US FAX Announces Settlement Reached with Renaissance Capital and the Shareholders of ActionFax International Inc

Business Wire, Oct 1, 1997

PHILADELPHIA--(BUSINESS WIRE)--Oct. 1, 1997--US FAX Inc., (OTC Bulletin Board: USFX) Wednesday announced that it has reached an agreement with Renaissance Capital Partners II Ltd. and the majority of all holders of common stock of ActionFax International, Inc. to settle all litigation existing between them.

In June 1995, US FAX acquired all of the outstanding shares of common stock of ActionFax International in exchange for nine million shares of its common stock. Subsequently, US FAX rescinded the issuance of the shares and the transaction. Whereupon, in August 1996 Renaissance Capital Partners instituted legal action in the Court of Common Pleas (Philadelphia) against US FAX.

The settlement provides for US FAX to receive certain assets of the business of ActionFax and for the company to receive back an aggregate of about seven million shares of common stock with Renaissance and the other shareholders of ActionFax retaining approximately two million shares. The shares retained by Renaissance and other shareholders of ActionFax will contain certain restrictions regarding resales.

The settlement will also provide for all litigation existing among the parties to be dismissed.

Commenting on the settlement, Craig L. Hope, a vice president of the company said, "Management is pleased that this matter has been settled and finalized to a satisfactory conclusion for the company and the holders of its common stock. We are confident that we have made every effort to ensure the integrity in the market for the company's securities and view the settlement as a positive step for the company."

Hope also stated that the settlement will permit the company to move forward with the distribution to its shareholders of common stock of its 90% owned subsidiary, Foton Systems Inc.

Founded in 1985, US FAX is a pioneer and one of the original developers of digital fax communication networks. The company's present activities focus on advanced holographic data applications as well as Internet electronic voice and fax messaging solutions. The company will have outstanding an aggregate of 9.9 million shares of its common stock following the settlement.

Foton Systems Inc. (OTC Bulletin Board: FUSS), a 90% owned subsidiary of US FAX, as previously announced by the company, will distribute the shares of common stock of Foton Systems to stockholders of record as of Sept. 30, 1997, subject to the completion of the settlement of the litigation relating to the ActionFax transaction, and other matters.

CONTACT: US FAX, Inc., Philadelphia

Hal Winkler, 800/329-1517