STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT (this "Agreement") is entered into, effective as of
January 7, 1999 (the "Effective Date"), by and between American Film
Technologies, Inc., a Delaware corporation (the "Company"), and Xxxxxxx Xxxxx
(the "Holder").
RECITALS
WHEREAS, Holder has agreed to render consulting services to the Company pursuant
to the terms of that certain Consulting and Confidentiality Agreement dated
January 7, 1999 (the "Consulting Agreement"), and
WHEREAS, pursuant to the Agreement, the Company has agreed to grant the stock
option provided for herein to the Holder.
NOW, THEREFORE, the Company and the Holder covenant and agree as follows:
1. Grant of the Option . Subject to and conditioned upon the approval by the
Board of Directors of the Company of this Agreement and the grant of the
stock options contemplated hereby on or before January 30, 1999, for good
and valuable consideration, the receipt of which is hereby acknowledged,
the Company hereby grants to the Holder a stock option (the "Option") to
acquire from the Company, from time to time on the terms and conditions set
forth herein, all or any portion of an aggregate of Five Hundred Thousand
(500,000) shares of the Company's $.002 par value common stock (the "Common
Stock"), at the price equal to the $.05 per share (the "Exercise Price").
Each of the number of shares of Common Stock into which the Common Stock is
exercisable and the Exercise Price is subject to adjustment as provided in
Section 4 hereof.
2. Term of the Option. Subject to the provisions of Section 8 hereof, the
Option will commence on the date hereof and will terminate on June 16, 2001
(the "Expiration Date ").
3. Vesting: Exercise. The Holder's right to exercise all or any portion of the
Option and receive the shares of Common Stock represented thereby shall
become exercisable immediately as of the date hereof.
4. Adjustments Upon Changes in Capitalization or Other Significant Events. In
the event of any increase or decrease in the number of the issued shares of
Common Stock by reason of a stock dividend, stock split, reverse stock
split or consolidation or combination of shares and the like at any time or
from time to time throughout the term of the Option such that the holders
of outstanding Common Stock shall have had an adjustment made, without
payment therefor, in the number of shares of Common Stock owned by them or
shall have become entitled or required to have had an adjustment made in
the number of shares of Common Stock owned by them, without payment
therefor, there shall be a corresponding adjustment as to the number of
shares of Common Stock into which the Option is exercisable and to the
Exercise Price, with the result that the Holder's proportionate share of
Common Stock shall be maintained as before the occurrence of such event
without change in the aggregate exercise price applicable in the event the
Holder elected to exercise the Option in full (except for any change in the
aggregate exercise price resulting from rounding-off of share quantities or
prices).
5. Exercise of the Option. To exercise all or any portion of the Option, the
Holder must do the following:
(a) deliver to the Company a written notice, in the form of Exhibit "A"
attached hereto and made a part hereof, specifying the number of
shares of Common Stock for which the Option is being exercised;
(b) surrender the Agreement to the Company upon complete exercise of the
Option; surrender the Agreement to the Company upon complete exercise
(c) tender payment, either in cash or by cashiers or certified check of
the aggregate exercise price for the shares of Common Stock for which
the Option is being exercised;
(d) pay, or make arrangements satisfactory to the Board for payment to the
Company of, all federal, state and local taxes, if any, required to be
withheld by the Company in connection with the exercise of the Option
or the relevant portion thereof; and
(e) execute and deliver to the Company any other documents required from
time to time by the Company in order to promote compliance with the
Securities Act of 1933, as amended (the " 1933 Act"), applicable state
securities laws, or any other applicable law, rule or regulation.
6. Delivery of Share Certificate. As soon as practicable after the Option or
any portion thereof has been duly exercised, the Company will deliver to
the Holder a certificate for the shares of Common Stock for which the
Option was exercised. Unless the Option has expired or been exercised in
full, the Company and the Holder agree that the Company may affix to this
Agreement an appropriate notation indicating the number of shares for which
the Option was exercised and return this Agreement to the Holder. If any
law or regulation of the Securities and Exchange Commission (the "SEC") or
of any other federal or state governmental body having jurisdiction shall
require the Company or the Holder to take any action prior to issuance to
the Holder of the shares of Common Stock specified in the written notice of
exercise, or if any listing agreement between the Company and any national
securities exchange requires such shares to be listed prior to issuance,
the date for the delivery of such shares shall be adjourned until the
completion of such action and/or such listing.
7. Fractional Shares. In no event shall the Company be required to issue
fractional shares upon the exercise of any portion of the Option.
8. Adjustments to Term and Exercisability of the Option by the Company. The
term of the Option shall expire upon occurrence of the following events:
(a) The expiration of thirty (30) days from the date of terminating the
Agreement solely as the result of Holder's material breach thereof; or
(b) In the event the Agreement terminates as a result of Holder's death,
the expiration of one (1) year from the date of Holder's death.
9. Nontransferability. The Option is not transferable other than (a) by
operation of law, (b) to one or more trusts of which the Holder is a
trustor, or (c) by will or the laws of descent and distribution. The Option
may be exercised during the lifetime of the Holder only by the Holder or
his or her court-appointed legal representative.
10. Warranties and Representations of the Holder. By executing this Agreement,
the Holder accepts the Option and represents and warrants to the Company
and covenants and agrees with the Company as follows:
(a) THE SECURITIES OFFERED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED OR
QUALIFIED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE
SECURITIES LAWS OF ANY STATE, AND ANY SALE OF SUCH SECURITIES IS
SUBJECT TO COMPLIANCE WITH, OR THE AVAILABILITY OF EXEMPTIONS FROM
COMPLIANCE WITH, THE REGISTRATION AND QUALIFICATION REQUIREMENTS OF
SUCH ACT AND ANY APPLICABLE STATE SECURITIES LAWS. THIS INSTRUMENT
DOES NOT CONSTITUTE AN OFFER OR SOLICITATION TO ANY PERSON IN ANY
JURISDICTION WHERE SUCH OFFER OR SOLICITATION MAY NOT LAWFULLY BE
MADE. TRANSFER OF THIS INSTRUMENT AND THE SECURITIES OFFERED HEREBY IS
RESTRICTED AS PROVIDED IN SECTIONS 9 AND 12 HEREOF.
(b) The Holder acknowledges that no registration statement under the 1933
Act or under any state securities law has been filed and that the
Company has no obligation except as stated in Section 4 of the
Consulting Agreement to file such a registration statement in the
future with respect to the Option or, any shares of Common Stock that
may be acquired upon exercise of the Option or any portion thereof.
(c) The Holder warrants and represents that the Option and any shares of
Common Stock acquired upon exercise of the Option or any portion
thereof will be acquired and held by the Holder for the Holder's own
account, for investment purposes only, and not with a view towards the
distribution or public offering thereof or with any present intention
of reselling or distributing the same at any particular future time.
(d) The Holder agrees not to sell, transfer or otherwise voluntarily
dispose of any shares of Common Stock that may be acquired upon
exercise of the Option or any portion thereof unless (i) there is an
effective registration statement under the 1933 Act covering the
proposed disposition and compliance with governing state securities
laws, (ii) the Holder delivers to the Company, at the Holder's
expense, a "no-action" letter or similar interpretative opinion,
satisfactory in form and substance to the Company, from the staff of
each appropriate securities agency, to the effect that such shares may
be disposed of by the Holder in the manner proposed, or (iii) the
Holder delivers to the Company, an opinion of counsel reasonably
satisfactory to the Company, to the effect that the proposed
disposition is exempt from registration under the 1933 Act and
governing state securities laws.
(e) The Holder acknowledges and consents to the appearance of a
restrictive legend, in substantially the following form:
NOTICE: RESTRICTIONS ON TRANSFER
The securities represented by this certificate have not been
registered under the Securities Act of 1933, or any state securities
laws, and may not be offered, sold, transferred, encumbered, or
otherwise disposed of except upon satisfaction of certain conditions.
Information concerning these restrictions may be obtained from the
corporation. Any offer or disposition of these securities without
satisfaction of said conditions will be wrongful and will not entitle
the transferee to register ownership of the securities with the
corporation.
(f) The Holder agrees not to sell, transfer or otherwise dispose of the
Option, except as specifically permitted by this Agreement and any
applicable securities laws.
11. Warranties and Representations of the Company.
(a) The Company is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware.
(b) The grant of the Option to the Holder has been duly authorized by all
requisite corporation action on the part of the Company and the shares
of Common Stock represented by the Option have been properly reserved
for issuance.
(c) The number of shares of Common Stock represented by the Option (when
coupled with all shares currently outstanding and all shares to be
issued upon the exercise of all other currently outstanding options
granted by the Company which may be exercised absent an increase in
the number of authorized shares of common stock) does not exceed the
number of shares of Common Stock currently authorized for issuance by
the Company's Certificate of Incorporation, as amended (the
"Certificate").
(d) No consents, approvals or permits are required to be obtained from any
third person, including, without limitation, any securities
commission, before the grant of the Option, nor do any conditions
precedent exist (other than those specifically identified herein) that
would impair the Company's ability to grant the Option hereunder.
(e) No consents, approvals, nor permits are required to be obtained from
any third person, other those which may be required under applicable
securities laws, before the issuance of Common Stock upon the exercise
of all or any portion of the Option.
12. Procedures Upon Permitted Transfer. Before any sale, transfer or other
disposition of any of the shares of Common Stock acquired upon exercise of
the Option, the Holder agrees to give written notice to the Company of his
or her intention to effect such disposition. The notice must describe the
circumstances of the proposed transfer in reasonable detail and must
specify the manner in which the requirements of Section 10(d) above will be
satisfied in connection with the proposed disposition. After (a) legal
counsel to the Company has determined in good faith that the requirements
of Section 10(d) above will be satisfied and (b) the Holder has executed
such documentation as may be necessary to effect the proposed disposition,
the Company will, as soon as practicable, transfer such shares in
accordance with the terms of the notice. Any stock certificate issued upon
such transfer will bear a restrictive legend, in the form set forth in
Section 10(e) of this Agreement, unless in the opinion of the Company's
legal counsel such legend is not required. Compliance with the foregoing
procedures is in addition to compliance with any separate requirements
applicable to the Holder under the Certificate or otherwise.
13. Rights as Stockholder. The Option, in and of itself, does not create rights
in the Holder as a stockholder of the Company; provided that upon any such
exercise of the Option or any portion thereof that complies with the
requirements of this Agreement, the Holder shall immediately be vested with
all the rights afforded to other stockholders of the Company, regardless of
when the Company actually delivers certificates representing Common Stock
to the Holder.
14. Further Assurances. The Holder and the Company agree, from time to time, to
execute such additional documents as the other party hereto may reasonably
require to effectuate the purposes of this Agreement.
15. Binding Effect. This Agreement shall be binding upon the Holder, the
Company, the Holder's heirs, successors and assigns, and any corporation or
other entity that succeeds to the rights and liabilities of the Company.
16. Cost of Litigation. In any action at law or in equity or any arbitration to
enforce any of the provisions or rights under this Agreement, the
unsuccessful party to such litigation, as determined by the court or
arbitrator in a final judgment or decree, shall pay the successful party or
parties all costs, expenses and reasonable attorneys' fees incurred by the
successful party or parties (including without limitation costs, expenses
and fees on any appeals), and if the successful party recovers judgment in
any such action or proceeding, such costs, expenses and attorneys' fees
shall be included as part of the judgment.
17. Entire Agreement: Modifications. This Agreement constitutes the entire
agreement and understanding between the Company and the Holder regarding
the subject matter hereof. No modification of the Option or this Agreement,
or waiver of any provision of this Agreement, shall be valid unless in
writing and duly executed by the Company and the Holder. The failure of any
party to enforce any of that party's rights against the other party for
breach of any of the terms of this Agreement shall not be construed as a
waiver of such rights as to any continued or subsequent breach.
18. Governing Law. This Agreement shall be governed by and interpreted under
the law of the State of California applicable to agreements wholly
negotiated, executed and to be performed in that state.
19. Notices. Any notices that either party to this Agreement is required or may
desire to give to the other shall be given by sending the same to the other
at the address below, or at such other address as may be designated in
writing by any party in a notice to the other given in the manner
prescribed in this Section 19. All such notices shall be in writing and
delivered by telex, facsimile, personal delivery or if sent by mail,
certified or registered mail, return receipt requested deposited so
addressed, postage prepaid. If sent by mail notices shall be deemed
delivered five (5) business days after deposit in the mail.
The addresses to which any such notices shall be given are the following:
To Holder:
Mr. Xxxxxxx Xxxxx
Digital Video Art
000 Xxxxxxx Xxxx Xxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxxxxx 00000
Facsimile No. (000) 000-0000
To the Company:
Xxxxxx X. Xxxxxxx
c/o American Film Technologies, Inc.
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile No. (000) 000-0000
20. Severability. Whenever possible, each provision of this Agreement shall be
interpreted so as to be effective and valid under applicable law. If any
provision of this Agreement is prohibited or deemed invalid under any
applicable law, however, such provision shall be ineffective only to the
extent of such prohibition or invalidity, and neither the remainder of such
provision nor this Agreement shall be invalidated as a result.
21. Counterparts. This Agreement may be executed by the parties in one or more
counterparts, all of which taken together shall constitute one instrument.
22. Jurisdiction. The parties hereto agree to submit to the exclusive
jurisdiction of the Superior Court of the State of California, County of
Santa Xxxxx, any controversy, claim or dispute arising out of or relating
to this Agreement or the method and manner of performance thereof or the
breach thereof.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and
year first above written.
"Company'
American Film Technologies, Inc.
By:
/s/ Xxxxxx X. Xxxxxxx
-----------------------------------
Xxxxxx X. Xxxxxxx
Chief Executive Officer
"Holder"
/s/ Xxxxxxx Xxxxx
------------------------------------
Xxxxxxx Xxxxx
CONSULTING AND CONFIDENTIALITY AGREEMENT
This Agreement sets forth the terms and conditions by which Xxxxxxx X. Xxxxx,
an individual with offices at 000 Xxxxxxx Xxxx Xxxxx, Xxxxx 000, Xxxxxxxx, XX
("Consultant") shall provide consulting services to American Film
Technologies, a Delaware corporation, with principal offices at 000 Xxxx
Xxxxxx, 00xx xxxxx, Xxx Xxxx, Xxx Xxxx ("Company"). These services shall be
provided to the Company on a part-time, non-exclusive basis to advise and
assist it in technology-related matters.
1. Consulting Services: Consultant's services shall be rendered on an
as-needed basis as requested by the Company subject to the Consultant's
reasonable availability. Such duties and responsibilities shall be
subject to the direction and supervision of the Company's Chief Executive
Officer ("CEO") and/or the Board of Directors, and subject to the
Consultant's discretion and consent. Such duties shall be consistent
with:
(a) assisting and advising the Company in connection with the maintenance,
modification and enhancement of its proprietary colorization process,
including but not limited to the computer programming, hardware and
software relating thereto; and
(b) such additional services as may be necessary to assist the CEO and the
Board of Directors in the Company's financing activities and in
discussions with potential strategic or financial partners.
For the purposes of this Agreement, the services set forth in (a) and (b)
above shall hereinafter be referred to as the "Consulting Services".
Consultant may render these services from Consultant's existing offices, home
or such other place as Consultant deems appropriate. Notwithstanding the
forgoing, the parties hereto recognize that Consultant may be required from
time to time to travel outside of Campbell to the Company's offices and or
facilities in San Diego and Tijuana, or to other locations. In the event that
travel is required, the Company agrees to give Consultant such prior notice as
may be practicable and to schedule such travel at a mutually convenient time.
2. Term: The term of this Agreement shall commence upon Board Approval, as
hereinafter defined, and shall terminate upon the first to occur of the
following (a) written termination by the Company for any reason, with or
without cause; (b) June 16, 2001 (the "Expiration Date"); (c) upon one
year's prior written notice by Consultant; or (d) upon ten day's prior
written notice by Consultant at any time after the Company does not
satisfy its obligations in Section 4. Except for the Compensation and
Expenses set forth in Sections 3(b) and 4, below, and the "Options"
granted to Consultant pursuant to Section 3(a), below, the Company shall
have no further obligations to Consultant in the event that it or
Consultant elects to terminate Consultant's Consulting Services at any
time prior to June 16, 2001.
3. Compensation: In consideration for entering into this Agreement and
performing the Consulting Services, the Consultant and the Company agree
that the Consultant's sole compensation shall be:
(a) the grant of stock options to purchase Five Hundred Thousand (500,000)
shares of the Company's common stock, at $.05 per share pursuant to the
terms of the Stock Option Agreement, a form of which is attached hereto;
and
(b) compensation at an hourly rate for every hour of actual Consulting
Services performed by the Consultant at a rate of One Hundred and
Twenty-Five Dollars ($125.00) per hour ( the "Consulting Fees").
Consultant agrees to invoice the Company monthly for any Consultant Fees,
and the Company agrees to pay such invoices within thirty (30) days.
4. Registration of Shares: The Company shall register all the shares of
common stock which are subject to the Stock Option grant in Section 3(a)
by September 30, 1999. For purposes of this Agreement, the term
"register," "registered," and "registration" refer to a registration
effected by preparing and filing a registration statement or similar
document in compliance with the Securities Act of 1933, as amended (the
"Act"), and the declaration or ordering of effectiveness of such
registration statement or document.
5. Expenses: Consultant shall be entitled to prompt reimbursement for all
reasonable out-of-pocket expenses incurred by Consultant in the
performance of Consultant's Consulting Services hereunder upon submission
of appropriate voucher, receipts or other reasonable substantiation
thereof, including but not limited to travel, hotel, entertainment,
telephone, postage, photocopying and other expenses.
6. Independent Contractor: Consultant shall, at all times, render the
Consulting Services pursuant to this Agreement as an independent
contractor and not as an employee, agent or servant of the Company, nor
shall Consultant be deemed, by reason of this Agreement or the services
performed hereto, to be an employee of the Company for purposes of
withholding, employee payroll taxes, contributions, pensions, or
otherwise.
7. No Benefits: Except as expressly set forth herein, Consultant shall not,
as a result of Consultant Services to be rendered by him pursuant to this
Agreement, be eligible to receive and/or participate in any of the
employee benefits available to employees of the Company including,
without limitation, health or life insurance or benefits, vacation pay,
severance pay or bonus pools.
8. Confidentiality and Proprietary Information: Consultant agrees that:
(a) Consultant shall not at any time (during or after the term of this
Agreement) disclose or use, except in pursuit of the business of the
Company with the Company's permission, any Proprietary Information of the
Company acquired during the term of this Agreement. For purposes of this
Agreement the phrase "Proprietary Information" means all information
which is known or intended to be known only by Consultant, employees or
directors of the Company, and which is any document, record or other
information of the Company or others in a confidential relationship with
the Company which relates to specific business matters including the
Company's colorization process and any intended or contemplated
enhancements, modifications or upgrades thereto, such as patents, patent
applications, technical data, product development, software, equipment
modifications, capacities, trademarks copyrights, trade secrets, secret
processes, proprietary know-how, business strategies, information of the
Company's business, costs, pricing, personnel, suppliers, marketing plans
or identity of suppliers or customers or accounting procedures of the
Company. Consultant agrees not to remove from the premises of the Company
except in the pursuit of business of the Company any Proprietary
Information of the Company. Consultant recognizes that all such
Proprietary Information, whether developed by Consultant or by someone
else for the Company are the exclusive property of the Company; and
(b) The sale or unauthorized use or disclosure of any Proprietary Information
by any means whatsoever and any time before, during or after Consultant's
services to the Company hereunder shall constitute unfair competition.
Consultant agrees that Consultant shall not engage in unfair competition
either during the time that Consultant is engaged as an independent
contractor by the Company, or at any time thereafter.
(c) "Proprietary Information" used in this Section does not include
information which: (1) was known to Consultant prior to the disclosure by
the Company and not subject to a prior confidential relationship between
the parties; (2) is or becomes legally known and available to the public
prior to or subsequent to disclosure by Company; (3) was acquired by
Consultant from a third party who was lawfully in possession of the
information and under no obligation to maintain its confidentiality; or
(4) was independently developed by Consultant without utilizing
Proprietary Information.
9. Ownership: Consultant hereby acknowledges that all of the Proprietary
Information and materials are and shall continue to be the exclusive
proprietary property of the Company, whether or not prepared in whole or
in part by Consultant and whether or not disclosed to or entrusted to the
custody of Consultant. Consultant further hereby acknowledges that all
Proprietary Information and materials (to which Consultant has had access
or which Consultant has learned during Consultant's consulting), have
been disclosed to Consultant solely by virtue of Consultant's consulting
with the Company and solely for the purpose of assisting Consultant in
performing Consultant's duties for the Company.
10. Nondisclosure and Nonuse. Consultant hereby agrees that Consultant will
not, either during the course of his consulting with Company, or at any
time thereafter, disclose any Proprietary Information or materials of
Company, in whole or in part, to any person or entity, for an reason or
purpose whatsoever, unless Company shall have given its written consent
to disclosure. Consultant further agrees that Consultant shall not,
either during the course of Consultant's consulting with Company or at
any time thereafter use Proprietary Information: (a) in any manner other
than for and in the course of Consultant's furtherance of Company; (b)
for Consultant's own purposes; or (3) for the benefit of any person or
entity except Company; whether such use consists of the duplication,
removal, oral use or disclosure or the transfer of any unauthorized use
in whatever manner, unless Company shall have given its proper written
consent to such use.
11. New Developments. Consultant further agrees that during the course of
Consultant's Consulting Services, Consultant will promptly disclose to
Company any and all improvements, inventions, developments, discoveries,
innovations, systems, techniques, ideas, processes, programs and other
things which may be of assistance to Company, whether or not patentable
or copyrightable, arising during the term of this Agreement out of any
development, services or products made or conceived by Consultant in
pursuit of the business of the Company, alone or with others who are
employed by Company or other independent contractors engaged by the
Company (collectively referred to hereinunder as the "New Developments").
Consultant further agrees that all such New Developments shall be and
remain the sole and exclusive property of Company and that Consultant
shall, upon request of Company, and without further compensation, do all
lawful things reasonably necessary to ensure Company's ownership of such
New Developments including without limitation the execution of any
necessary documents assigning and transferring to Company and its assigns
all of Consultant's rights, title and interest in and to such New
Developments, and the rendering of assistance in execution of all
necessary documents required to enable Company to file and obtain patents
or copyright in the United States and foreign countries on any of such
New Developments.
12. Surrender of Material Upon Termination of Agreement:. Consultant hereby
agrees that, upon termination of this Agreement, for whatever reason and
whether voluntary or involuntary, or at any time at the request of
Company, Consultant will immediately surrender to Company all of the
property and other things of value in Consultant's possession, or in the
possession of any other person or entity under Consultant's control,
including without limitation all personal notes, drawings, manuals,
documents, photographs, or the like, and copies thereof, relating to any
Proprietary Information or materials or New Developments, or relating to
the business of the Company.
13. Solicitations of Employment: Upon termination of this Agreement,
Consultant hereby agrees not to induce or attempt to induce any person
who, at the time of termination of Consultant's employment, was an
officer, director, Consultant, principal or agent of Company, or any of
its affiliated companies to leave his or her employment, agency,
directorship or office with Company.
14. Board Approval: The Consultant's and the Company's obligations hereunder
are subject to and conditioned upon the Company's Board of Directors
approving, on or before January 31, 1999, this Agreement, and authorizing
the grant of the Options and the issuance of the shares of the Company's
common stock in connection with the exercise thereof (the "Board
Approval").
15. Non-Exclusive Agreement, Consultant's Obligations to Digital Video Art,
Inc. (DVA): The parties to this Agreement agree that Consultant's
Consulting Services rendered hereby shall be of a non-exclusive nature
and nothing contained herein shall prohibit Consultant from engaging in
any other business enterprise nor shall require Consultant to render more
than twenty (20) hours of service to the Company during any thirty (30)
day period. In addition to the foregoing, the parties hereto acknowledge
and agree that the Consulting Services which Consultant renders to the
Company may not violate the satisfaction of Consultant's existing
obligations and responsibilities to DVA or any of its subsidiary or
affiliated entities. The Company further acknowledges and agrees that in
the event it seeks to implement modifications or upgrades to its existing
patents, software, equipment or other New Developments, Consultant may
upon prior notice to the Company render such services through DVA.
16. Noncompetition. Except as prior or existing engagements and further work
with respect thereto by Consultant or DVA, during the term of this
Agreement, Consultant will not, directly or indirectly, either as an
employee, employer, consultant, agent, principal, partner, stockholder,
corporate officer, director or in any other individual or representative
capacity, engage or participate in any business that is in competition in
an manner whatsoever with the business of the Company as currently
contemplated, which is colorization, enhancement or restoration of
television or theatrical movies or other programming.
17. Remedies. Without acknowledging the amount, nature or extent of possible
damages in the event of a breach, prior to the actual occurrence of such
breach, Consultant hereby acknowledges and agrees that the services
rendered by Consultant to Company, and the information disclosed to
Consultant during and by virtue of Consultant's consulting, are of a
special, unique and extraordinary character, and the breach of any
provision of the Agreement will cause the Company irreparable injury and
damage, and consequently Company shall be entitled, in addition to all
other remedies available to it, to injunctive and equitable relief to
prevent a breach of this Agreement, or any part of it, and to secure the
enforcement of this Agreement.
18. Modification of Agreement: It is agreed that this Agreement may be
modified only by an express agreement between Consultant and CEO of
Company, and that any such modification must be in writing and signed by
both parties.
19. Severability. In the event that any one or more of the provisions
contained in this Agreement or in any other instrument referred to
herein, shall, for any reason, be held to be invalid, illegal or
unenforceable in any respect, then to the maximum extent permitted by
law, such invalidity, illegality or unenforceability shall not affect any
other provision of this Agreement or any other such instrument. If any
covenant should be deemed invalid, illegal or unenforceable because its
scope is considered excessive, such covenant shall be modified so that
the scope of the covenant is reduced only to the minimum extent necessary
to render the modified covenant valid, legal and enforceable. The parties
agree that there is separate consideration for each provision of this
Agreement and that all of the provisions of this Agreement are severable.
20. Entire Agreement: This Agreement is intended to set forth the entire
agreement regarding Consultant's position as an independent contractor
with the Company and cannot be changed or terminated orally. This
Agreement supersedes all prior negotiations or agreements, whether oral
or written regarding the terms and conditions of Consultant's position as
an independent contractor with the Company (including but in no way
limited to compensation and duration).
21. No Waiver: No waiver by any party hereto of a breach of any provision of
this Agreement shall constitute a waiver of any preceding or succeeding
breach of the same or any other provision hereof.
22. Governing Law: This Agreement shall be governed by, and construed and
enforced in accordance with, the laws of the State of California, without
regard to the conflicts of laws principles thereof with respect to
contracts wholly-negotiated and to be preformed in the State of
California.
23. Non-Assignability by Consultant: This Agreement, and Consultant's rights
and obligations hereunder, may not be assigned by Consultant except as
expressly set forth herein. The Company may assign its rights, together
with its obligations hereunder, to any affiliate, provided that the
obligations of the Company hereunder shall be binding on its successors
or assigns.
CAUTION: THIS AGREEMENT AFFECTS YOUR RIGHTS TO INNOVATIONS YOU MAKE DURING THE
TERM OF YOUR CONSULTING SERVICES, AND RESTRICTS YOUR RIGHT TO DISCLOSE OR USE
THE COMPANY'S PROPRIETARY INFORMATION DURING OR SUBSEQUENT TO THE TERM OF YOUR
CONSULTING SERVICES. CONSULTANT HAS READ THIS AGREEMENT CAREFULLY AND
UNDERSTANDS ITS TERMS AND HAS RECEIVED A COPY OF WRITTEN NOTIFICATION TO
CONSULTANT CONTAINING CALIFORNIIA LABOR CODE SECTION 2870.
/s/ Xxxxxxx Xxxxx
--------------------------------------
(Consultant)
1/7/99
----------------
(date)
/s/ Xxxxxx X. Xxxxxxx
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(American Film Technologies, Inc.)
Chairman and CEO
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(title)
1/7/99
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(date)
