SEPARATION AND CONSULTING AGREEMENT AND RELEASE OF CLAIMS
THIS SEPARATION AND CONSULTING AGREEMENT AND RELEASE OF CLAIMS
("Agreement") is made between XXXXXXX X. XXXXXXX ("Xxxxxxx") and CALYPTE
BIOMEDICAL CORPORATION and all of its subsidiaries and affiliated companies
(collectively hereafter "Calypte" or "the Company") and shall become effective
on the Effective Date as set forth herein.
RECITALS
WHEREAS, Xxxxxxx has been employed by Calypte as Executive Chairman
of Calypte Biomedical Corporation pursuant to an Employment Agreement, dated May
10, 2002 (the "Employment Agreement"), and the parties hereto desire to end that
relationship, and to settle, fully, finally and amicably, all claims against
each other, including, but not limited to, any claims related to the employment
of Xxxxxxx and the termination of that employment and the Employment Agreement.
NOW, THEREFORE, in order to provide said benefits and in
consideration of the mutual promises, covenants and representations set forth
below and other good and valuable consideration, the parties agree as follows:
1. Relinquishment of Positions/Employment
Pursuant to this Agreement, Xxxxxxx has resigned, effective as of
November 15, 2004, his position as Executive Chairman and as Director of the
Company and any other position he holds as an officer, employee or director from
any subsidiary or affiliated company ("Resignation Date").
2. Payment of Good and Valuable Consideration
x. Xxxxxxx has been paid within 96 hours of his Resignation
Date, his final paycheck, which constitutes his regular pay as an employee
through November 20, 2004. Payments under this paragraph shall be less
applicable taxes.
b. The Company will also pay on behalf of Xxxxxxx the cost of
COBRA payments (based on the applicable percentage previously paid by Company on
behalf of Xxxxxxx for health insurance while an employee) for a period of
eighteen (18) months after his Resignation Date or the legal limit of COBRA,
whichever occurs later. Xxxxxxx agrees that should he become eligible for health
insurance through a new employer during the eighteen (18) month period, that he
will promptly notify the Company and the Company's obligation to make COBRA
payments will end with Xxxxxxx'x eligibility to participate under the New Plan.
c. Notwithstanding anything to the contrary, it is expressly
understood that all payments under this Agreement are unconditional obligations
of Calypte and are not contingent on consulting or advisory services being
provided by Xxxxxxx or used by the Company. It is further understood that
Calypte will have no right of setoff to its payment obligations under this
Agreement and that this Agreement, subject to paragraph 23, is irrevocable,
non-cancelable and is not subject to early termination for any reason
whatsoever. Commencing on November 15, 2004, and ending on November 14, 2006
("Consulting Term"), Xxxxxxx shall provide consulting or advisory services to
Calypte in order to provide transition and other services as may be requested by
Calypte's Chief Executive Officer. As part of his advisory services, Xxxxxxx
shall provide to Calypte a status report of all pending projects Xxxxxxx has
been involved with prior to the Resignation Date including, without limitation,
names and contact information. In addition to the COBRA payments set forth in
paragraph 2(b), above, Xxxxxxx'x services as a consultant shall be paid in a
total sum of $1,033,389.00 as follows:
(i) During the first year of the Consulting Term, commencing on December
15, 2004 and ending on November 14, 2005, a total of $300,000.00, payable in
monthly increments of $25,000.00. During the second year of the Consulting Term,
commencing on December 15, 2005 and ending on November 14, 2006, a total of
$213,389.00, payable in 11 monthly increments of $18,000.00 and a final monthly
increment of $15,389.00. Payments shall be made on the 15th day of each month.
In the event, however, that the Company closes a financing during the Consulting
Term, then the Company shall accelerate such payments as follows:
(a) For a financing between $5,000,000 and $10,000,000, the
Company shall pay $175,000, less amounts already paid pursuant to this paragraph
2(c)(i), within five (5) days of the closing or January 3, 2005, whichever is
later;
(b) For a financing in an amount over $10,000,000, the Company
shall pay $375,000, less amounts already paid pursuant to this paragraph
2(c)(i), within five (5) days of the closing or January 3, 2005, whichever is
later; and
(c) The Company shall pay any remaining amounts due to be paid
under this paragraph 2(c)(i) on a pro-rata basis for the balance of the
Consulting Term.
(ii) Upon the expiration of any restrictions on the transfer of Calypte
shares, the Company shall on January 3, 2005 pay on Xxxxxxx'x behalf the sum of
$520,000.00, representing the amounts necessary for Xxxxxxx to exercise
1,625,000 options to purchase shares of Calypte common stock pursuant to the
Calypte Biomedical Corporation 2000 Equity Incentive Plan.
d. Notwithstanding the provisions of paragraph 2(c)(ii),
above, nothing herein shall prevent Xxxxxxx from exercising any vested options
pursuant to the Company's applicable stock option plans. The Company also agrees
to xxxxx Xxxxxxx accelerated vesting of all of his current issued but unvested
options as of the Effective Date of this Agreement with the term to exercise all
options expiring at the end of the term of this Agreement or as provided for
under the specific option, whichever is the greater.
e. All valid and supported expenses incurred by Xxxxxxx prior
to the Resignation Date and submitted to the Company will be paid in the
ordinary course by the Company.
f. In the event that Xxxxxxx should die or become
incapacitated prior to this Agreement terminating by its own terms, the residual
amount to be paid under this Agreement will be paid in accordance with the terms
of this Agreement to Xxxxxxx'x estate or his duly appointed personal
representative as the case may be.
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g. All payments made by Company under this Agreement shall be
forwarded to an address so designated in writing by Xxxxxxx or his legal counsel
from time to time.
3. Indemnification Against Claims
Calypte agrees to indemnify and hold Xxxxxxx harmless from any
liability, claims, demands, costs, expenses and attorneys' fees incurred by him
as a result of any actions by him in the course of his employment, or as a
director of the Company to the extent other directors would be so indemnified
pursuant to applicable law. Calypte further agrees to indemnify and hold Xxxxxxx
harmless from any liability, claims, demands, costs, expenses, and attorneys'
fees incurred by him as a result of any actions by him, specifically in
connection with providing advisory and consulting services to Calypte.
4. Non-Disclosure of Trade Secrets and Confidential Information
Xxxxxxx understands and agrees that in the course of employment with
Calypte he has acquired confidential information and trade secrets concerning
the operations of Calypte and its future plans and methods of doing business,
which information Xxxxxxx understands and agrees would be damaging to Calypte if
disclosed to a competitor or made available to any other person or corporations.
Xxxxxxx understands and agrees that such information either has been developed
by him or divulged to him in confidence, and he understands and agrees that he
will keep all such information secret and confidential. Furthermore, Xxxxxxx
agrees that on or before the Effective Date of this Agreement, he will turn over
to Calypte all Company confidential files, records, and other documents. In
addition, Xxxxxxx will return all property in his possession owned by Calypte.
5. Non-Solicitation
Xxxxxxx further agrees that he will not solicit or participate or
assist in any way in the solicitation of any person in management, professional
or technical positions at Calypte for employment by any other company. However,
Xxxxxxx will not violate this provision if said employee pursues a position with
Xxxxxxx'x future employer without any encouragement or involvement direct or
indirect of Xxxxxxx.
6. No Other Claims
Xxxxxxx represents and warrants that he has not filed against
Calypte or any of its representatives, any claim, complaint, charge or suit,
with any federal, state or other agency, court, board, office or other forum or
entity, including without limitation, any application for workers compensation
benefits as of the Effective Date.
7. General Release
a. As a material inducement to Calypte to enter into this
Agreement, Xxxxxxx, on behalf of himself and his heirs, executors,
administrators, successors and assigns, to the extent permissible by law, does
hereby irrevocably and unconditionally release, acquit and forever discharge
Calypte, and its divisions, subsidiaries, affiliates and all owners,
stockholders, predecessors, successors, assigns, agents, directors, officers,
employees, representatives, and attorneys, acting by, through, under or in
concert with Calypte or any parent, subsidiary or related entity, from any and
all charges, complaints, grievances, claims, liabilities, obligations, promises,
agreements, controversies, damages, actions, causes of action, suits, rights,
demands, costs, losses, debts and expenses (including attorneys' fees and costs
actually incurred), of any nature whatsoever, known or unknown, suspected or
unsuspected, joint or several, which Xxxxxxx has had or may hereafter claim to
have had, against Calypte by reason of any matter, act, omission, cause or event
whatever from the beginning of time to the Resignation Date ("Claims"); other
than those obligations of Calypte set forth in this Agreement.
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b. As a material inducement to Xxxxxxx to enter into this
Agreement, Calypte, and its divisions, subsidiaries, affiliates and all
predecessors, successors, assigns and agents, to the extent permissible by law,
do hereby irrevocably and unconditionally release, acquit and forever discharge
Xxxxxxx, from any and all charges, complaints, grievances, claims, liabilities,
obligations, promises, agreements, controversies, damages, actions, causes of
action, suits, rights, demands, costs, losses, debts and expenses (including
attorneys' fees and costs actually incurred), of any nature whatsoever, known or
unknown, suspected or unsuspected, joint or several, which Calypte has had or
may hereafter claim to have had, against Xxxxxxx by reason of any matter, act,
omission, cause or event whatever from the beginning of time to the Resignation
Date ("Claims"); other than those obligations of Xxxxxxx set forth in this
Agreement.
This release and waiver of Claims specifically includes, but without
limiting the foregoing general terms, the following: (1) all Claims arising from
or relating in any way to any act or failure to act by any employee of Calypte,
(2) all Claims arising from or relating in any way to the employment
relationship of Xxxxxxx with Calypte and/or the termination thereof, including
any claims which have been asserted or could have been asserted against Calypte,
together with (3) any and all Claims which might have been asserted by Xxxxxxx
in any suit, claim, or charge, for or on account of any matter or things
whatsoever that has occurred up to and including the date of this Agreement,
under any and all laws, statutes, orders, regulations, or any other claim of
right(s), including without limitation, Title VII of the Civil Rights Act of
1964, as amended, the Age Discrimination in Employment Act, the California Labor
Code, and the California Fair Employment and Housing Act, or any Claim in
contract or tort.
8. Release of Unknown or Unsuspected Claims
For the purpose of implementing a full and complete release and
discharge of the parties hereto, the parties expressly acknowledge that this
Agreement is intended to include in its effect, without limitation, all Claims
which the parties have against one another but do not know or suspect to exist
in their favor at the time of execution hereof, which if known or suspected by
them would materially affect their decision to execute this release; that this
Agreement contemplates the extinguishment of any such Claim or Claims, and that
all rights under Section 1542 of the California Civil Code are hereby expressly
waived. Section 1542 of the Civil Code provides:
"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."
Xxxxxxx and Calypte represent that they have read and understood the
provisions of California Civil Code Section 1542.
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9. Future Litigation or Anticipated Litigation
Xxxxxxx agrees that he shall make himself reasonably available to
the Company and its counsel to assist in, cooperate with or otherwise testify in
connection with any litigation where his participation or assistance is needed
or required by law. Calypte agrees that it shall make its employees and
directors reasonably available to Xxxxxxx and his counsel to assist in,
cooperate with or otherwise testify in connection with any litigation where its
participation or assistance is needed or required by law.
10. Nondisparagement
Xxxxxxx agrees that he will not disparage Calypte, and its officers,
directors or employees. Calypte's officers and directors agree that they will
not disparage Xxxxxxx.
11. Other Relief
The parties agree that any dispute, controversy or claim between the
parties arising out of or relating to this Agreement, or any breach or asserted
breach thereof, shall be determined and settled by arbitration in accordance
with the rules for dispute resolution of JAMS/ENDISPUTE in effect at the time
the arbitration commences. The prevailing party in such arbitration shall be
entitled to its reasonable costs and expenses (including reasonable attorneys'
fees) in such arbitration as part of the award. Judgment on the award may be
entered in any court having jurisdiction thereof, and the parties specifically
reserve all rights to appeal such judgment as if it were rendered in a
court-of-law. Notwithstanding the foregoing, in the event of any default by
Calypte in payment under this Agreement which shall remain uncured for a period
of ten (10) days, on written notice of default to Calypte, Xxxxxxx shall have
the right to enter judgment in a court of competent jurisdiction for payments
under the Agreement giving credit to amounts previously received under the
Agreement. At Xxxxxxx'x request, Calypte will execute concurrently with the
execution of this Agreement a confession of judgment in reasonably acceptable
form to Calypte as prepared by legal counsel for Xxxxxxx at Xxxxxxx'x sole
expense to be held in escrow by legal counsel for Xxxxxxx. A true copy of the
confession of judgment is annexed to this Agreement as Exhibit A.
12. Press Release
On November 16, 2004, Calypte issued a press release to the public
concerning Xxxxxxx'x resignation in the form attached hereto. Xxxxxxx has
consented to the issuance of the press release as same pertains to Xxxxxxx'x
resignation as executive chairman.
Neither party will issue any other press release concerning the
resignation.
13. Binding Agreement
This Agreement shall be binding upon Xxxxxxx and Calypte and their
respective heirs, administrators, representatives, executors, successors and
assigns and shall inure to the benefit of the parties hereto and their
representatives, and each of them, and to their heirs, administrators,
representatives, executors, successors and assigns.
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14. Attorney's Fees
Each party hereto will bear its own costs and attorneys' fees
incurred in achieving the settlement and release of this matter. If any party
defaults under the terms of this Agreement, and the other party employs an
attorney to enforce or interpret the terms of this Agreement, or to obtain a
declaration of rights under this Agreement, whether or not legal proceedings are
commenced, then such other party shall be entitled to recover from the
defaulting party all attorneys' fees, costs and expenses incurred. If a party
commences an action against the other to enforce or interpret the terms of this
Agreement, or to obtain a declaration of rights under this Agreement, the
prevailing party shall be entitled to all attorneys' fees, costs and expenses
incurred in such action or any appeal or enforcement of such action.
15. Non-Reliance
Other than as expressly set forth in this Agreement, Xxxxxxx and
Calypte represent and acknowledge that in executing this Agreement they did not
rely upon and they have not relied upon any representation nor statement made by
any of the parties hereto or by any of their agents, representatives or
attorneys with regard to the subject matter, basis or effect of this Agreement
or otherwise.
16. Agreement Obligates, Extends and Inures
The provisions of this Agreement shall be deemed to obligate, extend
and inure to the benefit of the legal successors, assigns, transferees,
grantees, heirs, shareholders, officers and directors of each signatory party
hereto, and to those who may assume any or all of the above-described capacities
subsequent to the execution and Resignation Date of this Agreement.
17. Non-Admission of Liability
This Agreement shall not in any way be construed as an admission by
Calypte that it has acted in any manner in violation of the common law or in
violation of any federal, state or local statute or regulation nor shall it be
construed as an admission by Xxxxxxx that he has acted in any manner in
violation of the common law or in violation of any federal, state or local
statute or regulation.
18. Method of Execution
This Agreement may be executed in counterparts and each counterpart
shall be deemed a duplicate original. For purposes of execution, facsimile
signature pages shall be deemed originals.
19. Applicable Law
This Agreement is deemed to have been made and entered into in the
State of California and shall in all respects be interpreted, enforced and
governed under the laws of said State. The language of all parts of this
Agreement shall in all causes be construed as a whole, according to its fair
meaning, and not strictly for or against any of the parties.
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20. Severability
The provisions of this Agreement are severable, and should any
provision of this Agreement be declared or be determined by any arbitrator or
court to be illegal or invalid, any such provision shall be stricken, and the
validity of the remaining parts, terms or provisions shall not be affected.
21. Entire Agreement
This Agreement sets forth the entire agreement between the parties
and fully supersedes any and all prior agreements or understandings between the
parties pertaining to the same subject matter, further, this Agreement may not
be changed modified or amended except by explicit written agreement by the
parties hereto.
22. Notices
All notices under this Agreement are to be in writing and delivered
by overnight courier and are deemed effective upon receipt if to:
Company:
Calypte Biomedical Corporation,
0000 Xxxxxxx Xx., Xxxxx 000
Xxxxxxxxxx, XX 00000
Attn: Chief Executive Officer
If to Xxxxxxx:
Xxxxx X. Xxxxxxx, Esq.
0000 Xxxxxx xx xxx Xxxxx, Xxxxx 000
Xxx Xxxxxxx, XX 00000
23. Older Worker Benefits Protection Act
Xxxxxxx has been informed by the Company and acknowledges and
understands that he has been given up to twenty-one (21) days to consider the
terms of this Agreement (although he need not take the full 21 days to do so),
that he may seek advice from an attorney, and that he may revoke this Agreement
at any time within seven (7) days following his signing of it. This Agreement
will not be effective or enforceable and no payments will be made at any time
within seven (7) days following Xxxxxxx'x execution of this Agreement. The
eighth day following Xxxxxxx'x execution of this Agreement shall be the
"Effective Date." Any revocation within this period must be submitted in writing
to the Company's Chief Executive Officer, J. Xxxxxxx Xxxxxx, 0000 Xxxxxxx Xxxx,
Xxxxx 000, Xxxxxxxxxx, Xxxxxxxxxx 00000, and must state "I hereby revoke my
acceptance of the Settlement Agreement and General Release."
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XXXXXXX states that he has carefully read the foregoing Agreement,
has had the opportunity to consult with an attorney, knows and understands its
contents, and voluntarily executes this Agreement.
The parties further acknowledge that this Agreement has been entered
into without fraud, duress, undue influence or mistake and that upon the
Effective Date, that this Agreement is not subject to recission.
SIGNATURES
Date: 12/2/04 /s/ Xxxxxxx X. Xxxxxxx
---------------------- -------------------------------------
Xxxxxxx X. Xxxxxxx
Calypte Biomedical Corporation
Date: 12/3/04 /s/ J. Xxxxxxx Xxxxxx
---------------------- -------------------------------------
J. Xxxxxxx Xxxxxx
President and Chief Executive Officer
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