MUTUAL RELEASE AND WAIVER BETWEEN
SPECTRUM INFORMATION TECHNOLOGIES, INC. AND ALBERT D. PANICO
This Mutual Release and Waiver is made as of the ___ day of
January, 1996 between Albert D. Panico ("Panico") and Spectrum Information
Technologies, Inc. (the "Company").
WHEREAS, Panico and Company have entered into an Employment Agreement,
dated August 13, 1993 (the"Employment Agreement"), pursuant to which Company
may have incurred, and may in the future incur, certain obligations to Panico;
WHEREAS, the Employment Agreement provides for the employment of
Panico by Company, and Panico has been an employee of Company, since
the date of the Employment Agreement;
WHEREAS, Panico may have incurred certain obligations to Company
in connection with his service as an employee of Company;
WHEREAS, Panico and the Company, in consideration of the mutual
agreements and covenants set forth herein, desire to release each other from
the Employment Agreement on the terms and conditions of this Mutual Release
and Waiver;
NOW, THEREFORE, for good and valuable consideration, the receipt of
which is hereby acknowledged, the parties hereto hereby agree as follows:
I. MUTUAL RELEASE AND WAIVER
PANICO AGREES TO RELEASE, REMISE, ACQUIT AND DISCHARGE COMPANY
AND ITS OFFICERS, AGENTS, EMPLOYEES, GUARANTORS, CONSULTANTS, INDEPENDENT
CONTRACTORS, ATTORNEYS, ADVISERS, SUCCESSORS AND ASSIGNS (THE "SPECTRUM
GROUP"), JOINTLY AND SEVERALLY, FROM ANY AND ALL CLAIMS, KNOWN OR
UNKNOWN, WHICH PANICO, HIS HEIRS, SUCCESSORS, OR ASSIGNS HAVE, OR MAY NOW
OR IN THE FUTURE HAVE, AGAINST ANY MEMBER OF THE SPECTRUM GROUP AND ANY
AND ALL LIABILITY WHICH ANY MEMBER OF THE SPECTRUM GROUP HAS, OR MAY NOW
OR IN THE FUTURE HAVE TO PANICO, WHETHER DENOMINATED CLAIMS, DEMANDS,
CAUSES OF ACTION, OBLIGATIONS, DAMAGES OR LIABILITIES, ARISING FROM ANY AND
ALL BASES, INCLUDING BUT NOT LIMITED TO ANY CLAIMS UNDER ANY POLICY,
AGREEMENT, ARRANGEMENT OR PRACTICE OF OR WITH ANY MEMBER OF THE
SPECTRUM GROUP (INCLUDING ANY INDEMNIFICATION AGREEMENT OR OBLIGATION) OR
ANY FEDERAL, STATE, OR LOCAL LAW OR REGULATION, RELATING TO ANY MATTER,
CAUSE OR THING WHATSOEVER FROM THE BEGINNING OT THE WORLD TO THE DATE OF
THIS MUTUAL RELEASE AND WAIVER, INCLUDING, WITHOUT LIMITATION, ANY SUCH
CLAIMS THAT ARISE OUT OF OR RELATE TO (i) PANICO'S RELATIONSHIP WITH THE
SPECTRUM GROUP, (ii) THE TERMINATION OF SUCH RELATIONSHIP OR (iii) THE
EMPLOYMENT AGREEMENT, BUT EXCLUDING (i) ANY CLAIMS, IF ANY, MADE FOR
INDEMNIFICATION PURSUANT TO PARAGRAPH 8 OF THE EMPLOYMENT AGREEMENT AND
(ii) PANICO'S RIGHTS TO PURCHASE COMMON STOCK PURSUANT TO PRESENTLY VESTED
OPTIONS ISSUED TO PANICO TO PURCHASE THE COMPANY'S COMMON STOCK IN
ACCORDANCE WITH THE TERMS OF THE PLAN UNDER WHICH SUCH OPTIONS HAVE BEEN
GRANTED AND THE TREATMENT OF SUCH OUTSTANDING OPTIONS IN THE COMPANY'S
PLAN OF REORGANIZATION. THIS RELEASE IS FOR ANY RELIEF, NO MATTER HOW
DENOMINATED, INCLUDING, BUT NOT LIMITED TO, WAGES, BACK PAY, FRONT PAY,
COMPENSATORY DAMAGES OR PUNITIVE DAMAGES. PANICO FURTHER AGREES (i) THAT
HE WILL NOT FILE OR PERMIT TO BE FILED ON HIS BEHALF ANY SUCH CLAIM AND (ii)
THAT HE AND THE COMPANY WILL EACH EXECUTE A GENERAL RELEASE SUBSTANTIALLY
IN THE FORM EXECUTED BY OTHER FORMER OFFICERS AND DIRECTORS WITH RESPECT
TO INDEMNIFICATION IN CONNECTION WITH SETTLEMENT OF THE CLASS ACTION
DESCRIBED IN PARAGRAPH II BELOW.
THE SPECTRUM GROUP AGREES TO RELEASE, REMISE, ACQUIT AND DISCHARGE
PANICO AND HIS HEIRS, SUCCESSORS AND ASSIGNS (THE "PANICO GROUP"), JOINTLY
AND SEVERALLY, FROM ANY AND ALL CLAIMS, KNOWN OR UNKNOWN, WHICH THE
SPECTRUM GROUP HAS, OR MAY NOW OR IN THE FUTURE HAVE, AGAINST ANY MEMBER
OF THE PANICO GROUP AND ANY AND ALL LIABILITY WHICH ANY MEMBER OF THE
PANICO GROUP HAS, OR MAY NOW OR IN THE FUTURE HAVE TO THE GLOBAL GROUP,
WHETHER DENOMINATED CLAIMS, DEMANDS, CAUSES OF ACTION, OBLIGATIONS,
DAMAGES OR LIABILITIES, ARISING FROM ANY AND ALL BASES, INCLUDING BUT NOT
LIMITED TO ANY CLAIMS UNDER ANY POLICY, AGREEMENT, OR ARRANGEMENT OR ANY
FEDERAL, STATE, OR LOCAL LAW OR REGULATION, RELATING TO ANY MATTER, CAUSE
OR THING WHATSOEVER FROM THE BEGINNING OF THE WORLD TO THE DATE OF THIS
MUTUAL RELEASE AND WAIVER, BUT EXCLUDING ANY RIGHT TO SETOFF OR
COUNTERCLAIM AS TO A CLAIM FOR INDEMNIFICATION BY PANICO. THIS RELEASE IS
FOR ANY RELIEF, NO MATTER HOW DENOMINATED. THE SPECTRUM GROUP FURTHER
AGREES THAT IT WILL NOT FILE OR PERMIT TO BE FILED ON ITS BEHALF ANY SUCH
CLAIM.
II. Representations and Warranties of Panico
In order to induce the Company to execute and perform this agreement,
Panico does hereby represent and warrant the he is not aware of any pending
claims, whether asserted, unasserted or otherwise, that would give rise to a
claim for indemnification under Paragraph 8 of the Employment Agreement
other than the class action litigation entitled In re Spectrum Information
Technologies, Inc. Securities Litigation, (U.S.D.C. Eastern District
of New York, Civil Action No. 93-2295).
III. Identified Consideration
In consideration for the mutual release evidenced hereby, the Company
shall within seven (7) days following bankruptcy court approval of this
agreement as set forth in paragraph V(c) pay Panico the sum of one hundred
and thirty thousand dollars ($130,000.00) subject to applicable withholding
and taxes and the Company shall pay the premiums associated with Panico's
medical and dental benefits plans as generally offered to its employees for
a period of twelve (12) months from the effective date of this agreement.
Panico acknowledges and agrees that the foregoing amounts are in addition
to any amount to which he would otherwise be entitled from the Company.
IV. No Admission
(a) The Company admits no liability of any sort to Panico,
and nothing herein is intended to, or shall be deemed to, constitute an
admission of liability of any kind by the
Spectrum Group.
(b) Panico admits no liability of any sort to the Company,
and nothing herein is intended to, or shall be deemed to, constitute an
admission of liability of any kind by Panico.
V. Third-Party Beneficiary Rights
Panico agrees that the terms of this Mutual Release and Waiver shall
inure to the benefit of and shall be enforceable by each member of the
Spectrum Group, each of whom is intended to be a third-party beneficiary
hereof, and its respective successors and assigns.
VI. General Provisions
(a) This Mutual Release and Waiver constitutes the entire
understanding of Company and Panico with respect to the subject matter
hereof, and supersedes all prior understandings, written or oral, except
as expressly provided herein. The terms of this Mutual Release and Waiver
may be changed, modified or discharged only by an instrument in writing
signed by the parties hereto. A failure of a party to insist on strict
compliance with any provision of this Mutual Release and Waiver shall not
be deemed a waiver of such provision or any other provision hereof.
In the event that any provision of this Mutual Release and Waiver is
determined to be so broad as to be unenforceable, such provision shall be
interpreted to be only so broad as is enforceable.
(b) This Mutual Release and Waiver shall be construed, enforced
and interpreted in accordance with and governed by the laws of the State of
New York without reference to the principles and conflicts of law.
The courts of New York shall have jurisdiction to entertain
any action arising hereunder.
(c) Panico acknowledges that he has been given more than
21 days to consider this agreement and eight days to revoke his agreement
hereto.
(d) The Company and Pancio acknowledge that the Company shall
file an application with the United States Bankruptcy Court for the Eastern
District of New York to enter an Order approving the within agreement in the
Company's pending bankruptcy case, In re Spectrum Information Technologies,
Inc. et al., Debtors (Proc. Consol. Case No. 95-
10690).
(e) The Company believes that approval of the within agreement
is in its best interest, and in the best interest of its bankruptcy estate
and creditors. The Company and Panico acknowledge that unless and until the
within Release and Waiver is approved by the Bankruptcy Court on or before
January 31, 1996 the terms hereof are not effective. In the event that the
Release and Waiver is not approved by the bankruptcy court by January 31,
1996, Panico expressly reserves the right to file a proof of claim,
the filing of which, the Company agrees, will not unduly prejudice it or the
estate, and will not unduly delay the administration of the bankruptcy case,
and the Company expressly reserves its right to object to or seek to
disallow such claim for any other reason.
VII. Knowing and Voluntary Waiver
Panico and the Company each agree and acknowledge that they
have read this Mutual Release and Waiver, have consulted with an attorney of
his or its choosing with respect hereto and completely understands the terms
and consequences hereof and that the execution of this Mutual Release and
Waiver is his or its knowing, free and voluntary act.
______________________________________
Albert D. Panico
SPECTRUM INFORMATION TECHNOLOGIES, INC.
______________________________________
By: Donald J. Amoruso,
Chief Executive Officer