September 8, 2003
SEPARATION AGREEMENT
THIS AGREEMENT is entered into this 8th day of September, 2003, by and
between Xxxxxx X. Xxxxxxxx ("Xxxxxxxx"), a resident of the State of
Colorado, and NightHawk Systems, Inc. ("NightHawk"), a Nevada
corporation. Xxxxxxxx and NightHawk may collectively be referred to herein
as "the Parties."
RECITALS
WHEREAS, in February 0000 XxxxxXxxx completed a reverse merger with Peregrine
Control Technologies, Inc., a Colorado corporation, ("PCT") in which
NightHawk became the surviving corporation, and;
WHEREAS, Xxxxxxxx was a founder of PCT and continued as an employee, CEO,
and director of NightHawk following the reverse merger, and;
WHEREAS, in connection with the 2002 annual audit, the Company and its
auditors have conducted an internal audit and have identified numerous
areas of concern relating to Xxxxxxxx'x management of the Company, and;
WHEREAS, Xxxxxxxx resigned as a Director of the Company on July 9, 2003
and NightHawk desires to terminate Xxxxxxxx'x employment with the Company.
NOW THEREFORE, in consideration for the foregoing, the mutual
promises and releases set forth herein and other good and valuable
consideration, the receipt and sufficiency of which is hereby
acknowledged, Xxxxxxxx and NightHawk agree as follows:
1. As consideration for Xxxxxxxx entering into this Agreement,
NightHawk shall:
A. Forebear from enforcing any claims that it may have against
Xxxxxxxx for any malfeasance or misfeasance Xxxxxxxx may have
committed during the period of his employment with PCT and NightHawk.
B. Pay the premiums for continued health insurance coverage
("COBRA") under Colorado law for Xxxxxxxx for a period of three months
following the month of Xxxxxxxx'x separation from the Company, after
which Xxxxxxxx will be responsible for his own premiums under COBRA, and;
X. Xxxxx to Xxxxxxxx 450,000 options to vest over a three-year
period at a rate of 150,000 shares per year. The option price shall be
22 cents.
D. Use its best efforts to assist and facilitate the
registration and sale of 200,000 shares of Xx. Xxxxxxxx'x stock in the
selling window immediately following the November shareholder meeting;
2. As consideration for NightHawk entering into this Agreement,
Xxxxxxxx shall:
A. Resign as an employee from the Company and its subsidiaries,
including PCT, and refrain from claiming to represent the Company or any
of its subsidiaries, including PCT, in any capacity to any employees,
shareholders or third parties;
B. Return to the Company an amount of shares equivalent in
value to the $100,000 receivable held by the Company for money owed by
Xxxxxxxx to the Company, with shares to be valued at 22 cents;
C. Agree that all the voting rights of all shares owned by,
held in trust by or subsequently acquired by, Xxxxxxxx after returning
to the Company the shares identified in Sections 2.B., of this
Agreement, shall be transferred to Xxxxx Xxxxxx for a period of 60
months and Xxxxxxxx further agrees to cooperate to identify and
implement a cost effective means to ensure that such voting rights
are transferred. Xx. Xxxxxxxx agrees that Xxxxx Xxxxxx can assign
these same voting rights to a party of his choosing. Voting rights
for [name of minor redacted] and [name of minor redacted] shall not
be transferred. Transfer of voting rights does not include a vote
pertaining to a material change of the ownership (51% or more) of
the company, at which time Xx. Xxxxxxxx shall vote his own shares;
D. Sell no more than 600,000 shares in any twelve-month
period for a period of three years following the execution of this
Agreement. Xx. Xxxxxxxx agrees, beginning January 1st 2004, not to
sell any shares during and for a period of 6 months following a
formal board authorized capital formation for the company.
3. Non-disparagement and non-compete. Xxxxxxxx agrees not
to disparage NightHawk, its Board of Directors, management or
employees in any communication, whether written or spoken, and
NightHawk agrees to the same in return to Xxxxxxxx. This provision
shall not apply to statements made by either party in response to
an investigation or other legal proceeding by law enforcement
agencies. Xxxxxxxx shall also not compete in the wireless remote
control business for a period of at least two years from the date
of this Agreement and Xxxxxxxx further agrees that he will not
solicit for employment, either for himself or for any third party,
directly or indirectly, any current employee of NightHawk for a period of
two years from the date of this Agreement.
4. Release of Xxxxxxxx by NightHawk. NightHawk, by its officers
and directors hereby completely and unconditionally releases, waives and
discharges Xxxxxxxx, his agents, representatives, attorneys, heirs and
assigns, and each of them, including any corporations, partnerships or
other business associations in which Xxxxxxxx is a director or
principal, from any and all actions, causes of action, claims (as that
term is defined in 11 U.S.C. ss. 101(5)) and demands, known or
unknown, cost and expenses sustained by NightHawk, arising from or
related to the dispute, including but not limited to claims that could
have been raised in a lawsuit but were not.
5. Release of Nighthawk by Xxxxxxxx. Xxxxxxxx, for himself, his
successors, representatives, heirs, executors, agents, administrators and
assigns, including any corporations, partnerships or other business
associations in which Xxxxxxxx is a director or principal, hereby
completely and unconditionally releases, waives and discharges NightHawk,
its employees, directors, subsidiaries, agents, representatives,
attorneys, heirs and assigns from any and all actions, causes of action,
claims (as that term is defined in 11 U.S.C. ss. 101(5)) and demands,
known or unknown, cost and expenses sustained by Xxxxxxxx, arising from
or related to the dispute, including but not limited to claims that could
have been raised in a lawsuit but were not.
6. Denial of Liability. The Parties agree that this Agreement is
not to be construed as an admission of any nature by the Parties.
7. Consultation with additional Professionals. Each of the Parties
state that they have been advised of their rights to consult, at their own
expense, additional professionals of their own choosing, including other
attorneys, accountants or other professionals, regarding any and all
known and unknown, foreseen and unforeseen, injuries, losses, damages,
and liabilities of whatsoever kind and nature that they may have, or
will incur, resulting directly or indirectly from this Agreement or any
of the incidents underlying this Agreement.
8. Consideration. The consideration stated herein is
contractual and not a mere recital. In entering into this Agreement,
each Party has relied solely upon its own judgment and the judgment and
advice of its attorneys, which are the attorneys of its own choice. No
Party ahs been influenced or induced to any extent whatever by an
representations or statements regarding its damages or any other
matters made by or on behalf of any other Party. The terms of this
Agreement have been completely read and explained to each Party by
its own respective attorney, and its terms are fully understood and
voluntarily accepted by each Party. There are no other understandings
or agreements between the Parties other than those set forth in
this Agreement.
9. Costs. Each Party shall bear its own attorneys' fees and
other costs in connection with the dispute.
10. Consequences of Actions to Set Aside, Avoid or Otherwise
Challenge this Agreement. If any Party to this Agreement or that Party's
successor or assign shall bring an action in any form that seeks to set
aside or avoid this Agreement, that Party or his or her successor or
assigns shall be liable for and shall pay the reasonable legal fees
and expenses paid or accrued by any other Party or its successors in
connection with such action. If any Party to this Agreement or that
Party's successor or assign shall bring any action challenging the
validity, enforceability or interpretation of this Agreement or that
it does not seek to have this Agreement set aside or avoided, that
Party or its successor or assigns shall pay the reasonable legal fees
and expenses paid or accrued by any other Party or his or her
successors or assigns in connection with such action in the event
that such other Party or his successors or assigns prevails in such
action brought by a Party to this Agreement.
11. Divisibility. If an provisions of this Agreement, or any
portion of any provision of this Agreement is declared null and void,
such provision or such portion of a provision shall be considered
separate and apart from the remainder of this Agreement which shall
remain in full force and effect.
12. Duplicate Originals. This Agreement may be executed in
duplicates, which together shall constitute the entirety of the document.
13. Governing Law. The laws of the State of Colorado shall apply
to and control any interpretation, construction, performance or
enforcement of this Agreement.
14. Binding Effect. Each Party understands and agrees that this
Agreement shall bind and inure to the benefit of itself, its officers,
directors, employees, agents, servants, subsidiaries, and parent companies,
insurers, sureties, successors and assigns.
15. Board Approval. Both parties agree that it will have its
counsel and Board review and approve the terms and conditions of this
agreement by close of business on September 10, 2003.
/s/ Xxxxxx X. Xxxxxxxx
Xxxxxx X. Xxxxxxxx
STATE OF COLORADO )
) ss.
COUNTY OF DENVER )
Subscribed and sworn to before me this 8th day of September 2003,
by Xxxxxx X. Xxxxxxxx.
WITNESS my hand and official seal.
My Commission expires: 7/18/06
/s/ Xxxxxxxx X. [illegible]
Notary Public
/s/ Xxx Xxxxxxxx
[FOR NIGHTHAWK]
STATE or Province of Mantoba )
) ss.
CANADA )
Subscribed and sworn to before me this 12th day of September 2003,
by Xxx Xxxxxxxx.
WITNESS my hand and official seal.
My Commission expires: __________________
/s/ Xxxxxx Xxxxxx
Notary Public
