DCAP GROUP, INC.
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March 28, 2001
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Dear Abe:
Reference is made to the Employment Agreement dated as of February 25, 1999
by and between DCAP Group, Inc. (the "Company") and you (the "Employment
Agreement").
Reference is also made to the Agreement of even date between the Company
and you with respect to the sale to you of all of the outstanding shares of
common stock of Diversified Coverage Asset Planning, Inc., ADCAP Brokerage, Inc.
and DCAP Hicksville, Inc. (the "Stock Purchase Agreement").
The parties hereby acknowledge that it is their mutual desire to terminate
the Employment Agreement and accordingly agree that the Employment Agreement is
hereby terminated. The parties agree further that, except as hereinafter
provided, neither party shall have any further rights or obligations under the
Employment Agreement, in connection therewith or in connection with the
termination thereof. Notwithstanding the foregoing, the parties agree that
nothing herein shall be deemed a waiver of any rights of the parties under the
Employment Agreement in connection with the breach of any representation or
covenant that occurred prior to the date hereof. In addition, the parties agree
that the provisions of Paragraphs 7.1 through 7.4, 12.1 through 12.4, 13.1, 14.1
through 14.5, 16.1, 17.1, 18.1, 19.1, 20.1, 21.1, 22.1 and 23.1 of the
Employment Agreement shall continue in full force and effect in accordance with
the provisions thereof; provided, however, that the provisions of Paragraph
7.1(i) of the Employment Agreement shall not restrict you from operating the
DCAP franchises wholly-owned by you and identified on Schedule A attached hereto
(the "Stores") and the provisions of Paragraph 7.1(ii) of the Employment
Agreement shall not restrict you from employing ▇▇▇▇▇▇▇ in connection with the
operation of the Stores.
Simultaneously herewith, you are resigning freely and voluntarily as an
employee, officer and director of the Company and of each and every subsidiary
of the Company (collectively with the Company, the "DCAP Companies") for which
you serve in such capacity.
You understand and agree that, except as expressly set forth herein, the
Company shall have no obligation to you, whether for compensation, payments,
benefits or otherwise, arising
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March 28, 2001
Page 2
under or relating to your employment or position with the Company or any of the
DCAP Companies, the termination of your employment, the Employment Agreement, or
otherwise.
The Company agrees that, until the expiration of the lease, you shall be
entitled to use the Company-leased BMW currently being used by you (the "Car").
The parties agree that, during the six (6) month period following the date
hereof, you shall not be obligated to reimburse the Company for the lease cost
of approximately $850 per month (the "Excluded Obligation"). Thereafter, and for
the balance of the lease term, you shall reimburse the Company for all amounts
paid in connection with the leasing of the Car. Such payments shall be made
within ten (10) days of receipt of an invoice therefor. You also shall be solely
responsible for all costs and expenses in connection with the use and operation
of the Car, including, without limitation, insurance premiums, maintenance,
repairs and gasoline. You agree to (i) maintain insurance on the Car in an
amount at least equal to that amount required by the provisions of the lease,
(ii) have the Company included as an additional insured, (iii) require that the
insurance company provide to the Company at least thirty (30) days notice of
default with respect to your policy and (iv) provide to the Company, upon its
request, evidence of the foregoing, including, without limitation, pursuant to a
certificate of insurance. In the event you fail to pay any insurance premium
when due, the Company shall have the right to make such payment and you shall be
obligated to reimburse it promptly upon request. In the event you fail to timely
make any of the foregoing lease or insurance premium reimbursement payments, the
total remaining amount due under the lease shall become immediately due and
payable by you to the Company. You agree that, except for the Excluded
Obligation, you will indemnify the Company and hold it harmless from and against
any and all costs, expenses, losses and liabilities (including, without
limitation, reasonable attorneys' fees) incurred by it in connection with the
lease, use and/or operation of the Car.
You acknowledge and agree that, in the event you have been listed
individually as the agent, broker of record or producer (or similar term)
(collectively, "Producer") in connection with any insurance policy or contract
(collectively, "Policies"), all commissions, fees and other amounts payable in
connection therewith are the exclusive property of our wholly-owned subsidiary,
DCAP Insurance Agencies, Inc. ("DCAP Insurance"). You hereby represent that set
forth on Schedule B attached hereto is a complete list of all Policies with
respect to which you are listed individually as the Producer. You hereby
represent further that all monies received by you as a Producer have been
transferred to DCAP Insurance and agree that, in the event you shall hereafter
receive any such monies as a Producer, you shall promptly turn them over to DCAP
Insurance and, until turned over, shall hold them in trust therefor. You
acknowledge and agree that DCAP Insurance may substitute for you any person(s)
as the Producer of any and all Policies. Simultaneously herewith, you are
executing and delivering to DCAP Insurance the following: (i) "Change of Broker"
forms, executed in blank, covering all Policies for which you are listed as the
Producer and (ii) assignment forms, executed in blank, pursuant to which you are
assigning your appointment as agent and/or broker for all insurers for which
DCAP Insurance is not currently an
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March 28, 2001
Page 3
authorized agent or broker (in each case, DCAP Insurance having the authority to
complete the forms as it deems fit and deliver them to the particular insurer).
You agree that, during the six (6) month period following the date hereof,
you shall provide such consultation services with regard to the operation of the
DCAP Companies as shall be reasonably requested by the Company; provided,
however, that you shall not be required to provide more than three (3) hours of
such services during any particular week. In addition, you agree to take all
such further action, and execute all such further documents, as shall be
reasonably requested by the Company to ensure the orderly transition of the
operation of the DCAP Companies.
You acknowledge and agree that the representations, agreements and
covenants made by you herein are a material inducement to the Company's entering
into the Stock Purchase Agreement.
This Agreement shall be governed by, and construed and enforced in
accordance with, the laws of the State of New York applicable to agreements made
and to be performed entirely in New York.
This Agreement constitutes the entire agreement between the parties with
respect to the subject matter hereof and there are no representations,
warranties or commitments except as set forth herein. This Agreement supersedes
all prior agreements, understandings, negotiations and discussions, whether
written or oral, of the parties hereto relating to the subject matter hereof;
provided, however, that the foregoing shall not be construed to mean that this
Agreement supersedes or otherwise affects the Restrictive Covenant Agreement
dated February 25, 1999 from you to the Company (the "Restrictive Covenant
Agreement") or any other agreement entered into between you and the Company
and/or any other DCAP Company in connection with the sale by you to the Company
of your shares of DCAP Insurance and other DCAP Companies, each of which shall
continue in full force and effect in accordance with its terms (except, in the
case of the Employment Agreement, as modified hereby). You also acknowledge and
agree that the restrictions placed upon you pursuant to the provisions of the
Employment Agreement and the Restrictive Covenant Agreement are in addition to,
and not in lieu of, the restrictions set forth in the Franchise Agreement
contemplated to be entered into between our wholly-owned subsidiary, DCAP
Management, Inc., and each of Diversified Coverage Asset Planning, Inc., ADCAP
Brokerage, Inc. and DCAP Hicksville, Inc. (collectively, the "Franchise
Agreements"). The rights and remedies set forth in the Employment Agreement, the
Restrictive Covenant Agreement and the Franchise Agreements are cumulative.
This Agreement may be amended, and any provision hereof waived, only by a
writing executed by the party sought to be charged. This Agreement may be
amended, and any provision hereof waived, only by a writing executed by the
party sought to be charged.
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March 28, 2001
Page 4
This Agreement may be executed in one or more counterparts, each of which
shall be deemed an original, and both of which taken together shall constitute
one and the same instrument.
Any notice required or permitted to be given pursuant to this Agreement
shall be deemed to have been duly given when delivered by hand or sent by
certified or registered mail, return receipt requested and postage prepaid,
overnight mail or courier or telecopier as follows:
If to you:
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with a copy to:
Morganstern & ▇▇▇▇▇▇▇
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Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇, Esq.
Telecopier Number: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Company:
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Attention: Chief Executive Officer
Telecopier Number: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Certilman Balin ▇▇▇▇▇ & ▇▇▇▇▇, LLP
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Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Telecopier Number: (▇▇▇) ▇▇▇-▇▇▇▇
or at such other address as either party shall designate by notice to the other
party given in accordance with this paragraph.
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March 28, 2001
Page 5
The waiver by either party of a breach of any provision of this Agreement
shall not operate or be construed as a waiver of any subsequent breach. If any
provision, or part thereof, of this Agreement shall be held to be invalid or
unenforceable, such invalidity or unenforceability shall attach only to such
provision and not in any way affect or render invalid or unenforceable any other
provisions of this Agreement, and this Agreement shall be carried out as if such
invalid or unenforceable provision, or part thereof, had been reformed, and any
court of competent jurisdiction or arbitrators, as the case may be, are
authorized to so reform such invalid or unenforceable provision, or part
thereof, so that it would be valid, legal and enforceable to the fullest extent
permitted by applicable law.
You acknowledge that you have been represented by counsel in connection
with this Agreement. Accordingly, any rule or law or any legal decision that
would require the interpretation of any claimed ambiguities in this Agreement
against the party that drafted it has no application and is expressly waived by
you. The provisions of this Agreement shall be interpreted in a reasonable
manner to give effect to the intent of the parties hereto.
Each of the DCAP Companies is an intended third party beneficiary of, and
shall be entitled to enforce, the provisions of this Agreement.
Signatures hereon which are transmitted via facsimile shall be deemed
original signatures.
Very truly yours,
DCAP Group, Inc.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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Chief Executive Officer
Agreed:
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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SCHEDULE A
Diversified Coverage Asset Planning, Inc.
ADCAP Brokerage, Inc.
DCAP Hicksville, Inc.
SCHEDULE B
None