Document:

ex10-1.htm

Exhibit 10.1

 

 

THIS NOTE, AND THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION OF THIS NOTE (THE “SECURITIES”) HAVE BEEN ACQUIRED FOR INVESTMENT PURPOSES ONLY AND MAY NOT BE TRANSFERRED UNTIL (i) A REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT” OR THE “SECURITIES ACT”) SHALL HAVE BECOME EFFECTIVE WITH RESPECT THERETO OR (ii) RECEIPT BY THE COMPANY OF AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY TO THE EFFECT THAT REGISTRATION UNDER THE ACT IS NOT REQUIRED IN CONNECTION WITH SUCH PROPOSED TRANSFER NOR IS IN VIOLATION OF ANY APPLICABLE STATE SECURITIES LAWS. THIS LEGEND SHALL BE ENDORSED UPON ANY NOTE ISSUED IN EXCHANGE FOR THIS NOTE AND ANY SECURITIES ISSUABLE UPON CONVERSION OF THIS NOTE (EXCEPT AS OTHERWISE PROVIDED BELOW).

 

FORM OF CONVERTIBLE PROMISSORY NOTE

 

	
$200,000.00

	
January 4, 2016 to be Effective December 31, 2015 

	
Note # 4

	  

 

FOR VALUE RECEIVED, Lucas Energy, Inc., a Nevada corporation (the “Company”), hereby promises to pay to the order of Silver Star Oil Company, and/or permitted assigns (the “Holder”), the aggregate principal amount of Two Hundred Thousand and 00/100 Dollars ($200,000.00) (“Principal”), together with interest on the unpaid principal amount hereof, upon the terms and conditions hereinafter set forth.

 

	
1.

	
Note Amount. This Convertible Promissory Note (this “Note”, “Promissory Note” or “Agreement”) evidences amounts payable by the Company to the Holder in connection with an Advance made pursuant to that certain Non-Revolving Line of Credit Agreement dated on or around August 30, 2015, but effective August 28, 2015, by and between the Company and the Holder (the “Line of Credit”). Certain capitalized terms used herein, but not otherwise defined shall have the meanings given to such terms in the Line of Credit and this Note shall be subject in all cases to the terms and conditions of the Line of Credit.

	
 

	
 

	
 

	
2.

	
Payment Terms. The Company promises to pay to Holder the balance of Principal, together with accrued and unpaid interest (which shall accrue until the Maturity Date) on October 1, 2016 (the “Maturity Date”), unless this Note is earlier prepaid as herein provided or earlier converted into Common Stock (as hereinafter defined) of the Company pursuant to Sections 4 hereof. All payments hereunder shall be made in lawful money of the United States of America. Payment shall be credited first to the accrued interest then due and payable and the remainder to Principal.

	
 

	
 

	
 

	
3.

	
Interest. Interest on the outstanding portion of Principal of this Note shall accrue at a rate of six percent (6%) per annum. All past-due principal and interest (which failure to pay such amounts shall be defined herein as an “Event of Default”) shall bear interest at the rate of fifteen percent (15%) per annum until paid in full (the “Default Rate”). All computations of interest shall be made on the basis of a 360-day year for actual days elapsed.

 

 

 

Secured Convertible Promissory Note

Note #4

Page 1 of 10

  

 

	
 

	
a.

	
Notwithstanding any provision in this Note, the total liability for payments of interest and payments in the nature of interest, including all charges, fees, exactions, or other sums which may at any time be deemed to be interest, shall not exceed the limit imposed by the usury laws of the State of Texas or the applicable laws of the United States of America, whichever shall be higher (the “Maximum Rate”).

	
 

	
b.

	
In the event the total liability for payments of interest and payments in the nature of interest, including, without limitation, all charges, fees, exactions or other sums which may at any time be deemed to be interest, which for any month or other interest payment period exceeds the Maximum Rate, all sums in excess of those lawfully collectible as interest for the period in question (and without further agreement or notice by, among or to the Holder the undersigned) shall be applied to the reduction of the principal balance, with the same force and effect as though the undersigned had specifically designated such excess sums to be so applied to the reduction of the principal balance and the Holder had agreed to accept such sums as a premium-free prepayment of principal; provided, however, that the Holder may, at any time and from time to time, elect, by notice in writing to the undersigned, to waive, reduce or limit the collection of any sums in excess of those lawfully collectible as interest rather than accept such sums as a prepayment of the principal balance. The undersigned does not intend or expect to pay nor does the Holder intend or expect to charge, accept or collect any interest under this Note greater than the Maximum Rate.

 

	
 

	
c.

	
If any payment of principal or interest on this Note shall become due on a Saturday, Sunday or any other day on which national banks are not open for business, such payment shall be made on the next succeeding Business Day. “Business Day” means a day other than (i) a Saturday, (ii) a Sunday or (iii) a day on which commercial banks in Houston, Texas, are authorized or required to be closed for business.

 

	
4.

	
Holder’s Option to Convert this Note.

	
 

 

	
 

	
a.

	
At any time prior to the payment in full by the Company of this Note, the Holder shall have the option to convert the unpaid balance (Principal and accrued and unpaid interest, in each case subject to Section 4(l) and 4(m)) on this Note (or any portion thereof) into shares of Common Stock (the “Shares” and the “Common Stock”) of the Company (the “Conversion Option”) at the Conversion Price (each a “Conversion”). The “Conversion Price” shall equal $1.50 per Share;

	
 

	
 

	
 

 

 

 

 

Secured Convertible Promissory Note

Note #4

Page 2 of 10

  

 

 

 

	
 

	
b.

	
In order to exercise this Conversion Option, the Holder shall surrender this Promissory Note to the Company, accompanied by written notice of its intentions to exercise this Conversion Option, which notice shall set forth the amount of this Promissory Note to be converted, and the Shares due, which shall be in the form of Exhibit A, attached hereto (“Notice of Conversion”). The date that the Company receives the Notice of Conversion shall be defined as the “Conversion Date.” Within ten (10) Business Days of the Company’s receipt of the Notice of Conversion and this Note, the Company shall deliver or cause to be delivered to the Holder, written confirmation that the Shares have been issued in the name of the Holder (the “Share Delivery Deadline”). Notwithstanding anything to the contrary set forth in this Section 4, following conversion of any portion of this Note in accordance with the terms hereof, the Holder shall not be required to physically surrender this Note to the Company unless (A) the full amount of the Note is being converted (in which event this Note shall be delivered to the Company following conversion thereof) or (B) the Holder has provided the Company with prior written notice (which notice may be included in a Notice of Conversion) requesting reissuance of this Note upon physical surrender of this Note. The Holder and the Company shall maintain records showing the principal and interest converted and/or paid and/or adjusted (as the case may be) and the dates of such conversions and/or payments and/or adjustments (as the case may be) or shall use such other method, reasonably satisfactory to the Holder and the Company, so as not to require physical surrender of this Note upon conversion;

	
 

	
 

	
 

	
 

	
c.

	
If for any reason (including the operation of the adjustment provisions set forth in this Note), the Conversion Price on any date of Conversion of this Note shall not be lawful and adequate consideration for the issuance of the relevant Shares, then the Company shall take such steps as are necessary (including the amendment of its certificate of incorporation so as to reduce the par value of the Common Stock) to cause such Conversion Price to be adequate and lawful consideration on the date the payment thereof is due, but if the Company shall fail to take such steps, then the Company acknowledges that the Holder shall have been damaged by the Company in an amount equal to an amount, which, when added to the total Conversion Price for the relevant Shares, would equal lawful and adequate consideration for the issuance of such Shares, and the Company irrevocably agrees that if the Holder shall then forgive the right to recover such damages from the Company, such forgiveness shall constitute, and Company shall accept such forgiveness as, additional lawful consideration for the issuance of the relevant Shares;

	
 

	
 

	
 

	
 

	
d.

	
The Company shall at all times take any and all additional actions as are necessary to maintain the required authority to issue the Shares to the Holder, in the event the Holder exercises its rights under the Conversion Option;

	
 

	
 

	
 

 

 

 

 

 

Secured Convertible Promissory Note

Note #4

Page 3 of 10

  

 

 

	
 

	
e.

	
Payment to Company prior to Holder’s delivery of a Notice of Conversion shall terminate Holder’s option to convert;

	  	  	  
	  	
f.

	
Conversion calculations pursuant to this Section 4, shall be rounded to the nearest whole share of Common Stock, and no fractional shares shall be issuable by the Company upon conversion of this Note. Conversion of this Note in full shall be deemed payment in full of this Note and this Note shall thereupon be cancelled;

	  	  	  
	  	
g.

	
If the Company at any time or from time to time on or after the effective date of the issuance of this Note (the “Original Issuance Date”) effects a subdivision of its outstanding Common Stock, the Conversion Price then in effect immediately before that subdivision shall be proportionately decreased, and conversely, if the Company at any time or from time to time on or after the Original Issuance Date combines its outstanding shares of Common Stock into a smaller number of shares, the Conversion Price then in effect immediately before the combination shall be proportionately increased;

	  	  	  
	  	
h.

	
All Shares of Common Stock which may be issued upon Conversion of this Note will, upon issuance by the Company in accordance with the terms of this Note, be validly issued, free from all taxes and liens with respect to the issuance thereof (other than those created by the holders), free from all pre-emptive or similar rights and be fully paid and non-assessable;

	  	  	  
	  	
i.

	
On the date of any Conversion, all rights of any Holder with respect to the amount of this Note converted, will terminate, except only for the rights of any such Holder to receive certificates (if applicable) for the number of Shares of Common Stock which this Note has been Converted;

	  	  	  
	  	
j.

	
Unless the Shares are eligible to be issued as free trading shares pursuant to the requirements of Rule 144 or otherwise, which shall be determined by the Company in its reasonable discretion, prior to the issuance date of such Shares, such Shares shall be issued as restricted shares of Common Stock; and

	  	  	  
	  	
k.

	
The Company shall not be required to pay any tax allocated or attributed to Holder which may be payable in respect to any transfer involved in the issue and delivery of shares of Common Stock upon Conversion in a name other than that in which the shares of the Note so converted were registered, and no such issue or delivery shall be made unless and until the person requesting such issue or delivery has paid to the Company the amount of any such tax, or has established, to the satisfaction of the Company, that such tax has been paid. The Company shall withhold from any payment due whatsoever in connection with the Note any and all required withholdings and/or taxes the Company, in its sole discretion deems reasonable or necessary, absent an opinion from Holder’s accountant or legal counsel, acceptable to the Company in its sole determination, that such withholdings and/or taxes are not required to be withheld by the Company.

	  	  	  

 

 

Secured Convertible Promissory Note

Note #4

Page 4 of 10

  

 

 

 

	  	
1.

	
Notwithstanding anything herein to the contrary, the maximum number of shares of Common Stock to be issued in connection with the Conversion of this Note, and any other Notes issued in connection with the Line of Credit (“Other Notes”) shall not (i) exceed 19.9% of the outstanding shares of Common Stock immediately prior to the date of the Line of Credit, (ii) exceed 19.9% of the combined voting power of the then outstanding voting securities of the Company immediately prior to the date of the Line of Credit, in each of subsections (i) and (ii) before the issuance of the Common Stock upon conversion of this Note or the Other Notes, or (iii) otherwise exceed such number of shares of Common Stock that would violate applicable listing rules of the NYSE MKT in the event the Company’s shareholders do not approve the issuance of the Common Stock upon the conversion of this Note or the Other Notes, in each of (i) through (iii), only to the extent required by applicable NYSE MKT rules and guidance (the “Share Cap”). In the event the number of shares of Common Stock to be issued upon conversion of this Note or the Other Notes exceeds the Share Cap, then this Note and the Other Notes, or applicable portions thereof shall cease being convertible, and the Company shall instead repay such Note and Other Notes (or portions thereof) in cash, or if required, the Company shall first obtain the Stockholder Approval (as defined in the Line of Credit).

 

	
5.

	
Redemption. This Note may be redeemed by the Company by payment of the entire Principal and interest outstanding under this Note in cash to Holder.

 

	
 

	
a.

	
This Note may be prepaid in whole or in part at any time without penalty provided that the Company shall provide the Holder a minimum of thirty (30) days prior written notice before the date of the Company’s planned prepayment.

	
 

	
 

	
 

	
 

	
b.

	
Any partial prepayment shall be applied first to any accrued interest and then to any principal Loan amount outstanding.

 

 

	
6.

	
Events of Default. If an Event of Default (as defined herein or below) occurs (unless all Events of Default have been cured or waived by Holder), Holder may, by written notice to the Company, declare the principal amount then outstanding of, and the accrued interest and all other amounts payable on, this Note to be immediately due and payable. The following events shall constitute events of default (“Events of Default”) under this Note, and/or any other Events of Default defined elsewhere in this Note shall occur:

 

 

 

Secured Convertible Promissory Note

Note #4

Page 5 of 10

  

 

 

	
(a)

	
the Company shall fail to pay, when and as due, the Principal or interest payable hereunder (or under any other outstanding Convertible Note issued by the Company and held by Holder); or

 

	
(b)

	
If there shall exist final judgments against the Company aggregating in excess of One Hundred Thousand Dollars ($100,000) and if any one of such judgments shall have been outstanding for any period of forty-five (45) days or more from the date of its entry and shall not have been discharged in full, released or stayed pending appeal; or

 

	
(c)

	
the Company shall have breached in any respect any term, condition, warrant, representation or covenant in this Note or the Line of Credit, and, with respect to breaches capable of being cured, such breach shall not have been cured within fifteen (15) days following the receipt of written notice of such breach by the Holder to the Company; or

 

	
(d)

	
a Change of Control shall have occurred without the prior written consent of the Holder; or

 

	
(e)

	
the Company fails to meet any deadlines or requirements set forth herein; or

 

	
(f)

	
the Company shall fail to comply with the reporting requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), at any time the Company is subject to the Exchange Act; or

 

	
(g)

	
the Company shall cease to be subject to the reporting requirements of the Exchange Act; or

 

	
(h)

	
the Company shall take or fail to take steps which cause the Company’s securities to be ineligible for sale pursuant to Rule 144; or

 

	
(i)

	
the Company shall: (i) make an assignment for the benefit of creditors, file a petition in bankruptcy, petition or apply to any tribunal for the appointment of a custodian, receiver or a trustee for it or a substantial portion of its assets; (ii) commence any proceeding under any bankruptcy, reorganization, arrangement, readjustment of debt, dissolution or liquidation or statute of any jurisdiction, whether now or hereafter in effect; (iii) have filed against it any such petition or application in which an order for relief is entered or which remains undismissed for a period of ninety (90) days or more; (iv) indicate its consent to, approval of or acquiescence in any such petition, application, proceeding or order for relief or the appointment of a custodian, receiver or trustee for it or a substantial portion of its assets; or (v) suffer any such custodianship, receivership or trusteeship to continue undischarged for a period of ninety (90) days or more; or

 

 

 

Secured Convertible Promissory Note

Note #4

Page 6 of 10

  

 

 

	
(j)

	
the Company shall take any action authorizing, or in furtherance of, any of the foregoing; or

 

	
(k)

	
the Company shall be in material default of any of its debt obligations which separately or in aggregate have a value in default of more than $50,000, and such default shall not have been cured within thirty (30) days following the receipt by the Company of a notice of default in connection therewith by the applicable debt holder(s).

 

	 	

In case any one or more Events of Default shall occur and be continuing, Holder may proceed to protect and enforce its rights by an action at law, suit in equity or other appropriate proceeding, whether for the specific performance of any agreement contained herein or for an injunction against a violation of any of the terms hereof, or in aid of the exercise of any power granted hereby or thereby or by law or otherwise. In case of a default in the payment of any principal of or premium, if any, or interest on this Note, the Company will pay to Holder such further amount as shall be sufficient to cover the reasonable cost and expenses of collection, including, without limitation, reasonable attorneys’ fees, expenses and disbursements. No course of dealing and no delay on the part of Holder in exercising any right, power or remedy shall operate as a waiver thereof or otherwise prejudice Holder’s rights, powers or remedies. No right, power or remedy conferred by this Note upon Holder shall be exclusive of any other right, power or remedy referred to herein or therein or now or hereafter available at law, in equity, by statute or otherwise.

	
7.

	
Certain Waivers by the Company. Except as expressly provided otherwise in this Note, the Company and every endorser or guarantor, if any, of this Note waive presentment, demand, notice, protest and all other demands and notices in connection with the delivery, acceptance, performance, default or enforcement of this Note, and assent to any extension or postponement of the time of payment or any other indulgence, to any substitution, exchange or release of collateral available to Holder, if any, and to the addition or release of any other party or person primarily or secondarily liable.

	
8.

	
Assignment by Holder. If and whenever this Note shall be assigned and transferred, or negotiated, including transfers to substitute or successor trustees, in each case subject to applicable law and an exemption from registration for such transfer, which shall be reasonably approved, and not unreasonably delayed or conditioned by the Company. Notwithstanding the above, the Holder may assign any of its rights under this Note (subject where applicable to federal securities laws), to any Person (including, but not limited to Affiliates or related parties of the Holder), with written notice to the Company and the Company shall have no ability to restrict or condition such assignment (subject where applicable to compliance with applicable federal securities laws).

	
 

	
 

 

 

Secured Convertible Promissory Note

Note #4

Page 7 of 10

  

 

	
9.

	
Amendment. This Note may not be changed orally, but only by an agreement in writing, signed by the party against whom enforcement of any waiver, change, modification or discharge is sought.

 

	
10.

	
Costs and Fees. Anything else in this Note to the contrary notwithstanding, in any action arising out of this Agreement, the prevailing party shall be entitled to collect from the non-prevailing party all of its attorneys’ fees. For the purposes of this Note, the party who receives or is awarded a substantial portion of the damages or claims sought in any proceeding shall be deemed the “prevailing” party and attorneys’ fees shall mean the reasonable fees charged by an attorney or a law firm for legal services and the services of any legal assistants, and costs of litigation, including, but not limited to, fees and costs at trial and appellate levels.

	
 

	
 

	
11.

	
Governing Law. It is the intention of the parties hereto that the terms and provisions of this Note are to be construed in accordance with and governed by the laws of the State of Texas, except as such laws may be preempted by any federal law controlling the rate of interest which may be charged on account of this Note.

 

	
12.

	
No Third Party Benefit. The provisions and covenants set forth in this Agreement are made solely for the benefit of the parties to this Agreement and are not for the benefit of any other person, except for Frank & McNear, LLC, and no other person shall have any right to enforce these provisions and covenants against any party to this Agreement.

	
 

	
 

	
13.

	
Jurisdiction, Venue and Jury Trial Waiver. The parties hereby consent and agree that, in any actions predicated upon this Note, venue is properly laid in Texas and that the Circuit Court in and for Houston, Texas, shall have full subject matter and personal jurisdiction over the parties to determine all issues arising out of or in connection with the execution and enforcement of this Note.

	
 

	
 

	
14.

	
Interpretation. The term “Company” as used herein in every instance shall include the Company’s successors, legal representatives and assigns, including all subsequent grantees, either voluntarily by act of the Company or involuntarily by operation of law and shall denote the singular and/or plural and the masculine and/or feminine and natural and/or artificial persons, whenever and wherever the contexts so requires or properly applies. The term “Holder” as used herein in every instance shall include the Holder’s successors, legal representatives and assigns, as well as all subsequent assignees, endorsees and holders of this Note (subject to the provisions of this Note providing for transfers and assignments by Holder), either voluntarily by act of the parties or involuntarily by operation of law. Captions and paragraph headings in this Note are for convenience only and shall not affect its interpretation. In this Agreement words importing the singular number include the plural and vice versa; words importing the masculine gender include the feminine and neuter genders and visa versa. The word “person” includes an individual, body corporate, partnership, trustee or trust or unincorporated association, executor, administrator or legal representative.

	  	  

 

 

Secured Convertible Promissory Note

Note #4

Page 8 of 10

  

 

	
15.

	
WAIVER OF JURY TRIAL. THE COMPANY AND HOLDER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT EITHER MAY HAVE TO TRIAL BY JURY IN RESPECT TO ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS NOTE AND ANY AGREEMENT CONTEMPLATED TO BE EXECUTED IN CONJUNCTION HEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS, (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF EITHER PARTY. THE COMPANY ACKNOWLEDGES THAT THIS WAIVER OF JURY TRIAL IS A MATERIAL INDUCEMENT TO THE HOLDER IN EXTENDING CREDIT TO THE COMPANY, THAT THE HOLDER WOULD NOT HAVE EXTENDED SUCH CREDIT WITHOUT THIS JURY TRIAL WAIVER, AND THAT THE COMPANY HAS BEEN REPRESENTED BY AN ATTORNEY OR HAS HAD AN OPPORTUNITY TO CONSULT WITH AN ATTORNEY IN CONNECTION WITH THIS JURY TRIAL WAIVER AND UNDERSTANDS THE LEGAL EFFECT OF THIS WAIVER.

	
16.

	
Entire Agreement. This Agreement and the Line of Credit constitutes the sole and only agreement of the parties hereto and supersedes any prior understanding or written or oral agreements between the parties respecting the subject matter hereof.

	
17.

	
Effect of Facsimile and Photocopied Signatures. This Agreement may be executed in several counterparts, each of which is an original. It shall not be necessary in making proof of this Agreement or any counterpart hereof to produce or account for any of the other counterparts. A copy of this Agreement signed by one Party and faxed or scanned and emailed to another Party (as a PDF or similar image file) shall be deemed to have been executed and delivered by the signing Party as though an original. A photocopy or PDF of this Agreement shall be effective as an original for all purposes.

[Remainder of page left intentionally blank. Signature page follows.]

 

 

 

 

 

 

Secured Convertible Promissory Note

Note #4

Page 9 of 10

  

 IN WITNESS WHEREOF, the Company has caused this Convertible Promissory Note to be executed and delivered by a duly authorized officer as of the date first above written, to be effective as of the effective date set forth above.

 

	
 

	LUCAS ENERGY, INC. LUCAS ENERGY, INC.
	
 

	
 

	
 

	
 

	
 

	  
	
 

	
 

	
 

	  	
 

	  
	
 

	
By: /s/ Anthony C. Schnur

	  	
 

	  
	
 

	
Anthony C. Schnur

Chief Executive Officer

	  	
 

	  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Secured Convertible Promissory Note

Note #4

Page 10 of 10Exhibit 10.1

 

 

Separation
Agreement and Release of Claims

 

This Separation Agreement
and Release of Claims ("Agreement") is made by and between Mr. Ronald Edward Strauss ("Employee"),
an individual, and XcelMobility, Inc. a Nevada corporation based in California, its parents, subsidiaries, related entities, predecessors,
successors, officers, directors, agents, Employees, and assigns (collectively, "Company").

 

RECITALS

 

		A.	Employee is an Employee of Company;

 

		B.	Employee has informed Company that he has determined
to terminate the employment relationship with the Company;

 

		C.	WHEREAS, Company desires to provide Employee with separation benefits to assist in the transition
resulting from the elimination of their position with Company; and

 

		D.	WHEREAS, Employee agrees, in exchange for such separation benefits, to waive and release any and
all claims that they may have against Company;

 

NOW THEREFORE, in consideration
of the mutual promises and releases contained herein and for other good and valuable consideration, the sufficiency of which is
hereby acknowledged, the parties agree as follows:

 

		1.	Upon the execution of this Agreement, the parties agree as follows:

 

		a.	Employee shall be terminated from employment with Company on December 31, 2015 (“Termination
Date”). 

 

		b.	On the Termination Date, Company shall provide Employee with payment of all compensation due, including
accrued but unused vacation hours.

 

		c.	Upon the expiration of seven (7) day revocation referenced
herein (paragraph #8), Company will pay to Employee the sum FIFTEEN THOUSAND dollars and zero cents ($15,000.00),
less regular employment tax withholding, representing four weeks of severance pay. The payment will be made in lump sum by
the first week of March 2016.

 

		d.	Employee acknowledges and agrees that the payments provided under subparagraph c above are in complete satisfaction of any
and all compensation due to Employee from the Company, whether for services provided to the Company or otherwise, through the Termination
Date and that, except as expressly provided under this Agreement, no further compensation is owed to him. Employee expressly waives
and relinquishes any and all rights he has, or might have, to any bonus, unexercised equity rights, other incentive compensation,
or other compensation, of any kind or description, under any plan or program of the Company.

		e.	Employee shall be entitled to any and all other rights or benefits afforded to other terminated
Employees of Company, including, without limitation, the right to elect to continue, at their cost, coverage under the Company
health plan, in accordance with the health care continuation coverage provisions of the Consolidated Omnibus Budget Reconciliation
Act of 1985 ("COBRA").

 

		f.	Company also agrees to not oppose Employee’s application for unemployment benefits.

 

		2.	Release. Employee, on behalf of himself, his descendants,
ancestors, dependents, heirs, executors, administrators, assigns, and successors, and each of them, hereby covenants not to sue
and fully releases, acquits, and discharges Company, and its subsidiaries and affiliates, past, present, future and each of them,
as well as its owners, trustees, directors, officers, agents, servants, employees, stockholders, representatives, attorneys, assigns,
and successors, and each of them (collectively referred to as "Company Releasees") with respect to and from any and all
claims, wages, demands, assistance, support, rights, liens, agreements, contracts, covenants, actions, suits, rights to appeal,
entitlements and notices, causes of action, obligations, debts, costs, expenses, interests, attorneys' fees, contributions, damages,
judgments, orders and liabilities of whatever kind or nature in law, equity or otherwise, whether known or unknown, suspected or
unsuspected, and whether or not concealed or hidden, which he has at any time heretofore owned or held against said Company Releasees,
including, without limitation, those arising out of or in any way connected with his employment relationship with Company or his
Termination or any other transactions, occurrences, acts or omissions or any loss, damage or injury whatever, known or unknown,
suspected or unsuspected, resulting from any of them, committed or omitted prior to the date of this Agreement, and including,
without limitation, claims for breach of contract, libel, slander, wrongful discharge, intentional infliction of emotional harm,
or other tort, or discrimination or harassment based upon any federal, state, or municipal statute or local ordinance relating
to discrimination in employment, unpaid wages, salary, bonuses, commissions, or other compensation of any sort, damages of any
nature, and/or costs, fees or other expenses, including attorneys’ fees incurred in any of these matters.

 

     

     

    

 

 

		a.	Waiver of Civil Code Section 1542. It is Employee’s intention in signing this Agreement that
it should be effective as a bar to each and every claim, demand and cause of action stated above. In furtherance of this intention,
Employee hereby expressly waives any and all rights and benefits conferred upon Employee by the provision of SECTION 1542 OF THE
CALIFORNIA CIVIL CODE and expressly consents that this Agreement shall be given full force and effect according to each and all
of its express terms and provisions, including those relating to unknown and unsuspected claims, demands and causes of action,
if any , as well as those relating to any other claims, demands and causes of action referred to above. Section 1542 states as
follows:

 

“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.”

 

This general release does not
waive any rights that cannot be waived by law. Employee is not waiving any claim for workers compensation although Employee
acknowledges that he has not sustained a work-related injury, either physical or mental, and has no intent to file a claim against
Company as a result of any work-related injury sustained in the course of Employee’s employment with Company. Employee is
not precluded from filing a charge with or participating in an investigation or proceeding conducted by the Equal Employment Opportunity
Commission or government agency so long as Employee does not seek reinstatement, damages or remedies as to any claim released or
any right which is hereby waived.

 

		3.	Denial of Liability. While this Agreement resolves
all issues Employee may have with Company, as well as any future effects of any acts or omissions, it does not constitute an admission
by Company or any of its Employees, officers or agents of any violation of any federal, state or local law, ordinance or regulation
or of any violation of Company’s policies or procedures or of any liability of wrongdoing whatsoever. Neither this Agreement
nor anything in this Agreement shall be construed to be, or shall be admissible in any proceeding as, evidence of liability or
wrongdoing by Company or any of its Employees or agents. This Agreement may be introduced, however, in any proceeding to enforce
this Agreement.

 

		4.	Indemnity Regarding Assignment of Claims. Employee
represents and warrants that he has not heretofore assigned or transferred, or purported to assign or transfer, to any person,
entity, or individual whatsoever, any of the claims released as set forth in Paragraph 2 above. Employee agrees to indemnify and
hold harmless the Company Releasees (as defined in Paragraph 2 above) against any claim, demand, debt, obligation, liability, cost,
expense, right of action or cause of action based on, arising out of, or in assignment.

 

     

     

    

  

		5.	Entire Agreement. This Agreement constitutes and
contains the entire agreement and understanding concerning Employee's employment and Termination, and the other subject matters
addressed herein between the parties, and supersedes and replaces all prior negotiations and all prior agreements proposed or otherwise,
whether written or oral, concerning the subject matter hereof.

 

		6.	Governing Law. This Agreement shall be governed by
and subject to the laws and exclusive jurisdiction of the courts of the California. In the event that
Employee breaches any of the provisions of this Agreement, Employee agrees to pay Company's reasonable costs of prosecuting
such claims, including attorneys' fees and costs.

 

		7.	Severability. In the event that one or more of the
provisions of this Agreement shall for any reason be held to be illegal or unenforceable, this Agreement shall be revised only
to the extent necessary to make such provision(s) legal and enforceable.

 

		8.	Waiver of Claims Under the Age Discrimination in Employment
Act. The Employee recognizes that, in signing this Release of Claims, Employee is waiving Employee's right to pursue any
and all claims under the Age Discrimination in Employment Act, 29 U.S.C. Sec. 626 et seq. ("ADEA") arising prior to the
date that Employee executes this Release. The Employee understands that Employee may take up to twenty-one (21) days from the date
this Release is presented to Employee to consider whether to execute this Release. The Employee is advised that Employee may wish
to consult with an attorney prior to execution of this Release. Once Employee has executed this Release, Employee may revoke the
Release at any time during the seven (7) day period following the execution of the Release. After seven (7) days have passed following
the Employee's execution of this Release, the execution of this Release shall be final and irrevocable

 

		9.	Non-Disclosure of Confidential Information. Employee
acknowledges and understands that any prior confidentiality agreement executed by Employee which protects Company’s confidential
information (“Confidentiality Agreement”) survives the execution of this Agreement and the Termination of Employee’s
employment, and Employee expressly agrees to continue to abide by these provisions. In addition to any obligations set out in the
Confidentiality Agreement, Employee also agrees that by virtue of Employee’s employment with Company Employee has been exposed
to certain trade secret and other confidential information, including but not limited to information regarding Company and its
related companies and of their directors, officers, and Employees (“Confidential Information”). As used herein, Confidential
Information includes, but is not limited to, all information that has or could have commercial value or other utility to Company’s
competitors or others in the same industry. Employee agrees not to use or disclose to any third party and such Confidential Information,
and that this obligation to keep in confidence Company’s Confidential Information shall survive the execution of this Agreement
and the termination of Employee’s employment. Nothing in this paragraph shall be construed to preclude Employee from complying
with a lawful court or arbitration or process requiring disclosure, written, oral or otherwise, of Confidential Information, provided
that the Employee shall give immediately written notice to Company or its successor, by hand delivery to its General Counsel, of
such court order or process and cooperates fully with and supports through all reasonable means all efforts by Company or its successor
to oppose any such disclosure.

 

		10.	Non-Disclosure of Contents of this Agreement: Employee
expressly agrees and accepts as a condition of entering into this Agreement that Employee will not disclose any part or all of
the contents of this Agreement to any third party excluding legal counsel who the Employee may retain to review this Agreement.

 

		11.	Employee acknowledges that Company denies any wrongdoing whatsoever in connection with its dealings
with Employee, and that the consideration given under this Agreement is made solely in appreciation of Employee’s services
to Company and to compromise any potential disputed claims. The parties agree that nothing contained in this Agreement will constitute
or be treated as an admission of wrongdoing or liability on the part of anyone.

 

     

     

    

 

		12.	Employee agrees to refrain from making or publishing any derogatory or disparaging remarks or statements,
oral or written, to any third parties about the Company.

 

		13.	Employee acknowledges and agrees that no promises or representations were made to him which do
not appear written herein and that this Agreement contains the entire agreement of the parties on the subject matter thereof.

 

		14.	Employee agrees that this Agreement cannot be changed, modified, supplemented or rescinded except
by a written document signed by both Employee and Company’s President.

 

		15.	Employee hereby acknowledges that he has read and understands this Agreement and that he signs
this Agreement voluntarily and without coercion.

 

		16.	Warranty Regarding Assistance of Counsel: In entering
into this Agreement, the parties represent that they have had the opportunity to consult with attorneys of their own choice, and
that the terms of this Agreement are fully understood and voluntarily accepted by them.

 

 

PLEASE READ ENTIRE AGREEMENT CAREFULLY.
THIS AGREEMENT INCLUDES A RELEASE OF KNOWN AND UNKNOWN CLAIMS.

 

	Ronald Edward Strauss	XcelMobility, Inc.	 
	 	 	 	 
	 	 	By:	 	 
	 	 	 	 	 	 
	Date:	 	 	Name:	 	 
	 	 	 	 	 	 
		 	 	Title:	 	 
	 	 	 	 	 	 
	 	 	 	Date:

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