jmar_10q-ex1012.htm


    EXHIBIT
      10.12


    


     

    


     

    


     

    Executive
      Services Agreement

    


     

    JMAR
      Technologies, Inc. / Tatum - Ned Hall

    


     

    September
      2007

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Executive
      Services Agreement

    


     

    September
      14, 2007

     

    C.
      Neil
      Beer, Ph.D.

    President
      & CEO

    JMAR
      Technologies, Inc.

    10905
      Technology Place

    San
      Diego, CA 92127

     

     

    Dear
      Neil:

     

    Tatum,
      LLC (“Tatum,” “we,” or “us”) is pleased that JMAR Technologies, Inc. (the
“Company,” “you” or “your”) desires to employ Edward C. (“Ned”) Hall, a member
      of Tatum (the “Employee”), to serve as the Chief Financial Officer of the
      Company.  This letter along with the terms and conditions attached as
      Exhibit A and any other exhibits or schedules attached hereto (collectively,
      the
“Agreement”) confirms our mutual understanding of the terms and conditions upon
      which we will make available to you the Employee and Tatum’s intellectual
      capital to the Employee for use in connection with the Employee’s employment
      relationship with you.

     

    Effective
      as of September 17, 2007, the Employee will become your employee serving in
      the
      capacity set forth above and, if applicable, a duly elected or appointed officer
      of the Company.  The Employee will work on a full-time basis and be
      subject to the supervision, direction and control of and report directly to
      you
      and the Company’s Board of Directors.  While the Employee will remain
      a member of Tatum and have access to Tatum’s intellectual capital to be used in
      connection with the Employee’s performance of his duties as CFO of the Company,
      we will have no supervision, direction or control over the Employee with respect
      to the services provided by the Employee to you.

     

    For
      access to Tatum’s intellectual capital, staff and other resources of Tatum, you
      will pay directly to Tatum a fee of $2,500 per month for the first twelve months
      plus a one-time issuance of shares of common stock equal to $2,000 to be issued
      as soon as practicable following the execution of this agreement (“Fees”). After
      the first year, the Tatum fee will be $2,667 per month. After 36 months, the
      fees will be reduced to $1,000 per month for each month Employee is employed
      by
      you.

     

    In
      addition, with respect to any cash Bonus (as defined below) otherwise to be
      paid
      to the Employee, you agree to pay 15% of such cash Bonus directly to Tatum,
      in
      lieu of the Employee.  In addition, you acknowledge that the Employee
      will share with Tatum 15% of any cash proceeds realized from any equity or
      other
      Bonus that the Employee may be granted or provided.  For purposes
      hereof, “Bonus” means any bonus paid, granted or provided by the Company to the
      Employee in equity, cash or other consideration, in each case, in connection
      with services rendered by the Employee to the Company.

     

    Payments
      to the Employee shall be made in accordance with the Company’s standard payroll
      and expense reimbursement policies.  The Company will pay Tatum the
      monthly Fees one month in advance, with the first payment due upon execution
      of
      this Agreement.  The second payment and every payment thereafter will
      be paid in advance before each month-end related to the following
      month.  Payment instructions are set forth in Exhibit A.

     

    
      
        
        

      

      
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    Except
      as
      specifically provided for herein, you will have no obligation to provide the
      Employee with any health insurance benefits or equity or cash
      bonuses.  In lieu of the Employee participating in the
      Company-sponsored employee health insurance plans, the Employee will remain
      on
      his or her current health insurance plans. You will reimburse the Employee
      for
      amounts paid by the Employee for health insurance for himself/herself and
      his/her family of up to an amount per month available under the Company’s
      benefit plan upon presentation of reasonable documentation of premiums paid
      by
      the Employee.  In accordance with the U.S. federal tax law, such
      amount will not be considered reportable W-2 income, but instead, non-taxable
      benefits expense.

     

    As
      an
      employee, the Employee will be eligible for any Company employee retirement
      and/or 401(k) plan and for vacation and holidays consistent with the Company’s
      policy as it applies to senior management.  The Employee will be
      exempt from any delay periods otherwise required for vacation and holiday
      eligibility.

     

    You
      will
      have the opportunity to make the Employee a permanent, full-time member of
      Company management at any time during the term of this Agreement by entering
      into another form of Tatum agreement, the terms of which will be negotiated
      at
      such time.

     

    As
      a
      condition to providing the services hereunder, we require a security deposit
      in
      an amount equal to $5,000 (the “Deposit”), which will only be used by us under
      the limited circumstances described on Exhibit A.  The Deposit
      received by Tatum pursuant to the March 16, 2007 agreement between the Company
      and Tatum will serve as the Deposit hereunder.

     

    The
      Company will provide Tatum or the Employee with written evidence that the
      Company maintains directors’ and officers’ insurance covering the Employee in an
      amount reasonably acceptable to the Employee at no additional cost to the
      Employee, and the Company will maintain such insurance at all times while this
      Agreement remains in effect.  Furthermore, the Company will maintain
      such insurance coverage with respect to occurrences arising during the term
      of
      this Agreement for at least three years following the termination or expiration
      of this Agreement or will purchase a directors’ and officers’ extended reporting
      period or “tail” policy to cover the Employee.

     

    We
      appreciate the opportunity to serve you and believe this Agreement accurately
      reflects our mutual understanding.  We would be pleased to discuss
      this Agreement with you at your convenience.  If the foregoing is in
      accordance with your understanding, please sign a copy of this Agreement and
      return it to my attention.

     

    Sincerely,

     

    Tatum,
      LLC

     

    /s/
      MARK
      C. NEILSON

     

    Mark
      C.
      Neilson

     

    Associate
      Managing Partner

     

    


     

    Accepted
      and agreed:

     

    JMAR
      Technologies, Inc.

     

    


     

    By:/s/
      C.
      NEIL BEER

     

    Name:  C.
      Neil Beer, Ph.D.

    Title:   President
      & CEO

     

    
      
        
        

      

      
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    Exhibit
      A

     

    Terms
      and Conditions

     

    1.  Relationship
      of the Parties.  The parties agree that Tatum will be serving
      the Company as an independent contractor for all purposes and not as an
      employee, agent, partner of, or joint venturer with the Company and that the
      Employee will be serving the Company as an employee of the Company for all
      purposes and not as an independent contractor.

     

    2.  Payment
      Terms.  Payments to Tatum should be made by electronic
      transfer in accordance with the instructions set forth below or such alternative
      instructions as provided by Tatum from time to time.  In lieu of
      terminating this Agreement, Tatum may suspend the provision of services
      (including the Employee’s services) if amounts owed are not paid in accordance
      with the terms of this Agreement.

     

    Bank
      Name:  Wells Fargo, N.A.

    Branch:  San
      Francisco

    Account
      Name:  Tatum, LLC

    Account
      Number:  4121546642

    Routing
      Number for ACH Payments:  121000248

    Swift
      Code:  WFBIUS6S

    Please
      reference Company name in the body of the payment.

     

    3.  Deposit.  If
      the Company breaches this Agreement or the terms of the employment arrangement
      between Employee and the Company and fails to cure such breach as provided
      for
      herein or therein, Tatum will be entitled to apply the Deposit to its or the
      Employee’s damages resulting from such breach.  In the event the
      Deposit falls below the amount required, the Company will pay Tatum an
      additional amount equal to the shortfall.  Upon the expiration or
      termination of this Agreement, Tatum will return to the Company the balance
      of
      the Deposit remaining after application of any amounts to damages as provided
      for herein, including, without limitation, unfulfilled payment obligations
      of
      the Company to Tatum or the Employee.

     

    4.  Termination.

     

    (a)  This
      Agreement will terminate immediately upon the effective date of termination
      or
      expiration of the Employee’s employment with the Company or upon the Employee
      ceasing to be a member of Tatum.

     

    (b)  Notwithstanding
      subsection (a) above, either party may terminate this Agreement at anytime
      for
      any reason upon written notice to the other party.

     

    (c)  The
      expiration or termination of this Agreement will not destroy or diminish the
      binding force and effect of any of the provisions of this Agreement that
      expressly, or by reasonable implication, come into or continue in effect on
      or
      after such expiration or termination, including, without limitation, provisions
      relating to payment of fees and expenses (including witness fees and expenses),
      hiring the Employee, governing law, arbitration, limitation of liability, and
      indemnity.

     

    5.  Hiring
      the Employee Outside of a Tatum Agreement.  The parties
      recognize and agree that Tatum is responsible for introducing the Employee
      to
      the Company. Therefore, if, at any time during the term of this Agreement or
      the
      12-month period following the termination or expiration of this Agreement,
      other
      than in connection with this Agreement or another Tatum agreement, the Company
      employs the Employee, or engages the Employee as an independent contractor,
      Tatum will be entitled to receive as a placement fee an amount equal to
      forty-five percent (45%) of the Annualized Compensation (as defined below).
       The amount will be due and payable to Tatum upon written demand to the
      Company.  “Annualized Compensation” means the equivalent of the
      Employee’s salary with the Company calculated on a full-time annual basis plus
      the maximum amount of any bonus for which the Employee was eligible with respect
      to the then-current bonus year.

     

    
      
        
        

      

      
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    6.  Warranties
      and Disclaimers.  It is understood that Tatum does not have a
      contractual obligation to the Company other than to provide the Employee to
      the
      Company and to provide the Employee access to Tatum’s intellectual capital to be
      used in connection with the Employee’s employment relationship with the
      Company.  The Company acknowledges that any information, including any
      resources delivered through Tatum’s proprietary information and technology
      system, will be provided by Tatum as a tool to be used at the discretion of
      the
      Company.  Tatum will not be responsible for any action taken by the
      Company in following or declining to follow any of Tatum’s or the Employee’s
      advice or recommendations. Tatum represents to the Company
      that Tatum has conducted its standard screening and investigation procedures
      with respect to the Employee becoming a member of Tatum, and the results of
      the
      same were satisfactory to Tatum.  Tatum disclaims all other
      warranties, whether express, implied or statutory. Without
      limiting the foregoing, Tatum makes no representation or warranty as to the
      services provided by the Employee, or the accuracy or reliability of reports,
      projections, certifications, opinions, representations, or any other information
      prepared or made by Tatum or the Employee (collectively, the “Information”) even
      if derived from Tatum’s intellectual capital, and Tatum will not be liable for
      any claims of reliance on the Information or that the Information does not
      comply with federal, state or local laws or regulations.  The services
      provided by Tatum hereunder are for the sole benefit of the Company and not
      any
      unnamed third parties.  The services will not constitute an audit,
      review, or compilation, or any other type of financial statement reporting
      or
      attestation engagement that is subject to the rules of the AICPA or other
      similar state or national professional bodies and will not result in an opinion
      or any form of assurance on internal controls.

     

    7.  Limitation
      of Liability; Indemnity.

     

    (a)  The
      liability of Tatum in any and all categories and for any and all causes arising
      out of this Agreement, whether based in contract, tort, negligence, strict
      liability or otherwise will, in the aggregate, not exceed the actual Fees paid
      by the Company to Tatum over the previous two months’ of the
      Agreement.  In no event will Tatum be liable for incidental,
      consequential, punitive, indirect or special damages, including, without
      limitation, any interruption or loss of business, profit or
      goodwill.  As a condition for recovery of any liability, the Company
      must assert any claim against Tatum within three months after discovery or
      60
      days after the termination or expiration of this Agreement, whichever is
      earlier.

     

    (b)  The
      Company agrees to indemnify Tatum and the Employee to the full extent permitted
      by law for any losses, costs, damages, and expenses (including reasonable
      attorneys’ fees), as they are incurred, in connection with any cause of action,
      suit, or other proceeding arising in connection with the Employee’s services to
      the Company.

     

    8.  Governing
      Law, Arbitration, and Witness Fees.

     

    (a)  This
      Agreement will be governed by and construed in accordance with the laws of
      the
      State of Georgia, without regard to conflicts of laws provisions.

     

    (b)  If
      the
      parties are unable to resolve any dispute arising out of or in connection with
      this Agreement, the parties agree and stipulate that any such disputes will
      be
      settled by binding arbitration in accordance with the Commercial Arbitration
      Rules of the American Arbitration Association (“AAA”).  The
      arbitration will be conducted in the Atlanta, Georgia office of the AAA by
      a
      single arbitrator selected by the parties according to the rules of the AAA,
      and
      the decision of the arbitrator will be final and binding on both
      parties.  In the event that the parties fail to agree on the selection
      of the arbitrator within 30 days after either party’s request for arbitration
      under this Section, the arbitrator will be chosen by the AAA.  The
      arbitrator may in his or her discretion order documentary discovery but will
      not
      allow depositions without a showing of compelling need.  The
      arbitrator will render his or her decision within 90 days after the call for
      arbitration.  Judgment on the award of the arbitrator may be entered
      in and enforced by any court of competent jurisdiction.  The
      arbitrator will have no authority to award damages in excess or in contravention
      of this Agreement and may not amend or disregard any provision of this
      Agreement, including this Section.  Notwithstanding the foregoing,
      either party may seek appropriate injunctive relief from any court of competent
      jurisdiction, and Tatum may pursue payment of undisputed amounts through any
      court of competent jurisdiction.

     

    (c)  In
      the
      event any member or employee of Tatum (including, without limitation, the
      Employee to the extent not otherwise entitled in his or her capacity as an
      employee of the Company) is requested or authorized by the Company or is
      required by government regulation, subpoena, or other legal process to produce
      documents or appear as witnesses in connection with any action, suit or other
      proceeding initiated by a third party against the Company or by the Company
      against a third party, the Company will, so long as Tatum is not a party to
      the
      proceeding in which the information is sought, reimburse Tatum for its member’s
      or employee’s professional time (based on customary rates) and expenses, as well
      as the fees and expenses of its counsel (including the allocable cost of
      in-house counsel), incurred in responding to such requests.

     

    
      
        
        

      

      
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    9.  Miscellaneous.

     

    (a)  This
      Agreement constitutes the entire agreement between the parties with regard
      to
      the subject matter hereof and supersede any and all agreements, whether oral
      or
      written, between the parties with respect to its subject matter.  No
      amendment or modification to this Agreement will be valid unless in writing
      and
      signed by both parties.

     

    (b)  If
      any
      portion of this Agreement is found to be invalid or unenforceable, such
      provision will be deemed severable from the remainder of this Agreement and
      will
      not cause the invalidity or unenforceability of the remainder of this Agreement,
      except to the extent that the severed provision deprives either party of a
      substantial portion of its bargain.

     

    (c)  Neither
      the Company nor Tatum will be deemed to have waived any rights or remedies
      accruing under this Agreement unless such waiver is in writing and signed by
      the
      party electing to waive the right or remedy.  The waiver by any party
      of a breach or violation of any provision of this Agreement will not operate
      or
      be construed as a waiver of any subsequent breach of such provision or any
      other
      provision of this Agreement.

     

    (d)  Neither
      party will be liable for any delay or failure to perform under this Agreement
      (other than with respect to payment obligations) to the extent such delay or
      failure is a result of an act of God, war, earthquake, civil disobedience,
      court
      order, labor dispute, or other cause beyond such party’s reasonable
      control.

     

    (e)  The
      Company may not assign its rights or obligations under this Agreement without
      the express written consent of Tatum.  Nothing in this Agreement will
      confer any rights upon any person or entity other than the parties hereto and
      their respective successors and permitted assigns and the Employee.

     

    (f)  The
      Company agrees to reimburse Tatum for all costs and expenses incurred by Tatum
      in enforcing collection of any monies due under this Agreement, including,
      without limitation, reasonable attorneys’ fees.

     

    (g)  The
      Company agrees to allow Tatum to use the Company’s logo and name on Tatum’s
      website and other marketing materials for the sole purpose of identifying the
      Company as a client of Tatum.  Tatum will not use the Company’s logo
      or name in any press release or general circulation advertisement without the
      Company’s prior written consent.

     

     

     

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