SEPARATION AGREEMENT AND MUTUAL RELEASE
This Separation Agreement and Mutual Release ("Agreement") is made
by and among
SURFNETMEDIA GROUP, INC., a Delaware corporation ("SurfNet"),
SURFNET NEW MEDIA,
INC., an Arizona corporation (the "Subsidiary") and JAMES P. HAUGHT
("Haught").
SurfNet and the Subsidiary are sometimes hereinafter referred to
collectively as
the "Company." The Company and Haught are sometimes hereinafter
referred to
collectively as the "Parties."
RECITAL:
A. Haught has been an employee and officer of the Company since
July 2003
and has been a director of SurfNet since May 2002 and a director of
the
Subsidiary since July 2003.
B. The Parties have mutually agreed to terminate their business
relationship, to release each other from any claims arising from or
related to
this relationship and to enter into this Agreement.
In consideration of the mutual promises made herein and other
valuable
consideration, receipt of which is hereby acknowledged, the Parties
agree as
follows:
1. TERMINATION OF EMPLOYMENT; SERVICE ON BOARD OF DIRECTORS. Haught
and the
Company acknowledge and agree that Haught's employment as Chief
Executive
Officer and President of the Company and service on the Board of
Directors
of the Company terminated effective at the close of business on
March 2,
2004 (the "Termination Date").
2. SEVERANCE BENEFIT. In consideration for the release of claims
set forth
below and other obligations under this Agreement, and provided this
Agreement is signed by Haught and not revoked under Section 7
herein, and
further provided that Haught remains in full compliance with his
obligations to the Company under this Agreement, the Company will
pay
Haught as a severance benefit the payment of two thousand five
hundred
dollars ($2,500.00) per month for an eight-month period (the
"Severance
Period"). Each severance payment will be reduced by applicable tax
withholding and will be paid in accordance with the Company's
regular
payroll schedule and practices. The first severance payment will be
made on
the first regular payroll date following the Effective Date of this
Agreement (as defined in Section 18 below).
3. EMPLOYEE BENEFITS. Haught will not be entitled to participate in
any of the
Company's benefit plans or programs offered to employees of the
Company
after the Termination Date.
4. STOCK INTERESTS.
a. CERTIFICATE #1267. The Company acknowledges that Haught has full
right, title and interest in and to ten thousand (10,000) shares of
1
the Company's restricted common stock represented by Certificate
#1267
issued to him on June 11, 2003.
b. CERTIFICATE #1352. In addition to the stock described in Section
4.a.,
in consideration of Haught's guaranty of a line of credit issued to
the Company by Wachovia Bank in September 2003 and the delivery of
his
personal services to the Company from July 2003 through March 2004,
Haught will be entitled to retain one hundred forty thousand
(140,000)
shares of the Company's restricted common stock out of three
hundred
thousand (300,000) shares issued to him subject to substantial risk
of
forfeiture pursuant to a Term Sheet dated July 15, 2003. Upon
execution hereof, Haught will surrender Certificate #1352
representing
the three hundred thousand (300,000) shares, whereupon the Company
will direct its transfer agent to issue a new certificate in lieu
thereof for one hundred forty thousand (140,000) shares (the
"Vested
Shares"). The Vested Shares will have registration rights as
provided
in the Registration Rights Agreement between Haught and the Company
of
even date herewith attached hereto as Exhibit A.
5. NO OTHER PAYMENTS DUE. Haught agrees that the Company paid to
Haught on or
before the Termination Date his accrued salary, accrued vacation
and other
sums as were then due to Haught through such date. By executing
this
Agreement, Haught hereby acknowledges receipt of all such payments.
6. RELEASE OF CLAIMS. In consideration for the obligations of both
Parties set
forth in this Agreement, Haught and the Company, on behalf of
themselves,
and their respective heirs, executors, officers, directors,
employees,
investors, stockholders, administrators and assigns, hereby fully
and
forever release each other and their respective heirs, executors,
officers,
directors, employees, investors, stockholders, administrators,
predecessor
and successor corporations and assigns, of and from any claim,
duty,
obligation or cause of action relating to any matters of any kind,
whether
presently known or unknown, suspected or unsuspected, that any of
them may
possess arising from any omissions, acts or facts that have
occurred up
until and including the date of this Agreement including, without
limitation:
(1) any and all claims relating to or arising from Haught's
employment and directorship relationships with the Company and
the termination of those relationships;
(2) any and all claims relating to, or arising from, Haught's right
to purchase, or actual purchase of shares of stock of the
Company;
(3) any and all claims for wrongful discharge of employment; breach
of contract, both express and implied; breach of a covenant of
good faith and fair dealing, both express and implied, negligent
2
or intentional infliction of emotional distress; negligent or
intentional misrepresentation; negligent or intentional
interference with contract or prospective economic advantage;
negligence; and defamation;
(4) any and all claims for violation of any federal, state or
municipal statute, including, but not limited to, Title VII of
the Civil Rights Act of 1964, the Civil Rights Act of 1991, the
Age Discrimination in Employment Act of 1967, the federal and
state family leave acts, the Older Workers' Benefit Protection
Act and the Americans with Disabilities Act of 1990;
(5) any and all claims arising out of any other laws and
regulations
relating to employment or employment discrimination; and
(6) any and all claims for attorneys' fees and costs.
The Company and Haught agree that the release set forth in this
Section 6 will be and remain in effect in all respects as a
complete
general release as to the matters released. This release does not
extend to any obligations incurred or specified under this
Agreement.
7. ACKNOWLEDGMENT OF WAIVER OF CLAIM
