SEPARATION AGREEMENT
This
agreement (the “Agreement”) effective on the last day executed below, is entered
into between I. XXXXXX WEERARTNE (“Employee”) and CHINA DIRECT,
INC., a Florida corporation (“Employer”) relating to Employee’s employment and
separation from employment with Employer and its subsidiaries.
In
consideration of the execution and delivery of the Agreement and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby agree as follows:
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1.
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Separation
from Employment and Severance
Payment.
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1.1.
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Employee’s
separation will be effective May 22, 2009 (the “Separation
Date”). Employee will receive: (i) on the date this agreement
is signed by the parties, the cash portion of his pay for earnings from
May 1, 2009 through May 31, 2009 in the amount of $4,166.66 less certain
payroll deductions in the amount of $318.75 for Medicare and FICA; and
(ii) upon expiration of the Revocation Period, as hereinafter defined,
34,367 shares of China Direct, Inc. common stock (the “Stock Based
Compensation”). The shares included in the Stock Based
Compensation have been registered by the Company under the Securities Act
of 1933, as amended. The cash payment and stock award covers
all of the Employer’s obligations to Employee. Employee
acknowledges that no other compensation, vacation pay, sick pay or any
other money is currently owed to
Employee.
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2.
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Covenants
of Employee.
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2.1.
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As
of the Separation Date, Employee shall resign as Employer’s Chief
Financial Officer and from any and all other offices or positions Employee
may have had with Employer or any of its subsidiaries or affiliated
companies effective on the Separation Date. Employee agrees to
sign a form of resignation letter attached hereto as Exhibit A. Employee
hereby confirms that Employee’s resignation was not the result of any
disagreement with Employer on any matter relating to its operation,
policies (including accounting or financial policies) or
practices.
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2.2.
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In
exchange for the promises which Employer makes in this Agreement, Employee
promises to waive and to release Employer and its subsidiaries, including
but not limited to, China Direct Investments, Inc., from liability for all
rights and claims, whether or not they are presently known to exist, that
Employee has against Employer relating in any way to Employee’s employment
or separation from employment with Employer and its
subsidiaries.
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2.3.
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The
rights and claims which Employee waives and releases in this Agreement
include, to every extent allowed by law, those arising under the Employee
Retirement Income Security Act of 1974, the Civil Rights Acts of 1866,
1871, 1964 and 1991, the Rehabilitation Act of 1973, the Fair Labor
Standards Act, the Equal Pay Act of 1963, the Vietnam Era Veteran’s
Readjustment Assistance Act of 1974, the Occupational safety and Health
Act, the Immigration reform and Control Act of 1986, the Americans with
Disabilities Act, the Age Discrimination in Employment Act of 1967, the
Older Worker’s Benefit Protection Act, and the Florida Civil Rights
Act. This is not a complete list, and Employee waives and
releases all similar rights and claims under all other federal, state and
local discrimination provisions and all other statutory and common law
causes of action relating in any way to Employee’s employment or
separation from employment with
Employer.
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2.4.
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Employee
hereby agrees to remise, release, acquit, satisfy, and forever discharge
Employer, of and from all, and all manner of action and actions, cause and
causes of action, suits, debts, dues, sums of money, accounts, reckonings,
bonds, bills, specialties, covenants, contracts, controversies,
agreements, promises, variances, trespasses, damages, judgments,
executions, claims and demands whatsoever, in law or in equity, which
Employee ever had, now has, or which any personal representative,
successor, heir or assign of Employee, hereafter can, shall or may have,
against Employer, for, upon or by reason of any matter, cause or thing
whatsoever, from the beginning of the world to the day of this
Agreement.
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2.5.
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Employee
agrees not to testify for, appear on behalf of, or otherwise assist in any
way any individual, company, or agency in any claim against Employer,
except, unless, and only pursuant to a lawful subpoena issued to
Employee. If such a subpoena is issued, Employee will
immediately notify Employer and provide it with a copy of the
subpoena.
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2.6.
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Employee
agrees and promises not to undertake any disparaging conduct directed at
Employer and shall refrain from making any negative or derogatory
statements concerning Employer.
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2.7.
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Employee
agrees to waive Employee’s right to future employment with Employer which
Employee ever had, may now have, or may hereafter have, whether known or
unknown to Employee at the time of execution of this
Agreement.
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2.8.
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Employee
understands and agrees that as of the Separation Date, Employee was and is
no longer authorized to incur any expenses or obligations or liabilities
on behalf of Employer.
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2.9.
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Employee
acknowledges and agrees that, during the period of Employee’s employment
by Employer, Employee had access to confidential, proprietary, strategic
and sensitive information relating to Employer's business and affairs and
the business and affairs of its affiliates and clients, including, without
limitation, materials used for identifying clients, client information and
lists, information concerning ongoing and potential assignments, internal
operating procedures, business plans, projections, valuations techniques,
financial models and research data. Employee also acknowledges
and agrees that such information is special and unique to Employer and its
affiliates and clients. Employee hereby agrees and covenants
that Employee will not, directly or indirectly, publish, disclose or make
accessible to any other person, firm, corporation, organization or entity,
including, without limitation, any member of her family, any confidential,
proprietary, strategic or sensitive information whatsoever relating,
directly or indirectly, to Employer's clients, including such clients’
names, business, or affairs or the business or affairs of any of
Employer's affiliates or clients, that Employee may learn or initiate and
develop a business relationship with during Employee’s employment by
Employer, whether or not such information is specifically designated as
confidential, proprietary, strategic or
sensitive.
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2.10.
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Employee
will not at any time after the Separation Date disclose or use for
Employee’s own benefit or purposes or the benefit or purposes of any other
person, firm, partnership, joint venture, association, corporation or
other business organization, entity or enterprise other than Employer and
any of its subsidiaries or affiliates, any trade secrets, information,
data or other confidential information relating to customers, development
programs, costs, marketing, trading, investment, sales activities,
promotion, credit and financial data, manufacturing processes, financing
methods, plans or the business and affairs of Employer, generally, or of
any subsidiary or affiliate of Employer, however, that the foregoing shall
not apply to information which is not unique to Employer, or which is
generally known to the industry or the public other than as a result of
Employee’s breach of this Agreement. Employee agrees to return
to Employer all memoranda, books, papers, plans, information, letters and
other data, and all copies thereof or therefrom (including electronic
media containing such information) in any way relating to the business of
Employer and its affiliates, except that Employee may retain personal
notes, notebooks and diaries that do not contain confidential information
of the type described in the preceding sentence. Employee further agrees
that Employee will not retain or use for Employee’s account at any time
any trade names, trademark or other proprietary business designation used
or owned in connection with the business of Employer or its
affiliates.
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2.11.
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Non-Solicitation. Employee
hereby further agrees that, for a period of two years after the Separation
Date, Employee shall not, directly or indirectly, as an owner, officer,
director, employee or agent, do any of the following: (i) reveal the name
of, contract with, accept employment with, solicit, persuade, interfere
with or endeavor to entice away from Employer or any of its affiliates or
subsidiaries, any of their respective clients, agents, representatives or
employees; or (ii) employ or offer to employ any person who, at any time
up to the effective date of such termination, was an employee, agent or
representative employed or retained by Employer or any of its affiliates
within a period of one (1) year after such person is no longer employed or
retained by Employer or any of its affiliates. In addition to,
and not in limitation of the other provisions hereof or of any other
Agreement between Employee and Employer, Employee shall not at any time in
any manner interfere with, disturb, disrupt, decrease or otherwise
jeopardize the business of Employer or its affiliates or do or permit to
be done anything which may tend to take away or diminish the trade,
business or good will of Employer or its affiliates or give to any person
the benefit or advantage of Employer's or its affiliates methods of
operation, advertising, publicity, training, clients or prospective
clients, or any other information relating or useful to the business of
Employer or its affiliates.
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2.12.
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Employee
hereby certifies that Employee has returned to Employer, all of Employer’s
property, including computer and office equipment, office keys, phone
card, security access card, credit card, parking pass, supplies, customer
and work files and other related
materials.
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2.13.
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Employee
agrees not to disclose the contents of this Agreement to anyone except
Employee’s attorneys, if any, provided they agree to this confidentiality
clause.
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2.14.
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Employee
agrees that Employee will be responsible for Employee’s own attorneys’
fees incurred in connection with the negotiation, preparation and
execution of this Agreement and that Employee unconditionally releases and
discharges Employer from any claim for such attorneys’ fees incurred by
Employee or on Employee’s behalf.
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2.15.
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Employee
agrees and acknowledges that this Agreement does not constitute an
admission by Employer of any violation of any federal, state, or local
statue or regulation, or any violation of any of Employee’s rights or of
any duty owed by Employer to
Employee.
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2.16.
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Employee
confirms and agrees that Employee is responsible for any income or other
taxes owed by Employee or required by all applicable laws, statutes,
regulations or orders of the U.S. Internal Revenue Service (the “IRS”) to
be withheld or deducted related to the Stock Based Compensation and the
50,965 shares of China Direct, Inc.’s common stock previously issued to
Employee (the “Withholding Taxes”). In this regard, Employee shall, upon
receipt of the Stock Based Compensation and expiration of the Revocation
Period, pay Employer the sum of $4,781.28 reflecting Employee’s portion of
Social Security and Medicare withholding taxes which Employer will remit
to the IRS on behalf of Employee. In the event that the IRS
challenges the amount or Employer’s failure to withhold and pay the
Withholding Taxes and the IRS determines by way of assessment,
reassessment or otherwise that the Withholding Taxes are not correct, then
(ii) Employee shall pay directly to the IRS any withholding taxes owing by
Employee in excess of the Withholding Taxes paid by Employee to Employer,
and (iii) Employee shall indemnify Employer for any withholding taxes due,
assessments, interest and penalties imposed by the IRS in respect of the
late payment of such withholding taxes by Employer on behalf of Employee
plus all legal and accounting fees incurred by Employer in connection
therewith provided that Employer shall provide Employee, in a timely
manner, with copies of all assessments, reassessments or other
communications by the IRS to Employer related
thereto.
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3.
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Representations
of Employee.
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3.1.
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Employee
hereby acknowledges that Employee is aware that the United States
securities laws prohibit any person who has material, nonpublic
information concerning Employer from purchasing or selling securities of
Employer or from communicating such information to any other person under
circumstances in which it is reasonably foreseeable that such person is
likely to purchase or sell such securities. Furthermore, Employee hereby
represents that Employee has not purchased or sold any securities of
Employer through the date hereof in violation of any state or federal
securities laws.
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4.
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Opportunity
to Review and Right of
Revocation.
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4.1.
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Employee
acknowledges that Employer advised Employee of Employee’s right to
consider the terms of this Agreement for 21 days after its delivery, and
Employee, after consulting counsel, hereby irrevocably waives that
right.
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4.2.
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Pursuant
to federal law, this Agreement is revocable by Employee for seven days
following Employee's execution of the Agreement ("Revocation
Period"). To be effective, such revocation must be in writing
signed by the Employee and must be delivered to the General Counsel of the
Company before 11:59 p.m., on the last day of the Revocation
Period. If an effective revocation is delivered in the
foregoing manner and timeframe, this Agreement shall be of no force or
effect and shall be null and void ab initio. Employee
understands that if Employee revokes this Agreement, Employee will lose
all benefits of this Agreement. The promises of Employer in this Agreement
will go into effect only if Employee has not revoked the Agreement within
the Revocation Period.
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5.
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Miscellaneous.
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5.1.
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Employee
agrees that Employee shall not make any disparaging, denigrating, critical
or untrue statements (public or private) about Employer, its management or
about any other employee of Employer, its products, customers, clients,
suppliers, business or prospects. It is agreed and understood
that any breach of this paragraph by Employee would be
material.
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5.2.
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Employer
agrees that it shall not make any disparaging, denigrating, critical or
untrue statements (public or private) about Employee. It is
agreed and understood that any breach of this paragraph by Employer would
be material.
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5.3.
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Employee
acknowledges and warrants that Employee has had the opportunity to and
been advised to obtain independent legal advice regarding Employee’s
duties, obligations and responsibilities under this Agreement and has been
advised of each and every legal right and obligation enumerated within or
arising out of this Agreement or has voluntarily declined same. . Employee
acknowledges his understanding that this Agreement and any Form 4 filed by
Employee related to the issuance of the Stock Based Compensation was
prepared at the request of Employer by Xxxxxxx Xxxxxxxxx, Esq., its
general counsel and that Xx. Xxxxxxxxx did not represent Employee in
conjunction with this Agreement or the preparation and filing of the Form
4.
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This
Agreement shall be interpreted and enforced in accordance with the laws of the
State of Florida. Each of the parties submits to the jurisdiction of any
provincial or federal court sitting in Broward County, Florida, in any action or
proceeding arising out of or relating to this Agreement and agrees that all
claims in respect of the action or proceeding may be heard and determined by any
such court. Each party also agrees not to bring any action or proceeding arising
out of or relating to this Agreement in any other court. Each of the parties
waives any defense of inconvenient forum to the maintenance of any action or
proceeding so brought and waives any bond, surety, or other security that might
be required of any other party with respect thereto.
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5.4.
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This
Agreement and the agreements referenced herein represent the sole and
entire agreement between the parties and supersedes any and all prior
agreements, negotiations, and discussions between the parties or their
respective counsel with respect to the subject matters covered in this
Agreement.
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5.5.
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Notwithstanding
the foregoing, the parties agree that the any and all prior offer letters
and agreements between the parties shall be terminated effective on the
date of this Agreement and none of provisions thereunder shall
survive.
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5.6.
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If
either party initiates proceedings for the other's breach of this
Agreement, the prevailing party shall recover attorneys' fees and costs,
including such fees and costs on any enforcement or appeal
proceedings.
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5.7.
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If
one or more paragraphs of this Agreement are ruled invalid or
unenforceable, such invalidity or unenforceability shall not affect any
other provision of the Agreement, which shall remain in full force and
effect.
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5.8.
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This
Agreement may be modified only by a writing signed by both
parties.
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5.9.
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Both
parties agree that, unless required by law or by a court of competent
jurisdiction, this Agreement shall remain confidential and will not be
used for any purpose other than enforcing its specific terms in any
proceeding between the parties. If this document must be filed in any
court proceeding, the person seeking to file it will do so only under
seal, unless expressly prohibited by the
court.
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5.10.
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This
Agreement may be executed in two counterparts, each of which shall
constitute an original, but all of which together shall constitute one and
the same document.
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5.11.
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The
term “Employer” refers to China Direct, Inc., a Florida corporation, any
or all current or former affiliated corporations, parent corporations,
partnerships, divisions, related companies and subsidiaries, and the
officers, directors, shareholders, employees, agents, attorneys,
successors and assigns of the
Employer.
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IN
WITNESS WHEREOF, Employee and Employer have agreed upon and signed this
Agreement as of the date set forth below.
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EMPLOYEE:
Sign
/s/ I. Xxxxxx
Xxxxxxxxxx
I.
Xxxxxx Xxxxxxxxxx
Date:
May 22, 2009
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EMPLOYER:
By:
/s/ Xxxxxxx
Xxxxxxxxx
Xxxxxxx
Xxxxxxxxx
Its:
Executive Vice President and General Counsel
Date:
May 22, 0000
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Xxx 00,
0000
Xxxxx
Direct, Inc.
China
Direct Investments, Inc.
CDI
China, Inc.
000
Xxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxx
Xxxxx, XX 00000
Gentlemen:
This
letter confirms that I hereby resign from all offices that I hold at China
Direct, Inc., China Direct Investments, Inc. and CDI China, Inc. (the
“Companies”) effective immediately. My resignation is not the result
of any disagreement with any of the Companies on any matter relating to their
operations, policies (including accounting or financial policies) or
practices.
Sincerely,
I. Xxxxxx Xxxxxxxxxx
