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TERMINATION OF AGREEMENT AND MUTUAL RELEASE
This
Termination of Agreement and Mutual Release (this
“Agreement”) is made and entered into as of the
5
th day
of September 2007 by and between, on the one hand, AVP, Inc.
(“AVP”) and, on the other hand, Shamrock Capital Growth
Fund II, L.P. (“Shamrock Capital”), AVP Holdings, Inc.
(“AVP Holdings”) and AVP Acquisition Corp. (“AVP
Acquisition” and together with AVP Holdings and Shamrock
Capital, collectively “Shamrock”).
A.
AVP,
AVP Holdings and AVP Acquisition are parties to that certain
Agreement and Plan of Merger dated April 5, 2007 (the
“Merger Agreement”); and
B.
The
Parties wish to fully and finally terminate all obligations
each has to the other under the Merger Agreement and to
release all claims that they may have against each
other.
NOW,
THEREFORE, based on the foregoing and in consideration for the
covenants contained herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the Parties, and each of them, agree as
follows:
1.
Definitions .
As used in this Agreement, the following terms shall have the
meanings indicated:
a.
“AVP
Releasees” refers to and includes AVP and each and every
one of its past and present officers, directors, stockholders,
shareholders, partners, members, affiliates, independent
contractors, agents, representatives, employees, attorneys,
fiduciaries, trustees, administrators and
successors.
b.
“AVP
Releasors” refers to and includes AVP and each and every
one of its past and present officers, directors, stockholders,
shareholders, partners, members, affiliates, independent
contractors, agents, representatives, employees, attorneys,
fiduciaries, trustees, administrators and
successors.
c.
“Claims”
refers to and includes all claims, demands, rights, causes of
action, rights of action, rights of subrogation, rights of
indemnity, rights to reimbursement, rights to payment,
damages, liens and remedies of every kind or nature
whatsoever, whether at law, in equity, or otherwise, and
whether the same are or any of the same is known or unknown to
the Parties at the time of their execution of this
Agreement.
d.
“Obligations”
refers to and includes all obligations, duties, liabilities,
damages, costs, fees (including, but without limitation
thereto, attorneys' fees), expenses and debts of every kind
and nature whatsoever, whether the same are or any of the same
is known or unknown to the Parties at the time of their
execution of this Agreement.
e.
“Parties”
refers to AVP and Shamrock.
f.
“Party”
refers to any of AVP or Shamrock.
g.
“Released
Parties” refers to the AVP Releasees and the Shamrock
Releasees.
h.
“Releasors”
refers to the AVP Releasors and the Shamrock
Releasors.
i.
“Shamrock
Releasees” refers to and includes Shamrock Capital, AVP
Holdings and AVP Acquisition and each and every one of their
respective past and present officers, directors, stockholders,
shareholders, partners, members, affiliates, independent
contractors, agents, representatives, employees, attorneys,
fiduciaries, trustees, administrators and
successors.
j.
“Shamrock
Releasors” refers to and includes Shamrock Capital, AVP
Holdings and AVP Acquisition and each and every one of their
respective past and present officers, directors, stockholders,
shareholders, partners, members, affiliates, independent
contractors, agents, representatives, employees, attorneys,
fiduciaries, trustees, administrators and
successors.
2.
General .
a.
It
is understood that this Agreement does not constitute an
admission by any of the Parties of any wrongdoing
whatsoever.
b.
The
Parties have agreed to enter into this Agreement for the
purpose of fully and finally (i) terminating the Merger
Agreement and all Obligations each Party has to the other
arising out of, resulting from or relating to the Merger
Agreement or the transaction contemplated therein (ii)
releasing all Claims each Party may have against the other
arising out of, resulting from or relating to the Merger
Agreement or the transaction contemplated
therein.
3.
Termination .
a.
The
Parties hereby terminate in all respects the Merger Agreement
and all Obligations each Party has to the other arising out
of, resulting from or relating to the Merger Agreement or the
transaction contemplated therein.
b.
AVP
shall pay to Shamrock Capital upon the execution of this
Agreement the sum of Two Hundred Forty Thousand Dollars
($240,000) in cash, wired to an account to be designated by
Shamrock Capital.
c.
Upon
the earlier of (i) the date one year after the date hereof,
(ii) the date upon which AVP consummates a transaction or
series of related transactions pursuant to which AVP raises at
least Five Million Dollars ($5,000,000) and (iii) any
transaction or series of related transactions pursuant to or
as a consequence of which any person or group of related
persons in the aggregate acquire(s) (x) capital stock of AVP
possessing the voting power to elect a majority of the board
of directors of AVP (whether by merger, consolidation,
reorganization, combination, sale or transfer of AVP’s
capital stock), or (y) all or substantially all of AVP’s
assets determined on a consolidated basis. AVP shall pay to
Shamrock Capital One Hundred Fifty Thousand Dollars ($150,000)
in cash, wired to an account to be designated by Shamrock
Capital. If AVP does not pay when due the amount required by
this Section 3(c), then interest (calculated on the basis of a
360-day year and the actual number of days elapsed) will
accrue at the rate of twenty percent (20%) per annum,
compounded quarterly, on the unpaid amount.
d.
Shamrock
shall upon the execution of this Agreement immediately cease
all uses of the name “AVP” and shall, within ten
(10) days of the execution of this Agreement, cause AVP
Holdings and AVP Acquisition to change their respective names
to eliminate the use of “AVP”.
4.
Releases .
a.
The
AVP Releasors do hereby fully, finally and forever release and
discharge the Shamrock Releasees, and each of them, from any
and all Claims, known or unknown, at law or in equity, which
the AVP Releasors, or any of them, may have or claimed to have
had, against the Shamrock Releasees, and each of them, arising
at any time in the unlimited past to and including the date of
this Agreement, arising out of, resulting from or relating to
the Merger Agreement or the transaction contemplated
therein.
b.
The
Shamrock Releasors do hereby fully, finally and forever
release and discharge the AVP Releasees, and each of them,
from any and all Claims, known or unknown, at law or in
equity, which the Shamrock Releasors, or any of them, may have
or claimed to have had, against the AVP Releasees, and each of
them, arising at any time in the unlimited past to and
including the date of this Agreement, arising out of,
resulting from or relating to the Merger Agreement or the
transaction contemplated therein.
c.
The
Releasors, and each of them, acknowledge that they have been
advised by legal counsel and are familiar with the provision
of Section 1542 of the California Civil Code, which provides
as follows:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES
NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF
EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE
MATERIALLY AFFE
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