CONFIDENTIALITY AND INVENTIONS AGREEMENT
This
Agreement is
entered into as of December 26, 2002 between The Small Business Company
(“Company”), and Xxxxxx Xxxxxxxxx (“Employee”).
INTRODUCTION
In
connection with this employment, Employee has had, or will have, access to
certain confidential information and trade secrets of the Company, and may
in
the course of employment with the Company participate in discovering or
conceiving an invention.
As
a condition of Employee’s employment or continued employment, and effective as
of the date that Employee’s employment first commenced, Employee agrees as
follows:
AGREEMENT
1.
Definitions
As
used in this Agreement, the following terms shall have the following
meanings:
“Agreement”
means
this Agreement and any attachments hereto, and any modifications that are made
to this Agreement in accordance with the terms hereof.
“The
Company” means
The Small Business Company.
“Employee’s
employment” means Employee’s employment with the Company.
“Invention”
means
any invention, discovery, know-how, idea, trade secret, technique, formula,
machine, method, process, use, apparatus, product, device, composition, code,
design, program, confidential information, proprietary information, or
configuration of any kind, which is discovered, conceived, developed, made
or
produced by Employee (alone or in conjunction with others) during the duration
of Employee’s employment, and which:
| a) |
Relates
at
the time of conception or reduction to practice of the Invention,
in any
manner, to the business of the Company, including actual or demonstrably
anticipated research or development;
or
|
| b) |
Results
from
or is suggested by work performed by Employee for or on behalf of
the
Company; or
|
| c) |
Results,
in
whole or in part, from the use of equipment, supplies, facilities,
information, time or resources of the
Company.
|
The
term
“Invention” shall also include any improvements to an Invention. The term
“Invention” shall not be limited to the definition of a patentable or
copyrightable invention as contained in the United States patent or copyright
laws.
“Information”
means
(1) all information encompassed in all Inventions, and (2) all forms and types
of financial, business, scientific, technical, economic, sales, marketing or
engineering information of the Company that is not generally available to the
public at large with the knowledge and consent of the Company, regardless of
whether such information would be enforceable as a trade secret or the copying
of which would violate copyright or patent laws or be enjoined or restrained
by
a court as constituting unfair competition. Information shall be interpreted
broadly, and includes, without limitations, strategic and business plans,
financial information, sales information, projections, pricing information,
proposals, client lists, customer lists, prospect lists, research, experiments,
records, reports, recipes, formulas, recommendation, manuals, policies,
findings, evaluations, forms, computer algorithms, designs, drawings,
specifications, evaluations, computer programs, prototypes, methods, processes,
procedures, research and development efforts, business opportunities, software
or other confidential information or proprietary property, and whether stored,
complied, or memorialized physically, electronically, photographically, or
in
writing.
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2.0
Inventions
2.1
Disclosure.
Employee shall
disclose promptly to the Company each Invention, whether or not reduced to
practice, which is conceived or learned by Employee (either alone or jointly
with others) during the term of Employee’s employment. Further, Employee shall
disclose in confidence to the Company all patent applications filed by or on
behalf of Employee during the term of Employee’s employment and for a period of
three years thereafter.
2.2
The
Company Property; Assignment.
Employee
acknowledges and agrees that all Inventions made, written, discussed, developed,
secured, obtained or learned by Employee during the term of the relationship
and
the 60-day period immediately following termination of the relationship shall
be
the sole property of the Company, including without limitation all domestic
and
foreign patent rights, rights of registration or other protection under the
copyright laws, or other rights, pertaining to the Inventions. Employee further
agrees that all services, products and Inventions that directly or indirectly
result from engagement with the Company shall be deemed “works for hire” as that
term is defined in Title 17 of the United States Codes and accordingly all
rights associated therewith shall vest in the Company. Notwithstanding the
foregoing, Employee hereby assigns all Employee’s right, title and interest in
any such services, products and Inventions to the Company, in the event any
such
services, products and Inventions shall be determined not to constitute “works
for hire.”
2.3
Exclusion
Notice.
Employee is not
required to assign an idea or invention for which all
of the following
are applicable:
| a) |
No
equipment,
supplies, facility, or trade secret information of the Company were
used
and the invention or idea was developed entirely on Employee’s own time,
and
|
| b) |
The
invention
or idea does not relate to the business of the Company, and
|
| c) |
invention
or
idea does not relate to the Company’s actual or demonstrably anticipated
The research or development, and
|
| d) |
The
invention
or idea does not result from any work performed by Employee for the
Company.
|
2.4
Time
of
Invention;
Presumption. For
the purpose of this Agreement, an Invention is deemed to have been made during
the term of Employee’s employment if the Invention was conceived or first
actually reduced to practice during the term of such employment. Employee agrees
that any disclosures of an invention or any patent application made within
one
year after termination of Employee’s employment shall be presumed to relate to
an Invention which was made during the term of Employee’s employment unless
Employee provides compelling evidence to the contrary.
2.5
Patents
and
Copyrights; Attorney-in-Fact.
Employee hereby
irrevocably appoints the Company, and its duly authorized officers and agents,
as Employee’s agent and attorney-in-fact to act for Employee in filing all
patent applications, applications for copyright protection and registration
amendments, renewals, and all other appropriate documents in any way related
to
the Inventions. In addition, Employee agrees to assist the Company in any way
the Company deems necessary or appropriate (at [Company’s] expense) from time to
time to apply for, obtain and enforce patents on , and to apply for, obtain
and
enforce copyright protection and registration of, the Inventions in any and
all
countries. To that end, Employee shall (at [Company’s] request) without
limitation, testify in any suit or other proceeding involving any of the
Inventions, execute all documents which the Company reasonably determines to
be
necessary or convenient for use in applying for and obtaining patents or
copyright protection and registration thereon and enforcing same, and execute
all necessary assignments thereof to the Company or parties designated by it.
Employee’s obligation to assist the Company in obtaining and enforcing patents
or copyright protection and registration for the Inventions shall continue
beyond the termination of Employee’s employment. During Employee’s employment,
the Company shall not be required to provide Employee any additional
compensation for services provided for in this section. [Company’s] obligation
to compensate Employee following termination of Employee’s employment for
Employee’s compliance with this section shall be limited to a reasonable rate
per hour (not to exceed the equivalent of Employee’s hourly rate, computed on
the basis of Employee’s base salary as of the date of termination) for time
actually spent by Employee on such assistance at [Company’s] written
request.
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3.0
Use
of the
Company Information
3.1
Acknowledgment
of Proprietary Interest in Information.
Employee
acknowledges and agrees that any and all Information, whether developed by
Employee alone or in conjunction with others, or by other the Company employees,
or otherwise acquired by the Company, is the sole and exclusive property of
the
Company. Employee hereby disclaims any proprietary interest in any such
Information.
3.2
Confidentiality
Obligation.
Employee
acknowledges and agrees that the Company is entitled to prevent the disclosure
of Information. Accordingly, in consideration of the Company’s agreement to
employ Employee and pay Employee compensation for services rendered, Employee
agrees at all times during employment with the Company and thereafter to hold
in
strictest confidence, and not to disclose or allow to be disclosed to any
person, firm, or corporation, other than to persons engaged by the Company
to
further the business of the Company, and in any case, not to disclose, use,
copy, publish, summarize, or remove from the premises of the Company any
Information, including Information developed by Employee except (a) as necessary
to carry out my assigned responsibilities as an the Company employee, and (b)
after termination of employment, only as specifically authorized in writing
by
an officer of the Company.
3.3
Return
of
Materials at Termination.
In the event of
the termination, for any reason, of Employee’s employment, Employee will
promptly deliver to the Company all documents, data, and other information
pertaining to Inventions and Information; and Employee shall not take any
documents, or other information, or any reproduction or excerpt thereof,
containing or pertaining to any Information or Inventions.
4.
Confidential
Information of Others
Employee
acknowledges the existence of the Economic Espionage Act, 18 U.S.C. § 1831 et
seq. (“EEA”), which prohibits Employee from misappropriating trade secrets of
others for the economic benefit of the Company. Employee agrees, as a condition
of employment with the Company, to comply with the provisions of the EEA. If
Employee possesses any confidential, trade secret or proprietary information
or
documents belonging to others, Employee will not use, disclose to the Company
or
induce the Company to use, any such information or documents during employment
by the Company, and will not bring onto the Company premises any unpublished
document or any other property belonging to any former employer or third parties
without the written consent of the affected party. Employee represents and
warrants that employment by the Company will not require Employee to violate
any
obligation to or confidence with any other party, and that Employee has not
as
of the date of signing this Agreement, provided to any employee or agent of
the
Company any trade secret, confidential or proprietary information of
others.
5.
Business
Opportunities
During
the terms of
this Agreement, if Employee becomes aware of any project, investment, venture,
business or other opportunity (any of the preceding, collectively referred
to as
an “Opportunity”) that is similar to, competitive with, related to, or in the
same field as Employer, or any project, investment, venture, or business of
Employer, then Employee shall so notify Employer immediately in writing of
such
Opportunity and shall use Employee's good-faith efforts to cause Employer to
have the opportunity to explore, invest in, participate in, or otherwise become
affiliated with such Opportunity.
6.
Non-Filing
Employee
specifically agrees that Employer’s rights granted hereunder shall include the
right not to file for copyrights or domestic or foreign patents when such is
considered by Employer in its sole discretion appropriate for the business
objectives of Employer.
7.
Non-Competition
Employee
agrees
that, during employment with the Company, Employee will not directly or
indirectly compete with the Company in any way, and will not act as an officer,
director, employee, consultant, lender, or agent of any entity which is engaged
in any business of the same nature as, or in competition with, the business
in
which the Company is now engaged or in which the Company becomes engaged during
the term of Employee’s employment. Employee further agrees to perform for the
Company such duties as it may designate from time to time, and will devote
his
or her full time and best efforts to the business of the Company.
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8.
Non-Solicitation
Employee
agrees
that during Employee’s employment with the Company and for two years (2) years]
following the termination, for any reason, of employment, Employee shall not,
either on Employee’s behalf or on behalf of any other person or entity, directly
or indirectly (i) hire, solicit or encourage or induce any employees, directors,
consultants, contractors or subcontracts to leave the employ of the Company,
or
(ii) solicit, induce, encourage or entice away or divert any person or entity
which is then a customer of the Company and which was a customer of the Company
during the time of Employee’s employment.
9.
Employment
At-Will
|
Nothing
in
this Agreement is intended to alter Employee’s status as an at-will
employee. Accordingly, notwithstanding any other term of this Agreement,
either Employee or the Company may terminate Employee’s employment for any
reason, at any time, with or without notice. Similarly, Employee
may
terminate their employment at any time, for any reason and without
notice.
The at-will nature of Employee’s employment can be changed only by a
written agreement signed by an officer of the
Company.
|
10.0
General
Provisions
10.1
Entire
Agreement.
This Agreement
represents the entire agreement between Employee and the Company with respect
to
the subject matter hereof, superseding all previous oral or written
communications, representations, understandings or agreements relating to this
subject. This Agreement may be changed only by a written agreement signed by
an
officer of the Company.
10.2
Successors
and
Assigns.
The rights and
remedies of the Company under this Agreement shall inure to the benefit of
the
successors, assigns and transferees of the Company. Employee shall have no
right
to assign, transfer or otherwise dispose of his right, title and interest in
and
to any part of this Agreement or to assign the burdens hereof, without the
prior
written consent of the Company.
10.3
Remedies
Upon
Breach.
Employee
acknowledges and agrees that damages will not be an adequate remedy in the
event
of a breach of any of Employees obligations under this Agreement. Employee
therefore agrees that the Company shall be entitled (without limitation of
any
other rights or remedies otherwise available to it and without the necessity
of
posting a bond) to obtain an injunction from any court of competent jurisdiction
prohibiting the continuance or recurrence of any breach of this Agreement.
The
failure of the Company to promptly institute legal action upon any breach of
this Agreement shall not constitute a waiver of that or any other breach hereof.
This provision supersedes and controls over any language set forth in an
arbitration agreement with regards to the subject matter of this agreement
only.
10.4
Attorneys’
Fees.
In the event of
any litigation concerning any controversy, claim or dispute between the parties
hereto, arising out of or relating to this Agreement or the breach hereof,
or
the interpretation hereof, the prevailing party shall be entitled to recover
from the losing party reasonable expenses, attorneys’ fees, and costs incurred
therein or in the enforcement or collection of any judgment or award rendered
therein. The “prevailing party” means the party determined by the court to have
prevailed, even if such party did not prevail in all matters, not necessarily
the one in whose favor a judgment is rendered. Further, in the event of any
default by a party under this Agreement, such defaulting party shall pay all
the
expenses and attorneys’ fees incurred by the other party in connection with such
default, whether or not any litigation is commenced.
10.5
Severability.
The illegality,
unenforceability or invalidity of any one or more covenants, phrases, clauses,
sentences or paragraphs of this Agreement, as determined by a court of competent
jurisdiction, shall not affect the remaining portions of this Agreement, or
any
part thereof; and in case of any such illegality, unenforceability or
invalidity, this Agreement shall be construed as if such illegal, unenforceable
or invalid covenants, phrases, clauses, sentences or paragraphs, had not been
inserted.
10.6
Survivability.
The terms and
conditions of this Agreement shall survive the termination of Employee’s
Employment.
10.7
Waiver.
The waiver by the
Company of a breach of any provision of this Agreement shall not operate or
be
construed as a waiver of any subsequent breach of the same or any other
provision hereof.
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10.8
Applicable
Law.
The laws of the
United States of America and the State of California shall govern this
Agreement. Employee hereby submits to the jurisdiction and venue of the courts
of the State of California, County of San Diego, and expressly waives any
objections to jurisdiction, or venue. Employee further agrees that service
upon
Employee in any such action or proceeding may be made by first class mail,
certified or registered, to Employee’s address as last appearing on the records
of the Company.
10.9
Drafting
Ambiguities.
Each party to
this Agreement has reviewed and had the opportunity to revise this Agreement.
Each party to this Agreement has had the opportunity to have legal counsel
review and revise this Agreement. The rule of construction that any ambiguities
are to be resolved against the drafting party shall not be employed in the
interpretation of this Agreement or of any amendments or exhibits to this
Agreement.
10.10
Notices.
Any notices
provided by one party to the other under the terms of this Agreement shall
be
hand-delivered or mailed by certified mail to the following, or to such other
recipients as that party may designate, in writing:
IN
WITNESS WHEREOF, the parties hereto duly executed this Agreement as of the
date
first above written.
| The Small Business Company | Employee | ||
| /s/ Xxxxx X. Xxxxxx | /s/ Xxxxxx Xxxxxxxxx | ||
|
By: Xxxxx X. Xxxxxx, COO |
Xxxxxx Xxxxxxxxx |
||
| Date: 12/26/02 | Date: 12/26/02 |
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