Exhibit 10.28
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TERMINATION AND MUTUAL RELEASE
THIS TERMINATION AND MUTUAL RELEASE (this "Release") is
executed this 28th day of August 2003 by and between Eagle Supply
Group, Inc., a Delaware corporation (the "Company") and Alpha
Capital AG ("Alpha").
WHEREAS, Alpha, Xxxxxxxxxxx XX, Bristol Investment Fund,
Ltd., Seaway Holdings Ltd., and HAA, Inc. (collectively, the
"Investors") and the Company entered into a Securities Purchase
Agreement, dated as of May 15, 2003 (the "Purchase Agreement"),
pursuant to which the Company agreed to sell, and the Investors
agreed to buy, in a private placement transaction (the "Private
Placement"), 1,090,909 shares of the Company's common stock,
$0.0001 par value per share (the "Common Stock"), and warrants
exercisable for the purchase of up to 109,091 shares of Common
Stock (the "Warrants");
WHEREAS, the Common Stock and the Warrants were to be
purchased in two equal and separate tranches;
WHEREAS, in connection with the Private Placement, the
Company and the Investors entered into a Registration Rights
Agreement, dated as of May 15, 2002 (the "Registration Rights
Agreement"), pursuant to which the Company agreed to register for
resale under the Securities Act of 1933, as amended (the
"Securities Act"), all of the shares of Common Stock issued in
the Private Placement, as well as the shares of Common Stock
issuable upon exercise of the Warrants;
WHEREAS, the first tranche of the Private Placement closed
on May 15, 2003, and under the terms of the Purchase Agreement,
the second tranche was required to close no later than September
11, 2002;
WHEREAS, the Investors advised the Company on September 12,
2002 that the Investors would not be purchasing the securities
they were required to purchase in the second tranche of the
Private Placement;
WHEREAS, Alpha wishes to transfer 102,554 of the shares of
Common Stock it acquired in the first tranche of the Private
Placement (the "Shares") to Xxxxxx Partners, LP or Xxxxxx, XX
(the "Purchaser") without registration under the Securities Act
pursuant to the exemption provided by Section 4(1) of the
Securities Act and the safe harbor provisions of Rule 144
promulgated under the Securities Act (the "Transfer"); and
WHEREAS, the Company and Alpha desire to terminate their
rights and obligations under the Purchase Agreement and
Registration Rights Agreement and provide the releases to each
other as are set forth below;
NOW, THEREFORE, in consideration of the foregoing recitals
and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and
Alpha, intending to be legally bound, hereby agree as follows:
1. Termination of Agreements. Upon receipt by the Company of
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confirmation that the Shares have been sold to the Purchaser, the
Purchase Agreement and Registration Rights Agreement
shall be deemed automatically terminated and cancelled, null
and void, and of no further force or effect.
2. Cancellation of Warrants. Alpha shall not exercise its
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Warrant. Concurrently with the execution of this Release, Alpha
shall deliver its Warrant to the Company for cancellation. Upon
the effective delivery of this Release, such Warrant will be
deemed terminated cancelled, null and void, and of no force or
effect.
3. Mutual Release.
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(a) Alpha on behalf of itself and its affiliates hereby fully
and unconditionally releases, acquits and forever discharges the
Company and its affiliates, employees, and representatives from
any and all actions, manner of actions, causes of action, claims,
obligations, demands, damages, costs, expenses, compensation or
other relief, which Alpha now has, has ever had, or which it may
hereafter have, whether known or unknown, whether in law or
equity, arising out of or relating to the Private Placement
including, but not limited to, the breach or default by the
Company of any provision, covenant, representation, warranty, or
obligation contained in the Purchase Agreement or Registration
Rights Agreement or the violation by the Company of any law,
rule, or other governmental regulation, including, but not
limited to, federal and state securities laws and state corporate
laws which may apply to the Private Placement, the Purchase
Agreement, the Registration Rights Agreement or any of the
transactions contemplated thereunder.
(b) The Company on behalf of itself and its affiliates hereby
fully and unconditionally releases, acquits and forever
discharges Alpha and its affiliates from any and all actions,
manner of actions, causes of action, claims, obligations,
demands, damages, costs, expenses, compensation or other relief,
which the Company now has, has ever had, or which it may
hereafter have, whether known or unknown, whether in law or
equity, under the Purchase Agreement or Registration Rights
Agreement; provided, however, that the release, acquittal and
discharge in this Section 3(b) shall not apply with respect to,
or be deemed to release, acquit or discharge Alpha or its
affiliates from, any of the representations, warranties,
covenants or agreements of Alpha under the Rule 144 Shareholder
Certificate executed by Alpha in connection with the Transfer and
this Release.
(c) With regard to those matters which it has released as
described in Section 3(a) or 3(b) above, neither the Company nor
Alpha shall institute a lawsuit or administrative proceeding, or
assert any claim of any nature against any person or entity
thereby released with regard to any such matters which have been
released.
4. Representations and Warranties. Each party to this Release
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hereby represents and warrants to the other that (a) it has the
requisite corporate and other authority to enter into, deliver
and fulfill its obligations under this Release and each other
document delivered by it in connection herewith, and (b) that
this Release and each other document related to the Transfer to
which it is a party that is delivered to another party hereto has
been duly authorized and executed by such party and, when
delivered to the other party, will be its legal and binding
obligation, enforceable against it in accordance with its terms.
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5. Admissions. This Release and any documents delivered
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pursuant to this Release are not an admission or concession by
either the Company or Alpha of any liability, fault, wrongdoing,
or illegal acts or omissions.
6. Press Releases. Alpha will not issue a press release or
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make any other public announcement relating to this Release
unless the Company has agreed in writing to the content of such
release or announcement.
7. General Provisions.
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(a) For purposes of this Release, an "affiliate" of a specific
entity is an individual or entity that directly or indirectly
through one or more intermediaries, controls, or is controlled
by, or is under common control with, the specific entity. The
term "control" (including the terms "controlled by" and "under
common control with") means the possession, direct or indirect,
of the power to direct or cause the direction of the management
and policies of an entity, whether through the ownership of
voting shares, by contract, or otherwise.
(b) The provisions of this Release may not be amended, modified,
supplemented, or waived, except in a writing executed by Alpha
and the Company.
(c) All notices or other communications or deliveries under this
Release shall be in writing, addressed to a party in accordance
with the information set forth by such party on its signature
page to the Purchase Agreement, or such other address as such
party may hereafter indicate in a writing to the other party,
given in accordance with this Section 7(c). All notices and other
communications shall be deemed given and effective on the
earliest of (i) the date of transmission, if such notice or
communication is delivered via facsimile on a business day, (ii)
the business day after the date of transmission, if such notice
or communication is delivered via facsimile on a day that is not
a business day, (iii) the business day following the date of
mailing, if sent by nationally recognized overnight courier
service, or (iv) upon actual receipt by the party to whom such
notice is given if given by hand delivery or mail.
(d) Alpha may not delegate any of its duties or obligations
under this Release. This Release is intended for the benefit of
and may be enforced only by Alpha and the Company and their
respective successors and assigns and is not for the benefit of,
nor may any other person or entity hereof enforce any provision.
(e) This Release may be executed in any number of counterparts,
each of which when so executed shall be deemed to be an original
and, all of which taken together shall constitute one and the
same document. In the event that any signature is delivered by
facsimile transmission, such signature shall create a valid,
binding and enforceable obligation of the party executing the
same with the same force and effect as if such facsimile
signature were the original thereof.
(f) This Release shall be governed by and interpreted in
accordance with the laws of the State of Delaware for contracts
to be wholly performed in such state and without giving effect to
the principles thereof regarding the conflict of laws that would
result in the application of the laws of any other jurisdiction.
The non-prevailing party shall
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reimburse the prevailing party for any reasonable legal fees
and disbursements incurred by the prevailing party in enforcement
of or protection of any of its rights or defense of any of its
actions under this Release.
(g) EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY
JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS
RELEASE OR THE OTHER DOCUMENTS DELIVERED IN CONNECTION HEREWITH.
(h) The headings herein are for convenience only, do not
constitute a part of this Release and shall not be deemed to
limit or affect any of the provisions hereof. The language used
in this Release will be deemed to be the language chosen by the
parties to express their mutual intent, and no rules of strict
construction will be applied against any party.
(i) Whenever possible, each provision of this Release shall be
interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Release is held to
be prohibited by or invalid under applicable law, such provision
will be ineffective only to the extent of such prohibition or
invalidity, without invalidating the remainder of this Release.
(j) No party or any of its affiliates, successors or assigns
shall challenge or seek to have determined invalid, void or
unenforceable any provision of this Release or the Release
itself. Each party understands that this Release contains the
relinquishment of legal rights and it has, as it has deemed
appropriate, sought the advice of legal counsel, which each other
party has encouraged it to seek. Each of the Company and Alpha
declares and understands that no promises, inducements, or
agreements not expressly contained in this Release have been made
to it by the other party.
(k) This Release contains the entire understanding of the
parties with respect to the subject matter hereof and supersedes
all prior agreements and understandings, oral or written, with
respect to such matters, which the parties acknowledge have been
merged into this Release.
[Rest of Page Intentionally Left Blank. Signatures on Following Page.]
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IN WITNESS WHEREOF, the parties hereto have executed this
Release as of this 28th day of August 2003.
Executed and delivered in the presence of: EAGLE SUPPLY GROUP, INC.
/s/ Xxxxxx Xxxxx By: /s/ Xxxxxxx X. Xxxxxx, CEO
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Print Name: Xxxxxx Xxxxx Name: Xxxxxxx X. Xxxxxx
Title: Chief Executive Officer
ALPHA CAPITAL AG
_____________________________________ By: /s/ Koureed Adveruceuu
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Print Name: _________________________ Name: Koureed Adveruceuu
Title: Director
