SEVERANCE AND CONSULTING AGREEMENT
This
Severance and Consulting Agreement ("Agreement") is made by and between
Concentric Energy Corp., a Nevada corporation ("Company"), and Xxxxxx Xxxxx,
an
individual ("Fudge") (collectively the "Parties").
RECITALS
A. Company
employed Fudge as Chief Executive Officer and President. Fudge's employment
was
terminated and Company will provide Fudge with severance benefits on the terms
and subject to the conditions set forth herein. The parties hereby confirm
their
understanding that the termination relates to the Company’s desire to recruit a
CEO position with greater experience in conducting initial public offerings,
and
not to job performance issues.
B. Company
desires to retain the service of Fudge in a consulting capacity for a period
of
three (3) months on the terms and subject to the conditions set forth herein.
C. For
and
in consideration of the mutual promises and covenants in this Agreement, and
for
other good and valuable consideration, the receipt and sufficiency of which
is
hereby acknowledged, the Parties agree as follows:
AGREEMENT
1.0 Separation
from Company.
1.1 Termination
of Engagement as Officer.
Company
and Fudge agree that Fudge’s employment as an officer of Company terminated on
December 21, 2007 (“Separation Date”) and that such termination is effective as
to all capacities and titles held by Fudge with respect to Company and its
subsidiaries and affiliates. Fudge acknowledges that as of the Separation Date,
he has been paid all wages and other sums due to him within the time frames
required by law.
1.2 Resignation
as Director.
Effective as of the Separation Date, Fudge resigns as a member of the Company’s
Board of Directors.
2.0 Compensation;
Consulting Agreement; Further Agreements.
2.1.1 Severance.
Company
shall pay Fudge severance pay equivalent to six (6) months of salary in the
amount of $13,750 per month ($82,500 total). This payment shall be made to
Fudge
in monthly payments (and, to the extent legally permissible, shall be treated
as
1099 income). Fudge acknowledges that this severance amount is a benefit
provided him in return for his execution of this Agreement.
2.1.2 Stock.
In the
event this Agreement is executed by December 28, 2007, Company shall xxxxx
Xxxxx
(a) 60,000 shares of restricted stock for which the vesting will not occur
until
the time of an initial public offering of the Company; (b) 20,000
non-transferable warrants to acquire shares of the Company’s stock at $7 per
share; provided, however, that such warrants shall not be exercisable if the
Company does not complete a private placement of its equity securities or other
financing with gross proceeds of at least $2.0 million and (c) 20,000
non-transferable warrants to acquire shares of the Company’s stock at $12 per
share; provided, however, that such warrants shall not be exercisable if the
Company does not complete either (1) any private financing with a private
placement price of $12 or more per share or (2) any public offering where the
trading price per share is $12 or more with gross cash proceeds an initial
public offering of its equity securities with gross proceeds of more than $5
million.
All
shares issued to Fudge hereunder or upon exercise of any outstanding options
or
warrants (or otherwise after the date of this Agreement) shall, prior to the
time of the Company’s initial public offering or three years, whichever comes
first, be subject to (a) a right of the Company to reacquire such shares at
the
original purchase price in the event of a breach of this Agreement by Fudge,
(b)
a right of first refusal in favor of the Company in the event Fudge attempts
to
transfer such shares, and (c) an irrevocable proxy granted to the board of
the
Company to vote such shares on all matters. The Company shall retain the
certificates for such shares until the period lapses for these
conditions.
2.1.3. Additional
Consideration.
(a)
At
signing, Fudge shall receive a signing amount of $25,000.
(b)
In
the event that Fudge signs this Agreement on or before December 28, 2007, (i)
upon, and subject to, the Company’s successful completion of a private placement
of its securities within six months of this Agreement, Fudge shall receive
an
additional payment of 2.5% per each one million of the gross proceeds received
by the Company, up to a total maximum payment of $125,000, and (ii) upon, and
subject to, the Company’s successful completion of an initial public offering of
its securities (or business combination in which the Company’s board of
directors remains in control of the Company) with proceeds of $20 million within
12 months of this Agreement, Fudge shall receive an additional payment of
$100,000, with an additional payment $25,000 for each $5 million of gross
proceeds to the Company in such transaction up to a total maximum payment of
$225,000.
2.1.4.
Payment
of Amounts Owed.
At
signing, the Company shall pay Fudge any reimbursements, loans, or other amounts
owed to Fudge for advances to the Company, including repayment of convertible
note in the amount of $47,925 ($45,000 in principal and $2,925 in interest
to
December 31, 2007).
2.2 Medical
Benefits.
Fudge
shall receive an allowance for medical benefits of $750 per month for a period
of six months. If Fudge is eligible to continue these benefits through COBRA,
more information regarding COBRA will follow under separate cover from Company’s
insurance provider.
2.3 Vacation
Pay.
Company
has paid Fudge through the Separation Date all accrued but unused vacation
or
paid time off.
2.4. Consulting
Services. For
a
period of three (3) months, Fudge shall provide up to 10 hours per month of
consulting services to Company with respect to the technical report being
prepared by Xxxxxxx Associates, including without limitation providing
assistance to Company personnel in connection with the preparation and review
of
such report. Fudge shall simultaneous copy Company on all written or electronic
communications to or from Xxxxxxx Associates.
2.5 Contacts.
Fudge
agrees that he shall not initiate contacts to discuss the Company or its
business with any shareholders, employees or vendors of the Company, or the
principals thereof (including specifically E-VAT, Kvaerner, Mountain States,
Kleinfelder, Pillsbury Winthrop or Xxxxxxxxx & Xxxxxxx), other than pursuant
to his consulting duties hereunder with Xxxxxxx Associates. Fudge agrees that
he
shall promptly refer to the Company counsel, by email (xxxxxxx@xxxxxxxxxxx.xxx,
or such
other address as is provided by the Company) all contacts to him initiated
by
shareholders, employees or vendors to discuss the Company or its business,
and
that he shall not respond to such contacts other than to notify them that he
is
referring their contact to the Company.
2.6 Relocation.
The
Company shall provide $15,000 to assist Fudge in relocating from, and to meet
temporary housing costs in, the Phoenix area following the termination. The
Company shall allow Fudge to continue to store a small amount of personal
furniture in the Wickenburg warehouse and upon 24 hours notice to the Company
retrieve said furniture during normal business hours (unless other arrangements
are expressly made in advance) when relocating from the Phoenix
area.
3.0 Sufficiency
of Consideration.
Company
and Fudge specifically agree that the consideration provided to Fudge pursuant
to Section 2.1 is good and sufficient consideration for this
Agreement.
4.0 Mutual
Release.
In
consideration of the mutual promises and covenants in this Agreement, Fudge
and
the Company hereby each release the other of and from all claims, demands,
damages, actions, causes of action, liens, agreements, covenants, obligations,
controversies, debts, costs, expenses, judgments, orders and liabilities of
whatever kind or nature, whether known or unknown, whether in law, equity or
otherwise, which either of them may have against the other, including any claims
that are not known or asserted at this time. The Company agrees to take whatever
steps are necessary to remove Fudge as co-signer from the F-350 and F-450 load
agreements. Without limitation, Fudge further agrees:
4.1 Filing
of Actions.
That he
has not filed and will refrain from filing on his own or from participating
with
any third party in filing any action or proceeding against Company, its
subsidiaries or parents, any member of the Board of Directors in any of their
capacities, including individually, its present or former employees, officers,
directors, agents, shareholders or affiliates (hereinafter "Released Parties")
with any administrative agency, board, or court relating to the termination
of
Fudge's employment as of the Separation Date, or any acts related to Fudge's
employment with Company occurring prior to the Separation Date..
4.2 Dismissal.
That if
any agency, board or court assumes jurisdiction of any action against the
Released Parities arising out of the termination of Fudge's employment or any
acts related to Fudge's employment with Company occurring prior to the
Separation Date, Fudge will direct that agency, board or court to withdraw
or
dismiss the matter, with prejudice, and will execute any necessary paperwork
to
effect the withdrawal or dismissal, with prejudice.
4.3 Mutual
Indemnification. Each of Fudge and the Company agrees to indemnify the other
for
all costs, damages, losses or expenses incurred to third parties arising out
of
a breach of this Agreement, or arising from actions taken by the other prior
to
the date of this Agreement, including, without limitation, any shareholder
actions. No indemnification shall be required with respect to any matters
arising before the date of this Agreement which have been specifically disclosed
by one party to the other and attached as an exhibit hereto
5.0 Compromise
and Settlement.
Fudge,
in consideration of the promises and covenants made by Company in this
Agreement, hereby compromises, settles and releases Company and Released Parties
from any and all past, present, or future claims, demands, obligations or causes
of action, whether based on tort, contract, or other theories of recovery
arising from the employment relationship between Company and Fudge, and the
termination of the employment relationship. Such claims include those Fudge
may
have or has against Company or Released Parties.
6.0 Waivers.
The
Parties acknowledges that the mutual release contained in this Agreement applies
to all known or unknown, foreseen or unforeseen, injury or damage arising out
of
or pertaining to his employment relationship with Company and its termination,
and expressly waives any benefits any Party he may have under any applicable
law
respecting assertion of unknown claims.
7.0
Non-Competition;
Non-Solicitation.
For a
period of two years from the date hereof, Fudge hereby covenants and agrees
with
Company that Fudge will not, either directly or indirectly, engage or consult
with any uranium mining business or company with significant uranium mining
activities reasonably determined by the Company (upon at least two weeks prior
notice from Fudge) to conflict the Company or its business; nor shall he engage
or consult with any public shell, public or private equity group, or other
investor which intends or considers undertaking an acquisition in whole or
in
part of the Company or its assets (including specifically Xxxxx Xxxxxxx or
his
affiliates). For a period of two years from the date hereof, Fudge will not,
either for Fudge or for any other party, directly or indirectly, solicit, induce
or attempt to induce any then existing employee, consultant or contractor of
Company or any of its affiliates or any prospective employee, consultant or
contractor to which Company or any of its affiliates has offered employment
or a
consulting or contracting relationship to (i) not accept employment with Company
or any of its affiliates, (ii) to terminate his or her employment or his, her
or
its services with, Company or any of its affiliates or (iii) to take employment
with a party other than Company or an affiliate of Company.
In
the
event the two-year term of this non-competition and non-solicitation obligation
is found to be unenforceable, the parties agree that the term shall be deemed
to
be considered four consecutive six-month terms, each of which shall be
separately enforceable to the maximum extent permitted by law.
8.0 No
Admission of Liability.
Fudge
acknowledges that neither this Agreement, nor payment of any consideration
pursuant to this Agreement, shall be taken or construed to be an admission
or
concession of any kind with respect to alleged liability or alleged wrongdoing
against Fudge by Company. Company specifically asserts that all actions taken
with regard to Fudge were proper and lawful and affirmatively denies any
wrongdoing of any kind.
9.0 Confidentiality.
Fudge
agrees to keep the terms and amount of this Agreement completely confidential,
except that Fudge may discuss this Agreement with his attorney, accountant,
or
other professional advisor who may assist Fudge in evaluating or reviewing
this
Agreement or the tax implications of this Agreement. Company agrees to keep
the
terms of this Agreement confidential except as to those employees, officers,
agents, or directors of Company who have a need to know the terms of this
Agreement and except as required by law, including the securities
laws.
10.0 Confidential
Information.
Company
has developed, compiled and owns certain proprietary techniques and confidential
information that have great value in its business. This information includes,
but is not limited to, any and all information (in any medium, including but
not
limited to, written documents and electronic files) concerning unpublished
financial data, marketing and sales data, product and product development
information, customer lists and preferences, employee lists, equipment programs,
contracts, licensing agreements, processes, formulas, trade secrets, inventions,
discoveries, improvements, data, know-how, formats, marketing plans, business
plans, strategies, forecasts, maps, feasibility studies, databases, geological
and technical studies, blueprints, shareholder information, mining plans,
historic data, and supplier and vendor identities, characteristics and
agreements ("Confidential Information"). Fudge has had access to confidential
information of persons or entities for whom Company performs services, or from
whom Company or Fudge has obtained information ("Customers"). Confidential
Information includes not only information disclosed by Company or its Customers
to Fudge in the course of Fudge's employment with Company, but also information
developed or learned by Fudge during the course of Fudge's employment with
Company. Confidential Information is to be broadly defined.
Fudge
acknowledges that during Fudge's employment with Company, Fudge has had access
to such Confidential Information. Fudge agrees that at all times after Fudge's
employment with Company is terminated, Fudge will (i) hold in trust, keep
confidential, and not disclose to any third party or make any use of the
Confidential Information of Company or its Customers; (ii) not cause the
transmission, removal or transport of Confidential Information of Company or
its
Customers; (iii) not publish, disclose, or otherwise disseminate Confidential
Information of Company or its Customers..
11.1 Mutual
Non-Disparagement.
Company
and Fudge agree that neither will utter, publish or otherwise disseminate any
oral or written statement that disparages or criticizes the other party or
that
damages the other party's reputation. Fudge also agrees not to utter, publish
or
otherwise disseminate any oral or written statement that disparages or
criticizes the Released Parties, or that damages the Released Parties'
reputations. Any violation of this Section by Fudge will constitute a material
breach of this Agreement terminating Company's obligation to pay severance
under
Section 2 of this Agreement. Any violation of this Section by the Company will
constitute a material breach of this Agreement for which Fudge shall be entitled
to require a written retraction; the Company shall reimburse Fudge for legal
fees and court costs reasonably incurred in enforcing this provision.
11.2 Disparagement
Through Third Parties.
Company
and Fudge agree that neither will indirectly, or through the use of third
parties, utter, publish or otherwise disseminate any oral or written statement
that disparages or criticizes the other party or that damages the other party's
reputation. Fudge also agrees that he will not indirectly, or through the use
of
third parties, utter, publish or otherwise disseminate any oral or written
statement that disparages or criticizes the Released Parties, or that damages
the Released Parties' reputations. Any violation of this Section by Fudge will
constitute a material breach of this Agreement terminating Company's obligation
to pay severance under Section 2 of this Agreement. Any violation of this
Section by the Company will constitute a material breach of this Agreement
for
which Fudge shall be entitled to require a written retraction; the Company
shall
reimburse Fudge for legal fees and court costs reasonably incurred in enforcing
this provision.
11.3 Cooperation
on Announcement.
The
Company and Fudge shall jointly approve the written announcement relating to
Fudge’s termination, and shall cooperate on the preparation of the announcement
to Company staff about the termination.
12.0 Company
Property.
On or
before Fudge's Separation Date, Fudge shall return to Company all Company
property in his possession including, but not limited to, keys, phones and
accessories, laptop computers and accessories, original and all copies of any
written, recorded, or computer-readable information about Company's practices,
procedures, files, trade secrets, pricing, customer lists, shareholder lists,
product cultivation or marketing associated with Company's business. Fudge
hereby certifies that he has not retained any copies of Confidential Information
on his personal computer or in any other form, nor has he transferred or caused
to be transferred such material to any third party (other than those disclosed
in a separate attachment hereto provided to the Company). Company shall provide
Fudge with a new replacement laptop computer equivalent to his existing laptop
(including applications), and shall transfer personal files extracted from
the
existing laptop computer with Fudge’s cooperation. Fudge shall provide Company
with electronic copies of all Confidential Information and Company information
resident on any other computers under his control not surrendered to the
Company, and hereby certifies that he has removed such files from his computer,
does not retain any copies (in electronic form or otherwise) of such files,
and
has not transmitted or caused to be transmitted such files to any third party.
Any use or disclosure of the foregoing Company intellectual property shall
result in the immediate revocation of the release granted to Fudge hereunder,
and result in Fudge forfeiting any unpaid payments hereunder, and the Company
shall immediately reacquire (subject to any obligation to repurchase at the
original purchase price) any shares of stock acquired by Fudge subject to this
Agreement.
13.0 Representation
by Attorney.
Fudge
acknowledges that Fudge has carefully read this Agreement; that Fudge
understands its final and binding effect; that Fudge has been advised to consult
with an attorney; that Fudge has been given the opportunity to be represented
by
independent counsel in reviewing and executing this Agreement and that Fudge
has
either chosen to be represented by counsel or has voluntarily declined such
representation; and that Fudge understands the provisions of this Agreement
and
knowingly and voluntarily agrees to be bound by them.
14.0 No
Reliance Upon Representations.
Fudge
hereby represents and acknowledges that in executing this Agreement, Fudge
does
not rely and has not relied upon any representation or statement made by Company
or by any of Company's past or present shareholders, officers, directors,
employees, agents, representatives or attorneys with regard to the subject
matter, basis or effect of this Agreement.
15.0 Venue
and Jurisdiction.
Any
controversy or claim arising out of this Agreement or the breach thereof, or
the
interpretation thereof, shall be resolved by the appropriate state or federal
court in Phoenix, Arizona. Each party shall be entitled to specific enforcement
of the agreements contained herein, and consents to the personal jurisdiction
of, and to the exclusive venue of, the courts of the state of Arizona for the
purpose of all litigation relating to such agreements.
16.0 Attorney's
Fees.
Each
party shall bear its own attorney's fees in the preparation and review of this
Agreement. Should suit or action be instituted to enforce any provision of
this
Agreement, the prevailing party shall be entitled to recover its costs and
reasonable attorney's fees.
17.0 Miscellaneous.
17.1 Entire
Agreement, Modification.
This
Agreement contains the entire Agreement between the Parties hereto and
supersedes all prior oral and/or written agreements if any. The terms of this
release are contractual and not a mere recital. This Agreement may be modified
only by further written agreement of the Parties.
17.2 Severability.
If any
part of this Agreement is determined to be illegal, invalid or unenforceable,
the remaining parts shall not be affected thereby and the illegal, unenforceable
or invalid part shall be deemed not to be part of this Agreement. The Parties
further agree to replace any such void or unenforceable provision of this
Agreement with a valid and enforceable provision that will achieve, to the
extent possible, the economic, business, or other purposes of the void or
unenforceable provision.
17.3 Governing
Law.
Any
action to enforce this Agreement or any dispute concerning the terms and
conditions of this Agreement and the Parties' performance of the terms and
conditions of this Agreement shall be governed by the laws of the State of
Arizona.
17.4 Construction.
The
language in all parts of the Agreement shall in all cases be construed as a
whole according to its fair meaning and not strictly for or against any of
the
Parties.
17.5 Captions.
All
paragraph captions are for reference only and shall not be considered in
construing this Agreement.
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(“Company”)
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Date: December
28, 2007
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/s/
Xxxxxxx
Xxxxxx
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By:
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Xxxxxxx
Xxxxxx
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Its:
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[Title]
Chairman
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Date:
December
27, 2007
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/s/
Xxxxxx Xxxxx
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[Fudge
Name]
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(“Fudge”)
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