EXHIBIT 10.9
EX-10.9
TERMINATION AND CONSULTING AGREEMENT
This Termination and Consulting Agreement ("Agreement") is made this 20th day of
December, 2002, by and between Demegen Inc., a Colorado corporation ("Demegen"),
and Xxxxxxx X. Xxxxxxx, an individual residing in the Commonwealth of
Pennsylvania.
Whereas there is currently an Employment Agreement between Xx. Xxxxxxx and
Demegen, and
Whereas Demegen no longer has sufficient resources to pay Xx. Xxxxxxx'x salary,
and
Whereas Demegen owes Xx. Xxxxxxx $25,000 in deferred salary, and
Whereas Xx. Xxxxxxx has unique and valuable knowledge of Demegen's assets,
intellectual property, collaborator relationships and commercial opportunities,
and
Whereas Demegen desires Xx. Xxxxxxx to continue his efforts to sell and/or
license Demegen's assets and intellectual property and to assist in the affairs
of the company as may be necessary, and
Whereas the Employment Agreement provides for severance payments to Xx. Xxxxxxx
which Demegen does not currently have the ability to pay, and
Whereas a termination of the Employment Agreement will effectively cause Xx.
Xxxxxxx to lose 600,000 stock options, and
Whereas regulatory changes have significantly restricted a company from
modifying loans to certain employees and that this event may result in an
unintended or untimely cost to Xx. Xxxxxxx or in effectively causing 1,700,000
of Xx. Xxxxxxx'x shares to be worthless,
The Parties hereby agree:
1. Xx. Xxxxxxx'x employment will terminate without cause December 31,
2002.
2. Xx. Xxxxxxx is due ninety thousand dollars ($90,000) in Severance
Payment.
3. The Severance Payment will be deferred until Demegen is sold or
dissolved or otherwise has the ability to pay.
4. Xx. Xxxxxxx'x deferred salary will be paid during January and February
2003.
5. Xx. Xxxxxxx will consult as necessary to manage or conclude the affairs
of Demegen at the rate of $125 per hour, plus normal expenses incurred
in furthering the affairs of the company, plus medical insurance unless
provided by another employer. Consulting time for January 2003 will
become payable in March 2003, with succeeding months following
accordingly. The number of consulting hours are subject to prior
approval by the Board of Directors.
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6. Upon sale of or merger of Demegen into another company or a license of
substantially all of Demegen's assets, Xx. Xxxxxxx will receive the
following success fee based on the value of the transaction: 2% of the
first $2 million; 3% of the next $2 million; 4% of amounts over $4
million.
7. Xx. Xxxxxxx will disclose to Demegen any business relationships that
may represent a conflict of interest with the affairs of Demegen.
8. The 1997 Debt Resolution Agreement between Xx. Xxxxxxx and Demegen
continues to be in effect.
9. The Parties agree that any disputes related to this Agreement will be
resolved by mediation in Pittsburgh, Pennsylvania.
10. The Parties agree to review at a later time and seek resolution to the
issues regarding the loan to Xx. Xxxxxxx in compliance with appropriate
regulations.
11. Demegen or Xx. Xxxxxxx may terminate the consulting relationship with
thirty days notice. Termination of the consulting relationship shall
not terminate Xx. Xxxxxxx'x right to a success fee providing he was
substantially involved in arranging or effecting the transaction.
Agreed to:
/s/ Xxxxxxx X. Xxxxxxx
--------------------------
Xxxxxxx X. Xxxxxxx
/s/ Xxxxxx X. Xxxxxx
--------------------------
Demegen Board of Directors
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