Document:

ex10_2.htm

Exhibit 10.2

 

SEPARATION AGREEMENT, INCLUDING GENERAL RELEASE

 

I.           This Separation Agreement, Including General Release (“Agreement”), together with the additional release of all claims in the form attached as Exhibit "A" ("Additional Release") covers all understandings among Patricia K. Fletcher (“Executive”), AV Homes, Inc. f/k/a Avatar Holdings Inc. (“Company”) and Avatar Properties Inc. (“Avatar”) relating to Executive’s employment and separation from employment with Avatar.

II.           Executive’s last day of employment will be October 31, 2012 (the “Termination Date”), and after that date the only payments or other things of value which Executive will be entitled to receive are those set forth in this Agreement, except that any amounts due to Executive under any retirement plans will be paid according to the terms of the plans.  Executive acknowledges and agrees that Executive is not entitled to any separation pay whatsoever without entering into this Agreement and without executing and not revoking the Additional Release.

III.         Effective at midnight on September 30, 2102 Executive resigns from all officer and director positions at the Company, Avatar and their affiliates except for the position of Executive Vice President of Avatar.  Effective at midnight on October 31, 2012, Executive resigns as Executive Vice President of Avatar.

IV.         Effective September 30, 2012 at midnight, (i) the Second Amended and Restated Employment Agreement dated as of September 29, 2011, among Company, Avatar and Executive shall be of no further force and effect and (ii) the Stock Award Agreement between Company and Executive dated as of September 29, 2012 shall be of no further force or effect.

 

V.           In consideration of the agreements set forth herein and conditioned upon Executive executing and not revoking the Agreement and Additional Release, Company and Avatar agree that:

	
  

	
A.

	
Effective as of the Termination Date, pursuant to the Company’s Amended and Restated 2005 Executive Incentive Plan (2011 Restatement), Company shall grant Executive 9,000 unrestricted shares in Company;

	
  

	
B.

	
Effective as of the Termination Date, Avatar agrees to pay Executive a Performance Bonus for 2012 in the amount of $243,750.  Payment will be made on the next payday after Avatar’s (i) receipt of the executed and unrevoked Agreement and the expiration of the seven (7)-day revocation period contained in Paragraph XXI of the Agreement and (ii) the receipt of the executed and unrevoked Additional Release and the expiration of the seven (7)-day revocation period contained in Paragraph VIII of the Additional Release; and

	
  

	
C.

	
In considerations of Executive’s outstanding efforts on behalf of the Company since she began her employment in 2007, her willingness to continue to perform all of her duties after her tender of resignation through September 30, 2012 and her agreement to assist with transition issues through the Termination Date, Avatar agrees to pay Executive a Special Bonus Award in the amount of $300,000.  Payment will be made on the next payday after Avatar’s (i) receipt of the executed and unrevoked Agreement and the expiration of the seven (7)-day revocation period contained in Paragraph XXI of the Agreement and (ii) the receipt of the executed and unrevoked Additional Release and the expiration of the seven (7)-day revocation period contained in Paragraph VIII of the Additional Release; and

  

  

  

 

	
  

	
D.

	
For avoidance of doubt, it is understood that (i) in order for Executive to receive the payments and/or benefits set forth in Sections V.B.-C. hereof, this Agreement and Additional Release must become irrevocable no later than November 30, 2012; and (ii) in addition to the timing of payment provisions of  Sections V.B.-C. hereof, the payments and/or benefits due to Executive under Sections V.B.-C. shall be made no later than December 31, 2012.

VI.         Subsequent to the Termination Date, Executive will be eligible to elect to continue coverage under the group health plan under COBRA, in accordance with normal COBRA rules.  Information about Executive’s  COBRA rights will be mailed to Executive’s  most recent address on file with Avatar in the near future.

VII.        In exchange for the promises which Avatar makes in this Agreement, Executive agrees:

 

  A.           To release and forever discharge Company and Avatar, its past and present directors, shareholders, officers, members, principals, employees, contractors, agents, subsidiaries, divisions, predecessors, parents, insurers, affiliated entities, successors, transferees and assigns, and their personal representatives, heirs, and attorneys (collectively referred to as the "Released Parties") from any and all claims, demands or liabilities whatsoever, whether known or unknown, which Executive ever had or may now have against the Released Parties, from the beginning of time to the date of this Agreement.  This Agreement includes, without limitation, any claims, demands or liabilities relating to or arising out of Executive’s employment with Avatar or separation of employment with Avatar pursuant to any federal, state, or local employment laws, regulations, ordinances, or executive orders prohibiting, among other things, age, race, color, sex, national origin, religion, marital status, familial status, sexual orientation, and disability discrimination.

	
  

	
1.

	
This release includes, but is not limited to, any and all actions claims and demands under:

 

	
the Age Discrimination Employment Act (the “ADEA”) as amended, and the Older Workers Benefit Protection Act (“OWBPA”) 29 U.S.C. Section 623, et seq.;

	
Title VII of the Civil Rights Act of 1964, 42 U.S.C. Section 2000e, et seq. as amended;

	
the Americans with Disabilities Act 42 U.S.C. Section 12101, et seq. (the “ADA”), as amended;

	
the Equal Pay Act of 1963, 29 U.S.C. Section 206(d);

	
the Family and Medical Leave Act, as amended, 29 U.S.C. Section 2601, et seq. (the “FMLA”);

	
COBRA, as amended, 29 U.S.C. Section 1161, et seq.;

	
the Worker Adjustment and Retraining Notification Act, 29 U.S.C. Section 2101, et. seq. (“WARN”);

	
Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1514A; et seq.

	
42 U.S.C. Sections 1981 through 1988;

	
the National Labor Relations Act, 29 U.S.C. Section 151, et seq.,

	
the Immigration Reform and Control Act;

	
the Uniform Services Employment and Reemployment Rights Act of 1994;

	
the Employee Retirement Income Security Act of 1974 (“ERISA”) as amended, 29 U.S.C. Section 1001, et seq. (excluding any vested benefits under any Employee Retirement Plan);

  

  

  

	
the Fair Credit Reporting Act;

	
the Rehabilitation Act of 1973;

	
the Genetic Information Nondiscrimination Act of 2008;

	
the Florida and Federal Constitutions;

	
the Florida Human Rights Act of 1977 and the Florida Civil Rights Act of 1992 as amended, Chapter 760 Florida Statutes;

	
the Florida Whistleblower’s Act, Fla. Stat. Section 448.101, et seq.;

	
Florida Workers’ Compensation Retaliation Statute, Fla. Stat. Section 440.205;

	
Florida’s Wage Payment laws, Fla. Stat. Section 448.07;

	
the Florida Minimum Wage Act, Fla. Stat. Section 448.110;

	
the Florida Wage Discrimination Law, Fla. Stat. Section 448.07;

	
the Florida Equal Pay Law;

	
the Florida AIDS Act, Fla. Stat. Sections 10.1125, 381.00 and 760.50;

	
Florida Discrimination on Basis of Sickle Cell Trait Law, Fla. Stat. Section 448.075; and

	
any other federal, state or local statute, executive order regulation or ordinance relating to or dealing with unpaid wages, employment, employment discrimination, retaliation, conspiracy, tortious or wrongful discharge.

	
  

	
2.

	
This release also includes, but is not limited to:  (i) any and all actions, claims and demands for wrongful discharge, future wage loss, employee benefits, bonuses, stock options, attorneys’ fees and costs, penalties and damages of all types, including, but not limited to, punitive and compensatory damages; emotional distress damages; breach of any employment contract (whether express or implied) among Executive, Company and Avatar; and (ii) any and all actions, claims and demands for tort damages (whether intentional or negligent) and/or personal injury as a result of Executive’s  employment or Executive’s termination of employment by Avatar, such as defamation, fraud, misrepresentation, assault, battery, negligence, negligent supervision, hiring, or retention, detrimental reliance, intentional or negligent infliction of emotional distress, breach of a covenant of good faith and fair dealing, and any other offense.  The foregoing list is meant to be illustrative rather than exhaustive.

  B.           That no rights or claims after the date this Agreement is signed are waived, including, but not limited to rights or claims arising under the ADEA.

  C.           In exchange for the promises which Executive make in this Agreement, the Released Parties agree to release and forever discharge Executive and Executive’s personal representatives, heirs and attorneys, from any and all claims demands or liabilities, whatsoever, whether known or unknown which Released Parties ever had or may now have against Executive and/or Executive’s personal representatives, heirs and attorneys, from the beginning of time to the date of this Agreement. This Agreement includes, without limitation, any claims, demands or liabilities relating to or arising out of Executive’s employment with Avatar or separation of employment with Avatar pursuant to any federal, state, or local employment laws, regulations, ordinances, or executive orders.

  

  

  

  D.           Executive shall not sue any or all of the Released Parties, except in the event that the Company or Avatar breaches this Agreement or where Executive challenges the validity of this Agreement under the Older Workers Benefit Protection Act.  Nothing, however, herein precludes Executive from participating in or filing a charge or complaint with any federal, state, or local government agency.  However, with respect to such claims Executive is waiving, not only Executive’s  right to recover money or other legal not equitable relief in any action that Executive might institute, but Executive also is waiving Executive’s  right to recover money or other legal not equitable relief in any action that might be brought on Executive’s  behalf by any other person or entity including, but not limited to, the State of Florida, the United States Equal Employment Opportunity Commission (“EEOC”), the Department of Labor (“DOL”), or any other (U.S. or foreign) federal, state, or local agency or department.

  E.           That Executive has been paid and/or received all of Executive’s  past wages including overtime, compensation, bonuses, commissions, leave payments and/or and benefits due as of the date of this Agreement and that no such additional amounts are due Executive.

  F.           That Executive reported all hours worked as of the date Executive signed the Agreement and has not filed any claims, complaints, charges, lawsuits or other proceedings against any of the Released Parties with any governmental agency, arbitrator, or any court.  Executive also represents that Executive does not intend to bring any claims on Executive’s  own behalf or on behalf of any other person or entity against Released Parties.  Executive further represent that Executive has not assigned or transferred, or purported to have assigned or transferred, to any entity or person any dispute released by Executive in this Agreement.

  G.            Executive affirms that Executive has not been retaliated against for reporting any allegations of wrongdoing by Released Parties.

 

  H.           Executive affirms that all of the Released Parties’ decisions regarding Executive’s pay and benefits through the date of Executive’s execution of this Agreement were not discriminatory based on age, disability, race, color, sex, religion, national origin or any other classification protected by law.

 

VIII.      Prior to the Termination Date, Executive will return to Avatar all Avatar non-public information and property whether on paper, stored electronically, or otherwise including, but not limited to, confidential, proprietary and/or trade secret materials, documents, reports, files, manuals, memoranda, records, credit cards, computers, cardkey passes, door and file keys, computer access codes, computer passwords, software, data, programs, computer disks, cell phones, corporate credit cards, and other information or property belonging to Avatar or which Executive received, prepared or helped prepare in connection with Executive’s  employment.  Executive further acknowledge that Executive will not retain any copies, duplicates, reproductions, or excerpts thereof.  Executive agrees that Executive will not access, or attempt to access, by any means, any of Avatar’s computer systems except as permitted by the Company or Avatar.  Executive agrees that, in the event Executive discovers any other property of Avatar in Executive’s  possession after the Termination Date, Executive will immediately return such property to Avatar. Notwithstanding the foregoing, Avatar and Executive have agreed that Executive may keep confidential materials after the Termination Date as outside counsel on the Poinciana Parkway and any other matters designated by the Company or Avatar prior to the Termination Date.

IX.         Executive affirms that Executive has been granted any leave to which Executive was entitled under the Family and Medical Leave Act or related state or local leave or disability accommodation laws.  Executive also agree Executive has no known unreported workplace injuries or occupational diseases.

  

  

  

 

X.         Executive further agrees that Executive will not ever personally, or on behalf of any other firm, corporation, person or persons, divulge or use any trade secrets, confidential, proprietary or competitive business information that Executive may have acquired or developed during Executive’s  employment relationship with Avatar.  Such protected non-public information includes, but is not limited to, financial data, investment data, sales data, employee data, business plans, business manuals, handbooks, methods of doing business, marketing and promotion methods, trade secrets, technical information or manuals, information of a proprietary nature, customer information derived from the customers, customer lists, contracts, lead slips, invoices, or any other confidential or proprietary information obtained by Executive through Executive’s  employment with Avatar.

XI.        Executive acknowledges and agrees that the covenants and undertakings contained in Paragraph X of this Agreement relates to matters that are of a special, unique and extraordinary character and that a violation or breach of any term of Paragraph X of this Agreement will cause irreparable injury to Company and Avatar, the amount of which will be impossible to estimate or determine and which cannot be adequately compensated. Therefore, Executive agrees that Avatar shall be entitled, as a matter of course, to an injunction, restraining order, writ of mandamus or other equitable relief from any court of competent jurisdiction, restraining any actual or threatened violation of any covenant in Paragraph X of this Agreement by Executive and such other persons as the court shall order.

XII.       Nothing in Paragraph XI shall be construed to limit or prohibit Avatar from seeking any other remedies, including, but not limited to damages, attorneys' fees and costs, available to Avatar for the actual or threatened violation of any covenant contained in Paragraph X of this Agreement. Executive further agree that the covenants contained in Paragraph X of this Agreement shall be construed as agreements independent of any other provision of this Agreement, and the existence of any claim or cause of action by Executive against Avatar, whether based on this Agreement or otherwise, shall not constitute a defense to the enforcement of any the covenants in Paragraph X.

XIII.     Executive agrees that Executive will not engage in any harassing or disparaging conduct toward the Released Parties and that Executive will refrain from making any negative or derogatory statements concerning Released Parties.  Company and Avatar agree that they will not engage in any harassing or disparaging conduct toward Executive and that the Company and Avatar will refrain from making any negative or derogatory statements concerning Executive.

XIV.      Executive agrees to cooperate with Avatar in regard to the transition of the business matters Executive handled on behalf of Avatar.  Executive agrees to reasonably cooperate with Avatar and its counsel in the defense or prosecution of any claims or actions now in existence or which may be brought in the future against or on behalf of Avatar which relate in any way to events or occurrences that transpired while Executive were employed by Avatar.  Executive’s cooperation in connection with such claims or actions will include, but not limited to, being available to meet with Avatar’s counsel to prepare for discovery or any legal proceeding, and to act as a witness on behalf of Avatar at mutually convenient times.  Avatar will reimburse Executive for all reasonable, pre-approved out-of-pocket costs and expenses Executive incurs in connection with Executive’s obligations under this paragraph of the Agreement and pay Executive the hourly rate mutually agreed between Avatar and Executive.  Without limiting the foregoing, Executive has agreed to continue to represent Avatar as outside counsel with respect to the Poinciana Parkway and other matters designated by the Company or Avatar on terms mutually agreed upon from time to time so long as Company desires such representation.

XV.       Executive understands that this Agreement does not waive any claims that Executive may have:  (i) for compensation for illness or injury or medical expenses under any workers’ compensation statute; (ii) under any law or any policy or plan currently maintained by Avatar that provides health insurance continuation or conversion rights; or (iii) any claim that by law cannot be waived or released.

 

  

  

  

 

XVI.      Executive acknowledges and agrees that:  (i) Executive has had reasonable and sufficient time to review this Agreement and to consult with an attorney regarding this Agreement; (ii) Executive has been advised to consult with legal counsel regarding this Agreement and is encouraged by Avatar to consult with legal counsel with regard to this Agreement; (iii) Executive is entering into this Agreement freely and voluntarily and not as a result of any coercion, duress or undue influence; (iv) Executive is not relying upon any oral representations made regarding the subject matter of this Agreement; (v) in exchange for Executive waiving Executive’s  rights and claims, Executive is receiving consideration in addition to that which Executive was already entitled; and (vi) Executive has received all information  Executive requires from Company and Avatar in order to make a knowing and voluntary release and waiver of all claims against Released Parties, including claims under ADEA.  Avatar and Executive further acknowledge that this Agreement and the release contained herein satisfy all the requirements for an effective release by Executive of all age discrimination claims under ADEA.

XVII.     Pursuant to the provisions of the Older Workers Benefit Protection Act (“OWBPA”), which applies to Executive’s  waiver of rights under the ADEA, Executive acknowledge that:

 A.            Executive has been given twenty-one (21) days within which to consider whether to execute this Agreement; Also pursuant to the OWBPA, Executive have seven (7) days from the date Executive signs this Agreement within which to revoke this Agreement, by providing written notice via U.S. mail, overnight mail or hand delivery to Avatar, Attention:  Allen Anderson, 8601 N. Scottsdale Rd, Suite 225, Scottsdale, AZ 85253.

 B.            Executive’s written revocation must be received no later than 5:00 pm on the seventh day;

 C.            Executive understands that this Agreement shall not become effective until the seven-day revocation period has expired.  Executive will not be entitled to any benefits of this Agreement if Executive revokes either this Agreement or the Additional Release.  If Executive decides to revoke either this Agreement or the Additional Release, it will not change the fact that Executive’s employment with Avatar ends on the Termination Date; and

 D.            Executive understands that Executive may sign this Agreement prior to the end of the twenty-one (21)-day period.  If Executive does so, Executive agrees that it was done knowingly and voluntarily, without any improper inducement by Avatar.

 E.             Executive acknowledges that Executive received this Agreement on September 24, 2012.

 F.            Executive agrees that any modifications, material or otherwise, made to this Agreement, do not restart or affect in any manner the original up to twenty-one (21) calendar day consideration period.

XVIII.   Executive, Company and Avatar acknowledge that the cash payments provided under this Agreement are taxable compensation and will be reported on Executive’s  Form W-2 for the year of payment.  In addition, Company, Executive and Avatar acknowledge that all other payments and benefits provided under this Agreement that are required pursuant to the Internal Revenue Code to be treated as taxable compensation also will be reported on Executive’s  Form W-2 for the year the payment or benefit is provided.

  

  

  

XIX.      Executive, Company and Avatar acknowledge that if any provision of this Agreement is invalidated by a court of competent jurisdiction, (except the releases in Paragraph VII) then all of the remaining provisions of this Agreement shall remain in full force and effect, provided that both parties may still effectively realize the complete benefit of the promises and considerations conferred hereby.

XX.       Executive, Company and Avatar acknowledge that this Agreement, together with the Additional Release, constitutes the entire agreement between the parties with respect to the matters set forth in this Agreement and supersedes in its entirety any and all agreements or communications, whether written or oral, previously made in connection with the matter herein.

XXI.      This Agreement does not constitute an admission of a violation of any law, order, regulation, or enactment, or of wrongdoing of any kind by Executive, Company or Avatar.

XXII.     Any agreement to amend or modify the terms and conditions of this Agreement must be in writing and signed by each of the parties.  For Company and Avatar by:  Allen Anderson, CEO.

XXIII.    Each party represents that it has had the opportunity to consult with an attorney, and has carefully read and understands the scope and effect of the provisions of this Agreement.  No party has relied upon any representations or statements made by the other party hereto which are not specifically set forth in this Agreement.

XXIV.    Executive, Company and Avatar agree to pay their respective attorneys’ fees and costs in connection with this Agreement, and will not try to obtain any additional fees or costs from each other.  However, both Executive and Avatar reserve any and all rights to enforce the terms of this Agreement.  If any lawsuit is brought to enforce or interpret the terms of this Agreement, the prevailing party in such action or proceeding shall be entitled to recover its costs, and all reasonable attorneys’ fees at all trial and appellate levels, in addition to any other relief to which such prevailing party may be entitled.  Notwithstanding anything in this Paragraph to the contrary, the prevailing party in any action at law or in equity under the ADEA or to enforce or interpret the validity of any release of an ADEA claim will not be entitled to recover attorneys’ fees and costs as specifically authorized under federal law.

XXV.     The waiver by any party of any breach of any provision of this Agreement shall not be construed to be a waiver of any succeeding breach of such provision or a waiver by such party of any breach of any other provision.

XXVI.    Company and Avatar represent and warrant that the person signing this Agreement has the authority to act on behalf of Company and Avatar and to bind Company and Avatar and all who may claim through it to the terms and conditions of this Agreement.  Executive represents and warrants that Executive has the capacity to act on Executive’s  own behalf and on behalf of all who might claim through Executive to bind them to the terms and conditions of this Agreement.  Executive, Company and Avatar each warrant and represent that there are no liens or claims of lien or assignments in law or equity or otherwise of or against any of the claims or causes of action released by this Agreement.

XXVII.   This Agreement shall be construed as though all parties contributed equally to its content.

XXVIII.   In the event of any dispute or claim relating to or arising out of this Agreement, the parties’ employment relationship, or the termination of that relationship for any reason (including, but not limited to, any claims of breach of contract, wrongful termination, fraud, retaliation, discrimination or harassment), the parties agree that the proper venue for any and all disputes/claims between them shall be venued in and brought in a court of competent jurisdiction in Polk County, Florida and tried before the court in a bench trial, as the parties expressly waive their right to a jury trial.  Notwithstanding the foregoing, in the event of any such dispute/claim, the parties may agree to mediate or arbitrate the dispute/claim on such terms and conditions as may be agreed to in writing by the parties.

  

  

  

XXIX.   This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Florida, substantive, procedural and remedial, notwithstanding any conflict of laws analysis to the contrary.  The parties further agree that the proper venue for any dispute is Polk County, Florida.

XXX.    This Agreement may be executed in counterparts, and each counterpart shall have the same force and effect as an original and shall constitute an effective, binding agreement on the part of each of the undersigned.

XXXI.   Further, Executive shall be indemnified and held harmless (including advancement of attorney’s fees) to the fullest extent permitted by the Company’s bylaws and or other applicable plan, program, agreement or arrangement of the Company for Executive’s actions on behalf of the Company and its affiliates prior to the Termination Date.  The rights under this paragraph shall continue as to Executive after the Termination Date and inure to the benefit of Executive’s heirs, executors and administrators.

XXXII.

 A.            It is the intention of both the Company, Avatar (collectively the "Employer Parties") and Executive that the benefits and rights to which Executive is entitled pursuant to this Agreement comply with Section 409A of the Internal Revenue Code of 1986, as amended (the "Code"), to the extent that the requirements of Code Section 409A are applicable thereto, and the provisions of this Agreement shall be construed in a manner consistent with that intention. If Executive or the Employer Parties believe, at any time, that any such benefit or right that is subject to Code Section 409A does not so comply, it shall promptly advise the other and shall negotiate reasonably and in good faith to amend the terms of such benefits and rights such that they comply with Code Section 409A (with the most limited possible economic effect on Executive and on the Employer Parties). The preceding provisions shall not be construed as a guarantee by the Employer Parties of any particular tax effect to Executive of the payments and other benefits under this Agreement;

 B.            In the event that Executive is a “specified employee” (as described in Code Section 409A), and any payment or benefit payable pursuant to this Agreement constitutes deferred compensation under Code Section 409A, then the Employer Parties and Executive shall cooperate in good faith to undertake any actions that would cause such payment or benefit not to constitute deferred compensation under Code Section 409A. In the event that, following such efforts, the Employer Parties determine (after consultation with its counsel) that such payment or benefit is still subject to the six-month delay requirement described in Code Section 409A(2)(b) in order for such payment or benefit to comply with the requirements of Code Section 409A, then no such payment or benefit shall be made before the date that is six months after Executive’s “separation from service” (as described in Code Section 409A) (or, if earlier, the date of the Executive’s death). Any payment or benefit delayed by reason of the prior sentence shall be paid out or provided in a single lump sum at the end of such required delay period in order to catch up to the original payment schedule; and

 

  

  

  

 C.            For purposes of applying the provisions of Code Section 409A to this Agreement, each separately identified amount to which Executive is entitled under this Agreement shall be treated as a separate payment.

EXECUTIVE IS ADVISED TO CONSULT AN ATTORNEY

BEFORE SIGNING THIS AGREEMENT AS EXECUTIVE IS WAIVING  IMPORTANT 

RIGHTS (INCLUDING THOSE UNDER THE ADEA) AND TO

READ THIS AGREEMENT CAREFULLY

I have read the foregoing Separation Agreement, Including General Release, and I accept and agree to the provisions contained in this Separation Agreement, Including General Release.

	s/ Patricia K. Fletcher	  	
9/24/12

	
Patricia K. Fletcher

	  	
Date

	AV HOMES, INC..	 	  
	 	  	 	  
	By: 	
/s/ Allen J. Anderson

	 	  
	 	  	 	  
	 	
Allen J. Anderson

	 	
9/25/12

	 	
Print Name

	 	
Date

	 	  	 	  
	Its:	
CEO

	 	  
	 	
Title

	 	  

	AVATAR PROPERTIES INC.	 	  
	 	  	 	  
	By:	
 /s/ Allen J. Anderson

	 	  
	 	  	 	  
	 	
Allen J. Anderson 

	 	
9/25/12

	 	
Print Name

	 	
Date

	 	  	 	  
	Its:	
CEO

	 	  
	 	
Title

	 	  

  

  

  

EXHIBIT “A”

ADDITIONAL RELEASE OF ALL CLAIMS

 

 THIS ADDITIONAL RELEASE OF ALL CLAIMS (“Additional Release”) sets forth the voluntary agreement reached among Patricia K. Fletcher ("Executive"), AV Homes, Inc. f/k/a Avatar Holdings Inc. ("Company"), and Avatar Properties, Inc. ("Avatar").

I.           Effective at midnight on September 30, 2012, Executive resigned from all officer and director positions at the Company, Avatar and their affiliates except for the position of Executive Vice President of Avatar.

 

II.          Effective at midnight on October 31, 2012, Executive resigned as Executive Vice President of Avatar and Executive's last day of employment was October 31, 2012 ("Termination Date").  In no event should Executive sign this Additional Release prior to her Termination Date.

 

III.         In consideration for the promises made in the Separation Agreement, Including General Release between Executive, the Company, and Avatar dated September ____, 2012, in addition to other good and valuable consideration the receipt and sufficiency of which are hereby acknowledged, Executive agrees:

 

A.          To release and forever discharge Company and Avatar, its past and present directors, shareholders, officers, members, principals, employees, contractors, agents, subsidiaries, divisions, predecessors, parents, insurers, affiliated entities, successors, transferees and assigns, and their personal representatives, heirs, and attorneys (collectively referred to as the "Released Parties") from any and all claims, demands or liabilities whatsoever, whether known or unknown, which Executive ever had or may now have against the Released Parties, from the beginning of time to the date of this Additional Release.  This Additional Release includes, without limitation, any claims, demands or liabilities relating to or arising out of Executive’s employment with Avatar or separation of employment with Avatar pursuant to any federal, state, or local employment laws, regulations, ordinances, or executive orders prohibiting, among other things, age, race, color, sex, national origin, religion, marital status, familial status, sexual orientation, and disability discrimination.

B.           This release includes, but is not limited to, any and all actions claims and demands under:

	
the Age Discrimination Employment Act (the “ADEA”) as amended, and the Older Workers Benefit Protection Act (“OWBPA”) 29 U.S.C. Section 623, et seq.;

	
Title VII of the Civil Rights Act of 1964, 42 U.S.C. Section 2000e, et seq. as amended;

	
the Americans with Disabilities Act 42 U.S.C. Section 12101, et seq. (the “ADA”), as amended;

	
the Equal Pay Act of 1963, 29 U.S.C. Section 206(d);

	
the Family and Medical Leave Act, as amended, 29 U.S.C. Section 2601, et seq. (the “FMLA”);

	
COBRA, as amended, 29 U.S.C. Section 1161, et seq.;

	
the Worker Adjustment and Retraining Notification Act, 29 U.S.C. Section 2101, et. seq. (“WARN”);

	
Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1514A; et seq.

	
42 U.S.C. Sections 1981 through 1988;

	
the National Labor Relations Act, 29 U.S.C. Section 151, et seq.,

	
the Immigration Reform and Control Act;

  

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the Uniform Services Employment and Reemployment Rights Act of 1994;

	
the Employee Retirement Income Security Act of 1974 (“ERISA”) as amended, 29 U.S.C. Section 1001, et seq. (excluding any vested benefits under any Employee Retirement Plan);

	
the Fair Credit Reporting Act;

	
the Rehabilitation Act of 1973;

	
the Genetic Information Nondiscrimination Act of 2008;

	
the Florida and Federal Constitutions;

	
the Florida Human Rights Act of 1977 and the Florida Civil Rights Act of 1992 as amended, Chapter 760 Florida Statutes;

	
the Florida Whistleblower’s Act, Fla. Stat. Section 448.101, et seq.;

	
Florida Workers’ Compensation Retaliation Statute, Fla. Stat. Section 440.205;

	
Florida’s Wage Payment laws, Fla. Stat. Section 448.07;

	
the Florida Minimum Wage Act, Fla. Stat. Section 448.110;

	
the Florida Wage Discrimination Law, Fla. Stat. Section 448.07;

	
the Florida Equal Pay Law;

	
the Florida AIDS Act, Fla. Stat. Sections 10.1125, 381.00 and 760.50;

	
Florida Discrimination on Basis of Sickle Cell Trait Law, Fla. Stat. Section 448.075; and

	
any other federal, state or local statute, executive order regulation or ordinance relating to or dealing with unpaid wages, employment, employment discrimination, retaliation, conspiracy, tortious or wrongful discharge.

C.          This release also includes, but is not limited to:  (i) any and all actions, claims and demands for wrongful discharge, future wage loss, employee benefits, bonuses, stock options, attorneys’ fees and costs, penalties and damages of all types, including, but not limited to, punitive and compensatory damages; emotional distress damages; breach of any employment contract (whether express or implied) among Executive, Company and Avatar; and (ii) any and all actions, claims and demands for tort damages (whether intentional or negligent) and/or personal injury as a result of Executive’s  employment or Executive’s termination of employment by Avatar, such as defamation, fraud, misrepresentation, assault, battery, negligence, negligent supervision, hiring, or retention, detrimental reliance, intentional or negligent infliction of emotional distress, breach of a covenant of good faith and fair dealing, and any other offense.  The foregoing list is meant to be illustrative rather than exhaustive.

D.          That no rights or claims after the date this Additional Release is signed are waived, including, but not limited to rights or claims arising under the ADEA.

E.           In exchange for the promises which Executive make in this Additional Release, the Released Parties agree to release and forever discharge Executive and Executive’s personal representatives, heirs and attorneys, from any and all claims demands or liabilities, whatsoever, whether known or unknown which Released Parties ever had or may now have against Executive and/or Executive’s personal representatives, heirs and attorneys, from the beginning of time to the date of this Additional Release. This Additional Release includes, without limitation, any claims, demands or liabilities relating to or arising out of Executive’s employment with Avatar or separation of employment with Avatar pursuant to any federal, state, or local employment laws, regulations, ordinances, or executive orders.

  

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F.           Executive shall not sue any or all of the Released Parties, except in the event that the Company or Avatar breaches this Additional Release or where Executive challenges the validity of this Additional Release under the Older Workers Benefit Protection Act.  Nothing, however, herein precludes Executive from participating in or filing a charge or complaint with any federal, state, or local government agency.  However, with respect to such claims Executive is waiving, not only Executive’s  right to recover money or other legal not equitable relief in any action that Executive might institute, but Executive also is waiving Executive’s  right to recover money or other legal not equitable relief in any action that might be brought on Executive’s  behalf by any other person or entity including, but not limited to, the State of Florida, the United States Equal Employment Opportunity Commission (“EEOC”), the Department of Labor (“DOL”), or any other (U.S. or foreign) federal, state, or local agency or department.

G.          That Executive has been paid and/or received all of Executive’s  past wages including overtime, compensation, bonuses, commissions, leave payments and/or and benefits due as of the date of this Additional Release and that no such additional amounts are due Executive.

H.          That Executive reported all hours worked as of the date Executive signed the Additional Release and has not filed any claims, complaints, charges, lawsuits or other proceedings against any of the Released Parties with any governmental agency, arbitrator, or any court.  Executive also represents that Executive does not intend to bring any claims on Executive’s  own behalf or on behalf of any other person or entity against Released Parties.  Executive further represent that Executive has not assigned or transferred, or purported to have assigned or transferred, to any entity or person any dispute released by Executive in this Additional Release.

I.           Executive affirms that Executive has not been retaliated against for reporting any allegations of wrongdoing by Released Parties.

J.           Executive affirms that all of the Released Parties’ decisions regarding Executive’s  pay and benefits through the date of this Additional Release were not discriminatory based on age, disability, race, color, sex, religion, national origin or any other classification protected by law.

IV.         Executive affirms that Executive has been granted any leave to which Executive was entitled under the Family and Medical Leave Act or related state or local leave or disability accommodation laws.  Executive also agree Executive has no known unreported workplace injuries or occupational diseases

 

V.          Executive understands that this Additional Release does not waive any claims that Executive may have:  (i) for compensation for illness or injury or medical expenses under any workers’ compensation statute; (ii) under any law or any policy or plan currently maintained by Avatar that provides health insurance continuation or conversion rights; or (iii) any claim that by law cannot be waived or released.

 

VI.        Executive acknowledges and agrees that:  (i) Executive has had reasonable and sufficient time to review this Additional Release and to consult with an attorney regarding this Additional Release; (ii) Executive has been advised to consult with legal counsel regarding this Additional Release and is encouraged by Avatar to consult with legal counsel with regard to this Additional Release; (iii) Executive is entering into this Additional Release freely and voluntarily and not as a result of any coercion, duress or undue influence; (iv) Executive is not relying upon any oral representations made regarding the subject matter of this Additional Release; (v) in exchange for Executive waiving Executive’s  rights and claims, Executive is receiving consideration in addition to that which Executive was already entitled; and (vi) Executive has received all information  Executive requires from Company and Avatar in order to make a knowing and voluntary release and waiver of all claims against Released Parties, including claims under ADEA.  Avatar and Executive further acknowledge that this Additional Release and the release contained herein satisfy all the requirements for an effective release by Executive of all age discrimination claims under ADEA.

 

  

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VII.       Pursuant to the provisions of the Older Workers Benefit Protection Act (“OWBPA”), which applies to Executive’s  waiver of rights under the ADEA, Executive acknowledge that:

 A.            Executive was provided with up to 21 days after receiving the Confidential Separation Agreement, Including General Release with this Additional Release attached as Exhibit “A” to decide whether to sign this Additional Release; Also pursuant to the OWBPA, Executive have seven (7) days from the date Executive signs this Additional Release within which to revoke this Additional Release, by providing written notice via U.S. mail, overnight mail or hand delivery to Avatar, Attention: Allen Anderson, 8601 N. Scottsdale Rd, Suite 225, Scottsdale, AZ 85253.

 B.            Executive’s written revocation must be received no later than 5:00 pm on the seventh day;

 C.            Executive understands that this Additional Release shall not become effective until the seven-day revocation period has expired.  Executive will not be entitled to any benefits of the Confidential Separation Agreement if Executive revokes this Additional Release.  If Executive decides to revoke this Additional Release, it will not change the fact that Executive’s employment with Avatar ended on the Termination Date; and

 D.            Executive acknowledges that Executive received this Additional Release on September 24, 2012.

 E.            Executive agrees that any modifications, material or otherwise, made to this Additional Release, do not restart or affect in any manner the original up to twenty-one (21) calendar day consideration period.

VIII.      Executive, Company and Avatar acknowledge that if any provision of this Additional Release is invalidated by a court of competent jurisdiction, (except the releases in Paragraph III) then all of the remaining provisions of this Additional Release shall remain in full force and effect, provided that both parties may still effectively realize the complete benefit of the promises and considerations conferred hereby.

IX.        Executive, Company and Avatar acknowledge that this Additional Release, together with the Confidential Separation Agreement, Including General Release dated September ____, 2012, constitutes the entire agreement between the parties with respect to the matters set forth in this Additional Release and supersedes in its entirety any and all agreements or communications, whether written or oral, previously made in connection with the matter herein.

X.         This Additional Release does not constitute an admission of a violation of any law, order, regulation, or enactment, or of wrongdoing of any kind by Executive, Company or Avatar.

XI.         Any agreement to amend or modify the terms and conditions of this Additional Release must be in writing and signed by each of the parties.  For Company and Avatar by:  Allen Anderson, CEO.

XII.       Each party represents that it has had the opportunity to consult with an attorney, and has carefully read and understands the scope and effect of the provisions of this Additional Release.  No party has relied upon any representations or statements made by the other party hereto which are not specifically set forth in this Additional Release.

 

  

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XIII.      Executive, Company and Avatar agree to pay their respective attorneys’ fees and costs in connection with this Additional Release, and will not try to obtain any additional fees or costs from each other.  However, both Executive and Avatar reserve any and all rights to enforce the terms of this Additional Release.  If any lawsuit is brought to enforce or interpret the terms of this Additional Release, the prevailing party in such action or proceeding shall be entitled to recover its costs, and all reasonable attorneys’ fees at all trial and appellate levels, in addition to any other relief to which such prevailing party may be entitled.  Notwithstanding anything in this Paragraph to the contrary, the prevailing party in any action at law or in equity under the ADEA or to enforce or interpret the validity of any release of an ADEA claim will not be entitled to recover attorneys’ fees and costs as specifically authorized under federal law.

XIV.      The waiver by any party of any breach of any provision of this Additional Release shall not be construed to be a waiver of any succeeding breach of such provision or a waiver by such party of any breach of any other provision.

XV.       Company and Avatar represent and warrant that the person signing this Additional Release has the authority to act on behalf of Company and Avatar and to bind Company and Avatar and all who may claim through it to the terms and conditions of this Additional Release.  Executive represents and warrants that Executive has the capacity to act on Executive’s  own behalf and on behalf of all who might claim through Executive to bind them to the terms and conditions of this Additional Release.  Executive, Company and Avatar each warrant and represent that there are no liens or claims of lien or assignments in law or equity or otherwise of or against any of the claims or causes of action released by this Additional Release.

XVI.      This Additional Release shall be construed as though all parties contributed equally to its content.

XVII.     In the event of any dispute or claim relating to or arising out of this Additional Release, the parties’ employment relationship, or the termination of that relationship for any reason (including, but not limited to, any claims of breach of contract, wrongful termination, fraud, retaliation, discrimination or harassment), the parties agree that the proper venue for any and all disputes/claims between them shall be venued in and brought in a court of competent jurisdiction in Polk County, Florida and tried before the court in a bench trial, as the parties expressly waive their right to a jury trial.  Notwithstanding the foregoing, in the event of any such dispute/claim, the parties may agree to mediate or arbitrate the dispute/claim on such terms and conditions as may be agreed to in writing by the parties.

XVIII.    This Additional Release shall be governed by and construed and enforced in accordance with the laws of the State of Florida, substantive, procedural and remedial, notwithstanding any conflict of laws analysis to the contrary.  The parties further agree that the proper venue for any dispute is Polk County, Florida.

XIX.     This Additional Release may be executed in counterparts, and each counterpart shall have the same force and effect as an original and shall constitute an effective, binding agreement on the part of each of the undersigned.

XX.       Further, Executive shall be indemnified and held harmless (including advancement of attorney’s fees) to the fullest extent permitted by the Company’s bylaws and or other applicable plan, program, agreement or arrangement of the Company for Executive’s actions on behalf of the Company and its affiliates prior to the Termination Date.  The rights under this paragraph shall continue as to Executive after the Termination Date and inure to the benefit of Executive’s heirs, executors and administrators.

 

  

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EXECUTIVE IS ADVISED TO CONSULT AN ATTORNEY

BEFORE SIGNING THIS ADDITIONAL RELEASE AS EXECUTIVE IS WAIVING 

IMPORTANT RIGHTS (INCLUDING THOSE UNDER THE ADEA) AND TO

READ THIS ADDITIONAL RELEASE CAREFULLY

I have read the foregoing Additional Release of All Claims, and I accept and agree to the provisions contained in this Additional Release of All Claims.

	  	 	  
	
Patricia K. Fletcher

	 	
Date

	
AV HOMES, INC..

	  	  
	  	  	  	  
	
By: 

	  	  	  
	  	  	  	  
	
 

	 	  	
 

	 	Print Name	 	Date
	  	  	  	  
	
Its:

	  	  	  
	 	Title	  	  

	
AVATAR PROPERTIES INC.

	 	  
	  	  	 	  
	
By:

	 	 	  
	  	  	 	  
	 	 	 	 
	 	
Print Name

	 	Date
	  	  	 	  
	
Its:

	  	 	  
	 	Title	 	  

 

 

6 of 6ex10_1.htm

Exhibit 10.1

 

[ ***] = Certain confidential information contained in this document, marked by brackets and asterisks,  has been omitted and  filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.  Confidential treatment has been requested with respect to the omitted information

 

CONFIDENTIAL SETTLEMENT AGREEMENT

This CONFIDENTIAL SETTLEMENT AGREEMENT (the “Agreement”) is entered into effective the 24th day of September 2012 (the “Effective Date”), by and between Abaxis, Inc., a California corporation with its principal place of business at 3240 Whipple Road, Union City, California 94587 (“Abaxis”), and Cepheid, a California corporation with its principal place of business at 904 Caribbean Drive, Sunnyvale, California 94089 (“Cepheid”).  Abaxis and Cepheid are hereinafter referred to respectively as a “Party” and collectively as the “Parties.”

WHEREAS, Abaxis and Cepheid are parties to a lawsuit captioned Abaxis, Inc. v. Cepheid, Case No. 5:10-cv-02840-LHK, currently pending in the United States District Court for the Northern District of California (“the Litigation”);

WHEREAS, the Parties wish to compromise and settle the Litigation and other possible claims on the terms and conditions stated herein; and

WHEREAS, the Parties enter into this Agreement in consideration of the mutual covenants and promises set forth herein.

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

	
  

	
1.

	
Definitions

	
  

	
1.1.

	
“Abaxis Patents” means U.S. Patent No. 5,413,732, entitled “Reagent Compositions for Analytical Testing,” U.S. Patent No. 5,624,597, entitled “Reagent Compositions for Analytical Testing,” U.S. Patent No. 5,776,563, entitled “Dried Chemical Compositions,” U.S. Patent No. 6,251,684, entitled “Dried Chemical Compositions,” U.S. Patent No. 5,998,031, entitled “Dried Chemical Compositions,” and any and all continuations, continuations-in-part, reissues, reexaminations, supplemental examinations, divisionals, foreign counterparts, and extensions thereof, any other patent that Abaxis could have asserted against Cepheid prior to the Effective Date, and any continuation, continuation-in-part, reissue, reexamination, supplemental examination, divisional, foreign counterpart, or extension of such any other patent, or any patent or patent application claiming the benefit of priority of any of the foregoing.

 

	
  

	
1.2.

	
“Released Products” means any past, present, or future product made, used, sold, offered for sale, leased, and/or imported into the United States or any other country by or for Cepheid and/or its Affiliates.

 

  

  

  

 

[ ***] = Certain confidential information contained in this document, marked by brackets and asterisks,  has been omitted and  filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.  Confidential treatment has been requested with respect to the omitted information

 

	
  

	
1.3.

	
“Affiliate” means (i) any company, corporation or other business entity that now or hereafter is directly or indirectly controlled by, under common control with, or that controls the subject Party, where control means direct or indirect ownership of fifty percent (50%) or more of the voting shares or other comparable voting interests, or the right to exercise fifty percent (50%) or more of the voting shares or other comparable voting interests, or (ii) any company, corporation or other business entity that is spun off from a Party or spun off or consolidated from any entities controlled by a Party under subsection (i) herein and is then controlled, either directly or indirectly, by the Party, through ownership or control of fifty percent (50%) or more of the voting shares or other comparable voting interests. The aforementioned company, corporation or other business entity shall be deemed to be an Affiliate of the Party only so long as such a direct or indirect control exists between the Party and such company, corporation or other business entity.

	
  

	
1.4.

	
“Cepheid and/or its Affiliates,” “Cepheid or its Affiliates,” and “Cepheid and its Affiliates” means Cepheid and/or any company, corporation or business entity that meets the definition of Affiliate in Section 1.3 with respect to Cepheid.

	
  

	
1.5.

	
“Released Claims” means any and all of the following:  claims, liabilities, suits, rights, demands, actions, obligations, debts, accounts, bonds, damages, expenses, fees, losses, royalties and causes of action of any and every kind, nature and character, known or unknown, accrued or unaccrued, legal, equitable or other which Abaxis and/or its Affiliates may now have, has ever had, or may have hereafter against Cepheid, its Affiliates, or any of their respective direct or indirect customers, employees, users, licensees, distributors, retailers, or direct and indirect suppliers, arising from or in any way connected with, or that could have been asserted in the Litigation.  Notwithstanding the preceding sentence, “Released Claims” shall not include any claim arising under Article 5 of this Agreement.

	
  

	
1.6.

	
[***]

	
  

	
2.

	
Payment and Settlement of Litigation

	 	
2.1.

	
Payment.  In consideration of the releases and covenants granted in Sections 3 and 4 below and the dismissal with prejudice by Abaxis of all claims asserted against Cepheid in the Litigation as provided in Section 2.2 below, and subject to the other terms and conditions of this Agreement, Cepheid will pay Abaxis 17.25 Million US Dollars.  Within five (5) calendar days after the Effective Date, the entire payment amount will be deposited by Cepheid into an escrow account in accordance with instructions provided by Abaxis.

 

  

2

  

 

[ ***] = Certain confidential information contained in this document, marked by brackets and asterisks,  has been omitted and  filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.  Confidential treatment has been requested with respect to the omitted information

 

	
  

	
2.2.

	
Dismissal with Prejudice.  Contemporaneously with the execution of this Agreement, counsel for the Parties shall cause to be filed in the Litigation a Stipulation of Dismissal with Prejudice in the form of Exhibit A attached hereto.

	
  

	
2.3.

	
Fees and Expenses.  Each Party shall pay its own attorneys’ fees and costs incurred in connection with the Litigation and this Agreement.

	
  

	
3.

	
Release

	
  

	
3.1.

	
Subject to the terms and conditions of this Agreement, including payment in full by Cepheid of the consideration in Section 2.1, Abaxis, for itself, its Affiliates, and their respective officers, directors, shareholders, employees, agents, representatives, and attorneys, hereby fully and finally releases, acquits, waives, and forever discharges Cepheid, its Affiliates, and their respective officers, directors, shareholders, direct and indirect customers, users, licensees, distributors, retailers, or direct and indirect suppliers, employees, agents, representatives, and attorneys from all Released Claims.

	
  

	
3.2.

	
Subject to the terms and conditions of this Agreement, Cepheid, for itself, its Affiliates, and their respective officers, directors, shareholders, employees, agents, representatives, and attorneys, fully and finally releases, acquits, waives, and forever discharges Abaxis, its Affiliates, and their respective officers, directors, shareholders, customers, employees, agents, representatives, and attorneys from all of Cepheid’s claims, suits, demands, damages, liabilities, actions, and causes of action of any and every kind and nature, whether known or unknown, suspected or unsuspected, now existing or heretofore arising from or in any way connected with the Litigation, but excluding any claim arising from breach under Article 5 of this Agreement.

	
  

	
3.3.

	
Cepheid and Abaxis each represents, warrants and agrees to the other that they have been fully advised by their attorneys regarding the contents of Section 1542 of the Civil Code of California and expressly waive any rights they might otherwise have under that Section.  Section 1542 reads as follows:

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.

	
  

	
3.4.

	
Nothing in the releases contained herein shall operate to bar or limit any claim for breach or enforcement of this Agreement.

 

	
  

	
3.5.

	
Cepheid and Abaxis expressly agree and acknowledge that by entering into this Agreement neither Abaxis nor Cepheid admits any liability, wrongdoing, or the truth of any allegation contained in any claim, defense, argument, or counterclaim alleged in the Litigation.  Notwithstanding the foregoing, and except in defense of itself or any other Protected Entities (defined in Section 4.1), Cepheid hereby agrees not to challenge in any manner or otherwise support any third party in the challenge of any Abaxis Patents, including any claim of invalidity of any Abaxis Patents.  Neither this Agreement nor any release nor other provision in this Agreement may be construed or used as evidence of, or an admission of, any issues or facts at issue in the Litigation, or any other admission of wrongdoing, liability, or violation of law whatsoever.

 

  

3

  

 

[ ***] = Certain confidential information contained in this document, marked by brackets and asterisks,  has been omitted and  filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.  Confidential treatment has been requested with respect to the omitted information

 

	
  

	
4.

	
Covenant Not to Sue

	
  

	
4.1.

	
Covenant Not to Sue[***].  Subject to the payment of the consideration provided for in Section 2.1, Abaxis[***] hereby grants [***] the following worldwide, fully paid-up, irrevocable, perpetual release and covenant not to sue or bring any judicial, quasi-judicial, or regulatory claim or proceeding, or initiate or pursue any investigation, against or involving, Cepheid, its Affiliates, or their respective direct or indirect customers, users, licensees, officers, directors, employees, agents, representatives, distributors, retailers, or direct and indirect suppliers (collectively the “Protected Entities”) on any Released Claim with respect to Released Products.  [***]

	
  

	
4.2.

	
Covenants Transfer.  The Covenant Not to Sue granted under this Agreement in Section 4.1 above are intended to and shall run with the Abaxis Patents [***].

	
  

	
4.3

	
Downstream Covenant.  The Covenant Not to Sue provided in Section 4.1 shall be deemed to apply to the Protected Entities to the extent that any Protected Entities sell, offer for sale, manufacture, use, or import Released Products.

	
  

	
5.

	
Confidentiality and Publicity

	
  

	
5.1.

	
Each Party agrees not to disclose the terms or conditions of this Agreement except:

	
  

	
5.1.1.

	
with the express written consent of the other Party obtained in advance of the disclosure, which consent shall not be unreasonably withheld;

	
  

	
5.1.2.

	
in response to a discovery request in a lawsuit or administrative proceeding, after the other Party has been given reasonable notice and an opportunity to object, and the disclosing Party shall provide reasonable assistance to prevent or limit the disclosure at the objecting Party’s cost;

	
  

	
5.1.3.

	
pursuant to, and to the degree required by, applicable law or regulation (including without limitation in connection with public filings with the Securities and Exchange Commission), or pursuant to, and to the degree required by, the rules of a recognized stock exchange as determined by a Party in good faith;

 

  

4

  

 

[ ***] = Certain confidential information contained in this document, marked by brackets and asterisks,  has been omitted and  filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.  Confidential treatment has been requested with respect to the omitted information

 

	
  

	
5.1.4.

	
to those persons with a need to know for purposes of indemnification and/or contribution or to those persons with a need to know in order to provide the Parties with corporate, financial, legal, contract, insurance, loan, audit, or similar business related information and services, and who have also agreed in writing to maintain such information as strictly confidential, or who have a legal obligation to maintain such information as strictly confidential; or

	
  

	
5.1.5.

	
with respect to information that has been made public under any of the foregoing exceptions, or can be clearly inferred from such information that has been made public.

	
  

	
5.2.

	
A Party acting under the provisions of Section 5.1.2, 5.1.3, 5.1.4, or 5.15 shall disclose no more than what is necessary to be disclosed and shall otherwise use commercially reasonable efforts to redact (e.g., for a public disclosure required to comply with SEC regulations) or withhold all other information about the terms and conditions of this Agreement.

 

	
  

	
5.3.

	
The Stipulated Amended Protective Order entered in the Litigation by the Court on February 13, 2012 shall continue in full force and effect in perpetuity in accordance with Sections 4 (Duration) and 13 (Final Disposition) of that Order, except that the Court shall retain jurisdiction to enforce the terms of the Order for five years after the Effective Date of this Agreement.  Notwithstanding the first sentence of Section 7.1 of the License Agreement of September 30, 2005 between the Parties, all confidentiality obligations under Article 7 of that License Agreement shall continue in force for a period of five (5) years following the Effective Date of this Agreement.

 

	
  

	
5.4.

	
Publicity.  After this Agreement has been fully executed by the Parties, they may issue a joint press release, subject to prior written approval by both Parties, which shall include the following language:  “Cepheid and Abaxis have reached a settlement of the patent lawsuit captioned Abaxis, Inc. v Cepheid, Case No. 5:10-cv-02840-LHK in the Northern District of California relating to Abaxis’ Orbos® technology.  The terms of the settlement are confidential.”

 

	
  

	
5.5.

	
Non-Disparagement.  Neither Party shall comment publicly about the merits or strength of the case of either Party in the Litigation, the appropriateness of the terms of this Settlement Agreement, or otherwise disparage the other Party.

 

	
  

	
5.6.

	
Notice.  Each Party shall notify the other Party promptly upon discovery of any unauthorized use or disclosure in violation of this Article 5.

 

  

5

  

 

[ ***] = Certain confidential information contained in this document, marked by brackets and asterisks,  has been omitted and  filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.  Confidential treatment has been requested with respect to the omitted information

 

	
  

	
6.

	
Representations and Warranties

	
  

	
6.1.

	
Abaxis and Cepheid each represents and warrants to the other that: (i) it has the requisite power and authority to enter into this Agreement; (ii) it has duly executed and delivered this Agreement; (iii) this Agreement constitutes its valid and binding obligation enforceable against it, in accordance with the terms of this Agreement; and (iv) it has not assigned or otherwise transferred, either in whole or in part, any claim released in this Agreement.

	
  

	
6.2.

	
Abaxis hereby represents and warrants to Cepheid that it owns all right, title, and interest in the Abaxis Patents[***].

	
  

	
7.

	
Term

	
  

	
7.1.

	
This Agreement shall commence on the Effective Date and continue thereafter in full force and effect in perpetuity.

	
  

	
8.

	
Notice, Right to Cure, and Termination

	
  

	
8.1.

	
In the event that a Party (the “Complaining Party”) considers that the other Party hereto (the “Allegedly Breaching Party”) has breached a term or provision of this Agreement, the Complaining Party shall give written notice to the Allegedly Breaching Party describing the nature of the breach in reasonable detail.  The Allegedly Breaching Party shall then have thirty (30) calendar days to cure the alleged breach.

	
  

	
8.2.

	
The provisions of Section 8.1 shall be followed by the Parties prior to the initiation of any suit or legal proceeding relating to this Agreement, including any suit or legal proceeding to enforce the terms of this Agreement, except that each Party may seek injunctive relief at any time from a Court of competent jurisdiction to enforce the terms of this Agreement.

	
  

	
8.3.

	
All notices, requests, or demands hereunder shall be made to the following representatives of the Parties by FedEx or comparable courier service and also to the facsimile numbers set forth below, unless another address or facsimile number is specified hereafter in writing by a Party.  Notice shall be effective upon receipt.

 

	
If to Cepheid:

	
If to Abaxis:

	 	 
	
Attn:  General Counsel

	
Attn:  Chief Executive Officer

	
Cepheid

	
Abaxis, Inc.

	
904 Caribbean Drive

	
3240 Whipple Road

	
Sunnyvale, California 94089

	
Union City, California 94587

	
Fax:  408-541-6439

	
Fax:  510-441-6150

 

  

6

  

 

[ ***] = Certain confidential information contained in this document, marked by brackets and asterisks,  has been omitted and  filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.  Confidential treatment has been requested with respect to the omitted information

 

	
  

	
9.

	
Other/General

	
  

	
9.1.

	
[***]

	
  

	
9.2.

	
Each Party shall be responsible for its own tax reporting regarding this Agreement.

	
  

	
9.3.

	
Assignment.  Except as otherwise expressly provided under this Agreement neither this Agreement nor any right or obligation hereunder may be assigned or otherwise transferred (whether voluntarily, by operation of law or otherwise), without the prior express written consent of the other Party; provided, however, that either Party may, without such consent, assign this Agreement and its rights and obligations hereunder in connection with the transfer or sale of all or substantially all of its business, or in the event of its merger, consolidation, change in control or similar transaction.  Any permitted assignee shall assume all rights and obligations of its assignor under this Agreement.  Any purported assignment or transfer in violation of this Section 9.3 shall be null and void.  This Agreement is binding on and inures to the benefit of the Parties and their permitted successors and assigns.  All rights, releases, and covenants contained herein shall run with the Abaxis Patents and shall be binding on any successors-in-interest or assigns thereof.

	
  

	
9.4.

	
Nothing in this Agreement is intended or shall be deemed to constitute a partnership, agency, employer-employee, or joint venture relationship between the Parties.  No Party shall incur any debts or make any commitments for the other.  There is no fiduciary duty or special relationship of any kind between the Parties to this Agreement.  Each Party expressly disclaims any reliance on any act, word or deed of the other Party in entering into this Agreement.

	
  

	
9.5.

	
This Agreement constitutes the entire agreement of the Parties with respect to the subject matter hereof and supersedes all prior representations, discussions, negotiations, agreements, and understandings, whether written or oral, with respect thereto.

	
  

	
9.6.

	
This Agreement may not be amended unless the amendment is in writing and signed by an authorized representative of each Party.

	
  

	
9.7.

	
This Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be deemed an original, and all of which counterparts taken together shall constitute one and the same instrument.  Facsimile or pdf signatures shall be deemed original signatures.

	
  

	
9.8.

	
The section headings contained in this Agreement are for convenience only and shall not in any way affect the meaning or interpretation of the provisions hereof.

 

  

7

  

 

[ ***] = Certain confidential information contained in this document, marked by brackets and asterisks,  has been omitted and  filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.  Confidential treatment has been requested with respect to the omitted information

 

	
  

	
9.9.

	
This Agreement was jointly drafted by the Parties and the language of all parts of this Agreement shall in all cases be construed as a whole according to its meaning and not strictly for or against any of the Parties.

	
  

	
9.10.

	
This Agreement and matters connected with the performance thereof shall be construed, interpreted, applied and governed by the laws of the State of California without regard to the conflict of law principles thereof.

	
  

	
9.11.

	
Any action brought by either Party that arises out of or relates to this Agreement, and specifically including any future attempt to enforce the terms of this Agreement, shall be filed in the U.S. District Court for the Northern District of California to the extent it has subject matter jurisdiction, or otherwise in the California Superior Court for the County of Santa Clara.

	
  

	
9.12.

	
Except for claims arising out of Article 5 of this Agreement, neither Party shall be liable to the other Party or any other person or entity (under contract, strict liability, negligence, or other theory) for special, indirect, exemplary, incidental, or consequential damages, including lost profits, opportunities or savings, arising out of or related to the subject matter of this Agreement.

	
  

	
9.13.

	
If any portion of this Agreement is found to be invalid, illegal, or unenforceable for any reason, the remainder of the Agreement shall continue in force and, if needed, the Parties or a court of competent jurisdiction specified in Section 9.11 above shall substitute suitable provisions having like economic effect and intent.

	
  

	
9.14.

	
The Parties agree to execute and deliver any additional papers, documents, and other assurances and take all actions reasonably necessary to carry out the intent of this Agreement.

	
  

	
9.15.

	
Nothing in this Agreement nor any act required to be performed pursuant to this Agreement is intended to constitute, cause or effect any waiver (in whole or in part) of any attorney-client privilege or work product protection.

(Signature page follows)

  

8

  

[ ***] = Certain confidential information contained in this document, marked by brackets and asterisks,  has been omitted and  filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.  Confidential treatment has been requested with respect to the omitted information

 

IN WITNESS WHEREOF, the Parties have hereunto signed their names on the dates indicated.

 

	

Abaxis, Inc.

	
Cepheid

	 	 
	

By: /s/ Kenneth Aron

	
By: /s/ John L. Bishop

	 	 
	

Name:  Kenneth Aron

	
Name:  John L. Bishop

	 	 
	

Title: CTO

	
Title:  CEO

	 	 
	
Date:9/24/2012

	
Date:  9/24/12

 

  

9

  

 

[ ***] = Certain confidential information contained in this document, marked by brackets and asterisks,  has been omitted and  filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.  Confidential treatment has been requested with respect to the omitted information

 

Exhibit A

The filed stipulation shall state: “Pursuant to Federal Rule of Civil Procedure 41(a)(1)(A)(ii), the parties voluntarily dismiss all claims and counterclaims in this action with prejudice.”

 

 

10

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