EMPLOYMENT AGREEMENT

"Base Period Income" shall be an amount equal to the Executive's annualized compensation calculated pursuant to section 6 herein for the initial term of this agreement;

 

"Board" shall mean the Board of Directors of the Company;

 

"Cause" shall mean any of the following:

 

(i)

The engaging by the Executive in illegal or fraudulent conduct, as evidenced by a determination in a binding and final judgment, order or decree of a court or administrative agency of competent jurisdiction, in effect after the exhaustion or lapse of all rights of appeal, in an action, suit or proceeding, whether civil, criminal, administrative or investigative, which the Board determines has a significant adverse impact on the Company in the conduct of the Company's business;

 

(ii)

 

(iii)

Willful or grossly negligent failure by Executive to perform his duties in a manner consistent with the Company's best interests; or

 

Willful violation by the Executive of the Company's policies and procedures.

 

"Code" shall mean the Internal Revenue Code of 1986, as amended from time to time

 

"Consolidated Group" means and includes the Company, all of OSI's current or future subsidiaries and any other corporations or divisions thereof, which are hereafter acquired by or consolidated with the OSI and which collectively carry on the business of OSI, the Company or any part thereof.;

 

"Notice of Termination" shall mean the notice described in Section 9 herein;

 

"Person" shall mean any individual, partnership, joint venture, association, trust, corporation or other entity, other than an Executive benefit plan of the Company or an entity organized, appointed or established pursuant to the terms of any such benefit plan;

 

"Termination Date" shall mean, except as otherwise provided in Section 10 herein,

 

The Executive's date of death;

 

Thirty (30) days after the delivery of the Notice of Termination if the Executive's employment is terminated by the Executive voluntarily; and

 

Sixty (60) days after the delivery of the Notice of Termination if the Executive's employment is terminated by the Company for any reason other than Cause.

 

EMPLOYMENT.

 

The Company hereby agrees to employ the Executive and the Executive hereby agrees to serve the Company, on the terms and conditions set forth herein.

 

The employment of the Executive by the Company pursuant to the provisions of this Agreement shall commence on the Effective Date and end on the Three Hundred Sixtieth day thereafter (360th) day thereafter, unless sooner terminated as hereinafter provided.

 

POSITIONS AND DUTIES.

 

 

 

PLACE OF PERFORMANCE.

 

In connection with the Executive's employment by the Company, the Executive shall be based at the principal Executive offices of the Company in North Dallas, Texas, except for where travel is required, or where otherwise required by the operations of the Company.

 

COMPENSATION AND RELATED MATTERS.

 

Commencing on the Effective Date hereof, and during the Period of Employment, the Company shall compensate the Executive in accordance with Exhibit A hereto. The Company will also issue to the Executive options as to the Common Stock of the Company as outlined in Exhibit A hereto.

 

 

The Executive shall also be entitled to all other benefits provided by the Company to its general Executives.

 

OFFICES.

 

 

 

TERMINATION FOR CAUSE.

 

If the Executive's employment with the Company is terminated by the Company for Cause, subject to the procedures set forth in Section 9 herein, the Executive shall be entitled to receive the Executive's Accrued Benefits as of the Termination Date. The Executive shall not be entitled to the receipt of any Termination Payment.

 

If the Company terminates the Executive for any reason other than Cause, then the Executive shall be entitled to a Termination Payment equal to Twelve Months Base Salary. Base Salary refers to Base Salary as defined in Exhibit A hereto.

 

TERMINATION NOTICE AND PROCEDURE.

 

Any termination by the Company or the Executive of the Executive's employment during the Employment Period shall be communicated by written Notice of Termination to the Executive, if such Notice of Termination is delivered by the Company, and to the Company, of such Notice of Termination is delivered by the Executive, all in accordance with the following procedures:

 

The Notice of Termination shall indicate the specific termination provision in this Agreement relied upon and shall set forth in reasonable detail the facts and circumstances alleged to provide a basis for termination.

 

NONDISCLOSURE OF PROPRIETARY INFORMATION.

 

For the purposes of this Paragraph 11, including all subparagraphs, "the Company" shall mean the Company or OSI. Recognizing that the Company is presently engaged, and may hereafter continue to be engaged, in the research and development of processes, the obtainment and sale of products or performance of services, which involve experimental and inventive work and that the success of its business depends upon the protection of the processes, products and services by patent, copyright or by secrecy and that the Executive has had, or during the course of his engagement may have, access to Proprietary Information, as hereinafter defined, of the Company or other information and data of a secret or proprietary nature of the Company which the Company wishes to keep confidential and the Executive has furnished, or during the course of his engagement may furnish, such information to the Company, the Executive agrees that (a) "Proprietary Information" shall mean any and all methods, inventions, improvements or discoveries, whether or not patentable or copyrightable, and any other information of a similar nature related to the business of the Company disclosed to the Executive or otherwise made known to him as a consequence of or through his engagement by the Company (including information originated by the Executive) in any technological area previously developed by the Company or developed, engaged in, or researched, by the Company during the term of the Executive's engagement, including, but not limited to, trade secrets, processes, products, formulae, apparatus, techniques, know-how, marketing plans, data, improvements, strategies, forecasts, customer lists, and technical requirements of customers, unless such information is in the public domain to such an extent as to be readily available to competitors.

 

The Executive acknowledges that the Company has exclusive property rights to all Proprietary Information and the Executive hereby assigns all rights he might otherwise possess in any Proprietary Information to the Company. Except as required in the performance of his duties to the Company or otherwise as required by law, the Executive will not at any time during or after the term of his engagement, which term shall include any time in which the Executive may be retained by the Company as a consultant, directly or indirectly use, communicate, disclose or disseminate any Proprietary Information or any other information of a secret, proprietary, confidential or generally undisclosed nature relating to the Company, its products, customers, processes and services, including information relating to testing, research, development, manufacturing, marketing and selling.

 

All documents, records, notebooks, notes, memoranda and similar repositories of, or containing, Proprietary Information or any other information of a secret, proprietary, confidential or generally undisclosed nature relating to the Company or its operations and activities made or compiled by the Executive at any time or made available to him prior to or during the term of his engagement by the Company, including any and all copies thereof, shall be the property of the Company, shall be held by him in trust solely for the benefit of the Company, and shall be delivered to the Company by him on the termination of his engagement or at any other time on the request of the Company.

 

The Executive will not assert any rights under any inventions, copyrights, discoveries, concepts or ideas, or improvements thereof, or know-how related thereto, as having been made or acquired by him prior to his being engaged by the Company or during the term of his engagement if based on or otherwise related to Proprietary Information.

 

ASSIGNMENT OF INVENTIONS.

 

For purposes of this Paragraph 12, the term "Inventions" shall mean discoveries, concepts, and ideas, whether patentable or copyrightable or not, including but not limited to improvements, know-how, data, processes, methods, formulae, and techniques, as well as improvements thereof or know-how related thereto, concerning any past, present or prospective activities of the Company which the Executive makes, discovers or conceives (whether or not during the hours of his engagement or with the use of the Company's facilities, materials or personnel), either solely or jointly with others during his engagement by the Company or any affiliate and, if based on or related to Proprietary Information, at any time after termination of such engagement. All inventions shall be the sole property of the Company, and Executive agrees to perform the provisions of this paragraph 12 with respect thereto without the payment by the Company of any royalty or any consideration therefor other than the regular compensation paid to the Executive in the capacity of an Executive or consultants;

 

The Executive shall maintain written notebooks in which he shall set forth, on a current basis, information as to all Inventions, describing in detail the procedures employed and the results achieved as well as information as to any studies or research projects undertaken on the Company's behalf. The written notebooks shall at all times be the property of the Company and shall be surrendered to the Company upon termination of his engagement or, upon request of the Company, at any time prior thereto.

 

 The Executive shall apply, at the Company's request and expense, for United States and foreign letters patent or copyrights either in the Executive's name or otherwise as the Company shall desire.

 

The Executive hereby assigns to the Company all of his rights to such Inventions, and to applications for United States and/or foreign letters patent or copyrights and to United States and/or foreign letters patent or copyrights granted upon such Inventions.

 

The Executive represents that his performance of all the terms of this Agreement and as an Executive of or consultant to the Company does not and will not breach any trust prior to his employment by the Company. The Executive agrees not to enter into any agreement either written or oral in conflict herewith and represents and agrees that he has not brought and will not bring with him to the Company or use in the performance of his responsibilities at the Company any materials or documents of a former employer which are not generally available to the public, unless he has obtained written authorization from the former employer for their possession and use, a copy of which has been provided to the Company.

 

No provisions of this Paragraph shall be deemed to limit the restrictions applicable to the Executive under Paragraph 11.

 

SHOP RIGHTS.

 

The Company shall also have the royalty-free right to use in its business, and to make, use and sell products, processes and/or services derived from any inventions, discoveries, concepts and ideas, whether or not patentable, including but not limited to processes, methods, formulas and techniques, as well as improvements thereof or know how related thereto, which are not within the scope of Inventions as defined in Paragraph 12 but which are conceived or made by the Executive during the period he is engaged by the Company or with the use or assistance of the Company's facilities, materials or personnel.

 

NON-COMPETE.

 

The Executive hereby agrees that during the term of this Agreement and for twelve months (12) months following a termination for any reason, unless otherwise specified in this agreement, shall not:

 

Within any jurisdiction or marketing area in the United States in which the Company or any subsidiary thereof is doing business, own, manage, operate or control any business of the engaged in catalytic oxygen generation. For purposes of this paragraph, ownership of securities of not in excess of five percent (5%) of any class of securities of a public company shall not be considered to be competition with OSI, or any subsidiary thereof; or

 

Within any jurisdiction or marketing area in the United States in which the Consolidated Group or any member thereof is doing business, act as, or become employed as, an officer, director, Executive, consultant or agent of any business engaged in catalytic oxygen generation; or

 

Solicit any business that is the same as that of the Consolidated Group for, or sell any products involving catalytic oxygen to, any company in the United States, which is, as of the date hereof, a customer or client of the Consolidated Group or any of its members, or was such a customer or client thereof within two years prior to the date of this Agreement; or

 

Solicit the employment of, or hire any full time Executive employed by the Company or its subsidiaries as of the date of termination of this Agreement.

 

REMEDIES AND INJUNCTIVE RELIEF

 

The Executive hereby acknowledges and agrees that a breach or threatened breach by him or the non-performance of certain of the covenants or promises contained herein by him may cause serious and irreparable harm to the Consolidated Group and that any remedy at law, including any award of money damages, may be inadequate. Accordingly, Executive agrees and accepts that a threatened breach, a breach or a violation of the provisions of this agreement by him shall entitle the Company, as a matter of right, to an injunction issued by any court of competent jurisdiction, restraining any further or continued breach or violation of the provisions of this agreement. Such right to an injunction shall be cumulative and in addition to, and not in lieu of, any other remedies to which the Company may be entitled. The Executive specifically acknowledges that the requirement of the Consolidated Group or any member thereof to post a bond for the issuance of a temporary restraining order or temporary injunction should be waived.

 

ATTORNEY'S FEES.

 

In the event that either party hereunder institutes any legal proceedings in connection with its rights or obligations under this Agreement, the prevailing party in such proceeding shall be entitled to recover from the other party, all costs incurred in connection with such proceeding, including reasonable attorneys' fees, together with interest thereon from the date of demand at the rate of twelve percent (12%) per annum.

 

SUCCESSORS.

 

This Agreement and all rights of the Executive shall inure to the benefit of and be enforceable by the Executive's personal or legal representatives, estates, executors, administrators, heirs and beneficiaries. In the event of the Executive's death, all amounts payable to the Executive under this Agreement shall be paid to the Executive's surviving spouse, or the Executive's estate if the Executive dies without a surviving spouse. This Agreement shall inure to the benefit of, be binding upon and be enforceable by, any successor, surviving or resulting corporation or other entity to which all or substantially all of the business and assets of the Company shall be transferred whether by merger, consolidation, transfer or sale.

 

ENFORCEMENT.

 

The provisions of this Agreement shall be regarded as divisible, and if any of said provisions or any part hereof are declared invalid or unenforceable by a court of competent jurisdiction, the validity and enforceability of the remainder of such provisions or parts hereof and the applicability thereof shall not be affected thereby.

 

AMENDMENT OR TERMINATION.

 

BINDING EFFECT: NO ASSIGNMENT.

 

This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and legal representatives. This Agreement and any rights hereunder are not assignable except by operation of law or by OSI to any of its subsidiaries or affiliates. Any other purported assignment shall be null and void.

 

VARIATIONS IN PRONOUNS.

 

Wherever the context shall so require, all words herein in the male gender shall be deemed to include the female or neuter gender and vice versa, all singular words shall include the plural, and all plural words shall include the singular. All pronouns and any variations thereof refer to the masculine, feminine or neuter, singular or plural, as the context may require.

 

REPRESENTATION BY COUNSEL

 

Each party acknowledges that it has had the opportunity to be represented by separate independent counsel in the negotiation of this Agreement, that any such respective attorneys were of its own choosing, that each authorized representative has read this Agreement and that he understands its meaning and legal consequences to each party. The Parties warrant and represent that they have consulted with their attorney of choice concerning the execution, the meaning and the import of this Agreement, and each has read this Agreement and fully understands the terms hereof as signified by their signatures below, and are executing the same of their own free will for the purposes and consideration herein expressed. The Parties warrant and represent that they have had sufficient time to consider whether to enter into this Agreement and that they are relying solely on their own judgment and the advice of their own counsel in deciding to execute this Agreement. The Parties warrant and represent that they have read this Agreement in its entirety and have consulted with their attorney concerning the execution of this Agreement. If any or all Parties have chosen not to seek alternative counsel, said party or parties hereby acknowledge that he or they refrained from seeking alternative counsel entirely of his or their own volition and with full knowledge of the consequences of such a decision.

 

PRESUMPTION AGAINST SCRIVENER

 

Each party waives the presumption that this Agreement is presumed to be in favor of the party which did not prepare it, in case of a dispute as to interpretation.

 

CAPACITY

 

Each party represents and warrants that he has the authority to enter into this Agreement either on his own behalf or in an official capacity on behalf of a corporate party.

 

OTHER INSTRUMENTS

 

The Parties hereto covenant and agree that they will execute such other and further instruments and documents as are or may become necessary or convenient to effectuate and carry out the business obligations and duties created by this Agreement.

 

NO WAIVER.

 

HEADINGS.

 

The headings used in this Agreement are for administrative purposes only and do not constitute substantive matter to be considered in construing the terms and shall not affect the interpretation of this Agreement.

 

COUNTERPARTS.