XXXXXXXXXXXXX.XXX, INC.
000 Xxxxxxx Xxx., 00xx Xxxxx
Xxx Xxxx, XX 00000
August 15, 2005
Innopump, Inc.
000 Xxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Re: Extension of Liquidity Condition
Gentlemen:
I refer to the Agreement and Plan of Merger dated as of June 9, 2005 (the
"Merger Agreement") among Xxxxxxxxxxxxx.xxx, Inc. ("Carsunlimited"), Pump
Acquisition Corp. ("PAC") and Innopump, Inc. ("Innopump"), which, as permitted
by Section 5.2.7 of the Merger Agreement, has had extended to August 15, 2005
the date by which Carsunlimited must have no less than $4,000,000 in cash or
cash equivalents and no more than $80,000 in liabilities ("Liquidity
Condition").
Carsunlimited has requested that the Merger Agreement be amended to provide that
the Liquidity Condition be extended to September 15, 2005.
You have agreed to extend the date to September 15, 2005, subject to the
following changes in the Liquidity Condition:
a. That, if the Liquidity Condition is not met by September 9, 2005, we deliver,
or have delivered to Innopump, no less than $425,000 as a loan on substantially
the same terms as the $300,000 8% Senior Secured Promissory Note issued to Ocean
Drive Opportunities Fund, LLC ("Ocean Drive") on October 19, 2004 by Sea Change
Group, LLC ("Sea Change"), referred to in our letter of July 20, 2005, (i.e. 1
year maturity date; 8% interest; secured). The extension shall automatically
terminate on September 9 if such funds are not delivered.
b. The Merger Agreement provide that upon completion of the Liquidity Condition,
Innopump shall be advanced $1,000,000 (less the loan amount set forth in
subsection (a), if such loan is made) to cover expenses (including operating and
audit costs as well as legal counsel of Carsunlimited to prepare the Form 8-K)
for a period of no less than 90 days, during which Innopump shall use all
commercially reasonable efforts to complete audit and other obligations
precedent to the closing of the Merger under the new SEC rules. Once the
Liquidity Condition has been completed, the $1,000,000 advance will reduce the
amount of the Liquidity Condition requirement for closing.
c. Pending fulfillment of the Liquidity Condition, Innopump shall be released
and permitted to discuss with private equity sources other avenues of financing,
understanding that Carsunlimited shall have the absolute right to complete the
transaction under the Merger Agreement upon satisfying the Liquidity Condition.
Re: Extension of Liquidity Condition August 11, 2005
Page 2 of 3
Carsunlimited and PAC have agreed to the foregoing, and we have all jointly
agreed that the Merger Agreement shall be deemed amended to provide for these
provisions and such other revision as may be required to fulfill the newly
enacted SEC requirements on filings mandated for a merger of this type.
This extension is further subject to the consent and approval of Ocean Drive to
grant to Innopump the right to force the conversion of (i) the $400,000 8%
Senior Secured Convertible Promissory Note issued to Ocean Drive on December 28,
2004 and (ii) the $300,000 8% Senior Secured Promissory Note issued to Ocean
Drive on October 19, 2004 by Sea Change (collectively, the "Notes") in
accordance with the applicable terms of the $400,000 Note at any time prior to
repayment thereof. This right shall not otherwise change the rights of Ocean
Drive under the Notes and shall not affect the new note referred to above in
section a.
Kindly evidence your acceptance of and agreement to the foregoing by signing
this letter where- upon it shall be binding upon us effective as of the date
hereof. This letter may be executed in counterparts, all of which shall
constitute one and the same instrument.
Re: Extension of Liquidity Condition August 11, 2005
Page 3 of 3
Very truly yours,
XXXXXXXXXXXXX.XXX, INC.
on behalf of itself and PAC
By: /s/ Xxxxxx Xxxxx
-----------------------------------
Authorized Signator
Name: Xxxxxx Xxxxx
Title: President
Accepted and agreed:
--------------------
Innopump, Inc. Ocean Drive Opportunities Fund, LLC
By:/s/ Xxxx Block By: /s/ Xxxxxx Xxxxx
------------------------------ -----------------------------------
Authorized Signator Authorized Signator
Name: Xxxx Block Name: Xxxxxx Xxxxx
Title: President Title: President
