STOCK PURCHASE AND EXCHANGE AGREEMENT
by and among
SPEED RELEASE LOCK COMPANY,
▇▇▇▇▇ ▇▇▇▇▇▇▇▇,
and
TTI INDUSTRIES, INCORPORATED
October 5, 1999
TABLE OF CONTENTS
Page
ARTICLE I. DEFINITIONS........................................ 1
ARTICLE II. BEDOWITZ OPTION................................... 2
2.1 SALE OF THE BEDOWITZ OPTION................................ 2
2.2 PURCHASE PRICE; METHOD OF PAYMENT.......................... 2
2.3 TERM; EXERCISE............................................. 2
2.4 USE OF PROCEEDS............................................ 3
2.5 LEGEND..................................................... 3
2.6 FURTHER ASSURANCES......................................... 3
ARTICLE III. SPEED RELEASE OPTION............................. 4
3.1 SPEED RELEASE OPTION....................................... 4
3.2 SPEED RELEASE OPTION PURCHASE PRICE........................ 4
3.3 EXERCISE................................................... 4
ARTICLE IV. RESTRICTIONS ON TRANSFERS......................... 4
ARTICLE V. REGISTRATION RIGHTS................................ 4
5.1 BEDOWITZ REGISTRATION RIGHTS............................... 4
5.2 SELLER'S REGISTRATION RIGHTS............................... 5
5.3 SPEED RELEASE'S REGISTRATION RIGHTS........................ 5
5.4 POTENTIAL MERGER........................................... 6
ARTICLE VI. REPRESENTATIONS AND WARRANTIES.................... 6
6.1 REPRESENTATIONS AND WARRANTIES OF SELLER................... 6
6.1.1 ORGANIZATION OF SELLER.................................. 6
6.1.2 CAPITALIZATION.......................................... 6
6.1.3. BEDOWITZ OPTION SHARES................................. 6
6.1.4. SUBSIDIARIES........................................... 6
6.1.5. AUTHORITY RELATIVE TO THE CLOSING DOCUMENTS;
ENFORCEABILITY........................................ 6
6.1.6. COMPLIANCE WITH OTHER INSTRUMENTS; CONSENTS............ 7
6.1.7 LITIGATION.............................................. 7
6.1.8. TAXES.................................................. 7
6.1.9. COMPLIANCE WITH LAW AND GOVERNMENT REGULATIONS......... 7
6.1.10. DOCUMENTS............................................. 7
6.1.11. FULL DISCLOSURE....................................... 8
6.1.12 RESTRICTIONS ON TRANSFER OR SALE OF SHARES............. 8
6.1.13. STATUS OF SELLER...................................... 8
6.2 REPRESENTATIONS AND WARRANTIES OF SPEED RELEASE............ 8
6.2.1. ORGANIZATION OF SPEED RELEASE.......................... 8
6.2.2 CAPITALIZATION; OWNERSHIP OF TRANSFERRED SHARES......... 9
6.2.3. RESTRICTIONS ON TRANSFER OR SALE OF SHARES............. 9
6.2.4. AUTHORITY RELATIVE TO THE CLOSING DOCUMENTS,
ENFORCEABILITY........................................10
6.2.5. COMPLIANCE WITH OTHER INSTRUMENTS; CONSENTS............10
6.2.6. STATUS OF SPEED RELEASE................................10
6.2.7. FULL DISCLOSURE........................................10
PAGE i
6.3 REPRESENTATIONS AND WARRANTIES OF BEDOWITZ................10
6.3.1 RESTRICTIONS ON TRANSFER OR SALE OF BEDOWITZ OPTION
SHARES................................................10
6.3.2 STATUS OF BEDOWITZ......................................11
ARTICLE VII ADDITIONAL COVENANTS AND AGREEMENTS OF THE
PARTIES.....................................................12
7.1. FILINGS WITH SECURITIES AND EXCHANGE COMMISSION...........12
7.2. ACCESS; CONFIDENTIALITY...................................12
7.3 ANTI-DILUTION..............................................12
7.4. BEST EFFORTS..............................................12
7.5. BROKERS OR FINDERS........................................12
ARTICLE VIII. CLOSING AND TERMINATION.........................12
8.1. THE CLOSING...............................................12
8.2. DELIVERIES BY SELLER......................................12
8.2.1. CERTIFIED RESOLUTIONS..................................13
8.2.2. CHARTER DOCUMENTS......................................13
8.3 DELIVERIES BY SPEED RELEASE................................13
8.3.1. CORPORATE APPROVALS....................................13
8.3.2. SPEED RELEASE OPTION PURCHASE PRICE....................13
8.4 DELIVERIES BY BEDOWITZ.....................................13
8.4.1 BEDOWITZ OPTION PURCHASE PRICE..........................13
ARTICLE IX. MISCELLANEOUS.....................................13
9.1. NOTICES...................................................13
9.2. ASSIGNABILITY AND PARTIES IN INTEREST.....................15
9.3. EXPENSES..................................................15
9.4. GOVERNING LAW.............................................15
9.5. COUNTERPARTS..............................................15
9.6. HEADINGS..................................................15
9.7 PRONOUNS, ETC..............................................15
9.8. COMPLETE AGREEMENT........................................15
9.9. MODIFICATIONS, AMENDMENTS AND WAIVERS.....................15
9.10. SEVERABILITY.............................................15
9.11 SURVIVAL OF REPRESENTATIONS AND INDEMNIFICATIONS..........15
ii
APPENDICES
----------
Section
Description Reference
----------- ---------
Appendix A
Appendix B
SCHEDULES
---------
Description
-----------
Schedule 6.1.2.2
Schedule 6.1.4
Schedule 6.1.6
Schedule 6.1.9
Schedule 6.2.2.2
Schedule 6.2.2.4
Page iii
STOCK PURCHASE AND EXCHANGE AGREEMENT
THIS STOCK PURCHASE AND EXCHANGE AGREEMENT (this
"Agreement") dated effective as of October 5, 1999, among SPEED
RELEASE LOCK COMPANY, a Texas corporation (Speed Release"),
▇▇▇▇▇ ▇▇▇▇▇▇▇▇, an individual ("Bedowitz"), and TTI INDUSTRIES,
INCORPORATED, a Texas corporation ("Seller").
R E C I T A L S:
WHEREAS, Bedowitz desires to purchase from Seller and Seller
desires to sell to Bedowitz an option to purchase common stock in
Seller under the terms and conditions of this Agreement; and
WHEREAS, Speed Release desires to purchase from Seller and
Seller desires to grant to Speed Release the Speed Release Option
(as defined below), pursuant to which Speed Release, upon
exercising such Option, would receive additional shares of common
stock of Seller for shares of common stock of Speed Release in
accordance with the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the
representations, warranties and agreements contained herein, and
other good and valuable consideration, the adequacy and
sufficiency of which is hereby acknowledged, and intending to be
legally bound hereby, the parties hereto agree as follows:
ARTICLE I.
DEFINITIONS
The terms defined in this Article (except as otherwise
expressly provided in this Agreement) for all purposes of this
Agreement shall have the respective meanings specified in this
Article.
"Agreement" shall mean this Agreement, and all the exhibits
and other documents attached to or referred to in the Agreement,
and all amendments and supplements, if any, to the Agreement.
"Closing" shall mean the meeting of the parties at which the
Closing Documents shall be exchanged by the parties, except for
those documents, or other items specifically required to be
exchanged at a later time.
"Closing Date" shall mean October 5, 1999, or such other
date as agreed in writing by the parties on which the Closing
occurs.
"Closing Documents" shall mean the papers, instruments and
documents required to be executed and delivered at the Closing
pursuant to this Agreement.
"Code" shall mean the Internal Revenue of 1986, as amended
or any successor law, and regulations issued by the Internal
Revenue Service pursuant to the Internal Revenue Code or any
successor law.
"Commission" shall mean the United States Securities and
Exchange Commission.
"Encumbrance" shall mean any charge, claim, encumbrance,
community property interest, condition, equitable interest, lien,
option, pledge, security interest, right of first refusal, or
restriction of any kind, including any restriction on use, voting
(in the case of any security), transfer, receipt of income, or
exercise of any other attribute of ownership other than (a) liens
for taxes not yet due and payable, or (b) liens that secure the
ownership interests of lessors of equipment.
"Exchange Act" shall mean the Securities Exchange Act of
1934, as amended.
"GAAP" shall mean generally accepted accounting principles
applied in a manner consistent with prior periods.
Page 1
"Governmental Authority" means any federal, state, local,
municipal, foreign or other government or any federal, state or
local regulatory authority.
"Legal Requirement" shall mean any federal, state, local,
municipal, foreign or other law, statute, legislation, act,
constitution, ordinance, code, treaty, rule or regulation
(including without limitation any applicable environmental,
building, zoning or other law, ordinance or regulation).
"Material Adverse Effect" shall mean any change
(individually or in the aggregate) in the general affairs,
management, business, goodwill, results of operations, condition
(financial or otherwise), assets, liabilities or prospects
(whether or not the result thereof would be covered by insurance)
that would be material and adverse to the designated party.
"Ordinary Course of Business" shall mean actions consistent
with the past practices of the designated party which are similar
in nature and style to actions customarily taken by the
designated party and which do not require, and in the past have
not received, specific authorization by the Board of Directors of
the designated party.
"Permits" shall mean any permit, license, exemption, order
or approval of any Governmental Authority necessary for the
conduct of the designated party's respective business as
currently conducted.
"Securities Act" shall mean the Securities Act of 1933, as
amended.
"Seller's Shares" shall mean the Seller's common stock, par
value $0.01 per share.
"Taxes" shall include federal, state and local income taxes,
capital gains tax, value-added taxes, franchise, personal
property and real property taxes, levies, assessments, tariffs,
duties (including any customs duty), business license or other
fees, sales, use and any other taxes relating to the assets of
the designated party or the business of the designated party for
all periods up to and including the Closing Date, together with
any related charge or amount, including interest, fines,
penalties and additions to tax, if any, arising out of tax
assessments.
"Transactions" shall mean the transactions contemplated by
this Agreement, together with each of the other transactions
contemplated by the Closing Documents, including, without
limitation, the purchase of the Bedowitz Option Shares, the
granting and exercise of the Bedowitz Option, the granting and
exercise of the Speed Release Option, the issuance of the
Seller's Shares upon exercise of the foregoing options, the
issuance of the Exchange Shares, and the registration of shares
with the Commission, all as more fully described herein.
Other terms are defined elsewhere herein.
ARTICLE II.
BEDOWITZ OPTION
2.1. Sale of the Bedowitz Option. On the terms and subject
to the conditions herein expressed and based on the
representations, warranties, covenants and agreements contained
herein, at the Closing, Seller shall sell, transfer and assign to
Bedowitz an option to purchase 165,000 shares of Seller's Shares
("Bedowitz Option Shares") at an exercise price to Bedowitz (the
"Bedowitz Option Exercise Price") of $.01 per share.
2.2. Purchase Price; Method of Payment. The total purchase
price (the "Bedowitz Option Purchase Price") for the Bedowitz
Option shall be Forty Thousand Dollars ($40,000.00), payable by
Bedowitz by certified funds or by wire transfer, payable to TTI
Industries, Inc. at the Closing.
2.3. Term; Exercise. The Bedowitz Option shall be valid for
a period of three (3) years from the Closing Date (the "Bedowitz
Option Exercise Period"), during which Bedowitz may from time to
time, upon 60 days prior written notice, exercise the Bedowitz
Option with respect to all or part of the Bedowitz Option Shares.
Bedowitz shall exercise the Bedowitz Option by sending a notice
in the form of Exhibit "A" attached hereto and incorporated
herein by reference for all purposes (the "Bedowitz Exercise
Notice") to Seller on or before the expiration of the Bedowitz
Option Exercise Period. Seller shall issue the Seller's Shares
enumerated in such notice
Page 2
as exercised by Bedowitz, to Bedowitz no later than forty-
eight (48) hours after receipt of the Bedowitz Exercise Notice.
2.4. Use of Proceeds. Seller agrees to use the proceeds
from the Bedowitz Option Purchase Price to immediately pay BDO
▇▇▇▇▇▇▇ the sum of approximately $18,000 to complete the audit of
Seller for calendar year ended August 31, 1998, to be included in
Seller's Form 10-KSB for the fiscal year ended August 31, 1998,
and to pay to ▇▇▇▇▇ & ▇▇▇▇▇▇ LLP, the sum of approximately
$22,000 on account for service previously rendered in connection
with outstanding periodic reports with the Commission pursuant to
the Exchange Act which have been delinquent. Seller represents,
warrants and covenants that the $18,564 amount paid to BDO
▇▇▇▇▇▇▇ constitutes the only amount owing to BDO ▇▇▇▇▇▇▇ with
respect to the Seller's audited financial statements to be
included in Seller's Form 10-KSB for the fiscal year ended
August 31, 1998, and that Seller has no knowledge of any matter
which would prevent BDO ▇▇▇▇▇▇▇ from issuing its audit opinion
and the aforementioned financial statements. Seller also
represents, warrants and covenants that it will exercise its
utmost good faith best efforts to file the Seller's Form 10-KSB
for the fiscal year ended August 31, 1998, as soon as possible
after the Closing Date.
2.5. Legend. Bedowitz understands that the Bedowitz Option
Shares to be issued and delivered to Bedowitz upon the exercise
of the Bedowitz Option will not be the subject of a registration
statement under the Securities Act but will be issued in reliance
upon the exemption afforded by Section 4(2) of the Securities Act
and/or Regulation D promulgated by the Commission thereunder
("Regulation D"). Each certificate representing Bedowitz Option
Shares issued to Bedowitz shall bear the following legend (the
"Legend"):
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN THE SUBJECT OF A REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND ARE
"RESTRICTED SECURITIES" AS THAT TERM IS DEFINED IN
RULE 144 OF THE ACT. THE SHARES REPRESENTED BY THIS
CERTIFICATE MAY NOT BE OFFERED FOR SALE, SOLD OR
OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE ACT OR PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER THE ACT.
2.6. Further Assurances. If at any time after the Effective
Date, Bedowitz shall consider or be advised that any deeds, bills
of sale, assignments, assurances or any other actions or things
are necessary or desirable to vest, perfect or confirm of record
or otherwise in Bedowitz his right, title or interest in or to
the Bedowitz Option, Seller's shares acquired or to be acquired
by Bedowitz as a result of the Bedowitz Option, or in connection
with, this Agreement, the officers of Seller shall execute and
deliver, in the name and on behalf of Bedowitz or otherwise, all
such deeds, bills of sale, assignments and assurances and to take
and do all such other actions and things as may be necessary or
desirable to vest, perfect or confirm any and all such rights,
titles and interest.
Page 3
ARTICLE III.
SPEED RELEASE OPTION
3.1. Speed Release Option. Speed Release shall have the
option (the "Speed Release Option"), exercisable for a period of
one hundred eighty (180) days (the "Speed Release Option Exercise
Period") following the Closing Date, to require Seller to
exchange a sufficient number of whole shares of common stock of
Speed Release (the "Speed Release Option Shares") for Exchange
Shares (as hereinafter defined), so that as of the date upon
which the Speed Release Option is exercised (the "Speed Release
Exercise Date") in the manner provided herein, Seller shall own
ten percent (10%) of all of the outstanding and validly issued
whole shares of common stock in Speed Release and Speed Release
shall own nine and nine-tenths percent (9.9%) of all of the
outstanding and validly issued whole shares of the common stock
of Seller (the "Exchange Shares"), calculated as of the Closing
Date.
3.2. Speed Release Option Purchase Price. The total
purchase price (the "Speed Release Option Purchase Price") for
the option shall be One Hundred Dollars ($100), payable by Speed
Release in cash, by check or certified funds or by wire transfer
at closing.
3.3. Exercise. Speed Release shall exercise the Option by
sending a notice (the "Speed Release Exercise Notice") in the
form of Exhibit "B" attached hereto and incorporated herein by
reference for all purposes, to Seller on or before the expiration
of the Speed Release Option Exercise Period and with such Speed
Release Exercise Notice, tendering the Speed Release Option
Shares to Seller. Seller shall issue the Exchange Shares to
Speed Release no later than forty-eight (48) hours after receipt
of the Speed Release Exercise Notice and the Speed Release Option
Shares.
ARTICLE IV.
RESTRICTIONS ON TRANSFERS
The parties hereto understand and acknowledge that all
shares issued pursuant to this Agreement, including the Bedowitz
Option Shares, the Speed Release Option Shares and the Exchange
Shares are "restricted securities" as that term is defined in
Rule 144 promulgated pursuant to the Securities Act and such
shares when issued shall bear the Legend.
ARTICLE V.
REGISTRATION RIGHTS
5.1. Bedowitz Registration Rights.
(a) If at any time or from time to time, Seller shall
determine to register any of its securities, for its own
account or for the account of any of its shareholders, other
than a registration statement relating solely to employee
benefits plans, a transaction relating solely to the sale of
debt or convertible debt instruments or a registration
statement on any form (other than Form ▇-▇, ▇-▇ or S-3, or
their successor forms) which does not include substantially
the same information as would be required to be included in
a registration statement covering the sale of registrable
securities, Seller will (a) give Bedowitz written notice
thereof as soon as practicable prior to the filing of the
registration statement; and (b) include in such registration
statement and in any underwriting involved therein, all of
the Bedowitz Option Shares specified in a written request or
requests, made within fifteen (15) days after receipt of
such written notice from Seller.
(b) If Seller shall receive from Bedowitz a request
that Seller effect any registration with respect to all of
the Bedowitz Option Shares, Seller shall, as soon as
practicable, use its best efforts to register (including
without limitation, the execution of an undertaking to file
post-effective amendments and any other governmental
requirements) all of the Bedowitz Option Shares held by
Bedowitz, all at Bedowitz's expense.
Page 4
5.2. Seller's Registration Rights.
(a) If at any time or from time to time, Speed Release
shall determine to register any of its securities, for its
own account or for the account of any of its shareholders,
other than a registration statement relating solely to
employee benefits plans, or a transaction relating solely to
the sale of debt or convertible debt instruments or a
registration statement on any form (other than Form ▇-▇, ▇-▇
or S-3, or their successor forms), which does not include
substantially the same information as would be required to
be included in a registration statement covering the sale of
registrable securities, Speed Release will (i) give written
notice to Seller thereof as soon as practicable prior to the
filing of the registration statement; and (ii) include in
such registration statement and in any underwriting involved
therein, such amount of Speed Release Option Shares held by
Seller equal to ten percent (10%) of all outstanding Speed
Release Shares being included in the registration statement
all as may be specified in a written request or requests,
made within fifteen (15) days after receipt of such written
notice from Speed Release, by Seller.
(b) If Speed Release shall receive from Seller a
request that Speed Release effect any registration with
respect to all of the Speed Release Option Shares, Speed
Release shall, as soon as practicable, use its best efforts
to register (including without limitation, the execution of
an undertaking to file post-effective amendments and any
other governmental requirements) all of the Speed Release
Option Shares held by Seller, all at Speed Release's
expense.
(c) In the event of the exercise by Seller of any
registration rights hereunder, Seller shall be restricted to
distributing the Speed Release Option Shares to Seller's
shareholders in the form of a stock dividend or return of
capital. Under no circumstances, shall Seller have any
right to sell the Speed Release Option Shares in exchange
for cash due consideration, or for any purpose other than a
distribution to Seller's shareholders..
(d) If Seller does not exercise its demand
registration rights as set forth in Section 5.2(b)
hereunder, with respect to the Speed Release Option Shares
within 180 days after the date upon which Seller acquires
the Speed Release Option Shares (the "Demand Registration
Rights Period"), then the exchange of the Speed Release
Option Shares and the Exchange Shares shall, at the election
of Speed Release, in the exercise of its sole and absolute
discretion, be rescinded. Speed Release may exercise its
right to rescind by providing a notice of rescission to
Seller within sixty (60) days after the expiration of the
Demand Registration Rights Period. In connection with such
rescission, Speed Release shall immediately return to Seller
the Exchange Shares received and Seller shall immediately
return to Speed Release the Speed Release Option Shares
received.
5.3. Speed Release's Registration Rights.
(a) If at any time or from time to time, Seller shall
determine to register any of its securities, for its own
account or for the account of any of its shareholders, other
than a registration statement relating solely to employee
benefits plans, or a transaction relating solely to the sale
of debt or convertible debt instruments or a registration
statement on any form (other than Form ▇-▇, ▇-▇ or S-3, or
their successor forms), which does not include substantially
the same information as would be required to be included in
a registration statement covering the sale of registrable
securities, Seller will (i) give written notice to Speed
Release thereof as soon as practicable prior to the filing
of the registration statement; and (ii) include in such
registration statement and in any underwriting involved
therein, such amount of Exchange Shares held by Speed
Release equal to nine and nine-tenths percent (9.9%) of all
outstanding Seller's Shares being included in the
registration statement all as may be specified in a written
request or requests, made within fifteen (15) days after
receipt of such written notice from Seller, by Speed
Release.
(b) If Seller shall receive from Speed Release a request
that Seller effect any registration with respect to all of
the Exchange Shares, Seller shall, as soon as practicable,
use its best efforts to register (including without
limitation, the execution of an undertaking to file post-
effective amendments and any other governmental
requirements) all of the Exchange Shares held by Speed
Release, all at Speed Release's expense.
Page 5
5.4. Potential Merger. Notwithstanding anything to the
contrary contained herein, in the event Speed Release and Seller
enter into a merger or reorganization agreement prior to the
expiration of the Demand Registration Rights Period, the
registration rights and the right of rescission herein shall be
null and void.
ARTICLE VI.
REPRESENTATIONS AND WARRANTIES
6.1. Representations and Warranties of Seller. Seller
represents and warrants to Speed Release and Bedowitz as follows:
6.1.1. Organization of Seller. Seller is a business
corporation, duly organized, validly existing, and in good
standing under the laws of the State of Texas and has all
requisite corporate power, franchises and licenses to own
its property and conduct the business in which it is
engaged. Seller has the full power and authority (corporate
or otherwise) to execute, deliver and perform its
obligations under this Agreement and the Closing Agreements
to which it is a party. A copy of Seller's articles of
incorporation, bylaws, minutes and transfer records have
been delivered to Speed Release. Seller is duly qualified
and in good standing as a foreign corporation in every
jurisdiction in which such qualification is necessary,
except to the extent the failure to be so qualified is not
reasonably expected to result in a Material Adverse Effect.
6.1.2. Capitalization.
6.1.2.1 Seller has an authorized capital stock
consisting of Seller's Shares, of which 4,073,401
shares are issued and outstanding as of the date of
execution of this Agreement. All of Seller's Shares
have been validly issued, fully paid and are non-
assessable.
6.1.2.2 Except as set forth on Schedule 6.1.2.2,
Seller does not have outstanding subscriptions,
options, rights, warrants, convertible securities or
other agreements or commitments to issue, or contracts
or any other agreements obligating Seller to issue, or
to transfer from treasury, any shares of its capital
stock of any class or kind, or securities convertible
into such stock.
6.1.3. Bedowitz Option Shares and Exchange Shares.
6.1.3.1. Seller has duly authorized the issuance and
sale of the Bedowitz Option Shares and Exchange Shares
by all requisite corporate action.
6.1.3.2. The Bedowitz Option Shares and Exchange
Shares, when issued and paid for, will represent
validly authorized, duly issued and fully paid and non-
assessable Seller's Shares.
6.1.4. Subsidiaries. Except as set forth on Schedule
6.1.4, Seller does not directly or indirectly have any
wholly-owned subsidiaries or any material equity investment
in any corporation, partnership, joint venture or other
business entity.
6.1.5. Authority Relative to the Closing Documents;
Enforceability. Seller has the requisite corporate power
and authority to execute and deliver the Closing Documents
and to consummate the Transactions. The execution and
delivery of the Closing Documents by Seller, and the
consummation by Seller of the Transactions, have been duly
authorized by the Board of Directors of Seller, and no other
corporate action on the part of Seller is necessary to
authorize the execution and delivery by Seller of the
Closing Documents and the consummation by it of the
Transactions. The Closing Documents executed by Seller are
the legal, valid and binding obligations of Seller,
enforceable against Seller in accordance with their
respective terms, except insofar as its enforcement may be
limited by (a) bankruptcy, insolvency, moratorium or similar
laws affecting the enforcement of creditors' rights
generally and (b) equitable principles limiting the
availability of equitable remedies (the "Insolvency/Equity
Exceptions"). All persons who execute the Closing Documents
on behalf of Seller will have been duly authorized to do so.
Page 6
6.1.6. Compliance with Other Instruments; Consents.
Except as set forth in Schedule 6.1.6, neither the execution
of any Closing Document, nor the consummation of the
Transactions, will conflict with, violate or result in a
breach or constitute a default (or an event which, with
notice or lapse of time or both, would constitute a
default), or result in the termination of, or accelerate the
performance required by, or result in the creation of any
Encumbrance upon any of the assets of Seller under any
provision of any provision of its Articles of Incorporation,
Bylaws, indenture, mortgage, lien, lease, agreement,
contract, instrument, order, judgment, decree, statute,
ordinance, regulation or any other restriction of any kind
or character to which Seller is subject or by which Seller
is bound, or require the consent of any third party or
governmental agency.
6.1.7. Litigation. There are no legal, administrative,
arbitration or other proceedings or claims pending against
Seller nor is Seller subject to any existing judgment which
might materially and adversely affect the financial
condition, business, property or prospects of Seller; nor
has Seller received any inquiry from an agency of the
federal or of any state or local government about the
Transactions, or about any violation or possible violation
of any law, regulation or ordinance affecting its business
or assets.
6.1.8. Taxes.
6.1.8.1 Seller either (a) has timely filed with the
appropriate taxing authority all Tax and information
returns required to have been filed by Seller or (b)
has timely filed for any required extensions with
regard to such returns. All Taxes of Seller have been
paid (or estimated Taxes have been deposited) to the
extent such payments are required prior to the date
hereof or accrued on the books of Seller. The returns
were (or will be) correct as (or when) filed.
6.1.8.2. Seller has not received any notice of any
pending investigations of Seller concerning any Tax
returns by any federal, state or local taxing
authority. There are no federal, state, local or
foreign Tax liens upon any of Seller's assets.
6.1.8.3 Seller acknowledges that Seller and
Seller's sharebolders may have certain tax consequences
as a result of the Transactions contemplated herein and
that Seller will rely solely upon its own tax counsel,
accountants and advisors with respect to such tax
issues and consequences.
6.1.9 Compliance with Law and Government Regulations.
Except as set forth in Schedule 6.1.9, Seller is in
compliance with, and is not in violation of, any Legal
Requirement affecting Seller or its properties or the
operation of its businesses. Seller is not subject to any
order, decree, judgment or other sanction of any court,
administrative agency or other tribunal.
6.1.10. Documents. Except as set forth in Schedule 6.1.9,
Seller has timely filed with the Commission all documents
that would have been required to have been filed pursuant to
the Securities Act and Exchange Act. As of their respective
dates, all periodic reports, schedules and proxy statements
filed by the Seller since May 6, 1998 (the "Seller
Commission Documents"), complied in all material respects
with the requirements of the Securities Act or the Exchange
Act, as the case may be, and the rules and regulations of
the Commission thereunder applicable to such Seller
Commission Documents, and none of the Seller Commission
Documents contained any untrue statement of a material fact
or omitted to state a material fact required to be stated
therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not
misleading. The financial statements of Seller included in
the Seller Commission Documents comply in form in all
material respects with applicable accounting requirements
and with the published rules and regulations of the
Commission with respect thereto; are accurate, complete and
in accordance with the books and records of Seller; have
been prepared in accordance with GAAP (except as may be
indicated in the notes thereto or, in the case of the
unaudited statements, as permitted by Form 10-Q of the
Commission) and fairly present (subject, in the case of the
unaudited statements, to normal, recurring audit
adjustments) the financial position of Seller as and at the
dates thereof and the results of its operations and cash
flows for the periods then ended.
Page 7
6.1.11. Full Disclosure. Neither the representations or
warranties made by Seller herein or in any Closing Document
furnished or to be furnished hereunder contain or will
contain any untrue statement of material fact, or omit any
material fact, the omission of which would be misleading.
6.1.12. Restrictions on Transfer or Sale of Shares
(i) Seller will be acquiring the Speed Release
Option Shares (if the Speed Release Option is
exercised) solely for its own beneficial account, for
investment purposes, and not with a view to, or for
resale in connection with, any distribution of the
Speed Release Option Shares (except pursuant to any
registration rights granted in this Agreement). Seller
understands that the Speed Release Option Shares have
not been registered under the Securities Act or any
state securities laws by reason of specific exemptions
under the provisions thereof which depend in part upon
the investment intent of Seller and of the other
representations made by Seller in this Agreement.
Seller understands that Speed Release is relying upon
the representations and agreements contained in this
Agreement (and any supplemental information) for the
purpose of determining whether this transaction meets
the requirements for such exemptions.
(ii) Seller understands that the Speed Release
Option Shares are "restricted securities" under
applicable federal securities laws and that the
Securities Act and the rules of the Commission provide
in substance that the undersigned may dispose of the
Option Shares only pursuant to an effective
registration statement under the Securities Act or an
exemption therefrom and the undersigned understands
that Speed Release has no obligation or intention to
register any of the Speed Release Option Shares (except
for any registration rights granted in this Agreement),
or to take action so as to permit sales pursuant to the
Securities Act (including Rule 144 thereunder).
Accordingly, Seller understands that under the
Commission's rules, absent a registration statement,
Seller may dispose of the Speed Release Option Shares
principally only in "private placements" which are
exempt from registration under the Securities Act, in
which event the transferee will acquire "restricted
securities" subject to the same limitations as in the
hands of the Seller. As a consequence, Seller
understands that it must bear the economic risks of the
investment in the Speed Release Option Shares for an
indefinite period of time.
(iii) Seller has not offered or sold any
portion of the Speed Release Option Shares and has no
present intention of dividing the Speed Release Option
Shares with others or of reselling or otherwise
disposing of any portion of the Speed Release Option
Shares either currently or after the passage of a fixed
or determinable period of time or upon the occurrence
or nonoccurrence of any predetermined event or
circumstance, unless pursuant to a registration
statement or pursuant to an exemption therefrom.
(iv) Seller acknowledges that neither Speed
Release nor any other person offering to sell the Speed
Release Option Shares to Seller has offered the same by
means of any form of general advertising, such as media
advertising or seminars.
(v) Seller will not sell, assign, or otherwise
transfer the Speed Release Option Shares without the
prior written consent of Speed Release.
6.1.13. Status of Seller. Seller has such knowledge,
skill and experience in business, financial and investment
matters so that it is capable of evaluating the merits and
risks of an investment in the Speed Release Option Shares.
To the extent necessary, Seller has retained, at its own
expense, and relied upon, appropriate professional advice
regarding the investment, tax and legal merits and
consequences of this Agreement and owning Speed Release
Option Shares.
6.2. Representations and Warranties of Speed Release. Speed
Release hereby represents and warrants to Seller that:
6.2.1. Organization of Speed Release. Speed Release is
duly organized, validly existing, and in good standing under
the laws of the state of Texas and has all requisite
corporate power, franchises, and licenses to own its
property and conduct the business in which it is engaged.
Speed Release has the full
Page 8
power and authority (corporate or otherwise) to execute,
deliver and perform its obligations under this Agreement and
the Closing Agreements to which it is a party. Complete
copies of Speed Release's Articles of Incorporation, Bylaws,
minutes, transfer records and agreements, if any, among some
or all of the stockholders of Speed Release have been
delivered to Seller. Speed Release is duly qualified and in
good standing as a foreign corporation in every jurisdiction
in which such qualification is necessary, except to the
extent the failure to be so qualified is not reasonably
expected to result in a Material Adverse Effect.
6.2.2. Capitalization; Ownership of Transferred Shares.
6.2.2.1 Speed Release has an authorized capital
stock consisting of one hundred thousand (100,000) shares of
common stock, par value $0.01 per share, of which ten
thousand (10,000) shares are issued and outstanding,
and will as soon as practicable increase the amount of
authorized shares of common stock to 100,000,000 and
accomplish a forward split, the result of which shall
be 11,111,000 issued and outstanding (including the
Speed Release Option Shares).
6.2.2.2. Except as set forth in Schedule 6.2.2.2,
Speed Release does not have any outstanding
subscriptions, options, rights, warrants, convertible
securities or other agreements or commitments to issue,
or contracts or any other agreements obligating Speed
Release to issue, or to transfer from treasury, any
shares of its capital stock of any class or kind, or
securities convertible into such stock or interests.
6.2.2.3. Speed Release is not under any obligation,
contract or other arrangement to register any of its
securities under federal or state securities laws.
6.2.2.4. Except as set forth in Schedule 6.2.2.4,
there are no agreements, voting trusts, proxies or
other agreements or understandings of any character,
whether written or oral, among stockholders of Speed
Release with respect to or concerning the purchase,
sale or transfer or voting of any equity or other
security of Speed Release.
6.2.2.5. Speed Release does not have any legal
obligations, absolute or contingent, to any other
person or entity to sell the assets, or any capital
stock or any other security of Speed Release or any of
its subsidiaries or affect any merger, consolidation or
other reorganization of Speed Release or any of its
subsidiaries or to enter into any agreement with
respect thereto, except pursuant to this Agreement.
6.2.3. Restrictions on Transfer or Sale of Shares.
(i) Speed Release is acquiring the Exchange
Shares (if the Speed Release Option is exercised)
solely for its own beneficial account, for investment
purposes, and not with a view to, or for resale in
connection with, any distribution of the Exchange
Shares. Speed Release understands that the Exchange
Shares have not been registered under the Securities
Act or any state securities laws by reason of specific
exemptions under the provisions thereof which depend in
part upon the investment intent of Speed Release and of
the other representations made by Speed Release in this
Agreement. Speed Release understands that the Seller
is relying upon the representations and agreements
contained in this Agreement (and any supplemental
information) for the purpose of determining whether
this transaction meets the requirements for such
exemptions.
(ii) Speed Release understands that the Exchange
Shares are "restricted securities" under applicable
federal securities laws and that the Securities Act and
the rules of the Commission provide in substance that
the undersigned may dispose of the Exchange Shares only
pursuant to an effective registration statement under
the Securities Act or an exemption therefrom and the
undersigned understands that the Seller has no
obligation or intention to register any of the Exchange
Shares (except pursuant to any registration rights
granted in this Agreement), or to take action so as to
permit sales pursuant to the Securities Act (including
Rule 144 thereunder). Accordingly, Speed Release
understands that under the Commission's rules, absent a
registration statement, Speed Release may dispose of
the Exchange Shares principally only in "private
Page 9
placements" which are exempt from registration under
the Securities Act, in which event the transferee will
acquire "restricted securities" subject to the same
limitations as in the hands of Speed Release. As a
consequence, Speed Release understands that it must
bear the economic risks of the investment in the
Exchange Shares for an indefinite period of time.
(iii) Speed Release has not offered or sold
any portion of the Exchange Shares and has no present
intention of dividing the Exchange Shares with others
or of reselling or otherwise disposing of any portion
of the Exchange Shares either currently or after the
passage of a fixed or determinable period of time or
upon the occurrence or nonoccurrence of any
predetermined event or circumstance.
(iv) Speed Release acknowledges that neither
Seller nor any other person offering to sell the
Exchange Shares to Speed Release has offered the same
by means of any form of general advertising, such as
media advertising or seminars.
6.2.4. Authority Relative to the Closing Documents,
Enforceability. Speed Release has the requisite corporate
power and authority to execute and deliver the Closing
Documents and to consummate the Transactions. The execution
and delivery of the Closing Documents by Speed Release and
the consummation by Speed Release of the Transactions, have
been duly authorized by the Board of Directors of Speed
Release and no other corporate or other action on the part
of Speed Release is necessary to authorize the execution and
delivery by Speed Release of the Closing Documents and the
consummation of the Transactions. The Closing Documents
executed by Speed Release are the legal, valid and binding
obligations of Speed Release, as the case may be,
enforceable against it in accordance with their respective
terms, except insofar as the enforcement thereof may be
limited by the Insolvency/Equity Exceptions All persons who
execute the Closing Documents on behalf of Speed Release has
been duly authorized to do so.
6.2.5. Compliance with Other Instruments; Consents.
Neither the execution of any Closing Document nor the
consummation of the Transactions will conflict with, violate
or result in a breach or constitute a default (or an event
which, with notice or lapse of time or both, would
constitute a default), or result in a termination of, or
accelerate the performance required by, or result in the
creation of any Encumbrance upon any assets of Speed Release
under any provision of the Articles of Incorporation,
Bylaws, indenture, mortgage, lien, lease, agreement,
contract, instrument, order, judgment, decree, statute,
ordinance, regulation or any other restriction of any kind
or character to which Speed Release is bound.
6.2.6. Status of Speed Release. Speed Release has such
knowledge, skill and experience in business, financial and
investment matters so that it is capable of evaluating the
merits and risks of an investment in the Exchange Shares.
To the extent necessary, Speed Release has retained, at its
own expense, and relied upon, appropriate professional
advice regarding the investment, tax and legal merits and
consequences of this Agreement and owning Exchange Shares
6.2.7. Full Disclosure. None of the representations or
warranties made by Speed Release or in any Closing Document
furnished or to be furnished by it hereunder contains or
will contain any untrue statement of a material fact, or
omits any material fact, the omission of which would be
misleading.
6.3. Representations and Warranties of Bedowitz. Bedowitz
hereby represents and warrants to Seller that:
6.3.1. Restrictions on Transfer or Sale of Bedowitz
Option Shares:
(i) Bedowitz is acquiring the Bedowitz Option
Shares solely for his own beneficial account, for
investment purposes, and not with a view to, or for
resale in connection with, any distribution of the
Bedowitz Option Shares (except pursuant to any
registration rights granted in this Agreement).
Bedowitz understands that the Bedowitz Option Shares
have not been registered under the Securities Act or
any state securities laws by reason of specific
exemptions under the provisions thereof which depend in
part upon the investment intent of Bedowitz and of the
other representations made by Bedowitz in this
Agreement. Bedowitz understands that the Seller is
relying upon the representations and agreements
contained in this Agreement (and any
Page 10
supplemental information) for the purpose of
determining whether this transaction meets the
requirements for such exemptions.
(ii) Bedowitz understands that the Bedowitz Option
Shares are "restricted securities" under applicable
federal securities laws and that the Securities Act and
the rules of the Commission provide in substance that
he may dispose of the Bedowitz Option Shares only
pursuant to an effective registration statement under
the Securities Act or an exemption therefrom and the
undersigned understands that the Seller has no
obligation or intention to register any of the Bedowitz
Option Shares (except pursuant to any registration
rights granted in this Agreement), or to take action so
as to permit sales pursuant to the Securities Act
(including Rule 144 thereunder). Accordingly, Bedowitz
understands that under the Commission's rules, absent a
registration statement, Bedowitz may dispose of the
Bedowitz Option Shares principally only in
transaction(s) which are exempt from registration under
the Securities Act, in which event the transferee will
acquire "restricted securities" subject to the same
limitations as in the hands of Bedowitz. As a
consequence, Bedowitz understands that it must bear the
economic risks of the investment in the Bedowitz Option
Shares for an indefinite period of time.
(iii) Bedowitz has not offered or sold any
portion of the Bedowitz Option Shares and has no
present intention of dividing the Bedowitz Option
Shares with others or of reselling or otherwise
disposing of any portion of the Bedowitz Option Shares
either currently or after the passage of a fixed or
determinable period of time or upon the occurrence or
nonoccurrence of any predetermined event or
circumstance.
(iv) Bedowitz acknowledges that neither Seller nor
any other person offering to sell the Bedowitz Option
Shares to Bedowitz has offered the same by means of any
form of general advertising, such as media advertising
or seminars.
6.3.2. Status of Bedowitz. Bedowitz has such knowledge,
skill and experience in business, financial and investment
matters so that it is capable of evaluating the merits and
risks of an investment in the Bedowitz Option Shares. To
the extent necessary, the undersigned has retained, at his
own expense, and relied upon, appropriate professional
advice regarding the investment, tax and legal merits and
consequences of this Agreement and owning Bedowitz Option
Shares.
Page 11
ARTICLE VII.
ADDITIONAL COVENANTS AND AGREEMENTS OF THE PARTIES
7.1. Filings With Securities and Exchange Commission.
(a) The parties recognize that Seller may be required
to report the Transactions to the Commission on Form 8-K, or
such other report as Seller may deem appropriate, and Speed
Release may be required to file certain reports with the
Commission, and the parties agree to cooperate in the
preparation and filing of such report or any other filings
required to be filed with the Commission.
(b) The parties acknowledge that Seller is delinquent
on certain required filings with the Commission. Within
thirty (30) days after the Closing of the Bedowitz Option,
Seller shall file all delinquent filings with the
Commission. Seller covenants and warrants that, upon the
issuance of the Bedowitz Option Shares, it will remain
current with all Commission filings.
7.2. Access; Confidentiality. Between the date hereof and
the Exchange Date, Seller and Speed Release shall give to each
other and the other parties to this Agreement and their
respective designees full access to the relevant premises,
property, material contracts and books of account and records of
such party during normal business hours and upon reasonable
notice. Each party will hold in complete confidence all
information so obtained and will use such information only for
the purpose of conducting its due diligence investigation. If
the Transactions are not consummated as contemplated herein, each
party will return to the others all returnable information and
data and will not disclose any such data or information to any
other person. Such obligation of confidentiality shall not
extend to any information which is shown to have been previously
known to the party to whom the information was provided, or
generally known to others engaged in the same trade or business
as the party who provided the information, or that is part of
public knowledge.
7.3. Anti-Dilution. Seller agrees that except as
contemplated by this Agreement, Seller shall not, after the date
hereof and prior to the Speed Release Option Exercise Date, issue
any additional new shares of common stock of Seller without
offering Speed Release the opportunity to purchase sufficient
shares at the same price per share offered to third parties so
that Speed Release will own nine and nine-tenths percent (9.9%)
of all issued and outstanding common stock of Seller. This anti-
dilution provision shall not apply to sales of Seller's common
stock made pursuant to a registration statement filed with the
Commission, or any shares of Seller's common stock issued
pursuant to any subscriptions, options, rights, warrants,
convertible securities or commitments identified in Schedule
6.1.2.2 hereof.
7.4. Best Efforts. Each of the parties hereto shall use
his, her or its best efforts, and shall cooperate with and assist
each other in their efforts to obtain such consents and approvals
of third parties as may be necessary to consummate the
Transactions and to permit each party to enjoy the benefits of
the Transactions without any cost beyond that contemplated by the
Closing Documents.
7.5. Brokers or Finders. Each party agrees to hold the
others harmless and to indemnify them against the claims of any
persons or entities claiming to be entitled to any brokerage
commission, finder's fee, advisory fee or like payment from such
other party based upon actions of the indemnifying party in
connection with the Transactions.
ARTICLE VIII.
CLOSING AND TERMINATION
8.1. The Closing. The Closing shall take place at the
offices of ▇▇▇▇▇ & ▇▇▇▇▇▇ LLP, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, commencing at 10:00 a.m. local time on the
Closing Date, provided that all items to be delivered at Closing
as outlined below have been provided to the other party.
8.2. Deliveries by Seller. At closing Seller will deliver
to Speed Release and Bedowitz the following items:
Page 12
8.2.1. Certified Resolutions. Copies of the resolutions,
certified by the Secretary or an Assistant Secretary of
Seller, dated on or before the date of Closing, of the Board
of Directors of Seller authorizing the execution of this
Agreement and the consummation of the transactions and other
acts contemplated by this Agreement.
8.2.2. Charter Documents. Copies of (a) the Articles of
Incorporation of Seller, (b) the Bylaws of Seller certified
by the Secretary or an Assistant Secretary of Seller, and
(c) good standing certificates and certificates of existence
from the Secretary of State of Texas, evidencing that Seller
is in existence and in good standing under the laws of the
State of Texas.
8.3. Deliveries by Speed Release. Speed Release at closing
will deliver to Seller the following items:
8.3.1. Corporate Approvals. Copies of the resolutions of
the Board of Directors of Speed Release, dated on or before
the date of closing, authorizing the execution, delivery and
performance of this Agreement, the terms of the transactions
contemplated in connection therewith, in each case certified
by the Secretary or an Assistant Secretary of each such
Purchaser.
8.3.2. Speed Release Option Purchase Price. The Speed
Release Option Purchase Price, by certified funds or check
payable to the order of the Seller.
8.4. Deliveries by Bedowitz.
8.4.1. Bedowitz Option Purchase Price. The Bedowitz
Option Purchase Price, by certified funds or check payable
to the order of TTI Industries, Inc. for the account of
Seller.
ARTICLE IX.
MISCELLANEOUS
9.1. Notices. All notices, requests, demands and other
communications hereunder shall be in writing and shall be deemed
delivered if delivered by hand, by telecopier, by courier or
mailed by certified or registered mail, postage prepaid,
addressed as follows:
If to Seller:
TTI Industries, Incorporated
ATTN: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, President
▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telephone: ▇▇▇.▇▇▇.▇▇▇▇
Fax No.:▇▇▇.▇▇▇.▇▇▇▇
with a copy to:
AMJ Resources, Inc.
ATTN: ▇▇▇▇▇▇ ▇▇▇▇▇▇
2902 D. Almedan Expressway
▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: ▇▇▇.▇▇▇.▇▇▇▇
Fax No.:▇▇▇.▇▇▇.▇▇▇▇
Page 13
If to Speed Release or ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇:
Speed Release Lock Company
ATTN: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telephone: ▇▇▇.▇▇▇.▇▇▇▇
Fax No.: ▇▇▇.▇▇▇.▇▇▇▇
with copy to:
▇▇▇▇▇ & ▇▇▇▇▇▇ LLP
ATTN: ▇▇▇▇ Held, Esq.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telephone: ▇▇▇.▇▇▇.▇▇▇▇
Fax No.: ▇▇▇.▇▇▇.▇▇▇▇
Page 14
9.2. Assignability and Parties in Interest. This Agreement
shall not be assignable by any of the parties hereto without the
consent of all other parties hereto. This Agreement shall inure
to the benefit of and be binding upon the parties hereto and
their respective successors or permitted assigns. Nothing in
this Agreement is intended to confer, expressly or by
implication, upon any other person any rights or remedies under
or by reason of this Agreement.
9.3. Expenses. Each party shall, except as otherwise
specifically provided, bear its own expenses and costs, including
the fees of any attorney retained by it, incurred in connection
with the preparation of the Closing Documents and consummation of
the Transactions.
9.4. Governing Law. This Agreement shall be governed by,
and construed and enforced in accordance with, the laws of the
State of Texas. Each of the parties hereto consents to the
personal jurisdiction and venue of the federal and state courts
in Dallas County in the State of Texas in connection with any
action arising under or brought with respect to this Agreement.
9.5. Counterparts. This Agreement may be executed as of the
same effective date in one or more counterparts, each of which
shall be deemed an original.
9.6. Headings. The headings and subheadings contained in
this Agreement are included solely for ease of reference, and are
not intended to give a full description of the contents of any
particular Section and shall not be given any weight whatever in
interpreting any provision of this Agreement.
9.7. Pronouns, Etc. Use of male, female and neuter pronouns
in the singular or plural shall be understood to include each of
the other pronouns as the context requires. The word "and"
includes the word "or". The word "or" is disjunctive but not
necessarily exclusive.
9.8. Complete Agreement. This Agreement, the Exhibits
hereto, and the documents delivered pursuant hereto or referred
to herein or therein contain the entire agreement between the
parties with respect to the Transactions and, except as provided
herein, supersede all previous negotiations, commitments and
writings.
9.9. Modifications, Amendments and Waivers. This Agreement
shall not be modified or amended except by a writing signed by
each of the parties hereto. Prior to the Closing, either Speed
Release or the Seller may amend any of the disclosure schedules
referenced herein by giving the other party notice of such
amendments. If such amended disclosures reveal material adverse
information about the party making the change, the recipient of
the information may terminate this Agreement without liability to
the other party.
9.10. Severability. If any term or other provision of this
Agreement is invalid, illegal, or incapable of being enforced by
any rule of law or public policy, all other terms and provisions
of this Agreement will nevertheless remain in full force and
effect so long as the economic or legal substance of the
Transactions is not affected in any manner adverse to any party
hereto. Upon any such determination that any term or other
provision is invalid, illegal, or incapable of being enforced,
the parties hereto will negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as
closely as possible in any acceptable manner to the end that the
Transactions are consummated to the extent possible.
9.11. Survival of Representations and Indemnifications.
(a) The representations and warranties of Bedowitz,
Seller and Speed Release contained herein or in any document
furnished pursuant hereto shall survive the Closing of the
Transactions.
(b) The Seller agrees to and does hereby indemnify,
and agrees to defend and hold Bedowitz and Speed Release and
their respective directors, officers, employees,
fiduciaries, agents and affiliates, and each other person,
if any, who controls such persons, harmless against any
claims, actions, suits, proceedings, investigations, losses,
expenses, damages, obligations, liabilities, judgments,
fines, fees, costs and expenses (including costs and
reasonable attorneys' fees) and amounts paid in settlement
of any
Page 15
pending, threatened or completed claim, action, suit,
proceeding or investigation (collectively "Loss" or
"Losses") which arise or result from or are related to (i)
any breach or failure of Seller to perform any of its
covenants or agreements set forth herein or in the Closing
Documents or (ii) the inaccuracy of any representation or
warranty made by Seller contained herein or in the Closing
Documents.
[Signature Page Follows]
Page 16
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the day and year first above written.
SELLER:
-------
TTI INDUSTRIES, INCORPORATED,
a Texas corporation
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
----------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇, President
PURCHASER:
----------
SPEED RELEASE LOCK COMPANY,
a Texas corporation
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, President
BEDOWITZ:
---------
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Page 17
EXHIBIT "A"
TO
STOCK PURCHASE AND EXCHANGE AGREEMENT
BY AND AMONG
SPEED RELEASE LOCK COMPANY,
▇▇▇▇▇ ▇▇▇▇▇▇▇▇
AND TTI INDUSTRIES, INCORPORATED
FORM OF EXERCISE NOTICE - PUT OPTION
------------------------------------
To TTI Industries, Incorporated:
The undersigned holder of the Bedowitz Option granted pursuant to
the terms of that certain Stock Purchase and Exchange Agreement
dated October __, 1999 (the "Purchase Agreement"), by and among
SPEED RELEASE LOCK COMPANY, a Texas corporation ("Speed
Release"), ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ("Bedowitz") and TTI INDUSTRIES,
INCOPRORATED a Texas corporation ("TTI") hereby exercises such
Bedowitz Option with respect to_________shares of TTI Common
Stock, par value $0.01 and hereby tenders a check in the amount
of $_________________.
EXERCISE DATE: ______________, 19__/20__
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------
EXHIBIT "B"
TO
STOCK PURCHASE AND EXCHANGE AGREEMENT
BY AND AMONG
SPEED RELEASE LOCK COMPANY,
▇▇▇▇▇ ▇▇▇▇▇▇▇▇
AND TTI INDUSTRIES, INCORPORATED
FORM OF EXERCISE NOTICE
-----------------------
To TTI Industries, Incorporated:
The undersigned holder of the Speed Release Option granted
pursuant to the terms of that certain Stock Purchase and Exchange
Agreement dated October 5, 1999 (the "Purchase Agreement"), by
and among SPEED RELEASE LOCK COMPANY, a Texas corporation ("Speed
Release") ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ("Bedowitz") and TTI INDUSTRIES,
INCOPRORATED a Texas corporation ("TTI") hereby exercises such
Speed Release Option as of the date written below. In connection
therewith, the number of shares of stock calculated in Item B.
below shall be issued by Speed Release in favor of TTI in
accordance with the Purchase Agreement and the number of shares
of stock calculated in Item D. below shall be issued by TTI in
favor of Speed Release in accordance with the Purchase Agreement:
A. Number of Shares of Common Stock, Par Value
$0.01 per share in Speed Release, validly
issued and outstanding as of Exercise Date 25,000*
B. Number of Whole Shares of Common Stock in -- -------
Speed Release which would equal ten percent
(10%) of the total amount of equity stock in
Speed Release outstanding, including the
number of shares to be issued to TTI pursuant
hereto (the "Option Shares"). Formula: 10% 2,778
(A+B) = B ---------
C. Number of Shares of Common Stock, Par Value
$0.01 per share in TTI, validly existing and
outstanding as of Exercise Date 4,073,401
---------
D. Number of Shares of Common Stock in TTI which
would equal nine and nine-tenths percent
(9.9%) of the total amount of equity stock in
TTI outstanding, including the number of 447,576
shares to be issued to Speed Release pursuant ---------
hereto (the "Exchange Shares"). Formula:
9.9% (C+D) = D
EXERCISE DATE: October 5, 1999
SPEED RELEASE LOCK COMPANY, a Texas
corporation
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Chief Executive Officer
____________________
* By agreement of the parties, this amount includes 15,000
shares of Speed Release Common Stock to be issued to
Bedowitz in exchange for the cancellation of $900,000 of
indebtedness Speed Release owes to Bedowitz.
