Employment Separation Agreement Abstract
This Employment Separation Agreement (this "Agreement") is made and entered into
as of this 1st day of July, 2005, by and between MEMS USA, Inc., a Nevada
corporation (the "Company"), and MEMS USA, Inc., a California corporation (the
"Old Company"), on the one hand (which cumulatively shall be referred to from
time to time herein as the "Company Parties"), and Xxxxxxxx Weisdorn ("LW") and
Xxxxxxxx Weisdorn, Sr. ("Sr."), and all of their respective relatives including
wives, Gia Weisdorn and Xxxxxxx Weisdorn, (which parties shall be referred to
from time to time as the "Weisdorn Parties"), on the other.
LW is an officer and director of the Company and affirms that he is the only
holder of record of 2,738,068 shares of the Company's common stock (the "LW
Stock"), which is constituted by Certificate No. 10361, evidencing ownership of
169,381 shares, and 2,568,687 shares on deposit in a brokerage account. LW
affirms that all of the LW Stock is subject to the restrictions of Rule 144, as
promulgated under the Securities Act of 1933 ("Rule 144"). Prior to becoming an
officer and director of the Company, LW was an officer and director of the Old
Company.
Sr. affirms that he is the only holder of record of 350,326 shares of the
Company's common stock (the "Sr. Stock"), which is constituted by Certificate
No. 10200, evidencing ownership of 41,368, Certificate No. 10283, evidencing
ownership of 126,474 shares, certificate No. 10201, evidencing ownership of
46,584 shares, 20,900 shares on deposit in a brokerage account, and two
additional certificates of which the certificate numbers are currently unknown
evidencing ownership of 95,000 and 20,000 shares, respectively.
Sr. affirms that he has a claim to 100,000 shares of the Company's common stock
from Xxxx Xxxxxxx ("Xxxxxxx") in exchange for shares of the Company's common
stock previously given Xxxxxxx by Sr., and 137,099 shares of the Company's
common stock in exchange for payment of monies given Xxxxxxx by Sr. Sr. also
claims an option to purchase up to approximately $308,000 of the Common stock of
the Company from Xxxxxxx at the price of $1.86 per share. These claims shall
cumulatively be referred to herein as the "Xxxxxxx Claims". All rights to or
associated with profits from these transactions are hereby irrevocably assigned
by the Weisdorn Parties to the Company.
LW affirms that approximately 595,000 shares of the Company's common stock are
held in the name of, or are otherwise under the control of, certain individuals
or entities who are, or have been, represented by or otherwise affiliated with
Xxxxxx Xxxxx, Esq. (the "Drage Stock"). LW contends that the Company has a
contractual right to have all the Drage Stock returned to it. LW states that one
or more holders of the Drage Stock have refused to return the Drage Stock, and
the Company has recovered none of the Drage Stock.
This Agreement is being executed and delivered in order to set forth the terms
upon which LW and the Company Parties shall accomplish their separation, and to
compromise and settle completely any and all currently known and disclosed
disputes as exist between the Weisdorn Parties and the Company Parties,
including the Company's subsidiaries, pertaining to or arising out of any
events, actions, omissions or representations of whatever kind or nature
occurring during, arising from or relating to LW's tenure with the Company, its
subsidiaries or the Old Company, the compensation enjoyed by them, or either of
them, during or as a result of LW's tenure with the Company or the Old Company,
and any transactions between them and the Company, its subsidiaries or the Old
Company including, without limitation, the entering into of the transactions
concerning the Drage Stock and the Xxxxxxx Claims.
Immediately, the Weisdorn Parties will cease and desist from any and all
transactions related to the company, its stock or derivatives. Upon execution
and delivery of this Agreement by the Company Parties, LW shall deliver LW's
letter of resignation in the form attached hereto as Exhibit "A". Within three
business days of execution of this Agreement, the Weisdorn Parties shall deliver
to the Company all certificates evidencing any and all of their ownership of
common stock, warrants, options and all such derivatives of the Company stock
or, in the case of such of the Weisdorn Parties Stock as is held in brokerage
accounts, they shall deliver written instructions acceptable to the Company to
the entities holding such shares irrevocably instructing them to deliver all
stock to the Company. They shall also deliver to the Holder at the same time
fully executed irrevocable stock assignments, separate from each certificate, in
form acceptable to the Company and such other documents of conveyance as are
requested thereby, conveying ownership of the Weisdorn Parties Stock as follows:
(a) All shares of the LW Stock shall be conveyed to the Company;
(b) All shares of the Sr. Stock shall be conveyed to the Company;
(c) 167,374 shares of the LW Stock, and 128,000 shares of the Sr. Stock,
shall be held by the Company in LW's name pursuant to the provisions of this
Agreement (cumulatively, the "Retained Stock"). If and to the extent that they
are available amongst the LW Stock or the Sr. Stock, 128,000 shares of the
Retained Stock shall be freely tradable without reference to the restrictions of
Rule 144.
(d) All MEMS USA or related stock options and warranty held by the
Weisdorn Parties will be conveyed to the Company.
The Weisdorn Parties shall promptly deliver to the Company all copies and
embodiments, in whatever form, of all Confidential Information and Intellectual
Property in his possession or within his control (including, but not limited to,
written records, notes, photographs, manuals, notebooks, documentation, program
listings, flow charts, magnetic media, disks, diskettes, tapes and all other
materials containing any Confidential Information or Intellectual Property)
irrespective of the location or form of such material and, if requested by the
Company, shall provide the Company with written confirmation that all such
materials have been delivered. LW shall return the Company's credit card to the
Company. LW acknowledges that all deposits and all cash values (such as for the
lease of the Company's offices at 0000 Xxxxxxx Xxxxxx) will inure solely to the
benefit of the Company.
The Weisdorn Parties shall not, for the longer period of three years or during
the time the Client Account is in existence (the "Confidentiality Period"),
disclose or use at any time any Confidential Information (as defined below) of
which they are aware, whether or not such information is developed by them. The
Weisdorn Parties shall take all appropriate steps to safeguard Confidential
Information and to protect it against disclosure, misuse, espionage, loss and
theft.
(b) As used in this Agreement, the term "Confidential Information" means
all information of a confidential or proprietary nature (whether or not
specifically labeled or identified as "confidential"), in any form or medium,
that relates to the Company Parties or their business relations and business
activities. Confidential Information includes, but is not limited to, the
following: (i) internal business information (including historical and projected
financial information and budgets and information relating to strategic and
staffing plans and practices, business, training, marketing, promotional and
sales plans and practices, cost, rate and pricing structures and accounting and
business methods); (ii) identities and individual requirements of, and specific
contractual arrangements with, the Company Parties' customers, independent
contractors, joint venture partners and other business relations and their
confidential information; (iii) trade secrets, know-how, compilations of data
and analyses, techniques, systems, formulae, research, records, reports,
manuals, documentation, models, data and data bases relating thereto; (iv)
inventions, innovations, improvements, developments, methods, designs, analyses,
drawings, reports and all similar or related information (whether or not
patentable) and (v) other Intellectual Property. Confidential Information shall
not include any information that has been published (other than by a Weisdorn
Party) in a form generally available to the public prior to the date the
Weisdorn Parties, or either of them, propose to disclose or use such
information. Information shall not be deemed to have been published merely
because individual portions of the information have been separately published,
but only if all material features comprising such information have been
published in combination.
LW acknowledges and agrees that he has obtained valuable proprietary information
such as that regarding the Company's businesses in biomass to ethanol conversion
and in the development and sale of instrumentation, blending skids and
Intelligent Filtration Systems. LW accordingly covenants and agrees that during
the Confidentiality Period LW shall not directly or indirectly, either for
himself or for any other individual, corporation, partnership, joint venture or
other entity, participate in any business (including, without limitation, any
division, group, or franchise of a larger organization) anywhere in the world
which engages or which proposes to engage in the businesses of the Company. For
purposes of this Agreement, the term "participate in" shall include, without
limitation, having any direct or indirect interest in any corporation,
partnership, joint venture or other entity, whether as a sole proprietor, owner,
stockholder, partner, joint venturer, creditor or otherwise, or rendering any
direct or indirect service or assistance to any individual, corporation,
partnership, joint venture and other business entity (whether as a director,
officer, manager, supervisor, employee, agent, consultant or otherwise). LW has
determined and hereby acknowledges that such restrictions are reasonable in
terms of duration and scope, that area restrictions are necessary to protect the
goodwill of the Company's business, and that the nature of the Company's
business is such that it is not conducted with respect to geographical
boundaries. Notwithstanding the foregoing, LW shall not be prohibited hereby
from owning stock in a publicly traded company in which he owns less than five
per cent of the outstanding common stock, and in which he plays no managerial or
advisory role.
During the Confidentiality Period, the Weisdorn Parties shall not, directly or
indirectly, either for themselves or for any other individual, corporation,
partnership, joint venture or other entity, (i) induce or attempt to induce any
employee of, or consultant to, the Company to leave the employ of the Company,
or in any way interfere with the relationship between the Company and any
employee of, or consultant to, the Company, (ii) hire any person who was an
employee of, or consultant to, the Company at any time during the
Confidentiality Period, or (iii) induce or attempt to induce any customer,
supplier, licensee, licensor, vendor or other business relation of the Company
to cease doing business with the Company, or in any way interfere with the
relationship between any such customer, supplier, licensee, licensor, vendor or
business relation and the Company (including, without limitation, making any
negative statements or communications concerning the Company).
Subject to the provisions of this Agreement, and conditioned upon the delivery
to the Company and Custodian of the stock certificates and stock assignments
separate from certificate and other documents as set forth in this paragraph,
upon and by virtue of the mutual execution and delivery of this Agreement, the
Weisdorn Parties hereby release and discharge forever the Company Parties, and
each of them, and each of their agents, employees and attorneys, and their
successors and assigns, from any and all claims, debts, suits, warranties,
damages, interests, actions or causes of action of any nature, whether known or
unknown, suspected or unsuspected, arising from any matter, act or omission
through the date hereof related to the Company Parties including, without
limitation, any claims arising out of any employment contract between the
Company Parties.
The Weisdorn Parties warrant and represent that all the stock or other security
of the Company, or any warrant or option to acquire or sell any stock or other
security of the Company which they, or any of their respective spouses,
children, nieces, nephews, parents or siblings own or control, of record or
beneficially, and that neither they, nor any of their respective spouses,
children, nieces, nephews, parents or siblings own or control, of record or
beneficially, any right to purchase or receive any additional or other rights to
any shares or other securities of the Company are the subject of this agreement
and are hereby assigned to the company or the custodian account.
