EXHIBIT 2
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PEPPERMILL CAPITAL CORPORATION
November 19, 1999
Xxxxxx Technologies, Inc.
0000 Xxxxxxxx Xxxx
Xxxxxxxxxxxx, XX 00000
Gentlemen:
This letter sets forth the terms and conditions upon which the business
and operations of Xxxxxx Technologies, Inc., a Missouri corporation ("Company"
or "Xxxxxx"), will be acquired by Peppermill Capital Corporation ("Peppermill"),
or a wholly owned subsidiary thereof, (the "Business Combination"). The offer
set forth in this letter of intent will expire at 5:00 p.m., Missouri time, on
November 23, 1999, unless this letter of intent is signed by the Company on the
appropriate line below and returned to the undersigned such that it is received
prior to such time.
1. Consideration. In the Business Combination, all the outstanding
voting and non-voting shares of common stock of the Company will be acquired for
the right to receive an aggregate of 10,116,000 shares of Peppermill. The
Company's preferred stock will be converted on a one-for-one basis in a new
class of Peppermill preferred stock.
2. Acquisition Agreement. Peppermill and the Company agree to act in
good faith to negotiate and cause the execution of a definitive Acquisition
Agreement (the "Acquisition Agreement") on or before December 31, 1999. The
Acquisition Agreement will contain representations, warranties, covenants and
conditions to be agreed upon by the parties.
3. Peppermill's Conditions to Closing. Peppermill's closing of the
transaction will be subject to the satisfaction of certain conditions, including
the following:
(a) Execution of a definitive Acquisition Agreement between
Peppermill and the Company, satisfactory in form and substance to Peppermill;
(b) Receipt of all necessary third party consents including
approval of Xxxxxxxxxx's and the Company's board of directors and shareholders;
and
(c) Receipt of all fairness opinions that the transaction is
fair to Peppermill's common shareholders from a financial point of view.
Xxxxxx Technologies, Inc.
November 19, 1999
Page 2
4. Company's Conditions to Closing. The Company's closing of the
transaction will be subject to the satisfaction of certain conditions, including
the following:
(a) Execution of a definitive Acquisition Agreement
satisfactory in form and substance to the Company;
(b) Receipt of all necessary third party consents, including
approval of Peppermill's and the Company's board of directors and shareholders;
and
(c) Execution and delivery, prior to execution of the
Acquisition Agreement, of a voting agreement and proxy by shareholders owning
10,116,000 shares of Peppermill.
5. Communications. Without the prior consent of the parties hereto,
between the date hereof and the closing date, neither Xxxxxx, or Peppermill nor
any of the officers, directors, employees, affiliates, stockholders or agents of
any of them, shall make any statement or public announcement or any release to
trade publications or through the press or otherwise, or make any statement to
any competitor, customer or any other third party, with respect to the
transaction contemplated hereby; provided, however, that nothing contained
herein shall prevent (i) a party from communicating with those employees who
will be involved in facilitating the closing of the transaction contemplated
hereby; (ii) Peppermill and the Company from disclosing this transaction to its
lenders, prospective underwriters; and (iii) as required by law.
6. Expenses. Each party shall be responsible for all of its expenses
incurred in connection with the transaction contemplated by this letter
agreement, including the fees of any brokers and financial advisors.
7. Termination. Except for paragraphs 5 and 6 hereof, this letter will
automatically terminate and be of no further force and effect upon the earliest
of (a) execution of a definitive Acquisition Agreement between Peppermill and
the Company, (b) mutual agreement of the Company and Peppermill to terminate
this letter agreement, and (c) 120 days after the acceptance of this letter
agreement by the Company. Notwithstanding anything in the previous sentence, the
termination of this letter agreement shall not affect any rights a party has
with respect to the breach of this letter agreement by another party prior to
such termination.
This letter agreement is intended to be, and shall be construed only as
a letter of intent and except for Sections 5,6, and 7 shall not impose any
binding obligations on any person. Except as provided in the immediately
preceding sentence, it is understood that the rights and
Xxxxxx Technologies, Inc.
November 19, 1999
Page 3
obligations of the parties remain to be defined in a definitive Acquisition
Agreement into which this letter agreement shall be merged.
If you are in agreement with the terms set forth above and desire to
proceed with the transaction on that basis, please sign this letter agreement in
the space provided below and return an executed copy to us at the address set
forth above.
Sincerely,
PEPPERMILL CAPITAL CORPORATION
By: /s/ Xxxxxxx X. Xxxxxx
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Name: Xxxxxxx X. Xxxxxx
Title: CEO and President
ACCEPTED AND AGREED as of the date first above written:
XXXXXX TECHNOLOGIES, INC.
By: /s/ Xxxxxxx X. Xxxxxx
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Name: Xxxxxxx X. Xxxxxx
Title: CEO and President
By: /s/ Xxxx X. Xxxxxxxxxx
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Name: Xxxx X. Xxxxxxxxxx
Title: CFO
