Exhibit 10.205

 

Employment Agreement

 

This Employment Agreement (“Agreement”) is made and entered into as of January
1, 2013 (the “Effective Date”) by and between Calypte Biomedical Corporation, a
Delaware corporation (the “Company”), and Kartlos Edilashvili (“Employee”).

 

In consideration of the mutual promises made herein, the parties hereto agree as
follows:

 

1.     Position and Duties.

 

1.1     Position. The Company agrees to employ Employee and Employee agrees to
accept employment by the Company and to serve in an executive capacity as Chief
Financial Officer of the Company (“CFO”), reporting to the Chief Executive
Officer of the Company (the “CEO”). The powers, duties and responsibilities of
Employee as CFO include those duties that are the usual and customary powers,
duties and responsibilities of such office and such other and further duties
appropriate to such position as may from time to time be assigned to Employee by
the CEO. Employee also agrees to serve in an executive capacity with any
subsidiary of the Company as may be identified by the CEO.

 

1.2     Duties. While employed hereunder, Employee will devote substantially all
reasonable and necessary time, efforts, skills and attention for the benefit of
and with his primary attention to the affairs of the Company in order that he
may faithfully perform his duties and obligations. The preceding sentence will
not, however, be deemed to restrict Employee from attending to matters or
engaging in activities not directly related to the business of the Company, and
provided that (i) such activities or matters are reasonable in scope and time
commitment and not otherwise in violation of this Agreement, and (ii) Employee
will not become a director of any corporation or other entity (excluding
charitable or other non-profit organizations) without prior written disclosure
to, and consent of, the Company.

 

1.3     Place of Employment. As of the Effective Date, Employee shall be based
at Dubai, UAE.

 

1.4     Fiduciary Duties. Employee agrees and acknowledges that during the term
of this Agreement, he owes a fiduciary duty of loyalty, fidelity and allegiance
to act at all times in the best interests of the Company and to do no act
knowingly which would injure the Company’s business, its interests or its
reputation.

 

2.     Compensation and Benefits.

 

2.1     Base Salary.

 

(a)     Employee’s base salary (“Base Salary”) shall be US$50,000 per year,
provided that, after the Company achieves profitability, Employee’s Base Salary
shall be US$100,000 per year. Base Salary shall be paid in installments in
accordance with the Company’s normal payroll practices, but no less frequently
than monthly (subject to Section 2.1(b)). Base Salary shall be subject to
periodic review and adjustment by the Board of Directors of the Company (the
“Board”), subject to Sections 4.2(c) and 4.3.

 

(b)     The Company shall be deemed to have achieved profitability after it has
had three consecutive quarters of positive net income, excluding extraordinary
or nonrecurring events, as determined by the Board in good faith in accordance
with U.S. generally accepted accounting principles. For purposes of this Section
2.1, net income shall be based on the consolidated financial results of the
Company and all entities that control, are controlled by or are under common
control with the Company. Upon determination that the Company has achieved
profitability, Employee shall be entitled to a lump sum payment equal to the
aggregate Base Salary that he would have been paid had his Base Salary been
adjusted on the day after the end of the first profitable quarter described in
this Section 2.1(b).

 

 
 

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2.2     Bonus. After the end of each fiscal year during the term of this
Agreement, Employee will be eligible for consideration for a discretionary bonus
under such incentive compensation plan as the Board may establish for officers
and key employees of the Company.

 

2.3     Vacation. Employee will be entitled to paid vacation of not less than
four (4) weeks each calendar year, pro rated for partial years. Employee may
take vacation at such time and for such periods as may be mutually agreed upon
between the Company and Employee.

 

2.4     Business Expenses. Employee will be reimbursed in accordance with the
Company’s normal expense reimbursement policy for all of the actual and
reasonable costs and expenses incurred by him in the performance of his services
and duties hereunder, including, but not limited to, travel and entertainment
expenses. Employee will furnish the Company with all invoices and vouchers
reflecting amounts for which Employee seeks the Company’s reimbursement.

 

2.5     Benefit Plans. Employee will be entitled to participate in all insurance
and retirement plans and such other benefit plans or programs as may be in
effect from time to time for the benefit of officers and key employees of the
Company, to the extent consistent with applicable law.

 

2.6     Relocation. In the event Employee is required to relocate from his place
of employment, the Company shall pay to Employee a relocation allowance in an
amount to be mutually agreed upon.

 

2.7     Payroll Deductions. All Base Salary, bonus and other payments made by
Company to Employee pursuant to this Agreement will be subject to such payroll
and withholding deductions as may be required by law and other deductions
applied generally to employees of the Company for insurance and other employee
benefit plans in which Employee participates.

 

3.     Intellectual Property.

 

3.1     Restrictions on Disclosure and Use. Employee recognizes and acknowledges
that the Company’s trade secrets and proprietary information and processes are
valuable, special and unique assets of the Company’s business, access to and
knowledge of which are essential to the performance of Employee’s duties
hereunder. Employee will not, during or after the term of his employment by the
Company, disclose such secrets, information or processes to any person, firm,
corporation, association or other entity for any reason or purpose whatsoever,
nor shall Employee make use of any such property for his own purposes or for the
benefit of any person, firm, corporation or other entity (except the Company)
under any circumstances during or after the term of his employment.

 

3.2     Company Property. Employee agrees to hold as the Company’s property, all
memoranda, books, papers, letters, formulas and other data, and all copies
thereof and therefrom, in any way relating to the Company’s business and
affairs, whether made by him or otherwise coming into his possession, and on
termination of his employment, or on demand of the Company, at any time, to
deliver the same to the Company.

 

 
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3.3     Proprietary Information and Inventions Agreement. Employee shall, at the
request of the Company, execute a standard Proprietary Information and
Inventions Agreement.

 

4.     Termination of Employment.

 

4.1     Right to Terminate. Either the Company or Employee may terminate
Employee’s employment with the Company at any time at their discretion, subject
to the provisions of this Section 5.

 

4.2     Definitions. As used in this Agreement:

 

(a)     “Cause” shall mean:

 

(i)     Executive’s willful failure to perform his duties (other than any such
failure resulting from incapacity due to physical or mental illness);

 

(ii)     Executive’s willful failure to comply with any valid and legal
directive of the Board;

 

(iii)     Executive’s willful engagement in dishonesty, illegal conduct or gross
misconduct, which is, in each case, materially injurious to the Company or its
affiliates;

 

(iv)     Executive’s conviction of or plea of guilty or nolo contendere to a
crime that constitutes a felony (or its equivalent) or a crime that constitutes
a misdemeanor involving moral turpitude;

 

(v)     Executive’s material breach of any material obligation under this
Agreement or any other written agreement between Employee and the Company; or

 

(vi)     any material failure by Employee to comply with the Company’s written
policies or rules, as they may be in effect from time to time during the term of
Employee’s employment with the Company.

 

(b)     “Change in Control” shall mean:

 

(i)     any merger after which, as a result of the merger, the persons who were
the beneficial owners of the Company’s voting securities immediately prior to
the merger do not continue to beneficially own at least a majority of the
Company’s voting securities in substantially the same proportions as immediately
prior to the merger;

 

(ii)     a sale or exclusive license of all or substantially all of the
Company’s assets to a third party that is not affiliated with the Company; or

 

(iii)     any acquisition of voting securities of the Company by a person or
entity or by a group of persons and/or entities acting in concert if, as a
result of such acquisition, such person, entity or group has the right to elect
a majority of the members of the Board.

 

(c)     “Good Reason” shall mean:

 

(i)     a material reduction in Employee’s Base Salary other than a general
reduction in Base Salary that affects all similarly situated executives in
substantially the same proportions;

 

 
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(ii)     any material breach by the Company of any material provision of this
Agreement or any material provision of any other agreement between Employee and
the Company;

 

(iii)     a material, adverse change in Employee’s title, authority, duties or
responsibilities (other than temporarily while Employee is physically or
mentally incapacitated or as required by applicable law); or

 

(iv)     a relocation of Employee’s principal place of employment by more than
100 miles, except for required travel on Company business to an extent
substantially consistent with Employee’s business travel obligations as of the
date of relocation.

 

(d)     “Termination Date” shall mean the date of termination of Employee’s
employment with the Company.

 

4.3     Involuntary Termination without Cause or Voluntary Termination for Good
Reason. Employee’s employment hereunder may be terminated by the Company without
Cause or by Employee for Good Reason. In the event of such termination, Employee
shall be entitled to receive:

 

(a)     any accrued but unpaid Base Salary and accrued but unused vacation;

 

(b)     any earned but unpaid bonus;

 

(c)     reimbursement for unreimbursed business expenses properly incurred by
Employee;

 

(d)     such employee benefits (including equity compensation), if any, as to
which Employee may be entitled under the Company’s employee benefit plans as of
the termination date; and

 

(e)     continued Base Salary for six months following the Termination Date at a
rate based on the highest annual Base Salary in effect during the 12 months
prior to the Termination Date, subject to (i) Employee’s execution of a release
of claims in favor of the Company, its affiliates and their respective officers
and directors in such form as the Company may reasonably request and (ii)
Employee’s compliance with Sections 3, 5 and 6 of this Agreement, provided that
the Company may at any time elect to pay the balance of the severance payments
in the form of a lump sum cash payment.

 

Notwithstanding the foregoing, in the event Employee’s employment is terminated
before his Base Salary has been increased to at least US$100,000, and such
termination occurs (i) within twelve (12) months following a Change in Control,
or (ii) at any time following the Board’s approval of a Change in Control if
such Change in Control is subsequently consummated, then, for purposes of
Section 4.3(e), Base Salary shall be deemed to be US$100,000. Upon the
consummation of a Change in Control described in the foregoing clause (ii), the
Company shall make a lump sum payment to Employee in an amount equal to the
difference between the amounts actually paid to him prior to such consummation
and the amounts that are owed to him based on the foregoing method of
determining Base Salary.

 

4.4     Involuntary Termination for Cause or Voluntary Termination without Good
Reason. In the event the Company terminates Employee’s employment for Cause or
Employee voluntarily terminates his employment without Good Reason, Employee
shall be entitled to receive:

 

(a)     any accrued but unpaid Base Salary and accrued but unused vacation;

 

 
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(b)     any earned but unpaid bonus (other than in the case of termination for
Cause);

 

(c)     reimbursement for unreimbursed business expenses properly incurred by
Employee; and

 

(d)     such employee benefits (including equity compensation), if any, as to
which Employee may be entitled under the Company’s employee benefit plans as of
the termination date.

 

4.5     Acceleration of Vesting. Each stock option grant or other equity
compensation award that is subject to vesting shall, to the extent permitted
under applicable law, provide for six months’ acceleration of vesting in the
event Employee’s employment is terminated by the Company without Cause or by
Employee for Good Reason, without regard to any initial vesting “cliff.”

 

5.     Non-Competition; Non-Solicitation.

 

5.1     Covenant Not to Compete. During the period of Employee’s employment with
the Company and for a period of twelve (12) months thereafter, in the case of
the termination of employment for Cause, or six (6) months thereafter in all
other events, Employee shall not, without the prior written consent of the
Company, engage in the business of development and manufacture of diagnostic
tests for HIV (the “Business”), directly or indirectly, anywhere in the world,
other than for the account of the Company, its subsidiaries and their respective
affiliates. Nothing herein shall prohibit Employee from purchasing or owning
less than five percent (5%) of the publicly traded securities of any
corporation, provided that such ownership represents a passive investment and
that Employee is not a controlling person of, or a member of a group that
controls, such corporation.

 

5.2     Non-Solicitation of Employees. Employee shall not, during the twelve
(12) month period following the termination of Employee’s employment with the
Company, directly or indirectly solicit, hire, recruit, attempt to hire or
recruit, or induce the termination of employment of any employee of the Company.

 

5.3     Non-Solicitation of Customers.

 

(a)     Employee understands and acknowledges that, because of Employee’s
experience with and relationship to the Company, he will have access to and
learn about much or all of the Company’s customer information. “Customer
Information” includes, but is not limited to, names, phone numbers, addresses,
e-mail addresses, order history, order preferences, chain of command, pricing
information and other information identifying facts and circumstances specific
to the customer Employee understands and acknowledges that loss of this customer
relationship and/or goodwill will cause significant and irreparable harm.

 

(b)     Employee shall not, during the twelve (12) month period following the
termination of Employee’s employment with the Company, directly or indirectly
solicit, contact, attempt to contact or meet with the Company’s current, former
or prospective customers for purposes of offering or accepting goods or services
similar to or competitive with those offered by the Company.

 

6.     Nondisparagement. Employee shall not at any time make, publish or
communicate to any person or entity or in any public forum any defamatory or
disparaging remarks, comments or statements concerning the Company or its
businesses, or any of its employees, officers, or existing or prospective
customers, suppliers, investors and other associated third parties.

 

 
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7.     Remedies. In the event of a breach or threatened breach by Employee of
Section 3, 5 or 6 of this Agreement, Employee hereby consents and agrees that
the Company shall be entitled to seek, in addition to other available remedies,
a temporary or permanent injunction or other equitable relief against such
breach or threatened breach from any court of competent jurisdiction, without
the necessity of showing any actual damages or that money damages would not
afford an adequate remedy, and without the necessity of posting any bond or
other security. The aforementioned equitable relief shall be in addition to, not
in lieu of, legal remedies, monetary damages or other available forms of relief.

 

8.     Miscellaneous.

 

8.1     Governing Law. This Agreement will be governed by and construed in
accordance with the laws of the State of Oregon, U.S.A., as applied to contracts
made and to be performed entirely within Oregon.

 

8.2     Severability. If any portion of this Agreement shall be adjudicated to
be invalid or unenforceable, this Agreement shall be deemed amended to delete
therefrom the portion thus adjudicated to be invalid or unenforceable, such
deletion to apply only with respect to the operation of that provision in the
particular jurisdiction in which such adjudication is made.

 

8.3     Withholding. The Company shall have the right to withhold from any
amount payable hereunder any national, state, provincial and local taxes in
order for the Company to satisfy any withholding tax obligation it may have
under any applicable law or regulation.

 

8.4     Survival. Upon the termination of this Agreement, the respective rights
and obligations of the parties hereto shall survive such expiration or other
termination to the extent necessary to carry out the intentions of the parties
under this Agreement.

 

8.5     Notices. All notices and other communications required or permitted
hereunder or necessary or convenient in connection herewith will be in writing
and will be delivered by hand or by express courier to the following addresses:

 

If to the Company, to:

 

Calypte Biomedical Corp.

15875 SW 72nd Ave.

Portland, OR 97224

USA

Attention: President

 

If to Employee, to:

\

Kartlos Edilashvili

Fairmont Residence, # 3104

Sheikh Zayed Road, Dubai, UAE

 

Or to such other names or addresses as the Company or Employee, as the case may
be, designate by notice to the other party hereto in the manner specified in
this Section.

 

8.6     Entire Agreement. Except to the extent expressly provided herein, this
Agreement sets forth the entire understanding between Employee and the Company
regarding the subject matter hereof and supersedes all prior and contemporaneous
understandings, agreements, representations and warranties, both written and
oral, with respect to such subject matter.

 

 
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8.7     Modifications and Waivers. No provision of this Agreement may be amended
or modified unless such amendment or modification is agreed to in writing and
signed by Employee and by a duly authorized officer of the Company. No waiver by
either party of any breach by the other party hereto of any condition or
provision of this Agreement to be performed by the other party hereto shall be
deemed a waiver of any other provision or condition at the same or any prior or
subsequent time, nor shall the failure of or delay by either of the parties in
exercising any right, power or privilege hereunder operate as a waiver thereof
to preclude any other or further exercise thereof or the exercise of any other
such right, power or privilege.

 

8.8     Successors and Assigns. This Agreement is personal to Employee and shall
not be assigned by Employee. Any purported assignment by Employee shall be null
and void from the initial date of the purported assignment. The Company may
assign this Agreement to any successor or assign (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of the
business or assets of the Company. This Agreement will bind the heirs, personal
representatives, successors and assigns of Employee and the Company, and shall
inure to the benefit of Employee and the Company and their respective permitted
successors and assigns.

 

8.9     Counterparts. This Agreement may be executed in separate counterparts,
each of which shall be deemed an original, but all of which taken together shall
constitute one and the same instrument.

 

IN WITNESS WHEREOF, the parties have executed this Agreement as of the Effective
Date.

 

Company:

 

CALYPTE BIOMEDICAL CORPORATION

 

 

By:                                                                     

Name: Adel Karas

Title: President and CEO

Employee:

 

 

                                                                       

Kartlos Edilashvili