RELEASE AND TERMINATION AGREEMENT
THIS RELEASE AND TERMINATION AGREEMENT (this "RELEASE") is made as of
April 18, 1997, by SANWA BUSINESS CREDIT CORPORATION ("SANWA") for the benefit
of ▇▇▇▇▇ ▇▇▇▇▇▇ ("▇▇▇▇▇▇").
WITNESSETH:
WHEREAS, on or about December 31, 1995 ▇▇▇▇▇▇ Manufacturing, Inc.
("▇▇▇▇▇▇") and Sanwa entered into a Loan and Security Agreement (the "LOAN
AGREEMENT") and certain Ancillary Agreements (as such term is defined in the
Loan Agreement) pursuant to which Sanwa and ▇▇▇▇▇▇ restructured the guaranty
obligations of ▇▇▇▇▇▇ to Sanwa which arose in connection with Sanwa's loan to
EPR, Inc.;
WHEREAS, as part of the Ancillary Agreements, ▇▇▇▇▇▇ executed and delivered
to Sanwa a Junior Subordinated Secured Promissory Note in the original principal
amount of $1,000,000 (the "JUNIOR NOTE"), an Income Sharing Agreement (the
"INCOME SHARING AGREEMENT") and a Common Stock Warrant Agreement (the
"WARRANT"), each of which was dated as of December 31, 1995 (the Junior Note,
the Income Sharing Agreement and the Warrant are collectively referred to herein
as the "RELEASED DOCUMENTS");
WHEREAS, ▇▇▇▇▇▇ has requested that Sanwa terminate the Junior Note, the
Income Sharing Agreement and the Warrant in consideration of the payment of the
Termination Fee (defined herein);
WHEREAS, Sanwa is willing to terminate the Released Documents and the
Warrant in exchange for the above consideration;
WHEREAS, in connection with the Income Sharing Agreement, ▇▇▇▇▇▇ entered
into a Standstill Agreement with Sanwa dated as of December 31, 1995 (the
"STANDSTILL AGREEMENT");
WHEREAS, the Standstill Agreement, by its terms, terminates upon the
expiration of the Income Sharing Agreement;
WHEREAS, ▇▇▇▇▇▇ has requested and Sanwa has agreed to formally terminate
the Standstill Agreement;
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, Sanwa hereby agrees as follows:
1. RELEASE FROM OBLIGATIONS. Subject to the provisions of Section 2
herein and the payment to Sanwa of the Termination Fee, Sanwa hereby absolutely,
unconditionally, and
irrevocably releases and forever discharges ▇▇▇▇▇▇ from any and all of his
respective debts, duties, obligations and liabilities arising under the
Standstill Agreement and terminates the Standstill Agreement. For purposes
hereof, the term "TERMINATION FEE" shall be defined as the sum of (a) Three
Million Seven Hundred Fifty Thousand and no/100 Dollars ($3,750,000); PLUS (b)
Two Hundred Fifty-Two Thousand Four Hundred Fourteen and 50/100 Dollars
($252,414.50), representing the amount due under the Junior Note and the Income
Sharing Agreement as of March 31, 1997; PLUS (c) One Thousand Six Hundred
Sixty-Six and 67/100 Dollars ($1,666.67) MULTIPLIED by the number of days
between April 10, 1997 and the date on which Sanwa has received the Termination
Fee. Sanwa does not release or discharge ▇▇▇▇▇▇ from any other debts, duties,
claims, obligations or liabilities that may be owing to Sanwa.
2. RETURN OF PAYMENTS. ▇▇▇▇▇▇ agrees that, if at any time all or any
part of the Termination Fee applied by Sanwa to any of the Liabilities (as
defined in the Loan Agreement), is rescinded or returned by Sanwa or Sanwa is
required to pay any amount thereof to any other party for any reason whatsoever
(including, without limitation, the insolvency, bankruptcy, liquidation or
reorganization of any party or the determination that such payment is held to
constitute a preference under the bankruptcy laws or to be fraudulent or both),
but excluding any payments made to any participant of Sanwa arising from this
Release pursuant to any participation agreement entered into with regard to the
Loan Agreement and the Ancillary Agreements and the transactions contemplated
thereby, this Release shall be deemed null and void and shall have no further
force and effect and all liabilities and obligations released hereunder shall be
enforceable as if this Release had never been granted and such indebtedness
and/or obligations shall, for the purposes of the Standstill Agreement, be
deemed to have continued in existence to the extent of such payment,
notwithstanding such application by Sanwa, and the Standstill Agreement shall be
reinstated as to such indebtedness and/or obligations, all as though this
Release had not been executed and such application by Sanwa had not been made.
3. NO MODIFICATION WITHOUT WRITING. This Release may not be modified,
amended, revised, revoked, terminated, changed or varied in any way whatsoever
except in accordance with Section 2 hereof or expressly by a written instrument
signed by the party or parties sought to be bound thereby.
4. 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 Illinois.
5. COUNTERPARTS. This Release may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same document.
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IN WITNESS WHEREOF, the parties hereto have executed this Release as of the
day and year first above written.
SANWA BUSINESS CREDIT CORPORATION
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
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Its: Vice President
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/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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