TRANSITION aGREEMENT

 

RECITALS

 

This Transition Agreement (the “Agreement”) is made by and between Gordon R.
Arnold (the “Executive”) and Sierra Monitor Corporation (“Sierra Monitor” or the
“Company”), together with its subsidiaries, the “Sierra Monitor Group”) (and
Executive together with Sierra Monitor, the “Parties”).

 

WHEREAS, Executive has been serving as Sierra Monitor’s Interim Chief Executive
Officer and Chairman of the Company’s Board of Directors (the “Board”);

 

WHEREAS, Executive and Sierra Monitor entered into a Change of Control and
Severance Agreement dated April 2, 2012 (the “Change of Control Agreement”);

 

WHEREAS, Executive and Sierra Monitor have entered into a proprietary
information and invention assignment agreement dated August 31, 2016 (the
“Confidentiality Agreement”);

 

WHEREAS, the Parties wish to provide for Executive’s orderly transition of his
day-to-day leadership of Sierra Monitor in connection with the hiring of new
senior leadership and wish to continue Executive’s employment as Executive
Advisor and Director through October 31, 2018 (the “Separation Date”);

 

WHEREAS, the Parties mutually desire to have the Executive remain on the Board;
and

 

WHEREAS, at the end of the Transition Period, the Parties wish to confirm the
absence of, or resolve any and all, disputes, claims, complaints, grievances,
charges, actions, petitions, and demands that Executive may have against the
Company and any of the Releasees as defined in the Supplemental Separation and
General Release Agreement in Appendix A, 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 (the “Release Agreement”).

 

NOW, THEREFORE, in consideration of the promises made herein, the Parties hereby
agree as follows:

 

COVENANTS

 

1. Consideration.

 

(a) Continued Employment. As of the date hereof, Executive will continue to
serve as Director and continue to be employed by the Company as Executive
Advisor to the Company through the Separation Date (the period between the date
hereof and the Separation Date, the “Transition Period”). During the Transition
Period, Executive will render such business and professional services in the
performance of his duties, consistent with Executive’s position within Sierra
Monitor, as may be reasonably be assigned to him from time-to-time. During the
Transition Period, Executive will perform his duties faithfully and to the best
of his ability. For the duration of the Transition Period, Executive agrees not
to actively engage in any other employment, occupation or consulting activity
for any direct or indirect remuneration without the prior approval of the Board
of Sierra Monitor. Notwithstanding anything herein to the contrary, Executive’s
employment with the Company during the Transition Period shall continue to be
at-will, provided, that in the event that Executive’s employment is terminated
by the Company without Cause (as defined in the Change of Control Agreement)
prior to the end of the Transition Period, Executive will be entitled to payment
of the Base Salary through the Separation Date, subject to Executive’s execution
of the Release Agreement within the time provided for therein.

 

 

 

 

(b) Compensation During the Transition Period. During the Transition Period,
Sierra Monitor will pay Executive as compensation for his services a base salary
at the annualized rate of $250,000 (the “Base Salary”). The Base Salary will be
paid periodically in accordance with Sierra Monitor’s normal payroll practices
and be subject to the usual, required withholding.

 

(c) Stock Options. All of Executive’s outstanding stock options or other equity
(“Options”) will continue to vest through the Transition Period in accordance
with the applicable vesting schedule(s), and the terms and conditions of the
Stock Plan and the applicable option agreement under which each such Option was
granted, subject to Section 2(d) below.

 

(d) Employee Benefits. During the Transition Period, Executive will be entitled
to participate in the employee benefit plans currently and hereafter maintained
by Sierra Monitor of general applicability to other executive officers of Sierra
Monitor. During the Transition Period, Executive also will be eligible to accrue
vacation at the same rate in which he accrues vacation as of immediately prior
to the Effective Time. Sierra Monitor reserves the right to cancel or change the
benefit plans and programs it offers to its employees at any time.

 

(e) Severance and Change of Control. During the Transition Period, Executive
will continue to be eligible for the severance and change of control benefits
set forth in the Change of Control Agreement (to the extent applicable). In
addition, during the Transition Period, Executive will be entitled to any
severance and/or change of control benefits approved by the Board of Sierra
Monitor for other Sierra Monitor’s senior executive officers generally but only
to the extent such benefits provide a benefit to Executive that is greater, in
the aggregate, than the benefit to which he otherwise would receive under the
Change of Control Agreement determined as of the time of termination.

 

(f) Expenses. The Company will reimburse Executive for reasonable travel,
entertainment or other expenses incurred by Executive in the furtherance of or
in connection with the performance of Executive’s duties hereunder during the
Transition Period, in accordance with the Company’s expense reimbursement policy
in effect from time to time.

 

2. Resignation; Member of Board of Directors. On the Separation Date, Executive
will be deemed to have resigned voluntarily from all Company positions held by
him, without any further required action by the Executive; provided however, if
the Company requests, Executive will execute any documents necessary to reflect
his resignation. Executive will continue to serve as a member of the Company’s
Board of Directors through the Transition Period and, subject to the Company’s
and Executive’s mutual determination, beyond the Transition Period if and as
approved by the Company’s stockholders.

 

3. Confidential Information. Executive shall continue to maintain the
confidentiality of all confidential and proprietary information of Sierra
Monitor and shall continue to comply with the terms and conditions of the
Confidentiality Agreement, which continues in full force and effect. Such
information includes, but is not limited to, all customer lists, prospects,
business processes, business models, equipment, records, data, notes, reports,
proposals, correspondence, specifications, drawings, blueprints, sketches,
materials, or other documents or property belonging to Sierra Monitor.

 

-2-

 

 

4. 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 Sierra Monitor or any other person or entity referred to herein.
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 Sierra Monitor or any
other person or entity referred to herein.

 

5. Arbitration. In accordance with Section 8 of the Change of Control Agreement,
any and all controversies, claims, or disputes with anyone (including Sierra
Monitor and any employee, officer, director, shareholder or benefit plan of
Sierra Monitor in their capacity as such or otherwise) arising out of, relating
to, or resulting from Executive’s employment with Sierra Monitor or the
termination of his employment with the Sierra Monitor, including any breach of
this Agreement, shall be subject to binding arbitration as set forth therein.

 

6. Authority. Sierra Monitor represents and warrants that the undersigned has
the authority to act on behalf of Sierra Monitor and to bind Sierra Monitor 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.

 

7. No Representations. Each party represents that it has had the opportunity to
consult with an attorney, and has carefully read and understands the scope and
effect of the provisions of this Agreement. Neither party has relied upon any
representations or statements made by the other Party hereto which are not
specifically set forth in this Agreement.

 

8. Severability. In the event that any provision hereof becomes or is declared
by a court of competent jurisdiction to be illegal, unenforceable or void, the
validity of the other provisions of this Agreement shall not be impaired. If any
provision of this Agreement shall be deemed invalid as to its scope, then,
notwithstanding such invalidity, such provision shall be valid to the fullest
extent permitted by law, and the parties agree that, if any court or arbitrator
makes such a determination, such court or arbitrator shall have the power to
modify the duration, scope and/or area of such provision and/or to delete
specific words and phrases by “blue penciling” and, in its reduced or blue
penciled form, to enforce such provision to the fullest extent permitted by law.

 

9. Entire Agreement. This Agreement, the Change of Control Agreement, the
Confidentiality Agreement, the Indemnification Agreement, and the agreements
relating to the Options, and the Stock Plan and Option Agreement, constitute the
entire agreement and understanding between the Parties concerning the subject
matter herein and all prior representations, understandings, and agreements
concerning the subject matter hereof have been superseded by the terms of this
Agreement.

 

-3-

 

 

10. No Waiver. The failure of any party to insist upon the performance of any of
the terms and conditions in this Agreement, or the failure to prosecute any
breach of any of the terms and conditions of this Agreement, shall not be
construed thereafter as a waiver of any such terms or conditions. This entire
Agreement shall remain in full force and effect as if no such forbearance or
failure of performance had occurred.

 

11. No Oral Modification. Any modification or amendment of this Agreement, or
additional obligation assumed by either party in connection with this Agreement,
shall be effective only if placed in writing and signed by Executive for himself
and by a member of Sierra Monitor’s Board of Directors. No provision of this
Agreement can be changed, altered, modified, or waived except by an executed
writing by the Parties.

 

12. Governing Law. This Agreement shall be construed, interpreted, governed, and
enforced in accordance with the laws of the State of California. Executive
consents to personal and exclusive jurisdiction and venue in the State of
California.

 

13. Effective Date. Executive understands that this Agreement shall be null and
void if not executed by him within seven (7) days. 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”).

 

14. Counterparts. This Agreement may be executed in counterparts, and each
counterpart 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.

 

15. Voluntary Execution of Agreement. This Agreement is executed voluntarily and
without any duress or undue influence on the part or behalf of the Parties
hereto, with the full intent of releasing all claims. The Parties acknowledge
that:

 

(a) They have read this Agreement;

 

(b) They have been represented in the preparation, negotiation, and execution of
this Agreement by legal counsel of their own choice or that they have
voluntarily declined to seek such counsel;

 

(c) They understand the terms and consequences of this Agreement and of the
releases it contains; and

 

(d) They are fully aware of the legal and binding effect of this Agreement.

 

[Signature Page Follows]

 

-4-

 

 

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

 

  SIERRA MONITOR CORPORATION       Dated: October 16, 2017 By /s/ C. Richard
Kramlich     C. Richard Kramlich     Member of the Board of Directors of    
Sierra Monitor Corporation       AGREED:             GORDON R. ARNOLD, an
individual       Dated: October 16, 2017   /s/ Gordon R. Arnold     Gordon R.
Arnold

 

-5-

 

 

APPENDIX A

 

SUPPLEMENTAL SEPARATION AND GENERAL RELEASE AGREEMENT

 

This Supplemental Separation and General Release Agreement (the “Release
Agreement”) is made by and between Sierra Monitor Corporation (the “Company”
together with its subsidiaries, the “Sierra Monitor Group”) and Gordon R. Arnold
(the “Executive”) (collectively referred to as the “Parties” or individually
referred to as a “Party”).

 

WHEREAS, Executive was employed with the Company;

 

WHEREAS, the Parties entered into a Transition Agreement that Executive signed
on (the “Transition Agreement”) which shall remain in full force and effect and
is fully incorporated herein except to the extent it is not consistent with this
Release Agreement;

 

WHEREAS, Executive’s employment with the Company terminated effective (the
“Separation Date”); and

 

WHEREAS, Executive shall be entitled to elect continued coverage pursuant to the
Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”)
within the time period prescribed pursuant to COBRA.

 

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

 

1. Consideration.

 

(a) Payment. The Company agrees to pay Executive a total of Dollars ($ ), less
applicable withholdings, in accordance with the Company’s regular payroll
practices, within ten (10) business days after the Effective Date.

 

(b) Acknowledgement. Executive acknowledges that without this Agreement,
Executive is otherwise not entitled to the consideration listed in this Section
1.

 

2. Benefits. Executive’s health insurance benefits shall cease on the last day
of the month in which the Separation Date occurs, subject to Executive’s right
to continue Executive’s 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 Separation Date.

 

3. Payment of Salary. Executive acknowledges and represents that, through the
Effective Date of this Release Agreement, the Sierra Monitor Group has paid
Executive all salary, wages, bonuses, commissions, profit-sharing, reimbursable
expenses, interest, all equity awards, including, without limitation, stock,
stock options, restricted stock and restricted stock units, outplacement costs,
fees and any and all other benefits and compensation due to Executive.

 

A-2

 

 

4. Confidentiality. The Parties acknowledge that Executive’s agreement to keep
the terms and conditions of this Release Agreement confidential was a material
factor on which all parties relied in entering into this Release Agreement.
Except as required by law, Executive hereto agrees to use his best efforts to
maintain in confidence the existence of this Release Agreement, the contents and
terms of this Release Agreement, and the consideration for this Release
Agreement (hereinafter collectively referred to as “Settlement Information”),
except that Executive may disclose the Separation Information to Executive’s
attorneys, accountants, governmental entities, and family members who have a
reasonable need to know of such Settlement Information. Executive agrees to take
every reasonable precaution to prevent disclosure of any Settlement Information
to third parties, and agrees that there will be no publicity, directly or
indirectly, concerning any Settlement Information.

 

5. Covenants/Company Property. Executive agrees to abide by and acknowledges
that he is bound by the covenants set forth in the Change of Control Agreement
and the Confidentiality Agreement, including, without limitation, the
non-solicitation and non-disparagement covenants set forth in Sections 10 and 11
of the Change of Control Agreement. Executive’s signature below constitutes
Employee’s certification under penalty of perjury that Executive has returned
all documents and other items provided to Executive by the Company (with the
exception of a copy of the employee handbook and personnel documents
specifically relating to Executive), developed or obtained by Executive in
connection with Executive’s employment with the Company, or otherwise belonging
to the Company.

 

6. Release of Claims. Executive agrees that the foregoing consideration
represents settlement in full of any and all outstanding obligations under any
applicable law owed to Executive by the Sierra Monitor Group and their current
and former officers, directors, employees, agents, investors, attorneys,
shareholders, administrators, affiliates, benefit plans, plan administrators,
insurers, trustees, divisions, related corporations 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,
under any applicable law, 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 Release Agreement, including, without
limitation:

 

(a) any and all claims relating to or arising from Executive’s employment
relationship with the Sierra Monitor Group and the termination of those
relationships;

 

(b) any and all claims relating to, or arising from, Executive’s right to
purchase, or actual purchase of shares of stock of Sierra Monitor or any member
of the Sierra Monitor Group, including, without limitation, any claims for
fraud, misrepresentation, breach of fiduciary duty, breach of duty under
applicable corporate law, and securities fraud under any applicable 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;

 

A-3

 

 

(d) any and all claims for violation of laws under any foreign jurisdiction,
including, but not limited to, the United States, 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; 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 California Family Rights Act; the California Labor Code; the
California Workers’ Compensation Act; the California Fair Employment and Housing
Act; and the Utah Antidiscrimination Act;

 

(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 Release Agreement or otherwise during
Executive’s employment with the Sierra Monitor Group; and

 

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

 

(i) 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
Release Agreement. Where applicable, 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 Sierra Monitor. 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.

 

A-4

 

7. 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
Release 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 Release Agreement; (b) he has twenty-one (21) days within which to consider
this Release Agreement; (c) he has seven (7) days following his execution of
this Release Agreement to revoke this Release Agreement; (d) this Release
Agreement shall not be effective until after the revocation period has expired;
and (e) nothing in this Release 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 Release Agreement and returns it to Sierra Monitor 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 Release Agreement. The Parties agree that changes, whether
material or immaterial, do not restart the running of the 21-day period.

 

8. California Civil Code Section 1542; Release of Unknown Claims. Executive
acknowledges that he has been advised to consult with legal counsel and is
familiar with the provisions of California Civil Code Section 1542, a statute
that otherwise prohibits the release of unknown claims, which provides as
follows:

 

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH
IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH
THE DEBTOR.

 

Executive, being aware of said section, agrees to expressly waive any rights he
may have thereunder, as well as under any other statute or common law principles
of similar effect.

 

9. Cooperation. Executive agrees to cooperate as reasonably necessary in defense
of any actual or potential obligation, claim, demand, judgment, recovery,
dispute, lawsuit, subpoena or grievance (collectively “Disputes”) initiated or
currently in progress against the Sierra Monitor Group, even if he is not named
as a party. Such cooperation shall include, without limitation, making himself
available, upon reasonable notice, to Sierra Monitor and its counsel to provide
information relating to such Disputes and appearing for depositions, trial,
settlement negotiations, or other activities in defense of the Disputes as
requested by the Sierra Monitor and/or its counsel. In addition, 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 Release Agreement. Executive agrees both to
immediately notify Sierra Monitor 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.

 

10. 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 Sierra Monitor Group or any other person or entity referred
to herein. 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 Sierra
Monitor Group or any other person or entity referred to herein.

 

A-5

 

 

11. Protected Activity Not Prohibited. Executive understands that nothing in
this Agreement shall in any way limit or prohibit Executive from engaging in any
Protected Activity. For purposes of this Agreement, “Protected Activity” shall
mean filing a charge, complaint, or report with, or otherwise communicating,
cooperating, or participating in any investigation or proceeding that may be
conducted by, any federal, state or local government agency or commission,
including the Securities and Exchange Commission, the Equal Employment
Opportunity Commission, the Occupational Safety and Health Administration, and
the National Labor Relations Board (“Government Agencies”). Executive
understands that in connection with such Protected Activity, Executive is
permitted to disclose documents or other information as permitted by law, and
without giving notice to, or receiving authorization from, the Company.
Notwithstanding the foregoing, Executive agrees to take all reasonable
precautions to prevent any unauthorized use or disclosure of any information
that may constitute Company confidential information under the Confidentiality
Agreement to any parties other than the Government Agencies. Executive further
understands that “Protected Activity” does not include the disclosure of any
Company attorney-client privileged communications. Any language in the
Confidentiality Agreement regarding Executive’s right to engage in Protected
Activity that conflicts with, or is contrary to, this paragraph is superseded by
this Agreement.

 

12. Costs. The Parties shall each bear their own costs, expert fees, attorneys’
fees and other fees incurred in connection with this Release Agreement.

 

13. Indemnification. Executive agrees to indemnify and hold harmless the Sierra
Monitor Group from and against any and all loss, costs, damages or expenses,
including, without limitation, attorneys’ fees or expenses incurred by any
member of the Sierra Monitor Group arising out of the breach of this Release
Agreement by Executive, or any liabilities incurred by the Sierra Monitor Group
arising out of obligations of Executive as set forth herein, or from any false
representation made herein by Executive, or from any action or proceeding which
may be commenced, prosecuted or threatened by Executive or for Executive’s
benefit, upon Executive’s initiative, or with Executive’s aid or approval,
contrary to the provisions of this Release Agreement, with the exception any
legal action by Executive challenging or seeking a determination in good faith
of the validity of the waiver herein under the ADEA. Executive further agrees
that in any such action or proceeding, this Release Agreement may be pled by any
member of the Sierra Monitor Group as a complete defense, or may be asserted by
way of counterclaim or cross-claim.

 

14. Arbitration. In accordance with Section 8 of the Change of Control
Agreement, any and all controversies, claims, or disputes with anyone (including
Sierra Monitor and any employee, officer, director, shareholder or benefit plan
of Sierra Monitor in their capacity as such or otherwise) arising out of,
relating to, or resulting from Executive’s employment with the Sierra Monitor
Group or the termination of his employment with the Sierra Monitor Group,
including any breach of this Agreement, shall be subject to binding arbitration
as set forth therein.

 

A-6

 

 

15. Authority. Sierra Monitor represents and warrants that the undersigned has
the authority to act on behalf of Sierra Monitor and to bind the Sierra Monitor
Group and all who may claim through it to the terms and conditions of this
Release 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 Release 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.

 

16. No Representations. Each party represents that it has had the opportunity to
consult with an attorney, and has carefully read and understands the scope and
effect of the provisions of this Release Agreement. Neither party has relied
upon any representations or statements made by the other Party hereto which are
not specifically set forth in this Release Agreement.

 

17. Severability. In the event that any provision hereof becomes or is declared
by a court of competent jurisdiction to be illegal, unenforceable or void, the
validity of the other provisions of this Release Agreement shall not be
impaired. If any provision of this Release Agreement shall be deemed invalid as
to its scope, then, notwithstanding such invalidity, such provision shall be
valid to the fullest extent permitted by law, and the parties agree that, if any
court or arbitrator makes such a determination, such court or arbitrator shall
have the power to modify the duration, scope and/or area of such provision
and/or to delete specific words and phrases by “blue penciling” and, in its
reduced or blue penciled form, to enforce such provision to the fullest extent
permitted by law.

 

18. Entire Agreement. This Release Agreement, the Change of Control Agreement,
the Confidentiality Agreement, the Indemnification Agreement, and the agreements
relating to the Options, and the Stock Plan and Option Agreement, constitute the
entire agreement and understanding between the Parties concerning the subject
matter herein and all prior representations, understandings, and agreements
concerning the subject matter of this Release Agreement have been superseded by
the terms of this Release Agreement.

 

19. No Waiver. The failure of any party to insist upon the performance of any of
the terms and conditions in this Release Agreement, or the failure to prosecute
any breach of any of the terms and conditions of this Release Agreement, shall
not be construed thereafter as a waiver of any such terms or conditions. This
entire Release Agreement shall remain in full force and effect as if no such
forbearance or failure of performance had occurred.

 

20. No Oral Modification. Any modification or amendment of this Release
Agreement, or additional obligation assumed by either party in connection with
this Release Agreement, shall be effective only if placed in writing and signed
by Executive for himself and by a member of Sierra Monitor’s Board of Directors.
No provision of this Release Agreement can be changed, altered, modified, or
waived except by an executed writing by the Parties.

 

21. Governing Law. This Release Agreement shall be construed, interpreted,
governed, and enforced in accordance with the laws of the State of California.
Executive consents to personal and exclusive jurisdiction and venue in the State
of California.

 

22. Attorneys’ Fees. In the event that any Party brings an action to enforce or
effect its rights under this Release Agreement, the prevailing party shall be
entitled to recover its costs and expenses, including the costs of mediation,
arbitration, litigation, court fees, plus reasonable attorneys’ fees, incurred
in connection with such an action.

 

23. Effective Date. Executive understands that this Release Agreement shall be
null and void if not executed by him within twenty one (21) days. Each Party has
seven (7) days after that Party signs this Release Agreement to revoke it. This
Release Agreement will become effective on the eighth (8th) day after Executive
signed this Release 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”).

 

24. Counterparts. This Release Agreement may be executed in counterparts, and
each counterpart 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.

 

25. Voluntary Execution of Agreement. This Release Agreement is executed
voluntarily and without any duress or undue influence on the part or behalf of
the Parties hereto, with the full intent of releasing all claims. The Parties
acknowledge that:

 

(a) They have read this Release Agreement;

 

(b) They have been represented in the preparation, negotiation, and execution of
this Agreement by legal counsel of their own choice or that they have
voluntarily declined to seek such counsel;

 

(c) They understand the terms and consequences of this Release Agreement and of
the releases it contains; and

 

(d) They are fully aware of the legal and binding effect of this Release
Agreement.

 

[Signature Page Follows]

 

A-7

 

 

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

 

  SIERRA MONITOR CORPORATION       Dated: _______________ By
                                                             Name:     Title:  
      AGREED:             GORDON R. ARNOLD, an individual       Dated:
_______________         Gordon R. Arnold

 

A-8