SEPARATION AGREEMENT
EXHIBIT
10.28
This
Separation Agreement (“Agreement”) is made as of the 30th day of September, 2006
by and between Capital Growth Systems, Inc., a Florida corporation (“Company”),
and Xxxx Xxxxxxxx, CTO of Capital Growth Systems, Inc.
(“Executive”).
RECITALS
A. The
Company and Executive are parties to an Employment Agreement, dated as of April
26, 2004 (“Employment Agreement”), pursuant to which Executive serves as the
Chief Technology Officer, Chief Operating Officer and/or any other office or
position (“CTO”) of the Company and NEXVU Technologies, L.L.C., a Delaware
limited liability company (“Subsidiary”).
B. The
Company and Executive have agreed that Executive will cease to serve as the
CTO
of the Company before the end of the term set forth in the Employment Agreement.
C. The
Chief
Executive Officer of the Company has approved this Agreement.
NOW
THEREFORE, the parties agree as follows:
1. Termination
of Employment.
(a) The
Employment Agreement and Executive’s service as CTO are hereby terminated with
effect as of the date of this Agreement (“Effective Date”).
(b) Contemporaneously
with the execution and delivery of this Agreement, with effect as of the
Effective Date, Executive, by execution of this Agreement hereby resigns as
CTO
of the Company, Subsidiary and any other subsidiaries that may be maintained
by
the Company.
(c) Executive
and the Company agree and acknowledge that this Agreement sets forth the
parties’ mutual understanding with respect to Executive’s termination of
employment with the Company and Subsidiary and the termination of the Employment
Agreement. Executive and the Company agree that the termination of employment
set forth herein is not a termination of Executive by the Company or Subsidiary
“With Cause” or “Without Cause” within the meaning of, or for purposes of, the
Employment Agreement. In addition, the Company and Executive agree that the
termination of Executive’s employment pursuant to this Agreement is deemed not
to be a compensable event within the meaning of, and for purposes of, the
Employment Agreement, and therefore, Executive is not
entitled
to payment of additional base salary, bonus or incentive compensation beyond
that earned through the termination of his Employment Agreement. Executive’s
sole right to compensation or other payments from the Company after the
Effective Date shall be as set forth in Section 4 below.
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2. Payments.
Company
will pay Executive all salary, any earned bonus, payment for accrued, but unused
vacation and unpaid business expenses through the Effective Date, subject to
all
applicable state and federal taxes and withholding requirements, which sum
shall
be paid during the next payroll period immediately following the Effective
Date.
In addition, Company shall offer to Executive the right to purchase the computer
laptop currently in use by Executive for a purchase price of $1.
3. Transition
of Toyota Financial Services consulting engagement.
Upon
consent of Toyota Financial Services, the Company agrees to transfer and/or
assign the existing Toyota Financial Services agreement to Executive or the
company in which Executive is employed. The Company will use all commercially
reasonable efforts to assist Executive in the transition of the agreement with
Toyota Financial Services to the Executive or company in which the Executive
is
employed. This shall include, but not be limited to, the assignment and/or
termination of the agreement with Toyota Financial Services at the sole
discretion of Toyota Financial Services, assignment of any Company documentation
specific to such services and release from any obligations under Section 5
and
Section 8 of this Agreement as it pertains to Toyota Financial Services and
payment of all outstanding invoices to sub contractors of Company currently
providing services on behalf of Company to Toyota in accordance with agreed
upon
payment terms. Executive agrees to assume any and all obligations and
liabilities of the Company arising from the existing Toyota Financial Services
contract upon the completion of such transfer and/or assignment by the Company
from the date of the transfer and/or assignment.
4. Options
and Other Payments.
In
accordance with the Stock Option Grant Agreement dated April 19, 2004 between
Xxxx Xxxxxxxx and Capital Growth Systems, Inc., the vested portion (i.e.,
the
option to purchase up to 322,500 shares of the Company’s common stock, $0.00001
par value, (“Common Stock”) of Executive’s option to purchase up to 430,000
shares of Common Stock shall remain in effect and shall be exercisable by
Executive at any time on or before January 28, 2014. The remaining unvested
portion of the Option (i.e.,
to
purchase up to 107,500 shares) shall vest upon its scheduled date of
January 1, 2007
and
Executive shall have the right to exercise such options in accordance with
this
Section
4.
5. Certain
Covenants.
All
references to the Company in this Section 5
shall
include the Subsidiary and all other subsidiaries of the Company and shall
include “Affiliates” of the Company, as that term is construed under Rule 405 of
the Securities Act of 1933, as amended.
(a) Non-Disclosure
of Confidential Information.
During
the course of Executive’s employment with the Company, the Company made
available to Executive, for the purpose of allowing Executive to perform his
duties, certain special and unique confidential and proprietary information
of
the Company that is not generally known to the public or to the Company’s
industry, including but not limited to, certain records, phone locations,
documentation, software programs, price lists, customer lists, contract prices
for the Company’s services, business plans and prospects of the Company,
equipment configurations, ledgers and general information, employee records,
mailing lists, accounts receivable and payable ledgers, financial and other
records of the Company or its affiliates, and other similar matters (all such
information being hereinafter referred to as “Confidential Information”).
Accordingly, Executive hereby agrees that:
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(i) Without
the prior written consent of the Company, Executive will not, for the period
commencing on the Effective Date for a period of two (2) years, directly or
indirectly, divulge to any individual, firm, corporation, limited liability
company, organization, partnership or any other entity (hereinafter referred
to
as “Third Parties”), or use, disclose or cause or authorize any Third Parties to
use or disclose the Confidential Information, except as required by law;
provided,
however, that the Executive notifies the Company of such required disclosure
promptly and in writing and cooperates with the Company, at the Company’s
request and expense, in any lawful action to contest or limit the scope of
such
required disclosure;
and
(ii) Executive
shall deliver or cause to be delivered to the Company any and all Confidential
Information, including drawings, notebooks, notes, records, keys, disks data
and
other documents and materials belonging to the Company which are in his
possession or under his control relating to the Company, regardless of the
medium upon which it is stored, and will deliver to the Company upon the
Effective Date any other property of the Company which is in his possession
or
control.
(b) Non-Solicitation
Covenant.
Executive hereby covenants and agrees that for the period commencing on the
Effective Date, Executive shall not induce or attempt to induce any employee
of
the Company to leave the employ of the Company, or in any way interfere with
the
relationship between any such employee and the Company.
(c) Duty
Not to Defame, Disparage or Interfere with Business.
Executive agrees neither to defame the Company or its officers, employees or
directors nor engage in any conduct or induce any other person to engage in
any
conduct that is any way injurious to the Company’s reputations and interests or
the reputations and interests of any of the Company’s agents, officers,
employees, directors, products or services (including, without limitation,
any
negative or derogatory statements or writings). In addition, Executive shall
not
request, advise, or directly or indirectly, invite any of the existing
customers, suppliers or service providers of the Company to withdraw, curtail
or
cancel its business with the Company.
(d) Remedies.
(i) Injunctive
Relief.
Executive expressly acknowledges and agrees that the business of the company
is
highly competitive and that a violation of any of the provisions of Sections
5(a), 5(b) or 5(c) would cause immediate and irreparable harm, loss and damage
to the Company not adequately compensable by a monetary award. Executive further
acknowledges and agrees that the time periods provided for herein are the
minimum necessary to adequately protect the Company’s business, the enjoyment of
the Confidential Information and the goodwill of the Company. Without limiting
any of the other remedies available to the Company at law or in equity, or
the
Company’s right or ability to collect money damages, Executive agrees that any
actual or threatened violation of any of the provisions of Sections 5(a), 5(b)
or 5(c) may be immediately restrained or enjoined by any court of competent
jurisdiction, and that a temporary restraining order or emergency, preliminary
or final injunction may be issued in any court of competent jurisdiction,
without notice and without bond. Notwithstanding anything to the contrary
contained in this Agreement, the provisions of this Section 5(d) shall survive
the termination of this Agreement.
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(ii) Enforcement.
It is
the desire of the parties that the provisions of Sections 5(a), 5(b) or 5(c)
be
enforced to the fullest extent permissible under the laws and public policies
in
each jurisdiction in which enforcement might be sought. Accordingly, if any
particular portion of Sections 5(a), 5 (b), 5(c) shall ever be adjudicated
as
invalid or unenforceable, or if the application thereof to any party or
circumstance shall be adjudicated to be prohibited by or invalidated by such
laws or public policies, such section or sections shall be: (A) deemed amended
to delete there from such portions so adjudicated; or (B) modified as determined
appropriate by such a court, such deletions or modifications to apply only
with
respect to the operation of such section or sections in the particular
jurisdictions so adjudicating on the parties and under the circumstances as
to
which so adjudicated.
6. Disclosure
Regarding Agreement.
The
parties agree that the Company may make such disclosure regarding Executive’s
termination as CTO of the Company as in the judgment of the Company’s counsel is
required by law, or regulation. In the event of an inquiry to the Company from
third parties as to the circumstances surrounding Executive’s cessation of
employment, the Company will advise such parties that Executive and the Company
agreed to mutually part company as Executive has elected to pursue other
business interests.
7. Representations
and Warranties.
(a) Executive
represents and warrants to the Company that to the best of his knowledge he
has
not engaged in any violation of law or any breach of any fiduciary duty owed
as
an officer of the Company that could give rise to the Company having a claim
against him.
(b) The
Company represents and warrants to Executive that to the best of the Company’s
knowledge the Company has not engaged in any violation of law that could give
rise to Executive having a claim against the Company.
8. Releases.
(a) The
Company forever releases, remises and discharges Executive, together with his
heirs, personal representatives, successors and assigns (collectively the
“Employee Released Parties”) from any and all claims, claims for relief,
demands, actions and causes of action of any kind or description whatsoever,
known or unknown, whether arising out of contract, tort, statute, treaty or
otherwise, in law or in equity, which the Company now has or has had against
any
Employee Released Party from the beginning of the world to the date of this
Agreement arising from, connected with, or in any way growing out of, directly
or indirectly, Executive’s employment with the Company, his service on behalf of
the Company, or any other transaction between the parties prior to the date
of
this Agreement and all effects, consequences, losses, damages, negotiations
and
dealings relating thereto; provided, however, that nothing in this
Section 8(a) will bar, impair or affect any of the obligations, covenants
and agreements of Executive set forth in this Agreement.
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(b) Executive,
for himself and his heirs, spouse, children, personal representatives,
successors and assigns, forever releases, remises and discharges the Company
and
each of its past, present, and future officers, directors, shareholders,
members, trustees, agents, representatives, affiliates, successors and assigns
(collectively the “Employer Released Parties”) from any and all claims, claims
for relief, demands, actions and causes of action of any kind or description
whatsoever, known or unknown, whether arising out of contract, tort, statute,
treaty or otherwise, in law or in equity, which Executive now has, has had,
or
may hereafter have against any of the Employer Released Parties from the
beginning of the world to the date of this Agreement, arising from, connected
with, or in any way growing out of, directly or indirectly, Executive’s
employment by the Company, the services provided by Executive to the Company,
the contemplated assignment/transfer of the Toyota Financial Services agreement
upon assignment/transfer or any transaction prior to the date of this Agreement
and all effects, consequences, losses and damages relating thereto, including,
but not limited to, all claims arising under the Civil Rights Acts of 1866
and
1964, the Fair Labor Standards Act of 1938, the Equal Pay Act of 1963, the
Age
Discrimination in Employment Act of 1967, the Rehabilitation Act of 1973, the
Older Workers Benefit Protection Act of 1990, the Americans With Disabilities
Act of 1990, the Civil Rights Act of 1991, the Family and Medical Leave Act
of
1993, and all other federal or state laws governing employers and employees;
provided, however, that nothing in this Section 8(b) will bar, impair or
affect the obligations, covenants and agreements of the Company set forth in
this Agreement.
9. Covenants;
Bylaws.
(a) Covenant
Not to Xxx by Executive.
Executive agrees that he will not now or hereafter commence or initiate any
claim or charge of employer discrimination with any governmental agency or
xxx
the Company concerning any claims relating to his employment and/or termination
of employment with the Company, except as the same may affect Executive’s rights
with respect to the enforcement of this Agreement. This Agreement may be pled
as
a full and complete defense to, and may be used as a basis for injunction
against, any action or proceeding Executive may institute, prosecute, or
maintain in breach of this Agreement.
(b) Covenant
Not to Xxx by Employer.
The
Company agrees that it will not now or hereafter commence or initiate any claim
or charge with any governmental agency or xxx Executive concerning any claims
relating to his employment and/or termination of employment with the Company,
except as the same may affect the Company’s rights with respect to the
enforcement of this Agreement. This Agreement may be pled as a full and complete
defense to, and may be used as a basis for injunction against, any action or
proceeding the Company may institute, prosecute, or maintain in breach of this
Agreement.
(c) The
Company will abide by its indemnification obligations pursuant to its
bylaws.
10. Notice.
Any
notice required or permitted to be given to a party pursuant to the provisions
of this Agreement must be in writing and will be deemed to have been given
on
the date of receipt if delivered by messenger or transmitted via facsimile
to,
or if mailed to such party by registered or certified mail, postage prepaid,
at,
the address for such party set forth below (or to such other address or party
as
such party shall designate in writing to the other party from time to
time).
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If
to the Company, to:
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Capital
Growth Systems, Inc.
00
X. Xxxxxxxx Xxxxx, Xxxxx X
Xxxxxxxxxx,
XX 00000
Attention: President
Facsimile: 000-000-0000
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If
to Executive, to:
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The
address set forth directly below his
signature.
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11. Modification
and Waiver.
(a) No
waiver
or modification of this Agreement or of any covenant, condition, or limitation
herein contained will be valid or effective unless in writing and duly executed
by the party to be charged therewith and no evidence of any waiver or
modification will be offered or received in evidence in any proceeding or
litigation between the parties arising out of or affecting this Agreement,
or
the rights or obligations of the parties hereunder, unless such waiver or
modification is in writing, duly executed as aforesaid.
(b) The
parties further agree that the provisions of paragraph (a) above may not be
waived except as herein set forth. No waiver of any of the provisions of this
Agreement will be deemed, or will constitute, a waiver of any other provision,
whether or not similar, nor will any waiver constitute a continuing waiver.
No
waiver of any breach of condition of this Agreement will be deemed to be a
waiver of any other subsequent breach of condition, whether of like or different
nature.
12. Consent
to Jurisdiction, Venue and Service of Process.
Each of
the Company and Executive, after having had an opportunity to consult with
legal
counsel, knowingly, voluntarily, intentionally, and irrevocably:
(a) consents
to the jurisdiction of the courts of Xxxx County, in the State of Illinois
and
in the United States District Court for the Northern District of Illinois with
respect to any action, suit, proceeding, investigation, or claim arising from
enforcement of this Agreement (“Litigation”);
(b) waives
any objections to the jurisdiction and venue of any Litigation in either such
court;
(c) agrees
not to commence any Litigation except in either of such courts and agrees not
to
contest the removal of any Litigation commenced in any other court to either
of
such courts;
(d) agrees
not to seek to remove, by consolidation or otherwise, any Litigation commenced
in either of such courts to any other court; and
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(e) waives
personal service of process in connection with any Litigation and consent to
service of process by registered or certified mail, postage prepaid, addressed
as set forth herein.
These
provisions will not be deemed to have been modified in any respect or
relinquished by any party except by written instrument executed in accordance
with Section 11.
13. No
Admission.
This
Agreement is the compromise of actual or possible claims and nothing herein,
nor
any payment made pursuant to this Agreement, shall constitute, or be construed
as, an admission of any charge or allegation or concession of liability, which
is expressly denied. Neither this Agreement nor any payment made pursuant to
this Agreement is admissible in evidence against the Company for any purpose,
except for seeking its enforcement.
14. Severability.
Wherever possible, each provision of this Agreement shall be interpreted in
such
manner as to be effective and valid under applicable law if a judicial
determination is made that any of the provisions of this Agreement constitutes
an unreasonable or otherwise unenforceable restriction against any party, the
parties hereto agree and it is their desire, that the court shall substitute
a
judicially enforceable limitation in its place, and that as so modified the
covenant shall be binding upon the parties as if originally set forth herein.
Such determination shall not affect the validity of the remaining
provisions.
15. Further
Assurances.
The
parties agree to take such action and execute and deliver, promptly upon
request, such additional documents as may be necessary or appropriate to
implement the terms of this Agreement and effectuate its intent.
16. Costs
and Expenses.
In the
event of a breach of this Agreement, the prevailing party shall recover from
the
non-prevailing party all costs and expenses, including actual attorney’s fees,
incurred in compelling compliance with this Agreement.
17. Governing
Law.
This
Agreement will be governed by and construed in accordance with the laws of
the
State of Illinois, without giving effect to its principles of conflicts of
laws.
18. Entire
Agreement.
This
Agreement constitutes the entire agreement between the parties pertaining to
the
subject matter hereof and supersedes all prior and contemporaneous agreements,
representations, and understandings, whether oral or in writing, of the parties.
19. Counterparts.
This
Agreement may be executed in one or more counterparts, whether by photocopy,
original or facsimile, each of which will be deemed to constitute an original
but all of which together will constitute one and the same
instrument.
20. Successors
and Assigns.
(a) Executive
may not assign any rights or obligations under this Agreement without the prior
written consent of the Company. This Agreement will be binding upon and inure
to
the benefit of Executive and his heirs, spouse, children, personal
representatives, and permitted successors and assigns.
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(b) The
Company may assign any rights or obligations under this Agreement without the
prior written consent of Executive. This Agreement will be binding upon and
inure to the benefit of the Company and its successors and assigns.
21. Third
Party Beneficiaries.
Each of
the Employer Released Parties that is not a party to this Agreement will be
a
third party beneficiary of this Agreement. Each of the Employee Released Parties
that is not a party to this Agreement will be a third party beneficiary of
this
Agreement. This Agreement will be enforceable by each such Employer Released
Party and each such Employee Released Party to the same extent as if the
Releasee were a party hereto.
22. Return
of Other Company Property.
Except
as provided herein, Executive agrees that he will, within thirty (30) days
after
the Effective Date, return to the Company all of its property, including but
not
limited to, any Company credit cards, keys, office furniture and equipment.
The
Company may cancel any Company credit cards at any time.
IN
WITNESS WHEREOF, the parties have executed this Agreement as of the day and
year
first above written.
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COMPANY:
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EXECUTIVE:
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CAPITAL
GROWTH SYSTEMS, INC.
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/s/
Xxxx Xxxxxxxx
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Xxxx
Xxxxxxxx
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By:
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/s/
Xxxxx X. Xxxx
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Its:
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Chief Financial Officer |
Address:
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