Document:

June 24, 2009

 

 

Baoding Shengde Paper Co., Ltd

 

And

 

Liu Zhenyong

 

Zhao Shuangxi

 

Liu Xiaodong

 

__________________________________________

 

of

Hebei Baoding Orient Paper Milling Co., Ltd 

Proxy Agreement

 

__________________________________________

 

 

 

 

 

 

 

 

 

Proxy Agreement

 

This Proxy Agreement (the “Agreement”) is entered into as June 24, 2009 between the following parties in Baoding

 

	
            1.
 	
            Baoding Shengde Paper Co. Ltd(referred to as Shengde Paper)
 

Registered Address: Nanwaihuan Road, Xushui County, Hebei Province, China

 

	
            2.
 	
            Hebei Baoding Orient Paper Milling Co., Ltd referred as Orient Paper
 

Registered Address: Wuji Village, Xushui County,Hebei Province, China

 

	
            3.
 	
            Liu Zhenyong
 

ID:13062519630822311X

Address:Liuzhuang, Cuizhuang Town, Xushui County, Hebei Province

 

	
            4.
 	
            Zhao Shuangxi
 

ID:13242319640606005X

Address:Hujiaying, Liucun Town, Xushui County, Hebei Province

 

	
            5.
 	
            Liu Xiaodong
 

ID:132423197408117114

Address:#113, No 268, Chaoyang South Avenue, Xinshi District, Baoding City, Hebei Province

 

 

(Liu Zhenyong, Zhao Shuangxi and Liu Xiaodong hereby are together referred to as “Shareholder or Shareholders”.)

 

Whereas:

 

	
            1.
 	
            Liu Zhenyong, Zhao Shuangxi and Liu Xiaodong established Orient Paper and own the equity interests of Orient Paper.
 

 

	
            2.
 	
            Orient Paper is willing unlimitedly entrust the person designated by Shengde Paper with the shareholder’s voting right at the shareholder’s meeting of Orient Paper.
 

 

NOW THEREFORE, the parties agree as follows:

 

Article I   Entrust of Voting Rights

 

 

 

1

 

 

	
            1.1
 	
            Shareholders hereby agree to irrevocably entrust the person designated by Shengde Paper with his shareholder’s voting rights and other shareholder’s right for representing him to exercise such rights at the shareholder’s meeting of Orient Paper in accordance with the laws and its Article of Association as the following (hereafter referred to as “Entrusted Rights”):
 

(1)  Representative of the shareholders must attend Orient Paper’s shareholder’s    meeting;

(2)  Representing to act shareholders’ voting rights in shareholder’s meetings;

	
             
 	
            (3)
 	
            Call on for temporary shareholders’ meetings;
 

 (4)  Act other voting rights in accordance with articles of association of Orient Paper (including other voting rights of shareholders in the restated articles of association).

 

	
            1.2
 	
            Each shareholder will shoulder relevant responsibilities for any legal consequences by the acts of Shengde Paper to perform the Entrusted Rights.
 

 

	
            1.3
 	
            Shareholders hereby agree that Shengde Paper can perform the above Entrusted Rights without consent of the shareholders. However, Shengde Paper shall notify each shareholder immediately after resolutions are reached.
 

 

Article 2    Knowledge

 

	
            2.1
 	
            In order to realize the Entrusted Rights, Shengde Paper is entitled to learn about any information related to Orient
 Paper’s operation, business, client, accounting, and employees, and review related materials. Orient Paper shall use all its best endeavors to cooperate.
 

 

Article 3    Performance of Entrusted Rights

	
            3.1
 	
            Under necessary circumstances, Shengde Paper can designate a person (one or several) within its Company who accepts the entrustment authorized by Shengde Papert, and this person shall represent to exercise his
shareholder’s voting rights and shareholder’s rights pursuant to this Agreement.
 

 

	
            3.2
 	
            Shareholders shall offer full assistance to help Shengde Paper act its entrusted rights, including signing shareholders’ resolution and other related legal documents concerning Orient Paper decided by Shengde Paper, such as documents to meet governmental requirements for approval and registration).
 

 

	
            3.3
 	
            If in any time within the term of the Agreement, the entrusted rights cannot be realized by any reason excluding the breach of
agreement by the shareholders and Orient Paper, each party shall impel a similar replacement, and sign amendments to 
 

 

 

2

 

 

 

	
                
 	
            revise or adjust the terms and conditions of this Agreement to assure the realization of the purpose of this Agreement.
 

 

Article 4    Obligation and Remedies

 

	
            4.1
 	
            The parties hereby agree that Shengde Paper shall not be asked for any remedy or obligation under the terms of this Agreement.
 

 

	
            4.2
 	
            The shareholders and Orient Paper agree to remedy any losses of Shengde Paper incurred under the terms of this Agreement and prevent it from damages, including but not limited to losses related to laws suits, arbitrations, claims, governmental administrative searches, penalties, provided that such losses are due to Shengde Paper intentional act or serious negligence.
 

 

Article 5    Representations and Warranties

 

	
            5.1
 	
            The shareholders jointly and severally represent and warrant as the following
 

 

5.1.1  Each of them has the legal right and full power and authority to enter into and perform this Agreement, which when executed will constitute valid and binding obligations in accordance with their respective terms.

 

5.1.2  Each of them has been authorized with full power to sign and perform this Agreement.. The agreement has been duly signed and delivered by them. The Agreement construes legal binding obligations for each of them and can be executed in accordance with the terms and conditions of this Agreement.

 

5.1.3  On the date of this Agreement, Each of them is Orient Paper’s lawful shareholder. Except for the rights designated by this Agreement, No other third party will ask for the Entrusted rights. According to this Agreement, Shengde Paper can act its Entrusted rights fully and completely according to the effective articles of associations of Orient Paper.

	
            5.2
 	
            Shengde Paper and Orient Paper jointly and severally represent and warrant as the following:
 

 

 

3

 

 

 

 

5.2.1  Each of them has the legal right and full power and authority to enter into and perform this Agreement, which when executed will constitute valid and binding obligations in accordance with their respective terms.

 

5.2.2  Each of them has been authorized with full power to sign and perform this Agreement.

 

	
            5.3
 	
            Each Shareholder represents and warrants as the following:
 

 

5.3.1  On the date of this Agreement, Shareholders are Orient Paper’s lawful shareholders.
Except for the rights designated by this Agreement, No other third party will ask for the Entrusted rights. According to this Agreement, Shengde Paper can act its Entrusted rights fully and completely according to the effective
articles of associations of Orient Paper.

 

Article 6  Term of This Agreement

 

	
            6.1
 	
            This Agreement has been duly executed by the parties’ authorized representatives. The parties hereby acknowledge that if either of the shareholders holds the equity interests of Orient Paper, the other person shall continue to perform this Agreement without time limit.
 

 

	
            6.2
 	
            If any shareholder transfers it equity interest in Orient Paper with advance consent of Shengde Paper, it will cease to be a party of this Agreement, while the obligation and commitment of the other shareholder shall not be negatively affected.
 

 

Article 7  Notice

 

	
            7.1
 	
            Any communications among parties of this Agreement, including notice, requirement and offer shall be delivered in written form.
 

 

	
            7.2
 	
            In the case of transmission by facsimile, the transmission shall be deemed delivered upon delivery; In case of delivering face to face, the transmission shall be deemed delivered upon delivery; all notices or communications sent by registered mail shall be deemed delivered five (5) Business Days from the time of posting. 
 

 

Article 8  Breach of Agreement

 

 

 

4

 

 

 

 

	
            8.1
 	
            The Parties agree and confirm that if any party (the “Breaching Party”) materially breach any terms of this Agreement or unable to perform any obligation under this Agreement, it will constitute a “Breach” act. Other party (the “Observant Party”) shall ask for remedy measures in reasonable time. If the Breaching Party does not perform any remedy measures in the reasonable time required by the Observant Party or within 10 days after the written notice of the Observant Party, then (1) if the shareholders or Orient Paper is the breaching party, Shengde Paper can terminate this Agreement and ask for remedies; (2) if Shengde Paper is the breaching party, the observant party shall ask for remedies, but cannot terminate the Agreement.
 

 

	
            8.2
 	
            The rights and remedies designated by this Agreement are accumulative, and do not exclude other rights or remedies under laws and regulations.
 

 

	
            8.3
 	
            Article 8 shall survive after the agreement is ceased or terminated.
 

 

 

Article 9  Miscellaneous

 

	
            9.1
 	
            This Agreement shall be executed in five (5) original copies in Chinese and is hold respectively by each Party, and each original copy has the same legal effect.
 

 

	
            9.2
 	
            The execution, validity, interpretation, performance, amendment, termination and the dispute resolution of this agreement are
governed by the laws of PRC
 

 

	
            9.3
 	
            The Parties shall strive to settle any dispute, conflicts, or compensation claims arising from the interpretation or
performance (including any issue relating to the existence, validity and termination) in connection with this Agreement through friendly consultation. In case no settlement can be reached within  thirty (30) day after one party ask for the
settlement, each party can submit such matter to China International Economic and Trade Arbitration Commission (the “CIETAC”) in accordance with its rules. The arbitration award shall be final and conclusive and binding upon the
 Parties.
 

 

	
            9.4
 	
            Any right, power or remedy granted to a party by one term of this agreement does not exclude the party from any right, power or remedy granted by other terms or laws and regulations. And one party’s performance of its right, power and remedy does not exclude the party from performing other right, power and remedy.
 

 

	
            9.5
 	
            No failure or delay by any Party in exercising any right or remedy provided by law or under this Agreement shall impair such
right or remedy or operate or be construed as a waiver or variation of it or preclude its exercise at any subsequent 
 

 

 

5

 

 

 

 

	
               
 	
            time and no single or partial exercise of any such right or remedy shall preclude any other or further exercise of it or the
exercise of any other right or remedy.
 

 

	
            9.6
 	
            The headings are for convenience and under no circumstances; the headings shall affect the interpretation of the articles of the agreement.
 

 

	
            9.7
 	
            This Agreement is severable. If any clause of this Agreement is judged as invalid or non-enforceable according to relevant PRC Laws, such clause shall be deemed invalid only within the applicable area of the PRC Laws, and without affecting other clauses hereof in any way.
 

 

	
            9.8
 	
            The Parties may amend and supply this Agreement with a written agreement. The amendment and supplement duly executed by the Parties shall be a part of this Agreement and shall have the same legal effect as this Agreement.
 

 

	
            9.9
 	
            Without prior written approval of one party , the other party can not transfer, pledge or assign any right, benefit or obligation under this agreement. 
 

 

	
            9.10
 	
            This agreement is binding to all the parties herein and their respective lawful successors and assignees.
 

 

6

 

 

 

 

The parties hereby sign as the following:

 

Baoding Shengde Paper Co., Ltd

(seal)

 

Signature: /s/ Liu Zhenyong               

Name: Liu Zhenyong

Legal Representative/Authorized Representative

 

Hebei Baoding Orient Paper Milling Co., Ltd

(seal)

 

Signature: /s/ Liu Zhenyong               

Name: Liu Zhenyong

Legal Representative/Authorized Representative

 

Liu Zhenyong

 

Signature: /s/ Liu Zhenyong               

 

Zhao Shuangxi

 

Signature: /s/ Zhao Shuangxi             

 

Liu Xiaodong

 

Signature: /s/ Liu Xiaodong               

 

 

 

 

 

7Exhibit 10.1
    

    

    

    
      CONFIDENTIAL SEPARATION AND RELEASE
      AGREEMENT

    

    

    

    
      This Confidential Release Agreement (“Agreement”) is made
      and entered into by and between Steve Larkin (“Employee”)
      on the one hand, Zale Delaware, Inc. (“Zale” or the “Company”)
      on the other, hereinafter collectively referred to as the “Parties.”
    

    

    

    
      RECITALS

    

    

    

    
      WHEREAS, Employee was employed by Zale;
    

    
      WHEREAS, Employee’s last day of employment is June 4, 2009 (the
      “Separation Date”);
    

    
      NOW, THEREFORE, in consideration of the Recitals and the mutual
      promises, covenants, and agreements set forth herein and in the
      Employment Security Agreement between Employee and Zale dated December
      22, 2008 (the “ESA”), the receipt and sufficiency of which are hereby
      acknowledged, and to fulfill Employee’s obligation under Section 2.1 of
      the ESA, the Parties covenant and agree as follows:
    

    
      1.        RELEASE OF CLAIMS
    

    
      (a)       Employee, individually and on behalf of Employee’s attorneys,
      heirs, assigns, successors, executors, and administrators, hereby
      GENERALLY RELEASES, ACQUITS, AND DISCHARGES Zale and its respective
      current and former parent (including, but not limited to Zale
      Corporation), subsidiary, affiliated, and related corporations, firms,
      associations, partnerships, and entities, their successors and assigns,
      and the current and former owners, shareholders, directors, officers,
      employees, agents, attorneys, representatives, and insurers of said
      corporations, firms, associations, partnerships, and entities, and their
      guardians, successors, assigns, heirs, executors, and administrators
      (hereinafter collectively referred to as the “Releasees” and
      individually as a Releasee”) from and against any and all claims,
      complaints, grievances, liabilities, obligations, promises, agreements,
      damages, causes of action, rights, debts, demands, controversies, costs,
      losses, and expenses (including attorneys’ fees and expenses)
      whatsoever, under any municipal, local, state, or federal law, common or
      statutory -- including, but in no way limited to, claims arising under
      the United States and Texas Constitutions, Age Discrimination in
      Employment Act of 1967 (“ADEA”), as amended, Title VII of the Civil
      Rights Act of 1964, as amended (including the Civil Rights Act of 1991),
      the Americans with Disabilities Act of 1990, as amended by the Americans
      with Disabilities Amendment Act, the Employee Retirement Income Security
      Act of 1974, (“ERISA”) as amended, the Labor Management Relations Act,
      as amended, the Occupational Safety and Health Act, as amended, the
      Racketeer Influenced and Corrupt Organizations Act (RICO), as amended,
      the Sarbanes Oxley Act of 2002, the Sabine Pilot Doctrine, the American
      Jobs Creation Act of 2004,  the Texas Commission on Human Rights Act,
      the Texas Pay Day Act,  the Worker Adjustment and Retraining
      Notification Act (“WARN”), the Family and Medical Leave Act (“FMLA”),
      the Consolidated Omnibus Budget Reconciliation Act (“COBRA”), claims of
      retaliatory discharge under the Texas Workers’ Compensation Act, as
      amended, or any other claims, including claims in equity or common law
      claims -- for any actions or omissions whatsoever, whether known or
      unknown and whether connected with the employment relationship between
      Employee and Zale, the cessation of Employee’s employment with Zale
      which existed or may have existed prior to, or contemporaneously with,
      the execution of this Agreement (collectively, the “Released
      Claim(s)”).  Employee agrees that this Agreement
      includes a release of any and all negligence claims, contractual claims
      (express or implied), wrongful discharge claims, fraud,
      misrepresentation, and claims of discrimination, harassment, or
      retaliation of every possible kind.
    

    

    

    
      
        

        

      

      
        

        

        
          

        

      

      
        

        

      

    

    

    

    
      (b)       Employee agrees not to assert any claims released above in a
      class or collective action and further agrees not to become, and
      promises not to consent to become, a member (including a representative
      class plaintiff) of any class in a case brought in court or in
      arbitration in which claims are asserted against any of the Releasees
      that are related in any way to Employee’s employment with or termination
      from Company and/or that involve events which have occurred as of the
      Effective Date of this Release.  If Employee, without Employee’s prior
      knowledge and consent, is made a member of a class in any proceeding,
      whether in court or in arbitration, Employee will opt out of the class
      at the first opportunity afforded to him/her after learning of
      Employee’s inclusion.  In this regard, Employee agrees that Employee
      will execute, without objection or delay, an “opt-out” form presented to
      him either by the court or the arbitral forum in which such proceeding
      is pending or by counsel for the Company.
    

    
      (c)       Employee understands that nothing in this Agreement is
      intended to interfere with or deter Employee’s right to challenge the
      waiver of an ADEA claim or state law age discrimination claim or the
      filing of an ADEA charge or ADEA complaint or state law age
      discrimination complaint or charge with the EEOC or any state
      discrimination agency or commission or to participate in any
      investigation or proceeding conducted by those agencies.  Further,
      Employee understands that nothing in this Agreement would require
      Employee to tender back the money received under this Agreement if
      Employee seeks to challenge the validity of the ADEA or state law age
      discrimination waiver, nor does the Employee agree to ratify any ADEA or
      state law age discrimination waiver that fails to comply with the Older
      Workers’ Benefit Protection Act by retaining the money received under
      the Agreement.  Further, nothing in this Agreement is intended to
      require the payment of damages, attorneys’ fees or costs to Zale should
      Employee challenge the waiver of an ADEA or state law age discrimination
      claim or file an ADEA or state law age discrimination suit except as
      authorized by federal or state law.  Notwithstanding the foregoing two
      sentences, as provided above Employee also waives any right to recover
      from any Releasee in a civil suit brought by any governmental agency or
      any other individual on Employee behalf with respect to any Released
      Claim.
    

    
      (d)        This release excludes any claim which cannot be released by
      private agreement, such as workers’ compensation claims, claims after
      the Effective Date of this Agreement, and the right to file
      administrative charges with certain government agencies.  Nothing in
      this Agreement shall be construed to prohibit Employee from filing a
      charge with or participating in any investigation or proceeding
      conducted by the Equal Employment Opportunity Commission, National Labor
      Relations Board, or a comparable state or local agency.  Notwithstanding
      the previous two sentences, Employee agrees to waive any right to
      recover monetary damages in any charge, complaint, or lawsuit against
      Zale filed by Employee or by anyone else on Employee’s behalf.
    

    

    

    
      Page 1
    

    
      
        

        

      

      
        

        

        
          

        

      

      
        

        

      

    

    

    

    
      (e)       This general release covers both claims that Employee knows
      about and those that Employee may not know about, except that it does
      not waive any rights or claims, including claims under the ADEA, that
      may arise after the Effective Date of this Agreement (as defined
      below).  Employee further represents and warrants that: (i) Employee has
      been fully and properly paid for all hours worked, (ii) Employee has
      received all leave in accordance with applicable law; and (iii) Employee
      has not suffered any on the job injury for which Employee has not
      already filed a claim.  Employee further acknowledges, agrees and hereby
      stipulates that: (i) during Employee’s employment with the Company,
      Employee was allowed to take all leave and afforded all other rights to
      which Employee was entitled under the Family and Medical Leave Act (“FMLA”);
      and (ii)  the Company has not in any way interfered with, restrained or
      denied the exercise of (or attempt to exercise) any FMLA rights, nor
      terminated or otherwise discriminated against Employee for exercising
      (or attempting to exercise) any such rights.
    

    
      2.        Employee acknowledges and agrees that Employee will keep the
      terms, amount, and facts of, and any discussions leading up to, this
      Agreement STRICTLY AND COMPLETELY CONFIDENTIAL, and that Employee will
      not communicate or otherwise disclose to any employee of Zale (past,
      present, or future), or to any member of the general public, the terms,
      amounts, copies, or fact of this Agreement, except as may be required by
      law or compulsory process; provided, however, that Employee may
      make such disclosures to Employee’s tax/financial advisors or legal
      counsel as long as they agree to keep the information confidential.  If
      asked about any of such matters, Employee’s response shall be that
      Employee may not discuss any of such matters.  In the event of a breach
      of the confidentiality provisions set forth in this paragraph of the
      Agreement by Employee, Zale may suspend any payments due under this
      Agreement pending the outcome of litigation and/or arbitration regarding
      such claimed breach of this Agreement by Employee.  The Parties agree
      that this paragraph is a material inducement to Zale entering into this
      Agreement.  Additionally, the Parties agree that a breach of this
      paragraph by Employee will cause Zale irreparable harm and that Zale may
      enforce this paragraph without posting a bond.
    

    
      3.        Employee acknowledges and agrees that he has ongoing
      obligations under the ESA, including, but not limited to, continued
      compliance with the covenants set forth in Article II of the ESA.
    

    
      4.        In consideration for the covenants and other agreements set
      forth in the ESA and Employee’s agreement to, compliance with, and
      execution, without revocation, of this Agreement as set forth in Section
      14, Employee shall receive:
    

    
      (a)       $651,693.00,
      less applicable taxes and withholding, representing Employee’s
      “Severance Pay” as defined in the ESA, payable in equal installments
      over the 18 month period following the first ordinary payroll payment
      date that follows the date that is sixty (60) days after the Separation
      Date; provided, however, that all unpaid portions of such Severance Pay
      shall be distributed to Employee in a lump sum on the payroll date
      immediately preceding March 15, 2010.
    

    

    

    
      Page 2
    

    
      
        

        

      

      
        

        

        
          

        

      

      
        

        

      

    

    

    

    
      (b)       Employee shall be entitled to receive the Accrued Obligations,
      if any, specified in Section 1.1(b) of the ESA.
    

    
      (c)       Employee shall be entitled to receive the continued welfare
      benefits specified in Section 1.1(c) of the ESA; and
    

    
      (d)       Employee shall be entitled to receive the outplacement
      services specified in Section 1.1(d) of the ESA.
    

    

    

    
      5.        Employee agrees to cooperate fully with Zale, specifically
      including any attorney or other consultant retained by Zale, in
      connection with any pending or future litigation, arbitration, business,
      or investigatory matter.  The Parties acknowledge and agree that such
      cooperation may include, but shall in no way be limited to, Employee
      being available for interview by Zale, or any attorney or other
      consultant retained by Zale, and providing to Zale any documents in
      Employee’s possession or under Employee’s control.  Zale agrees to
      provide Employee with reasonable notice of the need for assistance when
      feasible.
    

    
      6.        Employee agrees that, in addition to the cessation of
      Employee’s employment with Zale, Employee shall cease from holding or
      reporting that Employee holds any positions as a director, officer
      and/or employee with Zale and/or any of the Releasees, effective on the
      Separation Date.
    

    
      7.        Employee waives and releases forever any right and/or rights
      Employee may have to seek or obtain employment, reemployment and/or
      reinstatement with Zale or any one or more other Releasees, and agrees
      not to seek reemployment with any of the same.
    

    
      8.        Zale and Employee agree that any controversy or claim
      (including all claims pursuant to common and statutory law) relating to
      this Agreement or the ESA or arising out of or relating to the subject
      matter of this Agreement, the ESA or Employee’s employment by Zale will
      be resolved exclusively through binding arbitration pursuant to the
      dispute resolution provisions contained in Article III and the
      provisions of Section 4.7 of the ESA.
    

    
      9.        By entering into this Agreement, the Company does not admit,
      and specifically denies, any violation of any contract (express or
      implied), local, state, or federal law, common or statutory.  Neither
      the execution of this Agreement nor compliance with its terms, nor the
      consideration provided for herein shall constitute or be construed as an
      admission by  Zale (or any of its agents, representatives, attorneys, or
      employers) of any fault, wrongdoing, or liability whatsoever, and
      Employee acknowledges and understands that all such liability is
      expressly denied.  This Agreement has been entered into in release and
      compromise of claims as stated herein and to avoid the expense and
      burden of dispute resolution.
    

    
      10.       If any provision or term of this Agreement is held to be
      illegal, invalid, or unenforceable, such provision or term shall be
      fully severable; this Agreement shall be construed and enforced as if
      such illegal, invalid, or unenforceable provision had never comprised
      part of this Agreement; and the remaining provisions of this Agreement
      shall remain in full force and effect and shall not be affected by the
      illegal, invalid, or unenforceable provision or by its severance from
      this Agreement.  Furthermore, in lieu of each such illegal, invalid, or
      unenforceable provision or term there shall be added automatically as a
      part of this Agreement another provision or term as similar to the
      illegal, invalid, or unenforceable provision as may be possible and that
      is legal, valid, and enforceable.
    

    

    

    
      Page 3
    

    
      
        

        

      

      
        

        

        
          

        

      

      
        

        

      

    

    

    

    
      11.       This Agreement and the ESA constitute the entire Agreement of
      the Parties, and supersede all prior and contemporaneous negotiations
      and agreements, oral or written. All prior and contemporaneous
      negotiations and agreements are deemed incorporated and merged into this
      Agreement and the ESA and are deemed to have been abandoned if not so
      incorporated.  No representations, oral or written, are being relied
      upon by any party in executing this Agreement other than the express
      representations of this Agreement and the ESA.  This Agreement cannot be
      changed or terminated without the express written consent of the
      Parties. The rights under this Agreement may not be assigned by
      Employee, unless Zale consents in writing to said assignment.  Employee
      represents that Employee has not assigned any of the claims related to
      the matters set forth herein.
    

    
      12.       This Agreement shall be exclusively governed by and construed
      in accordance with the laws of the State of Texas without regard to the
      conflicts of laws provisions of Texas law, or of any other jurisdiction,
      except where preempted by federal law.
    

    
      13.       One or more waivers of a breach of any covenant, term, or
      provision of this Agreement by any party shall not be construed as a
      waiver of a subsequent breach of the same covenant, term, or provision,
      nor shall it be considered a waiver of any other then existing or
      subsequent breach of a different covenant, term, or provision.
    

    
      14.       By executing this Agreement, Employee acknowledges and agrees
      that Employee:
    

    
      (a)       specifically waives any rights or claims arising under the
      ADEA and/or analogous state or local laws and Title VII of the Civil
      Rights Act of 1964 and other federal and local anti-discrimination and
      anti-retaliation laws;
    

    
      (b)       may take up to forty-five (45) calendar days from the
      Separation Date to consider whether or not Employee desires to execute
      this Agreement;
    

    
      (c)       may revoke this Agreement at any time during the seven (7)
      calendar day period after Employee signs and delivers this Agreement to
      Zale.  Any such revocation must be in writing and delivered to Zale’s
      Senior Vice President of Human Resources, Mary Ann Doran at 901 W.
      Walnut Hill Lane, Irving, TX 75038 by such seventh (7th) calendar
      day.  Employee understands that this Agreement is not effective, and
      Employee is not entitled to the Separation Pay and benefits in Paragraph
      4, until the expiration of this seven (7) calendar day revocation
      period.  Employee understands that upon the expiration of such seven (7)
      calendar day revocation period this entire Agreement will be binding
      upon Employee and will be irrevocable;
    

    

    

    
      Page 4
    

    
      
        

        

      

      
        

        

        
          

        

      

      
        

        

      

    

    

    

    
      (d)       any changes to this Agreement, whether material or immaterial,
      will not restart the running of the 45-day period;
    

    
      (e)       has carefully read and fully understands all of the provisions
      of this Agreement and that any and all questions regarding the terms of
      this Agreement have been asked and answered to Employee’s complete
      satisfaction;
    

    
      (f)       knowingly and voluntarily agrees to all of the terms set forth
      in this Agreement and to be bound by this Agreement;
    

    
      (g)       is hereby advised in writing to consult with an attorney and
      tax advisor of Employee’s choice prior to executing this Agreement and
      has had the opportunity and sufficient time to seek such advice;
    

    
      (h)       understands that rights or claims under the ADEA and Title VII
      of the Civil Rights Act of 1964 that may arise after the date this
      Agreement is executed are not waived; and
    

    
      (i)       the rights and claims waived in this Agreement are in exchange
      for consideration over and above anything to which Employee is already
      entitled; and
    

    

    

    
                15.       The Parties represent that they have the sole and
      exclusive right and full capacity to execute this Agreement.
    

    
                16.       The “Effective
      Date” of this Agreement is the date that is eight (8) days following
      the date on which Employee signs this Agreement, so long as Employee has
      not revoked acceptance of this Agreement before such date.
    

    
                17.       By executing this Agreement, Employee also
      acknowledges that Employee (a) is not relying upon any statements,
      understandings, representations, expectations, or agreements other than
      those expressly set forth in this Agreement and the ESA;  (b) has made
      Employee’s own investigation of the facts and is relying solely upon
      Employee’s own knowledge and the advice of Employee’s own legal counsel;
      and (c) knowingly waives any claim that this Agreement was induced by
      any misrepresentation or nondisclosure and any right to rescind or avoid
      this Agreement based upon presently existing facts, known or
      unknown.  The Parties stipulate that each Party is relying upon these
      representations and warranties in entering into this Agreement.  These
      representations and warranties shall survive the execution of this
      Agreement.
    

    
                18.       All terms and provisions of this Agreement, and the
      drafting of this Agreement, have been negotiated by the Parties at arm’s
      length and to mutual agreement, with consideration by and participation
      of each, and no party shall be deemed the scrivener of this Agreement.
    

    

    

    
      Page 5
    

    
      
        

        

      

      
        

        

        
          

        

      

      
        

        

      

    

    
      PLEASE READ CAREFULLY. THIS CONFIDENTIAL SEPARATION AGREEMENT AND
      RELEASE INCLUDES THE RELEASE OF ALL CLAIMS AGAINST THE COMPANY, KNOWN OR
      UNKNOWN, THAT MAY HAVE OCCURRED AS OF THE DATE OF THIS AGREEMENT. THIS
      AGREEMENT ALSO CONTAINS A PROVISION REQUIRING THE PARTIES TO RESOLVE ANY
      DISPUTES BY ARBITRATION.
    

    

    

    
      The parties have signed this Agreement on the dates written by the
      signatures below, to be effective on the Effective
      Date.  Notwithstanding any other provision in this Agreement, if
      Employee does not sign and deliver this Agreement to Mary Ann Doran at
      901 W. Walnut Hill Lane, Irving, TX  75038 on or before 46
      days following the Separation Date, then this Agreement will be null
      and void and Employee will not be entitled
      to the Separation Pay, outplacement services, or any other consideration
      described in this Agreement.
    

    

    

    

    

    
      EXECUTED in Irving, Texas on this 25th day of  June, 2009
    

    

    

    

    

    
      Date: June 25, 2009                                          /s/
      Steve Larkin                                 
    

    
      

      

      

    

    
      EXECUTED in Irving, Texas on this 25th day of June, 2009

    

    
                                                                          ZALE
      DELAWARE, INC.

Date:     June 25,
      2009                           By:      /s/
      Mary Ann Doran                       
                                                                           Mary
      Ann Doran
                                                              
      Its:       Senior Vice President Human
      Resources
    

    

    

    

    

    

    

    
      Page 6

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