Exhibit 10.2
 
EMPLOYMENT AGREEMENT
 
THIS AGREEMENT is made on April 19, 2007, by and between Quintek Technologies,
Inc. (“QUINTEK”), and Andrew Haag (“Executive”), with reference to the following
facts:
 

 
A.
QUINTEK is in the business of providing hardware, software and services for the
Document Imaging and Business Process market;

 

 
B.
QUINTEK desires to retain EXECUTIVE for his experience and ability on a
formalized basis in the position of Chief Financial Officer.

 

 
C.
Executive desires to accept such employment upon the terms and conditions set
forth herein.

 
NOW, THEREFORE, in consideration of the mutual promises contained herein, and
for other valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereby agree as follows:
 
1. Employment and Duties.
 
1.1 Executive shall serve as Chief Financial Officer of QUINTEK. Executive shall
do and perform all services and actions necessary or advisable to promote the
continued success of QUINTEK’S business, subject to the instructions, policies
and limitations which may be set from time to time by its Board of Directors
(the “Board”).
 
1.2 Executive shall devote his time, ability and attention to the business of
QUINTEK during his employment with the exceptions noted in 1.3 below. Executive
shall maintain regular business hours at Quintek’s Huntington Beach facility a
minimum of two days a week unless other Quintek business requires his presence
elsewhere. Executive shall not directly or indirectly render any services of a
business, commercial or professional nature to any other person or organization,
whether for compensation or otherwise, without the prior written consent of the
Board.
 
1.3 QUINTEK hereby provides consent for Executive to continue working in an
advisory and consulting capacity which is not in competition with QUINTEK, as
long such involvement does not detract from his responsibilities at QUINTEK.
 
1.4 Executive acknowledges and agrees that his services to QUINTEK are of a
special, unique and extraordinary character and further acknowledges and agrees
that a breach of any of the covenants or agreements contained in this Agreement
(including but not limited to Sections 2.2 and 7 hereof) is likely to result in
irreparable and continuing damage to QUINTEK for which there will be no adequate
remedy at law. Accordingly, in the event of such breach QUINTEK shall be
entitled to injunctive relief and/or a decree for specific performance, and such
other and further relief as may be proper (including monetary damages, if
appropriate).
 
 
-1-

--------------------------------------------------------------------------------

 
 
2. Term.
 
2.1 The term of employment shall be for five (5) years.
 
2.2 Executive agrees to provide QUINTEK with ninety (90) days written notice
prior to terminating this Agreement.
 
2.3 If Executive is terminated prior to the fifth anniversary of this Agreement
for reasons other than “for cause” or if he becomes “Disabled” (as defined
herein), QUINTEK will provide Executive with twelve (12) months’ notice prior to
terminating this Agreement. If, however, QUINTEK does not provide Executive with
twelve (12) months’ notice or provides less than twelve (12) months’ notice, it
shall provide Executive with an equivalent amount of pay in lieu of notice for
all or any portion of the twelve (12) months’ notice not provided. Such pay in
lieu of notice is in addition to any other sums which may be owed to Executive
pursuant to this Agreement. Any pay in lieu of notice shall constitute severance
pay (“Severance”) and shall be paid over the course of the pay in lieu of notice
period in accordance with QUINTEK’s regular payroll practices at the rate of his
then-current base salary, less standard payroll tax withholdings. In no event
shall QUINTEK be required to pay Severance if Executive resigns, is terminated
after the fifth anniversary of this Agreement for any or no reason, if he is
terminated because he has become “Disabled” or if he is terminated at any time
“for cause”, other than as set forth in Paragraph 2.6. In the event that
QUINTEK’s Recast Profits (as defined in Paragraph 3.3) for the twelve (12) month
period prior to termination amount to less than Two Million Dollars
($2,000,000), QUINTEK shall pay a separation benefit equivalent to three month’s
base salary at his then-current rate, less standard payroll tax withholdings.
 
2.4 As used herein, the term “for cause” shall be limited to the following:
 
2.4.1 Executive’s continued failure or habitual neglect to perform his duties as
set forth in Section 1 of this Agreement after receiving written notice of the
alleged deficiencies and having had an opportunity to improve; or
 
2.4.2 Executive’s engaging in any activity or conduct which is specifically
precluded by this Agreement, including any activity competitive with or
intentionally injurious to QUINTEK; or
 
2.4.3 Intentional malfeasance or misfeasance or gross neglect of duty engaged in
by Executive while carrying out his duties owing to QUINTEK under this
Agreement; or
 
2.4.4 Executive’s impairment due to alcohol or other substance abuse which in
the reasonable judgment of QUINTEK affects or interferes with, or may affect or
interfere with, Executive’s performance or capacity to properly discharge
Executive’s duties, such impairment not to include an isolated incident
occurring off the premises during non-working hours; or
 
 
-2-

--------------------------------------------------------------------------------

 
 
2.4.5 The commission by Executive of a felony or a crime involving moral
turpitude (whether or not prosecuted), the charge or indictment of Executive by
a governmental or prosecutorial authority of the same or the pleading by
Executive of no contest (or similar plea) to the same, whether or not committed
in the course of his employment; or
 
2.4.6 Executive’s committing any act of dishonesty against QUINTEK or using or
appropriating for his personal use or benefit any funds or properties of
QUINTEK, unless such use or appropriation was specifically authorized by the
Board or the Chief Executive Officer in writing.
 
2.5 This Agreement shall not be terminated by any merger or consolidation where
QUINTEK is not the consolidated or surviving corporation or by any transfer of
all or substantially all of the assets of QUINTEK. In the event of any such
merger or consolidation or transfer of assets, the surviving or resulting
corporation or the transferee of the assets of QUINTEK shall be bound by and
shall have the benefit of the provisions of this Agreement, and QUINTEK shall
take all steps necessary to ensure that such corporation or transferee is bound
by the provisions of this Agreement.
 
2.6 If Executive is terminated prior to the fifth anniversary of this Agreement
“for cause” as defined by Paragraphs 2.4.1 and 2.4.4, QUINTEK shall pay
Executive a separation benefit equivalent to one month’s base salary at his
then-current rate, less standard payroll tax withholdings (“Separation
Benefit”).
 
2.7 QUINTEK may terminate Executive if he becomes Disabled, such termination to
be made in QUINTEK’s sole discretion. For the purposes of this Agreement,
“Disabled” shall mean that Executive is unable to perform his duties hereunder,
either with or without a reasonable accommodation, as the result of his
incapacity due to physical or mental illness or condition, and such inability
continues for at least thirty (30) consecutive calendar days or equals or
exceeds sixty (60) calendar days during any consecutive twelve (12)-month
period. If Executive is terminated prior to the fifth anniversary of this
Agreement due to his becoming Disabled, QUINTEK shall pay Executive a separation
benefit equivalent to three month’s base salary at his then-current rate, less
standard payroll tax withholdings (“Disability Benefit”).
 
2.8 As a precondition to paying the foregoing Severance, Separation Benefit or
Disability Benefit, QUINTEK may require that Executive re-confirm his
obligations under Paragraph 7 and execute a general release of any and all
claims he might have against QUINTEK, whether arising out of his employment or
termination of employment, other than QUINTEK’s obligation to pay the Severance,
Separation Benefit or Disability Benefit, as the case may be. Furthermore, any
salary, severance, separation benefit or disability benefit or other amounts due
to Executive following termination may be offset against any amounts due to
QUINTEK from Executive.
 
3. Compensation. 
 
3.1 As compensation for services hereunder, Executive shall receive a salary of
$10,000 per month, less standard payroll tax withholdings (the “Salary”), during
the term of this Agreement, subject to adjustment as set forth in Paragraph 3.2
below.
 
 
-3-

--------------------------------------------------------------------------------

 
 
3.2 Executive’s Salary shall remain unchanged until such time as QUINTEK’s
quarterly Gross Revenue shall exceed or equal the sum of $600,000. If QUINTEK’s
quarterly Gross Revenue shall exceed or equal the sum of $600,000, Executive’s
Salary for the following quarter shall be increased to the sum of $12,000 per
month, less standard payroll tax withholdings. If QUINTEK’s quarterly Gross
Revenue shall exceed or equal the sum of $900,000, Executive’s Salary for the
following quarter shall be increased to the sum of $15,000 per month, less
standard payroll tax withholdings. If QUINTEK’s quarterly Gross Revenue shall
exceed or equal the sum of $1,200,000, Executive’s Salary for the following
quarter shall be increased to the sum of $18,000 per month, less standard
payroll tax withholdings If QUINTEK’s quarterly Gross Revenue decreases at any
time, Executive’s Salary shall be decreased to the corresponding monthly salary
described in this Paragraph, subject to a final reduction to the base Salary
amount set forth in Paragraph 3.1 above. For the purposes of this Agreement,
“Gross Revenue” shall be defined as QUINTEK’s gross revenue for the applicable
quarter as calculated by QUINTEK’s regular accountant(s)
 
3.3 In addition, Executive will be eligible to receive an annual bonus based
upon the Recast Profits of QUINTEK over the prior twelve (12) month
calendar/fiscal year period. If QUINTEK’s Recast Profit Margin for the prior
twelve (12) month calendar/fiscal year period is less than six (6%) percent then
Executive will not receive any bonus. If QUINTEK’s Recast Profit Margin for the
prior twelve (12) month calendar/fiscal year period equal or exceed six (6%)
percent, then Executive will be paid a bonus of three (3%) percent of Recast
Profits, less standard payroll tax withholdings, within thirty (30) days of such
year end. For each additional one (1%) percent of Recast Profits over and above
six (6%) percent of Recast Profits for the prior twelve (12) month
calendar/fiscal year period, Executive will receive an additional bonus of one
(1%) percent of Recast Profits less standard payroll tax withholdings, within
thirty (30) days of such year end, such additional bonus to be prorated for each
additional one (1%) percent in Recast Profit Margin over and above the sum of
six (6%) percent of Recast Profit Margin for the prior twelve (12) month
calendar/fiscal year period. For example, if at the end of calendar/fiscal year
2007, QUINTEK’s Recast Profits for the prior year amount to $994,200 then
Executive would be paid the sum of $59,552 within thirty (30) days. For the
purposes of this agreement, “Executive’s Compensation” is defined as Executive’s
salary, car allowance (not to exceed Five Hundred Dollars ($500) per month and
interest paid on Executive’s loans (if any) to QUINTEK, as calculated by
QUINTEK’s regular accountant(s). For the purposes of this Agreement, “Recast
Profits” shall be defined as net profits before interest, taxes, depreciation
and amortization (EBITDA), less Executive’s Compensation. For the purposes of
this Agreement, “Recast Profit Margin” shall be defined as the quotient of
Recast Profits divided by Gross Revenue
 
3.4 Executive will be paid a car allowance of Five Dollars ($500) per month
during the term of this Agreement. This automobile allowance will be QUINTEK’s
sole obligation with respect to Executive’s leased or owned automobile;
Executive will maintain the costs of license, insurance and maintenance during
this period. In addition, Executive accepts such automobile allowance on such
terms and conditions as QUINTEK may establish from time to time regarding the
payment of an automobile allowance to its employees.
 
 
-4-

--------------------------------------------------------------------------------

 
 
3.5 Executive shall be entitled to all other employment benefits provided by
QUINTEK to its full-time employees as set forth in QUINTEK’s Employee Handbook,
which is subject to revision from time to time at QUINTEK’s discretion.
 
3.6 All compensation and other payments to Executive hereunder shall be subject
to withholding for federal, state and local income taxes, social security,
disability and the like.
 
3.7 Other Benefits. Executive shall be entitled to continue to participate in or
receive benefits under all of the Employee Benefit Plans of QUINTEK under which
Employee may participate in accordance with applicable laws and the terms of
such plans in effect on the date hereof, or under plans or arrangements that
provide Executive with at least substantially equivalent benefits to those
provided under such Employee Benefit Plans. As used herein, "Employee Benefit
Plans" include, without limitation, each pension, and retirement plan;
supplemental pension, retirement, and deferred compensation plan; savings and
profit-sharing plan; stock ownership plan; stock purchase plan; stock option
plan; life insurance plan; medical insurance plan; disability plan; and health
and accident plan or arrangement established and maintained by QUINTEK on the
date hereof. Executive shall be entitled to participate in or receive benefits
under any employee benefit plan or arrangement which may, in the future, be made
available to QUINTEK's executives and key management employees, subject to and
on a basis consistent with the terms, conditions, and overall administration of
such plan or arrangement. Nothing paid to Executive under the Employee Benefit
Plans presently in effect or any employee benefit plan or arrangement which may
be made available in the future shall be deemed to be in lieu of compensation
payable to Executive. Any payments or benefits payable to Executive under a plan
or arrangement in respect of any calendar year during which Executive is
employed by QUINTEK for less than the whole of such year shall, unless otherwise
provided in the applicable plan or arrangement, be prorated in accordance with
the number of days in such calendar year during which he is so employed. Should
any such payments or benefits accrue on a fiscal (rather than calendar) year,
then the proration in the preceding sentence shall be on the basis of a fiscal
year rather than calendar year.
 
3.8 Vacations. Executive shall be entitled to the number of paid vacation days
in each calendar year determined by QUINTEK from time to time for its senior
executive officers. Executive shall also be entitled to all paid holidays given
by QUINTEK to its senior executive officers.
 
3.9 Offices. Executive agrees to serve as a director of QUINTEK, if elected or
appointed thereto, provided he is indemnified for serving in such capacity on a
basis no less favorable than is currently provided by QUINTEK's By-laws and any
indemnification agreement with any other director.
 
4. Business Expenses. Executive is authorized to incur reasonable expenses for
promoting and conducting the business of QUINTEK, including reasonable
expenditures for entertainment and travel. QUINTEK shall reimburse Executive
monthly for all such business expenses upon presentation of documentation
establishing the amount, date, place and essential character of the
expenditures, in such form as QUINTEK may require and sufficient to satisfy any
Internal Revenue Code requirements for such expenses to be deductible to
QUINTEK..
 
 
-5-

--------------------------------------------------------------------------------

 
 
5. Health Insurance. Executive shall be entitled to receive such medical and
dental insurance benefits as are designated and made available by QUINTEK for
its employees generally, which benefits are subject to change or revocation at
QUINTEK’ sole discretion.
 
6. Issuance of Equity. 
 
6.1 QUINTEK agrees that is will issue to executive 2,000,000 options to purchase
common stock under the Company’s stock purchase plan. Stock options granted
under the Company's stock purchase plan will have the following criteria: they
will expire 5 years from the date of vesting or upon termination of employment
status with the Company; they will give the Executive the right to purchase
stock in the Company at and exercise price equal to the prior day closing bid
price as quoted on the OTCBB, vesting to occur immediately. QUINTEK acknowledges
that it has committed to sell to Executive additional shares of common stock (or
grant to Executive rights to purchase additional shares of common stock) in
QUINTEK so that, including all options or shares previously issued to or
purchased by Executive, Executive would own, in the aggregate, shares of common
stock or rights to purchase shares of common stock representing ten percent
(10%) of the current outstanding common stock in QUINTEK prior to taking into
account the issuance of such additional shares to Executive. QUINTEK and
Executive acknowledge and agree that the purchase price for such shares (or the
exercise price for such options) will be the lesser of $.0662 per share or the
“Fixed Conversion Price” of the Secured Convertible Debentures issued by the
Company and held by Cornell Capital Partners. These options shall expire five
years from the date of vesting. It is contemplated that QUINTEK and Executive
will enter into a separate agreement or agreements on these additional shares
and/or options within 90 days of the date of this Agreement. Specifically, it is
presently anticipated that the new stock agreement(s) will have, at minimum, new
termination and repurchase provisions, with the termination provisions to be
consistent with the termination provisions set forth in this Agreement. Options
shall vest according to the following schedule: Options giving Executive the
right to 2.5% of outstanding common stock at the time of execution of this
agreement, options giving Executive the right to purchase an additional 2.5% of
outstanding common stock will be granted to Executive upon the 1 year
anniversary of this agreement for the following three years. In the event of a
sale of QUINTEK, termination of this agreement by the Company, or any other
event that may impede QUINTEK’s ability to fulfill its obligations under this
Agreement, all options will immediately vest.
 
6.1.1 Executive shall receive grant(s) of Preferred Stock upon achieving certain
milestone to be determined within 30 days of the execution of this agreement.
 
6.2 Manner of Exercise of Options.  The options or rights to purchase common
stock described in Paragraph 6.1 above (collectively, the “Option”) may be
exercised in whole at any time, or in part from time to time, during the period
commencing on the date of issuance (“Base Date”) and expiring on the date of
expiration (“Expiration Date”) or, if any such day is a day on which banking
institutions in the City of New York, New York are authorized by law to close,
then on the next succeeding day that shall not be such a day, by presentation
and surrender of Options to QUINTEK at its principal office, or at the office of
its stock transfer agent, if any, with QUINTEK’s Option Exercise Form duly
executed and accompanied by payment (either in cash or by certified or official
bank check, payable to the order of QUINTEK) of the Exercise Price for the
number of shares specified in such Form and instruments of transfer, if
appropriate, duly executed by the Holder or its duly authorized attorney.
 
 
-6-

--------------------------------------------------------------------------------

 
 
6.3 Partial Exercise; Taxes. If Option should be exercised in part only, QUINTEK
shall, upon surrender of Option for cancellation, execute and deliver a new
Option evidencing the rights of Executive thereof to purchase the balance of the
shares purchasable hereunder. Upon receipt by QUINTEK of Option, together with
the Exercise Price, at its office, or by the stock transfer agent of QUINTEK at
its office, in proper form for exercise, Executive shall be deemed to be the
holder of record of the shares of common Stock issuable upon such exercise,
notwithstanding that the stock transfer books of QUINTEK shall then be closed or
that certificates representing such shares of Common Stock shall not then be
actually delivered to Executive. QUINTEK shall pay any and all documentary stamp
or similar issuer taxes
 
7. Property Rights, Confidential Information, and Trade Secrets of QUINTEK.
 
7.1 As used in this Agreement, the terms “Confidential Information” and “Trade
Secrets”, collectively or individually, shall mean the following:
 
7.1.1 QUINTEK’s contracts, marketing plans, purchases and sales, whether
realized or in development, including, without limitation, any source of ideas
or projects;
 
7.1.2 Information relating to QUINTEK’s business, whether or not such
information is in writing;
 
7.1.3 Information relating to QUINTEK’s clients and candidates, including such
persons’ resumes, job descriptions, hiring needs and preferences, computer
systems, expertise, business endeavors, purchasing habits, and other information
concerning QUINTEK’s business relations with its clients and candidates;
 
7.1.4 Information of a personal nature relating to QUINTEK’s employees, officers
and managers, including such persons’ salaries, benefits, special skills and
knowledge, identities and performance; and
 
7.1.5 QUINTEK’ records, including, but not limited to, electronic, written,
typed, or printed, including without limitation client and candidates lists and
charts, other lists and charts, memoranda, notebooks, correspondence, notes,
letters, plans, proposals, contracts, files, resumes, job descriptions, employee
files, manuals, blank forms, materials and supplies, and all information therein
contained, and similar items affecting or relating to the business of QUINTEK,
whether prepared by QUINTEK, Executive, or otherwise, and any other tangible
source of information (whether or not written) relating to QUINTEK.
 
7.2 Executive, for the duration of his employment has had and will have access
to and become acquainted with Trade Secrets and/or Confidential Information of
QUINTEK which are owned by QUINTEK and which are regularly used in the operation
of the business of QUINTEK. Executive shall not disclose any of the aforesaid
Trade Secrets and/or Confidential Information, directly or indirectly, or use
Trade Secrets and/or Confidential Information in any way, either during the term
of this Agreement or at any time thereafter, except actions undertaken for the
benefit of QUINTEK as required in the course of his employment. All Trade
Secrets and/or Confidential Information coming into his possession shall remain
the exclusive property of QUINTEK and shall not be copied and/or removed from
the premises of QUINTEK under any circumstances whatsoever without the prior
written consent of QUINTEK, except in the normal course of Executive’s
employment. Under no circumstance can such Trade Secrets and/or Confidential
Information be allowed to fall directly or indirectly into the hands of or be
used by any competitor or potential competitor of QUINTEK’s. To the extent that
Executive originates, develops, or reduces to writing Trade Secrets and/or
Confidential Information, Executive does so within the scope of his employment.
QUINTEK possesses all right, title, and interest in all Confidential Information
and/or Trade Secrets, whether created by QUINTEK or Executive.
 
 
-7-

--------------------------------------------------------------------------------

 
 
7.3 In the event of any termination of employment with QUINTEK, Executive agrees
to deliver promptly to QUINTEK all files, records, documents, drawings, client
or candidate lists, resumes, job descriptions, plans, proposals, contracts,
charts, other lists and charts, equipment, books, notebooks, memoranda, reports,
correspondence, or other written, electronic or graphic records and the like,
and all other Trade Secrets and/or Confidential Information relating to
QUINTEK’s business, which are or have been in his possession or under his
control, in good condition, ordinary wear and tear and damage by any cause
beyond the control of Executive excepted.
 
7.4 Executive shall not, following the termination of his employment with
QUINTEK, either directly or indirectly, or by action in concert with others,
either for Executive’s own benefit or for the benefit of any other person or
entity:
 
7.4.1 Make known to any person the names, addresses or telephone numbers or any
of the candidates, clients or projects of QUINTEK or any other Trade Secrets
and/or Confidential Information pertaining to them;
 
7.4.2 For a period of twelve (12) months following the termination of
Executive’s employment with QUINTEK, call on, solicit, divert, interfere with or
take away, or attempt to call on, solicit, divert, interfere with or take away,
any of the projects, clients or candidates of QUINTEK, including without
limitation all those clients, candidates and projects with whom Executive became
acquainted during his employment with QUINTEK, either for Executive’s own
benefit or for any other person or entity;
 
7.4.3 Induce in any way, directly or indirectly, QUINTEK’s employees, and/or
persons working with and/or contracting with QUINTEK, to disclose QUINTEK’s
Trade Secrets and/or Confidential Information to any person;
 
7.4.4 For a period of twelve (12) months following the termination of
Executive’s employment with QUINTEK, hire or take away, or attempt to hire or
take away, any of QUINTEK’s employees, and/or independent contractors, and/or
persons working with and/or contracting with QUINTEK; and
 
 
-8-

--------------------------------------------------------------------------------

 
 
7.4.5 For a period of twelve (12) months following the termination of
Executive’s employment with QUINTEK, induce or influence (or seek to induce or
influence) any person who is engaged (as an employee, agent, independent
contractor, or otherwise) by QUINTEK to terminate his or her employment or
engagement or breach their duties of obligations owed to QUINTEK.
 
7.5 For the duration of this Agreement, Executive shall not, directly or
indirectly, either as an employee, employer, consultant, agent, principal,
partner, stockholder, corporate officer, director or in any other individual or
representative capacity, engage or participate in any business that is in
competition in any manner whatsoever with the business of QUINTEK, without the
prior written consent of the Board or the Chief Executive Officer. “Directly or
indirectly” means that Executive will not benefit in any way, shape or form from
any affiliation or consultation with any business that is engaged in film based
imaging, custom application development, staffing and permanent placements,
whether or not he is an owner, director, officer, shareholder, employee or
consultant for such firm or entity.
 
8. Entire Agreement, Etc. This Agreement contains the entire and exclusive
agreement of the parties hereto. No prior written or oral representations
between them originating before the date of the Agreement not embodied herein
shall be of any force or effect. The parties have mutually participated in the
negotiation and preparation of this Agreement and no rule of construction that
the Agreement shall be construed against the drafting party shall apply hereto.
 
9. Modification. This Agreement may not be superseded and none of the terms of
this Agreement can be waived or modified except by an express written agreement
signed by all parties hereto. Any oral representations or modifications
concerning this Agreement (including any fully executed oral agreements or
modifications) shall be of no force or effect unless contained in a subsequent
written modification signed by all parties.
 
10. Release of Any Prior Bonus Claims. As further consideration for this
Agreement, Executive, on his own behalf and on behalf of his heirs, spouse,
executors, administrators, employees and agents, hereby releases and discharges
QUINTEK and its parents, subsidiaries and affiliates, and each of their
respective officers, managers, directors, partners, employees, predecessors,
successors, assigns, stockholders, representatives and agents, individually and
collectively, of and from any and all known or unknown liabilities, claims,
demands or any other thing for which he or any of them have or may have a known
or unknown cause of action, claim, or demand for damages, whether certain or
speculative, which may have at any time prior hereto come into existence or
which may be brought in the future in connection with obligations by QUINTEK to
pay any bonus of any kind to Executive which have arisen at any time prior to
the date of this Agreement.
 
11. Severability. If any term, provision, covenant, or condition of this
Agreement (the “Provision”) is held by an arbitrator or a court of competent
jurisdiction to be invalid, void, or unenforceable, the remaining provisions of
this Agreement shall remain in full force and effect and in no way shall be
affected, impaired, or invalidated. If possible, the Provision shall remain in
effect but shall be modified by the court only to the extent necessary to make
it reasonable.
 
 
-9-

--------------------------------------------------------------------------------

 
 
12. Arbitration. If a dispute should arise between QUINTEK and Executive, or in
the event of any claim arising under or involving any provision of this
Agreement, Executive and QUINTEK agree to make all efforts to resolve these
disputes through (1) voluntary and non-binding mediation; and (2) final and
binding arbitration.
 
This policy applies to, but is not limited to, all disputes relating to
termination of employment, termination or breach of this Agreement, or alleged
unlawful discrimination and/or unlawful harassment. Disputes covered include,
but are not limited to, the following: (a) alleged violations of federal, state
and/or local constitutions, statutes or regulations (including but not limited
to anti-discrimination and anti-harassment laws); (b) claims based on any
purported breach of contractual obligation (including but not limited to breach
of the covenant of good faith and fair dealing and wrongful termination or
constructive termination); (c) claims based on any purported breach of duty in
tort, including but not limited to violations of public policy; and (d) claims
arising under or involving any provision of this Agreement.

Notwithstanding the above, the following types of disputes are expressly
excluded and not covered by this Agreement or policy: (a) disputes related to
worker’s compensation and unemployment insurance; (b) wage and hour disputes
within the jurisdiction of the California Labor Commissioner; (c) disputes which
relate to or arise out of confidentiality or noncompetition conditions of
employment, trade secrets, intellectual property or unfair competition; and (d)
disputes or claims that are expressly excluded by statute or are expressly
required to be arbitrated under a different procedure pursuant to the terms of
an employee benefit plan.
 
IN CONSIDERATION FOR AND AS A MATERIAL CONDITION OF EMPLOYMENT AND CONTINUATION
OF EMPLOYMENT WITH QUINTEK, Executive AND QUINTEK AGREE THAT ALTERNATIVE DISPUTE
RESOLUTION, INCLUDING FINAL AND BINDING ARBITRATION, SHALL BE THE EXCLUSIVE
MEANS FOR RESOLVING COVERED DISPUTES; NO OTHER ACTION MAY BE BROUGHT IN COURT OR
IN ANY OTHER FORUM. THE PARTIES ACKNOWLEDGE AND AGREE THAT BY SIGNING THIS
AGREEMENT THEY ARE WAIVING THEIR RIGHTS TO COURT ACTION AND TO TRIAL BY JUDGE OR
JURY.

IF A DISPUTE IS SUBMITTED TO ARBITRATION, THE DISPUTE SHALL BE SETTLED BY
ARBITRATION IN ORANGE COUNTY, CALIFORNIA, AND JUDGMENT UPON THE AWARD RENDERED
MAY BE ENTERED IN ANY COURT OF COMPENTENT JURISDICTION. THE ARBITRATION SHALL
TAKE PLACE UNDER THE AUSPICES OF THE JAMS/ENDISPUTE ("JAMS") IN ACCORDANCE WITH
JAMS' EMPLOYMENT DISPUTE RESOLUTION PROGRAM. THE PARTY REQUESTING ARBITRATION
SHALL GIVE A WRITTEN DEMAND FOR ARBITRATION TO THE OTHER PARTY SETTING FORTH A
STATEMENT OF THE NATURE OF THE DISPUTE, THE AMOUNT INVOLVED AND THE REMEDIES
SOUGHT. QUINTEK SHALL PAY ALL THE UP-FRONT COSTS OF THE ARBITRATION, INCLUDING
FILING AND HEARING FEES, BUT EACH PARTY SHALL PAY ITS OWN ATTORNEY’S FEES.

Nothing in this Agreement to engage in alternative dispute resolution shall be
construed as precluding Employee from filing a charge with the Equal Employment
Opportunity Commission (“EEOC”), the National Labor Relations Board (“NLRB”) or
other federal, state or local agency, seeking administrative assistance in
resolving claims. However, any claim that is not resolved administratively
through such an agency shall be subject to this Agreement and the ADR Policy.
 
 
-10-

--------------------------------------------------------------------------------

 

This agreement to engage in alternative dispute resolution does not alter or
otherwise affect Employee’s employment under this Agreement. This section and
the ADR Policy shall survive and continue in effect after the termination of
employee’s employment and/or the expiration of this Agreement.
 
13. Choice of Law. This Agreement shall be governed by and interpreted with the
laws of the State of California.
 
14. Employment Policies. Executive shall be subject to QUINTEK’s Employee
Handbook and such other employee policies as QUINTEK may establish from time to
time, which Handbook and policies are subject to revision. To the extent the
Agreement differs from or contradicts QUINTEK’s other employment policies,
whether oral or written, this Agreement shall control.
 
15. Waiver. The failure of either party to insist on strict compliance with any
of the terms of this Agreement shall not be deemed a waiver of that term or of
that party’s right to subsequently enforce that term.
 
16. Attorneys’ Fees. The parties hereto agree to bear their own costs and
attorneys’ fees incurred in the negotiation and drafting of this Agreement or
otherwise incurred prior to the date of execution hereof.
 
17. Notice. Any notices, requests, demands, or other communications with respect
to this Agreement shall be in writing and shall be (i) personally delivered,
(ii) sent by facsimile transmission, (iii) sent by the United States Postal
Service, registered or certified mail, return receipt requested, or (iv)
delivered by a nationally recognized express overnight courier service, charges
prepaid, to the addresses set forth below except that any communications from
Executive to QUINTEK shall also be sent to
________________________________________ (such addresses to be changed by
parties as they may specify from time to time in accordance with this Section).
Any such notice shall, when sent in accordance with the preceding sentence, be
deemed to have been given and received on the earliest of (i) the day delivered
to such address, (ii) the day sent by facsimile transmission, (iii) the third
business day following the date deposited with the United States Postal Service,
or (iv) 24 hours after shipment by such courier service.
 
 
-11-

--------------------------------------------------------------------------------

 
 
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first above written.

       
EMPLOYER:
 
QUINTEK TECHNOLOGIES, INC.
 
   
   
    By:   /s/ Robert Steele  

--------------------------------------------------------------------------------

Its: Chairman & CEO    

 

       
EMPLOYEE:
 
Andrew Haag
 
 
 
   
 

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

[address]
  By:  
/s/ ANDREW HAAG
 

--------------------------------------------------------------------------------

ANDREW HAAG 
   

 
-12-

--------------------------------------------------------------------------------