Document:

Employment Agreement

 Exhibit 10.2 
 EMPLOYMENT AGREEMENT 
 This EMPLOYMENT AGREEMENT, made and entered into as of this 7th day of September 2007, by and between Inverted
Paradigms Corporation., a Delaware corporation (the “CORPORATION”), and , Steven Weldon (the “EXECUTIVE”). 
 WITNESSETH THAT: 
 WHEREAS, the Corporation desires to employ the Executive in the capacity hereinafter stated, and the
Executive desires to enter into the employ of the Corporation in such capacity for the period and on the terms and conditions set forth herein; 
 NOW,
THEREFORE, in consideration of the mutual covenants and agreements set forth below, it is hereby covenanted and agreed by the Corporation and the Executive as follows: 
  

	 	a.	Employment Period. The Corporation hereby agrees to employ the Executive as its Chief Financial Officer, in such capacity, agrees to provide services to the Corporation
for the period beginning on September 7, 2007 and ending September 7, 2008 (the “TERMINATION DATE”) (or such later date as may be agreed to by the parties within 120 days prior to the Termination Date) (the
“EMPLOYMENT PERIOD”). 

  

	 	b.	Performance of Duties. The Executive agrees that during the Employment Period, while he is employed by the Corporation, to serving in the capacity of Chief Financial Officer
of the Corporation in the best interests of the Corporation, and to perform duties assigned to his by the Board of Directors faithfully, efficiently and in a professional manner. Without the Board’s consent (which consent shall not be
unreasonably withheld), the Executive shall not serve as or be a consultant to or employee, officer, agent, or director of any corporation, partnership or other entity that is a competitor of the Corporation. 

 Specifically, as Chief Financial Officer, you will be responsible for financial reporting and taxes, treasury and accounting operations, financial
analysis, internal control and in-house legal administration. Your responsibility will be to manage and work with the Board of Directors, and as such, policy and direction from the board will flow through you to the company. 
  

	 	c.	Compensation. Subject to the terms and conditions of this Agreement, during the Employment Period, the Executive shall be compensated by the Corporation for his services
as follows: 

  

	 	(i)	Commencing on the effective date of the Agreement, the Executive shall receive a base salary of not less than $78,000 during the term of this Agreement, with such base salary
payable in installments consistent with the Company’s normal payroll schedule, subject to applicable withholding and other taxes. 

  

	 	    	The Executive will participate in the executive benefit package offered to other executives in the Company during the term of his employment. 

	 	d.	Restricted Stock Grant: The Company shall grant to the executive 465,000 shares of the common stock of the company that is currently traded on the Pink Sheets stock symbol
IVPC. The stock is restricted stock as defined by the Securities Act of 1934, as amended and are to be issued upon the restructuring of the Company as follows: 

  

					
	First Year:	 	310,000	  	
	Second Year:	 	155,000	  	

 The Executive agrees to not sell or enter to any contract to pledges his shares in any agreement
prior to those shares being fully vested. The Executive also agrees to any share/interest “lock-up provision”, which may be implemented by the Board of Directors or any governmental regulatory body on the shareholders of the company. In
addition, the Executive shall be responsible to make all filings with regulatory bodies upon the sale of his holdings. 
  

	 	e.	Expense Reimbursement: During the term of the Executive’s employment hereunder, the Company, upon the submission of reasonable supporting documentation by the Executive,
shall reimburse the Executive for all reasonable expenses actually paid or incurred by the Executive in the course of and pursuant to the business of the Company, including expenses for travel. 

  

	 	f.	Incentive, Saving and Retirement Plans: During the term of this Agreement, the executive shall be entitled to participate in all incentive, saving and retirement plans
applicable to any key executives of the Company and its subsidiaries. 

  

	 	g.	Welfare Benefit Programs: During the term of this Agreement, the Executive and the Executive’s family shall be eligible for participation in all medical, prescription,
dental, disability, salary continuance, employee life, group life, accidental death offered by the Company to any key executives of the Company and its subsidiaries. 

  

	 	h.	Working Facilities: During the term of this Agreement, the Company shall furnish the Executive with an office and a secretary and such other facilities and services adequate
to perform his duties hereunder. 

  

	 	i.	Vacation: During the term of this Agreement, the Executive shall be entitled to paid vacation of no less than three weeks per year. 

  

	 	j.	Compensation Due Upon Termination. The Executive’s right to compensation for periods after the date his employment with the Corporation terminates shall be determined in
the accordance with the following: 

  

	 	k.	Discharge Without Cause. If the Corporation terminates the Executive’s employment under this Agreement without “cause” (as defined Below), the Executive shall
be entitled to receive one month base salary. Should the Executive be terminated under this provision (without cause) the employee will also be entitled to any potential bonus based on paragraph (3) (b) above on a Pro-Rata Basis, e.g. 10
months of employment would equal 10/12 of a year or approximately 83.3% of the bonus the Executive could have earned if employed for the entire year. 

  

	 	l.	Voluntary Resignation. The Corporation shall have no obligation to make payments to the Executive in accordance with the provisions of paragraph 3 for periods after the date
on which the Executive’s employment with the Corporation terminates due to the Executive’s voluntary resignation. 

	 	m.	Discharge for Cause. The Corporation shall have no obligation to make payments to the Executive in accordance with the provisions of paragraph 3 for periods after the
Executive’s employment with the Corporation is terminated on account of the Executive’s discharge for cause. The Executive shall be considered discharged for “cause” if he is discharged by the Corporation on account of the
occurrence of one or more of the following events: 

  

	 	(i)	the Executive becomes habitually addicted to drugs or alcohol; 

  

	 	(ii)	the Executive discloses confidential information in violation of paragraph 5; 

  

	 	(iii)	the Executive engages in competition in violation of paragraph 5; 

  

	 	(iv)	the Corporation is directed by regulatory or governmental authorities to terminate the employment of the Executive or the Executive engages in activities that cause actions to be
taken by regulatory or governmental authorities that have a material or adverse effect on the Corporation; 

  

	 	(v)	the Executive is indicted for a felony (other than a felony resulting from a traffic violation); 

  

	 	(vi)	the Executive disregards his duties under this Agreement 

  

	 	(vii)	any event of misconduct involving serious moral turpitude to the extent that, in the reasonable judgment of the Board of Directors, the Executive’s credibility and reputation
no longer conform to the standard of the Corporation’s executives; or 

  

	 	(viii)	the Executive commits an act of fraud against the Corporation or violates a duty of loyalty to the Corporation. 

  

	 	n.	Disability. The Corporation shall have no obligation to make payments to the Executive in accordance with the provisions in paragraph 3 for periods after the date the
Executive’s employment with the Corporation terminates on account of 50% or greater disability. For purposes of this subparagraph 4(d), determination of whether the Executive is 50% disabled shall be determined in accordance with applicable
law. 

  

	 	o.	Death. The Corporation shall have no obligation to make payments to the Executive in accordance with the provisions of paragraph 3 for periods after the date of the
Executive’s death. 

  

	 	p.	 Confidential Information and Competition. Executive hereby acknowledges that he/he will or may be making use of, acquiring and adding to confidential
information of a special and unique nature and value affecting and relating to the Company and its operations, including, but not limited to, the Company’s Business, the identity of the Company’s customers and suppliers, the names,
addresses and phone numbers of representatives and Executives, mailing lists, computer runoffs, financial information, prices paid by the Company for inventory, selling prices of the Company’s products, its business practices, marketing
strategies, expansion plans, the Company’s contracts, business records and other records, the Company’s trade secrets, formulas, inventions, techniques used in the Company’s Business, know-how and technologies, whether or not
patentable, and other similar information relating to 

	 	 
the Company and the Company’s Business (all the foregoing regardless of whether same was known to Executive prior to the date hereof or is or becomes
known to third parties is hereinafter referred to collectively as “Confidential Information”), all of which provides Company with a competitive advantage and none of which is readily available except to authorized representatives, agents
and Executives of Company. The Executive further recognizes and acknowledges that all Confidential Information is the exclusive property of the Company, is material and confidential, and greatly affects the goodwill and effective and successful
conduct of the Company’s Business. Accordingly, Executive hereby covenants and agrees that he/he will use the Confidential Information only for the benefit of the Company and shall not at any time, directly or indirectly, during the term of
this Agreement or afterward, divulge, reveal or communicate any Confidential Information to any person, firm, corporation or entity whatsoever, or use any Confidential Information for his/his own benefit or for the benefit of others, including
without limitation the solicitation of any Executives, agents, representatives, consultants or suppliers of the Company or its successors and assigns. Confidential Information shall not include information that is, or becomes, generally available to
the public through no violation of this Agreement by Executive, or which is generally known within the industry. 

 For
purposes of this Agreement, the Executive agrees that the fact the Executive had prior knowledge of a particular item of information encompassed within the Confidential Information, whether the same is or becomes generally known to the public, shall
not permit the disclosure or use thereof, except as permitted in this Agreement. 
  

	 	a.	Executive recognizes and acknowledges that the Company’s Business is built upon the confidence of the customers and that all goodwill arising out of the Executive’s
acquaintances with customers shall be the sole and exclusive property of the Company. 

  

	 	b.	Executive hereby acknowledges and agrees that the Company would suffer irreparable injury if Executive solicits representatives, contractors, Executives, suppliers or consultants of
the Company, diverts business from the Company, or solicits or accepts business from clients, customers, or vendors of the Company. As a material inducement to the Company to enter into this Agreement, and employ or continue to employ Executive,
Executive hereby covenants and agrees that, unless the Company and its successors and assigns shall cease to engage in the Company’s Business, during the period beginning on the date hereof and continuing until Twelve (12) months following
the date of the termination of this Agreement, for any reason whatsoever, he/he shall not: 

  

	 	(i)	directly or indirectly, operate, organize, maintain, establish, manage, own, participate in, or in any manner whatsoever, individually or through any corporation, firm or
organization of which he/he shall be affiliated in any manner whatsoever, have any interest in, whether as owner, operator, partner, stockholder, director, trustee, officer, lender, representative, Executive, principal, agent, consultant or
otherwise, any other business or venture anywhere, that is in direct competition with the Company or the Company’s Business, unless such activity shall have been previously agreed to in writing by the Company or its successors and assigns;

	 	(ii)	directly or indirectly, divert business from the Company or its successors or assigns, or solicit business from, accept business from, divert the business of, or attempt to convert
to other methods of using the same or similar services as are provided by the Company, any client, customer, vender or account of the Company; or 

  

	 	(iii)	directly or indirectly, solicit for employment, employ or otherwise engage the services of, any representatives, contractors, Executives, distributors or consultants of the Company
or its successors or assigns. 

  

	 	c.	In view of the irreparable harm and damage that would result to the Company as a result of a breach by the Executive of the covenants in this paragraph 5, and in view of the lack of
an adequate remedy at law to compensate the Company for such harm and damage in the event of a breach or threatened breach by the 

 Executive of those covenants, the Company shall have the right to receive, and the Executive hereby consents to the issuance of, temporary and permanent injunctions enjoining the Executive from any violation of said covenants. In the event
that a bond or other undertaking is required of the Company in connection with the issuance of a temporary injunction, the Executive agrees that such bond or undertaking shall not exceed One Thousand Dollars ($1,000.00), which sum is hereby agreed
to be sufficient to compensate the Executive for all damages that may result from the wrongful issuance of such temporary injunctive relief. 
  

	 	d.	The provisions of this paragraph 5 shall be enforceable in law and in equity notwithstanding the existence of any claim or cause of action by the Executive against the Company
whether predicated on this Agreement or otherwise. 

  

	 	e.	The Executive has carefully read and considered the provisions of this paragraph 5 and, having done so, agrees that the restrictions set forth in such Section are fair and
reasonable and are reasonably required for the protection of the legitimate business interests of the Company. In the event that a court of competent jurisdiction shall determine that any of the foregoing restrictions are unenforceable, the
parties hereto agree that it is their desire that such court substitute an enforceable restriction in place of any restriction deemed unenforceable, and that the substituted restriction be deemed incorporated herein and enforceable against the
Executive. It is the intent of the parties hereto that the court, in determining any such enforceable substituted restriction, recognize that it is their intent that the foregoing restrictions be imposed and maintained to the greatest extent
possible. The foregoing shall not be interpreted to limit any party’s rights to appeal. 

  

	 	f.	The obligations of the Executive under this paragraph 5 shall survive the expiration or termination of this Agreement for any reason. 

  

	 	g.	The Company’s failure or refusal to enforce any of the terms contained in this Agreement against any other Executive or former Executive, for any reason, shall not constitute a
defense to the enforcement of this Agreement against Executive. 

  

	 	e.	Successors. This Agreement shall be binding on, and inure to the benefit of, the Corporation and its successors and assigns and any person acquiring all or substantially all
of the Corporation’s assets and business, whether by merger, consolidation, purchase of assets or otherwise. 

	 	f.	Nonalienation. The interests of the Executive under this Agreement are not subject to the claims of his creditors, other than the Corporation, and may not otherwise be
voluntarily or involuntarily assigned, alienated or encumbered except to the Executive’s estate, heirs, devisees, or trust beneficiaries upon his death. 

  

	 	g.	Waiver of Breach. The waiver by either the Corporation or the Executive of a breach of any provision of this Agreement shall not operate as or be deemed a waiver of any
subsequent breach by either the Corporation or the Executive. 

  

	 	h.	Notice. Any notice to be given hereunder by a party hereto shall be in writing and shall be deemed to have been given when received or, when deposited in the U.S. mail,
certified or registered mail, postage prepaid: 

  

	 	i.	Amendment. This Agreement may be amended or cancelled by mutual agreement of the parties in writing without the consent of any other person and no person, other than the
parties thereto (and the Executive’s estate or beneficiaries upon his death), shall have any rights under or interest in this Agreement or the subject matter hereof. 

  

	 	j.	Applicable Law. The provisions of this Agreement shall be construed in accordance with the internal laws of the State of Florida. 

  

	 	k.	Termination. All of the provisions of this Agreement shall terminate after the expiration of the Employment Period, except that paragraph 5 shall only terminate upon the
expiration of the Non-competition Period and paragraph 6 shall terminate upon the expiration of the Non-competition Period. 

  

	 	l.	Arbitration. Should any dispute arise pursuant to this Agreement it shall be resolved by arbitration. This Agreement shall be interpreted under the laws of Delaware. Venue
for any proceedings shall be Sarasota, Florida. There shall be three arbitrators. Each of the parties shall select one Arbitrator and the two Arbitrators shall select a third arbitrator and a majority decision of the arbitrators shall be necessary
for resolution. Arbitrators shall be professionally experienced in the nature of the subject of the dispute and shall arbitrate in accordance with the laws of Delaware. The results of any such arbitration shall be binding on all Parties and their
affiliates or agents. 

 IN WITNESS WHEREOF, the Executive and the Corporation have executed his Employment Agreement as of
the day and year first above written. 
  

					
	 /s/ Chuck Wernicke
	  		  	
	Chuck Wernicke, Chief Technology Officer and Director	  		  	
			
	 /s/ Bill Parson
	  		  	
	Bill Parson, Director	  		  	
			
	 /s/ Dwight Day
	  		  	
	Dwight Day, Director	  		  	
			
	 /s/ Steven Weldon
	  		  	
	Steven WeldonStandstill Agreement dated as of September 12, 2007

 Exhibit 10.1 
 EXECUTION COPY 
 STANDSTILL AGREEMENT 
 AGREEMENT made as of this 12th day of September, 2007, by and between Hillside Capital
Incorporated (“Hillside”), a Delaware corporation, and Ampex Corporation, a Delaware corporation, and the Ampex Group1 (Ampex Corporation
and the Ampex Group, collectively, “Ampex,” and, together with Hillside, the “Parties”). 
 WHEREAS,
Ampex (i) requested on July 5, 2007 that Hillside fund the July 13, 2007 Required Contribution, which Required Contribution Hillside paid on July 13, 2007, and (ii) announced that it does not intend to make the Required
Contributions due on September 14, 2007 or October 15, 2007; 
 WHEREAS, on July 13, 2007, Hillside officially notified Ampex
by letter that Ampex was in default in the performance of its obligations pursuant to the Agreement (the “Default Notice”) and further notified Ampex that if it failed to cure its alleged breach of this obligation within ten days of
delivery of the Default Notice, Hillside would thereafter be entitled to declare an event of default with respect to the Notes pursuant to section 3.4(c) of the Agreement (“Event of Default”): 
 WHEREAS, Ampex disputes that an Event of Default has occurred; 
 WHEREAS, Hillside is prepared to exercise its remedies pursuant to the Agreement, including but not limited to accelerating the Notes, and is prepared to commence litigation against Ampex immediately for breach of the
Agreement and other causes of action; and 
 WHEREAS, the Parties desire to maintain the status quo for a limited time to permit the Parties
to document and complete the restructuring and equity offering as agreed to in principle by the Parties and reflected in the final term sheet (the “Term Sheet”), a copy of which is attached hereto as Exhibit A. 
 NOW, THEREFORE, the Parties hereby agree that: 
  

	 	1.	This Agreement shall be in force and effect from the date of execution through November 15, 2007, unless terminated by the Parties as provided herein (as may be modified as
provided herein or on written agreement of the Parties, the “Standstill Period”). 

  

	 	2.	During the Standstill Period, the Parties shall negotiate in good faith to document the restructuring of the Notes, clarify the obligations of the Parties under the Agreement, and
complete an equity offering consistent with the Term Sheet and agreed to by the Ampex Board of Directors. 

	 1
	 Capitalized terms used herein but not otherwise defined are shall have the
meanings ascribed to such terms in the certain agreement among Hillside and Ampex, among others, dated December 1, 1994 (the “Hillside-Ampex Agreement”). 

	 	3.	As long as the Standstill Period has not been terminated, Hillside will make the Required Contributions due during the Standstill Period, including the payments on
September 14, 2007 and October 15, 2007. 

  

	 	4.	Ampex will make the required interest and principal payment due on the Notes on September 15, 2007. All subsequent interest and principal payments that become due on the Notes
during the Standstill Period shall be deferred during the Standstill Period. For the avoidance of doubt, all interest and principal payments deferred during the Standstill Period will be payable in cash at the earlier of the execution of the
definitive agreements or expiration of the Standstill Period. 

  

	 	5.	Hillside will not declare an Event of Default for Ampex’s failure to cure the July 13, 2007 Default Notice and will not provide notices of event of default for failure by
Ampex to make the Required Contributions made by Hillside during the Standstill Period as long as the Standstill Period remains in effect. 

  

	 	6.	During the Standstill Period, Ampex shall not directly or indirectly engage in, obtain Board approval, agree to or consummate any transaction outside the ordinary course of its
business (other than the restructuring contemplated by the Term Sheet). Absent the prior written consent of Hillside, Ampex is prohibited from taking any action outside of the ordinary course of its business during the Standstill Period, including,
but not limited to, (i) incurring additional debt, (ii) refinancing existing debt, (iii) granting or suffering liens or security interests (other than those that exist on the date hereof), (iv) transferring, encumbering, leasing,
licensing, or selling any assets, (v) authorizing or paying any dividends or distributions of any assets or property to holders of equity in Ampex, (vi) entering into or amending and agreement with a subsidiary or an affiliate of Ampex;
(vii) entering into or amending any employment contract or establishing or amending any severance, retention, bonus or similar program, (viii) entering into or amending any material contract for consulting, advisory or banking services, or
(ix) taking any other action that could negatively affect Hillside’s position as a creditor. For the avoidance of doubt, ordinary course, arm’s length licensing of Ampex’s intellectual property to unaffiliated third parties is
not prohibited by this Agreement. 

  

	 	7.	Ampex shall provide such financial information as may be reasonably requested by Hillside, including without limitation a weekly cash report showing the Company’s current cash
position by legal entity. 

  

	 	8.	 Hillside may terminate the Standstill Period at any time if, in the sole judgment of Hillside, the Parties have stopped making progress toward a definitive
agreement consistent with the Term Sheet, by providing Ampex with written notice of its intention to terminate the Standstill Period, which 

  

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notice shall be served by facsimile and overnight courier upon Ampex’s counsel, Willkie Farr Gallagher LLP, 787 Seventh Avenue, New York, New York 10019
(attn: Matthew A. Feldman, Esq.), facsimile 212-728-9651. Ampex may terminate the Standstill Period at any time if, in the sole judgment of Ampex, the Parties have stopped making progress toward a definitive agreement consistent with the Term Sheet,
by providing Hillside with written notice of its intention to terminate the Standstill Period, which notice shall be served by facsimile and overnight courier upon Hillside’s counsel, Milbank, Tweed, Hadley & McCloy LLP, 1850 K Street, N.W., Washington, D.C. 20006 (attn: Andrew M. Leblanc, Esq.), facsimile (202) 263-7574. The termination of the Standstill Period
shall become effective two (2) business days after service of the notice of termination contemplated by this Paragraph 8. 

  

	 	9.	During the Standstill Period, Ampex and Hillside agree that they shall not commence any legal proceedings or take any other legal action against the other party.

  

	 	10.	For seven (7) days after the termination of the Standstill Period (the “Hillside Exclusive Period”), whether by expiration by its terms or by election of
either Ampex or Hillside, Hillside shall have the exclusive right to commence any proceedings or take any other legal action against Ampex, and during the Hillside Exclusive Period, Ampex shall not be permitted to commence any proceedings or take
any other legal action against Hillside. After the Hillside Exclusive Period, there shall be no restriction on the right of the Parties to commence any proceedings or take any other legal action against the other party. For the avoidance of doubt,
it is the intention of the Parties that Hillside have the right to commence litigation against Ampex upon termination of the Standstill Period before Ampex can commence litigation against Hillside. 

  

	 	11.	If in the judgment of both Ampex and Hillside the Parties are making progress toward achieving a restructuring consistent with the Term Sheet, the parties may extend the Standstill
Period for thirty (30) days upon the written mutual agreement of both Hillside and Ampex. 

  

	 	12.	In any litigation between the parties, Ampex shall not use the existence of this Agreement as evidence or an admission for any purpose whatsoever, including without limitation as
part of a laches, estoppel or waiver argument against Hillside. 

  

	 	13.	The parties hereto represent and warrant to each other that the signatories to this Agreement are authorized to execute this Agreement on behalf of the parties on whose behalf they
are executing; that each has full power and authority to enter into this Agreement; that this Agreement is duly executed and delivered, and constitutes a valid, binding agreement in accordance with its terms. 

  

 - 3 - 

	 	14.	This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior agreements and understandings, written
and oral, between the parties with respect to the subject matter hereof. All representations, warranties, promises, inducements, or statements of intention made by Hillside and Ampex are embodied in this Agreement, and neither Hillside nor Ampex
shall be bound by, or liable for, any alleged representation, warranty, inducement, or statement of intention that is not expressly embodied herein. 

  

	 	15.	This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement, and shall become effective when one or more such
counterparts have been signed by each of the parties and delivered to the other party. 

  

			
	HILLSIDE CAPITAL INCORPORATED
		
	By:	 	 
		 	Name:
		 	Title:
	
	AMPEX CORPORATION
		
	By:	 	 
		 	Name:
		 	Title:

  

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 SETTLEMENT COMMUNICATION 
 MADE PURSUANT TO 
 FEDERAL RULE OF EVIDENCE 408 
 HILLSIDE CAPITAL INCORPORATED 
 405 PARK AVENUE 
 NEW YORK, NY 10022 
 PHONE: (212) 935-6090 
 Ampex Corporation 
 FINAL NON-BINDING TERM SHEET 
 September 11, 2007 
 The following is an outline of the principal terms and
conditions of a restructuring of the notes (the “Hillside Notes”) issued by Ampex Corporation (“Ampex”) to Hillside Capital Incorporated (“Hillside”) in exchange for funding of the contributions
required to the Ampex Employees’ Retirement Plan and the Quantegy Media Corporation Retirement Plan (the “Plans”). This term sheet (“Term Sheet”) is non-binding, subject to, among other things, definitive
documentation, and is for discussion purposes only. This Term Sheet does not, and shall not be construed to, indicate the agreement by any parties, including Hillside, to support the modifications contemplated hereby or any other restructuring. This
Term Sheet and all related communications are for discussion and settlement purposes only and shall be deemed to be settlement negotiations and subject to Rule 408 of the Federal Rules of Evidence and any applicable state law or rule. Consummation
of the transactions contemplated by this Term Sheet is subject to, among other things, satisfactory completion of Hillside’s legal, accounting and management due diligence. 
  

			
	BORROWER:	  	Ampex, its successor company or companies, and its subsidiaries (“Borrower”).
		
	NOTEHOLDER:	  	Hillside.
		
	PURPOSE:	  	Ampex has requested that Hillside consider a restructuring of the Hillside Notes. Specifically, Ampex has requested that the Hillside Notes be amended to provide for the payment of principal and
interest with respect thereto to the extent of available cash flow (the “Amendment”). In addition, Hillside has issued a Notice of Default related to the Borrower’s failure to make the July 13, 2007 Plan contribution (the
“Default”).

  

 -1- 

 SETTLEMENT COMMUNICATION 
 MADE PURSUANT TO 
 FEDERAL RULE OF EVIDENCE 408 
  

			
	OVERVIEW
		
	PROPOSAL:	  	Hillside would agree to the Amendment and rescind the Default in exchange for (i) certain amendments to the Hillside Notes, and (ii) completion of an equity offering.
	
	AMENDMENTS TO HILLSIDE NOTES
		
	DEFERRED INTEREST:	  	Beginning on the date of a definitive agreement, Interest will be payable in cash to the extent of the Surplus Cash Recapture1 as outlined below and if necessary, payable in additional promissory notes having terms, except dates of issuance, identical to the original Hillside Notes (the “Additional Promissory Notes” and
together with the Hillside Notes, the “Notes”). Hillside shall receive repayment by September 30, 2009 of the principal amount of all Additional Promissory Notes issued from the effective date of the proposed restructuring through
September 30, 2009. All Interest payments after September 30, 2009 will become payable in cash on all Notes.
		
	DEFERRED PRINCIPAL	  	Beginning on the date of a definitive agreement, principal payments with respect to the Hillside Notes will be payable in cash to the extent of the Surplus Cash Recapture as outlined below
and if necessary, principal payments will be deferred. Hillside shall receive repayment by September 30, 2009 of the principal amount of all Hillside Notes that would have otherwise become due (in accordance with the current terms thereof and in the
absence of the requested restructuring of the Hillside Notes). All principal repayments after September 30, 2009 will be payable in cash and made in accordance with the current terms.

	 1
	 All capitalized terms used herein and not otherwise defined shall have the
meanings ascribed to such terms in the Hillside-Ampex/Sherborne Agreement by and among the Ampex Group, the Limited Hillside Group and the Sherborne Group, dated December 1, 1994 (as amended, the “Agreement”), as amended
herein, including as such definitions are amended herein. 

  

 -2- 

 SETTLEMENT COMMUNICATION 
 MADE PURSUANT TO 
 FEDERAL RULE OF EVIDENCE 408 
  

			
	CASH FLOW RECAPTURE PROVISIONS:	  	 The existing methodology for determining Surplus Cash Flow will be modified to also reflect, (1) all proceeds from asset sales outside of the
ordinary course shall be included in the calculation of Surplus Cash, (2) Ampex Data Systems Corporation (“ADSC”) cash flow, defined as cash flow from operating activities less cash flow from investing activities, shall be included
in the calculation of Surplus Cash, and (3) no deduction will be permitted for any payments to supplementary pension plans in excess of $850,000 or for any working capital reserves.
  
 The greater of (x) all Surplus Cash Flow or (y) all Surplus IP Royalty Income (as defined below) or
(z) all Excess Cash on Hand (as defined below) shall be used first to pay interest and principal on the Hillside Notes and second to make all funding payments under the Plan.2 The Surplus Cash Flow and Surplus IP Royalty Income tests will be conducted on a semi-annual basis. The Excess Cash on Hand test will be conducted quarterly. Resulting payments will be due within 45 days after the
close of the respective measurement periods. Surplus IP Royalty Income shall be defined as 25% of annual gross IP royalty income less than $3 million, plus 50% of annual gross IP royalty income between $3 million and $5 million, plus 75% of annual
gross IP royalty income between $5 million and $7 million, plus 100% of annual gross IP royalty income in excess of $7 million. Surplus IP Royalty Income will be calculated net of third-party, arms-length commissions. Hillside reserves the right to
approve new or modified commission agreements. Hillside’s approval will not be unreasonably withheld. The Excess Cash on Hand threshold amount will be $15 million provided the total outstanding debt to Hillside does not exceed the amounts
listed below:
  
 •        9/30/09: $40,000,000
  
 •        9/30/10: $30,000,000
  
 •        9/30/11: $20,000,000
  
 •        9/30/12 and after: $10,000,000
  
 If the total outstanding debt to Hillside exceeds these amounts, the Excess Cash on Hand threshold
will be reduced as follows:
  
 •        9/30/09: $10,000,000
  
 •        9/30/10: $10,000,000
  
 •        9/30/11: $ 9,000,000
  
 •        9/30/12 and after: $ 8,000,000

	 2
	 Our initial proposal required Ampex to initially apply surplus cash to the plans
then to Hillside. Craig McKibben asked that Ampex repay Hillside Notes prior to providing funds for the pension plans. In that case, Hillside will provide the funds for the plans in exchange for additional Hillside Notes and a reaffirmation of
Ampex’s primary responsibility to the plans. Once the Notes have been repaid, Ampex will fund the pension plans in accordance with the recapture provisions. 

  

 -3- 

 SETTLEMENT COMMUNICATION 
 MADE PURSUANT TO 
 FEDERAL RULE OF EVIDENCE 408 
  

			
	ADDITIONAL LIENS & ABILITY TO MONETIZE ASSETS:	  	 The Borrower shall grant Hillside a lien on all of its intellectual property. Hillside will remain open minded with respect to possible sales,
contributions or transfers of IP related to licensing initiatives provided such sales, contributions or transfers make sense for the creditors and other stakeholders of Ampex.
  
 The Borrower will also grant Hillside a lien on the stock of ADSC and all of the assets of ADSC.
Starting on September 30, 2009, if the Hillside Notes outstanding on the dates specified below exceed the amounts itemized below, the security agreements will explicitly grant Hillside the rights and ability to foreclose on the stock and assets
of ADSC and force a monetization of those assets should Hillside decide to do so. Should the debt exceed the specified amounts, Hillside may consult with management and the Board to consider future prospects of the business in determining whether to
exercise these rights and abilities. The Board and management shall cooperate with Hillside in any exercise of remedies by Hillside. Borrower shall grant ADSC a royalty-free license, for its own use, of all intellectual property of Ampex used or
usable in the business of ADSC and shall cooperate in the sale process. All after-tax proceeds from the sale shall be used to make pension payments due within 30 days and the remainder shall be used to reduce outstanding debt. Hillside will obtain
these rights and abilities related to ADSC if the outstanding Hillside Notes exceed the respective amounts on the following dates:
  
 •        9/30/09: $40,000,000
  
 •        9/30/10: $30,000,000
  
 •        9/30/11: $20,000,000
  
 •        9/30/12 and after: $10,000,000

  

 -4- 

 SETTLEMENT COMMUNICATION 
 MADE PURSUANT TO 
 FEDERAL RULE OF EVIDENCE 408 
  

			
	ADDITIONAL COVENANTS:	  	 •        Limitations on incurring new indebtedness and
refinancing existing indebtedness;
  
 •        Limitations on asset sales, stock sales, capital expenditures, investments and acquisitions;
  
 •        Limitations on equity issuances except in exchange for cash (such equity
issuances can be used to raise additional capital for patent monetization initiatives if necessary); and
  
 •        Prohibition on additional liens on property or stock; related party
transactions; and dividends, other distributions, or stock repurchases / redemptions

		
	POST DEFAULT INTEREST:	  	4.00% per annum in excess of the non-default interest rate set forth in the Agreement, payable on demand immediately following an event of default.
		
	EVENTS OF DEFAULT:	  	Customary events of default.
		
	BOARD OF DIRECTORS:	  	Two representatives of Hillside will be granted observation rights at Borrower’s board of directors meetings. The Borrower will reimburse Hillside for travel expenses associated with
attending board meetings.

  

 -5- 

 SETTLEMENT COMMUNICATION 
 MADE PURSUANT TO 
 FEDERAL RULE OF EVIDENCE 408 
  

			
	HILLSIDE WARRANT	  	 Borrower will grant to Hillside detachable warrants (the “Hillside Warrant”) exercisable in whole or in part at an exercise price per
share equal to the closing trading price for the purchase of Ampex shares on the date Hillside loans funds to the Borrower for pension funding. The Hillside Warrant will be exercisable for a number of Ampex shares equal to the product of (x) 1.0%
and (y) the principal amount of future loans for pension funding.
  
 The Hillside Warrant
will be exercisable in whole or in part for a period of 10 years from the date of each additional loan. The Hillside Warrant Agreement will permit the payment of the exercise price by Hillside to Borrower with warrants having sufficient inherent
value to equal the exercise price and/or the use of principal outstanding under the Investment as payment of the exercise price. The Hillside Warrant will contain standard anti-dilution protection, including anti-dilution protection related to the
future issuance of stock, options and/or warrants at less than then current market value. Anti-dilution protection shall exclude any dilution occurring through the equity offering contemplated herein.
  
 Hillside shall be entitled to unlimited piggyback (subject to customary cutback provisions) and 2
demand registration rights, all at the Borrower’s expense.
  
 If the issuer ceases to
have shares traded on a nationally recognized stock exchange, Hillside will have the right to require a redemption of the shares obtained under the Hillside Warrant on or after December 31, 2017. The value of the shares shall be determined by a
nationally recognized valuation firm that both Borrower and Hillside find mutually acceptable.

  

 -6- 

 SETTLEMENT COMMUNICATION 
 MADE PURSUANT TO 
 FEDERAL RULE OF EVIDENCE 408 
  

			
	INFORMATION:	  	Borrower to provide monthly management-prepared financial statements with comparisons to budget and prior year figures, annual and updated budgets and forecasts, analysis of past, current and
projected royalty income by licensor and by patent, status of intellectual licensing campaigns, annual audited financial statements, all past, current and projected actuarial data used in any form by the Plans, copies of all filings with or
communications to or from the PBGC, at-will access to the actuaries, employees and auditors of the Borrower, and any other information reasonably requested by Hillside. Hillside or its designee will have the right to inspect and copy the
Borrower’s books and records upon reasonable notice, prior to an event of default, and thereafter, without notice.
	
	EOUITY OFFERING
		
	EQUITY OFFERING	  	Borrower will complete an equity rights offering or other form of an equity raise in the minimum amount of $15 million. The form of the equity raise and the identity of the committed
investors must be satisfactory to Hillside. The proceeds shall be used to fully repay the Senior Notes at which time Hillside will be given a senior security interest in all of the Borrower’s assets. The remainder of the proceeds can be used to
fund general corporate initiatives, subject to the Excess Cash on Hand provisions outlined above. The closing of the equity rights offering and repayment of Senior Notes will occur concurrently with the closing of the Restructuring.
	
	MISCELLANEOUS
		
	PAYMENT OF FEES:	  	Borrower shall pay the reasonable and necessary fees and expenses incurred by counsel for Hillside for services rendered in connection with the proposed restructuring of the Hillside Notes.

  

 -7- 

 SETTLEMENT COMMUNICATION 
 MADE PURSUANT TO 
 FEDERAL RULE OF EVIDENCE 408 
  

			
	MODIFICATIONS RELATED TO PLANS:	  	 Borrower will execute all definitive agreements required to allow Hillside to manage investment of those assets of the Plans currently under the
control of the Borrower, and the current investment guidelines for the Plans will be suspended.
  
 Hillside shall remain fiduciary with respect to investment of all of the assets of the Plans until its obligation to provide funding of any sort to the Plans is terminated under the Joint Settlement Agreement and all other
agreements.
  
 Borrower will cooperate in any requests by Hillside that Borrower seek
minimum funding waivers for the Plans, including using commercially reasonable efforts to provide security.
  
 Ampex shall amend the Plans if Hillside so requests to provide for lump sum payment option in accordance with Hillside’s instructions to participants upon termination.
  
 Borrower will not amend the Plans to increase benefits without Hillside’s
approval.

		
	INDEMNIFICATION:	  	Borrower shall indemnify Hillside against all losses, liabilities, claims and damages or expenses related to the Hillside Notes or the use of the proceeds thereof.
		
	GOVERNING LAW:	  	State of New York.
		
	CLOSING:	  	60 days from the date hereof. The parties will immediately execute a Standstill Agreement to be effective during the 60 day documentation period. A copy of the Standstill Agreement is attached.
The Standstill Agreement and Closing may be extended per the terms outlined in the Standstill Agreement.
		
	EXPIRATION:	  	September 12, 2007 at 5pm EDT.

  

 -8-

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