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EXHIBIT 10.14
AGREEMENT
AMONG
BORTA, INC.
AND
XXX XXXXX AND XXXXXX XXXXX
AND
ARISTO INTERNATIONAL CORPORATION
May 13, 1996
This Agreement is intended to set forth the basic conditions and economic terms
for an amicable resolution of issues between and among Borta, Inc. (herein the
"Company"), Xxx Xxxxx (herein "RB") and Xxxxxx Xxxxx (herein "LD"), (RB and LD
herein collectively the "Individuals"), and Aristo International Corporation
("Aristo"), which joins in this Agreement for the sole purpose of evidencing
its commitment to its guarantee and other matters hereinafter described.
1. The Individuals will immediately tender their resignations (copies
attached) as officers and directors of the Company. Subsequent to their
resignation, the Individuals will only visit the Company's offices upon the
request or invitation of the Company.
2. The Individuals will each be released from their respective covenant not to
compete on July 31, 1996.
3. The Individuals will each also receive all COBRA and accrued vacation
rights to which they are entitled by law.
4. The Individuals will surrender all of their options to purchase stock in
Aristo granted pursuant to Aristo's 1995 Stock Option Plan, or otherwise, and
RB will forfeit the 357,143 restricted shares of Aristo Common Stock covered by
the letter dated July 28, 1995 (the TARSAP letter), and any other options,
incentive payments or rights from the Company or Aristo which are related
thereto.
5. The Individuals will each be granted a severance of 8 months salary, based
on their current rate of pay, payable monthly, in arrears, under the current
employee instructions regarding direct deposit, beginning on the last day of
May, 1996, and continuing on the last day of each of the next succeeding 6
months, and with any remaining balance due and payable on December 31, 1996.
6. The remaining $425,000 of RB's signing bonus will be payable as follows:
a. $5,000 concurrently with the execution of the agreements described
in Paragraph 13 below.
b. $150,000 on the earlier of 30 days following the proposed public
offering or August 10, 1996.
c. the balance on December 31, 1996.
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All payments made pursuant to Paragraph 6 will be in immediately available
federal funds. In the case of each payment made hereunder, the Company may
deduct from the payment the withholding required to be made by the payor for
signing bonus payments under applicable federal and state income tax laws. All
such withholding shall be paid to the relevant taxing authority for the account
of RB, as required by law.
7. RB will agree to continue serving the Company in a consulting capacity as
may be requested by the Company, at no additional cost, for up to 15 hours per
month (which shall not carry over) until the later of the completion of the
Arena Football Game prototype or July 31, 1996; provided, however, that he will
be reimbursed for pre-approved out-of-pocket expenses.
8. The payments described in Paragraphs 5 and 6 will be guaranteed by Aristo
and a separate Guarantee will be executed and delivered by Aristo to the
Individuals not later than the delivery of the agreements described in
Paragraph 13.
9. Aristo will not seek to influence the decision of Xxxxx & Company regarding
the election of any existing shareholder of Aristo to request piggyback
registration of their shares if and when an underwriting occurs. Aristo will
use all reasonable efforts to allow counsel to the electing shareholders to be
permitted to have access to Xxxxx & Company with regard to any such election,
and, if the any of the shares owned by the Individuals become part of the
securities included within the offering, to allow the Individuals, and their
counsel, to review and comment on any disclosures made about them personally in
the prospectus.
10. The terms of this Agreement will be binding and will be effective
immediately and the agreements described in Paragraph 13 shall be effective
upon their execution and delivery.
11. The Individuals have been represented by counsel in connection with the
negotiation and execution of this Agreement.
12. The Individuals will take all reasonable steps to effectuate the purposes
of this Agreement to protect the trade secrets of the Company and do nothing to
interfere the operations or personnel of the Company and Aristo. The parties
agree to issue a joint "positive" press release regarding this matter.
13. As soon as practical after the date hereof and in any event not later than
May 20, 1996, the Individuals will execute such additional documents and take
such additional actions as may be reasonably requested by counsel for the
Company, such as termination of the Individuals' Employment Agreements, the
reaffirmation and survival of their confidentiality and non-disclosure
agreements, and the return of stock certificates. The parties will also execute
and deliver mutual general releases pursuant to which the Individuals will
release the Company, Aristo, and their officers, directors, employees and
agents from all claims and demands of whatever kind or nature (other than the
Company's and Aristo's obligations hereunder and under the other agreements
contemplated in this Paragraph 13) and pursuant to which the Company and Aristo
will release the Individuals from all claims and demands of whatever kind or
nature (except for the Individuals' obligations hereunder and under the other
agreements contemplated in the Paragraph 13). The Individuals agree to
specifically release their right to exercise any rescission rights of their
stock sale agreement with Aristo, whether statutory or otherwise, and the
Company and Aristo specifically agree not to take any action to assert any
rights, by set-off or otherwise, regarding the shares of stock of Aristo owned
by the Individuals. The releases will provide that if a party shall default in
any material respect (with the default in any payment being deemed material) in
any of its obligations hereunder or the agreements described in this Paragraph
13, the
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release shall thereupon lapse in all regards. Time is of the essence in
implementing this Agreement. In the event the Company or Aristo breach this
Agreement by failing to deliver the agreements described in this Paragraph 13,
within the times herein contemplated, the Individuals shall retain the rights
to elect to assert a termination for good reason under their respective
Employment Agreements of July 27, 1995.
14. The Individuals and Aristo will enter into an agreement pursuant to which
the Individuals will agree to vote their shares of stock in Aristo for the
election of Xxxxx Xxxxx as a Director of Aristo for so long as he is nominated
by the Board of Directors of Aristo to so serve.
Borta, Inc. Aristo International
Corporation
by:/s/ Xxxxx Xxxxx /s/ Xxxxxx Xxxxx /s/ Xxxxxx Xxxxx by:/s/ Xxxxx Xxxxx
----------- ---------------- ---------------- ---------------
Xxxxx Xxxxx Xxx Xxxxx Xxxxxx Xxxxx Xxxxx Xxxxx
