EXHIBIT 10.24
EXECUTION COPY
TERMINATION AGREEMENT AND GENERAL RELEASE
THIS TERMINATION AGREEMENT AND GENERAL RELEASE (the "Agreement") is made
and entered into by and between Xxxxx Xxxxxxx, an individual ("Xxxxxxx") and
United Leisure Corporation, a Delaware corporation and its successor,
predecessor, affiliate and related entities (the "Company").
RECITALS:
X. Xxxxxxx has been a consultant to the Company from on or about October
22, 1984 through the date of this Agreement pursuant to the terms of an Amended
and Restated Consulting Agreement (the "Consulting Agreement").
B. The terms of the Consulting Agreement provide for a five-year
"evergreen" term that constantly renews the full term each year unless either
party gives notice of intention to terminate the Consulting Agreement at the end
of its then five-year term at least 60 days prior to the end of the completion
of the first year of the five-year term then in effect.
X. Xxxxxxx and the Company desire to terminate the Consulting Agreement
between Xxxxxxx and the Company (hereinafter referred to as the "Relationship")
and enter into certain supplemental understandings on other matters.
D. The Relationship is terminated effective January 1, 2001 (hereinafter
the "Termination Date").
E. Without making any admission of liability whatsoever, it is the desire
of Xxxxxxx and the Company to settle fully and finally all differences or
potential differences between them, including all differences or potential
differences that arise out of or relate to the Relationship and the termination
of the Relationship and to document the supplemental understandings.
NOW, THEREFORE, Xxxxxxx and the Company understand and agree as follows:
No Admission of Wrongdoing.
This Agreement shall not in any way be construed as an admission that the
Company or any officer, director, shareholder, advisor, employee, manager,
agent, other representative of, or consultant (other than Xxxxxxx) to, the
Company (collectively, "Company Representatives") has any liability to, or has
acted wrongfully in any way with respect to Xxxxxxx or any other person. The
Company specifically denies that it or any Company Representatives have any
liability to, or that it or any Company Representatives have committed any
wrongful or discriminatory acts against Xxxxxxx or any other person.
This Agreement shall not in any way be construed as an admission that Xxxxxxx
has any liability to, or has acted wrongfully in any way with respect to, the
Company or any Company Representatives or any other person. Xxxxxxx
specifically denies that he has any liability to, or that he has committed any
wrongful or discriminatory acts against, the Company or any Company
Representatives or any other person.
Termination of Relationship.
Xxxxxxx and the Company acknowledge and agree that the Relationship ended
on the Termination Date.
Company Property.
Xxxxxxx represents and warrants that he has returned to the Company all of the
Company's property in his
possession, including but not limited to, the Company's files, memoranda,
records and documents.
No Lawsuits.
Xxxxxxx agrees never to file a lawsuit, administrative complaint, or charge of
any kind with any court, governmental or administrative agency or arbitrator
against the Company or any Company Representatives asserting any claims that are
released in this Agreement.
Xxxxxxx represents and warrants that, prior to signing this Agreement, he
neither has filed nor pursued any complaints, charges or lawsuits of any kind
with any court, governmental or administrative agency or arbitrator against the
Company or any Company Representatives, asserting any claims that are released
in this Agreement.
The Company agrees never to file a lawsuit, administrative complaint, or charge
of any kind with any court, governmental or administrative agency or arbitrator
against Xxxxxxx asserting any claims that are released in this Agreement.
The Company represents and warrants that, prior to signing this Agreement, it
has not filed nor pursued any complaints, charges or lawsuits of any kind with
any court, governmental or administrative agency or arbitrator against Xxxxxxx
asserting any claims that are released in this Agreement.
Consideration.
In consideration of the obligations of the Company as set forth herein, Xxxxxxx
shall:
Agree to the termination of the Relationship and all obligations related
thereto; and
Continue to have the entire responsibility for discharging all the obligations
of an independent contractor with respect to the consideration paid by the
Company pursuant to this Agreement under all federal, state or local laws,
regulations or orders now or hereafter enforced, including without limitation
those relating to taxes, unemployment compensation or insurance, social
security, workers' compensation, disability pensions, tax withholdings and
including the filing of all returns and reports required of an independent
contractor and the payment of all taxes, assessments, contributions and the
other sums required of an independent contractor.
In consideration of the obligations of Xxxxxxx as set forth herein, the Company
shall:
Agree to the termination of the Relationship and all obligations related
thereto;
Pay Xxxxxxx a total of $250,000, which will be paid on January 31, 2001;
Assign to Xxxxxxx the secured promissory note executed by Grand Havana
Enterprises, Inc. in favor of the Company, dated September 30, 1998, in the face
principal amount of $1,250,000 and the related security agreement, dated
September 30, 1998, granting the Company a security interest in substantially
all of the assets of Grand Havana Enterprises, Inc.; and
Entitle Xxxxxxx to exercise stock options to purchase 2,606,950 shares of the
Company's Common Stock pursuant to the terms and provisions of the various
option agreements originally dated as of July 24, 1987, October 7, 1988,
November 17, 1988, December 5, 1988, and September 30, 1998 by and between
Xxxxxxx and the Company, as amended from time to time (the "Vested Options").
The Vested Options represent all of the currently outstanding unexpired stock
options granted to Xxxxxxx by the Company. Xxxxxxx shall be entitled to
exercise the Vested Options in accordance with their terms. Nothing in this
Agreement modifies or otherwise affects the terms and provisions of the Vested
Options or Xxxxxxx'x rights under the above referenced option agreements. The
option agreements evidencing the Vested Options shall continue in effect in
accordance with their respective terms.
Xxxxxxx acknowledges that he has received all compensation payments due under
the terms of the Consulting Agreement through the Termination Date and has been
reimbursed for all reasonable expenses incurred in connection with the
performance of his duties for the Company through the Termination Date.
Xxxxxxx shall be entitled to receive the following benefits to the extent
available under the group insurance
plans or other arrangements maintained by the Company for independent
contractors, subject to the following:
Xxxxxxx may elect to continue health benefit coverage under the Company's group
health plan (medical and dental coverages) for himself, his spouse and/or
eligible dependents to the extent available under the terms of the plan pursuant
to the healthcare coverage continuation provisions of the Consolidated Omnibus
Budget Reconciliation Act of 1985, as amended ("COBRA"), at the same coverage
level provided immediately prior to the Termination Date (subject to any changes
in coverage under the plan that may be made from time to time with respect to
the coverage generally applicable to the Company's independent contractors who
are eligible for benefits under the plan). Xxxxxxx will pay the cost of such
COBRA coverage and shall not be entitled to any additional welfare benefit plan
coverage beyond the applicable COBRA continuation coverage provided by law and
the terms of the plan.
Xxxxxxx shall be entitled to benefits under the Company's tax-qualified plan for
periods prior to the Termination Date according to the terms of such plan and
his rights and the Company's obligations thereunder shall not be affected by
this Agreement.
Mutual Releases.
In exchange for the mutual obligations set forth herein, and except for the
obligations set forth herein, Xxxxxxx, on behalf of himself and his
representatives, administrators, servants, agents employees, attorneys,
predecessors, successors and assigns, knowingly and voluntarily waives and
releases the Company and the Company Representatives, and each of their
subsidiaries, affiliates, officers, directors, stockholders, partners, owners,
representatives, administrators, servants, agents employees, attorneys,
predecessors, successors and assigns (collectively, the "Released Parties"),
from any and all claims, liabilities, obligations, promises, agreements,
contracts, controversies, damages, actions, causes of action, suits, rights,
demands, costs, losses, debts and expenses of any kind, at law, equity or
otherwise, whether known or unknown, suspected or unsuspected (collectively
"Liabilities"), which Xxxxxxx has or may have against them, including but not
limited to the matters arising out of or relating to the Relationship and/or the
termination of the Relationship (the "Release"). This Release extends to and
includes, but is not limited to, claims for breach of any express or implied
contract, breach of any implied covenant, fraud, intentional or negligent
misrepresentation, emotional distress, or any other claims relating to the
Relationship and/or the termination of the Relationship. This release also
includes a release of any claims by Xxxxxxx under any federal, state or local
laws or regulations, including, but not limited to: (1) Title VII of the Civil
Rights Act of 1964, 42 U.S.C. Section 2000(e), et seq.; (2) the Age
Discrimination in Employment Act, 29 U.S.C. Section 621, et seq.; (3) the
California Fair Employment and Housing Act, Cal. Govt. Code Section 12900, et
seq.; (4) the California Labor Code Section 200, et seq.; (5) the Fair Labor
Standards Act, 29 U.S.C. Section 201, et seq.; (6) the Consolidated Omnibus
Budget Reconciliation Act of 1985 (COBRA), 42 U.S.C. Section 1395(c); (7) the
Employee Retirement Income Security Act of 1974, 29 U.S.C. Section 1001, et
seq.; and (8) Title I of the Americans with Disabilities Act.
Xxxxxxx further understands and acknowledges that:
This Agreement constitutes a voluntary waiver of any and all rights and claims
he has against the Released Parties as of the date of the execution of this
Agreement, including rights or claims arising under the Age Discrimination in
Employment Act, 29 U.S.C. (S) 621 et seq.;
He has waived rights or claims pursuant to this Agreement in exchange for
consideration, the value of which exceeds payment or remuneration to which he
was already entitled;
He is hereby advised that he may consult and hereby acknowledges that he has in
fact consulted with an attorney of his choosing concerning this Agreement prior
to executing it;
He has been afforded a period of at least 21 days to consider the terms of this
Agreement, and in the event he should decide to execute this Agreement in fewer
than 21 days, he has done so after consulting with his attorney and with the
express understanding that he has been given and declined the opportunity to
consider this Agreement for a full 21 days; and
He may revoke this Agreement at any time during the seven (7) days following the
date of execution of this Agreement, and this Agreement shall not become
effective or enforceable until such revocation period has expired.
In exchange for the mutual obligations set forth herein and except for the
obligations set forth herein, the Company and the Company Representatives, on
behalf of themselves and their subsidiaries, affiliates, officers, directors,
stockholders, partners, owners, representatives, administrators, servants,
agents employees, attorneys, predecessors, successors and assigns, knowingly and
voluntarily waive and release Xxxxxxx and each of his representatives,
administrators, servants, agents, employees, attorneys, predecessors, successors
and assigns, from any and all Liabilities, which the Company has or may have
against him, including but not limited to matters arising out of or relating to
the Relationship and/or the termination of the Relationship.
The parties and each of them hereby warrant, represent and agree that, as a
condition of this Agreement, the parties expressly release all rights and claims
that they know about as well as those they may not know about as of the date of
this Agreement. The parties, and each of them, hereby warrant, represent and
agree that each of them is fully aware of the provisions of California Civil
Code Section 1542, which provides as follows:
"A general release does not extend to claims which the
creditor does not know or suspect to exist in his favor
at the time of executing the release, which if known by
him must have materially affected his settlement with the
debtor."
The parties and each of them knowingly and voluntarily waive the provisions
of California Civil Code Section 1542, and any other statutes or common law
principle of similar effect, as to any and all claims, demands, causes of
action, or charges, known or unknown, suspected or unsuspected, and further
agree that this waiver is a material aspect of the consideration for entering
into this Agreement.
Ownership of Claims.
The parties and each of them represent and agree that they have not
assigned or transferred, or attempted to assign or transfer, to any person or
entity, any of the claims they are releasing in this Agreement.
No Representations.
The parties and each of them represent and agree that no promises,
statements or inducements have been made to them that have caused them to sign
this Agreement other than those expressly stated in this Agreement.
Non-Disparagement and Confidentiality.
Commencing immediately upon the execution of this Agreement, the parties and
each of them agree to refrain from making any defamatory, disparaging or
derogatory statements regarding each other.
The Company and Xxxxxxx agree that except for such disclosures as the Company
may be advised by counsel should be made in order to discharge its obligations
as a public company, no announcement with respect to this Agreement or the
substance of this Agreement will be publicly released by any party without the
prior written consent of the other, which consent shall not be unreasonably
withheld. Further, except as set forth in the prior sentence, each of the
parties hereby represents and agrees that such party will use its reasonable
best efforts to keep the terms of this Agreement completely confidential and
such party will not hereafter disclose such confidential information to anyone
other than to members of such party's immediate family, legal counsel and
professional advisors, all of whom shall be bound by this confidentiality
provision. The parties shall be excused from the performance of the duties and
obligations imposed by this paragraph only if their testimony or the production
of any documents is compelled by a validly issued subpoena or by order of a
court of competent jurisdiction. In the event of the occurrence of the
foregoing contingency, the party who is the recipient of such subpoena or court
order shall immediately provide the other party, in care of his or its counsel,
with as much notice as possible including, if practicable, at least ten (10)
days' written notice, by personal delivery or certified mail, return receipt
requested, prior to the date of performance specified by the subpoena or court
order.
Trade Secrets.
Xxxxxxx understands and agrees that in the course of the Relationship with the
Company, he has acquired confidential information and trade secrets concerning
the Company's past, present and future clients, operations, plans, methods of
doing business, projected and historical revenues, marketing, costs, production,
growth and distribution, and confidential business strategies. Xxxxxxx
understands and agrees that it would be extremely damaging to the Company if
such information were disclosed to a competitor or made available to any other
person, corporation or other entity. Xxxxxxx understands and agrees that such
information has been disclosed to him in confidence, that he will keep such
information secret and confidential and that he will not in any way use,
distribute or disclose such information.
In view of the nature of the confidential information and trade secrets which
Xxxxxxx has received during the course of the Relationship, Xxxxxxx also agrees
that the Company would be irreparably harmed by any violation or threatened
violation of this Agreement and that, therefore, the Company shall be entitled
to an injunction prohibiting Xxxxxxx from any violation or threatened violation
of this Agreement, in addition to any other relief, including monetary damages,
to which the Company may be entitled. The obligations described in this section
shall continue in effect after the payment of the sums described herein.
Successors.
This Agreement shall be binding upon the Company and Xxxxxxx and upon their
heirs, administrators, representatives, executors, successors and assigns.
Arbitration.
Any dispute regarding any aspect of this Agreement or any act which would
violate any provision in this Agreement shall be submitted to arbitration in Los
Angeles County, California before a sole arbitrator (the "Arbitrator") selected
from the American Arbitration Association ("AAA"), and shall be conducted in
accordance with the AAA's then in effect dispute resolution rules and the
provisions of California Code of Civil Procedure Section 1280 et seq. as the
exclusive remedy of such dispute. Judgment on any award rendered by such
arbitrator may be entered in any court having proper jurisdiction.
Should either party institute any legal action or administrative proceeding with
respect to any claim waived by this Agreement or pursue any dispute or matter
covered by this section by any method other than said arbitration (other than
any action for injunction within the scope of Section 10.2), the other party
shall be entitled to recover all damages, costs, expenses and attorneys' fees
incurred as a result of such action.
Xxxxxxx'x Voting Securities
13.1 Xxxxxxx agrees that during the 12 month period commencing with
the date of this Agreement and ending on January 31, 2002, Xxxxxxx shall vote or
cause to be voted all of the Voting Securities beneficially owned by Xxxxxxx in
favor of the following proposals with respect to which the Board of Directors
has unanimously recommended such approval: (i) all nominees for election to the
Board of Directors presented by the Company to the stockholders for a vote; (ii)
any amendments to or modifications of existing stock incentive plans and
approvals of new stock incentive plans presented by the Company to the
stockholders for a vote; and (iii) any proposal presented by the Company to the
stockholders for a vote which the Board of Directors determines in good faith is
reasonably necessary to effect a financing or strategic transaction which the
Board of Directors has determined in good faith to be in the best interests of
the Company.
Severability and Governing Law.
Should any of the provisions in this Agreement be declared or be determined to
be illegal or invalid, all remaining parts, terms or provisions shall remain in
full force and effect, and the illegal or invalid part, term or provision shall
be deemed not to be a part of this Agreement.
This Agreement is made and entered into in the State of California and shall in
all respects be interpreted, enforced and governed under the laws of California.
Proper Construction
The language of all parts of this Agreement shall in all cases be construed as a
whole according to its fair meaning and not strictly for or against any of the
parties.
The section headings used in this Agreement are intended solely for convenience
of reference and shall not in any manner amplify, limit, modify or otherwise be
used in the interpretation of any of the provisions hereof.
Entire Agreement.
This Agreement and the stock option agreements evidencing the Vested
Options are the entire agreements between the parties and, except as noted
herein, this Agreement supersedes any and all prior agreements or understandings
between the parties pertaining to its subject matter.
Authority to Execute.
Each of the persons and entities executing this Agreement represents and
warrants that he or she has the full power and authority to do so and that all
necessary resolutions and authorizations have been obtained.
Counterparts.
This Agreement may be executed by facsimile and in one or more
counterparts, each of which, when so executed, shall be deemed to be an original
provided that the parties execute the originals of the Agreement. Such
counterparts shall together constitute and be one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have approved and executed this
Agreement on the date set forth opposite their respective signatures.
DATED: 1/31/01 /s/ Xxxxx Xxxxxxx
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Xxxxx Xxxxxxx
APPROVED AS TO FORM AND
CONTENT:
United Leisure Corporation
DATED: 1/31/01 /s/ Xxxxx Xxxxxxx
----------------------------
By: Xxxxx Xxxxxxx
Its: President and Chief Executive
Officer
APPROVED AS TO FORM AND
CONTENT:
TROOP XXXXXXX PASICH REDDICK
& XXXXX, LLP
DATED: 1/31/01 /s/ Xxxxx Xxxxxx Xxxxxxxxxx
------------------------------------
By: Xxxxx Xxxxxx Xxxxxxxxxx
Attorneys for United Leisure
Corporation.
