Contract
Exhibit 1.1
To the
Securities Purchase Agreement dated as of August 20, 2008 (the “Agreement”) by and among Tia
Xxx XX, Inc., Xxxx Xxxxxxxxxx, and Xxxxx Xxxxxxx, Xxx XxXxxxxxx and Xxxxx Xx
each of whom is a signatory thereto.
*
* * * *
SEPARATION AGREEMENT AND
RELEASE dated as of August 20, 2008 (the “Agreement”) by and between Xxx.
Xxxx Xxxxxxxxxx, an individual currently having an office located at 0000 Xxxxxx
Xxxx, Xxxxx X, Xxxxxxxxx, Xxx Xxxx, 00000 (hereinafter, the “Executive”), and
Xxx XX, Inc., a Delaware corporation, currently having its principal place of
business located at 0000 Xxxxxx Xxxx, Xxxxx X, Xxxxxxxxx, Xxx Xxxx, 00000
(hereinafter, the “Company”) . Each of the Executive and the Company is, unless
otherwise specifically identified, a “Party” and, collectively, the “Parties”).
This Agreement is expressly for the benefit of the Parties and certain “Company
Releases,” each as respectively defined in Section 5 below.
RECITALS:
WHEREAS, the Executive has
served as the Company’s sole officer, director, principal and employee since
inception;
WHEREAS, on August 20, 2008,
the Executive ceased working for the Company (hereinafter, the “Cessation
Date”); and
WHEREAS, the Executive desires
to separate from the Company, cede control and to settle fully and finally all
differences, disputes and claims she may have against the Company and others
including, but not limited to, those differences, disputes and claims based
upon, arising out of, or relating to the Executive’s employment relationship
with Company and the cessation thereof.
NOW, THEREFORE, in
consideration of the mutual covenants and conditions herein contained, it is
hereby agreed by and between the Parties
as follows:
1. Mutual
Agreement to Terminate Relationship; Executive’s
Resignation. Company and the Executive mutually desire to
terminate Executive’s relationship with the Company, effective as of the
Cessation Date. Further, and in connection with the termination of her
relationship with the Company, the Executive shall resign all of her positions
with the Company, namely her positions as a director of the Company and her
official positions as President, Secretary and Treasurer of the Company, she
having no other positions with the Company. Concurrently with the execution and
delivery of this Agreement by the Parties, the Executive shall execute and
deliver to Company a letter of resignation effective as of the Cessation Date
(hereinafter, the “Executive’s Resignation Letter”). The Executive’s Resignation
Letter shall be substantially in the form annexed hereto as Exhibit A
..
2. Separation
Consideration; Method of Delivery.
(a) The
Company agrees to issue to the Executive, One Million Five Hundred Thousand
(1,500,000) shares of Company solely as her separation compensation (Separation
Shares).
(b) The
Company shall deliver the Separation Shares to the Executive, at 0000 Xxxxxx
Xxxx, Xxxxx X Xxxxxxxxx, Xxx Xxxx 00000 within five (5) days of the Cessation
Date.
3. No
Filings. The Executive represents that up to and including the
date of execution of this Agreement, she has not filed any action, claim,
charge, or complaint against Company or any other Company Releasee identified in
Section 5 below, with any local, state, or federal agency, self-regulatory
organization ("SRO"), or court and that she will not make such a filing at any
time hereafter based upon any events or omissions occurring prior to and up to
the date of execution of this Agreement. In the event that any agency or court
assumes jurisdiction of any lawsuit, claim, charge or complaint, or purports to
bring any legal or regulatory proceedings against Company or any other Company
Releasee identified in Section 5 below on the Executive’s behalf, she promptly
will request that the agency, SRO, or court withdraw from or dismiss the
lawsuit, claim, charge, or complaint with prejudice. Notwithstanding the
foregoing provisions of this Section 3 to the contrary, the Executive expressly
retains any and all rights that she may have: (a) to file and commence an action
for indemnification arising under the Company’s certificate of incorporation or
by-laws (collectively, “Indemnification Clam”); provided, however, that such right shall not
apply to any Indemnification Claim which is the basis or a part of a claim of
the Company against the Executive under the Securities Purchase Agreement (as
hereinafter defined in Section 5); (b) to file and commence an action to enforce
issuance and delivery of the Separation Shares; and (c) to enforce any of her
rights under the Securities Purchase Agreement (as hereinafter defined in
Section 5) including any claims for indemnification thereunder to the extent in
good faith she believes she is entitled thereto.
4.
Covenant Not to Xxx. In consideration for the promises set
forth in this Agreement, the Executive covenants that she will not file,
participate in, or instigate the filing of any lawsuits, complaints or charges
by herself or by any other person or party in any state or federal court or any
proceedings before any local, state, or federal agency, or SRO, except as
required by law, claiming that Company or any other Company Releasee identified
in Section 5 below has violated any law or obligation, including, but not
limited to, any claims that have been made or that could have been made, based
upon events or omissions occurring prior to and including the effective date of
this Agreement. Notwithstanding the foregoing provisions of this Section 4 to
the contrary, the Executive expressly retains any and all rights that she may
have: (a) to file and commence an action for an Indemnification Claim; provided
, however , that such right shall not apply to any Indemnification Claim which
is the basis or a part of a claim of the Company against the Executive under the
Securities Purchase Agreement (as hereinafter defined in Section 5); (b) to xxx
to enforce issuance and delivery of the Separation Shares, and (c) to xxx to
enforce any of her rights under the Securities Purchase Agreement (as
hereinafter defined in Section 5) including any claims for indemnification
thereunder to the extent in good faith she believes she is entitled
thereto.
5.
Executive Release.
Subject
to Company’s obligations in this Agreement or anything to the contrary stated
herein, in consideration for the promises set forth in this Agreement, the
Executive does hereby - for herself and for her heirs, representatives,
attorneys, executors, administrators, successors, and assigns - release, acquit,
and forever discharge Company and all of its affiliates, subsidiaries and
divisions, and their respective stockholders, officers, directors, partners,
servants, agents, employees, representatives, attorneys, employee welfare and
retirement plans and the respective plan administrators and fiduciaries, past,
present, and future, all persons acting under, by, through, or in concert with
any of them, and each of them (all of whom are hereinafter referred to as the
"Company Releasees"), from any and all actions, causes of action, grievances,
obligations, costs, expenses, damages, losses, claims, liabilities, suits,
debts, demands, and benefits (including attorneys' fees and costs actually
incurred), of whatever character, in law or in equity, known or unknown,
suspected or unsuspected, matured or unmatured, of any kind or nature
whatsoever, based on any act, omission, event, occurrence, or nonoccurrence from
the beginning of time to and including the effective date of this Agreement,
including but not limited to any claims or causes of action arising out of or in
any way relating to the Executive’s employment relationship with Company or any
other Company Releasee. The Executive agrees that this release of claims
includes, but is not limited to, claims for breach of any implied or express
contract or covenant; claims for promissory estoppel; claims of entitlement to
any pay (other than the Separation Consideration promised in Section 2); claims
of wrongful denial of insurance and employee benefits, or any claims for
wrongful termination, public policy violations, defamation, invasion of privacy,
fraud, misrepresentation, unfair business practices, emotional distress or other
common law or tort matters; claims of harassment, retaliation or discrimination
under federal, state, or local law; claims based on any federal, state or other
governmental statute, regulation or ordinance, including, without limitation,
Title VII of the Civil Rights Act, as amended, the Age Discrimination in
Employment Act of 1967, the Older Worker Benefit Protection Act, the National
Labor Relations Act, the Occupational Safety Health Act, the Americans with
Disabilities Act, the Family and Medical Leave Act, the Employee Retirement
Income Security Act of 1974, New York State Wage and Hour Laws, the New York
Occupational Safety and Health Laws, the New York Equal Pay Law, the New York
Human Rights Law, the New York Civil Rights Act, the New York City Human Rights
Act, and the New York City Administrative Code - Title 8. It is expressly
understood by the executive that among the various rights and claims being
waived by the Executive in this Agreement are those arising under the Age
Discrimination in Employment Act of 1967 (29 U.S.C. sec. 621, et seq.), as
amended. Executive’s release of Company under this Section 5 shall not apply to
any claims of Executive under: (a) the Company’s certificate of incorporation or
by-laws for an Indemnification Claim; provided , however , that such right shall
not apply to any Indemnification Claim which is the basis or a part of a claim
of the Company against the Executive under the Securities Purchase Agreement (as
hereinafter defined); (b) the Separation Shares, and (c) that certain Securities
Purchase Agreement by and among the Executive, the Company and Xxxxx Xxxxxxx,
Xxx XxXxxxxxx and Xxxxx Xx dated as of August 20, 2008 (hereinafter, the
“Securities Purchase Agreement”) including any claims for indemnification
thereunder to the extent in good faith she believes she is entitled
thereto.
6. Mutual
Non-Disparagement.
(a) The
Executive agrees that she will not make any disparaging or defamatory
statements, either orally or in writing (and, for the purposes of this
Agreement, the term “writing” includes, but is not limited to electronic
communications), to any third party concerning Company (including, but not
limited to the Company Releasees identified in Section 5 above), concerning its
or their officers, directors, employees or agents, or concerning its or their
services, products, offerings, quantitative or other research, or methods of
communicating such services, products or offerings, or its or their method of
doing business, or employment practices. The Executive agrees that she will
direct her immediate family members and representatives not to make any
disparaging or defamatory statements, either orally or in writing, to any third
party concerning Company or any other Company Releasee, concerning its or their
officers, directors, employees or agents, or concerning its or their services,
products, quantitative or other research, or methods of doing business. Nothing
herein shall preclude the Executive from cooperating in a truthful manner with
any governmental agency or self-regulatory agency (SRO), in an investigation or
review by such agency, or testifying in a court of law or other proceeding if
compelled or requested to testify as a witness in a proceeding in which Company,
or any other Company Releasee, or Executive is a subject of the investigation,
review, or proceeding.
(b)
Company agrees that it will direct Xxxxx Xxxxxxx, Xxx XxXxxxxxx and Xxxxx Xx not
to make any disparaging or defamatory statements, either orally or in writing,
to any third party concerning the Executive including, but not limited to, any
statements related to the Executive’s performance during the Executive’s tenure
at Company. Nothing herein shall preclude Company, its corporate affiliates, or
their respective officers, directors, employees or agents from cooperating in a
truthful manner with any governmental agency or self-regulatory agency (SRO), in
an investigation or review by such agency, or testifying in a court of law or
other proceeding if compelled or requested to testify as a witness in a
proceeding in which Company, or any Company Releasee, or Executive is a subject
of the investigation, review, or proceeding.
7. Knowing
and Voluntary Agreement. The Executive understands and agrees
that she:
(a) has
had a reasonable time within which to consider this Agreement before executing
it;
(b) has
carefully read and fully understands all of the provisions of this
Agreement;
(c) is,
through this Agreement, releasing Company and the other Company Releasees from
any and all claims she may have against Company and the other Company Releasees
(other than claims arising under the Separation Sharesand the Securities
Purchase Agreement), as stated herein but not after this Agreement is executed
by the Executive, including claims under the Age Discrimination in Employment
Act of 1967;
(d)
knowingly and voluntarily agrees to all of the terms set forth in this Agreement
in exchange for consideration that is more valuable than what Executive is
already entitled to;
(e)
knowingly and voluntarily intends to be legally bound by the same;
(f) was
advised, and hereby is advised in writing, to consider the terms of this
Agreement and consult with an attorney of her respective choice prior to
executing this Agreement;
(g) has
had twenty-one (21) days to consider this Agreement before signing it (the
“Consideration Period”), and has seven (7) days after signing this Agreement to
revoke her signature (the “Revocation Period”). Revocation can be made by
delivering written notice of revocation to: Xxxxx Xxxxxxx, 0000 Xxxxxx Xxxx Xx.,
Xxxxxx Xxxxxx, XX 00000. For this revocation to be effective, written notice
must be received by Xxxxx Xxxxxxx no later than the close of business on the
seventh (7th) calendar day after the Executive signs this Agreement. If the
Executive revokes this Agreement, it shall not be effective or enforceable and
the Executive will not receive the benefits provided herein.
8. Executive
Representations and Warranties. The Executive represents,
warrants and covenants to the Company that:
(a) The
Executive has the requisite power, authority and legal capacity to execute and
deliver this Agreement, to perform all of her obligations hereunder and to
undertake all actions required of the Executive hereunder; and all necessary
approvals of third parties with respect to such matters have been given or
obtained.
(b) This
Agreement has been duly executed and delivered by the Executive and constitutes
a valid and legally binding obligation of the Executive, enforceable against the
Executive, in accordance with its terms, subject to applicable bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors' rights generally and
to general principles of equity. The entering into of this Agreement and the
transactions contemplated hereby will not result in a violation of any of the
terms or provisions of any law applicable to the Executive, or any agreement to
which the Executive is a party or by which she is bound.
(c) The
Executive is acquiring the Separation Shares as principal for her own account
for investment purposes only and not with a view to or for distributing or
reselling the Separation Shares or any part thereof or interest
therein.
(d) The
Executive either alone or together with her representatives, has such knowledge,
sophistication and experience in business and financial matters so as to be
capable of evaluating and assessing the merits and risks of the prospective
investment in the Separation Shares, and has so evaluated the merits and risks
of such investment and has determined that the Separation Shares is suitable for
investment for her .
(e) The
Executive acknowledges that her acquisition of the Separation Shares is a highly
speculative investment, involving a high degree of risk and the Executive is
able to bear the economic risk of an investment in the Separation Shares; and,
at the present time, is able to afford a complete loss of such
investment.
(f) The
execution, delivery, and performance of this Agreement by Executive and the
consummation by Executive of the transactions contemplated hereby will not
conflict with or result in a default under the terms of any material contract,
agreement, obligation or commitment applicable to Executive. The execution,
delivery and performance by the Executive of this Agreement and the completion
of the transaction contemplated hereby do not and will not result in a violation
of any law, regulation, order or ruling applicable to the Executive, and do not
and will not constitute a breach of or default under any agreement to which the
Executive is a party or by which she is bound.
(g) The
Executive understands that no securities commission, stock exchange,
governmental agency, regulatory body or similar authority has made any finding
or determination or expressed any opinion with respect to the merits of an
investment in the Separation Shares.
(h) The
Executive confirms that neither the Company nor any of its directors, employees,
officers, consultants, agents or affiliates, has made any representations
(written or oral) to the Executive regarding the future value of the Separation
Shares. In making its investment decision with respect to the Separation Shares,
the Executive has relied solely upon publicly available information relating to
the Company and not upon any verbal or written representation made by or on
behalf of the Company.
(i) The
Executive is not and has not become aware of any advertisement in printed public
media or on radio, television or other form of communication (including
electronic display such as the Internet) with respect to the offering of the
Separation Shares to her.
(j) The
Executive understands that the sale and delivery of the Separation Shares is
conditional upon such sale being exempt from the registration and prospectus
requirements under applicable securities legislation or upon the issuance of
such orders, consents or approvals as may be required to permit such sale and
delivery without complying with such requirements. If required under applicable
securities legislation or regulatory policy, or by any securities commission,
stock exchange or other regulatory authority, the Executive will execute,
deliver, file and otherwise assist the Company in filing such reports,
undertakings and other documents with respect to the issue of the Separation
Shares.
(k)
Except as disclosed in writing to the Company, the Executive does not act
jointly or in concert with any other person or company for the purposes of
acquiring the Separation Shares.
(l) The
investment in the Separation Shares may have tax consequences under applicable
taxation laws, that it is the sole responsibility of the Executive to determine
and assess such tax consequences as may apply to her particular circumstances,
and the Executive has not received and is not relying on the Company for any tax
advice whatsoever.
(m) The
Executive is responsible for obtaining such legal advice as she considers
appropriate in connection with the execution and delivery of this Agreement and
her acquisition of the Separation Shares hereby. The Executive acknowledges that
she has been advised that no accountant or attorney engaged by the Company is
acting as her representative, accountant or attorney in connection with this
Agreement and/or the transactions contemplated hereby.
(n) All
information which the Executive has provided or is providing the Company, or to
its agents or representatives concerning the Executive’s suitability to acquire
the Separation Shares is accurate and correct as of the date of the signature on
the last page of this Agreement. Such information includes, but is not limited
to the Executive’s personal financial affairs, business position and the
knowledge and experience of the Executive and the Executive’s advisors. The
Company shall maintain such information regarding the Executive in strict
confidence except as may be required to be disclosed to governmental agencies
pursuant to requirements of applicable corporate securities and tax laws, rules
and regulations regarding the issuance and delivery of the Separation Shares to
the Executive.
(o) The
Executive has been provided with copies of all material information requested by
either the Executive, the Executive’s purchaser representative or other
representing the Executive, including any information requested to verify any
information furnished, and there has been direct communication between the
Executive and her representatives on the one hand and the Executive and the
Executive’s representatives and advisors on the other in connection with
information regarding the acquisition of the Separation Shares under this
Agreement. There has been made available the opportunity to ask questions of and
receive answers from the Company and/or the directors, officers, employees or
representatives of the Company concerning the issuance and deliver of the
Separation Shares under this Agreement and to obtain any additional information
(to the extent the Company possesses such information or can acquire it without
unreasonable effort or expense) desired or necessary to verify the accuracy of
the information provided.
(p) The
Executive represents and warrants that the Executive is an “accredited investor”
as such term is defined in Rule 501(a) of Regulation D, as promulgated under the
’33 Act and, particularly, is either: (i) a natural person whose individual net
worth, or joint net worth with her spouse, as of the date of this Agreement,
exceeds $1,000,000; or (ii) a natural person who had an individual income in
excess of $200,000 in each of the two most recent years or joint income with her
spouse in excess of $300,000 in each of those years and has a reasonable
expectation of reaching the same income level in the current year.
(q) The
Executive acknowledges that the Separation Shares shall bear a legend
substantially as follows:
THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 (THE “1933 ACT”) OR ANY STATE SECURITIES LAWS. THE
SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD, TRANSFERRED,
HYPOTHECATED, ASSIGNED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE 1933 ACT WITH RESPECT TO SUCH SHARES, OR WITH
AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE ISSUER STATING THAT SUCH
SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION IS BEING MADE IN ACCORDANCE WITH
REGULATION S UNDER THE SECURITIES ACT OR IS EXEMPT FROM THE REGISTRATION
REQUIREMENTS OF THE 1933 ACT AND ANY APPLICABLE STATE SECURITIES LAWS; AND
HEDGING TRANSACTIONS INVOLVING THESE SECURITIES MAY NOT BE CONDUCTED UNLESS IN
COMPLIANCE WITH THE 1933 ACT.
(r) The
Executive confirms that she has been advised to consult with her own legal and
financial advisors with respect to the suitability of the Separation Shares (and
the non-transferability restrictions thereon) as an investment for the Executive
and confirms that no representation has been made to her by or on behalf of the
Company with respect thereto.
9. Full and
Independent Knowledge. The Parties represent
that they have discussed thoroughly all aspects of this Agreement with their
respective attorneys, fully understand all of the provisions of the Agreement,
and are voluntarily entering into this Agreement.
10. No
Representations. The Parties
acknowledge that, except as expressly set forth herein, no representations of
any kind or character have been made to induce the execution of this
Agreement.
11. Mutual
Non-Admission of Liability. Each of the
Parties hereby expressly acknowledges that the execution of this Agreement and
the mutual consideration provided hereunder are not and shall not be construed
in any way as an admission of wrongdoing or liability on the part of any Party
arising out of or attributable to the Executive’s relationship with and
employment at Company or the termination of those
relationships.
12. Waiver. The
failure of any Party to insist upon strict adherence to any term of this
Agreement on any occasion shall not be considered a waiver thereof or deprive
that party of the right thereafter to insist upon strict adherence to that term
or any other term of this Agreement.
13. Miscellaneous.
(a) The
language of all parts in this Agreement shall be construed as a whole, according
to its fair meaning, and not strictly for or against any Party, each Party
having had a hand in its drafting;
(b)
Should any provision in this Agreement be declared or determined to be illegal
or invalid, the validity of the remaining parts, terms, or provisions shall not
be affected thereby, and the illegal or invalid part, term, or provision shall
be deemed not to be part of this Agreement, and all remaining provisions shall
remain valid and enforceable.
(c)
Except as otherwise expressly provided in the Securities Purchase Agreement ,
this Agreement sets forth the entire agreement between the Parties pertaining to
the subject matter of this Agreement and fully supersedes any prior agreement or
understanding pertaining to the subject matter hereof;
(d) The
headings used herein are for reference only and shall not affect the
construction of this Agreement.
15. Counterparts.
This Agreement may be executed in one or more counterparts, by facsimile or
original signature, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
16. Notification. Notice to be
given under this Agreement shall be deemed given, when received, and if sent by
reputable courier (DHL, FedEx or UPS), as follows:
If to the
Company, to:
Xxx XX
Inc.
0000
Xxxxxx Xxxx Xx.
Xxxxxx
Xxxxxx, XX 00000
If to the
Executive, to:
Xxx. Xxxx
Xxxxxxxxxx
0000
Xxxxxx Xxxx , Xxxxx X
Xxxxxxxxx,
Xxx Xxxx, 00000
Fax No.:
(000) 000-0000
IN
WITNESS WHEREOF, the parties have executed and entered into this Agreement as of
the day and year first-above written.
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