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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
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