Exhibit 10.84
SEVERANCE AGREEMENT
This Severance Agreement (the "Agreement") is made this 26th day of
January, 2004 and effective this 26th day of January, 2004 by and between
Invisa, Inc. a Nevada corporation (the "Company") and Xxxxxxx X. Xxxxxxx
("Xxxxxxx").
RECITALS:
WHEREAS, Xxxxxxx is the co-founder of the Company and has been employed
by the Company since February 9, 2000 and is a member of its Board of Directors;
and
WHEREAS, Xxxxxxx and the Company have determined that it is in the best
interest of Xxxxxxx and the Company that his employment with the Company be
terminated and that he continue to provide services to the Company as a member
of its Board of Directors, and as an independent consultant pursuant to a
consulting agreement to be executed by the parties; and
WHEREAS, Xxxxxxx and the Company have executed a term sheet on November
6, 2003 (the "Term Sheet") which outlines the basic terms under which Michael's
employment will be terminated and the manner in which he will continue to
provide services to the Company; and
WHEREAS, Xxxxxxx and the Company wish to formalize the Term Sheet into a
final and detailed agreement.
NOW, THEREFORE, in consideration of the mutual promises in this
Agreement, and for additional good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the parties hereto, the Company
and Xxxxxxx agree as follows:
1. TERMINATION OF EMPLOYMENT. Michael's employment with the Company
shall terminate on January 31, 2004 and he shall be paid his current salary
through said date. Commencing February 1, 2004, Xxxxxxx shall provide services
to the Company as an independent consultant pursuant to the consulting agreement
substantially in the form attached hereto (the "Consulting Agreement").
2. ACCRUED COMPENSATION. The parties acknowledge that Xxxxxxx is owed
$303,607.50 in accrued salary and bonuses ("Accrued Compensation"). The Company
shall pay Xxxxxxx the Accrued Compensation as follows:
i. $60,000.00 on or before January 27th, 2004, and $5,000.00 on
or before February 28, 2004. The notice and cure period on paragraph 6 of this
Agreement shall not apply to the $60,000.00 and $5,000.00 payments, and failure
to timely make these payments shall immediately invoke the provisions of
paragraphs 6.1, 6.2 and 6.3 of this Agreement.
ii. $56,174.33 if this Company raises $2,000,000.00 following
the date of this Agreement, in total from all sources. The $56,174.33 payment
shall be made to Xxxxxxx within thirty (30) days following the date that the
Company has raised $2,000,000.00;
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iii. $84,261.50 if the Company raises $3,000,000.00 following
the date of this Agreement, in total from all sources. The $84,261.50 payment
shall be made to Xxxxxxx within thirty (30) days following the date that the
Company has raised $3,000,000.00; and
iv. $98,171.67 if the Company raises $4,000,000.00 following
the date of this agreement, in total from all sources. the $98,171.67 payment
shall be made within thirty (30) days following the date that the Company has
raised $4,000,000.00.
[For illustration: if the Company raises $2,000,000.00 by April 1, 2004
and an additional $1,000,000.00 dollars by May 2004 and an additional
$1,000,000.00 by June 1, 2004, Xxxxxxx shall be paid $56,174.33 by May 1, 2004,
$84,261.50 by June 1, 2004 and $98,171.67 by July 1, 2004.]
The Company will provide Xxxxxxx with a quarterly capital input report
(consisting of gross dollars received, date received, accumulated total dollars)
of all capital input from any source, including but not limited to equities
purchased through private offerings, exercised options, exercised warrants, puts
or sales of equities through pre-arranged financing. This report will be faxed
and mailed to Xxxxxxx by the tenth of the following month.
3. FORGIVENESS OF NOTE BY COMPANY. The parties acknowledge that Xxxxxxx
owes the Company $74,384.00 pursuant to promissory note dated October 15, 2000
(the "$74,384.00 Note") and $375,000.00 pursuant to a note dated December 29,
1999 (the "$375,000.00 Note"). The $74,384.00 Note shall be forgiven by the
Company on February 9, 2005, which is its maturity date, and the $375,000.00
Note shall be forgiven by the Company on December 29, 2004 which is its maturity
date. The Company shall timely pay all taxes incurred by the Company and
Xxxxxxx, as a direct result of the forgiveness of the $74,384.00 Note and
$375,000.00 Note. Michael's tax obligation paid by the Company pursuant to this
Section 3 shall be calculated based upon Michael's current tax rate for the
applicable tax year.
4. SALES OF SHARES. The Company acknowledges and agrees that all shares
of the Company's stock issued to and owned by Xxxxxxx, are fully vested,
non-assessable, and subject to no defenses or claims of any nature or kind.
Xxxxxxx agrees that any sales of his shares of the Company's common stock shall
be made in accordance with Rule 144 of the Securities Act of 1933, and that any
such sales from November 6, 2003 through June 30, 2004 shall be limited to no
more than 20,000 shares per month. The Company agrees that it will furnish any
legal opinions or other documents as requested by Xxxxxxx or his broker in
connection with any such 144 sales within five business days of the Company's
receipt of said request.
All options issued to Xxxxxxx under the Company's 2002 Incentive Plan
are deemed fully vested as of November 6, 2003. Additionally, Sections 6.6, 6.7,
10.1, and 10.2 of the 2002 Incentive Plan are not applicable to Michael's 2002
Incentive Plan options. Where the provisions of this paragraph conflict with the
provisions of the 2002 Incentive Plan and Michael's 2002 Incentive Plan Option
Agreement, the provisions hereof prevail.
The Company shall, as soon as eligible, file a Registration Statement on
Form S-8 with the United States Securities and Exchange Commission to register
the shares that would be issued to Xxxxxxx upon exercise of the options granted
to him under the Company's 2000 Employee,
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Director, Consultant and Advisor Stock Compensation Plan (the "Option Shares")
or alternatively, provide for "piggyback" registration of the Option Shares in a
Registration Statement if the Company is filing such a Registration Statement
and same is filed by the Company prior to the eligibility of an S-8 filing.
The Company shall attempt to reclaim 61,670 shares of stock pledged, by
Xxxxxxx as collateral, to an entity known to both of the parties as "Barbell".
If the Company is unable to reclaim the shares by February 28, 2004, it shall
terminate its efforts to reclaim the shares and shall notify Xxxxxxx that it was
unable to reclaim said shares. Upon such notification, Xxxxxxx xxx attempt to
reclaim the pledged shares. The Company agrees to provide Xxxxxxx with all
relevant documents and records regarding the "Barbell" within five (5) days of
his request. Notwithstanding anything to the contrary contained in this
Agreement, the parties acknowledge that the Company's inability to obtain the
pledged shares shall not be deemed a breach of this Agreement.
5. FORGIVENESS OF OBLIGATIONS BY XXXXXXX. Xxxxxxx agrees to forgive
notes and interest due him as a result of the RMI transaction in the amount of
$601,208.05 (collectively the "RMI NOTE"). In addition, Xxxxxxx and the Company
acknowledge that the February 9, 2000 employment agreement, executed by the
Company and Xxxxxxx (the "Employment Agreement") shall be cancelled, void and of
no effect on the effective date of this Agreement. Accordingly, Xxxxxxx shall
not be entitled to any compensation or benefits under the Employment Agreement,
including without limitation, the five-year severance payment, car allowance and
health insurance.
6. BREACH OF AGREEMENT. In the event that the Company breaches any of
its obligations under this Agreement, and said breach is not cured within
fifteen (15) days following notice by Xxxxxxx to the Company of said breach:
i. The RMI Note shall be deemed restored and shall be
immediately due and payable to Xxxxxxx in full as if this Agreement was never
entered into by the parties;
ii. The Accrued Compensation shall become immediately due and
payable to Xxxxxxx; and
iii. Xxxxxxx shall be entitled to all legal remedies available
under this Agreement to collect any monies which he is owed pursuant to this
Section 6, including all reasonable attorney fees and costs which he incurs in
furtherance of such collection efforts.
7. NOTICES. Any notice provided for in this Agreement must be in writing
and must be either personally delivered or mailed by certified mail, return
receipt required, to the recipient at the address indicated below:
To the Company: To Xxxxxxx X. Xxxxxxx:
Xxxx X. Xxxxxx, CEO Xxxxxxx X. Xxxxxxx
Invisa, Inc. 0000 Xxxxxxxxx Xxxxx Xxxx.
0000 Xxxxxxxxxxxx Xxxxx Xxxxxxxx, Xxxxxxx 00000
Xxxxxxxx, XX 00000 Fax: (000) 000-0000
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or such other address or to the attention of such other person as the recipient
party shall have specified by prior written notice to the sending party.
8. SEVERABILITY. In the event that any provision of this Agreement shall
be held to be unreasonable, invalid, or unenforceable for any reason whatsoever,
the parties agree that: (i) such invalidity or unenforceability shall not affect
any other provision of this Agreement and the remaining covenants, restrictions,
and provisions hereof shall remain in full force and effect; and (ii) any
arbitrator or arbitration panel, as the case may be, may so modify the
objectionable provision as to make it valid, reasonable, and enforceable, and
such provision, as so modified, shall be valid and binding as though the
invalid, unreasonable, or unenforceable portion thereof had not been included
therein.
9. COMPLETE AGREEMENT. Except for the Confidentiality/Waiver of Interest
Agreement and Covenant Not to Compete executed by the parties on November 6,
2003 (collectively the "confidentiality and Non Compete Agreements"), and the
Consulting Agreement, this Agreement contains the entire agreement of the
parties and supersedes and preempts any prior understandings, agreements or
representations between Xxxxxxx and the Company, including without limitation
the Employment Agreement and the Term Sheet. The parties further acknowledge
that the Company is fully and completely honoring and satisfying all severance
obligations which it owes to Xxxxxxx by complying with the terms of this
Agreement.
10. CONFIDENTIALITY AND NON COMPETE AGREEMENTS. Notwithstanding any
other agreement executed by the parties or the termination of the Employment
Agreement, the parties acknowledge that the Confidentiality and Non Compete
Agreements shall remain in full force and effect. The parties further
acknowledge that the mediation and remedy provisions contained in paragraph 4
and 5 of the Covenant Not To Compete and paragraph 7 and 8 of the
Confidentiality/Waiver of Interest Agreement respectively, are the dispute
resolution and remedy provisions that govern the parties under the
Confidentiality and Non Compete Agreements. To this extent, Section 12 of this
Agreement shall not be applicable to the Confidentiality and Non Compete
Agreements.
11. COUNTERPARTS. This Agreement may be simultaneously executed in three
counterparts, each of which shall be an original, and all of which shall
constitute but one and the same instrument.
12. MEDIATION/ARBITRATION PROVISION. The parties shall in good faith
endeavor to resolve all claims or disputes arising from or relating to the terms
of this Agreement first by mediation through a mediator selected by the parties
and if not resolved by mediation, then the parties agree to resolve all claims
or disputes by binding arbitration in accordance with this Section. the party
seeking mediation shall submit a written notice for mediation to the other party
(the "Notice"). The parties shall agree on a mediator and mediation date within
ten business (10) days from the date of the Notice. If the parties are unable to
agree upon a mediator and mediation date within ten (10) days from the date of
the Notice, the matter shall, within twenty (20) days from the date of the
Notice, be referred to the American Arbitration Association for final and
binding arbitration. If the matter is mediated but not resolved by mediation,
the matter shall, within ten (10) days from the last mediation proceeding, be
referred to the American Arbitration Association for
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final and binding arbitration. The arbitration proceedings shall take place in
Sarasota County, Florida and shall be governed by the Florida Arbitration Code
and the rules pertaining to commercial arbitration of the American Arbitration
Association then in effect (except the provisions of this paragraph shall govern
if in conflict with such rules). There shall be one arbitrator if the amount in
controversy is less than twenty four thousand dollars ($24,000), and otherwise
there shall be three arbitrators. The arbitration award may be entered in any
court of competent jurisdiction as provided for in this Agreement for an order
of enforcement if necessary. The prevailing party in the arbitration proceeding
shall be entitled to collect from the non-prevailing party, the cost of the
arbitration and reasonable attorneys' fees incurred by the prevailing party as a
direct result of the arbitration.
13. AMENDMENTS/WAIVERS. This Agreement may only be modified, amended, or
waived by a writing duly authorized and executed by all parties.
14. DRAFTSMAN. In construing this Agreement, neither of the parties
hereto shall have any term or provision of this Agreement construed against such
party solely by reason of such party having drafted same as each provision of
this Agreement is deemed by the parties to have been jointly drafted by the
Company and Xxxxxxx.
15. SEC COMPLIANCE. Xxxxxxx acknowledges that the Company, as of the
date hereof, is a "Reporting Company" under the Securities Exchange Act of 1934
as amended (the "Act"). While the Company remains a Reporting Company, its
officers and directors, and certain shareholders are required to file periodic
reports under Section 16, as it relates to the ownership, acquisition and
disposition of their equity in the Company. Xxxxxxx agrees that he will timely
file Section 16 reports regarding his equity ownership in the Company. Xxxxxxx
further agrees that he will abide by Regulation FD and the Company's written
policies as may adopted from time to time regarding xxxxxxx xxxxxxx and
disclosure of non-public information, where with regard to xxxxxxx xxxxxxx
policies, such policies are not in conflict with selling plans previously
adopted or which may be adopted by Xxxxxxx from time to time pursuant to SEC
rule 10(b)5-1 for sales of Invisa stock, provided such plans and sales
thereunder are in compliance in all respects with the requirements of SEC rule
10(b)5-1.
16. BINDING AGREEMENT. The parties represent and warrant that each has
consulted with legal counsel of their choice in connection with the review,
approval and execution of this Agreement; that each understands this Agreement
is a legally binding contract; that each has read and understands this
Agreement; and that each intends to be bound by each provision of this
Agreement.
17. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Florida and venue for any legal action
taken pursuant to this Agreement shall be in Sarasota County, Florida.
18. MISCELLANEOUS. Captions are for convenience only. In construing this
Agreement, feminine or neuter pronouns shall be substituted for those masculine
in form or vice versa and plural terms shall be substituted for singular and
singular for plural for any place which the context so requires.
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IN WITNESS WHEREOF, the parties have executed this Agreement on the date
and year first above written:
INVISA, INC.
By: /s/ Xxxxxx Xxxxxxx /s/ Xxxxxxx X. Xxxxxxx
---------------------------- -------------------------
Xxxxxx Xxxxxxx, Director Xxxxxxx X. Xxxxxxx
By: /s/ Xxxxxx Xxxxxx
----------------------------
Xxxxxx Xxxxxx, Director
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