Exhibit 10.4


 


SEVERANCE AGREEMENT


 


This Severance Agreement (“Agreement”) is made and
entered into by and between Brandon La Verne (“Employee”) and AF Services, LLC,
a Delaware limited liability company   
(the “Company”).


 


RECITALS


 


A.            The Company is a services and support company for rapid
response direct marketers of computer hardware, software, peripheral and
electronics products.


 


B.            The Company has spent significant
time, effort, and money to acquire and develop certain goodwill and Proprietary
Information (as defined below) that it considers vital to its business and
goodwill, and which has become of great value to the Company.


C.            The Company’s Proprietary
Information has been and will necessarily be communicated to and acquired by
Employee in the course of his employment, and the Company desires to continue
the services of Employee, only if, in doing so, it can protect its Proprietary
Information and goodwill.


TERMS OF SEVERANCE


 


NOW, THEREFORE, in consideration of the benefits to be
derived from the mutual observance of the agreements and covenants hereinafter
contained, the parties agree as follows:


 


1.             Employment At Will.


1.1   At any time, the Company or Employee may
terminate Employee’s employment for any reason, with or without cause, and without
prior notice.  The Company will pay
Employee all compensation then due and owing.


1.2   If the Company terminates Employee’s
employment at any time during the twelve month period following a Change of
Control, without Cause, as each such term is defined below, upon execution and
delivery to the Company of a severance and release agreement that is reasonably
acceptable to the Company’s Board of Directors and that contains, among other
things, a general release provision (a “Severance and Release Agreement”), the
Company shall pay Employee an equivalent of six months of his then base salary.
Any severance payments under this paragraph will be paid in equal monthly
installments over a period of months equal to the number of months of base
salary to be paid.  After the Company has
satisfied its severance payment obligations under this paragraph, and except
for the benefits that have vested and accrued, all obligations of the Company
under this Agreement shall immediately cease upon termination of Employee’s employment
with the Company under this Agreement.


1.3   For purposes of this
Agreement, the term “Cause” shall mean: 
(i) a material breach of any material term set forth in this Agreement;
(ii) Employee’s failure to follow the reasonable instructions of the Company
after Employee has been unable or unwilling to cure such failure within seven
calendar days following receipt of notice of such failure; 


 


 





















 


(iii) misconduct on
Employee’s part that is materially injurious to the Company, monetarily or
otherwise, including misappropriation of trade secrets, fraud, or embezzlement;
(iv) Employee’s conviction for fraud or any other felony; or (v) if
Employee exhibits in regard to his employment unavailability for service (other
than due to protected disability or reasonable absences in conformity with
applicable family leave or other applicable laws), misconduct, dishonesty, or
habitual neglect.


1.4   For purposes of this Agreement, the term  “Change of Control” shall mean a change in
ownership or control of the Company effected through a merger, consolidation or
acquisition by any person or related group of persons (other than an
acquisition by the Company or by a Company-sponsored employee benefit plan or
by a person or persons that directly or indirectly controls, is controlled by,
or is under common control with, the Company) of beneficial ownership (within
the meaning of Rule 13d-3 of the Securities Exchange Act of 1934) of securities
possessing more than fifty percent of the total combined voting power of the
outstanding securities of the Company.


2.             Termination Obligations.


2.1   Resignation From All Offices And Directorships.  In the
event of any termination of Employee’s employment for any reason,
Employee shall be deemed to have resigned voluntarily from all offices,
directorships, and other positions held with the Company, or any of the Company’s
subsidiaries, to the extent he was serving in any such capacities at the time
of termination.


2.2   Cooperation With The Company.  Employee will cooperate with the Company in
the winding up or transferring to other employees any pending work or
projects.  Employee will also cooperate
with the Company in the defense of any action brought by any third party
against the Company that relates to Employee’s employment with the Company.


2.3   Return Of
Documents And Other Information. 
Employee agrees that all property, including, without limitation, all
equipment, tangible Proprietary Information, documents, books, records,
reports, notes, contracts, lists, computer disks (and other computer-generated
files and data), and copies thereof, created on any medium and furnished to,
obtained by, or prepared by Employee in the course of, or incident to her
employment, belongs to the Company and shall be returned promptly to the
Company upon termination and at any other time as demanded by the Company.
Employee will continue to honor all agreements with the Company and any of its
affiliates regarding their proprietary information, including any non-compete,
non-solicitation, confidentiality or use restriction agreements.


2.4   Termination
Of Benefits.  All benefits to which Employee is otherwise
entitled shall cease upon Employee’s termination, unless explicitly continued
either under this Agreement or under any specific policy or benefit plan of the
Company.


2.5   Injunctions.  Employee
acknowledges that the restrictions contained in this Agreement are reasonable
and necessary in view of the nature of the Company’s businesses, in order to
protect the legitimate interests of the Company, and that any violation thereof
would result in irreparable injury to the Company.  Therefore, Employee agrees that, in the event
of a breach or threatened breach by Employee of the provisions hereof, the
Company shall be entitled


 


 


2





















 


to
obtain from any court of competent jurisdiction, preliminary and permanent
injunctive relief restraining Employee from any violation of the foregoing.


3.             Arbitration.


3.1   The Company and Employee hereby agree that,
to the fullest extent permitted by law, any and all claims or controversies
between them (or between Employee and any present or former officer, director,
agent, or employee of the Company or any parent, subsidiary, or other entity
affiliated with the Company) that arise out of or relate to this Agreement or
Employee’s employment with the Company, shall be resolved by final and binding
arbitration.


3.2   Claims subject to arbitration shall include,
without limitation, contract claims, tort claims, claims relating to
compensation and stock options, as well as claims based on any federal, state,
or local law, statute, or regulation, including, but not limited to any claims
arising under Title VII of the Civil Rights Act of 1964, the Age Discrimination
in Employment Act, the Americans with Disabilities Act, and the California Fair
Employment and Housing Act.  However,
claims for unemployment benefits, workers’ compensation claims, and claims
under the National Labor Relations Act shall not be subject to arbitration.


3.3   Any arbitration proceeding shall be conducted
in accordance with the National Rules for the Resolution of Employment Disputes
of the American Arbitration Association (“the AAA Rules”).  The arbitrator shall apply the same
substantive law, with the same statutes of limitations and same remedies that
would apply if the claims were brought in a court of law.


3.4   Either the Company or Employee may bring an
action in court to compel arbitration under this Agreement and to enforce an
arbitration award.  Otherwise, neither party
shall initiate or prosecute any lawsuit of claim in any way related to any
arbitrable claim, including without limitation any claim as to the making,
existence, validity, or enforceability of the agreement to arbitrate.  Nothing in this Agreement, however, precludes
a party from filing an administrative charge before an agency that has
jurisdiction over an arbitrable claim. 
Moreover, nothing in this Agreement prohibits either party from seeking
provisional relief pursuant to Section 1281.8 of the California Code of Civil
Procedure.


3.5   All arbitration hearings under this Agreement
shall be conducted in Los Angeles, California, unless otherwise agreed by the
parties.  The arbitration provisions of
this Arbitration Agreement shall be governed by the Federal Arbitration
Act.   In all other respects, this
Arbitration Agreement, including available discovery (which the parties agree
shall be favorably considered by the arbitrator) shall be construed in
accordance with the laws of the State of California, without reference to
conflicts of law principles.


3.6   Each party shall initially pay its own costs
and attorney’s fees.  However the
arbitrator shall award a reimbursement of reasonable attorneys’ fees and costs
to the prevailing party and the arbitrator shall determine the party that is
the prevailing party should there be one. 
The Company agrees to pay the costs and fees of the arbitrator to the
extent required by law, which fees and costs are not recoverable even if the
Company is the prevailing party.


 


3





















 


3.7   The parties also understand and agree that
this Agreement constitutes a waiver of their right to a trial by jury of any
claims or controversies covered by this agreement.  The parties agree that none of those claims
or controversies shall be resolved by a jury trial.


4.             Severability.


4.1   Severability Of
Unenforceable Provisions.  The
provisions of this Agreement are severable. 
In the event that any one or more of the provisions contained in this
Agreement, or the application thereof in any circumstances is held invalid,
illegal, or unenforceable in any respect for any reason, the validity and
enforceability of any such provision in every other respect and of the
remaining provisions of this Agreement shall not be in any way impaired or
affected, it being intended that all of the rights and privileges contained in
this Agreement shall be enforceable to the fullest extent permitted by law.


4.2   Scope.  To the extent that any provision hereof is
deemed unenforceable by virtue of its scope, but could be enforceable by
reducing the scope, Employee and the Company agree that same shall be enforced
to the fullest extent permissible under the laws and public policies applied in
the jurisdiction in which enforcement is sought, and that the Company shall
have the right, in its sole discretion, to modify such invalid or unenforceable
provision to the extent required to be valid and enforceable.


5.             Successors.


                This Agreement and
the rights and obligations of the parties hereto shall be binding upon and
inure to the benefit of any successor or successors of the Company by way of
reorganization, merger, acquisition or consolidation, and any assignee of all
or substantially all of the Company’s business and properties.


6.             Amendments; Waivers.


                This Agreement may not be orally modified or
amended.  It may only be modified or
amended by an instrument in writing signed by Employee and by a duly authorized
representative of the Company, other than Employee.  No failure to exercise and no delay in
exercising any right, remedy, or power under this Agreement shall operate as a
waiver thereof or as a waiver of any other right, remedy, or power, nor shall
any single or partial exercise of any right, remedy, or power hereunder preclude
any other or further exercise of any other right, remedy, or other power
provided herein or by law or in equity.


7.             Notices.


                All notices, requests, demands, and other
communications hereunder shall be in writing, and shall be delivered in person,
by facsimile, or by certified or registered mail with return receipt
requested.  Each such notice, request,
demand, or other communication shall be effective:  (a) if delivered by hand, when delivered at
the address specified in this Section; (b) if given by facsimile, when such
facsimile is transmitted to the telefacsimile number specified in 

this Section and confirmation is received; or (c) if given by certified or
registered mail, three days after the mailing thereof.  Notices shall be delivered as follows:


 


4





















 


	
  If to the Company:

  
	
   

  
	
  AF
  Services

  
	
  2555
  W. 190th Street

  
	
  Torrance,
  CA 90504

  
	
   

  
	
  If
  to the Employee:

  
	
   

  
	
  Brandon
  La Verne

  
	
  2555
  W. 190th Street

  
	
  Torrance,
  CA 90504

  



 


 


 


Any party may change its address by notice giving notice to the other
party of a new address in accordance with the foregoing provisions.


8.             Assignment.


                No benefit
hereunder shall be subject to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance or charge, and any attempt to do so shall be
void.  The Company shall be permitted to
assign this Agreement to any affiliate or any successor, subject to the
provisions hereof Agreement.


9.             Integration.


 


                This
Agreement is intended to be the final, complete, and exclusive statement of the
terms of Employee’s employment by the Company. 
This Agreement supersedes all other prior and contemporaneous agreements
and statements, whether written or oral, express or implied, pertaining in any
manner to the subject matter of this Agreement, and it may not be contradicted
by evidence of any prior or contemporaneous statements or agreements.  To the extent that the practices, policies,
or procedures of the Company, now or in the future, apply to Employee and are
inconsistent with the terms of this Agreement or the offer letter, the
provisions of this Agreement shall control. 
To the extent that such practices, policies, and procedures are not
contradicted by the terms of this Agreement, they shall be deemed to further
and enhance the terms and conditions of Employee’s employment.


 


10.           Interpretation.


                The language in
all parts of this Agreement shall be in all cases construed simply according to
its fair meaning and not strictly for or against any party.  Whenever the context requires, all words used
in the singular will be construed to have been used in the plural, and vice
versa.  The descriptive headings of the
sections and subsections of this Agreement are inserted for convenience only
and shall not control, limit, or affect the interpretation or construction of
any of the provisions herein.


11.           Governing
Law.


                This Agreement has
been negotiated and executed in the State of California and


 


5





















 


shall in all respects be
governed by and interpreted in accordance with the laws of the State of
California without giving effect to principles of conflict of laws.


                EMPLOYEE ACKNOWLEDGES THAT HE
HAS READ THIS AGREEMENT AND UNDERSTANDS ITS CONTENTS.  EMPLOYEE FURTHER ACKNOWLEDGES THAT THE
COMPANY HAS ADVISED HIM OF HIS RIGHT TO CONSULT WITH LEGAL COUNSEL OF HIS OWN
CHOICE CONCERNING THIS AGREEMENT.  BY
SIGNING THIS AGREEMENT, EMPLOYEE AND THE COMPANY AGREE TO BE BOUND BY ALL OF
THE TERMS AND CONDITIONS OF THIS AGREEMENT.


 


 


 


 


The parties have executed
this Agreement effective as of January 1, 2006.


 


 


	
   

  	
  AF SERVICES, LLC

  
	
   

  	
   

  
	
   

  	
  /s/ Simon Abuyounes

  
	
   

  	
  Name: Simon Abuyounes

  
	
   

  	
  Title: Manager

  
	
   

  	
   

  
	
   

  	
  /s/Brandon La Verne

  
	
   

  	
   Brandon La Verne

  



 


6