Exhibit 10.1

 

SETTLEMENT AND RELEASE AGREEMENT

 

THIS SETTLEMENT AND RELEASE AGREEMENT ("Agreement" or “Release”) is entered into
between Tumbleweed Communications Corp. (“Tumbleweed” or the "Company") and
Craig D. Brennan (“Brennan”) (together the "Parties").

 

WHEREAS, Brennan was employed by the Company as its Chief Executive Officer
pursuant to the terms of the Employment Agreement between the Company and
Brennan, dated June 30, 2005 (the "Employment Agreement");

 

WHEREAS, Brennan resigned his employment with the Company as of January, 9, 2006
(the "Separation Date"); and

 

WHEREAS, Brennan resigned his officership and directorship of the Company and
his directorship of Tumbleweed Communications Pty. Limited effective January 9,
2006; and

 

WHEREAS, the Parties desire to fully and completely settle and dispose of all
matters between them, specifically including, but not limited to, all matters
relating to Brennan's employment with and separation from the Company and his
directorship and officership of the Company and from his directorship of
Tumbleweed Communications Pty. Limited.

 

NOW THEREFORE, in consideration of the mutual covenants and agreements set forth
hereinafter, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, Brennan and the Company, each
intending to be legally bound, hereby agree as follows:

 

 

1.

CONSIDERATION.

 

a.           In consideration of Brennan's release of all claims and other
covenants and agreements contained herein, on the fifth (5th) day after the
Effective Date of this Agreement (defined in Paragraph 5(b) infra), the Company
shall mail to Brennan the sum of $95,501.00, less all applicable tax withholding
(the "Settlement Payment").

 

b.           Brennan acknowledges and agrees that the Settlement Payment is in
addition to any unpaid wages, expense reimbursements and accrued but unused
vacation earned through the Separation Date and Brennan acknowledges and agrees
that he has been paid all such sums owed.

 

 

2.

RELEASES.

 

a.            In exchange for the Settlement Payment paid pursuant to Section 1
above, Brennan, on behalf of himself, his spouse, if any, heirs, estate,
executors,

 

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administrators, insurers, attorneys, successors and assigns (hereinafter
referred to as “Brennan Releasees”) hereby fully release and forever discharge
the Company and all of its former and present parents, subsidiaries,
predecessors, successors and assigns, affiliates, divisions, licensees,
including but not limited to Tumbleweed Communications Pty. Limited,
(“Tumbleweed Entity”) as well as each of their former and present officers,
directors, shareholders, joint ventureres, agents, partners, attorneys,
representatives, employees, assigns, insurers, and all other persons, entities
and corporations and partnerships acting on its behalf (hereinafter referred to
as the "Brennan-Released Parties"), from any and all claims, debts, costs,
expenses, liens, charges, complaints, injuries, liabilities, obligations,
damages, demands, and causes of action of any kind, nature and description,
whether known or unknown, suspected or unsuspected, fixed or contingent,
including but not limited to any attorneys’ fees, which Brennan Releasees have,
owns or claims to have or own or at any time heretofore had, owned or claimed to
have owned upon or by reason of any matter, cause or thing heretofore occurring,
including any continuing effects. This Release specifically extends to, without
limitation, any claims or causes of action for wrongful termination, breach of
an express or implied contract, breach of the covenant of good faith and fair
dealing, breach of fiduciary duty, fraud, misrepresentation, defamation,
slander, infliction of emotional distress, personal injury, loss of future
earnings, and any claims under the California constitution, the United States
Constitution and any applicable state and federal fair employment laws,
employment opportunity laws and labor statues and regulations, including, but
not limited to, the Civil Rights Act of 1964, as amended, the Age Discrimination
in Employment Act, as amended (the "ADEA"), the Older Workers Benefit Protection
Act, as amended, the Fair Labor Standards Act, as amended, the Americans With
Disabilities Act of 1990, as amended, the Rehabilitation Act of 1973, as
amended, Section 806 of the Sarbanes-Oxley Act, the Worker Adjustment and
Retraining Notification Act, as amended, the Employee Retirement Income Security
Act of 1974, as amended, the Family and Medical Leave Act, the California Fair
Employment and Housing Act, as amended, the California Family Rights Act, as
amended and the California Labor Code, specifically including, but not limited
to, California Labor Code Section 1400 et seq.

 

Brennan agrees not to file in any jurisdiction any claim, charge, action or
complaint concerning any matter referred to in this Agreement, with the
exception of any claim that he may have as to the validity of this Agreement
under the ADEA as amended by the OWBPA. If he has previously filed any claims,
other than relating to the validity of this Agreement under the ADEA, he agrees
to immediately withdraw and dismiss any and all such claims, charges, complaints
or causes of action.

 

b.           In exchange for the good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, Tumbleweed fully releases and
forever discharges Brennan from any and all liability upon any and all claims,
charges, complaints, liens, demands, causes of action, obligations or damages,
known or unknown, suspected or unsuspected, that Tumbleweed had, now has or may
hereafter claim to have against Brennan arising out of or relating in any way
to: (i) the Employment Agreement; (ii) Brennan’s hiring by, employment with,
association with or

 

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separation from the Company; or (iii) any event, series of events, occurrences,
acts or omissions relating in any way to Brennan occurring at any time up to the
date of this Agreement (the "Release"). This Release specifically extends to,
without limitation, any claims or causes of action for wrongful termination,
breach of an express or implied contract, breach of the covenant of good faith
and fair dealing, breach of fiduciary duty, fraud, misrepresentation,
defamation, slander, infliction of emotional distress, personal injury, loss of
future earnings, and any claims under the California constitution, the United
States Constitution and any applicable state and federal fair employment laws,
employment opportunity laws and labor statues and regulations, including, but
not limited to, the Civil Rights Act of 1964, as amended, the Age Discrimination
in Employment Act, as amended (the "ADEA"), the Older Workers Benefit Protection
Act, as amended, the Fair Labor Standards Act, as amended, the Americans With
Disabilities Act of 1990, as amended, the Rehabilitation Act of 1973, as
amended, Section 806 of the Sarbanes-Oxley Act, the Worker Adjustment and
Retraining Notification Act, as amended, the Employee Retirement Income Security
Act of 1974, as amended, the Family and Medical Leave Act, the California Fair
Employment and Housing Act, as amended, the California Family Rights Act, as
amended and the California Labor Code, specifically including, but not limited
to, California Labor Code Section 1400 et seq.

 

 

3.

WAIVERS.

 

a.            Brennan for himself and on behalf of the Brennan Releasees
expressly waives all rights afforded by Section 1542 of the Civil Code of the
State of California ("Section 1542") with respect to the Brennan-Released
Parties. Section 1542 states 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.

 

Notwithstanding the provisions of Section 1542, and for the purpose of
implementing a full and complete release, Brennan for himself and on behalf of
the Brennan Releasees understands and agrees that this Agreement is intended to
include all claims, if any, which Brennan and the Brennan Releasees may have and
which Brennan and the Brennan Releasees do not now know or suspect to exist in
his favor against the Brennan-Released Parties and that this Agreement
extinguishes those claims.

 

b.           Tumbleweed expressly waives all rights afforded by Section 1542 of
the Civil Code of the State of California ("Section 1542") with respect to
Brennan. Section 1542 states 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

 

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BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.

 

Notwithstanding the provisions of Section 1542, and for the purpose of
implementing a full and complete release, Tumbleweed understands and agrees that
this Agreement is intended to include all claims, if any, which Tumbleweed may
have and which Tumbleweed does not now know or suspect to exist in his favor
against Brennan and that this Agreement extinguishes those claims.

 

4.            NO REEMPLOYMENT. Brennan specifically waives any claim or right to
reemployment with any Tumbleweed Entity. Brennan agrees not to seek or accept
employment in any position with any Tumbleweed Entity at any location either
presently or at any future time. Brennan further agrees that if he seeks
employment with any Tumbleweed Entity in violation of this Agreement, the hiring
entity shall have the right immediately and unconditionally to deny or terminate
his employment without any reason or cause and without recourse by him.

 

5.            REVIEW AND REVOCATION RIGHTS. Brennan understands that he is
waiving his rights under the ADEA and thus:

 

a.          Brennan agrees that he is executing this Agreement voluntarily with
full knowledge of its legal significance. Brennan states that he has been given
at least twenty-one (21) calendar days in which to consider this Agreement, if
he wishes to take that much time.

 

b.           Brennan has been informed and states that he understands that for a
period of seven (7) days after he signs this Agreement, he may revoke this
Agreement. This Agreement shall not become effective until seven (7) days from
the date Brennan signs this Agreement, provided at no time while he has the
right, he revokes this Agreement (the “Effective Date”). If he revokes this
Agreement during the seven (7) day period, the entire Agreement shall be null
and void and bind no party to any term herein. If Brennan chooses to revoke this
Agreement he must do so in writing and the written revocation must be delivered
no later than midnight the seventh (7) day after he signs this Agreement by fax
and to Cynthia L. Jackson, Esq., Baker & McKenzie, LLP, 660 Hansen Way, Palo
Alto, California, 94304, fax number (650) 856-9299 and a copy of the written
revocation shall also be mailed to Ms. Jackson at the address above at the same
time it is faxed to her.

c.           Brennan agrees that prior to signing this Agreement, he read and
understood each and every provision of this Agreement and that he consulted with
an attorney of his choosing regarding the effect of each and every provision of
this Agreement.

 

d.           Brennan acknowledges and agrees that he knowingly and voluntarily
entered into this Agreement with complete understanding of all relevant facts,
and that he was neither fraudulently induced nor coerced to enter into this
Agreement.

 

 

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6.            REPRESENTATIONS. Brennan makes the following representations, each
of which is an important consideration to the Company's willingness to enter
into this Agreement with Brennan:

 

a.           Brennan acknowledges that the Company is not entering into this
Agreement because it believes that the Brennan Releasees have any cognizable
legal claim against the Brennan-Released Parties. If Brennan elects not to sign
this Agreement, the fact that this Agreement was offered will not be understood
as an indication that the Brennan-Released Parties believed Brennan was
discriminated against or that the Brennan Releasees were treated unlawfully in
any respect.

 

b.           Brennan is aware that, by signing this Agreement, which includes a
release and waiver of all claims, the Brennan Releasees are giving up any right
to sue the Brennan-Released Parties for any claims which the Brennan Releasees
have or believes to have based upon any event which occurred on or before the
date that this Agreement is signed.

 

7.           NON-DEFAMATION. Brennan hereby agrees that he shall not, at any
time, make, directly or indirectly, any oral or written statements that defame
the Company, the products and services it offers or any of its affiliates,
successors and assigns, including but not limited to Tumbleweed Communications
Pty. Limited, or any of its present or former officers, directors, agents or
employees. Tumbleweed hereby agrees that its officers and directors shall not,
at any time, make, directly or indirectly, any oral or written statements that
defame Brennan.

 

8.            REFERENCE. The Company agrees to provide a written and oral
reference for Brennan pursuant to the following terms:

 

a.            Written: Upon signing this Agreement and expiration of the
revocation period without any revocation by Brennan, a Board Member of the
Company will execute on the Company’s letterhead and deliver to Brennan an
original of the reference letter attached to this Agreement as Exhibit A.

 

b.            Oral: Provided that Brennan directs prospective employers to the
Company, Standish O’Grady or Jeffrey C. Smith will respond to those prospective
employers’ inquiries by stating Brennan’s name, the dates he was employed with
the Company, his position and representations that are consistent with, but
state no more than what is stated in the written reference attached to this
Agreement as Exhibit A.

 

 

9.

CONFIDENTIALITY; PROPRIETARY INFORMATION.

 

a.           Brennan agrees not to discuss the terms of this Agreement or the
circumstances surrounding his separation from the Company with any person or
entity, except to the extent consistent with the statements and representations
made in Exhibit A, and except in the case of his legal and tax advisors, members
of his immediate family or to the extent required by law, without the written
consent of the Company or its

 

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successors. Written notice shall be made to the Secretary of Tumbleweed
Communications Corp. at 700 Saginaw Drive, Redwood City, California, 94063.
Brennan agrees that each violation of this Paragraph 8(a) will subject him to
$10,000 in liquidated damages per violation payable directly to the Company.

 

b.           Brennan acknowledges and agrees that he continues to be bound by
the terms and conditions of the Proprietary Information and Inventions Agreement
he signed in connection with his employment with the Company, a copy of which is
attached hereto.

 

10.         TAX TREATMENT AND INDEMNIFCATION. Brennan acknowledges and agrees
that the Brennan-Released Parties have made no representations to him regarding
the tax consequences of any amounts paid to him with regard to any Release or
Settlement Agreement. Brennan acknowledges and agrees that he is responsible for
paying taxes, if any, on all monies paid to him as part of any Settlement
Agreement with the Company. Brennan agrees to indemnify, defend and hold
harmless the Brennan-Released Parties from any claims, fines, causes of action,
judgments, damages, costs, expenses, or other liabilities (including reasonable
attorneys’ fees) that arise from any determination of any federal, state or
local court, governmental, or administrative agency, board, or other entity that
the Company may have been obligated to withhold federal, state or local income
or other taxes from the payment of any amounts paid to him as part of any
Agreement with the Company. If at some future date, any taxing authority were to
determine that any monies paid to Brennan as part of any Agreement is subject to
withholding in amounts greater than those reported or withheld, Brennan
expressly agree that any and all tax liability, cost, interest, assessment,
and/or penalty which may become due are Brennan’s sole responsibility. Brennan
further agrees to pay any and all taxes costs, interest, and, if necessary will
indemnify and hold harmless the Brennan-Released Parties if any Released Party
incurs any tax liability, cost, interest, assessment and/or penalty as a result
of any monies paid to Brennan. The Brennan-Released Parties shall have no duty
whatsoever to defend Brennan against any tax claims, penalties or assessments.

 

11.         GOVERNING LAW. This Agreement and all rights, duties and remedies
hereunder shall be governed by and construed and enforced in accordance with the
laws of the State of California, without reference to its choice of law rules.
Venue for any dispute related to the terms of this Agreement shall be in San
Mateo County, California.

 

12.         SEVERABILITY. Any term or provision of this Agreement that is
invalid or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdictions. The Parties intend that
all of their respective rights and obligations hereunder shall be enforceable to
the fullest extent permitted by law.

 

 

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13.         BINDING EFFECT AND THIRD-PARTY BENEFICIARIES. This Agreement is
binding and solely for the benefit of Brennan and the Brennan-Released Parties
and shall not inure to the benefit of any other third parties.

 

14.         AMENDMENTS. This Agreement may not be amended or modified other than
by a written instrument signed by the Company and Brennan.

 

15.         COOPERATION IN PROCEEDINGS. Brennan hereby agrees that, as requested
by the Company, he will provide reasonable assistance and cooperation to the
Tumbleweed Entity and any third parties, including, but not limited to any
governmental, law enforcement or regulatory agency, with respect to any current
or future litigation in which the Tumbleweed Entity is involved and which arises
out of or relates in any manner to Brennan's employment, directorship or
officership with the Company and directorship of Tumbleweed Communications Pty.
Limited.

 

16.         DESCRIPTIVE HEADINGS. The section headings contained herein are for
reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.

 

17.         COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same instrument.

 

18.         ENTIRE AND INTERGRATED AGREEMENT. Each of the Parties to this
Agreement represent that it has not relied upon any promise, inducement,
representation, or other statement made in connection with this Agreement,
whether oral or written, that is not expressly contained herein, that this
Agreement contains the entire agreement between the parties, including all known
and unknown claims, including any continuing effects, and that the terms of this
Agreement are contractual and not recitals only. All other prior agreements,
discussions, terms of compensation, including without limitation any offer of a
bonus for the 4th Quarter 2005, arrangements or understandings, oral or written
are merged into and superseded by the terms of this Settlement Agreement, except
for any confidentiality or proprietary information agreements which remain in
full force and effect. It is expressly understood that Brennan will receive
$100,000 from the Company and nothing more for any matter.

 

19.         OWNERSHIP OF CLAIMS. Brennan warrants and represents that he has not
heretofore assigned or transferred, or purported to assign or transfer, to any
person or entity, any claim or cause of action arising out of or related to the
matters released herein or any portion thereof or interest therein, and Brennan
agrees to indemnify, defend, and hold the Brennan-Released Parties harmless from
and against any and all claims based on or arising out of any such assignment or
transfer, or purported assignment or transfer.

 

20.         AUTHORITY. Each of the parties to this Agreement hereby represents
warrants and covenants that the party has the full power and authority to
execute, deliver

 

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and perform this Agreement and has duly authorized the execution, delivery and
performance of this Agreement.          

 

21.         NO ADMISSION OF LIABILITY. It is understood and agreed that this is
a compromise settlement of disputed claims and that the facts or terms of this
Agreement should not be construed to be an admission of any liability or
obligation whatsoever by Brennan or the Brennan-Released Parties. Moreover, the
fact of the existence of this Agreement, or any terms of this Agreement shall
not be interpreted in any way to constitute any ratification by any
Brennan-Released Party of any of Brennan’s acts or omissions that arise from or
are related to his employment with, and officership or directorship of the
Company.

 

22.         COSTS AND ATTORNEYS’ FEES. Each party shall bear its own attorneys’
fees and costs incurred as a result of the release claims, any of the provisions
in this Agreement, or in connection with the negotiation and preparation of this
Agreement.

 

23.         COBRA REIMBURSEMENT/VIDEO CONFERENCING EQUIPMENT REIMBURSEMENT. The
Company will reimburse Brennan for COBRA expenses Brennan incurs through
December 31, 2006 to maintain coverage under the Company’s health insurance
plans subject to COBRA. The Company acknowledges that the Settlement Payment
includes a set-off for video conferencing equipment provided to Brennan and that
Brennan owes it nothing for that equipment.

 

24.         LANGUAGE OF AGREEMENT SHALL NOT BE CONSTRUED FOR OR AGAINST ANY
PARTY. The Company and Brennan acknowledge that they have each read and reviewed
the terms of this Agreement, and have conferred with counsel in the negotiation
of this Agreement. Accordingly, the Agreement shall be construed neither for nor
against any party, but shall be given a fair and reasonable interpretation in
accordance with the meaning of the terms and the intent of the Company and
Brennan.

 

 

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I HAVE CAREFULLY READ AND FULLY UNDERSTAND AND VOLUNTARILY AGREE TO ALL THE
TERMS OF THIS SETTLEMENT AGREEMENT AND RELEASE IN EXCHANGE FOR THE PROMISES MADE
IN THIS AGREEMENT.

 

IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date set
forth above.

 

TUMBLEWEED COMMUNICATIONS

CRAIG D. BRENNAN

CORP.

 

 

___________________________

________________________

By: Bernard J. Cassidy

Its: Senior Vice President & General Counsel

 

Date: ______________________

Date:___________________

 

APPROVED AS TO FORM

 

________________________

 

Attorney for Mr. Brennan

 

Date:___________________

 

 

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