EXHIBIT 10.6
ASSIGNMENT AND ASSUMPTION OF EMPLOYMENT AGREEMENT
BY AND AMONG HIENERGY TECHNOLOGIES, INC.,
HIENERGY MICRODEVICES, INC. AND XX. XXXXXX X. XXXXXXX
THIS ASSIGNMENT AND ASSUMPTION AGREEMENT (the "Agreement") is entered into
as of the 16th day of July, 2002, by and among HiEnergy Technologies, Inc. (the
"Parent" or the "Company"), a Washington corporation, HiEnergy Microdevices,
Inc. (the "Subsidiary"), a Delaware corporation, and Xx. Xxxxxx X. Magich
("Xxxxxxx"), individually (together, the "parties").
RECITALS
WHEREAS, an employment agreement (the "Employment Agreement") was entered
into by and between the Subsidiary and Xxxxxxx on March 6, 2002; and
WHEREAS, the Subsidiary desires to assign to the Parent and the Parent
desires to assume from the Subsidiary the Employment Agreement; and
WHEREAS, the Employment Agreement contains a provision (i) granting Xxxxxxx
an option to purchase 111,040 shares of Class A common stock of the Subsidiary
(the "Option"), which grant was approved by resolution of the Board of
Subsidiary at a meeting held on March 19, 2002, and (ii) promising to grant to
Xxxxxxx additional stock options (the "Additional Options") annually during the
term of the Employment Agreement; and
WHEREAS, a separate Stock Option Agreement will be executed between the
Parent and Xxxxxxx granting Xxxxxxx an Option to purchase 2,482,011 shares of
common stock of the Parent in exchange for canceling the Option; and
WHEREAS, the parties seek to amend the Employment Agreement with respect to
the Option and the Additional Options and to cancel the Option;
NOW THEREFORE, in consideration of the promises and mutual covenants set forth
in this Agreement, the parties hereby agree as follows:
1. AMENDMENT NO. 1 TO EMPLOYMENT AGREEMENT
a. Definitions; References. All capitalized terms used in this
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Amendment No. 1 to the Employment Agreement ("Amendment No. 1") not defined
herein shall have the meanings given them in the Employment Agreement.
References in this Amendment No. 1 and in the Employment Agreement to "this
Agreement," "herein," "hereto" and words of similar import shall mean the
Employment Agreement as modified by this Amendment No. 1.
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b. Effect of Amendment No. 1. This Amendment No. 1 modifies the
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Employment Agreement. The Employment Agreement, as amended by this Amendment
No. 1, is in full force and effect, and the parties hereby ratify and affirm the
same. In the event of any conflict between the provisions of the Employment
Agreement and this Amendment No. 1, the provisions of this Amendment No. 1 shall
control.
c. Amendment of Employment Agreement Section 4(d). The Employment
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Agreement Section 4(d) is hereby superseded and replaced in its entirety by the
following:
(d) Stock Options.
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The Company shall grant and issue to Xxxxxxx annually during the term
hereof five-year stock options at a rate of not less than one percent (1%)
per annum of the Company's common stock issued and outstanding at the end
of the year, such options to have an exercise price of the most recent arms
length sale or, if publicly traded, the average price for the preceding
thirty days. In no event shall Xxxxxxx receive, in the aggregate, in any
one year less than 10% of the total number of options granted by the
Company for services in that year.
d. Purpose and Effect. The purpose of this Amendment No. 1 is to
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revise the provision concerning the grant of the Additional Options to allow for
the grant of the stock options from the Parent through one or more separate
stock option agreements.
2. CANCELLATION OF OPTION
Xxxxxxx hereby agrees to rescind the grant of the Option to him by the
Company through the Employment Agreement. The Parties agree that the Option is
hereby cancelled. Upon execution of this Agreement and effective as of April
24, 2002, Xxxxxxx no longer holds the Option to purchase shares of the
Subsidiary's or the Company's common stock pursuant to the Employment Agreement.
Upon execution of this Agreement and effective as of April 24, 2002, the
Subsidiary no longer has any stock options outstanding in the name of Xxxxxxx
nor has any obligation to issue stock options to Xxxxxxx.
3. ASSIGNMENT AND ASSUMPTION
The Subsidiary hereby assigns all of its right, title and interest in and
to the Employment Agreement to the Parent. The Parent hereby accepts such
assignment, assumes all obligations of the Subsidiary arising out of the
Employment Agreement and agrees to indemnify and hold the Subsidiary harmless
from any liabilities, claims or demands based upon or arising under the
Employment Agreement.
4. OTHER PROVISIONS
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a. Applicable Law and Forum. This Agreement shall be construed and
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enforced according to the laws of the State of California. All legal actions
arising under this Agreement shall be instituted in, and each party consents to
jurisdiction in the County of Orange, State of California.
b. Notices. Any notice or other communication required or permitted
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under this Agreement shall be given in writing and delivered by hand or by
registered or certified mail, postage prepaid and return receipt requested, to
the following persons (or their successors pursuant to due notice):
If to the Parent: HiEnergy Technologies, Inc.
00 Xxxxxxx Xxxxx
Xxxxxx, XX 00000
Attn: President
If to the Subsidiary: HiEnergy Microdevices, Inc.
00 Xxxxxxx Xxxxx
Xxxxxx, XX 00000
Attn: President
If to Xxxxxxx: Xxxxxx X. Xxxxxxx
000 Xxxxx Xxxxx
Xxxxxxx Xxxxx, XX 00000
Such address may be changed from time to time by any party by providing written
notice to the other parties in the manner set forth above.
c. Waiver. The failure of the parties to enforce any provision of this
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Agreement shall not be construed as a waiver or limitation of that party's right
to subsequently enforce and compel strict compliance with every provision of
this Agreement.
d. Entire Agreement. This Agreement constitutes the entire agreement
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between the parties.
e. Amendments. This Agreement may be modified or amended if the
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amendment is made in writing and is signed by all parties.
f. Severability. If one or more provisions of this Agreement are held
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to be invalid or unenforceable under applicable law, such provision(s) shall be
excluded from this Agreement and the balance of the Agreement shall be
interpreted as if such provision(s) were excluded and shall be enforceable in
accordance with its terms.
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IN WITNESS WHEREOF, and in acknowledgment that the parties hereto have read and
understood each and every provision hereof, the parties have executed this
Agreement on the date first set forth above.
HIENERGY MICRODEVICES, INC. HIENERGY TECHNOLOGIES, INC.
By: /s/ Xxxxxxx X. Xxxxxxx By: /s/ Xxxxx Xxxxx
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Xxxxxxx X. Xxxxxxx, President Xxxxx Xxxxx, President and CEO
/s/ X. X. Xxxxxxx
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Xx. Xxxxxx X. Xxxxxxx, Individually
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