EXHIBIT 10.1
SETTLEMENT AGREEMENT
AND MUTUAL RELEASE OF ALL CLAIMS
--------------------------------
THIS SETTLEMENT AGREEMENT AND MUTUAL RELEASE OF ALL CLAIMS
("Agreement") by and among Swiss-American Products, Inc. ("Plaintiff"), on
the one hand, and Xxxxxxxxxx Laboratories, Inc. and G. Xxxxx Xxxxx
("Defendants"), on the other hand, is made and entered into as of the _____
day of December, 2005 ("Effective Date"). The Plaintiff and the Defendants
are sometimes hereinafter collectively referred to as the "Parties".
RECITALS
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WHEREAS, Plaintiff has filed suit against Defendants in the 000xx
Xxxxxxxx Xxxxxxxx Xxxxx, Xxxxxx Xxxxxx, Xxxxx, which is styled Swiss-
American Products, Inc. x. Xxxxxxxxxx Laboratories, Inc. and G. Xxxxx Xxxxx,
and pending as Cause No. 01-5163 (the "Litigation"); and,
WHEREAS, the Parties desire to avoid the uncertainty, aggravation and
costs of further litigation and settle all disputes between and among them.
NOW THEREFORE, for and in consideration of the premises, mutual
promises, covenants, conditions and obligations contained herein, the
receipt and sufficiency of which is hereby acknowledged, the Parties hereto
agree as follows:
AGREEMENT
A. No Admission of Liability
The Parties acknowledge that in making this Agreement, they are
settling a disputed claim, and nothing herein shall be construed an
admission of liability by any party to the other.
B. Payments
Defendant Xxxxxxxxxx Laboratories, Inc. ("Xxxxxxxxxx") shall pay
to Plaintiff the amount of Four Hundred Thousand and no/100 Dollars
($400,000.00) via wire transfer on the Effective Date of this Agreement.
On the Effective Date of this Agreement, Xxxxxxxxxx shall issue to
Plaintiff a 6.0% Subordinated Promissory Note (the "Promissory Note"), which
shall be in the form attached as Exhibit "A" hereto, in the principal amount
of Four Hundred Thousand and no/100 Dollars ($400,000.00). Xxxxxxxxxx agrees
that the subordinated debt would only be subordinated to the Senior
Indebtedness (as defined in the Promissory Note) and would be pari passu in
seniority, payment and other terms/restrictions with the subordinated debt
issued to the purchasers (the "Purchasers") pursuant to the Promissory Note
and Warrant Purchase Agreement (the "Purchase Agreement") dated November 18,
2005, among Xxxxxxxxxx and the Purchasers listed on Schedule I to the
Purchase Agreement. Xxxxxxxxxx agrees that when payments are made to the
Purchasers under their promissory notes issued pursuant to the Purchase
Agreement, Plaintiff will also be paid its pro rata share, based on the
ratio of the indebtedness under the Promissory Note to the aggregate
indebtedness payable under the Promissory Note and the promissory notes
issued under the Purchase Agreement.
In connection with the terms of the Promissory Note, Plaintiff will
prior to or simultaneous with the issuance to Plaintiff of the Promissory
Note, execute and deliver to Comerica Bank and Xxxxxxxxxx a Subordination
Agreement in the form attached hereto as Exhibit "B" (the "Subordination
Agreement").
On the Effective Date of this Agreement, Xxxxxxxxxx shall issue to
Plaintiff a Series C Common Stock Purchase Warrant (the "Warrant"), which
shall be in the form attached as Exhibit "C" hereto, exercisable for two
hundred thousand (200,000) shares of Xxxxxxxxxx common stock (the "Warrant
Shares" and, collectively with the Promissory Note and the Warrant, the
"Securities") and shall be exercisable at the exercise price set forth in
Section 2(b) of the Warrant.
The Parties agree to cooperate fully in executing any and all
supplementary documents and to take all additional actions that may be
necessary or appropriate to give full force and effect to the basic terms
and intent of this Agreement.
C. Covenant Not to Use Formula.
For purposes of reference, the parties agree that Xxxxxxxxxx and Swiss-
American will each keep one exclusive, identical copy of the Swiss-American
formula for Skintegrity Wound Cleanser that was at issue in this Litigation
(the "Exclusive Copy of the Swiss-American Formula"). For verification
purposes, Xxxxxxxxxx and Swiss-American each agree, by virtue of their
counsel's signature to this Agreement and by their signature on the
Exclusive Copies of the Swiss-American Formula, that they both have received
their Exclusive Copy of the Swiss-American Formula, that it is the formula
that was at issue in the Litigation, and that it is identical to the copy
given to the other party. The formula contained in the Exclusive Copy of
the Swiss-American Formula shall be referenced herein as the "Swiss-American
Formula." Xxxxxxxxxx shall maintain its Exclusive Copy of the Swiss-
American Formula. Swiss-American and/or its counsel shall maintain Swiss-
American's Exclusive Copy of the Swiss-American Formula. Defendants
covenant and agree that within forty-five (45) days after the Effective Date
of this Agreement, all other documents containing the Swiss-American Formula
in the possession of Defendants, their attorneys or their experts shall be
returned to Plaintiff and all electronic files and backup files containing
the the Swiss-American Formula shall be destroyed.
Defendants covenant and agree that that they will not possess, maintain
or use the Swiss-American Formula in any way except to maintain their
Exclusive Copy of the Swiss-American Formula. Xxxxxxxxxx agrees that the
Swiss-American Formula shall be maintained in confidence. The Defendants
represent that, since the filing of the Litigation, the Swiss-American
Formula has not been disclosed to third parties, except to their attorneys
and pursuant the Protective Order entered in the Litigation.
Defendants covenant and agree that they will not manufacture, market or
sell a product with the identical ingredients and the identical percentage
of ingredients as in the Swiss-American Formula.
D. Mutual Release and Discharge
Plaintiff, its successors, assigns, agents, officers, directors,
shareholders, employees, attorneys, subsidiaries and all related parties and
entities acting in privity with the foregoing, fully releases, acquits and
forever discharges Defendants, their successors, assigns, agents, officers,
directors, shareholders, employees, attorneys, subsidiaries and all related
parties and entities acting in privity with the foregoing, of and from any
and all claims, demands and causes of action held by Plaintiff, its
successors, assigns, agents, officers, directors, shareholders, employees,
attorneys, subsidiaries and all related parties and entities acting in
privity with the foregoing, which arise from, result from or in any way
relate to the Litigation or any claim or cause of action which it may have
of whatsoever nature, whether arising in contract, or in tort or based on
any other theory of recovery, known or unknown, presently existing or
existing in the past, of whatever nature, except for obligations arising
hereunder.
Defendants, their successors, assigns, agents, officers, directors,
shareholders, employees, attorneys, subsidiaries and all related parties and
entities acting in privity with the foregoing, fully release, acquit and
forever discharge Plaintiff, its successors, assigns, agents, officers,
directors, shareholders, employees, attorneys, subsidiaries and all related
parties and entities acting in privity with the foregoing, of and from any
and all claims, demands and causes of action held by Defendants, their
successors, assigns, agents, officers, directors, shareholders, employees,
attorneys, subsidiaries and all related parties and entities acting in
privity with the foregoing, which arise from, result from or in any way
relate to the Litigation or any claim or cause of action which they may have
of whatsoever nature, whether arising in contract, or in tort or based on
any other theory of recovery, known or unknown, presently existing or
existing in the past, of whatever nature, except for obligations arising
hereunder.
The Parties shall file an agreed motion and, in the forms attached
hereto as Exhibits "D" and "E" dissolving the temporary injunction and
dismissing the Litigation with prejudice. All parties shall bear their own
costs and attorneys' fees in the Litigation.
E. Representations and Warranties
1. Each Party to this Agreement warrants and represents that he or it
has the power and authority to enter into this Agreement and that this
Agreement and all documents delivered pursuant to this Agreement are valid,
binding and enforceable upon him or it.
2. Each Party to this Agreement warrants and represents that no
consent, approval, authorization or order of, and no notice to, or filing
with, any court, governmental authority, person or entity is required for
the execution, delivery, and performance of this Agreement, other than, with
respect to Xxxxxxxxxx (i) compliance with any applicable requirements of the
Securities Act of 1933, as amended (the "Securities Act"); (ii) compliance
with any applicable requirements of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"); (iii) compliance with any applicable
state securities laws; and (iv) such consents, approvals, orders, or
authorizations which, if not obtained, and such declarations, filings, or
registrations which, if not made, would not, individually or in the
aggregate, have a material adverse effect on the business, assets, results
of operations, or financial condition of Xxxxxxxxxx. The representations
and warranties of Xxxxxxxxxx contained in this Section E.2., insofar as such
representations and warranties pertain to compliance by Xxxxxxxxxx with the
requirements of the Securities Act and applicable state securities laws, are
based on the representations and warranties of Plaintiff contained in
Section E.3.
3. Plaintiff hereby represents and warrants to and covenants with
Xxxxxxxxxx that:
(a) Plaintiff is a corporation duly incorporated under the laws of
Texas and is validly existing in good standing under such laws.
(b) Plaintiff has adequate means of providing for Plaintiff's current
needs and possible contingencies, and Plaintiff has no need now, and
anticipates no need in the foreseeable future, to sell the Securities to be
acquired by Plaintiff hereunder. Plaintiff is able to bear the economic
risks of this investment, and consequently, without limiting the generality
of the foregoing, is able to hold the Securities for an indefinite period of
time and has a sufficient net worth to sustain a loss of Plaintiff's entire
investment in the Securities in the event such loss should occur.
(c) Plaintiff recognizes that Plaintiff's investment in the Securities
involves a high degree of risk that may result in the loss of the total
amount of the investment. Plaintiff acknowledges that Plaintiff has
carefully considered all risks incident to the purchase of the Securities.
(d) Plaintiff is acquiring the Securities for Plaintiff's own account
(as principal) for investment and not with a view to the distribution or
resale of all or any part thereof.
(e) Plaintiff has not offered or sold any portion of the Securities
and has no present intention of dividing Plaintiff's interest in any of the
Securities with others or of reselling or otherwise disposing of any portion
of the Securities either currently or after the passage of a fixed or
determinable period of time or upon the occurrence or nonoccurrence of any
predetermined event or circumstance.
(f) Plaintiff is aware that Plaintiff must bear the economic risk of
an investment in the Securities for an indefinite period of time because of
the restrictions on transferability referred to below. Plaintiff also
recognizes that no federal or state agency has passed upon the Securities to
date or made any finding or determination as to the fairness of an
investment in the Securities.
(g) Plaintiff and its advisors, if any, have been furnished with all
publicly available materials relating to the business, finances and
operations of Xxxxxxxxxx and such other publicly available materials
relating to the offer and sale of the Securities as have been requested by
Plaintiff. Plaintiff and its advisors, if any, have been afforded the
opportunity to ask questions of Xxxxxxxxxx. Other than to other persons
party to this Agreement and its professional advisors who have agreed to
keep such information confidential in accordance with this Agreement,
Plaintiff has maintained the confidentiality of all disclosures made to it
in connection with this transaction (including the existence and terms of
this transaction).
(h) Plaintiff has not received any offer to acquire the Securities
pursuant to any advertisement, article, notice or other communication
published in any newspaper, magazine or similar media or broadcast over
television or radio or pursuant to attendance at any seminar or meeting to
which Plaintiff was invited by such general solicitation or general
advertising.
(i) In making a decision to subscribe for the Securities, Plaintiff
has relied upon independent investigations made by Plaintiff and its
advisors, if any, without assistance of Xxxxxxxxxx or its affiliates,
employees or agents.
(j) Plaintiff understands and agrees that (i) its acquisition of the
Securities will not be registered under applicable securities laws, and (ii)
a legend in substantially the following form will be placed on any
certificate(s) evidencing the Securities, in addition to any other legend
required by law or other agreement to be noted thereon:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE AND THOSE ISSUABLE
UPON THE EXERCISE HEREOF: (I) HAVE BEEN OR WILL BE ISSUED PURSUANT TO
AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND APPLICABLE STATE SECURITIES OR BLUE SKY LAWS IN RELIANCE
UPON THE REPRESENTATION OF THE HOLDER HEREOF THAT THE SAME HAVE BEEN
ACQUIRED FOR INVESTMENT PURPOSES; AND (II) MAY NOT BE RESOLD,
TRANSFERRED OR CONVEYED IN THE ABSENCE OF REGISTRATION PURSUANT TO THE
APPLICABLE SECURITIES LAWS OR UNLESS AN OPINION OF COUNSEL SATISFACTORY
TO THE COMPANY IS FIRST OBTAINED THAT SUCH IS NOT THEN NECESSARY. ANY
TRANSFER CONTRARY HERETO IS VOID.
(k) Plaintiff confirms that Plaintiff has been advised to consult with
its own attorney regarding legal matters concerning Xxxxxxxxxx and to
consult with independent tax advisors regarding the tax consequences of
investing in Xxxxxxxxxx.
(l) The execution, delivery, and performance by Plaintiff of this
Agreement and the consummation by it of the transactions contemplated hereby
do not and will not (i) conflict with or result in a violation of any
provision of its charter, bylaws or similar organizational documents or (ii)
violate any applicable law binding upon Plaintiff, except for any such
violations which would not, individually or in the aggregate affect the
ability of Plaintiff to consummate the transactions contemplated hereby.
(m) Plaintiff is not acquiring the securities as part of a "group" as
such term is generally understood pursuant to Section 13(d) of Regulation
13D-G of the Exchange Act or if Plaintiff is a member of a group, the group
will beneficially own, within the meaning of Section 13(d) of Regulation
13D-G of the Exchange Act, less than 15% of Xxxxxxxxxx'x common stock after
giving effect to the transactions contemplated hereby.
(n) Plaintiff understands that the Promissory Note and Warrant are
being offered and sold to Plaintiff in reliance on specific exemptions from
the registration requirements of the United States federal and state
securities laws and that Xxxxxxxxxx is relying in part upon the truth
and accuracy of, and Plaintiff's compliance with, the representations,
warranties, agreements, acknowledgements and understandings of Plaintiff set
forth herein in order to determine the availability of such exemptions and
the eligibility of Plaintiff to acquire the Promissory Note and Warrant.
(o) Plaintiff, either alone or together with its representatives, has
such knowledge, sophistication and experience in business and financial
matters, including investing in companies engaged in the business in which
Xxxxxxxxxx is engaged, so as to be capable of evaluating the merits and
risks of the prospective investment in the Promissory Note and Warrant, and
has so evaluated the merits and risks of such investment. Plaintiff is able
to bear the economic risk of an investment in the Promissory Note and
Warrant and is able to afford a complete loss of such investment.
(p) Plaintiff acknowledges that Plaintiff understands the meaning and
legal consequences of the representations, warranties and covenants set
forth in this Section E.3. hereof and that Xxxxxxxxxx has relied and will
rely upon such representations, warranties and covenants, and Plaintiff
hereby agrees to defend, indemnify and hold harmless Xxxxxxxxxx and its
officers, directors, controlling persons, agents and employees, from and
against any and all loss, damage or liability, joint or several, and any
action in respect thereof, to which any such person may become subject due
to or arising out of Plaintiff's breach of any such representation, warranty
or covenant.
4. Xxxxxxxxxx hereby represents and warrants to Plaintiff that:
(a) Xxxxxxxxxx understands the meaning and legal consequences of the
representations, warranties and covenants set forth in this Section E.4.
hereof as well as those contained in Section C entitled Convenant Not to
Use Formula and that Plaintiff has relied and will rely upon such
representations, warranties and covenants, and Xxxxxxxxxx hereby agrees to
defend, indemnify and hold harmless Plaintiff and its officers, directors,
controlling persons, agents and employees, from and against any and all
loss, damage or liability, joint or several, and any action in respect
thereof, to which any such person may become subject due to or arising out
of Xxxxxxxxxx'x breach of any such representation, warranty or covenant;
(b) Corporate Organization. Xxxxxxxxxx is a corporation duly
organized, validly existing, and in good standing under the laws of the
State of Texas and has all requisite corporate power and corporate authority
to own, lease, and operate its properties and to carry on its business as
now being conducted.
(c) Qualification. Xxxxxxxxxx is duly qualified or licensed to do
business and is in good standing in each jurisdiction in which the property
owned, leased, or operated by it or the conduct of its business requires
such qualification or licensing, except jurisdictions in which the failure
to be so qualified or licensed would not, individually or in the aggregate,
have a material adverse effect on the business, assets, results of
operations, or financial condition of Xxxxxxxxxx.
(d) Capitalization of Xxxxxxxxxx.
(i) The authorized capital stock of Xxxxxxxxxx consists
of (i) 30,000,000 shares of Xxxxxxxxxx'x common stock, $.01 par value per
share (the "Common Stock"), of which, as of November 14, 2005, 10,790,230
shares were outstanding, and (ii) 1,000,000 shares of preferred stock, par
value $100 per share, of which, as of November 14, 2005, none of which were
outstanding. All outstanding shares of capital stock of Xxxxxxxxxx have
been validly issued and are fully paid and nonassessable, and no shares of
capital stock of Xxxxxxxxxx are subject to, nor have any been issued in
violation of, preemptive or similar rights. As of November 14, 2005, (A) an
aggregate of 1,444,881 shares of Common Stock were issuable upon the
exercise of outstanding options granted under Xxxxxxxxxx'x 1995 Stock Option
Plan, (B) an aggregate of 500,000 shares of Common Stock were reserved for
issuance under Xxxxxxxxxx'x 2004 Stock Option Plan, of which an aggregate
of 170,500 shares of Common Stock were issuable upon the exercise of
outstanding options granted thereunder, (C) an aggregate of 1,250,000 shares
of Common Stock were reserved for issuance under Xxxxxxxxxx'x Employee Stock
Purchase Plan, of which an aggregate of 960,112 shares of Common Stock have
been issued thereunder, and (D) an aggregate of 300,000 shares of a series
of the Xxxxxxxxxx'x preferred stock designated as Series D Preferred Stock
are reserved for issuance upon the exercise of certain preferred share
purchase rights associated with the Common Stock, which rights become
exercisable by the holders thereof upon the occurrence of certain events,
including the acquisition of, or the announcement of the intention to
acquire, more than 15% of the outstanding Common Stock by any person, entity
or group.
(ii) Except as set forth above in this Section E.4(d)
and as contemplated by this Agreement, as of November 14, 2005, there were
outstanding (A) no shares of capital stock or other voting securities of
Xxxxxxxxxx, (B) no securities of Xxxxxxxxxx convertible into or exchangeable
for shares of capital stock or other voting securities of Xxxxxxxxxx, (C) no
options or other rights to acquire from Xxxxxxxxxx, and no obligation of
Xxxxxxxxxx to issue or sell, any shares of capital stock or other voting
securities of Xxxxxxxxxx or any securities of Xxxxxxxxxx convertible into or
exchangeable for such capital stock or voting securities, and (D) no equity
equivalents, interests in the ownership or earnings, or other similar rights
of or with respect to Xxxxxxxxxx.
(iii) Except pursuant to the Purchase Agreement and
Xxxxxxxxxx'x stock option and employee stock purchase plans, Xxxxxxxxxx has
not issued any securities, or the right to purchase any securities since
November 14, 2005.
(e) Authority Relative to this Agreement. Xxxxxxxxxx has full
corporate power and corporate authority to execute, deliver, and perform
this Agreement, the Promissory Note and the Warrant (collectively, the
"Transaction Documents") and to consummate the transactions contemplated
thereby. The execution, delivery, and performance by Xxxxxxxxxx of the
Transaction Documents, and the consummation by it of the transactions
contemplated thereby, have been duly authorized by all necessary corporate
action of Xxxxxxxxxx. The Transaction Documents have been duly executed and
delivered by Xxxxxxxxxx and constitute valid and legally binding obligations
of Xxxxxxxxxx, enforceable against Xxxxxxxxxx in accordance with their
respective terms, except that such enforceability may be limited by (i)
applicable bankruptcy, insolvency, reorganization, moratorium, and similar
laws affecting creditors' rights generally, (ii) equitable principles which
may limit the availability of certain equitable remedies (such as specific
performance) in certain instances, and (iii) public policy considerations
with respect to the enforceability of rights of indemnification.
(f) Noncontravention. The execution, delivery, and performance by
Xxxxxxxxxx of the Transaction Documents and the consummation by it of the
transactions contemplated thereby do not and will not (i) conflict with or
result in a violation of any provision of the Restated Articles of
Incorporation or Bylaws of Xxxxxxxxxx, (ii) conflict with or result in a
violation of any provision of, or constitute (with or without the giving of
notice or the passage of time or both) a default under, or give rise (with
or without the giving of notice or the passage of time or both) to any right
of termination, cancellation, or acceleration under, any bond, debenture,
note, mortgage, indenture, lease, agreement, or other instrument or
obligation to which Xxxxxxxxxx is a party or by which Xxxxxxxxxx or any of
its properties may be bound, (iii) result in the creation or imposition of
any lien or encumbrance upon the properties of Xxxxxxxxxx, or (iv) assuming
compliance with the matters referred to in Section E.4(g), violate any
Applicable Law (as hereinafter defined) binding upon Xxxxxxxxxx, except, in
the case of clauses (ii), (iii), and (iv) above, for any such conflicts,
violations, defaults, terminations, cancellations, accelerations, liens, or
encumbrances which would not, individually or in the aggregate, have a
material adverse effect on the business, assets, results of operations, or
financial condition of Xxxxxxxxxx or on the ability of Xxxxxxxxxx to
consummate the transactions contemplated hereby.
(g) Governmental Approvals. No consent, approval, order, or
authorization of, or declaration, filing, or registration with, any
Governmental Entity (as hereinafter defined) is required to be obtained or
made by Xxxxxxxxxx in connection with the execution, delivery, or
performance by Xxxxxxxxxx of the Transaction Documents or the consummation
by it of the transactions contemplated thereby, other than (i) compliance
with any applicable requirements of the Securities Act; (ii) compliance with
any applicable requirements of the Exchange Act; (iii) compliance with any
applicable state securities laws; and (iv) such consents, approvals, orders,
or authorizations which, if not obtained, and such declarations, filings, or
registrations which, if not made, would not, individually or in the
aggregate, have a material adverse effect on the business, assets, results
of operations, or financial condition of Xxxxxxxxxx or on the ability
of Xxxxxxxxxx to consummate the transactions contemplated hereby. The
representations and warranties of Xxxxxxxxxx contained in this Section
E.4(g), insofar as such representations and warranties pertain to compliance
by Xxxxxxxxxx with the requirements of the Securities Act and applicable
state securities laws, are based on the representations and warranties of
the Plaintiff contained in Section E.3.
(h) Authorization of Issuance. The Securities have been duly
authorized for issuance and, when issued and delivered by Xxxxxxxxxx in
accordance with the provisions of the applicable Transaction Documents, will
be validly issued, fully paid, and nonassessable. The Warrant Shares, when
issued in accordance with the terms of the Transaction Documents, will be
validly issued, fully paid and nonassessable. Xxxxxxxxxx has reserved from
its duly authorized capital stock 200,000 shares of Common Stock for
issuance of the Warrant Shares. The issuance of the Securities and the
Warrant Shares is not subject to any preemptive or similar rights.
(i) Private Placement Memorandum; SEC Filings.
(i) None of the information contained in the Private Placement
Memorandum (the "Private Placement Memorandum") given to the Plaintiff, as
of such date, contains any untrue statement of a material fact or omits to
state any material fact required to be stated therein or necessary in order
to make the statements contained therein, in light of the circumstances
under which they are made, not misleading.
(ii) Xxxxxxxxxx has delivered to Plaintiff accurate and complete
copies of (A) Xxxxxxxxxx'x Annual Report on Form 10-K for the year ended
December 31, 2004, (B) Xxxxxxxxxx'x Annual Report to Shareholders for the
fiscal year ended December 31, 2004, (C) Xxxxxxxxxx'x Proxy Statement dated
April 14, 2005, relating to the 2005 Annual Meeting of Shareholders, (D)
Xxxxxxxxxx'x Quarterly Report on Form 10-Q for the quarter ended September
30, 2005 and (E) Xxxxxxxxxx'x Current Report on Form 8-K filed on November
22, 2005, in each case in the form filed by Xxxxxxxxxx with the Securities
and Eschange Commission (collectively, the "SEC Filings"). None of the
SEC Filings, including, without limitation, any financial statements or
schedules included therein, as of the date of filing thereof, contained any
untrue statement of a material fact or omitted to state any material fact
required to be stated therein or necessary in order to make the statements
contained therein, in light of the circumstances under which they were made,
not misleading. The financial statements of Xxxxxxxxxx included in the SEC
Filings present fairly, in conformity with generally accepted accounting
principles applied on a consistent basis (except as may be indicated in the
notes thereto), the consolidated financial position of Xxxxxxxxxx as of the
dates thereof and its consolidated results of operations and cash flows for
the periods then ended (subject to normal year-end audit adjustments in the
case of any unaudited interim financial statements).
(j) Absence of Undisclosed Liabilities. Except as and to the extent
disclosed in the Private Placement Memorandum or the SEC Filings, (a) as of
September 30, 2005, Xxxxxxxxxx had no liabilities or obligations (whether
accrued, absolute, contingent, unliquidated, or otherwise) material to
Xxxxxxxxxx, and (b) since September 30, 2005, Xxxxxxxxxx has not incurred
any such material liabilities or obligations, other than those incurred in
the ordinary course of business.
(k) Absence of Certain Changes. Except as disclosed in the Private
Placement Memorandum or the SEC Filings, since September 30, 2005, there has
not been any material adverse change in the business, assets, results of
operations, or financial condition of Xxxxxxxxxx.
(l) Scope of Representations and Warranties. Except as set forth in
this Agreement, Xxxxxxxxxx makes no representations or warranties to the
Plaintiff and hereby disclaims all liability and responsibility for any
representation, warranty, statement, or information made or communicated
(orally or in writing) to Plaintiff (including but not limited to any
opinion, information, projection, or advice that may have been provided
to Plaintiff by any officer, director, employee, agent, consultant or
representative of Xxxxxxxxxx).
F. Miscellaneous Provisions
1. Construction
This Agreement shall be construed and interpreted in accordance of the
laws of the State of Texas, without reference to its conflict of laws
provisions, and any dispute arising hereunder shall be brought in Dallas
County, Texas.
2. Severability
To the extent any provision of this Agreement is deemed unenforceable
or contrary to law, all provisions of this Agreement shall be deemed
severable, and all remaining provisions shall remain in full force and
effect.
3. Integration
This Agreement is fully integrated and represents the entire agreement
and understanding of the Parties. This Agreement shall supersede and
replace any prior agreements or understandings between the Parties
concerning the subject matter of this Agreement.
4. Amendments
This Agreement may not be amended or modified except by a writing duly
executed by the party or the authorized representative of the party against
which such amendment or modification is subject to be enforced.
5. Registration Rights
The Company shall use its commercially reasonable efforts to register
the Warrant Shares with the Securities and Exchange Commission under the
Securities Act of 1933, as amended, on or before February 16, 2006, on the
same terms and conditions as the registration rights contained in Section
4.4 of the Purchase Agreement, with the Warrant Shares having rights
thereunder pari passu with the shares issuable under the warrants issued to
the Purchasers under the Purchase Agreement.
6. Counterparts and Signatures
This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original. This Agreement and all counterparts
hereto shall be considered a single, enforceable contract. For purposes of
this Agreement, a signature transmitted via facsimile or telecopy shall be
deemed as effective as an original.
7. Successors
This Agreement shall be binding upon and inure to the benefit of the
Parties and their respective successors and assigns.
8. No Assignment
The rights and privileges afforded by this Agreement are not assignable
by any party without the written consent of the other parties.
9. Survival
All representations, warranties, covenants and indemnifications
contained in this Agreement shall survive after the Effective Date of this
Agreement.
10. Confidentiality
From the Effective Date forward, the Parties agree not to reveal the
terms of this Agreement or any information concerning the business,
financial condition, operations, prospects, assets and liabilities of
Xxxxxxxxxx acquired from Xxxxxxxxxx during the negotiation of this Agreement
to anyone who is not a Party to this Agreement. However, the Parties agree
that this section shall not prevent any Party from revealing or discussing
the terms of this Settlement Agreement (a) with his or its legal advisors,
accountants, tax advisors, or financial advisors; (b) in any action
regarding the breach, enforcement, or interpretation of this Settlement
Agreement; and (c) as required by law, contract, governmental agency, or any
court of competent jurisdiction.
11. Notices
All notices, requests, demands, and other communications required or
permitted to be given or made hereunder by any Party hereto shall be in
writing and shall be deemed to have been duly given or made if delivered
personally or transmitted by first class registered or certified mail,
postage prepaid, return receipt requested, to the Party at the address set
forth under such Party's name on the signature page hereof (or at such other
address as shall be specified by the Party by like notice).
AGREED:
SWISS-AMERICAN PRODUCTS, INC.
__________________________________ Dated:______________, 2005
By: Xxxxxxx X. Xxxxx
Its: President
Address: 0000 Xxxx Xxxx, Xxx. 000
Xxxxxxxxxx, XX 00000
Attn: President
XXXXXXXXXX LABORATORIES, INC.
_________________________________ Dated:______________, 2005
By: Xxxxxxx X. Xxxxxx
Its: President and CEO
Address: 0000 Xxxxxx Xxxx Xxxx
Xxxxxx, Xxxxx 00000
Attn: Chief Financial Officer
_________________________________ Dated:______________, 2005
G. XXXXX XXXXX
Address: 000 Xxxx Xxxxx Xx.
Xxxxxxx, XX 00000
