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Exhibit
10.33
EXECUTION COPY
WARRANT EXERCISE
AGREEMENT
This agreement (the
“Agreement”) is entered into by and between the
following parties (the “Parties”) as of the 31st day of
July, 2006: (i) David H. Brooks (“Mr. Brooks”) and
(ii) DHB Industries, Inc. (the “Company” or
“DHB”).
RECITALS
WHEREAS, on July 1,
2000, the Company and Mr. Brooks entered into a five-year
employment agreement (the “Employment Agreement”)
entitling Mr. Brooks to, among other things, (i) 750,000
warrants exercisable at $1.00 per share vesting every year on the
anniversary of the Employment Agreement and (ii) the right to
extend the Employment Agreement for an additional five-year term on
the same terms and conditions; and
WHEREAS, on December 27,
2004, Mr. Brooks exercised his right to extend the Employment
Agreement for an additional five-year term on the same terms and
conditions;
WHEREAS, Mr. Brooks
became entitled on July 1, 2006 to exercise warrants to
acquire 750,000 shares of common stock of DHB at $1.00 per share
and provided notice of his exercise of those warrants on
July 7, 2006 (the “July Warrants”);
WHEREAS, Mr. Brooks
remained in possession of unvested and unexercised warrants to
acquire 3,000,000 shares of common stock of DHB at $1.00 per share
(the “Unvested Warrants”);
WHEREAS, on July 12,
2006, the Parties, among others, entered a Memorandum of
Understanding (“MOU”) in settlement (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”);
WHEREAS, DHB agreed in the
Memorandum of Understanding to accelerate the vesting of the
Unvested Warrants and Mr. Brooks agreed to exercise those
warrants at an increased exercise price of $2.50 per share in order
to fund, in part, the Settlement and in consideration of
Mr. Brooks’ resignation from his positions at
DHB;
WHEREAS, The Memorandum of
Understanding provides that, in the event the Settlement is not
finally approved by the Court in substantially the form of, and
containing substantially the same provisions as those set forth in,
the Memorandum of Understanding, DHB shall pay or cause to be paid
from the settlement funds being held in escrow, to Mr. Brooks,
$4,500,000, being the difference between the warrant exercise price
of $1 per share and the elevat
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