EXHIBIT 10.30
RELEASE AND SETTLEMENT AGREEMENT
THIS RELEASE AND SETTLEMENT AGREEMENT (this "Agreement") is entered into
this 6th day of December, 2005, between Torys LLP, an Ontario limited liability
partnership, Torys LLP, a New York limited liability partnership (collectively,
along with any predecessor partnerships, "Torys"), and Xxxxxxxxx International
Inc. ("International"), a Delaware corporation (together, the "Parties").
WHEREAS by resolutions dated June 19, 2003, and January 20, 2004, the Board
of Directors of International formed and authorized a Special Committee (the
"SC") to investigate and file suit regarding, among other things, various
related-party transactions and payments and to seek to recover assets and
damages for International; and
WHEREAS on August 30, 2004, International filed the SC's report of
investigation (the "SC Report") with the U.S. District Court for the Northern
District of Illinois in the action titled SEC x. Xxxxxxxxx International Inc.,
Case No. 04-C-0366, and with the United States Securities & Exchange Commission
on SEC Form 8-K; and
WHEREAS during 2005 International, through the SC, and Torys have been
discussing a resolution of International's potential claims against Torys
arising out of certain of the transactions and events described in the SC
Report; and
WHEREAS Torys denies that it has liability to International or has engaged
in any wrongdoing; and
WHEREAS Torys has agreed to enter into this Agreement to resolve any
potential liability to International and to reduce further expense,
inconvenience, and the distraction of burdensome and protracted litigation; and
WHEREAS the SC has approved the settlement reflected in this Agreement as
fair, reasonable and adequate and in the best interests of International and its
shareholders; and
NOW THEREFORE IN CONSIDERATION OF THE COVENANTS SET OUT BELOW AND OTHER
GOOD AND VALUABLE CONSIDERATION, THE RECEIPT AND SUFFICIENCY OF WHICH IS
ACKNOWLEDGED, International and Torys agree as follows:
1. Payment by Torys of Settlement Amount. By no later than December 22,
2005, Torys shall pay, or cause to be paid by its agents, to International, in
the lawful currency of the United States of America, by certified check, bank
draft or wire transfer, the sum of U.S. $30,250,000.00 (the "Settlement
Amount").
2. Cooperation by Torys. Torys agrees to cooperate in good faith with the
SC and with International and its subsidiaries in litigation and arbitration in
which International or any International subsidiary is a party and, except where
such cooperation would be illegal or otherwise improper, in administrative,
regulatory and criminal proceedings involving any former International officer
or director (the "Proceedings"). Without limiting the foregoing, Torys shall
cooperate in all legal proceedings identified in International's Form 10-K for
the fiscal year ended December 31, 2004, as filed with the U.S. Securities and
Exchange Commission, as the SC or International may reasonably request from time
to time. In connection with the Proceedings, to the full extent permitted by
law, Torys agrees to make its partners and employees available on a timely basis
to testify, provide affidavits, respond to inquiries and to provide any
information as reasonably requested by International, the SC or either of their
counsel, and agrees to provide as full and complete information as is permitted
under the applicable law and subject to any confidentiality obligations to other
clients that either are legally enforceable or are imposed on Torys by the
applicable ethical rules governing the conduct of attorneys. Torys shall
undertake its best efforts to make available to International and the SC, on the
same basis, former Torys partners and employees.
3. Mutual Release and Settlement. Upon payment in full of the Settlement
Amount, International, its past, present, and future subsidiaries and divisions,
all partnerships in which International or a subsidiary of International is the
general partner and any corporation owned by such partnership, and their
successors and assigns (collectively, the "International Releasors") do hereby
fully, finally, and forever release, remise, acquit, and forever discharge Torys
and its past, present, and future partners, employees, directors, officers,
affiliates, agents, advisors, insurers, and reinsurers, and their predecessors,
successors, and assigns (collectively, the "Torys Releasees"), separately and
jointly, of and from any and all rights, interests, obligations, debts, dues,
sums of money, accounts, reckonings, damages, claims, actions, allegations,
causes of action, counterclaims or demands whatsoever, whether known or unknown,
in law or in equity, of whatever kind or character, suspected, fixed, or
contingent (collectively, "Claims") that have been, that could be, or that could
have been asserted by the International Releasors from the beginning of time
through the date hereof (including without limitation any claim for
contribution, indemnification, reimbursement, or any other forms of claims over
related to the subject matter of the Settled Claims that could be asserted on or
after the date hereof by the International Releasors based on events occurring
prior to and through the date hereof) against the Torys Releasees concerning (i)
Torys' representation of International, its subsidiaries, divisions, all
partnerships in which International or a subsidiary of International is the
general partner, and any corporation owned by such partnership or (ii)
allegations of injury to such entities caused by Torys (collectively, the
"Settled Claims"). Torys and its past, present, and future partners, employees,
officers, directors, and predecessors, and their successors and assigns
(collectively, the "Torys Releasors") do hereby fully, finally, and forever
release, remise, acquit, and forever discharge the International Releasors, the
Cardinal Settling Directors (as defined in paragraph 8 below), and their
respective insurers, separately and jointly, of and from any and all Claims that
have been, that could be, or that could have been asserted by the Torys
Releasors from the beginning of time through the date hereof against the
International Releasors or the Cardinal Settling Directors, except that none of
the Torys Releasors releases any Claims any of the Torys Releasors has or could
have against any insurer for rights under an insurance policy issued to any of
the Torys Releasors. The releases provided under this paragraph do not prohibit
the International Releasors or the Torys Releasors from arguing that one or more
of the other is liable to the plaintiffs in any pending or future securities
class action suits and that proportionate liability is appropriate in such
suits. The releases provided under this paragraph do not release Torys or
International from their obligations under this Agreement. The releases provided
under this paragraph do not preclude the International Releasors or the Torys
Releasors from asserting any defenses in litigation brought against them by a
putatively released party or otherwise restrict
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the arguments the Torys Releasors or the International Releasors could advance
in such litigation. Notwithstanding the foregoing, the Torys Releasors shall not
be deemed to have released the Cardinal Settling Directors unless and until the
Cardinal Settlement Agreement (as defined in paragraph 8 below) is approved by
the court and the Effective Date, as defined in the Cardinal Settlement
Agreement, arrives.
4. Unknown Claims. With respect to the releases set forth in paragraph 3 of
this Agreement, the Parties expressly understand, acknowledge, and assume the
risk that Claims may exist but presently be unknown, or that losses resulting
from such Claims may be presently unknown or overestimated or underestimated in
amount or severity, and the Parties have taken the possibility of unknown,
underestimated, or overestimated Claims into account in determining the amount
of consideration to be paid in exchange for the releases provided herein. The
Parties, on their own behalf and on behalf of their respective related persons
and entities, expressly waive and relinquish, to the fullest extent permitted by
law, the provisions, rights, and benefits of any statute or principle of common
law of the United States, Canada, or any state, province, or country, which
either narrowly construes releases purporting by their terms to release such
unknown or underestimated or overestimated Claims in whole or in part, or
restricts or prohibits the releasing of such Claims.
5. Limitations on Claims by Torys. Torys shall not seek to recover any
amounts by way of contribution, indemnity, reimbursement, claim over, or
otherwise from any other person, partnership, corporation, or other entity who
may also be liable to International, whether jointly, severally or otherwise, in
respect of any of the Settled Claims. Torys shall not take any steps or initiate
any proceedings with respect to the Settled Claims to recover any amounts from
any person, partnership, corporation or other entity that might be entitled to
claim contribution, indemnity, reimbursement (or other forms of claims over) or
other relief against International with respect to any of the Settled Claims. In
the event that, notwithstanding the provisions of paragraphs 6 and 7 below,
another party against whom any of the International Releasors has brought any
Claims or with whom any of the International Releasors has reached a settlement
brings any Claims against any of the Torys Releasors related in any way to the
Settled Claims, nothing in this paragraph shall preclude any of the Torys
Releasors from asserting any defenses against such Claims, or otherwise restrict
the arguments any of the Torys Releasors could advance against such Claims.
6. Potential Judgment Reduction. It is the intent of the Parties that this
provision will eliminate any basis for any other party against whom any of the
International Releasors has brought or in the future brings Claims relating in
any way to the subject matter of the Settled Claims (including without
limitation Claims based on allegations in the SC Report or similar allegations)
from being able to claim contribution, indemnification, reimbursement, or other
forms of claims over from Torys or its partners for such party's liability to
International. Therefore, in consideration of Torys' payment to International of
the Settlement Amount, International agrees that Torys shall have no further
liability for actions or Claims brought by any of the International Releasors
relating in any way to the Settled Claims (including without limitation Claims
based on allegations in the SC Report or similar allegations) (including without
limitation, claims for contribution, indemnification, reimbursement, or other
forms of claims over brought by those against whom International obtains a
judgment, including without limitation former officers, directors, and employees
of International). International further
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agrees that if, and to the extent, necessary and appropriate (due to any
applicable statute or law discharging and barring contribution or similar
claims, or for any other reason) to ensure that Torys incurs no further
liability for actions or Claims brought by any of the International Releasors
relating in any way to the Settled Claims (including without limitation Claims
based on allegations in the SC Report or similar allegations), the damages
recoverable by any of the International Releasors in any such actions or Claims
that any of the International Releasors has filed, will file, or could file
(either directly or derivatively), against a person, partnership, corporation,
or other entity other than Torys shall be reduced by the greater of (a) the
Settlement Amount, or (b) the amount corresponding to Torys' proportionate share
of the liability with respect to the relevant Claims as determined in the
relevant proceeding. In addition, International agrees to cooperate reasonably
with Torys to effectuate the intent of this paragraph. Torys acknowledges and
agrees that the court or tribunal before which any such International Claims
related in any way to the subject matter of the Settled Claims is brought will
have the necessary authority and jurisdiction to make findings as to the joint
tort-feasor status, if at all, and proportionate liability, if any, or lack
thereof, of Torys for International's damages, regardless of whether Torys is a
party to such action or claim. Torys further agrees to cooperate with all
reasonable requests for documents or other evidentiary materials, whether from
International or any other party, in connection with any Claims in which
findings may be required as to the joint tort-feasor status and/or proportionate
liability, or lack thereof, of Torys. Torys also agrees not to use this
Agreement as a basis to move to stay or dismiss Claims related in any way to the
subject matter of the Settled Claims brought by International against someone
other than Torys.
7. Protection From Claims by Other Parties Who Settle with International in
the Future. The International Releasors will not agree to settle any Claims
related in any way to the Settled Claims (including without limitation Claims
based on allegations in the SC Report or similar allegations) with any other
party (an "Other Settling Party") unless the agreement governing that settlement
provides that the Other Settling Party shall not seek contribution,
indemnification, reimbursement, or any other form of claims over from Torys for
any portion of the settlement consideration the Other Settling Party pays to any
of the International Releasors.
8. Protection from Claims by Other Parties Who Have Settled with
International in the Past. International agrees to obtain a certain release for
Torys, its partners, and its predecessors, successors, and affiliates, from
those current and former International Directors (the "Cardinal Settling
Directors") who have signed an agreement (the "Cardinal Settlement Agreement")
to settle the action captioned Cardinal Value Equity Partners, L.P. v. Black, et
al., Xx. 000-X (Xxxxxxxx Xxxxxxxx Xxxxx, Xxx Xxxxxx Xxxxxx). The release, which
would be contingent on (i) a reciprocal release from Torys and (ii) court
approval and consummation of the Cardinal Settlement Agreement, would preclude
the Cardinal Settling Directors from seeking contribution, indemnification,
reimbursement, or any other form of claims over from Torys for any portion of
the settlement consideration the Cardinal Settling Directors are paying to
International in connection with the Cardinal Settlement Agreement.
9. Confidentiality and Publicity. International and Torys shall have the
right to publicly disclose this Agreement and the settlement represented by this
Agreement. However, other than (i) in connection with any legal proceeding or
investigation or (ii) in communications with outside auditors, insurers, taxing
authorities, or regulatory or governmental agencies, or as
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otherwise may be required by law, International and the SC will not publicize or
comment upon any allegations against Torys related to the Settled Claims and
shall not express any views as to the actions of Torys related to the Settled
Claims. Any press release issued by either party announcing this Agreement will
be written in accordance with this paragraph and will be made available to the
other party for review and comment, but final approval on the contents of the
release (subject to the requirement that it comport with the restrictions in
this paragraph) will remain solely with the party issuing the release.
10. Remedies Upon Breach of this Agreement. The Parties agree that a breach
by either party of any of its obligations hereunder would cause irreparable harm
to the other, non-breaching party for which money damages would not be an
adequate remedy. Accordingly, the Parties agree that the non-breaching party
shall be entitled to specific performance and injunctive and other equitable
relief in the event the other party breaches any of its obligations hereunder.
In the event of a final judicial determination that any party has breached this
Agreement, such party shall pay all reasonable legal fees and expenses of the
party that has sought to enforce this Agreement. If by midnight on December 22,
2005, Torys has not paid the Settlement Amount, International shall have the
right, at its option, to either (i) waive the deadline in writing and accept
late payment of the Settlement Amount; or (ii) commence proceedings against
Torys for any and all Claims International has against Torys, including any and
all of what would have been the Settled Claims. As soon as International
undertakes the latter option and issues a claim against Torys, this Agreement
shall be null and void and of no further force or effect.
11. Governing Law; Choice of Forum; Jury Waiver. This Agreement and any
claim related directly or indirectly to this Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware, without regard
to the conflicts of law principles thereof. All disputes arising out of or
relating to this Agreement or its breach may be resolved in the U.S. District
Court for the Northern District of Illinois, and Torys and International hereby
submit and attorn to the jurisdiction and venue of that court. EACH PARTY HEREBY
IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY
TRIAL FOR THE ADJUDICATION OF ANY DISPUTE ARISING OUT OF THIS AGREEMENT.
12. Counterparts and Delivery. This Agreement may be signed in any number
of counterparts, all of which together shall constitute one and the same
instrument. This Agreement may be executed and delivered by fax transmission or
by transmission in PDF or similar electronic document format.
13. Severability. If any provision of this Agreement is found to be
unenforceable in whole or in part, it shall be construed or limited in such a
way as to make it enforceable, consistent with the intentions of the Parties as
set out in this Agreement. If such construction or limitation is not possible,
the unenforceable provision will be stricken, and the remaining provisions of
this Agreement will remain valid and enforceable.
14. Admissibility. This Agreement may be filed and used in any action or
proceeding as may be necessary to consummate, enforce or seek relief with
respect to the Agreement. Torys, the SC, International, and any of their
predecessors or successors in interest may file and use this Agreement in any
action to support a defense of res judicata, collateral estoppel, issue
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estoppel, release, good faith settlement, judgment bar, reduction, or any other
theory of claim preclusion, issue preclusion, or similar defense or
counterclaim.
15. No Admission. This Agreement does not in any manner constitute Torys'
or International's admission of liability, wrongdoing, or any other matter.
16. Successors and Assigns. Unless otherwise stated to the contrary
elsewhere in this Agreement, this Agreement shall be binding upon, apply to, and
inure to the benefit of the Parties, the International Releasors, the Cardinal
Settling Directors, the Torys Releasors, and their respective successors, and
assigns.
17. No Waiver. Any failure by any party to insist upon the strict
performance by the other party of any of the provisions of this Agreement shall
not be deemed a waiver of any of the provisions hereof, and such party,
notwithstanding such failure, shall have the right thereafter to insist upon
strict performance of any and all of the provisions of this Agreement to be
performed by such other party.
18. Further Assurances. The Parties shall take such further and other steps
and execute such further and other documents as may reasonably be required to
give effect to the terms of this Agreement.
19. Notice. Any notices required to be given under this Agreement shall be
in writing and shall be made by fax transmission or e-mail transmission to the
fax numbers and e-mail addresses set out below:
To: Xxxxx XXX
Xxxxx 0000, 00 Xxxxxxxxxx Xx. W.
Box 270, TD Centre
Toronto, Ontario M5K 1N2
Canada
Attention: Xxx X. Xxxxx
Tel.: (000) 000-0000
Fax: (000) 000-0000
E-mail: xxxxxx@xxxxx.xxx
With a copy to: Xxxxx Xxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
XXX
Attention: Xxxxxx X. Xxxx
Tel.: (000) 000-0000
Fax: (000) 000-0000
E-mail: xxxxxx.xxxx@xxx.xxx
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To: Xxxxxxxxx International Inc.
000 0xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
XXX
Attention: Xxxxxx X. Paris
Tel.: (000) 000-0000
Fax: (000) 000-0000
E-mail: xxxxxx@xxxxxxxxxxxxx.xxx
With a copy to: O'Melveny & Xxxxx LLP
Times Square Tower
0 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
XXX
Attention: Xxxxxxxx Xxxxxxxxx
Tel.: (000) 000-0000
Fax: (000) 000-0000
E-mail: xxxxxxxxxx@xxx.xxx
And with a copy to: Xxxxxxx Xxxxx LLP
One First Canadian Place
Suite 3400, X.X. Xxx 000
Xxxxxxx, Xxxxxxx X0X 0X0
Xxxxxx
Attention: Xxxxxx X. Xxxxxx
Tel.: (000) 000-0000
Fax: (000) 000-0000
E-mail: xxxxxxx@xxxxxxxxxxxx.xx
20. Entire Agreement. This Agreement contains the entire agreement between
Torys and International and supersedes and replaces any and all prior
negotiations, understandings, promises, representations, inducements, and
discussions, whether written or oral. This Agreement may not be changed or
modified except in writing signed by both Torys and International.
21. No Party Considered Drafter. Neither of the Parties shall be considered
the drafter of this Agreement, or any provisions of this Agreement, for the
purpose of any statute, case law, or rule of interpretation or construction that
would or might cause any provision to be construed against the drafter.
22. Authority to Enter into this Agreement. The undersigned parties
represent that they have the full authority necessary to execute this Agreement.
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Agreed to this 6th day of December, 2005, by:
XXXXXXXXX INTERNATIONAL INC. TORYS LLP
By:
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TORYS LLP
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