SEPARATION AGREEMENT
Exhibit 10.11
Separation Agreement between Skye and Xxxx Xxxxxxxx
This
Separation Agreement (“Agreement”) is entered into this 20th
day of
May 2005, by and between Tankless Systems Worldwide, Inc., a Nevada corporation
(the “Company”), and Xxxxxxx X. Xxxxxxxx (“Employee”).
WHEREAS,
the
Employee has provided (i) valuable business and operational services to the
Company and its affiliated entities for a substantial period of time and (ii)
advice to the Company and its affiliated entities in connection with its
business, namely water heating appliances for homes (the “Business”);
and
WHEREAS,
Employee’s advice and assistance has been instrumental and valuable in designing
and developing a new line of products for the Company; and
WHEREAS,
the
efforts, services and contributions of Employee have enhanced the Company’s
ability to sell product, provide warranty services to its customers, increase
the value of its stock and to generally improve the conduct its business;
and
WHEREAS,
Employee has acted diligently, efficiently and in good faith in the performance
of the services to the Company and has observed a duty of loyalty to the Company
and its affiliates in relation to communications with employees, customers,
clients and other business contacts and business relations of the Company and
all services, work and work product have been professional in quality and
responsive to the mandate of the needs of the Company; and
WHEREAS,
the
Company, as an inducement to Employee to assist the Company in its Business,
agreed to further compensate Employee at such time as the Company had applied
for patents with respect to new technologies and had commenced plans to produce
new products based on such proprietary technologies, which conditions precedent
have now been satisfied; and
WHEREAS,
the
parties desire to terminate their relationship such that Employee will no longer
be performing any services for the Company; and
WHEREAS,
the
parties desire to resolve any and all claims or disputes that may exist between
one another and release one another from any future claims;
NOW,
THEREFORE,
for
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and the covenants contained herein, the parties hereto agree
as
follows:
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1. Issuance
of Stock for Services.
In
consideration of services heretofore rendered by Employee to the Company which
have not otherwise been compensated in any manner, the Company hereby agrees
to
issue to Employee Two Hundred Fifty Thousand (250,000) shares of the Company’s
Common Stock, $0.001 par value, which shares shall be restricted pursuant to
the
provisions of Rule 144 of the Securities Act of 1933 (“Shares”). The Shares
shall be issued upon the execution of this Agreement and, when issued, shall
be
deemed validly issued, fully paid and non-assessable. The Shares shall be in
full and complete payment of all services rendered to the Company and all
expenses incurred by Employee in any manner relating to the Company, or any
of
its affiliates, prior to the date of this Agreement. Such compensation shall
be
deemed fully earned when paid and no portion shall be subject to refund or
return to the Company.
2. Agreed
Value of Shares.
All
Shares issued in satisfaction of this Agreement shall be deemed to have a stated
fair market value of $0.05 per share (which price was not arbitrarily
determined, and takes into consideration the current price of the Company’s free
trading shares and the restrictions placed on the Shares issued, the financial
condition of the Company and its operations at the time of execution of this
Agreement, and the fact that the public market for such stock has been
substantially illiquid for some time and subject to dramatic changes based
on
volume).
3. Release
and Indemnity.
Except
for the performance of obligations contained in this Agreement, Employee, for
himself and on behalf of any other party claiming by, through or under him,
hereby releases, remises, discharges, waives and forgives the Company and each
of its affiliated entities, and their respective past, present and future
officers, directors, shareholders, owners, employees, agents, representatives,
attorneys, accountants, Employees, contractors, affiliates, predecessors,
successors and assigns (collectively, the “Released Parties”), from and against
all rights and claims Employee may have against any of the Released Parties
arising out of, or by reason of, any cause, matter, or thing whatsoever existing
as of the date of this Agreement, whether known to the parties at the time
of
the execution of this Agreement or not. Employee hereby agrees to indemnify
and
save harmless the Released Parties from any actions, causes of action, claims,
demands, damages, costs and expenses, including reasonable attorneys’ fees,
incurred by or demanded from the Released Parties directly or indirectly arising
out of or resulting from any act or omission made by Employee or Employee’s
employees, agents or subcontractors.
4. Disclosure
of Inventions, etc.
Employee shall promptly disclose to the Company, in writing and form
satisfactory to the Board of Directors thereof, all discoveries, developments,
improvements and innovations, whether or not patentable, (hereinafter referred
to as “Inventions”) conceived, developed, created, made or reduced to practice
by the Employee prior to or following the date hereof so long as Employee shall
be affiliated with the Company or any of its affiliates, which are in any way
related to the business of the Company and whether conceived or made during
regular working hours or any other time. The Employee shall likewise disclose
to
the Company any such Inventions conceived or made by others which may be of
benefit to the Company, the knowledge of which the Employee obtained during
the
term hereof.
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5. Assignment
of Inventions, etc.
Employee hereby assigns, transfers and conveys all of his rights, title and
interest to or in any and all such Inventions to the Company. Employee further
agrees to execute such documents and to perform such other actions and
activities, at the expense of the Company, as may be necessary or desirable
as
determined by the Company’s Board of Directors thereof: (i) for the filing of
patent applications and issuance of patents (both domestic and foreign) for
such
Inventions; and (ii) to complete exclusive ownership by the Company of such
Inventions and patent applications and patents. It is mutually understood and
agreed that the term “Inventions” as used herein shall be construed to include
all forms of intellectual property and the term “patent” as used herein shall be
interpreted to include all forms of intellectual property protection, including,
without limitation, patents, copyrights, international copyrights and literary
property.
6. Confidentiality
and Non-Disclosure.
Employee understands and acknowledges that the Company and its affiliates have
developed and rely on contacts, confidential information and trade secrets
relating to the business and affairs of the Company and its affiliates and
that
such information is the sole and exclusive property of the Company
(“Confidential Information”). The Confidential Information includes matters
known to the Company and its Affiliates prior to the date of this Agreement
as
well as matters newly acquired by the Company and its affiliates during the
term
of this Agreement. Employee agrees to hold all Inventions and Confidential
Information as trade secrets and proprietary information of the Company and
further warrants never to use any such Inventions or Confidential Information
to
compete with or against the Company either during the term of this Agreement
or
at any time thereafter. Employee shall hold in confidence, not use, except
for
the benefit of the Company, and not disclose to anyone without prior written
authorization by the Company, any and all Confidential Information, written,
oral or otherwise, relating to the Inventions or the business or operations
of
the Company, or its clients or customers, including, without limitation,
scientific or technical information, market or marketing information, personal
contacts, designs, processes, procedures, formulas or improvements which
Employee may obtain prior to, during or subsequent to the term of this
Agreement. Employee further agrees to hold and use articles representing or
disclosing said Inventions and Confidential Information only in such manner
as
would benefit and protect the Company including holding such information in
confidence until the release thereof is authorized by the Company’s Board of
Directors. Employee shall deliver or return to the Company, upon its request,
all information in tangible form which Employee received from the Company
including all copies thereof. Employee further warrants that during the term
hereof he will maintain full fidelity to the stockholders of the Company and
guard and protect the interests thereof with the same prudence and diligence
as
he would his own. Title in any information or data received from the Company,
including all copies thereof, shall be in and remain with the Company at all
times. Except as otherwise expressly provided herein, the provisions of this
paragraph shall be effective and remain in full force and effect for a period
of
five (5) years from the date hereof.
7. Non-Competition
Restriction.
Employee
recognizes and understands that his position with the Company and his access
to
protected information will enable Employee to compete with the Company on
an
unfair basis, thereby damaging the Company and the Company’s goodwill. Because
the Company’s goodwill is a valuable and unique asset and because of the highly
technical and proprietary nature of the Company’s business, it is necessary to
afford the Company fair protection for that asset and its business. Accordingly,
and as a material inducement for the Company to hire Employee and pay Employee
the salary and other benefits associated with Employee’s employment, Employee
covenants and agrees that commencing on the date of this Agreement and
continuing for a period of one (1) year from the date hereof, Employee will
not
directly, or indirectly, either as a consultant, owner, independent contractor,
officer, director, principal, agent, trustee or through the agency of any
individual or entity, engage in the water heater or water heating systems
business within the United States or within any territory where the Company
has
water heater contracts. Although the Company anticipates an international
clientele and possesses a legitimate interest in protecting goodwill in that
geographic territory, the geographic scope of this non-competition covenant
will
be limited to locations in which the Company sells its products and services
as
well as the entire United States of America.
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8. Disclosure
to Media.
Employee agrees not to advertise or make any public announcements to the media
or to others regarding the existence of this Agreement or the performance
hereunder without the prior written approval of the Company.
9. Non-Disparagement.
Employee agrees that neither he, nor any person or entity in active concert
or
participation with him or who is acting under his direction, will make any
statement or otherwise communicate with anyone (including, but not limited
to,
any vendors, suppliers, business affiliates and associates, partners, employees,
shareholders, Employees, advisors, distributors, sales representatives,
customers, underwriters, attorneys and agents) in a manner that is disparaging
to the Company or any of the Released Parties.
10. Injunctive
Relief.
Employee agrees that the breach by him of any of the foregoing covenants
contained in paragraphs 5 through 9 hereof is likely to result in irreparable
harm, directly or indirectly, to the Company and therefore Employee consents
and
agrees that if he violates any of such obligations, the Company shall be
entitled, among and in addition to any other rights or remedies available
hereunder or otherwise, to temporary and permanent injunctive relief to prevent
Employee from committing or continuing a breach of such
obligations.
11. Severability,
Reformation.
It is
the desire, intent and agreement of the parties hereto that the restrictions
placed upon Employee by paragraphs 5 through 10 hereof shall be enforced to
the
fullest extent permissible under the law and public policy applied by any
jurisdiction in which enforcement is sought. Accordingly, if, and to the extent
that, any portion of the covenants contained in these paragraphs shall be
adjudicated to be unenforceable, such portion shall be deemed amended to delete
therefrom or to reform the portion thus adjudicated to be invalid or
unenforceable, such deletion or reformation to apply only with respect to the
operation of such portion in the particular jurisdiction in which such
adjudication is sought.
12. Attorneys’
Fees, etc.
If it
shall be necessary for either party to place this Agreement in the hands
of an
attorney at law for enforcement of any of the provisions hereof, the
non-prevailing party in such matter shall be liable to the prevailing party
for
all costs, expenses and reasonable attorney’s fees incurred in connection
therewith, irrespective of whether suit shall be commenced. The costs, expenses
and attorney’s fees shall include, but not be limited to, costs, expenses and
attorney’s fees incurred on appeal or in administrative
proceedings.
13. No
Withholding of Taxes.
Employee acknowledges that the issuance of the Shares shall constitute taxable
compensation to him and that any tax liability related thereto shall be the
sole
responsibility of Employee. By reason of the independent status of Employee,
the
Company is not required to and will not withhold federal, state or local
income
or any other tax from any payment to Employee under this Agreement and may
file
information returns with the United States Internal Revenue Service or similar
state or local agencies regarding such payments under conditions imposed
by
applicable law or regulations.
14. Notices.
Any
notices or communications hereunder must be in writing, delivered in person
or
transmitted by Registered or Certified United States Mail, postage prepaid,
return receipt requested, addressed as follows, unless such address is changed
by written notice:
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| If to Company: | Tankless Systems Worldwide,Inc.
0000
X. Xxxxx Xx., Xxxxx X
Xxxxxxxxxx,
Xx 00000
|
||
| If to the Employee: | Xxxxxxx X. Xxxxxxxx |
15. Governing
Law.
This
Agreement shall be governed by and construed in accordance with the laws of
the
State of Arizona.
16. Successors
and Assigns.
This
Agreement shall inure to the benefit of and be binding upon the parties hereto
and their respective successors and assigns. The Company may, from time to
time,
in its sole discretion, assign all or part of its rights, duties and obligations
herein to any of its affiliates or subsidiaries, without Employee’s prior
consent.
17. Third-Party
Beneficiaries.
To the
extent appropriate, the Released Parties, and each of them, shall be deemed
third-party beneficiaries to this Agreement.
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18. Entire
Agreement.
This
Agreement contains the entire agreement between the parties hereto and
supersedes any prior understandings, commitments, or agreements, written or
oral, with respect to the subject hereof. This Agreement shall not be modified,
varied or amended except by written instrument of subsequent date duly executed
by an authorized representative of each party. If any court of competent
jurisdiction finds any provision of this Agreement invalid, unenforceable,
or
illegal, any such finding shall not affect the validity of the remaining
provisions which shall remain in full force and effect.
19. Counterparts.
This
Agreement may be executed in one or more counterparts, each of which shall
be
deemed an original but all of which shall constitute one and the same
instrument.
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement in multiple
counterparts effective as of the date first written above.
| “COMPANY” | “EMPLOYEE” | ||
|
TANKLESS
SYSTEMS WORLDWIDE, INC.,
a
Nevada corporation
|
|||
| /s/ Xxxxxx Xxxxxxxx | /s/ Xxxxxxx X. Xxxxxxxx | ||
|
Xxxxxx Xxxxxxxx, CEO |
Xxxxxxx X. Xxxxxxxx |
||
