EXHIBIT 2.2(a)
SEPARATION AGREEMENT
THIS SEPARATION AGREEMENT (this "Agreement") is made effective as of
the 30th day of November, 2002 (the "Effective Date") by and among Central
Freight Lines, Inc., a Texas corporation ("Central Freight"), Central
Refrigerated Service, Inc., a Nebraska corporation ("Central Refrigerated"), the
Xxxxx and Xxxxx Xxxxx Family Trust (the "Trust"), Interstate Equipment Leasing,
Inc., an Arizona corporation ("IEL"), and Xxxxx Xxxxx individually ("Moyes,"
and, together with the Trust and IEL, the "Noteholders").
WHEREAS, Central Freight has executed and delivered to the Trust a
promissory note dated April 22, 2002 with a principal amount of three million
one hundred four thousand dollars ($3,104,000) (the "Trust Note");
WHEREAS, Central Freight has executed and delivered to IEL a promissory
note dated April 22, 2002 with a principal amount of four million seven hundred
thirty-two thousand eight hundred twenty-five dollars ($4,732,825) (the "IEL
Note");
WHEREAS, Central Freight has executed and delivered to Moyes two
promissory notes dated April 22, 2002 with principal amounts of three million
five hundred thirty-four thousand five hundred sixty-three dollars ($3,534,563)
and three million three hundred thirty thousand dollars ($3,330,000) (the "Moyes
Notes");
WHEREAS, the Trust Note, IEL Note, and Moyes Notes are secured by a
pledge of one hundred (100) shares of stock of Central Refrigerated (the
"Pledged Shares") owned by Central Freight pursuant to the terms of a Securities
Pledge Agreement dated April 22, 2002;
WHEREAS, the parties hereto desire to cancel the Trust Note, IEL Note,
and the Moyes Notes in exchange for delivery of the Pledged Shares to the
Noteholders as set forth herein; and
WHEREAS, in connection with the separation of Central Refrigerated from
Central Freight, and in order to adequately capitalize Central Refrigerated and
facilitate an initial public offering of securities by Central Freight, Central
Freight has agreed to pay to Central Refrigerated the sum of eight million three
hundred forty thousand five hundred fifty dollars ($8,340,550).
NOW, THEREFORE, in consideration of the foregoing recitals and the
mutual agreements set forth herein, the parties hereto agree as follows:
1. Cancellation of Notes.
(a) In lieu of repayment of all principal and accrued
interest due and payable pursuant to the Trust Note, the IEL Note, and
the Moyes Notes, Central Freight agrees to transfer and deliver the
Pledged Shares to the Noteholders, and the Noteholders agree to accept
such Shares, as follows:
Noteholder Name Number of Pledged Shares to be Delivered
--------------- ----------------------------------------
Trust 21
IEL 32
Moyes 47
Central Freight shall deliver certificates representing the Pledged
Shares, endorsed by Central Freight in blank or with stock powers
executed by Central Freight in blank attached, to the Noteholders
following satisfaction of all conditions precedent specified in Section
1(b) below. Such transfer shall be effective as of the Effective Date.
Upon delivery of the Pledged Shares, the Noteholders shall return the
Trust Note, IEL Note, and Moyes Notes to Central Freight for
cancellation. Central Freight shall thereafter have no further
obligation under the Trust Note, IEL Note, or Moyes Notes.
(b) The respective obligations of each party to
consummate the transactions contemplated by this Section 1 are subject
to satisfaction of the following condition precedent: Central
Refrigerated shall have obtained separate insurance coverage as
contemplated by that certain letter dated October 21, 2002, from
Xxxxxxx & Xxxxx, Inc. or on such other terms as the parties may agree.
The closing of the transactions contemplated hereby shall be deemed to
occur on the date on which such separate insurance becomes effective.
(c) If the foregoing condition precedent has not been
satisfied by December 31, 2003, the respective obligations of each
party under this Section 1 shall expire and have no further force or
effect.
2. Payment to Central Refrigerated.
(a) Central Freight hereby agrees to pay to Central
Refrigerated an amount of cash equal to eight million three hundred
forty thousand five hundred fifty dollars ($8,340,550). Such payment
shall be made by wire transfer of immediately available funds following
the consummation of Section 1 and satisfaction of all conditions
precedent specified in Section 2(b) below.
(b) The obligation of Central Freight to perform in
accordance with this Section 2 is subject to satisfaction of the
following conditions precedent:
(1) Central Freight shall have terminated its
status as a Subchapter S corporation pursuant to the
Internal Revenue Code; and
(2) Central Freight shall have consummated its
initial public offering of equity securities.
(c) If the conditions precedent in Section 2(b) have not
been satisfied by December 31, 2004, Central Freight's obligation under
this Section 2 shall expire and have no further force or effect.
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3. Miscellaneous.
(a) This Agreement may not be amended except by an
instrument signed by each of the parties hereto.
(b) If any term, provision, covenant, or restriction of
this Agreement is held by a court of competent jurisdiction to be
invalid, void, or unenforceable, the remainder of the terms,
provisions, covenants, and restrictions of this Agreement shall remain
in full force and effect and shall in no way be affected, impaired, or
invalidated and the parties shall negotiate in good faith to modify the
Agreement to preserve such part's anticipated benefits under the
Agreement.
(c) This Agreement (1) constitutes the entire agreement
and supersedes all other prior agreements and undertakings, both
written and oral, among the parties with respect to the subject matter
hereof; (2) is not intended to confer upon any other person any rights
or remedies hereunder; and (3) shall not be assigned by operation of
law or otherwise without the prior written consent by the other parties
hereto.
(d) This Agreement may be executed via facsimile or
otherwise in one or more counterparts, each of which shall be deemed an
original but all of which together shall constitute one and the same
instrument.
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IN WITNESS WHEREOF, the undersigned have executed this Agreement
effective as of the date first above written.
CENTRAL FREIGHT LINES, INC. THE XXXXX AND XXXXX XXXXX
a Texas corporation FAMILY TRUST
By: /s/ Xxxx Xxxx By: /s/ Xxxxx Xxxxx
Name: Xxxx Xxxx Name:
Title: CFO Title:
CENTRAL REFRIGERATED SERVICE, INC., INTERSTATE EQUIPMENT LEASING, INC.,
a Nebraska corporation an Arizona corporation
By: /s/ Xxxxxx X. Xxxxxx By: /s/ Xxxxx Xxxxx
Name: Xxxxxx X. Xxxxxx Name:
Title: Title:
XXXXX XXXXX
/s/ Xxxxx Xxxxx
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