Employment Agreement dated as of November 14, 2018 by and between Novume Solutions, Inc. and Mathew Hill date as of November 14, 2018

This EMPLOYMENT AGREEMENT (this “Agreement”) is dated as of the 14th day of November, 2018 (the “Effective Date”), by and between Novume Solutions, Inc. (the “Company”), a Delaware corporation, and Matthew Hill (the “Executive”).

 

The Company desires to employ the Executive, and the Executive wishes to accept such employment with the Company, upon the terms and conditions set forth in this Agreement.

In consideration of the mutual promises and agreements set forth herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, agree as follows:

a) The Executive’s initial title shall be Chief Science Officer. The Executive’s duties are to be determined by the Chief Executive Officer of the Company (the “Chief Executive Officer”); provided that such duties are reasonably consistent with the role of Chief Science Officer. The Executive shall perform such duties and report as directed by the Chief Executive Officer. The Executive’s position and assignments are subject to change. The Executive hereby accepts such employment by the Company upon the terms and conditions hereinafter set forth.

b) The Executive’s employment hereunder shall be effective as of the Closing Date of that certain Asset Purchase Agreement by and among the Company, OpenALPR Technology, Inc. and Executive, dated November 14, 2018 (as defined therein), and shall continue until the 3rd anniversary thereof unless terminated earlier pursuant to Section 8 of this Agreement; provided that, on such 3rd anniversary of the Closing Date and each annual anniversary thereafter (such date and each annual anniversary thereof, a “Renewal Date”), the Agreement shall be deemed to be automatically extended, upon the same terms and conditions, for successive periods of one year, unless either party provides written notice of its intention not to extend the term of the Agreement at least ninety (90) days prior to the applicable Renewal Date. The period during which the Executive is employed by the Company hereunder is hereinafter referred to as the “Employment Term.”

3. Duties. The Executive shall have such duties as are assigned or delegated to him consistent with his title as Chief Science Officer. The Executive shall devote substantially all his working time and attention to the business of the Company and shall cooperate fully in the advancement of the best interests of the Company. Subject to approval from the Company in writing in advance, the Executive, during the term of this Agreement or any extensions or renewals thereof agrees not to engage in any activities outside of the scope of the Executive’s employment that would detract from, or interfere with, the fulfillment of his responsibilities or duties under this Agreement.

4. Expenses. Subject to compliance by the Executive with such policies regarding expenses and expense reimbursement as may be adopted from time to time by the Company, the Executive is authorized to incur reasonable expenses in the performance of his duties hereunder in furtherance of the business and affairs of the Company, and the Company will reimburse the Executive for all such reasonable expenses, upon the presentation by the Executive of an itemized account satisfactory to the Company in substantiation of such expenses when claiming reimbursement.

5. Employee Benefits; Vacations. The Executive shall be eligible to participate in such medical, retirement and other employee benefit plans of the Company that may be in effect or modified from time to time, to the extent he is eligible under the terms of those plans, on the same basis as other similarly situated executive officers of the Company or, at the option of the Executive, he may instead elect to receive monthly payments equal to the amount of the monthly medical insurance premiums which the Company would otherwise pay on his behalf in lieu of Executive receiving medical insurance. Notwithstanding the foregoing, in the event that the Executive chooses to receive monthly payments in lieu of receiving medical insurance and any federal, state or local law, now or in the future, (a) prohibits any employee from failing to accept medical insurance offered by his employer, the Company shall not be required to provide the Executive with monthly payments equal to the amount of the medical insurance premiums which the Company would otherwise pay on his behalf and the Executive shall either accept the medical insurance provided by the Company or reject such insurance without any reimbursement or payment in lieu thereof and/or (b) financially penalizes the Company for not providing medical insurance to an employee but permits the Company to pay to the employee sums in lieu of providing medical insurance, the Company shall deduct from the monthly payments to be made to the Executive the amount of such financial penalty until such penalty is reimbursed in full to the Company. The Executive shall be entitled to vacation in accordance with the policies of the Company in effect from time to time, as determined by the Board.

 

6. Indemnification. The Executive shall be indemnified and held harmless consistent with the provisions of the by-laws of the Company in effect at that time but in no event shall the Executive receive diminished rights or rights less than those rights provided by applicable law. The Company shall maintain reasonable insurance on behalf of Executive against any liability asserted against him and incurred by him in his capacity as an officer of the Company.

7. Taxation of Payments and Benefits. The Company shall make deductions, withholdings and tax reports with respect to payments and benefits under this Agreement to the extent that it reasonably and in good faith believes that it is required to make such deductions, withholdings and tax reports. Payments under this Agreement shall be in amounts net of any such deductions or withholdings. Nothing in this Agreement shall be construed to require the Company to make any payments to compensate the Executive for any adverse tax effect associated with any payments or benefits or for any deduction or withholding from any payment or benefit.

8. Termination. Either the Executive or the Company may terminate the employment relationship at any time, with or without Cause (as such term is defined in Section 12) on advance notice as provided herein or with immediate effect if the termination is for Cause. The Executive agrees to give the Employer at least six (6) months’ prior written notice if he decides to terminate his employment. Except in the case of a termination for Cause, the Company agrees that it will provide identical notice. Upon termination of the Executive’s employment for any reason, the Executive will be entitled to any earned but unpaid Base Salary, any bonus approved prior to termination, reimbursement for unreimbursed expenses properly incurred by the Executive prior to the termination, his stock and vested stock options, and if terminated for reasons other than Cause or if he resigns for reasons other than Good Reason such employee benefits (including equity compensation), if any, to which the Executive may be entitled under the Company’s employee benefit plan(s) as of the termination. Additionally:

 

a) Subject to compliance with Section 8(d), in the event that the Executive’s employment is terminated by the Company for reasons other than Cause (as such term is defined in Section 12), which includes but is not limited to the de facto termination of the Executive resulting from the Company electing to allow or cause this Agreement to expire under Section 1(b), or in the event the Executive resigns his employment for Good Reason (as defined in Section 12), the Executive will be provided a severance package equal to a pre-determined number of months of base salary and such percentage of health premiums for the Executive as would have been paid for by the Company (pursuant to the applicable policy and plan documents) during the corresponding time period (collectively, the “Separation Payment”) pursuant to the schedule below:

 

 

The Separation Payment shall be paid in equal monthly installments and shall begin within fifteen (15) business days of the effective date of the release noted in Section 8(d).

b) In the event that the Executive’s employment is terminated for Cause or the Executive resigns without Good Reason, the Executive will not be entitled to any Separation Payment or any other severance remuneration except as otherwise specifically set forth herein.

c) Notwithstanding any termination of the Executive’s employment for any reason (with or without Cause or Good Reason), the Executive will continue to be bound by the provisions of the Proprietary Rights Agreement (as defined below).

d) All payments and benefits provided pursuant to Section 8(a) shall be conditioned upon the Executive’s execution and non-revocation of a general release of liabilities in favor of the Company which is prepared and provided by the Company; provided that such release is subject to Executive’s consent, which shall not be unreasonably withheld, conditioned or delayed. The Executive’s refusal to execute such general release shall constitute a waiver by the Executive of any and all benefits referenced in Section 8(a). The Company will not be obligated to commence or continue any such payments to the Executive under Section 8(a) in the event the Executive materially breaches the terms of this Agreement or the Proprietary Rights Agreement (as defined below) and fails to cure such breach within thirty (30) days of written notice thereof detailing such breach.

9. Confidentiality, Non–Solicitation and Invention Assignment Agreement. The Company considers the protection of its confidential information and proprietary materials to be very important. Therefore, as a condition of the Executive’s employment, the Executive will be required to execute a confidentiality, non-solicitation and invention assignment agreement in the form attached hereto as Exhibit A (the “Proprietary Rights Agreement”) on the date hereof.

10. Documents, Records, etc. Subject to the terms and provisions of the Proprietary Rights Agreement: (a) all documents, records, data, apparatus, equipment and other physical property, whether or not pertaining to Confidential Information (as defined in the Proprietary Rights Agreement), which are furnished to the Executive by the Company or are produced by the Executive in connection with the Executive’s employment will be and remain the sole property of the Employer; (b) the Executive will return to the Company all such materials and property as and when requested by the Employer; and (c) the Executive will return all such materials and property within ten (10) days upon termination of the Executive’s employment for any reason.

  

11. No Conflict. Each party hereby represents and warrants to the other that (a) this Agreement constitutes that party’s legal and binding obligation, enforceable against it or him in accordance with its terms, (b) it or his execution and performance of this Agreement does not and will not breach any other agreement, arrangements, understanding, obligation of confidentiality or employment relationship to which it or he is a party or by which it he is bound, and (c) while the Executive is employed by the Company, it or he will not enter into any agreement, either written or oral, in conflict with this Agreement or it or his obligations hereunder.

12. Definitions.

a) The term “Cause” shall mean (i) the Executive’s intentional, willful or knowing material failure or unreasonable refusal to follow, support or enforce any legal or regulatory requirement applicable to the Company or the Company’s policies, as adopted by the Board of Directors from time to time and that are provided to Executive orally or in writing, (ii) the Executive’s intentional, willful or knowing material failure or unreasonable refusal to perform the Executive’s duties (other than as a result of physical or mental illness, accident or injury); (iii) dishonesty, willful or gross misconduct, gross ineptitude, or illegal conduct by the Executive in connection with the Executive’s employment with the Company; (iv) the Executive’s conviction of, or plea of guilty or nolo contendere to, a charge of commission of a felony (exclusive of any felony relating to negligent operation of a motor vehicle); and (v) a material breach by the Executive of this Agreement or the Proprietary Rights Agreement; provided, however, in the cases of clauses (i) and (iv) above, gross ineptitude, and “Cause” under the final sentence of this paragraph, the Company shall be required to give the Executive thirty (30) calendar days prior written notice of its intention to terminate the Executive for Cause and the grounds thereof and the Executive shall have the opportunity during such thirty (30) day period to meet with a Company representative designated by the Board and cure such event if such event is capable of being cured; provided, further, that in the event that the Executive terminates his employment with the Company during such thirty (30) day period for any reason, such termination shall be considered a termination for Cause. For purposes of this paragraph (a), no act or failure to act on the part of the Executive shall be considered “willful” unless it is intentionally done, or intentionally omitted to be done, by the Executive in bad faith or without reasonable belief that the Executive’s action or omission was in the best interests of the Company. For purposes of this paragraph (a) any willful or grossly negligent conduct of the Executive that results in the failure of the Company to comply with a significant financial statutory or regulatory requirement shall be considered grounds for termination for Cause.

 

b) The term “Good Reason” shall mean (i) any material reduction of the Executive’s Base Salary, unless similar reductions are imposed on all similarly situated executive officers of the Company (ii) any material breach by the Company of its obligations under this Agreement and (iii) a change without the Executive’s consent in the principal location of the Company’s office to an office that is either more than 35 miles from the Company’s principal offices or the Executive’s home address (if such move materially increases the Executive’s commute) (iv) any material change to Executive’s duties (absent Executive’s consent) and (v) the Company’s failure to obtain an agreement from any successor to the Company to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no succession had taken place, except where such assumption occurs by operation of law; provided that in any event the Executive shall provide the Company with written notice of the Executive’s intention to terminate the Executive’s employment for Good Reason and the grounds thereof within thirty (30) days after the occurrence of the event that the Executive believes constitutes Good Reason, and provided further, that the Executive provides the Company with an opportunity to cure such event during the thirty (30) day period following receipt of such notice from the Executive, if the event is capable of being cured or, if not capable of being cured, to have the Company’s representatives meet with the Executive and the Executive’s counsel to be heard regarding whether Good Reason exists for the Executive to terminate the Executive’s employment with the Company.

c) The term “person” shall mean any individual, corporation, firm, association, partnership, other legal entity or other form of business organization.

a) Anything in this Agreement to the contrary notwithstanding, if at the time of the Executive’s separation from service within the meaning of Section 409A of the Internal Revenue Code (“Code”), the Company determines that the Executive is a “specified employee” within the meaning of Section 409A(a)(2)(B)(i) of the Code, then to the extent any payment or benefit that the Executive becomes entitled to under this Agreement on account of the Executive’s separation from service would be considered deferred compensation subject to the 20 percent additional tax imposed pursuant to Section 409A(a) of the Code as a result of the application of Section 409A(a)(2)(B)(i) of the Code, such payment shall not be payable and such benefit shall not be provided until the date that is the earlier of (A) six months and one day after the Executive’s separation from service, or (B) the Executive’s death. If any such delayed cash payment is otherwise payable on an installment basis, the first payment shall include a catch-up payment covering amounts that would otherwise have been paid during the six-month period but for the application of this provision, and the balance of the installments shall be payable in accordance with their original schedule.

b) The parties intend that this Agreement will be administered in accordance with Section 409A of the Code. To the extent that any provision of this Agreement is ambiguous as to its compliance with Section 409A of the Code, the provision shall be read in such a manner so that all payments hereunder comply with Section 409A of the Code. The parties agree that this Agreement may be amended, as reasonably requested by either party, and as may be necessary to fully comply with Section 409A of the Code and all related rules and regulations in order to preserve the payments and benefits provided hereunder without additional cost to either party.

c) The determination of whether and when a separation from service has occurred shall be made by the Company in accordance with the presumptions set forth in Treasury Regulation Section 1.409A-1(h).

d) The Company makes no representation or warranty and shall have no liability to the Executive or any other person if any provisions of this Agreement are determined to constitute deferred compensation subject to Section 409A of the Code but do not satisfy an exemption from, or the conditions of, such Section.

14. Successors and Assigns; Entire Agreement; No Assignment. This Agreement shall be binding upon, and shall inure to the benefit of the parties and their respective successors, heirs, distributes and personal representatives including, with respect to the Company, the successor of Company through merger, acquisition, corporate reorganization, or any other business combination. This Agreement and the Proprietary Rights Agreement contain the entire agreement between the parties with respect to the subject matter hereof and supersede other prior and/or contemporaneous arrangements or understandings with respect thereto. Neither party may assign this Agreement without the prior written consent of the other party; however, the Company may assign this Agreement, without the consent of the Executive, to any successor (whether direct or indirect, by purchase, merger, consolidation, or otherwise) to all or substantially all of the business or assets of the Company. In the event of any conflict or inconsistency between the terms and provisions of this Agreement and the terms and provisions of that certain Asset Purchase Agreement among the Company, Executive and OpenALPR Technology, Inc., a Florida corporation (the “Purchase Agreement”), the terms and provisions of the Purchase Agreement shall control.

15. Notices. All notices and other communications required or permitted hereunder or necessary or convenient in connection herewith shall be in writing and shall be deemed to have been given when hand-delivered, mailed by registered or certified mail (three days after deposited), or sent by a nationally recognized courier service, to the following address (provided that notice of change of address shall be deemed given only when received):

 

or to such other names and addresses as the Company or the Executive, as the case may be, shall designate by notice to each other person entitled to receive notices in the manner specified in this Section 15. A copy of any such notice or communication under this Section 15 shall be transmitted via electronic mail to the party’s corresponding email address on the same day as the notice’s or communication’s hand-delivery, mailing, or transmission by courier service. An email notice, by itself, shall suffice as notice at such time as the sender receives a receipt acknowledgement or the recipient replies, directly or indirectly, to such notice.

16. Changes; No Waiver; Remedies Cumulative. The terms and provisions of this Agreement may not be modified or amended, or any of the provisions hereof waived, temporarily or permanently, without the prior written consent of each of the parties hereto. Either party’s waiver or failure to enforce the terms of this Agreement or any similar agreement in one instance shall not constitute a waiver of any rights hereunder with respect to other violations of this or any other agreement. No remedy conferred upon the Company or the Executive by this Agreement is intended to be exclusive of any other remedy, and each and every such remedy shall be cumulative and shall be in addition to any other remedy given hereunder or now or hereafter existing at law or in equity. Notwithstanding the foregoing, if (a) a party fails to provide written notice of an alleged violation of this Agreement, as provided herein, within one (1) year of the alleged violation or the date on which the complaining party should reasonably have become aware of such alleged violation, whichever is later, or (b) the alleged violation is not still in existence on the date of said notice and/or (c) the alleged violation has been ratified by the complaining party prior to said notice, such alleged violation shall be waived but only as to said specified instance and not as to all future occurrences of said alleged violation.

17. Governing Law. This Agreement and (unless otherwise provided) all amendments hereof and waivers and consents hereunder shall be governed by the law of the Commonwealth of Virginia, without regard to the conflicts of law principles.

18. Severability. The Executive and the Company agree that should any provision of this Agreement be declared illegal, invalid or unenforceable by a Court of competent jurisdiction, the validity of the remaining parts, terms or provisions shall not be affected thereby, and said illegal or invalid part, term or provision shall be deemed not to be a part of this Agreement.

19. Headings; Counterparts. All section headings are for convenience only. This Agreement may be executed in several counterparts, each of which is an original, and may be transmitted electronically, with such electronic copy serving as an original.

 

 

 

 

 

 

 

THIS PROPRIETARY RIGHTS AGREEMENT (the “Agreement’) dated as of the Effective Date of the Employment Agreement between the parties of even date herewith between Novume Solutions, Inc. (the “Company”), a Delaware corporation, and Matt Hill (“You”, “Your” or the “Executive”).

 

 

 

 

 

 

 

 

(ii)           You acknowledge that a business will be deemed a “Competitive Business” if it performs any of the services or manufactures or sells any of the products that are provided or offered by, or which could substitute for services or products of, the Company or the Company Group during the year preceding the termination of your employment with the Company or the Company Group or if it performs any other services and/or engages in the marketing, production, manufacture, distribution or sale of any product or service substantially similar to or which could substitute for services or products performed, produced, marketed, manufactured, distributed, sold, under development or planned by the Company or the Company Group during the year preceding the termination of your employment with the Company or the Company Group.

 

(iii)           You further acknowledge that, during the course of your employment with the Company or Company Group, the Company and/or the Company Group will furnish, disclose or make available to you valuable Confidential Information (as defined below) related to the Company’s and the Company Group’s business and that the Company and the Company Group will provide you with unique and specialized training, experiences and opportunities. You also acknowledge that such Confidential Information and such training, experiences and opportunities have been developed and will be developed by the Company and the Company Group through the expenditure by the Company and/or the Company Group of substantial time, effort and money and that the Company believes that all such Confidential Information and training, experiences and opportunities could be used by you to compete with the Company and/or the Company Group. Further, in the course of your employment with the Company and/or Company Group, you will be introduced to and collaborate with and maintain substantial relationships with customers, prospective customers, other business partners, and prospective business partners of the Company and/or Company Group.

(iv)           For purposes of this Agreement, “Confidential Information,” means confidential and proprietary information of the Company and/or the Company Group, whether in written, oral, electronic or other form, including but not limited to, information and facts concerning business plans, marketing plans, strategies, forecasts, customers, future customers, suppliers, licensors, licensees, partners, investors, affiliates or others, training methods and materials, financial information, pricing, sales prospects, client and partner lists, inventions, tests, test results, product assessments, improvements or any other scientific, technical or trade secrets of the Company and/or the Company Group or of any third party provided to you or the Company and/or the Company Group, provided that Confidential Information will not include information that is in the public domain or that is generally known by competitors of the Company or the Company Group other than through any fault, act or omission by you. The phrase, “trade secrets,” as used in this Agreement, will be given its broadest possible interpretation under the law of the Commonwealth of Virginia and will include, without limitation, anything tangible or intangible or electronically kept or stored, which constitutes, represents, evidences or records any secret scientific, technical, merchandising, production or management information, or any design, process, procedure, formula, invention, improvement or other confidential or proprietary information or documents.

 

(v)           You acknowledge that the Company has stated to you that the Company’s and the Company Group’s business reaches worldwide and that the Company and the Company Group does not operate as a traditional “brick and mortar” business with operations in a limited geographic area.

 

(vi)                      For purposes of this agreement, “termination” is defined to include your resignation or termination by the Company and/or the Company Group under any circumstances.

 

 

(b)           Non-Competition; Non-Solicitation; Non-Disparagement. During the period in which you are employed by the Company and/or the Company Group and for a period of one (1) year following the termination of your employment with the Company and/or the Company Group for any reason or for no reason, you will not, without the prior written consent of the Company and/or the Company Group, as applicable:

 

(i)           Subject only to the terms of your Employment Agreement with the Company of even date herewith, for yourself or on behalf of any other person or entity, directly or indirectly, either as principal, partner, stockholder, officer, director, member, employee, consultant, agent, representative or in any other capacity, own, manage, operate, control or consult with or for, or be employed by, or otherwise associate in any manner with, engage in, or have an ownership or other financial interest in, any Competitive Business to provide the same type of services you provided to the Company or the Company Group (each, a “Restricted Activity”) anywhere in the United States where the Company or the Company Group’s business has reached at any time during your employment with the Company or the Company Group (the “Restricted Territory”), except that nothing contained herein will preclude you from purchasing or owning securities of any such business if such securities are publicly traded, and provided that your holdings do not exceed two percent (2%) of the issued and outstanding securities of any class of securities of such business; or

 

(ii)           Either individually or on behalf of or through any third party, directly or indirectly, solicit, divert or appropriate or attempt to solicit, divert or appropriate any customer or other business partner of the Company or the Company Group (or any person or entity which was a customer or business partner, or a prospective customer or business partner with respect to which the Company and/or the Company Group has developed or made a sales presentation), with whom you had material contact during the period in which you were employed with the Company and/or the Company Group, for the purpose of competing with the Company or the Company Group or reducing the Company’s or the Company Group’s relationship with any customers or other business partners of the Company or the Company Group; or

 

(iii)           Either individually or on behalf of or through any third party, directly or indirectly, employ, hire, cause to be employed or engaged, or solicit the employment or the engagement as a consultant of any employee of or consultant to the Company or the Company Group while any such person is employed by or providing consulting services to the Company or the Company Group or within six (6) months after any such person ceases to be an employee or consultant with the Company Group; or

 

 

 

(v)           During the course of your employment with the Company and/or the Company Group and at all times thereafter (notwithstanding the one year period noted above), you will not make any statement that is professionally or personally disparaging or defamatory about the Company the Company Group, any of its officers, directors, shareholders or employees including, but not limited to, any statement that disparages any person, product, service, financing, financial condition, capability or other aspect of the Company’s or the Company Group’s business or any of its officers, directors, shareholders or employees. You further agree that during the course of your employment with the Company and/or the Company Group you will not engage in any conduct that is intended to or has the result of inflicting harm upon the professional or personal reputation of the Company or the Company Group or any of its officers, directors, shareholders or employees.

 

(vi)           The Company Group agrees and covenants that it shall take all corporate action within its power to cause its officers and directors to refrain from making any defamatory or disparaging remarks, comments, or statements concerning you during the term of your employment with the Company and/or the Company Group and at all times thereafter.

 

(vii) This Section 1(b) does not, in any way, restrict or impede the parties from exercising protected rights to the extent that such rights cannot be waived by agreement or from complying with any applicable law or regulation or a valid order of a court of competent jurisdiction or an authorized government agency, provided that such compliance does not exceed that required by the law, regulation, or order.

 

 

(d)           Survival of Acknowledgements and Agreements. Your acknowledgements and agreements set forth in this Section 1 will survive the termination of your employment with the Company for any reason or for no reason.

 

 

 

(a)           Property of the Company and/or the Company Group. All ideas, discoveries, creations, manuscripts and properties, innovations, improvements, know-how, inventions, designs, developments, apparatus, techniques, methods, and formulae (collectively the “Inventions”) which may be used in the business of the Company or the Company Group, whether patentable, copyrightable or not, which you conceive, reduce to practice or develop (whether alone or in conjunction with another or others) during the period while you are employed with the Company and/or the Company Group and which in any way relate to the Company’s or the Company Group’s business will be the sole and exclusive property of the Company and/or Company Group (as applicable). You agree that you will not publish any of the Inventions without the prior written consent of the Company and the Company Group. Without limiting the foregoing, you also acknowledge that all original works of authorship which are made by you (solely or jointly with others) during and within the scope of your employment or during your employment which relate to the business of the Company or the Company Group or a Company or Company Group affiliate and which are protectable by copyright are “works made for hire” pursuant to the United States Copyright Act (17 U.S.C. Section 101). You hereby assign to the Company Group or its designee all of your right, title and interest in and to all of the foregoing. You further represent that, to the best of your knowledge and belief, none of the Inventions will violate or infringe upon any right, patent, copyright, trademark or right of privacy, or constitute libel or slander against or violate any other rights of any person, firm or corporation, and that you will use your best efforts to prevent any such violation.

 

 

(b)           Cooperation. At any time during or after the period during which you are employed by the Company Group, you will fully cooperate with the Company Group and its attorneys and agents, as is reasonably necessary, in the preparation and filing of all papers and other documents as may be required to perfect the Company Group’s rights in and to any of such Inventions, including, but not limited to, joining in any proceeding to obtain letters patent, copyrights, trademarks or other legal rights with respect to any such Inventions in the United States and in any and all other countries, provided that the Company Group will bear the expense of such proceedings, and that any patent or other legal right so issued to you personally will be assigned by you to the Company Group or its designee without charge by you.

 

(c)           Licensing and Use of Innovations. With respect to any Inventions, and work of any similar nature (from any source), whenever created, which you have not prepared or originated in the performance of your employment, but which you provide to the Company Group or incorporate in any Company Group product or system, to the extent that the Executive has the right, power, authority or discretion to do so, you hereby grant to the Company Group a royalty-free, fully paid-up, non-exclusive, perpetual and irrevocable license throughout the world to use, modify, create derivative works from, disclose, publish, translate, reproduce, deliver, perform, dispose of, and to authorize others so to do, all such Inventions. You will not include in any Inventions you deliver to the Company Group or use on its behalf, without the prior written approval of the Company Group, any material which is or will be patented, copyrighted or trademarked by you or others unless you provide the Company Group with the written permission of the holder of any patent, copyright or trademark owner for the Company Group to use such material in a manner consistent with then-current Company Group policy. Subject to the license referred to hereinabove, nothing in this Agreement shall be construed as an assignment, transfer, waiver, or relinquishment by you of any rights, title, or interests (including, without limitation, patent, copyright and trademark interests) in Inventions or works of authorship conceived or developed by you after your employment with the Company.

 

 

 

(c)           You recognize that the Company and the Company Group have received, and in the future will receive, confidential or proprietary information from third parties subject to a duty on the Company and/or the Company Group to maintain the confidentiality of such information and to use it only for certain limited purposes. You agree to hold all such confidential and proprietary information in the strictest confidence and not to disclose it to any person or entity or to use it except as necessary in the course of performance of your duties for the Company and/or the Company Group consistent with the Company’s and/or the Company Group’s agreement with such third parties or pursuant to a court order or other applicable legal process (in which instance you will provide the Company and the Company Group with notice of such court order or other applicable legal process within four 4 business day of your receipt of same).

 

(a)           Agreement Enforceable if You Are Transferred. You acknowledge and agree that if consistent with the Employment Agreement of even date herewith or pursuant to your agreement you should transfer between or among any affiliates of the Company, wherever situated, or be promoted or reassigned to functions other than your present functions, all terms of this Agreement shall continue to apply with full force.

(b)           All notices and other communications required or permitted hereunder or necessary or convenient in connection herewith shall be in writing and shall be deemed to have been given when hand-delivered, mailed by registered or certified mail (three days after deposited), or sent by a nationally recognized courier service (i.e. UPS, FedEx), to the following address (provided that notice of change of address shall be deemed given only when received):

 

Chantilly, VA 20151

Attn : Robert Berman, CEO

 

Commerce Township, MI 48382

or to such other names and addresses as the Company, the Company Group or the Executive, as the case may be, shall designate by notice to each other person entitled to receive notices in the manner specified in this Section 6(b). A copy of any such notice or communication under this Section 6(b) shall be transmitted via electronic mail to the party’s corresponding email address on the same day as the notice’s or communication’s hand-delivery, mailing, or transmission by courier service. An email notice, by itself, shall suffice as notice at such time as the sender receives a receipt acknowledgement or the recipient replies, directly or indirectly, to such notice.

 

(c)           Entire Agreement. This Agreement and the Employment Agreement contain the entire agreement between the parties with respect to the subject matter hereof and supersede other prior and contemporaneous arrangements, agreements, promises, warranties and understandings with respect thereto. No statement, representation, warranty, covenant or agreement of any kind not expressly set forth in this Agreement or the Employment Agreement will affect, or be used to interpret, change or restrict, the express terms and provisions of this Agreement.

 

(d)           Modifications, Amendments and Waivers. The terms and provisions of this Agreement may not be modified, amended, altered, revised, changed, waived, terminated, cancelled and/or rescinded, in whole or in part, except by a writing executed by the parties hereto or except as otherwise specifically and expressly set forth herein. No such waiver, nor any departure from the terms hereof, will be deemed to be or will constitute a waiver or consent with respect to any other terms or provisions of this Agreement, whether or not similar. Each such waiver or consent will be effective only in the specific instance and for the purpose for which it was given, and will not constitute a continuing waiver or consent.

(e)           Assignment. The Company may assign its rights and obligations hereunder to any person or entity that succeeds to all or substantially all of the Company or the Company Group’s business. You may not assign your rights and obligations under this Agreement without the prior written consent of the Company and the Company Group and any such attempted assignment by you without the prior written consent of the Company and the Company Group will be void.

 

(f)           Benefit. All statements, representations, warranties, covenants and agreements in this Agreement will be binding on the parties hereto and will inure to the benefit of the respective successors and permitted assigns of each party hereto. Nothing in this Agreement will be construed to create any rights or obligations except between the Company and the Company Group and you, and no person or entity other than the Company Group will be regarded as a third-party beneficiary of this Agreement.

 

(g)           Governing Law. This Agreement shall be deemed to have been made in the Commonwealth of Virginia, and the validity, interpretation and performance of this Agreement shall be governed by, and construed in accordance with, the internal law of the Commonwealth of Virginia, without giving effect to conflict of law principles, and specifically excluding any conflict or choice of law rule or principle that might otherwise refer construction or interpretation of this Agreement to the substantive law of another jurisdiction.

 

(h)           Jurisdiction, Venue and Service of Process. Any legal action or proceeding with respect to this Agreement must be brought in a court of competent jurisdiction in the Commonwealth of Virginia and shall be subject to the jurisdiction of such courts only. By execution and delivery of this Agreement, each of the parties hereto accepts for itself and in respect of its property, generally and unconditionally, the exclusive jurisdiction of the aforesaid courts.

 

(i)           Waiver of Jury Trial. Any action, demand, claim or counterclaim arising under or relating to this Agreement will be resolved by a judge alone and each of the Company Group and you waive any right to a jury trial thereof.

 

(j)           Severability. The parties intend this Agreement to be enforced as written. However, (i) if any provision, or part thereof, is held to be unenforceable because of the duration of such provision or the geographic area covered thereby, the court making such determination will have the power to reduce the duration and/or geographic area of such provision, and/or to delete specific words and phrases (“blue-pencilling”), and in its reduced or blue-pencilled form such provision will then be enforceable and will be enforced to the fullest extent permitted by law and (ii) if any portion or provision of this Agreement is to any extent declared illegal, void, invalid, or otherwise unenforceable by a court of competent jurisdiction which shall determine that any such illegal, void, invalid or unenforceable provisions cannot be cured by blue-pencilling, then the remaining parts, terms or provisions shall not be affected thereby and shall be enforceable between the parties to the fullest extent of the law, and said illegal, void, invalid or otherwise unenforceable part, term or provision shall be deemed not to be a part of this Agreement.

 

(k)           Headings and Captions. The headings and captions of the various subdivisions of this Agreement are for convenience of reference only and will in no way modify or affect the meaning or construction of any of the terms or provisions hereof.

 

(l)           Injunctive Relief. You hereby expressly acknowledge that the restrictions and covenants set forth in Section 1, 2, and 3 are material and critically important provisions of this Agreement and that any breach or threatened breach of any of the terms and/or conditions set forth in Section 1, 2 or 3 of this Agreement may result in substantial, continuing and irreparable injury to the Company Group and/or damages that may be difficult to quantify. Therefore, in addition to any other remedy that may be available to the Company Group, it may be appropriate that the Company Group receive a temporary restraining order and/or preliminary injunction, by a court of appropriate jurisdiction in the event of any breach or threatened breach of the terms of Section 1, 2 or 3 of this Agreement, without the necessity of proving actual damages or irreparable harm, and without the necessity of posting any bond or undertaking for the temporary restraining order or preliminary injunction.

 

(m)         No Waiver of Rights, Powers and Remedies. No failure or delay by a party hereto in exercising any right, power or remedy under this Agreement, and no course of dealing between the parties hereto or in any trade or industry, will operate as a waiver of any such right, power or remedy of the party. No single or partial exercise of any right, power or remedy under this Agreement by a party hereto, nor any abandonment or discontinuance of steps to enforce any such right, power or remedy, will preclude such party from any other or further exercise thereof or the exercise of any other right, power or remedy hereunder. The election of any remedy by a party hereto will not constitute a waiver of the right of such party to pursue other available remedies. No notice to or demand on a party not expressly required under this Agreement will entitle the party receiving such notice or demand to any other or further notice or demand in similar or other circumstances or constitute a waiver of the rights of the party giving such notice or demand to any other or further action in any circumstances without such notice or demand. Notwithstanding the foregoing, if (a) a party fails to provide written notice of an alleged violation of this Agreement, as provided herein, within one (1) year of the alleged violation or the date on which the complaining party should reasonably have become aware of such alleged violation, whichever is later, or (b) the alleged violation is not still in existence on the date of said notice and/or (c) the alleged violation has been ratified by the complaining party prior to said notice, such alleged violation shall be waived but only as to said specified instance and not as to all future occurrences of said alleged violation.

 

(n)           Counterparts. This Agreement may be executed in two or more counterparts, and by different parties hereto on separate counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument.

 

 

(o)           Opportunity to Review. You hereby acknowledge that you have had adequate opportunity to review these terms and conditions and to reflect upon and consider the terms and conditions of this Agreement, and that you have had the opportunity to consult with counsel of your own choosing regarding such terms. You further acknowledge that you fully understand the terms of this Agreement and have voluntarily executed this Agreement.

 

(p)           Effective Date. The Effective Date of this Agreement shall be the same Effective Date as the date in the Employment Agreement. The Effective Date is the date which this Agreement first becomes binding on the Company and the Executive.

 

 

 

IN WITNESS WHEREOF, the parties have executed this Proprietary Rights Agreement as of the date of the Employment Agreement of even date herewith.