Exhibit 10.50
TERMINATION, CONSULTING AND CONFIDENTIALITY AGREEMENT
THIS TERMINATION, CONSULTING AND CONFIDENTIALITY AGREEMENT (the
"AGREEMENT") is made effective as of the 7th day of June, 1999 ("EFFECTIVE
DATE"), by and between NHancement Technologies Inc., a Delaware corporation
(the "COMPANY"), and Xxxxx X. Xxxxxxxxx, a resident of the State of Nevada
("CONSULTANT").
R E C I T A L S
A. The Company and Consultant are parties to an employment
agreement dated October 25, 1996, in which the Company and consultant agreed
to an employment term starting on February 3, 1997 and ending on February 3,
2000. As of April 17, 1998 Consultant terminated his employment with the
Company ("RESIGNATION DATE").
B. NHancement wishes to retain Consultant as a consultant to
provide consulting services to NHancement starting from the Resignation Date
until February 3, 2000 ("TERM"). The scope and duties of Consultant will be
mutually agreed to by Consultant and the Chief Executive Officer of
NHancement from time to time.
NOW, THEREFORE, in consideration of the foregoing recitals and in
consideration of the mutual covenants contained herein, the parties agree as
follows:
A G R E E M E N T
1. RESIGNATION. Effective as of the Resignation Date, (i)
Consultant resigned as Vice President of Sales of the Company and the
President of VoicePlus, Inc. ("VPI"), a wholly-owned subsidiary of the
Company, (ii) the Company removed Consultant as the responsible party on all
matters related to the Company, including without limitation, Consultant's
capacities as guarantor on a loan subsequently used to purchase an
automobile, 1005 Volvo sedan, for use by VPI and as trustee of VPI's 401(k)
Plan, adopted and implemented by VPI on January 1, 1991, (iii) Consultant
returned his office keys, security card, card credit(s), any and all records,
documents, notes, memoranda specifications, devices and any and all other
Company property or material relating to the Company's business in his
possession.
2. SEVERANCE PAYMENT. As of the Resignation Date Consultant
was entitled to and subsequently received a one-time payment for Consultant's
Thirty-Two and One-Half (32 1/2) days of accrued vacation days which equals
an aggregate of Thirty-Nine Thousand Five Hundred Dollars ($39,000).
3. ADJUSTMENT TO UNSECURED NOTE. The Company has executed and
delivered to Consultant a Non-Negotiable Unsecured Promissory, No. B-02,
dated February 3, 1997, ("UNSECURED NOTE"), pursuant to the terms of that
certain Agreement and Plan of Merger, dated October 25, 1996, and entered
into by and among the Company, Consultant, VPI and VPI Acquisition
Corporation, a wholly-owned subsidiary of the Company ("MERGER AGREEMENT").
As of the Effective Date, the Company owes Consultant $143,750 on the
Unsecured Note. Consultant has agreed to accept a cash payment of $27,114 and
the balance in Common Stock of the Company, based on the closing bid price of
the Common Stock on the last trading day prior to the Effective Date of this
Agreement. As of June 4, 1999 the closing bid price of the Common Stock was
$1.00 per share. The Unsecured Note shall be cancelled upon receipt of the
cash payment and issuance of the Common Stock.
4. CONTINUATION OF BENEFITS. As of the Resignation Date,
Consultant ceased to be covered by the Company's medical plans and group
insurance in which Consultant was enrolled. Consultant was entitled to elect
his COBRA right to extend coverage and expense and the Company provided
Consultant with the necessary forms to make his election. As of the Effective
Date of this Agreement, Consultant will be insured under Company's health
insurance policies, if allowed by Company's insurance carrier.
5. CONSULTING SERVICES. The scope and duties of Consultant's
services will be mutually agreed upon, from time to time, by the Chief
Executive Officer of the Company and Consultant (the "SERVICES"). Consultant
will perform such Services in a diligent and workmanlike manner and in
accordance with the best practices of Consultant's industry. All Services
will be performed at a mutually agreed upon site.
6. RELATIONSHIP OF THE PARTIES. Consultant enters into this
Agreement as, and shall continue to be, an independent contractor and
consultant. Under no circumstances shall Consultant or any of Consultant's
employees or agents, look to NHancement as his employer, or as a partner,
agent or principal. Neither Consultant nor any of Consultant's employees or
agents shall be entitled to any benefits accorded to NHancement's employees,
including, without limitation, worker's compensation, disability insurance,
vacation or sick pay. Consultant shall be responsible for providing, at
Consultant's expense, and in Consultant's name, disability, worker's
compensation and other insurance as well as licenses and permits usual or
necessary for conducting the Services.
7. COMPENSATION AND REIMBURSEMENT. From April 18, 1998 through
February 2, 1999, Consultant shall receive One Hundred Fifteen Thousand
Dollars ($115,000) per calendar year or a portion thereof for a period less
than a calendar year, payable in equal monthly installments on the first day
of each month, as his compensation for the Services rendered to the Company
provided, however, that the compensation due Consultant for the months of
June, July and August, 1998 shall be two-thirds (2/3) of such amount.
Notwithstanding the Term of this Agreement as defined above, from February 2,
1999 through February 2, 2001, Consultant shall receive One Hundred Fifty
Thousand Dollars ($150,000) per calendar year or a portion thereof, payable
in equal monthly installments due on the first day of each month, as his
compensation for the Services rendered to the Company during the Term of this
Agreement. As of June 1, 1999, the Company owes Consultant $133,364 in
accumulated consulting compensation and interest. As of the Effective Date,
Consultant has agreed to forgive this debt and, in consideration therefore,
the Company shall issue 50,000 warrants to Consultant. The warrants shall
have an expiration date of June 7, 2002 and shall have an exercise price of
$1.0375 per share which is the average closing bid price of the stock for the
five (5) trading days immediately preceding the Effective Date of this
Agreement.
The Company, at its own discretion, will reimburse any reasonable
expenses incurred by Consultant in connection with the performance of the
Services herein. Consultant shall be solely responsible for any and all
taxes, social security contributions or payments, disability insurance,
unemployment taxes, and other payroll type taxes applicable to such
compensation. Consultant hereby indemnifies the Company and holds the Company
harmless from, any claims, losses, costs, fees, liabilities, damages or
injuries suffered by the Company arising out of Consultant's failure to
perform its obligations in this Section 7.
8. PERSONNEL. Consultant represents and warrants to NHancement
that Consultant's personnel will have sufficient expertise, training and
experience to accomplish the Services. Consultant agrees that all his
personnel shall be compensated, taxes withheld, and other benefits made
available as required by applicable law and regulations.
9. TERMINATION OF CONSULTING SERVICES.
9.1 Notwithstanding any other provision of this Agreement,
the Consultant's Services may be terminated:
9.1.1 By NHancement for "Cause" (defined
below), upon forty-five (45) days' notice to Consultant setting forth in
writing NHancement's election to terminate this Agreement and the specific
reasons for termination, and if, within such forty-five (45) days, Consultant
was given the right to present his position regarding the termination to the
NHancement's Board of Directors ("BOARD") and after such hearing a majority
of the Board ratified the decision to terminate his Services. For purposes of
this Agreement, "CAUSE" justifying the termination of this Agreement by
NHancement is defined as: (1) willful dishonesty towards, fraud upon, crime
against, misrepresentation, embezzlement, deliberate or attempted injury or
bad faith action with respect to NHancement; (2) willful failure or refusal
to perform the Services required of him hereby; or (3) Consultant's
conviction of any felony (whether in connection with Consultant's affairs or
otherwise).
9.1.2 By either party for any material breach
of any of the terms of this Agreement, if such material breach has not been
substantially cured within thirty (30) days following written notice of such
breach from the party aggrieved to the other specifying the breach relied on
for such termination, and failure of such party to cure such breach within
such period or, if cure cannot reasonably be effected within such thirty (30)
day period, if the party does not commence to cure the breach within such
thirty (30) day period and thereafter pursue such cure continuously and with
due diligence, until cure has been fully effected. The parties hereby agree
that NHancement's failure to make any payment due hereunder within five (5)
business days after receipted notice from Consultant of default shall be
deemed to be a material breach of this Agreement.
9.1.3 In the event of Consultant's death during
the term of his Services.
9.1.4 By Consultant upon sixty (60) days notice
to the Company.
9.2 In the event of termination of this Agreement by Consultant
upon material breach by the Company, NHancement's obligation to pay One
Hundred percent (100%) of the Compensation pursuant to Section 7 hereunder
shall continue for the duration of the remaining Term; all other obligations
of the parties hereunder shall terminate except for the obligations set forth
in Section 11 (Confidentiality).
9.3 In the event of termination of this Agreement by the
Company without cause, NHancement's obligation to pay One Hundred percent
(100%) of the Compensation pursuant to Section 7 hereunder shall continue for
the duration of the remaining Term; all other remaining obligations of the
parties hereunder shall terminate except for the obligations set forth in
Section 11 (Confidentiality).
10. ASSIGNMENT OF INVENTIONS: WORK PRODUCT.
10.1 If at any time during the Term of this Agreement,
Consultant shall (either alone or with others) make, conceive, discover or
reduce to practice any invention, modification, discovery, design,
development, improvement, process, software program, work of authorship,
documentation, formula, data, technique, know-how, secret or intellectual
property right whatsoever or any interest therein (whether or not patentable
or registrable under copyright or similar statutes or subject to analogous
protection) (each, "DEVELOPMENT" and collectively "DEVELOPMENTs") that (i)
relates in any way to the business of the Company or any of its subsidiaries,
or any of the products or services being developed, manufactured or sold by
the Company or its subsidiaries as of the Effective Date of this Agreement
and of which Consultant would reasonably be aware, or (ii) results from tasks
assigned to him by the Company or its subsidiaries, or (iii) results from the
use of premises on personal property (whether tangible or intangible) owned,
leased or contracted for by the Company or its subsidiaries, such
Developments and the benefits thereof shall immediately become the sole and
absolute property of the Company and its assigns.
10.2 Consultant shall promptly disclose to NHancement
(or any persons designated by it) each such Development and hereby assigns
any rights he may have or acquire in the Developments and benefits and/or
rights resulting therefrom to NHancement and its assigns without further
compensation and shall communicate, without cost or delay, and without
publishing the same, all available information relating thereto (with all
necessary plans and models) to the Company.
10.3 Consultant hereby represents and warrants that all
Developments by him during the time he worked or was associated with VPI
became assets of, and were owned by VPI; and he hereby assigns any rights he
may have or acquire in such Developments and benefits and/or rights resulting
therefrom to the Company and its assigns without further compensation and
shall communicate, without cost or delay, and without publishing the same,
all available information relating thereto (with all necessary plans and
models) to the Company.
10.4 Upon disclosure of each Development to NHancement,
Consultant will, during his Services and at any time thereafter, at the
request and cost of NHancement, sign execute, make and do all such deeds,
documents, acts and things as NHancement and its duly authorized agents may
reasonably require too apply for, obtain and vest in the name of the Company
letters patent, copyrights or other analogous protection in any country
throughout the world and when so obtained or vested to renew and restore the
same; and to defend any opposition proceedings in respect of such
applications and any opposition proceedings or petitions or applications for
revocation of such letters patent, copyright or other analogous protection.
10.5 In the event the Company is unable, after
reasonable effort, to secure Consultant's signature on any letters patent,
copyright or other analogous protection relating to a Development whether
because of any physical or mental incapacity or for any other reason
whatsoever, Consultant hereby irrevocably designates and appoints NHancement
and its duly authorized officers and agents as his agent and
attorney-in-fact, to act for and in his behalf and stead to execute and file
any such application or applications and to do all other lawfully permitted
acts to further the prosecution and issuance of letters patent, copyright or
other analogous protection thereon with the same legal force and effect as if
executed by Consultant.
11. NON-COMPETITION; CONFIDENTIALITY.
11.1 NO COMPETITION. Consultant will not, anywhere in
the world, without the prior written approval of the Company, during the Term
of the Agreement engage, directly or indirectly, in a "Competing Business,"
as defined below, whether as a sole proprietor, partner, employee, director,
consultant, independent contractor, or in any other manner by which
Consultant holds any beneficial interest in a Competing Business, derives any
income from a Competing Business, or provides any service to a Competing
Business. "COMPETING BUSINESS" shall mean the design,
development, manufacture or marketing of products in any line of business in
which the Company or its subsidiaries is, or has in the past been, involved,
or is or has planned or considered involvement in, of which Consultant,
acting in his capacity as either Consultant or Director of the Company during
the Term of this Agreement, would be reasonably expected to have knowledge;
PROVIDED, HOWEVER, that Consultant's activities in connection with his
ownership and operation of Intermedia Technologies Inc. and Consultant's
employment by a manufacturer of voice processing or telecommunications
equipment not manufactured by the Company or its subsidiaries ("TELCO") shall
be excluded from such definition, to the extent that such Telco is not
engaged in Competing Business. In the event that Telco enters into Competing
Business after Consultant accepts his engagement or relationship with Telco,
within a reasonable time of learning of such event by Consultant (but in no
event longer than 30 days), Consultant shall notify the Company and request a
written approval from the Company for Consultant's continued engagement or
relationship with Telco, which approval shall not be unreasonably withheld.
If such written approval is denied by NHancement (the "DENIAL"), Consultant
shall terminate his engagement or relationship with Telco within a reasonable
time agreed upon between the Company and Consultant. Failing to terminate
such engagement or relationship by Consultant after the Denial shall
constitute a material breach of this Section. The provisions of this Section
will not, however, restrict Consultant from owing less than One percent (1%)
of the outstanding stock of a publicly-traded corporation engaged in a
Competing Business.
11.2 NO SOLICITATION OF CUSTOMERS. Consultant will not,
directly or indirectly, until the lapse of expiration of the Term of this
Agreement, without the prior written approval of NHancement which consent
shall not be unreasonably withheld, call upon, cause to be called upon,
solicit or assist in the solicitation of, any customer or potential customer
of the Company or its subsidiaries for the purpose of interfering with
Company's contractual relationship with its customer or attempt diverting any
existing or future business of such customers to a Competing Business.
11.3 NO HIRING OF EMPLOYEES. Consultant will not,
directly or indirectly, during the Term of this Agreement, without the prior
written approval of the Company which approval shall not be unreasonably
withheld, employ, engage, or seek to employ or engage, directly or
indirectly, any employee of the Company or its subsidiaries in a Competing
Business.
11.4 CONFIDENTIALITY. Consultant will not, without the
Company's prior written approval, which approval shall not be unreasonably
withheld reveal to any person or entity any of the trade secrets or
confidential information concerning the organization, business or finances of
the Company or its subsidiaries or of any third party which the Company or
its subsidiaries is under an obligation to keep confidential (including, but
not limited to, trade secrets or confidential information respecting
inventions, products, designs, methods, know-how, techniques, systems,
processes, software programs, works of authorship, customer lists, projects,
plans and proposals), except as may be required in the ordinary course of
performing his duties as a Consultant of NHancement, and he shall keep secret
all matters entrusted to him and shall not use or attempt to use any such
information in any manner which may injure or cause loss or may be calculated
to injure or cause loss whether directly or indirectly to he Company or its
subsidiaries.
11.5 EQUITABLE REMEDIES. The Services to be rendered by
Consultant and the information disclosed to Consultant prior to and during
the Term hereof are of a unique and special character, and any breach of
Section 3 or 4 hereof will cause the Company immediate and irreparable injury
and damage, for which monetary relief would be inadequate or difficult to
quantify. Therefore, the Company will be entitled to, in addition to all
other remedies available to it, injunctive relief and specific performance to
prevent a breach and to secure the enforcement of all provisions of Sections
10 and 11 hereof. Injunctive relief may be granted immediately upon the
commencement of any such action.
12. MISCELLANEOUS PROVISIONS.
12.1 MUTUAL RELEASE. The parties hereby mutually
release and discharge the other party from any and all debts, demands,
actions, causes of action, suits, claims or liabilities of any kind, both at
law and in equity, arising from or in any manner related to Consultant's
employment prior to the Resignation Date or the termination of such
employment. This release includes any claim for wrongful discharge, breach of
the covenant of good faith and fair dealing, defamation, interference, fraud
or misrepresentation, benefits, vacation pay, severance or other compensation
of any sort, harassment or discrimination on the basis of race, color,
national origin, religion, age, sex, sexual orientation, disability or
marital status, and/or violation of any and all statutes, rules, regulations
or ordinances whether state, federal or local, including without limitation
the Fair Employment and Housing Act, as amended, Title VII or the Civil
Rights Act, as amended, the Age Discrimination in Employment Act of 1967, as
amended and the Americans with Disabilities Act. The parties agree that this
waiver and release do not apply to any rights or claims that may arise from
events occurring after the date the parties sign this Agreement.
12.2 FREE NEGOTIATION OF AGREEMENT. The parties
acknowledge that this Agreement was freely entered into and negotiated and
that both parties had the opportunity to make proposals, counter proposals
and to exchange information and that neither party took a fixed position in
regard to reaching this Agreement.
12.3 LEGAL AND FINANCIAL ADVICE. Consultant further
acknowledges that he has been advised to consult an attorney and a financial
advisor for advice regarding the effect of this Agreement and that he was
advised to take at least twenty-one (21) days to consider it before signing
it. Consultant understands that he has the right to revoke this Agreement for
seven (7) days after signing and this Agreement shall not be effective until
the revocation period has expired. Consultant understands that if he revokes
this Agreement within seven (7) days after signing, he shall not receive the
independent contractor position with the Company and the Addendum in Exhibit
A and other benefits provided for in the preceding sections of this
agreement. The Company agrees to pay for Consultant's legal and financial
advisor fees related to this Agreement, up to a maximum of $10,000.
12.4 WAIVER. The parties have read and fully understand
the statutory language of Section 1542 of the Civil Code of the State of
California and, having been so apprised, and except as provided herein, agree
nevertheless to waive any and all rights or benefits which they may now have,
or in the future may have, under the terms of Section 1542 of the California
Civil Code which states:
"SECTION 1542. GENERAL RELEASE; EXTENT. A general
release does not extend to claims which the creditor
does not know or suspect to exist in his favor at
the time of executing the Release, which if known by
him must have materially affected his settlement
with the debtor."
12.5 ENTIRE AGREEMENT; AMENDMENTS. This Agreement
constitutes the entire understanding between the parties with respect to the
subject matter contained herein and supersedes any prior understandings and
agreements among them respecting such subject matter. This Agreement may be
amended, supplemented, or terminated only by a written instrument duly
executed by both parties.
12.6 HEADINGS. The headings in this Agreement are for
convenience of reference only and shall not affect its interpretation.
12.7 GENDER; NUMBER. Words of gender may be read as
masculine, feminine, or neuter, as required by context. Words of number may
be read as singular or plural, as required by context.
12.8 SEVERABILITY. If any provision of this Agreement
is held illegal, invalid, or unenforceable, such illegality, invalidity, or
unenforceability shall not affect any other provisions hereof. This Agreement
shall, in such circumstances, be deemed modified to the extent necessary to
render enforceable the provisions hereof.
12.9 NOTICES. All notices, requests, demands, waivers,
consents, approvals, or other communications required or permitted hereunder
shall be in writing and shall be deemed to have been given if delivered
personally, sent by receipted delivery by facsimile transmission, telegram or
telex, or sent by certified or registered mail or same day or overnight
courier service, postage prepaid, return receipt requested, to the following
addresses:
NHancement: NHancement Technologies Inc.
00000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Attention: Xx. Xxxxxxx X. Xxxx
Consultant: Xx. Xxxxx X. Xxxxxxxxx
000 Xxxxxxx Xxxx Xxxxx #00
Xxxxxxx Xxxxxxx, XX 00000
Notice of any change in any such address shall also be given in the
manner set forth above. Whenever the giving of notice is required, the giving
of such notice may be waived by the party entitled to receive such notice.
12.10 WAIVER. The failure of any party to insist upon
strict performance of any of the terms or conditions of this Agreement shall
not constitute a waiver of any of his rights hereunder.
12.11 ASSIGNMENT. Consultant may not assign any of his
rights or delegate any of his obligations hereunder, and such purported
assignment or delegation shall be void.
12.11 GOVERNING LAWS. THIS AGREEMENT SHALL BE GOVERNED
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA WITHOUT
REGARD TO ITS CHOICE OF LAW PRINCIPLES.
12.12 ATTORNEYS' FEES. In the event it becomes necessary
for either party hereunder to employ an attorney to enforce or interpret the
Agreement, the prevailing party, if any, shall be entitled to recover
reasonable attorneys' fees, costs and necessary disbursements from the
opposing party.
12.13 BINDING EFFECT. This Agreement shall be binding
upon, and inure to the benefit of, the successors, executors, heirs,
representatives, administrators and permitted assigns of the parties hereto.
Consultant shall have no right to assign this Agreement, by operation of law
or otherwise. Any such purported assignment shall be void.
[REMAINDER OF PAGE LEFT INTENTIONALLY BLANK. SIGNATURES APPEAR ON THE NEXT
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement
on the date first above written.
CONSULTANT:
/s/ XXXXX X. XXXXXXXXX
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Xxxxx X. Xxxxxxxxx
Date: June 7, 1999
NHANCEMENT TECHNOLOGIES INC.
By: /s/ XXXXXXX X. XXXX
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Xxxxxxx X. Xxxx
Its: President and Chief Executive Officer
Date: JUNE 7, 1999
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