Document:

Exhibit 10.7

FORM OF
 SUPPLEMENTAL EXECUTIVE RETIREMENT AGREEMENT

          This Supplemental Executive Retirement Agreement (the “Agreement”) is dated this [date], by and between East Boston Savings Bank, a corporation organized and existing under the laws of the Commonwealth of Massachusetts (the “Bank”) and [Name] (the “Director”).  The Agreement is to become effective [date].

          In consideration of the mutual covenants herein contained, the parties hereby agree as follows:

1.       Definitions.

          (a)          “Actuarial Equivalent” means a benefit of equivalent value when computed on the basis of an interest rate of 6.5% and the 1983 Group Annuity Mortality Table, Unisex (50% male, 50% female), with no setback; provided, however, that for purposes of determining the value of a lump sum distribution, the following assumptions will be used:

	
  
 
  	
  
Interest:
  	
  
Applicable interest rate   under Section 417(e)(3) of the Code, as determined for the month of November   of the preceding year.
  
	
   
  	
  
 
  	
  
 
  
	
  
 
  	
  
Mortality:
  	
  
Applicable mortality table   under Section 417(e)(3) of the Code.
  

          (b)          “Accrued Benefit” means 50% of the Director’s Final Average Compensation if the Director has completed 120 Months of Service.  If the Director has not completed 120 Months of Service, his Accrued Benefit shall be determined by multiplying 50% of his Final Average Compensation by a fraction, the numerator of which shall be his actual Months of Service and the denominator of which shall be 120.

          (c)          “Code” means the Internal Revenue Code of 1986, as amended from time to time.

          (d)          “Final Average Compensation” means the average of the Director’s total annual fees from the Bank and Meridian Financial Services, Inc. (the “Holding Company”) and all their subsidiaries and affiliates, as reported on Form 1099, for the three calendar years during the Director’s service, whether or not consecutive, for which the Director’s annual fees were the highest.

          (e)          “Months of Service” means months (including partial months) of service as a Director of the Bank or the Holding Company.  The date the Director was first elected is [date].

          (f)          “Normal Form” means an unreduced life annuity with 50% spousal survivor annuity.

2.        Payments to Director.

          (a)          Retirement. If the Director continues to provide service to the Bank until his retirement at age 72, the Bank will pay to the Director annually, a benefit payable in the Normal Form in equal monthly installments commencing on the first day of the month next following the Director’s retirement, an amount equal to his Accrued Benefit.

          (b)          Death
of the Director.

	
  
 
  	
  
             (i)          If
the Director dies while in service, the Bank will pay to the Director’s
surviving spouse a benefit payable for her life assuming that the Director had
retired the day
 

	
  
 
  	
  
before his death and had elected to receive his Accrued Benefit
(as reduced by 2.5% each year and pro-rated for a partial year if the death
occurs before the Director’s 72nd birthday) in the form of a
joint and 100% spousal survivor annuity.  The Director may elect that
payment of the death benefit be made in a lump sum or a life annuity with 120
monthly benefits guaranteed on an Actuarially Equivalent basis.  If there
is no surviving spouse, the Bank shall pay the Director’s estate a lump sum
which is the Actuarial Equivalent value of the Accrued Benefit payable over ten
(10) years.
 
	
   
  	
  
 
  
	
  
 
  	
  
             (ii)         If
the Director dies following the commencement of the payment of benefits under
this Agreement, death benefits, if any, will be determined pursuant to the form
of benefit payment in effect at the time of death.
 

          (c)          Disability of the Director. If the Director becomes permanently and totally disabled, as determined by a physician mutually acceptable to the Bank and the Director, and is unable to continue to serve as a Director, the Director shall be entitled to receive the benefit that would be payable under Section 2(a) above if the Director had retired at age 72 with 120 Months of Service.  Payments shall commence on the first day of the month next following the Director’s cessation of services.

          (d)          Other
Termination. If the Director ceases to provide services to the Bank prior to
attaining age 72 for any reason, other than death or disability, the Bank will
pay to the Director annually, a benefit payable in the Normal Form in equal
monthly installments commencing on the first day of the month next following the
Director’s cessation of services, an amount equal to his Accrued Benefit,
reduced by 2.5% for each year (and pro-rated for a partial year) benefits
commence before the Director’s 72nd birthday.

          (e)          Optional Form of Payment. In lieu of the Normal Form provided by the foregoing provisions of this Paragraph 2, with the consent of the Bank, the Director may elect in advance an optional form of payment which is the Actuarial Equivalent of the Normal Form to which the Director is entitled, which optional form of payment may be a lump sum or a life annuity with 120 monthly benefits guaranteed. Such election shall be made within 30 days of the date of this Agreement.

3.       Nonassignable Rights.

          Except as otherwise provided by the Agreement, neither the Director nor his surviving spouse shall have any right to commute, sell, assign, transfer or otherwise convey the right to receive any payments hereunder, which payments and the right thereto are expressly declared to be nonassignable and nontransferable.

4.        General Obligation of the Bank.

          The benefits provided under the Agreement constitute a mere promise by the Bank to make payments in the future, and the rights of the Director hereunder shall be those of a general unsecured creditor of the Bank.  Nothing contained herein shall be construed to create a trust of any kind or to render the Bank a fiduciary with respect to the Director.  The Bank shall not be required to maintain any fund or segregate any amount or in any other way currently fund the future payment of any benefit provided under the Agreement, and nothing contained herein shall be construed to give the Director or any other person any right to any specific assets of the Bank or of any other person.

5.        Governing Law.

          The Agreement shall be construed under and governed by the laws of the Commonwealth of Massachusetts.

2

          EXECUTED under seal as of the day and year first above written, in the case of the Bank by its duly authorized officer.

	
   
  	
  
 
  	
  
 
  	
  
EAST BOSTON SAVINGS BANK
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
ATTEST:
  	
  
 
  	
  
 
  	
  
BY:
  	
  
 
  
	
  
 
  	
  

  	
  
 
  	
  
 
  	
  

  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  	
  
    [Name]
  
	
   
  	
  
 
  	
  
 
  	
  
 
  	
  
    [Title]
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
WITNESS:
  	
  
 
  	
  
 
  	
  
BY:
  	
  
 
  
	
  
 
  	
  

  	
  
 
  	
  
 
  	
  

  
	
   
  	
  
 
  	
  
 
  	
  
 
  	
  
    [Name]
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  	
  
    Director
  

          This Agreement is joined in by Meridian Financial Services, Inc. for purposes of fulfilling the obligations of the Bank under Paragraph 2 hereof.

	
  
 
  	
  
MERIDIAN FINANCIAL   SERVICES, INC.
  
	
  
 
  	
  
 
  
	
  
 
  	
  
 
  
	
  
 
  	
  
BY:
  	
  
 
  
	
   
  	
  
 
  	
  

  
	
  
 
  	
  
 
  	
  
    [Name]
  
	
  
 
  	
  
 
  	
  
    [Title]
  

3

ELECTION FORM

1.       Retirement Benefits

          I hereby elect to receive my benefits under the Supplemental Executive Retirement Agreement dated [date] (the “SERP”) as follows: (check one)

	
  
 
  	
  
o
  	
  
Lump sum payable: (check   one)
  
	
   
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
o
  	
  
within 30 days of   retirement.
  
	
   
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
o
  	
  
in January of the year following   retirement.
  
	
   
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
o
  	
  
Life annuity with 120   monthly benefits guaranteed.
  

2.       Death Benefits

          If my death should occur while serving as Director, I direct that any benefit payable under the SERP to my spouse be made as follows:

	
  
 
  	
  
o
  	
  
Lump sum payable: (check   one)
  
	
   
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
o
  	
  
within 30 days of death.
  
	
   
  	
  
 
  	
  
 
  	
  
 
  
	
   
  	
  
 
  	
  
o
  	
  
in January of the year   following death.
  
	
   
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
o
  	
  
Life annuity with 120   monthly benefits guaranteed.
  

3.       Acknowledgement

          I acknowledge that my above elections are irrevocable.  I further understand and acknowledge that if I do not make the election provided in Paragraph 1 above, my benefits will be paid to me in a form of a joint and 50% spousal survivor annuity, and if I do not make the election provided in Paragraph 2 above, any death benefits payable to my spouse will be made in the form of the survivor portion of a joint and 100% spousal survivor annuity (i.e., an annuity for her life).

          Executed this [date].

	
   
  	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
 
  	

  
  
	
  
 
  	
  
 
  	
  
 
  	
  
[Name]
  	
  
 
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  AGREED TO:
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
EAST BOSTON SAVINGS BANK
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
By:
  	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
   
  	
  

  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
    [Name]
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
    [Title]
  	
  
 
  	
  
 
  	
  
 
  

FIRST AMENDMENT
 TO
 SUPPLEMENTAL EXECUTIVE RETIREMENT AGREEMENT

A.       The
Supplemental Executive Retirement Agreement (the “Agreement”) dated
[date], by and between East Boston Savings Bank, a corporation organized and
existing under the laws of the Commonwealth of Massachusetts (the
“Bank”) and [Name] (the “Director”) is hereby amended as
follows:

	
  
            1.       Section 1 is hereby   amended by adding the following subsection (g) at the end thereof:
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
“(g)”    ‘Normal   Retirement Date’ shall mean December 31 of the calendar year in which the   Director attains age 72.”
  
	
  
 
  	
  
 
  	
  
 
  
	
  
            2.       Section
2(a) is hereby amended by deleting the phrase “retirement at age 72”
and substituting therefor the phrase “retirement at his Normal Retirement
Date.”
 
	
  
 
  	
  
 
  	
  
 
  
	
  
            3.       Section   2(b) is hereby amended by deleting the phrase “the Director’s 72nd   birthday” in the first sentence thereof and substituting therefor the phrase   “the Director’s Normal Retirement Date.”
  
	
   
  	
  
 
  	
  
 
  
	
  
            4.       Section   2(c) is hereby amended by deleting the phrase “the Director had retired at   age 72” and substituting therefor the phrase “the Director had retired at his   Normal Retirement Date.”
  
	
  
 
  	
  
 
  	
  
 
  
	
  
            5.       Section   2(d) is hereby amended by deleting said subsection in its entirety and   substituting the following in lieu thereof:
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
“(d)     Other   Termination. If the Director ceases to provide services to the Bank prior   to his Normal Retirement Date for any reason, other than death or disability,   the Bank will pay to the Director annually a benefit payable in the Normal   Form in equal monthly installments commencing on the first day of the month   next following the Director’s cessation of services, an amount equal to his   Accrued Benefit, reduced by 2.5 percent for each year (and pro-rated for a   partial year) benefits commence before the Director’s Normal Retirement   Date.”
  

B.       This First Amendment shall be effective as of [date].

C.       Except as amended herein, the Agreement is hereby confirmed in all other respects. 

EXECUTED under seal as of the day and year first above written, in the case of the Bank by its duly authorized officer.

	
  
 
  	
  
 
  	
  
 
  	
  
EAST BOSTON SAVINGS BANK
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
ATTEST:
  	
  
 
  	
  
 
  	
  
BY:
  	
  
 
  
	
   
  	
  

  	
  
 
  	
  
 
  	
  

  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  	
  
    [Name]
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  	
  
    [Title]
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  WITNESS:
  	
   
  	
   
  	
  BY:
  	
   
  
	
   
  	
  

  	
   
  	
   
  	
  

  
	
   
  	
   
  	
   
  	
   
  	
  [Name]
  
	
   
  	
   
  	
   
  	
   
  	
  DirectorSeparation Agreement and General Release of Claims

    
      
        
          Exhibit
            10.1

          

            SEPARATION
              AGREEMENT AND GENERAL RELEASE OF CLAIMS

             

            This
              Separation Agreement and General Release of Claims ("Agreement") is
              entered into
              by and between Marc H. Nussbaum ("Executive"), and Lantronix, Inc.,
              a Delaware
              corporation ("Company"), and is intended by the parties hereto to resolve
              and
              conclude any and all issues arising out of Executive's employment or
              the
              termination of such employment.

          

           

          R
            E C
            I T A L S :

           

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

           

          WHEREAS,
            the parties now mutually desire to terminate their employment relationship
            on
            the terms set forth herein.

           

          A
            G R
            E E M E N T :

           

          NOW,
            THEREFORE, in consideration of the mutual covenants and agreements contained
            herein, the recitals set forth above, which are incorporated herein by
            reference, and other good and valuable consideration, the receipt and
            sufficiency of which is hereby acknowledged, and intending to be legally
            bound,
            the parties hereto agree as follows:

           

          1.  Separation
            of Employment.
            Executive's employment shall end effective September 24, 2007 (the "Separation
            Date"). On the Separation Date, Executive will be paid his final paycheck,
            including any accrued but unused vacation through the Separation Date.
            In
            addition, Executive will be reimbursed for all outstanding customary
            business
            expenses incurred through the Separation Date. Executive shall submit
            a business
            expense report to the Company within sixty (60) days of the Separation
            Date and
            the Company will issue a reimbursement check within seven (7) business
            days of
            receipt thereof. In the event that after the 60-day period, Executive
            discovers
            any additional charges on Executive's American Express card that have
            been made
            by any employee, director or agent of the Company, on the Company's behalf,
            and
            that have not previously been reimbursed by the Company, Executive shall
            promptly submit a request for reimbursement to the Company, which shall
            be
            approved and paid to Executive within seven (7) business days of receipt
            thereof.

           

          2.  Severance
            Payments.
            Provided the occurrence of the "Effective Date" of this Agreement (as
            defined
            below in Paragraph 16), and Executive's compliance with the terms and
            conditions
            set forth in the Agreement, Executive shall be eligible for the following:
            

           

          2.1.  Separation
            Pay.
            Payment
            of $435,000, less legally required withholdings and deductions ("Separation
            Pay"). The Separation Pay shall be paid to Executive in equal installments
            on
            the Company's normal payroll dates during the period between the Effective
            Date
            and September 15, 2008. The Company, in its sole discretion, may accelerate
            any
            installment payment of the Separation Pay or pay it (or a portion of
            it) in a
            lump sum; 

           

          2.2.  COBRA
            Pay.
            Provided Executive timely elects COBRA health-care continuation coverage,
            and
            notifies Company of same (including the amount of the monthly COBRA premium),
            the Company will pay the cost of Executive's COBRA premiums through the
            first to
            occur of (i) eighteen (18) months following the Separation Date, and
            (ii)
            Executive's eligibility for health insurance coverage pursuant to another
            employer's plan, in the same amount as if Executive had remained an active
            employee of the Company. All amounts paid on Executive's behalf towards
            COBRA
            premiums will be reported to Executive as income on a Form 1099 and Executive
            agrees to be responsible for the payment of Executive's income taxes
            based on
            the receipt thereof. Executive agrees to notify the Company within ten
            (10) days
            of Executive's receipt of health-care insurance coverage from another
            employer
            which would trigger (ii) immediately above;

           

          
            
              
              

            

            
              1

              
                

              

            

            
              
              

            

             

          

          2.3.  Car
            Payment.
            Payment
            of $13,500, less legally required withholdings and deductions, representing
            the
            amount the Company would have paid on behalf of Executive for executive
            automobile benefits had Executive remained employed for the eighteen
            (18) month
            period following the Separation Date ("Car Payment"). The Car Payment
            shall be
            paid to Executive in equal installments on the Company's normal payroll
            dates
            during the period between the Effective Date and September 15, 2008.
            The
            Company, in its sole discretion, may accelerate any installment payment
            of the
            Car Payment or pay it (or a portion of it) in a lump sum;

           

          2.4.  Options.
            The
            right to exercise any and all stock options that were granted to Executive
            and
            vested as of the Separation Date. Subject to the provisions of the Company's
            stock option plan(s) and the agreements pursuant to which the options
            were
            granted (each of which is incorporated herein by reference), Executive
            shall
            have until the earlier of the following three dates to exercise each
            of
            Executive's vested options: (i) twenty-four (24) months after the Separation
            Date; (ii) for each option, the latest date on which such option could
            have
            expired by its original terms under any circumstances; or (iii) for each
            option,
            ten (10) years after the original grant date of such option. Notwithstanding
            anything to contrary contained in this Agreement or the Company's stock
            option
            plan(s) and the agreements pursuant to which the options were granted,
            the
            parties hereto agree that Executive shall cease to be a "Service Provider"
            (as
            defined in the Company's 2000 Stock Plan (the "Plan")) as of the Separation
            Date
            and all of Executive's unvested stock options as of the Separation Date
            shall
            automatically terminate and revert to the Plan. Attached hereto as Exhibit
            "A"
            is a
            complete schedule of Executive's vested stock options under all Company
            stock
            option plans as of the date of this Agreement; and

           

          2.5.  Bonus.
            A
            pro-rated portion of any bonus, less legally required withholdings and
            deductions, that Executive would have been entitled to, if any, under
            the Team
            Incentive Plan for fiscal year July 1, 2007, through June 30, 2008, had
            Executive remained employed through the time of payout ("Bonus Pay").
            The
            pro-rata calculation shall be based on the portion of that fiscal year
            period
            that Executive was actively employed by the Company. The Bonus Pay shall
            be paid
            to Executive in accordance with the Company's regular bonus payment schedule,
            but in no event later than September 15, 2008.

           

          3.  Health
            Insurance Benefits.
            Executive's health insurance benefits will continue through September
            30, 2007,
            after which it will be necessary for Executive to convert or continue
            such plans
            and coverage at his sole option, cost and expense, except as specifically
            provided in Paragraph 2.2 above. The Company, or its third party administrator,
            will provide Executive with the notice and election forms required by
            the
            Consolidated Omnibus Budget Reconciliation Act of 1985, as amended, and
            any
            applicable state law.

        

         

        
          
            
            

          

          
            2

            
              

            

          

          
            
            

          

           

        

        
          4.  The
            Company's Obligations Under This Agreement.
            The
            benefits set forth in Paragraphs 1 and 2 constitute the sole obligations
            of the
            Company to Executive under this Agreement and are in lieu of any damages
            or
            other compensation that Executive may claim under other Company policies
            or
            otherwise, except for Executive's base salary which has been earned up
            to the
            Separation Date, compensation for any accrued and unused vacation up
            to the
            Separation Date, reimbursement for business expenses incurred up to the
            Separation Date (in accordance with the customary policies of the Company),
            and
            any benefits that the Company is required to provide to Executive after
            the
            Separation Date under COBRA or pursuant to any ERISA plan(s) of the Company.
            The
            benefits provided in this Agreement are in substitution for any severance
            or
            termination benefits otherwise available under Company policies of general
            application. The benefits provided in this Agreement shall not be reduced
            by any
            compensation or benefits received by Executive from any subsequent employer
            or
            any other third party.

           

          
            5.  Confidential
              Information and Non-Solicitation of Employees.
              

             

            5.1.  Confidentiality
              Obligations.
              Executive acknowledges and agrees that he shall continue to be bound
              by and
              comply with each and every term and condition of the Company's Employment,
              Confidential Information and Invention Assignment Agreement ("Confidentiality
              Agreement"), which is specifically incorporated herein by reference,
              and any
              other proprietary or confidentiality agreement(s) between Executive
              and the
              Company. In the event any provision of the Confidentiality Agreement
              conflicts
              with any provision in this Agreement, the latter shall control. Further,
              Executive shall have no obligation to complete Exhibit
              "C"
              to the
              Confidentiality Agreement or, following the Separation Date, to further
              comply
              with the Conflict of Interest Guidelines identified in Exhibit
              "D"
              thereto.

             

            5.2.  Non-Solicitation
              Obligations.
              Executive further agrees that for a period of one (1) year following
              the
              Separation Date, he will not, either directly or indirectly, or either
              on his
              own behalf or on behalf of any other person, recruit or solicit for
              hire any
              individual (regularly scheduled for 40 hours or more a week) who is
              then
              employed by the Company.

             

            5.3.  Restrictions
              Reasonable.
              Executive acknowledges and agrees that the restrictions contained in
              this
              Paragraph 5 are reasonable and appropriate. Executive further acknowledges
              and
              agrees that the restrictions contained in this Paragraph 5 will not
              preclude him
              from engaging in any trade, business or profession that he is qualified
              to
              engage in.

             

            
              6.  Release
                of Claims.

               

              6.1.  General
                Release of All
                Known and Unknown Claims.
                Except
                for the Company's obligations as provided in this Agreement, Executive
                hereby
                forever waives, releases, acquits, relieves and discharges the Company,
                and each
                of its parent corporations, subsidiaries, divisions, or affiliated
                corporations,
                organizations or entities and each and all of their predecessors,
                successors,
                heirs, assigns, officers, employees, directors, shareholders, owners,
                representatives, consultants, insurers, insurance companies, attorneys
                and
                agents, whether previously or hereinafter affiliated in any manner
                (collectively, the "Released Parties"), from any and all claims,
                rights,
                actions, complaints, demands, causes of action, charges of discrimination,
                retaliation or harassment, wage claims, whistleblower claims, obligations,
                promises, contracts, agreements, controversies, suits, debts, expenses,
                damages,
                attorneys' fees, costs and liabilities of any nature whatsoever,
                whether or not
                now known, suspected, claimed, matured or unmatured, which Executive
                ever had,
                now has, or may claim 

               

              
                
                  
                  

                

                
                  3

                  
                    

                  

                

                
                  
                  

                

              

               

              to
                have
                from the beginning
                of time to the moment he signs this Agreement against the Released
                Parties
                (whether directly or indirectly), or any of them, by reason of any
                act, event or
                omission concerning any matter, cause or thing, including, without
                limiting the
                generality of the foregoing, any claims related to or arising out
                of
                (i) Executive's employment with any of the Released Parties or the
                cessation of that employment; (ii) any common law or statutory torts;
                (iii) any
                federal, state or governmental constitution, statute, regulation
                or ordinance,
                including, without limitation, Title VII of the Civil Rights Act
                of 1964, the
                California Constitution, the California Fair Employment and Housing
                Act, the
                California Labor Code, the California Insurance Code, the California
                Business
                and Professions Code, the California Family Rights Act, the Family
                and Medical
                Leave Act, the Age Discrimination in Employment Act, the Employee
                Retirement
                Income Security Act, the Equal Pay Act, the Americans With Disabilities
                Act and
                the Sarbanes-Oxley Act of 2002; and/or (iv) any agreement or covenant, oral
                or written, express or implied, between Executive and any of the
                Released
                Parties; provided, however, that the foregoing release is not intended
                to, and
                does not, release the Released Parties from any legal obligation
                they may
                otherwise have to indemnify Executive against third party claims
                that may be
                filed against him for conduct undertaken by him during the course
                and scope of
                his employment with the Company or to any rights which, as a matter
                of law,
                cannot be waived. Notwithstanding the foregoing, this release is
                not intended in
                any way to waive any rights Executive may have against the Company
                solely in his
                capacity as a shareholder of the Company; 

               

              6.2.  Waiver
                of Unknown Claims.
                Executive expressly agrees to waive and relinquish all rights and
                benefits he
                may have under Section 1542 of the California Civil Code which reads
                as
                follows:

              
                

                  "§
                    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."

                

                
                   

                  6.3.  Agreement
                    Effective Notwithstanding Subsequent Discovery of Different
                    Facts.
                    The
                    parties hereto acknowledge that they may discover hereafter facts
                    different from
                    or in addition to those they now know or believe to be true with
                    respect to the
                    claims, demands, causes of action, obligations, damages and liabilities
                    of any
                    nature whatsoever that are the subject of the release set forth
                    in Paragraph 6
                    of this Agreement, and they each expressly agree to assume the
                    risk of the
                    possible discovery of additional or different facts, and agree
                    that this
                    Agreement shall be and remain effective in all respects regardless
                    of such
                    additional or different facts.

                  
                     

                    6.4.  No
                      Assignment.
                      Executive represents and warrants that he has made no assignment,
                      and will make
                      no assignment, of any claim, chose in action, right of action
                      or any right of
                      any kind whatsoever, embodied in any of the claims and allegations
                      referred to
                      herein, and that no other person or entity of any kind had
                      or has any interest
                      in any of the demands, obligations, actions, causes of action,
                      debts,
                      liabilities, rights, contracts, damages, attorneys' fees, costs,
                      expenses,
                      losses or claims referred to herein. 

                     

                    
                      
                        
                        

                      

                      
                        4

                        
                          

                        

                      

                      
                        
                        

                      

                       

                    

                    7.  Withholding
                      of Taxes; Tax Reporting.
                      The
                      Company may withhold from any amounts payable under this Agreement
                      all such
                      federal, state, city and other taxes, and may file with appropriate
                      governmental
                      authorities all such information, returns or other reports
                      with respect to the
                      tax consequences of any amounts payable under this Agreement,
                      as may, in its
                      judgment, be required by law.

                     

                    8.  Internal
                      Revenue Code Section 409A.
                      This
                      Agreement is intended to be exempt to the extent possible from
                      the requirements
                      of Internal Revenue Code Section 409A, including current and
                      future guidance and
                      regulations interpreting such provisions. To the extent that
                      any provision of
                      this Agreement fails to satisfy a requirement for such an exemption,
                      the
                      provision shall automatically be modified in a manner that,
                      in the good-faith
                      opinion of the Company, brings the provisions into compliance
                      with such
                      requirement while preserving as closely as possible the original
                      intent of the
                      provision and this Agreement. If it is determined by the Company
                      that any
                      payment under this Agreement is subject to the requirements
                      of Code Section 409A
                      notwithstanding the preceding sentences, then the provisions
                      of the Agreement
                      shall be automatically modified in such manner as brings the
                      Agreement into
                      compliance with such requirements. In particular, and without
                      limiting the
                      preceding sentence, while any stock of the Company is or is
                      treated as publicly
                      traded and Executive is a "specified employee" under Code Section
                      409A(a)(2)(B)(i), then any payment under this Agreement that
                      is treated as
                      deferred compensation under Code Section 409A shall be delayed
                      until the date
                      which is six months after the date of separation from service
                      (without interest
                      or earnings). 

                     

                    9.  Assignment
                      of Agreement.
                      Executive may not assign this Agreement. The Company shall
                      be entitled to assign
                      this Agreement to any successor in interest to its business.
                      The Company will
                      obtain an assumption of this Agreement by any successor or
                      assign to all or
                      substantially all of the business and/or assets of the Company
                      (whether direct
                      or indirect, by acquisition, merger, consolidation or otherwise),
                      but the
                      failure to obtain such assumption shall not prevent or delay
                      such acquisition,
                      merger, consolidation or other transaction or relieve the Company
                      of its
                      obligations under the Agreement. This Agreement shall bind
                      and inure to the
                      benefit of the Company's successors and assigns, as well as
                      Executive's heirs,
                      executors, administrators, and legal representatives.

                     

                    10.  Severability.
                      Should
                      any portion, word, clause, phrase, sentence or paragraph of
                      this Agreement be
                      declared void or unenforceable, such portion shall be considered
                      independent and
                      severable from the remainder, the validity of which shall remain
                      unaffected.

                     

                    11.  No
                      Waiver.
                      Failure
                      to insist on compliance with any term, covenant or condition
                      contained in this
                      Agreement shall not be deemed a waiver of that term, covenant
                      or condition, nor
                      shall any waiver or relinquishment of any right or power contained
                      in this
                      Agreement at any one time or more times be deemed a waiver
                      or relinquishment of
                      any right or power at any other time or times.

                     

                    12.  Mutual
                      Arbitration Agreement.
                      To the
                      fullest extent allowed by law, any controversy, claim or dispute
                      between
                      Executive and the Company (and/or any of its affiliated, subsidiary,
                      or related
                      entities, owners, directors, officers, employees, volunteers
                      or agents) relating
                      to or arising out of this Agreement or Executive's employment
                      (or the cessation
                      thereof), will be submitted to final and binding arbitration
                      in Orange County,
                      California, for determination in accordance with the American
                      Arbitration
                      Association's ("AAA") Employment Arbitration Rules as the exclusive
                      remedy for
                      such controversy, claim or dispute. In any such arbitration,
                      the parties may
                      conduct discovery to the same extent as would be

                     

                    
                      
                        
                        

                      

                      
                        5

                        
                          

                        

                      

                      
                        
                        

                      

                    

                     

                     permitted
                      in a court of law. The arbitrator shall issue a reasoned, written
                      decision, and
                      shall have full authority to award all remedies which would
                      be available in
                      court. The Company shall pay the arbitrator's fees and any
                      AAA administrative
                      expenses. Any judgment upon the award rendered by the arbitrator
                      may be entered
                      in any court having jurisdiction thereof. Possible disputes
                      covered by the above
                      include (but are not limited to) unpaid wages, breach of contract
                      (including
                      this Agreement), torts, violation of public policy, discrimination,
                      harassment,
                      or any other employment-related claims under laws including,
                      but not limited to,
                      Title VII of the Civil Rights Act of 1964, the Americans With
                      Disabilities Act,
                      the California Labor Code, the California Fair Employment and
                      Housing Act, the
                      Age Discrimination in Employment Act, the Americans with Disabilities
                      Act, and
                      any other statutes or laws relating to Executive's relationship
                      with the Company
                      regardless of whether such dispute is initiated by Executive
                      or the Company.
                      Thus, this bilateral arbitration agreement fully applies to
                      any and all claims
                      that the Company may have against Executive, including but
                      not limited to claims
                      for misappropriation of Company property, disclosure of proprietary
                      information
                      or trade secrets, interference with contracts, trade libel,
                      gross negligence, or
                      any other claim for alleged wrongful conduct or breach of the
                      duty of loyalty.
                      However, claims for workers' compensation benefits, unemployment
                      insurance and
                      those arising under the National Labor Relations Act (or any
                      other claims where
                      mandatory arbitration is prohibited by law) are not covered
                      by this arbitration
                      agreement, and such claims may be presented to the appropriate
                      court or
                      government agency. BY AGREEING TO THIS BINDING ARBITRATION
                      PROVISION, BOTH
                      EXECUTIVE AND THE COMPANY GIVE UP ALL RIGHTS TO TRIAL BY JURY.
                      This arbitration
                      agreement is to be construed as broadly as is permissible under
                      applicable
                      law.

                     

                    13.  Counterparts.
                      This
                      Agreement may be executed in one or more counterparts and the
                      counterparts
                      signed in the aggregate shall constitute a single, original
                      instrument.

                     

                    14.  Entire
                      Agreement.
                      This
                      Agreement, together with the documents referenced herein, contains
                      the entire
                      integrated agreement of the parties hereto with respect to
                      the subject matter
                      hereof and it supersedes any and all other agreements, either
                      oral or in
                      writing, between the parties hereto with respect to the subject
                      matter hereof.
                      Each party to this Agreement acknowledges that no representations,
                      inducements,
                      promises or agreements, written, oral or otherwise, have been
                      made by any party,
                      or anyone acting on behalf of any party, which are not embodied
                      herein, and that
                      no other agreement, statement or promise not contained in this
                      Agreement shall
                      be valid or binding, including but not limited to the parties'
                      Severance
                      Agreement dated May 15, 2007. This Agreement may not be modified
                      or amended by
                      oral agreement, but only by an agreement in writing signed
                      by the Chairman of
                      the Board of the Company and Executive.

                     

                    15.  Attorneys'
                      Fees.
                      In the
                      event of any arbitration arising out of this Agreement, the
                      prevailing party
                      shall be entitled to recover from the non-prevailing party
                      its costs and
                      expenses (including reasonable attorneys' fees) incurred in
                      such
                      arbitration.

                     

                    
                      
                        
                        

                      

                      
                        6

                        
                          

                        

                      

                      
                        
                        

                      

                    

                     

                    16.  Older
                      Workers Benefit Protection Act Provisions.
                      The
                      Company advises Executive as follows: (a) this Agreement does not waive
                      rights or claims that may arise after Executive executes it;
                      (b) Executive
                      has twenty-one (21) days to consider this Agreement and whether
                      he will enter
                      into it, although he may sign it sooner than that if he so
                      desires;
                      (c) Executive may revoke this Agreement at any time within seven
                      (7) days
                      after executing it; and (d) Executive should consult an attorney prior to
                      executing this Agreement. This Agreement shall not become effective
                      or
                      enforceable until after the seven (7)-day revocation period
                      has expired, without
                      revocation by Executive ("Effective Date").

                     

                    IN
                      WITNESS WHEREOF, the undersigned have executed this Separation
                      Agreement and
                      General Release of Claims on the dates set forth hereinafter.

                     

                    
                      	Dated:
                              September
                              24, 2007 	/s/
                              Marc H.
                              Nussbaum                                      
                                     
	 	MARC
                              H. NUSSBAUM 
	 	 
	 	LANTRONIX,
                              INC. 
	 	 
	
                              Dated:
                                September
                                24, 2007 

                            	
                              By:
                                /s/
                                H.K.
                                Desai                                                                   
                                 

                            
	 	H.K.
                              DESAI 
	 	
                              Chairman
                                of the Board of Directors 

                            

                    

                     

                     

                    7

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