Exh. 10-b
SEPARATION AGREEMENT
This Agreement is made as of the 18th day of August, 2006 by and
between Headliners Entertainment Group, Inc., a Delaware corporation
having its principal place of business in Montclair, New Jersey, ("HLEG")
and Xxxxxxx Xxxxxxxxx, an individual residing in the State of New Jersey
("Xxxxxxxxx").
WHEREAS Xxxxxxxxx and HLEG entered into an Employment Agreement dated
March 7, 2006 (the "Employment Agreement"); and
WHEREAS, Xxxxxxxxx and HLEG have determined that it is in their mutual
best interests that the employment relationship between Xxxxxxxxx and HLEG
be terminated;
NOW THEREFORE, in consideration of the premises and mutual promises
herein contained, the parties agree as follows:
1. Termination of Employment and Resignation. The Employment Agreement
and Xxxxxxxxx'x employment with HLEG shall terminate effective on
September 1, 2006 (the "Termination Date"). Upon execution of this
Agreement, Xxxxxxxxx shall submit letters of resignation, effective
on the Termination Date, resigning from the Board of Directors and
as Chief Executive Officer and Chief Financial Officer of HLEG.
2. Consideration.
a. In lieu of all salary, severance payments, benefit
entitlements and amounts now owing or that would have been
owed in the future under the terms of the Employment Agreement
or for any reason whatsoever (except as specified herein),
HLEG agrees to pay $75,000 to Xxxxxxxxx. $25,000 will be
payable on the Termination Date, and the remainder in equal
monthly installments on the first of each of the next
twelvemonths. HLEG also agrees to continue at HLEG's expense
existing health and any disability or life insurance coverage
for Xxxxxxxxx for a period of one year from the Termination
Date, subject to HLEG's right to make changes in insurance
coverage applicable to all executives.
b. HLEG agrees that on the Termination Date it will transfer to
Xxxxxxxxx title to and possession of that collection of video
tapes known as the "Rascals Library," containing approximately
200 hours of live recordings of comedy shows.
c. HLEG hereby assigns to Xxxxxxxxx, as of the Termination Date,
all right and interest it may have in the automobile provided
for his use by HLEG's subsidiary.
3. Preferred Stock.
x. Xxxxxxxxx agrees to sell to Xxxxxxx Xxxxxxxxx ("Xxxxxxxxx")
all of the Series B Preferred Stock that Xxxxxxxxx owns for
its par value (the "Series B Stock"). The sale of the Series
B Stock shall take place upon the Termination Date. Xxxxxxxxx
shall deliver to Xxxxxxxxx certificates representing all of
the Series B Stock, duly endorsed for transfer or accompanied
by a duly executed stock power. Xxxxxxxxx shall tender
payment by personal check in the amount of Ten Dollars ($10.00).
x. Xxxxxxxxx represents to Xxxxxxxxx as follows: (i) that the
Series B Stock constitutes all of the issued and outstanding
shares of Series B Preferred Stock of the Company and that
such shares were validly issued and fully paid and are
nonassessable; (ii) that he owns the Series B Stock
beneficially and of record, and such shares are subject to no
claims, liens, pledges, security interests, encumbrances,
rights of first refusal, trusts, restrictions, adverse claims,
preferential arrangements or restrictions of any kind,
including, without limitation, any restriction on the use,
voting, transfer, receipt of income or other exercise of any
attributes of ownership, or any other rights of others of any
kind or nature, except for restrictions imposed by federal and
state securities laws; (iii) that the delivery of the stock
certificates for the Series B Stock to Xxxxxxxxx as
contemplated herein will vest good title to such Stock in
Xxxxxxxxx; and (iv) that he has the legal power and authority
to transfer the Series B Stock in the manner and for the
purpose set forth herein and will defend his title against the
claims of all persons whomsoever.
4. Releases.
a. Releases by HLEG
i. In consideration of the terms of this Agreement, and other
good and valuable consideration, the sufficiency of which is
hereby acknowledged, HLEG, on behalf of itself and its
subsidiaries, and its and their successors and assigns,
hereby releases and forever discharges Xxxxxxxxx from: (A)
all claims, actions, causes of action, suits, proceedings
and demands of whatsoever nature, character and kind
("Claims") which HLEG has had, now has or hereafter can,
shall or may have against Xxxxxxxxx as of the date hereof
(the "Release Date"); (B) all liabilities, contingent or
otherwise, dues, debts, sums of money and accounts of
whatsoever nature, character or kind which were, are now or
hereafter can, shall or may be owing by Xxxxxxxxx to HLEG as
of the Release Date; and (C) all undertakings, covenants and
obligations of whatsoever nature, character or kind, which
have been agreed to, made or assumed by Xxxxxxxxx as of the
Release Date in favor of HLEG arising in connection with or
as a result of Xxxxxxxxx having been an employee, officer,
or director of HLEG.
ii. This release does not apply to any rights or claims which
may arise under the section headed "Xxxxxxxxx'x
Representations, Acknowledgments and Covenants" in this
Agreement. This release also does not apply to any rights
which may arise in connection with actions or conduct of
Xxxxxxxxx in which he may have engaged outside the scope of
his employment by HLEG.
iii. Indemnification. HLEG agrees to indemnify, defend and hold
harmless Xxxxxxxxx and his heirs and legal representatives,
to the full extent of Delaware law, from any and all all
losses, damages, costs, expenses (including reasonable
attorneys' fees), liabilities or judgments or amounts that
are paid in settlement of or in connection with any
threatened or actual Claims, including claims for taxes
incurred by HLEG, which may be bought against him in his
personal capacity by any governmental authority or other
third party at any time after the date hereof related to his
role as a director, officer, or employee of HLEG. Xxxxxxxxx
will provide to HLEG written notice of any such Claims, but
the failure to so notify shall not relieve HLEG from any
liability that it may have hereunder, except to the extent
that such failure would materially prejudice HLEG.
b. Releases by Xxxxxxxxx. In consideration of the terms of this
Agreement, and other good and valuable consideration (the
sufficiency of which is hereby acknowledged), Xxxxxxxxx, on
behalf of himself, his heirs, executors, administrators and
assigns, hereby releases, remises and forever discharges HLEG,
its employees, officers, directors, agents, representatives,
parents, subsidiaries, affiliates and its successors and
assigns (the "Releasees") from:
A. all Claims which Xxxxxxxxx has had, now has or
hereafter can, shall or may have against the Releasees
as of the Release Date arising from the employment of
Xxxxxxxxx by the Releasees or the termination of such
employment, whether such claims arise pursuant to
statute or at common law, including without limitation
any claims Xxxxxxxxx has or could have under the any
state or federal law or regulation;
B. all liabilities, contingent or otherwise, dues, debts,
sums of money and accounts of whatsoever nature,
character or kind which were, are now or hereafter
can, shall or may be owing by the Releasees, or any
one of them, to Xxxxxxxxx as of the Release Date,
except that the Releasees are not released from their
liabilities and obligations as set forth in this Agreement.
c. Future litigation. In the event that HLEG becomes engaged in
any legal dispute with any governmental authority or other
third party (whether formally commenced or otherwise), the
issues of which Xxxxxxxxx may be familiar with, Xxxxxxxxx
agrees to fully cooperate with and assist HLEG, at HLEG's
request, in addressing and dealing with the matter, provided
HLEG agrees to reimburse Xxxxxxxxx for all reasonable, prior-
approved costs incurred by him in order to comply with this
section.
5. Xxxxxxxxx'x Representations, Acknowledgments and Covenants. Without
limiting any obligations imposed on Xxxxxxxxx by New Jersey law by
virtue of his service to HLEG prior to the Termination Date as an
employee, officer and director, Xxxxxxxxx represents, acknowledges,
and agrees as follows:
a. Covenant to Maintain Confidentiality. Xxxxxxxxx shall not,
use, disclose, or permit any person or entity to obtain or
disclose any Confidential Information (as hereinafter defined)
for any purpose or under any circumstances other than in the
course of performing his obligations under the terms of this
Agreement and for his own personal use in connection with
preparation of tax returns, financial planning and like uses.
The term "Confidential Information" includes, without
limitation, any and all of the following concerning HLEG to
which the general public does not have access: records,
financial and other; business plans; policies; software,
source codes, formulas, facility information and ideas for
development of facilities or for new facilities; technical
information, methodologies, techniques and know how; marketing
data, studies or plans; customer or distributor lists, sources
of supply, contracts or information concerning agency,
employee, consulting or other contracted services,
distribution, licensing, commission, royalty or other
agreements or arrangements; leases, loan or investor
agreements and contracts and agreements of all kinds and
other information constituting trade secrets or proprietary
information. Xxxxxxxxx'x obligations under this section shall
not apply with respect to any information which is or becomes
known to the recipient thereof without any breach of this
Agreement by Xxxxxxxxx, or which was permitted to be disclosed
by the party from whom it was obtained, or to the extent
required by an order of the Court, in which case Xxxxxxxxx
shall promptly notify HLEG.
b. Non-Competition. Xxxxxxxxx shall not, without the prior
written consent of HLEG, for a period of five (5) years
following the Termination Date, either individually or in
partnership or jointly or in conjunction with any person as
principal, agent, employee, consultant, shareholder or in any
manner whatsoever own, operate or be involved or engaged in
any capacity in the ownership or operation of a comedy club,
dance hall or restaurant within thirty (30) miles of any such
facility owned or operated by HLEG on the date of this
Agreement or hereafter. In addition, for a period of one (1)
year following the Termination Date, neither Xxxxxxxxx nor any
entity with which Xxxxxxxxx is associated shall employ,
solicit the employment of, or offer employment to any
individual who was an employee of HLEG or any subsidiary of
HLEG at any time during the six months preceding the
Termination Date.
x. Xxxxxxxxx acknowledges that the covenants contained in this
section are reasonable in scope, area and duration and are
necessary in furtherance of the legitimate interests of HLEG.
Xxxxxxxxx further acknowledges and agrees that he has received
adequate consideration for such covenants and that he will be
able to earn a living in his areas of professional experience
and expertise while conforming to the restrictions set forth
herein. Xxxxxxxxx specifically acknowledges that he has
received legal advice in respect of these covenants and that
he does not intend to argue, and will not argue, in any future
proceeding or situation that the covenants are in any way
unconscionable or unenforceable. Xxxxxxxxx further covenants
and agrees that any breach of the covenants contained in this
section herein will result in irreparable damage to HLEG and
may not be compensable in damages. Accordingly, without
limiting the type or scope of damages to which HLEG may be
entitled, Xxxxxxxxx agrees that HLEG shall be entitled to seek
equitable remedies, including immediate injunctive relief,
without the necessity of proving irreparable harm or the
inadequacy of money damages.
6. Communication. Neither HLEG nor Xxxxxxxxx will make any verbal or
written announcement regarding Xxxxxxxxx'x resignation without the
consent of the other party, such consent not to be unreasonably
withheld or delayed. All announcements shall be consistent with
this Agreement, and each party shall promptly forward to the other
a copy of any written announcement. Notwithstanding the foregoing,
Xxxxxxxxx'x consent shall not be required with respect to any
public statement or filing which HLEG is required to make under
federal securities laws.
7. Continued Employment of Certain Persons. HLEG agrees that it will
continue to employ Xx. Xxxxx Xxxxxxxx and Xx. Xxxx XxXxx for a
period of at least two months following the Termination Date;
provided, however, HLEG reserves the right to terminate the
employment of either or both individuals at any time, for any
reason or without a reason, so long as HLEG continues the
terminated employee's salary and benefits until the end of the two-
month period.
8. Miscellaneous.
a. Governing Law: This Agreement shall be governed by and
construed in accordance with the laws of the State of New
Jersey.
b. Binding Effect: This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their
respective heirs, legal representatives, successors and
assigns provided, however, neither party may assign any
rights, nor secure the assumption of any obligations
hereunder, to any third party without the prior written
consent of the other party to this Agreement.
c. Notices. All notices and other communications under this
Agreement shall be in writing and shall be deemed to have been
duly given or made as follows:
i. If sent by reputable overnight air courier (such as
Federal Express), 2 business days after being sent;
ii. If sent by facsimile transmission, with a copy mailed on
the same day in the manner provided in clause (i) above,
when transmitted and receipt is confirmed by the fax
machine; or
iii. If otherwise actually personally delivered, when
delivered.
All notices and other communications under this Agreement shall be
sent or delivered as follows:
If to HLEG to:
Xxxxxxx Xxxxxxxxx
Headliners Entertainment Group, Inc.
00 Xxxxxxxx Xxx Xxxx
Xxxxxxxx, Xxx Xxxx 00000
Facsimile: 000-000-0000
If to Xxxxxxxxx to:
Xxxxxxx Xxxxxxxxx
Rascals Montclair, Inc.
000 Xxxxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Facsimile: 000-000-0000
Each Party may change its address by written notice in accordance
with this Section.
d. Entire Agreement: This Agreement constitutes the entire
agreement between the parties with respect to Xxxxxxxxx'x
employment by HLEG and the termination of such employment, and
supersedes all prior agreements, representations, and promises
by any party or between Xxxxxxxxx and HLEG related thereto,
including without limitation the Employment Agreement.
e. Legal and Professional Advice: The parties agree that they
have been represented by counsel during the negotiation and
execution of this Agreement and, therefore, waive the
application of any law, regulation, holding or rule of
construction providing that ambiguities in an agreement or
other document will be construed against the party drafting
such agreement or document. Xxxxxxxxx specifically
acknowledges that he has had full opportunity to receive and
consider such legal and professional advice as he may have
required in order to fully understand the terms and conditions
of this Agreement and its immediate and future effect.
Xxxxxxxxx voluntarily enters into this Agreement having been
fully and fairly informed by his own advisors as to the full
force and effect of all of the terms and conditions herein.
IN WITNESS WHEREOF, the parties have executed this Agreement to be
effective as of the date first above written.
Headliners Entertainment Group, Inc.
By: /s/ Xxxxxxx Xxxxxxxxx
Xxxxxxx Xxxxxxxxx, Secretary
/s/ Xxxxxxx Xxxxxxxxx
Xxxxxxx Xxxxxxxxx
Xxxxxxx Xxxxxxxxx executes this Agreement to evidence his agreement to
purchase the Series B Stock in accordance with the provisions of Section 3
hereof.
/s/ Xxxxxxx Xxxxxxxxx
Xxxxxxx Xxxxxxxxx
