Document:

Exhibit 10.1 MINERALS LEASE AND AGREEMENT

Exhibit 10.1

MINERALS LEASE AND AGREEMENT

THIS MINERALS LEASE AND AGREEMENT (“Agreement”) is dated and effective this 8th day of January, 2012 (“Effective Date”), by and between MinQuest, Inc., a Nevada S Corporation (“Lessor”) located at 4235 Christy Way, Reno, Nevada 89519, and North Springs Resources Corp. (“Lessee”), a Nevada Corporation located at 200 S Virginia, 8th Floor, Reno, Nevada 89501. 

RECITALS

A.

Lessor owns certain unpatented mining claims that comprise that certain real property collectively known as Imperial and described more specifically in Schedule A attached hereto (the “Property”).  

B.

Lessor desires to lease to Lessee, and Lessee desires to lease from Lessor, the right to conduct mineral exploration activities on and about the Property, together with the subsequent right to explore and mine for minerals on the Property.

THEREFORE, for good and valuable consideration, the receipt of which is hereby acknowledged, Lessor and Lessee agree as follows:

AGREEMENT

1.

Lease Grant.

(a)

Lessor leases exclusively to Lessee the right to prospect, explore and mine for Minerals, including the right to develop, mine, process, mill, prepare for market, store, market, sell, and dispose of Minerals, any easement rights across the Property, and the right to erect, construct, maintain or operate buildings, structures, waste storage, ore impoundments or facilities on or in on and beneath the Property, and to use, occupy, excavate and disturb so much of the surface and subsurface of the Property as is reasonably necessary and convenient in exploring for and mining such Minerals (the "Lease").  For purposes of this Agreement, “Minerals” shall mean any and all metals, materials, minerals and mineral rights of whatever kind and nature, which are included in the Property.  

(b)

The Lease shall be subject to a 3% NSR royalty (which is more specifically defined on Schedule "B" hereto) which includes all Mineral production from the Property and any benefit derived from the sale of or beneficial use of any material from the Property.

2.

Term.

The term of this Agreement shall commence on the effective date set forth above and shall continue for a term of twenty (20) years (the “Term”) with the right to renew unless sooner terminated, forfeited or surrendered as provided in Section 9 below.  

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..

Lease.

The Lessor hereby grants to the Lessee the sole and exclusive right to lease the Property under the terms as follows:

(a)

The Lessee shall pay to Lessor cash in USD as set forth in the following table. Further, Lessee shall reimburse Lessor all holding costs of mining claims for the assessment years during the Term of the this Agreement (Refer to Schedule C attached);

		
	Payment Due Upon: 

	Amount Due

	Upon Execution 

	$20,000

	First Year Anniversary from the date of execution 

	$20,000

	Second Year Anniversary from the date of execution

	$20,000

	Third Year Anniversary from the date of execution

	$20,000

	Fourth Year Anniversary from the date of execution

	$20,000

	Fifth Year Anniversary from the date of execution

	$20,000

	Sixth Year Anniversary from the date of execution and thereafter increasing based on the CPI each year

	$20,000

(b) 

The Lessee shall provide for work commitment funds as follows: 

		
	Payment Due Upon: 

	Amount Due

	First Year Work Commitment 

	$250,000

	Second Year Work Commitment 

	$300,000

	Third Year Work Commitment 

	$350,000

	Fourth Year Work Commitment 

	$400,000

	Fifth Year Work Commitment 

	$450,000

	Sixth Year Work Commitment 

	$500,000

	Seventh Year Work Commitment 

	$750,000

(c)

The foregoing payments to Lessor shall be considered by the parties hereto as rental payments and will not apply toward the NSR royalty due pursuant to this Agreement. 

4.

Representations and Warranties.

(a)

Lessor represents and warrants that it has not encumbered, mortgaged or conveyed its interest in the Property, including but not limited to conveying any royalty interest therein; and it has no knowledge of any pending litigation or other claims challenging its rights and title to the Property.  

(b)

Lessee represents and warrants to Lessor that it is in good standing under the laws of the jurisdiction in which it is incorporated, and that it has all the requisite power, right and authority to enter into this Agreement, to perform its obligations under this Agreement, and to commit to this Agreement.  The execution and delivery of this Agreement and the consummation of the obligations, indemnities and payments provided herein have been duly and validly authorized by all necessary corporate or company action on the part of each party.

5.

Area of Interest.  For purposes of this Agreement, the Area of Interest is defined as one mile from the outside of the current property boundary as defined in Schedule A.  

6.

Construction and Mining Activities.  Subject to the terms of this Section 6, if  Lessee determines that it desires to commence mine construction activities for the production of Minerals from any part of the Property, building of access roads to other portions of the Property or adjacent properties, storage of waste materials, tailings or ore products upon the Property or otherwise cause devaluation to the Property, Lessee shall use industry standard industry practices to ensure that any area contemplated for construction of processing facilities or storage of waste upon the Property has been substantially tested to determine the lack of ore or sub-ore grade material, and will be required to secure all permits, obtain insurance and provide adequate bond with appropriate government agencies to cover any and all reclamation costs before commencement of any of the aforementioned construction activities.  

7.

Property Maintenance.  

(a)  

Subject to the additional requirements under Section 11 below, for so long as this Agreement is in effect, Lessee shall make such payments as are necessary to keep the Lessor’s Property in good standing, including, but not limited to payment of any government filings, fees or taxes relating to Lessee’s operations on the Property, and satisfying any federal and state filing and bonding requirements for maintaining the Property in good standing for at least one year after the termination of this Agreement.

 (b)  

Upon making any payment or filing to maintain the Property, Lessee shall promptly deliver to Lessor a copy of the documents that were filed and written evidence of any payment that was made.  Lessee shall satisfy all county, state and federal requirements to maintain the Lessor Property in good standing and deliver to Lessor written documentation of such satisfaction at least 30 days prior to the legal deadline (whether required by statute, regulation, contract or otherwise) for satisfying such requirement.  If Lessor has not received the documentation required under this Section 9(c) within the prescribed time, Lessor may, but has no obligation to, satisfy such requirement(s), and Lessee shall promptly reimburse Lessor for the amount of any payment made by Lessor, and any related costs, plus twenty (20%) of the amount of those payments and costs.  Lessor’s rights under this Section 9(c) shall not affect Lessor’s right to any other remedy for Lessee’s failure to maintain the Lessor Property in accordance with this Agreement.

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8.

Reporting.  Lessee shall provide to Lessor annual reports of all activities and operations conducted on or in connection within the Lessor Property Area of Interest pursuant to this Agreement, together with copies of all factual data generated as a result of those activities or operations.  Those reports shall be provided to Lessor by the 1st of December of each calendar year this Agreement is in effect.  Each annual report shall include details of:  (i) the preceding year’s activities, operations and expenditures with respect to the Lessor Property Area of Interest; (ii) exploration and ore reserve data for the previous year; and (iii) a summary of anticipated activities for the upcoming year.  The annual report required to be delivered by December 1 of each year shall be accompanied by digital factual data generated during the previous calendar year, to the extent the data exists in such format.  Reports due pursuant to this Section 8 shall be sent to:

MinQuest, Inc.,  

4235 Christy Way 

Reno, Nevada 89519

Lessor may change such address from time to time by written notice to Lessee.

9.

Termination.  

(a)

Subject to the terms of this Section 9, at any time after completion of twenty thousand dollars ($20,000.00) in Lease fees, and payment of fees for federal, state and county filing for any year in which the Property is held beyond June 1st, Lessee may terminate this Agreement upon providing Lessor 60 days advance written notice.  Upon termination, Lessee will have no further obligations, except for reclamation obligations and environmental responsibilities that accrued as determined by local, state and federal entities. 

(b)

If Lessee defaults on any of its obligations under this Agreement, including, but not limited to its obligations under Sections 3, 4, 7, 11 and 12, Lessor may give Lessee written notice of the default or defaults.  If Lessee has not begun to cure any such default, other than a default that may be satisfied by cash payment, within 30 days from the date of delivery of such notice and completely cured such default within a reasonable time thereafter, Lessor may terminate this Agreement by written notice to Lessee.  Such termination by Lessor shall not affect Lessor’s rights to seek any other available remedies.

(c)

Upon any termination of this Agreement, Lessee shall, within 30 days after the effective date of termination, (i) surrender the Property to Lessor free and clear of any encumbrances, and deliver to Lessor a written instrument or instruments, in a form appropriate for recording and acceptable to Lessor, further evidencing termination of this Agreement and reconveyance of the Property; (ii) satisfy all requirements to maintain the Property in good standing through 90 days after the effective date of termination, including, but not limited to payment of any taxes, and making any filings and payments necessary to maintain the Property that would become due during that period; and (iii) deliver to Lessor copies of all factual data including all available digital data obtained by Lessee in conducting activities or operations on the Property, not already provided to Lessor.  Upon any termination of this Agreement, Lessee shall promptly reclaim all disturbance caused by its activities on the Property in accordance with applicable statutory and regulatory requirements, unless Lessor agrees in writing to assume such reclamation obligations and relieve Lessee of the performance thereof.

10.

Transfer of Interests, Assignments.  Lessee and Lessor may assign or sell all or parts of their interest under this Agreement to any third party (the “Assignee”) without consent of either party (but upon notice) provided that the Assignee agrees to execute an acknowledgement to be bound by the terms hereof insofar as each party’s rights hereunder are concerned.

11.

Standard of Conduct; Environmental Compliance.

(a)

Lessee shall ensure that all activities conducted by, or on its behalf on the Property, is in compliance with the laws and regulations of the United States and any local governmental entity with jurisdiction over the Property or activities thereon, including, but not limited to any laws or regulations regarding environmental protection or reclamation of the Property. Lessee shall provide Lessor with satisfactory evidence of such compliance upon lessee’s receipt of such document.  All operations under this Agreement shall be conducted in a good and workmanlike manner in accordance with generally accepted mining practices.

(b)

Lessee shall provide to Lessor a copy of any permit application or other permitting documents relating to activities or operations on the Property after submission to the applicable government entity.  

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(c)

Should any unpermitted discharge, leakage, spillage, release, emission or pollution of any type occur upon, to or from the Property or overlying surface due to Lessee’s activities or possession, Lessee, at its sole expense, shall promptly clean and restore the Property and overlying surface to standards equal to or exceeding all standards adopted or required by any governmental body having jurisdiction over the affected property.

12.

Audit and Inspection.

(a)

Lessor shall be entitled to enter the Property for purposes of inspecting any of Lessee’s operations, facilities or structures at reasonable times, upon reasonable advance notice, provided that Lessor or its agents shall so enter at its own risk and shall indemnify and hold Lessee and its Affiliates harmless against and from any and all loss, cost, damage, liability and expense (including but not limited to reasonable attorneys fees and costs) by reason of injury to Lessor or its agents or representatives, or damage to or destruction of any property of Lessor or its agents or representatives while on the Property, or in such workings, facilities and structures, except to the extent that such injury, damage, or destruction is a result, in whole or in part, of the negligence of Lessee.  Lessor shall have the right during regular business hours to review and copy all of Lessee’s files and documents relating to activities on the Property.

(b)

If Lessor determines that activities or operations being conducted on the Property or overlying surface are in material non-compliance with applicable laws, regulations, ordinances or permits, Lessor may provide notice to Lessee, and Lessee shall immediately begin and promptly complete corrective action to bring such activities or operations into compliance.  If, after receiving such notice, Lessee does not promptly take corrective actions to Lessor’s reasonable satisfaction, Lessor may, but has no obligation to, take such actions as it deems necessary to bring Lessee’s operations into compliance, including, but not limited to taking over operational control of Lessee’s operations.  Lessee shall thereafter pay to Lessor 

one hundred fifty percent (150%) of 

Lessor

’s costs for 

an amount equal to the costs reasonably incurred by

Lessor

 in connection with

 such actions.  Lessor’s rights under this Section 12(b) shall not affect Lessor’s right to any other remedy for Lessee’s failure to comply with Section 12.  

13.

Property "As Is".  Lessee acknowledges that it has been given full access to the Property for its due diligence review.  Lessee acknowledges that the Property may have environmental and physical conditions related to prior mineral exploration or mining activities, including, but not limited to pits, adits, shafts and roads.  Prior to entering into this Agreement, Lessee has investigated the Property, including the environmental conditions on that Property and the overlying surface, to its satisfaction.  Lessee is acquiring the interests in the Property hereunder “as is” without warranty of any kind as to the condition, suitability or usability of the Property for any purpose, or the ability to obtain any necessary permits or authorizations to access or mine the Property.  The parties intend that this “as is” provision shall be effective specifically with respect to environmental conditions, and any and all common law or statutory claims with respect thereto.  Lessee assumes the risk of any environmental contamination, hazardous substances and other conditions on or related to the Property and overlying surface.  Lessor makes no representation or warranty as to the accuracy or completeness of any environmental, geological, financial, operating or other information it has provided relating to the Property, and Lessee agrees that Lessor shall have no liability for any damages relating to any inaccuracies or incompleteness of such information.

14.

Indemnities.  Lessee shall fully indemnify, defend, release and hold harmless Lessor, its Affiliates and successors, and their agents, and employees from and against all loss, costs, penalties, expense, damage and liability (including without limitation, loss due to injury or death, reasonable attorneys fees, expert fees and other expenses incurred in defending against litigation or administrative enforcement actions, either pending or threatened), arising out of or relating to any claim or cause of action relating in any way to conditions, operations or other activities, whether known or unknown, at, or in connection with, the Property (including, but not limited to, any environmental conditions) created, existing or occurring prior to the date of this Agreement or while this Agreement is in effect, or arising out of or resulting from activities conducted by or on behalf of Lessee, its Affiliates or Assigns, which arise in whole or in part under any federal, state or local law, now existing or hereafter enacted, adopted or amended, including, without limitation, any statutory or common law governing liability to third parties for personal injury or property damage.  This indemnity shall survive termination of this Agreement.

15.

Liens.  Lessee shall keep the Property free of all encumbrances, adverse claims and liens, including, but not limited to, any mortgages, deeds of trust or liens for labor or materials furnished to it in its operations hereunder.

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16.

General Provisions.

(a)

Notice.  All notices or other communications to either party shall be in writing and shall be sufficiently given if (i) delivered in person, (ii) sent by electronic communication, with confirmation sent by registered or certified mail, return receipt requested, (iii) sent by registered or certified mail, return receipt requested, or (iv) sent by overnight mail by a courier that maintains a delivery tracking system.  Subject to the following sentence, all notices shall be effective and shall be deemed delivered (i) if by personal delivery, on the date of delivery, (ii) if by electronic communication, on the date of receipt of the electronic communication, (iii) if by mail, on the date of delivery as shown on the actual receipt, and (iv) if by overnight courier, as documented by the courier’s tracking system.  If the date of such delivery or receipt is not a business day, the notice or other communication delivered or received shall be effective on the next business day (“business day” means a day, other than a Saturday, Sunday or statutory holiday observed by banks in the jurisdiction in which the intended recipient of a notice or other communication is situated.)  A party may change its address from time to time by notice to the other party as indicated above.  All notices to Lessor shall be addressed to:

MinQuest, Inc. 

4235 Christy Way 

Reno, Nevada 89519

All notices to Lessee shall be addressed to:

North Springs Resources Corp. 

200 S Virginia, 8th Floor

Reno, Nevada 89501

(b)

Inurement.  All covenants, conditions, indemnities, limitations and provisions contained in this Agreement apply to, and are binding upon, the parties to this Agreement, their heirs, representatives, successors and assigns.

(c)

Implied Covenants.  The only implied covenants in this Agreement are those of good faith and fair dealing.

(d)

Waiver.  No waiver of any provision of this Agreement, or waiver of any breach of this Agreement, shall be effective unless the waiver is in writing and is signed by the party against whom the waiver is claimed.  No waiver of any breach shall be deemed to be a waiver of any other subsequent breach.

(e)

Modification.  No modification, variation or amendment of this Agreement shall be effective unless it is in writing and signed by all parties to this Agreement.

(f)

Entire Agreement.  This Agreement sets forth the entire agreement of the parties with respect to the transactions contemplated herein and supercede any other agreement, representation, warranty or undertaking, written or oral, between Lessor and Lessee.

(g)

Memorandum.  A memorandum of this Agreement shall be recorded in the records of Esmeralda County, Nevada, promptly after execution of this Agreement.  

(h)

Force Majeure.  If a party is prevented from completing any obligation under this Agreement, other than an obligation that may be satisfied by the payment of money, by a force majeure (the “Affected Obligation”), the Affected Obligation shall be suspended and that party shall not be deemed in default or liable for damages or other remedies as a result thereof for so long as that party is prevented from complying with the Affected Obligation by the force majeure.  For purposes of this Agreement, “force majeure” shall mean any matter (whether foreseeable or unforeseeable) beyond a party’s reasonable control, including but not limited to: acts of God, unusually inclement weather, acts of war, insurrection, riots or terrorism, lock-outs; inability to obtain necessary materials; damage to, destruction of, or unavoidable shut-down of necessary facilities or equipment; any government permitting delays lasting over six (6) months in duration; provided, that that party shall promptly notify the other party in writing of the existence of any event of force majeure, and shall exercise diligence and reasonable efforts to remove or overcome the cause of such inability to undertake the Affected Obligation, and shall recommence performance thereof as soon as reasonably possible.  The affected party shall thereafter have an additional period of time equal to the duration of the force majeure to complete the Affected Obligation.  Lessee shall remain obligated to meet the lease payment schedule under Section 3 and all obligations under Section 7, property maintenance.

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(i)

Further Assurances.  Each of the parties agrees that it shall take from time to time such actions and execute such additional instruments as may be reasonably necessary or convenient to implement and carry out the intent and purpose of this Agreement.

(j)

Attorneys Fees.  In any litigation between the parties to this Agreement or persons claiming under them resulting from, arising out of, or in connection with this Agreement or the construction or enforcement thereof, the substantially prevailing party or parties shall be entitled to recover from the defaulting party or parties, all reasonable costs, expenses, attorneys fees, expert fees, and other costs of suit incurred by it in connection with such litigation, including such costs, expenses and fees incurred prior to the commencement of the litigation, in connection with any appeals, and collecting any final judgment entered therein.  If a party or parties substantially prevails on some aspects of such action, but not on others, the court may apportion any award of costs and attorneys fees in such manner as it deems equitable.

(k)

Construction.  The section and paragraph headings contained in this Agreement are for convenience only, and shall not be used in the construction of this Agreement.  The invalidity of any provision of this Agreement shall not affect the enforceability of any other provision of this Agreement.

(l)

Currency.  All references to dollars herein shall mean United States dollars.

(m)

Governing Law.  This Agreement shall be governed by, interpreted and enforced in accordance with the laws of the State of Nevada, without regard to its conflicts of laws and provisions.

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the 8th day of January, 2012.

MinQuest, Inc.

By: /s/ Herb Duerr                              

Name: 

Herb Duerr

Title:

Vice President

North Springs Resources Corp.

By: /s/ Harry Lappa                           

Name:

Harry Lappa

Title:

CEO and President

 

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SCHEDULE A

MinQuest, Inc. owns an undivided 100% interest in certain unpatented mining claims situated in Sections 34-36, T4S, R40E in Esmeralda County, Nevada, more particularly described as follows:

			
	CLAIM NAME

	CLAIMANT’S NAME

	NMC NUMBER

	Lida 1

	M. Forth, R. Kern, J. Motter

	838518

	Lida 2

	M. Forth, R. Kern, J. Motter

	838519

	Lida 3

	M. Forth, R. Kern, J. Motter

	838520

	Lida 4

	M. Forth, R. Kern, J. Motter

	838521

	Lida 5

	M. Forth, R. Kern, J. Motter

	838522

	Lida 6

	M. Forth, R. Kern, J. Motter

	838523

	Lida 7

	M. Forth, R. Kern, J. Motter

	838524.

	Lida 8

	M. Forth, R. Kern, J. Motter

	838525

	Lida 9

	M. Forth, R. Kern, J. Motter

	838526

	Lida 10

	M. Forth, R. Kern, J. Motter

	838527

			
	CLAIM NAME

	CLAIMANT’S NAME

	NMC NUMBER

	Lida 11

	MinQuest Inc.

	848429

	Lida 12

	MinQuest Inc.

	848430

	Helen

	MinQuest Inc.

	833046

	Helen #1

	MinQuest Inc.

	833048

	Helen #3

	MinQuest Inc.

	833049

	Helen #4

	MinQuest Inc.

	833050

	Helen #5

	MinQuest Inc.

	833051

	Helen #6

	MinQuest Inc

	833052

	Helen #7

	MinQuest Inc.

	833053

	Helen #8

	MinQuest Inc

	833054

	Helen #9

	MinQuest Inc

	833055

	Imperial #20

	MinQuest Inc.

	833056

	Imperial #21

	MinQuest Inc.

	833057

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SCHEDULE B

“Net Smelter Return” shall mean the aggregate proceeds received by the Lessee from time to time from any smelter or other purchaser from the sale of any ores, concentrates, metals or any other material of commercial value produced by and from the Property after deducting from such proceeds the following charges only to the extent that they are not deducted by the smelter or other purchaser in computing the proceeds:

(a)

The cost of transportation of the ores, concentrates or metals from the Property to such smelter or other purchaser, including related insurance; and,

(b)

Smelting and refining charges including penalties. 

The Lessee shall reserve and pay to the Lessor a NSR equal to three (3%) percent of Net Smelter Return. Payment of NSR payable to the Lessor hereunder shall be made monthly within thirty (30) days after the end of each calendar month during which the Lessee receives payments on all products produced and used from the Property and will be paid in U.S. dollars or in kind bullion at the discretion of the Lessor. 

Within 180 days after the end of each calendar year for which the NSR for such year shall be audited by the Lessee, any adjustments in the payments of NSR to the Lessor shall be made forthwith after completion of the audit. Lessor shall have the right, but not the obligation to audit and give written dispute of Lessee’s records within 180 days after the Lessee’s yearly audits.  All payments of NSR to the Lessor for a calendar year shall be deemed final and in full satisfaction of all obligations of the Lessee in respect thereof if such payments or the calculations thereof are not disputed by the Lessor of the same audited statement unless and until any new information is revealed after the time frames stated above. The Lessee shall maintain accurate records relevant to the determination of the NSR and the Lessor or its authorized agent, shall be permitted the right to examine such records at all reasonable times.

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SCHEDULE C

		
	BLM Annual Filing Fees: 24 @ $140.00

	$3,360.00

	 
	 

	County Annual Filing Fees: 24 @ $10.50 + $4.00

	$256.00

	 
	 

	Administrative Fees: 24 @ $5.00

	$120.00

	 
	 

	Total

	$3,736.00

10EXHIBIT 10.1

 

SEPARATION AND MUTUAL RELEASE AGREEMENT

 

SEPARATION AND MUTUAL RELEASE AGREEMENT (this “Agreement”) dated as of January 9, 2012 by and between Liz Claiborne, Inc., a Delaware corporation (the “Company”), and Andrew Warren (the “Executive”) (each a “Party,” and together, the “Parties”).

 

WHEREAS, the Executive has been employed by the Company as its Chief Financial Officer; and

 

WHEREAS, the Parties have mutually agreed to the Executive’s separation from his employment with the Company and set forth their agreement as to certain payments, benefits, rights and obligations of the Parties in connection therewith.

 

NOW, THEREFORE, in consideration of the covenants and conditions set forth herein and other good and valuable consideration, the receipt and sufficiency of which the Parties hereby acknowledge, the Parties, intending to be legally bound, hereby agree as follows:

 

1.              Resignation.  The Parties hereby mutually agree that the Executive will resign from the Company, and consequently his employment with the Company will terminate, effective as of the close of business on March 16, 2012 (the “Separation Date”).  The parties agree that, except as expressly provided herein, the Amended and Restated Executive Severance Agreement, by and between the Parties, dated as of January 1, 2011 (the “Executive Severance Agreement”) shall terminate on the Separation Date and each party hereby waives any notice that may be required from the other party pursuant to the Executive Severance Agreement.  Accordingly, the Executive hereby resigns, effective as of the Separation Date, from all positions, titles, duties, authorities and responsibilities (including without limitation from any board positions) with, arising out of or relating to his employment with the Company and its subsidiaries and affiliates (the “Company Group”), including without limitation as the Chief Financial Officer and Executive Vice President of the Company (“CFO”), and agrees to execute all additional documents and take such further steps as may be required to effectuate such resignations.  For purposes of clarity, this Section 1 shall survive any revocation of Section 7 of this Agreement or the Bring-Down Release (as defined below) by the Executive.

 

2.              Treatment of Company Equity; Reimbursement of Expense Payments; No Other Benefits.  In connection with the Executive’s termination of employment, the Company shall pay and provide to the Executive, and the Executive shall only be entitled to from the Company Group, the following payments and benefits set forth in this Section 2 of this Agreement, at the time or times set forth herein, subject to the Executive’s continued employment with the Company in the position of CFO through the Separation Date, including the Executive’s continued performance of his reasonable and customary duties as CFO through the Separation Date consistent with past practice, and the execution and non-revocation of the Bring Down Release (as defined below):

 

2.1       Company Equity.

 

- 1 -

 

(a)                               Stock Option Awards.  The Company has previously granted options on shares of Company common stock pursuant to the March 1, 2010, September 1, 2010, March 1, 2011 and September 1, 2011 Award Agreements (collectively, the “Award Agreements”.  As of the Separation Date, each unvested option granted pursuant to the Award Agreements shall be deemed to be vested and exercisable.  For the avoidance of doubt, on the Separation Date, the Executive shall vest in the following:

 

- 117,500 options granted as of March 1, 2010 with an exercise price of $7.10

 

- 112,500 options granted as of September 1, 2010 with an exercise price of $4.40

 

- 112,500 options granted as of March 1, 2011 with an exercise price of $4.97

 

- 150,000 options granted as of September 1, 2011 with an exercise price of $5.06

 

 

In respect of any of the stock options that are vested and outstanding pursuant to the Award Agreements (including any stock options that are vested as of the Separation Date) (collectively, the “Vested Options”), such Vested Options shall remain exercisable in accordance with their terms.  The Parties agree and acknowledge that the terms of the Award Agreements between the Company and the Executive are hereby amended to effectuate, to the extent necessary, the provisions of this Section 2.1(a).  Except as expressly provided in this Section 2.1(a), the Vested Options otherwise remain outstanding in accordance with their respective terms and conditions.

 

(b)                              Special Retention RSU Award.  The Company has previously granted the Executive an award of 192,600 shares of restricted stock units covering Company common stock pursuant to the Amended and Restated 2011 Special Retention Award Agreement dated as of June 13, 2011 and the Notice of Award related thereto (the “Special Retention Grant”).  Notwithstanding anything to the contrary in the Amended and Restated 2011 Special Retention Award Agreement and Notice of Award, as of the Separation Date, the restricted stock units granted to the Executive pursuant to the Special Retention Grant shall be deemed vested and shall be settled in accordance with the terms of Section 4 of the Amended and Restated 2011 Special Retention Award Agreement.  The Parties agree and acknowledge that the terms of the relevant Special Retention Grant agreements between the Company and the Executive are hereby amended to effectuate, to the extent necessary, the provisions of this Section 2.1(b).  Except as expressly provided in this Section 2.1(b), the Special Retention Grant otherwise remains outstanding in accordance with its respective terms and conditions.

 

(c)                               2007 Sign-On Restricted Stock Award.  The Company has previously granted the Executive an award of 9,550 shares of restricted stock (the “Sign-On Shares”) covering Company common stock pursuant to an award agreement dated as of July 13, 2007 (the “Sign-On Grant Award Agreement”).  Notwithstanding

 

- 2 -

 

anything to the contrary in the Sign-On Grant Award Agreement, as of the Separation Date, the Sign-On Shares shall be deemed vested.  The Parties agree and acknowledge that the terms of the Sign-On Grant Award Agreement between the Company and the Executive are hereby amended to effectuate, to the extent necessary, the provisions of this Section 2.1(c).  Except as expressly provided in this Section 2.1(c), the Sign-On Grant Agreement otherwise remains outstanding in accordance with its respective terms and conditions.

 

(d)                              Treatment of Other Equity-Based Awards.  For the avoidance of doubt, the Executive’s 2010 Profitability Incentive Award granted July 1, 2010 shall be forfeited on the Separation Date.

 

2.2       2011 Annual Incentive Bonus.  The Executive shall remain eligible to receive his full 2011 Annual Incentive Bonus, as determined in the sole discretion of the Compensation Committee of the Company’s Board of Directors, which shall be payable at the same time at which bonuses are payable to other executive officers of the Company in accordance with the terms of the Company’s bonus plan, notwithstanding the date of the Separation Date.

 

2.3       Expense Reimbursement.  The Company shall promptly reimburse the Executive, subject to the requirements of its reimbursement policies applied consistently with prior practice, for any business expenses incurred by the Executive prior to, and not reimbursed as of, the Separation Date.

 

2.4       No Other Benefits.  The benefits and payments pursuant to this Section 2 are for and in lieu of any other payments or benefits (and none shall accrue) beyond the Separation Date.  The Executive specifically acknowledges and agrees that he is entitled to receive no severance pay or other benefits pursuant to the Executive Severance Agreement or any severance plan or policy of the Company Group.

 

3.              Restrictions.  The Executive hereby agrees and reaffirms that (i) for an eighteen (18) month period following the Separation Date, the Executive agrees to continue to be bound by the non-competition, non-solicitation and non-interference covenants provided in Section 5 of the Executive Severance Agreement, and (ii) in perpetuity, the Executive agrees to continue to be bound by the confidential information restrictions provided in Section 4 of the Executive Severance Agreement.

 

4.              Remedies.   The Parties acknowledge and agree that the Executive’s breach or threatened breach of any of the restrictions set forth in Section 3 of this Agreement will result in irreparable and continuing damage to the Company Group for which there may be no adequate remedy at law and that the Company Group shall be entitled to equitable relief, including specific performance and injunctive relief as remedies for any such breach or threatened or attempted breach.  The Executive hereby consents to the grant of a temporary restraining order or an injunction (temporary or otherwise) against the Executive or the entry of any other court order against the Executive prohibiting and enjoining him from violating, or directing him to comply with, any provision of Section 3.  The Executive also agrees that such

 

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remedies shall be in addition to any and all remedies, including damages, available to the Company and its subsidiaries and affiliates against him for such breaches or threatened or attempted breaches.

 

5.              Mutual Non-Disparagement.  From and after the date of this Agreement (i) the Executive agrees not to defame or disparage, or otherwise engage in any act that is intended or may be reasonably be expected to harm the reputation, business, prospects or other operations of the Company Group, any member of their management, boards of directors, any of their respective subsidiaries or affiliates, or any investor or shareholder in the Company or the Company Group, unless as required by law or an order of a court or governmental agency with jurisdiction, and (ii) the executive officers and directors of the Company agree not to defame or disparage, or otherwise engage in any act that is intended or may be reasonably be expected to harm the reputation, business, prospects or other interests of the Executive, unless as required by law or an order of a court or governmental agency with jurisdiction.

 

6.              Executive’s Cooperation Obligations.  The Executive agrees to cooperate in the defense of any member of the Company Group against any threatened or pending litigation or in any investigation or proceeding that relates to any events or actions which occurred during or prior to the term of the Executive’s employment with the Company.  Furthermore, the Executive agrees to cooperate in the prosecution of any claims and lawsuits brought by the Company or any of its affiliates that are currently outstanding or that may in the future be brought relating to matters which occurred during or prior to the term of the Executive’s employment with the Company.  From and after the Separation Date, except as requested by the Company or as required by law, the Executive shall not comment upon any (i) threatened or pending claim or litigation (including investigations or arbitrations) involving the Company or any member of the Company Group or (ii) threatened or pending government investigation involving the Company or any member of the Company Group.  In addition, the Executive shall not disclose any confidential or privileged information in connection with any pending litigation or investigation or proceeding without the consent of the Company and shall give prompt notice to the Company of any request therefor.  If the Executive is required to cooperate in the defense of any member of the Company Group in accordance with this Section 6, the Company shall pay the Executive a reasonable per diem fee, in addition to any expense reimbursement, for such assistance, based on the Executive’s annual base salary rate immediately preceding the Separation Date.

 

7.              Mutual Release.

 

7.1       Release of Company.  The Executive agrees that, on behalf of himself and his heirs, legal representatives, successors and assigns (hereinafter, collectively, the “Executive Released Parties”), and each of them, for good and valuable consideration does hereby unconditionally, knowingly, and voluntarily release and forever discharge the Company Released Parties (as defined below), from any and all known or unknown claims, demands, actions or causes of action that now exist or that may arise in the future, based upon events occurring or omissions on or before the date of the execution of this Agreement, including, but not limited to, any and all claims whatsoever pertaining in any way to the Executive’s employment at the Company or with any of the Company Released Parties (including any of their predecessors) or the termination of the Executive’s employment, including, but not limited

 

- 4 -

 

to, any claims under, as applicable:  (1) the Americans with Disabilities Act; the Family and Medical Leave Act; Title VII of the Civil Rights Act; 42 U.S.C. Section 1981; the Older Workers Benefit Protection Act; the Age Discrimination in Employment Act of 1967, as amended; the Employee Retirement Income Security Act of 1974; the Civil Rights Act of 1866, 1871, 1964, and 1991; the Rehabilitation Act of 1973; the Equal Pay Act of 1963; the Vietnam Veteran’s Readjustment Assistance Act of 1974; the Occupational Safety and Health Act; and the Immigration Reform and Control Act of 1986; and any and all other federal, state or local laws, statutes, ordinances, or regulations pertaining to employment, discrimination or pay; (2) any state tort law theories under which an action could have been brought, including, but not limited to, claims of negligence, negligent supervision, training and retention or defamation; (3) any claims of alleged fraud and/or inducement, including alleged inducement to enter into this Agreement; (4) any and all other tort claims; (5) all claims for attorneys’ fees and costs; (6) all claims for physical, mental, emotional, and/or pecuniary injuries, losses and damages of every kind, including, but not limited to, earnings, punitive, liquidated and compensatory damages, and employee benefits; (7) any and all claims whatsoever arising under any of the Company Released Parties’ or Executive Released Parties’ express or implied contracts or under any federal, state, or local law, ordinance, or regulation; (8) any and all claims whatsoever against any of the Company Released Parties for wages, bonuses, benefits, fringe benefits, vacation pay, or other compensation or for any damages, fees, costs, or benefit; and (9) any and all claims whatsoever to reinstatement; provided, however, that, notwithstanding anything to the contrary contained herein, this Agreement does not cover and specifically excludes the Executive’s rights and claims directly or indirectly arising from or under or related to (A) any obligation of the Company to provide the benefits or payments described in this Agreement, (B) any indemnification, advancement of expenses, and/or contribution claims or rights that the Executive might have under any agreement, plan, program, policy, or arrangement of the Company and/or any other Company Released Parties, (C) the Consolidated Omnibus Budget Reconciliation Act (COBRA), (D) any Vested Options or other vested equity, or (E) any profit-sharing and/or retirement plans or other benefits in which the Executive has vested rights.  The Executive and the Company also intend that this Section 7 operate as a waiver of all unknown claims of the type being released hereunder.  The Executive warrants, on the one hand, that he is currently unaware of any such claim, demand, action, or cause of action against any Company Released Party, and the Company hereby warrants, on the other hand, that it is currently unaware of any such claim, demand, action, or cause of action against any Executive Released Party, which the Executive, or the Company, as appropriate, has not released pursuant to this Section 7.1 except for the rights and/or claims relating to the matters specifically excluded above.  For purposes of this Section 7, “Company Released Parties” means, collectively, the Company and its present and former related companies, subsidiaries and affiliates, and all of their present and former employees, officers, directors, owners, shareholders, shareholders’ employees, agents, attorneys, insurers, and operators, including in their individual capacity, and each of its and their successors and assigns.

 

7.2       Release of the Executive.  The Company agrees that, on behalf of itself and the other Company Released Parties, and each of them, for good and valuable consideration, does hereby unconditionally, knowingly release and forever discharge the Executive Released Parties from any and all known or unknown claims, demands, actions or causes of action that now exist or that may arise in the future, based upon events occurring or omissions on or before the date of the execution of this Agreement, including, but not limited to,

 

- 5 -

 

any and all claims whatsoever pertaining in any way to the Executive’s employment at the Company or with any of the Company Released Parties (including any of their predecessors) or the termination of the Executive’s employment; provided, however, that the foregoing release does not apply to claims relating to or involving any act of the Executive’s fraud, malfeasance or criminal activity.

 

7.3       Separation Date Release Bring Down.  The Executive and the Company shall each re-affirm their respective releases in favor of the other party on the Separation Date (the “Bring-Down Release”), by signing and delivering the agreement set forth on Annex A hereto on the Separation Date.  For purposes of clarity, payment to the Executive of the benefits set forth in Section 2 of this Agreement is expressly contingent on the Executive’s execution and non-revocation of the Bring-Down Release.

 

7.4       Executive Acknowledgements; Effectiveness of this Agreement.  The Executive acknowledges that he has been given the opportunity to review and consider this Agreement and the Bring-Down Release, as applicable, for 21 days from the date that the Executive received a copy of the Agreement and, with respect to the Bring-Down Release, from the date of the Separation Date.  If the Executive elects to sign this Agreement or the Bring-Down Release before the expiration of the 21 days, the Executive acknowledges that he has agreed to waive his right to the full 21 day period.  The Executive may revoke this Section 7 and the Bring-Down Release after signing it by giving written notice to the Company’s General Counsel within 7 days after signing it.  Each of this Section 7 and the Bring-Down Release, respectively, will be effective on the 8th day after the Executive signs and returns this Agreement to the Company or the 8th day after the Executive signs and returns the Bring-Down Release, as applicable, provided that each of them, respectively, is not revoked.  If the Executive revokes this Section 7 or the Bring-Down Release, then Section 2 of this Agreement shall be void ab initio, and, for clarity, the Company Group shall have no obligations under this Agreement or otherwise to provide the Executive with any payments or benefits.  The Executive acknowledges that the Executive has been advised to consult with an attorney before signing this Agreement, and that the Executive is signing this Agreement knowingly, voluntarily and with full understanding of its terms and effects, of his own free will without any duress, being fully informed and after due deliberation.  The Executive voluntarily accepts the consideration provided to him for the purpose of making full and final settlement of all claims referred to above.

 

8.              Other Provisions.

 

8.1       Notices.  Any notice or other communication required or which may be given hereunder shall be in writing and shall be delivered personally, telegraphed, telexed, sent by facsimile transmission or sent by certified, registered or express or overnight mail, postage prepaid, and shall be deemed given when so delivered personally, telegraphed, telexed, or sent by facsimile transmission (with written confirmation received) or, if mailed, four (4) days after the date of mailing or the next day after overnight mail, as follows:

 

(a)              If the Company, to:

 

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Liz   Claiborne, Inc.
    
	
 
    	
1441 Broadway
    
	
 
    	
New York, NY 10018
    
	
 
    	
Attention:
    	
Nicholas   Rubino, Esq., General Counsel
    
	
 
    	
Telephone:
    	
(212) 626-3240
    
	
 
    	
Email:
    	
Nick_Rubino@liz.com
    
	
 
    	
 
    
	
 
    	
With a copies to:
    
	
 
    	
 
    
	
 
    	
Sullivan &   Cromwell LLP
    
	
 
    	
Max J. Schwartz
    
	
 
    	
New York, NY 10004-2498
    
	
 
    	
Attention:
    	
Max J.   Schwartz, Esq.
    
	
 
    	
Telephone:
    	
(212) 558-4000
    
	
 
    	
Fax:
    	
(212) 291-9137
    

 

(b)                                                      If the Executive, to the Executive’s home
 and office addresses reflected in the Company’s
 records

 

8.2       Entire Agreement.  This Agreement contains the entire agreement between the Parties with respect to the subject matter hereof and supersedes all prior agreements, written or oral, with respect thereto, excluding only Sections 4, 5 and 6 of the Executive Severance Agreement which shall remain in full force and effect in accordance with their terms.

 

8.3       Waiver and Amendments.  This Agreement may be amended, modified, superseded, canceled, renewed or extended, and the terms and conditions hereof may be waived, only by a written instrument signed by the Parties or, in the case of a waiver, by the Party waiving compliance.  No delay on the part of any Party in exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any waiver on the part of any right, power or privilege hereunder, nor any single or partial exercise of any right, power or privilege hereunder, preclude any other or further exercise thereof or the exercise of any other right, power or privilege hereunder.

 

8.4       Governing Law and Venue.

 

(a)        This Agreement shall be governed and construed in accordance with the laws of the State of New York applicable to agreements made and not to be performed entirely within such state, without regard to conflicts of laws principles.

 

(b)        The Parties agree irrevocably to submit to the exclusive jurisdiction of the federal courts or, if no federal jurisdiction exists, the state courts, located in the County of New York, NY, for the purposes of any suit, action or other proceeding brought by any Party arising out of any breach of any of the provisions of this Agreement and hereby waive, and agree not to assert by way of motion, as a defense or otherwise, in any such suit, action, or proceeding, any claim that it is not personally subject to the jurisdiction of the above-named courts, that the suit, action or proceeding is brought in an inconvenient forum, that the venue of

 

- 7 -

 

the suit, action or proceeding is improper, or that the provisions of this Agreement may not be enforced in or by such courts.  SUBJECT TO APPLICABLE LAW, THE PARTIES HEREBY WAIVE THEIR RIGHT TO A JURY TRIAL WITH RESPECT TO ANY DISPUTE ARISING FROM THIS AGREEMENT.

 

8.5       Assignability by the Company and the Executive.  The Executive’s rights and obligations may not be assigned by the Executive, but the Company may assign its rights, together with its obligations, to any other entity which will succeed to all or substantially all of the assets and substantially carry on the business of the Company.

 

8.6       Counterparts.  This Agreement may be executed in counterparts, each of which shall be deemed an original but all of which shall constitute one and the same instrument.

 

8.7       Headings.  The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning of terms contained herein.

 

8.8       Severability.  If any term, provision, covenant or restriction of this Agreement, or any part thereof, is held by a court of competent jurisdiction of any foreign, federal, state, county or local government or any other governmental, regulatory or administrative agency or authority to be invalid, void, unenforceable or against public policy for any reason, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected or impaired or invalidated.  The Executive acknowledges that the restrictive covenants contained in Section 3 are reasonable and valid in temporal scope and in all other respects.

 

8.9       Judicial Modification.  If any court determines that any of the covenants in Section 3, or any part of any of them, is invalid or unenforceable, the remainder of such covenants and parts thereof shall not thereby be affected and shall be given full effect, without regard to the invalid portion.  If any court determines that any of such covenants, or any part thereof, is invalid or unenforceable because of the geographic or temporal scope of such provision, such court shall reduce such scope to the minimum extent necessary to make such covenants valid and enforceable.

 

8.10     Compliance with Law.  This Agreement is intended to comply with the requirements of Section 409A of the Code and the parties hereto agree to treat payments and entitlements hereunder consistent with that intent.  To the extent that any provision in this Agreement is ambiguous as to its compliance with Section 409A, the provision shall be read in such a manner so that all payments hereunder shall comply with Section 409A.

 

8.11     Tax Withholding.  Each payment under this Agreement is set forth as a gross amount and is subject to all applicable tax withholdings.  The Company is hereby authorized to withhold from any payment due hereunder the amount of withholding taxes due any federal, state or local authority in respect of such payment and to take such other action as may be necessary to satisfy all Company obligations for the payment of such withholding taxes.

 

- 8 -

 

8.12           Recoupment.  To the extent required under applicable laws rules and regulations, the Company will be entitled to recoup, and the Executive will be required to repay, any payments or benefits pursuant to this Agreement.

 

[Signatures on next page]

 

- 9 -

 

IN WITNESS WHEREOF, the Parties hereto, intending to be legally bound hereby, have executed this Agreement as of the day and year first above mentioned.

 

	
 
    	
EXECUTIVE
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
/s/ ANDREW WARREN
    
	
 
    	
Andrew Warren
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
LIZ CLAIBORNE, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/NICHOLAS RUBINO
    
	
 
    	
 
    	
Nicholas Rubino
    
	
 
    	
 
    	
Senior Vice President,   Chief Legal Officer,
   General Counsel and Secretary
    

 

 

Annex A

 

BRING-DOWN RELEASE

 

Reference is hereby made to the Separation and Mutual Release Agreement (the “Agreement”) dated as of January 9, 2012 by and between Liz Claiborne, Inc., a Delaware corporation (the “Company”), and Andrew Warren (the “Executive”) (each a “Party,” and together, the “Parties”).  Capitalized terms used herein but not defined have the meanings ascribed to them in the Agreement.  This Bring-Down Release Agreement is made by and between the Parties as of the Separation Date.

 

In accordance with Section 7.3 of the Agreement, the Executive hereby reaffirms the releases set forth in Section 7.1 of the Agreement on his behalf and on behalf of the Executive Released Parties as of the Separation Date (accordingly, any reference to the date of the Agreement in Section 7.1 shall be deemed to be a reference to the Separation Date).  In accordance with Section 7.3 of the Agreement, the Company hereby reaffirms the releases set forth in Section 7.2 of the Agreement on its behalf and on behalf of the Company Released Parties as of the Separation Date (accordingly, any reference to the date of the Agreement in Section 7.2 shall be deemed to be a reference to the Separation Date).  The Executive further agrees and acknowledges the terms set forth in Sections 7.3 and 7.4 of the Agreement and agrees that if this Bring-Down Release Agreement is revoked, then Section 2 of the Agreement shall be void ab initio, and, for clarity, the Company Group shall have no obligations under the Agreement or otherwise to provide the Executive with any payments or benefits.

 

IN WITNESS WHEREOF, the Parties hereto, intending to be legally bound hereby, have executed this Agreement as of the day and year first above mentioned.

 

	
 
    	
EXECUTIVE
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
                                                                         
    
	
 
    	
Andrew Warren
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
LIZ   CLAIBORNE, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:                                                                  
    
	
 
    	
      Nicholas   Rubino
    
	
 
    	
      Senior   Vice President, Chief Legal Officer,
         General Counsel and Secretary
    

 

A-1

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