MANAGEMENT CONTRACT
This Agreement ("Agreement") is entered into this 15th day
of January, 1997, by and between Wm. Xxxxxxx Xxxxxxxx
(hereinafter, "Xxxxxxxx"), whose address is 000 Xxxx Xxxxxx,
Xxxxxx, Xxxxxxxxxx 00000 and Chaos Group, Inc. (hereinafter
"Chaos"), whose address is 000 Xxxxx Xxxxx Xxxxx, Xxxxx 000,
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000.
WHEREAS, Xxxxxxxx desires to provide his expertise and
services in the fields of executive general management to Chaos;
and
WHEREAS, Chaos desires to use the services and expertise of
Xxxxxxxx in the management of the company;
NOW, THEREFORE, the parties agree to be bound to the terms
of this Agreement as follows:
1. Duties
A. During the Term of this Agreement, Xxxxxxxx will
serve as the President and Chief Executive Officer of Chaos and
will perform such duties to include, but not be limited to,
providing Chaos with his expertise in executive general
management.
X. Xxxxxxxx will oversee and direct all operations of
Chaos and its subsidiary, Clear Vision, Inc. and will be directly
responsible to the Board of Directors of Chaos.
X. Xxxxxxxx will direct Chaos at all times, and, in
such a way, as to maximize the company's market presence and its
net income.
X. Xxxxxxxx will ensure that accurate and current
records of Chaos and its subsidiary are at all times maintained,
and will provide timely reports to the Board of Directors keeping
them informed as to the direction of Chaos.
X. Xxxxxxxx will perform all other reasonable tasks
within his expertise as may be periodically assigned to him by
the Board of Directors.
2. Term and Termination
A. This Agreement shall commence on the day, month
and year first above written and shall continue in full force and
effect for a period of thirty six (36) months.
B. This Agreement may be terminated at will, with or
without cause, by either Xxxxxxxx or by the Board of Directors of
Chaos after having given a thirty (30) day written notice to the
other party to the address of record personally or by mail,
postage prepaid, or by facsimile machine message.
3. Compensation
X. Xxxxxxxx will devote his full time and effort to
the performance of his duties as set forth in this Agreement.
For these services, Chaos will compensate Xxxxxxxx in a base
salary in the amount of Ten Thousand Dollars ($10,000.00) per
month. If Chaos realizes a net profit, after having given effect
for tax liability, for a full twelve (12) months ending
coincident with its fiscal year end, to wit December 31, then for
the following twelve months the Board of Directors may approve
that Xxxxxxxx will be paid an amount in addition to his base
salary to reward his performance. Maximum payroll to Xxxxxxxx
under this Agreement will not exceed Two Hundred Fifty Thousand
Dollars ($250,000.00) in any one year.
X. Xxxxxxxx may accrue any portion of his salary and
Chaos will maintain this accrual as a primary short-term
liability on its books of record. In the event of termination of
this Agreement, all accrual still existing on the company books
of record will be paid to Xxxxxxxx within five (5) business days
of said termination by either party to this Agreement.
C. Upon execution of this Agreement, Xxxxxxxx will be
vested with an option to purchase up to and including 960,000
shares of the company's common stock (par value $0.001) for a
value of $0.25 per share. Thereafter, and for each fiscal year
during the term of this Agreement wherein a net profit has been
realized by Chaos, after giving effect for tax liabilities,
Xxxxxxxx will be granted options to purchase an additional one
million (1,000,000) shares of said stock at $0.25 per share.
Xxxxxxxx may exercise his earned options at any time either by
direct payment to the company or by applying an offset of equal
amount against any accrual on his behalf then existing on the
books of the corporation.
X. Xxxxxxxx agrees that neither federal nor state nor
local taxes will be withheld from his payroll, and as such he is
fully and personally liable for their payment.
4. Confidentiality
Xxxxxxxx agrees to maintain in strictest confidence
all information provided by Chaos or any subsidiary of Chaos
regarding any and all proprietary information. Xxxxxxxx further
agrees to hold in trust and use such information only as needed
to fulfill Xxxxxxxx'x obligations for Chaos' sole benefit.
Xxxxxxxx shall not use such information for his own benefit,
publish or otherwise disclose it to others, or permit its use to
the detriment of Chaos. Upon termination of Xxxxxxxx'x
obligations under this Agreement, Xxxxxxxx shall return to Chaos
all copies of all information provided by Chaos to Xxxxxxxx,
including partial copies and derivative works of such
information.
5. Limitation on Use
Xxxxxxxx shall use the proprietary information
provided to him by Chaos only in connection with the duties as
set forth in Section 1 of this Agreement. It is expressly
understood and agreed, however, that Xxxxxxxx may perform duties
for others which are not based upon or derived from Chaos'
proprietary and/or patented information. Except as provided in
this Agreement, Xxxxxxxx shall have no right to disclose or use
proprietary of Chaos and no license is granted or implied under
this Agreement.
6. Indemnification
(A) Xxxxxxxx shall indemnify, defend, and hold
harmless Chaos for claims, actions, losses, damages and expenses,
including costs and reasonable attorneys fees, arising out of
Xxxxxxxx'x negligence relating to any breach of this Agreement.
(B) Chaos shall indemnify, defend, and hold
harmless Xxxxxxxx from and against all claims, actions, losses,
damages, and expenses, to include costs and reasonable attorneys
fees, arising out of Chaos' negligence or breach of this
Agreement, or otherwise relating to any of the services accepted
and approved by Chaos under this Agreement.
7. Force Majeure
(A) Either party shall be excused for any inability
to perform, or for a delay in performance, when the inability or
delay is due to any cause beyond its reasonable control,
including, but not limited to, an act of God, storm, flood,
earthquake, labor strike or other labor work stoppage, equipment
failure, rebellion, riot, sabotage, fire, explosion, or
government act or regulation.
(B) The affected party shall promptly notify the
other party of the occurrence of such a cause and specify its
reasonable efforts to remove the cause or its inability to
perform, or delay in performance, provided, however, the affected
party shall not be required to settle a labor dispute against its
own best judgment.
8. Headings
The headings appearing in this Agreement have been
inserted for the purposes of convenience and ready reference.
They do not purport to and shall not be deemed to define, limit
or extend the scope or intent of the provisions to which they
appertain.
9. Governing Law
This Agreement shall be governed and construed in
accordance with the laws of the State of California.
10. Waiver
The failure of either party at any time to enforce
any provision of this Agreement, to exercise its rights under any
provision, or to require a certain performance of any provision,
shall in no way be construed as a waiver of such provision, nor
in any way affect the validity of this Agreement or the right of
the party thereafter to enforce each and every provision.
11. Severability
If any provision of this Agreement shall be held
unenforceable or invalid, the remaining provisions shall continue
in force.
12. Assignment
Neither party shall assign its rights or obligations
under this Agreement without the prior written consent of the
other.
13. Arbitration
Any controversy or claim arising out of, or relating
to, this Agreement or a breach hereof shall be settled by
arbitration in accordance with the rules then obtained from the
American Arbitration Association.
14. Entire Agreement
This Agreement constitutes the entire understanding
between the parties and supersedes all other agreements between
the parties with respect to the subject matter of this Agreement.
There are no understandings, representations, or warranties of
any kind, express or implied, not expressly set forth in this
Agreement. No modification of this Agreement shall be effective
unless in writing and signed by both parties.
IN WITNESS WHEREOF, the parties have executed this Agreement as
of the day, month, and year first above written.
WM. XXXXXXX XXXXXXXX
/s/ Wm. Xxxxxxx Xxxxxxxx
CHAOS GROUP, INC.
By: /s/ Xxxxxxx Xxxxxxxx
Xxxxxxx Xxxxxxxx, President
