TERMINATION AND RELEASE AGREEMENT
THIS RELEASE AGREEMENT (this "Release") is made as of April 18, 1997, by
Xxxxxx X. Xxxxxxxxxx ("Xxxxxxxxxx"), Xxxxx X. Xxxxxx ("Xxxxxx") and Xxxxxx
Manufacturing, Inc. ("Xxxxxx").
WITNESSETH
WHEREAS, on or about December 31, 1995, Xxxxxx and Sanwa Business Credit
Corporation ("Sanwa") entered into a Loan and Restructuring Agreement (the "Loan
Agreement") and certain Ancillary Agreements (as such term is defined in the
Loan Agreement) pursuant to which Sanwa and Xxxxxx restructured the guarantee
obligations of Xxxxxx to Sanwa which arose in connection with Sanwa's loan to
EPR, Inc.;
WHEREAS, in connection with the Loan Agreement, Sanwa, Xxxxxx, Xxxxxxxxxx
and Xxxxxx entered into Standstill Agreements pursuant to which Messrs.
Xxxxxxxxxx and Xxxxxx agreed (i) not to acquire, offer to acquire or agree to
acquire; (ii) exercise any option or right to acquire; or (iii) transfer, offer
to transfer or agree to transfer any Xxxxxx stock or option or right to acquire
any Xxxxxx stock or otherwise take any similar steps to diminish the net
operating losses of Xxxxxx;
WHEREAS, in connection with the Standstill Agreements, Xxxxxx entered into
a Compensation Agreement (the "Compensation Agreement") with Messrs. Xxxxxxxxxx
and Xxxxxx, a true and correct copy of which is attached hereto as EXHIBIT A,
pursuant to which Xxxxxx agreed to pay to each of Messrs. Xxxxxxxxxx and Xxxxxx
$50,000.00 in cash on the date of the Compensation Agreement and to compensate
Messrs. Xxxxxxxxxx and Xxxxxx for the loss of future financial opportunities as
a result of their entering into the Standstill Agreements;
WHEREAS, Messrs. Xxxxxxxxxx and Xxxxxx have not received any payments under
the Compensation Agreement;
WHEREAS, Sanwa, Xxxxxx and Messrs. Xxxxxxxxxx and Xxxxxx have agreed to
terminate the Standstill Agreements as of the same date as this Release;
WHEREAS, the Company's total obligation to compensate Xx. Xxxxxxxxxx under
the Compensation Agreement is $116,873.75 as of the date of this Release;
WHEREAS, the Company's total obligation to compensate Xx. Xxxxxx under the
Compensation Agreement is $110,588.00 as of the date of this Release;
NOW THEREFORE, FOR VALUE RECEIVED, in consideration of the recitals and for
other good and valuable consideration the receipt and adequacy of which is
hereby acknowledged, the parties hereby agree as follows:
SECTION 1. TERMINATION AND RELEASE FROM OBLIGATIONS.
Except as set forth in Section 2, the Compensation Agreement is hereby
terminated, and Xxxxxxxxxx and Xxxxxx hereby absolutely, unconditionally,
and irrevocably release and forever discharge Xxxxxx from any and all of
its respective debts, duties, obligations and liabilities arising under the
Compensation Agreement.
SECTION 2. PAYMENTS TO XXXXXXXXXX AND XXXXXX.
Xxxxxx acknowledges, agrees and reaffirms that it shall be and remain
obligated to Xxxxxxxxxx and Xxxxxx in the amounts of $116,873.75 and
$110,588.00, respectively, and that this obligation shall survive the
termination of the Compensation Agreement and shall not be subject to the
release and discharge by Xxxxxx and Xxxxxxxxxx set forth in Section 2
hereof.
SECTION 3. MISCELLANEOUS.
a. EXECUTION. This Release may be executed in any number of
counterparts, which, when taken together, will constitute one
original.
b. NO MODIFICATION WITHOUT WRITING. This Release may not be modified,
amended, revised, revoked, terminated, changed or varied in any way
whatsoever except expressly by a written instrument signed by the
party or parties sought to be bound thereby.
c. GOVERNING LAW. This Release shall be governed and controlled as to
interpretation, enforcement, validity, construction, effect and in all
other respects by the internal laws, statutes and decisions of the
State of Minnesota.
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IN WITNESS WHEREOF, the parties hereto have executed this Release as of the
day and year first above written.
XXXXXX MANUFACTURING, INC.
By: /s/ Xxxxx X. Xxxxxx
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Its: President
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XXXXXX X. XXXXXXXXXX
/s/ Xxxxxx X. Xxxxxxxxxx
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XXXXX X. XXXXXX
/s/ Xxxxx X. Xxxxxx
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