EXHIBIT 10.34
SETTLEMENT AGREEMENT
This Settlement Agreement (this "Agreement") is made and entered into as
of May 16, 2003, by and between Xxxxxxx X. Xxxx ("Xxxx"), Novadigm, Inc., a
Delaware corporation ("Novadigm"), and Albion Xxxxxxxxxx, Xxxxxxx Xxxxx
XxXxxxxxx, Xxxxxx X. Xxxxxxxx and H. Xxxx Xxxxxxx (collectively, the "Named
Directors").
RECITALS
X. Xxxx has asserted certain claims against Novadigm and the Named
Directors as set forth in the draft Statement of Claim annexed hereto as Exhibit
A (the "Claims").
B. Without admitting the validity of any of the claims and defenses that
have been or could be asserted between them arising out of or relating to the
Claims, Xxxx, Novadigm and the Named Directors have determined that it is in
their respective best interests to avoid arbitration and litigation, and
therefore have arrived at a mutually satisfactory settlement of their claims and
all other disputes existing between them arising out of or relating to the
Claims on the terms and conditions herein set forth.
In consideration of the mutual promises, agreements, covenants and
conditions contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties do hereby
agree as follows:
1. Settlement Payment. Immediately following the expiration of the
Revocation Period (as defined in Section 16 of this Agreement), Novadigm shall
pay to Xxxx the amount of $1,079,702 (the "Settlement Payment"), less the amount
of applicable withholding taxes. Such payment will be in the form of one or more
Novadigm checks payable to the order of Xxxx (the "Novadigm Checks"). The
parties acknowledge that the Settlement Payment will be reportable to the
Internal Revenue Service by Novadigm on Form W-2 as compensation to Xxxx and the
parties agree not to take any inconsistent position in connection with any
applicable local, state or federal tax returns.
2. Repayment of Borrowings. Immediately following the payment of the
Settlement Payment to Xxxx pursuant to Section 1 of this Agreement, Xxxx shall
(a) pay to Novadigm the amount of $542,369 (the "Cash Repayment") as partial
repayment of the amounts due under Xxxx'x promissory note dated October 1, 2001
payable to the order of Novadigm (the "2001 Note") and Xxxx'x promissory note
dated April 17, 2002 payable to the order of Novadigm (the "2002 Note" and
together with the 2001 Note, the "Notes") and (b) surrender, relinquish, convey,
transfer and assign all of Xxxx'x right, title and interest in the 126,000
shares (the "Pledged Shares") of common stock, par value $0.001 per share, of
Novadigm ("Common Stock") represented by certificate numbers C0548 (85,000
shares), C0611 (35,000 shares), and C0574 (6,000 shares), beneficially owned by
Xxxx and pledged as collateral against repayment of the Notes, in complete
satisfaction of the outstanding amounts payable to Novadigm pursuant to
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the Notes. The parties agree that if Novadigm so requests, the Cash Repayment
will be made via indorsement to the order of the Company and redelivery to the
Company by Xxxx of one or more of the Novadigm Checks payable in an amount equal
to the Cash Repayment. Upon payment in full pursuant to this Section 2, the
Notes shall be deemed paid and discharged in full and shall be marked "PAID AND
CANCELLED."
3. Release by Xxxx. Except for a claim based upon a breach of this
Agreement, Xxxx, for and on behalf of himself and his family, heirs, executors,
representatives, agents, insurers, administrators, successors, and assigns,
releases and forever discharges the Novadigm Releasees (as defined below), from
any and all rights, claims, demands, debts, dues, sums of money, accounts,
attorneys' fees, complaints, judgments, executions, actions and causes of action
of any nature whatsoever, cognizable at law or equity, whether known or unknown,
arising out of or relating to the Claims. The term "Novadigm Releasees" means
Novadigm, each Affiliate (as such term is defined in Rule 12b-2 promulgated
under the Securities Exchange Act of 1934, as amended) of Novadigm, each
director (including, without limitation, each Named Director), officer, trustee,
member, representative, agent, employee, shareholder, partner, attorney, assign
and insurer of Novadigm or any of its Affiliates, and the predecessors, heirs,
assigns, personal representatives and successors of any of the foregoing.
4. Release by Novadigm. Except for a claim based upon a breach of this
Agreement, Novadigm, for and on behalf of itself and each Affiliate (as such
term is defined in Rule 12b-2 promulgated under the Securities Exchange Act of
1934, as amended) of Novadigm, each director (including, without limitation,
each Named Director), officer, trustee, member, representative, agent, employee,
shareholder, partner, attorney, assign and insurer of Novadigm or any of its
Affiliates, and the predecessors, heirs, assigns, personal representatives and
successors of any of the foregoing, releases and forever discharges Xxxx, his
family, heirs, executors, representatives, agents, insurers, administrators,
successors, and assigns, from any and all rights, claims, demands, debts, dues,
sums of money, accounts, attorneys' fees, complaints, judgments, executions,
actions and causes of action of any nature whatsoever, cognizable at law or
equity, whether known or unknown, arising out of or relating to the Claims.
5. Release by the Named Directors. Except for a claim based upon a breach
of this Agreement, each of the Named Directors, for and on behalf of himself or
herself, and his or her family, heirs, executors, representatives, agents,
insurers, administrators, successors, and assigns, releases and forever
discharges Xxxx, his family, heirs, executors, representatives, agents,
insurers, administrators, successors, and assigns, from any and all rights,
claims, demands, debts, dues, sums of money, accounts, attorneys' fees,
complaints, judgments, executions, actions and causes of action of any nature
whatsoever, cognizable at law or equity, whether known or unknown, arising out
of or relating to the Claims.
6. Separate Consideration. Xxxx hereby acknowledges that in exchange for
the Release he has received separate consideration beyond that to which he is
otherwise entitled under Novadigm's policy or applicable law.
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7. Settlement Purposes Only. This Agreement and each of the undertakings,
agreements, promises and representations contained herein are made for the
purpose of settlement only. The parties agree and intend that neither this
Agreement nor any term, provision, promise, representation, undertaking or
agreement contained herein shall be used, or shall be usable, in any
proceedings, whether civil, administrative, or of any other nature or kind,
except in a proceeding involving the enforcement of this Agreement.
8. Cooperation. The parties agree to cooperate with each other to
implement the terms of this Agreement, including without limitation, executing
such documents and instruments as either party may require with respect to the
agreements contained and referred to herein.
9. Entire Agreement. This Agreement comprises the entire settlement
agreement between the parties and replaces and supersedes any and all prior or
contemporaneous settlement negotiations and agreements relating to the subject
matter hereof.
10. Amendment. This Agreement may not be amended or modified and no right
hereunder may be waived except by written instrument duly executed by each of
the parties hereto.
11. Choice of Law. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the State of New
Jersey.
12. Successors. This Agreement shall be binding upon and shall inure to
the benefit of the parties and their respective heirs, assigns, personal
representatives or successors in interest.
13. Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed an original, but all of which together will constitute one
and the same instrument. Facsimile signatures are sufficient for purposes of
consummating and completing this Agreement.
14. Attorney's Fees Recoverable in Event of Breach. Each party agrees that
if either party violates any provision of this Agreement the non-violating party
shall be entitled to recover all its attorneys' fees and costs incurred in any
suit to enforce the terms of, or avail itself of rights under, this Agreement.
15. Notices. Notices and all other communications contemplated by this
Agreement shall be in writing and shall be deemed to have been duly given when
personally delivered or when mailed by U.S. registered or certified mail, return
receipt requested and postage prepaid. In the case of Xxxx, mailed notices shall
be addressed to him at the home address which he most recently communicated to
Novadigm in writing, with a copy by first class mail and facsimile to Xxxxxxxx
X. Xxxxxxx, Esq., Xxxxxxxxxx Xxxxxxx PC, 00 Xxxxxxxxxx Xxxxxx, Xxxxxxxx, Xxx
Xxxxxx 00000, facsimile: 973.597.2400. In the case of Novadigm and the Named
Directors, mailed notices shall be addressed to Novadigm (or in care of
Novadigm, in the case of the Named Directors) at its corporate headquarters, and
all notices shall be directed to the attention of its Secretary.
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16. Right to Revoke. Xxxx has up to twenty-one (21) days from the date of
presentment to consider whether or not to execute this Agreement. In the event
of such execution, Xxxx has a further period of seven (7) days from the date of
execution of this Agreement (the "Revocation Period") in which to revoke the
execution of this Agreement by notifying Novadigm thereof in writing. This
Agreement will not be effective prior to expiration of the Revocation Period,
and this Agreement and the rights, duties and obligations of the parties hereto
shall become final and binding immediately following the expiration of the
Revocation Period if Xxxx has not properly exercised such right of revocation
prior to the expiration of the Revocation Period. If Xxxx revokes the execution
of this Agreement within the Revocation Period then this Agreement shall be
immediately terminated and of no further force or effect, and the parties shall
be returned to their original positions as if this Agreement had not been
entered into.
17. Attorney Consultation. Each of the parties hereto hereby acknowledges
that he, she or it has been represented by counsel during the period of the
preparation, negotiation and execution of this Agreement, and that he, she or it
has executed this Agreement having had the opportunity to review with and seek
the advice of such legal counsel.
18. Understanding of the Agreement. Each of the parties hereto has read
this Agreement carefully and knows and understands the contents thereof. Each of
the parties is fully aware of the legal and binding effect of this Agreement.
Each of the parties has made such an investigation of the facts pertinent to
this Agreement and of all the matters pertaining thereto as he, she or it deemed
necessary.
19. Authorizations. The parties hereto each have the authority to enter
into this Agreement on behalf of themselves and any other party or parties on
whose behalf the party hereto has executed this Agreement.
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IN WITNESS WHEREOF, each of the parties has executed this Agreement, in
the case of Novadigm by its duly authorized officer, as of the day and year
first above written.
NOVADIGM: NOVADIGM, INC.
By: /s/ Albion X. Xxxxxxxxxx
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Albion X. Xxxxxxxxxx
Chief Executive Officer
XXXX: /s/ Xxxxxxx X. Xxxx
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Xxxxxxx X. Xxxx
NAMED DIRECTORS: /s/ Albion X. Xxxxxxxxxx
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Albion Xxxxxxxxxx
/s/ Xxxxxxx X. XxXxxxxxx
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Xxxxxxx Xxxxx XxXxxxxxx
/s/ Xxxxxx Xxxxxxxx
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Xxxxxx X. Xxxxxxxx
/s/ Xxxx Xxxxxxx
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H. Xxxx Xxxxxxx
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