Exhibit 99.1
SEPARATION AGREEMENT AND GENERAL RELEASE
THIS SEPARATION AGREEMENT AND GENERAL RELEASE (this "AGREEMENT") is
entered into as of February 1, 2005 by and between ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ("▇▇▇▇▇▇"),
on the one hand, and AVENUE GROUP, INC., a Delaware corporation (the "Company"),
on the other, with respect to the following facts:
RECITALS
WHEREAS, ▇▇▇▇▇▇ is one of the original founders of the Company
and has served as an executive of the Company in a number of capacities, most
recently as Executive Vice President and Secretary.
WHEREAS, ▇▇▇▇▇▇ and the Company are parties to that certain
Employment Agreement dated as of September 1, 2002 (the "Employment Agreement")
pursuant to which ▇▇▇▇▇▇ serves as Executive Vice President, Secretary and as a
director of the Company.
WHEREAS, ▇▇▇▇▇▇ and the Company have mutually agreed that it
would be in the best interests of the Company that ▇▇▇▇▇▇ and the Company
release each other of their respective obligations under the Employment
Agreement and that ▇▇▇▇▇▇ facilitate the sale back to the Company of all the
shares of the Company's common stock which are deemed to be controlled by him,
all subject to the terms, and for the consideration, set forth in this
Agreement.
WHEREAS, in recognition of the fact that ▇▇▇▇▇▇ deferred
salary from December 1, 2004 through February 1, 2005 and in satisfaction of the
parties mutual obligations under the Employment Agreement, the Company shall pay
▇▇▇▇▇▇ a cash payment of $92,250, to be paid as follows: $72,250 payable on the
Termination Date (as defined below) plus $10,000 on March 1, 2005 and $10,000 on
April 1, 2005.
WHEREAS, in addition the Company and ▇▇▇▇▇▇ desires to
complete an exchange of shares of the Company's common stock for shares of the
common stock of ROO Group, Inc., a Delaware corporation ("ROO"), owned by the
Company, all subject to the terms, and for the consideration, set forth in this
Agreement.
NOW, THEREFORE, in consideration for the covenants and
agreements contained herein, and other good and valuable consideration, the
parties hereto agree as follows:
1. TERMINATION OF EMPLOYMENT. ▇▇▇▇▇▇ and the Company hereby
agree that the last date of ▇▇▇▇▇▇'▇ employment with the Company shall be the
Termination Date, as hereafter defined. ▇▇▇▇▇▇ hereby agrees to resign as a
director and officer of the Company and from any other positions ▇▇▇▇▇▇ may hold
with the Company or any of its subsidiaries on the Termination Date and the
Company shall accept such resignations. In addition, the obligations of the
parties under the Employment Agreement shall terminate effective as of the
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Termination Date. Except as otherwise specifically set forth in this Agreement,
the Company shall have no further obligations to ▇▇▇▇▇▇ and all compensation and
benefits payable to him shall cease as of the Termination Date. ▇▇▇▇▇▇ hereby
acknowledges that except for the payments contemplated in Section 2, below, he
has been paid all accrued compensation, wages, bonus or vacation pay, benefits
and other compensation owed to him by the Company or to which he may be entitled
up to and through the Termination Date and hereby releases the Company of any
further obligations to pay any such amounts except as specifically contemplated
by this Agreement. The "TERMINATION DATE" shall be a date mutually agreeable to
▇▇▇▇▇▇ and the Company on which the Company and ▇▇▇▇▇▇ shall deliver the
following:
(a) Deliveries by ▇▇▇▇▇▇. ▇▇▇▇▇▇ shall deliver, or
cause to be delivered, the following to the Company:
(i) The Company Shares (as defined in
Section 3, herein);
(ii) A cash payment of $125,000; and
(iii) His resignation as an officer and
director of the Company
(b) Deliveries by the Company. The Company shall
deliver, or cause to be delivered, the following:
(i) A cash payment of $72,250 pursuant to
Section 2 herein;
(ii) The ROO Shares pursuant to Section 3,
herein); and
(iii) A cash payment of $125,000 as
instructed by ▇▇▇▇▇▇.
(c) Deliveries by the Company and ▇▇▇▇▇▇. Both the
Company and ▇▇▇▇▇▇ (and any seller of the Company Shares arranged by ▇▇▇▇▇▇)
shall execute irrevocable letters of instruction to the transfer agents for the
Company and ROO instructing the transfer agents to transfer the Company Shares
to the Company and the transfer of the ROO Shares to ▇▇▇▇▇▇ and his spouse.
The termination of ▇▇▇▇▇▇'▇ employment with the Company shall become effective
only upon the delivery of all of the items set forth in subparagraphs (a)-(c),
above.
2. PAYMENTS PURSUANT TO THE EMPLOYMENT AGREEMENT. ▇▇▇▇▇▇ and
the Company acknowledge and agree that ▇▇▇▇▇▇ has deferred his compensation from
the Company and that he is owed a total of $20,500 based on his employment with
the Company through the end of January 2005. In addition, in satisfaction of the
Company's obligations to ▇▇▇▇▇▇ under the Employment Agreement from the date
hereof through the expiration date of the Employment Agreement on September 1,
2005, the Company shall pay ▇▇▇▇▇▇ $71,750, for a total aggregate amount of
$92,250 (the "Cash Payment"). The Company agrees to pay ▇▇▇▇▇▇ the Cash Payment
as follows: $72,250 on or before the Termination Date, $10,000 on or before
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March 1, 2005 and $10,000 on or before April 1, 2005. The Company shall deduct
from each of the Cash Payments applicable withholding taxes for ▇▇▇▇▇▇ at the
rate of fifteen percent (15%) for US federal and five percent (5%) for
California state.
3. EXCHANGE OF SHARES OF THE COMPANY AND ROO. On and subject
to the terms and conditions set forth in this Agreement, on or prior to the
Termination Date, ▇▇▇▇▇▇ shall cause to be delivered to the Company a total of
10,000,000 shares (the "Company Shares") of the Company's common stock and shall
pay the Company a cash payment of $125,000 in exchange for the delivery by the
Company to ▇▇▇▇▇▇ (and his spouse) of 12,500,000 shares of the common stock of
ROO (the "ROO Shares") owned by the Company and a cash payment of $125,000. The
cash payments for the Company Shares and the ROO Shares shall be paid by check
or wire transfer to an account designated by each of the relevant parties in
exchange for certificates representing the Company Shares and the ROO Shares
duly endorsed in blank or accompanied by appropriate stock powers. In connection
with the exchange of shares contemplated by this Section 3, the parties shall
execute the Subscription and Exchange Agreement in the form attached hereto as
Exhibit A (the "Subscription Agreement"), which Subscription Agreement is
incorporated herein by this reference.
4. RELEASE OF CLAIMS.
a. RELEASE BY ▇▇▇▇▇▇. As a material inducement to the
Company to enter into this Agreement, ▇▇▇▇▇▇ does hereby covenant not to ▇▇▇ and
fully and forever waives, releases, and discharges, on his own behalf and on
behalf of any dependents, heirs, affiliates, successors and assigns, each of the
Company and any entity or individual affiliated with the Company, including,
without limitation, any of its attorneys, accountants, predecessors, successors,
agents, directors, officers and employees ("COMPANY RELEASED PARTIES") from all
rights, claims, actions and suits of all kinds and descriptions that ▇▇▇▇▇▇ may
have against the Company Released Parties arising out of the Employment
Agreement, his employment with the Company and/or his resignation or termination
therefrom, and any ownership interest he may have in the Company Shares other
than claims arising from fraudulent or criminal actions of any of the Company
Released Parties, including, but not limited to any claim that the Company
discriminated against ▇▇▇▇▇▇ on the basis of his race, sex, religion, national
origin, handicap, ancestry or age, that the Company violated any promise or
agreement either express or implied with ▇▇▇▇▇▇, or that the Company have
terminated him for any illegal reason or in an illegal fashion, including
specifically without limiting the generality of the foregoing any claim under
the Employee Retirement Income Security Act, Title VII of the Civil Rights Act
of 1964, the Age Discrimination in Employment Act, the Americans with
Disabilities Act, or any claim for employment discrimination, defamation,
liable, interference with contract, business relationships, or prospective
economic advantage, emotional distress, wrongful termination, wages, severance
pay, deferred compensation, stock options, bonus, sick leave, holiday pay,
vacation pay, life insurance, health and medical insurance, or any other fringe
benefit or commissions.
b. RELEASE BY COMPANY. The Company hereby covenants
not to ▇▇▇ and fully and forever waives, releases and discharges ▇▇▇▇▇▇ and (if
applicable) each of his attorneys, successors, assigns, estates, heirs, and
spouses (collectively, the "▇▇▇▇▇▇ RELEASED PARTIES") from and against any and
all liabilities, claims, debts, demands, causes of action, charges, complaints,
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actions, obligations, costs, expenses, attorneys' fees, damages, injuries,
losses, agreements, promises, interests, judgments, accounts and other legal
responsibilities arising in law, equity or otherwise, of any and every kind,
nature and character whatsoever which any of the Company ever had, now have, or
claim to have against any ▇▇▇▇▇▇ Released Parties, other than claims arising
from fraudulent or criminal actions of any ▇▇▇▇▇▇ Released Parties.
c. NO ASSIGNMENT OF CLAIMS. ▇▇▇▇▇▇ and the Company
represent and warrant that they have not heretofore assigned or transferred to
any person or entity of any kind or entity of any kind any matter released
herein. To the extent that the release set forth in Section 4 of this Agreement
runs in favor of persons or entities not signatory hereto, this Agreement is
hereby declared to be made for each of their express benefits and uses.
d. WAIVER OF UNKNOWN CLAIMS. It is a further
condition of the consideration herein and is the intention of ▇▇▇▇▇▇ and the
Company in executing this instrument that the same shall be effective as a bar
to each and every claim, demand, and cause of action hereinabove specified and,
in furtherance of this intention, ▇▇▇▇▇▇ and the Company hereby expressly waive
any and all rights or benefits conferred by the provisions of SECTION 1542 OF
THE CALIFORNIA CIVIL CODE and/or any similar rule of law adopted by statute or
otherwise in any other of the United States and expressly consents that this
Agreement shall be given full force and effect according to each and all of its
express terms and conditions, including those relating to unknown and
unsuspected claims, demands and causes of actions, if any, as well as those
relating to any other claims, demands and causes of actions hereinabove
specified. Section 1542 of the California Civil Code provides:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE
CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE
TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE
MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR."
▇▇▇▇▇▇ and the Company acknowledge that they may hereafter discover claims or
facts in addition to or different from those which they now know or believe to
exist with respect to the subject matter of this Agreement and which, if known
or suspected at the time of executing this Agreement, might have materially
affected this settlement. Nonetheless, ▇▇▇▇▇▇ and the Company hereby waive any
right, claim or causes of action that might arise as a result of such different
or additional claims or facts. ▇▇▇▇▇▇ and the Company hereby acknowledge that
they understand the significance and consequence of such release and such
specific waiver of SECTION 1542.
f. NO PRIOR ASSIGNMENT. No party to this Agreement
has heretofore assigned, transferred, or granted, or purported to assign,
transfer or grant, any of the claims, demands, and cause or causes of action
released pursuant to this Agreement. ▇▇▇▇▇▇ represents that he is the owner of
the claims, demands and cause or causes of action that he is releasing, and
shall indemnify, defend, and hold the Company Released Parties free and harmless
from and against all claims, demands, and cause or causes of action made or
asserted by any other person, firm or entity purporting to be the owner of any
claims, demands, and cause or causes of action so released. The Company
represents that they are the owner of the claims, demands and cause or causes of
action that they are releasing, and shall indemnify, defend, and hold the ▇▇▇▇▇▇
Released Parties free and harmless from and against all claims, demands, and
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cause or causes of action made or asserted by any other person, firm or entity
purporting to be the owner of any claims, demands, and cause or causes of action
so released.
g. CLAIMS ARISING OUT OF THIS AGREEMENT. Nothing is
this Agreement shall constitute a release by the Company or ▇▇▇▇▇▇ of any claims
arising out of this Agreement, including, without limitation, any claims
relating to the payment of the Cash Payment pursuant to Section 2 hereof.
5. NO ADMISSION. The Company and ▇▇▇▇▇▇ understand and agree
that neither this Agreement nor the consideration referenced above is to be
construed as an admission on the part of the Company Released Parties or the
▇▇▇▇▇▇ Released Parties, or any of them, of any liability whatsoever.
6. CONFIDENTIAL INFORMATION. During his employment with the
Company, ▇▇▇▇▇▇ has been given access to, and has received and been entrusted
with confidential information, including but in no way limited to records,
development, marketing, organizational, financial, management, administrative,
production, distribution and sales information, data, specifications and
processes owned by the Company or their affiliates, agents or consultants, or
used in the course of their business that is not otherwise part of the public
domain (collectively, the "CONFIDENTIAL MATERIAL"). All such Confidential
Material is considered secret and is acknowledged by ▇▇▇▇▇▇ to have been made
available to ▇▇▇▇▇▇ in confidence. ▇▇▇▇▇▇ covenants and agrees that he will not
at any time reveal, divulge or make known to any person, firm or corporation any
information, knowledge or data of a proprietary nature relating to the business
of the Company or any of their affiliates which is not or has not become
generally known or public. ▇▇▇▇▇▇, as the case may be shall hold, in a fiduciary
capacity, for the benefit of the Company, all information, knowledge or data of
a proprietary nature, relating to or concerned with, the operations, customers,
developments, sales, business and affairs of the Company and their affiliates
which is not generally known to the public and which is or was obtained by
▇▇▇▇▇▇ prior to the date of this Agreement. ▇▇▇▇▇▇ recognizes and acknowledges
that all such information, knowledge or data is a valuable and unique asset of
the Company and accordingly agree not to discuss or divulge any such
information, knowledge or data to any person, firm, partnership, corporation or
organization other than to the Company Entities, its affiliates, designees,
assignees or successors or except as may otherwise be required by the law, as
ordered by a court or other governmental body of competent jurisdiction, or in
connection with the business and affairs of the Company.
7. MATERIAL BREACH. In the event any party breaches any of the
provisions, covenants or promises set forth Sections 4 and 6 or other provisions
of this Agreement, the injured party will be entitled, in addition to damages,
all rights and remedies available at law and equity including, without
limitation, injunctive relief from a court of competent jurisdiction, enjoining
the party which committed the breach, or any of them, their agents, attorneys,
and all others acting on his or its behalf from any further disclosure or
dissemination of information or any activity in breach of Sections 4 and 6 of
this Agreement.
8. COSTS. Each party shall bear her or its own costs and
attorneys' fees in connection with the negotiation and preparation of this
Agreement.
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9. ENTIRE AGREEMENT. This Agreement contains the sole and
entire agreement and understanding of the parties with respect to the entire
subject matter hereof, and any and all prior discussions, negotiations,
commitments or understandings related thereto, if any are hereby merged herein
and therein. No representations, oral or otherwise, express or implied, other
than those specifically referred to in this Agreement have been made by any
party hereto.
10. WAIVER, MODIFICATION AND AMENDMENT. No provision hereof
may be waived unless in writing signed by all parties hereto. Waiver of any one
provision herein shall not be deemed to be a waiver of any provision herein.
This Agreement may be amended or modified only by a written agreement executed
by all of the parties hereto.
11. BINDING ON PARTIES. This Agreement, and all the terms and
provisions hereof, shall be binding on the parties and their respective heirs,
legal representatives, successors and assigns, and shall inure to the benefit of
the parties and their respective heirs, legal representatives, successors and
assigns. The parties shall defend, indemnify and hold the other parties harmless
from any claim or action brought by any third party related to this Agreement or
any claim or matter released herein.
12. VOLUNTARY AGREEMENT. This Agreement in all respects has
been voluntarily and knowingly executed by the parties after each party has had
the opportunity to review it with their respective legal counsel. All parties
have participated in the drafting of this Agreement. Accordingly, no rule of
construction shall apply against any party or in favor of any party, and any
uncertainty or ambiguity shall not be interpreted against any party and in favor
of another.
13. ACKNOWLEDGMENT. ▇▇▇▇▇▇ acknowledges that he has been given
a reasonable period of time to study this Agreement before signing it. ▇▇▇▇▇▇
certifies that he has fully read, has received an explanation of, and completely
understands the terms, nature and effect of this Agreement. ▇▇▇▇▇▇ further
acknowledges that he is executing this Agreement freely, knowingly and
voluntarily. In executing this Agreement, ▇▇▇▇▇▇ does not rely on any
inducements, promises or representations by the Company or any person other than
the terms and conditions of this Agreement.
14. NO RELIANCE. The parties acknowledge that they have read
this Agreement, that they are relying solely upon the contents of this
Agreement, and are not relying upon any other representations, warranties, or
inducements whatsoever as an inducement to enter into this Agreement, other than
those referenced herein, and acknowledge that no representations, warranties, or
covenants have been made which are not referenced in this Agreement.
15. NO WAIVER. Failure to insist on compliance with any term,
covenant, or condition contained in this Agreement shall not be deemed a waiver
of that term, covenant, or condition, nor shall any waiver or relinquishment of
any right or power contained in this Agreement at any one time or more times be
deemed a waiver or relinquishment of any right or power at any other time or
times.
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16. GOVERNING LAW. This Agreement shall be construed and
enforced in accordance with the laws of the State of California.
17. ARBITRATION AND WAIVER OF JURY TRIAL. Any and all disputes
which may arise from or relate to this Agreement or the employment of ▇▇▇▇▇▇ or
the termination of such employment shall be subject to final and binding
arbitration to be held in Los Angeles, California. All such disputes shall be
arbitrated under the auspices and rules of the Judicial Arbitration and
Mediation Service, Inc./EndDispute, or if it is no longer in existence, under
the auspices and rules of the American Arbitration Association pursuant to its
Expedited Labor Arbitration Rules in effect at the time the claim or dispute
arises. There shall be one arbitrator, who shall be a retired superior court or
federal court judge. The arbitrator shall have the authority only to enforce the
legal and contractual rights of the parties and shall not add to, modify,
disregard or refuse to enforce any contractual provision. The arbitrator shall
have no right, power or jurisdiction to award ▇▇▇▇▇▇ any punitive or exemplary
damages of any kind. DAY AND THE COMPANIES RECOGNIZE AND AGREE THAT BY ENTERING
INTO THIS AGREEMENT, THEY ARE WAIVING ANY AND ALL RIGHTS TO A TRIAL BY JURY.
Notwithstanding any of the foregoing, this provision for arbitration shall not
prevent the Company, or any of them, from seeking injunctive relief for
violation of the provisions of Sections 4 and 6 hereof. The prevailing party in
any arbitration or in any action or proceeding involving injunctive relief shall
be entitled to recover her or its reasonable attorneys' fees and costs.
18. SEVERABILITY. Should any portion, word, clause, phrase,
sentence or paragraph of this Agreement be declared void or unenforceable, such
portion shall be considered independent of and severable from the remainder, the
validity of which shall remain unaffected.
19. TITLES AND CAPTIONS. Paragraph titles or captions
contained in this Agreement are inserted only as a matter of convenience and for
reference and in no way define, limit, extend or describe the scope of this
Agreement or the intent of any provisions hereof.
20. COUNTERPARTS. This Agreement may be executed in
counterparts, and when each party has signed and delivered at least one such
counterpart, each counterpart shall be deemed an original, and, when taken
together with the other signed counterparts, shall constitute one agreement,
which shall be binding and effective as to the parties. This Agreement shall be
effective on the date last executed by one of the parties hereto if so executed
in counterparts.
21. FURTHER ASSURANCES; COOPERATION IN LITIGATION. ▇▇▇▇▇▇
hereby agrees that from time to time at the reasonable request of the Company,
▇▇▇▇▇▇ will execute and deliver such additional instruments and take such other
actions as the Company may reasonably require to carry out the terms of this
Agreement. In addition, ▇▇▇▇▇▇ agrees that, without further consideration, he
will from time to time assist the Company with its reasonable requests and
inquiries regarding the historical business and operations of the Company of
which ▇▇▇▇▇▇ is aware and of which he had dealt with in a substantive manner. In
connection with the foregoing, ▇▇▇▇▇▇ agrees to use his best efforts to locate
and deliver to the Company all of the Company's files and documents in his
possession to the Company's offices in Encino, California, as soon as reasonably
possible following the Termination Date and to deliver the Company's PC
containing its computer files.
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22. REPRESENTATION BY COUNSEL. ▇▇▇▇▇▇ agrees and acknowledges
that Jeffer, Mangels, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, LLP ("JMBM") has served as counsel to
the Company, and not as counsel to ▇▇▇▇▇▇, in connection with the negotiation
and execution of this Agreement and the transactions contemplated hereby. ▇▇▇▇▇▇
further acknowledges that JMBM has advised him to seek his own separate counsel
in connection with the negotiation and execution of this Agreement and the
transactions contemplated hereby.
IN WITNESS WHEREOF, the parties have executed this Agreement on the
date first set forth above.
AVENUE GROUP, INC.
By /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
----------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
Title: President and Chief Executive Officer
/s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
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▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
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