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Exhibit 10.17  

 
 

SEPARATION AGREEMENT    
    

        This Separation Agreement (the "Agreement") is entered into among Fischer Imaging Corp. (the
"Company"), SenoLase Inc. ("SenoLase") and Morgan Nields ("Employee"). 

 
 

RECITALS    
    

        WHEREAS, Employee is employed by the Company at its offices at 12300 North Grant Street, Denver, Colorado 80241 as a regular full-time employee with
the title "Chief Technology Officer" and serves as a member of the Company's Board of Directors; 

        WHEREAS,
Employee was a founder of the Company and served as its Chief Executive Officer until December 2000 and as its Chairman until May 2003; 

        WHEREAS,
Employee wishes to terminate his regular full-time employment with the Company and to resign as a member of the Company's Board of Directors, in order to concentrate
on development and execution of a plan to spin-out SenoLase, a development stage company with little or no tangible assets which is a majority owned subsidiary of the Company; 

        WHEREAS,
in consideration therefor, the Company wishes to enter this Separation Agreement, which, among other things, provides for (1) deferred compensation payments,
(2) payment of sales commissions with respect to potential sales to certain clients of the Company listed in Exhibit A attached hereto
(the "Commission Clients") and (3) Employee's continuation as Chief Executive Officer of SenoLase; and 

        WHEREAS,
in order to accomplish these ends, the parties hereto are willing to enter into this Agreement. 

 
 

AGREEMENT    
    

        NOW THEREFORE, in exchange for the consideration and other agreements specified in this Agreement, the sufficiency of which is hereby acknowledged, the parties
hereto agree as follows: 

        1.     Employee's Resignation and Deferred Compensation Payments. Employee hereby (i) voluntarily resigns as a regular,
full-time employee of the Company with the title "Chief Technology Officer" and (ii) voluntarily resigns as a member of the Company's Board of Directors, in each case effective
December 31, 2003 (the "Resignation Date") and (iii) agrees to remove all of his personal articles and vacate his office on the Company's
premises on or before March 1, 2004. The Company agrees to make twelve (12) payments of $16,666.67 each to Employee, aggregating $200,000, no later than the 15th day of each month in
calendar 2004, beginning on January 15, 2004. Employee agrees that the Company shall be entitled to withhold all taxes and other amounts required by law from such payments and pay Employee the
net amount after deduction thereof. Employee further agrees that he is not entitled to any other pay or post-employment compensation other than these payments and the other consideration
expressly set forth in this Agreement and that he will not make any claim for any such further payments or consideration, under any prior or existing agreement, plan or policy of Company, including
but not limited to the Company's executive retention bonus plan. 

        2.     SenoLase. The Company, Employee and SenoLase hereby agree that Employee shall continue to serve as Chief Executive Officer
and as a director of SenoLase until December 31, 2004, subject to the direction of the SenoLase Board of Directors, a majority of whom shall be named by the Company. Such employment may be
terminated by Employee at any time and by SenoLase with or without Cause (as defined in Section 5 below). It is the expectation of the parties that Employee will pursue a plan for spinning out
SenoLase from the Company, upon such terms as are acceptable to the third parties who propose to provide financing to SenoLase and to the SenoLase Board of Directors. 

 

        3.     Commission Agreement. While Employee is not required to provide any services to the Company with respect to such
Commission Clients or otherwise after the Resignation Date, the Company agrees to pay Employee sales commissions on product sales by the Company after the Resignation Date to the Commission Clients
listed on Exhibit A hereto as follows: 

        (a)   A-List Client Commissions. As compensation for Employee's material assistance prior to the Resignation Date
in facilitating sales to the clients listed under column A of Exhibit A attached hereto ("A-List
Clients"), the Company agrees to deliver 3.5% of the net revenues generated from sales to such A-List Clients to Employee, as a commission on such sales, based on
booked orders accepted by the Company prior to the expiration of the Commissions Term, subject to the conditions and except as otherwise set forth in this  Section 3. "Commissions Term" means the period from June 1, 2003 through
December 31, 2004. 

        (b)   B&C-List Client Commissions. As compensation for Employee's material assistance prior to the Resignation Date
in facilitating sales to the clients listed under column B or column C of Exhibit A attached hereto
("B&C-List Clients"), the Company agrees to deliver 1.5% of the net revenues generated from sales to such B&C-List Clients to
Employee, as a commission on such sales, based on booked orders accepted by the Company prior to the expiration of the Commissions Term, subject to the conditions and except as otherwise set forth in
this Section 3. 

        (c)   Payment Date; No Draw. Commission payments will me be made to Employee based on a pro rata basis as cash is received from
the sale and will be paid within 30 days of the Company's receipt of payments. Subject to the foregoing, Commissions shall be payable in respect of orders accepted by the Company prior to the
expiration of the Commissions Term, regardless of when payment is made by the Commission Client, or when the product is delivered or services are performed. Employee shall not receive a draw against
any unpaid Commissions payable. 

        (d)   Health Insurance. Employee may timely elect continuation coverage under the Consolidated Omnibus Budget Reconciliation
Act of 1985, as amended ("COBRA"), but Employee will be responsible for paying all premiums for Employee and Employee's eligible dependents if and to
the extent he elects continuation of coverage under COBRA for himself or for such dependents. 

        (e)   No Expense Reimbursement. The Company will not reimburse Employee for any expenses incurred after the Resignation Date
but shall reimburse Employee for reasonable expenses incurred prior to that date in accordance with the Company's current expense reimbursement policy. 

        (f)    Commission Term. The Company's obligations to pay any Commissions shall immediately terminate if the Company terminates
this Agreement for Cause pursuant to Section 5 below but Employee shall be under no obligation to repay any Commissions paid prior to the date of such termination. 

        4.     Litigation Defense Costs. 

        (a)   Advancement of Expenses. The Company agrees to advance reasonable legal fees and expenses in connection with
(i) the pending Securities and Exchange Commission ("SEC") investigation relating to the Company's restatement of its financial statements and
related matters, (ii) any related private party litigation (whether pending as of the date hereof or filed hereafter) and (iii) any other investigations or legal proceedings related to
the matters which are the subject of (i) and (ii) above (the "Matters"), provided, however, that such advances may be suspended if a
Special Committee of the Company's Board of Directors subsequently determines that Employee's conduct with respect to the matters covered by the SEC investigation and related private litigation did
not meet the standard set forth in the Delaware General Corporation Law, namely the obligation to act in good faith and with the reasonable belief that his actions were in or not 

2

 

opposed
to the best interests of the Company (the "Statutory Standard"). Such advances shall be made within thirty (30) days of Employee's
request. As used herein, "Special Committee" means any committee of disinterested directors established by the Company's Board of Directors to assess
the entitlement of directors, officers, employees or agents of the Company to indemnification under the Company's Certificate of Incorporation, Bylaws, indemnification agreements or otherwise. 

        (b)   Refund. Notwithstanding the foregoing, if the Special Committee subsequently determines in good faith that Employee did
not meet the Statutory Standard with respect to the Matters, Employee agrees to reimburse the Company for all sums provided to Employee for the Matters within 30 days of being notified of such
determination. 

        (c)   Preservation of Indemnification Rights. This Section 4 shall govern the terms under which expenses will be
advanced to Employee for the Matters. Nothing in this Section 4 is intended to diminish or affect Employee's right to indemnification under the Company's Certificate of Incorporation, Bylaws,
the September 29, 1999 Indemnification Agreement between the Company and Employee or the Delaware General Corporation Law. 

        (d)   Formal Undertaking by Employee. Employee agrees that, as a condition to advancement of expenses pursuant to this
Agreement, Employee will execute a formal undertaking providing for reimbursement of the Company for advances under the circumstances described in (b) above and requiring Employee's cooperation
with the Company in connection with the Company's defense of the Matters. 

        5.     Termination. Notwithstanding any other term in this Agreement, the Company may terminate this Agreement immediately for
Cause. As used herein, "Cause" shall mean the following: (a) Employee's knowing commission of a fraudulent act that causes material injury to the
Company; (b) Employee's material breach of any of his covenants or agreements hereunder, which breach is not cured within 30 days of written notice by the Company; or
(c) Employee's conviction of a crime that either results in imprisonment or involves embezzlement, dishonesty, or activities materially injurious to the Company or its reputation, whether in
connection with the Company's affairs or otherwise. Whether Cause exists to terminate this Agreement shall be determined in the reasonable discretion of the Company's Board of Directors. In the event
of a termination of this Agreement for Cause, the Company will not have any ongoing financial obligations to Employee whatsoever and Employee will not be entitled to any further compensation, payments
or benefits set forth in this Agreement; provided, however, that termination of this Agreement shall not affect the Company's obligations under Section 4 hereof. 

        6.     Stock Options. Employee currently holds certain options to purchase shares of the Company's common stock (the
"Options") which would, under the terms of the plan under which the options were granted, remain exercisable for ninety (90) days after the
Resignation Date. The Company agrees to extend the date on which the Options may be exercised until the later of (i) December 31, 2004, or (ii) six months after the Company is
listed on the Nasdaq Stock Market or a national securities exchange (but in no event later than June 30, 2005). 

        7.     Independent Contractor. After the Resignation Date, Employee will be treated by the Company as an independent contractor
and will not be eligible to participate as an employee in any benefit or benefit plan offered by the Company to its employees. 

        8.     Taxes. The Commissions and other consideration provided to Employee by the Company under this Agreement shall be treated
by the Company as income to Employee from which federal and state withholding and taxes shall be deducted. 

        9.     The Company's Confidential Information. Employee acknowledges that, by reason of Employee's past and current positions
with the Company, Employee has been given access to 

3

 

Confidential
Information with respect to the business affairs of the Company. The Company's "Confidential Information" includes, but is not limited to, any trade secrets, strategic product plans, new
product information, customer lists, customer information, financial information, new product introduction plans, product suppliers terms and agreements, supplier agreements, etc. "Confidential
Information" does not include information that is publicly disclosed by the Company, is in the public domain, or that Employee obtains from a third party without breach of this agreement. Employee
represents and agrees that Employee has not disclosed any material Confidential Information to any third party in violation of his obligations to the Company. Employee further agrees that following
the Resignation Date Employee will not, directly or indirectly, use, disclose, or cause to be used or disclosed in any way, any Confidential Information obtained as a result of or in connection with
Employee's employment with the Company, without the express prior written consent of the Company. 

        10.   Return of Company Property. Employee agrees to return all of the Company's property to the Company by delivering it to
Stephen G. Burke, the Company's Executive Vice President and CFO, no later than the Resignation Date. This property includes, but is not limited to, the Company's documents and files (in any recorded
media, such as papers, computer disks, copies, transparencies, and microfiche), materials, PDAs, cell phones, keys, credit cards, sports tickets, laptops, computer disks and badges, provided, however,
that if and to the extent that Employee continues to utilize his office at the Company's headquarters building after the Resignation Date up to February 29, 2004 (the
"Holdover Period") as permitted by this Agreement, Employee may retain a key to the building and to his office and may continue to use the computer and
other Company property currently in his office during the Holdover Period. During the Holdover Period, Employee may also utilize the Company's secretarial and other office services as he has done in
the past. Employee agrees that, to the extent that Employee possesses any files, data, or information relating in any way to the Company or the Company's business on any personal computer, Employee
will delete the data, files, or information (and will retain no copies in any form) on the Resignation Date or before the end of the Holdover Period. Employee may, at his option, assume the lease (and
related buyout option) for his vehicle currently leased by the Company. The Company shall be responsible for cancellation charges on any cell phone or PDA used previously used by Employee for Company
business which Employee returns to the Company pursuant to this Section 10. 

        11.   Employee's ADEA Release of the Company. Employee acknowledges and agrees that, by entering into this Agreement, Employee
is waiving any and all rights that he may have arising from the Age Discrimination in Employment Act of 1967 ("ADEA"), as amended, which have arisen on
or before the date of execution of this Agreement. Employee further expressly acknowledges and agrees that: 

        (a)   Consent. Employee is entering this Agreement voluntarily. 

        (b)   Litigation. Employee understands and agrees that, by signing the Agreement, he is giving up any right to file legal
proceedings against the Company arising before the date of the Agreement. Employee is not waiving (or giving up) rights or claims that may arise after the date the Agreement is executed. 

        (c)   Consideration. In return for this Agreement, Employee will receive compensation due him as a result of this Agreement. 

        (d)   Legal Representation. Employee is hereby advised in writing by this Agreement to consult with an attorney before signing
this Agreement. 

        (e)   Notice. Employee understands that he has had at least twenty-one (21) days in which to consider the
terms of this Agreement. In the event that Employee executes this Agreement in less time, it is with the full understanding that he had the full twenty-one (21) days if he so
desired and that he was not pressured by the Company or any of its representatives or agents to take less time 

4

 

to
consider the Agreement. In such event, Employee expressly intends such execution to be a waiver of any right he had to review the Agreement for a full twenty-one (21) days. 

        (f)    Right to Rescind. Employee further understands that he may rescind (that is, cancel) this Agreement for any reason within
seven (7) calendar days after signing it. Employee agrees that the rescission must be in writing and hand-delivered or mailed to the Company. If mailed, the rescission must
be postmarked within the seven (7) day period, properly addressed to: 

Fischer Imaging Corp.

Attn: Stephen G. Burke

Executive Vice President and CFO

12300 North Grant Street

Denver, CO 80241  

and sent by certified mail, return receipt requested. 

        (g)   Payments. Employee understands that he will not receive any payment or other consideration under this Agreement if he
revokes or rescinds it, and in any event, Employee will not receive any payment or consideration until after the seven (7) day revocation period has expired. 

        12.   No Other Releases. Employee and the Company agree that, by entering into this Agreement, other than the ADEA claims
released by Employee in Section 11 hereof, neither Employee nor the Company have released or waived any claims that either one may have against the other for any reason. 

        13.   Confidentiality of Agreement. Employee acknowledges that the Company may be required to disclose the contents of this
Agreement to comply with its obligations under applicable securities laws and that, as a result, he has no reasonable expectation that it or its contents will remain confidential. 

        14.   No Admission of Liability. The Company and Employee agree that nothing contained in this Agreement, and no action taken
by the Company or Employee with regard to this Agreement, shall be construed as an admission of liability or any fact that may give rise to liability for any purpose whatsoever by the Company or
Employee. 

        15.   Injunctive Relief. In the event of a breach of any of the covenants contained in this Agreement, it is understood that
damages will be difficult to ascertain and the Company may petition a court of law or equity for injunctive relief in addition to any other relief which the Company may have under the law or under
this Agreement. 

        16.   Non-Disparagement. Employee agrees not to make to any person any statement that disparages the Company or
reflects negatively upon the Company, including, without limitation, any statement regarding the Company's financial condition, business practices, employment practices, or its officers, directors,
employees, or affiliates. Company agrees not to make any statement that disparages Employee. 

        17.   Acknowledgments. Employee acknowledges and agrees that up to the Resignation Date, the Company has paid Employee all
employment compensation and has provided Employee with all benefits to which Employee is entitled through and including the Resignation Date. 

        18.   Severability. If any provision of this Agreement is declared by any court of competent jurisdiction to be invalid for any
reason, such invalidity shall not affect the remaining provisions of this Agreement, which shall be fully severable, and given full force and effect. Any claim by Employee against the Company shall
not constitute a defense to enforcement by the Company. 

        19.   Governing Law and Venue. This Agreement shall be construed in accordance with the laws of Colorado. Venue and
jurisdiction will be in Colorado state or federal courts. 

5

 

        20.   Entire Agreement. The parties hereto understand and agree that this Agreement contains all the agreements between the
Company and Employee. Except as expressly stated herein, this Agreement supersedes any and all prior oral or written promises or agreements between the Company and Employee. Employee acknowledges that
he has not relied upon any promise, representation, or statement other than those set forth in this Agreement. This Agreement cannot be modified except in a writing signed by the Company and Employee. 

        21.   Assignment. The Company may assign its rights under this Agreement. No other assignment will be permitted except by
written permission of the Company and Employee. 

        22.   Counterparts; Facsimile Signature. This Agreement may be executed simultaneously in two or more counterparts, any one of
which need not contain the signatures of more than one party, but all of which taken together shall constitute one and the same Agreement. This Agreement may be executed by facsimile signature and a
facsimile signature shall constitute an original signature. 

        23.   Attorney's Fees. In the event a party hereto commences legal proceedings to enforce the terms of this Agreement, the
prevailing party shall be entitled to recover its or his attorneys' fees. 

*
* * * * 

6

 

        IN
WITNESS WHEREOF, the parties hereto have executed this Separation Agreement as of the date first set forth above. 

CAUTION; PLEASE READ ENTIRE DOCUMENT BEFORE SIGNING  

	

FISCHER IMAGING CORPORATION	
 	

MORGAN NIELDS
	

By:	
 	

/s/  HARRIS RAVINE      
 Harris Ravine, President	
 	

/s/  MORGAN W. NIELDS      
        Morgan Nields, individually
	

Dated:	
 	

12/19/03
	
 	

Dated:	
 	

	
SENOLASE INC.	
 	

 
	

By:	
 	

/s/  MORGAN W. NIELDS      
	
 	

 

	

Typed Name:	
 	

Morgan W. Nields
	
 	

 

	

Title:	
 	

CEO & President
	
 	

 

	

Dated:	
 	

	
 	

 

7

 
 
 

EXHIBIT A    
    

	Column A	 	Column B	 	Column C
	

UCSF

UCSD

Tommy Cupples

Palmetto Richland

Kathy Schilling

Martin Yaffe/Sunnybrook

Northwestern

HUP

Pittsburgh McGee

Duke

Mayo Clinic

UCLA

Stanford

University of New Mexico

Emory

U Mass

Moffit

Michigan

Brigham and Womens

Mt. Sinai Toronto	
 	

St Joe's Orange

Palmetto Baptist

Pittsburgh Allegheny General

Sally Jobe Breast Center

MD Anderson

University of Minnesota

Wende Young MD

Shaw Cancer Center

University of Colorado

Len Glassman MD	
 	

Kings College

St Barts

Lattazio Bari

Tabar Falun

Erlangen

Dana/Levy

Prof. Wolf Berlin

8

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AGREEMENT

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Exhibit 10.18  

 
 

ACCOUNTS RECEIVABLE FINANCING MODIFICATION AGREEMENT    
    

        This Accounts Receivable Financing Modification Agreement is entered into as of April 9, 2004, by and between Fischer Imaging Corporation (the "Borrower")
and Silicon Valley Bank ("Bank"). 

        1.    DESCRIPTION OF EXISTING INDEBTEDNESS:    Among other indebtedness which may be owing by Borrower to Bank,
Borrower is indebted to Bank pursuant to, among other documents, an Accounts Receivable Financing Agreement, dated June 11, 2003 by and between Borrower and Bank, as may be amended from time to
time (the "Accounts Receivable Financing Agreement"). Capitalized terms used without definition herein shall have the meanings assigned to them in the Accounts Receivable Financing Agreement. 

        Repayment
of the Indebtedness is secured by the Collateral as described in the Loan Agreement and in that certain Intellectual Property Security Agreement (the "IP Agreement"). 

        Hereinafter,
all indebtedness owing by Borrower to Bank shall be referred to as the "Indebtedness" and the Accounts Receivable Financing Agreement and any and all other documents
executed by Borrower in favor of Bank shall be referred to as the "Existing Documents." 

        2.    DESCRIPTION OF CHANGE IN TERMS.    

        A.    Modification(s) to Accounts Receivable Financing Agreement:    

        1.     Effective
as of January 1, 2004, Item "(L)" under Section 6.2 entitled "Affirmative Covenants" is hereby amended to read as follows: 

        Borrower
will maintain at all times a Tangible Net Worth of no less than $10,000,000, which such amount may be adjusted from time-to-time by Bank in Bank's sole
discretion. 

        B.    Waiver of Financial Covenant Default.    

        1.     Bank
hereby waives Borrower's existing default under the Accounts Receivable Financing Agreement by virtue of Borrower's failure to comply with the Tangible Net Worth
financial covenant through December 31, 2003. Bank's waiver of Borrower's compliance of this covenant shall apply only to the foregoing period. Accordingly, beginning with January 1,
2004, Borrower shall be in compliance with this covenant, as amended herein. 

        Bank's
agreement to waive the above-described default (1) in no way shall be deemed an agreement by the Bank to waive Borrower's compliance with the above-described covenant as of
all other dates and (2) shall not limit or impair the Bank's right to demand strict performance of this covenant as of all other dates and (3) shall not limit or impair the Bank's right
to demand strict performance of all other covenants as of any date. 

        3.    CONSISTENT CHANGES.    The Existing Documents are each hereby amended wherever necessary to reflect the changes
described above. 

        4.    PAYMENT OF LINE FEE.    Borrower shall pay Bank a fee in the amount of Ten Thousand Dollars ($10,000) ("Line
Fee") plus all out-of-pocket expenses. 

        5.    NO DEFENSES OF BORROWER.    Borrower agrees that, as of this date, it has no defenses against the obligations to
pay any amounts under the Indebtedness. 

        6.    CONTINUING VALIDITY.    Borrower understands and agrees that in modifying the existing Indebtedness, Bank is
relying upon Borrower's representations, warranties, and agreements, as set forth in the Existing Documents. Except as expressly modified pursuant to this Accounts Receivable Financing Modification
Agreement, the terms of the Existing Documents remain unchanged and in full force and effect. Bank's agreement to modifications to the existing Indebtedness pursuant to this Accounts Receivable
Financing Modification Agreement in no way shall obligate Bank to make any future modifications to the Indebtedness. Nothing in this Accounts Receivable Financing Modification 

 

Agreement
shall constitute a satisfaction of the Indebtedness. It is the intention of Bank and Borrower to retain as liable parties all makers and endorsers of Existing Documents, unless the party is
expressly released by Bank in writing. No maker, endorser, or guarantor will be released by virtue of this Accounts Receivable Financing Modification Agreement. The terms of this paragraph apply not
only to this Accounts Receivable Financing Modification Agreement, but also to any subsequent Accounts Receivable Financing modification agreements. 

        7.    CONDITIONS.    The effectiveness of this Accounts Receivable Financing Modification Agreement is conditioned
upon payment of the Line Fee. 

        8.    COUNTERSIGNATURE.    This Accounts Receivable Financing Modification Agreement shall become effective only when
executed by Borrower and Bank. 

        This
Accounts Receivable Financing Modification Agreement is executed as of the date first written above. 

	
BORROWER:	
 	

BANK:
	
 Fischer Imaging Corporation	
 	

Silicon Valley Bank
	

By:	
 	

	
 	

By:	
 	

	Name:	 	 	 	Name:	 	 
	 	 	
	 	 	 	

	Title:	 	 	 	Title:	 	 
	 	 	
	 	 	 	

2

 

[Logo] 

SILICON VALLEY BANK  

PRO FORMA INVOICE FOR LOAN CHARGES  

	BORROWER:	 	Fischer Imaging Corporation	 	 	 	 	 
	

LOAN OFFICER:	
 	

Bill Nay	
 	
 	

 	
 	

 
	

DATE:	
 	

April 9, 2004	
 	
 	

 	
 	

 
	

 	
 	

Line Fee	
 	
$	

10,000.00	
 	

 
	 	 	Documentation Fee	 	 	250.00	 	 
	

 	
 	

TOTAL FEE DUE	
 	
$	

10,250.00	
 	

 
	 	 	
	 	
	 	 

Please indicate the method of payment:  

	o
	 A check for the total amount is attached.

 
	o
	 Debit DDA
#                        for the total amount.

 
	o
	 Loan proceeds  

	

	
 	

 
	Borrower	 	(Date)	 	 
	

	
 	

 
	Silicon Valley Bank	 	(Date)	 	 
	Account Officer's Signature	 	 	 	 

3

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