EXECUTIVE EMPLOYMENT AGREEMENT

EXECUTIVE EMPLOYMENT AGREEMENT, effective as of this _23rd day of April, 2005
(this “Agreement”), between Perry Law, (the “Executive”), and Smart-tek
Communications Inc., a private corporation and a wholly-owned subsidiary of
Royce Biomedical, Inc (“Royce”), with its principal place of business at Unit
10-11720 Voyageur Way, Richmond, BC, V6X 3G9. (the “Company”).

W I T N E S S E T H :

WHEREAS, the Company desires to employ the Executive on a full-time basis as its
President and the Executive desires to accept such employment subject to the
terms and conditions set forth in this Agreement.

NOW, THEREFORE, in consideration of the mutual agreements and covenants set
forth herein, the parties hereto agree as follows:

ARTICLE I

POSITION; DUTIES; TERM

1.1

Position.  Commencing as of the date hereof, the Company hereby employs the
Executive as the President, which employment the Executive hereby accepts, all
in the capacity and on the terms and conditions hereinafter set forth.  

 

1.2

Duties.  (a)   During the Term, the Executive shall devote his full working
time, attention and energies to the business of the Company and to the
performance of his services hereunder, all under and subject to the direction
and control of the Board of Directors of Royce (the “Board”).  

(b)

In his capacity as President, the Executive shall be the senior executive
officer of the Company with principal responsibility for developing the business
strategies, policies and operations of the Company and shall perform such other
duties for the Company as are consistent with his position, including, without
limitation, the senior supervisory responsibility for acquisitions and mergers,
equity and debt financings; product offerings (including pricing decisions);
opening and maintaining new offices, closing offices and establishing new
subsidiaries; all corporate transaction activities, including without
limitation, establishing joint ventures and strategic alliances and having the
authority to approve any contract or arrangement with a third party involving
the expenditure or commitment of Company funds in the normal course of business.

(c)

In addition, the Executive shall be the senior executive with principal
responsibility for implementing the strategic business policies and controlling
the operations of the Company and shall perform such duties for the Company as
are consistent with the

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foregoing, including, without limitation, hiring and terminating executives and
other employees, preparing and obtaining approval from the Board of the
Company’s annual budget, cash management activities (including banking
arrangements and investments), and contracting with accountants, attorneys,
suppliers, customers and other third parties, including software licensees and
strategic partners in the ordinary course of business.

(d)

The services to be performed by the Executive shall be commensurate with the
position of the Executive as the most senior executive of the Company, and no
officer of the Company, other than Executive shall report directly to the Board.
 In this connection, during the Term (i) the Executive shall not render services
to or for any other person, firm, corporation or business in this capacity and
(ii) shall have no interest directly or indirectly in any other person, firm,
corporation or business whose business is related to or competitive with the
business of the Company.

(e)

The Executive agrees to be subject to and operate under the Code of Ethics and
Professional Conduct as adopted by the Board of Royce.  Violations of this Code
of Ethics and Professional Conduct shall subject the Executive for Termination
for Cause under Article IV below.

1.3

Term.  The term of employment shall commence as of the date of this Agreement
and shall continue until the fifth (5th) anniversary of the date hereof (the
“Initial Term”).  Thereafter, unless either party shall send written notice of
termination to the other at least one hundred and eighty (180) days prior to the
termination of the Initial Term or any extension term, this Agreement shall
automatically be renewed from year to year on the terms and conditions contained
herein.  Notwithstanding the foregoing, this Agreement shall be subject to the
termination provisions set forth in Article IV below.  For purposes of this
Agreement, “Term” shall mean collectively the Initial Term and any renewal term,
if any, during which this Agreement remains in effect.

 

ARTICLE II

 SALARY; BONUS; OPTIONS

         2.1

Annual Base Salary.  (a)  During the Term, the annual base salary (the “Base
Salary”) to be paid by the Company to the Executive shall be One Hundred and
Fifty Thousand Canadian Dollars ($150,000 CAD), payable in equal bi-monthly
installments or in such other manner as the parties shall mutually agree,
subject to withholding for applicable taxes. The Compensation Committee of the
Board (the “Committee”) shall review the salary compensation of the Executive
annually during the Term and may increase, but not decrease, such salary in its
discretion.   

 

2.2

Bonus.  (a) In addition to the Base Salary, the Executive shall receive a bonus
(the “Bonus”) in an amount to be determined by the Committee at the end of the
first fiscal year of the Company based on the net income and cash flow of the
Company.  Such calculation methodology, percentage, limitations and other
criteria will be utilized in all subsequent years unless amended in writing by
both the Committee and the Executive.

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(b)

The calculation of net income and cash flow shall be made in accordance with
generally accepted accounting principles applied consistently with the
principles applied in the preparation of the financial statements of the Company
for each fiscal year.  Net income and cash flow shall be verified by the
Company’s independent public accountants, not later than ninety (90) days after
conclusion of the applicable year.

(c)

The Bonus shall be paid to the Executive within ten (10) days following the
verification by the Company’s independent public accountants of the net income
and cash flow to which such Bonus is applicable and approval of such by the
Committee.  

ARTICLE III

BENEFITS

3.1

Business Expenses

The Company, upon presentation by the Executive of appropriate substantiating
documentation, shall reimburse the Executive for all reasonable and necessary
business expenses incurred by the Executive in connection with the performance
of his duties under this Agreement, including reasonable accommodation expenses
during travel required in connection with the performance of the Executive’s
duties.  The Company shall provide the Executive with a corporate credit card,
which the Executive shall use solely for purposes of performing his duties under
this Agreement and not for personal use.

3.2

Automobile.  The Company, upon appropriate approval by the Committee which shall
not be reasonably withheld, shall lease an automobile for Executive’s use during
the Term; and the Company shall pay all expenses in connection with the use of
such automobile, including without limitation, gas, insurance and maintenance.

3.3

Life and Disability Insurance.  The Company will maintain in effect throughout
the Term an individual policy or policies of life insurance on the life of the
Executive in the aggregate face amount of not less than CDN$1,000,000, which
shall be payable to the Company.  Upon the non-renewal of this Agreement at the
end of the Term or the termination or expiration of this Agreement for any
reason whatsoever, the Executive shall have the right to assign and transfer
said life insurance policy as he so desires. The Company shall also maintain a
disability policy on the Executive on such terms and conditions as are
reasonable.

3.4

Vacation.  

The Executive shall be entitled to four (4) weeks of paid vacation per year.  It
is understood that such vacation may be taken at any time or from time to time
during the twelve (12) consecutive month period to which it relates, as the
Executive’s duties hereunder may reasonably permit.  Any vacation not taken in
any twelve (12) consecutive month period may be taken only in the following
twelve (12) consecutive month period.

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3.5

Additional Benefits.

  The Executive shall be entitled to participate in any pension or profit
sharing plans, group health, accident or life insurance plans, group medical and
hospitalization plan, and other similar benefits as may be available to the
employees of the Company.  

3.6

Stock Options

The Executive shall be granted not less than 650,000 options to purchase common
stock of Royce as consideration to enter into this Agreement. The stock options
will have an exercise price of $0.15 USD per share and shall vest in equal
quarterly installments over three years from the grant date. The stock options
will be exercisable over a 10 year period from the date of grant and expire at
the end of such term. These options are transferable to immediate family members
(or to a trust or other entity solely for their benefit) for estate planning
purposes.

ARTICLE IV

TERMINATION

4.1   Termination for Cause.  

(a)  The Executive's engagement hereunder may be terminated by the Company prior
to the expiration of the Term (and thereupon the Term shall be such shorter
period) in the event the Company discharges Executive for "Cause".  If the
Company terminates the Executive for Cause, the Executive shall be entitled to
receive, in a lump sum cash payment, the Base Salary accrued through the date of
termination, plus any accrued vacation, in each case to the extent therefore
unpaid.  In addition to the foregoing, the Executive shall be entitled to
receive the proportionate amount of the Bonus which accrued prior to the date of
his termination, provided, that the amount of said payment and the time it shall
be paid to the Executive shall be determined pursuant to Section 2.2 of this
Agreement.

 (b)      For purposes hereof, “Cause” shall mean any one of the following:

(A)

willful and continuing disregard of his job responsibilities or material breach
by the Executive of this Agreement; provided, however, that (i) the Company
shall first deliver twenty (20) days prior written notice (“Termination Notice”)
of its intent to terminate the Executive for Cause, which notice shall specify
in reasonable detail the basis for the Company’s determination that such Cause
exists; (ii) the Executive shall be given a reasonable time not exceeding thirty
(30) days to terminate the conduct or cure the breach specified in the
Termination Notice; and (iii) if the Executive so requests in writing within ten
(10) days after delivery to him of the Termination Notice, the Company shall
promptly afford the Executive the right, in person and accompanied by his
counsel, to a full, fair and complete hearing before the Board, in which event
such termination shall not take place unless and until the Company shall have
sent a further written notice confirming the Termination Notice; or

(B)

being convicted of a felony or other serious crime.  

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4.2   Termination Without Cause or for Good Reason.  

(a)  

If, before the last day of the Term, (i) the Company terminates the Executive's
employment other than for Cause, (ii) the Executive terminates his employment
for Good Reason (as defined below), or (iii) his employment is terminated
pursuant to Section 4.3 below, the Executive shall be paid an immediate lump sum
cash payment equal to the sum of:

(i) the unpaid Base Salary to which he would have been entitled for the
remainder of the Term (based upon the Base Salary in effect on the date of
termination); plus

(ii)  an amount equal to the product of the number of years and fractional years
for the remainder of the Term multiplied by fifty percent (50%) of the amount of
the annual Base Salary in effect as of the date of termination.

In addition to the foregoing, the Executive shall be entitled to the Bonus to
which he would have been entitled in each year for the remainder of the Term,
provided that the amount of the Bonus and the time it shall be paid to the
Executive shall be determined pursuant to Section 2.2 of this Agreement.

(b)

The following events or circumstances shall constitute “Good Reason,” entitling
the Executive to terminate his employment in the manner set forth above:

(i)

the assignment to the Executive of any duties materially inconsistent with the
Executive's position (including status, offices, and reporting requirements),
authority, duties or responsibilities as contemplated by Article I of this
Agreement or any other material breach of this Agreement by the Company,
excluding for this purpose any action not taken in bad faith and which is
remedied by the Company within ten (10) days after receipt of notice thereof
given by the Executive; and

(ii)

any failure by the Company, in any respect, to comply with any of the
compensation or benefits provisions of this Agreement, other than a failure not
occurring in bad faith and which is remedied by the Company within ten (10) days
after receipt of notice thereof given by the Executive.

4.3

Change of Control.  If a Change of Control (as defined as the sale of more than
thirty percent (30%) of the voting stock of the Company ) occurs and, (a) within
two (2) years following such Change of Control, the Company terminates the
Executive’s employment other than for Cause, or the Executive terminates his
employment for Good Reason, or (b) no earlier than twelve (12) months nor more
than eighteen (18) months after such Change of Control, the Executive
voluntarily terminates his employment with or without Good Reason, then, for
purposes of determining the amounts to be paid to the Executive pursuant to
Section 4.2(a) above, the Term shall be deemed extended to a date which is the
later of either two (2) years from the date of such Change of Control or two (2)
years after the date of termination.

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4.4

Disability; Death.

In the event that during the Term the Executive shall either die or in the
reasonable judgment of the Board, be unable to perform his duties because of any
medically determinable physical or mental impairment for a period in excess of
one-hundred twenty (120) days in any twelve (12) month period, the Company shall
have the right to suspend payment of the Base Salary for any time after the
expiration of thirty (30) days after such determination, and at any time
thereafter, to terminate this Agreement.  In the event of such termination, the
Company shall pay to the Executive or his legal representative (i) the amount of
the Base Salary payable hereunder for a period of one (1) year following the
termination date at the rate prevailing on the termination date and (ii) any
accrued and unpaid Bonus.

4.5

Liquidated Damages; No Mitigation. The parties agree and acknowledge that in
view of the difficulty of ascertaining the amount of actual damages incurred by
the Executive in connection with his termination pursuant to Sections 4.2 and
4.3, the obligation of the Company to make any payments to the Executive in
connection with such termination and the amounts thereof shall constitute
liquidated damages, and the Executive shall have no obligation to mitigate such
damages in any way whatsoever, or to return any payments made to him under any
circumstances.

ARTICLE V

REPRESENTATION; NON-COMPETITION; CONFIDENTIALITY

5.1

Executive Representation.  The Executive represents that the Executive’s
execution of this Agreement and the performance of his duties required hereunder
will neither be a breach of any other employment or other agreement nor a breach
of any non-competition or similar agreement.

5.2

Non-Competition.  (a)  The Executive agrees that during the Term and for the
period of six (6) months thereafter, he will not engage, directly or directly,
either as principal, agent, consultant, proprietor, creditor, stockholder,
director, officer or employee, or participate in the ownership, management,
operation or control of any business which directly or indirectly competes with
the business of the Company.  The Executive acknowledges and agrees that the
current market for the Company's business extends throughout the world and that
it is therefore reasonable to prohibit the Executive from competing with the
Company anywhere in such territory. This Section shall not apply to the
Executive’s ownership of less than five percent (5%) of the capital stock of a
company having a class of capital stock which is traded on any national stock
exchange or on the over-the-counter market.

(b)

During the Term and for the period of six (6) months thereafter, the Executive
agrees that he will not, directly or indirectly, (i) solicit, divert or recruit
or encourage any of the employees of the Company, or any person who was an
employee of the Company during the Term, to leave the employ of the Company or
terminate or alter their contractual relationship in a way that is adverse to
the Company's interests, (ii) solicit or divert business from the Company, or
assist any person or entity in doing so or attempting to do so or (iii) cause or
seek to cause any person or entity to refrain from dealing or doing business
with the Company or assist any person or entity in doing so or attempting to do
so.

 

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5.3

Confidential Information.  (a)  The Executive agrees that he shall hold in
strict confidence and shall not at any time during or after his employment with
the Company, directly or indirectly, (i) reveal, report, publicize, disclose, or
transfer any Confidential Information (as described below) or any part thereof
to any person or entity, (ii) use any of the Confidential Information or any
part thereof for any purpose other than in the course of his duties on behalf of
the Company, or (iii) assist any person or entity other than the Company to
secure any benefit from the Confidential Information or any part thereof.  All
Confidential Information (regardless of the medium retained) and all abstracts,
summaries or writings based upon or reflecting any Confidential Information in
the Executive's possession shall be delivered by the Executive to the Company
upon request by the Company or automatically upon the expiration of the Term or
termination of this Agreement.

 

(b)

For purposes of this Agreement, "Confidential Information" shall mean any
information relating to the business, operations, affairs, assets or condition
(financial or otherwise) of the Company which is not generally known by
non-company personnel, or is proprietary or in any way constitutes a trade
secret (regardless of the medium in which information is maintained) which the
Executive develops or which the Executive obtains knowledge of or access to
through or as a result of the Executive’s relationship with the Company.
Confidential Information specifically includes, without limitation, business and
marketing plans, financings, cost and pricing information, supplier information,
all source code, system and user documentation, and other technical
documentation pertaining to the hardware and software programs of the Company,
including any proposed design and specifications for future products and
products in development, and all other technical and business information
considered confidential by the Company.  Confidential Information shall not
include any information that is generally publicly available or otherwise in the
public domain other than as a result of a breach by the Executive of his
obligations hereunder.  For purposes of this Agreement, information shall not be
deemed Confidential Information if (i) such information is available from public
sources, (ii) such information is received from a third party not under an
obligation to keep such information confidential, or (iii) the Executive can
conclusively demonstrate that such information had been independently developed
by the Executive.

5.4

Remedies.

The Executive agrees and acknowledges that the foregoing restrictions and the
duration and the territorial scope thereof as set forth in this Sections 5.2 and
5.3 are under all of the circumstances reasonable and necessary for the
protection of the Company and its business.  In the event that the Executive
shall breach any of the provisions of Sections 5.2 or 5.3, in addition to and
without limiting or waiving any other remedies available to the Company, at law
or in equity, the Company shall be entitled to immediate injunctive relief in
any court, domestic or foreign, having the capacity to grant such relief, to
restrain any such breach or threatened breach and to enforce the provision of
this Agreement.  

 

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ARTICLE VI

MISCELLANEOUS

6.1

Entire Agreement.  This Agreement constitutes the entire understanding between
the Company and the Executive with respect to the subject matter hereof and
supersedes any and all previous agreements or understandings between the
Executive and the Company concerning the subject matter hereof, all of which are
merged herein.

6.2

Successors.  This Agreement shall be binding upon and inure to the benefit of
the Executive and his heirs and personal representatives, and the Company and
its successors and assigns.

6.3

Notices. All notices and other communications required or permitted hereunder
shall be delivered personally, sent via certified or registered mail, return
receipt requested, or next day express mail or overnight, nationally recognized
courier, postage prepaid with proof of receipt, to the address of record for the
Executive in the payroll records of the Company.  Such addresses may be changed
by notice given in the manner provided herein. Any such notice shall be deemed
given (i) when delivered if delivered personally, (ii) the day after deposit
with the express or courier service when sent by next day express mail or
courier or (iii) five (5) days after deposit with the postal service when sent
by certified or registered mail.

6.4

Governing Law.  This Agreement shall be governed by and construed in accordance
with the laws of the Province of British Columbia, without regard to choice of
law principles.

6.5

Amendment and Modification.  This Agreement may be amended, modified or
supplemented only by written agreement executed by the Company, the Committee
and the Executive.

6.6

Headings.  The section headings herein are inserted for the convenience of the
parties only and are not to be construed as part of the terms of this Agreement
or to be taken into account in the construction or interpretation of this
Agreement.

6.7

Counterparts.  This Agreement may be executed in counterparts, each of which
shall be deemed to be an original but both of which together will constitute one
and the same instrument.

 

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IN WITNESS WHEREOF, the parties have entered into this Executive Employment
Agreement as of the day and year first above written.

By:

/s/ Donald Gee

SMART-TEK COMMUNICATIONS INC.

 Authorized signatory

Name: Donald Gee

 Title: Director

 

 

By:

/s/ Denis Gallant

ROYCE BIOMEDICAL, INC Authorized signatory DENIS GALLANT CHAIRMAN, Compensation
Committee  

 

By:

/s/PerryLaw

PERRY LAW