EXHIBIT 10.35 BILL OF SALE AND RELEASE AGREEMENT This Bill of Sale and Release Agreement ("Agreement") is made and entered into by and between Neutral Posture Ergonomics, Inc. ("NPE" or the "Company") and David W. Campbell ("Employee"). WHEREAS, the...

                                                                   EXHIBIT 10.35


                       XXXX OF SALE AND RELEASE AGREEMENT

      This Xxxx of Sale and Release Agreement ("Agreement") is made and entered
into by and between Neutral Posture Ergonomics, Inc. ("NPE" or the "Company")
and Xxxxx X. Xxxxxxxx ("Employee").

      WHEREAS, the Company has employed Employee as President;

      WHEREAS, Employee and the Company have agreed that Employee will cease his
employment with the Company;

      WHEREAS, NPE and Employee have agreed to resolve any and all potential
disputes, claims, or causes of action which have or may have arisen between them
and growing out of Employee's employment with the Company;

      NOW, THEREFORE, in consideration of the following mutual promises,
payments and conditions contained in this Agreement, and effective on the eighth
day following Employee's execution of this Agreement ("Effective Date"), the
parties voluntarily agree as follows:

      1. SEVERANCE DATE. Employee's employment with NPE has ended as of May 15,
1999 ("Last Day Worked").

      2. SEVERANCE PAYMENT. The Company will pay Employee a sum in the aggregate
gross amount of $71,700, less applicable federal tax and social security
withholding, as well as any other sums owed to NPE by Employee; such sum payment
will be made to Employee in semi-monthly amounts payable on the fifteenth and
last day of each month beginning May 30, 1999 until December 31, 1999. This
Section 2 shall be deemed to amend and supercede all payment obligations under
the Employment Agreement, dated as of July 1, 1997, between NPE and Employee,
but does not in any way amend or change the obligations and rights under Article
2 and 3 of the Employment Agreement.

      3. XXXX OF SALE. Employee hereby transfers, sells and assigns unto NPE (i)
options dated April 1, 1996 to purchase 100,000 shares of common stock of NPE,
par value $.01 per share ("Common Stock"), free and clear of all liens, claims
and encumbrances of any kind whatsoever, and (ii) 200,000 shares of Common
Stock, free and clear of all liens, claims and encumbrances of any kind
whatsoever, in exchange for delivery by NPE herewith of the following: (i)
$390,509 in immediately available funds and (ii) the extinguishment and
repayment in full of all amounts owed NPE by Employee (x) under that certain
Promissory Note in the original principal amount of $32,225, dated as of June
30, 1996, issued by Employee in favor of NPE plus interest owed in the amount of
$6,949, (y) under that certain Promissory Note in the original principal amount
of $106,225, dated as of April 30, 1997, issued by Employee in favor of NPE plus
interest owed in the amount of $16,266, and (z) for $5,000 moving expense that
NPE provided to Employee. The options and the shares of Common Stock owned by
Employee are being transferred and sold to the Company in consideration for
Employee's release. Employee acknowledges that he is not already entitled to
such payments and the right to transfer his options and shares of Common Stock
to the Company.

      4. MEDICAL AND DENTAL BENEFITS. Employee shall be covered under the
medical and dental plans in which Employee has elected to participate as of the
Last Day Worked until December 31, 1999.


      After such time, the Company's health care program benefits will be
provided in accordance with the Consolidated Omnibus Budget Reconciliation Act
of 1985, as amended ("COBRA"), and the terms of the Company's health care
program, as it may be amended form time to time. Employee may continue medical
only, or medical and dental coverage for 18 months at the then-current COBRA
rates. Full details of Employee's rights and obligations under COBRA will be
sent under separate cover.

      5. LIFE INSURANCE. Employee will continue to be covered by the Company's
supplemental life insurance policy until August 20, 1999. NPE shall pay 50% of
the life insurance premium due on May 20, 1999 and shall withhold the remainder
of such premium from Employee's severance payment due hereunder. Employee has
until August 20, 1999 to convert the insurance coverage to an individual policy
by directly contacting and arranging the conversion through an agent of First
Colony Life Insurance Company.

      6. SHORT-TERM DISABILITY/LONG-TERM DISABILITY. Coverage under the
Company's short-term disability program and/or long-term disability insurance
policy will end on Employee's Last Day Worked.

      7. OTHER BENEFITS. Any benefits not specifically stated in this Agreement
to continue beyond Employee's Last Day Worked shall cease on Employee's Last Day
Worked, unless provided otherwise in the relevant plan or policy or by law.

      8. COVENANT OF COOPERATION. Employee agrees to cooperate with NPE in any
litigation or administrative proceedings (E.G., EEOC charges) involving any
matters with which Employee was involved during Employee's employment with the
Company.

      9. RELEASE. In consideration of the above payments and agreements by NPE,
Employee forever and unconditionally releases and discharges NPE and any of its
parent or affiliate companies or divisions and each of their owners, directors,
officers, employees, assigns, representatives or agents ("Releasees") from any
and all claims, complaints, or causes of action relating to or arising out of
Employee's employment with Company and arising up to the date of execution of
this Agreement. Such release encompasses, but is not limited to, any and all
claims by Employee for wages, salary, bonuses, or other benefits of employment
with NPE (except as provided in the last sentence of this paragraph). Such
release also encompasses, but is not limited to, all claims under federal or
state tort or common law, express or implied contract or any federal, state, or
local statutes, including Title VII, the 1964 Civil Rights Act, the Civil Rights
Act of 1991, the Americans with Disabilities Act, the Age Discrimination in
Employment Act, the Texas Workers' Compensation Act, and the Texas Commission on
Human Rights Act (except as provided in the last sentence of this paragraph).
THIS RELEASE INCLUDES, BUT IS NOT LIMITED TO, ANY CLAIM ARISING OUT OF
EMPLOYEE'S EMPLOYMENT WITH NPE EXCEPT FOR EMPLOYEE'S POTENTIAL CLAIMS (i)
RELATING TO PAYMENTS OR BENEFITS PAYABLE TO HIM UNDER THIS AGREEMENT OR (ii)
RELATING TO SECTION 3.11 OF THE EMPLOYMENT AGREEMENT, DATED AS OF JULY 1, 1997,
AS AMENDED HEREBY, BETWEEN NPE AND EMPLOYEE.

      In consideration of the above payments and agreements by Employee, NPE
forever and unconditionally releases and discharges Employee from any and all
claims, complaints, or causes of action relating to or arising out of Employee's
employment with NPE (except as provided in the following sentence.) THIS RELEASE
INCLUDES, BUT IS NOT LIMITED TO, ANY CLAIM ARISING OUT OF EMPLOYEE'S EMPLOYMENT
WITH NPE EXCEPT FOR NPE'S POTENTIAL CLAIMS UNDER (i) THIS AGREEMENT OR (ii) THE
PROVISIONS OF THE EMPLOYMENT


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AGREEMENT, DATED AS OF JULY 1, 1997, AS AMENDED HEREBY, BETWEEN NPE AND
EMPLOYEE.

      10. WAIVER OF RIGHTS. Employee further agrees that he will not file any
complaint, petition, or lawsuit against NPE or any of the Releasees with any
state or federal court, except for any such lawsuit specifically required for
Employee's enforcement of this Agreement. If Employee or anyone acting on his
behalf files any such lawsuit, petition, complaint, or if any court assumes
jurisdiction of any lawsuit, petition or complaint charge against NPE or any of
the Releasees regarding or involving Employee's employment with NPE, Employee
will immediately request such agency or court to withdraw from the matter and
dismiss said action. Employee will also reimburse NPE and the Releasees for all
costs, including attorneys' fees, incurred as a result of such complaint,
petition, lawsuit, or charge.

      11. NON-ADMISSION. This Agreement shall not in any way be construed as an
admission by NPE of any illegal act(s) or violation of any federal, state, or
local statute, law, ordinance, or of any breach of any express or implied
contract or any right whatsoever against Employee or any other person. NPE
further specifically disclaims any such illegal, or wrongful act or violation
against Employee or any other person.

      12. BINDING EFFECT OF THIS AGREEMENT. This Agreement, together with the
obligations of Employee under the Employment Agreement, as amended hereby, dated
as of July 1, 1997, between NPE and Employee, (i) constitute the entire
agreement between the parties relating to the subject matter hereof, and (ii)
supersede all previous understandings and agreements between the parties
relating to the subject matter hereof, both oral and written. The terms and
conditions of this Agreement shall inure to the benefit of, and be binding upon
the respective heirs, third party beneficiaries, administrators,
representatives, executors, successors and permitted assigns of the parties
hereto.

      13. SPECIFIC REMEDY. As a further material inducement to enter into this
Agreement, a party breaching this Agreement must reimburse the non-breaching
party for any and all loss, cost, damage or expense, including without
limitation, attorneys' fees arising out of any such breach of this Agreement. In
addition, any breach of this Agreement will entitle the non-breaching party to
seek injunctive relief and to recover any actual damages incurred as a result of
such breach.

      14. SEVERABILITY. Should any provision of this Agreement be declared to be
or determined to be illegal or invalid, the validity of the remaining parts of
this Agreement will not be affected.

      15. NO RELIANCE ON OTHER STATEMENTS. Each party to this Agreement
expressly warrants and represents that, in entering into this Agreement, he, she
or it is not relying on any promise, agreement or statement, whether oral or
written, that is not set forth in this Agreement or in the Employment Agreement,
as amended hereby. Specifically, each of the parties acknowledges, in signing
this Agreement, that it is not relying on any promise, agreement or statement,
whether written or oral, not expressly contained in this Agreement or in the
Employment Agreement, as amended hereby (i) by any person that has been made by
a party to this Agreement or (ii) by any agent of a party to this Agreement.

      16. REVOCATION PERIOD. The parties agree that Employee may revoke this
Agreement within seven (7) days from the date of his execution of this
Agreement.

      17. OPPORTUNITY TO REVIEW. By Employee's signature below, he represents
and confirms that he: (a) has read this Agreement carefully and completely, (b)
has been given a period of at least twenty-one


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(21) days to consider and review this Agreement, (c) has been informed of his
right to consult with legal and financial counsel and has had ample opportunity
to do so, (d) understands and agrees to all the provisions contained in this
Agreement, and (e) is signing freely and voluntarily, without duress, coercion
or undue influence.

      PLEASE READ CAREFULLY. THIS XXXX OF SALE AND RELEASE AGREEMENT INCLUDES
THE RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS AS OF THE DATE OF THIS AGREEMENT, AS
WELL AS ALL CLAIMS ARISING UNDER THE AGE DISCRIMINATION IN EMPLOYMENT ACT,
AGAINST NEUTRAL POSTURE ERGONOMICS, INC.


                                    /S/ XXXXX X. XXXXXXXX
                                        Xxxxx X. Xxxxxxxx


      Signed in Dallas, Texas on the 17 day of May, 1999.


                                    /S/ XXXXXXX XXXXXXXX
                                        Xxxxxxx Xxxxxxxx


      Signed in Dallas, Texas on the 17 day of May, 1999.


                                    NEUTRAL POSTURE ERGONOMICS, INC.


                                    By:/s/ XXXXXXX X. XXXXXXX
                                           Xxxxxxx X. Xxxxxxx
                                           Chief Executive Officer


      Signed in Bryan, Texas on the 17 day of May, 1999.

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