Ex 4.5
DRAFT DATED NOVEMBER 7, 2001
SERVICES AGREEMENT
This Services Agreement (the "AGREEMENT") is made and entered into as of
November ,1st 2001, by and between SuperCom Ltd., a company existing under the
laws of the State of Israel (the "COMPANY") and Xxx Xxxxx, I.D. # 067341313(the
"SERVICE PROVIDER").
WHEREAS the Company requires such services as set forth in this Agreement;
and
WHEREAS the Service Provider represents that he has the necessary knowledge
and experience and is capable of competently and diligently
providing all the services under this Agreement; and
WHEREAS the Service Provider has been previously employed by the Company and
the Company is aware of the Service Provider's skills and abilities;
and
WHEREAS the Company desires to retain the services of the Service Provider
pursuant to the terms and conditions set forth in this Agreement and
the Service provider agrees to provide such services to the Company
on such terms and conditions.
NOW, THEREFORE, the parties hereto agree as follows:
1. GENERAL
1.1 The preamble to this Agreement constitutes an integral part hereof.
1.2 The headings of the sections and subsections of this Agreement are
for convenience of reference only and are not to be considered in
interpreting this Agreement.
1.3 This agreement will enter into force and effect only after the
Company has made, and the employee has received, all payments due to
him in connection with his employment by the Company and termination
thereof (as detailed in Exhibit A), including, without limitation,
severance payments.
1.4 Until all payment arrangements, as detailed in Exhibit A, has been
completed and agreed, the employment agreement between the Company
and the Employee, dated July 1, 1999, will apply to all matters and
concerns.
2. THE SERVICES
2.1 As of October 1, 2001 (the "EFFECTIVE DATE"), subject to the
approval of the appropriate organs of the Company as required by any
applicable law or regulation there under, the Company hereby engages
the Service Provider and the Service Provider hereby agrees to
provide the Company with consulting services (the "CONSULTING
SERVICES") and services as
President and CEO of the Company (the "MANAGEMENT SERVICES") (the
Consulting Services and Management Services collectively, the
"SERVICES"). The Services shall be rendered in a diligent,
conscientious and professional manner, pursuant to guidelines and
procedures set forth by the Board of Directors of the Company from
time to time.
In addition, subject to the approval of the appropriate organs of
the Company as required by applicable law, the Service Provider
shall provide the Company with services as the Chairman of the Board
of Directors of the Company.
2.2 The Service Provider acknowledges that the consulting Services will
require minimum 30 man-hours per month and will require regular
attendance to the needs of the Company. The Services shall be to the
satisfaction of the Company, as determined in the unrestricted
discretion of the Board of Directors of the Company.
3. REPRESENTATIONS AND WARRANTEES OF THE SERVICE PROVIDER
The Service Provider represents and warrants the following:
3.1 That subject to the receipt of all appropriate approvals required by
any applicable law, there are no legal, contractual or any other
restrictions limiting his ability to perform the Services under this
Agreement in accordance with the terms hereof.
3.2 That he has the necessary knowledge and experience and is capable of
competently and diligently providing all the services under this
Agreement.
3.3 That pursuant to an employment agreement between himself and the
Company dated July 1, 1999 (the "EMPLOYMENT AGREEMENT") the Company
employed him as President and CEO of the Company until September
30th ,2001 (the "EMPLOYMENT PERIOD").
3.4 That following the termination of the Employment Agreement and the
end of the Employment Period he is no longer an employee of the
Company and that except for the payment of the such amount as
detailed in EXHIBIT A hereto.
3.5 That, subject to the payment by the Company of as detailed in
Exhibit A, he irrevocably waives any claims he has and/or will have
against the Company arising from or in connection to the Employment
Period and/or the Employment Agreement or the termination thereof.
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4. TERM AND TERMINATION
4.1 This Agreement shall enter into force and effect on the Effective
Date, subject to the receipt of all appropriate approvals required
by applicable law, including, as applicable, the approval of the
Audit Committee, Board of Directors and Shareholders of the Company.
4.2 The Company may terminate this agreement by providing 30 days prior
written notice.
4.3 The Service Provider may terminate this Agreement by providing 60
days prior written notice.
4.4 Without derogating from the provisions of Sections 4.1 and 4.3
above, this Agreement may be terminated by the Company immediately
upon any of the following events: (a) a perpetration by the Service
Provider of a criminal offence, or a breach of trust or impairment
to the Company, its monies, property, assets or employees by the
Service Provider; (b) a breach of the Service Provider's
undertakings with regard to confidentiality, intellectual property
or non-competition; (c) any other breach by the Service Provider of
this Agreement which has not been cured within thirty (30) days
following receipt of a written notice of such breach.
4.5 In any event of termination of this Agreement for any reason
whatsoever, the Service Provider shall assist the Company with
transferring all of the Service Provider's activities to any other
person or entity chosen by the Company in an orderly fashion.
5. CONSIDERATION
5.1 The Company shall pay the Service Provider the amount of NIS 20,000
for the Consulting Services, the amount of NIS 10,000 for the
Management Services and, for as long as the Service Provider
continues to serve as the Chairman of the Board of Directors of the
Company, he shall be entitled to an additional amount of NIS 10,000
(the "CONSIDERATION"). Other than as expressly provided for in this
Agreement, the Service Provider shall not be entitled to any other
payment or consideration of any type or nature whatsoever,
including, without limitation, any fees, bonuses, reimbursement for
expenses or the like. The aforementioned monthly pay shall be linked
to the Dollar Exchange rate as published at the end of the month.
5.2 Each payment shall be made against a detailed invoice issued by the
Service Provider, to the full satisfaction of the Company.
Applicable Value Added Tax shall be added to each payment.
5.3 In addition to the Consideration, and for as long as the Service
Provider shall provide the Company with the Services under this
Agreement, the Company shall provide the Service Provider with a
Company owned automobile, including reimbursement of all related
maintenance, fuel,
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repairs, insurance and other costs. The automobile to be provided to
the Service Provider shall not be of a lesser type or quality than
that which is customary for persons serving in a similar capacity to
the Service Provider.
5.4 The payments to be made by the Company to the Service Provider
hereunder (including issuance of shares pursuant to Section 6
below), is inclusive of all taxes, levies and other compulsory
payments of any kind, all of which shall be borne by the Service
Provider solely. To the extent required under any applicable law,
the Company may withhold any tax from any payment to the Service
Provider hereunder and remit the balance to the Service Provider.
6. OPTION
6.1 The Service provider shall have the option to receive, in lieu of
payment of the Consideration as detailed in Section 5 above,
securities of the Company and/or of SHC Inc., a subsidiary of the
Company (the "OPTION").
The payment of the amount detailed in Exhibit A will be deferred
until the cash flow of the company will enable such payment. The
Service Provider shall have the option to receive Company Shares at
market price ,in lieu of this payment .
6.2 In the event that the Service Provider wishes to exercise the
Option, he shall provide the Company with a written notice to such
effect (the "OPTION NOTICE"). Following the receipt of the Option
Notice by the Company, the parties will negotiate in good faith the
terms and conditions of the exercise of the Option by the Service
Provider, including, without limitation, the type of securities to
be issued to the Service Provider, the price of such securities and
any other terms, conditions, restrictions and limitations applicable
to such issuance.
6.3 In the event that the parties have conducted negotiations in good
faith and have failed to mutually agree upon the terms and
conditions of the exercise of the Option, the Service Provider's
sole remedy shall be the payment of the Consideration by the
Company.
6.4 The parties hereto acknowledge and agree that exercise of the Option
by the Service Provider shall be subject to the receipt of all
appropriate approvals required by applicable law.
7. CONFIDENTIALITY; PROPRIETARY RIGHTS
7.1 CONFIDENTIALITY. The Service Provider recognizes and acknowledges
that the systems (including specifications, programs and
documentation), the methods and data, and the developments, designs,
inventions, improvements, trade secrets and works of authorship,
which the
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Company, or any employee thereof, owns plans, or develops (whether
for its own use or for use by its clients) are confidential and are
the property of the Company. All of these materials and information
will be referred to below as "Proprietary Information".
The Service Provider further recognizes and acknowledges that any
discoveries, developments, designs, inventions and improvements,
directly or indirectly related to the business of the Company or its
clients (the "CREATIONS") made or acquired by him and whether or not
made or acquired by him in business hours or at the premises of the
Company and whether or not made or acquired with the assistance of
materials supplied by the Company and whether or not the Service
Provider shall have been requested by the Company to make or acquire
such Creations shall belong to the Company.
Upon request, the Service Provider will execute any instrument
required to vest in the Company complete title and ownership to such
Creations, and will at the request and expense of the Company
execute any necessary instrument to obtain legal protection in
Israel and foreign countries for such Creations and for the purposes
of vesting title thereto in the Company, all without any additional
compensation of any kind to the Service Provider.
7.2 NON-DISCLOSURE. The Service Provider agrees that, except as directed
by the Company, he will not, during the term of this Agreement and
for and unlimited time thereafter, disclose to any third party or
use, directly or indirectly, whether for his own benefit or the
benefit of others, any Proprietary Information, or permit any third
party to examine or make copies of any document (whether in written
or any other form) which may contain or be derived from the
Proprietary Information.
8. NON-COMPETITION
The Service Provider undertakes not, directly or indirectly (whether as
owner, partner, consultant, employee or otherwise) at any time, during and
for two (2) years following the Commencement Date (as defined below), to
engage in any work or activity that is competitive with the Company's
activities or products actively marketed or under active development by
the Company, nor to solicit any employee of the Company to resign from or
otherwise leave the employment of the Company.
The term "Commencement Date" shall mean the later of (a) the date in
which this Agreement has been terminated for any reason; or (b) the
date in which the Service Provider ceases to be, directly or
indirectly (including holdings by a family Member), an interested
party in the Company. For the purpose of this Section 8 the terms
"Interested party" and "Family Member" shall have the same meaning
as such terms are defined in section 1 of the Israeli Securities
Law, 1968.
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9. INDEPENDENT CONTRACTOR
9.1 The relationship between the parties under this Agreement is
strictly that of independent parties, where the Service Provider,
acting solely as an independent contractor, shall supply the
Services to the Company. Nothing herein shall be deemed to create
the relationship of employer-employee, agency, joint venture or
partnership between the parties or between either of the parties and
any third person.
9.2 The Service Provider undertakes that he and/or anyone on his behalf
shall not assert any claim against the Company, its shareholders,
directors, officers or representatives any cause of action or claim
in connection with employer-employee relations which may have
allegedly existed between him and the Company, and if he does so, he
shall indemnify the Company upon its first demand for any expense
that may be occasioned to it in respect of or in connection with a
claim as aforesaid, including attorney's fees.
9.3 Without prejudice to the generality of the foregoing, it is hereby
agreed that the Service Provider and anyone acting on his behalf
shall not be entitled to receive from the Company any severance pay
and/or any other payment and/or other consideration deriving from
employer-employee relations and/or the termination thereof and/or
any social benefits.
9.4 If for any reason whatsoever a competent authority, including a
judicial body, determines that the Service Provider or any one on
his behalf is the Company's employee, the following provisions shall
apply:
9.4.1 In lieu of the Consideration that was paid to the Service
Provider from the Effective Date, the Service Provider shall
be deemed to have been entitled only to a reduced
consideration (gross) of 70% of the consideration actually
paid to the Service Provider (the "REDUCED CONSIDERATION"),
and in such event the Service Provider shall be deemed only
entitled to the Reduced Consideration retroactively from the
Effective Date.
9.4.2 The Service Provider shall immediately refund to the Company
any amount paid from the Effective Date that was paid in
excess of the Reduced Consideration, linked to the Israeli
consumer price index from the date of each payment to the date
of actual refund.
10. MISCELLANEOUS
10.1 ASSIGNMENT. The Service Provider is prohibited from assigning any of
his obligations or rights under this Agreement to any third party
without the express prior written consent of the Company.
10.2 COMPLETE AGREEMENT. This Agreement constitutes the entire agreement
between the parties with respect to the matters referred to herein,
and no
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other arrangement, understanding or agreement, verbal or otherwise,
shall be binding upon the parties hereto. The parties hereto agree
and represent that the Employment Agreement is terminated as of the
Effective Date.
10.3 GOVERNING LAW, JURISDICTION. This Agreement shall be governed by and
construed exclusively according to the laws of the State of Israel,
and any dispute arising under or in connection herewith shall be
presented in and determined exclusively by the courts of the state
of Israel.
10.4 NO WAIVER. No failure or delay on the part of any party hereto in
exercising any right, power or remedy thereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such
right, power or remedy preclude any other or further exercise
thereof or the exercise of any other right, power or remedy. Any
waiver granted thereunder must be in writing and shall be valid only
in the specific instance in which given.
10.5 SEVERABILITY. If any provision of this Agreement is held by a court
of competent jurisdiction to be unenforceable under applicable law,
then such provision shall be excluded from this Agreement and the
remainder of this Agreement shall be interpreted as if such
provision were so excluded and shall be enforceable in accordance
with its terms; provided, however, that in such event this Agreement
shall be interpreted so as to give effect, to the greatest extent
consistent with and permitted by applicable law, to the meaning and
intention of the excluded provision as determined by such court of
competent jurisdiction
10.6 NOTICES. All notices and other communications required or permitted
hereunder to be given to a party to this Agreement shall be in
writing and shall be faxed or mailed by registered or certified
mail, postage prepaid, or otherwise delivered by hand or by
messenger, addressed to such party's address as set forth below or
at such other address as the party shall have furnished to each
other party in writing in accordance with this provision:
if to the Company: Supercom Ltd.
0 Xxxxxx Xx. Xxxxxxx, Xxxxxx.
if to the Service Provider: Xxx Xxxxx
00 Xxxxxx XxxxxxxxXx., Xxxxxxxx, Xxxxxx
Any notice sent in accordance with this Section 10.6 shall be
effective (i) if mailed by registered or certified mail, four (4)
business days after mailing, (ii) if sent by messenger, upon actual
receipt or refusal thereof, and (iii) if sent via facsimile, upon
transmission and electronic confirmation of receipt or (if
transmitted and received on a non-business day) on the first
business day following transmission and electronic confirmation of
receipt (provided, however, that any notice of change of
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address shall only be valid upon receipt).
IN WITNESS WHEREOF, this Agreement has been executed by the parties hereto as
of the day and year first above written.
SuperCom Ltd Xxx Xxxxx
/s/GOLD XXXXX /s/ XXX XXXXX
By: ____________________ _____________________
_______________________
Name (Print)
CFO
_______________________
Title
52852-2\0\15\0
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