The way I see it there are two cases:- (i) if you are looking to retire anyway then you can just sign and move on., (ii) if you are not at retirement age then you simply must have a sundown clause on those conditions otherwise your whole prospect of further employment is hijacked. It sounds like an absurd contract to me. The company is offering you a few months of pay to never work again effectively. You break that deal and they're going to sue you for the return of that severance money.

Here's what I would do. Don't take the severance money. Tell as many people as you can and the local papers and television station what they tried to do to you, so that others can be warned.