EXHIBIT 10.17
SEVERANCE AGREEMENT
This SEVERANCE AGREEMENT ("Agreement") is made and entered into by and
between U.S. MedSys Corp. ("Company") and Xxxxx X. Xxxxx ("Executive").
WHEREAS, Company and Executive entered into an Employment Agreement
dated December 6, 2004 (the "Employment Agreement");
WHEREAS, Company and Executive desire to terminate both the employment
relationship and the Employment Agreement, as well as Executive's seat on the
board of directors of Company and its subsidiaries, upon mutually acceptable
terms and to settle any and all differences, claims and potential claims arising
out of (i) Executive's employment and termination of employment with Company,
(ii) termination of the Employment Agreement, and (iii) Executive's resignation
of his seats on the board of directors of Company and its subsidiaries;
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. Executive 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) Chairman of Company; (ii) a director of Company; (iii)
a director and officer of any of Company's subsidiaries.
2. Consideration Provided to Executive. On the Employment Resignation
Date, Company shall pay to Executive, in a lump sum without deduction or offset,
other than federal, state and local income tax withholdings, accrued back-pay of
$24,375.00 plus three months of severance pay of $48,750.00. The gross amount
due of $73,125.00 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. In
addition, on the Employment Resignation Date, Executive shall be paid $5,550.00
as reimbursement for three months of health insurance expenses.
3. Executive'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, Executive, 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 Executive ever had, now has,
or hereafter may have against the Released Parties, in any way arising out of or
related to Executive's Claims for compensation or remuneration through the
Employment Resignation Date.
In expansion of the foregoing release, Executive 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")
Page 1 of 5
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, Executive 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
Executive 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
Executive, 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 Executive'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. Executive 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. Executive 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 Executive while employed by and/or
rendering services to or for Company and/or its predecessors, subsidiaries or
affiliates. Executive acknowledges that all such Company Records are the
property of Company. In addition, Executive shall promptly return in good
condition any and all physical assets in his possession that belong to Company.
As of Executive's Employment Resignation Date, Company will make arrangements to
remove, terminate or transfer from Executive any and all business communication
lines including network access, cellular phone, fax line and other business
numbers belonging to or leased by Company.
Page 2 of 5
8. Confidential Information. Executive 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"). Executive 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. Executive 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 Executive; (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, Executive shall provide Company with notice of any such required
disclosure once Executive 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
Executive to publicly or privately sell any shares of common stock of Company
owned by Executive. Upon presentment of a request by Executive 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 Executive),
within two business days, of any authorization or legal opinion requested by the
transfer agent.
11. Indemnification. The indemnification(s) of Executive from Company
that Executive enjoyed by and through his Employment Agreement, 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
the Employment Agreement or Executive's employment with Company under this
Agreement and the same shall survive the execution and delivery of this
Agreement, the termination of the Employment Agreement, and termination of
Executive's employment with Company under this Agreement.
Further, Company shall protect, defend, indemnify and hold Executive
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 Executive) of every kind and
character, resulting from or relating to or arising out of Executive's
Page 3 of 5
services provided to Company through the Employment Resignation Date, alleged by
any third-party or any state or federal regulatory agency.
12. Future cooperation. Executive 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 Executive is necessary; provided, however,
that Company provides reasonable advance written notice to Executive 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 Executive
in connection with such cooperation shall be advanced to Executive by Company;
and provided further that Executive shall not be required to provide any such
assistance if Executive's counsel reasonably believes such assistance would
conflict with Executive's ability to use one or more legal or equitable defenses
available to him but not to Company, unless Company provides adequate indemnity
to Executive 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 Executive 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 Executive 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.
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.
Page 4 of 5
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.
EXECUTIVE:
/s/ Xxxxx X. Xxxxx 05/06/05
------------------------------------------ --------------------------
Xxxxx X. Xxxxx Date
COMPANY:
U.S. MEDSYS CORP.
/s/ Xxxxxx Xxxxxxxx
By:
--------------------------------------
Its: Vice President 05/06/06
------------------------------------- ---------------------------
Date
Page 5 of 5
