May 22, 1995
Xxx. Xxxxxx Xxxxxxxx
0000 Xxxx Xxx Xxxxx
Xxxxxxx, Xxxxx 00000
Dear Xxx. Xxxxxxxx:
This letter will set forth our agreement with respect
to the settlement of various claims among Packaging Research
Corporation, Xxxx Xxxxx'x, Inc., Xxxxxxx X. Xxxxx and you. For
convenience we shall refer to Packaging Research Corporation as
"PRC," Mama Xxxxx'x, Inc. as "MRI," Xx. Xxxxx as "Yamin" and you
as "Xxxxxxxx."
1. Recitals. MRI is a wholly owned subsidiary of
PRC. PRC, MRI and Yamin, together with parties affiliated with
Yamin, are engaged in litigation arising out of the purchase by
MRI from Yamin and such affiliates of the Mama Xxxxx'x pasta
sauce business and the former employment of Yamin by PRC. Xxxxx
is indebted to Xxxxxxxx and Xxxxxxxx has commenced litigation to
collect those debts. PRC, MRI and Yamin propose to enter into an
agreement settling all disagreements between them and providing
for comprehensive mutual releases, which settlement agreement
requires the settlement of the claims of Xxxxxxxx against Yamin.
The agreement set forth in this letter contains the terms and
conditions pursuant to which Xxxxxxxx agrees to release such
claims.
2. Release of Claims. Subject to the terms and
conditions set forth in this letter, and conditioned upon the
settlement of the claims among PRC, MRI and Yamin pursuant to
which, among other things, all shares of PRC issued for the
acquisition of the Mama Xxxxx'x business are returned to PRC and
PRC pays to Yamin and his affiliates $283,750, Xxxxxxxx hereby
agrees to dismiss with prejudice Cause No. 95-013824 pending in
the District Court in and for Xxxxxx County, Texas and release
Xxxxx, Xxxx Xxx Xxxxx, M.A. Yamin, Inc. and P.S.M.S., Inc. of any
liability to Xxxxxxxx for loans made by her to any of such
persons or entities. In return, each of such persons shall
release Xxxxxxxx from any claims they may have against her. A
copy of such settlement agreement, which includes the foregoing
releases, is attached hereto.
3. Issuance of PRC Stock to Xxxxxxxx.
a. PRC shall issue to Xxxxxxxx 100,000 shares of
the outstanding common stock of PRC. The issuance of such
shares shall not be registered under the Securities Act of
1933 and accordingly such shares shall constitute restricted
stock under the Act but Xxxxxxxx shall be entitled upon
demand to cause PRC at its expense to register such stock
for resale under the Act on Form S-3. PRC following such
registration shall provide its appropriate good faith
assistance to Xxxxxxxx in accomplishing such resale. Xxxxxxxx
acknowledges that PRC has provided to her its Form 10-K for
the year ended December 31, 1994 filed with the Securities and
Exchange Commission and its Form 10-Q for the three months
ended March 31, 1995 filed with the Commission. PRC represents
and warrants to Xxxxxxxx that the PRC stock when issued will be
fully paid, non-assessable and fee and clear of all liens and
encumbrances.
b. At any time, or from time to time, on or
after January 1, 1997 PRC shall, upon thirty days prior
notice from Xxxxxxxx, purchase all or any portion of the
100,000 PRC shares described in subparagraph a. above (to
the extent not already resold by her) at a price payable in
cash of $2.00 per share. In the event of any change in the
capitalization of PRC through stock split, stock dividend or
similar transaction causing a change in the number of such
100,000 shares, such $2.00 per share purchase price shall
also be proportionately adjusted and the repurchase
obligation shall remain in full force and effect as to all of
such shares. Notwithstanding the foregoing, Xxxxxxxx agrees
that the obligation of PRC to purchase such 100,000 shares
shall be subject to any restrictions applicable thereto of any
bank or similar loan agreement into which PRC may subsequently
enter for the purpose of financing the businesses of it and MRI.
4. Further Assurances. PRC and Xxxxxxxx shall
execute other documents and take other actions as are reasonably
necessary in the opinions of their respective counsel to carry
out the provisions and intent of the agreement set forth in this
letter.
5. Benefit. The terms and conditions of this
agreement shall bind and inure to the benefit of PRC and Xxxxxxxx
and their respective successors, assigns, heirs and personal
representatives.
6. Counterparts. This agreement may be executed in
counterparts by facsimile, each of which shall be deemed to
constitute an original.
If this letter correctly sets forth our agreement,
please sign and return the attached copy hereof.
Very truly yours,
PACKAGING RESEARCH CORPORATION
By: /s/ Xxxxxx X. Xxxxxxxxxx
President
Attachment
Agreed to this 22 day of May, 1995.
/s/ Xxxxxx X. Xxxxxxxx
Xxxxxx Xxxxxxxx
