EXHIBIT 10.3
TERMINATION AGREEMENT
THIS AGREEMENT is made this 30th day of November, 1999, by and among
Sunsource International, Inc., a Hawaii corporation ("Sunsource"), Mindbody,
Inc., a Florida corporation ("Mindbody" and together with Sunsource, the
"Sellers"), Chattem, Inc., a Tennessee corporation ("Chattem"), and Signal
Investment & Management Co., a Delaware corporation ("Signal" and together with
Chattem, the "Purchasers"), under the following circumstances:
The Sellers and the Purchasers are parties to an Asset Purchase and Sale
Agreement dated May 23, 1997, as amended (the "Purchase Agreement"), pursuant to
which, among other things, the Purchaser has acquired certain assets used in the
Sellers' dietary supplement and homeopathic lines of business (the "Business").
The parties now desire to enter into this Agreement to provide a single payment
by the Purchasers in final settlement and termination of all royalty and
Additional Payments payable by the Purchasers to the Sellers pursuant to the
Purchase Agreement, in accordance with the terms set forth below.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements contained herein, the parties hereby agree as follows:
DEFINED TERMS. Capitalized terms used herein that are not otherwise
defined shall have the meaning set forth in the Purchase Agreement.
TERMINATION OF ROYALTIES AND ADDITIONAL PAYMENTS. In full and final
settlement, compromise and accord, satisfaction and termination of the Sellers'
right to receive past, present or future royalties and/or Additional Payments
pursuant to Sections 1.5 and 4.3 of the Purchase Agreement (together, the
royalties and Additional Payments are referred to herein as the "Payments"), and
in consideration of Sellers' release and covenants in Section 3 below, upon the
execution of this Agreement, Chattem shall pay to Sunsource and/or its designees
(as Sunsource shall direct in writing to Chattem) the sum of $1,650,000 by wire
transfer, plus a total of 2,582 shares of Chattem stock.
SELLERS' RELEASE AND COVENANTS.
(a) In consideration of the payment received from Chattem as provided in
Section 2 above, the receipt and legal sufficiency of which is hereby expressly
acknowledged and
accepted, Sellers, for themselves and their successors and assigns, hereby
and forever release and discharge Purchasers, their affiliates, subsidiaries,
employees, agents, attorneys, successors and assigns (the "Releasees")from
any and all claims or demands of any kind or nature, which Sellers or any of
their affiliates, subsidiaries, employees, agents, successors and assigns,
designees and attorneys had, have now or may have in the future arising out
of, or in any way related to, any right to receive Payments. Provided
Purchasers comply with their obligations in Section 2 above, without limiting
the generality of the foregoing, neither the Purchasers nor any acquiror of
the Business from Purchasers shall have any obligation hereafter to make
Payments, without regard to the terms of any subsequent sale of the Business.
(b) Provided Purchasers comply with their obligations in Section 2
above, Sellers, for themselves and their successors and assigns, hereby
covenant and agree never to commence, aid in any way, prosecute or cause or
permit to be commenced or prosecuted any action or other proceeding based
upon any of the subject matter released in Section 3(a) above.
(c) Provided Purchasers comply with their obligations in Section 2
above, Sellers shall indemnify and hold harmless the Releasees from and
against any claim, loss or damage with respect to the Payments resulting from
the assertion of any such claim or the prosecution of any such action by
Sellers or Sellers' designees or by any person or entity claiming through
Sellers or on Sellers' behalf.
ADDITIONAL PROVISIONS.
(a) This Agreement may be executed in two or more counterparts, all of
which shall be deemed an original and all of which together shall be deemed
one and the same instrument.
(b) This Agreement shall be binding upon and inure to the benefit of the
parties hereto, their legal representatives, successors and assigns.
(c) This Agreement shall be construed and enforced in accordance with
the laws of the State of Tennessee.
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Duly executed by the parties hereto as of the date and year first above
written.
PURCHASERS:
CHATTEM, INC.
By:_____________________________
Title:__________________________
SIGNAL INVESTMENT & MANAGEMENT
CO.
By:_____________________________
Title:__________________________
SELLERS:
SUNSOURCE INTERNATIONAL, INC.
By:_____________________________
Title:__________________________
MINDBODY, INC.
By:_____________________________
Title:__________________________
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