NON-DISCLOSURE, NON-COMPETITION, NON-SOLICITATION AND INVENTION AGREEMENT
EXHIBIT
E
NON-DISCLOSURE,
NON-COMPETITION, NON-SOLICITATION AND
INVENTION
AGREEMENT
This Non-Disclosure, Non-Competition,
Non-Solicitation and Invention Agreement ("this Agreement") between
Innovative Software Technologies, Inc., a Delaware corporation (“Innovative”), The Web Channel
Network, Inc., a Florida corporation wholly-owned by Innovative (“Web Channel”), and Xxxxxx X.
Xxxxxxxxx ("Employee") is hereby entered
into as of June 17, 2009. (Innovative and Web Channel are
collectively and separately referred to herein as the “Company.”)
RECITALS:
WHEREAS, as of the date of
this Agreement, the Company and its Affiliates (as defined in Section 1(h)
hereof) are engaged in the business of design, production, marketing,
innovation, licensing, merchandising, strategic direction and on-going
operations of internet protocol television channels commonly
referred to as WEB Channels, and in the future they may engage in additional
related and unrelated businesses (all such activities collectively being
referred to herein as the "Business");
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WHEREAS, Employee will
be employed by the Company, and the Company is and will be in a
confidential relationship with Employee; and in the course of such
employment with the Company, Employee will become familiar with and aware
of information as to the Company’s products and technologies, specific
manner of doing business, customers and suppliers, contracting activities,
and future plans with respect thereto, all of which have been and will be
established and maintained at great expense to the Company and its
Affiliates; and virtually all of which constitute trade secrets and
valuable goodwill of the Company;
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WHEREAS, Employee
recognizes that the Business of the Company and its Affiliates depends
upon the use of certain confidential information, involving (a) trade secrets, and
(b) other
information that is (i) of any value or
significance to the Company and its Affiliates, and (ii) not generally known
to competitors of the Company nor intended by the Company for general
dissemination, including (but not limited to) any and all proprietary and
technical information of the Company involving its business operations,
products, services, equipment, inventions, referral sources, techniques
and methods, know-how, operating systems, associated procedures and
systems, formulae, technology, designs, drawings, engineering, computer
software, source codes, object codes, accounting and financial data, lists
of and data concerning current and potential vendors, suppliers and
customers, pricing and discounting practices, market data, marketing and
distribution methods and arrangements, marketing materials, sales, costs,
quality controls, risk management, insurance, finances, capital structure,
financial models, projections, xxxxxxxx, profits, losses, business
organization, contracts, agreements, plans, sources of supply, special
programs relating to sales, project files, prospect reports, service,
training, and information about the Company itself and its respective
executives, managers, officers, directors, employees, sales
representatives, and offers to sell the Company or its assets or to
purchase or otherwise acquire other business entities or their assets, and
all related negotiations (collectively, "Confidential
Information") made available to Employee and that the protection of
the Confidential Information is of critical importance to the Company and
its Affiliates;
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WHEREAS, Employee has
agreed to keep in confidence and not use the Confidential Information for
Employee’s commercial benefit, and recognizes that the Company will
sustain great loss and damage if Employee should violate the provisions of
this Agreement and that monetary damages for such losses would be
extremely difficult to measure;
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WHEREAS, any obligation of
Employee, as set forth in the preceding paragraphs, shall apply to Confidential
Information disclosed in writing and designated or obviously recognizable as
being confidential, or if disclosed orally, any such information that may be
promptly reduced to writing; and
WHEREAS, Employee recognizes
that the training of Employee by the Company, Employee’s access to Confidential
Information, and other investments by the Company in the development of Employee
may be made by the Company in preparation for a sale of substantially all of the
assets of the Company or some other transfer of the Company itself to an
acquiring entity;
NOW, THEREFORE, in
consideration of Employee's employment and continued employment with the
Company, the aforesaid recitals which are incorporated in and are a part of this
Agreement, and the mutual promises, terms, covenants and conditions set forth
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and Employee hereby
agree as follows:
1. Non-Competition and
Non-Solicitation.
(a) Employee
agrees that he or she shall not, during the term of Employee’s employment with
the Company and for a period of one (1) year following termination of such
employment (the “Noncompete
Period”), alone or by combining or conspiring with others or in any other
manner whatsoever, within the counties and other geographic areas of every state
and territory of the United States in which the Company has or had customers or
any business premises, or otherwise operated the Business:
(i) directly
or indirectly (as defined in Section 1(i) on page 4 below), run, own, manage,
operate, control, be employed by, provide consulting services to, be a manager
of, participate in, lend Employee’s name to, invest in or be connected in any
manner with the management, ownership, operation or control of any business,
venture or activity that (x) competes with the Business or any part thereof as
conducted by the Company, any Affiliate of the Company, or any purchaser of
substantially all of the assets of the Company in order to carry on the Business
(an “Acquiror”) during
the term hereof or at any time after the date hereof or (y) in any way provides
or may provide services similar to those provided by the Company or any of its
Affiliates or an Acquiror that constitute, relate to, or concern the Business
(however, Employee shall not be considered to be in default of this Section 1
solely by virtue of Employee’s holding for portfolio purposes, as a passive
investor, not more than one percent (1%) of the issued and outstanding equity
securities of a corporation, the equity securities of which are listed or quoted
on a national stock exchange or a national over-the-counter
market);
(ii) directly
or indirectly (as defined in Section 1(i) on page 4 below), without the prior
written consent of the Company, solicit, recruit, offer employment, employ,
engage as a consultant, lure or entice away or in any other manner persuade or
attempt to persuade any person who is an employee or consultant of the Company
or any of its Affiliates, to leave the employ of, or reduce Employee’s services
to, the Company or any of its Affiliates or an Acquiror, unless such person has
been terminated by the Company or any of its Affiliates;
(iii) contact
any past, present or potential customer, vendor or contractor of the Company or
any of its Affiliates or an Acquiror, for the purpose of (1) providing any service
provided by the Company or any of its Affiliates or an Acquiror or (2) inducing or attempting to
induce the entity to cease doing business with the Company or any of its
Affiliates or an Acquiror, or reduce the amount of business previously done or
contemplated to be done by the Company or any of its Affiliates or an Acquiror,
for such entity;
(iv) contact
any past, present or potential vendor, supplier, contractor or other provider to
the Company or any of its Affiliates or an Acquiror, for the purpose of
obtaining any services or commodities if the effect thereof could be expected to
interfere with, disturb, interrupt or reduce the amount or level of such
services or commodities available to the Company or any of its Affiliates or an
Acquiror; or
(v) contact
any prospective acquisition candidate, prospective Acquiror, or potential
business partner of the Company or any of its Affiliates, on Employee’s own
behalf or on behalf of any other person or entity, which acquisition candidate,
prospective Acquiror, or potential business partner was either called upon by
the Company or its Affiliates or for which Employee or the Company or its
Affiliates made an acquisition analysis while Employee was employed by the
Company.
(b) Employee
recognizes and hereby acknowledges that Employee’s breach of any of the
covenants contained in this Section 1 of this Agreement will cause irreparable
harm and damage to the Company or its Affiliates or an Acquiror, the monetary
amount of which may be virtually impossible to ascertain. As a
result, Employee recognizes and hereby acknowledges that the Company and its
Affiliates and an Acquiror shall be entitled to an injunction from any court of
competent jurisdiction enjoining and restraining any violation of any or all of
the covenants contained in this Section 1 of this Agreement by Employee or any
of Employee’s Affiliates, partners or agents, either directly or indirectly, and
that such right to injunction shall be cumulative and in addition to whatever
other remedies the Company and its Affiliates and an Acquiror may possess at law
or in equity (including, without limitation, damages at law). This
Section 1, subsection (b) shall survive the termination of Employee’s employment
or this Agreement for any reason. The provisions of this Agreement
shall be enforceable in law and in equity notwithstanding the existence of any
claim or cause of action by Employee against the Company or its Affiliates or an
Acquiror, whether predicated on this Agreement or otherwise.
(c) The
parties agree that the covenants contained in this Section 1 impose a reasonable
restraint on Employee in light of the Business, and the activities and future
plans of the Company and its Affiliates. Employee acknowledges that
the restraints in such covenants are necessary to protect the legitimate
business interests of the Company, including, but is not limited to, the
extraordinary and specialized training Employee received while employed by the
Company and Employee’s knowledge of (i) the Company’s trade
secrets and valuable confidential business information that otherwise does not
qualify as trade secrets, and (ii) the Company’s substantial
relationships with specific prospective or existing customers, suppliers, or
joint venturers.
(d) The
covenants in this Section 1 are severable and separate, and the unenforceability
of any specific covenant shall not affect the provisions of any other
covenant. In the event any court of competent jurisdiction shall
determine that the scope, time or territorial restrictions set forth in this
Section 1 are unreasonable, then it is the intention of the parties that such
restrictions be enforced to the fullest extent which such court deems
reasonable, and the provisions of this Section 1 shall thereby be reformed by
such court so as to rehabilitate the restrictions and the enforcement thereof to
the extent permitted by law.
(e) Each of
the covenants contained in this Section 1 shall be construed as a covenant
independent of any other provision of this Agreement, and the existence of any
claim or cause of action of Employee against the Company or any of its
Affiliates or an Acquiror, whether predicated on this Agreement or otherwise,
shall not constitute a defense to the enforcement by the Company or its
Affiliates or an Acquiror of such covenants.
(f) The
Noncompete Period shall be computed by excluding from such computation any time
during which Employee is in violation of any provision of this Section 1 and any
time during which there is pending in any court of competent jurisdiction any
action (including an appeal from any judgment) brought by any person, whether or
not a party to this Agreement, in which action the Company or any of its
Affiliates or an Acquiror seeks to enforce the covenants contained in this
Section 1 or in which any person contests the validity or enforceability of any
such covenant or seeks to avoid the performance or enforcement of any such
covenant if such action shall be settled with the consent of Employee or shall
be resolved in a manner that upholds any of the Company’s or any of its
Affiliate’s or an Acquiror’s claims.
(g) Employee
acknowledges and agrees that the covenants set forth in this Section 1 are a
material and substantial part of this Agreement.
(h) For
purposes of this Agreement, “Affiliate” of any person or
entity shall mean any person, entity or group (currently existing or hereafter
created) controlling, controlled by or under common control with, the specified
person or entity, and “control” of a person or
entity (including, with correlative meaning, the terms “control by” and “under common control with”)
means the power to direct or cause the direction of the management, policies or
affairs of the controlled person, whether through ownership of securities or
partnership or other ownership interests, by contract or otherwise.
(i) For
purposes of Section 1(a)(i) and (ii) of this Agreement, the word “indirectly” shall include
(but not be limited to) acting through, or affecting the Company through, an
intermediary or series of intermediaries, such as the use of or contact with
distributors, independent contractors, or other third parties.
2. Return of
Company Property. Employee
acknowledges and agrees that all computers, hardware, software, electronic and
telephonic equipment, records, plans, manuals, guides, memoranda, lists,
customer and supplier information, correspondence with customers or
representatives, reports, records, charts, advertising materials, and any data
and other property delivered to or acquired by Employee, by or on behalf of the
Company or any of its Affiliates, or by an agent, representative or customer or
supplier of any of them (including, without limitation, any such customers
obtained by Employee), and all records compiled by Employee which pertain to the
Business shall be and shall remain the property of the Company or its
Affiliates, as the case may be, and be subject at all times to the discretion
and control of the Company and its Affiliates, and shall be delivered promptly
to the Company or such Affiliates, without request, by Employee upon or before
the termination of Employee’s employment with the Company.
3. Inventions
and Other Intellectual Property. During the course
of Employee’s employment, Employee shall promptly disclose in writing to the
Company any and all conceptions and ideas for inventions, improvements, business
methods and processes, designs, computer software, computer programs, product
developments, regardless whether or not copyrightable, patentable or material,
including the improvement of any of the foregoing, whether completed or not,
which are prepared, developed or conceived by Employee, directly or indirectly,
alone or in conjunction with another while employed by the Company or within six
(6) months thereafter and which are related to the Business or activities or
future plans of the Company or any of its Affiliates, or which Employee
conceives as a result of Employee’s employment with the Company (collectively,
“Proprietary Rights”),
and Employee hereby assigns and agrees to assign all Employee’s interests
therein, royalty-free, to the Company or its nominee. The foregoing
shall be disclosed whether conceived or developed during working hours or not,
which: (a) result from
any work performed on behalf of the Company, or pursuant to a research project
for the Company, or (b)
relate in any manner to the existing or contemplated business of the Company, or
(c) result from the use
of the Company's time, material, employees, or facilities. All
copyrightable Proprietary Rights shall be considered to be “works made for
hire.” Whenever requested to do so by the Company, Employee shall
execute and deliver to the Company any and all applications, assignments or
other instruments and do such other acts that the Company shall request to apply
for and obtain letters patent and copyright registrations of the United States
or any foreign country or to otherwise protect the Company’s interest
therein. Employee shall also, at the Company's request and expense,
assist in the defense and prosecution of such letters patent, such copyrights or
any trademark applicable to the Company, as may be required by the
Company. The obligations set forth in this Section 3 shall
continue beyond the termination of Employee's employment with the Company and
shall be binding upon Employee’s assigns, executors, administrators and other
legal representatives.
4. Confidentiality. Employee shall
not, during the term of this Agreement and thereafter, make any Unauthorized
Disclosure. For purposes of this Agreement, “Unauthorized Disclosure”
shall mean use by Employee for Employee’s own benefit, or the benefit of
another, or disclosure by Employee to any person other than a person to whom
disclosure is reasonably necessary or appropriate in connection with the
performance by Employee of duties as an employee of the Company or any of its
Affiliates or as may be legally required, of any Confidential Information
relating to the Business or prospects of the Company or any of its Affiliates
(including, without limitation, any information and materials pertaining to any
Proprietary Rights); provided however, that the term Unauthorized Disclosure
shall not apply to any information, knowledge, data or know-how which: (a) hereinafter becomes a part
of the public domain through no fault of Employee; or (b) Employee can demonstrate
was in Employee’s possession prior to the time of disclosure by the Company; or
(c) Employee can
demonstrate was received by Employee from a third party who has not received the
same from the Company; or (d) is approved for disclosure
by prior written consent of the Company; or (e) is required to be
disclosed by court rule or governmental law or regulation, provided that
Employee gives the Company prompt notice of any such requirement and cooperates
with the Company in attempting to limit such disclosure; or (f) is independently developed
by persons not having access to Confidential Information hereunder as shown by
written records. This confidentiality covenant has no temporal,
geographical or territorial restriction.
5. Representations
of Employee. Employee confirms
that Employee is not bound by the terms of any agreement or restrictive covenant
with any previous employer or other party which restricts in any way (a) Employee's performance of
Employee’s duties and responsibilities of employment with the Company, (b) Employee's performance of
Employee’s duties and responsibilities under this Agreement, (c) Employee's use or
disclosure of information, or (d) Employee's engagement in
any business, except as may be disclosed in a separate Exhibit A attached to
this Agreement. Employee has delivered to the Company true and
complete copies of any agreements or restrictive covenants listed on said Exhibit
A. Employee represents to the Company that Employee's
execution of this Agreement, Employee's employment with the Company and the
performance of Employee's duties and responsibilities in the course of
Employee’s employment with the Company will not violate any obligations Employee
may have to any such previous employer or any other party. In
Employee's work for the Company, Employee will not disclose or make use of any
information in violation of any agreements with or rights of any such previous
employer or other party, and Employee will not bring to the premises of the
Company or any of its Affiliates any copies or other tangible embodiments of
non-public information belonging to or obtained from any such previous
employment or other party. Employee agrees to indemnify the Company
for any claim, including, without limitation, attorneys’ fees and expenses of
investigation, by any party that such party may now have or may hereafter come
to have against the Company based upon or arising out of any restrictive
covenant, non-competition agreement or invention or secrecy agreement between
Employee and such prior employer or other party. Employee agrees that
upon a termination of Employee’s employment by the Company, Employee hereby
authorizes the Company to notify any of Employee’s subsequent employers or other
persons for whom Employee provides services of Employee’s representations,
obligations and restrictions in this Agreement.
6. Complete
Agreement.
There are no oral representations, understandings or agreements with the
Company or its Affiliates or any of their directors, officers, or
representatives covering the same subject matter as this Agreement, and this
Agreement supersedes any and all prior agreements concerning such subject matter
between Employee and the Company or any of its Affiliates. This
Agreement is the final, complete and exclusive statement and expression of the
agreement between the Company and Employee and of all the terms of this
Agreement; and it cannot be amended, varied, contradicted or supplemented by
evidence of any prior or contemporaneous oral or written
agreements. This Agreement may not be later modified except by a
further writing signed by the parties, and no term of this Agreement may be
waived except by a writing signed by the party waiving the benefit of such
terms.
7. No
Waiver. No waiver by the
parties hereto of any default or breach of any term, condition or covenant of
this Agreement shall be deemed to be a waiver of any subsequent default or
breach of the same or any other term, condition or covenant contained
herein.
8. Assignment;
Binding Effect. Employee
understands that he has been selected for employment by the Company on the basis
of Employee’s personal qualifications, experience and
skills. Employee agrees, therefore, that this Agreement and the
rights to Employee’s services may be assigned by the Company at any time without
notice to Employee in connection with a sale or other transfer by the Company of
all or substantially all of its assets, but that Employee cannot assign all or
any portion of this Agreement. Subject to the preceding two
sentences, this Agreement shall be binding upon and inure to the benefit of the
parties thereto and their respective heirs, successors and
assigns. It is further understood and agreed that the Company may be
merged or consolidated with another entity and that any such entity shall
automatically succeed to the rights, powers and duties of the Company
hereunder.
9. Notices. All notices, demands or
communications required or permitted hereunder shall be in
writing. Any notice, demand or other communication given under this
Agreement shall be deemed to be given if given in writing (including facsimile
or similar transmission) addressed as provided below (or at such other address
as the addressee shall have specified by notice actually received by the other
party) and if either (a) actually delivered in
fully legible form to such address or (b) in the case of a letter
sent by United States mail, five (5) days shall have elapsed after the same
shall have been deposited in the United States mail, with first-class postage
prepaid and sent either by registered or certified mail to:
To the
Company: Innovative
Software Technologies, Inc.
0000 X.
Xxxxxx Xxxxxx
Xxxxx,
Xxxxxxx 00000
To
Employee: Xxxxxx
X. Xxxxxxxxx
00000
Xxxxx Xxxx
Xxxx,
Xxxxxxx, 00000
10. Severability;
Headings. If any portion of
this Agreement is held invalid or inoperative, the other portions of this
Agreement shall be deemed valid and operative and, so far as is reasonable and
possible, effect shall be given to the intent manifested by the portion held
invalid or inoperative. The section headings herein are for reference
purposes only and are not intended in any way to describe, interpret, define or
limit the extent or intent of this Agreement or of any part hereof.
11. Gender. Any pronoun used
herein may be deemed to mean the corresponding masculine, feminine or neuter in
form thereof and the singular form of any nouns and pronouns herein may be
deemed to mean the corresponding plural and vice versa as the case may
require.
12. Governing
Law; Venue; Jurisdiction: and Attorneys Fees. This Agreement,
in all respects, shall be governed by, construed, and interpreted according to
the laws of the State of Florida, without giving effect to its conflict of law
principles; and each of the parties hereto agrees to submit to the jurisdiction
thereof and agrees that jurisdiction and venue are appropriate in the state and
federal courts serving Hillsborough County, Florida. In the event
that there is litigation between or among the parties hereto concerning any
aspect of this Agreement, the prevailing party shall be entitled to recover from
the non-prevailing party reasonable attorneys fees and paralegals fees, court
costs, and other expenses incurred by such prevailing party that are incident to
the litigation.
13. No
Contract of Employment. Nothing in this
Agreement shall be construed as a contract of employment between Employee and
the Company or as a commitment on the part of the Company to retain Employee in
any capacity for any period of time. Employee acknowledges and agrees
that Employee's employment with the Company is on an at-will basis.
14. Counterparts. This Agreement
may be executed in one or more counterparts, each of which shall be deemed an
original and all of which together shall be considered one and the same
agreement.
IN WITNESS WHEREOF, the parties hereto
have executed this Agreement as of the day and year first above
written.
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“Company”
Innovative
Software Technologies, Inc.
The
WEB Channel Network, Inc.
By: /s/ Xxxxxx X.
Xxxxxx
Xxxxxx
X. Xxxxxx, President
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“Employee”
/s/ Xxxxxx
X.
Xxxxxxxxx
Xxxxxx
X. Xxxxxxxxx
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EXHIBIT
A
TO
NON-DISCLOSURE, NON-COMPETITION
NON-SOLICITATION AND INVENTIONS AGREEMENT
If Employee is not bound by the terms
of any agreement or restrictive covenant with any previous employer or other
party which restricts in any way (a) the performance of Employee’s duties
and responsibilities of employment with the Company, (b) Employee’s duties and
responsibilities under this Agreement, (c) Employee's use or disclosure of
information, or (d)
Employee's engagement in any business, Employee is requested to write the word
“None” below, followed by Employee’s signature. The absence of any
information in this Exhibit A, notwithstanding that Employee has not written the
word “None” or signed this page, nevertheless shall confirm that there are no
exceptions to the initial representation made by Employee under Section 5
of this Agreement.
