PLEASE READ CAREFULLY
IF YOU DO NOT UNDERSTAND THE DOCUMENT FULLY,
DO NOT SIGN IT
CONSULT WITH AN ATTORNEY BEFORE SIGNING
THIS SEPARATION AGREEMENT AND GENERAL RELEASE
INCLUDES A RELEASE OF ANY AND
ALL KNOWN AND UNKNOWN CLAIMS AGAINST THE COMPANY
SEPARATION AGREEMENT and GENERAL RELEASE (the "Agreement") made as of this
9th day of October 1997, between Dr. Xxxxxxx Xxxx ("Xxxx") and Alfacell
Corporation and related and/or affiliated companies (the "Company").
WHEREAS, the Company and Xxxx wish to resolve and to fully and finally
settle, compromise and forever discharge any and all claims and issues that were
raised, or which could have been raised, or which Xxxx has now or may ever have
had against the Company;
NOW THEREFORE, in consideration of the mutual promises contained herein, it
is agreed as follows:
1. Xxxx submitted his resignation as President, Director and an employee of
the Company by letter of August 4, 1997, and for purposes of this Agreement the
parties agree that
Xxxx Separation.2/gen/xxx/ktc/ny2a
October 8, 1997
his resignation was effective as of July 31, 1997 and the parties agree that
Xxxx is not entitled to any compensation from the Company subsequent to such
date, except as specifically set forth herein.
2. In full satisfaction of the Company's obligations to Xxxx and in
consideration for all of Lowe's agreements and covenants set forth herein, the
Company agrees:
a) For the period commencing August 1, 1997 and terminating January
31, 1998, the Company shall pay Xxxx the aggregate amount of $100,000. Such
amount shall be payable in bimonthly installments in accordance with the
Company's standard payroll procedures (less customary statutory
withholdings). It is understood and agreed that all payments made by the
Company to Xxxx for payroll periods subsequent to July 31, 1997 shall be
credited to the Company's obligation to Xxxx under this Section 2(a).
b) The Company and Xxxx acknowledge that (i) an option to purchase an
aggregate of 100,000 shares of Common Stock (the "Original Option") was
granted to Xxxx under the Company's 1993 Stock Option Plan, as amended (the
"Plan") on August 1, 1996 and had vested as of July 31, 1997, and (ii)
pursuant to the terms of the Plan, the Original Option would terminate in
its entirety on February 3, 1998. The Company and Xxxx agree that,
notwithstanding the foregoing, the Original Option will remain exercisable
until, and will terminate on, January 31, 1999. The
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Company and Xxxx agree that an option to purchase an aggregate of 75,000
shares of Common Stock (the "Additional Option") that was granted to Xxxx
under the Plan on August 1, 1996, will be deemed to have vested as of
August 1, 1997 in accordance with its terms and will remain exercisable
until, and will terminate on, January 31, 1999. The Company represents that
the Compensation Committee of its board of directors has specifically
waived the provisions of the Plan that would prohibit the Additional Option
from vesting in accordance with the preceding sentence and which would have
caused both the Original Option and the Additional Option to terminate on
the 190th day after the termination of Lowe's employment with the Company.
Except for the forgoing modifications, the terms of the Original Option,
the Additional Option and the Plan shall remain unchanged. Xxxx shall
deliver to the Company upon the execution of this Agreement, the original
option certificate issued to him on August 1, 1996 which represented the
Original Option, the Additional Option and the Terminated Option (as
defined below) (the "Initial Option Certificate") or if Xxxx cannot locate
the Initial Option Certificate he shall deliver a lost option certificate
affidavit to the Company. Upon its receipt of the Initial Option
Certificate or such lost option certificate affidavit, the Company shall
issue and deliver to Xxxx the option certificate in the form attached
hereto as Exhibit A which represents the Original Option and the Additional
Option (the "New Option Certificate").
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c) Xxxx and the Company agree that the remaining option to purchase an
aggregate of 475,000 shares of Common Stock which was granted to Xxxx under
the Plan on August 1, 1996 (the "Terminated Option") had not vested as of
July 31, 1997 and had terminated and was of no further force or effect as
of such date in accordance with the Plan.
d) The Company will continue and assume the payments for Lowe's and/or
his dependents' (who are qualified beneficiaries) health insurance until
July 31, 1998 under the terms and conditions currently applicable to
full-time employees of the Company to the extent available to full-time
employees during this period, and under the terms and conditions of the New
Jersey Group Continuation ("NJGC"), provided, however, that if Xxxx
receives or is offered health insurance pursuant to a new employment
arrangement and he accepts that employment, the Company's obligation under
this paragraph will terminate. All coverage provided to Xxxx and/or his
dependents pursuant to this paragraph shall be subject to the provisions of
the applicable insurance policies and the continuation provisions of NJGC
(and any changes or amendments with respect to such plans, policies or
statute).
3. Xxxx agrees that the benefit package set forth in paragraph 2 is more
than the Company is required to pay under its normal policies and procedures.
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4. This Agreement is not an admission of wrongdoing or liability of any
kind by the Company or any of its principals or representatives and any such
wrongdoing and liability is expressly denied.
5. a) Xxxx for himself, his heirs, executors, administrators, successors
and assigns (collectively, the "Releasors"), does hereby fully release and
forever discharge the Company, its parents, subsidiaries, affiliates, divisions
and related entities, their successors and assigns, and the Company's directors,
Xxxx Xxxx, Xxxxxxx Xxxxxx, Xxxxxx Xxxxxxx, Xxxx Xxxxxx, Xxxxxx Xxxxx, Xxxxxxx
Xxxxxxxx, Kuslima Shogen and Xxxxx Xxxxxx, and the Company's agents, officers,
employees, fiduciaries and servants in both their individual and representative
capacities and each of them (collectively, the "Releasees"), of and from any and
all claims (including without limitation any claims for reinstatement or
reemployment), whether or not now known or suspected, by reason of any actual or
alleged act, omission, transaction, practice or occurrence, or other matter up
to and including the date of this Agreement.
b) The Company for itself and for its affiliates, successors and assigns
(collectively, the "Company Releasors") does hereby fully release and forever
discharge Xxxx, his heirs, executors, administrators, successors and assigns, of
and from any and all claims, whether or not now known or suspected, by reason of
any actual or alleged act, omission, transaction, practice or
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occurrence, or other matter up to and including the date of this
Agreement.
6. The general release contained in Sections 5(a) and 5(b) herein includes
but is not limited to a release of any rights which either party may have in or
with respect to breach of contract (whether express, implied or oral); personnel
policies; employee handbooks; wages; vacation pay; severance pay; commissions or
bonuses; tort; wrongful termination; defamation; infliction of emotional
distress; slander; promissory estoppel; prima facie tort; breach of the covenant
of fair dealing; fraud; violation of public policy; claims for physical or
emotional injury; any and all claims based on any federal, state or local laws
including, without limitation, all employment and securities laws and
regulations, the Age Discrimination in Employment Act, Title VII of the Civil
Rights Act of 1964, as amended, the Americans with Disabilities Act, the
Employee Retirement Income Security Act, the Family Medical Leave Act, the Civil
Rights Acts, the rules or regulations of the Federal Trade Commission, the rules
and regulations of the Food and Drug Administration, the Securities Act of 1933,
as amended, the Securities Exchange Act of 1934, as amended, or any rules or
regulations promulgated by or releases or decrees of the Securities and Exchange
Commission (the "SEC"), the "blue sky" laws or regulations of any state, the
civil rights laws or regulations of the State of New Jersey, and any laws of the
states of New Jersey or Delaware.
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7. Each party further understands and agrees that the other party is in no
way liable or responsible for such party's attorney's fees and costs, if any, in
this matter.
8. Xxxx represents that he has not filed and agrees that he will not file
any claims or causes of action of any kind against the Releasees based upon any
actions, conduct or circumstances occurring prior to the effective date of this
Agreement with any local, state or federal agency, court or tribunal, nor does
he have any knowledge or reason to believe that anyone else has filed such a
charge or complaint on his behalf. If Xxxx should file such a charge or
complaint, or if a charge or complaint is filed on his behalf, or if any such
agency shall ever assume jurisdiction against the Releasees on behalf of Xxxx,
Xxxx agrees that the compensation and benefits provided to him by the Company
under this Agreement shall be his sole remedy against the Releasees and he shall
not seek or accept any further compensation or damages from the Company or the
Releasees. Xxxx agrees not to assist or aid any other person in bringing,
prosecuting, or maintaining any claim, charge, action or proceeding against the
Company unless required by law to do so, and then only to the extent required by
law.
9. a) The terms of this Agreement are to be kept strictly confidential by
each party. Unless compelled to testify
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at a deposition, administrative proceeding, trial, or as required by law,
government rule or regulation, each party shall refrain from issuing to the
public, including without limitation, other potential or present plaintiffs,
claimants or complainants, press or media, any article, memorandum, release,
publicity or statement, whether oral or written, concerning the terms or
conditions of this Agreement, except that each party may discuss such terms with
its respective legal counsel, tax advisor, accountant, and financial institution
or potential lenders, and Xxxx may discuss such terms with his wife and
children, provided that all such persons abide by the confidentiality provisions
herein applicable to the party making such disclosure to such person.
Notwithstanding the foregoing, the parties acknowledge that the Company may be
required to publicly disclose the terms of this Agreement and to file this
Agreement as an exhibit with the SEC in order to comply with its disclosure
obligations under applicable securities laws and regulations. Notwithstanding
the foregoing, either party can discuss this Agreement publicly to the extent
its terms are disclosed in a filing by the Company with the SEC.
b) Xxxx agrees that the Company has issued a press release (which Xxxx
reviewed prior to its release and to which Xxxx did not object) and may make
further public statements it deems necessary to inform the public of his
resignation which shall refer to such resignation as based on the mutual
agreement of Xxxx and the Company.
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10. a) The Company agrees not to make any disparaging or negative comments
concerning Xxxx. Xxxx agrees that he will not make any disparaging or negative
comments concerning the Company, any officers, directors, employees and
consultants to the Company, or concerning the Company's drug products, clinical
trials, technologies or therapies in any stage of development, nor will he take
any action which could have reasonably been viewed as to be intended to be
detrimental to the Company.
b) Xxxx expressly agrees that should he breach any of the material
covenants and provisions contained herein, the Company's obligation to make the
payments provided in paragraph 2(a) shall terminate immediately, and all of the
Original Option and Additional Option described in paragraph 2(b) and then held
by Xxxx shall terminate immediately. Any such breach shall be subject to the
dispute resolution provisions in Section 13. The foregoing shall not be the
Company's exclusive remedy for any such breach.
c) The Company expressly agrees that should it breach any of the material
covenants and provisions contained herein, Lowe's obligations hereunder shall
terminate immediately. Any such breach shall be subject to the dispute
resolution provisions in Section 13. The foregoing shall not be Lowe's exclusive
remedy for any such breach.
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d) Notwithstanding the foregoing, Xxxx may provide testimony to the FDA or
any other federal agency if required to by an administrative or judicial
subpoena.
11. a) Xxxx agrees to keep secret and shall not use all confidential
information of the Company and its subsidiaries, including, without limitation,
information regarding trade secrets, "know-how," information concerning clinical
trials, consultant contracts, details of author or consultant contracts,
operational methods, marketing plans or strategies, product development
techniques or plans, business acquisition plans, new personnel acquisition
plans, methods of manufacture, technical processes, designs and design projects,
investigations, searches, other confidential documents, whether or not so
labelled, and other business affairs of the Company and its subsidiaries learned
by him at any time, and shall not disclose them to anyone outside of the
Company.
b) All memoranda, notes, lists, records, work product and other documents
whether or not labelled "Confidential" (and all copies thereof), made or
compiled by Xxxx or made available to Xxxx, concerning the Company, shall be the
Company's property and shall be delivered to the Company promptly upon the
execution of this Agreement.
c) Employee agrees that all methods, analyses, reports, plans and all
similar or related information which (i) relate to the Company and which (ii)
were conceived, developed or
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made by Xxxx in the course of his relationship with the Company belong to the
Company. Xxxx will promptly disclose such work product to the Company and
perform all actions reasonably requested by the Company to establish and conform
such ownership by the Company.
x) Xxxx agrees that he shall not for the period of July 31, 1997 to January
31, 1998 directly or indirectly, for his own account or jointly with another, or
for or on behalf of any current or potential competitor of the Company, employer
or other entity, solicit, induce or encourage any person to leave the employment
of the Company or any of its parents, subsidiaries, affiliates, divisions,
related entities and their successors or assigns, or solicit, induce or
encourage any business or account of the Company in which Xxxx has participated
or in any way been active prior to the termination of Lowe's employment to
terminate their employment of, or otherwise terminate their relations with, the
Company.
e) For the period of July 31, 1997 to January 31, 1998, Xxxx shall not
engage directly or indirectly in or become employed by, serve as an agent or
consultant to, or become a partner, principal, affiliate, representative or
stockholder of any partnership, corporation or any other entity which conducts
research on, manufactures, distributes, or develops RNase-based pharmaceuticals
provided, however, that Lowe's ownership of less than five percent of the issued
and outstanding stock of any
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corporation whose stock is traded on an established securities market shall not
constitute a breach of this provision.
12. Xxxx agrees that for the period from July 31, 1997 to January 31, 1998
the Company, may require Xxxx to answer questions and provide information
concerning activities for which Xxxx was responsible while he was employed by
the Company. The Company agrees that such request of Lowe's services shall be
made at reasonable times and in a reasonable manner and shall not be unduly
burdensome on Xxxx.
13. a) If either party believes that the other party has committed or is
about to commit a breach of the Agreement, counsel for such party shall notify
counsel for such other party of the substance of the information which forms the
basis for such belief. Counsel for such other party shall provide a response and
both counsel shall attempt to reach an amicable resolution of the matter prior
to pursuing the remedies set forth herein.
b) If Xxxx breaches or threatens to commit a breach of any of the
provisions of Paragraph 11, the Company shall have, without limitation, the
following rights and remedies, severally enforceable, in addition to any other
rights and remedies available to the Company under this Agreement or otherwise:
(i) The right to have the covenants contained in Paragraph 11
specifically enforced by any court
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having equity jurisdiction, it being agreed that any such breach or
threatened breach will cause irreparable injury to the Company and that
money damages will not provide an adequate remedy to the Company.
(ii) The right to require Xxxx to account for and pay over to the
Company all compensation, profits, monies, accruals, increments or other
benefits (collectively, "Benefits") derived or received by Xxxx as the
result of any transaction(s) constituting a breach of any of the covenants
contained in Paragraph 11.
(iii) Xxxx will forfeit all benefits received under this Agreement,
the Company's obligation to make the payments provided in paragraph 2(a)
shall terminate immediately and all of the Original Options and the
Additional Options described in paragraph 2(b) and then held by Xxxx shall
terminate immediately, except in each case with respect to those benefits
and payments covered by the Employees Retirement Investment Security Act.
c) The Company and Xxxx agree that if any court determines that any of the
covenants contained in paragraph 11, or any part thereof, are unenforceable
because of the duration or geographic scope of such provision, such court shall
have the power to reduce the duration or scope of such provision, as the case
may be, and, in its reduced form, such provision shall then be enforceable.
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14. Xxxx hereby represents that he has been advised by the Company (a) that
the execution of this Agreement is a very important decision which should not be
made before discussing it with his family, and (b) Xxxx agrees that the Company
has recommended that he consult with an attorney before signing this Agreement.
Xxxx also acknowledges that he received a copy of this Agreement on August 6,
1997 and that he has been given up to 22 calendar days to review and consider
it.
15. Xxxx expressly states that he has carefully reviewed the Company's
proposals concerning Lowe's separation from the Company and acknowledges and
agrees that he fully understands the terms and conditions of this Agreement, and
expressly agrees that the signing of this document is done voluntarily.
16. This Agreement is made and entered into in the State of New Jersey and
shall in all respects be interpreted, governed and by the laws of the State of
Delaware and to be enforced by the federal or state courts in the State of New
Jersey.
17. This Agreement sets forth the entire agreement between the parties, and
fully supersedes any and all prior agreements or understandings which may have
existed between the parties, and may not be modified except by a writing signed
by all parties.
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18. Nothing in this Agreement shall affect the option to purchase 20,000
shares of Common Stock of the Company granted to Xxxx prior to his becoming a
full time employee of the Company.
19. THIS AGREEMENT MAY BE REVOKED BY XXXX BY DELIVERING A SIGNED WRITTEN
NOTICE OF SUCH REVOCATION TO THE COMPANY, ATTENTION OF XXXX XXXXXX WITHIN EIGHT
(8) DAYS AFTER THIS AGREEMENT IS SIGNED (THE "REVOCATION PERIOD").
NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS AGREEMENT, THE PLAN,
THE INITIAL OPTION CERTIFICATE OR THE NEW OPTION CERTIFICATE, NEITHER THE
ORIGINAL OPTION OR THE ADDITIONAL OPTION MAY BE EXERCISED BY XXXX UNTIL THE
REVOCATION PERIOD HAS EXPIRED.
ALFACELL CORPORATION:
/S/XXXXXXX X. XXXX By:/S/ XXXXXXX XXXXXX
------------------------ ------------------------
Xxxxxxx Xxxx Xxxxxxx Xxxxxx
Chairman and Chief
Executive Officer
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