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
RICHARD T. HINES (“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.
Separation and Release
Agreement - Page 1 of 7
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], Richard T. Hines 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.
Separation and Release
Agreement - Page 2 of 7
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 defam