AGREEMENT
Exhibit
10.78
AGREEMENT
THIS
AGREEMENT (the
“Agreement”)
is
dated as of December 14, 2006 and is made by and between XXXXXX PRODUCTS CORP.,
f/k/a XXXXXX CAPITAL CORP., a Nevada corporation (the “Company”),
and
XXXXXXX XXXXXXX (the “Executive”).
WHEREAS,
the Executive was brought on board to commence the implementation of a
restructuring of the Company, to establish a strategic plan and secure
financing; and
WHEREAS,
the Executive has completed successfully those tasks and has determined that
it
is now appropriate to resign from the Executive’s employment relationship with
the Company with the consent of the Company, and the parties hereto desire
to
settle and resolve all issues arising from or related to such relationship
and
the termination thereof.
NOW
THEREFORE, in consideration of the mutual promises made herein and other good
and valuable consideration the receipt and adequacy of which are hereby
acknowledged, the Company and the Executive (collectively referred to as the
“Parties”)
hereby
agree as follows:
1. Resignation.
The
Executive hereby resigns from the Executive’s employment with the Company with
the consent of the Company as Chief Executive Officer and the Executive hereby
resigns and withdraws from all other positions (as an employee, officer,
director or board committee member or otherwise) of the Company and of any
subsidiary or affiliate of the Company (together with the Company the
“Company
Entities”),
effective as of the close of business on December 14, 2006 (the “Effective
Date”).
The
Executive agrees that he has received all compensation owed to him in respect
thereof (including under the Employment Agreement (as hereinafter defined)),
except for (i) payment of his base salary and accrued but unpaid vacation
through the date hereof, (ii) his rights to exercise his vested stock options
(“Stock
Options”)
pursuant to the terms of the stock option agreements by and between the
Executive and the Company dated August 2, 2005, November 17, 2005 and January
25, 2006, respectively with respect to 100,000, 300,000 and 2,200,000 shares
of
the Company’s common stock (the “Stock
Option Agreements”),
and
(iii) his right to elect continuation of group health coverage under the
Consolidated Omnibus Budget Reconciliation Act of 1985, as amended ("COBRA"),
and that upon receipt of such compensation and benefits he will have no
continuing right to receive any additional compensation or benefits, including
severance or a year-end bonus, from any of the Company Entities following or
in
respect of such resignation, except as specifically provided for herein.
2. Settlement.
In
consideration of the Executive’s obligations in Section 5(b) hereof, the Company
hereby agrees to pay to the Executive, the amount of $150,000 (the “Settlement
Payment”).
The
Settlement Payment shall be paid in a lump sum payment on December 14, 2006;
provided, however, that if the Executive fails to execute the Release Agreement,
which is attached as Exhibit A hereto (the “Release”),
within the time frame specified hereunder and in Section 7 of the Release or
if
the Executive rescinds the Release within the period specified in Section 7
of
the Release, the Executive shall promptly return the Settlement Payment to
the
Company. The Executive shall also be entitled to retain his Stock Options,
exercisable for 2,600,000 shares of the Company’s common stock, pursuant to the
terms of the Stock Option Agreements, as heretofore amended. The Company hereby
acknowledges to the Executive that the Stock Option Agreements have been
amended, subject to the execution of this Agreement and the Release, and
expiration, without rescission, of the rescission period in Section 7 of the
Release, as follows: (i) the Stock Options are vested in full, (ii) the exercise
price of the Stock Options have been reduced to $0.11 per share and (iii) the
Stock Options are exercisable at the option of the Executive on a “cashless”
basis.
3. Benefits.
The
Company shall promptly reimburse the Executive for any medial insurance costs
incurred by the Executive and/or his spouse through December 31, 2007. The
Executive shall not be entitled to receive any other benefits of the Company
from and after the Effective Date other than as specifically provided
herein.
4. Return
of Company Property.
The
Executive represents and warrants that he will return to the Company or, at
the
Company’s option, confirm that he has destroyed, in each case, no later than
December 14, 2006, all property of the Company, including all equipment, all
corporate credit cards issued in the Executive’s or the Company’s name, all keys
to offices of the Company and all memoranda, records and other documents, papers
or electronic media relating to the Company (including without limitation all
account information such as contact names, addresses, numbers and other
information regarding customers and potential customers), and all copies thereof
including such items stored in computer memories, prepared by or made available
to the Executive during employment with the Company. Notwithstanding the
previous sentence, subject to the execution of the Release and expiration,
without rescission, of the rescission period in Section 7 of the Release, the
Executive is entitled to retain his laptop computer, his cell phone, and his
blackberry, provided that he temporarily gives the Company the opportunity
and
access to erase all materials on the laptop computer and on the blackberry;
it
being understood that the Company and its agents shall no longer provide any
service to the foregoing. Subject to the execution of the Release and
expiration, without rescission, of the rescission period in Section 7 of the
Release, the Executive shall be entitled, at the Company’s expense through
December 31, 2007, to continue to use that certain leased car that he uses
that
is in the Company’s name. In the event that the current lease for said vehicle
expires prior to December 31, 2007, the Company shall promptly reimburse the
Executive the cost of a replacement vehicle during such time provided that
the
Company shall not be responsible to reimburse the Executive any amounts in
excess of the current lease costs through December 31, 2007.
5. Covenants.
a. Confidentiality;
Non-Compete.
The
Executive acknowledges to the Company that he continues to be bound by the
confidentiality, noncompetition and nonsolicitation restrictions contained
in
the Employment Agreement.
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b. Release
and Non-Disparagement.
Simultaneously with the execution of this Agreement, the Company shall execute
and deliver to the Executive, the Release. This Agreement shall be null and
void
if the Executive fails to execute the Release within the time period provided
in
Section 7 of the Release or if the Executive rescinds his execution of the
Release within the time period provided in Section 7 of the
Release.
c. Mail,
Telephone and Email.
The
Company shall promptly forward to the Executive all personal correspondence
and
mail it receives from time to time on the Executive’s behalf (including without
limitation, insurance documentation). During the sixty (60) days following
the
Effective Date, on the same basis as are currently available, the Company shall
promptly notify each party that sends the Executive an email that he is no
longer employed with the Company and place a similar message on the Executive’s
voicemail at the Company.
6. Representations.
a. Authority,
Reliance, Liens.
The
Executive represents and warrants that (i) the Executive has the capacity to
act
on the Executive’s own behalf and on behalf of all who might claim through the
Executive to bind them to the terms and conditions of the Resignation Documents
(defined below), (ii) the Executive has not relied upon any representations
or
statements made by the Company which are not specifically set forth in this
Agreement, and (iii) there are no liens or claims of lien or assignments in
law
or equity or otherwise of or against any of the claims or causes of action
released pursuant hereto.
b. Voluntary
Execution.
This
Agreement and the other Resignation Documents are executed voluntarily and
without any duress or undue influence on the part or behalf of the Parties
hereto, with the full intent of releasing all claims. The Parties acknowledge
that: (i) they have read each Resignation Document, (ii) they have been
represented in the preparation, negotiation, and execution of each Resignation
Document by legal counsel of their own choice or that they have voluntarily
declined to seek such counsel, (iii) they understand the terms and consequences
of each Resignation Document and of the releases therein contained, and (iv)
they are fully aware of the legal and binding effect of each Resignation
Document.
c. Counsel.
The
Executive acknowledges that the Company has specifically advised the Executive
to seek counsel regarding the legal, tax and other consequences of the matters
provided in this Agreement and the other Resignation Documents. In the event
that the Executive elects not to consult with an attorney or other counsel
regarding the Executive’s rights and obligations under the Resignation Documents
and the legal effect hereof, the Executive hereby waives all rights to such
consultation. Such waiver is and shall be irrevocable and unequivocal, without
any conditions or reservations of any kind.
7. Severability.
The
parties understand and agree that in the event any provision of any Resignation
Document is deemed to be invalid or unenforceable by any court or administrative
agency of competent jurisdiction, the respective Resignation Document shall
be
deemed to be restricted in scope or otherwise modified to the extent necessary
to render the same valid and enforceable or, in the event that any provision
of
any Resignation Document cannot be modified or restricted so as to be valid
and
enforceable, then the same shall be deemed excised from the respective
Resignation Document if circumstances so require, and the respective Resignation
Document shall be construed and enforced as is such provision had originally
been incorporated therein as so restricted or modified, or as if such provision
had not originally been contained therein, as the case may be.
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8. Entire
Agreement; Amendment.
This
Agreement, together with the Release (the “Resignation
Documents”)
represent the entire agreement and understanding between the Company and the
Executive concerning the Executive’s employment with the Company and the
separation of the Executive from the Company, and supersedes and replaces any
and all prior agreements and understandings concerning the Executive’s
relationship with the Company and the Executive’s compensation by the Company,
including without limitation the Employment Agreement effective as of February
2, 2006 between the Company and the Executive (other than Sections 7, 8, 9
and
10 thereof), and any prior employment agreement previously entered into by
the
Company and the Executive, excluding the Stock Option Agreements. This Agreement
may only be amended by a written instrument signed by the Executive and a duly
authorized officer of the Company.
9. Specific
Enforcement.
The
Executive acknowledges and agrees that the Company will suffer irreparable
harm
as a consequence of any breach or threatened breach by the Executive of any
of
the provisions of any Resignation Document and the Executive hereby consents
to
the Company seeking and being awarded such injunctive and other equitable relief
as a court may deem appropriate in the circumstances to prevent or restrain
any
such breach or threatened breach. In addition, the Executive breaches any term
of a Resignation Document, the Company may commence legal action and pursue
any
available legal and equitable remedies, including but not limited to suspending
and recovering any and all payments and benefits made or to be made under this
Agreement, together with reimbursement of any reasonable legal fees or expenses
incurred by them in connection therewith. If Company seeks and/or obtains relief
from an alleged breach of a Resignation Document, all of the provisions of
this
Agreement shall remain in full force and effect.
10. Governing
Law.
This
Agreement and each other Separation Document shall in all respects be
interpreted and governed by the laws of the State of Connecticut (without regard
to Connecticut’s conflicts laws) and the Parties in any action arising out of
this Agreement shall be subject to the jurisdiction and venue of the federal
and
state courts, as applicable, of the State of Connecticut, Fairfield County.
The
Executive agrees that service of process upon the Executive in any such action
or proceeding may be made by delivery thereof by first-class mail, postage
prepaid, to the Executive, at his last known address on the books and records
of
the Company.
11. Costs.
The
Parties shall each bear their own costs, expert fees, attorneys’ fees and other
fees incurred in connection with this Agreement.
12. Successors.
This
Agreement shall extend and inure to the benefit of, and shall be binding upon,
the Executive, the Company, and each of their respective successors and
assigns.
13. Further
Assurances.
At the
request of any Party, the other Party shall execute and deliver such further
documents, and take such other action, as may be necessary or appropriate to
give full effect to the transactions contemplated by this
Agreement.
14. Counterparts
This
Agreement may be executed in one or more counterparts, and each counterpart
shall have the same force and effect as an original and shall constitute an
effective, binding agreement on the part of each of the
undersigned.
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IN
WITNESS WHEREOF, the Parties have executed this Agreement on the date first
written above.
| /s/ Xxxxxxx Xxxxxxx | ||
|
XXXXXXX
XXXXXXX
|
| STATE OF | } | ||
| COUNTY OF | }ss: | ||
On
the __
day of December in the year 2006 before me, the undersigned, personally appeared
Xxxxxxx Xxxxxxx, personally known to me or proved to me on the basis of
satisfactory evidence to be the individual whose name is subscribed to the
within instrument and acknowledged to me that he executed the same, and that
by
his signature on the instrument, the individual executed the
instrument.
|
Notary Public |
| XXXXXX PRODUCTS CORP. | ||
| |
|
|
| By: | /s/ Xxxxx Xxxxx | |
|
Name: Xxxxx Xxxxx |
||
| Title: President and CEO | ||
| STATE OF | } | ||
| COUNTY OF | }ss: | ||
On
the
____ day of December in the year 2006 before me, the undersigned, personally
appeared _______________, personally known to me or proved to me on the basis
of
satisfactory evidence to be the individual whose name is subscribed to the
within instrument and acknowledged to me that he executed the same in his
capacity, and that by his signature on the instrument, the individual, or the
person upon behalf of which the individual acted, executed the
instrument.
|
Notary Public |
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EXHIBIT
A
RELEASE
AGREEMENT
THIS
RELEASE AGREEMENT (the “Release”)
is
made as of the __ day of December, 2006 by and between XXXXXXX XXXXXXX
(“Executive”)
and
XXXXXX PRODUCTS CORP. f/k/a XXXXXX CAPITAL CORP. (the “Company”).
WHEREAS,
Executive’s employment by the Company will terminate; and
WHEREAS,
in connection with that termination and pursuant to that certain Agreement
by
and between the Company and Executive dated as of the date hereof (the
“Agreement”),
the
Company has agreed to pay Executive certain amounts (including, without
limitation, the Settlement Payment (as defined therein)), subject to the
execution of this Release.
NOW
THEREFORE, in consideration of these premises and the mutual promises contained
herein, and intending to be legally bound hereby, the parties agree as
follows:
1.
Resignation.
Executive hereby resigns from Executive’s employment with the Company with the
consent of the Company as Chief Executive Officer and Executive hereby resigns
and withdraws from all other positions (as an employee, officer, director or
board committee member or otherwise) of the Company and of any subsidiary or
affiliate of the Company, effective as of the open of business on December
__,
2006 (the “Effective
Date”).
2.
Acknowledgements.
Executive acknowledges that: (i) the payments described in Section
2, 3 and 4
of the
Agreement constitute full settlement of all his rights under the Agreement,
(ii)
he has no entitlement under any other severance or similar arrangement
maintained by the Company, and (iii) except as otherwise provided specifically
in this Release, the Company does not and will not have any other liability
or
obligation to him. Executive further acknowledges that, in the absence of his
execution of this Release, he would not otherwise be entitled to the payments
described in Section
2, 3 and 4
of the
Agreement.
3.
Release
and Covenant Not to Xxx.
3.1. Release.
Executive hereby fully and forever releases and discharges the Company
(including, for purposes of this Section
3,
all
predecessors and successors, subsidiaries, affiliates, assigns, officers,
directors, trustees, employees, agents and attorneys, past and present) from
any
and all claims, demands, liens, agreements, contracts, covenants, actions,
suits, causes of action, obligations, controversies, debts, costs, expenses,
damages, judgments, orders and liabilities, of whatever kind or nature, direct
or indirect, in law, equity or otherwise, whether known or unknown, arising
through the date of this Release, out of Executive’s employment by the Company
or the termination thereof, including, but not limited to, any claims Executive
may have for wages, bonuses, commissions, penalties, deferred compensation,
vacation pay, separation benefits, defamation, libel, slander, negligence,
breach of covenant of good faith and fair dealing, personal injury, emotional
distress, breach of contract, breach of confidentiality, invasion of privacy,
negligence, improper discharge (based on contract, common law, or statute,
including any federal, state or local statute or ordinance prohibiting
discrimination or retaliation in employment), alleged violation of the United
States Constitution, the Constitution of the State of New Jersey, the Civil
Rights Act of 1964, including Title VII, the Civil Rights Act of 1991, the
Age
Discrimination in Employment Act of 1967, the Americans with Disabilities Act
of
1990, the Fair Labor Standards Act, the Employee Retirement Income Security
Act
of 1974, the Worker Adjustment and Retraining Notification Act, the Older
Workers Benefit Protection Act, the Equal Pay Act of 1963, the Family Medical
Leave Act, the Rehabilitation Act of 1973, or any other federal, state
(including, but not limited to Connecticut) or local statutes concerning
employment, labor, and/or human rights or discrimination laws, and any claim
for
discrimination or retaliation based on sex, race, color, creed, religion, age,
national origin, marital status, sexual orientation, disability, or perceived
disability, medical condition, status with regard to public assistance, sexual
harassment, or any other protected class status, but excludes claims arising
after the date hereof out of any breach of this Release.
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3.2. Covenant
Not to Xxx.
Executive expressly represents that he has not filed a lawsuit or initiated
any
other administrative proceeding against the Company and that he has not assigned
any claim against the Company to any other person or entity. The Executive
further promises not to initiate a lawsuit or to bring any other claim against
the Company arising out of or in any way related to Executive’s employment by
the Company or the termination of that employment other than with respect to
those claims expressly not released by the Executive hereunder. Nothing in
this
Release, however, shall prevent or restrict Executive from cooperating with
the
Equal Employment Opportunity Commission with respect to any investigation or
claim of age discrimination in violation of the Age Discrimination in Employment
Act; provided, however, that Executive agrees that if any action with respect
to
the claims released herein is brought in his name before any court or
administrative tribunal, he will not accept any payments in connection
therewith.
3.3. Claims
Not Released.
In
addition, the forgoing will not be deemed to release Executive from claims
solely (a) to enforce this Release, (b) to enforce the Agreement, (c) to enforce
the confidentiality, non-competition and non-solicitation restrictions contained
in the Employment Agreement by and between Executive and the Company effective
as of February 2, 2006 (the “Employment
Agreement”)
or (d)
for indemnification under the Company’s By-Laws, under applicable law, under any
indemnification agreement between the Company and Executive (including, without
limitation that certain Indemnification Agreement dated June 16, 2006) or under
any similar arrangement including, without limitation, with respect to claims
involving Provco Ventures.
4.
Non-Competition
and Confidentiality Obligations.
Executive acknowledges that Sections 7, 8, 9 and 10 of the Employment Agreement
survive the termination of his employment. Executive affirms that the
restrictions contained in the Employment Agreement are reasonable and necessary
to protect the legitimate interests of the Company, that he received adequate
consideration in exchange for agreeing to those restrictions, and that he will
abide by those restrictions.
5. Non-Disparagement.
The
Executive will not disparage Company or any of its directors, officers, agents
or employees or otherwise take any action which could reasonably be expected
to
adversely affect the personal or professional reputation of Company or any
of
its directors, officers, agents or employees.
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6.
Cooperation.
Executive further agrees that he will reasonably cooperate fully with the
Company and its counsel with respect to any matter (including litigation,
investigations, or governmental proceedings) which relates to matters with
which
Executive was involved during or which otherwise relate to his employment with
Company including, without limitation the Company’s litigation involving Xxxxx
Xxxxxxx. Executive shall render such cooperation in a timely manner on
reasonable notice from the Company.
7.
Rescission
Right.
Executive expressly acknowledges and recites that (a) he has read and
understands this Release in its entirety, (b) he has entered into this Release
knowingly and voluntarily, without any duress or coercion; (c) he has been
advised orally and is hereby advised in writing to consult with an attorney
with
respect to this Release before signing it; (d) he was provided twenty-one (21)
calendar days after receipt of the Release to consider its terms before signing
it; and (e) he is provided seven (7) calendar days from the date of signing
to
terminate and revoke this Release in which case this Release shall be
unenforceable, null and void. Executive may revoke this Release during those
seven (7) days by providing written notice of revocation to the Company. This
Release will become effective and enforceable on the day following the
expiration of the seven-day revocation period (the "8th
Day").
In
the event that Executive does revoke this Release in writing prior to the 8th
Day, this Release shall not be effective or enforceable and, in such event,
all
rights, agreements and obligations created by this Release shall be ineffective,
null, void and unenforceable, except for the termination of his employment,
which is effective as of the Effective Date even if Executive does revoke this
Release. Executive further understands that if he revokes this Release in
accordance with this Section 7, Executive will be obligated to promptly return
the Settlement Payment.
8. Release
and Covenant Not to Xxx.
8.1. Release.
The
Company hereby fully and forever releases and discharges Executive (including,
for purposes of this Section
8,
all
predecessors and successors, subsidiaries, affiliates, assigns, officers,
directors, trustees, employees, agents and attorneys, past and present) from
any
and all claims, demands, liens, agreements, contracts, covenants, actions,
suits, causes of action, obligations, controversies, debts, costs, expenses,
damages, judgments, orders and liabilities, of whatever kind or nature, direct
or indirect, in law, equity or otherwise, whether known or unknown, arising
through the date of this Release, out of Executive’s employment by the Company
or the termination thereof, including, but not limited to, any claims the
Company may have for defamation, libel, slander, negligence, breach of covenant
of good faith and fair dealing, personal injury, emotional distress, breach
of
contract, breach of confidentiality, invasion of privacy, negligence, improper
discharge (based on contract, common law, or statute, including any federal,
state or local statute or ordinance prohibiting discrimination or retaliation
in
employment), alleged violation of the United States Constitution, the
Constitution of the State of New Jersey, the Civil Rights Act of 1964, including
Title VII, the Civil Rights Act of 1991, the Age Discrimination in Employment
Act of 1967, the Americans with Disabilities Act of 1990, the Fair Labor
Standards Act, the Employee Retirement Income Security Act of 1974, the Worker
Adjustment and Retraining Notification Act, the Older Workers Benefit Protection
Act, the Equal Pay Act of 1963, the Family Medical Leave Act, the Rehabilitation
Act of 1973, or any other federal, state (including, but not limited to
Connecticut) or local statutes concerning employment, labor, and/or human rights
or discrimination laws, and any claim for discrimination or retaliation based
on
sex, race, color, creed, religion, age, national origin, marital status, sexual
orientation, disability, or perceived disability, medical condition, status
with
regard to public assistance, sexual harassment, or any other protected class
status, but excludes claims arising after the date hereof out of any breach
of
this Release.
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8.2. Covenant
Not to Xxx.
The
Company expressly represents that it has not filed a lawsuit or initiated any
other administrative proceeding against Executive and that it has not assigned
any claim against Executive to any other person or entity. The Company further
promises not to initiate a lawsuit or to bring any other claim against Executive
arising out of or in any way related to Executive’s employment by the Company or
the termination of that employment other than with respect to those claims
expressly not released by the Company hereunder.
8.3. Claims
Not Released.
In
addition, the forgoing will not be deemed to release the Company from claims
solely (a) to enforce this Release, (b) to enforce the Agreement or (c) to
enforce the confidentiality, non-competition and non-solicitation restrictions
contained in the Employment Agreement.
9.
Miscellaneous.
9.1. No
Admission of Liability.
This
Release is not to be construed as an admission of any violation of any federal,
state or local statute, ordinance or regulation or of any duty owed by the
Company to Executive. There have been no such violations, and the Company
specifically denies any such violations.
9.2. Successors
and Assigns.
This
Release will inure to the benefit of and be binding upon the Company and
Executive and their respective successors, executors, administrators, heirs
and
(in the case of the Company) permitted assigns. The Company may assign this
Release to any successor to all or substantially all of its assets and business
by means of liquidation, dissolution, merger, consolidation, transfer of assets,
or otherwise. Executive may not make any assignment of this Release or any
interest herein.
9.3. Severability.
The
provisions of this Release are severable. If any provision or the scope of
any
provision is found to be unenforceable or is modified by a court of competent
jurisdiction, the other provisions or the affected provisions as so modified
shall remain fully valid and enforceable.
9.4. Entire
Agreement; Amendments.
Except
as otherwise provided herein, this Release contains the entire agreement and
understanding of the parties hereto relating to the subject matter hereof,
and
merges and supersedes all prior and contemporaneous discussions, agreements
and
understandings of every nature relating subject matter hereof. This Release
may
not be changed or modified, except by an agreement in writing signed by each
of
the parties hereto.
9.5. Governing
Law.
This
Release shall be governed by, and enforced in accordance with, the laws of
the
State of Connecticut, without regard to the application of the principles of
conflicts of laws.
9.6. Counterparts
and Facsimiles.
This
Release may be executed, including execution by facsimile signature, in one
or
more counterparts, each of which shall be deemed an original, and all of which
together shall be deemed to be one and the same instrument.
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IN
WITNESS WHEREOF, the Company has caused this Release to be executed by its
duly
authorized officer, and Executive has executed this Release, in each case as
of
the date first above written.
| XXXXXX PRODUCTS CORP. | ||
| |
|
|
| By: | /s/ Xxxxx Xxxxx | |
|
Name: Xxxxx Xxxxx |
||
| Title: President and CEO | ||
| /s/ Xxxxxxx Xxxxxxx | ||
|
XXXXXXX XXXXXXX |
||
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