Document:

<PAGE>

                      SEPARATION AND SETTLEMENT AGREEMENT

     THIS SEPARATION AND SETTLEMENT AGREEMENT dated as of August 4, 2000, (this
"Agreement") is between FirstWorld Communications, Inc. a Delaware corporation,
and its subsidiaries ("FirstWorld") and Marion K. Jenkins ("Jenkins"), whose
address is 5454 East Nichols Place, Littleton, Colorado 80122.

                                   RECITALS

     A.   FirstWorld and Jenkins entered into an Employment Agreement dated as
of November 9, 1998 (as amended, the "Employment Agreement").

     B.   FirstWorld and Jenkins have mutually agreed that it would be in both
of their interests to terminate the Employment Agreement, and the employment
relationship between them.

     C.   In connection with the termination of the Employment Agreement and the
employment relationship, FirstWorld and Jenkins desire to release each other
from any and all obligations or legal right either may owe to the other, except
for the specific rights and obligations identified in this Agreement.

     D.   The entering into this Agreement is not an admission on either party's
part of any wrongdoing or actual liability owed to the other.

     E.   Except as specifically provided below, it is intended that this
Agreement be construed in the broadest possible manner, in accordance with the
parties' express intention that all disputes between them arising out of or in
any way connected to Jenkins' employment with FirstWorld be forever resolved.
This includes all potential and actual claims under both federal and state law,
the Employment Agreement and under the company benefit plans including the
Employee Stock Option Agreement referred to in Sections 2(c) and 4.  Jenkins
shall retain no rights with respect to his employment except for any rights he
may have under the Consolidated Omnibus Budget Reconciliation Act of 1985
("COBRA") and any rights specifically granted by this Agreement.

     THEREFORE, in consideration of the mutual promises, covenants and other
considerations set forth below, Jenkins and FirstWorld agree as follows:

                                   AGREEMENT

     1.   Resignation. Jenkins hereby resigns his employment with FirstWorld,
          -----------
and his position as an officer of FirstWorld Communications, Inc. and any
affiliated entity effective as of the close of business on August 4, 2000 (the
"Termination Date"). FirstWorld shall issue a press release announcing that
FirstWorld has accepted the resignation of Jenkins.

                                       1
<PAGE>

     2.   Consideration. In consideration for Jenkins' resignation of
          -------------
employment, position as an officer, and any related positions, the
confidentiality provisions, the releases and other agreements set forth in this
Agreement, FirstWorld agrees as follows:

          To pay Jenkins the following:

          (a)  The sum of $42,499.98, less applicable taxes and other
               withholdings, as Severance Pay under the Employment Agreement
               (which represents the gross amount of base salary through October
               31, 2000). Payments will be made through October 31, 2000 in
               equal installments in accordance with the FirstWorld's regularly
               scheduled payroll dates for exempt employees.

          (b)  FirstWorld will agree to pay to Jenkins 80% of the COBRA premium
               required for continuance of coverage under FirstWorld's Medical,
               Dental and Vision plans from September 1, 2000 through the
               earlier of October 31, 2000 or at the time Jenkins withdraws from
               COBRA coverage under those plans, less required withholdings.
               Payments will be made through October 31, 2000 in equal
               installments in accordance with FirstWorld's regularly scheduled
               payroll dates for exempt employees. It is Jenkins' responsibility
               to properly and timely elect COBRA coverage, if desired, and to
               pay these amounts to the plans under the COBRA procedures of
               those plans.

          (c)  Solely for the purpose of determining vesting under FirstWorld's
               stock option plans, Jenkins' termination date will be November 9,
               2000. Employee shall be entitled to exercise his vested stock
               options on or prior to December 9, 2000 under his Employee Stock
               Option Agreements dated April 15, 1999, December 31, 1999 and
               March 6, 2000, and each such employee stock option agreement
               hereby is deemed amended to reflect such change. Jenkins
               understands that this extension may adversely affect his tax
               consequences under such options. Jenkins shall have no rights as
               to options not vested on or before November 9, 2000, and no
               rights as to vested options not exercised toon or before December
               9, 2000.

     3.   Employment Benefits.
          -------------------

          (a)  On or before August 15, 2000, FirstWorld shall pay Jenkins for
               his accrued but unused vacation time as of August 4, 2000, less
               normal and customary deductions for income, employment and other
               tax withholding.

          (b)  FirstWorld will permit Jenkins to continue participation in
               FirstWorld's Medical, Dental and Vision benefit plans at Jenkins'
               present level through and including August 31, 2000, at which
               time all such benefits shall be terminated. Jenkins shall retain
               any rights to continuation coverage under such Plans as he and
               his dependents may have under COBRA. FirstWorld agrees to pay to
               Jenkins 80% of the COBRA premium pursuant to the

                                       2
<PAGE>

               terms referenced in paragraph 2(b) above.

          (c)  No additional time for vacation or sick leave shall accrue after
               Termination Date. Jenkins' participation in the 401(k),
               FirstWorld's Quarterly Bonus Plan and Employee Stock Purchase
               Plan shall cease as of the Termination Date. Employee's
               participation in the Company's benefit programs for Basic Life
               Insurance, Accidental Death and Dismemberment Insurance ("AD&D"),
               Optional Life, Short Term Disability benefits, Long Term
               Disability Insurance, and any participation in the Flexible
               Spending Medical or Dependent Care programs and Employee
               Assistance Program, will terminate as of the Termination Date,
               subject to COBRA continuation rights, if any, required by law.

     4.   Stock Options.  Jenkins shall have no further rights to any stock
          -------------
options or shares, except as stated above in paragraph 2(c) of this Agreement.

     5.   Confidential Information, Ownership of Documents.  Jenkins
          ------------------------------------------------
acknowledges his obligations under paragraph 8 of the Employment Agreement and
agrees that all provisions of that paragraph shall remain in effect.

     6.   General Release.  Except as specifically provided herein to the
          ---------------
contrary, Jenkins, for himself, his heirs, his personal representatives,
assigns, attorneys, insurers, agents and representatives, releases and
discharges FirstWorld, its assigns, present and future affiliates and
subsidiaries, past, present, and future officers, directors, employees,
shareholders, independent contractors, attorneys, insurers, and any and all
other persons or entities that are now or may become liable to Jenkins due to
the acts or omissions of FirstWorld, of and from any and all actions, causes of
actions, claims, demands, costs and expenses, including attorneys' fees, of
every kind and nature whatsoever, in law or in equity, whether now known or
unknown, that Jenkins, or any person acting under him, may now have, or claim at
any future time to have, based in whole or in part upon any act or omission
occurring prior to the effective date of this Agreement without regard to
present actual knowledge of such acts or omissions, including specifically, but
not by way of limitation, matters which may arise at common law, such as breach
of contract, expressed or implied, promissory estoppel, wrongful discharge,
tortious interference with contractual rights, infliction of emotional distress,
defamation, or under Federal, State or Local Laws, such as, but not necessarily
limited to the Fair Labor Standards Act, the Employee Retirement Income Security
Act, the National Labor Relations Act, Title VII of the Civil Rights Act of
1964, the Age Discrimination and Employment Act, the Rehabilitation Act of 1973,
the Equal Pay Act, the Americans With Disabilities Act, and the Colorado Civil
Rights Act; provided however, that Jenkins does not release FirstWorld from any
            ----------------
obligations, nor waives any rights, under the Indemnification Agreement dated as
of July 20, 1999, between FirstWorld and Jenkins.  Such Indemnification
Agreement shall remain in full force and effect.  In addition, Jenkins shall
continue to be covered by FirstWorld's Director and Officer Policy, in
accordance with the terms of that policy, for the periods he served in such
capacities.

                                       3
<PAGE>

     7.   Covenant Not to Sue.  Jenkins covenants never to institute or
          -------------------
participate in any administrative proceeding, suit or action, at law or in
equity, against FirstWorld by reason of any claim released in this Agreement.

     8.   Denial of Liability.  Jenkins and FirstWorld each understand and agree
          -------------------
that this Agreement shall not be construed as an admission of liability on the
part of any person, firm, corporation, or other entity released, liability being
expressly denied.

     9.   Covenant of Nondisparagement.  Jenkins covenants never to disparage or
          ----------------------------
speak ill of FirstWorld or any of its products, services, affiliates,
subsidiaries, officers, directors, employees or shareholders.  FirstWorld will
not knowingly issue any statements that, or authorize any of its officers or
directors to disparage or speak ill of Jenkins.  Nothing in this paragraph will
preclude either Jenkins or FirstWorld, its officer, directors, employees and
representatives, from providing truthful testimony and consultation related to
any judicial, governmental or other legal proceeding.

     10.  Confidentiality.  Jenkins agrees that he shall not divulge, disclose,
          ---------------
or make available in any manner, or to any person or entity, other than his
legal counsel, financial adviser or immediate family member, the terms of this
Agreement, except to the extent necessary for the payment of federal and state
income taxes, if any, or pursuant to a subpoena in any judicial or governmental
proceeding, provided however, that should Jenkins be served with a subpoena
requiring disclosure he will provide FirstWorld's general counsel with notice of
the subpoena within one business day and shall not disclose any information
until at least five business days after giving such notice so that FirstWorld
may take the necessary action to seek a protective order if it so desires.

     11.  Continued Cooperation and Further Assurances.  FirstWorld and Jenkins
          --------------------------------------------
shall execute such further documents or take such further action as necessary to
further the purposes of this Agreement.  Jenkins agrees to make himself
reasonably available to FirstWorld to furnish full and truthful information
concerning any events, which took place during his employment, and to furnish
full and truthful consultation concerning any potential or actual litigation
relating to FirstWorld.  Should Jenkins be contacted by any person concerning
any pending or potential litigation relating to FirstWorld, Jenkins shall
immediately notify FirstWorld's general counsel.

     12.  Nonreliance.  Jenkins and FirstWorld agree that they expressly assume
          -----------
all risk that the facts or law may be, or become, different than the facts or
law as presently believed by them; provided that the individual executing below
on behalf of FirstWorld represents and warrants that he is duly authorized to
execute and bind FirstWorld to this Agreement, and that this Agreement is the
valid and binding agreement of FirstWorld.

     13.  Governing Law.  This Agreement shall governed by the laws of the State
          -------------
of Colorado and may be enforced in any court of competent jurisdiction.

     14.  Specific Performance.  The provisions of paragraphs 9, 10 and 11 of
          --------------------
this Agreement may be enforced by an action for specific performance without
requiring the posting of a bond.

                                       4
<PAGE>

     15.  Definitions.  Capitalized terms in this Agreement that are not
          -----------
otherwise defined shall have the same meaning as in the Employment Agreement.

     16.  Signatures.  By their signatures below, each party to this Agreement
          ----------
represents that he or it has read this Agreement in full, has voluntarily
entered into this Agreement upon advice of legal counsel, or with the full
opportunity to consult legal counsel, agrees that it is in his or its best
interest to enter into this Agreement, agrees that he or it believes that this
Agreement represents a fair and reasonable resolution of the differences between
the parties and agrees to all of the terms and conditions specified in this
Agreement.

     17.  Entire Agreement.  This Agreement represents the entire agreement
          ----------------
between the parties, and this Agreement may not be modified or otherwise amended
without a document, in writing, subscribed to by each of the parties.

     18.  Counterparts and Facsimiles.  This Agreement may be executed in
          ---------------------------
counterparts and shall be effective upon the date of the last signature.
Facsimile signatures shall be treated the same as original signatures.

     19.  Review.  Jenkins acknowledges that he has been advised by FirstWorld
          ------
to consult with an attorney.  Jenkins has twenty-one (21) days after the date
this Agreement is tendered to sign this Agreement.  Jenkins agrees to read and
understand this Agreement prior to signing.  Jenkins will have seven (7) days
following signing the Agreement to revoke it, and the Agreement will not become
effective until the seven (7) day revocation period has expired.  Such
revocation must be in writing and received by the FirstWorld prior to the end of
the revocation period.

MARION K. JENKINS

/s/ Marion K. Jenkins                             8/21/00
----------------------------------          ---------------------
                                                    Date

FIRSTWORLD COMMUNICATIONS, INC.

By: /s/ David J. Gandini                          8/21/00
   -------------------------------          ---------------------
Name: /s/ David J. Gandini                          Date
Title: Executive Vice President

                                       5<PAGE>

                      SEPARATION AND SETTLEMENT AGREEMENT

     THIS SEPARATION AND SETTLEMENT AGREEMENT dated as of May 23, 2001, (this
"Agreement") is between Verado Holdings, Inc. a Delaware corporation, and its
subsidiaries ("Company") and David J. Gandini ("Employee"), whose address is
3351 Meadow Creek Place, Highlands Ranch, CO 80126.

                                   RECITALS

     A.   Company and Employee entered into an Employment Agreement dated as of
November 30, 1998 (as amended October 20, 2000), the "Employment Agreement").

     B.   Company and Employee have mutually agreed that it would be in both of
their interests to terminate the Employment Agreement, and the employment
relationship between them.

     C.   In connection with the termination of the Employment Agreement and the
employment relationship, Company and Employee desire to release each other from
any and all obligations or legal right either may owe to the other, except for
the specific rights and obligations identified in this Agreement.

     D.   The entering into this Agreement is not an admission on either party's
part of any wrongdoing or actual liability owed to the other.

     E.   Except as specifically provided below, it is intended that this
Agreement be construed in the broadest possible manner, in accordance with the
parties' express intention that all disputes between them arising out of or in
any way connected to Employee's employment with Company be forever resolved.
This includes all potential and actual claims under both federal and state law,
the Employment Agreement and under the company benefit plans including the
Employee Stock Option Agreement referred to in Sections 2(b) and 4 hereof.
Employee shall retain no rights with respect to his employment except for any
rights he may have under the Consolidated Omnibus Budget Reconciliation Act of
1985 ("COBRA") and any rights specifically granted by this Agreement.

     THEREFORE, in consideration of the mutual promises, covenants and other
considerations set forth below, Employee and Company agree as follows:

                                   AGREEMENT

     1.   Resignation. Employee hereby resigns his employment with Company, and
          -----------
his position as an officer or director of Company and any affiliated entity
effective as of the close of business on June 1, 2001 (the "Termination Date").
Company has issued a press release announcing the departure of Employee.

                                       1
<PAGE>

     2.   Consideration. In consideration for Employee's resignation of
          -------------
employment, position as an officer or director, and any related positions, the
confidentiality provisions, the releases and other agreements set forth in this
Agreement, Company agrees to pay Employee as follows:

          (a)  After the lapse of the period referenced in Paragraph 19 below,
               the sum of $122,500.00, less applicable taxes and other
               withholdings, as Severance Pay under the Employment Agreement,
               which represents the gross amount of base salary through January
               1, 2002.

          (b)  On or prior to January 1, 2002, Employee shall be entitled to
               exercise his stock options vested as of the Termination Date (the
               vested Options are listed in Schedule 1 attached hereto).
               Employee understands that this exercise period may adversely
               affect his tax consequences under such options. Employee shall
               have no rights as to the options identified on Schedule 1 not
               exercised prior to January 1, 2002.

     3.   Employment Benefits.
          -------------------

          (a)  On or before the Termination Date, Company shall pay Employee for
               accrued but unused Personal Time Off as of the Termination Date,
               less normal and customary deductions for income, employment and
               other tax withholding. No additional time for Personal Time Off
               shall accrue after Termination Date.

          (b)  Company shall pay for Employee's continued participation in
               Company's Medical, Dental and Vision benefit plans at Employee's
               present level through and including June 30, 2001, at which time
               all such benefits shall be terminated. Employee shall retain any
               rights he may have under the Consolidated Omnibus Budget
               Reconciliation Act of 1985 ("COBRA").

          (c)  No additional time for Personal Time Off shall accrue after
               Termination Date.  Employee's participation in the 401(k),
               Employee Stock Purchase Plan and Quarterly Bonus Plan shall cease
               as of the Termination Date.  Employee's participation in the
               Company's benefit programs for Basic Life Insurance, Accidental
               Death and Dismemberment Insurance ("AD&D"), Optional Life, Short
               Term Disability benefits, Long Term Disability Insurance,
               Severance Plan, and any participation in the Flexible Spending
               Medical or Dependent Care programs and Employee Assistance
               Program, will terminate as of the Termination Date, subject to
               continuation rights, if any, required by law.

     4.   Stock Options. Employee shall have no further rights to any stock
          -------------
options or shares, except as stated above in paragraph 2(b) of this Agreement.

                                       2
<PAGE>

     5.   Confidential Information, Ownership of Documents. Employee
          ------------------------------------------------
acknowledges his obligations under paragraph 8 of the Employment Agreement and
agrees that all provisions of that paragraph shall remain in effect.

     6.   General Release. Employee, for himself, his heirs, his personal
          ---------------
representatives, assigns, and attorneys, and Company, for itself, its present
and future affiliate and subsidiaries, and each of their past, present, and
future officers, directors, employees, shareholders, independent contractors,
insurers, agents, representatives, assigns and attorneys, mutually release and
discharge the other, the other's heirs, personal representatives, assigns,
present and future affiliates and subsidiaries, past, present, and future
officers, directors, employees, shareholders, independent contractors,
attorneys, insurers, and any and all other persons or entities that are now or
may become liable to the other due to the acts or omissions of either Employee
or Company, of and from any and all actions, causes of actions, claims, demands,
costs and expenses, including attorneys' fees, of every kind and nature
whatsoever, in law or in equity, whether now known or unknown, that either of
them, or any person acting under any of them, may now have, or claim at any
future time to have, based in whole or in part upon any act or omission
occurring prior to the effective date of this Agreement without regard to
present actual knowledge of such acts or omissions, including specifically, but
not by way of limitation, matters which may arise at common law, such as breach
of contract, expressed or implied; promissory estoppel; wrongful discharge;
tortious interference with contractual rights; infliction of emotional distress;
defamation; or under Federal, State or Local Laws, such as, but not necessarily
limited to the Fair Labor Standards Act; the Employee Retirement Income Security
Act; the National Labor Relations Act; Title VII of the Civil Rights Act of
1964; the Age Discrimination and Employment Act; the Rehabilitation Act of 1973;
the Equal Pay Act; the Americans With Disabilities Act; and the Colorado Civil
Rights Act, provided however, that this release shall not be intended to and
            ----------------
shall not release Employee from any claims for fraud, intentional  misconduct or
gross negligence that may be brought by any third party or Company,  including
derivative actions brought by third parties on behalf of the Company alleging
fraud, intentional misconduct or gross negligence  or claims by Company, or any
insurer of Company, seeking reimbursement or contribution for any such claims,

provided, further , that Employee does not release Company from any obligations,
------------------
nor waives any rights, under the Indemnification Agreement dated as of July 20,
1999, between Company and Employee.  Such Indemnification Agreement shall remain
in full force and effect and shall survive Employee's separation with the
Company.  In addition, Employee shall continue to be covered by Company's
Director and Officer Policy, in accordance with the terms of that policy, for
the periods he served in such capacities.

     7.   Covenant Not to Sue. Employee covenants never to institute or
          -------------------
participate in any administrative proceeding, suit or action, at law or in
equity, against Company by reason of any claim released in this Agreement.

     8.   Denial of Liability. Employee and Company each understand and agree
          -------------------
that this Agreement shall not be construed as an admission of such liability on
the part of any person, firm, corporation, or other entity released, liability
being expressly denied.

                                       3
<PAGE>

     9.   Covenant of Nondisparagement. Employee covenants never to disparage or
          ----------------------------
speak ill of Company or any of its products, services, affiliates, parents,
subsidiaries, officers, directors, employees or shareholders. The Company will
not knowingly issue any statements that, or authorize any of its officers or
directors to disparage or speak ill of Employee and the Company will use its
commercially reasonable efforts to ensure that its officers, directors,
employees, agents and representatives do not disparage or speak ill of Employee.
Nothing in this paragraph will preclude either Employee or Company, its officer,
directors, employees and representatives, from providing truthful testimony and
consultation related to any judicial, governmental or other legal proceeding.

     10.  Confidentiality. Employee agrees that he shall not divulge, disclose,
          ---------------
or make available in any manner, or to any person or entity, other than his
legal counsel, financial adviser or immediate family member, the terms of this
Agreement, except to the extent necessary for the payment of federal and state
income taxes, if any, or pursuant to a subpoena in any judicial or governmental
proceeding, provided however, that should Employee be served with a subpoena
requiring disclosure he will provide Company's general counsel with notice of
the subpoena within one business day and shall not disclose any information
until at least five business days after giving such notice so that Company may
take the necessary action to seek a protective order if it so desires.

     11.  Continued Cooperation and Further Assurances. Company and Employee
          --------------------------------------------
shall execute such further documents or take such further action as necessary to
further the purposes of this Agreement. Employee agrees to make himself
available (at reasonable times and for reasonable reimbursement of reasonable
out of pocket expenses which would include reimbursement for compensation
resulting from time lost from employment or lost consulting fees, all of which
must be reasonable and documented by Employee to the Company's reasonable
satisfaction) to the Company to furnish full and truthful information concerning
any events, which took place during his employment, and to furnish full and
truthful consultation concerning any potential or actual litigation relating to
Company. Should Employee be contacted by any person concerning any pending or
potential litigation relating to Company, Employee shall immediately notify
Company's general counsel.

     12.  Nonreliance. Employee and Company agree that they expressly assume all
          -----------
risk that the facts or law may be, or become, different than the facts or law as
presently believed by them; provided that the individual executing below on
behalf of Company represents and warrants that he is duly authorized to execute
and bind Company to this Agreement, and that this Agreement is the valid and
binding agreement of Company.

     13.  Governing Law; Venue. This Agreement shall be governed by the laws of
          --------------------
the State of Colorado. Any action related to this Agreement shall be brought in
the state District Court for the County of Arapahoe, State of Colorado.

     14.  Specific Performance. The provisions of paragraphs 9, 10 and 11 of
          --------------------
this Agreement may be enforced by an action for specific performance without
requiring the posting of a bond.

                                       4
<PAGE>

     15.  Definitions. Capitalized terms in this Agreement that are not
          -----------
otherwise defined shall have the same meaning as in the Employment Agreement.

     16.  Signatures.  By their signatures below, each party to this Agreement
          ----------
represents that he or it has read this Agreement in full, has voluntarily
entered into this Agreement upon advice of legal counsel, or with the full
opportunity to consult legal counsel, agrees that it is in his or its best
interest to enter into this Agreement, agrees that he or it believes that this
Agreement represents a fair and reasonable resolution of the differences between
the parties and agrees to all of the terms and conditions specified in this
Agreement.

     17.  Entire Agreement. This Agreement represents the entire agreement
          ----------------
between the parties, and this Agreement may not be modified or otherwise amended
without a document, in writing, subscribed to by each of the parties.

     18.  Counterparts and Facsimiles.  This Agreement may be executed in
          ---------------------------
counterparts and shall be effective upon the date of the last signature.
Facsimile signatures shall be treated the same as original signatures.

     19.  Review.  Employee acknowledges that he has been advised by Company to
          ------
consult with an attorney.  Employee has twenty-one (21) days after the date this
Agreement is tendered to sign this Agreement.  Employee agrees to read and
understand this Agreement prior to signing.  Employee will have seven (7) days
following signing the Agreement to revoke it, and the Agreement will not become
effective until the seven (7) day revocation period has expired.  Such
revocation must be in writing and received by the Company prior to the end of
the revocation period.

EMPLOYEE:  David J. Gandini

/s/ David J. Gandini
--------------------
Date:  6/8/01
     ---------------

VERADO HOLDINGS, INC.

By: /s/ J. Thomas McGrath
   ------------------------
Name:     J. Thomas McGrath
     ---------------------------------------
Title: President and Chief Executive Officer
       -------------------------------------
Date: June 8, 2001
      --------------------------------------

                                       5

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