Document:

ex10-1.htm

    Exhibit
10.1

    CONSULTING
SERVICES AGREEMENT

    

    This
Consulting Services Agreement (“Agreement”), dated March 14,
2008, is made by and between Christopher Wain of ASAI Consulting (“Consultant”) and SARS Corporation, a Nevada
corporation (“Company”).  Collectively
referred to herein as the “Parties.”

    

    WHEREAS,
Consultant has extensive background in the area of business development,
engineering and finance;

    

    WHEREAS,
Consultant desires to be engaged by Company to provide consulting services to
Company subject to the conditions set forth herein;

    

    WHEREAS,
Company has a wholly owned subsidary, SARS Andronics, Ltd. (“SARS Andronics”), located in
Northern Ireland, that would be the beneficiary of the services provided by the
Consultant;

    

    WHEREAS,
Company is a publicly held corporation with its common stock shares trading on
the Over the Counter Bulletin Board under the ticker symbol SARO and desires to
further develop its business; and

    

    WHEREAS,
Company desires to engage Consultant to provide the Services, as defined below,
in his area of knowledge and expertise on the terms and subject to the
conditions set forth herein.

    

    NOW,
THEREFORE, in consideration for those services, Consultant provides to Company,
the Parties agree as follows:

    

    1.           Services
of Consultant

    

    Consultant agrees to perform for
Company the Services, defined below, during the Term, also defined below, of
this Agreement, upon such terms and to the extent the Parties agree from time to
time.  The nature of the Services to be provided shall include, but
are not limited to, (i) business development, management and strategic advice,
(ii) acting as Chief Operating Officer of SARS and SARS Andronics and managing
director of SARS Andronics, (iii) assist with securing necessary key employees
for SARS Andronics, (iv) assist with securing new office space and (v) any other
services as mutually agreed upon by the Parties (collectively referred to herein
as the “Services”).

    

    2.           Consideration

    

    (a)           Consideration
for Services

    

    Company
agrees to pay Consultant, as Consultant’s fee and as consideration for the
Services, (i) Five Thousand Dollars (USD$5,000) per week (paid bi-weekly) and
(ii) equity awards of fifty thousand (50,000) shares of SARS common stock per
quarter upon achieving the SARS Andronics sales plan, as updated on a quarterly
basis. If the quarterly sales plan is not achieved, the unearned quantity of
shares shall be adjusted and potentially earned in accordance with the final
annual sales plan upon the first anniversary of this Agreement. If the quarterly
sales plan is not met in any quarter and one or more quarters exceeded
the quarterly sales plan goals, than those additional sales would be
included in the annual calculation, referenced above, and used toward unearned
share readjustment. 

    

    Additionally,
should a Change of Control, as defined below, event occur, Consultant shall be
entitled to receive the remaining unvested shares.  For example, if a
Change of Control event occurs six (6) months after the execution of this
Agreement, Consultant shall be entitled to receive the remaining one hundred
thousand (100,000) unvested shares of SARS common stock.

    

    For
purposes of this Agreement, a “Change of Control”
shall mean:  (i) the acquisition by any individual, entity or group
(within the meaning of Section 13(d)(3) or 14(d)(2) under the Exchange Act of
1934) of beneficial ownership (within the meaning of Rule 13d-3 promulgated
under the Exchange Act of 1934) of fifty percent (50%) or more of the combined
voting power of the outstanding voting securities of the Company; (ii)
individuals who, as of the date hereof, constitute the Board of Directors of the
Company cease for any reason to constitute at least a majority of the Board of
Directors of the Company; (iii) consummation of a reorganization, merger or
consolidation or sale or disposition of all or substantially all of the assets
of the Company; or (iv) approval by the stockholders of the Company of a
complete liquidation or dissolution of the Company.

    

    (b)           Expenses

    

    The
Parties agree that the Company will be responsible for paying any reasonable out
of pocket expenses incurred by the Consultant in the performance of the Services
(the “Expenses”).  Expenses
exceeding Five Hundred Dollars (USD$500.00) shall be mutually agreed upon by the
Parties before they are incurred by Consultant. Expenses shall include one full
fair return flight to the United States every month, plus initial flight taken
on the date of this Agreement. These may be accumulated and used by family, or
the reasonable equivalent cost may used for other personal travel.

    

    Expenses
shall also include, but are not limited to, mobile phone bill, provision of car
use and associated running costs.  Furthermore, the Parties agree that
the Company shall provide reasonable housing for the Consultant during his stay
in Northern Ireland.  The location and cost of which shall be mutually
agreed upon by the Parties.

    

    (c)           Payment

    

    All
compensation payable to Consultant hereunder shall be subject to the Company’s
rules and regulations, and shall also be subject to all applicable State and
federal employment law(s); it being understood that Consultant shall be
responsible for the payment of all taxes resulting from a determination that any
portion of the compensation and/or benefits paid/received hereunder is a taxable
event to Consultant; it being further understood that Consultant shall hold the
Company harmless from any governmental claim(s) for Consultant’s personal tax
liabilities, including interest or penalties, arising from any failure by
Consultant to pay his individual taxes when due.

    

    3.           Confidentiality

    

    Each
party agrees that during the course of this Agreement, information that is
confidential or of a proprietary nature may be disclosed to the other party,
including, but not limited to, product and business plans, software, technical
processes and formulas, source codes, product designs, sales, costs and other
unpublished financial information, advertising revenues, usage rates,
advertising relationships, projections, and marketing data (“Confidential Information”).
Confidential Information shall not include information that the receiving party
can demonstrate (a) is, as of the time of its disclosure, or thereafter becomes
part of the public domain through a source other than the receiving party, (b)
was known to the receiving party as of the time of its disclosure, (c) is
independently developed by the receiving party, or (d) is subsequently learned
from a third party not under a confidentiality obligation to the providing
party.  Confidential Information need not be marked as confidential at
the time of disclosure to receive “Confidential Information” protection as
required herein, rather all information disclosed that, given the nature of the
information or the circumstances surrounding its disclosure reasonably should be
considered as confidential, shall receive “Confidential Information”
protection.

    

    4.           Non-Competition,
Non-Solicitation.

    

    Consultant agrees that he shall not,
during the term of this Agreement and for one (1) year subsequent thereto, without both the
disclosure to and the written approval of the Board of Directors of the Company,
directly or indirectly, engage or be interested in (whether as a principal,
lender, employee, officer, director, partner, venturer, consultant or otherwise)
any business(es) that is competitive with the business being conducted by the
Company through the termination date, without the express written approval of
the Board of Directors.

    

    Consultant agrees that he will not,
without the prior written consent of the Company’s Board of Directors, for a
period of one (1) year after the termination date, directly or indirectly
disturb, entice, or in any other manner persuade, any employee(s),
consultant(s), reseller or partner of the Company to discontinue that person’s
or firm’s relationship with the Company if the employee(s) and/or consultant(s)
were employed by or the reseller or partner was engaged with the Company at any
time during the one (1) year period after the termination date.

    

    5.           Indemnification

    

    (a)           Company

    

    Company
agrees to indemnify, defend, and shall hold harmless Consultant and/or its
agents, and to defend any action brought against said Parties with respect to
any claim, demand, cause of action, debt or liability, including reasonable
attorneys' fees to the extent that such action is based upon a claim that: (i)
is true, (ii) would constitute a breach of any of Company's representations,
warranties, or agreements hereunder, or (iii) arises out of the negligence or
willful misconduct of Company.

    

    (b)           Consultant

    

    Consultant
agrees to indemnify, defend, and shall hold harmless Company, its directors,
employees and agents, and defend any action brought against same with respect to
any claim, demand, cause of action, debt or liability, including reasonable
attorneys' fees, to the extent that such an action arises out of the gross
negligence or willful misconduct of Consultant.

    

    (c)           Notice

    

    In
claiming any indemnification hereunder, the indemnified party shall promptly
provide the indemnifying party with written notice of any claim, which the
indemnified party believes falls within the scope of the foregoing paragraphs.
The indemnified party may, at its expense, assist in the defense if it so
chooses, provided that the indemnifying party shall control such defense, and
all negotiations relative to the settlement of any such claim. Any settlement
intended to bind the indemnified party shall not be final without the
indemnified party's written consent, which shall not be unreasonably
withheld.

    

    6.           Termination
and Renewal

    

    (a)           Term

    

    Unless
mutually extended by the parties, this Agreement shall become effective on the
date first written above and shall terminate after six (6) months of the date of
this Agreement (collectively, the “Term”).

    

    (b)           Termination

    

    Either
party may terminate this Agreement on thirty (30) calendar days written notice,
or if prior to such action, the other party materially breaches any of its
representations, warranties or obligations under this Agreement. Except as may
be otherwise provided in this Agreement, such breach by either party will result
in the other party being responsible to reimburse the non-defaulting party for
all costs incurred directly as a result of the breach of this Agreement, and
shall be subject to such damages as may be allowed by law including all
attorneys' fees and costs of enforcing this Agreement.

    

    (c)           Termination
Due to Death or Disability

    

    This
Agreement (except as otherwise provided hereunder) shall terminate immediately
upon the death of Consultant or after fourteen (14) days of Consultant’s
inability to perform the essential functions of his duties, with or without
reasonable accommodation (defined under applicable law), due to a mental or
physical illness or incapacity.

    
 

     (d)           Termination
and Payment

    

    Upon any
termination or expiration of this Agreement, Company shall pay all unpaid and
outstanding fees and expenses including but not limited to the reasonable cost
of repatriation back to the US through the effective date of termination or
expiration of this Agreement. And upon such termination, Consultant shall
provide and deliver to Company any and all outstanding services due through the
effective date of this Agreement.

    

    7.           Remedies

    

    Should Consultant at anytime materially
breach any of terms outlined in this Agreement, Company shall have the right to
seek remedies, including but not limited to: i) a temporary restraining order
and permanent injunction; ii) liquidated damages; (iii) cancellation of the
interests underlying his stock certificates.

    

    8.           Miscellaneous

    

    (a)           Independent
Contractor

    

    Consultant
shall render all services hereunder as an independent contractor and shall not
hold himself out as an agent of Company. Nothing herein shall be construed to
create or confer upon Consultant the right to make contracts or commitments for
or on behalf of Company.

    

    (b)           Negative
Covenants

    

    Consultant hereby covenants that at no
time will they provide any service that directly or indirectly promotes or
maintains a market for the Company’s securities nor act as a conduit for
distributing securities to the general public.  Moreover, Consultant
will not provide certain services including but not limited to: acting as a
broker, dealer or person who finds investors, arranging financing, providing
investor relations or shareholder communications services, arrange or effect
mergers or circulate research to broaden or sustain a market price.

    

    (c)           Public
Statements – No Disparagement

    

     Neither
Party hereto shall make or publish any disparaging statements regarding any
other party hereto with regard to the matters leading up to this
Agreement.

    

    (d)           Rights
Cumulative; Waivers

    

    The
rights of each of the Parties under this Agreement are
cumulative.  The rights of each of the Parties hereunder shall not be
capable of being waived or varied other than by an express waiver or variation
in writing.  Any failure to exercise or any delay in exercising any of
such rights shall not operate as a waiver or variation of that or any other such
right.  Any defective or partial exercise of any of such rights shall
not preclude any other or further exercise of that or any other such
right.  No act or course of conduct or negotiation on the part of any
party shall in any way preclude such party from exercising any such right or
constitute a suspension or any variation of any such right.

    

    (e)           Benefit;
Successors Bound

    

    This
Agreement and the terms, covenants, conditions, provisions, obligations,
undertakings, rights, and benefits hereof, shall be binding upon, and shall
inure to the benefit of, the undersigned Parties and their heirs, executors,
administrators, representatives, successors, and permitted assigns.

    

    (f)           Entire
Agreement

    

    This
Agreement contains the entire agreement between the Parties with respect to the
subject matter hereof.  There are no promises, agreements, conditions,
undertakings, understandings, warranties, covenants or representa­tions,
oral or written, express or implied, between them with respect to this Agreement
or the matters described in this Agreement, except as set forth in this
Agreement.  Any such negotiations, promises, or understandings shall
not be used to interpret or constitute this Agreement.

    

    (g)           Assignment

    

    Neither
this Agreement nor any other benefit to accrue hereunder shall be assigned or
transferred by either party, either in whole or in part, without the written
consent of the other party and any purported assignment in violation hereof
shall be void.

    

    (h)           Amendment

    

    This
Agreement may be amended only by an instrument in writing executed by all the
Parties hereto.

    

    (i)           Severability

    

    Each part
of this Agreement is intended to be severable.  In the event that any
provision of this Agreement is found by any court or other authority of
competent jurisdiction to be illegal or unenforceable, such provision shall be
severed or modified to the extent necessary to render it enforceable and as so
severed or modified, this Agreement shall continue in full force and
effect.

    

    (j)           Section
Headings

    

    The
Section headings in this Agreement are for reference purposes only and shall not
affect in any way the meaning or interpretation of this
Agreement.

    

    (k)           Construction

    

    Unless
the context otherwise requires, when used herein, the singular shall be deemed
to include the plural, the plural shall be deemed to include each of the
singular, and pronouns of one or no gender shall be deemed to include the
equivalent pronoun of the other or no gender.

    

    (l)           Further
Assurances

    

    In
addition to the instruments and documents to be made, executed and delivered
pursuant to this Agreement, the Parties hereto agree to make, execute and
deliver or cause to be made, executed and delivered, to the requesting party
such other instruments and to take such other actions as the requesting party
may reasonably require to carry out the terms of this Agreement and the
transactions contemplated hereby.

    

    (m)           Notices

    

    Any
notice which is required or desired under this Agreement shall be given in
writing and may be sent by personal delivery or by mail (either (i) United
States mail, postage prepaid, or (ii) Federal Express or similar generally
recognized overnight carrier), addressed as follows (subject to the right to
designate a different address by notice similarly given):

    
 

    If to
Company:

     

    SARS
Corporation

    19119
Northcreek Parkway, Suite 201

    Bothell,
WA 98011

    Attn:
Clayton Shelver

    

    With a
copy (which shall not constitute notice) to:

    

    The Otto
Law Group, PLLC

    601 Union
Street, Suite 4500

    Seattle,
WA 98101

    Attn:
David M. Otto

    
 

    If to
Consultant:

     

    ASAI
Consulting

    Mr.
Christopher Wain

    __________________________

    __________________________

    __________________________

    __________________________

    
 

    With a
copy to:

    

    ___________________________

    ___________________________

    ___________________________

    ___________________________

    

    (n)           Governing
Law

    

    This
Agreement shall be governed by the interpreted in accordance with the laws of
the State of Washington without reference to its conflicts of laws rules or
principles.  Each of the Parties consents to the exclusive
jurisdiction of the federal courts of the State of Washington in connection with
any dispute arising under this Agreement and hereby waives, to the maximum
extent permitted by law, any objection, including any objection based on forum non coveniens, to the
bringing of any such proceeding in such jurisdictions.

    

    (o)           Consents

    

    The
person signing this Agreement on behalf of each party hereby represents and
warrants that he has the necessary power, consent and authority to execute and
deliver this Agreement on behalf of such party.

    

    (p)           Independent
Counsel

    

    All
Parties have retained independent legal counsel to advise them with respect to
this Agreement and are not relying on the Company or its counsel for legal or
tax advice.

    

    (q)           Survival
of Provisions

    

    The
provisions contained in paragraphs 3, 4, 7 and 8(b) of this Agreement shall
survive the termination of this Agreement.

    

    (r)           Execution
in Counterparts

    

    This
Agreement may be executed via facsimile and in any number of counterparts, each
of which shall be deemed an original and all of which together shall constitute
one and the same agreement.

    
      
        
          

           

           

           

          SARS
Corporation Consulting Agreement

           

          ASAI
Consulting

        

      

      
         

        
          

        

      

      
        
           

  

      

    

    IN
WITNESS WHEREOF, the Parties have caused this Agreement to be executed and have
agreed to and accepted the terms herein on the date written above.

     

    

    

    Company:

    SARS
Corporation

    

     

    
 

                           __________________________

    

    By: Clayton Shelver

    Its: Director & CEO

    

    

    Consultant:

    ASAI
Consulting

     

    
 

     

                           __________________________

    By: Christopher Wain

    

    

    

    
      
        
          

           

           

           

          SARS
Corporation Consulting Agreement

           

          ASAI
ConsultingExhibit 10.1

Exhibit 10.1

SEPARATION AGREEMENT AND RELEASE

Reference is hereby made to the following: (i) that certain employment agreement by and between Vertical Branding, Inc. f/k/a MFC Development Corp. (hereinafter “VBI,” or the “Company”) and Alan H. Gerson (hereinafter “Executive” and/or “AG”) dated as of July 15, 2006 (the “Employment Agreement”); (ii) that certain Amendment 1 to Gerson Employment Agreement by and between Executive and the Company and dated July 10, 2007 (”Amendment 1”); (iii) that certain stock option agreement by and between Executive and the Company with a Grant Date of July 27, 2006, memorializing Executive’s option to purchase up to one (1) million shares of Company common stock on the terms and conditions stated therein (the “July 2006 Option”); (iv) that certain stock option agreement by and between Executive and the Company with a Grant Date of March 16, 2007, memorializing Executive’s option to purchase up to two hundred thousand shares of Company common stock on the terms and conditions stated therein (the “March 2007 Option”); and (iv) that certain performance stock award agreement by and between Executive and the Company with a grant date of July 10, 2007, memorializing the issuance to Executive of 444,000 shares of restricted Company common stock on the terms and conditions stated therein (the “July 2007 PSA”).

WHEREAS, the Executive and the Company have mutually agreed that Executive will resign his position with the Company as President and Chief Operating Officer, and shall resign as a director of the Company, to be effective according to the terms of this Agreement on March 15, 2008 (“Termination Date”); 

WHEREAS, Executive and the Company wish to memorialize in this Separation Agreement and Release (the “Agreement”) various understandings concerning Executive’s separation from the Company. 

In consideration of the foregoing and of the mutual promises, covenants and understandings hereinafter set forth, Executive and the Company hereby agree as follows:

1.

SEPARATION:  Effective on the Termination Date, Executive’s employment with the Company shall terminate and Executive hereby resigns as an officer and director of the Company and any and all subsidiaries of the Company.  The Company acknowledges that this is a mutual termination and that Executive has not been terminated by the Company for “Justifiable Cause” as defined under the Employment Agreement. Executive acknowledges receipt of $16,968.10 representing payment in full of (i) Executive’s salary and accrued vacation through the Termination Date, less applicable payroll withholding and deductions, and (ii) reimbursement of all business expenses incurred by Executive through the Termination Date and eligible for reimbursement pursuant to Company policies applicable to same.

2.

SEPARATION PAYMENTS AND OTHER CONSIDERATION:  In consideration for this Agreement, Executive shall receive the following:

a.

Semi-Monthly Payments:  Executive will receive semi-monthly payments in the amount of $11,458.33, less applicable payroll withholding and deductions, on the first (1st) and sixteenth (16th) day of each calendar month after the Termination Date, with first such payment being made on April 1, 2008, and the last payment to be made on October 16, 2008, with the gross amount of such payments totaling $160,416.62.  Such payments shall be made by wire transfer on the day they are due and payable hereunder, or, alternatively, by direct deposit on such dates, to the checking account of Executive at Bank of America, which bank account information has been provided to Company for the direct deposit of semi-monthly paychecks during the term of Executive’s employment by the Company.  

b.

Additional Cash Payments:  Executive currently receives $1,600 per month in additional compensation in lieu of participation in Company-provided health benefits, as well as $1,000 per month in non-accountable automobile allowance.  Beginning April 1, 2008, and on the first of the month for each of the six (6) calendar months thereafter, up to and including October 1, 2008, Executive shall continue to be paid $2,600 in cash (for a total additional payment of $18,200.00), less applicable payroll withholding and deductions, if any.  Such payments shall be made by Wire Transfer on each day they are due and payable hereunder, or, alternatively, by direct deposit on such dates, to the checking account of Executive at Bank of America, which bank account information has been provided to Company for the direct deposit of semi-monthly paychecks during the Term of Executive’s employment by the Company.  

1

   

c.

The processing of the payments to be made pursuant to Paragraphs 2(a) and 2(b) through VBI’s payroll provider will not affect the fact that the Executive’s employment with VBI terminates on the Termination Date and shall not be construed nor asserted by Executive to be a continuation of employment.  In the event of a failure by VBI to make any payment required pursuant to Paragraphs 2(a) and 2(b) above, VBI will be given ten (10) days written notice to cure pursuant to the notice provisions set forth below and if VBI does not cure within the ten (10) day period, all payments to AG shall be accelerated and AG’s reasonable attorneys’ fees to collect the monies due shall be paid by VBI.  In the event that VBI does not make timely payments on two (2) occasions which require notice to cure (but timely cures such failures) and if, thereafter, VBI fails to make timely payment on a third occasion, then all remaining payments due by VBI to AG shall immediately become due and owing and payable to AG immediately without the obligation for AG to provide the ten (10) day notice to cure.  In such event VBI will also be responsible to pay AG’s reasonable attorneys’ fees to collect the monies due to AG from VBI.  

d.

Stock Options:  As of the Termination Date, the right to purchase 706,666 shares of Company common stock underlying the July 2006 Option, and 61,111 shares underlying the March 2007 Option, will have vested.  On the Termination Date, vesting of the July 2006 Option and March 2007 Option shall accelerate, and the same shall be amended, such that (i) the right to purchase an additional 250,000 shares underlying the July 2006 Option shall vest, (ii) the right to purchase an additional 5,555 shares underlying the March 2007 Option shall vest, and (iii) the vested (both the already vested and the accelerated vested) portions of the July 2006 and March 2007 Options shall be and remain fully  exercisable until, and shall have a termination date of, July 26, 2011.  The July 2006 and March 2007 Options shall otherwise remain unchanged and in full force and effect.

e.

July 2007 PSA:  As of the Termination Date, none of the shares constituting the PSA will have become unrestricted, or vested.  On the Termination Date, the PSA Shares (as defined in the July 2007 PSA) shall be forfeited and cancelled in accordance with the terms of the July 2007 PSA.

f.

No Other Compensation or Benefits:  Except as provided in this Agreement, Executive shall not be entitled to receive any other compensation or benefits of any sort from the Company, its affiliates, or their officers, directors, employees, shareholders, or subsidiaries for salary, vacation, bonuses, expenses, stock, stock options, health care continuation coverage or any other compensation or benefits.  

g.

Release:  Except as specifically excluded below, the Company, on behalf of itself and its officers, directors and subsidiaries, hereby release Executive from all liabilities, causes of action, charges, complaints, suits, claims, losses, damages, injuries, and expenses which Company has or had or may claim to have arising from or related to Executive’s employment with the Company or service as an officer or director of the Company.  Nothing contained herein shall be deemed a release of any rights, claim or relief based on (i) this Agreement or breach by the Executive of the obligations created or contemplated thereby, (ii) breach of Executive's duty of loyalty to the Company or its stockholders, or (iii) acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, to the extent, in the case of (ii) or (iii) above, such claim is based on facts or circumstances currently unknown to the Company.  The Company, on behalf of itself and its officers, directors and subsidiaries, represent that they are not presently aware of facts or circumstances giving rise to a claim for breach of Executive’s duty of loyalty to the Company or its shareholders or of any acts or omissions by the Executive not in good faith or which involve intentional misconduct or a knowing violation of law.

h. 

Released Actions .  The Company represents that neither it nor its officers, directors or subsidiaries have filed any complaints or charges or lawsuits against Executive with any governmental agency or any court, and have not assigned any cause of action to any third party and that the Company and its directors, officers and subsidiaries will not file any lawsuits against Executive or his heirs or successors for claims released pursuant to this Agreement at any time hereafter. 

2

   

  

3.

EXECUTIVE’S OBLIGATIONS, COVENANTS AND AGREEMENTS:

a.

Release:  Except as specifically excluded below, Executive (on behalf of himself and all of Executive’s heirs, assigns, legal representatives, successors in interest, or any person claiming through Executive) hereby releases the Company, and each of its divisions, subsidiaries, and parents, as well as their current and former employees, officers, directors,  successors, heirs, and predecessors in interest (collectively “Released Parties”) from all liabilities, causes of action, charges, complaints, suits, claims, losses, damages, injuries and expenses which Executive has or had or may claim to have arising from or related to Executive’s employment with the Company or service as an officer or director of the Company.  All matters released by Executive will be collectively referred to as "Released Actions."  Nothing contained herein shall be deemed a release of, and “Released Actions” shall not include, any rights, claim or relief based on or relating to (i) this Agreement (including, without limitation, any payment rights hereunder), the July 2006 and March 2007 Options (including, without limitation, vesting and/or post-termination exerciseability rights as modified by this Agreement), or breach by the Company of the obligations created or contemplated thereby, (ii) any claim-over or cross-claim that Executive may have if the Company and/or the Executive are sued by third parties or by shareholders for actions that do not relate directly to the Executive’s employment with the Company, (iii) the Company’s bylaws, certificate of incorporation, applicable law or any applicable insurance policy with respect to director and officer indemnification, advancement of legal fees and other costs, (iv) vested benefits under any pension plan or 401k Plan, or to roll over those monies into an Individual Retirement Account, and (v) any other rights or claims which cannot be released by private agreement. Executive acknowledges and warrants that he does not currently suffer from any work-related injuries, is fully recovered from any previous work-related injuries Executive may have sustained during his employment, has been properly provided any leave of absence because of Executive’s or a family member’s health condition and has not been subjected to any improper treatment, conduct or actions due to a request for, or taking, such leave.

b.

Knowing and Voluntary Discrimination and Labor Code Release:  Executive specifically intends to include, as a Released Action, any claims related to race, color, ancestry, national origin, sex, pregnancy, disability, medical condition, religion, age, sexual orientation or marital status discrimination in employment under Title VII of the 1964 Civil Rights Act, the Age Discrimination in Employment Act, the California Fair Employment and Housing Act, the California Labor Code, the Equal Pay Act, the Americans with Disabilities Act, or any other law, regulation or ordinance that may have arisen before the effective date of this Agreement, that he may personally have, claim or assert against Company, including but not limited to those arising from Executive’s employment at VBI.

c.

Indemnity, Pension and 401k Benefits and Other Exceptions:  Notwithstanding any other provision of this paragraph or of this Agreement, Executive shall continue to be fully eligible for and be fully covered by both the Director & Officer indemnification program and practice and the separate Director & Officer liability insurance coverages provided by the Company to officers and directors with respect to any claims brought against them in their capacity as an officer and/or director of the Company or an affiliate, all on a basis no less favorable to Executive than that which applies to any other senior officer or director. In other words, the Executive shall continue to be covered by the Directors’ and Officers’ liability insurance policies of VBI for the Executive’s actions while in the employ of VBI.  In addition, Executive shall continue to be covered by any other indemnity coverage expressly provided pursuant his Employment Agreement. Signing this Agreement will have no effect whatsoever on any rights Executive has or may have in the future to (i) indemnity and advancement of costs pursuant to the Company’s bylaws, certificate of incorporation, applicable law or any applicable insurance policy, (ii) reimbursement of business expenses incurred by Executive and eligible for reimbursement pursuant to Company policies governing same, (iii) collect vested benefits under any pension plan or 401k Plan, or to roll over those monies into an Individual Retirement Account, and (iv) any other claim which cannot be released by private agreement.  Any such pension and/or 401k benefits shall be payable (or not payable) or rolled over in exactly the same manner, on exactly the same terms, and under exactly the same conditions as though this Agreement had never been entered into.  Neither the Company nor the Executive has any right to recover reasonable attorneys’ fees (including with regard to the Executive pursuant to the Bylaws of VBI) in connection with an arbitration proceeding or an arbitration award to a prevailing party in a dispute arising pursuant solely to this Agreement.  This will not impair the Executive’s rights pursuant to the Bylaws of VBI, or pursuant to the law for indemnification from the Company if there are third party claims against the Executive and/or the Company arising out of actions of the Executive as an officer or director of the Company.    The Company acknowledges that Executive is not currently a guarantor of any obligations of the Company or any affiliate, and that the Company will indemnify Executive with respect to any claims to the contrary. 

3

   

d.

Assignment: Executive shall make no assignment of any Released Actions, and Executive represents that no such assignment has been made.

e.  

Waiver of Unknown Claims: Executive expressly waives and relinquishes any rights and benefits pursuant to California Civil Code Section 1542 with respect to the Released Actions herein, and do so understanding and acknowledging the significance and consequence of such specific waiver of Section 1542 that reads:

Section 1542.  [Certain claims not affected by general release.]  A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor.

f.

Released Actions: Executive represents that Executive has not filed any complaints or charges or lawsuits against VBI or any Released Party with any governmental agency or any court, and has not assigned any cause of action to any third party and that Executive will not file any lawsuits against VBI or any Released Party with respect to any Released Actions for claims arising prior to the date of this Agreement at any time hereafter; provided, however, this shall not limit Executive from commencing any action or arbitration proceeding for the  purpose of enforcing Executive’s rights under this Agreement.  Executive shall indemnify Released Parties against any loss or liability caused by any action or proceeding which is brought by or on behalf of Executive with respect to any Released Action.  

g.

Non-solicitation:  For a period of one (1) year after the Termination Date, Executive will not either individually or through or on behalf of any other person or entity solicit an employee of the Company to render services to any person, firm or corporation that is not a Released Party; provided that general advertisements not specifically directed at employees of the Company shall not constitute solicitation for purposes of this clause.  Nothing in this paragraph 3(h) shall preclude Executive from soliciting or hiring former employees of the Company provided that any such employee’s employment with the Company did not terminate by reason of solicitation by the Executive that would otherwise be prohibited hereunder.

h.

Return Of Company Property.   Upon the Termination Date, Executive shall return to the Company, unless expressly excluded herein, all of its property, equipment, credit cards, and non-public documents, records, customer lists, files and any other Company materials, including computerized or electronic information, that may be in Executive’s possession as of the Termination Date (the “Company Property”).  The Company Property shall be delivered to VBI at its offices in Encino, California.  Executive shall not retain any Company Property other than the laptop computer and broadband wireless card used by Executive during Executive’s employment at the Company, provided that any and all Company Property (excluding operating software) shall first have been removed from such laptop computer and delivered to the Company within 30 days.  It is agreed that Executive shall be given reasonable access to Company facilities to remove his personal items and property from his office, within two (2) weeks following the execution of this Agreement.

i.

Cooperation.  Executive agrees, for a period of three (3) years, upon reasonable notice and subject to his other business and personal commitments at the time, to cooperate in any litigation arising out of Executive’s work while employed by the Company by making himself available in Los Angeles for interviews, testimony preparation, discovery, truthful trial testimony, and any other matter reasonably necessary to protect Company's interest in any such litigation.  Executive agrees not to seek any additional compensation, other than reimbursement for (i) any direct expenses (e.g. airfare, hotel, ground transportation) and (ii) any legal fees and expenses reasonably incurred by Executive, in connection with such cooperation; provided, however, should more than sixteen (16) hours of cooperation be required of Executive with respect to any particular matter, or more than twenty-four hours total during said three-year period, the Company will also compensate Executive at the rate of $750.00 per day, paid in advance for each additional day or part of a day for which Company requires the additional cooperation of Executive.   Notwithstanding the above, nothing herein shall require Executive to waive any legal rights he may have. 

4

   

4.

PROMISES OF THE EXECUTIVE AND THE COMPANY:

a.

No Admission of Wrongdoing:  Executive and VBI agree that this Agreement is not to be construed as an admission, by either, of any wrongdoing, by either.

b.

Non-Disparagement:  Neither Executive nor the Company (or its officers or directors) shall make disparaging, critical or detrimental comments to any third-party concerning one another; provided that nothing in this paragraph 4(b) is intended nor shall be construed to prohibit the fulfillment any duty of disclosure or candor under applicable laws or regulations or from the provision of truthful and accurate testimony in connection with any legal or regulatory process.  The Company agrees that it shall, upon request for information concerning Executive by a third party, provide Executive’s dates of employment, the titles and positions Executive held and Executive’s final salary rate. 

c.

Full and Independent Knowledge:  Executive and VBI represent and agree that each has thoroughly discussed all aspects of this Agreement with their respective attorneys, that each has carefully read and fully understands all of the provisions of this Agreement, that each has been given a reasonable period of time to consider this Agreement, and that each is voluntarily entering into this Agreement.

d.      

Supplemental Documentation: Executive and VBI agree to cooperate fully and to execute any and all supplementary documents and to take all additional actions that are legally  necessary  to give full force to the basic terms of this Agreement and which are not inconsistent with its terms.

e.

Arbitration:  In the event of any controversy or dispute concerning Executive’s past, present or future employment with the Company or any future disputes concerning this Agreement or any alleged breach thereof, or any future dispute of any kind whatsoever between Executive and VBI (including any of its parent, subsidiary or related corporations, persons or entities and all of their former or current executives, employees or agents) relating to Executive’s period of employment with VBI at any time in the future, Executive and VBI agree that all such matters shall be resolved by binding arbitration before the Judicial Arbitration and Mediation Service ("JAMS").  Either party shall be entitled to commence the arbitration proceeding directly with JAMS, and, after appropriate notice to the other party, JAMS shall proceed to hear the matter even if any party so notified of the proceeding should refuse to participate; JAMS shall render its award in accordance with the evidence even in the absence of such party.  The arbitration charges will be shared equally by the parties up to an amount equal to the cost of a first appearance for a plaintiff filing a matter in state court; thereafter, any reasonable arbitration charge in excess of that cost shall be advanced by the Company.  The parties shall have the right to engage in the limited discovery required by law as determined by the neutral arbitrator.  The neutral arbitrator shall be authorized to award the full range of relief available in a civil action.  The arbitrator will also be required to issue a written decision setting forth essential findings and conclusions.  EXECUTIVE CONSENTS THAT ANY AND ALL DISPUTES SHALL BE SUBMITTED TO ARBITRATION AND HEREBY KNOWINGLY, VOLUNTARILY AND INTELLIGENTLY WAIVES ALL RIGHTS TO A JUDICIAL DETERMINATION OF THESE MATTERS, INCLUDING THE RIGHT TO A TRIAL BY JURY.    Nothing herein shall prevent either party from requesting injunctive relief in furtherance of arbitration from any court of competent jurisdiction, including relief necessary to enjoin violations of this Agreement or  Section 3(g)  and 4(b)  of this Agreement or Section 5 of the Employment Agreement.  

5.

CONSTRUCTION OF THIS AGREEMENT:

a.

Choice of Law:  This Agreement is to be construed pursuant to the substantive laws of the State of California, except for the preceding paragraph 4.e. Arbitration, which shall be governed by the Federal Arbitration Act.

b.

Invalid Agreement Provisions:  Should any provision of this Agreement become or be held to be legally unenforceable, no other provision of this Agreement shall be affected, and this Agreement shall be construed as if the Agreement had never included the unenforceable provision. 

5

   

c.

No Other Agreements:  This Agreement represents the full agreement between Executive and the Company, and this Agreement supersedes any other agreements, oral or written, express or implied, by the Company or any of its officers or employees; provided, however, (i) the obligations imposed upon Executive under Sections 5 and 6 of Executive’s Employment Agreement concerning Non-Disclosure of Confidential Information and Intellectual Property, and (ii) the July 2006 and March 2007 Options, as amended, and the July 2007 PSA, shall each remain in full force and effect.  In signing this Agreement, neither Executive nor the Company is relying upon any promise, representation of fact or law, or other inducement that is not expressed in this Agreement.  Both Executive and the Company represent and warrant that each is entering into this Agreement knowingly, voluntarily, and willingly, without any threat, duress or coercion.  This Agreement may be modified only by written agreement of Executive and the Company and may not be modified by any oral or implied agreement.

d.

Practices Inconsistent with this Agreement:  No provision of this Agreement shall be modified or construed by any practice that is inconsistent with such provision, and failure by either Executive or the Company to comply with any provision, or to require any of the others to comply with any provision, shall not, except as explicitly set forth herein, affect the rights of anyone to thereafter comply or require the others to comply.

e.

Construction of Agreement:  This Agreement is deemed to have been drafted jointly by Executive and the Company.  Any uncertainty or ambiguity shall not be construed for or against Executive or the Company based on attribution of drafting to either.

f.

Contents of Agreement:  This Agreement consists of seven pages.

g.

Notices:  All notices required pursuant to this Agreement shall be made by facsimile or email transmission, with a copy sent by overnight courier, as follows:

i)  If to Vertical Branding, Inc., to:

Nancy Duitch, CEO

Vertical Branding, Inc.

16000 Ventura Boulevard, Suite 301

Encino, CA  91426

Facsimile No. (818) 926-4885

Email address:  nancy@verticalbranding.com

ii)  If to Alan Gerson, to:

Mr. Alan Gerson

4256 Valley Meadow Road

Encino, CA  91362

Facsimile No.818 474 7318  

Email address:  agerson1130@gmail.com

                  -and-

William J. Dealy, Esq.

Dealy & Silberstein, LLP

225 Broadway, Suite 1405

New York, New York  10007-3001

Facsimile No. (212) 385-2117

Email address:  WJD@dealysilberstein.com

Notice will be effective on the date when notice is faxed or emailed and is sent by overnight courier.

6

   

6.

EFFECTIVE DATE OF THIS AGREEMENT:  

This Agreement shall be effective on the date signed by Executive  and the Company, and if those signatures are on different dates, the effective date of this Agreement shall be the latter of those dates.  

					
	Dated:

	 
	 
	By:

	Alan H. Gerson

	 
	 
	 
	 
	Alan H. Gerson

	 
	 
	 
	 
	 

	 
	 
	 
	Vertical Branding, Inc.

	 
	 
	 
	 
	 

	Dated:

	 
	 
	By:

	 

	 
	 
	 
	Title:

	 

7

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00139-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00139-of-00352.parquet"}]]