AMENDED AND RESTATED EMPLOYMENT AGREEMENT #2 OF THOMAS P. FINN
Exhibit
10.1
AMENDED
AND RESTATED EMPLOYMENT AGREEMENT #2
OF
▇▇▇▇▇▇ ▇. ▇▇▇▇
AMENDED
AND RESTATED EMPLOYMENT AGREEMENT (“Agreement”) dated as of November 13, 2008 by
and between Advance Nanotech, Inc., a Delaware corporation (the "Company"), and
▇▇▇▇▇▇ ▇▇▇▇ (the "Executive").
WHEREAS,
Executive has continuously served as an employee of the Company pursuant to an
Employment Agreement dated as of February 28, 2005 and an Amended and Restated
Employment Agreement dated as of August 13, 2007 (collectively, the “Prior
Agreement”);
WHEREAS,
(i) the relocation of the Company’s headquarters to Montebello, New York gave
the Executive the right under the Prior Agreement to terminate his employment
with the Company for “Good Reason” (as defined therein) and (ii) the issuance of
equity interests in the Company pursuant to the Exchange Agreement dated as of
December 19, 2007 (the “Exchange Agreement”) by and among certain stockholders
of Owlstone Nanotech, Inc. and the Company and the Subscription Agreements (the
“Subscription Agreements”) by and among the Company and certain subscribers to
the Company’s securities gave the Executive the right under the Prior Agreement
to declare that his employment with the Company had been terminated as a result
of a “Change in Control” (as defined therein);
WHEREAS,
Company and Executive desire to amend and restate the Prior Agreement as
provided herein;
NOW,
THEREFORE, in consideration of the mutual covenants herein contained and the
mutual benefits herein provided, the receipt and sufficiency of which is hereby
acknowledged, and intending to be bound thereby and hereby, the Company and
Executive agree to amend, restate and supersede the Prior Agreement as
follows:
1. Representations and
Warranties. The Executive represents and warrants to the
Company that Executive is not bound by any restrictive covenants and has no
prior or other obligations or commitments of any kind that would in any way
prevent, restrict, hinder or interfere with Executive's acceptance of continued
employment or the performance of all duties and services hereunder to the
fullest extent of the Executive's ability and knowledge. The
Executive agrees to indemnify and hold harmless the Company for any liability
the Company may incur as the result of the existence of any such covenants,
obligations or commitments.
2. Term of
Employment. The Company will continue to employ the Executive
and the Executive accepts continued employment by the Company on the terms and
conditions herein contained for a period (the "Employment Period") provided in
paragraph 5.
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3. Duties
and Functions.
(a) (1) The
Executive shall be employed as the Chief Financial Officer of the Company. The
Executive shall report directly to the Chief Executive Officer of the Company
and to the Board of Directors (the “Board”) of the Company.
(2) The
Executive agrees to undertake the duties and responsibilities inherent in the
position of Chief Financial Officer of the Company. The Executive agrees to
abide by the rules, regulations, instructions, personnel practices and policies
of the Company of which the Executive has notice and any change thereof which
may be adopted at any time by the Company.
(b) During
the Employment Period, the Executive will not engage in consulting work or any
trade or business that is a competitor of the Company or to the extent that the
same significantly interferes with the performance of the Executive’s duties
hereunder, it being understood, however, that the Executive will be performing
assignments for, and may be an officer or director of, entities in which the
Company has an equity interest, without additional compensation unless otherwise
specifically agreed. In no event shall it be a violation of this Agreement for
the Executive to (i) serve on corporate, civic or charitable boards or
committees or perform functions for such organizations, (ii) deliver lectures,
fulfill speaking engagements or teach at educational institutions, or (iii)
manage personal investments, so long as such activities do not significantly
interfere with the performance of the Executive's responsibilities to the
Company in accordance with this Agreement. Subject to customary
business travel, the Executive's duties ordinarily will be performed by the
Executive in the course of the Executive's regular presence during normal
working hours on business days Monday through Friday the Company’s principal
executive offices at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, or at such
other location to which the same may be relocated within a 60 mile radius of New
York City.
4. Compensation.
(a) Base
Salary: As compensation for the Executive’s services to the
Company hereunder, during the Executive's employment as Chief Financial Officer
of the Company, the Company agrees to pay the Executive a base salary at the
rate of Two Hundred and Fifty Thousand Dollars ($250,000) per annum (pro rated
for periods of less than an entire calendar year), payable in equal installments
in accordance with the Company's normal payroll schedule but in no event less
often than once per month on substantially the same day each
month. The Company may withhold from any amounts payable under this
Agreement such federal, state, local or other taxes as shall be required to be
withheld pursuant to any applicable law or regulation..
(b) Options/Equity
Grants: Executive shall be eligible to receive stock
options/equity grants in securities of the Company from time to time, which
grants, if any, shall be at the discretion of the Board or its designee
(including, without limitation, the Compensation Committee), provided that the
Board or its designee shall consider the granting of such compensation at least
annually. The terms and conditions governing eligibility for,
entitlement to, and receipt of any options or other form of equity in the
Company shall be governed by the Company’s incentive compensation programs, as
the same may exist in writing from time to time.
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Unless
otherwise agreed in writing, such options, and the shares underlying such
options, are not registered under federal, state or other securities laws, and
shall be “restricted” within the meaning of applicable securities laws, and
legended accordingly. The Company shall have no obligation to
register such options, and shall have no obligation to register the shares
underlying such options; provided, that the
Executive shall have registration rights with respect to the shares underlying
such options which are substantially the same as the registration rights of any
other Executive or director of the Company in respect of the Company’s shares.
In addition to such other stock options/equity grants at the discretion of the
Board or its designee, the Company shall grant to the Executive an option to
purchase 350,000 shares of the common stock in the Company for $0.25 per share,
such option to be fully vested as of the date hereof and to provide for cashless
exercise. Additionally, the Company shall issue to the Executive 650,000
restricted common stock shares, such restricted shares to be fully vested with
respect to 406,250 shares as of the date hereof and to become vested with
respect to 81,250 of the remaining 243,750 shares on each of February 13, May 13
and August 13, 2009.
(c) Other
Expenses: In addition to the compensation provided for above,
the Company agrees to pay or to reimburse the Executive in timely fashion for
all reasonable, ordinary and necessary, properly vouchered, client-related
business or entertainment expenses incurred in the performance of the
Executive’s services hereunder in accordance with Company policy in effect from
time to time, provided, however, that the amount available to the Executive for
such travel, entertainment and other expenses may require advance approval by
President or Chief Executive Officer of the Company or such officer’s
designee(s) in accordance with the Company’s reimbursement policies, as the same
may be established by the Company’s Board of Directors from time to
time. The Executive shall submit reasonable substantiation in the
form of vouchers and receipts for all expenses for which reimbursement is
sought.
(d) Commuting: The
Company will pay the Executive an additional Five Hundred Dollars ($500) per
month, in arrears, as a non-accountable reimbursement for commuting
expenses.
(e) Vacation: The
Executive shall be allowed up to the greater of Four (4) weeks of paid vacation
during each calendar year or such greater amount of paid vacation as is
generally permitted by the Company to its senior executives, with no carry-over
of accrued vacation from year to year.
(f) Medical
and Dental Insurance:
(i) As
promptly as practicable and, in any event, within 45 days of the date of this
Agreement, the Company, at its expense, subject to availability, shall
establish, and shall thereafter maintain insurance plans to provide the
Executive and the Executive’s spouse and the Executive’s children of age 25 or
younger with medical (including such customary items as preventive care,
diagnostic services, hospital care, physician charges, emergency care,
maternity, infertility/sterilization, organ transplants, extended care services,
mental health and substance abuse, miscellaneous items and prescription drugs)
and dental insurance.
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Subject
to availability, it is contemplated that the medical insurance shall be on a
Preferred Provider Organization (PPO) basis, with a small annual deductible and
payment of 100% of the allowed benefit amount after payment of a small copay
(approximately $25-$50 in most cases) for in-network matters, and a small annual
deductible and payment of approximately 60-80% of the allowed benefit amount for
out-of-network matters, with no requirement to select a primary care physician
or obtain a referral to see a specialist. Notwithstanding the
foregoing, coverage shall be subject to customary required physicals to the
extent required by the plan provider and to customary determinations of
insurability by providers. Subject to availability, it is
contemplated that the dental insurance shall be on a Passive Preferred Provider
Organization basis, with a small annual deductible, with no office visit copay
and an annual benefit maximum of $2000 or less, with insurance reimbursements
ranging up to approximately 100% for preventive, up to approximately 80% for
basic procedures, and up to approximately 50% for major
procedures. Furthermore, in no event during the term of this
Agreement shall the Company be required to pay premiums per month for such
medical and dental coverage of the Executive and the Executive’s family group in
excess of One Hundred Fifty Percent (150%) of the premiums paid by the Company
at the inception of such coverage pursuant to this Agreement. By way
of example, if the Company paid One Dollar ($1.00) in premiums at the outset, it
would not be obligated to pay more than One Dollar and Fifty Cents ($1.50) in
premiums per month during this term of this Agreement.
(ii) During
any period from the commencement date of the term of employment under this
Agreement in which the medical and dental plans have not yet been established or
are not being maintained by the Company, the Company shall reimburse the
Executive for the monthly premiums paid by the Executive for comparable
coverage, up to $2500 per month and no more.
(h) Other
Company Benefits: In addition to the Executive’s compensation
provided by the foregoing, the Executive shall be entitled to participate in the
other benefit programs, if any, available generally to executives of the Company
generally pursuant to Company programs, including, by way of illustration,
personal leave, paid holidays, sick leave, bonus, profit-sharing, stock option
plans, retirement, 401K, disability, dental, vision, group sickness, accident,
life or health insurance programs of the Company which may now or, if not
terminated, shall hereafter be in effect, or in any other or additional such
programs which may be established by the Company, as and to the extent any such
programs are or may from time to time be in effect, as determined by the Company
and the terms hereof, subject to the applicable
terms and conditions of the benefit plans in effect at that time.
5. Employment
Period; Termination.
(a) Commencement
of Employment. The Executive's
employment commenced on February 28, 2005 and has continued under the
Prior Agreement unabated until the date hereof.
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(b) Employment
Period. The Employment
Period under this Agreement shall commence on the date hereof and shall continue
until terminated upon the earlier to occur of the following
events: (i) the close of business on the First (1st)
anniversary of the date hereof (the “Initial Term”) or (ii) the death or
permanent disability (as defined in Paragraph 5 (h)) of the Executive, provided, however, that, on the
First (1st)
anniversary of the date hereof, and on every subsequent annual anniversary, and
unless either party has given the other party written notice of termination at
least one year prior to such anniversary date, the term of this Agreement and
the Employment Period shall be renewed for a term ending one (1) year subsequent
to such date, unless sooner terminated as provided herein (the “Renewal
Term”). The Initial Term plus any Renewal Terms shall be included in
the “Employment Period.”
(c) Termination
By Executive Without Good Reason. Notwithstanding
the provisions of paragraphs 5(a) and (b) above, the Executive may terminate the
employment relationship at any time pursuant to this paragraph 5(c) for any
reason or no reason by giving the Company written notice at least one year prior
to the effective date of termination. The Company, at its election, may (i)
require Executive to continue to perform the Executive’s duties hereunder for
the full one year notice period, or (ii) terminate Executive’s employment at any
time during such one year notice period. An election by the Company
to terminate Executive’s employment at any time during such one year notice
period shall not be deemed to be a termination of Executive’s employment by the
Company without Cause or a termination of Executive’s employment by the Company
for Cause, but shall be treated as a Termination by Executive Without Good
Reason. If the Executive's employment is terminated by the Company
pursuant to this paragraph 5(c) before the one year notice period has expired
without cause, the Executive shall continue to receive the Executive’s base
salary and bonus, and the Company shall continue medical and dental benefits for
the Executive and the Executive’s family, by paying the premium for health
insurance continuation coverage under COBRA for the Executive and the
Executive’s eligible family to the extent the Executive elects COBRA coverage
(or continue to contribute the employer portion of the premium normally paid by
the Company for its current employees), for a period of time (the “Severance
Period”) which shall be determined as set forth in the next sentence. The
Severance Period under those circumstances shall consist of the unexpired
balance of the one year notice period pursuant to this paragraph 5(c). The sum, if any, payable
to the Executive in respect of the Severance Period shall be payable in equal
monthly installments on the Fifteenth (15th) day of
each month in the Severance Period. All other compensation and
benefits paid by the Company to the Executive shall cease upon the Executive’s
last day of employment, except such benefits as may be required to be extended
under applicable state or Federal law. The Executive acknowledges and agrees
that the non-compete restrictions set forth in Section 7 of this Employment
Agreement will remain in full force and effect for the twelve (12) month period
after the termination of the Executive’s employment. Furthermore, the
obligations imposed on Executive with respect to confidentiality, non-disclosure
and assignment of rights to inventions or developments in this Agreement or any
other agreement executed by the parties shall continue, notwithstanding the
termination of the employment relationship between the parties.
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The
salary, bonus (if any) and health insurance benefits to be provided under this
paragraph 5(c) are sometimes hereinafter referred to as "Termination
Compensation." The Executive shall not be entitled to any Termination
Compensation pursuant to this paragraph 5(c) unless the Executive executes and
delivers to the Company after a notice of termination a release in form and
substance reasonably satisfactory to the Company by which the Executive releases
the Company from any obligations and liabilities of any type whatsoever under
this Agreement, except for the Company's obligations with respect to the
Termination Compensation, which release shall not affect the Executive’s right
to indemnification, if any, for actions taken within the scope of the
Executive’s employment or the Executive’s rights in respect of the Executive’s
vested stock options, if any. The parties hereto acknowledge that the
Termination Compensation to be provided under this paragraph 5(c) is to be
provided in consideration for the above-specified release. The Executive will
not be entitled to and shall not receive any other compensation or benefits of
any type following the effective date of termination, except such benefits as
may be required to be extended under applicable state or Federal
law.
(d) Termination
by Executive for “Good Reason”. Subject to the
provisions outlined below, at any time after the date Executive commences
employment under this Agreement, upon thirty (30) days’ prior written notice to
the Company of the Executive’s intent to terminate the Agreement, Executive
shall have the right to terminate the Executive’s employment under this
Agreement for “Good Reason” (as defined below). For purposes of this
Agreement, “Good Reason” is defined as any one of the following: (i) Company’s
material breach of this Agreement; or (ii) relocation of the Company’s
headquarters and/or Executive’s regular work address to a location which is more
than Sixty (60) miles from the Borough of Manhattan, New York City, without
Executive’s prior written consent; provided,
however, that it shall not constitute Good Reason unless Executive shall
have provided the Company with written notice of its alleged actions
constituting Good Reason (which notice shall specify in reasonable detail the
particulars of such Good Reason) and Company has not cured any such alleged Good
Reason or substantially commenced its effort to cure such breach within Seven
(7) days of Company’s receipt of such written notice and thereafter continues to
pursue such cure with reasonable diligence. A termination for Good Reason
shall be treated for all severance purposes as a Termination by the Company
“Without Cause,” and Executive shall entitled to receive all of the payments and
benefits identified in paragraph 5(f) on the terms and conditions set forth in
paragraph 5(f).
(e) Termination
By Company For Cause. If the
Executive's employment is terminated for “cause," the Executive will not be
entitled to and shall not receive any compensation or benefits of any type
following the effective date of termination, except such benefits as may be
required to be extended under applicable state or Federal law. As used in this
Agreement, the term "cause" shall include but not necessarily be limited to (i)
conviction of a felony or a crime involving moral turpitude; (ii)
engagement in conduct which has the effect, or might reasonably be expected to
have the effect of bringing disrepute to the Company’s reputation or hold the
Company or the Executive up to public ridicule; (iii) fraud on or
misappropriation of any funds or property of the Company, any affiliate,
customer or vendor; (iv) willful violation of any securities law, rule or
regulation (other than minor traffic violations or similar offenses); (v)
personal dishonesty, or breach of fiduciary duty which involves personal profit;
(vi) gross incompetence in the performance of the Executive’s duties under this
Agreement; (vii) willful misconduct in connection with the Executive’s duties;
(viii) habitual absenteeism or inattention to the Executive’s duties; (ix)
chronic use of alcohol, drugs or other similar substances (other than pursuant
to medical prescriptions and under doctors’ supervision for treatment of
legitimate illnesses or conditions) which affects the Executive’s work
performance;
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(x)
willful violation of any Company rule, regulation, procedure or policy which
has, or may reasonably be expected to have, a material adverse effect on the
Company; (xi) engaging in behavior that would constitute grounds for liability
for harassment (as proscribed by the U.S. Equal Employment Opportunity
Commission Guidelines or any other applicable state or local regulatory body) or
other egregious conduct that violates laws governing the workplace; or (xii)
material breach of any material provision of any employment, non-disclosure,
non-competition, non-solicitation or other similar agreement executed by the
Executive for the benefit of the Company (including, without limitation, such
provisions within this Agreement) or of any material Company policy, all as
determined by the Board, which determination will be
conclusive. Notwithstanding anything to the contrary, employment may
not be terminated for “cause” in the event that the Executive becomes
permanently disabled as set forth in paragraph 5(h) or dies. Anything
herein to the contrary notwithstanding, the Company shall give the Executive
written notice prior to terminating the Executive's employment for “cause” under
any circumstance in which the conduct constituting “cause” is reasonably open to
cure (for instance, by way of illustration, where the “cause” does not involve a
violation of trust or otherwise adversely affect the relationship between the
Executive and the Company on a going-forward basis or involve commission of an
act, such as a felony, or an unauthorized disclosure of confidential material,
or an act which may constitute illegal harassment under laws governing the
workplace, which can’t be undone), setting forth in reasonable detail the nature
of any alleged breach and the conduct required to cure such
breach. If, and only if, the nature of the breach is such that the
breach is reasonably open to cure, then the Executive shall have fourteen (14)
days from the giving of such notice within which to cure.
The
Executive acknowledges and agrees that the non-compete restrictions set forth in
Section 7 of this Employment Agreement will remain in full force and effect for
the Twelve (12) month period subsequent to the Executive’s termination for
cause. Furthermore, the obligations imposed on Executive with respect
to confidentiality, non-disclosure and assignment of rights to inventions or
developments in this Agreement or any other agreement executed by the parties
shall continue, notwithstanding the termination of the employment relationship
between the parties.
(f) Termination
By Company Without Cause. The Company shall
retain the right to terminate the Executive without cause or prior written
notice, although the Company may give notice pursuant to this paragraph 5(f) in
its sole discretion. If the Executive's employment is terminated by
the Company without cause pursuant to this paragraph 5(f), the Executive shall
continue to receive the Executive’s base salary and bonus, and the Company shall
continue medical and dental benefits for the Executive and the Executive’s
family, by paying the premium for health insurance continuation coverage under
COBRA for the Executive and the Executive’s eligible family to the extent the
Executive elects COBRA coverage (or continue to contribute the employer portion
of the premium normally paid by the Company for its current employees), for a
Severance Period which shall be determined as set forth in the next
sentence. The Severance Period shall consist of the lesser of one
year from the earlier to occur of the date (i) notice of termination is given
pursuant to this paragraph 5(f) or (ii) the date on which employment actually
terminates pursuant to this paragraph 5(f).
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The
Executive acknowledges and agrees that the non-compete restrictions set forth in
Section 7 of this Employment Agreement will remain in full force and effect for
the greater of the Severance Period or the Twelve (12) month period subsequent
to the Executive’s termination. The sum, if any, payable to the
Executive in respect of the Severance Period shall be payable in equal monthly
installments on the Fifteenth (15th) day of
each month in the Severance Period. Furthermore, the obligations
imposed on Executive with respect to confidentiality, non-disclosure and
assignment of rights to inventions or developments in this Agreement or any
other agreement executed by the parties shall continue, notwithstanding the
termination of the employment relationship between the parties.
The
salary, bonus (if any) and health insurance benefits to be provided under this
paragraph 5(f) are sometimes hereinafter referred to as "Termination
Compensation." The Executive shall not be entitled to any Termination
Compensation unless the Executive executes and delivers to the Company after a
notice of termination a release in form and substance reasonably satisfactory to
the Company by which the Executive releases the Company from any obligations and
liabilities of any type whatsoever under this Agreement, except for the
Company's obligations with respect to the Termination Compensation, which
release shall not affect the Executive’s right to indemnification, if any, for
actions taken within the scope of the Executive’s employment or the Executive’s
rights in respect of the Executive’s vested stock options, if
any. The parties hereto acknowledge that the Termination Compensation
to be provided under this paragraph 5(f) is to be provided in consideration for
the above-specified release. The Executive will not be entitled to and shall not
receive any other compensation or benefits of any type following the effective
date of termination, except such benefits as may be required to be extended
under applicable state or Federal law.
(g) Termination
By Virtue of A Change In Control. The Executive may elect in
writing to declare that he has been terminated as a result of a Change in
Control (as hereafter defined), at which time the Executive shall be entitled
to: (i) a lump sum severance payment equal to his base salary earned over the
preceding twelve-month period; and (ii) a sum sufficient to pay for the
continuation of his medical and dental insurance with all of his then current
benefits for a like twelve-month period. For the purpose of this
provision, the term “Change in Control” includes: (i) a buy-out of the Company
whereby more than 50% in the aggregate of the ownership interests of the Company
becomes beneficially owned by persons not now holding an ownership interest;
(ii) the liquidation or dissolution of the Company; or (iii) the sale or other
disposition of all or substantially all of the Company’s assets.
(h) Termination
for Executive’s Permanent Disability. To the extent
permissible under applicable law, in the event the Executive becomes permanently
disabled during employment with the Company, the Company may terminate this
Agreement by giving thirty (30) days notice to the Executive of its intent to
terminate, and unless the Executive resumes performance of the duties set forth
in Paragraph 3 within five (5) days of the date of the notice and continues
performance for the remainder of the notice period, this Agreement shall
terminate at the end of the thirty (30) day period. "Permanently
disabled" for the purposes of this Agreement means the inability, due to
physical or mental ill health, to perform the essential functions of Executive's
job, with a reasonable accommodation, for ninety (90) days during any one
employment year irrespective of whether such days are consecutive. In
the event of any dispute under this paragraph 5(h), the Executive shall submit
to a physical examination by a licensed physician mutually satisfactory to the
Company and the Executive, the cost of such examination to be paid by the
Company, and the determination of such physician shall be
determinative.
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If the
Executive's employment is terminated by the Company for Executive’s permanent
disability in accordance with this section, the Executive shall continue to
receive the Executive’s base salary and bonus, and the Company shall continue
medical and dental benefits for the Executive and the Executive’s family, by
paying the premium for health insurance continuation coverage under COBRA for
the Executive and the Executive’s eligible family to the extent the Executive
elects COBRA coverage (or continue to contribute the employer portion of the
premium normally paid by the Company for its current employees), for the
applicable Severance Period. The Severance Period shall consist of
one year from the date on which employment actually terminates pursuant to this
paragraph 5(h). Notwithstanding the foregoing, the Executive shall only become
eligible for a Severance Period if the Executive is terminated for permanent
disability in accordance with this paragraph 5(h) at any time after Twelve (12)
months from the date the Executive commenced employment under this
Agreement. The Executive acknowledges and agrees that the non-compete
restrictions set forth in Section 7 of this Employment Agreement will remain in
full force and effect for the Severance Period. The sum, if any,
payable to the Executive in respect of the Severance Period shall be payable in
equal monthly installments on the Fifteenth (15th) day of
each month in the Severance Period. Furthermore, the obligations
imposed on Executive with respect to confidentiality, non-disclosure and
assignment of rights to inventions or developments in this Agreement or any
other agreement executed by the parties shall continue, notwithstanding the
termination of the employment relationship between the parties.
The
salary, bonus (if any) and health insurance benefits to be provided under this
Section 5(h) are sometimes hereinafter referred to as "Termination
Compensation." The Executive shall not be entitled to any Termination
Compensation unless the Executive executes and delivers to the Company after a
notice of termination a release in form and substance reasonably satisfactory to
the Company by which the Executive releases the Company from any obligations and
liabilities of any type whatsoever under this Agreement, except for the
Company's obligations with respect to the Termination Compensation, which
release shall not affect the Executive’s right to indemnification, if any, for
actions taken within the scope of the Executive’s employment or the Executive’s
rights in respect of the Executive’s vested stock options, if
any. The parties hereto acknowledge that the Termination Compensation
to be provided under this Section 5(h) is to be provided in consideration for
the above-specified release. The Executive will not be entitled to and shall not
receive any other compensation or benefits of any type following the effective
date of termination, except such benefits as may be required to be extended
under applicable state or Federal law.
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(i) Termination
Due To Executive’s Death. This Agreement
will terminate immediately upon the Executive's death and the Company shall not
have any further liability or obligation to the Executive, the Executive’s
executors, heirs, assigns or any other person claiming under or through the
Executive’s estate, except as set forth in this paragraph 5(i).
The
Company shall pay any accrued but unpaid salary or bonuses through the date of
termination to Executive’s estate. If the Executive's employment is
terminated by the Company for Executive’s death in accordance with this section,
the Executive’s estate shall continue to receive the Executive’s base salary and
bonus, and the Company shall continue medical and dental benefits for the
Executive’s family, by paying the premium for health insurance continuation
coverage under COBRA for the Executive’s eligible family to the extent the
Executive’s estate elects COBRA coverage (or continue to contribute the employer
portion of the premium normally paid by the Company for its current employees),
for the Severance Period. The Severance Period shall consist of one
year from the date on which employment actually terminates pursuant to this
paragraph 5(i). Notwithstanding the foregoing, the Executive’s estate and the
Executive’s family shall only become eligible for the compensation and benefits
of a Severance Period if the Executive is terminated for death in accordance
with this Section at any time after Twelve (12) months from the date the
Executive commenced employment under this Agreement. The sum, if any, payable to
the Executive’s estate in respect of the Severance Period shall be payable in
equal monthly installments on the Fifteenth (15th) day of
each month in the Severance Period. Furthermore, the obligations
imposed on Executive with respect to assignment of rights to inventions or
developments in this Agreement or any other agreement executed by the parties
shall continue, notwithstanding the termination of the employment relationship
between the parties.
The
salary, bonus (if any) and health insurance benefits to be provided under this
paragraph 5(i) are sometimes hereinafter referred to as "Termination
Compensation." The Executive’s estate and the Executive’s family
shall not be entitled to any Termination Compensation unless the Executive’s
estate executes and delivers to the Company after a notice of termination a
release in form and substance reasonably satisfactory to the Company by which
the Executive’s estate releases the Company from any obligations and liabilities
of any type whatsoever under this Agreement, except for the Company's
obligations with respect to the Termination Compensation, which release shall
not affect the Executive’s estate’s right to indemnification, if any, for
actions taken within the scope of the Executive’s employment or the Executive’s
estate’s rights in respect of the Executive’s vested Restricted
Stock. The parties hereto acknowledge that the Termination
Compensation to be provided under this paragraph 5(i) is to be provided in
consideration for the above-specified release. The Executive’s estate and the
Executive’s family will not be entitled to and shall not receive any other
compensation or benefits of any type following the effective date of
termination, except such benefits as may be required to be extended under
applicable state or Federal law.
(j) Termination
of Employment; Expiration of the Agreement.
(1) At
any time after notice to terminate this Agreement has been served or received by
the Company, the Company, without being deemed in breach of this Agreement or
being deemed to be taken steps which would constitute grounds for a different
kind of termination under this Agreement, may require the Executive to do the
following during the applicable notice period concluding on the effective date
of termination of employment under this Agreement:
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(i) work
in a capacity consistent with the Executive’s then applicable position and
status other than that in which the Executive is employed under this Agreement
but without affecting the Executive’s fixed salary, including benefits;
and/or
(ii) remain
away from work and, although the Executive will continue to receive the
Executive’s salary and benefits provided for under this Agreement during such
period, and the Company will not be obliged to provide the Executive with any
work although the Company may, in its absolute discretion, assign to the
Executive during this period, from time to time, such appropriate tasks or
projects as may be carried out by the Executive away from the Company’s
offices.
(2) Upon
termination of the Executive’s employment under this Agreement, the Executive
shall do the following:
(i) forthwith
surrender to the Company, in good condition and working order (ordinary wear and
tear excepted), all Company property in the Executive’s possession including,
without limitation, all books, papers and other documents (of whatever nature
and in whatever media) belonging to the Company or its subsidiary or associated
company or relating to the business of the Company or its subsidiary or
associated companies;
(ii) if
the Executive is a director of the Company or of any subsidiary or associated
company, or if the Executive is an officer of any subsidiary or any associated
company, and is so requested by the Company, resign as an officer or director,
as the case may be, within forty-eight (48) hours of being so requested and,
should the Executive fail to do so within forty-eight (48) hours of being so
requested, the Executive irrevocably authorizes the Company to appoint an agent
in the Executive’s name and on the Executive’s behalf to execute and deliver any
documents and to take any and all actions reasonably deemed by the Company to be
necessary or appropriate to give effect to such resignation(s) by the Executive;
and
(iii) immediately
repay all outstanding debts or loans due to the Company and/or any subsidiary or
associated company, the Company being expressly authorized, for purposes of
clarity, to deduct the same from any wages or other payment due or which may
become due to the Executive a sum in repayment of all or any part of any such
debts or loans.
(3) Termination
of this Agreement as a consequence of the expiration of the Employment Period
(whether at the end of the initial term or any renewal term) shall not
constitute a termination by the Executive or by the Company, with or without
cause, and Executive shall not be entitled to severance or other continuation
benefits whatsoever (other than as may be required by law) where the Agreement
expires by its own terms. If the Agreement expires at the end of the Initial
Term or any Renewal Term after proper advance notice by either party of the
Company’s or the Executive’s intent not to renew, the Agreement shall expire
and Executive shall not be entitled to any Termination Compensation
or severance of any kind, except as required by law.
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6. Company
Property. All programs, files, correspondence, memoranda,
notes, records, reports, documents, software, programs, promotional materials,
and other property of the Company or any of its subsidiaries (“Company
property”), including all copies, in whatever media the same may be prepared or
retained, which come into Executive’s possession by, through or in the course of
Executive’s employment, regardless of the source and whether created by
Executive, are the sole and exclusive property of the Company or the applicable
subsidiary. Executive agrees and covenants that Executive shall not
remove or copy any such programs, files, correspondence, memoranda, notes,
records, reports, documents, software, programs, promotional materials, and
other Company property, including all copies, in whatever media the same may be
prepared or retained, or any of the information contained therein or otherwise
pertaining to the business of the Company or any of its subsidiaries without the
express written consent of the Company, who in all events shall be considered to
be the owner and possessor of all such property. Executive covenants
and agrees that Executive shall in no way utilize any such information in
Executive’s possession for the gain or advantage of Executive and/or to the
detriment of the Company or any of its subsidiaries. Upon termination
or lapse of this Employment Agreement, or at such earlier date as the Company
may request, in any case upon written notice to the Executive, Executive
immediately shall deliver to the Company all such programs, files,
correspondence, memoranda, notes, records, reports, documents, software,
programs, promotional materials, and other Company property, including all
copies, in whatever media the same may be prepared or retained. Notwithstanding
the foregoing, the Executive may keep, for Executive’s reference, a copy of all
memoranda, notes and documents prepared by Executive.
7. Non-Competition.
(a) The
Executive agrees and acknowledges that, in connection with the Executive’s
employment with the Company, the Executive will be provided with access to and
become familiar with confidential and proprietary information and trade secrets
belonging to the Company and its subsidiaries. Executive further
acknowledges and agrees that, given the nature of this information and trade
secrets, it is likely that such information and trade secrets would inevitably
be used or revealed, either directly or indirectly, in any subsequent employment
with a competitor of the Company or any of its subsidiaries in any position
comparable to the position the Executive holds with the Company under this
Agreement. Accordingly, in consideration of the Executive’s
employment with the Company pursuant to this Agreement, and other good and
valuable consideration, the receipt of which is hereby acknowledged, Executive
agrees that, while the Executive is in the employ of the Company and for a
period equal to the greater of the Severance Period or Twelve (12) Months after
the termination of the Executive’s employment, except with the prior written
agreement of the Company (not to be unreasonably withheld) the Executive shall
not, either on the Executive’s own behalf or on behalf of any third party,
except on behalf of the Company or any affiliate of the Company, directly or
indirectly:
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(1) Other
than through the Executive’s ownership of stock of the Company, if at all,
directly or indirectly, own, manage, operate, join, control, finance or
participate in the ownership, management, operation, control, or financing of,
or be connected as a proprietor, partner, stockholder, officer, director,
principal, agent, representative, joint venturer, investor, lender, consultant
or otherwise with, or use or permit the Executive’s name to be used in
connection with, any Business. For purposes of this Agreement, the term
“Business” shall include any business or enterprise engaged directly or
indirectly in the acquisition, licensing, development, manufacturing, marketing
and distribution of microelectromechanical systems, nanotechnology, products or
services incorporating or utilizing the same or products or services resulting
from collaborations of the Company or any of its subsidiaries with Universities
and research institutions to develop products or services incorporating or
utilizing microelectromechanical systems or nanotechnology, and any other
business engaged in by the Company or any of its subsidiaries that Executive is
or has been directly involved with at any time during the Twelve (12) month
period leading up to the end of the Employment Term. Notwithstanding the
foregoing, the Executive may perform services for a competitive business if both
of the following conditions are fulfilled: (i) such competitive
business is also engaged in other lines of business and (ii) Executive's
services are restricted to employment in such other lines of
business. It is recognized by the Executive and the Company that the
Business is and is expected to continue to be conducted throughout the United
States and the world, and that more narrow geographical limitations of any
nature on this non-competition covenant (and the non-solicitation provisions set
forth in clauses (2) and (3) below) are therefore not
appropriate. The foregoing restriction shall not be construed to
prohibit the ownership by Executive as a passive investment of not more than One
percent (1%) percent of any class of securities of any corporation which is
engaged in any Business having a class of securities registered pursuant to the
Securities Exchange Act of 1934, as amended.
(2) Attempt
in any manner to solicit from a current client or customer of the Company or any
of its subsidiaries at the time of the Executive’s termination, business of the
type performed by the Company or any of its subsidiaries or to persuade any
client of the Company or any of its subsidiaries to cease to do business or
change the nature of the business or to reduce the amount of business which any
such client has customarily done or actively contemplates doing with the Company
or any of its subsidiaries; or
(3) Recruit,
solicit or induce, or attempt to induce, any person or entity which, at the time
of the termination of the Executive’s employment or at any time during the
Twelve (12) month period prior to such termination was an employee of the
Company or its affiliates, to terminate such employee’s employment with, or
otherwise cease such employee’s relationship with the Company or its
affiliates. As used in this Agreement, an affiliate of the Company is
any person or entity that, directly or indirectly, through one or more
intermediaries, controls, or is controlled by, or is under common control with,
the Company.
-13-
(b) The
parties agree that the relevant public policy aspects of covenants not to
compete have been discussed, and that every effort has been made to limit the
restrictions placed upon the Executive to those that are reasonable and
necessary to protect the Company's legitimate interests. Executive
acknowledges that, based upon the Executive’s education, experience, and
training, this non-compete provision will not prevent the Executive from earning
a livelihood and supporting himself and the Executive’s family during the
relevant time period.
(c) If
any restriction set forth in Section 7 is found by any court of competent
jurisdiction to be unenforceable because it extends for too long a period of
time or over too great a range of activities or geographic area, it shall be
interpreted to extend over the maximum period of time, range of activities or
geographic areas as to which it may be enforceable.
(d) The
restrictions contained in Section 7 are necessary for the protection of the
business and goodwill of the Company and/or its affiliates and are considered by
the Executive to be reasonable for such purposes. The Executive
agrees that any material breach of Section 7 will cause the Company and/or its
affiliates substantial and irrevocable damage and therefore, in the event of any
such breach, in addition to such other remedies which may be available, the
Company shall have the right to seek specific performance and injunctive
relief.
(e) The
provisions of Section 7 shall survive termination or expiration of this
Agreement.
(f) The
existence of a claim, charge, or cause of action by Executive against the
Company shall not constitute a defense to the enforcement by the Company of the
foregoing restrictive covenants.
8. Protection of Confidential
Information. The Executive agrees that all information,
whether or not in writing, with regard to the assets, property, business,
technical or financial affairs of the Company or its subsidiaries and that is
generally understood in the industry as being confidential and/or proprietary
information (“Proprietary Information”) including, but not limited to, ideas,
concepts, inventions, improvements, processes, products, services, designs,
original works of authorship, formulas, compositions of matter, compounds,
computer software programs, Internet products and services, testing and other
data, databases, mask works, trade secrets, treatments, product improvements,
product ideas, new products, discoveries, methods, software, uniform resource
locators or proposed uniform resource locators (“URLs”), domain names or
proposed domain names, any trade names, trademarks or slogans, identity of
customers, contracts, technical and production know-how, developments, formulae,
devices, inventions, administrative procedures, source code and financial
information, is the exclusive property of the Company. The Executive
agrees to hold in a fiduciary capacity for the sole benefit of the Company all
such Proprietary Information and any other secret, confidential or proprietary
information, knowledge, data, or trade secrets relating to the Company or any of
its affiliates or their respective clients (the foregoing being hereinafter
referred to as "Confidential Information"), which Confidential Information shall
have been obtained during the Executive’s employment with the
Company. The Executive agrees that the Executive will not at any
time, either during the Term of this Agreement or after its termination,
disclose to anyone any Confidential Information, or utilize such Confidential
Information for the Executive’s own benefit, or for the benefit of third parties
without written approval by the appropriate executive officer of the
Company.
-14-
Executive
further agrees that all memoranda, notes, records, data, schematics, sketches,
computer programs, prototypes, or written, photographic, magnetic or other
documents or tangible objects compiled by the Executive or made available to the
Executive during the Employment Period concerning the property, business,
technical or financial affairs of the Company and/or its affiliates and/or any
of their respective clients, including any copies of such materials, shall be
the property of the Company and shall be delivered to the Company on the
termination of the Executive’s employment, or at any other time, upon the
written request of the Company. Notwithstanding the foregoing, the Executive may
keep, for Executive’s reference, a copy of all memoranda, notes and documents
prepared by Executive.
In the
event Executive is questioned by anyone not employed by the Company or its
affiliates or by an employee of or a consultant to the Company or its affiliates
not authorized to receive such information, in regard to any Confidential
Information or any other secret or confidential work of the Company or its
affiliates, or concerning any fact or circumstance relating thereto, or in the
event that Executive becomes aware of the unauthorized use of Confidential
Information by any party, whether competitive with the Company or its affiliates
or not, Executive will promptly notify the appropriate executive
officer of the Company designated to receive such notifications or, if such
officer is the Executive, the Chairman of the Board of Directors of the
Company. Notwithstanding the foregoing, the Executive may discuss any
fact or circumstances relating to any Confidential Information with attorneys
the Executive may retain in connection with this Agreement or with the subject
matter thereof, provided that said attorneys shall agree in writing reasonably
satisfactory in form and substance to the Company to maintain the
confidentiality of such information in accordance with this Agreement and to not
use or disclose the same except as permitted hereunder.
In the
event that, at any time during the Executive’s employment with the Company or at
any time thereafter, Executive receives a request to disclose all or any part of
the Confidential Information under the terms of a subpoena or order issued by a
court or by a governmental body, Executive agrees to notify the Company
immediately of the existence, terms, and circumstances surrounding such request,
to consult with the Company on the advisability of taking legally available
steps to resist or narrow such request; and, if disclosure of such trade secrets
and other proprietary and confidential information is required to prevent
Executive from being held in contempt or subject to other penalty, to furnish
only such portion of the trade secrets and other proprietary and confidential
information as, in the written opinion of counsel reasonably satisfactory to the
Company, Executive is legally compelled to disclose, and to exercise Executive’s
best efforts to obtain an order or other reliable assurance that confidential
treatment will be accorded to the disclosed trade secrets and other proprietary
and confidential information. The Company covenants and agrees to reimburse the
Executive for all reasonable attorneys’ fees and expenses incurred by the
Executive in complying with this paragraph.
(b) The
parties agree that the relevant public policy aspects of confidentiality
agreements have been discussed, and that every effort has been made to limit the
restrictions placed upon the Executive to those that are reasonable and
necessary to protect the Company's legitimate interests.
-15-
(c) If
any restriction set forth in Section 8 is found by any court of competent
jurisdiction to be unenforceable because it extends for too long a period of
time or over too great a range of activities or geographic area, it shall be
interpreted to extend over the maximum period of time, range of activities or
geographic areas as to which it may be enforceable.
(d) The
restrictions contained in Section 8 are necessary for the protection of the
business, assets and goodwill of the Company and/or its affiliates and are
considered by the Executive to be reasonable for such purposes. The
Executive agrees that any material breach of Section 8 will cause the Company
and/or its affiliates substantial and irrevocable damage and therefore, in the
event of any such breach, in addition to such other remedies which may be
available, the Company shall have the right to seek specific performance and
injunctive relief.
(e) The
provisions of Section 8 shall survive termination or expiration of this
Agreement.
(f) The
existence of a claim, charge, or cause of action by Executive against the
Company or any of its affiliates shall not constitute a defense to the
enforcement by the Company of the foregoing restrictive covenants.
9. Intellectual
Property.
(a) Disclosure
of Inventions; Assignment of Ownership to Company. Executive
acknowledges and agrees that as part of Executive’s employment pursuant to this
Employment Agreement Executive is expected to make new contributions of value to
the Company, and Executive agrees that Executive will promptly disclose in
confidence to the Company all ideas, concepts, inventions, improvements,
processes, products, designs, original works of authorship, formulas, processes,
compositions of matter, compounds, computer software programs, Internet products
and services, e-commerce products and services, e-entertainment products and
services, testing and other data, databases, mask works, trade secrets,
treatments, product improvements, product ideas, new products, discoveries,
methods, software, uniform resource locators or proposed uniform resource
locators (“URLs”), domain names or proposed domain names, any trade names,
trademarks or slogans, which may or may not be subject to or able to be
patented, copyrighted, registered, or otherwise protected by law, which relate
directly or indirectly to the business or current or anticipated research and
development of the Company or any of its affiliates or their respective clients,
or which were developed by the Executive through the use of trade secrets of the
Company or any of its affiliates or material use of equipment, supplies or
facilities of the Company or any of its affiliates (the “Inventions”) that
Executive makes, conceives or first reduces to practice or creates, either alone
or jointly with others, during the period of the Executive’s employment, whether
or not in the course of the Executive’s employment, and whether or not such
Inventions are patentable, copyrightable or able to be protected as trade
secrets, or otherwise able to be registered or protected by law. The
Executive agrees that all such Inventions shall be the sole and exclusive
property of the Company and are hereby assigned by Executive to the Company from
the moment of their creation and fixation in tangible
media.
-16-
Furthermore,
the Executive agrees that the Executive will, at the Company's request and cost,
do whatever is reasonably necessary to secure for the Company the rights thereto
by patent, copyright or otherwise. Executive acknowledges and agrees
that the Executive’s obligations with respect to Company property discussed in
this paragraph shall survive the termination or expiration of this
Agreement.
(b) Work for
Hire. Executive
acknowledges and agrees that any copyrightable works prepared by the Executive
within the scope of the Executive’s employment are “works for hire” under the
Copyright Act and that the Company will be considered the author and owner of
such copyrightable works. The Executive agrees that the Executive
will, at the Company's request and cost, do whatever is reasonably necessary to
secure for the Company the rights thereto. Executive acknowledges and
agrees that the Executive’s obligations with respect to Company property
discussed in this paragraph shall survive the termination or expiration of this
Agreement.
(c) Assignment
of Other Rights. In addition to
the foregoing assignment of Inventions to the Company, Executive hereby
irrevocably transfers and assigns to the Company: (i) all worldwide
patents, patent applications, copyrights, mask works, trade secrets and other
intellectual property rights in any Invention; and (ii) any and all “Moral
Rights” (as defined below) that Executive may have in or with respect to any
Invention. Executive also hereby forever waives and agrees never to
assert any and all Moral Rights Executive may have in or with respect to any
Invention, even after termination of the Executive’s work on behalf of the
Company. “Moral Rights” mean any rights to
claim authorship of an Invention, to object to or prevent the modification of
any Invention, or to withdraw from circulation or control the publication or
distribution of any Invention, and any similar right, existing under judicial or
statutory law of any country in the world, or under any treaty, regardless of
whether or not such right is denominated or generally referred to as a “moral
right.”
(d) Assistance. Executive agrees
to assist the Company in every proper way to obtain for the Company and enforce
patents, copyrights, mask work rights, trade secret rights and other legal
protections for the Inventions of the Company and its affiliates in any and all
countries. Executive will execute any documents that the Company may
reasonably request for use in obtaining or enforcing such patents, copyrights,
mask work rights, trade secrets and other legal protections. The
Executive’s obligations under this Section will continue beyond the termination
of the Executive’s employment with the Company, provided that the Company will
compensate the Executive at a reasonable rate after such termination for time or
expenses actually spent by the Executive at the Company’s request on such
assistance. Executive appoints the Secretary of the Company as the
Executive’s attorney-in-fact to execute documents on the Executive’s behalf for
this purpose.
10. Publicity. Neither
party shall issue, without consent of the other party, which consent shall not
be unreasonably withheld, any press release or make any public announcement with
respect to this Agreement or the employment relationship between them provided, that nothing herein
shall preclude the Company from making such disclosures as may be reasonably
necessary or appropriate in order to comply with applicable securities laws,
rules and regulations. Following the date of this Agreement and
regardless of any dispute that may arise in the future, the Executive and the
Company jointly and mutually agree that they will not disparage, criticize or
make statements which are negative, detrimental or injurious to the other to any
individual, company or client, including within the Company.
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11. Binding
Agreement. This Agreement shall be binding upon and inure to
the benefit of the parties hereto, their heirs, personal representatives,
successors and assigns. In the event the Company is acquired, is a
non surviving party in a merger, or transfers substantially all of its assets,
this Agreement shall not be terminated and the Executive and the transferee or
surviving company shall be bound by the provisions of this
Agreement. The parties understand that the obligations of the
Executive are personal and may not be assigned by the Executive.
12. Entire
Agreement. This Agreement contains the entire understanding of
the Executive and the Company with respect to employment of the Executive and
supersedes any and all prior understandings, written or oral. This
Agreement may not be amended, waived, discharged or terminated orally, but only
by an instrument in writing, specifically identified as an amendment to this
Agreement, and signed by all parties. By entering into this
Agreement, the Executive certifies and acknowledges that the Executive has
carefully read all of the provisions of this Agreement and that the Executive
voluntarily and knowingly enters into said Agreement.
13. Severability. Any
provision of this Agreement which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be deemed severable from the
remainder of this Agreement, and the remaining provisions contained in this
Agreement shall be construed to preserve to the maximum permissible extent the
intent and purposes of this Agreement.
14. Tax
Consequences. Company will have no obligation to any person or
entity entitled to the benefits of this Agreement with respect to any tax
obligation any such person or entity incurs as a result of or attributable to
this Agreement, including all supplemental agreements and employee benefits
plans incorporated by reference therein, or arising from any payments made or to
be made under this Agreement or thereunder.
15. Governing Law. This
Agreement shall be governed by, and construed and enforced in accordance with,
the laws of the State of New York applicable to contracts negotiated, executed
and to be performed wholly within the State of New York, without giving effect
to the principles of conflicts of law or choice of law thereof.
16. Submission to
Jurisdiction. Each of the parties hereto hereby irrevocably
and unconditionally submits to the exclusive jurisdiction of the State and
Federal Courts sitting in New York, New York for purposes of any suit, action or
other proceeding arising out of this Agreement and agrees not to commence any
action, suit or proceedings relating hereto except in such
courts. Each of the parties hereto agrees that service of any
process, summons, notice or document by U.S. registered mail at its address set
forth herein shall be effective service of process for any action, suit or
proceeding brought against it in any such court. Each of the parties
hereto hereby irrevocably and unconditionally waives any objection to the laying
of venue of any action, suit or proceeding arising out of this Agreement, which
is brought by or against it, in such courts, and hereby further irrevocably and
unconditionally waives and agrees not to plead or claim in any such court that
any such action, suit or proceeding brought in any such court has been brought
in an inconvenient forum.
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17. Notices. Any notice
provided for in this Agreement shall be provided in writing. Properly
addressed notices shall be effective from the date of service, if served
personally on the party to whom notice is to be given, on the date of delivery
if delivered to the appropriate address by in-person delivery or courier or by
an overnight courier (including, without limitation, Federal Express, UPS and
Express Mail), or on the fifth (5th) day
after mailing via the U.S. Postal Service, if mailed by First Class mail,
postage prepaid. Notices shall be properly addressed to the parties
at their respective addresses or to such other address as either party may later
specify by notice to the other.
18. Indemnification.
(a) The
Company shall indemnify and hold harmless the Executive to the fullest extent
permitted by law from and against any and all claims, damages, expenses
(including reasonable attorneys' fees), judgments, penalties, fines,
settlements, and all other liabilities incurred or paid by the Executive in
connection with the investigation, defense, prosecution, settlement or appeal of
any threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative and to which the Executive was or is a
party or is threatened to be made a party by reason of the fact that the
Executive is or was an officer, employee or agent of the Company, or by reason
of anything done or not done by the Executive in any such capacity or
capacities, provided that the Executive acted in good faith, in a manner that
was not grossly negligent and did not constitute willful misconduct and in a
manner the Executive reasonably believed to be in or not opposed to the best
interests of the Company, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe the Executive's conduct was
unlawful. The Company also shall pay any and all reasonable expenses
(including attorney's fees) incurred by the Executive as a result of the
Executive being called as a witness in connection with any matter involving the
Company and/or any of its officers or directors (other than an action or suit by
the Company against the Executive).
(b) The
Company shall pay any reasonable expenses (including attorneys' fees),
judgments, penalties, fines, settlements, and other liabilities incurred by the
Executive in investigating, defending, settling or appealing any action, suit or
proceeding described in this Section 18 (other than an action or proceeding by
the Company against the Executive) in advance of the final disposition of such
action, suit or proceeding. The Company shall promptly pay the amount
of such expenses to the Executive, but in no event later than ten (10) days
following the Executive's delivery to the Company of a written request for an
advance pursuant to this Section 18, together with a reasonable accounting of
such expenses.
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(c) The
Executive hereby undertakes and agrees to repay to the Company any advances made
pursuant to this Section 18 if and to the extent that it shall ultimately be
agreed by the parties or determined by a court that the Executive is not
entitled to be indemnified by the Company for such amounts.
(d) The
Company shall make the advances contemplated by this Section 18 regardless of
the Executive's financial ability to make repayment, and regardless of whether
indemnification of the Indemnitee by the Company will ultimately be required.
Any advances and undertakings to repay pursuant to this Section 18 shall be
unsecured and interest-free.
19. Miscellaneous.
(a) No
delay or omission by either party to this Agreement in exercising any right of
such party under this Agreement shall operate as a waiver of that or any other
right by such party. A waiver or consent given by a party to this
Agreement on any one occasion shall be effective only in that instance and shall
not be construed as a bar or waiver of any right on any other
occasion.
(b) The
captions of the sections of this Agreement are for convenience of reference only
and in no way define, limit or affect the scope or substance of any section of
this Agreement.
(c) The
language in all parts of this Agreement will be construed, in all cases,
according to its fair meaning, and not for or against either party
hereto. The parties acknowledge that each party and its counsel have
reviewed and revised this Agreement and that the normal rule of construction to
the effect that any ambiguities are to be resolved against the drafting party
will not be employed in the interpretation of this Agreement.
20. Counterparts. This
Agreement may be signed in any number of counterparts, each of which shall be
deemed an original, with the same effect as if the signatures thereto and hereto
were upon the same instrument. Facsimile signatures shall be treated as if the
same were original signatures.
21. Waiver. Executive
hereby waives any rights he might have under the Prior Agreement to terminate
his employment with the Company because of (i) the relocation of the Company’s
headquarters to Montebello, New York prior to the date hereof or (ii) any
issuance of equity interests in the Company pursuant to the Exchange Agreement
or pursuant to the 8% Convertible Note investment documents currently authorized
by the Board of Directors as of the date hereof.
IN
WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be duly
executed and delivered by its authorized officers or individually, as of the
date first written above.
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| ADVANCE NANOTECH, INC. | |||
|
|
By:
|
/s/ ▇▇▇▇ ▇▇▇▇▇ | |
| Name: ▇▇▇▇ ▇▇▇▇▇ | |||
| Officer’s Title: CEO | |||
| EXECUTIVE: | |||
|
|
By:
|
/s/ ▇▇▇▇▇▇ ▇▇▇▇ | |
| Name: ▇▇▇▇▇▇ ▇▇▇▇ | |||
-21-