SEVERANCE AGREEMENT AND COVENANTS
1. PARTIES.
The parties to this Severance Agreement and Covenants (hereinafter
"Agreement") are ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and IPEX, INC., a California corporation
("IPEX").
1.1 ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇.
For the purposes of this Agreement, ▇▇▇▇▇▇▇▇ means ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇'▇ heirs, executors, administrators, assigns, and spouse (as
applicable).
1.2 THE COMPANY.
For purposes of this Agreement the "Company" means IPEX, and all
subsidiaries, affiliated companies and other business entities thereof, all
predecessors and successors of each, and all of each entity's officers,
shareholders, directors, employees, attorneys, agents, representatives, or
assigns, in their individual and representative capacities.
2. BACKGROUND AND PURPOSE.
▇▇▇▇▇▇▇▇ was employed by IPEX. ▇▇▇▇▇▇▇▇'▇ employment ended effective
January 18, 2006 (the "Termination Date") when he resigned as IPEX's President,
Chief Executive Officer, and Chairman of the Board of Directors. Pursuant to the
Older Workers Benefit Protection Act, ▇▇▇▇▇▇▇▇ has twenty-one (21) days (until
March 8, 2006) to consider and seven (7) days after signing to revoke this
Agreement. The parties are entering into this Agreement to define the severance
relationship and to settle fully and finally, any and all claims ▇▇▇▇▇▇▇▇ may
have against Company, whether asserted or not, including, but not limited to,
claims arising out of or related to ▇▇▇▇▇▇▇▇'▇ employment, claims for
reemployment, board membership, board observation rights, any termination or any
other claims whether asserted or not, that relate to ▇▇▇▇▇▇▇▇'▇ employment,
termination, reemployment, or application for reemployment.
3. ACKNOWLEDGEMENTS AND REPRESENTATIONS.
3.1 PAYMENT.
▇▇▇▇▇▇▇▇ acknowledges and agrees that he has been paid all Base Salary as
defined in the Employment Agreement and partial accrued vacation pay that is
owed through the Termination Date.
3.2 EMPLOYEE BENEFITS.
▇▇▇▇▇▇▇▇ acknowledges and agrees that he has received information
regarding his rights to health insurance continuation and retirement benefits.
To the extent ▇▇▇▇▇▇▇▇ has such rights, nothing in this Agreement will impair
those rights.
3.3 AGREEMENT COVENANTS.
▇▇▇▇▇▇▇▇ acknowledges and agrees that under paragraph 10 of the Employment
Agreement dated July 13, 2005 (the "Employment Agreement"), he has been and will
be, for a period of two years, bound by a covenant against revealing IPEX's
Confidential Information (as defined in the Employment Agreement). ▇▇▇▇▇▇▇▇
understands that IPEX retains the right to enforce its rights under these and
other provisions of the Employment Agreement.
4. RELEASES.
4.1 ▇▇▇▇▇▇▇▇'▇ RELEASE.
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▇▇▇▇▇▇▇▇ waives, acquits, forever discharges and hereby releases Company
from any and all claims, demands, actions, or causes of action, arising from or
related in any way to any employment of or past failure or refusal to employ
▇▇▇▇▇▇▇▇ by Company, or any other past claim (except as reserved by this
Agreement or where expressly prohibited by law) that relates in any way to
▇▇▇▇▇▇▇▇'▇ employment, employment contract, board membership, board observation
rights, any termination, compensation, benefits, reemployment or application for
employment, with the exception of any claim either party may have for
enforcement of this Agreement. This release includes any and all claims, direct
or indirect, which might otherwise be made under any applicable local, state or
federal authority, including but not limited to any claim arising under the
state or local statutes where ▇▇▇▇▇▇▇▇ was employed by Company dealing with
employment, discrimination in employment, Title VII of the Civil Rights Act of
1964, the Civil Rights Act of 1991, the Americans With Disabilities Act, the
Family and Medical Leave Act of 1993, the Equal Pay Act of 1963, Executive Order
11246, the Rehabilitation Act of 1973, the Uniformed Services Employment and
Reemployment Rights Act of 1994, the Age Discrimination in Employment Act, the
Older Workers Benefit Protection Act, the Fair Labor Standards Act, wage and
hour statutes of the state where employed, all as amended, any regulations under
such authorities, or any other applicable statutory contract, tort, or common
law theories, except that ▇▇▇▇▇▇▇▇ does not release IPEX from its obligations
under this Agreement, its contribution and indemnification obligations, if any,
or from any coverage under any policy of insurance providing indemnity and
related costs for the benefit of ▇▇▇▇▇▇▇▇. With respect to the releases
contained herein, it is acknowledged by ▇▇▇▇▇▇▇▇, that he has been informed of
the provisions of Section 1542 of the Civil Code of the State of California, and
does hereby expressly waive and relinquish all rights and benefits which he has
or may have under said Section, or any comparable law under any other
jurisdiction from the beginning of the world through the date of this Agreement.
Said section reads as follows:
"A general release does not extend to claims which the creditors 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."
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4.2 IPEX'S RELEASE
IPEX waives, acquits, forever discharges and hereby releases ▇▇▇▇▇▇▇▇ from
any and all claims, demands, actions, or causes of action, whether known or
unknown, arising against IPEX, or any other past claim (except as reserved by
this Agreement or where expressly prohibited by law) that relates in any way to
▇▇▇▇▇▇▇▇'▇ employment, employment contract, board membership, board observation
rights, any termination, compensation, benefits, reemployment or application for
employment, with the exception of any claim either party may have for
enforcement of this Agreement, except IPEX does not release ▇▇▇▇▇▇▇▇ for any
acts or omissions which involve intentional misconduct, fraud, or a knowing
violation of the law. This release includes any and all claims, direct or
indirect, which might otherwise be made under any applicable local, state or
federal authority, or any other applicable statutory contract, tort, or common
law theories, except that IPEX does not release ▇▇▇▇▇▇▇▇ from his obligations
under this Agreement, his contribution and indemnification obligations, if any,
or from any coverage under any policy of insurance providing indemnity and
related costs for the benefit of IPEX. With respect to the releases contained
herein, it is acknowledged by IPEX, that it has been informed of the provisions
of Section 1542 of the Civil Code of the State of California, and does hereby
expressly waive and relinquish all rights and benefits which it has or may have
under said Section, or any comparable law under any other jurisdiction from the
beginning of the world through the date of this Agreement. Said section reads as
follows:
"A general release does not extend to claims which the creditors 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."
4.3 NO ADMISSION OF LIABILITY.
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It is understood and agreed that the acts done and evidenced hereby and
the release granted hereunder is not an admission of liability on the part of
BECKWITH or IPEX, by whom liability has been and is expressly denied by both.
5. CONSIDERATION.
After receipt of this Severance Agreement properly and fully endorsed by
▇▇▇▇▇▇▇▇, and the expiration of the seven (7) day revocation period provided by
the Older Worker Benefit Protection Act without ▇▇▇▇▇▇▇▇'▇ revocation, IPEX will
be obligated to pay ▇▇▇▇▇▇▇▇:
a. 177,608 restricted shares of IPEX common stock and 291,666 options
to purchase IPEX common stock at a strike price of $2.71 per share
with and expiration date of February 15, 2016;
b. 16,369 restricted shares of IPEX common stock and 65,493 options to
purchase IPEX common stock at a strike price of $2.36 per share with
and expiration date of February 15, 2016, as compensation for
▇▇▇▇▇▇▇▇'▇ service as a member of the IPEX's Board of Directors;
c. 2,030 restricted shares of IPEX common stock as compensation for
accrued vacation time;
d. IPEX agrees to provide ▇▇▇▇▇▇▇▇ with six (6) months health
insurance;
e. IPEX will reimburse ▇▇▇▇▇▇▇▇ for all outstanding business expenses
accrued on behalf of the Company (such as, airfare, telephone and
office expenses).
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6. MUTUAL NONDISPARAGEMENT.
▇▇▇▇▇▇▇▇ agrees that ▇▇▇▇▇▇▇▇ will not disparage or make false statements
about Company. IPEX should report to ▇▇▇▇▇▇▇▇ any actions or statements that are
attributed to ▇▇▇▇▇▇▇▇ that IPEX believes are disparaging or false. IPEX may
take actions consistent with the provision for breach of the agreement should it
determine that ▇▇▇▇▇▇▇▇ has disparaged or made false statements about Company.
IPEX agrees that its officers and directors will not disparage or make
false statements about ▇▇▇▇▇▇▇▇. ▇▇▇▇▇▇▇▇ should report to IPEX any actions or
statements that are attributed to IPEX's officers or directors which ▇▇▇▇▇▇▇▇
believes are disparaging or false. ▇▇▇▇▇▇▇▇ may take actions consistent with the
provision for breach of this Agreement should ▇▇▇▇▇▇▇▇ determine that IPEX's
officers or directors have disparaged or made false statements about ▇▇▇▇▇▇▇▇.
7. CONFIDENTIAL, PROPRIETARY AND TRADE SECRET INFORMATION.
▇▇▇▇▇▇▇▇ acknowledges the continuing duties under the Employment Agreement
signed by ▇▇▇▇▇▇▇▇ and agrees not to use or disclose confidential, proprietary
or trade secret information learned while an employee, officer, director, and/or
consultant of IPEX or its predecessors, and covenants not to breach that duty
(except as required by law). Should ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇'▇ attorney or agents be
requested in any judicial, administrative, or other proceeding or investigation
to disclose confidential, proprietary or trade secret information ▇▇▇▇▇▇▇▇
learned while an employee, officer, director, and/or consultant of IPEX or its
predecessors, ▇▇▇▇▇▇▇▇ shall promptly notify IPEX of such request.
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8. COVENANTS.
8.1 COVENANT NOT TO PROSECUTE OR MAINTAIN ANY ACTION OR PROCEEDING.
In exchange for the consideration herein, ▇▇▇▇▇▇▇▇ covenants as to
Company, he has no claim at this time and does not plan to prosecute or
hereafter maintain or institute any action at law, suit or proceeding in equity,
administrative or any proceeding of any kind or nature whatsoever for any reason
related in any way to any claim released herein. At the time of his execution of
this Agreement, ▇▇▇▇▇▇▇▇ represents that there are no claims, complaints or
charges pending against Company in which ▇▇▇▇▇▇▇▇ is a party or complainant.
Further, ▇▇▇▇▇▇▇▇ acknowledges and agrees there are no unasserted workers'
compensation claims through the date of his execution of this Agreement.
8.2 COVENANT TO RETURN ALL COMPANY PROPERTY.
▇▇▇▇▇▇▇▇ agrees to return all property of IPEX or Company, if any, within
seven (7) days after ▇▇▇▇▇▇▇▇'▇ execution of this Agreement. For the purposes of
this Agreement, property includes, but is not limited to, credit cards, keys,
card keys, computers, computer files, all originals and copies of all documents,
cell phone, palm pilot, equipment, supplies, and any other property belonging to
IPEX or Company. ▇▇▇▇▇▇▇▇ further covenants that, since January 18, 2006,
▇▇▇▇▇▇▇▇ has no personal charges or unauthorized business charges on the credit
cards to be returned or otherwise and agrees to reimburse IPEX if ▇▇▇▇▇▇▇▇ is
mistaken.
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8.3 COOPERATION IN DEFENSE OF COMPANY; CONSULTATION.
▇▇▇▇▇▇▇▇ covenants now and in the future that ▇▇▇▇▇▇▇▇ will reasonably
cooperate with Company to the best of ▇▇▇▇▇▇▇▇'▇ ability in the defense of any
claim brought against Company of which ▇▇▇▇▇▇▇▇ has any personal knowledge
("Defense Services") at a consultation rate of $250/hour. IPEX agrees it will
reimburse ▇▇▇▇▇▇▇▇'▇ reasonable out-of-pocket expenses in providing such Defense
Services. In addition, ▇▇▇▇▇▇▇▇ agrees to reasonably provide specific operations
information to IPEX as requested in a reasonable, timely and clear manner to
allow IPEX to continue and/or complete job tasks, activities, assignments, to
continue effective relationships with business partners by responding to
reasonable inquiries as needed by telephone ("Consulting Services").
8.4 COVENANT AGAINST UNFAIR COMPETITION.
▇▇▇▇▇▇▇▇ represents and warrants that he has not, at any time during his
employment with IPEX or the Company, violated (i) the covenant of
Non-Competition contained in paragraph 11 of the Employment Agreement or (ii)
the covenant as to Business Opportunities in paragraph 15 of the Employment
Agreement. ▇▇▇▇▇▇▇▇ represents and warrants that he has not disclosed any IPEX
proprietary information to any person or entity not covered by a Non-Disclosure
Agreement .
Specifically, ▇▇▇▇▇▇▇▇ further covenants that he will not initiate
conversations with ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇
III concerning past or present business or actions concerning the Company for a
period of two years.
Additionally, ▇▇▇▇▇▇▇▇ agrees and covenants not to, for a period of two
years, violate Section 10 of the Employment Agreement, involving Confidential
Information.
8.5 RESIGNATION FROM BOARD OF DIRECTORS.
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By executing Exhibit A concurrently with this Agreement, ▇▇▇▇▇▇▇▇ hereby
tenders his resignation as a Director of IPEX effective as of the date of this
Agreement. Further, ▇▇▇▇▇▇▇▇ hereby agrees to waive any and all rights to notice
and attendance at all regular and special meetings of IPEX's Board of Directors.
9. LITIGATION OF CERTAIN DISPUTES; CLAIMS FOR IRREPARABLE HARM; VENUE.
Except as provided below, ▇▇▇▇▇▇▇▇ and IPEX, in the event of a dispute
arising under this Agreement including, but not limited to, the enforcement of
the Covenant-Not-To-Compete and non-disclosure provisions hereof, the parties
irrevocably consent to the personal jurisdiction of the State and Federal Courts
sitting in the County of San Diego, State of California. Further, the parties
agree that venue is proper in such Court and waive any claim or defense of forum
non-convenience. In any event, each party shall pay it own costs and attorneys'
fees
10. SCOPE OF AGREEMENT.
The provisions of this Agreement shall be deemed to obligate, extend to,
and inure to the benefit of the parties: Company's affiliates, successors,
predecessors, assigns, directors, officers, and employees; and each parties
insurers, transferees, grantees, legatees, agents and heirs, including those who
may assume any and all of the above-described capacities subsequent to the
execution and effective date of this Agreement.
11. OPPORTUNITY FOR ADVICE OF COUNSEL.
▇▇▇▇▇▇▇▇ acknowledges that ▇▇▇▇▇▇▇▇ has been encouraged by IPEX to seek
advice of counsel with respect to this Agreement and has had the opportunity to
do so.
12. SEVERABILITY.
Every provision of this Agreement is intended to be severable. In the
event any term or provision of this Agreement is declared to be illegal or
invalid for any reason whatsoever by an arbitrator or a court of competent
jurisdiction or by final and unappealed order of an administrative agency of
competent jurisdiction, such illegality or invalidity should not affect the
balance of the terms and provisions of this Agreement, which terms and
provisions shall remain binding and enforceable.
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13. NO WAIVER.
Failure of either party to enforce any term of this Agreement shall not
constitute a waiver of the party's right to enforce that term or any other term
of this Agreement.
14. COSTS AND ATTORNEY'S FEES.
The parties each agree to bear their own costs and attorneys' fees which
have been or may be incurred in connection with any matter herein or in
connection with the negotiation and consummation of this Agreement or any action
to enforce the provisions of this Agreement.
15. GOVERNING LAW.
The rights and obligations of the parties under this Agreement shall in
all respects be governed by the laws of the United States and the State of
California.
16. PAYMENT: REVOCATION.
▇▇▇▇▇▇▇▇ acknowledges that the Agreement provides severance pay and
benefits. As provided by the Older Workers Protection Act, ▇▇▇▇▇▇▇▇ is entitled
to have twenty-one (21) days (until February 27, 2006) to consider this
Agreement. For a period of seven (7) days from execution of this Agreement,
▇▇▇▇▇▇▇▇ may revoke this Agreement. Upon receipt of ▇▇▇▇▇▇▇▇'▇ properly-signed
Agreement and the expiration of the seven-day revocation period without
▇▇▇▇▇▇▇▇'▇ revocation, payment by IPEX as provided herein will be forwarded by
mail in a timely manner.
17. ENTIRE AGREEMENT: MODIFICATION.
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This Agreement and the Employment Agreement signed by ▇▇▇▇▇▇▇▇ contain the
entire agreement and understanding among the parties as to ▇▇▇▇▇▇▇▇'▇ separation
as an employee and director. This Agreement supersedes and replaces all other
prior negotiations and proposed agreements, written or oral as to ▇▇▇▇▇▇▇▇'▇
separation. ▇▇▇▇▇▇▇▇ and IPEX acknowledge that no other party, nor agent nor
attorney of any other party, has made any promise, representation, or warranty,
express or implied, not contained in this Agreement concerning the subject
matter of this Agreement or to induce this Agreement, and ▇▇▇▇▇▇▇▇ and IPEX
acknowledge that they have not executed this Agreement in reliance upon any such
promise, representation, or warranty not contained in this Agreement.
No modification or waiver of any of the provisions or any future
representation, promise or addition shall be binding upon the parties unless
made in writing and signed by the parties.
IN WITNESS WHEREOF, the undersigned has executed this Severance Agreement
and Convenants as of the 15th day of February, 2006.
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
STATE OF ______________ )
) ss:
County of ______________ )
Personally appeared the above name ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and acknowledged the
foregoing instrument to be ▇▇▇▇▇▇▇▇'▇ voluntary act and deed.
Before me:
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Notary Public for
----------------------
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IPEX, Inc.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇
-------------------------------------
Its: Chairman of Board
-----------------------------------
On behalf of "IPEX"
and "Company"
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Exhibit A
RESIGNATION
The undersigned, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, effective as of February 15, 2006,
hereby resigns from his positions as a Director of IPEX, Inc., a California
corporation.
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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