EXHIBIT 10.2
SETTLEMENT, RELEASE AND SUBSCRIPTION AGREEMENT
THIS SETTLEMENT, RELEASE AND SUBSCRIPTION AGREEMENT is entered into as
of this 29th day of April, 1997, by and among CHAMPION FINANCIAL CORPORATION, a
Utah corporation ("Champion"), MPLC, INC., a Maryland corporation ("MPLC"),
INFOPLAN, INC., a Delaware corporation ("InfoPlan"), RISK RESOLUTION GROUP
("RRG"), XXXXX X. XXXXXXXXXXX ("X. Xxxxxxxxxxx"), XXXX XXXXXXXXXXX ("X.
Xxxxxxxxxxx"), XXXXXXXX X. XXXXX, INCORPORATED, a Pennsylvania corporation d/b/a
XXXXX, Incorporated ("XXXXX"), XX. XXXXXXXX X. XXXXX ("X. Xxxxx"), and XXXXXX X.
XXXXX, XX. ("X. Xxxxx"). (Champion, MPLC, InfoPlan, RRG, X. Xxxxxxxxxxx and X.
Xxxxxxxxxxx shall be collectively referred to herein as the "Champion Parties",
and XXXXX, X. Xxxxx and X. Xxxxx shall be collectively referred to herein as the
"Xxxxx Parties".)
BACKGROUND
Certain of the parties hereto entered into a certain Stock Acquisition
Agreement, dated as of August 30, 1996 (the "Stock Acquisition Agreement"),
which amended, restated, superseded and replaced a certain Acquisition
Agreement, dated as of December 4, 1995 as the same was previously amended and
restated by an Amended and Restated Acquisition Agreement and a Second Amended
and Restated Acquisition (the Stock Acquisition Agreement, any amendments
thereto and all prior agreements which were amended by the Stock Acquisition
Agreement together shall be referred to herein as the "Prior Agreement").
In the expectation of closing under the Prior Agreement, the Champion
Parties advanced to XXXXX an aggregate of $309,625.96 (the "Advance"). The Prior
Agreement was never consummated and MPLC and XXXXX subsequently entered into
negotiations for the issuance and sale to MPLC of shares of the common stock, no
par value, of XXXXX (the "Common Stock").
Certain disputes have arisen between and among the parties hereto
regarding the Advance and the proposed issuance of shares of Common Stock of
XXXXX. At this time, the parties hereto wish to compromise and settle all claims
which have been made or could have been made with respect to the foregoing and
all other claims relating thereto.
NOW, THEREFORE, intending to be legally bound hereby, the parties
hereto agree as follows:
1. SUBSCRIPTION FOR XXXXX SHARES. MPLC hereby subscribes for 338,476
shares of the Common Stock of XXXXX (the "Shares"), for an aggregate purchase
price equal to the amount of the Advance. Such consideration shall be paid with
the Advance. Following the issuance of the Shares to MPLC, MPLC shall own 12.36`
of the shares of the common stock of XXXXX then issued and outstanding. (As used
in this Agreement, the term "Shares" shall mean
the shares issued to MPLC under this Section 1 plus any Make-Up Shares issued to
MPLC under Section 5 below.)
2. ISSUANCE OF STOCK CERTIFICATE. Upon the execution of this Agreement
by all of the parties hereto, XXXXX shall issue to MPLC a stock certificate (the
"Certificate") representing the Shares, such Certificate to be held by Fox,
Rothschild, O'Brien & Xxxxxxx, counsel to XXXXX (the "Agent"), pursuant to the
terms of Section 4 below. Upon issuance, the Shares shall be deemed fully paid
and non-assessable.
3. REDEMPTION.
(a) Between the date of this Agreement and December 31, 1997,
XXXXX shall have the right to redeem the Shares by paying the aggregate sum of
$324,000 (the "Redemption Price") to MPLC. XXXXX may redeem the Shares in
installments by paying a pro rata portion of the Redemption Price to redeem a
pro rata portion of the Shares then outstanding.
(b) Because of the Anti-Dilution Rights granted to MPLC under
Section 5 below, a precise per Share Redemption Price cannot be fixed. If XXXXX
redeems any of the Shares before MPLC exercises any of its Anti-Dilution Rights
hereunder, then the Redemption Price per Share shall be $0.96. If XXXXX redeems
any of the Shares after such time as MPLC exercises its Anti-Dilution Rights
hereunder, then the Redemption Price per Share shall be adjusted on a pro rata
basis, subject to the mutual approval of XXXXX and MPLC, such approval not to be
unreasonably withheld or delayed.
(c) Upon the payment of the Redemption Price, or any portion
thereof, to MPLC, all of MPLC's rights in the Shares so redeemed shall terminate
and the Certificate shall be returned to XXXXX. If less than all of the Shares
are so redeemed, XXXXX shall promptly issue a new Certificate to MPLC. The
Certificate shall bear a legend (as set forth in Section 11 below) evidencing,
among other things, XXXXX' redemption right. If all of the Shares have not been
redeemed prior to January 1, 1998, then XXXXX shall, upon receipt of a written
request to that effect from MPLC and delivery of the Certificate to XXXXX, issue
a new stock certificate for the same number of Shares without such legend.
4. Certificates to be Held by Agent. For a period of 90 days from date
on which this Agreement is executed by all of the parties hereto, the
Certificate shall be held by the Agent. If any portion of the Redemption Price
is paid during such 90-day period or delivered to MPLC by the Agent if the
Redemption Price is not paid during such 90-day period. The Agent shall hold and
retain the Certificate (or any replacement Certificate) until such time as the
entire Purchase Price has been paid to MPLC, at which time the Certificate shall
be returned to XXXXX; provided, however, that if XXXXX has not redeemed all of
the Shares during such 90-day period, then the Certificate (or any replacement
Certificate) shall be delivered to MPLC by the Agent.
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5. RIGHT TO RECEIVE ADDITIONAL SHARES.
(a) Notwithstanding any other provision of this Agreement to
the contrary, XXXXX agrees that if it: (i) issues any shares of its capital
stock (an "Issuance"); and (ii) such Issuance would result in the ratio of the
Shares to the "Outstanding Shares" (as hereinafter defined) prior to such
Issuance (the "Old Percentage") being greater than the ratio of the Shares to
the Outstanding Shares after such Issuance (the "New Percentage"); then (iii)
MPLC shall have the right to purchase from XXXXX, at a price of $.01 per share,
such number of shares of the Common Stock of XXXXX as is determined by the
following formula (the "Make-Up Shares"):
MS = (OS + IS)0% - ES
----------------
1-0`
in which:
MS = The number of Make-Up Shares of XXXXX that MPLC
would be entitled to purchase under this provision;
0S = The aggregate number of shares of Common Stock of
XXXXX outstanding immediately prior to the issuance
of shares in the Issuance (the "Outstanding Shares");
IS = The number of shares of Common Stock of XXXXX
proposed to be issued in such Issuance;
0% = The Old Percentage;
ES = The number of Shares held by MPLC immediately prior
to such Issuance; and
1-0% = 0ne minus the Old Percentage.
For example, if there were 2,738,476 Outstanding Shares, MPLC held 338,476
Shares (or 12.36 of the Outstanding Shares), and XXXXX were to propose to issue
100,000 additional shares of Common Stock in connection with an Issuance, then
MPLC would be entitled to purchase and additional 14,103 shares of Common Stock.
In this example:
0S = 2,738,476;
IS = 100,000;
0 = .1236;
ES = 338,476; and
1-0% = 1-.1236
= .8764
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and, therefore:
MS = (2,738,476 + 100,000).1236 - 338,476
-----------------------------------------
.8764
and the number of the Make-Up Shares (or MS) would equal 14,103. If, in the
foregoing example, MPLC were to exercise its right to purchase an additional
14,103 shares of Common Stock, then MPLC would own 352,579 Shares.
In that event:
New Percentage = 352,579/2,852,579 = 12.36%.
(b) If XXXXX proposes to issue shares of its Common Stock in
connection with an Issuance, it shall notify MPLC of the Issuance in writing and
MPLC shall have 30 days from the date of such notice in which to notify XXXXX in
writing whether it desires to participate in such Issuance under the terms of
this Section. No Make-Up Shares shall be issued if MPLC declines to participate
in any particular Issuance or fails to respond to XXXXX' notice within the
required time period. In no event shall XXXXX be required to issue any
fractional shares.
(c) The rights set forth in this Section 5 (the "Anti-Dilution
Rights"): (i) shall apply only to the Shares issued under Section 1 above (and
to any shares issued in connection with any subsequent stock splits, reverse
stock splits, stock dividends or similar transactions as and to the extent such
transactions affect the Shares); (ii) shall expire and terminate immediately
following the closing of a public offering of XXXXX'x capital stock and shall
not apply to any shares sold in such public offering; and (iii) shall apply only
with respect to, and only until, XXXXX has issued an additional 1,105,600 shares
of its Common Stock to one or more third parties (in one or more transactions),
at which time such Anti-Dilution Rights shall expire and terminate. If MPLC were
to exercise its Anti-Dilution Rights with respect to all such 1,105,600 shares
of Common Stock, MPLC would own an aggregate of 494,400 shares of the common
stock of XXXXX.
6. MUTUAL RELEASES. Subject to and conditioned on the delivery of the
Certificate representing the Shares to the Agent in accordance with Section 4
above, and to the accuracy and correctness of the representations, warranties
and covenants set forth in this Agreement, and in consideration thereof, and
subject to the provisions of Sections 7 and 8 below
(a) RELEASE OF XXXXX. Each of the Champion Parties,
voluntarily and knowingly, for itself as well as their respective officers,
directors, employees, agents, affiliates, successors and assigns (collectively,
the "Champion Releasors"), do hereby remise, release and forever discharge each
of the Xxxxx Parties as well as their respective officers, directors, employees,
agents, affiliates, successors and assigns (collectively, the "Xxxxx
Releasees"), from any and all manner of actions and causes of action, suits,
debts, dues, accounts, sums of money, bonds, bills, covenants, contracts,
controversies, agreements, promises, damages, liabilities, judgments,
executions, claims and demands whatsoever (collectively, the "Claims"), known
and unknown, foreseen and unforeseen, which any of the Champion
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Parties or any of the Champion Releasors, or anyone claiming through any of
them, ever had, now has or might ever have, for, upon, relating to, by reason of
or arising in any way from the Prior Agreement, the Advance, any of the events
referenced in Sections 17, 18 and/or 20 below that occurred prior to the date
hereof, and any of the events giving rise to and all claims that could be or
could have been asserted in connection with any of the foregoing. Each of the
Champion Parties intends that the foregoing release shall be complete and shall
not be subject to any claim of mistake of fact, and that it expresses a FULL AND
COMPLETE SETTLEMENT, and, regardless of the adequacy or inadequacy in the
consideration paid, the foregoing release is intended to avoid litigation and
settle a disputed claim, and to be final and complete. Each of the Champion
Parties further agrees that there is absolutely no agreement or reservation not
clearly expressed herein, that the consideration stated herein (if any) is all
that is ever to be paid by any of the Xxxxx Parties or any of the Xxxxx
Releasees, that the consideration referred to herein is in compromise and full
settlement of disputed claims and that, subject to Sections 7 and 8 below, the
execution hereof is with full knowledge that this release covers all possible
claims.
(b) RELEASE OF THE CHAMPION PARTIES. Each of the Xxxxx
Parties, voluntarily and knowingly, for itself as well as their respective
officers, directors, employees, agents, affiliates, successors and assigns
(collectively, the "Xxxxx Releasors"), does hereby remise, release and forever
discharge each of the Champion Parties as well as their respective officers,
directors, employees, agents, affiliates, successors and assigns (collectively,
the "Champion Releasees"), from any and all manner of actions and causes of
action, suits, debts, dues, accounts, sums of money, bonds, bills, covenants,
contracts, controversies, agreements, promises, damages, liabilities, judgments,
executions, claims and demands whatsoever (collectively, the "Claims"), known
and unknown, foreseen and unforeseen, which any of the Xxxxx Parties or any of
the Xxxxx Releasors, or anyone claiming through any of them, ever had, now has
or might ever have, for, upon, relating to, by reason of or arising in any way
from the Prior Agreement, the Advance, any of the transactions described in
Sections 17, 18 and/or 20 below, and any of the events giving rise to and all
claims that could be or could have been asserted in connection with any of the
foregoing. Each of the Xxxxx Parties intends that the foregoing release shall be
complete and shall not be subject to any claim of mistake of fact, and that it
expresses a FULL AND COMPLETE SETTLEMENT, and, regardless of the adequacy or
inadequacy in the consideration paid, the foregoing release is intended to avoid
arbitration and litigation and settle a disputed claim, and to be final and
complete. Each of the Xxxxx Parties further agrees that there is absolutely no
agreement or reservation not clearly expressed herein, that the consideration
stated herein is all that is ever to be paid by any of the Champion Parties or
any of the Champion Releasees, that the consideration referred to herein is in
compromise and full settlement of disputed claims and that, subject to Sections
7 and 8 below, the execution hereof is with full knowledge that this release
covers all possible claims.
7. CLAIMS NOT RELEASED. Notwithstanding any other provision of this
Agreement to the contrary, the parties acknowledge and agree that the foregoing
releases are not intended to cover or include, and do not cover or include any
claim for breach or violation of any representation, warranty or covenant
contained in or made in this Agreement.
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8. COVENANT NOT TO XXX. Subject to and conditioned on the delivery of a
Certificate representing the Shares to the Agent in accordance with Section 4
above, and to the accuracy and correctness of the representations, warranties
and covenants set forth in this Agreement, and in consideration thereof, each of
the parties hereto, for itself and its officers, directors, employees, agents,
affiliates, successors and assigns, hereby covenants not to xxx or institute any
action of any kind in or before any court or judicial, quasi-judicial or
governmental body of any kind whatsoever with respect to, or otherwise assert,
directly or indirectly, any Claim released by it herein.
9. RATIFICATION BY XXXXX. The Board of Directors and the Shareholders
of XXXXX have adopted appropriate resolutions authorizing XXXXX to enter into
this Agreement and to consummate the transactions contemplated hereby, as
evidenced by the duly executed Action by Unanimous Consent in Writing of the
Board of Directors of XXXXX, a copy of which has been provided to the Champion
Parties.
10. RATIFICATION BY THE CHAMPION PARTIES. The Boards of Directors of
each of Champion, InfoPlan and MPLC has adopted appropriate resolutions
authorizing each such party to enter into this Agreement and to consummate the
transactions contemplated hereby, as evidenced by duly executed Actions by
Unanimous Consent in Writing of the Board of Directors of each of the Champion
Parties, copies of which have been provided to the Xxxxx Parties.
11. LEGEND ON STOCK CERTIFICATES. All certificates representing shares
of Common Stock now or hereafter issued by XXXXX to MPLC or to any of its
permitted assignees or designees shall be subject to the terms of this Agreement
and shall bear the following legends:
"The shares evidenced by this certificate are subject to the
terms of a Settlement, Release and Subscription Agreement,
dated April 29, 1997, entered into by and among the Company,
MPLC, Inc. and certain other parties (the "Settlement
Agreement"). The Settlement Agreement imposes certain
restrictions on the transferability of the shares evidenced
hereby, including a redemption right, a right of first refusal
and certain other restrictive covenants. In addition, the
shares evidenced by this certificate have not been registered
under the Securities Act of 1933, as amended (the "Act"), or
the securities laws of any state and may be offered, sold and
transferred only if so registered or if the Company has been
furnished with an opinion of counsel, reasonably satisfactory
to the Company, to the effect that registration is not
required under the Act or such state securities laws and all
requirements of the Act and all such state securities laws
applicable to the sale or transfer have been complied with."
12. REPRESENTATIONS AND WARRANTIES OF THE CHAMPION PARTIES. Each of the
Champion Parties hereby represents and warrants, jointly and severally, to each
of the Xxxxx Parties as follows:
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(a) It has not sold, hypothecated, mortgaged, assigned,
encumbered, transferred or otherwise disposed of any claim that it has or had
against any of the Xxxxx Parties, or any Claim that is being released by it
pursuant to the terms of this Agreement.
(b) In deciding to acquire the Shares, MPLC has relied
exclusively upon its own investigation and has not relied upon any offering
memoranda or other similar instruments prepared by XXXXX, any officer, director
or stockholder of XXXXX, or any third party. Each of the Champion Parties
acknowledges that, except as set forth in this Agreement, no representations or
warranties have been made to any of them, or to their respective advisors or
representatives, by XXXXX or others with respect to the business of XXXXX, its
financial condition or otherwise.
(c) The Shares are being acquired by MPLC solely for MPLC's
own account, for investment, with no intention of selling or making a
distribution thereof within the meaning of the Securities Act of 1933, as
amended (the "Act"). The Shares shall not be sold or transferred by MPLC in
violation of the Act or any state or other jurisdiction's securities laws, and
the financial condition of MPLC is such that this investment can be made on a
long-term basis. MPLC is aware that the Shares have not been registered under
the Act or any state or other jurisdiction's securities laws, that the Shares
must be held indefinitely unless subsequently registered or an exemption from
such registration is available and that XXXXX is under no obligation to register
such Shares under the Act or any state or other jurisdiction's securities laws.
MPLC is aware that an exemption from the registration requirements of the Act
pursuant to Rule 144 promulgated thereunder is not currently available, and that
XXXXX has not undertaken to take or refrain from taking any action in order to
make available an exemption from the registration requirements pursuant to Rule
144 or any successor rule for resale of the Shares. MPLC further acknowledges
that there is currently no market for the purchase and sale of such Shares and
there is no assurance that such market shall develop or, if developed, that it
shall be sustained.
(d) MPLC confirms that XXXXX has made available to MPLC, or to
the representatives of MPLC, the opportunity to ask questions and to acquire
such additional information about the business and financial condition of XXXXX
as MPLC has requested. MPLC acknowledges that it is familiar with the operations
of XXXXX, with its products and services and with its financial condition and
prospects.
(e) MPLC understands and has taken cognizance of all risk
factors related to the purchase of the Common Stock, and its knowledge and
experience, and/or that of its authorized representatives, in financial and
business matters is such that it is, and/or its authorized representatives are,
capable of evaluating the business condition, financial or otherwise, of XXXXX.
(f) Each of Champion, InfoPlan and MPLC is a corporation duly
organized, validly existing and in good standing under the laws of its state of
incorporation. The principal place of business of MPLC is located in the State
of Maryland.
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(g) Each of Champion, InfoPlan and MPLC has all necessary
corporate power to make, execute, deliver and perform this Agreement and all
other instruments and documents required or contemplated hereunder, and to take
all steps and to do all things necessary and appropriate to consummate the
transactions contemplated herein. This Agreement has been duly authorized,
executed and delivered by each of Champion, InfoPlan and MPLC and is a valid and
binding obligation of each of Champion, InfoPlan and MPLC, enforceable against
each of them in accordance with its terms.
(h) RRG has all necessary partnership power to enter into this
Agreement and to make, execute, deliver and perform this Agreement and all other
instruments and documents required or contemplated hereunder, and to take all
steps and to do all things necessary and appropriate to consummate the
transactions contemplated herein. This Agreement has been duly authorized,
executed and delivered by RRG and is a valid and binding obligation of RRG,
enforceable against it in accordance with its terms.
(i) X. Xxxxxxxxxxx and X. Xxxxxxxxxxx (together, the
"Xxxxxxxxxxx Principals") have the full personal power, right and authority to
make, execute, deliver and perform this Agreement and all other instruments and
documents required or contemplated hereunder, and to take all steps and to do
all things necessary and appropriate to consummate the transactions contemplated
herein. This Agreement has been duly authorized, executed and delivered by each
of the Xxxxxxxxxxx Principals and is a valid and binding obligation of each of
the Xxxxxxxxxxx Principals, enforceable against each of them in accordance with
its terms.
(j) The execution, delivery and performance of this Agreement
shall not result in (i) the breach of or default under, with or without the
giving of notice or passage of time, or both, any mortgage, indenture, contract,
agreement or other arrangement to which any of the Champion Parties is a party
or by which any of them or their respective properties may be bound, (ii) the
violation of any law, statute, rule, decree, order, judgment or regulation
binding upon any of the Champion Parties, or (iii) (except as contemplated by
this Agreement) the creation or imposition of any lien or encumbrance on any of
the properties or assets of any of the Champion Parties.
(k) There is no claim, action, suit, proceeding, arbitration
or investigation pending or, to the knowledge of any of the Champion Parties,
threatened against any of the Champion Parties or any affiliate of any of the
Champion Parties, by or before any federal, state, municipal, foreign or other
court or governmental or regulatory body, that: (i) seeks to restrain or enjoin
the consummation of the transactions contemplated by this Agreement; or (ii)
could reasonably be expected to have a material adverse effect on the ability of
any of the Champion Parties to consummate the transactions contemplated by this
Agreement. None of the Champion Parties and none of their affiliates is bound by
or subject to any existing order, judgment, injunction, award or decree of any
governmental or regulatory body which (1) restrains or enjoins the consummation
of the transactions contemplated by this Agreement; or (2) could reasonably be
expected to have a material adverse effect on the ability of any of the Champion
Parties to consummate the transactions contemplated by this Agreement.
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(1) MPLC can bear the economic risks of this investment and
can afford a complete loss of its investment in the Shares. MPLC has no present
or anticipated need for liquidity of its investment in XXXXX.
(m) MPLC understands and acknowledges that XXXXX has not made
and cannot make any representation or warranty as to the future operation or
financial forecast of XXXXX, that any such discussion that any of the Champion
Parties may have had WITH XXXXX OR its representative or agents may be incorrect
and may not be realized, that any such estimates or forecasts are based on
assumptions which may or may not occur, that no assurance can be given that the
actual results of operations or financial condition of XXXXX shall conform to
any such estimates or forecasts, and that therefore no reliance can be placed
thereon
(n) Each of the Champion Parties understands the meaning and
legal consequences of the representations and warranties set forth in this
Agreement. Each of the Champion Parties certifies that each of the
representations and warranties set forth in this Section 12 is true and correct
as of the date hereof and shall survive the execution of this Agreement.
(o) No broker or finder has acted directly or indirectly for
any of the Champion Parties, nor has any of the Champion Parties incurred any
obligation to pay any brokerage fee, finder's fee or other commission in
connection with the transactions contemplated by this Agreement.
13. REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE XXXXX PARTIES.
Each of the Xxxxx Parties hereby represents and warrants, jointly and severally,
to each of the Champion Parties as follows:
(a) It has not sold, hypothecated, mortgaged, assigned,
encumbered, transferred or otherwise disposed of any claim that it has or had
against any of the Champion Parties, or any Claim that is being released by it
pursuant to the terms of this Agreement.
(b) XXXXX is a corporation duly organized, validly existing
and in good standing under the laws of the Commonwealth of Pennsylvania with
full corporate power and authority to enter into this Agreement and to
consummate the transactions contemplated hereby. As of the date hereof, XXXXX'x
authorized capital stock consists of Four Million (4,000,000) shares of Common
Stock, of which Two Million Four Hundred Thousand (2,400,000) shares are issued
and outstanding.
(c) XXXXX has full corporate power and authority to execute,
deliver and perform this Agreement and all other instruments and documents
required or contemplated hereunder, and to take all steps and to do all things
necessary and appropriate to consummate the transactions contemplated herein.
This Agreement has been duly authorized, executed and delivered by XXXXX and is
a valid and binding obligation of XXXXX, enforceable against it in accordance
with its terms.
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(d) X. Xxxxx and X. Xxxxx (together, the "Xxxxx Principals")
have the full personal power, right and authority to make, execute, deliver and
perform this Agreement and all other instruments and documents required or
contemplated hereunder, and to take all steps and to do all things necessary and
appropriate to consummate the transactions contemplated herein. This Agreement
has been duly authorized, executed and delivered by each of the Xxxxx Principals
and is a valid and binding obligation of each of the Xxxxx Principals,
enforceable against each of them in accordance with its terms.
(e) The execution, delivery and performance of this Agreement
shall not result in (i) the breach of or default under, with or without the
giving of notice or passage of time, or both, any mortgage, indenture, contract,
agreement or other arrangement to which any of the Xxxxx Parties is a party or
by which any of them or their respective properties may be bound, (ii) the
violation of any law, statute, rule, decree, order, judgment or regulation
binding upon any of the Xxxxx Parties, or (iii) (except as contemplated by this
Agreement) the creation or imposition of any lien or encumbrance on any of the
properties or assets of any of the Xxxxx Parties.
(f) This Agreement and all transactions contemplated hereby
have been duly authorized by all necessary corporate action on the part of XXXXX
and constitute a legal, valid and binding obligation of XXXXX enforceable
against it in accordance with its terms.
(g) The Shares, when paid for by and issued to MPLC in
accordance with the terms of this Agreement, shall be duly authorized, issued
and fully paid and non-assessable.
14. ISSUANCE OF STOCK.
(a) XXXXX agrees that, between the date hereof and the
Expiration Date (the hereinafter defined), XXXXX shall not issue any shares of
its capital stock: (i) to X. Xxxxx, any member of X. Xxxxx' immediate family or
an entity controlled by or under common control with X. Xxxxx, any such family
member or other such entity issued at a price less than $0.625 per share for
anything other than cash; and (ii) to anyone else at a price less than $0.625
per share, with the consideration therefor taking such form as the Board of
Directors of XXXXX may xxxx appropriate.
(b) As used herein, the term "Expiration Date" shall mean the
earlier of: (i) the date on which XXXXX closes on a public offering of its
Common Stock, with the foregoing restrictions not applying to the shares sold in
such public offering; or (ii) the date on which XXXXX redeems the Shares in
accordance with Section 3 above.
15. RIGHT OF FIRST REFUSAL.
(a) MPLC agrees that it shall not sell, assign, transfer,
give, donate or otherwise dispose of, or pledge, deposit or otherwise encumber,
in any way or manner whatsoever, whether voluntarily or involuntarily, any of
the Shares now or hereafter owned (of record or beneficially) by it except as
expressly provided in this Agreement.
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(b) In no event shall MPLC sell, assign, transfer, give,
donate or otherwise dispose of, or pledge, deposit or otherwise encumber, in any
way or manner whatsoever, whether voluntarily or involuntarily, any or all of
the Shares to any other party prior to December 31, 1997. If, after such date,
MPLC desires to sell or otherwise dispose of any or all of the Shares that it
may own, then MPLC shall first obtain a bona fide written offer which it desires
to accept (the "Offer") to purchase any or all of such Shares. The Offer shall
set forth its date, the proposed price per Share, and the other terms and
conditions upon which the purchase is proposed to be made, as well as the name
and address of the prospective purchaser or purchasers. MPLC shall transmit
copies of the Offer to XXXXX and to the Xxxxx Principals within seven business
days after its receipt of the Offer.
(c) Transmittal of the Offer to XXXXX and the Xxxxx Principals
by MPLC shall constitute an offer by MPLC to sell any or all of the Shares
proposed to be purchased therein to XXXXX and/or the Xxxxx Principals, in such
percentages as they may agree between themselves, at the price per share and
upon the other terms set forth in the Offer. For a period of 30 days after the
delivery of the Offer to XXXXX and the Xxxxx Principals (the "Offer Period"),
XXXXX and/or the Xxxxx Principals shall have the option, exercisable by written
notice to MPLC, to accept MPLC's offer to purchase any or all of the Shares
proposed to be sold therein.
(d) If, at the end of such 30-day Offer Period, XXXXX and/or
the Xxxxx Principals have agreed to purchase any of the Shares so offered, then
MPLC shall sell such Shares to XXXXX and/or the Xxxxx Principals at the price
per Share and upon the terms set forth in the Offer, settlement on such sale to
be made on a mutually agreeable date within 60 days thereafter.
(e) If, at the end of the 30-day Offer Period, XXXXX and/or
the Xxxxx Principals have not agreed to purchase any of the Shares so offered,
then MPLC shall have the right, for a period of 90 days thereafter to sell the
balance of the Shares proposed to be sold in the Offer to the prospective
purchaser at the price per Share and upon the other terms and conditions set
forth in the Offer. If such Shares are not so sold within such 90 day period,
then MPLC shall not be permitted to sell such Shares without again complying
with this Section 15.
16. RESTRICTIONS ON RESALE. Notwithstanding any other term of this
Agreement, MPLC agrees that, for a period of at least five years from the date
hereof, it shall not, directly or indirectly, sell any of the Shares to any
developer, manufacturer or distributor of pharmaceuticals or medical devices,
and that, following the expiration of the foregoing restriction, the right of
first refusal set forth in Section 15 above shall apply to any such sale.
17. REAL ESTATE LEASE. XXXXX and Champion shall cooperate to remove
Champion from the lease for the property located at 000 Xxxxx Xxxxx Xxxxxx,
Xxxxxxxx, Xxxxxxxxxxxx (the "Premises"), as promptly as reasonably practicable
after the date hereof, including without limitation by signing such additional
documents as the landlord may request.
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18. FURNITURE AND EQUIPMENT. Following the execution of this Agreement,
XXXXX may sell or otherwise dispose of the furniture and equipment currently
being stored for Champion (or any of the other Champion Parties) at the
Premises, including without limitation the Merlin telephone system stored at
that location. XXXXX shall have no obligation whatsoever to account to any of
the Champion Parties with respect thereto.
19. FINANCIAL INFORMATION. Until the earlier of: (a) the date on which
XXXXX redeems the Shares in accordance with Section 3 above; (b) the date on
which MPLC ceases to own any of the Shares; or (c) the date on which XXXXX
closes on a public offering of its Common Stock; XXXXX shall provide the
Champion Parties with a quarterly unaudited report, on a summary basis, setting
forth sales made by XXXXX during the preceding quarter and XXXXX' accounts
payable and accounts receivable outstanding as of the end of such quarter.
20. LEGAL FEES. The parties acknowledge that, in connection with
certain services rendered on behalf of XXXXX by Xxxxxx X. Xxxxxxx, Xx., Esquire
("Xxxxxxx"), Xxxxxxx rendered an invoice dated February 4, 1997 in the aggregate
amount of $2,774.10. XXXXX believes that it has been overbilled by Xxxxxxx for
services rendered. XXXXX agrees that, upon the execution of this Agreement by
all of the parties hereto, XXXXX shall attempt to settle its obligation to
Xxxxxxx for a sum less than that billed. InfoPlan agrees that it shall promptly
pay one-half of the settlement figure negotiated by XXXXX.
21. CONFIDENTIAL INFORMATION. Promptly following the execution of this
Agreement, the Champion Parties shall, at their own expense, return to XXXXX all
confidential and proprietary materials of or relating to XXXXX in their
possession or under their control, including without limitation all copies of
"The XXXXX Directory of New Medical Technologies' Status" and "The XXXXX
Directory of Legal Precedent Reports".
22. ACTIONS BY THE AGENT.
(a) The Agent shall not be liable for any act taken or omitted
by it under this Agreement except for its gross negligence or willful
misconduct. The Agent shall be fully protected in relying upon any instruction,
notice, demand, certificate or document which it in good faith believes to be
genuine. The Agent may consult with legal counsel of its choosing at the expense
of the parties hereto as to the construction to any of the provisions of this
Agreement, and the Agent shall be fully protected in acting in good faith in
accordance with any such advice. The Agent shall not incur any liability if by
reason of any act or provision of any present future law or regulation or
governmental authority, or by reason of any act of God or war or other
circumstances beyond its control, the Agent shall be prevented or delayed in
performing any act required of it under this Agreement.
(b) The Agent's duties and responsibilities shall be limited
to those expressly set forth herein. This Agreement is for the exclusive benefit
of the parties hereto and their respective successors hereunder, and shall not
be deemed to give any legal or equitable right, remedy or claim to any other
entity or person whatsoever. If the Certificate that is subject to this
Agreement is at any time attached or levied upon, or in case the transfer or
delivery of such
12
Certificate shall be stayed or enjoined, or in the case of any other legal
process or judicial order affecting such Certificate, then the Agent is
authorized to comply with any such order in any manner as it or legal counsel of
its own choosing deems appropriate. If the Agent complies with any such process,
order, writ, judgment or decree, it shall not be liable to any of the parties
hereto or to any other person or entity even though such order or process may be
subsequently modified or vacated or otherwise determined to have been without
legal force or effect.
(c) If a dispute or conflicting claim arises by or among the
parties hereto and/or any other person or entity with respect to the
Certificate, then the Agent may: (i) attempt to mediate a resolution of such
dispute between the parties, but need not do so; (ii) commence an interpleader
action or seek other judicial relief or orders as it may deem necessary;
provided, however, that, in order to provide the parties with an opportunity to
resolve such dispute among themselves, the Agent shall not institute any legal
action to resolve any such dispute for at least 30 days after the date on which
the Agent has been notified in writing of the existence of such dispute (unless
the parties otherwise agree); and/or (iii) refuse to act until either the
conflicting or adverse claims or demands shall have been finally determined by a
court of competent jurisdiction or settled by agreement between the parties as
evidenced in a writing satisfactory to the Agent or the Agent shall have
received security or an indemnity satisfactory to the Agent sufficient to hold
it harmless from and against any and all loss, liability or expense which it
might incur by reason of its acting. The Agent shall not be or become liable in
any way to the other parties hereto for its failure or refusal to comply with
any conflicting claims, demands or instructions.
23. NO DISQUALIFICATION. The parties agree that neither this Agreement,
nor any provision contained herein, nor any action taken by the Agent hereunder
shall disqualify Fox, Rothschild, O'Brien & Xxxxxxx or any lawyer who is a
partner or associate of such firm, including without limitation Tristram R.
Fall, III, Esquire, from representing XXXXX or any of its officers, directors,
employees, shareholders or affiliates in connection with the making or
performance of this Agreement or any other agreement that may be entered into
between the parties, or in connection with any dispute that may arise under or
result from this Agreement or any other agreement that may be entered into
between the parties
24. PRESS RELEASES. Before any party hereto issues or releases,
directly or indirectly, any press release, marketing material or other
communication to or for the media, and before any party hereto files any
disclosure with the Securities and Exchange Commission, any state securities
commission and/or any other federal, state or local agency or authority, which,
in any such case, concerns or relates to the subject matter of this Agreement,
such party shall be required to provide a copy of such materials to all of the
other parties hereto at least ten days in advance of the proposed date of issue,
release or filing. No such material shall be issued, released or filed without
the prior written consent of all of the other parties hereto, such consent not
to be unreasonably withheld.
25. NO ADDITIONAL REPRESENTATIONS. Each party acknowledges that, except
as expressly set forth in this Agreement, neither party is making any
representation or warranty to the other concerning the subject matter hereof.
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26. MISCELLANEOUS.
(a) ASSIGNMENT; SUCCESSORS AND ASSIGNS. No party hereto may
assign or transfer this Agreement or any of its rights or obligations set forth
herein without the prior written consent of the other parties hereto. This
Agreement, and all rights and powers granted hereby, shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
permitted assigns.
(b) WAIVERS; AMENDMENTS. Any delay of forbearance by any party
in exercising any right hereunder shall not be deemed a waiver of that right. No
modification or amendment of this Agreement or waiver of any provision of this
Agreement shall be valid unless in writing and signed by all of the parties
hereto. No such modification or amendment shall, without the prior written
consent of the Agent, alter the provisions of this Agreement relating to the
rights, duties or obligations of the Agent.
(c) SEVERABILITY. The provisions of this Agreement are
independent of and severable from each other. No provision shall be affected or
rendered invalid or unenforceable by virtue of the fact that for any reason any
one or more of the other provisions hereof may be invalid or unenforceable in
whole or in part.
(d) HEADINGS. The titles of the Sections and subsections of
this Agreement are for convenience only and are not in any way intended to limit
or amplify the terms or conditions of this Agreement.
(e) COUNTERPARTS. This Agreement 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 when taken together shall constitute one Agreement.
This Agreement shall become binding when one or more counterparts hereof,
individually or taken together, shall bear the signatures of all of the parties
reflected hereon as the signatories hereto.
(f) NOTICES. All notices, requests, demands and other
communications required or permitted to be made hereunder shall be in writing
and shall be deemed duly given if hand delivered against a signed receipt
therefor, sent by registered mail, return receipt requested, first class postage
prepaid, or sent by nationally recognized overnight delivery service, in each
case addressed to the party entitled to receive the same at the address
specified below:
(i) If to any of the Champion Parties, then to:
Xxxxxxx X. Xxxxxx,
Chief Financial Officer
Champion Financial Corporation
0000 Xxxx Xxx Xxxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
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With a copy, sent in the manner prescribed
above, to:
Zirk Xxxxxxxxxxx, President
InfoPlan, Inc.
00 Xxxxxxxx Xxxxx
Xxxxxxxxxxxx, XX 00000
(ii) If to any of the Xxxxx Parties, then to:
Xxxxxxxx X. Xxxxx, President
XXXXX, Incorporated
000 X. Xxxxx Xxxxxx
Xxxxxxxx, XX 00000
With a copy, sent in the manner prescribed
above, to:
Tristram R. Fall, III, Esquire
Fox, Rothschild, O'Brien & Xxxxxxx
0000 Xxxxxx Xxxxxx
00xx Xxxxx
Xxxxxxxxxxxx, XX 00000
Any party may alter the address to which communications are to be sent by giving
notice of such change of address in conformity with the provisions of this
Section providing for the giving of notice. Notice shall be deemed to be
effective, if personally delivered, when delivered; if mailed, at midnight on
the seventh business day after being sent by registered mail; and if sent by
nationally recognized overnight delivery service, on the next business day
following delivery to such delivery service.
(g) GOVERNING LAW AND CHOICE OF FORUM. This Agreement and the
legal relations among the parties hereto shall be governed by and construed in
accordance with the laws of the Commonwealth of Pennsylvania, regardless of the
laws that might otherwise govern under applicable principles of the conflicts of
law thereof. The parties hereto hereby consent to the jurisdiction of the state
and federal courts sitting in Philadelphia, Pennsylvania, for the adjudication
of any dispute arising with respect to this Agreement. In the event that any
action should be brought by either party to enforce any of its rights under this
Agreement, the prevailing party in such action shall be entitled to have its
reasonable legal fees and court costs reimbursed by the other party hereto.
(h) EXHIBITS; SCHEDULES. All exhibits and schedules to this
Agreement, if any, are hereby incorporated by reference into, and made a part
of, this Agreement.
(i) ENTIRE AGREEMENT. This Agreement constitute the full and
entire understanding and agreement between the parties with regard to the
subject matter hereof and thereof, and supersede all prior and contemporaneous
agreements, understandings, inducements
15
or conditions, express or implied, oral or written, except as herein contained.
The express terms hereof control and supersede any course of performance and/or
usage of trade inconsistent with any of the terms hereof.
(j) NO ADMISSION. This Agreement does not constitute an
admission of any kind whatsoever by any party hereto, each of which denies any
error or liability of any kind in connection with the dispute which is the
subject of this Agreement.
(k) BINDING AGREEMENT. Each of the parties hereto acknowledges
that it has read the terms of this Agreement, that it has consulted with legal
counsel concerning its terms and effect, and that it understands and voluntarily
enters into this Agreement, intending to be legally bound by its terms.
IN WITNESS WHEREOF, the parties hereto have caused this Settlement,
Release and Subscription Agreement to be executed by their duly authorized
agents on the day and year first above written.
CHAMPION FINANCIAL CORPORATION
By: /s/ Xxxx Xxxxxxxx
-----------------------------------
Xxxx Xxxxxxxx, President
MPLC, INC.
By: /s/ Xxxxx X. Xxxxxxxxxxx
-----------------------------------
Xxxxx X. Xxxxxxxxxxx,
President
INFOPLAN, INC.
By: /s/ Xxxxx X. Xxxxxxxxxxx
-----------------------------------
Xxxxx X. Xxxxxxxxxxx,
President
RISK RESOLUTION GROUP
By: /s/ Xxxxx X. Xxxxxxxxxxx
-----------------------------------
Xxxxx X. Xxxxxxxxxxx,
Partner
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/s/ Xxxxx X. Xxxxxxxxxxx
---------------------------------------
Xxxxx X. Xxxxxxxxxxx
/s/ Zirk Xxxxxxxxxxx
---------------------------------------
Zirk Xxxxxxxxxxx
XXXXXXXX X. XXXXX, INC.
By: /s/ Xxxxxxxx X. Xxxxx
-----------------------------------
Xxxxxxxx X. Xxxxx, President
Xx. Xxxxxxxx X. Xxxxx
---------------------------------------
Xx. Xxxxxxxx X. Xxxxx
Xxxxxx X. Xxxxx, Xx.
---------------------------------------
Xxxxxx X. Xxxxx, Xx.
JOINDER
The undersigned, intending to be legally bound hereby, and for other
good and valuable consideration, agrees to be bound by the terms of Sections 4
and 22 of the foregoing Settlement, Release and Subscription Agreement.
FOX, ROTHSCHILD, O'BRIEN & XXXXXXX
By: /s/ Fox, Rothschild, O'Brien & Xxxxxxx
--------------------------------------
