Document:

GCA Reg Rights Agreement 1.21.04

REGISTRATION RIGHTS AGREEMENT 

January 21, 2004 

To GCA Strategic Investment Fund Limited 

Dear Sirs: 

This will confirm that in consideration of your agreement on the date hereof to purchase up to 2,500 shares of Series A Convertible Preferred Stock, $.001 par value per share, (the APreferred Stock" ) of Speedemission, Inc., a Georgia corporation (the ACompany" ), pursuant to the Subsciption and Securities Purchase Agreement of even date herewith (the APurchase Agreement" ) between the Company and you and as an inducement to you to consummate the transactions contemplated by the Purchase Agreement, the Company covenants and agrees with each of you as follows: 

1.  Certain Definitions . As used in this Agreement, the following terms shall have the following respective meanings: 

ACommission" shall mean the Securities and Exchange Commission, or any other federal agency at the time administering the Securities Act. 

ACommon Stock" shall mean the Common Stock, no par value, of the Company, as constituted as of the date of this Agreement. 

AConversion Shares" shall mean shares of Common Stock issued upon conversion of the Preferred Stock. 

AExchange Act" shall mean the Securities Exchange Act of 1934, as amended, or any similar federal statute, and the rules and regulations of the Commission thereunder, all as the same shall be in effect at the time. 

APurchaser" shall mean GCA Strategic Investment Fund Limited. 

ARegistration Expenses" shall mean the expenses so described in Section 8. 

ARestricted Stock" shall mean the Conversion Shares, excluding Conversion Shares which have been (a) registered under the Securities Act pursuant to an effective registration statement filed thereunder and disposed of in accordance with registration statement covering them or (b) publicly sold pursuant to Rule 144 under the Securities Act. 

	

 

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ASecurities Act" shall mean the Securities Act of 1933, as amended, or any similar federal statute, and the rules and regulations of the Commission thereunder, all as the same shall be in effect at the time. 

APreferred Stock" shall have the meaning set forth in the introduction above. 

ASelling Expenses" shall mean the expenses so described in Section 8. 

AWarrant Shares" shall mean at any time, the Common Stock Purchase Warrant issued the date hereof for 2,500,000 shares of the Company=s Common Stock. 

2.         Required Registration . 

a.        No later than April 15, 2004 the Company shall have filed to register the resale of the Restricted Shares and the Warrant Shares. For purposes of this Section 2 and Section 3, 4, 11(a) and 11(d), the term ARestricted Stock" shall be deemed to include the number of shares of Restricted Stock which would be issuable to a holder of Preferred Stock upon conversion of all such Preferred Stock held by such holder at such time, provided , however , that the only securities which the Company shall be required to register pursuant hereto shall be shares of Common Stock. Notwithstanding anything to the contrary contained herein, the Company shall not be obligated to effect, or to take any action to effect, any such registration pursuant to this Section 2: 

i.   during the period starting with the date sixty (60) days prior to the Company=s good faith estimate of the date of filing of, and ending on a date one hundred twenty (120) days after the effective date of, a Company-initiated registration (but in any event no greater than three hundred sixty (360) days after a request is made under this Section 4); provided that the Company is actively employing in good faith all reasonable efforts to cause such registration statement to become effective; or 

ii.   if in the good faith judgment of the Board of Directors of the Company, such registration would be seriously detrimental to the Company and the Board of Directors of the Company concludes, as a result, that it is essential to defer the filing of such registration statement at such time, in which case the Company shall furnish to such holders a certificate signed by the President of the Company stating that in the good faith judgment of the Board of Directors of the Company, it would be seriously detrimental to the Company for such registration statement to be filed in the near future and that it is, therefore, essential to defer the filing of such registration statement, then the Company shall have the right to defer such filing for a period of not more than 90 days after receipt of the request of the requesting holders, and, provided further, that the Company shall not defer its obligation in this manner more than once in any eighteen-month period. 

	 
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b.        Following receipt of any notice under this Section 2, the Company shall immediately notify all holders of Restricted Stock from whom notice has not been received and shall use its best efforts to register under the Securities Act, for public sale in accordance with the method of disposition specified in such notice from requesting holders, the number of shares of Restricted Stock specified in such notice (and in all notices received by the Company from other holders within 30 days after the giving of such notice by the Company). If such method of disposition shall be an underwritten public offering, the holders of a majority of the shares of Restricted Stock to be sold in such offering may designate the managing underwriter of such offering, subject to the approval of the Company, which approval shall not be unreasonably withhold or delayed. The Company shall be obligated to register Restricted Stock pursuant to this Section 2 on one occasion only, provided , however , that such obligation shall be deemed satisfied only when a registration statement covering all shares of Restricted Stock specified in notices received and not rescinded as aforesaid, for sale in accordance with the method of disposition specified by the requesting holders, shall have become effective and, if such method of disposition is a firm commitment underwritten public offering, all such shares shall have been sold pursuant thereto. 

c.        The Company and any other holders of Common Stock which the Company shall permit to participate shall be entitled to include in any registration statement referred to in this Section 2, for sale in accordance with the method of disposition specified by the requesting holders, shares of Common Stock to be sold by the Company or such other holders for their own account, except as and to the extent that, in the opinion of the managing underwriter (if such method of disposition shall be an underwritten public offering), such inclusion would adversely affect the marketing of the Restricted Stock to be sold. Except for registration statements on Form S-4, S-8 or any successor thereto, the Company will not file with the Commission any other registration statement with respect to its Common Stock, whether for its own account or that of other stockholders, from the date of receipt of a notice from requesting holders pursuant to this Section 2 until the completion of the period of distribution of the registration contemplated thereby. 

	 
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3.        Incidental Registration . If the Company at any time (other than pursuant to Section 2 or Section 4) proposes to register any of its Common Stock under the Securities Act for sale to the public, whether for its own account or for the account of other security holders or both (except with respect to registration statements on Forms S-4, S-8 or another form not available for registering the Restricted Stock for sale to the public), each such time it will give written notice to all holders of outstanding Restricted Stock of its intention so to do. Upon the written request of any such holder, received by the Company within 10 business days after the giving of any such notice by the Company, to register any of its Restricted Stock (which request shall state the intended method of disposition thereof), the Company will use its best efforts to cause the Restricted Stock as to which registration shall have been so requested to be included in the securities to be covered by the registration statement proposed to be filed by the Company, all to the extent requisite to permit the sale or other disposition by the holder (in accordance with its written request) of such Restricted Stock so registered. In the event that any registration pursuant to this Section 3 shall be, in whole or in part, an underwritten public offering of Common Stock, the number of shares of Restricted Stock to be included in such an underwriting may be reduced (pro rata among the requesting holders based upon the number of shares of Restricted Stock owned by such holders) if and to the extent that the managing underwriter shall be of the opinion that such inclusion would adversely affect the marketing of the securities to be sold by the Company therein, provided , however , that such number of shares of Restricted Stock shall not be reduced if any shares are to be included in such underwriting for the account of any person other than the Company or requesting holders of Restricted Stock. Notwithstanding the foregoing provisions, the Company may withdraw any registration statement referred to in this Section 3 without thereby incurring any liability to the holders of Restricted Stock. 

4.        Registration on Form S-3 . If at any time (i) a holder or holders of the Preferred Stock request that the Company file a registration statement on Form S-3 or any successor thereto for a public offering of all or any portion of the shares of Restricted Stock held by such requesting holder or holders, the reasonably anticipated aggregate price to the public of which would exceed $1,500,000, and (ii) the Company is a registrant entitled to use Form S-3 or any successor thereto to register such shares, then the Company shall use its best efforts to register under the Securities Act on form S-3 or any successor thereto, for public sale in accordance with the method of disposition specified in such notice, the number of shares of Restricted Stock specified in such notice. Whenever the Company is required by this Section 4 to use its best efforts to effect the registration of Restricted Stock, each of the procedures and requirements of Section 2 (including but not limited to the requirement that the Company notify all holders of Restricted Stock from whom notice has not been received and provide them with the opportunity to participate in the offering) shall apply to such registration, provided , however , that the Company shall not be obligated to effect any such registration pursuant to the conditions in Section 2(a)(i), in the event that the Company shall furnish the certification described in Section 2(a)(ii), or more than once in any twelve month period, and provided , further , however , that the requirements contained in the first sentence of Section 2(a) shall not apply to any registration on Form S-3 which may be requested and obtained under this Section 4. 

5.         Registration Procedures . If and whenever the Company is required by the provisions of Section 2, 3 or 4 to use its best efforts to effect the registration of any shares of Restricted Stock under the Securities Act, the Company will, as expeditiously as possible: 

 

a.        prepare and file with the Commission a registration statement (which, in the case of an underwritten public offering pursuant to Section 2, shall be on Form S-1 or other form of general applicability satisfactory to the managing underwriter selected as therein provided) with respect to such securities and use its best efforts to cause such registration statement to become and remain effective for the period of the distribution contemplated thereby (determined as hereinafter provided); 

	 
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b.        prepare and file with the Commission such amendments and supplements to such registration statement and the prospectus used in connection therewith as may be necessary to keep such registration statement effective for the period specified in paragraph (a) above and comply with the provisions of the Securities Act with respect to the disposition of all Restricted Stock covered by such registration statement in accordance with the sellers = intended method of disposition set forth in such registration statement for such period; 

c.        furnish to each seller of Restricted Stock and to each underwriter such number of copies of the registration statement and the prospectus included therein (including each preliminary prospectus) as such persons reasonably may request in order to facilitate the public sale or other disposition of the Restricted Stock covered by such registration statement; 

d.        use its best efforts to register or qualify the Restricted Stock covered by such registration statement under the securities or A blue sky @ laws of such jurisdictions as the sellers of Restricted Stock or, in the case of an underwritten public offering, the managing underwriter reasonably shall request, provided , however , that the Company shall not for any such purpose be required to qualify generally to transact business as a foreign corporation in any jurisdiction where it is not so qualified or to consent to general service of process in any such jurisdiction; 

e.        use its best efforts to list the Restricted Stock covered by such registration statement with any securities exchange on which the Common Stock of the Company is then listed; 

f.        immediately notify each seller of Restricted Stock and each underwriter under such registration statement, at any time when a prospectus relating thereto is required to be delivered under the Securities Act, of the happening of any event of which the Company has knowledge as a result of which the prospectus contained in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing; 

 

	 
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g.        if the offering is underwritten and at the request of any seller of Restricted Stock, use its best efforts to furnish on the date that Restricted Stock is delivered to the underwriters for sale pursuant to such registration: (i) an opinion dated such date of counsel representing the Company for the purposes of such registration, addressed to the underwriters, stating that such registration statement has become effective under the Securities Act and that (A) to the best knowledge of such counsel, no stop order suspending the effectiveness thereof has been issued and no proceedings for that purpose have been instituted or are pending or contemplated under the Securities Act, (B) the registration statement, the related prospectus and each amendment or supplement thereof comply as to form in all material respects with the requirements of the Securities Act (except that such counsel need not express any opinion as to financial statements contained therein) and (C) to such other effects as reasonably may be requested by counsel for the underwriters and (ii) a letter dated such date from the independent public accountants retained by the Company, addressed to the underwriters, stating that they are independent public accountants within the meaning of the Securities Act and that, in the opinion of such accountants, the financial statements of the Company included in the registration statement or the prospectus, or any amendment or supplement thereof, comply as to form in all material respects with the applicable accounting requirements of the Securities Act, and such letter shall additionally cover such other financial matters (including information as to the period ending no more than five business days prior to the date of such letter) with respect to such registration as such underwriters reasonably may request; and 

h.        make available for inspection by each seller of Restricted Stock, any underwriter participating in any distribution pursuant to such registration statement, and any attorney, accountant or other agent retained by such seller or underwriter, all financial and other records, pertinent corporate documents and properties of the Company, and cause the Company=s officers, directors and employees to supply all information reasonably requested by any such seller, underwriter, attorney, accountant or agent in connection with such registration statement. 

For purposes of Section 5(a) and 5(b) and of Section 2(c), the period of distribution of Restricted Stock in a firm commitment underwritten public offering shall be deemed to extend until each underwriter has completed the distribution of all securities purchase by it or a period of 90 days, which ever first occurs, and the period of distribution of Restricted Stock in any other registration shall be deemed to extend until the earlier of the sale of all Restricted Stock covered thereby and 90 days after the effective date thereof. 

In connection with each registration hereunder, the sellers of Restricted Stock will furnish to the Company in writing such information with respect to themselves and the proposed distribution by them as reasonably shall be necessary in order to assure compliance with federal and applicable state securities laws. 

In connection with each registration pursuant to Sections 2, 3 or 4 covering an underwritten public offering, the Company and each seller agree to enter into a written agreement with the managing underwriter selected in the manner herein provided in such form and containing such provisions as are customary in the securities business for such an arrangement between such underwriter and companies of the Company=s size and investment stature. 

	

 

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6.  Expenses. All expenses incurred by the Company in complying with sections 2, 3 and 4, including, without limitation, all registration and filing fees, printing expenses, fees and disbursements of counsel and independent public accountants for the Company, fees and expenses (including counsel fees) incurred in connection with complying with state securities or Ablue sky" laws, fees of the National Association of Securities Dealers, Inc., transfer taxes, fees of transfer agents and registrars, costs of insurance and reasonable fees and disbursements of one counsel for the sellers of Restricted Stock, but excluding any Selling Expenses, are called ARegistration Expenses". All underwriting discounts and selling commissions applicable to the sale of Restricted Stock are called ASelling Expenses". 

The Company will pay all Registration Expenses in connection with each registration statement under Sections 2, 3 or 4. All Selling Expenses in connection with each registration statement under Sections 2, 3 or 4 shall be borne by the participating sellers in proportion to the number of shares sold by each, or by such participating sellers other than the Company (except to the extent the Company shall be a seller) as they may agree. 

7.  Indemnification and Contribution . 

a.  In the event of a registration of any of the Restricted Stock under the Securities Act pursuant to Sections 2, 3 or 4, the Company will indemnify and hold harmless each seller of such Restricted Stock thereunder, each underwriter of such Restricted Stock thereunder and each other person, if any, who controls such seller or underwriter within the meaning of the Securities Act, against any losses, claims, damages or liabilities, joint or several, to which such seller, underwriter or controlling person may become subject under the Securities Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in any registration statement under which such Restricted Stock was registered under the Securities Act pursuant to Sections 2, 3 or 4, any preliminary prospectus or final prospectus contained therein, or any amendment or supplement thereof, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and will reimburse each such seller, each such underwriter and each such controlling person for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability or action, provided , however , that the Company will not be liable in any such case if and to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission so made in conformity with information furnished by any such seller, any such underwriter or any such controlling person in writing specifically for use in such registration statement or prospectus. It is agreed that the indemnity agreement contained in this Section 7(a) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the consent of the Company (which consent shall not be unreasonably withheld or delayed). 

	 
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b.  In the event of a registration of any of the Restricted Stock under the Securities Act pursuant to Sections 2, 3 or 4, each seller of such Restricted Stock thereunder, severally and not jointly, will indemnify and hold harmless the Company, each person, if any, who controls the Company within the meaning of the Securities Act, each officer of the Company who signs the registration statement, each director of the Company, each underwriter and each person who controls any underwriter within the meaning of the Securities Act, against all losses, claims, damages or liabilities, joint or several, to which the Company or such officer, director, underwriter or controlling person may become subject under the Securities Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in the registration statement under which such Restricted Stock was registered under the Securities Act pursuant to Sections 2, 3 or 4, any preliminary prospectus or final prospectus contained therein, or any amendment or supplement thereof, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and will reimburse the Company and each such officer, director, underwriter and controlling person for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability or action, provided, however, that such seller will be liable hereunder in any such case if and only to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in reliance upon and in conformity with information pertaining to such seller, as such, furnished in writing to the Company by such seller specifically for use in such registration statement or prospectus, and provided, further, however, that the liability of each seller hereunder shall not in any event to exceed the proceeds received by such seller from the sale of Restricted Stock covered by such registration statement. It is agreed that the indemnity agreement contained in this Section 7(b) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the consent of seller hereunder (which consent shall not be unreasonably withhold or delayed). 

	 
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c.  Promptly after receipt by an indemnified party hereunder of notice of the commencement of any action, such indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party hereunder, notify the indemnifying party in writing thereof, but the omission so to notify the indemnifying party shall not relieve it from any liability which it may have to such indemnified party other than under this Section 7 and shall only relieve it from any liability which it may have to such indemnified party under this Section 7 if and to the extent the indemnifying party is prejudiced by such omission. In case any such action shall be brought against any indemnified party and it shall notify the indemnifying party of the commencement thereof, the indemnifying party shall be entitled to participate in and, to the extent it shall wish, to assume and undertake the defense thereof with counsel reasonably satisfactory to such indemnified party, and, after notice from the indemnifying party to such indemnified party of its election so to assume and undertake the defense thereof, the indemnifying party shall not be liable to such indemnified party under this Section 7 for any legal expenses subsequently incurred by such indemnified party in connection with the defense thereof other than reasonable costs of investigation and of liaison with counsel so selected, provided, however, that, if the defendants in any such action include both the indemnified party and the indemnifying party and the indemnified party shall have reasonably concluded that there may be reasonable defenses available to it which are different from or additional to those available to the indemnifying party or if the interest of the indemnified party reasonably may be deemed to conflict with the interests of the indemnifying party, the indemnified party shall have the right to select a separate counsel and to assume such legal defenses and otherwise to participate in the defense of such action, with the expenses and fees of such separate counsel and other expenses related to such participation to be reimbursed by the indemnifying party as incurred. 

d.  In order to provide for just and equitable contribution to joint liability under the Securities Act in any case in which either (i) any holder of Restricted Stock exercising rights under this Agreement, or any controlling person of any such holder, makes a claim for indemnification pursuant to this Section 7 but it is judicially determined (by the entry of a final judgement or decree by a court of competent jurisdiction and the expiration of time to appeal or the denial of the last right of appeal) that such indemnification may not be enforced in such case notwithstanding the fact that this Section 7 provides for indemnification in such case, or (ii) contribution under the Securities Act may be required on the part of any such selling holder or any such controlling person in circumstances for which indemnification is provided under this Section 7; then, and in each such case, the Company and such holder will contribute to the aggregate losses, claims, damages or liabilities to which they may be subject (after contribution from others) in such proportion so that such holder is responsible for the portion represented by the percentage that the public offering price of its Restricted Stock offered by the registration statement bears to the public offering price of all securities offered by such registration statement, and the Company is responsible for the remaining portion; provided, however, that, in any such case, (A) no such holder will be required to contribute any amount in excess of the public offering price of all such Restricted Stock offered by it pursuant to such registration statement; and (B) no person or entity guilty of fraudulent misrepresentation (within the remaining of Section 9(f) of the Securities Act) will be entitled to contribution from any person or entity who was not guilty of such fraudulent misrepresentation. 

	 
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8.        Changes in Common Stock. If, and as often as, there is any change in the Common Stock by way of a stock split, stock dividend, combination or reclassification, or through a merger, consolidation, reorganization or recapitalization, or by any other means, appropriate adjustment shall be made in the provisions hereof so that the rights and privileges granted hereby shall continue with respect to the Common Stock as so changed. 

9.        Rule 144 Reporting. With a view to making available the benefits of certain rules and regulations of the Commission which may at any time permit the sale of the Restricted Stock to the public without registration, at all times after 90 days after any registration statement covering a public offering of securities of the Company under the Securities Act shall have become effective, the Company agrees to: 

a.  make and keep public information available, as those terms are understood and defined in Rule 144 under the Securities Act; 

b.  use its best efforts to file with the Commission in a timely manner all reports and other documents required of the Company under the Securities Act and the Exchange Act; and 

c.  furnish to each holder of Restricted Stock forthwith upon request a written statement by the Company as to its compliance with the reporting requirements of such Rule 144 and of the Securities Act and the Exchange Act, a copy of the most recent annual or quarterly report of the Company, and such other reports and documents so filed by the Company as such holder may reasonably request in availing itself of any rule or regulation of the Commission allowing such holder to sell any Restricted Stock without registration. 

10.        Representations and Warranties of the Company . The Company represents and warrants to you as follows: 

a.  The execution, delivery and performance of this Agreement by the Company have been duly authorized by all requisite corporate action and will not violate any provision of law, any order of any court or there agency of government, the Charter or By-laws of the Company or any provision of any indenture, agreement or other instrument to which it or any of its properties or assets is bound, conflict with, result in a breach of or constitute (with due notice or lapse of time or both) a default under any such indenture, agreement or other instrument or result in the creation or imposition of any lien, charge or encumbrance of any nature whatsoever upon any of the properties or assets of the Company. 

b.  This Agreement has been duly executed and delivered by the Company and constitutes the legal, valid and binding obligation of the Company, enforceable in accordance with its terms. 

	 
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11.        Miscellaneous. 

a.  All covenants and agreements contained in this Agreement by or on behalf of any of the parties hereto shall bind and inure to the benefit of the respective successors and assigns of the parties hereto (including without limitation transferees of any Debenture or Restricted Stock), whether so expressed or not, provided, however, that registration rights conferred herein on the holders of Preferred Stock or Restricted Stock shall only inure to the benefit of a transferee of Preferred Stock or Restricted Stock if (i) there is transferred to such transferee at least 1,000 shares in the aggregate of Preferred Stock or Restricted Stock or (ii) such transferee is a partner, shareholder or affiliate of a party hereto. 

b.  All notices, requests, consents and other communications hereunder shall be in writing and shall be delivered in person, mailed by certified or registered mail, return receipt requested, or sent by telecopier or telex, addressed as follows:: 

if to the Company or any other party hereto, at the address of such party set forth in the Purchase Agreement; 

if to any subsequent holder of the Preferred Stock or Restricted Stock, to it at such address as may have been furnished to the Company in writing by such holder; 

or, in any case, at such other address or addresses as shall have been furnished in writing to the Company (in the case of a holder of Preferred Stock or Restricted Stock) or to the holders of Preferred Stock or Restricted Stock (in the case of the Company) in accordance with the provisions of this paragraph. 

c.  This Agreement shall be governed by and construed in accordance with the laws of the State of Georgia. 

d.  This Agreement may not be amended or modified, and no provision hereof may be waived, without the written consent of the Company and the holders of at least two-thirds of the outstanding shares of Restricted Stock. 

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

f.  The obligations of the Company to register shares of Restricted Stock under Sections 2, 3 or 4 shall terminate on the tenth anniversary hereof. 

	

 

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g.  If requested in writing by the underwriters for the initial underwritten public offering of securities of the Company, each holder of Restricted Stock who is a party to this Agreement shall agree not to sell publicly any shares of Restricted Stock or any other shares of Common Stock (other than shares of Restricted Stock or other shares of Common Stock being registered in such offering), without the consent of such underwriters, for a period of not more than 180 days following the effective date of the registration statement relating to such offering; provided , however , that all persons entitled to registration rights with respect to shares of Common Stock who are not parties to this Agreement, all other persons selling shares of Common Stock in such offering, all persons holding in excess of 5% of the capital stock of the Company on a fully diluted basis and all executive officers and directors of the Company shall also have agreed not to sell publicly their Common Stock under the circumstances and pursuant to the terms set forth in this Section 11(g). 

h.  The Company shall not grant to any third party any registration rights more favorable than any of those contained herein, so long as any of the registration rights under this Agreement remains in effect. 

i.  If any provision of this Agreement shall be held to be illegal, invalid or unenforceable, such illegality, invalidity or unenforceability shall attach only to such provision and shall not in any manner affect or render illegal, invalid or unenforceable any other provision of this Agreement, and this Agreement shall be carried out as if any such illegal, invalid or unenforceable provision were not contained herein. 

    

	

 

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IN WITNESS WHEREOF , the parties hereto have caused this Agreement to be duly executed by their respective authorized officers, as of the date first above written. 

 

	
 
	
 
	
SPEEDEMISSIONS, INC. 

	
 
	
 
	
 

	
 
	
 
	
 

	
 
	
By: 
	
 /s/ Richard Parlontieri 

			

	
 
	
Name: 
	
Richard Parlontieri 

	
 
	
Title: 
	
President 

	
 
	
 
	
 

	
 
	
 
	
 

	
 
	
Address: 
	
Speedemissions, Inc. 

	
 
	
 
	
1029 Peachtree Parkway North 

	
 
	
 
	
Suite 310 

	
 
	
 
	
Peachtree City, GA 30269 

	
 
	
 
	
 

	
 
		
Fax:  770-306-7804 

	
 
	
 
	
Tel.:  770-330-6401 

	
 
	
 
	
 

	
 
	
 
	
 

	
 
	
 
	
 

	
 
	
 
	
GCA STRATEGIC FUND LIMITED 

	
 
	
 
	
 

	
 
	
 
	
 

	
 
	
By: 
	
 /s/ Lewis N. Lester 

			

	
 
	
Name: 
	
Lewis N. Lester 

	
 
	
Title: 
	
Director 

	
 
	
 
	
 

	
 
	
Address: 
	
c/o Prime Management Limited 

	
 
	
 
	
Mechanics Building 

	
 
	
 
	
12 Church Street 

	
 
	
 
	
Hamilton HM II, Bermuda 

	
 
	
 
	
 

	
 
	
 
	
Fax:  441-295-3926 

	
 
	
 
	
Tel.:  441-295-0329 

	 
	 	14SEPARATION AGREEMENT AND RELEASE

This  Separation  Agreement and Release of Claims  ("Agreement")  is made by and
between  Jay  Oyakawa  ("Employee")  and  Calypte  Biomedical  Corporation  (the
"Company" OR "Employer"), and all subsidiaries,  affiliates and/or joint venture
companies of Employer.

The ("Company") has elected to provide Employee with Severance Payments.

NOW THEEFORE,  in  consideration  of the mutual promises and releases  contained
herein and for other good and valuable  consideration,  the sufficiency of which
is hereby acknowledged, the parties agree as follows:

      1.    Upon the execution of this Agreement:

            a.    Employee  shall be  terminated  from  Employment  with Calypte
                  Biomedical Corporation effective January 19, 2004.

            b.    Employee  will  have the  right to elect to  continue,  at his
                  cost, coverage under the Calypte Biomedical Corporation Health
                  Plan, in accordance with the health care continuation coverage
                  provisions of the Consolidated  Omnibus Budget  Reconciliation
                  Act of 1985 ("COBRA").

            c.    Employee will  voluntarily  resign as President and a Director
                  of  Employer,  annexed  hereto  is a true  copy of  Employee's
                  resignation.  Additionally,  Employee consents to the issuance
                  of the attached copy of a press release announcing  Employee's
                  resignation  as an officer and director.

            d.    Employee  agrees that Employee will be bound by Sections 9 and
                  10 of his  Employment  agreement  dated  August 12,  2003 with
                  respect to confidentiality with Employer.

      2.    In consideration of the promises  contained  herein,  the Company is
            willing to provide  Employee with the Severance  Package outlined in
            this  Agreement  and  Release  ("Agreement"),  in  exchange  for and
            subject  to  Employee's   execution  and   non-revocation   of  this
            Agreement.  If the within agreement has not been revoked (as defined
            in paragraph "8" below).  Employee shall receive a Severance Package
            that will include a Severance Payment equal to (12) months of salary
            in monthly  installment  payments of ($ 29,166) per month ($350,000)
            The first  payment  will be paid on the Release  Effective  Date (As
            defined in Section 11)  Employer  will deduct the sum of  $16,766.39
            over three (3) consecutive monthly payments.  Said sum is an advance
            that was paid to  Employee  for travel  expenses.  In the event that
            Employer  obtains  equity  or  debt  financing,   including  without
            limitation,  any type of loan in, of the sum of at least  $5,000,000
            during the term  hereof,  Employer  agrees to pay the balance of any
            monthly installments due to Employee.  In addition,  Employer agrees
            to award Employee  effective January 15, 2004, 750,000 stock options
            to purchase  750,000 shares of common stock, at $.32 per share under
            Employer's  Employee  stock option plan,  which grant shall vest the
            earlier of the Release  Effective Date (as defined in section 11) or
            January 14, 2005, and to pay  reasonable  attorneys fees to Employee
            for his  appearance  if  required  at the  Securities  and  Exchange
            Commission,  as  well  as  indemnify  Employee  in  accordance  with
            Delaware  law. The  Severance is not subject to  applicable  payroll
            withholding deductions.  You will then be entitled to participate in
            the  Company's  group  Medical Plan pursuant to COBRA (as defined in
            paragraph "1").

                                                                               1
<PAGE>

                        SEPARATION AGREEMENT AND RELEASE

3.

      a.    In  consideration  for the  Severance  Package  provided to Employee
            pursuant to this Agreement,  Employee for himself and for his heirs,
            executors, and assigns (hereinafter  collectively referred to as the
            "Releasors"),  forever  releases and  discharges the Company and any
            and  all  of  its  parent  corporations,   subsidiaries,  divisions,
            affiliated entities,  predecessors,  successors and assigns, and any
            and all of its or their  Employee  benefit and /or pension  plans or
            funds, and any of its or their past or present officers,  directors,
            stockholders, agents, trustees, administrators, Employees or assigns
            (whether  acting as agents for such entities or in their  individual
            capacities)  (hereinafter  collectively referred to as "Releasees"),
            from  any and all  claims,  demands,  causes  of  action,  fees  and
            liabilities  of  any  kind  whatsoever  (based  upon  any  legal  or
            equitable  theory,  whether  contractual,   common-law,   statutory,
            federal, state, local or otherwise), whether known or unknown, which
            Releasors ever had, now have or may have against Releasees by reason
            arising out of or in any way connected  with  Employee's  Employment
            with the Company,  the  termination of or decision to terminate such
            Employment, and/or any of the events relating directly or indirectly
            to or  surrounding  that  termination;  or any  other  transactions,
            occurrences,  acts or  omissions  or any  loss ,  damage  or  injury
            whatever, known or unknown, suspected or unsuspected, resulting from
            any of  them,  committed  or  omitted  prior  to the  date  of  this
            Agreement, and including,  without limitation,  claims for breach of
            contract, libel, slander, wrongful discharge, intentional infliction
            of emotional  harm, or other tort, or  discrimination  or harassment
            based  upon  any  federal,  state,  or  municipal  statute  or local
            ordinance  relating to discrimination  in Employment.  And any claim
            for attorneys' fees, costs,  disbursements and/or the like. Or other
            matter up to and including the Release Effective Date.

      b.    Without limiting the generality of the foregoing subparagraph "(a)",
            this  Agreement is intended to and shall release the Releasees  from
            any  and  all  claims  against  Employer,  whether,  arising  out of
            Employee's Employment, or including but not limited to (i) any claim
            under the Age  Discrimination in Employment Act, as amended,  or the
            Older Workers Benefit Protection Act; (ii) any claim under Title VII
            of the Civil Rights Act of 1964,  as amended;  (iii) any claim under
            the  Americans  with  Disabilities  Act, as amended;  (iv) any claim
            under  the  Employee  Retirement  Income  Security  Act of 1974,  as
            amended  ("ERISA")  (excluding  claims for accrued,  vested benefits
            under any Employee  benefit plan of the Company in  accordance  with
            the terms of such plan and applicable  law); (v) any claim under the
            Federal Family and Medical Leave Act ("FMLA");  (vi) any claim under
            the Equal Pay Act; (vii) any claim under the California  State Human
            Rights Law, or any other Human Rights Law.

                                                                               2
<PAGE>

                        SEPARATION AGREEMENT AND RELEASE

      c.    This release shall not prevent  Releasors  from enforcing any rights
            under this Agreement.

4.    Employee agrees,  to the maximum extent permitted by law, that he will not
      commence,  maintain,  prosecute or participate as a party or a member of a
      class in any action or proceeding of any kind against any of the Releases,
      arising out of any act, omission,  transaction or occurrence  occurring up
      to and including the Release  Effective  Date and warrants that he has not
      done so as of the Release Effective Date.

5.    Employee  further agrees except as otherwise  provided in paragraph  "3c",
      that he will not seek or accept any award or settlement from any source or
      proceeding  with respect to any claim or right covered by  paragraphs  "3"
      and "4".

6.    The terms and  conditions of this  Agreement are and shall be deemed to be
      confidential,  and shall not be  disclosed  by  Employee  to any person or
      entity  without  the  prior  written  consent  of the  Company,  except if
      required  by  law   (Securities   and   Exchange   Commission   Disclosure
      Requirements) and to Employee's attorneys or family members, provided that
      they agree to maintain the  confidentiality  of this  Agreement.  Employee
      further  represents  that he has not disclosed the terms and conditions of
      this Agreement to anyone other than his attorneys and family members.

7.    Employee agrees that he has not and will not engage in any conduct that is
      injurious to releasee's reputation or interest,  including but not limited
      to  (i)  divulging,  communicating,  or in  any  way  making  use  of  any
      confidential  or proprietary  information  acquired in the  performance of
      duties for Releasees; and (ii) publicly disparaging (or inducing others to
      publicly  disparage)  Releasees,  including  making comments or statements
      which  would  adversely  affect the  Company to the press,  the  Company's
      Employees or  individuals or entities with whom the Company has a business
      relationship.  If The Company  receives  any  inquiries  from  prospective
      Employers concerning Employee,  the Company agrees that it will respond to
      such inquiries by stating his separation from the Company was amicable and
      on good terms and pursuant to Company policy,  it will provide  Employee's
      dates of Employment and Employee's last title with the Company.

8.    Consultation and Cooperation by Employee agrees to make himself reasonably
      available to the Company,  at mutually agreed times and places, to respond
      to  requests by the Company  for  information  concerning  facts or events
      relating to The Company that may be within his  knowledge.  Employee  will
      cooperate fully with the Company or any of its officers and directors,  in
      connection  with any or all future  litigation or  regulatory  proceedings
      brought by or against  the  Company to the extent The  Company  reasonably
      deems Employee  cooperation either necessary or helpful. In the event that
      the Company requires Employee  cooperation,  the Company agrees to pay any
      of Employee  reasonable  expenses in providing such  cooperation  (such as
      travel and accommodations).

                                                                               3
<PAGE>

                        SEPARATION AGREEMENT AND RELEASE

9.    Confidentiality.  The  parties  further  agree  that  the  terms  of  this
      Agreement,  and the negotiations  leading up to it, shall not be disclosed
      by the parties to any person,  other than in a  proceeding  to enforce the
      terms of this Agreement or pursuant to valid subpoena or court order, with
      the exception of the parties'  lawyers,  accountants,  tax preparers  and,
      with  respect to Employee,  immediate  family,  provided  that the parties
      inform any such persons that they must not disclose the same to any person
      and they agree to that  condition.  In response to any inquiry  from third
      parties,  the parties and their  attorneys may state only that the parties
      have resolved the matter.

10.   Non-Disparagement.  Employee  and  the  Company  agree  that,  except  for
      truthful  statements  in any  proceeding  to  enforce  this  Agreement  or
      pursuant to a valid Subpoena or Court Order,  neither will make or publish
      any statement  (orally or in writing) that becomes or reasonably  could be
      expected to become publicly known, or instigate,  assist or participate in
      the  making or  publication  of any such  statement,  which  would  libel,
      slander  or  disparage   (whether  or  not  such   disparagement   legally
      constitutes  libel or slander)  the other or, with respect to the Company,
      any of its  affiliates or any other entity or person within the Company or
      its affiliates,  any of their affairs or operations, or the reputations of
      any of their past or present officers, directors, agents,  representatives
      and Employees.

11.   Employee  shall  have  twenty-one  (21) days from the date of  receipt  to
      consider the terms and conditions of this Agreement.  If the terms of this
      Agreement meet Employee's approval,  Employee may accept this Agreement by
      signing it and  returning it to Employer.  Further,  Employee may sign and
      return this  Agreement at any time within this period.  After signing this
      Agreement,  Employee  shall have seven (7) days to revoke  this  Agreement
      ("Revocation Period") by indicating he desire to do so in writing that is:
      (a) addressed to Employer at the address listed above, and (b) received by
      he no later than the seventh (7th) day  following the date Employee  signs
      this  Agreement.  The effective date of this Agreement shall be the eighth
      (8th) day following  Employee's  signing of this  Agreement  (the "Release
      Effective Date"),  provided Employee does not revoke this Agreement during
      the  revocation  Period.  In the  event  Employee  does  not  accept  this
      Agreement  as set forth  above,  or  revokes  this  Agreement  during  the
      Revocation  Period,  this  Agreement  including  but  not  limited  to the
      obligation of the Company and its  subsidiaries  and affiliates to provide
      the payment  referred to in paragraph "2" above,  shall  automatically  be
      deemed null and void, in addition to the stock  options being  immediately
      cancelled.

12.   Employee  acknowledges  that:  (a) he has carefully read this Agreement in
      its entirety; (b) he has been advised by the Company in writing to consult
      with an attorney of he choosing in connection with this Agreement;  (c) he
      fully  understands the  significance of all of the terms and conditions of
      this  Agreement;  (d) he has  discussed  it  with  his  independent  legal
      counsel,  or has had a  reasonable  opportunity  to do so;  (e) he has had
      answered to his satisfaction any questions he has asked with regard to the
      meaning and  significance of any of the provisions of this agreement;  and
      (f) he is signing this Agreement  voluntarily and of his own free will and
      assents to all the terms and conditions contained herein.

                                       4
<PAGE>

                        SEPARATION AGREEMENT AND RELEASE

13.   The making of this Agreement is not intended,  and shall not be construed,
      as an admission  that  Releasees  have violated any federal state or local
      law  (statutory  or  decisional),  ordinance or  regulation,  breached any
      contract, or committed any wrong whatsoever against Employee.  The payment
      of Severance  Benefits to Employee  will not be considered an admission of
      any  liability  on the part of the Company  with  respect to any claims or
      potential claims made by Employee.

14.   This  Agreement  is binding  upon,  and shall inure to the benefit of, the
      parties and their respective heirs, executors, administrators,  successors
      and assigns.

15.   This  Agreement  shall be  interpreted,  construed,  governed and enforced
      according to the laws of the State of  California,  and the parties in any
      action arising out of this Agreement shall be subject to the  jurisdiction
      and venue of the federal and state  courts,  as applicable in the State of
      California.

      a.    If any provision of this Agreement shall be held by a court of court
            of competent  jurisdiction  to be illegal,  void, or  unenforceable,
            such provision shall be of no force and effect. However,  illegality
            or unenforceability of such provision shall have no effect upon, and
            shall not impair the  enforceability of, any other provision of this
            Agreement;  provided,  however, that, upon any finding by a court of
            competent  jurisdiction that the release and covenants  provided for
            by paragraphs "3" and "4" of this  Agreement are illegal,  void, and
            unenforceable   or  not  entered  into  knowingly  and  voluntarily,
            Employee agrees, at the Company's option,  either to return promptly
            to the Company the  Enhanced  Severance  paid to he pursuant to this
            Agreement or to execute a release,  waiver  and/or  covenant that is
            legal and enforceable.

      b.    If Employee seeks to challenge the validity of or otherwise  vitiate
            this  Agreement  or  any  provision  thereof   (including,   without
            limitation, paragraphs "3" and "4"), Employee, to the maximum extent
            permitted by law, shall, as a precondition,  be required to repay to
            the Company the  severance  paid to he pursuant to the terms of this
            Agreement.

      c.    Any breach of the terms of paragraphs "4", "6", "7", "8", "9" and/or
            "10" shall  constitute  a material  breach of this  Agreement  as to
            which the Company may seek appropriate  relief  (including,  but not
            limited to repayment of the  Severance  paid to Employee  under this
            Agreement) in a court of competent jurisdiction.

      d.    Employee  further agrees that any claim or counterclaim  made by the
            Company to enforce the terms of this  Agreement  shall not be deemed
            retaliatory.

16.   The parties  agree that this  Agreement  may only be used as evidence in a
      subsequent  proceeding in which any of the parties allege a breach of this
      Agreement.

                                                                               5
<PAGE>

17.   This Agreement  (together with the accompanying cover letter)  constitutes
      the complete  understanding between the parties and supersedes any and all
      agreements,  understandings,  and  discussions,  whether  written or oral,
      between the  parties.  No other  promises or  agreements  shall be binding
      unless in  writing  and signed  after the  Release  Effective  Date by the
      parties to be bound thereby.

ACCEPTED AND AGREED TO:
EMPLOYEE

By: /s/ Jay Oyakawa                     Date: 19 Jan 04
   --------------------------------          ----------
       Jay Oyakawa

State of California        )
                           ) ss:
County of                  )

On this _____ day of ____________,  2004,  before me personally came Jay Oyakawa
to me known and known to me to be the person described herein,  and who executed
the foregoing  Agreement and Release,  and he duly acknowledged that he executed
the same.

-----------------------------------
         Notary Public

ACCEPTED AND AGREED TO:

CALYPTE BIOMEDICAL CORPORATION

By: /s/ Anthony J. Cataldo                 Date: 19 Jan 04
   --------------------------------             -----------
   Chairman

                                                                               6

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