Exhibit 10.1
EMPLOYMENT AGREEMENT
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AGREEMENT made and entered into as of December __, 2007, by and between
Integrated Consulting Services, Inc. (the "Company"), a Kentucky corporation
(the "Company), and Xxxxxxx X. Ice ("Employee").
W I T N E S S E T H
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WHEREAS, Employee has entered into on December __, 2007, a Stock Purchase
Agreement (the "SPA") by and among the Company, Orbit International Corp., a
Delaware corporation ("Parent"), and the respective shareholders of the Company,
including Employee, which SPA provides in Section 7.01 therein, for the Company
and Employee to enter into an employment agreement; and
WHEREAS, the Company desires to enter into this Agreement with Employee and
Employee desires to be employed by the Company on the terms and conditions set
forth in this Agreement.
NOW, THEREFORE, the parties hereto, in consideration of the premises and
the mutual covenants herein contained, hereby agree as follows:
1. Term of Employment. Subject to the terms and conditions hereinafter
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set forth, the Company shall employ Employee and Employee shall be employed by
the Company, for an employment term commencing as of the date hereof and
terminating three years from the date hereof unless sooner terminated pursuant
to the provisions of Paragraph 8 hereof (the "Initial Term"); provided, however,
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that this Agreement may be extended for an additional three years (the
"Extension") if (i) Employee gives the Company written notice requesting the
Extension at least 30 days prior to the end of the Initial Term (the "Extended
Term") and (ii) the Company agrees, in its sole discretion, to accept Employee's
request for the Extension. The Initial Term and the Extended Term shall be
referred to herein as the "Term." At the expiration of the Term, the Company
shall have no further obligation to Employee, and Employee shall have no further
obligation to the Company except with respect to (i) Employee's obligations to
the Company pursuant to Paragraphs 9, 10, 11 and 15; (ii) the Company's
obligations to Employee pursuant to Paragraphs 4-8; and, (iii) any other
obligations the Company may have to Employee and/or Employee may have to the
Company under applicable law governing the relationship of an employer to an
employee and/or an employee to an employer upon and following termination of
such relationship.
2. Scope of Employment. During the Term, Employee shall be employed as
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President and Chief Operating Officer of the Company with full control over the
day to day operations of the Company. Employee shall perform such duties
customarily expected to be performed by such officer. In addition, Employee
shall faithfully render and perform such other reasonable executive and
managerial services as may be assigned to him, from time to time, by or under
the authority of the Board of Directors of the Company or of the Parent, or by
the Chief Executive Officer of the Company. Employee will devote his full
working time and efforts to the business and affairs of the Company, as now or
hereafter conducted, and shall be at all times subject to the direction and
control of the Board of Directors of the Company or of the Parent, or of the
Chief Executive Officer of the Company. Employee shall not engage in any other
business, profession or occupation which would conflict or interfere with the
rendition of such services either directly or indirectly, or which is, or
reasonably may be, contrary to the welfare, interest or benefit of the business
now or hereafter conducted by the Company, without the prior written consent of
the Board of Directors of the Company or of the Parent, or of the Chief
Executive Officer of the Company. Employee shall render such services to the
best of his ability and shall use his best efforts to promote the interests of
the Company.
3. Location of Employment. Employee shall render services primarily at
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the Company's offices that are located in Louisville, Kentucky. During the
Term, the Company shall continue to provide Employee with an office and staff at
the Company's Louisville offices consistent with the practice of the Company
prior to the effective date of this Agreement. Notwithstanding the foregoing,
Employee acknowledges and agrees that Employee's duties hereunder from
time-to-time may include such reasonable travel outside of Louisville, Kentucky
consistent with past practices of the Company, as the performance of Employee's
duties may require. Employee shall not be required to relocate to any other
location.
4. Compensation.
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(a) As full compensation for all services provided for herein, the
Company will pay, or cause to be paid, to Employee, and Employee will accept, a
base salary (as increased from time to time, the "Base Salary") during the Term
at an annual rate of $180,000, provided that as of each anniversary of the date
of this Agreement, the Base Salary shall be increased by an amount equal to the
annual percentage increase in the "All-Urban" consumer price index published by
the United States Bureau of Labor Statistics for the Louisville, Kentucky area
for the immediately preceding 12-month period (or, if such index is no longer
published, by an amount equal to the annual percentage increase in the most
closely comparable index). The Board of Directors shall review Employee's
performance annually and may, in its sole discretion, increase the Base Salary
by an amount greater than that provided for in the preceding sentence. The Base
Salary shall be paid in regular installments in accordance with the Company's
usual paying practices, but not less frequently than monthly.
(b) During the Term of this Agreement, Employee shall also have use of an
automobile owned or leased by the Company ("Employee's Company Car"), at least
comparable to the one currently used by Employee. Employee shall also be
provided a monthly car allowance of Four Hundred Dollars ($400.00) for costs
related to the use by Employee of Employee's Company Car, including, but not
limited to, repairs, maintenance, and fuel costs. The Company shall be
responsible for the payment of insurance consistent with prior coverage,
registration, and taxes for such automobile. At any time after December 31,
2008, Employee shall have the right and option to purchase Employee's Company
Car at its then prevailing book value as same is set forth on the Company's
books and records. Notwithstanding the previous sentence, in the event the
Employee exercises the option to purchase the Employee's Company Car, the
monthly car allowance shall continue to be provided to the Employee for the Term
of this Agreement
(c) In addition to the compensation set forth in subparagraphs (a)
and (b) of this Paragraph 4, Employee shall be entitled to an annual incentive
bonus, which amount shall be computed as follows: for each fiscal year during
the Term, or any pro rated portion thereof, Employee shall be entitled to
participate in a bonus pool, to be distributed among employees of the Company,
which shall consist of an aggregate amount equal to five (5)% of the Pre-Tax
Income of the Company. "Pre-Tax Income" shall mean the net income generated by
the Company (exclusive of any extraordinary gains, extraordinary losses or any
interest expense), as set forth in the financial statements of the Company,
determined in accordance with generally accepted accounting principles (GAAP)
consistently applied, and which shall include an agreed upon allocation of
administrative and overhead costs of the Parent.
The Employee shall participate equally with other members of senior
management of the Parent in the determination of the amount of the distribution
from the bonus pool. Such payment shall be made within ten (10) days following
completion of the annual audit of the Company's financial statements, and with
regard to that period remaining in the Term after the conclusion of the final
complete fiscal year of the Term (the "Stub Period"), within forty-five (45)
days after the end of the Stub Period. Pre-Tax Income for the Stub Period shall
be taken from the unaudited financial statements of the Company.
The Base Salary and any bonus payments will be subject to such deductions
by the Company as the Company is from time to time required to make pursuant to
law, government regulations or order or by agreement with, or consent of,
Employee. Such payments may be made by check or checks of the Company or any of
its parent, subsidiaries or affiliates as the Company may, from time to time,
find proper and appropriate.
5. Vacation. During the Term, Employee shall be entitled to vacations
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in accordance with past practice of the Company prior to the date of this
Agreement. It is hereby acknowledged by both Employee and the Company that the
Schedule of vacation days and availability attached to this Agreement
constitutes past practice prior to the effective date of this Agreement.
6. Benefits.
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(a) During the Term, Employee shall be entitled to participate in all
group insurances as are presently being offered by the Company or which may
hereafter, during the Term, be offered to its executive and/or non-executive
employees on a company wide basis (including group life insurance, group
disability insurance, group medical and hospitalization plans, pension and
profit sharing plans). During the Term, Employee shall be entitled to medical
and hospitalization coverage for himself, his spouse, and dependents under the
Company's existing medical plan (including prescription drug coverage) pursuant
to which he currently has coverage. The Company shall pay the premiums for
the foregoing coverage consistent with its policies then in effect, as amended
from time to time. In the event the Company fails to provide such coverage, or
such coverage is otherwise unavailable, then the Company shall provide Employee,
his spouse, and dependents with at least equivalent coverage (including
healthcare provider choices, deductibles, co-pays, etc.).
(b) During the Term, the Parent at its sole expense shall maintain
key man life insurance on the Employee in the amount of one million dollars with
the Company as the beneficiary ("Policy"). Following the Term, if Employee is
no longer employed by the Company as a full-time employee, the Employee, at his
sole discretion, will assume ownership, responsibility, and liability for all
premiums due under the Policy and will be entitled to designate the
beneficiaries under the Policy.
(c) From and after the date of this Agreement, the term "compensation" as
used in any pension or profit sharing plan maintained by the Company shall
include only the Base Salary (exclusive of any bonus payments) payable
hereunder, unless the plan or applicable law provides otherwise.
7. Expenses. Employee shall be entitled to reimbursement by the
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Company for reasonable expenses actually incurred by him on its behalf or on
behalf of Parent, in the course of his employment by the Company, upon the
presentation by Employee, from time to time, of an itemized account of such
expenditures together with such vouchers and other receipts as the Company may
request, in accordance with Company policy and Internal Revenue Service
regulations.
8. Termination.
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(a) Disability. If, during the Term, Employee shall be unable, for a
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period of more than six (6) consecutive months or for periods aggregating more
than twenty-six (26) weeks in any fifty-two (52) consecutive week period to
perform the services provided for herein as a result of illness, incapacity or a
physical or other disability of any nature, the Company may, upon not less than
thirty (30) days' written notice, terminate Employee's employment and the Term
hereunder. Employee shall be considered unable to perform the services provided
for herein if he is unable, with or without reasonable accommodation, to attend
to the essential duties required of him.
(b) Death. If Employee shall die during the Term, Employee's
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employment hereunder and the Term shall terminate upon Employee's death.
Employee's estate shall continue to receive the compensation specified in
Paragraph 4 hereof until the end of the month in which Employee's death occurs.
Medical and hospitalization insurance coverage, as provided for in Paragraph
6(a), will continue for Employee's spouse and dependents for a period of six (6)
months thereafter, without prejudice to the rights of his spouse and dependents)
under Section 4980B of the Internal Revenue Code.
(c) For Cause. In addition to the provisions for the cancellation
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and/or termination hereof hereinabove provided, the Company may, at any time and
in its sole discretion, terminate and/or cancel the Term and this Agreement for
Cause (as hereinafter defined) by sending written notice to Employee of its
intention to so cancel and/or terminate. Cancellation and/or termination under
this paragraph shall become effective within ten (10) business days of
Employee's receipt of the notice provided for under this paragraph.
For purposes of this Agreement, "Cause" shall be defined to mean: (i)
fraud, dishonesty or similar malfeasance; (ii) substantial refusal to comply or
default in complying with the reasonable, ethical and lawful directions of the
Board of Directors of the Company or Parent, or the Chief Executive Officer
and/or failure to comply with or perform any of the material terms and/or
obligations of this Agreement and such refusal, default or failure continues for
a period of more than ten (10) days after receipt by Employee of written notice
from the Company setting forth in reasonable detail the activity by Employee
that the Company deems to be Cause for termination of this Agreement; (iii)
Employee's repeated and intemperate use of alcohol or illegal drugs after
written notice from the Company that such use, if continued, will result in
termination of Employee's employment; (iv) Employee's indictment for, or plea of
nolo contendere or conviction of a felony under the laws of the United States or
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any state thereof or a misdemeanor involving moral turpitude; or, (v) Employee
materially breaching any provision of this Agreement, which breach continues for
a period of more than ten (10) days after receipt by Employee of written notice
from the Company setting forth in reasonable detail the breach by Employee which
the Company deems to be Cause for termination of this Agreement.
(d) Resignation for Good Reason. Employee's employment and the Term may be
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terminated by Employee for "Good Reason" if any of the following occurs without
Employee's written consent:
(i) a substantial and adverse alteration of Employee's position, duties, and
responsibilities under this Agreement such that they are no longer consistent
with the position, duties, and/or responsibilities of an executive level
employee;
(ii) a material breach of this Agreement by the Company or the Parent;
(iii) a change in Employee's principal place of employment to a location at
least twenty (20) miles from the Louisville, Kentucky offices;
(iv) a material and adverse change in the compensation and benefits provided
to Employee under this Agreement;
(v) the Company or the Parent materially breaches the SPA; and/or
(vi) the failure of any successor company that acquires the assets or stock
of the Company to assume this Agreement and the contractual obligations
hereunder.
In order to be eligible for the severance benefits referred to in Paragraph 8(e)
below, Employee shall be required to provide the Company with written notice of
Good Reason to resign within twenty (20) days after Employee becomes aware of
the circumstances constituting Good Reason. The Company shall have a period of
ten (10) days after Employee provides such written notice within which to take
measures to correct the circumstances constituting Good Reason. Should Employee
fail to provide twenty (20) days written notice of Good Reason and/or should the
Company correct the circumstances within ten (10) days after receiving written
notice from the Employee, Good Reason for Employee's resignation shall cease to
exist.
(e) Severance.
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(i) In the event the Company terminates Employee's employment,
other than for the reasons set forth in Paragraphs 8(a), (b), or (c), or
Employee resigns for Good Reason, Employer will pay to Employee a severance
benefit. Severance shall be in an amount equal to Employee's Base Salary for
the immediately preceding calendar year, plus bonuses paid to Employee for the
immediately preceding calendar year (the "Severance Benefit"). The Severance
Benefit will be subject to payroll deductions required by law and/or authorized
by Employee. The Severance Benefit shall be payable in substantially equal
installments on regularly scheduled paydays commencing with the regularly
scheduled payday following the effective date of the termination of employment
and continuing for one (1) year or the end of the Term of this Agreement,
whichever is shorter. Should Employee resign where no Good Reason exists, or
should Employee's employment terminate pursuant to Paragraphs 8 (a), (b), and/or
(c), Employee shall not be entitled to the Severance Benefit.
(ii) In the event the Company terminates Employee's employment pursuant to
Paragraph 8(b) for the reason that Employee suffers from a disability, and in
the event Employee is not receiving long-term disability benefits under either a
group long-term disability insurance program maintained by the Company or a
personal policy maintained by Employee at a rate of at least sixty-six and
two-thirds (66 2/3%) percent of Employee's then current Base Salary, the Company
will pay to Employee the difference between sixty-six and two-thirds (66 2/3%)
percent of Employee's then current Base Salary and such amount Employee is
receiving, if any, (less payroll deductions required by law and/or authorized by
Employee) in substantially equal installments on regularly scheduled paydays
commencing with the regularly scheduled payday following the effective date of
the termination of employment and continuing for six (6) months.
(iii) Employee will also be entitled, subject to the terms and conditions of
the Consolidated Omnibus Budget Reconciliation Act of 1985 ("COBRA") and the
Company's policies, to make a COBRA election to continue the medical and
hospitalization benefits referred to in Paragraph 6(a) for Employee, his spouse,
and his eligible dependents. In the event Employee elects COBRA coverage,
Employee will reimburse the Company for premium payments made on behalf of
Employee to keep medical and/or hospitalization coverage in effect for a period
of eighteen (18) months from the effective date of the termination of
employment.
(iv) Employee shall have no duty to seek other employment or to engage in
self-employment in mitigation of the Severance Benefit and premium reimbursement
provided for hereunder, and any compensation which Employee may receive in the
course of any such employment or self-employment shall not reduce the Company's
obligations hereunder.
9. Disclosure. Except as may be required or appropriate in connection
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with Employee's carrying out his duties under this Agreement, Employee will not,
without the prior written consent of the Company, or unless otherwise required
by law or any legal process, at any time, directly or indirectly, disclose or
furnish to any other person, firm or corporation:
(a) any of the Company's confidential non-public information concerning the
methods of conducting or obtaining business, of manufacturing or advertising
products, or of obtaining customers;
(b) any of the Company's confidential non-public information acquired by
Employee during the course of his employment by the Company, including without
limiting the generality of the foregoing, the name of any customers or
prospective customers of, or any person, firm or corporation who or which have
or shall have traded or dealt with, the Company (whether such customers have
been obtained by Employee or otherwise); and/or
(c) any of the Company's confidential non-public information relating to the
products, designs, processes, discoveries, materials, ideas, creations,
inventions or properties of the Company.
10. Covenants Not to Compete.
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(a) During the Term, Employee agrees not to engage, directly or
indirectly, in any business which is competitive with the business now, or at
any time during the Term, conducted by the Company.
(b) During the Term, or if Employee is terminated for Cause or
Employee terminates not for Good Reason, until the scheduled expiration of the
Term, Employee agrees not to directly or indirectly, on behalf of himself or any
business in which he may, directly or indirectly, be engaged, recruit, solicit,
induce (or attempt to induce), or have any part in, the diversion of any of the
Company's employees or sales representatives from their relationships with the
Company or retain or employ any of the Company's employees or sales
representatives.
(c) In addition, Employee shall not at any time, during or after the
termination of this Agreement, engage in any business which uses as its name, in
whole or in part, Integrated Consulting Services, Inc. and/or Orbit
International Corp., or any other name used by the Company or Parent and known
by Employee to be so used, during or prior to the Term.
For the purpose of this Paragraph 10, Employee will be deemed directly
or indirectly engaged in a business if he participates in such business as
proprietor, partner, joint venturer, stockholder, director, officer, lender,
manager, employee, consultant, advisor or agent, or if he controls such
business. Employee shall not for purposes of this paragraph be deemed a
stockholder or lender if he holds less than two (2%) percent of the outstanding
equity or debt of any publicly owned corporation engaged in the same or similar
business to that of the Company, provided that Employee shall not be in a
control position with regard to such corporation.
11. Inventions. As between Employee and the Company, all products,
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designs, processes, discoveries, materials, ideas, creations, inventions and
properties, whether or not furnished by Employee, created, developed, invented,
or used in connection with Employee's employment hereunder or prior to this
Agreement, will be the sole and absolute property of the Company for any and all
purposes whatever in perpetuity, whether or not conceived, discovered and/or
developed during regular working hours. Employee will not have, and will not
claim to have, under this Agreement or otherwise, any right, title or interest
of any kind or nature whatsoever in or to any such products, designs, processes,
discoveries, materials, ideas, creations, inventions and properties.
12. Arbitration. Any controversy arising out of or relating to this
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Agreement, including any modification or amendment thereof, shall be resolved by
arbitration, by a single arbitrator pursuant to the employment dispute
resolution rules then obtaining of the American Arbitration Association. The
venue for arbitration shall be in Louisville, Kentucky. The parties consent to
the application of the Kentucky or Federal Arbitration Statutes and to the
jurisdiction of the Jefferson County Court of the State of Kentucky, and of the
United States District Court of the Western District of Kentucky, for judgment
on an award and for all other purposes in connection with said arbitration.
Judgment upon the written award rendered may be entered by any Court having
jurisdiction. Any provisional remedy which, but for this provision to arbitrate
disputes, would be available at law, shall be available to the parties hereto
pending the final word of the arbitrator.
13. Injunctive Relief. The parties hereto recognize that irreparable
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damage may result to the Company and its business and properties if Employee
fails or refuses to perform his obligations under this Agreement and that the
remedy at law for any such failure or refusal may be inadequate. Accordingly,
notwithstanding the provisions of Paragraph 12 hereof to arbitrate disputes
arising hereunder, it is understood that the Company has not waived its rights
to seek any provisional remedies (including, without limitation, injunctive
relief) and damages. The institution of any arbitration proceedings shall not
bar injunctive relief, or any other provisional remedy, pending the final award
of the arbitrators.
14. Absence of Restrictions. Employee represents and warrants that he
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is not a party to any agreement or contract pursuant to which there is any
restriction or limitation upon his entering into this Agreement or performing
the services called for by this Agreement.
15. Further Instruments. Employee will execute and deliver all such
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other further instruments and documents as may be reasonably necessary to carry
out the purposes of this Agreement, or to confirm, assign or convey to the
Company any products, designs, processes, discoveries, materials, ideas,
creations, inventions or properties referred to in Paragraph 11 hereof,
including the execution of all patent, design patent, copyright, trademark or
trade name applications.
16. Invalidity and Severability. If any provisions of this Agreement
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are held invalid or unenforceable, such invalidity or unenforceability shall not
affect the other provisions of this Agreement, and, to that extent, the
provisions of this Agreement are intended to be and shall be deemed severable.
In particular and without limiting the foregoing sentence, if any provision of
Paragraph 10 of this Agreement shall be held to be invalid or unenforceable by
reason of geographic or business scope or the duration thereof, such invalidity
or unenforceability shall attach only to such provisions and shall not affect or
render invalid or unenforceable any other provisions of this Agreement, and any
such provision of this Agreement shall be construed as if the geographic or
business scope or the duration of such provision had been more narrowly drawn so
as not to be invalid or unenforceable.
17. Notices. Any notice required or permitted to be given under this
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Agreement shall be sufficient if in writing and if sent by registered or
certified mail, telegram, or overnight courier as follows:
As to Employee: Xxxxxxx X. Ice
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Integrated Consulting Services, Inc.
000 Xxxxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
with a copy to: Seiller Xxxxxxxx LLC
Xxxxxxxxx Tower, 22nd Floor
000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attn: Xxxx X. Xxxxxxx
As to the Company: Orbit International Corp.
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00 Xxxxx Xxxxx
Xxxxxxxxx, Xxx Xxxx 00000
Attn: Chief Executive Officer
with a copy to: Xxxxxxxx Xxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx X. Xxxxxxx, Esq.
or to such other address as either party hereto may designate by notice given in
accordance with this Agreement.
18. Assignment. A party hereto may not assign this Agreement or any
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rights or obligations hereunder without the consent of the other party hereto;
provided, however, that upon the sale or transfer of all or substantially all of
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the assets of the Company, or upon the merger by the Company into, or the
combination with, another corporation, this Agreement will inure to the benefit
of and be binding upon the person, firm or corporation purchasing such assets,
or the corporation surviving such merger or consolidation, as the case may be,
and the Company shall require any such person, firm or corporation to expressly
assume the Company's obligations and liabilities hereunder. The provisions of
this Agreement, where applicable, are binding upon the heirs of Employee and
upon the successors and assigns of the parties hereto.
19. Waiver of Breach. Waiver by either party of a breach of any
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provision of this Agreement by the other shall not operate or be construed as a
waiver of any subsequent breach by such other party.
20. Entire Agreement. This document, together with the SPA, contains
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the entire agreement of the parties as to the subject matter hereof and
supersedes and replaces all prior oral or written agreements between the
parties. This Agreement may not be changed orally, but only by an amendment in
writing signed by the party against whom enforcement of any waiver, change,
modification, extension or discharge is sought.
21. Applicable Law. This Agreement shall be construed, enforced and
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governed by and under the laws of the State of Kentucky, without regard to
conflict of laws principles, in accordance with the laws of the State of
Kentucky.
SIGNATURE PAGE FOLLOWS
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
EMPLOYEE:
____________________________
Xxxxxxx X. Ice
THE COMPANY:
Integrated Consulting Services, Inc.
By: ____________________________
Xxxxxx Sunshine
Chief Executive Officer
