Exhibit 10.46
SEVERANCE AGREEMENT
This Severance Agreement (the
“Agreement”) is entered into as of May 23,
2008 between China Direct, Inc., a Florida corporation
(the “Company”) and Lazarus Rothstein
(“Employee”).
WHEREAS,
the Company desires to employ Employee as its Vice President,
Secretary and General Counsel and Employee desires to serve in such
capacity on behalf of the Company.
NOW,
THEREFORE, in consideration of the promises and of the mutual
covenants and agreements hereinafter set forth, the Company and the
Executive hereby agree as follows:
1.
Definitions
For purposes of this Agreement, the following
capitalized terms shall have the meanings set forth
below. Non-capitalized terms shall have their ordinary
meanings.
“ Affiliate ” shall mean any
person, limited liability company, corporation, partnership,
association or any other entity controlling, controlled by or under
common control with the Company. “Control” shall mean
the ownership by the Company of greater than fifty (50%) of
the voting interests of such person or any other such arrangement
as constitutes the possession, directly or indirectly, of power to
direct or cause the direction of management or policies of any such
person, corporation or entity, through ownership of voting
securities, by contract or otherwise.
“ Base Salary ” shall mean
the weekly or monthly base salary, as the context requires, of
Employee as of the effective date of termination of
Employee’s employment.
“ Cause ” shall
mean
(a) any violation by Employee of the
Company’s Code of Business Conduct or any other material
Company policy applicable to Employee;
(b) the commission of an intentional act of
fraud, embezzlement, theft or dishonesty against the Company by
Employee;
(c) the conviction of Employee for (or the
pleading by Employee of nolo contendere to) any crime which
constitutes a felony, or a misdemeanor involving moral turpitude,
or which, in the reasonable opinion of the Company, has caused
material embarrassment to the Company;
(d) the gross neglect or willful failure by
Employee to perform his duties and responsibilities in all material
respects, if such breach of duty is not cured within 10 days after
receipt of written notice thereof to Employee by the Company or its
Board of Directors; or
(e) Employee’s failure to obey the
reasonable and lawful orders or instructions of the Chief Executive
Officer, Employee’s supervisor or the Board of Directors,
unless such failure is cured within 10 days after receipt of
written notice thereof to Employee by the Company or the Board of
Directors.
For purposes of
clause (d), no act, or failure to act, on the part of Employee
shall be deemed “willful” unless done, or omitted to be
done, by Employee other than in good faith and without reasonable
belief that such act, or failure to act, was in the best interest
of the Company.
“
Change of Control ” shall mean the occurrence of any
of the following events:
(i) the consummation of any transaction or
series of transactions (including, without limitation, any merger
or consolidation) the result of which is that any
“person” (as such term is used in Section 13(d)(3)
of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”)) becomes the “beneficial
owner” (as such term is defined in Rule 13d–3 and Rule
13d–5 under the Exchange Act), directly or indirectly, of
50% or more of the voting interests of the Company;
or
(ii) the Company’s Board of Directors
shall approve a sale, lease, transfer, conveyance or other
disposition of all or substantially all of the assets of the
Company, and such transaction shall have been consummated;
or
(iii) the Company’s Board of Directors
shall approve any merger, consolidation, or like business
combination or reorganization of the Company, the consummation of
which would result in the occurrence of any event described in
clause (i) above, and such transaction shall have been
consummated.
“ Good Reason ” shall
mean
(a) that without Employee’s prior
written consent and in the absence of Cause, one or more of the
following events occurs:
(i) any materially adverse change in
Employee’s authority, duties, or responsibilities or any
assignment to Employee of duties and responsibilities materially
inconsistent with those normally associated with Employee’s
position; or
(ii) a reduction in Employee’s salary or
benefits, to the extent a reduction in benefits represent
reductions not experienced in general by other senior executives;
or
(iii) Employee is required to be primarily
based at any office more fifty (50) miles outside the
metropolitan area of Employee’s then current business
address, excluding travel reasonably required in the performance of
Employee’s responsibilities; and
(b) within sixty (60) calendar days of
learning of the occurrence of any event specified in clause (a),
and in the absence of any circumstances that constitute Cause,
Employee terminates employment with the Company, by written notice
to the Company; provided, however, that the events set forth in
subparagraphs (a)(i), (a)(ii) or (a)(iii) shall not constitute Good
Reason for purposes of this Agreement unless, within thirty
(30) calendar days of Employee’s learning of such event,
Employee gives written notice of the event to the Company, and the
Company fails to remedy such event within thirty (30) calendar
days of receipt of such notice.
“ Permanent Disability ”
shall mean Employee’s inability to perform such
Employee’s duties and responsibilities for a period of 90
consecutive days or 120 non-consecutive days, in either event in
any 12 month period, due to illness, accident or any other physical
or mental incapacity, as reasonably determined by a physician
selected in good faith by the Company.
2. Employment. The Company
hereby employs Employee as its Vice President, Secretary and
General Counsel in accordance with the terms set forth in Offer
Letter attached hereto as Exhibit “A”.
3. Termination without Cause. Subject
to the provisions of Section 4 below, in the event that the
employment of Employee is terminated by the Company without Cause
(other than (i) after a Change of
