TERMINATION AGREEMENT
This Termination Agreement ("Agreement"), effective as of August 31,
1995 (the "Effective Date"), is made by and among (1) Xxxx Xxxxxxx ("Xxxxxxx"),
(2) Xxxx X. Xxxxxx ("Xxxxxx"), (3) Capital Associates, Inc., a Delaware
corporation ("CAI"), as assignee and successor in interest to Capital Associates
International, Inc., a Colorado corporation ("CAII"), under and pursuant to that
certain Stockholders' Agreement, dated as of October 27, 1982, as amended from
time to time (the "Stockholders' Agreement"), and (4) CAII. CAI and CAII are
collectively referred to herein as the "Company."
RECITALS
WHEREAS, the original parties to the Stockholders' Agreement were
Durliat, Jacobs, Xxxxxxx Xxxxx ("Kazan") and CAII; and
WHEREAS, on November 5, 1986, CAI, the parent corporation of CAII, was
substituted as the "Company," and assumed and succeeded to all of the rights and
obligations of CAII, under the Stockholders' Agreement; and
WHEREAS, Kazan ceased to be a party to the Stockholders' Agreement,
effective as of June 1, 1994, pursuant to that certain Amendment to
Stockholders' Agreement, dated as of June 1, 1994 (the "Amendment"), by and
among the Company, Durliat, Jacobs, Kazan and, solely for purposes of paragraph
8. of the Amendment, MCC Financial Corporation; and
WHEREAS, the parties have determined that it is in their best interests
to (1) terminate the Stockholders' Agreement, and (2) subject to the terms and
conditions of this Agreement, terminate all of their respective rights, duties,
obligations and responsibilities to each other under the Stockholders'
Agreement, effective as of August 31, 1995; and
WHEREAS, in accordance with Articles 2, 3 and 4 of the Stockholders'
Agreement, the Company is currently maintaining, and paying the premiums with
respect to, certain key-man life insurance policies on the lives of Durliat and
Xxxxxx (which insurance policies are specifically identified by policy on
Exhibit A to this Agreement and are referred to herein by insured individual as
the "Durliat Policies" and the "Xxxxxx Policies," respectively, and collectively
referred to herein as the "Policies"); and
WHEREAS, concurrent with the termination of the Stockholders' Agreement
as provided for herein, the Company will cease making premium payments for the
Policies; and
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WHEREAS, pursuant to the terms of that certain Memorandum of
Understanding, dated August 1, 1990, Durliat and Xxxxxx have the right to
acquire the Durliat Policies and the Xxxxxx Policies, respectively, from the
Company in exchange for a cash payment from each of them to the Company in an
amount equal to fifty percent (50%) of the cash value of their respective
Policies as carried on the Company's books at such time; and
WHEREAS, the cash value of the Durliat Policies was $415,446.00 as of
August 31, 1995 (the "Cash Value of the Durliat Policies"); and
WHEREAS, the cash value of the Xxxxxx Policies was $239,102.00 as of
August 31, 1995 (the "Cash Value of the Xxxxxx Policies"); and
WHEREAS, CAI (1) has paid $10,673.73 of premium payments on the Durliat
Policies since August 31, 1995, and (2) has paid premiums on the Durliat
Policies prior to August 31, 1995 that relate to periods of time after August
31, 1995, which premiums total $536.68 for the post-August 31, 1995 time period
(the premiums referenced in (1) and (2) are collectively referred to herein as
the "Post-August 31, 1995 Durliat Premiums"); and
WHEREAS, CAI (1) has paid $8,613.00 of premium payments on the Xxxxxx
Policies since August 31, 1995, and (2) has paid premiums on the Xxxxxx Policies
prior to August 31, 1995 that relate to periods of time after August 31, 1995,
which premiums total $-0- for the post-August 31, 1995 time period (the premiums
referenced in (1) and (2) are collectively referred to herein as the
"Post-August 31, 1995 Xxxxxx Premiums"); and
WHEREAS, the premiums for each of the Durliat Policies and the Xxxxxx
Policies are paid through the periods set forth on Exhibit A to this Agreement.
NOW, THEREFORE, in consideration of the promises and covenants
contained herein, and for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties intending to be bound
legally hereby, agree as follows:
i. Effective as of August 31, 1995, the Stockholders' Agreement
shall be terminated in its entirety and, from and after that
date, shall be of no further force or effect.
ii. Subject to the terms and conditions of this Agreement, effective
as of August 31, 1995, each of the parties to this Agreement
waives, and releases each of the other parties to this Agreement
from, his/its respective duties, obligations and responsibilities
now or hereafter existing under the Stockholders' Agreement.
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iii. Subject to the terms and conditions of this Agreement and except
as expressly provided herein, effective as of August 31, 1995,
each of the parties to this Agreement hereby waives and releases
any and all of his/its rights, titles, interests, claims,
privileges and/or benefits now or hereafter existing under the
Stockholders' Agreement.
iv. Each of the parties to this Agreement hereby acknowledges and
agrees that he/it is executing this Agreement for and on behalf
of, and intends for this Agreement to be legally binding upon,
himself/itself, his estate, any representative or custodian and
any successor in interest to him/it.
v. (a) Effective as of August 31, 1995, the Company shall transfer
and assign all of its right, title and beneficial interest
in and to, the Durliat Policies to Durliat (or his
assignee(s) or designee(s)); and
(b) at the execution this Agreement, the Company shall deliver
the originals of the Durliat Policies to Durliat; and
(c) at the execution this Agreement, the Company shall deliver
to Durliat properly executed and sealed Ownership
Designation forms from the insuror for each of the Durliat
Policies; and
(d) in exchange for (a), (b) and (c) above, Durliat shall,
concurrently with the execution of this Agreement or
promptly following any later receipt by Durliat of the
original documents evidencing the Durliat Policies and the
issuer documentation acknowledging the transfer and
assignment to Durliat of the Durliat Policies, deliver
(or cause to be delivered) a check to the Company in an
amount equal to the sum of (a) fifty percent (50%) of the
Cash Value of the Durliat Policies and (b) the Post-August
31, 1995 Durliat Premiums.
vi. (a) Effective as of August 31, 1995, the Company shall transfer
and assign all of its right, title and beneficial interest
in and to, the Xxxxxx Policies to Xxxxxx (or his
assignee(s) or designee(s)); and
(b) at the execution of this Agreement, the Company shall
deliver the originals of the Xxxxxx Policies to Xxxxxx; and
(c) at the execution of this Agreement, the Company shall
deliver to Xxxxxx properly executed and sealed Ownership
Designation forms from the insuror for each of the Xxxxxx
Policies; and
(d) in exchange for (a), (b) and (c) above, Xxxxxx shall,
concurrently with the execution of this Agreement or
promptly following any later receipt by Xxxxxx of the
original documents evidencing the Xxxxxx Policies and the
issuer documentation acknowledging the transfer and
assignment to Xxxxxx of the Xxxxxx Policies, deliver
(or cause to be delivered) a check to the Company in an
amount equal to the sum of (a) fifty percent (50%) of
the Cash Value of the Xxxxxx Policies and (b) the Post-
August 31, 1995 Xxxxxx Premiums.
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vii. Following the Effective Date, the Company agrees to cooperate
with Durliat and Xxxxxx and to effect the transfer of all right,
title and beneficial interest in and to, and record ownership of,
the Durliat Policies and Xxxxxx Policies to Durliat (and/or his
assignee(s) or designee(s)) and Xxxxxx (and/or his assignee(s) or
designee(s)), respectively.
viii. This Agreement may be executed in any number of separate
counterparts, each of which shall be an original, but all of
which shall constitute one and the same agreement. Each of the
parties hereto agrees to be bound by a facsimile copy of such
party's signature on this Agreement to the same extent as if the
facsimile were an original. Each of the parties hereto agrees to
accept a facsimile copy of every other party's signature on this
Agreement in lieu of a fully executed original hereof.
ix. This Agreement shall be governed by, and construed and enforced
in accordance with, the laws of the State of Colorado, without
regard to the principles thereof regarding conflicts of laws.
x. Wherever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be
prohibited by or invalid under applicable law, such provision
shall be ineffective to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision
of the remaining provisions of this Agreement.
xi. This Agreement constitutes and contains the entire agreement of
the parties and supersedes any or all prior negotiations,
correspondence, agreements and understandings between the parties
respecting the subject matter hereof.
xii. Each party to this Agreement shall pay his/its own costs and
expenses, including legal and accounting fees, incurred in
connection with the negotiation of this Agreement and the
consummation of the transactions provided for herein.
xiii. This Agreement may be modified, amended or supplemented only by
duly authorized and executed written agreements, signed by all of
the parties hereto.
xiv. This Agreement and all of the provisions hereof shall be binding
upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns. Neither this
Agreement nor any of the rights, interests or obligations
hereunder shall be assigned by any party hereto without the prior
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written consent of the other parties, nor is this Agreement
intended to confer upon any other person, except the parties
hereto, any rights or remedies hereunder; provided, however, that
nothing contained in this Section 14. shall prohibit (or be
construed to prohibit), restrict (or be construed to restrict) in
any way or require (or be construed to require) Durliat or Xxxxxx
to obtain the prior written consent of the Company to, an
assignment or transfer of the Durliat Policies and/or the Xxxxxx
Policies to one or more assignees or designees of Durliat or
Xxxxxx, respectively.
xv. The parties hereto agree that the remedy at law is inadequate,
and that any party hereto shall be entitled to specific
performance in addition to any other remedy he/it may have, in
the event of a breach of this Agreement. Each party hereto waives
the defense that there is an adequate remedy at law in the event
of an action for specific performance of any rights hereunder.
xvi. All notices and other communications hereunder shall be in
writing and shall be deemed given when (i) delivered personally,
upon receipt, (ii) delivered via Federal Express of similar
overnight courier service, on the second business day after
delivery by the sender to Federal Express or other courier
service, (iii) delivered by telecopy, upon confirmation of
receipt or (iv) if mailed by registered or certified mail (return
receipt requested), postage prepaid, on the fifth business day
after mailing. Notice to any party hereto, if mailed, shall be to
the following addresses (or to any other address that a party may
designate by notice to the other parties hereto):
If to Durliat: Xx. Xxxx Xxxxxxx
00 Xxxxxx Xxx
Xxxxxx Xxxx, XX 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
If to Xxxxxx: Mr. Xxxx Xxxxxx
0000 Xxxx Xxxxxx Xxxxxx
Xxxxxx Xxxxx Xxxxxxx, XX 00000-0000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
If to the Company: Capital Associates, Inc.
Capital Associates International, Inc.
0000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxx, XX 00000
Attn: President and Chief Executive Officer
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
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With a copy to: Xxxx X. Xxxxxxx, Esq.
Xxxxxxx Xxxxx Xxxxxxx & Ingersoll
0000 00xx Xxxxxx, Xxxxx 0000
Xxxxxx, XX 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
xvii. In the event of a dispute between the parties arising out of this
Agreement, it is further agreed that a court may award to the
prevailing party in such dispute reasonable attorneys' fee in
addition to costs of suit incurred by the prevailing party.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed as of the Effective Date.
CAPITAL ASSOCIATES, INC.
By: /s/Xxxxxx Xxxxx
----------------------------------------
Title: President and Chief Executive Officer
CAPITAL ASSOCIATES INTERNATIONAL, INC.
By: /s/Xxxxxx Xxxxx
----------------------------------------
Title: President and Chief Executive Officer
/s/Xxxx Xxxxxxx
--------------------------------------------
Xxxx Xxxxxxx
/s/Xxxx Xxxxxx
--------------------------------------------
Xxxx Xxxxxx
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