Exhibit 99.1
Holtzman Opportunity Fund, L.P.
Xxxxx Xxxxxxxxx
c/o Jewelcor Management, Inc.
000 X. Xxxxxx-Xxxxx Xxxx.
Xxxxxx-Xxxxx, PA 18702
August 12, 2005
RHO Management Trust I
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxx Xxxxxx
Re: Sale of 166,313 shares of common stock of MM Companies, Inc.
Dear Xx. Xxxxxx:
In connection with the sale by RHO Management Trust I ("RHO") of 136,313
shares of common stock of MM Companies, Inc. ("MMCO") to Xxxxxxxx Opportunity
Fund, L.P. ("Xxxxxxxx") and 30,000 shares of common stock of MMCO to Xxxxx
Xxxxxxxxx ("EG") (collectively, the "Stock"), we wish to confirm the following:
1. RHO has agreed to sell the Stock to Xxxxxxxx and EG as set forth forth
above at a price of $1.20 per share, representing a total purchase price
of $199,575.60 (the "Purchase Price"). The transfer of the Stock shall be
completed on or before August 19, 2005, unless extended by mutual
agreement of the parties (the "Closing Date").
2. RHO, through its authorized representatives, will immediately execute all
documents and take all action necessary to transfer the Stock to Xxxxxxxx
and EG on or before the Closing Date.
3. Xxxxxxxx and EG (or their designee) shall present a bank check to RHO for
the Purchase Price of the Stock. RHO shall deliver the stock certificates
for the Stock, together with completed and signed stock powers, to
Xxxxxxxx and EG upon receipt of the bank check.
4. RHO has made an independent decision to sell the Stock to Xxxxxxxx and EG
based on the information available to it, which RHO has determined is
adequate for that purpose, and RHO has not relied on any information (in
any form, whether written or oral) furnished by Xxxxxxxx or EG or on their
behalf in making that decision.
5. No party to this agreement has rendered any opinion to any other party as
to whether the purchase or sale of the Stock is prudent or suitable, and
no party to this Agreement is relying on any representation or warranty by
any other party except as expressly set forth in this Agreement.
6. Each party acknowledges and represents that it is a sophisticated investor
with respect to the Stock and it has adequate information concerning the
business and financial condition of MMCO and any affiliates of MMCO, and
understands the disadvantage to which any party may be subject on account
of the disparity of information as between the parties. In this
regard, XXX xxxxxxxxxxxx that EF is the President and Chief Operating
Officer of MMCO and that Xxxxxxx Xxxxxxxx is the Chairman and Chief
Executive Officer of MMCO, the President and Chief Executive Officer of
Jewelcor Management, Inc. ("JMI") and indirectly, the majority
shareholders of JMI. XXX further acknowledges that JMI is a substantial
shareholder of MMCO and that Xxxxxxx Xxxxxxxx and EF are affiliated with
Xxxxxxxx. Each party believes, by reason of its business or financial
experience, that it is capable of evaluating the merits and risks of the
sale and of protecting its own interests in connection with the purchase
and sale of the Stock.
7. RHO acknowledges that Xxxxxxx Xxxxxxxx, XX, Xxxxxxxx, JMI and their
affiliates may possess material non-public information not known to RHO
regarding or relating to MMCO or the Stock, including, but not limited to,
information concerning the business, financial condition and any prospects
or restructuring plans of MMCO. XXX further acknowledges that neither JMI,
Xxxxxxxx, XX, Xxxxxxx Xxxxxxxx nor their affiliates shall have any
liability whatsoever (and RHO hereby waives and releases all claims that
it may otherwise have) with respect to the nondisclosure of any such
information, whether before or after the date of this Agreement.
8. Each party expressly releases the other party, their affiliates,
successors and/or assigns and their respective officers, directors,
employees, agents, trustees and controlling persons from any and all
liabilities arising from the failure to disclose non-public information
with respect to MMCO or the Stock, and each party agrees to make no claim
against the other party, their affiliates, successors and/or assigns and
their respective officers, directors, employees, agents, trustees and
controlling persons in respect of the sale of the Stock relating to any
failure to disclose such non-public information.
9. Notwithstanding the foregoing, RHO acknowledges that MMCO (through JMI)
has disclosed to RHO, under an agreement of confidentiality, certain
information relating to MMCO, including matters separately confirmed to
RHO in writing.
10. Investment Representations. Each of Xxxxxxxx and EG hereby represents
that:
(a) It is purchasing the securities provided to be purchased by it
hereunder for its own account, for investment purposes only and not
with a view to, or for sale in connection with, a distribution of
such securities in violation of the Securities Act of 1933
("Securities Act").
(b) It has had access to all information regarding MMCO and its present
and prospective business, assets, liabilities and financial
condition that it reasonably considers important in making the
decision to acquire the securities, and it has had ample opportunity
to ask questions of the appropriate persons concerning such matters.
(c) It is fully aware of: (i) the highly speculative nature of the
securities; (ii) the financial hazards involved; (iii) the
restrictions on transferability of the securities imposed by the
Securities Act; and (iv) the tax consequences of purchase or sale of
its investment in the securities.
(d) It has a preexisting personal or business relationship with MMCO
and/or certain of its officers and/or directors of a nature and
duration sufficient to make it aware of the business and financial
circumstances of MMCO. By reason of its business or financial
experience, it is capable of evaluating the merits and risks of the
purchase or sale of securities, has the ability to protect its own
interests in this transaction and is financially capable of bearing
a total loss of its investment in the securities it is purchasing.
(e) At no time was it presented with or solicited by any publicly issued
or circulated newspaper, mail, radio, television or other form of
general advertising or solicitation in connection with the its
investment in securities.
(f) It understands and acknowledges that, in reliance upon the
representations and warranties made by it herein, the securities are
not being registered with the SEC under the Securities Act or being
qualified under any applicable state securities laws, but instead
are intended to be transferred under an exemption or exemptions from
the registration and qualification requirements of the Securities
Act and any applicable state securities laws, which impose certain
restrictions on its ability to transfer the securities.
(g) It understands that it may not transfer any securities unless such
transfer is registered under the Securities Act or qualified under
any applicable state securities laws or unless exemptions from such
registration and qualification requirements are available. It
understands that only the issuer of securities may file a
registration statement with the SEC or applicable state securities
commissioners and that the issuer is under no obligation to do so
with respect to the securities. It has also been advised that
exemptions from registration and qualification may not be available
or may not permit it to transfer all or any of the securities in the
amounts or at the times proposed by it.
(h) It has been advised that SEC Rule 144 promulgated under the
Securities Act, which permits certain limited sales of unregistered
securities, requires that the securities be held for a minimum of
one (1) year, and in certain cases two (2) years, after they have
been purchased and paid for (within the meaning of SEC Rule 144)
from the issuer or an affiliate of the issuer, if applicable, before
they may be resold under SEC Rule 144, and that under certain
circumstances where the seller is not an "affiliate" as defined
under the Securities Act, the holding period of the seller will
carry over to purchaser.
(i) It is an "accredited investor" within the meaning of Rule 501 of
Regulation D of the Securities Act of 1933, as amended.
(j) It has all necessary power and authority to execute and deliver this
letter agreement, to perform its obligations hereunder and to
consummate the transactions contemplated hereby; and the execution
and delivery of this Agreement by Xxxxxxxx, and the consummation by
Xxxxxxxx of the transactions contemplated hereby, have been duly and
validly authorized by all necessary corporate action on the part of
Xxxxxxxx, and no other corporate proceedings on the party of
Xxxxxxxx are necessary to authorize this Agreement or to consummate
the transactions contemplated hereby.
11. Governing Law. This letter agreement shall be governed by and construed in
accordance with the laws of the State of New York.
Xxxxxxxx Opportunity Fund, L.P.
By: Xxxxxxxx Financial Advisors, LLC,
Its General Partner
By: /s/ Xxxxxxx X. Xxxxxxxxx
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Printed Name: Xxxxxxx X. Xxxxxxxxx
Its: General Counsel
/s/ Xxxxx Xxxxxxxxx
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Xxxxx Xxxxxxxxx
AGREED TO
and accepted this 12th day of August, 2005
RHO Management Trust I
By: Rho Capital Partners, Inc., its Investment Advisor
By: /s/ Xxxxxxx X. Xxxxxx
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Printed Name: Xxxxxxx X. Xxxxxx
Its: Attorney in fact
