AGREEMENT
This Agreement is entered into among Loch Xxxxxx, Inc. ("Loch") and
Stockton Feed and Milling, Inc. ("Stockton") and Ranchers Feed Yards, Inc
("Ranchers"). (Stockton and Ranchers are hereinafter collectively referred to as
"Borrower) and Xxxxx Xxxxxxx, Xx. ("Lender") to be effective this 16th day of
August 2001.
WHEREAS, Loch acquired Borrower from Lender pursuant to that certain
Agreement of Purchase and Sale, dated December 30, 1999 (the "Purchase
Agreement"); and
WHEREAS, in connection with such transaction, Loch paid Lender $924,491 in
cash, plus a promissory note in the amount of $1,459,676 on the terms and
conditions as specified in the note; and
WHEREAS, the sole recourse of Lender for default on the Note was to take
possession of certain common stock of Loch which had been pledged as collateral;
and
WHEREAS, pursuant to the provisions of the Purchase Agreement, Loch pledged
an original amount of 4,819,674 shares of common stock and subsequently in
December 2000 issued an additional 13,095,241 shares and Lender assumed
possession and ownership of all of the foregoing shares on or about January 15,
2001; and
WHEREAS, as a result of Loch going into noncompliance status by failing to
file its periodic reports pursuant to the Securities Exchange Act of 1934,
Lender has not been able to negotiate the Loch stock he received; and
WHEREAS, certain officers and/or directors or their designees of Loch have
advanced or loaned to or on behalf of Borrower for Borrower's operations certain
funds; and
WHEREAS, Lender has agreed to serve as a consultant to Borrower since
November 2000 in an effort to improve operations and results at Borrower; and
WHEREAS, Borrower and consultant have been hampered in their efforts due to
cash constraints, among other things; and
WHEREAS, Loch, Borrower and Lender desire to amend the Purchase Agreement
and related documents, including the Note as provided herein, including but not
limited to substitution of collateral, a rescission and return to Loch of
certain of the Loch stock received by Lender in connection with the Purchase
Agreement, and an obligation of Lender to use the Loch stock Lender retains to
satisfy certain obligations contained in the Loan Documents and/or to return the
remaining stock to Loch or its designee under certain conditions as specified in
the Loan Documents; and
WHEREAS, to accomplish to foregoing, the parties have agreed to enter into
the Promissory Note, Loan Agreement and Deed of Trust/Financing
Statement/Security Agreement attached hereto and collectively referred to as the
"Loan Documents" and this Agreement; and.
WHEREAS, cilk and solar water pumps located at Borrower's facility, with
the exception of the one installed solar water pump unit, are specifically not
the property of Borrower and are not included in collateral and can be freely
removed by Borrower, Loch or their designees from the Borrower's premises at any
time that they choose; and
WHEREAS, any sums of whatever nature owed to Borrower by Loch or any
affiliate of Borrower or Loch (including, but not limited to, in connection with
the Xxxx cattle) are hereby written off and shall not be considered as a claim
or collateral of any nature by Lender or any other party; and
WHEREAS, Lender acknowledges that neither Loch nor any of its affiliates
will be infusing additional capital into Borrower's operation or Borrower and
that Borrower must be able to operate on a stand-alone basis; and
WHEREAS, Lender acknowledges that successful operation of Borrower will
depend on the employees of Borrower as well as the best efforts of Holland in
his consulting capacity; and
WHEREAS, Lender has indicated and Borrower acknowledges its approval that
Lender may purchase, in his individual capacity grain, grass and other items
used by Borrower, store such items on Borrower's property in a clearly marked
area at no charge to Lender, and sell such items to Borrower on an as needed
basis by Borrower at Lender's cost, plus a commercially reasonable interest
factor; and
WHEREAS, Lender is relying solely on his own review and that of his legal
and other advisors in entering into this Agreement, and the Loan Documents,
including but not limited to the decision to rescind the stock transaction and
return 13,095,241 shares to Loch or its designee and encumber the remaining
4,819,674 shares retained by him with certain obligations pursuant to the Loan
Documents; and
WHERAS, Lender represents and warrants to Loch and Borrower that it is
sophisticated in making such decisions, that it is an accredited person as that
term is used in the securities laws (i.e., in this situation that it has a net
worth of $1,000,000 or more) and that it has had full opportunity to conduct a
review of Loch and Borrower in connection with Lender's decision to enter into
this Agreement and the Loan Documents, including the decision to rescind the
stock transaction and return the stock to Loch or its designee.
NOW, THEREFORE, for good and valuable consideration, receipt and
sufficiency of which is hereby acknowledged, the parties agree as follows:
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1. Lender returns and relinquishes any claim of whatever nature to
13,095,241 Loch common stock and all rights related thereto to Loch or its
designees. Lender shall retain 4,819,674 shares which shares and any dividends
or distributions thereon ("Stock Related Property" as more fully defined in the
Loan Documents) all of which shall be subject to the provisions and obligations
contained in this Agreement and the Loan Documents.
2. Borrower grants to Lender a collateral security interest in the
property described in the Loan Documents attached hereto and Lender agrees to
deal with such collateral and the Stock Related Property as specified in the
Loan Documents.
3. Lender on behalf of himself and his heirs, assigns, successors,
agents and affiliates releases, discharges and agrees to hold harmless Loch,
Borrower and their respective predecessors, successors, officers, directors,
shareholders, employees, agents and affiliates from any liability of whatever
nature (except for obligations in the Loan Documents) from any matter related to
the original Purchase Agreement, Note, Loch stock issuance, the ownership or
operation of Borrower and any other matter related whatsoever to any of the
foregoing, including, but not limited to any and all claims, demands, suits,
causes of action, debts, liabilities, expense or cost of whatsoever kind or
character (including, but not limited to any matter related to federal or state
securities laws, claims to any ownership of whatever nature by stock, options or
otherwise to Loch or to affiliates, fraud, interference with protected rights,
breach of contract, intentional or negligent infliction of emotional distress,
conversion, interference with present or prospective business relations or
contracts) arising under federal or state statutory or common law, known or
unknown, suspected or unsuspected, fixed or contingent, liquidated or
unliquidated, whether arising under statutory or common law, the law of
contracts, torts or property rights at law or in equity arising at any time by
reason of any matter whatsoever in any way directly or indirectly related to,
based upon or arising out of the matters released hereby.
4. If any provision of this Agreement shall be held to be invalid,
illegal or unenforceable by a court of competent jurisdiction, with respect to
any party hereto, then such provision may be reformed or enforced only to the
extent legally permitted with respect to such party. Such invalidity,
illegality, unenforceability or reformation shall not affect the enforceability
of this Agreement against the other parties hereto or otherwise affect the
remainder of this Agreement.
5. The parties agree that any dispute arising in any way related to
this Agreement shall be governed by the laws of the State of Texas and shall be
litigated, if at all, exclusively in the courts in Xxxxxx County, Texas.
6. All notices and other communications hereunder shall be in writing
and shall be deemed received (i) when actually received, if delivered
personally; (ii) when sent if by facsimile transmission and a confirmation is
received; (iii) one business day after deposit with an internationally
recognized express courier for overnight or next day delivery; or (iv) three
business days after deposit with the United States mail service, if mailed by
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registered or certified mail, return receipt requested, postage prepaid. All
notices to the parties shall be at the following addresses, or at such other
address for a party as shall be specified by like notice to the other party;
provided that a notice of a change of address shall be effective only upon
receipt thereof.
Lender: 00000 XX 000
Xxxxxx, Xxxxx 00000
Borrower: c/o Loch Xxxxxx, Inc.
0000 Xxxxx Xxxxx Xxxxxxxxxx
Xxxxx X-000
Xxxxxx, Xxxxx 00000
Loch: 0000 Xxxxx Xxxxx
Xxxxx X-000
Xxxxxx, Xxxxx 00000
7. Lender agrees to treat this Agreement as confidential and neither
the existence of this Agreement nor the terms thereof shall be disclosed to any
other person, corporation or entity without the written approval of Loch or
Borrower, except as is required by court order or other judicial or regulatory
order or as is necessary to record certain documents related to the Loan
Documents. In addition, Lender agrees that it will not defame, libel, slander
or otherwise make any demeaning or derogatory remarks or statements about Loch,
Borrower, their affiliates or any officer, director, employee or agent thereof.
8. The parties to this Agreement represent and warrant that they are
properly authorized to enter into this Agreement and the related Loan Documents
and that they are the current legal and beneficial owner of all claims,
remedies, demands, causes of action and liabilities addressed in this Agreement
and the Loan Documents. Xxxxx Xxxxxxx, Xx. additionally and specifically
represents and warrants to the other parties to this Agreement and the Loan
Documents that he is the sole owner of all matters addressed or released by him;
that he has sole authority and right to execute and deliver this Agreement and
the Loan Documents and that neither Xxxxxxx Xxxxxxx nor any of her heirs or any
other party has any ownership interest or right whatsoever in the matters
addressed or released by him in this Agreement or the Loan Documents.
9. (a) The parties hereto each represent and warrant that they have
carefully reviewed this Agreement and have fully informed themselves of and
understand its terms, contents and provisions; that they have consulted with
their own advisors and attorneys as they deemed necessary, and any questions
they have pertaining to this Agreement have been answered and fully explained by
such advisors; that no promise, representation, or statement of any kind has
been made to them, whether oral or written, by any of the other parties hereto
or by anyone acting for them or by any other person, except as expressly stated
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herein; and that the terms of this Agreement are contractual and not mere
recitals.
(b) The language used in this Agreement will be deemed to be the
language chosen by the parties hereto to express their mutual intent and no rule
of strict construction shall be applied against any of the parties.
(c) This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original but all of which together will constitute one
and the same document.
EXECUTED TO BE EFFECTIVE as of the day and year first above written.
LOCH XXXXXX, INC.
By:__________________________________
Name:________________________________
Title:_______________________________
STOCKTON FEED AND MILLING, INC.
By:__________________________________
Name:________________________________
Title:_______________________________
RANCHERS FEED YARDS, INC.
By:__________________________________
Name:________________________________
Title:_______________________________
_____________________________________
Xxxxx Xxxxxxx, Xx.
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