Exhibit 10.7
SEVERANCE AGREEMENT AND MUTUAL RELEASE
THIS SEVERANCE AGREEMENT AND MUTUAL RELEASE (the "Agreement") is executed and
entered into this _____ day of __________, 2000 by and between Douglas Cole
("Cole"), and NetAmerica.com Corporation, a Delaware corporation
("NetAmerica.com" or the "Company").
R E C I T A L S
WHEREAS, on or about April 1, 1999, Cole and the Company entered into
an employment agreement, attached hereto as Attachment A (the "Employment
Agreement");
WHEREAS, Cole is also a director of the Company;
WHEREAS, the parties mutually agree that it is in their respective best
interests to bring the employment relationship between Cole and the Company to a
conclusion;
WHEREAS, the Company would like Cole to provide consulting services
during a transition period and remain as a director of the Company; and
WHEREAS, the parties intend to provide for such employment termination
and transition and other services in this Agreement.
NOW THEREFORE, in consideration of the mutual covenants and promises
contained herein and other good and valuable consideration, receipt of which is
hereby acknowledged , the parties hereto covenant and agree as follows:
1. Termination of Employment. As of February 7, 2000, the parties
mutually agree that Cole's employment with the Company ceased. Furthermore, Cole
delivered a written resignation as of such date (the "Resignation") from his
position as an officer of the Company.
2. Interim Responsibilities During Transition Period. From February 7,
2000 through March 31, 2000 or such later time as the parties agree, Cole
continued or will continue to assume such responsibilities and perform such
tasks as the Board of Directors shall assign.
3. Consulting Services. Upon execution of this Agreement, the Company
hereby retains Cole as a consultant, to advise it with respect to certain
aspects of its business. In connection therewith, Cole hereby agrees to perform
such reasonable and necessary consulting services relating to the restructuring
of NetAmerica.com's business to focus on the operations of its subsidiary,
RateXchange, Inc., as may be requested by the Company and its executive officers
from time to time until May 1, 2000 or such later time as the parties may
mutually agree (the "Consulting Period"). Cole hereby accepts such retention and
shall in good faith perform such services, for and on behalf and in the best
interests of the Company during the Consulting Period. It is agreed that Cole
shall not be required to spend any specific period or periods of time at the
offices or premises of the Company in providing the services hereunder, but will
be available to consult with the Company at mutually convenient times and
places. Cole may provide the services hereunder in person, by telephone,
facsimile, e-mail or other correspondence as he and the Company mutually agree.
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4. Directorship. Cole agrees to continue serving as a director of the
Company for a period of three (3) months or such earlier or later time as the
parties may mutually agree. The Company agrees to pay Cole the standard rate
paid to non-employee directors for each director meeting plus out-of-pocket
expenses.
5. Consideration. In consideration for the covenants and agreements set
forth in Sections 1-4 above, and the parties' mutual releases, on the terms and
conditions of this Agreement, the parties acknowledge and agree as follows:
(a) Until the expiration of the Consulting Period, the Company shall
pay to Cole a consulting fee of $14,000 per month for the consulting services
Cole renders to the Company during the Consulting Period.
(b) Upon execution of this Agreement, the Company agrees to pay Cole
$14,000 per month for six (6) months in severance pay less applicable
withholdings. Each payment will be made by the fifth (5th) day of each month.
Notwithstanding the foregoing, after the Company receives at least $7.5 million
in additional financing, any unpaid severance payments will be paid in a lump
sum payment within ten (10) days of the Company's receipt of such funds.
(c) Cole agrees to comply with Sections 6, 7 and 8 of the Employment
Agreement, which are incorporated herein by reference, pertaining to
Non-Competition, Confidentiality and Remedies. The Non-Competition provision
will be limited to non-competition with the Company's operations on the date of
the execution of this Agreement. All other terms and provisions of the
Employment Agreement shall terminate upon the execution of this Agreement.
(d) Upon execution of this Agreement, the Company agrees to pay the
cost of Cole's health insurance premiums for a period of twelve (12) months.
Each payment will be made by the seventh (7th) day of each month.
(e) Upon execution of this Agreement, the Company agrees to pay Cole a
performance bonus of $115,000 for his services as Chief Executive Officer which
were outside his duties as defined in his Employment Agreement.
(f) Upon execution of this Agreement, the Company agrees to pay all
amounts it owes Cole for unpaid salary, bonuses and/or expenses. The Company
also agrees to issue all options that were approved for Cole by the Board of
Directors prior to the execution of this Agreement.
(g) Cole shall be entitled to keep his current computer and office
equipment.
(h) Within thirty (30) days of the expiration of the Consulting Period,
the Company agrees to register on Form S-8, or on an alternative form to Form
S-8, all shares issuable upon exercise of the options issued under the Company's
1999 or 2000 Stock Option Plans or outside such plans and owned by Cole at the
end of the Consulting Period. The Company agrees to maintain the effectiveness
of this registration for a period of at least one (1) year.
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6. Release of Cole's Claims Against the Company.
(a) Excluding claims for breach or enforcement of this Agreement, Cole
does hereby irrevocably and unconditionally release and forever discharge, for
himself and for his heirs, executors, administrators and assigns, any and all
claims of any nature whatsoever against the Company, its current and former
officers, directors, shareholders, employees, representatives, attorneys and
agents as well as its predecessors, parent companies, subsidiaries, affiliates,
successors and assigns, which Cole has or had against them or any of them
arising out of or by reason of any cause, matter or thing whatsoever existing as
of the date of execution of this Agreement, whether known to the parties at the
time of execution of this Agreement or not including without limitation, any
claims arising out of, or relating in any manner whatsoever to the employment of
Cole by the Company and his separation from the Company. This FULL WAIVER OF ALL
CLAIMS includes, without limitation, any claims, demands, or causes of action
arising out of, or relating in any manner whatsoever to the Civil Rights Act of
1964 and 1991, as amended, the Age Discrimination in Employment Act of 1967, as
amend, the Older Workers Benefit Protections Act, the Fair Labor Standards Act,
the Labor Management Relations Act, the Employee Retirement Income Security Act
of 1974, the Americans with Disabilities Act, or any other applicable federal,
state, or local statute or regulation, or any common law cause of action,
including without limitation, claims for breach of any express or implied
contract, the covenant of good faith and fair dealing, tort, wrongful discharge,
constructive discharge, personal injury, emotional distress, defamation, fraud,
or any claims for attorneys' fees or other costs. Cole further covenants and
agrees that upon being paid the amounts provided for in Section 5, above, the
Company is not further indebted to him in any amount for any reason, including
any fringe benefits or other forms of compensation.
(b) Cole represents and warrants that he has not assigned or subrogated
any of his rights, claims and causes of action, including any claims referenced
in this Agreement, or authorized any other person or entity to assert such claim
or claims on his behalf and he agrees to indemnify and hold harmless the Company
against any assignment of said right, claims and/or causes of action.
(c) Cole represents that he has not filed any complaints or charges
against the Company with any local, state or federal court or agency based upon
events occurring prior to the date of execution of this Agreement. Cole further
represents and agrees that he will not in the future file, instigate or
encourage the filing of any proceeding or lawsuit by any party against the
Company in any local, state or federal court or agency. Cole further represents
and agrees that he shall not in the future cooperate or participate in any such
lawsuit or proceedings except in accordance with this Agreement and as otherwise
required by law. It is understood and agreed that Cole's promises set forth in
this Section 6 are of critical importance to this Agreement. Any breach by Cole
of the provisions of this Section shall be deemed a material breach of this
Agreement.
(d) Cole agrees that he will not disclose, disseminate and/or publicize
any of the terms of this Agreement, any of the factual allegations underlying
any claims the Company or Cole may have against one another, any of the
underlying facts of this Agreement or negotiations regarding this Agreement,
directly or indirectly, specifically or generally, to any person, corporation,
association or governmental agency, except (a) as required by law; (b) to the
extent
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necessary to report income to appropriate taxing authorities; (c) pursuant to
privileged communications; or (d) in response to an order of court or
governmental agency of competent jurisdiction or subpoena issued under proper
authority; provided that notice of receipt of such judicial order, inquiry or
subpoena shall be immediately communicated to the Company, telephonically and
confirmed immediately thereafter in writing, so that the Company will have the
opportunity to intervene and assert what rights it has to nondisclosure prior to
the response to the order, inquiry or subpoena.
7. Release of the Company's Claims Against Cole.
(a) Excluding claims for breach or enforcement of this Agreement, the
Company for itself, its legal representatives, subsidiaries, affiliates, agents,
successors in interest and assigns, irrevocably and unconditionally releases and
forever discharges Cole from any and all claims of any nature whatsoever against
Cole, or his affiliates, agents, employees, attorneys, successors and assigns,
which the Company has or had against Cole arising out of or by reason of any
cause, matter or thing whatsoever existing as of the date of execution of this
Agreement, whether known to the parties at the time of the execution of this
Agreement or not, including without limitation, any claims arising out of, or
relating in any manner whatsoever to the employment of Cole by the Company and
his separation from the Company. The Company acknowledges that this release of
claims specifically includes, but is not limited to, any and all claims for
breach of contract, breach of the covenant of good faith and fair dealing,
intentional or negligent misrepresentation, conspiracy, negligence of any kind,
libel, slander or any other wrongful conduct based upon events occurring prior
to the date of the execution of this Agreement.
(b) The Company represents and warrants that it has not assigned or
subrogated any of its rights, claims and causes of action including any claims
referenced in this Agreement or authorized any other person or entity to assert
such claim or claims on its behalf and agrees to indemnify and hold harmless
Cole against any assignment of said rights, claims and/or causes of action.
(c) The Company represents that it has not filed any complaints or
charges against Cole with any local, state or federal court or agency based upon
the events occurring prior to the date of execution of this Agreement. The
Company further represents and agrees that it will not in the future file,
instigate or encourage the filing of any proceeding or lawsuit by any party
against Cole in any local, state or federal court or agency. The Company further
represents and agrees that it shall not in the future cooperate or participate
in any such lawsuit or proceeding except in accordance with this Agreement and
as otherwise required by law. It is understood and agreed that the Company's
promises as set forth in this Section 7 are of critical importance to this
Agreement. Any breach by the Company of the provisions of this Section shall be
deemed a material breach of this Agreement.
(d) The Company agrees that it will not disclose, disseminate and/or
publicize any of the terms of this Agreement, any of the factual allegations
underlying any claims the Company or Cole may have against one another, any of
the underlying facts of this Agreement or negotiations regarding this Agreement,
directly or indirectly, specifically or generally, to any person, corporation,
association or governmental agency, except (a) as required by law; (b) to the
extent necessary to report income to appropriate taxing authorities; or (c) in
response to an order
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of a court or governmental agency of competent jurisdiction or subpoena issued
under proper authority; provided that notice of receipt of such judicial order,
inquiry or subpoena shall be immediately communicated to Cole, telephonically
and confirmed immediately thereafter in writing, so that Cole will have the
opportunity to intervene and assert what rights he has to nondisclosure prior to
the response to the order, inquiry or subpoena.
8. Tax Obligations. It is understood and agreed that Cole is liable for
all tax obligations, if any, with respect to the payments and sums set forth in
Section 4 or 5, above. The Company makes no warranty as to any tax consequences
of such payments, and a determination of the tax consequences of such payments
are the sole responsibility of Cole.
9. Independent Contractor Status. With respect to Section 3 above, it
is expressly understood and agreed that Cole is an independent contractor and is
not in any manner an agent or employee of the Company (or any of its
subsidiaries), nor is Cole authorized or empowered to conduct business under the
name of, or for the account of, the Company (or any of its subsidiaries) or to
incur obligations of any kind, express or implied, on behalf of the Company, or
to make any promise, warranty or representation on behalf of the Company (or any
of its subsidiaries) with respect to any of its or their products or services.
10. Indemnification. With respect to Sections 2, 3 and 4 above, Cole
shall indemnify the Company from and against any and all expenses (including
attorneys' fees), judgments, fines, claims, causes of action, liabilities and
other amounts paid (whether in settlement or otherwise actually and reasonably
incurred) by the Company in connection with such action, suit or proceeding if
(i) the Company was made a part to any action, suit or proceeding by reason of
the fact that Cole rendered advice or services pursuant to this Agreement, and
(ii) Cole did not act in good faith and in a manner reasonably believed by Bole
to be in or not opposed to the interests of the Company, and, with respect to
any criminal action or proceeding, did not reasonably believe his conduct was
lawful.
11. Survival of Representations, Etc. All representations, warranties,
and agreements made herein shall survive for a period of five (5) years
following execution of this Agreement.
12. Twenty-One Day Consideration Period. Cole acknowledges that he has
been allowed twenty-one (21) days to consider this Agreement and the releases
and waivers contained herein. Cole further acknowledges that he has been advised
to consult with counsel and that he has consulted with counsel regarding this
Agreement.
13. Seven Day Revocation Period. The parties agree that Cole shall have
a period of seven (7) days following the execution of this Agreement in which to
revoke the Agreement and that the Agreement shall not become effective or
enforceable until the revocation period has expired (See Attachment B).
14. Civil Code Section 1542. Each party expressly waives all rights
under Section 1542 of the Civil Code of the State of California, which each
party understands provides as follows:
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A general release does not extend to claims which the creditor
does not know or suspect to exist in his favor a the time of
executing the release, which if known by him must have
materially affected his settlement with the debtor.
15. Miscellaneous.
(a) Binding Effect; Assignment. This Agreement shall inure to the
benefit of and be binding upon the parties hereto, their respective legal
representatives and successors. This Agreement may not be assigned.
(b) Further Assurances; Cooperation. Each party shall, upon reasonable
request by the other party, execute and deliver any additional documents
necessary or desirable to complete the transactions contemplated by this
Agreement, pursuant to and in the manner contemplated by this Agreement.
(c) Entire Agreement. This Agreement constitutes the entire agreement
between the parties hereto and supersedes all prior arrangements, understandings
and agreements, oral or written, between the parties hereto with respect to the
subject matter hereof.
(d) Dispute Resolution. Except as otherwise expressly provided in this
Agreement, any civil claim which arises out of or relates in any way to this
Agreement shall be settled by binding and exclusive arbitration in California,
in accordance with the following terms and procedures:
(i) The party with a civil claim must notify the other party
in writing by certified mail within the times set forth by statute for filing a
civil claim of its desire to have the claim resolved by arbitration.
(ii) Upon notice of a timely civil claim, the parties will
agree upon an arbitrator or, if unable to agree, will request a list from the
Federal Mediation and Conciliation Service from which the parties will alternate
strikes until only one name remains. The last remaining name will be the
arbitrator.
(iii) The arbitrator shall have no authority to add to,
subtract from, or otherwise modify the terms of this Agreement or to make awards
beyond those provided for by the statute or other cause of action under which
the claim arises.
(iv) Any party to the arbitration may be represented by
counsel. All decisions of the arbitrator made in accordance with this policy
shall be final and conclusively binding upon the parties. The parties agree that
the arbitrator's award may be entered as a judgment by any court of competent
jurisdiction, unless the award is vacated, modified or corrected.
(i) Issues of procedure, arbitrability, appeal, or
confirmation, vacation or correction of award shall be governed by the Federal
Arbitration Action, 9 U.S.C. ss.ss.1-16.
(e) Attorney Fees. In any action or proceeding arising out of or
related to this Agreement, the prevailing party shall be entitled to its
reasonable attorney fees and related costs,
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including fees and costs incurred prior to formal initiation of any action or
proceeding, and including fees and costs incurred for collecting or attempting
to collect any judgment or award.
(f) Amendments and Waivers. This Agreement may not be modified or
amended except by an instrument or instruments in writing signed by the party
against whom enforcement of any such modification or amendment is sought. Cole
may, by an instrument in writing, waive compliance by the Company with any term
or provision of this Agreement on the part of the Company to be performed or
complied with. The Company may, by an instrument in writing, waive compliance by
Cole, with any term or provision of this Agreement on the part of Cole to be
performed or complied with. Any waiver of a breach of any term or provision of
this Agreement shall not be construed as a waiver of any subsequent breach.
(g) Headings: Severability. The headings contained in this Agreement
are for convenience of reference only and shall not affect the interpretation or
construction hereof. Any term or provision of this Agreement which is invalid or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such invalidity or unenforceability without rendering invalid
or unenforceable the remaining terms and provisions of this Agreement or
affecting the validity or enforceability of any of the terms or provisions of
this Agreement in any other jurisdiction. If any provision of this Agreement is
so broad as to be unenforceable, such provision shall be interpreted to be only
so broad as is enforceable.
(h) Jurisdiction. This Agreement shall be governed in all respects,
whether as to validity, construction, capacity, performance, or otherwise, by
the laws of the State of California. The parties to this Agreement hereby submit
to the jurisdiction of the courts of the State of California.
(i) Voluntary Agreement. This Agreement is freely entered into by the
undersigned parties upon advice of counsel.
(j) Agreement not an Admission. The parties hereby acknowledge that
neither this Agreement nor the payments made hereunder nor the acceptance of the
same, may be treated as an admission of any legal responsibility, liability,
wrongdoing or fault of any kind whatsoever. Such responsibility, liability,
wrongdoing and fault being expressly denied.
(k) Execution in Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original and all of which shall
be deemed to be one and the same instrument.
(l) Construction. It is agreed and understood that the general rule
that "ambiguities are to be construed against the drafter" shall not apply to
this Agreement. The parties agree that this Agreement is a part of negotiation
and was drafted by all parties. In the event any language of this Agreement is
found to be ambiguous, each party shall have an opportunity to present evidence
as to the actual intent of the parties with respect to any such ambiguous
language.
(m) Amendments and Modifications. Any amendment or modification of this
Agreement must be in writing and signed by each party.
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THE SIGNATORIES HAVE CAREFULLY READ THIS ENTIRE
AGREEMENT. ITS CONTENTS HAVE BEEN FULLY EXPLAINED BY
THE RESPECTIVE ATTORNEYS. THE SIGNATORIES FULLY
UNDERSTAND THE FINAL AND BINDING EFFECT OF THIS
AGREEMENT. THE ONLY PROMISES MADE TO ANY SIGNATORY
ABOUT THIS AGREEMENT, AND TO SIGN THIS AGREEMENT, ARE
CONTAINED IN THIS AGREEMENT. THE SIGNATORIES ARE
SIGNING THIS AGREEMENT VOLUNTARILY. PLEASE READ
CAREFULLY: THIS SEVERANCE AGREEMENT AND MUTUAL
RELEASE INCLUDES A RELEASE OF ALL KNOWN AND UNKNOWN
CLAIMS.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first above written.
DOUGLAS COLE
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Douglas Cole
NETAMERICA.COM CORPORATION
By:_______________________________
Its:______________________________
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ATTACHMENT A
EMPLOYMENT AGREEMENT
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ATTACHEMENT B
NON-REVOCATION
AS OF THE DATE SHOWN ON THIS FORM
By signing below, I verify that I have chosen not to revoke my
agreement to and execution of the Severance Agreement and Mutual Release. My
signature confirms my renewed agreement to the terms of that Agreement,
including the release and waiver of any and all claims relating to my employment
with NetAmerica.com Corporation and its successors, assigns, and affiliated
companies, and/or the termination of that employment.
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Signature* Date
*Do not sign, date, or return this document until seven (7) days after you sign
the Severance Agreement and Mutual Release. The Severance Agreement was signed
on __________________.
