Employment Agreement by and between the registrant and Michael Hollowich



 EXHIBIT 10.6 
  
 EMPLOYMENT AGREEMENT 
  

This Employment Agreement (“Agreement”) is entered into as of this 19th day of February, 2001 by and between
Cogent Systems, Inc. a California corporation (“Company”) and Mr. Michael Hollowich (“Employee”). 
  
 RECITALS 
  
 WHEREAS, the parties are entering into this Agreement for the purpose of setting forth the terms of employment by Company of Employee; and

  
 WHEREAS, Company and Employee believe it is in their
mutual best interests to enter into an employment arrangement pursuant to the terms hereinafter set forth. 
  
 NOW, THEREFORE, the parties hereto hereby agree as follows: 
  
 1. ENGAGEMENT. Company hereby engages Employee to render services as Vice President of System
Integration pursuant to the terms and conditions hereof, and Employee hereby accepts such engagement. 
  
 2. NATURE OF SERVICES. Employee shall perform management duties as business development requires.
In addition, Employee shall also render all services as may be reasonably required by Company. Except for business trips in the ordinary course of business, Employee shall be employed in the Los Angeles area and may not be transferred outside of
such area without Employee’s consent. Employee accepts this employment and agrees to render his services in a competent and diligent manner subject to the direction of Company’s officers and management. 
  
 3. SCOPE OF SERVICES. Employee
shall devote such time, attention and energy to the business of Company as is necessary for the conduct and furtherance of Company’s business. During the term of this Agreement, Employee may engage in other outside investments and activities
(“Outside Activities”); provided, however, that (i) Employee’s involvement in such Outside Activities shall not in any way materially interfere with his obligations hereunder and (ii) such Outside Activities shall not involve any
competition with the business of the Company. Any compensation payable to Employee by virtue of the performance of an Outside Activity shall belong to him, and Company shall not be entitled to or have any claim or right to such compensation.

  

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 4. TERM. The term of this Agreement (“Term”) shall commence on the date
hereof and shall thereafter be terminable at will by either Company or Employee. 
  
 5. COMPENSATION. 
  
 (a) Fixed Salary. As compensation for the services rendered by Employee pursuant hereto, and upon condition that Employee is substantially performing all of the services required hereunder and that Employee is
not in material default, Company will pay or will cause to be paid to Employee, a fixed base annual salary (“Base Salary”) of One Hundred and Fifty Thousand Dollars ($150,000.00), subject to normal periodic review for
such increases as the Board of Directors of the Company shall determine taking into account Employee’s contribution to the business of the Company, the Company’s development and such other factors as the Board of Directors shall deem
appropriate. Employee’s Base Salary shall be payable no less frequently than monthly, subject to all applicable laws and requirements respecting withholding of federal, state, and/or local taxes. 
  
 Cogent Systems Inc. will grant Forty Thousand shares of Cogent’s Stock
Option dated on the first day of Mr. Hollowich’s employment. All benefits and regulations are subject to the 2000 Stock Option Plan. 
  
 (b) Employee Benefits. 
  
 i) Company shall reimburse Employee for all ordinary and necessary business, entertainment and other expenses reasonably incurred by
Employee in the performance of Employee’s duties and obligations under this Agreement, including reimbursement for all out-of-pocket expenses reasonably incurred by Employee on behalf of Company. Company agrees to repay or reimburse Employee
for such business expenses upon itemized statements of such business expenses on Company’s regular form used for such purposes. 
  
 ii) Annual Vacations. Employee shall be entitled to take Two (2) weeks vacation with pay during each
calendar year during the Term hereof, prorated for any partial calendar years during the Term hereof. To the extent Employee does not use the full vacation period during any calendar year during the Term hereof, the unused balance shall accrue and
be carried over into subsequent years, provided that the maximum annual paid vacation to which Employee shall be entitled under any such circumstances shall be Four (4) weeks. 
  
 iii) Life Insurance, Health and Dental Insurance and
Other Employee Benefits. During the Term of this Agreement, Company Employee shall be entitled to participate in any pension, profit sharing, life insurance, medical and hospitalization insurance, disability coverage or other retirement or
employee benefits that the Company has adopted or may adopt in the future for the benefit of its employees. 
  

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 6. REPRESENTATIONS OF COMPANY AND EMPLOYEE. Company and Employee each represent and
warrant to the other that it or he, as applicable, has all right, power, authority and capacity, and is free, to enter into this Agreement; that by doing so it or he, as applicable, will not violate or interfere with the rights of any other person
or entity; and that it or he is not subject to any contract, understanding or obligation which will or might prevent, interfere with or impair the performance of this Agreement by it or him. Each party will indemnify and hold the other party
harmless with respect to any losses, liabilities, demands, claims, fees expenses, damages and costs (including attorneys fees and court costs) resulting from or arising out of any claim or action based upon its or his entering into this Agreement.

  
 7. CONFIDENTIAL INFORMATION; NONCOMPETITION

  
 (a) Confidential Information. The
Company has and will develop, compile and own or otherwise obtain rights in and to certain proprietary techniques and confidential information which have great value in its business (said techniques and information are referred to in this Agreement
collectively as Confidential Information). Confidential Information includes not only information disclosed by the Company to Employee in the course of employment, but also information developed or learned by Employee during the course of his
employment with the Company, such as Innovations (as defined in Paragraph 8(a) below). Confidential Information includes all information that has or could have commercial value or other utility in the business in which the Company is engaged or
contemplates engaging. Confidential Information also includes all information of which the unauthorized disclosure could be detrimental to the interests of the Company, whether or not such information is specifically identified as Confidential
Information by the Company. By example and without limitation, Confidential Information includes any and all information concerning techniques, processes, formulas, trade secrets, innovations, inventions, discoveries, improvements, research or
development and test results, specifications, data, know-how, formats, marketing plans, business plans, strategies, forecasts, unpublished financial information, budgets, projections, and customer and supplier identities, characteristics and
Agreements. 
  
 (b) Protection of Confidential
Information. Employee agrees that at all times during and after the Term of his employment under this Agreement, he will hold in trust, keep confidential and not disclose to any third party or make any use of the Confidential Information of the
Company except for the benefit of the Company and in the course of his employment with the Company. Employee acknowledges that he is aware that the unauthorized disclosure of Confidential Information of the Company may be highly prejudicial to its
interests. 
  
 (c) Non-competition During
Employment. Subject to Paragraph 3 above, Employee agrees that he will not, during the Term of his employment with the Company: (i) engage in any employment or activity other than for the Company in any business in which the Company is engaged
or contemplates engaging; (ii) become financially interested in or associated with, directly or indirectly, any other person or entity engaged in any business in which the Company is engaged or contemplates engaging; provided that Employee may
invest in the capital stock or other securities of any corporation whose stock or other securities are publicly owned or 

  

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are regularly traded on any securities exchange or in the over-the-counter market, so long as Employee’s ownership of such securities does not exceed 5%
of the issued and outstanding securities of such entity; or (iii) induce any other employee of or consultant to the Company to engage in any such employment or activity. 
  
 (d) Delivery of Data and Documents and other Obligations on Termination of Employment. In the
event of termination (voluntary or otherwise) of Employee’s employment with the Company, Employee agrees that he will protect the value of the Confidential Information and Innovations of the Company and will prevent the misappropriation or
disclosure thereof. Employee will not disclose or use for his benefit (or the benefit of any third party) or to the detriment of the Company any Confidential Information or Innovation. Employee further agrees that for a period of one year
immediately following termination (voluntary or otherwise) of Employee’s employment with the Company, Employee shall not interfere with the business of the Company by inducing an employee to leave the Company’s employ or by inducing a
consultant to sever the consultant’s relationship with the Company. In the event of termination of Employee’s employment with the Company for any reason, Employee shall promptly deliver to the Company all documents and data pertaining to
his employment and the Confidential Information and Innovations of the Company whether prepared by Employee or otherwise coming into his possession or control. 
  

8. ASSIGNMENT OF EMPLOYEE INVENTIONS. 
  
 (a) Disclosure. Employee will promptly disclose in writing to the Company all discoveries, developments, designs, ideas,
innovations, improvements, inventions, formulas, processes, techniques, know-how, and data (whether or not patentable or registerable under copyright or similar statutes) made, conceived, reduced to practice, or learned by Employee (either alone or
jointly with others) during the Term of his employment, that are related to or useful in the business of the Company, or which result from tasks assigned to Employee by the Company, or from the use of premises owned, leased, or otherwise acquired by
the Company (all of the foregoing being referred to in this Agreement as Innovations). 
  
 (b) Assignment of Innovations. Employee acknowledges and agrees that all Innovations belong to and shall be the sole property of
the Company and shall be Innovations of the Company subject to the provisions of this Agreement. Employee hereby assigns to the Company all right, title and interest Employee may have or may acquire in and to all Innovations. Employee agrees to sign
and deliver to the Company (either during or subsequent to his or her employment) such other documents as the Company considers desirable to evidence (i) the assignment of all rights of Employee, if any, in any Innovations to the Company and/or (ii)
the Company’s ownership of such innovations. Any provision in this Agreement requiring Employee to assign rights to an Innovation does not apply to any invention that qualifies under California Labor Section 2870, which Section is reproduced in
Paragraph 8(d) below. 
  
 (c) Power of
Attorney. In the event the Company is unable to secure Employee’s signature on any document necessary to apply for, prosecute, obtain, or enforce any 

  

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patent, copyright, or other right or protection relating to any Innovation, whether due to mental or physical incapacity or any other cause. Employee hereby
irrevocably designates and appoints the Company and each of its duly authorized office and agents as his agent and attorney-in-fact, to act for and in his behalf and stead to execute and file any such document and to do all other lawfully permitted
acts to further the prosecution, issuance, and enforcement of patents, copyrights, or other right or protections with the same force and effect as if executed and delivered by the Employee. 
  
 (d) Labor Code Provisions. In accordance with
California labor Code Section 2872, Employee is hereby notified that this Agreement does not require Employee to assign to the Company any invention for which no equipment, supplies, facility, or trade secret information of the Company was used and
which was developed entirely on Employee’s own time, and which does not relate to the business of the Company or to the Company’s actual or demonstrably anticipated research or development, or which does not result from any work performed
by Employee for the Company. California Labor Code Section 2870 provides as follows: 
  
 “Any provision in an employment Agreement which provides that an employee shall assign or offer to assign any of his or her rights in
an invention to his or her employer shall not apply to an invention for which no equipment, supplies, facility, or trade secret information of the employer was used and which was developed entirely on the employee’s own time, and (a) which does
not relate (1) to the business of the employer or (2) to the employer’s actual or demonstrably anticipated research or development, or (b) which does not result from any work performed by the employee for the employer. Any provision which
purports to apply to such an invention is to that extent against the public policy of this state and is to that extent void and unenforceable.” 
  
 9. CERTAIN RIGHTS OF COMPANY. 
  
 (a) Announcement. Company and Employee together shall make all public announcements of the terms, provisions, or execution of this
Agreement. 
  
 (b) Use of Name, Likeness, and
Biography. Company shall have the right (but not the obligation) to use, publish and broadcast, and to authorize others to do so, the name, approved likeness and approved biographical material of Employee to advertise, publicize and promote the
business of Company, but not for the purposes of direct endorsement without Employee’s consent. An “approved likeness” and “approved biographical material” shall be, respectively, any photograph or other depiction of
Employee, or any biographical information or life story concerning the professional career of Employee, which has been submitted to and approved by Employee prior to its first use, publication or broadcast. 
  
 10. TERMINATION. This Agreement is terminable at will by either
Company or Employee with or without cause. 
  

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 11. GENERAL. 
  
 (a) Assignment; Successors; Affiliates. Company may assign this Agreement (or the interest of Company
herein) to any entity which is a party to a merger, reorganization, or consolidation with Company or to an entity or entities acquiring substantially all of the assets of Company or of any division with respect to which Employee is providing
services (providing any such assignee assume Company’s obligations under the Agreement). 
  
 Upon such assignment, acquisition, merger, consolidation, or reorganization, the term “Company” as used herein shall be deemed to refer to such assignee or such successor entity. Employee shall not have the
right to assign Employee’s interest in this Agreement nor shall Employee (or Employee’s spouse, heirs, beneficiaries, administrators or executors) have the right to pledge, hypothecate or otherwise encumber Employee’s right to receive
compensation hereunder without the consent of Company. Notwithstanding the foregoing, nothing herein shall prohibit Employee from assigning Employee’s rights and interest hereunder to a loanout corporation contracted by Employee; provided
Company’s rights are not thereby affected. 
  
 (b) Headings. The subject headings of the paragraphs and subparagraphs of this Agreement are included for purposes of convenience only, and shall not affect the construction or interpretation of any of its provisions. 
  
 (c) Severability. If a court finds any provision of
this Agreement invalid or unenforceable as applied to any circumstance, the remainder of this Agreement and the application of such provision to other persons or circumstances shall be interpreted so as best to effect the intent of the parties
hereto. The parties further agree to replace any such void or unenforceable provision of this Agreement with a valid and enforceable provision which will achieve, to the extent possible, the economic, business, and other purposes of the void or
unenforceable provision, 
  
 (d) Entire
Agreement. The parties hereto agree that this Agreement supersedes all existing Agreements between Company and Employee, whether oral, expressed or implied, and contains the entire understanding and Agreement between the parties. This Agreement
shall not be amended, modified, or supplemented in any respect except by a subsequent written Agreement entered into by both parties hereto. 
  
 (e) Choice of Law. This Agreement and the performance hereunder shall be construed in accordance with and under and pursuant to the
internal substantive laws of the State of California applicable to Agreements fully executed and performed entirely in such state. 
  

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 (f) Notices. All communications and notices hereunder shall be in writing and
shall be deemed to have been duly given and delivered personally if sent by United States registered or certified mail, postage prepaid: 
  

			
	If to Company:	  	 Cogent Systems, Inc.
 209 Fair Oaks Ave.
 So. Pasadena, CA 91030
 Attention: Mr. Archie Yew

		
	If to Employee:	  	 Mr. Mike E. Hollowich
 3516 Elm Ave.
 Manhattan Beach, CA 90266


  
 or to such other
addresses as may designated in writing by other of the parties. 
  
 (g) No Joint Venture. Nothing herein contained shall constitute a partnership between or joint venture by the parties hereto or appoint any party the agent of any other party. No party shall hold itself out
contrary to the terms of this paragraph and, except as otherwise specifically provided herein, no party shall become liable for the representation, act or omission of any other party. This Agreement is not for the benefit of any third party who is
not referred to herein and shall not be deemed to give any right or remedy to any such third party. 
  
 (h) Contractual Nomenclature. All references herein to “Dollars” or “$” shall mean Dollars of the United States
of America, its legal tender for all debts public and private. Wherever used herein and to the extent appropriate, the masculine, feminine or neuter gender shall include the other two genders, the singular shall include the plural, and the plural
shall include the singular. 
  
 (i) Injunctive
Relief. Because Employee’s breach of the provisions of Paragraphs 7 and 8 of this Agreement may cause the Company irreparable harm for which money is inadequate compensation. Employee agrees that the Company will be entitled to injunctive
relief to enforce those provisions of this Agreement, in addition to damages and other available remedies. 
  
 IN WITNESS WHEREOF, Company and Employee have executed this Agreement as of the date first written above. 
  

									
	COGENT SYSTEMS, INC.	 	 	 	EMPLOYEE
					
	 By
	 	 /s/ Illegible
	 	 	 	 Legal Name
	 	 Michael Hollowich

	 	 	
	 	 	 	 	 	 
	 Title
	 	 Manager
	 	 	 	 Signature
	 	 /s/ Michael Hollowich

	 	 	 	 	 	 	 	 	

	 Date
	 	 2/25/2001
	 	 	 	 Date
	 	 Feb. 20, 2001


  

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