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 ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, an individual residing in the Commonwealth of
Pennsylvania.
Whereas there is currently an Employment Agreement between ▇▇. ▇▇▇▇▇▇▇ and
Demegen, and
Whereas Demegen no longer has sufficient resources to pay ▇▇. ▇▇▇▇▇▇▇'▇ salary,
and
Whereas Demegen owes ▇▇. ▇▇▇▇▇▇▇ $25,000 in deferred salary, and
Whereas ▇▇. ▇▇▇▇▇▇▇ has unique and valuable knowledge of Demegen's assets,
intellectual property, collaborator relationships and commercial opportunities,
and
Whereas Demegen desires ▇▇. ▇▇▇▇▇▇▇ 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 ▇▇. ▇▇▇▇▇▇▇
which Demegen does not currently have the ability to pay, and
Whereas a termination of the Employment Agreement will effectively cause ▇▇.
▇▇▇▇▇▇▇ 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 ▇▇. ▇▇▇▇▇▇▇ or in effectively causing 1,700,000
of ▇▇. ▇▇▇▇▇▇▇'▇ shares to be worthless,
The Parties hereby agree:
1. ▇▇. ▇▇▇▇▇▇▇'▇ employment will terminate without cause December 31,
2002.
2. ▇▇. ▇▇▇▇▇▇▇ 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. ▇▇. ▇▇▇▇▇▇▇'▇ deferred salary will be paid during January and February
2003.
5. ▇▇. ▇▇▇▇▇▇▇ 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, ▇▇. ▇▇▇▇▇▇▇ 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. ▇▇. ▇▇▇▇▇▇▇ 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 ▇▇. ▇▇▇▇▇▇▇ 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 ▇▇. ▇▇▇▇▇▇▇ in compliance with appropriate
regulations.
11. Demegen or ▇▇. ▇▇▇▇▇▇▇ may terminate the consulting relationship with
thirty days notice. Termination of the consulting relationship shall
not terminate ▇▇. ▇▇▇▇▇▇▇'▇ right to a success fee providing he was
substantially involved in arranging or effecting the transaction.
Agreed to:
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Demegen Board of Directors
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