CONFIDENTIAL SEPARATION AGREEMENT,
WAIVER AND RELEASE OF CLAIMS
This Confidential Separation Agreement, Waiver and Release of Claims
("Agreement") is entered into on this 16th day of July, 1996, by and between
XXXXXXXX XXXXXXX XXXXXXXXXX, residing at 0000 Xxxxxxx Xxxx, Xxxxx Xxxxx,
Xxxxxxx 00000 (hereinafter "Waserstein") and USA Finance, Inc. formerly known as
LMI Acquisition Corp., a Delaware corporation, with its principal place of
business located at USA Finance, Inc., 0000 Xxxx Xxxxxx Xxxxxxxxx, Xxxxx 000,
Xxxxx, Xxxxxxx 00000 and its subsidiaries, National-Wide Premium Finance Corp.
and Gold Coast Finance, Inc.(hereinafter collectively referred to as "Company").
WHEREAS, Waserstein was formerly the owner of National-Wide Premium
Finance Company (a Florida corporation) who sold its stock to the Company
effective as of a closing that occurred on March 28, l996 (the "Closing") and
WHEREAS, in conjunction with the Closing, Waserstein entered into an
employment agreement to be Executive Vice President of Company, and
WHEREAS, by mutual agreement of the parties hereto, Waserstein has
separated from employment with Company effective with the date of this
Agreement, and
WHEREAS, the parties to this agreement desire to reach a mutually
satisfactory understanding and to fully and finally resolve any and all existing
controversies and claims between them:
NOW, THEREFORE, with the intent to be legally bound, and in
consideration for the provisions and mutual undertakings herein contained, plus
other good and valuable consideration, the parties agree as follows:
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1. The above recitals, including the recital of consideration, are true
and correct and are incorporated into this agreement.
2. Waserstein's employment will terminate effective with the close of
business on the date of this Agreement. At that time, Waserstein, shall resign
her position as Executive Vice President of Company. Waserstein acknowledges
that effective on the date of this Agreement, she has resigned from all
corporate offices and committee positions she holds with Company and any parent,
subsidiary or affiliate, including her position as a Director of the Company.
3. Waserstein shall receive, as consideration for the promises
contained in this agreement, a severance payment of $1,923.07 per week, payable
on each of the normal weekly payroll dates of National-Wide Premium Finance
Company commencing on the day following this Agreement for the period through
and including December 31, 1996. Waserstein shall receive fully paid medical
benefits on the same basis as which she participated while an employee of
Company. Such benefits shall continue through December 31, 1996, at which time
Waserstein shall be advised of her rights to continue said medical insurance
benefits pursuant to the Consolidated Omnibus Budget Reconciliation Act (COBRA).
In the event the Company fails to make timely payment to Waserstein, she shall
provide written notice to the Company of such failure, and if all payments owed
are not made current within five (5) business days, all future payments owed to
Waserstein shall immediately be due and payable to her.
4.a Upon the execution of this Agreement, the Company shall grant to
Waserstein as a severance payment twenty thousand 20,000 additional shares of
its Common Stock (the "Additional Shares") subject to the terms of the Investor
Representation Certificate attached hereto and made a part hereof as
Exhibit "A".
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4.b Waserstein acknowledges that as of the date of this Agreement she
is the beneficial and record owner of shares of the Company's Series B $3.00
Convertible Preferred Stock (the "Series B Preferred Stock") which convert into
66,667 shares of the Company's common stock pursuant to the terms of a
Certificate of Designation of Series B $3.00 Convertible Preferred Stock of LMI
Acquisition Corp. filed with the State of Delaware, Secretary of State on March
20, 1996 (the "Certificate of Designation") and Common Stock Purchase Options to
purchase 100,000 shares of the Company's Common Stock (the "Options"). The
Options were originally granted to Waserstein and vested under her Employment
Agreement with the Company, and in view of the termination of such Employment
Agreement, shall hereafter be subject to the terms and conditions of an Option
Agreement attached hereto and made a part hereof as Exhibit "B". With the
exception of the Additional Shares, Series B Preferred Stock and Options,
Waserstein represents and warrants that she neither owns nor has the right to
acquire any additional securities of the Company from the Company or from any
third party.
4.c The Company is in the process of preparing a Registration Statement
on Form SB-2 (the "Registration Statement") to file with the Securities and
Exchange Commission for the purpose of, among other things, registering for
resale purposes shares held by certain existing security holders of the Company.
The Company has agreed to grant registration rights to Waserstein in connection
with the Series B Preferred Stock, Additional Shares and Options in the manner
set forth hereafter:
i. The Company has agreed to include the resale of the shares
issuable upon the conversion of the Series B Preferred Stock (the
"Shares") and the Additional Shares in accordance with the Registration
Statement identified above. The Company's obligation in this regard
shall extend only to the inclusion of the Shares and the Additional
Shares in a Registration
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Statement filed under the Securities Act of 1933, as amended (the
"Act") with the Securities and Exchange Commission ("SEC"). The Company
shall have no obligation to assure the terms and conditions of
distribution, to obtain a commitment from an underwriter relative to
the sale of the Shares and Additional Shares or to otherwise assume any
responsibility for the manner, price or terms of the distribution or
sale of the Shares. The Company will, before December 31, l996, file
the Registration Statement which will include the Shares and Additional
Shares and use its best efforts to have it declared effective as soon
thereafter as is practicable, and to keep such Registration Statement
continuously effective for the period of distribution during which a
Prospectus is deemed "effective" by Section 10(a)(3) of the Act.
ii. The Company has also agreed to no later than November 15,
1997, file an additional Registration Statement (the "Additional
Registration Statement") for the purpose of facilitating the public
resale of the Shares issuable upon the exercise of the Options (the
"Option Shares"), provided that Waserstein has not been determined by
an Arbitrator appointed by and acting under the American Arbitration
Association's Rules for Expedited Arbitration to have engaged in a
material breach of any obligations or covenants to the Company
contained in Paragraphs 5, 7 & 8. The Company shall have no obligation
to assure the terms and conditions of distribution, to obtain a
commitment from an underwriter relative to the sale of the Option
Shares or to otherwise assume any responsibility for the manner, price,
or terms of the distribution or sale of the Option Shares. The Company
will file the Additional Registration Statement in the time identified
above and use its best efforts have it declared effective as soon
thereafter as is practicable, and to keep such Additional Registration
Statement continuously effective for the period of distribution during
which a Prospectus is deemed "effective" by Section 10(a)(3) of the
Act. In the event the Company fails to file the Additional Registration
Statement on a timely basis
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and upon notification to that effect from Waserstein ("the Notice"),
which notification must be shipped via overnight delivery via Fedex or
other overnight delivery service for next day delivery to the Company
no later than December 15, 1997, the Company agrees to repurchase the
Option Shares from Waserstein. If Waserstein complies with the above
requirements relative to providing the Notice, Waserstein shall not be
obligated to pay to the Company the Exercise Price and the Company
agrees to repurchase Waserstein's Option Shares by paying her the
difference between a price equal to the average closing price for the
past thirty (30) trading days of the Company's common stock on
whichever market or exchange such shares principally traded, minus the
exercise price associated with such options.
iii. All expenses incurred by the Company in connection with
preparing and filing the Registration Statement and Additional
Registration Statement shall be borne by the Company. Fees and expenses
associated with the sale of the Shares, Additional Shares and Option
Shares shall be borne by Waserstein.
iv. In connection with each Registration Statement and
Additional Registration Statement filed hereunder, Waserstein will
furnish to the Company in writing such information with respect to the
securities held by such seller, and the proposed distribution by her as
shall be reasonably requested by the Company in order to assure
compliance with federal and applicable state securities laws, as a
condition precedent to including such seller's Shares, Additional
Shares and Option Shares in the Registration Statement and Additional
Registration Statement. Waserstein also shall agree to promptly notify
the Company of any changes in such information included in the
Registration Statement and Additional Registration Statement or
prospectus as a result of which there is an untrue statement of
material fact or an omission to state any material fact required or
necessary to be stated therein in order to make the statements
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contained therein not materially misleading in light of the
circumstances then existing. Waserstein shall indemnify and hold
harmless the Company from and against any and all losses, claims,
damages and liabilities caused by any untrue statement of a material
fact contained in any registration statement or prospectus or any
omission to state in such registration statement or prospectus a
material fact that is required to be stated therein or that is
necessary to make any statement contained therein not materially
misleading in light of the circumstances under which they were made,
that is based upon information furnished to the Company by Waserstein
or on Waserstein's behalf for use in such registration statement or
prospectus.
v. In connection with each registration pursuant to this
Agreement, Waserstein agrees not to effect sales thereof until notified
by the Company of the effectiveness of the Registration Statement and
Additional Registration Statement, and thereafter will suspend such
sales after receipt of telegraphic or written notice from the Company
to suspend sales to permit the Company to correct or update a
prospectus. At the end of any period during which the Company is
obligated to keep a registration statement current, Waserstein shall
discontinue sales of Shares, Additional Shares and Option Shares
pursuant to such registration statement upon receipt of notice from the
Company of its intention to remove from registration the Shares,
Additional Shares or Option Shares covered by such Registration
Statement which remain unsold, and Waserstein shall notify the Company
of the number of shares registered which remain unsold immediately upon
receipt of such notice from the Company.
4.d Notwithstanding the filing of the Registration Statement and
Additional Registration Statement in accordance with the terms of subparagraph
4(c)(i) and(ii) above, Waserstein agrees not to sell, dispose, encumber or
otherwise transfer any of the Shares, Additional Shares or Option Shares except
in accordance with the following schedule:
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(i) Twenty-five (25%) percent of the Shares may be transferred, sold or
otherwise disposed of (a "Sale Transaction") no earlier than three (3) months
following the effective date of the Registration Statement; (ii) an additional
twenty-five (25%) percent of the Shares may be subject to a Sale Transaction no
earlier than six (6) months following the effective date of the Registration
Statement; and (iii) an additional twenty-five percent(25%)of the Shares may be
subject to a Sale Transaction no earlier than nine(9) months following the
effective date of the Registration Statement; (iv) the remainder of the Shares
may be subject to a Sales Transaction no earlier than twelve (12) months
following the effective date of the Registration Statement; and (v) none of the
Additional Shares may be subject to a Sale Transaction until six (6) months
after the effective date of the Registration Statement. In addition to the above
restrictions, in the event that Waserstein intends to sell, transfer, encumber
or otherwise dispose of more than Three Thousand (3,000) of the Shares of common
stock of the company in any month, subject always to the volume limitations and
holding periods set forth above, Waserstein shall provide the Company with
written notice of her intent to do so at least twenty (20) days prior to any
such intended sale, transfer or disposition.
The securities represented by the Shares, Additional Shares and Option
Shares will be imprinted with the legend in form and substance
substantially as follows:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THESE
SECURITIES MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF REGISTRATION, OR THE AVAILABILITY OF AN EXEMPTION FROM
REGISTRATION, UNDER THE SECURITIES ACT OF 1933, AS AMENDED, BASED ON AN
OPINION LETTER OF COUNSEL, SUCH OPINION AND SUCH COUNSEL TO BE
SATISFACTORY TO THE COMPANY OR A NO ACTION LETTER FROM THE SECURITIES
AND EXCHANGE
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COMMISSION. THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE ALSO
SUBJECT TO THE PROVISIONS OF AN AGREEMENT DATED AS OF ( ) BETWEEN THE
COMPANY AND THE HOLDER HEREOF AND MAY NOT BE SOLD OR OTHERWISE
TRANSFERRED EXCEPT IN ACCORDANCE THEREWITH. A COPY OF SAID AGREEMENT IS
ON FILE AT THE OFFICES OF THE CORPORATE SECRETARY OF THE COMPANY."
4.e For a period of two years following the date of this Agreement,
Waserstein agrees to the following:
i. Except for the Option Shares, or as otherwise provided in
this Agreement, she shall not acquire, announce an intention to
acquire, offer or propose to acquire, or agree to acquire, directly or
indirectly, by purchase or otherwise, beneficial or record ownership of
any securities of the Company, or direct or indirect rights to options
to acquire (through purchase, exchange, conversion or otherwise) any
securities of the Company, which would individually, or in the
aggregate, result in Waserstein becoming the beneficial owner of 10% or
more of the Company's securities, without the prior written consent of
the Company;
ii. She shall vote all voting securities owned by her in
connection with all matters to be voted on by the holders of voting
securities, in accordance with the recommendation of the majority of
the Board of Directors. As a holder of voting securities, she shall be
present, in person or by proxy, at all meetings of shareholders of the
Company so that all voting securities beneficially owned by her may be
counted for the purpose of determining the presence of a quorum at such
meetings;
iii. She shall not solicit proxies or become a "participant"
in a "solicitation" (as such terms are defined in Regulation 14A under
the Securities Exchange Act of 1934) in
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opposition to the recommendation of the majority of the Board of
Directors of the Company with respect to any matter; or
iv. She shall not join a partnership, limited partnership,
limited liability company, limited liability partnership, syndicate or
other group or otherwise act in concert with any person, for the
purpose of acquiring, holding, voting or disposing of voting
securities, or otherwise become a "person" within the meaning of
Section 13(d)(3) of the Securities Exchange Act of 1934.
5. In consideration for the severance payments, continued medical
insurance benefits and Additional Shares provided in this agreement by Company
to Waserstein, the adequacy of which she acknowledges, Waserstein, on behalf of
herself, her family, her heirs, representatives, estate, successors and assigns,
does hereby irrevocably and unconditionally remise, release and forever
discharge Company, and its parents, subsidiaries, affiliates, directors,
officers, agents, employees and any employee benefit plans sponsored by Company
or its subsidiaries or affiliates (hereinafter severally and collective referred
to as "Releasees") from any and all liabilities, demands, acts, causes of
action, damages or claims, known or unknown, that Waserstein has or may have
against any of the Releasees for any actions up to and including the date of
this Agreement, and the continuing effects thereof, being the intention of
Waserstein to affect a general release of all such claims except those relative
to any alleged breach of this Agreement by Company. This release pertains but is
not limited to any and all claims which were asserted, or could have been
asserted by Waserstein or on her behalf, arising out of her employment with the
Company or any subsidiary or affiliate, or termination thereof, including but
not limited to, claims arising under federal, state, and/or local laws
prohibiting employment discrimination, including but not limited to Title VII of
the Civil Rights Act of 1964, as amended; the Florida Civil Rights Act;
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the Metropolitan Dade County Ordinance on Human Relations; the Employee
Retirement Income Security Act of 1974; the Americans with Disabilities Act; and
all state or federal common law or statutory law governing contract, torts and
any claims for attorneys' fees under these acts or any other law.
6. Company, its parents, subsidiaries, affiliates, directors, officers,
agents and employees do hereby irrevocably and unconditionally remise, release
and forever discharge Waserstein from any and all liabilities, demands, acts,
causes of action, damages or claims, known or unknown, that they have or may
have against Waserstein for any and all liabilities, demands, acts, causes of
action, damages of claims which the Company may have against Waserstein for any
actions up to and including the date of this Agreement, and the continuing
effects thereof, it being the intention of the Company to affect a general
release of all such claims except those relating to any alleged breach of
Waserstein's obligations under this Agreement, including but not limited to
those contained in paragraphs 7, 8 and 9 and Waserstein's obligations under
section 7.1 of the Stock Purchase Agreement dated May 5, l995 between Waserstein
and the Company. Company will also indemnify and hold Waserstein harmless from
any and all losses she may suffer in connection with her guarantee under the
Premium Finance Contract Purchase and Service Agreement with First Western Bank
of August 11, 1995, as amended to date.
7. Waserstein acknowledges that during her association with Company she
has been brought into contact with business plans, methods of operation,
advertising, sales and marketing materials, marketing strategies, records,
product development plans, strategic plans, trade secrets, customer sales
analysis, invoices, price list information or samples (collectively referred to
as "confidential information") regarding Company which have been disclosed to
her and known to her as a consequence of her employment relationship with
Company. Waserstein agrees that she
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shall not in any manner, directly or indirectly, use, for her benefit or the
benefit of others, any confidential information nor will she disclose to any
third party whatsoever, or use for any purpose, any such confidential
information. Further, Waserstein agrees that she will not disparage or comment
negatively upon the Company, its parent, subsidiaries or affiliates, or any
officer, employee, shareholder, director or agent of any of these organizations.
Nothing contained in this paragraph is intended to restrict or limit
Waserstein's use of general knowledge or information in the public domain, or
knowledge or information she possessed prior to her employment with Company.
8. For a period of one (1) year from the date of this Agreement,
Waserstein shall not under any circumstances, directly or indirectly solicit any
employee of the Company, or indirectly induce or attempt to influence any
employee of Company to leave the employ of the Company. For a period of one
(1) year from the date of this Agreement, Waserstein shall not under any
circumstances, directly or indirectly, solicit any customers of the Company to
do business with any other business involved in insurance premium financing.
Waserstein further acknowledges that while employed with the Company, she was
exposed to trade secrets, valuable confidential business information, had
substantial relationships with specific existing and prospective customers of
the Company, and that in order to protect the legitimate business interests of
the Company, it is necessary for her to enter into the following restrictive
covenant: Waserstein agrees that for a period until and including December 31,
1996, Waserstein will not become engaged in either as a principal, partner,
director, officer, agent, employee, consultant, or independent contractor,
perform any services for remuneration or otherwise be financially interested in
any business located within the United States that is primarily involved in
insurance premium financing. However, nothing contained in this Agreement shall
prevent Waserstein from
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holding. for investment no more than five (5%) percent of any class of equity
securities of a company whose securities are traded on a national security
exchange. Waserstein warrants and represents that based upon her prior
experience with the Company and in the financial services industry the
restrictive covenant which she has entered into is reasonably necessary to
protect the legitimate business interests of the Company and that as of the date
in which she has entered into this Agreement she has not done any acts nor has
she any current intentions and has made no plans to do anything that is
proscribed by the non-competition and non-solicitation provisions contained
above.
9. Waserstein agrees that the terms set forth in this Agreement are
confidential and that she is not to disclose the terms and amounts paid to her
under this Agreement to any person with the exception of her attorneys,
accountants and immediate family members.
10. Waserstein acknowledges that a breach of or a violation of the
covenants contained in Paragraphs 7, 8 and 9 above will have an irreparable,
material and adverse effect upon the Company, that damages arising from any such
breach or violation may be difficult to ascertain and that the Company will lack
an adequate remedy at law. Therefore, Waserstein acknowledges that the Company
will be entitled to obtain an injunction from any court having jurisdiction over
her and the Company to enjoin Waserstein from any further violation of this
Agreement and to enforce her specific performance of the covenants contained
herein. In the event of a proven breach, Waserstein agrees to the entry of such
an injunction or order for specific performance and to pay all reasonable
attorneys' fees and costs incurred by the Company in obtaining said injunction.
11. In the event Waserstein breaches or files any lawsuit or
administrative action contrary to the release contained in Paragraph 5, such
conduct will constitute a breach of this
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Agreement, thereby terminating any further duty of Company to make the severance
payments and continuation of insurance as set forth in Paragraph 3 above, and
shall obligate Waserstein to repay any monies paid to her (including all
severance payments) and the value of any fringe benefits paid to her under this
Agreement.
12. Waserstein agrees to make herself readily available upon reasonable
notice to consult with and assist the Company in matters requiring her
experience and expertise or to answer questions regarding matters occurring
during her tenure at the Company. Waserstein agrees that she will, through
December 31, 1996, perform such consulting work without additional compensation.
The Company agrees that such consulting work shall not exceed more than
forty-two hours per month.
13. Waserstein acknowledges and agrees that the terms of this Agreement
were reached after extensive negotiations with her attorney, Xxxxxxx Xxxxxxxxxx,
that she has had a full and complete opportunity to discuss this Agreement with
an attorney of her own choosing, that in executing this Agreement she does not
rely and has not relied upon any statement or representation made by or on
behalf of the Company by any of its officers, agents, employees or attorneys,
and that she is acting on her own free will. Waserstein further acknowledges and
agrees that she has entered into this Release knowingly and voluntarily,
intending to be legally bound, having had a full and compete opportunity to
consider the terms thereof.
14. Waserstein acknowledges that the amounts, benefits and
representations set forth in this Agreement constitute a full and complete
satisfaction of any and all claims by her of any kind and nature whatsoever from
the Company or any parent, affiliate or subsidiary, including but not limited to
any and all agreements or arrangements entered into in conjunction with or
related to the Closing, and that neither the Company nor any parent, affiliate,
subsidiary or successor will
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be obligated in any way to provide her with future employment, compensation,
benefits stock rights or stock options other than those specifically provided
herein.
15. If any provision of this Agreement is construed to be invalid,
illegal or unenforceable in any respect, the remainder of the Agreement shall
not be effected, and the remaining provisions of this Agreement shall be given
full force and effect without regard to the invalid, illegal or unenforceable
portions.
16. This Agreement shall be governed in all respects by the laws of the
State of Florida.
17. In any action for breach of this Agreement, the prevailing party
shall be entitled to recover its reasonable attorney's fees and costs.
18. The Company Agrees and Covenants that as of the date of this
Agreement, the Company has no knowledge that Waserstein has breached any of her
obligations under Paragraphs 5, 7 and 8 of this Agreement.
IN WITNESS WHEREOF, Waserstein and the Company have executed this
Agreement intending to be legally bound hereby.
WARNING: THIS DOCUMENT CONTAINS A RELEASE OF ALL CLAIMS KNOWN AND UNKNOWN.
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Witness:
/s/ Bechrr Xxxxxx /s/ Xxxxxxxx Xxxxxxx Xxxxxxxxxx
---------------------------------- -----------------------------------------
XXXXXXXX XXXXXXX XXXXXXXXXX
Date: July 16, 1996
----------------------------------
Attest: /s/ Xxxx Xxx Barimo USA FINANCE, INC.
----------------------------------
By: /s/ Xxxxxxx Xxxxxxxxxx
-------------------------------------
Signature Xxxxxxx Xxxxxxxxxx
-------------------------------
Name: Xxxxxxx Xxxxxxxxxx
-----------------------------------
Title: CEO
----------------------------------
Date: 7-17-96
----------------------------------
Attest: /s/ Xxxx Xxx Barimo NATIONAL-WIDE PREMIUM FINANCE CORP.
----------------------------------
By: /s/
---------------------------------
Signature /s/ Xxxxxxx X. Xxxxxxxxxx,
/s/ Xxxxxxxx Xxxxxxx Xxxxxxxxxx
-------------------------------
Name: Xxxxxxx X. Xxxxxxxxxx,
Xxxxxxxx Xxxxxxx Xxxxxxxxxx
-----------------------------------
Title:
----------------------------------
Date: 7-17-96
----------------------------------
Attest: /s/ Xxxx Xxx Xxxxxx GOLD COAST FINANCE, INC.
----------------------------------
By: /s/ Xxxxxx Xxxxxxxx
-------------------------------------
Signature Xxxxxx Xxxxxxxx
-------------------------------
Name:
-----------------------------------
Title: President
----------------------------------
Date: 7-17-96
----------------------------------
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