SETTLEMENT AND OPTION AGREEMENT
Agreement made as of this 14th day of September, 1996, by
and between XXXXXXX X. XXXXX, having an address of 0000 Xxxxxxx Xxxxx,
Xxxx, Xxx Xxxxxx 00000 (hereinafter referred to as "Xxxxx"), and
LOGIMETRICS, INC., a corporation organized and existing under the laws of
the State of Delaware, having an address of 000-00 Xxxxxx Xxxxxx,
Xxxxxxxxx, Xxx Xxxx 00000 (hereinafter referred to as "LogiMetrics").
W I T N E S S E T H:
WHEREAS, Xxxxx and LogiMetrics entered into that certain
Employment Agreement, effective as of March 7, 1996 ("Employment
Agreement"); and
WHEREAS, pursuant to the terms of the Employment
Agreement, Xxxxx received a one-time signing bonus of $200,000 ("Bonus");
and
WHEREAS, pursuant to the terms of the Employment
Agreement, Xxxxx received stock options to purchase 1,000,000 shares of
Common Stock of LogiMetrics in accordance with the vesting schedule set
forth in the Employment Agreement; and
WHEREAS, at or about the commencement of Xxxxx'x
employment with LogiMetrics, Xxxxx purchased one unit for the sum of
$50,000 consisting of one share of $50,000 stated value 12% Cumulative
Convertible Redeemable Preferred Stock of LogiMetrics (the "Preferred
Stock") accompanied by one (1) seven year Series D warrant (the "Warrant")
to purchase 94,340 shares of Common Stock of LogiMetrics at a price of
$0.01 per share, which Preferred Stock and Warrant and other rights and
benefits deriving therefrom shall be referred to collectively herein as
the "Unit"; and
WHEREAS, on May 30, 1996, Xxxxx terminated his employment
relationship with LogiMetrics, claiming "Good Reason" as that term is
defined in the Employment Agreement, resigning as Chairman, President,
Chief Executive Officer and Director of LogiMetrics; and
WHEREAS, LogiMetrics is neither admitting nor conceding
that Xxxxx'x termination of employment was either in accordance with the
terms of the Employment Agreement or was for "Good Reason" as that term is
defined in the Employment Agreement; and
WHEREAS, the parties are desirous of settling any claims
or disputes that may arise out of Xxxxx'x relationship with LogiMetrics or
the termination thereof, consistent with the terms and the conditions of
this Agreement;
NOW, THEREFORE, in consideration of the mutual promises
and covenants contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, it is agreed as follows:
1. SIGNING BONUS - Xxxxx shall retain the Bonus.
2. UNIT OWNERSHIP - Xxxxx shall retain the Unit.
3. STOCK OPTION GRANTS
(a) NUMBER OF SHARES - Of the stock options for
the purchase of 1,000,000 shares of Common Stock of LogiMetrics granted to
Xxxxx pursuant to Article 7(d) of the Employment Agreement, Xxxxx shall
retain the right to exercise stock options to purchase 125,000 shares,
which vested immediately upon the effective date of the Employment
Agreement ("Original Options"). In addition, LogiMetrics hereby grants
Xxxxx stock options ("Additional Options") to purchase an additional
100,000 shares of Common Stock of LogiMetrics, which shall vest
immediately. The Original Options and the Additional Options for the
purchase of a total of 225,000 shares of Common Stock in LogiMetrics
(hereinafter collectively referred to as "Options") shall be exercisable
by Xxxxx or his personal representative at Forty Cents ($0.40) per share
in accordance with the terms hereof. All other stock options referred to
in the Employment Agreement are hereby canceled.
(b) DURATION OF STOCK OPTIONS - The Options for
the purchase of 225,000 shares of Common Stock of LogiMetrics referred to
in subparagraph (a) must be exercised by Xxxxx or his personal
representative on or before 5 P.M. New York City time on the third
anniversary date of the execution of this Agreement by the last of the
parties hereto (the "Effective Date").
(c) PAYMENT OF EXERCISE PRICE OF OPTIONS -
Payments for the exercise of any of the Options must be:
(i) In cash;
(ii) By certified, bank or cashier's
check;
(iii) By surrender of other shares of
Common Stock of LogiMetrics which have a fair market value (which shall be
determined by the weighted average closing sales price on the principal
exchange or system on which the shares of Common Stock are then listed or
quoted for the last three (3) consecutive days the stock was traded
preceding the exercise date) on the date of surrender equal to the
exercise prices of the shares as to which the Option is being exercised;
or
(iv) By conversion of Options into shares by
surrender of Options representing a specified number of shares whereupon
Xxxxx shall be entitled to receive the number of shares ("Y") equal to the
quotient obtained by dividing ((A-B)(X)) by A, where:
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A = the fair market value as defined in
paragraph (iii) above of one share of Common Stock on the date of
conversion;
B = the exercise price, as adjusted to
the date of exercise in accordance with the terms hereof, of one share of
Common Stock under Option; and
X = the number of shares of Common Stock
issuable upon exercise of the Option represented by the option for a
specific number of shares of Common Stock being surrendered as if
exercised for cash (if the above calculation results in a negative number,
then no shares shall be issued or issuable upon conversion of this
Option).
(d) PARTIAL EXERCISE OF OPTIONS PERMITTED - The Options
granted to Xxxxx hereunder may be exercised in whole or in part at any
time and from time to time until the third anniversary of the Effective
Date. Each partial exercise of the Option shall be for not less that One
Thousand (1,000) shares or the remaining number of shares subject to the
Option if less, and shall be for whole shares only.
(e) HOW OPTIONS MAY BE EXERCISED - The option is
exercisable by a written notice signed by Xxxxx and delivered to
LogiMetrics at 000-00 XxXxxx Xxxxxx, Xxxxxxxxx, Xxx Xxxx 00000, attention
of the Office of the President, signifying Xxxxx'x election to exercise
the Option. The notice must state the number of shares of Common Stock as
to which the Option is being exercised, must contain a statement by Xxxxx
(in a form acceptable to LogiMetrics) that such shares are being acquired
by Xxxxx for investment and not with a present view to their distribution
or resale and must be accompanied by payment as provided in subparagraph
(c) hereof. If a notice of the exercise of the Option is given by a
person or persons other than Xxxxx, LogiMetrics may require as a condition
to the exercise of the Option, the submission to LogiMetrics of
appropriate proof of the right of such person or persons to exercise the
Option. Certificates for shares of Common Stock so purchased will be
issued as soon as practicable. LogiMetrics, however, shall not be
required to issue or deliver a certificate for any shares until it has
complied with all requirements of the Securities Act of 1933, as amended,
the Securities Exchange Act of 1934, as amended, the rules of any stock
exchange or quotation system on which LogiMetrics Common Stock may then be
listed or authorized for inclusion and all applicable state laws in
connection with the issuance or sale of such shares or the listing of such
shares on said Exchange. Until the issuance of the certificate for such
shares, neither Xxxxx nor such other person as may be entitled to exercise
this Option shall have the rights of a stockholder with respect to the
shares subject to the Options.
(f) NON-TRANSFERABILITY OF OPTIONS - The Options shall
not be transferable except by Will or the laws of descent or distribution
and may be exercised during Xxxxx'x lifetime only by Xxxxx.
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(g) ADJUSTMENTS UPON CHANGE IN CAPITALIZATION - In the
event that the number of issued and outstanding shares of Common Stock is
hereafter increased without receipt of consideration by LogiMetrics
(provided, however, that conversion of any convertible securities of
LogiMetrics shall not be deemed to have been "without receipt of
consideration") decreased, changed into or exchanged for a different
number or kind of shares or securities through merger, consolidation,
combination, exchange of shares other reorganization, recapitalization,
reclassification, stock dividend, stock split or reverse stock split, an
appropriate and proportionate adjustment shall be made by LogiMetrics in
the number and kind of shares as to which any unexercised Options are then
exercisable. Any such adjustments shall be made without change in the
aggregate purchase price applicable to the unexercised Options but with a
corresponding adjustment in the price for each share or other unit of any
security covered by the Options. In making any adjustment pursuant to
this subparagraph (g), any fractional shares shall be disregarded.
(h) REGISTRATION OF OFFER AND SALE OF SHARES - In the
event that any of LogiMetrics shares of stock or other equity shall be
registered with the Securities and Exchange Commission under either the
Securities Act of 1933, as amended, or the Securities and Exchange Act of
1934, as amended, or any other similar legislation, LogiMetrics will use
its best efforts to register the shares of stock of LogiMetrics issued to
or to be issued to Xxxxx pursuant to the Options at no cost to Xxxxx;
provided, however, that Xxxxx shall pay all commissions or similar
expenses attributable to the sale of his shares of Common Stock. In the
event that Xxxxx elects to retain the services of any professional to
review any registration by LogiMetrics, he shall do so at his own cost and
expense.
4. COOPERATION - The parties further agree that in
the event that either party is contacted by any regulatory body, federal,
state or local governing body or administrative agency in connection with
any inquiry or investigation arising from Xxxxx'x employment with
LogiMetrics or the termination of said employment or the circumstances
existing at the time thereof, each party hereby agrees to notify the other
of said contact, inquiry or investigation, and further agrees to cooperate
with each other to the extent permitted by law.
5. SECRECY OBLIGATION - Without the express prior
written consent of LogiMetrics, Xxxxx shall not disclose or use at any
time any secret or confidential, information, knowledge or data of
LogiMetrics. LogiMetrics and Xxxxx acknowledge that Xxxxx has or will
upon the execution of this Agreement return all notes, memoranda,
notebooks, drawing or other documents, compiled by or delivered to Xxxxx
concerning any product, apparatus or process manufactured, used or
developed or investigated by LogiMetrics during the period of Xxxxx'x
employment with LogiMetrics and which contains any secret or confidential
information. Notwithstanding the foregoing, nothing in this Agreement
shall prohibit Xxxxx'x use of information (including, but not limited to
ideas, concepts, know-how, techniques and methodologies): (a) previously
known to him; (b) independently developed by him; (c) acquired by him from
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a third party which is not to Xxxxx'x knowledge under an obligation to
LogiMetrics not to disclose such information; or (d) which is or becomes
publicly available through no breach of Xxxxx of this Agreement.
6. NON-DEFAMATION - For a period of three (3) years
from the date hereof, the parties shall observe the following obligations:
Xxxxx shall not intentionally or knowingly defame LogiMetrics, its
officers, directors, employees, agents, or representatives nor shall
LogiMetrics, its officers, directors, employees, agents or representative
intentionally or knowingly defame Xxxxx.
7. (a) RELEASE BY XXXXX - Xxxxx hereby, for
himself and for his personal representatives, agents, heirs and assigns
forever and unconditionally remises, releases and discharges LogiMetrics,
its affiliates and their respective past, present and future officers,
partners, directors, agents, employees, managers, and their respective
successors, assigns, heirs and representatives (hereinafter collectively
referred to in this paragraph 7(a) as "Releasees") of and from any and all
obligations, liabilities, claims, actions, causes of action, proceedings,
covenants, contracts, controversies, agreements, promises, grievances and
demands of whatever nature, in law or in equity, which he, his personal
representatives, agents, heirs or assigns had, now have or may ever have
against any of the Releasees, whether accrued, absolute, contingent,
unliquidated or otherwise and whether, known or unknown, matured or not
matured on the date hereof, and which have or may have arisen out of any
transaction or state of facts existing prior to the date hereof, including
but not limited to claims arising under Title VII of the Civil Rights Act
of 1964, the Age Discrimination in Employment Act, the Older Workers
Benefit Protection Act of 1990, the Americans with Disabilities Act, the
Employee Retirement Income Security Act, the Equal Pay Act, Fair Labor
Standards Act, all applicable state and local labor and employment laws,
including but not limited to the New York Human Rights Law, the New Jersey
Law Against Discrimination, breach of contract, wrongful discharge,
defamation or intentional infliction of emotional distress. Xxxxx, on his
own behalf and on behalf of his personal representatives, agents, heirs
and assigns, further agrees not to institute any action, claim or
complaint of whatsoever kind or nature in any federal, state or local
court or other governmental agency or administrative tribunal relating to
any claim which has been released hereby. This release is for any relief
no matter how called, including but not limited to compensatory damages,
punitive damages, pain and suffering or attorneys' fees. Nothing
contained in this paragraph shall release or affect any rights of Xxxxx
pursuant to or under the terms of this Agreement.
(b) INDIVIDUAL RELEASES - Without limiting the
generality of paragraph 7(a) hereof, Xxxxx shall execute and deliver to
LogiMetrics releases in the form attached hereto as Exhibit A for delivery
by LogiMetrics to the following individuals and as of the Effective Date
of this Agreement: Xxxxxx Deutsch, Xxxxxx X. Xxxxxxxxxx, Xxxxxx X.
Xxxxxxxxxx, Xxxx Xxxxxx, Xxxxxx Xxxxxxxxxx, Xxxxxx X. Xxxxxx, Xxxxx X.
Xxxxxxxxx, Xxxxxxxx X. Xxxxxxxxx and Cerberus Partners, L.P.
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8. (a) RELEASE BY LOGIMETRICS - LogiMetrics, on
its own behalf and on behalf of its affiliates, and their past, present
and future officers, partners, directors, agents, employees, managers and
their respective successors, assigns, heirs and representatives hereby,
forever and unconditionally remises, releases and discharges Xxxxx, his
personal representatives, agents, heirs and assigns (hereinafter
collectively referred to in this paragraph 8(a) as "Releasees"), of and
from any and all obligations, liabilities, claims, actions, causes of
action, proceedings, covenants, contracts, controversies, agreements,
promises, grievances and demands of whatever nature, in law or in equity,
which LogiMetrics, its affiliates, and their past, present and future
officers, partners, directors, agents, employees, managers and their
respective successors, assigns, heirs and representatives had, now has or
may ever have against any of the Releasees, whether accrued, absolute,
contingent, unliquidated or otherwise and whether, known or unknown,
matured or not matured on the date hereof, and which have or may have
arisen out of any transaction or state of facts existing prior to the date
hereof, including but not limited to claims of breach of contract,
defamation, or intentional infliction of emotional distress. LogiMetrics,
on its own behalf and on behalf of its affiliates, and their past, present
and future officers, partners, directors, agents, employees, managers and
their respective successors, assigns, heirs and representatives further
agrees not to institute any action, claim or complaint of whatsoever kind
or nature in any federal, state or local court or other governmental
agency or administrative tribunal relating to any claim which has been
released hereby. This release is for any relief, no matter how called,
including but not limited to compensatory damages, punitive damages, pain
and suffering or attorneys' fees. Nothing contained in this paragraph
shall release or affect any rights of LogiMetrics pursuant to or under the
terms of this Agreement.
(b) INDIVIDUAL RELEASES - Without limiting
the generality of paragraph 8(a) hereof, LogiMetrics shall cause the
following to execute and deliver to Xxxxx, and LogiMetrics shall deliver
to Xxxxx releases in the form attached hereto as Exhibit B dated as of the
Effective Date of this Agreement from the following: Xxxxxx Deutsch,
Xxxxxx X. Xxxxxxxxxx, Xxxxxx X. Xxxxxxxxxx, Xxxx Xxxxxx, Xxxxxx
Xxxxxxxxxx, Xxxxxx X. Xxxxxx, Xxxxx X. Xxxxxxxxx, Xxxxxxxx X. Xxxxxxxxx
and Cerberus Partners, L.P.
9. INDEMNIFICATION - The Indemnity Agreement, dated
as of March 7, 1996 by and between LogiMetrics and Xxxxx shall continue in
full force and effect in accordance with the terms of such Indemnity
Agreement as though fully set forth in this Agreement.
10. ENTIRE AGREEMENT - This Agreement contains the
entire understanding between the parties and supersedes any prior
understanding or agreement between them, including but not limited to the
Employment Agreement. There are no representations, agreements,
arrangements, understandings, oral or written, between the parties hereto
relating to the subject matter of this Agreement other than those which
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are expressed herein either directly or indirectly or by reference. Any
amendments to this Agreement must be in writing, signed by the parties.
11. NOTICES - Whenever under the provisions of this
Agreement, notice is to be given, it shall be in writing and shall be
served personally or mailed, postage prepaid, by registered or certified
mail, return receipt requested or sent by Federal Express or by similar
overnight delivery service and addressed to the parties at their addresses
set forth herein, or to such other address as any party shall hereafter
designate by notice to the other. Notices to Xxxxx shall be sent to 0000
Xxxxxxx Xxxxx, Xxxx, Xxx Xxxxxx 00000. Copies of any notices sent to
Xxxxx shall also be sent to his counsel, Xxxxxx X. Xxxxxx, Esq., 1360
Xxxxxxx Xxxxxxxx, 0 Xxxxxxxxxxxx, Xxxxx, Xxx Xxxxxx 00000-0000. Copies of
any notices sent to LogiMetrics shall be sent to LogiMetrics, Attention:
Xxxxxx Xxxxxx, 000-00 Xxxxxx Xxxxxx, Xxxxxxxxx, Xxx Xxxx 00000. Copies of
any notices sent to LogiMetrics shall also be sent to its counsel, Xxxx X.
Xxxxxxx, Esq., Xxxxx & Samson, 0 Xxxxxx Xxxx Xxxx, Xxxxxxxx, Xxx Xxxxxx
00000. Each such notice so mailed shall be deemed to have been given
seven (7) days after the date of mailing and if sent by overnight delivery
service on the next business day. Any notice given hereunder shall state
in reasonable detail the factual basis underlying such notice.
12. GOVERNING LAW AND ARBITRATION
(a) This Agreement shall be governed by the
laws of the State of New Jersey, without regard to the conflicts of law
principles thereof. The parties agree that service of process may be
effected by certified or registered mail, return receipt requested, or by
regular mail if certified or regular mail is refused.
(b) ARBITRATION - All disputes or
controversies or claims arising out of or relating to this Agreement,
including, but not limited to, a breach thereof or a refusal to perform
the whole or part of this Agreement shall be submitted to arbitration
pursuant to the Revised Statues of New Jersey, Section 2A:24-1, et seq.
and in accordance with the following terms and conditions.
(i) Any arbitration proceedings shall
be conducted in Newark, New Jersey before three (3) arbitrators selected
by Xxxxx and LogiMetrics pursuant to the Rules of Arbitration of the
American Arbitration Association;
(ii) If either party elects to proceed
to arbitration hereunder, that party shall first have filed a demand for
expedited arbitration, to be conducted within thirty (30) days of the
filing and shall have served a written notice on the other party hereto by
certified mail, demanding such arbitration and specifying the facts and
circumstances which are the basis for its action, including the names of
witnesses and copies of any documents to be relied upon;
(iii) The expense of the arbitration
proceeding shall be shared equally by the parties and each party shall
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bear its own legal expenses and those of the witnesses to the hearing;
provided, however, that if Xxxxx prevails on the merits of such
arbitration, LogiMetrics shall reimburse Xxxxx for Xxxxx'x arbitration
expenses in connection with such arbitration proceedings, including
reasonable attorneys' fees.
(iv) At the request of either party all
arbitration proceedings shall be recorded by a certified court reporter
and each party shall have the right in any such arbitration proceedings to
full discovery and subpoena witnesses in accordance with the discovery
rules and procedures of the Courts of the State of New Jersey, including
the discovery rules and procedures of the United States District Court for
the District of New Jersey and each party hereto and the arbitrators shall
have the right to avail themselves of the benefits and shall observe the
obligations under such rules and procedures under the supervision of the
arbitrators or a majority of them and in accordance with the time frames
and constraints set forth by the arbitrators or a majority of them
conducting the arbitration;
(v) The arbitrators' decision shall be
issued within ten (10) days of the close of the hearing, shall be in
writing and shall contain findings of fact, conclusions of law and the
reasons for the arbitration decision and shall be signed by all
arbitrators or the majority decision shall be signed by a majority of the
arbitrators and the minority decision shall be signed by the dissenting
arbitrator;
(vi) Judgment upon any award rendered
may be entered in any court having appropriate jurisdiction and the
parties hereto expressly consent to having all such judicial proceedings
occur in the Superior Court of the State of New Jersey, Essex County; and
(vii) Such arbitration proceedings
shall be subject to appeal to the Courts of the State of New Jersey,
including initially the Superior Court of the State of New Jersey in Essex
County and either party to the arbitration shall be entitled to appeal on
the basis of errors of law or findings of fact that are not supported by
the evidence and such other grounds as may be appropriate for the appeal
of the arbitration decision, including failure to follow the procedures
set forth in this paragraph.
13. BINDING EFFECT/VALIDITY - This Agreement shall
be binding upon and inure to the benefit of the parties, their successors
and assigns. If any provision of this Agreement, or the application of
such provision shall be held to be invalid, the remainder of this
Agreement shall not be affected thereby.
14. FURTHER DOCUMENTS AND ACTIONS - The parties
hereto agree to execute such documents, if any, and take such action, if
any as may be required to carry out the intent of this Agreement.
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15. REPRESENTATIONS AND PARTIES - The parties
acknowledge that each has been represented by counsel of its own choosing
with regard to this Agreement and the subject matter hereof.
16. COUNTERPARTS - This Agreement may be executed in
several counterparts, each of which shall constitute the agreement among
the parties as if all signatures were appended to the original instrument.
The parties acknowledge that there is no need for all to execute the same
copy of this Agreement.
17. WAIVERS - The failure of a party to insist upon
strict adherence to any term of this Agreement on any occasion shall not
be considered a waiver thereof or deprive that party of the right
thereafter to insist upon strict adherence to that term or any other term
of this Agreement.
18. HEADINGS AND SYNTAX - The headings set forth in
this Agreement are for convenience and reference only and are not intended
to modify, limit, describe or affect in any way the content, scope or
intent of this Agreement. All references made and pronouns used shall be
construed in the singular or the plural and in such gender as the sense
and circumstances require.
IN WITNESS WHEREOF, the parties hereto, intending to be
legally bound hereby, have executed this Agreement.
LOGIMETRICS, INC.
By: /s/ Xxxxxx X. Xxxxxx
--------------------------
XXXXXX X. XXXXXX
Acting President
/s/ Xxxxxxx X. Xxxxx
----------------------------
XXXXXXX X. XXXXX
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