EXHIBIT 99.1
SEPARATION/SEVERANCE AGREEMENT
SEPARATION/SEVERANCE AGREEMENT
This Separation/Severance Agreement ("Agreement") is made as of the
30th day of August, 2004 by and between Capital Growth Systems, Inc., a Florida
corporation ("Company"), and Scott Allen ("Executive").
RECITALS
A. The Company and Executive are parties to an Employment Agreement,
dated as of April 26, 2004 ("Employment Agreement"), pursuant to which Executive
serves as the Chief Executive Officer ("CEO") of the Company and NEXVU
Technologies, L.L.C., a Delaware limited liability company ("Subsidiary"). A
copy of the Employment Agreement is attached to this Agreement as Exhibit A.
B. Executive also serves as the Chief Financial Officer ("CFO") and
Director of the Company.
C. The Company and Executive have agreed that he will cease to serve as
the CEO, CFO and Director of the Company before the end of the term set forth in
the Employment Agreement.
D. The board of directors of the Company has approved this Agreement.
NOW THEREFORE, the parties agree as follows:
1. Termination.
(a) The Employment Agreement, and Executive's service as CEO,
CFO and Director are hereby terminated with effect as of the date of
this Agreement ("Effective Date"). Thereafter, Executive agrees to
serve as a consultant in accordance with Section 2(a) until the earlier
of: (a) Executive finds employment outside of the Company and (b)
November 23, 2004 ("Consulting Termination Date"); provided however,
the Consulting Termination Date may be extended in 30 day increments
upon the joint written consent of Executive and the Company. Executive
agrees to use his good faith best efforts to obtain alternate
employment. After the Consulting Termination Date, Executive will cease
to be an employee of the Company, pursuant to this Agreement.
(b) Contemporaneously with the execution and delivery of this
Agreement, with effect as of the Effective Date, Executive, by
execution of this Agreement hereby resigns as CEO, CFO and Director of
the Company, of Nexvu Technologies, LLC and of any other subsidiaries
that may be maintained by the Company.
(c) Executive and the Company agree and acknowledge that this
Agreement sets forth the parties' mutual understanding with respect to
Executive's termination of employment with the Company and the
termination of the Employment Agreement. Executive and the Company
agree that the termination set forth herein is not a termination of
Executive "With Cause" or a termination by the Company "Without Cause"
within the meaning of, or for purposes of, the Employment Agreement. In
addition, the Company and Executive agree that the termination of
Executive's employment pursuant to this Agreement is deemed not to be a
compensable event within the meaning of, and for purposes of, the
Employment Agreement, and therefore, Executive is not entitled to
payment of additional base salary, bonus or incentive compensation
beyond that earned through the termination of his Employment Agreement,
and Executive's sole right to compensation or other payments from the
Company after the Effective Date shall be as set forth in Section 4
below.
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2. Transitional Services.
As consultant, Executive will render only such services to the
Company as are from time to time specified by the board of directors.
Executive shall devote such productive time, ability and attention to
the business of the Company as may be requested by the board of
directors, which time may be up to 40 hours per week. Executive shall
cooperate fully with the Company and its board of directors to provide
such services. Executive shall not while serving as consultant,
directly or indirectly, render any services of a business, commercial
or professional nature to any other person, corporation, firm, or
organization, whether for compensation or otherwise, without the prior
written consent of the board of directors.
The parties acknowledge that prior to the Consulting
Termination Date, Executive may be requested by the Company to assist
it in connection with a proposed sale of Nexvu Technologies, LLC or
certain of its assets or the licensing thereof to prospective suitors
identified and mutually agreed by the Company and Consultant from time
to time; any such transaction with the Company that occurs on or before
ninety (90) days following the Consulting Termination Date is referred
to as a "Sale Transaction." It should be noted that the Company may
elect to not seek to sell the Nexvu business, and accordingly,
Executive is not to move forward in representing that the Nexvu assets
or business are for sale as a whole, unless instructed by the board of
directors or its designated representative, who initially shall be Lee
Wiskowski. In the event the Company consummates a Sales Transaction,
then Consultant shall be entitled to a bonus fee equal to 1% of the
"Net Excess Proceeds" realized by the Company with respect to the Sales
Transaction. The "Net Excess Proceeds" shall be an amount equal to the
cash proceeds the Company receives from the Sales Transaction at
closing, as reduced by all commissions paid by it in connection with
the Sales Transaction and further reduced by an amount equal to all
"Expenditures" through the closing date of the Sales Transaction.
"Expenditures" shall be an amount equal to the sum of all capital
contributions that have been made to Nexvu Technologies, LLC through
January 26, 2004 plus the amount of all payments made by the Company or
its subsidiaries since January 26, 2004 through the Sales Transaction
closing date plus all accrued, unpaid liabilities of the Company
through the Sales Transaction closing date. .The parties acknowledge
that the Executive shall not be entitled to any other form of bonus in
connection with the sale of the Company or its assets, and the right to
such a bonus in the Employment Agreement of Executive is terminated.
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3. Payments.
In lieu of any accrued, currently existing or prospective
payments under the Employment Agreement and in consideration of
Executive's undertakings under this Agreement, the Company will pay
Executive a salary at the rate of $175,000.00 per year, pro rated
across a 365 day period and payable in accordance with Company's
regular pay roll practice until the Consulting Termination Date. The
salary payments will end as of the close of business on the day that
immediately precedes the Consulting Termination Date.
4. Benefits.
(a) Until the Consulting Termination Date, Executive will be
entitled to participate in any employee benefit plans (except vacation)
and insurance programs offered by the Company for its executive
management or supervisory personnel generally, in accordance with the
eligibility requirements for participation therein.
(b) Until the Consulting Termination Date, the Company shall
reimburse the Executive for all pre-approved, reasonable, ordinary, and
necessary business expenses incurred by him in connection with the
performance of his duties hereunder. These reimbursable expenses must
receive the prior written approval of the Board of Directors or its
designee. These reimbursable expenses include, but are not limited to,
ordinary and necessary travel, lodging and dining expenses and
entertainment expenses. The reimbursement of business expenses will be
governed by the policies for the Company and the terms otherwise set
forth herein. The Executive shall provide the Company with an
accounting of his expenses, which accounting shall clearly reflect
which expenses were incurred for proper business purposes in accordance
with the policies adopted by the Company and the provisions set forth
in this Agreement and as such are reimbursable by the Company. The
Executive shall provide the Company with such other supporting
documentation and other substantiation of reimbursable expenses as will
conform to Internal Revenue Service or other requirements. All such
reimbursements shall be payable by the Company to the Executive within
a reasonable time after receipt by the Company of appropriate
documentation therefore.
5. Options and Other Payments. The vested portion (i.e., the option to
purchase up to 107,500 shares of Company common stock) of the option to purchase
up to 430,000 shares of Common Stock shall remain in effect and shall be
exercisable by Executive at any time on or before April 25, 2014. The remaining
unvested portion of the Option (i.e., to purchase up to 322,500 shares) is
hereby lapsed.
6. Certain Covenants. All references to the Company in this Section 6
shall include any subsidiaries of the Company.
(a) Non-Disclosure of Confidential Information. Executive
hereby acknowledges and agrees that the duties and services that have
been performed by Executive pursuant to the Employment Agreement and
which are to be performed by Executive under this Agreement are special
and unique and that as of a result, Executive has and will acquire,
develop and use information of a special and unique nature and value
that is not generally known to the public or to the Company's industry,
including but not limited to, certain records, phone locations,
documentation, software programs, price lists, customer lists, contract
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prices for the Company's services, business plans and prospects of the
Company, equipment configurations, ledgers and general information,
employee records, mailing lists, accounts receivable and payable
ledgers, financial and other records of the Company or its affiliates,
and other similar matters (all such information being hereinafter
referred to as "Confidential Information"). Executive further
acknowledges and agrees that the Confidential Information is of great
value to the Company and its affiliates and that the restrictions and
agreements contained in this Agreement are reasonably necessary to
protect the Confidential Information and the goodwill of the Company.
Accordingly, Executive hereby agrees that:
(i) Executive will not, for the period commencing on
the Effective Date through the Consulting Termination Date and
for a period of four (4) years thereafter, directly or
indirectly, except in connection with Executive's performance
of the duties under this Agreement, or as otherwise authorized
in writing by the Company for the benefit of the Company,
divulge to any person, firm, corporation, limited liability
company, or organization, other than the Company (hereinafter
referred to as "Third Parties"), or use or cause or authorize
any Third Parties to use, the Confidential Information, except
as required by law; and
(ii) Upon the Consulting Termination Date, Executive
shall deliver or cause to be delivered to the Company any and
all Confidential Information, including drawings, notebooks,
notes, records, keys, disks data and other documents and
materials belonging to the Company which are in his possession
or under his control relating to the Company, regardless of
the medium upon which it is stored, and will deliver to the
Company upon the Consulting Termination Date any other
property of the Company which is in his possession or control.
(b) Non-Solicitation Covenant. Executive hereby covenants and
agrees that for the period commencing on the Effective Date through the
Consulting Termination Date and for a period of two (2) years
thereafter, Executive shall not: induce or attempt to induce any
employee (or any person who was an employee during the year preceding
the date of any solicitation) of the Company to leave the employ of the
Company, or in any way interfere with the relationship between any such
employee and the Company. In addition, during the period prior to the
Consulting Termination Date, Executive shall not directly or indirectly
solicit, induce or attempt to induce any customer or prospective
customer of the Company to purchase or license goods or services
competitive with those offered by the Company, or directly or
indirectly seek to lessen the business opportunities of the Company.
For purposes hereof, "prospective vendor or customer" shall mean any
person or entity which has been solicited for business by Executive or
any officer or other employee of the Company or its Affiliates at any
time during Executive's engagement by the Company. Following the
Consulting Termination Date, Executive shall be permitted to hire for
himself or his employer, former employees of the Company, provided that
Consultant did not violate the terms of this Section 6(b) prior to the
Consulting Termination Date.
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(c) Remedies.
(i) Injunctive Relief. Executive expressly
acknowledges and agrees that the "Business of the Company" (as
that term is defined herein) is highly competitive and that a
violation of any of the provisions of Sections 6(a) or 6(b)
would cause immediate and irreparable harm, loss and damage to
the Company not adequately compensable by a monetary award.
Executive further acknowledges and agrees that the time
periods provided for herein are the minimum necessary to
adequately protect the Business of the Company, the enjoyment
of the Confidential Information and the goodwill of the
Company. Without limiting any of the other remedies available
to the Company at law or in equity, or the Company's right or
ability to collect money damages, Executive agrees that any
actual or threatened violation of any of the provisions of
Sections 6(a) or 6(b) may be immediately restrained or
enjoined by any court of competent jurisdiction, and that a
temporary restraining order or emergency, preliminary or final
injunction may be issued in any court of competent
jurisdiction, without notice and without bond. Notwithstanding
anything to the contrary contained in this Agreement, the
provisions of this Section 6(c) shall survive the termination
of this Agreement.
(ii) Enforcement. It is the desire of the parties
that the provisions of Sections 6(a) and 6(b) be enforced to
the fullest extent permissible under the laws and public
policies in each jurisdiction in which enforcement might be
sought. Accordingly, if any particular portion of Sections
6(a) or 6(b) shall ever be adjudicated as invalid or
unenforceable, or if the application thereof to any party or
circumstance shall be adjudicated to be prohibited by or
invalidated by such laws or public policies, such section or
sections shall be: (i) deemed amended to delete therefrom such
portions so adjudicated; or (ii) modified as determined
appropriate by such a court, such deletions or modifications
to apply only with respect to the operation of such section or
sections in the particular jurisdictions so adjudicating on
the parties and under the circumstances as to which so
adjudicated.
All references to the Company in this Section 6 shall include
"Affiliates" of the Company, as that term is construed under Rule 405 of the
Securities Act of 1933, as amended, including but not limited to any subsidiary
of the Company.
The term "Business of the Company" shall include all business
activities and ventures related to the business of providing of any of the
following: (a) provision of application performance management tools, software,
equipment or consulting services related to application performance management;
or (b) solutions to the call center business used or expressly contemplated by
Company at any time during the term of Executive's engagement with the Company;
or (c) all other businesses in which the Company is engaged in as of the
Consulting Termination Date.
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7. Disclosure Regarding Agreement; Non-Disparagement.
(a) Executive agrees not:
(i) to discuss, orally or in writing, any aspect of
this Agreement or its subject matter with anyone inside the
Company other than its board of directors, its Counsel, or the
successor CEO; and
(ii) to discuss, orally or in writing, any aspect of
the matter with anyone outside the Company other than his
legal counsel and, if necessary, his accountant.
(b) The parties agree that the Company may make such
disclosure regarding Executive's termination as CEO, CFO and Director
of the Company as in the judgment of the Company's Counsel is required
by law, or regulation.
(c) Each party hereto agrees that it will not disparage the
other following the date of this Agreement. In the event of an inquiry
to the Company from third parties as to the circumstances surrounding
Executive's cessation of employment, the Company will advise that the
parties agreed to mutually part company as Executive has elected to
pursue other business interests.
(d) The agreements in this Section 7 shall survive the
termination of this Agreement.
8. Representations and Warranties.
(a) Executive represents and warrants to the Company that to
the best of his knowledge he has not engaged in any violation of law or
any breach of any fiduciary duty owed as a director or officer of the
Company that could give rise to the Company having a claim against him.
(b) The Company represents and warrants to Executive that to
the best of the Company's knowledge the Company has not engaged in any
violation of law that could give rise to Executive having a claim
against the Company.
9. Releases.
(a) Company forever releases, remises and discharges
Executive, together with his heirs, personal representatives,
successors and assigns (collectively the "Employee Released Parties")
from any and all claims, claims for relief, demands, actions and causes
of action of any kind or description whatsoever, known or unknown,
whether arising out of contract, tort, statute, treaty or otherwise, in
law or in equity, which the Company now has or has had against any
Employee Released Party from the beginning of the world to the date of
this Agreement arising from, connected with, or in any way growing out
of, directly or indirectly, Executive's employment with the Company,
his service on behalf of the Company, or any other transaction between
the parties prior to the date of this Agreement and all effects,
consequences, losses, damages, negotiations and dealings relating
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thereto; provided, however, that nothing in this Section 9(a) will bar,
impair or affect any of the obligations, covenants and agreements of
Executive set forth in this Agreement.
(b) Executive, for himself and his heirs, personal
representatives, successors and assigns, forever releases, remises and
discharges the Company and each of its past, present, and future
officers, directors, shareholders, members, trustees, agents,
representatives, affiliates, successors and assigns (collectively the
"Employer Released Parties") from any and all claims, claims for
relief, demands, actions and causes of action of any kind or
description whatsoever, known or unknown, whether arising out of
contract, tort, statute, treaty or otherwise, in law or in equity,
which Executive now has, has had, or may hereafter have against any of
the Employer Released Parties from the beginning of the world to the
date of this Agreement, arising from, connected with, or in any way
growing out of, directly or indirectly, Executive's employment by the
Company, the services provided by Executive to the Company, or any
transaction prior to the date of this Agreement and all effects,
consequences, losses and damages relating thereto, including, but not
limited to, all claims arising under the Civil Rights Acts of 1866 and
1964, the Fair Labor Standards Act of 1938, the Equal Pay Act of 1963,
the Age Discrimination in Employment Act of 1967, the Rehabilitation
Act of 1973, the Older Workers Benefit Protection Act of 1990, the
Americans With Disabilities Act of 1990, the Civil Rights Act of 1991,
the Family and Medical Leave Act of 1993, and all other federal or
state laws governing employers and employees; provided, however, that
nothing in this Section 9(b) will bar, impair or affect the
obligations, covenants and agreements of the Company set forth in this
Agreement.
10. Covenants; Bylaws.
(a) Covenant Not to Sue by Executive. Executive agrees that he
will not now or hereafter commence or initiate any claim or charge of
employer discrimination with any governmental agency or sue the Company
concerning any claims relating to his employment and/or termination of
employment with the Company, except as the same may affect Executive's
rights with respect to the enforcement of this Agreement. This
Agreement may be pled as a full and complete defense to, and may be
used as a basis for injunction against, any action or proceeding
Executive may institute, prosecute, or maintain in breach of this
Agreement.
(b) Covenant Not to Sue by Employer. The Company agrees that
it will not now or hereafter commence or initiate any claim or charge
with any governmental agency or sue Executive concerning any claims
relating to his employment and/or termination of employment with the
Company, except as the same may affect the Company's rights with
respect to the enforcement of this Agreement. This Agreement may be
pled as a full and complete defense to, and may be used as a basis for
injunction against, any action or proceeding the Company may institute,
prosecute, or maintain in breach of this Agreement.
(c) Bylaws. Attached as Exhibit B is the bylaws of the
Company, addressing the Company's indemnification obligation with
respect to officers and directors of the Company. The Company will
abide by its indemnification obligations pursuant to its bylaws.
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11. Acknowledgment.
(a) By entering into this Agreement, and in connection with
Executive's release of claims and covenant not to sue set forth in
Section 9 and Section 10, Executive acknowledges that:
(i) Executive is knowingly and voluntarily entering
into this Agreement;
(ii) The Company is not admitting any liability or
violation of any law, contract or other agreement;
(iii) No promise or inducement has been offered to
Executive except as set forth herein;
(iv) This Agreement is being executed by Executive
without reliance upon any statements by the Company or any of
its representatives concerning the nature or extent of any
claims or damages or legal liability therefor;
(v) This Agreement has been written in understandable
language, and all provisions hereof are understood by
Executive;
(vi) Executive has been advised in writing to consult
with an attorney prior to executing this Agreement;
(vii) Executive has had a period of at least seven
days within which to consider this Agreement before accepting
the same and, by signing this Agreement earlier than seven
days following receipt of it, Executive acknowledges that he
has knowingly and voluntarily waived the seven day period and
has accelerated the date when he may begin receiving the
separation/severance payments following expiration of the
revocation period referenced in paragraph (viii); and
(viii) Executive has the right to revoke this
Agreement for a period of seven days following his execution
hereof, and this Agreement will not become effective or
enforceable until such seven day period has expired.
(b) Should Executive desire to revoke this Agreement,
Executive must notify the Company in writing at 1100 East Woodfield
Road, Schaumburg, Illinois 60173, attention: President, prior to the
close of business on the seventh day following the date when he signs
this Agreement. If Executive declines to accept the terms of this
Agreement or, having accepted them, effectively revokes his acceptance
thereof, this Agreement will have no force or effect and neither its
terms, nor any of the discussions of the parties relative to its
negotiation, will be admissible in evidence in any proceeding brought
by or on behalf of Executive against the Company or any other person.
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12. Notice. Any notice required or permitted to be given to a party
pursuant to the provisions of this Agreement must be in writing and will be
deemed to have been given on the date of receipt if delivered by messenger or
transmitted via facsimile to, or if mailed to such party by registered or
certified mail, postage prepaid, at, the address for such party set forth below
(or to such other address or party as such party shall designate in writing to
the other party from time to time).
IF TO THE COMPANY, TO: Capital Growth Systems, Inc.
1100 East Woodfield Road - Suite 100
Schaumburg, IL 60173
Attention: President
Facsimile: 630-872-5872
WITH A COPY TO:
Shefsky & Froelich Ltd.
444 North Michigan Avenue - Suite 2500
Chicago, IL 60611
Attention: Mitchell D. Goldsmith, Esq.
Facsimile: 312-527-3194
IF TO EXECUTIVE, TO: The address set forth directly below his
signature.
13. Modification and Waiver.
(a) No waiver or modification of this Agreement or of any
covenant, condition, or limitation herein contained will be valid or
effective unless in writing and duly executed by the party to be
charged therewith and no evidence of any waiver or modification will be
offered or received in evidence in any proceeding or litigation between
the parties arising out of or affecting this Agreement, or the rights
or obligations of the parties hereunder, unless such waiver or
modification is in writing, duly executed as aforesaid.
(b) The parties further agree that the provisions of paragraph
(a) above may not be waived except as herein set forth. No waiver of
any of the provisions of this Agreement will be deemed, or will
constitute, a waiver of any other provision, whether or not similar,
nor will any waiver constitute a continuing waiver. No waiver of any
breach of condition of this Agreement will be deemed to be a waiver of
any other subsequent breach of condition, whether of like or different
nature.
14. Consent to Jurisdiction, Venue and Service of Process. Each of the
Company and Executive, after having had an opportunity to consult with legal
counsel, knowingly, voluntarily, intentionally, and irrevocably:
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(a) consents to the jurisdiction of the courts of Cook County,
in the State of Illinois and in the United States District Court for
the Northern District of Illinois with respect to any action, suit,
proceeding, investigation, or claim ("Litigation");
(b) waives any objections to the jurisdiction and venue of any
Litigation in either such court;
(c) agrees not to commence any Litigation except in either of
such courts and agrees not to contest the removal of any Litigation
commenced in any other court to either of such courts;
(d) agrees not to seek to remove, by consolidation or
otherwise, any Litigation commenced in either of such courts to any
other court; and
(e) waives personal service of process in connection with any
Litigation and consent to service of process by registered or certified
mail, postage prepaid, addressed as set forth herein.
These provisions will not be deemed to have been modified in any respect or
relinquished by any party except by written instrument executed in accordance
with Section 13.
15. Severability. Wherever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law if a judicial determination is made that any of the provisions of
this Agreement constitutes an unreasonable or otherwise unenforceable
restriction against any party, the parties hereto agree and it is their desire,
that the court shall substitute a judicially enforceable limitation in its
place, and that as so modified the covenant shall be binding upon the parties as
if originally set forth herein. Such determination shall not affect the validity
of the remaining provisions.
16. Advice of Counsel. Executive acknowledges that he has been provided
the opportunity to be represented by competent counsel in connection with the
negotiation, preparation, and signing of this Agreement and the other
document(s) contemplated hereby, that he understands and agrees to every term
contained herein and therein, and that this Agreement and the other document(s)
were negotiated at arm's length. Any rule of construction which would otherwise
hold that any ambiguity in this Agreement should be construed for or against one
party over any other is hereby waived.
17. Further Assurances. The parties agree to take such action and
execute and deliver, promptly upon request, such additional documents as may be
necessary or appropriate to implement the terms of this Agreement and effectuate
its intent.
18. Costs and Expenses. In the event of a breach of this Agreement, the
prevailing party shall recover from the non-prevailing party all costs and
expenses, including actual attorney's fees, incurred in compelling compliance
with this Agreement.
19. Governing Law. This Agreement will be governed by and construed in
accordance with the laws of the State of Illinois, without giving effect to its
principles of conflicts of laws.
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20. Entire Agreement. This Agreement constitutes the entire agreement
between the parties pertaining to the subject matter hereof and supersedes all
prior and contemporaneous agreements, representations, and understandings,
whether oral or in writing, of the parties.
21. Counterparts. This Agreement may be executed in one or more
counterparts, whether by photocopy, original or facsimile, each of which will be
deemed to constitute an original but all of which together will constitute one
and the same instrument.
22. Successors and Assigns.
(a) Executive may not assign any rights or obligations under
this Agreement without the prior written consent of the Company. This
Agreement will be binding upon and inure to the benefit of Executive
and his heirs, personal representatives, and permitted successors and
assigns.
(b) The Company may assign any rights or obligations under
this Agreement without the prior written consent of Executive. This
Agreement will be binding upon and inure to the benefit of the Company
and its successors and assigns.
23. Third Party Beneficiaries. Each of the Employer Released Parties
that is not a party to this Agreement will be a third party beneficiary of this
Agreement. Each of the Employee Released Parties that is not a party to this
Agreement will be a third party beneficiary of this Agreement. This Agreement
will be enforceable by each such Employer Released Party and each such Employee
Released Party to the same extent as if the Releasee were a party hereto.
24. Return of Other Company Property. Executive agrees that he will,
within thirty (30) days after the Effective Date, return to the Company all of
its property not needed by him to act as consultant, and return to the Company
all property of the Company, including but not limited to, any Company credit
cards, keys, office furniture and equipment. The Company may cancel any Company
credit cards at any time.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
COMPANY: EXECUTIVE:
CAPITAL GROWTH SYSTEMS, INC.
/s/ Scott Allen
SCOTT ALLEN
By:/s/ Lee Wiskowski
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Its:Co-Chief Executive Officer Address:
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EXHIBIT A
EMPLOYMENT AGREEMENT
[Previously filed by the Company as an exhibit to its Annual Report on
Form 10-KSB, filed May 6, 2004 (SEC File No. 000-30831)]
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EXHIBIT B
INDEMNIFICATION PROVISION IN COMPANY'S BYLAWS
ARTICLE VII
INDEMNIFICATION AND INSURANCE
SECTION 1. DEFINITIONS. For the purposes of this Article VII the
following definitions shall apply:
"Agent" means any person who: (i) is or was an employee or other agent
of the corporation as determined from time to time by the board of directors; or
(ii)is or was serving at the request of the corporation as an employee or agent
of another foreign or domestic corporation, partnership, joint venture, trust or
other enterprise ("enterprise"); or (iii)was an employee or agent of a foreign
or domestic corporation which was a predecessor corporation of the corporation
or of another enterprise at the request of such predecessor corporation.
"Director" means any such person as defined by Article III of these
by-laws.
"Officer" means any such person as defined by Article IV of these
by-laws.
"Predecessor corporation" shall include any constituent corporations
(including any constituent of a constituent) absorbed in a consolidation or
merger which, if its separate existence had continued, would have had power and
authority to indemnify its directors, officers and agents, so that any person
who is or was an officer, director or agent of such constituent corporation, or
is or was serving at the request of such constituent corporation as an officer,
director or agent of another enterprise, shall stand in the same position under
and subject to the provisions of this Article VII (including, without
limitation, the provisions of Section 5 of this Article VII) with respect to the
resulting or surviving corporation as he would have with respect to such
constituent corporation if its separate existence had continued.
"Proceeding" means any threatened, pending or completed action or
proceeding, whether civil, criminal, administrative, or investigative and
whether internal or external to the corporation.
"Expenses" includes, without limitation, attorneys' fees and any
expenses of establishing a right to indemnification under this Article VII.
"Losses" mean the total amount which the agent becomes legally
obligated to pay in connection with any proceeding, including judgments, fines,
amounts paid in settlement and expenses.
SECTION 2. THIRD PARTY ACTIONS. The corporation shall indemnify any
person who was or is a party or is threatened to be made a party to, or
otherwise becomes involved in, any Proceeding (other than an action by or in the
right of the corporation) by reason of the fact that he is or was an Officer or
Director of the corporation and may at the discretion of the board of directors
indemnify any person who was or is a party or is threatened to be made a party
to, or otherwise becomes involved in, any Proceeding (other than an action by or
in the right of the corporation) by reason of the fact that he is or was an
Agent of the corporation against Losses paid in settlement actually and
reasonably incurred by him in connection with such Proceeding if he acted in
good faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the corporation, and, with respect to any criminal Proceeding,
had no reasonable cause to believe his conduct was unlawful. The termination of
any Proceeding by judgment, order, settlement, conviction, or upon a plea of
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nolo contendere or its equivalent, shall not, of itself, create a presumption
that the person did not act in good faith and in such a manner which he
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal Proceeding, had reasonable cause
to believe that his conduct was unlawful.
SECTION 3. ACTIONS BY OR IN THE RIGHT OF THE CORPORATION. The
corporation shall indemnify any person who was or is a party or is threatened to
be made a party to, or otherwise becomes involved in, any Proceeding by or in
the right of the corporation to procure a judgment in its favor by reason of the
fact that he is or was an Officer or Director of the corporation and may at the
discretion of the board of directors indemnify any person who was or is a party
or is threatened to be made a party to, or otherwise becomes involved in, any
Proceeding by or in the right of the corporation to procure a judgment in its
favor by reason of the fact that he is or was an Agent against Expenses actually
and reasonably incurred by him in connection with the defense or settlement of
such Proceeding if he acted in good faith and in a manner he reasonably believed
to be in or not opposed to the best interests of the corporation and except that
no indemnification shall be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable to the corporation
unless and only to the extent that the Courts of the State of Florida or the
court in which such Proceeding was brought shall determine upon application
that, despite the adjudication of liability but in view of all the circumstances
of the case, such person is fairly and reasonably entitled to indemnity for such
Expenses which the Courts of the State of Florida or such other court shall deem
proper.
SECTION 4. SUCCESSFUL DEFENSE. To the extent that an Officer or
Director of the corporation has been successful on the merits or otherwise in
defense of any Proceeding referred to in Sections 2 and 3 of this Article VII,
or in defense of any claim, issue or matter therein, he shall be indemnified
against Expenses actually and reasonably incurred by him in connection
therewith. To the extent that an Agent of the corporation has been successful on
the merits or otherwise in defense of any Proceeding referred to in Sections 2
and 3 of this Article VII, or in defense of any claim, issue or matter therein,
he may, at the discretion of the board of directors, be indemnified against
Expenses actually and reasonably incurred by him in connection therewith.
SECTION 5. DETERMINATION OF CONDUCT. Any indemnification under Sections
2 and 3 of this Article VII, (unless ordered by a court) shall be made by the
corporation only as authorized in the specific case upon a determination that
indemnification of the Officer, Director or Agent is proper in the circumstances
because he has met the applicable standard of conduct set forth in Sections 2
and 3 of this Article VII. Such determination shall be made by the Board of
Directors by a majority vote of directors.
SECTION 6. PAYMENT OF EXPENSES IN ADVANCE. Expenses incurred by an
Officer or Director in connection with a Proceeding shall be paid by the
corporation in advance of the final disposition of such Proceeding upon receipt
of an undertaking by or on behalf of such Officer or Director to repay such
amount if it shall ultimately be determined that he is not entitled to be
indemnified by the corporation as authorized in this Article VII. Expenses
incurred by an Agent in connection with a Proceeding may be paid by the
corporation in advance of the final disposition of such Proceeding upon receipt
of an undertaking by or on behalf of such Agent to repay such amount if it shall
ultimately be determined that he is not entitled to be indemnified by the
corporation as authorized in this Article VII.
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SECTION 7. INDEMNITY NOT EXCLUSIVE. The indemnification and advancement
of Expenses provided by, or granted pursuant to, the other provisions of this
Article VII shall not be deemed exclusive of any other rights to which a person
seeking indemnification or advancement of Expenses may be entitled under any
by-law, agreement, vote of shareholders or disinterested directors, or
otherwise, both as to action in his official capacity and as to action in
another capacity while holding such office.
SECTION 8. INSURANCE INDEMNIFICATION. The corporation shall have the
power to purchase and maintain insurance on behalf of any person who is or was
an Officer Director or Agent of the corporation against any liability asserted
against him and incurred by him in any such capacity, or arising out of his
status as such, whether or not the corporation would have the power to indemnify
him against such liability under the provisions of this Article VII.
SECTION 9. HEIRS, EXECUTORS AND ADMINISTRATORS. The indemnification and
advancement of Expenses provided by, or granted pursuant to, this Article VIII
shall, unless otherwise provided when authorized or ratified, continue as to a
person who has ceased to be an Officer or Director and shall inure to the
benefit of the heirs, executors and administrators of such a person. The
indemnification and advancement of Expenses provided by, or granted pursuant to,
this Article VII may, at the discretion of the board of directors, continue as
to a person who has ceased to be an Agent and shall inure to the benefit of the
heirs, executors and administrators of such a person.
SECTION 10. FURTHER AMENDMENT. Notwithstanding any provision in this
Article VII to the contrary, in the event the Business Corporation Act of the
State of Florida is either amended to provide, or interpreted by judicial or
other binding legal decision to provide, broader indemnification rights than
those contained herein, such broader indemnification rights shall be provided to
any and all persons entitled to be indemnified pursuant to the Business
Corporation Act of the State of Florida, the intent of this provision being to
permit the corporation to indemnify, to the full extent permitted by the
Business Corporation Act of the State of Florida, persons whom it may indemnify
thereunder.
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