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                                                                    EXHIBIT 10.1

                              SEPARATION AGREEMENT
                            AND RELEASE OF ALL CLAIMS

      This Separation Agreement And Release Of All Claims (the "Agreement") is
entered into effective as of October 31 2005, by APPLIED INNOVATION INC., a
Delaware corporation, hereinafter referred to, together with all its
predecessors and past, present and future assigns, successors, affiliates,
subsidiary organizations, divisions, and corporations, and including all past,
present and future officers, directors, shareholders, employees, and agents of
the same, individually and in their respective capacities, as the "Company," and
THOMAS R. KUCHLER, hereinafter referred to, together with his heirs, executors,
administrators, successors, assigns and other personal representatives as "Mr.
Kuchler," under the following circumstances:

      A. Mr. Kuchler has been employed by the Company since February 11, 2002,
and entered into a written Employment Agreement with the Company dated December,
5, 2003 (the "Employment Agreement").

      B. The Company has proposed, and Mr. Kuchler has agreed, to certain
severance benefits in connection with the termination of his employment.

      C. Mr. Kuchler acknowledges that the severance benefits described in the
Agreement, other than those described in Section 2 of this Agreement, include
benefits to which he is not otherwise entitled.

      NOW THEREFORE, the parties agree, in consideration of the provisions
contained herein, as follows:

      1. Termination of Employment. Mr. Kuchler's employment with the Company
will terminate effective October 31, 2005 ("the Termination Date). This
termination is categorized as "without cause" as defined in Section 9(d) of Mr.
Kuchler's Employment Agreement.

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      2. Severance Benefits.

         In accordance with Section 9(d) of the Employment Agreement, the
Company agrees to pay Mr. Kuchler his basic salary in the amount of $6,153.85
bi-weekly, less all applicable withholding and FICA taxes, for six (6) months
from the Termination Date, payable in accordance with the Company's normal
salary payment schedule; provided, however, any such payments will immediately
end if (i) Mr. Kuchler violates any of his obligations under Sections 6
(Confidential Information), 7 (Inventions) or 8 (Noncompetition and
Nonsolicitation) of the Employment Agreement, which obligations continue
following the Termination Date; or (ii) the Company, after the Termination Date,
learns of any facts about Mr. Kuchler's performance or conduct that would have
given the Company Cause, as defined in Section 9(b) of the Employment Agreement,
to terminate his employment for Cause.

      3. Reference. The Company agrees to provide a neutral job reference for
Mr. Kuchler stating the following information: hire and termination dates, and
last position held.

      4. Benefit Programs. Mr. Kuchler understands and agrees that all benefit
programs he participates in as a result of his employment with the Company have
(except to the extent vested and nonforfeitable by law) ceased effective upon
the Termination Date. If Mr. Kuchler elects to continue his medical and/or
dental coverage under COBRA, as an additional benefit, the Company shall
continue to pay the Company's cost for continuing such coverage at the same rate
as for active employees, for six (6) months, or until he becomes eligible for
group medical coverage through another employer, whichever occurs first. Mr.
Kuchler agrees that he will notify the Company within one week of his becoming
eligible for group insurance coverage through another employer.

      5. Release of Claims. In exchange for the consideration set forth in
paragraph 2 and other valuable consideration, the adequacy of which Mr. Kuchler
expressly acknowledges, Mr. Kuchler hereby releases and forever discharges the
Company, and all of its affiliates, parent corporations, subsidiaries,
divisions, predecessors, successors, and assigns, and all of their respective
directors, officers, agents and employees, personally and in their
representative and

                                      -2-
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official capacities, from any and all local, state and federal lawsuits, claims,
remedies, damages, demands, discrimination suits or charges, costs and attorneys
fees, and any causes of action of whatever type or nature, whether legal or
equitable, whether known, unknown or unforeseen. The rights, liabilities, claims
and actions released, waived and extinguished here by Mr. Kuchler, and with
respect to which Mr. Kuchler covenants not to sue, shall include but not be
limited to those arising or which might arise under Title VII of the Civil
Rights Act of 1964; any and all claims under the Civil Rights Act of 1866; any
and all claims under the Americans With Disabilities Act of 1990; any and all
claims under the Age Discrimination in Employment Act, as amended, including the
Older Workers Benefit Protection Act of 1990; any and all claims under Family
Medical Leave Act of 1993; any and all claims under the Employment Retirement
Income Security Act; any and all claims for attorneys fees; any and all
contract, tort or common law claims, included but not limited to, any and all
claims for compensation or bonuses under any of the Company's compensation
plans; and any and all claims under any federal, state or local statute or
ordinance or under any federal, state or local common law.

      6. No Admission. The parties agree that this Agreement is entered into
solely because of a desire of the parties to amicably resolve all matters
between them, and nothing contained herein, and no actions undertaken by the
Company with respect to this Agreement, shall ever be treated as, or claimed or
construed to be, an admission by the Company of any fault, wrongdoing,
liability, injury or damages.

      7. Confidentiality. Mr. Kuchler agrees to keep the existence and terms of
this Agreement STRICTLY CONFIDENTIAL, and further agrees not to disclose or
permit disclosure of any dollar amount, benefit or other term or information
concerning this Agreement, to any other person, commercial or non-profit entity,
print, radio or television news media, or make other disclosure of any kind
whatsoever, except: (a) as required to do so by court order; (b) as necessary
for tax preparation or to respond to inquiries or audits by a federal, state or
local taxing authority; (c) to an immediate family member, such as a spouse (who
must be instructed about the confidentiality requirements and penalties of this
Agreement); or (d) to his legal counsel in connection with his execution of this
Agreement.

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      8. Company Property. Mr. Kuchler agrees that all information, files,
records, materials and property furnished to him by or on behalf of the Company
in the performance of his employment for the Company and all information, files,
records, materials and property prepared or maintained by him in the performance
of his employment for the Company are and shall remain the sole and exclusive
property of the Company. Mr. Kuchler represents and agrees that all such
information, files, records, materials and property, company identification
card, business cards and any Company credit cards and all keys to any Company
property or premises have been turned over to the Company.

      9. Cooperation. Mr. Kuchler agrees to cooperate fully with the Company in
providing information and assistance to make whatever transitions the Company
deems necessary on any Company matters or projects in which he is or may have
been involved. Mr. Kuchler also agrees to not make any disparaging statements
about the Company, including but not limited to, its management, staff, products
or services. Mr. Kuchler further agrees that if future litigation or claims are
asserted against or by the Company, its assets, employees or officers regarding
any matter that arose during his employment and relate to him or his area of
responsibility, that he will cooperate fully in supplying thorough and accurate
information for the Company's investigation, defense or prosecution of such
claims or litigation.

      10. Binding Agreement. This Agreement is binding on and will inure to the
benefit of both parties and the parties' respective heirs, executives,
administrators, personal representatives, successors and assigns. Each party
acknowledges and represents that they have the authority to enter into and bind
themselves to the terms and conditions of this Agreement.

      11. Saving. In the event that one or more of the provisions of this
Agreement or portions thereof are determined to be illegal or unenforceable, all
remaining provisions will remain valid and in full force and effect to the
fullest extent permitted by law.

      12. Governing Law. This Agreement is entered into in the State of Ohio,
enforceable by either party, and will be construed and interpreted in accordance
with Ohio law. This

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Agreement also may be used as the basis for an injunction action in the event a
breach or threatened breach of its confidentiality provision occurs.

      13. Entire Agreement. This Agreement contains the entire agreement between
the parties and no additional promises have been made or relied upon and this
Agreement supersedes all previous agreements between the parties with respect to
the employment of Mr. Kuchler; provided, however, this Agreement does not
supersede, modify or affect Sections 6 (Confidential Information), 7
(Inventions) and 8 (Noncompetition and Nonsolicitation) of the Employment
Agreement, which sections of said agreement remain in full force and effect and
Mr. Kuchler continues to be fully bound by the terms thereof. The terms of this
Agreement are contractual and not a mere recital and the parties intend this
Agreement to be a substituted contract, and not an executory accord.

                           [INTENTIONALLY LEFT BLANK]

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      By their signature below, the parties acknowledge that they have read the
foregoing Agreement, and fully understand it. Mr. Kuchler acknowledges that he
was given a reasonable period of time within which to consider this Agreement,
and that he had the right to consult with legal counsel prior to signing the
Agreement. We now voluntarily sign this Agreement effective as of the date first
written above, signifying our agreement and willingness to be bound by its
terms.

      IN WITNESS WHEREOF, the undersigned have executed this Agreement effective
as of the date first above stated.

Applied Innovation Inc.

By:       /s/ William H. Largent                    /s/ Thomas R. Kuchler
     --------------------------------        -----------------------------------
          William H. Largent                        Thomas R. Kuchler
          President and CEO

Date:     November 28, 2005                  Date:  November 21, 2005

                                      -6-Exhibit 10.1

     

    Exhibit
      10.1

     

    

      SETTLEMENT
        AND RELEASE AGREEMENT

       

      This
        Settlement and Release Agreement (the “Agreement”) is entered into November 29,
        2005 among Scott R. Oglum, an individual (“Mr. Oglum”), Theater Xtreme
        Entertainment Group, Inc. (the “Company”) and the Initial Investors identified
        on the signature page hereto.

       

      WHEREAS,
        Mr.
        Oglum is the founder of Theater Xtreme, Inc. and currently serves as the
        Company’s President, Chief Executive Officer and Chairman;

       

      WHEREAS,
        on
        February 11, 2005, Theater Xtreme, Inc. merged with and into BF Acquisition
        Group II, Inc. (the “Merger”);

       

      WHEREAS,
        following the Merger, the name of the surviving entity was changed to Theater
        Xtreme Entertainment Group, Inc.;

       

      WHEREAS,
        certain
        of the initial investors of Theater Xtreme, Inc. identified on the signature
        page hereto (the “Initial Investors”), are concerned about the number of shares
        issued to Mr. Oglum by Theater Xtreme, Inc. prior to the Merger, the number
        of
        shares issued in the Merger and the number of shares issued to new investors
        in
        a subsequent private placement by the Company, and the respective dilution
        to
        the holdings of such Initial Investors that has occurred as a result of such
        issuances;

       

      WHEREAS,
        to
        resolve the identified concerns regarding such dilution, Mr. Oglum has agreed,
        pursuant to this Agreement to tender to the Company for redemption 800,000
        of
        his shares for distribution to the Investor Relations firms identified on
        Schedule
        I
        attached
        hereto as determined by the Company without Mr. Oglum’s participation as payment
        for services provided to the Company by such Investor Relations
        firms;

       

      In
        consideration of the foregoing, and in consideration of the undertakings
        set
        forth hereinafter, and intending to be legally bound, the parties agree as
        follows:

       

      1. Mr.
        Oglum
        shall within two (2) business days of the execution of this Agreement tender
        to
        the Company for redemption 800,000 shares of his common stock of the Company
        and
        shall file the necessary securities forms to reflect such tender.

       

      2. The
        Company shall within two (2) business days of the receipt of the shares from
        Mr.
        Oglum, distribute the shares to the Investor Relations firms as set forth
        on
Schedule
        I
        attached
        hereto.

       

      3. The
        Initial Investors, each on their own behalf and on the behalf of their
        respective successors and/or assigns, hereby jointly and severally, forever
        release, discharge and dismiss any and all claims, rights, causes of action,
        suits, obligations, debts, demands, liabilities, controversies, costs, expenses,
        fees and/or damages of any kind (including, without limitation, any and all
        claims alleging violations of federal or state securities laws, common-law
        fraud
        or deceit, breach of fiduciary duty, negligence or otherwise), whether directly,
        derivatively, representatively or in any other capacity, against Mr. Oglum
        or
        his successors or assigns, in any way based upon, arising from, relating
        to or
        involving, directly or indirectly, the transactions contemplated by this
        Agreement or that led to this Agreement, including without limitation the
        dispute reflected in the WHEREAS clauses to this Agreement.

       

      
        
           

        

        
          4

          
            

          

        

        
           

        

      

      4. The
        Company, on its own behalf and on behalf of it successors and/or assigns,
        hereby
        forever releases, discharges and dismisses any and all claims, rights, causes
        of
        action, suits, obligations, debts, demands, liabilities, controversies, costs,
        expenses, fees and/or damages of any kind (including, without limitation,
        any
        and all claims alleging violations of federal or state securities laws,
        common-law fraud or deceit, breach of fiduciary duty, negligence or otherwise),
        whether directly, derivatively, representatively or in any other capacity,
        against Mr. Oglum or his successors or assigns, in any way based upon, arising
        from, relating to or involving, directly or indirectly, the transactions
        contemplated by this Agreement or that led to this Agreement, including without
        limitation the dispute reflected in the WHEREAS clauses to this
        Agreement.

       

      5. It
        is
        agreed and understood that the execution of this Agreement and the actions
        contemplated hereby is not, and is not deemed to be, an admission of liability
        on the part of Mr. Oglum. It is expressly understood and agreed that Mr.
        Oglum
        denies liability and that the actions contemplated hereby are in full accord
        and
        satisfaction of, and in compromise of, a disputed claim and that the tender
        of
        shares for redemption is made for the purpose of terminating any potential
        dispute between Mr. Oglum, the Company and the Initial Investors.

       

      6. This
        Agreement constitutes the entire understanding of the parties with respect
        to
        the subject matter, and there are no other agreements or understandings,
        express
        or implied.

       

      7. This
        Agreement may be executed in counterparts which, taken together, shall
        constitute one document.

       

      8. This
        Agreement shall be governed by the laws of the State of Florida without regard
        to any conflicts of laws provisions.

       

      9. This
        Agreement is binding on the parties, their successors, heirs, assigns, related
        companies and affiliates.

       

      

       

      [Signatures
        on Following Page]

       

      
        
           

        

        
          5

          
            

          

        

        
           

        

      

      IN
        WITNESS WHEREOF, this Agreement has been executed as of the date and year
        first
        set forth above.

       

      

       

      
        	
                SCOTT
                  OGLUM

                 

                By:
                   /s/
                  Scott Oglum     

                Scott
                  Oglum

              

      

      

       

      
        	
                THEATER
                  XTREME ENTERTAINMENT GROUP, INC.

                 

                By:
                   /s/
                  James Vincenzo    

                James
                  Vincenzo

                 

                Title:
                   Chief
                  Financial Officer   

                 

              

      

      

       

       

      
        	
                
                  INITIAL
                    INVESTORS:

                

                 

                 

                 

                KENNETH
                  WARREN

                 

                By:
                   /s/
                  Kenneth Warren    

                Kenneth
                  Warren

              

      

      

       

      
        	
                JULEY
                  DRICKEN

                 

                By:
                   /s/
                  Juley Dricken    

                Juley
                  Dricken

              

      

      

       

      

       

      
        
           

        

        
          6

          
            

          

        

        
           

        

      

      SCHEDULE
        I

       

      DISTRIBUTION
        TO INVESTOR RELATIONS FIRMS

       

      

      Four
        hundred thousand (400,000) shares of common stock to each of the
        following:

      

      Nevada
        Capital Holdings Company

      100
        Springdale RD A3

      Suite
        #
        314

      Cherry
        Hill, NJ 08003

      

      Monmouth
        Holdings LLC

      136
        E.36th Street

      Apt.
        5G

      New
        York,
        NY 10016

       

       7

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