Each
Stockholder, individually and not jointly or severally, hereby represents and
warrants to MTO as follows:
(a) Title. As of the date hereof, such Stockholder is the sole
record or beneficial owner of such Stockholder's Subject Shares. Such
Stockholder is the lawful owner of such Stockholder's Subject Shares, free and
clear of all liens, claims, charges, security interests or other encumbrances.
(b) Right to Vote. Such Stockholder has, with respect to all such
Stockholder's Subject Shares sole voting power, sole power of disposition, sole
power to issue instructions and to fulfill such Stockholder's obligations under
this Agreement and sole power to agree to all matters set forth in this
Agreement, in each case with no limitations, qualifications or restrictions on
such rights. There are no options, warrants or other rights, agreements,
arrangements or commitments of any character to which such Stockholder is a
party relating to the pledge, disposition or voting of any shares of such
Stockholder's Subject Shares and there are no voting trusts or voting agreements
with respect to such shares.
(c) No Other Shares. Such Stockholder does not beneficially own any
shares of capital stock of the Company other than such Stockholder's Subject
Shares.
(d) Authority. Such Stockholder has the legal power, authority,
legal capacity and right to execute and deliver, and to perform such
Stockholder's obligations under, this Agreement. No other proceedings or actions
on the part of such Stockholder are necessary to authorize the execution,
delivery or performance of this Agreement or the consummation of the
transactions contemplated hereby. This Agreement has been duly and validly
executed and delivered by such Stockholder and constitutes a valid and binding
agreement of such Stockholder enforceable against such Stockholder in accordance
with its terms.
(e) Conflicting Instruments. As of the date hereof, neither the
execution and delivery of this Agreement nor the performance by such Stockholder
of such Stockholder's
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agreements and obligations hereunder will result in any breach or violation of,
or be in conflict with or constitute a default under, any term of any agreement,
judgment, injunction, order, decree, Law or regulation to which such Stockholder
is a party or by which such Stockholder (or any of such Stockholder's assets) is
bound or subject.
3. Agreement to Vote. For so long as this Agreement is in effect, each
Stockholder hereby unconditionally agrees to vote or to cause to be voted, or
provide a consent with respect to, all of such Stockholder's Subject Shares and
any New Shares (as defined in Section 7) at any annual or special meeting of
stockholders of the Company or action by written consent of stockholders in lieu
of a meeting where such matters arise (a) in favor of the ABC Transaction and
approval of the terms thereof and (b) against, and such Stockholder will not
consent to, (i) approval of any action, proposal or agreement that could compete
with, impede, interfere with or attempt to discourage the ABC Transaction or
inhibit the timely consummation of the ABC Transaction, (ii) any change in the
persons who constitute the Board of Directors of the Company that is not
approved in advance by at least a majority of the persons who were directors of
the Company as of the date hereof (or their successors who were so approved),
(iii) any action or agreement that would result in a breach in any material
respect of any covenant, representation or warranty or any other obligation of
the Company under the Letter Agreement, the Security Agreement and the Note and
(iv) except for the ABC Transaction, any merger, consolidation, business
combination, reorganization, recapitalization, liquidation or sale or transfer
of any material assets of the Company or any subsidiaries. Any such vote shall
be cast or consent shall be given in accordance with such procedures relating
thereto as shall ensure that it is duly counted for purposes of determining that
a quorum is present and for purposes of recording the results of such vote or
consent. The obligations of the Stockholders specified in this Section 3 shall
not be limited or otherwise affected by the commencement, disclosure,
announcement or submission to the Company of any proposal for merger,
consolidation, business combination, reorganization, recapitalization,
liquidation or sale or transfer of any material assets of the Company or any
subsidiaries (an "Acquisition Proposal"), or by any change of recommendation of
the Company's Board of Directors.
4. Irrevocable Proxy. Each Stockholder hereby revokes any and all
proxies with respect to such Stockholder's Subject Shares. For so long as this
Agreement is in effect, in furtherance of the transactions contemplated hereby
and by the Letter Agreement, the Security Agreement and the Note, and in order
to secure the performance of each Stockholder's duties under this Agreement,
each Stockholder hereby grants to MTO and its designees, an irrevocable proxy,
and irrevocably appoints MTO or its designees, with full power of substitution,
such Stockholder's attorney and proxy to vote or, if applicable, to give consent
with respect to, all of such Stockholder's Subject Shares, with regard to any of
the matters referred to in Section 3 above at any annual or special meeting of
stockholders of the Company, however called, or in connection with any action by
written consent by the stockholders of the Company. Each Stockholder
acknowledges and agrees that such proxy is coupled with an interest,
constitutes, among other things, an inducement for MTO to make the Loan to the
Company and to negotiate and enter into the ABC Transaction with the Company and
the Assignee, is irrevocable and shall not be terminated by operation of law or
otherwise upon the occurrence of any event and that no subsequent proxies with
respect to such Stockholder's Subject Shares shall be given (and if given shall
not be effective). The power of attorney granted by each Stockholder is a
durable power of attorney and shall survive the dissolution, bankruptcy, death
or incapacity of such Stockholder.
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5. No Solicitation. From and after the date hereof, each Stockholder
agrees that such Stockholder shall direct and use such Stockholder's best
efforts to cause such Stockholder's employees, agents and representatives
(including any investment banker, attorney or accountant retained by
Stockholder) not to, directly or indirectly, initiate, solicit, encourage or
otherwise facilitate any inquiries or the making of any Acquisition Proposal.
Such Stockholder further agrees that such Stockholder shall direct and use such
Stockholder's best efforts to cause such Stockholder's employees, agents and
representatives (including any investment banker, attorney or accountant
retained by Stockholder) not to, directly or indirectly, engage in any
negotiations concerning, or provide any confidential information or data to, or
have any discussions with, any person relating to an Acquisition Proposal, or
otherwise entertain or facilitate any effort or attempt to make or implement an
Acquisition Proposal.
6. Fiduciary Duties of Directors. Notwithstanding anything herein to
the contrary, nothing herein shall affect the ability of Stockholders who are
directors of the Company ("Stockholder Directors") to take any action as
directors of the Company permissible under the Letter Agreement, the Security
Agreement and the Note, or as such director may determine to be otherwise
necessary to comply with the fiduciary duties as directors of the Company,
whether or not such actions are consistent with the obligations of such persons
as Stockholders under this Agreement. Such Stockholder Directors are entering
into this Agreement solely in their capacity as stockholders of the Company, and
not as directors of the Company.
7. Additional Purchases. Each Stockholder agrees that such Stockholder
will not purchase or otherwise acquire beneficial ownership of any shares of
Company Common Stock after the execution of this Agreement ("New Shares"), nor
will any Stockholder voluntarily acquire the right to vote or share in the
voting of any shares of Company Common Stock other than the Stockholder's
Subject Shares, unless such Stockholder agrees to deliver to MTO immediately
after such purchase or acquisition an irrevocable proxy substantially in the
form of Section 4 of this Agreement with respect to such New Shares. Each
Stockholder also agrees that any New Shares acquired or purchased by him or her
shall be subject to the terms of this Agreement to the same extent as if they
constituted Stockholder's Subject Shares.
8. Disposition of Shares. Except pursuant to this Agreement, no
Stockholder shall, without the prior written consent of MTO, directly or
indirectly, during the term of this Agreement (i) sell, assign, transfer, pledge
or otherwise dispose of (including by merger or otherwise by operation of law),
or enter into any contract, option or other arrangement or understanding with
respect to the direct or indirect sale, assignment, transfer, pledge or other
disposition of (including by merger or otherwise by operation of law) the
Stockholder's Subject Shares, or (ii) deposit any of the Stockholder's Subject
Shares into a voting trust or enter into a voting agreement or arrangement with
respect to the Stockholder's Subject Shares.
9. Miscellaneous.
(a) MTO's Reliance. Each Stockholder understands and acknowledges
that MTO is making the Loan to the Company, entering into the Security Agreement
and negotiating and entering into the ABC Transaction with the Company and the
Assignee in reliance upon such Stockholder's execution, delivery and performance
of this Agreement.
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(b) Entire Agreement. This Agreement constitutes the entire
agreement among the parties with respect to the subject matter hereof and is not
intended to confer upon any person other than the parties hereto any rights or
remedies hereunder.
(c) Costs and Expenses. All costs and expenses incurred in
connection with this Agreement and the transactions contemplated hereby shall be
paid by the party incurring such expenses.
(d) Invalid Provisions. If any provision of this Agreement shall be
invalid or unenforceable under applicable law, such provision shall be
ineffective to the extent of such invalidity or unenforceability only, without
it affecting the remaining provisions of this Agreement.
(e) Execution in Counterparts. This Agreement may be executed in
counterparts transmitted and delivered by facsimile each of which shall be an
original with the same effect as if the signatures hereto and thereto were upon
the same instrument.
(f) Specific Performance. Each Stockholder agrees with MTO that if
for any reason such Stockholder fails to perform any of such Stockholder's
agreements or obligations under this Agreement, irreparable harm or injury to
MTO would be caused as to which money damages would not be an adequate remedy.
Accordingly, such Stockholder agrees that, in seeking to enforce this Agreement
against such Stockholder, MTO shall be entitled, in addition to any other remedy
available at law, equity or otherwise, to specific performance and injunctive
and other equitable relief. The provisions of this Section 8(f) are without
prejudice to any other rights or remedies, whether at law or in equity, that MTO
may have against such Stockholder for any failure to perform any of such
Stockholder's agreements or obligations under this Agreement.
(g) Amendments. This Agreement, including this Section 8(g), may not
be modified, amended, altered or supplemented, except that this Agreement may be
modified, amended, altered or supplemented, as between MTO and any particular
Stockholder, upon the execution and delivery of a written agreement executed by
MTO and such Stockholder.
(h) Termination. The provisions of this Agreement shall remain in
full force and effect until one of the following event has occurred, whichever
first occurs: (a) the date of the consummation of the ABC Transaction, (b) the
date on which the Company and MTO mutually agree in writing not to complete the
ABC Transaction or any other similar transaction intended to transfer certain
Company assets and liabilities to MTO, (c) the date on which the Company enters
into a Third Party Agreement (as defined in the Letter Agreement) and MTO is
paid in full the Liquidated Damages Amount (as defined in the Letter Agreement)
and the original principal amount of the Note, plus accrued interest, and (b)
the date that is three (3) years from the date hereof.
(i) Governing Law and Venue. THIS AGREEMENT SHALL BE DEEMED TO BE
MADE IN AND IN ALL RESPECTS SHALL BE INTERPRETED, CONSTRUED AND GOVERNED BY AND
IN ACCORDANCE WITH THE LAW OF THE STATE OF DELAWARE WITHOUT REGARD TO THE
CONFLICT OF LAW PRINCIPLES THEREOF.
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The parties hereby irrevocably submit to the jurisdiction of the courts of the
State of Delaware and the Federal courts of the United States of America located
in the State of Delaware solely in respect of the interpretation and enforcement
of the provisions of this Agreement and in respect of the transactions
contemplated hereby, and hereby waive, and agree not to assert, as a defense in
any action, suit or proceeding for the interpretation or enforcement hereof or
of any such document, that it is not subject thereto or that such action, suit
or proceeding may not be brought or is not maintainable in said courts or that
the venue thereof may not be appropriate or that this Agreement or any such
document may not be enforced in or by such courts, and the parties hereto
irrevocably agree that all claims with respect to such action or proceeding
shall be heard and determined in such a Delaware State or Federal court. The
parties hereby consent to and grant any such court jurisdiction over the person
of such parties and over the subject matter of such dispute and agree that
mailing of process or other papers in connection with any such action or
proceeding in the manner provided in Section 8(m) or in such other manner as may
be permitted by law shall be valid and sufficient service thereof.
(j) Waiver of Jury Trial. EACH PARTY ACKNOWLEDGES AND AGREES THAT
ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE
COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL
BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT, OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.
EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (i) NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVER, (ii) EACH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS
WAIVER, (iii) EACH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (iv) EACH PARTY HAS
BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL
WAIVERS AND CERTIFICATIONS IN THIS SECTION 8(j).
(k) Successors and Assigns. The provisions of this Agreement shall
be binding upon and inure to the benefit of the parties hereto and their
respective legal successors (including, in the case of each Stockholder, any
executors, administrators, estates, legal representatives and heirs of such
Stockholder) and permitted assigns; provided that, except as otherwise provided
in this Agreement, no party may assign, delegate or otherwise transfer any of
its rights or obligations under this Agreement.
(l) Further Assurances. From time to time, at the request of MTO,
and without further consideration, each Stockholder hereto shall execute and
deliver, or cause to be executed and delivered, such additional or further
documents and take lawful actions of a ministerial nature as may be necessary
and appropriate for the purpose of effectively carrying out the transactions
contemplated by this Agreement.
(m) Notices. All notices and other communications given or made
pursuant hereto shall be in writing and shall be deemed to have been duly given
or made as of the date of receipt and shall be delivered personally or sent by
overnight courier or sent by telecopy, to the
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parties at the following addresses or telecopy numbers (or at such other address
or telecopy number for a party as shall be specified by like notice):
(i) if to a Stockholder, at the address of such Stockholder set
forth on Exhibit A attached hereto or at such other address that such
Stockholder may have provided in writing to MTO; and
(ii) if to MTO:
XxxxXxXxxxx.xxx, Inc.
000 Xxxxxxxxx Xxxxxx
Xxxx Xxxx, Xxxxxxxxxx 00000
Attention: Xxxxx Xxxxxx
Facsimile: (000) 000-0000
with a copy to:
Xxxxxx & Xxxxxxx
000 Xxxxxxxxxxxx Xxxxx
Xxxxx Xxxx, XX 00000
Attention: Xxxx Xxxx, Esq.
Facsimile: (000) 000-0000
(n) Escrow Agreement. This Agreement is qualified in all respects and
subject to the terms and conditions of that certain Escrow Agreement dated as of
October 31, 2001 by and among the Company, Wood Alliance, Inc., U.S. Bank Trust,
N.A., as escrow agent, and Xxxxx Xxxxxxxx, as shareholders representative (the
"Escrow Agreement"). Each Stockholder represents and warrants that there have
not been any Escrow Claims (as such term is defined in the Escrow Agreement)
under the Escrow Agreement; there are no Escrow Claims currently threatened or
pending under the Escrow Agreement, and there are no facts or circumstances
currently in existence that could give rise to an Escrow Claim under the Escrow
Agreement.
[signature page follows]
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IN WITNESS WHEREOF, the parties hereto have executed this Stockholders
Agreement as of the date first written above.
XXXXXXXXXXX.XXX, INC.
By: /s/ Xxxxx Xxxxxx
--------------------------------------
Name: Xxxxx Xxxxxx
Title: Chairman
STOCKHOLDERS:
/s/ Xxxxx X. Xxxx
------------------------------------------
Name: Xxxxx X. Xxxx
/s/ Royal X. Xxxxxx
------------------------------------------
Name: Royal X. Xxxxxx
/s/ Xxxxx X. Xxxxxxxx
---------------------------
Name: Xxxxx X. Xxxxxxxx
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EXHIBIT A
Name Subject Shares
---- --------------
Xxxxx X. Xxxx 15,189,879 common shares
2,580,000 option shares
Royal X. Xxxxxx 8,403,291 common shares
271,879 option shares
Xxxxx X. Xxxxxxxx 6,617,438 common shares
1,118,000 option shares
-----------------
Total 34,180,487
=================
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