Contract
Exhibit
10.7
TERMINATION
AGREEMENT
(this
“Agreement”),
dated
as of April 3, 2007, by and among COVALENCE
SPECIALTY MATERIALS HOLDING CORP.,
a
Delaware corporation (“CSMHC”),
COVALENCE
SPECIALTY MATERIALS CORP.,
a
Delaware corporation (“CSMC”)
and
APOLLO
MANAGEMENT V, L.P., a
Delaware limited partnership (“Apollo
V”).
WHEREAS,
CSMHC,
CSMC and Apollo V entered into that certain Management Agreement, dated as
of
February 16, 2006 (the “Covalence
Management Agreement”);
WHEREAS,
Xxxxx
Plastics Corporation, Xxxxx Plastics Group, Inc. (“BPGI”)
and Apollo
Management VI,
L.P.,
a
Delaware limited partnership (“Apollo
VI”)
entered into that certain Management Agreement, dated as of September 20, 2006
(the “Xxxxx
Management Agreement”);
WHEREAS, CSMHC
and
BPGI have entered into that certain Agreement and Plan of Merger and Corporate
Reorganization, dated as of March 9, 2007 (the “Merger
Agreement”),
pursuant to which, at the Effective Time (as defined in the Merger Agreement)
BPGI will be merged with and into CSMHC, the separate existence of BPGI shall
cease and CSMHC will continue its corporate existence under Delaware law as
the
Surviving Corporation (as defined in the Merger Agreement) and will be renamed
“Xxxxx Plastics Group, Inc.” (the “Merger”);
and
WHEREAS, pursuant
to Section 5.9 of the Merger Agreement BPGI and CSMHC have agreed that, (i)
as
of no later than immediately prior to the Effective Time, CSMHC shall terminate,
as of the Closing Date (as defined in the Merger Agreement), the Covalence
Management Agreement, without the payment of any fees thereunder, and (ii)
on
the Closing Date, the Surviving Corporation shall agree to be bound by the
Xxxxx
Management Agreement.
NOW,
THEREFORE,
for
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged by the parties hereto:
1. CSMHC,
CSMC and Apollo V agree, as of immediately prior to the Effective Time, that
the
Covalence Management Agreement will be terminated, without the payment of any
additional fees thereunder (including, for the avoidance of doubt, the fee
payable upon termination of the Covalence Management Agreement pursuant to
Section 4(a) thereof), and shall be of no further force and effect, other than
the indemnity provisions which shall survive and be binding upon the Surviving
Corporation; and
2. CSMHC,
as
the Surviving Corporation in the Merger, agrees, as of the Closing Date, to
be
fully bound by the terms of the Xxxxx Management Agreement with
the
same force and effect as if it were a party thereto on the date
thereof.
This
Agreement may be executed in several counterparts, each of which shall be deemed
an original and all of which together shall constitute a single
instrument.
W/1118103v3
Signature
page to follow.
IN
WITNESS WHEREOF, the parties have caused this Agreement to be executed as of
the
date first above written.
COVALENCE
SPECIALTY MATERIALS
HOLDING
CORP.
By:
/s/
Xxxxxx X. Xxxxxxxxx
Name:
Xxxxxx X. Xxxxxxxxx
Title:
Chairman
COVALENCE
SPECIALTY MATERIALS
HOLDING
CORP.
By:
/s/
Xxxxx X. Xxxxx
Name:
Xxxxx X. Xxxxx
Title:
President, Chief Executive Officer
COVALENCE
SPECIALTY MATERIALS CORP.
By:
/s/
Xxxx X. Xxxxxx
Name:
Xxxx X. Xxxxxx
Title:
Vice President, General Counsel and
Corporate
Secretary
APOLLO
MANAGEMENT V, L.P.
By:
AIF V
Management, LLC, its general partner
By:
/s/
Xxxxxxx Xxxxxx
Name:
Xxxxxxx Xxxxxx
Title:
Acknowledged
and Agreed:
APOLLO
MANAGEMENT VI, L.P.
By:
AIF
VI Management, LLC,
its
general partner
By:
/s/
Xxxxxxx Xxxxxx
Name:
Xxxxxxx Xxxxxx
Title:
W/1118103v3
