SEPARATION AGREEMENT
This
Separation Agreement (“Agreement”) is entered into effective this 26th day of
September, 2008 by and between Gateway International Holdings, Inc., a Nevada
corporation, and its subsidiaries (“Gateway”) and Xxxxxxxx
X. Xxxxxxxx, an individual (“Xxxxxxxx”). Gateway and Xxxxxxxx shall each be
referred to as a “Party” and collectively as the “Parties.”
RECITALS
WHEREAS,
Gateway is a company
engaged in the acquisition, refurbishment, distribution and sales of pre-owned
computer numerically controlled (“CNC”) machine tools to manufacturing customers
across the United States of America;
WHEREAS,
Xxxxxxxx resigned from his positions as an Executive Vice President and a
Director of Gateway, and from all positions he held with Gateway’s subsidiaries;
WHEREAS,
Gateway to accepted Xxxxxxxx’x resignation from the above-mentioned positions;
WHEREAS,
by this Agreement the Parties wish to memorialize the terms of Xxxxxxxx’x
resignation from Gateway;
NOW,
THEREFORE, for good and adequate consideration, the receipt of which is hereby
acknowledged, without admitting or denying any wrongdoing by any Party hereto,
the Parties hereto covenant, promise and agree as follows:
AGREEMENT
1. In
exchange for Xxxxxxxx’x resignation Gateway and Xxxxxxxx agreed certain
outstanding matters would be resolved after the effective date of his
resignation. This Agreement resolves all outstanding issues between Gateway
and
Xxxxxxxx. A copy of Xxxxxxxx’x resignation is attached hereto as Exhibit
A.
2. This
Agreement shall not be in any way be construed as an admission by Gateway that
it has acted wrongfully with respect to Xxxxxxxx or any other person, or that
Xxxxxxxx has any rights whatsoever against Gateway.
3. Xxxxxxxx’x
resignation is not and cannot be construed as an involuntary or without cause
termination under the terms of Sections 2 and 4.2.4, or a termination by
executive for good reason under Sections 4.1.4 and 4.2.4, of that certain
Employment Agreement entered into by and between Xxxxxxxx and Gateway on or
about February 7, 2007 (the “Employment Agreement”). Xxxxxxxx’x resignation
terminated the Employment Agreement, and this Agreement supersedes the
Employment Agreement with regard to all material terms.
4.
Xxxxxxxx
acknowledges that he is aware that even if he does not sign this Agreement,
Gateway will pay Xxxxxxxx all compensation earned through the date of his
resignation, plus any accrued vacation benefits and properly submitted expense
reports. Similarly, Xxxxxxxx further acknowledges that he is aware that even
if
he does not sign this Agreement, he will be offered benefits to which he is
entitled under the Consolidated Omnibus Budget Reconciliation Act of 1985
("COBRA"), if applicable.
5.
In
exchange for the promises contained in this Agreement and release of claims
as
set forth below, and provided that Xxxxxxxx signs this Agreement and returns
it
to Gateway’s President by October 22, 2008, and does not revoke his consent to
this Agreement as set forth in Section 14(d):
a.
Gateway
will pay Xxxxxxxx a severance in the amount of nine full months (October 2008
through June 2009) of pay at Xxxxxxxx’x regular rate of pay at the time of his
resignation, with such payments made in accordance with Gateway’s regular
payroll practices;
b. Gateway
will pay Xxxxxxxx’x full medical benefits in accordance with the medical plan he
is currently under, for the same nine-month period; and
c. Gateway
will pay Xxxxxxxx a car allowance for car-related expenses, including, but
not
limited to, car payment, car insurance, repairs, and gas, equal to Xxxxxxxx’x
car allowance at the time of his resignation, for the same nine-month period.
If
any payments are made to Xxxxxxxx under this Sub-Section, and Xxxxxxxx collects
insurance proceeds for the same repairs or issues, such insurance proceeds
shall
be paid by Xxxxxxxx to Gateway.
6. In
exchange for the promises contained in this Agreement, Xxxxxxxx will return
400,000 shares of Gateway’s common stock that he owns for cancellation and
deposit into Gateway’s treasury stock in repayment of business expenses payments
paid to Xxxxxxxx prior to May 2008. In order to cancel these shares, Xxxxxxxx
agrees to sign and return, with a valid medallion guarantee, the stock power
attached hereto as Exhibit
B,
and no
payments will be made to Xxxxxxxx under this Agreement until the stock power
has
been received by Gateway with a signed copy of this Agreement.
7. In
consideration of this Agreement, effective on the date hereof and except as
otherwise provided herein, Xxxxxxxx, and his respective agents and assigns,
hereby release Gateway and each and all of its present and former agents,
officers, directors, shareholders, attorneys, and employees, from and against
any and all claims, agreements, contracts, covenants, representations,
obligations, losses, liabilities, demands and causes of action which it may
now
or hereafter have or claim to have against Gateway, as a result of Xxxxxxxx’x
employment by Gateway. This release of claims and defenses shall not alter
the
prospective duties between the Parties under this Agreement.
8. Xxxxxxxx
acknowledges and agrees that this release applies to all claims that he may
have
against Gateway arising out of, or pertaining to his employment by Gateway,
including, but not limited to, causes of action, injuries, damages, claims
for
costs or losses to a Party’s person and property, real or personal, whether
those injuries, damages, or losses are known or unknown, foreseen or unforeseen,
or patent or latent. Xxxxxxxx agrees not to file any complaints, causes of
action, or grievances with any governmental, state or county entity against
Gateway arising out of, or pertaining his employment by Gateway. Additionally,
Xxxxxxxx acknowledges that his resignation acts as a termination of the
Employment Agreement.
9. Xxxxxxxx
expressly agrees and understands that the above releases will be effective
as of
the date of this Agreement and that his sole remedy against Gateway, or any
of
its officers or directors, regarding his employment by Gateway will be for
breach of this Agreement.
10. Section
1542 Release.
It is
understood and agreed by Xxxxxxxx that all rights under Section 1542 of the
Civil Code of California, which provides as follows:
“A
general release does not extend to claims which the creditor does not know
or
suspect to exist in his favor at the time of executing the release, which if
known by him must have materially affected his settlement with the
debtor,”
are
hereby expressly waived. Xxxxxxxx further waives any protection under California
Civil Code Section 1542. Xxxxxxxx acknowledges, agrees and understands the
consequences of a waiver of Section 1542 of the California Civil Code and
assumes full responsibility for any and all injuries, damages, losses or
liabilities that may hereinafter arise out of or be related to Xxxxxxxx’x
employment by Gateway. Xxxxxxxx understands and acknowledges that the
significance and consequence of this waiver of Section 1542 of the Civil Code
is
that even if a Xxxxxxxx should eventually suffer additional damages arising
out
of the subject matter hereof, he will not be permitted to make any claim for
those damages. Furthermore, Xxxxxxxx acknowledges that he intends these
consequences even as to claims for damages that may exist as of the date of
this
Agreement but which he does not know exists, and which, if known, would
materially affect his decision to execute this Agreement, regardless of whether
his lack of knowledge is the result of ignorance, oversight, error, negligence,
or any other cause.
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11. In
exchange for Xxxxxxxx’x release of Gateway, its officers, directors,
shareholders, attorneys, employees, consultants and advisors as set forth in
this Agreement, Gateway hereby agrees to release Xxxxxxxx from the
non-competition provisions contained in Section 5.1.1 of the Employment
Agreement, and any other agreements between Gateway and Xxxxxxxx. In addition,
Gateway agrees to indemnify Xxxxxxxx for any legal fees or costs, and any
damages that Xxxxxxxx is forced to pay as a result of the lawsuit entitled
Xxxxxxx
Xxxxxx and Xxxxxxxxxxx Xxxxxx v. Gateway International Holdings, Inc., Xxxxxxxx
Xxxxxxxx, Xxxxxxx Xxxxxxxx and Xxx Xxxxxxxx, Case No.
00-0000-0000000,
so long
as those damages are not a result of intentional or fraudulent acts by
Xxxxxxxx.
12.
On
or
before October 1, 2008, and before any severance will be paid under this
Agreement, Xxxxxxxx agrees to return to Gateway all of the company's property
in
his possession including, but not limited to, all Gateway documents and files,
all Gateway credit cards, and all of the tangible and intangible property
belonging to Gateway and relating to Xxxxxxxx’x employment with the Company; and
to allow access to any computer used for Gateway business, including disks
and
electronic files.
13.
Xxxxxxxx
agrees to cooperate fully with Gateway in its defense of or other participation
in any administrative, judicial or other proceeding arising from any charge,
complaint or other action which has been or may be filed.
14.
In
the
event that Xxxxxxxx breaches any of his obligations under Sections 12 and 13,
any outstanding obligations of Gateway hereunder shall immediately terminate,
any payments previously made to Xxxxxxxx pursuant to Section 5 shall be returned
to Gateway, and Gateway reserves the right to pursue legal action against
Xxxxxxxx for any damages caused by such breach.
15. Each
Party hereto will hold and will cause its agents, officers, directors,
attorneys, employees, consultants and advisors to hold in strict confidence,
unless compelled to disclose by judicial or administrative process or, in the
opinion of its counsel, by other requirements of law, the terms of this
Agreement and all other documents and information concerning any other Party
furnished it by such other Party or its representatives in connection with
the
subject matter hereof or Xxxxxxxx’x employment by Gateway (except to the extent
that such information can be shown to have been (i) previously known by the
Party to which it was furnished, (ii) in the public domain through no fault
of
such Party, or (iii) later lawfully acquired from other sources by the Party
to
which it was furnished), and each Party will not release or disclose such
information to any other person, except its auditors, attorneys, financial
advisors, bankers and other consultants and advisors in connection with this
Agreement. Each Party shall be deemed to have satisfied its obligation to hold
confidential information concerning or supplied by the other Party if it
exercises the same care as it takes to preserve confidentiality for its own
similar information.
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16. Except
the claims expressly not waived by the other provisions of this Agreement,
such
as Section 17(b) below, Xxxxxxxx, on his own
behalf,
and anyone claiming through him, irrevocably and unconditionally releases,
acquits and forever discharges Gateway and/or its subsidiaries, divisions,
predecessors, successors and assigns, as well as each of their past and present
officers, directors, employees, shareholders, trustees, joint venturers,
partners, and anyone claiming through them (hereinafter “Releasees”
collectively), in each of their individual and/or corporate capacities, from
any
and all claims, liabilities, promises, actions, damages and the like, known
or
unknown, which Xxxxxxxx has ever had against any of the Releasees arising out
of
or relating to Xxxxxxxx’x employment with Gateway and/or the termination of
Xxxxxxxx’x employment with Gateway. Said claims include, but are not limited to:
(1) employment discrimination (including claims of sex discrimination and/or
sexual harassment) and retaliation under Title VII (42 U.S.C.A. 2000e etc.)
and
under 42 U.S.C.A. section 1981 and section 1983, age discrimination under the
Age Discrimination in Employment Act (29 U.S.C.A. sections 621-634) as amended,
under the California Constitution, under any Fair Employment and Housing Act
(“FEHA”), under the California Labor Code and/or any other relevant state
statutes or municipal ordinances; (2) disputed wages; (3) wrongful discharge
and/or breach of any alleged employment contract; and (4) claims based on any
tort, such as invasion of privacy, defamation, fraud and infliction of emotional
distress. Xxxxxxxx agrees that he will not bring any legal action against any
of
the Releasees for any claim waived and released under this Agreement and he
represents and warrants that no such claim has been filed to date. Xxxxxxxx
further agrees if he brings any type of administrative or legal action arising
out of claims waived or released under this Agreement, Xxxxxxxx will bear all
legal fees and costs, including those of the Releasees.
17. Xxxxxxxx
also acknowledges that he has been informed pursuant to the federal Older
Workers Benefit Protection Act of 1990 that:
x.
Xxxxxxxx
has the right to consult with an attorney before signing this
Agreement;
x.
Xxxxxxxx
does not waive rights or claims under the federal Age Discrimination in
Employment Act that may arise after the date this waiver is
executed.
x.
Xxxxxxxx
has twenty-one (21) days from the date of this Agreement to consider this
Agreement;
x. Xxxxxxxx
has seven (7) days after signing this Agreement to revoke the Agreement, and
the
Agreement will not be effective until that revocation period has
expired.
18. Each
Party acknowledges and represents that, in executing this Agreement, such Party
has had the opportunity to consult legal counsel, and has not relied on any
inducements, promises, or representations made by any Party or any party
representing or serving such Party, unless expressly set forth
herein.
19. This
Agreement pertains to a disputed claim and does not constitute an admission
of
liability by any Party for any purpose, except as otherwise provided
herein.
20. This
Agreement may not be amended, canceled, revoked or otherwise modified except
by
written agreement subscribed by all of the Parties to be charged with such
modification.
21. This
Agreement shall be binding upon and shall inure to the benefit of the Parties
hereto and their respective partners, employees, agents, servants, heirs,
administrators, executors, successors, representatives and assigns.
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22. All
Parties hereto agree to pay their own costs and attorneys' fees except that
in
the event of any action, suit or other proceeding instituted to remedy, prevent
or obtain relief from a breach of this Agreement, arising out of a breach of
this Agreement, involving claims within the scope of the releases contained
in
this Agreement, or pertaining to a declaration of rights under this Agreement,
the prevailing Party shall recover all of such Party's attorneys' fees and
costs
incurred in each and every such action, suit or other proceeding, including
any
and all appeals or petitions therefrom.
23. This
Agreement and the rights of the parties hereunder shall be governed by and
construed in accordance with the laws of the State of California including
all
matters of construction, validity, performance, and enforcement and without
giving effect to the principles of conflict of laws. Venue for any action
brought under this Agreement shall be in the appropriate court in Orange County,
California.
24. This
Agreement sets forth the entire agreement and understanding of the Parties
hereto and supersedes any and all prior agreements, arrangements and
understandings related to the subject matter hereof. No understanding, promise,
inducement, statement of intention, representation, warranty, covenant or
condition, written or oral, express or implied, whether by statute or otherwise,
has been made by any party hereto which is not embodied in this Agreement or
the
written statements, certificates, or other documents delivered pursuant hereto
or in connection with the transactions contemplated hereby, and no Party hereto
shall be bound by or liable for any alleged understanding, promise, inducement,
statement, representation, warranty, covenant or condition not so set
forth.
25. The
Parties represent that they fully understand their right to review all aspects
of this Agreement with an attorney of their choice, that they have had the
opportunity to consult with an attorney of their choice, that they have
carefully read and fully understands all the provisions of this Agreement and
that they freely, knowingly and voluntarily entering into this Separation
Agreement. By signature below the Parties acknowledge they willing to enter
into
this Agreement. Xxxxxxxx, by signing this Agreement and returning to Gateway
on
or before October 22, 2008, signifies his acceptance of this Agreement. As
noted
earlier, this Agreement will not become effective, and none of the severance
benefits in Section 5 will be paid, until seven (7) days after the date Xxxxxxxx
signs this Agreement.
[signature
page follows]
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IN
WITNESS WHEREOF, the Parties hereto, agreeing to be bound hereby, execute this
Agreement upon the date first set forth above.
|
“Gateway”
|
“Xxxxxxxx”
|
|
|
Gateway
International Holdings, Inc.,
|
Xxxxxxxx
X. Xxxxxxxx
|
|
|
a
Nevada corporation
|
an
individual
|
|
|
/s/
Xxxxxx Xxxxxxxx
|
/s/
Xxxxxxxx X. Xxxxxxxx
|
|
|
By:
Xxxxxx Xxxxxxxx
|
By:
Xxxxxxxx X. Xxxxxxxx
|
|
|
Its:
Executive Vice President
|
||
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Exhibit
A
RESIGNATION
7
Exhibit
B
STOCK
POWER
8
IRREVOCABLE
STOCK POWER
FOR
VALUE
RECEIVED, the undersigned does hereby sell, assign and transfer to Gateway
International Holdings, Inc., for cancellation, a total of Four Hundred Thousand
(400,000) shares of Common Stock of Gateway International Holdings, Inc., a
Nevada corporation, represented by stock certificate No. _________, issued
in
the name of the undersigned. Any remaining shares from stock certificate No.
_________, if any, to be returned to the undersigned.
IN
WITNESS HEREOF, the party below has executed this Irrevocable Stock Power as
of
the date indicated by his signature below.
| Dated: __________________, 2008 | ||
| By: Xxxxxxxx X. Xxxxxxxx | ||
| Medallion Guaranteed | ||
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