AGREEMENT
by and among
SPEED RELEASE LOCK COMPANY,
XXXXXX CORPORATION,
AND
PPCT PRODUCTS, LLC
Dated as of November 30, 2000
TABLE OF CONTENTS
Page
----
ARTICLE I. THE MERGER AND THE PURCHASE.................................................1
1.1 The Merger.....................................................................1
1.2 The Purchase...................................................................2
1.3 The Closing....................................................................2
1.4 Owners Deliveries at Closing...................................................2
1.5 Effective Time.................................................................2
ARTICLE II. THE SURVIVING CORPORATION...................................................2
2.1 Certificate of Incorporation...................................................2
2.2 Bylaws.........................................................................2
2.3 Directors......................................................................3
2.4 Officers.......................................................................3
ARTICLE III. CONVERSION OF XXXXXX COMMON STOCK AND PURCHASE OF PPCT INTERESTS............3
3.1 Conversion of Xxxxxx Common Stock..............................................3
3.2 Purchase of PPCT Interests.....................................................3
3.3 Exchange of Certificates.......................................................3
ARTICLE IV. REPRESENTATIONS AND WARRANTIES..............................................4
4.1 Representations and Warranties of Xxxxxx and PPCT..............................4
4.1.1 Authorization........................................................4
4.1.2 Corporate Status.....................................................5
4.1.3 Capitalization.......................................................5
4.1.4 No Conflicts.........................................................6
4.1.5 Financial Statements.................................................6
4.1.6 Absence of Undisclosed Liabilities...................................7
4.1.7 Taxes................................................................7
4.1.8 Absence of Changes...................................................8
4.1.9 Litigation..........................................................10
4.1.10 Compliance with Laws; Governmental Approvals........................10
4.1.11 Title to Assets.....................................................11
4.1.12 Contracts...........................................................12
4.1.13 Territorial Restrictions............................................13
4.1.14 Inventories.........................................................13
4.1.15 Bank Accounts.......................................................13
4.1.16 Licenses............................................................13
4.1.17 Intellectual Property...............................................14
4.1.18 Insurance...........................................................15
4.1.19 Environmental Matters...............................................15
4.1.20 Employees and Labor Matters.........................................16
4.1.21 Employee Benefit Plans and Related Matters..........................17
AGREEMENT - PAGE i
4.1.22 Brokers; Finders, etc..............................................19
4.1.23 Disclosure.........................................................19
4.1.24 Accounts Receivable................................................19
4.2 Representations and Warranties of Speed Release...............................20
4.2.1 Authorization......................................................20
4.2.2 Corporate Status...................................................20
4.2.3 Capitalization.....................................................20
4.2.4 No Conflicts.......................................................21
4.2.5 Financial Statements...............................................21
4.2.6 Absence of Undisclosed Liabilities.................................22
4.2.7 Taxes..............................................................22
4.2.8 Absence of Changes.................................................23
4.2.9 Litigation.........................................................24
4.2.10 Compliance with Laws; Governmental Approvals.......................25
4.2.11 Title to Assets....................................................25
4.2.12 Contracts..........................................................26
4.2.13 Territorial Restrictions...........................................27
4.2.14 Inventories........................................................27
4.2.15 Bank Accounts......................................................27
4.2.16 Licenses...........................................................28
4.2.17 Intellectual Property..............................................28
4.2.18 Insurance..........................................................29
4.2.19 Environmental Matters..............................................29
4.2.20 Employees and Labor Matters........................................30
4.2.21 Employee Benefit Plans and Related Matters.........................30
4.2.22 Brokers; Finders, etc. ............................................32
4.2.23 Validity of the Xxxxxx Merger Shares...............................33
4.2.24 Disclosure.........................................................33
4.2.25 Accounts Receivable................................................33
4.3 Representations and Warranties of the Owners..................................33
ARTICLE V. COVENANTS...................................................................34
5.1 Conduct of Business by Xxxxxx and PPCT........................................34
5.2 Conduct of Business by Speed Release..........................................36
5.3 No Solicitation...............................................................38
5.4 Access and Information; Cooperation for SEC Filings by Speed Release;
Schedules.....................................................................39
5.5 Public Announcements..........................................................40
5.6 Vote or Consent on the Merger and the Purchase; Other Actions.................40
5.7 Further Actions...............................................................40
5.8 Further Assurances............................................................41
5.9 Employee Benefits.............................................................41
5.10 Registration Statement Matters................................................42
5.11 Finder's Agreement............................................................42
5.12 Collateral....................................................................43
5.13 Collateral....................................................................43
AGREEMENT - PAGE ii
ARTICLE VI. CONDITIONS PRECEDENT.......................................................44
6.1 Conditions to Obligations of Each Party.......................................44
6.1.1 No Injunction, etc. ................................................44
6.2 Conditions to Obligation of Speed Release.....................................44
6.2.1 Representations; Performance........................................44
6.2.2 Consents............................................................44
6.2.3 No Material Adverse Effect..........................................45
6.2.4 Investment Letters..................................................45
6.2.5 Simultaneous Closing................................................45
6.2.6 Disclosure Documents................................................45
6.2.7 Condition to Purchase...............................................45
6.3 Conditions to Obligations of Xxxxxx and PPCT........................45
6.3.1 Representations; Performance........................................45
6.3.2 Consents............................................................45
6.3.3 No Material Adverse Effect..........................................46
6.3.4 Bedowitz Indebtedness...............................................46
6.3.5 Bedowitz Agreements.................................................46
6.3.6 Amendment; Split....................................................46
ARTICLE VII. TERMINATION................................................................46
7.1 Termination...................................................................46
7.2 Effect of Termination.........................................................47
ARTICLE VIII. MISCELLANEOUS.............................................................48
8.1 Survival of Representations and Warranties, etc. .............................48
8.2 Expenses......................................................................48
8.3 Severability..................................................................48
8.4 Notices.......................................................................48
8.5 Miscellaneous.................................................................50
8.5.1 Headings............................................................50
8.5.2 Entire Agreement....................................................50
8.5.3 Counterparts........................................................50
8.5.4 Governing Law.......................................................50
8.5.5 Arbitration.........................................................50
8.5.6 Binding Effect......................................................51
8.5.7 Assignment..........................................................51
8.5.8 No Third-Party Beneficiaries........................................51
8.5.9 Amendment; Waiver, etc. ............................................51
8.5.10 Confidentiality.....................................................51
LIST OF EXHIBITS
Exhibit A - Promissory Note
Exhibit B - Investment Letter
AGREEMENT - PAGE iii
AGREEMENT
THIS AGREEMENT, dated as of November 30, 2000, by and among Speed
Release Lock Company, a Delaware corporation ("Speed Release"), Xxxxxx
Corporation, a Florida corporation ("Xxxxxx"), and PPCT Products, LLC, a
Florida limited liability company ("PPCT").
RECITALS
AS, Speed Release and Xxxxxx desire to effect a business combination
under which Xxxxxx will be merged with and into Speed Release and the holders
of each class of common stock, $2.50 par value, of Xxxxxx ("Xxxxxx Common
Stock") will receive shares of common stock, par value $0.001 per share, of
Speed Release ("Speed Release Common Stock") in exchange for their shares of
Xxxxxx Common Stock (the "Merger");
AS, Speed Release desires to purchase from Xxxxxx Xxxxxx, Xxxxxx
X'Xxxxxxx and Holster, LLC, a Delaware limited liability company (Xxxxxx
Xxxxxx, Xxxxxx X'Xxxxxxx and Holster, LLC are collectively referred to herein
as the "Owners" and each individually as the "Owner"), and the Owners desire to
sell to Speed Release all of the membership interests (the "PPCT Interests") in
PPCT (the "Purchase");
AS, the Boards of Directors of Speed Release and Xxxxxx has each
approved the Merger, and the Board of Directors of Speed Release and the
Managing Member of PPCT each has approved the Purchase, upon the terms and
subject to the conditions set forth herein;
AS, for federal income tax purposes, it is intended that the Merger
shall qualify as a reorganization within the meaning of Section 368 of the
Internal Revenue Code of 1986, as amended (the "Code"); and
AS, the parties hereto desire to make certain representations,
warranties, covenants and agreements in connection with the Merger and the
Purchase.
NOW, THEREFORE, in consideration of the mutual representations,
warranties, covenants, agreements made herein and of the mutual benefits to be
derived hereby, and other good and valuable consideration, the sufficiency and
adequacy of which is hereby acknowledged, the parties hereto agree as follows:
ARTICLE I.
THE MERGER AND THE PURCHASE
1.1 THE MERGER. Subject to the terms and conditions of this
Agreement, at the Effective Time (as defined in Section 1.4), Xxxxxx will merge
with and into Speed Release and the separate corporate existence of Xxxxxx shall
thereupon cease. Speed Release shall be the
AGREEMENT - PAGE 1
surviving corporation (the "Surviving Corporation") in the Merger. The Merger
shall have the effects specified in Section 259 of the Delaware General
Corporation Law (the "DGCL") and Section 607.1107 of the Florida 1989 Business
Act (the "Florida Act").
1.2 THE PURCHASE. Subject to the terms and conditions of this
Agreement, at the Closing, the Owners will sell, convey, transfer and assign to
Speed Release, and Speed Release will purchase from the Owners the PPCT
Interests, which are owned by the Owners as set forth on SCHEDULE 4.1.3 to this
Agreement.
1.3 THE CLOSING. Subject to the terms and conditions of this
Agreement, the closing of the Merger and the Purchase (the "Closing") shall
concurrently take place: (a) at the office of Xxxxx & Xxxxxx LLP, 0000 Xxxx
Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxx 00000, at 9:00 a.m., Central time, on the
first business day following the day on which the last of the conditions to be
fulfilled or waived set forth in Article 6 shall be fulfilled or waived in
accordance herewith; or (b) at such other time, date or place as Speed Release
and Xxxxxx may agree. The date on which the Closing occurs is hereinafter
referred to as the "Closing Date."
1.4 OWNERS DELIVERIES AT CLOSING. At the Closing, the Owners
shall deliver or cause to be delivered to Speed Release certificates
representing all of the PPCT Interests registered in the name of the Owners
assigned to Speed Release in form acceptable to counsel to Speed Release.
Subsequent to the Closing, the Owners shall execute and deliver from time to
time at the request of Speed Release all such further documents and instruments
as, in the reasonable opinion of Speed Release's counsel, may be required in
order to vest in Speed Release full and complete title to the PPCT Interests.
1.5 EFFECTIVE TIME. If the conditions to the Merger set forth in
Article 6 shall have been fulfilled or waived in accordance herewith and this
Agreement shall not have been terminated as provided in Article 7, the parties
hereto shall cause Certificate of Merger meeting the requirements of Section
252 of the DGCL and Articles of Merger meeting the requirements of Section
607.1105 of the Florida Act to be properly executed and filed in accordance
with such sections as soon as practicable after the Closing. The Merger shall
become effective at the time of filing of the Certificate of Merger with the
Secretary of State of the State of Delaware in accordance with the DGCL, or at
such later time which the parties to this Agreement shall have agreed upon and
designated in such filing as the effective time of the Merger (the "Effective
Time").
ARTICLE II.
THE SURVIVING CORPORATION
2.1 CERTIFICATE OF INCORPORATION. The Certificate of
Incorporation of Speed Release in effect immediately prior to the Effective
Time shall be the Certificate of Incorporation of the Surviving Corporation,
until duly amended in accordance with applicable law, except that the name of
the Surviving Corporation shall change to "Xxxxxx Corporation."
2.2 BYLAWS. The Bylaws of Speed Release in effect immediately
prior to the Effective Time shall be the Bylaws of the Surviving Corporation,
until duly amended in accordance with applicable law.
AGREEMENT - PAGE 2
2.3 DIRECTORS. The directors of the Surviving Corporation as of
the Effective Time shall be as set forth on SCHEDULE 2.3.
2.4 OFFICERS. The officers of the Surviving Corporation as of the
Effective Time shall be as set forth on SCHEDULE 2.4.
ARTICLE III.
CONVERSION OF XXXXXX COMMON STOCK
AND PURCHASE OF PPCT INTERESTS
3.1 CONVERSION OF XXXXXX COMMON STOCK.
(a) At the Effective Time, each share of Speed Release Common
Stock outstanding immediately prior to the Effective Time shall remain
outstanding and shall represent one share of common stock of the Surviving
Corporation.
(b) Subject to the provisions of Sections 3.1(d) and 3.3(d)
hereof, at the Effective Time, each share of Xxxxxx Common Stock issued and
outstanding immediately prior to the Effective Time shall, by virtue of the
Merger and without any action on the part of the holders thereof, be converted
into the right to receive 35,111.29 shares of Speed Release Common Stock (the
"Xxxxxx Merger Shares").
(c) As a result of the Merger and without any action on the
part of the holder thereof, all shares of Xxxxxx Common Stock shall cease to be
outstanding and shall be canceled and retired and shall cease to exist, and
each holder of a certificate (a "Xxxxxx Certificate") representing any shares
of Xxxxxx Common Stock shall thereafter cease to have any rights with respect
to such shares, except the right to receive upon the surrender of the
Certificate, without interest, the Speed Release Common Stock and cash (in lieu
of fractional shares) into which the shares represented by the Xxxxxx
Certificate have been converted in accordance with Sections 3.1(b) and 3.3(d)
of this Agreement.
(d) Each share of Xxxxxx Common Stock issued and held in
Xxxxxx'x treasury at the Effective Time shall, by virtue of the Xxxxxx Merger,
cease to be outstanding and shall be canceled and retired without payment of
any consideration therefor.
3.2 PURCHASE OF PPCT INTERESTS.
As consideration for the purchase of the PPCT Interests, Speed Release
shall deliver to the Owners an aggregate of 2,910,214 shares of Speed Release
Common Stock.
3.3 EXCHANGE OF CERTIFICATES.
(a) At or after the Effective Time, each holder of the Xxxxxx
Certificates, upon the surrender of the Xxxxxx Certificates to Speed Release
and upon satisfaction of customary delivery requirements, shall be entitled to
receive in exchange therefor the shares of Speed Release Common Stock and cash
(in lieu of fractional shares) into which such shares of Xxxxxx Common Stock
have been converted as provided in Section 3.1 of this Agreement. The Xxxxxx
Certificate so surrendered shall be canceled. No interest will be paid or
accrued on the value of any Speed Release Common Stock payable to holders of
the Xxxxxx Certificates. Until
AGREEMENT - PAGE 3
so surrendered, each Xxxxxx Certificate shall be deemed for all purposes, other
than as provided below with respect to the payment of dividends or other
distributions, if any, in respect of Speed Release Common Stock, to represent
the number of whole shares of Speed Release Common Stock and cash (in lieu of
fractional shares) into which the shares of Xxxxxx Common Stock theretofore
represented thereby shall have been converted.
(b) Despite any other provisions of this Agreement, no
dividends on Speed Release Common Stock shall be paid with respect to any
shares of Xxxxxx Common Stock represented by a Xxxxxx Certificate until the
Xxxxxx Certificate is surrendered for exchange as provided in this Agreement.
Subject to the effect of applicable laws, following surrender of any such
Xxxxxx Certificate, there shall be paid to the holders of the Xxxxxx
Certificates representing whole shares of Speed Release Common Stock issued in
exchange therefor, without interest, (i) at the time of such surrender, the
amount of dividends or other distributions with a record date after the
Effective Time theretofore payable with respect to such whole shares of Speed
Release Common Stock and not paid, less the amount of any withholding taxes
which may be required thereon, and (ii) at the appropriate payment date, the
amount of dividends or other distributions with a record date after the
Effective Time but prior to surrender and a payment date subsequent to
surrender payable with respect to such whole shares of Speed Release Common
Stock, less the amount of any withholding taxes which may be required thereon.
(c) At or after the Effective Time, there shall be no
transfers on the stock transfer books of Xxxxxx of the shares of Xxxxxx Common
Stock which were outstanding immediately prior to the Effective Time.
(d) No fractional shares of Speed Release Common Stock shall
be issued pursuant hereto. In lieu of the issuance of any fractional shares of
Speed Release Common Stock pursuant to Sections 3.1 hereof, cash adjustments
will be paid to holders in respect of any fractional shares of Speed Release
Common Stock that would otherwise be issuable, and the amount of the cash
adjustment shall be equal to such fractional share multiplied by $2.50.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES
4.1 REPRESENTATIONS AND WARRANTIES OF XXXXXX AND PPCT. Each of
Xxxxxx and PPCT represents and warrants to Speed Release as follows:
4.1.1 AUTHORIZATION. Each of Xxxxxx and PPCT has the requisite
corporate power and authority to execute and deliver this Agreement and all
agreements contemplated hereby (collectively, the "Transaction Agreements"),
and, subject only to the approval of this Agreement and the transactions
contemplated hereby by the holders of 100% of the outstanding shares of Xxxxxx
Common Stock and 100% of the outstanding units of PPCT Interests (the
"Requisite Approval"), to perform fully its obligations hereunder and
thereunder and to consummate the transactions contemplated hereby and thereby.
The execution and delivery by each of Xxxxxx and PPCT of this Agreement and the
other Transaction Agreements and, subject to obtaining the Requisite Approval,
the consummation of the transactions contemplated hereby and thereby, have been
duly authorized by all requisite corporate or limited liability company, as
applicable, action of Xxxxxx and PPCT. Each of Xxxxxx and PPCT has duly
executed and delivered this Agreement and on the Closing Date Xxxxxx and PPCT
will have duly executed and delivered the
AGREEMENT - PAGE 4
Transaction Agreements to which they are parties. Subject to obtaining the
Requisite Approval, this Agreement is, and on the Closing Date each of the
Transaction Agreements will be, legal, valid and binding obligations of Xxxxxx
and PPCT, enforceable against each of them in accordance with their respective
terms, except as may be limited by applicable bankruptcy and other laws
regarding creditors' rights generally, and general principles of equity.
4.1.2 CORPORATE STATUS.
(a) Xxxxxx is a corporation duly organized, validly existing
and in good standing under the laws of the State of Florida, with full
corporate power and authority to carry on its business and to own or lease and
to operate its properties as and in the places where such business is conducted
and such properties are owned, leased or operated. PPCT is a limited liability
company duly organized, validly existing and in good standing under the laws of
the State of Florida, with full limited liability company power and authority
to carry on its business and to own or lease and to operate its properties as
and in the places where such business is conducted and such properties are
owned, leased or operated.
(b) Each of Xxxxxx and PPCT is duly qualified or licensed to
do business in the jurisdictions specified in SCHEDULE 4.1.2, which are the
only jurisdictions in which the operation of its respective business or the
character of the properties owned, leased or operated by it makes such
qualification or licensing necessary.
(c) Prior to the date of this Agreement, Xxxxxx has delivered
to Speed Release complete and correct copies of its articles of incorporation
and bylaws, and PPCT has delivered to Speed Release complete and correct copies
of its articles of organization and operating agreement, each as amended and in
effect on the date so delivered. Xxxxxx is not in violation of any of the
provisions of its articles of incorporation or bylaws, and PPCT is not in
violation of its articles of organization and operating agreement. The minute
books and other corporate records of Xxxxxx, and the similar records of PPCT,
contain a true and complete record of all action taken at all meetings and by
all written consents in lieu of meetings of the shareholders, the Board of
Directors and committees of the Board of Directors of Xxxxxx, and the managers
and members of PPCT, as applicable. The stock transfer ledgers and other
similar records of Xxxxxx and PPCT currently reflect all record transfers prior
to the execution of this Agreement in the capital stock of Xxxxxx and the units
of PPCT Interests.
4.1.3 CAPITALIZATION.
(a) The authorized capital stock of Xxxxxx consists solely of
4,000 shares of Xxxxxx Common Stock, of which 200 shares are issued and
outstanding and 3,800 shares are held in treasury. All issued and outstanding
shares of Xxxxxx Common Stock are duly authorized, validly issued, fully paid,
non-assessable and free of preemptive rights. SCHEDULE 4.1.3 sets forth the
names and addresses of, and the number of shares of Xxxxxx Common Stock held
by, all holders of Xxxxxx Common Stock, each of whom holds his shares free and
clear of all liens, pledges, assessments, charges, security interests, claims
or other encumbrances of any kind (each, a "Lien").
(b) There are 1,000 units of PPCT Interests issued and
outstanding. All issued and outstanding units of PPCT Interests are duly
authorized, validly issued, fully paid, non-
AGREEMENT - PAGE 5
assessable and free of preemptive rights. SCHEDULE 4.1.3 sets forth the names
and addresses of, and the number of units of PPCT Interests held by, all
holders of PPCT Interests, each of whom holds his units free and clear of all
Liens.
(c) No subscriptions, options, warrants, conversion or other
rights, agreements, commitments, arrangements or understandings of any kind
obligating Xxxxxx or PPCT, contingently or otherwise, to issue or sell, or
cause to be issued or sold, any shares of Xxxxxx Common Stock, units of PPCT
Interests, or any securities convertible into or exchangeable for any such
shares or units, are outstanding, and no authorization therefor has been given.
There are no outstanding contractual or other rights or obligations to or of
Xxxxxx or PPCT to repurchase, redeem or otherwise acquire any outstanding
shares of Xxxxxx Common Stock or units of PPCT Interests.
(d) Neither Xxxxxx nor PPCT owns directly or indirectly any
interest or investment (whether equity or debt) in any corporation,
partnership, joint venture, business, trust or entity (other than investments
in short-term investment securities).
4.1.4 NO CONFLICTS. The execution, delivery and performance by
Xxxxxx and PPCT of this Agreement and of the other Transaction Agreements to
which they are parties, and the consummation of the transactions contemplated
hereby and thereby, do not and will not conflict with or result in a violation
of or a default under (with or without the giving of notice or the lapse of
time or both), create in any other person a right or claim of termination,
amendment, modification, acceleration or cancellation of, or result in the
creation of any Lien (or any obligation to create any Lien) upon any of the
properties or assets of Xxxxxx or PPCT under, (i) any law, statute, ordinance,
governmental rule or regulation (each, a "Law") applicable to Xxxxxx, PPCT or
any of their properties or assets, (ii) the articles of incorporation or bylaws
of Xxxxxx or the articles of organization or operating agreement of PPCT, or
(iii) except as set forth in SCHEDULE 4.1.4., any contract (whether written or
oral), agreement, arrangement or other instrument (each, a "Contract") to which
Xxxxxx or PPCT is a party or by which Xxxxxx or PPCT or any of the properties
or assets of Xxxxxx or PPCT may be bound or affected, except, in the case of
clause (iii), for violations or defaults that, individually and in the
aggregate, would not have a material adverse effect on its business, results of
operations, condition (financial or otherwise) or prospects of Xxxxxx or PPCT
(a "Xxxxxx or PPCT Material Adverse Effect") and would not materially impair
the ability of Xxxxxx or PPCT to perform its obligations hereunder or under the
other Transaction Agreements to which they are parties. Except as specified in
SCHEDULE 4.1.4, no governmental approval or other approval or other consent of
any party is required to be obtained or made by Xxxxxx or PPCT in connection
with the execution and delivery of this Agreement or the other Transaction
Agreements or the consummation of the transactions contemplated hereby or
thereby.
4.1.5 FINANCIAL STATEMENTS.
(a) Prior to the date of this Agreement, Xxxxxx and PPCT have
delivered to Speed Release complete and correct copies of their (i) unaudited
financial statements (collectively, the "Xxxxxx and PPCT Unaudited Financial
Statements") as, at and for the three month period ended July 31, 2000 (the
"Balance Sheet Date") and (ii) audited financial statements (collectively, the
"Xxxxxx and PPCT Audited Financial Statements") as, at and for the years ended
April 30, 2000, 1999, and 1998, including in each of clause (i) and (ii) the
related
AGREEMENT - PAGE 6
statements of income, changes in shareholders' or owners' equity and changes in
cash flows for the respective periods then ended and including in clause (ii)
the related notes and schedules thereto and the report of its respective
independent public accountants with respect thereto (the Xxxxxx and PPCT
Unaudited Financial Statements and the Xxxxxx and PPCT Audited Financial
Statements are collectively referred to herein as the "Xxxxxx and PPCT
Financial Statements").
(b) The Xxxxxx and PPCT Financial Statements are complete and
correct in all material respects, have been derived from the accounting books
and records of Xxxxxx and PPCT, and have been prepared in accordance with
generally accepted accounting principles ("GAAP") throughout the periods
indicated except that the Xxxxxx and PPCT Unaudited Financial Statements do not
contain notes and may be subject to normal audit adjustments and normal annual
adjustments.
(c) The balance sheets included in the Xxxxxx and PPCT
Financial Statements present fairly the financial position of Xxxxxx and PPCT
as of the respective dates thereof, and the related statements of income,
changes in shareholders' or owners' equity and changes in cash flows included
in the Xxxxxx and PPCT Financial Statements present fairly the result of
operations, changes in shareholders' and owners' equity and changes in cash
flows of Xxxxxx and PPCT for the respective periods indicated.
4.1.6 ABSENCE OF UNDISCLOSED LIABILITIES. Neither Xxxxxx nor PPCT
has any liabilities or obligations of any nature, whether known or unknown,
absolute, accrued, contingent or otherwise and whether due or to become due,
except (a) as set forth in SCHEDULE 4.1.6, (b) as and to the extent disclosed
and adequately reserved against in its respective balance sheet as of the
Balance Sheet Date (the "Xxxxxx and PPCT Latest Balance Sheet") (excluding the
notes thereto) and (c) for liabilities and obligations that (i) were incurred
after the Balance Sheet Date, in the ordinary course of business consistent
with prior practice and (ii) individually and in the aggregate are not material
to Xxxxxx or PPCT and have not had or resulted in, and will not have or result
in, a Xxxxxx or PPCT Material Adverse Effect.
4.1.7 TAXES.
(a) All federal, state, local or foreign income, gross
receipts, license, payroll, employment, excise, stamp, occupation, customer
duties, capital stock, franchise, profits, withholding, social security,
unemployment, disability, real property, personal property, sales, use,
transfer, registration, value added, alternative, add-on minimum taxes, or
other tax of any kind whatsoever, including any interest, penalty, or addition
thereto (each, the "Tax" and collectively, the "Taxes") that are or may be
required to be paid, collected or withheld by or with respect to Xxxxxx or PPCT
or any of their assets or properties on or before the Closing Date or that are
chargeable as a Lien on any assets or properties of Xxxxxx or PPCT have been
timely paid or collected or withheld and remitted to the appropriate taxing or
other governmental authorities, except (i) the Taxes set forth on SCHEDULE
4.1.7; (ii) the Taxes which are being contested in good faith by appropriate
proceedings and for which adequate reserves with respect thereto have been
established and are being maintained in accordance with GAAP; and (iii) the
Taxes that are not yet due and payable and are adequately reserved in the
Xxxxxx and PPCT Latest Balance Sheet, as applicable, or have arisen in the
ordinary course of business since the Balance Sheet Date and before the Closing
Date.
AGREEMENT - PAGE 7
(b) Except as set forth on SCHEDULE 4.1.7 and without limiting
the representation made in Section 4.1.7(a), all federal, state, local and
foreign tax returns that are or may be required to be filed by or with respect
to Xxxxxx or PPCT, or any of their assets or properties, on or before the
Closing Date have been timely filed with the appropriate taxing or other
governmental authorities and have reflected only such positions on such tax
returns as were believed in good faith by the person preparing each such tax
return and the person on whose behalf each such tax return was filed to be
supported under then prevailing Law. All Taxes shown to be due on each such tax
return have been paid.
(c) Except as set forth on SCHEDULE 4.1.7, neither Xxxxxx nor
PPCT (i) has received any written notice of deficiency or assessment from any
taxing or other governmental authority with respect to Taxes; (ii) is currently
under, or has received notice of commencement of, any audit by any taxing or
other governmental authority concerning the Taxes; or (iii) has executed any
waiver of the statute of limitations with respect to any taxable period.
(d) Except as set forth on SCHEDULE 4.1.7, (i) no written
ruling (as such term is used in the Code) has been received from, and no closing
or other similar agreement has been executed with, any taxing or other
governmental authority that will be binding upon Xxxxxx or PPCT or any of their
assets or properties after the Closing and (ii) no power of attorney has been
given by or with respect to Xxxxxx or PPCT to any person with respect to the
Taxes that will be binding upon Xxxxxx, PPCT or the Surviving Corporation.
4.1.8 ABSENCE OF CHANGES. Except as set forth in SCHEDULE 4.1.8,
since the Balance Sheet Date, each of Xxxxxx and PPCT has conducted its business
only in the ordinary course consistent with prior practice and has not:
(a) suffered any Xxxxxx or PPCT Material Adverse Effect;
(b) declared, set aside, made or paid any dividend or other
distribution in respect of its capital stock or membership interests, or
otherwise purchased or redeemed, directly or indirectly, any shares of its
capital stock or membership interests;
(c) issued or sold any shares of its capital stock or
membership interests, or any securities convertible into or exchangeable for any
such shares or membership interests, or issued, sold, granted or entered into
any subscriptions, options, warrants, conversion or other rights, agreements,
commitments, arrangements or understandings of any kind, contingent or
otherwise, to purchase or otherwise acquire any such shares or membership
interests, or any securities convertible into or exchangeable for any such
shares or membership interests;
(d) incurred any indebtedness for borrowed money, issued or
sold any debt securities or prepaid any debt (including, without limitation, any
borrowings from or prepayments to any shareholder or member), except for
borrowings and prepayments in the ordinary course of business;
(e) mortgaged, pledged or otherwise subjected to any Lien, any
of its properties or assets, tangible or intangible, except for (i) mortgages
and encumbrances which secure indebtedness which is properly reflected in the
Xxxxxx and PPCT Latest Balance Sheet; (ii) Liens filed of record; (iii) Liens
for taxes accrued but not yet payable; (iv) Liens arising as a
AGREEMENT - PAGE 8
matter of law in the ordinary course of business with respect to obligations
incurred after the Balance Sheet Date; PROVIDED that the obligations secured
by such Liens are not delinquent or are being contested in good faith; (v)
such imperfections of title and encumbrances, if any, as do not materially
detract from the value of or materially interfere with the present use of any
of such properties or assets or the pending sale of any of such owned
properties or assets; and (vi) capital leases, if any, with third parties for
fair and adequate consideration (collectively, "Permitted Liens");
(f) forgiven, canceled, compromised, waived or released any
debts, claims or rights, except for debts of, or claims and rights against,
persons other than any shareholder or member that have been forgiven, canceled,
compromised, waived or released in the ordinary course of business;
(g) paid or committed to pay any bonus, other incentive
compensation, change in control or similar compensation to any officer,
director, employee, manager, shareholder, member or affiliate, or granted or
committed to grant to any officer, director, employee, manager, shareholder,
member or affiliate any other increase in, or additional, compensation in any
form;
(h) entered into, instituted, adopted or amended or committed
to enter into, institute, adopt or amend any employment, consulting, retention,
change-in-control, collective bargaining, bonus or other incentive compensation,
profit-sharing, health or other welfare, stock option or other equity, pension,
retirement, vacation, severance, deferred compensation or other employment,
compensation or benefit plan, policy, agreement, trust, fund or arrangement in
respect of or for the benefit of any officer, director, employee, manager,
shareholder, member or affiliate;
(i) encountered any labor union organizing activity or had any
actual or threatened employee strikes, work stoppages, slowdowns or lockouts, or
had any material adverse change in its relations with its employees, agents,
customers or suppliers;
(j) amended either of its articles of incorporation or
articles of organization, its bylaws or operating agreement;
(k) changed in any respect its accounting practices, policies
or principles;
(l) incurred, assumed, guaranteed or otherwise become directly
or indirectly liable with respect to any liability or obligation in excess of
$10,000 in each case or $25,000 in the aggregate at any one time outstanding
(whether absolute, accrued, contingent or otherwise and whether direct or
indirect, or as guarantor or otherwise with respect to any liability or
obligation of any other person) other than agreements for purchases of goods or
services in the ordinary course of business;
(m) sold any assets with a value in excess of $10,000 in each
case or $25,000 in the aggregate, other than inventory in the ordinary course of
business;
(n) received any notice of termination of any Contract which,
in any case or in the aggregate, would have or result in a Xxxxxx or PPCT
Material Adverse Effect;
AGREEMENT - PAGE 9
(o) transferred or granted any rights under, or entered into
any settlement regarding the breach or infringement of, any United States or
foreign patents, copyrights, trademarks, service marks, trade names, trade
dress, logos, business and product names, slogans, inventions, trade secrets,
industrial models, formulas, processes, designs, confidential and technical
information, manufacturing, engineering and technical drawings, product
specifications, know-how, and intellectual property rights to or similar to and
registrations and applications for registration relating to any of the foregoing
("Intellectual Property"), or modified any existing rights with respect thereto;
(p) suffered any damage, destruction or loss (whether or not
covered by insurance), or any employment-related problem, that, individually or
in the aggregate, would have or result in a Xxxxxx or PPCT Material Adverse
Effect;
(q) made any capital expenditures or capital additions or
improvements in excess of an aggregate of $25,000;
(r) instituted, settled or agreed to settle any litigation,
action or proceeding before any court or governmental body involving amounts in
excess of $25,000;
(s) entered into any transaction, Contract or commitment other
than in the ordinary course of business, or paid or agreed to pay any legal,
accounting, brokerage or finder's fees, taxes or other expenses in connection
with, or incurred any severance pay obligations by reason of, this Agreement,
the other Transaction Agreements or the transactions contemplated hereby or
thereby; or
(t) taken any action or omitted to take any action that would
result in the occurrence of any of the foregoing.
4.1.9 LITIGATION. Except as set forth in SCHEDULE 4.1.9, there is no
action, claim, demand, suit, proceeding, arbitration, grievance, citation,
summons, subpoena, inquiry or investigation of any nature, civil, criminal,
regulatory or otherwise, in law or in equity, pending or, to the knowledge of
Xxxxxx or PPCT, threatened against or relating to Xxxxxx or PPCT, or against or
relating to the transactions contemplated by this Agreement or the other
Transaction Agreements, and neither Xxxxxx nor PPCT knows or has reason to be
aware of any basis for the same.
4.1.10 COMPLIANCE WITH LAWS; GOVERNMENTAL APPROVALS.
(a) Except as disclosed in SCHEDULE 4.1.10(a), neither Xxxxxx
nor PPCT is, and since January 1, 1997, neither Xxxxxx nor PPCT has been, in
violation of or default under any Law applicable to it or any of its properties
or business, except for any such violations or defaults that, individually and
in the aggregate, have not had and will not have a Xxxxxx or PPCT Material
Adverse Effect. Neither Xxxxxx nor PPCT has received any notice alleging any
such violation or default.
(b) Except as disclosed in SCHEDULE 4.1.10(b), all material
governmental approvals necessary for the conduct of the business and operations
of Xxxxxx and PPCT have been duly obtained and are in full force and effect. As
of the date hereof, there are no
AGREEMENT - PAGE 10
proceedings pending or, to the knowledge of Xxxxxx or PPCT, threatened that
could result in the revocation, cancellation or suspension, or any materially
adverse modification, of any such governmental approval, and the execution
and delivery of this Agreement and the other Transaction Agreements, and the
consummation of the transactions contemplated hereby and thereby will not
result in any such revocation, cancellation, suspension or modification.
4.1.11 TITLE TO ASSETS.
(a) On the Balance Sheet Date, each of Xxxxxx and PPCT had
and, except with respect to assets disposed of for adequate consideration in the
ordinary course of business since such date, as of the date of this Agreement,
has good and merchantable title to all real property and all other material
properties and assets reflected on its respective Latest Balance Sheet, and has
good and merchantable title to all real property and all other material
properties and assets acquired since such date, in each case free and clear of
all Liens except for Permitted Liens. Each of Xxxxxx and PPCT owns, or has valid
leasehold interests in or license to, all material properties and assets used in
the conduct of its business as now conducted. Each of Xxxxxx and PPCT has
adequate rights of ingress and egress with respect to its real property and all
buildings, structures, facilities, fixtures and other improvements thereon. Each
of Xxxxxx and PPCT has delivered or made available to Speed Release prior to the
date of this Agreement copies of the deeds and other instruments (as recorded)
by which Xxxxxx and PPCT acquired such real property, and copies of all title
insurance policies, opinions, abstracts, and surveys in the possession of Xxxxxx
or PPCT relating to such real property.
(b) With respect to each lease of any real property or a
material amount of personal property to which Xxxxxx or PPCT is a party, (i)
such lease is a legal, valid and binding agreement, is in full force and effect
and is enforceable in accordance with its terms; (ii) all rents and other
monetary amounts that have become due and payable thereunder have been paid;
(iii) there exists no default, or event, occurrence, condition or act, which
with the giving of notice, the lapse of time or the happening of any further
event, occurrence, condition or act would become a default under such lease; and
(iv) the execution and delivery of this Agreement and the other Transaction
Agreements and the consummation of the transactions contemplated hereby and
thereby will not constitute a breach under, or cause a termination of, such
lease.
(c) Neither Xxxxxx nor PPCT has any legal obligation, absolute
or contingent, to any other person to sell or otherwise dispose of any
substantial part of its assets; or to sell or dispose of any of its assets
except in the ordinary course of business consistent with past practices.
(d) None of Xxxxxx'x or PPCT's real property, buildings,
structures, facilities, fixtures or other improvements, or the use thereof,
contravenes or violates any building, zoning, administrative, occupational
safety and health or other applicable Law in any material respect.
(e) The improvements on Xxxxxx'x and PPCT's real property are
in good operating condition and in a state of good maintenance and repair,
ordinary wear and tear excepted, are adequate and suitable for the purposes for
which they are presently being used and there are no condemnation or
appropriation proceedings pending or, to the knowledge of Xxxxxx or PPCT,
threatened against any of such real property or the improvements thereon. There
is no writ, injunction, decree, order or judgment outstanding, nor any action,
claim, suit or proceeding,
AGREEMENT - PAGE 11
pending or, to the knowledge of Xxxxxx or PPCT, threatened, relating to the
ownership, lease, use, occupancy or operation of any such real property or
the improvements thereon.
4.1.12 CONTRACTS.
(a) SCHEDULE 4.1.12(a) contains a complete and correct list of
all Contracts of the types described below (true and complete copies or, if
none, reasonably complete and accurate written descriptions of which, together
with all amendments and supplements thereto and all waivers of any terms
thereof, have been made available to Speed Release prior to the date of this
Agreement), to which Xxxxxx or PPCT is a party or by which any of its assets or
properties is bound:
(i) leases, licenses, and other material Contracts
concerning or relating to real property;
(ii) written or oral employment Contracts for
officers, directors, management or key personnel, consulting, agency, collective
bargaining or other similar Contracts and agreements under which current or
future obligations exist relating to or for the benefit of current, future or
former employees, officers, directors, sales representatives, distributors,
dealers, agents, independent contractors or consultants, in each case that are
not cancelable on notice of 30 days or less and do not require payments in the
event of termination;
(iii) loan agreements, indentures, letters of credit,
mortgages, security agreements, pledge agreements, deeds of trust, bonds, notes,
guarantees, and other agreements and instruments effecting, evidencing or
securing the borrowing of money or obtaining of or extension of credit (other
than ordinary trade credit);
(iv) brokerage or finder's agreements;
(v) joint venture, partnership and similar Contracts
involving a sharing of profits or expenses;
(vi) asset purchase agreements and other acquisition
or divestiture agreements (other than agreements for sales of inventory in the
ordinary course of business) and any agreements relating to the sale, lease or
disposal of any capital assets in the amount of $10,000 or more;
(vii) other Contracts with respect to which the
aggregate amount that could reasonably be expected to be paid or received
thereunder in the future exceeds $10,000 per annum or $25,000 in the aggregate;
(viii) Contracts between or among Xxxxxx and PPCT, or
between or among Xxxxxx or PPCT, on the one hand, and any officer, director or
affiliate of Xxxxxx or PPCT, or any shareholder or member, on the other hand;
and
(ix) any other Contracts, agreements or commitments
that are material to Xxxxxx or PPCT or their respective businesses.
AGREEMENT - PAGE 12
(b) All Contracts to which Xxxxxx or PPCT are parties are in
full force and effect and enforceable against Xxxxxx or PPCT, as applicable,
and, to the knowledge of Xxxxxx and PPCT, against each other party thereto.
There does not exist under any Contract any event of default or event or
condition that, after notice or lapse of time or both, would constitute a
violation, breach or event of default thereunder on the part of Xxxxxx or PPCT
or, to the knowledge of Xxxxxx and PPCT, any other party thereto except as set
forth in SCHEDULE 4.1.12(b) and except for such events or conditions that,
individually and in the aggregate, (i) have not had or resulted in, and will
not have or result in, a Xxxxxx or PPCT Material Adverse Effect and (ii) have
not and will not materially impair the ability of Xxxxxx and PPCT to perform
their obligations hereunder or under the other Transaction Agreements to which
they are parties. Except as set forth in SCHEDULE 4.1.12(b), no consent of any
third party is required under any Contract as a result of or in connection
with, and the enforceability of any Contract will not be affected in any manner
by, the execution, delivery and performance of this Agreement or any of the
other Transaction Agreements or the consummation of the transactions
contemplated hereby or thereby.
4.1.13 TERRITORIAL RESTRICTIONS. Except as otherwise described on
SCHEDULE 4.1.13, neither Xxxxxx nor PPCT is restricted by any Contract,
agreement or understanding with any other person from carrying on its business
anywhere in the world.
4.1.14 INVENTORIES. Except for excess and obsolete inventory for
which reserves have been established on the Xxxxxx and PPCT Latest Balance
Sheet: (a) all of the inventories of Xxxxxx and PPCT consisting of raw
materials, supplies, work in process, finished products, spare parts, and
replacement and component parts are of good, usable and merchantable quality in
all material respects and, except as set forth on SCHEDULE 4.1.14, do not
include excess, obsolete or discontinued items; (b) all of the inventories are
of such quality as to meet the quality control standards of Xxxxxx and PPCT,
and any applicable governmental quality control standards; (c) all of the
inventories that are finished goods are saleable as current inventories at the
current prices thereof in the ordinary course of business; and (d) all of the
inventories are recorded on the books of Xxxxxx and PPCT at the lower of cost
or market value determined in accordance with GAAP.
4.1.15 BANK ACCOUNTS. SCHEDULE 4.1.15 sets forth a complete and
correct list containing the names of each bank or other financial institution
in which Xxxxxx and PPCT has an account or safe deposit or lock box, the
account or box number, as the case may be, and the name of every person
authorized to draw thereon or having access thereto.
4.1.16 LICENSES. Each of Xxxxxx and PPCT has all necessary licenses,
permits, approvals, registrations and similar consents and authorizations
(collectively, the "Licenses") required to lawfully conduct its business as
presently conducted, including but not limited to all material Licenses
required for each of Xxxxxx and PPCT to operate as it currently operates and in
accordance with all applicable Laws or orders or permits of any governmental
authority, and (a) each such License is valid, binding and in full force and
effect, (b) no such License is subject to revocation or forfeiture by virtue of
any existing circumstance, (c) no pending or, to the knowledge of Xxxxxx or
PPCT, threatened proceeding to modify in any material respect or revoke any
License exists, (d) no such License is subject to any outstanding order,
decree, judgment, stipulation, or investigation known to Xxxxxx or PPCT that
would materially affect
AGREEMENT - PAGE 13
such License, and (e) neither Xxxxxx nor PPCT is, and neither Xxxxxx nor PPCT
has received any notice that Xxxxxx or PPCT is, in default (or with the giving
of notice or lapse of time or both, would be in default) under any such License.
4.1.17 INTELLECTUAL PROPERTY.
(a) TITLE. SCHEDULE 4.1.17(a)(i) contains a complete and
correct list of all Intellectual Property that is owned by Xxxxxx and PPCT,
other than Intellectual Property that is both not registered or subject to
application for registration and not material to the business of Xxxxxx or
PPCT. All Intellectual Property related to, used in, held for use in connection
with, or necessary for the conduct of, or otherwise material to, the business
of Xxxxxx and PPCT (the "Xxxxxx and PPCT Intellectual Property Assets") are
owned by Xxxxxx and PPCT, except as disclosed on SCHEDULE 4.1.17(a)(ii).
(b) NO INFRINGEMENT. To the knowledge of Xxxxxx and PPCT, the
conduct of its respective business by Xxxxxx and PPCT does not infringe or
otherwise conflict with any rights of any person in respect of any Intellectual
Property. To the knowledge of Xxxxxx and PPCT, none of the Xxxxxx and PPCT
Intellectual Property Assets is being infringed.
(c) LICENSING ARRANGEMENTS. SCHEDULE 4.1.17(c)(i) sets forth
all Contracts, agreements or arrangements pursuant to which Xxxxxx or PPCT has
licensed any Xxxxxx and PPCT Intellectual Property Assets to, or the use of any
Xxxxxx and PPCT Intellectual Property Assets is otherwise permitted (through
non-assertion, settlement or similar agreements or otherwise) by, any other
person. SCHEDULE 4.1.17(c)(ii) sets forth all Contracts, agreements or
arrangements pursuant to which Xxxxxx or PPCT has had Intellectual Property
primarily related to, used in, held for use primarily in connection with, or
necessary for the conduct of or otherwise material to its business licensed to
it, or has otherwise been permitted to use such Intellectual Property (through
non-assertion, settlement or similar agreements or otherwise) (other than
off-the-shelf commercially available software). All of the Contracts,
agreements or arrangements that are or should be set forth on SCHEDULES
4.1.17(c)(i) AND (ii) (the "Xxxxxx and PPCT Intellectual Property Licenses")
(x) are in full force and effect in accordance with their terms and no default
exists thereunder by Xxxxxx or PPCT, or, to the knowledge of Xxxxxx or PPCT, by
any other party thereto, (y) are free and clear of all Liens, and (z) do not
contain any change in control or other terms or conditions that will become
applicable or inapplicable as a result of the consummation of the transactions
contemplated by this Agreement and the other Transaction Agreements. Xxxxxx and
PPCT have made available to Speed Release prior to the date of this Agreement
true and complete copies of all Xxxxxx and PPCT Intellectual Property Licenses
(including amendments, supplements, renewals, waivers and other modifications)
set forth on SCHEDULE 4.1.17(c)(i) AND (ii). All royalties, license fees,
charges and other amounts payable by, on behalf of, to, or for the account of
Xxxxxx or PPCT in respect of any Xxxxxx and PPCT Intellectual Property Assets
are set forth on SCHEDULES 4.1.17(c)(i) AND (ii) and are reflected in the
Xxxxxx and PPCT Financial Statements.
(d) NO INTELLECTUAL PROPERTY LITIGATION. Except as set forth
in SCHEDULE 4.1.17(d), no claim or demand of any person has been made nor is
there any proceeding that is pending, or to the knowledge of Xxxxxx or PPCT,
threatened, which (i) challenges the rights of Xxxxxx or PPCT in respect of any
Xxxxxx and PPCT Intellectual Property Assets, (ii) asserts that Xxxxxx or PPCT
is infringing or otherwise in conflict with, or is, except as set forth in
SCHEDULE
AGREEMENT - PAGE 14
4.1.17(c)(ii), required to pay any royalty, license fee, charge or other amount
with regard to, any Intellectual Property, or (iii) claims that any default
exists under any Contract, agreement or arrangement listed on SCHEDULE
4.1.17(c)(i) OR (ii). Except as set forth in SCHEDULE 4.1.17(d), none of the
Xxxxxx and PPCT Intellectual Property Assets is subject to any outstanding
order, ruling, decree, judgment or stipulation by or with any court,
arbitrator, or administrative agency, or has been the subject of any litigation
within the last five years, whether or not resolved in favor of Xxxxxx or PPCT.
4.1.18 INSURANCE. SCHEDULE 4.1.18 contains a complete and correct
list of all insurance policies maintained by Xxxxxx and PPCT. Xxxxxx and PPCT
have made available to Speed Release prior to the date of this Agreement
complete and correct copies of all such policies, together with all riders and
amendments thereto. Such policies are in full force and effect, all premiums
due thereon have been paid and neither Xxxxxx nor PPCT has received notice of a
material premium increase or cancellation with respect to such policies or of
any default thereunder. Each of Xxxxxx and PPCT has complied in all material
respects with the terms and provisions of such policies. Within the past two
years, neither Xxxxxx nor PPCT has been refused any basic insurance coverage
applied for, and neither Xxxxxx nor PPCT has any reason to believe that its
existing insurance coverage cannot be renewed as and when the same shall
expire, upon terms and conditions standard in the market at the time renewal is
sought.
4.1.19 ENVIRONMENTAL MATTERS.
(a) (i) each of Xxxxxx and PPCT has obtained all
Licenses that are required to be obtained by it in connection with the
operation of its business and ownership of its properties (collectively, the
"Xxxxxx and PPCT Subject Properties") under any applicable Environmental Law
Requirements (as hereinafter defined), except where failure to obtain such
Licenses would not have a Xxxxxx or PPCT Material Adverse Effect;
(ii) each of Xxxxxx and PPCT is in compliance in all
respects with all terms and conditions of such Licenses and with all applicable
Environmental Law Requirements, except where the failure to so comply would not
have a Xxxxxx or PPCT Material Adverse Effect;
(iii) there are no past or present events,
conditions, circumstances, activities or plans, in each case by or relating in
any manner to Xxxxxx or PPCT or their use of the Xxxxxx and PPCT Subject
Properties, that did or would violate or prevent compliance or continued
compliance with any Environmental Law Requirements or give rise to any
Environmental Liability (as hereinafter defined), except for such matters as
would not have a Xxxxxx or PPCT Material Adverse Effect;
(iv) there is no civil, criminal or administrative
action, suit, demand, claim, order, judgment, hearing, notice or demand letter,
notice of violation, investigation or proceeding pending or, to the knowledge
of Xxxxxx or PPCT, threatened by any person against Xxxxxx or PPCT or any prior
owner of any of the Xxxxxx and PPCT Subject Properties, and relating in any way
to any Environmental Law Requirement or seeking to impose any
AGREEMENT - PAGE 15
Environmental Liability, except for such matters as would not have a Xxxxxx or
PPCT Material Adverse Effect;
(v) no hazardous material generated by Xxxxxx or
PPCT has been recycled, treated, stored, disposed of or released by Xxxxxx or
PPCT at any location;
(vi) no oral or written notification of a release of
a hazardous material has been filed by or on behalf of Xxxxxx or PPCT, and no
site or facility now or previously owned, operated or leased by Xxxxxx or PPCT
is listed or proposed for listing on any federal, state or local list of sites
requiring investigation or clean-up; and
(vii) there have been no environmental
investigations, studies, audits, tests, reviews or other analyses conducted by,
or that are in the possession of, Xxxxxx or PPCT in relation to any site or
facility now or previously owned, operated or leased by Xxxxxx or PPCT which
have not been delivered to Speed Release prior to the execution of this
Agreement.
(b) "Environmental Law Requirement" means any Law,
ordinance, rule, regulation, notice, plan or demand letter relating to
pollution or protection of human health, safety or the environment, including
those relating to emissions, discharges, releases, or threatened releases of
pollutants, contaminants, chemicals or industrial, toxic or hazardous
substances or wastes into the environment (including without limitation,
ambient air, surface water, groundwater, soil, wetlands, subsurface strata or
land) or otherwise relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of pollutants,
contaminants, chemicals, or industrial, toxic or hazardous substances or wastes.
(c) "Environmental Liability" means (i) any liability or
obligation arising under any Environmental Law Requirement that has resulted in
or is reasonably likely to result in a Xxxxxx or PPCT Material Adverse Effect,
or (ii) any liability or obligation under any other current theory of law or
equity (including without limitation, any liability for personal injury,
property damage or remediation) that results from, or is based upon or related
to, the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling, or the emission, discharge, release or
threatened release into the environment, of any pollutant, contaminant,
chemical, or industrial, toxic or hazardous substance or waste, which liability
or obligation has resulted in or is reasonably likely to result in a Xxxxxx or
PPCT Material Adverse Effect.
4.1.20 EMPLOYEES AND LABOR MATTERS. Except as set forth in SCHEDULE
4.1.20, neither Xxxxxx nor PPCT is a party to or bound by any collective
bargaining agreement and there are no labor unions or other organizations
representing, purporting to represent or attempting to represent any employees
of Xxxxxx or PPCT. Since January 1, 1997, there has not occurred or been
threatened any material strike, slowdown, picketing, work stoppage, concerted
refusal to work overtime or other similar labor activity with respect to any
employees of Xxxxxx or PPCT, and since such date, each of Xxxxxx and PPCT has
complied in all material respects with all applicable Laws relating to the
employment of labor, including without limitation those relating to wages,
hours, occupational safety and health and collective bargaining. There are no
material labor disputes currently subject to any grievance procedure,
arbitration or litigation and there is
AGREEMENT - PAGE 16
no representation petition pending or threatened with respect to any employee
of Xxxxxx or PPCT. Neither Xxxxxx nor PPCT has received any written notice of,
or is otherwise aware of, any federal, foreign, state or local administrative
proceeding (excluding workers compensation proceedings or except as set forth
in SCHEDULE 4.1.20) pending or, to the knowledge of Xxxxxx or PPCT, threatened
with respect to any employee of Xxxxxx or PPCT. There is no unfair labor
practice, sex, age, race or other discrimination or labor arbitration
proceeding pending or, to the knowledge of Xxxxxx or PPCT, threatened against
Xxxxxx or PPCT.
4.1.21 EMPLOYEE BENEFIT PLANS AND RELATED MATTERS.
(a) EMPLOYEE BENEFIT PLANS.
(i) SCHEDULE 4.1.21(a) sets forth a true and
complete list of each plan, fund or program that provides for its participants
or their beneficiaries, through the purchase of insurance or otherwise,
medical, surgical, or hospital care or benefits, or benefits in the event of
sickness, accident, disability, death or unemployment, or vacation benefits,
apprenticeship or other training programs, or day care centers, scholarship
funds, prepaid legal services, or supplemental income benefits for transferred
employees, or retirement income, or results in a deferral of income by
employees for periods extending to the termination of covered employment or
beyond, regardless of the method of calculating the contributions made to any
such plan, fund or program, or the method of calculating the benefits under any
such plan, fund or program or the method of distributing benefits from any such
plan, fund or program, and each bonus, incentive or deferred compensation,
severance, termination, retention, change in control, stock option or other
equity-based, performance or other employee or retiree benefit or compensation
plan, program, arrangement, agreement or policy, in any such case, whether
written or unwritten (in each case that applies to more than one person), that
(x) provides or may provide benefits or compensation in respect of any employee
or former employee employed or formerly employed by Xxxxxx or PPCT or the
beneficiary or dependent of any such employee or former employee (such
employees, former employees, beneficiaries and dependents collectively, the
"Xxxxxx or PPCT Employees") or under which any Xxxxxx or PPCT Employee is or
may become eligible to participate or derive a benefit and (y) is or has been
entered into, maintained or established by Xxxxxx or PPCT, or to which Xxxxxx
or PPCT contributes or is or has been obligated or required to contribute or
otherwise with respect to which Xxxxxx or PPCT may have any liability
(collectively, the "Xxxxxx and PPCT Plans").
(ii) With respect to each Xxxxxx and PPCT Plan,
Xxxxxx and PPCT have made available to Speed Release prior to the date of this
Agreement, complete and correct copies of: all written Xxxxxx and PPCT Plans;
descriptions of all unwritten Xxxxxx and PPCT Plans; all trust agreements,
insurance contracts or other funding arrangements; the two most recent
actuarial reports prepared for any Xxxxxx and PPCT Plan that is a defined
benefit plan and for which actuarial reports are prepared; the two most recent
annual and similar reports filed with any governmental authority, including all
schedules thereto and all reports attached thereto; the most recent Internal
Revenue Service ("IRS") determination letter issued in respect of any Xxxxxx
and PPCT Plan; current summary plan descriptions and other explanatory
literature or announcements provided to Xxxxxx or PPCT Employees; all material
communications received from or sent to the IRS, the Pension Benefit Guaranty
Corporation or the Department of Labor in respect of any Xxxxxx and PPCT Plan
during the preceding two years; statements or other
AGREEMENT - PAGE 17
communications regarding withdrawal or other multi-employer plan liabilities in
respect of any Xxxxxx and PPCT Plan which is a "multi-employer plan" (as
defined in Sections 3(37) and 4001(a)(3) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA")), if any; and all amendments and
modifications to any such document. Except as disclosed in SCHEDULE 4.1.21(a),
neither Xxxxxx nor PPCT has communicated to any Xxxxxx or PPCT Employee any
intention or commitment to modify any of the Xxxxxx and PPCT Plans or to
establish or implement any other employee or retiree benefit or compensation
arrangement.
(b) QUALIFICATION. Each Xxxxxx and PPCT Plan intended to
be qualified under Section 401(a) of the Code, and the trust (if any) forming a
part thereof, has received a favorable determination letter from the IRS as to
its qualification under the Code and to the effect that each such trust is
exempt from taxation under Section 501(a) of the Code, and, to the knowledge of
Xxxxxx and PPCT, nothing has occurred since the date of such determination
letter that could adversely affect such qualification or tax-exempt status.
(c) COMPLIANCE; LIABILITY.
(i) No Xxxxxx and PPCT Plan covered by Title IV of
the ERISA or Section 412 of the Code is now, or ever was, to the knowledge of
Xxxxxx or PPCT, maintained by Xxxxxx or PPCT or any predecessor of either of
them. None of the Xxxxxx and PPCT Plans nor Xxxxxx nor PPCT has incurred any
liability or penalty under Section 4975 of the Code or Sections 409, 502(i) or
502(l) of ERISA.
(ii) Each of the Xxxxxx and PPCT Plans has been
operated and administered in all respects in substantial compliance with all
applicable Laws, including without limitation all applicable provisions of
ERISA and the Code. There are no pending or, to the knowledge of Xxxxxx or
PPCT, threatened or anticipated claims, in excess of $10,000 individually or
$25,000 in the aggregate, against or involving any of the Xxxxxx and PPCT Plans
and no suit, action or other litigation (excluding claims for benefits incurred
in the ordinary course of Plan activities) has been brought against or with
respect to any Xxxxxx and PPCT Plan.
(iii) All contributions required to be made as of
the date of this Agreement to the Xxxxxx and PPCT Plans have been made or
provided for. Neither Xxxxxx nor PPCT nor any entity under "common control"
with Xxxxxx or PPCT within the meaning of Section 4001 of ERISA has contributed
to, or been required to contribute to, any "multi-employer plan" (as defined in
Sections 3(37) and 4001(a)(3) of ERISA).
(iv) No Xxxxxx or PPCT Employee is or may become
entitled to post-employment benefits of any kind by reason of employment by
Xxxxxx or PPCT, including, without limitation, death or medical benefits
(whether or nor insured), other than (a) coverage provided pursuant to the
terms of any Xxxxxx and PPCT Plan specifically identified as providing such
coverage in SCHEDULE 4.1.21(a) or mandated by Section 4980B of the Code, (b)
retirement benefits payable under any Xxxxxx and PPCT Plan qualified under
Section 401(a) of the Code or (c) deferred compensation fully and adequately
accrued as a liability on the Xxxxxx or PPCT Latest Balance Sheet, as
applicable, or incurred with respect to services rendered after the Balance
Sheet Date in the ordinary course of business consistent with prior practice,
pursuant to the terms of one of the Xxxxxx and PPCT Plans. The consummation of
the transactions contemplated by this Agreement will not result in an increase
in the amount of compensation or
AGREEMENT - PAGE 18
benefits or the acceleration of the vesting or timing of payment of any
compensation or benefits payable to or in respect of any Xxxxxx or PPCT
Employee.
4.1.22 BROKERS; FINDERS, ETC. Neither Xxxxxx nor PPCT has engaged
any broker, finder, consultant or intermediary in connection with the
transactions contemplated by this Agreement who would be entitled to a
brokerage or finder's commission, fee or similar compensation in connection
therewith or upon the consummation thereof. All negotiations relating to this
Agreement and the transactions contemplated hereby have been carried on without
the participation of any person acting on behalf of Xxxxxx or PPCT in such
manner as to give rise to any valid claim against Speed Release or any of its
affiliates for any brokerage or finder's commission, fee or similar
compensation, or for any bonus payable to any officer, director, employee,
member, manager, agent or sales representative of or consultant to Xxxxxx or
PPCT upon consummation of the transactions contemplated hereby.
4.1.23 DISCLOSURE. To the knowledge of Xxxxxx and PPCT, no
representation or warranty by Xxxxxx and PPCT contained in this Agreement nor
any statement or certificate furnished or to be furnished by or on behalf of
Xxxxxx or PPCT to Speed Release or its representatives in connection herewith
or pursuant hereto contains or will contain any untrue statement of a material
fact, or omits or will omit to state any material fact required to make the
statements contained herein or therein not misleading. To the knowledge of
Xxxxxx and PPCT, there is no fact (other than matters of a general economic or
political nature which do not affect the Xxxxxx or PPCT businesses uniquely)
that has not been disclosed by Xxxxxx or PPCT to Speed Release and its
representatives that might reasonably be expected to have or result in a Xxxxxx
or PPCT Material Adverse Effect.
4.1.24 ACCOUNTS RECEIVABLE. All accounts receivable of Xxxxxx and
PPCT that are reflected on the Xxxxxx and PPCT Latest Balance Sheet or on the
accounting records of Xxxxxx and PPCT as of the Closing Date (collectively, the
"Xxxxxx and PPCT Accounts Receivable") represent or will represent valid
obligations arising from sales actually made or services actually performed in
the ordinary course of business. Unless paid prior to the Closing Date, the
Xxxxxx and PPCT Accounts Receivable are or will be as of the Closing Date
current and collectible net of the respective reserves shown on the Xxxxxx and
PPCT Latest Balance Sheet or on the accounting records of Xxxxxx and PPCT as of
the Closing Date (which reserves are adequate and calculated consistent with
past practices and, in the case of the reserve as of the Closing Date, will not
represent a greater percentage of the Xxxxxx and PPCT Accounts Receivable as of
the Closing Date than the reserve reflected in the Xxxxxx and PPCT Latest
Balance Sheet represented of the Xxxxxx and PPCT Accounts Receivable reflected
therein and will not represent a material adverse change in the composition of
such Xxxxxx and PPCT Accounts Receivable in terms of aging). Subject to such
reserves, each of the Xxxxxx and PPCT Accounts Receivable either has been or
will be collected in full, without any set-off, within ninety days after the
day on which it first becomes due and payable. There is no contest, claim, or
right of set-off, other than returns in the ordinary course of business, under
any Contract with any obligor of a Xxxxxx and PPCT Accounts Receivable relating
to the amount or validity of the Xxxxxx and PPCT Accounts Receivable. SCHEDULE
4.1.24 contains a complete and accurate list of all Xxxxxx and PPCT Accounts
Receivable as of the Balance Sheet Date, which list sets forth the aging of the
Xxxxxx and PPCT Accounts Receivable.
AGREEMENT - PAGE 19
4.2 REPRESENTATIONS AND WARRANTIES OF SPEED RELEASE. Speed Release
represents and warrants to Xxxxxx and PPCT as follows:
4.2.1 AUTHORIZATION. Speed Release has the requisite corporate power
and authority to execute and deliver this Agreement and the other Transaction
Agreements to which it is a party, to perform fully its obligations hereunder
and thereunder, and to consummate the transactions contemplated hereby and
thereby. The execution and delivery by Speed Release of this Agreement and the
other Transaction Agreements and the consummation of the transactions
contemplated hereby and thereby have been duly authorized by all requisite
corporate action of Speed Release. Speed Release has duly executed and delivered
this Agreement and on the Closing Date will have duly executed and delivered the
other Transaction Agreements to which it is a party. This Agreement is, and on
the Closing Date each of the other Transaction Agreements to which Speed Release
is a party will be, legal, valid and binding obligations of Speed Release,
enforceable against it in accordance with their respective terms, except as may
be limited by applicable bankruptcy and other laws regarding creditors' rights
generally, and general principles of equity.
4.2.2 CORPORATE STATUS.
(a) Speed Release is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware, with full
corporate power and authority to carry on its business and to own or lease and
to operate its properties as and in the places where such business is conducted
and such properties are owned, leased or operated.
(b) Speed Release is duly qualified and licensed to do
business in the jurisdictions specified in SCHEDULE 4.2.2, which are the only
jurisdictions in which the operation of its business or the character of the
properties owned, leased, or operated by it makes such qualification or
licensing necessary.
(c) Prior to the date of this Agreement, Speed Release has
delivered to Xxxxxx and PPCT complete and correct copies of its certificate of
incorporation and bylaws. Speed Release is not in violation of any of the
provisions of its articles of incorporation or bylaws. The minute books and
other corporate records of Speed Release contain a true and complete record of
all action taken at all meetings and by all written consents in lieu of meetings
of the shareholders, the Board of Directors and committees of the Board of
Directors of Speed Release.
4.2.3 CAPITALIZATION.
(a) The authorized capital stock of Speed Release consists
solely of (i) 25,000,000 shares of Speed Release Common Stock, of which
10,000,080 shares are issued and outstanding, and (ii) 10,000,000 shares of
preferred stock, $0.01 par value, no shares of which are outstanding. All issued
and outstanding shares of Speed Release Common Stock are duly authorized,
validly issued, fully paid, non-assessable and free of preemptive rights.
(b) Except as set forth on SCHEDULE 4.2.3, no subscriptions,
options, warrants, conversion or other rights, agreements, commitments,
arrangements or understandings of any kind obligating Speed Release,
contingently or otherwise, to issue or sell, or cause to be issued or
AGREEMENT - PAGE 20
sold, any shares of Speed Release Common Stock or any securities convertible
into or exchangeable for any such shares, are outstanding; and no
authorization therefor has been given. There are no outstanding contractual
or other rights or obligations to or of Speed Release to repurchase, redeem
or otherwise acquire any outstanding shares of Speed Release Common Stock.
(c) SCHEDULE 4.2.3 sets forth the names and addresses of, and
the number and class of shares of Speed Release Common Stock held by all
beneficial holders of at least 5% of Speed Release Common Stock.
(d) Speed Release does not own directly or indirectly any
interest or investment (whether equity or debt) in any corporation, partnership,
joint venture, business, trust or entity (other than investments in short-term
investment securities).
4.2.4 NO CONFLICTS. The execution, delivery and performance by Speed
Release of this Agreement and of the other Transaction Agreements to which it is
a party, and the consummation of the transactions contemplated hereby and
thereby, do not and will not conflict with or result in a violation of or a
default under (with or without the giving of notice or the lapse of time or
both), create in any other person a right or claim of termination, amendment,
modification, acceleration or cancellation of, or result in the creation of any
Lien (or any obligation to create any Lien) upon any of the properties or assets
of Speed Release under (i) any Law applicable to Speed Release or any of the
properties or assets of Speed Release, (ii) the certificate of incorporation or
bylaws of Speed Release or (iii) except as set forth in SCHEDULE 4.2.4, any
Contract to which Speed Release is a party or by which Speed Release or any of
its properties or assets may be bound or affected, except, in the case of clause
(iii), for violations or defaults that, individually and in the aggregate, would
not have a material adverse effect on the business, results of operations,
condition (financial or otherwise) or prospects of Speed Release (a "Speed
Release Material Adverse Effect"), and would not materially impair the ability
of Speed Release to perform its obligations hereunder or under the other
Transaction Agreements to which it is a party. Except as specified in SCHEDULE
4.2.4, no governmental approval or other consent of any party is required to be
obtained or made by Speed Release in connection with the execution and delivery
of this Agreement or the other Transaction Agreements or the consummation of the
transactions contemplated hereby or thereby.
4.2.5 FINANCIAL STATEMENTS.
(a) Prior to the date of this Agreement, Speed Release has
delivered to Xxxxxx and PPCT complete and correct copies of its audited
financial statements as, at and for the seven month period ended on the Balance
Sheet Date and as, at and for the years ended December 31, 1999, 1998, and 1997
(the "Speed Release Financial Statements"), including the related statements of
income, changes in shareholders' equity and changes in cash flows for the
respective periods then ended, and the related notes and schedules thereto and
the report of its independent public accountants with respect thereto.
(b) The Speed Release Financial Statements are complete and
correct in all material respects, have been derived from the accounting books
and records of Speed Release, and have been prepared in accordance with GAAP
throughout the periods indicated except that
AGREEMENT - PAGE 21
the Speed Release Unaudited Financial Statements do not contain notes and may
be subject to normal audit adjustments and normal annual adjustments.
(c) The balance sheets included in the Speed Release Financial
Statements present fairly the financial position of Speed Release as of the
respective dates thereof, and the related statements of income, changes in
shareholders' equity and changes in cash flows included in such Speed Release
Financial Statements present fairly the result of operations, changes in
shareholders' equity and changes in cash flows of Speed Release for the
respective periods indicated.
4.2.6 ABSENCE OF UNDISCLOSED LIABILITIES. As of the Effective Time,
Speed Release will have no liabilities or obligations of any nature, whether
known or unknown, absolute, accrued, contingent or otherwise and whether due or
to become due, except (a) as set forth in SCHEDULE 4.2.6(a) AND (b) as set forth
in the Pro Forma Balance Sheet of Speed Release as of July 31, 2000 attached
hereto as SCHEDULE 4.2.6(b).
4.2.7 TAXES.
(a) All Taxes that are or may be required to be paid,
collected or withheld by or with respect to Speed Release or any of its assets
or properties on or before the Closing Date or that are chargeable as a Lien on
any assets or properties of Speed Release have been timely paid or collected or
withheld and remitted to the appropriate taxing or other governmental
authorities, except (i) the Taxes set forth on SCHEDULE 4.2.7; (ii) the Taxes
which are being contested in good faith by appropriate proceedings and for which
adequate reserves with respect thereto have been established and are being
maintained in accordance with GAAP; and (iii) the Taxes that are not yet due and
payable and are adequately reserved in the Speed Release Latest Balance Sheet or
have arisen in the ordinary course of business since the Balance Sheet Date and
before the Closing Date.
(b) Except as set forth on SCHEDULE 4.2.7 and without limiting
the representation made in Section 4.2.7(a), all federal, state, local and
foreign tax returns that are or may be required to be filed by or with respect
to Speed Release, or any of their assets or properties, on or before the Closing
Date have been timely filed with the appropriate taxing or other governmental
authorities and have reflected only such positions on such tax returns as were
believed in good faith by the person preparing each such tax return and the
person on whose behalf each such tax return was filed to be supported under then
prevailing Law. The Taxes shown to be due on each such tax return have been
paid.
(c) Except as set forth on SCHEDULE 4.2.7, Speed Release (i)
has not received any written notice of deficiency or assessment from any taxing
or other governmental authority with respect to Taxes; (ii) is not currently
under, or has received notice of commencement of, any audit by any taxing or
other governmental authority concerning any Taxes; or (iii) has not executed any
waiver of the statute of limitations with respect to any taxable period.
(d) Except as set forth on SCHEDULE 4.2.7, (i) no written
ruling (as such term is used in the Code) has been received from, and no closing
or other similar agreement has been executed with, any taxing or other
governmental authority that will be binding upon Speed Release or any of its
assets or properties after the Closing and (ii) no power of attorney has been
AGREEMENT - PAGE 22
given by or with respect to Speed Release to any person with respect to Taxes
that will be binding upon Speed Release or the Surviving Corporation.
4.2.8 ABSENCE OF CHANGES. Except as set forth in SCHEDULE 4.2.8,
since the Balance Sheet Date, Speed Release has conducted its business only in
the ordinary course consistent with prior practice and has not:
(a) suffered any Speed Release Material Adverse Effect;
(b) declared, set aside, made or paid any dividend or other
distribution in respect of its capital stock or membership interests, or
otherwise purchased or redeemed, directly or indirectly, any shares of its
capital stock or membership interests;
(c) issued or sold any shares of its capital stock or
membership interests, or any securities convertible into or exchangeable for any
such shares or membership interests, or issued, sold, granted or entered into
any subscriptions, options, warrants, conversion or other rights, agreements,
commitments, arrangements or understandings of any kind, contingent or
otherwise, to purchase or otherwise acquire any such shares or membership
interests, or any securities convertible into or exchangeable for any such
shares or membership interests;
(d) incurred any indebtedness for borrowed money, issued or
sold any debt securities or prepaid any debt (including, without limitation, any
borrowings from or prepayments to any shareholder or member), except for
borrowings and prepayments in the ordinary course of business;
(e) mortgaged, pledged or otherwise subjected to any Lien, any
of its properties or assets, tangible or intangible, except for Permitted Liens;
(f) forgiven, canceled, compromised, waived or released any
debts, claims or rights, except for debts of, or claims and rights against,
persons other than any shareholder or member that have been forgiven, canceled,
compromised, waived or released in the ordinary course of business;
(g) paid or committed to pay any bonus, other incentive
compensation, change in control or similar compensation to any officer,
director, employee, manager, shareholder, member or affiliate, or granted or
committed to grant to any officer, director, employee, manager, shareholder,
member or affiliate any other increase in, or additional, compensation in any
form;
(h) entered into, instituted, adopted or amended or committed
to enter into, institute, adopt or amend any employment, consulting, retention,
change-in-control, collective bargaining, bonus or other incentive compensation,
profit-sharing, health or other welfare, stock option or other equity, pension,
retirement, vacation, severance, deferred compensation or other employment,
compensation or benefit plan, policy, agreement, trust, fund or arrangement in
respect of or for the benefit of any officer, director, employee, manager,
shareholder, member or affiliate;
AGREEMENT - PAGE 23
(i) encountered any labor union organizing activity or had any
actual or threatened employee strikes, work stoppages, slowdowns or lockouts, or
had any material adverse change in its relations with its employees, agents,
customers or suppliers;
(j) amended either its certificate of incorporation or its
bylaws;
(k) changed in any respect its accounting practices, policies
or principles;
(l) incurred, assumed, guaranteed or otherwise become directly
or indirectly liable with respect to any liability or obligation in excess of
$10,000 in each case or $25,000 in the aggregate at any one time outstanding
(whether absolute, accrued, contingent or otherwise and whether direct or
indirect, or as guarantor or otherwise with respect to any liability or
obligation of any other person) other than agreements for purchases of goods or
services in the ordinary course of business;
(m) sold any assets with a value in excess of $10,000 in each
case or $25,000 in the aggregate, other than inventory in the ordinary course of
business;
(n) received any notice of termination of any Contract which,
in any case or in the aggregate, would have or result in a Speed Release
Material Adverse Effect;
(o) transferred or granted any rights under, or entered into
any settlement regarding the breach or infringement of, any Intellectual
Property or modified any existing rights with respect thereto;
(p) suffered any damage, destruction or loss (whether or not
covered by insurance), or any employment-related problem, that, individually or
in the aggregate, would have or result in a Speed Release Material Adverse
Effect;
(q) made any capital expenditures or capital additions or
improvements in excess of an aggregate of $25,000;
(r) instituted, settled or agreed to settle any litigation,
action or proceeding before any court or governmental body involving amounts in
excess of $25,000;
(s) entered into any transaction, Contract or commitment other
than in the ordinary course of business, or paid or agreed to pay any legal,
accounting, brokerage or finder's fees, taxes or other expenses in connection
with, or incurred any severance pay obligations by reason of, this Agreement,
the other Transaction Agreements or the transactions contemplated hereby or
thereby; or
(t) taken any action or omitted to take any action that would
result in the occurrence of any of the foregoing.
4.2.9 LITIGATION. Except as set forth in SCHEDULE 4.2.9, there is no
action, claim, demand, suit, proceeding, arbitration, grievance, citation,
summons, subpoena, inquiry or investigation of any nature, civil, criminal,
regulatory or otherwise, in law or in equity, pending or, to the knowledge of
Speed Release, threatened against or relating to Speed Release, or against or
relating to the transactions contemplated by this Agreement or the other
Transaction
AGREEMENT - PAGE 24
Agreements, and Speed Release does not know or has no reason to be aware of
any basis for the same.
4.2.10 COMPLIANCE WITH LAWS; GOVERNMENTAL APPROVALS.
(a) Except as disclosed in SCHEDULE 4.2.10(a), Speed Release
is not, and since January 1, 1997, Speed Release has not been, in violation of
or default under any Law applicable to it or any of its properties or business,
except for any such violations or defaults that, individually and in the
aggregate, have not had and will not have a Speed Release Material Adverse
Effect. Speed Release has not received any notice alleging any such violation or
default.
(b) Except as disclosed in SCHEDULE 4.2.10(b), all material
governmental approvals necessary for the conduct of the business and operations
of Speed Release have been duly obtained and are in full force and effect. As of
the date hereof, there are no proceedings pending or, to the knowledge of Speed
Release, threatened that could result in the revocation, cancellation or
suspension, or any materially adverse modification, of any such governmental
approval, and the execution and delivery of this Agreement and the other
Transaction Agreements, and the consummation of the transactions contemplated
hereby and thereby will not result in any such revocation, cancellation,
suspension or modification.
4.2.11 TITLE TO ASSETS.
(a) On the Balance Sheet Date, Speed Release had and, except
with respect to assets disposed of for adequate consideration in the ordinary
course of business since such date, as of the date of this Agreement, has good
and merchantable title to all real property and all other material properties
and assets reflected on the Speed Release Latest Balance Sheet, and has good and
merchantable title to all real property and all other material properties and
assets acquired since such date, in each case free and clear of all Liens except
for Permitted Liens. Speed Release owns, or has valid leasehold interests in or
license to, all material properties and assets used in the conduct of its
business as now conducted. Speed Release has adequate rights of ingress and
egress with respect to its real property and all buildings, structures,
facilities, fixtures and other improvements thereon. Speed Release has delivered
or made available to Xxxxxx and PPCT prior to the date of this Agreement copies
of the deeds and other instruments (as recorded) by which Speed Release acquired
such real property, and copies of all title insurance policies, opinions,
abstracts, and surveys in the possession of Speed Release relating to such real
property.
(b) With respect to each lease of any real property or a
material amount of personal property to which Speed Release is a party, (i) such
lease is a legal, valid and binding agreement, is in full force and effect and
is enforceable in accordance with its terms; (ii) all rents and other monetary
amounts that have become due and payable thereunder have been paid; (iii) there
exists no default, or event, occurrence, condition or act, which with the giving
of notice, the lapse of time or the happening of any further event, occurrence,
condition or act would become a default under such lease; and (iv) the execution
and delivery of this Agreement and the other Transaction Agreements and the
consummation of the transactions contemplated hereby and thereby will not
constitute a breach under, or cause a termination of, such lease.
(c) Speed Release has not had any legal obligation, absolute
or contingent, to any other person to sell or otherwise dispose of any
substantial part of its assets; or to sell or
AGREEMENT - PAGE 25
dispose of any of its assets except in the ordinary course of business
consistent with past practices.
(d) None of Speed Release's real property, buildings,
structures, facilities, fixtures or other improvements, or the use thereof,
contravenes or violates any building, zoning, administrative, occupational
safety and health or other applicable Law in any material respect.
(e) The improvements on Speed Release's real property are in
good operating condition and in a state of good maintenance and repair, ordinary
wear and tear excepted, are adequate and suitable for the purposes for which
they are presently being used and there are no condemnation or appropriation
proceedings pending or, to the knowledge of Speed Release, threatened against
any of such real property or the improvements thereon. There is no writ,
injunction, decree, order or judgment outstanding, nor any action, claim, suit
or proceeding, pending or, to the knowledge of Speed Release, threatened,
relating to the ownership, lease, use, occupancy or operation of any such real
property or the improvements thereon.
4.2.12 CONTRACTS.
(a) SCHEDULE 4.2.12(a) contains a complete and correct list of
all Contracts of the types described below (true and complete copies or, if
none, reasonably complete and accurate written descriptions of which, together
with all amendments and supplements thereto and all waivers of any terms
thereof, have been made available to Speed Release prior to the date of this
Agreement), to which Speed Release is a party or by which any of its assets or
properties is bound:
(i) leases, licenses, and other material Contracts
concerning or relating to real property;
(ii) written or oral employment Contracts for
officers, directors, management or key personnel, consulting, agency, collective
bargaining or other similar Contracts and agreements under which current or
future obligations exist relating to or for the benefit of current, future or
former employees, officers, directors, sales representatives, distributors,
dealers, agents, independent contractors or consultants, in each case that are
not cancelable on notice of 30 days or less and do not require payments in the
event of termination;
(iii) loan agreements, indentures, letters of credit,
mortgages, security agreements, pledge agreements, deeds of trust, bonds, notes,
guarantees, and other agreements and instruments effecting, evidencing or
securing the borrowing of money or obtaining of or extension of credit (other
than ordinary trade credit);
(iv) brokerage or finder's agreements;
(v) joint venture, partnership and similar
Contracts involving a sharing of profits or expenses;
(vi) asset purchase agreements and other acquisition
or divestiture agreements (other than agreements for sales of inventory in the
ordinary course of business) and
AGREEMENT - PAGE 26
any agreements relating to the sale, lease or disposal of any capital assets
in the amount of $10,000 or more;
(vii) other Contracts with respect to which the
aggregate amount that could reasonably be expected to be paid or received
thereunder in the future exceeds $10,000 per annum or $25,000 in the aggregate;
(viii) Contracts between Speed Release, on the one
hand, and any officer, director or affiliate of Speed Release, or any
shareholder, on the other hand; and
(ix) any other Contracts, agreements or commitments
that are material to Speed Release or its business.
(b) All Contracts to which Speed Release is a party are in
full force and effect and enforceable against Speed Release and, to the
knowledge of Speed Release, against each other party thereto. There does not
exist under any Contract any event of default or event or condition that, after
notice or lapse of time or both, would constitute a violation, breach or event
of default thereunder on the part of Speed Release or, to the knowledge of Speed
Release, any other party thereto except as set forth in SCHEDULE 4.2.12(b) and
except for such events or conditions that, individually and in the aggregate,
(i) have not had or resulted in, and will not have or result in, a Speed Release
Material Adverse Effect and (ii) have not and will not materially impair the
ability of Speed Release to perform its obligations hereunder or under the other
Transaction Agreements to which it is a party. Except as set forth in SCHEDULE
4.2.12(b), no consent of any third party is required under any Contract as a
result of or in connection with, and the enforceability of any Contract will not
be affected in any manner by, the execution, delivery and performance of this
Agreement or any of the other Transaction Agreements or the consummation of the
transactions contemplated hereby or thereby.
4.2.13 TERRITORIAL RESTRICTIONS. Except as otherwise described on
SCHEDULE 4.2.13, Speed Release is not restricted by any Contract, agreement or
understanding with any other person from carrying on its business anywhere in
the world.
4.2.14 INVENTORIES. Except for excess and obsolete inventory for
which reserves have been established on the Speed Release Latest Balance Sheet:
(a) all of the inventories of Speed Release of raw materials, supplies, work in
process, finished products, spare parts, and replacement and component parts are
of good, usable and merchantable quality in all material respects and, except as
set forth on SCHEDULE 4.2.14, do not include excess, obsolete or discontinued
items; (b) all of the inventories are of such quality as to meet the quality
control standards of Speed Release, and any applicable governmental quality
control standards; (c) all of the inventories that are finished goods are
saleable as current inventories at the current prices thereof in the ordinary
course of business; and (d) all of the inventories are recorded on the books of
Speed Release at the lower of cost or market value determined in accordance with
GAAP.
4.2.15 BANK ACCOUNTS. SCHEDULE 4.2.15 sets forth a complete and
correct list containing the names of each bank or other financial institution in
which Speed Release has an account or safe deposit or lock box, the account or
box number, as the case may be, and the name of every person authorized to draw
thereon or having access thereto.
AGREEMENT - PAGE 27
4.2.16 LICENSES. Speed Release has all necessary Licenses required to
lawfully conduct its business as presently conducted, including but not limited
to all material Licenses required for Speed Release to operate as it currently
operates and in accordance with all applicable Laws or orders or permits of any
governmental authority, and (a) each License is valid, binding and in full force
and effect; (b) no such License is subject to revocation or forfeiture by virtue
of any existing circumstance; (c) no pending or, to the knowledge of Speed
Release, threatened proceeding to modify in any material respect or revoke any
License exists; (d) no such License is subject to any outstanding order, decree,
judgment, stipulation, or investigation known to Speed Release that would
materially affect such License; and (e) Speed Release is not, and Speed Release
has not received any notice that it is, in default (or with the giving of notice
or lapse of time or both, would be in default) under any such License.
4.2.17 INTELLECTUAL PROPERTY.
(a) TITLE. SCHEDULE 4.2.17(a)(i) contains a complete
and correct list of all Intellectual Property that is owned by Speed Release,
other than Intellectual Property that is both not registered or subject to
application for registration and not material to the business of Speed
Release. All Intellectual Property related to, used in, held for use in
connection with, or necessary for the conduct of, or otherwise material to,
the business of Speed Release (the "Speed Release Intellectual Property
Assets") are owned by Speed Release, except as disclosed on SCHEDULE
4.2.17(a)(ii).
(b) NO INFRINGEMENT. To the knowledge of Speed
Release, the conduct of its business by Speed Release does not infringe or
otherwise conflict with any rights of any person in respect of any
Intellectual Property. To the knowledge of Speed Release, none of the Speed
Release Intellectual Property Assets is being infringed.
(c) LICENSING ARRANGEMENTS. SCHEDULE 4.2.17(c)(i) sets
forth all Contracts, agreements or arrangements pursuant to which Speed Release
has licensed any Speed Release Intellectual Property Assets to, or the use of
any Speed Release Intellectual Property Assets is otherwise permitted (through
non-assertion, settlement or similar agreements or otherwise) by, any other
person. SCHEDULE 4.2.17(c)(ii) sets forth all Contracts, agreements or
arrangements pursuant to which Speed Release has had Intellectual Property
primarily related to, used in, held for use primarily in connection with, or
necessary for the conduct of or otherwise material to its business licensed to
it, or has otherwise been permitted to use such Intellectual Property (through
non-assertion, settlement or similar agreements or otherwise) (other than
off-the-shelf commercially available software). All of the Contracts,
agreements or arrangements that are or should be set forth on SCHEDULES
4.2.17(c)(i) AND (ii) (the "Speed Release Intellectual Property Licenses") (x)
are in full force and effect in accordance with their terms and no default
exists thereunder by Speed Release, or, to the knowledge of Speed Release, by
any other party thereto, (y) are free and clear of all Liens, and (z) do not
contain any change in control or other terms or conditions that will become
applicable or inapplicable as a result of the consummation of the transactions
contemplated by this Agreement and the other Transaction Agreements. Prior to
the date of this Agreement, Speed Release has made available to Xxxxxx and PPCT
true and complete copies of all Speed Release Intellectual Property Licenses
(including amendments, supplements, renewals, waivers and other modifications)
set forth on SCHEDULE 4.2.17(c)(i) AND (ii). All royalties, license fees,
charges and other amounts payable by, on behalf of, to, or for the
AGREEMENT - PAGE 28
account of Speed Release in respect of any Speed Release Intellectual Property
Assets are set forth on SCHEDULES 4.2.17(c)(i) AND (ii) and are reflected in
the Speed Release Financial Statements.
(d) NO INTELLECTUAL PROPERTY LITIGATION. Except as set
forth in SCHEDULE 4.2.17(d), no claim or demand of any person has been made
nor is there any proceeding that is pending, or to the knowledge of Speed
Release, threatened, which (i) challenges the rights of Speed Release in
respect of any Speed Release Intellectual Property Assets, (ii) asserts that
Speed Release is infringing or otherwise in conflict with, or is, except as
set forth in SCHEDULE 4.2.17(c)(ii), required to pay any royalty, license
fee, charge or other amount with regard to, any Speed Release Intellectual
Property, or (iii) claims that any default exists under any Contract,
agreement or arrangement listed on SCHEDULE 4.2.17(c)(i) OR (ii). Except as
set forth in SCHEDULE 4.2.17(d), none of the Speed Release Intellectual
Property Assets is subject to any outstanding order, ruling, decree, judgment
or stipulation by or with any court, arbitrator, or administrative agency, or
has been the subject of any litigation within the last five years, whether or
not resolved in favor of Speed Release.
4.2.18 INSURANCE. SCHEDULE 4.2.18 contains a complete and correct
list of all insurance policies maintained by Speed Release. Speed Release has
made available to Xxxxxx and PPCT prior to the date of this Agreement complete
and correct copies of all such policies, together with all riders and amendments
thereto. Such policies are in full force and effect, all premiums due thereon
have been paid and Speed Release has not received notice of a material premium
increase or cancellation with respect to such policies or of any default
thereunder. Speed Release has complied in all material respects with the terms
and provisions of such policies. Within the past two years, Speed Release has
not been refused any basic insurance coverage applied for, and Speed Release has
no reason to believe that its existing insurance coverage cannot be renewed as
and when the same shall expire, upon terms and conditions standard in the market
at the time renewal is sought.
4.2.19 ENVIRONMENTAL MATTERS.
(a) (i) Speed Release has obtained all Licenses
that are required to be obtained by it in connection with the operation of
its business and ownership of its properties (collectively, the "Speed
Release Properties") under any applicable Environmental Law Requirements (as
hereinafter defined), except where failure to obtain such Licenses would not
have a Speed Release Material Adverse Effect;
(ii) Speed Release is in compliance in all
respects with all terms and conditions of such Licenses and with all
applicable Environmental Law Requirements, except where the failure to so
comply would not have a Speed Release Material Adverse Effect;
(iii) there are no past or present events,
conditions, circumstances, activities or plans, in each case by or relating
in any manner to Speed Release or its use of the Speed Release Properties,
that did or would violate or prevent compliance or continued compliance with
any Environmental Law Requirements or give rise to any Environmental
Liability (as hereinafter defined), except for such matters as would not have
a Speed Release Material Adverse Effect;
AGREEMENT - PAGE 29
(iv) there is no civil, criminal or
administrative action, suit, demand, claim, order, judgment, hearing, notice
or demand letter, notice of violation, investigation or proceeding pending
or, to the knowledge of Speed Release, threatened by any person against Speed
Release or any prior owner of any of the Speed Release Properties, and
relating in any way to any Environmental Law Requirement or seeking to impose
any Environmental Liability, except for such matters as would not have a
Speed Release Material Adverse Effect;
(v) no hazardous material generated by Speed
Release has been recycled, treated, stored, disposed of or released by Speed
Release at any location;
(vi) no oral or written notification of a
release of a hazardous material has been filed by or on behalf of Speed
Release, and no site or facility now or previously owned, operated or leased
by Speed Release is listed or proposed for listing on any federal, state or
local list of sites requiring investigation or clean-up; and
(vii) there have been no environmental
investigations, studies, audits, tests, reviews or other analyses conducted
by, or that are in the possession of, Speed Release in relation to any site
or facility now or previously owned, operated or leased by Speed Release
which have not been delivered to Xxxxxx or PPCT prior to the execution of
this Agreement.
4.2.20 EMPLOYEES AND LABOR MATTERS. Except as set forth in SCHEDULE
4.2.20, Speed Release is not now a party to or bound by any collective
bargaining agreement and there are no labor unions or other organizations
representing, purporting to represent or attempting to represent any employees
of Speed Release. Since January 1, 1997, there has not occurred or been
threatened any material strike, slowdown, picketing, work stoppage, concerted
refusal to work overtime or other similar labor activity with respect to any
employees of Speed Release, and since such date, Speed Release has complied in
all material respects with all applicable Laws relating to the employment of
labor, including without limitation those relating to wages, hours, occupational
safety and health and collective bargaining. There are no material labor
disputes currently subject to any grievance procedure, arbitration or litigation
and there is no representation petition pending or threatened with respect to
any employee of Speed Release. Speed Release has not received any written notice
of, or is otherwise aware of, any federal, foreign, state or local
administrative proceeding (excluding workers compensation proceedings or except
as set forth in SCHEDULE 4.2.20) pending or, to the knowledge of Speed Release,
threatened with respect to any employee of Speed Release. There is no unfair
labor practice, sex, age, race or other discrimination or labor arbitration
proceeding pending or, to the knowledge of Speed Release, threatened against
Speed Release.
4.2.21 EMPLOYEE BENEFIT PLANS AND RELATED MATTERS.
(a) EMPLOYEE BENEFIT PLANS.
(i) SCHEDULE 4.2.21(a) sets forth a true and
complete list of each plan, fund or program that provides for its
participants or their beneficiaries, through the purchase of insurance or
otherwise, medical, surgical, or hospital care or benefits, or benefits in
the event of sickness, accident, disability, death or unemployment, or
vacation benefits, apprenticeship or other training programs, or day care
centers, scholarship funds, prepaid legal services, or
AGREEMENT - PAGE 30
supplemental income benefits for transferred employees, or retirement income,
or results in a deferral of income by employees for periods extending to the
termination of covered employment or beyond, regardless of the method of
calculating the contributions made to any such plan, fund or program, or the
method of calculating the benefits under any such plan, fund or program or
the method of distributing benefits from any such plan, fund or program, and
each bonus, incentive or deferred compensation, severance, termination,
retention, change in control, stock option or other equity-based, performance
or other employee or retiree benefit or compensation plan, program,
arrangement, agreement or policy, in any such case, whether written or
unwritten (in each case that applies to more than one person), that (x)
provides or may provide benefits or compensation in respect of any employee
or former employee employed or formerly employed by Speed Release or the
beneficiary or dependent of any such employee or former employee (such
employees, former employees, beneficiaries and dependents collectively, the
"Speed Release Employees") or under which any Speed Release Employee is or
may become eligible to participate or derive a benefit and (y) is or has been
entered into, maintained or established by Speed Release, or to which Speed
Release contributes or is or has been obligated or required to contribute or
otherwise with respect to which Speed Release may have any liability
(collectively, the "Speed Release Plans").
(ii) With respect to each Speed Release Plan,
Speed Release has made available to Xxxxxx and PPCT prior to the date of this
Agreement, complete and correct copies of: all written Speed Release Plans;
descriptions of all unwritten Speed Release Plans; all trust agreements,
insurance contracts or other funding arrangements; the two most recent
actuarial reports prepared for any Speed Release Plan that is a defined
benefit plan and for which actuarial reports are prepared; the two most
recent annual and similar reports filed with any governmental authority,
including all schedules thereto and all reports attached thereto; the most
recent IRS determination letter issued in respect of any Speed Release Plan;
current summary plan descriptions and other explanatory literature or
announcements provided to Speed Release Employees; all material
communications received from or sent to the IRS, the Pension Benefit Guaranty
Corporation or the Department of Labor in respect of any Speed Release Plan
during the preceding two years; statements or other communications regarding
withdrawal or other multi-employer plan liabilities in respect of any Speed
Release Plan which is a "multi-employer plan" (as defined in Sections 3(37)
and 4001(a)(3) of ERISA), if any; and all amendments and modifications to any
such document. Except as disclosed in SCHEDULE 4.2.21(a), Speed Release has
not communicated to any Speed Release Employee any intention or commitment to
modify any Speed Release Plan or to establish or implement any other employee
or retiree benefit or compensation arrangement.
(b) QUALIFICATION. Each Speed Release Plan intended to
be qualified under Section 401(a) of the Code, and the trust (if any) forming
a part thereof, has received a favorable determination letter from the IRS as
to its qualification under the Code and to the effect that each such trust is
exempt from taxation under Section 501(a) of the Code, and, to the knowledge
of Speed Release, nothing has occurred since the date of such determination
letter that could adversely affect such qualification or tax-exempt status.
AGREEMENT - PAGE 31
(c) COMPLIANCE; LIABILITY.
(i) No Speed Release Plan covered by Title IV
of ERISA or Section 412 of the Code is now, or ever was, to the knowledge of
Speed Release, maintained by Speed Release or any of its predecessors.
Neither any Speed Release Plan nor Speed Release has incurred any liability
or penalty under Section 4975 of the Code or Sections 409, 502(i) or 502(l)
of ERISA.
(ii) Each of the Speed Release Plans has been
operated and administered in all respects in substantial compliance with all
applicable Laws, including without limitation all applicable provisions of
ERISA and the Code. There are no pending or, to the knowledge of Speed
Release, threatened or anticipated claims, in excess of $10,000 individually
or $25,000 in the aggregate, against or involving any of the Speed Release
Plans and no suit, action or other litigation (excluding claims for benefits
incurred in the ordinary course of its activities) has been brought against
or with respect to any Speed Release Plan.
(iii) All contributions required to be made as
of the date of this Agreement to the Speed Release Plans have been made or
provided for. Neither Speed Release nor any entity under "common control"
with Speed Release within the meaning of Section 4001 of ERISA has
contributed to, or been required to contribute to, any "multi-employer plan"
(as defined in Sections 3(37) and 4001(a)(3) of ERISA).
(iv) No Speed Release Employee is or may
become entitled to post-employment benefits of any kind by reason of
employment by Speed Release, including, without limitation, death or medical
benefits (whether or nor insured), other than (a) coverage provided pursuant
to the terms of any Speed Release Plan specifically identified as providing
such coverage in SCHEDULE 4.2.21(a) or mandated by Section 4980B of the Code,
(b) retirement benefits payable under any Speed Release Plan qualified under
Section 401(a) of the Code or (c) deferred compensation fully and adequately
accrued as a liability on the Speed Release Latest Balance Sheet or incurred
with respect to services rendered after the Balance Sheet Date in the
ordinary course of business consistent with prior practice, pursuant to the
terms of a Speed Release Plan. The consummation of the transactions
contemplated by this Agreement will not result in an increase in the amount
of compensation or benefits or the acceleration of the vesting or timing of
payment of any compensation or benefits payable to or in respect of any Speed
Release Employee.
4.2.22 BROKERS; FINDERS, ETC. Speed Release has not engaged any
broker, finder, consultant or intermediary in connection with the
transactions contemplated by this Agreement who would be entitled to a
brokerage or finder's commission, fee or similar compensation in connection
therewith or upon the consummation thereof. All negotiations relating to this
Agreement and the transactions contemplated hereby have been carried on
without the participation of any person acting on behalf of Speed Release in
such manner as to give rise to any valid claim against Xxxxxx or PPCT or any
of its affiliates for any brokerage or finder's commission, fee or similar
compensation, or for any bonus payable to any officer, director, employee,
member, manager, agent or sales representative of or consultant to Speed
Release upon consummation of the transactions contemplated hereby.
AGREEMENT - PAGE 32
4.2.23 VALIDITY OF THE XXXXXX MERGER SHARES. The Mixson Merger
Shares, when issued and delivered in accordance with the terms of this
Agreement, will have been duly authorized and validly issued and will be fully
paid and non-assessable.
4.2.24 DISCLOSURE. To the knowledge of Speed Release, no
representation or warranty by Speed Release contained in this Agreement nor any
statement or certificate furnished or to be furnished by or on behalf of Speed
Release to Xxxxxx or PPCT or their representatives in connection herewith or
pursuant hereto contains or will contain any untrue statement of a material
fact, or omits or will omit to state any material fact required to make the
statements contained herein or therein not misleading. To the knowledge of Speed
Release, there is no fact (other than matters of a general economic or political
nature which do not affect Speed Release's business uniquely) known to Speed
Release that has not been disclosed by Speed Release to Xxxxxx or PPCT and their
representatives that might reasonably be expected to have or result in a Speed
Release Material Adverse Effect.
4.2.25 ACCOUNTS RECEIVABLE. All accounts receivable of Speed Release
that are reflected on the Speed Release Latest Balance Sheet or on the
accounting records of Speed Release as of the Closing Date (collectively, the
"Speed Release Accounts Receivable") represent or will represent valid
obligations arising from sales actually made or services actually performed in
the ordinary course of business. Unless paid prior to the Closing Date, the
Speed Release Accounts Receivable are or will be as of the Closing Date current
and collectible net of the respective reserves shown on the Speed Release Latest
Balance Sheet or on the accounting records of Speed Release as of the Closing
Date (which reserves are adequate and calculated consistent with past practices
and, in the case of the reserve as of the Closing Date, will not represent a
greater percentage of the Speed Release Accounts Receivable as of the Closing
Date than the reserve reflected in the Speed Release Latest Balance Sheet
represented of the Speed Release Accounts Receivable reflected therein and will
not represent a material adverse change in the composition of such Speed Release
Accounts Receivable in terms of aging). Subject to such reserves, each of the
Speed Release Accounts Receivable either has been or will be collected in full,
without any set-off, within ninety days after the day on which it first becomes
due and payable. There is no contest, claim, or right of set-off, other than
returns in the ordinary course of business, under any Contract with any obligor
of a Speed Release Accounts Receivable relating to the amount or validity of
such Accounts Receivable. SCHEDULE 4.2.25 contains a complete and accurate list
of all Speed Release Accounts Receivable as of the date of the Speed Release
Latest Balance Sheet, which list sets forth the aging of such Speed Release
Accounts Receivable.
4.3 REPRESENTATIONS AND WARRANTIES OF THE OWNERS. Each of the
Owners represents and warrants to Speed Release that each Owner is the owner,
beneficially and of record, of the number of units of PPCT Interests set forth
opposite their name on SCHEDULE 4.3, free and clear of any Lien, option, right
of first refusal or equity of any kind, and there are no other equity securities
of PPCT held of record by any other person. Each Owner has, and on the Closing
Date will have, complete and unrestricted power and the unqualified right to
sell, assign, transfer and deliver to Speed Release on the Closing Date, good,
valid and marketable title to all of the units of PPCT Interests owned by such
Owner as set forth on SCHEDULE 4.3, free and clear of any Lien, option, right of
first refusal or equity of any kind.
AGREEMENT - PAGE 33
ARTICLE V.
COVENANTS
5.1 CONDUCT OF BUSINESS BY XXXXXX AND PPCT. On and after the date
hereof and until the Effective Time, except as expressly permitted or required
by this Agreement or as otherwise expressly consented to by Speed Release in
writing, Xxxxxx and PPCT, respectively, will each:
(a) carry on its business in, and only in, the ordinary
course, in substantially the same manner as heretofore conducted, and use all
commercially reasonable efforts to preserve intact its present business
organization, maintain its properties in good operating condition and repair,
keep available the services of its present officers and significant employees,
and preserve its relationship with customers, suppliers and others having
business dealings with it, to the end that its goodwill and going business shall
be in all material respects unimpaired following the Closing;
(b) not prepay any accounts payable, delay payment of any
trade payables or other obligations, or make any other cash payments other than
in the ordinary course of business;
(c) maintain all of its tangible assets in good repair,
working order and operating condition subject only to ordinary wear and tear;
(d) use all reasonable efforts to keep in full force and
effect insurance comparable in amount and scope of coverage to insurance now
carried by it;
(e) maintain its books of account and records in the usual,
regular and ordinary manner consistent with past policies and practices and not
change such policies and practices;
(f) comply in all material respects with all Laws applicable
to its business;
(g) use all reasonable efforts to maintain its good standing
in its jurisdiction of incorporation and in the jurisdictions in which it is
qualified to do business as a foreign corporation and to maintain all
governmental approvals and consents necessary for, or otherwise material to, its
business;
(h) not merge or consolidate with, or agree to merge or
consolidate with, or purchase substantially all of the assets of, or otherwise
acquire, any business, business organization or division thereof, of any other
person;
(i) promptly advise Speed Release in writing of any event,
occurrence, fact, condition, change, development or effect that, individually or
in the aggregate, could, to its knowledge, reasonably be expected to have or
result in a Xxxxxx or PPCT Material Adverse Effect or could cause a breach of
this Section 5.1;
(j) perform in all material respects all of its obligations
under all Contracts relating to or affecting its business;
AGREEMENT - PAGE 34
(k) not declare, set aside, make or pay any dividend or other
distribution in respect of its capital stock or other equity interests or
otherwise purchase or redeem, directly or indirectly, any shares of its capital
stock or other equity interests;
(l) not issue or sell any shares of any class of its capital
stock or other equity interests, or any securities convertible into or
exchangeable for any such shares or other equity interests, or issue, sell,
grant or enter into any subscriptions, options, warrants, conversion or other
rights, agreements, commitments, arrangements or understandings of any kind,
contingently or otherwise, to purchase or otherwise acquire any such shares or
other equity interests or any securities convertible into or exchangeable for
any such shares or other equity interests;
(m) not incur any indebtedness for borrowed money, issue or
sell any debt securities or prepay any debt (including, without limitation, any
borrowings from or prepayments to any shareholder of Xxxxxx or member of PPCT or
other affiliate of Xxxxxx or PPCT), except for borrowings and prepayments (other
than to or from any shareholder of Xxxxxx or member of PPCT or other affiliate
of Xxxxxx or PPCT) in the ordinary course of business;
(n) not mortgage, pledge or otherwise subject to any Lien, any
of its real property or other properties or assets, tangible or intangible,
except in the ordinary course of business;
(o) not forgive, cancel, compromise, waive or release any
debts, claims or rights, except for debts of, or claims and rights against,
persons other than any shareholder, member or other affiliate that are forgiven,
canceled, compromised, waived or released in the ordinary course of business;
(p) not pay or commit to pay any bonus, other incentive
compensation, change in control or similar compensation to any officer,
director, employee, shareholder, member or affiliate or grant or commit to grant
to any officer, director, employee, shareholder, member or affiliate any other
increase in, or additional, compensation in any form;
(q) not enter into, institute, adopt or amend or commit to
enter into, institute, adopt or amend any employment, consulting, retention,
change-in-control, collective bargaining, bonus or other incentive compensation,
profit-sharing, health or other welfare, stock option or other equity, pension,
retirement, vacation, severance, deferred compensation or other employment,
compensation or benefit plan, policy, agreement, trust, fund or arrangement in
respect of or for the benefit of any officer, director, employee, shareholder,
member or affiliate;
(r) not amend either its articles of incorporation or articles
of organization, or its bylaws or operating agreement;
(s) not incur, assume, guarantee or otherwise become directly
or indirectly liable with respect to any liability or obligation in excess of
$10,000 in each case or $25,000 in the aggregate at any one time outstanding
(whether absolute, accrued, contingent or otherwise and whether direct or
indirect, or as guarantor or otherwise with respect to any liability or
obligation of any other person) other than agreements for purchases of goods or
services in the ordinary course of business;
AGREEMENT - PAGE 35
(t) not sell any assets with a value in excess of $10,000
in each case or $25,000 in the aggregate, other than inventory in the
ordinary course of business;
(u) not transfer or grant any rights under, or enter into any
settlement regarding the breach or infringement of any Intellectual Property, or
modify any existing rights with respect thereto;
(v) not make any capital expenditures or capital additions
or improvements in excess of an aggregate of $10,000;
(w) not institute, settle or agree to settle any
litigation, action or proceeding before any court or governmental body
involving amounts in excess of $10,000;
(x) not liquidate, dissolve or wind-up its affairs; or
(y) not enter into any transaction, Contract or commitment
other than in the ordinary course of business, or pay or agree to pay any legal,
accounting, brokerage or finder's fee, Taxes or other expenses in connection
with, or incur any severance pay obligations by reason of, this Agreement, the
other Transaction Agreements or the transactions contemplated hereby or thereby.
5.2 CONDUCT OF BUSINESS BY SPEED RELEASE. On and after the date
hereof and until the Effective Time, except as expressly permitted or required
by this Agreement or as otherwise expressly consented to by Xxxxxx in writing,
Speed Release will:
(a) carry on its business in, and only in, the ordinary
course, in substantially the same manner as heretofore conducted, and use all
commercially reasonable efforts to preserve intact its present business
organization, maintain its properties in good operating condition and repair,
keep available the services of its present officers and significant employees,
and preserve its relationship with customers, suppliers and others having
business dealings with it, to the end that its goodwill and going business shall
be in all material respects unimpaired following the Closing;
(b) not prepay any accounts payable, delay payment of any
trade payables or other obligations, or make any other cash payments other than
in the ordinary course of business;
(c) maintain all of its tangible assets in good repair,
working order and operating condition subject only to ordinary wear and tear;
(d) use all reasonable efforts to keep in full force and
effect insurance comparable in amount and scope of coverage to insurance now
carried by it;
(e) maintain its books of account and records in the usual,
regular and ordinary manner consistent with past policies and practices and not
change such policies and practices;
(f) comply in all material respects with all Laws
applicable to its business;
AGREEMENT - PAGE 36
(g) use all reasonable efforts to maintain its good standing
in its jurisdiction of incorporation and in the jurisdictions in which it is
qualified to do business as a foreign corporation and to maintain all
governmental approvals and consents necessary for, or otherwise material to, its
business;
(h) not merge or consolidate with, or agree to merge or
consolidate with, or purchase substantially all of the assets of, or otherwise
acquire, any business, business organization or division thereof, of any other
person;
(i) promptly advise Xxxxxx in writing of any event,
occurrence, fact, condition, change, development or effect that, individually or
in the aggregate, could, to its knowledge, reasonably be expected to have or
result in a Speed Release Material Adverse Effect or could cause a breach of
this Section 5.2;
(j) perform in all material respects all of its obligations
under all Contracts relating to or affecting its business;
(k) not declare, set aside, make or pay any dividend or other
distribution in respect of its capital stock or otherwise purchase or redeem,
directly or indirectly, any shares of its capital stock;
(l) not issue or sell any shares of any class of its capital
stock, or any securities convertible into or exchangeable for any such shares,
or issue, sell, grant or enter into any subscriptions, options, warrants,
conversion or other rights, agreements, commitments, arrangements or
understandings of any kind, contingently or otherwise, to purchase or otherwise
acquire any such shares or any securities convertible into or exchangeable for
any such shares;
(m) not incur any indebtedness for borrowed money, issue or
sell any debt securities or prepay any debt (including, without limitation, any
borrowings from or prepayments to any shareholder of Speed Release or other
affiliate of Speed Release), except for borrowings and prepayments (other than
to or from any shareholder of Speed Release or other affiliate of Speed Release)
in the ordinary course of business;
(n) not mortgage, pledge or otherwise subject to any Lien, any
of its real property or other properties or assets, tangible or intangible,
except in the ordinary course of business;
(o) not forgive, cancel, compromise, waive or release any
debts, claims or rights, except for debts of, or claims and rights against,
persons other than any shareholder or other affiliate that are forgiven,
canceled, compromised, waived or released in the ordinary course of business;
(p) not pay or commit to pay any bonus, other incentive
compensation, change in control or similar compensation to any officer,
director, employee, shareholder or affiliate or grant or commit to grant to any
officer, director, employee, shareholder or affiliate any other increase in, or
additional, compensation in any form;
AGREEMENT - PAGE 37
(q) not enter into, institute, adopt or amend or commit to
enter into, institute, adopt or amend any employment, consulting, retention,
change-in-control, collective bargaining, bonus or other incentive compensation,
profit-sharing, health or other welfare, stock option or other equity, pension,
retirement, vacation, severance, deferred compensation or other employment,
compensation or benefit plan, policy, agreement, trust, fund or arrangement in
respect of or for the benefit of any officer, director, employee, shareholder or
affiliate;
(r) not amend either its certificate of incorporation or its
bylaws;
(s) not incur, assume, guarantee or otherwise become directly
or indirectly liable with respect to any liability or obligation in excess of
$10,000 in each case or $25,000 in the aggregate at any one time outstanding
(whether absolute, accrued, contingent or otherwise and whether direct or
indirect, or as guarantor or otherwise with respect to any liability or
obligation of any other person) other than agreements for purchases of goods or
services in the ordinary course of business;
(t) not sell any assets with a value in excess of $10,000 in
each case or $25,000 in the aggregate, other than inventory in the ordinary
course of business;
(u) not transfer or grant any rights under, or enter into any
settlement regarding the breach or infringement of any Intellectual Property, or
modify any existing rights with respect thereto;
(v) not make any capital expenditures or capital additions or
improvements in excess of an aggregate of $10,000;
(w) not institute, settle or agree to settle any litigation,
action or proceeding before any court or governmental body involving amounts in
excess of $10,000;
(x) not liquidate, dissolve or wind-up its affairs; or
(y) not enter into any transaction, Contract or commitment
other than in the ordinary course of business, or pay or agree to pay any legal,
accounting, brokerage or finder's fee, the Taxes or other expenses in connection
with, or incur any severance pay obligations by reason of, this Agreement, the
other Transaction Agreements or the transactions contemplated hereby or thereby.
5.3 NO SOLICITATION. From the date hereof until the earlier of the
Closing or the termination of this Agreement in accordance with the terms
hereof, Xxxxxx and PPCT agree (a) that they shall not, and Xxxxxx and PPCT shall
direct and use their best efforts to cause their officers, directors, employees,
agents and representatives (including, without limitation, any investment
banker, attorney or accountant retained by it) not to, initiate, solicit or
encourage, directly or indirectly, any inquiries or the making or implementation
of any proposal or offer (including, without limitation, any proposal or offer
to its shareholders) with respect to a merger, acquisition, consolidation or
similar transaction involving, or any purchase of all or any significant portion
of the assets or equity securities of, Xxxxxx or PPCT (any such proposal or
offer being hereinafter referred to as an "Acquisition Proposal") or engage in
any negotiations concerning, or provide any confidential information or data to,
or have any discussions with, any
AGREEMENT - PAGE 38
person relating to an Acquisition Proposal, or otherwise facilitate any
effort or attempt to make or implement an Acquisition Proposal; (b) that they
will immediately cease and cause to be terminated any existing activities,
discussions or negotiations with any parties conducted heretofore with
respect to any of the foregoing and Xxxxxx and PPCT will take the necessary
steps to inform the individuals or entities referred to above of the
obligations undertaken in this Section 5.3; and (c) that they will notify
Speed Release immediately of the identity of the potential acquiror and the
terms of such person's or entity's proposal if any such inquiries or
proposals are received by, any such information is requested from, or any
such negotiations or discussions are sought to be initiated or continued
with, it; provided, however, that nothing contained in this Section 5.3 shall
prohibit the Board of Directors of Xxxxxx and Managing Member of PPCT from
(i) furnishing information to or entering into discussions or negotiations
with any person or entity that makes an unsolicited written proposal to
acquire Xxxxxx or PPCT pursuant to a merger, consolidation, share exchange,
purchase of a substantial portion of the assets, business combination or
other similar transaction, if, and only to the extent that, (A) the Board of
Directors of Xxxxxx and Managing Member of PPCT determines in good faith that
such action is required for the Board of Directors and Managing Member of
PPCT to comply with their fiduciary duties to shareholders, (B) prior to
furnishing such information to, or entering into discussions or negotiations
with, such person or entity, Xxxxxx and PPCT provide written notice to Speed
Release to the effect that it is furnishing information to, or entering into
discussions or negotiations with, such person or entity, and (C) subject to
any confidentiality agreement with such person or entity (which Xxxxxx and
PPCT determined in good faith was required to be executed in order for the
Board of Directors or Managing Member, respectively, to comply with their
fiduciary duties to shareholders), Xxxxxx and PPCT keep Speed Release
informed of the status of any such discussions or negotiations and (ii) to
the extent applicable, complying with Rule 14e-2 promulgated under the
Exchange Act with regard to an Acquisition Proposal. Nothing in this Section
5.3 shall (x) permit Xxxxxx and PPCT to terminate this Agreement (except as
specifically provided in Article VII during the term of this Agreement (it
being agreed that during the term of this Agreement, Xxxxxx and PPCT shall
not enter into any agreement with any person that provides for, or in any way
facilitates, an Acquisition Proposal (other than a confidentiality agreement
in customary form)), or (z) affect any other obligation of any party under
this Agreement.
5.4 ACCESS AND INFORMATION; COOPERATION FOR SEC FILINGS BY SPEED
RELEASE; SCHEDULES.
(a) From the date hereof until the earlier of the Closing or
the termination of this Agreement in accordance with the terms hereof, Xxxxxx
and PPCT, on the one hand, and Speed Release, on the other hand, will give the
other and such other party's accountants, counsel, consultants, employees and
agents, access at all reasonable times to, and furnish them with all documents,
records, work papers and information with respect to, all of the assets,
properties, books, contracts, commitments, reports and records of such party, as
the other party shall from time to time reasonably request. In addition, each of
Xxxxxx and PPCT, on the one hand, and Speed Release, on the other hand, will
permit the other party and such other party's accountants, counsel, consultants,
employees and agents, reasonable access to personnel of such party and persons
acting on such party's behalf as may be reasonably requested. Xxxxxx and PPCT
will keep Speed Release reasonably informed as to the affairs of Xxxxxx and PPCT
and their
AGREEMENT - PAGE 39
business, and Speed Release will keep Xxxxxx and PPCT reasonably informed as
to the affairs of Speed Release and its business.
(b) Xxxxxx and PPCT will use reasonable good faith efforts to
cause the accountants of Xxxxxx and PPCT to cooperate with Speed Release, and
deliver to Speed Release such written consents as it shall reasonably request,
in connection with any required filings with the Commission under the Securities
Act and the Exchange Act.
5.5 PUBLIC ANNOUNCEMENTS. Except as required by applicable Law,
none of Xxxxxx, PPCT or Speed Release shall, nor shall any person acting on
behalf of any of them, make any public announcement in respect of this Agreement
or the transactions contemplated hereby without the prior written consent of
Speed Release and Xxxxxx.
5.6 VOTE OR CONSENT ON THE MERGER; OTHER ACTIONS.
(a) Xxxxxx agrees to take all action necessary in accordance
with applicable Law and Xxxxxx'x articles of incorporation and bylaws to convene
or cause to be convened a meeting of the shareholders of Xxxxxx to consider and
vote upon, or to otherwise take action by shareholder consent to approve, this
Agreement and the Merger and the other transactions contemplated hereby, as
promptly as practicable. Xxxxxx, through its Board of Directors, agrees to
recommend to the shareholders of Xxxxxx approval of this Agreement and the
Merger and the other transactions contemplated hereby.
(b) Speed Release agrees to take all action necessary in
accordance with applicable Law and Speed Release's certificate of incorporation
and bylaws to convene or cause to be convened a meeting of the stockholders of
Speed Release to consider and vote upon, or to otherwise take action by
stockholder consent to approve, this Agreement, the Merger, the Purchase and the
other transactions contemplated hereby, as promptly as practicable. Speed
Release, through its Board of Directors, agrees to recommend to the stockholders
of Speed Release approval of this Agreement, the Merger, the Purchase and the
other transactions contemplated hereby.
5.7 FURTHER ACTIONS.
(a) Each of the parties hereto agrees to use and to cause all
persons acting on its behalf to use all reasonable good faith efforts to take
all actions and to do all things necessary, proper or advisable to consummate
the transactions contemplated hereby by the Closing Date.
(b) Each of the parties hereto, as promptly as practicable,
will file or supply, or cause to be filed or supplied, all applications,
notifications and information required to be filed or supplied by it pursuant to
applicable Law in connection with this Agreement and the other Transaction
Agreements and the consummation of the transactions contemplated hereby and
thereby.
(c) Each of the parties hereto, as promptly as practicable,
will use all reasonable efforts to obtain, or cause to be obtained, all consents
(including, without limitation, all governmental approvals and any consent
required under any Contract) necessary to be obtained by it in order to
consummate the transactions contemplated by this Agreement.
AGREEMENT - PAGE 40
(d) Each of the parties hereto will, and will cause
all persons acting on its or their behalf to, coordinate and cooperate with
the other parties hereto in exchanging such information and supplying such
assistance as may be reasonably requested by the other parties hereto in
connection with the filings and other actions contemplated hereby.
(e) At all times prior to the Closing, Xxxxxx and PPCT
shall promptly notify Speed Release in writing of any fact, condition, event
or occurrence (including any fact that would cause the representations and
warranties of Xxxxxx or PPCT set forth in this Agreement to be incorrect in
any material respect), and the Owners shall promptly notify Speed Release in
writing of any fact, condition, event or occurrence that would cause their
respective representations and warranties contained in Section 4.3 above to
be incorrect in any material respect, that will or may result in the failure
of any of the conditions contained in Sections 6.1 and 6.2 to be satisfied,
promptly upon becoming aware of the same. At all times prior to the Closing,
Speed Release shall promptly notify Xxxxxx and PPCT in writing of any fact,
condition, event or occurrence (including any fact that would cause any of
the representations and warranties of Speed Release set forth in this
Agreement to be incorrect in any material respect) that will or may result in
the failure of any of the conditions contained in Sections 6.1. and 6.3 to be
satisfied, promptly upon becoming aware of the same. Additionally, in the
event any party, whether during the course of its due diligence review or
otherwise, discovers prior to the Closing that any representation and
warranty made by any other party is incorrect in any material respect, the
discovering party shall give such other party prompt written notice of the
inaccuracy, which notice shall describe the inaccuracy in reasonable detail.
(f) Any and all obligations imposed upon an Owner by
this Section 5.7 shall be solely with respect to their representations and
warranties contained in Section 4.3 above and the provisions of Sections 1.2
and 1.4 above.
5.8 FURTHER ASSURANCES. Following the Closing, each of the parties
hereto shall, and shall cause all persons acting on its or their behalf to, from
time to time, execute and deliver such additional instruments, documents,
conveyances or assurances and take such other actions as shall be necessary, or
otherwise reasonably requested by any of the other parties hereto, to confirm
and assure the rights and obligations provided for in this Agreement and in the
other Transaction Agreements and render effective the consummation of the
transactions contemplated hereby and thereby. Any and all obligations imposed
upon an Owner by this Section 5.8 shall be solely with respect to their
representations and warranties contained in Section 4.3 above and the provisions
of Sections 1.2 and 1.4 above.
5.9 EMPLOYEE BENEFITS. From and after the Closing, subject to
applicable law, the Surviving Corporation will honor in accordance with their
terms, all Xxxxxx and PPCT Plans; provided, however, that nothing herein shall
preclude any change effected on a prospective basis in any Xxxxxx and PPCT Plan
that is permitted pursuant to the following sentence of this Section 5.9. For a
period of not less than six months following the Closing, subject to applicable
law, the Surviving Corporation will provide benefits to Xxxxxx and PPCT
employees who become employees of the Surviving Corporation which will, in the
aggregate, be no less favorable than those provided by Xxxxxx and PPCT to its
employees immediately prior to the Closing. Promptly following the Closing, the
board of directors of the Surviving Corporation will cause stock options for the
purchase of 1,000,000 shares of the common stock of the
AGREEMENT - PAGE 41
Surviving Corporation to be granted to Xxx Xxxxxx and stock options for the
purchase of 500,000 shares of the common stock of the Surviving Corporation
to be granted to Xxxxx Xxxxxxxx (and/or certain designees of Xxxxx Xxxxxxxx).
In addition, the board of directors of the Surviving Corporation will adopt a
stock option plan and 1,100,000 shares of the common stock of the Surviving
Corporation shall be reserved for issuance upon the exercise of options
issued under such plan for the benefit of officers, directors and employees
of the Surviving Corporation. The option price for the stock options to be
issued to Xxx Xxxxxx and Xxxxx Xxxxxxxx (and/or certain designees of Xxxxx
Xxxxxxxx) as provided in the preceding sentence shall be the price at which
not less than 1,000,000 shares of Speed Release Common Stock are sold
pursuant to the offering pursuant to the amended registration statement or,
if no such offering shall be consummated, then the option price shall be the
fair market value as determined by the board of directors of the Surviving
Corporation, and such stock options shall be immediately exercisable in full.
5.10 REGISTRATION STATEMENT MATTERS.
(a) The Surviving Corporation shall, as soon as
practicable after Closing, file with the Securities and Exchange Commission
an amendment to the registration statement evidencing the transaction
contemplated in this Agreement and offering to the public a total of
3,000,000 shares of the common stock of the Surviving Corporation at a price
of approximately $2.50 per share or such other amount as the parties may
agree;
(b) The cost of the preparation of the amended
registration statement and any further amendments thereto and the
transactions contemplated therein shall be borne by the Surviving
Corporation; however, prior to the Merger and the Purchase, Xxxxx Xxxxxxxx,
by and through Speed Release, may incur costs associated with the amended
registration statement and the transactions contemplated therein, and Speed
Release, Xxxxxx and PPCT agree that (i) Xxxxx Xxxxxxxx, by and through Speed
Release shall not pay nor be responsible for paying any costs associated with
audits of the financial affairs of Xxxxxx and PPCT and (ii) Xxxxx Xxxxxxxx
shall be reimbursed from the proceeds of the offering pursuant to the
registration statement for any and all costs associated with the registration
statement or any amendment thereto and the transactions contemplated therein,
including any accounting or legal fees of Speed Release that are paid by
Xxxxx Xxxxxxxx in order that Speed Release shall be in compliance with
Section 4.2.6; provided, however, that the Surviving Corporation shall have
no obligation to reimburse Xxxxx Xxxxxxxx for such costs (i) except from
proceeds from the offering pursuant to the amended registration statement
provided the gross proceeds to the Surviving Corporation from the offering
shall be not less than $2,500,000 and (ii) in an aggregate amount not to
exceed $150,000.
5.11 FINDER'S AGREEMENT. Following Closing, Xxxxx Xxxxxxxx agrees
to use his best efforts to locate lenders to the Surviving Corporation for a
loan in the amount of $100,000. The loan shall be upon terms substantially
identical to those contained in the Amended and Restated Promissory Note made by
Xxxxxx in favor of Xxxxx Xxxxxxxx referred to hereinafter. If no lender shall
have agreed to loan the Surviving Corporation $100,000 within 30 days following
the consummation of the Closing, then Xxxxx Xxxxxxxx shall immediately lend an
additional $100,000 less any amounts advanced by other persons arranged by
Xxxxx Xxxxxxxx pursuant to this Section 5.11 to the Surviving Corporation
pursuant to an additional draw by the Surviving Corporation of such
additional $100,000 less any amounts advanced by other persons arranged
AGREEMENT - PAGE 42
by Xxxxx Xxxxxxxx pursuant to this Section 5.11 under the Amended and
Restated Promissory Note made by Xxxxxx in favor of Xxxxx Xxxxxxxx.
5.12 COLLATERAL. The parties agree that the bank loan of Speed
Release disclosed on SCHEDULE 4.2.6(a) AND (b) (the "Speed Release Bank Loan")
shall be immediately paid in full by the Surviving Corporation from the proceeds
of the offering pursuant to the amended registration statement provided that the
gross proceeds to the Surviving Corporation shall be not less than $2,500,000
and that the certificate of deposit pledged by Xxxxx Xxxxxxxx to secure such
bank loan shall thereupon be fully released. Xxxxx Xxxxxxxx agrees that until
consummation of the offering pursuant to the amended registration statement
provided the gross proceeds to the Surviving Corporation from the offering shall
be not less than $2,500,000, or as may be agreed by the Surviving Corporation
and Xxxxx Xxxxxxxx, the certificate of deposit pledged by him to secure such
bank loan shall continue to be pledged by him to secure such bank loan. If the
offering pursuant to the amended registration statement shall not close or does
not raise gross proceeds to the Surviving Corporation of at least $2,500,000,
the Surviving Corporation shall be unable to pay the Speed Release Bank Loan
when due and the bank shall foreclose upon the certificate of deposit, Xxxxx
Xxxxxxxx may at his sole option convert the amount of the certificate of deposit
foreclosed upon by the bank (the "Subrogated Claim") into that number of shares
of common stock of the Surviving Corporation as shall equal 9% of the common
stock of the Surviving Corporation, assuming the Subrogated Claim is in the
amount of $300,000. If the Subrogated Claim shall be less than $300,000, then a
proportionate number of shares of common stock of the Surviving Corporation
shall be issued upon conversion of the Subrogated Claim based upon the
percentage obtained by dividing the amount of the Subrogated Claim by $300,000.
(For example, if the Subrogated Claim is for $200,000, then the number of shares
issued upon conversion shall be equal to 6% (2/3 x 9%) of the outstanding common
stock of the Surviving Corporation.). The Surviving Corporation acknowledges
that if the bank forecloses upon the certificate of deposit, the Surviving
Corporation shall be obligated to pay Xxxxx Xxxxxxxx the Subrogated Claim. Xxxxx
Xxxxxxxx agrees that he will not commence any legal proceeding or self help
remedies whatsoever, including without limitation, any bankruptcy,
reorganization or insolvency proceeding against the Surviving Corporation for
the failure of the Surviving Corporation to pay the Subrogated Claim, Xxxxx
Xxxxxxxx'x sole recourse being to exercise his right to convert (but he shall
not be required to convert) such indebtedness into common stock of the Surviving
Corporation as hereinbefore provided.
5.13 EASTERN NATIONAL BANK AND SOUTH TRUST BANK. Xxxxxx, PPCT and
the Owners agree to use their best efforts to immediately obtain the consent of
Eastern National Bank and South Trust Bank to the terms and provisions of this
Agreement and the transactions contemplated hereby. Speed Release agrees that
such consents shall not be a condition to Closing and that the failure of
Xxxxxx, PPCT or the Owners to obtain such consents, either before or after
Closing, shall not constitute a breach of a representation or warranty or a
failure to perform an obligation required to be performed hereunder by Xxxxxx,
PPCT or the Owners; provided that if Xxxxxx, PPCT or the Owners fail to obtain
the consent of either Eastern National Bank ("Eastern") or South Trust Bank
("South Trust") to the terms and provisions of this Agreement and the
transactions contemplated hereby, and prior to or within 30 days of Closing, (i)
either Eastern or South Trust shall initiate any request or demand for payment
(whether or not the date of payment is within 30 days of Closing), (ii) Eastern
or South Trust shall accelerate the indebtedness of Xxxxxx or PPCT or the
Surviving Corporation as the successor obligor, (iii) Eastern or South Trust
shall institute or Xxxxxx or PPCT or the Surviving Corporation as the successor
obligor shall institute, any case, proceeding or other action under any law
relating to
AGREEMENT - PAGE 43
bankruptcy, insolvency or reorganization seeking to have an order for relief
entered with respect to Xxxxxx, PPCT or the Surviving Corporation, seeking to
adjudicate any of them a bankrupt or insolvent, or seeking reorganization,
arrangement or composition or other relief with respect to any of them or
their debts, or seeking appointment of a receiver, trustee or custodian or
some other official for any of them or any substantial part of their assets,
(iv) Xxxxxx or PPCT or the Surviving Corporation as the successor obligor
shall make a general assignment for the benefit of their creditors, (v)
Xxxxxx, PPCT or the Surviving Corporation is the debtor named in any other
case, proceeding or action described in clause (iii) or takes any action in
furtherance of or indicating its consent to or approval of any such other
case, proceeding or action, or (vi) any guarantee securing the indebtedness
to Eastern National Bank or South Trust Bank shall cease to be in full force
and effect, then Xxxxx Xxxxxxxx shall not be required to loan up to an
additional $100,000 to the Surviving Corporation as required by Section 5.11
above. The obligation of Xxxxxx set forth in this Section 5.13 shall be
assumed by and be imposed upon the Surviving Corporation upon the Closing of
the transactions contemplated by this Agreement.
ARTICLE VI.
CONDITIONS PRECEDENT
6.1 CONDITIONS TO OBLIGATIONS OF EACH PARTY. The respective
obligations of the parties to consummate the transactions contemplated hereby
shall be subject to the fulfillment on or prior to the Closing Date of the
following condition:
6.1.1 NO INJUNCTION, ETC. Consummation of the transactions
contemplated hereby shall not have been restrained, enjoined or otherwise
prohibited by any applicable Law, including any order, injunction, decree or
judgment of any court or governmental authority. No court or governmental
authority shall have determined any applicable Law to make illegal the
consummation of the transactions contemplated hereby or by the other Transaction
Agreements, and no proceedings with respect to the application of any such Law
to such effect shall be pending or threatened.
6.2 CONDITIONS TO OBLIGATION OF SPEED RELEASE. The obligation of
Speed Release to consummate the transactions contemplated hereby shall be
subject to the fulfillment (or waiver in writing by Speed Release), on or prior
to the Closing Date, of the following additional conditions, which Xxxxxx and
PPCT agree to use their good faith efforts to cause to be fulfilled:
6.2.1 REPRESENTATIONS; PERFORMANCE. The representations and
warranties of Xxxxxx, PPCT and the Owners contained in this Agreement and the
Exhibits and Schedules hereto (i) shall be true and correct in all material
respects at and as of the date hereof, and (ii) shall be repeated and shall be
true and correct in all material respects on and as of the Closing Date with the
same effect as though made on and as of the Closing Date. Xxxxxx, PPCT and the
Owners shall have duly performed and complied in all material respects with all
agreements and conditions required by this Agreement to be performed or complied
with by each of them prior to or on the Closing Date. Each of Xxxxxx, PPCT and
the Owners shall have delivered to Speed Release a certificate, dated the
Closing Date and signed by their duly authorized officer, to the foregoing
effect.
6.2.2 CONSENTS. Each of Xxxxxx and PPCT shall have obtained and
shall have delivered to Speed Release copies of (i) all governmental approvals
required to be obtained by Xxxxxx or PPCT in connection with the execution and
delivery of this Agreement and the other
AGREEMENT - PAGE 44
Transaction Agreements and the consummation of the transactions contemplated
hereby and thereby, and (ii) all consents (including, without limitation, all
consents required under any Contract) necessary to be obtained by Xxxxxx or
PPCT or the Owners in order to consummate the Merger and the Purchase
pursuant to this Agreement. Notwithstanding the first sentence of this
Section 6.2.2, the parties hereto agree that receipt of a consent from each
of Eastern National Bank and South Trust Bank as described in Section 5.13
above shall not be a condition to Closing.
6.2.3 NO MATERIAL ADVERSE EFFECT. No event, occurrence, fact,
condition, change, development or effect shall have occurred, exist or come to
exist since the Balance Sheet Date that, individually or in the aggregate, has
constituted or resulted in, or could reasonably be expected to constitute or
result in, a Xxxxxx or PPCT Material Adverse Effect.
6.2.4 INVESTMENT LETTERS. Each shareholder of Xxxxxx and each member
of PPCT shall have delivered to Speed Release an executed Investment Letter in
the form attached hereto as EXHIBIT B.
6.2.5 SIMULTANEOUS CLOSING. The closing of the Merger shall be
conditioned upon the simultaneous closing of the Purchase, and the closing of
the Purchase shall be conditioned upon the simultaneous closing of the Merger.
6.2.6 DISCLOSURE DOCUMENTS. Xxxxxx, PPCT and the Owners shall have
delivered to Speed Release all documents required for inclusion in the amended
registration statement.
6.2.7 CONDITION TO PURCHASE. The closing of the Purchase shall be
subject to satisfaction of all conditions to the Merger.
6.3 CONDITIONS TO OBLIGATIONS OF XXXXXX AND PPCT. The obligations
of Xxxxxx, PPCT and the Owners to consummate the transactions contemplated
hereby shall be subject to the fulfillment (or waiver in writing by Xxxxxx or
PPCT, as the case may be), on or prior to the Closing Date, of the following
additional conditions, which Speed Release agrees to use its good faith efforts
to cause to be fulfilled:
6.3.1 REPRESENTATIONS; PERFORMANCE. The representations and
warranties of Speed Release contained in this Agreement and the Exhibits and
Schedules hereto (i) shall be true and correct in all material respects at and
as of the date hereof, and (ii) shall be repeated and shall be true and correct
in all material respects on and as of the Closing Date with the same effect as
though made at and as of the Closing Date. Speed Release shall have duly
performed and complied in all material respects with all agreements and
conditions required by this Agreement to be performed or complied with by it
prior to or on the Closing Date. Speed Release shall have delivered to Xxxxxx
and PPCT a certificate, dated the Closing Date and signed by its duly authorized
officer, to the foregoing effect.
6.3.2 CONSENTS. Speed Release shall have obtained and shall have
delivered to Xxxxxx and PPCT copies of (i) all governmental approvals required
to be obtained by Speed Release in connection with the execution and delivery of
this Agreement and the other Transaction Agreements and the consummation of the
transactions contemplated hereby and thereby, and
AGREEMENT - PAGE 45
(ii) all consents necessary to be obtained by it in order to consummate the
Merger and the Purchase under to this Agreement.
6.3.3 NO MATERIAL ADVERSE EFFECT. No event, occurrence, fact,
condition, change, development or effect shall have occurred, exist or come to
exist since the Balance Sheet Date that, individually or in the aggregate, has
constituted or resulted in, or could reasonably be expected to constitute or
result in, a Speed Release Material Adverse Effect.
6.3.4 BEDOWITZ INDEBTEDNESS. Any and all sums owed by Speed Release
to Xxxxx Xxxxxxxx (excluding any amounts that are to be paid by the Surviving
Corporation as contemplated by Section 5.10(b) above) shall have been converted
into Speed Release Common Stock; provided that if any shares of Speed Release
Common Stock are issued to Xxxxx Xxxxxxxx in connection with the conversion of
sums owed to Xxxxx Xxxxxxxx as a result of which at the Effective Time the
number of the Xxxxxx Merger Shares and PPCT Interests does not equal 90% of the
outstanding Speed Release Common Stock at the Effective Time, then the number of
shares of Speed Release Common Stock constituting the Xxxxxx Merger Shares and
PPCT Interests shall be increased by that amount necessary to cause the Xxxxxx
Merger Shares and PPCT Interests to equal 90% of the outstanding Speed Release
Common Stock at the Effective Time.
6.3.5 BEDOWITZ AGREEMENTS. Xxxxx Xxxxxxxx shall have terminated
without obligation or liability to Speed Release any employment agreement or any
option, warrant or other right, agreement, commitment, arrangement or
understanding of any kind obligating Speed Release to issue or sell any shares
of Speed Release Common Stock, or any other equity security of Speed Release, to
Xxxxx Xxxxxxxx.
6.3.6 AMENDMENT; SPLIT. Speed Release shall have filed an amendment
to its Certificate of Incorporation increasing its authorized shares of the
Speed Release Common Stock to 50,000,000 and effecting a 1-for-10 reverse split
of the Speed Release Common Stock.
ARTICLE VII.
TERMINATION
7.1 TERMINATION. This Agreement may be terminated at any time
prior to the Effective Time:
(a) by the written agreement of Speed Release and
Xxxxxx;
(b) by either Xxxxxx or Speed Release, by written
notice to the other party hereto on or after 5:00 p.m., Central time,
December 15, 2000, if the Closing shall not have occurred by such date
(unless the failure of the Closing to occur shall be due to any breach of
this Agreement by the party seeking to terminate), unless such date shall be
extended by the mutual written consent of Xxxxxx and Speed Release;
(c) by Xxxxxx, if there has been a breach on the part of
Speed Release in the representations, warranties or covenants of Speed
Release set forth herein, or a failure on the part of Speed Release to
perform its obligations hereunder; PROVIDED that Xxxxxx shall have performed
and complied with, in all material respects, all agreements and covenants
required by
AGREEMENT - PAGE 46
this Agreement to have been performed and complied with by Xxxxxx prior to
such time, or any other events or circumstances shall have occurred such
that, in any such case, any of the conditions to the Closing set forth in
Sections 6.1 or 6.3 could not be satisfied on or prior to the termination
date contemplated by Section 7.1(b) hereof;
(d) by Speed Release, if there has been a breach on
the part of Xxxxxx, PPCT or the Owners in the representations, warranties or
covenants of Xxxxxx, PPCT or the Owners set forth herein or any failure on
the part of Xxxxxx or PPCT or the Owners to perform their respective
obligations hereunder; PROVIDED that Speed Release shall have performed and
complied with, in all material respects, all agreements and covenants
required by this Agreement to have been performed or complied with by Speed
Release prior to such time, or any other events or circumstances shall have
occurred such that, in any case, any of the conditions to the Closing set
forth in Sections 6.1 or 6.2 could not be satisfied on or prior to the
termination date contemplated by Section 7.1(b) hereof; or
7.2 EFFECT OF TERMINATION.
(a) (i) In the event that Xxxxxx, PPCT and the
Owners fail to consummate the Merger and the Purchase and the transactions
contemplated hereby and all the conditions to Closing in Sections 6.1 and 6.3
have been satisfied, then Xxxxxx shall pay to Speed Release as liquidated
damages, and not as a penalty, that amount in cash equal to the costs
incurred by Speed Release and its affiliates with regard to the transactions
contemplated hereby and any costs incurred in connection with the amendment
to the registration statement (including but not limited to fees and
disbursements of counsel, fees and expenses of investment bankers,
accountants and lenders, and printing costs) (collectively, the "Xxxxxx and
PPCT Termination Fee"). Speed Release agrees to accept and take such cash
payment as its full damages and relief under this Agreement. PPCT agrees to
be jointly and severally liable to Speed Release for the payment of the
Xxxxxx and PPCT Termination Fee. The parties agree that Speed Release's
actual damages, in such an event, would be difficult to ascertain, and the
parties therefore agree that such amount is, as to each of them, reasonable
as liquidated damages.
(ii) In the event that Speed Release fail to
consummate the Merger, the Purchase and the transactions contemplated hereby
and all the conditions to Closing in Sections 6.1 and 6.2 have been
satisfied, then Speed Release shall pay to Xxxxxx (for the benefit of Xxxxxx
and PPCT) as liquidated damages, and not as a penalty, that amount in cash
equal to the costs incurred by Xxxxxx and PPCT and its affiliates with regard
to the transactions contemplated hereby (including but not limited to fees
and disbursements of counsel and fees and expenses of accountants and
lenders) (collectively, the "Speed Release Termination Fee"). Xxxxxx and PPCT
agree to accept and take such cash payment as its full damages and relief
under this Agreement. The parties agree that Xxxxxx'x and PPCT's actual
damages, in such an event, would be difficult to ascertain, and the parties
therefore agree that such amount is, as to each of them, reasonable as
liquidated damages.
(b) In the event of the termination of this Agreement
pursuant to the provisions of Section 7.1, this Agreement shall become void
and have no effect and all obligations of the parties hereto shall terminate,
except the obligations of the parties pursuant to this Section 7.2 and except
for the provisions of Sections 8.2 and 8.5.
AGREEMENT - PAGE 47
(c) At any time prior to the Closing, Xxxxxx, PPCT or Speed
Release, by action taken by its Board of Directors or Managers, as applicable,
or the Owners, may, to the extent legally allowed, (a) extend the time for the
performance of any of the obligations or other acts of the other parties to this
Agreement, (b) waive any inaccuracies in the representations and warranties made
to such party contained in this Agreement or in any document delivered pursuant
hereto and (c) waive compliance with any of the agreements or conditions for the
benefit of such party contained herein. Any agreement on the part of a party
hereto to any such extension or waiver shall be valid only if set forth in an
instrument in writing signed on behalf of such party.
ARTICLE VIII.
MISCELLANEOUS
8.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES, ETC. The
provisions of this Agreement shall survive the consummation of the Merger and
the Purchase contemplated hereby. No investigation by the parties hereto made
heretofore or hereafter shall affect the representations and warranties of the
parties that are contained in this Agreement, and each representation and
warranty shall survive such investigation and the consummation of the
transactions contemplated hereby for a period of twenty-four (24) months, other
than representations and warranties set forth in Sections 4.1.19, 4.1.21, 4.2.19
and 4.2.21 hereof, which shall survive indefinitely, and the representations and
warranties set forth in Sections 4.1.7 and 4.2.7, which shall survive for six
(6) years after the Closing.
8.2 EXPENSES. Except as otherwise provided herein, Xxxxxx and
PPCT, on the one hand, and Speed Release, on the other hand, shall bear their
respective expenses, costs and fees (including attorneys' and auditors' fees) in
connection with the transactions contemplated hereby, including the preparation,
execution and delivery of this Agreement and compliance herewith, whether or not
the transactions contemplated hereby shall be consummated.
8.3 SEVERABILITY. If any provision of this Agreement, including
any phrase, sentence, clause, section or subsection is inoperative or
unenforceable for any reason, such circumstances shall not have the effect of
rendering the provision in question inoperative or unenforceable in any other
case or circumstance, or of rendering any other provision or provisions herein
contained invalid, inoperative, or unenforceable to any extent whatsoever.
8.4 NOTICES. All notices, requests, demands, waivers and other
communications required or permitted to be given under this Agreement shall be
in writing and shall be deemed to have been duly given if (a) delivered
personally, (b) mailed by first-class, registered or certified mail, return
receipt requested, postage prepaid, or (c) sent by next-day or overnight mail or
delivery or (d) sent by telecopy or telegram:
(i) if to Xxxxxx, PPCT or Xxxxxx Xxxxxx, at:
Xxxxxx Corporation
0000 Xxxx 00xx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Telecopy: _____________
Attention: Xxxxxx X. Xxxxxx
AGREEMENT - PAGE 48
with copies to:
Xxxxxxx & Associates
000 Xxxxxxx Xxxx., Xxxxx 0X
Xxx Xxxxx, Xxxxxxxx 00000
Telecopy: 734.663.8514
Attention: Xxxxx Xxxxxxx
(ii) if to Xxxxxx X'Xxxxxxx, at:
000 Xxxxxxxxx Xxxx
Xxx Xxxxxx, Xxxxxxxxxxx 00000-0000
Telecopy:______________
with copies to:
Xxxxxxx & Associates
000 Xxxxxxx Xxxx., Xxxxx 0X
Xxx Xxxxx, Xxxxxxxx 00000
Telecopy: 734.663.8514
Attention: Xxxxx Xxxxxxx
(iii) if to Holster, LLC, at:
Holster, LLC
0000 Xxxxxxxx Xxxxxx, #000
Xxxxxxxx, Xxxxxxx 00000
Telecopy:____________________
Attention: Xxxx X. Xxxxxxx
with copies to:
Xxxxxxx & Associates
000 Xxxxxxx Xxxx., Xxxxx 0X
Xxx Xxxxx, Xxxxxxxx 00000
Telecopy: 734.663.8514
Attention: Xxxxx Xxxxxxx
(iv) if to Speed Release, at:
Speed Release Lock Company
0000 Xxxxxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Telecopy: ______________
Attention: Xxxxx Xxxxxxxx
with copies to:
Xxxxx & Xxxxxx LLP
AGREEMENT - PAGE 49
0000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Telecopy: 214.741.7139
Attn: Xxxx Held
or, in each case, at such other address as may be specified in writing to the
other parties hereto.
All such notices, requests, demands, waivers and other communications
shall be deemed to have been received (w) if by personal delivery, on the day
after such delivery, (x) if by certified or registered mail, on the fifth
business day after the mailing thereof, (y) if by next-day or overnight mail or
delivery, on the day delivered, (z) if by telecopy or telegram, on the next day
following the day on which such telecopy or telegram was sent, provided that a
copy is also sent by certified or registered mail.
8.5 MISCELLANEOUS.
8.5.1 HEADINGS. The headings contained in this Agreement are for
purposes of convenience only and shall not affect the meaning or interpretation
of this Agreement.
8.5.2 ENTIRE AGREEMENT. This Agreement (including the Schedules
hereto), the other Transaction Agreements (when executed and delivered) and the
representations, warranties, agreements and covenants contained herein and
therein constitute the entire agreement and supersede all prior agreements,
understandings, representations, warranties, covenants and discussions, both
written and oral, between the parties with respect to the subject matter hereof,
including without limitation that certain letter of intent dated June 29, 2000,
between the parties to this Agreement.
8.5.3 COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which shall be deemed an original and all of which shall
together constitute one and the same instrument.
8.5.4 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Texas (regardless of the
laws that might otherwise govern under applicable principles of conflicts of
law).
8.5.5 ARBITRATION. Except to the extent provided elsewhere in this
Agreement, any controversy of any nature whatsoever, including but not limited
to tort claims, statutory claims or contract disputes, between the parties to
this Agreement (including their directors, officers, executives, agents,
successors, assigns, heirs, executors and beneficiaries) relating to the
formation, execution, interpretation, breach or enforcement of this Agreement,
or relating to any other matter arising from the transactions contemplated
herein, shall be submitted to arbitration before the American Arbitration
Association ("AAA"), in accordance with their rules then in effect and the
substantive law of the State of Texas and the United States. The arbitration
shall be held in Miami, Florida. The parties to this Agreement shall appoint one
person as an arbitrator to hear and determine such disputes, and if they should
be unable to agree, then Xxxxxx, PPCT and the Owners, on the one hand, and Speed
Release on the other hand, shall each appoint an arbitrator, and the two
arbitrators so chosen shall choose a third arbitrator from a panel made up of
experienced arbitrators selected pursuant to the procedures of the AAA and,
AGREEMENT - PAGE 50
once chosen, the third arbitrator's decision shall be final, binding and
conclusive upon the parties to this Agreement. The arbitrator may not award
punitive or exemplary damages for tort, contract or other common law claims,
but will have the power to award such damages to the extent permitted by an
applicable statute and to award pre-judgment interest and attorneys' fees to
the prevailing party. The award of the arbitrator may be confirmed by any
state or federal court of competent jurisdiction located in Dade County,
Florida, and may be challenged only upon the grounds provided in Section 10
of the Federal Arbitration Act, Title 9, United States Code. This agreement
to arbitrate shall survive the execution of this Agreement. THE RIGHT TO
ARBITRATE IS INTEGRAL TO AND NOT SEVERABLE FROM THIS AGREEMENT. THE PARTIES
ACKNOWLEDGE THAT THEY HAVE READ THIS ARBITRATION AGREEMENT AND KNOWINGLY
CONSENT TO ITS CONSEQUENCES, INCLUDING THE WAIVER OF THE RIGHT TO LITIGATE
CERTAIN DISPUTES. The expenses of such arbitration will be borne by the
losing party(s) or in such proportion as the arbitrator decides. A material
or anticipatory breach of any section of this Agreement will not release any
party from the obligations of this Section 8.5.5.
8.5.6 BINDING EFFECT. This Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective heirs, successors and
permitted assigns.
8.5.7 ASSIGNMENT. This Agreement shall not be assignable or
otherwise transferable by any party hereto without the prior written consent of
the other parties hereto.
8.5.8 NO THIRD-PARTY BENEFICIARIES. Nothing in this Agreement shall
confer any rights upon any person or entity other than the parties hereto and
their respective heirs, successors and permitted assigns
38.5.9 AMENDMENT; WAIVER, ETC. No amendment, modification or
discharge of this Agreement, and no waiver hereunder, shall be valid or binding
unless set forth in writing and duly executed by the party against whom
enforcement of the amendment, modification, discharge or waiver is sought. Any
such waiver shall constitute a waiver only with respect to the specific matter
described in such writing and shall in no way impair the rights of the party
granting such waiver in any other respect or at any other time. Neither the
waiver by any of the parties hereto of a breach of or a default under any of the
provisions of this Agreement, nor the failure by any of the parties, on one or
more occasions, to enforce any of the provisions of this Agreement or to
exercise any right or privilege hereunder, shall be construed as a waiver of any
other breach or default of a similar nature, or as a waiver of any of such
provisions, rights or privileges hereunder. The rights and remedies of any party
based upon, arising out of or otherwise in respect of any inaccuracy or breach
of any representation, warranty, covenant or agreement or failure to fulfill any
condition shall in no way be limited by the fact that the act, omission,
occurrence or other state of facts upon which any claim of any such inaccuracy
or breach is based may also be the subject matter of any other representation,
warranty, covenant or agreement as to which there is no inaccuracy or breach.
8.5.10 CONFIDENTIALITY. Except as otherwise provided in this
Agreement, each party to this Agreement will, and will cause its affiliates (and
their respective accountants, counsel, consultants, employees and agents to whom
they disclose such information) to, keep confidential and not disclose all
information obtained by and in the possession of such party and its affiliates
or to which such party and its affiliates are given access that in any way
relates to the business or
AGREEMENT - PAGE 51
operations of the other parties hereto. The provisions of this Section 8.5.10
shall not apply to the disclosure by any party hereto or their respective
affiliates of any information, documents or materials (i) which are, or
become, publicly available, other than by reason of a breach of this Section
8.5.10 by the disclosing party or any affiliate of the disclosing party, (ii)
received from a third party not bound by any confidentiality agreement with
the other party hereto, (iii) required by applicable Law to be disclosed by
such party, or (iv) necessary to establish such party's rights under either
this Agreement or any other Transaction Agreement; PROVIDED that, in the case
of clauses (iii) and (iv), the person intending to make disclosure of
confidential information will promptly notify the party to whom it is
obligated to keep such information confidential and, to the extent
practicable, provide such party a reasonable opportunity to prevent public
disclosure of such information. If the transactions contemplated by this
Agreement are not consummated, such information will be immediately returned
to the applicable party (to the extent such information consists of originals
or copies of records, documents, reports or other written materials).
[SIGNATURE PAGE FOLLOWS]
AGREEMENT - PAGE 52
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
SPEED RELEASE LOCK COMPANY
By: /s/ Xxxxx Xxxxxxxx
------------------------------
Name: Xxxxx Xxxxxxxx
Title: President
XXXXXX CORPORATION
By: /s/ Xxxxxx X. Xxxxxx
------------------------------
Name: Xxxxxx X. Xxxxxx
Title: President
PPCT PRODUCTS, LLC
By: /s/ Xxxxxx X. Xxxxxx
------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Managing Member
OWNERS
Each Owner hereby executes this Agreement
for the sole purpose of agreeing to the
provisions of Sections 1.2, 1.4, 3.2, 4.3,
5.7, 5.8, 6.2.7, 7.1, 8.1 and 8.3 through
8.5 (inclusive).
/s/ Xxxxxx Xxxxxx
------------------------------
XXXXXX XXXXXX
/s/ Xxxxxx X'Xxxxxxx
------------------------------
XXXXXX X'XXXXXXX
HOLSTER, LLC
By: /s/ Xxxx X. Xxxxxxx
------------------------------
Name: Xxxx X. Xxxxxxx
Title: Managing Member
AGREEMENT - PAGE S-1
Xxxxx Xxxxxxxx hereby executes this
Agreement for the sole purpose of agreeing
to the provisions of Sections 5.8, 5.11,
5.12, 7.1, 8.1 and 8.3 through 8.5
(inclusive).
/s/ Xxxxx Xxxxxxxx
------------------------------
XXXXX XXXXXXXX
AGREEMENT - PAGE 2
