EMPLOYMENT AGREEMENT
THIS
EMPLOYMENT AGREEMENT
(the
“Agreement”) is made as of this 1st
day of
May 2006, by Coda Octopus Group, Inc., a Delaware corporation (Coda Octopus
Group, Inc. and its subsidiaries hereinafter referred to as “Coda Octopus”),
with its principal place of business at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000 and Xxxxx Xxxxx, residing in 0000 Xxxxxx Xxxx Xxxx, Xxxxxxxxx, XX 00000
(“the “Executive”) (collectively the "Parties").
WHEREAS,
the
Parties desire to enter into the Agreement to reflect the Executive’s executive
capacities in Coda Octopus’ business and to provide for Coda Octopus’s
employment of the Executive; and
WHEREAS,
the
Parties wish to set forth the terms and conditions of that
employment;
NOW
THEREFORE,
in
consideration of the mutual covenants and promises contained herein, and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged by the Parties, the Parties agree as follows:
|
1.
|
Term
of Employment
|
|
Coda
Octopus hereby employs the Executive, and the Executive hereby accepts
employment with Coda Octopus, upon the terms and conditions set forth
in
this Agreement, for a term (the “Employment Period”) commencing on the
date hereof until terminated pursuant to Section 5.
|
|
2.
|
Title;
Duties
|
|
During
the Employment Period, the Executive shall be employed in the business
of
Coda Octopus including its affiliates. The Executive shall serve
as Senior
Vice President Government Liaison (see Appendix A for description
of
duties). In addition to the duties set forth in Appendix A, the Executive
shall perform such services consistent with his position and as may
be
assigned to him from time to time by Coda
Octopus.
|
|
3.
|
Extent
of Services
|
|
The
Executive will not engage in the management of any business activities
during the Employment Period except those which are for the sole
benefit
of Coda Octopus and to devote his entire business time, attention,
skill
and effort to the performance of his duties under this Agreement.
Notwithstanding the foregoing, the Executive may, without impairing
or
otherwise adversely affecting the Executive’s performance of his duties to
Coda Octopus, (i) make and manage personal investments in accordance
with
the Company’s Personal Securities Account Information Sheet in place at
the time and (ii) with the prior approval of Coda Octopus, engage
in
charitable, professional and civic activities and serve on the boards
of
directors of corporations other than Coda Octopus, provided, however,
that
no such approval shall be necessary for the Executive’s continued
engagement in such charitable, professional and civic activities
in which
he was engaged and service on any board of directors on
which he was serving, on the date of this Agreement, all of which
have
been previously disclosed to Coda Octopus in writing but, provided
further, that in no event shall the Executive be permitted to serve
on the
board of directors of any other entity that owns, operates, acquires,
sells, develops and/or manages any companies which is involved in
sub sea
or sonar inspection or visualization. During the Employment Period,
the
Executive may also continue to serve as Chairman for Xxxxxxx Financial
to the extent that this is not a full-time job and does not impair
his
abilities to properly and effectively perform the services under
this
Employment Agreement.
|
1
|
4.
|
Compensation
and Benefits
|
|
(a)
|
Salary.
Coda Octopus shall pay the Executive an initial gross base annual
salary
(“Base Salary”) of $150,000 commencing May 1st,
2006. The Base Salary shall be payable (minus such deductions as
may be
required by law or reasonably requested by the Executive) in accordance
with Coda Octopus’s regularly scheduled payroll dates but in no event less
frequently than monthly. If the Executive is an Officer of the parent
company, Coda Octopus’s Compensation Committee (the “Compensation
Committee”), or alternatively Coda Octopus, shall review the Executive’s
Base Salary annually and may increase (but not decrease) the Executive’s
Base Salary as in effect from time to time as the Compensation Committee
shall deem appropriate.
|
|
(b)
|
Incentive
Compensation.
Commencing with calendar year 2006, the Executive shall be entitled
to
receive an annual cash and/or stock incentive bonus (the “Incentive
Bonus”) for each Coda Octopus financial year during the Employment Period
based on the level of accomplishment of management and performance
objectives as established by the Compensation
Committee.
|
|
(c)
|
Paid
Time Off and Other Benefits.
The Executive shall be entitled to paid time off for a minimum of
30
business days each calendar year, which shall be accrued ratably
during
the calendar year, as well as holiday pay in accordance with Coda
Octopus’s policies in effect from time to time as set forth in its
employment handbook as the same may be modified from time to time.
The
Executive shall be eligible to participate in such life, health,
and
disability insurance, pension, deferred compensation and incentive
plans,
options and awards, performance bonuses and other benefits as Coda
Octopus
extends, as a matter of policy, to its executive employees. The Coda
Octopus shall maintain a disability insurance policy or plan covering
the
Executive during the Employment
Period.
|
|
(d)
|
Reimbursement
of Business Expenses.
Coda Octopus shall reimburse the Executive for all reasonable travel,
entertainment and other expenses incurred or paid by the Executive
in
connection with, or related to, the performance of his duties,
responsibilities or services under this Agreement, upon presentation
by
the Executive of documentation, expense statements, vouchers, and/or
such
other supporting information as Coda Octopus may reasonably
request.
|
|
(e)
|
Restricted
Stock Grant (“RSG”).
Provided that neither the Executive nor Coda Octopus has prior thereto
given notice terminating this Agreement, the Executive shall, during
the
remainder of the current fiscal year of Coda Octopus be issued 25,000
shares of common stock of Coda Octopus (“Initial
Issue”)
to be issued and distributed in equal tranche of 12,500 following
the end
of each of the two remaining quarters of the current fiscal year
of Coda
Octopus. Each tranche so issued shall be subject to the ratification
of
Coda Octopus’s Board. This shall be followed by 50,000 shares of common
stock of Coda Octopus annually, from November 1st,
2006 (“Annual
RSG”).
The Annual RSG shall be issued and distributed equally at the end
of each
fiscal quarter and such issue shall be subject to the ratification
by Coda
Octopus’s Board. Certificates representing said shares will bear a
restrictive legend stating that sale or other transfer of the shares
be
made only pursuant to an effective registration statement filed with
the
Securities and Exchange Commission or an exemption from such registration.
|
2
|
(f)
|
Car
or Car Allowance.
Coda Octopus shall reimburse the Executive $5,000 per annum in lieu
of
specific reimbursement expenses for use of a personal vehicle or
the
provision of a vehicle.
|
|
(g)
|
D&O
Insurance Coverage.
Subject to the terms of Coda Octopus’ directors and officers liability
insurance policy, during and for a period of a maximum of three years
after termination, the Executive shall be entitled to director and
officer
insurance coverage for his acts and omissions while an officer and
director of Coda Octopus on a basis no less favorable to him than
the
coverage provided current officers and
directors.
|
|
5.
|
Termination
|
|
(a)
|
Termination
by Coda Octopus.
Coda Octopus may terminate the Executive’s employment under this Agreement
at any time upon 90 days’ prior written notice to the Executive; provided
that Coda Octopus may terminate the Executive’s employment under this
Agreement at any time for Cause, upon written notice by Coda Octopus
to
the Executive. For purposes of this Agreement, “Cause” for termination
shall mean a determination by Coda Octopus in good faith that any of the
following events have occurred: (i) the conviction or indictment
of the
Executive of, or the entry of a plea of guilty or nolo contendere
by the
Executive to, any felony; (ii) fraud, misappropriation or embezzlement
by
the Executive; (iii) the Executive’s willful failure or gross negligence
in the performance of his assigned duties for Coda Octopus, which
failure
or gross negligence continues for more than 15 days following the
Executive’s receipt of written notice of such willful failure or gross
negligence from Coda Octopus; (iv) any act or omission of the Executive
that has a demonstrated and material adverse impact on Coda Octopus’s
reputation for honesty and fair dealing; (v) the breach by the Executive
of his duties under this Agreement or any material term of this Agreement;
or (vi) a material violation by Executive of Coda Octopus’s employment
policies which continues for more than 15 days following written
notice of
such violation from Coda Octopus.
|
|
(b)
|
Termination
by the Executive without Good Reason.
The Executive may terminate this Agreement at any time without Good
Reason, upon giving Coda Octopus 90 days’ written notice. At Coda Octopus'
sole discretion, it may substitute 90 days’ salary in lieu of notice. Any
salary paid to the Executive in lieu of notice shall not be offset
against
any entitlement the Executive may have to the Severance Payment pursuant
to Section 6(b).
|
|
(c)
|
Termination
by Executive for Good Reason.
The Executive may terminate his employment under this Agreement at
any
time for Good Reason, upon written notice by the Executive to Coda
Octopus. For purposes of this Agreement, “Good Reason” for termination
shall mean that the Executive has complied with the “Good Reason Process”
(hereafter defined) following the occurrence of one of the following
events, without the Executive’s consent: (i) the assignment to the
Executive of substantial duties or responsibilities inconsistent
with the
Executive’s position at Coda Octopus, or any other action by Coda Octopus
which results in a substantial diminution or other substantive adverse
change in the Executive’s duties or responsibilities, including, but not
limited to, a substantial diminution in the Executive’s title as set forth
in Section 2 hereof; (ii) a requirement that the Executive work
principally from a location outside the 50 mile radius from Coda
Octopus’s
address first written above, without prior agreement with the Executive;
(iii) Coda Octopus’s failure to pay the Executive any Base Salary or other
compensation to which he becomes entitled, other than an inadvertent
failure which is remedied by Coda Octopus within 30 days after receipt
of
written notice thereof from the Executive (or ten days for failure
to pay
Base Salary); (iv) Coda Octopus’s failure to honor the initial equity
award granted pursuant to Section 4(e), if applicable; (v) any reduction
in the Executive’s aggregate Base Salary and any involuntary reduction in
the Executive’s other compensation taken as a whole, excluding any
reductions caused by the failure to achieve performance targets;
or (vi)
Coda Octopus’s material breach of any of its other material obligations
under this Agreement. “Good Reason Process” shall mean that (i) Executive
reasonably determines in good faith that a “Good Reason” event has
occurred; (ii) Executive notifies Coda Octopus in writing of the
occurrence of the Good Reason event; (iii) Executive cooperates in
good
faith with Coda Octopus’s efforts, for a period not less than 30 days
following such notice, to modify Executive’s employment situation in a
manner acceptable to Executive and Coda Octopus; and (iv) notwithstanding
such efforts, one or more of the Good Reason events continues to
exist and
has not been modified in a manner acceptable to Executive. If Coda
Octopus
cures the Good Reason event in a manner acceptable to Executive during
the
30 day period, Good Reason shall be deemed not to have
occurred.
|
3
|
(d)
|
Executive’s
Death or Disability.
The Executive’s employment shall terminate immediately upon his death or,
upon written notice as set forth below, his Disability. As used in
this
Agreement, “Disability” shall mean such physical or mental impairment as
would render the Executive eligible to receive benefits under the
long-term disability insurance policy or plan then made available
by Coda
Octopus to the Executive. If the Employment Period is terminated
by reason
of the Executive’s Disability, either party shall give 30 days’ advance
written notice to that effect to the
other.
|
|
(e)
|
Date
of Termination.
“Date of Termination” shall mean: (A) if Executive’s employment is
terminated by his death, the date of his death; (B) if Executive’s
employment is terminated on account of disability under Section 5(d),
90
days after the date on which a notice of termination is given; (C)
if
Executive’s employment is terminated by Coda Octopus for Cause under
Section 5(a), the date on which notice of termination is given; (D)
if
Executive’s employment is terminated under Section 5(b), 90 days after the
date on which a notice of termination is given; and (E) if Executive’s
employment is terminated by Executive under Section 5(c), 30 days
after
the date on which a notice of Good Reason is
given.
|
|
6.
|
Effect
of Termination
|
|
(a)
|
General.
Regardless of the reason for any termination of this Agreement, the
Executive (or the Executive’s estate if the Employment Period ends on
account of the Executive’s death) shall be entitled to: (i) any unpaid
portion of his Base Salary through the Date of Termination unless
otherwise stated below; (ii) reimbursement for any outstanding reasonable
expense he has incurred hereunder; (iii) continued insurance benefits
to
the extent required by law; (iv) payment of any vested but unpaid
rights
as required independent of this Agreement by the terms of any bonus
or
other incentive pay or stock plan, or any other employee benefit
plan or
program of Coda Octopus; and (v) except in the case of “Termination by
Coda Octopus for Cause,” any bonus or incentive compensation that was
approved but not paid. The amount payable under this Section 6(a)
shall be
paid to the Executive or the Executive’s estate (in the event of the
Executive’s death) in a single lump sum no later than 30 days after the
Date of Termination.
|
4
|
(b)
|
Termination
by Coda Octopus for Cause or by Executive without Good
Reason.
If
Coda Octopus terminates the Executive’s employment for Cause or the
Executive terminates his employment without Good Reason, the Executive
shall have no rights or claims against Coda Octopus except to receive
the
payments and benefits described in Section 6(a). Coda Octopus shall
have
no further obligations to Executive except as otherwise expressly
provided
under this Agreement, provided any such termination shall not adversely
affect or alter Executive’s rights under any employee benefit plan of Coda
Octopus in which Executive, at the Date of Termination, has a vested
interest, unless otherwise provided in such employee benefit plan
or any
agreement or other instrument attendant thereto. In addition, all
vested
but unexercised stock options held by Executive as of the Date of
Termination must be exercised by Executive within three months following
the Date of Termination or by the end of the option term, if earlier.
All
other stock-based grants and awards held by Executive shall vest
or be
canceled upon the Date of Termination in accordance with their
terms.
|
|
(c)
|
Termination
by Coda Octopus without Cause or by Executive for Good
Reason.
Except as provided in Section 6(d), if Coda Octopus terminates the
Executive’s employment without Cause, or the Executive terminates his
employment for Good Reason pursuant to Section 5(c), the Executive
shall
be entitled to receive, in addition to the items referenced in Section
6(a), the following:
|
|
(i)
|
a
lump sum payment equal to one times the sum of (x) the Executive’s then
current Base Salary and (y) the greater of (A) the average of the
Executive’s bonuses (taking into account a payment of no bonus or a
payment of a bonus of $0) with respect to the preceding three fiscal
years
(or the period of the Executive’s employment if shorter), (B) the
Executive’s bonus with respect to the preceding fiscal year and (C) in the
event that such termination of employment occurs before the first
anniversary of the Commencement Date, the Executive’s annualized projected
bonus for such year (the “Severance Payment”). The Severance Payment shall
be paid to the Executive within 60 days following the Date of
Termination;
|
|
(ii)
|
continued
payment by Coda Octopus for life, health and disability insurance
coverage
and salary and other benefits for the Executive and the Executive’s spouse
and dependents for one year following the Date of Termination to
the same
extent that Coda Octopus paid for such coverage immediately prior
to the
termination of the Executive’s employment and subject to the eligibility
requirements and other terms and conditions of such insurance coverage,
provided that if any such insurance coverage shall become unavailable
during the one year period, Coda Octopus thereafter shall be obliged
only
to pay to the Executive an amount which, after reduction for income
and
employment taxes, is equal to the employer premiums for such insurance
for
the remainder of such severance period;
and
|
|
(iii)
|
vesting
as of the Date of Termination in any unvested portion of any stock
option,
restricted stock and any other long term incentive award previously
issued
to the Executive by Coda Octopus. Each such stock option must be
exercised
by the Executive within 180 days after the Date of Termination or
the date
of the remaining option term, if
earlier.
|
5
|
None
of the benefits described in this Section 6(c) will be payable unless
the
Executive has signed a general release which has become irrevocable,
satisfactory to Coda Octopus in the reasonable exercise of its discretion,
releasing Coda Octopus, its affiliates including Coda Octopus, and
their
officers, directors and employees, from any and all claims or potential
claims arising from or related to the Executive’s employment or
termination of employment.
|
|
(d)
|
Termination
Following Change in Control.
If, (x) during the Employment Period and within 12 months following
a
Change in Control, Coda Octopus (or its successor) terminates the
Executive’s employment without Cause pursuant to Section 5(a) or the
Executive terminates his employment for Good Reason pursuant to Section
5(c), or (y) the Executive, by notice given under this clause (y)
of this
Section 6(d) during the 90 day period commencing on the three-month
anniversary of the date of the Change in Control (the “Notice Period”),
terminates his employment for any reason, which termination shall
be
effective on the last day of the Notice Period, the Executive shall
be
entitled to receive, in addition to the items referenced in Section
6(a),
the following:
|
| (i) |
the
items referenced in Section 6(c);
and
|
| (ii) |
Tax
Gross-up Payment, as follows:
|
(A)
In
the event that any payment made pursuant to Section 6(c) hereof or any insurance
benefits, accelerated vesting, pro-rated bonus or other benefit payable to
the
Executive (under this Agreement or otherwise), (1) constitute “parachute
payments” within the meaning of Section 280G (as it may be amended or replaced)
of the Internal Revenue Code of 1986, as amended (the “Code”) (“Parachute
Payments”) and (2) are subject to the excise tax imposed by Section 4999 (as it
may be amended or replaced) of the Code (“the Excise Tax”), then Coda Octopus
shall pay to the Executive an additional amount (the “Gross-Up Amount”) such
that the net benefits retained by the Executive after the deduction of the
Excise Tax (including interest and penalties) and any federal, or local income
and employment taxes (including interest and penalties) upon the Gross-Up Amount
shall be equal to the benefits that would have been delivered hereunder had
the
Excise Tax not been applicable and the Gross-Up Amount not been
paid.
(B)
For
purposes of determining the Gross-Up Amount: (1) Parachute Payments provided
under arrangements with the Executive other than under any bonus or other
incentive pay or stock plan or program of Coda Octopus (collectively, the
“Plan”) and this Agreement, if any, shall be taken into account in determining
the total amount of Parachute Payments received by the Executive so that the
amount of excess Parachute Payments that are attributable to provisions of
the
Plan and Agreement is maximized; and (2) the Executive shall be deemed to pay
federal, state and local income taxes at the highest marginal rate of taxation
for the Executive’s taxable year in which the Parachute Payments are includable
in the Executive’s income for purposes of federal, state and local income
taxation.
6
(C)
The
determination of whether the Excise Tax is payable, the amount thereof, and
the
amount of any Gross-Up Amount shall be made in writing in good faith by a
nationally recognized independent certified public accounting firm selected
by
Coda Octopus and approved by the Executive, such approval not to be unreasonably
withheld (the “Accounting Firm”). If such determination is not finally accepted
by the Internal Revenue Service (or state or local revenue authorities) on
audit, then appropriate adjustments shall be computed based upon the amount
of
Excise Tax and any interest or penalties so determined; provided, however,
that
the Executive in no event shall owe Coda Octopus any interest on any portion
of
the Gross-Up Amount that is returned to Coda Octopus. For purposes of making
the
calculations required by this Section 6(d)(v), to the extent not otherwise
specified herein, reasonable assumptions and approximations may be made with
respect to applicable taxes and reasonable, good faith interpretations of the
Code may be relied upon. Coda Octopus and the Executive shall furnish such
information and documents as may be reasonably requested in connection with
the
performance of the calculations under this Section 6(d)(v). Coda Octopus shall
bear all costs incurred in connection with the performance of the calculations
contemplated by this Section 6(d)(v). Coda Octopus shall pay the Gross-Up Amount
to the Executive no later than 60 days following receipt of the Accounting
Firm’s determination of the Gross-Up Amount.
|
(iii)
|
None
of the benefits described in this Section 6(d) will be payable unless
the
Executive has signed a general release which has become irrevocable,
satisfactory to Coda Octopus in the reasonable exercise of its discretion,
releasing Coda Octopus, its affiliates including Coda Octopus, and
their
officers, directors and employees, from any and all claims or potential
claims arising from or related to the Executive’s employment or
termination of employment.
|
|
(iv)
|
For
the purposes of this Agreement, a “Change in Control” shall mean any of
the following events:
|
(A)
The
ownership or acquisition (whether by a merger contemplated by Section
6(d)(vii)(B) below, or otherwise) by any Person (other than a Qualified
Affiliate), in a single transaction or a series of related or unrelated
transactions, of Beneficial Ownership of more than 50% of (1) Coda Octopus’s
outstanding common stock (the “Common Stock”) or (2) the combined voting power
of Coda Octopus’s outstanding securities entitled to vote generally in the
election of directors (the “Outstanding Voting Securities”);
(B)
The
merger or consolidation of Coda Octopus with or into any other Person other
than
a Qualified Affiliate, if, immediately following the effectiveness of such
merger or consolidation, Persons who did not Beneficially Own Outstanding Voting
Securities immediately before the effectiveness of such merger or consolidation
directly or indirectly Beneficially Own more than 50% of the outstanding shares
of voting stock of the surviving entity of such merger or consolidation
(including for such purpose in both the numerator and denominator, shares of
voting stock issuable upon the exercise of then outstanding rights (including
conversion rights), options or warrants) (“Resulting Voting Securities”),
provided that, for purposes of this Section 6(d)(vii)(B), if a Person who
Beneficially Owned Outstanding Voting Securities immediately before the merger
or consolidation Beneficially Owns a greater number of the Resulting Voting
Securities immediately after the merger or consolidation than the number the
Person received solely as a result of the merger or consolidation, such greater
number will be treated as held by a Person who did not Beneficially Own
Outstanding Voting Securities before the merger or consolidation, and provided
further that such merger or consolidation would also constitute a Change in
Control if it would satisfy the foregoing test if rights (including conversion
rights), options and warrants were not included in the calculation;
7
(C)
Any
one or a series of related sales or conveyances to any Person or Persons
(including a liquidation or dissolution) other than any one or more Qualified
Affiliates of all or substantially all of the assets of Coda
Octopus;
(D)
Incumbent
Directors cease, for any reason, to be a majority of the members of the Board
of
Directors, where an “Incumbent Director” is (1) an individual who is a member of
the Board of Directors on the effective date of this Agreement or (2) any new
director whose appointment by the Board of Directors or whose nomination for
election by the stockholders was approved by a majority of the persons who
were
already Incumbent Directors at the time of such appointment, election or
approval, other than any individual who assumes office initially as a result
of
an actual or threatened election contest with respect to the election or removal
of directors or other actual or threatened solicitation of proxies or consents
by or on behalf of a Person other than the Board of Directors or as a result
of
an agreement to avoid or settle such a contest or solicitation; or
(E)
A
Change in Control shall also be deemed to occur immediately before the
completion of a tender offer for Coda Octopus’s securities representing more
than 50% of the Outstanding Voting Securities, other than a tender offer by
a
Qualified Affiliate.
(F)
For
purposes of this Agreement, the following definitions shall apply: (a)
“Beneficial Ownership,” “Beneficially Owned” and “Beneficially Owns” shall have
the meanings provided in Exchange Act Rule 13d-3; (b) “Exchange Act” shall mean
the Securities Exchange Act of 1934, as amended; (c) “Person” shall mean any
individual, entity, or group (within the meaning of Section 13(d)(3) or 14(d)(2)
of the Exchange Act), including any natural person, corporation, trust,
association, company, partnership, joint venture, limited liability company,
legal entity of any kind, government, or political subdivision, agency or
instrumentality of a government, as well as two or more Persons acting as a
partnership, limited partnership, syndicate or other group for the purpose
of
acquiring, holding or disposing of Coda Octopus’s securities; and (d) “Qualified
Affiliate” shall mean (i) any directly or indirectly wholly owned subsidiary of
Coda Octopus; (ii) any employee benefit plan (or related trust) sponsored or
maintained by Coda Octopus or by any entity controlled by Coda Octopus;
or
|
(v)
|
any
Person consisting in whole or in part of the Executive or one or
more
individuals who are then Coda Octopus’s Chief Executive Officer or any
other named executive officer (as defined in Item 402 of Regulation
S-K
under the Securities Act of 1933) of Coda Octopus as indicated in
its most
recent securities filing made before the date of the
transaction.
|
8
|
(e)
|
Termination
In the Event of Death or Disability.
|
|
(i)
|
If
the Executive’s employment terminates because of his death, any unvested
portion of any stock option and any restricted stock previously issued
to
the Executive by Coda Octopus shall become fully vested as of the
date of
his death and the Executive’s estate or other legal representatives shall
have 360 days from the Date of Termination or the remaining option
term,
if earlier, to exercise all stock options granted to the Executive.
In
addition, the Executive’s estate shall be entitled to receive a pro-rata
share of any performance bonus to which he otherwise would have been
entitled for the fiscal year in which his death occurs. For a period
of
one (1) year following the Date of Termination, Coda Octopus shall
pay
such health insurance premiums as may be necessary to allow Executive’s
spouse and dependents to receive health insurance coverage substantially
similar to coverage they received prior to the Date of Termination.
In
addition to the foregoing, any payments to which Executive’s spouse,
beneficiaries, or estate may be entitled under any employee benefit
plan
shall also be paid in accordance with the terms of such plan or
arrangement. Such payments, in the aggregate, shall fully discharge
Coda
Octopus’s obligations hereunder.
|
|
(ii)
|
In
the event the Executive’s employment terminates due to his Disability, as
defined in any long-term disability insurance policy or plan provided
to
him by Coda Octopus (“Disability Insurance”), he shall be entitled to
receive his Base Salary until such date as he shall commence receiving
disability benefits pursuant to any Disability Insurance. In addition,
as
of the effective date of the termination notice specified in Section
5(d),
the Executive shall vest in any unvested portion of any stock option
and
any restricted shares previously granted to him by Coda Octopus and
the
Executive shall have 360 days from the Date of Termination or the
remaining option term, if earlier, to exercise all stock options
granted
to the Executive. The Executive also shall be entitled to receive
a
pro-rata share of any performance bonus to which he otherwise would
have
been entitled for the fiscal year in which his employment terminates
due
to his Disability. For a period of one year following the Date of
Termination, Coda Octopus shall pay such health insurance premiums
as may
be necessary to allow Executive and Executive’s spouse and dependents to
receive health insurance coverage substantially similar to coverage
they
received prior to the Date of Termination.
|
|
7.
|
Confidentiality
|
|
(a)
|
Definition
of Proprietary Information.
The Executive acknowledges that he may be furnished or may otherwise
receive or have access to confidential information which relates
to Coda
Octopus’s past, present or future business activities, strategies,
services or products, research and development, specifically all
formulas,
processes, computer code, customer lists, computer user identifiers
and
passwords, and all purchasing, engineering, accounting, marketing
and
other information, proprietary to Coda Octopus and not generally
known,
relating to research, development, manufacture, marketing and sale
of Coda
Octopus products, as well as formulas, computer code, processes and
other
information received by Coda Octopus from third parties under an
obligation of secrecy.
|
9
|
All
such information, including any materials or documents containing
such
information, shall be considered by Coda Octopus and the Executive
as
proprietary and confidential (the “Proprietary
Information”).
|
|
(b)
|
Definition
of Inventions.
Invention(s) means all formulas, processes, discoveries, improvements,
ideas and works of authorship, whether patentable or copyrightable
or not,
which the Executive learns, has access to, has a part in developing,
first
conceives or first reduces to practice, alone or with others (1)
that are
developed on Coda Octopus time, or (2) that relate directly to Coda
Octopus’ business or actual or anticipated research, or (3) for which Coda
Octopus’ Proprietary Information or other Coda Octopus property is used,
or (4) that result from any of the Executive’s work for Coda
Octopus.
|
|
Executive's
Obligation With Regard to Inventions.
|
(A) All
Inventions that the Executive may learn, have access to, have a part in
developing, first conceive, or first reduce to practice (i) during employment
with Coda Octopus, whether or not during normal work time or at Coda Octopus’
premises, or (ii) at any time after employment termination if based on
Confidential Information, are and shall remain the sole property of Coda Octopus
in all countries, and shall be promptly disclosed to and are hereby assigned
to
Coda Octopus without charge to Coda Octopus. In the absence of clear and
convincing proof to the contrary, all formulas, processes, inventions, ideas,
and works of authorship conceived by the Executive within one year after
termination of employment with Coda Octopus that directly relate to Coda Octopus
business or demonstrably anticipated research or development will be considered
to be Inventions to be disclosed to and owned by Coda Octopus.
(B) The
Executive will acknowledge and deliver promptly without charge all documents
to
Coda Octopus, and to do such other acts as may be necessary in Coda Octopus’
opinion to obtain and maintain patents or copyrights and to vest the entire
right and title in Coda Octopus to such patents, copyrights and Inventions
in
all countries including, if required by Coda Octopus but not limited to,
completion and signing of the Assignment exhibited as Appendix B to this
Agreement. Failure on the part of Coda Octopus at any time to require the
Executive to sell, assign, transfer and set over the entire right, title and
interest in and to said Inventions shall not be deemed to be a waiver of its
rights thereto.
(C) The
obligations of this section shall not apply to any invention developed entirely
on the Executive's own time without the use of any Coda Octopus equipment,
supplies, facility or Proprietary Information and (i) which does not relate
to
Coda Octopus business, or to Coda Octopus’ actual or demonstrably anticipated
research or development or (ii) which does not result from any work performed
by
the Executive for Coda Octopus.
|
(c)
|
Exclusions.
Notwithstanding the foregoing, Proprietary Information shall not
include
information in the public domain not as a result of a breach of any
duty
by the Executive or any other
person.
|
10
|
(d)
|
Obligations.
Both during and after the Employment Period, the Executive will preserve
and protect the confidentiality of the Proprietary Information and
all
physical forms thereof, whether disclosed to him before this Agreement
and
Inventions signed or afterward (except as required by applicable
law or
otherwise as necessary in connection with the performance of the
Executive’s duties to Coda Octopus hereunder). In addition, the Executive
shall not (i) disclose or disseminate the Proprietary Information
to any
third party, including employees of Coda Octopus (or their affiliates)
without a legitimate business need to know; (ii) remove the Proprietary
Information from Coda Octopus’s premises without a valid business purpose;
or (iii) use the Proprietary Information for his own benefit or for
the
benefit of any third party.
|
|
(e)
|
Return
of Proprietary Information.
The Executive acknowledges that all the Proprietary Information and
Inventions used or generated during the course of working for Coda
Octopus
is the property of Coda Octopus. The Executive will deliver to Coda
Octopus all documents and other tangibles (including diskettes and
other
storage media) containing the Proprietary Information and Inventions
at
any time upon request by Coda Octopus during his employment and
immediately upon termination of his employment. If requested by Coda
Octopus, the Executive will enter into an Assignment of Intellectual
Property.
|
|
8.
|
Noncompetition
and Nonsolicitation
|
|
(a)
|
Restriction
on Competition.
Throughout the Employment Period and for a further period of twelve
(12)
months thereafter (the “Restricted Period”), provided, however, that the
Restricted Period shall only extend for six months following the
expiration or termination of the Executive’s employment if the Executive’s
employment is terminated following a Change in Control, the Executive
will
not engage, directly or indirectly, as an owner, director, trustee,
manager, member, employee, consultant, partner, principal, agent,
representative, stockholder, or in any other individual, corporate
or
representative capacity, in any of the following: (i) any subsea
visualization company, or (ii) any other business in which Coda Octopus
is
engaged or is actively planning to engage as of the date of the
Executive’s termination of employment. Notwithstanding the foregoing, the
Executive shall not be deemed to have violated this Section 8(a)
solely by
reason of his passive ownership of 1% or less of the outstanding
stock of
any publicly traded corporation or other
entity.
|
|
(b)
|
Non-Solicitation
of Clients.
During the Restricted Period, the Executive will not solicit, directly
or
indirectly, on his own behalf or on behalf of any other person(s),
any
client of Coda Octopus whom Coda Octopus had provided services at
any time
during the Executive’s employment with Coda Octopus in any line of
business that Coda Octopus conducts as of the date of the Executive’s
termination of employment or that Coda Octopus is actively soliciting,
for
the purpose of marketing or providing any service competitive with
any
service then offered by Coda
Octopus.
|
|
(c)
|
Non-Solicitation
of Employees.
During the Restricted Period, the Executive will not, directly or
indirectly, hire or attempt to hire or cause any business, other
than a
Qualified Affiliate, to hire any person who is then or was at any
time
during the preceding six months an employee of Coda Octopus and who
is at
the time of such hire or attempted hire, or was at the date of such
employee’s separation from Coda Octopus a vice president, senior vice
president or executive vice president or other senior executive employee
of Coda Octopus.
|
11
|
(d)
|
Acknowledgment.
The Executive acknowledges that he will acquire much Proprietary
Information concerning the past, present and future business of Coda
Octopus as the result of his employment, as well as access to the
relationships between Coda Octopus and Coda Octopus and their clients
and
employees. The Executive further acknowledges that the business of
Coda
Octopus is very competitive and that competition by him in that business
during his employment, or after his employment terminates, would
severely
injure Coda Octopus. The Executive understands that the restrictions
contained in this Section 8 are reasonable and are required for Coda
Octopus’s legitimate protection, and do not unduly limit his ability to
earn a livelihood.
|
|
(e)
|
Rights
and Remedies upon Breach.
The Executive acknowledges that any breach by him of any of the provisions
of Sections 7 and 8 (the “Restrictive Covenants”) would result in
irreparable injury and damage for which money damages would not provide
an
adequate remedy. Therefore, if the Executive breaches, or threatens
to
commit a breach of, any of the provisions of the Restrictive Covenants,
Coda Octopus shall have the following rights and remedies, each of
which
rights and remedies shall be independent of the other and severally
enforceable, and all of which rights and remedies shall be in addition
to,
and not in lieu of, any other rights and remedies available to Coda
Octopus under law or in equity (including, without limitation, the
recovery of damages):
|
|
(i)
|
The
right and remedy to have the Restrictive Covenants specifically enforced
(without posting bond and without the need to prove damages) by any
court
of competent jurisdiction, including, without limitation, the right
to an
entry against the Executive of restraining orders and injunctions
(preliminary, mandatory, temporary and permanent) against violations,
threatened or actual, and whether or not then continuing, of such
covenants; and
|
|
(ii)
|
The
right and remedy to require the Executive to account for and pay
over to
Coda Octopus and its affiliates all compensation, profits, monies,
accruals, increments or other benefits (collectively, “Benefits”) derived
or received by him as the result of any transactions constituting
a breach
of the Restrictive Covenants, and the Executive shall account for
and pay
over such Benefits to Coda Octopus and, if applicable, its affected
affiliates.
|
|
(f)
|
If
any court or other decision-maker of competent jurisdiction determines
that any of the Restrictive Covenants, or any part thereof, is
unenforceable because of the duration or geographical scope of such
provision, then, after such determination has become final and
non-appealable, the duration or scope of such provision, as the case
may
be, shall be reduced so that such provision becomes enforceable and,
in
its reduced form, such provision shall then be enforceable and shall
be
enforced.
|
|
9.
|
Executive
Representation
|
|
The
Executive represents and warrants to Coda Octopus that he is not
now under
any obligation of a contractual or other nature to any person, business
or
other entity which is inconsistent or in conflict with this Agreement
or
which would prevent him from performing his obligations under this
Agreement.
|
12
|
10.
|
Enforcement
and Indemnification
|
|
(a)
|
Coda
Octopus, in its sole discretion, may bring an action in any court
of
competent jurisdiction to seek injunctive relief and such other relief
as
Coda Octopus shall elect to enforce the Restrictive Covenants. If
the
courts of any one or more of such jurisdictions hold the Restrictive
Covenants wholly unenforceable by reason of breadth of scope or otherwise
it is the intention of Coda Octopus and the Executive that such
determination not bar or in any way affect Coda Octopus’s right, or the
right of any of its affiliates, to the relief provided in Section
8(e)
above in the courts of any other jurisdiction within the geographical
scope of such Restrictive Covenants, as to breaches of such Restrictive
Covenants in such other respective jurisdictions, such Restrictive
Covenants as they relate to each jurisdiction being, for this purpose,
severable, diverse and independent covenants, subject, where appropriate,
to the doctrine of res judicata. The parties hereby agree to waive
right
to a trial by jury for any and all disputes hereunder (whether or
not
relating to the Restrictive
Covenants).
|
|
(b)
|
In
accordance with Appendix C to this Agreement, Coda Octopus will indemnify
the Executive, to the maximum extent permitted by applicable law,
against
all costs, charges and expenses incurred or sustained by the Executive,
including the cost of legal counsel selected and retained by the
Executive
in connection with any action, suit or proceeding to which the Executive
may be made a party by reason of the Executive being or having been
an
officer, director, or employee of Coda Octopus or any subsidiary
or
affiliate of Coda Octopus. Coda Octopus will pay to the Executive
in
advance of the final disposition of any proceeding all such amounts
incurred or suffered.
|
|
11.
|
Miscellaneous
|
|
(a)
|
Litigation
and Regulatory Cooperation.
During and after Executive’s employment, Executive shall reasonably
cooperate with Coda Octopus in the defense or prosecution of any
claims or
actions now in existence or which may be brought in the future against
or
on behalf of Coda Octopus which relate to events or occurrences that
transpired while Executive was employed by Coda Octopus; provided,
however, that such cooperation shall not materially and adversely
affect
Executive or expose Executive to an increased probability of civil
or
criminal litigation. Executive’s cooperation in connection with such
claims or actions shall include, but not be limited to, being available
to
meet with counsel to prepare for discovery or trial and to act as
a
witness on behalf of Coda Octopus at mutually convenient times. During
and
after Executive’s employment, Executive also shall cooperate fully with
Coda Octopus in connection with any investigation or review of any
federal, state or local regulatory authority as any such investigation
or
review relates to events or occurrences that transpired while Executive
was employed by Coda Octopus. Coda Octopus shall also provide Executive
with compensation on an hourly basis (to be derived from the sum
of his
Base Salary and average annual incentive compensation) for requested
litigation and regulatory cooperation that occurs after his termination
of
employment, and reimburse Executive for all costs and expenses incurred
in
connection with his performance under this Section 11(a), including,
but
not limited to, reasonable attorneys’ fees and
costs.
|
|
(b)
|
Notices.
All notices required or permitted under this Agreement shall be in
writing
and shall be deemed effective (i) upon personal delivery, (ii) upon
deposit with the United States Postal Service, by registered or certified
mail, postage prepaid, or (iii) in the case of facsimile transmission
or
delivery by nationally recognized overnight delivery service, when
received, addressed as follows:
|
13
|
(i)
|
If
to Coda Octopus, to:
|
000
Xxxx Xxxxxx
Xxx
Xxxx, Xxx Xxxx 00000
|
(ii)
|
If
to the Executive, to:
|
0000
Xxxxxx Xxxx Xxxx
Xxxxxxxxx,
XX 00000
or
to
such other address or addresses as either party shall designate to the other
in
writing from time to time by like notice.
|
(c)
|
Pronouns.
Whenever the context may require, any pronouns used in this Agreement
shall include the corresponding masculine, feminine or neuter forms,
and
the singular forms of nouns and pronouns shall include the plural,
and
vice versa.
|
|
(d)
|
Entire
Agreement.
This Agreement constitutes the entire agreement between the parties
and
supersedes all prior agreements and understandings, whether written
or
oral, relating to the subject matter of this
Agreement.
|
|
(e)
|
Amendment.
This Agreement may be amended or modified only by a written instrument
executed by both Coda Octopus and the
Executive.
|
|
(f)
|
Governing
Law.
This Agreement shall be construed, interpreted and enforced in accordance
with the laws of the State of New York, without regard to its conflicts
of
laws principles.
|
|
(g)
|
Successors
and Assigns.
This Agreement shall be binding upon and inure to the benefit of
both
parties and their respective successors and assigns, including any
entity
with which or into which Coda Octopus may be merged or which may
succeed
to its assets or business or any entity to which Coda Octopus may
assign
its rights and obligations under this Agreement; provided, however,
that
the obligations of the Executive are personal and shall not be assigned
or
delegated by him.
|
|
(h)
|
Waiver.
No delays or omission by Coda Octopus or the Executive in exercising
any
right under this Agreement shall operate as a waiver of that or any
other
right. A waiver or consent given by Coda Octopus or the Executive
on any
one occasion shall be effective only in that instance and shall not
be
construed as a bar or waiver of any right on any other
occasion.
|
|
(i)
|
Captions.
The captions appearing in this Agreement are for convenience of reference
only and in no way define, limit or affect the scope or substance
of any
section of this Agreement.
|
14
|
(j)
|
Severability.
In case any provision of this Agreement shall be held by a court
or
arbitrator with jurisdiction over the parties to this Agreement to
be
invalid, illegal or otherwise unenforceable, such provision shall
be
restated to reflect as nearly as possible the original intentions
of the
parties in accordance with applicable law, and the validity, legality
and
enforceability of the remaining provisions shall in no way be affected
or
impaired thereby.
|
|
(k)
|
Counterparts.
This Agreement may be executed in two or more counterparts, each
of which
shall be deemed an original but all of which together shall constitute
one
and the same instrument.
|
IN
WITNESS WHEREOF,
the
Parties have executed this Agreement as of the day and year first above
written.
By:
Name:
Xxxxx Xxxx
Title:
President and Chief Executive Officer
EXECUTIVE
Name:
Xxxxx Xxxxx
15
APPENDIX
A
Description
of Duties
The
main focus of this role is overseeing the Group’s Government Liaison, involving:
|
·
|
Opening
and overseeing an office for the company based in Washington, DC,
including the employment of any staff at that
location
|
|
·
|
Coordinating
and spearheading all governmental interactions, including national
government, state government, local government and federal
agencies
|
|
·
|
Helping
the Group to capitalize on legislation, both upcoming and existing,
to
increase sales
|
|
·
|
Managing
our relationship with lobbyists, including
PMA
|
|
·
|
Project
responsibility on an agreed basis
|
|
·
|
Operating
as part of the Group’s management team and as an officer of the
Group
|
00
XXXXXXXX
X
ASSIGNMENT
WHEREAS,
__________________________________________,
hereinafter called "Assignor", residing at
________________________________________________________, has certain new and
useful formulas, processes, discoveries, improvements, ideas and works of
authorship (“Inventions”) disclosed in an application for United States and
other Letters Patent
entitled_________________________________________________________________________________________________________,
and executed by __________________________________________________ on date
herewith;
AND
WHEREAS
Coda
Octopus Group, Inc., located at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx and or
a
subsidiary thereof, together with any successors, legal representatives or
assigns thereof, called "Assignee" wants to acquire the entire right, title
and
interest in and to said Inventions and application.
NOW,
THEREFORE,
in
consideration of the entering into an Employment Contract with Assignee dated
_____________, 2006 and other good and valuable consideration, the receipt
of
which is hereby acknowledged, the Assignor has sold, assigned, transferred
and
set over, and does hereby sell, assign, transfer and set over to Assignee the
entire right, title and interest in and to said Inventions, and said application
and all divisions and continuations thereof, and all United States Letters
Patents which may be granted thereon and all reissues, reexaminations and
extensions thereof, and all priority rights under all available International
Agreements, Treaties and Conventions for the protection of Intellectual property
in its various forms in every participating country, and all applications for
patents (including related rights such as utility-model registrations,
inventor's certificates, and the like) heretofore or hereafter filed for said
Inventions in any foreign countries, and all patents (including all
continuations, divisions, extensions, renewals, substitutes, and reissues
thereof) granted for said Inventions in any foreign countries; and the Assignor
hereby authorizes and requests the United States Commissioner of Patents and
Trademarks, and any officials of foreign countries whose duty it is to issue
patents on applications as aforesaid, to Issue all patents for said Inventions
to Assignee in accordance with the terms of this Assignment;
AND
THE
ASSIGNOR HEREBY
covenants that he has full right to convey the entire Interest herein assigned,
and that he has not executed, and will not execute, any agreement in conflict
herewith;
AND
THE
ASSIGNOR HEREBY
further
covenants and agrees that he will communicate to Assignee any facts known to
him
respecting said Inventions, and testify in any legal proceeding, sign all lawful
papers, execute all divisional, continuation, substitute and reissue
applications, make all rightful oaths and generally do everything possible
to
aid Assignee to obtain and enforce proper patent protection for said Inventions
in all countries.
17
In
testimony whereof, I hereunto set my hand this ____ day of _______________
20____
SIGNATURE
OF ASSIGNOR
STATE
OF
________________________________________
COUNTY
OF
______________________________________
On
_____________________ before me _________________________ Notary Public,
personally appeared _______________________________ personally known to me
(or
proved to me on the basis of satisfactory evidence) to be the person whose
name
is subscribed to the within instrument and acknowledged to me that he executed
the same in his authorized capacity, and that by his signature on the instrument
the person, or the entity upon behalf of which the person acted, executed the
Instrument.
WITNESS
my hand and official seal.
_______________________________
Signature
of Notary
18
APPENDIX
C
INDEMNITY
AGREEMENT
This
Agreement is made as of the 1st
day of
May 2006, by and between CODA OCTOPUS GROUP, INC., a Delaware corporation (the
“Corporation”), and (the “Indemnitee”), a Director and/or Officer of the
Corporation (collectively the "Parties").
WHEREAS,
it is
essential to the Corporation to retain and attract as Directors and Officers
the
most capable persons available, and
WHEREAS,
the
substantial increase in corporate litigation subjects Directors and Officers
to
expensive litigation risks at the same time that the availability of Directors’
and Officers’ liability insurance has been severely limited, and
WHEREAS,
it is
now and has always been the express policy of the Corporation to indemnify
its
Directors and Officers so as to provide them with the maximum possible
protection permitted by law, and
WHEREAS,
the
Corporation does not regard the protection available to Indemnitee as adequate
in the present circumstances, and realizes that Indemnitee may not be willing
to
serve as a Director and/or Officer without adequate protection, and the
Corporation desires Indemnitee to serve in such capacity;
NOW,
THEREFORE,
in
consideration of Indemnitee’s service as a Director and/or Officer after the
date hereof, the Parties agree as follows:
|
1.
|
Definitions.
As used in this Agreement:
|
|
(a)
|
The
term “Proceeding” shall include any threatened, pending or completed
action, suit or proceeding, whether brought by or in the right of
the
Corporation or otherwise and whether of a civil, criminal, administrative
or investigative nature.
|
|
(b)
|
The
term “Expenses” shall include, but is not limited to, expenses of
investigations, judicial or administrative proceedings or appeals,
damages, judgments, fines, amounts paid in settlement by or on behalf
of
Indemnitee, attorneys’ fees and disbursements and any expenses of
establishing a right to indemnification under this
Agreement.
|
|
(c)
|
The
terms “Director” and “Officer” shall include Indemnitee’s service at the
request of the Corporation as a director, officer, employee or agent
of
another corporation, partnership, joint venture, trust or other enterprise
as well as a Director and/or Officer of the Corporation.
|
|
2.
|
Indemnity
of Director or Officer.
Subject only to the limitations set forth in Section 3, Corporation
will
pay on behalf of the Indemnitee all Expenses actually and reasonably
incurred by Indemnitee because of any claim or claims made against
him in
a Proceeding by reason of the fact that he is or was a Director and/or
Officer.
|
|
3.
|
Limitations
on Indemnity.
Corporation shall not be obligated under this Agreement to make any
payment of Expenses to the
Indemnitee,
|
19
| (a) |
which
payment it is prohibited by applicable law from paying as
indemnity;
|
|
(b)
|
for
which payment is actually made to the Indemnitee under an insurance
policy, except in respect of any excess beyond the amount of payment
under
such insurance;
|
|
(c)
|
for
which payment the Indemnitee is indemnified by Corporation otherwise
than
pursuant to this Agreement;
|
|
(d)
|
resulting
from a claim decided in a Proceeding adversely to the Indemnitee
based
upon or attributable to the Indemnitee gaining in fact any personal
profit
or advantage to which he was not legally
entitled;
|
|
(e)
|
resulting
from a claim decided in a Proceeding adversely to the Indemnitee
for an
accounting of profits made from the purchase or sale by the Indemnitee
of
securities of Corporation within the meaning of Section 16(b) of
the
Securities Exchange Act of 1934 and amendments thereto or similar
provisions of any state statutory law or common law;
or
|
|
(f)
|
brought
about or contributed to by the dishonesty of the Indemnitee seeking
payment hereunder; however, notwithstanding the foregoing, the Indemnitee
shall be indemnified under this Agreement as to any claims upon which
suit
may be brought against him by reason of any alleged dishonesty on
his
part, unless it shall be decided in a Proceeding that he committed
(i)
acts of active and deliberate dishonesty, (ii) with actual dishonest
purpose and intent, and (iii) which acts were material to the cause
of
action so adjudicated.
|
|
For
purposes of Sections 3 and 4, the phrase “decided in a Proceeding” shall
mean a decision by a court, arbitrator(s), hearing officer or other
judicial agent having the requisite legal authority to make such
a
decision, which decision has become final and from which no appeal
or
other review proceeding is
permissible.
|
|
4.
|
Advance
Payment of Costs.
Expenses incurred by Indemnitee in defending a claim against him
in a
Proceeding shall be paid by the Corporation as incurred and in advance
of
the final disposition of such Proceeding; provided, however, that
Expenses
of defense need not be paid as incurred and in advance where the
judicial
agent of first impression has decided the Indemnitee is not entitled
to be
indemnified pursuant to this Agreement or otherwise. Indemnitee hereby
agrees and undertakes to repay such amounts advanced if it shall
be
decided in a Proceeding that he is not entitled to be indemnified
by the
Corporation pursuant to this Agreement or
otherwise.
|
|
5.
|
Enforcement.
If a claim under this Agreement is not paid by Corporation, or on
its
behalf, within thirty days after a written claim has been received
by
Corporation, the Indemnitee may at any time thereafter bring suit
against
Corporation to recover the unpaid amount of the claim and if successful
in
whole or in part, the Indemnitee shall also be entitled to be paid
the
Expenses of prosecuting such claim.
|
|
6.
|
Subrogation.
In the event of payment under this Agreement, Corporation shall be
subrogated to the extent of such payment to all of the rights of
recovery
of the Indemnitee, who shall execute all papers required and shall
do
everything that may be necessary to secure such rights, including
the
execution of such documents necessary to enable Corporation effectively
to
bring suit to enforce such rights.
|
|
7.
|
Notice.
The Indemnitee, as a condition precedent to his right to be indemnified
under this Agreement, shall give to Corporation notice in writing
as soon
as practicable of any claim made against him for which indemnity
will or
could be sought under this Agreement. Notice to Corporation shall
be given
at its principal office and shall be directed to the Corporate Secretary
(or such other address as Corporation shall designate in writing
to the
Indemnitee); notice shall be deemed received if sent by prepaid mail
properly addressed, the date of such notice being the date postmarked.
In
addition, the Indemnitee shall give Corporation such information
and
cooperation as it may reasonably
require.
|
|
8.
|
Saving
Clause.
If this Agreement or any portion thereof shall be invalidated on
any
ground by any court of competent jurisdiction, the Corporation shall
nevertheless indemnify Indemnitee to the full extent permitted by
any
applicable portion of this Agreement that shall not have been invalidated
or by any other applicable law.
|
|
9.
|
Indemnification
Hereunder Not Exclusive.
Nothing herein shall be deemed to diminish or otherwise restrict
the
Indemnitee’s right to indemnification under any provision of the
Certificate of Incorporation or Bylaws of the Corporation or under
Delaware law.
|
|
10.
|
Applicable
Law.
This Agreement shall be governed by and construed in accordance with
internal laws of the State of
Delaware.
|
|
11.
|
Counterparts.
This Agreement may be executed in any number of counterparts, each
of
which shall constitute the
original.
|
|
12.
|
Successors
and Assigns.
This Agreement shall be binding upon the Corporation and its successors
and assigns.
|
|
13.
|
Continuation
of Indemnification.
The indemnification under this Agreement shall continue as to Indemnitee
even though he may have ceased to be a Director and/or Officer and
shall
inure to the benefit of the heirs and personal representatives of
Indemnitee.
|
|
14.
|
Coverage
of Indemnification.
The indemnification under this Agreement shall cover Indemnitee’s service
as a Director and/or Officer prior to or after the date of the
Agreement.
|
IN
WITNESS WHEREOF,
the
Parties have caused this Agreement to be duly executed and signed as of the
day
and year first above written.
| CODA OCTOPUS GROUP, INC. | INDEMNITEE |
By:  |
|
| Name: Xxxxx Xxxx | |
| Position: President and CEO | Name: Xxxxx Xxxxx |
20
