Document:

Unassociated Document

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES LAWS, AND MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT THERETO UNDER SUCH ACT AND APPLICABLE LAWS OR AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT AND APPLICABLE LAWS OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.

PROTEA BIOSCIENCES GROUP, INC.

CONVERTIBLE PROMISSORY NOTE

	
$_______________

	
         Issue Date: December 20, 2011

 

 

 

Protea Bioscinces Group, Inc., a Delaware corporation (the “Company”), the principal office of which is located at 955 Hartman Run Road, Morgantown, WV 26507 for value received hereby promises to pay to ___________________________, or its registered assigns (“Holder”), the sum of [___________________________], or such other amount as shall then equal the outstanding principal amount hereof and all accrued unpaid interest, as set forth below, on the earlier to occur of (i) the date that is 180 days from the Issue Date (“Maturity Date”), or (ii) when declared due and payable by the Holder upon the occurrence of an Event of Default (as defined below).  Payment for all amounts due hereunder shall be made by wire transfer of immediately available funds, in lawful tender of the United States, to an account designated in writing by the Holder.

 

The following is a statement of the rights of the Holder of this Note and the conditions to which this Note is subject, and to which the Holder hereof, by the acceptance of this Note, agrees:

 

1. Definitions.  As used in this Note, the following terms, unless the context otherwise requires, have the following meanings:

 

(i) “Company” includes any corporation that, to the extent permitted by this Note, shall succeed to or assume the obligations of the Company under this Note.

 

(ii) “Holder,” when the context refers to a holder of this Note, shall mean any person who shall at the time be the registered holder of this Note.

 

2. Interest.  Simple Interest on the unpaid principal balance of this Note shall accrue from the date hereof at the rate of ten percent (10%) per annum. All accrued unpaid interest shall be due and payable to the Holder on the Maturity Date.

 

  

  

  

 

3. Events of Default.  If any of the events specified in this Section 3 shall occur (herein individually referred to as an “Event of Default”), the Holder of the Note may, so long as such condition exists, declare the entire principal and unpaid accrued interest hereon immediately due and payable, by notice in writing to the Company:

 

(i) Any failure to pay the principal balance of or accrued interest on this Note when due hereunder.

 

(ii) The institution by the Company of proceedings to be adjudicated as bankrupt or insolvent, or the consent by it to institution of bankruptcy or insolvency proceedings against it or the filing by it of a petition or answer or consent seeking reorganization or release under the federal Bankruptcy Act, or any other applicable federal or state law, or the consent by it to the filing of any such petition or the appointment of a receiver, liquidator, assignee, trustee or other similar official of the Company, or of any substantial part of its property, or the making by it of an assignment for the benefit of creditors, or the taking of corporate action by the Company in furtherance of any such action; or

 

(iii) If, within sixty (60) days after the commencement of an action against the Company seeking any bankruptcy, insolvency, reorganization, liquidation, dissolution or similar relief under any present or future statute, law or regulation, such action shall not have been resolved in favor of the Company or all orders or proceedings thereunder affecting the operations or the business of the Company stayed, or if the stay of any such order or proceeding shall thereafter be set aside, or if, within sixty (60) days after the appointment without the consent or acquiescence of the Company of any trustee, receiver or liquidator of the Company or of all or any substantial part of the properties of the Company, such appointment shall not have been vacated; or

 

4. Prepayment. This Note may be prepaid at any time without penalty or premium with the express written consent of the Holder.

 

5. Conversion.

 

5.1 Voluntary Conversion.  The Holder of this Note has the right, at the Holder’s option, at any time prior to payment in full of the principal balance and all accrued interest of this Note, to convert this Note, in accordance with the provisions of Section 5.2 hereof, in whole or in part, into fully paid and nonassessable shares of common stock, par value $0.0001 per share of the Company (“Common Stock”). The number of shares of Common Stock into which this Note may be converted (“Conversion Shares”) pursuant to this Section 5.1 shall be equal to one (1) share of Common Stock for each $[2.00] of outstanding principal and accrued unpaid interest due under the Note on the date of conversion (the “Conversion Rate”).

 

5.2 Notice of Conversion.  Before the Holder shall be entitled to convert this Note into shares of Common Stock pursuant to Section 5.1, it shall surrender this Note at the office of the Company and shall give written notice by mail, postage prepaid, to the Company at its principal corporate office, of the election to convert the same pursuant to Section 5.1, and shall state therein the name or names in which the certificate or certificates for shares of Common Stock are to be issued. The Company shall, as soon as practicable thereafter, issue and deliver at such office to the Holder of this Note a certificate or certificates for the number of shares of Common Stock to which the Holder of this Note shall be entitled as aforesaid. Such conversion shall be deemed to have been made immediately prior to the close of business on the date of such surrender of this Note, and the person or persons entitled to receive the shares of Common Stock issuable upon such conversion shall be treated for all purposes as the record holder or holders of such shares of Common Stock as of such date.

 

  

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5.3 Mechanics and Effect of Conversion.  No fractional shares of Common Stock shall be issued upon conversion of this Note. In lieu of the Company issuing any fractional shares to the Holder, upon the conversion of this Note, the number of shares issued upon the conversion of this Note shall be rounded up to the nearest whole share.  At its expense, the Company shall, as soon as practicable after conversion, issue and deliver to the Holder at its principal office a certificate or certificates for the number of shares of Common Stock to which the Holder shall be entitled upon such conversion, together with any other securities and property to which the Holder is entitled upon such conversion under the terms of this Note.

 

6. Conversion Rate Adjustments.

 

6.1 Adjustments for Stock Splits and Subdivisions.  In the event the Company should at any time or from time to time after the date of issuance hereof fix a record date for the effectuation of a split or subdivision of the outstanding shares of Common Stock or the determination of holders of Common Stock entitled to receive a dividend or other distribution payable in additional shares of Common Stock or other securities or rights convertible into, or entitling the holder thereof to receive directly or indirectly, additional shares of Common Stock (hereinafter referred to as “Common Stock Equivalents”) without payment of any consideration by such holder for the additional shares of Common Stock or the Common Stock Equivalents (including the additional shares of Common Stock issuable upon conversion or exercise thereof), then, as of such record date (or the date of such dividend distribution, split or subdivision if no record date is fixed), the Conversion Rate of this Note shall be appropriately decreased so that the number of shares of Common Stock issuable upon conversion of this Note shall be increased in proportion to such increase of outstanding shares, unless such adjustment has already been made to the Conversion Rate.

 

6.2 Adjustments for Reverse Stock Splits.  If the number of shares of Common Stock outstanding at any time after the date hereof is decreased by a combination of the outstanding shares of Common Stock, then, following the record date of such combination, the Conversion Rate for this Note shall be appropriately increased so that the number of shares of Common Stock issuable on conversion hereof shall be decreased in proportion to such decrease in outstanding shares, unless such adjustment has already been made to the Conversion Rate.

6.3 Reservation of Stock Issuable Upon Conversion. The Company shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock solely for the purpose of effecting the conversion of this Note such number of its shares of Common Stock as shall from time to time be sufficient to effect the conversion of the Note; and if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of the entire outstanding principal amount and accrued interest of this Note, in addition to such other remedies as shall be available to the holder of this Note, the Company will use its best efforts to take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes.

 

  

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7. Assignment.  Subject to the restrictions on transfer described in Section 9 below, the rights and obligations of the Company and the Holder of this Note shall be binding upon and benefit the successors and assigns of the parties.

8. Waiver and Amendment.  Any provision of this Note may be amended, waived or modified upon the written consent of the Company and the Holder.

9. Transfer of This Note or Securities Issuable on Conversion Hereof.  With respect to any offer, sale or other disposition of this Note or securities into which such Note may be converted, the Holder will give written notice to the Company prior thereto, describing briefly the manner thereof, together with a written opinion of such Holder’s counsel, to the effect that such offer, sale or other distribution may be effected without registration or qualification (under any federal or state law then in effect). Promptly upon receiving such written notice and opinion, if so requested, the Company, as promptly as practicable, shall notify such Holder that such Holder may sell or otherwise dispose of this Note or such securities, all in accordance with the terms of the notice delivered to the Company.  Each Note thus transferred and each certificate representing the securities thus transferred shall bear a legend as to the applicable restrictions on transferability in order to ensure compliance with the Act, unless in the opinion of counsel for the Company such legend is not required. The Company may issue stop transfer instructions to its transfer agent in connection with such restrictions.

10. Notices.  Any notice, request or other communication required or permitted hereunder shall be in writing and shall be deemed to have been duly given if personally delivered or if faxed with confirmation of receipt by telephone or if mailed by registered or certified mail, postage prepaid, at the respective addresses of the parties set forth below. Any party hereto may by notice so given change its address for future notice hereunder. Notice shall conclusively be deemed to have been given when personally delivered, faxed, or when deposited in the mail in the manner set forth above and shall be deemed to have been received when delivered.

	
  

	
Holder:

	
_______________________

_______________________

_______________________

_______________________

 

	
  

	
Borrower:

	
Protea Biosciences Group, Inc.

955 Hartman Run Road

Morgantown, WV 26507

Attn: Stephen Turner

Fax:  304-292-7101

 

with a copy to (which shall not constitute notice):

Richardson & Patel LLP

750 Third Avenue, 9th Floor

New York, NY 10017

Attn: David N. Feldman

Fax: 917-677-8165

 

  

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11. No Stockholder Rights.  Nothing contained in this Note shall be construed as conferring upon the Holder or any other person the right to vote or to consent or to receive notice as a stockholder in respect of meetings of stockholders for the election of directors of the Company or any other matters or any rights whatsoever as a stockholder of the Company; and no dividends or interest shall be payable or accrued in respect of this Note or the interest represented hereby or the Conversion Shares obtainable hereunder until, and only to the extent that, this Note shall have been converted pursuant to Section 5.1.

 

12. Usury.  This Note is hereby expressly limited so that in no event whatsoever, whether by reason of acceleration of maturity of the loan evidenced hereby or otherwise, shall the amount paid or agreed to be paid to the Holder hereunder for the loan, use, forbearance or detention of money exceed that permissible under applicable law.  If at any time the performance of any provision of this Note or of any other agreement or instrument entered into in connection with this Note involves a payment exceeding the limit of the interest that may be validly charged for the loan, use, forbearance or detention of money under applicable law, then automatically and retroactively, ipso facto, the obligation to be performed shall be reduced to such limit, it being the specific intent of the Company and the Holder that all payments under this Note are to be credited first to interest as permitted by law, but not in excess of (i) the agreed rate of interest set forth herein or therein or (ii) that permitted by law, whichever is the lesser, and the balance toward the reduction of principal.  The provisions of this Section 12 shall never be superseded or waived and shall control every other provision of this Note and all other agreements and instruments between the Company and the Holder entered into in connection with this Note.

 

13. Governing Law.  This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, excluding that body of law relating to conflict of laws.

 

14. Heading; References.  All headings used herein are used for convenience only and shall not be used to construe or interpret this Note. Except where otherwise indicated, all references herein to Sections refer to Sections hereof.

 

15. Waiver.  The Company hereby waives demand, notice, presentment, protest and notice of dishonor.

 

[Signature Page to Convertible Promissory Note Follows]

 

  

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IN WITNESS WHEREOF, the Company has caused this Note to be issued this 20th day of December, 2011.

 

	 	
PROTEA BIOSCIENCES GROUP, INC.

	 
	 	

a Delaware corporation

	 
	 	 	 	 
	
 

	
By: 

	/s/ Stephen Turner	 
	 	Name:  	

Stephen Turner

	 
	 	Title: 	Chief Executive Officer	 

 

 

 

	Name of Holder:  	  	 	 	 	 
	 	 	 	 	 	 
	Address:   	
 

	 	 	 	 
	 	 	 	 	 	 
	 	 	 	 	 	 

 

  

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NOTICE OF CONVERSION

 

(To Be Signed Only Upon Conversion of Note)

 

TO PROTEA BIOSCIENCES GROUP, INC.

 

The undersigned, the holder of the foregoing Note, hereby surrenders such Note for conversion into shares of Common Stock of PROTEA BIOSCIENCES GROUP, INC. to the extent of $__________________ unpaid principal amount and accrued interest of such Note, and requests that the certificates for such shares be issued in the name of, and delivered to ____________________, whose address is _ ________________________________.

 

Dated: _____________________

 

 

 

 

	 	  	 	 	 	 
	 	 	 	 	

(Signature must conform in all respects to name of holder as specified on the face of the Note)

	 
	 	
 

	 	 	 	 
	 	 	 	 	 	 
	 	 	 	 	
(Address)

	 

 

  

7Exhibit 10.1

Agreement and Release

This Agreement and Release (this “Agreement”) is entered into as of the 27th day of December 2011 between IEC Electronics Corp. (the “Company,” which term as used in this Agreement shall include the corporate entity and its direct and indirect subsidiaries) and Susan E. Topel-Samek (“Ms. Topel-Samek”).

Whereas, Ms. Topel-Samek received a letter agreement (“Offer Letter”), dated May 19, 2010, from the Company to Ms. Topel-Samek and was elected by the Board as Vice President and Chief Financial Officer of the Company as of May 31, 2010;

Whereas, Ms. Topel-Samek has determined to pursue a different work-life balance and Ms. Topel-Samek and the Company and its Board of Directors of the Company (“Board”) have agreed to have Ms. Topel-Samek’s employment and service as Vice President and Chief Financial Officer of the Company end as of January 2, 2012 subject to the terms and conditions set forth in this Agreement;

Now, therefor, the Company and Ms. Topel-Samek agree as follows:

1.             Resignation of Ms. Topel-Samek.  Effective January 2, 2012 and subject to receipt of the Initial Payment as defined below, Ms. Topel-Samek resigns her position as an employee, as Vice President and as Chief Financial Officer of the Company and from all other directorships and offices she may hold at the Company including its subsidiaries.

 

2.             Consideration.  In consideration of execution by Ms. Topel-Samek of the release and waiver of claims set forth in this Agreement and the other covenants and agreements set forth in this Agreement:

 

(a)           The Company shall pay for the benefit of Ms. Topel-Samek the amount of $152,408.65, and all base salary accrued through her termination date of January 2, 2012, less such taxes and other amounts as are required by law or requested pursuant to this Agreement to be withheld, which amount shall be paid by wire transfer into Ms. Topel-Samek’s deposit account on the first business day after the Effective Date as set forth in Section 18 below (the “Initial Payment”). There shall be no condition to the Company’s obligation to deliver the Initial Payment to Ms. Topel-Samek other than the passage of the seven-day period without receipt of a Revocation Notice, as provided in Section 18 of this Agreement.  There shall be no deduction from or set-off against the Initial Payment other than as expressly provided, herein.  In the event the Company fails to make the Initial Payment required under this subparagraph, this Agreement, including releases of claims made hereunder, shall be of no force and effect and deemed void, ab initio.

 

  

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(b)           On each of the Company’s bi-weekly payroll dates during the six-month period following January 1, 2012 (the “Payment Period”), the Company will pay to Ms. Topel-Samek $7,067.31 less such taxes and other amounts as are required by law, or requested pursuant to this Agreement, to be withheld (the “Weekly Payments”).  Each of the Weekly Payments shall be directly deposited in the account of Ms. Topel-Samek to which her pay from the Company was deposited prior to the date of this Agreement or to such other account as is specified by notice from Ms. Topel-Samek to the Company. In the event that, during the Payment Period, Ms. Topel-Samek receives compensation for her professional services in excess of an aggregate of $10,000, Ms. Topel-Samek will promptly notify the Chair of the Compensation Committee of the Board of the amount of such excess. Thereafter, Weekly Payments shall be reduced on a dollar-for-dollar basis to the extent that Ms. Topel-Samek has received such excess compensation from employment prior to June 30, 2012. There shall be no deduction from or set-off against the Weekly Payments other than as expressly provided herein.

 

(c)           The Company will provide Ms. Topel-Samek coverage under the Company’s dental and vision benefit plans on the same terms she enjoyed as an employee and officer of the Company, including payment by the Company of the same portion of the premiums through June 30, 2012 as it had paid when Ms. Topel-Samek was an officer of the Company.  The employee portion of the premiums for such insurance plans which Ms. Topel-Samek paid as an officer of the Company, will be deducted by the Company from the Weekly Payments. After June 30, 2012, Ms. Topel-Samek may elect to continue coverage under such plans under the terms and conditions of the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”).  In the event that prior to June 30, 2012, Ms. Topel-Samek has available to her from a new employer dental and vision insurance, Ms. Topel-Samek shall give prompt notice of such alternate coverage availability and will obtain such coverage at the earliest opportunity, and the coverage under the Company’s plans and the deduction of Ms. Topel-Samek’s portion of the premiums from Weekly Payments shall cease upon the effectiveness of the alternate coverage.

 

(d)           Regardless of whether or not Ms. Topel-Samek chooses to exercise her right of revocation prior to the Effective Date as described in Section 19 of this Agreement, Ms. Topel-Samek is entitled to receive: (i) all base salary accrued through January 2, 2012, (ii)  payment for all incurred and unreimbursed business expenses in accordance with customary Company policies, and (iii) all vested amounts in the Company’s 401(k) savings plan as a roll-over to another tax-deferred account specified by Ms. Topel-Samek or otherwise permitted under the Company’s plan; less in the cases of clause (i)  such taxes and other amounts as are required under applicable law to be withheld.  In the event that Ms. Topel-Samek chooses to exercise her right of revocation prior to the Effective Date, she is entitled to receive an amount equal to accrued but unused vacation days through such date, with no deduction for any time after December 18, 2011 that Ms. Topel-Samek was absent from the Company’s offices or not working during normal working hours. The Company will not oppose or interfere with any claim by Ms. Topel-Samek for unemployment benefits.  Ms. Topel-Samek will also continue to be entitled to all rights of contribution, advancement of expenses, defense and indemnification as Ms. Topel-Samek has under the Company’s certificate of incorporation, by-laws, the Indemnity Agreement, dated as of June 1, 2010, between the Company and Ms. Topel-Samek, and as permitted or provided under applicable law. For not fewer than six years following the Effective Date, the Company will maintain directors’ and officers’ liability insurance on terms deemed prudent by the Board of Directors of the Company, and upon Ms. Topel-Samek’s request, the Company shall promptly provide to Ms. Topel-Samek a copy of such policy of insurance at each renewal or change thereto.

 

  

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(e)           Ms. Topel-Samek shall have no contractual duty under this Agreement to mitigate the amount of any payment contemplated by this Agreement, whether by seeking new employment or otherwise, provided, however, in the event Ms. Topel-Samek obtains new employment prior to June 30, 2012, certain payments under this Agreement will be reduced as expressly provided above in this Section 2.  Nothing set forth in this clause (e) will be deemed contrary to any representations which may be required by law with respect to claims for unemployment benefits.

 

3.             Company Property.  On or before January 2, 2012, Ms. Topel-Samek agrees to return to director of human resources for the Company, all electronic passes, credit card, pdas and other Company property in the possession of Ms. Topel-Samek.

 

4.             Release and Waiver of All Claims.

 

(a)           Ms. Topel-Samek, for herself and her agents, representatives, heirs, beneficiaries and assigns, to the greatest extent permitted by law, knowingly and voluntarily releases and forever discharges the Company and its directors, officers, agents and representatives, from any and all claims, demands, rights, actions or causes of action, liabilities, damages, costs, expenses, losses, obligations, indemnities, judgments, suits, matters and issues of any kind or nature whatsoever, including both known and unknown claims, contingent or absolute, suspected or unsuspected, disclosed or undisclosed, matured or unmatured, of any nature whatsoever, whether individual, class, direct, derivative, representative or otherwise, that have been, could have been or in the future could be asserted against the Company at any time prior to the date of the execution of this Agreement, including, but not limited to a release of any rights or claims she may have under:

 

	
  

	
i.

	
the Americans with Disabilities Act ("ADA"), which prohibits discrimination on the basis of disability;

 

	
  

	
ii.

	
the Age Discrimination in Employment Act ("ADEA"), which prohibits age discrimination in employment;

 

	
  

	
iii.

	
the Older Worker's Benefit Protection Act;

 

	
  

	
iv.

	
Title VII of the Civil Rights Act of 1964, as amended, which prohibits retaliation and discrimination in employment based on race, color, national origin, religion or sex;

 

	
  

	
v.

	
the Family and Medical Leave Act;

 

  

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vi.

	
the Employee Retirement Income Security Act of 1974 ("ERISA"), as amended;

 

	
  

	
vii.

	
the New York Human Rights Law ("NYHRL");

 

	
  

	
viii.

	
the New York Executive Law;

 

	
  

	
ix.

	
the New York Labor Law;

 

	
  

	
x.

	
any other federal, state or local law or regulation prohibiting employment discrimination;

 

	
  

	
xi.

	
claims for wrongful discharge, whether based on claimed violations of statute or based on claims in contract or tort, common law or equity;

 

	
  

	
xii.

	
claims for failure to pay wages due or other moneys owed (including claims for unpaid vacation pay);

 

	
  

	
xiii.

	
claims of fraud, misrepresentation, defamation, interference with prospective economic advantage;

 

	
  

	
xiv.

	
claims of intentional or negligent infliction of emotional distress; and

 

	
  

	
xv.

	
claimed violations of any other federal, state, civil or human rights law, or any other alleged violation of any local, state or federal law, regulation or ordinance, and/or public policy, contract, or tort, or common law having any bearing whatsoever on the terms and conditions and/or cessation of employment with the Company, including but not limited to, any allegations for costs, fees or other expenses, including attorneys' fees, incurred in these matters which she ever had, now has, or may have as of the date of this release other than the right to enforce this Agreement, including the rights of indemnification and contribution, advancement of expenses and similar matters as set forth in Section 2(d) and otherwise provided in this Agreement.

 

Except as provided below, Ms. Topel-Samek, for herself and her agents, representatives, heirs, beneficiaries and assigns, promises never to file a suit, charge, complaint, demand, action, or otherwise assert any claims against the Company arising from her employment with the Company or separation therefrom, including, but not limited to, the claims referenced above in Section 2 of this Agreement, and Ms. Topel-Samek represents that no such claim or demand presently is pending, and that if any action does exist or is hereafter brought, that she expressly waives any claim to any form of relief or recovery and agrees to reimburse the Company for all payments provided hereunder, as well as the reasonable costs and attorneys’ fees incurred in defending such action.

 

  

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Ms. Topel-Samek understands that nothing in this Agreement shall be construed to prohibit her from participating in any investigation or proceedings of any federal or state agency including the Equal Employment Opportunity Commission ("EEOC") and/or from communicating with EEOC, but only to the extent such right is protected under the law, provided, however, to the extent any such proceeding has been or is brought, Ms. Topel-Samek expressly waives any claim to any form of monetary or other damages or any other form of recovery or relief in connection with any such action, or in connection with any action brought by a third party.

 

If Ms. Topel-Samek elects to challenge the age claim release in this Agreement as being inconsistent with the Older Workers Benefit Protection Act ("OWBPA"), she does not first have to return any of the payments received under this Agreement.

 

The foregoing waiver does not include any claim for enforcement of this Agreement or any rights to contribution, indemnification, advancement of expenses as provided by the Company’s certificate of incorporation, by-laws, the Indemnity Agreement or as permitted or provided under applicable law.

 

(b)           The Company, for itself and its direct and indirect subsidiaries, directors, executive officers, successors and assigns, to the greatest extent permitted by law, hereby releases Ms. Topel-Samek, from any and all claims, demands, rights, actions or causes of action, liabilities, damages, costs, expenses, losses, obligations, indemnities, judgments, suits, matters and issues of any kind or nature whatsoever, including both known and unknown claims, contingent or absolute, suspected or unsuspected, disclosed or undisclosed, matured or unmatured, of any nature whatsoever, whether individual, class, direct, derivative, representative or otherwise, that have been, could have been or in the future could be asserted by the Company against Ms. Topel-Samek, her heirs, personal representatives or assigns, from the beginning of time to the Effective Date of this Agreement, provided that such release does not include any claim for enforcement of this Agreement.  The Company, for itself and its direct and indirect subsidiaries, directors, executive officers, successors and assigns, promises never to file a suit, charge, complaint, demand, action, or otherwise assert any claims against Ms. Topel-Samek which would be protected under the release contained in this subparagraph, and the Company represents that no such claim or demand presently is pending, and that if any action does exist or is hereafter brought, the Company expressly waives any claim to any form of relief or recovery and agrees to reimburse Ms. Topel-Samek for the reasonable costs and attorney’s fees incurred in defending such action.

 

5.            Nondisparagement.  Ms. Topel-Samek agrees that she will not make or cause to be made any statement to any person or entity, whether oral or written, that denigrates or disparages the Company or any of its officers or directors. The Company agrees that none of its executive officers, directors, or the chief business and finance officers of its subsidiaries will make or authorize any statement to any person or entity, whether oral or written, that denigrates or disparages Ms. Topel-Samek.  Nothing contained in this Agreement shall prevent Ms. Topel-Samek, the Company, or the Company’s executive officers or directors from making factual statements in response to a subpoena or as otherwise required by applicable law or other compulsory process.

 

  

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6.            Termination of Offer Letter and Unvested Grants.  This Agreement supersedes and terminates the Offer Letter. Unvested stock options granted to Ms. Topel-Samek will by their terms be forfeited as of the Effective Date and Ms. Topel-Samek shall have no rights to or with respect to any equity awards from the Company except for restricted stock fully vested prior to the date of this Agreement.

 

7.            Cooperation.  Prior to and after the Termination Date through June 30, 2012, except during periods of vacation and subject to personal and professional obligations, including to any new employer to whom Ms. Topel-Samek provides services, Ms. Topel-Samek will reasonably cooperate with the Company, acting through its Board and/or chief financial officer, to provide information relating to matters concerning which Ms. Topel-Samek was involved during her employment.  The Company will reimburse Ms. Topel-Samek for all out-of-pocket expenses approved in advance and incurred by Ms. Topel-Samek in providing such cooperation promptly upon receiving appropriate documentation conforming to the Company’s existing documentation requirements.  If Ms. Topel-Samek reasonably believes that she should obtain legal advice in connection with a requested matter of cooperation under this paragraph, she will so notify the Company representative who made the request and advise him/her as to the nature of the concern and the amount of fees she will incur to obtain the advice.  Unless Ms. Topel-Samek is advised by the Company that she will be reimbursed for such fees, she will have no obligation to provide the requested cooperation.

 

8.            No Admission.  The parties agrees that neither the resignation of Ms. Topel-Samek or the existence of this Agreement shall be deemed or construed at any time for any purposes as an admission by either party of any failure to performs a party’s duties or of any liability or unlawful conduct of any kind.

 

9.            Representations.  Each party represents and warrants that this Agreement has been duly authorized, executed and delivered by such party, and is a valid and binding obligation of such party, enforceable in accordance with its terms. Each of the Company and Ms. Topel-Samek represent that they have been represented by counsel in connection with this Agreement, and that this Agreement is the joint drafting product of both parties and should not be construed against either party as drafter.

 

10.           Dispute Resolution; Costs.  The parties agree that any dispute arising out of the terms of each of this Agreement, including, without limitation, its interpretation, and any of the matters covered hereby, shall first be subject to resolution by settlement discussions between the Chair of the Compensation Committee of the Board and Ms. Topel-Samek. If such dispute cannot be resolved within 10 days after written notice of its existence is given by Ms. Topel-Samek, or by an officer of the Company upon express direction of the Board, either party may pursue its rights under law or in equity.

 

  

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11.          Notices.  Any notice under this Agreement shall be given in writing delivered in person, by certified or registered letter with return receipt requested, or by nationally recognized overnight delivery service; and shall be deemed given when received by personal delivery and certified or registered letter or on the next business day when sent first business day overnight delivery, as set forth below or to such other person and/or address as may be directed by a party on notice given as provided herein:

 

If to the Company:

 

IEC Electronics Corp.

105 Norton Street

Newark, NY 14513

Attn. Chair of Compensation Committee

with a copy to:

Harris Beach PLLC

99 Garnsey Road

Pittsford, NY 14534

Attn. Beth Ela Wilkens

If to Ms. Topel-Samek:

86 Foxbourne Road

Penfield, NY 14526

with a copy to:

Nixon Peabody LLP

1300 Clinton Square

Rochester, NY 14604

Attn. Deborah J. McLean

 

12.          Severability.  The provisions of this Agreement shall be deemed severable and the invalidity or unenforceability of any provision shall not affect the validity or enforceability of the other provisions hereof.  If any provision of this Agreement, or the application thereof to any person or any circumstance, is invalid or unenforceable: (a) a suitable and equitable provision shall be substituted therefor in order to carry out, so far as may be valid and enforceable, the intent and purpose of such invalid or unenforceable provision and (b) the remainder of this Agreement and the application of such provision to other persons, entities or circumstances shall not be affected by such invalidity or unenforceability.

 

13.          Modifications.  No modification, amendment or waiver of any of the provisions contained in this Agreement, or any future representation, promise or condition in connection with the subject matter of this Agreement, shall be binding upon any party hereto unless made in writing and signed by Ms. Topel-Samek or approved by the Board and signed by a duly authorized officer of the Company.

 

  

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14.          Entire Agreement.  This Agreement, including the exhibits hereto, and the Indemnity Agreement (and the provisions of the Company’s certificate of incorporation, by-laws and applicable law) and the Non-Disclosure Agreement constitute the entire understanding among the parties hereto with respect to the subject matter contained herein and supersede any prior understandings and agreements among them respecting such subject matter.  The payment obligations set forth in this Agreement are in lieu of any and all other payment obligations of the Company to Ms. Topel-Samek, whether contractual, under Company policy, or otherwise, other than those payments to which Ms. Topel-Samek may be entitled under the Indemnity Agreement or under the Company’s Certificate of Incorporation and by-laws.  This Agreement may be amended, supplemented, and terminated only by a written instrument duly executed by the Company and Ms. Topel-Samek.

 

15.          Successors; Survival.  This Agreement shall inure to the benefit of and be enforceable by, and shall be binding upon, the Company and its successors and assigns, whether direct or indirect and whether by purchase, merger, acquisition of all or substantially all of the business or assets for the Company, and for all purposes under this Agreement, the term “Company” shall include its direct and indirect subsidiaries and such successors or assigns. This Agreement shall be binding upon, and shall inure to the benefit of and be enforceable by, Ms. Topel-Samek’s heirs, distributes, executors, administrators, and personal or legal representatives.  All covenants, agreements, representations and warranties made by the Company and Ms. Topel-Samek herein shall be considered to have been relied upon by the other party hereto in making this Agreement and shall survive the execution and delivery of this Agreement and the payment of the Initial Payment and the Weekly Payments until the expiration of any applicable statute of limitations.

 

16.         Jurisdiction.  The parties agree that this Agreement shall be governed and interpreted by the laws of the State of New York, without regard to conflict of laws doctrines.  The parties irrevocably consent to jurisdiction and venue of any action or proceeding brought to enforce any rights, duties or obligations under this Agreement in the Supreme Court of the State of New York for the County of Monroe or in the United States District Court for the Western District in Rochester, New York.

 

17.          Counterparts.  This Agreement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single agreement.

 

18.          Consultation and Revocation Periods.  Ms. Topel-Samek acknowledges that she has been advised to seek the advice of legal counsel in connection with her consideration of this Agreement and the release of claims contained herein.  She further acknowledges that, in light of the releases and waivers set forth in Section 4 of this Agreement, she has twenty-one (21) days to consider this Agreement and that she may use as much of such period as she chooses or waive any part of such twenty-one (21) day period.  Ms. Topel-Samek, by her signature to this Agreement prior to the expiration of such period, after consultation with counsel of her choosing concerning the terms of this Agreement, waives the balance of such twenty-one (21) day period.  Once Ms. Topel-Samek signs this Agreement and delivers it to the Company, this Agreement will become effective, enforceable and irrevocable upon the expiration of seven (7) calendar days following the date of Ms. Topel-Samek’s signature (the “Effective Date”).  If Ms. Topel-Samek determines to revoke this Agreement, she will deliver a written notice of revocation (“Revocation Notice”) to the Company as provided in Section 12, within seven (7) calendar days after she signs the Agreement; provided that in the case of such revocation notice, it must be actually received by the Company prior to the close of business at the end of the seven (7) day revocation period.

 

  

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[Signature page follows]

 

IN WITNESS WHEREOF, the parties, intending to be legally bound, hereto have executed this Agreement on the dates set forth below.

 

	
IEC ELECTRONICS CORP.

	  
	  	  	  
	
By:

	
/s/ W. B. Gilbert

	  
	  	
W.B. Gilbert

	  
	  	
Chairman and Chief Executive Officer

	  

 

	
/s/ Susan E. Topel-Samek

	  
	
Susan E. Topel-Samek

	  

 

  

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