Ergovision, Inc.
Xxx Xxxxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
Phone: 000-000-0000 Fax: 000-000-0000
As of December 31, 1999
Xx. Xxxxxx X. Xxxxxxxxx
00 Xxxxxxxxx Xxxxx
Xxxxxx, XX 00000
SEVERANCE AND CONSULTANCY AGREEMENT
Dear Xxxxxx:
This will constitute the terms of the severance and consultancy agreement
(the "Agreement") between Xxxxxx X. Xxxxxxxxx (hereinafter "Xxxxxxxxx") and
Ergovision, Inc. (hereinafter "Company") (each of the Company and Xxxxxxxxx
being referred to at times as a "Party"; and, together the Company and Xxxxxxxxx
being referred to as the "Parties").
1. Termination of Employment Agreement The Company and Xxxxxxxxx hereby
confirm that the Employment Agreement, dated July 1, 1998 (the "Employment
Agreement") and Xxxxxxxxx'x employment by the Company was terminated as of
December 31, 1998, and except for the obligations of the Parties under this
Agreement and under Sections 8 and 10 of the Employment Agreement, neither party
has any rights or obligations as against the other under the Employment
Agreement. The parties have entered into the Mutual General Release in the form
attached as Exhibit A hereto. Xxxxxxxxx hereby confirms his resignation as of
December 28, 1998, with the Company's consent, as Chairman of the Board, Chief
Executive Officer, Director, Officer and employee of the Company.
2. Payment under Employment Agreement. Xxxxxxxxx shall receive as full
consideration of the Company's obligations under the Employment Agreement
severance compensation in the amount of $75,000 under the following terms and
conditions:
(a) The $75,000 shall be deferred until the Company raises an
aggregate of $1.50 million, in current financing (includeing the $362,500
already raised), or a future financing, at which time the balance due would be
paid as follows: $15,000 when funding raised (within 5 business days) and
balance due in six equal payments of $10,000, with the first payment due on the
15th day of the month following the raising of the money, or
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(b) If the $1.50 million is not raised by the Company by December
31, 1999 then the Company shall pay down the amount of $75,000 in 24 equal
installments of $3,125 per month beginning on January 15, 2000. If during the
payout period the $1.50 million funding is completed, then the formula in
Section 2(a) above shall be used for the balance in lieu of the payout program
covering the 24 months.
3. Consultation Arrangement. The parties confirm that Xxxxxxxxx has been
retained by the Company for a fourteen (14) month period commencing as of
December 31, 1998 and terminating February 29, 2000. Xxxxxxxxx agrees to and
shall provide consulting services for the Company of five (5) business days per
month, on days and times mutually agreed to monthly in advance between the
Parties. In connsideration of such services, the Company agrees to pay and
Xxxxxxxxx accepts as full and complete compensation for these services the
amount of $5,000 per month for a twelve (12) month period of such consultancy,
payable on the 15th day of each month commencing March 15, 1999 and ending
February 15, 2000.
4. Share Restrictions. Xxxxxx Xxxxxxxxx shall retain free and clear of any
claims of the Company, and the Company shall remove any restrictions for the
transfer and sale, of the 50,000 shares of Company's Common Stock owned by
Xxxxxxxxx at such time as permitted by Rule 144 under the Securities Act of
1933.
5. Shares Covered By Options. Xxxxxxxxx shall continue to retain 50,000
options ("Options") previously granted on July 1, 1998 under the Company's 1998
Non-Incentive Stock Option Plan, and said Options shall remain exercisable until
March 31, 2,000, and will automatically expire on that date to the extent not
previously exercised. All stock options granted to Xxxxxxxxx by the Company
under the 1997 Stock Option Plan on February 1, 1998 are terminated effective
December 31, 1998, and the balance of the Stock Options granted under the 1998
Non-Incentive Stock Option Plan on July 1, 1998 are terminated, effective as of
December 31, 1998.
6. Expenses. Xxxxxxxxx shall be entitled to reimbursement from the Company
for all "out-of-pocket" expenses incurred (a) in the course of his employment
with the Company prior to December 31, 1998 up to an aggregate amount of $1,200,
provided that reasonably sufficient documentation substantiating such expenses
is provided to the Company and (b) in connection with the consulting services
provided under this Agreement. Any out-
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of-pocket expenses pursuant to (b) above exceeding $100.00 will require prior
written approval from the Company.
7. Inventions. Xxxxxxxxx agrees to disclose and assign to the Company all
"inventions" (meaning formulae, processes, know-how, data analyses or
inventions, whether patentable or not) made or conceived, first reduced to
practice or learned by or as a result of Xxxxxxxxx'x services to the Company,
which inventions shall be the sole and exclusive property of the Company for the
consideration as hereinabove defined.
8. Agreement. Xxxxxxxxx has delivered to the Company the waiver in the
form previously obtained from other investors from Xxxxxx Xxxxxx, Xxxxxx Xxxxxxx
and Xxxxxx Xxxxxxxx in the Company's August 10, 1998 Offering Memorandum.
9. Covenants. The Company's obligation to make the payments pursuant to
paragraphs 2 and 3 hereof shall be a covenant of the Company but not a condition
to the effectiveness of this Agreement. In the event that the Company fails to
make timely payment, the Mutual General Releases and other provisions of this
Agreement shall remain valid and effective, and there shall be no right of
recission of the Mutual General Release or this Agreement nor any claim for
failure of consideration. Xxxxxxxxx'x sole and exclusive remedy hereunder for
nonpaymet shall be to recover such payments, any interest allowed by law,
attorneys' fees and expenses.
10. Independent Contractor. Xxxxxxxxx'x relationship with Company shall be
that of an independent contractor and not that of an employee. Xxxxxxxxx will
not be eligible for any employee benefits, nor will Company make deductions from
Xxxxxxxxx'x fees. Xxxxxxxxx will be responsible for the payment of all income,
social security and other taxes due on all payments made to Xxxxxxxxx under this
Agreement. Xxxxxxxxx agrees to indemnify and hold the Company harmless from any
liability for, or assessment of, such taxes. Xxxxxxxxx shall have no authority
to enter into contracts which bind Company or create obligations on the part of
Company without the prior written authorization of Company.
11. Confidentiality and Non-Disclosure. Xxxxxxxxx agrees that any and all
confidential information, including know-how and trade secrets, that may be
imparted to him by the Company, or third parties to the Company, in the course
of his prior employment and/or this consultation, shall be maintained
confidential and secret, and Xxxxxxxxx agrees not to use or disclose the same to
others except with the prior written consent and approval of the Company. Within
5 days after termination of this Agreement, Xxxxxxxxx shall return all documents
to the Company, obtained during the term of this Agreement, by a carrier
selected by the Company.
12. Revocation Period. Xxxxxxxxx has a period of twenty-one (21) days from
the date on which a copy of this Agreement has been delivered to Xxxxxxxxx to
consider
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whether to sign it. In addition, in the event that Xxxxxxxxx elects to sign and
return to the Company a copy of this Agreement, Xxxxxxxxx has a period of seven
(7) days (the "Revocation Period") following the date of such return to the
Company of a signed copy, to revoke this Agreement, which revocation must be in
writing and delivered to the Company within the Revocation Period. This
Agreement will not be effective or enforceable until the expiration of the
Revocation Period.
13. Further Cooperation. Each of the Parties shall execute such further
documents and do such further acts as may reasonably be requested by the other
to confirm the agreements and transactions contemplated hereby.
14. Counterparts and Facsimile Signatures. This Agreement may be signed in
counterparts and shall become effective as if executed in a single, complete
documents as of the date hereof upon its execution by both Parties. Facsimile
signatures of the undersigned Parties will have the same force and effect as
original signatures.
15. Severability. If any provision of this Agreement or the application of
it shall be determined to be invalid or unenforceable to any extent, the
remainder of this Agreement and the application of such provisions shall be not
be affected and shall be enforced to the greatest extent permitted by law.
16. Construction. The Parties agree that the terms and conditions of this
Agreement are the result of negotiations between the Parties and/or their
counsel, and that this Agreement shall not be construed in favor of or against
either Party by reason of the extent to which either Party or its counsel
participated in the drafting of this Agreement.
17. Notices. Except as otherwise provided in the Options, any notices,
demands, or other communications required or permitted hereunder shall be in
writing and shall be (i) sent by telecopy (and confirmed by one of the following
three methods), (ii) hand delivered, (iii) sent by Federal Express, Express Mail
or similar overnight delivery service for priority next business day delivery,
or (iv) sent by certified or registered mail, return receipt requested, in any
case addressed as follows (or to such other address as a party shall have
designated by notice given to the other party pursuant hereto), and shall be
deemed given (i) when received at the recipient's telecopy number if received
before 5:00 p.m. or otherwise at 9:00 a.m. on the next business day, (ii) when
delivered if hand delivered, (iii) the next business day after being sent if
given by Federal Express, Express Mail or other overnight delivery service or
(iv) the date received if sent by certified or registered mail, return receipt
requested:
(a) if to the Company:
Ergovision, Inc.
Xxx Xxxxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
Phone: 000-000-0000
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Fax: 000-000-0000
Attn: Xxxx X. Xxxxx, President
(b) if to Xxxxxxxxx:
Xxxxxx X. Xxxxxxxxx
00 Xxxxxxxx Xxxxx
Xxxxxx, XX 00000
Phone: 000-000-0000
Fax: 000-000-0000 x/x Xxxxxxx X. Xxxxx, Xxx.
00. Governing Law. This Agreement shall be governed by the laws of the
State of New York, without giving effect to principles of conflicts or choice of
law.
19. Arbitration. Any controversy or claim arising out of or relating to
this Agreement shall be settled by binding arbitration in New York, New York
pursuant to the Commercial arbitration Rules then in effect of the American
Aritration Association ("AAA"). There shall be three (3) arbitrators, one of
whom shall be selected by the Party seeking to initiate the arbitration, one by
the other Party and the third by the two arbitrators so selected. The
arbitration award shall be given in writing and shall be final and binding on
the Parties with respect to the subject matter in controversy and judgment
thereof may be entered in any court having jurisdiction over the matter. The
Parties shall keep confidential the arbitration proceedings and terms of any
arbitration award, except as may otherwise be required by law. Each party shall
bear its own legal fees and other costs related to the arbitration, except that
the arbitrators shall determine who shall bear the costs of the AAA and
arbitrators. The arbitrators may determine arbitrability but may not award
punitive damages or limit, expand or otherwise modify the terms of this
Agreement. The Party ultimately prevailing in any such arbitration proceeding
shall be entitled to be awarded and receive its costs and reasonable attorney's
fees incurred in connection therewith and the enforcement thereof.
20. Integration Clause. This Agreement and the Mutual General Release
contains the entire understanding between the Parties with respect to, and
contains all terms and conditions pertaining to, the compromise and settlement
between the Parties. No express or implied warranties, covenants or
representation have been made concerning the subject matter of this Agreement
unless expressly stated herein. Any prior written or oral negotiations not
contained in this Agreement are of no force or effect whatsoever. In executing
this Agreement, the Parties have not and do not rely on any statements,
inducements, promises or representations made by the other Party or their
agents, representatives or attorneys with regard to the subject matter, basis or
effect of this Agreement, except those specifically set forth in this Agreement.
21. Assignment. This Agreement shall be binding upon the parties hereto
and upon their respective administrators, executors, legal representatives,
successors and
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permitted assigns, which will include (without limitation) any successor to all
or substantially all of the Company's assets or any acquirer of a majority of
the voting power of the Company's capital stock. Xxxxxxxxx may not assign his
obligations, or compensation to be received, under this Agreement, either in
whole or in part, without the prior written consent of the Company.
22. Non-Solicitation of Employees. Xxxxxxxxx agrees that during the term
of this Agreement and for a period of one (1) year thereafter, Xxxxxxxxx will
not solicit or hire or attempt to solicit or hire any employees of Company or
affiliates of Company either for Xxxxxxxxx or for any other person or entity,
nor use any partners, employees or agents of Xxxxxxxxx for such purpose.
23. Modification and Discharge. This Agreement may not be changed,
altered, or modified except in writing signed by the Parties. This Agreement may
not be discharged, except by performance in accordance with its terms or by
writing signed by the Parties.
24. Representation by Counsel. Xxxxxxxxx hereby warrants and represents
that he has retained and been represented by independent legal counsel in
connection with the negotiation and execution of this Agreement and the Mutual
General Release.
25. Captions and Interpretations. Section titles or captions contained
herein are inserted as a matter of convenience and for reference, and in no way
define, limit, extend or describe the scope of this Agreement or any provision
hereof.
Authority to enter into this Agreement has been approved by the Board of
Directors of the Company and is final and binding upon the Parties. Xxxxxxxxx
shall have returned to him all of his personal property.
The Parties have executed this Agreement as of the date first above written.
ERGOVISION, INC.
/s/ Xxxxxx X. Xxxxxxxxx /s/ Xxxx X. Xxxxx
--------------------------- ---------------------------
Xxxxxx X. Xxxxxxxxx Xxxx X. Xxxxx
President
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MUTUAL
GENERAL RELEASE
Ergovision, Inc. (the "Company"), and Xxxxxx X. Xxxxxxxxx,
sometimes collectively referred to herein as the "parties," hereby enter into
this Mutual Release Agreement ("Release") as of December 31, 1998.
As a material inducement to the Company to enter into this Release
and in consideration for the benefits received hereunder, Xxxxxx X. Xxxxxxxxx
for himself, his heirs, executors, administrators, successors and assigns,
hereby fully releases, discharges and acquits the Company, its affiliated and
related entities, parent corporations, subsidiary corporations, present and
former officers and directors, employees, agents, attorneys, representatives,
shareholders, successors and assigns (collectively "Company Releasees"), from
any and all claims, charges, demands, sums of money, actions, rights, causes of
action, obligations and liabilities of any kind or nature whatsoever, at law or
in equity, which he may have, had, claim to have had, now have, or claim to
have, which are or may be based upon facts, acts, conduct, representations,
omissions, contracts, claims, events, causes, matters or things of any
conceivable kind or character, whether known or unknown, existing or occurring
at any time on or before the date of this Release relating to the Company,
including but not limited to, (a) any claims arising under Title VII of the
Civil Rights Act of 1964, the Americans with Disabilities Act, the Equal Pay
Act, the New York State and City Human Rights Laws and the Rehabilitation Act of
1973, any federal, state or other governmental statutes, ordinances or
regulations, (b) any defamation, fraud, negligence or other tort or common law
claims which he may have, including, without limitation, any claims arising
under any implied or express contracts or agreements, (c) any claims for
adjusted compensation, bonus, severance or vacation pay or any other form of
compensation or benefit relating to Xxxxxxxxx'x employment and the termination
thereof, (d) any claims for intentional torts, emotional distress and pain and
suffering and (e) any claims for compensatory and punitive damages. Without
limiting the generality of the foregoing, specifically included in the foregoing
release are any and all claims of Xxxxxxxx under or pursuant to the Age
Discrimination in Employment Act of 1967, as amended.
As a material inducement to Xxxxxxxxx to enter into this Release and
in consideration for the benefits received hereunder, the Company, as well as
its affiliated and related entities, parent corporations, subsidiary
corporations, present and former officers and directors, and successors and
assigns, hereby fully releases, discharges and acquits Xxxxxxxxx from any and
all claims, charges, demands, sums of money, actions, rights, causes of action,
obligations and liabilities of any kind or nature whatsoever, at law or in
equity, which the Company may have, had, claim to have had, now have, or claim
to have, which are or may be based upon facts, acts, conduct, representations,
omissions, contracts, claims, events, causes, matters or things of any
conceivable kind or character, whether known or unknown, existing or occurring
at any time on or before the date of this Release relating to the Company,
including but not limited to any claims arising under any federal, state or
other governmental statutes, ordinances or regulations, any defamation, fraud,
negligence or other tort or common law claims which the Company may have,
including, without limitation, any claims arising under any implied or express
contracts or agreements, and any claims for compensatory and punitive damages.
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As a material inducement to the parties to enter into this Release
and in consideration for the benefits received hereunder the parties on behalf
of themselves and their respective heirs, assigns and legal representatives,
hereby covenant and represent that neither of them has instituted, and will not
institute, any complaints, claims, charges or lawsuits, with any governmental
agency or any court, against the other by reason of any claim, present or
future, known or unknown, arising from or related in any way to Xxxxxxxxx'x
employment with the Company or any of its affiliates or the termination of such
employment, or any relationship, association, or transaction to date between the
parties hereto or any of their predecessors or their respective agents,
employees or officers. This covenant, as well as the Release provided herein,
shall not apply to actions for breach of the Severance and Consultancy Agreement
dated December 31, 1998 contemplating this Release and to which a form of the
Release is attached as an exhibit.
As a material inducement to the Company to enter into this Release
and in consideration for the benefits received hereunder, Xxxxxxxxx agrees not
to disparage, or make any disparaging remarks or send any disparaging
communications concerning, the Company, its reputation, its business, and its
officers, directors and employees to any person. The Company similarly agrees
not to disparage, or make any disparaging remark or send any disparaging
communication concerning Xxxxxxxxx, or his reputation, his business expertise
and his job performance at the Company to any person.
ERGOVISION, INC.
By: /s/ Xxxx X. Xxxxx
----------------------------------
Name: Xxxx X. Xxxxx
Title: President
/s/ Xxxxxx X. Xxxxxxxxx
-----------------------------------
Xxxxxx X. Xxxxxxxxx
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