Document:

Exhibit 10.3

 

COMMERCIAL GUARANTY

 

	
  Principal

  	
   

  	
  Loan Date

  	
   

  	
  Maturity

  	
   

  	
  Loan No.

  	
   

  	
  Call/Coll

  	
   

  	
  Account

  	
   

  	
  Officer

  	
   

  	
  Initials

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  7015103

  	
   

  	
  1E/45

  	
   

  	
   

  	
   

  	
  CH

  	
   

  	
   

  

 

References in the boxes above are for Lender’s use
only and do not limit the applicability of this document to any particular loan
or item. Any item above containing “***” has been omitted due to text length
limitations

 

	
  Borrower:

  	
   

  	
  AWI GAMING, INC.

  P.O. Box 56

  Lovelock, NV 89419

  	
   

  	
  Lender:

  	
   

  	
  GREAT BASIN BANK OF

  NEVADA

  Fallon Office

  498 W. Williams Avenue

  Fallon, NV 89406

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Guarantor:

  	
   

  	
  AMERICAN WAGERING, INC.

  675 Grier Drive

  Las Vegas, NV 89119-3738

  	
   

  	
   

  	
   

  	
   

  

 

CONTINUING GUARANTEE OF PAYMENT AND PERFORMANCE.  For good and valuable consideration,
Guarantor absolutely and unconditionally guarantees full and punctual payment
and satisfaction of the Indebtedness of Borrower to Lender, and the performance
and discharge of all Borrower’s obligations under the Note and the Related
Documents.  This is a guaranty of payment
and performance and not of collection, so Lender can enforce this Guaranty
against Guarantor even when Lender has not exhausted Lender’s remedies against
anyone else obligated to pay the Indebtedness or against any collateral
securing the Indebtedness, this Guaranty or any other guaranty of the
Indebtedness.  Guarantor will make any
payments to Lender or its order, on demand, in legal tender of the United
States of America, in same-day funds, without set-off or deduction or
counterclaim, and will otherwise perform Borrower’s obligations under the Note
and Related Documents.  Under this
Guaranty, Guarantor’s liability is unlimited and Guarantor’s obligations are
continuing.

 

INDEBTEDNESS. 
The word “Indebtedness” as used in this Guaranty means all of the
principal amount outstanding from time to time and at any one or more times,
accrued unpaid interest thereon and all collection costs and legal expenses
related thereto permitted by law, attorneys’ fees, arising from any and all
debts, liabilities and obligations of every nature or form, now existing or
hereafter arising or acquired, that Borrower individually or collectively or
interchangeably with others, owes or will owe Lender.  “Indebtedness” includes, without limitation,
loans, advances, debts, overdraft indebtedness, credit card indebtedness, lease
obligations, liabilities and obligations under any interest rate protection
agreements or foreign currency exchange agreements or commodity price
protection agreements, other obligations, and liabilities of Borrower, and any
present or future judgments against Borrower, future advances, loans or
transactions that renew, extend, modify, refinance, consolidate or substitute
these debts, liabilities and obligations whether: voluntarily or involuntarily
incurred; due or to become due by their terms or acceleration; absolute or
contingent; liquidated or unliquidated; determined or undetermined; direct or 

 

1

 

indirect; primary or secondary in nature or arising
from a guaranty or surety; secured or unsecured; joint or several or joint and
several; evidenced by a negotiable or non-negotiable instrument or writing;
originated by Lender or another or others; barred or unenforceable against
Borrower for any reason whatsoever; for any transactions that may be voidable
for any reason (such as infancy, insanity, ultra vires or otherwise); and
originated then reduced or extinguished and then afterwards increased or
reinstated.

 

If Lender presently holds one or more guaranties, or
hereafter receives additional guaranties from Guarantor, Lender’s rights under
all guaranties shall be cumulative.  This
Guaranty shall not (unless specifically provided below to the contrary) affect
or invalidate any such other guaranties. Guarantor’s liability will be
Guarantor’s aggregate liability under the terms of this Guaranty and any such
other unterminated guaranties.

 

CONTINUING GUARANTY. 
THIS IS A “CONTINUING GUARANTY” UNDER WHICH GUARANTOR AGREES TO
GUARANTEE THE FULL AND PUNCTUAL PAYMENT, PERFORMANCE AND SATISFACTION OF THE
INDEBTEDNESS OF BORROWER TO LENDER, NOW EXISTING OR HEREAFTER ARISING OR
ACQUIRED, ON AN OPEN AND CONTINUING BASIS. 
ACCORDINGLY, ANY PAYMENTS MADE ON THE INDEBTEDNESS WILL NOT DISCHARGE OR
DIMINISH GUARANTOR’S OBLIGATIONS AND LIABILITY UNDER THIS GUARANTY FOR ANY
REMAINING AND SUCCEEDING INDEBTEDNESS EVEN WHEN ALL OR PART OF THE
OUTSTANDING INDEBTEDNESS MAY BE A ZERO BALANCE FROM TIME TO TIME.

 

DURATION OF GUARANTY. 
This Guaranty will take effect when received by Lender without the
necessity of any acceptance by Lender, or any notice to Guarantor or to
Borrower, and will continue in full force until all the indebtedness incurred
or contracted before receipt by Lender of any notice of revocation shall have
been fully and finally paid and satisfied and all of Guarantor’s other obligations
under this Guaranty shall have been performed in full.  If Guarantor elects to revoke this Guaranty,
Guarantor may only do so in writing. 
Guarantor’s written notice of revocation must be mailed to Lender, by
certified mail, at Lender’s address listed above or such other place as Lender
may designate in writing.  Written
revocation of this Guaranty will apply only to new Indebtedness created after
actual receipt by Lender of Guarantor’s written revocation.  For this purpose and without limitation, the
term “new Indebtedness” does not include the Indebtedness which at the time of
notice of revocation is contingent, unliquidated, undetermined or not due and
which later becomes absolute, liquidated, determined or due.  For this purpose and without limitation, “new
Indebtedness” does not include all or part of the Indebtedness that is:
incurred by Borrower prior to revocation; incurred under a commitment that
became binding before revocation; any renewals, extensions, substitutions, and
modifications of the Indebtedness.  This
Guaranty shall bind Guarantor’s estate as to the Indebtedness created both
before and after Guarantor’s death or incapacity, regardless of Lender’s actual
notice of Guarantor’s death.  Subject to
the foregoing, Guarantor’s executor or administrator or other legal
representative may terminate this Guaranty in the same manner in which
Guarantor might have terminated it and with the same effect.  Release of any other guarantor or termination
of any other guaranty of the Indebtedness shall not affect the liability of
Guarantor under this Guaranty.  A
revocation Lender receives from any one or more Guarantors shall not affect the
liability of any remaining Guarantors under this Guaranty.  It is anticipated that fluctuations may occur
in the aggregate amount of the Indebtedness covered by this Guaranty, and
Guarantor specifically acknowledges and agrees that reductions in the amount of
the Indebtedness, even to zero dollars ($0.00), shall not constitute a
termination of this Guaranty.  This
Guaranty is binding upon Guarantor and Guarantor’s heirs, successors and
assigns so long as any of the Indebtedness remains unpaid and even though the
Indebtedness may from time to time be zero dollars ($0.00).

 

2

 

GUARANTOR’S AUTHORIZATION TO LENDER.  Guarantor authorizes Lender, either before or
after any revocation hereof, without notice or demand and without lessening
Guarantor’s liability under this Guaranty, from time to time: (A) prior to
revocation as set forth above, to make one or more additional secured or
unsecured loans to Borrower, to lease equipment or other goods to Borrower, or
otherwise to extend additional credit to Borrower; (B) to alter,
compromise, renew, extend, accelerate, or otherwise change one or more times
the time for payment or other terms of the Indebtedness or any part of the
Indebtedness, including increases and decreases of the rate of interest on the
Indebtedness; extensions may be repeated and may be for longer than the original
loan term; (C) to take and hold security for the payment of this Guaranty
or the Indebtedness, and exchange, enforce, waive, subordinate, fail or decide
not to perfect, and release any such security, with or without the substitution
of new collateral; (D) to release, substitute, agree not to sue, or deal
with any one or more of Borrower’s sureties, endorsers, or other guarantors on
any terms or in any manner Lender may choose; (E) to determine how, when
and what application of payments and credits shall be made on the Indebtedness;
(F) to apply such security and direct the order or manner of sale thereof,
including without limitation, any nonjudicial sale permitted by the terms of
the controlling security agreement or deed of trust, as Lender in its discretion
may determine: (G) to sell. 
transfer, assign or grant participations in all or any part of the
Indebtedness; and (H) to assign or transfer this Guaranty in whole or in
part.

 

GUARANTOR’S REPRESENTATIONS AND WARRANTIES.  Guarantor represents and warrants to Lender
that (A) no representations or agreements of any kind have been made to
Guarantor which would limit or qualify in any way the terms of this Guaranty; (B) this
Guaranty is executed at Borrower’s request and not at the request of Lender; (C) Guarantor
has full power, right and authority to enter into this Guaranty; (D) the
provisions of this Guaranty do not conflict with or result in a default under
any agreement or other instrument binding upon Guarantor and do not result in a
violation of any law, regulation, court decree or order applicable to
Guarantor; (E) Guarantor has not and will not, without the prior written
consent of Lender, sell, lease, assign, encumber, hypothecate, transfer, or
otherwise dispose of all or substantially all of Guarantor’s assets, or any
interest therein; (F) upon Lender’s request, Guarantor will provide to
Lender financial and credit information in form acceptable to Lender, and all
such financial information which currently has been, and all future financial
information which will be provided to Lender is and will be true and correct in
all material respects and fairly present Guarantor’s financial condition as of
the dates the financial information is provided; (G) no material adverse
change has occurred in Guarantor’s financial condition since the date of the
most recent financial statements provided to Lender and no event has occurred
which may materially adversely affect Guarantor’s financial condition; (H) no
litigation, claim, investigation, administrative proceeding or similar action
(including those for unpaid taxes) against Guarantor is pending or threatened; (I) Lender
has made no representation to Guarantor as to the creditworthiness of Borrower;
and (J) Guarantor has established adequate means of obtaining from
Borrower on a continuing basis information regarding Borrower’s financial
condition.  Guarantor agrees to keep
adequately informed from such means of any facts, events, or circumstances
which might in any way affect Guarantor’s risks under this Guaranty, and
Guarantor further agrees that, absent a request for information, Lender shall
have no obligation to disclose to Guarantor any information or documents
acquired by Lender in the course of its relationship with Borrower.

 

GUARANTOR’S FINANCIAL STATEMENTS.  Guarantor agrees to furnish Lender with the
following:

 

Annual Statements.  As soon as
available, but in no event later than sixty (60) days after the end of each
fiscal year, Guarantor’s balance sheet and income statement for the year ended,
prepared by Guarantor.

 

3

 

Tax Returns.  As soon as
available, but in no event later than thirty (30) days after the applicable
filing date for the tax reporting period ended, Federal and other governmental
tax returns, prepared by a tax professional satisfactory to Lender.

 

All financial reports required to be provided under
this Guaranty shall be prepared in accordance with GAAP, applied on a
consistent basis, and certified by Guarantor as being true and correct.

 

GUARANTOR’S WAIVERS. 
Except as prohibited by applicable law, Guarantor waives any right to
require Lender (A) to continue lending money or to extend other credit to
Borrower; (B) to make any presentment, protest, demand, or notice of any
kind, including notice of any nonpayment of the indebtedness or of any
nonpayment related to any collateral, or notice of any action or nonaction on
the part of Borrower, Lender, any surety, endorser, or other guarantor in
connection with the Indebtedness or in connection with the creation of new or
additional loans or obligations; (C) to resort for payment or to proceed
directly or at once against any person, including Borrower or any other
guarantor; (D) to proceed directly against or exhaust any collateral held
by Lender from Borrower, any other guarantor, or any other person; (E) to
give notice of the terms, time, and place of any public or private sale of
personal property security held by Lender from Borrower or to comply with any
other applicable provisions of the Uniform Commercial Code; (F) to pursue
any other remedy within Lender’s power; or (G) to commit any act or
omission of any kind, or at any time, with respect to any matter whatsoever.

 

Guarantor also waives any and all rights or defenses
based on suretyship or impairment of collateral including, but not limited to,
any rights or defenses arising by reason of (A) any “one action” or “anti-deficiency”
law or any other law which may prevent Lender from bringing any action,
including a claim for deficiency, against Guarantor, before or after Lender’s
commencement or completion of any foreclosure action, either judicially or by
exercise of a power of sale; (B) any election of remedies by Lender which
destroys or otherwise adversely affects Guarantor’s subrogation rights or
Guarantor’s rights to proceed against Borrower for reimbursement, including
without limitation, any loss of rights Guarantor may suffer by reason of any
law limiting, qualifying, or discharging the Indebtedness; (C) any
disability or other defense of Borrower, of any other guarantor, or of any
other person, or by reason of the cessation of Borrower’s liability from any
cause whatsoever, other than payment in full in legal tender, of the
Indebtedness; (D) any right to claim discharge of the Indebtedness on the
basis of unjustified impairment of any collateral for the Indebtedness; (E) any
statute of limitations, if at any time any action or suit brought by Lender
against Guarantor is commenced, there is outstanding Indebtedness which is not
barred by any applicable statute of limitations; or (F) any defenses given
to guarantors at law or in equity other than actual payment and performance of
the Indebtedness.  If payment is made by
Borrower, whether voluntarily or otherwise, or by any third party, on the
Indebtedness and thereafter Lender is forced to remit the amount of that
payment to Borrower’s trustee in bankruptcy or to any similar person under any
federal or state bankruptcy law or law for the relief of debtors, the
Indebtedness shall be considered unpaid for the purpose of the enforcement of
this Guaranty.

 

Guarantor further waives and agrees not to assert or
claim at any time any deductions to the amount guaranteed under this Guaranty
for any claim of setoff, counterclaim, counter demand, recoupment or similar
right, whether such claim, demand or right may be asserted by the Borrower, the
Guarantor, or both.

 

GUARANTOR’S UNDERSTANDING WITH RESPECT TO
WAIVERS.  Guarantor warrants and agrees
that each of the waivers set forth above is made with Guarantor’s full
knowledge of its significance and consequences and that, under the
circumstances, the waivers are reasonable and not contrary to public 

 

4

 

policy or law. 
If any such waiver is determined to be contrary to any applicable law or
public policy, such waiver shall be effective only to the extent permitted by
law or public policy.

 

SUBORDINATION OF BORROWER’S DEBTS TO GUARANTOR.  Guarantor agrees that the Indebtedness,
whether now existing or hereafter created, shall be superior to any claim that
Guarantor may now have or hereafter acquire against Borrower, whether or not
Borrower becomes insolvent.  Guarantor
hereby expressly subordinates any claim Guarantor may have against Borrower,
upon any account whatsoever, to any claim that Lender may now or hereafter have
against Borrower.  In the event of
insolvency and consequent liquidation of the assets of Borrower, through
bankruptcy, by an assignment for the benefit of creditors, by voluntary liquidation,
or otherwise, the assets of Borrower applicable to the payment of the claims of
both Lender and Guarantor shall be paid to Lender and shall be first applied by
Lender to the Indebtedness.  Guarantor
does hereby assign to Lender all claims which it may have or acquire against
Borrower or against any assignee or trustee in bankruptcy of Borrower; provided
however, that such assignment shall be effective only for the purpose of
assuring to Lender full payment in legal tender of the Indebtedness.  If Lender so requests, any notes or credit
agreements now or hereafter evidencing any debts or obligations of Borrower to
Guarantor shall be marked with a legend that the same are subject to this
Guaranty and shall be delivered to Lender. 
Guarantor agrees, and Lender is hereby authorized, in the name of
Guarantor, from time to time to file financing statements and continuation
statements and to execute documents and to take such other actions as Lender
deems necessary or appropriate to perfect, preserve and enforce its rights
under this Guaranty.

 

MISCELLANEOUS PROVISIONS.  The following miscellaneous provisions are a
part of this Guaranty:

 

Amendments.  This
Guaranty, together, with any Related Documents, constitutes the entire
understanding and agreement of the parties as to the matters set forth in this
Guaranty.  No alteration of or amendment
to this Guaranty shall be effective unless given in writing and signed by the
party or parties sought to be charged or bound by the alteration or amendment.

 

Attorneys’ Fees; Expenses. 
Guarantor agrees to pay upon demand all of Lender’s costs and expenses,
including Lender’s attorneys’ fees and Lender’s legal expenses, incurred in
connection with the enforcement of this Guaranty.  Lender may hire or pay someone else to help
enforce this Guaranty, and Guarantor shall pay the costs and expenses of such
enforcement.  Costs and expenses include
Lender’s attorneys’ fees and legal expenses whether or not there is a lawsuit,
including attorneys’ fees and legal expenses for bankruptcy proceedings
(including efforts to modify or vacate any automatic stay or injunction),
appeals, and any anticipated post judgment collection services.  Guarantor also shall pay all court costs and
such additional fees as may be directed by the court.

 

Caption Headings.  Caption
headings in this Guaranty are for convenience purposes only and are not to be
used to interpret or define the provisions of this Guaranty.

 

Governing Law.  This Guaranty
will be governed by federal law applicable to Lender and, to the extent not
preempted by federal law, the laws of the State of Nevada without regard to its
conflicts of law provisions.

 

Integration.  Guarantor
further agrees that Guarantor has read and fully understands the terms of this
Guaranty; Guarantor has had the opportunity to be advised by Guarantor’s
attorney with respect to this Guaranty; the Guaranty fully reflects Guarantor’s
intentions and parol evidence is not required to interpret the terms of this
Guaranty.  Guarantor hereby indemnifies
and holds Lender harmless from all losses, claims, damages, and costs
(including Lender’s attorneys’ fees) suffered or incurred by Lender as a result
of any breach by Guarantor of the warranties, representations and agreements of
this paragraph.

 

5

 

Interpretation. 
In all
cases where there is more than one Borrower or Guarantor, then all words used
in this Guaranty in the singular shall be deemed to have been used in the
plural where the context and construction so require; and where there is more
than one Borrower named in this Guaranty or when this Guaranty is executed by
more than one Guarantor, the words “Borrower” and “Guarantor” respectively
shall mean all and any one or more of them. 
The words “Guarantor,” “Borrower,” and “Lender” include the heirs,
successors, assigns, and transferees of each of them.  If a court finds that any provision of this
Guaranty is not valid or should not be enforced, that fact by itself will not
mean that the rest of this Guaranty will not be valid or enforced.  Therefore, a court will enforce the rest of
the provisions of this Guaranty even if a provision of this Guaranty may be
found to be invalid or unenforceable.  If
any one or more of Borrower or Guarantor are corporations, partnerships,
limited liability companies, or similar entities, it is not necessary for
Lender to inquire into the powers of Borrower or Guarantor or of the officers,
directors, partners, managers, or other agents acting or purporting to act on
their behalf, and any indebtedness made or created in reliance upon the
professed exercise of such powers shall be guaranteed under this Guaranty.

 

Notices.  Any notice
required to be given under this Guaranty shall be given in writing, and, except
for revocation notices by Guarantor, shall be effective when actually
delivered, when actually received by telefacsimile (unless otherwise required
by law), when deposited with a nationally recognized overnight courier, or, if
mailed, when deposited in the United States mail, as first class, certified or
registered mail postage prepaid, directed to the addresses shown near the
beginning of this Guaranty.  All
revocation notices by Guarantor shall be in writing and shall be effective upon
delivery to Lender as provided in the section of this Guaranty entitled “DURATION
OF GUARANTY.” Any party may change its address for notices under this Guaranty
by giving formal written notice to the other parties, specifying that the
purpose of the notice is to change the party’s address.  For notice purposes, Guarantor agrees to keep
Lender informed at all times of Guarantor’s current address.  Unless otherwise provided or required by law,
if there is more than one Guarantor, any notice given by Lender to any
Guarantor is deemed to be notice given to all Guarantors.

 

No Waiver by Lender.  Lender shall not be deemed to have waived any rights
under this Guaranty unless such waiver is given in writing and signed by
Lender.  No delay or omission on the part
of Lender in exercising any right shall operate as a waiver of such right or
any other right.  A waiver by Lender of a
provision of this Guaranty shall not prejudice or constitute a waiver of Lender’s
right otherwise to demand strict compliance with that provision or any other
provision of this Guaranty.  No prior
waiver by Lender, nor any course of dealing between Lender and Guarantor, shall
constitute a waiver of any of Lender’s rights or of any of Guarantor’s
obligations as to any future transactions. 
Whenever the consent of Lender is required under this Guaranty, the
granting of such consent by Lender in any instance shall not constitute
continuing consent to subsequent instances where such consent is required and
in all cases such consent may be granted or withheld in the sole discretion of
Lender.

 

Successors and Assigns. 
Subject to any limitations stated in this Guaranty on transfer of
Guarantor’s interest, this Guaranty shall be binding upon and inure to the
benefit of the parties, their successors and assigns.

 

DEFINITIONS. 
The following capitalized words and terms shall have the following
meanings when used in this Guaranty. 
Unless specifically stated to the contrary, all references to dollar
amounts shall mean amounts in lawful money of the United States of
America.  Words and terms used in the
singular shall include the plural, and the plural shall include the singular,
as the context may require.  Words and
terms not otherwise defined in this Guaranty shall have the meanings attributed
to such terms in the Uniform Commercial Code:

 

Borrower.  The word “Borrower”
means AWI GAMING, INC. and includes all co-signers and co-makers signing the
Note and all their successors and assigns.

 

6

 

GAAP.  The word “GAAP”
means generally accepted accounting principles.

 

Guarantor.  The word “Guarantor”
means everyone signing this Guaranty, including without limitation AMERICAN
WAGERING, INC., and in each case, any signer’s successors and assigns.

 

Guaranty.  The word “Guaranty”
means this guaranty from Guarantor to Lender.

 

Indebtedness.  The word “Indebtedness”
means Borrower’s indebtedness to Lender as more particularly described in this
Guaranty.

 

Lender.  The word “Lender”
means GREAT BASIN BANK OF NEVADA, its successors and assigns.

 

Note.  The word “Note”
means and includes without limitation all of Borrower’s promissory notes and/or
credit agreements evidencing Borrower’s loan obligations in favor of Lender,
together with all renewals of, extensions of, modifications of, refinancings
of, consolidations of and substitutions for promissory notes or credit
agreements.

 

Related Documents.  The words “Related
Documents” mean all promissory notes, credit agreements, loan agreements,
environmental agreements, guaranties, security agreements, mortgages, deeds of
trust, security deeds, collateral mortgages, and all other instruments,
agreements and documents, whether now or hereafter existing, executed in
connection with the Indebtedness.

 

EACH UNDERSIGNED GUARANTOR ACKNOWLEDGES HAVING READ
ALL THE PROVISIONS OF THIS GUARANTY AND AGREES TO ITS TERMS.  IN ADDITION, EACH GUARANTOR UNDERSTANDS THAT
THIS GUARANTY IS EFFECTIVE UPON GUARANTOR’S EXECUTION AND DELIVERY OF THIS
GUARANTY TO LENDER AND THAT THE GUARANTY WILL CONTINUE UNTIL TERMINATED IN THE
MANNER SET FORTH IN THE SECTION TITLED “DURATION OF GUARANTY”.  NO FORMAL ACCEPTANCE BY LENDER IS NECESSARY
TO MAKE THIS GUARANTY EFFECTIVE.  THIS
GUARANTY IS DATED MAY 5, 2008.

 

	
  GUARANTOR:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  AMERICAN WAGERING, INC.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Victor J. Salerno

  	
   

  	
   

  
	
   

  	
   

  	
  VICTOR J. SALERNO,

  President of AMERICAN

  WAGERING, INC.

  	
   

  	
   

  

 

7

 

CORPORATE ACKNOWLEDGMENT

 

	
  STATE OF NEVADA

  	
  }ss.

  	
   

  
	
  COUNTY OF CLARK

  	
   

  

 

This instrument was acknowledged before me on May 9,
2008 by VICTOR J. SALERNO, President of AMERICAN WAGERING, INC., as designated
agent of AMERICAN WAGERING, INC.

 

 

	
   

  	
   

  	
   

  	
   

  	
  /s/ Karen Marquardt

  
	
   

  	
   

  	
   

  	
   

  	
  NOTARY PUBLIC

  
	
   

  	
   

  	
  [Notary Seal]

  	
   

  	
  Notary Public in and for State
  of

  
	
   

  	
   

  	
   

  	
   

  	
  Nevada

  

 

8Exhibit 10.1

 

EMPLOYMENT
AGREEMENT

 

This Employment Agreement (“Agreement”) is
made and entered as of March 17, 2008 between Angeion Corporation (the “Company”)
and Mr. William J. Kullback (“you”).

 

NOW, THEREFORE, for good and
valuable consideration, the sufficiency of which is hereby acknowledged, you
and the Company hereby agree as follows:

 

1.             Employment.

 

The Company hereby agrees to employ you, and you agree to be employed
by the Company beginning March 17, 2008 as CFO and Senior Vice President
on the terms and conditions set forth in this Agreement.  The provisions of Section 6 and 7 of
this agreement, however, will become effective on June 15, 2008, assuming
your continued employment on that date.

 

At no additional compensation, you will 
serve in such other directorships, Board committee memberships and
offices of the Company and its subsidiaries (including CFO and Senior Vice
President of Medical Graphics) to which you may from time to time be appointed
by the Chief Executive Officer and President of the Company.  You agree to serve the Company faithfully
and, to the best of your ability, to promote the Company’s interest, and to
devote your full working time, energy and skill to the Company’s business.  You may attend to personal business and
investment, engage in charitable activities and community affairs, and serve on
a reasonable number of corporate, educational and civic boards, so long as
those activities do not interfere with your duties under this Agreement.  Your service on any corporate boards on which
you did not serve as of the date hereof is subject to prior approval by the
Chief Executive Officer/President and Board of Directors.

 

You will have such authority, powers, functions, duties, and
responsibilities as are normally accorded executive officers serving in the
capacity in which you serve.  You will
discharge your duties at all times in accordance with any and all policies
established by the Corporation and will report to, and be subject to the direction
of, the Chief Executive Officer and President.

 

2.             Base Salary.

 

(a)           As partial compensation for all of your services (including
services as, committee member or officer of the Company and its subsidiaries)
during your term of employment hereunder, you will receive a base salary at an annual
rate of no less than Two Hundred Thousand Dollars ($200,000), payable in
biweekly installments.  This base salary
will be reviewed annually and subject to increase at the discretion of the
Board.

 

3.             Cash Bonus; Stock Awards and
Options.

 

(a)           As additional compensation for your services, beginning March 17,
2008, you will be eligible to earn cash bonus compensation for each fiscal year
up to a target of 25% of your annual salary and a maximum of 50% of your annual
salary, which 

 

 

percentage targets will be reviewed annually and subject to adjustment
at the discretion the Board.  Bonuses
each year will be determined by the Board of Directors in accordance with a
bonus plan to be established by mutual agreement between the Senior Executive
Team and the Board of Directors for that year. 
Any bonus under this Section 3(a) for fiscal 2008 will be
under the terms of the Angeion 2008 Bonus Program on a pro rata basis from the
Employment Date through October 31, 2008. 
The Angeion 2008 Bonus Program has not yet been finalized by the Angeion
Compensation Committee and Board of Directors.

 

(b)           You will be granted a combination of stock options and
restricted stock grants in an amount commensurate with your position.

 

4.             Fringe Benefits.

 

(a)           You will be eligible to
participate in any and all Company sponsored insurance (including medical,
dental, life and disability insurance), retirement, and other fringe benefit
programs that it maintains for its executive officers, subject to and on a
basis consistent with the terms of each such plan or program.

 

(b)           You
will be eligible for 20 PTO days per calendar year (or such greater amount as
may be granted by the Company), accrued in accordance with Company policy.  You may accrue up to a maximum of 30 PTO days
and may carry forward 20 PTO days from calendar year to year.  Any accrued but unused PTO time will be paid
on any termination in accordance with Company policy.  You will also be entitled to paid holidays in
accordance with such policies as may be implemented from time to time by the
Company for management-level employees generally.

 

(c)           The Company does not guarantee the adoption or continuance
of any particular employee benefit during your employment, and nothing in this
Agreement is intended to, or will in any way, restrict the right of the
Company, to amend, modify or terminate any of its benefits during your
employment.

 

5.             Expenses.  During the term of your employment, the
Company will reimburse you for your reasonable travel and other expenses
incident to your rendering of services in conformity with its regular policies
regarding reimbursement of expenses as in effect from time to time.  Payments to you under this paragraph will be
made upon presentation of expense vouchers in such detail as the Company may from
time to time reasonably require.

 

6.             Term and Termination.

 

(a)           Term.  Your employment with the Company will
continue unless and until terminated in accordance with the terms of this
Agreement.

 

(b)           Termination.  Your employment under this Agreement may be
terminated as follows:

 

2

 

(i)            By your resignation upon
60 days prior written notice to the Company.

 

(ii)           By the Company for Cause (as
defined in this Agreement) immediately upon written notice to you.

 

(iii)          By the Company for any reason
and at any time upon 60 days prior written notice to you.

 

(iv)          By the Company at any time in
the event of your Disability (as defined in this Agreement).

 

(c)           Death.  This Agreement will automatically terminate
upon your death.

 

7.             Consequences of Termination.

 

(a)           Termination for Cause;
Resignation Prior to Change in Control or More Than 18 Months After Change in
Control.  If your employment is terminated at any time
by the Company for Cause or if you resign prior to a Change in Control (as
defined in the separate Change-in-Control Agreement attached hereto (the “Change-in-Control
Agreement”)) or more than 18 months after a Change in Control, then you
will be paid (i) your base salary to the date of termination and (ii) the
unpaid portion of any bonus or incentive amount earned by you for the fiscal
year ending prior to the termination of your employment that you are entitled
to receive under the terms of the annual incentive plan.  You will not be entitled to receive any base
salary or fringe benefits for any period after the date of termination, except
for the right to receive benefits that have become vested under any benefit
plan or to which you are entitled as a matter of law.

 

(b)           Termination without Cause Prior
to Change in Control or More Than 18 Months After Change in Control.  If the Company terminates your employment
without Cause prior to a Change in Control or more than 18 months after a
Change in Control, then:

 

(i)            The Company will pay you a lump
sum equal to 9 months of your current base salary, less applicable tax
withholdings within 20 days of your execution of a release of claims in favor
of the Company, in substantially the form attached as Exhibit A, provided
that you do not revoke or rescind your release as specified therein; and

 

(ii)           The Company will pay the unpaid
portion of any bonus and incentive amounts earned by you for the fiscal year
ending prior to the termination of your employment that you are eligible to
receive under the terms of the applicable bonus and incentive plans; and

 

(iii)          You will be eligible for the
annual incentive bonus for the fiscal year in which your termination
occurs.  If your termination occurs in
the first six months of the Company’s fiscal year, you will be eligible for the
CFO-level bonus for target performance. 
If your termination occurs in the second six months of the 

 

3

 

Company’s fiscal year, you will be eligible
for the greater of: (A) the CFO-level bonus for target performance for the
fiscal year, or (B) if other senior executives receive a bonus for over
target performance for the fiscal year, then you will receive the comparable
CFO-level bonus specified for over target performance for the fiscal year.  In either case, in the event the target goals
have not been set at the time your employment terminates, for purposes of this
paragraph, the target goals in effect for the preceding fiscal year will be
used.  For purposes of this paragraph,
the Company waives any other condition precedent, such as continued
employment.  The annual incentive bonus
you are paid pursuant to this section will be prorated by multiplying by a
fraction, the numerator of which is the number of days you worked in the bonus
period prior to the termination of your employment, and the denominator of
which is the number of days in the bonus period, less any amount of any such
incentive bonus already paid to you in your year of termination, if any.  The pro-rated incentive bonus to be paid
pursuant to this paragraph 7(b)(iii) will be paid only if senior
management of the Company are paid a bonus based on achievement of goals at or
above target for the year in which the termination occurs, and any bonus will
be paid to you at the same time and manner as the bonus is paid to other senior
management of the Company; but payments, if any, must occur within the calendar
year in which the relevant company fiscal year ends.

 

(iv)          You will be eligible to elect
continued group health and life coverage, including medical and dental
coverage, as otherwise required under applicable state continuation law and the
Consolidated Omnibus Budget Reconciliation Act of 1986, 29 U.S.C. §§ 1161-1168;
26 U.S.C. § 4980B(f), as amended, and all applicable regulations (referred to
collectively as “COBRA”).  For this
12-month period, the Company will continue to pay its share of the healthcare
and life insurance premiums for your family coverage and you will be obligated
to pay your share of the cost associated with the coverage as if you were still
actively employed by the Company.  If,
during the 12-month period, you become employed by a third party and eligible
for any health care or life insurance coverage provided by that third party,
the Company will not, thereafter, be obligated to continue to pay this
amount.  You will be responsible for the
full cost of any health care or life insurance coverage after the end of the 12
months.  If, however, on the date your
employment terminates, medical and dental coverage is provided under a plan
that is “self-insured” for purposes of Section 105(h) of the Code,
then in lieu of the Company’s premium contribution, the Company will pay you,
in a single lump sum within 30 days of the date your employment terminates, the
product of: (i) 12 times (ii) the sum of: (A) the monthly
premium cost for these life, medical and dental coverages (based upon the COBRA
rates then in effect) less (B) your monthly contribution out of
compensation for these coverages then in effect.

 

(v)           The Company will pay up to ten
percent of your Base Salary for out placement counseling to you.  Such payments will be made either directly to
the counselor or to you within 30 days after presentation of an invoice for
services 

 

4

 

rendered or to be rendered.  No payment will be made for services to be
rendered more than two years after the Date of Termination.

 

(c)           Termination in the Event of
Death or Disability.  If your employment terminates due to your
death or if the Company terminates your employment due to Incapacity at any
time, then

 

(i)            The Company will continue to pay
your base salary to your estate or to you for the remainder of the month in
which your death occurs or in which your employment is terminated due to Incapacity,
together with the unpaid portion of any bonus or incentive amount earned by you
for the fiscal year ending prior to the termination of your employment that you
are entitled to receive under the terms of the applicable incentive plan; and
in the event of termination due to Disability, you will continue to receive,
during that month, all of the fringe benefits then being paid or provided to
you;

 

(ii)           The Company will pay you an
annual incentive bonus for the fiscal year in which the termination occurs
calculated as set forth in Section 7(b)(iii) above.

 

(iii)          You will be eligible to receive
all disability and other benefits, such as continued health coverage or life
insurance proceeds, provided in accordance with the terms and conditions of the
health care coverage, life insurance, disability, or other employee benefit
plans of the Company and applicable law.

 

(d)           Termination Within
18 Months After Change in Control.  If, within 18
months after a Change in Control, your employment terminates, your rights will
be governed by the Change-in-Control Agreement attached hereto and executed
concurrently herewith.  After the
expiration of such 18-month period, you rights will again be governed solely by
this agreement.

 

(e)           Benefits.  The benefits provided you under this Section 7
or in the Change in Control Agreement are in lieu of any benefits that would
otherwise be provided to you under any severance pay or other policies of the
Company.  In the event you are entitled
to benefits under the Change in Control Agreement, you will not be entitled to
any benefits under this Section 7. 
Nothing in this Employment Agreement affects the vesting, exercisability
or other terms of any stock option or other equity grant, or other benefits
vested as of the date of termination, and all stock options and other grants
and benefits are covered by the terms of the grants and the plans under they
were issued.

 

(f)            Release.  Notwithstanding any other provision of this
Agreement, you are not entitled to any compensation or benefits under this Section 7
or under the Amended Change in Control Agreement, other than compensation
through the date of termination and benefits previously vested, unless and
until you sign a release of claims in favor of the Company, in substantially
the form as attached as Exhibit A, and provided further that you do not
revoke or rescind your release as specified therein.  Further, the Company will 

 

5

 

not be required to begin making any payments to you under this Section 7
or under the Amended Change in Control Agreement until the expiration of the
rescission and revocation periods set forth in the release of claims.

 

(g)           Agreement by Medical Graphics
Corporation.  The Company has responsibility for benefits
to which you or any other person are entitled pursuant to this Section 7
but to the extent the Company is unable or unwilling to provide such benefits,
Medical Graphics Corporation will be jointly and severally responsible
therefore to the extent permitted by applicable law.

 

8.             Withholding by Company.  You authorize the Company to withhold, report
and transmit to each tax authority all income, employment and excise tax
required to be withheld from any amounts payable under this Agreement.  You, and not the Company, will be solely
responsible for any and all taxes, including but not limited to, excise taxes
under Sections 280G and 409A of the Code, in excess of any required tax
withholding under the preceding sentence.

 

9.             No Mitigation.  Following termination of your employment for
any reason you will be under no obligation to mitigate your damages by seeking
other employment, and there will be no offset against the amounts due you under
Section 7, except as specifically provided in Section 7(b)(iii) or
for any claims which the Company may have against you.

 

10.           Property Rights,
Confidentiality, Non-Solicit and Non-Compete Provisions.

 

(a)           Company’s Property.

 

(i)            You must promptly disclose to
the Company in writing all inventions, discoveries, and works of authorship,
whether or not patentable or copyrightable, that are conceived, made,
discovered, written, or created by you alone or jointly with another person,
group, or entity, whether during the normal hours of employment at the Company
or on your own time, during the term of this Agreement.  You agree to assign all rights to all such
inventions and works of authorship to the Company.  You further agree to give the Company any of
the assistance it reasonably requires in order for the Company to perfect, protect
and use its rights to inventions and works of authorship.

 

This provision does not apply to an invention,
discovery, or work of authorship for which no equipment, supplies, facility, or
trade secret information of the Company was used and that was developed
entirely on your own time and that does not relate to the business of the
Company, to the Company’s anticipated research or developments, or does not
result from any work performed by you for the Company.

 

(ii)           You may not remove any records,
documents, or any other tangible items (excluding your personal property) from
the premises of the Company in either original or duplicate form, except as is
needed in the ordinary course of conducting business for the Company.

 

6

 

(iii)          Upon termination of employment
with the Company, or at any other time upon the Company’s request, comply with
the requirements of Section 13 herein.

 

(b)           Confidential Information.

 

(i)            Purpose and Scope.  The Company will, in the course of your
employment, rely upon you for and impart and disclose to you in confidence
Confidential Information, as hereinafter defined.  You acknowledge that the Company operates in
a competitive environment and that the Company has an interest in protecting
its Confidential Information.  In
consideration of your employment hereunder and the benefits set forth in this
Agreement, you agree to (1) maintain the confidentiality of the Company’s
Confidential Information and (2) use the Company’s Confidential Information
for the exclusive benefit of the Company, as set forth below.

 

(ii)           Confidential
Information/Nondisclosure.  You understand and agree that as an employee
of the Company, you will receive and contribute to Confidential
Information.  You agree that at all times
during your employment and after the termination thereof for any reason
whatsoever, you will keep secret Confidential Information and that you will not
use or disclose the same except as such use or disclosure may be required in
connection with your work for the Company, or unless the Company first
expressly authorizes such disclosure in writing, or unless such disclosure is
compelled by law or legal process.  You
acknowledge that the Company’s Confidential Information constitutes a unique and
valuable asset of the Company and represents a substantial investment of time
and expense by the Company and that any improper disclosure or other use of
such knowledge or information other than for the sole benefit of the Company
would be wrongful and would cause irreparable harm to the Company.

 

(iii)          Assignment.  You hereby assign to the Company any rights
you may have or acquire in the Confidential Information and recognize that all
of the Confidential Information is and will be the sole property of the Company
and its successors and assigns.

 

(iv)          Definition.  For purposes of this Agreement, “Confidential
Information” means any and all information in whatever form, whether written,
electronically stored, orally transmitted or memorized pertaining to:  trade secrets; customer lists, records and
other information regarding customers; price lists and pricing policies,
financial plans, records, ledgers and information; purchase orders, agreements
and related data; business development plans; products and technologies;
product tests; manufacturing costs; product or service pricing; sales and
marketing plans; research and development plans; personnel and employment
records, files, data and policies (regardless of whether the information
pertain to you or other employees of the Company); tax or financial
information; business and sales methods and operations; business
correspondence, memoranda and other records; inventions, improvements and
discoveries; processes and methods; 

 

7

 

and business operations and related data
formulae; computer records and related data; know-how, research and
development; trademark, technology, technical information, copyrighted
material; and any other confidential or proprietary data and information which
you encounter during employment, all of which are held, possessed or owned by
the Company and all of which are continually used in the operations and
business of the Company.  The
compilation, manipulation or other exploitation of generally known information
may constitute Confidential Information. 
Confidential Information does not include knowledge or information that
is now or subsequently becomes generally known within the Company’s industry
other than as a direct or indirect result of the breach of this Agreement by
you.

 

(c)           Non-Solicitation of Clients.  During your employment, and for 12 months
after the date on which you are no longer employed by the Company (for any
reason), in any capacity, you may not, directly or indirectly, divert, solicit
or accept business from any client or prospective client of the Company for
business relating to (a) the manufacture or sale of cardio respiratory
diagnostic devices to the (i) clinical research, (ii) hospital,
physician office and clinic or (iii) health & fitness markets or (b) any
other business in which the Company is then engaged and was engaged on the date
of your termination.  You also may not,
directly or indirectly, in any way interfere, or attempt to interfere, with the
Company’s relationships with any of its actual or potential vendors or
suppliers.

 

(d)           Non-Solicitation of Employees.  During your employment, and for 12 months
after the date in which you are no longer employed by the Company (for any
reason), in any capacity, you may not, directly or indirectly, attempt to hire
away any then-current employee of the Company or any subsidiary or to persuade
any such employee to leave employment with the Company or any subsidiary.

 

(e)           Non-Competition.  During your employment and for 12 months
after  the date in which you are no
longer employed by the Company in any capacity, you may not engage or
participate, either individually or as an employee, consultant or principal,
partner, agent, trustee, officer or director of a corporation, partnership, or
other business entity, in any business which competes with the Company relating
to (a) the manufacture or sale of cardio respiratory diagnostic devices to
(i) clinical research, (ii) hospital, physician office and clinic or (iii) health &
fitness markets or (b) any other business in which the Company or any
subsidiary of the Company (to the extent that the Company has more than a 20
percent equity interest in the subsidiary) Company is then engaged and was
engaged on the date of your termination. 
Mere ownership by you of not more than 5% of the outstanding common
stock of a company the securities of which are publicly traded will not
constitute competition for purposes of this Section 9(e).

 

The provisions of this Section 10 survive the termination of this
Agreement.

 

11.           Arbitration.  Except as provided in Section 12, any
disputes arising under or in connection with this Agreement (including without
limitation the making of this Agreement) must be resolved by final and binding
arbitration to be held in Minneapolis, 

 

8

 

Minnesota in accordance with the rules and procedures of the
American Arbitration Association.  The
parties will select a mutually agreeable single arbitrator to resolve the dispute
or if they fail or are unable to do so, each side will within the following 10
business days select a single arbitrator and the two so selected will select a
third arbitrator within the following 10 business days.  The arbitration award or other resolution may
be entered as a judgment at the request of the prevailing party by any court of
competent jurisdiction in Minnesota or elsewhere.  The arbitrator may construe or interpret, but
may not ignore or vary the terms of this Agreement, and will be bound by
controlling law.  Each party will bear
its own costs and attorneys’ fees in connection with the arbitration; provided,
however, that the Company will pay 75%, and you will pay 25%, of the costs and
expenses of the arbitrator(s) and any administrative or other fees
associated with such arbitration.

 

12.           Injunctive/Declaratory Relief.  You acknowledge and agree that the services
to be rendered by you hereunder are of a special character, and that any
violation of Section 9 hereof could be highly injurious to the Company,
and that it would be extremely difficult to compensate the Company fully for
damages for any such violation. 
Accordingly, the parties specifically agree that the Company will be
entitled to temporary and permanent injunctive relief to enforce the provisions
of Section 9 hereof and that you are entitled to seek declaratory relief
to resolve any disputes or interpretations regarding Section 9
hereof.  Any such relief may be granted
without the necessity of proving actual damages and without necessity of
posting any bond.  This provision with
respect to injunctive and declaratory relief will not, however, diminish the
right of either party to claim and recover damages, or to seek and obtain any
other relief available to it at law or in equity, in addition to such
injunctive or declaratory relief.

 

13.           Surrender/Disposition of Records
and Property.  Upon termination of your employment with the
Company, you must deliver promptly to the Company all records, manuals, books,
blank forms, documents, letters, memoranda, notes, notebooks, reports, computer
disks, computer software, computer programs (including source code, object
code, on-line files, documentation, testing materials and plans and reports)
designs, drawings, formulae, data, tables or calculations or copies thereof,
which are the property of the Company or any subsidiary or which relate in any
way to the business, products, practices or techniques of the Company or any
subsidiary, and all other property, trade secrets and Confidential Information
of the Company, including, but not limited to, all tangible, written,
graphical, machine readable and other materials (including all copies) which in
whole or in part contain any trade secrets or Confidential Information of the
Company which in any of these cases are in your possession or under your
control.  Notwithstanding any other
provisions to the contrary, however, you may retain electronic contact
information from your Outlook or other electronic address book (e.g. name,
addresses, phone numbers) for your personal and business contacts.  Moreover, the Company agrees that upon your
termination, and subject to appropriate monitoring of the process by the
Company, you may copy personal information that you have maintained on the free
standing back-up hard drive in your office and that that after you do so, all
information on such hard drive will be deleted.

 

9

 

14.           Definitions.  For purposes of this Agreement, the following
terms will have the meanings set forth below:

 

(a)           Cause.  “Cause” has the meaning given to it in the
Amended Change in Control Agreement.

 

Incapacity.  “Incapacity” means, provided that you have
first exhausted your entitlement to any applicable disability-related leaves of
absence, your inability to perform the essential functions, duties and
responsibilities contemplated under this Agreement, with or without reasonable
accommodation, for a period of more than 90 consecutive days due to physical or
mental incapacity or impairment.

 

15.           General Provisions.

 

(a)           This Agreement may not be amended or modified except by a
written agreement signed by both of us.

 

(b)           In the event that any provision or portion of this agreement
is determined to be invalid or unenforceable for any reason, the remaining
provisions of this Agreement will remain in full force and effect to the
fullest extent permitted by law.

 

(c)           This Agreement will bind and benefit the parties hereto and
their respective successors and assigns, but none of your rights or obligations
hereunder may be assigned by either party hereto without the written consent of
the other, except by operation of law upon your death.

 

(d)           This Agreement has been made in and shall be governed and
construed in accordance with the laws of the State of Minnesota without giving
effect to the principles of conflict of laws of any jurisdiction.

 

(e)           No failure on the part of either party to exercise, and no
delay in exercising, any right or remedy under this Agreement will operate as a
waiver; nor will any single or partial exercise of any right or remedy preclude
any other or further exercise of any right or remedy.

 

(f)            Any notice or other
communication under this Agreement must be in writing and will be deemed given
when delivered in person, by overnight courier (with receipt confirmed), by
facsimile transmission (with receipt confirmed by telephone or by automatic
transmission report), or upon receipt if sent by certified mail, return receipt
requested, as follows (or to such other persons and/or addresses as may be
specified by written notice to the other party):

 

10

 

If to Angeion
Corporation:

 

Angeion Corporation

Attention:  Sheryl A. Rapheal, Vice President Human
Resources and Administration

350 Oak Grove Parkway

St. Paul, MN 55127

 

If to William J.
Kullback:

 

William J. Kullback

18020 33rd Place North

Plymouth, MN 55447

 

(g)           This Agreement, the Change-in-Control Agreement and the
stock option agreements ancillary hereto, contains our entire understanding and
agreement with respect to these matters and supersedes all previous agreements,
discussions, or understandings, whether written or oral, between or on the same
subjects.

 

(h)           In the event any provision of this Agreement is held
unenforceable, that provision will be severed and shall not affect the validity
or enforceability of the remaining provisions. 
In the event any provision is held to be overbroad, that provision shall
be deemed amended to narrow its application to the extent necessary to render
the provision enforceable according to applicable law.

 

(i)            All terms of this Agreement
intended to be observed and performed after the termination of this Agreement
will survive such termination and will continue in full force and effect
thereafter, including without limitation, Section 7, Consequence of
Termination; Section 8, No Mitigation; Section 9, Property Rights,
Confidentiality, Non-Solicit and Non-Compete Provisions; Section 10,
Arbitration; Section 11, Definitions; and Section 12, General Provisions.

 

(j)            The headings contained in this
Agreement are for convenience only and in no way restrict or otherwise affect
the construction of the provisions hereof. 
Unless otherwise specified herein, references in this Agreement to
Sections or Exhibits are to the sections or exhibits to this Agreement.  This Agreement may be executed in multiple
counterparts, each of which is an original and all of which together will
constitute one and the same instrument.

 

If the foregoing correctly sets forth your understanding of our
agreement, please indicate so by signing and returning to us a copy of this
letter.

 

	
   

  	
  Very truly
  yours,

  
	
   

  	
   

  
	
   

  	
  ANGEION
  CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Rodney A. Young,
  Chief Executive Officer

  
	
   

  	
  and President
  (date)

  

 

11

 

	
  Accepted and agreed to:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  William J. Kullback

  	
   

  

 

12

 

EXHIBIT
A

 

GENERAL
RELEASE

 

This General Release (“General Release”) is made and entered into by
William J. Kullback (“you”) and Angeion Corporation (the “Company”).

 

WHEREAS, you and
Company are parties to an Employment Agreement, dated March 17, 2008, and
a Change in Control Agreement to be June 17, 2008 (collectively, the “Agreements”);

 

WHEREAS, under the
terms of the Agreements, which you agree are fair and reasonable, you agreed to
enter into this General Release;

 

NOW, THEREFORE, in
consideration of the provisions and the mutual covenants contained herein and
in the Agreements, the parties agree as follows:

 

1.                                       General
Release of the Company.  You settle
and waive any and all claims you have or may have against the Company, its
subsidiaries, affiliates, and related companies, and its current or former
directors, officers, attorneys, insurers, employees, contractors, and agents
(collectively, the “Released Parties”) for any act or omission that has
occurred up through the date of execution of this General Release, including
but not limited to, any and all claims resulting from the Company’s hiring of
you, your employment with the Company or the cessation of your employment with
the Company.

 

For the consideration expressed herein, you understand that while you
retain the right to pursue an administrative action through an agency such as
the Equal Employment Opportunity Commission
(“EEOC”) or the Minnesota Department of Human Rights (“MDHR”), you hereby
release and discharge the Released Parties from all liability for damages,
affirmative or equitable relief, judgments, or attorneys’ fees whether brought
by you or on your behalf by any other party, governmental or otherwise.  Aside from the EEOC or MDHR, as discussed
above, you agree not to institute any claim for damages, affirmative or
equitable relief, judgments, or attorneys’ fees, nor authorize or assist any
other party, to recover damages, affirmative or equitable relief, judgments, or
attorneys’ fees on your behalf via administrative or legal proceedings against
the Released Parties.

 

You do hereby release and discharge the Released Parties from any and
all statutory claims, including, but not limited to, any claims arising under
or based on Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. §
2000e et seq.; 42 U.S.C. § 1981; the Age Discrimination in Employment
Act (including The Older Worker Benefit Protection Act), 29 U.S.C. § 621 et
seq.; the Family and Medical Leave Act, 29 U.S.C. § 2601 et seq.;
the Americans with Disabilities Act, 42 U.S.C. § 12101 et seq.; the Fair
Labor Standards Act, 29 U.S.C. § 201 et seq.; the Employee Retirement
Income Security Act of 1974, as amended, 29 U.S.C. § 1001 et seq.; the
Minnesota Human Rights Act, Minn. Stat. §363.01 et seq.; Minn. Stat.
§181.81 and any other federal or state constitutions; federal, state or local
statute, or any contract, quasi contract, common law or tort claims, whether
known or unknown, suspected or unsuspected, concealed or 

 

13

 

hidden, or whether developed or undeveloped, up
through the date of your execution of this General Release.

 

This General Release also specifically encompasses any and all claims
grounded in contract or tort theories, including, but not limited to: breach of
contract  (including but not limited to
any claims that you may have under the Agreements), tortious interference with
contractual relations; promissory estoppel; breach of the implied covenant of
good faith and fair dealing; breach of employee handbooks, manuals, or other
policies; wrongful discharge; wrongful discharge in violation of public policy;
assault; battery; fraud; false imprisonment; invasion of privacy; intentional
or negligent misrepresentation; defamation, including libel and slander, discharge
defamation and self-defamation; intentional or negligent infliction of
emotional distress; negligence; breach of fiduciary duty; negligent hiring,
retention or supervision; whistleblower claims; unpaid wages (including but not
limited to any claims for bonuses, severance and vacation pay) and any other
contract or tort theory based on either intentional or negligent conduct of any
kind, including any attorneys’ fees, liquidated damages, punitive damages, and
any costs or disbursements that could be awarded in connection with these or
any other common law claims.

 

It is a further condition of the consideration hereof and is your
intention in executing this General Release that the same will be effective as
a bar as to each and every claim, demand and cause of action herein above
specified.  You acknowledge that you may
hereafter discover claims or facts in addition to or different from those which
you now know or believe to exist with respect to the subject matter of this
General Release and which, if known or suspected at the time of executing this
General Release, may have materially affected this settlement.  Nevertheless, you hereby waive any right,
claim or cause of action that might arise as a result of such different or
additional claims or facts.  You
acknowledge that you understand the significance and consequence of such
release and specific waiver.

 

You do not waive any claims that you may have which arise out of facts
or events that occur after the date on which you sign this General Release,
claims for indemnification, if applicable, or for compensation and benefits to
which you are eligible under your Amended Employment Agreement and your Amended
Change-In Control Agreement, or any benefit plan or program of the Company.

 

Notwithstanding any of the forgoing provisions, this General Release
does not apply to and does not modify, expand or reduce any obligation of the
Company to indemnify you from any claims arising out of the performance of your
services as an employee or officer of the Company to the fullest extent
provided by applicable law and under the Company’s by-laws, if broader than
applicable law.  Nothing herein is
intended to expand, reduce or limit the Company’s obligations to provide the
benefit of insurance coverage maintained by the Company (including D&O
coverage) for you in connection with claims based on actions or omissions of
you during the period of your employment with the Company.

 

14

 

2.                                       Rescission.  You have been informed of your right to
rescind this General Release by written notice to the Company within 15
calendar days after you execute this General Release.  You have been informed and understands that
any such rescission must be in writing and delivered to the Company by hand, or
sent by mail within the 15-day time period. 
If delivered by mail, the rescission must be:  (1) postmarked within the applicable
period and (2) sent by certified mail, return receipt requested, to
Angeion Corporation, Attention:  Chairman
of the Board of Directors, 350 Oak Grove Parkway, St. Paul, MN  55127. 
If you rescind this General Release, the Company will have no
obligations under the Agreements to you or to anyone whose rights derive from
you.

 

3.                                       Acceptance
Period; Advice of Counsel.  The terms
of this General Release will be open for acceptance by you for a period of 21
days from receipt, during which time you may consider whether or not to accept
this General Release.  You agree that
changes to this General Release, whether material or immaterial, will not
restart this acceptance period.  You are
hereby advised to seek the advice of an attorney regarding this General
Release, which you have done.

 

4.                                       General
Release by the Company.  The Company
settles, releases, and waives any and all claims it has or may have against you
for any act or omission that has occurred up through the date of execution of
this General Release, including but not limited to any relating to or arising
out of your employment with the Company or your service as an officer or  director of the Company, or in any other
capacity with the Company.  This is a
release of all claims, whether based on contract, tort, federal, state, or
local statute or regulation or upon any other theory.  It is further a release of all claims for
relief, including but not limited to all claims for compensatory, punitive,
liquidated, and all other damages, penalties, 
attorneys’ fees, costs or disbursements and all other equitable and
legal relief that could be awarded in connection with these or any other
claims.

 

It is a further condition of the consideration hereof and is the
Company’s  intention in executing this
General Release that the same will be effective as a bar as to each and every
claim, demand and cause of action herein above specified.  The Company 
acknowledges that it  may
hereafter discover claims or facts in addition to or different from those which
it now knows or believes to exist with respect to the subject matter of this
General Release and which, if known or suspected at the time of executing this
General Release, may have materially affected this settlement.  Nevertheless, the Company hereby waives any
right, claim or cause of action that might arise as a result of such different or
additional claims or facts.  The Company
acknowledges that it understands the significance and consequence of such
release and specific waiver.

 

The Company does not waive any claims that it may have that arise out
of facts or events that occur after the date on which it signs this General Release,
including specifically claims for breach of your post termination obligations
under your Amended Employment Agreement and the Amended Change-In Control
Agreement.

 

5.                                       Representation
By You.  You represent and warrant
that you have not engaged in any activity which would constitute willful
misconduct conduct including, but 

 

15

 

not limited to, fraud, knowing
material misrepresentation, or knowing violation of any federal, state or local
law.  In executing this General Release,
the Company has relied on the representations by you in this Paragraph 5.  These representations are material terms of
this General Release.  YOU HEREBY ACKNOWLEDGE AND STATE THAT YOU HAVE READ
THIS GENERAL RELEASE.  YOU FURTHER REPRESENT
THAT THIS GENERAL RELEASE IS WRITTEN IN LANGUAGE WHICH IS UNDERSTANDABLE TO
YOU, THAT YOU FULLY APPRECIATE THE MEANING OF ITS TERMS, AND THAT YOU ENTER
INTO THIS GENERAL RELEASE FREELY AND VOLUNTARILY.

 

6.                                       Governing
Law.  The parties agree that Minnesota
law will govern the construction and interpretation of this General Release.

 

IN WITNESS WHEREOF,
the parties have authorized, executed, and delivered this General Release.

 

 

	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
    William J.
  Kullback

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  	
    ANGEION CORPORATION

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
    By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Its:

  	
   

  

 

16

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