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Exhibit 4.3
THIS AGREEMENT, effective August 1, 1997, is
BETWEEN:
DSI Datotech Systems Inc., a company duly incorporated under the laws of
the Province of British Columbia, having its Registered and Records Office at
#1750-750 West Pender Street, Vancouver, British Columbia
(the "Company")
THE FIRST PART
AND:
EDWARD C. PARDIAK HOLDINGS LIMITED. a corporation incorporated under the
laws of Ontario, Canada and having an office at 501-738 Broughton Street,
Vancouver, B.C. V6G 3A7
(the "Contractor")
THE SECOND PART
WHEREAS:
A. The Company is involved in the business of developing a gesture based
data input technology among other input systems and acquiring complementary
technology based businesses and/or assets;
B. The sole voting shareholder of the Contractor is Edward Pardiak
("Pardiak");
C. The Company desires to retain the Contractor to manage the Company in
evolving from a research and development company to a company with cash flow
generated from the sale and/or licensing of its products pursuant to the terms
of this Agreement.
NOW THEREFORE THIS AGREEMENT WITNESSETH that in consideration of the premises
and mutual covenants and conditions herein contained, the parties hereto
covenant and agree each with the other as follows:
1. The preamble hereto shall form an integral part of this Agreement.
2. This Agreement is subject to the approval of each of the following:
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(i) the Board of Directors of the Company; and (ii) the Vancouver Stock
Exchange.
(ii) the Vancouver Stock Exchange
Duties of the Contractor
3. The Company agrees to employ the Contractor, and the Contractor agrees
to provide "Pardiak" to serve, as the Chief Financial Officer and the Chairman
of The Board of Directors of the Company to oversee the Company's administration
and control pursuant to the terms and conditions of this Agreement and as
required by the British Columbia Company Act.
4. The Contractor will have the following duties:
(a) overseeing administration of the day to day affairs of the Company and
any subsidiary;
(b) providing liaison and instructions with the Company's auditors,
accountants and lawyers;
(c) developing financial plans for actual or proposed development of the
Company's technology, or that of the Company's subsidiaries, if any;
(d) aiding in the negotiating and concluding of, but not limited to,
financings, mergers and acquisitions, dispositions, joint ventures, strategic
alliances and licensing and royalty agreements;
(e) being an integral part of the negotiating and concluding of future
financings of the Company as required from time to time to carry out those
matters referred to in clauses (c) and (d), and in particular not be less then
$2,500,000 shall be raised by July 31, 1998. All of the aforementioned
financings can emanate from any source but shall be subject to the approval of
the Board of Directors
(f) coordinating the dissemination of news of the Company to the public and
to shareholders of the Company; and
(g) serving as the manager of departments (e.g. marketing & business
development) until such time as the Company can hire individuals to fill those
positions.
5. The Contractor agrees that it shall, during the term of this Agreement,
perform the functions of the Contractor under this Agreement full-time, subject
to such reasonable amounts of time, including time during regular business
hours, that it may spend on other matters, and the Contractor will performs said
functions faithfully, diligently, to the best of its abilities and in the best
interests of the Company.
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6. The term subsidiary as used herein means any company or companies of
which more than fifty per cent of the outstanding shares carrying votes at all
times (provided that the ownership of such shares confers the right at all times
to elect at least a majority of the Board of Directors of such company or
companies) are owned by or held for the Company and/or any other company in like
relation to the Company and include any company in like relation to the
subsidiary.
Term of this Agreement
7. The term of this Agreement shall be two years commencing on the date
first written above.
8. Provided the Contractor is not in default hereunder, this Agreement
shall automatically renew for a further one year term, and shall successively
renew for further one year terms, and salary may be re-negotiated. The Company
can elect not to renew this Agreement for any further term by giving to the
Contractor written notice of non-renewal sixty days before the renewal date, in
which case this Agreement will terminate at the end of the sixty day notice
period. The Company will pay to the Contractor on the date of termination the
equivalent in dollars to one year's compensation under this Agreement.
Compensation to the Contractor
9. For the Contractor's services under this Agreement, the Company shall:
(a) pay to the Contractor a fee in the amount of $10,000 (gross) per month;
(b) effective on the signing of this Agreement, pay a reasonable amount for
all premium costs of a benefit package for "Pardiak" and his immediate family.
Such benefit package to include life insurance at three times the Contractor's
annual fee, accidental death and dismemberment, extended health, long-term
disability and dental;
(c) pay to the Contractor fee as set out in paragraph 9(a) above prior to
obtaining Vancouver Stock Exchange approval of this Agreement; in the event that
the Vancouver Stock Exchange refuses to approve this fee and will only approve a
lower fee, then the Contractor will reimburse the Company the difference, but
the Company shall use its best efforts to obtain Vancouver Stock Exchange
approval to this Agreement;
(d) in addition to statutory holidays, provide to the Contractor an annual
paid vacation of 20 working days to be taken when the Contractor deems
appropriate in consideration of the Company's operational requirements. The
Contractor may not accumulate and use in any subsequent year vacation
entitlement that was unused in a previous year. If at the end each year and at
the end of this Agreement the Contractor has unused
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vacation time to its credit, then the Company will pay to the Contractor
the equivalent in cash;
(e) pay to the Contractor a car allowance in the amount of $300 per month;
and
(f) pay to the Contractor bonuses associated with but not limited to
financings, mergers and acquisitions, dispositions, joint ventures, strategic
alliances and licensing and royalty agreements as determined by the Company's
Board of Directors from time to time and subject to the approval of Vancouver
Stock Exchange.
10. The Company shall reimburse the Contractor for all expenses actually
and properly incurred by the Contractor on behalf of the Company in
carrying out its duties and performing its functions under this
Agreement provided that for all expenses the Contractor shall furnish
relevant statements and vouchers to the Company prior to reimbursement.
Escrow Shares
11. Subject to acceptance by the Vancouver Stock Exchange, the Company will
allot and issue to the Contractor, or if unable to obtain such acceptance, then
issue to Segev, upon the receipt of payment in full of $0.01 per share as fully
paid and non-assessable 1,300,000 common shares ("Contractor's Performance
Shares") to be escrowed in accordance with the escrow agreement attached as
schedule 1 hereto, the release of which will be based on the following: the
number of Performance Shares to be released will be determined by calculating
the Company's Cumulative Cash flow (as that term is defined in Local Policy 3-07
of the British Columbia Securities Commission, or such other equivalent section
or policy that governs the release of performance shares) not previously applied
towards the release of any outstanding escrow or allotted shares issued by the
Company, divided by the earn out price where the earn out price is $0.25.
Indemnity
12. The Company will indemnify the Contractor and "Pardiak" in respect of
its acts or omissions under this Agreement and as the Chief Executive Officer of
the Company to the extent permitted by Part 19 of the Company's Articles of
Incorporation and to the extent permitted by law.
13. The Company will diligently pursue the obtaining of directors and
officers insurance and secure such insurance for the benefit of "Pardiak".
Restrictions on the Contractor
14. The Company is aware that the Contractor has now and will continue to
provide limited management services to other companies and the Company
recognizes that these companies
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will require a certain portion of the Contractor's time. The Company
agrees that the Contractor may continue to provide services to such
outside interests, provided that such interests do not conflict with
its duties under this Agreement.
15. The Contractor shall nor, except as authorized or required by its
duties or required by law, reveal or divulge to any person or companies any of
the trade secrets, or secret or confidential information concerning the Company
or its subsidiaries which may come to its knowledge during the term of this
Agreement and shall keep in complete secrecy all confidential information
entrusted to it and shall not use or attempt to use any such information in any
manner which may injure or cause loss either directly or indirectly to the
Company's business or may be likely so to do. This restriction shall continue to
apply for 24 months after the termination of this Agreement, and such longer
time as is required by the laws of fiduciary duties, but shall cease to apply to
information or knowledge which may come into the public domain.
Termination
16. This Agreement may be terminated forthwith by the Company without prior
notice if, at any time the Contractor or "Pardiak", while in the performance of
the duties under this Agreement:
(a) is guilty of conduct which at common law constitutes just cause for
termination of employment;
(b) becomes bankrupt;
(c) is unable to perform the required duties under this Agreement for a
period of greater than 90 days after due notice by the Company; or
(d) dies.
17. The Contractor may terminate this Agreement by giving the Company
ninety days written notice delivered to the Company, and upon the 90th day the
Company will pay the Contractor all amounts due to that date and thereafter the
Contractor will not be entitled to any further payments.
18. If the Company terminates this Agreement pursuant to paragraph 16, then
no further payments are due to the Contractor.
19. If the Company terminates this Agreement other than pursuant to
paragraph 16 or paragraph 8, then the Company must pay to the
Contractor a termination fee in an amount equal to the greater of one
year's compensation under this Agreement and the total compensation
that remains outstanding under the term of this Agreement.
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20. In all instances, following the termination of this Agreement the
Company will use its best efforts to make applications for release of the
Contractor's Performance Shares on a timely basis if any of the Contractor's
Performance Shares are eligible for release from escrow, and will cause the
Company's auditors to make the calculation for which on a timely basis.
Solvency
21. If the Company's working capital is less than $250,000 then the Company
will defer, without interest or penalty, cash payments owing to the Contractor
pursuant to this Agreement in accordance with the following:
(a) the Company will resume full payments to the Contractor when the
Company's working capital balance exceeds $500,000;
(b) the Company will determine the repayment schedule to fully reimburse
the Contractor all outstanding arrears when the Company's working capital
exceeds $500,000.
(c) the Contractor will not secure any debts owing to it by the Company
General
22. Time shall be of the essence in this Agreement.
23. The parties hereto agree from time to time after the execution hereof
to make, do, execute or cause or permit to be made, done or executed all such
further and other lawful acts, deeds, things, devices and assurances in law
whatsoever as may be required to carry out the true intention and to give full
force and effect to this Agreement.
24. This Agreement embodies the entire agreement and understanding between
the parties hereto and supersedes all prior agreements and undertakings, whether
oral or written, relative to the subject matter hereof
25. The following rules shall be applied in interpreting this Agreement:
(a) this Agreement shall inure to the benefit of an be binding upon each of
the parties hereto and their respective successors and permitted assigns;
(b) any reference herein to the Company or the Contractor shall include
their respective successors and permitted assigns;
(c) if any provision of this Agreement or any part thereof shall be found
or determined to be invalid it shall be severable from this Agreement and the
remainder of this Agreement shall be construed as if such invalid provision or
part has been deleted from this Agreement;
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(e) in this Agreement all reference to the singular shall be
construed to include the plural where the context so permits,
the masculine to include the feminine and neutral gender and
where necessary a body corporate and vice versa.
26. Any notice, direction or instrument required or permitted to be given
hereunder shall be given in writing and be mailed, postage prepaid or delivered
by one party to the other at the addresses first herein appearing. Any notice,
direction or other instrument aforesaid if delivered shall be deemed to be given
or made on the day on which it was delivered or if mailed, shall be deemed to
have been given or made on the third business day following the day on which it
was mailed, provided that if there shall be a postal strike, slow down or other
labor dispute which may affect the delivery of such notice through the mail
between the time of mailing and the actual receipt of notice then such notice
shall only be effective if actually delivered. Any party may, from time to time,
give notice of any change of its respective address and, in such event, the
address of such party shall be deemed to be changed accordingly.
IN WITNESS WHEREOF the Company and the Contractor have duly executed
this Agreement.
The common seal of DSI Datotech Systems,
Inc. was affixed in the presence of:
/s/ Davis c/s
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/s/ Maren K. Dancer
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Date: December 19, 1997
The Corporate seal of Edward C. Pardiak
Limited was affixed in the presence of:
/s/ Edward C. Pardiak c/s
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Date: December 19, 1997