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SEPARATION AGREEMENT AND GENERAL RELEASE OF CLAIMS

 
THIS SEPARATION AGREEMENT AND GENERAL RELEASE OF CLAIMS (the “Agreement”) is
made and entered into by and between Victory Energy Corporation, a Nevada
corporation (“Company”), Jon Fullenkamp, an individual (“Fullenkamp”), and Jon
Fullenkamp, as Trustee of the Virgin Family Trust, LLP (“Trust”).
 
RECITALS
 
A.           The Company and Fullenkamp entered into an Employment Agreement
dated effective as of  January 2, 2005 (the “Employment Agreement”).
 
B.           Fullenkamp voluntarily resigned from all positions with the
Company, including his position as its President, Chief Executive Officer,
employee and as a member of its Board of Directors, effective April 28, 2009
(the “Separation Date”).
 
C.           Fullenkamp is owed (i) an aggregate of approximately $1,014,000 as
reflected on the books of the Company as of April 29, 2009 (the “Original
Related Party Debt”), and (ii) an aggregate of approximately $10,000 of
unreimbursed expenses incurred during the first quarter of 2009 (the
“Unreimbursed Expenses”).
 
D.           The parties have agreed to (i) reduce the amount of the Original
Related Party Debt to a total of $500,000 (including imputed interest) (the
“Revised Related Party Debt”), (ii) repay the Revised Related Party Debt over
time in accordance with the Payment Schedule set forth in Section 4 below, (iii)
pay to Fullenkamp the amount of the Unreimbursed Expenses, and (iv) issue to
Fullenkamp10,000,000 shares of the Company’s common stock that were issuable to
Fullenkamp under the terms of the Employment Agreement (the “Employment
Agreement Shares”).
 
E.           The Company desires to obtain the assistance of Fullenkamp in
connection with certain matters relating to the Company’s ongoing business
operations in Texas and Fullenkamp is willing to provide such assistance, at the
Company’s request, in consideration of the Company’s agreement to accelerate the
payment of a portion of the Revised Related Party Debt in accordance with the
provision contained in Section 5(a).
 
F.           On April 18, 2008, the Company purportedly issued 2,000,000 shares
of the Company’s preferred stock (the “Preferred Shares”) to Fullenkamp in full
payment of $200,000 owed by the Company to Fullenkamp (which amount represented
a portion of the total amount owed by the Company to Fullenkamp at that
time).  Recently, the Company has determined that the Preferred Shares have not
been legally created under applicable provisions of Nevada Law and, as a result,
have not been validly issued by the Company.  As a result, the Company desires
to issue to Fullenkamp, and Fullenkamp desires to accept, 1,000,000 shares (the
“Replacement Shares”) of the Company’s common stock, $0.001 par value per share
(the “Common Stock”) in lieu of the Preferred Shares that were issued by the
Company to Fullenkamp in full consideration of the repayment of $200,000 of the
Company’s total indebtedness to Fullenkamp that existed at the time of the
issuance of the Preferred Shares.

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G.           The parties desire to terminate the Employment Agreement effective
as of the Separation Date and desire to implement certain restrictions on the
ability of Fullenkamp and the Trust to vote and transfer the Fullenkamp Shares
(as defined below).
 
NOW, THEREFORE, in consideration of the mutual promises set forth herein, the
sufficiency of which is hereby acknowledged by each of the parties hereto, the
parties hereby agree as follows:
 
1.           Effective Date; Term.  The effective date of this Agreement shall
be seven days after each of Fullenkamp and the Trust executes and delivers the
Agreement to the Company, unless Fullenkamp and/or the Trust otherwise revokes
this Agreement in writing before expiration of such seven-day period (“Effective
Date”).  The provisions of this Agreement shall continue in full force and
effect until the fifth anniversary of the Effective Date.
 
2.           Payment of All Accrued Wages; Termination of Employment
Agreement.  Fullenkamp acknowledges and represents that the Company has paid
Fullenkamp for all wages, bonuses, business expenses (other than the
Unreimbursed Expenses, the amount of which shall by paid to Fullenkamp in
accordance with Section 7) and unused vacation benefits due and owing to
Fullenkamp through the Separation Date, and that, except as described herein,
Fullenkamp is not and shall not be entitled to any other wages, bonuses,
compensation or benefits, whether pursuant to the Employment Agreement or
otherwise, including, without limitation, salary, bonuses, incentive
compensation, stock, stock options, accrued vacation payments, severance pay,
unvested pension benefits, employer-paid health benefits, fringe benefits,
expense reimbursements, or any other employment benefits.  Fullenkamp and the
Company acknowledge and agree that the Employment Agreement is hereby terminated
effective as of the Separation Date.
 
3.           Reduction in the Amount of Original Related Party Debt.  In
exchange for the Company entering into this Agreement and agreeing to the terms
hereof including the terms of the Payment Schedule (defined below), Fullenkamp
agrees to reduce the amount of the Original Related Party Debt to the amount of
the Revised Related Party Debt.
 
4.           Payment Schedule.  Subject to the provisions of Section 5(a), the
Company agrees to pay the Revised Related Party Debt to Fullenkamp as follows:
(i) $10,000 on the Effective Date, and (ii) 49 monthly installments of $10,000
on the first day of every calendar month beginning June 1, 2009 (the “Payment
Schedule”).  The parties acknowledge and agree that the aggregate $500,000 in
payments under the Payment Schedule includes $34,374 of imputed interest
relating to the 49 monthly payments of $10,000 calculated at a rate of 3.52 %
per annum.  The parties further acknowledge and agree that to the extent the
Company makes a payment to Fullenkamp pursuant to the provisions of Section
5(a), the total number of monthly installments shall be appropriately reduced to
take into account the dollar amount paid as a result of the provisions of
Section 5(a).
 
5.           Cooperation and Assistance.
 
(a)           In the Company’s sole discretion, the Company may request that
Fullenkamp provide certain services to the Company, including, but not limited
to,

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assisting the Company with its on-going drilling operations in Texas.  If the
Company requests Fullenkamp to provide such services and if, in the Company’s
sole discretion, the Company determines that Fullenkamp’s services and
assistance have had a significantly favorable impact on the Company, the Company
may, in its sole discretion and solely in consideration of such services,
accelerate up to ten payments (i.e., up to $100,000), due to Fullenkamp pursuant
to the Payment Schedule.  If such acceleration payment is made, the Company will
continue to make monthly payments in accordance with the Payment Schedule
commencing on the first day of the month after the date of the acceleration
payment, with the total number of such payments appropriately reduced to take
into account the acceleration payment.
 
(b)           Fullenkamp shall cooperate and provide reasonable assistance to
the Company (including its agents, owners, employees and attorneys), as
requested by the Company, (i) to affect a smooth and orderly transition and
continuation of the business of the Company, (ii) in the preparation and/or
defense and/or pursuit of any litigation involving the Company, and (iii) in
connection with any issues related to Fullenkamp’s employment with the Company,
Fullenkamp’s performance as an employee of the Company, or any related matters,
except as may be prevented by law.
 
(c)           Fullenkamp shall not (i) voluntarily aid, assist, cooperate with
or encourage any person in connection with the pursuit of any claim or dispute
against the Company, unless compelled by deposition or other proper legal
process, or (ii) voluntarily involve himself or participate in any action in
which the Company or any of the other Releasees (as defined below) is a party
without first obtaining the Company’s advance written consent or unless
requested to do so by the Company pursuant to Section 5(b) above.
 
(d)           Fullenkamp shall provide advance written notice to the Company in
the event he is subpoenaed to testify, or provide documents at deposition or at
trial, relating to (i) any actual, possible, alleged or perceived violation by
the Company or any other Releasee (as defined below) of any federal, state,
local, or administrative law, rule, or regulation; (ii) the negotiations
relating to, and the terms of, this Agreement; and (iii) any acts or omissions
by the Company or any of the other Releasees (as defined below) occurring prior
to the Effective Date of this Agreement.
 
(e)           Nothing in Sections 5(c) and (d) is intended to (i) preclude
Fullenkamp from assisting the Company in the manner described above, (ii)
interfere with any protected right to file charges, testify, assist or
participate in any manner in an EEOC investigation, hearing or proceeding, or
(iii) influence the substance of such aid or involvement which is properly
compelled by legal process.
 
(f)           Fullenkamp shall be reimbursed for expenses he incurs on behalf of
the Company provided that he shall not be authorized to incur on behalf of the
Company any expenses in excess of $1,500 without the prior consent of the
Company’s Chief Financial Officer, which consent shall be evidenced in writing
for any expenses in excess of $1,500.  As a condition to receipt of
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submit to the Company reasonable evidence that the amount involved was expended
and related to services provided under this Agreement.
 
6.           Issuance of Replacement Shares.  On the Effective Date, the Company
will issue to Fullenkamp the Replacement Shares in lieu of the Preferred Shares
and in full consideration of the repayment of $200,000 of the Company’s
indebtedness to Fullenkamp that existed at the time of the issuance of the
Preferred Shares.
 
7.           Payment of Unreimbursed Expenses.  On the Effective Date, the
Company will pay to Fullenkamp by check the amount of the Unreimbursed Expenses
to the extent Fullenkamp provides the Company with receipts evidencing the
payment of such amounts by Fullenkamp.
 
8.           Voting Agreement.
 
(a)           Each of Fullenkamp and the Trust hereby irrevocably grants to, and
appoints Ronald Zamber, and any other individual who shall hereafter be
designated by Fullenkamp and agreed to by the Company, as Fullenkamp’s and the
Trust’s proxy and attorney-in-fact (with full power of substitution), for and in
the name, place and stead of Fullenkamp and the Trust, to vote the Fullenkamp
Shares, or grant a consent or approval in respect of the Fullenkamp Shares, at
any meeting of shareholders of the Company or at any adjournment thereof or in
any other circumstances upon which their vote, consent or other approval is
sought in favor of any matter brought before the Company’s shareholders.
 
(b)           Each of Fullenkamp and the Trust represents and warrants that any
prior proxies heretofore given in respect of any portion of the Fullenkamp
Shares are not irrevocable, and that any such prior proxies are hereby revoked.
 
(c)           Each of Fullenkamp and the Trust hereby affirms that the proxy set
forth in this Section 8 is coupled with an interest and is irrevocable until
such time as this Agreement terminates in accordance with its terms.  Each
of Fullenkamp and the Trust hereby further affirms that the irrevocable proxy is
given in connection with the execution of this Agreement, and that such
irrevocable proxy is given in consideration of the terms of this
Agreement.  Each of Fullenkamp and the Trust hereby ratifies and confirms all
that such irrevocable proxy may lawfully do or cause to be done by virtue
hereof.  Such irrevocable proxy is executed and intended to be irrevocable in
accordance with the provisions of Section 78.355(5) of the Nevada Revised
Statutes.
 
(d)           During the term of this Agreement, neither Fullenkamp nor the
Trust shall Transfer any portion of the Fullenkamp Shares unless the person
receiving Transfer of such Fullenkamp Shares executes an Instrument of Accession
in the form attached hereto as Exhibit A agreeing to be bound by the terms of
this Agreement.  As used herein, “Transfer” shall mean and include any sale
(other than a sale made in a brokers’ transaction, as that term is defined in
Rule 144(g) under the Securities Act of 1933, as amended (the “Securities
Act”)), assignment, encumbrance, hypothecation, pledge, conveyance in trust,
gift, transfer by request, devise or descent, or other transfer or disposition
of any kind, including, but not limited to, transfers in connection with a

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marital separation or dissolution, transfers to receivers, levying creditors,
trustees or receivers in bankruptcy proceedings or general assignees for the
benefit of creditors, whether voluntary or by operation of law, directly or
indirectly, of any of the Fullenkamp Shares.
 
(e)           Each of Fullenkamp and the Trust will, from time to time, execute
and deliver, or cause to be executed and delivered, such additional or further
transfers, assignments, endorsements, consents and other instruments as the
Company may reasonably request for the purpose of effectively carrying out the
transactions contemplated by this Agreement and to vest the power to vote the
Fullenkamp Shares as contemplated by this Section 8.
 
9.           Lock-up Agreement.  In connection with the issuance of the
Employment Agreement Shares to Fullenkamp pursuant to the terms of this
Agreement, Fullenkamp agrees that until the fifth anniversary of the Effective
Date, Fullenkamp will not, directly or indirectly, through an “affiliate,”
“associate” (as such terms are defined in the rules and regulations promulgated
under the Securities Act), a family member or otherwise offer, pledge,
hypothecate, sell, contract to sell, or otherwise dispose of, or transfer any of
the Employment Agreement Shares; provided, however, that Fullenkamp may sell,
transfer, pledge, hypothecate or otherwise dispose (provided such sale,
transfer, pledge, hypothecation or disposition is made in compliance with all
applicable state and Federal securities laws), on a monthly basis, of up to that
number of Employment Agreement Shares which is equal to 15% of the total number
of shares of the Company’s common stock that were traded on the principal
trading market upon which shares of the Company’s common stock then trades
during the preceding month.
 
10.           Representations and Warranties of Fullenkamp and the Trust.  Each
of Fullenkamp and the Trust represents and warrants to the Company as follows:
 
(a)           Each of Fullenkamp and the Trust has all requisite power and
authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby.  The execution, delivery and performance of
this Agreement and the consummation of the transactions contemplated hereby have
been duly authorized by Fullenkamp and the Trust.  This Agreement has been duly
executed and delivered by Fullenkamp and the Trust and creates valid and binding
obligations enforceable against Fullenkamp and the Trust in accordance with its
terms.  Neither the execution, delivery or performance of this Agreement by
Fullenkamp and the Trust nor the consummation by Fullenkamp and the Trust of the
transactions contemplated hereby will (i) require any filing with, or permit,
authorization, consent or approval of, any federal, state, local or municipal
foreign or other government or subdivision, branch, department or agency thereof
or any governmental or quasi-governmental authority of any nature, including any
court or other tribunals, (ii) result in a violation or breach of, or constitute
(with or without due notice or lapse of time or both) a default under, or give
rise to any right of termination, amendment, cancellation or acceleration under,
or result in the creation of any pledge, claim, lien, option, charge,
encumbrance or security interest of any kind or nature whatsoever (a “Lien”)
upon any of Fullenkamp’s or the Trust’s properties or assets under, any of the
terms, conditions or provisions of any note, bond, mortgage, indenture, lease,
license, permit, concession, franchise, contract, agreement or other instrument
or

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obligation to which he or it is a party or by which he or it or any of his or
its properties or assets, including the Fullenkamp Shares, may be bound or (iii)
violate any judgment, order, writ, preliminary or permanent injunction or decree
or any statute, law, ordinance, rule or regulation of any Governmental Entity
applicable to Fullenkamp or the Trust or any of the properties or assets of
Fullenkamp or the Trust, including the Fullenkamp Shares;
 
(b)           Fullenkamp and the Trust are the record and beneficial owners, or
the trustee of a trust (including the Trust) whose beneficiaries are the
beneficial owners, of such number of shares of the Company’s Common Stock set
forth on Schedule I hereto (such shares of Common Stock, as such shares may be
adjusted by stock dividend, stock split, recapitalization, combination or
exchange of shares, merger, consolidation, reorganization or other change or
transaction, together with shares of Common Stock that may be acquired after the
date hereof by him, including shares of Common Stock issued upon the exercise of
options or warrants to purchase Common Stock (as the same may be adjusted as
aforesaid), being collectively referred to herein as the “Fullenkamp Shares”);
 
(c)           Subject to the terms of this Agreement, the Fullenkamp Shares and
the certificates representing the Fullenkamp Shares are now, and at all times
during the term hereof will be, held by Fullenkamp or the Trust, as the case may
be, or by a nominee or custodian for his or its benefit.  Each of Fullenkamp and
the Trust has good and marketable title to such portion of the Fullenkamp Shares
owned by such person or entity, free and clear of any Liens, proxies, voting
trusts or agreements, understandings or arrangements.  Neither Fullenkamp nor
the Trust owns of record or beneficially any Common Stock or other voting
interest in the Company other than the Fullenkamp Shares and shares of Common
Stock issuable upon the exercise of options and warrants, in each case as set
forth on Schedule I hereto;
 
(d)           Other than for whatever is specifically referenced or provided for
in this Agreement, there are no other sums or benefits of any nature whatsoever
due and owing to Fullenkamp or the Trust by the Company;
 
(e)           Other than for whatever is specifically provided for in this
Agreement, there are no rights of any nature whatsoever due and owing to
Fullenkamp or the Trust by the Company;
 
(f)           Fullenkamp has provided to the Company a disk containing a true
and correct copy of all files contained on his personal laptop computer in his
possession and used for business purposes relating to information and/or
documents pertaining to the business of the Company through the close of
business on the Separation Date;
 
(g)           Neither Fullenkamp nor the Trust has, at anytime, taken possession
of or claimed a right to any monies or other property of the Company that
Fullenkamp or the Trust was not legally or contractually entitled to receive;
 
(h)           Fullenkamp will cooperate fully with the investigation being
conducted by a committee of the Board of Directors of the Company relating to
matters presented to

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the Board of Directors by the Company’s Chief Financial Officer at a meeting of
the Board of Directors on April 28, 2009; and
 
(i)           Fullenkamp has no interest to any of the Preferred Shares, and has
been fully and fairly compensated for the $200,000 owed by the Company to him on
the date of issuance of the Preferred Shares by virtue of the issuance of the
Replacement Shares.
 
11.           Company Property.  Fullenkamp has returned to the Company and has
not copied or duplicated in any manner whatsoever, all tangible and intangible
property (including, without limitation, all computer hardware, whether portable
or stationary, and software), books, records, documents and reports owned by, or
pertaining to the business of, the Company or any of the Company’s existing or
prospective customers that was in Fullenkamp’s possession or under Fullenkamp’s
direct or indirect control as of the Separation Date.  If Fullenkamp shall come
into possession of any property (tangible or intangible), books, records,
documents or reports of the type described above after the Separation Date,
Fullenkamp will promptly return them to the Company.
 
12.           Failure to Make Payments Pursuant to Payment Schedule;
Remedies.  If the Company fails to make any payment pursuant to the Payment
Schedule (including any acceleration payment contemplated under Section 5(a)),
and such failure continues for a period of 30 days after the date on which such
failure first occurs, Fullenkamp shall have the right to declare all amounts due
and owing pursuant to the Payment Schedule (including any acceleration payments
under Section 5(a)) which have not otherwise been paid by the Company to
Fullenkamp, immediately due and payable.
 
13.           Release.  Subject to the continuing rights and obligations created
by or acknowledged in this Agreement, Fullenkamp, for the Trust, himself and his
heirs, assigns, executors, administrators, agents and successors, past and
present (collectively, the “Fullenkamp Affiliates”), hereby fully and without
limitation releases, covenants not to sue, and forever discharges the Company,
its subsidiaries, parent companies, divisions, affiliated corporations,
affiliated partnerships, trustees, directors, officers, shareholders, partners,
agents, employees, consultants, insurance carriers, attorneys, assigns,
executors and administrators, trustees, predecessors and successors, past and
present (collectively with the Company, the “Releasees”), both individually and
collectively, to the fullest extent permitted by law, from any and all rights,
claims, demands, liabilities, actions and causes of action whether in law or in
equity, suits, damages, losses, attorneys’ fees, costs, and expenses, of
whatever nature whatsoever, known or unknown, fixed or contingent, suspected or
unsuspected (collectively, the “Claims”), that Fullenkamp or the Fullenkamp
Affiliates now have, or may ever have, against any of the Releasees based upon
or arising out of any acts or omissions by the Company or any of the other
Releasees, or any other facts or matters, occurring or existing on or prior to
the Effective Date of this Agreement.
 
Without limiting the generality of the foregoing, Fullenkamp understands and
agrees that, except as otherwise prohibited by law, the Release provisions of
this Section 13 apply to any Claims that Fullenkamp or the Fullenkamp Affiliates
now have, or may ever have, against the Company or any of the other Releasees
occurring prior to the Effective Date that arise out of or

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are in any manner related to:  (i) Fullenkamp’s employment by the Company or any
of the other Releasees, and (ii) the termination of Fullenkamp’s employment with
the Company.
 
Without limiting the generality of the foregoing, Fullenkamp specifically and
expressly releases, to the fullest extent permitted by law, any Claims against
the Company and the other Releasees occurring prior to the Effective Date of
this Agreement arising out of or related to violations of any federal or state
employment discrimination laws, including the California Fair Employment and
Housing Act; the Age Discrimination In Employment Act; Title VII of the Civil
Rights Act of 1964; the Americans With Disabilities Act; the National Labor
Relations Act; the Equal Pay Act; the Employee Retirement Income Security Act of
1974; as well as Claims arising out of or related to violations of the
provisions of the California Labor Code; the California Government Code; the
California Business & Professions Code, including Business & Professions Code
Section 17200 et seq.; state and federal wage and hour laws, including the
federal Fair Labor Standards Act; breach of contract; fraud; misrepresentation;
common counts; unfair competition; unfair business practices; negligence;
defamation; infliction of emotional distress; invasion of privacy; assault;
battery; false imprisonment; wrongful termination; and any other state or
federal law, rule, or regulation.
 
Fullenkamp acknowledges and represents that Fullenkamp did not suffer any
work-related injuries while employed by the Company, that Fullenkamp has no
intention of filing any claims for workers’ compensation benefits of any type
against the Company, and that Fullenkamp will not file or attempt to file any
claims for workers’ compensation benefits of any type against the
Company.  Fullenkamp acknowledges that the Company has relied upon these
representations, and that the Company would not have entered into this Agreement
but for these representations.  As a result, Fullenkamp agrees, covenants, and
represents that the Company may, but is not obligated to, submit this Agreement
to the Workers’ Compensation Appeals Board for approval as a compromise and
release as to any workers’ compensation claims that Fullenkamp files.
 
14.           All Disputes.  Each of Fullenkamp and the Trust acknowledges that
Fullenkamp and the Trust is aware of and familiar with the provisions of Section
1542 of the California Civil Code, which provides as follows:
 
“A general release does not extend to claims which the creditor does not know or
suspect to exist in his or her favor at the time of executing the release, which
if known by him or her, must have materially affected his or her settlement with
the debtor.”
 
Each of Fullenkamp and the Trust hereby waives and relinquishes all rights and
benefits that Fullenkamp or the Trust has or may have under Section 1542 of the
California Civil Code, or the law of any other country, territory, state or
jurisdiction, or common law principle, to the same or similar effect.
 
15.           Older Worker’s Benefit Protection Act.  This Agreement is subject
to the terms of the Older Workers Benefit Protection Act of 1990 (the
“OWBPA”).  The OWBPA provides that an individual cannot waive a right or claim
under the Age Discrimination in Employment Act (“ADEA”) unless the waiver is
knowing and voluntary.  Pursuant to the terms of the

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OWBPA, Fullenkamp acknowledges and agrees that Fullenkamp has executed this
Agreement voluntarily, and with full knowledge of its consequences.
 
In addition, Fullenkamp hereby acknowledges and agrees that: (a) this Agreement
has been written in a manner that is calculated to be understood, and is
understood, by Fullenkamp; (b) the release provisions of this Agreement apply to
rights and claims that Fullenkamp may have under the ADEA, including the right
to file a lawsuit against the Company for age discrimination; (c) the release
provisions of this Agreement do not apply to any rights or claims that
Fullenkamp may have under the ADEA that arise after the date Fullenkamp executes
this Agreement; (d) the Company does not have a preexisting duty to pay the
Separation Amount identified in this Agreement; (e) Fullenkamp has been advised
in writing to consult with an attorney prior to executing this Agreement; (f)
Fullenkamp shall have a period of 21 days in which to consider the terms of this
Agreement prior to its execution; and (g) Fullenkamp shall have a period of
seven days after execution of this Agreement in which to revoke this
Agreement.  Fullenkamp further understands that this Agreement shall not become
effective until expiration of this seven-day period.
 
16.           Trade Secrets.  Fullenkamp acknowledges that, in the course of
Fullenkamp’s employment with the Company, Fullenkamp had access to confidential
information, including information, processes, and/or ideas that are not
generally known in the industry; that the Company considers confidential; that
give the Company a competitive advantage; and/or that affect or relate to the
Company, its business, or its methods of operation.  Fullenkamp acknowledges
that such confidential information is a valuable trade secret and the sole
property of the Company.
 
Fullenkamp acknowledges and agrees that the Company’s Confidential Information
and trade secrets include, for example, computer program listing, source code,
and object code; product design, contents, formulas, packaging, marketing, or
anything related to the unique character of products; the names and addresses of
the Company’s customers and prospective customers and all other confidential
information relating to those actual or prospective customers, marketing
information, price lists, cost information, business forms, and financial
records; as well as all other information that has or could have commercial
value or other utility in the business in which the Company or its customers are
engaged or in which they contemplate engaging and information, regardless of
whether the Company previously identified or labeled such information as
confidential.  By way of further example, the Company’s confidential information
and trade secrets include all information not generally known outside of the
Company that relates to the Company or its customers and that Fullenkamp
obtained or learned about solely as a result of Fullenkamp performing services
for the Company.
 
If Fullenkamp is not sure whether certain information is confidential
information within the scope of this Agreement, then Fullenkamp agrees to treat
that information as confidential unless informed in writing by the Company to
the contrary.
 
Accordingly, except as required by law, legal process, or in connection with any
litigation between the parties hereto with respect to matters arising out this
Agreement, Fullenkamp agrees that Fullenkamp will not disclose or furnish any
such information to any person other than an

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officer of the Company, and Fullenkamp will make no use of any such information
for Fullenkamp’s personal benefit.
 
Fullenkamp further represents and warrants that prior to or concurrently with
the execution of this Agreement, Fullenkamp has returned to the Company all such
information and property which belongs to the Company.  This includes all
information tangible or intangible whether in written, machine-readable, or any
information disclosed orally or visually.
 
Fullenkamp agrees and acknowledges that Fullenkamp has not, by virtue of
Fullenkamp’s association with the Company, acquired any rights in any
confidential information, goodwill, or other asset or property of the Company,
whether tangible or intangible, and whether or not created by Fullenkamp.  If
any such rights become vested in Fullenkamp by operation of law or otherwise,
Fullenkamp agrees to assign the same to the Company without further
consideration immediately upon the Company’s request.
 
17.           Fullenkamp Non-Solicitation.  Fullenkamp agrees that, during the
time period in which the Company is making payments pursuant to the Payment
Schedule, he will not directly or indirectly recruit, or attempt to recruit, any
other employee of the Company or its affiliates, or induce or attempt to induce
any employee of the Company to terminate or cease employment with the
Company.  During this period, if Fullenkamp is contacted by the Company’s
employee(s) with regard to employment opportunities, Fullenkamp agrees to inform
such employee(s) at the first discussion thereof that he cannot encourage,
follow-up on, hire or promote the hiring of such employee(s) unless consent is
provided to Fullenkamp by the Company’s owners to continue such discussions.
 
18.           No Other Claims and No Assignment.  Fullenkamp represents and
warrants that Fullenkamp has not filed any Claims for benefits against the
Company or any of the Releasees with any state or federal court or local, state
or federal agency.  Fullenkamp also represents and warrants that Fullenkamp has
not assigned or transferred any interest in any Claims that Fullenkamp may have
against the Company or any other Releasee.  Accordingly, Fullenkamp agrees to
indemnify and hold the Company and the other Releasees harmless from any
liability, claims, demands, damages, expenses, and attorneys’ fees incurred as a
result of any person or entity asserting any such Claims, assignment or transfer
of any right or claim.  This Agreement may be pleaded as a defense,
cross-complaint, counter-suit, cross-claim, or third party complaint in any
action involving the Company or any of the other Releasees.  This indemnity
provision does not require payment as a condition precedent to recovery by the
Releasees hereunder.
 
19.           Remedies.  If any of the representations of a party contained in
this Agreement are discovered to be untrue, or any of the obligations of a party
in this Agreement are breached, the party whose representation is untrue, or who
has breached an obligation, shall (a) be liable for any and all damages caused
by such misrepresentation or breach, (b) take all actions necessary to insure
that the other party to this Agreement (the “Other Party”) is not damaged by
reason of such misrepresentation or breach, and (c) indemnify and hold the Other
Party harmless from damages, losses, claims, or expenses resulting therefrom
(including, without limitation, attorneys’ fees).  If any of the representations
of a party contained in this Agreement are discovered to be untrue, or any of
the obligations of a party in this Agreement are breached, the Other Party shall
be entitled to recover damages and to pursue all other remedies available under

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contract or law by reason of any such untrue or inaccurate representations or
the breach of any warranty, covenant or other obligation under this Agreement.
 
20.           Choice of Law, Jurisdiction and Venue.  This Agreement is made and
entered into in the State of California and shall in all respects be interpreted
and enforced pursuant to the laws of the State of California, without regard to
or application of any of California’s conflict of laws rules.  Any dispute
arising out of or related to this Agreement shall be litigated exclusively in
the state or federal courts located in Orange County, California.  The Parties
expressly consent to personal jurisdiction and venue in the state and federal
courts located in Orange County, California.
 
21.           Integrated Agreement.  This Agreement constitutes a single,
integrated written contract expressing the entire agreement of the
parties.  There is no other agreement, written or oral, express or implied,
between the parties with respect to the subject matter hereof, except this
Agreement.  This Agreement may not be orally modified, and may be modified only
in a written instrument signed by the parties.
 
22.           Severability.  The parties to this Agreement agree, covenant and
represent that each and every provision of this Agreement shall be deemed to be
contractual, and that they shall not be treated as mere recitals at any time or
for any purpose.  Therefore, the parties further agree, covenant and represent
that each and every provision of this Agreement shall be considered
severable.  If a court of competent jurisdiction finds any provision, or part
thereof, to be invalid or unenforceable for any reason, that provision, or part
thereof, shall remain in force and effect to the extent allowed by law, and all
of the remaining provisions of this Agreement shall remain in full force and
effect and enforceable.
 
23.           Captions.  The captions and section numbers in this Agreement are
inserted for the reader’s convenience, and in no way define, limit, construe, or
describe the scope or intent of the provisions of this Agreement.
 
24.           Counterparts.  This Agreement may be executed in counterparts, and
when each party has signed and delivered at least one such counterpart, each
counterpart shall be deemed an original, and, when taken together with other
signed counterparts, shall constitute one agreement, which shall be binding upon
and effective as to all parties.
 
25.           Binding Agreement.  Fullenkamp represents and warrants that
Fullenkamp has the authority to enter into this Agreement on Fullenkamp’s behalf
individually and to bind all persons and entities claiming through Fullenkamp,
including the Trust.  This Agreement shall be binding upon and shall inure to
the benefit of the respective heirs, assigns, executors, administrators,
successors, subsidiaries, divisions and affiliated corporations and
partnerships, past and present, and trustees, directors, officers, shareholders,
partners, agents and employees, past and present, of Fullenkamp and the Company.
 
THE UNDERSIGNED HAVE READ THE FOREGOING AGREEMENT AND ACCEPT AND AGREE TO THE
PROVISIONS CONTAINED THEREIN, AND HEREBY EXECUTE IT, KNOWINGLY AND VOLUNTARILY,
AND WITH FULL UNDERSTANDING OF ITS CONSEQUENCES.

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FULLENKAMP FURTHER ACKNOWLEDGES AND UNDERSTANDS THAT FULLENKAMP HAS BEEN GIVEN
21 DAYS IN WHICH TO CONSIDER THE TERMS OF THIS AGREEMENT, AND THAT FULLENKAMP
HAS VOLUNTARILY CHOSEN TO EXECUTE THIS AGREEMENT ON THE DATE INDICATED BELOW.
 
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the dates
indicated below.
 

             
Dated:  May 15, 2009
By:
/s/        JOHN FULLENKAMP                  

 

 
VICTORY ENERGY CORPORATION
         
Dated:  May 15, 2009
By:
/s/        Robert Miranda      
Interim Chief Executive Officer
         

 

 
JON FULLENKAMP, AS TRUSTEE OF THE VIRGIN FAMILY TRUST, LLP
         
Date:  May 15, 2009
By:
/s/       
John Fullenkamp, Trustee
                 

 
 

 
 
 

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SCHEDULE I

Share Ownership

   Name
 
 Number of Shares      
 
 
 
Jon Fullenkamp
 
 9,097,500
 
 
Virgin Family Trust, LLP
 
 6,103,250

 
 
Option and Warrant Ownership
 

   Name
 
 Number of Options/Warrants     
 
 
 
Jon Fullenkamp
 
1,200,000 options
 
 
 
 
 

 

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EXHIBIT A
 
Form of Instrument of Accession
 

 
Instrument of Accession

 
Reference is made to Section 7 of that certain Separation Agreement and General
Release of Claims dated as of May 15, 2009, a copy of which is attached hereto
(as amended and in effect from time to time, the “Separation Agreement”),
between Victory Energy Corporation, a Nevada corporation (the “Company”), Jon
Fullenkamp, an individual (“Fullenkamp”) and Jon Fullenkamp as Trustee of the
Virgin Family Trust, LLP (the “Trust”).
 
The undersigned, ____________________________________, in order to become the
owner or holder of _______________ (collectively, the “Shares”) of the Company
hereby agrees that by his, her or its execution hereof the undersigned is a
party to the Separation Agreement with respect to Section 8 thereof, subject to
all of the restrictions and conditions applicable to Fullenkamp and the Trust
set forth in such Section 8 of the Separation Agreement, and all of the Shares
purchased by the undersigned in connection herewith (and any and all debt and
equity of the Company issued in respect hereof) are subject to all the
restrictions and conditions applicable to such Shares as set forth in Section 8
of the Separation Agreement.  This Instrument of Accession shall take effect and
shall become a part of Section 8 of the Separation Agreement immediately upon
execution.
 

 
Executed as of the date set forth below under the laws of the State of Nevada.
 
 
Signature
     
 
Address
     
 
 
     
 
 
     
 
Date
   

 
 
 

 
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CONSENT OF SPOUSE

 
I, Candice Fullenkamp, acknowledge that I have read the foregoing Separation
Agreement and General Release (the “Agreement”) and that I understand its
contents. I am aware that pursuant to the terms of Section 8 of the Agreement,
my spouse agrees (i) to grant to Ronald Zamber, and any other individual who
shall hereafter be designated by my spouse and agreed to by the Company, an
irrevocable proxy to vote the Fullenkamp Shares (as that term is defined in the
Agreement) and (ii) not to Transfer (as that term is defined in the Agreement)
the Fullenkamp Shares, including a Transfer of all or a portion of the
Fullenkamp Shares to me upon his death or upon our divorce or legal separation,
unless the transferee executes an Instrument of Accession whereby the transferee
agrees to be bound by the provisions of Section 8 of the Agreement.  I am also
aware that pursuant to Section 9 of the Agreement, my spouse agrees to certain
restrictions on his ability to sell the Employment Agreement Shares (as that
term is defined in the Agreement).
 
Being fully convinced of the reasonableness and wisdom of the Agreement,
including the provisions contained in Sections 8 and 9 of the Agreement, I
hereby approve and consent to it and hereby agree to be bound by its provisions.
 
Dated:  May 15, 2009

   /s/  
Candice Fullenkamp

 

 

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