EX-10.5


    EXHIBIT
      10.5

     

    SEPARATION
      AGREEMENT

    


    This
      Separation Agreement (“Agreement”)
      is
      made and entered into as of April 4, 2005 (the “Effective
      Date”),
      by
      and among Ronald Brandt (“Executive”),
      Chiral Quest, Inc., a Minnesota corporation (“Company”),
      and
      VioQuest Pharmaceuticals, Inc., a Minnesota corporation (“Parent”).

    


    RECITALS

    


    A.    Executive
      is a member of the Board of Directors of Parent and is employed by Company
      as
      its President and Chief Executive Officer and serves as an officer and member
      of
      the Board of Directors of certain subsidiaries of Parent.

    


    B.    The
      parties have determined to mutually agree regarding the terms and conditions
      of
      Executive’s separation from Company and Parent.

    


    NOW,
      THEREFORE, in consideration of the foregoing, and the terms and conditions
      set
      forth below, the parties agree as follows.

    


    AGREEMENT

    


    1.    Separation
      from Company.
      Executive agrees to, and hereby does, resign as President and Chief Executive
      Officer of the Company, effective as of 11:59 p.m. (Eastern Time) on April
      4,
      2005 (the “Separation
      Date”).
      Executive agrees to, and hereby does, resign from the Board of Directors of
      the
      Company and Parent and from all directorships and officer positions in all
      subsidiaries of the Company, Parent and all other companies or entities where
      he
      is serving as a representative of either the Company or Parent, effective as
      of
      the Effective Date. The parties acknowledge that Executive’s separation from
      Company and Parent is the result of an agreement to separate on mutually
      agreeable terms. Except as expressly provided herein, the Employment Agreement
      between Executive and Company dated June 17, 2004 (the “Employment
      Agreement”),
      is
      terminated by mutual agreement of the parties as of the Effective Date and,
      except as otherwise set forth in this Agreement, has no further force or
      effect.

    


    2.    Benefits
      and Payments.
      Company
      will extend to Executive the following consideration:

    


    (a)    Payments.
      Provided that Executive does not exercise any of his rights to revoke his
      release of discrimination claims pursuant to Section
      9
      hereof
      and otherwise complies with his obligations hereunder, Company agrees that
      as
      separation pay it will pay to Executive an aggregate cash payment equal to
      $105,000 (the “Separation
      Payment”).
      The
      Separation Payment shall be paid in installments over a six month period in
      accordance with the Company’s normal payroll practices commencing on the first
      Company payday following the expiration of Executive’s right to revoke the
      release provided in Section 9 of this Agreement. The parties understand that,
      in
      accordance with the terms of the Employment Agreement, the Company, following
      Executive’s termination of employment in certain circumstances, may off-set any
      severance obligation that would be owing to Executive by actual amounts earned
      by Executive from other employment during the 6-month period following such
      termination. Notwithstanding any such provision in the Employment Agreement,
      Company hereby waives any right it would otherwise have under the Employment
      Agreement to reduce the amount of the Separation Payment. Executive understands
      that the Separation Payment is subject to applicable federal and state income
      tax and FICA withholding.

    


    (b)    No
      Other Remuneration.
      Except
      as otherwise provided in this Agreement, Executive agrees that he is not
      entitled to any remuneration from Company, except as provided in this Agreement.
      This includes back pay, sick pay, vacation pay, bonuses, health, life and
      disability insurance benefits or any other compensation.

     

    
      
         

      

      
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    (c)    COBRA
      Insurance Coverage.
      In
      addition to such payment, Company and Parent will, for a period of six (6)
      months following the Separation Date, continue to provide Executive with health
      insurance coverage in the same manner as currently provided by Company or Parent
      to Executive. If Executive elects any insurance coverage under COBRA beyond
      such
      6-month period, then Executive shall be responsible for all amounts due for
      such
      insurance coverage under COBRA. 

    


    (d)    Stock
      Options.
      Executive agrees that all stock options previously granted to him by Parent
      shall terminate or expire in accordance with their respective terms as of the
      Separation Date. 

    


    (e)    Out-of-Pocket
      Expenses.
      Executive shall submit to Company, by no later than April 10, 2005, all claims
      for reimbursement of out-of-pocket expenses incurred by Executive through the
      Separation Date in the course of his employment by Company, including all
      appropriate receipts or other documentation evidencing such expenses. Company
      will promptly reimburse Executive for such expenses; provided, that Company
      shall have no obligation to reimburse Executive for any such expenses for which
      Executive has not submitted a reimbursement claim by April 10, 2005, except
      that
      Company shall reimburse Executive for one airline ticket in the amount invoiced
      by Executive. Following the Separation Date, Executive shall have no right
      to
      incur, nor be reimbursed for, any out-of-pocket expense. 

    


    3.    Non-Disparagement.
      Executive will not disparage Company, Parent, their respective affiliated
      businesses, or their respective officers, board members, or employees, and
      Company and Parent will not disparage Executive. In response to any request
      from
      a prospective employer for information relating to Executive, Company and Parent
      will confirm, in writing if requested, Executive’s former title(s), length of
      employment and ending salary and related compensation terms. It is otherwise
      the
      Company’s and Parent’s policy to refrain from providing any reference
      information to prospective employers.

    


    4.    Employment
      Agreement.
      Sections 5 and 6 of the Employment Agreement shall continue to have full force
      and effect; provided,
      however,
      that
      notwithstanding anything to the contrary contained in the Employment Agreement,
      the provisions of paragraph (a) of Section 6 of the Employment Agreement
      (concerning competition by Executive) shall (x) survive only for a period a
      six
      months from the Separation Date. and (y) shall be amended to delete the
      second-to-last sentence and replace it with the following second-to-last
      sentence. 

    


    For
      purposes of this Agreement, the Company shall be deemed to be actively engaged
      in the business of chiral catalytic chemistry, including the development,
      application, and manufacturing of catalysts used to develop and manufacture
      chiral molecules, intermediates, and building blocks and providing consulting
      services in connection therewith, and in the future, in any other business
      in
      which the Company devotes substantive resources to study, develop or pursue
      during the Restricted Period of which business Executive was aware during the
      course of his employment.

    


    The
      Employment Agreement, in every other respect, is hereby terminated.


    


    5.    Records,
      Documents and Property.
      Executive has returned or will return to Company within 3 days hereafter all
      of
      Company’s and Parent’s property (including without limitation computers),
      records (including without limitation computer disks and computer files)
      correspondence, and documents in Executive’s possession or in Executive’s
      control. Company has returned or will return within 3 days hereafter all
      personal effects and possessions of Executive in Company’s possession, and will
      make reasonable efforts to provide copies of Executive’s personal data or
      documents in the Company’s information systems as requested by
      Executive.

     

    
      
         

      

      
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    6.    Non-Admission.
      Nothing
      in this Agreement is intended to be, nor will be deemed to be, an admission
      of
      liability by Company, Parent or Executive that they have violated any state
      or
      federal statute, local ordinance, or principal of common law, or that Company,
      Parent or Executive has engaged in any wrongdoing.

    


    7.    Release.
      

    


    In
      consideration of the payments and other benefits of this Agreement, Executive
      hereby fully and finally releases, waives, and otherwise relinquishes any and
      all claims that he has or believes he has against Company or Parent through
      the
      date of this Agreement. Executive will not bring any lawsuits or make any other
      demands against Company or Parent, except as necessary to enforce this Agreement
      or any stock option agreement between Parent and Executive that survives
      Executive’s separation from the Company and Parent. The payments and other
      benefits that Executive will receive under this Agreement is full and fair
      consideration for the release of such claims. Neither Company nor Parent owes
      Executive anything other than what is set forth in this Agreement except that
      Executive is entitled to indemnification and defense of any claims made against
      him as allowable by law and consistent with Parent’s and Company’s By-laws that
      arise out of the period of his employment. The payments and other benefits
      that
      Executive will receive hereunder constitute consideration in excess of that
      to
      which he is entitled.

    


    For
      purposes of this section 7, “Company”
means
      Chiral Quest, Inc., a Minnesota corporation, Parent and any subsidiary or any
      other company related to either the Company or Parent in the past or present,
      and each of them; and past or present officers, directors, agents and employees
      of Company and Parent and any other person who acted on behalf of Company or
      Parent or on instructions from Company or Parent.

    


    The
      claims that Executive is releasing, waiving, and otherwise relinquishing
      hereunder include all of the rights he has now to any relief of any kind from
      Company, including but not limited to, claims for breach of contract; breach
      of
      fiduciary duty; fraud or misrepresentation; rights and claims for age
      discrimination under the Age Discrimination in Employment Act (“ADEA”),
      the
      Americans with Disabilities Act (“ADA”),
      the
      Family and Medical Leave Act (“FMLA”),
      or
      any other federal, state, or local civil rights laws; defamation; infliction
      of
      emotional distress; unlawful or wrongful termination of employment; and any
      other claims for unlawful employment practices.

    


    In
      consideration of the benefits of this Agreement, Company hereby agrees that
      it
      will not bring any lawsuits or press any claims or make any other demands
      against Executive, and otherwise relinquishes and waives any and all claims
      against Executive that are known to the executive officers of Company through
      the date of this Agreement; provided,
      however,
      notwithstanding the foregoing, that Company may bring lawsuits or press claims
      against Executive (a) as necessary to enforce this Agreement or Sections 5
      and 6
      of the Employment Agreement and (b) nothing herein shall be deemed to release
      Executive for claims by Company against Executive for contribution and/or
      indemnification of any action or claim brought by any third party person arising
      out of Employee’s acts or omissions while employed by Company. 

    


    8.    Rights
      Concerning Release.
      Company
      hereby advises Executive to consult with an attorney prior to signing this
      Agreement containing a waiver of claims under the ADEA. 

    


    Executive
      acknowledges that he has had more than twenty-one (21) days to consider his
      waiver of rights and claims of age discrimination under the ADEA. Executive
      understands that, upon signing this Agreement, he may revoke his waiver of
      age
      discrimination rights and claims under the ADEA within seven (7) days
      thereafter, and his waiver of age discrimination rights and claims under the
      ADEA will not be effective or enforceable until this seven-day period has
      expired.

     

    
      
         

      

      
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    Executive
      understands that if he revokes his waiver as set forth in this Paragraph 8,
      Company’s obligations hereunder will cease. 

    


    9.    Entire
      Agreement.
      This
      Agreement and the employee benefits plans in which Executive may be a
      participant, constitute the entire Agreement between the parties with respect
      to
      the termination of Executive’s employment relationship with Company and Parent,
      and the parties agree that there were no other inducements or representations
      leading to the negotiation, drafting, and execution of this
      Agreement.

    


    10.    Invalidity.
      In case
      any one or more of the provisions of this Agreement should be invalid, illegal,
      or unenforceable in any respect, the validity, legality, and enforceability
      of
      the remaining provisions contained in this Agreement will not in any way be
      affected or impaired.

    


    11.    Voluntary
      and Knowing Action.
      Executive, Company and Parent acknowledge that they have read and understand
      this Agreement and voluntarily enter into this Agreement.

    


    12.    Heirs
      and Successors.
      This
      Agreement shall inure to the benefit of and shall bind the parties, their heirs,
      successors, representatives, and assigns.

    


    13.    Governing
      Law.
      This
      Agreement shall be construed and interpreted in accordance with the laws of
      the
      state of New Jersey. Each
      of the parties to this Agreement hereby waives their respective rights to a
      trial by jury.

    


    14.    Counterparts.
      This
      Agreement may be executed simultaneously in two or more counterparts, each
      of
      which will be deemed an original, but all of which together will constitute
      one
      and the same instrument.

    


    16.    Notices/Communications.
      Any
      notice, request, demand, or communication permitted, required or given relating
      to this Agreement either by Company to Executive or by Executive to Company
      shall be in writing and, unless otherwise required under the terms of a separate
      agreement or law or regulation shall be deemed to have been given by either
      party to the other when the party by whom such notice or communication is given
      deposits such notice or communication in the U.S. Postal Service mail, postage
      prepaid, certified mail, return receipt requested, properly addressed to the
      party to whom it is directed. Either party may, by notice sent in like manner,
      designate a different address for notices and communications.

    


    
      	
              If
                Sent to Company:

               

              Daniel
                Greenleaf

              VioQuest
                Pharmaceuticals, Inc.

              7
                Deer Park Drive, Suite E

              Monmouth
                Junction, NY 08852

               

              with
                a copy to:

               

              Maslon
                Edelman Borman & Brand, LLP

              90
                South 7th Street, Suite 3300

              Minneapolis,
                MN 55402

              Attn:
                William M. Mower, Esq.

            	
              If
                Sent to Executive:  

               

              Ronald
                Brandt

              10
                Lord William Penn Drive

              Morristown,
                NJ 07960

               

               

              with
                a copy to:

               

              Jon
                Green, Esq.

              Green
                & Savits

              35
                Airport Road, Suite 350

              Morristown,
                NJ 07960

            


    

     

    Signature
      page follows.

     

    
      
         

      

      
        -4-

        
          

        

      

      
         

      

    


    IN
      WITNESS WHEREOF, the parties have caused this Agreement to be signed on the
      day
      and year written below.

     

    
      
        	 	
                Chiral
                  Quest, Inc.

              	 
	
              	 	 	 
	 	 	 	 
	
                Dated:
                  June 14, 2005

              	
                By:

              	
                /s/
                  Brian Lenz

              	 
	
              	 	
                Brian
                  Lenz

              	 
	
              	 	
                Chief
                  Financial Officer

              	 
	
              	 	 	 
	
              	 	 	 
	 	
                VioQuest
                  Pharmaceuticals, Inc.

              	 
	
              	 	 	 
	
              	 	 	 
	
                Dated:
                  June 14, 2005

              	
                By:

              	
                /s/
                  Daniel Greenleaf

              	 
	 	 	
                Daniel
                  Greenleaf

              	 
	
              	 	
                President
                  & Chief Executive Officer

              	 
	 	 	 	 
	
              	 	 	 
	 	
                Executive:

              	 
	
              	 	 	 
	 	 	 	 
	
                Dated:
                  May 27, 2005

              	 	
                /s/
                  Ronald Brandt

              	 
	 	 	
                Ronald
                  Brandt

              	 


      

    

     

    
      	 	 	 	 
	
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