EMPLOYMENT AGREEMENT
Exhibit
10.2
THIS
EMPLOYMENT AGREEMENT (“Agreement”) is made as of the 1st
day of
March, 2007, by and between Lab123, Inc., a Delaware corporation, with corporate
offices at 000 Xxxxx Xxxxx, Xxxxx 000, Xxxx Xxxxxx, Xxxxxxxx 00000 (“Company”),
and Xxxx Xxxxxx currently residing at 000 X. Xxxxx Xxxxxx, Xxx Xxxx, Xxxxxxxx
00000 (“Executive”).
W
I T N E S S E T H
WHEREAS,
on the terms and subject to the conditions hereinafter set forth, the Company
desires to employ the Executive and the Executive desires to be employed by
the
Company.
NOW,
THEREFORE, in consideration of the foregoing and of the covenants and agreements
herein contained, and for other good and valuable considerations, the receipt
and sufficiency of which are hereby acknowledged, the parties agree as
follows:
1. Employment
and Duties.
The
Company hereby employs the Executive, and the Executive hereby agrees to be
employed by the Company, as President of the Company. The Executive shall report
to and be under the supervision and direction of the Board of Directors of
the
Company. In her capacity as President of the Company, the Executive shall be
the
chief executive officer of the Company and shall be in charge of the day-to-day
business of the Company, and shall perform such duties and services of an
executive nature as may reasonably be required of her by the Company’s Board of
Directors. The Executive shall devote her full business time and best efforts
to
her duties hereunder and shall timely, fully, diligently, conscientiously and
competently undertake, assume, carry out and perform her duties
hereunder.
During
the Term of this Agreement (hereinafter defined), the Executive agrees she
will
not, without the prior written consent of the Board of Directors of the Company,
render or perform other services for compensation (whether as principal, agent,
consultant, director, shareholder, partner, independent contractor, executive
or
in any other capacity, whether directly or indirectly, through any other person,
partnership, corporation, limited liability company, association or other
entity). The expenditure of reasonable amounts of time on personal passive
or
portfolio investment matters and charitable activities shall not be deemed
a
breach of her Agreement provided that the same do not interfere with the
performance by the Executive of her duties hereunder.
2. Term
of Employment.
(a)
Term.
The
Company's employment of the Executive under this Agreement shall be three years
commencing on the date of this Agreement (“Initial Term”), unless earlier
terminated in accordance with the provisions hereof; provided, however, that
the
Term of this Agreement shall automatically be renewed from year to year
following the expiration of the Initial Term (each a “Renewal Term”) unless
either party gives written notice to the other at least thirty (30) days prior
to the expiration of the Initial Term or a Renewal Term that such party is
terminating this Agreement at the expiration of such Term. The Executive
understands and agrees that the Company has no obligation to renew the Term
of
this Agreement following the expiration of the Initial Term. Accordingly, if
the
Company does not renew the Term of this Agreement following the expiration
of
the Initial Term, such failure to renew shall not be a breach of this Agreement.
However, if the Company does not renew the Term of this Agreement following
the
expiration of the initial Term, the provisions of Section 8(c) hereof shall
be
applicable and, except as provided in Section 8(c), the Executive shall not
be
entitled to any payment of any kind hereunder. For purposes of this Agreement,
the Initial Term and any Renewal Term are collectively referred to as the
“Term”.
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(b)
Termination.
The
Company's employment of the Executive under this Agreement shall be terminated
on the first to occur of the following:
|
(i)
|
The
Executive's death;
|
| (ii) |
The
Executive's Total Disability;
|
| (iii) |
Termination
of the Executive's employment by the Company pursuant to the provisions
of
Section 5 hereof; or
|
| (iv) |
Termination
of the Executive's employment by the Executive pursuant to the provisions
of Section 6 hereof.
|
For
purposes of this Agreement, “Total Disability” of the Executive shall be deemed
to have occurred when, due to any physical or mental condition, the Executive
is
unable to perform her duties hereunder on a full-time basis for a continuous
period (any such period herein being referred to as a “Disability Period”)
aggregating at least ninety (90) days. Where the conclusion of one Disability
Period is followed within six (6) months by the start of another Disability
Period and the disabilities are the same or related, both Disability Periods
shall be aggregated for the purpose of determining the ninety (90) day period
referred to in this Section. Following such ninety (90) day period, the Company
may, at any time thereafter, elect to terminate the Executive’s employment with
the Company.
3. Compensation.
The
Executive shall be entitled to receive the following compensation for services
rendered to the Company under this Agreement:
(a)
Base
Salary.
The
Executive shall receive a salary, (hereinafter referred to as “Base Salary”), at
an initial rate of two hundred thousand dollars ($200,000) per annum, payable
in
accordance with the Company’s customary payroll payment procedures.
(b)
Bonuses.
(i)
Bonuses
Based upon the Performance of the Company.
The
Executive shall be paid a bonus based upon the performance of the Company as
follows:
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(1)
If,
in any fiscal year beginning with fiscal year 2007, or part thereof, during
the
Term of this Agreement, the Company earns a pre-tax profit of one million five
hundred thousand dollars ($1,500,000), the Executive shall be paid a bonus
of
one hundred and fifty thousand dollars ($150,000) (ten percent (10%) of the
Company’s pre-tax profit) in accordance with the provisions hereof.
(2)
If,
in any fiscal year beginning with fiscal year 2007, or part thereof, during
the
Term of this Agreement, the Company earns a pre-tax profit greater than one
million five hundred thousand dollars ($1,500,000) but less than five million
dollars ($5,000,000), then, in addition to the amount payable to the Executive
pursuant to the provisions of Section 3(b)(i)(1), the Executive shall be paid
a
bonus equal to six percent (6%) of the pre-tax profit earned in such fiscal
year, or part thereof, between one million five hundred thousand dollars
($1,500,000) and five million dollars ($5,000,000).
(3)
If,
in any fiscal year beginning with fiscal year 2007 , or part thereof, during
the
Term of this Agreement, the Company earns a pre-tax profit greater than five
million dollars ($5,000,000), then, in addition to the amounts payable to the
Executive pursuant to the provisions of Sections 3(b)(i)(1) and (2), the
Executive shall be paid a bonus equal to four percent (4%) of the pre-tax profit
earned in such fiscal year, or part thereof, in excess of five million dollars
($5,000,000).
(4)
For
purposes of Sections 3(b)(i)(1), (2) and (3), the determination of the Company's
pre-tax profit shall be made in accordance with generally accepted accounting
principles. In case of a dispute as to the amounts of the Company's pre-tax
profit in any fiscal year, or part thereof, Executive shall have the right
to
select an independent auditor to review the Company's books and records, meet
with the Company's independent auditors and jointly resolve any dispute. In
the
event the Executive's auditors and the Company's auditors cannot resolve the
dispute, the Executive's and the Company's auditors shall select an independent
auditor to review and decide the amounts of the Company's pre-tax
profits.
(5)
Any
bonus payable to the Executive pursuant to the provisions of this Section 3(b)
(i) shall be paid no later than the end of the month following the end of the
month in which pre-tax profit for the appropriate fiscal year has been
calculated in accordance with the provisions hereof.
(6)
At
the sole written election of the Executive, any bonus due shall be paid
quarterly, at the end of the month following the close of the quarter in which
the applicable pre-tax profit has been calculated. At the end of the month
following the close of the fiscal year and finalization of the Company's annual
pre-tax profit for the fiscal year in which the Executive has elected to receive
quarterly bonuses, the Company and the Executive shall meet and finalize the
Executive's total annual bonus. If the Executive had received excess bonus
compensation, those sums shall be repaid by the Executive to the Company. If
the
Executive has additional bonus compensation due her based on the annual pre-tax
profit, then the Company shall pay the balance due to the
Executive.
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(ii)
Other
Bonuses.
The
Executive acknowledges that currently the Company does not have any formal
bonus
or similar plan in effect, and the award of any bonuses, other than those set
forth in Section 3(b)(i), are at the discretion of the Company’s Board of
Directors. The Executive shall have a merit review on each anniversary of this
Agreement by the Board of Director of the Company. The awarding of bonuses
or
other merit rewards shall be at the sole discretion of the Board of Directors.
The Executive acknowledges that, other than the bonuses set forth in Section
3(b)(i), no representation or warranty has been made to her that the Company
will ever award any bonuses or institute a bonus or similar type of compensation
plan.
(c)
Options.
The
Executive acknowledges that the Company currently does not have any stock option
plan in effect or specified number of shares of common stock which may be
awarded as options or warrants. The award of any stock options is at the
discretion of the Company’s Board of Directors. The Executive acknowledges that:
(i) no representation or warranty has been made to her that the Company will
ever award any stock options or institute a bonus or similar type of
compensation plan, (ii) she has been advised that any options which the Company
has issued in the past and which it will issue in the future do not qualify,
nor
are they intended to qualify, as Incentive Stock Options under Section 422
of
the Internal Revenue Code of 1986, as amended, and no public market currently
exists for the Company’s options or its common stock and none of the shares
issuable upon exercise of any options will be registered under the Securities
Act of 1933, as amended, or under any applicable state securities laws for
sale
to the public and there currently is no intention to do so.
4. Benefits.
The
Executive shall receive and participate in all benefits provided to other senior
executives of similar position in the Company and in BioSafe Medical
Technologies, Inc., the Company’s affiliate, including medical insurance, which
insurance shall be paid for by the Company (with co-pays and deductibles to
be
paid by the Executive) and coverage effective as of Executive's first day of
employment.. In addition to the foregoing, the Company shall, at its expense,
provide the Executive with the following:
(a)
Expense
Reimbursements.
The
Company shall pay or reimburse the Executive for all reasonable business
expenses (including, but not limited to, cell phone, car allowance, business
entertaining and home office expenses, professional association dues and
continuing education expenses) in accordance with the policies and procedures
of
the Company in effect from time to time.
(b)
Vacations
and Sick Time.
The
Executive shall be entitled to 20 business days’ paid vacation days per each
year of the Term. The vacation days shall accrue at the rate of 5 days on the
last day of each calendar quarter. The Executive shall be entitled to take
sick
days in accordance with the Company’s policy. The Executive acknowledges that,
in accordance with the Company’s policy, the Company will not compensate the
Executive for any vacation or sick days not used, and neither vacation time
nor
sick time, in excess of seven (7) days, not taken in any twelve-month calendar
period does not carry over to any subsequent period but is forever forfeited.
.
The Executive will be entitled to paid Major holidays, as defined by US Labor
law or by the Company.
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5. Termination
of Employment by the Company.
(a)
For
Cause.
The
Company may immediately terminate the Executive's employment hereunder at any
time for Cause in accordance with the provisions of this Section 5(a), or upon
the Total Disability of the Executive in accordance with the provisions of
Section 2(b). For purposes of this Agreement, “Cause” shall mean the occurrence
of any one or more of the following:
(i)
conviction of a felony (through trial or plea) on the part of the
Executive;
(ii)
conviction of the Executive of any crime (be it a felony or otherwise) involving
misuse or misappropriation of money or other property or involving a breach
of
trust;
(iii)
any
act of dishonesty by the Executive that either is intended to or results in
her
substantial and improper personal enrichment at the expense of the Company
or
adversely affects the business or financial condition of the
Company;
(iv)
the
willful commission of acts of misconduct that result in injury to the Company
or
its assets or business;
(v)
the
breach by the Executive of any covenant or agreement under this Agreement and
her failure to cure such breach (if such breach can be cured) within thirty
(30)
days after written notice has been given to the Executive by the
Company;
(vi)
any
failure, neglect or refusal of the Executive to perform any material obligation
under this Agreement (it being agreed that all of the Executives duties under
this Agreement are deemed to be material obligations);
(vii)
any
violation of any statutory or common law duty of loyalty to the
Company;
(viii)
the Executive's habitual intoxication; or
(ix)
the
Executive's drug addiction.
(b) Without
Cause.
The
Company may immediately terminate the Executive’s employment hereunder at any
time for any reason other than Cause upon not less than thirty days prior
notice; provided, however, notwithstanding any other provision herein contained
to the contrary, at any time prior to July 1, 2007, and for any reason or no
reason whatsoever, the Company may terminate the Executive’s employment
hereunder without breaching any provision hereof. In the event of Executive's
termination prior to July 1, 2007, the Company shall pay to the Executive as
additional compensation for a period of twelve months, commencing on the date
of
termination and on the first day of each of the following eleven months the
sum
of $8,333.33, less the amount which the Company may be required to withhold
from
such payments by applicable federal, state or local laws and
regulations.
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(c) Change
in Control.
If, at
any time while this Agreement is in force, the Company is sold or otherwise
experiences a change in control, then she shall immediately vest in all shares
issued to her.
(d) Notice
of Termination.
Any
termination by the Company under either of Sections 5(a) or (b) or (c) shall
be
communicated by a “Notice of Termination” to the Executive. A “Notice of
Termination” from the Company means a written notice that indicates the specific
termination provision in this Agreement relied upon and sets forth the date
of
termination.
6. Termination
of Employment by the Executive.
(a)
Termination
Other Than For Good Reason.
Executive at her discretion and at any time shall be entitled to terminate
her
employment with the Company under this Agreement for other than "Good Reason",
as defined herein, prior to the expiration of the Term upon thirty (30) days'
written notice to the Company.
(b)
Good
Reason.
Executive may at any time terminate her employment for Good Reason. For purposes
of this Agreement, "Good Reason" shall mean, without Executive's written
consent:
(i)
the
assignment to the Executive of duties inconsistent with those of President
of
the Company, or a reduction in such duties;
(ii)
the
breach by the Company of any provision of this Agreement where such breach
has
not been cured within thirty (30) days from the Company’s receipt of written
notice from the Executive to cure such breach; or
(iii)
requiring the Executive to perform, ignore, supervise or otherwise participate
in illegal, unethical or materially misleading acts.
7. Effective
Date of Termination.
The
effective date of termination of the Executive’s employment hereunder shall be
as follows:
(a)
Termination
as the result of Death.
If the
Executive’s employment is terminated
by her death, her date of death shall be the date of termination;
(b)
Termination
as the result of Disability.
If the
Executive’s employment is terminated
in accordance with the provisions of Section 2(b)(ii), the date of the Company’s
Notice of Termination sent following the expiration of the ninety (90) day
period specified in Section 2(b) shall be the date of termination;
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(c)
Termination
for Cause.
If the
Executive’s employment is terminated by the Company for Cause, the date of the
Company’s Notice of Termination shall be the date of termination;
(d)
Other
Terminations.
If the
Executive’s employment is terminated pursuant the provisions of Sections 5(b) or
(c) or 6, the date of termination shall be the date specified in the Notice
of
Termination given in accordance with the provisions of this Agreement. If the
Executive’s employment is terminated pursuant to the provisions of Section
11(a), the date of termination shall be the date of the attempted
assignment.
8. Obligations
and Rights of the Company and the Executive Upon Termination.
(a)
If
termination of this Agreement is by either the Company or the Executive prior
to
July 1, 2007 or thereafter if termination is by the Company for Cause, as result
of the Executive’s Total Disability, death or retirement or if the Executive
terminates the Agreement for other than Good Reason, the only compensation
of
any kind or nature that the Executive shall be entitled to receive following
such termination shall be such compensation earned by the Executive prior to
the
date of termination and which is then unpaid.
(b)
Subsequent to July 1, 2007, if termination is by the Company for any reason
other than Cause or by the Executive for Good Reason, then and only in such
event, commencing with the last day of the month following the month in which
termination of the Executive’s employment with the Company occurs and on the
last day of each month thereafter for eleven (11) consecutive calendar months,
the Executive will be entitled to receive one-twelfth (1/12) of her Base Salary
on the date of termination, less amounts which the Company may be required
to
withhold from such payments by applicable federal, state or local laws and
regulations. For purposes of clarity, it is agreed and understood that
notwithstanding the foregoing provisions of this Section 8(b), the Executive
is
not entitled to any payment pursuant to the provisions of this Section 8(b)
in
the event this Agreement is terminated for Cause or as a as result of the
Executive’s Total Disability, death or retirement.
(c)
If
the Company does not renew the Term of this Agreement following the expiration
of the initial Term and this Agreement has not been earlier terminated by the
Executive or by the Company for Cause or as a result of the Executive’s Total
Disability or death, then, commencing April 1, 2010 and on the first day of
each
succeeding month through and including March 1, 2011, the Company shall pay
to
the Executive as additional compensation, $8,333.33, less amounts which the
Company may be required to withhold from such payments by applicable federal,
state or local laws and regulations.
9. Options.
(a)
Grant
of Options.
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(i)
In
consideration of the Executive's employment with the Company the Company hereby
grants to the Executive non-qualified options to purchase an aggregate of
500,000 shares of the Company's Common Stock, $.001 par value ("Common Stock")
for $.36 per share. Options to purchase an aggregate of 200,000 shares of Common
Stock shall be vested immediately upon execution of this Agreement, and options
to purchase an additional 100,000 shares of Common Stock shall vest on each
of
the following dates: March 1, 2008, March 1, 2009 and March 1, 2010. Upon
vesting, such options may be exercised until the earlier of (i) March 1, 2010,
or (ii) 90 days after termination of the Executive's employment by the Company
for any reason. The Company shall deliver to the Executive a certificate
evidencing the foregoing options.
(ii)
If
this Agreement and the Term thereof is continued for one Renewal Term following
the expiration of the Initial Term, then, on the first day of such Renewal
Term,
the Company shall grant to the Executive options to purchase an additional
one
hundred thousand (100,000) shares of the Company’s Common Stock for a five-year
term. Such options shall be fully vested upon grant and the option exercise
price shall be the fair market value of the Common Stock on the last trading
day
preceding the date of grant.
(ii)
Any
income tax payable by the Executive as a result of the granting of the Company’s
Common Stock to her pursuant to the provisions of this Section shall be the
sole
responsibility of the Executive.
(iii)
The
exercise price and number of shares of Common Stock issuable upon exercise
of
the options granted pursuant to Sections 9(a)(i) and 9(a)(ii) shall be
appropriately adjusted for the effect of stock dividends and stock
splits.
(b)
Securities
Law Compliance.
The
Executive understands that: neither the grant of the options granted under
Section 9(a) (the “Options”) nor the issuance of the shares of Common Stock
underlying such Options (the “Option Shares”) have been registered under the
Securities Act of 1933, as amended (the “Act”) nor the securities laws of any
state, based upon exemptions from such registration requirements for non-public
offerings pursuant to Section 4(2) and other applicable sections and regulations
under the Act and applicable state laws; the Options and the Option Shares
are
or will be “restricted securities”, as that term is defined in Rule 144 of the
Rules and Regulations promulgated under the Act; the Options and the Option
Shares may not be re-sold or otherwise transferred unless they have been first
registered under the Act and all applicable state securities laws, or unless
an
exemption from such registration provisions is available with respect to said
resale or transfer; there is no public market for the Options nor the Option
Shares and there can be no assurance, and it is highly unlikely, that such
a
market will ever develop in the future; the Company is under no obligation,
and
currently has no plans, to register the Options or the Option Shares under
the
Act or any state securities laws, or to take any action to make any exemption
from any such registration provisions available; stop transfer instructions
will
be placed on the records of the Company or with the transfer agent for the
Options and the Option Shares; and it may not be possible to liquidate the
Executive’s investment and she may have to bear the financial risk of an
investment in the Option Shares , and is prepared to hold them, for an
indefinite period of time.
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(c)
Representations
and Warranties of the Executive.
The
Executive represents and warrants that the following are true and correct and
will be true and correct at any time that she is awarded Options or purchases
Option Shares. The Executive represents and warrants if there is any change
in
any of the following representations and warranties at any time immediately
prior to the time that she is awarded Options and at any time immediately prior
to the time that she may purchase Option Shares, she will immediately advise
the
Company in writing:
(i)
The
Executive is acquiring the Option Shares solely for her account and not as
a
nominee or agent, for investment purposes only and not with a view towards
the
resale or distribution of all or any part thereof, and she does not have any
reason to anticipate any change in her circumstances which would cause her
to
sell the Option Shares. The Executive has not offered or sold the Option Shares,
does not have in mind the sale of either the Options or the Option Shares either
currently or after the passage of a fixed or determinable period of time or
upon
the occurrence or non-occurrence of any predetermined event or circumstance,
has
no present or contemplated agreement, undertaking, arrangement, obligation,
indebtedness or commitment provided for or which is likely to compel a
disposition of the Options or the Option Shares, and she is not aware of any
circumstance presently in existence which is likely in the future to promote
or
require a disposition of the Granted Shares or the Purchased
Shares.
(ii)
The
Executive has had a reasonable opportunity to ask questions of and receive
answers from the Chief Executive Officer of BioSafe Medical Technologies, Inc.,
the Company’s affiliate, concerning the Company and its affairs, and all such
questions, if any, have been answered to the full satisfaction of the Executive.
The Executive understands that no United States federal or state agency has
approved, disapproved or recommended the Company’s Common Stock, nor has any
United States federal or state agency passed upon the fairness or suitability
of
an investment in the Option Shares.
(iii)
The
Executive is an “accredited investor” as that term is defined in paragraph (a)
of Rule 501 under the Act. Accordingly, the Executive has such knowledge and
expertise in financial and business matters that she is capable of evaluating
the merits and risks involved in an investment in the Option Shares, which
she
acknowledges are a highly speculative investment involving a high degree of
risk
such that she could lose her entire investment. The Executive is relying upon
either her own expertise or the advice of her advisors with respect to the
tax
or other economic considerations of an investment in the Option Shares and
not
on the advice of the Company or any agent of the Company.
(iv)
The
Executive will not sell or otherwise transfer any of the Options or the Option
Shares, or any interest therein, unless and until such Options or Option Shares
shall have first been registered under the Act and all applicable state
securities laws, or she shall have first delivered to the Company a written
opinion of counsel (which counsel and opinion, in form and substance, shall
be
satisfactory to the Company), to the effect that the proposed sale or transfer
is exempt from the registration provisions of the Act and all applicable state
securities laws, and the Executive agrees to resell such securities only
pursuant to registration under the Act, or pursuant to an available exemption
from registration (and agrees not to engage in hedging transactions with regard
to such securities unless in compliance with the Act).
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(d)
Restrictive
Legends.
Upon
delivery of the Options or the Option Shares, the Company shall issue a
certificate in the name of the Executive evidencing the number of Options or
Option Shares then granted or purchased. The option or stock certificates issued
to the Executive will be endorsed with one or more of the following restrictive
legends, and any other legend required to be placed thereon by applicable state
law:
“The
securities represented by this certificate have not been registered under the
securities act of 1933 (the “Act”) or any state securities law. No transfer or
sale of these securities, or any interest therein, may be made except in
connection with an effective registration statement under the Act or unless
the
issuer has received an opinion of counsel satisfactory to it that such transfer
or sale does not require registration under the act.”
“The
shares represented by this certificate are subject to certain forfeiture and
repurchase rights by the Company and accordingly may not be sold, assigned,
transferred, encumbered or in any manner or way disposed of except in conformity
with the terms and provisions of a written agreement dated March 1, 2007, by
and
between the registered holder of the shares (or the predecessor in interest
to
the shares) and the Company. A copy of such agreement is maintained at the
Company’s principal corporate offices.”
(g)
Piggyback
Sale Rights.
If at
any time, or from time to time, prior to the termination, or expiration of,
the
Term of this Agreement any shares of the Company’s Common Stock are offered for
sale in an initial public offering, the Executive shall have the right to offer
for sale in such public offering, on the same terms and conditions as in such
public offering, such number of shares then owned by the Executive as the lead
underwriter in such offering, or if there is no underwriter, as the Company,
may
allow.
(h)
Special
Tax Election.
If the
Executive intends to file an election under Internal Revenue Code Section 83(b)
within the applicable period to be taxed according to its provisions, the
Executive acknowledges that it is her sole responsibility and not the Company’s
to file a timely election under such section.
10. Covenants
of the Executive.
(a)
Confidentiality.
The
Executive agrees that, during and after her employment hereunder, Executive
will
not, without the prior written consent of the Company, communicate, disclose
or
use for her personal benefit or that of any other person, any of the Company's
trade secrets or other confidential information, including financial
information, sales lists, identity of customers, pricing and other similar
information. The preceding sentence shall not apply to any information that
has
become publicly available through no fault of the Executive or to any
information that the Executive may be required to disclose under any applicable
law or legal process. Further, the Executive agrees that, during the Term of
this Agreement, she shall not, directly or indirectly, remove or retain, without
the express written consent of the Board of Directors of the Company, and upon
termination of this Agreement for any reason the Executive shall return to
the
Company, any Company property, figures, calculations, letters, papers, records,
computer disks, computers, computer print-outs, lists, documents, instruments,
drawings, designs, programs, brochures, sales literature, or any copies or
memoranda thereof, or any information or instruments derived therefrom, or
any
other information of any type or description, however such information might
have been obtained or recorded, arising out of or in any way whatsoever relating
to the business of the Company or obtained as a result of the Executive’s
employment by the Company. The Executive acknowledges that all of the foregoing
are proprietary information and are the exclusive property of the
Company.
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(b)
Covenant
Not to Compete.
The
Executive represents that she desires employment with the Company and that
as a
result of such employment by the Company she will become familiar and possess
valuable and proprietary information and knowledge as to the manner and method
by which the Company renders its services and sells its products. In addition,
the Executive acknowledges she will further become personally acquainted with
the customers doing business with the Company. The Company has a constant
expectation of continuing to provide services and products to its customers,
and
the Executive acknowledges that the Company would suffer great loss and damage
if the Executive should compete with the Company in any manner or way whatsoever
either during or following her employment with the Company. The Executive
further recognizes and acknowledges that it would be difficult, if not
impossible, to compute the amount of any such loss or damage to the Company,
and
that an action at law to compensate the Company for such loss or damage would
be
speculative and, therefore, inadequate for the reasonable protection of the
Company. Accordingly, the Executive acknowledges that the Company may be without
an adequate remedy at law in the event the Executive violates any of the
covenants contained herein. The Executive acknowledges that the Company would
not have employed her without her agreeing to the covenants and conditions
of
this Agreement, all of which are in consideration of her employment and which
she acknowledges and agrees are reasonable and necessary for the protection
of
the Company. Accordingly, the Executive agrees that she will not, during her
employment hereunder and for a period of one (1) year thereafter, whether as
an
officer, employee, director, shareholder or otherwise, directly or
indirectly:
(i)
participate or engage in any manner or way in any business activity which is
in
direct competition with the Company’s business as of the effective date of her
termination;
(ii)
solicit, contact, interfere with or divert to another entity or person any
customer of the Company or any of its affiliates on the date of Executive’s
termination;
(iii)
solicit any person then employed by the Company or any of its affiliates on
the
date of Executive’s termination of employment to terminate such employee’s
employment relationship with the Company or any of its affiliates or otherwise
interfere with the relationship of such employee and the Company or any of
its
affiliates; or
11
(iv)
disparage any of the products, services or officers, directors or employees
of
the Company or any of its affiliates. Further, the officers and directors of
the
Company and any of its affiliates shall not disparage the Executive, either
directly or indirectly and they shall use their best efforts to ensure that
the
Company's and its affiliates' employees shall not disparage the Executive,
either directly or indirectly.
The
foregoing covenant shall not prevent the Executive from owning stock or other
securities of a direct competitor whose securities are publicly traded
consisting of less than one (1%) percent of the value of all of the outstanding
voting stock and voting securities of such corporation; provided, however,
that
notwithstanding the foregoing provisions of this Section 10(b) to the contrary,
if this Agreement is terminated by the Company without Cause, or by the Employee
for Good Reason, then, and only in such event, the foregoing provisions of
this
Section 10, including Sections 10(b)(1) through (4), inclusive, shall not be
applicable from and after the date of termination of this Agreement. Executive
shall not be bound by this paragraph 10 (b) until the one hundred twenty first
day of her employment.
(c)
Acknowledgment.
The
Executive acknowledges that the restrictions set forth in this Section 10 are
essential to the preservation of the Company’s business and proprietary
properties and that the enforcement thereof will not in any manner or way
whatsoever preclude the Executive, in the event of the Executive’s termination
of employment with the Company, from becoming gainfully employed in such manner
and to such extent as to provide a standard of living for herself, the members
of her family and those dependent upon her of at least the sort and fashion
to
which she and they have become accustomed and may expect. The Executive further
acknowledges that the terms and conditions of this Section 10 are reasonable
and
necessary for the protection of the Company and agrees that the restraints
imposed are fair and reasonable as to time and scope and are not
oppressive.
(d)
Injunction
and Severability.
In the
event of a breach or a threat of a breach of the Executive of the provisions
of
this Section 10, the Executive acknowledges and agrees that legal remedies
cannot fully protect the Company’s interests. Accordingly, the Executive agrees
not to challenge or contest the Company requesting the remedy of specific
performance and further agrees that the Company shall be entitled to injunctive
relief, including temporary restraining orders, preliminary injunctions and
permanent injunctions to enforce these provisions, all without being required
to
post any bond. This provision with respect to specific performance and
injunctive relief shall not be deemed to be the exclusive remedy for a breach
of
this Agreement, and shall be in addition to any and all legal and equitable
remedies available to the Company, and shall not, in any manner or way
whatsoever, diminish the Company’s right to claim and recover damages or prevent
the Company from seeking any remedy at law or in equity.
(e)
Independent
Covenants.
The
covenants of the Executive contained in this Section 10 shall each be construed
as an agreement independent of any other provision in this Agreement. The
existence of any claim or cause of action of the Executive against the Company,
whether predicated on this Agreement or otherwise, shall not constitute a
defense to the enforcement by the Company of any of such covenants. Both the
Company and the Executive hereby expressly agree and contract that it is not
the
intention of either party to violate any public policy or statutory or common
law. Accordingly, if any sentence, paragraph, clause or combination of the
same
of this Section 10 is in violation of the law, such sentence, paragraph, clause
or combination of the same shall be void, and the remainder of such paragraph
and this Section 10 shall remain binding on the parties to make the covenants
of
this Section 10 binding only to the extent that it may be lawfully done. In
the
event any part of any covenant of this Section 10 is determined by a court
of
law to be overly broad thereby making the covenant unenforceable, the parties
hereto agree, and it is their desire, that such court shall substitute a
judicially enforceable limitation in its place, and that as so modified the
covenant shall be binding upon the parties as if originally set forth
herein.
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(f)
Duration.
The
obligations of the Executive under this Section 10 shall survive the termination
of this Agreement.
11. Miscellaneous.
(a)
Assignment.
This
Agreement shall not be assigned by the Executive without the prior written
consent of the Company. Any attempted assignment without such written consent
shall be null and void and without legal effect and shall cause the immediate
termination of this Agreement.
(b)
Amendment.
No
provision of this Agreement may be modified, waived or discharged unless such
waiver, modification or discharge is agreed to in writing signed by the parties
hereto.
(c)
Entire
Agreement.
No
agreements or representations, oral or otherwise, expressed or implied with
respect to the subject matter hereof have been made by either party which are
not set forth in this Agreement. This Agreement constitutes the entire and
only
agreement between the Executive and the Company with respect to the subject
matter hereof and which will govern Executive’s employment with the Company.
This Agreement supersedes any prior understandings, agreements or
representations, written or oral, by or between the Executive and the Company
to
the extent they related in any way to the subject matter hereof.
(d)
Governing
Law.
The
validity, interpretation, construction and performance of this Agreement shall
be governed by the laws of the State of Illinois applicable to contracts made
and performed in such state, without regard to any rules or principles of
conflict of laws.
(e)
Headings.
The
captions and headings in this Agreement are intended for convenience only,
are
not part of the provisions hereof and shall have no force or
effect.
(f)
Counterparts.
This
Agreement may be executed in two or more counterparts, each of which shall
be
deemed an original but all of which together will constitute one and the same
instrument, and shall become binding when one or more counterparts have been
signed and delivered to each of the Company and the Executive. In making proof
of this Agreement, it shall not be necessary to produce or account for more
than
one counterpart signed by each party hereto.
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(g)
Notices.
All
notices or other communications required or permitted hereunder shall be in
writing and shall be deemed given, delivered and received: (i) when delivered,
if delivered personally, (ii) upon the first to occur of actual delivery and
four days after mailing, when sent by registered or certified mail, return
receipt requested and postage prepaid, (iii) the next business day after
delivery to a private courier service when delivered to a private courier
service providing documented overnight service, and (iv) on the date of delivery
if delivered by facsimile transmission, receipt confirmed, provided that a
confirmation copy is sent on the next business day by registered or certified
mail, return receipt requested and postage prepaid, in each case addressed
to
the party to whom the notice is to be given at the party’s respective address
set forth above, or to such other address as the recipient party may indicate
by
a notice delivered to the sending party (such change of address notice to be
deemed given, delivered and received only upon actual receipt thereof by the
recipient of such notice).
(h)
Jurisdiction
and Venue.
Any and
all suits for any and every breach of this Agreement shall be instituted and
maintained in any court of competent jurisdiction in Xxxx County, Illinois,
and
the parties hereto consent to, and waive any objection that they may have to,
the jurisdiction and venue of such court.
(i)
Binding
Effect.
This
Agreement shall be binding upon and inure to the benefit of the Company, its
successors and assigns and to the Executive and her heirs, executors,
administrators, legal representatives and permitted assigns.
(j)
Pronouns
and Numbers.
Whenever from the context it appears appropriate, each term stated in either
the
singular or the plural shall include the singular and the plural, and pronouns
stated in either the masculine, the feminine or the neuter gender shall include
the masculine, feminine and neuter gender. The words “and” and “or” shall be
construed either disjunctively or conjunctively, as necessary to bring within
the scope of the provisions hereof any matter which otherwise might be construed
to be outside such scope. “Including” shall mean “including but not limited
to”.
(k)
No
Strict Construction.
Each of
the Company and the Executive has been involved in drafting the provisions
of
this Agreement. Accordingly, language used in this Agreement will be deemed
to
be the language chosen by the parties to express their mutual intent and no
rule
of strict construction will be applied against either party.
(l)
Severability.
If any
provision of this Agreement or any part hereof or application hereof to any
person or circumstance shall be finally determined by a court of competent
jurisdiction to be invalid or unenforceable to any extent, the remainder of
this
Agreement, or the remainder of such provision or the application of such
provision to persons or circumstances other than those as to which it has been
held invalid or unenforceable, shall not be affected thereby and each provision
of this Agreement shall remain in full force and effect to the fullest extent
permitted by law. The parties also agree that, if any portion of this Agreement,
or any part hereof or application hereof, to any person or circumstance shall
be
finally determined by a court of competent jurisdiction to be invalid or
unenforceable to any extent, any court may so modify the objectionable
provision.
14
(m)
Waiver.
No
failure by either party to exercise any of such party's rights hereunder or
to
insist upon strict compliance with respect to any obligation hereunder, and
no
custom or practice of the parties at variance with the terms hereof, shall
constitute a waiver by either party to demand exact compliance with the terms
hereof. Waiver by either party of any particular default by the other party
shall not affect or impair such party's rights in respect to any subsequent
default of the same or a different nature, nor shall any delay or omission
of
either party to exercise any rights arising from any default by the other party
affect or impair such party's rights as to such default or any subsequent
default.
(n)
Representation
of Each Party.
Each of
the Executive and the Company has consulted with an attorney of her and its
own
choosing before signing this Agreement. Each of the parties affirms that such
party has carefully read and fully understands each provision of this Agreement,
has had the opportunity to ask questions of and have it explained by her and
its
attorney.
(o)
Expenses.
Each of
the parties to this Agreement will pay all of their own costs and expenses
incident to the negotiation and preparation of this Agreement, including the
fees, expenses and disbursements of its counsel.
(p)
Attorneys’
Fees and Costs.
In
addition to any other relief awarded, the prevailing party in any action arising
out of this Agreement is entitled to an award of reasonable attorneys’ fees,
costs and expenses incurred by such prevailing party.
IN
WITNESS WHEREOF,
the
Company and the Executive have caused this Employment Agreement to be duly
executed as of the day and year first written above.
| Lab123, INC. | ||||
| By: | /s/ Xxxxx Xxxxxx | |||
|
Xxxxx Xxxxxx, Chairman of the Board |
||||
| /s/ Xxxx Xxxxxx | ||||
|
Xxxx Xxxxxx |
||||
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