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SEPARATION AGREEMENT AND MUTUAL
RELEASE
This Separation Agreement and Mutual Release (this "AGREEMENT"),
dated as
of August 10, 2007, is entered into by and between Patron
Systems, Inc., a
Delaware corporation (the "COMPANY"), and Braden Waverley, an
individual
("EXECUTIVE").
A. The Company and Executive entered into that certain Executive
Employment
Agreement dated February 17, 2006 and amended January 24, 2007,
June 13,
2007 and June 28, 2007 (the "EMPLOYMENT AGREEMENT"), pursuant to
which the
Company employed Executive, as more fully described therein;
and
B. Executive resigned his employment, and resigned as a member
of the
Company's board of directors, effective on August 13, 2007.
NOW, THEREFORE, for good and valuable consideration, the receipt
and
sufficiency of which are hereby acknowledged, the parties hereby
agree as
follows:
1. Resignation; Termination of Employment Agreement.
Notwithstanding
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anything to the contrary which may be contained in the
Employment Agreement, the
parties hereby acknowledge and agree that, effective as of
August 13, 2007:
1.1 Executive is no longer employed by the Company in any
capacity;
1.2 The Employment Agreement is terminated and of no further
force or
effect; and
1.3 Except as expressly provided herein, all responsibilities,
duties
and obligations of Executive to the Company and of the Company
to Executive
under the Employment Agreement shall be terminated and of no
further force or
effect.
2. Consideration. As full and complete consideration for the
covenants and
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agreements hereunder:
2.1 The Company hereby waives and releases executive from any
and all
non-solicitation and non-competition restrictions set forth in
Article 9 of the
Employment Agreement, and hereby covenants to take commercially
reasonable
measures to ensure the continued effectiveness of the Company's
existing
director and officer liability insurance policy (the "D&O
POLICY") until the
statute of limitations for personal claims against Executive as
an officer or
director of the Company shall have run, provided, however, that
the measures
taken to ensure such continued effectiveness shall not violate
the fiduciary
duties of the Company's officers and directors to the Company's
creditors and
shareholders, and provided, further, that:
2.1.1 In the event the Company enters into a sale of all or
substantially all of its assets or a sale of the outstanding
capital stock of
the Company for cash, the definitive agreement governing such
asset sale or
stock purchase shall provide for the payment of the premiums for
continued
coverage of the D&O Policy out of the proceeds from the
asset sale or stock
purchase;
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<PAGE>
2.1.2 The Company will further pay, or arrange for payment of,
any
individual policy deductible expenses accruing to Executive that
arise from any
liability sought to be covered under the D&O Policy; and
2.1.3 The Company agrees that it shall maintain under its
charter
the current provisions for indemnification of officers and
directors, including
former officers and directors, which include full
indemnification and limitation
of liability to the full extent of the law. The Company further
agrees that it
shall not modify, amend or terminate its charter to exclude or
limit indemnities
for its former officers, directors and employees.
The Company further agrees that it shall repay, upon the
execution of this
agreement by the parties hereto, all expenses incurred on behalf
of the Company
by Executive through the date hereof in compliance with the
Company's expense
reimbursement policies, including the reasonable legal fees
incurred by
Executive in conjunction with this Agreement.
2.2 With full understanding of his rights under applicable
law,
Executive hereby waives all severance payments and continuation
of benefits set
forth in Section 4.1 of the Employment Agreement, hereby
terminates and waives
all accrued but unused vacation or PTO days pursuant to the
Company's vacation
policy as of the date hereof, and acknowledges and agrees that
no such
obligations remain outstanding, and hereby forfeits all
outstanding stock
options granted to Executive by the Company. Notwithstanding
anything to the
contrary which may be contained in the Employment Agreement,
Executive
acknowledges that the consideration set forth in Section 2.1
fully satisfies all
obligations of the Company to Executive under the Employment
Agreement (whether
attributable to salary, bonus payments, vacation pay, expenses
or other
amounts).
3. Additional Covenants of the Company and Executive.
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3.1 The Company hereby expressly covenants that it shall not
object to
any of the following actions, including, without limitation, the
use or
disclosure of any information related to the Company which is
known by Executive
in connection with such actions, taken by Executive after the
date hereof:
3.1.1 Executive's employment by any person who subsequently
purchases the Company's assets or stock;
3.1.2 Executive's submission of an offer to acquire the
Company's
assets; and
3.1.3 Executive's engagement as a consultant to the
Company's
creditors to aid in the sale of the Company or substantially all
of its assets;
3.2 The Company shall take all necessary actions to ensure
continuation
of Executive's health and dental benefits under COBRA, provided
that Executive
shall pay all premiums in connection with such continued
coverage.
3.3 The Company shall take all necessary actions to ensure
the
expedient rollover of Executive's 401K funds to an investment
retirement account
of Executive's choice.
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3.4 Neither party shall make any statement or allegation to any
third
party, nor make any public announcement, press release or
broad-tape release,
public speech or permit press interviews, which expressly or
impliedly indicates
that the other party breached or defaulted under any obligation
or commitment to
it, or which might reasonably have the effect of disparaging
such other party or
injuring or harming the personal or business reputation of the
other party.
3.5 Executive represents and agrees that, as of the date hereof,
he has
turned over to the Company all files, memoranda, records and
other documents,
and any other physical or personal property that are the
property of the Company
that he had in his possession, custody or control (whether
directly or
indirectly) on the date hereof.
4. Mutual Release.
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4.1 Executive's Release. Subject to Section 5, Executive, for
himself
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and on behalf of his successors, assigns, agents, attorneys,
representatives,
heirs, executors and administrators (collectively, the
"EXECUTIVE PARTIES" and
individually, an "EXECUTIVE PARTY"), hereby releases and forever
discharges and
agrees to hold harmless the Company and its successors, assigns,
officers,
directors, shareholders, employees, affiliates, subsidiaries,
parent
corporations, agents, attorneys and representatives, past and
present
(collectively, the "COMPANY PARTIES" and individually, a
"COMPANY PARTY") from
any and all demands, claims, duties, actions, obligations or
causes of action,
assessments, losses, damages, liabilities, costs and expenses
(including
attorneys' fees) of any kind, nature or description, whether
known or unknown,
suspected or unsuspected, fixed or contingent (collectively, the
"RELEASED
CLAIMS"), that Executive or any Executive Party currently has or
possesses, or
had prior to the date of this Agreement or at any time may have
against the
Company and/or against one or more Company Parties, arising out
of, based upon
or in any way related to (i) the Employment Agreement or any
other employment
agreement, or any other contracts, express or implied, any
covenant of good
faith and fair dealing, express or implied, any theory of
wrongful discharge,
negligence, negligent or intentional infliction of emotional
distress, negligent
or intentional interference with contract or prospective
economic advantage,
negligent or intentional misrepresentation, conspiracy,
defamation (including
libel and slander), invasion of privacy, fraud, quantum meruit,
failure to pay
compensation of any kind, failure to pay equal compensation for
equal work or
any legal restriction on the Company's right to terminate
employees; (ii)
Executive's employment with the Company or the cessation
thereof, any claims for
wages, compensation of any kind, automobile allowance, vacation
pay, severance
pay, bonuses or damages of any kind whatsoever, including
without limitation all
claims for or under, among other things, Title VII of the C
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