Exhibit 10.46
PARAVANT INC.
SETTLEMENT AGREEMENT AND RELEASE
This Settlement Agreement and Release ("Agreement") is made and entered
into as of April 30, 1999, by and among Paravant Inc., a Florida corporation
("Paravant"), and Signal Technology Laboratories, Incorporated, an Ohio
corporation ("STL"), Xxxxx X. Xxxxxxxx ("Xxxxxxxx"), Xxxxxx X. Xxxxxxxx
("Xxxxxxxx"), C. Xxxxx Xxxxxxxxxx ("Xxxxxxxxxx"), X. Xxxxxx Xxxxxxxx
("Xxxxxxxx"), Xxxxx Xxxxxxxx ("Xxxxxxxx") and Xxx X. Xxxxxxxxx ("Torresani")
(Clifford, Stefanko, Lambertson, Schooley, Xxxxxxxx and Torresani are
collectively referred to herein as the "Shareholders"). Paravant, STL and the
Shareholders are collectively referred to herein as the "Parties".
BACKGROUND
Paravant, STL, the Shareholders and certain other parties entered into
an Acquisition Agreement dated as of March 31, 1998, as amended (the
"Acquisition Agreement") and a Closing Agreement dated as of October 1, 1998
(the "Closing Agreement"). The Parties have had a dispute under the Acquisition
Agreement and the Closing Agreement with respect to the size of the STL backlog
as of October 1, 1998 described in Section 2(i)(a) of the Closing Agreement and
certain other matters. The Parties desire to settle all such disputes upon the
terms and subject to the conditions described in this Agreement. Accordingly, in
consideration of the premises and the mutual promises, terms, and conditions
herein made, the Parties, intending to be legally bound, agree as follows:
TERMS
1. STL Backlog Determination. The Parties hereby agree that notwithstanding
any provisions of the Acquisition Agreement and the Closing Agreement that may
otherwise appear to be or be interpreted to be to the contrary, the STL backlog
as of October 1, 1998, as described in Section 2(i)(a) of the Closing Agreement,
shall be deemed by reason of this Agreement to be and have been $12,813,561 for
all purposes related to the Acquisition Agreement and the Closing Agreement and
for all other purposes, including but not limited to closing the transactions
contemplated by the Acquisition Agreement and the Closing Agreement and
determining the payment of and entitlement to the results of completion of such
backlog (notwithstanding the results determined in accordance with percentage of
completion accounting). The Parties acknowledge and agree that such STL backlog
amount shall be used to calculate the two percent (2%) discount retained by STL
pursuant to the Acquisition Agreement.
2. Release by STL and Shareholders. In exchange for the consideration set
forth herein, the receipt and sufficiency of which are hereby acknowledged, each
of STL and the Shareholders, on behalf of themselves, their heirs, legal
representatives, executors, administrators, successors, assigns, parent,
affiliated and subsidiary companies, and their officers, directors and
shareholders, do hereby remise, release, acquit and forever discharge Paravant,
its subsidiary and affiliated companies and their officers, directors,
shareholders, successors and assigns ("Releasees"), of and from any and all
actions and causes of action, suits, covenants, claims, contracts,
controversies, agreements, promises, liabilities,
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obligations, guarantees, indemnities, variances, damages, debts, sums of money,
accounts, reckonings, bonds, bills, trespasses, executions, judgments, defenses
and demands whatsoever, whether the same be liquidated or unliquidated,
contingent or fixed, matured or unmatured, determined or undetermined, whether
past or present, whether the same be at law or in equity, and whether or not
well-founded in fact or in law, which each such Party, its heirs, legal
representatives, executors, administrators, successors, assigns, parent,
affiliated and subsidiary companies, and their officers, directors and
shareholders, ever had, now have or may have had against Releasees arising out
of or related to the Acquisition Agreement and the Closing Agreement and of
which such Party had knowledge prior to the date of this Agreement and which was
communicated to Paravant in writing by or on behalf of such Party, except that,
other than to the extent, if any, that the STL backlog determination may affect
the calculation of the Cash Earn-Out (as defined in the Acquisition Agreement),
such release shall not affect any rights of STL or the Shareholders (i) with
respect to the Cash Earn-Out and (ii) which have not accrued as of the date of
this Agreement, nor does this Agreement, except as set forth herein, waive or
alter any other rights and obligations of any Party set forth in the Acquisition
Agreement or the Closing Agreement.
3. Waiver of Notice and Meeting Participation by Board Members. Each of
Xxxxxxxx, Xxxxxxxx and Xxxxxxxx, in his capacity as a member of the Board of
Directors of Paravant, hereby waives notice of and the right to attend and
participate in the meeting of the Board of Directors held on March 30, 1999, at
which meeting the Board of Directors of Paravant authorized this Agreement.
4. Representations and Warranties of STL and Shareholders. Each of STL and
the Shareholders represents, warrants and agrees as follows:
(a) Such Party has the legal capacity to execute, deliver and perform its
obligations under this Agreement and to consummate the transactions contemplated
hereby.
(b) The execution, delivery and performance by STL of this Agreement and any
related documents, and the consummation of the transactions contemplated hereby
and thereby, have been duly and validly authorized and approved by all necessary
corporate action of STL.
(c) This Agreement is valid and binding upon such Party and enforceable, in
accordance with its terms, against such Party, except to the extent that
enforcement thereof may be limited by applicable bankruptcy, reorganization,
insolvency or moratorium laws, or other laws affecting the enforcement of
creditors' rights or by the principles governing the availability of equitable
remedies.
(d) Such Party is not aware of any actions and causes of action, suits,
covenants, claims, contracts, controversies, agreements, promises, liabilities,
obligations, guarantees, indemnities, variances, damages, debts, sums of money,
accounts, reckonings, bonds, bills, trespasses, executions, judgments, defenses
and demands whatsoever that such Party ever had, now have or may have had
against Paravant, its subsidiary and affiliated companies and their officers,
directors, shareholders, successors and assigns arising out of or related to the
Acquisition Agreement and the Closing Agreement prior to the date of this
Agreement except as previously communicated in writing to Paravant by or on
behalf of such Party.
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5. Representations and Warranties of Paravant. Paravant represents, warrants
and agrees as follows:
(a) The execution, delivery and performance by Paravant of this Agreement
and any related documents, and the consummation of the transactions contemplated
hereby and thereby, have been duly and validly authorized and approved by all
necessary corporate action of Paravant.
(b) This Agreement is valid and binding upon Paravant and enforceable, in
accordance with its terms, against Paravant, except to the extent that
enforcement thereof may be limited by applicable bankruptcy, reorganization,
insolvency or moratorium laws, or other laws affecting the enforcement of
creditors' rights or by the principles governing the availability of equitable
remedies.
6. Dispute Resolution.
(a) Any claim or dispute between STL and/or the Shareholders on one side and
Paravant on the other side arising out of or in connection with this Agreement,
the Acquisition Agreement or the Closing Agreement or any alleged breach hereof
or thereof (a "Claim") (but specifically excluding any claim or dispute arising
out of or in connection with the promissory notes issued pursuant to the
Acquisition Agreement or the employment agreements entered into pursuant to the
Acquisition Agreement) shall be submitted in writing for resolution to the Chief
Executive Officer of Paravant and a representative designated by STL, who shall
exchange information within 15 business days of such submission and shall use
their best efforts to seek in good faith to negotiate a mutually acceptable
settlement, which shall include exchanges of written positions, basis and
documentation thereof, and face-to-face discussions with the stated intent to
resolve any such matters.
(b) Any Claim not settled by the Parties within 90 days after written notice
of the Claim is first given by any Party shall be finally settled by arbitration
under the Commercial Arbitration Rules (the "Rules") of the American Arbitration
Association ("AAA"), and judgment upon the award rendered in such arbitration
may be entered in any state or federal court of competent jurisdiction;
provided, however, that if a Party does not negotiate in good faith during such
90 day period, the other Party may request that such arbitration commence prior
to the expiration of such period, and the arbitrator shall not delay such
commencement if it determines that such Party failed to negotiate in good faith.
The arbitration shall be conducted in Atlanta, Georgia.
(c) The arbitration shall be conducted by a single arbitrator (the
"Arbitrator") to be selected by the Parties. If the Parties are unable to agree
on an Arbitrator, then each Party will select a representative within 15 days,
and those representatives shall select the Arbitrator within 15 days after their
appointment. For the purposes of this Section 6(c), STL and the Shareholders
shall be deemed a single Party. The Arbitrator shall be compensated at his or
her normal hourly or per diem rates for all time spent in connection with the
arbitration proceeding, and, pending final award, appropriate compensation and
expenses shall be advanced equally by the Parties.
(d) The Arbitrator shall determine the rights, remedies and obligations of
the parties according to the laws of the State of Florida. The Florida Rules of
Evidence and Civil Procedure shall apply to the arbitration hearing. The
pre-trial discovery procedures of Rule 26(a) and (f) of the Federal Rules of
Civil Procedure shall apply to the arbitration, with all disclosures to be made
within 30 days after the
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written notice of Claim is first given by any Party. All privileges recognized
by Florida law shall apply to the arbitration.
(e) The arbitration hearing shall be held not later than 120 days after the
appointment of the Arbitrator. The Arbitrator shall render the final award not
later than 20 days after the closing of the arbitration hearing. The Arbitrator
shall award to the prevailing party in such arbitration recovery of all of its
costs and expenses incurred in ascertaining, preparing to enforce and enforcing
such party's rights, including the arbitrator's compensation and the other
expenses of the arbitration, reasonable experts' fees and attorneys' fees, costs
and expenses; provided, however, that the Arbitrator may allocate any or all of
such costs and expenses among the Parties based on its consideration of their
good faith efforts to negotiate a settlement under Section 6(a) above.
(f) Except as required by law, all arbitration proceedings under this
Section 6 shall be confidential, and the Arbitrator may issue appropriate orders
to safeguard confidential information. Except as required by law or to permit a
court of competent jurisdiction to enter judgment upon the award rendered in the
arbitration, no Party shall make (or instruct the arbitrator to make) any public
announcement with respect to the proceedings or decision of any arbitration
without the consent of the other Parties.
(g) Notwithstanding anything to the contrary in this Section 6, any Party
may seek immediate injunctive or other interim relief or other equitable
remedies in any state or federal court of competent jurisdiction without resort
to arbitration as necessary to prevent breaches of this Agreement, the
Acquisition Agreement and the Closing Agreement and to enforce specifically this
Agreement, the Acquisition Agreement and the Closing Agreement, in addition to
any other remedy to which such Party may be entitled at law or in equity.
(h) Any Party may make service on the other Parties by sending or delivering
a copy of the process to the Party to be served in accordance with Section 8
below. Nothing in this Section 6(h) shall affect the right of any Party to serve
legal process in any other manner permitted by law or in equity. Each Party
agrees that a final judgment in any action or proceeding so brought shall be
conclusive and may be enforced by suit on the judgment or in any other manner
provided by law or in equity.
(i) Notwithstanding any other provision of this Section 6, in the event of
any claim or dispute between STL and/or the Shareholders on one side and
Paravant on the other side arising out of or in connection with the Cash
Earn-Out, the Parties agree that (A) to the extent that the amount of any Cash
Earn-Out is not in dispute, Paravant shall pay such amount pursuant to the terms
of the Acquisition Agreement without delay, and (B) any award by the Arbitrator
of the amount of the Cash Earn-Out in dispute to the Shareholders shall include
interest thereon through the date of payment at the prime rate published in the
Wall Street Journal.
7. Further Assurances. The Parties agree that, from time to time hereafter
and upon request, each of them will execute, acknowledge and deliver such other
instruments as may be reasonably required to more effectively carry out the
terms and conditions of this Agreement.
8. Notices. All notices or other communications in connection with this
Agreement shall be in writing and shall be considered given when personally
delivered or when mailed by registered or certified mail, postage prepaid,
return receipt requested, or when sent via overnight delivery,
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commercial courier or telecopier, directed to the address of the Party as set
forth in the Acquisition Agreement.
9. Entire Agreement. This Agreement (which includes the schedules and
exhibits hereto) sets forth the Parties' final and entire agreement with respect
to its subject matter and supersedes any and all prior understandings and
agreements. This Agreement can be amended, supplemented, or changed, and any
provision hereof can be waived, only by a written instrument making specific
reference to this Agreement signed by the Party against whom enforcement of any
such amendment, supplement, change, or waiver is sought.
10. Successors. This Agreement shall be binding upon and shall inure to the
benefit of the Parties hereto and their respective heirs, executors,
administrators, personal representatives, successors, and assigns; provided,
however, that neither this Agreement nor any right or obligation hereunder may
be assigned or transferred without the prior written consent of the other
Parties.
11. Construction of Agreement. The section headings in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. When the context in which the words are used
in this Agreement indicates that such is the intent, words in the singular
number shall include the plural and vice versa. References to any gender shall
include any other gender that may be applicable in the circumstances. This
Agreement shall be construed without regard to any presumption or other rule
requiring construction against the Party causing this Agreement to be drafted.
12. Severability. If any provision of this Agreement shall be held by any
court of competent jurisdiction to be illegal, invalid, or unenforceable, such
provision shall be construed and enforced as if it had been more narrowly drawn
so as not to be illegal, invalid or unenforceable, and such illegality,
invalidity or unenforceability shall have no effect upon and shall not impair
the enforceability of any other provision of this Agreement.
13. Expenses. Each Party shall bear its own expenses in connection with the
negotiation and execution of this Agreement and the consummation of the
transactions contemplated by this Agreement, including, without limitation,
legal and accounting fees and expenses.
14. Counterparts. This Agreement may be executed in one or more
counterparts, each one of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. Delivery of an executed
counterpart of this Agreement via telephone facsimile transmission shall be as
effective as delivery of a manually executed counterpart of this Agreement.
15. Governing Law. The validity, interpretation, and enforcement of this
Agreement, of the rights and obligations of the Parties hereto, and of the other
documents delivered in connection herewith shall be governed by, and construed
and interpreted in accordance with, the laws of the State of Florida, excluding
those laws relating to the resolution of conflicts between laws of different
jurisdictions.
16. Attorneys' Fees. In the event of litigation that relates to or arises
from this Agreement or any of the terms contained herein, the prevailing Party
shall be entitled to reimbursement by the non-prevailing Party(ies) for
attorneys' fees and costs, including fees and costs at the appellate level, that
were incurred by the prevailing Party.
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17. Construction. As used herein, unless the context otherwise requires: (i)
references to "Article" or "Section" are to an article or section hereof; (ii)
all "Exhibits" and "Schedules" referred to herein are to Exhibits and schedules
attached hereto and are incorporated herein by reference and made a part hereof;
(iii) "include," "includes" and "including" are deemed to be followed by
"without limitation" whether or not they are in fact followed by such words or
words of like import; and (iv) the table of contents, captions and other
headings of the various articles, sections and other subdivisions hereof are for
convenience of reference only and shall not modify, define or limit, or affect
the interpretation of any of the terms, meaning or provisions hereof.
IN WITNESS WHEREOF, as of date first above written, the Parties have
duly executed this Agreement.
Paravant Inc.
By: /s/ Xxxxxxx X. Xxxxxx
_________________________________
Xxxxxxx X. Xxxxxx
Executive Vice President
Signal Technology Laboratories, Inc.
By: /s/ X. Xxxxxx Xxxxxxxx
_________________________________
X. Xxxxxx Xxxxxxxx, President
/s/ Xxxxx X. Xxxxxxxx
____________________________________
Xxxxx X. Xxxxxxxx
/s/ Xxxxxx X. Xxxxxxxx
____________________________________
Xxxxxx X. Xxxxxxxx
/s/ C. Xxxxx Xxxxxxxxxx
____________________________________
C. Xxxxx Xxxxxxxxxx
/s/ X. Xxxxxx Xxxxxxxx
____________________________________
X. Xxxxxx Xxxxxxxx
/s/ Xxxxx Xxxxxxxx
____________________________________
Xxxxx Xxxxxxxx
/s/ Xxx X. Xxxxxxxxx
____________________________________
Xxx X. Xxxxxxxxx
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