EXHIBIT 10.34
CONFIDENTIALITY, INVENTIONS AND
NONCOMPETE AGREEMENT
CONFIDENTIALITY, INVENTIONS AND NONCOMPETE AGREEMENT (this "Agreement"),
dated as of January 9, 2004, made by Xxxx X. Xxxxxx ("Employee") in favor of
Access Integrated Technologies, Inc., a Delaware corporation (the "Company").
BACKGROUND
WHEREAS, it is recognized by the Employee that the day-to-day performance
of his or her duties while in the employment of the Company is likely to give or
require access to confidential Company records and sources of information and to
bring Employee into contact with others engaged in confidential work for the
Company;
WHEREAS, it is further recognized by the Employee that by reason of being
employed by the Company, Employee may create or develop intellectual property
(including inventions, ideas, discoveries, trade secrets and copyrightable
works) resulting from or arising out of the work performed by Employee within
the scope of Employee's responsibilities, or with the Company's facilities,
equipment or supplies, or resulting from Employee's use or knowledge of
confidential or trade secret information which is proprietary to the Company;
and
WHEREAS, the Employee has agreed to be bound by the non-competition
provisions of Section 5 hereto in connection with the sale of all of the issued
and outstanding shares of capital stock of the Company pursuant to that certain
Stock Purchase Agreement, dated January 9, 2004, between and among the Company,
Core Technology Services, Inc. and Xxxx X. Xxxxxx (the "Purchase Agreement").
Unless otherwise defined herein, capitalized terms used herein shall have the
meanings ascribed to them in the Purchase Agreement.
NOW, THEREFORE, in consideration of employment by the Company and of
prospective assignments to work on confidential matters, which Employee
acknowledges is sufficient consideration for this Agreement, Employee agrees to
the following continuing obligations:
1. CONFIDENTIALITY. During the period of Employee's employment with the
Company, Employee agrees, except in the course of Employee's duties on behalf of
the Company:
(a) to keep secret and treat confidentially all confidential
information of the Company pertaining to Company customers and prospective
customers, customer requirements, customer financial information, and other
such confidential information compiled or maintained internally by the
Company concerning its customers and prospective customers; and
(b) to keep secret and treat confidentially all confidential
information of the Company pertaining to Company products, costs, marketing
plans and contemplated activities, financial matters, research and
development, production, engineering, product design, and other such
confidential information compiled or maintained internally by the Company
concerning its business, operations and activities; by way of illustration,
but not limitation, confidential information includes inventions,
processes, formulae, data, computer programs (whether in source or object
code form) and all information relating to programs now existing or under
development, computer program listings, know-how, improvements,
discoveries, developments, designs, techniques, marketing plans,
strategies, forecasts, new products, unpublished financial statements,
budgets, projections, licenses, prices, costs, customer and supplier lists
and compilations of information. For purposes of this Agreement,
confidential information does not include information (i) which is or
becomes generally known to the public or within the industry or industries
in which the Company operates (other than through a breach of this
agreement); (ii) made available to Employee by a person or entity not
affiliated with the Company; provided, that such party is not under any
obligation of -------- confidentiality to the Company which is known to
Employee; or (iii) required by law or court order to be disclosed;
provided, -------- that Employee shall give the Company prompt written
notice of any such legal or judicial process requiring disclosure of
confidential information and shall reasonably cooperate with the Company at
the Company's expense, in any lawful action which the Company desires to
take to limit the disclosure required by such legal or judicial process and
shall permit to attempt, by appropriate legal means to limit and/or delay
such disclosure.
2. CONFIDENTIALITY UPON TERMINATION. Upon termination of Employee's
employment with the Company, whether voluntary or involuntary and for whatever
reason, Employee agrees:
(a) to promptly return to the Company any and all documents made or
obtained by Employee in the course of his or her employment pertaining to
or containing any of the confidential information of the Company referred
to in Section 1 above; and
(b) for a period of five (5) years thereafter, to keep confidential
and to make no written record of confidential information of the Company
referred to in Section 1 above, and to make no use or disclosure thereof
adverse to the interests of the Company in any geographic area in which
Company interests would be damaged by such use or disclosure.
3. CONFIDENTIAL RELATIONSHIP.Employee acknowledges that this Agreement
provides notice that the Company regards it to be vital to its interest that its
confidential information and trade secrets be safeguarded by its employees.
Employee understands that this Agreement establishes a confidential relationship
between Employee and the Company, and that Employee has a duty under the law not
to breach the confidential relationship by using or disclosing Company
confidential information and trade secrets. Employee further understands that
the Company relies upon Employee honoring such duty of confidence when the
Company entrusts Employee with access to the Company's confidential information
and trade secrets.
4. INVENTION DISCLOSURE AND ASSIGNMENT.
4.1 During the period of Employee's employment with the Company, Employee
agrees to report to the Company fully and promptly in writing, all intellectual
property (including inventions, ideas, discoveries, technical or business
innovations and works of authorship, patentable or unpatentable, trade secrets
and copyrightable works) which is made, developed, conceived or reduced to
practice by Employee either solely or jointly with others resulting from or
arising out of the work performed by Employee, within the scope of his
responsibilities, or with the Company's facilities, equipment or supplies, or
which results from his or her use or knowledge of confidential or trade secret
information which is proprietary to the Company.
4.2 Upon termination of Employee's employment with the Company, and for a
period of one (1) year thereafter, Employee agrees to report to the Company
fully and promptly in writing, all intellectual property (including inventions,
ideas, discoveries, technical or business innovations and works of authorship,
patentable or unpatentable, trade secrets and copyrightable works) which is
reduced to practice by Employee either solely or jointly with others, wherever
such intellectual property reasonably results from the work performed by
Employee during employment by the Company within the scope of his or her
responsibilities, or with the Company's facilities, equipment or supplies, or
results from his or her use or knowledge of confidential or trade secret
information which is proprietary to the Company.
4.3 Employee agrees to hold all such intellectual property described in
this Section 4 for the benefit of the Company and not to assign nor attempt to
assign any rights therein to anyone other than the Company.
4.4 Employee agrees to assign to the Company upon its request and without
further compensation all rights, title and interest in such intellectual
property described in this Section 4 to which the Company is entitled as set
forth in this Section 4 at any time, whether during or subsequent to Employee's
period of said employment. Employee agrees to execute and deliver in a prompt
manner all proper documents provided by the Company and presented to Employee
including those necessary and attendant to domestic and foreign patent
applications, including, but not limited to, divisional, continuation,
continuation-in-part, substitute and/or reissue applications, and all other
instruments for the perfection of intellectual property rights, including
related registrations of issued patents, design patent applications and
registrations, applications for utility models and industrial models and
copyrights, as well as formal assignments thereof. The Company will pay all
reasonable out-of-pocket expenses incurred by Employee in perfecting the
Company's rights as they relate to assisting the Company in all proper ways in
the acquisition and preservation of the rights to such intellectual property as
described in this subsection 4.4 and will pay Employee a reasonable hourly rate
for Employee's post-employment efforts in perfecting such intellectual property.
4.5 Except as disclosed on Schedule 4.5 attached hereto, Employee covenants
that there are no unpatented inventions, discoveries, ideas, technical or
business innovations and works of authorship or information currently held by
Employee which are to be outside the scope of this agreement.
4.6 The Employee recognizes that this Agreement does not require assignment
of any invention which he has developed entirely on the Employee's own time
without using the Company's equipment, supplies, facilities, or trade secret
information except for those inventions that either:
(a) relate at the time of conception or reduction to practice of the
invention to the Company's business, or actual or demonstrably anticipated
research or development of the Company; or,
(b) result from any work performed by the Employee for the Company.
4.7 The Employee acknowledges that all original works of authorship which
are made by the Employee (solely or jointly with others) within the scope of his
employment and which are protectable by copyright are "works made for hire," as
that term is defined in the United States Copyright Act (17 U.S.C., Section 101)
and belong to the Company. The Employee hereby further waives any moral rights
he may otherwise claim on such works of authorship and copyright.
5. NON-COMPETITION; NON-SOLICITATION.
5.1 Subject to the provisions of Section 8 of the Purchase Agreement,
during the term of Employee's employment by the Company and for a period of five
(5) years thereafter, the Employee will not directly or indirectly:
(a) engage in any business or activity that competes with the
Business, anywhere in the United States or Canada;
(b) enter the employ of any person or entity engaged in any business
or activity that competes with the Business or render any consulting or
other services to any person or entity for use in or with the effect of
competing with the Business;
(c) have an interest in any business or activity that competes with
the Business, in any capacity, including, without limitation, as an
investor, partner, stockholder, officer, director, principal, agent,
employee, or creditor; provided, however, that nothing herein shall prevent
the purchase or ownership by the Employee of less than 3% of the
outstanding equity securities of any class of securities of a company
registered under Section 12 of the Securities and Exchange Act of 1934, as
amended;
(d) recruit, solicit or induce, or attempt to recruit, solicit or
induce, any employee or employees of the Company to terminate their
employment with, or otherwise cease their relationship with, the Company;
or
(e) solicit, divert or take away, or in any manner persuade or attempt
to persuade any of the clients, customers or accounts, or prospective
clients, customers or accounts of the Company which were contracted,
solicited or served by the Employee while employed by the Company to
discontinue, cease or alter his, her or its relationship with the Company.
5.2 If any restriction set forth in this Section 5 is found by any court of
competent jurisdiction to be unenforceable because it extends for too long a
period of time or over too great a range of activities or in too broad a
geographic area, it shall be interpreted to extend only over the maximum period
of time, range of activities or geographic area as to which it may be
enforceable.
5.3 The restrictions contained in this Section 5 are necessary for the
protection of the business and goodwill of the Company and are considered by
Employee to be reasonable for such purpose. In addition, Employee acknowledges
that Employee's education, background, skills, and experience are such that the
enforcement of the restrictions in this Section 5 will not unreasonably
interfere with Employee's ability to earn a living. Employee agrees that
Severance paid to him constitutes consideration in respect of his obligations
hereunder with respect to the periods covered thereby, including, without
limitation, periods subsequent to his employment.
6. MISCELLANEOUS.
(a) All of the covenants and provisions herein contained are
severable; in the event that any of said covenants or provisions shall be
held by any court of competent jurisdiction to be invalid or unenforceable,
this agreement shall be construed as if any such invalid or unenforceable
covenant or provision were not herein contained. Employee acknowledges and
agrees that any breach by Employee of any provision of this Agreement would
cause irreparable injury to the Company and could not be remedied solely by
monetary damages. In addition to any other available remedies in enforcing
this agreement, the Company shall be entitled to equitable relief,
including, without limitation, injunctive relief and specific performance,
without proof of actual damages. No delay or omission by the Company in
exercising any right under this agreement shall operate as a waiver of that
or any other right. A written waiver or consent given by the Company on any
one occasion shall be effective only in that instance and shall not be
construed as a bar or waiver of any right on any other occasion.
1
(b) This Agreement shall be governed by and construed in accordance
with the laws of the State of New Jersey. Employee agrees that
notwithstanding Employee's place of residence at the time of or subsequent
to any breach by undersigned of this agreement, that he or she shall be
subject to suit in the state or Federal courts located in the state of New
Jersey.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the undersigned has executed this Confidentiality,
Inventions and Noncompete Agreement as of the day and year first above written.
Employee:
/s/ Xxxx X. Xxxxxx
--------------------------------
Name: Xxxx X. Xxxxxx
SCHEDULE 4.5
Unpatented inventions, discoveries, ideas, technical or business
innovations and works of authorship or information currently held by Employee
that are outside the scope of this Agreement.
