SEPARATION AND RELEASE AGREEMENT
THIS
SEPARATION AND RELEASE AGREEMENT (the “Agreement”) is entered into, effective as
of the last date written below, by and among XXXXXXX X. XXXXX (“Director”), RTH
CONSULTING INC. (“RTH”), and TECHNOCONCEPTS INC. (the “Company”).
WHEREAS,
Director is the principal of RTH; and
WHEREAS,
Director and the Company have had a business relationship wherein Director
has
been a director (but not an employee) of the Company and RTH provided consulting
services to the Company; and
WHEREAS,
Director and RTH have disclosed all material facts with respect to their
consulting agreement with the Company and with any entity which the Company
has
contacted regarding a business relationship, and the Company’s board has
reviewed all information and ratified and approved such disclosed
self-interested transactions of Director; and
WHEREAS,
the consulting agreement between RTH and the Company expired by its own terms
on
January 31, 2006; and
WHEREAS,
amounts are owing to RTH pursuant to the consulting agreement between RTH and
the Company, but such amounts are in dispute; and
WHEREAS,
Director wishes to resign amicably from the Company as described herein;
and
WHEREAS,
Director, RTH, and the Company wish to end their relationship with all actual
and potential disputes between them completely and amicably resolved, so that
there are no disagreements among them:
NOW,
THEREFORE, in consideration of the mutual covenants contained herein, and in
consideration of the amounts to be paid by the Company to Director under this
Agreement, amounts which are disputed by the Company, Director and the Company
hereby agree as follows:
1. Resignation
from Company.
Director hereby resigns from the Company and shall no longer serve as a director
of the Company as of the date written below (the “Separation Date”).
2. Payment
by Company.
On the
Separation Date, the Company shall pay to Director the sum of $108,691.35 by
certified check or wire transfer.
3. Stock
Options.
The
Company granted to the Director the vested right to purchase 90,000 shares
of
common stock of the Company for an aggregate exercise price of $291,900,
pursuant to the Company’s 2005 Equity Incentive Plan and the Notice of Stock
Option Grant dated November 2, 2005 (the “Option Grant”). Such
right shall remain exercisable in accordance with and subject to the terms
and
provisions of the Option Grant and the associated Option Agreement (including
but not limited to terms relating early expiration following termination of
employment and/or consulting relationship - the Separation Date shall be
considered to be the termination date).
Such
options shall be subject to the U.S. tax laws. Director acknowledges and agrees
that he must consult with his own tax advisor or attorney regarding the
appropriate tax treatment for all of his nonqualified stock options and that
he
is not depending on any employee of the Company to provide such advice.
4. Tax
Liability.
Director shall be responsible for all tax liability associated with any
consideration paid pursuant to this Agreement and stock options granted to
him
by the Company.
5. Non-Competition.
As
consideration for the payment made pursuant to Section 3 and in order to protect
the Company’s trade secret and other “confidential information” of the Company
as described below in Section 7, during a period of one (1) year from the
Separation Date, Director and RTH shall not, other than with the prior written
consent of the Board of Directors of the Company, engage, directly or
indirectly, in any other business activity (whether or not pursued for pecuniary
advantage) with any company currently commercializing multi-band multi-mode
RF
transceiver technology; provided that Director or RTH may own less than two
percent of the outstanding securities of any such publicly traded competing
corporation.
6. Nonsolicitation.
During
a period of two (2) years after the Separation Date, without written permission
from the Company, Director and RTH will not directly or indirectly engage,
or
participate in the solicitations of any employee or consultant of the Company
to
leave the Company for any reason or to devote less than all of any such
employee’s efforts to the affairs of the Company.
7. Nondisclosure.
During
the term of this Agreement and thereafter, Director and RTH shall not, without
the prior written consent of management of the Company, disclose or use for
any
purpose confidential information or proprietary data of the Company, except
as
required by applicable law or legal process; provided, however, that
“confidential information” shall not include any information known generally to
the public or ascertainable from public or published information (other than
as
a result of unauthorized disclosure by Director or RTH) or any information
of a
type not otherwise considered confidential by persons engaged in the same
business or a business similar to that conducted by the Company. Director and
RTH agree to deliver to the Company on or before the Separation Date, or at
any
other time that the Company may request, all memoranda, notes, plans, records,
reports and other documents (and copies thereof) relating to the business of
the
Company which he may then possess or have under his control (with the exception
of Director’s list of industry and business contacts, which the Company
acknowledges shall be retained by Director).
8. Nondisparagement.
The
parties further agree that from and after the execution of this agreement,
none
of the parties will make or publish any statement, written or oral, materially
disparaging the reputation of any of the other parties or of any of its present
or future officers, shareholders, subsidiaries or affiliates, or any of such
parties' respective businesses or products.
9. Disclosure.
Director acknowledges that he is familiar with Item 5.02 of Form 8-K under
the
Securities Exchange Act of 1934 (“Item 5.05”) entitled “Departure of Directors
or Principal Officers; Election of Directors; Appointment of Principal
Officers.” Director further acknowledges that his resignation is not “because of
a disagreement with the Registrant” as that phrase is used in Item 5.02 and that
Director has not and will not furnish the Company with any written
correspondence as described in Paragraph (a)(2) of Item 5.02. Director
acknowledges that the Company will file a Form 8-K disclosing Director’s
resignation, with the following language: “On [date], Xxxxxxx X. Xxxxx resigned
as a director of the Company.” Director hereby states that he agrees with such
disclosure, he has been provided an opportunity by the Company to furnish it
with a letter stating whether he agrees with the Company's disclosures in
response to Item 5.02, and he will not furnish the Company with such
letter.
10. Mutual
Release.
Director and RTH acknowledge that the consideration described herein is given
in
exchange for their signing this Agreement, and their entitlement to such amounts
are disputed by the Company. Director and RTH agree that the consideration
is in
full satisfaction of any claims, liabilities, demands or causes of action,
known
or unknown and he hereby release and forever discharge the Company and each
of
its past and present directors, managers, officers, shareholders, agents,
consultants, advisers, employees, attorneys, servants, parents, subsidiaries,
employee benefit plans, predecessors, successors and assigns, and each of them
separately and collectively (the “Releasees”) from any and all claims, liens,
demands, causes of action, obligations, damages and liabilities of any nature
whatsoever, known or unknown, that they ever had, now have or may hereafter
claim to have against the Releasees. The release includes, but is not limited
to:
(a)
any
and all claims arising out of or in connection with the consulting work
performed by Director and/or RTH, including (but not limited to) claims for
compensation and/or for a share of any profits or ownership interests in any
business relationships or other opportunities that may result from or in
connection with any introductions or other connections made by or through
Director and/or RTH for or on behalf of the Company;
(b)
any
and all claims relating to mental, physical or emotional injuries sustained
from
invasion of privacy, to defamation, to interference with prospective economic
advantage, to intentional or negligent infliction of emotional distress, to
Director’s engagement or nonengagement by the Company as a consultant or as a
director, to the termination of his consultancy and directorship, to any status,
term or condition in such employment, or to any physical or mental harm or
distress from such engagement or from termination of such
engagement;
(c)
any
and all claims under California or other applicable statutory or decisional
law
pertaining to wrongful discharge, discrimination, retaliation or breach of
contract or breach of public policy;
(d)
any
and all claims for costs, expenses or attorneys’ fees; and
(e)
any
and all claims relating to the tax obligation for which Director may become
liable as a result of this Agreement.
The
Company hereby releases and forever discharges Director, RTH, and each of their
predecessors, successors, representatives and assigns from any and all claims,
liens, demands, causes of action, obligations, damages and liabilities of any
nature whatsoever, known or unknown, that the Company ever had, now has or
may
hereafter claim to have against Director or RTH.
Notwithstanding
the foregoing, execution of this Agreement does not bar any claims for breach
of
this Agreement.
11. Waiver.
The
parties expressly waive all rights under Section 1542 of the Civil Code of
California which provides:
“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.”
The
parties agree that the possibility that such unknown claims exist was taken
into
account in determining the amount of consideration to be paid for the giving
of
this Agreement.
12. Covenant
Not To Xxx.
Each
party covenants and agrees that such party will never, individually or with
any
person or in any way, commence or aid in any way, except as required by due
legal process, prosecute or cause or permit to be commenced or prosecuted,
any
action or other proceeding based upon any claim which is released by Section
10
of this Agreement. This Agreement shall be deemed breached and a cause of action
shall be deemed to have accrued immediately upon the commencement or prosecution
of any action or proceeding contrary to this Agreement.
In
the
event of any breach of this Section 12, the non-breaching party shall be
entitled to recover not only the amount of judgment which may be awarded against
such releasee, but also all such other damages, costs and expenses as may be
incurred by such releasee, including court costs, attorneys’ fees and all costs
and expenses, taxable or otherwise, in preparing the defense of or defending
against, or seeking or obtaining an abatement of or injunction against, any
action or proceeding brought in violation of this Section 12 and in prosecuting
any claim, counterclaim or cross-claim based hereon.
13. No
Assignment; Authority.
The
parties represent and warrant that no other person had or has or claims any
interest in the claims referred to in Section 10 above; that they have the
sole
right and exclusive authority to execute this Agreement; that they have the
sole
right to receive the consideration paid therefor; and that they have not sold,
assigned, transferred, conveyed or otherwise disposed of any claim or demand
relating to any matter covered by this Agreement.
14. No
Admission.
The
parties acknowledge that the payment of consideration, referred to herein,
is
made solely for the purpose of purchasing peace and eliminating possible
involvement in protracted litigation based upon disputed claims that the other
could make and does not constitute an admission or concession of any liability
on account of any of said claims, liability for which is expressly denied by
all
releasees.
15. Indemnification.
Notwithstanding his separation from the Company, Director shall continue to
be
entitled to indemnification in accordance with the Certificate of Incorporation
(as amended) and the Bylaws of the Company in effect, as well as any contractual
indemnification agreements between Director and the Company. Director shall
remain covered under the Company’s directors and officers insurance policy for
as long as any such policy covers any other Company executive with respect
to
acts occurring prior to termination of Director’s service as a director of the
Company.
16. Miscellaneous
Provisions.
(a) Notice.
Notices
and all other communications contemplated by this Agreement shall be in writing
and shall be deemed to have been duly given when personally delivered or when
mailed by U.S. certified mail, return receipt requested and postage prepaid.
In
the case of Director and RTH, mailed notices shall be addressed to them at
the
address from which he most recently communicated to the Company in writing.
In
the case of the Company, mailed notices shall be addressed to its corporate
headquarters, and all notices shall be directed to the attention of its
CEO.
(b) Waiver.
No
provision of this Agreement shall be modified, waived or discharged unless
the
modification, waiver or discharge is agreed to in writing and signed by
Director, RTH, and by an authorized officer of the Company. No waiver by either
party of any breach of, or of compliance with, any condition or provision of
this Agreement by the other party shall be considered a waiver of any other
condition or provision or of the same condition or provision at another
time.
(c) Whole
Agreement.
No
agreements (including any employment agreement), representations or
understandings (whether oral or written and whether express or implied) which
are not expressly set forth in this Agreement have been made or entered into
by
either party with respect to the subject matter hereof.
(d) Choice
of Law.
The
validity, interpretation, construction and performance of this Agreement shall
be governed by the laws of the State of California (other than choice-of-law
provisions). Captions are for reference only and shall not be used to interpret
this Agreement.
(e) Disputes.
The
parties agree that any and all disputes, claims or controversies arising out
of
or relating to this Agreement shall be submitted to JAMS/Endispute or a similar
dispute resolution service (as may be agreed by the parties), for mediation
in
Los Angeles, California, and if the matter is not resolved through mediation,
then it shall be submitted to JAMS/Endispute, or its successor, for final and
binding arbitration in Los Angeles, California.
(i) Mediation.
Either
party may commence mediation by providing to JAMS/Endispute and the other party
a written request for mediation, setting forth the subject of the dispute and
the relief requested. The mediation will be conducted in accordance with the
provisions of JAMS/Endispute's "Employment Mediation/Arbitration Rules" in
effect at the time of filing of the demand for arbitration. The parties will
cooperate with JAMS/Endispute and with one another in selecting a mediator
from
JAMS/Endispute's panel of neutrals, and in scheduling the mediation proceedings.
The parties covenant that they will participate in the mediation in good faith,
and that they will share equally in its costs. All offers, promises, conduct
and
statements, whether oral or written, made in the course of the mediation by
any
of the parties, their agents, employees, experts and attorneys, and by the
mediator or any JAMS/Endispute employees, are confidential, privileged and
inadmissible for any purpose, including impeachment, in any arbitration or
other
proceeding involving the parties, provided that evidence that is otherwise
admissible or discoverable shall not be rendered inadmissible or
non-discoverable as a result of its use in the mediation.
(ii) Arbitration.
Either
party may initiate arbitration with respect to the matters submitted to
mediation by filing a written demand for arbitration at any time following
the
initial mediation session or 45 days after the date of filing the written
request for mediation, whichever occurs first. The mediation may continue after
the commencement of arbitration if the parties so desire. Unless otherwise
agreed by the parties, the mediator shall be disqualified from serving as
arbitrator in the case. The parties will cooperate with JAMS/Endispute and
with
one another in selecting an arbitrator from JAMS/Endispute's panel of neutrals,
and in scheduling the arbitration proceedings. The parties covenant that they
will participate in the arbitration in good faith. The Company shall bear the
fees and costs of the arbitration proceeding, but each party shall bear its
own
attorneys' fees. Both parties are entitled to be represented by counsel at
the
arbitration hearing and the rights and remedies otherwise available to the
parties, if established, under applicable federal, state or local law, shall
remain available in the arbitration proceeding. The provisions of this Section
may be enforced by any Court of competent jurisdiction, and the party seeking
enforcement shall be entitled to an award of all costs, fees and expenses,
including attorneys fees, to be paid by the party against whom enforcement
is
ordered.
(iii) Waiver
of Right to Litigate in Court.
By
agreeing to have all disputes, claims or controversies arising out of or
relating to Director's employment resolved through the arbitration, Director
acknowledges his understanding that he is giving up any rights he might possess
to have those matters litigated in a court or jury trial, including the right
to
judicial discovery and appeal except to the extent that they are specifically
required by law. Director acknowledges his understanding that if he refuses
to
submit a claim to arbitration after agreeing to this provision, he may be
compelled to arbitrate under federal or state law. Director represents that
he
has read and understood the foregoing and agrees to submission of all disputes,
claims or controversies arising out of or relating to this Agreement to neutral
arbitration in accordance with this Section. Director acknowledges and
represents that his agreement to this arbitration provision is
voluntary.
(f) Consultation
with Counsel.
Director acknowledges that he has been advised by and consulted with legal
counsel prior to signing this Agreement and that he is entering into this
Agreement knowingly and voluntarily.
(g) Severability.
The
invalidity or unenforceability of any provision of this Agreement shall not
affect the validity or enforceability of any other provision hereof, which
shall
remain in full force and effect.
(h) Assignment
and Successors.
Neither
party shall assign any right or delegate any obligation hereunder without the
other party’s written consent, and any purported assignment or delegation by a
party hereto without the other party’s written consent shall be void. This
Agreement shall be binding upon and inure to the benefit of the Company and
its
successors and Director, his heirs, executors, administrators and legal
representatives.
(i) Counterparts.
This
document may be executed in multiple counterparts, each of which shall be
considered an original. Electronically and/or digitally transmitted facsimile
signatures shall be deemed valid as originals.
DIRECTOR
AND RTH EACH ACKNOWLEDGE AND AGREE THAT THEY HAVE BEEN ADVISED THAT THIS
AGREEMENT IS A BINDING LEGAL DOCUMENT. DIRECTOR AND RTH FURTHER AGREE THAT
THEY
HAVE EACH HAD ADEQUATE TIME AND A REASONABLE OPPORTUNITY TO REVIEW THE
PROVISIONS OF THIS AGREEMENT, HAVE EACH OBTAINED LEGAL ADVICE REGARDING ALL
ITS
ASPECTS, AND THAT IN EXECUTING THIS AGREEMENT THEY HAVE EACH ACTED VOLUNTARILY
AND HAVE NOT RELIED UPON ANY REPRESENTATION MADE BY THE COMPANY OR ANY OF ITS
EMPLOYEES OR REPRESENTATIVES REGARDING THIS AGREEMENT'S SUBJECT MATTER AND/OR
EFFECT. DIRECTOR AND RTH EACH ACKNOWLEDGE IT HAS READ AND FULLY UNDERSTANDS
THIS
AGREEMENT AND VOLUNTARILY AGREES TO ITS TERMS.
IN
WITNESS WHEREOF, each of the parties has executed this Agreement, in the case
of
the Company by its duly authorized officer.
DATED:
December 7, 2006
| TECHNOCONCEPTS INC. |
RTH
CONSULTING INC.
|
||
| By: /s/ |
By:
|
/s/ | |
|
Xxxxxxx
Xxxxxxx, Chairman and CEO
|
Xxxxxxx X. Xxxxx, President |
||
| XXXXXXX X. XXXXX | |||
| By: /s/ | |||
|
Xxxxxxx
X. Xxxxx, an individual
|
|||
