SEPARATION AGREEMENT AND MUTUAL GENERAL RELEASE
SEPARATION AGREEMENT AND
MUTUAL GENERAL RELEASE
This
SEPARATION AGREEMENT AND MUTUAL
GENERAL RELEASE (hereinafter referred to as the “Agreement” and/or
“Separation Agreement”) is made and entered into between and among Xxxxxx Xxxxx
(“Xxxxx”), Xxxxx XxXxxxxxx (“XxXxxxxxx”), Xxxxxxx Xxxxxxxxx (“Xxxxxxxxx”) and
Xxxxxx Xxxxx (“Xxxxx”) (collectively, Chase, McFarland, Xxxxxxxxx and Xxxxx, the
“Director Parties” and each individually also a “Director” ), Patient Safety
Technologies, Inc., a Delaware corporation (“PST”) and those stockholders set
forth on the signature pages hereto (collectively, the “Stockholder Parties” and
the Stockholder Parties, the Director Parties and PST, the “Parties” and each a
“Party”).
RECITALS
A. The
Directors are Directors of PST.
B.
The Directors have performed significant
services and contributions to PST during their tenure as Directors of
PST.
C. The
Directors have participated in the review and approval process related to a
Series B Preferred Stock financing of PST (the “Financing”) by certain
investors, including several Stockholder Parties.
D. At
the Closing of the Financing (the “Closing”), the Directors are resigning as
Directors of PST.
E. In
connection with the Financing, the Parties desire to enter into this Separation
Agreement and Mutual General Release to facilitate the Financing and provide for
a smooth transition.
NOW,
THEREFORE, in consideration of the premises and promises herein contained, the
adequacy and receipt of which are hereby acknowledged by all Parties, the
Parties agree as follows (except where this Agreement provides that an agreement
is only of a specific Party):
AGREEMENTS
1. Incorporation
of Recitals: The foregoing
Recitals are hereby incorporated into this Agreement.
2. Mutual
General Release Of Claims: Each of the Parties hereby
releases the other as follows:
(a)
Except with respect to, and in connection with, the enforcement of a
Party's rights and representations and warranties under the provisions of this
Agreement, effective as of the Closing, each of the Stockholders Parties and
separately, PST, each on its own respective behalf and on behalf of its
respective heirs, administrators, executors, predecessors, successors and
assigns, does hereby and forever release and discharge each of the Director
Parties, and each of their respective heirs, administrators, executors,
successors, assigns, affiliates, representatives, agents, servants, employees,
shareholders, partners, directors, insurers, predecessors in interest, attorneys
and accountants (collectively, the "Director Released Parties"), of and from any
and all present and future obligations (accrued or unaccrued), claims, demands,
actions, causes of action, indebtedness, liabilities, agreements, damages, or
losses of any type, kind or character, whether known or unknown, asserted or
which could have been asserted, suspected or unsuspected, fixed or contingent,
which directly or indirectly relate to, arise out of, or are in any way
connected with any act or omission taken or occurring on or at any time prior
to, the Closing directly or indirectly related to or involving or arising out of
PST in any manner (collectively, the "Director Released Claims").
Notwithstanding the foregoing, this Section 2(a) does not release or
discharge (a) Director Released Claims that cannot lawfully be released by this
Agreement or (b) the Indemnification Agreements (defined below). For the
avoidance of doubt, the terms and conditions of the Indemnification Agreements
shall be applied without being affected by the release of the Released Claims
set forth in this Agreement..
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(b) Except
with respect to, and in connection with, the enforcement of a Party's rights and
representations and warranties under the provisions of this Agreement, effective
as of the Closing, each of the Director Parties, on its own behalf and on behalf
of its heirs, administrators, executors, predecessors, successors and assigns,
does hereby and forever release and discharge PST and each of the Stockholder
Parties, and each of their respective heirs, administrators, executors,
successors, assigns, affiliates, representatives, agents, servants, employees,
shareholders, partners, directors, insurers, predecessors in interest, attorneys
and accountants (collectively, the "Stockholder Released Parties"), of and from
any and all present and future obligations (accrued or unaccrued), claims,
demands, actions, causes of action, indebtedness, liabilities, agreements,
damages, or losses of any type, kind or character, whether known or unknown,
asserted or which could have been asserted, suspected or unsuspected, fixed or
contingent, which directly or indirectly relate to, arise out of, or are in any
way connected with any act or omission taken or occurring on or at any
time prior to, the Closing which are directly or indirectly related
to or involving or arising out of PST in any manner (collectively, the
"Stockholder Released Claims"). Notwithstanding the foregoing, this
Section 2(b) does not release or discharge (a) Stockholder Released Claims that
cannot lawfully be released by this Agreement nor (b) the Indemnification
Agreements dated June 1, 2010, by and between PST and each Director (the
“indemnification Agreements”); it being
understood that the Indemnification Agreements shall remain in full force and
effect notwithstanding this Separation Agreement nor (c) any indemnification
obligations under PST’s charter documents (Bylaws/Certificate of Incorporation)
nor (d) any obligation of PST or its insurance carriers to provide insurance
coverage or accept and defend indemnification claims nor (e) the stock options
or cash compensation to which each Director is entitled as set forth elsewhere
in this Agreement.
3. No
Complaints/Covenant Not To Xxx/Acknowledgment: Each Party each
represent that they have not filed any complaints, charges, claims, or actions
against any of the other Parties related to the subject matter of this Agreement
with any state, federal, or local agency or court or any other forum. Except
with respect to, and in connection with, the enforcement of a Party's rights
under the provisions of this Agreement, all Parties to this Agreement covenant
and agree never to commence, voluntarily aid in any way or prosecute any action
or proceeding based upon each Party’s respective Released Claims. If
any such action or proceeding is commenced, this Agreement may be pleaded as a
full and complete defense thereto. Each
Party represents that it has been represented by independent legal counsel of
its own choice in connection with the negotiation and execution of this
Agreement and has had adequate opportunity to undertake whatever due diligence
or investigation it deemed necessary to enter into this Agreement. Each
represents that it is not relying and has not relied on any representation,
warranty or statement made by any other Released Party with respect to the facts
relating to the subject matter of this Agreement except as expressly set forth
in this Agreement and assumes the risk of any mistake of fact relating to the
subject matter of this Agreement or with regard to any of the facts which are
now unknown to them relating thereto, and to no such representation, warranty,
statement or mistake with respect to the facts relating to the subject matter of
this Agreement may be utilized as the basis of or offered as evidence to support
any future claim among or between any of the Released Parties. Each Party
represents and warrants that it has the right and authority to enter into and
execute this Agreement.
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4. Waiver Of
Unknown Claims: The Parties
understand and agree and each has been advised by legal counsel that the
Released Claims include not only claims presently known to the Parties but also
include all unknown or unanticipated claims. The Parties knowingly
and voluntarily waive any and all rights or benefits that they may now have, or
in the future may have, under the terms of Section 1542 of the California Civil
Code (and all statutory and common law equivalents thereof), which provides as
follows:
A
general release does not extend to claims which the creditor does not know or
suspect to exist in his or her favor at the time of executing the release, which
if known by him or her must have materially affected his or her settlement with
the debtor.
5. Non-Disparagement: For a period of
two years after the Closing, each of the Director Parties agrees that he will
not disparage any of the Stockholder Parties or PST in connection with the
subject matter of this Agreement. For a period of two years after the
Closing, each of PST and the Stockholders Parties agrees that it will not
disparage any of the Director Parties in connection with the subject matter of
this Agreement. Xxxxx Xxxxxxx confirms the preceding sentence
prohibits disparagement by him directly or
indirectly. Notwithstanding the foregoing, this Section 5 does not
prevent or limit a Party from giving truthful testimony or other legally
compelled disclosure.
6. Indemnification
And Forfeiture In The Event Of Breach: Each of the
Parties hereto agrees to indemnify and hold the other harmless from and against
any and all loss, cost, damage or expense, including but not limited to
attorney’s fees incurred by the other, arising out of any breach of this
Agreement or false representation herein by the indemnifying Party.
7. No
Admission Of Liability: Nothing in this
Agreement constitutes an admission of liability, responsibility or the merit
or lack of merit of any claim or defense on the part of any Party
except for the contractual obligations expressly set forth in this
Agreement.
8. Director
Stock Options: Effective as of
the Closing, PST agrees that each of the Director’s stock options pursuant to
their respective Stock Option Agreements (as amended hereunder) shall provide as
follows:
(a) Xxxxxx
Xxxxx – PST acknowledges that all 200,000 “Option Shares” under Chase’s June 22,
2009 Option Agreement with PST (the “Chase Option Agreement”) are fully vested
(the “Chase Vested Options”). Notwithstanding Section 5 of the Chase Option
Agreement, Section 5.1(a) is hereby amended to provide that the exercisability
of such Chase Option Shares and the term thereof shall not expire until June 30,
2012 and PST acknowledges that Chase’s resignation was voluntary and other than
for “cause” (as defined under the Chase Option Agreement). Section 1 and Section
5.1(b) of the Chase Option Agreement are hereby terminated and of no further
force or effect. PST shall maintain the registration of the Chase Vested Options
under PST’s S-8 Registration Statement filed with the SEC on February 16, 2010
(or any substitute S-8 Registration Statement), in full force and effect so long
as any securities are registered under any PST S-8 Registration Statement (or
comparable form). Chase acknowledges and agrees that other than the
options referenced in this paragraph he has no other options or similar rights
to acquire equity of PST and PST owes him no additional equity or rights, and
that any other options he may have shall terminate and shall cease vesting on
the Closing.
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(b) Xxxxx
XxXxxxxxx – PST acknowledges that all 200,000 “Option Shares” under XxXxxxxxx’x
Xxxx 22, 2009 Option Agreement with PST (the “XxXxxxxxx Option Agreement”) are
fully vested (the “XxXxxxxxx Vested Options”). Notwithstanding Section 5 of the
XxXxxxxxx Option Agreement, Section 5.1(a) is hereby amended to provide that the
exercisability of such XxXxxxxxx Option Shares and the term thereof shall not
expire until June 30, 2012 and PST acknowledges that XxXxxxxxx’x resignation was
voluntary and other than for “cause” (as defined under the XxXxxxxx Option
Agreement). Section 1 and Section 5.1(b) are hereby terminated and of no further
force or effect. PST shall maintain the registration of the XxXxxxxxx Vested
Options under PST’s S-8 Registration Statement filed with the SEC on February
16, 2010 (or any substitute S-8 Registration Statement), in full force and
effect so long as any securities are registered under any PST S-8 Registration
Statement (or comparable form). XxXxxxxxx acknowledges and agrees
that other than the options referenced in this paragraph he has no other options
or similar rights to acquire equity of PST and PST owes him no additional equity
or rights, and that any other options he may have shall terminate and shall
cease vesting on the Closing.
(c) Xxxxxxx
Xxxxxxxxx – PST acknowledges and agrees that 50,000 “Option Shares” under
Xxxxxxxxx’x January 26, 2010 Option Agreement with PST (the “Xxxxxxxxx Option
Agreement”) shall be fully vested as of the Closing (the “Xxxxxxxxx Vested
Options”) notwithstanding anything to the contrary under the Xxxxxxxxx Option
Agreement. Notwithstanding Section 4 of the Xxxxxxxxx Option Agreement, Section
4.1(a) is hereby amended to provide that the exercisability of such Xxxxxxxxx
Option Shares and the term thereof shall not expire until June 30, 2012 and PST
acknowledges that Xxxxxxxxx’x resignation was voluntary and other than for
“cause” (as defined under the Xxxxxxxxx Option Agreement). Section 4.1(b) is
hereby terminated and of no further force or effect. PST shall maintain the
registration of the Vested Options under PST’s S-8 Registration Statement filed
with the SEC on February 16, 2010 (or any substitute S-8 Registration
Statement), in full force and effect so long as any securities are registered
under any PST S-8 Registration Statement (or comparable form). Xxxxxxxxx
acknowledges and agrees that other than the options referenced in this paragraph
he has no other options or similar rights to acquire equity of PST and PST owes
him no additional equity or rights, and that any other options he may have shall
terminate and shall cease vesting on the Closing.
(d) Xxxxxx
Xxxxx – PST acknowledges and agrees that 50,000 “Option Shares” under Xxxxx’x
January 26, 2010 Option Agreement with PST (the “Xxxxx Option Agreement”) shall
be fully vested as of the Closing (the “Xxxxx Vested Options”) notwithstanding
anything to the contrary under the Xxxxx Option Agreement. Notwithstanding
Section 4 of the Xxxxx Option Agreement, Section 4.1(a) is hereby amended to
provide that the exercisability of such Xxxxx Option Shares and the term thereof
shall not expire until June 30, 2012 and PST acknowledges that Xxxxx’x
resignation was voluntary and other than for “cause” (as defined under the Xxxxx
Option Agreement). Section 4.1(b) is hereby terminated and of no further force
or effect. PST shall maintain the registration of the Vested Options under PST’s
S-8 Registration Statement filed with the SEC on February 16, 2010 (or any
substitute S-8 Registration Statement), in full force and effect so long as any
securities are registered under any PST S-8 Registration Statement (or
comparable form). Xxxxx acknowledges and agrees that other than the
options referenced in this paragraph he has no other options or similar rights
to acquire equity of PST and PST owes him no additional equity or rights, and
that any other options he may have shall terminate and shall cease vesting on
the Closing.
9. Director
Cash Compensation: At the Closing,
PST shall deliver to each Director by cashier’s check or wire transfer as
instructed by each Director in immediately available funds the following amounts
as indicated next to each Director’s name below, less legally required tax
withholding:
(a) Xxxxxx
Xxxxx – $83,488
(b) Xxxxx
XxXxxxxxx – $64,912
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(c) Xxxxxxx
Xxxxxxxxx – $10,025
(d) Xxxxxx
Xxxxx – $10,025
Each
Director agrees and acknowledges that other than the payment set forth opposite
his respective name immediately above, PST does not and will not owe or be
obligated to pay, and such Director is not entitled to receive or claim, any
wages, directors fees, compensation, reimbursement, bonus (for 2009, 2010 or any
other period) or other payments (including accrued but unused vacation and
reimbursable business-related expenses) from or on behalf of PST as of the date
hereof (for services rendered or otherwise) or as a result of the ending of such
Directors directorship or services to PST or in connection with any agreement he
may have with PST.
10. PST
Obligations:
In
addition to any other obligation under each Director’s Indemnification Agreement
with PST, PST agrees and covenants that for a period of no less than four years
following the Closing (the “Coverage Period”), PST shall maintain in full force
and effect for the benefit of each Director as a named insured Director &
Officer Liability Insurance on terms and conditions (including but not limited
to policy limits, deductibles, scope of coverage and the like with a financially
sound insurance carrier) no less favorable as such insurance is currently in
effect as of the Closing.
11. Miscellaneous: In further
consideration of this Agreement, each Party agrees as follows:
(a) The terms mentioned in the
preceding paragraphs of this Agreement are the entire and only consideration for
it;
(b) The language of all parts
of this Agreement shall in all cases be construed as a whole, according to its
fair meaning, and not strictly for or against any of the Parties. The
Parties hereto and their counsel have reviewed this Agreement and specifically
agree that any rule of construction, to the effect that ambiguities are to be
resolved against the drafting party, shall not apply to the interpretation of
this Purchase Agreement. All Parties acknowledge and agree (and waive any
conflicts) that Xxxx Xxxxx LLP as the current counsel for PST has likewise
advised and counseled the Directors in connection with this
Agreement.
(c) This
Agreement shall be governed by and construed in accordance with the internal
laws of the State of California without application of conflicts of law
principles;
(d) The various provisions of
this Agreement are severable and if any is unenforceable, at law or in equity,
that provision may be severed, leaving the others remaining in full force and
effect;
(e) Headings contained in this
Agreement are for convenience only and shall not be considered for any purpose
in construing the Agreement;
(f) This Agreement may only be
modified by a written agreement identified as an amendment/modification to this
Agreement and signed by the Parties hereto; and
(g) The representations,
warranties, covenants and agreements made herein shall survive the execution and
delivery of this Agreement. The entirety of the Stock Option Agreements and
Indemnification Agreements, as such may be modified by this Agreement, are
incorporated herein by reference and shall survive the execution of this
Agreement.
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(h) This Agreement contains
the entire agreement between the Parties to it with regard to the matters set
forth in it and shall be binding upon and inure to the benefit of the executors,
administrators, personal representatives, heirs, successors and assigns of
each. This Agreement fully supersedes any and all negotiations, and
all prior written, oral, or implied agreements or understandings between the
Parties pertaining to the subject matters hereof.
(i) In
the event of any suit or other proceeding to construe or enforce any provision
of this Agreement or any other instrument to be entered into pursuant hereto, or
otherwise in connection with this Agreement, the prevailing party’s or parties’
reasonable attorneys’ fees and costs (in addition to all other amounts and
relief to which such party or parties may be entitled) shall be paid by the
other party or parties.
(j) All
agreements, representations, releases and covenants by all Parties herein are
separate and individual agreements, representations, releases and covenants of
that specific signatory alone, even if expressed as plural agreements, and are
not joint and several. For the avoidance of doubt, no Director Party
is liable for the performance or non performance of PST or each other, nor is
any Stockholder Party liable for the performance or non performance of PST or
each other.
(k) Any
notice, request or other communication required to be given pursuant to the
provisions hereof shall be in writing and shall be deemed to have been given
when delivered in person, or five (5) days after being deposited in the United
States mail, certified or registered, postage prepaid, return receipt requested
and addressed to the party at its last known address. The address of
any party may be changed by notice in writing to the other parties duly served
in accordance herewith.
(l) All
Parties understand that PST expects that it will, and that PST is entitled to,
file this Agreement with the SEC publicly.
(k) This
Agreement may be executed in one or more counterparts (including by means of
telecopied or electronic signature pages), all of which shall be considered one
and the same agreement, and shall become effective when one or more such
counterparts have been signed by each of the parties hereto and delivered to the
other party hereto.
PLEASE
READ CAREFULLY. THIS SEPARATION AGREEMENT AND GENERAL
RELEASE INCLUDES A RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS.
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Agreed:
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DIRECTOR
PARTIES:
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DATED:
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XXXXXX
XXXXX
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DATED:
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XXXXX
XXXXXXXXX
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DATED:
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XXXXXXX
XXXXXXXXX
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DATED:
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XXXXXX
XXXXX
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PST;
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DATED:
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By:
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Authorized
Signatory
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STOCKHOLDER
PARTIES:
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DATED:
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Xxxx
X. Xxxxxxx
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Xxxx
X. Xxxxxxx
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DATED:
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Xxxxx
Xxxxxxx
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Xxxxx
Xxxxxxx
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DATED:
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A
Plus International, Inc.
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By:
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Authorized
Signatory
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DATED:
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Xxxxxxx
Xxx
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Xxxxxxx
Xxxx
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DATED:
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Radisson
Trading Company
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By:
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Authorized
Signatory
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DATED:
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Catalysis
Partners, LLC
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by
Xxxxxxx Capital Management, LLC
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by:
Xxxx Xxxxxxx, Managing
Member
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By:
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Authorized
Signatory
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DATED:
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Catalysis
Offshore, Ltd.
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by
Xxxxxxx Capital Management, LLC
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by:
Xxxx Xxxxxxx, Managing Member
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By:
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Authorized
Signatory
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DATED:
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Xxxxxxx
Capital Management, LLC
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by:
Xxxx Xxxxxxx, Managing Member
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By:
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Authorized
Signatory
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