EXHIBIT 10.18
SETTLEMENT AGREEMENT AND RELEASE
THIS SETTLEMENT AGREEMENT AND RELEASE (hereafter "Agreement") is made and
entered into as of November 20, 1998 by and between Xxxx Xxxxxxxxx (referred
to as "Employee") and IMGIS, Inc., a California corporation doing business as
AdForce (referred to as the "Company").
W I T N E S S E T H:
WHEREAS, Employee is an employee and shareholder of the Company;
WHEREAS, Employee and the Company desire to settle fully and finally all
differences between them;
NOW, THEREFORE, in consideration of the premises and mutual promises
herein contained and in consideration of the payment by the Company to
Employee of the Payment, it is agreed as follows:
1. Employee and the Company agree that effective as of the date of this
Agreement the Company's employment of Employee is terminated. Employee
resigns effective as of the date of this Agreement from any and all offices
as an officer of the Company, and the Company accepts such resignation.
2. Employee acknowledges that on or before the date of Employee's
execution hereof, the Company provided Employee a final paycheck for all
wages, salary, bonuses, reimbursable expenses, accrued vacation and any
similar payments due to Employee from Company as of the date of this
Agreement. By signing below, Employee acknowledges that Company does not owe
Employee any other amounts except as provided in Section 3 below.
3. Company agrees that Employee is not being terminated for cause, so
the Company shall pay to Employee, in lieu of the amounts otherwise payable
to Employee under the August 1998 Agreement (defined below), $225,000.00 (the
"Severance Payment"), which amount shall be paid promptly following the
execution and delivery by Employee and Company of this Agreement. Further,
all outstanding shares of Common Stock of the Company held by Employee on the
date hereof shall be deemed to be fully vested, and all options to purchase
Common Stock of the Company granted to Employee prior to the date hereof
shall terminate in full and not be exerciseable effective as of the date of
this Agreement.
4. Employee represents and warrants to Company that Employee has
returned to Company all real and/or intangible property or data of Company of
any type whatsoever, including but not limited to any planning data,
personnel data, compensation data, computer software and any and all
documents in hardcopy or electronic format, that has been in Employee's
possession or control.
5. Employee acknowledges that Employee is bound by the Employee
Proprietary Information and Inventions Agreement described in Section 7 below
and that, as a result of Employee's employment with Company, Employee has had
access to Company's Proprietary Information (as defined in the Employee
Proprietary Information and Inventions Agreement), that Employee will hold
all Proprietary Information in strictest confidence and that Employee will
not make use of such Proprietary Information on behalf of anyone. Employee
further confirms that Employee has delivered to
Company all documents and data, in either hardcopy format or any form of
electronic format or any format that may be read visually, of any nature
containing or pertaining to such Proprietary Information and that Employee
has not taken with Employee any such documents or data or any reproduction
thereof.
6. Except for the matters, rights and obligations specified in paragraph
7 below, the Company and Employee, for themselves and on behalf of (as
applicable) their respective past, present and future directors, officers,
shareholders, agents, employees, attorneys, subsidiaries, spouse, heirs,
estate successors and assigns, hereby forever release and discharge each
other and each of their respective past, present and future directors,
officers, shareholders, agents, employees, attorneys, subsidiaries, spouse,
heirs, estate successors and assigns from all past, present and future
claims, demands, obligations and causes of action of any nature whatsoever,
whether in tort, contrast or any other theory of recovery in law or equity,
whether for compensatory or punitive damages, equitable relief or otherwise,
and whether now know or unknown, suspected or unsuspected, which are based
upon or arise out of or in connection with any matter, cause or thing
existing at any time prior to the date hereof or anything done, omitted or
suffered to be done or omitted at any time prior to the date hereof.
7. Notwithstanding the provisions of Section 6 of this Agreement,
however, any claims, demands, obligations and causes of action arising from
any of the following are not released by this Agreement:
a. Assignment Agreement, dated April 26, 1996, between Company,
Employee, Xxxx Xxxxxxxxx and Xxxx Xxxxxxxxx.
b. Employment and Restriction Agreement, dated as of April 26, 1996,
between Company and Employee.
c. Employee Proprietary Information and Inventions Agreement, dated
November 25, 1996, between Company and Employee.
d. Letter of offer of employment, dated November 26, 1996, from
Company to Employee, as amended as of July 8, 1997.
e. Stock Repurchase Agreement, dated as of December 5, 1996, between
Company and Employee.
f. Restricted Common Stock Agreement, dated as of December 5, 1996,
between Company and Employee.
g. Amended and Restated First Refusal Agreement, dated as of July
15, 1998, among Company, Employee and certain other shareholders of Company.
h. Amended and Restated Founders' Co-Sale Agreement, dated as of
July 15, 1998, among Company, Employee and certain other shareholders of
Company.
i. Amended and Restated Voting Agreement, dated as of July 15, 1998,
among Company, Employee and certain other shareholders of Company.
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j. Letter, dated August 12, 1998, from Company to Employee and the
related letter, dated August 18, 1998, from Employee to Company (the "AUGUST
1998 AGREEMENT").
k. Each agreement, proxy, certificate and other document delivered
in connection with each agreement and letter described above in this
paragraph 7.
8. Employee and Company enter into this Agreement to resolve disputed
matters. This Agreement shall not in any way be construed as an admission or
concession by any party that such party acted wrongfully with respect to the
other party or any other person. Rather, the parties have entered into this
settlement to purchase peace, and to prevent litigation based upon disputed
claims between them.
9. Employee and Company agree that neither will disparage the other to
third parties.
10. Employee and the Company will promptly hereafter issue a joint press
release respecting the settlement hereby of the differences between Employee
and the Company. Such press release shall not be issued until the Company and
Employee have agreed to the content thereof, which agreement shall not be
unreasonably withheld.
11. Employee and Company each covenants and agrees never, individually or
with any person or entity, to commence, prosecute or cause or permit to be
commenced or prosecuted against any party released by him or it under this
Agreement, any action or other proceeding based upon any claim, demand, cause
of action, obligation, damage or liability which is the subject of Section 6
of this Agreement, and will not aid, assist or encourage any other person or
entity to pursue a claim of any kind against any party released by him or it
under Section 6 of this Agreement, except as required by law.
12. It is agreed that the benefits contained in this Agreement which flow
to each party are subject to termination, reduction or cancellation in the
event that the other party takes any action or engages in any conduct in
violation of this Agreement.
13. The provisions of this Agreement are severable, and if any part of it
is found to be unenforceable, the other paragraphs shall remain fully valid
and enforceable. This Agreement shall survive the termination of any
arrangements contained herein.
14. Each party represents and warrants that such party has not sold,
assigned, transferred, conveyed or otherwise disposed of any claim, demand,
obligation or cause of action relating to any matter covered by Section 6 of
this Agreement, and agrees to indemnify and hold harmless each party it
releases hereunder from any claim, demand, obligation or cause of action
which may be based upon or which may arise out of or in connection with any
such sale, assignment, transfer, conveyance or disposal.
15. Each party expressly waives any right or benefit available to such
party in any capacity under the provisions of Section 1542 of the Civil Code
of California.
"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,
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which if known by item must have materially affected his settlement with
the debtor."
16. Employee understands that various federal, state and local laws
prohibit age, sex, race, disability, benefits, pension, health and other
forms of discrimination and that these laws can be enforced through the U.S.
Equal Employment Opportunity Commission, California state and local human
rights agencies and federal and state courts. Employee has decided
voluntarily to enter into this Agreement, and waives the right to bring any
claim or recover any amounts to which he may have been entitled under such
laws.
17. Each party represents that neither such party nor anyone acting on
such party's behalf has fled any claim, action, suit, complaint or proceeding
against the other party in any agency, court or other forum or tribunal.
18. Each party is advised to consult with an attorney prior to executing
this Agreement. Each party has retained an attorney and represents and agrees
that such party fully understands such party's right to discuss all aspects
of this Agreement with such party's private attorney, that to the extent, if
any, such party desires, such party has availed such party of this right,
that such party has carefully read and fully understands all of the
provisions of this Agreement, and that such party is voluntarily entering
into this Agreement.
19. Employee agrees that, during the period beginning on the date of this
Agreement and ending two (2) years thereafter, Employee shall not, directly
or indirectly, either for himself or for any other person or entity, directly
or indirectly, solicit, induce or attempt to induce any employee or
consultant of the Company to terminate his, her or its employment or
consulting relationship with the Company.
20. In order to preserve, protect, secure and effectuate the full and
final settlement by the parties hereto of all their differences, Employee
hereby covenants and agrees with the Company that, at any regular or special
meeting of the shareholders of the Company, however called, and in any action
taken by written consent of the shareholders of the Company without a
meeting, Employee shall affirmatively vote (i) all the shares of capital
stock of Company owned by Employee as of the date hereof and (ii) any and all
other shares of capital stock of Company (or any company with which Company
merges or consolidates at any time after the date hereof) which Employee may
acquire after the date hereof (collectively, the "SUBJECT SHARES") in favor
of each and every action, agreement and transaction approved by a majority
of the Company's Board of Directors and submitted by the Company's Board of
Directors to the shareholders of the Company for their approval. The
preceding provisions of this Section shall termite upon the earlier of (i)
the tenth anniversary of the date of this Agreement or (ii) the closing of a
public offering pursuant to an effective registration statement filed under
the Securities Act of 1933, as amended, covering the offer and sale for the
account of the Company of the Company's Common Stock. The provisions of this
Section shall be binding upon the heirs, successors and assigns of Employee
(including any transferee of any of the Subject Shares).
Contemporaneously herewith, Employee will execute and deliver herewith to
the Company an irrevocable Proxy in the form attached hereto with respect to
all present and future shares of capital stock of the Company, which is
coupled with an interest in all such shares, and which shall be irrevocable
to the fullest extent permitted by law.
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21. This Agreement sets forth the entire agreement between the parties
hereto, and fully supersedes any and all written or oral agreement or
understandings between the parties hereto, or any corporate policies,
practices or procedures pertaining to the subject matter hereof, in each case
existing prior to the last date of execution hereof as set forth below. Any
amendments to this Agreement may only be made in writing, signed by both
parties.
22. Should it become necessary for either Employee or the Company to
commence litigation to enforce the terms of this Agreement, the prevailing
party in such litigation shall be entitled to recover from the other party
his or its reasonable costs of suit, including attorneys' fees.
23. This document may be executed in duplicate originals, each of which
is equally admissible in evidence, and each original shall fully bind each
party who executed it.
24. This Agreement is governed by, and is to be interpreted according to,
the laws of the State of California. If any term of this Agreement or
application thereof shall be invalid or unenforceable, the remainder of the
Agreement shall remain in full force and effect.
25. The parties hereto agree that for any litigation concerning or
arising from this Agreement, venue is proper in Santa Xxxxx County,
California and each party hereby consents to jurisdiction there.
26. Employee and a representative of the Company have read this Agreement
and fully understand and agree to it.
27. Employee is not authorized to enter, and without the explicit prior
written consent of the Company's Chief Executive Officer will not gain or
attempt to gain entrance, into the Company's computer, information or data
systems or center. Employee is not authorized to enter, and without the
explicit prior written consent of the Company's Chief Executive Officer will
not gain or attempt to gain entrance, into the Company's premises.
28. Contemporaneously herewith, Company will execute and deliver herewith
to Employee a Waiver of Right of First Refusal and Co-Sale in the form
attached hereto, and the Company will use its good faith diligent efforts to
have such Waiver signed by such other shareholders of the Company as is
necessary to permit the transactions contemplated thereby.
PLEASE READ CAREFULLY. THIS AGREEMENT INCLUDES A RELEASE OF ALL KNOWN AND
UNKNOWN CLAIMS.
/s/ Xxxx Xxxxxxxxx
Imgis, Inc., a California corporation -----------------------------------
doing business as AdForce Xxxx Xxxxxxxxx
By: /s/ Xxxxxxx X. Xxxxxx
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Name: Xxxxxxx X. Xxxxxx
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Title: Chairman & CEO
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Date Executed: 12 Jan 99 Date Executed: 1-13-99
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IRREVOCABLE PROXY
The undersigned shareholder of Imgis, Inc., a California corporation
("COMPANY"), hereby irrevocably (to the fullest extent permitted by law)
appoints and constitutes the then-current Chief Executive Officer of the
Company, and if there should not be a then-current Chief Executive Officer of
the Company, then the then-current Chief Financial Officer of the Company,
and each of them, the attorneys and proxies of the undersigned with full
power of substitution and resubstitution, to the full extent of the
undersigned's rights with respect to (i) all the shares of capital stock of
Company owned by the undersigned as of the date of this proxy and (ii) any
and all other shares of capital stock of Company (or any company with which
the Company merges or consolidates at any time after the date hereof) which
the undersigned may acquire at any time after the date hereof. (The shares of
the capital stock of Company referred to in clauses (i) and (ii) of the
immediately preceding sentence are collectively referred to herein as the
"SHARES.") Upon the execution hereof, all prior proxies given by the
undersigned with respect to any of the Shares are hereby revoked, and no
subsequent proxies will be given with respect to any of the Shares. This
proxy is irrevocable, is coupled with an interest in the Shares and is
granted in connection with the Settlement Agreement and Release, dated as of
November 20, 1998, between the Company and the undersigned (the "AGREEMENT").
The attorneys and proxies named above shall be empowered, and may exercise
this proxy, to vote all of the Shares at any time and from time to time at
any regular or special meeting of the shareholders of the Company, however
called, and in any action by written consent of shareholders of the Company
without a meeting in favor of each and every action, agreement and
transaction approved by at least a majority of the Company's Board of
Directors and submitted by the Company's Board of Directors to the
shareholders of the Company for their approval.
This proxy shall terminate upon the earlier of (i) November 20, 2008 or (ii)
the closing of a public offering pursuant to an effective registration
statement filed under the Securities Act of 1933, as amended, covering the
offer and sale for the account of the Company of the Company's Common Stock.
This proxy shall be binding upon the heirs, successors and assigns of the
undersigned (including any transferee of any of the Shares). This proxy shall
not otherwise affect the sale, transfer or other disposition by the
undersigned of any of the Shares.
Dated: November 20, 1998 /s/ Xxxx Xxxxxxxxx
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Xxxx Xxxxxxxxx
IMGIS, INC.
WAIVER OF RIGHT OF FIRST REFUSAL AND CO-SALE
This waiver is entered into by and among Imgis, Inc., a California
corporation doing business as AdForce (the "COMPANY"), and the undersigned
"Investors" and "Founders" as defined in that certain Amended and Restated
First Refusal Agreement, dated as of July 15, 1998, among the Company and
certain other individuals and entities (the "FIRST REFUSAL AGREEMENT") and/or
as separately defined in that certain Amended and Restated Founders' Co-Sale
Agreement, dated as of July 15, 1998, among the Company and certain other
individuals and entities (the "CO-SALE AGREEMENT"). The terms "Investor" and
"Founder" as used herein shall have the respective meanings ascribed thereto
in the First Refusal Agreement and Co-Sale Agreement, as applicable.
The undersigned Investors, Founders and Company hereby, effective as of the
date hereof, on behalf of themselves and all Investors and Founders and the
Company, and any successors or assignees thereof, waives, and amends the
First Refusal Agreement and the Co-Sale Agreement to waive, any notice
required, rights of first refusal, rights to purchase, Co-sale rights, rights
of participation or any other rights under Section 1 of the Investors
Agreement and Section 1 of the Co-Sale Agreement with respect to:
(1) the sale by Xxxx Xxxxxxxxx ("XXXXXXXXX") of up to an aggregate of 100,000
shares of the Company's Common Stock ("COMMON STOCK") held by Steelberg
on the date hereof in one or more transactions, at any price to any
person or entity so long as (i) such person or entity is not now or at
the time of such sale a competitor of the Company or an affiliate of
such a competitor (a "NON-COMPETITOR"), and (ii) such Non-Competitor
agrees in a writing delivered to the Company (x) that the First Refusal
Agreement (but not the Co-Sale Agreement) will continue to apply to any
resale or other transfer of the Common Stock by such Non-Competitor and
(y) to be bound by the provisions of Section 6 of the Restricted Common
Stock Agreement, dated as of December 5, 1996, between the Company and
Steelberg (the "RESTRICTED COMMON STOCK AGREEMENT");
(2) the grant by Steelberg of a security interest in up to an aggregate of
919,620 shares of Common Stock held by Steelberg on the date hereof as
collateral for a loan by a Non-Competitor to Steelberg so long as (i)
such Non-Competitor has full recourse against Steelberg for repayment in
full of such loan (and the transfer of such shares upon exercise of the
rights under such security interest) and (ii) such Non-competitor agrees
in a writing delivered to the Company (x) that the First Refusal
Agreement (but not the Co-Sale Agreement) will continue to apply to any
resale or other transfer of the Common Stock by such Non-Competitor and
(y) to be bound by the provisions of Section 6 of the Restricted Common
Stock Agreement; and
(3) (A) the grant by Steelberg of a security interest in up to an aggregate
of 919,620 shares of Common Stock held by Steelberg on the date hereof
as collateral for a loan by a Non-Competitor to Steelberg, whether or
not such loan is full recourse, so long as (i) the principal amount of
that loan divided by the number of shares of Common Stock subject to
such security interest is equal to or less than the fair market value
per share of Common Stock on the date that such security interest is
granted as determined in good faith by the Company's Board of Directors
(and the transfer of such shares upon exercise of the rights under such
security interest) and (ii) such Non-Competitor agrees in a writing
delivered to the Company (x) that the First Refusal Agreement (but not
the Co-Sale Agreement) will continue to apply to any resale or other
transfer of the Common Stock by such Non-Competitor and (y) to be bound
by the provisions of Section 6 of the Restricted Common Stock Agreement
and (B) in connection with such loan, the grant by Steelberg to such
Non-Competitor of an option to purchase up to a number of shares of
Common Stock held by Steelberg on the date hereof as is equal to the
principal amount of that loan divided by the exercise price per share of
such option
(and the transfer of such shares upon exercise of such option) so long
as such Non-Competitor agrees in a writing delivered to the Company (x)
that the First Refusal Agreement (but not the Co-Sale Agreement) will
continue to apply to any resale or other transfer of the Common Stock by
such Non-Competitor and (y) to be bound by the provisions of Section 6
of the Restricted Common Stock Agreement.
Whenever in this waiver there is a reference to a specific number of shares
of Common Stock, then, upon the occurrence of any subdivision, combination or
stock dividend of Common Stock, the specific number of shares so referenced
in this waiver shall automatically be proportionally adjusted to reflect the
effect on the outstanding shares of Common Stock by such subdivision,
combination or stock dividend. This waiver is given with respect to only the
matters set forth above, in this waiver and not with respect to any other
offer, sale, pledge, transfer or purchase of securities of the Company
respecting which the Company or any of the Investors may have rights under
Section 1 of the First Refusal Agreement and/or Section 1 of the Co-Sale
Agreement.
This waiver may be executed in two or more counterparts, each of which shall
be deemed an original, but all of which together should constitute one and
the same waiver.
Dated as of December 15, 1998
INVESTOR:
If an individual, please sign here: If a corporation, please sign here:
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Please PRINT Investor's Name Please PRINT Investor's Name
By:
------------------------------------- -----------------------------------
Please SIGN Investor's Name Name:
---------------------------------
Title:
--------------------------------
FOUNDER
Xxxx Xxxxxxxxx
-------------------------------------
Please PRINT Founder's Name
/s/ Xxxx Xxxxxxxxx
-------------------------------------
Please SIGN Founder's Name
Imgis, Inc., a California corporation
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxxx
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Title: Chairman
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(SIGNATURE PAGE TO
WAIVER OF RIGHT OF FIRST REFUSAL AND CO-SALE)
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