Exhibit 10.1
SEVERANCE AGREEMENT AND GENERAL RELEASE
THIS SEVERANCE AGREEMENT AND GENERAL RELEASE (the "Agreement") is
hereby entered into on the 20th day of June, 2002, by and between XXXXXXX
XXXXXXX ("Zwebner") and TALK VISUAL CORPORATION, a Delaware corporation, for
itself and on behalf of its agents, officers, directors, affiliates, employees,
former employees, successors and assigns (collectively, the "Company").
RECITALS
WHEREAS, Zwebner and the Company have mutually agreed to no longer be
affiliated (except for Zwebner being a shareholder and warrant holder of the
Company) effective as of the Separation Date, as defined herein;
WHEREAS, Zwebner and the Company desire to settle and resolve all
outstanding issues and potential disputes which have arisen or could arise
between them, including but not limited to, disputes that may arise out of
Zwebner's relationships with the Company, and any claims Zwebner may have
against the Company, or its employees or agents, under federal or state
statutory or common law and any contract or agreement or other right, interest
or title; and
WHEREAS, during his affiliation with the Company, Zwebner borrowed
funds from the Company individually (the "Zwebner Loan") and through Hard Disc
Cafe, Inc., a corporation controlled by Zwebner (the "Hard Disc Loan" and
collectively with the Zwebner Loan, the "Loans").
NOW, THEREFORE, in consideration of mutual promises, covenants and
releases contained within this Agreement and for other good and valuable
consideration, the receipt of which is hereby acknowledged, the parties hereto
agree as follows:
AGREEMENT
1. Recitals. All of the foregoing Recitals are true and correct and
hereby incorporated into this Agreement.
2. Termination. The parties acknowledge that Zwebner's consulting
agreement with the Company (through Overseas Communications Limited, a foreign
corporation, in which Zwebner is a principal shareholder and a director) is
hereby terminated as of the date hereof (the "Separation Date") and that no
accrued amounts or benefits are owed to Zwebner thereon. The parties further
acknowledge that Zwebner is deemed to have resigned from all officer and
director positions with the Company (including, without limitation, the position
of Chairman of the Board of Directors and any position on any committee of the
Board of Directors of the Company) and such positions with any and all
subsidiaries and corporate affiliates of the Company.
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3. Repayment of the Loans; Forgiveness of Outstanding Rental Payments.
The parties acknowledge that the current amounts due under the Loans are as
follows: (i) $93,093.86 (without interest) under the Zwebner Loan; and (ii)
$152,114.91 (including applicable accrued interest) under the Hard Disc Loan.
Upon the execution of this Agreement, Zwebner shall execute and deliver to the
Company a promissory note, in the form of Exhibit "A" attached hereto,
evidencing his obligations with respect to the Zwebner Loan. In addition,
Zwebner shall cause Hard Disc Cafe, Inc. to execute and deliver to the Company a
promissory note, in the form of Exhibit "B" attached hereto, evidencing its
obligations with respect to the Hard Disc Loan (collectively, the "Notes").
The parties further acknowledge that Hard Disc Cafe, Inc. owes the
Company approximately $81,709.54 in rental payments relating to the Company's
Sacramento, CA facility (the "Outstanding Rent"). As partial consideration for
the execution of this Agreement by Zwebner and the joinder by Hard Disc Cafe,
Inc., the Company hereby forgives the entire amount of the Outstanding Rent;
provided, however, that Hard Disc Cafe, Inc. shall have vacated the Sacramento,
CA facility as of the execution of this Agreement.
4. Issuance of Shares and Warrants to Zwebner. Within 5 days following
the full and timely payment of all amounts due under the Loans, the Company
shall issue to Zwebner 4,000,000 shares of the common stock of the Company (the
"Shares"). In addition, upon the execution of this Agreement, the Company shall
grant to Zwebner warrants to purchase 2,5000,000 shares of the common stock of
the Company (the "Warrants"). The Shares, when issued, shall be fully paid and
non-assessable and shall be deemed "restricted securities" as such term is
defined in Rule 144(a)(3) promulgated under the Securities Act of 1933, as
amended. The Warrants shall be in the form of Exhibit "C" attached hereto. The
Warrants shall be exercisable for a period of one year commencing on the date of
the grant of the Warrants. The per share exercise price of the Warrants shall be
$0.025. Any shares of common stock of the Company issued under the document
representing the Warrants shall be issued in the name of and held in escrow by
Xxxxxx & Xxxx, P.A. (the "Escrow Agent"), and pledged to the Company in
accordance with Section 3 of the Warrant document to secure the payment and
performance of the obligations of Zwebner under the Notes.
The parties acknowledge that in the event that any of the amounts due
under the Notes are not paid on a timely basis and in accordance with the
respective terms thereof, then the Company shall have no obligation to issue any
of the Shares to Zwebner hereunder and Zwebner's rights to receive such Shares
and exercise the Warrants shall immediately expire; provided, however, to the
extent that Zwebner has paid (or caused to be paid) to the Company any amount
due under the Notes at or prior to the maturity date indicated therein, then the
Company shall issue for the benefit of Zwebner that pro rata amount of the
Shares proportional to the amount that the aggregate principal amount of the
Notes have been reduced; provided, further, that any such payments will be
applied first to accrued interest and other applicable charges with respect to
such obligations, and then applied to principal under the Notes.
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Any such Shares issued pursuant to the preceding paragraph shall be
issued in the name of the Escrow Agent (for the benefit of Zwebner) and pledged
to the Company to secure the payment and performance of the obligations of
Zwebner under the Notes. In the event of default under the Notes, the Company
may exercise all rights and remedies of a secured party with respect to the
Shares as may be available under the Uniform Commercial Code as in effect in the
State of Florida. Upon satisfaction of all of the obligations under the Notes
(and provided there are no defaults thereunder), the Company shall deliver to
Zwebner the stock certificates representing the Shares and any and all rights of
the Company in such shares shall be terminated.
5. Termination of Participation and Entitlement. Zwebner acknowledges
that upon the Separation Date, Zwebner has been paid all amounts due to Zwebner
and that except as otherwise provided in Section 4, above, the Company is not
and shall not be obligated to pay any additional money, amounts or benefits to
Zwebner. Effective with the close of business on the Separation Date, Zwebner's
participation in and entitlement to any and all other payments and benefits from
the Company shall cease, excluding those that Zwebner was entitled to prior to
the Separation Date.
6. Release by Zwebner. Zwebner, on behalf of himself and his agents,
heirs, executors, administrators, successors, representatives and assigns,
hereby fully and finally releases and forever discharges the Company, its
parents, subsidiaries, affiliates and any other entity under common control or
ownership with the Company, including each of their respective officers,
directors, shareholders, partners, joint venturers, members, agents, attorneys,
employees, representatives, successors and assigns (collectively, "Released
Parties"), from any and all claims, known or unknown, based upon any act or
omission by any of the Released Parties occurring prior to and including the
date of this Agreement, including but not limited to any claims arising out of
or in connection with Zwebner's affiliation and/or the termination of Zwebner's
affiliation with the Company, and any claims of discrimination, wrongful
discharge, breach of contract, tort and any other personal injury claims, and
any claims that the Company violated any law and any claim for additional
benefits, and specifically including any rights and claims relating to
defamation, workers' compensation, fraud, misrepresentation, intentional or
negligent infliction of emotional distress, breach, of any covenant of good
faith and fair dealing, negligence, commission, vacation pay, overtime pay,
termination or severance pay, the proceeds of any insurance or disability plans,
or any other fringe benefits of any kind whatsoever. Zwebner covenants and
agrees that, to the maximum extent permitted by applicable law, he will not xxx
or file or institute or maintain any lawsuit, grievance or arbitration against
any of the Released Parties with respect to any of the claims, matters and
issues covered by this release, under Title VII of the Civil Rights Act of 1964,
the Civil Rights Act of 1991, the Americans with Disabilities Act and/or any
other regulation, under the common law of any province or state, or under any
contract or any other theory of relief. Further, in any legally authorized
action, Zwebner waives the right to any form of recovery, compensation or other
remedy or relief of any kind. In the event that Zwebner violates any part of
this paragraph, the Company shall be entitled to recover damages from Zwebner,
including but not limited to attorneys' fees and the costs of defending such a
suit or claim.
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This release does not apply to any default under this Agreement or any
action to enforce this Agreement.
7. Release by the Company. The Company, on behalf of itself and its
parents, subsidiaries, affiliates and any other entity under common control or
ownership with the Company, including each of their respective officers,
directors, shareholders, partners, joint venturers, members, agents, attorneys,
employees, representatives, successors and assigns, hereby fully and finally
releases and forever discharges Zwebner and his agents, heirs, executors,
administrators, successors, attorneys, representatives and assigns
(collectively, "Released Parties"), from any and all claims, known or unknown,
based upon any act or omission by any of the Released Parties occurring prior to
and including the date of this Agreement, including but not limited to any
claims arising out of or in connection with Zwebner's affiliation (either
individually or through the consulting agreement with Overseas Communications
Limited) and/or the termination of Zwebner's affiliation with the Company, and
any claims of discrimination, wrongful discharge, breach of contract, tort and
any other personal injury claims, and any claims that Zwebner violated any law
and any claim for additional benefits, and specifically including any rights and
claims relating to defamation, workers' compensation, intentional or negligent
infliction of emotional distress, breach, of any covenant of good faith and fair
dealing, negligence, commission, vacation pay, overtime pay, termination or
severance pay, the proceeds of any insurance of disability plans, or any other
fringe benefits of any kind whatsoever. Notwithstanding the foregoing, the
Company shall not release any of the Released Parties for any claims,
liabilities, damages or losses arising from any of the following: (i) fraud,
embezzlement, misappropriation of funds or breach of trust by any of the
Released Parties, or (ii) willful misconduct or gross negligence by any of the
Released Parties in connection with the affiliation of the Released Parties with
the Company. The Company covenants and agrees that, to the maximum extent
permitted by applicable law, the Company will not xxx or file or institute or
maintain any lawsuit, grievance or arbitration against any of the Released
Parties with respect to any of the claims, matters and issues covered by this
release, under Title VII of the Civil Rights Act of 1964, the Civil Rights Act
of 1991, the Americans with Disabilities Act and/or any other regulation, under
the common law of any province or state, or under any contract or any other
theory of relief. Further, in any legally authorized action, the Company waives
the right to any form of recovery, compensation or other remedy or relief of any
kind. In the event that the Company violates any part of this paragraph, Zwebner
shall be entitled to recover damages from the Company, including but not limited
to attorneys' fees and the costs of defending such a suit or claim.
This release does not apply to any default under this Agreement or any
action to enforce this Agreement.
8. Confidentiality of Agreement. Zwebner and the Company (and its
officers and directors) agree not to disclose the terms or existence of this
Agreement or anything relating to his affiliation with the Company to any
employee, prospective employee, customer, prospective customer, or vendor or
other business partner of the Company or its subsidiaries, any other person
doing business with the Company or its subsidiaries, any member of the media, or
to any attorney or other representative of the foregoing, except as may be
required in response to lawful process of any judicial authority, and except as
may be necessary in the pursuit of subsequent employment.
9. Return of Company Property. Zwebner shall immediately return to the
Company any and all items of Company property, including, but not limited to
computers, credit cards, keys, ID cards, calculators, computer passwords, and
"Confidential Information" (as described below).
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10. Confidential Information. As of the Separation Date, Zwebner shall
have returned to the Company all documents, letters, notes, programs, software,
media, photographs, lists, manuals, records, notebooks, and similar repositories
of or containing "Confidential Information" (as described in this Section),
including all copies thereof, whether prepared by Zwebner or others, that are in
Zwebner's possession. Zwebner will not, directly or indirectly, use,
disseminate, disclose, lecture upon, or publish articles concerning any
Confidential Information, unless specifically authorized in writing by an
authorized officer of the Company. The term "Confidential Information" means all
of the valuable, confidential, and proprietary business, financial, technical,
economic, sales, and/or other types of proprietary business information relating
to the Company (including all trade secrets), in whatever form, whether oral,
written, or electronic, to which Zwebner has, or is given (or has had or been
given), access as a result of his affiliation with the Company. Such
Confidential Information includes, without limitation, non-public information
regarding the Company's products, equipment, processes, systems, programs or
services, including information relating to research, development, inventions,
manufacturing, purchasing, accounting, marketing, merchandising, selling,
financial affairs, plans, pricing, clients, customer lists, personnel,
operations or business activities. This restriction shall not apply to any
Confidential Information that (i) becomes known generally to the public through
no fault of the Zwebner; (ii) is required by applicable law, legal process, or
any order or mandate of a court or other governmental authority to be disclosed;
or (iii) is reasonably believed by Zwebner, based upon the advice of legal
counsel, to be required to be disclosed in defense of a lawsuit or other legal
or administrative action brought against Zwebner; provided, that in the case of
clauses (ii) or (iii) above, Zwebner shall give the Company reasonable advance
written notice of the Confidential Information intended to be disclosed and the
reasons and circumstances surrounding such disclosure, in order to permit the
Company to seek a protective order or other appropriate request for confidential
treatment of the applicable Confidential Information.
11. Non-Disparagement. As a material inducement to enter into this
Agreement, each of the parties agrees that each will at all times refrain from
taking any action or making any statements which may injure or disparage the
goodwill or reputation of the other within the business community or to the
public at large, and, in the case of the Company, their respective shareholders,
customers, officers, directors, attorneys, employees, subsidiaries, related
entities, successors and assigns.
12. Enforcement of Agreement. Zwebner recognizes that a breach of any
of the provisions of Sections 8, 9, 10 or 11 of this Agreement would cause
irreparable damage to the Company's business and that such damage will be
difficult or impossible to measure. Therefore, in the event of a violation or a
threatened violation by Zwebner of the terms of this Agreement, which violation
or threatened violation has been proven by a preponderance of the evidence in a
court of competent jurisdiction, Zwebner hereby acknowledges and agrees that the
Company will have the right, in addition to all other remedies available to it
at law or in equity, to affirmative or negative injunctive relief from a court
of competent jurisdiction (i) restraining Zwebner from disclosing, in whole or
in part, any Confidential Information to any person, firm, corporation,
partnership, association or other entity to whom or to which such Confidential
Information is threatened to be disclosed; and/or (ii) restraining Zwebner from
any continued or threatened violation of the covenants contained in this
Agreement. Under no circumstances will the Company be entitled to enjoin Zwebner
or terminate any of Zwebner's benefits without proof in a court of competent
jurisdiction, by a preponderance of the evidence, that Zwebner has violated or
has threatened to violate the terms of this Agreement. Zwebner agrees to entry
of an appropriate protective order to ensure confidentiality of all documents
and any other relevant evidence.
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13. Notices. All notices, offers, acceptances, requests and other
communications under or pursuant to the terms of this Agreement shall be in
writing and shall be deemed to have been given when personally delivered or
deposited in the United States mail, certified or registered mail, with postage
prepaid, or sent by facsimile or recognized overnight courier service addressed
as follows:
If to the Company: Talk Visual Corporation
0000 Xxxxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxx, Xxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxxx Xxxxxxx
If to Zwebner: Xxxxxxx Xxxxxxx
The Jockey Club 3, Apt. 1058
00000 Xxxxxxxx Xxxxxxxxx
Xxxxx Xxxxxxx 00000
Facsimile: (000) 000-0000
Any party may change his or its address set forth in this Section, by
written notification.
14. Governing Law. This Agreement shall be governed by and construed
and enforced in accordance with the laws of the State of Florida.
15. Amendment. This Agreement may be amended only by a written document
signed by Zwebner and an executive officer of the Company.
16. Right to Consult with Counsel. Zwebner acknowledges that the
Company informed Zwebner that Zwebner has the right to consult with an attorney
before signing this Agreement, and that this Section shall constitute written
notice to Zwebner of such right to be advised by legal counsel.
17. Entire Agreement. This Agreement (along with all attachments
hereto) constitutes the entire agreement of the parties hereto and supersedes
all prior agreements, understandings, negotiations and discussions, both written
and oral, between the parties hereto with respect to the subject matter hereof
and is not intended to confer upon any other person any rights or remedies
hereunder except as expressly provided herein. The parties have not relied upon
any promises, representations, warranties, agreements, covenants or
undertakings, other than those set forth or referred to herein.
18. Severability. The language of all parts of this Agreement shall in
all cases be construed as a whole, according to its fair meaning. However, in
the event that a court of competent jurisdiction deems any provision hereof to
be unreasonable, void or unenforceable, such provision(s) of this Agreement
declared void, unreasonable or unenforceable shall be deemed revised to the
minimum amount necessary in order to be valid and enforceable, and if such
provision(s) cannot be so revised, such provision(s) shall be deemed severed
from the remainder of the Agreement, which shall continue in all other respects
to be valid and enforceable.
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19. Acknowledgments. Zwebner declares that Zwebner has read and
understands all the terms of this Agreement; that Zwebner has had ample
opportunity to review it with Zwebner's attorney before signing it; that no
promise, inducement, or agreement has been made except as expressly provided in
this Agreement; that it contains the entire Agreement between the parties; and
that Zwebner enters into this Agreement fully, voluntarily, knowingly and
without coercion.
20. Successors and Assigns. This Agreement shall be binding upon the
heirs, executors, administrators, successors and assigns of all parties.
21. Waiver. Any failure by a party hereto to comply with any
obligation, agreement or condition herein may be expressly waived, but such
waiver or failure to insist upon strict compliance with such obligation,
agreement or condition shall not operate as a waiver of, or estoppel with
respect to, any subsequent or other failure.
22. Construction. The parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the parties and no presumption or burden of proof shall
arise favoring or disfavoring any party by virtue of the authorship of any of
the provisions of this Agreement. Any reference to any federal, state, local or
foreign statute or law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context requires otherwise. The
specifications of any dollar amount in the representations and warranties or
otherwise in this Agreement is not intended and shall not be deemed to be an
admission or acknowledgment of the materiality of such amounts or items, nor
shall the same be used in any dispute or controversy between the parties to
determine whether any obligation, item or matter (whether or not described
herein or included in any schedule) is or is not material for purposes of this
Agreement.
23. Counterparts. This Agreement may be signed in one or more
counterparts, each of which when so executed shall be deemed an original and
together shall constitute one and the same instrument.
24. Variations in Pronouns. All pronouns and any variation thereof
shall be deemed to refer to the masculine, feminine or neuter, singular or
plural, as the identity of the antecedent persons or entity or entities may
require.
25. Further Documentation. The parties shall execute and deliver any
other instruments or documents and take any further actions after the execution
of this Agreement, which may be reasonably required for the implementation of
this Agreement and the transactions contemplated hereby.
[Signatures Begin on Following Page]
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IN WITNESS WHEREOF, the undersigned have executed and delivered this
Severance Agreement and General Release as of the day and year first above
written.
TALK VISUAL CORPORATION
By:
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Name:
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Title:
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JOINDER AND ACCEPTANCE
The undersigned, intending to be legally bound, and understanding that
Xxxxxxx Xxxxxxx and Talk Visual Corporation have entered into that certain
Severance Agreement and General Release dated as of date hereof (the
"Agreement"), covenants that it shall be bound by the terms and conditions
contained in Sections 3 and 4 of the Agreement.
The undersigned has executed this Joinder and Acceptance as of the ____
day of ___________, 2002.
HARD DISC CAFE, INC.
By:
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Name:
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Title:
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Xxxxxxx Xxxxxxx
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