EXHIBIT 10.6
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (the "Agreement") entered into as of this 20th day of
January, 2006, is by and between CyGene Laboratories, Inc., a Delaware
corporation (the "Company") and Xxxxx X. Xxxxxxxx (the "Executive").
WHEREAS, the Company in its business has created, developed, and
acquired certain patented technology and trade secrets, including, but not
limited to, proprietary processes, sales methods and techniques, business and
technical information, including, but not limited to, designs, systems, business
and operational methods, pricing methods and rates, discounts, other processes,
procedures, formulas, hardware, and software, and improvements and modifications
thereof, whether patented, copyrighted, or protected as a trade secret, or
otherwise, that is of any value whatsoever to the Company, as well as certain
information relating to the Company's research and development, products and
services, information concerning proposed new products and services, marketing
and feasibility studies, proposed or existing marketing techniques or plans,
other Confidential Information, as defined below, and information about the
Company's employees, independent contractors, officers, and directors, which
necessarily will be communicated to, or ascertained by, the Executive by reason
of the Executive's employment by the Company; and
WHEREAS, the Company has strong and legitimate business interests in
preserving and protecting its investment in the Executive, the Company's trade
secrets, and the Confidential Information, and the Company's substantial,
significant, or key relationships with its customers, suppliers, and vendors,
actual and prospective; and
WHEREAS, the Company desires to preserve and protect its legitimate
business interests by restricting certain competitive activities of the
Executive during the term of his employment and following the termination of
employment for a reasonable time; and
WHEREAS, the Company desires to employ the Executive and to ensure the
continued availability to the Company of the Executive's services, and the
Executive is willing to accept such employment and render such services, all
upon and subject to the terms and conditions contained in this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants set forth in this Agreement, and intending to be legally bound, the
Company and the Executive agree that the above recitals are true and correct,
and further agree as follows:
1. REPRESENTATIONS AND WARRANTIES. The Executive hereby
represents and warrants to the Company that (i) there are no restrictions,
agreements, or understandings, to which Executive is party to, or otherwise
subject to, which does, or would, prevent or make unlawful, the Executive's
execution of this Agreement or the Executive's employment pursuant to this
Agreement, or which is or would be inconsistent, or in conflict with, this
Agreement or the Executive's employment pursuant to this Agreement, or would
prevent, limit, or impair, in any way, the performance by the Executive of his
obligations pursuant to this Agreement; and (ii) the Executive is not a party
to, or otherwise subject to, any nonsolicitation, noncompetition,
confidentiality, or nonuse/nondisclosure, restrictions, agreements, or
understandings, which does or could affect his employment with the Company; and
(iii) has not brought, and will not bring or use, any trade secrets,
confidential, or proprietary information, documents, or other intellectual,
intangible, or personal property, of a prior employer; and (iv) has not
previously been convicted of any felony; and (v) has not been previously
convicted or charged with any misdemeanor involving theft, fraud, embezzlement,
or perjury.
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2. TERM OF EMPLOYMENT.
(a) Term. The Company hereby employs the Executive, and the
Executive hereby accepts employment with the Company for a period commencing on
the date of this Agreement and ending and/or renewing in accordance with the
terms of Section 6.
(b) Continuing Effect. Notwithstanding any termination of
employment, at the end of the term or otherwise, the provisions of Sections 7
and 8 shall remain in full force and effect and shall be binding upon the legal
representatives, successors and assigns of the Executive.
3. DUTIES.
(a) General Duties. The Executive shall serve as the Vice
President of Business Development of the Company, with duties and
responsibilities that are customary for such position. The Executive shall
report directly to the Company's Chief Executive Officer or as otherwise
directed by the board of directors of the Company. The Executive shall use his
best efforts to perform his duties and discharge his responsibilities pursuant
to this Agreement competently, carefully and faithfully.
(b) Devotion of Time. The Executive shall devote the majority
of his time, attention, and energy, during normal business hours (exclusive of
periods of sickness and disability and of such normal holiday and vacation
periods as established by the Company from time to time) to the affairs of the
Company. The Executive shall not enter the employ of, or serve as a consultant,
or adviser to, or in any way perform any services, with or without compensation
to, any other person, business, or organization with the exception of Xxxxxxxx
Enterprises.
(c) Adherence to Inside Information Policies. The Executive
acknowledges that the Company is publicly-held and, as a result, has implemented
inside information policies designed to preclude its employees from violating
securities laws by trading on material, non-public information, or passing such
information on to others in breach of any duty owed to the Company, or any third
party. The Executive shall promptly execute any and all agreements distributed
by the Company to its employees requiring such employees to abide by its inside
information policies.
4. COMPENSATION AND EXPENSES.
(a) Salary. In consideration for the services of the Executive
rendered pursuant to this Agreement, during the Term of this Agreement,
Executive shall earn a base salary at the rate of $100,000 per year, which shall
be accrued on a quarterly basis and shall be paid, net of payroll taxes, once
the Company has either received $1 million in debt or equity financing or once
the Company has achieved quarterly annualized revenues of $1 million based on
the most recent quarterly report. In addition, the Executive shall be entitled
to a bonus of 2% of gross profit achieved by the Company through the sales of
its products [gross profit shall be defined to be total revenue from sales minus
the aggregate cost of product packaging and processing]. Such bonus shall be
calculated at the end of each fiscal quarter and be paid in cash. In the event
that the Company closes one or more financing transactions whereby the Company
raises capital through the issuance or sale of securities (or a combination
thereof) or through a loan from a bank, financial institution, or other lender,
or a syndicate thereof, which in the aggregate provides funds to the Company, of
at least $2,500,000, the Executive's annual salary shall be increased to
$240,000 per year effective for the balance of the Term of this Agreement. Said
increase in base salary shall also take effect in the event that the Company
derives annualized gross revenues in any quarter in excess of $1,500,000 and, in
both cases, shall begin with the first quarter following the quarter where the
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qualifying revenues were booked, or in which the loans or other funding were
received.
(b) Expenses. In addition to any compensation earned pursuant
to Section 4(a), the Company shall reimburse or advance funds to the Executive
for all reasonable travel, entertainment, and miscellaneous expenses that are
documented by the Executive and incurred in connection with the performance of
his duties pursuant to this Agreement, in conformance with the Company's
policies as existing from time to time.
(c) Performance Bonuses.
(i) If the Company's gross revenues exceed $2,500,000
for fiscal year 2006, $5,000,000 for fiscal year 2007, and/or $10,000,000 for
fiscal year 2008 the Company shall issue to the Executive 200,000 5-year
warrants to purchase shares of common stock in the Company as a bonus for each
such year. The exercise price shall be 100% of the average closing price of the
Company's common stock for the last calendar month of the fiscal year for which
the warrants were earned.
(ii) Market Value Bonus: The executive shall be entitled
to a bonus based on increases in the Company's Market Capitalization (as defined
below). In the event that the Company Market Capitalization as of the end of any
fiscal quarter during the Term of this Agreement exceeds $50,000,000, you shall
accrue a one-time bonus of $100,000. Thereafter, you shall accrue an additional
bonus at the end of each fiscal quarter in an amount equal to 0.5% of the
amount, if any, by which the Company's Market Capitalization as of the end of
such quarter was in excess of the greater of (i) $50,000,000, or (ii) the amount
of the Company's Market Capitalization as of the most recent quarter for which a
bonus has been accrued to the Executive under this Section 4(c)(ii). All such
bonuses shall be paid in cash within 10 days after the filing of the company's
quarterly reports. As used herein, "Company's Market Capitalization" means, as
of the last day of any fiscal quarter, an amount equal to the average closing
price of the Company's common stock for the twenty (20) trading day period
ending on such day, multiplied by the total number of shares of the Company's
common stock issued and outstanding as of such day.
(iii) The warrants issued under this Section 4(c) shall be
irrevocable.
(d) Discretionary Bonus. Discretionary bonuses may be awarded
to the Executive by the Company's board of directors based on subjective
criteria (unrelated to actual operating results) evaluating the Executive's
efforts in connection with the Company's achievements, which may result in
future expansion and revenue.
(e) Initial Warrants. As further consideration for Executive's
covenants hereunder, the Company shall issue to Executive, upon execution of
this Agreement, 5-year warrants for the purchase of 650,000 shares of the common
stock of the Company, at an exercise price $0.50 per share.
(f) Terms and Exercise of Warrants. All warrants to be issued
to Executive under this Agreement shall be evidenced by five-year warrant
agreements in the form of Exhibit A attached to this Agreement. Warrants issued
under this Agreement shall have piggyback registration rights.
5. BENEFITS. Except for accrued vacation under Section 5(a), and
the benefits described under Section 5(c), no other benefits are available
during the first 90 days of this Agreement.
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(a) Vacation. During the term of employment, the Executive
shall be entitled to three weeks of vacation per year, in each instance without
loss of compensation or other benefits to which the Executive is entitled under
this Agreement, to be taken at such times as the Executive may request and the
affairs of the Company may permit.
(b) Employee Benefit Programs. The Executive is entitled to
participate in any insurance, pension, 401(k), or other employee benefit plan
that is maintained by the Company for its employees, including programs of life
and medical insurance and reimbursement of membership fees in professional
organizations.
(c) Insurance. The Company shall pay the premiums on the
Company's medical insurance policy covering the Executive.
6. TERMINATION.
(a) General Provisions. Upon effectiveness of such
termination, the Executive shall have no right to compensation or reimbursement
under Section 4 or to participate in any employee benefit programs under Section
5, except as may be expressly provided for by law for any period subsequent to
the effective date of termination. On or before the termination of the
Executive's employment or prior to receiving any final compensation or expenses
due him, the Executive shall (a) return to the Company's principal executive
offices, (b) participate in an exit interview, and (c) execute a Certificate of
Conclusion of Employment, certifying that he has complied with all of his
obligations herein and acknowledging his continuing obligations pursuant to this
Agreement. The Executive's failure to comply with the requirements of Section 6
of this Agreement shall constitute a material breach of this Agreement. The base
term of Executive's employment with the Company will be three (3) years. After
each year of employment, the Term of this Agreement and of Executive's
employment with the Company will automatically be extended an additional year,
such that the balance of the Term will never be less than two (2) years. If the
Executive is terminated by the Company other than for Cause (defined below), or
he resigns for Good Reason, as defined in 4(a), he shall continue to receive his
bonus compensation for the remaining Term of this Agreement. If such termination
occurs within the first three (3) years of this Agreement, Executive will
receive his base salary in addition to his bonus compensation for the remaining
Term of this Agreement. Provided Executive has been employed with Company for at
least eighteen (18) months, then upon Executive's death, permanent disability or
mental incapacity, any monies owed to Executive under this Section 6(a) shall be
paid to Executive's estate upon his death or his guardian upon his permanent
disability or mental incapacity.
(b) Termination for Cause. The Company may terminate the
Executive's employment pursuant to the terms of this Agreement at any time for
Cause by giving express written notice of termination. Upon any such termination
for Cause or in the event of his resignation or abdication form his position
with the Company, the Executive shall have no right to compensation or
reimbursement under Section 4, or to participate in any employee benefit
programs under Section 5, except as may be expressly provided by law, for any
period subsequent to the effective date of termination. For purposes of this
Section 6(b), for "Cause" shall mean the Executive: (i) is convicted of any
felony; (ii) is charged with any felony relating to the business or affairs of
the Company or any affiliate of the Company, or is charged with any felony or
misdemeanor relating to any theft, fraud, misappropriation, embezzlement, or
perjury; (iii) is convicted of any misdemeanor directly involving the
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Executive's employment or which directly affects the business of the Company;
(iv) is found after an internal investigation by the Company to have engaged in
any sexual misconduct or sexual harassment which is related to the Executive's
employment or the business of the Company or places, rightly or wrongly, the
Company at risk for litigation in connection therewith; (v) misappropriates any
Company funds or otherwise defrauds the Company; (vi) is convicted of the
illegal possession or illegal use of a controlled substance; (vii) engages in
chronic absenteeism, or alcohol or substance abuse; (viii) the Executive fails
or refuses to cooperate in any official investigation conducted by or on behalf
of the Company; (ix) the Executive materially breaches any provision of this
Agreement; or (x) the Executive on more than one occasion fails to comply with
the reasonable directives of the Company's Chief Executive Officer or its board
of directors after written notification.
(c) Good Reason. The Executive may terminate this Agreement
for "Good Reason." "Good Reason" shall mean, (i) a material breach by the
Company of its obligations under this Agreement; or (ii) the material alteration
or restriction of the Executive's authority and responsibility in a manner
inconsistent with his position, duties, responsibilities and status with the
Company.
You may terminate your employment for "Good Reason" on thirty
(30) days Notice of Termination to the Company in the event of a Change in
Control, as provided for in paragraph 2.6.
Notice of Termination for Change in Control must be given
within 3 months of the Change in Control. Failure to provide notice as provided
in this section 2.5 shall constitute a consent to such failure or change, and a
waiver of the right to terminate the agreement based on such action;
For purposes of this Agreement, a "Change in Control" shall
mean any of the following events:
(a) An acquisition (other than directly from the Company) of
any voting securities of the Company (the "Voting Securities") by any "Person"
(as the term person is used for purposes of Section 13(d) or 14(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act")), immediately
after which such Person has "Beneficial Ownership" (within the meaning of Rule
13d-3 promulgated under the Exchange Act) of thirty percent (30%) or more of the
combined voting power of the Company's then outstanding Voting Securities;
provided, however, in determining whether a Change in Control has occurred,
Voting Securities that are acquired in a "Non-Control Acquisition" (as
hereinafter defined) shall not constitute an acquisition that would cause a
Change in Control. A "Non-Control Acquisition" shall mean an acquisition by (i)
an employee benefit plan (or a trust forming a part thereof) maintained by (A)
the Company or (B) any corporation or other Person of which a majority of its
voting power or its voting equity securities or equity interest is owned,
directly or indirectly, by the Company (for purposes of this definition, a
"Subsidiary"), (ii) the Company or its Subsidiaries, or (iii) any Person in
connection with a "Non-Control Transaction," as hereinafter defined;
(b) The individuals who, constitute the Board of Directors
cease to constitute a majority of the members of the Company's Board of
Directors (the "Incumbent Board"); provided, however, that if the election, or
nomination for election by the Company's stockholders, of any new director was
approved by a vote of the Incumbent Board as provided in they bylaws of the
Corporation, such new director shall, for purposes of this Plan, be considered
as a member of the Incumbent Board; provided further, however, that no
individual shall be considered a member of the Incumbent Board if such
individual initially assumed office as a result of either an actual or
threatened "Election Contest" (as described in Rule 14a-11 promulgated under the
Exchange Act) or other actual or threatened solicitation of proxies or consents
by or on behalf of a Person other than the Board (a "Proxy Contest") including
by reason of any agreement intended to avoid or settle any Election Contest or
Proxy Contest; or
(c) Approval by stockholders of the Company of:
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(i) A merger, consolidation or reorganization involving
the Company, unless such merger, consolidation or
reorganization is a "Non-Control Transaction." A "Non-Control
Transaction" shall mean a merger, consolidation or
reorganization of the Company where:
(A) the stockholders of the Company, immediately
before such merger, consolidation or reorganization, own
directly or indirectly immediately following such merger,
consolidation or reorganization, at least fifty percent
(50%) of the combined voting power of the outstanding
voting securities of the corporation resulting from such
merger or consolidation or reorganization (the "Surviving
Corporation")
(B) the individuals who were members of the Incumbent
Board immediately prior to the execution of the agreement
providing for such merger, consolidation or reorganization
constitute more than 50 percent of the members of the
board of directors of the Surviving Corporation, or a
corporation beneficially directly or indirectly owning a
majority of the Voting Securities of the Surviving
Corporation, and
(ii) A complete liquidation or dissolution of the Company;
or
(iii) An agreement for the sale or other disposition of
all or substantially all of the assets of the Company to any
Person (other than a transfer to a parent, a subsidiary or
other corporation which would constitute a Non-Control
Transaction under paragraph (i) above.
(d) Notwithstanding the foregoing, a Change in Control shall
not be deemed to occur solely because any Person (the "Subject Person") acquired
Beneficial Ownership of more than the permitted amount of the then outstanding
Voting Securities as a result of the acquisition of Voting Securities by the
Company which, by reducing the number of Voting Securities then outstanding,
increases the proportional number of shares Beneficially Owned by the Subject
Person, provided that if a Change in Control would occur (but for the operation
of this sentence) as a result of the acquisition of Voting Securities by the
Company, and after such share acquisition by the Company, the Subject Person
becomes the Beneficial Owner of any additional Voting Securities that increases
the percentage of the then outstanding Voting Securities Beneficially Owned by
the Subject Person, then a Change in Control shall occur.
(e) Performance. The Company may at its discretion terminate
this agreement with the Executive, if it has not achieved $1.5 million in gross
profit (as that term is defined herein) during the first year of this Agreement.
7. NON-COMPETITION AGREEMENT.
(a) Competition with the Company. Until termination of his
employment and for a period of 12 months commencing on the date of termination,
the Executive, or in association with or as a stockholder, owner, lender,
director, officer, consultant, employee, independent contractor, partner,
associate, joint venturer, member or otherwise of or through any person, firm,
corporation, partnership, association or other entity (any of the foregoing
defined as an "Affiliated Entity") shall not directly or indirectly act as an
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executive for any person, firm, or entity, which competes with the Company or
its affiliates, within any metropolitan area in the United States or elsewhere
in which the Company or any of its subsidiaries, partners, affiliates (as
defined in the Securities Exchange Act of 1934, as amended), or joint venturers,
(collectively, the "Affiliates") is then engaged in the offer and sale of
competitive Products or Services (as defined below). Provided, however, the
foregoing provisions shall not prevent the Executive from accepting employment
or receiving remuneration with or from an enterprise engaged in two or more
lines of business, one of which is the same or similar to the Company's business
(the "Prohibited Business") if the Executive's employment is totally unrelated
to the Prohibited Business; provided, further, the foregoing shall not prohibit
Executive from owning up to 5% of the securities of any publicly-traded
enterprise provided the Executive is not an employee, director, officer,
independent contractor or consultant to such enterprise, nor is otherwise
reimbursed or remunerated for services rendered to such enterprise. In addition,
the Executive may not, directly or indirectly, including through any Affiliated
Entity, obtain employment with or perform services for any Customer of the
Company, during the period commencing on the date of termination and continuing
for 12 months thereafter.
(b) Solicitation of Customers. During the periods in which the
provisions of Section 7(a) shall be in effect, the Executive, shall not directly
or indirectly, including through any Affiliated Entity, (i) seek, or accept, any
Prohibited Business from any Customer on behalf of any enterprise or business
other than the Company, (ii) refer Prohibited Business from any Customer to any
enterprise or business other than the Company or receive commissions based on
sales or otherwise relating to the Prohibited Business from any Customer, or any
enterprise or business other than the Company. For purposes of this Agreement,
the term "Customer" means any person, firm, corporation, partnership,
association, or other entity, to which the Company sold or provided products
and/or services during the 24-month period prior to the time at which any
determination is required to be made as to whether any such person, firm,
corporation, partnership, association, or other entity is a Customer, or who or
which was approached by, or who or which has approached, an employee or
independent contractor of the Company for the purpose of soliciting business
from the Company or the third party, as the case may be.
(c) Solicitation of Employees and Certain Others. During the
periods in which the provisions of Section 7(a) shall be in effect, the
Executive, shall not, directly or indirectly, including through any Affiliated
Entity, solicit, hire, retain, entice, interfere with, or contact any employee,
independent contractor, officer, director, or representative, of the Company, or
any of its subsidiaries, for the purpose of (i) hiring them, having another
person or entity hire them, (ii) offering any employment, the procuring of
employment, or causing the Executive to alter, modify, or terminate, their
employment, or other relationship, as the case may be, with the Company, (iii)
providing any assistance regarding any employment offer, agreement,
relationship, or other assistance, in connection with procuring or attempting to
procure employment.
(d) References to the Company in this Section 7 shall include
the Company's Affiliates.
8. CONFIDENTIAL INFORMATION. The Executive shall not disclose or
use at any time, either during the Term or for a period of two years after the
Termination Date, any Confidential Information (defined below) of the Company,
whether patentable or not, which you learn as a result of your employment with
the Company, whether or not you developed such information. "CONFIDENTIAL
INFORMATION" shall include, without limitation: terms of contracts with
customers, including, contracts with suppliers, independent contractors or
employees; business plans and forecasts, non-public financial information and
investor identities; personnel information relating to the duties and
responsibilities of, and compensation and benefits provided to, any employee;
names, home address and phone numbers of employees; sales and marketing
strategies, plans and programs; product development information; specifications;
inventions, discoveries, improvements, trade secrets, secret processes,
technology, know-how, models, drawings, works of authorship or other creative
works, ideas, knowledge, data and any other information which the Company
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regards as confidential. Confidential Information shall remain at all times the
property of the Company.
(a) For the purposes of this Agreement, "CONFIDENTIAL
INFORMATION" shall not include information that:
(i) is or has been made available to the public by any
means, through no fault of your own and without breach of this
Agreement; or
(ii) is already in your possession without restriction and
prior to any disclosure hereunder and can be so established by
you; or
(iii) is or has been lawfully disclosed to you by a third
party without an obligation of confidentiality upon you; or
(iv) is developed independently by you without benefit
from Confidential Information disclosed hereunder.
You may use or disclose Confidential Information only:
(a) as authorized and necessary in performing your duties and
responsibilities in accordance with this Agreement;
(b) with the Company's prior written consent;
(c) in a legal proceeding between you and the Company to establish the
rights of either party under this Agreement, provided that you stipulate to a
protective order to prevent any unnecessary use or disclosure; or
(d) subject to a compulsory legal process that requires disclosure of
such information, provided that you have complied with the following procedures
to ensure that the Company has an adequate opportunity to protect its legal
interests in preventing disclosure:
Upon receipt of a subpoena that could possibly require disclosure
of Confidential Information, you provide a copy of the compulsory
process and complete information regarding the circumstances under
which you received it to the Company by hand delivery within 72
hours. If the Company seeks to prevent disclosure in accordance
with the applicable legal procedures, and provides you with notice
before the appearance date specified in the subpoena that it has
initiated such procedures, you will not make disclosures of any
Confidential Information that is the subject of such procedures,
until such objections are withdrawn or ruled on.
You hereby acknowledge that any breach of this section 5 would cause
the Company irreparable harm.
(d) References to the Company in this Section 8 shall include the
Company's Affiliates.
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9. EQUITABLE RELIEF.
(a) The Company and the Executive recognize that the services
to be rendered under this Agreement by the Executive are special, unique and of
extraordinary character, and that in the event of the breach by the Executive of
the terms and conditions of this Agreement or if the Executive, shall cease to
be an employee of the Company for any reason and take any action in violation of
Section 7 and/or Section 8, the Company shall be entitled to, in addition to all
other legal, equitable, and other remedies, may institute and prosecute
proceedings in any court of competent jurisdiction referred to in Section 9(b)
below, to enjoin the Executive from breaching the provisions of Section 7 and/or
Section 8. In such action or proceeding, the Company shall not be required to
plead or prove irreparable harm or lack of an adequate remedy at law or post any
bond or security.
(b) In the event of any litigation or other proceeding
relating to, or in connection with, this Agreement, including, but not limited
to the equitable relief provided in Section 9(a) above, the Executive and the
Company irrevocably and unconditionally submit to the exclusive jurisdiction and
venue of Broward County, Florida, and agree to take any and all future action
necessary to submit to the jurisdiction and venue of such courts. The Executive
and the Company irrevocably waive any objection that they now have or hereafter
may have to the jurisdiction and the laying of venue of any suit, action or
proceeding brought in any such court, and further irrevocably waive any claim
that any such suit, action or proceeding brought in any such court has been
brought in an inconvenient forum. Final judgment against the Executive or the
Company in any such suit shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment, a certified or true copy of which shall
be conclusive evidence of the fact and the amount of any liability of the
Executive or the Company therein described.
10. CONFLICTS OF INTEREST. While employed by the Company, the
Executive shall not, directly or indirectly, unless approved by prior express
written consent of the Chief Executive Officer and the Company's board of
directors:
(a) participate as an individual in any way in the benefits of
any transaction or in dealings with any of the Company's suppliers, clients, or
customers, including, but not limited to, having a financial interest in the
Company's suppliers, clients, or customers, or making loans to, or receiving
loans, from, the Company's suppliers, clients, or customers;
(b) realize a personal gain or advantage from a transaction in
which the Company has an interest or use information obtained in connection with
the Executive's employment with the Company for the Executive's personal
advantage or gain. The Company acknowledges and accepts that the Executive
currently receives, and may continue to receive, residual income from the
network marketing company Mannatech which may in the future be partially derived
from Mannatech's sale of CyGene competitors products; or
(c) serve as an officer, director, adviser, partner,
consultant, member, independent contractor, or manager, with, or to be employed
by, any person or entity which does business with the Company.
(d) As used in Section 10(a), (b) or (c), the Company also
includes its Affiliates.
11. INVENTIONS, IDEAS, PROCESSES, AND DESIGNS. All inventions,
ideas, processes, programs, software, algorithms, hardware, developments,
models, research, and designs, including, but not limited to all alterations,
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modifications, and improvements thereon, (collectively, "Developments"), which
are (i) conceived, created, or made by the Executive during the course of his
employment with the Company (whether or not during regular business hours) and
for a period of six months subsequent to the termination or expiration of such
employment with the Company and (ii) which are related to the business of the
Company, shall be disclosed by the Executive, in reasonable detail and
specificity, in writing, promptly, but in no event later than 30 days of such
Development, to the Company, and shall be the sole and exclusive property of the
Company. The phrase "related to the business of the Company" shall mean to
include, but shall not be limited to, if the Development was (a) made in whole
or in part with any of the Company's equipment, supplies, facilities, assets,
personnel, funds, or Confidential Information, (b) results from work in whole or
in part performed by the Executive or any employee for the Company, or (c)
pertains to the current business, planned prospect work, or demonstrably
anticipated research or development work of the Company. The Executive shall
cooperate with the Company and the Company's attorneys in the preparation of any
and all patent, and copyright applications, and other methods of protection, for
such Developments and, upon request, shall promptly, but in no event later than
30 days of such Development, convey and assign any and all such Developments to
the Company upon the Company's request. The decision to file for patent or
copyright protection or to maintain such Development as a trade secret, and to
make other applications, or to otherwise protect such property, shall be in the
sole discretion of the Company, and the Executive shall be bound by such
decisions. The Executive shall provide as a schedule to this Agreement, a
complete list of all Developments, including brief descriptions, which he made
or conceived prior to his employment with the Company and which therefore are
excluded from the scope of this Agreement.
12. INDEBTEDNESS. If, during the course of the Executive's
employment under this Agreement, the Executive becomes indebted to the Company
for any reason, the Company may, if it so elects, set off payments due the
Executive by the Company, by the amounts due to the Company from the Executive,
and collect any remaining balance from the Executive.
13. EXEMPT STATUS OF TRANSACTION. Company warrants and represents
that Executive is not an officer, principal stockholder or director of the
Company and that the transactions contemplated by this Agreement are exempt from
the operation of Section 16(c) of the Securities Exchange Act of 1934 as amended
from time to time. Company warrants and represents that Executive will not be
the beneficial owner of more than ten percent (10%) of the equity security of
the Company under the terms of this Agreement and therefore securities
registration is not required under the transactions referenced herein.
14. ASSIGNABILITY. The rights and obligations of the Company under
this Agreement shall inure to the benefit of and be binding upon the successors
and assigns of the Company, provided that such successor or assignee shall
acquire all or substantially all of the assets, business, and/or securities of
the Company by means of split-off, spin-off, reorganization, liquidation,
dissolution, merger, consolidation, amalgamation, combination, transfer, or
otherwise. Neither the Executive's right or obligations hereunder may be
assigned, hypothecated, or alienated, and any attempt to do so by the Executive
will be void.
15. SEVERABILITY.
(a) The Executive expressly agrees that the character,
duration and geographical scope of the non-competition provisions set forth in
this Agreement are reasonable in light of the circumstances as they exist on the
date hereof. Should a decision, however, be made at a later date by a court of
competent jurisdiction that the character, duration, or geographical scope of
such provisions is unreasonable, then it is the intention and the agreement of
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the Executive and the Company that this Agreement shall be construed by the
court in such a manner as to impose only those restrictions on the Executive's
conduct that are reasonable in the light of the circumstances and as are
necessary to assure to the Company the benefits and protections contained in
this Agreement. If, in any litigation or proceeding, a court of competent
jurisdiction shall refuse to enforce all of the separate covenants deemed
included herein (or the scope thereof) because taken together they are more
extensive than necessary to assure to the Company the intended benefits and
protections contained herein, it is expressly understood and agreed by the
parties hereto that the provisions of this Agreement that, if further limited or
eliminated, would permit the remaining provisions and separate covenants (or the
scope thereof) to be enforced shall be deemed further limited or eliminated, for
the purposes of such proceeding, from this Agreement.
(b) If any provision of this Agreement otherwise is deemed to
be invalid or unenforceable or is prohibited by the laws of the state or
jurisdiction where it is to be performed, this Agreement shall be considered
severable as to such provision and such provision shall be inoperative in such
state or jurisdiction and shall not be part of the consideration moving from
either of the parties to the other. The remaining provisions of this Agreement
shall be valid and binding and of like effect as though such provision was not
included.
16. NOTICES AND ADDRESSES. All notices, offers, acceptance and any
other acts under this Agreement (except payment) shall be in writing, and shall
be sufficiently given if delivered to the addressees in person, by Federal
Express or similar receipted delivery, or by facsimile delivery in which event a
copy shall immediately be sent by Federal Express or similar receipted delivery.
To the Company: CyGene Laboratories, Inc.
0000 Xxxxx Xxxx
Xxxxx Xxxxxxx, XX 00000
Attention: Xx. Xxxxxx Xxxxxx,
Chief Executive Officer
With a Copy to: Xxxxxxx X. Xxxxx
Arent Fox PLLC
0000 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
To the Executive: Xxxxx X. Xxxxxxxx
0000 X. Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
With a Copy to: Xxxxxxx X. Xxxxx
NORLING, KOLSRUD, XXXXXXXXX & XXXXX, P.L.C.
00000 X. Xxxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxx 00000
or to such other address as either of them, by notice to the other may designate
from time to time. The transmission confirmation receipt from the sender's
facsimile machine shall be evidence of successful facsimile delivery. Time shall
be counted to, or from, as the case may be, the delivery in person or by
mailing.
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17. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument. The execution of this
Agreement may be by actual or facsimile signature.
18. ATTORNEYS' FEES. In the event that there is any controversy or
claim arising out of or relating to this Agreement, or to the interpretation,
breach or enforcement thereof, and any action or proceeding is commenced to
enforce the provisions of this Agreement, the prevailing party shall be entitled
to a reasonable attorneys' fees, costs and expenses.
19. GOVERNING LAW. This Agreement and any dispute, disagreement,
or issue of construction or interpretation arising hereunder whether relating to
its execution, its validity, the obligations provided therein or performance
shall be governed and interpreted according to the internal laws of the State of
Florida without regard to choice of law considerations.
20. ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement between the parties and supersedes all prior oral and written
agreements between the parties hereto with respect to the subject matter hereof.
Neither this Agreement nor any provision hereof may be changed, waived,
discharged or terminated, except by a statement in a prior express writing
signed by the party or parties against which enforcement or the change, waiver
discharge or termination is sought.
21. ADDITIONAL DOCUMENTS. The parties hereto shall execute such
additional instruments as may be reasonably required by their counsel in order
to carry out the purpose and intent of this Agreement and to fulfill the
obligations of the parties hereunder.
22. SECTION AND PARAGRAPH HEADINGS. The section and paragraph
headings in this Agreement are for reference purposes only and shall not affect
the meaning or interpretation of this Agreement.
IN WITNESS WHEREOF, the Company and the Executive have entered into this
Agreement as of the date and year first above written.
CYGENE LABORATORIES, INC.
______________________________ By:__________________________
Xxxxxx Xxxxxx
Chief Executive Officer
EXECUTIVE:
________________________________ By:________________________________
Xxxxx X. Xxxxxxxx
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