Exhibit 10.1

 

SEPARATION AGREEMENT AND RELEASE

 

This Separation Agreement and Release (“Agreement”) is made by and between
Timothy Patrick Shannon (“Executive”) and Response Biomedical Corp. (the
“Company”) (collectively referred to as the “Parties” or individually referred
to as a “Party”).

 

RECITALS

 

WHEREAS, Executive was employed by the Company;

 

WHEREAS, Executive signed an Executive Employment Agreement with the Company
effective as of June 28, 2012, which was subsequently amended on September 12,
2012 and June 6, 2013 (collectively, the “Employment Agreement”);

 

WHEREAS, Executive signed an Employee Confidentiality Agreement with the Company
dated August 1, 2012 (the “Confidentiality Agreement”);

 

WHEREAS, the Company and Executive have entered into an Option Agreement dated
August 13, 2012 (the “First Option”), and an Option Agreement dated March 20,
2014 (the “Second Option”), (collectively, the “Options”) granting Executive the
option to purchase shares of the Company’s common stock subject to the terms and
conditions of the Company’s Amended and Restated 2008 Stock Option Plan and the
Option Agreements (collectively the “Stock Agreements”);

 

WHEREAS, the Company terminated Executive’s employment with the Company
effective August 1, 2014 (the “Termination Date”); and

 

WHEREAS, the Parties wish to resolve any and all disputes, claims, complaints,
grievances, charges, actions, petitions, and demands that the Executive may have
against the Company and any of the Releasees as defined below, including, but
not limited to, any and all claims arising out of or in any way related to
Executive’s employment with or separation from the Company;

 

NOW, THEREFORE, in consideration of the mutual promises made herein, the Company
and Executive hereby agree as follows:

 

COVENANTS

 

1.     Consideration. In consideration of Executive’s execution of this
Agreement and Executive’s fulfillment of all of its terms and conditions, and
provided that Executive does not revoke the Agreement under Section 6 below, the
Company agrees as follows:

 

a.     Payment. The Company agrees to make severance payments to Executive in an
amount equal to his current base salary, less applicable withholding, for a
period of eight (8) months from the first regularly scheduled payroll date
following the Effective Date.

 

b.     Reimbursement of Early Termination Fees/Penalties. The Company agrees to
reimburse Executive for any termination fees or penalties resulting from the
early termination of the Apartment Lease Agreement between Atlantic & Pacific
Property Management-Atlantic Division, Inc. and Timothy and Mia Shannon dated
June 7, 2013 (the “Lease”). Executive shall terminate the Lease as soon as
possible after the Termination Date in accordance with the Lease and any
applicable addenda.

 

c.     RPOC Rental Suite Security Deposit. Executive agrees to reimburse the
Company in the amount of $250.00 for the rental security deposit paid on behalf
of Executive as per the signed agreement dated July 25, 2013.

 

 
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d.     COBRA. The Company shall pay for Executive’s COBRA coverage for a period
of six months, beginning on October 1, 2014 and ending on March 31, 2015,
provided Executive timely elects and pays for continuation coverage pursuant to
the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended
(“COBRA”), within the time period prescribed pursuant to COBRA.

 

e.     General. Executive acknowledges that without this Agreement, he is
otherwise not entitled to the consideration listed in this Section 1.

 

2.     Stock. The Parties agree that for purposes of determining the number of
shares of the Company’s common stock that Executive is entitled to purchase from
the Company, pursuant to the exercise of outstanding options, Executive will be
considered to have vested only up to the Termination Date. Executive
acknowledges that as of the Termination Date, Executive will have vested in
20,000 options and no more. The exercise of Executive’s vested options and
shares shall continue to be governed by the terms and conditions of the
Company’s Stock Agreements.

 

3.     Benefits. Executive’s health insurance benefits shall cease on the last
day of September 2014, subject to Executive’s right to continue his health
insurance under COBRA. Executive’s participation in all benefits and incidents
of employment, including, but not limited to, vesting in stock options, and the
accrual of bonuses, vacation, and paid time off, ceased as of the Termination
Date.

 

4.     Payment of Salary and Receipt of All Benefits. Executive acknowledges and
represents that, other than the consideration set forth in this Agreement, the
Company has paid or provided all salary, wages, bonuses, accrued vacation/paid
time off, premiums, leaves, housing allowances, relocation costs, interest,
severance, outplacement costs, fees, reimbursable expenses, commissions, stock,
stock options, vesting, and any and all other benefits and compensation due to
Executive.

 

5.     Release of Claims. Executive agrees that the foregoing consideration
represents settlement in full of all outstanding obligations owed to Executive
by the Company and its current and former officers, directors, employees,
agents, investors, attorneys, shareholders, administrators, affiliates, benefit
plans, plan administrators, insurers, trustees, divisions, and subsidiaries, and
predecessor and successor corporations and assigns (collectively, the
“Releasees”). Executive, on his own behalf and on behalf of his respective
heirs, family members, executors, agents, and assigns, hereby and forever
releases the Releasees from, and agrees not to sue concerning, or in any manner
to institute, prosecute, or pursue, any claim, complaint, charge, duty,
obligation, demand, or cause of action relating to any matters of any kind,
whether presently known or unknown, suspected or unsuspected, that Executive may
possess against any of the Releasees arising from any omissions, acts, facts, or
damages that have occurred up until and including the Effective Date of this
Agreement, including, without limitation:

 

a.     any and all claims relating to or arising from Executive’s employment
relationship with the Company and the termination of that relationship;

 

b.     any and all claims relating to, or arising from, Executive’s right to
purchase, or actual purchase of shares of stock of the Company, including,
without limitation, any claims for fraud, misrepresentation, breach of fiduciary
duty, breach of duty under applicable state corporate law, and securities fraud
under any state or federal law;

 

c.     any and all claims for wrongful discharge of employment; termination in
violation of public policy; discrimination; harassment; retaliation; breach of
contract, both express and implied; breach of covenant of good faith and fair
dealing, both express and implied; promissory estoppel; negligent or intentional
infliction of emotional distress; fraud; negligent or intentional
misrepresentation; negligent or intentional interference with contract or
prospective economic advantage; unfair business practices; defamation; libel;
slander; negligence; personal injury; assault; battery; invasion of privacy;
false imprisonment; conversion; and disability benefits;

 

 
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d.     any and all claims for violation of any federal, state, or municipal
statute, including, but not limited to, Title VII of the Civil Rights Act of
1964; the Civil Rights Act of 1991; the Rehabilitation Act of 1973; the
Americans with Disabilities Act of 1990; the Equal Pay Act; the Fair Labor
Standards Act; the Fair Credit Reporting Act; the Age Discrimination in
Employment Act of 1967; the Older Workers Benefit Protection Act; the Employee
Retirement Income Security Act of 1974; the Worker Adjustment and Retraining
Notification Act; the Family and Medical Leave Act; the Sarbanes-Oxley Act of
2002; the Uniformed Services Employment and Reemployment Rights Act; Florida
Civil Human Rights Act; The Florida AIDS Act; Florida Wage Discrimination Law;
Florida Equal Pay Law; Florida Whistleblower Protection Law; Florida Wage
Payment Laws, Fla. Stat. Ann.;

 

e.     any and all claims for violation of the federal or any state
constitution;

 

f.     any and all claims arising out of any other laws and regulations relating
to employment or employment discrimination;

 

g.     any claim for any loss, cost, damage, or expense arising out of any
dispute over the nonwithholding or other tax treatment of any of the proceeds
received by Executive as a result of this Agreement; and

 

h.     any and all claims for attorneys’ fees and costs.

 

Executive agrees that the release set forth in this section shall be and remain
in effect in all respects as a complete general release as to the matters
released. This release does not extend to any obligations incurred under this
Agreement. This release does not release claims that cannot be released as a
matter of law, including, but not limited to, Executive’s right to file a charge
with or participate in a charge by the Equal Employment Opportunity Commission,
or any other local, state, or federal administrative body or government agency
that is authorized to enforce or administer laws related to employment, against
the Company (with the understanding that any such filing or participation does
not give Executive the right to recover any monetary damages against the
Company; Executive’s release of claims herein bars Executive from recovering
such monetary relief from the Company). This release does not extend to any
right Executive may have to unemployment compensation benefits or workers’
compensation benefits. Executive represents that he has made no assignment or
transfer of any right, claim, complaint, charge, duty, obligation, demand, cause
of action, or other matter waived or released by this Section.

 

6.     Acknowledgment of Waiver of Claims under ADEA. Executive acknowledges
that he is waiving and releasing any rights he may have under the Age
Discrimination in Employment Act of 1967 ("ADEA"), and that this waiver and
release is knowing and voluntary. Executive agrees that this waiver and release
does not apply to any rights or claims that may arise under the ADEA after the
Effective Date of this Agreement. Executive acknowledges that the consideration
given for this waiver and release is in addition to anything of value to which
Executive was already entitled. Executive further acknowledges that he has been
advised by this writing that: (a) he should consult with an attorney prior to
executing this Agreement; (b) he has twenty-one (21) days within which to
consider this Agreement; (c) he has seven (7) days following his execution of
this Agreement to revoke this Agreement; (d) this Agreement shall not be
effective until after the revocation period has expired; and (e) nothing in this
Agreement prevents or precludes Executive from challenging or seeking a
determination in good faith of the validity of this waiver under the ADEA, nor
does it impose any condition precedent, penalties, or costs for doing so, unless
specifically authorized by federal law. In the event Executive signs this
Agreement and returns it to the Company in less than the 21-day period
identified above, Executive hereby acknowledges that he has freely and
voluntarily chosen to waive the time period allotted for considering this
Agreement. Executive acknowledges and understands that revocation must be
accomplished by a written notification to Jeffrey L. Purvin, Chief Executive
Officer that is received prior to the Effective Date. The Parties agree that
changes, whether material or immaterial, do not restart the running of the
21-day period.

 

 
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7.     Unknown Claims. Executive acknowledges that he has been advised to
consult with legal counsel and that he is familiar with the principle that a
general release does not extend to claims that the releaser 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 releasee.
Executive, being aware of said principle, agrees to expressly waive any rights
he may have to that effect, as well as under any other statute or common law
principles of similar effect.

 

8.     No Pending or Future Lawsuits. Executive represents that he has no
lawsuits, claims, or actions pending in his name, or on behalf of any other
person or entity, against the Company or any of the other Releasees. Executive
also represents that he does not intend to bring any claims on his own behalf or
on behalf of any other person or entity against the Company or any of the other
Releasees.

 

9.     Application for Employment. Executive understands and agrees that, as a
condition of this Agreement, Executive shall not be entitled to any employment
with the Company, and Executive hereby waives any right, or alleged right, of
employment or re-employment with the Company. Executive further agrees not to
apply for employment with the Company and not otherwise pursue an independent
contractor or vendor relationship with the Company.

 

10.     Confidentiality. Executive agrees to maintain in complete confidence the
existence of this Agreement, the contents and terms of this Agreement, and the
consideration for this Agreement (hereinafter collectively referred to as
“Separation Information”). Except as required by law, Executive may disclose
Separation Information only to his immediate family members, the Court in any
proceedings to enforce the terms of this Agreement, Executive’s counsel, and
Executive’s accountant and any professional tax advisor to the extent that they
need to know the Separation Information in order to provide advice on tax
treatment or to prepare tax returns, and must prevent disclosure of any
Separation Information to all other third parties. Executive agrees that he will
not publicize, directly or indirectly, any Separation Information.

 

11.     Trade Secrets and Confidential Information/Company Property. Executive
reaffirms and agrees to observe and abide by the terms of the Confidentiality
Agreement, specifically including the provisions therein regarding nondisclosure
of the Company’s trade secrets and confidential and proprietary information.
Executive agrees that the above reaffirmation and agreement with the
Confidentiality Agreement shall constitute a new and separately enforceable
agreement to abide by the terms of the Confidentiality Agreement, entered and
effective as of the Effective Date. Executive specifically acknowledges and
agrees that any violation of the restrictive covenants in the Confidentiality
Agreement shall constitute a material breach of this Agreement. Executive’s
signature below constitutes his certification under penalty of perjury that he
has returned all documents and other items provided to Executive by the Company,
developed or obtained by Executive in connection with his employment with the
Company, or otherwise belonging to the Company, including, but not limited to,
all passwords to any software or other programs or data that Executive used in
performing services for the Company.

 

12.     Non-Competition and Non-Solicitation. Executive reaffirms and agrees to
observe and abide by the terms of Section 5 of the Employment Agreement,
specifically including the provisions therein regarding noncompetition and
nonsolicitation of Company employees. Executive agrees that the above
reaffirmation and agreement with Section 5 of the Employment Agreement shall
constitute a new and separately enforceable agreement to abide by the terms of
Section 5 of the Employment Agreement, entered and effective as of the Effective
Date. Executive specifically acknowledges and agrees that any violation of the
restrictive covenants in Section 5 of the Employment Agreement shall constitute
a material breach of this Agreement.

 

 
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13.     No Cooperation. Executive agrees that he will not knowingly encourage,
counsel, or assist any attorneys or their clients in the presentation or
prosecution of any disputes, differences, grievances, claims, charges, or
complaints by any third party against any of the Releasees, unless under a
subpoena or other court order to do so or as related directly to the ADEA waiver
in this Agreement. Executive agrees both to immediately notify the Company upon
receipt of any such subpoena or court order, and to furnish, within three (3)
business days of its receipt, a copy of such subpoena or other court order. If
approached by anyone for counsel or assistance in the presentation or
prosecution of any disputes, differences, grievances, claims, charges, or
complaints against any of the Releasees, Executive shall state no more than that
he cannot provide counsel or assistance.

 

14.     Nondisparagement. Executive agrees to refrain from any disparagement,
defamation, libel, or slander of any of the Releasees, and agrees to refrain
from any tortious interference with the contracts and relationships of any of
the Releasees. Executive shall direct any inquiries by potential future
employers to the Company’s human resources department.

 

15.     Breach. In addition to the rights provided in the “Attorneys’ Fees”
section below, Executive acknowledges and agrees that any material breach of
this Agreement, unless such breach constitutes a legal action by Executive
challenging or seeking a determination in good faith of the validity of the
waiver herein under the ADEA, or of any provision of the Confidentiality
Agreement shall entitle the Company immediately to recover and/or cease
providing the consideration provided to Executive under this Agreement and to
obtain damages, except as provided by law, provided, however, that the Company
shall not recover One Hundred Dollars ($100.00) of the consideration already
paid pursuant to this Agreement and such amount shall serve as full and complete
consideration for the promises and obligations assumed by Executive under this
Agreement and the Confidentiality Agreement.

 

16.     No Admission of Liability. Executive understands and acknowledges that
this Agreement constitutes a compromise and settlement of any and all actual or
potential disputed claims by Executive. No action taken by the Company hereto,
either previously or in connection with this Agreement, shall be deemed or
construed to be (a) an admission of the truth or falsity of any actual or
potential claims or (b) an acknowledgment or admission by the Company of any
fault or liability whatsoever to Executive or to any third party.

 

17.     Costs. The Parties shall each bear their own costs, attorneys’ fees, and
other fees incurred in connection with the preparation of this Agreement.

 

18.     ARBITRATION. THE PARTIES AGREE THAT ANY AND ALL DISPUTES ARISING OUT OF
THE TERMS OF THIS AGREEMENT, THEIR INTERPRETATION, AND ANY OF THE MATTERS HEREIN
RELEASED, SHALL BE SUBJECT TO ARBITRATION IN FLORIDA COUNTY, BEFORE THE JUDICIAL
ARBITRATION AND MEDIATION SERVICE (“JAMS”) UNDER ITS COMPREHENSIVE ARBITRATION
RULES (“JAMS RULES”) AND FLORIDA LAW. THE ARBITRATOR MAY GRANT INJUNCTIONS AND
OTHER RELIEF IN SUCH DISPUTES. THE ARBITRATOR SHALL ADMINISTER AND CONDUCT ANY
ARBITRATION IN ACCORDANCE WITH FLORIDA LAW, AND THE ARBITRATOR SHALL APPLY
SUBSTANTIVE AND PROCEDURAL FLORIDA LAW TO ANY DISPUTE OR CLAIM, WITHOUT
REFERENCE TO ANY CONFLICT-OF-LAW PROVISIONS OF ANY JURISDICTION. TO THE EXTENT
THAT THE JAMS RULES CONFLICT WITH FLORIDA LAW, FLORIDA LAW SHALL TAKE
PRECEDENCE. THE DECISION OF THE ARBITRATOR SHALL BE FINAL, CONCLUSIVE, AND
BINDING ON THE PARTIES TO THE ARBITRATION. THE PARTIES AGREE THAT THE PREVAILING
PARTY IN ANY ARBITRATION SHALL BE ENTITLED TO INJUNCTIVE RELIEF IN ANY COURT OF
COMPETENT JURISDICTION TO ENFORCE THE ARBITRATION AWARD. THE PARTIES TO THE
ARBITRATION SHALL EACH PAY HALF THE COSTS AND EXPENSES OF SUCH ARBITRATION, AND
EACH PARTY SHALL SEPARATELY PAY FOR ITS RESPECTIVE COUNSEL FEES AND EXPENSES;
PROVIDED, HOWEVER, THAT THE ARBITRATOR SHALL AWARD ATTORNEYS’ FEES AND COSTS TO
THE PREVAILING PARTY, EXCEPT AS PROHIBITED BY LAW. THE PARTIES AGREE THAT
PUNITIVE DAMAGES SHALL BE UNAVAILABLE IN ARBITRATION. THE PARTIES HEREBY AGREE
TO WAIVE THEIR RIGHT TO HAVE ANY DISPUTE BETWEEN THEM RESOLVED IN A COURT OF LAW
BY A JUDGE OR JURY. NOTWITHSTANDING THE FOREGOING, THIS SECTION WILL NOT PREVENT
EITHER PARTY FROM SEEKING INJUNCTIVE RELIEF (OR ANY OTHER PROVISIONAL REMEDY)
FROM ANY COURT HAVING JURISDICTION OVER THE PARTIES AND THE SUBJECT MATTER OF
THEIR DISPUTE RELATING TO THIS AGREEMENT AND THE AGREEMENTS INCORPORATED HEREIN
BY REFERENCE. SHOULD ANY PART OF THE ARBITRATION AGREEMENT CONTAINED IN THIS
PARAGRAPH CONFLICT WITH ANY OTHER ARBITRATION AGREEMENT BETWEEN THE PARTIES, THE
PARTIES AGREE THAT THIS ARBITRATION AGREEMENT SHALL GOVERN.

 

 
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19.     Tax Consequences. The Company makes no representations or warranties
with respect to the tax consequences of the payments and any other consideration
provided to Executive or made on his behalf under the terms of this Agreement.
Executive agrees and understands that he is responsible for payment, if any, of
local, state, and/or federal taxes on the payments and any other consideration
provided hereunder by the Company and any penalties or assessments thereon.
Executive further agrees to indemnify and hold the Company harmless from any
claims, demands, deficiencies, penalties, interest, assessments, executions,
judgments, or recoveries by any government agency against the Company for any
amounts claimed due on account of (a) Executive’s failure to pay, or Executive’s
delayed payment of, federal or state taxes, or (b) damages sustained by the
Company by reason of any such claims, including attorneys’ fees and costs.

 

20.     Authority. The Company represents and warrants that the undersigned has
the authority to act on behalf of the Company and to bind the Company and all
who may claim through it to the terms and conditions of this Agreement.
Executive represents and warrants that he has the capacity to act on his own
behalf and on behalf of all who might claim through him to bind them to the
terms and conditions of this Agreement. Each Party warrants and represents that
there are no liens or claims of lien or assignments in law or equity or
otherwise of or against any of the claims or causes of action released herein.

 

21.     No Representations. Executive represents that he has had an opportunity
to consult with an attorney, and has carefully read and understands the scope
and effect of the provisions of this Agreement. Executive has not relied upon
any representations or statements made by the Company that are not specifically
set forth in this Agreement.

 

22.     Severability. In the event that any provision or any portion of any
provision hereof or any surviving agreement made a part hereof becomes or is
declared by a court of competent jurisdiction or arbitrator to be illegal,
unenforceable, or void, this Agreement shall continue in full force and effect
without said provision or portion of provision.

 

23.     Attorneys’ Fees. Except with regard to a legal action challenging or
seeking a determination in good faith of the validity of the waiver herein under
the ADEA, in the event that either Party brings an action to enforce or effect
its rights under this Agreement, the prevailing Party shall be entitled to
recover its costs and expenses, including the costs of mediation, arbitration,
litigation, court fees, and reasonable attorneys’ fees incurred in connection
with such an action.

 

24.     Entire Agreement. This Agreement represents the entire agreement and
understanding between the Company and Executive concerning the subject matter of
this Agreement and Executive’s employment with and separation from the Company
and the events leading thereto and associated therewith, and supersedes and
replaces any and all prior agreements and understandings concerning the subject
matter of this Agreement and Executive’s relationship with the Company, with the
exception of the Confidentiality Agreement, the Stock Agreements, and Section 5
of the Employment Agreement.

 

 
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25.     No Oral Modification. This Agreement may only be amended in a writing
signed by Executive and the Company’s Chief Executive Officer.

 

26.     Governing Law. This Agreement shall be governed by the laws of the State
of Florida, without regard for choice-of-law provisions. Executive consents to
personal and exclusive jurisdiction and venue in the State of Florida.

 

27.     Effective Date. Executive understands that this Agreement shall be null
and void if not executed by him within the twenty-one (21) day period set forth
above. Each Party has seven (7) days after that Party signs this Agreement to
revoke it. This Agreement will become effective on the eighth (8th) day after
Executive signed this Agreement, so long as it has been signed by the Parties
and has not been revoked by either Party before that date (the “Effective
Date”).

 

28.     Counterparts. This Agreement may be executed in counterparts and by
facsimile, and each counterpart and facsimile shall have the same force and
effect as an original and shall constitute an effective, binding agreement on
the part of each of the undersigned.

 

29.     Voluntary Execution of Agreement. Executive understands and agrees that
he executed this Agreement voluntarily, without any duress or undue influence on
the part or behalf of the Company or any third party, with the full intent of
releasing all of his claims against the Company and any of the other Releasees.
Executive acknowledges that:

 

 

(a)

he has read this Agreement;

 

 

(b)

he has been represented in the preparation, negotiation, and execution of this
Agreement by legal counsel of his own choice or has elected not to retain legal
counsel;

 

 

(c)

he understands the terms and consequences of this Agreement and of the releases
it contains; and

 

 

(d)

he is fully aware of the legal and binding effect of this Agreement.

 

(Signature page to follow)

 

 
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IN WITNESS WHEREOF, the Parties have executed this Agreement on the respective
dates set forth below.

 

 

 

TIMOTHY PATRICK SHANNON, an individual

 

 

 

 

 

 

 

 

 

Dated: August 5, 2014

/s/ Timothy Patrick Shannon

 

 

Timothy Patrick Shannon

 

 

 

 

 

RESPONSE BIOMEDICAL CORP.

 

 

 

 

 

 

 

 

 

Dated: July 31, 2014

By:

/s/ Jeffrey L. Purvin

 

 

 

Jeffrey L. Purvin

 

 

 

Chief Executive Officer

 

 

 

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