**Exhibit 10.4**

 

SEVERANCE AGREEMENT

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This Severance Agreement (“Agreement”) is made andentered 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 rapidresponse direct marketers of computer hardware, software, peripheral andelectronics products.

 

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

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

TERMS OF SEVERANCE

 

NOW, THEREFORE, in consideration of the benefits to bederived from the mutual observance of the agreements and covenants hereinaftercontained, the parties agree as follows:

 

# 1.             Employment At Will.

## 1.1   At any time, the Company or Employee mayterminate Employee’s employment for any reason, with or without cause, and withoutprior notice.  The Company will payEmployee all compensation then due and owing.

## 1.2   If the Company terminates Employee’semployment at any time during the twelve month period following a Change ofControl, without Cause, as each such term is defined below, upon execution anddelivery to the Company of a severance and release agreement that is reasonablyacceptable to the Company’s Board of Directors and that contains, among otherthings, a general release provision (a “Severance and Release Agreement”), theCompany shall pay Employee an equivalent of six months of his then base salary.Any severance payments under this paragraph will be paid in equal monthlyinstallments over a period of months equal to the number of months of basesalary to be paid.  After the Company hassatisfied its severance payment obligations under this paragraph, and exceptfor the benefits that have vested and accrued, all obligations of the Companyunder this Agreement shall immediately cease upon termination of Employee’s employmentwith the Company under this Agreement.

## 1.3   For purposes of thisAgreement, 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 Companyafter Employee has been unable or unwilling to cure such failure within sevencalendar days following receipt of notice of such failure; 

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

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

# 2.             Termination Obligations.

## 2.1   Resignation From All Offices And Directorships.  In theevent 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’ssubsidiaries, to the extent he was serving in any such capacities at the timeof termination.

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

## 2.3   Return OfDocuments And Other Information. Employee agrees that all property, including, without limitation, allequipment, tangible Proprietary Information, documents, books, records,reports, notes, contracts, lists, computer disks (and other computer-generatedfiles 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 heremployment, belongs to the Company and shall be returned promptly to theCompany 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 itsaffiliates regarding their proprietary information, including any non-compete,non-solicitation, confidentiality or use restriction agreements.

## 2.4   TerminationOf Benefits.  All benefits to which Employee is otherwiseentitled shall cease upon Employee’s termination, unless explicitly continuedeither under this Agreement or under any specific policy or benefit plan of theCompany.

## 2.5   Injunctions.  Employeeacknowledges that the restrictions contained in this Agreement are reasonableand necessary in view of the nature of the Company’s businesses, in order toprotect the legitimate interests of the Company, and that any violation thereofwould result in irreparable injury to the Company.  Therefore, Employee agrees that, in the eventof a breach or threatened breach by Employee of the provisions hereof, theCompany shall be entitled

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## toobtain from any court of competent jurisdiction, preliminary and permanentinjunctive 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 controversiesbetween them (or between Employee and any present or former officer, director,agent, or employee of the Company or any parent, subsidiary, or other entityaffiliated with the Company) that arise out of or relate to this Agreement orEmployee’s employment with the Company, shall be resolved by final and bindingarbitration.

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

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

## 3.4   Either the Company or Employee may bring anaction in court to compel arbitration under this Agreement and to enforce anarbitration award.  Otherwise, neither partyshall initiate or prosecute any lawsuit of claim in any way related to anyarbitrable claim, including without limitation any claim as to the making,existence, validity, or enforceability of the agreement to arbitrate.  Nothing in this Agreement, however, precludesa party from filing an administrative charge before an agency that hasjurisdiction over an arbitrable claim. Moreover, nothing in this Agreement prohibits either party from seekingprovisional relief pursuant to Section 1281.8 of the California Code of CivilProcedure.

## 3.5   All arbitration hearings under this Agreementshall be conducted in Los Angeles, California, unless otherwise agreed by theparties.  The arbitration provisions ofthis Arbitration Agreement shall be governed by the Federal ArbitrationAct.   In all other respects, thisArbitration Agreement, including available discovery (which the parties agreeshall be favorably considered by the arbitrator) shall be construed inaccordance with the laws of the State of California, without reference toconflicts of law principles.

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

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

# 4.             Severability.

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

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

# 5.             Successors.

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

# 6.             Amendments; Waivers.

#                 This Agreement may not be orally modified oramended.  It may only be modified oramended by an instrument in writing signed by Employee and by a duly authorizedrepresentative of the Company, other than Employee.  No failure to exercise and no delay inexercising any right, remedy, or power under this Agreement shall operate as awaiver thereof or as a waiver of any other right, remedy, or power, nor shallany single or partial exercise of any right, remedy, or power hereunder precludeany other or further exercise of any other right, remedy, or other powerprovided herein or by law or in equity.

# 7.             Notices.

#                 All notices, requests, demands, and othercommunications hereunder shall be in writing, and shall be delivered in person,by facsimile, or by certified or registered mail with return receiptrequested.  Each such notice, request,demand, or other communication shall be effective:  (a) if delivered by hand, when delivered atthe address specified in this Section; (b) if given by facsimile, when suchfacsimile is transmitted to the telefacsimile number specified in this Section and confirmation is received; or (c) if given by certified orregistered mail, three days after the mailing thereof.  Notices shall be delivered as follows:

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| 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 otherparty of a new address in accordance with the foregoing provisions.

# 8.             Assignment.

#                 No benefithereunder shall be subject to anticipation, alienation, sale, transfer,assignment, pledge, encumbrance or charge, and any attempt to do so shall bevoid.  The Company shall be permitted toassign this Agreement to any affiliate or any successor, subject to theprovisions hereof Agreement.

# 9.             Integration.

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#                 ThisAgreement is intended to be the final, complete, and exclusive statement of theterms of Employee’s employment by the Company. This Agreement supersedes all other prior and contemporaneous agreementsand statements, whether written or oral, express or implied, pertaining in anymanner to the subject matter of this Agreement, and it may not be contradictedby 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 areinconsistent with the terms of this Agreement or the offer letter, theprovisions of this Agreement shall control. To the extent that such practices, policies, and procedures are notcontradicted by the terms of this Agreement, they shall be deemed to furtherand enhance the terms and conditions of Employee’s employment.

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# 10.           Interpretation.

#                 The language inall parts of this Agreement shall be in all cases construed simply according toits fair meaning and not strictly for or against any party.  Whenever the context requires, all words usedin the singular will be construed to have been used in the plural, and viceversa.  The descriptive headings of thesections and subsections of this Agreement are inserted for convenience onlyand shall not control, limit, or affect the interpretation or construction ofany of the provisions herein.

# 11.           GoverningLaw.

#                 This Agreement hasbeen negotiated and executed in the State of California and

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# shall in all respects begoverned by and interpreted in accordance with the laws of the State ofCalifornia without giving effect to principles of conflict of laws.

                EMPLOYEE ACKNOWLEDGES THAT HEHAS READ THIS AGREEMENT AND UNDERSTANDS ITS CONTENTS.  EMPLOYEE FURTHER ACKNOWLEDGES THAT THECOMPANY HAS ADVISED HIM OF HIS RIGHT TO CONSULT WITH LEGAL COUNSEL OF HIS OWNCHOICE CONCERNING THIS AGREEMENT.  BYSIGNING THIS AGREEMENT, EMPLOYEE AND THE COMPANY AGREE TO BE BOUND BY ALL OFTHE TERMS AND CONDITIONS OF THIS AGREEMENT.

 

 

 

 

The parties have executedthis 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 |

 

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