Document:

EXHIBIT 10.14

 

Change of Control Agreement

 

	
  Dated

  	
   

  	
  April 5, 2004

  

 

 

(1)  LEICA GEOSYSTEMS A.G.

 

- and -

 

(2)  NOVATEL INC.

 

- and -

 

(3)  CMC ELECTRONICS INC.

 

- and -

 

(4)  ONCAP L.P.

 

 

CHANGE OF CONTROL
AGREEMENT

 

 

CONTENTS

 

	
  Clause

  	
   

  	
  Subject
  Matter

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  1.

  	
   

  	
  Definitions and Interpretation

  	
   

  
	
  2.

  	
   

  	
  Change of Control of NovAtel

  	
   

  
	
  3.

  	
   

  	
  Offer Right

  	
   

  
	
  4.

  	
   

  	
  Term and Termination

  	
   

  
	
  5.

  	
   

  	
  Representations and Warranties

  	
   

  
	
  6.

  	
   

  	
  Limitation of Liability

  	
   

  
	
  7.

  	
   

  	
  Confidentiality

  	
   

  
	
  8.

  	
   

  	
  Notices

  	
   

  
	
  9.

  	
   

  	
  Assignment

  	
   

  
	
  10.

  	
   

  	
  Entire Agreement

  	
   

  
	
  11.

  	
   

  	
  General

  	
   

  
	
  12.

  	
   

  	
  Several Liability

  	
   

  
	
  13.

  	
   

  	
  Dispute Resolution, Governing Law and Venue

  	
   

  

 

	
  Schedules

  	
   

  
	
   

  	
   

  
	
  Schedule 1

  	
   

  	
  List of Leica Competitors

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Schedule 1A

  	
   

  	
  List of NovAtel Competitors

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Schedule 2

  	
   

  	
  Arbitration Procedures

  	
   

  

 

 

CHANGE OF CONTROL AGREEMENT

 

	
  DATE:

  	
   

  	
  April 5, 2004

  

 

PARTIES:

 

(1)           LEICA GEOSYSTEMS A.G., a company registered in Switzerland under number
CH-320.3.000.401-5 whose Leica Geosystems registered office is at Heinrich Wild
Strasse, CH-9435 Heerbrugg (“Leica Geosystems”)

 

(2)           NOVATEL INC., a company registered in Canada under number 076226-1 whose registered office is at 1120-68th Avenue N.E., Calgary,
Alberta, Canada (“NovAtel”)

 

(3)           CMC ELECTRONICS INC., a company registered in Canada under number 388613-1 whose
registered office is at 600 Dr. Frederik Philips Blvd., Saint-Laurent, Quebec,
Canada (“CMC”)

 

(4)           ONCAP L.P., a limited partnership established in the Province of Ontario whose
registered office is at 161 Bay Street, 48th Floor, P.O. Box 220, Toronto,
Ontario, Canada (“Oncap”)

 

RECITALS:

 

WHEREAS,
the parties hereto have entered into
that certain Strategic Co-Operation Agreement (as defined below) to establish a
long-term strategic co-operative relationship that provides Leica Geosystems
with access to GNSS Products (as defined below) on commercially reasonable
terms, including as to availability, performance, quality and price.

 

WHEREAS,
the parties wish to provide for
certain rights in the event of a Change of Control of NovAtel (as defined
below), a Change of Control of CMC (as defined below) and/or the proposed sale
by CMC of some or all of its shares in NovAtel.

 

IT IS AGREED as
follows:

 

1.             Definitions and
Interpretation

 

1.1           In
this Agreement, the following words and phrases shall have the following
meanings.

 

“Affiliate”
means, with respect to a specified Person, another Person that, directly or
indirectly, controls or is controlled by or is under common control with the
Person specified and, for the purpose of this Agreement, “control” shall mean
the possession, directly or indirectly, of (i) 50% or more of the issued and
outstanding voting securities of a Person, or (ii) the power otherwise to elect
a majority of the directors of a Person; provided, however,

 

1

 

(i) for
purposes of determining whether a holding body corporate of a named Leica
Competitor listed on Schedule 1 is a Leica Competitor, “Affiliate” shall
not include any holding body corporate of the Leica Competitor (or any of its
Affiliates other than the named Leica Competitor listed on Schedule 1),
unless the assets of the Leica Competitor listed in Schedule 1 represent
greater than:

 

a)             20%,
in the case of acquisition of voting securities of CMC; or

 

b)            10%,
in the case of acquisition of voting securities of NovAtel,

 

of the
consolidated assets of the holding body corporate;

 

(ii) for
purposes of determining whether a holding body corporate of a named NovAtel
Competitor listed on Schedule 1A is a NovAtel Competitor, “Affiliate”
shall not include any holding body corporate of the NovAtel Competitor (or any
of its Affiliates other than the named NovAtel Competitor listed on
Schedule 1A), unless the assets of the NovAtel Competitor listed in
Schedule 1A represent greater than 10% of the consolidated assets of the
holding body corporate.

 

Notwithstanding
the foregoing, if it can be reasonably anticipated that such Leica Competitor
or NovAtel Competitor, as the case may be, and NovAtel or Leica, as the case
may be (assuming such change of control occurs) will report in all material
respects to the same operating management responsible for the two businesses,
the holding body corporate will be deemed to be an Affiliate.  For the purposes of this Agreement, a body
corporate shall be deemed to be another’s holding body corporate if, but only
if, that other is its subsidiary.

 

“Business Day”
means a day other than a Saturday or Sunday or a public holiday in Canada or
Switzerland.

 

“Change of
Control of CMC” means the first acquisition, directly or indirectly,
in one or a series of transactions, by any Leica Competitor, as then listed on
Schedule 1 (together with any Person acting jointly or in concert with a
Leica Competitor) of (i) 50% or more of the issued and outstanding voting
securities of CMC, (ii) the power otherwise to elect a majority of the
directors of CMC or (iii) a significant portion of the assets of CMC (which
includes the NovAtel shares).  For
greater certainty, a Change of Control of CMC and/or NovAtel shall only include
the first event that satisfies the preceding conditions.

 

“Change of
Control of Leica Geosystems” means the acquisition, directly or
indirectly, in one or a series of transactions, by any NovAtel Competitor as
then listed on Schedule 1A (alone or together with any person acting
jointly or in concert with a NovAtel Competitor) of (i) 50% or more of the
issued and outstanding voting securities of Leica Geosystems, (ii) the
power otherwise to elect a majority of the directors of Leica Geosystems or
(iii) a significant portion of the assets of Leica Geosystems.

 

“Change of
Control of NovAtel” means the first acquisition, in one or a series
of transactions, by any Leica Competitor as then listed on Schedule 1
(together with any Person acting jointly or in concert with a Leica Competitor)
of (i) 50% or more of the issued and outstanding voting securities of NovAtel,
(ii) the power otherwise to elect

 

2

 

a majority of
the directors of NovAtel or (iii) a significant portion of the assets of
NovAtel or all or substantially all of the technology underlying this
Agreement.  A Change of Control of CMC
will not constitute a Change of Control of NovAtel.  For greater certainty, a Change of Control of CMC and/or NovAtel
shall only include the first event that satisfies the preceding conditions.

 

“Change of
Control of a NovAtel Competitor” means the acquisition, directly or
indirectly, in one or a series of transactions, by Leica Geosystems (alone or
together with any person acting jointly or in concert with Leica Geosystems) of
(i) 50% or more of the issued and outstanding voting securities of a
NovAtel Competitor then listed in Schedule 1A, (ii) the power
otherwise to elect a majority of the directors of a NovAtel Competitor or
(iii) a significant portion of the assets of a NovAtel Competitor.

 

“Confidential
Information” shall have the meaning assigned to it in Clause 7.2.

 

“Contract
Parties”
means Leica Geosystems, NovAtel, CMC and Oncap.

 

“Development
Agreement” shall mean the agreements the Parties will from time to
time enter into for development of GNSS Products by NovAtel, which will define
the terms for specific GNSS Product development projects, such as technical
specifications, project costs, timelines and deliverables.

 

“GNSS”
means global navigational satellite system.

 

“GNSS
Products” means state-of-the-art OEM receiver boards, antennas and
other GNSS products and technologies.

 

“GNSS
Technologies” include single-frequency L1, Wide Area Augmentation
System (“WAAS”)
and other augmentation systems, dual-frequency L1/L2, L2C, L5, Galileo, Glonass
receivers, pinwheel and other antennas, as well as other integrated positioning
and communication technologies.

 

“Initial Term”
shall have the meaning assigned to it in Clause 4.1.

 

“Intellectual Property Rights” means
patents, trademarks, service marks, mask works, copyrights, and all
applications for the foregoing, licences, know-how, industrial designs, trade
secrets, trade names and any other similar rights arising anywhere in the
world.

 

“Leica Competitor” means a
Person who engages in the development, manufacture, design, distribution, sale
or supply of, or otherwise deals in, GNSS Products and GNSS Technologies for
surveying applications or other surveying measurement products. The initial
list of Leica Competitors is attached as Schedule 1.  The Parties will discuss, on each
anniversary date of this Agreement, whether the list of competitors should be
updated using criteria consistent with those used to determine the list of
competitors at the date hereof.  Upon
agreement by the Parties, the list of competitors on Schedule 1 will be
updated.

 

“Leica Triggering Event”  means
a Change of Control of Leica Geosystems or a Change of Control of a NovAtel
Competitor.

 

3

 

“NovAtel
Competitor”  means a Person who engages in the
development, manufacture, design, distribution, sale or supply of, or otherwise
deals in, GNSS Products and GNSS Technologies. 
The initial list of NovAtel Competitors is attached as
Schedule 1A.  The Parties will discuss,
on each anniversary date of this Agreement, whether the list of NovAtel
Competitors should be updated using criteria consistent with those used to
determine the list of competitors at the date hereof.  Upon agreement by the Parties, the list of NovAtel Competitors on
Schedule 1A will be updated.

 

“OEM”
means original equipment manufacture.

 

“Parties”
means Leica Geosystems and NovAtel.

 

“Person”
includes a natural person, firm, company, association, trust, partnership,
joint venture, government, state, local authority or other organization (in
each case whether or not having legal personality).

 

“Strategic
Co-Operation Agreement” shall mean
the Amended and Restated Strategic Co-Operation Agreement, dated as of
April 5, 2004, by and between Leica and NovAtel.

 

“Supply
Agreement” shall mean the agreements entered into by the Parties for
the manufacture and supply of GNSS Products by NovAtel, which will define
product supply obligations, including technical specifications, numbers of
units, costs and service and support obligations.

 

1.2           In
this Agreement, unless otherwise specified:

 

1.2.1        references
to parties, clauses, and schedules are to clauses of, and the parties and
schedules to, this Agreement, a reference to a paragraph is to the paragraph
clause or schedule in which it appears and references to this Agreement
include a reference to each of the Schedules;

 

1.2.2        headings
are for convenience only and do not affect its interpretation;

 

1.2.3        use of
any gender includes the other genders;

 

1.2.4        references
to a “company” are to a company, corporation or other body corporate, wherever
and however incorporated;

 

1.2.5        “include”
and “including” are to be construed without limitation, general words
introduced by the word “other” are not to be given a restrictive meaning by
reason of the fact that they are preceded by words indicating a particular
class of acts, matters or things and general words are not to be given a
restrictive meaning by reason of the fact that they are followed by particular
examples intended to be illustrations of those general words;

 

1.2.6        a
reference to a date which is not a Business Day is to be construed as a
reference to the next succeeding Business Day;

 

1.2.7        a
reference to a statute or statutory provision is to that statute or provision
as in force at the date of this Agreement and includes any subordinate legislation

 

4

 

made under it
and is to be construed as a reference to a statute or statutory provision of
which it is a re-enactment or consolidation.

 

2.             Change of Control of NovAtel

 

2.1           On or
before the occurrence of a Leica Triggering Event, in the event of a proposed
Change of Control of NovAtel

 

(a)            for
so long as NovAtel is controlled by CMC, if the event is described in clauses
(i) or (iii) of the definition of Change of Control of NovAtel, which, CMC is interested
in pursuing, or in the case of an asset transaction, which the board of
directors of NovAtel is interested in pursuing, Leica Geosystems will have the
right, for a period ending on the later of:

 

(i)         60 days
following the date that Leica Geosystems receives written notice of a proposed
Change of Control of NovAtel from CMC, and

 

(ii)        30 days
following the date Leica Geosystems receives a copy of the offer (“Formal
Offer”) from a third party to CMC in respect of a proposed Change of Control of
NovAtel,

 

to notify CMC
or NovAtel, as the case may be, of its intention to purchase and to purchase,
CMC’s shares of NovAtel or NovAtel’s assets, as the case may be on the
same terms as those contained in the Formal Offer made to or by the third party
(other than a condition in such third party offer that such offer and the
related financing is conditional on Leica Geosystems waiving or not exercising
its right of purchase under this Agreement) in respect of the proposed Change
of Control of NovAtel, subject to compliance with relevant regulatory
requirements and securities and any other applicable laws; provided that if the
Leica Competitor has not made a Formal Offer within 90 days following the date
of the notice in clause (i) above, such right to purchase shall, at CMC or
NovAtel’s option, as the case may be, on written notice to Leica Geosystems,
terminate and the provisions of this Section 2.1 will apply in respect of
any new proposed Change of Control of NovAtel; or

 

(b)            if
the event is described in clause (ii) of the definition of Change of Control of
NovAtel, Leica Geosystems will have the right to purchase CMC shares of NovAtel
for fair market value on the same basis and time restrictions as set out in
Clause 2.2 subject to compliance with relevant regulatory requirements and
securities laws.

 

2.2           NovAtel
or, if applicable, CMC shall, subject to compliance with applicable law, use
reasonable efforts to ensure that Leica Geosystems has reasonable access to all
documentation relevant to NovAtel and to NovAtel’s senior management to conduct
reasonable due diligence.  NovAtel and,
if applicable, CMC shall ensure that a Formal Offer is provided to Leica
Geosystems prior to a Change of Control of NovAtel.  On or before the occurrence of the earlier of (i) a Leica
Triggering Event and (ii) a Change of Control of NovAtel, for so long as
NovAtel is controlled by CMC, in the event of a proposed Change of Control of
CMC, Leica Geosystems will have the right, for a period of 30 days from the
date it is notified of such proposed Change of Control of CMC, to notify (the
“Leica Notice”) CMC of its intention to purchase

 

5

 

CMC’s shares of NovAtel.  The purchase price of the NovAtel shares
shall be the shares’ fair market value as determined by Scotia Capital who
shall be provided a copy of the Leica Notice. 
Both parties shall have the right to present submissions to Scotia
Capital as to their views of the fair market value of the NovAtel shares within
10 days following delivery of the Leica Notice. CMC and Leica Geosystems
shall use their best efforts to cause Scotia Capital to complete its
determination of the fair market value of the NovAtel shares within
30 days following delivery of the Leica Notice.  If, for whatever reason, Scotia Capital is unwilling or unable to
determine the fair market value of the NovAtel shares in accordance with the
foregoing provision, then the president of the Canadian Institute of Chartered
Accountants shall appoint an independent valuator to determine such fair market
value.

 

2.3           For so
long as NovAtel is controlled by CMC, CMC shall notify Leica Geosystems in a
timely manner in respect of any contemplated Change of Control of NovAtel.  For so long as NovAtel is controlled by CMC,
CMC shall notify Leica Geosystems in a timely manner of any contemplated Change
of Control of CMC provided that the Chief Executive Officer of CMC believes, in
his or her reasonable opinion, that such notification will not have any
materially prejudicial effect on, or breach any non-disclosure requirements of,
such contemplated Change of Control of CMC. 
Notwithstanding the foregoing, for so long as NovAtel is controlled by
CMC, CMC shall ensure that Leica Geosystems is notified of a proposed Change of
Control of CMC prior to a Change of Control of CMC.

 

2.4           If a
Change of Control of NovAtel or a Change of Control of CMC is completed and
Leica Geosystems does not exercise its right to terminate the Strategic
Co-operation Agreement pursuant to Clause 7.1(i) therein, CMC shall use
reasonable efforts to have the buyer of the shares agree to vote its shares in
NovAtel to elect a Leica Geosystems nominee to the board of directors of
NovAtel.

 

2.5           NovAtel
and CMC shall use commercially reasonable efforts to obtain any shareholder
consent required to enable Leica Geosystems to exercise its rights under this
Clause 2.

 

3.             Offer Right

 

3.1           In the
event CMC proposes to sell some or all of its shares in NovAtel, to a party
other than a Leica Competitor, except to an Affiliate or subsidiary of CMC for
reorganization purposes or to NovAtel management (in which case such transferee
shall agree in writing to be bound by the provisions of this Agreement), Leica
Geosystems will be given not less than 90 days prior notice of such proposed sale
along with general information regarding the proposed terms being considered
(the “CMC First Notice”).  Leica
Geosystems will be entitled to make an offer to purchase some or all of such
shares upon receipt of the CMC First Notice. 
If Leica Geosystems intends to make an offer it will submit a
non-binding letter of intent, which will include the general terms and
conditions of its offer, within 45 days of receiving the CMC First Notice.  Upon acceptance by CMC of Leica Geosystems’
letter of intent, Leica Geosystems will have 45 days to conduct due diligence
and submit its final offer.  CMC and
NovAtel shall, subject to compliance with law, ensure that Leica Geosystems
shall have reasonable access to all documentation relevant to NovAtel and to
NovAtel’s senior management, in order to permit Leica Geosystems to conduct its
due diligence.  If within the above time
periods, CMC receives a bona fide offer

 

6

 

from an arm’s length third party
(“Purchaser”) to acquire its shares in NovAtel, it will promptly give notice to
Leica Geosystems of such offer, along with general information regarding the
proposed terms of such offer (the “CMC Second Notice”).  If, after receiving the CMC Second Notice,
Leica Geosystems intends to make an offer to purchase CMC’s shares in NovAtel,
the offer must be made and must by its terms expire within 20 days after
receipt of the CMC Second Notice.  CMC
shall consider any offer by Leica Geosystems in good faith, but will be under
no obligation to accept any offer from Leica Geosystems.  If in connection with the proposed sale, a
sale does not occur with one of the purchasers CMC is in discussions with and
the sale process terminates, CMC shall again comply with the provisions of this
Clause 3.1 before selling its shares of NovAtel.

 

3.2           Leica
Geosystems is entitled at any time for so long as NovAtel is a public company,
subject to compliance with relevant regulatory requirements and securities
laws, to purchase shares in NovAtel on the open market.  CMC will support Leica Geosystems’ becoming
a strategic shareholder in NovAtel, on terms that are fair to all the
shareholders of NovAtel.

 

3.3           If CMC
transfers some or all of its Shares in NovAtel to an Affiliate, such Affiliate
shall agree in writing to be bound by the provisions of this Agreement.

 

4.             Term and Termination

 

4.1           Subject
to early termination as set out in this Agreement,  the initial term of this Agreement will be seven (7) years
from May 1, 2003 (the “Initial Term”) and will be automatically renewed at the
end of the Initial Term (or each 12 month extension pursuant to this Clause
4.1) for a further 12 months, unless either Party notifies the other in writing
at least 365 days prior to the expiration of the Initial Term or any relevant
subsequent 12 month extension (as the case may be) that it does not wish to
renew, in which case this Agreement will terminate at the end of the Initial
Term or the latest subsequent 12 month extension, as the case may be.

 

4.2           As
used herein, a Contract Party shall be deemed a “Defaulting Party” if such
Contract Party commits a material breach of its obligations under this
Agreement or under any Supply or Development Agreement and, if the breach is
capable of remedy, it fails to remedy such breach within 90 days (except in the
case of a monetary default which shall be cured in 30 days) after having been
specifically required by written notice to do so.  NovAtel may terminate this Agreement with immediate effect by
written notice to the other Contract Parties at any time during which Leica
Geosystems is a Defaulting Party.  Leica
Geosystems may terminate this Agreement with immediate effect by written notice
to the other Contract Parties at any time during which NovAtel, CMC or Oncap is
a Defaulting Party.

 

4.3           All
further rights and obligations of the Parties cease to have effect on
termination of this Agreement, except that termination shall not affect the
accrued rights and obligations of the Parties at the date of termination or the
continued existence and validity of the rights and obligations of the Parties
under this Clause 4 and those clauses which are expressly intended to survive
termination and any provisions necessary for the interpretation or enforcement
of this Agreement.

 

7

 

4.4           In the
event of a Leica Triggering Event, NovAtel and/or CMC will have the right, to
be exercised within 90 days of the date on which it becomes aware that a Leica
Triggering Event has occurred, to terminate some or all of its obligations
under this Agreement.

 

4.5           Oncap
will automatically cease to be a party to this Agreement when Oncap and its
Affiliates cease to control CMC.

 

4.6           This
Agreement will automatically terminate upon the termination of the Strategic
Co-Operation Agreement.

 

5.             Representations and
Warranties

 

5.1           Leica
Geosystems represents and warrants to each of the other Contract Parties, and
NovAtel, CMC and Oncap severally represent and warrant, in respect of the
following matters, as such matters relate to itself only, to Leica Geosystems,
as follows:

 

5.2           it is
a company (or limited partnership in the case of Oncap) duly established and
existing under its jurisdiction of establishment and has the requisite power
and authority to enter into this Agreement and any other agreements it is
required under this Agreement to enter into (together the “Transaction
Agreements”) and to perform its obligations under each of them;

 

5.3           this
Agreement constitutes, and the other Transaction Agreements will, when executed,
constitute, its binding obligations in accordance with their respective terms;

 

5.4           its
execution and delivery of, and performance of its obligations under, this
Agreement and the other Transaction Agreements will not violate, conflict with,
result in a breach of, constitute a default under or give rise to a right of
termination of any obligation under:

 

(a)           any
agreement, instrument, mortgage, indenture or arrangement to which it is a
party or by which it is, or any of its properties or assets are, bound;

 

(b)           its
certificate of incorporation or memorandum or articles of association or other
constitutional document; or

 

(c)           any
order, judgement or decree of any court or governmental agency to which it is a
party or by which it, or any of its properties or assets, is bound.

 

The execution
and delivery of this Agreement will not require it to obtain any shareholders’
consent and, excluding for the purpose of the following representation and
warranty the provisions of Clauses 2 and 3 with respect to NovAtel and CMC, the
performance by it, of its terms will not require (i) it to obtain any
shareholders consent or (ii) to obtain the approval of, or give notice to
or register with, any governmental or other authority which has not been
obtained, given or made at the date of this Agreement and is in full force and
effect.

 

5.5           There
are no:

 

(a)           outstanding
judgements, orders, injunctions or decrees of any governmental or regulatory
body or arbitration tribunal against or affecting it;

 

8

 

(b)           lawsuits,
actions or proceedings pending or, to its knowledge threatened against or
affecting it; or

 

(c)           investigations
by any governmental or regulatory body which are, to its knowledge, pending or
threatened against it,

 

which, have or
could have a material adverse effect on the ability of it to execute and
deliver, or perform its obligations under, this Agreement and the other
Transaction Agreements.

 

6.             Limitation of Liability

 

6.1           Except
as set out in this Agreement, all conditions, warranties, representations,
terms and undertakings, express or implied, statutory or otherwise, in respect
of this Agreement are excluded.

 

6.2           No
Contract Party shall in any circumstances be liable (whether in negligence,
tort, contract, misrepresentation, under any indemnity or otherwise) for any
indirect, incidental, punitive, special or consequential loss or damage such
as, without limitation, any loss of revenue, loss of profit and contract
incurred or suffered by any other Contract Party in respect of this Agreement,
even if it has been advised of the possibility of such damages.

 

7.             Confidentiality

 

7.1           During
the Initial Term and any extensions under Clause 4 and after termination or
expiration of this Agreement for any reason, and subject to this Clause 7, the
Contract Parties will maintain all Confidential Information in strict
confidence and not at any time disclose or make known to any Person or use for
any purpose other than the performance of its obligations hereunder any Confidential
Information and, except as provided below, all decisions regarding the timing
and content of any disclosure of such Confidential Information will be subject
to the prior mutual agreement of all Contract Parties.

 

7.2           The
term Confidential Information includes (i) this Agreement and the existence and
status of the Contract Parties’ negotiations and (ii) all information furnished
to one Contract Party by any other Contract Party, whether by way of oral
explanation or by making available any records, contracts, books of account,
budgets, reports, forecasts, projections or other information, and also
includes all notes, analyses, compilations, studies or other documents, whether
prepared by the disclosing party or their respective representative.

 

7.3           Such Confidential
Information will not include information which (i) at the time of disclosure or
thereafter is generally available to and known by the public (other than as a
result of a disclosure directly or indirectly by one of the Contract Parties),
(ii) was available on a non-confidential basis from a third party source, (iii)
is required to be disclosed pursuant to applicable law, regulation, legal
process or exchange rules or (iv) is reasonably required to be disclosed in
order to enable a Contract Party to discharge its obligations hereunder;
provided, however, that, in the case of subsections (iii) and (iv) hereof, any
Contract Party disclosing information that would otherwise constitute
Confidential Information shall, to the extent practical under the

 

9

 

circumstances, provide prior notice of such
disclosure to the other Contract Parties and, if so requested by another
Contract Party, use its commercially reasonable efforts to ensure that such
information is treated confidentially by the recipients.

 

7.4           Each
Contract Party may disclose Confidential Information to employees, consultants
and advisors, on a need-to-know basis, provided that the disclosing party
ensures that each such individual observes the confidentiality obligations
herein.

 

7.5           The
Contract Parties will issue no press release or make any other public
announcement relating their discussions or business relationships except in a
mutually acceptable form, unless according to legal counsel, such Contract
Party is required to issue a press release or make any other public
announcement pursuant to applicable law, regulation, legal process or exchange
rules.  In such event, but without
limiting the foregoing, the Contract Parties will endeavour to agree on the
form of a press release or other announcement.

 

7.6           After
the termination or expiry of this Agreement each Contract Party shall
immediately return to the other relevant Contract Party (or destroy if so
directed) all Confidential Information received from such Contract Party,
whether in printed matter form, on disk or otherwise, which is in its
possession, custody or control.

 

7.7           The
Contract Parties acknowledge that damages would not be an adequate remedy for
any breach of this Clause 7 and each Contract Party shall be entitled to the
remedy of injunction, specific performance and other equitable relief for any
threatened or actual breach, in addition to any damages or other remedy to
which it may be entitled and no proof of special damages shall be necessary for
the enforcement of this Agreement.

 

8.             Notices

 

8.1           Any
notice to be given under this Agreement must be in writing signed by or on
behalf of the Contract Party giving it and may be delivered personally or sent
by first class pre-paid post recorded delivery or by a recognised international
courier service, fees prepaid, or by fax, to the recipient at its address set
out in Clause 8.2 or such other address as it may have specified by giving not
less than five Business Days’ notice to the others.

 

8.2           In the
absence of evidence that it was received earlier, any notice or other
communication is deemed given:

 

8.2.1        if
delivered personally, when left at the address of the relevant Contract Party;

 

8.2.2        if sent
by first class post, five Business Days after the date of posting;

 

8.2.3        if sent
(fees prepaid) by a generally recognised international courier service, two
Business Days after delivery to the relevant international courier; and

 

8.2.4        if sent
by fax, on a Business Day when confirmation of its transmission has been
recorded by the sender’s fax machine.

 

If delivery or
transmission occurs after 5 p.m. on a Business Day or on a day which is not a
Business Day, service is deemed to occur at 9 a.m. on the next following
Business Day.

 

10

 

The address of
each Contract Party for the purposes of this Clause 8 is:

 

	
  Name
  of Contract

  Party

  	
   

  	
  Address

  	
   

  	
  Numbers

  	
   

  	
  Attention:

  
	
  Leica Geosystems AG

  	
   

  	
  Heinrich Wild Strasse

  	
   

  	
  Fax:

  	
   

  	
  Martin Nix

  
	
   

  	
   

  	
  CH-9435 Heerbrugg

  	
   

  	
  +41 71 727 46 89

  	
   

  	
   

  
	
   

  	
   

  	
  Switzerland

  	
   

  	
   

  	
   

  	
  with a copy to Legal Affairs

  
	
   

  	
   

  	
   

  	
   

  	
  Phone:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   +41
  71 727 4700

  	
   

  	
   

  

 

	
  Name
  of Contract

  Party

  	
   

  	
  Address

  	
   

  	
  Numbers

  	
   

  	
  Attention:

  
	
  NovAtel Inc.

  	
   

  	
  1120-68th Avenue N.E.

  	
   

  	
  Fax:

  	
   

  	
  Graham Purves

  
	
   

  	
   

  	
  Calgary, Alberta

  	
   

  	
  (403) 295-0230

  	
   

  	
   

  
	
   

  	
   

  	
  Canada T2E 8S5

  	
   

  	
   

  	
   

  	
  with a copy to Legal Affairs

  
	
   

  	
   

  	
   

  	
   

  	
  Phone:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (403) 295-4964

  	
   

  	
   

  

 

	
  Name
  of Contract

  Party

  	
   

  	
  Address

  	
   

  	
  Numbers

  	
   

  	
  Attention:

  
	
  CMC Electronics Inc.

  	
   

  	
  600 Dr. Frederik Philips Blvd.

  	
   

  	
  Fax:

  	
   

  	
  Jean-Denis
  Roy

  
	
   

  	
   

  	
  St-Laurent, Quebec

  	
   

  	
  (514)
  748-3025

  	
   

  	
   

  
	
   

  	
   

  	
  Canada H4M 2S9 

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Phone:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (514)
  748-3013

  	
   

  	
   

  

 

	
  Name
  of Contract

  Party

  	
   

  	
  Address

  	
   

  	
  Numbers

  	
   

  	
  Attention:

  
	
  Oncap L.P.

  	
   

  	
  161 Bay Street, 48th Floor

  	
   

  	
  Fax:

  	
   

  	
  Gregory Baylin

  
	
   

  	
   

  	
  P.O. Box 220

  	
   

  	
  (416) 214-6106

  	
   

  	
   

  
	
   

  	
   

  	
  Toronto, Ontario

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Canada M5J 2S1

  	
   

  	
  Phone:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (416) 214-4304

  	
   

  	
   

  

 

8.3           Notices
and communications transmitted by e-mail are not to be considered to be in
writing for the purposes of this Clause 8.

 

9.             Assignment

 

9.1           No
Contract Party will, without the prior written consent of the others, assign,
transfer, charge, create a trust in respect of or deal in any other manner
with, or purport to assign, transfer, charge, create a trust in respect of or
deal with, any of its rights or obligations under this Agreement; provided,
however, that
NovAtel and Leica Geosystems may assign the benefits of this Agreement as
security for any third party debt financing, provided that the beneficiaries of
such security agree to be bound by all or the obligations of the assignor
hereunder.

 

10.          Entire Agreement

 

10.1         This
Agreement, together with the Strategic Co-Operation Agreement and any Supply or
Development Agreement, and the documents referred to in it, constitute the
whole

 

11

 

and only agreements and supersede any
previous agreements between the Contract Parties relating to its subject
matter.  Except as expressly set forth
herein, in the Strategic Co-Operation Agreement or in any Supply or Development
Agreement, all warranties, conditions or other terms implied by law in any
jurisdiction are excluded to the fullest extent permitted by law and, if
incapable of exclusion, irrevocably waived. 
Each of the Contract Parties agrees that, in entering into this
Agreement and the documents referred to in it, it does not rely on, and that no
Contract Party is liable for, or is entitled to claim rescission or any other
remedy in respect of, any statement, representation, warranty or assurance
(whether negligently or innocently made) of any Person made at any time prior
to the execution of this Agreement which is not expressly set out in this
Agreement, in the Strategic Co-Operation Agreement or in a Supply or
Development Agreement and that no Contract Party is liable for, or is entitled
to any remedy in respect of, any misrepresentation or untrue statement unless
and to the extent that a claim for breach of contract lies under this
Agreement, in the Strategic Co-Operation Agreement or in a Supply or
Development Agreement. Nothing in this Clause 10 has the effect of limiting or
restricting any liability of any Contract Party arising as a result of fraud,
wilful misconduct or wilful concealment.

 

11.          General

 

11.1         No
variation of this Agreement or of any of the documents referred to in it is
valid unless it is in writing and signed by or on behalf of each Contract
Party.

 

11.2         No delay
or failure on the part of any Contract Party in exercising a right, power or
remedy provided by law or under this Agreement will impair that right, power or
remedy or operate as a waiver of it or any other rights and remedies.  The single or partial exercise of any right,
power or remedy provided by law or under this Agreement will not preclude any
other or further exercise or the exercise of any other rights power or remedy.

 

11.3         Except
as expressly provided in this Agreement, the rights, powers and remedies
contained in this Agreement are cumulative and not exclusive of any rights,
powers or remedies provided by law.

 

11.4         If a
provision of this Agreement is or becomes or is found by a court or other
competent authority to be illegal, invalid or unenforceable, in whole or in
part, under any law, such provision will to that extent only be deemed not to
form part of this Agreement and the legality, validity and enforceability of
the remainder of this Agreement will not be affected or impaired.  The Contract Parties will negotiate in good
faith to replace any such illegal, invalid or unenforceable provision with a
valid and enforceable provision which, as far as possible, has the same legal
and commercial effect as that which it replaces.

 

11.5         When on
a particular date a Contract Party has a right to performance by another
Contract Party or a right to terminate this Agreement, such right may be
enforced or exercised notwithstanding any principles of equity, and the
Contract Party will be entitled to such performance or to terminate this
Agreement on or after such date.

 

11.6         Nothing
in this Agreement, and no action taken by the Contract Parties pursuant to this
Agreement, creates, or is to be construed as creating, a partnership,
association,

 

12

 

joint venture or other co-operative entity
between the Contract Parties or constitutes any Contract Party as the agent of
the others for any purpose whatsoever.

 

11.7         This
Agreement may be executed in any number of counterparts, but is not effective
until each Contract Party has executed at least one counterpart.  Each counterpart, once executed, is deemed
to form part of and will together constitute this Agreement.

 

11.8         Each
Contract Party will pay its own costs relating to the negotiation, preparation,
execution and performance of this Agreement and any matter contemplated by it.

 

11.9         Nothing
in this Agreement shall be construed as to creating any obligation for board
members of any of the Contract Parties to forego any of their fiduciary
responsibilities as board members.

 

12.          Several Liability

 

12.1         Unless
expressly provided otherwise, all obligations of NovAtel, CMC and Oncap are
entered into by each of them severally in relation only to itself and its
liability for any breach of its obligations shall extend only to any loss or
damage arising from its own breach, subject always to Clause 6 hereof.

 

13.          Dispute Resolution, Governing Law and Venue

 

13.1         This
Agreement will be governed by and construed in accordance with the laws of the
Province of Alberta and the laws of Canada applicable therein. The parties
waive to the fullest extent possible any right to refer to the courts or to
appeal any matter required to be submitted for binding determination pursuant
to the arbitration provisions in Schedule 2, to the extent that such
waiver can validly be made.

 

13.2         Except
for matters which, by the express terms of this Agreement, are required to be
submitted to binding arbitration pursuant to Schedule 2 hereto, each
Contract Party agrees that it will submit to the non-exclusive jurisdiction of
the courts of the Province of Alberta for the resolution of any dispute or
disagreement arising under or relating to this Agreement.

 

13

 

This Agreement is executed by
each of the Contract Parties on the date first stated on page 1.

 

 

	
  SIGNED by Johannes J. Hess,

  	
  )

  	
   

  
	
  for and on behalf of LEICA

  	
  )

  	
  /s/ Johannes J. Hess

  	
   

  
	
  GEOSYSTEMS A.G.

  	
  )

  	
  [Director]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SIGNED by Jonathan W. Ladd,

  	
  )

  	
   

  
	
  for and on behalf of NOVATEL 

  	
  )

  	
  /s/ Jonathan W. Ladd

  	
   

  
	
  INC.

  	
  )

  	
  [Chief Executive Officer]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SIGNED by Jean-Denis Roy,

  	
  )

  	
   

  
	
  for and on behalf of CMC 

  	
  )

  	
  /s/ Jean-Denis Roy

  	
   

  
	
  ELECTRONICS INC.

  	
  )

  	
  [Director]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SIGNED by Donald Lewtas,

  	
  )

  	
   

  
	
  for and on behalf of ONCAP L.P.

  	
  )

  	
  /s/ Donald Lewtas

  	
   

  
	
   

  	
  )

  	
  [Secretary]

  

 

14

 

SCHEDULE 1

 

List of Leica
Competitors

 

The following represents the initial list of Leica
Competitors:

 

***

***

***

***

***

 

and each of
their Affiliates

 

The Parties will, acting reasonably, discuss,
on each anniversary date of this Agreement, whether the list of competitors
should be updated.

 

 

*** Certain information on this page has been
omitted and filed separately with the Securities and Exchange Commission.  Confidential treatment has been requested
with respect to the omitted portions.

 

15

 

SCHEDULE 1A

 

List of
NovAtel Competitors

 

The following represents the initial list of
NovAtel Competitors:

 

***

***

***

***

 

and each of
their Affiliates

 

The Parties will, acting reasonably, discuss,
on each anniversary date of this Agreement, whether the list of competitors
should be updated.

 

 

*** Certain information on this page has been
omitted and filed separately with the Securities and Exchange Commission.  Confidential treatment has been requested
with respect to the omitted portions.

 

16

 

SCHEDULE 2

 

Arbitration
Procedures

 

1.     In the event
that a party makes a referral for determination pursuant to Sections 2.3 and
4.3 of the Agreement, the arbitration will be governed by the Rules of the
London Court of International Arbitration for the time being in force which are
deemed incorporated by reference into this Schedule 2 (the “Rules”).  Prior to requesting arbitration, the Parties
shall make a good faith effort to resolve informally any such dispute.  A request for arbitration may not be filed
until fifteen (15) days have elapsed from a written request for such informal
resolution.

 

2.     The
arbitration tribunal will consist of three arbitrators appointed in accordance
with the Rules.  Each Party shall
nominate one (1) arbitrator and the third arbitrator, who will act as
chairperson of the arbitral tribunal, shall be nominated by agreement of the
arbitrators nominated by the Parties.

 

3.     The seat, or
legal place, of arbitration shall be London and the language to be used in the
arbitral proceedings shall be English.

 

17Exhibit 10.12

 

SUPPLEMENTAL INFORMATION TO BE FURNISHED
WITH REPORTS FILED PURSUANT TO

SECTION 15(d) OF THE EXCHANGE ACT BY
NON-REPORTING ISSUERS

 

EMPLOYMENT AGREEMENT

 

EMPLOYMENT AGREEMENT (the
“Agreement”) effective as of the 1st day of June,  2000 between
AMERICAN COMMERCE SOLUTIONS, INC., a Delaware corporation (together with its
successors and assigns referred to herein as the “Corporation”), with principal
executive offices located at 1400 Chamber Drive, Bartow, FL 33830; and Daniel
L.  Hefner residing at 1502 N.  Taylor Rd., Brandon, Florida (the “Executive”).

 

W I T N E S S E T H:

 

WHEREAS, the Corporation desires to
employ Executive as the Executive Vice  President of American Commerce
Solutions, Inc.  to engage in such
activities and to render such services under the terms and conditions hereof
and has authorized and approved the execution of this Agreement; and

 

WHEREAS, Executive desires to be
employed by the Corporation under the  terms and conditions hereinafter
provided;

 

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

 

1. 
EMPLOYMENT, DUTIES AND ACCEPTANCE.

 

1.1
SERVICES.  The Corporation hereby
employs Executive, for the Term  (as hereinafter defined in Section 2
hereof), to render services to the business and affairs of the Corporation in the
office referenced in the recitals hereof and, in connection therewith, shall
perform such duties as directed by the Board of Directors of the Corporation from
time to time, in its reasonable discretion, and shall perform such other duties
as shall be consistent with the responsibilities of such office
(collectively the “Services”). 
Executive shall perform activities related to such office as he shall reasonably
be directed or requested to so perform by the Corporation’s Board of Directors,
to whom he shall report.  Executive
shall use his best efforts, skill and abilities to promote the
interests of the Corporation and its subsidiaries.

 

1.2
ACCEPTANCE.  Executive hereby accepts
such employment and agrees to render the Services.

 

1.3
REPRESENTATIONS OF THE EXECUTIVE.  The
Executive represents and  warrants to the Corporation that his
execution and delivery of this Agreement, his performance of the Services
hereunder and the observance of his other obligations contemplated hereby will
not (i) violate any provisions of or require the consent or approval of
any party to any agreement, letter of intent or other document to which he is a
party or (ii) violate or conflict with any arbitration award, judgment or decree
or other restriction of any kind to or by which he is subject or bound.

 

1.4
EXECUTIVE’S ABILITY TO CONTRACT.  The
Executive has no ability to  independently contract unless authorized,
in writing, by the Executive Committee of the Board of Directors or the full
Board of Directors for a specific contract.

 

2. 
TERM OF EMPLOYMENT.

 

The term of Executive’s employment
under this Agreement (the “Term”) shall  commence on June 1, 2000 and shall
terminate on May 31, 2003, unless sooner terminated pursuant to Sections 9 or
5.1 of this Agreement; provided, however, if the Corporation shall fail to give
Executive notice of non-renewal not less than 60 days prior to the scheduled
expiration of the term hereof, the Term shall automatically be extended for
an additional two (2) year period. 
Notwithstanding anything to the contrary contained herein, the
provisions of

 

1

 

this Agreement governing Protection of
Confidential Information shall continue  in effect as specified in Section 10
hereof.

 

3. 
BASE SALARY, EXPENSE REIMBURSEMENT AND STOCK OPTIONS.

 

3.1
BASE SALARY.  During the Term, as full
compensation for the  Services, the Corporation agrees to pay
Executive a minimum base salary (“Base Salary”) at the annual rate of
$60,000 for the period from June 1, 2000 to May 31, 2000.  Such Base Salary shall be (i) increased four percent (4%)
annually effective June 1st of each year during the term of this
Agreement, (ii) reviewed periodically for possible increases
promptly after each future acquisition by the Corporation of any other
corporation or business or other material increase in the
Corporation’s revenues or scope of the Corporation’s business and (iii) renegotiated
in good faith effective as of December 15, 2002 for possible increase
based upon the Corporation’s historical performance and projections for future
performance.  Such Base Salary shall be
subject to withholding and other applicable taxes, payable during the term
of this Agreement in accordance with the Corporation’s customary payment
practices, but not less frequently than monthly.

 

3.2
BUSINESS EXPENSE REIMBURSEMENT.  Upon
submission to, and approval  by an officer of the Corporation designated
by the Board of Directors of the Corporation, of a statement of expenses,
reports, vouchers or other supporting information, which approval shall be
granted or withheld based on the Corporation’s policies in effect at such
time, the Corporation shall promptly reimburse Executive for all
reasonable business expenses actually incurred or paid by him
during the Term or renewals thereof in the performance of the Services,
including, but not limited to, expenses for entertainment, travel and similar
items.

 

3.3
STOCK OPTION AGREEMENT.  In addition to
the salary hereinabove  provided, the Executive shall be granted
options to purchase 100,000 shares of the Corporation’s Common Stock as of
June 1 of each year during the Term of this Agreement at an exercise price equal
to the average of the closing bid and asked price of the Corporation’s Common
Stock during month of May immediately preceding said June 1, pursuant to
the terms of the Stock Option Agreement between the Corporation and the
Executive executed concurrently herewith.

 

4. 
PROFIT SHARING.

 

4.1
PROFIT SHARING AMOUNT.  In order to
provide performance-based  incentive compensation to the Executive,
the Corporation hereby agrees to pay the Executive, in addition to the
Base Salary set forth in Section 3 hereof, a minimum cash bonus for each fiscal
year during the Executive’s employment hereunder (the “Bonus”) equal to
Fifteen Thousand Dollars ($15,000.00) per annum, payable in quarterly
installments, when sufficient cash is available for the
payment.  Additional profit sharing or
Bonus methods are available to the Executive in terms to be issued annually at
the discretion of the Board of Directors.

 

4.2
DETERMINATION AND PAYMENT.  The final
determination with respect to  any fiscal year shall be made
promptly, and in any event within 15 days, after the Corporation has filed its Annual
Report on Form 10-K for each year with the Securities and Exchange
Commission.  Within 45 days after the
end of the Corporation’s fiscal year, based on the preliminary results of
the Corporation for such fiscal year, the Corporation shall pay the Executive an
amount equal to 60% of the estimated minimum cash Bonus based on such
preliminary results.  The balance of
the definitive Bonus so determined, if any, shall be payable to the Executive
in a single lump sum no later than thirty days after the final determination
has been made.  In any event, all
matters pertaining to the Bonus and to the payment of any Bonus to the
Executive hereunder, shall be administered and determined by the Board of
Directors (or a subcommittee thereof appointed for such purpose) in its
reasonable discretion consistent with the terms hereof, the determination of
which shall be final, conclusive and binding for all purposes, absent manifest
error.

 

4.3
PARTIAL YEARS.  Notwithstanding anything
contained herein to the  contrary, no Bonus under this Section 4
shall be deemed earned or payable with respect to any fiscal year during
which this Agreement or the Executive’s

 

2

 

employment is terminated by the Corporation
for Cause (as such term is  hereinafter defined).

 

4.4 Nothing in
this Section 4 shall be construed as conferring upon the Executive any right
(i) normally associated with the ownership of capital stock; (ii) to continue
in the employ of the Corporation or any affiliate of the Corporation; or (iii)
to interfere in any way with the right of the Corporation to terminate this
Agreement in accordance with the provisions hereof.  Nothing in this Agreement shall be construed to imply that any
specific assets of the Corporation have been set aside to provide for payments
under this Agreement.  Any payments
under this Agreement shall be made solely from general assets of the
Corporation existing at the time such payments are due.

 

5. 
SEVERANCE UPON TERMINATION.

 

5.1
TERMINATION.  In the event that
Executive’s employment hereunder  shall be terminated by the
Corporation without Cause (as defined in Section 9.3 hereof) or
by the Executive for Good Reason (as defined in Section 9.4 hereof) or upon a
Change in Control (as defined in Section 9.5 hereof) or upon the Death or
Disability (as defined in Section 9.1 and 15.1, respectively) of Executive atany
time prior to the end of the Term, the Executive or his estate shall be entitled to
receive from the Corporation, in addition to any Base Salary earned to the date
of termination, a severance payment in an amount equal to the greater of
(i) the balance of the Executive’s Base Salary due through the balance of
the Term of this Agreement or (ii) one years salary in the event less than one
year remains in the current contract period.

 

6. 
ADDITIONAL BENEFITS.

 

6.1
IN GENERAL.  In addition to the
compensation, bonuses, expenses and  other benefits to be paid under
Sections 3, 4 and 5 hereof, Executive will be entitled to all rights and benefits
for which he shall be eligible under any insurance, health and medical,
incentive, bonus, profit-sharing, pension or other extra compensation or “fringe”
benefit plan of the Corporation or any of its subsidiaries now existing or
hereafter adopted for the benefit of the executives or employees generally of
the Corporation.  The provisions of thisAgreement,
which incorporate employee benefit packages, shall change as and when such
employee benefit packages change.  In
the event that the Corporation does not provide family health and medical
insurance for the benefit of the executives and employees generally of the
Corporation, the Corporation shall provide Executive and pay all the costs
associated with family health and medical insurance for the benefit of
Executive as selected by Executive in his sole discretion.

 

6.2
AUTOMOBILE.  The Corporation shall lease
for the Executive an  automobile of his choice to be used by the
Executive in connection with the Corporation’s business, at a monthly rental
not to exceed $750 and for a lease term not to exceed three (3) years.  The Corporation shall be responsible for allreasonable
costs of operating, repairing, maintaining and insuring such automobile.

 

6.3
LIFE AND DISABILITY INSURANCE.  The
Corporation shall provide the  Executive with (i) a policy of term
life insurance in an amount equal to not less than three (3) times his annual
Base Salary hereunder, payable to such beneficiary or beneficiaries as shall
be designated by him in writing and (b) a policy of disability insurance that
will provide Executive with an annual amount equal to not less than seventy-five
percent (75%) of his then current Base Salary, payable until Executive shall
reach 70 years of age, with a waiting period not to exceed 120 days.

 

6.4
DIRECTOR’S AND OFFICERS INSURANCE.  The
Corporation shall provide  the Executive with a policy of director’s
and officers liability insurance in such amounts and providing such
coverage as the Executive and the Corporation shall reasonably agree, consistent
with policies obtained by other publicly held companies of similar size and engaged
in similar businesses.

 

7. 
VACATION.

 

The Executive shall be entitled,
during the Term of this Agreement, to a

 

3

 

vacation period annually, as follows:

 

June 1, 2000 through May 31, 2003 —
four (4) weeks in each year of the contract; during which all salary,
compensation, benefits and other rights to which the Executive is entitled to
hereunder shall be provided in full. 
Such vacation may be taken in the Executive’s discretion, at such time
or times as are not inconsistent with the reasonable business needs of the
Corporation.  In addition, Executive
shall be entitled to up to eight (8) sick days and two (2) personal days for
each year commencing June 1, during which all salary, compensation, benefits
and other rights to which the Executive is entitled to hereunder shall be
provided in full.

 

8. 
INSURABILITY; RIGHT TO INSURE. 
Executive agrees that the Corporation  shall have
the right during the Term to insure the life of Executive by a policy or policies
of insurance in such amount or amounts as it may deem necessary or desirable,
and the Corporation shall be the beneficiary of any such policy or policies
and shall pay the premiums or other costs thereof.  The Corporation shall have the right, from time to time, to
modify any such policy or policies of insurance or to take out new insurance
on the life of Executive.  Executiveagrees,
upon request, at any time or times prior to the commencement of or during the
Term to sign and deliver any and all documents and to submit to any physical or
other reasonable examinations which may be required in connection with any
such policy or policies of insurance or modifications thereof.

 

9. 
TERMINATION.

 

9.1
DEATH.  If Executive dies during the
Term of this Agreement,  Executive’s employment hereunder shall
terminate upon his death and all obligations of the Corporation hereunder
shall terminate on such date, except that Executive’s estate or his
designated beneficiary shall be entitled to payment of any unpaid accrued Base
Salary through the date of his death. 
In addition, any accrued and unpaid Bonus shall be paid in
accordance with Section 4 hereof. 
In addition, Executive’s estate or his designated beneficiary shall beentitled
to payment of the severance payments set forth in Section 5.1 hereof.

 

9.2
TERMINATION FOR CAUSE.  The Corporation
may at any time during the  Term, without any prior notice, terminate
this Agreement and discharge Executive for Cause, whereupon the
Corporation’s obligation to pay compensation or other amounts
payable hereunder to or for the benefit of Executive shall terminate on the date of
such discharge.  As used herein the term
Cause shall mean: (i) a willful and material breach by Executive of
the terms of this Agreement which breach shall not have been cured within
thirty (30) days of written notice of such breach; (ii) willful violation
of specific and lawful written direction from the Board of Directors of the
Corporation, which violation shall not have been cured within thirty (30) days of
written notice of such violation, provided such direction is not inconsistent
with the Executive’s duties and responsibilities as the President of Rhode
Island operations of the Corporation; or (iii) conviction of the Executive
of a felony by a federal or state court of competent jurisdiction, which felony
is directly and materially related to or arises out of Executive’s employment
with the Corporation.  The obligations
of the
Executive under Section 10 shall continue notwithstanding termination of theExecutive’s
employment pursuant to this Section 9.2.

 

9.3
TERMINATION WITHOUT CAUSE.  The
Corporation shall have the option to terminate this Agreement Without Cause
upon sixty (60) days written notice to the Executive.  In the event the Corporation terminates this Agreement without
Cause as defined above, the Corporation shall pay the Executive upon
termination, the amount required pursuant to Section 5.1.  The obligations of the Executive under
Section 10 hereof shall continue notwithstanding termination of the Executive’s
employment pursuant to this Section 9.3.

 

9.4
TERMINATION BY EXECUTIVE FOR GOOD REASON. 
The Executive shall have  the right to terminate this Agreement
for Good Reason, as hereinafter defined, upon written notice to the
Corporation.  Good Reason shall mean any
of the following:
(i) the assignment to the Executive of duties inconsistent with the Executive’s
position, duties, responsibilities, titles or offices as described herein;
(ii) any material reduction by the Corporation of the Executive’s dutiesand
responsibilities; (iii) any reduction by the Corporation of the Executive’scompensation
or benefits payable hereunder (it being understood that a reduction

 

4

 

of benefits applicable to all executives of
the Corporation, including the  Executive, shall not be deemed a
reduction of the Executive’s compensation package for purposes of this
definition); (iv) requiring the Executive to be based without his consent at a
location not within reasonable commuting distance of
Lakeland, Florida.

 

9.5.
TERMINATION BY EXECUTIVE UPON CHANGE IN CONTROL.  Executive, at  his option, shall be able to terminate this
Agreement upon written notice given to the Secretary of the Corporation
within ninety (90) days of an occurrence of a “Change in Control”.  A “Change in Control” of the Corporation
shall mean a change in control of the Corporation or any entity controlling the
Corporation (referred to collectively in this Section 9.5 as the
Corporation) of a nature that would be required to be reported in
response to Item 1 of a Current Report on Form 8-K, pursuant to Section 13
or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”); provided
that, without limitation, such a Change in Control shall be deemed to have
occurred at such time as (a) any “person” (as such term is used in Sections 13(d)
and 14(d) of the Exchange Act), other than a person who or which was a shareholder
of the Corporation immediately prior to the Corporation’s secondary offering
(the “SO”), is or becomes the “beneficial owner” (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of securities of the
Corporation representing twenty-five percent (25%) or more of the combined voting
power of the Corporation’s outstanding securities ordinarily having the
right to vote at elections of directors; or (b) individuals who constitute the Board
concurrent with the execution of this Agreement (the incumbent Board) cease
for any reason to constitute at least a majority thereof, provided that any
person becoming a director subsequent to the date hereof whose election or
nomination for election by the Corporation’s shareholders was approved by a vote
of at least three quarters of the directors comprising the Incumbent Board, shall
be, for purposes of this clause (b), considered as though he were a member
of the Incumbent Board; or (c) a sale by the Corporation of all or
substantially all of its assets occurs. 
Notwithstanding anything in the foregoing to the contrary, no Change in
Control shall
be deemed to have occurred for purposes of this Agreement by virtue of anytransactions
which result in the acquisition by the Executive, or by a group of persons
which includes the Executive, directly or indirectly, of a majority of either the
outstanding shares of common stock of the Corporation or the voting securities
of any corporation which acquires all or substantially all of the assets of
the Corporation, whether by way of merger, consolidation, sale of such assets or
otherwise.

 

10. 
PROTECTION OF CONFIDENTIAL INFORMATION.

 

In view of the fact that Executive’s
work for the Corporation will bring  him into close contact with
confidential information and plans for future developments, Executive agrees to the
following:

 

10.1
SECRECY.  To keep secret and retain in
the strictest confidence  all confidential matters of the
Corporation, including, without limitation, trade “know how” and trade secrets,
customer lists, pricing policies, marketing plans, technical processes, formulae,
inventions, research projects, patents or copyrights and all other proprietary
rights owned by or in which the corporation or its subsidiaries has an interest,
and other business affairs of the Corporation, learned by him heretofore or
hereafter, and not to disclose them to anyone inside or outside of the
Corporation, except in the course of performing the Services hereunder or with the
express written consent of the Chief Executive Officer or Board of
Directors of the Corporation and except to the extent such information is already
known to the general public

 

10.2
RETURN MEMORANDA, ETC.  To deliver
promptly to the Corporation on  termination of his employment, or at
any other time as the Chief Executive Officer or the Board of Directors of
the Corporation may so request, all memoranda, notes, records, reports,
manuals, drawings, blueprints, facsimile or e-mail copies and other documents
(and all copies thereof) relating to the Corporation’s business and all
property associated therewith, which he may then possess or have under his control.

 

10.3 COVENANTS.

 

10.3.1
NON-COMPETITION.  Executive agrees that
at all times while

 

5

 

he is employed by the Corporation and
regardless of the reason for termination  of his employment or this Agreement,
for a period of one (1) year thereafter, he will not, as a principal, agent,
employee, employer, consultant, stockholder, investor, director or co-partner of
any person, firm, corporation or business entity other than the Corporation, or
in any individual or representative capacity whatsoever, directly or
indirectly, without the express prior written consent of the Corporation:

 

(i)
engage or participate in any business with customers of the Corporation  or its
subsidiaries directly or indirectly or make use of the customer lists
directly or indirectly as may from time to time be owned by the Corporation.

 

(ii)
aid or counsel any other person, firm, corporation or business entity  to do any
of the above;

 

(iii)
become employed by a firm, corporation, partnership or joint venture  which
competes with the business of the Corporation or from its customer lists on
the date of termination or resignation within the United States or Puerto
Rico; or

 

(iv)
approach, solicit business from, or otherwise do business or deal with  any
customer of the Corporation in connection with any product or service competitive
to any provided by the Corporation.

 

10.3.2
ANTI-RAIDING.  Executive agrees that
during the term of his  employment hereunder, and, thereafter for a
period of two (2) year, he will not, as a principal, agent, employee,
employer, consultant, director or partner of any person, firm, corporation or
business entity other than the Corporation, or in any individual or representative
capacity whatsoever directly or indirectly, without the prior express written
consent of the Corporation approach, counsel or attempt to induce any person who
is then in the employ of the Corporation to leave the employ of the Corporation
or employ or attempt to employ any such person or persons who at any time
during the preceding six months was in the employ of the Corporation.

 

10.3.3
EXECUTIVE’S ACKNOWLEDGEMENTS.  Executive
acknowledges (i)  that his position with the Corporation
requires the performance of services which are special, unique, and
extraordinary in character and places him in a position of confidence and trust with
the Customers and employees of the Corporation, through which, among other
things, he shall obtain knowledge of the Corporation’s “technical information”
and “know-how” and become acquainted with its customers, in which matters the
Corporation has substantial proprietary interests; (ii) that the restrictive
covenants set forth above are necessary in order to protect and maintain such
proprietary interests and the other legitimate business interests of the
Corporation; and (iii) that the Corporation would not have entered into this
Agreement unless such covenants were included herein.

 

Executive also acknowledges that the
business of the Corporation  presently will extend throughout the United
States, and that he will personally supervise and engage in such
business on behalf of Corporation and, accordingly, it is reasonable that the
restrictive covenants set forth above are not more limited as to geographic
area than is set forth therein. 
Executive also represents to the Corporation that the enforcement of
such covenants
will not prevent Executive from earning a livelihood or impose an undue
hardship on the Executive.

 

10.4
SEVERABILITY.  If any of the provisions
of this Section 10, or any  part thereof, is hereinafter construed to
be invalid or unenforceable, the same shall not affect the remainder of
such provision or provisions, which shall be given full effect, without regard to
the invalid portions.  If any of theprovisions
of this Section 10, or any part thereof, is held to be unenforceable because of
the duration of such provision, the area covered thereby or the type of conduct
restricted therein, the parties agree that the court making such determination
shall have the power to modify the duration, geographic area and/or
other terms of such provision and, as so modified, said provision(s) shall then
be enforceable.  In the event that the
courts of any one or more jurisdictions shall hold such provisions
wholly or partially unenforceable by

 

6

 

reason of the scope thereof or otherwise,
it is the intention of the parties  hereto that such determination not
bar or in any way affect the Corporation’s right to the relief provided for
herein in the courts of any other jurisdictions as to breaches or threatened breaches
of such provisions in such other jurisdictions, the above provisions as they
relate to each jurisdiction being, for this purpose, sever able into diverse
and independent covenants.

 

10.5
INJUNCTIVE RELIEF.  Executive
acknowledges and agrees that,  because of the unique and
extraordinary nature of his services, any breach or threatened
breach of the provisions of Sections 10.1, 10.2, or 10.3 hereof will cause
irreparable injury and incalculable harm to the Corporation, and the Corporation
shall, accordingly, be entitled to injunctive and other equitable relief for
such breach or threatened breach and that resort by the Corporation to such
injunctive or other equitable relief shall not be deemed to waive or to limit in
any respect any right or remedy which the Corporation may have with respect to
such breach or threatened breach.  The
Corporation and Executive agree that any such action for injunctive or
equitable relief shall be heard in a state or federal court situated in
Florida and each of the parties hereto, hereby agrees to accept service of
process by registered mail and to otherwise consent to the jurisdiction of such
courts.

 

10.6
EXPENSES OF ENFORCEMENT OF COVENANTS. 
In the event that any  action, suit or proceeding at law or
in equity is brought to enforce the covenants contained in Sections 10.1,
10.2, or 10.3 hereof or to obtain money damages for the breach thereof, the
party prevailing in any such action, suit or other proceeding shall be entitled
upon demand, to reimbursement from the other party for all expenses (including,
without limitation, reasonable attorneys’ fees and disbursements) incurred in
connection therewith.

 

10.7
SEPARATE AGREEMENT.  The provisions of
this Section 10 shall be  construed as an agreement on the part of
the Executive independent of any other part of this Agreement or any other
agreement, and the existence of any claim or cause of action of the Executive
against the Corporation, whether predicated on this Agreement or otherwise, shall
not constitute a defense to the enforcement by the Corporation of the provisions
of this Section 10.

 

11. 
INDEMNIFICATION.

 

The Corporation shall provide the
Executive (including his heirs, executors  and administrators) with coverage
under a standard directors and officers liability insurance policy at the
Corporation’s expense to the same extent as provided for any other director,
officer or trustee of the Corporation. 
In addition, the Corporation shall indemnify the Executive (and his
heirs, executors
and administrators) to the fullest extent permitted under the law of its state
of incorporation against all expenses and liabilities reasonably incurred by
him in connection with or arising out of any action, suit or proceeding
in which the Executive may be involved by reason of his having been a director or
officer of the Corporation or any subsidiary thereof.  Such expenses and liabilities shall include, but not be
limited to, judgments, court costs and attorneys’ fees and the cost of
reasonable settlements, such settlements to be approved by the Board if such action
is brought against the Executive in his capacity as a director or officer of
the Corporation or any subsidiary thereof. 
The Corporation shall, upon the request of the Executive, advance to theExecutive
such amounts as necessary to cover expenses, including without limitation
legal fees and expenses, incurred by the Executive in connection with any suit or
proceeding in which the Executive may be involved by reason of his being or
having been a director or officer of the Corporation or of any subsidiary
thereof.  Such indemnity and advance of
expenses, however, shall not extend to matters as to which the Executive
is finally adjudged to be liable for willful misconduct in the performance
of his duties.

 

12. 
ARBITRATION.

 

Except with respect to any proceeding
brought under Section 10 hereof, any  controversy, claim, or dispute
between the parties, directly or indirectly, concerning this Employment Agreement
or the breach hereof, or the subject matter hereof, including questions
concerning the scope and applicability of this arbitration clause, shall be finally
settled by arbitration in Polk County, Florida pursuant to the rules then
applying of the American Arbitration

 

7

 

Association.  The arbitrators shall consist of one representative selected by
the  Corporation, one representative selected by the Executive and
one representative selected by the first two arbitrators.  The parties agree to expedite the arbitration proceeding in every way,
so that the arbitration proceeding shall be commenced within thirty (30) days
after request therefore is made, and shall continue thereafter, without
interruption, and that the decision of the arbitrators shall be handed down
within thirty (30) days after the hearings in the arbitration proceedings are
closed.  The arbitrators shall have the
right and authority to assess the cost of the arbitration proceedings and
to determine how their decision or determination as to each issue or matter in
dispute may be implemented or enforced. 
The decision in writing of any two of the arbitrators shall be
binding and conclusive on all of the parties to this Agreement.  Should either the Corporation or the
Executive fail to appoint an arbitrator as required by this Section 12 within
thirty (30) days after receiving written notice from the other party to do so,
the arbitrator appointed by the other party shall act for all of the
parties and his decision in writing shall be binding and conclusive on all of the
parties to this Employment Agreement. 
Any decision or award of the arbitrators shall be final and
conclusive on the parties to this Agreement; judgment upon such decision or award
may be entered in any competent Federal or state court located in the United
States of America; and application may be made to such court for confirmation of
such decision or award or for enforcement and for any other legal remedies that
may be necessary to effectuate such decision or award.

 

13. 
NOTICES.

 

All notices, requests, consents and
other communications required or  permitted to be given hereunder,
shall be in writing and shall be deemed to have been duly given if delivered
personally or sent by prepaid telegram, telecopy or mailed
first-class, postage prepaid, by registered or certified mail (notices sent by
telegram or mailed shall be deemed to have been given on the date sent),to
the parties at their respective addresses hereinabove set forth or to suchother
address as either party shall designate by notice in writing to the otherin
accordance herewith.  Copies of all notices
shall be sent to the attorney selected by the Executive and noticed in
writing to the Corporation from time to time.

 

14. 
GENERAL.

 

14.1
GOVERNING LAW.  This Agreement shall be
governed by and construed  and enforced in accordance with the local
laws of the State in which the primary corporate offices of the parent
corporation are located at the time either party seeks remedies or to enforce this
contract.  The venue shall be in the
county in which the primary corporate offices of the parent corporation
are then located at the time either party seeks remedies or to enforce this
contract.

 

14.2
CAPTIONS.  The section headings
contained herein are for reference  purposes only and shall not in any
way affect the meaning or interpretation of this Agreement.

 

14.3
ENTIRE AGREEMENT.  This Agreement sets
forth the entire agreement  and understanding of the parties relating
to the subject matter hereof, and supersedes all prior agreements,
arrangements and understandings, written or oral, relating to the subject matter
hereof.  No representation, promise orinducement
has been made by either party that is not embodied in this Agreement, and neither
party shall be bound by or liable for any alleged representation, promise or
inducement not so set forth.

 

14.4
SEVERABILITY.  If any of the provisions
of this Agreement shall be  unlawful, void, or for any reason,
unenforceable, such provision shall be deemed sever able from, and shall in no way
affect the validity or enforceability of, the remaining portions of this Agreement.

 

14.5
WAIVER.  The waiver by any party hereto
of a breach of any  provision of this Agreement by any other
party shall not operate or be construed as a waiver of any subsequent breach
of the same provision or any other provision hereof.

 

14.6
COUNTERPARTS.  This Agreement may be
executed in one or more

 

8

 

counterparts, each of which shall be deemed
an original, but all of which taken  together shall constitute one and the
same Agreement.

 

14.7
ASSIGNABILITY.  This Agreement, and
Executive’s rights and  obligations hereunder, may not be assigned
by Executive.  The Corporation mayassign
its rights, together with its obligations, hereunder in connection with any sale,
transfer or other disposition of all or substantially all of its business or
assets; in any event the rights and obligations of the Corporation hereunder
shall be binding on its successors or assigns, whether by merger, consolidation
or acquisition of all or substantially all of its business or assets;
provided, however, that any such assignment shall not release the Corporation
from its obligations hereunder.  This
Agreement shall inure to the benefit of, and be binding upon, the
Executive and his executors, administrators, heirs and legal representatives.

 

14.8
AMENDMENT.  This Agreement may be
amended, modified, superseded,  cancelled, renewed or extended and
the terms or covenants hereof may be waived, only by a written instrument executed
by both of the parties hereto, or in the case of a waiver, by the party
waiving compliance.  No superseding
instrument, amendment, modification, cancellation, renewal or extension
hereof shall require the consent or approval of any person other than the parties
hereto.  The failure of either
party at any time or times to require performance of any provision hereof
shall in no matter affect the right at a later time to enforce the same.  No waiver by either party of the breach of
any term or covenant contained in this Agreement, whether by conduct or
otherwise, in any one or more instances, shall be deemed to be, or construed
as, a further or continuing waiver of any such breach, or a waiver of the
breach of any other term or covenant contained  

 

15. 
ADDITIONAL PROVISIONS

 

15.1
DISABILITY.  If Executive shall be
unable to perform a significant  part of his duties and
responsibilities in connection with the conduct of the business
and affairs of the Corporation and such inability lasts for (i) a period of
at least one hundred twenty (120) consecutive days, or (ii) periods aggregating
at least one hundred eighty (180) days during any three hundred sixty-five
(365) consecutive days, by reason of Executive’s physical or mental disability,
whether by reason of injury, illness or similar cause, Executive shall be
deemed disabled, and the Corporation may, at any time thereafter terminate
Executive’s employment hereunder by reason of the Corporation being required to
replace the position.  Upon delivery to
Executive of such notice, all obligations of the Corporation hereunder
shall terminate, except that Executive shall be entitled to payment of any
unpaid accrued Base Salary through the date of termination.  In addition, any accrued and unpaid Bonus
shall be paid in accordance with Section 4 hereof.  In addition, the Executive shall be entitled to those
severance payments set forth in Section 5.1 hereof.  The obligations of Executive under Section 10 hereof shall
continue notwithstanding termination of Executive’s employment pursuant to
this Section 15.1.

 

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

 

	
  ATTEST:
  AMERICAN COMMERCE SOLUTIONS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/
  Norman J.  Birmingham

  	
   

  	
  By:

  	
  /s/
  David N.  DeBaene

  	
   

  
	
   

  	
  Name:
  Norman J.  Birmingham

  	
   

  	
  Name:
  David N.  DeBaene

  
	
   

  	
  Title:
  Chief Financial Officer

  	
   

  	
  Title:
  President

  
	
   

  	
   

  
	
  WITNESS:

  	
   

  
	
   

  	
   

  
	
  /s/
  Robert Maxwell Jr.

  	
   

  	
  /s/
  Daniel L.  Hefner

  	
   

  
	
   

  	
  DANIEL
  L.  HEFNER, individually

  
							

 

9

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