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EXHIBIT 10.5
EMPLOYMENT AGREEMENT
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This EMPLOYMENT AGREEMENT ("this Agreement") is made and effective this
15th day of November 1994, by and between XXXXXX TECHNOLOGIES, INC., an Illinois
corporation located at 000 Xxxxx Xxxxx Xxxx, Xxxxx 000, Xxxx Xxxxx, 00000
("Company or Employer"), and XXXXXXX X. XXXXXX Residing at 0000 X.X. 00xx
XXXXXX, XXXXXXXXXX XXXXX, XX 00000 ("Employee").
WITNESSETH
WHEREAS, Company believes it is in Company's best interest to employ
Employee, and Employee desires to be employed by Company; and
WHEREAS, Company and Employee desire to set forth the terms and
conditions on which Employee shall be employed by and provide his services to
Company;
NOW, THEREFORE, in consideration of the premises, and for other good
and valuable consideration, the receipt and adequacy of which is hereby
acknowledged, the parties hereto, intending to be legally bound, do hereby agree
as follows:
1. EMPLOYMENT. Company hereby employs Employee in its business as Vice
President of Finance and Chief Financial Officer, and Employee hereby accepts
such employment, all upon the terms and conditions hereinafter set forth.
2. TERM. Unless sooner terminated pursuant to the provisions of this
Agreement, the term of employment under this Agreement shall be for 3 years.
("Employment Period"). This contract may be extended for additional three year
periods unless either party notifies the other in writing that the Employment
Period will not be renewed, at least 6 months prior to the end of the initial
term or prior to the end of any such three year renewal. Notwithstanding the
foregoing,and in consideration of the severance benefit referred to in Section
14 hereof, Company may terminate Employee at any time for any reason with no
other obligation whatsoever.
3. SALARY AND BASE COMPENSATION. Employee shall be entitled to receive
salary during the Employment Period at the rate of One Hundred Thousand and
100/00 Dollars ($100,000.00) per annum, increased to One Hundred Twenty Five
Thousand and 100/00 Dollars ($125,000.00) upon the earlier of when the first six
months has elapsed, or when the Company receives equity funding from the closing
of its anticipated private placement, and as such may be increased pursuant to
Section 12 hereof (the "Base Salary"). In addition to the Base Salary paid to
Employee during the Employment Period, Employee shall be entitled to receive the
Benefits, Profits Bonus, and Stock Option (as those terms are
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hereinafter defined) during the Employment Period. The Base Salary shall be
payable Semi-monthly in accordance with the current normal payroll policies of
Company, which policies may be changed by Company from time to time in its sole
discretion, and shall be subject to all appropriate withholding taxes.
4. BUSINESS EXPENSES AND REIMBURSEMENTS. Employee shall be entitled to
reimbursement by the Company for ordinary and necessary business expenses
incurred by Employee in the performance of his duties for Company, which types
of expenditures shall be determined and approved by the Company, and further
provided that:
(a) Each such expenditure is of a nature qualifying it as a proper
deduction on the Federal and State income tax returns of Company as a business
expense and not as deductible compensation to Employee; and
(b) Employee furnishes Company with adequate records and other
documentary evidence required by federal and State statutes and regulations for
the substantiation of such expenditures as deductible business expenses of
Company and not as deductible compensation to Employee, as well as any other
documentation reasonably requested by Company.
(c) Employee agrees that, if at any time, any payment made to
Employee by Company, whether for salary or as a business expense reimbursement,
shall be disallowed in whole or in part as a deductible expense by the
appropriate taxing authorities, Employee shall reimburse Company to the full
extent of such disallowance unless otherwise approved by the company.
5. BENEFITS. Employee shall be entitled to receive during the entire
Employment Period the following additional benefits ("Benefits")
(a) CAR ALLOWANCE. During the Employment Period Employee shall be
entitled to a Five Hundred Seventy and 100/00 ($570.00) per month car allowance
in accordance with Company's normal automobile allowance payment practices, as
in existence front time to time.
6. OTHER BENEFITS.
(a) Employee agrees that the Base Salary, the Profits Bonus,
the Stock Option, and the Benefits and the other compensation provided in
accordance with this Agreement, are the sole and exclusive compensation of
Employee for his duties hereunder.
(b) Continuing throughout the Employment Period Employee shall
receive all of the employee benefits including, without limitation, pension,
disability, profit sharing and retirement benefits, provided at any time by
Company to any of
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its employees in the sole and absolute discretion of the Board of Directors of
the Company (the "Board") a description of the companies CURRENT benefits
package is described in Exhibit "A" Description of Current Benefits;
7. VACATION. Employee shall be entitled to vacation in accordance with
the vacation policy of the Company in effect, from time to time.
8. PROFITS BONUS.
(a) Employee shall be entitled to receive within thirty (30) days of
the end of each full calendar quarter during the Employment Period, a quarterly
bonus based upon five percent (5%) of the net earnings of the entire company
(the "Profits Bonus").
(b) For purposes of this Agreement, the term "net earnings" shall be
determined by the Company's external accounting firm and agreed to by the
President and in accordance with generally accepted accounting principles. The
determination of the net earnings for this purpose by Company's accounting firm
shall be conclusive and binding upon Employee.
(c) Notwithstanding anything to the contrary in this Agreement, the
Profits Bonus shall be payable only provided Employee is in the employ of
Company on the last day of the respective quarter for which such Profits Bonus
is being calculated and further payable in accordance with and subject to the
normal payroll policies of Company with respect to similar forms of
compensation, including without limitation, being subject to all appropriate
withholding taxes.
9. GRANT OF STOCK. Against the execution and delivery of this
Agreement, Employee shall enter into a stockholder agreement (in the form of
Exhibit "B" hereto) (the "Stockholder Agreement"). Subject to the terms of the
Stockholder Agreement, Employee shall receive two (2) shares of Company's common
stock (the "Stock"), said amount representing two percent (2%) of the Company's
outstanding common stock on the date hereof.
10. STOCK OPTION. In addition to Employee's Base Salary, Benefits,
Profits Bonus, and Stock, Employee shall be granted a non-transferable stock
option exercisable after and if ever the company's stock has become publicly
traded. The exercise price for such stock shall be the book value of such stock
as determined by Company's independent accountants based upon the balance sheet
of the Company, using generally accepted accounting principles and shall be
final and binding. All stock purchased under such option shall be subject to the
Stockholder's Agreement, and the option shall be granted to Employee pursuant to
an Option Agreement satisfactory as to its other terms to the Company.
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11. REGISTRATION RIGHTS. In the event Company registers common stock
held by other employees of Company, then the Company shall also register a
prorata portion of the stock held by Employee.
12. COMPENSATION REVIEW. The President or Board shall from time to
time, no less frequently than annually, review Employee's compensation and may
(in his sole discretion) increase, but not decrease, the compensation provided
for in Section 3 hereof. Any such increase in compensation shall be valid only
if in writing, executed by the President, and, such writing shall constitute an
amendment solely to the payments to be made to Employee under this Agreement,
without waiver or modification of any other provision hereof.
13. INVENTION ASSIGNMENT AND CONFIDENTIALITY AGREEMENT. Against the
execution and delivery of this Agreement, Employee shall enter into an
agreement in the form of Exhibit "C" hereto (the "Invention Assignment and
Confidentiality Agreement").
14. NON-COMPETITION AGREEMENT. Against the execution and delivery of
this Agreement, Employee shall enter into a non-competition and non-solicitation
agreement (in the form of Exhibit "D" hereto) (the "Non-Competition
Agreement") which also, notwithstanding the at will nature of the employment,
provides for a severance benefit under certain circumstances.
15. NO OTHER COMPENSATION OR BENEFITS. Employee agrees that the
compensation set forth in this Agreement is the sole and exclusive compensation
of Employee for his duties hereunder and that he shall have no rights to
receive any other compensation or benefits of any nature.
16. DUTIES. During the Employment Period:
(a) Employee shall furnish all manner of services in connection with
his position as Vice President of Finance and Chief Financial Officer "CFO" or
as otherwise designated by the President including, without limitation, primary
responsibility for such duties as shall be deemed by the President appropriate
to carry out the policies and programs of the Board and as from time to time may
be delegated or assigned to his by the Board;
(b) Employee shall report directly to the President (or someone
appointed by the President) in the performance of all his duties herein.
(c) Employee shall comply with all Company policies for the
employees as such policies may exist from time to time.
(d) Employee shall devote his entire time, energy
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and skill to the service of Company and the promotion of Company's interests,
and shall use his best efforts in the performance of his services hereunder,
unless otherwise approved in advance by the President. The parties agree that
Employee may not, during the Employment Period, be engaged in any other business
activity whether or not such activity is pursued for gain, profit, or other
pecuniary advantage including, without limitation, management or management
consulting activities; provided, however, Employee may invest his personal
assets in businesses where the form or manner of such investment will not
require services on the part of Employee conflicting with the duties of Employee
under this Agreement and in which his participation is solely that of a passive
investor. Employee agrees to abide by all rules and regulations established from
time to time by the President and/or the Board; and all commissions, fees or
other income earned and received by Employee, if any, in furtherance of the
business of Company, or it's affiliates or from any other business or financial
opportunity or endeavor in which Employee is an active participant and not a
passive investor, shall be accepted by Employee for the account of Company, and
shall be remitted to Company within three (3) days of Employee's receipt
thereof.
17. AUTHORITY TO CONTRACT. Employee shall have authority to enter into
contracts binding upon Employer and in the best interest of the Company subject
to a limit or $5,000.00, and any contract or disbursement greater than $5,000.00
will require approval in writing from the President.
18. TERMINATION. The Employer may, in its sole discretion, terminate
this Agreement for any reason, subject only to the severance obligation
outlined in the Non-Competition Agreement with no additional payment for
termination prior to the end of the Employment Period. In the event of
termination of employment by either party, subject to compliance with the
Non-Competition Agreement, Employee shall be entitled to all Base Salary and
fully accrued Profits Bonus for completed quarters.
19. SURRENDER OF RECORDS. Upon the termination of the Employee's
employment hereunder, for any reason whatsoever, and in addition to such other
actions as may be reasonably required by Employer, the Employee agrees to
surrender to the Employer, in good condition, any record or records kept by him
containing the names, addresses, and other information with regard to clients Or
potential clients of the Employer which have been served or treated by the
Employee.
20. ENTIRE AGREEMENT. This Agreement represents the entire
understanding and agreement between the parties with respect to the subject
matter hereof, and supersedes all other negotiations, understandings and
representations (if any) made by and between
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such parties.
21. AMENDMENTS. The provisions of this Agreement may not be amended,
supplemented, waived or changed orally, but only by a writing signed by the
party as to whom enforcement of any such amendment, supplement, waiver or
modification is sought and making specific reference to this Agreement.
22. ASSIGNMENTS. Employee shall not assign his rights and/or
obligations hereunder.
23. BINDING EFFECT. All of the terms and provisions of this Agreement,
whether so expressed or not, shall be binding upon, inure to the benefit of, and
be enforceable by the parties and their respective administrators, executors,
legal representatives, heirs, successors and permitted assigns.
24. SEVERABILITY. If any part of this Agreement or any other Agreement
entered into pursuant hereto is contrary to, prohibited by or deemed invalid
under applicable law or regulation, such provision shall be inapplicable and
deemed omitted to the extent so contrary, prohibited or invalid, but the
remainder hereof shall not be invalidated thereby and shall be given full force
and effect so far as possible.
25. SURVIVAL. Notwithstanding anything to the contrary herein, the
provisions of Sections 11 through 29 (inclusive) shall survive and remain in
effect in accordance with their respective terms in the event the employment is
terminated.
26. WAIVERS. The failure or delay of Company at any time to require
performance by Employee of any provision of this Agreement, even if known, shall
not affect the right of Company to require performance of that provision or to
exercise any right, power or remedy hereunder, and any waiver by Company of any
breach of any provision of this Agreement should not be construed as a waiver of
any continuing or succeeding breach of such provision, a waiver of the provision
itself, or a waiver of any right, power or remedy under this Agreement. No
notice to or demand on Employee in any case shall, of itself, entitle such party
to any other or further notice or demand in similar or other circumstances.
27. SPECIFIC PERFORMANCE. Employee acknowledges that the services to
be rendered by Employee hereunder are extraordinary and unique and are vital to
the success of the Company, and that damages at law would be an inadequate
remedy for any breach or threatened breach of this Agreement by Employee.
Therefore, in the event of a breach or threatened breach by Employee of any
provision of this Agreement, then Company shall be entitled, in addition to all
other rights or remedies, to injunctions
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restraining such breach, without being required to show any actual damage or to
post any bond or other security.
28. NOTICES. All notices, requests, consents and other communications
required or permitted under this Agreement shall be in writing (including telex
and telegraphic communication) and shall be (as elected by the person giving
such notice) hand delivered by messenger or courier service, telecommunicated,
or mailed (airmail if international) by registered or certified mail (postage
prepaid), return receipt requested, to the addresses listed above or to such
other address as any party may designate by notice complying with the terms of
this Section. Each such notice shall be deemed delivered (a) on the date
delivered if by personal delivery, (b) on the date telecommunicated if by
telegraph, (c) on the date of transmission with confirmed answer back if by
telex or telefax, and (d) on the date upon which the return receipt is signed or
delivery is refused or the notice is designated by the postal authorities as not
deliverable, as the case may be, if mailed.
29. JURISDICTION AND VENUE. The parties acknowledge that a substantial
portion of negotiations, anticipated performance and execution of this Agreement
occurred or shall occur in Palm Beach County, Florida, and that, therefore,
without limiting the jurisdiction or venue of any other federal or state courts,
each of the parties irrevocably and unconditionally (a) agrees that any suit,
action or legal proceeding arising out of or relating to this Agreement may be
bought in the courts of record of the State of Florida in Palm Beach County or
the court of the United States, Southern District to Florida; (b) consents to
the jurisdiction of each such court in any such suit, action or proceeding; (c)
waives any objection which it may have to the laying of venue of any such suit,
action or proceeding in any of such courts; and (d) agrees that service of any
court paper may be effected on such party by mail, as provided in this
Agreement, or in such other manner as may be provided under applicable laws or
court rules in said state.
30. REMEDIES CUMULATIVE. No remedy herein conferred upon any parry is
intended to be exclusive of any other remedy, and each and every such remedy
shall be cumulative and shall be in addition to every other remedy given
hereunder or now or hereafter existing at law or in equity or by statute or
otherwise. No single or partial exercise by any party of any right, power or
remedy hereunder shall preclude any other or further exercise thereof.
31. EMPLOYEE REPRESENTATIONS, WARRANTIES, AND ACKNOWLEDGMENTS. Employee
represents and warrants to Company that he is fully empowered to enter and
perform his obligations under this Agreement and without limitation, that he is
under no
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restrictive covenants to any person or entity that will be violated by his
entering into and performing this Agreement, and that this Agreement constitutes
the valid and legally binding obligation of Employee enforceable in accordance
with its terms. The execution and delivery of this Agreement by Employee has
been duly authorized by all necessary action. Employee shall indemnify company
upon demand for and against any and all judgments, losses, claims, damages,
costs (including without limitation all legal fees and costs, even if incident
to appeals) incurred or suffered by any of them as a result of the breach of the
representations and warranties made in this section, or as a result of the
failure of the acknowledgment made in this section to be true and correct at all
times.
32. GOVERNING LAW. This Agreement and all transactions contemplated by
this Agreement shall be governed by, and construed and enforced in accordance
with, the internal laws of the State of Florida without regard to principles of
conflicts of laws.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
Witnesses: XXXXXX TECHNOLOGIES, INC.
/s/ Xxxx Xxxxxxxx By: /s/ Xxxxx Xxxxxx
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/s/ Xxxxxxxx X. Xxxxxxx Its: President
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EMPLOYEE:
/s/ Xxxx Xxxxxxxx
------------------------------ /s/ Xxxxxxx X. Xxxxxx
/s/ Xxxxxxxx X. Xxxxxxx ---------------------------------
------------------------------ XXXXXXX X. XXXXXX
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EXHIBIT LIST
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Exhibit A - Description of Current Benefits
Exhibit B - Shareholders Agreement
Exhibit C - Invention Assignment and Confidentiality Agreement
Exhibit D - Non-Solicitation and Non-Compete Agreement
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EXHIBIT A TO EMPLOYMENT AGREEMENT
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DESCRIPTION OF CURRENT BENEFITS
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1. Employee Name: XXXXXXX X. XXXXXX
2. Title: VICE PRESIDENT OF FINANCE/CHIEF FINANCIAL OFFICER.
Reporting to: President ("Xxxxx Xxxxxx")
2. Current Benefits to Which Employee is Entitled are as follows:
- RETIREMENT PLANNING
- HEALTH BENEFITS PROGRAM
- DISABILITY PROTECTION PROGRAM
The RETIREMENT PLANNING program consists of a 401 (k) Profit Sharing Plan which
allows employees to contribute on a tax deductible basis, up to a maximum of 15%
of their income.
In addition, the employer will match 12.5% of the Employee 401(k) percentage
election, up to a maximum of 8% deferral made by the Employee. Also, to inspire
excellence and profitability, the Plan Document provides for a Discretionary
Matching contribution which is relative to the performance of the company.
The HEALTH BENEFITS PROGRAM AND DISABILITY PROTECTION PROGRAM are structured
under Code Section 125 of the Internal Revenue Code Providing a reduction in
cost due to the pre-tax structure of these benefit plans, offering a reduction
in both Social Security Tax and Income Tax.
The HEALTH BENEFITS PROGRAM is provided by The Prudential Insurance Company.
Employees have the opportunity to choose from two options which are the PRU CARE
PLUS or the PRU CARE H.M.O. Xxxxxx Technologies, Inc. contributes 75% of the
premium for the employee and 50% for dependents.
The DISABILITY PROTECTION PLAN is individually designed and the employer
provides a 7% contribution to the Plan. This Plan also provides a guaranteed
cost and portability to the employee.
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Exhibit B of Employment Agreement
SHAREHOLDERS AGREEMENT
THIS SHAREHOLDERS AGREEMENT (this "Agreement") is entered into effective as
of the 15th day of November, 1994, by and among XXXXXXX X. XXXXXX Residing at
0000 X.X. 00XX XXXXXX, XXXXXXXXXX XXXXX, XX 00000 (the "Shareholder"), and
XXXXXX TECHNOLOGIES, INC., an Illinois corporation (the "Corporation").
W I T N E S S E T H:
WHEREAS, pursuant to that certain Employment Agreement dated the same date
as above (the "Employment Agreement"), the Shareholder has received two (2)
shares of the common stock of the Corporation, as well as the option of
receiving certain additional shares of common stock pursuant to said agreement
(collectively the "Shares"); and
WHEREAS, the Shareholder and the Corporation desire, as permitted by Florida
Statutes, to govern the activities of the parties hereto with respect to the
Shares in accordance with the terms hereinafter set forth; and
WHEREAS, the Shareholder and the Corporation agree that it is in the best
interest of the Corporation to provide for the transfer, ownership, pledge and
disposition of the Shares in the manner and to the extent set forth hereinafter.
NOW, THEREFORE, in consideration of the mutual promises herein exchanged,
together with other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the Shareholder and the Corporation, intending
to be legally bound, hereby agree as follows:
1. EFFECTIVENESS AND TERM OF AGREEMENT. This Agreement shall become effective
upon the issuance of the Shares to the Shareholder and shall remain in effect
until the either the Corporation buys back the Shares as provided herein or
fails to purchase the Shares within the time periods provided herein, or as
otherwise terminated by the provisions herein.
2. CORPORATION'S RIGHT TO CALL SHARES: CANCELLATION OF SHARES.
(a) Upon termination of the Shareholder for any reason from his employment with
the Corporation, and as long as the Corporation has not filed any registration
statements with the Securities and Exchange Commission, the Corporation shall
have for thirty (30) days from the date of any such termination, the right to
call (purchase) any or all of the Shares and pay the Shareholder the book value
of the Shares by providing the Shareholder written notice with such thirty (30)
day period.
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(i) If the termination was by the Corporation and it has made its election to
purchase the Shares within thirty (30) days of such termination date, the
Corporation shall pay the Shareholder the book value of the Shares as of said
termination date within 10 days of such election notice.
(ii) Upon voluntary termination of the Shareholder, and after notice by the
Corporation within thirty (30) days of the date of termination, the Corporation
shall deliver to the Shareholder a promissory note for the book value of the
Shares as of the date of termination within thirty (30) days of such notice.
Said note shall charge the minimum IRS interest rate, and will be payable over
two (2) years in eight (8) quarterly payments with accrued interest at the time
of each payment.
(b) In the event the Shareholder fails to return the certificates representing
the Shares to the Corporation on or before the delivery by the Corporation of
the cash or the note provided for above, then the Shareholder herein appoints
the Secretary of the Corporation power of attorney to effect the transfer of the
Shares on the Corporation's records, and to do all things necessary to implement
the call as provided herein. The foregoing power of attorney is coupled with an
interest.
(c) The book value of all of the Shares of the Corporation shall be determined
in writing by an independent certified public accountant regularly used by the
Corporation based upon the balance sheet of the Corporation, which determination
shall be binding upon the parties hereto.
(d) Notwithstanding the foregoing, shareholder acknowledge and agrees that the
Corporation may unilaterally cancel (with no consideration paid to Shareholder)
all issued Shares in the event Shareholder's employment with the Corporation is
terminated for any reason or no reason by the Corporation or Shareholder on or
before the first anniversary date of this Agreement. As such, until the passage
of such date the Company shall hold any and all certificates representing such
Shares, along with stock powers executed by Shareholder. Shareholder
acknowledges that this provision is reasonable under the circumstances and does
not constitute a penalty, as it is the intention of the parties that
Shareholder's ultimate full interest in an entitlement to the Shares be
contingent upon his completing his first year of employment.
3. RESTRICTIONS ON TRANSFERS OF SHARES
(a) As long as the Corporation does not file a registration statement with the
Securities and Exchange Commission, due to the personal nature of receiving the
Shares as an employee of the
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Corporation pursuant to the terms of the Employment Agreement, except as
otherwise provided in this Agreement, the Shareholder hereby agrees that she
will not sell, transfer, pledge, grant a security interest in, assign,
hypothecate, or otherwise encumber or dispose of (collectively and through this
Agreement, "transfer") any of the Shares or any interest therein or suffer or
permit the same to be subject, directly or indirectly, to transfer by operation
of law or agreement, without the prior written consent of the Corporation. The
restriction set forth in this section on stock transfers applies to all stock
transfers including transfers to other shareholders of the Corporation.
(b) Any attempted or purported transfer by the Shareholder of any Shares or any
interest therein in violation of the terms of this Agreement shall be void and
the Corporation shall reject and refuse to transfer on its books any stock which
may have been so transferred, and it shall not recognize any person holding such
stock as a shareholder, nor shall any such person have any rights as a
shareholder of the Corporation.
4. RIGHT OF FIRST REFUSAL
(a) In the event any of the restrictions on the Shares as contained herein are
determined to be illegal, as an illegal restraint on alienation or otherwise,
and if in that event the Shareholder desires to sell all of the Shares ("Offered
Shares") to any person or entity other than the Corporation ("Transferee"), such
Shareholder ("Offeror Shareholder") shall first give written notice thereof to
the Corporation by certified or registered mail, return receipt requested
("Notice of Offer"). The Notice of Offer shall include: (i) a true copy of a
bona fide, signed, written offer by the Transferee to purchase the Offered
Shares, the per share price ("Purchase Price") and the terms ("Purchase Terms")
upon which such offer is made, and the name and the residence address of the
Transferee; and (ii) an offer to sell all the Offered Shares at the Purchase
Price and on the Purchase Terms to the Corporation and, in the event the
Corporation is unable or does not desire to purchase the Offered Shares, to
Xxxxx Xxxxxx, a shareholder (hereinafter referred to as "Offeree Shareholder").
The Corporation first shall have the option to purchase all of the Offered
Shares, exercisable within thirty (30) days of the date on which the Notice of
Offer was given, and, if the Corporation is unable or does not desire to
purchase all of the Offered Shares, then the Offeree Shareholder shall have the
option, exercisable after the Corporation's rejection (or deemed rejection which
shall, occur if the Corporation fails to respond to the Notice of Offer within
the Corporation Election Period, as hereinafter defined) of the offer contained
in the Notice of Offer, but within sixty (60) days of the date on which the
Notice of Offer was given, to
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purchase all, but not less than all, the Offered Shares at the Purchase Price
and on the Purchase Terms. The Corporation shall give notice of its election to
accept or reject the offer contained in the Notice of Offer in writing to the
Offeror Shareholder ("Election Notice") within thirty (30) days after the date
on which the Notice of Offer was given ("Corporation Election Period"), and the
Offeree Shareholder shall give notice of its or his/her election to accept or
reject the offer contained in the Notice of Offer in writing to the Offeror
Shareholder after the Corporation's rejection (or deemed rejection of the offer
contained in the Notice of Offer), but within sixty (60) days after the date on
which the Notice of Offer was given ("Shareholder Election Period").
In the event the Corporation elects not to purchase the Offered Shares, the
Offeree Shareholder who has indicated an election to accept the offer contained
in the Notice of Offer (hereinafter referred to as ("Purchasing Shareholder")
shall purchase all the Offered Shares at the Purchase Price and on the Purchase
Terms.
In the event that neither the Corporation nor the Offeree Shareholder elects to
accept the offer contained in the Notice of Offer within the Corporation
Election Period and the Shareholder Election Period, the Offeror Shareholder
may sell the Offered Shares to the Transferee for the Purchase Price and subject
to the Purchase Terms; provided, however, that said sale to the Transferee must
be unconditionally concluded within sixty (60) days after the expiration of the
Shareholder Election Period or the Offeror Shareholder must again of fer the
Offered Shares to the Corporation and the Offeree Shareholders in accordance
with the provisions of this Section.
(b) The closing ("Closing") under this Section shall be held on the date
set forth for Closing in the Purchase Terms, which date shall be no earlier than
the sixtieth (60th) day, nor later than the one hundred twentieth (120th) day,
following the date on which the Notice of Offer is given. At Closing, Offeror
Shareholder shall (i) represent and warrant that she or it is the sole owner of
the Shares being sold, that such Shares are held free and clear of any and all
pledges, claims, liens and rights of others (other than the effect of this
Agreement) and that the Offeror Shareholder has the full power, right and
authority to consummate the transaction; (ii) resign from all corporate offices
and directorships held by such Offeror Shareholder, or his/her designee; and
(iii) deliver to the Corporation or the Purchasing Shareholder, as the case may
be, the Shares so sold, duly endorsed for transfer with all necessary stock
transfer tax stamps affixed, together with all other documents necessary to
transfer such Shares.
(c) In the event that the Corporation or the Offeree Shareholder
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indicates in the Corporation Election Notice or the Shareholder Election Notice
an election to accept the offer contained in the Notice of Offer, and, through
no fault of the Offeror Shareholder, the Corporation or the Offeree
Shareholder fails to close on the Offered Shares within the time period provided
in Section 4(b) hereof ("Default"), the Offeror Shareholder, in addition to any
other rights and remedies she may have at law or in equity, may sell, transfer,
or otherwise dispose of or pledge the Offered Shares or any portion thereof at
any consideration therefor to a third party.
5. PROTECTION OF VALUE. In the event the Corporation or its shareholders sell
in a single transaction fifty percent (50%) or more of its outstanding common
stock or substantially all of the assets of the Corporation (the "Sale"), then
within ninety (90) days of the Sale, Employee shall have the right to sell to
the Corporation its Shares at the same value per share received by the
Corporation or its selling shareholders in the Sale at the value per share based
upon a valuation of the Corporation's stock at fair market value determined by
virtue of the Sale price by an independent certified public account regularly
used by the Corporation, which determination shall be final and binding upon the
parties. In the event the Sale occurs within ninety (90) days of purchase by the
Corporation of the Shares under Section 2 hereunder, the purchase price under
Section 2 shall be revalued to be a price calculated pursuant to this Section 5,
and the Corporation shall pay any difference to Shareholder within 10 days of
such revaluation.
6. APPOINTMENT AS DIRECTOR. Xxxxx Xxxxxx, as majority shareholder and Director
of the Corporation may, in his sole discretion, vote to elect the Shareholder to
the Board of Directors to serve as a Director for as long as he deems
appropriate.
7. SUBCHAPTER S STATUS AND ELECTIONS
(a) Shareholder agrees that it is currently in the Corporation's best interest
to elect to be treated as an S corporation within the meaning of Code Section
1361. Shareholder covenants and agrees not to do any act, or fail to do any act,
directly or indirectly, the commission or omission of which would voluntarily or
involuntarily cause the termination of any Subchapter B election of the
Corporation, unless requested to take such action by the Corporation. In order
to maintain such Subchapter S status, notwithstanding anything provided in this
Agreement herein to the contrary, Shareholder and any permissible transferee of
Shareholder may not transfer the beneficial ownership of any share of their
Shares in the Corporation if such transfer or acquisition would cause the
Corporation's Subchapter S status to terminate, including, but not limited to
transfers to, or acquisitions by: (a) any person who would cause the Corporation
to have more than
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35 shareholders; (b) any nonresident alien; or (c) any person other than an
individual, an estate or a qualified Subchapter S trust (within the meaning of
Code Section 1361(d) . The Corporation's Board of Directors may, in their sole
and absolute discretion, impose such other restrictions upon the sale or
transfer of Shareholder's Shares as they shall deem appropriate to maintain the
corporation's Subchapter S status. Shareholder shall take whatever action is
required, either individually or jointly with other shareholders, to continue
the Subchapter S election, and prevent its termination.
(b) In accordance with Code Section 1377(a) (2), for any taxable year that
Shareholder's interest in the Corporation terminates, Shareholder agrees to
determine his pro rata share of the Corporation's items of income, lose,
deductions, and credits by closing the books of the Corporation on the date of
such termination. Shareholder agrees to execute any election or consent forms
necessary to effectuate the foregoing.
(c) In accordance with Code Section 1362(e) (3), in taxable years in which the S
corporation status of the Corporation terminates, Shareholder agrees to allocate
the income, loss, deductions, and credits attributable to its S corporation
short taxable year, (as defined in Code Section 1362(e)) and its C corporation
short taxable year (as defined in Code Section 1362 (e), by closing the books of
the Corporation on the date that its S corporation status terminates.
Shareholder agrees to execute any election or consent forms necessary to
effectuate the foregoing.
(d) If any provision or any portion of any provision of this Agreement, or the
application of any such provision or any portion thereof to any person or
circumstance operates directly or indirectly to cause the termination of any
Subchapter S election of the Corporation, then such provision or portion of any
provision shall be severed from this Agreement and shall be unenforceable. All
remaining portions of this Agreement shall continue in full force.
(e) Nothing herein shall prevent the Corporation from terminating its "S"
election as its deems appropriate.
8. LEGENDS. So long as the Corporation deems it necessary or appropriate, all
certificates representing the Shares shall bear legends on the face thereof
substantially as follows:
THE TRANSFER OF THE SHARES REPRESENTED BY THIS CERTIFICATE, AND ALL RIGHTS
REPRESENTED BY SUCH SHARES, ARE SUBJECT TO THE TERMS OF A SHAREHOLDERS
AGREEMENT BETWEEN THE CORPORATION, XXXXXXX X. XXXXXX DATED NOVEMBER 15,
1994, AS THE SAME MAY BE AMENDED, A COPY OF WHICH AGREEMENT IS ON FILE AT
THE PRINCIPAL OFFICE OF THE CORPORATION. ANY PERSON WHO WISHES
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TO BECOME THE OWNER OF THIS CERTIFICATE OR OF THE SHARES WHICH IT
REPRESENTS, OR TO OBTAIN ANY INTEREST IN SUCH CERTIFICATE OR SHARES, SHALL
AGREE TO BECOME BOUND BY THE PROVISIONS OF SUCH AGREEMENT. THE SHARES
REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE.
THESE SHARES HAVE BEEN ACQUIRED FOR AN INVESTMENT, AND MAY NOT BE SOLD,
TRANSFERRED, PLEDGED, OR HYPOTHECATED IN THE ABSENCE OF ANY EFFECTIVE
REGISTRATION STATEMENT FOR SUCH SHARES UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND ANY APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL
ACCEPTABLE TO COUNSEL FOR THE CORPORATION THAT REGISTRATION IS NOT REQUIRED
UNDER SUCH LAWS.
9. FUTURE SHARES. The Shareholder agrees that any Shares it obtains during the
term of its employment with the Corporation shall be subject to the terms and
conditions of this Agreement.
10. INDEMNIFICATION. The Shareholder shall hold harmless and on demand indemnify
the other shareholders of the Corporation, pro rata, based as a percentage of
stock ownership, from and against any and all liabilities, costs, damages,
expense, and attorney's fees resulting from or attributable to any losses,
claims, payments, judgments, or other monetary loss sustained by any shareholder
in connection with any obligation of the Corporation which has been personally
guaranteed or co-signed by any shareholder of the Corporation.
11. TERMINATION; STATUS OF SHAREHOLDER. This Agreement shall terminate upon the
dissolution of the Corporation or upon an agreement in writing of all the
parties. The is Agreement shall otherwise remain in effect until the either the
Corporation buys back or cancels the Shares as provided herein or fails to
purchase the Shares within the time periods provided herein, or unless otherwise
terminated by the provisions herein.
12. SUCCESSORS AND ASSIGNS. This Agreement shall inure to the benefit of, and be
binding upon, the successors, administrators, heirs, legal representatives and
permitted assigns of the Shareholder and of the Corporation, subject to the
provisions of this Agreement. Shareholder, in furtherance thereof, shall execute
a Last Will and Testament, directing his/her personal representatives to perform
this Agreement and to execute all documentation necessary to effectuate the
purposes of this Agreement, but the failure to execute such Last Will and
Testament shall not affect the rights of any Shareholder or the obligations of
any estate, as provided in this Agreement.
13. NOTICES. All notices, requests, consents and other communications required
or permitted under this Agreement shall be in writing (including telex and
telegraphic communication) and
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shall be (as elected by the person giving such notice) hand delivered by
messenger or courier service, telecommunicated, or mailed (airmail if
international) by registered or certified mail (postage prepaid), return receipt
requested, to the addresses listed above or to such other address as any party
may designate by notice complying with the terms of this Section. Each such
notice shall be deemed delivered (a) on the date delivered if by personal
delivery, (b) on the date telecommunicated if by telegraph, (c) on the date of
transmission with confirmed answer back if by telex or telefax, and (d) on the
date upon which the return receipt is signed or delivery is refused or the
notice is designated by the postal authorities as not deliverable, as the case
may be, if mailed.
14. JURISDICTION AND VENUE. The parties acknowledge that a substantial portion
of negotiations, anticipated performance and execution of this Agreement
occurred or shall occur in Palm Beach County, Florida, and that, therefore,
without limiting the jurisdiction or venue of any other federal or state courts,
each of the parties irrevocably and unconditionally (a) agrees that any suit,
action or legal proceeding arising out of or relating to this Agreement may be
brought in the courts of record of the State of Florida in Palm Beach County or
the court of the United States, Southern District of Florida; (b) consents to
the jurisdiction of each such court in any such suit, action or proceeding; (c)
waives any objection which it may have to the laying of venue of any such suit,
action or proceeding in any of such courts; and (d) agrees that service of any
court paper may be effected on such party by mail, as provided in this
Agreement, or in such other manner as may be provided under applicable laws or
court rules in said state.
15. AMENDMENTS. The Shareholder hereby irrevocably agrees that no attempted
amendment, modification, termination, waiver, discharge or change (collectively,
"Amendment") of this Agreement shall be valid and effective, unless the
Shareholder and the Corporation agree in writing to such Amendment.
16. GOVERNING LAW. This Agreement shall be construed under the laws of the State
of Florida and venue of any proceedings in connection herewith shall be in Palm
Beach County, Florida.
17. COUNTERPARTS. This Agreement may be executed in counterparts, each of which
shall be deemed an original and all of which taken together shall constitute one
and the same instrument, and shall be effective as to each party upon his/her
signing of such counterpart notwithstanding the fact that the other parties have
not signed it.
18. SPECIFIC PERFORMANCE. Because the Shares of the Corporation cannot be
readily purchased or sold in the open market, and for
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other reasons, the parties will be irreparably damaged if this Agreement is not
specifically enforced. In the event of a breach or threatened or attempted
breach of any provision of this Agreement by any party hereto, the other parties
shall, in addition to all other remedies, be entitled to temporary and permanent
injunctions restraining such breach, without being required to show any actual
damage or to post any bond or other security, and/or to a decree for specific
performance of the provisions hereof.
19. ENTIRE AGREEMENT. This Agreement represents the entire understanding and
agreement between the parties with respect to the subject matter hereof, and
supersedes all other negotiations, understandings and representations (if any)
made by and between such parties.
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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
on the day and year first above written.
WITNESSES: THE CORPORATION:
Xxxxxx Technologies, Inc.
Xxxx Xxxxxxxx /s/ Xxxxx Xxxxxx
------------------------------ ---------------------------
XXXXX XXXXXX, President
Xxxxxxxx X. Xxxxxxx THE SHAREHOLDER:
------------------------------
/s/ Xxxxxxx X. Xxxxxx
Xxxx Xxxxxxxx ---------------------------
------------------------------ XXXXXXX X. XXXXXX
Xxxxxxxx X. Xxxxxxx
------------------------------
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Exhibit C of Employment Agreement
INVENTION ASSIGNMENT AND CONFIDENTIALITY AGREEMENT
THIS AGREEMENT is entered into this 14th day of November, 1994, by and between
Xxxxxx Technologies, Inc. (DTI) and XXXXXXX X. XXXXXX Residing at 0000 X.X.
00XX XXXXXX, XXXXXXXXXX XXXXX, XX 00000, (hereinafter referred to as
"Employee") for and in consideration of Employee's continued employment or
engagement by DTI and the compensation that Employee shall receive during
Employee's employment or engagement, the parties agree as follows:
1. Both during and after Employee's employment or engagement:
a. Employee shall not disclose to anyone outside DTI any Confidential
Information. "Confidential Information" is defined as information which
has not been made publicly available by DTI or the third party owner of
such information, and
1. Which was developed by DTI, and relates to DTI's past, present, and
future business, including but not limited to developments (defined
below, technical data, specifications, designs, concepts,
discoveries, copyrights, improvements, product plans, research and
development, personal information, personnel information, financial
information, customer lists, leads, and/or marketing programs;
2. All documents marked as confidential and/or continuing such
information; and/or
3. All information DTI has acquired or received from a third party in
confidence.
b. Employee shall use Confidential Information only for DTI's business
purposes; and
c. Employee shall use any information received in confidence by DTI from
any third party only as permitted by written agreement between DTI and
the third party; and
d. Employee shall not be permitted to justify any disregard of the
obligations of Employee hereunder by using any of the Confidential
Information to guide a search by it of publications and other publicly
available information, selecting a series of items of knowledge from
unconnected sources and fitting them together by use of the integrated
disclosure of the information thereby to justify its disregard of the
obligations of confidence.
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2. Employee shall not disclose to DTI, use in DTI's business, or cause DTI to
use any information or material which is confidential to any third party
unless DTI has a written agreement with the third party allowing DTI to
receive and use the confidential information or materials. Employee will
not incorporate into Employee's work any material which is subject to the
copyrights of any third party unless DTI has the right to copy and
incorporate such copyrighted material.
3. When Employee is no longer employed or engaged by DTI, Employee shall
return to DTI all DTI property, and any and all third party property,
including all Confidential Information, drawings, computer programs or
copies thereof, documentation, notebooks and notes, reports and any other
materials on electronic or printed media.
4. Employee hereby grants, transfers and assigns to DTI all of his or her
rights, title and interest, if any, in any and all Developments, including
rights to translation and reproductions in all forms or formats and the
copyrights and patent rights thereto, if any, and he or she agrees that DTI
may copyright said materials in DTI's name and secure renewal, reissues and
extensions of such copyrights for such periods of time as the law may
permit. "Developments" is defined as any idea, invention, process, design,
concept, or useful article (whether the design is ornamental or otherwise),
computer program, documentation, literary work, audiovisual work and any
other work of authorship, hereafter expressed, made or conceived solely or
jointly by Employee during Employee's employment or engagement, whether or
not subject to patent, copyright or other forms of protection that:
a. Are related to the actual or anticipated business, research or
Development of DTI; and/or
b. Are suggested by or result from any task assigned to Employee or work
performed by Employee for or on behalf of DTI.
Employee acknowledges that the copyrights in Developments created by
Employee in the scope of Employee's employment or engagement, belong to DTI
by operation of law, or may belong to a party engaged by DTI by operation
of law pursuant to a works for hire contract between DTI and such
contracted part. To the extent the copyrights in such works may not be
owned by DTI or such contracted party by operation of law, Employee hereby
assigns to DTI or such contracted party, as the case may be, all copyrights
(if any) Employee may have in Developments.
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Items not assigned by this Section 4 are listed and described on the
attached "Schedule of Separate Works". Employee agrees not to include any
part of such items in the materials Employee prepares for DTI unless and
until such items are licensed or assigned to DTI under separate written
agreement.
At all times hereafter, Employee agrees to assist DTI in obtaining patents
or copyrights on any Developments assigned to DTI that DTI, in its sole
discretion, seeks to patent or copyright. Employee also agrees to sign all
documents, and do all things necessary to obtain such patents or
copyrights, to further assign them to DTI, and to reasonably protect them
and DTI against infringement by other parties at DTI expense with DTI prior
approval. Employee irrevocably appoints any DTI-selected designee to act,
at all time hereafter, as his or her agent and attorney-in-fact to perform
all acts necessary to obtain patents and/or copyrights as required by this
Agreement if Employee (i) refuses to perform those acts or (ii) is
unavailable, within the meaning of the United States patent and Copyright
laws. It is expressly intended by Employee that the foregoing power of
attorney is coupled with an interest.
Employee shall keep complete, accurate, and authentic information and
records on all Developments in the manner and form reasonably requested by
DTI. Such information and records, and all copies thereof, shall be the
property of DTI as to any Developments assigned DTI. Employee agrees to
promptly surrender such information and records at the request of DTI as to
any Developments.
5. In connection with any of the Developments assigned by Section 4, Employee
agrees:
a. To disclose them promptly to DTI, and
b. At DTI's request, to execute separate written assignments to DTI and do
all things reasonable necessary to enable DTI to secure patents,
register copyrights or obtain any other form of protection for
Developments in the United States and in other countries. If Employee
fails or is unable to do so, Employee hereby authorizes DTI to act
under power of attorney for Employee to do all things to secure such
rights.
c. To provide DTI with notice of any inadvertent disclosure of
Confidential Information related to any Development.
6. Without limitation of any other agreement between Employee and DTI,
Employee shall not employ or engage or attempt to employ or engage the
services of any employee of DTI, either
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directly or through the agency of a third party during the term of, or
within six (6) months after, the termination of Employee's employment or
engagement with DTI.
7. DTI, its subsidiaries, licensees, successors or assigns, (direct or
indirect) are not required to designate Employee as author of any
Development when such Development is distributed publicly or otherwise.
Employee waives and releases, to the extent permitted by law, all
Employee's rights to such designation and any rights concerning future
modifications of such Developments.
8. Rights, assignments, and representations made or granted by Employee in
this Agreement, are assignable by DTI and are for the benefit of DTI's
successors, assigns, and parties contracted with DTI.
9. Miscellaneous Provisions.
a) Amendments. The provisions of this Agreement may not be amended,
supplemented, waived or changed orally, but only by a writing signed by
the party as to whom enforcement of any such amendment, supplement,
waiver or modification is sought and making specific reference to this
Agreement.
b) Further Assurances. The parties hereby agree from time to time to
execute and deliver such further and other transfers, assignments and
documents and do all matters and things which may be convenient or
necessary to more effectively and completely carry out the intentions
of this Agreement.
c) Brokers. Each of the parties represents and warrants that such party
has dealt with no broker or finder in connection with any of the
transactions contemplated by this Agreement, and, insofar as such party
knows, no broker or other person is entitled to any commission or
finder's fee in connection with any of these transactions. The parties
each agree to indemnify and hold harmless one another against any loss,
liability, damage, cost, claim or expense incurred by reason of any
brokerage commission or finder's fee alleged to be payable because of
any act, omission or statement of the indemnifying party.
d) Binding Effect. All of the terms and provisions of this Agreement,
whether so expressed or not, shall be binding upon, inure to the
benefit of, and be enforceable by the parties and their respective
administrators, executors, legal representatives, heirs, successors and
permitted assigns.
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e) Headings. The headings contained in this Agreement are for convenience of
reference only, are not to be considered a part hereof and shall not limit
or otherwise affect in any way the meaning or interpretation of this
Agreement.
f) Severability. If any provision of this Agreement or any other Agreement
entered into pursuant hereto is contrary to, prohibited by or deemed
invalid under applicable law or regulation, such provision shall be
inapplicable and deemed omitted to the extent so contrary, prohibited or
invalid, but the remainder hereof shall not be invalidated thereby and
shall be given full force and effect so far as possible. If any provision
of this Agreement may be construed in two or more ways, one of which would
render the provision invalid or otherwise voidable or unenforceable and
another of which would render the provision valid and enforceable, such
provision shall have the meaning which renders it valid and enforceable.
g) Survival. All covenants, agreements, representations and warranties made
herein or otherwise made in writing by any party pursuant hereto shall
survive the execution and delivery of this Agreement and the termination
of employment or engagement of Employee.
h) Waivers. The failure or delay of any party at any time to require
performance by another party of any provision of this Agreement, even if
known, shall not affect the right of such party to require performance of
that provision or to exercise any right, power or remedy hereunder. Any
waiver by any party of any breach of any provision of this Agreement should
not be construed as a waiver of any continuing or succeeding breach of such
provision, a waiver of the provision itself, or a waiver of any right,
power or remedy under this Agreement. No notice to or demand on any party
in any case shall, of itself, entitle such party to any other or further
notice or demand in similar or other circumstances.
i) Specific Performance. Each of the parties acknowledges that the parties
will be irreparably damage (and damages at law would be an inadequate
remedy) if this Agreement is not specifically enforced. Therefore, in the
event of a breach or threatened breach by any party of any provision of
this Agreement, then the other parties shall be entitled, in addition to
all other rights or remedies, to injunctions restraining such breach,
without being required to show any actual damage or to post any bond or
other security, and/or to a decree for specific performance of the
provisions of this
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Agreement.
j) Jurisdiction and Venue. The parties acknowledge that a substantial portion
of negotiations and anticipated performance and execution of this
Agreement occurred or shall occur in Palm Beach County, Florida, and that,
therefore, without limiting the jurisdiction or venue of any other federal
or state courts, each of the parties irrevocably and unconditionally (a)
agrees that any suit, action or legal proceeding arising out of or
relating to this Agreement may be brought in the courts of record of the
State of Florida in Palm Beach County or the court of the United States,
Southern District of Florida; (b) consents to the jurisdiction of each
such court in any suit, action or proceeding; (c) waives any objection
which it may have to the laying of venue of any such suit, action or
proceeding in any of such courts; and (d) agrees that service of any court
paper may be effected on such party by mail, as provided in this
Agreement, or in such other manner as may be provided under applicable
laws or court rules in said state.
k) Remedies Cumulative. Except as otherwise expressly provided herein, no
remedy herein conferred upon any party is intended to be exclusive of any
other remedy, and each and every such remedy shall be cumulative and shall
be in addition to every other remedy given hereunder or now or hereafter
existing at law or in equity or by statute or otherwise. No single or
partial exercise by any party of any right, power or remedy hereunder
shall preclude any other or further exercise thereof.
l) Government Law. This Agreement and all transactions contemplated by this
Agreement shall be governed by, and construed and enforced in accordance
with, the internal laws of the State of Florida without regard to
principles of conflicts of laws.
m) Preparation of Agreement. This Agreement shall not be construed more
strongly against any party regardless of who is responsible for its
preparation. The parties acknowledge each contributed and is equally
responsible for its preparation.
n) Entire Agreement. This Agreement represents the entire understanding and
agreement among the parties with respect to the subject matter hereof, and
supersedes all other negotiations, understandings and representations (if
any) made by and among such parties.
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IN WITNESS WHEREOF, the parties have duly set their hands to this Agreement,
effective as of the date stated above.
Xxxxxx Technologies, Inc. Employee
/s/ Xxxxx Xxxxxx /s/ Xxxxxxx X. Xxxxxx
---------------------------- ---------------------------
Xxxxx Xxxxxx, President XXXXXXX X. XXXXXX
11/15/94 11/15/94
---------------------------- ---------------------------
Date Date
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EXHIBIT D to EMPLOYMENT AGREEMENT
NON-SOLICITATION AND NON-COMPETE AGREEMENT
THIS NON-SOLICITATION AND NON-COMPETE AGREEMENT ("Agreement") made as of
this 15th day of November, 1994 by and between Xxxxxx Technologies, Inc., an
Illinois corporation with its principal office at 000 Xxxxx Xxxxx Xxxx, Xxxxx
000, Xxxx Xxxxx, Xxxxxxx 00000 (hereinafter called "Xxxxxx") and XXXXXXX X.
XXXXXX Residing at 0000 X.X. 00XX XXXXXX, XXXXXXXXXX XXXXX, XX 00000
(hereinafter "Employee").
WHEREAS, Employee is accepting employment with Xxxxxx; and
WHEREAS, the parties wish to reflect their agreement as to Employee's
promises regarding Employee's solicitation and competition which have induced
Xxxxxx to employ Employee at Employee's status with Xxxxxx, as well as Daleen's
extension of certain severance benefits to Employee.
NOW, THEREFORE, Employee and Xxxxxx (hereinafter sometimes referred to
collectively as the "parties" and separately as a "party") in consideration of
Employee's employment with Xxxxxx and the covenants hereinafter set forth and
other good and valuable consideration and intending to be legally bound hereby,
agree as follows:
1. NON-SOLICITATION. Employee will not, at any time while employed by
Xxxxxx and for one (1) year after the termination of Employee's employment
with Xxxxxx for any reason whatsoever, directly or indirectly (by assisting or
suggesting to another, or otherwise) solicit or otherwise attempt to induce or
accept the initiative of another in such regard, alone or by combining or
conspiring with anyone, any employees, officers, directors, agents,
consultants, representatives, contractors, suppliers, distributors, customers
or other business contacts (collectively, "Business Affiliates") of Xxxxxx to
terminate or modify its position as an employee, officer, director, agent,
consultant, representative, contractor, supplier, distributor, customer or
business contact with Xxxxxx or to compete against Xxxxxx.
2. NON-COMPETITION. (a) Employee shall not while employed by Xxxxxx, and
after the termination of said employment for any reason whatsoever for the time
period after such termination described in paragraph (c) below (the "No-Compete
Period"), directly or indirectly, as owner, officer, director, employee, agent,
lender, broker, investor, consultant or representative of any corporation or as
owner of any interest in, or as an employee, agent, consultant, partner,
affiliate or in any other capacity whatsoever or representative of any other
form of business association, sole proprietorship or partnership, conduct or be
related to any business in competition with any business of Xxxxxx
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now or in the future, including without limitation, the licensing, development
or sale of computer software or computer consulting services (herein referred
to as the "Competitive Business") anywhere within the territories, nor as to
certain customers anywhere in the United States, both listed on the
"Territories and Customers" Exhibit to the Agreement, made a part hereof,
including without limitation, the solicitation of any customers, who were at
any time customers of Xxxxxx and in connection with a business which is
competitive with the Competitive Business except that such competitive activity
will be permitted as to business solicitation of and competition with Xxxxxx as
to any entity listed on an Exhibit to this Agreement made a part hereof
identified as a "No-Compete Exception", if any, subject to paragraph (c) below.
(b) In addition to, and not in limitation of the other provisions hereof
or of any other Agreement between Employee and Xxxxxx, Employee shall not at
any time in any manner other than in the ordinary course of good faith
competition only as permitted herein interfere with, disturb, disrupt, decrease
or otherwise jeopardize the business of Xxxxxx or do or permit to be done
anything which may tend to take away or diminish the trade, business or good
will of Xxxxxx or give to any person the benefit or advantage of Company's or
Seller's methods of operation, advertising, publicity, training, business
customers or accounts, or any other information relating or useful to Daleen's
business.
(c) The No-Compete Period shall increase depending upon the duration of
Employee's employment with Xxxxxx as follows:
i) If Employee has completed an Employment Period (as defined in the
Employment Agreement to which this Agreement is an Exhibit) of
between one (1) and four hundred and forty nine (449) days, subject
to the No-Compete Exception, then the No-Compete Period will be one
hundred and eighty (180) days;
ii) If Employee has completed an Employment Period of four hundred and
fifty (450) days or more, then the No-Compete Period will be one (1)
year.
3. LEGAL EFFECT. The foregoing covenants of Employee shall be deemed
severable, and the invalidity of any covenant shall not affect the validity or
enforceability of any other covenant. The existence of any claim or cause of
action by Employee against Xxxxxx predicated on this Agreement or otherwise,
shall not constitute a defense to the enforcement by Xxxxxx of these covenants.
Daleen's failure to object to any conduct in violation of this Agreement shall
not be deemed a waiver by Xxxxxx, but Xxxxxx may, if it wishes, specifically
waive any part or all of those covenants to the extent that such waiver is set
forth in writing duly authorized by Daleen's Board of Directors.
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Employee acknowledges and confirms that the length of the term and
geographical restrictions contained herein are fair and reasonable and not the
result of overreaching, duress or coercion of any kind. Employee further
acknowledges and confirms that his or her full, uninhibited and faithful
observance of each of the covenants contained in this Agreement will not cause
him or her any undue hardship, financial or otherwise, and that enforcement of
each of the covenants contained in this Agreement will not impair his or her
ability to obtain employment commensurate with his or her abilities and on
terms fully acceptable to him or her or otherwise to obtain income required for
the comfortable support of him or her and his or her family and the
satisfaction of the needs of his or her creditors. Employee acknowledges and
confirms that his or her special knowledge of the business of Xxxxxx is such as
would cause Xxxxxx serious injury and loss if he or she were to use such
ability and knowledge to the benefit of a competitor or were to compete with
Xxxxxx.
In the event that any court shall finally hold that the time or territory
or any other provision stated in this Agreement constitutes an unreasonable
restriction upon Employee, Employee hereby expressly agrees that the provisions
of this Agreement shall not be rendered void, but shall apply as to time and
territory or to such other extent as such court may judicially determine or
indicate constitutes a reasonable restriction under the circumstances involved.
Employee hereby agrees that in the event of the violation by him or her of any
of the provisions of this Agreement, Xxxxxx will be entitled if it so elects,
to institute and prosecute proceedings at law or in equity to obtain damages
with respect to such violation or to enforce the specific performance of this
Agreement by Employee or to enjoin Employee from engaging in any activity in
violation hereof without any requirement on the part of Xxxxxx to post any bond.
In the event Xxxxxx should bring any legal action or other proceeding for
the enforcement of this Agreement, the time for calculating the No-Compete
Period or terms of any other restriction herein shall not include the period of
time commencing with the filing of legal action or other proceeding to enforce
the terms of this Agreement through the date of final judgment or final
resolution, including all appeals, if any, of such legal action or other
proceeding.
4. SEVERANCE. In further consideration of the entering into of this
Agreement by Employee, Xxxxxx agrees to entitle Employee to a severance pay
benefit equivalent to six (6) months base salary. The foregoing severance
benefit shall be paid by Xxxxxx one month at a time until such time when the
entire severance benefit has been paid. No credit toward entitlement of
additional months of severance pay shall be earned for any partial month
worked, and Employee shall not be entitled to any severance benefit if
terminated by Xxxxxx for "cause" or if Employee
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voluntarily resigns from his or her employment with Xxxxxx. As used in this
Agreement determination for "cause" shall be defined as termination of Employee
by Xxxxxx in the event Employee has been convicted of any felony or, in the case
of other crimes, involving moral turpitude or dishonesty, or for any breach by
Employee of any agreement with Xxxxxx or of its employment or business policies
(including without limitation theft or misuse of company property), or for any
other act or omission by Employee which does not fit into the previous
categories but which Xxxxxx in good faith believes has occurred to its detriment
and about which Employee has received at least one (1) written warning by
Xxxxxx and despite such prior written warning, Employee has on a second
occasion committed such act or omission. Any termination of this Agreement for
"cause" shall be done in writing, with a written statement of the reasons for
the termination. Conflicts under this Agreement only as to validity of a
termination for "cause" shall be settled by binding arbitration in accordance
with the commercial arbitration rules of the American Arbitration Association,
in Palm Beach County, Florida.
5. MISCELLANEOUS PROVISIONS.
The provisions of this Agreement may not be amended, supplemented, waived or
changed orally, but only by a writing signed by the party as to whom enforcement
of any such amendment, supplement, waiver or modification is sought and making
specific reference to this Agreement. All of the terms and provisions of this
Agreement, whether so expressed or not, shall be binding upon, inure to the
benefit of, and be enforceable by the parties and their respective
administrators, executors, legal representatives, heirs, successors and
permitted assigns. The headings contained in this Agreement are for convenience
of reference only, are not to be considered a part hereof and shall not limit or
otherwise affect in any way the meaning or interpretation of this Agreement. The
failure or delay of any party at any time to require performance by another
party of any provision of this Agreement, even if known, shall not affect the
right of such party to require performance of that provision or to exercise any
right, power or remedy hereunder. Any waiver by any party of any breach of any
provision of this Agreement should not be construed as a waiver of any
continuing or succeeding breach of such provision, a waiver of the provision
itself, or a waiver of any right, power or remedy under this Agreement, No
notice to or demand on any party in any case shall, of itself, entitle such
party to any other or further notice or demand in similar or other
circumstances.
The parties acknowledge that a substantial portion of negotiations,
anticipated performance and execution of this Agreement occurred or shall occur
in Palm Beach County, Florida, and that, therefore, without limiting the
jurisdiction or venue of any other federal or state courts, each of the parties
irrevocably
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and unconditionally (a) agrees that any suit, action or legal proceeding
arising out of or relating to this Agreement may be brought in the courts of
record of the State of Florida in Palm Beach County or the District Court of the
United States, Southern District of Florida; (b) consents to the jurisdiction of
each such court in any suit, action or proceeding; (c) waives any objection
which it may have to the laying of venue of any such suit, action or proceeding
in any of such courts; and (d) agrees that service of any court paper may be
effected on such party by mail, as provided in this Agreement, or in such other
manner as my be provided under applicable laws or court rules in said state.
Except as otherwise expressly provided herein, no remedy herein conferred upon
any party is intended to be exclusive of any other remedy, and each and every
such remedy shall be cumulative and shall be in addition to every other remedy
given hereunder or now or hereafter existing at law or in equity or by statute
or otherwise. No single or partial exercise by any party of any right, power or
remedy hereunder shall preclude any other or further exercise thereof. This
Agreement and all transactions contemplated by this Agreement shall be governed
by, and construed and enforced in accordance with, the internal laws of the
State of Florida without regard to principles of conflicts of laws. This
Agreement shall not be construed more strongly against any party regardless of
who is responsible for its preparation. The parties acknowledge each contributed
and is equally responsible for its preparation. Any time period provided for
herein which shall end on a Saturday, Sunday or legal holiday shall extend to
5:00 p.m. of the next full business day. This Agreement represents the entire
understanding and agreement amount the parties with respect to the subject
matter hereof, and supersedes all other negotiations, understandings and
representations (if any) made by and among such parties.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
written above.
Xxxxxx Technologies, Inc.
/s/ Xxxxxxx X. Xxxxxx /s/ Xxxxx Xxxxxx
-------------------------- ---------------------------------
XXXXXXX X. XXXXXX Xxxxx Xxxxxx
President
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NO-COMPETE EXCEPTIONS
---------------------
Exhibit to Non-Solicitation and Non-Compete Agreement of XXXXXXX X. XXXXXX.
None
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TERRITORIES AND CUSTOMERS
-------------------------
Exhibit to Non-Solicitation and Non-Compete Agreement of XXXXXXX X. XXXXXX.
The United States of America
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