SEPARATION AGREEMENT AND RELEASE OF ALL CLAIMS
SEPARATION
AGREEMENT AND RELEASE OF ALL CLAIMS
This
Separation Agreement and Release of All Claims (this “Agreement”)
is
made and entered into by and between Xxxxx Xxxxxx (hereinafter sometimes
referred to as “Executive”),
and
DigitalFX International, Inc., a Florida corporation, and all its subsidiary
and
affiliated corporations (hereinaf-ter collectively sometimes referred to as
the
“Company”).
Executive and the Company shall be collectively referred to as the “Parties.”
WITNESSETH:
WHEREAS,
Executive
has served as Chief Financial Officer of the Company;
WHEREAS,
Executive
desires to confirm her resignation from all executive and employment positions
at the Company, including, without limitation, her position as Chief Financial
Officer, effective as of February 1, 2008;
WHEREAS,
during
the Consulting Term (as defined below), Executive will serve as a consultant
to
the Company, as set forth herein; and
WHEREAS,
Executive
and the Company desire to settle fully and finally all separation arrangements
between them.
NOW,
THEREFORE,
in
consideration of the mutual covenants and promises herein contained and other
good and valuable consideration, receipt of which is hereby acknowledged, and
to
avoid unnecessary litigation, it is hereby agreed by and between the Parties
as
follows:
FIRST:
This
Agreement and compliance with this Agreement shall not be construed as an
admission by either party to the Agreement of any liability whatsoever, or
as an
admission by either party of any violation of the rights of either party or
any
person, violation of any order, law, statute, duty, or contract whatsoever
against either party or any person. Both Parties specifically disclaim any
liability to the other party or to any other person for any alleged violation
of
the rights of either party or any person, or for any alleged violation of any
order, law, statute, duty, or contract on the part of the Company, its employees
or agents or related companies or their employees or agents.
SECOND: (a) Executive
understands and agrees that she has had the opportunity to consider this
Agreement for a full twenty-one (21) days from its receipt (Executive can
voluntarily sign earlier) and that she did not execute this Agreement without
first being advised in writing to consult with an attorney. On the Effective
Date as defined in paragraph SEVENTH (g) below, so long as Exectuive has not
exercised her right of revocation, the Parties agree that:
(1)
Executive shall have resigned from all executive and employment positions with
the Company, and shall no longer be an active employee of the Company, as of
February 1, 2008.
(2)
Within three (3) business days of the Effective Date as defined in paragraph
SEVENTH (g) below,
Executive shall be paid all amounts properly due and owing to Executive as
a
result of her employment with Company, and her resignation therefrom, through
such Effective Date, less required withholdings. Payment shall be by written
check delivered to Executive’s home address on record with the Company or by
direct deposit into an account designated by Executive.
(3)
Executive’s eligibility to participate in all of the Company’s employee benefit
plans or programs shall cease on February 1, 2008, in accordance with the terms
of such plans. Thereafter, Executive shall be entitled, to the extent she is
eligible, to continue such benefit coverage under COBRA. The Company hereby
agrees to pay its portion of the COBRA premium charged to Executive, consistent
with the Company’s past practices with respect to benefits payments made for and
on behalf of Executive, for continuation of benefits under the Company group
health insurance and other benefit plans until the expiration of the Consulting
Term, after which time Executive shall be responsible for paying any and all
premiums for continuation of such benefits.
(4)
Executive shall have all rights, if any, to exercise any and all existing stock
options held by Executive, as vested through February 1, 2008, pursuant to
(i)
that certain Stock Option Agreement dated December 31, 2005 (the “2005
Stock Option Agreement”),
originally issued by VM Direct L.L.C., a Nevada limited liability company and
wholly owned subsidiary of the Company, and subsequently assigned and assumed
by
the Company, and (ii) that certain Stock Option Agreement dated June 29, 2007,
issued under the DigitalFX International, Inc. 2007 Stock Incentive Plan (the
“2007
Stock Option Agreement,”
and
together with the 2005 Stock Option Agreement, the “Stock
Option Agreements”).
In
consideration of the above, Executive hereby releases all existing claims
against Company, as specified in Paragraph FIFTH.
(b) The
above
stated consideration shall be paid to Executive as severance and will also
serve
to constitute full and complete settlement of all claims and potential claims
against the Company.
(c) Executive
agrees that the foregoing payments shall constitute the entire amount of
consideration (monetary or otherwise) provided to her under this Agreement
(except as described in Paragraph SECOND (d) below) and that she will not seek
any further compensation for any other claimed damage, costs, or attorneys'
fees
in connection with the matters encompassed in this Agreement.
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(d) Executive
agrees that from February 1, 2008 until May 31, 2008, she will make herself
available to respond to and assist with all reasonable Company requests for
information and consultation to the Company relating to all projects with which
she is familiar and for which she had duties and or responsibilities as of
the
date of resignation. In the event Executive is unavailable, the Company and
Executive will agree upon a mutually convenient time. The Company shall
reimburse Executive for all Company prior-approved, out of pocket expenses
incurred while providing such services. Without limiting, and notwithstanding,
the generality of the foregoing, during
the
period commencing on February 1, 2008 and ending on May 31, 2008 (or such later
date as the parties may mutually agree) (the “Consulting
Term”),
Executive shall make herself available from time to time to consult with the
Company under the direction of the Company’s Chief Executive Officer, Chief
Operating Officer, and/or other personnel of the Company identified by the
Company’s Chief Executive Officer from time to time, for the purpose of
assisting the Company with the preparation and reporting of the Company’s
quarter and year-ended December 31, 2007 financial statements and year-end
report(s), assisting with the preparation and filing of any amendments to the
Company’s existing Registration Statement on Form S-3, as amended (File No.
333-148033) (or any subsequently filed registration statements relating to
the
securities registered for resale thereunder)(collectively, the “Registration
Statements”),
assisting with the preparation and filing of any responses to comments or
inquiries of the Securities and Exchange Commission (or its staff) relating
to
or arising from the Registration Statements, and assisting with the preparation
and filing of any other applicable filings with the Securities and Exchange
Commission. Executive’s consulting duties shall include, but not be limited to,
assisting the Company with the following activities: (i) the preparation of
the
Company’s quarter and fiscal year ended December 31, 2007 financial statements;
(ii) the Company’s quarter and fiscal year ended December 31, 2007 independent
audit process; (iii) the preparation and filing with the Securities and Exchange
Commission of the Company’s Annual Report on Form 10-KSB for the quarter and
fiscal year ended December 31, 2007; (iv) the preparation and release of the
Company’s quarter and fiscal year ended December 31, 2007 financial results; (v)
the preparation and filing of the Registrations Statements or any amendments
thereto; (vi) the preparation of responses to comments or inquiries of the
Securities and Exchange Commission (or its staff) relating to or arising from
the Registration Statements; and (vii) the preparation and filing of any other
applicable filings with the Securities and Exchange Commission. As consideration
for the consulting services to be provided by Executive hereunder, the Company
will pay Executive a consulting fee of $10,416.67 per month (the “Monthly
Consulting Fee”).
Executive shall deliver an invoice to the Company, with respect to the Monthly
Consulting Fee then due and owing, on the last day of each calendar month during
the Consulting Term (and such invoice shall apply to services provided during
that calendar month). The Monthly Consulting Fee shall be paid on or before
the
15th
calendar
day (or the immediately following business day) of the month immediately
following the calendar month for which the relevant invoice is provided by
Executive.
3
(e) Executive
agrees that from February 1, 2008 until February 1, 2009, she shall not, except
with the written consent of the Company, solicit or attempt to solicit any
employee or prospective employees of the Company to terminate and/or leave
the
employment of the Company for Executive’s own behalf or on behalf of any person,
firm, partnership, association, corporation, business organization, entity,
or
enterprise.
(f) Executive
agrees to deliver, to be effective on and as of the date hereof, the letter
agreement attached hereto as Exhibit
A,
which
Executive acknowledges and agrees will continue in full force and effect
hereafter in accordance with its terms.
(g) Executive
understands, acknowledges and agrees that in the course of employment with
the
Company, she has acquired confidential information and trade secrets concerning
the Company’s past, present or future clients, operations, plans, methods of
doing business (including, without limitation, customer lists), projected and
historical revenues, sales, marketing, costs, production, growth and
distribution, and confidential business strategies (“Confidential
Information”).
Executive understands, acknowledges and agrees that it would be extremely
damaging to the Company if such information were disclosed to a competitor
or
made available to any other person or entity. Executive understands and agrees
that such Confidential Information has been disclosed to Executive in
confidence, that she will keep such information secret and confidential and
that
she will not in any way use, distribute or disclose such information.
In
view
of the nature of Executive’s employment and the Confidential Information and
trade secrets that Executive has received during the course of her employment,
and without limiting the generality of any other provision of this Agreement,
Executive also agrees that the Company would be irreparably harmed by any
violation or threatened violation of this Agreement and that, therefore, Company
shall be entitled to an injunction prohibiting the Executive from any violation
or threatened violation of this Agreement, in addition to any other relief,
including monetary damages, to which the Company may be entitled.
(h) The
Parties agree that Executive’s future employment shall not affect Executive’s
ability to receive payments under this Agreement.
THIRD: Executive
represents that she has not filed any complaints, claims, or actions against
the
Company, its officers, agents, directors, supervisors, employees, or
representatives with any state, federal, or local agency or court and that
she
will not do so at any time hereafter. PROVIDED, however, that Executive is
not
prohibited from challenging the validity of this Agreement with the EEOC, and/or
cooperating with the EEOC regarding claims of harassment, retaliation or
discrimination. Nonetheless, Executive is hereby waiving any private cause
of
action of claim that might be covered in any right to xxx letter issued by
the
EEOC.
FOURTH: (a)
The
Parties agree to refrain from any publication, oral or written, of any
defamatory, disparaging or otherwise derogatory information pertaining to each
other or their prior employment relationship.
4
(b)
The
Parties agree to keep the fact, terms, and amount of this Agreement completely
confidential and not hereafter disclose any information concerning this
Agreement to anyone, provided that the Parties may make such disclosures as
are
required by law, rule or regulation (including, without limitation, applicable
securities laws and the rules and regulations promulgated thereunder) and as
are
necessary for legitimate law enforcement or compliance purposes. The Parties
may
also disclose this Agreement to its attorneys and accountants who have a need
to
know the contents of this Agreement.
FIFTH: (a) Executive
hereby irrevocably and unconditionally releases and forever discharges the
Company and each and all of its officers, agents, directors, supervisors,
employees, representatives, and their successors and assigns and all persons
acting by, through, under, or in concert with any of them from any and all
charges, com-plaints, claims, and liabilities of any kind or nature whatso-ever,
known or unknown, suspected or unsuspected (hereinafter referred to as “claim”
or “claims”) which Executive at any time heretofore had or claimed to have or
which Executive may have or claim to have regarding events that have occurred
as
of the date of this Agreement, including, without limita-tion, any and all
claims related or in any manner incidental to Executive’s employment with the
Company, termination of or resignation from the employment relationship, or
the
Stock Option Agreements. It is expressly understood by Executive that among
the
various rights and claims being waived in this release are those arising under
the Age Discrimination in Employment Act of 1967 (29 U.S.C. § 621,
et
seq.).
(b) The
Parties understand the word “claims” to include all actions, claims, and
grievances, whether actual or potential, known or unknown, and specifically
but
not exclusively all claims arising out of Executive’s employment with the
Company and the termination or resignation thereof. All such claims (including
related attorneys' fees and costs) are forever barred by this Agreement, without
regard to whether those claims are based on any alleged breach of a duty arising
in a statute, contract, or tort; any alleged unlawful act, including, without
limitation, the
Age
Discrimination in Employment Act of 1967; the Older Workers Benefit Protection
Act; Title
VII
of the Civil Rights Act of 1964; the Family Medical Leave Act; or the Americans
With Disabilities Act. Executive, with full understanding of the rights afforded
to Executive under each of these Acts, statutes and claims for relief, hereby
waives any right to assert a claim for any relief available under these Acts,
statutes or claims (including but not limited to back pay, severance, attorneys'
fees, damages, reinstatement and/or other injunctive relief) that Executive
may
otherwise recover based upon any alleged violation(s) of these Acts, or any
other claim or cause of action regardless of the forum in which it might be
brought.
(c) Executive
expressly
waives all rights under Section 17.245 of the Nevada Revised Statutes
(hereinafter referred to as “Section 17.245”), understanding and acknowledging
the significance of such specific waiver of Section 17.245, which reads as
follows:
When
a
release or a covenant not to xxx or not to enforce judgment is given in good
faith to one of two or more persons liable in tort for the same injury (a)
It
does not discharge any of the other tortfeasors from liability for the
injury…unless its terms so provide, but it reduces the claim against the others
to the extent of any amount stipulated by the release or the covenant, or in
the
amount of the consideration paid for it, whichever is the greater . .
.
5
Notwithstanding
the provisions of Section 17.245, for the purpose of implementing a full and
complete release and discharge of each and all of the releasees and alleged
tortfeasors, Executive expressly acknowledges that this Agreement is intended
to
include and does include in its effect, without limitation, all claims which
Executive does not know or suspect to exist in her favor at the time she signs
this Agreement and that this Agreement expressly contemplates the extinguishment
of all such known or unknown claims against all known and unknown tortfeasors
associated with Executive’s employment with and separation from the Company.
This Paragraph FIFTH (c) applies only to the Company, its officers,
agents, directors, supervisors, employees, representatives, and their successors
and assigns and all persons acting by, through, under, or in concert with the
same and is not intended to benefit any unrelated third party.
SIXTH:
Company
hereby irrevocably and unconditionally releases and forever discharges Executive
and her successors and assigns, from any and all charges, complaints, claims
and
liabilities of any kind or nature (excluding criminal and regulatory charges
or
liabilities), known or unknown, suspected or unsuspected which Company at any
time heretofore had or claimed to have related or in any manner incidental
to
Executive’s employment with the Company, termination of or resignation from the
employment relationship, or the Stock Option Agreements.
SEVENTH: Executive
understands and agrees that she:
(a) Has
had a
full twenty-one (21) days within
which to consider this Agreement before executing it.
(b) Has
carefully read and fully understands all of the provisions of this
Agreement.
(c) Is,
through this Agreement, releasing the Company from any and all claims she may
have against the Company. The term “claim” is specifically defined in Paragraph
FIFTH (a) and (b) above.
(d) Knowingly
and voluntarily agrees to all of the terms set forth in this
Agreement.
(e) Knowingly
and voluntarily intends to be legally bound by the same.
(f) Was
advised and hereby is advised in writing to consider the terms of this Agreement
and consult with an attorney of her choice prior to executing this
Agreement.
(g) Has
a
full seven (7) days following the execution of this Agreement to revoke this
Agreement and has been and hereby is advised in writing that this Agreement
shall not become effective or enforceable until the revocation period has
expired (the
“Effective
Date”).
Executive acknowledges
and agrees that such revocation must be received via hand delivery, facsimile,
or overnight express delivery to Xxxxxx Xxxxxxxxx, Chief Operating Officer
of
the Company.
(h) Understands
that rights or claims under the Age Discrimination in Employment Act of 1967
(29
U.S.C. § 621, et
seq.)
that
may arise after the date this Agreement is executed are not waived.
6
EIGHTH:
The
Parties hereto represent and acknowl-edge that in executing this Agreement
they
do not rely and have not relied upon any representation or statement made by
any
of the Parties or by any of the Parties' agents, attorneys, or repre-sentatives
with regard to the subject matter, basis, or effect of this Agreement or
otherwise, other than those specifi-cally stated in this written
Agreement.
NINTH:
This
Agreement shall be binding upon the Parties hereto and upon their heirs,
administrators, representatives, executors, successors, and assigns, and shall
inure to the benefit of said Parties and each of them and to their heirs,
administrators, representatives, executors, successors, and assigns. Executive
expressly warrants that she has not transferred to any person or entity any
rights, causes of action, or claims released in this Agreement.
TENTH: Should
any provision of this Agreement be declared or be determined by any court of
competent jurisdic-tion to be wholly or partially illegal, invalid, or
unenforceable, the legality, validity, and enforceability of the remaining
parts, terms, or provisions shall not be affected thereby, and said illegal,
unenforceable, or invalid part, term, or provision shall be deemed not to be
a
part of this Agreement.
ELEVENTH: This
Agreement sets forth the entire agreement between the Parties hereto and with
the exception of the Stock Option Agreements and the letter agreement attached
hereto as Exhibit A, this Agreement fully supersedes any and all prior
agreements, discussions, notices, electronic mail or other communications or
understandings, written or oral, between the Parties hereto pertaining to the
subject matter hereof. The
Stock
Option Agreements
shall
remain in full force and effect
in
accordance with their terms except
to
the extent that they conflicts with this Agreement, in which case this Agreement
will govern
TWELFTH:
This
Agreement shall be interpreted in accordance with the plain meaning of its
terms
and not strictly for or against any of the Parties hereto.
THIRTEENTH:
Without
limiting the provisions of Paragraph SECOND (g), it
is
further understood and agreed that if, at any time, a violation of any term
of
this Agreement is asserted by any party hereto, that party shall have the right
to seek specific performance of that term and/or any other necessary and proper
relief, including but not limited to damages, from any court of competent
jurisdiction, and the prevailing party shall be entitled to recover its
reasonable costs and attorneys' fees.
7
FOURTEENTH:
The
Parties agree to indemnify, defend and hold the other harmless from and against
any and all loss, cost, damage, liability, or expense, as a result of any breach
of this Agreement.
FIFTEENTH:
This
Agreement shall be interpreted in accordance with the plain meaning of its
terms
and not strictly for or against any of the Parties hereto. This Agreement shall
be governed by, and construed and enforced in accordance with the laws of the
State of Nevada applicable to contracts made and to be performed
therein.
SIXTEENTH:
This
Agreement may be executed in counterparts with the same force and effect as
if
all signatures were set forth in a single instrument. This Agreement may be
executed on facsimile copies with the same force and effect as an executed
original of the same.
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EXECUTIVE:
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|||||||
|
Dated:
|
February
|
4
|
, 2008 | /s/ Xxxxx Xxxxxx | |||
|
COMPANY:
|
|||||||
|
DIGITALFX
INTERNATIONAL, INC.
|
|||||||
|
Dated:
|
February
|
4
|
,
2008
|
By:
|
/s/ Xxxxxx
Xxxxxxxxx
|
||
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EXHIBIT
A
LOCK-UP
LETTER
9
