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EXHIBIT 10.28
SEPARATION AGREEMENT
This Separation Agreement ("Agreement") is made and entered into by and
among TELESERVICES INTERNET GROUP INC., formerly TeleServices International
Group Inc., ("Company"), a Florida corporation with its principal executive
offices at 000 Xxxxxx Xxxxxx Xxxxx, Xxxxx 0000, Xx. Xxxxxxxxxx, Xxxxxxx 00000;
XXXXXX X. XXXXXX ("Executive"), an individual residing at 000-00xx Xxxxxx
Xxxxxxxxx, Xx. Xxxxxxxxxx, Xxxxxxx 00000, and PERCH, INC., a Florida corporation
with its principal offices at 000 Xxxxx Xxxxx X.X., Xxxx 0, Xx. Xxxxxxxxxx,
Xxxxxxx 00000, ("Perch").
WHEREAS, Executive accepted employment with Company on or about
December 4, 1998 as Chairman and Chief Executive Officer pursuant to an
Executive Employment Agreement executed by both parties and dated December 4,
1998 (the "Xxxxxx Executive Employment Agreement"), which superseded his prior
employment agreement with Company dated January 15, 1997;
WHEREAS, Company and Executive desire to terminate both the employment
relationship and the Xxxxxx Executive Employment Agreement, as well as
Executive's seat on Company's board of directors, upon mutually acceptable terms
and to settle any and all differences, claims and potential claims arising out
of (i) Executive's employment and termination of employment with Company, (ii)
termination of the Xxxxxx Executive Employment Agreement, and (iii) Executive's
resignation of his seat on Company's board of directors;
WHEREAS, Perch desires to secure the services of Executive; and
WHEREAS, the parties acknowledge that Executive may be deemed to be an
affiliate of Perch;
NOW THEREFORE, in consideration of the mutual promises and other
consideration contained herein and intending to be legally bound, the parties
agree as follows:
1. SEPARATION.
a. Executive hereby resigns, effective on the date of the closing
of Company's acquisition of The Affinity Group, Inc. (the
"Employment Resignation Date"), from the following positions:
(i) Chairman and Chief Executive Officer of Company; (ii) a
director of Company; (iii) a director and officer of any of
Company's subsidiaries.
b. Company hereby assigns to Perch, without recourse, all rights,
title, and interest of Company under the Xxxxxx Executive
Employment Agreement and all obligations, duties, promises,
covenants, representations and warranties of Company arising
thereunder after the Employment Resignation Date, including,
but not limited to, all salary and other compensation and
benefits, but excepting those obligations, duties,
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promises, covenants, representations and warranties of Company
expressly and specifically reserved to Company in this
Agreement.
c. Perch hereby accepts the assignment, without recourse, by
Company of all rights, title, and interest of Company under
the Xxxxxx Executive Employment Agreement and all obligations,
duties, promises, covenants, representations and warranties of
Company arising thereunder after the employment resignation
date, including, but not limited to, all salary and other
compensation and benefits, but excepting those expressly and
specifically reserved to Company in this Agreement. In
addition, Perch hereby assumes the Xxxxxx Executive Employment
Agreement and all obligations, duties, promises, covenants,
representations and warranties of Company arising thereunder
after the Employment Resignation Date, including, but not
limited to, all salary and other compensation and benefits,
but excepting those obligations, duties, promises, covenants,
representations and warranties of Company expressly and
specifically reserved to Company in this Agreement.
d. Company hereby assigns to Perch, and Perch hereby accepts
assignment of, the debts and obligations of Executive to
Company, and Company's subsidiary, XxxxxxxXxxxxx.xxx, Inc.
("GSCI"), assigns to Perch the promissory notes of Executive
to GSCI, all as set forth on Exhibit A hereto.
e. Executive hereby consents to (i) the assignment, without
recourse, by Company to Perch of all rights, title, and
interest of Company under the Xxxxxx Executive Employment
Agreement and of all obligations, duties, promises, covenants,
representations and warranties of Company arising thereunder
after the Employment Resignation Date, including, but not
limited to, all salary and other compensation and benefits,
but excepting those obligations, duties, promises, covenants,
representations and warranties of Company expressly and
specifically reserved to Company in this Agreement; (ii) the
assumption by Perch of the Xxxxxx Executive Employment
Agreement and all obligations, duties, promises, covenants,
representations and warranties of Company arising thereunder
after the Employment Resignation Date, including, but not
limited to, all salary and other compensation and benefits,
but excepting those obligations, duties, promises, covenants,
representations and warranties of Company expressly and
specifically reserved to Company in this Agreement; and (iii)
the assignment to Perch of (a) the debts and obligations of
Executive to Company and (b) the promissory notes of Executive
to GSCI.
f. Under Company's existing director and officer insurance
policy, Executive's actions as an officer or director of
Company up to the Employment Resignation Date are
automatically covered to the same extent as if Executive were
still an officer or director of Company, as the case may be,
and Company shall continue to purchase and maintain such
director and officer insurance coverage for a period not less
than the term of the all applicable statutes of limitation
beginning on the Employment Resignation Date.
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g. Part I of Exhibit B lists all Company securities owned by
Executive. Executive hereby forfeits certain of these
securities as set forth in Part II of Exhibit B.
h. Executive hereby acknowledges that he has removed from
Company's offices at 000 Xxxxxx Xxxxxx Xxxxx, Xxxxx 0000, Xx.
Xxxxxxxxxx, Xxxxxxx 00000, all personal effects, artwork,
furniture, fixtures and equipment belonging to him, including,
without limitation, the office, and Executive hereby
relinquishes all claim, right, title and interest in and to
the personal effects, artwork, furniture, fixtures and
equipment presently situated in Company's offices at 000
Xxxxxx Xxxxxx Xxxxx, Xxxxx 0000, Xx. Xxxxxxxxxx, Xxxxxxx
00000.
2. CONSIDERATION PROVIDED TO EXECUTIVE. In consideration of the actions,
covenants and releases of Executive and Perch made in this Agreement,
Company shall pay to Executive or perform the following:
a. Executive will be paid $75,000 by December 31, 2000, with
$20,000 of this amount due within five business days after the
Employment Resignation Date.
b. Simultaneously upon the full execution and delivery of this
Agreement by Executive, Company and Executive will enter into
a Consulting Agreement in the form attached hereto as Exhibit
C.
c. Company acknowledges that Executive may have personal
liability either by contract or by operation of law for
certain primary debts and primary obligations of Company,
including but not limited to the following:
(i) The bank loan to Company from NationsBank with a
current balance of approximately $134,000;
(ii) The loan or lease, as the case may be, on certain
automobiles driven by other executives of Company,
specifically an Audi, which has a balance of $18,200,
which is payable at the rate of $469 per month for 39
months, and a Lexus, which has balance of $12,000,
which is payable at the rate of $999 per month for 12
months used by other executives of Company, to the
extent that Executive shall not be required to pay
pursuant to his personal guaranties against these
obligations of Company. The said auto loans or
leases, as the case may be, show Company as the owner
or lessee;
(iii) Liability for the obligation of Company's former
subsidiary, Visitors Services International Corp.
("VSI"), to Nutmeg Systems for services rendered by
Nutmeg Systems and received by VSI;
(iv) Accrued payroll tax liability, including, taxes,
interest, and penalties of Company and its
subsidiaries; and
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(v) Ordinary and necessary expenses in reasonable amounts
incurred by Executive on behalf of Company,
including, without limitation, an invoice from the
Vinoy hotel for approximately $22,000.
Company shall use it best efforts to continue pay all of such
primary liabilities of Company when currently due.
d. For a period of nine (9) months following the employment
resignation date, Company will pay the monthly continuation
coverage payments under the Consolidated Omnibus
Reconciliation Act of 1986 ("COBRA") for any group health
insurance covered by COBRA in which Executive was a
participant at the time of his resignation and for which he
properly elects and continues to remain eligible for
continuation coverage under COBRA.
e. Company shall use its best efforts to register, at the
Company's expense and on the next appropriate registration
statement or amendment filed by the Company, (i) the shares
underlying Executive's remaining 3.5 million options on Form
S-8; and (ii) the shares underlying Executive's 553,788
options granted November 12, 1999 and Executive's 950,000
options granted December 15, 1999, for resale by Executive.
f. Company shall permit Executive to sell his 1,740,164 shares of
restricted common stock as permitted under Rule 144 of the
Securities Act of 1933, as amended, at the rate of up to
125,000 per month, and shall provide, at no cost to Executive,
an appropriate legal opinion to the Company's transfer agent
within ten business days of receipt of each request (provided
that Executive has provided to Company all necessary
documentation to process the request).
3. NON-DISPARAGEMENT. Executive and the directors, officers and senior
staff members of Company and their agents and representatives have not
and shall not communicate, directly or indirectly, any negative or
disparaging comments or information about each other or any of the
current or former officers, directors, managers, supervisors,
executives, or representatives of Company or any of its subsidiaries
and affiliates concerning the reputation or status of the other party's
professional abilities, business, or financial condition. In the event
Executive is asked by a person inside or outside Company or any of its
affiliates about his separation from Company and/or the differences
between Executive and Company or any of its subsidiaries and
affiliates, he may state only that he resigned from Company in all
capacities, except that Company has retained his services on a
non-exclusive basis, and words to the effect that he and Company have
resolved any and all differences they may have had on an amicable
basis. In the event a member of Company's staff is asked by a person
inside or outside of Company or any of its subsidiaries and affiliates
about Executive's separation from Company and/or the differences
between Executive and Company and any of its subsidiaries and
affiliates, they may state only that Executive resigned from Company in
all capacities, except that Company has retained his services on a
non-exclusive basis, and words to the effect that Executive and Company
have resolved any and all differences they may have had on an amicable
basis.
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4. EXECUTIVE'S RELEASE OF ALL CLAIMS. In consideration of this Agreement
and the consulting agreement attached hereto as Exhibit C, including,
but not limited to, the mutual, binding promises contained herein and
in the consulting agreement, and intending to be legally bound thereby,
Executive, on behalf of himself, his executors, legatees, devisees,
administrators successors, and assigns, does hereby irrevocably,
forever and unconditionally release and forever discharge Company and
each of its past, present and future stockholders, agents, directors,
officers, executives, representatives, attorneys, and its predecessors,
successors, parents, affiliates, insurers, heirs, executors,
administrators and assigns, and all persons acting by, through, under
or in concert with any of them (collectively referred to herein as the
"Company Released Parties"), of and from any and all actions, causes of
action, suits, debts, judgments, charges and expenses (including
attorneys' and paralegal fees and costs at all levels of dispute
resolution), of any nature whatsoever, asserted or unasserted, known or
unknown, ("Claims"), which Executive ever had, now has, or hereafter
may have against the Company Released Parties, in any way arising out
of or related to Executive's employment and/or other capacity and/or
service as a director and/or otherwise with Company and/or any of its
subsidiary and/or affiliated entities and/or the termination of his
employment and/or other capacities and/or services with Company and/or
its subsidiary and affiliated entities.
In expansion of, and not in limitation of, the general nature of the
foregoing release, Executive releases and forever discharges any and
all Claims he may have had against such Company Released Parties in any
way arising out of or related to Executive's employment and/or other
service and/or capacity with Company and/or any of its subsidiary
and/or affiliated entities and/or the termination of his employment
and/or other services and/or capacities with Company and/or its
subsidiary and/or affiliated entities, regardless of whether any or all
of such Claims arises under any state or federal statute, ordinance,
regulation, order or common law. The Claims released by Executive
include, but are not limited to, those under the Age Discrimination in
Employment Act ("ADEA"), 29 U.S.C. Section 621 et seq.; Title VII of
the Civil Rights Act of 1964 ("Title VII"), 42 U.S.C. Section 2000e et
seq.; the Americans with Disabilities Act of 1990 ("ADA") 42 U.S.C.
Section 12101 et seq.; the Family and Medical Leave Act of 1993
("FMLA"), 29 U.S.C. Section 2601 et seq.; and the Employee Retirement
Income Security Act of 1974 ("ERISA"), 29 U.S.C. Section 1001 et seq.;
and as any or all of the foregoing are or may be amended, or any other
federal, state or local statute, rule or ordinance and any other claims
in law or equity. In further expansion of the foregoing releases,
Executive releases the Company Released Parties of and from any and all
Claims based on constructive discharge, express, implied or
quasi-contract, and breach of the implied covenant of good faith and
fair dealing. In still further expansion of the foregoing releases,
Executive releases the Company Released Parties of and from any and all
Claims for fraud of any kind. Expanding the foregoing releases further
still, Executive releases Company Released Parties of and from any and
all Claims for wrongful discharge of any kind (including in violation
of public policy and constructive discharge), infliction of emotional
distress, whether intentional or negligent, defamation, negligence,
conspiracy, any and all other common law torts and discrimination on
any basis prohibited by statute, public policy or otherwise.
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5. COMPANY'S RELEASE OF ALL CLAIMS. As part of the consideration for
Executive entering into this Agreement, Company for and on behalf of
itself and all of its past, present and future subsidiaries, parent
corporations, affiliates, directors, officers, executives,
representatives, attorneys, insurers, heirs, executors, administrators,
assigns, and agents, and all persons acting by, through, under or in
concert with any of them, does hereby irrevocably, forever and
unconditionally release and forever discharge Executive, his personal
representatives, heirs, legatees, devisees, administrators, successors,
assigns, and future employers, and all persons acting by, through,
under or in concert with any of them (collectively referred to herein
as the "Executive Released Parties"), of and from any and all Claims
which Company ever had, now has, or hereafter may have against the
Executive Released Parties, in any way arising out of or related to
Executive's employment and/or other service and/or capacity with
Company or any of its subsidiary or affiliated entities or the
termination of his employment and/or other services and/or capacities
with Company and its subsidiary and affiliated entities.
6. CLAIMS RELEASED CONSTRUED BROADLY. Executive and Company intend that
the provisions of this Agreement regarding the Claims being released by
each of them under the provisions of this Agreement shall be construed
as broadly as possible. Provided, however, that nothing contained in
this Agreement is intended to waive any claims or rights based on this
Agreement or a breach of this Agreement, or based on conduct or any
event that occurs after the effective date of this Agreement.
7. ASSUMPTION OF RISK OF CHANGE IN FACTS. Executive and Company understand
that the facts under which they give their releases hereunder may prove
to be different than now known or believed by them, and each accepts
and assumes the risk thereof and agrees that their releases shall
remain in full force and effect and not subject to modification,
termination or rescission by reason of any difference in facts.
8. COVENANT NOT TO XXX. Subject to full performance of the other party's
obligations under this Agreement, each party hereto agrees that neither
such party nor any person or entity on such party's behalf has or shall
commence, maintain or prosecute any lawsuit, complaint, action or
proceeding of any kind against the other or their respective Released
Parties with respect to any act, omission or other matter occurring up
to and including the effective date of this Agreement. The foregoing
notwithstanding, and subject to paragraph 17, this covenant not to xxx
does not extend to any claim for breach of this Agreement or the
consulting agreement.
9. COMPANY RECORDS; RETURN OF COMPANY PROPERTY. Executive represents that
on the Employment Resignation Date, he shall return to Company any of
the following that he has in his possession: records and business
documents, whether on computer or hard copy, and other materials
(including but not limited to computer disks and tapes, computer
programs and software, office keys, correspondence, files, customer
lists, technical information, customer information, pricing
information, business strategies, sales records and copies thereof)
(collectively, the "Company Records") provided by Company and/or its
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predecessors, subsidiaries or affiliates and/or obtained as a result of
his employment with, or in any of his capacities with, or rendering of
services for, Company and/or its predecessors, subsidiaries or
affiliates, and/or created by Executive while employed by and/or
rendering services to or for Company and/or its predecessors,
subsidiaries or affiliates. Executive acknowledges that all such
Company Records are the property of Company. In addition, Executive
shall promptly return in good condition any and all cellular phone
equipment, pagers, credit cards, business cards, computer equipment and
accessories belonging to and/or leased by Company. As of Executive's
Employment Resignation Date, Company will make arrangements to remove,
terminate or transfer from Executive any and all business communication
lines including network access, cellular phone, fax line and other
business numbers belonging to or leased by Company.
10. CONFIDENTIAL INFORMATION. Executive acknowledges that, during his
employment and other service with Company and/or its subsidiary or
affiliated entities, he has had access to confidential and other
information proprietary to Company and/or its subsidiary or affiliated
entities, including but not limited to trade secrets, operations,
customer information, customer prospects, strategic plans, inventions,
business plans, formulas processes, designs, methods, techniques,
know-how, systems, software programs, works of authorship, plans,
proposals, information about products, and other proprietary
information (the "Confidential Information"). Executive agrees that he
has not and shall not at any time disclose to any person or entity the
Confidential Information acquired during or in connection with his
employment with or in rendering services to Company and/or any of its
subsidiaries and affiliates without prior written permission from
Company. Executive agrees that he shall keep secret the Confidential
Information and all matters that have been entrusted to him and shall
not use or attempt to use any of the Confidential Information in any
manner that may injure or cause loss or may be calculated to injure or
cause loss, whether directly or indirectly, to Company and/or its
subsidiaries and affiliates.
The above restrictions shall not apply to: (i) information that at the
time of disclosure is in the public domain through no fault of
Executive; (ii) information received from a third Party outside of
Company that was disclosed without a breach of any confidentiality
obligation; (iii) information approved for release by written
authorization of Company; or (iv) information that may be required to
be disclosed by law or by an order of any court, agency or proceeding,
provided that Executive shall provide Company with notice of any such
required disclosure once Executive has knowledge of it and will provide
all reasonable assistance requested by Company to obtain an appropriate
protective order with respect to such information.
11. KNOWING AND VOLUNTARY AGREEMENT. Each party hereto hereby acknowledges
that such party has carefully read and understands all of the
provisions and effects of this Agreement; that each is voluntarily and
knowingly entering into this Agreement free of coercion or duress; and
that in agreeing to sign this Agreement, the parties have not, except
for representations, promises, statements, or explanations made herein
or in an exhibit attached hereto, relied on any representations,
promises, agreements, statements or explanations made by any party
hereto or their respective attorneys concerning the terms or effects of
this
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Agreement in connection with their respective decisions to execute the
same. EACH PARTY REPRESENTS AND WARRANTS THAT IT HAS HAD A FULL AND
COMPLETE OPPORTUNITY TO REVIEW THIS AGREEMENT WITH ITS COUNSEL.
EXECUTIVE ACKNOWLEDGES THAT HE HAS THE RIGHT TO CONSIDER THIS AGREEMENT
FOR TWENTY ONE (21) DAYS PRIOR TO SIGNING AND RETURNING IT TO XXXX X.
XXXXX, SECRETARY AND TREASURER OF THE COMPANY, 000 XXXXXX XXXXXX XXXXX,
XXXXX 0000, XX. XXXXXXXXXX, XXXXXXX 00000. EXECUTIVE ALSO ACKNOWLEDGES
THAT HE IS AWARE OF AND HAS BEEN ADVISED OF HIS RIGHT TO REVOKE THIS
AGREEMENT FOR A PERIOD OF SEVEN (7) DAYS AFTER HE SIGNS THIS AGREEMENT
BY NOTIFYING THE ABOVE INDIVIDUAL IN WRITING BY 5 P.M. ON THE SEVENTH
(7TH) DAY AFTER HE SIGNS AND RETURNS THE AGREEMENT AND THAT HE HAS BEEN
STRONGLY ADVISED TO SEEK LEGAL COUNSEL PRIOR TO SIGNING THIS AGREEMENT.
EXECUTIVE REPRESENTS THAT, IF HE SIGNED THIS AGREEMENT PRIOR TO THE
EXPIRATION OF THE TWENTY-ONE (21) DAY PERIOD, HE HAS FREELY AND
VOLUNTARILY WAIVED HIS RIGHT TO CONSIDER THIS AGREEMENT FOR SUCH PERIOD
UPON CONSULTATION WITH HIS COUNSEL. THIS AGREEMENT WILL NOT BECOME
EFFECTIVE UNTIL THE SEVEN-DAY REVOCATION PERIOD HAS EXPIRED AND
EMPLOYER SHALL HAVE NO OBLIGATIONS UNDER THIS AGREEMENT UNTIL IT HAS
BECOME EFFECTIVE AS SET FORTH IN THIS PARAGRAPH 11.
12. APPLICABLE LAW. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Florida, without
regard for its conflicts of laws principles.
13. CHANGE, MODIFICATION AND WAIVER. No change or modification of this
Agreement shall be valid unless it is in writing and signed by
Executive and an authorized officer of Company. No waiver of any
provision of this Agreement shall be valid unless it is in writing and
signed by the party against whom the waiver is sought to be enforced
(in the case of Company, by an authorized officer of Company). The
failure of a party to insist upon strict performance of any provision
of this Agreement in any one or more instances shall not be construed
as a waiver or relinquishment of the right to insist upon strict
compliance with such provision in the future.
14. INTEGRATION. This Agreement and its exhibits constitutes the entire
agreement between Company and Executive concerning the subject matters
hereof and supercedes all prior representations, promises and
agreements, whether oral or written, implied or otherwise with respect
thereto.
15. SEVERABILITY. Any provision of this Agreement, which is adjudged to be
prohibited or unenforceable, shall be ineffective to the extent of such
prohibition or unenforceability without affecting the validity or
enforceability of the remainder of this Agreement.
16. ATTORNEYS FEES. In the event an action is brought for breach of or to
enforce this Agreement, including arbitration, the prevailing party
shall receive its reasonable attorneys and paralegal
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fees and costs at all levels of dispute resolution involved as
determined by the court or arbitrators, as the case may be.
17. DISPUTE RESOLUTION. Any dispute, claim, misunderstanding or
disagreement that arises out of or which relates to this Agreement, or
to the interpretation or breach of this Agreement, or the arbitrability
of the dispute, ("Disputed Matter") shall be resolved by arbitration.
To initiate arbitration of any Disputed Matter(s), the party seeking
arbitration shall deliver written notice of the Disputed Matter(s) to
the other party, stating the Disputed Matter(s), such party's position
on the Disputed Matter(s), and that such notice shall serve as Notice
of Submission of Disputed Matter(s) to arbitration.
Arbitration of the Disputed Matter(s) shall be submitted to a single
arbitrator, if the parties hereto agree upon one; otherwise, to a board
of three arbitrators, of whom one shall be selected by each party
within twenty (20) days after such 30 day period, and a third
arbitrator shall be selected by these two selected arbitrators. If one
of the parties fails to timely select an arbitrator, the arbitrator
that was timely selected shall be the sole arbitrator. If neither party
timely selects an arbitrator, the first arbitrator selected thereafter
shall be the sole arbitrator, no others being appointed. Where each of
the parties timely selects an arbitrator, said arbitrators will have
ten (10) days from the end of the twenty (20) day period to select the
third arbitrator. In the event the arbitrators are unable to timely
agree on the third arbitrator, either party may petition any official
of the American Arbitration Association for appointment of the third
arbitrator and the parties agree to accept any arbitrator appointed by
such official subject to the limitations hereof. Arbitration shall
commence within ten business days of the selection of the final
arbitrator and shall proceed in accordance with any private arbitration
procedures and rules of evidence specified by the rules of evidence or
procedure of commercial arbitration of the American Arbitration
Association. The arbitrators shall have all the powers permitted
arbitrators under the laws of the State of Florida. The decision and
award of such single arbitrator, if only one is used, or any two of
such board if three are used, as the case may be, shall be final and
binding upon the said parties, their heirs, legal representatives,
successors and assigns respectively, and shall have the same force and
effect as though such decision had been handed down by a court of final
jurisdiction; the cost of arbitrator(s) to be shared equally by the
parties. The non-prevailing party shall be responsible for and shall
pay for the prevailing party's reasonable expenses of presenting its
respective case, including depositions, attorney fees and costs and
witness fees. Each of the parties hereto covenants to abide by any
arbitration decision. The arbitration shall be conducted in St.
Petersburg, Florida. In the event that it becomes necessary for either
party to this agreement to enforce the terms hereof or a decision of
arbitration through the initiation of legal proceedings, the prevailing
party in said proceedings shall be entitled to collect all costs and a
reasonable attorneys' fee from the non-prevailing party, both as to the
initial lawsuit and any appellate proceedings.
Arbitrators must be independent of the parties and their
principals. Persons who are hereby expressly disqualified to serve as
arbitrators are principals of parties, relatives of said principals,
executives of parties or said principals, persons not residing within
100 miles of St. Petersburg, Florida, attorneys, accountants and other
business persons having professional
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or business relationships with the parties or said principals. The
parties shall deposit, at the beginning of the arbitration process,
with the arbitrators an amount equal to the estimated costs (including
arbitrators' time charges) of the total arbitration. Failure to make
full deposit of one half of the estimated costs by the deadline imposed
by the Arbitrator(s) shall result in a default judgment being awarded
by the Arbitrator(s) to the party who did make a timely deposit of the
full one half of the estimated costs. Arbitrators time charges shall be
at the same rate for all arbitrators.
18. INDEMNIFICATION. The indemnification(s) of Executive from Company that
Executive enjoyed by and through his Executive Employment Agreement,
the Articles of Incorporation of the Company, the Bylaws of Company,
the Florida Business Corporation Act and/or any other written
instrument executed and delivered by Company prior to September 1,
2000, to wit, the indemnification(s) described in Exhibit D hereto,
shall not be abridged by the execution and delivery of this Agreement
or the termination of the Executive Employment Agreement or Executive's
employment with Company under this Agreement and the same shall survive
the execution and delivery of this Agreement, the termination of the
Executive Employment Agreement, and termination of Executive's
employment with Company under this Agreement.
19. COUNTERPARTS AND FACSIMILE SIGNATURES. This Agreement may be executed
simultaneously in two or more counterparts, each of which shall be
deemed an original, but all of which taken together shall constitute
one and the same instrument. Execution and delivery of this Agreement
by exchange of facsimile copies bearing the facsimile signature of a
party hereto shall constitute a valid and binding execution and
delivery of this Agreement by such party. Such facsimile copies shall
constitute enforceable original documents.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, and intending to be legally bound hereby, the
Parties have agreed to and executed the foregoing Separation Agreement,
effective as of the last date written below.
EXECUTIVE:
/s/ Xxxxxx X. Xxxxxx November 22, 2000
---------------------- -----------------
Xxxxxx X. Xxxxxx Date
COMPANY:
TELESERVICES INTERNET GROUP INC.
By: /s/ Xxxx X. Xxxxx
-------------------
Its: Secretary/Director November 22, 2000
------------------ -----------------
Date
PERCH:
PERCH, INC.
By: /s/ Xxxx X. Xxxxxxx
---------------------------
Its: Vice President, Operations November 22, 2000
-------------------------- -----------------
Date
Joined in for the sole purpose of consenting to the forgiveness of Executive's
indebtedness and assignment of the promissory notes as provided in paragraph 2d
above and Exhibit B hereto, and subject to the terms and conditions of this
Agreement.
XXXXXXXXXXXXX.XXX, INC.
By: /s/ Xxxxxxx X. Xxxxx November 22, 2000
------------------------- -----------------
Xxxxxxx X. Xxxxx, CEO Date
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EXHIBIT A
1. $700,000 owed to Company by Executive for the purchase by Executive of
1,000,000 shares of the Company's common stock pursuant to an option
exercise on July 31, 2000.
2. $117,066 owed to Company by Executive for amounts loaned and/or
advanced to Executive in excess of amounts accrued and owing to
Executive by Company.
3. $505,000 owed by Executive to GSCI for loans made by GSCI to Executive,
evidenced by the following three promissory notes, all of which bear
interest at 8% per annum, simple, payable in arrears at maturity; 18%
per annum, simple , on unpaid balance of interest and principal upon
default until paid in full, which are being transferred and assigned by
GSCI to Perch simultaneously upon execution of this Agreement:
(i) Note dated June 29, 2000 in the face amount of 200,000,
secured by 390,909 shares of Company common stock, maturity
date 120 days after the Note date.
(ii) Note dated July 10, 2000 in the face amount of $230,000,
secured by 390,909 shares of Company common stock, maturity
date 120 days after the Note date.
(iii) Note dated July 21, 2000 in the face amount of $75,000,
secured by 390,909 shares of Company common stock, maturity
date 120 days after the Note date.
13
EXHIBIT B
PART I - SECURITIES OWNED BY EXECUTIVE
1. RESTRICTED OPTIONS/WARRANTS TO PURCHASE SHARES OF COMPANY
COMMON STOCK:
# options Terms
--------- -----
(i) 553,788 granted 11/12/99; $.40 exercise price, fully vested, expire 11/12/04.
(ii) 950,000 granted 12/15/99; $.40 exercise price, fully vested, expire 11/12/04.
2. OPTIONS TO PURCHASE SHARES OF COMMON STOCK:
# options Terms
--------- -----
(i) 4,000,000 granted 07/31/00; $1.20 exercise price; expire 07/31/05. 2,000,000 vested
immediately, 1,600,000 vested on closing of XxxxxxxXxxxxx.xxx, Inc.,
200,000 to vest on closing of The Affinity Group, Inc., and 200,000 to vest
on closing of Reliant Interactive Media Xxxx-XxXxxxXxXXxx.xxx, Inc.
(ii) 300,000 granted 07/31/00; $1.20 exercise price; expire 07/31/05. Vest quarterly
over three years.
14
3. COMMON STOCK:
Number Date
Of Shares Acquired
--------- --------
Restricted:
200,000.............................................11/22/99
225,000.............................................11/22/99
225,000.............................................11/22/99
390,909.............................................05/09/00
33,334.............................................11/22/99
66,667.............................................11/22/99
500,000.............................................05/09/00
59,091.............................................05/09/00
40,163............................................(10,000 of these shares were acquired on 10/21/97;
26,375 of these shares were acquired on 12/04/98; and
3,788 were acquired on 11/22/99)
"Free-trading":
1,000,000............................................07/31/00 (Registered on Form S-8)
----------
Total:
1,740,164
==========
PART II - SECURITIES FORFEITED BY EXECUTIVE
1. SECURITIES FORFEITED BY EXECUTIVE
(i) 500,000 of the options described above in Part I, 2(i), including the
400,000 options not yet vested.
(ii) The 300,00 options described above in Part I, 2(ii).
* Note: all figures reflect the 10:1 reverse split that occurred on June 23,
2000.
15
EXHIBIT C
CONSULTING AGREEMENT ATTACHED
16
EXHIBIT D
INDEMNIFICATION
I. Article VIII of the Bylaws of Company, as restated on April 22, 1999,
provides indemnification as follows:
8.1 AUTHORITY FOR INDEMNIFICATION: Any person who was or is a
party or is threatened to be made a party to any threatened,
pending, or completed action, suit, or proceeding, whether
civil, criminal, administrative, or investigative, and whether
formal or informal, by reason of the fact that he is or was a
director, officer, employee, fiduciary, or agent of the
Corporation or is or was serving at the request of the
Corporation as a director, officer, partner, trustee,
employee, or agent of any foreign or domestic corporation or
of any partnership, joint venture, trust, other enterprise or
employee benefit plan ("Any Proper Person"), shall be
indemnified by the Corporation against expenses (including
attorneys fees), judgments, penalties, fines, (including an
excise tax assessed with respect to an employee benefit plan)
and amounts paid in settlement reasonably incurred by him in
connection with such action, suit or proceeding if it is
determined by the groups set forth in Section 8.4 of this
Article that he conducted himself in good faith and that he:
(1) reasonably believed, in the case of conduct in his
official capacity with the Corporation, that his conduct was
in the Corporation's best interest; or (2) in all other cases
(except criminal cases) believed that his conduct was at least
not opposed to the Corporation's best interest; or (3) with
respect to criminal proceedings had no reasonable cause to
believe his conduct was unlawful. A person will be deemed to
be acting in his official capacity while acting as a director,
officer, employee or agent of this Corporation and when he is
acting on this Corporation's behalf for some other entity. No
indemnification shall be made under this section to a director
with respect to any claim, issue or matter in connection with
a proceeding by or in the right of a corporation in which the
director was adjudged liable on the basis that a personal
benefit was improperly received by him. Further,
indemnification under this Section in connection with a
proceeding brought by or in the right of the Corporation shall
be limited to reasonable expenses, including attorneys' fees,
incurred in connection with the proceeding. These limitations
shall apply to directors only and not to officers, employees,
fiduciaries or agents of the Corporation.
8.2 RIGHT OF INDEMNIFICATION: The Corporation shall indemnify any
Proper Person who has been wholly successful on the merits or
otherwise, in defense of any action, suit or proceeding
referred to in Section 8.1 of this Article against expenses
(including attorneys' fees) reasonably incurred by him in
connection with the proceeding without the necessity of any
action by the Corporation other than the determination in good
faith that the defense has been wholly successful.
8.3 EFFECT OF TERMINATION OF ACTION: The termination of any
action, suit or proceeding by judgment, order, settlement or
conviction, or upon a plea of nolo
Exhibit D
17
contendere or its equivalent shall not of itself create a
presumption that the person seeking indemnification did not
meet the standards of conduct described in Section 1 of this
Article. Entry of a judgment by consent as part of a
settlement shall not be deemed an adjudication of liability.
8.4 GROUPS AUTHORIZED TO MAKE INDEMNIFICATION DETERMINATION: In
all cases except where there is a right to indemnification set
forth in Section 8.2 of this article or where indemnification
is ordered by a court, any indemnification shall be made by
the Corporation only as authorized in the specific case upon a
determination by a proper group that the indemnification of
the Proper Person is permissible under the circumstances
because he has met the applicable standards of conduct set
forth in Section 1 of this Article. This determination shall
be made by the Board of Directors by a majority vote of a
quorum, which quorum shall consist of directors not parties to
the proceeding ("Quorum"). If a Quorum cannot be obtained, the
determination shall be made by a majority vote of a committee
of the board designated by the Board of Directors, which
committee shall consist of two or more directors not parties
to the proceeding except that directors who are parties to the
proceeding may participate in the designation of directors for
the committee. If a Quorum of the Board of Directors cannot be
obtained or the committee cannot be established, or even if a
Quorum can be obtained or the committee can be established,
but such Quorum or committee so directs, the determination
shall be made by independent legal counsel selected by a vote
of the a quorum of the Board of Directors or a committee in
the manner specified in this Section, or, if a Quorum of the
full Board of Directors cannot be obtained and a committee
cannot be established, by independent legal counsel selected
by a majority vote of the full Board of Directors (including
directors who are parties to the action) or by a vote of the
shareholders.
8.5 COURT ORDERED INDEMNIFICATION: Any Proper Person may apply for
indemnification to the court conducting the proceeding or to
another court of competent jurisdiction for mandatory
indemnification, under Section 8.2 of this Article, including
indemnification for reasonable expenses incurred to obtain
court-ordered indemnification. If the court determines that
the director is fairly and reasonably entitled to
indemnification in view of all the relevant circumstances,
whether or not he met the standards of conduct set forth in
Section 1 of this Article or was adjudged liable in the
proceeding, the court may order such indemnification as the
court deems proper except that if the individual has been
adjudged liable, indemnification shall be limited to
reasonable expenses incurred.
8.6 ADVANCE OF EXPENSES: Expenses (including attorneys fees)
incurred in defending a civil or criminal action, suit or
proceeding may be paid by the Corporation to any Proper Person
in advance of the final disposition of the such action, suit
or proceeding upon receipt of: (1) a written affirmation of
such Proper Person's good faith belief that he has met the
standards of conduct prescribed by Section 1 of this Article;
(2) a written undertaking, executed personally or on his
behalf, to repay such advances if it is ultimately determined
that he did not meet the
Exhibit D
18
prescribed standards of conduct (the undertaking shall be an
unlimited general obligation of the Proper Person but need not
be secured and may be accepted without reference to financial
ability to make repayment); (3) a determination is made by the
proper group (as described in Section 4 of this Article), that
the facts as then known to the group would not preclude
indemnification.
8.7 REPORT TO SHAREHOLDERS: Any indemnification of or advance of
expenses to a director in accordance with this Article, if
arising out of a proceeding by or on behalf of the
Corporation, shall be reported in writing to the shareholders
with or before the notice of the next shareholders' meeting.
II. The Board of Directors of Company adopted the following resolution with
respect to specific indemnification of Executive on or about December
4, 1998:
RESOLVED, that the Corporation shall indemnify Xxxxxx
X. Xxxxxx to the fullest extent permitted under the applicable
law in the event that Xx. Xxxxxx, as a result of any personal
guarantee executed by Xx. Xxxxxx, is required to personally
repay any indebtedness of the Corporation or any of its
subsidiaries.
Exhibit D
