AFTERSOFT GROUP, INC. Second Floor, 9 Lower Bridge Street Chester, UK CH1 1RS
AFTERSOFT
GROUP, INC.
Xxxxxx
Xxxxx, 0 Xxxxx Xxxxxx Xxxxxx
Xxxxxxx,
XX XX0 0XX
January
20, 2010
Via Electronic
Mail
Mr. Xxxxx
Xxxxxxxx
174
Xxxxxxxx Moor Xxxx
Xxxxx
Grove
Stockport,
Xxxxxxxx XXX0 0XX
Xxxxxx
Xxxxxxx
Dear Xx.
Xxxxxxxx:
This
agreement (the “Separation Agreement”) is to confirm that Aftersoft Group, Inc.
(the “Company”) has elected to terminate your employment with the Company
without cause pursuant to Section 4.3(b) of your Employment Agreement dated as
of December 1, 2008 (the “Employment Agreement”) on the following terms and
conditions. Accordingly, you and the Company agree as follows.
Capitalized terms used but not defined herein shall have the meanings ascribed
to them in the Employment Agreement.
1. Termination. The
effective date of termination of the Employment Agreement, and your effective
date of termination as Chief Operating Officer and a director of the Company is,
January 31, 2010 (the “Effective Date”). From the date of this Separation
Agreement through the Effective Date, you agree to continue to perform your
duties as set forth in the Employment Agreement in full. Effective at
the close of business on the Effective Date, you have no further authority to
bind the Company as either Chief Operating Officer or a director. You
and the Company acknowledge and agree that as of the date hereof, all provisions
of the Employment Agreement are hereby terminated in their
entirety. We have agreed that you will have the ability to resign
your positions without prejudice to any rights in your Employment
Agreement.
2. Severance
Payment.
a. Subject
to Section 2(b), commencing February 1, 2010, and in accordance with Section
4.8(a)(i) of the Employment Agreement, the Company will pay you the aggregate
sum of $225,000 in six (6) equal monthly installments of $37,500 per month
(each, an “Installment”), on the first of each of the succeeding six (6) months,
which sum is comprised of that portion of your Base Salary that was not
previously paid to you from the last payment date through the Effective Date,
and an amount equal 12-months salary at the level of your Base Salary currently
in effect, subject to normal withholdings and deductions.
b. In
accordance with Section 4.8(a)(iv) of the Employment Agreement, all performance
share units previously granted to you under the Employment Agreement that would
vest in the course of any fiscal year shall vest on a pro rata
basis.
c.
All severance payments under this Severance Agreement will be made in British
Pounds Sterling.
d. All
unused but accrued vacation will be paid with the first termination payment
pursuant to this Separation Agreement.
e. As
of the Effective Date, and except as may otherwise be agreed in writing between
you and the Company, you will no longer be eligible for any additional
compensation, including without limitation salary, bonuses, or
benefits.
3. Refinancing Fee. The
Company agrees to pay you a one-time sum of $50,000 (the “Refinancing Fee”) in
the event of a refinancing of the Company’s debt currently held by ComVest
Capital LLC; provided, however, that no such Refinancing Fee shall be due if
such refinancing of the ComVest debt is effected by a shareholder that, as of
the date of this Agreement, owns more than five percent (5%) of the Company’s
equity or an independent member of the Company’s Board of
Directors. Payment of the Refinancing Fee shall be made upon the
consummation of such refinancing transaction. In the event that a
portion of such refinancing of the ComVest debt is effected by a shareholder
that, as of the date of this Agreement, owns more than five percent (5%) of the
Company’s equity or an independent member of the Company’s Board of Directors,
you will be entitled to a portion of such Refinancing Fee. (By way of
example, if 25% of the refinancing of the ComVest debt is provided by an
insider, then you would be entitled to a Refinancing Fee of
$37,500.)
You will
be entitled to convert the Refinancing Fee earned into equity at a rate of $1.10
of equity for each $1.00 of earned Refinancing Fee. (By way of
example, in the event you were entitled to a Refinancing Fee of $37,500, you
could elect to convert such Refinancing Fee into $41,250 of
Equity.) The number of shares to be issued shall be based on the
closing price of the Company’s common stock on the date that the Company
receives notice of such conversion. Any fractional shares shall be
rounded up to the nearest whole share. A form of notice is attached
hereto as Exhibit
A. Such notice of the election to convert must be made no
later than five (5) business days after the Company has given you notice that
you are entitled to receive all or a portion of the Financing
Fee. Failure to give notice within five (5) business days will result
in your forfeiture of this option.
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4. Mutual
Release. In exchange for the benefits
contained in this Separation Agreement, you and the Company hereby release and
discharge the other, together with each and every of your and the Company’s
predecessors, successors (by merger or otherwise), parents, subsidiaries,
affiliates, divisions, directors, officers, employees and agents, as applicable,
whether present or former, from any and all claims, actions, causes of action,
rights, benefits, compensation, or damages, including costs and attorneys’ fees,
of whatever nature, whether known or unknown, suspected or unsuspected, matured
or unmatured, now existing or arising in the future from any act, omission,
event, occurrence, or non-occurrence prior to the Effective Date, arising out of
or in any way related to your employment with the Company.
5. Indemnification.
The Company agrees to indemnify you to the fullest extent permitted by the
Company’s Bylaws and that certain indemnification agreement dated as of the date
hereof, substantially in the form of Exhibit B attached
hereto, which includes independent representation where appropriate. Nothing in
this Separation Agreement shall modify, or be interpreted to modify, the
application or applicability of any law, document, or authority relating to
indemnification.
6. Non-Disparagement.
You agree that you will not make any disparaging or untruthful remarks about or
concerning the Company, its affiliates, officers, directors, employees or
agents, whether acting in their individual or representative capacity, or
otherwise take any action that could reasonably be anticipated to cause damage
to the reputation, goodwill or business of the Company, or otherwise make
remarks that may negatively reflect upon the Company. The Company agrees that it
will not make any disparaging or untruthful remarks concerning you and shall use
reasonable efforts to cause its officers, directors, employees and agents, to
not make any disparaging or untruthful remarks concerning you, or otherwise take
any action that could reasonably be anticipated to cause damage to your
reputation, goodwill or business, or otherwise make remarks that may negatively
reflect upon you. Nothing in this Paragraph shall in any way limit
your ability or the ability of the Company or its officers, directors, employees
or agents to respond to or cooperate with any government inquiry or
investigation or to give truthful testimony as required by law.
You or
your counsel will have the ability to provide reasonable comments on the draft
press release announcing your separation from the business and which is attached
as Exhibit C to
this Separation Agreement. The Company will use good faith in
determining whether or not to incorporate any such comments reasonably made by
your or your counsel. You or your counsel will also have the ability
to review the Current Report on Form 8-K to be filed by the Company; provided, however, that the
Company reserves the right whether to accept any suggestions or comments
provided to the Form 8-K that it believes are not accurate or would otherwise
result in the Company’s filing a report that contains misstatement or an
omission of material fact.
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7. Confidentially. In
accordance with Section 6.1 of the Employment Agreement, in consideration of
your former employment and your receipt of the salary and other benefits
associated with your employment, and in consideration of the payments and other
benefits received under this Separation Agreement, and in acknowledgment that
(a) the Company is engaged in the automotive software business, (b) maintains
secret and confidential information, (c) during the course of your employment by
the Company such secret or confidential information may have become known to
you, and (d) full protection of the Company’s business makes it essential that
no employee or former employee appropriate for his or her own use, or disclose
such secret or confidential information, you agree that for a period of two (2)
years following the Effective Date, you will hold in strict confidence and shall
not, directly or indirectly, disclose or reveal to any person, or use for your
own personal benefit or for the benefit of anyone else, any trade secrets,
confidential dealings, or other confidential or proprietary information of any
kind, nature, or description (whether or not acquired, learned, obtained, or
developed by you alone or in conjunction with others) belonging to or concerning
the Company or any of its subsidiaries, except (i) with the prior written
consent of the Company duly authorized by its Board, (ii) in the course of the
proper performance of your duties hereunder, (iii) for information (x) that
becomes generally available to the public other than as a result of unauthorized
disclosure by you or your affiliates or (y) that becomes available to you on a
non-confidential basis from a source other than the Company or its subsidiaries
who is not bound by a duty of confidentiality, or other contractual, legal, or
fiduciary obligation, to the Company, or (iv) as required by applicable law or
legal process.
8. Non-Competition.
In accordance with Section 6.2 of the Employment Agreement, for so long as you
receive any Severance Benefit or Severance Amount, or receive any Severance
Payment provided under this Separation Agreement, you agree that you shall not
be engaged as an officer or executive of, or in any way be associated in a
management or ownership capacity with any corporation, company, partnership or
other enterprise or venture which conducts a business which is in direct
competition with the business of the Company; provided, however, that you may
own not more than two percent (2%) of the outstanding securities, or equivalent
equity interests, of any class of any corporation, company, partnership, or
either enterprise that is in direct competition with the business of the
Company, which securities are listed on a national securities exchange or traded
in the over-the-counter market. For purposes of this Separation
Agreement, a lump sum payment equivalent made to you shall be judged in relation
to your most recent annual base salary to determine whether you are continuing
to receive a Severance Benefit or Severance Amount and shall be measured from
the date such payment is received. It is expressly agreed that the
remedy at law for breach of this covenant is inadequate and that injunctive
relief shall be available to prevent the breach thereof.
9. Non-Solicitation.
In accordance with Section 6.3 of the Employment Agreement, you agree that you
will not, directly or indirectly, within one (1) year of the Effective Date, in
any manner, encourage, persuade, or induce any other employee of the Company to
terminate his or her employment, or any person or entity engaged by the Company
to represent it to terminate that relationship without the express written
approval of the Company; provided, however, that in the event an employee with
whom you had a preexisting relationship prior to your employment with the
Company individually elects to resign as a consequence of your having left the
Company’s employ, this non-solicitation provision shall not prohibit their
subsequent association. It is expressly agreed that the remedy at law
for breach of this covenant is inadequate and that injunctive relief shall be
available to prevent the breach thereof.
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10. Confidential Nature of this
Separation Agreement. You and the Company each agree that the
consideration provided to you under this Separation Agreement is confidential
and that neither shall disclose said consideration to persons outside the
Company, except that you may show this Separation Agreement to your spouse,
attorneys and tax consultants, who agree to be bound by these provisions; provided, however, that nothing herein
shall prohibit or restrict the Company or you (or respective attorneys) from
making disclosures related to this Separation Agreement as required by law, from
responding to any inquiry, or providing testimony, about the fact or terms of
this Separation Agreement or the consideration provided to you, or the facts and
circumstances underlying this Separation Agreement, before the United States
Securities and Exchange Commission or any other federal or state regulatory or
law enforcement agency or as required by law, or prohibit or restrict the
Company or you from disclosing the terms of this Separation Agreement in any
litigation brought to enforce any obligations created by this Separation
Agreement.
11. Return of Company
Property. You agree that as of the Effective Date, you will have returned
to the Company all of the Company’s property, including all physical property
(personal digital assistants, computer disks, access cards, etc.) as well as any
and all documents, data, plans, or other information, whether on paper or in
electronic form.
12. Communications.
You agree to cooperate with the Company and its officers, directors, employees
or agents to coordinate appropriate internal and external communications
concerning your separation pursuant to this Separation Agreement, and to
designate individuals to whom any questions shall be directed. You
will have final approval on all such communications.
13. Equitable
Remedies. The provisions of this Separation Agreement, if breached,
could cause the parties to this Separation Agreement to suffer irreparable harm
for which damages would be an inadequate remedy. Therefore, upon any such breach
or threat thereof, either party to this Separation Agreement shall be entitled
to injunctions and other appropriate equitable relief in addition to whatever
remedies such party may have at law.
14. Benefit. This
Agreement shall inure to the benefit of and be binding upon each of the parties
and to those individuals and entities released herein, and their respective
successors.
15. Governing Law.
This Agreement shall be governed by, and construed in accordance with the laws
of the State of Delaware without resort to any principle of conflict of laws
that would require application of the laws of any other jurisdiction, except as
may apply to you pursuant to applicable employment or related laws of the United
Kingdom.
5
16. Severability.
If any of the provisions of this Separation Agreement is held to be invalid or
unenforceable, the remaining provisions will nevertheless continue to be valid
and enforceable to the fullest extent permitted by law.
17. Entire
Agreement. This Separation Agreement represents and contains the
entire understanding between the parties in connection with its subject matter,
and supersedes any prior written or oral agreements or understandings. No
modification or waiver of any provision of this Separation Agreement shall be
valid unless in writing and signed by you and an authorized representative of
the Company.
18. Counterparts.
This Separation Agreement may be executed in counterparts, and all parties need
not execute the same counterpart; however, no party shall be bound by this
Separation Agreement until a counterpart hereof has been executed by you and the
Company. Facsimiles or other electronic transmission (e.g., pdf) shall be effective
as originals.
[Remainder
of page intentionally left blank.]
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Please
evidence your agreement to each of the provisions of this Separation Agreement
by executing a counterpart hereof where indicated and returning to Xxxxxx X.
Xxxxxxxxx, Chairman, c/o O2Media, Inc., 0000 Xxxxxx Xxxx, Xxxxx 000,
Xxxxxxx Xxxxx, Xxxxxxx 00000.
.
Very
truly yours,
AFTERSOFT
GROUP, INC.
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By:
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Name:
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Title:
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Accepted
as of the date first above written:
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Xxxxx
Xxxxxxxx
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7
Exhibit
A
Form
of Notice of Conversion of Refinancing Fee
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[Date]
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Via Electronic Mail and
Facsimile
Chief
Financial Officer
Aftersoft
Group, Inc.
Dear Sir
or Madam:
Reference is made to Section 3 of that
certain Separation Agreement dated as of January [__], 2010 (the “Agreement”)
between Xxxxx Xxxxxxxx and Aftersoft Group Inc. (the
“Company”). Section 3 of the Agreement provides that I may elect to
convert the Financing Fee, as defined in the Agreement, to equity. On
[date],
I was provided with notice that I was entitled to a Financing Fee of $[amount]. I
hereby elect to convert such Financing Fee as provided in the
Agreement. Kindly have the certificate for such shares issued in the
name of [insert
name].
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Very
truly yours,
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Company
Acknowledgement:
On [insert
date], we received notice of your intent to convert the Financing Fee of
$[amount]
into equity at a rate of $1.10 of equity for each $1.00 of Financing
Fee. The closing price of the Company’s common stock on [insert
date] was [insert
closing price]. A certificate for [insert
number of shares] shall be issued in the name of [insert
name] per your prior instructions.
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By:
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Its:
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Chief Financial
Officer
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A-1
Exhibit
B
INDEMNITY
AGREEMENT
This
INDEMNITY AGREEMENT (the “Agreement”) is dated as of January 20, 2010, and is
made by and between Aftersoft Group, Inc., a Delaware corporation (the
“Company”), and Xxxxx Xxxxxxxx, an officer and director of the Company (the
“Indemnitee”).
RECITALS
A. WHEREAS
the Indemnitee has been employed by the Company and/or its affiliates since
[_____], 2006; and
B. WHEREAS
the Indemnitee and the Company have determined that it is in their mutual best
interests to terminate the Indemnitee’s employment effective January 31, 2010;
and
C. WHEREAS,
the Board of Directors of the Company (the “Board”) has agreed, as part of the
Indemnitee’s separation from the Company, to provide Indemnitee with
indemnification for all acts by the Indemnity to the maximum permissible
liability for Expenses, losses, liabilities and damages in connection with
claims against the Indemnitee relating to his service in such capacity as
Chairman of the Board, a director, and an officer of the Company;
and
D. WHEREAS
Section 145 of the General Corporation Law of Delaware, under which the Company
is organized (the “Law”), empowers the Company to indemnify by agreement its
officers, directors, employees and agents, and persons who serve, at the request
of the Company, as directors, officers, employees or agents of other
corporations or enterprises, and expressly provides that the indemnification
provided by the Law is not exclusive; further the provisions of the Certificate
of Incorporation of the Company, as amended (the “Certificate of Incorporation”)
specifically state that the rights to indemnification and payment of expenses
described therein are not exclusive, and thereby contemplate that contracts with
respect to indemnification and payment of Expenses by the Company and similar
obligations of the Company may be entered into by and between the Company and
persons entitled to such rights described in the Certificate of Incorporation;
and
NOW,
THEREFORE, the parties hereto, intending to be legally bound, hereby agree as
follows:
1. Definitions.
1.1. Agent. For
the purposes of this Agreement, “Agent” of the Company means any person who is
or at any time was a director or officer of the Company or a subsidiary of the
Company; or is or at any time was serving at the request of, for the convenience
of, or to represent the interest of the Company or a subsidiary of the Company
as a director or officer of another foreign or domestic corporation,
partnership, joint venture, trust or other enterprise or an affiliate of the
Company; or was a director or officer of another enterprise or affiliate of the
Company at the request of, for the convenience of, or to represent the interests
of such predecessor corporation. The term “enterprise” includes any employee
benefit plan of the Company, its subsidiaries, affiliates and predecessor
corporations.
B-1
1.2. Change
in Control. “Change in Control” means a change in control of the
Company occurring after January 31, 2010, of a nature that would be required to
be reported in response to Item 6(e) of Schedule 14A of Regulation 14A (or in
response to any similar item on any similar schedule or form) promulgated under
the Securities Exchange Act of 1934 (the “Act”), whether or not the Company is
then subject to such reporting requirement; provided, however, that,
without limitation, such a Change in Control shall be deemed to have occurred if
after January 31, 2010, (i) any “person” (as such term is used in Sections 13(d)
and 14(d) of the Act) other than a trustee or other fiduciary holding securities
under an employee benefit plan of the Company or a corporation owned directly or
indirectly by the stockholders of the Company in substantially the same
proportions as their ownership of stock of the Company is or becomes the
“beneficial owner” (as defined in Rule 13d-3 under the Act), directly or
indirectly, of securities of the Company representing 15% or more of the
combined voting power of the Company’s then outstanding securities without the
prior approval of at least two-thirds of the members of the board of directors
of the Company in office immediately prior to such person attaining such
percentage interest; (ii) there occurs a proxy contest, or the Company is a
party to a merger, consolidation, sale of assets, plan of liquidation or other
reorganization not approved by at least two-thirds of the members of the board
of directors of the Company then in office, as a consequence of which members of
the board of directors in office immediately prior to such transaction or event
constitute less than a majority of the board of directors thereafter; or (iii)
during any period of two consecutive years, other than as a result of an event
described in clause (ii) of this subsection (c), individuals who at the
beginning of such period constituted the board of directors of the Company
(including for this purpose any new director whose election or nomination for
election by the Company’s stockholders was approved by a vote of at least
two-thirds of the directors then still in office who were directors at the
beginning of such period) cease for any reason to constitute at least a majority
of the board of directors.
1.3. Company. As
used herein the term “Company” includes all successors and assigns to the
Company, including, without limitation, any corporation or other entity that is
a successor to the Company by virtue of a Change in Control.
1.4. Controlled.
“Controlled” means subject to the power to exercise a controlling influence over
the management or policies of a corporation, partnership, joint venture, trust
or other entity.
B-2
1.5. Expenses.
For purposes of this Agreement, “Expenses” includes all direct and indirect
costs of any type or nature whatsoever (including, without limitation,
attorneys’ fees and related disbursements and retainers, costs of travel, other
out-of-pocket costs such as fees and disbursements of expert witnesses, private
investigators and professional advisors, court costs, transcript costs, fees of
experts, duplicating, printing, and binding costs, telephone and fax
transmission charges, postage, delivery services, secretarial services and other
disbursements and expenses and reasonable compensation for time spent by the
Indemnitee for which he is not otherwise compensated by the Company or any third
party) actually and reasonably incurred by the Indemnitee in connection with the
investigation, defense or appeal of a proceeding or establishing or enforcing a
right to indemnification or advancement of expenses under this Agreement,
Section 145 of the Law or otherwise.
1.6. Proceeding.
For the purposes of this Agreement, a “Proceeding” means any threatened,
pending, or completed action, suit, arbitration, alternate dispute resolution
process, investigation, administrative hearing, appeal, inquiry or other
proceeding, whether civil, criminal, administrative, investigative or any other
type whatsoever, whether formal or informal, including a proceeding initiated by
Indemnitee pursuant to Section 9 of this Agreement to enforce Indemnitee’s
rights hereunder.
1.7. Subsidiary.
For purposes of this Agreement, “Subsidiary” means any corporation, partnership,
limited liability company, trust, joint venture, or other entity of which more
than fifty percent (50%) of the outstanding voting securities is owned directly
or indirectly by the Company, by the Company and one or more of its subsidiaries
or by one or more of the Company’s subsidiaries.
2. Directors’ and Officers’
Insurance. The Company shall, to the extent that the Board determines it
to be economically reasonable, maintain a policy of directors’ and officers’
liability insurance (“D&O Insurance”), on such terms and conditions as may
be approved by the Board.
3. Mandatory
Indemnification. Subject to Section 9 below, the Company shall indemnify
and hold the Indemnitee harmless to the fullest extent permitted by the Law.
Without limiting the generality of the foregoing, the Company shall indemnify
and hold harmless the Indemnitee as follows:
3.1. Third
Party Actions. If the Indemnitee is a person who was or is a party or is
threatened to be made a party to any proceeding (other than an action by or in
the right of the Company) by reason of the fact that he is or at any time was an
agent of the Company, or by reason of anything done or not done by him in any
such capacity, against any and all claims, expenses and liabilities of any type
whatsoever (including, but not limited to, attorneys’ fees, judgments, fines,
ERISA excise taxes or penalties and amounts paid in settlement) actually and
reasonably incurred by him in connection with the investigation, defense,
settlement or appeal of such proceeding if he acted in good faith and in a
manner he reasonably believed to be in, or not opposed to, the best interests of
the Company and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful; and/or
B-3
3.2. Derivative
Actions. If the Indemnitee is a person who was or is a party or is threatened to
be made a party to any proceeding by or in the right of the Company to procure a
judgment in its favor by reason of the fact that he is or at any time was an
agent of the Company, or by reason of anything done or not done by him in any
such capacity, against any and all claims, expenses and liabilities, including
without limitation attorneys’ fees, amounts paid in settlement of any such
proceeding and all expenses actually and reasonably incurred by him in
connection with the investigation, defense, settlement, or appeal of such
proceeding if he acted in good faith and in a manner he reasonably believed to
be in, or not opposed to, the best interests of the Company; except that no
indemnification under this subsection shall be made in respect of any claim,
issue or matter as to which such person shall have been finally adjudged, in a
judgment not subject to appeal, to be liable to the Company by a court of
competent jurisdiction due to willful misconduct of a culpable nature in the
performance of his duty to the Company, unless and only to the extent that the
Court of Chancery in Delaware or the court in which such proceeding was brought
shall determine upon application that, despite the adjudication of liability but
in view of all the circumstances of the case, such person is fairly and
reasonably entitled to indemnity for such amounts which the Court of Chancery or
such other court shall deem proper; and/or
3.3. Exception
for Amounts Covered by Insurance. Notwithstanding the foregoing, the Company
shall not be obligated to indemnify the Indemnitee for expenses or liabilities
of any type whatsoever (including, but not limited to, judgments, fines, ERISA
excise taxes or penalties and amounts paid in settlement) to the extent such
have been paid directly to the Indemnitee by D&O Insurance.
4. Partial Indemnification and
Contribution.
4.1. Partial
Indemnification. If the Indemnitee is entitled under any provision of this
Agreement to indemnification by the Company for some or a portion of any
expenses or liabilities of any type whatsoever (including, but not limited to,
judgments, fines, ERISA excise taxes or penalties and amounts paid in
settlement) incurred by him in the investigation, defense, settlement, or appeal
of a proceeding but is not entitled, however, to indemnification for all of the
total amount thereof, then the Company shall nevertheless indemnify the
Indemnitee for such total amount except as to the portion thereof to which the
Indemnitee is not entitled to indemnification.
4.2. Contribution.
If the Indemnitee is not entitled to the indemnification provided in Section 4
for any reason other than the statutory limitations set forth in the Law, then
in respect of any threatened, pending or completed proceeding in which the
Company is jointly liable with the Indemnitee (or would be if joined in such
proceeding), the Company shall contribute to the amount of Expenses (including
attorneys’ fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred and paid or payable by the Indemnitee in such proportion as
is appropriate to reflect (i) the relative benefits received by the Company on
the one hand and the Indemnitee on the other hand from the transaction from
which such proceeding arose and (ii) the relative fault of the Company on the
one hand and of the Indemnitee on the other hand in connection with the events
which resulted in such Expenses, judgments, fines or settlement amounts, as well
as any other relevant equitable considerations. The relative fault of the
Company on the one hand and of the Indemnitee on the other hand shall be
determined by reference to, among other things, the parties’ relative intent,
knowledge, access to information and opportunity to correct or prevent the
circumstances resulting in such Expenses, judgments, fines or settlement
amounts. The Company agrees that it would not be just and equitable if
contribution pursuant to this Section 5 were determined by pro rata allocation
or any other method of allocation, which does not take account of the foregoing
equitable considerations.
B-4
5. Mandatory Advancement of
Expenses.
5.1. Advancement.
Subject to Section 9 below, the Company shall advance all expenses incurred by
the Indemnitee in connection with the investigation, participation, defense,
settlement or appeal of any proceeding to which the Indemnitee is a party or is
threatened to be made a party by reason of the fact that the Indemnitee is or at
any time was an agent of the Company or by reason of anything done or not done
by him in any such capacity. The Indemnitee hereby undertakes promptly to repay
such amounts advanced only if, and to the extent that, it shall ultimately be
determined that the Indemnitee is not entitled to be indemnified by the Company
under the provisions of this Agreement, the Certificate of Incorporation, or
Bylaws of the Company, the Law or otherwise. The advances to be made hereunder
shall be paid by the Company to the Indemnitee within thirty (30) days following
delivery of a written request therefor by the Indemnitee to the
Company.
5.2. Exception.
Notwithstanding the foregoing provisions of this Section 6, the Company shall
not be obligated to advance any expenses to the Indemnitee arising from a
lawsuit filed directly by the Company against the Indemnitee if an absolute
majority of the members of the Board reasonably determines in good faith, within
thirty (30) days of the Indemnitee’s request to be advanced expenses, that the
facts known to them at the time such determination is made demonstrate clearly
and convincingly that the Indemnitee acted in bad faith. If such a determination
is made, the Indemnitee may have such decision reviewed by another forum, in the
manner set forth in Sections 8.3, 8.4 and 8.5 hereof, with all references
therein to “indemnification” being deemed to refer to “advancement of expenses,”
and the burden of proof shall be on the Company to demonstrate clearly and
convincingly that, based on the facts known at the time, the Indemnitee acted in
bad faith. The Company may not avail itself of this Section 6.2 as to a given
lawsuit if, at any time after the occurrence of the activities or omissions that
are the primary focus of the lawsuit, the Company has undergone a change in
control. For this purpose, a change in control shall mean a given person or
group of affiliated persons or groups increasing their beneficial ownership
interest in the Company by at least fifteen (15) percentage points without
advance Board approval.
6. Notice and Other
Indemnification Procedures.
6.1. Promptly
after receipt by the Indemnitee of notice of the commencement of or the threat
of commencement of any proceeding, the Indemnitee shall, if the Indemnitee
believes that indemnification with respect thereto may be sought from the
Company under this Agreement, notify the Company of the commencement or threat
of commencement thereof.
B-5
6.2. If,
at the time of the receipt of a notice of the commencement of a proceeding
pursuant to Section 7.1 hereof, the Company has D&O Insurance in effect, the
Company shall give prompt notice of the commencement of such proceeding to the
insurers in accordance with the procedures set forth in the respective policies.
The Company shall thereafter take all necessary or desirable action to cause
such insurers to pay, on behalf of the Indemnitee, all amounts payable as a
result of such proceeding in accordance with the terms of such D&O Insurance
policies.
6.3. In
the event the Company shall be obligated to advance the expenses for any
proceeding against the Indemnitee, the Company, if appropriate, shall be
entitled to assume the defense of such proceeding, with counsel approved by the
Indemnitee (which approval shall not be unreasonably withheld), upon the
delivery to the Indemnitee of written notice of its election to do so. After
delivery of such notice, approval of such counsel by the Indemnitee and the
retention of such counsel by the Company, the Company will not be liable to the
Indemnitee under this Agreement for any fees of counsel subsequently incurred by
the Indemnitee with respect to the same proceeding, provided that: (a) the
Indemnitee shall have the right to employ his own counsel in any such proceeding
at the Indemnitee’s expense; (b) the Indemnitee shall have the right to employ
his own counsel in connection with any such proceeding, at the expense of the
Company, if such counsel serves in a review, observer, advice, and counseling
capacity and does not otherwise materially control or participate in the defense
of such proceeding; or (c) if (i) the employment of counsel by the Indemnitee
has been previously authorized by the Company, (ii) the Indemnitee shall have
reasonably concluded that there may be a conflict of interest between the
Company and the Indemnitee in the conduct of any such defense or (iii) the
Company shall not, in fact, have employed counsel to assume the defense of such
proceeding, then the fees and expenses of the Indemnitee’s counsel shall be at
the expense of the Company.
7. Determination of Right to
Indemnification.
7.1. To
the extent the Indemnitee has been successful on the merits or otherwise in
defense of any proceeding referred to in Section 4.1 or 4.2 of this Agreement or
in the defense of any claim, issue or matter described therein, the Company
shall indemnify the Indemnitee against expenses actually and reasonably incurred
by him in connection with the investigation, defense or appeal of such
proceeding, or such claim, issue or matter, as the case may be, including
without limitation Indemnitee’s attorneys’ fees.
7.2. In
the event that Section 8.1 is inapplicable, or does not apply to the entire
proceeding, the Company shall nonetheless indemnify the Indemnitee unless the
Company shall prove by clear and convincing evidence to a forum listed in
Section 8.3 below that the Indemnitee has not met the applicable standard of
conduct required to entitle the Indemnitee to such indemnification.
7.3. The
Indemnitee shall be entitled to select the forum in which the validity of the
Company’s claim under Section 8.2 hereof that the Indemnitee is not entitled to
indemnification will be heard from among the following:
B-6
(a) a
quorum of the Board consisting of directors who are not parties to the
proceeding for which indemnification is being sought;
(b) the
stockholders of the Company, provided however that the Indemnitee can select a
forum consisting of the stockholders of the Company only with the approval of
the Company;
(c) legal
counsel mutually agreed upon by the Indemnitee and the Board, which counsel
shall make such determination in a written opinion;
(d) a
panel of three arbitrators, one of whom is selected by the Company, another of
whom is selected by the Indemnitee and the last of whom is selected
by the first two arbitrators so selected; or
(e) the
Court of Chancery of Delaware or other court having jurisdiction of subject
matter and the parties.
7.4. As
soon as practicable, and in no event later than thirty (30) days after the forum
has been selected pursuant to Section 8.3 above, the Company shall, at its own
expense, submit to the selected forum its claim that the Indemnitee is not
entitled to indemnification, and the Company shall act in the utmost good faith
to assure the Indemnitee a complete opportunity to defend against such
claim.
7.5. If
the forum selected in accordance with Section 8.3 hereof is not a court, then
after the final decision of such forum is rendered, the Company or the
Indemnitee shall have the right to apply to the Court of Chancery of Delaware,
the court in which the proceeding giving rise to the Indemnitee’s claim for
indemnification is or was pending or any other court having jurisdiction of
subject matter and the parties, for the purpose of appealing the decision of
such forum, provided that such right is executed within sixty (60) days after
the final decision of such forum is rendered. If the forum selected in
accordance with Section 8.3 hereof is a court, then the rights of the Company or
the Indemnitee to appeal any decision of such court shall be governed by the
applicable laws and rules governing appeals of the decision of such
court.
7.6. Notwithstanding
any other provision in this Agreement to the contrary, the Company shall
indemnify the Indemnitee against all Expenses incurred by the Indemnitee in
connection with any hearing or proceeding under this Section 8 involving the
Indemnitee and against all Expenses incurred by the Indemnitee in connection
with any other proceeding between the Company and the Indemnitee involving the
interpretation or enforcement of the rights of the Indemnitee under this
Agreement unless a court of competent jurisdiction finds that each of the
material claims and/or defenses of the Indemnitee in any such proceeding was
frivolous or not made in good faith.
8. Exceptions. Any other
provision herein to the contrary notwithstanding, the Company shall not be
obligated pursuant to the terms of this Agreement:
B-7
8.1. Claims
Initiated by Indemnitee. To indemnify or advance expenses to the Indemnitee with
respect to proceedings or claims initiated or brought voluntarily by the
Indemnitee and not by way of defense, except with respect to proceedings
specifically authorized by the Board or brought to establish or enforce a right
to indemnification and/or advancement of Expenses arising under this Agreement,
the charter documents of the Company or any Subsidiary or any statute or law or
otherwise, but such indemnification or advancement of Expenses may be provided
by the Company in specific cases if the Board finds it to be appropriate;
or
8.2. Unauthorized
Settlements. To indemnify the Indemnitee hereunder for any amounts paid in
settlement of a proceeding unless the Company consents in advance in writing to
such settlement, which consent shall not be unreasonably withheld;
or
8.3. Securities
Law Actions. To indemnify the Indemnitee on account of any suit in which
judgment is rendered against the Indemnitee for an accounting of profits made
from the purchase or sale by the Indemnitee of securities of the Company
pursuant to the provisions of Section l6(b) of the Securities Exchange Act of
1934 and amendments thereto or similar provisions of any federal, state or local
statutory law; or
8.4. Unlawful
Indemnification. To indemnify the Indemnitee if a final decision by a court
having jurisdiction in the matter, in a judgment not subject to appeal, shall
determine that such indemnification is not lawful. In this respect, the Company
and the Indemnitee have been advised that the Securities and Exchange Commission
takes the position that indemnification for liabilities arising under the
federal securities laws is against public policy and is, therefore,
unenforceable and that claims for indemnification should be submitted to
appropriate courts for adjudication.
9. Non-Exclusivity.
THE
PROVISIONS FOR INDEMNIFICATION AND ADVANCEMENT OF EXPENSES SET FORTH IN THIS
AGREEMENT SHALL NOT BE DEEMED EXCLUSIVE OF ANY OTHER RIGHTS WHICH THE INDEMNITEE
MAY HAVE UNDER ANY PROVISION OF LAW, THE COMPANY’S CERTIFICATE OF INCORPORATION
OR BYLAWS, THE VOTE OF THE COMPANY’S STOCKHOLDERS OR DISINTERESTED DIRECTORS,
OTHER AGREEMENTS OR OTHERWISE, BOTH AS TO ACTION IN THE INDEMNITEE’S OFFICIAL
CAPACITY AND TO ACTION IN ANOTHER CAPACITY WHILE OCCUPYING HIS POSITION AS AN
AGENT OF THE COMPANY, AND THE INDEMNITEE’S RIGHTS HEREUNDER SHALL CONTINUE AFTER
THE INDEMNITEE HAS CEASED ACTING AS AN AGENT OF THE COMPANY AND SHALL INURE TO
THE BENEFIT OF THE HEIRS, EXECUTORS AND ADMINISTRATORS OF THE
INDEMNITEE.
10. Burden of Proof. In
making a determination with respect to entitlement to indemnification hereunder,
the person or persons or entity making such determination shall presume that
Indemnitee is entitled to indemnification under this Agreement, and the Company
shall have the burden of proof to overcome that presumption in connection with
the making by any person, persons or entity of any determination contrary to
that presumption.
B-8
11. Duration of
Agreement.
This
Agreement shall continue until and terminate upon the later of: (a) 10 years
after the date that the Indemnitee shall have ceased to serve as a director
and/or officer of the Company or director, officer, employee or agent of any
other corporation, partnership, joint venture, trust, employee benefit plan or
other enterprise which the Indemnitee served at the request of the Company; or
(b) one year after the final, nonappealable termination of any Proceeding then
pending in respect of which the Indemnitee is granted rights of indemnification
or advancement of Expenses hereunder and of any proceeding commenced by the
Indemnitee pursuant to Section 10 of this Agreement relating
thereto.
12. General
Provisions.
12.1. Interpretation
of Agreement. It is understood that the parties hereto intend this Agreement to
be interpreted and enforced so as to provide indemnification and advancement of
expenses to the Indemnitee to the fullest extent now or hereafter permitted by
law, except as expressly limited herein.
12.2. Severability.
If any provision or provisions of this Agreement shall be held to be invalid,
illegal, or unenforceable for any reason whatsoever, then:
(a) the
validity, legality and enforceability of the remaining provisions of this
Agreement (including, without limitation, all portions of any paragraphs of this
Agreement containing any such provision held to be invalid, illegal, or
unenforceable that are not themselves invalid, illegal, or unenforceable) shall
not in any way be affected or impaired thereby; and
(b) to
the fullest extent possible, the provisions of this Agreement (including,
without limitation, all portions of any paragraphs of this Agreement containing
any such provision held to be invalid, illegal or unenforceable, that are not
themselves invalid, illegal or unenforceable) shall be construed so as to give
effect to the intent manifested by the provision held invalid, illegal or
unenforceable and to give effect to Section 13.1 hereof.
12.3. Modification
and Waiver. No supplement, modification or amendment of this Agreement shall be
binding unless executed in writing by both of the parties hereto. No waiver of
any of the provisions of this Agreement shall be deemed or shall constitute a
waiver of any other provision hereof (whether or not similar), nor shall such
waiver constitute a continuing waiver.
12.4. Subrogation.
In the event of full payment under this Agreement, the Company shall be
subrogated to the extent of such payment to all of the rights of recovery of the
Indemnitee, who shall execute all documents required and shall do all acts that
may be necessary or desirable to secure such rights and to enable the Company
effectively to bring suit to enforce such rights.
B-9
12.5. Counterparts.
This Agreement may be executed in one or more counterparts and via facsimile,
each of which shall constitute an original, but all of which when taken together
shall constitute a single agreement.
12.6. Successors
and Assigns. The terms of this Agreement shall bind, and shall inure to the
benefit of, the successors and assigns of the parties hereto.
12.7. Notice.
All notices, requests, demands and other communications under this Agreement
shall be in writing and shall be deemed duly given: (a) if delivered by hand and
signed for by the party addressee; or (b) if mailed by certified or registered
mail, with postage prepaid, on the third business day after the mailing date.
Addresses for notices to either party are as shown on the signature page of this
Agreement or as subsequently modified by written notice.
12.8. Gender.
The masculine, feminine or neuter pronouns used herein shall be interpreted
without regard to gender, and the use of the singular or plural shall be deemed
to include the other whenever the context so requires.
12.9. Governing
Law. This Agreement shall be governed exclusively by and construed according to
the laws of the State of Delaware, as applied to contracts between Delaware
residents entered into and to be performed entirely within
Delaware.
If the
General Corporation Law of the State of Delaware (the “Delaware Law”) or any
other applicable law is amended after the date hereof to permit the Company to
indemnify Indemnitee for Expenses or liabilities, or to indemnify Indemnitee
with respect to any action or Proceeding, not contemplated by this Agreement,
then this Agreement (without any further action be either party hereto) shall
automatically be deemed to be amended to require that the Company indemnify
Indemnitee to the fullest extent permitted by the Delaware Law.
12.10. Consent
to Jurisdiction. The Company and the Indemnitee each hereby irrevocably consent
to the jurisdiction of the courts of the State of Delaware for all purposes in
connection with any action or proceeding, which arises out of or relates to this
Agreement.
12.11. Attorneys’
Fees. In the event Indemnitee is required to bring any action to enforce rights
under this Agreement (including, without limitation, the payment or
reimbursement of expenses of any proceeding described in Section 4), the
Indemnitee shall be entitled to all reasonable fees and expenses in bringing and
pursuing such action, unless a court of competent jurisdiction finds each of the
material claims of the Indemnitee in any such action was frivolous and not made
in good faith.
[Balance
of the Page Intentionally Left Blank]
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IN
WITNESS WHEREOF, the parties hereto have entered into this Agreement effective
as of the date first written above.
|
AFTERSOFT
GROUP, INC.
|
INDEMNITEE
|
|||
|
By:
|
By:
|
|||
|
Name:
|
Name:
Xxxxx Xxxxxxxx
|
|||
|
Title:
|
Title:
Chief Operating Officer and Director
|
|||
|
Date:
January 20, 2010
|
Date:
January 20, 2010
|
|||
|
Address:
|
Address:
|
|||
B-11
Exhibit
C
Draft
Press Release
Aftersoft
Group, Inc. Business Realignment
NEW YORK—(PRNewswire)—January
XX, 2010 — Aftersoft Group, Inc. (OTCBB: ASFG), a major supplier of
Business and ERP supply chain management solutions to automotive parts and tire,
distributors, jobbers, retailers, and installers announced today that it has
completed a realignment of its business units.
The
realignment results in the company’s US division, Aftersoft Network, N.A.,
reporting into Xxxx Xxxxxxxx, General Manager of MAM, Inc. As part of
the realignment, Aftersoft announced that its CEO Xxx Xxxxxxx and COO Xxxxx
Xxxxxxxx, had resigned from the company, effective January 31,
2010.
Commented
Xxxxx Xxxxxxxxx, Chairman of the Board: “The progress made in the US over the
past several years enables us to take the action we are announcing
today. Now that the US organization is beginning to show a profit, we
are able to consolidate the operation of the US and UK businesses under a single
management team and further consolidate our activities as a means toward further
profit improvement.” Continued Xxxxxxxxx: “I thank Xxx Xxxxxxx and
Xxxxx Xxxxxxxx for their tireless efforts in getting these businesses where they
are today. Without their efforts these past several years, this might
not have become a reality.”
C-1
