Exhibit 10.2
AGREEMENT, RELEASE & WAIVER
THIS AGREEMENT, RELEASE & WAIVER (the "Agreement") is made on this 7th day
of August 2004, by and between Military Resale Group, Inc., a New York
corporation (hereinafter "the Company") and Xxxxxxx X. Xxxxxxxxx (hereinafter
"Director").
1. Representations of Director.
Director hereby acknowledges that:
(a) I received a copy of this Agreement from the Company on the 7th
day of August 2004.
(b) The terms of this Agreement are a result of discussions and/or
negotiations between me and/or my attorney, and the Company and/or its attorney.
(c) The Company hereby advises me to consult legal counsel before
entering into this Agreement.
(d) I have thoroughly read and reviewed this entire Agreement, and I
fully understand its meaning and effect.
(e) I am not entitled to the Consideration for Release recited in
Paragraph 4 of this Agreement except for the fact that I have signed this
Agreement.
(f) I have executed this Agreement voluntarily and without any
threat, intimidation, coercion, force or other type of pressure by the Company
or any other person.
(g) I have not transferred or assigned any claim I may have against
the Company, as described in Paragraph 2, to any other person or entity.
2. Release and Waiver by Director
In exchange for the Consideration for Release given to Director by the
Company, Director hereby fully, unequivocally, unconditionally and forever
releases and discharges the Company from any and all claims, liabilities,
demands and causes of action of any kind, whether statutory or common law,
whether known or unknown, in contract, tort or otherwise, fixed or contingent,
in law or in equity, in any way arising out of, concerning, or related to,
directly or indirectly, Director's service as a Director of the Company and
outside counsel, including, but not limited to, Director's separation from with
the Board of Directors of the Company. Director further expressly waives any
rights, which might have accrued prior to the date hereof against the Company
pertaining to or arising from the relationship, including but not limited to his
position as Director and outside counsel.. Further, Director agrees not to seek
reemployment or reinstatement of employment in any capacity with the Company,
including as a Director on the Board of Directors. Without limiting the
generality of the foregoing, this release and waiver includes, but is not
limited to, a release and waiver of claims arising under the Title VII of the
Civil Rights Act of 1964 and all amendments thereto, the Age Discrimination in
Employment Act, and all amendments thereto, the Americans with Disabilities Act,
and all amendments thereto, the Family and Medical Leave Act, and all amendments
thereto, and the Employee Retirement Income Security Act, and all amendments
thereto, the Worker Adjustment Retraining Notification Act, and all amendments
thereto, the Fair Credit Reporting Act and all amendments thereto, and any other
constitutional, federal, state and local laws, or theories governing the
employment relationship and all claims growing out of any legal restrictions on
the rights to terminate its Directors.
3. Compensation.
Director acknowledges his voluntary resignation as both counsel to and
from its Board of Directors, effective as of August 7, 2004.
4. Consideration for Release.
In consideration of the release and waiver set forth in Paragraph 2 of
this Agreement, and in reliance on the Representation and Warranties set forth
in Paragraph 8 below, the Company agrees that it shall pay Director for past
services rendered in the amount of $111,953.84 as fees. Such payment for past
services now due and payable shall be payable by the Company to Director in
equal installments over the twenty-four (24) month period beginning on September
30, 2004 and shall be evidenced by a promissory note in substantially the form
attached hereto as Exhibit D, (the "Note") with the provisions in the Note
incorporated by reference herein.
In further consideration of the release and waiver set forth in Paragraph
2 of this Agreement, and in reliance on the Representation and Warranties set
forth in Paragraph 8 below, the Company further agrees to issues, within 45 days
following the execution of this Agreement, Four Hundred Thousand (400,000)
two-year warrants at a $0.25 strike price, including provisions for the cashless
exercise of such warrants, but subject to the reasonable usual and customary
terms of any such plan or agreement pursuant to which such warrants have been
authorized or issued in the past by the Company to others.
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In further consideration of the release and waiver set forth in Paragraph
2 of this Agreement, and in reliance on the Representation and Warranties set
forth in Paragraph 8 below, the Company further agrees to issue, within 45 days
following the execution of this Agreement, One-Million (1,000,000) two-year
warrants at a $5.00 strike price, including provisions for the cashless exercise
of such warrants, but subject to the reasonable usual and customary terms of any
such plan or agreement pursuant to which such warrants have been authorized or
issued in the past by the Company to others.
It is specifically understood that the payment of the consideration under
this section does not constitute an admission of any wrongdoing on the Company's
part and is in addition to the compensation to which Director was entitled and
for which he has been paid, as reflected in Paragraph 3.
5. Mutual Confidentiality.
Director and the Company hereby agree to keep the existence and terms of
this Agreement confidential and to refrain from revealing any of its terms and
conditions to anyone other than Director's spouse, or Director's or the
Company's legal counsel, accountant, tax advisor, or as required by law, or as
agreed in writing by the Company or the Director in connection with a legal
process. Further, Director hereby agrees not to disclose Confidential or
Proprietary Information of the Company and to refrain from disclosing to or
sharing such information with others who might gain from such knowledge. For the
purpose of this Agreement, Confidential and Proprietary Information shall mean
any confidential, financial, marketing, business, technical, or other
information, including specifically but not exclusively, information which
Director prepared, caused to be prepared, or received in connection with his
employment with the Company, such as merger or acquisition opportunities or
prospects, trade, technical or technological secrets, customer or vendor lists,
price lists, details of organization or business affairs; computer hardware
configurations and software designs and programs, business plans, business
strategies, software, software evaluations, trade secrets, personnel
information, marketing methods and techniques, and any of the above-recited
information as it relates to the Company, any subsidiaries, predecessors,
successors or assigns. For purposes of this Agreement, "Confidential and
Proprietary Information" specifically excludes information, which is generally
known or becomes known in the industry (except when known based upon Director's
breach of this Agreement). As Director and the Company agree and mutually
acknowledge that any breach of this section would result in damage to the
Company, and such damage would necessarily be of a type which is difficult to
measure or quantify, Director and the Company hereby agree that for each event
of a violation of this section of the Agreement the Company shall be entitled to
recover liquidated damages in the amount of $12,500, including attorney's fees
and costs, from Director.
6. Non-Competition.
(a) Director acknowledges that during his relationship with the
Company he has enjoyed a position of trust and confidence that gave him complete
access to Confidential and Proprietary Information, which has value to the
Company.
(b) Director acknowledges that his service as a Director of the
Company means that he comes within the statutory exception contained in
subsection 2(d) of C.R.S. ss.8-2-113, which allows for non-competition
agreements between employers and Directors, managers, officers and professional
staff. Being cognizant of his virtually unlimited access to Confidential and
Proprietary Information, which is of value to the Company, Director also
acknowledges that his subsequent employment by a competitor would be more likely
than not to result in the inevitable disclosure of the trade secrets of the
Company.
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(c) Director accordingly agrees that for a period of thirty-six (36)
months beginning on August 7, 2004 Director shall not directly or indirectly
engage in competition with the Company by taking any of the following actions:
(i) Owning, managing, operating, joining, controlling or
providing services to (or participating in the ownership, management, operation
or control of, other than as a holder of less than 5% of the shares of a public
company), aiding or assisting any corporation, association, partnership, limited
liability company, proprietorship or other business entity, regardless of form,
that at any location in the United States engages in the business in which the
Company is now engaged; or,
(ii) Serving as an employee, agent, consultant, officer,
director, advisor, or creditor of any such business entity or enterprise
described in (i) above.
(d) Director accordingly agrees that for the term of this Agreement
and for a period of thirty-six (36) months beginning on August 7, 2004 that
Director shall not directly or indirectly engage in competition with the Company
by taking any of the following actions:
Inducing or attempting to induce any customer, supplier or business
relation of the Company to cease doing business with the Company or in any other
way interfering with the relationship between any customer, supplier or business
relation and the Company.
(e) Director acknowledges that the restrictions set forth above are
reasonable and appropriate to protect the Confidential and Proprietary
Information of value to the Company, which would be inevitably disclosed if he
competed, directly or indirectly, as set forth above. If however, a court
determines that any of the foregoing restrictions are unreasonable in duration,
scope or area of restriction, then Director and the Company agree that the
restrictions shall be applied only to the activities and territory, and only for
the period of time, that the court determines reasonable in light of all
then-existing circumstances.
7. Non-Solicitation of Employees.
The Director agrees that for the period of thirty-six (36) months
following his separation from employment for any reason he shall not directly or
indirectly solicit or recruit, or attempt to solicit or recruit, or hire, any
employee of the Company who is employed by the Company or was employed by the
Company at any time during the last year of the Director's employment with the
Company.
8. Representations and Warranties of Director
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The Company's SB-2 filed with the SEC within the past 60 days is to the
best of Director's information, belief and knowledge, without independent
verification or investigation, true and accurate and does not fail to include
any material matter relevant thereto.
9. Mutual Non-Disparagement
The parties agree that neither shall make any disclosure, issue any public
statements or otherwise cause to be disclosed any information which is designed,
intended or might reasonably be anticipated to have a negative effect on the
other party, or in the case of Employer, including but not limited to any of its
respective directors, officers or employees. Except in such disclosures as may
be required by law, neither the Company nor Director shall issue any printed
announcement or press release concerning Director's departure without the other
party's prior consent, which consent shall not be unreasonably withheld.
10. Release and Waiver by the Company
Except for acts or omissions by Director which constitute gross
negligence, reckless and/or unlawful or illegal activity, the Company does
hereby remise, release and forever discharge, and by these presents does for
itself, and its successors, assigns, heirs, executors and administrators,
remise, release and forever discharge Director of and from all manner of
actions, causes of actions, suits, debts, dues, sums of money, accounts,
reckonings, bonds, bills, specialties, covenants, contracts, controversies,
agreements, promises, variances, trespasses, damages, judgments, executions,
guaranties, claims and demands whatsoever, in law, in admiralty, in equity,
existing or otherwise arising or threatened hereafter with regard to the
Director's having served as an officer, director, employee or otherwise with the
Company, and does hereby further agree to indemnify Director against any loss,
liability, cost, expense (including reasonable attorneys fees) which Director
may incur for any reason hereafter relating to or arising out of the foregoing.
Notwithstanding anything herein to the contrary the foregoing shall not apply to
any breach by Director of this Agreement or as to any misrepresentation by
Director herein. The Company acknowledges that Director has disclosed the facts
and circumstances concerning certain IRS claims against it and does hereby
release Director accordingly.
11. Severability
If any provision of this Agreement is declared by any court of competent
jurisdiction to be invalid for any reason, such invalidity shall not affect the
remaining provisions of this Agreement, which shall be fully severable and given
full force and effect.
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13. Parties
The parties agree that any reference to "Military Resale Group, Inc." or
"the Company" in this Agreement shall also be a reference to Military Resale
Group, Inc. including its officers, directors, shareholders, employees, agents,
subsidiaries, affiliates, predecessors, successors and assigns, and that every
reference to "Director" shall also be a reference to his heirs, personal or
legal representatives, executors, successors and assigns.
14. Mutual Covenant Not to Xxx
Director promises and covenant that he will not file any lawsuit against
the Company based upon any claim covered under the foregoing release.Except for
acts or omissions by Director which constitute gross negligence, reckless and/or
unlawful or illegal activity, or breach of this Agreement, the Company promises
and covenants that it will not file any lawsuit against the Director based upon
any claim covered under the foregoing release
15. Mutual Continued Cooperation
Director agrees to make himself reasonably available to the Company and
the Company agrees to make itself reasonably available to the Director to
furnish full and truthful information concerning any events that took place
during his employment, and to furnish full and truthful consultation concerning
any potential or actual litigation relating to the Company or the Director.
Should Director be contacted by any person concerning any pending or potential
litigation relating to the Company, Director shall immediately notify the
Company's Chief Director Officer in writing. Should Company be contacted by any
person concerning any pending or potential litigation relating to Director,
Company shall immediately notify the Director in writing. If Director's services
are required in excess of 10 hours, then Director shall be paid by the Company
at his normal and customary hourly rate for Director's continued service to the
Company as requested by the Company. . 16. Choice of Law/Venue
The parties agree that the laws of the state of Colorado shall govern this
Agreement and any action to enforce this Agreement or the Note, subject when
appropriate to the provisions of Paragraph 18 (Dispute Resolution Procedures),
shall be brought in a court of competent jurisdiction in Colorado.
17. Full Agreement
The parties agree that this is the entire Agreement between Director and
the Company and that neither party has relied on any representation or
statement, written or oral, which is not set forth in this document. This
Agreement supercedes all previous agreements entered into by and between the
Company and Director, and any pre-existing or other agreements, if any, shall be
terminated, deemed null and void.
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18. Dispute Resolution Procedures
In the event that the parties have any disputes related to this Agreement
or the Note and are unable to agree, then either party may refer the dispute to
binding arbitration, to be held in Colorado Springs, Colorado, pursuant to the
rules of the American Arbitration Association.
Military Resale Group, Inc.
By: /s/Xxxxx Xxxxx
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Xxxxx Xxxxx
President
Director:
/s/ Xxxxxxx X. Xxxxxxxxx
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Xxxxxxx X. Xxxxxxxxx
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