EXHIBIT 10.1
CONSULTING AND SETTLEMENT AGREEMENT
This CONSULTING AND SETTLEMENT AGREEMENT (the "AGREEMENT") is effective
as of January 1, 2002, by and between Xxxxxxx X. Xxxxxxxx, an individual
("CONSULTANT"), and AmeriVision Communications, Inc., an Oklahoma corporation
(the "COMPANY").
WITNESSETH:
WHEREAS, Consultant, the Company, and Xxxxx Xxxxxx, an individual (the
"STOCKHOLDER"), entered into that certain Amended and Restated Employment
Agreement dated May 26, 2000, as amended (the agreement and its amendments
thereof to be referred to as the "EMPLOYMENT AGREEMENT" herein), which provides
for the employment of the Consultant by the Company in an executive capacity
pursuant to the terms and conditions thereof;
WHEREAS, Consultant and the Company entered into a certain
Acknowledgment and Agreement dated the date hereof (the "ACKNOWLEDGMENT AND
AGREEMENT"), pursuant to which Consultant terminated his employment with the
Company for "Good Reason" under Section 8(e) of the Employment Agreement and
pursuant to which the Company acknowledged and agreed that there was a
termination of Consultant's employment for Good Reason pursuant to the
Employment Agreement, and that the Company acknowledges that the Consultant is
relying on the Acknowledgment and Agreement for purposes of entering into this
Agreement and understands that the Consultant would not enter into this
Agreement, but for the Company's execution of the Acknowledgment and Agreement;
WHEREAS, Consultant is relying on his Good Reason termination and the
rights and benefits resulting therefrom as specified under Section 8(e) of the
Employment Agreement, including certain payments as enumerated in Exhibit A
attached hereto ("PAYMENTS DUE"); and
WHEREAS, Consultant and the Company desire to reach a full settlement
of Consultant's Good Reason termination by entering into this Agreement, in
which Consultant desires to serve in a consulting role in assisting the Company
on special projects for the mutual benefit of the Company and Consultant in
exchange for the receipt of a promissory note made by the Company substantially
in the form attached hereto as Exhibit B (the "NOTE"), and other good and
valuable consideration.
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
1. Engagement. The Company agrees to and does hereby retain Consultant
in a consulting capacity as an independent consultant, not as an employee, and
Consultant does hereby agree to serve the Company in such capacity for the Term
of this Agreement, as defined in Section 4 herein.
2. Duties of Consultant. During the Term hereof, Consultant shall, at
the request of the Company's Chairman, reasonably exercised, assist the Company
in designing, developing,
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reviewing, analyzing, implementing, improving or otherwise accomplishing each of
the following special projects:
a. alternatives to the current WorldCom carrier contract;
b. increasing the transition of current customers to direct
billing;
c. current long distance rate plans and current PICC/USF
costs;
d. resolution of the USHA matter;
e. assist in the Company's relationship with X.X. Xxxxx, Xxx
Xxxxxxx, and Xxxx Xxx Xxxxxx.
f. litigation and legal issues;
g. financial, risk-analysis and strategic implications of
significant Company transactions;
h. strategic review and oversight;
i. relationships with investment banks and other capital and
financing sources; and
j. such other projects as the Chairman may reasonably
identify, subject to Consultant's acceptance of such projects in
Consultant's sole and absolute discretion.
Consultant shall have the right to devote such time and effort to the
accomplishment of the requested assistance as he deems, in his sole discretion,
to be necessary and appropriate.
3. Payments to and Expense Remuneration of Consultant. In consideration
for Consultant's services as provided in Section 2 herein and as settlement of
the Company's obligations to make the Payments to the Consultant as a result of
Consultant's Good Reason termination of his employment pursuant to the
Employment Agreement, the Company agrees to provide Consultant with the
following:
a. Promissory Note. The Company shall make a Note,
substantially in the same form as shown on Exhibit B attached hereto,
payable to Consultant for a principal amount equal to the nominal value
of all Payments due Consultant as shown on Exhibit A attached hereto.
b. Reimbursable Expenses. By the fifth (5th) day of each month
beginning February 5, 2002, Consultant shall submit an invoice and
adequate supporting documentation, and the Company shall reimburse
Consultant for such expenses within fifteen (15) days thereof, for all
reasonable and necessary travel expenses incurred by Consultant in
connection with his services hereunder until such time of an Event of
Termination, which includes, but are not limited to, round-trip coach
class travel, lodging and meal expenses, including those incurred in
attending any meeting of Company
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personnel to which Consultant shall have been requested by the Company's chief
executive officer to be present. In the event of any dispute concerning the
adequacy of the above tendered substantiation, the Company shall reimburse
Consultant within fifteen (15) days following the resolution of such dispute.
For expenses reimbursable under this subsection (b), Consultant shall submit all
invoices and adequate supporting documentation no later than ninety (90) days
following the date such expenses are incurred by Consultant.
4. Termination and Term.
a. Event of Termination. This Agreement and its terms shall
remain in effect until such time that an "Event of Termination" occurs.
An "EVENT OF TERMINATION" shall occur 30 days after either party hereto
provides the other party with written notice of its intention to
terminate this Agreement, or upon the death of Consultant.
b. Note to Survive Termination. Notwithstanding anything
herein to the contrary, the Note and all of the Company's obligations
thereunder shall survive any Event of Termination or other termination,
suspension or invalidation of this Agreement.
c. Term. This Agreement shall commence on the date hereof and
continue until either 1) an Event of Termination occurs, or 2) the
Company pays to Consultant all amounts due under the Note, whichever
occurs first (the "TERM").
5. Independent Contractor. The services of the Consultant are to be
rendered by him as an independent contractor and not as an employee of the
Company. In that regard, the Consultant shall not be deemed to be employed by
the Company for purposes of the Federal Social Security Act or any federal or
state law concerning employment, compensation for employment services rendered
or insurance for injuries sustained in the performance of his service, and
Consultant shall be required to file all tax forms required of an independent
contractor and shall be solely responsible for the payment and reporting of any
taxes due on whatever remuneration is paid by the Company to Consultant
hereunder or by Consultant to any third party. Consultant shall have unilateral
control over the manner in which he shall provide the consulting services herein
contracted for, inclusive of work schedule and the location and operation of any
business office, and the Company shall have no direct or implied authority over
Consultant's work nor supervisory power over the procedures employed by the
Consultant, other than to assure itself with regard to the Consultant's
adherence to reasonable standards for the conduct of the services contracted for
hereunder. Consultant shall not be restricted from undertaking any other
business activities or full time employment.
6. Indemnification. The Company agrees to indemnify and hold harmless
Consultant against all costs, expenses (including, without limitation,
reasonable attorneys' fees) and liabilities (other than settlements to which the
Company does not consent, which consent shall not be unreasonably withheld)
(collectively, "Losses") reasonably incurred by Consultant in connection with
any claim, action, proceeding or investigation brought against or involving
Consultant with respect to, arising out of or in any way relating to
Consultant's services provided to the Company under this Agreement; provided
however, that the Company shall not be required to indemnify Consultant for
Losses incurred as a result of Consultant's intentional, reckless or grossly
negligent misconduct (other than matters where
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Consultant acted in good faith and in a manner he reasonably believed to be in
and not opposed to the Company's best interests). Consultant shall promptly
notify the Company of any claim, action, proceeding or investigation under this
paragraph and the Company shall be entitled to participate in the defense of any
such claim, action, proceeding or investigation and, if Company so chooses, to
assume the defense with counsel selected by the Company; provided that
Consultant shall have the right to employ counsel to represent Consultant (at
the Company's expense) if Company counsel would have a "conflict of interest" in
representing both the Company and Consultant. The Company shall not settle or
compromise any claim, action, proceeding or investigation without Consultant's
consent, which consent shall not be unreasonably withheld; provided, however,
that such consent shall not be required if the settlement entails only the
payment of money and the Company fully indemnifies Consultant in connection
therewith. The Company further agrees to advance any and all expenses
(including, without limitation, the fees and expenses of counsel) reasonably
incurred by the Consultant in connection with any such claim, action, proceeding
or investigation, provided Consultant first enters into an appropriate agreement
for repayment of such advances if indemnification is found not to have been
available.
7. Representations and Warranties. The Company represents and warrants
to Consultant the following:
a. It has the power to enter into this Agreement and to
perform its obligations under this Agreement and has taken all
necessary action to authorize such execution, delivery, and
performance.
b. This Agreement does not and will not violate or conflict
with any law applicable to it, and provision of its organizational
documents, any order of judgment of any court or other agency of
government applicable to it or any of its assets or any contractual
restrictions binding on or affecting it or any of its assets;
c. Its obligations under this Agreement constitute its legal,
valid and binding obligations, enforceable in accordance with their
respective terms (subject to applicable bankruptcy, reorganization,
insolvency, moratorium, or similar laws affecting creditors' rights
generally and subject, as to enforceability, to equitable principles of
general application (regardless of whether enforcement is sought in a
proceeding in equity or at law)); and
d. There is not pending or, to its knowledge, threatened
against it or any of its subsidiaries any action, suit or proceeding at
law or in equity or before any court, tribunal, governmental body,
agency or official or any arbitrator that is likely to affect (1) the
legality, validity or enforceability against it of this Agreement or
its ability to perform its obligations hereunder or (2) in a materially
adverse way, the operations, business, property or assets or financial
or other condition of Consultant.
8. Further Assurances. Each party hereto agrees to perform any further
acts and to execute and deliver any further documents which may be reasonably
necessary to carry out the provisions of this Agreement.
9. Assignment. The Company may not assign this Agreement or its rights
hereunder, except that it may assign this Agreement and its rights hereunder in
whole to any
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entity with or into which it may hereafter merge or consolidate or to which it
may transfer all or substantially all of its assets, if such entity shall by
operation of law or expressly in writing assume all liabilities of the Company
hereunder as fully as if it had been named the Company herein. In the event that
the Company assigns its rights, interests and obligations as permitted
hereunder, the Company shall remain liable and responsible for its obligations
hereunder notwithstanding such assignment.
10. Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed an original, but all of which shall constitute the same
instrument. Further, the parties may indicate their agreement to this Agreement
by telecopy of an executed signature page which, upon exchange of countersigned
faxed signatures, will for all purposes be deemed due execution, and each party
agrees to promptly follow such faxed signature pages with the original copies
thereof to the other party.
11. Binding Effect. This Agreement shall inure to the benefit of, be
binding upon and enforceable against, the parties hereto and their permitted,
respective successor, heirs, beneficiaries and permitted assigns.
12. Headings. The headings contained in this Agreement are for
convenience of reference only and shall not affect in any way the meaning or
interpretation of this Agreement.
13. Waiver. The waiver by either party of a breach of any provision of
this Agreement shall not operate or be construed as a continuing waiver of any
subsequent breach by either party. No waiver by either party of any provision or
condition to be performed shall be deemed a waiver of similar or dissimilar
provisions or conditions at the same time or any prior or subsequent time. No
waiver by either party of any provisions or conditions to be performed shall be
deemed a waiver of similar or dissimilar provisions or conditions at the same
time or any prior or subsequent time.
14. Governing Law. Regardless of the place of execution or performance,
this Agreement shall be governed by, interpreted, construed, and enforced in
accordance with the laws of the State of Oklahoma without giving effect to such
State's conflicts of laws provisions.
15. Severability. If, for any reason, any provision of this Agreement
is held invalid, such invalidity shall not affect any other provision of this
Agreement not held so invalid, and each such other provision shall to the full
extent consistent with law continue in full force and effect. If any provision
of this Agreement shall be held invalid in part, such invalidity shall in no way
affect the rest of such provision not held so invalid, and the rest of such
provision, together with all other provisions of this Agreement, shall to the
full extent consistent with law continue in full force and effect.
16. Capitalized Terms. Any capitalized term used, but not otherwise
defined in this Agreement shall have the meaning ascribed to such term in the
Employment Agreement or in the Acknowledgment and Agreement.
17. Entire Agreement. This Agreement and the Acknowledgment and
Agreement contain the entire agreement of the parties with respect to the
subject matter hereof and
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thereof, and none of the aforementioned agreements shall be modified or changed
in any respect except in writing, duly signed by the parties.
18. Settlement. This Agreement represents the full settlement of all
rights and remedies of the Company and Consultant under the Employment
Agreement.
19. Interpretation of Provisions. Whenever possible, each provision of
this Agreement shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Agreement shall be prohibited
by or invalid under applicable law, such provision shall be ineffective to the
extent of such prohibition or invalidity, without invalidating the remainder of
such provision or the remaining provisions of this Agreement.
20. Notice. Any notice required, or permitted to be given by the
parties, shall be deemed sufficient if mailed by certified mail, return receipt
requested, to the parties, as follows:
If to Company: AmeriVision Communications, Inc.
0000 Xxxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxxxx Xxxx, Xxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxx
If to Consultant: Xxxxxxx X. Xxxxxxxx
c/o Xxxxx Xxxx & Xxxxxxxx, LLP
0000 X Xxxxxx, XX
Xxxxxxxxxx, XX 00000-0000
[SIGNATURE PAGE TO FOLLOW]
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[SIGNATURE PAGE TO CONSULTING AND SETTLEMENT AGREEMENT]
IN WITNESS WHEREOF, the parties hereto have executed this Consulting
and Settlement Agreement as of the effective date hereof.
AMERIVISION COMMUNICATIONS, INC.
By: /s/ XXXXXXX X. XXXXX
-------------------------------
Name: Xxxxxxx X. Xxxxx
-----------------------------
Title: Chairman/CEO
----------------------------
/s/ XXXXXXX X. XXXXXXXX
-----------------------------------
XXXXXXX X. XXXXXXXX
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EXHIBIT A
PAYMENTS DUE
YEAR AMOUNT
---- ------
2002 $ 1,343,843(1)
2003 $ 641,346
2004 $ 251,267
-----------
$ 2,236,456
(1) As of May 30, 2002, the amount of $187,500 had been paid to Consultant,
resulting in a net payable amount of $2,048,956 due to Consultant as of
such date. Assuming that the Company makes a $37,500 payment to
Consultant on June 15, 2002, a net payable amount of $2,011,456 shall
be due to Consultant as of June 30, 2002.
EXHIBIT B
FORM OF
PROMISSORY NOTE
FACE AMOUNT: $2,011,456
INTEREST RATE: 4.36% per year
TERM: 54 months
FIRST PAYMENT DUE: July 10, 2002
1. FOR VALUE RECEIVED, AmeriVision Communications, Inc., an
Oklahoma
corporation, with its principal office in
Oklahoma City,
Oklahoma ("MAKER" or
the "COMPANY"), hereby unconditionally promises to pay to the order of Xxxxxxx
X. Xxxxxxxx, or his assignee ("HOLDER"), in collected funds the principal sum of
TWO MILLION ELEVEN THOUSAND FOUR HUNDRED FIFTY-SIX & 00/100 DOLLARS
($2,011,456.00) in fifty-four (54) monthly payments (the "TERM"), at 4.36%
interest (This note shall be referred to herein as the "NOTE"). The payment
schedule for the Note is as follows:
a) $ 45,220.00 per month for the first month (July
2002);
b) $ 41,300.00 per month for the next fifty-two (52)
months (August 2002 through November 2006); and
c) $ 23,836.00 per month for the last month (December
2006).
1.1. Payment Due Date. Each monthly payment due under this
Note shall be payable on the 10th day of each calendar month, beginning
with the 10th of July 2002, and will become past due, and thus
constitute an Event of Default (as defined in Section 3 herein), if not
mailed to the Holder and postmarked on or before the 20th day of each
calendar month. All past due principal on this Note will, at Holder's
option, bear interest at a rate of twelve percent (12%) per annum until
the date of payment (the "PENALTY INTEREST"). Such interest shall be
computed on the basis of a 365-day year for the actual number of days
elapsed.
1.2 Interest and Allocation of Payments. The interest provided
in the first paragraph of Section 1 of this Note shall accrue
throughout the Term on the unpaid principal balance at the rate
specified above, and shall be payable and due at maturity, subject to
the payment allocation specified below:
a) The first $3,800.00 of each monthly payment specified
in Section 1 above will be credited to unpaid,
accrued interest (if any) as of the date of payment
(the "CURRENTLY PAYABLE INTEREST"). The Currently
Payable Interest shall not accrue interest during the
Term.
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b) Any unpaid, accrued interest beyond the Currently
Payable Interest (such amount to be referred to as
the "UNPAID ACCRUED INTEREST") shall not accrue
interest during the Term.
c) The balance of each monthly payment specified in
Section 1 above in excess of $3,800.00 shall be
credited to the outstanding principal balance.
1.3. Instructions for Payment. All payments of principal,
interest and other amounts payable on or in respect of this note or the
indebtedness evidenced hereby shall be made to Holder in U.S. dollars,
by a Company check or by wire transfer, upon the sole discretion of
Holder or his assigns. Maker shall make such payments of principal and
interest to Holder at the address of Holder set forth on the signature
page hereto or at such other place or pursuant to wire transfer
instructions as Holder shall have notified Maker in writing.
2. Special Provisions.
2.1. Prepayable. This Note is prepayable from time to time in
whole or in part. Prepayments shall be credited first, to the reduction
of Penalty Interest, if any, and second, to the reduction of the last
maturing principal payments of this Note.
2.2. No Set-Off. All payments on or in respect of this Note or
the indebtedness evidenced hereby shall be made to Holder without
set-off or counterclaim and free and clear of and without any
deductions of any kind.
3. Event of Default. Notwithstanding the foregoing, the principal debt
owing by Maker under this Note, together with any Penalty Interest or Currently
Payable Interest (as may accrue under Section 1.2 hereof), but excluding and
forgiving any Unpaid Accrued Interest, shall be immediately due and payable,
upon written demand by the Holder to Maker (with such written demand not being
required in the event of default described in Section 3.1), in the event of the
occurrence and continuation of any of the following (each an "EVENT OF
DEFAULT"):
3.1. Breach of Timely Payment. Maker fails to make a timely
payment of the monthly installment as provided in Section 1 herein. In
this Section 3.1, the entire unpaid principal and all unpaid Penalty
Interest and Currently Payable Interest, but excluding and forgiving
any Unpaid Accrued Interest, of this Note shall become immediately due
and owing, without notice, demand or presentment to Maker. Moreover, in
this Section 3.1 Maker and each surety, endorser and guarantor waive
all demands for payment, presentations for payment, notices of
intention to accelerate maturity, notices of acceleration of maturity,
protests and notices of protest, to the extent permitted by law;
3.2. Breach of Obligation or Covenant. A material breach of
any obligation or covenant under this Note or any other obligation,
covenant, or liability contained or referred to in this Note;
3.3. Breach of Representation or Warranty. Any warranty,
representation, or statement made or furnished to the Holder by or on
behalf of Maker proves to be or to have been false in any material
respect;
3.4. Bankruptcy. Maker (a) files (or consents to the filing
of) any petition or complaint pursuant to federal or state bankruptcy
or insolvency laws seeking the appointment of a receiver or trustee for
any of its assets, seeking the adjudication of Maker as bankrupt or
insolvent, seeking an "order for relief" under such statutes, or
seeking a reorganization of or a plan of arrangement for Maker and (b)
such petition is not dismissed within sixty (60) days after the filing
thereof or Maker makes a general assignment for the benefit of its
creditors;
3.5. Change in Control. A Change in Control (as defined below)
of Maker. For the purposes of this Note, "CHANGE IN CONTROL" shall mean
(a) the sale, lease or other transfer of all or substantially all of
the assets of Maker to any person or group (as such term is used in
Section 13(d)(3) of the Securities Exchange Act of 1934, as amended
("SECTION 13(d)(3)"); (b) the adoption by the stockholders of Maker of
a plan relating to the liquidation or dissolution of Maker; (c) the
merger or consolidation of Maker with or into another entity or the
merger of another entity into Maker or any subsidiary thereof with the
effect that immediately after such transaction the stockholders of
Maker immediately prior to such transaction directly and indirectly
hold less than fifty percent (50%) of the total voting power of all
securities generally entitled to vote in the election of directors,
managers or trustees of the entity surviving such merger or
consolidation; (d) the acquisition by any person or group (as such term
is used in Section 13(d)(3)) of more than fifty percent (50%) of the
direct and indirect voting power of all securities of Maker generally
entitled to vote in the election of directors of Maker; or (e) the
majority of Maker's Board of Directors being composed of members, other
than the current directors as of January 1, 2002, who have served less
than twelve (12) consecutive months; or
3.6. Dividends and other Distributions. Within any calendar
quarter, Maker pays dividends or share redemption payments or makes any
other distribution with respect to its capital stock that violates any
of the Company's bank loan covenants, including those of Coast Business
Credit, and including a covenant that may state, in substantially the
same form as hereinafter provided, that such dividends, share
redemption payments or other distributions shall not exceed, in the
aggregate, a specified percentage of Maker's "quarterly net earnings",
with such quoted term being deemed to consist of Maker's net income
after tax (excluding extraordinary gains), confirmed by reference to
Maker's quarterly financial statements, prepared in accordance with
generally accepted accounting principles. In the event that, during the
Term of this Note, a Company's lender waives any bank loan covenant or
a portion thereof, including the percentage limitation above, in
connection with an extension of credit to the Company, then Holder's
acceptance and consent of such waiver is hereby deemed to have been
granted and shall not violate this Section 3.6; provided, however,
Maker shall give written notice to Holder within fifteen (15) days of
any such waiver.
4. Costs of Collection or Enforcement. If at any time this Note is
placed in the hands of an attorney for collection, or if suit is brought for
collection or enforcement, or if it is collected through bankruptcy or other
judicial proceeding, then Maker agrees to pay all costs of
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collection and enforcement, including reasonable attorney's fees and court
costs, together with any Penalty Interest or Currently Payable Interest.
5. No Waiver. Neither a delay on the part of Holder in the exercise of
any power or right under this Note, nor a single or partial exercise of any such
power or right, shall operate as a waiver thereof. Enforcement by Holder of any
of its rights hereunder shall not constitute an election by it of remedies so as
to preclude the exercise of any other remedy available to it.
6. Covenants.
6.1. Board Observer Rights. Upon the Holder's execution and
delivery of a counterpart copy of a Confidentiality and Non-Competition
Agreement in the form of Exhibit A hereto (the "CONFIDENTIALITY AND
NON-COMPETITION AGREEMENT") and, subject to his future performance in
accordance with its terms and the terms of the
Consulting and
Settlement Agreement, continuing until the termination of that
agreement, Xx. Xxxxxxxx may, as a non-voting and unpaid observer,
attend all meetings of the Company's Board of Directors and shall be
provided with copies of all notices, minutes, information and other
materials generated with respect to such meetings that Maker provides
to its directors, when and as such materials are delivered to the
directors.
6.2. Right to Receive Financial Statements.
6.2.1. Maker shall provide Holder as soon as
practicable after the end of each fiscal quarter, and in any
event within forty-five (45) days, unaudited consolidated
balance sheets of Maker and its subsidiaries, if any, as of
the end of such fiscal quarter, unaudited statements of
income, statements of changes in financial condition,
statements of cash flow of Maker and its subsidiaries and
statements of shareholders' equity for such period and for the
current fiscal year to date, and setting forth in each case in
comparative form the figures for corresponding periods in the
previous fiscal year, and setting forth in comparative form
the budgeted figures, prepared in accordance with generally
accepted accounting principles.
6.2.2. Maker shall provide Holder as soon as
practicable after the end of each month, and in any event
within thirty (30) days, monthly financial statements in
substantially the same format as currently prepared by Maker
in accordance with past practice.
7. Representations of Maker. Maker makes the following representations
and warranties to Holder:
7.1. Corporate Status. Maker is a corporation duly
incorporated, validly existing, and in good standing under the laws of
the State of
Oklahoma.
7.2. Authorization. All corporate action on the part of Maker
and its officers, directors and shareholders necessary for Maker to
execute and perform its obligations under this Note has been taken.
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7.3. Validity of Note. This Note is a legally valid and
binding obligation of Maker. The issuance of this Note does not and
will not violate any agreements to which Maker is, or at the time of
issuance will be, a party.
8. Miscellaneous.
8.1. Further Assurances. Each party agrees to cooperate fully
with the other party and to execute such further instruments, documents
and agreements and to give such further written assurances, as may be
reasonably requested by any other party to evidence and reflect the
transactions described herein and contemplated hereby, and to carry
into effect the intents and purposes of this Note.
8.2. Rights Cumulative. Each and all of the various rights,
powers and remedies of the parties hereto shall be considered to be
cumulative with and in addition to any other rights, powers and
remedies which such parties may have at law or in equity in the event
of the breach of any of the terms of this Note. The exercise or partial
exercise of any right, power or remedy shall neither constitute the
exclusive election thereof nor the waiver of any other right, power or
remedy available to such party.
8.3. Notices. All notices (including other communications
required or permitted) under this Note must be in writing and must be
delivered (a) in person; (b) by registered or certified mail, postage
prepaid, return receipt requested; (c) by a generally recognized
courier or messenger service that provides written acknowledgement of
receipt by the addressee; or (d) by facsimile or other generally
accepted means of electronic transmission with a verification of
delivery. Notices are deemed delivered when actually delivered to the
address for notices. Notices to Holder must be given to its last known
address appearing on the books of Maker and notices to Maker must be
given at its principal executive office. Any party may furnish, from
time to time, other addresses for notices to it.
8.4. Severability. The provisions of this Note are severable.
The invalidity, in whole or in part, of any provision of this Note
shall not affect the validity or enforceability of any other of its
provisions. If one or more provisions hereof shall be declared invalid
or unenforceable, the remaining provisions shall remain in full force
and effect and shall be construed in the broadest possible manner to
effectuate the purposes of this Note. The parties further agree to
replace such void or unenforceable provisions of this Note with valid
and enforceable provisions which will achieve, to the extent possible,
the economic, business and other purposes of the void or unenforceable
provisions.
8.5. Headings; Attachments; References. The headings in this
Note are only for convenience and ease of reference and are not to be
considered in construction or interpretation of this Note, nor as
evidence of the intention of the parties hereto. All exhibits,
schedules and appendices attached to this Note are incorporated herein.
Except where otherwise indicated, all references in this Note to
Sections refer to Sections of this Note.
8.6. Amendments; Modifications. Any provision of this Note may
be amended or modified upon the written consent of all parties to this
Note.
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8.7. Waivers; Extensions of Time. Any party hereto may by a
writing signed by an authorized representative of such party: (i)
extend the time for the performance of any of the obligations of
another party; (ii) waive any inaccuracies in representations and
warranties made by another party contained in this Note or in any
documents delivered pursuant hereto; or (iii) waive the compliance with
any term, provision, covenant, requirement or condition of this Note.
Any extension of time or waive must be in writing and shall be
effective only to the extent specifically set forth in such writing.
8.8. Delays or Omissions. No delay or failure by any party to
insist on the strict performance of any provision of this Note, or to
exercise any power, right or remedy, will be deemed a waiver or
impairment of such performance, power, right or remedy or of any other
provision of this Note nor shall it be construed to be a waiver of any
breach or default, or an acquiescence therein, or of or in any similar
breach or default thereafter occurring.
8.9. Interpretation. If any claim is made by a party relating
to any conflict, omission or ambiguity in the provisions of this Note,
no presumption or burden of proof or persuasion will be implied because
this Note was prepared by or at the request of any party or its
counsel.
8.10. Governing Law. This Note shall be governed by and
construed in accordance with the laws of the State of
Oklahoma,
excluding that body of law relating to conflict of laws.
8.11. Successors and Assigns. Except as otherwise provided
herein, the provisions hereof shall inure to the benefit of, and be
binding upon, the successors, assigns, heirs, executors and
administrators of the parties hereto.
8.12. Survival. The representations, warranties and agreements
in this Note shall survive the execution of this Note without regard to
any investigation made by any party. All statements as to factual
matters contained in any certificates, exhibits or other instruments
delivered by or on behalf of any party pursuant to the terms hereof or
in connection with the transactions contemplated hereby shall be
deemed, for all purposes, to constitute representations and warranties
by such party under the terms of this Note given as of the date of such
certificate or instrument.
8.13. Specific Performance. It might be impossible to measure
in money the damage to a party if another party fails to comply with
any provision of this Note. If any such failure occurs, the party might
not have an adequate remedy at law or in damages. Therefore, each party
may seek the issuance of an injunction and the enforcement of other
equitable remedies against it to compel performance of any obligation,
covenant or liability contained or referred to in this Note.
8.14. Additional Documents and Acts. Each party will execute
and deliver such additional documents and instruments, and perform such
additional acts, as are commercially reasonable and necessary to carry
out and perform its obligations in this Note.
5
8.15. Binding Effect; Parties in Interest This Note is binding
upon and benefits only the parties and their respective permitted
successors and assigns. Nothing in this Note gives any rights or
remedies to any person other than the parties and their respective
permitted successors and assigns, nor does anything in this Note
relieve or discharge any obligation or liability of any third person to
any party. No provision of this Note gives any third person any right
of subrogation or action over or against any party to this Note.
8.16. Usury Laws. It is the intention of Maker and Holder to
conform strictly to applicable usury laws. Accordingly, notwithstanding
any provision to the contrary in this Note, the aggregate of all
interest and any other charges or consideration constituting interest
under applicable usury law that is taken, reserved, contracted for,
charged or received under this Note or otherwise in connection with
this transaction shall under no circumstances exceed the maximum amount
of interest allowed by the usury law applicable to this transaction. If
any excess interest charge or consideration in such respect is taken,
reserved, contracted for, charged, received or provided for, or shall
be adjudicated to be so taken, reserved, contracted for, charged,
received or provided for, in this Note, whether by the terms of this
Note or because the maturity of the indebtedness evidenced by this Note
is accelerated for any reason, or in the event of any required or
permitted prepayment, then in any such event (a) the provisions of this
paragraph shall govern and control, (b) neither Maker nor Maker's
heirs, executors, administrators, legal representatives, successors or
assigns or any other liable party shall be obligated to pay the amount
of such interest to the extent that it is in excess of the legal limit
for interest rates, (c) any excess shall be deemed a mistake and
cancelled automatically and, if theretofore paid, shall be credited on
this Note by the Holder hereof (or if this Note shall have been paid in
full, refunded to Maker) and (d) the effective rate of interest shall
be automatically subject to reduction to the maximum interest rate
allowed by law as the law may now or hereafter be construed by courts
of appropriate jurisdiction. Without limiting the foregoing, all
calculations of the rate of interest taken, reserved, contracted for,
charged, received or provided for under this Note which are made for
the purpose of determining whether the interest rate exceeds the legal
limit for interest rates, shall be made, to the extent allowed by law,
by amortizing, prorating, allocating and spreading in equal parts
during the period of the full stated term of the Note evidenced hereby,
all interest at any time taken, reserved, contracted for, charged,
received or provided for under this Note.
[SIGNATURE PAGE TO FOLLOW]
6
[SIGNATURE PAGE TO NOTE]
Dated this 26th day of June, 2002.
/s/ XXXXXXX X. XXXXX
-----------------------------------
Xxxxxxx X. Xxxxx, Chairman/CEO
AmeriVision Communications, Inc.
[SEAL]
ACKNOWLEDGMENT
STATE OF
OKLAHOMA )
) ss.
COUNTY OF
OKLAHOMA )
This instrument was signed and acknowledged before me on the 26th day
of June, 2002, by Maker.
/s/ XXXXXX XXXXXX
-----------------------------------
Notary Public
[L.S.]
My Commission Expires:
2-14-04
----------------------
7
EXHIBIT A TO PROMISSORY NOTE
CONFIDENTIALITY AND NON-COMPETITION AGREEMENT
This CONFIDENTIALITY AND NON-COMPETITION AGREEMENT (the "AGREEMENT") is
effective as of the 26th day of June, 2002, by and between Xxxxxxx X. Xxxxxxxx,
an individual ("CONSULTANT" or "YOU"), and AmeriVision Communications, Inc., an
Oklahoma corporation (the "COMPANY").
WITNESSETH:
WHEREAS, Consultant, the Company, and Xxxxx Xxxxxx, an individual (the
"STOCKHOLDER"), entered into that certain Amended and Restated Employment
Agreement dated May 26, 2000, as amended (the agreement and its amendments
thereof to be referred to as the "EMPLOYMENT AGREEMENT" herein), which provides
for the employment of the Consultant by the Company in an executive capacity
pursuant to the terms and conditions thereof; and
WHEREAS, Consultant and the Company entered into a certain
Acknowledgment and Agreement dated as of January 1, 2002 (the "ACKNOWLEDGMENT
AND AGREEMENT"), pursuant to which Consultant terminated his employment with the
Company for "Good Reason" under Section 8(e) of the Employment Agreement and
pursuant to which the Company acknowledged and agreed that there was a
termination of Consultant's employment for Good Reason pursuant to the
Employment Agreement; and
WHEREAS, the Company is the maker of that certain Promissory Note,
dated the date hereof, and payable to Consultant (the "PROMISSORY NOTE") to
which Consultant shall be paid amounts owed to him by the Company as a result of
his "Good Reason" termination under Section 8(e) of the Employment Agreement and
to which Consultant shall be granted, among other rights, the right to observe
board meetings of the Company, conditioned on the execution and delivery of this
certain Agreement; and
WHEREAS, Consultant and the Company have entered into that certain
Consulting and Settlement Agreement dated as of January 1, 2002 (the "
CONSULTING
AND SETTLEMENT AGREEMENT"), pursuant to which Consultant will agree to defer
certain rights and severance benefits under the Employment Agreement as a result
of "Good Reason" termination provided under SECTION 8(e) of the Employment
Agreement and to provide certain consulting services in consideration for the
Company providing Consultant with certain continuing benefits and other valuable
consideration; and
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
1. Confidential Information.
1.1. In connection with your appointment, under the terms of
that certain
Consulting and Settlement Agreement, dated January 1,
2002, by and between yourself
8
and the Company, to the position of consultant to the Company and its
board of directors, and in connection with that certain Promissory
Note, dated the date hereof, by and between yourself and the Company,
it is expected that you will have access to information concerning the
Company and its affairs which will not have been made available to the
public at the time of its dissemination to board members. Accordingly,
as a condition precedent to: (a) your engagement as such a consultant,
(b) your permitted attendance at meetings of the Company's board of
directors or of any board committee, and (c) your receipt of
information, whether in oral or written form at any such meeting or in
another form of dissemination by or on behalf of the Company to or
among board members (all such information being hereinafter
collectively referred to as the "CONFIDENTIAL INFORMATION") the Company
has indicated that it must be in receipt of your assurance that you are
willing to treat all such Confidential Information, whether prepared by
or on behalf of the Company and irrespective of the form of
communication by which it is delivered, confidentially and to refrain
from discussing or otherwise releasing the same to anyone other than a
member of the Company's board of directors until such time as it shall
have been released to the public in the form of a press announcement or
by way of a filing made with the United State Securities and Exchange
Commission (the "COMMISSION") or you shall have received permission to
do so in written form from the Chairman of the Company's board of
directors. Your execution and delivery of a counterpart copy of this
Agreement evidences the Company's receipt of such assurance.
1.2. For purposes of this Agreement, Confidential Information
shall not be deemed to include information which (i) is or becomes
generally available to the public other than as a result of a
disclosure by you; (ii) was within your possession prior to its being
furnished to you by or on behalf of the Company pursuant hereto,
provided that the source of such information was not known by you to be
bound by a confidentiality agreement with or other contractual, legal
or fiduciary obligation of confidentiality to the Company or any other
party with respect to such information, and provided further that
within one business day following your receipt of such information, you
furnish to the Company a written statement identifying the source of
such previously received information and the circumstances surrounding
your receipt thereof; or (iii) becomes available to you on a
non-confidential basis from a source other than the Company or any of
its representatives, provided that such source is not bound by a
confidentiality agreement with or other contractual, legal or fiduciary
obligation of confidentiality to the Company or any other party with
respect to such information.
1.3. Notwithstanding the foregoing, you may make disclosure of
Confidential Information if you have received the written opinion of
your outside counsel that such disclosure must be made by you in order
that you not commit a violation of law. In the event that you are
requested or required (by oral questions, interrogatories, requests for
information or documents in legal proceedings, subpoenas, civil
investigative demand or other similar process) to disclose any of the
Confidential Information, you shall provide the Company with prompt
written notice of any such request or requirement so that the Company
may seek a protective order or other appropriate remedy and/or waive
compliance with the provisions of this Agreement. If, in the absence of
a protective order
9
or other remedy or the receipt of a waiver by the Company, you are
nonetheless, in the written opinion of your counsel, legally compelled
to disclose Confidential Information to any tribunal or else stand
liable for contempt or suffer other censure or penalty, you may,
without liability hereunder, disclose to such tribunal only that
portion of the Confidential Information which such counsel advises you
is legally required to be disclosed, provided that you exercise your
best efforts to preserve the confidentiality of the Confidential
Information, including, without limitations, by cooperating with the
Company to obtain an appropriate protective order or other reliable
assurance that confidential treatment will be accorded the Confidential
Information by such tribunal.
2. Restrictive Covenants.
2.1. You agree that, in exchange for the Company's willingness
to furnish you with the Confidential Information, you shall not, during
the pendency of your engagement as a consultant to the Company, or
within the six month period following termination of the referenced
Consulting and Settlement Agreement, either directly or indirectly,
unless any of the following actions shall have been specifically
invited or authorized in writing by the Company, (a) effect or seek,
offer or propose (whether publicly or otherwise) to effect, or cause to
participate in or in any way assist any other person to effect or seek,
offer or propose (whether publicly or otherwise) to effect, or cause or
participate in, (i) any tender or exchange offer, merger or other
business combination involving the Company or any of its subsidiaries;
(ii) any recapitalization, restructuring, liquidation, dissolution or
other extraordinary transaction with respect to the Company or any of
its subsidiaries; or (iii) any "solicitation of proxies" (as such terms
are used in the Commission's proxy rules), consents or other
authorizations to vote any voting securities of the Company; (b) form,
join or in any way participate in a "group" (as defined under the
Securities Exchange Act of 1934, as amended) or otherwise act, alone or
in concert with others, to seek to control or influence the management,
Board of Directors or policies of the Company; (c) take any action
which might force the Company to make a public announcement regarding
any of the types of matters set forth in (a) above; or (d) enter into
any discussions or arrangements with any third party with respect to
any of the foregoing. Notwithstanding the foregoing, (a) there shall be
no restriction on your purchase or sale, directly or indirectly, of any
securities of, or voting rights with respect to, the Company or any of
its subsidiaries, whether by way of private or open market
transactions; and (b) Consultant shall, at all times, be permitted to
solicit or obtain proxies from the following persons: (i) Xxxxx Xxxxx;
(ii) Xxxx Xxxxxxx; (iii) Xxx Xxxxxxx; (iv) C.A.S.E., a nonprofit
organization; and (v) up to five (5) additional persons, in
Consultant's sole discretion.
2.2. You further agree that, in exchange for the Company's
willingness to furnish you with the Confidential Information, you shall
not, during the pendency of your engagement as a consultant to the
Company, or within the six month period following termination of the
referenced
Consulting and Settlement Agreement, either directly or
indirectly, own, manage, operate, control, be an officer or director or
be employed by any Competitor (defined below); you will not induce,
directly or indirectly, solicit, or cause to be solicited, any employee
of the Company to leave his/her employment with the
10
Company; and you will not, directly or indirectly, solicit any
customers or clients of the Company that have done business with the
Company at any time or from time to time during the period of the
Consultant's business relationship hereunder for any business purpose
other than for the benefit of the Company. For purposes of this
Agreement, a "COMPETITOR" is defined as any person, corporation or
other entity which (i) is a telecommunications company of similar size
and mission as the Company anywhere within the United States or (ii)
with locations within a fifty (50) mile radius of Oklahoma City,
Oklahoma, that, at any time, sells or attempts to sell any products or
services which are the same as or similar to the products and services
sold or promoted by the Company at any time and from time to time
during the two (2) years immediately prior to the full execution of
this Agreement. Beneficial or record ownership of not more than five
percent (5%) of the outstanding capital stock of any publicly traded
corporation for which the Consultant performs no active management or
consulting services shall not be a violation of this Section 2.2
2.3. The restrictive covenants in this Section 2.1 and Section
2.2 are not intended to and shall not prohibit Consultant from
performing any obligations imposed on him by the Consulting and
Settlement Agreement and his consulting duties as set forth therein.
3. No Waiver. It is understood and agreed that no failure or delay by
the Company in exercising any right, power or privilege hereunder shall operate
as a waiver thereof, nor shall any single or partial exercise thereof preclude
any other or future exercise thereof or the exercise of any other right, power
or privilege hereunder.
4. Covenants Independent. Each restrictive covenant to which the
Consultant shall be obligated under this Agreement shall be construed as a
covenant independent of any other covenant or agreement to which the Company
shall be obligated, whether contained in this Agreement or any other, and
whether fully performed or executory, or any claim or cause of action directed
by the Consultant against the Company, predicated upon such other covenant or
agreement, except if based upon the Company's failure to make timely payment of
the remuneration to which the Consultant is entitled hereunder, shall not
constitute a defense to the enforcement by the Company of any of the
Consultant's covenants made hereunder.
5. Injunctive Relief. It is further understood and agreed that money
damages would not be sufficient remedy for any breach of this Agreement by you
and that the Company shall be entitled to equitable relief, including injunction
and specific performance, as a remedy for any such breach. Such remedies shall
not be deemed to be the exclusive remedies for a breach by you of this Agreement
but shall be in addition to all other remedies at law or equity to the Company.
In the event of litigation relating to this Agreement, if a court of competent
jurisdiction determines that you have breached this Agreement, then you shall be
liable and pay to the Company the reasonable legal fees incurred by the Company
in connection with such litigation, including any appeal therefrom.
6. Governing Law. This Agreement is for the benefit of the Company and
its directors, officers, stockholders, affiliates and agents, and shall be
governed by and construed in
11
accordance with the laws of the State of Oklahoma. You also hereby irrevocably
and unconditionally consent to submit to the exclusive jurisdiction of the
courts of the State of Oklahoma and of the United States of America located in
the State of Oklahoma for any actions, suits or proceedings arising out of or
relating to this Agreement and the transactions contemplated hereby (and you
agree not to commence any action, suit or proceeding relating thereto except in
such courts), and further agree that service of any process, summons, notice or
document by United States registered mail to your address set forth above shall
be effective service of process for any action, suit or proceeding brought
against you in any such court. You hereby irrevocable and unconditionally waive
any objection to the laying of venue of any action, suit or proceeding arising
out of this Agreement or the transactions contemplated hereby, in the courts of
the State of Oklahoma or the United States of America located in the State of
Oklahoma and hereby further irrevocably and unconditionally waive and agree not
to plead or claim in any such court that any such action, suit or proceeding
brought in any court has been brought in an inconvenient forum.
7. Counterparts. This Agreement may be executed and delivered
(including by facsimile transmission) in any number of counterparts, each of
which shall be an original, but all of which, together shall constitute one and
the same instrument.
8. Capitalized Terms. Each capitalized term used herein and not
otherwise defined herein shall have the meaning given such term in the
Consulting and Settlement Agreement or the Employment Agreement.
9. Severability and Reformation. Whenever possible, each provision and
term of this Agreement will be interpreted in a manner to be effective and
valid, but if any provision or term of this Agreement is held to be prohibited
by law or invalid, then such provision or term will be ineffective only to the
extent of such prohibition or invalidity, without invalidating or affecting in
any manner whatsoever the remainder of such provision or term or the remaining
provisions or terms of this Agreement. If any of the covenants set forth in this
Agreement are held by a court of competent jurisdiction to contain limitations
as to time, geographical area or scope of activity to be restrained that are not
reasonable and impose a greater restraint than is necessary, the court shall
reform the covenants to the extent necessary to cause the limitations contained
in the covenants as to time, geographical area and scope of activity to be
restrained to be reasonable and to impose a restraint that is not greater than
necessary and to enforce the covenants as reformed.
10. Integration. This Agreement constitutes the entire understanding
between Consultant and the Company relating the subject matter contained in this
Agreement and supercedes any previous oral or written communications,
representations, warranties, covenants, understanding or agreements between the
Consultant and the Company relating to the subject matter of this Agreement.
[SIGNATURE PAGE TO AGREEMENT TO FOLLOW]
12
[BLANK BY INTENT]
KRK
SDH
13
[SIGNATURE PAGE TO AGREEMENT]
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the 26th day of June, 2002.
AMERIVISION COMMUNICATIONS, INC.
By: /s/ XXXXXXX X. XXXXX
----------------------------------------
Name: Xxxxxxx X. Xxxxx
--------------------------------------
Title: Chairman/CEO
-------------------------------------
/s/ XXXXXXX X. XXXXXXXX
--------------------------------------------
XXXXXXX X. XXXXXXXX
14
CONFIDENTIALITY AND NON-COMPETITION AGREEMENT
This CONFIDENTIALITY AND NON-COMPETITION AGREEMENT (the "AGREEMENT") is
effective as of the 26th day of June, 2002, by and between Xxxxxxx X. Xxxxxxxx,
an individual ("CONSULTANT" or "YOU"), and AmeriVision Communications, Inc., an
Oklahoma corporation (the "COMPANY").
WITNESSETH:
WHEREAS, Consultant, the Company, and Xxxxx Xxxxxx, an individual (the
"STOCKHOLDER"), entered into that certain Amended and Restated Employment
Agreement dated May 26, 2000, as amended (the agreement and its amendments
thereof to be referred to as the "EMPLOYMENT AGREEMENT" herein), which provides
for the employment of the Consultant by the Company in an executive capacity
pursuant to the terms and conditions thereof; and
WHEREAS, Consultant and the Company entered into a certain
Acknowledgment and Agreement dated as of January 1, 2002 (the "ACKNOWLEDGMENT
and AGREEMENT"), pursuant to which Consultant terminated his employment with the
Company for "Good Reason" under Section 8(e) of the Employment Agreement and
pursuant to which the Company acknowledged and agreed that there was a
termination of Consultant's employment for Good Reason pursuant to the
Employment Agreement; and
WHEREAS, the Company is the maker of that certain Promissory Note,
dated the date hereof, and payable to Consultant (the "PROMISSORY NOTE") to
which Consultant shall be paid amounts owed to him by the Company as a result of
his "Good Reason" termination under Section 8(e) of the Employment Agreement and
to which Consultant shall be granted, among other rights, the right to observe
board meetings of the Company, conditioned on the execution and delivery of this
certain Agreement; and
WHEREAS, Consultant and the Company have entered into that certain
Consulting and Settlement Agreement dated as of January 1, 2002 (the "CONSULTING
AND SETTLEMENT AGREEMENT"), pursuant to which Consultant will agree to defer
certain rights and severance benefits under the Employment Agreement as a result
of "Good Reason" termination provided under Section 8(e) of the Employment
Agreement and to provide certain consulting services in consideration for the
Company providing Consultant with certain continuing benefits and other valuable
consideration; and
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
1. Confidential Information.
1.1. In connection with your appointment, under the terms of
that certain Consulting and Settlement Agreement, dated January 1,
2002, by and between yourself and the Company, to the position of
consultant to the Company and its board of directors,
1
and in connection with that certain Promissory Note, dated the date
hereof, by and between yourself and the Company, it is expected that
you will have access to information concerning the Company and its
affairs which will not have been made available to the public at the
time of its dissemination to board members. Accordingly, as a condition
precedent to: (a) your engagement as such a consultant, (b) your
permitted attendance at meetings of the Company's board of directors or
of any board committee, and (c) your receipt of information, whether in
oral or written form at any such meeting or in another form of
dissemination by or on behalf of the Company to or among board members
(all such information being hereinafter collectively referred to as the
"CONFIDENTIAL INFORMATION") the Company has indicated that it must be
in receipt of your assurance that you are willing to treat all such
Confidential Information, whether prepared by or on behalf of the
Company and irrespective of the form of communication by which it is
delivered, confidentially and to refrain from discussing or otherwise
releasing the same to anyone other than a member of the Company's board
of directors until such time as it shall have been released to the
public in the form of a press announcement or by way of a filing made
with the United State Securities and Exchange Commission (the
"COMMISSION") or you shall have received permission to do so in written
form from the Chairman of the Company's board of directors. Your
execution and delivery of a counterpart copy of this Agreement
evidences the Company's receipt of such assurance.
1.2. For purposes of this Agreement, Confidential Information
shall not be deemed to include information which (i) is or becomes
generally available to the public other than as a result of a
disclosure by you; (ii) was within your possession prior to its being
furnished to you by or on behalf of the Company pursuant hereto,
provided that the source of such information was not known by you to be
bound by a confidentiality agreement with or other contractual, legal
or fiduciary obligation of confidentiality to the Company or any other
party with respect to such information, and provided further that
within one business day following your receipt of such information, you
furnish to the Company a written statement identifying the source of
such previously received information and the circumstances surrounding
your receipt thereof; or (iii) becomes available to you on a
non-confidential basis from a source other than the Company or any of
its representatives, provided that such source is not bound by a
confidentiality agreement with or other contractual, legal or fiduciary
obligation of confidentiality to the Company or any other party with
respect to such information.
1.3. Notwithstanding the foregoing, you may make disclosure of
Confidential Information if you have received the written opinion of
your outside counsel that such disclosure must be made by you in order
that you not commit a violation of law. In the event that you are
requested or required (by oral questions, interrogatories, requests for
information or documents in legal proceedings, subpoenas, civil
investigative demand or other similar process) to disclose any of the
Confidential Information, you shall provide the Company with prompt
written notice of any such request or requirement so that the Company
may seek a protective order or other appropriate remedy and/or waive
compliance with the provisions of this Agreement. If, in the absence of
a protective order or other remedy or the receipt of a waiver by the
Company, you are nonetheless, in the
2
written opinion of your counsel, legally compelled to disclose
Confidential Information to any tribunal or else stand liable for
contempt or suffer other censure or penalty, you may, without liability
hereunder, disclose to such tribunal only that portion of the
Confidential Information which such counsel advises you is legally
required to be disclosed, provided that you exercise your best efforts
to preserve the confidentiality of the Confidential Information,
including, without limitations, by cooperating with the Company to
obtain an appropriate protective order or other reliable assurance that
confidential treatment will be accorded the Confidential Information by
such tribunal.
2. Restrictive Covenants.
2.1. You agree that, in exchange for the Company's willingness
to furnish you with the Confidential Information, you shall not, during
the pendency of your engagement as a consultant to the Company, or
within the six month period following termination of the referenced
Consulting and Settlement Agreement, either directly or indirectly,
unless any of the following actions shall have been specifically
invited or authorized in writing by the Company, (a) effect or seek,
offer or propose (whether publicly or otherwise) to effect, or cause to
participate in or in any way assist any other person to effect or seek,
offer or propose (whether publicly or otherwise) to effect, or cause or
participate in, (i) any tender or exchange offer, merger or other
business combination involving the Company or any of its subsidiaries;
(ii) any recapitalization, restructuring, liquidation, dissolution or
other extraordinary transaction with respect to the Company or any of
its subsidiaries; or (iii) any "solicitation of proxies" (as such terms
are used in the Commission's proxy rules), consents or other
authorizations to vote any voting securities of the Company; (b) form,
join or in any way participate in a "group" (as defined under the
Securities Exchange Act of 1934, as amended) or otherwise act, alone or
in concert with others, to seek to control or influence the management,
Board of Directors or policies of the Company; (c) take any action
which might force the Company to make a public announcement regarding
any of the types of matters set forth in (a) above; or (d) enter into
any discussions or arrangements with any third party with respect to
any of the foregoing. Notwithstanding the foregoing, (a) there shall be
no restriction on your purchase or sale, directly or indirectly, of any
securities of, or voting rights with respect to, the Company or any of
its subsidiaries, whether by way of private or open market
transactions; and (b) Consultant shall, at all times, be permitted to
solicit or obtain proxies from the following persons: (i) Xxxxx Xxxxx;
(ii) Xxxx Xxxxxxx; (iii) Xxx Xxxxxxx; (iv) C.A.S.E., a nonprofit
organization; and (v) up to five (5) additional persons, in
Consultant's sole discretion.
2.2. You further agree that, in exchange for the Company's
willingness to furnish you with the Confidential Information, you shall
not, during the pendency of your engagement as a consultant to the
Company, or within the six month period following termination of the
referenced Consulting and Settlement Agreement, either directly or
indirectly, own, manage, operate, control, be an officer or director or
be employed by any Competitor (defined below); you will not induce,
directly or indirectly, solicit, or cause to be solicited, any employee
of the Company to leave his/her employment with the Company; and you
will not, directly or indirectly, solicit any customers or clients of
the
3
Company that have done business with the Company at any time or from
time to time during the period of the Consultant's business
relationship hereunder for any business purpose other than for the
benefit of the Company. For purposes of this Agreement, a "COMPETITOR"
is defined as any person, corporation or other entity which (i) is a
telecommunications company of similar size and mission as the Company
anywhere within the United States or (ii) with locations within a fifty
(50) mile radius of Oklahoma City, Oklahoma, that, at any time, sells
or attempts to sell any products or services which are the same as or
similar to the products and services sold or promoted by the Company at
any time and from time to time during the two (2) years immediately
prior to the full execution of this Agreement. Beneficial or record
ownership of not more than five percent (5%) of the outstanding capital
stock of any publicly traded corporation for which the Consultant
performs no active management or consulting services shall not be a
violation of this Section 2.2.
2.3. The restrictive covenants in this Section 2.1 and Section
2.2 are not intended to and shall not prohibit Consultant from
performing any obligations imposed on him by the Consulting and
Settlement Agreement and his consulting duties as set forth therein.
3. No Waiver. It is understood and agreed that no failure or delay by
the Company in exercising any right, power or privilege hereunder shall operate
as a waiver thereof, nor shall any single or partial exercise thereof preclude
any other or future exercise thereof or the exercise of any other right, power
or privilege hereunder.
4. Covenants Independent. Each restrictive covenant to which the
Consultant shall be obligated under this Agreement shall be construed as a
covenant independent of any other covenant or agreement to which the Company
shall be obligated, whether contained in this Agreement or any other, and
whether fully performed or executory, or any claim or cause of action directed
by the Consultant against the Company, predicated upon such other covenant or
agreement, except if based upon the Company's failure to make timely payment of
the remuneration to which the Consultant is entitled hereunder, shall not
constitute a defense to the enforcement by the Company of any of the
Consultant's covenants made hereunder.
5. Injunctive Relief. It is further understood and agreed that money
damages would not be sufficient remedy for any breach of this Agreement by you
and that the Company shall be entitled to equitable relief, including injunction
and specific performance, as a remedy for any such breach. Such remedies shall
not be deemed to be the exclusive remedies for a breach by you of this Agreement
but shall be in addition to all other remedies at law or equity to the Company.
In the event of litigation relating to this Agreement, if a court of competent
jurisdiction determines that you have breached this Agreement, then you shall be
liable and pay to the Company the reasonable legal fees incurred by the Company
in connection with such litigation, including any appeal therefrom.
6. Governing Law. This Agreement is for the benefit of the Company and
its directors, officers, stockholders, affiliates and agents, and shall be
governed by and construed in accordance with the laws of the State of Oklahoma.
You also hereby irrevocably and
4
unconditionally consent to submit to the exclusive jurisdiction of the courts of
the State of Oklahoma and of the United States of America located in the State
of Oklahoma for any actions, suits or proceedings arising out of or relating to
this Agreement and the transactions contemplated hereby (and you agree not to
commence any action, suit or proceeding relating thereto except in such courts),
and further agree that service of any process, summons, notice or document by
United States registered mail to your address set forth above shall be effective
service of process for any action, suit or proceeding brought against you in any
such court. You hereby irrevocable and unconditionally waive any objection to
the laying of venue of any action, suit or proceeding arising out of this
Agreement or the transactions contemplated hereby, in the courts of the State of
Oklahoma or the United States of America located in the State of Oklahoma and
hereby further irrevocably and unconditionally waive and agree not to plead or
claim in any such court that any such action, suit or proceeding brought in any
court has been brought in an inconvenient forum.
7. Counterparts. This Agreement may be executed and delivered
(including by facsimile transmission) in any number of counterparts, each of
which shall be an original, but all of which, together shall constitute one and
the same instrument.
8. Capitalized Terms. Each capitalized term used herein and not
otherwise defined herein shall have the meaning given such term in the
Consulting and Settlement Agreement or the Employment Agreement.
9. Severability and Reformation. Whenever possible, each provision and
term of this Agreement will be interpreted in a manner to be effective and
valid, but if any provision or term of this Agreement is held to be prohibited
by law or invalid, then such provision or term will be ineffective only to the
extent of such prohibition or invalidity, without invalidating or affecting in
any manner whatsoever the remainder of such provision or term or the remaining
provisions or terms of this Agreement. If any of the covenants set forth in this
Agreement are held by a court of competent jurisdiction to contain limitations
as to time, geographical area or scope of activity to be restrained that are not
reasonable and impose a greater restraint than is necessary, the court shall
reform the covenants to the extent necessary to cause the limitations contained
in the covenants as to time, geographical area and scope of activity to be
restrained to be reasonable and to impose a restraint that is not greater than
necessary and to enforce the covenants as reformed.
10. Integration. This Agreement constitutes the entire understanding
between Consultant and the Company relating the subject matter contained in this
Agreement and supercedes any previous oral or written communications,
representations, warranties, covenants, understanding or agreements between the
Consultant and the Company relating to the subject matter of this Agreement.
[SIGNATURE PAGE TO AGREEMENT TO FOLLOW]
5
[SIGNATURE PAGE TO AGREEMENT]
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the 26th day of June, 2002.
AMERIVISION COMMUNICATIONS, INC.
By: /s/ XXXXXXX X. XXXXX
----------------------------------------
Name: Xxxxxxx X. Xxxxx
--------------------------------------
Title: Chairman/CEO
-------------------------------------
/s/ XXXXXXX X. XXXXXXXX
--------------------------------------------
XXXXXXX X. XXXXXXXX
6
PROMISSORY NOTE
FACE AMOUNT: $2,011,456
INTEREST RATE: 4.36% per year
TERM: 54 months
FIRST PAYMENT DUE: July 10, 2002
1. FOR VALUE RECEIVED, AmeriVision Communications, Inc., an Oklahoma
corporation, with its principal office in Oklahoma City, Oklahoma ("MAKER" or
the "COMPANY"), hereby unconditionally promises to pay to the order of Xxxxxxx
X. Xxxxxxxx, or his assignee ("HOLDER"), in collected funds the principal sum of
TWO MILLION ELEVEN THOUSAND FOUR HUNDRED FIFTY-SIX & 00/100 DOLLARS
($2,011,456.00) in fifty four (54) monthly payments (the "TERM"), at 4.36%
interest (This note shall be referred to herein as the "NOTE"). The payment
schedule for the Note is as follows:
a) $ 45,220.00 per month for the first month (July
2002);
b) $ 41,300.00 per month for the next fifty-two (52)
months (August 2002 through November 2006); and
c) $ 23,836.00 per month for the last month (December
2006).
1.1. Payment Due Date. Each monthly payment due under this
Note shall be payable on the 10th day of each calendar month, beginning
with the 10th of July 2002, and will become past due, and thus
constitute an Event of Default (as defined in Section 3 herein), if not
mailed to the Holder and postmarked on or before the 20th day of each
calendar month. All past due principal on this Note will, at Holder's
option, bear interest at a rate of twelve percent (12%) per annum until
the date of payment (the "PENALTY INTEREST"). Such interest shall be
computed on the basis of a 365-day year for the actual number of days
elapsed.
1.2 Interest and Allocation of Payments. The interest provided
in the first paragraph of Section 1 of this Note shall accrue
throughout the Term on the unpaid principal balance at the rate
specified above, and shall be payable and due at maturity, subject to
the payment allocation specified below:
a) The first $3,800.00 of each monthly payment specified
in Section 1 above will be credited to unpaid,
accrued interest (if any) as of the date of payment
(the "CURRENTLY PAYABLE INTEREST"). The Currently
Payable Interest shall not accrue interest during the
Term.
b) Any unpaid, accrued interest beyond the Currently
Payable Interest (such amount to be referred to as
the "UNPAID ACCRUED INTEREST") shall not accrue
interest during the Term.
c) The balance of each monthly payment specified in
Section 1 above in excess of $3,800.00 shall be
credited to the outstanding principal balance.
1
1.3. Instructions for Payment. All payments of principal,
interest and other amounts payable on or in respect of this note or the
indebtedness evidenced hereby shall be made to Holder in U.S. dollars,
by a Company check or by wire transfer, upon the sole discretion of
Holder or his assigns. Maker shall make such payments of principal and
interest to Holder at the address of Holder set forth on the signature
page hereto or at such other place or pursuant to wire transfer
instructions as Holder shall have notified Maker in writing.
2. Special Provisions.
2.1. Prepayable. This Note is prepayable from time to time in
whole or in part. Prepayments shall be credited first, to the reduction
of Penalty Interest, if any, and second, to the reduction of the last
maturing principal payments of This Note.
2.2. No Set-Off. All payments on or in respect of this Note or
the indebtedness evidenced hereby shall be made to Holder without
set-off or counterclaim and free and clear of and without any
deductions of any kind.
3. Event of Default. Notwithstanding the foregoing, the principal debt
owing by Maker under this Note, together with any Penalty Interest or Currently
Payable Interest (as may accrue under Section 1.2 hereof), but excluding and
forgiving any Unpaid Accrued Interest, shall be immediately due and payable,
upon written demand by the Holder to Maker (with such written demand not being
required in the event of default described in Section 3.1), in the event of the
occurrence and continuation of any of the following (each an "EVENT OF
DEFAULT"):
3.1. Breach of Timely Payment. Maker fails to make a timely
payment of the monthly installment as provided in Section 1 herein. In
this Section 3.1, the entire unpaid principal and all unpaid Penalty
Interest and Currently Payable Interest, but excluding and forgiving
any Unpaid Accrued Interest, of this Note shall become immediately due
and owing, without notice, demand or presentment to Maker. Moreover, in
this Section 3.1, Maker and each surety, endorser and guarantor waive
all demands for payment, presentations for payment, notices of
intention to accelerate maturity, notices of acceleration of maturity,
protests and notices of protest, to the extent permitted by law;
3.2. Breach of Obligation or Covenant. A material breach of
any obligation or covenant under this Note or any other obligation,
covenant, or liability contained or referred to in this Note;
3.3. Breach of Representation or Warranty. Any warranty,
representation, or statement made or furnished to the Holder by or on
behalf of Maker proves to be or to have been false in any material
respect;
3.4. Bankruptcy. Maker (a) files (or consents to the filing
of) any petition or complaint pursuant to federal or state bankruptcy
or insolvency laws seeking the appointment of a receiver or trustee for
any of its assets, seeking the adjudication of Maker as bankrupt or
insolvent, seeking an "order for relief" under such statutes, or
seeking a reorganization of or a plan of arrangement for Maker and (b)
such petition is
2
not dismissed within sixty (60) days after the filing thereof or Maker
makes a general assignment for the benefit of its creditors;
3.5. Change in Control. A Change in Control (as defined below)
of Maker. For the purposes of this Note, "CHANGE IN CONTROL" shall mean
(a) the sale, lease or other transfer of all or substantially all of
the assets of Maker to any person or group (as such term is used in
Section 13(d)(3) of the Securities Exchange Act of 1934, as amended
("SECTION 13(d)(3)"); (b) the adoption by the stockholders of Maker of
a plan relating to the liquidation or dissolution of Maker; (c) the
merger or consolidation of Maker with or into another entity or the
merger of another entity into Maker or any subsidiary thereof with the
effect that immediately after such transaction the stockholders of
Maker immediately prior to such transaction directly and indirectly
hold less than fifty percent (50%) of the total voting power of all
securities generally entitled to vote in the election of directors,
managers or trustees of the entity surviving such merger or
consolidation; (d) the acquisition by any person or group (as such term
is used in Section 13(d)(3)) of more than fifty percent (50%) of the
direct and indirect voting power of all securities of Maker generally
entitled to vote in the election of directors of Maker; or (e) the
majority of Maker's Board of Directors being composed of members, other
than the current directors as of January 1, 2002, who have served less
than twelve (12) consecutive months; or
3.6. Dividends and other Distributions. Within any calendar
quarter, Maker pays dividends or share redemption payments or makes any
other distribution with respect to its capital stock that violates any
of the Company's bank loan covenants, including those of Coast Business
Credit, and including a covenant that may state, in substantially the
same form as hereinafter provided, that such dividends, share
redemption payments or other distributions shall not exceed, in the
aggregate, a specified percentage of Maker's "quarterly net earnings",
with such quoted term being deemed to consist of Maker's net income
after tax (excluding extraordinary gains), confirmed by reference to
Maker's quarterly financial statements, prepared in accordance with
generally accepted accounting principles. In the event that, during the
Term of this Note, a Company's lender waives any bank loan covenant or
a portion thereof, including the percentage limitation above, in
connection with an extension of credit to the Company, then Holder's
acceptance and consent of such waiver is hereby deemed to have been
granted and shall not violate this Section 3.6; provided, however,
Maker shall give written notice to Holder within fifteen (15) days of
any such waiver.
4. Costs of Collection or Enforcement. If at any time this Note is
placed in the hands of an attorney for collection, or if suit is brought for
collection or enforcement, or if it is collected through bankruptcy or other
judicial proceeding, then Maker agrees to pay all costs of collection and
enforcement, including reasonable attorney's fees and court costs, together with
any Penalty Interest or Currently Payable Interest.
5. No Waiver. Neither a delay on the part of Holder in the exercise of
any power or right under this Note, nor a single or partial exercise of any such
power or right, shall operate as a waiver thereof. Enforcement by Holder of any
of its rights hereunder shall not constitute an election by it of remedies so as
to preclude the exercise of any other remedy available to it.
6. Covenants.
3
6.1. Board Observer Rights. Upon the Holder's execution and
delivery of a counterpart copy of a Confidentiality and Non-Competition
Agreement in the form of Exhibit A hereto (the "CONFIDENTIALITY AND
NON-COMPETITION AGREEMENT") and, subject to his future performance in
accordance with its terms and the terms of the Consulting and
Settlement Agreement, continuing until the termination of that
agreement, Xx. Xxxxxxxx may, as a non-voting and unpaid observer,
attend all meetings of the Company's Board of Directors and shall be
provided with copies of all notices, minutes, information and other
materials generated with respect to such meetings that Maker provides
to its directors, when and as such materials are delivered to the
directors.
6.2. Right to Receive Financial Statements.
6.2.1. Maker shall provide Holder as soon as
practicable after the end of each fiscal quarter, and in any
event within forty-five (45) days, unaudited consolidated
balance sheets of Maker and its subsidiaries, if any, as of
the end of such fiscal quarter, unaudited statements of
income, statements of changes in financial condition,
statements of cash flow of Maker and its subsidiaries and
statements of shareholders' equity for such period and for the
current fiscal year to date, and setting forth in each case in
comparative form the figures for corresponding periods in the
previous fiscal year, and setting forth in comparative form
the budgeted figures, prepared in accordance with generally
accepted accounting principles.
6.2.2. Maker shall provide Holder as soon as
practicable after the end of each month, and in any event
within thirty (30) days, monthly financial statements in
substantially the same format as currently prepared by Maker
in accordance with past practice.
7. Representations of Maker. Maker makes the following representations
and warranties to Holder:
7.1. Corporate Status. Maker is a corporation duly
incorporated, validly existing, and in good standing under the laws of
the State of Oklahoma.
7.2. Authorization. All corporate action on the part of Maker
and its officers, directors and shareholders necessary for Maker to
execute and perform its obligations under this Note has been taken.
7.3. Validity of Note. This Note is a legally valid and
binding obligation of Maker. The issuance of this Note does not and
will not violate any agreements to which Maker is, or at the time of
issuance will be, a party.
8. Miscellaneous.
8.1. Further Assurances. Each party agrees to cooperate fully
with the other party and to execute such further instruments, documents
and agreements and to give such further written assurances, as may be
reasonably requested by any other party to
4
evidence and reflect the transactions described herein and contemplated
hereby, and to carry into effect the intents and purposes of this Note.
8.2. Rights Cumulative. Each and all of the various rights,
powers and remedies of the parties hereto shall be considered to be
cumulative with and in addition to any other rights, powers and
remedies which such parties may have at law or in equity in the event
of the breach of any of the terms of this Note. The exercise or partial
exercise of any right, power or remedy shall neither constitute the
exclusive election thereof nor the waiver of any other right, power or
remedy available to such party.
8.3. Notices. All notices (including other communications
required or permitted) under this Note must be in writing and must be
delivered (a) in person; (b) by registered or certified mail, postage
prepaid, return receipt requested; (c) by a generally recognized
courier or messenger service that provides written acknowledgement of
receipt by the addressee; or (d) by facsimile or other generally
accepted means of electronic transmission with a verification of
delivery. Notices are deemed delivered when actually delivered to the
address for notices. Notices to Holder must be given to its last known
address appearing on the books of Maker and notices to Maker must be
given at its principal executive office. Any party may furnish, from
time to time, other addresses for notices to it.
8.4. Severability. The provisions of this Note are severable.
The invalidity, in whole or in part, of any provision of this Note
shall not affect the validity or enforceability of any other of its
provisions. If one or more provisions hereof shall be declared invalid
or unenforceable, the remaining provisions shall remain in full force
and effect and shall be construed in the broadest possible manner to
effectuate the purposes of this Note. The parties further agree to
replace such void or unenforceable provisions of this Note with valid
and enforceable provisions which will achieve, to the extent possible,
the economic, business and other purposes of the void or unenforceable
provisions.
8.5. Headings; Attachments; References. The headings in this
Note are only for convenience and ease of reference and are not to be
considered in construction or interpretation of this Note, nor as
evidence of the intention of the parties hereto. All exhibits,
schedules and appendices attached to this Note are incorporated herein.
Except where otherwise indicated, all references in this Note to
Sections refer to Sections of this Note.
8.6. Amendments; Modifications. Any provision of this Note may
be amended or modified upon the written consent of all parties to this
Note.
8.7. Waivers; Extensions of Time. Any party hereto may by a
writing signed by an authorized representative of such party: (i)
extend the time for the performance of any of the obligations of
another party; (ii) waive any inaccuracies in representations and
warranties made by another party contained in this Note or in any
documents delivered pursuant hereto; or (iii) waive the compliance with
any term, provision, covenant, requirement or condition of this Note.
Any extension of time or waive must be in writing and shall be
effective only to the extent specifically set forth in such writing.
5
8.8. Delays or Omissions. No delay or failure by any party to
insist on the strict performance of any provision of this Note, or to
exercise any power, fight or remedy, will be deemed a waiver or
impairment of such performance, power, right or remedy or of any other
provision of this Note nor shall it be construed to be a waiver of any
breach or default, or an acquiescence therein, or of or in any similar
breach or default thereafter occurring.
8.9. Interpretation. If any claim is made by a party relating
to any conflict, omission or ambiguity in the provisions of this Note,
no presumption or burden of proof or persuasion will be implied because
this Note was prepared by or at the request of any party or its
counsel.
8.10. Governing Law. This Note shall be governed by and
construed in accordance with the laws of the State of Oklahoma,
excluding that body of law relating to conflict of laws.
8.11. Successors and Assigns. Except as otherwise provided
herein, the provisions hereof shall inure to the benefit of, and be
binding upon, the successors, assigns, heirs, executors and
administrators of the parties hereto.
8.12. Survival. The representations, warranties and agreements
in this Note shall survive the execution of this Note without regard to
any investigation made by any party. All statements as to factual
matters contained in any certificates, exhibits or other instruments
delivered by or on behalf of any party pursuant to the terms hereof or
in connection with the transactions contemplated hereby shall be
deemed, for all purposes, to constitute representations and warranties
by such party under the terms of this Note given as of the date of such
certificate or instrument.
8.13. Specific Performance. It might be impossible to measure
in money the damage to a party if another party fails to comply with
any provision of this Note. If any such failure occurs, the party might
not have an adequate remedy at law or in damages. Therefore, each party
may seek the issuance of an injunction and the enforcement of other
equitable remedies against it to compel performance of any obligation,
covenant or liability contained or referred to in this Note.
8.14. Additional Documents and Acts. Each party will execute
and deliver such additional documents and instruments, and perform such
additional acts, as are commercially reasonable and necessary to carry
out and perform its obligations in this Note.
8.15. Binding Effect; Parties in Interest This Note is binding
upon and benefits only the parties and their respective permitted
successors and assigns. Nothing in this Note gives any rights or
remedies to any person other than the parties and their respective
permitted successors and assigns, nor does anything in this Note
relieve or discharge any obligation or liability of any third person to
any party. No provision of this Note gives any third person any right
of subrogation or action over or against any party to this Note.
6
8.16. Usury Laws. It is the intention of Maker and Holder to
conform strictly to applicable usury laws. Accordingly, notwithstanding
any provision to the contrary in this Note, the aggregate of all
interest and any other charges or consideration constituting interest
under applicable usury law that is taken, reserved, contracted for,
charged or received under this Note or otherwise in connection with
this transaction shall under no circumstances exceed the maximum amount
of interest allowed by the usury law applicable to this transaction. If
any excess interest charge or consideration in such respect is taken,
reserved, contracted for, charged, received or provided for, or shall
be adjudicated to be so taken, reserved, contracted for, charged,
received or provided for, in this Note, whether by the terms of this
Note or because the maturity of the indebtedness evidenced by this Note
is accelerated for any reason, or in the event of any required or
permitted prepayment, then in any such event (a) the provisions of this
paragraph shall govern and control, (b) neither Maker nor Maker's
heirs, executors, administrators, legal representatives, successors or
assigns or any other liable party shall be obligated to pay the amount
of such interest to the extent that it is in excess of the legal limit
for interest rates, (c) any excess shall be deemed a mistake and
cancelled automatically and, if theretofore paid, shall be credited on
this Note by the Holder hereof (or if this Note shall have been paid in
full, refunded to Maker) and (d) the effective rate of interest shall
be automatically subject to reduction to the maximum interest rate
allowed by law as the law may now or hereafter be construed by courts
of appropriate jurisdiction. Without limiting the foregoing, all
calculations of the rate of interest taken, reserved, contracted for,
charged, received or provided for under this Note which are made for
the purpose of determining whether the interest rate exceeds the legal
limit for interest rates, shall be made, to the extent allowed by law,
by amortizing, prorating, allocating and spreading in equal parts
during the period of the full stated term of the Note evidenced hereby,
all interest at any time taken, reserved, contracted for, charged,
received or provided for under this Note.
[SIGNATURE PAGE TO FOLLOW]
7
[SIGNATURE PAGE TO NOTE]
Dated this 26th day of June, 2002.
/s/ XXXXXXX X. XXXXX
------------------------------------
Xxxxxxx X. Xxxxx, Chairman/CEO
AmeriVision Communications, Inc.
ACKNOWLEDGMENT
STATE OF OKLAHOMA )
) ss.
COUNTY OF OKLAHOMA )
This instrument was signed and acknowledged before me on the 26 day of
June, 2002, by Maker.
/s/ XXXXXX XXXXXX
-----------------------------
Notary/Public
[L.S.]
My Commission Expires:
2-14-2004
----------------------
8
EXHIBIT A
FORM OF
CONFIDENTIALITY AND NON-COMPETITION AGREEMENT
This CONFIDENTIALITY AND NON-COMPETITION AGREEMENT (the "AGREEMENT") is
effective as of the 26th day of June, 2002, by and between Xxxxxxx X. Xxxxxxxx,
an individual ("CONSULTANT" or "YOU"), and AmeriVision Communications, Inc., an
Oklahoma corporation (the "COMPANY").
WITNESSETH:
WHEREAS, Consultant, the Company, and Xxxxx Xxxxxx, an individual (the
"STOCKHOLDER"), entered into that certain Amended and Restated Employment
Agreement dated May 26, 2000, as amended (the agreement and its amendments
thereof to be referred to as the "EMPLOYMENT AGREEMENT" herein), which provides
for the employment of the Consultant by the Company in an executive capacity
pursuant to the terms and conditions thereof; and
WHEREAS, Consultant and the Company entered into a certain
Acknowledgment and Agreement dated as of January 1, 2002 (the "ACKNOWLEDGMENT
AND AGREEMENT"), pursuant to which Consultant terminated his employment with the
Company for "Good Reason" under Section 8(e) of the Employment Agreement and
pursuant to which the Company acknowledged and agreed that there was a
termination of Consultant's employment for Good Reason pursuant to the
Employment Agreement; and
WHEREAS, the Company is the maker of that certain Promissory Note,
dated the date hereof, and payable to Consultant (the "PROMISSORY NOTE") to
which Consultant shall be paid amounts owed to him by the Company as a result of
his "Good Reason" termination under Section 8(e) of the Employment Agreement and
to which Consultant shall be granted, among other rights, the right to observe
board meetings of the Company, conditioned on the execution and delivery of this
certain Agreement; and
WHEREAS, Consultant and the Company have entered into that certain
Consulting and Settlement Agreement dated as of January 1, 2002 (the "CONSULTING
AND SETTLEMENT AGREEMENT"), pursuant to which Consultant will agree to defer
certain rights and severance benefits under the Employment Agreement as a result
of "Good Reason" termination provided under Section 8(e) of the Employment
Agreement and to provide certain consulting services in consideration for the
Company providing Consultant with certain continuing benefits and other valuable
consideration; and
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
1. Confidential Information.
1.1. In connection with your appointment, under the terms of
that certain Consulting and Settlement Agreement, dated January 1,
2002, by and between yourself and the Company, to the position of
consultant to the Company and its board of directors, and in connection
with that certain Promissory Note, dated the date hereof, by and
between yourself and the Company, it is expected that you will have
access to information concerning the Company and its affairs which will
not have been made available to the public at the time of its
dissemination to board members. Accordingly, as a condition precedent
to: (a) your engagement as such a consultant, (b) your permitted
attendance at meetings of the Company's board of directors or of any
board committee, and (c) your receipt of information, whether in oral
or written form at any such meeting or in another form of dissemination
by or on behalf of the Company to or among board members (all such
information being hereinafter collectively referred to as the
"CONFIDENTIAL INFORMATION") the Company has indicated that it must be
in receipt of your assurance that you are willing to treat all such
Confidential Information, whether prepared by or on behalf of the
Company and irrespective of the form of communication by which it is
delivered, confidentially and to refrain from discussing or otherwise
releasing the same to anyone other than a member of the Company's board
of directors until such time as it shall have been released to the
public in the form of a press announcement or by way of a filing made
with the United State Securities and Exchange Commission (the
"COMMISSION") or you shall have received permission to do so in written
form from the Chairman of the Company's board of directors. Your
execution and delivery of a counterpart copy of this Agreement
evidences the Company's receipt of such assurance.
1.2. For purposes of this Agreement, Confidential Information
shall not be deemed to include information which (i) is or becomes
generally available to the public other than as a result of a
disclosure by you; (ii) was within your possession prior to its being
furnished to you by or on behalf of the Company pursuant hereto,
provided that the source of such information was not known by you to be
bound by a confidentiality agreement with or other contractual, legal
or fiduciary obligation of confidentiality to the Company or any other
party with respect to such information, and provided further that
within one business day following your receipt of such information, you
furnish to the Company a written statement identifying the source of
such previously received information and the circumstances surrounding
your receipt thereof; or (iii) becomes available to you on a
non-confidential basis from a source other than the Company or any of
its representatives, provided that such source is not bound by a
confidentiality agreement with or other contractual, legal or fiduciary
obligation of confidentiality to the Company or any other party with
respect to such information.
1.3. Notwithstanding the foregoing, you may make disclosure of
Confidential Information if you have received the written opinion of
your outside counsel that such disclosure must be made by you in order
that you not commit a violation of law. In the event that you are
requested or required (by oral questions, interrogatories, requests for
information or documents in legal proceedings, subpoenas, civil
investigative demand or
10
other similar process) to disclose any of the Confidential Information,
you shall provide the Company with prompt written notice of any such
request or requirement so that the Company may seek a protective order
or other appropriate remedy and/or waive compliance with the provisions
of this Agreement. If, in the absence of a protective order or other
remedy or the receipt of a waiver by the Company, you are nonetheless,
in the written opinion of your counsel, legally compelled to disclose
Confidential Information to any tribunal or else stand liable for
contempt or suffer other censure or penalty, you may, without liability
hereunder, disclose to such tribunal only that portion of the
Confidential Information which such counsel advises you is legally
required to be disclosed, provided that you exercise your best efforts
to preserve the confidentiality of the Confidential Information,
including, without limitations, by cooperating with the Company to
obtain an appropriate protective order or other reliable assurance that
confidential treatment will be accorded the Confidential Information by
such tribunal.
2. Restrictive Covenants.
2.1. You agree that, in exchange for the Company's willingness
to furnish you with the Confidential Information, you shall not, during
the pendency of your engagement as a consultant to the Company, or
within the six month period following termination of the referenced
Consulting and Settlement Agreement, either directly or indirectly,
unless any of the following actions shall have been specifically
invited or authorized in writing by the Company, (a) effect or seek,
offer or propose (whether publicly or otherwise) to effect, or cause to
participate in or in any way assist any other person to effect or seek,
offer or propose (whether publicly or otherwise) to effect, or cause or
participate in, (i) any tender or exchange offer, merger or other
business combination involving the Company or any of its subsidiaries;
(ii) any recapitalization, restructuring, liquidation, dissolution or
other extraordinary transaction with respect to the Company or any of
its subsidiaries; or (iii) any "solicitation of proxies" (as such terms
are used in the Commission's proxy rules), consents or other
authorizations to vote any voting securities of the Company; (b) form,
join or in any way participate in a "group" (as defined under the
Securities Exchange Act of 1934, as amended) or otherwise act, alone or
in concert with others, to seek to control or influence the management,
Board of Directors or policies of the Company; (c) take any action
which might force the Company to make a public announcement regarding
any of the types of matters set forth in (a) above; or (d) enter into
any discussions or arrangements with any third party with respect to
any of the foregoing. Notwithstanding the foregoing, (a) there shall be
no restriction on your purchase or sale, directly or indirectly, of any
securities of, or voting rights with respect to, the Company or any of
its subsidiaries, whether by way of private or open market
transactions; and (b) Consultant shall, at all times, be permitted to
solicit or obtain proxies from the following persons: (i) Xxxxx Xxxxx;
(ii) Xxxx Xxxxxxx; (iii) Xxx Xxxxxxx; (iv) C.A.S.E., a nonprofit
organization; and (v) up to five (5) additional persons, in
Consultant's sole discretion.
2.2. You further agree that, in exchange for the Company's
willingness to furnish you with the Confidential Information, you shall
not, during the pendency of your engagement as a consultant to the
Company, or within the six month period following
11
termination of the referenced Consulting and Settlement Agreement,
either directly or indirectly, own, manage, operate, control, be an
officer or director or be employed by any Competitor (defined below);
you will not induce, directly or indirectly, solicit, or cause to be
solicited, any employee of the Company to leave his/her employment with
the Company; and you will not, directly or indirectly, solicit any
customers or clients of the Company that have done business with the
Company at any time or from time to time during the period of the
Consultant's business relationship hereunder for any business purpose
other than for the benefit of the Company. For purposes of this
Agreement, a "COMPETITOR" is defined as any person, corporation or
other entity which (i) is a telecommunications company of similar size
and mission as the Company anywhere within the United States or (ii)
with locations within a fifty (50) mile radius of Oklahoma City,
Oklahoma, that, at any time, sells or attempts to sell any products or
services which are the same as or similar to the products and services
sold or promoted by the Company at any time and from time to time
during the two (2) years immediately prior to the full execution of
this Agreement. Beneficial or record ownership of not more than five
percent (5%) of the outstanding capital stock of any publicly traded
corporation for which the Consultant performs no active management or
consulting services shall not be a violation of this Section 2.2.
2.3. The restrictive covenants in this Section 2.1 and Section
2.2 are not intended to and shall not prohibit Consultant from
performing any obligations imposed on him by the Consulting and
Settlement Agreement and his consulting duties as set forth therein.
3. No Waiver. It is understood and agreed that no failure or delay by
the Company in exercising any right, power or privilege hereunder shall operate
as a waiver thereof; nor shall any single or partial exercise thereof preclude
any other or future exercise thereof or the exercise of any other right, power
or privilege hereunder.
4. Covenants Independent Each restrictive covenant to which the
Consultant shall be obligated under this Agreement shall be construed as a
covenant independent of any other covenant or agreement to which the Company
shall be obligated, whether contained in this Agreement or any other, and
whether fully performed or executory, or any claim or cause of action directed
by the Consultant against the Company, predicated upon such other covenant or
agreement, except if based upon the Company's failure to make timely payment of
the remuneration to which the Consultant is entitled hereunder, shall not
constitute a defense to the enforcement by the Company of any of the
Consultant's covenants made hereunder.
5. Injunctive Relief It is further understood and agreed that money
damages would not be sufficient remedy for any breach of this Agreement by you
and that the Company shall be entitled to equitable relief; including injunction
and specific performance, as a remedy for any such breach. Such remedies shall
not be deemed to be the exclusive remedies for a breach by you of this Agreement
but shall be in addition to all other remedies at law or equity to the Company.
In the event of litigation relating to this Agreement, if a court of competent
jurisdiction determines that you have breached this Agreement, then you shall be
liable and pay
12
to the Company the reasonable legal fees incurred by the Company in connection
with such litigation, including any appeal therefrom.
6. Governing Law. This Agreement is for the benefit of the Company and
its directors, officers, stockholders, affiliates and agents, and shall be
governed by and construed in accordance with the laws of the State of Oklahoma.
You also hereby irrevocably and unconditionally consent to submit to the
exclusive jurisdiction of the courts of the State of Oklahoma and of the United
States of America located in the State of Oklahoma for any actions, suits or
proceedings arising out of or relating to this Agreement and the transactions
contemplated hereby (and you agree not to commence any action, suit or
proceeding relating thereto except in such courts), and further agree that
service of any process, summons, notice or document by United States registered
mail to your address set forth above shall be effective service of process for
any action, suit or proceeding brought against you in any such court. You hereby
irrevocable and unconditionally waive any objection to the laying of venue of
any action, suit or proceeding arising out of this Agreement or the transactions
contemplated hereby, in the courts of the State of Oklahoma or the United States
of America located in the State of Oklahoma and hereby further irrevocably and
unconditionally waive and agree not to plead or claim in any such court that any
such action, suit or proceeding brought in any court has been brought in an
inconvenient forum.
7. Counterparts. This Agreement may be executed and delivered
(including by facsimile transmission) in any number of counterparts, each of
which shall be an original, but all of which, together shall constitute one and
the same instrument.
8. Capitalized Terms. Each capitalized term used herein and not
otherwise defined herein shall have the meaning given such term in the
Consulting and Settlement Agreement or the Employment Agreement
9. Severability and Reformation. Whenever possible, each provision and
term of this Agreement will be interpreted in a manner to be effective and
valid, but if any provision or term of this Agreement is held to be prohibited
by law or invalid, then such provision or term will be ineffective only to the
extent of such prohibition or invalidity, without invalidating or affecting in
any manner whatsoever the remainder of such provision or term or the remaining
provisions or terms of this Agreement. If any of the covenants set forth in this
Agreement are held by a court of competent jurisdiction to contain limitations
as to time, geographical area or scope of activity to be restrained that are not
reasonable and impose a greater restraint than is necessary, the court shall
reform the covenants to the extent necessary to cause the limitations contained
in the covenants as to time, geographical area and scope of activity to be
restrained to be reasonable and to impose a restraint that is not greater than
necessary and to enforce the covenants as reformed.
10. Integration. This Agreement constitutes the entire understanding
between Consultant and the Company relating the subject matter contained in this
Agreement and supercedes any previous oral or written communications,
representations, warranties, covenants, understanding or agreements between the
Consultant and the Company relating to the subject matter of this Agreement.
13
[SIGNATURE PAGE TO AGREEMENT TO FOLLOW]
[SIGNATURE PAGE TO AGREEMENT]
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the 26 day of June, 2002.
AMERIVISION COMMUNICATIONS, INC.
By: XXXXXXX X. XXXXX
------------------------------------
Name: Xxxxxxx X. Xxxxx
----------------------------------
Title: Chairman/CEO
---------------------------------
/s/ XXXXXXX X. XXXXXXXX
----------------------------------------
XXXXXXX X. XXXXXXXX
14
ACKNOWLEDGMENT AND AGREEMENT
This ACKNOWLEDGMENT AND AGREEMENT (the "ACKNOWLEDGMENT AND AGREEMENT")
is effective as of January 1, 2002, by and between Xxxxxxx X. Xxxxxxxx, an
individual (the "EXECUTIVE"), and AmeriVision Communications, Inc., an Oklahoma
corporation (the "COMPANY").
WITNESSETH:
WHEREAS, the Executive, the Company, and Xxxxx Xxxxxx, an individual
(the "STOCKHOLDER"), entered into that certain Amended and Restated Employment
Agreement dated May 26, 2000, as amended (the "EMPLOYMENT AGREEMENT"), which
provides for the employment of the Executive by the Company pursuant to the
terms and conditions thereof; and
WHEREAS, there was, among other things, "a change of control within the
Company" as defined in Section 8(e) of the Employment Agreement ("CHANGE OF
CONTROL") in July of 2001, which constitutes a Good Reason for Executive to
terminate employment pursuant to Section 8(e) of the Employment Agreement
without the Executive being in breach of the Employment Agreement; and
WHEREAS, the Executive and the Company have entered into a certain
Consulting and Settlement Agreement dated the date hereof (the "CONSULTING AND
SETTLEMENT AGREEMENT"), pursuant to which Executive will agree to defer certain
rights and severance benefits under the Employment Agreement as a result of Good
Reason termination provided under Section 8(e) of the Employment Agreement and
to provide certain consulting services in consideration for the Company
providing the Executive with certain continuing benefits and other valuable
consideration.
NOW THEREFORE, all parties hereby acknowledge and agree to the terms
contained herein:
1. TERMINATION. The Executive hereby exercises his right, as of the
date hereof, to terminate his employment for Good Reason upon the occurrence of
a Change in Control of the Company pursuant to Section 8(e) of the Employment
Agreement.
2. ACKNOWLEDGMENTS.
a. The Company acknowledges and accepts that there was "a
change of control within the Company" as defined in Section 8(e) of the
Employment Agreement in July of 2001, which constitutes a Good Reason
for Executive to terminate employment pursuant to Section 8(e) of the
Employment Agreement without the Executive being in breach of the
Employment Agreement.
b. The Company acknowledges and accepts that the Executive has
fulfilled and satisfied all preexisting conditions for and has validly
and properly exercised his
1
right to terminate his employment for Good Reason under Section 8(e) of
the Employment Agreement.
c. The Company acknowledges that the Executive is relying on
this Acknowledgment and Agreement for purposes of entering into the
Consulting and Settlement Agreement dated concurrently herewith. The
Company acknowledges that the Executive would not have entered into the
Consulting and Settlement Agreement, but for the Company's execution of
this Acknowledgment and Agreement.
d. The Company acknowledges that the Executive is entitled to
the following severance benefits pursuant to Section 8(e) of the
Employment Agreement:
(i) to continue to receive his current annual Base
Compensation through May 24, 2004;
(ii) to receive additional payments equal to his
current annual Base Compensation payable over the 12-month
period following the date hereof (the effective date of the
termination of the Executive's employment);
(iii) to continue to receive full vesting of all
Stock Bonus and Stock Option Grants as provided in Sections 4
and 5 of the Employment Agreement;
(iv) to receive payment of a cash bonus at the time
of each vesting as described in Section 4 of the Employment
Agreement; and
(v) to receive all of the Executive's accrued, vested
and unpaid salary and benefits as of the date hereof,
including the CPI adjustment to his compensation as required
by Section 3 of the Employment Agreement. Pursuant to Section
3, a CPI adjustment is due for past compensation "effective on
the anniversary of February 1, 1999," and in addition the CPI
adjustment is necessary to calculate the amounts due in (i)
and (ii) above.
Without limiting the generality of the foregoing, the Company
acknowledges that Exhibit A ("PAYMENTS DUE") attached hereto provides a
complete and accurate depiction of the Executive's severance payments
under the Employment Agreement for a Good Reason termination of
service.
3. RELEASE BY COMPANY. In consideration of the Executive's entering
into the Consulting and Settlement Agreement and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
Company, for itself and on behalf of its successors, assigns and affiliates,
hereby releases and discharges the Executive from any claim, liability, damage,
cost, expense or other obligation of the Executive to the Company, whether known
or unknown, in law or in equity, which the Company or Company's successors,
assigns and affiliates ever had, now has or hereafter may have, including,
without limitation for, upon or by reason of any matter, cause, event or thing
whatsoever from the beginning of the world to the date hereof.
2
4. REPRESENTATIONS AND WARRANTIES. The Company represents and warrants
to Executive as follows:
a. The Company has the power to enter into this Acknowledgment
and Agreement and to perform its obligations under this Acknowledgment
and Agreement and has taken all necessary action to authorize such
execution, delivery, and performance.
b. This Acknowledgment and Agreement does not and will not
violate or conflict with any law applicable to it, and provision of its
organizational documents, any order of judgment of any court or other
agency of government applicable to it or any of its assets or any
contractual restrictions binding on or affecting it or any of its
assets; and
c. The Company's obligations under this Acknowledgment and
Agreement constitute its legal, valid and binding obligations,
enforceable in accordance with their respective terms (subject to
applicable bankruptcy, reorganization, insolvency, moratorium, or
similar laws affecting creditors' rights generally and subject, as to
enforceability, to equitable principles of general application
(regardless of whether enforcement is sought in a proceeding in equity
or at law)).
5. CAPITALIZED TERMS. Each capitalized term used herein and not
otherwise defined herein shall have the meaning given such term in the
Employment Agreement.
6. GOVERNING LAW. This Acknowledgment and Agreement shall be governed
by and construed and enforced in accordance with the laws of the State of
Oklahoma, without regard to conflict of law principles.
7. COUNTERPARTS. This Acknowledgment and Agreement may be executed and
delivered (including by facsimile transmission) in any number of counterparts,
each of which shall be an original, but all of which, together shall constitute
one and the same instrument.
8. BINDING EFFECT. All of the terms and provisions of this
Acknowledgment and Agreement shall be binding upon and inure to the benefit of
the parties hereto and to their respective successors and assigns.
[SIGNATURE PAGE FOLLOWS]
3
[SIGNATURE PAGE TO ACKNOWLEDGMENT AND AGREEMENT]
IN WITNESS WHEREOF, the parties hereto have executed this
Acknowledgment and Agreement as of the effective date hereof.
AMERIVISION:
AMERIVISION COMMUNICATIONS, INC.
By: /s/ XXXXXXX X. XXXXX
-------------------------------
Name: Xxxxxxx X. Xxxxx
------------------------------
Title: Chairman/CEO
------------------------------
EXECUTIVE:
/s/ XXXXXXX X. XXXXXXXX
--------------------------------------
Xxxxxxx X. Xxxxxxxx
4
EXHIBIT A
PAYMENTS DUE
YEAR AMOUNT
---- ------
2002 $1,343,843(1)
2003 $ 641,346
2004 $ 251,267
----------
$2,236,456
1. As of May 30, 2002, the amount of $187,500 had been paid to Executive,
resulting in a net payable amount of $2,048,956 due to Executive as of
such date. Assuming that the Company makes a $37,500 payment to
Executive on June 15, 2002, a net payable amount of $2,011,456 shall be
due to Executive as of June 30, 2002.
