Exhibit 10.5
SEPARATION AGREEMENT
     THIS SEPARATION AGREEMENT (the “Agreement”) is made and entered into by and
between Eleanor Melton (“Employee”) and Proserpine, LLC (the “Company”)
effective as of the date executed by Employee below.
     WHEREAS, Employee’s employment with the Company will be or has been
concluded as of September 30, 2007 (the “Separation Date”);
WHEREAS, Employee is a Senior Vice President and its Chief Credit Officer; and
     WHEREAS, Employee and the Company desire to resolve any and all matters and
differences arising from Employee’s employment and/or separation on mutually
satisfactory terms as set forth herein;
     NOW, THEREFORE, for and in consideration of the covenants, promises, and
agreements set forth herein, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1.     Separation: Employee will be or has been relieved of all duties effective
as of the Separation Date. Employee agrees that Company, including any of its
parents, subsidiaries, or affiliates, have no obligation to rehire Employee, and
Employee waives any claim against the Company, including any of its parents,
subsidiaries, or affiliates, for failing to rehire her in the future.
2.     Separation Benefit: For and in consideration of the releases and other
obligations of Employee described in this Agreement, the Company will provide
Employee with the following special separation benefits:

      (a)   Employee will continue to receive her regular salary on the standard
Company paydays through December 31, 2007. Employee acknowledges and understands
that, if she fails to abide by the terms of this Agreement, the Company may
terminate her salary immediately;

      (b)   Employee will receive her health insurance on the same terms as an
active employee through December 31, 2007. Employee acknowledges and understands
that, if she fails to abide by the terms of this Agreement, the Company may
terminate her health insurance immediately;

      (c)   Employee understands and agrees that, except as set forth in
Paragraph 2(b), no Company benefits will be available to Employee or will accrue
in favor of Employee after September 30, 2007.

3.     If Employee revokes this Agreement within seven (7) days of executing
this Agreement pursuant to Paragraph 5 below, Employee shall return any special
separation payment previously paid to her within five (5) days of such
revocation.
CONFIDENTIAL

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Employee benefits not specifically addressed in this Agreement will be provided
in accordance with the terms of the applicable plan(s). Employee acknowledges
that the payment and benefits described in this Agreement constitute a special
separation benefit which the Company is providing in its discretion due to
unique circumstances and that Employee is not otherwise entitled to receive this
entire separation benefit from the Company. Employee further agrees that there
are no outstanding or unpaid debts, money, wages, or benefits owed to Employee
by the Company or any of the Releasees as defined in Paragraph 4 below. Nothing
in this Agreement shall be deemed an admission by the Company of a violation of
any statute, law, or right, or of any wrongdoing or liability of any kind.
4.     Release: For and in consideration of the payment and benefits set forth
above and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, Employee hereby releases, acquits, and forever
discharges the Company and all of its parents, subsidiaries, partners, joint
venturers, affiliated entities, owners, shareholders, benefit plans,
fiduciaries, and plan sponsors, and each of their officers, directors,
employees, representatives, and agents, and all successors and assigns thereof
(the “Releasees”), from any and all claims, charges, complaints, demands,
liabilities, obligations, promises, agreements, controversies, damages, actions,
causes of action, suits, rights, entitlements, costs, losses, debts, and
expenses (including attorneys’ fees and legal expenses), of any nature
whatsoever, known or unknown, which Employee now has, had, or may hereafter
claim to have had against the Company, of any kind or nature whatsoever, arising
from any act, omission, transaction, occurrence, or event which has occurred or
is alleged to have occurred up to the date this Agreement is executed by
Employee. This release includes, but is not limited to, a knowing and voluntary
waiver of all claims relating in any way to Employee’s employment with the
Company or the conclusion of that employment, whether such claims are now known
or are later discovered. The claims knowingly and voluntarily waived by Employee
include, but are not limited to, claims under Title VII of the Civil Rights Act
of 1964, 42 U.S.C. § 1981, the Americans with Disabilities Act, the Family and
Medical Leave Act, the Age Discrimination in Employment Act, the Fair Labor
Standards Act or any other federal or state wage and hour law, the Employee
Retirement Income Security Act, breach of contract, infliction of emotional
distress, any other federal or state law pertaining to employment or employment
benefits, and any other claims of any kind based on any contract, tort,
ordinance, regulation, statute, or constitution based on any act, omission,
transaction, occurrence, or event which has occurred or is alleged to have
occurred up to the date this Agreement is executed by Employee; provided,
however, that nothing in this Agreement shall be interpreted to release any
claims which Employee may have for workers’ compensation benefits. In addition
to the other acknowledgments in this Agreement, Employee acknowledges that this
Agreement may be pled as a complete defense and shall constitute a full and
final bar to any claim for damages or other relief based on any matters released
herein. Employee does not waive any claims which arise from acts occurring after
the date that Employee signs this Agreement.
5.     ADEA Provisions: Also included among the claims knowingly and voluntarily
waived and released by Employee above are any claims under the Age
Discrimination
CONFIDENTIAL

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in Employment Act (“ADEA”). Employee acknowledges that the Company provided
Employee with a copy of the Agreement in advance of her execution of the
Agreement and advised her by means of this written Agreement: (a) to consult
with an attorney of Employee’s choosing prior to executing the Agreement;
(b) that Employee has a period of forty-five (45) days to review and consider
the Agreement before executing it; (c) that this Agreement will not become
effective or enforceable until the expiration of seven (7) days after the date
Employee executes it; and (d) that Employee may revoke it by providing written
notice personally delivered or deposited in the U.S. Mail, postage prepaid,
certified or registered mail, return receipt requested addressed as follows: Mr.
Christopher Zyda, Luminent Mortgage Capital, Inc., 101 California Street,
Suite 1350, San Francisco, CA 94111. Unless Employee provides written notice of
such revocation, the Agreement will become effective and irrevocable upon the
expiration of that seven (7) day period. Notwithstanding anything contained
herein to the contrary, Employee understands and agrees that, if Employee fails
to sign the Agreement on or before the expiration of forty-five (45) days of the
day Employee received it, or if Employee revokes the Agreement before the
expiration of seven (7) days after executing it, the Agreement shall not become
effective or enforceable and Employee will not be entitled to receive any
payments or benefits under this Agreement not otherwise payable absent this
Agreement. Pursuant to 29 C.F.R. § 1625.22(e)(4), Employee and Company agree
that any changes made to this proposed Agreement during the running of or after
the expiration of the forty-five (45) day period, whether material or
immaterial, do not restart the running of the forty-five (45) day period.
6.     Confidential Information: Employee recognizes the interest of the Company
in maintaining the confidential nature of its proprietary and other business
documents, records, and information, including but not limited to personnel
records and information, financial records and information, and lists of actual
or potential customers or suppliers (whether or not constituting a trade secret
under applicable law) which have been disclosed to Employee or of which Employee
became aware through employment with the Company and which has value to the
Company and is not generally known to its competitors (the “Confidential
Information”). Employee and Employer agree that Confidential Information does
not include any information Employee brought to the Company when she began her
employment with the Company. Employee covenants that, for a period of one
(1) year after the Separation Date, Employee shall not, directly or indirectly,
except as expressly authorized by the Company, use, give, sell, transfer,
transmit, or disclose any Confidential Information for any purpose. These
provisions are in addition to, and not in lieu of, the restrictions afforded
trade secrets as defined under applicable law. Nothing in this Agreement shall
authorize the disclosure of trade secrets at any time.
7.     Non-Disparagement: Employee covenants and agrees that Employee will not
make any negative or derogatory remarks, comments, representations, or
observations about the Company, its parent, or any Company employee or official.
Company covenants and agrees that it will not make any negative or derogatory
remarks, comments, representations, or observations about Employee.
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8.     Return to Company: Employee warrants, represents, covenants, and agrees
that, except as specifically provided herein, Employee has returned or will
return to the Company within five (5) business days after the execution of this
Agreement by Employee all Confidential Information and all other Company
documents, records, property, and information in any form, and all embodiments,
copies, or extracts thereof, which Employee has acquired or possessed during
Employee’s employment and that Employee has not made or retained and shall not
make or retain any embodiment, copy, or extract thereof. Employer agrees that
Employee may retain a copy of the “Underwriting Guidelines and Operating
Procedures” that she drafted. Employee will not alter or destroy any Company
documents, data or records in Employee’s possession or control, and Employee
will abide by document retention procedures that the Company has put into
effect.
9.     Cooperation and Non-Interference. Employee covenants and agrees that
Employee will cooperate reasonably and truthfully with the Company to the extent
that it so requests in connection with any legal or business dispute or issue
concerning which, during Employee’s employment with the Company, Employee was
involved or had knowledge. Employee agrees to be available as reasonably
requested by the Company or its counsel. The Company will agree to reimburse
Employee for reasonable travel and business expenses approved by the Company in
advance and incurred by Employee pursuant to this provision which are supported
by receipts and other documentation as necessary to verify such expenses.
Employee covenants and agrees not to make any intentional statement, oral or
written, or to perform any intentional act or omission for the purpose of
causing, or reasonably expected to cause, any material harm to the Company’s
business, business relationships, operations, goodwill, or reputation. Employer
covenants and agrees not to make any intentional statement, oral or written, or
to perform any intentional act or omission for the purpose of causing, or
reasonably expected to cause, any material harm to Employee, her business
relationships, or her reputation. This provision is in addition to, and not in
lieu of, the substantive protections under applicable law relating to
defamation, libel, slander, interference with contractual or business
relationships, or other statutory, contractual, or tort theories.
10.     Indemnification: Nothing in this Agreement is intended to modify in any
fashion Employee’s indemnification rights as set forth in Article VII of the
Company’s Third Amended and Restated By-Laws and Article VIII of the Company’s
Articles of Incorporation, which are incorporated herein by reference.
11.     Vacation Pay: Company agrees to pay Employee accrued, but unused
vacation pay in the amount of $19,188.19, less applicable withholdings, in her
September 30, 2007 paycheck.
12.     Entire Agreement: This Agreement constitutes the final and entire
agreement between the parties on the subject matter herein, and no other
representation, promise, or agreement has been made to cause Employee to sign
this Agreement. Any other agreements regarding the terms of Employee’s
separation from the Company or the subject matter herein shall be merged into
and superseded by this Agreement except as

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CONFIDENTIAL
expressly set forth herein. Notwithstanding the foregoing, the terms and
covenants of prior agreements between the Company and Employee relating to
confidentiality, non-solicitation, and alternative dispute resolution that are
contained in the Employee Confidentiality Agreement, the Acknowledgement and
Agreement to be Bound by the Alternative Dispute Resolution Program, or any
other agreement which contains similar terms and covenants that survive the
separation of Employee’s employment, shall remain in full force and effect. This
Agreement shall be deemed to be made in, and in all respects shall be
interpreted, construed, and governed by and in accordance with the laws of the
State of Pennsylvania, notwithstanding any choice of law provisions otherwise
requiring application of other laws. It shall be interpreted according to the
fair meaning of the terms herein and not strictly in favor of, or against,
either party.
13.     Severability: The terms, conditions, covenants, restrictions, and other
provisions contained in this Agreement are separate, severable, and divisible.
If any term, provision, covenant, restriction, or condition of this Agreement or
part thereof, or the application thereof to any person, place, or circumstance,
shall be held to be invalid, unenforceable, or void, the remainder of this
Agreement and such term, provision, covenant, or condition shall remain in full
force and effect to the greatest extent practicable and permissible by law, and
any such invalid, unenforceable, or void term, provision, covenant, or condition
shall be deemed, without further action on the part of the parties hereto,
modified, amended, limited, or deleted to the extent necessary to render the
same and the remainder of this Agreement valid, enforceable, and lawful.
14.     Acknowledgments: The parties acknowledge that the Company is not
undertaking to advise Employee with respect to any tax or other consequences of
this Agreement and that Employee is solely responsible for determining those
consequences. Employee has read this Agreement and understands its terms.
Employee has been provided with a full and fair opportunity to consult with an
attorney of her choosing and to obtain any and all advice deemed appropriate
with respect to this Agreement. Further, the parties acknowledge that, while
Employee agrees to maintain the confidentiality of this Agreement and waives
claims for remedies, nothing in this Agreement shall limit the ability of
Employee or the Company (or any of its officers, directors, employees,
representatives, agents, or assigns) to confer with legal counsel, to testify
truthfully under subpoena or court order, or to initiate, provide truthful
information for, or cooperate with, an investigation by a municipal, state, or
federal agency for enforcement of laws. This Agreement has been entered into
with the understanding that there are no unresolved claims of any nature which
Employee has against the Company. Employee acknowledges and represents that,
except with regard to the special separation benefits described in Paragraph 2
of this Agreement, all compensation and benefits due Employee by the Company,
whether by contract or by law, have been paid in full, and Employee has been
provided all rights and benefits to which Employee is entitled without
interference by the Company, including but not limited to vacation, sick time,
paid or unpaid time off, Family and Medical Leave, accommodation for any
disability, or any contractual rights or privileges, and that Employee has no
outstanding claims for any compensation and benefits. Employee further agrees
that the acknowledgments and representations set forth in this paragraph have
been relied upon by the Company and constitute consideration for the Company’s
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execution of this Agreement. In light of the foregoing, the parties are
satisfied with the terms of this Agreement and agree that its terms are binding
upon them.
THE UNDERSIGNED HAVE CAREFULLY READ THIS AGREEMENT. THEY ACKNOWLEDGE THAT THEY
HAVE HAD ACCESS TO LEGAL COUNSEL OF THEIR OWN CHOOSING AND HAVE OBTAINED ALL
LEGAL ADVICE THEY DEEM NECESSARY TO FULLY UNDERSTAND THE TERMS AND CONDITIONS OF
THIS AGREEMENT. EACH PARTY AGREES TO BE FULLY BOUND BY THIS AGREEMENT. THE
PARTIES ARE ENTERING INTO THIS AGREEMENT FREELY AND VOLUNTARILY WITHOUT DURESS
OR COERCION.
THIS AGREEMENT IS NOT VALID IF EXECUTED BY EMPLOYEE BEFORE SEPTEMBER 28, 2007.
EMPLOYEE’S DEADLINE TO SIGN AND RETURN THIS AGREEMENT IS OCTOBER 30, 2007.
ACCEPTED AND AGREED:
 
 

     
/s/ Eleanor Melton
  September 28, 2007
 
   
Eleanor Melton
  Date

          AND
PROSERPINE, LLC

         
By:
  /s/ S. Trezevant Moore, Jr.   September 28, 2007
 
       
 
  President   Date

CONFIDENTIAL

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