Exhibit 10.1
CONFIDENTIAL SETTLEMENT AGREEMENT
AND GENERAL RELEASE
This Confidential Settlement Agreement and General Release (hereinafter,
"Agreement") is entered into by and among Xxxxxx X. Xxxxx (hereinafter, "Xx.
Xxxxx"), Modavox, Inc. (hereinafter, the "Company"), Kino Communications, LLC
(hereinafter, "KinoCom"), and Kino Interactive Group, LLC (hereinafter,
"KinoInter"). The term "Parties" or "Party" as used herein shall refer to Xx.
Xxxxx, the Company, KinoCom, and KinoInter, or any or each of them, as may be
appropriate.
RECITALS
WHEREAS, Xx. Xxxxx has agreed to resign as the Chairman of the Board of
Directors of the Company, subject to execution of this Agreement and all other
documents contemplated herein;
WHEREAS, the Parties have agreed to settle fully and finally settle all
differences whatsoever between them that are in existence now or that may arise
in the future based upon or arising out of events, acts or omissions, occurring
prior to their execution of this Agreement;
WHEREAS, the Parties hereby acknowledge, represent and warrant that the
terms and conditions in this Agreement are fair, reasonable, adequate and in
their mutual best interest; and
WHEREAS, the Parties acknowledge that they may be waiving significant
legal rights or claims by signing this Agreement and voluntarily enter into this
Agreement after consultation with legal counsel, with a full and complete
understanding of its terms and legal effect, and with the intent to be bound
thereby.
NOW, THEREFORE, in consideration of the premises and mutual promises
herein contained, it is agreed as follows:
1. PAYMENTS/COMPENSATION/COVENANTS TO XX. XXXXX
A. The Company shall pay to Xx. Xxxxx the sum of $125,000 as a
resignation fee. The payment shall be made simultaneously upon execution
of this Agreement by delivery of a Company check in that amount payable to
Xxxxxx X. Xxxxx P.C., to be held in trust by Xxx Xxxxxxxx and delivered to
Xx. Xxxxx upon execution of this Agreement.
B. The Company shall file with the Securities and Exchange
Commission (SEC) a Form S-8 to register all outstanding stock options in
the name of Xx. Xxxxx within ten (10) business days from the date of
execution of this Agreement. The amount of stock options in Xx. Xxxxx'x
name as of the date of this Agreement is three million (3,000,000). While
Xx. Xxxxx shall deliver a draft Form S-8 to the Company, the Company shall
be responsible for all final filing authority of the Form S-8 with the
SEC. Notwithstanding the fact that Xx. Xxxxx will provide a draft Form
S-8, the parties do not intend Xx. Xxxxx to be providing legal services to
the Company in delivering a draft Form S-8, and no attorney-client
relationship is contemplated or created by his provision of said draft
Form S-8. In addition, at any time within five (5) business days of Xx.
Xxxxx'x request, the Company will promptly issue any shares of the
Company's common stock issuable pursuant to the aforementioned stock
options by executing an officer's certificate in the form referenced in
Section 1.C. below.
C. The Company shall issue Xx. Xxxxx additional stock options valued
at the bid price as announced on Yahoo Finance on March 21, 2006 in an
amount equal to one percent of the issued and outstanding capital stock of
the Company on a fully diluted basis giving effect to the merger of
KinoInter into the Company. These additional options shall also be
registered with the SEC in the Form S-8 referenced in Section 1.B and
shall be evidenced by execution of a stock option agreement which in form
and substance shall have the same terms and conditions as the nonqualified
stock option agreement executed by Xxx Xxxxxxxx and Xxxxxx Xxxxxx on June
8, 2005. In addition, at any time within five (5) business days of Xx.
Xxxxx'x request, the Company will promptly direct the transfer agent to
issue any shares of the Company's common stock issuable pursuant to the
aforementioned stock options by executing an officer's certificate in the
form to be attached to said stock option agreement.
D. Xx. Xxxxx, or his corporate designee shall enter into an
agreement with the Company within ten (10) business days after the
execution of this Agreement, in which Xx. Xxxxx, or his corporate
designee, shall be granted a reseller's license for all of the Company's
products and services at the most beneficial terms currently offered by
the Company.
E. The Company shall implement an appropriate plan to retire the
Company's current IRS Payroll Tax Liability, and secure appropriate and
qualified tax professionals to initiate payment resolution with the IRS.
F. For two (2) years after the date of execution of this Agreement,
the Company shall allow Xx. Xxxxx to have two (2) representatives on the
Company's Board of Directors. In addition, the Company shall operate
without a Chairman of the Board of Directors for at least the next six (6)
months after the date of execution of this Agreement, and until such time
as an appropriate and qualified individual is identified and accepted by
the Company's Board of Directors.
G. The Company shall enter into a consulting agreement with Xx.
Xxxxx, or his corporate designee, within ten (10) business days after the
date of execution of this Agreement for the pursuit of funding the Company
wherein, if successful, Xx. Xxxxx will receive compensation based upon the
Xxxxxx Scale. Any funding so raised by Xx. Xxxxx, or his corporate
designee, may be conditioned on a special use of said funds by the
Company.
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H. The Company shall pay Xx. Xxxxx his salary through March 24,
2006. Xx. Xxxxx will resign his position as Chairman at the close of
business on the date that the later of the option agreement referenced at
Section 1.C., the reseller agreement referenced at Section 1.D., and the
consulting agreement executed at Section 1.G have been executed, at which
time Xx. Xxxxx will submit his resignation to the Company. In addition,
Xx. Xxxxx shall be reimbursed for any outstanding expenses, not to exceed
$1,000, and he may take possession and exercise ownership over his
computer and other office equipment and supplies located at the Company's
premises in Atlanta, Georgia, as well as his other personal files at the
Company's premises in Phoenix, Arizona.
I. The Company shall pay for the attorneys' fees and costs incurred
by Xx. Xxxxx in this matter, in an amount not to exceed $1,500.
J. Xx. Xxxxx acknowledges and agrees that he shall be personally and
solely responsible for the payment in full of any and all federal, state,
or other taxes and withholding liability which are due, or may be due, for
the payment set forth in this Agreement.
K. Xx. Xxxxx within ten (10) days following his resignation as
Chairman of the Company will return to the Company, at the Company's
expense, all corporate documents belonging to the Company.
L. Xx. Xxxxx will provide reasonable assistance to Modavox's counsel
in connection with the merger of KinoInter into Kino Acquisition Corp., a
wholly owned subsidiary of Modavox. After eight hours of service, Xx.
Xxxxx will be compensated for his time at an hourly rate of $200, payable
within 30-days after Xx. Xxxxx submits a xxxx to Modavox for payment.
3. NO ADMISSION
Each Party hereby acknowledges and agrees this Agreement shall not be
deemed to be or construed as an admission of any liability of any kind
whatsoever by any Party in favor or against any other Party. No Party shall
hereafter assert that this Agreement, the fact of this Agreement, or any
provision herein to be an admission by any Party as to any wrongful conduct,
liability, or as to the merits or lack of merit of any claim or dispute settled
herein, or otherwise.
4. GENERAL RELEASE BY XX. XXXXX
Xx. Xxxxx, for himself and his respective agents, heirs, successors, and
assigns, and each of them, acting on their behalf, hereby unconditionally
releases and discharges the Company, KinoCom, KinoInter, and each and every one
of their respective present and former affiliated or related entities, parents,
subsidiaries, officers, directors, employees, and attorneys, and all of their
respective successors and assigns (collectively the "Releasees"), from any and
all claims, demands, actions or causes of action that now exist or that may
arise in the future based upon or arising out of acts, events or omissions
occurring prior to the execution of this Agreement. Nothing in this Agreement
shall be interpreted to limit the rights of Xx. Xxxxx in the future as a
shareholder of the Company.
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Xx. Xxxxx represents and warrants that he is currently unaware of any
claim(s), right(s), demand(s), or debt(s), action(s), obligation(s), liability
or cause(s) of action whatsoever against any Party, business entity or person
released herein which have not been released pursuant to this paragraph.
5. GENERAL RELEASE BY COMPANY, KINOCOM, AND KINOINTER
The Company, KinoCom, and KinoInter, each for itself and its respective
agents, successors, and assigns, and each of them, acting on their behalf, each
hereby unconditionally releases and discharges Xx. Xxxxx, and each of his
successors and assigns (collectively the "Xxxxx Releasees"), from any and all
claims, demands, actions or causes of action, whether known or unknown, that now
exist or that may arise in the future based upon or arising out of acts, events
or omissions involving Xx. Xxxxx which have occurred prior to the execution of
this Agreement.
The Company, KinoCom, and KinoInter, each represent and warrant that it is
currently unaware of any claim(s), right(s), demand(s), or debt(s), action(s),
obligation(s), liability or cause(s) of action whatsoever against any Party,
business entity or person released herein which have not been released pursuant
to this paragraph.
6. COVENANTS NOT TO XXX
Xx. Xxxxx warrants that he will not at any time in the future xxx the
Company, KinoCom, or KinoInter for any claim, demand, action or cause of action
that he released and discharged pursuant to Paragraph 4 of this Agreement.
The Company, KinoCom, and KinoInter each warrant that they will not at any
time in the future xxx Xx. Xxxxx for any claim, demand, action or cause of
action that they have released and discharged pursuant to Paragraph 5 of this
Agreement.
7. INDEMNIFICATION
The Company agrees to indemnify and hold harmless Xx. Xxxxx from, against
and in respect of, the full amount of any and all consequences, arising from, in
connection with, or incident to any and all claims arising from, as a result of,
or with respect to the Company's IRS Payroll Tax Liability as of the date of
execution of this Agreement.
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In the event Xx. Xxxxx is notified of a claim by the IRS against him based
on the Company's IRS Payroll Tax Liability, he shall: (i) notify the Company in
writing of any such claim; (ii) provide the Company with reasonable assistance
to settle or defend such claim, at the Company's own expense; and (iii) grant to
the Company the right to control the defense and/or settlement of such claim, at
the Company's own expense; provided, however, that: (A) the Company shall not,
without Xx. Xxxxx'x consent, agree to any settlement which: (x) makes any
admission on behalf of Xx. Xxxxx; or (y) consents to any injunction against Xx.
Xxxxx; and (B) Xx. Xxxxx shall have the right to participate in any legal
proceeding to contest and defend a claim and to be represented by legal counsel
of his choosing, to be paid for by the Company.
8. CONFIDENTIALITY
The Parties each agree that he/it will keep the terms and amount of this
Agreement confidential, and that, except as required by law or authorized in
writing by the other Parties, none will hereafter disclose any information
concerning this Agreement.
9. PRESS RELEASE
Xx. Xxxxx shall prepare, coordinate and deliver to PR Newswire at the
Company's expense an appropriate press release concerning his resignation as
Chairman of the Board of Directors of the Company and engagement as a consultant
to the Company.
10. NON-DISPARAGMENT
Xx. Xxxxx agrees not to make any oral or written statement or take any
other action which disparages or criticizes the Company, KinoCom, and KinoInter,
or its management for any practices, circumstances, or actions occurring prior
to the date of this Agreement, or which damages the good reputation of the
Company or impairs the normal operations of the Company.
The Company, KinoCom, and KinoInter each agree that none of its officers
or directors shall make any oral or written statement or take any other action
which disparages or criticizes Xx. Xxxxx, which would damage Xx. Xxxxx'x
reputation or interfere with Xx. Xxxxx'x ability to obtain or maintain
employment.
11. NOTICES
All notices and other communications required or permitted under this
Agreement will be delivered to the parties at the address set forth below their
respective signature blocks, or at such other address that they hereafter
designate by notice to all other parties in accordance with this Section. All
notices and communications will be deemed to be received in accordance with the
following: (i) in the case of personal delivery, on the date of such delivery;
(ii) in the case of facsimile transmission, on the date on which the sender
receives confirmation by facsimile transmission that such notice was received by
the addressee, provided that a copy of such transmission is additionally sent by
mail as set forth in (iv) below; (iii) in the case of overnight air courier, on
the second business day following the day sent, with receipt confirmed by the
courier; and (iv) in the case of mailing by first class certified mail, postage
prepaid, return receipt requested, on the fifth business day following such
mailing.
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12. COMPULSORY ARBITRATION
Any controversy, claim and/or dispute arising out of or relating to this
Agreement or the breach hereof or subject matter hereof (including any action in
tort) will be finally and fully settled by arbitration in Atlanta, Georgia in
accordance with the then-existing Commercial Arbitration Rules of the American
Arbitration Association (the "AAA"), and judgment upon the award rendered by the
arbitrators may be entered in any court having applicable jurisdiction. Written
notice of demand for arbitration will be given to the other parties and to the
AAA within ninety (90) days after the controversy, claim or dispute has arisen,
and in no event after the date when the institution of court proceedings based
on such dispute would be barred by the applicable statute of limitations.
Controversies, claims and/or disputes will be resolved by one arbitrator
selected by the mutual agreement of the parties or, failing that agreement
within seven business (7) days after written notice demanding arbitration, by
the AAA. There will be limited discovery prior to the arbitration hearing as
follows: Exchange of witness lists and copies of documentary evidence and
documents related to or arising out of the issues to be arbitrated. All
decisions of the arbitrator will be in writing, and the arbitrator will provide
reasons for the decision. Modavox will bear its own and Xx. Xxxxx'x attorney's
fees and costs in accordance with any dispute or arbitration.
13. GOVERNING LAW
This Agreement will be deemed to have been executed in the State of
Delaware and will be governed and construed as to both substantive and
procedural matters in accordance with the laws of the State of Delaware, but
excepting (i) any State of Delaware rule which would result in judicial failure
to enforce the arbitration provisions of Section 12 hereof or any portion
thereof and (ii) any State of Delaware rule which would result in the
application of the law of a jurisdiction other than the State of Delaware.
14. FURTHER ASSURANCES
The Parties will sign such other instruments, cause such meetings to be
held, resolutions passed and by-laws enacted, exercise their vote and influence,
do and perform and cause to be done and performed such further and other acts.
15. MISCELLANEOUS
The Parties hereby represent, warrant and agree as follows: A. Each Party
hereby represents that such Party has not heretofore assigned or transferred to
any person or entity any of the claims released herein, and that the persons
signing this Agreement are duly authorized by the Parties to enter this
Agreement and to give the Release set forth herein.
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B. Each Party hereby agrees that, in the event there is hereafter asserted
any cause of action, claim, demand, debt, liability, account or obligation
arising out of any claim released herein, including without limitation any claim
asserted by an actual or purported assignee or transferee of any Party to this
Agreement, the Party assigning, transferring or conveying said claim, or who is
purported to have done so, agrees to indemnify, defend (using an attorney
selected by the Party indemnified), and hold harmless each Party released under
this Agreement, from and against such claim, including without limitation all
damages, losses, settlements, actions or causes of action, demands, costs and
expenses, including actual attorneys' fees and costs, arising out of, relating
to, or in connection with said claim.
C. Each Party understands, acknowledges and hereby represents and warrants
that this Agreement supersedes any and all prior understandings, agreements,
representations, promises or inducements, whether oral or written, which are not
expressly set forth herein or expressly referred to, reserved or preserved in
this Agreement. Each Party understands, acknowledges and hereby represents and
warrants that no understanding, agreement, representation, warranty, promise or
inducement has been made concerning the subject matter of this Agreement other
than as set forth in this Agreement, and that such Party enters into this
Agreement and settlement without any reliance whatsoever upon any understanding,
agreement, representation, warranty, promise or inducement not set forth herein.
D. Each Party acknowledges and represents such Party: (a) has had an
adequate opportunity to have this document reviewed by an attorney or
representative of their choice acting on their behalf; (b) has been represented
by counsel of such Party's choice in the making of this settlement and the
negotiation and drafting of this Agreement, including the Release given herein;
(c) understands the terms of this Agreement in full; and (d) signs this
Agreement freely and voluntarily with the intent to be fully bound thereby. Each
Party acknowledges such Party has participated in the negotiation of this
Agreement and the negotiation, drafting and preparation of this Agreement, and
that no provision of this Agreement shall be interpreted against any Party by
reason of the fact that any particular Party or its counsel purportedly drafted
or prepared such provision.
E. The Parties represent and warrant that they have not been coerced into
entering into this Agreement, nor has any person or entity exercised any
pressure or undue influence on such Party to enter into this Agreement. f. Each
Party agrees that this Agreement shall inure to the benefit of the Parties
hereto and their respective officers, directors, partners, former partners,
employees, servants, agents, insurers, representatives, attorneys, heirs,
administrators, executors, trustees, predecessors, successors and assigns, and
each of them and all other persons acting by, through, under or in concert with
any of them, and each of them, and to all of their respective heirs,
representatives, successors, and assigns.
G. Should any provision of this Agreement be declared or determined by any
court of competent jurisdiction to be illegal, invalid or unenforceable as a
result of any action or proceeding, the validity of the remaining parts, terms,
or provisions shall not be affected thereby and any said illegal or invalid
part, term or provision shall be deemed not to be a part of this Agreement.
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H. The titles of the various paragraphs are intended solely for
convenience of reference, and are not intended and shall not be deemed for any
purpose whatsoever to modify, explain or place any construction upon any of the
provisions of this Agreement and shall not affect the meaning or interpretation
of this Agreement.
I. This Agreement may be executed in multiple counterparts and each such
signed copy shall be deemed an original hereof.
J. No covenant, obligation, agreement or other provision in this Agreement
shall be construed to prevent, restrict or interfere with any person's duty or
ability to respond truthfully as required by subpoena or other compulsory legal
process.
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IN WITNESS WHEREOF, each of the undersigned Parties has entered into this
Agreement on the dates shown below.
Dated: March 22, 2006 /S/ XXXXXX X. XXXXX
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Xxxxxx X. Xxxxx
Dated: March 22, 2006 MODAVOX, INC.
By: /S/ XXXXX X. XXX
-------------------
Name: Xxxxx X. Xxx
Its: CEO
Dated: Xxxxx 00, 0000 XXXX COMMUNICATIONS, LLC
By: /S/ XXXXXX X. XXXXXXX
-------------------
Name: Xxxxxx X. Xxxxxxx
Its: Member/Manager
Dated: March 22, 2006 KINO INTERACTIVE GROUP, LLC
By: /S/ XXXXXX X. XXXXXXX
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Name: Xxxxxx X. Xxxxxxx
Its: Member/Manager
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