SETTLEMENT AGREEMENT
AND MUTUAL GENERAL RELEASE
This Settlement Agreement and Mutual General Release ("Agreement") is made
and entered into by and among the claimants XXXXXXX X. XXXXXX, XXXXXXX X.
XXXXXXXX ("Massaker"), XXXXX X. XXXXXXX ("Wingate"), and HERITAGE INVESTMENT
LIMITED PARTNERSHIP, a North Carolina limited partnership (who are collectively
referred to as the "Claimants"); and the respondents GENRAD, INC., a
Massachusetts corporation ("GenRad"), XXXXX X. XXXXX, AND XXXX XXXXXXX, XX. (who
are collectively referred to as the "Respondents").
WITNESSETH:
WHEREAS, there is presently pending before the American Arbitration
Association, Boston, Massachusetts Regional Office, a case captioned Xxxxxxx X.
Xxxxxx; Xxxxxxx X. Xxxxxxxx; Xxxxx X. Xxxxxxx; and Heritage Investment Limited
Partnership v. GenRad, Inc.; Xxxxx X. Xxxxx and Xxxx Xxxxxxx, Xx., No. 11 168
00247 98 (the "Arbitration"), in which Claimants have made certain claims
against Respondents with regard to the sale, exchange and conversion of their
stock in Industrial Computer Corporation ("ICC") for shares of the stock of
GenRad on April 7, 1998 (the "Merger") pursuant to the Agreement and Plan of
Merger dated that date (the "Merger Agreement"), and in which GenRad has made
counterclaims against Claimants with regard to the Merger ("Counterclaims"); and
WHEREAS, GenRad and Claimants executed certain agreements in connection
with the Merger which shall be amended as provided herein,
including, but not limited to, the Merger Agreement; an Employment Agreement
between GenRad and Xxxxxxx, dated April 7, 1998 (the "Xxxxxxx Employment
Agreement"); a Registration Rights Agreement between GenRad and Claimants, dated
April 7, 1998 (the "Registration Rights Agreement"); Non-Competition, Assignment
and Non-Disclosure Agreements between GenRad and Massaker and GenRad and Xxxxxxx
dated April 7, 1998 (the "Massaker Non-Competition Agreement" and the "Xxxxxxx
Non-Competition Agreement"); an Escrow Agreement among GenRad, Claimants, and
State Street Bank and Trust Company as Escrow Agent, dated April 7, 1998 (the
"Escrow Agreement"); and Stockholder Letters, dated April 7, 1998, between each
Claimant and GenRad (each, a "Stockholder Letter") (collectively, the "Merger
Documents"); and
WHEREAS, Claimants and Respondents, for and in consideration of the mutual
covenants, agreements, forebearances, waivers, releases, and conditions
contained herein, have agreed to compromise and settle fully and finally their
respective claims in the Arbitration, without any admission of liability by
either party or concession as to the validity or invalidity of the claims made
by them in the Arbitration, solely to avoid further costs and risks of
litigation, and have further agreed that all other claims arising under or
relating or pertaining to the matters set forth in the Merger Documents shall be
released and waived (except as specifically identified and provided in this
Agreement), all upon the following terms and conditions.
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NOW, THEREFORE, in consideration of the promises, covenants, agreements,
forebearances, waivers, releases, and conditions contained herein, Claimants and
Respondents voluntarily and knowingly execute this Agreement with the express
intention of effectuating the actions set forth in the premises and elsewhere
herein:
1. Payment to Claimants. Respondents shall pay to Claimants the sum of Eleven
Million Dollars ($11,000,000) on or before 5:00 p.m., Boston time, on the
eighth (8th) business day following the date of the effectiveness of this
Agreement, such payment to be made by wire transfer to the Brooks, Pierce,
XxXxxxxx, Xxxxxxxx & Xxxxxxx, L.L.P. Trust Account at Central Carolina Bank
and Trust Company, Account 371064346, 000 Xxxxx Xxx Xxxxxx, Xxxxxxxxxx,
Xxxxx Xxxxxxxx 00000, via ABA Routing No. 0000-00-000. GenRad acknowledges
and agrees that the Merger has been, and will continue to be, treated for
tax purposes by GenRad as a tax free reorganization under Section 368 of the
Internal Revenue Code. GenRad is aware that Claimants intend to treat the
payment made hereunder for tax purposes as being made in connection with
their claims in the Arbitration regarding their alleged damages suffered in
connection with the Merger.
2. Releases of Escrow Shares. All shares of GenRad stock issued to Claimants
and held in escrow pursuant to the Merger Agreement and the Escrow Agreement
shall be released to Claimants by delivery of individual
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certificates for the applicable numbers of shares of GenRad in the names of
Claimants to Xxxxxx X. Xxxxxx, Brooks, Pierce, XxXxxxxx, Xxxxxxxx & Xxxxxxx,
L.L.P., 000 Xxxxx Xxx Xxxxxx, Xxxxx 0000, Xxxxxxxxxxx Xxxxx, Xxxxxxxxxx,
Xxxxx Xxxxxxxx 00000 ("Counsel"). Claimants and Respondents shall make a
joint request to the escrow agent for such release on or before the third
(3rd) business day following the date of the effectiveness of this
Agreement. Individual Claimants will receive cash in lieu of fractional
Shares of Stock, if any. GenRad shall execute and deliver to Counsel
together therewith the Joint Escrow Release Letter attached hereto as
Exhibit A.
3. Registration Rights Agreement. The Registration Rights Agreement shall be
deemed amended as follows:
a. The second sentence of Section 1.2(a) shall be deemed to end after
the reference to the "Securities Act," with the remainder of such
sentence ("...and such Registration Statement...the Effective
Time") being deemed deleted, terminated and cancelled.
b. The reference in Section 1.2(b) to Section 1.2(c) shall be deemed
deleted, terminated and cancelled.
c. Section 1.2(c) shall be deemed deleted, terminated and cancelled.
Except as specifically stated above, the Registration Rights Agreement
shall remain in full force and effect.
4. Stockholder Letters. The sentence composing Section 1 of each Stockholder
Letter shall be deemed to end after the phrase "...laws, rules
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and regulations", with the remainder of such sentence ("...and to
offer...such broker") being deemed deleted, terminated and cancelled. Except
as specifically stated above, the Stockholder Letters shall remain in full
force and effect. GenRad will execute a Notice or Notices in the form
attached hereto as Exhibit B informing its stock transfer agents and any
broker employed by Claimants of the elimination of any restrictions
presently in place on their sale of GenRad stock.
5. Additional Matters Regarding Xxxxxxx. Xxxxxxx'x employment with GenRad shall
be terminated by GenRad, at Xxxxxxx'x request, as of 11:59 p.m., Boston
time, on April 30, 1999 (and no sooner), pursuant to the terms of the
Xxxxxxx Employment Agreement, except that Section 7 of the Xxxxxxx
Employment Agreement shall be deemed deleted, terminated and cancelled. Up
to and including April 30, 1999, Xxxxxxx shall remain an employee and retain
all benefits of his employment status, including, but not limited to, all
grant, vesting and exercise rights existing under the Stock Option
Agreement, dated April 28, 1998, between Xxxxxxx and GenRad, including, but
not limited to, the right to exercise currently existing stock options which
are otherwise fully vested and exercisable at that time and are granted to
him in accordance with the terms of such Stock Option Agreement and GenRad's
1997 Non-Qualified Employee Stock Option Plan. The restrictions set forth in
Section 1 of the Xxxxxxx Non-Competition Agreement shall terminate two years
from the date of
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termination of Xxxxxxx'x employment. In the event any inquiries are made to
any of Respondents with regard to Xxxxxxx'x employment with GenRad or the
termination of that employment, the response shall be as follows: "Xx.
Xxxxxxx was employed as President of ICC/GRSoftware, a business unit of
GenRad, from April 7, 1998 through April 30, 1999. Xx. Xxxxxxx left GenRad
on mutually agreeable terms." Xxxxxxx has entered into a separate Severance
Agreement simultaneously with this Agreement. In the event that there is any
conflict between this Agreement and the Severance Agreement, the terms of
this Agreement shall control.
6. Additional Matters Regarding Massaker. Section 1 of the Massaker Non-
Competition Agreement is hereby terminated and cancelled, and GenRad
releases, waives and discharges any and all Claims (as defined in paragraph
7 below) under that section.
7. Release of Respondents. Except as expressly set forth herein, Claimants
hereby release and forever discharge Respondents and their officers,
directors, stockholders, corporate affiliates, subsidiaries, attorneys,
agents and employees from any and all demands for arbitration, claims,
claims for relief, actions, causes of action, liabilities, obligations,
costs, costs of investigation, attorneys' fees and expenses, expert witness
fees and expenses, consultants' fees and expenses, interest, damages,
losses, and demands of every kind and nature whatsoever, known or unknown,
matured or unmatured, at common law, statutory, in equity or otherwise,
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suspected or not suspected to exist, or which they have had or claim to have
had, or now have or claim to have, or hereafter may have or assert to have
("Claims"), arising from or in any way related to the Merger, the Merger
Agreement, the Merger Documents, and Claimants' acquisition, purchase or
ownership of GenRad stock (whether asserted directly or indirectly),
including, but not limited to, those claims which were alleged or could have
been alleged in the Arbitration. Nothing contained herein shall constitute a
release of the Respondents or the Claimants for a breach of this Agreement.
8. Release of Claimants. Except as expressly set forth herein, Respondents
hereby release and forever discharge Claimants and their partners, corporate
affiliates, subsidiaries, attorneys, agents and employees of and from any
and all Claims arising from or which are related in any way to the Merger,
the Merger Agreement, the Merger Documents, and Claimants' acquisition,
purchase or ownership of GenRad stock (whether asserted directly or
indirectly), including, but not limited to, the counterclaims which were
alleged or could have been alleged in the Arbitration. Nothing contained
herein shall constitute a release of the Respondents or the Claimants for a
breach of this Agreement.
9. Dismissal of Arbitration; Fees and Costs. Claimants and Respondents shall
notify the AAA that the Arbitration shall be dismissed. Claimants and
Respondents shall bear their own costs, attorneys' fees and expenses,
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expert witness fees and expenses, and consultants' fees and expenses
incurred with respect to the Arbitration, including, but not limited to,
those incurred in connection with this Agreement.
10. Press Release. Any press release or media communication issued by GenRad
regarding this settlement shall contain the following language: "During the
period from April 7, 1998 through April 30, 1998, Xxxxx Xxxxxxx served as
President of ICC/GR Software, a business unit of GenRad. Xx. Xxxxxxx and
GenRad are separating on mutually agreeable terms."
11. No Admission; No Disparagement. This Agreement represents a compromise of
disputed claims. Each party denies liability to any other party hereto and
intends by this settlement merely to avoid litigation and to buy peace, and
nothing contained herein shall constitute any admission as to liability on
any claim or counterclaim in the Arbitration. In keeping with the spirit of
this Agreement, Claimants and Respondents agree that they shall not make any
disparaging or negative statement to any third party regarding the matters
at issue in the Arbitration or the employment of Xxxxxxx with GenRad, or the
business or management of GenRad.
12. Entire Agreement. This Agreement contains the entire agreement and
understanding among Claimants and Respondents with respect to the matters
referred to herein. No other representations, covenants,
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undertakings, or other prior or contemporaneous agreements, oral or written,
respecting such matters which are not specifically incorporated herein shall
be deemed in any way to exist or to bind Respondents or Claimants. The
parties acknowledge that they have not executed this Agreement in reliance
on any such representations, covenants, undertakings, or agreements.
13. Modifications. This Agreement may not be modified by any oral representation
made before or after the execution of this Agreement. All modifications must
be in writing and signed by Claimants and Respondents.
14. Severability. If any portion or provision of this Agreement is held or
adjudicated to be invalid or unenforceable for any reason, each such portion
or provision shall be severed from the remaining portions of this Agreement,
and the remaining portions or provisions shall be unaffected.
15. Counterparts. This Agreement may be executed in any number of counterparts,
any of which will be deemed an original and all of which when taken together
shall constitute one and the same instrument.
16. Effectiveness. This Agreement shall be effective, binding and enforceable
only upon its execution by all parties, and shall not be effective with
respect to, binding upon or enforceable against any party until all parties
have executed this Agreement and forwarded, via facsimile, their executed
signature pages to Counsel for Claimants and Respondents. Immediately
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thereafter, all parties shall forward original executed signature pages to
Counsel for Claimants and Respondents via overnight mail. Claimants and
Respondents agree that in addition to actions for monetary relief, Claimants
shall be entitled to all equitable remedies, including specific performance,
in the event Respondents fail to cause the payment and/or delivery described
in paragraphs 1 and 2 of this Agreement.
17. Surviving Agreements. The parties acknowledge and agree that, upon the
effectiveness of this Agreement as provided in paragraph 16 above, the
Merger Agreement, the Escrow Agreement, the Massaker Non-Competition
Agreement, the Xxxxxxx Non-Competition Agreement, the Xxxxxxx Employment
Agreement, the Registration Rights Agreement and the Stockholder Letters
shall have force and effect only in the amended forms affected hereby.
18. Advice of Counsel. The Claimants and Respondents represent that they have
had the opportunity to obtain the advice of legal counsel prior to signing
this Agreement and that they fully and freely assent to all of the terms of
this Agreement and to be bound by its terms.
April 7, 1999 /s/ Xxxxxxx X. Xxxxxx
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Date Xxxxxxx X. Xxxxxx
April 7, 1999 /s/ Xxxxxxx X. Xxxxxxxx
---------------------------------- ----------------------------------
Date Xxxxxxx X. Xxxxxxxx
April 7, 1999 /s/ Xxxxx X. Xxxxxxx
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Date Xxxxx X. Xxxxxxx
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HERITAGE INVESTMENT LIMITED
PARTNERSHIP, a North Carolina
limited partnership
By: NEXGEN CAPITAL
CORPORATION
By: /s/ Miles X. Xxxxx, III
------------------------------
Miles X. Xxxxx, III
Its Secretary
---------------------------
Date: April 7, 1999
-----------------------------
GENRAD, INC, A Massachusetts
corporation
By: /s/ Xxxxxx X. Xxxxxxxx
-------------------------------
Title: Chief Financial Officer
----------------------------
Date: April 7, 1999
-----------------------------
Date April 7, 1999 /s/ Xxxxx X. Xxxxx
---------------------------------- ----------------------------------
Date April 7, 1999 /s/ Xxxx Xxxxxxx, Xx.
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