[CALYPTE BIOMEDICAL CORPORATION LETTERHEAD]
September 17, 1999
Xxxx X. XxXxxxxx
0000 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, XX 00000
Re: CONSULTING AGREEMENT WITH CALYPTE
Dear Xxxx:
Upon your signature at the end of this letter where indicated, this
letter will be the binding agreement (the "AGREEMENT"), effective as of
September 17, 1999 (the "EFFECTIVE DATE"), between Calypte Biomedical
Corporation ("CALYPTE") and you with respect to your provision of service as
a consultant to Calypte as provided in this letter (the services described in
Sections 1(a) and (b) hereof are referred to herein as the "SERVICES"), from
and after your resignation, as of the date hereof, as an employee of and as
Chief Operating Officer and Chief Financial Officer of the Company.
1. SERVICES.
(a) BASIC RETAINED SERVICES. Subject to the terms and conditions
of this Agreement, you hereby are retained by Xxxxxxx as a consultant to
Calypte from the Effective Date until terminated as provided herein, to
provide up to an aggregate of sixteen (16) hours of Services per calendar
month during the term hereof (or such additional hours as you may agree with
Calypte as provided in Section 1(b) hereof), with travel time counted as
one-half time (I.E., one hour of travel time will be counted as one-half hour
of time spent consulting hereunder), with respect to (i) financial and
operational matters and projects relating to Calypte's current and/or future
products, and (ii) assisting in the selection, recruitment and integration
with Calypte of a Controller and of a Chief Financial Officer, all as may be
requested from time to time during the term hereof orally or in writing by an
officer (President, Chief Executive Officer, Chief Financial Officer, Vice
President) or member of the Board. The number of hours spent by you
hereunder as rendering Services to Calypte will be in addition to time you
spend to discharge your customary duties as a Director of Calypte, including
time to prepare for and attend meetings of the Board and of Board Committees
upon which you serve, during such time as you are serving as a Director of
Calypte. You will not receive any compensation hereunder for your services
as a Director of Calypte, but will be entitled to such indemnification,
stock, and/or stock options and other benefits from the Company as are made
available from time to time by the Company to other Directors.
(b) ADDITIONAL SERVICES. At the request of Xxxxxxx, and upon
written agreement between you and Calypte (each of which agreements will be
in the form of EXHIBIT A attached hereto and incorporated herein by
reference, and each of which will be considered as a part of this Agreement
when so mutually executed), and in addition to the basic retained Services
Xxxx X. XxXxxxxx
September 22, 1999
Page 2
rendered as described in Section 1(a) hereof, you will render such number of
hours of Services as are specified therein (with a "day of consulting" being
considered for such purposes as eight (8) hours, and with travel time being
counted as one-half time). You will be paid at the rate of $100.00 per hour
for any such additional hours rendered.
(c) SCHEDULING; LOCATION. The days upon which Calypte will
require your services will be based upon mutually agreeable dates and times.
Calypte will provide as much advance notice as possible to you of the dates
and times required, and you will make every reasonable effort to make
yourself available during such dates. You will not be called upon to render
such hours in excess of two days in any particular month (eight hours per
day) without your prior written approval, and Calypte will not require you to
render such services at dates, times or places that would reasonably
interfere with other work commitments you may have. You may render the
Services by telephone and/or e-mail, and/or on-site at Calypte's headquarters
in the San Francisco Bay Area, and/or at other locations, as determined in
good faith by Calypte after consultation with you as to mutual convenience
and the particular Services required.
(d) REPORTING. You will report to the President or Chief
Executive Officer, and to the Board, and will perform such activities as are
set forth in this Agreement, provided that Calypte may give you direction
through such other officers as specified in Section 1(a) hereof. You may not
assign or subcontract your duties or rights under this Agreement without the
prior written consent of Calypte signed by its President or Chief Executive
Officer.
(e) OTHER ACTIVITIES. Xxxxxxx acknowledges and agrees that, while
you will devote such time and effort as is necessary to discharge your duties
hereunder, you will not be providing your full-time services to Calypte, and
that you may consult with or become an employee of other entities as you wish
(including but not limited to accepting full time employment), subject to
your obligations as to confidential and proprietary information of Calypte as
set forth in this Agreement.
2. COMPENSATION AND EXPENSES.
(a) NO CASH COMPENSATION; AMENDMENT OF SECTION 7(D) OF EMPLOYMENT
AGREEMENT WITH RESPECT TO SEVERANCE PAY AND CONTINUED VESTING OF OPTION.
Calypte will pay no cash amount to you for your services rendered under this
Agreement. Instead, Xxxxxxx and you hereby agree, pursuant to Section 8 of
the Employment Agreement dated as of October 28, 1998 between you and Calypte
(the "EMPLOYMENT AGREEMENT"), that Section 7(d) of your Employment Agreement
hereby is amended to read as follows, effective as of the day before the
Effective Date; except as herein amended, neither your Employment Agreement
nor such options referred to in said section are amended:
"The Executive may voluntarily terminate his employment at any
time beginning July 1, 1999, in which event he shall receive
severance pay of Fifty-Five Thousand Dollars ($55,000.00). If in
connection with the Executive's voluntary termination of employment
hereunder, the Executive and the Company enter into a
Xxxx X. XxXxxxxx
September 22, 1999
Page 3
written agreement under which the Executive is to render consulting
services to the Company, then from and after the date of such
voluntary termination, vesting (exerciseability) of Executive's
currently outstanding incentive stock option from the Company which
was originally granted to Executive on October 27, 1998, for a
total of 300,000 shares of Common Stock of the Company, originally
vesting over a 24-month period beginning October 27, 1998, at the
rate of 12,500 shares per month, will not cease and such option is
hereby amended to provide that it shall continue after such
termination date to vest (become exerciseable) at the rate of four
thousand (4,000) shares at the end of each monthly anniversary of
the date of such termination, through the earlier of the date of
termination of such consulting agreement or the twelfth (12th)
monthly anniversary of the date of such termination. In addition,
if in connection with any other Calypte stock option plan or grant,
other than a plan or grant provided to directors of Calypte,
Executive has any obligation that requires Executive to exercise an
option to purchase Calypte stock within a specific period of time,
such period of time will not begin until the date of termination of
the Consulting Agreement with Calypte dated September 17, 1999."
(b) EXPENSE REIMBURSEMENT. Calypte will reimburse you for all
reasonable, ordinary and necessary travel and entertainment expenses incurred
by you in conjunction with your services to Calypte hereunder, consistent
with Xxxxxxx's then-standard reimbursement policy, and, as applicable, travel
policy, provided, as to a given expense, you have submitted commercially
customary support documentation to Calypte therefor.
3. OUR RELATIONSHIP.
(a) INDEPENDENT CONTRACTOR. In performance of your services under
this Agreement, you will be an independent contractor of, and are not an
agent or employee of, and have no authority to bind, Calypte by contract or
otherwise.
(b) EMPLOYMENT TAXES AND BENEFITS. You will report as
self-employment income all compensation you received pursuant to this
Agreement, including the fair market value of the Shares. You will indemnify
Calypte and hold it harmless from and against all claims, damages, losses and
expenses, relating to any obligation imposed by law on Calypte to pay any
withholding taxes, social security (except for employer's share of social
security, if any), unemployment or disability insurance, or similar items in
connection with compensation received by you pursuant to this Agreement. You
will not be entitled to receive any vacation or illness payments, or to
participate in any plans, arrangements, or distributions by Calypte
pertaining to any bonus, stock option, profit sharing, insurance or similar
benefits for Calypte's employees, except as provided herein or as otherwise
specifically approved by the Board.
(c) NO REMUNERATION AS TO PRODUCTS. You will receive no royalty
or other remuneration on the production or distribution of any products
developed by the Company or by you in connection with or based upon the
Services.
4. INDEMNIFICATION.
Xxxx X. XxXxxxxx
September 22, 1999
Page 4
(a) BY YOU. To the extent determined by a tribunal of competent
jurisdiction (arbitral or judicial), not subject to further appeal, you will
indemnify Calypte and hold it harmless from and against all claims, damages,
losses and expenses, including court costs and reasonable fees and expenses
of attorneys, expert witnesses, and other professionals, arising out of or
resulting from:
(i) Any action by a third party against Calypte to the
extent based on any claim that any Services performed under this Agreement,
or their results, to your actual knowledge (A) infringe a patent, trademark,
copyright or other proprietary right, and/or (B) violate a trade secret of
such third party; and
(ii) Any action by a third party to the extent based on any
conduct by you in performing Services under this Agreement which results in
any of the following and for which such tribunal determines you to be liable
to Calypte under applicable law: (i) any bodily injury, sickness, disease or
death; (ii) any injury or destruction to tangible or intangible property
(including computer programs and data) or any loss of use resulting
therefrom; or (iii) any violation of any statute, ordinance, or regulation.
(b) BY XXXXXXX. To the extent legally permitted, and not in
derogation of your obligations under Section 4(a) hereof: (i) you will be
considered as subject to the indemnity provisions of Calypte's Certificate of
Incorporation and Bylaws, a copy of which will be furnished to you upon
request, and (ii) Calypte will indemnify you and hold you harmless from and
against all claims, damages, losses and expenses, including court costs and
reasonable fees and expenses of attorneys, expert witnesses, and other
professionals, arising out of or resulting from any action by a third party
against Calypte or you, or both, in connection with or based upon the
performance by you of the Services, or their result.
5. PROPERTY OF CALYPTE.
(a) DEFINITIONS. For the purposes of this Agreement:
(i) "INVENTIONS" means any and all inventions, ideas,
designs, circuits, schematics, formulas, algorithms, trade secrets, works of
authorship, mask works, developments, methods, processes, techniques,
improvements, and related know-how in the field of research, development and
commercialization in which Calypte is engaged, and which are made by you,
alone or in combination with others, which result from or relate to the
services you perform for Calypte hereunder, and whether made on behalf of
Calypte under this Agreement, or with the use of or as a result of access to
Confidential Information, including but not limited to any derivative work
which constitutes an improvement or modification to any tangible form of
Confidential Information, as hereinafter defined, such as any design,
drawing, or product that embodies Confidential Information.
(ii) "DESIGNS AND MATERIALS" means all designs, discoveries,
inventions, products, computer programs, procedures, improvements, developments,
drawings, notes,
Xxxx X. XxXxxxxx
September 22, 1999
Page 5
documents, information and materials made, conceived or developed by you
alone or with others which result from or relate to the services you perform
for Calypte hereunder.
(iii) "MORAL RIGHTS" means any right to claim authorship of a
work, any right to object to any distortion or other modification of a work,
and any similar right, existing under the law of any country in the world, or
under any treaty.
(b) ASSIGNMENT OF OWNERSHIP. You agree that all the Inventions,
Designs and Materials that (i) are developed using equipment, supplies,
facilities or trade secrets of Calypte, (ii) result from work performed by
you for Calypte or (iii) relate to Calypte's business or current or
anticipated research and development, will be the sole and exclusive property
of Calypte. You hereby irrevocably transfer and assign any and all of your
right, title, and interest in and to Inventions, Designs and Materials,
including but not limited to all patent rights, copyrights, trademarks and
trade secrets, to Calypte. All Inventions, Designs and Materials will be the
sole property of Calypte and Calypte will have the sole right to determine
the treatment of any Inventions, Designs and Materials, including the right
to keep them as trade secrets, to file and execute patent applications on
them, to use and disclose them without prior patent application, to file
registrations for copyright or trademark on them in its own name, or to
follow any other procedure that Calypte deems appropriate. You acknowledge
that copyrightable works prepared by you within the scope of your service
hereunder are "works for hire" under the federal Copyright Act and that
Calypte will be considered the author thereof. If Calypte files an original
United States patent application covering any invention of which you are a
named inventor, you will receive in each case from Calypte an inventor's fee
of One Hundred Dollars $100.00 in cash as full compensation therefor. You
will:
(i) Disclose promptly in writing to Calypte all Inventions,
Designs and Materials; and
(ii) Cooperate with and assist Calypte to apply for, and to
execute any applications and/or assignments reasonably necessary to obtain,
any patent, copyright, trademark or other statutory protection for
Inventions, Designs and Materials in Calypte's name as Calypte deems
appropriate, provided that Calypte will reimburse you for any reasonable
costs incurred by you, and your normal billing rate for reasonable time
incurred, in connection therewith; and
(iii) Otherwise treat all Inventions, Designs and Materials as
"Confidential Information," as defined below. Your obligations to so
disclose, assist, and execute will survive until the earlier of your death or
disability or five years following any expiration or termination of this
Agreement.
(c) MORAL RIGHTS WAIVER. You hereby irrevocably transfer and
assign to Calypte any and all Moral Rights that you may have in any services
you render hereunder, or in any Inventions, Designs and Materials or products
of Calypte. You also hereby forever waive and agree never to assert against
Calypte, its successors or licensees any and all Moral Rights you may
Xxxx X. XxXxxxxx
September 22, 1999
Page 6
have in any such services, Inventions, Designs and Materials or such
products, even after expiration or termination of this Agreement.
(d) COMPANY PROPERTY. All papers, records, data, notes, drawings,
files, documents, samples, devices, products, equipment, and other materials,
including copies and in whatever form, relating to the business of Calypte
that you possess or create as a result of your service to Calypte, whether or
not confidential, are the sole and exclusive property of Calypte.
6. CONFIDENTIAL INFORMATION. You acknowledge that you will acquire
information and materials from Calypte and knowledge about the business,
products, programming techniques, experimental work, customers, clients and
suppliers of Calypte and that all such knowledge, information and materials
acquired, the existence, terms and conditions of this Agreement, and the
Designs and Materials, are and will be the trade secrets and confidential and
proprietary information of Calypte (collectively "CONFIDENTIAL INFORMATION").
Confidential Information will not include, however, any information which is
or becomes part of the public domain through no fault of your own or that
Calypte regularly gives to third parties without restriction on use or
disclosure. You will hold all such Confidential Information in strict
confidence, and will not disclose it to others or use it in any way,
commercially or otherwise, except in performing your services hereunder, and
will not allow any unauthorized person access to it, either before or after
expiration or termination of this Agreement. You will take all action
reasonably necessary and satisfactory to protect the confidentiality of the
Confidential Information in your possession, including, without limitation,
implementing and enforcing operating procedures to minimize the possibility
of unauthorized use or copying of the Confidential Information.
7. TERM OF SERVICE; TERMINATION; EFFECT OF TERMINATION.
(a) TERM OF SERVICE; TERMINATION. This Agreement is for a period
of twelve (12) months from and after the Effective Date, subject to earlier
termination as provided in Section 7(b) hereof.
(b) TERMINATION; EFFECT OF TERMINATION. This Agreement will
terminate automatically upon the earliest of (i) your death, (ii) such date
as you voluntary terminate service, by written notice to Calypte, or the date
upon which Calypte terminates your service hereunder for cause by giving
written notice thereof to you, stating therein that such termination is for
cause and specifying in reasonable detail such cause. For purposes of this
Agreement, "cause" is defined as your willful failure to follow lawful and
commercially reasonable directives of the Board, and/or intentional damage to
the tangible or intangible property of Calypte, and/or conviction of a crime
involving moral turpitude, and/or the performance of any dishonest or
fraudulent act which is or would be, in each case as determined in good faith
by the Board, materially detrimental to the interest of Calypte and its other
stockholders. Upon termination of your service with Calypte for any reason,
Calypte will pay you all of your accrued and unpaid expenses, if any,
provided, as to a given expense, you have submitted commercially customary
support documentation to Calypte therefor. Your obligations of
confidentiality hereunder will survive any such termination, and termination
hereof will not have any effect on any other binding
Xxxx X. XxXxxxxx
September 22, 1999
Page 7
agreement between Calypte and you except to the extent specifically so stated
in such other agreement or agreements.
8. PRIOR CONTRACTS. You represent that except as disclosed in writing
to Xxxxxxx, (a) there are no other contracts to assign Inventions, Designs or
Materials that are, as of the Effective Date, in existence between you and
any other person or entity, and (b) as of the Effective Date, you have no
employment, consultancies or undertakings which would restrict or impair your
performance of this Agreement.
9. GENERAL. This Agreement may be executed in counterparts, each of
which will be deemed an original, but both of which together will constitute
one and the same instrument. This Agreement will be governed by the laws of
the State of California without regard to its body of law controlling
conflict of laws. This Agreement is the complete and exclusive agreement
between you and Calypte regarding the specific subject matter of this
Agreement and supersedes in their entirety all prior agreements (except the
Employment Agreement, as applicable, and outstanding stock options),
understandings and communications, oral or written, between us regarding the
specific subject matter of this Agreement, will be binding upon and inure to
our respective successors and assigns, and upon your heirs, executors and
administrators, and may only be amended by a writing signed by each of us or
our respective successors, assigns or authorized representatives.
We look forward to continuing to work with you, as a consultant, as part
of our team for the success of Calypte.
Sincerely,
/s/ Xxxxxxx Xxxxxx
-------------------------------------
Xxxxxxx Xxxxxx
President and Chief Executive Officer
ACCEPTED AND AGREED:
/s/ Xxxx XxXxxxxx
-------------------------------------
Xxxx X. XxXxxxxx
Date signed: September 17, 1999
------------
