EXECUTIVE EMPLOYMENT AGREEMENT
This EXECUTIVE EMPLOYMENT AGREEMENT, dated as of December 3, 1996 (the
"Agreement"), by and between Oak Tree Medical Systems, Inc., a Delaware
corporation (the "Company"), with executive offices at 0 Xxxxxxx Xxxxx, Xxxxx
000, Xxxxx Xxxxxx, Xxx Xxxx 00000, and Xxxxxxx Xxxxxxxx (the "Executive").
WHEREAS, the Company believes that it is in the Company's best
interests to assure the continued services of the Executive on the terms and
conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants and conditions
hereinafter set forth and other good and valuable consideration the receipt and
sufficiency of which is hereby acknowledged, the parties intending to be legally
bound hereby agree as follows:
1. DEFINITIONS.
1.1 "Affiliate" of a person or other entity shall mean a person or other
entity that directly or indirectly controls, is controlled by, or is under
common control with the person or other entity specified (including without
limitation any investment entity managed by the person or other entity specified
or a person or entity that directly or indirectly controls, is controlled by, or
is under common control with the person or other entity specified).
1.2 "Board" shall mean the Board of Directors of the Company.
1.3 "Cause" shall mean:
(a) The Executive is convicted of a felony involving moral turpitude;
or
(b) The Executive is guilty of willful gross neglect or willful gross
misconduct in carrying out his duties under this Agreement,
resulting, in either case, in material economic harm to the
Company, unless the Executive believed in good faith that such
act or nonact was in the best interests of the Company.
1.4 "Change in Control" shall mean the occurrence of any one of the
following events:
(a) Any "person," as such term is used in Sections 3(a)(9) and 13(d)
of the Securities Exchange Act of 1934 (including any group),
other than Xxxxx Xxxxxx, becomes a "beneficial owner," as such
term is used in Rule 13d-3 promulgated under such Act, of 35% or
more of the Voting Stock of the Company or any "person" who
currently owns 35% or
more of the Voting Stock of the Company acquires an additional 3%
or more of the Voting Stock of the Company;
(b) The majority of the Board consists of individuals other than
Incumbent Directors, which term means the members of the Board on
the date of this Agreement; provided that any person becoming a
director subsequent to such date whose election or nomination for
election was supported by two-thirds of the directors who then
comprised the Incumbent Directors shall be considered to be an
Incumbent Director;
(c) The Company adopts any plan of liquidation providing for the
distribution of all or substantially all of the assets of the
Company on a consolidated basis;
(d) All or substantially all of the assets or business of the Company
is disposed of pursuant to a merger, consolidation or other
transaction (unless the shareholders of the Company immediately
prior to such merger, consolidation or other transaction
beneficially own, directly or indirectly, in substantially the
same proportion as they owned the Voting Stock of the Company,
all of the Voting Stock or other ownership interests of the
entity or entities, if any, that succeed to the business of the
Company); or
(e) The Company merges or combines with another company and,
immediately after the merger or combination, the stockholders of
the Company immediately prior to the combination hold, directly
or indirectly, (i) in the event the Company is the surviving
corporation, 50% or less of the Voting Stock of the combined
company, or (ii) in the event the Company is not the surviving
corporation, 50% or less of the Voting Stock or other ownership
interests of the entity or entities, if any, that succeed to the
business of the Company.
1.5 "Disability" shall mean the Executive's inability to substantially
perform the Executive's duties and responsibilities as contemplated under this
Agreement for a period of more than six (6) months, whether or not continuous,
during any 365-day period, due to physical or mental incapacity or impairment.
1.6 "Good Reason" shall mean the Executive's termination of his employment
upon notice to the Company following assignment to the Executive duties
materially inconsistent with the Executive's position as described in Section
2.1 or the Executive's being removed from such position, in either case without
the Executive's consent, provided such termination shall only be effective
thirty (30) days after prompt notice of such circumstances by the Executive to
the Company, if such circumstances have not been cured prior to such date.
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1.7 "Specified Multiple" shall mean a multiple of two and one-half for any
termination occurring prior to the second anniversary of the Effective Date and
one for any termination occurring thereafter.
1.8 "Subsidiary" of the Company shall mean any corporation of which the
Company owns, directly or indirectly, more than 50% of the Voting Stock.
1.9 "Voting Stock" shall mean capital stock of any class or classes having
general voting power under ordinary circumstances, in the absence of
contingencies, to elect the directors of a corporation.
2. EMPLOYMENT TERM
2.1 Employment. Upon the terms and conditions hereinafter set forth, the
Company hereby employs the Executive, and the Executive hereby accepts
employment with the Company. The Executive's principal office and
responsibilities shall be that of Chief Executive Officer of the Company and
shall be responsible for the general management of the affairs of the Company
and its Subsidiaries. The Executive, in carrying out his duties under this
Agreement, shall report to the Board.
2.2 Term. Unless sooner terminated as hereinafter provided, the Executive's
employment hereunder shall be for a term of three (3) years commencing on
December 3, 1996 (the "Effective Date") and terminating on December 2, 1999. At
the end of such three-year period, this Agreement shall be automatically renewed
upon the same terms and conditions hereof for successive one-year periods (as so
extended, the "Term"), unless either party gives ninety (90) days' prior written
notice that such party does not wish to renew for another one-year period,
whereupon this Agreement shall expire on the scheduled termination date.
2.3 Duties. During the Term, the Executive shall perform such duties for
the Company and its Subsidiaries, consistent with his position and title
hereunder, and as may be assigned to him, consistent with his position
hereunder, from time to time by the Board. The Executive agrees to (i) devote
his full time and best efforts, attention and energies to the business and
affairs of the Company and to faithfully and diligently perform, to the best of
his ability, all of his duties and responsibilities; (ii) abide by all
applicable policies of the Company from time to time in effect provided that
such policies comply with applicable law; and (iii) not take any action or
conduct himself in any manner which would be reasonably likely to harm the
reputation or goodwill of the Company.
2.4 Exclusive Agreement. The Executive represents and warrants to the
Company that there are no agreements or arrangements, whether written or oral,
in effect which would prevent the Executive from rendering service to the
Company during the Term as provided herein. During the Term, the Executive shall
not (i) engage in any activity which conflicts or interferes with or derogates
from the performance of the Executive's duties hereunder nor shall the Executive
engage in any other business activity, whether or not such business
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activity is pursued for gain or profit, except as approved in advance in writing
by the Board; or (ii) accept any other full-time or substantially full-time
employment, whether as an executive or consultant or in any other capacity, and
whether or not compensated therefor.
Anything herein to the contrary notwithstanding, nothing shall preclude
the Executive from (i) serving on the boards of directors of a reasonable number
of other corporations or the boards of a reasonable number of trade associations
and/or charitable organizations, (ii) engaging in charitable activities and
community affairs, and (iii) managing his personal investments and affairs,
provided that such activities do not materially interfere with the proper
performance of his duties and responsibilities as the Company's Chief Executive
Officer.
3. COMPENSATION
3.1 Base Salary. As partial compensation for all services rendered by the
Executive hereunder and all covenants and conditions undertaken by him pursuant
to this Agreement, the Company shall pay the Executive, in accordance with the
regular payroll practices of the Company, an annual base salary ("Base Salary")
of $150,000. Of such Base Salary, a salary ("Deferred Salary") of $50,000 shall
be payable on a deferred basis as follows: If the Company shall have net income
of at least $1,000,000 for the fiscal year in which the Deferred Salary was
earned (the "Year Earned"), the Deferred Salary shall be paid following such
fiscal year. If the Company shall not have net income of at least $1,000,000 in
the Year Earned, the Deferred Salary shall be paid following the next fiscal
year for which the net income of the Company is at least equal to $1,000,000
multiplied by the sum of number of fiscal years prior to the Year Earned for
which the Deferred Salary has been deferred and not theretofore paid plus two.
Notwithstanding the foregoing, all Deferred Salary not theretofore paid (pro
rated for any partial fiscal year) shall become immediately due and payable upon
termination of the Executive without Cause or termination by the Executive for
Good Reason. Any Deferred Salary due and payable on the basis of the net income
achieved for any fiscal year shall be paid within forty-five (45) days after the
end of such fiscal year.
3.2 Bonus. For each fiscal year (pro rated for any partial fiscal year)
during the Term, provided the Company shall have annual net income of at least
$500,000, as reflected on the Company's audited financial statements for such
fiscal year, in addition to the Base Salary, the Executive shall receive an
annual bonus of 5% of the first $2,000,000 of the annual net income of the
Company, 2-1/2% of the next $10,000,000 of net income and 1% of all net income
thereafter. Any bonus earned during any fiscal year shall be paid within
forty-five (45) days after the end of such fiscal year.
3.3 Stock Options.
(a) As further consideration of the services to be rendered by the
Executive, the Company hereby grants to the Executive, effective upon the
Effective Date, options (the "Options") to purchase 375,000 shares of common
stock, par value $0.01 per
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share (the "Common Stock"), of the Company at an exercise price (the "Exercise
Price") equal to $1-11/16 per share. The number and kind of shares issuable upon
exercise of the Options and the Exercise Price shall be appropriately adjusted
upon the occurrence of any stock split, reverse stock split, stock dividend,
recapitalization, reorganization or similar transaction.
(b) The Options shall vest and become exercisable upon the earliest to
occur of the following: (i) a fiscal year in which the Company has (y)
$10,000,000 in gross revenue and (z) either $750,000 in pre-tax income
(including extraordinary gains) or $500,000 in pre-tax income (excluding
extraordinary gains), as reflected on the Company's audited financial statements
for such fiscal year; (ii) a fiscal year in which the Company has $15,000,000 in
gross revenue, as reflected on the Company's audited financial statements for
such fiscal year; and (iii) the fifth anniversary of the Effective Date.
Notwithstanding the foregoing, the Options shall immediately vest and become
exercisable upon the occurrence of a Change of Control, the Executive is
terminated by the Company other than for Cause or the Executive terminates his
employment for Good Reason.
(c) Except as provided below, the Options granted hereby shall expire
on the tenth anniversary of the Effective Date. Upon termination of the
Executive's employment, the Options shall expire as follows: If the Company
terminates the Executive for Cause, the Options shall expire immediately upon
termination. If the Executive terminates his employment without Good Reason, the
Options shall expire three months following such termination. If the Executive's
employment shall terminate upon the expiration of the Term or upon the death or
Disability of the Executive or if the Company shall terminate the Executive
without Cause or if the Executive shall terminate his employment for Good
Reason, the Options shall expire one year from the date of such termination.
(d) The Company shall promptly file with the Securities and Exchange
Commission a registration statement on Form S-8 registering the shares of Common
Stock issuable upon the exercise of the Options by the Executive and shall keep
such registration statement effective for as long as any of the Options are
outstanding.
3.4 Method of Exercise. The Options or any part thereof may be exercised
only by the giving of written notice to the Company on such form and in such
manner as the Board shall prescribe. Such written notice of exercise shall be
accompanied by payment of the full purchase price of the number of shares being
purchased. Such payment may be made by cash, certified check or check acceptable
to the Company. The date of exercise (the "Exercise Date") of the Options shall
be the date on which written notice of exercise is received by the Company,
during normal business hours, at its address as provided in Section 7.1 of this
Agreement. On the Exercise Date, the Executive shall be deemed to be the holder
of record of the shares of Common Stock issuable upon such exercise,
notwithstanding that the transfer books of the Company shall then be closed or
certificates representing such shares shall not then have been actually
delivered to the Executive. As soon as practicable after the Exercise Date, the
Company shall issue and deliver to the
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Executive a certificate or certificates for the number of shares issuable upon
such exercise, registered in the name of the Executive.
3.5 Nonassignability. No options granted to the Executive under this
Agreement shall be assignable or transferable other than by will or by the laws
of descent and distribution or by qualified domestic relations orders (as
defined in the Internal Revenue Code).
4. BENEFITS
4.1 Benefits. The Executive shall be entitled to participate, to the extent
the Executive is otherwise eligible under the terms thereof, in all plans now
existing or hereafter adopted for the general benefit of the Company's
employees, such as stock option or other incentive compensation plans, profit
sharing plans, retirement plans, health insurance plans, or other insurance
plans and benefits (not including, however, bonus, severance or cash incentive
arrangements other than those specified in this Agreement), subject to the
provisions of such plans as may be in effect from time to time.
4.2 Expense Reimbursement. The Executive is authorized to incur reasonable
expenses in carrying out his duties and responsibilities under this Agreement
and the Company shall promptly reimburse him for all business expenses incurred
in connection with carrying out the business of the Company, in accordance with
its standard policies from time to time in effect.
4.3 Vacation. The Executive shall be entitled to six (6) weeks annual paid
vacation for each year during the Term. Any vacation days not used by the
Executive during any calendar year shall be paid to the Executive in the form of
a bonus at the end of such calendar year. The Executive shall also be entitled
to sick leave and holidays in accordance with the Company's policies for senior
executive employees.
4.4 Automobile Allowance. The Company shall provide the Executive with the
full use of a leased automobile of the Executive's choice at a cost to the
Company not to exceed $1,000 per month and shall further reimburse the Executive
for all reasonable expenses incurred in connection with the Executive's use of
such automobile.
4.5 Life Insurance. The Company shall provide to the Executive a life
insurance policy, providing death benefits in the amount of $1,000,000, payable
to any beneficiary to be designated by the Executive.
4.6 Indemnification. The Company agrees that if the Executive is made a
party, or is threatened to be made a party, to any action, suit or proceeding,
whether civil, criminal, administrative or investigative (a "Proceeding"), by
reason of the fact that he is or was a director, officer or employee of the
Company or is or was serving at the request of the Company as director, officer,
member, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, including service with respect to
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employee benefit plans, whether or not the basis of such Proceeding is the
Executive's alleged action in an official capacity while serving as a director,
officer, member, employee or agent, the Executive shall be indemnified and held
harmless by the Company to the fullest extent permitted or authorized by the
Company's certificate of incorporation or bylaws, or, if greater, by the laws of
the State of Delaware, against all cost, expense, liability and loss (including,
without limitation, attorney's fees, judgments, fines, ERISA exercise taxes or
penalties and amounts paid or to be paid in settlement) reasonably incurred or
suffered by the Executive in connection therewith, and such indemnification
shall continue as to the Executive even if he has ceased to be a director,
member, employee or agent of the Company or other entity and shall inure to the
benefit of the Executive's heirs, executors and administrators. The Company
shall advance to the Executive all reasonable costs and expenses incurred by him
in connection with a Proceeding within twenty (20) days after receipt by the
Company of a written request for such advance. Such request shall include an
undertaking by the Executive to repay the amount of such advance if it shall
ultimately be determined that he is not entitled to be indemnified against such
costs and expenses. Notwithstanding the foregoing, such indemnification shall
include, without limitation, consultation services provided by the Executive to
the Company as of March 1, 1996.
5. TERMINATION
5.1 Termination Generally. The Term may be terminated at any time by the
Company immediately upon notice from the Company to the Executive. The Executive
may terminate his employment hereunder at any time by giving the Company ninety
(90) days' prior written notice.
5.2 Termination for Cause. In the event that the Term is terminated by the
Company for Cause, or if the Executive terminates his employment hereunder
without Good Reason, the Company shall pay to the Executive an amount equal to
the Executive's accrued but unpaid Base Salary through the date of such
termination (including any Deferred Salary, payable at the same time as such
Deferred Salary would be paid as provided in Section 3.1 of this Agreement),
accrued but unpaid bonus for any completed fiscal year, additional salary
payments in lieu of Executive's accrued and unused vacation for the current
calendar year (on a pro rata basis), unreimbursed business expenses, and
unreimbursed medical, dental and other employee benefit expenses incurred in
accordance with the applicable plans (the "Standard Termination Payments").
5.3 Death; Disability. The Term will terminate forthwith upon the
Executive's death or, upon notice by the Company or the Executive, upon the
Executive's Disability.
Upon the Executive's death, the Company shall pay the Standard
Termination Payments to the Executive's estate, and any and all death benefits
under the Company's benefit plans shall be paid to the Executive's beneficiary
or beneficiaries as duly designated in writing by the Executive. Upon
termination of the Term for Disability, the Company shall pay to the Executive
the Standard Termination Payments and any and all other employee benefits as may
be provided under the terms of the applicable benefit plans. In
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addition, upon termination of the Executive for death or Disability, the
Executive or the Executive's designated beneficiary or beneficiaries shall be
entitled to receive salary payments, at the annual rate of the Base Salary
(excluding the Deferred Salary), for a period of six (6) months following such
termination and, in the event of termination for Disability, the Executive shall
be entitled to participate in medical, dental, hospitalization and life
insurance coverage and in all other employee plans and programs in which he was
participating on the date of such termination for a period of six (6) months
following such termination.
5.4 Termination Without Cause. In the event that the Company terminates the
Executive's employment under this Agreement without Cause and other than by
reason of his death or Disability or the Executive terminates his employment
hereunder for Good Reason, the Company shall make the Standard Termination
Payments and, so long as the Executive shall not have breached the Executive's
obligations to the Company under Article 6 hereof (without limitation to any
other remedy available to the Company), the Company shall pay the Executive a
severance payment equal to the Specified Multiple times the sum of his Base
Salary and the greater of $25,000 or the Executive's bonus for the immediately
preceding fiscal year. In addition, the Executive shall be entitled to receive
salary payments, at the annual rate of the Base Salary (excluding the Deferred
Salary), and to participate in medical, dental, hospitalization and life
insurance coverage and in all other employee plans and programs in which he was
participating on the date of such termination for a period of twelve (12) months
following such termination.
5.5 Change of Control. In the event of a Change in Control, the Executive
shall be entitled to a lump sum payment of $1,000,000 (in cash or by certified
check), payable within ten (10) days of such Change of Control; provided,
however, such payment shall be reduced by an amount equal to the sum of (A) the
number of shares issuable upon exercise of any then-unexercised Options
multiplied by the positive difference, if any, between (w) the market value of
one share of Common Stock on the date of such Change of Control and (x) the
Exercise Price and (B) the number of shares issued upon exercise of any
previously exercised options multiplied, in each case, by the difference between
(y) the market value of one share of Common Stock on the date of exercise and
(z) the Exercise Price. Market value for these purposes shall be the closing
price on the average of the closing bid and ask prices on the last trading day
prior to the Change of Control or exercise, as the case may be, for which such
prices are available, on the principal national securities exchange or
inter-dealer quotation system on which the Common Stock is then quoted, or if
the Common Stock is not then so quoted, as determined in good faith by the
Board.
5.6 Severance Payment. In the event that the employment of the Executive is
terminated for any reason, the Company shall make a severance payment to the
Executive in an amount based on the gross revenues of the Company in the
immediately preceding fiscal year, stated on the Company's audited financial
statements, as set forth in the following table:
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Amount of Gross Revenues Aggregate Amount
per Fiscal Year of Severance
Less than $7,500,000 -0-
$7,500,001 - $8,000,000 $80,000
$8,000,001 - $8,500,000 $160,000
$8,500,001 - $9,000,000 $240,000
$9,000,001 - $9,500,000 $320,000
$9,500,001 - $10,000,000 $400,000
Such severance payments (together with any payments provided in this
Article 5) shall constitute complete satisfaction of all obligations of the
Company to the Executive pursuant to the Agreement. Upon termination for any
reason, the Executive shall cease to be an employee of the Company for all
purposes, and the Company shall have no obligation to provide the Executive with
any employee benefits or perquisites hereunder (except as provided in this
Article 5). The Executive's rights set out in this Article 5 shall constitute
the Executive's sole and exclusive rights and remedies as a result of the
Executive's actual or constructive termination of employment without Cause.
6. CONFIDENTIALITY AND NON-COMPETE
6.1 Confidentiality. The Executive acknowledges that the Company, its
Subsidiaries, affiliated companies and ventures from time to time (collectively,
including the Company, the "Company Affiliates") own and have developed and
compiled, and will own, develop and compile, certain proprietary techniques and
confidential information which have great value to their business ("Confidential
Information"). Confidential Information includes not only information disclosed
by the Company Affiliates to the Executive, but also information developed or
learned by the Executive during the course or as a result of employment
hereunder, which information the Executive acknowledges is and shall be the sole
and exclusive property of the Company Affiliates. Confidential Information
includes all proprietary information that has or could have commercial value or
other utility in the business in which the Company Affiliates are engaged or
contemplate engaging, and all proprietary information of which the unauthorized
disclosure could be detrimental to the interests of any of the Company
Affiliates, whether or not such information is specifically labelled as
Confidential Information by a Company Affiliate.
The Executive agrees that he shall not, directly or indirectly, use,
make available, sell, disclose or otherwise communicate to any corporation,
partnership, individual or other third party, other than in the course of his
assigned duties and for the benefit of the Company Affiliates, any Confidential
Information, either during the Term or thereafter.
In the event of the Executive's employment with the Company ceases for
any reason, the Executive will not remove from the premises of any of the
Company Affiliates without their prior written consent any records, files,
drawings, documents, equipment, materials or writings received from, created for
or belonging to the Company Affiliates, including those which relate to or
contain Confidential Information, or any copies thereof.
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Upon request or when the Executive's employment with the Company terminates, the
Executive will immediately deliver the same to the Company.
The Executive's obligations under this Section 6.1 shall survive the
termination of this Agreement and the Executive's employment hereunder.
6.2 Proprietary Information. During the Term, the Executive will disclose
to the Company all designs, inventions and business strategies or plans
developed by the Executive during such period which relate directly or
indirectly to the business of the Company Affiliates, including without
limitation any process, operation, product or improvement. The Executive agree
that all of the foregoing are and will be the sole and exclusive property of the
Company and that the Executive will at the request and cost of the Company do
whatever is necessary to secure the rights thereto, by patent, copyright or
otherwise, to the Company.
6.3 Non-Competition. The Executive agrees that, during his employment with
the Company and for a period of twelve (12) months thereafter, the Executive
shall not, directly or indirectly, own, manage, operate, join, control,
participate in, invest in or otherwise be connected or associated with, in any
manner, including as an officer, director, employee, independent contractor,
partner, consultant, advisor, agent, proprietor, trustee or investor, any
Competing Business in the Territory; provided, however, that nothing contained
in this Section 6.3 shall prevent the Executive from owning less than 5% of the
voting stock of a publicly held corporation for investment purposes. For
purposes of this Section 6.3, the term "Competing Business" shall mean a
business engaged in providing health care services or which competes with any
business then being operated by any Company Affiliate. For purposes of this
Section 6.3, the term "Territory" means any fifteen (15) mile radius in which
any Company Affiliate then operates or in which, at the date of termination of
Executive's employment hereunder, any Company Affiliate has taken substantial
steps toward establishing operations. The Executive's obligations under this
Section 6.3 shall survive the termination of this Agreement and the Executive's
employment hereunder.
6.4 No Solicitation. The Executive agrees that, during his employment with
the Company and within twelve (12) months thereafter, the Executive shall not,
directly or indirectly, seek to employ or engage, or assist anyone else to seek
to employ or engage, any person who at any time during the year preceding the
termination of the Executive's employment hereunder was in the employ of any of
the Company Affiliates or was an independent contractor providing material
merchandising, marketing, sales, financial or management consulting services in
connection with the business of any of the Company Affiliates and with whom the
Executive had regular contact; or interfere in any manner in the relationship of
any Company Affiliate with any of its suppliers or independent contractors,
whether or not the relationship between such Company Affiliate and such supplier
or independent contractor was originally established in whole or in part by the
Executive's efforts. The Executive's obligations under this Section 6.4 shall
survive the termination of this Agreement and the Executive's employment
hereunder.
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7. MISCELLANEOUS
7.1 Notices. Any and all notices or other communications required or
permitted to be given under any of the provisions of this Agreement shall be in
writing and shall be deemed to have been duly given and received when delivered
personally or three (3) days after mailing, if mailed by registered or certified
mail, return receipt requested; as to the Executive, at his address as set forth
beneath his signature hereto, and as to the Company, at its principal office at
that time. The Executive may change his mailing address for the purposes of this
Agreement by written notice to the Company as herein provided.
7.2 Authority. This Agreement has been duly authorized on behalf of the
Company by the Board. The Executive represents that he is free to enter into
this Agreement and that his entering into this Agreement does not violate any
obligation that he has to any other person or legal entity.
7.3 Severability. In the event that any provision of this Agreement would
be held to be invalid or unenforceable for any reason unless narrowed by
construction, this Agreement shall be construed as if such invalid or
unenforceable provision had been more narrowly drawn so as not to be invalid or
unenforceable. If, notwithstanding the foregoing, any provision of this
Agreement shall be held to be invalid or unenforceable for any reason, such
invalidity or unenforceability shall attach only to such provision and shall not
affect or render invalid or unenforceable any other provision of this Agreement.
7.4 Entire Agreement. This Agreement sets forth the entire understanding of
the Company and the Executive with respect to the subject matter hereof and
cannot be amended or modified except by a writing signed by both parties.
7.5 Binding Effect. Except as otherwise expressly provided herein, this
Agreement shall be binding upon and inure to the benefit of the parties hereto,
and their respective successors and assigns, heirs and personal representatives.
7.6 Governing Law. This Agreement shall be governed by the laws of the
State of New York without regard to its conflict of laws provisions.
7.7 Arbitration. With respect to any suit, action or proceeding initiated
by a party to this Agreement arising out of, under or in connection with this
Agreement, the parties hereto each hereby submits to the exclusive, final and
binding arbitration of the before the American Arbitration Association of New
York City in accordance with their Commercial Arbitration Rules. Judgment upon
the award rendered by the arbitrator may be entered in
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any court of record of competent jurisdiction in any country, or application may
be made to such court for a judicial acceptance of the award and an order of
enforcement, as the law of such jurisdiction may require or allow. In the event
the Executive is successful in pursuing any claim arising out of this Agreement,
the Company shall pay all of the Executive's attorneys' fees and costs,
including the compensation and expense of the Arbitrator. In all other cases,
the expenses of arbitration will be borne among the parties as determined by the
arbitrator.
7.8 Counterparts. This Agreement may be executed in counterparts which,
taken together, shall constitute a single original document.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
OAK TREE MEDICAL SYSTEMS, INC.
By:___________________________
Name:
Title:
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XXXXXXX XXXXXXXX
Address:
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