Executive Services Agreement JMAR Technologies, Inc. / Tatum - Ned Hall September 2007
EXHIBIT
10.12
JMAR
Technologies, Inc. / Xxxxx - Xxx Xxxx
September
2007
September
14, 2007
C.
Neil
Beer, Ph.D.
President
& CEO
JMAR
Technologies, Inc.
00000
Xxxxxxxxxx Xxxxx
Xxx
Xxxxx, XX 00000
Dear
Xxxx:
Xxxxx,
LLC (“Xxxxx,” “we,” or “us”) is pleased that JMAR Technologies, Inc. (the
“Company,” “you” or “your”) desires to employ Xxxxxx X. (“Xxx”) Xxxx, a member
of Xxxxx (the “Employee”), to serve as the Chief Financial Officer of the
Company. This letter along with the terms and conditions attached as
Exhibit A and any other exhibits or schedules attached hereto (collectively,
the
“Agreement”) confirms our mutual understanding of the terms and conditions upon
which we will make available to you the Employee and Xxxxx’x intellectual
capital to the Employee for use in connection with the Employee’s employment
relationship with you.
Effective
as of September 17, 2007, the Employee will become your employee serving in
the
capacity set forth above and, if applicable, a duly elected or appointed officer
of the Company. The Employee will work on a full-time basis and be
subject to the supervision, direction and control of and report directly to
you
and the Company’s Board of Directors. While the Employee will remain
a member of Xxxxx and have access to Xxxxx’x intellectual capital to be used in
connection with the Employee’s performance of his duties as CFO of the Company,
we will have no supervision, direction or control over the Employee with respect
to the services provided by the Employee to you.
For
access to Xxxxx’x intellectual capital, staff and other resources of Xxxxx, you
will pay directly to Xxxxx a fee of $2,500 per month for the first twelve months
plus a one-time issuance of shares of common stock equal to $2,000 to be issued
as soon as practicable following the execution of this agreement (“Fees”). After
the first year, the Xxxxx fee will be $2,667 per month. After 36 months, the
fees will be reduced to $1,000 per month for each month Employee is employed
by
you.
In
addition, with respect to any cash Bonus (as defined below) otherwise to be
paid
to the Employee, you agree to pay 15% of such cash Bonus directly to Xxxxx,
in
lieu of the Employee. In addition, you acknowledge that the Employee
will share with Xxxxx 15% of any cash proceeds realized from any equity or
other
Bonus that the Employee may be granted or provided. For purposes
hereof, “Bonus” means any bonus paid, granted or provided by the Company to the
Employee in equity, cash or other consideration, in each case, in connection
with services rendered by the Employee to the Company.
Payments
to the Employee shall be made in accordance with the Company’s standard payroll
and expense reimbursement policies. The Company will pay Xxxxx the
monthly Fees one month in advance, with the first payment due upon execution
of
this Agreement. The second payment and every payment thereafter will
be paid in advance before each month-end related to the following
month. Payment instructions are set forth in Exhibit A.
1
Except
as
specifically provided for herein, you will have no obligation to provide the
Employee with any health insurance benefits or equity or cash
bonuses. In lieu of the Employee participating in the
Company-sponsored employee health insurance plans, the Employee will remain
on
his or her current health insurance plans. You will reimburse the Employee
for
amounts paid by the Employee for health insurance for himself/herself and
his/her family of up to an amount per month available under the Company’s
benefit plan upon presentation of reasonable documentation of premiums paid
by
the Employee. In accordance with the U.S. federal tax law, such
amount will not be considered reportable W-2 income, but instead, non-taxable
benefits expense.
As
an
employee, the Employee will be eligible for any Company employee retirement
and/or 401(k) plan and for vacation and holidays consistent with the Company’s
policy as it applies to senior management. The Employee will be
exempt from any delay periods otherwise required for vacation and holiday
eligibility.
You
will
have the opportunity to make the Employee a permanent, full-time member of
Company management at any time during the term of this Agreement by entering
into another form of Xxxxx agreement, the terms of which will be negotiated
at
such time.
As
a
condition to providing the services hereunder, we require a security deposit
in
an amount equal to $5,000 (the “Deposit”), which will only be used by us under
the limited circumstances described on Exhibit A. The Deposit
received by Xxxxx pursuant to the March 16, 2007 agreement between the Company
and Xxxxx will serve as the Deposit hereunder.
The
Company will provide Xxxxx or the Employee with written evidence that the
Company maintains directors’ and officers’ insurance covering the Employee in an
amount reasonably acceptable to the Employee at no additional cost to the
Employee, and the Company will maintain such insurance at all times while this
Agreement remains in effect. Furthermore, the Company will maintain
such insurance coverage with respect to occurrences arising during the term
of
this Agreement for at least three years following the termination or expiration
of this Agreement or will purchase a directors’ and officers’ extended reporting
period or “tail” policy to cover the Employee.
We
appreciate the opportunity to serve you and believe this Agreement accurately
reflects our mutual understanding. We would be pleased to discuss
this Agreement with you at your convenience. If the foregoing is in
accordance with your understanding, please sign a copy of this Agreement and
return it to my attention.
Sincerely,
Xxxxx,
LLC
/s/
XXXX
X. XXXXXXX
Xxxx
X.
Xxxxxxx
Associate
Managing Partner
Accepted
and agreed:
JMAR
Technologies, Inc.
By:/s/
C.
NEIL BEER
Name: C.
Neil Beer, Ph.D.
Title: President
& CEO
2
Exhibit
A
Terms
and Conditions
1. Relationship
of the Parties. The parties agree that Xxxxx will be serving
the Company as an independent contractor for all purposes and not as an
employee, agent, partner of, or joint venturer with the Company and that the
Employee will be serving the Company as an employee of the Company for all
purposes and not as an independent contractor.
2. Payment
Terms. Payments to Xxxxx should be made by electronic
transfer in accordance with the instructions set forth below or such alternative
instructions as provided by Xxxxx from time to time. In lieu of
terminating this Agreement, Xxxxx may suspend the provision of services
(including the Employee’s services) if amounts owed are not paid in accordance
with the terms of this Agreement.
Bank
Name: Xxxxx Fargo, N.A.
Branch: San
Francisco
Account
Name: Xxxxx, LLC
Account
Number: 4121546642
Routing
Number for ACH Payments: 000000000
Swift
Code: XXXXXX0X
Please
reference Company name in the body of the payment.
3. Deposit. If
the Company breaches this Agreement or the terms of the employment arrangement
between Employee and the Company and fails to cure such breach as provided
for
herein or therein, Xxxxx will be entitled to apply the Deposit to its or the
Employee’s damages resulting from such breach. In the event the
Deposit falls below the amount required, the Company will pay Xxxxx an
additional amount equal to the shortfall. Upon the expiration or
termination of this Agreement, Xxxxx will return to the Company the balance
of
the Deposit remaining after application of any amounts to damages as provided
for herein, including, without limitation, unfulfilled payment obligations
of
the Company to Xxxxx or the Employee.
4. Termination.
(a) This
Agreement will terminate immediately upon the effective date of termination
or
expiration of the Employee’s employment with the Company or upon the Employee
ceasing to be a member of Xxxxx.
(b) Notwithstanding
subsection (a) above, either party may terminate this Agreement at anytime
for
any reason upon written notice to the other party.
(c) The
expiration or termination of this Agreement will not destroy or diminish the
binding force and effect of any of the provisions of this Agreement that
expressly, or by reasonable implication, come into or continue in effect on
or
after such expiration or termination, including, without limitation, provisions
relating to payment of fees and expenses (including witness fees and expenses),
hiring the Employee, governing law, arbitration, limitation of liability, and
indemnity.
5. Hiring
the Employee Outside of a Xxxxx Agreement. The parties
recognize and agree that Xxxxx is responsible for introducing the Employee
to
the Company. Therefore, if, at any time during the term of this Agreement or
the
12-month period following the termination or expiration of this Agreement,
other
than in connection with this Agreement or another Xxxxx agreement, the Company
employs the Employee, or engages the Employee as an independent contractor,
Xxxxx will be entitled to receive as a placement fee an amount equal to
forty-five percent (45%) of the Annualized Compensation (as defined below).
The amount will be due and payable to Xxxxx upon written demand to the
Company. “Annualized Compensation” means the equivalent of the
Employee’s salary with the Company calculated on a full-time annual basis plus
the maximum amount of any bonus for which the Employee was eligible with respect
to the then-current bonus year.
3
6. Warranties
and Disclaimers. It is understood that Xxxxx does not have a
contractual obligation to the Company other than to provide the Employee to
the
Company and to provide the Employee access to Xxxxx’x intellectual capital to be
used in connection with the Employee’s employment relationship with the
Company. The Company acknowledges that any information, including any
resources delivered through Xxxxx’x proprietary information and technology
system, will be provided by Xxxxx as a tool to be used at the discretion of
the
Company. Xxxxx will not be responsible for any action taken by the
Company in following or declining to follow any of Xxxxx’x or the Employee’s
advice or recommendations. Xxxxx represents to the Company
that Xxxxx has conducted its standard screening and investigation procedures
with respect to the Employee becoming a member of Xxxxx, and the results of
the
same were satisfactory to Xxxxx. Xxxxx disclaims all other
warranties, whether express, implied or statutory. Without
limiting the foregoing, Xxxxx makes no representation or warranty as to the
services provided by the Employee, or the accuracy or reliability of reports,
projections, certifications, opinions, representations, or any other information
prepared or made by Xxxxx or the Employee (collectively, the “Information”) even
if derived from Xxxxx’x intellectual capital, and Xxxxx will not be liable for
any claims of reliance on the Information or that the Information does not
comply with federal, state or local laws or regulations. The services
provided by Xxxxx hereunder are for the sole benefit of the Company and not
any
unnamed third parties. The services will not constitute an audit,
review, or compilation, or any other type of financial statement reporting
or
attestation engagement that is subject to the rules of the AICPA or other
similar state or national professional bodies and will not result in an opinion
or any form of assurance on internal controls.
7. Limitation
of Liability; Indemnity.
(a) The
liability of Xxxxx in any and all categories and for any and all causes arising
out of this Agreement, whether based in contract, tort, negligence, strict
liability or otherwise will, in the aggregate, not exceed the actual Fees paid
by the Company to Xxxxx over the previous two months’ of the
Agreement. In no event will Xxxxx be liable for incidental,
consequential, punitive, indirect or special damages, including, without
limitation, any interruption or loss of business, profit or
goodwill. As a condition for recovery of any liability, the Company
must assert any claim against Xxxxx within three months after discovery or
60
days after the termination or expiration of this Agreement, whichever is
earlier.
(b) The
Company agrees to indemnify Xxxxx and the Employee to the full extent permitted
by law for any losses, costs, damages, and expenses (including reasonable
attorneys’ fees), as they are incurred, in connection with any cause of action,
suit, or other proceeding arising in connection with the Employee’s services to
the Company.
8. Governing
Law, Arbitration, and Witness Fees.
(a) This
Agreement will be governed by and construed in accordance with the laws of
the
State of Georgia, without regard to conflicts of laws provisions.
(b) If
the
parties are unable to resolve any dispute arising out of or in connection with
this Agreement, the parties agree and stipulate that any such disputes will
be
settled by binding arbitration in accordance with the Commercial Arbitration
Rules of the American Arbitration Association (“AAA”). The
arbitration will be conducted in the Atlanta, Georgia office of the AAA by
a
single arbitrator selected by the parties according to the rules of the AAA,
and
the decision of the arbitrator will be final and binding on both
parties. In the event that the parties fail to agree on the selection
of the arbitrator within 30 days after either party’s request for arbitration
under this Section, the arbitrator will be chosen by the AAA. The
arbitrator may in his or her discretion order documentary discovery but will
not
allow depositions without a showing of compelling need. The
arbitrator will render his or her decision within 90 days after the call for
arbitration. Judgment on the award of the arbitrator may be entered
in and enforced by any court of competent jurisdiction. The
arbitrator will have no authority to award damages in excess or in contravention
of this Agreement and may not amend or disregard any provision of this
Agreement, including this Section. Notwithstanding the foregoing,
either party may seek appropriate injunctive relief from any court of competent
jurisdiction, and Xxxxx may pursue payment of undisputed amounts through any
court of competent jurisdiction.
(c) In
the
event any member or employee of Xxxxx (including, without limitation, the
Employee to the extent not otherwise entitled in his or her capacity as an
employee of the Company) is requested or authorized by the Company or is
required by government regulation, subpoena, or other legal process to produce
documents or appear as witnesses in connection with any action, suit or other
proceeding initiated by a third party against the Company or by the Company
against a third party, the Company will, so long as Xxxxx is not a party to
the
proceeding in which the information is sought, reimburse Xxxxx for its member’s
or employee’s professional time (based on customary rates) and expenses, as well
as the fees and expenses of its counsel (including the allocable cost of
in-house counsel), incurred in responding to such requests.
4
9. Miscellaneous.
(a) This
Agreement constitutes the entire agreement between the parties with regard
to
the subject matter hereof and supersede any and all agreements, whether oral
or
written, between the parties with respect to its subject matter. No
amendment or modification to this Agreement will be valid unless in writing
and
signed by both parties.
(b) If
any
portion of this Agreement is found to be invalid or unenforceable, such
provision will be deemed severable from the remainder of this Agreement and
will
not cause the invalidity or unenforceability of the remainder of this Agreement,
except to the extent that the severed provision deprives either party of a
substantial portion of its bargain.
(c) Neither
the Company nor Xxxxx will be deemed to have waived any rights or remedies
accruing under this Agreement unless such waiver is in writing and signed by
the
party electing to waive the right or remedy. The waiver by any party
of a breach or violation of any provision of this Agreement will not operate
or
be construed as a waiver of any subsequent breach of such provision or any
other
provision of this Agreement.
(d) Neither
party will be liable for any delay or failure to perform under this Agreement
(other than with respect to payment obligations) to the extent such delay or
failure is a result of an act of God, war, earthquake, civil disobedience,
court
order, labor dispute, or other cause beyond such party’s reasonable
control.
(e) The
Company may not assign its rights or obligations under this Agreement without
the express written consent of Xxxxx. Nothing in this Agreement will
confer any rights upon any person or entity other than the parties hereto and
their respective successors and permitted assigns and the Employee.
(f) The
Company agrees to reimburse Xxxxx for all costs and expenses incurred by Xxxxx
in enforcing collection of any monies due under this Agreement, including,
without limitation, reasonable attorneys’ fees.
(g) The
Company agrees to allow Xxxxx to use the Company’s logo and name on Xxxxx’x
website and other marketing materials for the sole purpose of identifying the
Company as a client of Xxxxx. Xxxxx will not use the Company’s logo
or name in any press release or general circulation advertisement without the
Company’s prior written consent.
5
