EXHIBIT 10.5
AGREEMENT OF MUTUAL RELEASE AND INDEMNIFICATION
THIS AGREEMENT OF MUTUAL RELEASE AND INDEMNIFICATION ("the Agreement") is
made and entered into as of November 10, 2005, by and among SAGAMORE HOLDINGS,
INC., a Florida corporation ("Sagamore"), NECI ACQUISITION, INC. d/b/a NEXUS
CUSTOM ELECTRONICS CORP., a Florida corporation and wholly-owned subsidiary of
Sagamore ("Nexus") and XXXXXX XXXXXXX ("Xxxxxxx"). (Sagamore and Nexus as well
as any other subsidiary corporations of either are collectively referred to
herein as the "Company").
R E CI T A L S:
WHEREAS, Xxxxxxx has served as President, Chief Executive Officer and a
member of the Board of Directors of the Company since September 2004 upon the
terms and subject to the conditions of, among other things, that certain
Employment Agreement dated September 20, 2004 between Nexus and Xxxxxxx (the
"Employment Agreement");
WHEREAS, for sound business reasons and in the best interests of Xxxxxxx
and the Company, upon the terms and subject to the conditions of this Agreement,
Xxxxxxx, among other things, shall resign from all of his officer/employee
positions at the Company and as a member of the Board of Directors of the
Company.
AGREEMENT
NOW THEREFORE, in consideration of the mutual agreements, covenants and
premises set forth herein for certain other good and valuable consideration, the
receipt and adequacy are hereby acknowledged, the parties hereto, intending to
be legally bound, hereby agree as follows:
1. Recitals. The forgoing recitals are true and correct and are
incorporated herein by this reference.
2. Resignation. Effective as of the date hereof, Xxxxxxx hereby resigns as
an officer/employee and director of the Company.
3. Representation by Xxxxxxx. Xxxxxxx hereby represents to Sagamore and
Nexus that he has fully disclosed to Sagamore any disputes and/or liabilities
with respect to Sagamore and/or Nexus that he has knowledge of, or reasonably
should have knowledge of.
4. Return of Shares of Common Stock. In consideration of the terms of the
release and indemnification provisions contained herein, Xxxxxxx hereby agrees
to return to Sagamore four million four hundred twelve thousand five hundred
(4,412,500) shares of common stock of Sagamore, par value $0.001 per share (the
"Sagamore Common Stock"). Xxxxxxx hereby represents that after the return of the
four million four hundred twelve thousand five hundred (4,412,500) shares of
Sagamore Common Stock, Xxxxxxx shall own four million four hundred twelve
thousand five hundred (4,412,500) shares of Sagamore Common Stock (the "Xxxxxxx
Shares") and shall not own, nor have any rights and/or interests in, nor have
any rights to subscribe for or to purchase, or any options for the purchase of,
or any agreements providing for the issuance (contingent or otherwise) of, or
any calls, commitments or claims of any character relating to, any securities of
Sagamore and/or Nexus, except for the Xxxxxxx Shares.
5. Restrictions on Sale of the Xxxxxxx Shares. Xxxxxxx hereby agrees that
Xxxxxxx shall not sell any of the Xxxxxxx Shares until July 1, 2006. Xxxxxxx
hereby agrees that from July 1, 2006 through December 31, 2006, Xxxxxxx shall be
prohibited from selling more than fifty thousand (50,000) of the Xxxxxxx Shares
in any calendar month. Xxxxxxx and Sagamore hereby agree that subsequent to
December 31, 2006. Subsequent to December 31, 2006, Xxxxxxx and Sagamore hereby
agree that there shall be no contractual restrictions imposed by Sagamore on the
transferability of the Xxxxxxx Shares.
6. Health Insurance Coverage. Sagamore and Xxxxxxx hereby agree that
Sagamore shall provide Xxxxxxx with health insurance through December 31, 2006,
as currently provided to Xxxxxxx by Sagamore.
7. Release of Xxxxxxx. Except for matters arising out of this Agreement,
the Company, on behalf of itself, its successors, heirs, and assigns, hereby
irrevocably covenants not to xxx and hereby irrevocably releases and discharges
Xxxxxxx from any claims, demands, actions, damages, lawsuits, obligations,
promises, administrative actions, charges and causes of action, and/or liability
whatsoever, both known and unknown, in law or in equity, involving any matter
arising out of or in any way related, directly or indirectly, to Xxxxxxx serving
as an employee, officer, director or promoter of the Company, including matters
arising out of the Employment Agreement. The Company further agrees that nothing
in this Agreement shall be deemed a waiver or release by Xxxxxxx of or otherwise
affect any right he may have to indemnification or legal representation,
including any right Xxxxxxx has to indemnification and legal representation
under this Agreement, the Company's Articles of Incorporation or Bylaws and/or
existing law.
8. Release of the Company. Except for matters arising out of this
Agreement, Xxxxxxx, on behalf of himself, his successors, heirs, and assigns,
hereby irrevocably covenants not to xxx and hereby irrevocably releases and
discharges the Company and its former and current directors, officers,
employees, and shareholders from any and all liabilities and obligations as well
as any and all claims, demands, actions, damages, lawsuits, obligations,
promises, administrative actions, charges and causes of action, and/or liability
whatsoever, both known and unknown, in law or in equity, involving any matter
arising out of or in any way related, directly or indirectly, to any and all
obligations, duties and liabilities of the Company under the Employment
Agreement. Notwithstanding anything to the contrary herein, Xxxxxxx hereby
agrees to make himself available to the Company in connection with any dispute
or proceeding related to Jaco Electronics, Inc.
9. Indemnification of Xxxxxxx.
A. Indemnification by the Company. To the fullest extent permitted
by applicable law (or any successor provision) and the Company's Articles of
Incorporation and Bylaws, the Company shall promptly indemnify Xxxxxxx for all
amounts (including, without limitation, judgments, fines, settlement payments,
losses, damages, costs and expenses (including reasonable attorneys' fees))
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incurred or paid by Xxxxxxx in connection with any action, proceeding, suit or
investigation arising out of or relating to the performance by Xxxxxxx of
services for the Company, including as an employee, officer, director or
promoter of the Company.
Promptly after receipt by Xxxxxxx of notice of the assertion of a
claim against him for actions related to such services, Xxxxxxx will give the
Company written notice of the assertion of such claim. If any claim is brought
against Xxxxxxx by means of a proceeding and Xxxxxxx gives written notice to the
Company of the commencement of such proceeding, the Company will be entitled to
participate in such proceeding and, to the extent that it wishes (unless (i) the
Company is also a party to such proceeding and Xxxxxxx determines in good faith
that joint representation would be inappropriate or (ii) the Company fails to
provide reasonable assurance to Xxxxxxx of its financial capacity to defend such
proceeding and provide indemnification with respect to such proceeding), to
assume the defense of such proceeding with counsel satisfactory to Xxxxxxx.
After written notice from the Company to Xxxxxxx of its election to assume the
defense of such proceeding, the Company will not, as long as it diligently
conducts such defense, be liable to Xxxxxxx under this indemnification for any
fees of other counsel or any other expenses with respect to the defense of such
proceeding, in each case subsequently incurred by Xxxxxxx in connection with the
defense of such proceeding, other than reasonable costs of investigation. If the
Company assumes the defense of a proceeding, (i) except for claims with respect
to willful misconduct or which indemnification would be contrary to state law,
it will be conclusively established for purposes of this indemnification that
the claims made in that proceeding are within the scope of and subject to
indemnification; and (ii) no compromise or settlement of such claims may be
effected by the Company without Xxxxxxx'x consent, which consent Xxxxxxx shall
not unreasonably withhold. If written notice is given to the Company of the
commencement of any proceeding and the Company does not, within ten business
days after Xxxxxxx'x written notice is given, give written notice to Xxxxxxx of
its election to assume the defense of such proceeding, the Company will be bound
by any determination made in such proceeding.
To the extent that there is any discrepancy between the
indemnification provided under this Agreement and the Company's current Articles
of Incorporation or Bylaws, the document providing the broadest scope of
indemnification shall apply.
B. Remedies of Xxxxxxx. In the event that payment has not been
timely made following a determination of entitlement to indemnification pursuant
to this Agreement, or Xxxxxxx otherwise seeks enforcement of this Agreement, and
subject to any applicable provision of law, Xxxxxxx shall be entitled to a final
adjudication in an appropriate court of his rights. Alternatively, and subject
to any applicable provision of law, Xxxxxxx at his option may seek an award in
arbitration to be conducted by a single arbitrator pursuant to the commercial
arbitration rules of the American Arbitration Association now in effect, whose
decision is to be made within ninety (90) days following the filing of the
demand for arbitration.
10. Non-disparagement. Xxxxxxx and the Company shall (and the Company
shall cause its affiliates to) refrain from making any written or oral statement
or taking any action, directly or indirectly, which the other reasonably knows
or reasonably should know to be a disparaging or negative comment concerning the
other and shall refrain from suggesting that any such disparaging or negative
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comment concerning the other be made except as may be compelled by a court of
competent jurisdiction. Neither the Company nor Xxxxxxx shall post, submit or
influence any information to any Internet "chat" site or Internet "posting
message board" with respect to the other.
11. Binding Nature. All of the terms and provisions of this Agreement
shall be binding upon, inure to the benefit of, and be enforceable by the
parties and their respective legal representatives, successors and permitted
assigns, whether so expressed or not.
12. Independent Representation. Each party hereto acknowledges and agrees
that it has received or has had the opportunity to receive independent legal
counsel of its own choice and that it has been sufficiently apprised of its
rights and responsibilities with regard to the substance of this Agreement.
13. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which taken
together shall constitute one and the same instrument. Confirmation of execution
by electronic transmission of a facsimile signature page shall be binding upon
any party so confirming.
14. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Florida, exclusive of conflicts or
choice of laws rules or comity and the parties hereto agree that any suit
brought hereunder shall be brought only in the Circuit Court for the Eleventh
Judicial Circuit in and for Miami-Dade County, Florida and the United States
District Court for the Southern District of Florida, Miami Division.
15. Enforceability. If any provision (or portion thereof) of this
Agreement is adjudged invalid or unenforceable by a court of competent
jurisdiction, the remaining provisions shall nevertheless continue in full force
and effect. In any such case, the provision deemed unenforceable shall be remade
or interpreted by the parties in a manner that such provision shall be
enforceable to preserve, to the maximum extent possible, the original intention
and meaning thereof and such provision, as so modified or interpreted, shall
remain in full force and effect thereafter.
16. Attorneys' Fees. In the event any suit or other legal proceeding is
brought for the enforcement of any of the provisions of this Agreement, the
parties hereto agree that the prevailing party or parties shall be entitled to
recover from the other party or parties upon final judgment on the merits
reasonable attorneys' fees (and sales taxes thereon, if any), including
attorneys' fees for any appeal, and costs incurred in bringing such suit or
proceeding.
17. Entire Agreement. This Agreement constitutes the entire agreement
between the parties hereto with respect to the subject matter hereof and
supersedes all prior negotiations, understandings, agreements, arrangements and
understandings, both oral and written, among the parties hereto with respect to
the subject matter hereof.
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IN WITNESS WHEREOF, the parties have executed this Agreement on the date
set forth above.
SAGAMORE HOLDINGS, INC.
By: /s/ Xxxxxx X. Xxxx
------------------------------------
Name: Xxxxxx X. Xxxx
Title: Chief Financial Officer
NECI ACQUISITION, INC.
By: /s/ Xxxxxx X. Xxxx
------------------------------------
Name: Xxxxxx X. Xxxx
Title: President
/s/ Xxxxxx Xxxxxxx
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XXXXXX XXXXXXX
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