AGREEMENT
For one dollar ($1.00) and other good and valuable consideration paid by
each of Societe Innovatech du Grand Montreal, Industries Devma Inc., Fonds de
Solidarite des travailleurs du Quebec (F.T.Q.) and Fonds Regional de Solidarite
Ile de Montreal, limited partnership (collectively the "Investors") to
Compositech Ltd. (the "Corporation"), the receipt and sufficiency of which is
hereby acknowledged by the Corporation, the Corporation hereby covenants and
agrees that it shall, upon the request of the Investors, use its best efforts to
nominate for election by its stockholders, cause the election of and thereafter
continue in office, one person designated by the Investors to serve on the
Corporation's Board of Directors (the "Investors' Nominee"); provided, however,
that (i) the Investors' Nominee shall have experience commensurate with serving
as a director of the Corporation, and (ii) the Investors' Nominee shall not at
the time of designation or at any time thereafter be, or have been, involved in
any legal proceedings which would be required to be disclosed pursuant to Item
401(f) of Regulation S-K (17 C.F.R. ss. 229) in a filing with the United States
Securities and Exchange Commission. Subject to the terms of this Agreement, the
Corporation shall continue to include in the Board of Directors slate of
nominees for election as a director of the Corporation at its annual meeting of
stockholders, any special meeting of stockholders or by consent of stockholders
in lieu of a meeting, the Investors' Nominee. If the Investors' Nominee is
unable to serve, subject to the foregoing proviso, the Corporation shall use its
best efforts to elect as a director another person designated by the Investors.
For one dollar ($1.00) and other good and valuable consideration paid by
each of the Investors, as well as by the Corporation (as set forth below), to
each of Xxxx X. Xxxxxx and Xxxxx Xxxxxx (collectively the "Principal
Shareholders"), the receipt and sufficiency of which is hereby acknowledged by
each of the Principal Shareholders, each of the Principal Shareholders hereby
covenants and agrees solely in his capacity as a shareholder of the Corporation
to vote his shares of the capital stock of the Corporation in a manner so as to
give effect to the foregoing paragraph. In the event, however, that an
Investors' Nominee is not acceptable to the Principal Shareholders, acting
reasonably, without regard to whether the proviso of the foregoing paragraph has
been satisfied, the Principal Shareholders shall advise the Investors of same in
writing within 48 hours of being provided with such information generally
required in regard to a director of a corporation pursuant to Item 401 of
Regulation S-K in respect to the proposed Investors' Nominee, whereupon the
Investors shall designate another person if they wish the Principal Shareholders
to vote in favor of the Investors' Nominee. The right provided to the Principal
Shareholders in the preceding sentence may be exercised only once with respect
to each meeting or consent pursuant to which the Corporation's stockholders are
being asked to vote for nominees to the Board of Directors of the Corporation;
thereafter, in the case of any such meeting or consent where such right has been
exercised, the Principal Shareholders shall not be entitled to refuse the next
proposed Investors' Nominee in accordance with the above sentence.
As further conditions to the Corporation's and the Principal Shareholders'
obligations under this Agreement, (i) the Investors shall cooperate in and bear
the entire cost (including the reasonable legal expenses of the Corporation
and/or the Principal Shareholders) of providing in a timely manner all
information that is required to be disclosed in, and, to the extent required by
law, shall cause to be prepared and filed, a Statement on Schedule 13D under the
Exchange Act and any and all amendments required with respect thereto (the
"Schedule 13D") as may be required by virtue of this Agreement and the
Investors' investment in the Corporation, and (ii) each of the Investors
severally agrees to indemnify and hold harmless, to the extent permitted by law,
each of the Principal Shareholders from and against any and all liabilities,
losses, damages, settlements, claims, costs or expenses, including, without
limitation, reasonable attorneys' fees (collectively, "Liabilities") under U.S.
Federal, state or local laws arising out of or due to (A) any untrue statement
or alleged untrue statement of a material fact by such Investor contained in the
Schedule 13D or (B) any omission or alleged omission by such Investor to state
in the Schedule 13D a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which they
were made, not misleading. As consideration for the Principal Shareholders
entering into this agreement, the Corporation agrees to indemnify and hold
harmless, to the extent permitted by law, each Principal Shareholder from and
against all Liabilities under U.S. Federal, state or local laws arising out of
or due to the Principal Shareholder's compliance with the terms of this
Agreement. Such agreement by the Corporation to indemnify shall survive any
cancellation or termination, or the invalidity or unenforceability of, the
remaining terms hereof.
This Agreement shall terminate on the date on which the Investors own less
than the number of shares of Common Stock of the Corporation in the aggregate as
is specified in Section 7.2 of the Subscription Agreement of even date herewith
among the Investors and the Corporation, as such number of shares may be
adjusted in accordance with the terms of Section 7.2 of the Subscription
Agreement.
Notwithstanding any of the foregoing, nothing shall prevent the
Corporation's directors or officers, acting individually or collectively, from
taking any action required for such directors or officers to discharge their
fiduciary duties to the Corporation and its shareholders. All notices and other
communications hereunder shall be given in writing and shall be given by
telecopier, or delivered by hand, to the other parties at their respective
addresses set forth herein. Any such notice or other communication shall be
deemed to have been received on the date of delivery if delivered by hand, or
the next business day immediately following the date of transmission if sent by
telecopier. The original copy of any notice sent by telecopier shall be
forwarded to the other parties by registered mail, receipt return requested.
As used in this Agreement, the term "Investor" shall include a transferee
of shares of Common Stock of the Corporation owned by the Investors which
transferee is: (i) a corporation, all of the shares of which are owned by any
Investor, both as registered owner and as beneficial owner; (ii) a governmental
body of or controlled by the Government of Quebec; or (iii) a limited
partnership controlled by an Investor or by any governmental body of or
controlled by the Government of Quebec or of which an Investor or any
governmental body of or controlled by the Government of Quebec holds the
majority of the limited partnership units.
This Agreement shall be governed in all respects by the laws of the State
of New York as they are applied to agreements entered into in New York between
New York residents and performed entirely within New York.
DATED: October 16, 1997
COMPOSITECH LTD.
per:
-------------------------------- ---------------------------------------
XXXX X. XXXXXX
Address: Address:
000 Xxxxxxxxx Xxxx 000 Xxxxxxxxx Xxxx
Xxxxxxxxx, Xxx Xxxx Hauppauge, New York
11788-2008, U.S.A. 11788-2008, U.S.A.
Attention: the President Attention: Xxxx X. Xxxxxx
Telecopier: (000) 000-0000
------------------------------------ ---------------------------------------
XXXXX XXXXXX
Address:
000 Xxxxxxxxx Xxxx
Xxxxxxxxx, Xxx Xxxx
00000-0000, X.X.X.
Attention: Xxxxx Xxxxxx
Telecopier: (000) 000-0000
SOCIETE INNOVATECH DU GRAND MONTREAL FONDS DE SOLIDARITE DES TRAVAILLEURS DU
QUEBEC (F.T.Q.)
Per: Per:
-------------------------------- -----------------------------------
Xxxxxx Xxxxxxx Xxxxxxx Xxxxxxx, Senior Vice-
President, Investments
Address: Address:
0000 Xxxxxxxxxx Xxxxxx 0000 Xxxxx Xxxxxx
Xxxxx 0000 Xxxxxxxx, Xxxxxx
Xxxxxxxx, Xxxxxx X0X 0X0
X0X 0X0 Attention: Vice President, Legal
Affairs
Attention: President and Chief
Executive Officer Telecopier: (000) 000-0000
Telecopier: (000) 000-0000 with a copy to: Senior Vice President,
Investments
Telecopier: (000) 000-0000
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INDUSTRIES DEVMA INC. FONDS REGIONAL DE SOLIDARITE ILE DE
MONTREAL, by its general partner,
Gestion du Fonds Regional de Solidarite
Ile de Montreal Inc.
Per:
--------------------------------
Per: Per:
-------------------------------- -----------------------------------
Address: Address:
000, xx xx Xxxxxxxxxxx Xxxxxx West 255, St-Jacques Street West
Suite 1700 3c Floor
Montreal, Quebec Xxxxxxxx, Xxxxxx
X0X 0X0 X0X 0X0
Attention: President Attention: Managing Director
Telecopier: (000) 000-0000 Telecopier: (000) 000-0000
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