Exhibit 10.1

 

GENERAL RELEASE AND WAIVER

 

This General Release and Waiver (“Release”) is made and entered into as of
September 28, 2015 (the “Release Date”), by and between Cesca Therapeutics Inc.,
a Delaware corporation (“Employer”), and Kenneth L. Harris (“Executive,” and
together with Employer, the “Parties”). Capitalized terms used, but not defined
herein, shall have the meaning given to such terms in that certain Executive
Employment Agreement made and entered into as of July 15, 2013, by and between
the Parties (the “Employment Agreement”). In consideration of the mutual
covenants hereinafter set forth, the Parties hereby agree as follows:

 

1.           Separation. Executive’s employment with Employer ended effective
September 28, 2015 (the “Termination Date”) as a result of Executive’s
termination of employment without Cause. In connection with such termination of
employment, Executive represents that Executive has voluntarily resigned as a
director of the Board of Directors of the Employer (the “Board”) and has further
voluntarily determined not to stand for re-election to the Board or seek
re-employment with the Employer; provided, however, that Executive shall
continue to perform services to the Employer pursuant to the terms and
conditions of the Consulting Agreement (as defined below).

 

2.           Payment and Benefits. In consideration of the promises made in this
Release, but in all cases subject to Section 4(e) and Section 6(d) below,
Employer has agreed to pay Executive the sum equal to eighteen (18) months of
Base Salary in effect as of the Termination Date, which such “Base Salary” is
equal to an annualized gross salary of $328,000.00 (or a gross monthly salary of
$27,333.33). Notwithstanding the foregoing or anything to the contrary set forth
in the Employment Agreement, the Employer and the Executive hereby agree to the
following additional benefits in consideration of the promises made in this
Release:

 

(a)     If, on or before December 14, 2015, the Employer obtains both the CIRM
Grant (as defined below) and closes a Qualified Financing (as defined below),
then the Employer shall make a one-time cash payment to Executive equal to the
sum of three months of Base Salary otherwise payable to Executive pursuant to
this Section 2 (the “Accelerated Payment”). The Accelerated Payment provided for
herein shall be deemed an advancement on a dollar for dollar value of the
remaining final chronological payments due and payable to Executive pursuant to
Section 2, and once paid to the Executive, shall reduce the total amount of
remaining payments due and payable to Executive by the dollar amount accelerated
and payable to Executive pursuant to Section 2. For purposes of this Section
2(a), the term “CIRM Grant” shall mean the approval from California Institute
for Regenerative Medicine of a grant in the amount equal to or greater than $10
million to the Employer, and the term “Qualified Financing” shall mean the
consummation, at any time after the date hereof, of a sale of debt or equity
securities of the Employer primarily for bona fide capital raising purposes in a
single transaction or series of related transactions that results in gross
proceeds to the Employer of at least $9.5 million. For the avoidance of doubt,
the consummation of the Second Closing (as defined in the Securities Purchase
Agreement) pursuant to that certain Securities Purchase Agreement dated August
31, 2015 (the “Securities Purchase Agreement”) by and among the Employer and
Purchasers (as defined in the Securities Purchase Agreement) shall be deemed to
constitute a Qualified Financing. However, it is expressly understood that a
failure of Employer to obtain the CIRM Grant and the Qualified Financing does
not reduce Employer’s obligations under this Section 2.

 

 
 

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(b)     Concurrently with the execution and delivery of this Release, Executive
and Employer shall enter into a part-time consulting agreement, in substantially
the form attached hereto as Exhibit A (the “Consulting Agreement”).

 

(c)     Concurrently with the approval of this Release by the Board as of the
date hereof, the Board has approved as of the date hereof, and the Employer
shall grant to Executive, an option to purchase 270,000 shares (the “Shares”) of
the Employer’s common stock (“Common Stock”), at a price per share equal to the
closing price of a share of the Employer’s Common Stock on the Nasdaq Stock
Market as of the date hereof. 15,000 Shares subject to the option shall vest and
become exercisable on each month following the date hereof over the 18 month
period measured from the date hereof, subject to Executive’s continuous service
and/or availability to the Employer pursuant to the terms of the Consulting
Agreement. For purposes of this Section 2(c), it is understood by both the
Executive and Employer that the consulting support and Consulting Agreement is
considered as a significant severance element to the Executive executing this
Release. The option shall be exercisable only for Shares that have vested in
accordance with the preceding described vesting schedule. This option grant
shall be subject to the terms and conditions of the Employer’s Amended and
Restated 2006 Equity Incentive Plan, and the other agreements thereunder
evidencing the option granted (the “Option Grant Documentation”). Upon execution
of the Option Grant Documentation, the Option Grant Documentation shall govern
the terms and conditions of the option and otherwise supersede the terms and
conditions of this Section 2(c).

 

The amount of Base Salary continuation payments to be paid to Executive pursuant
to this Section 2 shall be paid commencing on the first Employer payroll date
that occurs on or following the Revocation End Date (as defined below), with
such amount to be paid in thirty-six (36) substantially equal bi-weekly
installments in accordance with Employer’s payroll dates, with each successive
payment being due on the next by-weekly payroll date following the first
installment; provided, however, that no payments or Benefits shall be owed or
payable to Executive under this Section 2 unless and until the ADEA release
provided for in Section 4 below has not been revoked on or prior to the
Revocation End Date and such release remains in effect thereafter pursuant to
the terms of Section 4(e) below.

 

For the avoidance of doubt, Executive hereby acknowledges and agrees that all of
the benefits described in this Section 2 (the “Benefits”), and the timing of
payments to be made to Executive in connection therewith, replace and supersede
in their entirety any and all obligations of the Employer, and all payments and
other consideration payable to Executive (other than earned and unpaid salary,
earned and unpaid PTO, and properly reimbursable expenses as of the Termination
Date), under the Employment Agreement in connection with Executive’s termination
of employment, including, without limitation, any and all payment obligations
under Section 6 (other than earned and unpaid salary, earned and unpaid PTO, and
reimbursable expenses as of the Termination Date) thereof. Executive understands
and Employer acknowledges that all of the Benefits described in this Section 2
constitute benefits in excess of those to which both Executive and Employer
would be entitled without entering into this Release.

 

 
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3.           Release of Claims and Waiver of Rights.

 

(a)     Executive, on Executive’s own behalf and that of Executive’s spouse,
heirs, executors or administrators, assigns, insurers, attorneys and other
persons or entities acting or purporting to act on Executive’s behalf (the
“Executive’s Parties”), hereby irrevocably and unconditionally release, acquit
and forever discharge Employer, its affiliates, subsidiaries, directors,
officers, employees, shareholders, partners, agents, representatives,
predecessors, successors, assigns, insurers, attorneys, benefit plans sponsored
by Employer and said plans’ fiduciaries, agents and trustees (the “Released
Parties”), from any and all actions, cause of action, suits, claims,
obligations, liabilities, debts, demands, contentions, damages, judgments,
levies and executions of any kind, whether in law or in equity, known or
unknown, which the Executive’s Parties have, have had, or may in the future
claim to have against the Released Parties by reason of, arising out of, related
to, or resulting from Executive’s employment with Employer or the termination
thereof. This release specifically includes without limitation any claims
arising in tort or contract, any claim based on wrongful discharge, any claim
based on breach of contract, any claim arising under federal, state or local law
prohibiting race, sex, age, religion, national origin, handicap, disability or
other forms of discrimination, any claim arising under federal, state or local
law concerning employment practices, and any claim relating to compensation or
benefits. This specifically includes, without limitation, any claim which the
Executive has or has had under Title VII of the Civil Rights Act of 1964, as
amended, the Age Discrimination in Employment Act, as amended, the Americans
with Disabilities Act, as amended, and the Employee Retirement Income Security
Act of 1974, as amended. It is understood and agreed that the waiver of benefits
and claims contained in this section does not include: (i) a waiver of the right
to payment of any vested, nonforfeitable benefits to which the Executive or a
beneficiary of the Executive may be entitled under the terms and provisions of
any employee benefit plan of Employer which have accrued as of the separation
date; (ii) a waiver of the right to benefits and payment of consideration to
which Executive may be entitled under the Employment Agreement or any of the
agreements contemplated thereby (including indemnification agreements and the
stock option agreements); and (iii) a waiver of any rights to indemnification
under the Certificate of Incorporation or Bylaws of the Employer or an
subsidiary of Employer or under applicable law and regulation. Executive
acknowledges that he is only entitled to the severance benefits and compensation
set forth in the Employment Agreement, and that all other claims for any other
benefits or compensation are hereby waived, except those expressly stated in the
preceding sentence.

 

Nothing in this Release shall be deemed to require the waiver or release of any
claim that may not be released or waived under applicable federal or state law.

 

(b)     Executive hereby acknowledges that he understands that under this
Release he is releasing any known or unknown claims he may have arising out of,
related to, or resulting from Executive’s employment with Employer or the
termination thereof (the “Released Claims”). He therefore acknowledges that he
has read and understands Section 1542 of the California Civil Code, which reads
as follows:

 

“A general release does not extend to claims which the creditor 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.”

 

Executive expressly waives and relinquishes all rights and benefits under that
section and any law of any jurisdiction of similar effect with respect to the
Released Claims.

 

 
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4.          Acknowledgment of Waiver of Claims under ADEA. Executive
acknowledges that Executive is waiving and releasing any rights Executive may
have under the Age Discrimination in Employment Act of 1967 (“ADEA”) and that
this waiver and release is knowing and voluntary. Executive acknowledges that
the consideration given for this Release is in addition to anything of value to
which Executive already is entitled. Executive further acknowledges that
Executive has been advised by this writing that:

 

(a)     the release and waiver granted herein does not relate to claims under
the ADEA which may arise after this Release is executed;

 

(b)     Executive should consult with an attorney prior to executing this
Release;

 

(c)     Executive has at least twenty-one (21) days within which to consider
this Release as it relates to claims under the ADEA, although Executive may
accept the terms of this Release at any time within those 21 days and earlier
execute this Release;

 

(d)     Executive has seven (7) days following the execution of this Release to
revoke this Release as it relates to claims under the ADEA; and

 

(e)     This Release will not be effective as it relates to claims under the
ADEA until the revocation period has expired, which will be the eighth day after
this Release is executed by both Parties (the, “Revocation End Date”), and the
severance payments and other Benefits described in this Release will not be paid
until this Release has become effective and all statutory revocation periods
have expired.

 

5.          Non-Disparagement. The parties agree to treat each other
respectfully and professionally and not disparage the other party, and the other
party’s officers, directors, employees, shareholders and agents, in any manner
likely to be harmful to them or their business, business reputation or personal
reputation; provided that both the Executive and Employer will respond
accurately and fully to any question, inquiry or request for information when
required by the legal process.

 

6.           Voting Agreement.

 

(a)     The rights and duties that are the subject of this Section 6 shall apply
to only those shares of Employer’s capital stock held (whether directly or
indirectly or through one or more intermediaries) by the Executive or over which
the Executive has beneficial ownership or control. This Section 6 shall not be
applicable to any shares of Employer’s capital stock no longer held (whether
directly or indirectly or through one or more intermediaries), beneficially
owned or controlled by the Executive. Upon compliance with applicable securities
laws, Executive shall be free and without restriction of any nature to sell
Executive’s shares of Employer’s capital stock free and clear of this Section 6
during the 18 months following the date hereof. No bona fide purchaser
(excluding any purchaser or transferee deemed to be an “affiliate” of the
Executive as defined in Rule 12b-2 promulgated under the Securities Exchange Act
of 1934, as amended, or to any purchaser or transferee in which Executive has
any direct or indirect ownership interest) of any such shares of Employer’s
capital stock shall be subject in any manner to the restrictions, requirements
or duties incumbent on Executive pursuant to this Section 6 during said 18-month
period.

 

 
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(b)     For a period beginning on the date hereof and ending on the date that is
18 months from the date hereof, the Executive agrees, with respect to matters
related to nominating directors to serve on the Board and electing directors
nominated by the Board before the stockholders of the Employer, whether at a
meeting of the stockholders of the Employer or any adjournment thereof, or
pursuant to a requested written consent of holders of the Employer’s capital
stock, to vote, or cause to be voted, all shares of the Employer’s capital stock
held by the Executive (whether directly or indirectly or through one or more
intermediaries) or over which the Executive has beneficial ownership or control
in the manner recommended by the Board specific to election of directors and
shall refrain from taking, and shall not take, any action to nominate any person
or group of persons to serve as directors on the Board. Executive hereto agrees
to execute and deliver all such instruments and documents and do all such other
acts and things as may be necessary to more fully effectuate the agreement set
forth in this Section 6(a).

 

(c)     It is agreed and understood that monetary damages would not adequately
compensate Employer for the breach of Section 6(a) by Executive, that the
agreement set forth in Section 6(a) shall be specifically enforceable, and that
any breach or threatened breach of Section 6(a) shall be the proper subject of a
temporary or permanent injunction or restraining order. Further, Executive
hereto waives any claim or defense that there is an adequate remedy at law for
such breach or threatened breach.

 

(d)     Notwithstanding Section 6(c) and in addition to the remedy provided for
therein, any and all Benefits payable pursuant to Section 2 above shall
immediately and irrevocably be terminated and cancelled immediately upon any
breach by of Section 6(a) by Executive, and no Benefits shall thereafter be paid
or payable to Executive. The termination of Benefits pursuant to this Section
6(d) shall not impair or diminish in any way the release provided for in Section
3.

 

7.          No Admissions. Employer denies that it or any of its employees or
agents have taken any improper action against Executive. This Release shall not
be admissible in any proceeding as evidence of improper action by Employer or
any of its employees or agents.

 

8.          Non-Waiver. Employer’s waiver of a breach of this Release by
Executive shall not be construed or operate as a waiver of any subsequent breach
by Executive of the same or of any other provision of this Release.

 

9.          Restrictive Covenants. Executive understands that the covenants in
Sections 7, 9 and 10 of the Employment Agreement survive the termination of his
employment with Employer.

 

10.       Amendment, Waiver. No amendment or variation of the terms of this
Release shall be valid unless made in writing and signed by Executive and
Employer. A waiver of any term or condition of this Agreement shall not be
construed as a general waiver by Employer. Failure of either Employer or
Executive to enforce any provision or provisions of this Agreement shall not
waive any enforcement of any continuing breach of the same provision or
provisions or any breach of any provision or provisions of this Agreement.

 

11.       Assignment. It is understood that this Release, and specifically
Executive’s rights and obligations hereunder, shall survive to the Executive’s
beneficiary on death.

 

 
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12.       Construction. The terms set forth in Section 12 and Sections 16.1,
16.2, 16.3, and 16.8 of the Employment Agreement shall apply to this Release,
provided that the word “Release” shall take the place of the word “Agreement” in
such Sections, where applicable.

 

[Remainder of page left blank intentionally. Signature page follows.]

 

 

 

 

 

 
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IN WITNESS WHEREOF, the Parties have executed this Release as of dates set forth
below their respective signatures below.

 

EMPLOYER:

EXECUTIVE:

 

 

CESCA THERAPEUTICS, INC.

 

 

 

 

 

By: /s/ Robin Stracey                                                      
     

/s/ Kenneth L. Harris                                                        

 

Kenneth L. Harris

 

 

Name: Robin Stracey                                                             
      Title: CEO                                                  
                                    Date:
9/28/15                                                                      
     Date:
9/28/15                                                                      

          

 

 

[Signature Page to General Release and Waiver]