Unassociated Document



    BRENDAN
      TECHNOLOGIES, INC.

    
      	EMPLOYMENT
              AGREEMENT



    

    This Employment Agreement (the
      "Agreement") is made this day of November 1, 2004 by and between Brendan
      Technologies, Incorporated, a Michigan corporation ("Company") and John R.
      Dunn,
      II ("Employee").

    W
      I T N E S S E
      T H:

     

    WHEREAS,
      the
      Company agrees to employ the Employee as its Chairman and Chief Executive
      Officer; and WHEREAS,
      the
      Employee desires to be continuously employed by the Company; and 

     

    WHEREAS,
      the
      parties hereto are desirous of entering into a formal agreement of
      employment.

     

    NOW,
      THEREFORE, in
      consideration of the premises and covenants herein contained, the parties
      covenant and agree as follows:

     

    
      	1. 
 
 
	EMPLOYMENT.
              The Company agrees to employ the Employee and the Employee agrees to
              be
              employed in the capacity of Chairman and Chief Executive Officer of
              the
              Company.
	 
	2. 
 
 
	DUTIES.
              The
              Employee shall diligently and conscientiously devote, on a full-time
              basis, his best efforts to the discharge of his duties as established
              from
              time to time by the Bylaws of the Company, the Board of Directors of
              the
              Company ("Board") and/or otherwise, and shall be under the supervision
              of
              the Board of Directors.
	 
	3. 
 
 
	COMPENSATION.
	 
	 	a. 
 
 
	Salary.
              The
              Company shall pay the Employee a salary at a rate of nine thousand
              ($9,000) Dollars per month ($108,000 annually), subject to all applicable
              withholdings, for services rendered as the Company's Chairman and Chief
              Executive Officer. The Employee and the Company recognize that this
              salary
              is below the market average for this position and industry but is
              necessary to allow the Company to achieve a secure financial position.
              The
              Employee's base salary shall be reviewed in six months from the Agreement
              date, and may be adjusted based on performance and other relevant factors
              deemed reasonable by the Company. Thereafter, the Employee’s base salary
              shall be reviewed annually.
	 
	 	b. 
 
 
	Other
              Benefits. The
              Employee shall be entitled to participate in any plan or program of
              employee benefits maintained by the Company as of the date hereof,
              and
              which may be hereafter adopted or modified by the Company, which is
              or
              shall be available to the Employee as a result of his employment by
              the
              Company pursuant to this Agreement, subject to the requirements of
              such
              plans or programs. A list of specific benefits to which the Employee
              shall
              be entitled is set forth in Exhibit A, a copy of which is attached
              hereto
              and is herein incorporated by reference.
	 


    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     


    
      	Employment
              Agreement:
              John R. Dunn II



    

    
      	Page
              2



    

    
      	
              c. 
 
 


            	
              Vacations.
                The Employee shall be entitled to
                thirty (30) days paid vacation each year.

            
	 
	
              d. 


            	Confidentiality.
              Employee agrees to keep all information concerning salary, stock,
              and other compensation confidential. Failure to do so may be grounds
              for
              dismissal.
	 


    

    
      	4. 
 
 
	TERM.
              Unless terminated earlier in accordance with Section 6 hereof, or renewed
              pursuant to Section 5 hereof, the term of this Agreement shall commence
              on
              the date hereof and shall continue for a period of seven (7) years
              thereafter.
	 
	5. 
 
 
	RENEWAL.
              This Agreement shall automatically renew for successive one-year periods
              at the end of the seven (7) year term, subject, however, to sixty (60)
              days written notice of termination by either party hereto prior to
              the
              commencement of any such renewal period. The terms and conditions of
              this
              Agreement shall apply during any such renewal period.
	 
	6. 
 
 
	TERMINATION.
              Notwithstanding any provision herein to the contrary, during the
              term of this Agreement, or during any period following an automatic
              renewal under Section 5 hereof, the Company's employment of the Employee
              under this Agreement shall be terminated:
	 
	 	a. 
 
 
	Upon the Employee's
              death.
	 
	 	b. 
 
 
	Upon the Disability (as
              that
              term is defined herein) of the Employee. For purposes of this Agreement
              the Disability of an Employee shall mean an illness, injury, or physical
              or mental condition of the Employee occurring for a period of six
              consecutive months from the commencement of such illness, injury or
              condition which results in the Employee's inability during such period
              to
              perform substantially all of his regular duties to the Company. In
              the
              event the Company and the Employee do not agree on whether the Employee
              suffered a Disability within the meaning of this Section 6, then the
              issue
              shall be settled by binding arbitration under the rules and regulations
              of
              the American Arbitration Association, and the decision or award of
              the
              arbitrator or arbitrators in such arbitration shall be final, conclusive
              and binding upon the parties thereto and judgment may be entered thereon
              in any court of competent jurisdiction.
	 
	 	c. 
 
 
	By the Company for "just
              cause" (as that term is defined herein). For purposes of this Agreement,
              "just cause" shall mean dishonesty, nonfeasance, misfeasance or
              malfeasance in the performance of the Employee's duties contemplated
              by
              this Agreement, including but not limited to the failure by the Employee
              to adhere to the policies of the Board.
	 
	 	d. 
 
 
	In the event of the
              termination of this Agreement for any of the reasons set forth above
              in
              subparagraphs 6(a), 6(b), or 6(c), the Employee shall be entitled to
              the
              base salary earned by him prior to the date of termination, but shall
              not
              be entitled to any bonus which might otherwise be payable to the
              Employee.
	 
	 	e. 
 
 
	By the Employee at any
              time
              for "good reason", upon not less than thirty (30) days prior written
              notice to the Company specifying in reasonable detail the reason therefor,
              provided that the Company shall be entitled, by providing written notice
              of the Employee within fourteen (14) days after receipt of the foregoing
              notice, to require that the proposed
	 


    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    


    
      	Employment
              Agreement:
              John R. Dunn II



    

    
      	Page
              3



    

    resignation for "good reason"
      first
      be submitted to arbitration in accordance with Section 8 hereof, by which
      arbitration shall determine whether "good reason" actually exists. For purposes
      of this Section, "good reason" means any of the following:

    
      	
              i. 
 
 


            	The failure of the Company,
              within thirty (30) business days after the Employee has provided written
              notice to the Board of Directors of the Company (with a copy to the
              Chairman of the Company's Compensation Committee, if any), requesting
              any
              payment of Base Salary, material reimbursable expenses or incentive
              bonus
              due and owing to the Employee hereunder, to make said payment to the
              Employee;
	 
	
              ii. 
 
 


            	The Company requires
              the
              Employee to be based at any office or location more than 100 miles
              from
              the office at which the Employee is based on the Effective Date, except
              for travel reasonably required in the performance and discharge of
              the
              Employee's tasks and duties hereunder, and unless the Company and the
              Employee agree that such requirement shall not constitute "good
              reason";
	 
	
              iii. 
 
 
                

            	Any failure by the Company
              to
              obtain the assumption of this Agreement by any successor of the
              Company;
	 
	
              iv. 
 
 


            	The Company merges into
              or
              consolidates with another entity, or is subject in any way to a transfer
              of a substantial amount of its assets, resulting in the assets, business
              or operations of the Company being controlled by an entity or individual
              other than the Company (a "Change of Ownership"), or there occurs any
              "Change in Control" (as defined below) of the Company or there is a
              significant change in the nature and scope of the duties and powers
              of the
              Employee, as outlined in paragraph 2, or the Employee reasonably
              determines that, as a result of the occurrence of one or more of the
              events described in subparagraph 6(e), he is unable to exercise or
              perform
              the powers, functions or duties as set forth in this Agreement, then
              the
              Employee shall be entitled, upon giving thirty (30) days advance written
              notice to the Company, to terminate this Agreement and shall within
              90
              days after the effective date of such termination, receive a lump sum
              amount equal to his base salary for twenty-four (24) months at the
              rate in
              effect on the date such notice is given to the Company. In addition,
              the
              Employee shall fully vest in all outstanding options as of the date
              of
              such written notice, and shall have the right to exercise such options
              within 90 days after the effective date of termination, in accordance
              with
              the terms and provisions of the Plan.
	 
	
              v. 
 
 


            	Any material change by
              the
              Company in the Employee's function, duties, or responsibilities from
              those
              contemplated herein, without the prior written consent of the Employee,
              which consent shall not be unreasonably withheld; or
	 
	
              vi. 
 
 


            	Any pattern or practice
              of
              harassment or other malicious conduct by the Board of Directors of
              the
              Company or the Company's senior management intended to provoke the
              Employee's resignation.
	 


    

    Upon such termination, the Company
      shall pay to the Employee the amounts as set forth in Section 6(f)
      hereof.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    


    
      	Employment
              Agreement:
              John R. Dunn II



    

    
      	Page
              4



    

    "Change in Control" shall, for
      purposes of this Agreement, be deemed to have taken place if (i) a third person,
      including a group of individuals or entities, becomes the beneficial owner
      of
      shares of the Company having fifty (50%) percent or more of the total number
      of
      votes that may be cast for the election of Directors of the Company, or (ii)
      as
      a result of, or in connection with any cash tender or exchange offer, merger,
      consolidation or other business combination, or sale of assets, or any
      combination of the foregoing events, the persons who are directors of the
      Company before the occurrence of such event or events cease to constitute
      twenty-five (25%) percent of the Board of Directors of the Company.

     

    
      	f. 
 
 
	Notwithstanding
              any
              other provision in this Agreement to the contrary, the Company may
              terminate this Agreement upon giving to the Employee ninety (90) days
              advance written notice of such termination. In the event the Company
              terminates this Agreement pursuant to this paragraph 6(f), the Company
              shall pay to the Employee or, in the event of the Employee's death
              subsequent to termination of this Agreement, to the Employee's estate
              a
              monthly sum equal to the highest monthly rate of base salary paid to
              the
              Employee during the Contract Term pursuant to paragraph 4 of this
              Agreement. Such payments shall commence on the last day of the month
              next
              following the termination of employment of the Employee and shall continue
              as follows:
	 
	 	i. 
 
 
	If the Employee shall
              have
              been willing to continue in the employ of the Company, and shall have
              been
              in the continuous employ of the Company since the effective date of
              this
              Agreement, and if such termination shall occur prior to the Employee's
              normal retirement date, such payment shall continue, except as otherwise
              provided in subparagraph 6(f)(ii) below, until the last day of the
              twenty-fourth (24th) full calendar month following the termination
              of
              employment of the Employee.
	 
	 	ii. 
 
 
	Regardless of whether
              the
              provisions of subparagraph 6(f)(i) are otherwise applicable, such payments
              shall not continue beyond the earliest of (i) the last day of the month
              preceding the Employee's normal retirement date and (ii) the last day
              of
              the month next preceding the month in which the Employee shall, with
              his
              written consent, commence receiving his retirement allowance under
              any
              pension plan of the Company. For purposes of this Agreement, the term
              "retirement" or "normal retirement date" shall mean the last day of
              the
              month during which the Employee attains the age of 65. In the event
              this
              Agreement is terminated pursuant to this subparagraph 6(f), the Employee
              shall be entitled to any bonus which might otherwise be payable to
              the
              Employee for any bonus period in which this Agreement is
              terminated.
	 
	 	iii. 
 
 
	In addition to the foregoing,
              the Employee shall immediately vest in any options to purchase the
              Company’s stock which have been issued to him, and he shall have 90 days
              from the date of termination in which to exercise such
              options.
	 
	
              7. NONDISCLOSURE OF CONFIDENTIAL
                INFORMATION. The Employee
                agrees that during the Contract Term, and
                at all times thereafter, any data, figures, projections, estimates,
                customer lists, tax records, personnel histories and records, information
                regarding sales, information regarding 
                properties and any other information regarding
                the
                business, operations, properties or personnel of    

            


    

     


    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      	Employment
              Agreement:
              John R. Dunn II



    

    
      	Page
              5



    

    the Company (collectively referred
      to herein as the "Confidential Information") disclosed to or acquired by the
      Employee shall be held in confidence and treated as proprietary to the Company,
      and the Employee agrees not to use or disclose any Confidential Information
      without the prior written consent of the Company; provided, however, that no
      such prior written consent shall be required for the disclosure and use by
      the
      Employee of Confidential Information to promote and advance the business
      interests of the Company (including disclosure of information reasonably
      requested by underwriters) or in response to any lawful process of a court
      or
      government agency, whether state, federal or local, such as a subpoena, summons,
      discovery request in the course of a court or administrative proceeding, which
      requires the Employee's response, whether sworn or unsworn, or when a response
      is otherwise required by applicable law.

     

    
      	8. 
 
 
	SETTLEMENT
              OF CONTROVERSY AND EXPENSES.
	 
	 	a. 
 
 
	Any dispute or controversy
              arising under or in connection with this Agreement shall be settled
              exclusively by arbitration in Wayne County, Michigan in accordance
              with
              the Voluntary Labor Arbitration Rules of the American Arbitration
              Association then in effect.
	 
	 	 	The arbitrator shall
              be chosen
              mutually by the parties and shall not have jurisdiction or authority
              to
              change, add to or subtract from any of the provisions of this Agreement.
              The arbitration decision shall be final and binding and judgment may
              be
              entered on the arbitrator's award in any court having
              jurisdiction.
	 
	 	b. 
 
 
	In the event proceedings
              are
              brought to enforce any provision in this Agreement and the Employee
              prevails, then he shall be entitled to recover from the Company his
              reasonable costs and expenses of the proceeding, including reasonable
              fees
              and disbursements of counsel and what would otherwise be the Employee's
              portion of the costs of arbitration. If the Company prevails, then
              each
              party shall be responsible for his/its respective costs, expenses and
              attorneys fees and the costs of arbitration shall be equally divided.
              In
              the event it is determined that the Employee is entitled to compensation,
              legal fees and expenses hereunder, he also shall be entitled to interest
              thereon, payable to him at the prime rate of interest of Manufacturers
              National Bank of Detroit, as in effect from time to time during the
              period
              from the date such amounts should have been paid to the date of actual
              payment. For purposes of determining the date when legal fees and expenses
              are payable, such amounts are not due until 30 days after notification
              to
              the Company of such amounts.
	 
	9. 
 
 
	TERMINATION
              PAYMENT MAXIMUM.
              If any payments under this Agreement, when aggregated with any other
              payments by the Company to the Employee from other policies, plans
              and
              agreements of the Company that are deemed to constitute "golden parachute"
              payments (as defined in §280G of the Internal Revenue Code of 1986, as
              amended) ("Code"), exceed the maximum amount of golden parachute
              compensation under §§280G and 4999 of the Code that may be paid without
              tax penalties to the Employee and the loss or partial loss of the
              compensation tax deduction to the Company, then the Employee shall
              specify
              which of his payments from the Company shall be reduced until his
              aggregate golden parachute compensation reaches the highest amount
              permissible without triggering tax penalties to the Employee and the
              loss
              or partial loss of the compensation tax deduction to the Company under
              Code §§280G and 4999. Provided, however, that when the Employee designates
              which of his golden parachute payments from the Company shall be reduced
              to meet the limitations under Code §§ 280G and 4999, no change in the
              timing of the payments shall be made without the consent of the
              Company.
	 


    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    


    
      	Employment
              Agreement:
              John R. Dunn II



    

    
      	Page
              6



    

    
      	10. 
 
 
	WAIVER.
              Failure by either party to insist upon strict compliance with any of
              the
              terms, covenants, or conditions hereof shall not be deemed a waiver
              by
              that party of any such term, covenant or condition, nor shall any waiver
              or relinquishment of any right or power hereunder at any one or more
              times
              be deemed a waiver or relinquishment of any such right or power at
              any
              other time or times.
	 
	11. 
 
 
	SEVERABILITY.
              The invalidity or unenforceability of any provision hereof shall
              in no way affect the validity or enforceability of any other
              provision.
	 
	12. 
 
 
	NONTRANSFERABILITY.
              Neither the Employee, nor his heirs, assigns or estate shall have
              the right to assign, encumber or dispose of any payment or right
              hereunder, which payment and right is expressly declared nonassignable
              and
              nontransferable, except as otherwise specifically provided
              herein.
	 
	13. 
 
 
	SUCCESSORS
              AND ASSIGNS. The
              Company and the Employee bind themselves, and their respective partners,
              successors, assigns, heirs and legal representatives to all of the
              terms
              and conditions of this Agreement.
	 
	14. 
 
 
	ASSIGNMENT.
              This Agreement, and any or all rights hereunder, may not be assigned,
              in
              whole or in part, by the Employee. The Company may assign this Agreement,
              in whole or in part, and any or all of its rights hereunder.
	 
	15. 
 
 
	NOTICES.
	 
	 	a. 
 
 
	Every notice of other
              communication required or permitted to be given under this Agreement
              ("Notice") shall be in writing and shall be given by registered or
              certified mail, postage prepaid, return receipt requested, or by
              delivering such Notice personally or causing such Notice to be delivered
              by reputable air courier or otherwise. All such Notices shall be mailed
              or
              delivered to the Parties at the following addresses:
	 


    

    
      	If to
              the
              Company:



    

    
      	Brendan
              Technologies,
              Inc.
2236 Rutherford
              Road, Suite 107
Carlsbad, CA
              92008
Attn: Dr. John
              R. Dunn II, Chairman and
              CTO



    

    
      	If to
              the
              Employee:



    

    
      	John
              R. Dunn,
              II
2236 Rutherford
              Road,
              Suite 107
Carlsbad, CA
              92008



    

    or such other addresses as the
      parties may from time to time designate by written notice. Delivery under this
      Paragraph 16, when by mail, shall be effective as of the date upon which the
      return receipt is accepted or

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    


    
      	Employment
              Agreement:
              John R. Dunn II



    

    
      	Page
              7



    

    refused. A Notice personally
      delivered under this Section 15 shall be effective upon such delivery or, if
      delivery is refused, upon such refusal.

     

    
      	16. 
 
 
	ENTIRE
              AGREEMENT. The
              foregoing provisions contain the entire agreement of the parties hereto,
              and no modification hereof shall be binding upon the parties unless
              the
              same is in writing and signed by the respective parties
              hereto.
	 
	17. 
 
 
	APPLICABLE
              LAW. This
              Agreement shall be governed by, and construed in accordance with, the
              laws
              of the State of Michigan.
	 
	18. 
 
 
	COUNTERPARTS.
              This Agreement may be executed in any number of counterparts,
              each of which when so executed and delivered shall be an original,
              but
              such counterparts together shall constitute one instrument.
	 


    

    In
      Witness the parties,
      intending to be legally bound, set their hands and seals this  ____________
      day of  ___________________________,
      200__.

     

    BRENDAN TECHNOLOGIES,
      INC.                         EMPLOYEE

    By:
      ___________________________________                
By:
      _______________________________________

    Title:
      __________________________________

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    


    Employment
      Agreement: John R.
      Dunn II 

    Page
      8

     

    EXHIBIT
      A

     

    EMPLOYEE
      PLANS
      AND PROGRAMS

     

    
      	1. 
 
 
	HEALTH AND LIFE
              INSURANCE
	 
	 	Health insurance with
              family
              coverage consistent with the health insurance provided other executives
              of
              the Company.