Document:

Exhibit 10.1 to CapSource Financial, Inc. Form 10-Q for quarter ended March 31, 2008

Exhibit 10.1

CONFIDENTIAL SEPARATION AGREEMENT AND GENERAL RELEASE

RECITALS

WHEREAS, Steven J. Kutcher (“Kutcher”or you) was employed by the Capsource Financial, Inc. (“Company”) as Chief Financial Officer pursuant to an Employment Contract dated January 9, 2006 and Amended April 26, 2006; 

WHEREAS, on March 25, 2008, pursuant to a letter of resignation, Kutcher voluntarily terminated his employment with the Company effective April 15, 2008;

WHEREAS, Kutcher and the Company have agreed to certain benefits in connection with the termination of the employee relationship; 

NOW THEREFORE the Parties agree as follows: 

TERMS OF AGREEMENT

1.    This Agreement shall not be in any way construed as an admission by the Company that it has acted wrongfully with respect to Kutcher or any other person, or that Kutcher has any rights whatsoever against the Company.

2.    This Agreement shall not be in any way construed as an admission by Kutcher that he has acted wrongfully with respect to the Company or any other person, or that the Company has any rights whatsoever against Kutcher.

3.    The Company agrees that Kutcher is due the following amounts pursuant to his  employment contract and by other agreements:

 

	
            Severance payment
 	
             
 	
            $
 	
            71,666.65
 	
             
 
	
            Unused vacation pay
 	
             
 	
            $
 	
            10,584.62
 	
             
 
	
            Stock payment in lieu of issuance
 	
             
 	
            $
 	
            7,000.00
 	
             
 
	
            Accrued salary
 	
             
 	
            $
 	
            13,856.88
 	
             
 
	
            Total Amount Due
 	
             
 	
            $
 	
            103,108.15
 	
             
 

Accordingly the total amount due Kutcher pursuant to this Agreement is $103,108.15 (“Total Amount Due”).

 

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4.    In exchange for the promises contained in this Agreement and release of claims as set forth below, and provided that you sign this agreement and return it to me by 5:00 PM, (CDT), March 26, 2008, and do not revoke this Agreement as set forth in Paragraph 14(d):

a.  The Company will pay you the 20% of the Total Amount Due each month over a period of five (5) consecutive months beginning April 15, 2008, and ending August 15, 2008. 

b.  Unpaid amounts under this Agreement will accrue interest at the rate of 11% per annum.

c.  The Company will arrange for all amounts due pursuant to this Agreement to be personally guaranteed by the Company’s Chairman, Randolph M. Pentel.

d.  Notwithstanding the foregoing, should CapSource sell its REMEX operating facility or the capital stock thereof for a cash price in excess of Eight Hundred Thousand Dollars ($800,000) U.S. CapSource will, within two (2) business days of the closing of such transaction pay to Kutcher all unpaid amounts due to him pursuant to this agreement. 

5.    In consideration of the promises contained in this Agreement, Kutcher agrees:

a.  On behalf of yourself and anyone claiming through you, irrevocably and unconditionally to release, acquit and forever discharge the Company and/or its parent corporation, subsidiaries, divisions, predecessors, successors and assigns, as well as each’s past and present officers, directors, employees, shareholders, trustees, joint venturers, partners, and anyone claiming through them (hereinafter “Releaseees” collectively), in each’s individual and/or corporate capacities, from any and all claims, liabilities, promises, actions, damages and the like, known or unknown, which you ever had against any of the Releasees arising out of or relating to your employment with the Company and/or the termination of your employment with the Company. Said claims include, but are not limited to: (1) employment discrimination (including claims of sex discrimination and/or
sexual harassment) and retaliation under Title VII (42 U.S.C.A. 2000e etc.) and under 42 U.S.C.A. section 1981 and section 1983, age discrimination under the Age Discrimination in Employment Act (29 U.S.C.A. sections 621-634) as amended, under any relevant state statutes or municipal ordinances; (2) disputed wages; (3) wrongful discharge and/or breach of any alleged employment contract; and (4) claims based on any tort, such as invasion of privacy, defamation, fraud and infliction of emotional distress.

b.  That you shall not bring any legal action against any of the Releasees for any claim waived and released under this Agreement and that you represent and warrant that no such claim has been filed to date. You further agree that should you bring any type of administrative or legal action arising out of claims waived under this Agreement, you will bear all legal fees and costs, including those of the Releasees.

 

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6.    You agree to refer any and all reference checks to the Steven E. Reichert, General Counsel and you know that any such references will be limited to confirmation of your dates of employment and last position held. The obligation under this Paragraph is separable and any failure by the Company to perform the obligation in this Paragraph will only give rise to an action to enforce this Paragraph.

7.    You agree that you will not, directly or indirectly, disclose the fact of and terms of this Agreement, including the severance benefits, to anyone other than your attorney, except to the extent such disclosure may be required for accounting or tax reporting purposes or as otherwise required by law. 

8.    This agreement shall be binding on the parties and upon their heirs, administrators, representatives, executors, successors and assigns and shall inure to their benefit and to that of their heirs, administrators, representatives, executors, successors and assigns. 

9.    On or before April 18, 2008, you will return all of the Company’s property in your possession, including, but not limited to, materials, such as customer lists, mailing lists, account information, samples, prototypes, price lists and pricing information any phone cards, cellular phone, automobile and all of the tangible and intangible property belonging to the Company and relating to your employment with the Company. You further represent and warrant that you have not retained any copies, electronic or otherwise, of such property.

10.  You will cooperate fully with the Company in its defense of or other participation in any administrative, judicial or other proceeding arising from any charge, complaint or other action which has been or may be filed. 

11.  You will not disclose any confidential or proprietary information (specifically including pricing, margins, key customer contacts and their profiles not generally known to the public) which you acquired as an employee of the Company to any other person or entity, or use such information in any manner that is detrimental to the interest of the Company. 

12.  You agree that you will not make any comments relating to the Company or its employees which are critical, derogatory or which may tend to injure the business of the Company. 

13. In the event that you breach any of your obligations under Paragraphs 8 through 11, any outstanding obligations of the Company hereunder shall immediately terminate, and any payments previously made to you pursuant to Paragraph 3 shall be returned to the Company.

 

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14.  You also acknowledge that you have been informed pursuant to the federal Older Workers Benefit Protection Act of 1990 that: 

a.  You have the right to consult with an attorney before signing this Agreement;

b.  You do not waive rights or claims under the federal Age Discrimination in Employment Act that may arise after the date this waiver is executed;

c.  You have two (2) days from the date of this letter to consider this Agreement;

d.  You have five (5) days after signing this Agreement to revoke the Agreement, and the Agreement will not be effective until that revocation period has expired.

15.  The provisions of this Agreement are severable. If any provision is held to be invalid or unenforceable, it shall not affect the validity or enforceability of any other provision. 

16.  This Agreement sets forth the entire agreement between you and the Company and supersedes any and all prior oral or written agreements or understandings between you and the Company concerning the subject matter of this Agreement. This Agreement may not be altered, amended or modified, except by a further written document signed by you and the Company.

17.  You represent that you fully understand your right to review all aspects of this Agreement with an attorney of your choice, that you have had the opportunity to consult with an attorney of your choice, that you have carefully read and fully understand all the provisions of this Agreement and that you are freely, knowingly and voluntarily entering into this Separation Agreement and General Release.

Accepted and agreed to on this 25th  day of March, 2008.

	 Steven J. Kutcher:
 
	  
 
	 /s/ Steven J. Kutcher
 
	 Employee signature
 
	  
 
	  
 
	  
 
	 Capsource Equipment Company, Inc.
 
	  
 
	 /s/ Steven Reichert
 
	  
 
	 By: Steven Reichert
 
	  
 
	 Its: Vice President and General Counsel
 

            

 

 

4Exhibit 10.2 to CapSource Financial, Inc. Form 10-Q for quarter ended March 31, 2008

Exhibit 10.2

PERSONAL GUARANTY

 

WHEREAS, Steven J. Kutcher, (“Kutcher”) was employed by CapSource Financial, Inc., a Colorado corporation (“Company”);

 

WHEREAS, Kutcher’s employment with the Company was terminated pursuant to a Confidential Separation Agreement and General Release dated March 25, 2008 (“Separation Agreement”); 

 

WHEREAS, the separation Agreement provides for certain amounts to be paid by the Company to Kutcher totaling $103,108.15 (“Amount Due”) plus accrued interest (collectively the “Indebtedness”); 

 

WHEREAS, Kutcher is willing to provide such additional time for the payment of the Amount Due conditioned upon said Indebtedness being personally guaranteed as to the payment thereof by Randolph M. Pentel, Chairman of CapSource Financial, Inc. and an individual residing in Minnesota, (“Guarantor”);

 

1.        NOW, THEREFORE, the Guarantor guarantees that Debtor will promptly pay the full amount of the Indebtedness  as and when the same shall in any manner be or become due according to the terms and conditions provided in the Separation Agreement. Notwithstanding the foregoing, the Guarantor shall have three (3) business days from the date due to make any payment required by the Separation Agreement and guaranteed by this agreement. 

 

2.        Without limiting the generality of the foregoing, the Guarantor agrees that he will pay the full amount of Indebtedness now or hereafter due as, and when the same shall in any manner be or become due according to the terms and conditions provided in the Separation Agreement. 

 

3.        The Guarantor hereby waives demand, notice of dishonor, presentment for payment, protest and notice of protest and of non-performance on all of said Indebtedness; and if said Indebtedness is renewed, or if the time for payment thereof be extended (to which Guarantor consents) either with or without notice to Guarantor, Guarantor unconditionally guarantee the payment of such Indebtedness at t he time fixed for the payment thereof in and by any such renewal or extension.  Guarantor further waives all rights, by statute or otherwise, to require Kutcher to institute suit against the Company to obtain performance under this Agreement; also to exercise diligence in enforcing this or any other instrument.

 

4.        To the extent permitted by law, Guarantor waives all defenses legally available to Guarantor, Guarantor being bound to the payment of said Indebtedness of the Company. The holder of the Note may take any new or additional or substituted security from time to time without in any way impairing the obligation of the undersigned; and the impairment of the security, which said holder may from time to time hold as security for said loan, shall in no way operate to discharge the undersigned in whole or in part, it being specifically agreed that the holder is not required to exercise diligence to enforce its rights against the original maker of said Note.  The holder is hereby authorized at any time, in its sole discretion and without notice, to take, change, release or in any way deal with the security herein; but the holder of
the Note shall be under no obligation to collect or to protect any of such security or said indebtedness, and its neglect or failure to collect or protect the same is excused.  Acceptance of the Guarantee is waived.

5.        Forbearance on the part of Kutcher to take steps to enforce payment of said indebtedness arising from Guarantor default in any respect whatever, or the giving of further time to the Company, shall in no way release the undersigned, but the undersigned shall remain liable hereunder for the prompt payment of said Indebtedness.

 

6.        This Guarantee is for the use and benefit of Kutcher, who in the first instance will be owed the Indebtedness.  This Guarantee shall also be for the use and benefit of any subsequent owner of said right to receive the Indebtedness and each owner of said right may assign this Guarantee to his successor owner of said Indebtedness.

 

7.        All reasonable costs and expenses, including attorney’s fees, incurred by the holder of said Indebtedness to enforce this Guarantee, shall be paid by the undersigned.

 

8.        The liability of the Guarantor shall continue until payment is made of the Indebtedness as required by the Separation Agreement. 

 

9.        Guarantor consents that, without affecting the Guarantor’s liability, Kutcher may, without notice to or consent of Guarantor on such terms as Kutcher may deem advisable, extend in whole or in part, by renewal or otherwise, the time of payment of the Indebtedness or any part thereof now or hereafter owing by the Company to Kutcher or held by Kutcher as security for any obligation herein described, or may do or refrain from doing any act whatever.  Guarantor also consents that Kutcher may release, surrender, exchange, modify, impair or extend the periods of duration or the time for performance or payment of any collateral securing the obligations of the Company to Kutcher, and may also settle or compromise any claim of Kutcher against the Company or against any other person or corporation whose obligation is held by
Kutcher as collateral security for any obligation of the Company or Kutcher.  Guarantor hereby ratifies and affirms any such actions, and all such actions shall be binding on Guarantor, and Guarantor hereby waives all defenses, counterclaims or offsets which Guarantor may have.

 

10.       Guarantor also waives notice of failure of any person to pay to Kutcher any debt held by Kutcher as collateral security for the obligations of the Company, and all defenses, offsets and counterclaims which Guarantor may at any time have to any claim of Kutcher against the Company.

 

11.       Guarantor represents that at the time of the execution and delivery of this Guaranty nothing exists to impair the effectiveness of this Guarantee.

 

12.       Kutcher may, at its option, proceed in the first instance against the Guarantor to collect the obligations covered by this Guarantee without first proceeding against any other person, firm or corporation, and without resorting to any property held by Kutcher as collateral security.

 

Executed by the undersigned this 25th day of March, 2008.

 

GUARANTOR:

 

	
            /s/ Randolph M. Pentel
 
	
            Randolph M. Pentel

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