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Severance Agreement - Tel-Save.com Inc. nd Daniel M. Borislow

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                               SEVERANCE AGREEMENT

          THIS SEVERANCE  AGREEMENT (this "Agreement") is entered into as of the
__  day  of  December,  1998,  by  and  among  Tel-Save.com,  Inc.,  a  Delaware
corporation (the "Company"),  and Daniel M. Borislow,  Chairman of the Board and
Chief Executive  Officer of the Company  ("Borislow").  The Company and Borislow
shall sometimes be referred to herein individually as a "Party" and collectively
as the "Parties."

                                    RECITALS

     A.   Borislow  is  presently  the  Chairman  of the  Board  and  the  Chief
          Executive Officer of the Company.

     B.   Concurrently  herewith,  the Company and Borislow  are  entering  into
          certain   other   agreements   referred   to  in   Section   8  hereof
          (collectively, the "Other Agreements").

     C.   In  connection  with the Other  Agreements,  Borislow  and the Company
          desire to enter into  several  agreements  with each other,  including
          agreements  related to the resignation by Borislow of his positions as
          a director and an officer of the Company and each of its subsidiaries.

          NOW, THEREFORE, in consideration of entering into the Other Agreements
and the covenants and agreements  hereinafter set forth,  and for other good and
valuable   consideration   the  receipt   and   adequacy  of  which  are  hereby
acknowledged, the Parties hereby agree as follows.


          1.   Employment  by  Borislow;   Resignation  of  Positions  with  the
               Company.

               1.1  That certain Employment  Agreement dated September __, 1995,
                    by and between the Company  and  Borislow  (the  "Employment
                    Agreement") is hereby  terminated,  effective as of the date
                    hereof, except to the extent hereinafter expressly provided.
                    Borislow  shall be  entitled to no further  compensation  or
                    benefits  under  the  Employment  Agreement  after  the date
                    hereof.

               1.2  Borislow  acknowledges  and agrees that: (a) the Company has
                    not committed any default  under the  Employment  Agreement;
                    Borislow has no claim of any nature  whatsoever  against the
                    Company  or any  of  its  affiliates  under  the  Employment
                    Agreement  or  otherwise  (a  "Claim,"  except that the term
                    Claim shall not include any rights or claims  arising  under
                    this Agreement or the


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                    agreements  entered  into  between the Company and  Borislow
                    concurrently  herewith);  and  Borislow  hereby  waives  and
                    relinquishes any and all Claims.

              1.3   Section 7 of the Employment  Agreement  shall remain in full
                    force and effect, except that

                    1.3.1    The  first   paragraph   of  Section  7(a)  of  the
                             Employment  Agreement is hereby  amended to read in
                             full as follows:

                    "(a) The  Employee  acknowledges  and agrees that he has had
                    and might continue to have access to secret and confidential
                    information   of  the   Company   and  that  the   following
                    restrictive  covenant is necessary to protect the  interests
                    and  continued  success of the Company.  Except as otherwise
                    expressly  consented  to in  writing by the  Company,  for a
                    period of eighteen  (18)  months  after the date hereof (the
                    "Restricted  Period"),  the Employee shall not,  directly or
                    indirectly,  acting  as  an  employee,  owner,  shareholder,
                    partner,   joint   venturer,   officer,   director,   agent,
                    salesperson,  consultant, adivsor, investor, or principal of
                    a corporation or other business entity:"

                    1.3.2    Sections  7(a)(i)-(iii) are hereby deleted in favor
                             of Section 3 hereof.

                    1.3.3    The remainder  of  Section  7  of  the   Employment
                             Agreement, including  without  limitation  Sections
                             7(b)through (g) thereof, shall remain in full force
                             and effect.

               1.4  The  Employee's   Invention   Assignment  and   Confidential
                    Information  Agreement attached to the employment  Agreement
                    as Exhibit A shall remain in full force and effect.

               1.5  Any  and  all  rights  and  claims  of the  Company  against
                    Borislow shall be unaffected by such termination and by this
                    Agreement.

               1.6  Borislow hereby agrees to resign,  not later than January 7,
                    1999, and effective as of the date of such resignation, as a
                    director  of the  Company,  as the  Chairman of the Board of
                    Directors of the Company,  as the Chief Executive Officer of
                    the Company and as a director  and an officer of each of the
                    subsidiaries of the Company.


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<PAGE>


          2.   Severance Payment.

               2.1  The  Company   shall  pay  Borislow   one  million   dollars
                    ($1,000,000)   as  a  severance   payment  (the   "Severance
                    Payment").

               2.2  The  Severance  Payment,  net  of  withholding  and  similar
                    requirements  imposed  by  applicable  law,  shall be offset
                    against  amounts  owed  by  Borislow  to the  Company  as of
                    January 4, 1999.

               2.3  The  Company  shall  have the  right to offset  against  its
                    obligations to make any installment of the Severance Payment
                    any  amount  that  the  Company  alleges  is  owed  to it by
                    Borislow at the time that such installment is due.

          3.   Non-Competition and Non-Solicitation.

               3.1  During  the one  (1)  year  period  commencing  on the  date
                    hereof,  which period shall be automatically  extended by an
                    amount  of time  equal to any  amount of time  during  which
                    Borislow   is   in    violation   of   this   Section   (the
                    Non-Competition  Period),  Borislow  shall not,  without the
                    prior  written  consent  of  the  Company,   engage  in  any
                    Competitive Activity anywhere in the world.

               3.2  The term Competitive  Activity shall mean any  participation
                    in,  assistance of, employment by, ownership of any interest
                    in,  acceptance  of business  from,  engagement  in business
                    with, or  assistance,  promotion,  or  organization  of, any
                    person,  partnership,  corporation,  firm,  association,  or
                    other business organization, entity, or enterprise (i) that,
                    directly  or  indirectly,  is  engaged  in,  or  hereinafter
                    engages  in,  research  on,  or   development,   production,
                    marketing,  leasing, or selling of, any product, process, or
                    service that is the same as,  similar to, or in  competition
                    with,  any line of business or research in which the Company
                    is  engaged  at the date  hereof;  provided,  however,  that
                    Competitive Activity shall not include the employment of Mr.
                    Borislow by Communications  TeleSystems International d.b.a.
                    WorldxChange  Communications;  and  provided  further,  that
                    Competitive  Activity  shall  not  include  the  holding  by
                    Borislow for  investment of less than 1% of the  outstanding
                    securities  of  any   corporation  if  such  securities  are
                    regularly traded on a recognized stock exchange.

               3.3  During  the  Non-Competition  Period,  Borislow  shall  not,
                    directly  or  indirectly,  either  for  his own  benefit  or
                    purposes or for the benefit or purposes of any other  person
                    or entity,  solicit,  call on,  interfere  with,  accept any
                    business  from,  attempt to divert or entice away any person
                    or entity who is a customer  or client of the Company or who
                    was a client or customer of the Company within the 24 months
                    preceding the date hereof.



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<PAGE>


               3.4  During  the  Non-Competition  Period,  Borislow  shall  not,
                    directly or indirectly,  employ or offer to employ, call on,
                    solicit,  interfere  with,  attempt to divert or entice away
                    any employee or  independent  contractor  of the Company (or
                    any  person  whose  employment  or status as an  independent
                    contractor  with the  Company has  terminated  within the 24
                    months preceding the date hereof) in any capacity.

          4.   Consulting.

               4.1  Borislow   agrees  that  for  a  period  of  two  (2)  years
                    commencing on the date hereof (the "Consulting  Period"), he
                    will  provide  consulting   services  to  the  Company  (the
                    "Services").

               4.2  Borislow  shall provide up to two hundred (200) hours of the
                    Services  per  year at  times  reasonably  requested  by the
                    Company and reasonably convenient to Borislow.

               4.3  Borislow shall be  compensated  for the Services at the rate
                    of five  hundred  dollars  ($500) per hour.  Borislow  shall
                    provide the Company  with an invoice for  Services  rendered
                    not more frequently than each calendar month. If the Company
                    does not dispute  such  invoice,  the Company  shall pay the
                    amount  of  such  invoice  promptly  after  receipt  of such
                    invoice by the Company.

               4.4  Borislow  agrees that during the  Consulting  Period he will
                    not enter into any agreement, understanding, or relationship
                    that would  prohibit the  performance of the Services by him
                    or that would  create a conflict of interest  with regard to
                    the performance of the Services.

          5.   Health and Medical Benefits.

               5.1  For the two (2) year  period  commencing  on the date hereof
                    (the "Benefits Period"),  the Company shall provide Borislow
                    with the health and medical  benefits  described  in Section
                    5.2 hereof (the "Benefits").

               5.2  The  Benefits  shall  be equal to the  greater  of:  (a) the
                    health and  medical  benefits  provided  to  Borislow by the
                    Company  immediately  prior to the execution and delivery of
                    this  Agreement;  or (b) the  health  and  medical  benefits
                    provided  by the  Company  from  time  to  time  during  the
                    Benefits Period to any other employee of the Company.


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<PAGE>


          6.   Director and Officer Insurance.

               6.1  For the five (5) year period  commencing  on the date hereof
                    (the  "Insurance  Period"),  the Company shall  maintain its
                    director  and  officer  insurance  policy  with  benefits as
                    described in Section 6.2 hereof (the "Benefits").

               6.2  The Benefits  shall be equal to or greater than the benefits
                    currently  provided under the Company's present director and
                    officer insurance policy.

          7.   Automobiles.

               7.1  Borislow currently is using certain automobiles owned by the
                    Company and  identified on Exhibit A attached  hereto and by
                    this reference incorporated herein (the "Automobiles").

               7.2  Promptly  after  the  execution  and  delivery  hereof,  the
                    Company shall transfer title to the  Automobiles to Borislow
                    and shall deliver  possession to the Automobiles to Borislow
                    at the headquarters offices of the Company.

               7.3  Title  to  and  possession  of  the  Automobiles   shall  be
                    transferred  to Borislow  "as is" and "where is" without any
                    representation  or  warranty  of any  kind  by the  Company.
                    Borislow shall defend and hold the Company harmless from all
                    claims,  damages,  litigation,  liabilities  and all matters
                    whatsoever regarding the Automobiles.

          8.   Other Agreements.

               8.1  Concurrently   with  the  execution  and  delivery  of  this
                    Agreement,  the Company and Borislow are entering  into each
                    of  the  following   agreements,   and  certain   agreements
                    pertaining thereto:

                    8.1.1    Purchase   Agreement   Regarding   the   Stock   of
                             Emergency Transportation Corporation

                    8.1.2    Agreement for Purchase and Sale of Real Property

                    8.1.3    Lease of Real Property

                    8.1.4    Registration Rights Agreement

               8.2  The  effectiveness  of this  Agreement and of each Agreement
                    set forth in Section 8.1 is  conditioned  upon the execution
                    and delivery of each of such agreements.



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<PAGE>

          9.   Miscellaneous.

               9.1  Effectiveness.   The  effectiveness  of  this  Agreement  is
                    conditioned  upon  the  effectiveness  of each of the  Other
                    Agreements.

               9.2  Costs and  Expenses.  Each party hereto shall pay its or his
                    own costs and expenses in connection with this Agreement and
                    the  transactions  contemplated  hereby,  including  without
                    limitation  the costs and expenses of its or his  attorneys,
                    accountants,  advisors,  finders,  brokers, and other agents
                    and representatives.

               9.3  Notices.  All notices  which are required or permitted to be
                    given  pursuant to the terms of this  Agreement  shall be in
                    writing and shall be  sufficient in all respects if given in
                    writing  and  delivered  personally  or by  telegraph  or by
                    registered or certified mail, postage prepaid, as follows:

                    If to the Company:

                             Tel-Save.com, Inc.
                             6805 Route 202
                             New Hope, PA  18938
                             Attention:  General Counsel

                    With a copy to:

                             Arnold & Porter
                             777 S. Figueroa Street, 44th Floor
                             Los Angeles, CA  90017
                             Attention:  Theodore G. Johnsen

                    If to Borislow:

                             Daniel M. Borislow
                             8234 Horseshoe Bay Road
                             Boynton Beach, FL  33437

                    Notice  shall be  deemed  to have been  given  upon  receipt
                    thereof as to communications  that are personally  delivered
                    or  telegraphed  and five (5) days after deposit of the same
                    in any United  States  mail post  office box in the state to
                    which the  notice  is  addressed,  or seven  (7) days  after
                    deposit  of same in any such post  office  box other than in
                    the state to which the notice is addressed, postage prepaid,
                    addressed  as set forth  above.  Notice  shall not be deemed
                    given under the preceding  sentence  unless and until notice
                    shall  be  given  to all  addressees  above  other  than the
                    sender. The addresses



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<PAGE>

                    and  addressees  for  the  purpose  of this  Section  may be
                    changed  by  giving  written  notice  of such  change in the
                    manner provided  herein for giving notice.  Unless and until
                    such written  notice is given,  the addresses and addressees
                    as stated by prior written notice,  or as provided herein if
                    no written notice of change has been given,  shall be deemed
                    to continue in effect for all purposes hereunder.

               9.4  Survival of Representations and Warranties.  Notwithstanding
                    any   investigation   made   by  any   party   hereto,   all
                    representations and warranties made herein shall survive the
                    execution and delivery of this Agreement.

               9.5  Applicable  Law. This  Agreement and all documents  executed
                    and  delivered  in  connection  herewith  and the rights and
                    obligations  of the  parties  hereto  and  thereto  shall be
                    governed by and construed in accordance with the laws of the
                    State of New York other than and  without  giving  effect to
                    the laws of the State of New York relating to choice of law.

               9.6  Applicable  Jurisdiction.  The parties hereby agree that any
                    action, at law or in equity, arising under this Agreement or
                    any  of  the  other  documents  executed  and  delivered  in
                    connection herewith, shall be filed in and only in the state
                    courts of the  State of New York for the  County of New York
                    or a United States  District Court in the State of New York.
                    The  parties  hereby  consent  and submit to the in personam
                    jurisdiction  of such courts for purposes of litigating  any
                    such action.

               9.7  Assignments. This Agreement and the other documents executed
                    and delivered in connection  herewith  shall be binding upon
                    and inure to the  benefit  of the  parties  hereto and their
                    respective  personal  and  legal   representatives,   heirs,
                    successors,  and assigns;  provided,  however, that no party
                    hereto  may assign or  transfer  its or his rights in and to
                    this Agreement or any other document  executed and delivered
                    in connection herewith, without the prior written consent of
                    the other  parties  hereto,  except that Borislow may assign
                    his rights under the Purchase Agreement  Regarding the Stock
                    of Emergency Transportation Corporation and his rights under
                    the Agreement for Purchase and Sale of Real Property and his
                    rights under the Lease of Real Property, all such agreements
                    being  referred to in Section 8 hereof,  but Borislow  shall
                    remain obligated to perform his duties and obligations under
                    those   agreements   unless  the  Company  shall   otherwise
                    expressly provide in writing.

               9.8  Entire  Agreement.  Except as otherwise  expressly set forth
                    herein,  this Agreement and the Other Agreements  embody the
                    complete


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<PAGE>

                    agreement and  understanding  among the Parties with respect
                    to the subject  matter  hereof and supersede and preempt any
                    prior understandings,  agreements,  or representations by or
                    among the Parties,  written or oral,  which may have related
                    to the subject matter hereof in any way.

               9.9  Severability.  Whenever  possible,  each  provision  of this
                    Agreement  will  be  interpreted  in  such  manner  as to be
                    effective  and  valid  under  applicable  law,  but  if  any
                    provision of this  Agreement is held to be  prohibited by or
                    invalid  under   applicable  law,  such  provision  will  be
                    ineffective  only  to the  extent  of  such  prohibition  or
                    invalidity,  without  invalidating  the  remainder  of  this
                    Agreement.

               9.10 Counterparts.  This Agreement may be executed in two or more
                    counterparts,   any  one  of  which  need  not  contain  the
                    signatures of more than one Party, but all such counterparts
                    taken together will constitute one and the same Agreement.

               9.11 Descriptive  Headings.  The  descriptive  headings  of  this
                    Agreement  are  inserted  for  convenience  only  and do not
                    constitute a part of this Agreement.

               9.12 Terminology.  As  used  in this  Agreement,  the  masculine,
                    feminine,  or  neuter  gender,  and the  singular  or plural
                    number,  shall be deemed to include the others  whenever the
                    context so indicates or requires.

               9.13 Legal Fees. If any legal action or any  arbitration or other
                    proceeding is brought for the enforcement or  interpretation
                    of  this  Agreement,  or  because  of  an  alleged  dispute,
                    default, misrepresentation, or breach in connection with any
                    of the  provisions  of this  Agreement,  the  successful  or
                    prevailing  party or parties  shall be  entitled  to recover
                    reasonably  attorneys'  fees,  expenses,   and  other  costs
                    incurred  in that  action or  proceeding  in addition to any
                    other relief to which it or he may be entitled. The right to
                    such attorneys' fees, expenses, and costs shall be deemed to
                    have accrued upon the  commencement of such action and shall
                    be  enforceable  whether or not such action is prosecuted to
                    judgment.

               9.14 Broker's or Finder's Fees. Each of the Parties represents to
                    each of the others that it or he does not have any liability
                    to any  broker  or any  representative,  nor  owe any fee or
                    compensation to any agent,  finder, or broker, in connection
                    with the subject matter of this Agreement,  and each of them
                    hereby agrees to indemnify and hold harmless the other Party
                    against any liability, damage, cost, or



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                    expense (including  reasonable  attorneys' fees) incurred by
                    reason of the breach of the foregoing representation.

               9.15 Advice of Counsel.  Each Party has  carefully  reviewed this
                    Agreement, is familiar with the terms and conditions herein,
                    and was advised by legal counsel with respect thereto.  Each
                    Party agrees that the terms and  conditions set forth herein
                    are fair and not unconscionable.

               9.16 Relationship of the Parties. Nothing in this Agreement shall
                    create   a   partnership,    joint    venture,    employment
                    relationship,  or any other relationship between the Parties
                    other than the relationship of independent contractors.

               9.17 Further  Cooperation.  Each  Party  covenants  and agrees to
                    prepare,  execute,  acknowledge,  file, record, publish, and
                    deliver  to  the  other   Party   such  other   instruments,
                    documents,  and statements  including,  without  limitation,
                    instruments  and  documents  of  assignment,  transfer,  and
                    conveyance,  and take such other action as may be reasonably
                    necessary or convenient in the  discretion of the requesting
                    Party to carry out more  effectively  the  purposes  of this
                    Agreement.

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               9.18 Modifications.  This Agreement may not be altered,  amended,
                    changed,  waived,  terminated,  or  modified  in any  manner
                    unless  the same  shall be in  writing  and  signed by or on
                    behalf of the Party to be bound.


                                         Tel-Save.com, Inc.

                                         By________________________
                                           Name
                                           Title

                                         Daniel M. Borislow


                                         ---------------------------



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