Exhibit 4.7
THIS AGREEMENT effective as of the 1st day of November, 2000.
BETWEEN:
DSI Datotech Systems Inc., a company duly incorporated under
the laws of the Province of British Columbia, having its
registered and records office at Suite #300 - 905 West Xxxxxx
Street, Vancouver, British Columbia V6C 1L6
(the "Company")
THE FIRST PART
AND:
Pardiak Management International Ltd., a corporation
incorporated under the laws of Canada and having an office at
#1702 - 000 Xxxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxx Xxxxxxxx X0X
0X0
(the "Contractor")
THE SECOND PART
WHEREAS:
A. The Company is involved in the business of developing a gesture based data
input technology among other input systems (the "Technology") and acquiring
complementary technology based businesses and/or assets;
B. The sole voting shareholder of the Contractor is Xxxxxx X. Pardiak
("Pardiak");
C. The Company desires to retain the Contractor to manage the Company in
evolving from a research and development company to a company with cash flow
generated from the sale and/or licensing of its products pursuant to the terms
of this Agreement.
THEREFORE in consideration of the covenants and agreements set out in this
agreement, and for other good and valuable consideration given by each party to
the other, the receipt and sufficiency of which is hereby acknowledged by each
of the parties, the parties agree as follows:
1. DUTIES OF CONTRACTOR
1.1 Service - The Company agrees to retain the Contractor to provide services on
the terms set out in this Agreement. The Contractor agrees that Pardiak will
provide, on behalf of the Contractor, all of the services required by the
Company and shall occupy the positions of Chief Executive Officer and Chief
Financial Officer of the Company.
1.2 Nature of Relationship - This is an agreement for services, and nothing
herein is intended by the parties to create an employee and employer
relationship.
1.3 Duties and Responsibilities - The Contractor shall be responsible for the
management and development of the Company, including performing the following
duties:
(a) overseeing the administration and financial operations of the
day-to-day affairs of the Company and any subsidiary;
(b) developing financial, business, marketing, public relations and
investor relations plans for the Company, or that of the Company's
subsidiaries;
(c) leading, overseeing and aiding in the negotiating and concluding of,
but not limited to, financings, mergers and acquisitions,
dispositions, joint ventures, strategic alliances and licensing and
royalty agreements;
(d) leading and acting as manager of public and investor relations
departments until such time as the Company can hire individuals or
firms to fill these positions; and
(e) such other duties as may be assigned by the Company.
1.4 Service - During the Term the Contractor shall:
(a) well and faithfully serve the Company and use its best efforts to
promote the best interests of the Company;
(b) unless prevented by ill health or injury, devote the whole of its
working time and attention to the business of the Company; and
(c) not, without the prior written consent of the Company, which consent
may be withheld at the sole discretion of the Company, engage in any
other business, profession or occupation, or become an officer,
employee, contractor for service, agent, or representative of any
other employer, partnership, firm, person, organization, or
enterprise, where that engagement or position conflicts with, or could
reasonably conflict with at some future date, or interferes with, or
could reasonably interfere with at some future date, the Contractor's
duties and obligations to the Company.
1.5 Services To Other Companies - The Company is aware that the Contractor has
now and will continue to provide limited management services to other companies
and the Company recognizes that these companies will require a certain portion
of the Contractor's time. The Company agrees that the Contractor may continue to
provide services to such outside interests, provided that such interests do not
conflict with its duties under this Agreement.
1.6 Subsidiary - For the purpose of this section the term "subsidiary" means any
company or companies of which more than fifty per cent of the outstanding shares
carrying votes at all times (provided that the ownership of such shares confers
the right at all times to elect at
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least a majority of the Board of Directors of such company or companies) are
owned by or held for the Company and/or any other company in like relation to
the Company and include any company in like relation to the subsidiary.
2. TERM OF AGREEMENT
2.1 Term - The term of this Agreement shall be two years commencing on November
1st, 2000 (the "Term"), unless ended earlier or renewed by the parties in
accordance with the terms of this Agreement.
2.2 Renewal - Provided the Contractor is not in default, this Agreement shall
automatically renew each year for a further one-year term, and salary and
benefits may be re-negotiated. The Company can elect not to renew this Agreement
for any further term by giving to the Contractor written notice of non-renewal
sixty days before the renewal date, in which case this Agreement will terminate
at the end of the sixty-day notice period and the Company will pay to the
Contractor a lump sum payment equivalent to twelve months compensation.
3. COMPENSATION
3.1 Remuneration for Services - The Company shall:
(a) Pay to the Contractor a fee in the amount of $12,500 (gross) per
month;
(b) Pay to the Contractor a reasonable amount for all premium costs
incurred by the Contractor for a benefit package for Pardiak and his
immediate family, relating to the following benefits: life insurance
(at three times the Contractor's annual fee), accidental death and
dismemberment, extended health, dental and long-term disability; and
provide payment for the Contractor to receive an annual medical
examination (i.e. Medisys);
(c) Provide to the Contractor an annual paid vacation of 20 working days
to be taken when the Contractor deems appropriate in consideration of
the Company's operational requirements. Should the Company's
operational requirements not permit the Contractor to exercise 20
working days of vacation in any given year, the Contractor may
accumulate and use the non-exercised portion of his vacation in any
subsequent year or chose to be paid in cash for the unused portion of
his vacation. If at the end of this Agreement the Contractor has
unused vacation time to its credit, then the Company will pay the
Contractor the equivalent in cash;
(d) Pay to the Contractor a car allowance in the amount of $1,000 per
month;
(e) Grant from time-to-time to the Contractor stock options. The granting
of stock options shall be based on the performance of the Contractor,
and such grant shall be solely in the discretion of and in an amount
to be determined by the Company's Compensation Committee; and
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(f) Pay to the Contractor bonuses associated with but not limited to
financings, mergers and acquisitions, dispositions, joint ventures,
strategic alliances and licensing and royalty agreements. The payment
of a bonus shall be based on the performance of the Contractor, and
such payment shall be solely in the discretion of and in an amount to
be determined by the Company's Compensation Committee. The Contractor
will immediately be paid a renewal bonus of $50,000
3.2 Deferment of Compensation - If the Company's working capital balance is less
than $500,000 then the Company will defer, without interest or penalty, cash
payments owing to the Contractor pursuant to this Agreement in accordance with
the following:
(a) the Company will resume full payments to the Contractor when the
Company's working capital balance exceeds $500,000;
(b) the Company will determine the repayment schedule to fully reimburse
the Contractor all outstanding arrears when the Company's working
capital exceeds $500,000; and
(c) the Contractor will not secure any debts owing to it by the Company.
3.3 Escrow Shares - Subject to the shareholders and all required regulatory
approval, the Company may, in its sole discretion, grant to the Contractor
escrow shares in an amount to be determined by the Compensation Committee of the
Company.
3.4 Expenses - The Company shall reimburse the Contractor for all reasonable
expenses actually and properly incurred by the Contractor on behalf of the
Company in carrying out its duties and performing its functions under this
Agreement provided that for all expenses the Contractor shall furnish relevant
statements and vouchers to the Company prior to such reimbursement.
3.5 Remittances - The Contractor shall be solely responsible for the payment of
any monies required by law to be remitted by or on behalf of Pardiak.
4. INDEMNITIES
4.1 Indemnity by Company - The Company will indemnify the Contractor and Pardiak
in respect of acts or omissions under this Agreement to the extent permitted by
Part 19 of the Company's Articles of Incorporation and to the extent permitted
by law.
4.2 Indemnity by Contractor - The Contractor shall indemnify the Company from
any and all claims by a government department relating to income tax or other
statutory withholdings that were not deducted and remitted by the Company on
behalf of Pardiak or the Contractor.
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4.3 Insurance - The Company will diligently maintain and renew its directors'
and officers' insurance and maintain such insurance for the benefit of Pardiak.
5. CONFIDENTIALITY
5.1 Non-Disclosure of Information of the Company - During the Term and
thereafter the Contractor shall keep confidential all information of a
confidential or proprietary nature concerning the Company, its subsidiaries and
affiliates and their respective operations, assets, finances, businesses and
affairs and shall not use that information for the Contractor 's personal
advantage or the advantage of any third party, provided that nothing herein
shall prevent disclosure of information which is publicly available or which is
required to be disclosed under appropriate statutes, rules of law or legal
process.
5.2 Confidential Information - For the purposes of this section "confidential
information" shall include, but not be limited to, all documents and records,
whether original, duplicated, computerized, memorized, handwritten or in any
other form, relating to the business of the Company that was acquired by the
Contractor as a result of this Agreement.
5.3 Return of Records and Company Property - The Contractor shall at any time
upon request by the Company, and in any event upon the expiration of the Term
irrespective of the time, manner or cause of the termination of the this
Agreement, promptly return to the Company all records, files, lists, drawings,
documents, models, equipment, software, intellectual property and any other
property belonging to the Company or relating to the Company's business.
6. RESTRICTED ACTIVITIES
6.1 Non-Competition - During the Term and for a period of twenty-four months
after the termination of this Agreement for any reason by either the Contractor
or the Company (the "Restriction Period"), the Contractor shall not, directly or
indirectly, engage in any undertaking or business as an employee, partner,
principal, agent or consultant in Canada or the United States that is involved
in the development or marketing of any of the same or similar technologies as
the Company, including the development and marketing of the Technology.
6.2 Non-Solicitation - During the Restriction Period the Contractor shall not
directly or indirectly:
(a) solicit or encourage any employee of the Company to terminate his
employment with the Company or assist any other person or business to
do so;
(b) offer employment to any employee of the Company; and
(c) contact or communicate with any customer of the Company for the
purpose of soliciting the customer's business.
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7. TERMINATION
7.1 Termination by Company - This Agreement may be terminated by the Company at
any time during the Term, upon which termination the Company shall pay to the
Contractor a lump sum payment in an amount equal to the compensation under this
Agreement in full but not less than twelve months compensation and final
satisfaction of all of its obligations to the Contractor under this Agreement.
7.2 Termination by Contractor - The Contractor may terminate this Agreement by
giving the Company ninety days written notice delivered to the Company, and upon
the 90th day the Company will pay the Contractor all amounts due to that date
and thereafter the Contractor will not be entitled to any further payments.
7.3 Termination by Death or Permanent Incapacitation - This Agreement shall
terminate automatically upon the death or permanent incapacitation of Pardiak,
under which circumstances the Company shall have no further obligations to the
Contractor. For the purposes of this section, Pardiak shall be deemed to have
suffered permanent incapacitation when he suffers any illness or injury that
prevents him from performing his usual duties for a period of ninety consecutive
days.
7.4 Termination by Company for Cause - Notwithstanding any other provision of
this Agreement, the Company may terminate this Agreement at any time for cause
without notice or payment of any compensation, such cause to include the
following:
(a) any conduct that at common law constitutes just cause for the
termination of employment; and
(b) the bankruptcy of Pardiak or the Contractor.
7.5 Release of Shares - Following the termination of this Agreement the Company
will use its best efforts to make application for release of the Contractor's
performance shares on a timely basis if any of the Contractor's performance
shares are eligible for release from escrow.
8. PREAMBLE - The preamble shall form an integral part of this Agreement.
9. SHAREHOLDER APPROVAL - This Agreement is subject to the Shareholders of the
Company granting the Board of Directors of the Company and its Compensation
Committee the right to negotiate an agreement with the Contractor.
10. ENFORCEMENT - The Contractor acknowledges and agrees that the covenants and
obligations under this Agreement are reasonable, necessary and fundamental to
the protection of the Company's legitimate business interests, and the
Contractor acknowledges and agrees that any breach of this Agreement by the
Contractor would result in irreparable harm to the Company and loss and damage
to the Company for which the Company could not be adequately compensated by an
award of monetary damages. Accordingly, the Contractor
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acknowledges and agrees that in the event of any breach or threatened breach of
any provision of this Agreement by the Contractor, the Company shall, in
addition to any and all remedies available to the Company at law or in equity,
be entitled as a matter of right to judicial relief by way of a restraining
order, interim, interlocutory or permanent injunction, or order for specific
performance as may be necessary to ensure that the Contractor complies with and
performs his obligations under this Agreement, and including an award of special
costs of any such court application against the Contractor, and the Contractor
further covenants and agrees not to oppose the granting of any such judicial
relief and hereby waives any and all defences to the strict enforcement of this
Agreement and such judicial relief.
11. SEVERABILITY - Should any part of this Agreement be declared or held to be
invalid for any reason, the invalidity shall not affect the validity of the
remainder of this Agreement which shall continue in full force and effect and be
construed as if this Agreement had been executed without the invalid portion,
and it is hereby declared the intention of the parties that this Agreement would
have been executed without reference to any portion that may, for any reason, be
hereafter declared or held invalid.
12. ENTIRE AGREEMENT AND AMENDMENTS - The provisions herein constitute the
entire agreement between the parties and supersede all previous communications,
representations and agreements, whether oral or written, between the parties
with respect to the subject matter hereof.
13. GOVERNING LAW - This Agreement shall be governed by and interpreted in
accordance with the laws of British Columbia, and the courts of that Province or
Territory shall have the exclusive jurisdiction over this Agreement and any
claim or dispute arising under it.
14. ENUREMENT - This Agreement shall enure to the benefit of and be binding upon
the parties hereto and their respective heirs, executors, administrators,
successors, personal representatives and permitted assigns.
15. ASSIGNMENT OF RIGHTS - The Company shall have the right to assign this
Agreement to another party. The Contractor shall not assign his rights under
this Agreement or delegate to others any of his functions and duties under this
Agreement, without the express written consent of the Company which may be
withheld in its sole discretion.
16. LEGAL ADVICE - The Contractor acknowledges that it was recommended to him by
the Company that he obtain independent legal advice before executing this
Agreement, and that by executing this Agreement the Contractor represents that
he did obtain independent legal advice.
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17. CONFIDENTIALITY OF AGREEMENT - The Contractor shall keep confidential and
not disclose any of the terms of this Agreement to any person unless required to
do so by law or for the purpose of obtaining confidential legal, financial or
tax planning advice.
IN WITNESS WHEREOF the parties have hereto have duly executed this
Agreement as of the day and year first above written.
The Common Seal of DSI Datotech Systems Inc. was )
hereunto affixed in the presence of: )
)
)
/s/Xxx Xxxxxxx )
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)
Dr. Xxx Xxxxxxx, Director )
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Title )
)
)
/s/Xxxxx X. Xxxxxxx )
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)
Xxxxx X. Xxxxxxx, Director )
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Title )
)
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Date
The Common Seal of Pardiak Management International )
Ltd. was hereunto affixed in the presence of: )
)
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) (C/S)
)
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Date )
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