Exhibit 10.6
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT ("Agreement"), dated as of January 1, 1998, between
XXXXXXXX EQUIPMENT AND ENGINEERING COMPANY, a Florida corporation (hereinafter
referred to as the "Company"), and XXXXX X. XXXXXXXX (the "Executive").
The Executive is presently the Chairman of the Board of Directors and Chief
Executive Officer for the Company and shall continue to serve in those
capacities during the term of this Agreement.
NOW, THEREFORE, in consideration of the mutual promises contained herein
and of other good and valuable consideration, the receipt of sufficiency of
which are hereby acknowledged, the Company and the Executive agree as follows:
Section 1. Definitions. For purposes of this Agreement, the following
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terms have the meanings set forth below:
"Base Salary" has the meaning set forth in Section 4.1.
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"Cause" means (a) theft or embezzlement by the Executive with respect to
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the Company; (b) wilful malfeasance or nonfeasance of a duty intended to injure
or having the effect of injuring the reputation, business or business
relationships of the Company; (c) the commission of the Executive of any felony
resulting in direct material injury to the business or property of the Company;
(d) willful or prolonged absence from work by the Executive (other than by
reason of disability due to physical or mental illness) or failure, neglect or
refusal by the Executive to perform his duties and responsibilities without the
same being corrected within ten days after being given written notice thereof;
or (e) the material breach by the Executive of any of the covenants contained in
this Agreement.
"Confidential Information" means information that is not generally
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known to the public and that was or is used, developed or obtained by the
Company in connection with its business. It shall not include information (i)
required to be disclosed by court or administrative order; (ii) lawfully
obtainable from other sources or which is in the public domain through no fault
of Executive, or (iii) the disclosure of which is consented to in writing by the
Company.
"Employment Period" has the meaning set forth in section 2 of this
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Agreement.
"Intellectual Property" has the meaning set forth in Section 7 of this
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Agreement.
"Material Change by Company" means (a) without the Executive's express
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written consent, the assignment to him of any duties materially inconsistent
with his positions, duties, and responsibilities with the Company during the
twelve (12) months prior to the date of this Agreement; (b) a material reduction
in the Executive's Base Salary; (c) the failure by the Company to continue in
effect any benefit or compensation plan, pension plan, life insurance plan,
health and accident plan or disability plan in which he is presently
participating or enter into new plans substantially similar to those previously
mentioned which, when considered in the aggregate, provide him with a
substantially similar level of benefits in the aggregate; or (d) any purported
termination of his employment which is not effected pursuant to a Notice of
Termination satisfying the requirements of Section 5.8 below. For purposes of
this paragraph, a material reduction in the Executive's Base Salary is defined
as 10% of the current Base Salary at the time of reduction.
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"Noncompetition Period" has the meaning set forth in Section 9.1
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hereof.
"Person" means an individual, a partnership, a corporation, a limited
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liability company, an association, a joint stock company, a trust, a joint
venture, an unincorporated organization and a governmental entity or any
department, agency or political subdivision thereof.
"Permanent Disability" means those circumstances where the Executive
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is unable to continue to perform the usual customary duties of his assigned job
or as otherwise assigned in accordance with the provisions of this Agreement for
a period of four (4) consecutive months.
"Reimbursable Expenses" has the meaning set forth in Section 4.4 of
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this Agreement.
"Trade Secrets" shall have the meaning as defined within Section
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688.002(4), Fla. Stat., as amended.
Section 2. Employment. The Company hereby employs the Executive, and
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the Executive hereby accepts employment with the Company, upon the terms and
conditions set forth in this Agreement for the period beginning on the date of
this Agreement and ending as provided in Section 5 (the "Employment Period").
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Section 3. Position and Duties.
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3.1 Position and Duties. The Executive shall serve as Chief Executive
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Officer and Chairman of the Board of Directors of the Company and shall have
such responsibilities, powers and duties as may from time to time be prescribed
by the Board of Directors of the Company, provided, that such duties and
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responsibilities are substantially
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consistent with his duties with the Company within the twelve (12) month period
prior to this Agreement and with those of a senior executive officer. The
Executive shall devote substantially all of his working time and efforts to the
business and affairs of the Company. The Executive shall not directly or
indirectly render any services for payment of a business, commercial or
professional nature to any other person or for profit organization not related
to the business of the Company, whether for compensation or otherwise, without
prior written consent of the Company.
3.2 Reporting. The Executive will report to the Board of Directors of
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the Company, or any executive committee(s) hereafter established by such Board
of Directors.
Section 4. Base Salary and Benefits.
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4.1 Base Salary. During the Employment Period, the Executive's base
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salary will be $125,000 per annum (the "Base Salary"), which Base Salary will be
payable in regular installments in accordance with the general payroll practices
of the Company. The Base Salary shall be subject to review on an annual basis or
at the Company's discretion such earlier date as the Board of Directors may
designate.
4.2 Bonuses. In addition to the Base Salary, the Executive shall be
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eligible to receive annual bonuses as determined by the Board of Directors of
the Company.
4.3 Benefits. In addition to the Base Salary, and any bonuses payable
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to the Executive pursuant to this Agreement, the Executive shall be entitled to
the following benefits during the Employment Period:
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(a) such major medical, life insurance and disability insurance
coverage as is, or may during the Employment Period, be provided for other
senior executive officers of the Company;
(b) a maximum of three (3) weeks of paid vacation annually during
the term of the Employment Period;
(c) an automobile on terms and conditions existing at the date of
the Agreement; and
(d) during the Employment Period, the Executive shall also
participate in or receive benefits under any other plan or arrangement for the
senior executives of the Company in the future, subject to and on a basis
consistent with terms and conditions and overall administration of such plans.
4.4 Expenses. The Company shall reimburse the Executive for all
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reasonable expenses incurred by him in the course of performing his duties under
this Agreement which are consistent with the Company's policies in effect from
time to time with respect to travel, entertainment and other business expenses
("Reimbursable Expenses"), subject to the Company's requirements with respect to
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reporting and documentation of expenses.
Section 5. Term and Termination.
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5.1 Term. The initial Employment Period will terminate on the fifth
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anniversary of the date of this Agreement; provided, that (a) the Employment
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Period shall terminate prior to such date upon the Executive's resignation,
death or Permanent Disability, (b) the Employment Period may be terminated by
the Company at any time prior to such date, if such termination shall be for
Cause, and (c) the Executive may terminate for a Material Change by the Company
during the
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Employment Period. At the end of the initial Employment Period, this Agreement
shall be automatically renewed for a renewal Employment Period of one (1) year
and each year thereafter unless either party with sixty (60) days notice prior
to the end of the initial Employment Period or any renewal Employment Period
notifies the other of its intention not to renew.
5.2 Unjustified Termination. Except as otherwise provided in Section
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5.3 below, if the Employment Period shall be terminated by the Company prior to
the fifth anniversary of the date of this Agreement or prior to the end of the
year in any renewed Employment Period for any reason, other than (a) for Cause,
(b) as a result of the Executive's resignation or leaving his employment, other
than for a Material Change by Company and non-renewal referred to in Section
5.4, or (c) as a result of the death or Permanent Disability of the Executive
(collectively, an "Unjustified Termination"), the Executive shall be paid the
amount of two and one-half (2 1/2) years of his Base Salary so long as the
Executive receiving payments hereunder has not breached and does not breach the
provisions of Sections 6, 7, 8 or 9 of this Agreement. The Executive shall also
be reimbursed all Reimbursable Expenses incurred by the Executive prior to the
termination of the Employment Period. The amounts payable pursuant to this
Section 5.2 may be payable, at the Company's discretion, in one lump sum
payment, within 30 days following termination of the Employment Period or in
equal monthly installments for the number of months for the length of the period
of compensation described herein. Furthermore, an Unjustified Termination shall
also include termination by the Executive for a Material Change by the Company.
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5.3 Justified Termination. If the Employment Period shall be
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terminated by the Company prior to the fifth anniversary of the date of this
Agreement (a) for Cause, (b) as a result of the Executive's resignation or
leaving of his employment other than for a Material Change by the Company, or
(c) as a result of the death or Permanent Disability of the Executive
(collectively, a "Justified Termination"), the Executive shall be entitled to
receive his Base Salary and Expense Allowance through the date of termination
and reimbursement of all Reimbursable Expenses incurred by the Executive prior
to the termination of the Executive's employment. A termination for Cause shall
become effective on the date designated by the Company.
5.4 Renewal. If the Company does not renew the Employment Period sixty
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(60) days prior to the end of the Employment Period or renewal thereof, the
Executive shall be paid an amount equal to his Base Salary and the prior fiscal
period bonus, if any, in twelve (12) equal monthly installments commencing on
the first month following the end of the Employment Period.
5.5 Benefits. Except as otherwise required by law, all of the
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Executive's rights to fringe benefits under this Agreement, if any, accruing
after the termination of the Employment Period as a result of a Justified
Termination will cease upon such Justified Termination; provided, that if such
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Justified Termination is as a result of a Permanent Disability or retirement of
the Executive, the Executive shall continue to receive his full major medical,
life insurance and disability insurance coverage benefits from the Company plan
at the time for twelve (12) months after termination, and the Company shall
allow Executive to continue on the said coverage existing at the time
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of termination for an additional five (5) years if fully paid by the Executive.
5.6 Notice of Termination. Any termination by the Company for
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Permanent Disability or Cause or by the Executive for a Material Change by
Company shall be communicated by written Notice of Termination to the other
party hereto. For purposes of this Agreement, a "Notice of Termination" shall
mean a notice which shall indicate the specific termination provision in this
Agreement relied upon and shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of employment under the
provisions indicated.
5.7 Date of Termination. "Date of Termination" shall mean (A) if this
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Agreement is terminated for Permanent Disability, five (5) days after Notice of
Termination is given, (B) if Executive's employment is terminated for a Material
Change by Company, the date specified in the Notice of Termination, and (C) if
Executive's employment is terminated for any other reason, the date on which a
Notice of Termination is given by the Company.
5.8 Mitigation. Executive shall not be required to mitigate the amount
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of any payment provided for in this Section 5 by seeking other employment or
otherwise.
Section 6. Nondisclosure and Nonuse of Confidential Information and
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Trade Secrets. The Executive will not disclose or use at any time during the
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Employment Period or for a period of ten (10) years following the termination of
this Agreement for any reason whatsoever (the "Nondisclosure Period") any
Confidential Information or Trade Secrets of which the Executive is or becomes
aware, whether or not such information is developed by him, except to the extent
that
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such disclosure or use is directly related to and required by the Executive's
performance of duties assigned to the Executive pursuant to this Agreement.
Under all circumstances and at all times, the Executive will take all
appropriate steps to safeguard Confidential Information and Trade Secrets in his
possession and to protect it against disclosure, misuse, espionage, loss and
theft.
Section 7. Ownership of Intellectual Property. Throughout the
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Nondisclosure Period, in the event that the Executive as part of his activities
on behalf of the Company generate, author or contribute to any invention,
design, new development, device, product, method of process (whether or not
patentable or reduced to practice or comprising Confidential Information), any
copyrightable work (whether or not comprising Confidential Information) or any
other form of Confidential Information relating directly or indirectly to the
business of the Company as now or hereinafter conducted (collectively,
"Intellectual Property"), the Executive acknowledges that such Intellectual
Property is the sole and exclusive property of, the Company and hereby assigns
all right, title and interest in and to such Intellectual Property to the
Company. Any copyrightable work prepared in whole or in part by the Executive
during the Nondisclosure Period will be deemed "a work made for hire" under
Section 201(b) of the Copyright Act of 1976, as amended, and the Company will
own all of the rights comprised in the copyright herein. The Executive will
promptly and fully disclose all Intellectual Property and will cooperate with
the Company to protect the Company's interests in and rights to such
Intellectual Property (including providing reasonable assistance in securing
patent protection and copyright registrations and executing all documents as
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reasonably requested by the Company, whether such requests occur prior to or
after termination of executive's employment hereunder).
Section 8. Delivery of Materials Upon Termination of Employment. As
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requested by the Company, from time to time and upon the termination of the
Executive's employment with the Company for any reason, the Executive will
promptly deliver to the Company all copies and embodiments, in whatever form or
medium, of all Confidential Information or Intellectual Property in the
Executive's possession or within his control (including written records, notes,
photographs, manuals, notebooks, documentation, program listings, flow charts,
magnetic media, disks, diskettes, tapes and all other materials containing any
Confidential Information or Intellectual Property) irrespective of the location
or form of such material and, if requested by the Company will provide the
Company with written confirmation that all such materials have been delivered to
the Company.
Section 9. Noncompetition and Nonsolicitation.
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9.1 Noncompetition. The Executive acknowledges that in the course of
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his employment with the Company, he has become familiar with, and during his
employment with the Company, he will become familiar with, Trade Secrets and
other Confidential Information concerning the Company and its respective
predecessors, and that his services have been and will be of special, unique and
extraordinary value to the Company. Accordingly, the Executive hereby agrees
that at any time during the Employment Agreement and for a period of two (2)
years following the termination of this Agreement for any reason whatsoever (the
"Noncompetition Period"), he will not directly or indirectly own, manage,
control, participate in, consult with, render services for, or
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in any manner engage in any business competing with the businesses of the
Company as such businesses exist or are in process on the date of the
termination of the Executive's employment, within any geographical area in which
the Company engages or plans to engage in such businesses. Nothing herein will
prohibit the Executive from being a passive owner of not more than 2% of the
outstanding stock of any class of a corporation which is publicly traded, so
long as the Executive has no active participation in the business of such
corporation.
9.2 Nonsolicitation. The Executive hereby agrees that: (a) during the
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Nondisclosure Period, the Executive will not, directly or indirectly through
another entity, induce or attempt to induce any employee of the Company to leave
the employ of the Company, or in any way interfere with the relationship between
the Company and any employee thereof, and (b) during the Noncompetition Period,
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the Executive will not, directly or indirectly through another entity (i)
violate any of the provisions of clause (a) of this Section 9.2, or otherwise
hire any individual who was an employee of the Company at any time during the
Noncompetition Period, or (ii) induce or attempt to induce any customer,
supplier, licensee or other business relation of the Company to cease doing
business with the Company or in any way interfere with the relationship between
any such customer, supplier, licensee or business relation and the Company.
9.3 Enforcement. If, at the time of enforcement of Section 9, a court
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holds that the duration, scope or area restrictions stated herein are
unreasonable under circumstances then existing, the parties agree that the
maximum duration, scope or area reasonable under such circumstances will be
substituted for the stated duration, scope or
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area and that the court will be permitted to revise the restrictions contained
in this Section 9 to cover the maximum period, scope and area permitted by law.
Section 10. Equitable Relief. The Executive acknowledges that a
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breach or threatened breach by him of any of his covenants and agreements with
the Company contained in Sections 6, 7, 8 or 9 of this Agreement could cause
irreparable harm to the Company for which it or they would have no adequate
remedy at law. Accordingly, and subject to the provisions of Section 12.14 of
this Agreement, in the event of an actual or threatened breach by the Executive
of his covenants and agreements contained in Sections 6, 7, 8 or 9 of this
Agreement, the Company shall have the absolute right to apply to any court of
competent jurisdiction for such injunctive or other equitable relief as such
court may deem necessary or appropriate in the circumstances.
Section 11. Executive Representations. The Executive hereby
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represents and warrants to the Company that (a) the execution, delivery and
performance of this Agreement by the Executive does not and will not conflict
with, breach, violate or cause a default under any contract, agreement,
instrument, order, judgement or decree to which the Executive is a party of by
which he is bound, (b) the Executive is not a party to or bound by any
employment agreement, noncompetition agreement or confidentiality agreement with
any other Person, and (c) upon the execution and delivery of this Agreement by
the Company, this Agreement will be the valid and binding obligation of the
Executive, enforceable in accordance with its terms.
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Section 12. Miscellaneous.
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12.1 Remedies. The Company will have all rights and remedies set forth
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in this Agreement, all rights and remedies which the Company has been granted at
any time under any other agreement or contract and all of the rights which the
Company has under any law. The Company will be entitled to enforce such rights
specifically, without posting a bond or other security, to recover damages by
reason of any breach of any provision of this Agreement and to exercise all
other rights granted by law.
12.2 Consent to Amendments. The provisions of this Agreement may be
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amended or waived only by a written agreement executed and delivered by the
Company and the Executive. No other course of dealing between the parties to
this Agreement or any delay in exercising any rights hereunder will operate as a
waiver of any rights of any such parties.
12.3 Successors and Assigns. All covenants and agreements contained in
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this Agreement by or on behalf of any of the parties hereto will bind and inure
to the benefit of the respective successors and assigns of the parties hereto
whether so expressed or not; provided that the Executive may not assign his
rights or delegate his obligations under this Agreement without the written
consent of the Company.
12.4 Severability. Whenever possible, each provision of this Agreement
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will be interpreted in such manner as to be effective and valid under applicable
law, but if any provision of this Agreement is held to be prohibited by or
invalid under applicable law, such provision will be ineffective only to the
extent of such prohibition or invalidity, without invalidating the remainder of
this Agreement.
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12.5 Counterparts. This Agreement may be executed simultaneously in
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two or more counterparts, any on of which need not contain the signatures of
more than one party, but all of which counterparts taken together will
constitute one and the same agreement.
12.6 Descriptive Headings. The descriptive headings of this Agreement
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are inserted for convenience only and do not constitute a part of this
Agreement.
12.7 Notices. All notices, demands or other communications to be given
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or delivered under or by reason of the provisions of this Agreement will be in
writing and will be deemed to have been given when delivered personally to the
recipient, two business days after the date when sent to the recipient: by
reputable express courier service (charges prepaid) or four business days after
the date when mailed to the recipient by certified or registered mail, return
receipt requested and postage prepaid. Such notices, demands and other
communications will be sent to the Executive and to the Company at the addresses
set forth below.
If to the Executive: Xxxxx X. Xxxxxxxx
00000 Xxxxx Xxxxx Xxxx
Xxxxxxx, Xxxxxxx 00000
If to the Company: Xxxxxxxx Equipment and
Engineering Company
000 Xxxx Xxxxxxxxxx Xxxx
Xxxxxxx, Xxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
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or to such other address or to the attention of such other person as the
recipient party has specified by prior written notice to the sending party.
12.8 No Third Party Beneficiary. This Agreement will not confer any
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rights or remedies upon any person other than the Company, the Executive and
their respective heirs, executors, successors and assigns.
12.9 Entire Agreement. This Agreement (including the documents
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referred to herein) constitutes the entire agreement among the parties and
supersedes any prior understandings, agreements or representations by or among
the parties, written or oral, that may have related in any way to the subject
matter hereof.
12.10 Construction. The language used in this Agreement will be
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deemed to be the language chosen by the parties to express their mutual intent,
and no rule of strict construction will be applied against any party. Any
reference to any federal, state, local or foreign statute or law will be deemed
also to, refer to all rules and regulations promulgated thereunder, unless the
context requires otherwise. The use of the word "including" in this Agreement
means "including without limitation" and is intended by the parties to be by way
of example rather than limitation.
12.11 Survival. Sections 6, 7, 8, 9 and 12 of this Agreement will
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survive and continue in full force in accordance with their terms
notwithstanding any termination of the Employment Period or other Employment
Termination.
12.12 GOVERNING LAW. ALL QUESTIONS CONCERNING THE CONSTRUCTION,
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VALIDITY AND INTERPRETATION OF THIS AGREEMENT WILL BE
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GOVERNED BY THE INTERNAL LAW AND NOT THE LAW OF CONFLICTS, OF THE STATE OF
FLORIDA.
12.13 Prevailing Party. In connection with any action arising out of
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this Agreement or the transactions contemplated hereby, the substantially
prevailing party in any such action shall be entitled to receive from the other
party all costs and expenses (including reasonable attorneys' fees) incurred by
the substantially prevailing party in connection therewith, in addition to any
other award made by the court or arbitration tribunal in which such action is
brought.
12.14 Arbitration. Any controversy arising between the parties or
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any person claiming under either of them relating to this Agreement or the
performance or breach thereof with the sole exception of an action for
injunctive relief brought by the Company against the Executive pursuant to
Section 10 of this Agreement, shall be resolved through arbitration in the State
of Florida, City of Orlando, in accordance with the then governing Commercial
Rules of the American Arbitration Association and judgment or decree may be
entered upon the award made by any court of competent jurisdiction.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date and year first above written.
XXXXXXXX EQUIPMENT AND
ENGINEERING COMPANY
By: /s/ Xxxxxx Xxxxxxxx
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Printed Name: Xxxxxx Xxxxxxxx
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Title: President
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/s/ Xxxxx X. Xxxxxxxx
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XXXXX X. XXXXXXXX
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