EMPLOYMENT AGREEMENT
BETWEEN
DOCUPORT, INC.
AND
XXXXXX XXXXXXXXX
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into as of
the 5th day of April, 1999 (the "Effective Date"), by and between DOCUPORT,
INC., a Canadian corporation (the "Company" or the "Employer"), having xx
xxxxxxx xx Xxxxx 0000, 0000 Xxxx-Xxxxxxxx W., X.X. Xxx 00, Xxxxxxxx, Xxxxxxxx xx
Xxxxxx, Xxxxxx; and XXXXXX XXXXXXXXX ("Employee"), having an address at 00 Xxxx
Xxxxxxx Xxxx, Xxxxxxxxx, Xxx Xxxxxx 00000.
RECITALS
A. Employee has substantial experience and expertise in operating and
managing one or more business enterprises including but not limited to
management and supervision of sales, marketing, finances and manufacturing
operations of business enterprises.
B. The Company is a corporation engaged in the development of peripheral
equipment for computers including but not limited to portable fax machines,
scanners and copiers.
C. The Company desires to employ Employee to manage the business of the
Company.
NOW, THEREFORE, in consideration of the above recitals, the terms and
conditions hereinafter set forth, and for their mutual reliance, the parties
hereto agree as follows:
1. Establishment of Relationship.
The Company hereby employs Employee as President and Chief Operating
Officer of the Company, and Employee hereby accepts and agrees to such
employment in accordance with all of the terms and conditions of this Agreement.
During the term of this Agreement, Employee shall manage and supervise the
business of the Company, subject to the direction of the Board of Directors,
including but not limited to review and control of accounting, marketing and
sales, and perform such other services as may be delegated to Employee by the
Board of Directors of the Company, as shall be consistent with the position in
which Employee is employed hereunder. Employee hereby agrees to devote his best
endeavors and skill, for the interest, benefit and best advantage of Company and
shall devote a substantial portion of his work time consisting of a minimum of
thirty (30) hours per week to the business of the Company. Employee may accept,
as his sole and exclusive property, payments received by Employee for other
services rendered by Employee outside the scope of Employee's employment by the
Company so long as the provision of such services do not interfere with the
provision of services to be provided by Employee on behalf of Company pursuant
to or as contemplated by this Agreement.
2. Representations and Warranties of Employee.
The Company has entered into this Agreement in reliance on the
Employee's representation and warranties. Employee hereby represents and
warrants to the Company that he has
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the power and authority to enter into this Agreement and that the Employee's
execution of this Agreement does not violate, conflict with or cause and event
of default pursuant to any other Agreement or obligation of which Employee may
be a party or which he may be bound.
3. Duties and Covenants of Employee.
3.1 The duties of Employee pursuant to this Agreement shall be those
customarily performed by the President and Chief Operating Officer, including
the duties to:
(a) Establish marketing and sales plans, and establish
realistic sales goals on a monthly, quarterly and annual basis;
(b) Have complete day to day responsibility for the operations
of the Company, including contract negotiations, supervision of sales and
marketing and accounting and participation in financial public relations
including, but not limited to road shows;
(c) Sign all checks on behalf of the Company for any and all
expenses incurred in the course of the Company's business up to $20,000, with
checks in excess of $20,000 requiring a second signatory designated, from time
to time by the Company's Board of Directors;
(d) Prepare, in connection with the services to be provided by
Employee under this Agreement, all reports and correspondence necessary or
appropriate in the circumstances, it being understood by the parties that all
such records, reports, and correspondence shall be the property of the Company;
(e) Prepare a budget for the operations of the Company which
shall be submitted to the Board of Directors in or before June 1, 1999 for the
balance of 1999 and on or before November 1, of each year commencing November 1,
1999 for the succeeding calendar year, which budget shall be subject to approval
by the Board of Directors and shall be followed by the Employee, except as may
be otherwise approved by the Board of Directors.
(f) Promote, as and to the extent permitted by law and
applicable ethical standards, the business of the Company; and
(g) Perform such other duties as the Board of Directors of the
Company shall from time to time, reasonably direct; provided such duties are
consistent with the position of President and Chief Operating Officer of the
Company.
Notwithstanding the foregoing duties of the Employee, the Employee shall
not have the power and authority to bind the Company or enter into agreements or
commitments on behalf of the Company without the prior approval of the Board of
Directors of the Company
3.2 In the performance of Employee's duties set forth in this Section 3,
Employee
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covenants that Employee shall notify the Company within five (5) business days
after the occurrence of any of the following; (i) the accusation of Employee of
a felony or any other crime involving moral turpitude or immoral conduct; (ii)
Employee's incapacity or disability or any condition affecting Employee which
adversely effects Employee's ability to provide his services as required under
this Agreement;
4. Office Space, Personnel and Administrative Support.
The Company shall furnish, at its expense, to Employee, the
following: (a) adequate office space as may be reasonable necessary for the
performance of Employee's duties hereunder, (b) equipment and furniture for use
by Employee in performing his duties, and (c) such support personnel, if any, as
may be necessary to enable Employee to perform his duties.
5. Compensation; Benefits.
In consideration for Employee agreeing to work for the Company,
Employee shall be entitled to receive and shall receive warrants to purchase,
exercisable at Two ($2.00) Dollars per share, Two Hundred Fifty Thousand
(250,000) shares of Stock in the Company. Said warrants shall be earned and
delivered to Employee in equal monthly installments of 6,945 warrants per month,
on the last day of each month; provided however if Employee is terminated, other
than for cause, the then remaining warrants shall be deemed to be vested and
immediately delivered to Employee. In the event Employee is terminated "With
Cause" (as hereinafter defined), or if the Employee terminates his employment,
the balance of the undelivered warrants shall terminate and be of no further
force and effect. All warrants must be exercised within three (3) years of the
date they are issued.
6. Term.
The term of this Agreement shall commence on April 15, 1999, and
shall continue in full force and effect thereafter for an initial term of three
(3) years. Thereafter, this Agreement shall be automatically extended for
successive one (1) year terms unless terminated by either party at any time, by
giving the other party ninety (90) days prior written notice of such
termination. There shall be no additional warrants or other consideration given
to Employee if this Agreement is extended.
7. Termination.
7.1 This Agreement may be terminated immediately by the Company by
notice to Employee upon the occurrence of any of the following events
(hereinafter defined as "With Cause");
(a) Upon Employee's death or permanent disability (the term
"permanent disability" shall be defined as the failure of the Employee to
perform his duties and responsibilities for a total of sixty-five (65) days
(excluding Saturdays, Sundays and holidays upon which banks are
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closed in the State of New Jersey) during any twelve (12) consecutive months
during the term of this Agreement, or the determination by an independent
physician that Employee is permanently disabled): or
(b) Employee's conviction of a felony or of any other crime
involving moral turpitude.
(c) Employee's willful malfeasance or gross negligence;
(d) Employee's fraud, misappropriation or embezzlement;
(e) Employee's failure to perform such duties which are
reasonably assigned to him by the Board of Directors of the Company, provided
such duties are customary and appropriate for his position as President and
Chief Operating Officer of the Company; or
(f) Employee's default, violation of, or failure to perform
any material provision of this Agreement;
provided however, that with respect to items (e) and (f) above, termination
shall be subject to receipt of written notice by the Employee from the Company
specifying the failure or default and the Employee failing to cure such failure
or default within five (5) days after such notice. Except with respect to the
five (5) days notice to terminate the Employee with respect to items (e) and (f)
pursuant to the preceding sentence, the Employer may terminate this Agreement
and the Employee's employment With Cause upon notice to the Employee, which
notice shall state the cause for termination and the date of termination which,
at the Company's election, may be effective immediately. Such termination of the
Employee's employment shall not constitute a breach of this Agreement by the
Company and the Employer's sole obligation to the Employee shall be to pay the
Employee the amount of any compensation then due to the Employee through the
date of termination.
7.2 The Company, may terminate Employee for any reason other than as
set forth in Section 7.1, upon thirty (30) days notice, provided that all
warrants to purchase the stock of the Company set forth in Section 5 shall be
immediately vested in Employee and delivered to Employee.
7.3 Termination of this Agreement shall not release or discharge
either party from any obligation, debt or liability which shall have previously
accrued and remain to be performed on or after the date of termination.
8. Rights and Obligations upon Termination; Access to Books and Records.
Upon termination of Employment, Employee shall remove all of
Employee's work items and materials from the Company's office and turn over to
Company all materials belonging to Company. All customer records shall remain
the exclusive property of Company.
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9. Confidential Information and Restrictive Covenants.
A. Confidential Information; Non-Disclosure.
(i) As used in this Agreement, "Confidential Information"
means information which is presented to the Employee by the Company or
developed, conceived or created by the Company, or disclosed to the Employee or
known by or conceived or created by the Employee during the term of the
Employee's employment by the Company, with respect to the Company, its business
or any of its products, processes, and other services relating thereto relating
to the past, present or future business of the Company or any plans therefore,
or relating to the past, present or future business of a third party or plans
therefore which are disclosed to the Employee. Confidential Information
includes, but is not limited to, all documentation, hardware and software
relating thereto, and information and data in written, graphic and/or machine
readable form, products, processes and services, whether or not patentable,
trademarkable or copyrightable or otherwise protectable, including, but not
limited to, information with respect to discoveries; know-how; ideas; computer
programs, source codes and object codes; designs; algorithms; processes and
structures; product information; marketing information; price lists; cost
information; product contents and formulae; manufacturing and production
techniques and methods; research and development information; lists of clients
and vendors and other information relating thereto; financial data and
information; business plans and processes; documentation with respect to any of
the foregoing; and any other information of the Company that the Company informs
the Employee or the Employee should know, by virtue of his position or the
circumstances in which the Employee learned such other information, is to be
kept confidential including, but not limited to, any information acquired by the
Employee from any sources prior to the commencement of the Employee's employment
by the Company. Confidential Information also includes similar information
obtained by the Company in confidence from its vendors, licensors, licensees,
customers and/or clients. Confidential Information may or may not be labeled as
confidential.
(ii) Except as required in the performance of the Employee's
duties as an employee, the Employee will not, during or after his employment,
directly or indirectly, use any Confidential Information or disseminate or
disclose any Confidential Information to any person, firm, corporation,
association or other entity. The Employee shall take all reasonable measures to
protect Confidential Information from any accidental, unauthorized or premature
use, disclosure or destruction. The foregoing prohibition shall not apply to any
Confidential Information which: (a) was generally available to the public prior
to such disclosure; (b) becomes publicly available through no act or omission of
the Employee, (c) is disclosed as reasonably required in a proceeding to enforce
the Employee's rights under this Agreement or (d) is disclosed as required by
court order or applicable law.
(iii) Upon termination of the Employee's employment with the
Company for any reason or at any time upon request of the Company, the Employee
agrees to deliver to the Company all materials of any nature which are in the
Employee's possession or control and which are or contain Confidential
Information, Work Product or Work Products (hereinafter defined), or
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which are otherwise the property of the Company or any vendor, licensor,
licensee, customer or client of the Company, including, but not limited to
writings, designs, documents, records, data, memoranda, tapes and disks
containing software, computer source code listings, routines, file layouts,
record layouts, system design information, models, manuals, documentation and
notes.
(iv) All ideas, inventions, discoveries or improvements,
whether patentable or not, conceived by the Employee (alone or with others)
during the term of the Employee's employment by the Company ("Work Products")
shall be the exclusive property of and assigned to the Company or as the Company
may direct without compensation to the Employee. Any records with respect to the
foregoing shall be the sole and exclusive property of the Company and the
Employee shall surrender possession of such records to the Company upon any
suspension or termination of his employment with the Company. Any Work Product
shall be deemed incorporated in the definition of Confidential Information for
all purposes hereunder.
(v) The Employee will not assert any rights with respect to
the Company, its business, or any of its products, processes and other services
relating thereto, Work Product or any Confidential Information as having been
acquired or known by the Employee prior to the commencement of the Employee's
employment with the Company.
B. Work Products.
(i) The Employee represents and warrants to the Company that
all work that the Employee performs, for or on behalf of the Company and its
clients, and all work product that the Employee produces, including, but not
limited to, software, documentation, memoranda, ideas, designs, inventions,
processes, algorithms, etc. (also " Work Product") will not knowingly infringe
upon or violate any patent, copyright, trade secret or other property right of
any of the Employee's former employers or of any other third party. Further, the
Employee will not disclose to the Company or use in any of the Employee's Work
Product any confidential or proprietary information belonging to others, unless
both the owner thereof and the Company have consented to such disclosure and
usage.
(ii) The Employee will promptly disclose to the Company all
Work Products developed by the Employee within the scope of his employment with
the Employer or which relate directly to, or involve the use of, any
Confidential Information including, but not limited to, all software, concepts,
ideas and designs, and all documentation, manuals, letters, pamphlets, drafts,
memoranda and other documents, writings or tangible things of any kind.
(iii) The Employee acknowledges and agrees that all
copyrightable Work Products prepared by the Employee within the scope of the
Employee's employment with the Company are "works made for hire" and,
consequently, that the Company owns all copyrights thereto.
(iv) The Employee hereby assigns, transfers and conveys to the
Company,
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without additional consideration, all of her other rights, title and interest
(including, but not limited to, all patent, copyright and trade secret rights)
in and to all Work Products prepared by the Employee, whether patentable or not,
made or conceived, in whole or in part, by the Employee within the scope of the
Employee's employment by the Company, or that relate directly to, or involve the
use of, Confidential Information.
(v) The Employee will, without additional compensation,
execute all assignments, oaths, declarations and other documents requested by
the Company to effect and further evidence the foregoing assignment, transfer
and conveyance, and agree to provide all reasonable assistance to the Company
(at the Company's expense) to provide all information, documentation and
assistance to the Company in perfecting, enforcing, defending or protecting any
or all of the Company's rights in all Work Product.
C. Restrictive Covenants.
(i) The Employee agrees that he shall not use the name
"Docuport" or any variation thereof or any variation thereof, except in the
course of his employment by the Company.
(ii) From the date hereof and for a period of one (1) year
following the end of the Term (notwithstanding the earlier termination of this
Agreement), the Employee will not, anywhere within North America, directly or
indirectly, own, manage, join, control, be employed by, or participate in the
ownership (other than the ownership of less than one (1%) percent of the issued
and outstanding shares of any publicly-held corporation), operation or control
of, or be connected in any manner with, any corporation or other entity engaged
in any activity of the type and character of the business then conducted by the
Company or which the Company plans to conduct at the time of termination of this
Agreement, whether for his own account or as an employee of any other person,
firm or corporation.
(iii) During the Term of the Employee's employment by the
Company, and for a period of one (1) year following the termination of his
employment (whenever, however and by whomever caused) Employee will not (a)
induce or attempt to induce any customer or client of the Company to reduce such
customers or client's business with the Company; (b) solicit or attempt to
induce any of the Company's employees to leave the employment of the Company;
(c) induce or attempt to induce any of the Company's suppliers or vendors to
reduce the business which they do with the Company; or (d) take any other action
prejudicial to the Employer or its business affairs or interests.
(iv) The restrictions which are contained in this Paragraph
"9" of this Agreement shall apply to all locations within North America. The
Employee hereby acknowledges and agrees that the Company has plans to carry on
substantial business throughout North America.
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D. Reasonableness of Restrictions
Employee agrees that the duration, scope and geographic area
for which the provisions set forth in this Agreement are to be effective are
reasonable. If any court of competent jurisdiction determines that any provision
of this Agreement is invalid or unenforceable by reason of such provision
extending the covenants and agreements contained herein for too great a period
of time or over too great a geographical area, or by reason of its being too
extensive in any other respect, such agreement or covenant shall be interpreted
to extend only over the maximum period of time and geographical area, and to the
maximum extent in all other respects, as to which it is valid and enforceable,
all as determined by such court in such action. Any determination that any
provision of this Agreement is invalid or unenforceable, in whole or in part,
shall have no effect on the validity or enforceability of any remaining
provision of this Agreement.
E. Time Periods Not Limited
Any period of time set forth in this Agreement shall not be
construed to permit the Employee to engage in any of the prohibited acts set
forth in this Agreement after such period if such acts would otherwise be
prohibited by any applicable statute or legal precedent.
F. Equitable Relief.
Employee acknowledges that the services to be rendered by the
Employee hereunder are of a special character which gives them a peculiar value,
the loss of which cannot be reasonably or adequately compensated in damages in
an action at law. Furthermore, a breach by the Employee of any of the provisions
contained in this Paragraph "9" of this Agreement, will cause the Company
irreparable injury and harm. The Employee expressly agrees that, notwithstanding
anything which is contained in this Agreement to the contrary, the Company shall
be entitled to injunctive or other equitable relief to prevent the Employee's
breach or anticipated breach of the provisions contained in this Paragraph "9"
of this Agreement. Resort to such equitable relief, however, shall not be
construed to be a waiver of any other rights or remedies which the Company may
have for damages or otherwise.
10. Assignment.
Employee shall not assign any rights or delegate any duties under
this Agreement without the prior written consent of Company. Any unauthorized
attempted assignment shall be null and void and of no force or effect.
11. Notices.
Any and all notices, requests, payments, demands and other
communications, required or permitted hereunder shall be given to the respective
parties in writing, by registered or certified mail, postage prepaid, return
receipt requested, addressed to the Company or the Employee,
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as the case may be, as follows:
To Company: Docuport, Inc.
Xxxxx 0000
0000 Xxxx-Xxxxxxxx X.
Xxxxxxxx, Xxxxxx
Xxxxxx
Attn: Xx. Xxxx Xxxx
Copy to: Xxxxx & Fraade, P.C.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Att: Xxxxxxxxx X. Xxxxx
To Employee: Xx. Xxxxxx Xxxxxxxxx
00 Xxx Xxxxxxx Xxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
or at such other address(es) and to such other persons(s) as either party may
from time to time designate by notice given as herein provided. Notices shall be
deemed effective seventy-two (72) hours after deposit in the United States mail
if sent by certified or registered mail.
12. Severability.
If any term, provision, covenant or condition of this Agreement is
held by a court of competent jurisdiction to be invalid, void or unenforceable,
the remaining provisions shall remain in full force and effect and shall in no
way be affected, impaired or invalidated. In event that a provision of this
Agreement is rendered invalid or unenforceable as provided in this Paragraph 12
and its removal has the effect of materially altering (i) the obligations of
Company in such manner as , in the sole judgment of Company, will cause the
Company to act in violation of its Operating Agreement or Certificate of
Formation, or (ii) the obligations of either Company or Employee in such manner
as in the reasonable judgment of the affected party, will cause serious
financial hardship to such party, the party so affected shall have the right to
terminate this Agreement upon thirty (30) days prior written notice to the other
party. In the event of termination pursuant to this Section 12, the provisions
of Paragraph 7 shall govern such termination.
13. Amendment.
No modification, amendment or addition to this Agreement, nor waiver
of any of its provisions, shall be valid or enforceable unless in writing and
signed by both parties.
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14. Entire Agreement.
This Agreement and the documents referred to herein contain all of
the terms and conditions agreed upon by the parties with respect to the subject
matter hereof. No other understanding, oral or otherwise, regarding the subject
matter of this Agreement, shall be deemed to exist or to bind either party
15. Binding Effect.
This Agreement shall be binding on the parties, their distributees,
legal representatives, successors and permitted assignees.
16. Choice of Law.
This Agreement shall be governed by and construed in accordance with
the laws of the State of New Jersey.
17. Interpretation.
No provision of this Agreement is to be interpreted for or against
either party because that party's legal representative drafted such provision.
18. Headings.
The headings which are used in this Agreement are for convenience
only and shall not affect in any manner the meaning or interpretation of this
Agreement.
19. Waiver of Breach.
No waiver of any of the provisions of this Agreement shall be deemed
to be or shall constitute a waiver of any other provision hereof, regardless of
whether similar, nor shall such waiver constitute a continuing waiver unless
otherwise expressly provided.
20. Duplicate Originals.
This Agreement may be executed in any number of counterpart copies,
all of which constitute one and the same Agreement and each of which shall
constitute an original, and shall become effective upon execution and delivery
to Company and the Employee.
21. Legal Representation.
Employee acknowledges that Employee has been advised by the Company
to seek his own separate counsel in connection with the negotiation and
execution of this Agreement.
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Employee further acknowledged that prior to the execution of this Agreement,
Employee has apprised himself of sufficient relevant information, through
counsel or through other sources of Employee's selection, in order that Employee
can intelligently exercise his own judgment in deciding whether to execute, and
negotiating the contents of, this Agreement.
22. Assistance in Litigation.
During the term of this Agreement, Employee shall be available to
Company, at no additional cost to the Company, to testify as an expert witness,
or otherwise, in the event of litigation brought against Company based upon a
claim of negligence or any other cause of action regarding Employee, except if
Employee is a named adverse party.
23. Governing Law; Disputes. This Agreement shall in all respects be
construed, governed, applied and enforced in accordance with the internal laws
of the State of New Jersey without giving effect to the principles of conflict
of laws and be deemed to be an agreement made under the laws of and entered into
in the State of New Jersey. Except as otherwise provided in Article "9" of this
Agreement, the parties agree that they shall be deemed to have agreed to binding
arbitration in New York, New York, with respect to the entire subject matter of
any and all disputes relating to or arising under this Agreement including, but
not limited to, the specific matters or disputes as to which arbitration has
been expressly provided for by other provisions of this Agreement. Any such
arbitration shall be by a panel of three arbitrators and pursuant to the rules
then obtaining of the American Arbitration Association in New York, New York.
The parties may agree in writing to conduct any arbitration in another location
or forum by their mutual consent. In all arbitrations, judgment upon the
arbitration award may be entered in any court having jurisdiction. The parties
specifically designate the Courts in the County of New York, State of New York
as properly having jurisdiction for any proceeding to confirm and enter judgment
upon any such arbitration award. The parties hereby consent to and submit to
personal jurisdiction over each of them by the Courts of the State of New York
in any action or proceeding, waive personal service of any and all process and
specifically consent that in any such action or proceeding, any service of
process may be effectuated upon any of them by certified mail, return receipt
requested, in accordance with Paragraph "11" of this Agreement. The parties
agree, further, that the prevailing party in any such arbitration as determined
by the arbitrators shall be entitled to such costs and attorney's fees, if any,
in connection with such arbitration as may be awarded by the arbitrators;
provided, however, that if a proceeding is commenced to confirm and enter a
judgment thereon by the Courts of the State of New York and such application is
denied, no such costs or attorneys fees shall be paid. In connection with the
arbitrators' determination for the purpose of which party, if any, is the
prevailing party, they shall take into account all of the facts and
circumstances including, without limitation, the relief sought, and by whom, and
the relief, if any, awarded, and to whom. In addition, and notwithstanding the
foregoing sentence, a party shall not be deemed to be the prevailing party
unless the amount of the arbitration award is greater than fifteen (15%) percent
of the amount offered in writing by the other party. For example, if the party
initiating the arbitration ("A") seeks an award of $100,000 plus costs and
expenses, the other party ("B") has offered A $50,000 prior to the commencement
of the arbitration proceeding, and the arbitration panel awards
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any amount less than $57,500 to A, the panel should determine that B has
"prevailed".
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
effective as of the date first written above.
DOCUPORT, INC.
("Company")
By: /s/ Xxxx Xxxx
------------------------------
, Title
/s/ Xxxxxx Xxxxxxxxx
---------------------------------
XXXXXX XXXXXXXXX, Employee
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