**EXHIBIT 10.1**

 

**SEPARATIONAGREEMENT AND GENERAL RELEASE OF CLAIMS**

 

This Separation Agreement and Release of Claims (“Agreement”)is between **Amit Kumar, Ph.D.** (“Kumar”) and **CombiMatrix Corporation** (“CombiMatrix” or the “Company”).

 

**WHEREAS**, CombiMatrix desires to provide Kumar withseparation benefits in connection with termination of his employment with theCompany on June 30, 2010; and

 

**WHEREAS**, Kumar agrees, in exchange for such separationbenefits, to waive and release any and all claims that he may have againstCombiMatrix and its Affiliates.

 

**NOW THEREFORE**, in consideration of the mutual promises,releases and other consideration referred to herein and for other good andvaluable consideration, the sufficiency of which is hereby acknowledged, theparties agree as follows:

 

**1.****                                     ****Definitions****.**

 

“Kumar” as used in this Agreement means the Kumarhimself or herself, and his or her family members, spouse, heirs, devisees,legatees, executors, administrators, successors, assignees, agents,representatives, businesses, insurers, subrogees, and attorneys, and allpersons or entities claiming through any of the foregoing persons.

 

“Affiliates” as used in this Agreement meansCombiMatrix Corporation and any of CombiMatrix’s benefit and stock optionplans, plan administrators, successors, assigns, businesses, affiliates, sistercompanies, parent companies, subsidiaries, divisions, partnerships, limitedpartnerships, partners, joint ventures, predecessors, officers, directors,trustees, conservators, employees, agents, insurance carriers, contractors,representatives, shareholders, and attorneys, and all persons or entitiesclaiming through its successors, assigns, businesses, affiliates, sistercompanies, parent companies, subsidiaries, divisions, partnerships, limited partnerships,partners, joint ventures, predecessors, officers, directors, trustees,conservators, employees, agents, insurance carriers, contractors,representatives, shareholders, and attorneys.

 

**2.****                                     ****Date of Termination.**  Kumar’s employment with CombiMatrix wasterminated effective June 30, 2010 (hereinafter the “Termination Date”)for all purposes.

 

**3.****                                     ****SeparationBenefits.**

 

**a.****           ****SeverancePay. **The Company shall pay Kumar an amount equal to one year of Kumar’sregular base salary, less $80,000, subject to all applicable taxation asordinary income, on the next regularly-scheduled pay date following theEffective Date of the Agreement (defined below).

 

**b.****           ****GroupWelfare Benefits. **Kumar shallcontinue to be enrolled in the Company’s group medical, dental, and lifeinsurance plans through June 30, 2011**.**  Once the Company-paid coverage ends,continued group health plan 

 

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coverage for Kumar and Kumar’s spouse and/or covereddependents, may also be available at Kumar expense under the terms andconditions specified in the Consolidated Omnibus Budget Reconciliation Act (“COBRA”).

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**c.****            ****UnemploymentCompensation. **Kumar agreesnot to apply for unemployment compensation benefits until after the period oftime for which Severance Pay is being paid. While the Company cannot control the decision reached by the State ofWashington Employment Security Department on any application for unemploymentcompensation benefits, it will respond that Kumar was laid off in connectionwith a reduction in force and not contest Kumar’s eligibility for benefits.

 

**4****.****                                     ****Releaseof Claims.****** Kumar KNOWINGLY AND VOLUNTARILY RELEASES,ACQUITS, AND FOREVER DISCHARGES CombiMatrix and its Affiliates with respect toand from and against any and all claims, wages, demands, assistance, support,rights, liens, agreements, contracts, covenants, actions, suits, rights toappeal, entitlements and notices, causes of action, obligations, debts, costs,expenses, interests, attorneys’ fees, contributions, damages, judgments, ordersand liabilities of whatever kind or nature in law, equity or otherwise, *whether known or unknown*, suspected or unsuspected, andwhether or not concealed or hidden (“Losses”), which he or she has at any timeheretofore owned or held against CombiMatrix or its Affiliates, that are basedupon facts occurring prior to the date of this Agreement, including but notlimited to, the following:  (a) anystatutory claims under any state, or municipal statute or local ordinancerelating to discrimination in employment, the Fair Labor Standards Act, theConsolidated Omnibus Budget Reconciliation Act (“COBRA”), Section 1981 ofthe Civil Rights Act of 1866, as amended, the Equal Pay Act of 1963, the CivilRights Act of 1964 and 1991, the Employee Retirement Income Security Act of1974, the Americans with Disabilities Act of 1990, the Rehabilitation Act of1973, the Family and Medical Leave Act of 1993, the Age Discrimination inEmployment Act, as amended, the Older Workers Benefit Protection Act; (b) anyand all tort or contract claims; (c) any and all claims for past or futureemployment benefits, including, but not limited to, wages, bonuses, vacationpay, severance benefits, medical or dental insurance coverage, short or longterm disability benefits, and/or other benefits which may hereafter accrue orwhich have accrued as a result of Kumar’s employment and/or affiliation with,and/or termination and/or separation from, CombiMatrix; and, (d) anyclaims, matters or actions related to Kumar’s employment and/or affiliationwith, and/or termination and/or separation from, CombiMatrix.  It is the intention of the parties and isfully understood and agreed by them that this Agreement includes a GeneralRelease of all Claims (with the exception of breaches of this Agreement andclaims for vested benefits, if any, to which Kumar is legally entitled underERISA), which Kumar holds or previously held against releasees, or any of them,whether or not they are specifically referred to herein. No reference herein toany specific claim, statute or obligation is intended to limit the scope ofthis General Release and, notwithstanding any such reference, this Agreementshall be effective as a full and final bar to all claims of every kind andnature, whether known or unknown, suspected or unsuspected, or fixed orcontingent, released in this Agreement.

 

**4a.**                                **Serviceas Non-Employee Director.**  Kumar is serving as a non-employee member ofthe Board of Directors of the Company (the “Board”). If, and only if, Kumar (1) executes and delivers the Agreement on orbefore 5:00 p.m. Pacific Standard Time on 

 

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August 14, 2010, (2) performs all of hisobligations and satisfies all conditions precedent under this Agreement and (3) doesnot revoke his acceptance of this Agreement, then Kumar: (a) shall beentitled to receive any cash compensation customarily paid by theCompany to its non-employee Directors forthe period July 1, 2010 to December 31, 2010 and (b) subject to approval by the Board, onor about October 1, 2010, shall be granted a non-statutory stock option topurchase 20,000 shares of common stock, of which one-half (1/2) shall be deemedimmediately vested, and one-half (1/2) shall vest on December 31, 2010.Beginning January 1, 2011, so long as Kumar is serving as a non-employeeDirector of the Company, he shall be entitled to receive any cash and equitycompensation customarily paid by the Company to its non-employee Directors.

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**5.****                                     ****CovenantNot to Sue.**  By signingthis Agreement, Kumar affirmatively represents that Kumar has not filed anyclaim against the Company or any of its releasees, and will not, to the extentallowed by applicable law, file any claim in the future.  Kumar will not, however, be prohibited fromfiling a claim if necessary to enforce the terms of this Agreement or a claimregarding vested retirement benefits.  Ifany government agency brings any proceedings or conducts any investigationagainst the Company, nothing in this Agreement forbids Kumar from cooperatingin such proceedings, but by this Agreement, Kumar waives and agrees torelinquish any damages or other individual relief that may be awarded as aresult of any such proceedings.

 

**6.****                                     ****Representations.**  Kumar makes the following covenants,representations and warranties to the Company and agrees to indemnify and holdharmless CombiMatrix and its Affiliates from and against any Losses based on,arising out of the breach of any of the representations, covenants orwarranties contained in this Agreement, including the following:

 

**a.****          **That Kumar hasread and understands each and every provision in this Agreement, including theinformation in **Exhibit A**that is provided in compliance with the Older Workers Benefits Protection Act,is signing this Agreement voluntarily, and was advised by the Company of his orher right to consult with an attorney prior to executing this Agreement.

 

**b.****          **That Kumar hasnot heretofore assigned or transferred, or purported to assign or transfer, toany person, entity, or individual whatsoever, any claim against the Company orany releasee.

 

**c.****           **That nopromises or representations except those contained in this Agreement and thePlan have been made to the Kumar in connection with the termination of his orher employment.

 

**d.****          **That Kumar understandsthat this Agreement does not cancel or otherwise diminish his or herpost-employment obligations under the common law, any employment relatedagreement with the Company or any policy of the Company (or any predecessor oraffiliate of the Company), including but not limited to, obligations relatingto confidentiality or the use of confidential information of the Company,disclosure and ownership of inventions, trade secrets and intellectualproperty, non-competition and non-solicitation of 

 

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customers, to the extentsuch obligations are not inconsistent with the provisions herein.

 

**7.****                                     ****Non-Admission.**  Kumar understands that the Company is notoffering this Agreement because it believes that the Kumar has any valid legalclaim against the Company.  Everyemployee who is offered such an agreement has the right to reject it, and giveup severance benefits, or to sign it, accept the severance benefits and give upwhatever legal claims the employee might believe he or she has against theCompany or any of its Affiliates.

 

**8.****                                     ****Non-Disparagement.**  In exchange for the benefits and paymentsoffered by the Company under this Agreement, Kumar agrees not to make anydisparaging statements to any current or former Company employees, customers,or any media or to any other person concerning the Company or any of itsAffiliates.  The Company agrees to notmake any disparaging statements to Kumar’s potential or future employers,business partners or customers concerning Kumar. A disparaging statement is anycomment oral or written, or via anonymous communication means such as by use ofanonymous mail or use of Internet message boards which would tend to causehumiliation or embarrassment or cause the recipient to question the businesscondition, integrity, competence or good character of the Company or any of itsAffiliates.

 

Kumaragrees that Kumar will not act in any manner that might damage the business ofthe Company.  Kumar agrees not toencourage, assist, counsel or cooperate with any attorneys or their clients inthe presentation or prosecution of any disputes, differences, lawsuits,charges, claims or complaints by any third party against the Company and itsAffiliates, unless under a subpoena or other court order to do so. Kumar agreesto inform the Company in writing within two (2) business days of receivingany such subpoena or other court order.

 

**9.****                                     ****PropertyReturn.**  No laterthan the Termination Date, and sooner if requested by the Company, Kumar willreturn to the Company all keys, passes, identifications cards, credit cards,cell phones, PDAs (e.g. Blackberry) or other items that the Kumar may have inhis or her possession that are the property of the Company, except that Kumarmay retain possession of his laptop computer, his desktop computer, associatedsoftware and one printer.  If at any timerequested by the Company, Kumar will promptly return to the Company and allwork-related documents and records, files, reports, books, data and any otherdocument in his or her possession.

 

**a.****              ****ConfidentialInformation**.  Kumaracknowledges and reaffirms his legal obligations and agrees to treat asconfidential all proprietary information disclosed to Kumar or developed byKumar while in the employ of the Company or its predecessors.  Such information includes, but is not limitedto, all proprietary information concerning the Company with respect to itsproprietary technologies, business, operations, finances, employees orotherwise.  Kumar agrees that theprovisions of this Agreement are confidential. Kumar will not disclose the terms hereof prior to signing, to anyperson, except to Kumar’s attorney, spouse, paid tax or financial advisors oras required by law or legal process. Before disclosing this Agreement or its terms to these persons, Kumarwill assure that they are aware of the confidentiality of the Agreement andassent to be bound by this provision. Kumar 

 

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agrees that an unauthorizeddisclosure by of the provisions of this Agreement by any person to whom Kumardisclosed its provisions will be deemed to be an unauthorized disclosure by theKumar.  Kumar acknowledges that theCompany regards the confidentiality of this Agreement to be an absolutecondition of its offer, and that any breach of this provision, whether or notintentional and regardless of whether done in bad faith, will be a materialbreach of this Agreement.  Kumaracknowledges that nothing in this Agreement is intended to supersede thepromises Kumar made in prior agreements with the Company****andacknowledges that those agreements remain in full force and effect to theextent such obligations are not inconsistent with the provisions herein.

 

**10.****                              ****ConsiderationPeriod and Revocation Period.**  **Kumar is advised to consult withan attorney of his choice prior to signing this Agreement**. Kumar has forty-five (45) days after thereceipt of this Agreement to consider whether or not to sign it, but may signat any time of the Kumar’s choosing during the 45-day period.  This Agreement may be revoked by Kumar at anytime within seven (7) days after the date of signing indicated below. Torevoke this Agreement, Kumar shall provide written notice of revocation to theChief Executive Officer or Manager of Human Resources for the Company.  This Agreement shall not be effective, norshall any of the severance benefits specified herein be paid, until expirationof the seven (7) day revocation period (“Effective Date of Agreement”).

 

**11.****                              ****Miscellaneous**

 

**a.****              **The parties have not reliedupon any representation or statement not contained in this Agreement, writtenor oral, concerning this Agreement.

 

**b.****              **This Agreement is intendedto settle and release any and all claims for attorneys’ fees and/or costs.

 

**c.  **This Agreement will be governed and construed in accordance with thelaws of the State of Washington applicable to contracts made, executed,delivered and performed wholly within the State of Washington, without regardto any applicable conflicts of law. Kumar, hereby (a) submits to the jurisdiction of any State andFederal courts sitting in the Western District of the State of Washington withrespect to matters arising out of or relating hereto, (b) agrees that allclaims with respect to such matters may be heard and determined in an action orproceeding in such State or Federal court, (c) waives the defense of aninconvenient forum, and (d) agrees that a final judgment in any suchaction or proceeding will be conclusive and may be enforced in otherjurisdictions by suit on the judgment or in any other manner provided by law.

 

**d.****              **Kumar agrees that, except asprovided by this Agreement, he is not entitled to any income, payments,salaries, or other financial benefits from CombiMatrix.

 

**e.****              **No waiver of any of theterms of this Agreement shall be valid unless in writing and signed by allparties to this Agreement.

 

**f.****                **This Agreement shall not bemodified, altered, or discharged except by a written agreement signed by eachof the parties to the Agreement.

 

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**g.****             **In the event that one ormore of the provisions of this Agreement shall for any reason be held to beillegal or unenforceable, this Agreement shall be revised only to the extentnecessary to make such provision(s) legal and enforceable.

 

**h.****             **The parties agree that thisAgreement may be used as evidence in a subsequent proceeding in which any ofthe parties allege a breach of this Agreement or as a complete defense to anylawsuit brought by either party.  Otherthan this exception, the parties agree that this Agreement will not beintroduced as evidence in any proceeding or in any lawsuit.

 

**i.****                **Except as otherwise setforth in this Agreement, this Agreement constitutes and contains the entireagreement and understanding concerning termination of Kumar’s employment andthe other subject matters addressed herein between the parties, and supersedesand replaces prior negotiations and all prior agreements proposed or otherwise,whether written or oral, concerning the subject matter hereof.

 

**j.****                **This Agreement may beexecuted in multiple counterparts each of which shall be deemed an original andall of which shall constitute one and the same instrument.  Facsimile signatures shall be given the sameforce and effect as original signatures.

 

The parties acknowledge that they have read the foregoing Agreement,understand its contents, and accept and agree to the provisions it contains andhereby execute it voluntarily and knowingly and with full understanding of itsconsequences.

 

 
| **EMPLOYEE:** | ** ** | **COMBIMATRIX  CORPORATION** |
|---------------|------------|------------------------------|
| ** **    | ** ** | ** **                   |
| By:           |       | /s/  AMIT KUMAR, PH.D.       |   | By: |   | /s/  SCOTT R. BURELL |
|          |       |                         |   |   |   |   |
| Name:         |       | Amit  Kumar, Ph.D.           |   | Name: |   | Scott  R.Burell |
|          |       |                         |   |   |   |   |
| Title:        |       | President  and CEO           |   | Title: |   | Chief  Financial Officer |
|          |       |                         |   |   |   |   |
| Dated:        |       | August 8,  2010         |   | Dated: |   | August 8,  2010 |

 

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**EXHIBIT A**

**(Required only for employees overage 40)**

 

CombiMatrix Corporation (“CombiMatrix”)is required to provide this information to employees over age 40 pursuant tothe Older Workers Benefit Protection Act, 29 U.S.C. § 626(f).

 

Covered Employees and Eligibility Requirements

 

The eligibility requirements for being included inthis severance program (the “Program”) are that you were notified of your layoff in April 2010.

 

Time Limits Application to Program

 

All eligible employees who wish to participate inthe Program must sign the Separation Agreement and Release of Claims (the “Agreement”)and return it to Brenda Laird no later than 5:00 p.m. on **August 14, 2010**. Once an employee has signed the Agreement and returned it toCombiMatrix, the employee has seven days to revoke the Agreement, after whichit will be considered effective if not revoked.

 

Individuals Eligible and Ineligible for the Program

 

The following is a list of the departments and agesof all incumbent employees at CombiMatrix who are eligible and ineligible forthe Program as of April 23, 2010.

 

 
| **Department**                           | ** ** | **Not Eligible** | ** ** | **Eligible (Laid-off)**             |
|------------------------------------------|------------|------------------|------------|-------------------------------------|
| 100  – Executive                    |       |             |       | 45,  46, 58, 63                     |
| 220  – Sales & Marketing   |       |             |       | 33,  48                             |
| 232  – Production                   |       |             |       | 28,  44, 48                         |
| 234  – Biology & Chemistry |       |             |       | 25,  28, 33, 36, 39, 42, 42, 43, 57 |
| 236  – Engineering                  |       |             |       | 35,  40, 51, 54                     |
| 250  – Software Development         |       |             |       | 46,  46, 50                         |
| 400  – Finance/Operations           |       |             |       | 32,  39, 45, 52, 53, 58, 62         |
| 410  – IT                           |       |             |       | 34                                  |
| 500  – Legal                        |       |             |       | 51,  53                             |

 

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