SEPARATION AND RELEASE AGREEMENT
This Separation and Release Agreement
(the “Agreement”) dated as
of the 6th day of
August, 2010, is by and between China 3C Group, a Nevada corporation having its
principal place of business at 000 XxXxx Xxx Xxxx, XxxxXxxx Xxxx, Xxxxxxxx
Xxxxxxxx, People’s Republic of China 31001 (the “Company”) and Xxxxxxx
Xxxxxxx, an individual resident in the Commonwealth of Virginia with a residence
of 000 Xxxxxxxxxx Xxxxx, Xxxxxxx, XX, Xxxxxx Xxxxxx of America 23229 (“Berents”).
WHEREAS, Berents has served as a member
of the Company’s Board of Directors, and as Chairman of the Company’s Audit
Committee, pursuant to that certain Board of Directors Agreement by
and between Company and Director dated as of December 7, 2006 (the “Board Agreement”);
and
WHEREAS, Berents shall cease to be a
member of the Company’s Board of Directors and Chairman of the Company’s Audit
Committee effective as of August 6, 2010 upon the terms and subject to the
conditions contained herein.
NOW THEREFORE, in consideration of the
promises and of the mutual covenants contained herein, and other good and
valuable consideration the receipt and sufficiency of which is hereby
acknowledged, the parties do hereby covenant and agree as follows:
1. Termination
Date. Subject to the satisfaction by the Company of the
conditions set forth in Sections 2 and 3 of this Agreement, the
parties agree that the Board Agreement shall be terminated effective
as of August 6, 2010 (the “Termination Date”). The termination
of the Board Agreement shall be deemed to be a resignation by Berents as a
director of the Company.
2. Accrued
But Unpaid Directors Fees. Concurrently with the
execution and delivery of this Agreement, the Company shall pay to
Berents, as a lump sum via wire transfer to Berents’ bank account all accrued
and unpaid fees owed to Berents by the Company pursuant to the Board Agreement
through the Termination Date..
3. Stock
Options. Schedule I to this Agreement sets forth the quantity, and
exercise price, of all options to purchase shares of the Company’s common stock
accrued by Berents pursuant to the Board Agreement through the Termination Date.
Notwithstanding the foregoing, the Company and Berents have agreed that in lieu
of the 30,000 options that were issuable to Berents in December 2009, that,
concurrently with the execution and delivery of this Agreement, the
Company shall pay to Berents, as a lump sum via wire transfer to Berents’ bank
account the sum of US $2,000 (Two Thousand United States Dollars).
4. Release
by Berents. Berents expressly waives any claims against the
Company and releases the Company (including its officers, directors,
stockholders, managers, agents and representatives) from any claims that he may
have in any way connected with his service as a director of the Company and the
termination of the Board Agreement. This waiver and release shall not
waive or release claims (a) where the events in dispute first arise after
execution of this Agreement; (b) related to Section 5 of this Agreement; (c)
with respect to which Berents may be entitled to indemnification pursuant to
Section 7 hereof or (d) otherwise related to the enforcement of his rights under
this Agreement.
5. Release
by the Company. The Company expressly waives any claims
against Berents and releases Berents from any claims that it may have in any way
connected with Berents’ service as a director of the Company and the termination
thereof. This waiver and release shall not waive or release claims
where the events in dispute first arise after execution of this
Agreement.
6. Company
Representations. To induce Berents to enter into this
Agreement, the Company represents and warrants as follows: (i) The Company has
all necessary corporate power and corporate authority to enter into, and to
perform its obligations under this Agreement; (ii) the Company has authorized,
by all necessary corporate action, the execution, delivery and performance of
this Agreement; (iii) this Agreement constitutes the legal, valid and binding
obligation of the Company enforceable against the Company in accordance with its
terms.
7. Indemnification.
(a) The
Company shall reimburse, indemnify and hold harmless Berents, to the full extent
lawful, from and against any and all losses, claims, damages or liabilities of
any nature whatsoever with respect to or arising from (i) the fact that Berents
was a director of the Company, except to the extent that Berents is liable for
such losses because of his own gross negligence, bad faith or misconduct and
(ii) any breach by the Company of the terms of this Agreement. Any
indemnification required hereunder to be made by the Company shall be made
promptly following the fixing of the liability, loss, damage, cost or expense
incurred or suffered by a final judgment of any court, settlement, contract or
otherwise All reasonable expenses incurred by Berents in defending
any action, suit or proceeding with respect to matters as to which Berents is
entitled to indemnification shall be paid by the Company in the event and to the
extent that it shall ultimately be determined that Berents is entitled to
indemnification by the Company under the provisions of this
Agreement.
(b) Promptly
after receipt by Berents of a notice of the commencement of any action, Berents
will, if a claim in response thereof is to be made against the Company, notify
the Company in writing of the commencement thereof; but the omission so to
notify the Company shall not relieve the Company from any liability that it may
have to Berents hereunder. In case any such action shall be brought
against Berents and he notifies the Company of the commencement thereof, the
Company shall be entitled to participate therein and, to the extent that it
shall wish, to assume the defense thereof, with counsel reasonably satisfactory
to Berents and, after notice from the Company of its election so to assume the
defense thereof, the Company shall not be liable to Berents for any legal
expenses of other counsel or any of the expenses, in each case subsequently
incurred by Berents, unless (i) the Company and Berents shall have mutually
agreed to the retention of such counsel or, (ii) the named parties to any
such proceeding (including any impleaded parties) include both the Company and
Berents and representation of both parties by the same counsel would be
inappropriate in the reasonable opinion of Berents, due to actual or potential
differing interests between them.
8. Statements
Regarding the Company and/or Berents. Berents agrees not to do or say
anything, directly or indirectly, that reasonably may be expected to have the
effect of criticizing or disparaging the Company or impairing the goodwill and
reputation of the Company or the products and services it provides.
Notwithstanding the foregoing, nothing contained in this Agreement shall have or
be construed to have the effect of prohibiting Berents’ right to
participate in any investigation by a state or federal agency charged with
enforcing any state or federal laws. The Company agrees not to do or say
anything, directly or indirectly, that reasonably may be expected to have the
effect of criticizing or disparaging Berents or his reputation. The Company
further agrees not to assert that Berents has acted improperly or unlawfully in
the course of his service as a director of the Company.
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9.
Enforcement.
The parties hereto agree that in the event of any breach of this Agreement that
monetary damages alone may not adequately compensate the non-breaching party for
its losses and therefore it is entitled to injunctive relief.
10. Entire
Agreement. This Agreement contains
the entire understanding of Berents and the Company concerning the subjects it
covers and it supersedes all prior understandings and representations. This
Agreement may not be modified or supplemented except by a subsequent written
agreement signed by all parties.
11. Successorship.
It is the intention of the parties that the provisions hereof are binding upon
the parties, their employees, affiliates, agents, heirs, successors and assigns
forever.
12. Governing
Law. This Agreement shall be governed by the laws of the State of New
York without regard to its conflict of laws principles.
13. Severability. The
provisions of this Agreement are severable, and if any part of it is found to be
unlawful or unenforceable, the other provisions of this Agreement shall remain
fully valid and enforceable to the maximum extent consistent with applicable
law.
14. Counterparts. This
Agreement may be executed in one or more counterparts, all of which taken
together shall constitute one agreement.
15. Notices. All
notices and other communications hereunder shall be in writing and shall be
deemed to have been duly given if delivered in person, sent by recognized
overnight courier, registered or certified mail, postage prepaid, or sent via
facsimile transmission or electronic mail (with confirmed receipt and hard copy
sent by mail) to the parties to their addresses specified
herein.
[Signature
Page Follows]
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IN WITNESS WHEREOF, the parties hereto
have executed this Agreement as of the date first written above.
| Xxxxxxx Xxxxxxx | China 3C Group | |||
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/s/
Xxxxxxx Xxxxxxx
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/s/
Xxxxxxxxx Xxxx
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Xxxxxxxxx
Xxxx
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Chief
Executive Officer and Chairman
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