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EXHIBIT 10.6
EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is entered into as of
January 5, 1998, by and between iMall, Inc., a Nevada corporation (the
"Company") and Xxxx Xxxxx, an individual ("Employee"), with reference to the
following:
A. The Company desires to employ Employee on the terms and
conditions set forth in this Agreement.
B. Employee desires to be so employed.
NOW, THEREFORE, based on the foregoing premises and in consideration
of the covenants set forth in this Agreement, the parties hereto hereby agree as
follows:
1. Term of Employment. The Company hereby employs Employee and
Employee accepts such employment commencing on February 2, 1998 and terminating
on that date which is two years thereafter, unless sooner terminated in
accordance with the terms of this Agreement.
2. Services to be Rendered.
2.1 Duties. Employee shall serve as President of the
Company and shall have the responsibilities, duties and powers customarily
associated with such position. Employee shall report directly to the Chief
Executive Officer of the Company, and shall perform his duties pertaining to the
business of the Company (the "Company Business") subject to the direction of the
Chief Executive Officer and to such limits upon Employee's authority as the
Chief Executive Officer may from time to time impose. Employee's principal place
of work hereunder shall be located in Studio City, California or such other
location within Los Angeles County as may be designated by the Chief Executive
Officer from time to time. However, Employee shall also render services at such
other place or places within or without the United States as the Chief Executive
Officer may direct from time to time. Employee shall be subject to the policies
and procedures generally applicable to senior executive employees of the Company
to the extent the same are not inconsistent with any term of this Agreement.
2.2 Exclusive Services. Employee shall at all times
faithfully, industriously and to the best of his ability, experience and talent
perform to the satisfaction of the Chief Executive Officer all of the duties
that may be assigned to Employee hereunder and shall devote all of his
productive time and efforts to the performance of such duties; provided,
however, that Employee may devote time to personal and family investments to the
extent that the time so spent does not conflict with the Company Business. The
existence of such a conflict shall be determined in good faith by the Chief
Executive Officer.
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3. Compensation and Benefits. The Company shall pay the
following compensation and benefits to Employee during the term hereof, and
Employee shall accept the same as payment in full for all services rendered by
Employee to or for the benefit of the Company:
3.1 Salary. A salary ("Salary") of $125,000 per annum. The
Salary shall accrue in equal monthly installments in arrears and shall be
payable in accordance with the payroll practices of the Company in effect from
time to time.
3.2 Car Allowance. The Company shall pay to Employee a car
allowance of $750 per month, which shall accrue in monthly installments in
arrears and be payable in accordance with the practices of the Company in effect
from time to time.
3.3 Fringe Benefits. Employee shall be entitled to
participate in benefits under the Company's benefit plans and arrangements,
including, without limitation, any employee benefit plan or arrangement made
available in the future by the Company to its senior executives, subject to and
on a basis consistent with the terms, conditions and overall administration of
such plans and arrangements. The Company shall have the right to amend or delete
any such benefit plan or arrangement made available by the Company to its senior
executives and not otherwise specifically provided for herein.
3.4 Expenses. The Company shall reimburse Employee for
reasonable out-of- pocket expenses incurred in connection with the Company
Business and the performance of his duties hereunder, subject to (i) such
policies as the Chief Executive Officer may from time to time establish, (ii)
Employee furnishing the Company with evidence in the form of receipts
satisfactory to the Company substantiating the claimed expenditures, and (iii)
Employee receiving advance approval from the Chief Executive Officer in case of
expenses (or a series of related expenses) in excess of $500.
3.5 Vacation. Employee shall be entitled to the number of
paid vacation days in each calendar year determined by the Company from time to
time for its senior executive officers. Employee shall also be entitled to all
paid holidays given to the Company's senior executive officers.
3.6 Bonus. The Company shall review the performance of the
division of the Company for which Employee primarily works (i.e., the Internet
Training Division) within 90 days after the end of each of the 1998 and 1999
fiscal years of the Company. Based on such reviews, the Company shall pay
Employee an annual bonus in an amount equal to (i) five percent (5%) of the
relevant year's "net operating profits" of the Internet Training Division, on
any net operating profits up to the amount of $1,000,000, plus (ii) ten percent
(10%) of the relevant year's net operating profits of the Internet Training
Division, on any net operating profits in excess of $1,000,000. For purposes of
this Agreement, the term "net operating profits" means the net operating profits
of the Internet Training Division as
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determined by the Company in accordance with its then-current standard
accounting practices.
3.7 Withholding and other Deductions. All compensation
payable to Employee hereunder shall be subject to such deductions as the Company
is from time to time required to make pursuant to law, governmental regulation
or order.
4. Stock Options. The Company may, from time to time, grant
Employee options under its then-current stock option plan to purchase shares of
its common stock, on such terms and in such amounts (if any) as the Company
determines in its sole and exclusive discretion.
5. Representations and Warranties of Employee. Employee
represents and warrants to the Company that (a) Employee is under no contractual
or other restriction or obligation which is inconsistent with the execution of
this Agreement, the performance of his duties hereunder, or the other rights of
the Company hereunder and (b) Employee is under no physical or mental disability
that would hinder the performance of his duties under this Agreement.
6. Certain Covenants.
6.1 Noncompetition. The parties hereto acknowledge that if
Employee were to compete with the Company, Employee would necessarily use
Confidential Information (as defined below) in doing so. Accordingly, during the
term of this Agreement (including, if Employee is terminated for good cause or
voluntarily terminates his employment hereunder, for the remainder of the term
of this Agreement after such termination) (the "Restricted Period"), Employee
shall not have any ownership interest (of record or beneficial) in, or have any
interest as an employee, salesman, consultant, officer or director in, or
otherwise aid or assist in any manner, any firm, corporation, partnership,
proprietorship or other business that engages in any county, city or part
thereof in the United States and/or any foreign country in a business which is
similar to that in which the Company is engaged in such county, city or part
thereof, so long as the Company, or any successor in interest of the Company the
business and goodwill of the Company, remains engaged in such business in such
county, city or part thereof or continues to solicit customers or potential
customers therein; provided, however, that Employee may own, directly or
indirectly, solely as an investment, securities of any entity which are traded
on any national securities exchange if Employee (a) is not a controlling person
of, or a member of a group which controls, such entity or (b) does not, directly
or indirectly, own one percent (1%) or more of any class of securities of any
such entity.
6.2 Trade Secrets. Employee acknowledges that the nature
of Employee's engagement by the Company is such that Employee will have access
to Confidential Information which has great value to the Company and that except
for Employee's engagement by the Company, Employee would not otherwise have
access to the Confidential Information.
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During the term of this Agreement and at all times thereafter, Employee shall
keep all of the Confidential Information in confidence and shall not disclose
any of the same to any other person, except the Company's personnel entitled
thereto and other persons designated in writing by the Company. Employee shall
not cause, suffer or permit the Confidential Information to be used for the gain
or benefit of any party outside of the Company or for Employee's personal gain
or benefit outside the scope of Employee's engagement by the Company.
6.3 Solicitation of Business. Employee shall not during
the Restricted Period solicit or assist any other person to solicit any business
(other than for the Company) from any present or past customer of the Company;
or request or advise any present or future customer of the Company to withdraw,
curtail or cancel its business dealings with the Company; or commit any other
act or assist others to commit any other act which might injure the business of
the Company.
6.4 Solicitation of Employees. Employee shall not during
the Restricted Period, directly or indirectly, hire, solicit or encourage to
leave the employment of the Company or any of its affiliates, any employee of
the Company or any of its affiliates or hire any such employee who has left the
employment of the Company or any of its affiliates within one year of the
termination of such employee's employment with the Company or any of its
affiliates.
6.5 Solicitation of Consultants. Employee shall not during
the Restricted Period, directly or indirectly, hire, solicit or encourage to
cease work with the Company or any of its affiliates any consultant then under
contract with the Company or any of its affiliates within one year of the
termination of such consultant's engagement by the Company or any of its
affiliates.
6.6 Rights and Remedies Upon Breach. If Employee breaches
or threatens to commit a breach of any of the provisions of this Section 6 (the
"Restrictive Covenants"), the Company shall have the following rights and
remedies, each of which rights and remedies shall be independent of the other
and severally enforceable, and all of which rights and remedies shall be in
addition to, and not in lieu of, any other rights and remedies available to the
Company under law or in equity:
(a) Specific Performance. The right and remedy to
have the Restrictive Covenants specifically enforced by any court having equity
jurisdiction, all without the need to post a bond or any other security or to
prove any amount of actual damage or that money damages would not provide an
adequate remedy, it being acknowledged and agreed that any such breach or
threatened breach will cause irreparable injury to the Company and that money
damages will not provide adequate remedy to the Company; and
(b) Accounting and Indemnification. The right and
remedy to require Employee (i) to account for and pay over to the Company all
compensation, profits, monies,
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accruals, increments or other benefits derived or received by Employee or any
associated party deriving such benefits as a result of any such breach of the
Restrictive Covenants; and (ii) to indemnify the Company against any other
losses, damages (including special and consequential damages), costs and
expenses, including actual attorneys' fees and court costs, which may be
incurred by them and which result from or arise out of any such breach or
threatened breach of the Restrictive Covenants.
6.7 Severability of Covenants/Blue Pencilling. If any
court determines that any of the Restrictive Covenants, or any part thereof, is
invalid or unenforceable, the remainder of the Restrictive Covenants shall not
thereby be affected and shall be given full effect, without regard to the
invalid portions. If any court determines that any of the Restrictive Covenants,
or any part thereof, are unenforceable because of the duration of such provision
or the area covered thereby, such court shall have the power to reduce the
duration or area of such provision and, in its reduced form, such provision
shall then be enforceable and shall be enforced. Employee hereby waives any and
all right to attack the validity of the Restrictive Covenants on the grounds of
the breadth of their geographic scope or the length of their term.
6.8 Enforceability in Jurisdictions. The Company and
Employee intend to and do hereby confer jurisdiction to enforce the Restrictive
Covenants upon the courts of any jurisdiction within the geographical scope of
such covenants. If the courts of any one or more of such jurisdictions hold the
Restrictive Covenants wholly unenforceable by reason of the breadth of such
scope or otherwise, it is the intention of the Company and Employee that such
determination not bar or in any way affect the right of the Company to the
relief provided above in the courts of any other jurisdiction within the
geographical scope of such covenants, as to breaches of such covenants in such
other respective jurisdictions, such covenants as they relate to each
jurisdiction being, for this purpose, severable into diverse and independent
covenants.
6.9 Definitions.
(a) In Sections 6.1 - 6.9 above, all references to the
Company mean not only the Company, but also any company, partnership or entity
which, directly or indirectly, controls, is controlled by or is under common
control with the Company.
(b) The term "Confidential Information", as used in this
Agreement, means all information or material not generally known by non-Company
personnel which (i) gives the Company some competitive business advantage or the
opportunity of obtaining such advantage or the disclosure of which could be
detrimental to the interests of the Company; (ii) which is owned by the Company
or in which the Company has an interest and (iii) which is either (A) marked
"Confidential Information," "Proprietary Information" or other similar marking,
(B) known by Employee to be considered confidential and proprietary by the
Company or (C) from all the relevant circumstances should reasonably be assumed
by Employee to be confidential and proprietary to the Company. Confidential
Information
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includes, but is not limited to, the following types of information and other
information of a similar nature (whether or not reduced to writing): trade
secrets, inventions, drawings, file data, documentation, diagrams,
specifications, know how, processes, formulas, models, flow charts, software in
various stages of development, source codes, object codes, categories of
information unique to the business, research and development procedures,
research or development and test results, marketing techniques and materials,
marketing and development plans, price lists, pricing policies, business plans,
information relating to customers and/or suppliers' identities, characteristics
and agreements, financial information and projections, and employee files.
Confidential Information also includes any information described above which the
Company obtains from another party and which the Company treats as proprietary
or designates as Confidential Information, whether or not owned or developed by
the Company. NOTWITHSTANDING THE ABOVE, HOWEVER, NO INFORMATION CONSTITUTES
CONFIDENTIAL INFORMATION IF IT IS GENERIC INFORMATION OR GENERAL KNOWLEDGE WHICH
COVENANTOR WOULD HAVE LEARNED IN THE COURSE OF SIMILAR EMPLOYMENT ELSEWHERE IN
THE TRADE OR IF IT IS OTHERWISE PUBLICLY KNOWN AND IN THE PUBLIC DOMAIN.
7. Proprietary Rights.
7.1 Disclosure of Employee's Knowledge. Employee shall
make available to the Company at no cost to the Company all knowledge possessed
by him relating to any methods, developments, inventions and/or improvements,
whether patented, patentable or unpatentable, which concern in any way the
Company Business, acquired by Employee during the term of employment, provided
that nothing herein shall be construed as requiring any disclosure where any
such method, development, invention and/or improvement is lawfully protected
from disclosure as a trade secret of any third party or by any other lawful bar
to such disclosure.
7.2 Ownership of Patent Rights, Copyrights, and Trade
Secrets. To the fullest extent permitted by California law, Employee shall
assign, and does hereby assign, to the Company all of Employee's right, title
and interest in and to all inventions, improvements, developments, trade
secrets, discoveries, computer software, tradenames and trademarks conceived,
improved, developed, discovered or written by Employee, alone or in
collaboration with others, during the term of this Agreement which relate in any
manner to the Company Business, whether or not the same shall be conceived,
improved, developed, discovered or written during customary working hours on the
Company's premises. During the term of this Agreement Employee shall promptly
and fully disclose to the Company all matters within the scope of this Section
7.2, and shall, upon request of the Company, execute, acknowledge, deliver and
file any and all documents necessary or useful to vest in the Company all of
Employee's right, title and interest in and to all such matters. All expenses
incurred in connection with the execution, acknowledgment, delivery and filing
of any papers or documents within the scope of this Section 7.2 shall be borne
by the Company. All matters within the scope of this Section 7.2 shall
constitute trade secrets of the Company subject to the provisions of Section
6.2, until such matters cease to be trade secrets by
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operation of law. Notwithstanding the foregoing, however, Employee shall be
under no obligation to assign to the Company any right in or to any invention
which qualifies fully under the provisions of Section 2870 of the California
Labor Code, which section is reproduced in Exhibit A attached hereto.
8. Insurance. The Company shall have the right to take out
life, health, accident, "key-man" or other insurance covering Employee, in the
name of the Company and at the Company's expense in any amount deemed
appropriate by the Company. Employee shall assist the Company in obtaining such
insurance, including, without limitation, submitting to any required
examinations and providing information and data required by insurance companies.
9. Termination.
9.1 Death or Total Disability of Employee. If Employee
dies or becomes totally disabled during the term of this Agreement, Employee's
employment hereunder shall automatically terminate. For these purposes Employee
shall be deemed totally disabled if Employee shall become physically or mentally
incapacitated or disabled or otherwise unable fully to discharge Employee's
duties hereunder for a period of 90 consecutive calendar days or for 120
calendar days in any 180 calendar-day period.
9.2 Termination for Good Cause. Employee's employment
hereunder may be terminated by the Company for "good cause." The term "good
cause" is defined as any one or more of the following occurrences:
(a) Employee's breach of any of the covenants
contained in Section 6 of this Agreement;
(b) Employee's conviction by, or entry of a plea of
guilty or nolo contendere in, a court of competent and final jurisdiction for
any crime involving moral turpitude or punishable by imprisonment in the
jurisdiction involved;
(c) Employee's commission of an act of fraud, whether
prior to or subsequent to the date hereof upon the Company;
(d) Employee's willful failure or refusal to perform
Employee's duties as required by this Agreement for any reason whatsoever
(including, without limitation, Employee's inability to comply with any laws,
rules or regulations of any governmental entity with respect to Employee's
employment by the Company);
(e) Employee's gross negligence, insubordination or
material violation of any duty of loyalty to the Company or any other material
misconduct on the part of Employee;
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(f) Employee's commission of any act which is
detrimental to the Company's business or goodwill; or
(g) Employee's breach of any other provision of this
Agreement, provided that termination of Employee's employment pursuant to this
subsection (g) shall not constitute valid termination for good cause unless
Employee shall have first received written notice from the Chief Executive
Officer stating with specificity the nature of such breach and affording
Employee at least fifteen (15) days to correct the breach alleged.
9.3 Other Events. The Company may terminate Employee's
employment, with two weeks' prior written notice at such time, if any, as the
Company ceases to conduct business for any reason whatsoever.
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9.4 Severance Compensation. Upon the occurrence of any of
the events referred to in Sections 9.1, 9.2 and 9.3 above, Employee (or
Employee's heirs or representatives) shall be entitled to receive only such
portion (if any) of the Salary as may theretofore have accrued but be unpaid on
the date on which the termination shall take effect.
9.5 Return of the Company's Property. If this Agreement is
terminated for any reason whatsoever, the Company shall have the right, at its
option, to require Employee to vacate his offices prior to the effective date of
termination and to cease all activities on the Company's behalf. Upon the
termination of his employment in any manner, Employee shall immediately
surrender to the Company all lists, books and records of, or in connection with,
the Company's business, and all other property belonging to the Company, it
being distinctly understood that all such lists, books and records, and other
documents, are the property of the Company.
10. Arbitration. Any claim or controversy arising out of or
relating to this Agreement shall be settled by arbitration in Los Angeles,
California, in accordance with the Commercial Arbitration Rules of the American
Arbitration Association, and judgment on the award rendered by the arbitrators
may be entered in any court having jurisdiction. There shall be three
arbitrators, one to be chosen directly by each party at will, and the third
arbitrator to be selected by the two arbitrators so chosen.
11. General Relationship. Employee shall be considered an
employee of the Company within the meaning of all federal, state and local laws
and regulations including, but not limited to, laws and regulations governing
unemployment insurance, workers' compensation, industrial accident, labor and
taxes.
12. Miscellaneous.
12.1 Modification; Prior Claims. This Agreement sets forth
the entire understanding of the parties with respect to the subject matter
hereof and supersedes all prior and contemporaneous agreements, written or oral,
between them concerning such subject matter, including, but not limited to, that
certain employment agreement by and between the Company and Employee, entered
into in or around July of 1996. This Agreement may be modified only by a written
instrument duly executed by each party. Employee hereby waives any claims that
may exist on the date hereof arising from his prior employment with the Company,
other than for salary payable or reimbursement of reasonable expenses, all as
incurred in the ordinary course of business.
12.2 Assignment. The rights of the Company under this
Agreement may, without the consent of Employee, be assigned by the Company, in
its sole and unfettered discretion, to any person, firm, corporation or other
business entity which at any time, whether by purchase, merger or otherwise,
directly or indirectly, acquires all or substantially all of the assets or
business of the Company or an affiliate of the Company.
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12.3 Survival. The covenants, agreements, representations
and warranties contained in or made pursuant to this Agreement shall survive
Employee's termination of employment.
12.4 Third-Party Beneficiaries. This Agreement does not
create, and shall not be construed as creating, any rights enforceable by any
person not a party to this Agreement.
12.5 Waiver. The failure of either party hereto at any
time to enforce performance by the other party of any provision of this
Agreement shall in no way affect such party's rights thereafter to enforce the
same, nor shall the waiver by either party of any breach of any provision hereof
be deemed to be a waiver by such party of any other breach of the same or any
other provision hereof.
12.6 Hiring At Will. Any continuance of Employee's
employment by the Company after the term hereof shall be deemed a hiring at will
(unless such continuance is the subject of a new written agreement) and shall be
subject to termination with or without cause by either party upon delivery of
notice thereof.
12.7 Section Headings. The headings of the several
sections in this Agreement are inserted solely for the convenience of the
parties and are not a part of and are not intended to govern, limit or aid in
the construction of any term or provision hereof.
12.8 Notices. All notices, requests and other
communications hereunder shall be in writing and shall be delivered by courier
or other means of personal service (including by means of a nationally
recognized courier service or professional messenger service), or sent by telex
or telecopy or mailed first class, postage prepaid, by certified mail, return
receipt requested, in all cases, addressed to:
Company:
iMall, Inc.
0000 Xxxxxxxxx Xxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxx Xxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx Xxxxxxxxxx
With a copy to:
Loeb & Loeb LLP
0000 Xxxxxxxx Xxxxxxxxx
Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxx, Esq.
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Employee:
Xxxx Xxxxx
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With a copy to:
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Attention:
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All notices, requests and other communications shall be deemed given on the date
of actual receipt or delivery as evidenced by written receipt, acknowledgement
or other evidence of actual receipt or delivery to the address. In case of
service by telecopy, a copy of such notice shall be personally delivered or sent
by registered or certified mail, in the manner set forth above, within three
business days thereafter. Any party hereto may from time to time by notice in
writing served as set forth above designate a different address or a different
or additional person to which all such notices or communications thereafter are
to be given.
12.9 Severability. All Sections, clauses and covenants
contained in this Agreement are severable, and in the event any of them shall be
held to be invalid by any court, this Agreement shall be interpreted as if such
invalid Sections, clauses or covenants were not contained herein.
12.10 Governing Law and Venue. This Agreement is to be
governed by and construed in accordance with the laws of the State of Utah
applicable to contracts made and to be performed wholly within such State, and
without regard to the conflicts of laws principles thereof. Any suit brought
hereon shall be brought in the state or federal courts sitting in Los Angeles,
California, the parties hereto hereby waiving any claim or defense that such
forum is not convenient or proper. Each party hereby agrees that any such court
shall have in personam jurisdiction over it and consents to service of process
in any manner authorized by California law.
12.11 Non-transferability of Interest. None of the rights
of Employee to receive any form of compensation payable pursuant to this
Agreement shall be assignable or transferable except through a testamentary
disposition or by the laws of descent and distribution upon the death of
Employee. Any attempted assignment, transfer, conveyance, or other disposition
(other than as aforesaid) of any interest in the rights of Employee to receive
any form of compensation to be made by the Company pursuant to this Agreement
shall be void.
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12.12 Attorneys' Fees. If any legal action, arbitration or
other proceeding is brought for the enforcement of this Agreement, or because of
any alleged dispute, breach, default or misrepresentation in connection with
this Agreement, the successful or prevailing party shall be entitled to recover
reasonable attorneys' fees and other costs it incurred in that action,
arbitration or proceeding, in addition to any other relief to which it may be
entitled.
12.13 Gender. Where the context so requires, the use of
the masculine gender shall include the feminine and/or neuter genders and the
singular shall include the plural, and vice versa, and the word "person" shall
include any corporation, firm, partnership or other form of association.
12.14 Counterparts. This Agreement may be executed in one
or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same Agreement.
12.15 Construction. The language in all parts of this
Agreement shall in all cases be construed simply, according to its fair meaning,
and not strictly for or against any of the parties hereto. Without limitation,
there shall be no presumption against any party on the ground that such party
was responsible for drafting this Agreement or any part thereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the date hereinabove set forth.
THE COMPANY
iMall, Inc.
By:/s/
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Its:
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Title:
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EMPLOYEE
/s/ XXXX XXXXX
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Xxxx Xxxxx
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EXHIBIT A
CALIFORNIA LABOR CODE SECTION 2870
(a) Any provision in an employment agreement which provides that an
employee shall assign, or offer to assign, any of his or her rights in an
invention to his or her employer shall not apply to an invention that the
employee developed entirely on his or her own time without using the employer's
equipment, supplies, facilities, or trade secret information except for those
inventions that either:
(1) Relate at the time of conception or reduction to practice
of the invention to the employer's business, or actual or demonstrably
anticipated research or development of the employer.
(2) Result from any work performed by the employee for the
employer.
(b) To the extent a provision in an employment agreement purports to
require an employee to assign an invention otherwise excluded from being
required to be assigned under subdivision (a), the provision is against the
public policy of this state and is unenforceable.
