Exhibit 10.5
SERVICE AGREEMENT
This SERVICE AGREEMENT is entered into as of
December 11, 2002 by and between CareDecision Corp. a Nevada
corporation, (the "Company"), and Xxxxxx Xxxxxxxx ("Xxxxxxxx"),
and is effective upon the execution by the parties hereto.
1. DUTIES AND RESPONSIBILITIES.
X. Xxxxxxxx shall provide information
technology consulting to the Company. Xxxxxxxx shall report to
and perform the duties and responsibilities assigned to him by
the Company's President, or such other person as may be
designated by the Company's Board of Directors.
X. Xxxxxxxx agrees to devote his full
time and attention to the Company, to use his best efforts to
advance the business and welfare of the Company, to render his
services under this Agreement fully, faithfully, diligently,
competently and to the best of his ability, and not to engage in
any other employment activities.
X. Xxxxxxxx shall be based in the
Company's principal office, but Xxxxxxxx shall be required to
travel to other geographic locations in connection with the
performance of his duties
2. PERIOD OF EMPLOYMENT.
X. Xxxxxxxx'x employment with the Company
shall be governed by the provisions of this Agreement from
December 11, 2002, until September 30, 2003. The period during
which the Xxxxxxxx provides services to the Company pursuant to
this Agreement shall be referenced in this Agreement as the
"Employment Period."
/1/
B. During the first year of this
Agreement, if Xxxxxxxx is terminated other than for Cause or if
he resigns for Good Reason, he shall be entitled to the payments
and other benefits, set forth in Paragraph 6 of this Agreement.
3. COMPENSATION.
A. Compensation
(a) For the services provided under this Agreement, the Company
shall issue the Consultant Four Million One Hundred Twenty Seven
Thousand and Ninety Three (4,127,093) restricted shares of common
stock of the Company. The Consulting shares shall be issued
January 31, 2003.
(b) The Company will reimburse Consultant for all reasonable out-
of-pocket expenses incurred by her in the course of performing
her duties at the request of the Company under this Agreement,
upon completion of an expense report satisfactory to the Company.
B. Except for the conditions described in paragraph A
above, Xxxxxxxx'x compensation shall be subject to periodic
review by the Company, and may be increased or decreased in the
Company's discretion.
C. The Company shall deduct and withhold
from the compensation payable to Xxxxxxxx hereunder any and all
applicable Federal, State and Local income and employment
withholding taxes and any other amounts required or authorized by
Xxxxxxxx to be deducted or withheld by the Company under
applicable statutes, regulations, ordinances or orders governing
or requiring the withholding or deduction of amounts otherwise
payable as compensation or wages to employees.
/2/
4. EXPENSE REIMBURSEMENT
In addition to the compensation specified in
Paragraph 3, Xxxxxxxx shall be entitled, in accordance with the
reimbursement policies in effect from time to time, to receive
reimbursement from the Company for reasonable business expenses
incurred by Xxxxxxxx in the performance of his duties hereunder,
provided Xxxxxxxx furnishes the Company with vouchers, receipts
and other details of such expenses in the form required by the
Company sufficient to substantiate a deduction for such business
expenses under all applicable rules and regulations of Federal
and State taxing authorities.
5. FRINGE BENEFITS.
X. Xxxxxxxx shall, throughout the
Employment Period, shall not be eligible to participate in all
group term life insurance plans, group health plans, accidental
death and dismemberment plans and short-term disability programs
and other employee perquisites which are made available to the
Company's employees.
B. Should the Company terminate
Xxxxxxxx'x employment for Cause, as defined below, or should
Xxxxxxxx voluntarily resign other than for Good Reason, the
Company shall have no obligation to Xxxxxxxx under this Agreement
other than for accrued but unpaid salary. Should the Company
terminate Xxxxxxxx'x employment other than for Cause during this
Agreement, or should Xxxxxxxx resign for Good Reason, the Company
shall have no further obligation under this Agreement, except
that the Company will continue to pay Xxxxxxxx'x base salary for
a six-month period, (less, if applicable, any long-term
disability payments).
/3/
6. GOOD REASON.
For Purposes of this agreement, "Good Reason"
shall mean:
A. A material reduction in the duties,
responsibilities, status, reporting responsibilities, title, or
offices that Xxxxxxxx had with the Company immediately before the
reduction.
B. A reduction by more than 20% of the
total annual cash compensation (defined as Base Salary and Target
Bonus) that Xxxxxxxx was eligible to receive from the Company and
its affiliates immediately before the reduction, except a
reduction that is part of, and consistent with, an across-the-
board reduction in the salaries of senior officers of the
Company.
C. A change in control in which the
Xxxxxxxx is not offered a similar position at no less than
seventy-five percent (75%) of Xxxxxxxx'x compensation (defined as
Base Salary).
D. The failure of any successor to the
Company by merger, consolidation or acquisition of all or
substantially all of the business of the Company to assume the
Company's obligations under this Agreement.
E. A material breach by the Company of
its obligations under this Agreement.
In no event, however, shall a Change in Control be deemed to
occur in connection with any public offering of the Common Stock.
/4/
7. RESTRICTIVE COVENANTS.
During the Employment Period:
(i) Xxxxxxxx shall devote
Xxxxxxxx'x full time and energy solely and exclusively to the
performance of Xxxxxxxx'x duties described herein, except during
periods of illness or vacation periods.
(ii) Xxxxxxxx shall not
directly or indirectly provide services to or through any person,
firm or other entity except the Company, unless otherwise
authorized by the Board in writing. The Company does, however,
reserve the right to demand Xxxxxxxx'x resignation from those
same Boards, if, in the opinion of the CareDecision CEO,
continued membership on those Boards by Xxxxxxxx diminishes his
ability to execute his responsibilities identified within this
Agreement; or if continued association with those organizations
becomes detrimental to the goals of the company; or if continued
membership represents a conflict, or potential conflict, with the
business activities, or objectives, of XxxxXxxxxxxx.xxx.
(iii) Xxxxxxxx shall not render
any services of any kind or character for Xxxxxxxx'x own account
or for any other person, firm or entity without first obtaining
the Company's written consent.
Xxxxxxxx, however, shall have the right to perform such
incidental services as are necessary in connection with (a)
Xxxxxxxx'x private passive investments, but only if Xxxxxxxx is
not obligated or required to (and shall not in fact) devote any
managerial efforts which interfere with the services required to
be performed by him, or (b) Xxxxxxxx'x charitable or community
activities, or participation in trade or professional
organizations, but only if such incidental services do not
interfere with the performance of Xxxxxxxx'x services to the
Company.
/5/
8. NON-COMPETITION DURING THE EMPLOYMENT
PERIOD.
Xxxxxxxx acknowledges and agrees that given the
extent and nature of the confidential and proprietary information
he will obtain during the course of his employment with the
Company, it would be inevitable that such confidential
information would be disclosed or utilized by the Xxxxxxxx should
he obtain employment from, or otherwise become associated with,
an entity or person that is engaged in a business or enterprise
that directly competes with the Company. Consequently, during any
period for which Xxxxxxxx is receiving payments from the Company,
either as wages or as a severance benefit, including but not
limited to severance pay pursuant to paragraph 7, Xxxxxxxx shall
not, without prior written consent of the Company's Board of
Directors, directly or indirectly own, manage, operate, join,
control or participate in the ownership, management, operation or
control of, or be employed by or connected in any manner with,
any enterprise which is engaged in any business competitive with
or similar to that of the Company; provided, however, that such
restriction shall not apply to any passive investment
representing an interest of less than two percent (2%) of an
outstanding class of publicly-traded securities of any Company or
other enterprise which is not, at the time of such investment,
engaged in a business competitive with the Company's business.
9. NON-SOLICITATION.
During the Employment Period and for one (1)
year following termination of Xxxxxxxx'x employment, Xxxxxxxx
shall not encourage or solicit any of the Company's employees to
leave the Company's employ for any reason or interfere in any
other manner with employment relationships at the time existing
between the Company and its employees. In addition, Xxxxxxxx
shall not solicit, directly or indirectly, business from any
client of the Company, induce any of the Company's clients to
terminate their existing business relationship with the Company
or interfere in any other manner with any existing business
relationship between the Company and any client or other third
party.
Xxxxxxxx acknowledges that monetary damages may
not be sufficient to compensate the Company for any economic
loss, which may be incurred by reason of his breach of the
foregoing restrictive covenants. Accordingly, in the event of any
such breach, the Company shall, in addition to the termination of
this Agreement and any remedies available to the Company at law,
be entitled to obtain equitable relief in the form of an
injunction precluding Xxxxxxxx from continuing such breach.
/6/
10. PROPRIETARY INFORMATION.
As a condition precedent to Xxxxxxxx'x
employment with the Company, Xxxxxxxx will execute the Company's
standard Confidential Information and Assignment of Inventions
Agreement Xxxxxxxx'x obligations pursuant to the Confidential
Information and Assignment of Inventions Agreement will survive
termination of Xxxxxxxx'x employment with the Company.
11. SUCCESSORS AND ASSIGNS.
This Agreement is personal in its nature and
Xxxxxxxx shall not assign or transfer his rights under this
Agreement. The provisions of this Agreement shall inure to the
benefit of, and be binding on each successor of the Company
whether by merger, consolidation, transfer of all or
substantially all assets, or otherwise and the heirs and legal
representatives of Xxxxxxxx.
12. NOTICES.
Any notices, demands or other communications
required or desired to be given by any party shall be in writing
and shall be validly given to another party if served either
personally or if deposited in the United States mail, certified
or registered, postage prepaid, return receipt requested. If such
notice, demand or other communication shall be served personally,
service shall be conclusively deemed made at the time of such
personal service. If such notice, demand or other communication
is given by mail, such notice shall be conclusively deemed given
forty-eight (48) hours after the deposit thereof in the United
States mail addressed to the party to whom such notice, demand or
other communication is to be given as hereinafter set forth:
/7/
To the Company:
Xxxxxx Xxx, President
CareDecision Corporation
0 Xxxx Xxxxx, 00xx Xxxxx, Xxx. 0000-00
Xxx Xxxx, XX 00000
To Xxxxxxxx:
Xxxxxx Xxxxxxxx
000 Xxxxxxxxx Xxxxx
Xxxx Xxxx, XX 00000
Any party may change its address for the purpose of receiving
notices, demands and other communications by providing written
notice to the other party in the manner described in this
paragraph.
13. GOVERNING DOCUMENTS.
This Agreement along with the documents
expressly referenced in this Agreement constitute the entire
agreement and understanding of the Company and Xxxxxxxx with
respect to the terms and conditions of Xxxxxxxx'x employment with
the Company and the payment of severance benefits and supersedes
all prior and contemporaneous written or verbal agreements and
understandings between Xxxxxxxx and the Company relating to such
subject matter. This Agreement may only be amended by written
instrument signed by Xxxxxxxx and an authorized officer of the
Company. Any and all prior agreements, understandings or
representations relating to the Xxxxxxxx'x employment with the
Company are terminated and cancelled in their entirety and are of
no further force or effect.
/8/
14. GOVERNING LAW.
The provisions of this Agreement will be
construed and interpreted under the laws of the State of Nevada.
If any provision of this Agreement as applied to any party or to
any circumstance should be adjudged by a court of competent
jurisdiction to be void or unenforceable for any reason, the
invalidity of that provision shall in no way affect (to the
maximum extent permissible by law) the application of such
provision under circumstances different from those adjudicated by
the court, the application of any other provision of this
Agreement, or the enforceability or invalidity of this Agreement
as a whole. Should any provision of this Agreement become or be
deemed invalid, illegal or unenforceable in any jurisdiction by
reason of the scope, extent or duration of its coverage, then
such provision shall be deemed amended to the extent necessary to
conform to applicable law so as to be valid and enforceable or,
if such provision cannot be so amended without materially
altering the intention of the parties, then such provision will
be stricken and the remainder of this Agreement shall continue in
full force and effect.
15. REMEDIES.
All rights and remedies provided pursuant to
this Agreement or by law shall be cumulative, and no such right
or remedy shall be exclusive of any other. A party may pursue any
one or more rights or remedies hereunder or may seek damages or
specific performance in the event of another party's breach
hereunder or may pursue any other remedy by law or equity,
whether or not stated in this Agreement.
/9/
16. NO WAIVER.
The waiver by either party of a breach of any
provision of this Agreement shall not operate as or be construed
as a waiver of any later breach of that provision.
17. COUNTERPARTS.
This Agreement may be executed in more than one
counterpart, each of which shall be deemed an original, but all
of which together shall constitute but one and the same
instrument.
CareDecision Corporation
/s/ Xxxxxx Xxx
--------------------------------
By: Xxxxxx Xxx
Title: President
Xxxxxx Xxxxxxxx
/s/ Xxxxxx Xxxxxxxx
--------------------------------
Title: Service Provider
/10/
