SEPARATION AND RELEASE AGREEMENT
This Separation and Release Agreement (the "Agreement") is made and
entered into as of February 5th, 2000, by and among Xxxxxx X. Xxxxx ("Xxxxx")
and Integrated Space Systems, Inc., a California Corporation and it's parent
company SpaceDev, Inc., a Colorado Corporation (hereinafter collectively
referred to as the "Company").
RECITALS
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X. Xxxxx worked for or was employed by the Company pursuant to an
employment agreement ("Employment Agreement") and a stock option agreement
("Stock Option Agreement") both dated February 7, 1998 (collectively "the
Employment Agreements"). The Company desires to terminate the employment of
Xxxxx pursuant to the Employment Agreements.
B. The Parties desire to bring the termination of Xxxxx'x employment to
a timely and mutually beneficial conclusion, to avoid publicity attendant to the
termination, and to avoid incurring any costs or expenses incident to
prosecution of any claims by Xxxxx or the Company.
C. The Parties enter into the Agreement expressly recognizing that the
making of this agreement does not in any way constitute an admission of
wrongdoing on the part of either Xxxxx or the Company.
DEFINITIONS
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The following terms have the following meanings:
"CLAIMS" means any and all actions, causes of action, claims, costs,
damages, debts, demands, expenses, liabilities, losses, obligations,
proceedings, and suits of every kind and nature, liquidated or unliquidated,
fixed or contingent, in law, equity or otherwise, and whether presently known or
unknown.
"XXXXX" means Xxxxxx X. Xxxxx.
The "COMPANY" means Integrated Space Systems, Inc. and SpaceDev, Inc.
"EFFECTIVE DATE" means the date first written above.
"PARTIES" means Xxxxx and the Company, collectively.
"PARAGRAPH" means a numbered paragraph of this Separation and Release
Agreement, unless otherwise noted, and all references to a paragraph shall
include all subparts or subparagraphs of that paragraph.
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The "AGREEMENT" means this document.
NOW THEREFORE, in reliance upon the above recitals and in consideration
of the mutual covenants contained herein, the Parties hereby agree and covenant
as follows:
1.1 Xxxxx'x employment with the Company is terminated effective
February 5th, 2000. Xxxxx waives any right to prior written notice and any other
notice from or by the Company. Xxxxx resigns from the ISS Board of Directors.
1.2 Except for Article 8 of the Employment Agreement which survives the
termination of Xxxxx'x employment by the Company, the Employment Agreements are
terminated and the Parties rights and responsibilities under the Employment
Agreements are discharged. The parties expressly agree that Article 8 of the
Employment Agreement shall continue on in full force and effect as modified in
paragraph 1.8 of this Agreement.
1.3 The Company agrees to make payments to Xxxxx pursuant to the
Promissory Note attached hereto as Exhibit A, and incorporation herein by this
reference. Payments shall be made in six (6) successive monthly installments, as
follows:
FEBRUARY 8, 2000 - $15,000
MARCH 1, 2000 - $11,000
APRIL 3, 2000 - $11,000
MAY 1, 2000 - $11,000
JUNE 1, 2000 - $11,000
JULY 3, 2000 - $11,000
(i) This Note may be pre-paid in full without penalty.
(ii) Installments not paid within fifteen (15) days after they
are due shall be subject to, and it is agreed that Xxxxx shall collect, a "late
charge" in the amount of ten (10%) percent of the delinquent monthly payment on
each delinquent installment.
(iii) In the event that any payment is not made within thirty
(30) days after the due date, the entire remaining unpaid balance shall become
immediately due and payable at the option of Xxxxx, without notice, time being
of the essence, and the sum shall bear interest from such time until paid at the
highest rate allowable under the laws of the State of California. Failure of
Xxxxx to exercise this option shall not constitute a waiver of the right to
exercise the same in the event of any subsequent default.
(iv) Larger sums may be paid at anytime if there is no default
under this Note, but the payment of any larger sums in addition to the payments
required in this Note shall not relieve the Company of the payment of the
periodic installments provided for in this Note, unless it is specifically
stipulated by the Company at the time of payment that any larger sums are to be
applied to the advance payment of the periodic installments next maturing in the
order of their due dates.
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1.4 The Company agrees to continue to pay Xxxxx his base salary for the
pay period from January 29, 2000 through February 11, 2000. Base salary for
purposes of this provision shall be calculated on the basis of an annualized
salary of ninety thousand dollars ($90,000). Xxxxx agrees that for a period of
six months from the date of this Agreement, he will be available for meetings,
introductions, review sessions, strategy meetings and to otherwise assist the
Company with obtaining or continuing business with the National Reconnaissance
Office. With the exception of the first meeting, which shall be without cost to
the Company and shall not exceed six hours, the Company will reimburse Xxxxx any
expenses in connection with such requests and pay the required hourly rate of
any firm that may employ xxxxx under any contract that may be required by that
firm.
1.5 Except for base salary accruing between January 29, 2000 and
February 11, 2000, Xxxxx agrees to waive all claims to any accrued but unpaid
compensation payable by the Company to Xxxxx under the terms of the Employment
Agreements, including but not limited to any accrued but unpaid salary and stock
options.
1.6 The Company agrees to use its best efforts to secure the removal of
Xxxxx as a personal guarantor of the Company's line of credit by March 31, 2000.
If the Company is not able to obtain a release from the Bank removing Xxxxx from
the line of credit, the Company will indemnify and hold Xxxxx harmless against
any claim against Xxxxx arising from a demand by the bank under the guarantee
Xxxxx executed on the line of credit.
1.7 Xxxxx agrees and covenants that except as may be authorized by the
Company in writing, he shall hold all confidential information in trust and
confidence for the Company, and not disclose such information to anyone outside
of the Company or use such information for the benefit of anyone other than the
Company. Confidential information shall include, without limitation, any and all
information concerning (i) the Company's marketing plans, business plans,
strategies, forecasts, unpublished financial information, budgets, and
projections; (ii) personnel information relating to the Company, including
organizational structure, salary, and qualifications of the Company's employee;
and (iii) customer and supplier information, including identities, sales and
purchase history or forecasts and agreements. Xxxxx warrants that with the
exception of information pertaining to the California Space Technology Alliance,
or information brought with Xxxxx at the time of his employment from outside
sources, he is not in possession of any Confidential Information or any
information that was created or developed from December 9, 1994 to the date of
this agreement. Confidential information shall not include information in the
public domain.
1.8 The Parties agree that the Employment Agreement of Xxxxx is
terminated with the exception of Article 8 of the Employment Agreement which
shall survive the termination and Article 8 of the Employment Agreement is
hereby superceded and amended to read: "For a period of one (1) year after the
Effective date, Xxxxx agrees and covenants that he shall not either directly or
indirectly solicit, induce, recruit, or compete with the Company in connection
with the SpotV or CHIPSat, or SpaceDev Micromission spacecraft as designed for
and derived from the NASA JPL study conducted by the Company. In addition Xxxxx
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shall not compete using hybrid rocket technology and related systems including
but not limited to any technology involving: hybrid rocket motors, sounding
rockets, orbital launch vehicles, orbital transfer or kick motors. Except that,
Xxxxx may pursue other small spacecraft missions, products and launch services.
Further, Xxxxx shall not encourage any of the Company's employees to leave their
employment or take away employees, or attempt to solicit, induce, recruit,
encourage or take away employees of the Company, either for himself or for any
other person or entity. The provisions of this section shall be enforceable in a
court of equity through the remedy of injunctive relief or any other legal or
equitable remedy.
1.9 Xxxxx and the Company agree that Xxxxx shall remain eligible to
receive all benefits to which he is entitled pursuant to the Stand-Still
Agreement ("Stand Still Agreement"), a copy of which is attached hereto as
Exhibit B, and incorporated herein by this reference.
1.10 Except for the rights and obligations expressly created or
reserved by the Agreement, Xxxxx on behalf of himself, his heirs, estate,
executors, administrators, successors and assigns fully releases and discharges
the Company and all agents, officers, directors, principals, employees,
attorneys, subsidiaries, affiliated companies, successors, assigns and insurers
of the Company, and each of them, from all actions, causes of action, claims,
judgments, obligations, damages, and liabilities, of whatsoever kind and
character, occurring at any time or times prior to the date of the Agreement,
including, but not limited to, any such claims arising out of or relating to
Xxxxx'x employment and to any acts or events involving Xxxxx and the Company.
Further, Xxxxx agrees that by this Agreement he waives any claim for damages
incurred at any time after the date of this Agreement because of alleged
continuing effects of any alleged acts or omissions involving the Company that
occurred on or before the Effective Date, and any right to xxx or pursue
arbitration for monetary or injunctive relief against the alleged continuing
effects of acts or omissions that occurred prior to the Effective Date.
1.11 Except for the rights and obligations expressly created or
reserved by the Agreement, the Company on behalf of itself, its agents,
officers, directors, principals, employees, attorneys, subsidiaries, affiliated
companies, successors, assigns and insurers of the Company, and each of them,
fully releases and discharges Xxxxx, his heirs, estate, executors,
administrators, successors and each of them, from all actions, causes of action,
claims, judgments, obligations, damages, and liabilities, of whatsoever kind and
character, occurring at any time or times prior to the date of the Agreement,
including, but not limited to, any such claims arising out of or relating to
Xxxxx'x employment and to any acts or events involving Xxxxx and the Company.
Further, Xxxxx agrees that by this Agreement he waives any claim for damages
incurred at any time after the date of this Agreement because of alleged
continuing effects of any alleged acts or omissions involving the Company that
occurred on or before the Effective Date, and any right to xxx or pursue
arbitration for monetary or injunctive relief against the alleged continuing
effects of acts or omissions that occurred prior to the Effective Date.
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1.12. Xxxxx and the Company expressly waive the benefit of any
statutory provision or common law rule that provides, in sum or substance, that
a release does not extend to claims which the party does not know or suspect to
exist in its favor at the time of executing the release, which if known by it,
would have materially affected its settlement with the other party. In
particular but without limitation, Xxxxx and the Company expressly waive the
provisions of California Civil Code section 1542, which statute reads:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE 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.
1.13 Xxxxx agrees that he shall not be entitled to any employment with
the Company or with any of its subsidiaries or related companies, or any
successor, and that he will not apply for employment with the Company or related
or successor companies. Xxxxx further agrees that he will not institute or join
any action, lawsuit, or proceeding against the Company, its subsidiaries,
related companies, or successors for any failure to employ him.
1.14 For a period of five (5) years from the Effective Date the Company
and Xxxxx covenant and agree that the terms, amount and facts of the Agreement
shall be kept strictly confidential. Xxxxx therefore agrees not to disclose,
directly or indirectly, any information concerning the Agreement to anyone,
including past, present and future employees of the Company. Xxxxx further
agrees not to divulge or to disclose in any way to any third parties any of the
alleged facts, circumstances, or events that gave rise to the Agreement or
Xxxxx'x termination. . Similarly the Company agrees not to disclose, directly or
indirectly, any information concerning the Agreement to any third party. The
Company further agrees not to divulge or to disclose in any way to any third
parties any of the alleged facts, circumstances, or events that gave rise to the
Agreement or Xxxxx'x termination. The provisions of this section shall no apply
to information that must be disclosed by lawful orders of a Court of competent
jurisdiction or to a governmental agency conducting an official inquiry.
1.15 The Parties understand and agree that any breach of section 1.14
shall entitle nonbreaching Party to bring an action for failure to comply with
the terms of this Agreement. Further, this Agreement may be pled as a full and
complete defense to any Claim that may be instituted, prosecuted or attempted by
either Party in breach of this Agreement. In any such action, and in any action
to enforce this Agreement, the prevailing Party shall recover its reasonable
attorneys' fees and costs.
1.16 The Parties expressly understand that both direct and indirect
breaches of this Agreement are proscribed. Therefore, Xxxxx and the Company
covenant that each will not institute or prosecute, against the other, any
action or other proceeding based in whole or in part upon any Claims released by
this Agreement.
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1.17 All agreements and obligations of the Parties under this Agreement
shall survive execution and delivery of this Agreement and are not released or
affected hereby.
GENERAL PROVISIONS
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2.1 In entering and making this Agreement, the Parties assume the risk
of any mistake of fact or law. If the Parties, or any of them, should later
discover that any fact they relied upon in entering this Agreement is not true,
or that their understanding of the facts or law was incorrect, the Parties shall
not be entitled to seek rescission of this Agreement by reason thereof. This
Agreement is intended to be final and binding upon the Parties regardless of any
mistake of fact or law.
2.2 This Agreement shall be binding upon and for the benefit of the
Parties and their respective subsidiaries, officers, directors, partners,
employees, heirs, conservators, successors, devisees and assigns.
2.3 Neither the payment of consideration referred to herein, nor the
performance of any covenants contained herein, nor anything contained or
incorporated herein shall be deemed, nor shall the negotiation, execution and
performance of this Agreement constitute, any admission or concession of
liability or wrongdoing on the part of any Party, or any other form of admission
with respect to any matter, thing or dispute whatsoever. Any such liability or
wrongdoing is expressly denied.
2.4 Each Party warrants that no promise, inducement or agreement not
expressed herein has been made in connection with this Agreement. This Agreement
constitutes the entire agreement between the Parties and supercedes and replaces
all prior negotiations or proposed agreements, written or oral.
2.5 This Agreement may not be altered, amended, modified or otherwise
changed in any respect whatsoever except by a writing duly executed by an
authorized representative of each of the Parties.
2.6 The language of this Agreement shall be construed as a whole,
according to its fair meaning and intention, and not strictly for or against any
Party, regardless of who drafted or was principally responsible for drafting the
Agreement or any specific term or condition hereof. This Agreement shall be
deemed to have been drafted by the Parties jointly, and no Party shall urge
otherwise.
2.7 The headings in this Agreement are for convenience only. They in no
way limit, alter or affect the meaning of this Agreement.
2.8 This Agreement shall be construed and enforced pursuant to the laws
of the State of California.
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2.9 Should any provision of this Agreement be held illegal, such
illegality shall not invalidate the whole of this Agreement; instead, the
Agreement shall be construed as if it did not contain the illegal part, and the
rights and obligations of the Parties shall be construed and enforced
accordingly.
2.10 This Agreement may be executed in multiple originals, each of
which is equally admissible in evidence and shall be deemed to be one and the
same instrument. The Agreement shall not take effect until each Party has signed
a counterpart.
2.11 Each Party represents and warrants that it has the full power and
authority to enter into this Agreement and to perform all transactions, duties
and obligations herein set forth. Each signatory to this Agreement who signs on
behalf of a Party represents and warrants that he or she has the authority to
sign on behalf of that Party.
2.12 Except as may be otherwise expressly provided herein, this
Agreement shall not effect or terminate the Parties rights and responsibilities
under the following sections of the Employment Agreement which shall survive the
termination of the Employment Agreement and the execution of this Agreement:
Article 8, entitled "Noncompetition; Nonsolicitation; Confidential Information",
as superceded and amended by paragraph 1.8 of this Agreement.
2.13 XXXXX FURTHER STATES THAT HE HAS CAREFULLY READ THIS RELEASE, THAT
IT HAS BEEN FULLY EXPLAINED TO HIM BY HIS ATTORNEY, OR THAT HE HAS KNOWINGLY AND
INTELLIGENTLY WAIVED THE ADVICE OF COUNSEL, AND THAT HE FULLY UNDERSTANDS THE
AGREEMENT'S FINAL AND BINDING EFFECT, THAT THE ONLY PROMISES MADE TO INDUCE HIM
TO SIGN THIS AGREEMENT ARE THOSE STATED IN PARAGRAPH 3, AND THAT HE IS SIGNING
THIS AGREEMENT VOLUNTARILY AND WITH THE FULL INTENT OF RELEASING THE COMPANY
FROM ALL CLAIMS.
IN WITNESS HEREOF, the Parties have executed this Agreement as of the
Effective Date.
Xxxxxx X. Xxxxx Integrated Space Systems, Inc.
By: /S/ Xxxxxx X. Xxxxx By: /s/ Xxxxxxx Xxxxx
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SpaceDev, Inc.
By: /s/ Xxxxx Xxxxxx
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