EXHIBIT 10.51
SEVERANCE AGREEMENT
THIS SEVERANCE AGREEMENT ("Agreement") is made as of this 17th day of
October, 1997, by and between CXR TELCOM CORPORATION ("CXR"), with an address at
4290 East Brickell Street, Ontario, California 91761, CRITICAL COMMUNICATIONS
INCORPORATED ("Critical"), with an address at 218 Riverside Avenue, St. Charles,
Illinois 60174 and ______________________ ("Employee"), with an address at
_______________________.
W I T N E S S E T H
WHEREAS, CXR, MicroTel, Critical and Employee and certain other
shareholders of Critical (collectively the "Selling Shareholders") are parties
to a certain Share Exchange Agreement dated of every date herewith (the "Share
Exchange Agreement") whereby MicroTel, in exchange for all of the common stock
of Critical, has delivered to the Selling Shareholders Five Hundred Thousand
(500,000) shares of MicroTel common stock; and
WHEREAS, as a material inducement for CXR to purchase all of the
outstanding shares of Critical common stock from Employee and the other Selling
Shareholders pursuant to the Share Exchange Agreement, Employee hereby agrees to
certain terms and restrictions on his employment.
NOW, THEREFORE, in consideration of the foregoing and of the mutual
promises, covenants and agreements hereinafter contained the parties hereto
agree as follows:
I. AT-WILL EMPLOYEE.
Employee acknowledges that this Severance Agreement does not constitute a
contract of employment for any specified term and that Employee shall be and
remain at all times an "at will" employee of Critical (or CXR, if Critical is
merged into CXR after the Closing).
II. SALARY.
As of the date of this Agreement, Employee's annual salary will be
$________ . Employee shall also be entitled to such benefits as are
currently offered to persons in similar positions with CXR.
III. TERMINATION WITHOUT CAUSE; SEVERANCE.
Critical may terminate Employee's employment without cause at any time
without prior notice to Employee. If termination without cause occurs before
the end of three years from the date hereof, then Employee shall be entitled as
severance to have his salary continued until the date which is three years from
the date hereof; provided, however, that if termination occurs during the third
year, Employee's salary shall be continued for one year thereafter. From and
after the date which is three (3) years from the date hereof, Employee shall be
entitled only to such severance as may be mandated by CXR policy as in effect
from time to time.
A "Constructive Discharge" shall be treated as a termination of employment
without cause. A Constructive Discharge shall be deemed to have occurred if
Employee resigns his employment after any material reduction is made by Critical
or CXR in the duties or
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salary or benefits of Employee from that in effect on the date hereof, or if
Employee is required to move his place of employment more than 30 miles from
St. Charles, Illinois.
IV. COVENANT NOT TO COMPETE.
4.1. RESTRICTIONS. During his employment with Critical/CXR and for a
period of two (2) years thereafter (six (6) months thereafter in the event of
a termination without cause provided Employer continues salary payments to
Employee during such six month period), he will not act as a principal,
agent, shareholder, employer, consultant, control person, stockholder,
director or co-partner of any person, firm, business entity other than
Critical and/or CXR, their subsidiaries and affiliates, or in any individual
or representative capacity whatsoever, directly or indirectly, without the
express consent of CXR and Critical pursuant to which he:
(a) engages or participates or is employed in the
telecommunication test equipment business (the "Business") in North America;
provided, however, that the ownership by Employee of not more than five
percent (5%) of a publicly-traded corporation shall not be deemed to be a
violation of this covenant as long as Employee does not become a controlling
person or actively involved in the management of such corporation or business
venture;
(b) approaches, solicits business from, or otherwise does business or
deals with any customer of Critical and/or CXR, their subsidiaries and
affiliates, who are customers of Critical and/or CXR in connection with the
Business.
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(c) approaches, counsels, solicits, assists to solicit or attempts to
induce any person who is then in the employ of Critical and/or CXR, their
subsidiaries and affiliates, its affiliates or subsidiaries to leave the employ
of Critical and/or CXR, their subsidiaries and affiliates, or employ or attempt
to employ on behalf of any person or entity any such person or persons who at
any time during the preceding six months was in the employ of Critical and/or
CXR, their subsidiaries and affiliates;
(d) aid or counsel any other person, firm, corporation or business
entity to do any of the above.
For purposes of this Section 4.1, the term "customer" shall mean (i) any
person or entity who was a customer of Critical and/or CXR, their subsidiaries
and affiliates, at any time during the last two months (2) prior to the date
Employee's employment with CXR and/or Critical terminates, and (ii) any
prospective customer to whom Critical and/or CXR, their subsidiaries and
affiliates, had made a presentation (or similar offering of product(s)) during
the one (1) year prior to the date Employee's employment with CXR and/or
Critical terminates.
Employee acknowledges (i) that his position with Critical places him in a
position of confidence and trust with the customers and the employees of
Critical and/or CXR, their subsidiaries and affiliates, through which, among
other things, he shall obtain knowledge of such organizations "technical
information" and "know-how" and become acquainted with their customers, in which
matters such organizations have substantial proprietary interests, (ii)
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that the restrictive covenants set forth above are necessary in order to
protect and maintain such proprietary interests and the other legitimate
business interests of Critical and/or CXR, their subsidiaries and affiliates
and (iii) that Critical and/or CXR, their subsidiaries and affiliates would
not have entered into this Agreement unless such covenants were included
herein.
Employee also acknowledges that the business of Critical and/or CXR, their
subsidiaries and affiliates presently extends throughout North America, that he
has personally supervised or engaged in such business on behalf of Critical
and/or CXR, their subsidiaries and affiliates, or will do so pursuant to the
terms of this Agreement, and, accordingly, it is reasonable that the restrictive
covenants set forth above are not more limited as to geographic area than is set
forth therein. Employee also represents to Critical that the enforcement of
such covenants will not prevent Employee from earning a livelihood.
If any of the provisions of this Section, or any part thereof, is
hereinafter construed to be invalid or unenforceable, the same shall not affect
the remainder of such provision or provisions, which shall be given full effect,
without regard to the invalid portions. If any of the provisions of this
Section, or any part thereof, is held to be unenforceable because of the
duration of such provision, the area covered thereby or the type of conduct
restricted therein, the parties agree that the court making such determination
shall have the power to modify the duration, geographic area and/or other terms
of such provision and, as so
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modified, said provision shall then be enforceable. In the event that the
courts of any one or more jurisdictions shall hold such provisions wholly or
partially unenforceable by reason of the scope thereof or otherwise, it is
the intention of the parties hereto that such determination not bar or in any
way affect Critical's right to the relief provided for herein in the Courts
of any other jurisdictions as to breaches or threatened breaches of such
provisions in such other jurisdictions, the above provisions as they relate
to each jurisdiction being, for this purpose, severable into diverse and
independent covenants.
4.2 SURVIVAL. The provisions of Section 4.1 shall survive the termination
of this Agreement.
V. CONFIDENTIAL INFORMATION.
5.1. DISCLOSURE OF INFORMATION. Employee recognizes and acknowledges
that the financial information, trade secrets, technical information and
confidential or proprietary information of Critical and/or CXR, their
subsidiaries and affiliates including such information as may exist from time
to time, and information as to the identity of customers or prospective
customers of Critical and/or CXR, their subsidiaries and affiliates and other
similar items, are valuable, special and unique assets of Critical's and
CXR's business, access to and knowledge of which are essential to the
performance of the duties of Employee hereunder. Employee will not, during
or after the term hereof, in whole or in part, disclose such secrets or
confidential, technical or proprietary information to any person, firm,
corporation, association or other entity for
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any reason or purpose whatsoever, nor shall Employee make use of any
such property or information for his own purpose or for the benefit of any
person, firm, corporation or other entity (except Critical and/or CXR, their
subsidiaries and affiliates) under any circumstances, during or after the term
hereof, except as may be required pursuant to the terms of a Court Order or as
otherwise required by law, provided that these restrictions shall not apply to
such secrets or information which are then in the public domain (provided that
Employee was not responsible directly or indirectly, for such secrets or
information entering the public domain without the consent of Critical).
5.2. OWNERSHIP OF INVENTIONS. Except as may be required otherwise by
applicable law, all of Employee's right, title and interest in all developments
or improvements devised or conceived by Employee, alone or with others, during
his working hours, as well as in all developments or improvements devised or
conceived by Employee, alone or with others, which relate to any business in
which Employee is then engaged or contemplating engaging, regardless of when
devised or conceived, is the exclusive property of Critical and CXR. Employee
shall promptly disclose all such developments and improvements to CXR. Employee
shall not use or disclose any such developments or improvements, other than in
furtherance of Critical's or CXR's business, without CXR's prior written
consent.
5.3. RETURN MEMORANDA. Employee hereby agrees to deliver promptly to
Critical, on termination of this Agreement, or at any
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other time Critical may so request, all memoranda, notes, records, reports,
manuals, drawings and other documents (and all copies thereof) relating to
Critical's or CXR's business and all property associated therewith, which he
may then possess or have under his control.
5.4. SURVIVAL. The provisions of Section 5.1, 5.2 and 5.3 shall survive
the termination of this Agreement.
VI. INJUNCTIVE RELIEF.
6.1. Employee acknowledges that the remedy at law for any breach or
threatened breach of Articles IV and V hereof by the Employee will be
inadequate, and that, accordingly, CXR and/or Critical shall, in addition to all
other available remedies (including without limitation seeking such damages as
it can show it has sustained by reason of such breach), be entitled to
injunctive relief without being required to post bond or other security and
without having to prove the inadequacy of the available remedies at law.
Employee agrees not to plead or defend on grounds of adequate remedy at law or
any similar defense in any action by Critical and/or CXR against him or
injunctive relief or for specific performance of any of his obligations pursuant
to Articles IV and V hereof. Nothing herein shall be construed as prohibiting
Critical and/or CXR from pursuing any other remedies for such breach or
threatened breach.
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VII. MISCELLANEOUS PROVISIONS.
7.1. NOTICES AND COMMUNICATIONS. All notices and communications hereunder
shall be in writing and shall be hand delivered or sent postage prepaid by
registered or certified mail, return receipt requested, to the address first
above written or to such other address of which notice shall have been given in
the manner herein provided.
7.2. ENTIRE AGREEMENT. Except for the terms of the Share Exchange
Agreement and the Contingent Stock Agreement, which are incorporated herein by
reference, all prior and contemporaneous agreements and understandings between
the parties with respect to the subject matter of this Agreement are superseded
by this Agreement, and this Agreement constitutes the entire understanding
between the parties. This Agreement may not be modified, amended, changed or
discharged except by a writing signed by the parties hereto, and then only to
the extent therein set forth.
7.3. ASSIGNMENT. This Agreement may be assigned by Critical and shall be
binding upon and inure to the benefit of Critical's successors and assigns.
7.4. WAIVER. No waiver of any breach of this Agreement or of any objection
to any act or omission connected herewith shall be implied or claimed by any
party, or be deemed to constitute a consent to any continuation of such breach,
act or omission, unless in a writing signed by the party against whom
enforcement of such waiver or consent is sought, and then only to the extent
therein set forth.
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7.5. SECTION HEADINGS. The section headings of this Agreement are solely
for the purpose of convenience and shall neither be deemed a part of this
agreement nor used in any interpretation thereof.
7.6. GOVERNING LAW. This agreement and the relationship of the parties
shall be governed by, and construed in accordance with, the laws of the State of
Illinois.
IN WITNESS WHEREOF, each of the parties hereto has executed this Agreement
as of the day and year first above written.
Dated: CXR TELCOM CORPORATION
By:
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Henry A. Mourad, President
CRITICAL COMMUNICATIONS INCORPORATED
By:
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Henry A. Mourad, President
EMPLOYEE
By:
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