May 31, 2006 Dr. Yungeng Hu 11A, 519 Xinhua Road Shanghai, China 200052 Re: CFO and President Employment Agreement Dear Dr. Hu:
Exhibit
10.2
May
31,
2006
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Re: CFO
and President Employment
Agreement
Dear
▇▇.
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On
behalf
of the Board of Directors (“Board”), I am pleased to offer you the position of
Chief
Financial Officer
and
President with The Hartcourt Companies, Inc. (the “Company”). This Employment
Agreement sets forth the terms of our offer of employment to you for your
approval and agreement.
1. Employment
by the Company.
(a) Duties.
You are
employed by the Company as its Chief Financial Officer and President, reporting
to the Company CEO and the Board. You have
the
standard duties and powers associated with the chief financial officer of a
company, and your duties may include other duties as reasonably assigned by
the
Board from time to time.
Notwithstanding the foregoing, you shall not be entitled to approve or bind
the
Company to any action or obligation that requires approval by the Board under
corporate law, the Articles of Incorporation, or bylaws of the Company, or
the
guidelines, policies, and procedures adopted and established from time to time
by the Board without Board approval..
(b) Company
Policies.
The
employment relationship between you and the Company is governed by the general
employment policies and practices of the Company; provided, however, that when
the terms of this Employment Agreement differ from or are in conflict with
the
Company’s general employment policies or practices, this Employment Agreement
will control.
(c) Board
Membership.
You as
an elected director of the Company shall serve in such capacity without
additional compensation. As a member of the Company’s Board, you are subject to
the provisions of the Company’s bylaws and all applicable general corporation
laws relative to your position on the Board.
2. Term
of Employment.
(a) Term.
Your
employment with the Company will be for 2 years, starting June 1,
2006.
(b) Survival.
Upon
the termination of your employment with the Company, for any reason, neither
you
nor the Company shall have any further obligation or liability under this
Employment Agreement to the other, except as set forth in Sections 5, 6, 7,
8,
9, 10, and 11 below.
3. Compensation
and Benefits.
(a) Salary.
You
will receive for your services an annual base salary of US$150,000 (the “Base
Salary”), payable in accordance with the Company’s standard payroll practices
and subject to standard withholdings for taxes and social security and the
like.
Your Base Salary will be reviewed at least annually.
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(b) Benefits.
During
your employment with the Company, you will be entitled to participate in any
group insurance, hospitalization, medical, dental, health and accident,
disability or similar plan or program or equivalent benefits of the Company
to
the extent that you are eligible under the general provisions of these plans.
The Company may, in its sole discretion and from time to time, establish
additional senior management benefit programs as it deems appropriate. You
understand that any benefit plans may be modified or eliminated in the sole
discretion of the Company in accordance with applicable law.
(d) Vacation.
You
will be entitled to a period of annual paid vacation time equal to not less
than
four weeks per year. Your eligibility to carryover your accrued vacation shall
be subject to the Company policy applicable to employees at a similar level
in
effect during the term of this Employment Agreement. You shall also be entitled
to pay, at your Base Salary rate, for any or all vacation not taken in a
calendar year, such payment to be made on the first regular payday following
the
end of the calendar year.
(e) Key
Person Insurance.
You
agree to take such actions as may be reasonably necessary or appropriate to
permit the Company to obtain a key person insurance policy insuring you and
naming the Company as beneficiary, should the Company wish to obtain such
insurance.
(f) Directors
and Officers Liability Insurance.
Company
will provide you during the term of this Employment Agreement the same level
of
coverage of directors and officers liability insurance that Company extends
to
its other directors and officers.
(g) Expenses.
Subject
to compliance with the Company’s normal and customary policies regarding
substantiation and verification of business expenses, you are authorized to
incur on behalf of the Company, and the Company will directly pay or shall
fully
reimburse you for, all customary and reasonable expenses incurred for promoting,
pursuing, or otherwise furthering the business of the Company and its
affiliates.
(h) Indemnification
Agreement.
As an
officer, director and employee, the Company will enter into a standard
indemnification agreement that will indemnify you to the maximum extent
permitted by law.
4.
Stock.
(a) The
Company will grant you an option to purchase common stock at an exercise price
per share equal to no more than $0.04 per share, equal to the fair market value
of the shares as of May 29, 2006, according to the following vesting schedule
and subject to number of shares available for option approved by shareholders.
The option will be exercisable within 5 years after vesting. In the event of
termination of your employment with the company, you will have 90 days to
exercise all the vested stock options, unvested stock options will automatically
be terminated.
(b) Vesting.
Your
Grant will vest on the following schedule:
| § |
7,500,000
share pro rata over 2 years of employment contract
period;
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| § |
2,000,000
shares upon each successful
acquisition;
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| § |
1,500,000
shares will be granted upon each full profitable
year
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5. Termination
of Employment.
(a) Termination
Upon Death.
If you
die during your employment with the Company, the Company shall pay to your
estate, or other designated beneficiary(s) as shown in the records of the
Company, any Base Salary and/or bonuses earned but unpaid as of the termination
date (which for purposes of this subsection (a) shall be the date of your
death); accrued but unused vacation time as of the end of the month in which
you
die; and benefits that you are entitled to receive as of the date of your
death
under benefit plans of the Company,
less
standard withholdings for tax and social security purposes. In the event
of your
death, the Company shall have no obligation to make any other payment, including
severance or other compensation, of any kind. All other benefits provided
by the
Company to you under its existing benefit plans shall be
determined under the provisions of those plans.
(b) Termination
Upon Disability. The
Company may terminate your employment if you suffer a disability that renders
you unable, as determined in good faith by the Board, to perform the essential
functions of your position, even with reasonable accommodation, for three
months
within any twelve month period. If your employment is terminated pursuant
to
this Section 5(b), you shall receive payment for any earned and unpaid Base
Salary and/or bonuses as of the termination date (which for purposes of this
subsection (b) shall be the date specified by the Board); accrued but unused
vacation time as of the end of the month in which the termination for disability
occurs; and benefits that you are then entitled to receive under benefit
plans
of the Company, less standard withholdings for tax and social security
purposes.
If your
employment is terminated as a result of a disability pursuant to this
Section 5(b), the Company also shall provide to you as severance the
payment of an amount equal to six months of your then Base Salary, less standard
withholdings for tax and social security purposes, in a lump sum on the
termination date.
Except
as
set forth in the immediately preceding paragraph, after
the
termination date, no other compensation of any kind or severance or other
payment of any kind or payment in lieu of notice shall be payable by the
Company
if your employment is terminated as a result of a disability. All benefits
provided by the Company under Section 3(b) shall be extended, at your election
and cost, to the extent permitted by the applicable insurance policies and
benefit plans of the Company, for six months after your termination date,
except
as otherwise required by law (e.g.,
COBRA
health insurance continuation election). Except as set forth in the immediately
preceding sentence, all benefits provided by the Company to you under this
Employment Agreement or otherwise shall cease as of your termination
date.
(c) Voluntary
Termination.
You
may
voluntarily terminate your employment with the Company at any time. If you
voluntarily terminate your employment, you will receive payment for any earned
and unpaid Base Salary and/or bonuses as of the date of such termination;
accrued but unused vacation time; and benefits you are entitled to receive
under
benefit plans of the Company, less standard withholdings for tax and social
security purposes, through the termination date, which for purposes of this
subsection (c) shall be the date upon which you voluntarily cease performing
your duties under this Employment Agreement. The Company shall have no further
obligation to pay any compensation (including severance) of any kind. All
benefits provided by the Company to you under this Employment Agreement or
otherwise shall cease as of the date of your voluntary termination.
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(d) Termination
for Cause.
(1) Termination;
Payment of Salary and Vacation.
The
Board may terminate your employment with the Company at any time for “cause” (as
defined below). In the event that your employment is terminated under this
subsection (d), you shall receive payment for all earned but unpaid Base
Salary; accrued but unused vacation time; and benefits you are then entitled
to
receive under benefit plans of the Company, less standard withholdings for
tax
and social security purposes, through the date of your termination, which
for
purposes of this subsection (d) shall be the date upon which such notice of
termination is given. The Company shall have no further obligation to pay
you
compensation of any kind nor to make any payment in lieu of notice. All benefits
provided by the Company to you under this Employment Agreement or otherwise
shall cease as of the termination date.
(2) Definition
of Cause.
For
purposes of this Employment Agreement, the Company shall have “cause” to
terminate your employment upon any of the following: (a) a material breach
by you of the terms of this Employment Agreement; (b) any breach of
fiduciary duty or act of theft, misappropriation, embezzlement, intentional
fraud, falsification of any employment or Company records, or other violation
of
applicable law or regulation or similar conduct by you involving the Company
or
any of its affiliates; (c) your conviction or plea of nolo
contendere
or the
equivalent involving a felony or a crime involving fraud or dishonesty;
(d) any damage of a material nature to the business or property of the
Company or any of its affiliates caused by your willful or grossly negligent
conduct; (e) the willful failure or refusal by you to perform reasonable
duties, responsibilities, or instructions from the Board; (f) engaging in
abuse
of alcohol, illegal drugs, or controlled substances in a manner that materially
interferes with your performance of your duties; or (g) improper disclosure
of
the Company’s confidential or proprietary information. No act, or failure to
act, by you shall be considered “willful” unless committed without a reasonable
belief that the act or omission was in the Company’s best interest.
(e) Termination
Without Cause.
The
Company, at any time without prior written notice, may terminate you without
cause. If your employment is terminated without cause you shall receive payment
for all earned but unpaid Base Salary and/or bonuses as of the termination
date
(which for purposes of this subsection (e), shall be the date of your
termination); accrued but unused vacation time; and benefits you are then
entitled to receive under benefit plans of the Company, less standard
withholdings for tax and social security purposes, as of the termination
date.
Upon execution by you of an effective release of claims substantially in
the
form attached as Exhibit
A,
the
final wording of which shall be determined by the Company in conjunction
with
its legal counsel (the “Release”) the Company shall also pay to you as severance
(1) an amount equal to two months of your then base salary, less standard
withholdings for tax and social security purposes, in a lump sum on the
termination date; (2) continuation of all benefits you are then entitled
to
receive under benefit plans of the Company for a period of six months; and
(3)
Acceleration of vesting of unvested stock options as described in Section
5(h)
below, effective upon such termination date (“Acceleration Date”). No other
compensation of any kind or severance or other payment of any kind shall
be
payable by the Company after such termination date. All benefits provided
by the
Company to you under this Employment Agreement or otherwise shall cease as
of
the termination date.
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(f) Change
of Control.
If your
employment is terminated without your written consent within twelve months
after
a Change of Control (as defined below), you shall receive payment for all
earned
but unpaid Base Salary and/or bonuses, as of the termination date (which
for
purposes of this subsection (f), shall be the date of your termination);
accrued
but unused vacation time; and benefits you are then entitled to receive under
benefit plans of the Company, less standard withholdings for tax and social
security purposes, as of the termination date. In such event, the Company
shall
also provide to you as severance (1) the payment of an amount equal to two
months of your then base salary, less standard withholdings for tax and social
security purposes, in a lump sum on the termination date; (2) continuation
of all benefits you are then entitled to receive under benefit plans of the
Company for a period of six months; and (3) Acceleration of vesting of unvested
stock as described in Section 5(h) below, effective upon such termination
date
(“Acceleration Date”). No
other
compensation of any kind or severance or other payment of any kind shall
be
payable to you by the Company after such termination date. All benefits provided
by the Company to you under this Employment Agreement or otherwise shall
cease
as of the termination date.
(1) For
purposes of this Section 5(f), a Change of Control shall be deemed to occur
upon
the consummation of any one of the following events: (i) a sale of all or
substantially all of the assets of the Company; (ii) a merger or consolidation
in which the Company is not the surviving corporation (other than a transaction
the principal purpose of which is to change the state of the Company’s
incorporation or a transaction in which the voting securities of the Company
are
exchanged for beneficial ownership of at least a majority of the voting
securities of the acquiring corporation); (iii) a merger or consolidation
in
which the Company is the surviving corporation and less than 50% of the voting
securities of the Company that are outstanding immediately after the
consummation of such transaction are beneficially owned, directly or indirectly,
by the persons who owned such voting securities immediately prior to such
transaction; (iv) any transaction or series of related transactions after
which
any person (as such term is used in Section 13(d)(3) of the Securities Exchange
Act of 1934), other than any employee benefit plan (or related trust) sponsored
or maintained by the Company, becomes the beneficial owner of voting securities
of the Company representing a majority of the combined voting power of all
of
the voting securities of the Company; or (v) the liquidation or dissolution
of
the Company.
(2) For
purposes of Section 5(f)(1), any person who acquired securities of the
Company prior to the occurrence of the specified transaction in contemplation
of
such transaction and who immediately after such transaction possesses direct
or
indirect beneficial ownership of at least 10% of the securities of the Company
or the surviving corporation, as appropriate (or if the Company or the surviving
corporation is a controlled affiliate, then of the appropriate entity as
determined above), shall not be included in the calculation of the group
of
persons who owned such voting securities immediately prior to such
transaction.
(g) Termination
for Good Reason.
Notwithstanding anything in this Section 5 to the contrary, you may voluntarily
end your employment with the Company and receive the benefits detailed in
Section 5(e) upon or within 90 days following the occurrence of an event
constituting “Good Reason,” which for purposes of this Section 5(g) shall mean
any of the following conditions, provided that the underlying condition persists
more than 15 business days after written notification to the Board: (1) a
material adverse change in your position causing it to be of materially less
responsibility or authority without your written consent, and such a materially
adverse change shall in all events be deemed to occur if you no longer serve
as
Chief
Financial Officer and President,
unless
you consent in writing to such change; (2) a reduction, without your written
consent, in your level of Base Salary; (3) the Company fails to obtain the
assumption of this Employment Agreement by any successor or assign of the
Company; (4) the Company without your consent requires your permanent relocation
from the Shanghai Area; or (5) any material breach by the Company of any
material provision of this Agreement.
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(h) Acceleration
of Vesting.
“Acceleration” means that all additional unvested shares from all outstanding
option grants to you will vest immediately upon the Acceleration
Date.
(i) At-Will
Employment.
You
understand and agree that your employment with the Company is at-will, which
means that either you or the Company may, subject to the terms of this
Employment Agreement, terminate this Employment Agreement at any time, with
or
without cause, as set forth in this Employment Agreement. Any modification
of
the at-will nature of this Employment Agreement must be in writing and executed
by you and the Company.
6. Proprietary
Information Obligations.
You
agree to sign and abide by the terms of the Company’s standard form of
intellectual property assignment and employee confidentiality agreement,
if
any.
7. Noninterference.
While
employed by the Company pursuant to this Employment Agreement and for a period
of six months after the date of your termination, you agree not to solicit
or
hire or attempt to solicit or hire, directly or indirectly, any employee
of the
Company or any affiliate.
8. Injunctive
Relief.
The
parties agree that damages would be an inadequate remedy for the Company
in the
event of a breach or threatened breach of Section 6, 7 or 8 of this
Employment Agreement by you, and in the event or any such breach or threatened
breach, the Company may, either with or without pursuing any potential damage
remedies, obtain and enforce an injunction prohibiting you from violating
such
section of this Employment Agreement and requiring you to comply with its
terms.
9. Warranties
and Representations.
You
hereby represent and warrant to the Company that you:
(a) are
not
now under any obligation of a contractual or quasi-contractual nature known
to
you that is inconsistent or in conflict with this Employment Agreement or
that
would prevent, limit, or impair the performance by you of any of your
obligations under this Employment Agreement; and
(b) have
been
or have had the opportunity to be represented by legal counsel in the
preparation, negotiation, execution, and delivery of this Employment Agreement
and understand fully its terms and provision.
10. Dispute
Resolution and Binding Arbitration.
You and
the Company agree that if a dispute arises concerning or relating to your
employment with the Company, such dispute shall be submitted to binding
arbitration in accordance with the employment rules of the American Arbitration
Association then in effect. The arbitration shall take place in Los Angeles,
California, and both you and the Company agree to submit to the jurisdiction
of
the arbitrator selected in accordance with American Arbitration Association
rules and procedures. You and the Company agree that the arbitration procedure
provided for in this section will be the exclusive avenue of redress for
any
disputes relating to or arising from your employment with the Company, and
that
the award of the arbitrator shall be final and binding on both parties, and
nonappealable. The arbitrator shall have discretion to award monetary and
other
damages, or no damages, and to fashion such other relief as the arbitrator
deems
appropriate. The arbitrator shall also have discretion to award the prevailing
party reasonable costs and attorneys’ fees incurred in bringing or defending an
action under this provision. The costs and expenses relating to the arbitration
proceeding itself, including the fees of the arbitrator, shall be borne by
the
Company.
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11. Miscellaneous.
(a) Notices.
Any
notice or other communication required or permitted under this Employment
Agreement shall be in writing and shall be deemed to have been duly given
(a) on
the day of delivery if delivered in person; (b) on the second business day
following the date of dispatch if (i) delivered by an internationally-recognized
express courier service, (ii) delivered by facsimile upon confirmation of
receipt, or (iii) sent by e-mail, if confirmed by first-class mail or
acknowledged by the recipient or recipient’s e-mail system; (c) on the fourth
business day following the date of mailing if delivered by registered or
certified mail, return receipt requested, postage prepaid. All notices shall
be
sent to the addresses specified below, unless such other address may be
designated by notice given in accordance with this Section.
To
the
Company:
The
Hartcourt Companies, Inc.
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Attention:
Chairman of the Board
To
you:
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or
to
such other address or to the attention of such other person as the recipient
party will have specified by prior written notice to the sending
party.
(b) Severability.
If any
term or provision (or any portion) of this Employment Agreement is determined
by
a court to be invalid, illegal or incapable of being enforced by any rule of
law
or public policy, all other terms and provisions (or other portions) of this
Employment Agreement shall nevertheless remain in full force and effect. Upon
such determination that any term or provision (or any portion) is invalid,
illegal or incapable of being enforced, this Employment Agreement shall be
deemed to be modified so as to effect the original intent of the parties as
closely as possible to the end that the transactions contemplated hereby and
the
terms and provisions are fulfilled to the greatest extent possible.
(c) Entire
Agreement.
This
document constitutes the final, complete, and exclusive embodiment of the entire
agreement and understanding between the parties related to the subject matter
hereof and supersedes and preempts any prior or contemporaneous understandings,
agreements, or representations by or between the parties, written or oral.
Without limiting the generality of the foregoing, except as provided in this
Employment Agreement, all understandings and agreements, written or oral,
relating to the employment of you by the Company, or the payment of any
compensation, or the provision of any benefit in connection therewith or
otherwise, are hereby terminated and shall be of no future force and
effect.
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(d) Counterparts.
This
Employment Agreement may be executed on separate counterparts, any one of which
need not contain signatures of more than one party, but all of which taken
together will constitute one and the same agreement. Signatures may be exchanged
by electronic facsimile with machine evidence of transmission.
(e) Successors
and Assigns.
This
Employment Agreement is intended to bind and inure to the benefit of and be
enforceable by you and the Company, and their respective successors and assigns,
except that you may not delegate any of your duties hereunder and you may not
assign any of your rights hereunder without the prior written consent of the
Company. If you should die while any amounts would still be payable to you
hereunder if you had continued to live, all amounts payable hereunder shall
be
paid in accordance with the terms of this Employment Agreement to your estate,
unless you have provided written notice to the Company specifying a different
beneficiary or beneficiaries (which notice(s) may be changed from time to time
at the sole discretion of you).
(f) Attorneys’
Fees.
If any
legal proceeding is necessary to enforce or interpret the terms of this
Employment Agreement, or to recover damages for breach, the prevailing party
shall be entitled to reasonable attorneys’ fees, as well as reasonable costs and
disbursements, whether taxable or not, in addition to any other relief to which
you or the Company may be entitled.
(g) Amendments.
No
amendment or other modification to this Employment Agreement may be made except
by a writing signed by both parties. Except for your estate pursuant to Section
5(a) hereof, nothing in this Employment Agreement, express or implied, is
intended to confer upon any third person any rights or remedies under or by
reason of this Employment Agreement.
(h) Choice
of Law and Venue.
All
questions concerning the construction, validity and interpretation of this
Employment Agreement will be governed by the internal law, and not the law
of
conflicts, of the State of California. The exclusive venue for any such action
shall be in the U.S. federal or state courts having within their venue Los
Angeles, California.
(i)
Fees
and Expenses.
Each of
the parties shall bear its own fees and expenses incurred in connection with
the
preparation of this Employment Agreement and related transactions.
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We
are
eager to have you join us as a key member of the Hartcourt Companies team.
Please indicate your acceptance of the terms of this Employment Agreement by
signing below.
|
Acknowledged
and agreed:
_____________________
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Sincerely,
The
Hartcourt Companies, Inc.
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Chairman
of the Board of Directors
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EXHIBIT
A
RELEASE
AGREEMENT
OF
THE HARTCOURT COMPANIES, INC.
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(“Releasor”) agrees that the payments and benefits he has received from The
Hartcourt Companies, Inc. (the “Company”) are in full satisfaction of all
obligations of the Company to the Releasor arising out of or in connection
with
the Releasor’s employment including, without limitation, all salary, bonuses,
sick pay, reimbursement of expenses, and that the payment and benefits that
will
be provided to Releasor in accordance with Section 4 of Releasor’s Employment
Agreement entered into as of May 31, 2006 (the “Employment Agreement”), as
applicable, constitute consideration for the covenants and releases of the
Releasor as set forth in this Release Agreement (“Severance
Benefits”).
1. Releasor
acknowledges that the Severance Benefits represent a substantial benefit to
Releasor to which Releasor would not have been entitled had he not entered
into
this Release Agreement. Releasor further agrees that The Company has fully
compensated Releasor for all salary, bonuses, commissions and benefits that
he
earned through the date of termination, or pursuant to any employment or other
agreements.
2. In
consideration of the Company’ promise to give Releasor the Severance
Benefits:
a. Releasor,
on behalf of himself and on behalf of all persons acting on Releasor’s behalf
(including but not limited to Releasor’s estate, heirs, administrators,
executors, successors, and assigns) hereby releases, indemnifies and hold
harmless the Company, and all its subsidiaries, affiliated companies, business
and operating units and each such entities’ officers, agents, representatives,
shareholders, employees, successors, predecessors, and assigns (hereinafter,
collectively, “Releasees”) from any and all claims, actions, charges, causes of
action, rights, demands, damages of whatever nature, known or unknown, existing
as of the date Releasor signed this Release Agreement arising out of or relating
to Releasor’s employment or the termination of Releasor’s employment with the
Company, including but not limited to, any claims that arise under the common
law of contracts, implied or express contract or covenant, tort, public policy,
wrongful termination, defamation or any claim, under either state or federal
law, or agency charge of discrimination based on race, age, marital status,
military status, gender, religion, national origin, handicap, disability, sexual
orientation, retaliation and specifically including, but not limited to, any
and
all claims arising under Title VII, the California Fair Employment and Housing
Act, the Age Discrimination in Employment Act of 1967, the Americans with
Disabilities Act, the Family and Medical Leave Act, the California Family Rights
Act (all of the foregoing as amended), and
any
other statutory or common law claims.
b. Releasor
also understands that, in addition to known claims, unknown claims may exist,
and that a portion of the consideration paid by The Company is paid to obtain
Releasor’s release of both known and unknown claims. By signing this Release
Agreement, Releasor also expressly waives the provisions of California Civil
Code section 1542, which provide as follows:
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“A
general release does not extend to claims which the creditor does not know
or
suspect to exist in his favor at the time of executing the release, which if
known by him must have materially affected his settlement with the
debtor.”
c. Releasor
agrees that for a period of six months following the date this Release Agreement
becomes effective Releasor will not solicit or hire or attempt to solicit or
hire, directly or indirectly, any employee of the Company or any affiliate.
3. By
entering into this Release Agreement, neither Releasor nor the Company admits
liability, wrongdoing or violation of any law. The parties agree that nothing
in
this Agreement, nor any of the discussions connected with those documents,
will
be construed to constitute, or will be offered or received as, evidence of
an
admission of liability or wrongdoing by any or all of the Releasees. Releasor
represents and warrants that neither Releasor nor anyone on his behalf has
filed
or otherwise made any claim, charge, or complaint with, or commenced any action
or proceeding in, any federal, state or local court or administrative agency
or
governmental entity against any or all of the Releasees.
4. Nothing
in this Release Agreement will waive or otherwise release Releasor from any
obligation Releasor may have to the Company, including without limitation,
any
proprietary information, invention assignment, confidentiality, or similar
agreement between Releasor and the Company.
5. Releasor
may not execute this Release Agreement prior to Releasor’s last day of
employment with Releasor.
6. This
Release Agreement shall be governed by, and construed and enforced in accordance
with, the laws of the State of California, without regard to its choice of
law
provisions.
7. Releasor
and The Company agree that the provisions of section 1654 of the California
Civil Code shall not apply to the interpretation of this Release
Agreement.
8. Releasor
acknowledges his understanding that he may take 21 days to consider this Release
Agreement and that he has been advised that he should consult with an attorney,
if he decides to do so, prior to executing this Release Agreement. Executive
further acknowledges that he understands that he may revoke this Release
Agreement within seven days of his execution of this document and that the
consideration to be paid to his pursuant to this Release Agreement will be
paid
only after that seven day revocation period and will be in accordance with
Section 4 of the Employment Agreement.
9. This
Release Agreement shall not cover obligations of the Company to defend and/or
indemnify Releasor in his capacity as an officer or director of the Company
in
accordance with the provision of the Company’s Articles of Incorporation,
Bylaws, and applicable law. In addition, it is understood that this Release
Agreement shall not preclude Releasor from bringing an action to enforce the
terms of this Release Agreement or any indemnification obligations on the part
of the Company.
10. This
Release Agreement sets forth the entire agreement between Releasor and the
Company, and Releasor acknowledges by signing below that Releasor has not relied
upon any representations, written or oral, not set forth in this Release
Agreement. Releasor further acknowledges that this Agreement may not be changed
or modified except by a subsequent written agreement signed by both Releasor
and
the Company.
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_______,
2006
Page
12
11. Should
any provision of this Agreement be held invalid or illegal, such invalidity
or
illegality shall not invalidate the whole of this Agreement. Upon such
determination that any term or provision (or any portion) is invalid, illegal
or
incapable of being enforced, this Release Agreement shall be deemed to be
modified so as to effect the original intent of the parties as closely as
possible to the end that the transactions contemplated hereby and the terms
and
provisions are fulfilled to the greatest extent possible.
12. This
Release Agreement contains all of the terms, promises, representations, and
understandings made between the parties and supersedes any other representation,
understandings or agreements by or between the parties, whether oral or written.
Any waiver by the Company of a breach of any provision of this Release Agreement
shall not operate or be construed as a waiver of any subsequent breach of such
provision or any other provision of this Agreement.
13. Releasor
represents that Releasor has read this Agreement and understands its provisions,
and that Releasor has had the opportunity (whether or not such opportunity
was
taken) to consult with legal counsel of his own choosing.
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THE
HARTCOURT COMPANIES, INC.
By____________________________
Name:
▇▇▇▇▇ ▇▇▇▇
Title:
Chairman of the Board
By_____________________________
▇▇.
▇▇▇▇▇▇▇ ▇▇
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