EXHIBIT 10.28
INDEMNIFICATION AGREEMENT
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THIS EMPLOYMENT AGREEMENT entered into as of July 14, 1997, between Top
Source Technologies, Inc. and its subsidiaries (collectively the "Company") and
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (the "Executive").
WHEREAS, the Company desires to employ Executive and to ensure the
continued availability to the Company of the Executive's services, and the
Executive is willing to accept such employment and render such services, all
upon and subject to the terms and conditions contained in this Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants set forth in this Agreement, and intending to be legally bound, the
Company and the Executive agree as follows:
1. Term of Employment.
(a) Term. The Company hereby employs the Executive, and the
Executive hereby accepts employment with the Company, for a period
commencing on the date of this Agreement and ending 13 months from the
date hereof (the "Term"), unless either the Company or the Executive
has given notice to terminate this Agreement. The Company's right to
terminate this Agreement shall be as specified in Section 5 hereof.
(b) Continuing Effect. Notwithstanding any termination of this
Agreement at the end of the Term or otherwise, the provisions of
Sections 6, 7 and 8 shall remain in full force and effect.
2. Duties.
(a) General Duties. The Executive shall serve as special
assistant to the President of the Company and shall have such duties
and responsibilities as are specifically given to him by the President.
The Executive shall use his best efforts to perform his duties and
discharge his responsibilities pursuant to this Agreement competently,
carefully and faithfully.
(b) Devotion of Time. The Executive shall devote an average of
four days per month to the affairs of the Company.
3. Compensation and Expenses.
(a) Salary. For the services of the Executive to be rendered
under this Agreement, the Company shall pay the Executive a monthly
salary of $16,666.67. The Company shall pay the Executive his monthly
salary in such increments as the Company generally pays its employees.
(b) Expenses. To the extent that the Executive has received
the prior approval of the Company's President, the Company shall
reimburse him or advance funds to the Executive for all reasonable
travel, entertainment and miscellaneous expenses provided further that
the Executive properly accounts for such expenses to the Company in
accordance with the Company's practices.
4. Benefits.
(a) Health Insurance. The Company shall pay for the health
insurance coverage for the Executive under the Company's then existing
group health insurance plan. The Company shall not reimburse the
Executive for any dependent coverage or pay for or reimburse him for
any uninsured medical expenses.
(b) Other Benefits. Except as provided for in Section 4(a)
above and any rights that accrue under C.O.B.R.A., the Executive
expressly waives the right to participate in any and all employee
benefit plans that the Executive maintains for its employees. The
Company shall assign to the Executive its rights in a $900,000 term
life insurance policy insuring the life of the Executive.
5. Termination.
(a) Cause. The Company may terminate the Executive's
employment pursuant to the terms of this Agreement at any time for
cause by giving written notice of termination. Such termination shall
become effective upon the giving of such notice. Upon any such
termination for cause, the Executive shall be paid compensation through
the date of termination. For purposes of this Section 5, "cause" shall
mean: (i) the Executive is convicted of a misdemeanor related to the
business of the Company or a felony; (ii) the Executive, in carrying
out his duties hereunder, has been found in a civil action to have
committed gross negligence or willful misconduct resulting, in either
case, in material harm to the Company; (iii) the Executive
misappropriates Company funds or otherwise defrauds the Company; (iv)
the Executive materially breaches any provision of Section 6, 7 or 8
hereof; or (v) the Executive is found in a civil action to have
committed any of the following acts or omissions: (1) recruited Company
personnel including the personnel of any subsidiaries during or after
termination of employment; or (2) failed to assign any invention or
technology to the Company which was developed or used by the Company,
including any intellectual property rights to any portion or facet of
the Company's overhead sound systems or failed to use his best efforts
to cause any inventor to do so within 90 days of written request by the
Company.
(b) Continuing Effect. Notwithstanding any termination of the
Executive's employment as provided in this Section 5 or otherwise, the
provisions of Sections 6, 7 and 8 shall remain in full force and
effect.
6. Non-Competition Agreement.
(a) Competition with the Company. Until termination of his
employment and for a period of 12 months commencing on the date of date
of termination of employment, the Executive, directly or indirectly, in
association with or as a stockholder, director, officer, consultant,
employee, partner, joint venturer, member or otherwise of or through
any person, firm, corporation, partnership, association or other
entity, shall not compete with the Company or any of its affiliates in
the offer, sale or marketing of the following products or services that
are competitive with the products or services offered by the Company,
within any metropolitan area in the United States or elsewhere in which
the Company is then engaged in the offer and sale of competitive
products or services:
(i) The marketing and sale of any sound systems for
use in cars and trucks including, but not limited to, as a
part of a package offered by what is commonly referred to as
an interior trim supplier;
(ii) The marketing and sale of oil analysis
products and services; and
(iii) The marketing and sale of technology relating
to moving seats and automobiles and trucks as a means of
reducing injuries to persons.
Provided, however, the foregoing shall not prevent Executive from
accepting employment with an enterprise engaged in two or more lines of
business, one of which is the same or similar to the Company's business
as described in (i), (ii) and (iii) above (the "Prohibited Business")
if Executive's employment is totally unrelated to the Prohibited
Business; provided, further, the foregoing shall not prohibit Executive
from owning up to 5% of the securities of any publicly-traded
enterprise engaged in the Prohibited Business provided Executive is not
an employee, director, officer, consultant to such enterprise or
otherwise reimbursed for services rendered to such enterprise.
(b) Solicitation of Customers. During the periods in which the
provisions of Section 6(a) shall be in effect, the Executive, directly
or indirectly, shall not seek Prohibited Business from any Customer (as
defined below) on behalf of any enterprise or business other than the
Company, refer Prohibited Business from any Customer to any enterprise
or business other than the Company or receive commissions based on
sales or otherwise relating to the Prohibited Business from any
Customer, or any enterprise or business other than the Company. For
purposes of this Section 6(b), the term "Customer" means any person,
firm, corporation, partnership, association or other entity to which
the Company or any of its affiliates sold or provided goods or services
during the 24-month period prior to the time at which any determination
is required to be made as to whether any such person, firm,
corporation, partnership, association or other entity is a Customer.
(c) No Payment. The Executive acknowledges and agrees that no
separate or additional payment shall be required to be made to him in
consideration of his undertakings in this Section 6.
7. Nondisclosure of Confidential Information. The Executive
acknowledges that during his employment he shall learn and shall have access to
Confidential Information regarding the Company and its affiliates, including
without limitation (i) confidential or secret plans, programs, documents,
agreements or other material relating to the business, services or activities of
the Company and its affiliates and (ii) trade secrets, market reports, customer
investigations, customer lists and other similar information that is proprietary
information of the Company or its affiliates (collectively referred to as
"Confidential Information"). The Executive acknowledges that such Confidential
Information as is acquired and used by the Company or its affiliates is a
special, valuable and unique asset. All records, files, materials and
Confidential Information obtained by the Executive in the course of his
employment with the Company are confidential and proprietary and shall remain
the exclusive property of the Company or its affiliates, as the case may be. The
Executive shall not, except in connection with and as required by his
performance of his duties under this Agreement, for any reason use for his own
benefit or the benefit of any person or entity with which he may be associated
or disclose any such Confidential Information to any person, firm, corporation,
association or other entity for any reason or purpose whatsoever without the
prior written consent of the board of directors of the Company, unless such
Confidential Information previously shall have become public knowledge through
no action by or omission of the Executive.
8. Criticism of the Company and the Executive.
(a) In order to induce the Company to enter into this
Agreement and pay the compensation to the Executive provided hereunder,
as well as granting the Executive up to 12 additional months to
exercise his stock options from the date such options would otherwise
be required to be exercised in the absence of this Agreement, the
Executive agrees not to criticize or disparage the Company, its
management, its board of directors or any of its employees whether in
writing, over an electronic media including the Internet or orally. In
response to any inquiries concerning the Company, except pursuant to a
subpoena or other legal process including court order, the Executive
shall be permitted to indicate in words or in substance that pursuant
to a written employment agreement, he agreed if asked, not to comment
concerning the Company. In addition to termination of his employment
pursuant to this Agreement, violation of this Section 8 by the
Executive shall require him to promptly repay to the Company the gross
amount of compensation paid to the Executive hereunder including the
social security and medicare taxes paid by the Company pursuant to this
Agreement. For purposes of this Section 8, any prohibited criticism or
disparagement by the Executive's wife, Birgitta, shall be deemed made
by the Executive.
(b) The Company agrees that it shall not criticize or
disparage the Executive whether in writing, over an electronic media
including the Internet or orally. In response to any inquiries
concerning the Executive, except pursuant to a subpoena or other legal
process including court order, the Company shall be permitted to
indicate in words or in substance that the Executive was employed by
the Company for a period of time, that he was an officer and director
for certain periods of time and what his compensation was while
employed by the Company. Beyond that, the Company shall not comment
further in response to any such inquiries.
9. Acknowledgement. The Executive represents to the Company that
nothing has come to his attention during the course of his employment with the
Company prior to execution of this Agreement that would lead him to believe that
the Company or any of the Company's officers, directors or employees have
engaged in any act or omission involving a violation of any law, rule or
regulation or which if reported to Chrysler Corporation might cause it to
terminate its business relationship with the Company.
10. Absence of Certain Liabilities. In consideration for the Company's
agreeing to employ the Executive pursuant to this Agreement, the Executive
hereby acknowledges that except as required pursuant to this Agreement or for
previous services rendered from the date of the Company's last payroll which
services were rendered at the same rate previously paid, the Company, its
officers and its directors have no liability pursuant to any written or oral
agreement or arising under any law, rule or regulation. Except as provided in
the previous sentence, the Executive acknowledges that as of the execution of
this Agreement neither the Company nor any of its officers or directors are
indebted to the Executive. At the conclusion of the final Term of this
Agreement, the Company and the Executive shall each exchange mutual releases.
Such releases shall exclude any obligations under separate written stock option
and indemnification agreements, any breach of any covenant of this Agreement and
any unknown past or any future actions or any failure to act of the Executive.
11. Equitable Relief. The Company and the Executive recognize that the
services to be rendered under this Agreement by the Executive are special,
unique and of extraordinary character, and that in the event of the breach by
the Executive of the terms and conditions of this Agreement or if the Executive,
without the prior consent of the board of directors of the Company, shall leave
his employment for any reason or take any action in violation of Section 6, 7 or
8 hereof, the Company shall be entitled to institute and prosecute proceedings
in any court of competent jurisdiction to enjoin the Executive from breaching
the provisions of Section 6, 7 or 8. In such action, the Company shall not be
required to plead or prove irreparable harm or lack of an adequate remedy at
law. Nothing contained in this Section 11 shall be construed to prevent the
Company from seeking such other remedy in case of any breach of this Agreement
by the Executive, as the Company may elect.
12. Assignability. The rights and obligations of the Company under this
Agreement shall inure to the benefit of and be binding upon the successors and
assigns of the Company, provided that such successor or assign shall acquire all
or substantially all of the assets and business of the Company. The Executive's
obligations hereunder may not be assigned or alienated and any attempt to do so
by the Executive shall be void.
13. Entire Agreement. This Agreement constitutes the entire Agreement
between the parties and supersedes all prior oral and written agreements between
the parties hereto with respect to the subject matter hereof. Neither this
Agreement nor any provision hereof may be changed, waived, discharged or
terminated orally, except by a statement in writing signed by the party or
parties against which enforcement or the change, waiver discharge or termination
is sought.
14. Severability. In the event any parts of this Agreement are found to
be void, the remaining provisions of this Agreement shall nevertheless be
binding with the same effect as though the void parts were deleted.
15. 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 instrument. The execution of this
Agreement may be by actual or facsimile signature.
16. Notices and Addresses. All notices, offers, acceptance and any
other acts under this Agreement (except payment) shall be in writing, and shall
be sufficiently given if delivered to the addressees in person, by Federal
Express or similar receipted delivery, by facsimile delivery or, if mailed,
postage prepaid, by certified mail, return receipt requested, as follows:
Executive: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
with a copy to: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
One Clearlake Centre
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
The Company: Top Source Technologies, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
▇▇▇▇▇, Chernay, Norris,
▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇
▇▇▇ ▇.▇. ▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile (▇▇▇) ▇▇▇-▇▇▇▇
or to such other address as either of them, by notice to the other may designate
from time to time. The transmission confirmation receipt from the sender's
facsimile machine shall be conclusive evidence of successful facsimile delivery.
Time shall be counted to, or from, as the case may be, the delivery in person or
by mailing.
17. Attorney's Fees. In the event that there is any controversy or
claim arising out of or relating to this Agreement, or to the interpretation,
breach or enforcement thereof, and any action or proceeding including an
arbitration proceeding is commenced to enforce the provisions of this Agreement,
the prevailing party shall be entitled to an award by the court or arbitrator,
as appropriate, of reasonable attorney's fees, costs and expenses.
18. Oral Evidence. This Agreement constitutes the entire Agreement
between the parties and supersedes all prior oral and written agreements between
the parties hereto with respect to the subject matter hereof. Neither this
Agreement nor any provision hereof may be changed, waived, discharged or
terminated orally, except by a statement in writing signed by the party or
parties against which enforcement or the change, waiver discharge or termination
is sought.
19. Additional Documents. The parties hereto shall execute such
additional instruments as may be reasonably required by their counsel in order
to carry out the purpose and intent of this Agreement and to fulfill the
obligations of the parties hereunder.
20. Governing Law. This Agreement and any dispute, disagreement, or
issue of construction or interpretation arising hereunder whether relating to
its execution, its validity, the obligations provided herein or performance
shall be governed or interpreted according to the internal laws of the State of
Florida without regard to choice of law considerations.
21. Section or Paragraph Headings. Section headings herein have been
inserted for reference only and shall not be deemed to limit or otherwise
affect, in any matter, or be deemed to interpret in whole or in part any of the
terms or provisions of this Agreement.
22. Loan. The Executive acknowledges that he currently owes the Company
$25,000. The Executive agrees to repay the Company the sum of $500 per month
commencing in August 1997 with the final payment of principal and 9% per annum
accrued interest due on July 31, 2000. Provided, however, 25% of the proceeds
from the sale of shares of common stock of the Company shall be applied as a
pre-payment of the loan, except for common stock pledged to serve any currently
existing margin loans, which proceeds may be paid to pay the margin loans.
IN WITNESS WHEREOF, the Company and the Executive have executed this
Agreement as of the date and year first above written.
TOP SOURCE TECHNOLOGIES, INC.
By:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇., President
By:
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Executive
