TERMINATION AGREEMENT
This TERMINATION AGREEMENT (this "Agreement"), is made effective as of March 1,
2004 (the "Effective Date"), by and between RAPIDTRON, INC., a Delaware
corporation, and RAPIDTRON, INC., a Nevada corporation (collectively, the
"Company"); and STEVE MEINEKE, an individual ("Meineke"), with reference to the
following recitals:
A. The Company engaged Meineke to serve as the Company's Secretary,
Treasurer and General Manager, pursuant to that certain Employment Agreement,
dated January 1, 2003 (the "Employment Agreement").
B. The parties now desire to terminate the Employment Agreement upon
the terms and conditions set forth herein.
NOW, THEREFORE, for and in consideration of the foregoing recitals, the mutual
covenants set forth in this Agreement, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows:
1. Termination of Agreement. Subject to the terms and conditions set
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forth herein, the Employment Agreement is hereby terminated by mutual agreement
and consent of Meineke and the Company. Such termination shall be effective as
of the Effective Date hereof. From and after the Effective Date hereof, except
for those rights, powers, duties, liabilities and obligations set forth in
Sections 7 and 8 of the Employment Agreement, neither the Company nor Meineke
shall have any further right, power, duty, liability or obligation to or against
one another under the Employment Agreement. Each of the Company and Meineke
hereby acknowledge and agree that the obligations set forth in Sections 7 and 8
of the Employment Agreement shall survive termination of the Employment
Agreement and shall continue to be observed and performed by the parties.
2. Unpaid Salary. The Company hereby acknowledges that it owes Meineke
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$6,987 for salary earned by Meineke Consulting, LLC, during the year 2002 (the
"2002 Salary"), and $38,959 for salary earned by Meineke during the year 2003
(the "2003 Salary"), and $3,750 salary earned by Meineke during 2004 through
February 15, 2004. The Company shall pay to Meineke Consulting, LLC the 2002
Salary prior to paying any unpaid wages earned by any employees in the year 2003
and when it pays all other wages remaining unpaid for the year 2002, pro rata
and in proportion to all other unpaid wages earned in 2002 and remaining unpaid
as of the Effective Date. The Company shall pay to Meineke the 2003 Salary
after all wages remaining unpaid for the year 2002 are paid, and when it pays
all other wages remaining unpaid for the year 2003, pro rata and in proportion
to all other unpaid wages earned in 2003 and remaining unpaid as of the
Effective Date.
3. Related Party Debt.
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(a) Comerica Note. Meineke and John Creel are joint holders, and
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the Company is the maker, of a certain Promissory Note, dated April 25, 2002, in
the principal amount of $150,000 (the "Joint Note"). As of the Effective Date,
the outstanding balance of the Joint Note is $70,000. Meineke and John Creel
("Creel") are joint makers, and Comerica Bank-California is the holder, of a
Promissory Note dated April 25, 2002, in the principal amount of $150,000 (the
"Comerica Note"). As of the Effective Date, the balance of the Comerica Note is
$70,000. The proceeds of the Comerica Note were loaned to the Company under the
Joint Note. The Company shall timely pay the Comerica Note on or before the
15th day of each month as a priority payment from available cash. The Company
hereby agrees to indemnify and hold Meineke harmless from and against any and
all obligations arising under the Joint Note or the Comerica Note. The Company
shall defend Meineke against any and all actions which may arise under the Joint
Note or Comerica Note, and shall reimburse Meineke for any and all reasonable
costs and
expenses in defending against such actions, as and when incurred. The Company
hereby agrees to pay the Comerica Note as and when due, which payments shall be
credited against the balance owed by the Company to Meineke and Creel under the
Joint Note.
(b) $15,000 Note. Meineke is the holder, and the Company is the
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maker, of a Promissory Note, dated October 3, 2001, in the principal amount of
$15,000 (the "15K Note"). As of the Effective Date, the balance owed under the
15K Note is $15,000 plus all interest accrued thereon pursuant to the terms of
the 15K Note. The Company shall make and deliver a replacement convertible note
in the principal amount of the outstanding balance of the 15K Note (the
"Replacement Note"), which shall replace the 15K Note. The Replacement Note
shall be convertible into common stock of Rapidtron, Inc., a Nevada corporation
("RPDT"), at the election of holder, at a conversion rate of $1.25 per share.
4. Options. Meineke is the owner of a vested option to purchase
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225,000 shares of common stock of RPDT and the owner of an unvested option to
purchase an additional 225,000 shares of common stock of RPDT (the "Unvested
Option"), pursuant to an Amended and Restated 2003 Stock Plan Award effective as
of September 1, 2003 (the "Award")Meineke and the Company hereby amend the
Award as follows:
(a) Meineke shall continue to hold the Unvested Option after the
Effective Date hereof, and the Unvested Option shall vest as of January 1, 2005,
provided Meineke continuously serves as director of the Company pursuant to this
Agreement from the Effective Date through January 1, 2005.
(b) Notwithstanding anything to the contrary set forth in the
Plan, the options may be exercised at any time during the five (5) year period
following the Effective Date.
5. Director. Meineke shall continue to serve as a director of the
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Company pursuant to a separate agreement that provides for the following:
(a) Attendance at three board meetings per year, provided such
meetings do not unreasonably interfere or conflict with Meineke's duties as
President of Raleigh America or the interests of Raleigh America or Raleigh
Cycle Ltd.; and
(b) Ongoing advice and consultation on an as-needed and
as-available basis.
6. Non-Competition. Following the Effective Date hereof and continuing
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for one (1) year following Meineke's termination of service as a director of the
Company (the "Restriction Period"), Meineke shall not directly or indirectly,
engage in, become employed by, serve as an agent or consultant to, or become a
constituent member, partner, principal or stockholder (other than a holder of
less than 5% of the outstanding voting shares of any publicly-held company) of
any entity (a) which engages directly or indirectly in any business or activity
substantially similar to any business or activity engaged in by the Company or
any of its subsidiaries as of the Effective Date hereof; or (b) which engages
directly or indirectly in any business or activity directly competitive with any
business or activity engaged in by the Company or any of its subsidiaries as of
the Effective Date hereof.
7. Non-Solicitation of Employees. During the Restriction Period,
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Meineke shall not, directly or indirectly, for his own account or for the
account of any other person or entity with which he is or shall become
associated in any capacity, (a) solicit for employment, employ or otherwise
interfere with the relationship of the Company or any of its subsidiaries with,
any person who, at the time of such solicitation, employment or interference, is
employed by or otherwise engaged to perform services for the Company or any of
its subsidiaries, or (b) induce any employee of the Company or any of its
subsidiaries who is a member of management to engage in any activity which
Meineke is prohibited from engaging in under any of Sections 6, 7, 8 or 9 hereof
or to terminate such employee's employment with the Company.
8. Non-Solicitation of Customers. During the Restriction Period,
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Meineke shall not, directly or indirectly, solicit or otherwise attempt to
establish for himself or any other person or entity any business relationship of
a nature that is competitive with the business or relationship of the Company or
any of its subsidiaries with any person or entity which, on the Effective Date
hereof, is a customer, client, vendor, supplier, distributor or other
independent contractor of the Company or any of its subsidiaries.
9. Confidentiality; Non-Disparaging Statements. Meineke shall not, at
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any time after the Effective Date hereof, use, publish, disseminate or otherwise
disclose, directly or indirectly, any information heretofore acquired, developed
or used by the Company or its subsidiaries relating to its business or the
operations, employees or customers of the Company or its subsidiaries which
constitutes proprietary or confidential information of the Company or its
subsidiaries, including without limitation, any information concerning
employees, customers, vendors, suppliers and other independent contractors;
statistical data and compilations; financial and business records; know-how;
patents; copyrights; trademarks; trade names; inventions; formulae; methods;
processes; agreements and contracts; manuals or any other documents
(collectively, "Confidential Information"), but excluding any Confidential
Information which has become part of common knowledge or understanding or
publicly available in the industry or otherwise in the public domain (other than
from disclosure by Meineke in violation of this Agreement). Meineke shall not
make, or cause to be made, any statement, observation or opinion, or communicate
any information (whether oral or written) that in any way disparages the
reputation or business of the Company, or any of its owners, directors, members,
officers, employees representatives, or successors. Neither the Company nor any
of its affiliates shall make, or cause to be made, any statement, observation or
opinion, or communicate any information (whether oral or written) that in any
way disparages the reputation or business of Meineke.
10. Remedies.
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(a) Of the Company. Meineke acknowledges and agrees that the
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covenants and obligations of Meineke with respect to confidentiality and
non-disparagement set forth in this Agreement relate to special, unique and
extraordinary matters and that a violation of any of the terms of such covenants
and obligations will cause the Company irreparable injury for which adequate
remedies are not available at law. Therefore, Meineke agrees that the Company
shall be entitled to an injunction, restraining order or such other equitable
relief (without the requirement to post bond) as a court of competent
jurisdiction may deem necessary or appropriate to restrain Meineke from
committing any violation of the covenants and obligations set forth in Sections
6, 7, 8 or 9. These injunctive remedies are cumulative and in addition to any
other rights and remedies the Company may have at law or in equity.
(b) Of Meineke and Meineke. The Company acknowledges and agrees
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that the covenants and obligations of the Company with respect to
non-disparagement set forth in this Agreement relate to special, unique and
extraordinary matters and that a violation of any of the terms of such covenants
and obligations will cause Meineke irreparable injury for which adequate
remedies are not available at law. Therefore, the Company agrees that Meineke
shall be entitled to an injunction, restraining order or such other equitable
relief (without the requirement to post bond) as a court of competent
jurisdiction may deem necessary or appropriate to restrain the Company from
committing any violation of the covenants and obligations set forth in Section
9. These injunctive remedies are cumulative and in addition to any other rights
and remedies Meineke may have at law or in equity.
11. Mutual Releases.
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(a) Definitions. As used herein, "Representative" means, with
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respect to each party hereto, any constituent partner, constituent member,
shareholder, owner, manager, director, officer, trustee, trustor, beneficiary,
heir, devisee, affiliate, successor, predecessor, employee, agent, attorney or
representative of such party, excluding the other parties hereto. As used
herein, "Claim" means any
claim, demand, assertion, legal proceeding, cause of action, loss, penalty,
fine, forfeiture, judgment, legal or other fee, court or other cost, liability,
damage, or expense, whether any of the above are known or unknown, legal or
equitable, fixed or contingent, or liquidated or unliquidated.
(b) Release by the Company. Except for the obligations arising
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under this Agreement, the Company does hereby for itself and its Representatives
release and absolutely and forever discharge Meineke of and from any and all
Claims which the Company ever had or may now have or may hereafter have against
Meineke or his Representatives, or any of them, arising out of, related to, or
in connection with the Employment Agreement.
(c) Release by Meineke. Except for the obligations arising under
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this Agreement and the related documents identified herein, Meineke does hereby
for himself and his Representatives release and absolutely and forever discharge
the Company and its Representatives of and from any and all Claims which Meineke
ever had or may now have or may hereafter have against the Company or its
Representatives or any of them, arising out of, related to, or in connection
with the Employment Agreement.
(d) Waiver of Civil Code Section 1542. Each of the parties hereby
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acknowledges the provisions of Section 1542 of the Civil Code of the State of
California, which provide as follows:
"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."
EACH SUCH PARTY DOES HEREBY EXPRESSLY WAIVE AND RELINQUISH ALL RIGHTS AND
BENEFITS WHICH IT HAS OR MAY HAVE OR HAD UNDER SAID SECTION. EACH SUCH PARTY
ACKNOWLEDGES THAT IT IS AWARE THAT IT MAY HEREAFTER DISCOVER FACTS DIFFERENT
FROM OR IN ADDITION TO THOSE IT NOW KNOWS OR BELIEVES TO BE TRUE WITH RESPECT TO
THE CLAIMS HEREIN RELEASED, AND SUCH PARTY AGREES THAT THIS RELEASE SHALL BE AND
REMAIN IN EFFECT IN ALL RESPECTS AS A COMPLETE AND GENERAL RELEASE AS TO THE
MATTERS TO BE RELEASED, NOTWITHSTANDING ANY SUCH DIFFERENT OR ADDITIONAL FACTS.
12. General Provisions.
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(a) Attorneys Fees. If any party commences any mediation,
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arbitration, administrative proceeding or judicial proceeding (each, a
"Proceeding") to enforce or interpret any term, condition or other provision of
this Agreement, then the prevailing party in such Proceeding shall be entitled
to recover reasonable attorneys fees, expert witness fees, accounting fees and
related costs incurred by such prevailing party in such Proceeding, in addition
to any other relief to which such prevailing party may be entitled.
(b) Notices. Any notice, offer, or other communication required
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or desired to be given in writing shall be deemed given (or received) by a party
(i) upon delivery, if hand delivered (including delivery by overnight courier
service), (ii) at the expiration of three (3) days from the date of deposit in
the United States mails as registered or certified matter, postage prepaid,
addressed to the party entitled to receive such notice, offer or other
communication, at the address set forth opposite the party's signature hereto,
or (iii) if given by facsimile (telecopy) transmission, when such facsimile
(telecopy) is transmitted to the facsimile number that such party shall have
provided to the other party and receipt thereof is acknowledged by the recipient
in writing or by return facsimile (telecopy) transmission.
(c) Governing Law. This Agreement shall be governed by and
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construed in accordance with the laws of the State of California, without giving
effect to any principle or doctrine regarding conflicts of laws.
(d) No Waiver. A waiver by any party of a breach of any covenant,
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condition, restriction or agreement under this Agreement made or to be performed
by any other party shall not be construed as a waiver of such breach by any
other party or as a waiver of any succeeding breach of the same covenant,
agreement, restriction or condition or as a waiver of any breach of any other
covenant, agreement, restriction or condition under this Agreement.
(e) Modifications. No alteration, change or modification of or to
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this Agreement shall be effective unless it is made in writing and signed on
behalf of each party to be charged.
(f) Entire Agreement. This Agreement and the related documents
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identified herein contains the entire understanding between the parties relating
to the transactions contemplated by this Agreement, and all prior agreements,
understandings, representations and statements relating to the transactions
contemplated herein are superseded by this Agreement and shall be of no further
force or effect.
(g) Counterparts. This Agreement may be executed in any number of
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counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same document.
(h) Further Assurances. Each party shall sign any other and
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further documents and instruments and shall take any other and further actions
as might be necessary or proper in order to accomplish the intent and purposes
of this Agreement.
(i) Severability. In the event that any one or more provisions of
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this Agreement shall be held to be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remainder hereof shall not in any
way be affected or impaired thereby. Moreover, if any one or more of the
provisions contained in this Agreement is held to be excessively broad as to
duration, scope, activity or subject, such provisions will be construed by
limiting and reducing them so as to be enforceable to the maximum extent
compatible with applicable law.
IN WITNESS WHEREOF, the parties have executed, delivered and entered into this
Agreement as of the Effective Date hereof.
"MEINEKE"
Address:
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/s/ Steve Meineke
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3 White Cliff STEVE MEINEKE, an individual
Laguna Beach, California 92677
[signatures continue on next page]
"COMPANY"
RAPIDTRON, INC.,
a Nevada corporation
Address:
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3151 Airway Avenue By: /s/ John Creel
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Costa Mesa, California 92626-4627 John Creel, President
Attn: President
RAPIDTRON, INC.,
a Delaware corporation
Address:
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3151 Airway Avenue By: /s/ John Creel
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Costa Mesa, California 92626-4627 John Creel, President
Attn: President