EXHIBIT 10.16
SEVERANCE AGREEMENT
This SEVERANCE AGREEMENT ("Agreement") is made and entered into by and
between U.S. MedSys Corp. ("Company") and Xxxxx Xxxxx ("Futro").
WHEREAS, Futro has been employed by Company as an officer of Company
and its subsidiaries;
WHEREAS, Company and Futro desire to terminate the employment
relationship, upon mutually acceptable terms and to settle any and all
differences, claims and potential claims arising out of Futro's employment and
termination of employment with Company;
NOW THEREFORE, in consideration of the mutual promises and other
consideration contained herein and intending to be legally bound, the parties
agree as follows:
1. Severance. Futro hereby resigns, effective on the date of the
closing date of the Securities Purchase Agreement between Rangeley Corporation
and Montague Investments, Inc. (the "Employment Resignation Date"), from the
following positions: (i) an officer of Company; and (ii) an officer of any of
Company's subsidiaries.
2. Consideration Provided to Futro. On the Employment Resignation Date,
Company shall pay to Futro, in a lump sum without deduction or offset, other
than federal, state and local income tax withholdings, accrued back-pay of
$3,125.00 plus three months of severance pay of $18,750.00. The gross amount due
of $21,875.00 shall be processed though Company's payroll system and the net
amount, after deduction of income tax withholdings, shall be remitted to
Executive within five business days after the Employment Resignation Date.
Futro presently holds an option, originally granted on November 3, 2003, to
purchase 250,000 shares of common stock of the Company at a purchase price of
$.25 per share, that may be exercised on a "cashless exercise" basis (as fully
described in the Grant of Option issued to Futro). On the Employment Resignation
Date, Company shall adjust the purchase price of the option to a price per share
that will result in the issuance of exactly 175,000 shares of common stock on a
cashless exercise basis, and Futro shall exercise the option on such basis and
Company shall issue 175,000 shares of common stock to Futro. It is understood
that, for purposes of Rule 144 of the Securities Act of 1933, as amended,
Futro's holding period will be deemed to have commenced on November 3, 2003.
3. Futro's Release of All Claims. In consideration of this Agreement,
including, but not limited to, the mutual, binding promises contained herein,
and intending to be legally bound thereby, Futro, on behalf of himself, his
executors, legatees, devisees, administrators successors, and assigns, does
hereby irrevocably, forever and unconditionally release and forever discharge
Company and each of its past, present and future stockholders, agents,
directors, officers, executives, representatives, attorneys, and its
predecessors, successors, parents, affiliates, insurers, heirs, executors,
administrators and assigns, and all persons acting by, through, under or in
concert with any of them (collectively referred to herein as the "Released
Parties"), of and from any and all actions, causes of action, suits, debts,
judgments, charges and expenses (including attorneys' and paralegal fees and
costs at all levels of dispute resolution), of any nature whatsoever, asserted
or unasserted, known or unknown, ("Claims"), which Futro ever had, now has, or
hereafter may have against the Released Parties, in any way arising out of or
related to Futro's Claims for compensation or remuneration through the
Employment Resignation Date.
Page 1 of 5
In expansion of the foregoing release, Futro releases and forever discharges any
and all Claims he may have had against such Released Parties in any way arising
out of or related to discrimination on any basis prohibited by statute, public
policy or otherwise, including those under the Age Discrimination in Employment
Act of 1967, 29 U.S.C. 621 et seq., Title VII of the Civil Rights Act of 1964
("Title VII"), 42 U.S.C. 2000 et seq., 2101 et seq., the Americans with
Disabilities Act ("ADA") 42 U.S.C. 1201 et seq., the federal Family and Medical
Leave Act, 29 U.S.C. 2601 et seq., and the Executive Retirement Income Security
Act of 1974, 29 U.S.C. 1001 et seq., and as any or all of the foregoing are or
may be amended.
Expanding the foregoing releases further still, Futro releases Released Parties
of and from any and all Claims for wrongful discharge of any kind (including in
violation of public policy and constructive discharge).
4. Company's Release of all Claims. As part of the consideration for
Futro entering into this Agreement, Company for and on behalf of itself and all
of its past, present and future subsidiaries, parent corporations, affiliates,
directors, officers, executives, representatives, attorneys, insurers, heirs,
executors, administrators, assigns, and agents, and all persons acting by,
through, under or in concert with any of them, does hereby irrevocably, forever
and unconditionally release and forever discharge Futro, his personal
representatives, heirs, legatees, devisees, administrators, successors, assigns,
and future employers, and all persons acting by, through, under or in concert
with any of them (collectively referred to herein as the "Released Parties"), of
and from any and all Claims which Company ever had, now has, or hereafter may
have against the Released Parties, in any way arising out of or related to
Futro's employment and/or other service and/or capacity with Company or any of
its subsidiaries or affiliated entities or the termination of his employment
and/or other services and/or capacities with Company and its subsidiaries and
affiliated entities.
5. Assumption of Risk of Change in Facts. Futro and Company understand
that the facts under which they give their releases hereunder may prove to be
different than now known or believed by them, and each accepts and assumes the
risk thereof and agrees that their releases shall remain in full force and
effect and not subject to modification, termination or rescission by reason of
any difference in facts.
6. Covenant Not to Xxx. Subject to full performance of the other
party's obligations under this Agreement, each party hereto agrees that neither
such party nor any person or entity on such party's behalf has or shall
commence, maintain or prosecute any lawsuit, complaint, action or proceeding of
any kind against the other or their respective Released Parties with respect to
any Claims released by either party. The foregoing notwithstanding, this
covenant not to xxx does not extend to any claim for breach of this Agreement.
7. Company Records; Return of Company Property. Futro represents that
he shall return to Company any of the following that he has in his possession:
records and business documents, whether on computer or hard copy, and other
materials (including but not limited to computer disks and tapes, computer
programs and software, office keys, correspondence, files, customer lists,
technical information, customer information, pricing information, business
strategies, sales records and copies thereof) (collectively, the "Company
Records") provided by Company and/or its predecessors, subsidiaries or
affiliates and/or obtained as a result of his employment with, or in any of his
capacities with, or rendering of services for, Company and/or its predecessors,
subsidiaries or affiliates, and/or created by Futro while employed by and/or
rendering services to or for Company and/or its predecessors, subsidiaries or
affiliates. Futro acknowledges that all such Company Records are the property of
Company. In addition, Futro shall promptly return in good
Page 2 of 5
condition any and all physical assets in his possession that belong to Company.
As of Futro's Employment Resignation Date, Company will make arrangements to
remove, terminate or transfer from Futro any and all business communication
lines including network access, cellular phone, fax line and other business
numbers belonging to or leased by Company.
8. Confidential Information. Futro acknowledges that, during his
employment and other service with Company and/or its subsidiaries or affiliated
entities, he has had access to confidential and other information proprietary to
Company and/or its subsidiaries or affiliated entities, including but not
limited to trade secrets, operations, customer information, customer prospects,
strategic plans, inventions, business plans, formulas processes, designs,
methods, techniques, know-how, systems, software programs, works of authorship,
plans, proposals, information about products, and other proprietary information
(the "Confidential Information"). Futro agrees that he has not and shall not at
any time disclose to any person or entity the Confidential Information acquired
during or in connection with his employment with or in rendering services to
Company and/or any of its subsidiaries and affiliates without prior written
permission from Company. Futro agrees that he shall keep secret the Confidential
Information and all matters that have been entrusted to him and shall not use or
attempt to use any of the Confidential Information in any manner that may injure
or cause loss or may be calculated to injure or cause loss, whether directly or
indirectly, to Company and/or its subsidiaries and affiliates.
The above restrictions shall not apply to: (i) information that at the time of
disclosure is in the public domain through no fault of Futro; (ii) information
received from a third party outside of Company that was disclosed without a
breach of any confidentiality obligation; (iii) information approved for release
by written authorization of Company; or (iv) information that may be required by
law or an order of any court, agency or proceeding to be disclosed; provided,
Futro shall provide Company with notice of any such required disclosure once
Futro has knowledge of it and will provide all reasonable help to Company to
obtain an appropriate protective order.
9. Non-disparagement. Each party agrees to make no disparaging
statements, or any other communication or publication relating to the other
party that would tend to denigrate or discredit the other party, regardless of
whether such party believes the statement or communication to be true. This
provision extends to the past, present and future officers, directors, managers,
employees, shareholders, agents, consultants, advisors, accountants, attorneys,
business associates, successors and assigns of the respective parties.
10. Non-interference. Company shall not interfere with any request by
Futro to publicly or privately sell any shares of common stock of Company owned
by Futro. Upon presentment of a request by Futro to Company's transfer agent to
sell or transfer shares privately, under Rule 144 of the Securities Act of 1933,
as amended, or to remove a restrictive legend under Rule 144(k), Company shall
provide to the transfer agent (with a copy to Futro), within two business days,
of any authorization or legal opinion requested by the transfer agent.
11. Indemnification. The indemnification(s) of Futro from Company that
Futro enjoyed by and through his employment, the Bylaws and Articles of
Incorporation of Company, the laws of the State of Colorado (to the fullest
extent permitted) and/or any other written instrument executed and delivered by
Company prior to the Employment Resignation Date shall not be abridged by the
execution and delivery of this Agreement or the termination of Futro's
employment with Company under this Agreement and the same shall survive the
execution and delivery of this Agreement, and termination of Futro's employment
with Company under this Agreement.
Page 3 of 5
Further, Company shall protect, defend, indemnify and hold Futro
harmless from and against all losses, liabilities, damages, judgments, claims,
counterclaims, demands, actions, proceedings, costs and expenses (including the
advancement of legal fees for attorneys chosen by Futro) of every kind and
character, resulting from or relating to or arising out of Futro's services
provided to Company through the Employment Resignation Date, alleged by any
third-party or any state or federal regulatory agency.
12. Future cooperation. Futro agrees that he will cooperate with
Company on current and future regulatory investigations and/or litigation
matters involving Company when Company's Board of Directors reasonably
determines that the assistance of Futro is necessary; provided, however, that
Company provides reasonable advance written notice to Futro regarding such
cooperation; provided further that Company agrees to be flexible and reasonable
with respect to the scheduling of such assistance; provided further that a
reasonable fee of $100.00 per hour and any expenses incurred by Futro in
connection with such cooperation shall be advanced to Futro by Company; and
provided further that Futro shall not be required to provide any such assistance
if Futro's counsel reasonably believes such assistance would conflict with
Futro's ability to use one or more legal or equitable defenses available to him
but not to Company, unless Company provides adequate indemnity to Futro for such
conflict.
13. Knowing and Voluntary Agreement. Each party hereto hereby
acknowledges that such party has carefully read and understands all of the
provisions and effects of this Agreement; that each is voluntarily and knowingly
entering into this Agreement free of coercion or duress; and that in agreeing to
sign this Agreement, the parties have not, except for representations, promises,
statements, or explanations made herein or in an exhibit attached hereto, relied
on any representations, promises, agreements, statements or explanations made by
any party hereto or their respective attorneys concerning the terms or effects
of this Agreement in connection with their respective decisions to execute the
same.
14. Governing Law, Jurisdiction and Venue. This Agreement and any
controversy which might arise herefrom will in all respects be interpreted,
enforced and governed by the laws of the State of Colorado, and that in any
action, special proceeding or other proceeding that may be brought arising out
of, in connection with or by reason of this Agreement, shall be brought only in
a court of competent jurisdiction within the City and County of Denver,
Colorado.
15. Change, Modification and Waiver. No change or modification of this
Agreement shall be valid unless it is in writing and signed by Futro and an
authorized officer of Company. No waiver of any provision of this Agreement
shall be valid unless it is in writing and signed by the party against whom the
waiver is sought to be enforced (in the case of Company, by an authorized
officer of Company). The failure of a party to insist upon strict performance of
any provision of this Agreement in any one or more instances shall not be
construed as a waiver or relinquishment of the right to insist upon strict
compliance with such provision in the future.
16. Integration. This Agreement and its exhibits constitutes the entire
agreement between Company and Futro concerning the subject matters hereof and
supercedes all prior representations, promises and agreements, whether oral or
written, implied or otherwise with respect thereto.
17. Severability. Any provision of this Agreement, which is adjudged to
be prohibited or unenforceable, shall be ineffective to the extent of such
prohibition or unenforceability without affecting the validity or enforceability
of the remainder of this Agreement.
Page 4 of 5
18. Attorneys Fees. In the event an action is brought for breach of or
to enforce this Agreement, including arbitration, the prevailing party shall
receive its reasonable attorneys and paralegal fees and costs at all levels of
dispute resolution involved as determined by the court or arbitrators, as the
case may be.
19. Voiding Provision. This Agreement shall become null and void and of
no force or effect if the closing of Securities Purchase Agreement between
Rangeley Corporation and Montague Investments, Inc. does not occur.
IN WITNESS WHEREOF, and intending to be legally bound hereby, the
parties have agreed to and executed the foregoing Severance Agreement, effective
as of the last date written below.
FUTRO:
/s/ Xxxxx Xxxxx 05/06/05
------------------------------- ---------------------
Xxxxx Xxxxx Date
COMPANY:
U.S. MEDSYS CORP.
/s/ Xxxxxx Xxxxxxxx
By:
----------------------------
Its: Vice President 05/06/05
--------------------------- ---------------------
Date
Page 5 of 5
