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EXHIBIT 10.1
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is entered into by and
among XXXXXX X. XXXXXXXX, an individual residing in the State of Florida (the
"President"); ENTER TECH CORPORATION, a publicly held Nevada corporation (the
"Company"); and, WAVEPOWER, INC. a Florida corporation (the "Consolidated
Subsidiary", the Consolidated Subsidiary, the President and the Company being
collectively referred to as the "Parties" and generically as a "Party").
PREAMBLE:
WHEREAS, the Company, as the Consolidated Subsidiary's 80% stockholder,
and the Consolidated Subsidiary's Board of Directors are of the opinion that in
conjunction with effectuation of the Consolidated Subsidiary's future plans, the
Consolidated Subsidiary must obtain the services of a qualified chief operating
officer; and
WHEREAS, the President has a broad administrative and financial
background, and has, prior to the acquisition of the Consolidated Subsidiary by
the Company, served as the president of the Consolidated Subsidiary and is
thoroughly knowledgeable with all aspects of its operations; and
WHEREAS, the President is agreeable to serving as the President and
chief operating officer, on the terms and conditions hereinafter set forth:
NOW, THEREFORE, in consideration of the mutual promises, covenants and
agreements hereby exchanged, as well as of the sum of Ten ($10.00) Dollars and
other good and valuable consideration, the receipt and adequacy of which is
hereby acknowledged, the Parties, intending to be legally bound, hereby agree as
follows:
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WITNESSETH:
ARTICLE ONE
TERM, RENEWALS, EARLIER TERMINATION
1.1 TERM.
This Agreement shall be for an initial term of three years, commencing
on the 30th day of April, 2000. Notwithstanding the foregoing but subject to
continuation of the President's rights to compensation under Article Three
hereof, this Agreement is subject to termination by the Chairman of the
Company's Board of Directors (the "Chairman") at any time at least 66.6% of the
Board of Directors of the Company carry a vote of no confidence in the
President.
1.2 RENEWALS.
This Agreement shall be renewed automatically, after expiration of the
original term, on a continuing annual basis, unless the Party wishing not to
renew this Agreement provides the other Party with written notice of its
election not to renew ("Termination Election Notice") on or before 90 days prior
to termination of the then current term.
1.3 EARLIER TERMINATION.
The Consolidated Subsidiary shall have the right to terminate this
Agreement prior to the expiration of its Term, or of any renewals thereof,
subject to the provisions of Section 1.4:
(a) For Cause: The Consolidated Subsidiary may terminate the President's
employment under this Agreement at any time for cause. Such termination
shall be evidenced by written notice thereof to the President, which
notice shall specify the cause for termination. For purposes hereof,
the term "cause" shall mean the inability, refusal or failure of the
President to perform his duties under this Agreement for a period in
excess of 90 days, the refusal of the President to follow the
directions of the Company's Chairman; dishonesty, theft, or conviction
of a crime.
(b) Discontinuance of Business: In the event that the Consolidated
Subsidiary discontinues operating its business, this Agreement shall
terminate as of the last day of the month on which the Consolidated
Subsidiary ceases operation with the same force and effect as if such
last day of the month were originally set as the termination date
hereof.
(c) Death: This Agreement shall terminate immediately on the death of the
President.
1.4 FINAL SETTLEMENT.
Upon termination of this Agreement and payment to the President of all
amounts due him hereunder, the President or his representative shall execute and
deliver to the Consolidated Subsidiary on a form prepared by the Consolidated
Subsidiary a receipt for such sums and a release of all claims, except such
claims as may have been submitted pursuant to the terms of this Agreement and
which remain unpaid, and, shall forthwith tender to the Consolidated Subsidiary
all records, manuals and written procedures, as may be desired by the
Consolidated Subsidiary for the continued conduct of its business.
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ARTICLE TWO
SCOPE OF EMPLOYMENT
2.1 RETENTION
The Consolidated Subsidiary hereby hires the President and the
President hereby accepts such employment, in accordance with the terms,
provisions and conditions of this Agreement.
2.2 GENERAL DESCRIPTION OF DUTIES.
The President shall perform the duties generally associated with the
position of chief executive officer of the Consolidated Subsidiary and such
other duties as are, from time to time, delegated to him by the Company's
Chairman. In amplification of the foregoing, the President shall be responsible
for the following matters:
(a) Assisting the Company's vice president with compliance by the Company
with its reporting and disclosure obligations pertaining to the
Consolidated Subsidiary and its officers and directors to the
Securities and Exchange Commission and to state and provincial
securities regulatory authorities;
(b) Compliance by the Consolidated Subsidiary and its subsidiaries with all
of their tax reporting obligations;
(c) Compliance by the Consolidated Subsidiary and its subsidiaries with all
of their obligations under the laws of the provinces, states and
countries in which they are incorporated or doing business;
(d) Analysis of financial data concerning the Consolidated Subsidiary's
performance, as well as financial data concerning potential
Consolidated Subsidiary acquisitions;
(e) Preparation and implementation of strategic plans for the Consolidated
Subsidiary, subject to parameters established by the Company's chief
executive officer; and
(f) Supervision of the Consolidated Subsidiary's operations and personnel
and integration of the Consolidated Subsidiary's legal, accounting and
administrative affairs with those of the Company in a manner reducing
duplication related costs and expenses.
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2.3 STATUS.
Throughout the term of this Agreement, the President shall serve as the
Consolidated Subsidiary's president and chief executive officer. In the event
that he is not elected to such position, then, at the option of the President,
this Agreement will be deemed terminated, effective as of the earliest time that
it can be reasonably determined that such election will not take place.
2.4 EXCLUSIVITY.
The President shall, unless specifically otherwise authorized by the
Company's Chairman, on a case by case basis, devote his business time
exclusively to the affairs of the Consolidated Subsidiary.
ARTICLE THREE
COMPENSATION
3.1 COMPENSATION.
As consideration for the President's future services to the
Consolidated Subsidiary and for his entry into this Agreement, the Consolidated
Subsidiary hereby grants the President the following compensation:
(a) Options to purchase 3,000,000 shares of the Company's Series A
preferred stock at an exercise price of par value per share, each share
of which shall carry five votes per share and which shall be
convertible to one share of common stock per share of preferred stock,
subject to standard anti-dilutive provisions, and exercisable as
follows:
(1) 1,000,000 shares may be exercised during the 12th through 13th
months following the date of this Agreement;
(2) 1,000,000 shares may be exercised during the 24th through 25th
months following the date of this Agreement; and
(3) 1,000,000 shares may be exercised during the 35th through 36th
months following the date of this Agreement.
The above described options shall vest only in proportion to the
relative success achieved by the Executive in meeting the objectives of
the Business Plan he has proposed to and which has been approved by the
Company, as follows: If the Executive achieves 100% or more of the
profit projections contained in the Business Plan, the options
otherwise vesting during such period of time fully vest. However if the
Executive achieves less than
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100% of the profit projections in the Business Plan but greater than
75% thereof in any particular time period, then 50% of the options
which would otherwise be exercisable during such period may be
exercised and the balance thereof would lapse. If the Executive
achieves greater than or equal to 50% of said profit projections but
less than 75% then only 25% of said options shall vest and the balance
would lapse. If the Executive achieves less than 50% of said profit
projections then none of the options for that profit period shall
vest. Notwithstanding the foregoing, the Executive shall be entitled
to 100% of the above options regardless of any success ratio in the
event the Company fails to timely and adequately provide capital
funding to the Subsidiary.
(b) An annual bonus payable in shares of the Company's common stock,
determined by dividing 3 % of the Consolidated Subsidiary's pre-tax
profits for the subject calendar year by the average bid price for the
Company's common stock at during the last five trading days prior to
the end of the last day of each year and the initial five days of the
new year, provided, however, that this Agreement shall have been in
effect for at least one half of the subject year.
(c) An annual cash bonus equal to 3% of the Consolidated Subsidiary's
pre-tax profits for the subject calendar year, provided, however, that
this Agreement shall have been in effect for at least one half of the
subject year.
(d) A salary of $104,000 per year, payable in arrears in accordance with
the Company's payroll procedures, but subject to review on an annual
basis, with the expectation of the Parties that it will be increased as
increased profits and cash flow from operations permit but never
decreased below $104,000 per year. Notwithstanding the foregoing, such
salary shall be $5,000 per month prior to June 1, 2000.
3.2 EXEMPTION FROM REGISTRATION
(a) The President hereby represents, warrants, covenants and acknowledges
that:
(1) The stock being issued as compensation under Section 3. 1 (a)
of this Agreement (the "Stock") will be issued without
registration under the provisions of Section 5 of the
Securities Act of 1933, as amended (the "Act") or the
securities regulatory laws and regulations of the State of
Nevada (the "Nevada Securities Act") pursuant to exemptions
provided pursuant to Section 4(2) of the Act and comparable
provisions of the Nevada Securities Act;
(2) The President shall be responsible, at the Consolidated
Subsidiary's expense, for preparing and filing any reports
concerning this transaction with the Florida Securities
Commission, and payment of any required filing fee;
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(3) All of the Stock will bear legends restricting its transfer,
sale, conveyance or hypothecation unless such Stock is either
registered under the provisions of Section 5 of the Act and
under the Nevada Securities Act, or an opinion of legal
counsel, in form and substance satisfactory to legal counsel
to the Company is provided by the President to the effect that
such registration is not required as a result of applicable
exemptions therefrom;
(4) The Company's transfer agent shall be instructed not to
transfer any of the Stock unless the Company advises it that
such transfer is in compliance with all applicable laws;
(5) The President is acquiring the Stock for his own account, for
investment purposes only, and not with a view to further sale
or distribution; and
(6) The President or his advisors have examined the Company's
latest reports to the Securities and Exchange Commission on
Forms 10-KSB, IO-QSB and 8-K (collectively and generically
hereinafter referred to as "34 Act Reports"), have been
provided with access to all of the Company's books and records
and have questioned the Company's officers and directors as to
such matters involving the Company as the President deemed
appropriate.
(b) Notwithstanding the provisions of Section 3.2(a), the shares reserved
for exercise of the options described in Section 3.1(b) shall, to the
extent legally allowable based on the Company's ability to meet
applicable legal requirements, be listed with any stock exchange or
securities market on which the Company's common stock is admitted to
trading.
3.3 BENEFITS
The President shall be entitled to a benefit package equal to the most
favorable benefit package provided by the Company or its subsidiaries to any of
its employees, officers, directors, consultants or agents, other than the
Company's Chairman.
3.4 INDEMNIFICATION
The Consolidated Subsidiary will defend, indemnify and hold the
President harmless from liabilities, suits, judgments, fines, penalties or
disabilities, including expenses associated directly, therewith (e.g. legal
fees, court costs, investigative costs, witness fees, etc.) resulting from any
reasonable actions in good faith on behalf of the Consolidated Subsidiary, to
the fullest extent legally permitted, and in conjunction therewith, shall assure
that all required expenditures are made by the Consolidated Subsidiary in a
manner making it unnecessary for the President to incur any out of pocket
expenses; provided, however, that the President permits the Consolidated
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Subsidiary to select and super-vise all personnel involved in such defense and
that the President waive any conflicts of interest that such personnel may have
as a result of also representing the Consolidated Subsidiary or other
Consolidated Subsidiary personnel and agrees to hold them harmless from any
matters involving such representation, except such as involve fraud or bad
faith.
ARTICLE FOUR
SPECIAL COVENANTS
4.1 CONFIDENTIALITY.
The President acknowledges that, in and as a result of his employment
hereunder, he will be developing for the Consolidated Subsidiary, making use of,
acquiring and/or adding to, confidential information of special and unique
nature and value relating to such matters as the Consolidated Subsidiary's trade
secrets, systems, procedures, manuals, confidential reports and lists of clients
and lenders; consequently, as material inducement to the entry into this
Agreement by the Consolidated Subsidiary, the President hereby covenants and
agrees that he shall not, at anytime during or following the terms of his
employment hereunder, directly or indirectly, personally use, divulge or
disclose, for any purpose whatsoever, any of such confidential information which
has been obtained by or disclosed to him as a result of his employment by the
Consolidated Subsidiary, or the Consolidated Subsidiary's affiliates. In the
event of a breach or threatened breach by the President of any of the provisions
of this Section 4. 1, the Consolidated Subsidiary, in addition to and not in
limitation of any other rights, remedies or damages available to the
Consolidated Subsidiary, whether at law or in equity, shall be entitled to a
permanent injunction in order to prevent or to restrain any such breach by the
President, or by the President's partners, agents, representatives, servants,
employers, employees, affiliates and/or any and all persons directly or
indirectly acting for or with him.
4.2 SPECIAL REMEDIES.
In view of the irreparable harm and damage which would undoubtedly
occur to the Consolidated Subsidiary as a result of a breach by the President of
the covenants or agreements contained in this Article Four, and in view of the
lack of an adequate remedy at law to protect the Consolidated Subsidiary's
interests, the President hereby covenants and agrees that the Consolidated
Subsidiary shall have the following additional rights and remedies in the event
of a breach hereof:
(a) The President hereby consents to the issuance of a permanent injunction
enjoining him from any violations of the covenants set forth in Section
4.1 hereof; and
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(b) Because it is impossible to ascertain or estimate the entire or exact
cost, damage or injury which the Consolidated Subsidiary may sustain
prior to the effective enforcement of such injunction, the President
hereby covenants and agrees to pay over to the Consolidated Subsidiary,
in the event he violates the covenants and agreements contained in
Section 4.2 hereof, the greater of:
(i) Any payment or compensation of any kind received by him
because of such violation before the issuance of such
injunction, or
(ii) The sum of One Hundred Thousand ($100,000.00) Dollars per
violation, which sum shall be liquidated damages, and not a
penalty, for the injuries suffered by the Consolidated
Subsidiary as a result of such violation, the Parties hereto
agreeing that such liquidated damages are not intended as the
exclusive remedy available to the Consolidated Subsidiary for
any breach of the covenants and agreements contained in this
Article Four, prior to the issuance of such injunction, the
Parties recognizing that the only adequate remedy to protect
the Consolidated Subsidiary from the injury caused by such
breaches would be injunctive relief.
4.3 CUMULATIVE REMEDIES.
The President hereby irrevocably agrees that the remedies described in
Section 4.3 hereof shall be in addition to, and not in limitation of, any of the
rights or remedies to which the Consolidated Subsidiary is or may be entitled
to, whether at law or in equity, under or pursuant to this Agreement.
4.4 ACKNOWLEDGMENT OF REASONABLENESS.
The President hereby represents, warrants and acknowledges that he has
carefully read and considered the provisions of this Article Four and, having
done so, agrees that the restrictions set forth herein are fair and reasonable
and are reasonably required for the protection of the interests of the
Consolidated Subsidiary, its officers, directors and other employees;
consequently, in the event that any of the above-described restrictions shall be
held unenforceable by any court of competent jurisdiction, the President hereby
covenants, agrees and directs such court to substitute a reasonable judicially
enforceable limitation in place of any limitation deemed unenforceable and, the
President hereby covenants and agrees that if so modified, the covenants
contained in this Article Four shall be as fully enforceable as if they had been
set forth herein directly by the Parties. In determining the nature of this
limitation, the President hereby acknowledges, covenants and agrees that it is
the intent of the Parties that a court adjudicating a dispute arising hereunder
recognize that the Parties desire that this covenant not to compete be imposed
and maintained to the greatest extent possible.
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4.5 UNAUTHORIZED ACTS.
The President hereby covenants and agrees that he will not do any act
or incur any obligation on behalf of the Consolidated Subsidiary of any kind
whatsoever, except as authorized by the Company.
4.6 NON-COMPETITION
The Executive agrees that he shall not compete directly or indirectly
with the Company for a period of three years following termination of his
employment. For this purpose competition shall include developing or exploiting
any technology which competes directly or indirectly with technology developed
by or under active development by the Subsidiary during the Executive's tenure
at the Subsidiary.
4.7 TECHNOLOGY OWNERSHIP
The Executive hereby transfers, sets over and assigns unto the
Subsidiary the technology and intellectual property previously developed by him
and more fully described in the Reorganization Agreement between the Subsidiary,
Xxxxxx X. Xxxxxxxx and the Corporation. The Executive further agrees that all
technology and intellectual property developed or acquired by him during the
term of his employment with the Subsidiary shall be owned by the Subsidiary
without further consideration, and he will execute and deliver such instruments
and documents without further consideration as may be necessary to convey title
to such technology to the Corporation.
4.8 QUALIFICATION.
The provisions of this Article Four shall not apply in the event that
the reorganization agreement pursuant to which the Corporation acquired the
Consolidated Subsidiary is rescinded, except as to confidential information
pertaining to the Corporation and its other subsidiaries.
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ARTICLE.FIVE
MISCELLANEOUS
5.1 NOTICES.
All notices, demands or other communications hereunder shall be in
writing, and unless otherwise provided, shall be deemed to have been duly given
on the first business day after mailing by registered or certified mail, return
receipt requested, postage prepaid, addressed as follows:
TO THE PRESIDENT:
Xxxxxx X .Xxxxxxxx
00 X. X. 0xx Xxxxxx
Xxxxxx Xxxxx, Xx. 00000
TO THE CONSOLIDATED SUBSIDIARY:
Xxxxxx X. Xxxxxxxx, President
WAVEPOWER, INC.
00 X. X. 0xx Xxxxxx
Xxxxxx Xxxxx, Xx. 00000
Copy to:
Xxx Xxxxxxx, President
ENTER TECH CORPORATION
000 X. 0xx Xxxxxx
Xxxxxxxx, XX. 00000
TO THE COMPANY
Xxx Xxxxxxx, President
ENTER TECH CORPORATION
000 X. 0xx Xxxxxx
Xxxxxxxx, XX. 00000
or to such other address or to such other person as any party shall designate to
the other for such purpose in the manner hereinafter set forth. The Parties
acknowledge that Xxx X. Xxxxxx, Xx., Esq., who serves as legal counsel to Xxxxxx
X. Xxxxxxxx, has acted as xxxxxxxx for the Parties in this transaction and that
because of the inherent conflict of interests involved, it has advised the
Company to retain independent counsel to review this Agreement on its behalf.
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5.2 AMENDMENT.
NO modification, waiver, amendment, discharge or change of this
Agreement shall be valid unless the same is in writing and signed by the Party
against which the enforcement of said modification, waiver, amendment, discharge
or change is sought.
5.3 MERGER.
This instrument contains all of the understandings and agreements of
the Parties with respect to the subject matter discussed herein. All prior
agreements whether written or oral, are merged herein and shall be of no force
or effect.
5.4 SURVIVAL.
The several representations, warranties and covenants of the Parties
contained herein shall survive the execution hereof and shall be effective
regardless of any investigation that may have been made or may be made by or on
behalf of any Party.
5.5 SEVERABILITY.
If any provision or any portion of any provision of this Agreement, or
the application of such provision or any portion thereof to any person or
circumstance shall be held invalid or unenforceable, the remaining portions of
such provision and the remaining provisions of this Agreement or the application
of such provision or portion of such provision as is held invalid or
unenforceable to persons or circumstances other than those to which it is held
invalid or unenforceable, shall not be effected thereby.
5.6 GOVERNING LAW AND VENUE.
This Agreement shall be construed in accordance with the laws of the
State of Florida and any proceeding arising between the Parties in any matter
pertaining or related to this Agreement shall, to the extent permitted by law,
be held in a forum selected by the Company within the State of Florida
5.7 LITIGATION.
In any action between the Parties to enforce any of the terms of this
Agreement or any other matter arising from this Agreement, the prevailing Party
shall be entitled to recover its costs and expenses, including reasonable
attorneys' fees up to and including all negotiations, trials and appeals,
whether or not litigation is initiated.
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5.8 BENEFIT OF AGREEMENT.
This Agreement may not be assigned by either Party without the prior
written consent of the other. Subject to the restrictions on transferability and
assignment contained herein, the terms and provisions of this Agreement shall be
binding upon and inure to the benefit of the Parties, their successors, assigns,
personal representative, estate, heirs and legatees.
5.9 CAPTIONS.
The captions in this Agreement are for convenience and reference only
and in no way define, describe, extend or limit the scope of this Agreement or
the intent of any provisions hereof.
5.1 0 NUMBER AND GENDER.
All pronouns and any variations thereof shall be deemed to refer to the
masculine, feminine, neuter, singular or plural, as the identity of the Party or
Parties, or their personal representatives, successors and assigns may require.
5.11 FURTHER ASSURANCES.
The Parties hereby agree to do, execute, acknowledge and deliver or
cause to be done, executed or acknowledged or delivered and to perform all such
acts and deliver all such deeds, assignments, transfers, conveyances, powers of
attorney, assurances, recipes, records and other documents, as may, from time to
time, be required herein to effect the intent and purposes of this Agreement.
5.12 STATUS.
Nothing in this Agreement shall be construed or shall constitute a
partnership, joint venture, agency, or lessor-lessee relationship; but, rather,
the relationship established hereby is that of employer-employee.
5.13 COUNTERPARTS.
This Agreement may be executed in any number of counterparts. All
executed counterparts shall constitute one Agreement notwithstanding that all
signatories are not signatories to the original or the same counterpart.
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5.14 LICENSE.
This Agreement is the property of Xxx X. Xxxxxx, Xx., Esq. The use
hereof by the Parties is authorized hereby solely for purposes of this
transaction and, the use of this form of agreement or of any derivation thereof
without Xxx X. Xxxxxx, Xx., Esq.'s prior written permission is prohibited.
* * *
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IN WITNESS WHEREOF, the Parties have executed this Agreement, effective
as of the ________ day of April, 2000.
Signed, Sealed & Delivered
In Our Presence
ENTER TECH CORPORATION
--------------------------------
--------------------------------
By: /S/ XXX XXXXXXX
-------------------------
Xxx Xxxxxxx, President
(CORPORATE SEAL) Attest:
---------------------
Secretary
WAVEPOWER, INC.
--------------------------------
--------------------------------
By: /S/ XXXXXX X. XXXXXXXX
-------------------------
Xxxxxx X. Xxxxxxxx, President
(CORPORATE SEAL) Attest:
---------------------
Secretary
PRESIDENT
--------------------------------
________________________________ /S/ XXXXXX X. XXXXXXXX
----------------------------
Xxxxxx X. Xxxxxxxx
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