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EXHIBIT 10.11
Execution Version
TERMINATION AND RELEASE AGREEMENT, dated as of May 22, 1999
(the "Agreement"), among The X. X. Xxxxxxx Company, Inc., a
North Carolina corporation (the "Company"), and the
stockholders of the Company signing this Agreement as Class B
Stockholders (the "Class B Stockholders").
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INTRODUCTION
The Company, certain stockholders of the Company and
Charlesbank Equity Fund IV, Limited Partnership, a Massachusetts limited
partnership (the "Purchaser"), have entered into a Stock Purchase Agreement (the
"Stock Purchase Agreement"), dated as of April 21, 1999, pursuant to which such
stockholders have agreed to sell their shares of common stock of the Company to
the Purchaser on the terms and conditions set forth therein.
The Class B Stockholders have exercised their rights to sell
their shares of Class B Common Stock of the Company to the Purchaser under the
"tag-along" provision set forth in Section 1.2 of the Class B Stockholder
Agreement (as defined below).
In consideration of the mutual benefits to be derived from the
transactions contemplated by the Stock Purchase Agreement and the execution and
delivery thereof by the Class B Stockholders and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, and
as a condition to the consummation of the transactions contemplated therein, the
parties have agreed to enter into this Agreement.
The parties agree as follows:
SECTION 1. Termination and Release.
(a) Release by Class B Stockholders. Effective upon the
closing of the transactions contemplated by the Stock Purchase Agreement (the
"Closing"), each Class B Stockholder, by executing this Agreement, hereby (i)
acknowledges and agrees that the amount of the Aggregate Purchase Price (as
defined in the Stock Purchase Agreement) paid to such Class B Stockholder is in
full satisfaction of any rights of such Class B Stockholder in respect of such
Class B Stockholder's Additional Shares (as defined in the Stock Purchase
Agreement) and (ii) releases, remises, acquits and forever discharges each of
the Company, each of its subsidiaries, the Purchaser, and each of their
respective affiliates, stockholders, partners, officers, directors, employees,
agents, attorneys and representatives from any and all actions, liabilities,
charges, complaints, causes of action, suits, proceedings, demands, costs,
losses, damages, expenses and all other claims whatsoever (whether in contract,
tort, pursuant to statute, known or unknown) of whatever nature and kind
(collectively, "Claims") arising against such person by such Class B Stockholder
in such Class B Stockholder's capacity as a stockholder of the
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Company or under any of the agreements terminated in accordance with Section
1(c) or the course of dealing or relationships in connection therewith, from the
beginning of time through the date hereof (other than, in any case, Claims
arising out of the express provisions of (A) this Agreement, (B) the Stock
Purchase Agreement or (C) Section 3.13 of the Merger Agreement (as defined below
in Section 1(c)).
(b) Release by Company. Effective upon the Closing, the
Company, by executing this Agreement, hereby releases, remises, acquits and
forever discharges each Class B Stockholder, each of their respective
subsidiaries and each of their respective affiliates, stockholders, partners,
officers, directors, employees, agents, attorneys and representatives from any
and all Claims arising against such person by the Company under any of the
agreements terminated in accordance with Section 1(c) or the course of dealing
or relationships in connection therewith, from the beginning of time through the
date hereof (other than, in any case, Claims arising out of the express
provisions of (A) this Agreement, (B) the Stock Purchase Agreement, (C) Section
2.2(a) or 3.6 of the Merger Agreement, (D) Section 3.12 of the Merger Agreement
(as amended and modified in Section 3(a) below) or (E) Section 4.1 of the Class
B Stockholder Agreement (as defined below in Section 1(c)).
(c) Termination of Agreements. Effective upon the Closing, the
following agreements are hereby terminated and shall be of no further force and
effect: (i) the Agreement and Plan of Merger, dated as of March 10, 1998 (the
"Merger Agreement"), between and among the Company, ITCO Merger Corporation,
ITCO Logistics Corporation and each of the stockholders of ITCO Logistics
Corporation party thereto, (ii) the Escrow Agreement, dated as of May 20, 1998
(the "Escrow Agreement"), between and among the Company, the holders of Class B
Common Stock party thereto and Chase Manhattan Bank, as escrow agent (the
"Escrow Agent"), (iii) the Class B Stockholder Agreement, dated as of May 20,
1998 (the "Class B Stockholder Agreement"), between the Company and each of the
stockholders party thereto and (iv) the Class B Registration Rights Agreement,
dated as of May 20, 1998, between the Company and each of the stockholders party
thereto. Notwithstanding the foregoing, (x) the Class B Stockholders'
obligations under Sections 2.2(a) and 3.6 of the Merger Agreement, Section 3.12
of the Merger Agreement (as amended and modified in Section 3(a) below) and
Section 4.1 of the Class B Stockholder Agreement (and any other provisions of
such agreements solely to the extent necessary to give effect to such Sections)
shall remain in full force and effect from and after the Closing in accordance
with their respective terms, and are hereby ratified and confirmed by each Class
B Stockholder, (y) the Company's obligations under Section 3.13 of the Merger
Agreement shall remain in full force and effect from and after the Closing in
accordance with their terms, and are hereby ratified and confirmed by the
Company, and (z) Sections 6, 7 and 8 of the Escrow Agreement shall survive such
termination in accordance with their terms.
(d) Instructions to Escrow Agent. The parties agree to execute
and deliver the joint instruction attached as Annex B to the Escrow Agent on the
date hereof, and to do all things necessary or desirable to effect the release
of the stock certificates
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being held in escrow thereunder and their delivery to the Purchaser at the
Closing. Upon termination of this Agreement pursuant to Section 3(a), the
parties agree promptly to return such stock certificates to the escrow agent (to
the extent still required to be held in escrow under the Escrow Agreement).
(e) Binding Effect. For purposes of this Section 1 only, the
term Class B Stockholders shall include Xxxxxxx X. Xxxxxxx and Xxxxxxx X. Xxxxx
and their respective successors and permitted assigns. All other references in
this Agreement to Class B Stockholders shall exclude Xxxxxxx X. Xxxxxxx and
Xxxxxxx X. Xxxxx. The parties further acknowledge and agree that Section 1(a)
shall not operate to release any claims against the Company in respect of stock
appreciation rights held by Xxxx X. Xxxxx or Xxxxxxx X. Xxxxx under agreements
currently in force, which claims are to be addressed separately.
SECTION 2. Class B Stockholder Representative.
(a) Appointment. Each Class B Stockholder constitutes and
appoints Xxxxxxx Management Company II, L. P. (the "Class B Stockholder
Representative") to act as such Class B Stockholder's representative under the
Stock Purchase Agreement, with full authority to act on behalf of, and to bind,
each Class B Stockholder for purposes of the Stock Purchase Agreement, and the
Class B Stockholder Representative agrees to accept such appointment. Without
limiting the generality of the foregoing, each Class B Stockholder hereby
irrevocably constitutes and appoints, with full power of substitution, the Class
B Stockholder Representative as its true and lawful attorney-in-fact, with full
power and authority in such Class B Stockholder's name, place and stead to take
all actions and execute and deliver all documents and instruments described in
Section 3.9(a) of the Stock Purchase Agreement. Each Class B Stockholder's
appointment of the Class B Stockholder Representative as its attorney-in-fact
shall be deemed to be a power coupled with an interest and still survive the
death, incapacity, bankruptcy or dissolution of the Class B Stockholder giving
such power.
(b) Successor Representatives. The Class B Stockholder
Representative shall designate one or more persons to serve as successor Class B
Stockholder Representative in the event of his or its death or incapacity or
bankruptcy or dissolution, as applicable, which person or persons shall in such
event succeed to and become vested with all the rights, powers, privileges and
duties of the Class B Stockholder Representative under this Agreement. Each
successor Class B Stockholder Representative shall designate one or more
successors to serve as Class B Stockholder Representative in the event of such
successor Class B Stockholder Representative's death, incapacity, bankruptcy or
dissolution. In the event that the Class B Stockholder Representative dies or
becomes incapacitated, or in the event of the Class B Stockholder
Representative's bankruptcy or dissolution, as applicable, without having
designated a successor Class B Stockholder Representative, such Class B
Stockholder Representative's executors, administrators or personal
representatives, or successors in interest, as the case may be, shall succeed to
and
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become vested with all the rights, powers, privileges and duties of the Class B
Stockholder Representative under this Agreement.
SECTION 3. Additional Agreements.
(a) Amendment of Covenant Not to Compete. Effective upon the
Closing, Section 3.12(b)(i) of the Merger Agreement is hereby amended by (i)
deleting from the second sentence the words "during the four-year period
commencing on the Closing Date and ending on the fourth anniversary of the
Closing Date" and replacing the same with the words "during the period
commencing on the Closing Date and ending on May 24, 2001", (ii) inserting at
the end of clause (2) of the second sentence, after the words "their respective
affiliates", the words "with respect to the businesses described in clause (1)"
and (iii) inserting at the end of clause (3) of the second sentence, after the
words "such person", the words "and engage in any of the businesses described in
clause (1) for any other person". Except as expressly set forth in this Section
3(a), the terms and conditions of Section 3.12(b)(i) of the Merger Agreement
shall remain in full force and effect and are hereby ratified and confirmed.
(b) Notices of Indemnity Claims. From the date of the Closing
until the Expiration Date (as defined in the Stock Purchase Agreement), the
Company shall, within five business days after the last day of each month,
submit to the Class B Stockholder Representative a certificate signed by an
officer of the Company stating whether or not the Company has knowledge of any
claim or potential claim for indemnification against the Class B Stockholders
under Article V of the Stock Purchase Agreement and briefly describing the
nature of such claim or potential claim (if any). The Company shall promptly
forward to the Class B Stockholder Representative a copy of any written notice
received by the Company seeking indemnification under Article V of the Stock
Purchase Agreement. Nothing in this Section 3(b) shall require the Company to
waive any privilege that may apply to the information to be provided hereunder.
(c) Stock Purchase Agreement. In connection with the execution
and delivery of this Agreement by the parties hereto, the Company hereby
represents and warrants to the Class B Stockholders that (i) the Stock Purchase
Agreement has not been amended or modified on or prior to the date of this
Agreement and remains in full force and effect and (ii) there is no
consideration paid or payable by the Purchaser for the Shares and the Additional
Shares (as defined in the Stock Purchase Agreement) other than as expressly set
forth therein (including the exhibits thereto).
(d) Investor Letters. The Company agrees, subject to the due
execution and delivery of this Agreement, the Stock Purchase Agreement and the
joint instruction to the Escrow Agent attached as Annex B, and the irrevocable
release of signature pages evidencing such execution and delivery by the Class B
Stockholders, to immediately make available for inspection by the Class B
Stockholders at the offices of Xxxxxx and Xxxxx, LLP copies of all written
proposals or indications of interest from potential investors (the "Investor
Letters") received by the Company or the Principal Stockholders (as defined in
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the Stock Purchase Agreement) in connection with the sale process that was
initiated by the Principal Stockholders. Each Class B Stockholder (i)
acknowledges and agrees that the Investor Letters are subject to the
confidentiality obligations of such Class B Stockholder under Section 4.1 of the
Class B Stockholder Agreement and are not to be distributed, reproduced or
retained for any purpose and (ii) agrees to return, and direct its counsel to
return, all copies of the Investor Letters within their respective possession
promptly but in no event later than one business day after the Closing.
SECTION 4. Miscellaneous Provisions.
(a) Termination. If, prior to the Closing, the Stock Purchase
Agreement is terminated according to its terms for any reason, this Agreement
shall automatically terminate and be of no further force and effect.
(b) Descriptive Headings; Certain Interpretations. Descriptive
headings are for convenience only and shall not control or affect the meaning or
construction of any provision of this Agreement. Except as otherwise expressly
provided in this Agreement, the following rules of interpretation apply to this
Agreement: (i) the singular includes the plural and the plural includes the
singular; (ii) "or" and "any" are not exclusive and "include" and "including"
are not limiting; (iii) a reference to any agreement or other contract includes
permitted supplements and amendments; (iv) a reference to a law includes any
amendment or modification to such law and any rules or regulations issued
thereunder; (v) a reference to a person or legal entity includes its permitted
successors and assigns; (vi) a reference to generally accepted accounting
principles refers to United States generally accepted accounting principles; and
(vii) a reference in this Agreement to an Article, Section, Annex, Exhibit or
Schedule is to the Article, Section, Annex, Exhibit or Schedule of this
Agreement.
(c) Notices. All notices, requests and other communications to
any party under this Agreement shall be in writing and sufficient if delivered
personally or sent by facsimile (with confirmation of receipt) or by guaranteed
overnight courier, addressed as follows:
If to the Company, to:
Xxxxxx X. Roof
J. Xxxxxxx Xxxxxxx
c/o The X. X. Xxxxxxx Company, Inc.
0000 Xxxxx Xxxxx Xxxxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
with a copy to:
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Xxxxxx, Xxxxx & Xxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxxx
and, if to any Class B Stockholder, to the address or facsimile number for such
Class B Stockholder on Annex A, or to such other address or facsimile number as
the party to whom notice is to be given may have furnished to the other parties
in writing in accordance herewith. Each such notice, request or communication
shall be effective when received or, if given by guaranteed overnight courier,
when delivered at the address specified in this Section or on the second
business day following the date on which such communication is delivered to such
courier, whichever occurs first.
(d) Counterparts. This Agreement may be executed in any number
of counterparts, and each such counterpart hereof shall be deemed to be an
original instrument, but all such counterparts together shall constitute but one
agreement.
(e) Benefits of Agreement. All of the terms and provisions of
this Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and permitted assigns. This Agreement is
for the sole benefit of the parties hereto and not for the benefit of any third
person.
(f) Amendments and Waivers. No modification, amendment or
waiver, of any provision of, or consent required by, this Agreement, nor any
consent to any departure herefrom, shall be effective unless it is in writing
and signed by the parties hereto. Such modification, amendment, waiver or
consent shall be effective only in the specific instance and for the purpose for
which given.
(g) Assignment. This Agreement and the rights and obligations
hereunder shall not be assignable by any party hereto without the prior written
consent of the other parties. Any instrument purporting to make an assignment in
violation of this Section shall be null and void.
(h) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE.
(i) CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL. EACH PARTY
TO THIS AGREEMENT HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS TO THE
EXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF
DELAWARE FOR PURPOSES OF ALL LEGAL PROCEEDINGS WHICH ARISE OUT OF OR RELATE TO
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY, AND EACH PARTY TO THIS
AGREEMENT AGREES NOT TO COMMENCE ANY LEGAL PROCEEDING
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RELATED THERETO EXCEPT IN SUCH COURT. EACH PARTY TO THIS AGREEMENT IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW
OR HEREAFTER HAVE TO THE LAYING OF THE VENUE IN ANY SUCH COURT OR ANY CLAIM THAT
A LEGAL PROCEEDING COMMENCED IN SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT
FORUM. EACH PARTY TO THIS AGREEMENT HEREBY CONSENTS TO SERVICE OF PROCESS BY
NOTICE IN THE MANNER SPECIFIED IN SECTION 4(C) AND IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION SUCH PARTY MAY NOW OR HEREAFTER
HAVE TO SERVICE OF PROCESS IN SUCH MANNER. EACH PARTY TO THIS AGREEMENT
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT TO TRIAL
BY JURY IN ANY SUCH PROCEEDING.
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IN WITNESS WHEREOF, each of the Company, the Class B
Stockholders and the Class B Stockholder Representative has caused this
Agreement to be duly executed and delivered as of the day and year first written
above.
COMPANY: THE X. X. XXXXXXX COMPANY, INC.
By: /s/ J. XXXXXXX XXXXXXX
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Name: J. XXXXXXX XXXXXXX
Title: Sr. Vice President, General
Counsel, & Secretary
Date:
CLASS B STOCKHOLDERS: XXXXXXX PARTNERS II, L.P.
By: XXXXXXX MANAGEMENT COMPANY II,
L.P., its General Partner
By: XXXXXXX MANAGEMENT LIMITED,
L.L.C., its sole general partner
By: /s/ V. Xxxxxx Xxxxxxxxxx, Xx.
-----------------------------------
Name: V. XXXXXX XXXXXXXXXX, XX.
Title: Principal
XXXXXXX AFFILIATES II, L.P.
By: XXXXXXX MANAGEMENT LIMITED,
L.L.C., its sole general partner
By: /s/ V. Xxxxxx Xxxxxxxxxx, Xx.
-----------------------------------
Name: V. XXXXXX XXXXXXXXXX, XX.
Title: Principal
XXXXXXX INVESTMENT COMPANY
By: /s/ Xxxxx X. Xxxxxxx, Xx.
-----------------------------------
Name: XXXXX X. XXXXXXX, XX.
Title: General Partner
/s/ Xxxxxxxxx Xxxxxxx, Xx.
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XXXXXXXXX XXXXXXX, XX.
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/s/ Xxxx X. Xxxxx
---------------------------------------
XXXX X. XXXXX
REPRESENTATIVE: XXXXXXX MANAGEMENT COMPANY II, L.P.,
its General Partner
By: XXXXXXX MANAGEMENT LIMITED, L.L.C.,
its sole general partner
By: /s/ V. Xxxxxx Xxxxxxxxxx, Xx.
------------------------------------
Name: V. XXXXXX XXXXXXXXXX, XX.
Title: Principal
The following holders of shares of Class B Common Stock hereby execute and
deliver this Agreement solely for the purposes of evidencing their consent to,
acceptance of and agreement with Section 1:
---------------------------------
XXXXXXX X. XXXXXXX
---------------------------------
XXXXXXX X. XXXXX
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ANNEX A TO TERMINATION AND RELEASE AGREEMENT
Xxxxxxx Partners II, L.P.
000 Xxxxx Xx. Xxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
copy to:
Xxxxxx and Xxxxx, LLP
000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxx, Esq.
Xxxxxxxxx Xxxxxxx, Xx.
0000 Xxxxxx Xxxxx Xxxx, X-0
Xxxxxx, XX 00000
Xxxx X. Xxxxx
0000 Xxx Xxxx Xxxxx
Xxxxxxx, XX 00000
Wingate Affiliates II, L.P.
000 Xxxxx Xx. Xxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Xxxxxxx Investment Company
c/o Wingate Partners
000 Xxxxx Xx. Xxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
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ANNEX B TO TERMINATION AND RELEASE AGREEMENT
FORM OF JOINT INSTRUCTION
May 22, 0000
Xxx Xxxxx Xxxxxxxxx Bank
000 Xxxx 00xx Xxxxxx
Escrow Administration, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxx Xxxxxxx
Re: Escrow Agreement, dated as of May 20, 1998, among The X. X.
Xxxxxxx Company, Inc., a North Carolina corporation
("Xxxxxxx"), the stockholders (the "Company Stockholders") of
ITCO Logistics Corporation, a Delaware corporation (the
"Company"), and The Chase Manhattan Bank, a New York State
chartered bank, as escrow agent (the "Escrow Agent").
Ladies and Gentlemen:
The undersigned, The X. X. Xxxxxxx Company, Inc. ("Xxxxxxx"), and Xxxxxxx
Management Company II, L. P. (the "Representative"), representing all of the
parties (other than the Escrow Agent) to the above-referenced Escrow Agreement,
hereby advise you that such parties have agreed, pursuant to a Termination and
Release Agreement, dated as of May 22, 1999 (the "Termination Agreement"), to
terminate the Escrow Agreement (other than Sections 6, 7 and 8 thereof), subject
to certain conditions, prior to the Termination Date specified therein.
Capitalized terms used and not defined in this joint instruction are defined in
the Escrow Agreement.
Accordingly, the undersigned hereby jointly instruct you to deliver the Stock
Certificates constituting the Escrow to be held for release upon the closing of
the transactions contemplated under the Termination Agreement (the "Closing"),
which is scheduled to occur at 9:00 a.m. on Monday, May 24, 1999 at the offices
of Xxxxxx, Xxxxx & Xxxxx LLP, 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx
00000. If the Closing does not occur, the Stock Certificates will be returned to
escrow under the Escrow Agreement (to the extent required to be held in escrow
thereunder) and the Escrow Agreement will remain in full force and effect. If
you have any questions, please do not hesitate to call Xxxxxx Xxxxxx of Xxxxxx
and Xxxxx, LLP at 214-651-5615 or Xxxx Xxxxxx of Xxxxxx, Xxxxx & Xxxxx LLP at
000-000-0000.
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Very truly yours,
THE X. X. XXXXXXX COMPANY, INC.
By:
-------------------------------------
Name:
Title:
XXXXXXX MANAGEMENT COMPANY II, L.P.,
as Representative
By:
-------------------------------------
Name:
Title:
The Escrow Agent hereby consents and agrees as of the date of this letter to the
termination of the Escrow Agreement (other than Sections 6, 7 and 8), effective
upon the Closing as described above, and acknowledges and confirms that the
Escrow Agreement shall remain in full force and effect if and to the extent not
so terminated.
THE CHASE MANHATTAN BANK,
as Escrow Agent
By:
-------------------------------------
Name:
Title:
