Exhibit 4.1
SEPARATION AND SHARE REPURCHASE AGREEMENT
SEPARATION AND SHARE REPURCHASE AGREEMENT (this "Agreement"), dated as of
March 1, 2001, between GLOBAL NETWORK, INC., a Nevada corporation (the
"Company"), and XXXX X. XXXXX ("Xxxxx").
W I T N E S S E T H
WHEREAS, Grant has served the Company as a member of the Company's Board of
Directors (the "Board"); and
WHEREAS, the Company and Grant wish to set forth their agreement as to
certain matters in connection with Grant's resignation from the Board;
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements set forth herein, the parties agree as follows:
1. Resignation and Termination of Employment. Effective at the close of
business on the date hereof (the "Effective Date"), Grant shall resign from his
position on the Board. Concurrently with the execution of this Agreement, Grant
has delivered to the Company a signed letter of resignation to such effect.
2. Reimbursement of Expenses for Shares. On the date hereof, in
consideration of $20,000 in expenses incurred by the Company on Grant's behalf,
Grant agrees to reimburse the Company by surrendering 200,000 shares of Common
Stock, par value $0.001 per share, of the Company ("Common Stock") held by
Grant. The value of the Common Stock for purposes of this reimbursement shall be
$0.10 per share.
3. Stock Repurchase.
(a) In addition to the shares that the Company is acquiring pursuant to
Section 2, the Company shall repurchase all remaining shares of Common Stock
held by Grant as of the date hereof except for 100,000 shares (the "Unpurchased
Shares"), which Grant shall be entitled to continue to hold in the manner
provided in this Section 3. The Company shall pay a purchase price of $0.10 per
share (the "Purchase Price"). The repurchase of shares shall be as follows:
(i) On the date hereof, the Company shall (i) receive 200,000 shares of
Common Stock in the manner set forth in Section 2 and (ii) purchase
150,000 shares for cash.
(ii) Commencing April 1, 2001, and continuing each month thereafter, the
Company shall, upon prior written notice to Grant, purchase from Grant
at the Purchase Price such number of shares of Common Stock as it
wishes to purchase in its sole discretion; provided that the total
number of shares purchased for any particular month shall equal or
exceed 150,000 shares until the remaining number of shares to be
purchased hereunder is fewer than 150,000, in which case the Company
shall only purchase such remaining number of shares. If the Company
purchases more than 150,000 shares in a particular month, the excess
shall be carried forward into subsequent months for purposes of
determining whether the Company has satisfied the above minimum
purchase requirement.
(iii)The Company shall pay the amounts payable under this Section 3 by
wire transfer of immediately available funds to a bank account
designated in writing by Grant or in any other manner mutually agreed
by Grant and the Company.
(iv) Grant shall be obligated to pay any applicable federal, state or local
taxes incurred in connection with the foregoing transfers.
(b) Grant agrees that he will not, directly or indirectly, sell, offer to
sell, grant any option for the sale of, assign, transfer, pledge, hypothecate,
or otherwise encumber or dispose of any legal or beneficial interest in any
shares of Common Stock, any securities convertible into or exercisable or
exchangeable for shares of Common Stock, or any warrants, options or other
rights to purchase, subscribe for, or otherwise acquire any shares of Common
Stock from the Effective Date until the earlier of (i) the date that is one year
after the date upon which the Company has acquired all shares of Common Stock
that it is required to purchase hereunder and (ii) the date upon which the
Company consummates a Sale Event (as defined in Section 3(c)), except (x) as
provided in Section 3(a) and (y) for shares of Common Stock or securities
exercisable for or convertible into shares of Common Stock as to which Grant
acquires ownership, directly or beneficially, in the public trading markets
after the Effective Date. Upon the consummation of a Sale Event, the
restrictions contained herein shall immediately and automatically terminate
without the necessity for any notice by the Company to Grant.
(c) For purposes of this Agreement, "Sale Event" means (i) any
consolidation, merger, combination, reorganization or other similar transaction,
or a series of related transactions, in which the Company is not the surviving
entity or as a result of which shares of capital stock of the Company
constituting in excess of 50% of the voting power of the Company are owned
beneficially by persons that were not stockholders of the Company immediately
prior to such transaction, or (ii) a sale or other disposition of all or
substantially all of the assets of the Company, in one transaction or a series
of related transactions.
4. Physical Possession of Shares. Grant acknowledges that the Company has
and shall maintain physical possession of the stock certificates representing
all of the shares of Common Stock owned by Grant. Concurrently with each of the
stock purchase events specified in Sections 2 or 3 and upon payment, if any,
therefor, Grant shall deliver to the Company such duly executed stock powers or
other instruments of conveyance as the Company shall reasonably request to
convey title to the shares so purchased by the Company. Once the Company has
purchased from Grant all but the Unpurchased Shares, the Company shall cause to
be delivered to Grant a stock certificate representing such Unpurchased Shares.
5. Representations, Warranties and Covenants Regarding Shares Acquired by
Company. As of the date hereof, Grant represents, warrants and covenants to the
Company the following:
(a) Grant owns, directly, 2,205,000 shares of Common Stock, and such shares
constitute all shares of capital stock of the Company owned, beneficially or
directly, by Grant.
(b) In respect of the 2,105,000 shares of Common Stock that the Company
will be acquiring pursuant to the terms of this Agreement, Grant owns, and shall
continue to own, until all such shares of Common Stock to be acquired are so
acquired by the Company, all right, title and interest in and to all such shares
free and clear of all liens, encumbrances, security interests, agreements or
claims of any kind or nature, except as provided by this Agreement, and except
for such restrictions, if any, on the disposition of such shares as may be
imposed by federal or applicable state securities laws.
(c) Grant has and shall have full right, power and authority to sell,
transfer and deliver the shares of Common Stock required to be sold by Grant to
the Company pursuant to the terms of this Agreement, and upon the assignment and
transfer of such shares to the Company pursuant to this Agreement, the Company
shall acquire all right, title and interest in and to such shares, free and
clear of any liens, encumbrances, security interests, agreements or claims of
any kind or nature, and except for such restrictions, if any, on the disposition
of such shares as may be imposed by federal or applicable state securities laws.
6. Non-Competition. In consideration of the payments and other
consideration being provided to Grant pursuant to this Agreement, Grant agrees
that, from the Effective Date until the date that is six (6) months after the
Effective Date (the "Term"), Grant shall not, anywhere in the City of New York,
the State of New York or elsewhere in the United States (or for such lesser area
or such lesser period as may be determined by a court of competent jurisdiction
to be a reasonable limitation on the competitive activity of Grant), directly or
indirectly, unless on behalf and at the request of the Company:
(a) engage, for or on behalf of any person or entity, in the business of
designing, developing or assisting in the design or development of software to
be used in connection with the packaging, selling or placing of on-line banner
advertising on newspaper websites (the "Business");
(b) solicit or attempt to solicit business for products or services offered
by the Company from any person who is or was a client of the Company on the date
hereof or at any time during the 12 months prior to the date hereof or to whom
the Company made proposals for products or services during the 12 months
preceding the date hereof; provided, however, that the Company agrees that Grant
may solicit business from any such person to the extent that Grant solicits such
person for products or services unrelated to the Business;
(c) otherwise divert or attempt to divert from the Company any business
related to the Business, it being acknowledged and agreed for purposes of this
Agreement that packaging, selling or placing on-line banner advertising on
newspaper websites does not constitute "business related to the Business";
(d) solicit or attempt to solicit for any business endeavor any employee of
the Company; or
(e) render any services as an officer, director, employee, partner,
consultant or otherwise to, or have any interest as a stockholder, partner,
lender or otherwise in, any person or entity which is engaged in activities
which, if performed by Grant, would violate this Section 6.
Except as otherwise provided in this Agreement, the foregoing shall not prevent
Grant from purchasing or owning up to 5% of the voting securities of any
corporation, the securities of which are publicly-traded. If the Company
materially breaches its obligations under this Agreement, which breach is not
cured within 15 days after receipt of notice thereof from Grant, Grant's
obligations under this Section 6 shall be of no further force and effect.
7. Confidentiality. At all times after the Effective Date, Grant shall not
disclose or use any information respecting the Company or its business and
affairs that is treated as confidential by the Company (including, without
limitation, the Company's pricing or business methodology and the existence or
terms of this Agreement); provided, however, that such obligation shall not
apply to any information (i) to the extent that it is or becomes part of public
or industry knowledge from authorized sources other than Grant or (ii) that
Grant is required by law to disclose (but only to the extent required to be so
disclosed).
8. Remedies and Survival. Because the Company would not have an adequate
remedy at law to protect its business from any breach of the provisions of
Sections 6, 7 or 9, the Company shall be entitled, in the event of such a breach
or threatened breach thereof by Grant, to injunctive relief, in addition to such
other remedies and relief that would be available to the Company. In the event
of such a breach, in addition to any other remedies, the Company shall be
entitled to receive from Grant payment of, or reimbursement for, their
reasonable attorneys' fees and disbursements incurred in successfully enforcing
any such provision. The provisions of Sections 6, 7 and 9 and of this Section 8
shall survive any termination of this Agreement.
9. Return of Information and Equipment. On the Effective Date, Grant shall
deliver to the Company (i) any and all work product, devices, records, data,
notes, reports, proposals, correspondence, specifications, drawings, blueprints,
sketches, materials, equipment, customer and supplier lists, financial
statements, budgets, projections, manuals, letter, notebooks, databases or other
documents or property, or reproductions of any aforementioned items relating to
the Company in Grant's possession and (ii) all of the computer equipment leased
by the Company and in Grant's possession. Grant shall not recreate or deliver to
any party other than the Company any of the foregoing items; provided, however,
that such obligation shall not apply to information (i) to the extent that it is
or becomes part of public or industry knowledge from authorized sources other
than Grant or (ii) that Grant is required by law to disclose (but only to the
extent required to be so disclosed).
10. Release.
(a) Grant, in consideration of good and valuable consideration received and
to be received from the Company hereunder, the sufficiency of which is
acknowledged, releases and discharges the Company, and its officers, directors,
shareholders, employees, agents, attorneys and affiliates and its and their
respective heirs, personal representatives, successors and assigns (together,
the "Company Releasees"), of and from all claims, demands, causes of action,
suits, actions, proceedings, judgments, debts, damages, liabilities and
obligations, at law, equity or otherwise, that Grant or his heirs, personal
representatives, successors and assigns had, have or may hereafter have against
the Company Releasees for, on or by reason of any matter, cause or thing
whatsoever from the beginning of the world to the date hereof; provided, that
Grant in no way releases or discharges the Company from its obligations under
this Agreement. Nothing herein shall be construed as an admission by the Company
that Grant has any claim against it. Grant and his heirs, personal
representatives, successors and assigns, further waive any and all manner of
notice, knowledge or discovery of any and all such actual or alleged claims of
cause of action.
(b) The Company, in consideration of good and valuable consideration
received and to be received from Grant hereunder, the sufficiency of which is
acknowledged, releases and discharges Grant and his heirs, personal
representatives, successors and assigns (together, the "Grant Releasees"), of
and from all claims, demands, causes of action, suits, actions, proceedings,
judgments, debts, damages, liabilities and obligations, at law, equity or
otherwise, which the Company or any of its affiliates and any of their
respective successors or assigns had, have or may hereafter have against the
Grant Releasees for, on or by reason of any matter, cause or thing whatsoever
from the beginning of the world to the date hereof; provided, that the Company
in no way releases or discharges Grant from its obligations under this
Agreement. Nothing herein shall be construed as an admission by Grant that the
Company has any claim against him. The Company, its affiliates and their
respective successors and assigns, further waive any and all manner of notice,
knowledge or discovery of any and all such actual or alleged claims of cause of
action.
11. Indemnity.
(a) The Company shall, unless prohibited by Nevada Law (as defined below),
indemnify Grant in any threatened, pending or completed action suit or
proceeding, whether civil, criminal, administrative, arbitrative or
investigative, including without limitation, any action, suit or proceeding
brought by or in the right of the Company to procure a judgment in its favor
(collectively, a "Proceeding") by reason of the fact that Grant was a director
of the Company, against all Expenses and Liabilities (each as defined below)
actually and reasonably incurred by him in connection with such Proceeding.
(b) For purposes of this Agreement:
(i) "Expenses" shall be broadly construed and, without limitation, means
(A) all direct and indirect costs incurred, paid or accrued, (B) all
attorneys fees, retainers, court costs, transcripts, fees of experts,
witness fees, travel expenses, food and lodging expenses while
traveling, duplicating costs, printing and binding costs, telephone
charges, postage, delivery service, freight or other transportation
fees and expenses, (C) all other disbursements and out-of-pocket
expenses, (D) amounts paid in settlement, to the extent permitted by
Nevada Law, and (E) reasonable compensation for time spent by Grant
for which he is otherwise not compensated by the Company or any third
party, actually and reasonably incurred in connection with either the
appearance at or investigation, defense, settlement or appeal of a
Proceeding or establishing or enforcing a right to indemnification
under any agreement or arrangement, Nevada Law or otherwise; provided,
however, that "Expenses" shall not include any judgments or fines or
excise taxes or penalties imposed under the Employee Retirement Income
Security Act of 1974, as amended ("ERISA") or other excise taxes or
penalties.
(ii) "Liabilities" means liabilities of any type whatsoever, including, but
not limited to, judgments or fines, ERISA or other excise taxes and
penalties, and amounts paid in settlement.
(iii)"Nevada Law" means Chapter 78 of the Nevada Revised Statutes as
amended and in effect from time to time or any successor or other
statutes of Nevada having similar import and effect.
12. No Disparagement. Each of Grant and the Company agrees not to make any
statements that libel, slander or defame the other.
13. Entire Agreement. This Agreement sets forth the entire understanding of
the parties with respect to its subject matter, merges and supersedes any prior
or contemporaneous understandings with respect to its subject matter, and shall
not be modified or terminated except by a written instrument executed by the
Company and Grant. Failure of a party to enforce one or more of the provisions
of this Agreement or to require at any time performance of any of the
obligations hereunder shall not be construed to be a waiver of such provisions
by such party nor to in any way affect the validity of this Agreement or such
party's right thereafter to enforce any provision of this Agreement, nor to
preclude such party from taking any other action at any time which it would
legally be entitled to take.
14. Severability. If any provision of this Agreement is held to be invalid
or unenforceable by any court or tribunal of competent jurisdiction, the
remainder of this Agreement shall not be affected by such judgment, and such
provision shall be carried out as nearly as possible according to its original
terms and intent to eliminate such invalidity or unenforceability. In this
regard, the Company and Grant agree that the provisions of Section 6, including,
without limitation, the scope of its territorial and time restrictions, are
reasonable and necessary to protect and preserve the Company's legitimate
interests. If the provisions of Section 6 are held by a court of competent
jurisdiction to be in any respect unreasonable, then such court may reduce the
territory or time to which it pertains or otherwise modify such provisions to
the extent necessary to render such provisions reasonable and enforceable.
15. Arbitration. Any controversy or claim arising out of or relating to
this Agreement shall be finally resolved by arbitration pursuant to the
Commercial Arbitration Rules of the American Arbitration Association, except
that the foregoing shall not prohibit the Company from instituting and
prosecuting an action before a court seeking the injunctive relief contemplated
in Section 8. Any such arbitration shall take place in New York, New York,
before three arbitrators, one of which shall be appointed by the Company, one by
Grant and the third by the arbitrators so appointed; provided, however, that the
parties may by mutual agreement designate a single arbitrator. The parties
further agree that (i) the arbitrators shall be empowered to include arbitration
costs and attorney fees in the award to the prevailing party in such proceedings
and (ii) the award in such proceedings shall be final and binding on the
parties. The arbitrators shall apply the law of the State of New York, exclusive
of conflict of laws principles, to any dispute. Judgment on the arbitrators'
award may be entered in any court having the requisite jurisdiction. Nothing in
this Agreement shall require the arbitration of disputes between the parties
that arise from actions, suits or proceedings instituted by third parties. Each
party irrevocably submits to the jurisdiction and venue of the arbitration
described above and to the jurisdiction and venue of the federal and state
courts sitting in New York County, New York, for the enforcement of any judgment
on the arbitrators' award, and waives any objection it may have with respect to
the jurisdiction of such arbitrations or courts or the inconvenience of such
forums or venues.
16. Successors and Assigns. Grant shall have no right to assign this
personal Agreement, or any rights or obligations hereunder, without the consent
of the Company. On the sale of all or substantially all of the assets of the
Company to another party, or on the merger of the Company with another
corporation, this Agreement shall inure to the benefit of, and be binding on,
both Grant and the party purchasing such assets or surviving such merger in the
same manner and to the same extent as though such other party were the Company.
Subject to the foregoing, this Agreement shall inure to the benefit of, be
binding on and be enforceable by, the parties and their respective heirs,
personal representatives, successors and assigns. The Company may assign all or
any of its rights and obligations under this Agreement.
17. Communications. All notices, consents and other communications given
under this Agreement shall be in writing and shall be deemed to have been duly
given (a) when delivered by hand or by Federal Express or a similar overnight
courier to, (b) five days after being deposited in any United States post office
enclosed in a postage prepaid registered or certified envelope addressed to, or
(c) when successfully transmitted by facsimile (with a confirming copy of such
communication to be sent as provided in (a) or (b) above) to, the party for whom
intended, at the address or facsimile number for such party set forth below, or
to such other address or facsimile number as may be furnished by such party by
notice in the manner provided herein; provided, however, that any notice of
change of address or facsimile number shall be effective only upon receipt.
If to the Company:
Global Network, Inc.
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxx, President
Facsimile No.: (000) 000-0000
If to Grant:
Xx. Xxxx X. Xxxxx
000 Xxxx 00 Xxxxxx, Xxx. 0-X
Xxx Xxxx, Xxx Xxxx 00000
18. Construction; Counterparts. The headings contained in this Agreement
are for convenience only and shall in no way restrict or otherwise affect the
construction of the provisions hereof. References in this Agreement to Sections
are to the sections of this Agreement. This Agreement may be executed in
multiple counterparts, each of which shall be an original and all of which
together shall constitute one and the same instrument.
19. Governing Law. This Agreement shall be governed by the laws of the
State of New York applicable to agreements made and fully to be performed in
such state, without giving effect to conflicts of law principles.
IN WITNESS WHEREOF, each of the parties has executed this Agreement as of
the date first set forth above.
GLOBAL NETWORK, INC.
/s/ Xxxxx X. Xxxxx
--------------------------------
Name:
Title:
/s/ Xxxx X. Xxxxx
--------------------------------
XXXX X. XXXXX
XXXX X. XXXXX
000 Xxxx 00 Xxxxxx, Xxx. 0-X
Xxx Xxxx, Xxx Xxxx 00000
March 1, 2001
Board of Directors
Global Network, Inc.
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
I hereby resign, effective immediately, from the office of director of
Global Network, Inc.
Very truly yours,
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Xxxx X. Xxxxx
