FOUNDER’S EMPLOYMENT AGREEMENT
THIS
FOUNDER’S EMPLOYMENT AGREEMENT (this “Agreement”), effective as of this October
1, 2005, is entered into by and between Iptimize Incorporated, a Colorado
corporation (the “Company”), and Xxxx X Xxxxx, an individual
(“Founder”).
RECITALS
A. Founder
has participated in, and had been instrumental to, the formation and
organization of the Company, contributing time, business knowledge, skill,
and
expertise.
B. Recognizing
that Founder’s continued employment with the Company is essential to its ongoing
operations, growth, and success, the Company desires Founder to remain in the
employ of the Company.
C. The
Company desires to retain the services and to continue to employ Founder upon
the terms and conditions set forth herein, and Founder desires to continue
in
the employ of the Company and to provide services to the Company on the terms
and conditions set forth herein.
AGREEMENT
NOW
THEREFORE, in consideration of the covenants and obligations set forth in this
Agreement, and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, Company and Founder hereby agree
as
follows:
1. Employment.
The
Company hereby employs Founder, and Founder accepts such employment and agrees
to perform services for the Company upon the terms and conditions set forth
in
this Agreement.
2. Term.
Unless
terminated at an earlier date in accordance with Section 8 of this Agreement,
the term of Founder’s employment hereunder (the "Term") shall commence on the
effective date of this Agreement and shall end five (5) years from the effective
date of this Agreement.
3. Position
and Duties.
3.1. Service
with Company.
During
the term of this Agreement, Founder agrees to perform such reasonable employment
duties as delegated to Founder, from time to time, by the board of directors
of
the Company (the “Board”). Founder shall have such title and authority, subject
to the Company’s Articles of Incorporation and Bylaws, as may be granted by the
Board.
3.2. Performance
of Duties.
Founder
covenants and agrees to serve the Company faithfully and to the best of his
ability and to devote his time, attention, and effort to the business and
affairs of the Company during the term of this Agreement, provided however,
that
the covenants set forth in this Section 3.2 shall not be construed to prohibit
Founder from devoting periods of time to (a) engaging in personal investment
activities, including the activities of Xxxxx Capital Management, PolyRock
Technologies, LLC and other such activities as they should arise over time
as
determined by the founder to be in the interest of both the company and the
founder (b) serving on the board of directors of the Company or such other
boards or advisory boards as the founder shall determine in his interest, its
subsidiaries, or other corporations, so long as such service would not otherwise
be prohibited by Section 6 hereof, (c) engaging in charitable or community
service activities, or (d) participating in professional organizations so long
as organizational activities do not materially interfere with any of Founder’s
duties or obligations under this Agreement.
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4. Compensation.
4.1. Base
Salary.
Commencing October 1, 2005, as annual compensation for all services to be
rendered by Founder under this Agreement, before all customary payroll
deductions, the Company shall pay to Founder an annual base salary of One
Hundred Twenty Thousand Dollars ($120,000), which salary shall be paid in
installments on not less than a monthly basis in accordance with the Company’s
normal payroll procedures and policies. The compensation payable to Founder
during each subsequent year during the term of this Agreement shall be
established by the Board, but in no event shall the salary for any subsequent
year be less than the salary in effect for the prior year.
4.2. Incentive
Compensation.
In
addition to the base salary described in Section 4.1 above, Founder shall be
eligible for an additional 50% performance compensation plan based on mutually
agreed performance targets set by the Board of Directors (BOD); payable
quarterly.
4.3. Participation
in Benefit Plans.
During
the term of this Agreement, and to the extent that Founder’s age, position, or
other factors qualify him for such fringe benefits, Founder shall be entitled
to
receive such medical and hospitalization insurance and other fringe benefits
as
are being provided, from time to time, such benefits are to be paid in full
by
the company on behalf of the founder.
4.4. Expenses.
The
Company will pay or reimburse Founder for all reasonable and necessary
out-of-pocket expenses incurred by him in the performance of his duties under
this Agreement, subject to the presentment by Founder of appropriate invoices,
bills, or receipts; in the course of his duties founder travels and entertains
various business clients for the purposes of money raising, investment
activities, mergers and acquisition activities and business development
activities. Founder is entitiled to such re-imbursement of expenses as he
submits with credit card statement information and other supporting
docuementation as my be available of proof of expenses.
5. Confidential
Information.
Except
as permitted or directed by the Company, during the term of this Agreement
or at
any time thereafter, Founder shall not divulge, furnish, or make accessible
to
anyone or use in any way (other than in the ordinary course of the business
of
the Company) any confidential or secret knowledge, information, or intellectual
property of the Company which Founder has acquired or become acquainted with
or
will acquire or become acquainted with during the period of his employment
by
the Company, whether developed by himself or by others concerning any trade
secrets, confidential or secret designs, processes, formulae, plans, devices
or
material (whether or not patented or patentable) directly or indirectly useful
in any aspect of the business of the Company, any secret development or research
work of the Company, or any other confidential or proprietary information of
the
Company (the “Confidential Information”). Founder acknowledges that the
Confidential Information constitutes a unique and valuable asset of the Company
and represents a substantial investment of time and expense by the Company,
and
that disclosure or other use of such Confidential Information other than for
the
sole benefit of the Company would cause irreparable harm to the Company. Both
during and after the term of this Agreement, Founder will completely refrain
from any acts or omissions that would reduce the value of such Confidential
Information to the Company. The foregoing obligations of confidentiality,
however, shall not apply to any knowledge or information which is now published
or which subsequently becomes generally publicly known other than by a direct
or
indirect result of the breach of this Agreement by Founder.
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6. Non-competition
Covenant.
6.1. Covenant
Not to Compete.
Founder
agrees that during the term of this Agreement, and for a period of one (1)
years
from and after the date of the termination or expiration of this Agreement,
Founder shall not, directly or indirectly, engage in competition with the
Company in the research, commercial application, development, or implementation
of wireless broadband or wireless internet delivery services in any manner
or
capacity (e.g., as an advisor, principal, agent, consultant, independent
contractor, partner, officer, director, control person, stockholder, employee,
member of any association, or otherwise).
6.2. Geographic
Extent of Covenant.
The
obligations of Founder under Section 6.1 of this Agreement shall apply to any
geographic area in which the Company: (a) has engaged in business during the
term of this Agreement through conducting research, production, promotional,
sales, marketing, or other business activity, or (b) has established any
customer or supplier relationships, goodwill, or business
reputation.
6.3. Limitations
on Covenant.
The
following shall not constitute a breach of this Section 6:
6.3.1. Ownership
by Founder, as a passive investment, of 5% or less of the outstanding shares
of
capital stock of any corporation listed on a national securities exchange or
publicly trades in the over-the-counter market; or
6.3.2. Founder’s
engaging in any business activities other than the research, development,
commercial application, or implementation of wireless broadband or wireless
internet delivery services.
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6.4. Indirect
Competition.
Founder
further agrees that, during the term of this Agreement, he will not, directly
or
indirectly, assist or encourage any other person or entity in carrying out
any
activity that would be prohibited by the above provisions of this Section 6
if
such action were to be carried out by Founder, either directly or indirectly;
and, in particular, Founder agrees that he will not, directly or indirectly,
induce any employee of the Company to carry out any such activity.
6.5. No
Interference; Nonsolicitaion.
Consistent with the provisions of Section 6 of this Agreement, Founder shall
not
take any action to interfere with the relationships between the Company and
its
respective customers and suppliers. Therefore, during the one (1) year period
following the termination or expiration of this Agreement, Founder shall not
directly or indirectly through any person or entity (a) induce or attempt to
induce any employee of the Company, or any subsidiary or affiliate to leave
the
employ of the Company or such subsidiary or affiliate; (b) hire any person
who
was an employee of the Company or its subsidiaries or affiliates at any time
during the one (1) year period prior to such hiring, or (c) induce or attempt
to
induce any customer, supplier, licensee, or other business relation of the
Company or its subsidiaries or affiliates to withdraw, curtail, or cease doing
business with the Company or its subsidiaries or affiliates.
7. Intellectual
Property.
7.1. Disclosure
and Assignment.
Founder
has disclosed, and will promptly disclose in writing to the Company complete
information concerning each and every invention, discovery, improvement, device,
design, apparatus, practice, process, method, or product, whether or not
patentable, made developed, perfected, devised, conceived or first reduce to
practice by Founder, either solely or in collaboration with others, prior to
or
during the term of this Agreement, whether or not during regular working hours,
relating either directly or indirectly to the business, products, practices,
or
techniques of the Company (the “Developments”). Founder, to the extent that he
has the legal right to do so, hereby acknowledges that any and all of said
Developments are the property of the Company and hereby assigns and agrees
to
assign to the Company any and all of Founder’s right, title, and interest in and
to any and all such Developments.
7.2. Future
Developments.
As to
any future Developments made by Founder which relate to the business, products,
or practices of the Company that are first conceived or reduced to practice
during the term of this Agreement but which are claimed for any reason to belong
to an entity or person other than the Company, Founder will promptly disclose
the same in writing to the Company and shall not disclose the same to others
if
the Company, within twenty (20) days thereafter, shall claim ownership of such
Developments under the terms of this Agreement.
7.3. Limitation
on Intellectual Property Restrictions.
The
provisions of Section 7 of this Agreement shall not apply to any Developments
meeting the following conditions:
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7.3.1. such
Development is developed entirely on Founder’s own time and is not related to
the research, development, commercial application, or implementation of wireless
broadband or wireless internet delivery services;
7.3.2. such
Development was made without the use of any material Company equipment,
supplies, facilities, or Confidential Information, and
7.3.3. such
Development does not relate (a) directly to the business of the Company or
(b)
to the Company’s actual or demonstrably planned, budgeted, and funded research
or development, and
7.3.4. such
Development does not result form any work performed by Founder for the
Company.
7.4. Further
Assurance.
Upon
request and without further compensation therefor, but at no expense to Founder,
and whether during the term of this Agreement or thereafter, Founder will do
all
lawful acts, including but not limited to, the execution of papers and lawful
oaths, and the giving of testimony, that in the opinion of the Company, its
successors and assigns, may be necessary or desirable in obtaining, sustaining,
reissuing, extending and enforcing United States and foreign patents, including,
but not limited to, design patents, on any and all such Developments, and for
perfecting, affirming and recording the Company’s complete ownership and title
thereto, and to cooperate otherwise in all proceedings and matters relating
thereto.
7.5. Records.
Founder
will keep complete, accurate, and authentic accounts, notes, data and records
of
all Developments in the manner and form requested by the Company. Such accounts,
notes, data, and records shall be the property of the Company and upon the
Company’s request, Founder will promptly surrender the same to the Company, and
all copies thereof, upon the conclusion of his employment.
8. Termination.
8.1. Grounds
for Termination.
The
Company shall have no right to terminate Founder, or otherwise cease to employ
Founder under the terms of this Agreement, prior to the expiration of its Term,
or any extension thereof, unless
one or
more of the following occur:
8.1.1. Founder
dies;
8.1.2. Founder
becomes Disabled (as defined below), so that, even with reasonable
accommodation, he cannot perform the essential functions of his position,
or
8.1.3. The
Company terminates this Agreement for Cause (as defined below) and notifies
Founder in writing of such termination for Cause.
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If
this
Agreement is terminated pursuant to subsections 8.1.1 or 8.1.2, such termination
shall be effective immediately. If this Agreement is terminated pursuant to
subsection 8.1.3 of this Agreement, such termination shall be effective thirty
(30) days after the delivery of the notice of termination. Termination of
Founder prior to the expiration of this Agreement for any reason other than
pursuant to subsections 8.1.1, 8.1.2, or 8.1.3, shall be deemed a "Termination
Without Cause."
8.2. Cause.
For the
purposes this Section 8 of the Agreement “Cause” shall be defined only as
follows:
8.2.1. Founder
has breached the provisions of Sections 3, 5, 6, or 7 of this Agreement in
any
material respect; or
8.2.2. Founder
has committed fraud, misappropriation, or embezzlement in connection with the
Company’s business;
8.2.3. Founder
has engaged in willful and material misconduct, including willful and material
failure to perform Founder’s duties as an employee of the Company and has failed
to “cure” such willful and material misconduct within (a) thirty (30) days after
delivery by the Company of written notice of such willful and material
misconduct, or (b) five (5) business days after personal delivery by the
Company, and actual receipt by Founder, of written notice of such willful and
material misconduct;
8.2.4. Founder
has voluntarily resigned without just cause, for a reason other than the
Company's material breach of this Agreement;
8.3. Termination
for Cause.
In the
event the Company terminates Founder’s employment for Cause, pursuant to this
Section 8, Founder shall have twenty (20) days after receipt of notice of such
termination for Cause to object in writing to the Company’s determination that
there exists Cause for termination. If Founder fails to object to any such
determination of Cause in writing within such twenty (20) day period, he shall
be deemed to have waived his right to object to the Company’s determination that
Cause exists.
8.4. Effect
of Termination.
Upon
the lawful termination or expiration of this Agreement, Founder, in
consideration of his employment hereunder, shall remain bound by the provisions
of this Agreement which by their terms survive the expiration or termination
of
this Agreement for the periods time explicitly set forth in such
sections.
8.5. Disability.
As used
in this Agreement, the term “Disability” or “Disabled” means any mental or
physical condition which renders Founder unable to perform the essential
functions of his position, with or without reasonable accommodation, for a
period in excess of one hundred twenty (120) consecutive days or more than
one
hundred eighty (180) days during any three hundred sixty five (365) day
period.
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8.6. Surrender
of Property.
Upon
termination of his employment with the Company, Employee shall deliver promptly
to the Company all records, manuals, books, blank forms, documents, letters,
memoranda, notes, notebooks, reports, data, tables, calculations, or copies
thereof, which are the property of the Company or which relate in any way to
the
business, products, practices, or techniques of the Company, and all other
property, trade secrets, Confidential Information, Developments, or other
intellectual property of the Company, including but not limited to, all
documents that in whole or in part contain any intellectual property, trade
secrets, Confidential Information, or Developments of the Company, which are
in
Founder’s possession or control, and all copies thereof.
8.7. Wage
Continuation.
If
Founder’s employment by the Company is terminated by the Company pursuant to
subsection 8.1.2 of this Agreement, the Company shall continue to pay to Founder
his base salary (less any payments received by Founder from any disability
income insurance policy provided to him under any benefit program of the
Company) and shall continue to provide health and medical insurance benefits
to
Founder under any benefit program of the Company through the earlier to occur
of
(a) the remaining term of Founder’s employment pursuant to this Agreement or (b)
twelve (12) months from the termination of Founder's employment pursuant to
subsection 8.1.2 of this Agreement. If Founder's employment by the Company
is
terminated pursuant to subsection 8.1.1 of this Agreement, the Company shall
continue to provided health and medical benefits to the Founder's dependents
(if
such dependents were covered by the Company's health and medical benefits plan
immediately prior to Founder's death and termination pursuant subsection 8.1.1)
for the longer of (a) the remaining term of Founder’s employment pursuant to
this Agreement or (b) twelve (12) months from the termination of Founder's
employment pursuant to subsection 8.1.1. If this Agreement is terminated
pursuant to subsection 8.1.3, all of Founder’s right to compensation under this
Agreement shall immediately terminate except as otherwise required by applicable
law.
8.8. Termination
Without Cause.
In the
event Company terminates Founder without cause, Company shall:
8.8.1.
immediately pay to Founder the base salary for (24) months;
8.8.2. shall
continue to provide health and medical insurance benefits to Founder under
any
benefit program of the Company through the earlier to occur of (a) the unexpired
term of this Agreement plus twelve (12) months or (b) the enrollment of Founder,
at Founder's election, into a separate health and medical insurance benefit
program;
8.8.3. the
obligations of Founder to the Company under Sections 5, 7, and 8.6 shall cease
and be inapplicable to Founder, and Founder shall not be bound by the
obligations set forth in such Sections of this Agreement;
8.8.4. A
sale,
exchange, or transfer of a substantial or material portion of the assets of
the
Company, or a sale of a control of the Company as defined in Rule 405 under
the
Securities Act of 1933, as amended, shall constitute, at the sole discretion
of
Founder, a Termination without cause under the terms of this Agreement, and
shall entitle Founder to all of the express contractual remedies set forth
in
this subsection 8.8; and
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8.8.5. The
express contractual remedies set forth above in this subsection 8.8 are in
addition to all other remedies that may be available to Founder at law or in
equity.
9. Resolution
of Certain Claims - Injunctive Relief.
Founder
agrees and acknowledges that, in addition to, but not to the exclusion of any
other available remedy, the Company shall have the right to enforce the
provisions of Sections 5, 6, 7, and 8.6 of this Agreement by applying for and
obtaining temporary or permanent restraining orders or injunctive relief from
a
court of competent jurisdiction without the necessity of filing a bond
therefor.
10. Miscellaneous.
10.1. Capitalized
Terms.
Capitalized terms shall have the meanings set forth herein.
10.2. Integration.
This
Agreement contains the entire agreement of the parties relating to the
employment of Founder by the Company and the terms and conditions thereof,
and
supersedes all prior agreements and understandings with respect to such matters;
the parties hereto acknowledge and agree that they have made no agreements,
representations, or warranties relating to the subject matter of this Agreement
that are not set forth herein.
10.3. Severability.
To the
extent any provision of this Agreement shall be invalid or unenforceable, it
shall be considered deleted herefrom and the remainder of such provision and
the
remainder of this Agreement shall be unaffected and shall continue in full
force
and effect. Provided however,
should
the duration, geographical extent of, or business activity constrained by any
limitation or restriction set forth in this Agreement be in excess of that
which
is valid and enforceable under applicable law, then such limitation or
restriction shall be construed to cover only the maximum duration or extent,
or
those activities which may be lawfully, validly and enforceably limited or
restricted by this Agreement, and the parties hereto expressly authorize a
court
of competent jurisdiction to reform those sections of this Agreement necessary
to obtain such result.
10.4. Governing
Law; Venue.
This
Agreement is made under and shall be construed in accordance with the laws
of
the State of Colorado. Any action at law or in equity arising directly or
indirectly in connection with or related to this Agreement or any provisions
hereof, shall be litigated only in the state or federal courts of or located
in
Colorado, in the city and county of Denver. The parties hereto waive any right
such party may otherwise have to transfer or change the venue of any litigation
brought or arising in connection with this Agreement.
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10.5. Amendments.
No
amendment or modification of this Agreement shall be deemed effective unless
made in writing and signed by the parties hereto.
10.6. No
Waiver.
The
waiver by any party to this Agreement of any breach, or the failure of any
party
to enforce any of the terms and conditions of this Agreement at any time shall
not in any way affect, limit, or waive that party’s rights thereafter to enforce
and/or compel strict compliance by the breaching party with any term or
condition of this Agreement.
10.7. Assignment.
This
Agreement shall not be assignable, in whole or in part, by any of the parties
hereto without the written consent of the other party, except that the Company
may assign its rights and obligations under this Agreement to any corporation,
firm, or other business entity with or into which the Company may merger or
consolidate, or to which the Company may sell or transfer all or substantially
all of its assets. After such assignment by the Company, the Company shall
be
discharge from all further liability hereunder and such assignee shall
thereafter be deemed to be the Company for the purposes of all provisions of
this Agreement including this Section 10.7.
10.8. Notices.
Any
notice required or permitted to be given by a party hereto shall be deemed
validly given if personally delivered, mailed via first class mail, postage
prepaid, or sent via overnight courier that insures next day delivery, such
as
Federal Express, and addressed as follows:
If
to
Founder:
Xxxx
X
Xxxxx
________________
________________
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If
to
Company:
0000
X.
Xxxxxxxx Xx.
Xxxxx
000
Xxxxxx,
XX 00000
Provided
however, a party hereto may from time to time notify the other party, in
writing, of a new address to which notices to that party shall thereafter be
given until further notice. Any notice given in accordance with this Section
10.8, shall be deemed effective, whether or not received, when delivered if
personally delivered, five (5) days after deposit with the U.S. postal service
if mailed, and one (1) day after deposit with an overnight courier for next
day
delivery.
10.9. Counterparts.
This
Agreement may be executed in one or more counterparts, each of which shall
be
deemed an original and all of which, when taken together, shall constitute
one
entire instrument and agreement.
10.10. Captions
and Headings.
The
captions and Section headings used in the Agreement are for convenience and
reference only, and shall not affect the construction or interpretation of
this
Agreement or any of the provisions hereof.
[Remainder
of page intentionally left blank.]
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IN
WITNESS WHEREOF, Founder and the Company have executed this Agreement effective
as of the day and year first set forth above.
| “Founder” | ||
| Xxxx X Xxxxx | ||
| “Company” | ||
| IPtimize, Inc. a Colorado Corporation | ||
|
By:
|
||
|
Name:
|
|
|
|
Title:
|
||
| Acknowledged: | ||
| Xxxxx Xxxx, Secretary | ||
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