TERMINATION AGREEMENT
THIS TERMINATION AGREEMENT (this "Agreement") is entered into as of August
14, 2007 (the "Effective Date") by and between Myer-Emco, Inc., a District of
Columbia corporation ("MEI"), Xxxxxxxx X. Xxxxx ("Xxxxx") and Xxxxxx
Electronics, Inc., a New York corporation ("Xxxxxx") (each a "Party" and
collectively, the "Parties").
WHEREAS, the Parties and Xxxxxx X. Xxxxx (collectively with Xxxxx, the
"Sellers") entered into that certain Stock Purchase Agreement dated May 7, 2007
(the "Stock Purchase Agreement") pursuant to which, among other things, the
Sellers agreed to sell and transfer to Xxxxxx all of the issued outstanding
shares of common stock of MEI held by them for the consideration and on the
terms and conditions set forth in the Stock Purchase Agreement;
WHEREAS, a Letter of Extension was entered into on June 7, 2007 among MEI,
Xxxxx and Xxxxxx pursuant to which MEI and Xxxxx agreed to extend the date upon
which the Stock Purchase Agreement could be terminated pursuant to Section
10.1(d) from June 7, 2007 to July 23, 2007 (the "First Extension Letter") in
consideration for payment by Xxxxxx to MEI of a "First Extension Fee" in the
amount of $300,000;
WHEREAS, a Further Extension Letter was entered into on July 24, 2007 by
and among MEI, Xxxxx and Xxxxxx (the "Further Extension Letter") pursuant to
which MEI and Xxxxx agreed to further extend the date upon which the Stock
Purchase Agreement may be terminated pursuant to Section 10.1(d) from July 23,
2007 to August 10, 2007 in consideration for payment by Xxxxxx to MEI of "Second
Extension Fee" not to exceed $50,000 to the extent MEI's legal and accounting
fees exceed the amount of the First Extension Fee;
WHEREAS, notwithstanding the terms of the Further Extension Letter and the
fact MEI has incurred legal and accounting fees in excess of $350,000, MEI is
willing to accept payment in the amount of $14,500 in satisfaction Xxxxxx'x
obligation to pay the Second Extension Fee; and
WHEREAS, the Parties wish to terminate the Stock Purchase Agreement by
mutual consent pursuant to Section 10.1(c) thereof.
NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Parties do hereby agree as follows:
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1. TERMINATION OF STOCK PURCHASE AGREEMENT
Subject to the terms and conditions contained herein, the Stock Purchase
Agreement is hereby terminated as of the Effective Date pursuant to Section
10.1(c) thereof. Notwithstanding the foregoing, Section 14.3 (Confidentiality)
of the Stock Purchase Agreement shall survive termination and continue in effect
until superseded or otherwise terminated by mutual written agreement of the
Parties.
2. PAYMENT OF SECOND EXTENSION FEE
Simultaneously with the execution and delivery of this Agreement, Xxxxxx
shall pay MEI the sum of $14,500 by wire transfer of currently available funds
in consideration for MEI's and X. Xxxxx'x agreement to terminate the Stock
Purchase Agreement pursuant to Section 10.1(c) thereof and in satisfaction of
Xxxxxx'x obligation in the Further Extension Letter to pay the Second Extension
Fee. Such amount represents the sum of (a) MEI's estimated legal fees of $10,000
incurred in connection with the Further Extension Letter and thereafter and (b)
reimbursement of payments totaling $4,500 made by MEI to certain of its
landlords in connection with seeking consents required under the Stock Purchase
Agreement. Xxxxxx shall make such payment to MEI in accordance with the
following wire instructions:
Bank: SunTrust Bank
Xxxxxxxxx, XX 00000
ABA#: [ ]
For the account of: Myer-Emco, Inc.
Account #: [ ]
In the event that invoices received by MEI relating to the Stock Purchase
Agreement, the transactions contemplated thereby (including this Agreement)
cover the period beginning on July 24, 2007 and ending on the Effective Date,
are less than $10,000 in the aggregate, MEI shall repay the difference to
Xxxxxx.
3. MUTUAL RELEASE; NO ADVERSE COMMENT; PUBLICITY
3.1 Mutual Release
Except for any obligations arising under Section 14.3 (Confidentiality) of
the Stock Purchase Agreement, each Party, (as the "Releasing Party"), on behalf
of itself and successors and assigns, hereby unconditionally releases and
forever discharges the other Party and its officers, directors, employees,
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stockholders, successors, and assigns (collectively, the "Released Party") from
any and all actions, causes of action, claims, obligations, demands, damages,
costs or other relief, whether known or unknown, arising out of or relating to
the Stock Purchase Agreement, including but not limited to any breach or default
by the Released Party of any provision of the Stock Purchase Agreement. The
Releasing Party agrees and covenants not to institute a lawsuit or other legal
proceeding, or bring a claim, against the Released Party with regard to any
matters which have been released under the foregoing sentence. The foregoing
release and covenant does not in any way release any Party from its obligations
under this Agreement or any other agreement entered into after the Effective
Date.
3.2 Public Announcements
Each Party shall be free to make its own public announcement or similar
publicity with respect to this Agreement and/or the termination of the Stock
Purchase Agreement, provided that each party shall use commercially reasonable
efforts to share a draft of any such announcement with the other Party in
advance of its release and consider in good faith any input timely provided by
such other Party.
4. GENERAL PROVISIONS
The General Provisions in Sections 14.4, 14.7, 14.8, and 14.10 through
14.15 of the Stock Purchase Agreement are hereby incorporated herein by
reference and made a part hereof.
[Signatures appear on following page.]
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IN WITNESS WHEREOF, the Parties have caused this Termination Agreement to
be duly executed and delivered in their names and on their behalf, as of the day
and year first above written.
MYER-EMCO, INC.
By:/s/ Xxxxxxxx X. Xxxxx
-----------------------------------
Name: Xxxxxxxx X. Xxxxx
Title: Chief Executive Officer
XXXXXXXX X. XXXXX
/s/ Xxxxxxxx X. Xxxxx
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XXXXXX ELECTRONICS, INC.
By:/s/ Xxxxxxx Xxxxx
-----------------------------------
Name: Xxxxxxx Xxxxx
Title: Interim Chief Executive Officer
