GLOBAL TELECOMMUNICATION SOLUTIONS, INC.
00 Xxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxx Xxxxxx 000000
As of November 1,1998
Mr. J. Xxxx Xxxxxxxxxx
00 Xxxx Xxxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
Re: Termination of Employment Agreement and Other Matters
Dear Xxxx:
This letter, effective upon your execution and its return, shall set forth
our complete agreement in connection with the termination (the "Termination
Agreement") of the Employment Agreement between you and Global Telecommunication
Solutions, Inc. (the "Company"), dated as of January 31, 1998 (the "Employment
Agreement") and such other matters as set forth herein. This Termination
Agreement, when countersigned by you, terminates the Employment Agreement.
1. Except as otherwise provided herein, the Employment Agreement is hereby
terminated and of no further force or effect.
2. Subject to the terms and conditions contained herein, the Company shall pay
you $175,000 as a severance payment in lieu of the remaining salary
payments due under Section 2.1 of the Employment Agreement (the "Severance
Payments"). The Severance Payments shall be paid in equal bi-weekly
installments commencing with the first payroll date (under the Company's
normal payroll schedule) following November 4, 1998 and ending with the
first payroll date after January 31, 2000 (the "Termination Date"). After
the date hereof and to the extent available to you at law, you will be
eligible to participate in the Company's health insurance plans through
COBRA.
3. (a) The Company's failure to make any Severance Payment when due shall
constitute a breach hereof and shall cause: (i) the acceleration of
Company's payment obligation such that the total outstanding amount due in
severance becomes due immediately; and (ii) the immediate and irrevocable
termination of all limitations on Employee's right to be involved (either
as an owner, employee, consultant or otherwise) in the in the
telecommunications industry, including without limitation, all aspects of
the "Restrictive Covenant" set forth in Section 6.2 of the Merger Agreement
as amended on even date with this Termination Agreement (the "Restrictive
Covenant"). Notwithstanding the foregoing, the Company's failure to make
any Severance Payment when due shall not constitute a breach hereof and
provide you with the remedies contained in (i) or (ii) above unless you
shall have given written notice to the Company indicating the non-payment
and, within ten (10) days after such notice, the Company shall not have
paid the Severance Payment.
(b) In the event you breach (i) the Restrictive Covenant or (ii) any other
provision of this Termination Agreement, then such action shall constitute
a breach hereof and the Company shall have the right to terminate this
Termination Agreement. In the event the company terminates this Termination
Agreement as provided in this Section 3(b), the Company shall have no
further obligation to make any Severance Payments. You acknowledge and
agree that the termination of this Termination Agreement under this Section
3 shall not affect your obligations under the Restrictive Covenant which
shall remain in full force and effect in accordance with its terms.
Notwithstanding the foregoing, the Company shall not have the right to
terminate this Agreement unless the Company shall have given written notice
to you, signed by an officer of the Company, specifying the act(s) that the
Company allege constitute a breach with reasonable particularity and,
within ten (10) days after such notice, you shall not have cured or
eliminated the alleged breach.
4. You agree to (i) subject to your employment, business or personal
obligations, assist the Company as reasonably necessary in its defense or
prosecution of litigation currently existing or commenced in the future
arising out of matters transacted while you were employed by the Company
and in which you were involved; (ii) subject to your employment, business
or personal obligations, make yourself reasonably available for information
requests and consultation regarding business affairs and transactions of
the Company occurring or commenced during your employment by the Company;
provided, however, you shall not be obligated to (a) devote more than 8
hours per week to such consultation until December 31, 1998 and one hour
per week thereafter until March 31, 1998 (at which point such obligation
shall cease) and (b) travel outside of the state of New Jersey in
connection with such consultation; and (iii) within 30 days after the date
of this Termination Agreement, use your best efforts to ensure an orderly
transition and to provide the Company with assistance in those projects
that you are managing as of the date hereof. No additional compensation
shall be payable to you for any such assistance, information or
consultation; provided, however, the Company shall pay any reasonable out
of pocket costs to be incurred by you in fulfilling your obligations under
this Paragraph 4.
5. (a) The Company agrees to indemnify and hold you harmless from and against
any and all claims, liabilities, losses, damages, costs and expenses,
including reasonable counsel fees and disbursements (singularly, a "Loss,"
and collectively, the "Losses"), arising out of or relating to actions or
claims brought against you individually after the termination of your
employment with the Company in connection with the operation of the
Company's business. Notwithstanding the foregoing, the Company shall have
no obligation to indemnify you in connection with any Loss arising from (i)
your willful misconduct or (ii) dishonest actions performed in your
dealings with, on behalf of, or in connection with the Company, its
customers, suppliers, vendors and any other person ("dishonest" for these
purposes shall mean your knowingly or recklessly making of a material
misstatement or omission for your personal benefit).
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(b) You agree to indemnify and hold harmless the Company, any Affiliate of
the Company, and the directors, officers and employees of the Company or
any of its Affiliates from and against any and all claims, liabilities,
losses, damages, costs and expenses, including reasonable counsel fees and
disbursements (singularly, a "Loss," and collectively, the "Losses"),
arising out of or relating to (i) your willful misconduct or (ii) any
dishonest actions performed in your dealings with, on behalf of, or in
connection with the Company, its customers, suppliers, vendors and any
other person ("dishonest" for these purposes shall mean your knowingly or
recklessly making of a material misstatement or omission for your personal
benefit).
6. In consideration of the Severance Payments, the Company's release hereunder
and the termination of the Employment Agreement and the other
considerations herein, you and each of your heirs, executors,
administrators, successors, personal representatives or assigns do hereby
waive, release, remise, acquit, satisfy and forever discharge the Company
and any and all affiliates or related corporations and their shareholders,
parents, subsidiaries, affiliates, successors or assigns, and their
attorneys, officers, shareholders, directors, agents and employees, past,
present or future, and their heirs, executors, administrators, successors,
personal representatives or assigns (hereafter collectively referred to as,
the "Company Second Party"), of and from any claim and all manner of action
and actions, cause and causes of action, suits, debts, obligations,
liabilities, dues, sums of money, accounts, reckonings, bonds, bills,
specialties, covenants, contracts, controversies, agreements, promises,
variances, trespasses, damages, judgments, executions, claims for
negligence, damages and demands whatsoever, whether arising out of your
employment with the Company, the Merger Agreement, the $1 million
Promissory Note entered into as of February 1, 1998 or otherwise, in law,
or in equity, arising under contract or otherwise, or arising under local,
state or federal law or otherwise, including, but not limited to any local,
state or federal employment discrimination laws, which you ever had, now
have, or which you or your heirs, executors, administrators, successors,
personal representatives or assigns hereafter can, shall or may have
against the Company or any Company Second Party, known, unknown, foreseen
or unforeseen from the beginning of the world to the date of this letter
agreement; provided, however, that the foregoing waiver and general release
shall not apply to your right to enforce (i) this Termination Agreement or
(ii) that certain letter agreement between you and the Company dated of
even date herewith (the "Letter Agreement") or (iii) that certain Amendment
to the Merger And Reorganization Agreement entered into between the
Company, you, Centerpiece Communications, Inc. and CCI Acquisition Corp. of
even date herewith (the "Merger Amendment"). Without limiting the
generality of the foregoing or GTS' indemnification hereunder, you
specifically waive any claim, demand, or action alleging or based upon an
assertion that (1) the Employment Agreement, or (2) the Merger Agreement or
(3) the Promissory Note in the principal amount of $1 million dated as of
February 1, 1998 executed by GTS in connection with the Merger Agreement,
have been breached by the Company in any manner whatsoever.
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7. In consideration of you entering into this Termination Agreement and your
general release and waiver in Paragraph 6 above, the Company and any and
all affiliates or related corporations and their successors and assigns, do
hereby waive, release, remise, acquit, satisfy and forever discharge you,
your heirs, executors, administrators, successors, personal representatives
and assigns, their attorneys, past, present or future (hereinafter referred
to collectively as "Your Second Party") of and from any claim and all
manner of action and actions, cause and causes of action, suits, debts,
obligations, liabilities, dues, sums of money, accounts, reckonings, bonds,
bills, specialties, covenants, contracts, controversies, agreements,
promises, variances, trespasses, damages, judgments, executions, claims for
negligence, damages and demands whatsoever, whether arising under your
employment relationship with the Company, the Merger Agreement (including,
without limitation, all liability arising out of Centerpiece
Communications, Inc.'s or the Company's relationship with Access Telecom,
Inc.) or otherwise, in law, or in equity, arising under contract or
otherwise, or arising under local, state or federal law or otherwise, which
the Company ever had, now has, or which it or its heirs, executors,
administrators, successors, personal representatives or assigns hereafter
can, shall or may have against you or any of Your Second Party, known,
unknown, foreseen or unforeseen from the beginning of the world to the date
of this letter agreement; provided, however, that the foregoing release
shall not apply to the Company's right to enforce (i) this Termination
Agreement or (ii) the Letter Agreement or (iii) the Merger Amendment.
Without limiting the generality of the foregoing or your indemnification
hereunder, the Company specifically waives any claim, demand, or action
alleging or based upon an assertion that (1) the Employment Agreement or
(2) the Merger Agreement has been breached by you in any manner whatsoever.
8. In executing this letter, you affirm that (i) you are competent and that
you understand and accept the nature, terms and scope of this letter and
the agreements contained herein, (ii) this letter constitutes your valid,
binding and enforceable obligation, enforceable in accordance with its
terms, (iii) this letter states the entire agreement between you and the
Company with respect to the subject matter hereof, (iv) you acknowledge
that by signing your name below you have read, understand and accept each
of the terms of this letter, and that you have had sufficient opportunity
to review it, to consult with an attorney or other advisor, and that you
are entering into it freely and knowingly.
9. In executing this letter, The Company affirms that (i) this letter
constitutes the valid, binding and enforceable obligation of the Company,
enforceable in accordance with its terms, and (ii) this letter states the
entire agreement between you and the Company with respect to the subject
matter hereof.
10. Notwithstanding anything contained herein, Sections 4, 5, and 6 (except
Section 6.6 thereof) of the Employment Agreement are incorporated into this
Termination Agreement as if included herein and shall survive the
termination of the Employment Agreement.
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11. In the event of a Change in Control, Executive shall be entitled to receive
all payments set forth in Section 2 of this Termination Agreement, in a
single lump sum payment within seven (7) days of such Change in Control.
For purposes of this Termination Agreement, a "Change in Control" shall
have occurred if (i) the Company, as a going concern, is sold or otherwise
acquired, (ii) any party or group of parties not owning more than 5% of the
outstanding voting securities of the Company acquires in one or more
transactions beneficial ownership of more than 40% of such securities or
(iii) Xxxxx Xxxxxxx is no longer employed by the Company as an Executive
Officer.
12. In the event of any controversy or claim arising from or related to this
Agreement, its performance or interpretation, the parties, in good faith,
initially will attempt to resolve the dispute among themselves. Failing
such resolution, the parties mutually agree to submit the matter to
arbitration before the American Arbitration Association ("AAA"), pursuant
to its Commercial Arbitration Rules, at the AAA office in New York, New
York or as otherwise agreed. The parties agree to request that the
arbitration hearing be held within one hundred twenty (120) days of
submission. The laws of the State of New York shall apply to all matters
considered in the arbitration. The party prevailing in the arbitration
shall be entitled to recover all costs reasonably incurred, including
reasonable attorneys' fees, from the other party.
If this letter accurately sets forth our understanding and agreement with
respect to the termination of the Employment Agreement and other matters set
forth herein, please indicate by signing in the space provided below and
returning this letter agreement to me.
Very truly yours,
Global Telecommunication Solutions, Inc.
/s/ Xxxxx Xxxxxxx
By:______________________________
Xxxxx Xxxxxxx
President
Accepted and agreed as of the 1st
day of November, 1998:
/s/ J. Xxxx Xxxxxxxxxx
___________________________
J. Xxxx Xxxxxxxxxx
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