Exhibit 10.7

 

BOARD OF DIRECTORS  - RETAINER AGREEMENT

 

This agreement made as of January 1, 2006 between HAPS USA, Inc., with its
principal place of business at 5912 Bolsa Avenue, Suite 108, Huntington Beach,
CA 92649 (“HAPS USA”) and Mark Buck, with an address of 5231A Kuaiwi Place,
Honolulu, HI 96821, provides for director services, according to the following:

 

ARTICLE 1

 

Services Provided

 

HAPS USA agrees to engage Mark Buck to serve as a member of the Board of
Directors (the “Director”) and to provide those services required of a director
under HAPS USA’s Articles of Incorporation and Bylaws (“Articles and Bylaws”),
as both may be amended from time to time and under the General Corporation Law
of Utah, the federal securities laws and other state and federal laws and
regulations, as applicable.

ARTICLE 2

 

Nature of Relationship

 

2.1                                 The Director is an independent contractor
and will not be deemed an employee of HAPS USA for purposes of employee
benefits, income tax withholding, F.I.C.A. taxes, unemployment benefits or
otherwise. The Director shall not enter into any agreement or incur any
obligations on HAPS USA’s behalf.

 

2.2                                 HAPS USA will supply, at no cost to the
Director:  periodic briefings on the business, director packages for each board
and committee meeting, copies of minutes of meetings and any other materials
that are required under HAPS USA’s Articles and Bylaws or the charter of any
committee of the board on which the director serves and any other materials
which may, by mutual agreement, be necessary for performing the services
requested under this contract.

 

ARTICLE 3

 

Director’s Warranties

 

3.1                                 The Director warrants that no other party
has exclusive rights to his services in the specific areas described and that
the Director is in no way compromising any rights or trust between any other
party and the Director or creating a conflict of interest. The Director also
warrants that no other agreement will be entered into that will create a
conflict of interest with this agreement. The Director further warrants that he
will comply with all applicable state and federal laws and regulations, as
applicable, including Sections 10 and 16 of the Securities and Exchange Act of
1934.

 

3.2                                 Throughout the term of this agreement and
for a period of six months thereafter, the Director agrees he will not, without
obtaining HAPS USA’s prior written consent, directly or indirectly engage or
prepare to engage in any activity in competition with any HAPS USA

 

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business or product, including products in the development stage, accept
employment or provide services to (including service as a member of a board of
directors), or establish a business in competition with HAPS USA.

 

ARTICLE 4

 

Compensation

 

4.1                                 Retainer. HAPS USA shall pay the Director a
nonrefundable retainer of Eighteen Thousand and 0/100 United States Dollars
($18,000.00) per year plus a fee of Five Hundred and 0/100 United States Dollars
($500.00) per meeting of HAPS USA’s Board of Directors at which the Director is
present during the term of this agreement, to provide the services described in
Section I which shall compensate him for all time spent preparing for, traveling
to (if applicable) and attending board of director meetings during the year. The
retainer shall be provided for portions of the term less than a full calendar
year. This retainer may be revised by action of HAPS USA’s Board of Directors
from time to time. Such revision shall be effective as of the date specified in
the resolution for payments not yet made and need not be documented by an
amendment to this agreement.

 

4.2                                 Stock Options. Subject to approval by the
Board of Directors, an annual grant of an option to purchase HAPS USA common
stock shall be made to the Director. The grant shall consist of an option to
purchase a specified number of shares under the term of HAPS USA’s then
effective incentive plan. The specified number of shares for a new appointment
to the Board shall be at the discretion of the Board. Twenty-five percent of the
options shall vest on each quarterly anniversary of the date of grant. The
amount and terms of the annual option grant may be revised by action of HAPS
USA’s Board of Directors from time to time. Such revision shall be effective as
of the date specified in the resolution for any grants not yet made and need not
be documented by an amendment to this agreement.

 

4.3                                 Payment. Retainer payments shall be made
quarterly in cash in advance on the first day of each accounting quarter.
Additional payments shall be made in arrears. No invoices need be submitted by
the Director for payment of the retainer. Invoices for additional payments under
C, above, shall be submitted. Such invoices must be approved by HAPS USA’s Chief
Executive Officer as to form and completeness.

 

4.4                                 Expenses. HAPS USA will reimburse the
Director for reasonable expenses approved in advance, and such approval not to
be unreasonably withheld. Invoices for expenses, with receipts attached, shall
be submitted. Such invoices must be approved by HAPS USA’s Chief Executive
Officer as to form and completeness.

 

ARTICLE 5

 

General Provisions

 

5.1                                 Term. This agreement shall be in effect from
January 1, 2006 through the last date of the Director’s current term as a member
of HAPS USA’s Board of Directors. This agreement shall be automatically renewed
on the date of the Director’s reelection as a member of HAPS

 

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USA’s Board of Director’s for the period of such new term unless the Board of
Directors determines not to renew this agreement.  Any amendment to this
agreement must be approved by a written action of HAPS USA’s Board of Directors.
Amendments to Section IV Compensation hereof do not require the Director’s
consent to be effective.

 

5.2                                 Termination. This agreement shall
automatically terminate upon the death of the Director or upon his resignation
or removal from, or failure to win election or reelection to, the HAPS USA Board
of Directors. In the event of any termination of this agreement, the Director
agrees to return any materials transferred to the Director under this agreement
except as may be necessary to fulfill any outstanding obligations hereunder. The
Director agrees that HAPS USA has the right of injunctive relief to enforce this
provision. HAPS USA’s obligation in the event of such termination shall be to
pay the Director the retainer and other payments due through the date of
termination. Termination shall not relieve either party of its continuing
obligation under this agreement with respect to confidentiality of proprietary
information.

 

5.3                                 Limitation of Liability. Under no
circumstances shall HAPS USA be liable to the Director for any consequential
damages claimed by any other party as a result of representations made by the
Director with respect to HAPS USA which are different from any to those made in
writing by HAPS USA. Furthermore, except for the maintenance of confidentiality,
neither party shall be liable to the other for delay in any performance, or for
failure to render any performance under this agreement when such delay or
failure is caused by Government regulations (whether or not valid), fire,
strike, differences with workmen, illness of employees, flood, accident, or any
other cause or causes beyond reasonable control of such delinquent party.

 

5.4                                 Confidentiality. The Director agrees to
maintain in confidentiality all of HAPS USA’s proprietary and confidential
information, and to sign the Board of Directors’ Proprietary Inventions and
Information Agreement, attached as Exhibit A hereto.

 

5.5                                 Resolution of Disputes. Any dispute
regarding the agreement (including without limitation its validity,
interpretation, performance, enforcement, termination and damages) shall be
determined in accordance with the laws of the State of California, the United
States of America. Any action under this paragraph shall not preclude any party
hereto from seeking injunctive or other legal relief to which each party may be
entitled.

 

5.6                                 Entire Agreement. This agreement (including
agreements executed in substantially in the form of the exhibits attached
hereto) supersedes all prior or contemporaneous written or oral understandings
or agreements, and may not be added to, modified, or waived, in whole or in
part, except by a writing signed by the party against whom such addition,
modification or waiver is sought to be asserted.

 

5.7                                 Assignment. This agreement and all of the
provisions hereof shall be binding upon and insure to the benefit of the parties
hereto and their respective successors and permitted assigns and, except as
otherwise expressly provided herein, neither this agreement, nor any of the
rights, interests or obligations hereunder shall be assigned by either of the
parties hereto without the prior written consent of the other party.

 

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5.8                                 Notices. Any and all notices, requests and
other communications required or permitted hereunder shall be in writing,
registered mail or by facsimile, to each of the parties at the addresses set
forth above or the numbers set forth below:

 

Mark Buck
5231A Kuaiwi Place
Honolulu, HI 96821
Facsimile: (808) 377-9620

 

HAPS USA, Inc.
Attn.: Mr. Henry Miyano
5912 Bolsa Avenue, Suite 108
Huntington Beach, CA 92649
Facsimile: (714) 895-7732

 

Any such notice shall be deemed given when received and notice given by
registered mail shall be considered to have been given on the tenth (10th) day
after having been sent in the manner provided for above.

 

5.9                                 Survival of Obligations. Notwithstanding the
expiration of termination of this agreement, neither party hereto shall be
released hereunder from any liability or obligation to the other which has
already accrued as of the time of such expiration or termination (including,
without limitation, HAPS USA’s obligation to make any fees and expense payments
required pursuant to Article IV hereof) or which thereafter might accrue in
respect of any act or omission of such party prior to such expiration or
termination.

 

5.10                           Severability. Any provision of this agreement
which is determined to be invalid or unenforceable shall not affect the
remainder of this agreement, which shall remain in effect as though the invalid
or unenforceable provision had not been included herein, unless the removal of
the invalid or unenforceable provision would substantially defeat the intent,
purpose or spirit of this agreement.

 

[Signatures Follow On Next Page]

 

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IN WITNESS WHEREOF, the parties hereto have caused this agreement to be executed
by their duly authorized officers, as of the date first written above.

 

 

MARK BUCK

 

 

 

HAPS USA, Inc.,

 

 

 

 

A Utah Corporation

 

 

 

 

 

 

 

 

 

 

 

 

 

 /s/ Mark Buck

 

 

 

By:

   /s/ Shinichi Kanemoto

 

 

 

 

 

 

    Shinichi Kanemoto, Its President

 

 

 

 

 

 

 

 

 

 

 

 

Date of last signature: February 16, 2006

 

 

 

 

 

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EXHIBIT A

 

BOARD OF DIRECTORS PROPRIETARY INFORMATION

AND INVENTIONS AGREEMENT

 

WHEREAS, the parties desire to assure the confidential status of the information
which may be disclosed by HAPS USA to the Director; NOW THEREFORE, in reliance
upon and in consideration of the following undertaking, the parties agree as
follows:

 

1.      Subject to the limitations set forth in Paragraph 2, all information
disclosed by HAPS USA to the Director shall be deemed to be “Proprietary
Information”. In particular, Proprietary Information shall be deemed to include
any information, process, technique, algorithm, program, design, drawing,
formula or test data relating to any research project, work in process, future
development, engineering, manufacturing, marketing, servicing, financing or
personnel matter relating to HAPS USA, its present or future products, sales,
suppliers, customers, employees, investors, or business, whether or oral,
written, graphic or electronic form.

 

2.      The term “Proprietary Information” shall not be deemed to include
information which the Director can demonstrate by competent written proof.
(i) is now, or hereafter becomes, through no act or failure to act on the
part of the Director, generally known or available; (ii) is known by the
Director at the time of receiving such information as evidenced by its records:
(iii) is hereafter furnished to the Director by a third party, as a matter of
right and without restriction on disclosure; or (iv) is the subject of a written
permission to disclose provided by HAPS USA.

 

3.      The Director shall maintain in trust and confidence and not disclose to
any third party or use for any unauthorized purpose any Proprietary Information
received from HAPS USA. The Director may use such Proprietary Information only
to the extent required to accomplish the purposes of this Agreement. The
Director shall not use Proprietary Information for any purpose or in any manner
which would constitute a violation of any laws or regulations, including without
limitation the export control laws of the United States. No other rights of
licenses to trademarks, inventions, copyrights, or patents are implied or
granted under this Agreement.

 

4.      Proprietary Information supplied shall not be reproduced in any
form except as required to accomplish the intent of this Agreement.

 

5.      The Director represents and warrants that he shall protect the
Proprietary Information received with at least the same degree of care used to
protect its own Proprietary Information from unauthorized use or disclosure. The
Director shall advise its employees or agents who might have access to such
Proprietary Information of the confidential nature thereof and shall obtain from
each of such employers and agents an agreement to abide by the terms of this
Agreement. The Director shall not disclose any Proprietary Information to any
officer, employee or agent who does not have a need for such information.

 

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6.      All Proprietary Information (including all copies thereof) shall remain
in the property of HAPS USA, and shall be returned to HAPS USA after Director’s
need for it has expired, or upon request of HAPS USA, and in any event, upon
completion or termination of this Agreement.

 

7.      Notwithstanding any other provision of this Agreement, disclosure of
Proprietary Information shall not be precluded if such disclosure:

 

(a)                                  is in response to a valid order of a court
or other governmental body of the United States or any political subdivision
thereof; provided, however, that the responding party shall first have given
notice to the other party hereto and shall have made a reasonable effort to
obtain a protective order requiring that the Proprietary Information so
disclosed be used only for the purpose for which the order was issued;

 

(b)                                 is otherwise required by law; or

 

(c)                                  is otherwise necessary to establish rights
or enforced obligations under this Agreement, but only to the extent that any
such disclosure is necessary.

 

8.      This Agreement shall continue in full force and effect for so long as
the Director continues to receive Proprietary Information. This Agreement may be
terminated at any time upon thirty (30) days written notice to the other party.
The termination of the Agreement shall not relieve the Director of the
obligations imposed by Paragraphs 3, 4, 5 and 12 of this Agreement with respect
to Proprietary information disclosed prior to the effective date of such
termination and the provisions of these Paragraphs shall survive the termination
of this Agreement for a period of five (5) years from the date of such
termination.

 

9.      The Director agrees to indemnify HAPS USA for any loss or damage
suffered as a result of any breach by the Director of the terms of this
Agreement, including any reasonable fees incurred by HAPS USA in the collection
of such indemnity.

 

10.     This Agreement shall be governed by the laws of the State of California
as those laws are applied to contracts entered into and to be performed entirely
in California by California residents.

 

11.     This Agreement contains the final, complete and exclusive agreement of
the parties relative to the subject matter hereof and may not be changed,
modified, amended or supplemented except by a written instrument signed by both
parties.

 

12.     Each party hereby acknowledges and agrees that in the event of any
breach of this Agreement by the Director, including, without limitation, an
actual or threatened disclosure of Proprietary Information without the prior
express written consent of HAPS USA, HAPS USA will suffer an irreparable injury,
such that no remedy at law will afford it adequate protection against, or
appropriate compensation for, such injury. Accordingly, each party hereby agrees
that HAPS USA shall be entitled to specific performance of the Director’s
obligations under this

 

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Agreement, as well as such further injunctive relief as may be granted by a
court of competent jurisdiction.

 

 

MARK BUCK

 

 

 

 

 

HAPS USA, Inc.,

 

 

 

 

 

 

 

A Utah Corporation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   /s/ Mark Buck

 

 

 

 

 

By:

 

 /s/ Shinichi Kanemoto

 

 

 

 

 

 

 

 

 

  Shinichi Kanemoto, Its President

 

 

 

 

 

 

 

 

 

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