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Exhibit 10.5
AGREEMENT
THIS AGREEMENT (the "Agreement") is made this 9th day of March, 1996,
by and between Quality Care Pharmaceutical, Inc., a California corporation (the
"Company") wholly owned by Golden Pharmaceuticals, Inc., a Colorado corporation
("Golden"), and Xxxxxx X. Xxxxx (the "Executive"). The Company and the
Executive are sometimes referred to herein as the Parties. Terms not otherwise
defined herein shall have the meaning attributed to them in the Employment
Agreement as defined below.
WHEREAS, the Company and the Executive entered into that certain
Employment Agreement (the "Employment Agreement") dated July 7, 1995; and
WHEREAS, the Company and Executive have mutually agreed to terminate
the Employment Agreement and desire to enter into this Agreement to set forth
the ongoing relationship of the Parties.
NOW THEREFORE, in consideration of the covenants undertaken and the
releases contained in this Agreement, the Executive and the Company agree as
follows:
1. TERMINATION OF AGREEMENT. Except as provided in this Section
1, the Employment Agreement is terminated effective as of March 9, 1996 (the
"Effective Date"). Notwithstanding the above, the Parties agree that Section 7
of the Employment Agreement shall remain in full force and effect.
2. CONSIDERATION FOR TERMINATION. As consideration for
termination of the Employment Agreement, Golden, on behalf of the Company,
shall issue or cause to be issued to Executive 2,000,000 shares of Golden's no
par value common stock (the "Shares").
In order to induce Golden to issue the Shares, the Executive hereby
represents and warrants to Golden and the Company that:
(a) Executive has been given access to full and complete
information regarding Golden and has had the opportunity to obtain any
additional information necessary to verify the accuracy of the
information contained in such documents, and has been given the
opportunity to meet with representatives of Golden and to have them
answer any questions regarding the terms and conditions of the Shares,
and all such questions have been answered to his full satisfaction and
all documents or other information requested has been provided.
(b) Executive understands that the Shares have not been
registered under the Securities Act of 1933, as amended, but are
offered pursuant to an exemption from registration under the
Securities Act of 1933, as amended.
(c) Executive understands that any and all certificates
for the Shares will bear a restrictive legend indicating: (1) the
Shares have not been registered under the Securities Act of 1933, as
amended (the "1933 Act"); and (2) that there are restrictions on the
transfer of such Shares. Executive also understands and agrees that
Golden will place appropriate notations in its records to stop any
transfer of the Shares other than in accordance with the 1933 Act or
an exemption therefrom.
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(d) Executive is informed of the significance to the
Company and Golden of the foregoing representations, and such
representations are made with the intention that the Company and
Golden rely on them. The undersigned shall indemnify and hold
harmless the Company and Golden, their respective officers, directors,
employees and representatives against any losses, claims, damages or
liabilities to which they, or any of them, may become subject insofar
as such losses, claims, damages or liabilities (or actions in respect
thereof) arise from any actual or alleged misrepresentation or
misstatement of facts or omission to represent or state facts made by
Executive to the Company or Golden concerning the Executive.
3. EMPLOYMENT.
(a) At Will. Effective as of the date of this Agreement,
Executive shall be employed by the Company as an employee "at will,"
which means that Executive is not being employed by the Company for
any definite or specified term, and that the employment may be
terminated by either Executive or the Company, at the will of either,
at any time, with or without cause, and with or without any advance
notice. Nothing in this section 3 of the Agreement, setting forth the
terms of any benefits to be paid Executive, shall alter or affect the
at-will nature of the employment relationship.
(b) Title. Executive shall serve as President of the
Company and shall perform the duties and services incident to that
position, or such other duties and services of a similar nature as may
be reasonably required of him by the Chairman of the Company or the
Board of Directors of the Company. Executive shall serve as an
officer of the Company without additional compensation.
(c) Base Salary. The Company shall pay Executive a base
annual salary of $96,000 (the "Base Salary"). At the Company's sole
discretion, Executive's Base Salary shall be increased to $110,000.
(d) Cost of Living. Executive shall be eligible to
receive cost of living increases that may be paid to other senior
executive level officers of the Company.
(e) Fringe Benefits. Executive shall be eligible to
participate in the various retirement, welfare, fringe benefit and
other executive prerequisite plans, programs and arrangements of the
Company available for senior executive level officers of the Company.
(f) Bonus. Executive shall be eligible to receive a cash
bonus in the range of 0% to 20% of his Base Salary based upon the
Executive's performance and the Company's achievement of certain
operating and/or financial goals established by the Board of Directors
of the Company. This annual bonus shall be in lieu of the Executive's
participation in any other cash bonus or incentive plan or arrangement
of the Company; provided, however, that the foregoing shall not
preclude Executive from participating in any equity or equity based
compensation program of the Company. Notwithstanding the above, the
Executive acknowledges and agrees that nothing contained herein shall
be deemed to entitle the Executive to an annual bonus and that the
grant and award of an annual bonus, if any, is subject to the sole
discretion of the Board of Directors of the Company.
(g) Severance Pay. In the event the Company terminates
the employment of Executive during the first year of this Agreement,
except for Cause, which is defined as (i) Executive is convicted of,
pleads guilty or nolo contendere to a felony or a crime involving
moral turpitude or (ii)
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Executive conducts his duties as an officer of the Company in a manner
that constitutes gross negligence or willful misconduct, then
Executive shall continue to receive his Base Salary for six (6) months
following his termination of employment.
4. RELEASE. In exchange for the consideration set forth in
Paragraph 2 hereof, Executive hereby, on behalf of himself, his descendants,
ancestors, dependents, heirs, executors, administrators, assigns and
successors, covenants not to xxx, and fully and forever releases and discharges
the Company, and its parent, subsidiaries, affiliates, divisions, successors,
and assigns, together with its past and present trustees, directors, officers,
agents, attorneys, insurers, employees, stockholders, and representatives, from
any and all claims, wages, demands, rights, liens, agreements, contracts,
covenants, actions, suits, causes of action, obligations, debts, costs,
expenses, attorneys' fees, damages, judgments, orders or liabilities of
whatsoever kind or nature in law, equity or otherwise, whether now known or
unknown, suspected or unsuspected with the Executive now owns or holds or has
at any time heretofore owned or held as against said Company, arising out of or
in any way connected with the Executive's employment relationship with the
Company, the Employment Agreement or any other transactions, occurrences, acts
or omissions or any loss, damage or injury whatsoever, known or unknown,
suspected or unsuspected, resulting from any act or omission by or on the part
of the Company committed or omitted prior to the date of this Agreement,
including, but not limited to, claims for race, color, religion, sex, national
origin, creed, and ancestry discrimination under federal, state, and local
statutes or laws, or any claim for severance pay, bonus, salary, sick leave,
holiday pay, vacation pay, life insurance, health or medical insurance or any
other fringe benefit, workers' compensation or disability.
It is understood by Executive that as a condition of this Agreement,
all rights under Section 1542 of the Civil Code of the State of California are
expressly waived by Executive. Section 1542 reads as follows: "A General
Release does not extend to claims which a 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." For the purpose
of giving Executive a full and complete release and discharge as set forth in
this Agreement, Executive expressly acknowledges that this Agreement is
intended to include and does include, without limitation, all claims that
Executive does not know or suspect to exist in Executive's favor against the
Company at the time of signing this Agreement. By signing this Agreement,
Executive waives all such claims.
5. TAXES. The Executive understands and agrees that he is
responsible for any federal, state or local tax, charge or assessment which may
be owed by virtue of the receipt of any portion of the consideration herein
provided.
6. ADVICE OF COUNSEL. The Executive acknowledges that he has
been encouraged to seek the advice of an attorney of his choice in regard to
this Agreement. The Company and the Executive represent that they have relied
upon the advice of their attorneys, who are attorneys of their own choice, or
they have knowingly and willingly not sought the advice of their attorneys.
The Executive hereby understands and acknowledges the significance and
consequences of such Agreement and represents that the terms of this Agreement
are fully understood and voluntarily accepted by him.
7. MISCELLANEOUS. The Executive acknowledges that he has had a
sufficient amount of time to consider the terms of this Agreement. Both the
Executive and the Company have cooperated in the drafting and preparation of
this Agreement. Hence, in any construction to be made of this Agreement, the
same shall not be construed against any party on the basis that the party was
the drafter.
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8. BINDING AGREEMENT. This Agreement shall inure to the benefit
of and be binding upon the parties hereto and their respective successors and
assigns.
9. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original.
10. ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement concerning the termination of the Employment Agreement and all other
subjects addressed herein. This Agreement supersedes and replaces all prior
negotiations and all agreements proposed or otherwise, whether written or oral,
concerning all subject matters covered herein. No alteration, amendment,
change or addition to this Agreement shall be binding unless reduced to writing
and signed by all Parties hereto.
11. SEVERABILITY. If one or more of the provisions of this
Agreement shall for any reason be held invalid, illegal or unenforceable in any
respect, such invalidity, illegality or unenforceability shall not affect or
impair any other provision of this Agreement, but this Agreement shall be
construed as if such invalid, illegal or unenforceable provisions had not been
contained herein.
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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the
date and year first written above.
QUALITY CARE PHARMACEUTICAL, INC.
By
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Xxxxxxx X. Xxxxxxxx, Chairman and
Chief Executive Officer
EXECUTIVE
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Xxxxxx X. Xxxxx
