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Exhibit
10.30
RELEASE AGREEMENT AND
CONTRACTUAL UNDERTAKINGS
This agreement (the
“Agreement”) is entered into by and between the
following parties (the “Parties”): (i) David H.
Brooks (“Mr. Brooks”) and (ii) DHB Industries,
Inc. (the “Company” or “DHB”).
RECITALS
On July 12, 2006, the
Company and Mr. Brooks, among others, entered into a
Memorandum of Understanding (“MOU”) regarding the
settlement of the matters captioned (i) In re DHB
Industries, Inc. Class Action Litigation , United States
District Court for the Eastern District of New York, No. CV 05-4296
(JS) (ETB) and (ii) In re DHB Industries, Inc. Derivative
Litigation , United States District Court for the Eastern
District of New York, CV 05-4345 (JS) (ETB) (collectively, the
“Litigation”).
The MOU requires the Parties
to execute various agreements relating to the settlement of the
Litigation and other matters, to take certain actions, and to
exchange general releases as provided in the MOU.
Pursuant to the MOU, the
Parties are executing simultaneously herewith the following
agreements: (i) Securities Purchase Agreement (Exhibit A);
(ii) Registration Rights Agreement (Exhibit B);
(iii) Warrant Exercise Agreement (Exhibit C); (iv) Escrow
Agreement (Exhibit D); (v) Undertaking (Exhibit E); and
Agreement Among Insureds (Exhibit F). In addition, the Parties are
in the process of preparing additional agreements required to be
executed pursuant to the MOU, including Stipulations of Settlement
of the Litigation and various releases. The MOU, the Securities
Purchase Agreement, the Registration Rights Agreement, the Warrant
Exercise Agreement, the Escrow Agreement, the Undertaking, the
Agreement Among Insureds, and other agreements between the Parties
required to be executed under the terms of the MOU are referred to
herein as the “Operative Agreements.” Each of the
Operative Agreements memorializes and details rights and
obligations created by the MOU with respect to the subject matter
of each agreement.
This Agreement is being
entered into to effectuate, memorialize, and detail additional
terms of the MOU, including the obligation of the Parties to
exchange releases in the form specified in the MOU and the
obligation of Mr. Brooks to resign from the Board of Directors
of DHB and from all of the other positions held by him in
DHB.
AGREEMENT
In consideration of the
mutual obligations set forth in the Operative Agreements and in
this Agreement, the Parties agree as follows:
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1. |
Effect on
Other Agreements . With the exception of the Operative
Agreements, which remain in full force and effect except to the
extent that they conflict with this Agreement, this Agreement
supersedes and rescinds all prior agreements (“Prior
Agreements”) between DHB and Mr. Brooks, whether verbal
or in writing,
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including but not limited to:
(i) the employment agreement between DHB and Mr. Brooks
dated July 1, 2000, as extended by Mr. Brooks through
June 30, 2010; (ii) the Warrant Agreement between DHB and
Mr. Brooks dated July 1, 2005; and (iii) any
contract rights created by prior resolutions of the Board of
Directors of DHB with respect to reimbursement of costs or expenses
incurred by Mr. Brooks for travel, entertainment or housing.
All Prior Agreements are hereby terminated, and Mr. Brooks
shall have no further rights to compensation including any
severance thereunder. Notwithstanding the foregoing, this Agreement
shall not affect any rights of Mr. Brooks arising solely from
(i) ownership or control of securities issued by DHB or
(ii) options and/or warrants previously granted to
Mr. Brooks on the same terms and conditions as other directors
as compensation for service on the Board of Directors of the
Company (which options and/or warrants shall remain valid and
enforceable).
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2. |
Best Efforts . Each of DHB and Mr. Brooks
represents and warrants that each shall use reasonable best efforts
in all respects to consummate and secure judicial approval of the
settlements contemplated by the MOU, including prompt preparation
of all settlement documents and diligent advocacy of the
settlements at all stages of court and appellate
proceedings. |
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3. |
Resignation of Mr. Brooks . By executing this
Agreement, Mr. Brooks hereby resigns from the Board of
Directors of DHB and from all of the other positions held by him in
DHB or any of its subsidiaries or affiliates. Mr. Brooks
represents and warrants that his resignation is entirely voluntary
and entered into solely in consideration of the representations and
agreements set forth in this Agreement, other agreements entered
into simultaneously herewith, and the MOU. DHB shall promptly pay
Mr. Brooks, on a pro rata basis through the date of execution
of this Agreement, any unpaid salary at the pre-existing rate of
$800,000 per year. Mr. Brooks shall not be entitled to any
unpaid bonus, DHB warrants not yet awarded, accrued or unused
vacation, or unpaid expenses. Mr. Brooks shall be eligible for
continued coverage under DHB-sponsored health and dental plans to
the extent permitted by the Consolidated Omnibus Budget
Reconciliation Act of 1985, and the Company shall provide
Mr. Brooks with such information and forms as are required for
him to exercise this right. The Company shall permit
Mr. Brooks a reasonable opportunity to remove all personal
items from offices of DHB and its subsidiaries, including but not
limited to model ships, model cars, and the like. |
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4. |
Board and Committee Minutes . DHB shall provide
Mr. Brooks with the minutes of any meetings of the Board of
Directors of DHB or committees thereof for the three months prior
to the date of execution of this Agreement within a reasonable time
following DHB’s completion and approval of such
minutes. |
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5. |
Personal
Guarantees of Mr. Brooks and his Spouse . Upon the
execution of this Agreement, Mr. Brooks will identify any and
all obligations of which he is aware that were incurred solely for
the benefit and in the name of DHB in the ordinary course of
business, not in violation of any statute, regulatory or other
legal obligations and not contrary to any resolution or direction
of the Board of Directors or
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the Company’s
policies (excluding any such obligations that directly benefited
Mr. Brooks, his spouse or Mr. Brooks’ family
members), and that are subject to personal guarantees by
Mr. Brooks and/or his spouse (“Obligations”).
Mr. Brooks represents that, to the best of his present
recollection, the sole Obligations are guarantees by
Mr. Brooks of certain DHB American Express credit cards, with
debit balances not believed to have exceeded $50,000 when last
known to Mr. Brooks, and his guarantee of accounts payable by
DHB to Hexcel Corporation. Within 60 days of the execution of this
Agreement (with respect to obligations to Hexcel and American
Express referenced in this Agreement) and Mr. Brooks’
identification of such Obligations (with respect to any other
Obligations), the Company shall either (i) pay such
Obligations; or (ii) secure from the relevant persons a
release of the relevant guarantees by Mr. Brooks and/or his
spouse.
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6. |
DHB’s New York Office Lease . If by
August 31, 2006, the Company secures the required consent of
the landlord of the space occupied by DHB’s New York Office
and delivers the space to Mr. Brooks, (i) Mr. Brooks
shall accept assignment of such lease and assume all future
obligations of DHB under the presently operative lease for such
space with no further obligations under the lease accruing to DHB
after the date of assignment; and (ii) except as otherwise
provided in Paragraph 7 of this Agreement, the Company shall
transfer to Mr. Brooks at no charge all furniture and
equipment of DHB now contained in the New York Office. If the
foregoing conditions are not met by August 31, 2006,
Mr. Brooks shall have no rights or obligations with respect to
the lease or the furniture and equipment of DHB contained in the
New York Office, and shall immediately thereafter vacate the New
York Office. |
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7. |
Return of Company Property by Mr. Books . Except as
otherwise provided in t |
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