SEVERANCE AGREEMENT
This
Severance Agreement (the “Agreement”) is made effective as of the10th day of
February, 2009 (the “Effective Date”) between City Loan, Inc., a Nevada
corporation (the “Company”), Xxxxxxx X. Xxxxxxxx and Associates, Inc.
(“WRA&A”), and Xxxxxxx X. Xxxxxxxx (“Xxxxxxxx” and hereinafter with
WRA&A called the “Xxxxxxxx Parties”).
Recitals
A. In
March 2008, WRA&A and the Company entered into a consulting agreement
providing for the terms and conditions of Xxxxxxxx’x employment as Chief
Executive Officer (“CEO”) of the Company (the “Consulting
Agreement”).
X.
Xxxxxxxx has been the CEO of the Company from April 14, 2008 until the Effective
Date.
C.
WRA&A is ending its employment relationship with the Company and Xxxxxxxx is
concurrently resigning as Chief Executive Officer of the Company, and from all
other positions he has with the Company.
D. In
recognition of the past services of the Xxxxxxxx Parties to the Company and the
Xxxxxxxx Parties willingness to provide the Company with the covenants provided
herein, the Xxxxxxxx Parties and the Company desire to amicably conclude the
Xxxxxxxx Parties employment with the Company and its affiliates on the terms set
forth in this Agreement.
In
consideration of the mutual promises contained in this Agreement, and for other
good and valuable consideration, the receipt and sufficiency of which are
acknowledged, the undersigned parties, intending to be legally bound, agree as
follows:
Agreements
1. Resignation
from Officer Positions. Xxxxxxxx hereby
resigns as Chief Executive Officer of the Company and from all other positions
he has with the Company and its affiliates, in each case as of the Effective
Date. Any employment relationships the Xxxxxxxx Parties have with the
Company and its affiliates, including that certain Consulting Agreement, are
also concluded and deemed to be terminated as of the Effective
Date.
2. Severance
Payments. Subject to the
Xxxxxxxx Parties continuing compliance with all the terms of this Agreement, the
Company shall pay WRA&A an aggregate of $3,000.00, representing a one-time
cash payment to WRA&A by the Company (the “Severance”). The
Severance shall be payable in accordance with the Company’s customary payroll
practices and shall be reduced by all appropriate tax withholdings and other
customary payroll deductions.
3. Mutual
Release of Claims.
(a) The Xxxxxxxx
Parties, and anyone claiming through the Xxxxxxxx Parties or on the Xxxxxxxx
Parties behalf, agree to release the Company and the other Released Parties (as
defined below) with respect to any and all claims, whether currently known or
unknown, that the Xxxxxxxx Parties now have, have ever had, or may ever have
against the Company and any of the other Released Parties arising from or
related to any agreement, act, omission, or thing occurring or existing at any
time prior to the Effective Date. Without limiting the foregoing, the
claims released by the Xxxxxxxx Parties hereunder include, but are not limited
to:
(i) All claims for
or related in any way to the Xxxxxxxx Parties employment, compensation, other
terms and conditions of employment, or termination from employment with the
Company, including without limitation all claims for salary, bonus, severance
pay, vesting of options or any other compensation or benefit whether under an
employment agreement, any other agreement, any Company policy, plan or program
or otherwise;
(ii) All claims
that were or could have been asserted by the Xxxxxxxx Parties or on the Xxxxxxxx
Parties behalf: (a) in any federal, state, or local court,
commission, or agency; (b) under any common law theory; or (c) under any
employment, contract, tort, federal, state, or local law, regulation, ordinance,
constitutional provision, or executive order; and
(iii) All claims
that were or could have been asserted by the Xxxxxxxx Parties or on the Xxxxxxxx
Parties behalf arising under any of the following laws, as amended from time to
time: the Age Discrimination in Employment Act, Title VII of the
Civil Rights Act of 1964, the Americans with Disabilities Act, the Employee
Retirement Income Security Act, the Family and Medical Leave Act, the Worker
Adjustment and Retraining Notification Act, or any other related laws, rules and
regulations enacted in the State of Nevada.
(b) The Company and
the Released Parties agree to release the Xxxxxxxx Parties and their heirs and
assigns with respect to any and all claims, whether currently known or unknown,
that the Company and the Released Parties now have, have ever had, or may ever
have against the Xxxxxxxx Parties arising from or related to any agreement, act,
omission, or thing occurring or existing at any time prior to the Effective
Date. The only exception shall be that this release shall not prohibit the
Company with respect to any criminal or fraudulent acts or omissions by the
Xxxxxxxx Parties that are unknown by the Company as of the Effective
Date.
(c) Specifically,
but without limiting the foregoing, the Xxxxxxxx Parties hereby waive any rights
or claims they may have pursuant to the Age Discrimination in Employment Act of
1967, as amended (the “Act”) and under the laws of any and all jurisdictions,
including without limitation, the United States. The Xxxxxxxx Parties
recognize that they are not waiving any rights or claims under the Act that may
arise after the date that they execute this Agreement and Release. Other than
the sums and benefits set forth in this Agreement and Release, there are no
other sums payable to the Xxxxxxxx Parties by the Released Parties. In addition,
the Xxxxxxxx Parties agree that there will be no reinstatement or re-employment
with the Released Parties and agree not to bring any claim based upon the
failure or refusal of any of the Released Parties to employ him
hereafter.
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(d) The Xxxxxxxx Parties acknowledge that they have read and understand Section 1542
of the California Civil Code: “A general release does not extend to
claims which the creditor does not know or suspect to exist in his or her favor
at the time of executing the release, which if known by him or her must have
materially affected his or her settlement with the debtor.” The Xxxxxxxx Parties hereby expressly waive and relinquish
all rights and benefits
under Section 1542 and any
law of any jurisdiction of similar effect with respect to his release of any unknown or unsuspected
claims.
(e) The
term “Released Parties” as used in this Agreement includes: (i) the Company and
its past, present, and future parents, divisions, subsidiaries, partnerships,
affiliates, and other related entities (whether or not they are wholly owned);
and (ii) the past, present, and future owners, trustees, fiduciaries,
administrators, shareholders, directors, officers, partners, agents,
representatives, members, associates, employees, and attorneys of each entity
listed in subpart (i) above; and (iii) the predecessors, successors, and assigns
of each entity listed in subparts (i) and (ii) above.
(f) The
Xxxxxxxx Parties and the Company acknowledge and agree that the releases
provided in this Section 3 shall not apply to (i) breaches of the terms of this
Agreement (ii) vested benefits under any employee welfare plan, including
without limitation, 401(k), health and welfare plans, (iii) any rights to
indemnification under applicable statutes, bylaws or contracts which existed
prior to the date of this Agreement or as the same may in the future be
expanded, and (iv) rights under COBRA, workmen’s compensation plans and HIPPA
(Health Insurance Protection Portability Act).
(g) By signing this Agreement, the Xxxxxxxx
Parties hereby
acknowledge that:
(i) the waiver and release specified herein do
not apply to any rights or claims that may arise after the date the
Xxxxxxxx Parties sign this
Agreement or with respect to their rights hereunder; (ii) the Xxxxxxxx Parties have the right to consult with an attorney
prior to signing this
Agreement; (iii) the Xxxxxxxx Parties have twenty-one (21) days to
consider this Agreement
(although they
may choose to sign it
earlier); and (iv) the Xxxxxxxx Parties have seven (7) days after they sign this Agreement to revoke
it.
4. Mutual
Covenant Not-to-Xxx.
(a) The Xxxxxxxx
Parties covenant and agree not to file or initiate a lawsuit against any of the
Released Parties in regard to any claims, demands, causes of action, suits,
damages, losses and expenses released herein, arising from acts or omissions of
the Company occurring on or before the Effective Date, and the Xxxxxxxx Parties
will ask no other person or entity to initiate such a lawsuit on their
behalf. If the Xxxxxxxx Parties breach this covenant and agreement,
the remaining payments and benefits, if any, to be paid to the Xxxxxxxx Parties
under Sections 2 and 3 shall immediately terminate, and the Xxxxxxxx Parties
shall indemnify and hold harmless the Company and any of the Released Parties
from any and all costs incurred by any and all of them, including their
reasonable attorneys’ fees, in defending against such lawsuit.
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(b) The Company
covenants and agrees not to file or initiate a lawsuit against the Xxxxxxxx
Parties in regard to any claims, demands, causes of action, suits, damages,
losses and expenses released herein, arising from acts or omissions of the
Xxxxxxxx Parties occurring on or before the Effective Date, and the Company will
ask no other person or entity to initiate such a lawsuit on its behalf. The only
exception shall be that this covenant-not-to-xxx shall not prohibit the Company
with respect to any criminal or fraudulent acts or omissions by the Xxxxxxxx
Parties that are unknown by the Company as of the Effective Date. If the Company
breaches this covenant and agreement, the Company shall indemnify and hold
harmless the Xxxxxxxx Parties from any and all costs incurred by them, including
his reasonable attorneys’ fees, in defending against such lawsuit.
5. No
Proceedings Initiated. The Xxxxxxxx
Parties represent and warrant that neither they nor anyone acting on their
behalf has filed or initiated any charge or claim against the Company in any
administrative or judicial proceeding. The Company represents and
warrants that neither it nor anyone acting on its behalf has filed or initiated
any charge or claim against the Xxxxxxxx Parties in any administrative or
judicial proceeding.
6. Covenants
of the Parties.
(a) The Xxxxxxxx
Parties agree that they shall not disparage the Company or its officers,
directors, employees, shareholders, agents or representatives or its products or
services or products or services in development, or otherwise seek to reduce the
good will of the Company or the reputation of the Company or its officers,
directors, employees, agents, or representatives. The Company, on
behalf of its directors and executive officers, agrees not to disparage the
Xxxxxxxx Parties or to act in any way to diminish the Xxxxxxxx Parties’
reputation.
(b) Immediately
after the Effective Date of this Agreement, the Xxxxxxxx Parties shall deliver
to the Company possession of any and all property owned or leased by the Company
which may then be in the Xxxxxxxx Parties possession or under their control,
including, without limitation, any and all such keys, credit cards, equipment,
supplies, books, records, files, computer equipment, computer software and other
such tangible and intangible property of any description
whatsoever. If, following the date of this Agreement, the Xxxxxxxx
Parties shall receive any mail, including, but not limited to, electronic mail,
addressed to the Company or to the Xxxxxxxx Parties as an employee or officer of
the Company, the Xxxxxxxx Parties shall immediately deliver or forward such
mail, unopened, and in its original envelope or package, to the Company. If,
following the date of this Agreement, the Company shall receive any mail,
including, but not limited to, electronic mail, addressed to the Xxxxxxxx
Parties individually and not in his former capacity as an officer of the
Company, the Company shall immediately deliver or forward such mail, unopened,
and in its original envelope or package, to the Xxxxxxxx Parties.
(c) The Company
hereby agrees to indemnify and hold harmless to the fullest extent provided
therein, in accordance with Nevada law and the Articles of Incorporation and
By-Laws of the Company, the Xxxxxxxx Parties from and against any and all
actions, suits, proceedings, claims, demands, judgments, expenses (including
reasonable attorney fees), losses and damages arising or resulting from the
Xxxxxxxx Parties employment performance.
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7. No
Voluntary Assistance. The Xxxxxxxx
Parties hereby covenant and agree that, except under compulsion of law, they
will not voluntarily assist, support, or cooperate with, directly or indirectly,
any entity or person alleging or pursuing any claim, administrative charge, or
cause of action against the Company, including without limitation, by providing
testimony or other information, audio or video recordings, or
documents. If compelled to testify, nothing contained herein shall in
any way inhibit or interfere with the Xxxxxxxx Parties providing completely
truthful testimony or producing documents. In addition, and
notwithstanding anything elsewhere appearing in this Agreement, nothing herein
shall prevent or hinder the Xxxxxxxx Parties full cooperation with any
investigation or other proceeding by any federal, state or local governmental
agency, including, but not limited to, the U.S. Securities and Exchange
Commission.
8. No
Admission of Liability. The parties agree
and acknowledge that this Agreement is a full and complete compromise of the
matters released herein between the parties hereto; that neither the releases
nor the negotiations for this Agreement and the settlement embodied herein,
including all statements or communications made to date, shall be considered
admissions by them.
9. Confidentiality.
(a) The Xxxxxxxx
Parties acknowledge that the information, observations and data that has been
obtained by them during their involvement with the Company as an employee
concerning the business or affairs of the Company which has not been released
publicly by authorized representatives of the Company (“Confidential
Information”) is the property of the Company. Accordingly, the
Xxxxxxxx Parties agree, on behalf of himself and any affiliate, that they will
not disclose to any person not authorized by the Company to receive such
Confidential Information, or use for their own account, any of the Confidential
Information previously obtained during their employment or which is hereafter
obtained during the term of their advisory agreement as provided in Section 5
hereof without the prior written consent of the Company, unless, and to the
extent that, the aforementioned matters (i) are or become generally known to and
available for use by the public otherwise than as a direct or indirect result of
the Xxxxxxxx Parties acts or omissions to act in the protection of such
Confidential Information (ii) are disclosed to the Xxxxxxxx Parties by a third
party who, to the best knowledge of the Xxxxxxxx Parties, is not thereby in
breach of any duty to the Company or any of its
affiliates. Notwithstanding the foregoing, the Xxxxxxxx Parties shall
be entitled to disclose Confidential Information if required by law, court
order, or similar compulsory process; provided that the Xxxxxxxx Parties shall
promptly notify the Company of any disclosure proposed to be made pursuant to
this sentence in order to afford the Company a reasonable opportunity to contest
such disclosure or obtain appropriate confidentiality assurances. For purposes
of this Agreement, the term “affiliate” means any person, partnership,
corporation or business entity controlling, controlled by or under common
control with the Company or the Xxxxxxxx Parties, as the case may
be.
(b) The Xxxxxxxx
Parties acknowledge that the Confidential Information is proprietary and of
value to the Company and, accordingly, the Xxxxxxxx Parties will follow
reasonable security practices with regard to the protection and non-disclosure
of the Confidential Information. If the Xxxxxxxx Parties are required
to disclose any Confidential Information in accordance with applicable law, the
Xxxxxxxx Parties will, whenever possible, first provide to the Company a copy of
the proposed disclosure so that the Company may have a sufficient opportunity to
review and comment thereon and the Xxxxxxxx Parties agree to seek, at the
Company’s expense, such maximum confidential treatment of such disclosure as the
Company requests or may be permitted by applicable law. The Xxxxxxxx
Parties’ obligations under this Article will survive any termination of this
Agreement.
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(c) The
Xxxxxxxx Parties acknowledge and agree that breach by them of the provisions of
this Section 9 shall entitle the Company, at its option and in addition to any
other remedies available to it at law or in equity, to terminate this Agreement,
including, but not limited to, termination of the remaining payments and
benefits, if any, to be made to the Xxxxxxxx Parties under Sections 2 and 3
hereof. Said termination shall not negate or affect the release of
claims made by the Xxxxxxxx Parties under Section 6(a). If the Company should
elect to terminate the remaining payments and benefits to be made to the
Xxxxxxxx Parties in the event of the Xxxxxxxx Parties breach of this Section 9,
however, it agrees that the confidentiality provision contained in this Section
9 shall, from that point in time, no longer be in effect.
10. Other
Rights.
(a) The Xxxxxxxx
Parties are advised to seek legal counsel regarding the terms of this
Agreement. The Xxxxxxxx Parties acknowledges that they have sought
legal counsel regarding the terms and effect of this Agreement.
(b) The Xxxxxxxx
Parties acknowledge that this Agreement releases only those claims which exist
as of the Effective Date.
11. Jurisdiction/Choice
of Forum. This
Agreement, including its interpretation or performance, or any
controversy or dispute (including any statutory claim) arising out of or
otherwise related to this Agreement, shall be governed by, and construed in
accordance with, the laws of the State of Nevada without giving any force or
effect to the provisions of any conflict of law rule thereof. The parties further agree that any controversy or dispute
(including any statutory claim) arising out of or otherwise related to this
Agreement shall be tried exclusively in the state courts of Nevada.
12. Advice of
Attorneys. The parties
acknowledge that they have fully read, understood and unconditionally accepted
this Agreement after consulting with their attorneys or having the opportunity
to consult with an attorney, and acknowledge that this Agreement is mutual and
binding upon all parties hereto regardless of the extent of damages allegedly
suffered by any of the parties hereto.
13. Counterparts. This Agreement
may be signed in counterpart originals with the same force and effect as if
signed in a single original document.
14. Cooperation
of the Parties. The parties to
this Agreement agree to cooperate fully and to execute any and all supplementary
documents and to take all additional actions that may be necessary or
appropriate to give full force and effect to the basic terms and intent of this
Agreement and the settlement embodies herein. The Xxxxxxxx Parties
further agree to fully cooperate with the Company in any and all pending or
future investigations, inquiries or litigation whether in any judicial,
administrative, or public, quasi-public or private forum, in which the Company
is involved or may become involved, whether or not the Xxxxxxxx Parties are a
defendant in such investigations, inquiries, proceedings or
litigation. The Xxxxxxxx Parties specifically agree to cooperate and
assist the Company with any and all matters relating to any filing of a
Voluntary Petition of Bankruptcy in the name of the Company under Chapter 7 of
the Bankruptcy Code. The Xxxxxxxx Parties shall provide truthful and accurate
testimony, background information, and other support and cooperation as the
Company may reasonably request. The Company will compensate the
Xxxxxxxx Parties for all reasonable travel and other out-of-pocket expenses
incurred by them in assisting the Company under this Section 14 upon submission
of supporting documentation reasonably acceptable to the Company.
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15. Modification
in Writing Only. Neither this
Agreement nor any provision of this Agreement may be modified or waived in any
way except by an agreement in writing signed by each of the parties hereto
consenting to such modification or waiver.
16. Construction
of this Agreement. The parties agree
that they each have participated in the drafting of this Agreement, and that, as
a result, this Agreement shall not be construed in favor of or against any party
hereto.
17. Headings
and Captions. The headings and
captions used in the Agreement are for convenience of reference only, and shall
in no way define, limit, expand, or otherwise affect the meaning or construction
of any provision of this Agreement.
18. Remedies. The Xxxxxxxx
Parties agree that money damages cannot adequately compensate the Company in
case of a breach or threatened breach of the covenants contained in Sections 5
or 12 and that, accordingly, the Company would be entitled to injunctive relief
upon such breach. The Xxxxxxxx Parties understand that it is the
Company’s intent to have the covenants contained in Sections 5 and 12 enforced
to their fullest extent. Accordingly, the Xxxxxxxx Parties and the
Company agree that, if any portion of the restrictions contained in Sections 5
or 12 are deemed unenforceable, the court shall construe and enforce these
covenants to the fullest extent permitted by law.
19. Notices. Any and all
notices necessary or desirable to be served hereunder shall be in writing and
shall be
(a) personally
delivered, or
(b) sent by
certified mail, postage prepaid, return receipt requested, or guaranteed
overnight delivery by a nationally recognized express delivery company, in each
case addressed to the intended recipient at the address set forth
below.
(c) For notices
sent to the Company:
0000
Xxxxxx Xxxxxx
Xxxx
Xxxxx, XX 00000
Attention:
Xx. Xxxxxxxxx Xxxx
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(d) For notices
sent to WRA&A & Xxxxxxx X. Xxxxxxxx:
Either
party hereto may amend the addresses for notices to such party hereunder by
delivery of a written notice thereof served upon the other party hereto as
provided herein. Any notice sent by certified mail as provided above
shall be deemed delivered on the third (3rd)
business day next following the postmark date which it bears.
20. Binding
Agreement. This Agreement
shall be binding upon and inure to the benefit of the parties hereto, jointly
and severally, and the past, present and future heirs, executors,
administrators, agents, executors, servants, attorneys, affiliated persons and
entities, predecessors and successors in interest and assigns, regardless of
form, trustees in bankruptcy or otherwise, and any other representative or
entity acting on behalf of, pursuant to, or by virtue of the rights of
each.
21. Non-Assignability: Assignment
in the Event of Acquisition or Merger. This Agreement,
and the benefits hereunder are not assignable or transferable by the Xxxxxxxx
Parties, and the rights and obligations of the Company under this Agreement will
automatically be deemed to be assigned by the Company to any corporation or
entity acquiring all or substantially all of the assets or stock of the Company
or of any corporation or entity with or into which the Company may be merged or
consolidated; provided, however, that in the event of Xxxxxxxx death, the
Company shall make such payments as may then be due and owing to the Xxxxxxxx
estate.
22. Entire
Agreement. This Agreement
contains the entire agreement of the parties concerning the subject matter
hereof, and is intended and shall be construed as an integrated
agreement. Each party understands, acknowledges and hereby represents
and warrants that this Agreement supersedes any and all prior or contemporaneous
understandings, agreements, representations and/or promises, whether oral or
written, which are not expressly set forth herein or expressly referred to in
this Agreement, and no understanding, agreement, representation,
warranty, promise or inducement has been made concerning the subject matter of
this Agreement other than as set forth in this Agreement, and that each party
enters into this Agreement without any reliance whatsoever upon any
understanding, agreement, representation, warranty or promise not set forth
herein.
23. Severability. Should any
provision of this Agreement be determined to be illegal or unenforceable, such
determination shall not affect the validity or enforceability of any other
provision of this Agreement.
[signature
page follows]
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IN WITNESS WHEREOF, the undersigned
have executed this Severance Agreement as of the Effective Date set forth
above.
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Xxxxxxx X. Xxxxxxxx and Associates,
Inc.
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By:
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/s/ | ||
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Name:
Xxxxxxx X. Xxxxxxxx
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Title:
Chief Executive Officer
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Date: February
10, 2009
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By:
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/s/ | ||
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Xxxxxxx
X. Xxxxxxxx
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Date: February
10, 2009
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By:
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/s/ | ||
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Name:
Xxxxxxxxx Xxxx
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Title:
Chief Executive Officer
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Date: February
10, 2009
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