SHAREHOLDERS’ MANAGEMENT AGREEMENT
Exhibit
9
SHAREHOLDERS’
MANAGEMENT AGREEMENT
THIS
SHAREHOLDERS’ MANAGEMENT AGREEMENT (the “Agreement”) is made as
of the 18th day of December, 2006 by and among PRIORITY SOFTWARE,
INC., a Nevada corporation (the “Corporation”), ▇▇▇ ▇▇▇▇▇▇▇▇▇
(“▇▇▇▇▇▇▇▇▇”) and PRIVATE CAPITAL PARTNERS, INC., a
New York corporation (“PCP”). The Corporation, ▇▇▇▇▇▇▇▇▇ and PCP are
sometimes referred to herein as the “Parties” or individually, as a
“Party”.
W
I T N E S S E T H :
WHEREAS,
▇▇▇▇▇▇▇▇▇ and
PCP are Shareholders (collectively, the “Shareholders”) of the sole class of the
Corporation’s voting stock in the amounts set forth on the last page of this
Agreement (the “Shares”);
WHEREAS,
the
Shareholders desire to provide for and assure the continuity of ownership and
management of the Corporation and the Shares during the term of this
Agreement;
NOW,
THEREFORE, in
consideration of the premises and mutual covenants and obligations herein
contained, and good and valuable consideration, the sufficiency and receipt
of
which are hereby acknowledged, the parties hereto agree as follows:
1. PRIOR
SHAREHOLDERS’ AGREEMENTS. All prior
agreements and understandings among the parties hereto with respect to the
subject matter hereof and the capital stock of the Corporation, not specifically
incorporated herein by reference, are hereby terminated and are of no further
force and effect.
2. TERM.
The terms and conditions of this Agreement shall commence
as of the date first set forth above and shall terminate on (i) the second
anniversary hereof, unless extended in writing by the Parties or (ii) the Shares
commence being quoted or listed on a public exchange by initial listing or
through the consummation of a reverse merger or similar transaction which
results in the ownership of publicly traded securities.
3.
VOTING; ELECTION OF THE CORPORATION’S DIRECTORS AND
OFFICERS.
(a) The
Corporation and the Shareholders agree that the Corporation’s Board of Directors
shall be comprised of the following:
(i) ▇▇▇▇▇▇▇▇▇;
and
(ii) ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇: Chairman;
(b) The
Corporation and the Shareholders agree that the Corporation’s Officers shall be
comprised of the following:
(i) ▇▇▇▇▇▇▇▇▇: Chief
Executive Officer, President and Secretary; and
(ii) ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇: Treasurer;
4. RESTRICTIONS
ON DISPOSITION OF SHARES.
(a) Transfer
Subject to Agreement. No Shareholder may, directly or indirectly,
transfer (as hereafter defined) the whole or any part of the Shares, or the
certificate or certificates representing same, or any interest therein, except
as hereafter expressly permitted by this Agreement. The term
“transfer,” as herein used, shall include any sale, assignment, gift, mortgage,
pledge, hypothecation, bequest, encumbrance or disposition, or any transfer
as a
result of any voluntary or involuntary legal proceedings, execution, sale,
bankruptcy, insolvency, or otherwise, of any of the shares. Any
transfer of all or any part of the shares in violation of this Agreement shall
be null and void.
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(b) Legend. So
long as this Agreement shall remain in effect, there shall be noted
conspicuously on the face of each certificate representing any of the Shares
in
no less than 10 point font, the following statement:
“This
certificate and the shares of Priority Software, Inc., represented hereby are
subject to a Shareholders’ Management Agreement dated December __, 2006, and any
amendment thereto, a copy of which Agreement and amendments are on file at
the
principal office of the corporation, and any transfer, sale assignment, gift,
mortgage, pledge, hypothecation, bequest, encumbrance or disposition or any
transfer as a result of any voluntary or involuntary legal proceedings,
execution, sale, bankruptcy, insolvency, or otherwise of this certificate in
violation of said agreement shall be invalid.”
(c) Shareholders’
Option to Purchase. If any Shareholder shall intend to transfer his shares
in the Corporation (a “Transferring Shareholder”) such Transferring Shareholder
shall give notice (the “Transfer Notice”) to the remaining Shareholders
(collectively, the “Non-Transferring Shareholders”) setting forth such
intention, as well as all the terms of the Transferring Shareholder’s proposed
sale, including, but not limited to, the name of the prospective purchaser,
the
proposed purchase price of the Transferring Shareholder’s Shares, whether any
financing of the purchase price is required, the prospective closing date of
the
transfer and include an executed, written offer from the prospective purchaser
containing the terms set forth herein. Thereupon, the
Non-Transferring Shareholders shall have a non-assignable option to purchase
all, but not less than all, of the Shares owned by the Transferring Shareholder
as of the date of the Transfer Notice was given, under the terms and conditions
set forth within the Transfer Notice, unless the Non-Transferring Shareholders
and Transferring Shareholder agree, in writing, to other terms. If
the Non-Transferring Shareholders, or any of them, accept the offer of the
Transferring Shareholder as aforesaid, the shares covered thereby shall be
purchased by the Non-Transferring Shareholders in a pro rata proportion to
such
Shareholders’ then ownership in the Corporation or in such other proportions as
may be agreed upon in writing by the Non-Transferring
Shareholders. If any of the Non-Transferring Shareholders does not
accept the offer, his portion of the shares being offered shall be available
for
purchase by the remaining Non-Transferring Shareholder who had previously
accepted the offer.
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The
aforesaid option granted to the
Non-Transferring Shareholders shall be exercisable by giving notice (the “Option
Notice”) to the Transferring Shareholder and the Corporation within sixty (60)
days after receipt of the Transfer Notice. In the event an Option
Notice is given, the Transferring Shareholder shall be obligated to sell, and
the Non-Transferring Shareholders who served an Option Notice shall be obligated
to purchase all, but not less than all, of the Shares owned by the Transferring
Shareholder as of the date the Transfer Notice was given.
(d) Third
Party Offers. In the event none of the Non-Transferring
Shareholders exercise their respective options granted hereunder to purchase
all
of the shares owned by the Transferring Shareholder, after having been given
notice, then the Transferring Shareholder shall have the right to sell all
of
the shares to the prospective purchase set forth within the Transfer Notice
(the
“Third Party”). The Transferring Shareholder, who received and is
willing to accept an arms-length, bona fide, written offer from a Third Party
to
purchase all, but not less than all, of the Shares then owned by the
Transferring Shareholder (the “Third Party Offer”) shall, notwithstanding that
the Non-Transferring Shareholders failed to exercise their options under
Paragraphs 4(c) hereof, grant successive irrevocable non-assignable rights
of
first refusal to buy his shares to the Non-Transferring
Shareholders.
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The
terms of the Third Party Offer
required to be met by the Non-Transferring Shareholders under this paragraph
shall not include any non-monetary terms not reasonably and readily performable
by the Non-Transferring Shareholders.
In
the event that the Non-Transferring
Shareholders do not exercise their respective rights of first refusal hereunder,
the Third Party Offer shall be accepted by the Transferring Shareholder, if
at
all, within thirty (30) days of the expiration of the Shareholders’ right of
first refusal, but only on the exact terms of the Third Party
Offer. The Third Party shall execute and promptly deliver to each
party hereto, and to the Corporation, at the closing of a sale of Shares to
the
Third Party, an agreement acknowledging that the Shares it has purchased are
and
shall remain subject to this Agreement and agreeing to be personally bound
hereby; and upon such closing the Third Party shall succeed the Transferring
Shareholder as a Shareholder under this Agreement. In the event the
Third Party Offer is not accepted by the Transferring Shareholder within thirty
(30) days on the exact terms of the Third Party Offer, or if the Third Party
does not succeed the Transferring Shareholder as a party to this Agreement,
then
such transfer shall be of no force and effect.
(e) Survival
of Taxes. There shall survive the sale of any shares by any party
hereto the liability of such selling Shareholder for his pro-rata portion of
any
taxes, penalties, fines or assessments (not included in the value of shares
sold) which may be imposed on the Corporation by any federal, state or local
government or any agency, department or bureau thereof after the effective
date
of the accountant’s determination, by reason of its corporate operations up to
such date. Conversely, the Transferring Shareholder shall be entitled
to his pro-rata portion of any refund, credit or reduction on account of any
tax, fine or assessment imposed prior to such date, for which no credit was
given in the computation of the total value of the shares sold.
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(f) No
Transfer of Titles. Notwithstanding anything to the
c
contrary
contained herein, the Third Party who has acquired the shares from the
Transferring Shareholder shall not acquire the Transferring Shareholders’
directorship, office or employment title, to the extent same exist, without
the
prior unanimous, written consent of the Non-Transferring Shareholders and the
Corporation.
5. FISCAL
AFFAIRS. The Corporation shall maintain only one bank account (the
“Operating Account”). All check, wire transfers and payments of any
nature shall be deposited into the Operating Account. No funds in
excess of $20,000 may be withdrawn from the Operating Account without both
the
signatures of ▇▇▇▇▇▇▇▇▇ and a nominee of PCP.
6. COMPENSATION;
SALARY. So long as funds are available to the Corporation,
after the payment of all expenses, payroll, taxes and fees, the Shareholders
shall receive the following compensation from the Corporation:
(a) ▇▇▇▇▇▇▇▇▇
shall receive an annual salary of $250,000 for services rendered in managing
the
day to day operations of the Corporation;
(b) PCP
shall receive an annual consulting fee of $83,333 for services rendered in
directing the corporate governance and financial affairs of the
Corporation.
7. NON
COMPETITION. In order to further protect and govern
the affairs of the Corporation in recognition of the highly competitive nature
of the industry in which the Corporation conducts its business ▇▇▇▇▇▇▇▇▇ agrees
that for so long as ▇▇▇▇▇▇▇▇▇ is an employee, officer, director or principal
shareholder (an “Affiliate”) of the Corporation, and during the term of this
Agreement, ▇▇▇▇▇▇▇▇▇ will not engage or participate, directly or indirectly,
in
any business that is in competition in any manner whatever with the business
of
the Corporation. Furthermore, upon the termination of this Agreement
or the termination of ▇▇▇▇▇▇▇▇▇’▇ status as an Affiliate, and considering
▇▇▇▇▇▇▇▇▇’▇ prior position as an Affiliate of Enterpulse, Inc., a Georgia
corporation which assigned and transferred certain assets to the Corporation
contemporaneously with the execution of this Agreement ▇▇▇▇▇▇▇▇▇, excluding
those obligations of ▇▇▇▇▇▇▇▇▇ set forth in that certain Sales Agent Agreement
between ▇▇▇▇▇▇▇▇▇ and Enterpulse, expressly agrees not to engage or participate
directly or indirectly in any business activity that is in competition with
the
Corporation’s business for a period of three (3) years and, in any case, shall
not re-commence employment with Enterpulse, Inc. for a period of
three (3) years.
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8. SPECIFIC
PERFORMANCE. Because the parties to this Agreement will be
irreparably damaged if this Agreement is not specifically enforced, any party
shall be entitled to an injunction restraining any Shareholder from transferring
the Shares in violation of this Agreement, without any bond or other security
being required. If any dispute arises concerning any right or
obligation under this Agreement or purchase or sell any of the Shares, the
right
or obligation shall be enforceable in a court of equity by a decree of specific
performance. Such remedy shall, however, be cumulative and not
exclusive, and shall be in addition to any other remedy which the parties may
have.
9. AFTER-ACQUIRED
SHARES. The terms and provisions of this Agreement shall
apply to all of the Shares of the Corporation now owned by the Shareholders,
and
to any shares which may hereafter be issued or transferred to the Shareholders
in consequence of any additional issuance, purchase, exchange or
reclassification of shares, corporate reorganization, or any other form of
recapitalization, consolidation, merger, share split-up share dividend or
distribution or which are acquired by the Shareholders in any manner whatsoever,
except for an acquisition of any of the Shares covered within this
Agreement.
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10. MEDIATION
AND ARBITRATION.
(a) All
controversies, claims, disputes and matters in question arising out of or
relating to this Agreement or the breach thereof, shall be decided by mediation
and/or arbitration in accordance with this Section 10. The party who
seeks resolution of a controversy, claim, dispute or other matter in question
shall notify the other party in writing of the existence and subject matter
hereof, and shall designate in such notices the names of three prospective
mediators, each of whom shall be registered with the New York, New York office
of the American Arbitration Association. The recipient party shall
select from such list one individual to act as a mediator of the dispute set
forth by the notifying party. The parties agree to meet with said
mediator in the City of New York within two weeks after the recipient party
has
received notice of the dispute and agree to utilize their best efforts and
all
expediency to resolve the matter in dispute. The mediation shall not
continue longer than one (1) hearing day without the written approval of both
parties. Neither party shall be bound by any recommendation of the
mediator; however, any agreement reached during mediation shall be final and
conclusive.
(b) If
the dispute is not resolved by such mediation, it shall be decided by mandatory
arbitration in accordance with the Commercial Arbitration Rules of the American
Arbitration Association. Either party may apply to the American
Arbitration Association for a determination of the dispute set forth in the
notification thereof by the originating party. The parties agree that
the laws of the State of Florida. The award entered or decision made
by the arbitrator(s) shall be final and judgment may be entered upon it in
accordance with applicable law in any court having jurisdiction
thereof. Expense of mediation and/or arbitration shall be shared
equally by both parties.
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11. SUCCESSORS
AND ASSIGNS. All covenants, conditions,
representations, warranties and agreements of the parties contained herein
shall
be binding upon and inure to the benefit of their respective heirs,
beneficiaries, legal representatives, successors and assigns.
12. CONFIDENTIALITY.
(a) Each
of the Shareholders acknowledge that: the business enterprises of the
Corporation (the “Business”) is intensely competitive and exposed to knowledge
of confidential information of the Corporation and the Business including,
but
in no manner limited to information limited to the sale of the Business as
contemplated in Section 4; the direct and indirect disclosure of any such
confidential information to existing or potential competitors of the Corporation
would do damage, monetary or otherwise, to the Corporation’s Business; and the
engaging by the Shareholders in any of the activities prohibited by this
Agreement may constitute improper appropriation and/or use of such
information. The Shareholders expressly acknowledges confidential
information constitutes a protectable business interest of the
Company.
(b) During
the Term of this Agreement, the Shareholders shall not, directly or indirectly,
whether individually, as a director, stockholder, owner, partner, employee,
principal or agent of any business, or in any other capacity make known,
disclose, furnish, make available or utilize any of the confidential information
of the Business other than the proper performance of the duties contemplated
herein, or as required by a court of competent jurisdiction or other
administrative or legislative body.
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13. AGREEMENT. This
Agreement, including all documents attached hereto or referenced herein, which
are incorporated herein as if fully set forth, embodies the entire agreement
and
understanding between the parties relating to the sale and purchase of the
Stock
and supersedes any prior understanding or agreements with respect to the subject
matter hereof.14.AMENDMENT. No
supplement, modification or amendment of this Agreement shall be binding upon
the parties unless executed in writing by the party against whom enforcement
is
sought.
15. EXPENSES. Whether
or not the transactions contemplated by this Agreement are consummated, other
than as expressly provided for herein, each of the parties hereto shall pay
the
fees and expenses of its respective counsel, accountants and other experts,
and
all other expenses incurred by such party incident to the negotiation,
preparation and execution of this Agreement and consummation of the transactions
contemplated hereby.
16. INVALIDITY. 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
so long as the economic and legal substance of the transactions contemplated
hereby is not affected in any manner materially adverse to either
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 in an acceptable manner to the
end
that the transactions contemplated hereby are fulfilled to the extent
possible.
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17. HEADINGS. The
headings of the articles, sections and paragraphs of this Agreement are included
for convenience only and shall not be deemed to constitute part of this
Agreement or to affect the construction hereof or thereof.
18. CONSTRUCTION
AND REFERENCES. Words used in this Agreement, regardless of the
number or gender specifically used, shall be deemed and construed to include
any
other number, singular or plural, and any other gender, masculine, feminine
or
neuter, as the context shall require. Unless otherwise specified, all
references in this Agreement to Sections, paragraphs or clauses are deemed
references to the corresponding Sections, paragraphs or clauses in this
Agreement, and all references in this Agreement to Schedules are references
to
the corresponding Schedules attached to this Agreement.
19. MODIFICATION
AND WAIVER. Any of the terms or conditions of this
Agreement may be waived in writing at any time by the party which is entitled
to
the benefits thereof. No waiver of any of the provisions of this
Agreement shall be deemed to or shall constitute a waiver of any other
provisions hereof (whether or not similar).
20. NOTICES. Any
notice, request, instruction or other document to be given hereunder by either
party to the other party shall be in writing and delivered personally, via
telecopy (with receipt confirmed) or by registered or certified mail, postage
prepaid (with return receipt requested) to the address of the Shareholders
set
forth above.
[Remainder
of page left intentionally blank.]
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IN
WITNESS WHEREOF,
this Agreement has been duly executed as of the day and year first set forth
above.
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PRIORITY
SOFTWARE, INC.
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By:
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▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, Chairman
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PRIORITY
SOFTWARE, INC.
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By:
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▇▇▇
▇▇▇▇▇▇▇▇▇, Chief Executive Officer
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| ▇▇▇ ▇▇▇▇▇▇▇▇▇ | |||
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PRIVATE
CAPITAL PARTNERS, INC.
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By:
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▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, Vice President
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EXHIBIT
A
PRIORITY
SOFTWARE, INC.
SHARE
OWNERSHIP
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▇▇▇
▇▇▇▇▇▇▇▇▇
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9,000,000
Shares
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50%
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PRIVATE
CAPITAL PARTNERS, INC.
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9,000,000
Shares
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50%
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