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SETTLEMENT AGREEMENT
BETWEEN
NET VALUE HOLDINGS, INC. AND STRATEGICUS PARTNERS, INC.
(together NVH),
DOUGLAS SPINK,
MERUS PARTNERS
and
ATER WYNNE LLP
(as Escrow Agent)
DATED: August 17, 2000
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TABLE OF CONTENTS
Paragraph Page
--------- ----
1. AGREEMENTS WITH RESPECT TO THE COMMON STOCK OF NVH..................2
2. OTHER AGREEMENTS OF THE PARTIES.....................................6
3. THE CLOSING.........................................................8
4. CONDITIONS TO CLOSING...............................................8
5. REPRESENTATIONS AND WARRANTIES.....................................10
6. MISCELLANEOUS......................................................11
EXHIBITS
Exhibit A - Form of Proxy
Exhibit B - Form of Investment Letter
Exhibit C - Promissory Note
Exhibit D - Escrow Agreement
Exhibit E - Pledge Agreement [Intentionally Deleted]
Exhibit F - NVH General Release
Exhibit G - Spink General Release
Exhibit H - Webmodal General Release
Exhibit I - Mutual Non-Disparagement Agreement
Exhibit J - Stipulations of Dismissal with respect to the Spink Oregon, Spink
Delaware, NVH Delaware and Rosendahl cases.
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SETTLEMENT AGREEMENT
NetValue Holdings, Inc. and Strategicus Partners, Inc. (together
"NVH"), Douglas B. Spink, ("Spink"), and Merus Partners, Inc.("Merus"), enter
into this Settlement Agreement (the "Agreement') on August 17, 2000.
NVH, Spink, and Merus are currently parties to five lawsuits, as
follows:
Douglas Spink v. Net Value Holdings, Inc.; Case No. CV00-045-BR in the
U.S. District Court for the District of Oregon; ("Spink Oregon");
Douglas Spink v. Net Value Holdings, Inc.; Civil Action No.18097-NC and
18106-NC, Court of Chancery for Newcastle County, Delaware ("Spink Delaware");
Netvalue Holdings, Inc. v. Douglas B. Spink and Merus Partners, Inc.;
Civil Action No. 00-454-SLR; U.S. District Court for the District of Delaware;
("NVH Delaware");
Greg Biggs v. Douglas Spink, Strategicus Partners, Inc. and Net Value
Holdings, Inc., Case No. 00-06-05688 Circuit Court for the State of Oregon for
Multnomah County ("Biggs"); and
Steve Rosendahl and Jim Steuer v. Douglas B. Spink; Net Value Holdings,
Inc; Aspen Value, LLC; and Merus Partners, Inc., Case No. 0007-07595 Circuit
Court for the State of Oregon for Multnomah County; ("Rosendahl").
NVH, Spink, and Merus wish to resolve completely Spink Oregon, Spink
Delaware, NVH Delaware, and to provide for the handling of Rosendahl and Biggs.
NVH, Spink, and Merus also wish to resolve any and all open issues
among them, and to enter into releases of all claims other than those reserved
in this Agreement.
The parties therefore agree:
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1. Agreements with Respect to the Common Stock of NVH.
1.1 Acknowledgment of Ownership. Subject to, and without waiver of the
claims that have been asserted by it prior to the date hereof, and which by
virtue of this Agreement are being released, NVH acknowledges that Spink is, as
of the date of this Agreement, the record owner of 2,047,856 shares of NVH
common stock (the "Original Shares").
1.2 Proxy. Spink grants Andrew Panzo on behalf of the NVH Board of
Directors his irrevocable proxy to vote any portion or all of the Original
Shares at NVH's Annual Meeting of Shareholders to be held September 25, 2000, or
later if postponed or adjourned, as recommended by the Board of Directors of
NVH, on all issues described in NVH's definitive proxy materials as filed with
the Securities and Exchange Commission (SEC), and as may be subsequently amended
to reflect the terms of this Agreement, if at all. Spink acknowledges the proxy
to be coupled with an interest. Spink grants with the proxy rights to assign
that proxy to such officer as the Board deems suitable for exercise, and agrees
to execute the form of proxy attached hereto as Exhibit "A".
1.3 Return of Shares for Cancellation. Upon the "Closing," (as
hereinafter defined) Spink will surrender and return to NVH for cancellation, in
consideration of the releases and mutual covenants herein contained, out of the
Original Shares, 1,212,856 shares of NVH Common Stock (the "Return Shares"). The
parties acknowledge that the balance of the Original Shares of 835,000 shares
(the "Balance Shares") shall be dealt with in accordance with Section 1.4
hereafter.
1.4 Distribution of the Balance Shares. Spink shall produce the Balance
Shares at the Closing together with executed Stock Powers, to be reissued and
distributed at the Closing by NVH upon the direction of Spink in the following
manner:
<TABLE>
<CAPTION>
Certificate
Categories Reissued in name of Denominations
---------- ------------------- -------------
<S> <C> <C>
Resolution Shares 455,934
Target Growth shares Target Growth Fund 284,054
Rosendahl Shares Steven Rosendahl 70,000
Steuer Shares James Steuer 70,000
Rosendahl Contingency Shares Douglas Spink, to be 20,000
retained by NVH pursuant to
Section 1.5.2
Aspen Value shares Aspen Value Holdings LLC 11,880
Liquidity Shares Douglas B. Spink 100,000 100,000
Lockup Shares 269,066
Biggs Reserve Shares Ater Wynne as Escrow Agent 65,000
for Douglas B. Spink
Last Shares Same Legend as above 204,066
Uphoff Shares Barry Uphoff 10,000 10,000
Balance Shares: 835,000 835,000
--------- ---------
Return Shares: Douglas B. Spink 1,212,856 1,212,856
---------
Total Original Shares: 2,047,856
=========
</TABLE>
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1.5 Instructions to Transfer Agent and Delivery of the Resolution
Shares. Spink has advised NVH that the Resolution Shares to be transferred have
either been transferred by Spink, or Spink has agreed to transfer such shares,
all in private transactions pursuant to the so-called 4(1.5) exemption under the
Securities Act of 1933, as amended (the "Securities Act"). NVH agrees to provide
instructions to its transfer agent to facilitate transfer of these shares at the
Closing upon receipt of evidence satisfactory to NVH's counsel, on or before
Closing, that the transfers were, or are to be, accomplished as private
transactions exempt from the registration requirements of the Securities Act. To
evidence the foregoing, each of Aspen Value Holdings and Target Growth Fund
shall provide NVH and its transfer agent with executed investment letters on or
before the Closing, the form of which is attached hereto as Exhibit "B".
1.5.1. Dispositive Provisions Relating to the Rosendahl and
Steuer Shares. In recognition of the claims asserted under the
Rosendahl case, NVH shall promptly following Closing deposit
the Rosendahl and Steuer shares with the appropriate court of
competent jurisdiction, or otherwise tender such shares in the
procedure deemed most appropriate by NVH's counsel in
consultation with Spink's counsel, in discharge in full of
NVH's obligations under the Rosendahl case.
1.5.2. The Rosendahl Contingency Shares. NVH may retain the
Rosendahl contingency shares at Closing. Once the Rosendahl
case has been dismissed with prejudice and after all periods
of appeal have expired (unless such dismissal is voluntary,
precluding the possibility of any appeal), in which it is
apparent that no additional claims can be made against NVH by
Rosendahl or Steuer, or in any way related to the Rosendahl
case, NVH will, to the extent no indemnification claims are
outstanding under Section 2.7.2. hereunder, turn over and
deliver to Spink the Rosendahl contingency shares. To the
extent that claims are asserted by NVH under Section 2.7.2,
NVH may upon ten (10) days written notice to Spink, assert
these claims and satisfy such claims (not as the exclusive
means of redress) as against the Rosendahl contingency shares.
1.6 Instructions to Transfer Agent and Delivery of the Liquidity
Shares. NVH agrees to provide instructions to its transfer agent to facilitate
transfer of the Liquidity Shares to Spink upon the Closing. The Liquidity Shares
shall continue to bear a standard restrictive legend under Rule 144 of the
Securities Act, however, NVH acknowledges that Spink's beneficial ownership of
these shares commenced as of July 31, 1999. NVH also acknowledges that Spink
shall be permitted to sell or transfer the Liquidity Shares, absent any of the
restrictions upon resale applicable to the Lockup Shares, subject only to
compliance with applicable federal and state securities laws, including but not
limited to Rule 144 of the Securities Act.
1.7 Instructions to Transfer Agent and Delivery of the Lockup Shares.
The Lockup Shares are to serve as collateral to secure Spink's obligation to
NVH: (i) to repay the promissory note in the principal amount of $310,000
attached hereto as Exhibit "C" (the "Note"), as more particularly described at
Section 2.1 hereafter; (ii) to indemnify NVH against matters arising in the
Biggs litigation, as more particularly described at Section 2.7 hereafter; and
(iii) to insure compliance with the resale provisions of Sections 1.8.3 and
1.8.4 hereafter. At the Closing, the Lockup Shares shall be delivered by NVH to
Ater Wynne LLP as Escrow Agent ("Escrow Agent"). The Escrow Agent agrees to hold
the Lockup Shares in escrow in accordance with the terms of this Agreement and
the Escrow Agreement attached hereto and made a part hereof as Exhibit "D".
1.8 Dispositive Provisions relating to the Lockup Shares.
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1.8.1 The Biggs Reserve Shares. The Biggs Reserve Shares,
together with stock transfer powers enabling transfer to NVH or sale,
executed in blank by Spink, or the cash sum of $250,000, either of
which can be substituted in the discretion of Spink (the "Biggs
Reserve"), shall be delivered to the Escrow Agent at Closing and held
in escrow by the Escrow Agent to secure the obligation of Spink and
Merus to indemnify NVH as set forth in Section 2.7 hereof. The Biggs
Reserve shall be held by the Escrow Agent and utilized to satisfy any
demands made for indemnification by NVH. Once the "release conditions"
identified below are satisfied, the Escrow Agent shall make a final
accounting of the Biggs Reserve held in escrow. If at that time there
are pending any unresolved indemnification claims, the Escrow Agent
shall withhold so much of the Biggs Reserve as may be required to
satisfy the claim. If there are no unresolved indemnification claims,
the remainder of the Biggs Reserve shall be: (i) returned to Spink if
the Note has been satisfied in full and if all restrictions upon resale
of the Last Shares have expired; or (ii) delivered to the Escrow Agent
to continue to be held in escrow in addition to the Last Shares in
accordance with Section 1.8.2 et seq. if the Note has NOT been
satisfied in full or if all restrictions upon resale of the Last Shares
shall NOT have expired. For the purposes hereof, the "release
conditions" are satisfied once the Escrow Agent delivers to NVH an
order dismissing the Biggs case as to NVH and Strategicus Partners,
Inc. with prejudice, or otherwise a final order is entered in that case
in NVH's and Strategicus' favor and provided the time for any permitted
appeal has run and no appeal has been filed.
(i) Demand against Reserve. The Biggs Reserve may be
drawn upon by NVH to reimburse expenses of
defense or amounts paid in judgment, incurred by
and paid by NVH, that Spink has promised to cover
under Section 2.7 below relating to
indemnification, under these procedures. NVH
shall present to Escrow Agent NVH's Demand, in
the form of NVH's invoice together with the
affidavit of NVH's CEO or Secretary that 1) the
invoiced amounts represent either unreimbursed
expenses, costs of defense, or judgment, paid by
NVH in the Biggs case; 2) Written demand (a copy
of which shall be attached) has been made upon
Spink for payment of the invoice at least thirty
days prior to the date of presentation to escrow,
and the demand has not been satisfied; 3) The
invoiced amounts are properly due under the
indemnity commitments of this Agreement. The
operation and administration of the escrow,
together with the manner in which claims
submitted to the Escrow Agent are to be handled,
are set forth within the Escrow Agent attached
hereto as Exhibit "D".
1.8.2 The Last Shares. The Last Shares (defined hereafter to
include the Biggs Reserve) shall be held in escrow by the Escrow Agent
until the later of: (i) Spink's satisfaction and payment in full to NVH
of the Note attached hereto at Exhibit "C"; and (ii) the expiration of
the restrictions upon resale identified at Sections 1.8.3 and 1.8.4
hereafter.
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1.8.3 Restrictions upon Resale. Neither Spink nor the Escrow
Agent shall sell, transfer or permit the sale or transfer of the Last
Shares until the later of: (i) Spink's payment in full to NVH of the
Note attached hereto at Exhibit "C"; and (ii) subject to Section 1.8.4
hereafter, the expiration of the "Lockup Period" which shall be defined
as the one year anniversary of this Agreement. The Lockup Period shall,
however, expire earlier as to that number of the Last Shares that is
determined by multiplying the number of Last Shares then being held in
escrow by the percentage of shares sold by Andrew Panzo prior to the
one year anniversary of this Agreement as compared to the 900,000
shares owned by Andrew Panzo as of May 11, 2000 (assuming for this
purpose that he exercised all of his outstanding options). For example,
if Mr. Panzo exercises options for and sells 450,000 shares prior to
the one year anniversary, thereafter the Escrow Agent would be
permitted to allow Mr. Spink to sell 50% of the Last Shares from
escrow, provided, however, until the Note is paid in full, the
provisions of Section 1.8.4. would apply to the sale of such shares.
1.8.4 Resale of the Last Shares prior to Satisfaction in full
of the Note. Upon expiration of the Lockup Period, however, prior to
the satisfaction of the Note in full, the Escrow Agent shall only be
permitted to enable Spink to withdraw from escrow that applicable
portion of the Last Shares as is permitted by virtue of Section 1.8.3
hereunder, provided: (i) the Last Shares to be withdrawn from escrow
are being publicly sold into the market to an "independent third party"
(defined as a purchaser not related in any manner by blood, family
relations or any business affiliations or transactions with Spink or
Merus) or are privately sold to an "independent third party" at
prevailing market prices, AND, the Escrow Agent takes whatever steps
are necessary so as to insure that fifty percent (50%) of the gross
proceeds derived from such sales or transfers are immediately paid over
to NVH towards the repayment in full of the Note. Once the Note has
been repaid in full, the Lockup Period has expired and the conditions
to the release of the Biggs Reserve Shares have been satisfied, the
Last Shares (including the shares formerly identified as the Biggs
Reserve Shares) shall be released by the Escrow Agent to Spink and the
escrow may be terminated.
2. Other Agreements of the Parties. For and in consideration of the mutual
covenants and agreements contained in this Agreement, the parties do hereby
agree as follows:
2.1 Advance to Spink. Upon the Closing, NVH will advance the sum of
$250,000 to Spink. The $250,000, plus another sum of $60,000 (in recognition of
other NVH prior advances on behalf of Mr. Spink) shall be due and payable by
Spink to NVH, as evidenced by a Note in the principal amount of $310,000 which
Spink shall deliver to NVH at the Closing. The Note shall be in the form
attached hereto as Exhibit "C".
2.2 Collateral for Repayment. As collateral for the repayment of the
Note, upon the Closing, Spink agrees to deliver the Lockup Shares to the Escrow
Agent to be held by the Escrow Agent pursuant to the terms hereof and in
accordance with the Escrow Agreement attached hereto as Exhibit "D."
2.3 Release of Spink, et al. Upon the Closing, NVH agrees to provide a
release to Spink and Merus in accordance with the terms of the General Release
attached hereto as Exhibit "F".
2.4 Release of NVH et. al. Upon the Closing, Spink and others agree to
provide a release to NVH and others in accordance with the terms of the General
Release attached hereto as Exhibit "G".
2.5 Payment of Accrued Salary. Upon the Closing, NVH will pay to Spink
three months of salary due under his employment agreement as it was in effect as
of October 1999, subject to standard and customary withholding for federal and
state payroll based taxes.
2.6 Delivery of Shares. The Resolution Shares, Lockup Shares and
Liquidity Shares shall be delivered by NVH in the manner described in Section
1of this Agreement. The Return Shares shall be delivered to by Spink NVH for
cancellation, each to be delivered with fully executed stock powers enabling
transfer.
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2.7 Indemnification.
2.7.1. Biggs Matter. Spink will indemnify, defend, and hold
NVH harmless from any and all expenses, including counsel
fees, incurred by it in connection with the Biggs case, as
well as any judgment entered against NVH in the Biggs case.
NVH may retain its own counsel to defend this matter.
2.7.2. Rosendahl Matter. NVH has in full discharge of its
responsibilities under the Rosendahl case, agreed to deposit
the Rosendahl shares and the Steuer shares with the
appropriate court, or otherwise tender them as deemed
appropriate by their counsel in consultation with Spink's
counsel. To the extent that following the date of the Closing
NVH is caused to incur additional expenses including counsel
fees, issue additional shares, or pay a judgment in the
Rosendahl case, Spink agrees to indemnify, defend and hold NVH
harmless from and against all such expenses, judgments or the
issuance of such shares. NVH may, however, avoid the assertion
of any such claim for indemnity by cancelling the Rosendahl
contingency shares after ten days written notice to Spink
equal in "value" to the claim for indemnity. For this purpose,
"value" of the shares shall be determined as the average
closing trading price of the NVH common stock for the five (5)
trading days prior to the date notice was sent by NVH to Spink
of a claim under this section.
2.8 SEC Filings. Promptly following the Closing of this Agreement, NVH
shall cause to be filed a Form 8K with the SEC, containing in general form and
substance the following text:
In earlier filings with the Commission, including those dated May 11,
2000 (10k); June 29, 2000 (S1/A); August 4, 2000 (DEF 14A) and August
11, 2000 (10Q), we noted ongoing lawsuits with Mr. Douglas B. Spink.
All matters between us and Mr. Spink have now been settled, on terms
that are mutually agreeable and that resolve all open issues between
the parties, and under which any allegations of wrongdoing have been
withdrawn. We have accordingly settled all claims in such cases on this
basis: 1) Mr. Spink has agreed to allow us to re-acquire for
cancellation 1,212,876 shares of his stock which leaves him with
835,000 shares of our stock in place of 2,047,876 shares originally
issued to him; 2) Mr. Spink's salary will be paid for the last three
months of 1999; 3) Mr. Spink has agreed to lock up a portion of his
shares for a one-year period; 4) We have agreed to lend Mr. Spink
$250,000, repayable either three years from issue date or out of half
the proceeds from the sale of any shares of our stock from the
locked-up shares; 5) Mr. Spink has agreed to add to the note for the
funds advanced the sum of $60,000 to cover certain advances previously
made; and 6) Mr. Spink has agreed to hold us harmless and defend us in
a lawsuit filed by a Mr. Biggs.
2.9 Release of Webmodal, Inc. On or before the Closing, Spink and Merus
will execute a General Release in the form attached hereto at Exhibit "H"
releasing Webmodal, Inc. from and against any and all obligations under a
promissory note to Spink and/or Merus Partners dated August 2, 1999 in the
principal amount of $245,588.23.
2.10 Non-Disparagement. Each of the parties agree to the terms of the
Mutual Non-Disparagement Agreement attached hereto at Exhibit "I".
2.11 The Uphoff Shares. At the Closing, Spink shall sell 10,000 shares
for no consideration to Barry Uphoff in a private transaction.
3. The Closing. A closing (the "Closing") shall occur as soon as possible
following the satisfaction of the conditions to Closing identified at Section 4
hereafter; however, in no event later than August 25, 2000. The Closing shall be
held in the offices of the Escrow Agent, or by means of facsimile or other means
deemed acceptable by the parties.
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4. Conditions to Closing.
(a) All obligations of NVH under this Agreement are subject to the
fulfillment, on or before the Closing, of each of the following conditions, any
one or all of which may be waived by NVH:
(i) The Board of Directors of NVH shall have approved the
execution of this Agreement and the related Exhibits, and the
consummation of the transactions described therein.
(ii) The representations and warranties of Spink and Merus
contained in this Agreement or in any certificate or document
delivered in connection with this Agreement shall be true in
all respects as of the time of the Closing as though such
representations and warranties were made at and as of such
time.
(iii) Spink and Merus shall have performed and complied in all
material respects with all covenants and agreements required
by this Agreement.
(iv) Spink and Merus shall have executed and delivered all of
the Exhibits referred to in this Agreement.
(v) The Escrow Agent shall have executed the Escrow Agreement.
(vi) Each of Target Growth, Aspen Value and Barry Uphoff shall
have executed and delivered investment letters in similar form
and substance to that of Exhibit "I".
(vii) Fully executed stipulations of dismissal in the form
attached hereto as Exhibit "J" have been delivered to NVH with
respect to the Spink Oregon, Spink Delaware, and NVH Delaware
cases.
(viii) Spink shall have delivered the Lockup Shares to the
Escrow Agent to be held in accordance with the Escrow
Agreement, together with fully executed stock powers enabling
transfer.
(ix) Spink shall have delivered the Return Shares to NVH for
cancellation.
(x) Spink shall have delivered the Balance Shares, together
with executed irrevocable stock powers enabling transfer
together with executed irrevocable stock powers enabling such
cancellation.
(xi) Spink and Merus shall have executed a General Release in
favor of NVH and a General Release in favor of Webmodal, Inc.
(xii) Spink and Merus shall have executed the Note.
(b) All obligations of Spink and Merus under this Agreement are subject
to the fulfillment, on or before the Closing, of each of the following
conditions, any one or all of which may be waived by Spink or Merus:
(i) The representations and warranties of NVH contained in
this Agreement or in any certificate or document delivered in
connection with this Agreement shall be true in all respects
as of the time of the Closing as though such representations
and warranties were made at and as of such time.
(ii) NVH shall have performed and complied in all material
respects with all covenants and agreements required by this
Agreement.
(iii) NVH shall have executed and delivered all of the
Exhibits referred to in this Agreement.
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(iv) Fully executed stipulations of dismissal in the form
attached hereto as Exhibit "J" have been delivered to NVH with
respect to the Spink Oregon, Spink Delaware, and NVH Delaware
cases.
(v) The Escrow Agent shall have executed the Escrow Agreement.
(vi) NVH shall have transferred the Resolution Shares in the
manner required hereunder.
(vii) NVH shall have transferred the Liquidity Shares in the
manner required hereunder.
(viii) NVH shall have executed a General Release in favor of
Spink.
(ix) NVH shall have made the advance and paid the accrued
salary required hereunder.
(x) Spink shall have delivered the Uphoff Shares to Barry
Uphoff.
5. Representations and Warranties.
5.1 Each of the corporate parties represent and warrant that they are
duly organized, validly existing and in good standing under the laws of their
respective states of incorporation and have full power and authority to execute
and deliver this Agreement and to assume and perform all obligations thereunder.
Neither the execution nor the delivery of this Agreement by any such party, or
any of the transactions contemplated herein, (i) will result in a violation of
the certificates of incorporation or the by-laws of such corporations; (ii)
conflict with, or constitute a breach or default under any applicable judgment,
order, writ, injunction or decree of any court of any applicable law or any
applicable rule or regulation of any administrative agency or governmental or
regulatory authority or (iii) violates, conflicts with, or constitutes a default
(or an event or condition that, with notice or lapse of time, or both, would
constitute a default) under any contract, commitment, understanding,
arrangement, agreement or restriction of any kind or character to which any such
corporation is a party or may be bound.
6. Miscellaneous.
6.1 Actions Prior to Closing. Each party agrees to cooperate with each
other in good faith to the fullest extent reasonable to promptly satisfy all
conditions to the consummation of this Agreement.
6.2 Stay of Outstanding Litigation. Immediately upon execution of this
Agreement, Spink, Merus and NVH, though their trial counsel, shall advise the
Courts in the NVH Delaware, Spink Delaware and Spink Oregon matters that the
parties have executed this Agreement and that all proceedings pending in these
matters shall be stayed pending Closing, provided further that, in the event
Closing does not occur, NVH shall have an additional ten (10) days after the
date this Agreement terminates to file responses to the amended complaint in the
Spink Oregon matter and in response to the motions to dismiss or transfer filed
by Spink and Merus in the NVH Delaware matter. Spink, Merus and NVH shall
instruct their counsel to execute whatever stipulations or motions may be
required by the Courts to give effect to the provisions of this Section 6.2.
6.3 Arbitration. If any controversy, disagreement or issue shall arise
between the parties hereto in the performance, interpretation and application of
any part of this Agreement, the parties hereto agree to submit such controversy,
disagreement or issue to arbitration in accordance with the Commercial
Arbitration Rules, then obtaining, of the American Arbitration Association. The
arbitrators shall be obligated to apply the laws of the State of Delaware and
the arbitrators shall not be empowered to award punitive damages. Venue for any
such arbitration shall be in Chicago, Illinois. The arbitrators' decision on all
matters within their authority shall be final and binding, and judgment to
enforce the award may be entered in any court having jurisdiction. The
arbitrators shall be empowered to award specific performance remedies without
proof of irreparable harm, to award interim injunctive relief, and also to award
costs and fees to any party that substantially prevails. Either party may serve
upon the other notice stating that such party desires to have such controversy
settled by arbitration and setting forth the name and address of the person whom
such party has designated to act as an arbitrator. Within fifteen (15) days
after receipt of such notice, the other party shall designate a person to act as
arbitrator and shall notify the party requesting arbitration of such designation
and the name and address of the person so designated. If the party upon whom
such written request for arbitration is served, shall fail to designate its
arbitrator within fifteen (15) days after receipt of such notice, then the
arbitrator designated by the party requesting arbitration shall apply to the
American Arbitration Association, Chicago Chapter, or its successor to designate
and appoint such second arbitrator. The two (2) arbitrators designated as
aforesaid shall meet within ten (10) days after the second arbitrator is
appointed and if within thirty (30) days after the second arbitrator is
appointed they shall not resolve the question or items in dispute, they shall
promptly select a third arbitrator. If the two arbitrators have not selected a
third arbitrator within such thirty (30) day period, then either arbitrator, on
five (5) days notice in writing to the other, or both arbitrators, shall apply
to the American Arbitration Association, Chicago Chapter, or its successor to
designate and appoint a third arbitrator.
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6.4 Public Announcements. Subject to the provisions of Section 2.8
herein, Spink and NVH shall consult with each other before issuing any press
release or otherwise making any public statements with respect to the subject
matter of the Settlement Agreement or other transactions contemplated by this
Agreement and shall not issue any other press release or make any other public
statement without the consent of the other party, except as may be required by
law or by obligations pursuant to any listing agreement with a national
securities exchange.
6.5 Expenses. Except as otherwise expressly provided herein, all costs
and expenses incurred in connection with the Agreement and the transactions
contemplated hereby shall be paid by the party incurring such expenses whether
or not the Agreement is consummated.
6.6 Reserved Rights. The parties acknowledge that Mr. Spink's rights as
a shareholder of NVH as to any matters first arising under applicable law after
the Closing generally are not released.
6.7 Notice. "Notice" means notice given as described here. Notice will
be given to Spink or Merus at:
Mr. Douglas B. Spink
Merus Partners Inc.
15455 NW Greenbrier Parkway, Suite 210
Beaverton OR 97006
With a copy to:
Mark A. Turner
William C. Campbell
Ater Wynne LLP
222 S.W. Columbia, Suite 1800
Portland, Oregon 97201
and to NVH at its principal offices, attn: Stephen Cohen,
General Counsel.
Each party can change its own Notice address and designated Notice recipient, by
Notice. Notice shall be effective when actually received by the designated
person, in any form that leaves a hard copy record of the notice in that
person's possession. If sent certified or registered mail, postage prepaid,
return receipt requested, notice is considered effective on the date the return
receipt shows the notice was accepted, refused, or returned undeliverable.
6.8 Severability. Each clause of this Agreement is severable. If any
clause is ruled void or unenforceable, the balance of the agreement shall
nonetheless remain in effect.
6.9 Non-waiver. A waiver of one or more breaches of any clause of this
agreement shall not act to waive any other breach, whether of the same or
different clauses.
6.10 Assignment. Neither this Agreement nor any agreement made part of
this Agreement by exhibit may be assigned without the express written consent of
each party, which consent will not be unreasonably withheld.
6.11 Governing law, Jurisdiction. This agreement is governed by the
laws of the State of Delaware.
6.12 Integration. This agreement is the complete agreement between the
parties as of the date hereof, and supersedes all prior agreements, written or
oral. It may be modified only in writing signed by the original parties hereto,
or by their successors or superiors in office.
6.13. Counterparts. This Agreement may be executed in any number of
counterparts, and by different parties hereto in separate counterparts, and may
be delivered by facsimile transmission, each of which when so executed shall be
deemed an original and all of which taken together shall constitute but one and
the same agreement.
6.14. Exhibits. The parties acknowledge that the Exhibits will be
provided and agreed upon between the date hereof and the Closing.
9
<PAGE>
Merus Partners, Inc. Net Value Holdings, Inc.
By: By:
----------------------------------- --------------------------------
Douglas B. Spink, CEO Andrew Panzo, CEO
Douglas B. Spink Strategicus Partners, Inc.
By:
----------------------------------- --------------------------------
Andrew Panzo, CEO
Ater Wynne LLP, as Escrow Agent
By:
-----------------------------------
Mark A. Turner, Partner
10
