Document:

Exhibit
10.9

 

EMPLOYMENT
AGREEMENT

 

AGREEMENT (this “Agreement”)
made as of April 1, 2005, by and between MDC Partners, Inc., a Canadian
corporation (the “Corporation”), and Michael Sabatino (“Executive”).

 

In consideration
of the mutual covenants set forth herein the parties hereto agree as follows:

 

ARTICLE I  -  Term
of Employment

 

1.01                           Subject
to the terms and conditions set forth herein, the Corporation will employ
Executive for the period beginning April 1, 2005 (the “Commencement
Date”) and ending on March 31, 2008, unless earlier terminated in
accordance with the terms hereof or extended by mutual agreement of the
parties.  The period from the Commencement
Date through March 31, 2008, or such shorter or longer period during which
Executive is employed hereunder, is referred to herein as the “Term of
Employment.”  Executive will serve
the Corporation during the Term of Employment in accordance with the terms and
conditions hereof.

 

ARTICLE II  - 
Duties

 

2.01                           During
the Term of Employment, Executive will serve as the Senior Vice President,
Chief Accounting Officer of the Corporation, reporting to the Vice Chairman of
the Corporation.  Executive shall use his
best efforts to promote the interests of the Corporation and devote his full
and exclusive business time and efforts to its business and affairs.

 

2.02                           Executive
will be based at the offices of the Corporation in New York City, New York,
except for necessary travel on the
Corporation’s business in connection with the performance of his duties hereunder,
including, but not limited to, to Toronto, Canada and other Corporation locations.  The Executive is expected to spend not less than three
(3) days per week in the Corporation’s Toronto office, until the earlier to
occur of (a) October 1, 2005, provided that such date shall be extended
until such time as Executive has established accounting and financial reporting
controls with appropriate resources to ensure that there will be no detrimental
impact resulting from Executive spending less time in the Corporation’s Toronto
office, or (b) such earlier date as determined in the sole discretion of the
Vice Chairman and Executive Vice President. 
Thereafter, Executive’s business travel is expected to be of a similar
nature for Executive as for other executives with similar responsibilities at
similar companies.

 

ARTICLE III  - 
Compensation, Bonuses and Equity Grants

 

3.01                           The
Corporation will pay Executive a base salary for the duties performed by him
hereunder, including all services rendered as an officer of the Corporation, at
a rate equal to two hundred seventy-five thousand dollars (US $275,000) per
annum (“Base Salary”), payable in

 

 

accordance with the
Corporation’s regular payroll practices, subject to customary withholding for
federal, state and local taxes. 
Executive’s Base Salary will be subject to periodic review in accordance
with the standard procedures of the Corporation.

 

3.02                           During
the Term of Employment, the Executive shall be eligible to receive an annual
discretionary cash bonus in an amount up to 75% of his Base Salary, as
determined by the Corporation’s Chief Executive Officer and Vice Chairman in
consultation with the Board of Directors of the Corporation, based upon the
Executive’s performance, the overall financial performance of the Company and
such other factors as the Corporation’s Chief Executive Officer and Vice
Chairman, in consultation with the Board of Directors of the Corporation, shall
deem reasonable and appropriate, to be paid in accordance with the Corporation’s
normal bonus payment procedures.  Notwithstanding
the foregoing, Executive’s annual bonus for calendar year 2005 shall be equal
to not less than $75,000.

 

3.03                           As soon
as practicable after the date hereof, the Corporation shall issue 50,000
non-qualified stock options (“Options”), or an economically equivalent
number of stock appreciation rights (“SARS”), to the Executive (the “Initial
Grant”).  Such Options and/or SARS
will vest over a five-year period.  The
Corporation shall gross-up Executive for the difference, if any, between the
tax consequences resulting from receiving said grant of SARS and the tax
consequences that would have resulted from the grant of the same number of
non-qualified stock options to Executive.

 

ARTICLE IV  - 
Other Employment Benefits

 

4.01                           Executive
will be entitled to four (4) weeks of vacation per year in accordance with the
Corporation’s policy, with no right of carry over,  to be taken in such increments and at such
times as shall not materially interfere with the Executive’s fulfillment of his
duties hereunder, and shall be mutually convenient for Executive and the
Corporation.

 

4.02                           Executive
shall be entitled to health insurance, life insurance, disability insurance and
other fringe benefits and perquisites, in each case to the extent generally
available to other senior executives of the Corporation that are based in the
Corporation’s New York office.  Beginning
on the date hereof and continuing until the date on which the Corporation has
executive level health insurance in effect for its executives based in New York
City, New York, the Corporation shall, upon Executive providing the Corporation
with evidence of the premiums he has paid for the health and dental insurance
maintained by his prior employer, reimburse Executive for an amount equal to the
full amount of said health and dental insurance premiums, in accordance with
and subject to the requirements of the Consolidated Omnibus Budget Reconciliation
Act of 1985 (COBRA).

 

4.03                           The
Corporation shall, in accordance with its standard policies in effect from time
to time, reimburse Executive for all reasonable out-of-pocket expenses actually
incurred by him in the conduct of the business of the Corporation, provided
that Executive submits appropriate substantiation of such expenses.

 

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ARTICLE V
- Termination

 

5.01         The
Corporation may terminate the employment of Executive hereunder, at any time
after the Commencement Date, for Cause, by written notice to Executive
describing the basis for such termination pursuant to this Section 5.01.  For purposes of this Agreement, “Cause”
means any of the following:

 

(a)                                  the
Executive’s failure or refusal to materially perform his duties and
responsibilities hereunder to the Corporation (other than any such failure
resulting from death,  or physical or
mental disability under Section 5.05 hereof), or abide by the reasonable
directives of the Board, the Chief Executive Officer or the Vice Chairman of
the Corporation, or any material breach by Executive of this Agreement, upon
written notice of same by the Corporation describing in reasonable detail the
breach asserted and stating that it constitutes notice pursuant to this Section 5.01,
which failure or breach, if capable of being cured, has not been cured within
20 days after such notice;

 

(b)                                 willful
and unauthorized misappropriation by Executive of funds or property of the
Corporation or any attempt by Executive to secure any personal profit related
to the business of the Corporation;

 

(c)                                  fraud,
gross negligence or willful misconduct on the part of Executive in the
performance of his duties as an employee or officer of the Corporation;

 

(d)                                 Executive’s
noncompliance with the Corporation’s policies against discrimination or
harassment, which noncompliance is not cured (if curable) within ten (10) days
after written notice to the Executive by the Corporation;

 

(e)                                  the
conviction in a court of law of, or entering a plea of guilty or no contest, to
any felony or any crime involving moral turpitude, dishonesty or theft;

 

(f)                                    the
commission in bad faith by the Executive of any act which materially injures or
could reasonably be expected to materially injure the reputation, business or
business relationships of the Corporation;

 

(g)                                 the
resignation by the Executive on his own initiative (other than for “Good Reason”
as defined in Section 5.03 hereof);

 

(h)                                 the
use of alcohol or illegal drugs, interfering with the performance of the
Executive’s obligations under this Agreement, continuing after written warning;

 

(j)                                         any
breach by Executive of any of the provisions of Article VI.

 

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Upon a termination for
Cause, the Corporation shall pay Executive his salary and benefits through the
date of termination of employment; and Executive shall receive no severance
upon a termination for Cause.

 

5.02                           The
Corporation shall have the right to terminate the employment of the Executive
without Cause, provided that the Corporation delivers a written notice of
termination (i) without Cause or (ii) for non-renewal, to the Executive setting
forth a date of termination.  If the
Corporation terminates the employment of Executive, without Cause prior to March 31,
2008, or if “Good Reason” (as defined in Section 5.03 below) has occurred,
then the Corporation shall pay to the Executive an amount equal to one-year
Base Salary in accordance with Section 3.01 of this Agreement.  The severance amounts described in this Section 5.02
shall be made during the course of the Restricted Period (as such term is
defined in Section 6.01 hereof) in accordance with the normal payroll
policies of the Corporation and Executive shall be under no duty to mitigate
damages.  The making of any severance
payments as provided in this Section 5.02 is conditioned upon the
Executive signing and not revoking a separation and release agreement (the “Separation
Agreement”) reasonably satisfactory to the Corporation. In the event the
Executive breaches any provisions of the Separation Agreement or any of the
provisions of Article VI hereunder, in addition to any other remedies at
law or in equity available to it, the Corporation may cease making any further
payments and providing any other benefits provided for hereunder, without
affecting its rights under this Agreement or the Separation Agreement.

 

5.03                           Executive
may terminate his employment hereunder for “Good Reason.”  For purposes of this Agreement, the term “Good
Reason” shall mean: (i) a reduction by the Corporation in Executive’s then
prevailing Base Salary; (ii) any material diminution of the level of
responsibility or authority of Executive; 
(iii) relocation of Executive’s principal office more than 20 miles
outside New York City, New York; or (iv) receipt by Executive, on or before February 1,
2008, of a notice of non-renewal of the Term of Employment beyond March 31,
2008 other than a termination for Cause; provided, that Executive
delivers a written notice to the Corporation within twenty (20) days of the
occurrence of such an event which specifically identifies the facts and
circumstances claimed by Executive to constitute Good Reason and the
Corporation has failed to cure such facts and circumstances within twenty (20)
days after receipt of such notice.

 

5.04                           In the
event of Executive’s death, the date of termination of Executive’s employment
shall be the date of Executive’s death, and the Corporation shall pay the
Executive’s estate only his salary and benefits through the date of termination
of employment. No discretionary bonus or incentive payments shall be made to
Executive with respect to the year in which the Term of Employment is
terminated due to Executive’s death.

 

5.05                           If
Executive is unable to perform his duties as a result of illness, physical or
mental incapacity ( all such causes being referred to herein as “Disability’)
in substantially the manner and to the extent required hereunder prior to the
commencement of such Disability, the Corporation shall continue to pay his
salary (less any salary continuation benefits paid to him for sick days taken in
accordance with the Corporation’s policies and less any salary continuation
benefits paid for unused vacation days to which he is entitled to under the
Corporation’s policy) while Executive is absent from work for such reasons, but
such payments shall not continue for

 

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more than 90 days
(whether continuous or not) during any twelve month period.  If Executive is absent from work for such
reasons for more than 90 days during any twelve month period, he shall be
deemed “Disabled” hereunder, and the Corporation may terminate his
employment for “Disability” as a result of such absence by advance
written notice to Executive describing the basis for such termination pursuant
to this Section 5.05, and the Corporation promptly shall pay Executive his
salary and benefits accrued through the date of termination.  No incentive payments shall be made to
Executive with respect to the year in which the Term of Employment is terminated
for Disability.

 

ARTICLE VI  -  Covenants;
Representations

 

6.01                           (a)  The
parties hereto agree that the covenants given in this Section 6.01 are
being given incident to the agreements and transactions described herein, and
that such covenants are being given for the benefit of the Corporation.  Accordingly, the Executive acknowledges (i)
that the business and the industry in which the Corporation competes is highly
competitive; (ii) that as a key executive of the Corporation he has
participated in and will continue to participate in the servicing of current
clients and/or the solicitation of prospective clients, through which, among
other things, the Executive has obtained and will continue to obtain knowledge
of the “know-how” and business practices of the Corporation, in which matters
the Corporation has a substantial proprietary interest; (iii) that his
employment hereunder requires the performance of services which are special,
unique, extraordinary and intellectual in character, and his position with the
Corporation places and placed him in a position of confidence and trust with
the clients and employees of the Corporation; and (iv) that his rendering of
services to the clients of the Corporation necessarily required and will
continue to require the disclosure to the Executive of confidential information
(as defined in Section 6.01 (b) hereof) of the Corporation.  In the course of the Executive’s employment
with the Corporation, the Executive has and will continue to develop a personal
relationship with the clients of the Corporation and a knowledge of those
clients’ affairs and requirements, and the relationship of the Corporation with
its established clientele will therefore be placed in the Executive’s hands in
confidence and trust.  The Executive
consequently agrees that it is a legitimate interest of the Corporation, and
reasonable and necessary for the protection of the confidential information,
goodwill and business of the Corporation, which is valuable to the Corporation,
that the Executive make the covenants contained herein and that the Corporation
would not have entered into this Agreement unless the covenants set forth in
this Section 6.01 were contained in this Agreement.  Accordingly, the Executive agrees that during
the period that he is employed by the Corporation and for a period of eighteen
(18) months thereafter (such period being referred to as the “Restricted Period”), he shall not, as an individual,
employee, officer, consultant, independent contractor, partner, shareholder, or
in association with any other person, business or enterprise, except on behalf
of the Corporation, directly or indirectly, and regardless of the reason for
his ceasing to be employed by the Corporation:

 

(i)                                     attempt
in any manner to solicit or accept from any client business of the type
performed by the Corporation or to persuade any client to cease to do business
or to reduce the amount of business which any such client has customarily done
or is reasonably expected to do with the Corporation, whether or not the
relationship between the Corporation and such client was originally established
in whole or in part through the Executive’s efforts; or

 

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(ii)                                  employ
as an employee or retain as a consultant any person, firm or entity who is then
or at any time during the preceding twelve months was an employee of or
exclusive consultant to the Corporation, or persuade or attempt to persuade any
employee of or exclusive consultant to the Corporation to leave the employ of
the Corporation or to become employed as an employee or retained as a
consultant by any person, firm or entity other than the Corporation; or

 

(iii)                               render
to or for any client any services of the type which are rendered by the
Corporation.

 

As used in this Section 6.01,
the term “Corporation” shall include any
subsidiaries of the Corporation and the term “client”
shall mean (1) anyone who is a client of the Corporation on the date of termination
of employment, or if the Executive’s employment shall not have terminated, at
the time of the alleged prohibited conduct (any such applicable date being
called the “Determination Date”); (2) anyone
who was a client of the Corporation at any time during the one (1) year period
immediately preceding the Determination Date; (3) any prospective client to
whom the Corporation had made a new business presentation (or similar offering
of services) at any time during the one (1) year period immediately preceding
the date of termination of employment; and (4) any prospective client to whom
the Corporation made a new business presentation (or similar offering of
services) at any time within one (1) year after the date of termination of
employment (but only if initial discussions between the Corporation and such
prospective client relating to the rendering of services occurred prior to the date
of termination of employment, and only if the Executive participated in or
supervised such discussions).  For
purposes of this clause, it is agreed that a general mailing or an incidental
contact shall not be deemed a “new business presentation or similar offering of
services” or a “discussion”. In addition, “client” shall also include any
clients of other companies operating within the Corporation’s affiliated
entities and/or subsidiaries to whom the Executive rendered services (including
supervisory services) at any time during the one (1) year period prior to the
Determination Date.  In addition, if the
client is part of a group of companies which conducts business through more
than one entity, division or operating unit, whether or not separately
incorporated (a “Client Group”), the term “client”
as used herein shall also include each entity, division and operating unit of
the Client Group where the same management group of the Client Group has the
decision making authority or significant influence with respect to contracting
for services of the type rendered by the Corporation.

 

(b)                                 In
the course of the Executive’s employment with the Corporation (and its
predecessor), he has acquired and will continue to acquire and have access to
confidential or proprietary information about the Corporation and/or its
clients, including but not limited to, trade secrets, methods, models,
passwords, access to computer files, financial information and records,
computer software programs, agreements and/or contracts between the Corporation
and its clients, client contacts, client preferences, creative policies and
ideas, advertising campaigns, creative and media materials, graphic design
materials, sales promotions and campaigns, sales presentation materials,
budgets, practices, concepts, strategies, methods of operation, financial or
business projections of the Corporation and information about or received from
clients and other companies with which the Corporation does business.  The foregoing shall

 

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be collectively referred
to as “confidential information”.  The Executive is aware that the confidential
information is not readily available to the public and accordingly, the
Executive also agrees that he will not at any time (whether during the Term of
Employment or after termination of this Agreement), disclose to anyone (other
than his counsel in the course of a dispute arising from the alleged disclosure
of confidential information or as required by law) any confidential
information, or utilize such confidential information for his own benefit, or
for the benefit of third parties.  The
Executive agrees that the foregoing restrictions shall apply whether or not any
such information is marked “confidential” and regardless of the form of the
information.  The term “confidential
information” does not include information which (i) is or becomes generally
available to the public other than by breach of this provision or (ii) the
Executive learns from a third party who is not under an obligation of
confidence to the Corporation or a client of the Corporation.  In the event that the Executive becomes
legally required to disclose any confidential information, he will provide the
Corporation with prompt notice thereof so that the Corporation may seek a
protective order or other appropriate remedy and/or waive compliance with the
provisions of this Section 6.01(b) to permit a particular disclosure.  In the event that such protective order or
other remedy is not obtained, or that the Corporation waives compliance with
the provisions of this Section 6.01(b) to permit a particular disclosure,
the Executive will furnish only that portion of the confidential information
which he is legally required to disclose and, at the Corporation’s expense,
will cooperate with the efforts of the Corporation to obtain a protective order
or other reliable assurance that confidential treatment will be accorded the
confidential information.  The Executive
further agrees that all memoranda, disks, files, notes, records or other
documents, whether in electronic form or hard copy (collectively, the “material”) compiled by him or made available to him during
his employment with the Corporation (whether or not the material constitutes or
contains confidential information), and in connection with the performance of
his duties hereunder, shall be the property of the Corporation and shall be
delivered to the Corporation on the termination of the Executive’s employment
with the Corporation or at any other time upon request.  Except in connection with the Executive’s
employment with the Corporation, the Executive agrees that he will not make or
retain copies or excerpts of the material.

 

(c)                                  If
the Executive commits a breach or is about to commit a breach, of any of the
provisions of Sections 6.01(a) or (b), the Corporation shall have the right to
have the provisions of this Agreement specifically enforced by the arbitrator
appointed under Article VIII hereof or by any court having equity
jurisdiction without being required to post bond or other security and without
having to prove the inadequacy of the available remedies at law, it being
acknowledged and agreed that any such breach or threatened breach will cause
irreparable injury to the Corporation and that money damages will not provide
an adequate remedy to the Corporation. 
In addition, the Corporation may take all such other actions and
remedies available to it under law or in equity and shall be entitled to such
damages as it can show it has sustained by reason of such breach.

 

(d)                                 The
parties acknowledge that (i) the type and periods of restriction imposed in the
provisions of Sections 6.01(a) and (b) are fair and reasonable and are
reasonably required in order to protect and maintain the proprietary interests
of the Corporation described above, other legitimate business interests and the
goodwill associated with the business of the Corporation; (ii) the time, scope,
geographic area and other provisions of this Section 6.01

 

7

 

have been specifically
negotiated by sophisticated commercial parties, represented by legal counsel,
and are given as an integral part of the transactions contemplated by this
Agreement; and (iii) because of the nature of the business engaged in by the
Corporation and the fact that clients can be and are serviced by the
Corporation wherever they are located, it is impractical and unreasonable to
place a geographic limitation on the agreements made by the Executive herein. The
Executive specifically acknowledges that his being restricted from soliciting
and servicing clients and prospective clients as contemplated by this Agreement
will not prevent him from being employed or earning a livelihood in the type of
business conducted by the Corporation. 
If any of the covenants contained in Section 6.01(a) or (b), or any
part thereof, is held to be unenforceable by reason of it extending for too
great a period of time or over too great a geographic area or by reason of it
being too extensive in any other respect, the parties agree (x) such covenant
shall be interpreted to extend only over the maximum period of time for which
it may be enforceable and/or over the maximum geographic areas as to which it
may be enforceable and/or over the maximum extent in all other respects as to
which it may be enforceable, all as determined by the court or arbitration
panel making such determination and (y) in its reduced form, such covenant
shall then be enforceable, but such reduced form of covenant shall only apply
with respect to the operation of such covenant in the particular jurisdiction
in or for which such adjudication is made. 
Each of the covenants and agreements contained in this Section 6.01
(collectively, the “Protective Covenants”)
is separate, distinct and severable.  All
rights, remedies and benefits expressly provided for in this Agreement are
cumulative and are not exclusive of any rights, remedies or benefits provided
for by law or in this Agreement, and the exercise of any remedy by a party
hereto shall not be deemed an election to the exclusion of any other remedy
(any such claim by the other party being hereby waived).  The existence of any claim, demand, action 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 each Protective Covenant. 
The unenforceability of any Protective Covenant shall not affect the
validity or enforceability of any other Protective Covenant or any other
provision or provisions of this Agreement.

 

(e)                                  Prior
to accepting employment with any person, firm or entity during the Restricted
Period, the Executive shall notify the prospective employer in writing of his
obligations pursuant to this Section 6.01 and shall simultaneously provide
a copy to the Corporation (it being agreed by the Corporation that such
notification required under this Section 6.01(e) shall not be deemed a
breach of the confidentiality provisions of this Agreement).

 

(f)                                    The
temporal duration of the covenants set forth in this Agreement shall not
expire, and shall be tolled, during any period in which the Executive is in
violation of any of the covenants set forth herein, and all restrictions shall
automatically be extended by the period of the Executive’s violation of any
such restrictions.

 

6.02                           During
the Term of Employment, the Executive will disclose to the Corporation all
ideas, inventions and business plans developed by him during such period which
relate directly or indirectly to the business of the Corporation, including
without limitation, any design, logo, slogan, advertising campaign or any
process, operation, product or improvement which may be patentable or
copyrightable. The Executive agrees that all patents, licenses, copyrights,
tradenames, trademarks, service marks, planning, marketing and/or creative
policies and ideas,

 

8

 

advertising campaigns,
promotional campaigns, media campaigns, budgets, practices, concepts,
strategies, methods of operation, financial or business projections, designs,
logos, slogans and business plans developed or created by the Executive in the
course of his employment hereunder, either individually or in collaboration
with others, will be deemed works for hire and the sole and absolute property
of the Corporation.  The Executive
agrees, that at the Corporation’s request and expense, he will take all steps
necessary to secure the rights thereto to the Corporation by patent, copyright
or otherwise.

 

6.03                           If at
the time of enforcement of any provision of this Agreement, a court shall hold
that the duration, scope or area restriction of any provision hereof is
unreasonable under circumstances now or then existing, the parties hereto agree
that the maximum duration, scope or area reasonable under the circumstances
shall be substituted by the court for the stated duration, scope or area.  Executive acknowledges that any breach or
threatened breach by him of the provisions of this Article of this
Agreement may cause irreparable harm to the Corporation and that a remedy at
law for any breach or attempted breach of any of the provisions of Article VI
of this Agreement will be inadequate, and agrees that the Corporation shall be
entitled to seek to exercise all remedies available to it, including specific
performance and injunctive and other equitable relief. The respective rights
and obligations of the parties hereunder shall survive the termination of the
Executive’s employment to the extent necessary to the intended preservation of
such rights and obligations; provided, however, the provisions of
Articles V, VI, VII and VIII hereof shall survive such termination.

 

6.04                           The
Executive represents and warrants that he is not subject to any agreement,
instrument, order, judgment or decree of any kind, or any other restrictive
agreement of any character, which would prevent him from entering into this
Agreement or which would be breached by the Executive upon his entering into,
or performance of his duties pursuant to, this Agreement.

 

6.05                           The
Executive agrees, both during the Term of Employment and thereafter, at the
request of the Corporation, to cooperate with the Corporation in connection
with any investigation of or legal action against the Corporation or any of its
affiliates.

 

ARTICLE VII  - 
Applicable Law; Notices, Counterparts

 

7.01                           This
Agreement represents the entire agreement between the Corporation and the
Executive with respect to the employment of Executive by the Corporation, and supersedes
all prior agreements, plans, and arrangements, whether oral or written, with
respect thereto. This Agreement may not be orally cancelled, changed, modified
or amended unless in writing and signed by the parties to this Agreement. This
Agreement shall be governed by and construed in accordance with the laws of the
State of New York without regard to any conflicts or conflict or laws
principles in the State of New York that would result in the application of the
law of any other jurisdiction.

 

7.02                           The
headings contained in this Agreement are for reference purposes only, and shall
not affect the meaning or interpretation of this Agreement. This Agreement may
be executed in two or more counterparts, each of which shall be deemed an
original and all of which

 

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shall constitute one and
the same instrument. The language contained in this Agreement will be deemed to
be the language chosen by the Corporation and the Executive to express their
mutual intent, and no rule of law or contract interpretation that provides that
in the case the ambiguity or uncertainty a provision should be construed
against the draftsman will be applied against any party hereto.

 

7.03                           The
failure of any party at any time to require performance by another party of any
provision hereunder shall in no way affect the right of that party thereafter
to enforce the same, nor shall it affect any other party’s right to enforce the
same, or to enforce any of the other provisions in this Agreement; nor shall
the waiver by any party of the breach of any provision hereof be taken or held
to be a waiver of any subsequent breach of such provision or as a waiver of the
provision itself.

 

7.04                           The
Corporation and the Executive agree that the Corporation shall have the right
to assign this Agreement, and, accordingly, this Agreement shall inure to the
benefit of, be binding upon and may be enforced by, any and all successors and
assigns of the Corporation, including, without limitation, by asset assignment,
stock sale, merger, consolidation or other corporate reorganization.  The Corporation and Executive agree that
Executive’s rights and obligations under this Agreement are personal to the
Executive, and the Executive shall not have the right to assign or otherwise
transfer his rights or obligations under this Agreement, and any purported
assignment or transfer shall be void and ineffective. The rights and
obligations of the Corporation hereunder shall be binding upon and run in favor
of the successors and assigns of the Corporation.

 

7.05                           All
notices 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, mailed by certified mail (return receipt requested) or sent by
overnight delivery service or facsimile transmission to the parties at the
following addresses or at such other addresses as shall be specified by the
parties by like notice

 

	
  If to Executive:

  	
   

  	
  Michael Sabatino

  
	
   

  	
   

  	
  5 Edwards Lane

  
	
   

  	
   

  	
  Glen Cove, NY 11542

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  if to the Corporation:

  	
   

  	
  MDC Partners, Inc.

  
	
   

  	
   

  	
  45 Hazelton Ave.

  
	
   

  	
   

  	
  Toronto, Ontario,
  Canada M5R 2E3

  
	
   

  	
   

  	
  Attn: General Counsel

  

 

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ARTICLE VIII
 -  Arbitration

 

8.01(a)                                                          The
parties hereto agree that any dispute, controversy or claim arising out of,
relating to, or in connection with this Agreement (including, without
limitation, any claim regarding or related to the interpretation, scope,
effect, enforcement, termination, extension, breach, legality, remedies and
other aspects of this Agreement or the conduct and communications of the
parties regarding this Agreement and the subject matter of this Agreement)
shall be settled by arbitration at the offices of Judicial Arbitration and
Mediation Services, Inc. or successor organization for binding arbitration in
New York, New York by a single arbitrator selected by the parties.  The arbitrator may grant injunctions or other
relief in such dispute or controversy. 
All awards of the arbitrator shall be binding and non-appealable.  Judgment upon the award of the arbitrator may
be entered in any court having jurisdiction. 
The arbitrator shall apply New York law to the merits of any dispute or
claims, without reference to the rules of conflicts of law applicable
therein.  Suits to compel or enjoin
arbitration or to determine the applicability or legality of arbitration shall
be brought in the United States District Court for the Southern District of New
York or if that court lacks jurisdiction, in a state court located within the
geographic boundaries thereof. 
Notwithstanding the foregoing, no party to this Agreement shall be
precluded from applying to a proper court for injunctive relief by reason of
the prior or subsequent commencement of an arbitration proceeding as herein
provided. No party or arbitrator shall disclose in whole or in part to any
other person, firm or entity any confidential information submitted in
connection with the arbitration proceedings, except to the extent reasonably
necessary to assist counsel in the arbitration or preparation for arbitration
of the dispute.  Confidential information
may be disclosed to (i) attorneys, (ii) parties, and (iii) outside experts
requested by either party’s counsel to furnish technical or expert services or
to give testimony at the arbitration proceedings, subject, in the case of such
experts, to execution of a legally binding written statement that such expert
is fully familiar with the terms of this provision, agree to comply with the
confidentiality terms of this provision, and will not use any confidential
information disclosed to such expert for personal or business advantage.

 

(b)                                  The
Executive has read and understands this Section 8.01.  The Executive understands that by signing
this Agreement, the Executive agrees to submit any claims arising out of,
relating to, or in connection with this Agreement, or the interpretation,
validity, construction, performance, breach or termination thereof, or his
employment or the termination thereof, to binding arbitration, and that this
arbitration provision constitutes a waiver of the Executive’s right to a jury
trial and relates to the resolution of all disputes relating to all aspects of
the employer/employee relationship, including but not limited to the following:

 

(i)                                    Any
and all claims for wrongful discharge of employment, breach of contract, both
express and implied; breach of the covenant of good faith and fair dealing,
both express and implied; negligent or intentional infliction of emotional
distress; negligent or intentional misrepresentation; negligent or intentional
interference with contract or prospective economic advantage; and defamation;

 

11

 

(ii)                                Any
and all claims for violation of any federal, state or municipal statute,
including, without limitation, Title VII of the Civil Rights Act of 1964, as
amended, the Civil Rights Act of 1991, the Equal Pay Act, the Employee
Retirement Income Security Act, as amended, the Age Discrimination in Employment
Act of 1967, the Americans with Disabilities Act of 1990, the Family and
Medical Leave Act of 1993, the Fair Labor Standards Act, the New York Human
Rights Law; and

 

(iii)                            Any
and all claims arising out of any other federal, state or local laws or
regulations relating to employment or employment discrimination.

 

 

[space
intentionally left blank]

 

12

 

(c)                                  To
the extent that any part of this Section 8.01 is found to be legally
unenforceable for any reason, that part shall be modified or deleted in such a
manner as to render this Section 8.01 (or the remainder of this Section 8.01)
legally enforceable and as to ensure that except as otherwise provided in
clause (a) of this Section 8.01, all conflicts between the Corporation and
the Executive shall be resolved by neutral, binding arbitration.  The remainder of this Section 8.01 shall
not be affected by any such modification or deletion but shall be construed as
severable and independent.  If a court
finds that the arbitration procedures of this Section 8.01 are not
absolutely binding, then the parties hereto intend any arbitration decision to
be fully admissible in evidence, given great weight by any finder of fact, and
treated as determinative to the maximum extent permitted by law.

 

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

 

 

	
   

  	
  MDC Partners, Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Steven Berns

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Steven Berns

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Executive Vice
  President and

  	
   

  
	
   

  	
   

  	
   

  	
  Vice Chairman

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/ Michael Sabatino

  	
   

  
	
   

  	
   

  	
  Michael Sabatino

  
									

 

13EXHIBIT
10.7

 

EMPLOYMENT
AGREEMENT

 

THIS EMPLOYMENT
AGREEMENT (this “Agreement”),
effective as of the 1st day of November 2004 (the “Effective Date”), by and between Precis,
Inc. (the “Company”), an Oklahoma
corporation, and Robert L. Bintliff, an individual (the “Executive”) (the Company and the Executive
are collectively referred to as the “parties”
or are individually referred to as the “party”).

 

RECITALS

 

WHEREAS,
the Company deems the services of the Executive to be of great and unique value
to the business of the Company and the Company desires to assure both itself of
continuity of management and the Executive of continued employment; and

 

WHEREAS,
the Executive is a key management employee of the Company and is presently
making and is expected to continue making substantial contributions to the
Company; and

 

WHEREAS,
it is in the best interests of the Company and its shareholders to induce the
Executive to remain in the employ of the Company; and

 

WHEREAS,
the Company desires to induce the Executive to remain in the employ of the
Company by providing to the Executive additional amounts of compensation and
severance benefits; and

 

WHEREAS,
the Executive is willing to remain in the employ to the Company in accordance
with and subject to the terms and conditions set forth in this Agreement.

 

NOW, THEREFORE,
in consideration of the mutual covenants hereinafter set forth and for good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Executive and the Company hereby agree as follows:

 

1.                                      Term.  The Company shall employ the Executive for a
period of three years commencing on the date hereof (the “Initial Term”), unless such employment
shall be terminated earlier as provided in this Agreement.  The employment of the Executive shall
continue after the Initial Term for successive periods of one year duration
(the “Extended Term”) on the same
terms and conditions contained herein, until terminated in accordance with the
terms of this Agreement.

 

2.                                      Nature
of Services; Employment; Duties; Employment Evaluations.

 

2.1                               Executive
Services.  The Company hereby employs
the Executive for the Term as the Executive Vice President and Chief Financial
Officer of the Company.  The Executive
shall perform reasonable services in a timely and satisfactory fashion, to the
best of the Executive’s ability and effort, as may, from time to time, be
prescribed and directed by the Chief Executive Officer (“CEO”), and/or the
Board of Directors of the Company (“the “Board”), or such other individual(s)
designated by the CEO and/or the Board. 
The Executive hereby accepts employment and agrees to devote the
Executive’s entire business time, attention and energies in performing such
duties and undertaking such responsibilities as are customarily performed by
others holding executive officer positions similar to that held by and assigned
to the Executive in similar businesses, subject to the general and customary
supervision of the Company’s CEO and/or the Board.

 

2.2                               Compliance
with Policies and Code of Conduct. 
At all times during the Executive’s employment, the Executive agrees to
serve the Company fully, diligently and competently, and to the best of the
Executive’s ability, experience and talent, to strictly adhere to, sign,
acknowledge, and obey all rules, regulations,

 

 

handbooks, covenants and, policies and code of conduct of the Company,
now in effect and as may be adopted, modified, expanded or contracted from time
to time.

 

2.3                               Place
of Performance; Support Facilities. 
The principal places of employment of the Executive shall be at the
Company’s principal executive offices in Grand Prairie, Texas or within the
Dallas/Fort. Worth metropolitan area.  In
performing the duties and fulfilling the responsibilities to be performed and
fulfilled by the Executive under this Agreement, the Executive shall be
provided with reasonable facilities, services, and support.  The Executive will be required to maintain a
residence in the Dallas/Fort Worth metropolitan area.

 

2.4                               Devotion
of Full Time and Attention; Conflicts of Interest.  At all time during the Executive’s
employment, the Executive agrees, to devote the Executive’s best efforts, time,
attention and energies to the performance of the duties and responsibilities
assigned to the Executive pursuant to this Agreement or otherwise.  Executive acknowledges and agrees that
Executive owes a fiduciary duty of loyalty, fidelity and allegiance to act at
all times in the best interests of the Company and its stockholders, and to do
no act that would injure the Company’s business, its interests, or its
reputation.  It is agreed that any direct
or indirect interest in, connection with, or benefit from any outside
activities, particularly commercial activities, which interest might in any way
adversely affect the Company or any of its Affiliates, involves a possible
conflict of interest.  In keeping with
the Executive’s fiduciary duties to the Company and its stockholders, Executive
agrees that Executive will not knowingly become involved in a conflict of
interest with the Company or its Affiliates, or upon discovery thereof, allow
such a conflict to continue.  Moreover,
Executive agrees that Executive shall disclose to or discuss with the Company’s
General Counsel any facts or circumstances that might involve such a conflict
of interest that has not been disclosed in writing to and approved by the
Company’s Board of Directors.  The
Executive shall not, without the prior written disclosure to and consent of the
Company’s Board of Directors, directly or indirectly, render services of a
business, professional or commercial nature to or for the Executive’s own
account or any other person, firm or entity that engages in any other business
or activity, whether or not competitive with that of the Company or any
Affiliate of the Company.

 

2.5                               Resolution
of Conflicts of Interest.  The
Executive and the Company recognize that it is difficult and practically
impossible to provide an exhaustive list of actions or interests that
constitute a “conflict of interest.” Moreover, the Executive and the Company
recognize that there are many borderline situations.  In some instances, full disclosure of facts
by the Executive to the Company’s General Counsel may be all that is necessary
to enable Company or its Affiliate to protect its interests.  In other instances, if no improper motivation
appears to exist and the interests of the Company or its Affiliate have not
suffered, prompt elimination of the outside interest causing the conflict of
interest will suffice.  In still others,
it may be necessary for the Company to terminate the employment
relationship.  The Company and Executive
agree that the Company’s Board of Director’s determination of whether a
conflict of interest exists will be conclusive. 
Notwithstanding the foregoing, the Company reserves the right to take
such action as, in its judgment, will end the conflict.  The Company’s termination of the employment
relationship solely because the Executive violates this Section 2.5 shall
be a Voluntary Termination for purposes of this Agreement.

 

2.6                               Annual
Review.  On or about the first day of
January, 2006, and on or about the last day of each year thereafter during the
Initial Term, the Compensation Committee of Company’s Board of Directors shall
evaluate the performance of the Executive under and consistent with this
Agreement and the Company’s objectives, plans, and expectations and, in that
connection, meet and discuss with the Executive any such evaluation of the
services performed by the Executive under this Agreement and consistent with
the Company’s objectives, plans, and expectations..

 

2.7                               Affiliate
Office and Director Positions. 
During the Term, the Executive may be nominated for election or
appointed to serve as a director or officer of the Company’s subsidiaries as
determined in the sole discretion of the Company’s Board of Directors.

 

 

3.                                      Compensation.  The Executive shall be entitled to
compensation for any and all services performed under this Agreement except as
may be otherwise agreed to in writing, by the parties, at a rate of $180,000,
per year exclusive of any directors fees that the Executive may be entitled for
services as a director of the Company or any of its subsidiaries or
Affiliates), payable in semi-monthly installments in arrears, in cash or cash
equivalents in each month that this Agreement is in effect (the “Base Salary”), less, in any case, any
deductions or withholdings required by law. 
The Base Salary, in the event that this Agreement is not terminated,
shall be reviewed at least annually and may be increased consistent with
general salary increases for the Company’s executive employees or as
appropriate in light of the performance of the Company or the Executive.

 

4.                                      Other
Benefits, Bonus and Incentive Compensation.

 

4.1                               Annual
Incentive Bonus.  During the
Executive’s employment with the Company, the Executive shall be eligible for an
annual bonus (in each case, the “Bonus”)
in accordance with the terms of the Company’s Annual Incentive Plan or any
appropriate replacement bonus plan of the Company, each as may be amended from
time to time, which Bonus may be paid in any combination of cash or the Company’s
common stock. The Executive’s entitlement to a Bonus, the amount of the Bonus,
and the manner of payment of the Bonus are within the sole and exclusive
discretion of the Compensation Committee of the Company’s Board of
Directors.  The Executive’s bonus may be
prorated for any portion of the calendar year that the Executive was employed
under this Agreement.

 

The Bonus, if any is awarded, will be payable
less applicable deductions and required withholdings to Federal, state, and
local taxing authorities.

 

In the event that acquisitions outside the
ordinary course of business of the Company are made, directly or indirectly, by
the Company during the Term, the Bonus shall be determined as if such
acquisitions had not taken place or, alternatively, the Bonus shall be adjusted
by the Company’s Compensation Committee in its sole and exclusive discretion.

 

4.2                               Expense
Reimbursement.  The Company shall
reimburse the Executive for all reasonable expenses incurred by the Executive
in the performance of the Executive’s duties under this Agreement in the course
of employment; provided, however, that the Executive must furnish to the
Company an itemized account, satisfactory to the Company, in substantiation of
such expenditures.

 

4.3                               Fringe
Benefits; Plan Participation.  The
Executive shall be entitled to such fringe benefits as may be provided or
established from time to time by the Company to other senior officers of the
Company, including, but not limited to, medical and insurance benefits and
401(k) and medical savings account plans. 
The Executive shall be eligible to participate, in accordance with the
terms of such plans as they may be adopted, amended and administered from
time-to-time, in incentive, bonus, benefit or similar plans, including without
limitation the Company’s 1999 Stock Option Plan, any other stock option, bonus
or other equity ownership plan in which employees are eligible to participate,
any incentive bonus plan and any other bonus, pension or profit sharing plans
established and maintained by the Company. 
The Executive’s participation in such plans shall be at such levels of
participation as the Compensation Committee may determine in its reasonable
discretion based upon the Executive’s responsibilities and performance and,
when applicable, the Company’s past compensation practices.  Compensation and other benefits granted under
such plans will be subject to the actual provisions and conditions applicable
to such plans.  The Company shall not by
reason of this Agreement be obligated to institute, establish, maintain, or
refrain from changing, amending, or discontinuing, any such incentive
compensation or employee benefit program or plan, so long as such actions are
similarly applicable to employees eligible generally to participate or receive
benefits under the program or plan.

 

4.4                               Company
Automobile.  During the Terms, the
Company shall provide one automobile for the Executive’s business and personal
use, or at the Company’s sole and exclusive discretion an automobile allowance
of $650 per month.  The automobile will
be a new automobile as of the Effective Date and will be

 

 

replaced after three years of use. 
The Executive reserves the right to purchase the automobile from the
Company at the end of the three year period at the then net book value as
defined under generally accepted accounting principles.  The automobile will be selected by the
Executive, subject to approval by the Compensation Committee of the Company’s
Board of Directors, which approval will not be unreasonably withheld.  The Company will provide without cost to the
Executive insurance as required by applicable state law on this one automobile.

 

4.5                               Vacation
and Leave; Holidays.  During the
Executive’s employment by the Company, Executive shall be entitled to take
reasonable periods of time off with pay (“PTO”), at the Executive’s Base Salary
at the time such PTO is taken, during each calendar year commensurate with
Executive’s executive office position or positions with the Company, in
accordance with Company policy; provided that in no event shall the amount of
PTO taken exceed more than four weeks in any calendar year.  Any PTO not used during a calendar year will
not accumulate to following periods.  The
Executive is not entitled to elect vacation compensation for any unused
vacation.

 

5.                                      No
Additional Compensation or Benefits; Unsecured Benefits; Withholdings.  Except as provided in Sections 3 and 4 or as
otherwise determined by the Compensation Committee of the Company’s Board of
Directors, the Executive shall not be entitled to any other or further
compensation or benefits (including any insurance benefits) from the Company as
a result of the services to be performed under and pursuant to this Agreement
or otherwise.  None of the benefits or
arrangements described in this Agreement shall be secured or funded in any way,
and each shall instead constitute an unfunded and unsecured promise to pay
money in the future exclusively from the general assets of the Company.  The Company may make deductions and withhold
from any compensation, benefits, or amounts payable under this Agreement all
federal, state, city, or other taxes as may be required pursuant to any law or
governmental regulation or ruling.

 

6.                                      Termination
Prior to Expiration of Term and Effects of such Termination.

 

6.1.                            Company’s
Right of Termination. 
Notwithstanding any other provisions of this Agreement, the Company
shall have the right to terminate the Executive’s employment under this
Agreement at any time prior to the expiration of the Initial or Extended Term
for any of the following reasons:

 

6.1.1                     For Cause
Termination.  For “Cause” upon the
determination by the Company’s Board of Directors that “Cause” exists for the
termination of the employment relationship with the Executive.  As used in this Agreement, the term “Cause” shall mean

 

(a) the Executive has been convicted of a
felony (which, through lapse of time or otherwise, is not subject to appeal);
or

 

(b) the Executive has without proper legal
reason, failed to perform the duties and responsibilities required of the
Executive under this Agreement or otherwise which remains uncorrected for 30
Days following written notice to the Executive by the Company of such failure;
or

 

(c) the Executive has willfully engaged in
conduct that the Executive knows or should know is materially injurious to the
Company or any of its subsidiaries or has violated the terms of the Company’s
Code of Conduct; or

 

(d) the Executive violates the Foreign
Corrupt Practices Act or other applicable United States law including, but not
limited to, those proscribed by Section 7.

 

It is expressly acknowledged and agreed by
the parties that the decision of whether “Cause” exists for termination of the
employment relationship with the Executive by the Company is

 

 

solely with the exclusive determination of
the Company’s Board of Directors.  If the
Executive disagrees with the decision reached by the Company’s Board of
Directors, the dispute will be limited to whether the Company’s Board of
Directors reached its decision in good faith.

 

6.1.2                     Without Cause
Termination.  Following 30 Days
advance written notice, for any other reason whatsoever, with or without “Cause,”
in the sole discretion of the Company’s Board of Directors.

 

6.1.3                     Death.  Upon the Executive’s death.

 

6.1.4                     Disability.  Upon the Executive becoming “Disabled”.  The term “Disabled” as used in this Agreement
shall mean, in the event a disability insurance policy is provided or paid for
by the Company covering the Executive at such time and is in full force and
effect, the definition of permanent disability set forth in such policy.  If no such disability policy is so maintained
at such time and is not then in full force and effect, the term “Disabled”
shall mean the inability of the Executive, as determined in the sole judgment
of the Company’s Board of Directors, by reason of physical or mental disability
to perform the duties required of the Executive under this Agreement for a
period of 120 Days in any one-year period. 
Successive periods of disability will be considered separate periods
unless the later period of disability is due to the same or related cause and
commences less than three months from the ending of the previous period of
disability.  Upon such determination, the
Company may terminate the Executive’s employment under this Agreement upon 10
Days’ prior written notice.  If any
determination of the Company with respect to Disability is disputed by the
Executive, the parties hereto agree to abide by the decision of a panel of
three physicians.  The Executive and
Company shall each appoint one member, and the third member of the panel shall
be appointed by the other two members. 
The Executive agrees to be available for and submit to examinations by
such physicians as may be directed by the Company.  Failure to submit to any such examination may
be treated by the Company as an admission by the Executive of Disability.

 

6.1.5                     Change of
Control. The occurrence of a “Change of Control.”  For purposes of this Agreement, the phrase “Change
of Control” shall mean:

 

(i) a change in control of the direction and
administration of the Company’s business of a nature that would be required to
be reported in response to Item 6(e) of Schedule 14A of Regulation 14A (or
any successor rule or regulation) promulgated under the Securities Exchange of
1934, as amended (the “Exchange Act”),
whether or not the Company is then subject to such reporting requirement; or

 

(ii) any “person”
(as such term is used in Sections 13(d) and 14(d)(2) of the Exchange Act but
excluding any employee benefit plan of the Company) is or becomes the “beneficial
owner” (as defined in Rule 3d-3 under the Exchange Act), directly or
indirectly, of securities of the Company representing 50% or more of the
combined voting power of the Company’s outstanding securities then entitled
ordinarily (and apart from rights accruing under special circumstances) to vote
for the election of directors of the Company; or

 

(iii) during any period of 2 consecutive
years, the individuals who at the beginning of such period constitute the Board
of Directors or any individuals who would be 
continuing directors (as defined below, the “Continuing Directors”) cease for any reason to constitute at
least a majority of the Board of Directors; or

 

 

(iv) the Board of Directors approves a sale
of all or substantially all of the assets of the Company; or

 

(v) the Board of Directors approves any
merger, consolidation or like business combination or reorganization of the
Company, the consummation of which would result in the occurrence of any event
described in clause (ii) or (iii) of this Section 6.1.5.

 

For purposes of this Agreement, “Continuing Directors” shall mean (i) the
directors of the Company in office on the date of this Agreement, (ii) any
successor to any director in office on the date of this Agreement, and (iii)
any additional director who after the date of this Agreement (a) was nominated
or selected by a majority of the Continuing Directors in office at the time of
his or her nomination or selection and (b) at the time of his or her nomination
or selection is not an “affiliate”
or “associate” (as defined in
Regulation 12B under the Exchange Act) of any person who is the “beneficial owner” (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of securities representing ten
percent (10%) or more of the combined voting power of the Company’s securities
then entitled ordinarily to vote for the election of directors of the Company.]

 

The termination of the Executive’s employment by the Company prior to
the expiration of the Initial or Extended Term shall constitute a “Termination
for Cause” if made pursuant to Section 6.1.1; the effect of such
termination is specified in Section 6.4. 
The termination of the Executive’s employment by the Company prior to
the expiration of the Initial or Extended Term shall constitute an “Involuntary
Termination” if made pursuant to Section 6.1.2 or Section 6.1.5; the
effect of such termination is specified in Section 6.5. The effect of the
employment relationship being terminated pursuant to Section 6.1.3 as a
result of the Executive’s death is specified in Section 6.6. The effect of
the employment relationship being terminated pursuant to Section 6.1.4 as
a result of the Executive becoming Disabled is specified in Section 6.7.

 

6.2.                            The
Executive’s Right of Termination. 
Notwithstanding any other provisions of this Agreement, the Executive
shall have the right to terminate the employment relationship under this
Agreement at any time prior to the expiration of the Initial or Extended Term
following 30 Days’ advance written notice for any of the following reasons:

 

6.2.1                     Relocation.  The Executive is required by the Company to
be permanently relocated to a city more than 50 miles from the Dallas / Fort
Worth, Texas metropolitan area, and within 60 Days after such relocation, the
Executive provides the Company with a written notice that such relocation has
occurred and that the Executive intends to terminate the employment
relationship under this Section 6.2.1, and thereafter such relocation is
not corrected by the Company within 30 Days.

 

6.2.2                     The Company’s
Breach.  Any material breach by the
Company of any material provision of this Agreement that remains uncorrected
for 30 Days following receipt of written notice of such breach by the Executive
to the Company.

 

6.2.3                     The Executive’s
Election to Terminate.  For any other
reason whatsoever other than pursuant to Section 6.2.1 or 6.2.2, in the
sole discretion of the Executive.

 

6.2.4                     Change of
Control.  The occurrence of a Change
of Control.

 

The termination of the Executive’s employment by the Executive prior to
the expiration of the Term shall constitute an “Involuntary Termination” if
made pursuant to Sections 6.2.1, 6.2.2 or 6.2.4; the effect of such termination
is specified in Section 6.5.  The
termination of the Executive’s employment by the Executive prior to the
expiration of the Term shall constitute a “Voluntary Termination” if made
pursuant to Section 6.2.3; the effect of such termination is specified in Section 6.3.

 

 

6.3.                            The
Executive’s Voluntary Termination. 
Upon a “Voluntary Termination” of the employment relationship by the
Executive prior to expiration of the Term, all future compensation to which the
Executive is entitled and all future benefits for which the Executive is
eligible shall cease and terminate as of the date of termination.  The Executive shall be entitled to the Base
Salary on a pro rata basis through the date of such termination, but the
Executive shall not be entitled to any Bonus or other incentive compensation
not yet paid at the date of such termination. 
The effect and consequences of the Executive’s Voluntary Termination
under this Agreement shall be independent of the Executive’s rights under any
stock option agreement or plan or employee benefit award agreement.

 

6.4                               Termination
for Cause.  Upon a “Termination for
Cause” of the Executive’s employment relationship by the Company prior to
expiration of the Term, all future compensation to which the Executive is
entitled and all future benefits for which the Executive is eligible shall
cease and terminate as of the date of termination.  The Executive shall be entitled to the Base
Salary on a pro rata basis through the date of such termination, but the
Executive shall not be entitled to any Bonus or other incentive compensation
not yet paid at the date of such termination. upon termination of the
employment relationship for Cause, all of the Executive’s unvested interests
under any stock option agreement or plan or employee benefit award agreement
shall be canceled effective as of the date of such termination of employment
and the Executive shall not be entitled to any compensation or benefits
thereunder from and after the date of such termination of employment.

 

6.5.                            Involuntary
Termination.  Upon an Involuntary
Termination of the employment relationship by either the Company or the
Executive prior to expiration of the Term, the Executive shall be entitled, in
consideration  for the Executive’s
continuing obligations under this Agreement after such termination (including,
without limitation, the Executive’s non-competition obligations), to
receive  the compensation and benefits
provided for in Sections 3 and 4 as if the Executive’s employment (which shall
cease on the date of such Involuntary Termination) had continued for the full
Initial or Extended Term, as is the case. As provided for in Sections 3 and 4,
under all circumstances and as a minimum, the Executive is entitled to
Compensation equal to 18 months of Base Salary then in effect.  In addition, , the Executive will be entitled
to the Company’s then current benefit plans and/or policies, which may include
health, medical, dental, disability, and life insurance, comparable to those
provided to the executive officers of the Company either as a group or
individually as of the date of termination for a period of 18 months.  In the event that the Company elects to pay
the Executive in a lump sum for future payments, such lump sum shall be
discounted to its present value.  The
Executive shall not be under any duty or obligation to seek or accept other
employment following Involuntary Termination and, subject to the Executive complying
with the Executive’s continuing obligations (including non-competition
obligations), the amounts due the Executive hereunder shall not be reduced or
suspended if the Executive accepts subsequent employment.  The Executive’s rights under this Section 6.5
are the Executive’s sole and exclusive rights against the Company or its
Affiliates, and the Company’s sole and exclusive liability to the Executive
under this Agreement, in contract, tort, or otherwise, for any Involuntary
Termination of the employment relationship. 
The Executive covenants not to sue or lodge any claim, demand, or cause
of action against the Company based on Involuntary Termination for any
compensation and benefit the Executive shall be entitled to receive pursuant to
this Section 6.5.  If the Executive
breaches this covenant, the Company shall be entitled to recover from the
Executive all sums expended by the Company (including costs and attorneys fees)
in connection with such suit, claim, demand, or cause of action.  Upon Involuntary Termination of the
employment relationship by either the Company or the Executive, the entirety of
the Executive’s unvested rights under any stock option agreement or plan or
employee benefit award agreement shall vest immediately upon such termination.

 

6.6.                            Termination
Caused by Death.  Upon termination of
the employment relationship as a result of the Executive’s death, the Executive’s
heirs, administrators, or legatees shall be entitled to the Executive’s pro
rata Base Salary through the date of such termination, but the Executive’s
heirs, administrators, or legatees shall not be entitled to any individual
Bonus or incentive compensation not yet paid to the Executive at the date of
such termination.  Upon the Executive’s
death, the Executive’s heirs, administrators, or legatees shall be entitled
only to the compensation and benefits to which the Executive is entitled under
the terms and conditions of any

 

 

stock option agreement or plan or employee benefit award agreement that
the Executive has at the date of death or as a result of the Executive’s death.

 

6.7.                            Termination
Caused by Disability.

 

In the event of the Disability of the Executive and termination of the
Executive’s employment termination, the Executive shall be entitled to receive
the Base Salary plus any Bonus earned but not yet paid, less any cash benefits
received by the Executive under any disability insurance paid for by the
Company.  All of the Executive’s other
rights under this Agreement shall terminate. 
Provided, however, that during any period from the date of the commencement
of the period that the Executive is absent from work due disability and until
commencement of the Executive’s receipt of payments of the monthly disability
benefits under any disability policy maintained by the Company, the Executive
shall continue to be entitled to receive and the Company shall pay and provide
compensation and benefits under and in accordance with Section 3 and 4
during the remaining and unexpired portion of the Term.]

 

6.8.                            Offsets.  In all cases, the compensation and benefits
payable to the Executive under this Agreement upon termination of the
employment relationship shall be offset against any amounts to which the
Executive may otherwise be entitled under any and all severance plans and
policies of the Company or its Affiliates.

 

6.9.                            Continuing
Obligations.  Termination of the
employment relationship shall not terminate the Executive’s obligations imposed
by this Agreement that are continuing obligations, including, without
limitation, the Executive’s obligations under Sections 8 through 11.

 

6.10.                     Deductibility
of Severance Compensation. 
Notwithstanding anything in this Agreement to the contrary, no more than
sixty (60) Days after the effective date of the Executive’s termination causing
payment of termination or severance benefits under this Agreement or otherwise,
the Company shall calculate the amount of any “parachute payment” within the meaning of Section 280G of
the Internal Revenue Code of 1986, as amended (the “Code”). If any part of the termination or severance benefits provided
pursuant to this Agreement would not be deductible due to the provisions of Section 280G
of the Code, the termination or severance benefits shall be reduced to the
extent, but only to the extent, necessary so that the amount of the termination
or severance benefits provided hereunder will be deductible by the Company.

 

6.11.                     Responsibility
for Taxes.  The Executive agrees to
pay taxes, if any, which are required by law to be paid with respect to the
amounts the Executive receives pursuant to this Agreement.  The Executive warrants that the Company has
not made any representations about the tax consequences of this Agreement, and
the Executive has not relied upon any such representations in entering into
this Agreement.

 

7.                                      United
States Foreign Corrupt Practices Act, Securities Laws and Other Laws.  The Executive shall at all times comply with
United States laws applicable to the Executive’s actions on behalf of the
Company, including specifically, without limitation, the United States Foreign
Corrupt Practices Act, as amended (FCPA), the Securities Act of 1933, as
amended (the “Securities Act”), and the Securities Exchange Act of 1934, as
amended (the “Exchange Act”) and their successor statutes.  If the Executive pleads guilty to or nolo
contendere or admits civil or criminal liability under the FCPA, the Securities
Act or Exchange Act, or if a court finds that the Executive has personal civil
or criminal liability under the FCPA, the Securities Act or Exchange Act, or if
a court finds that the Executive personally committed an action resulting in
any Company entity having civil or criminal liability or responsibility under
the FCPA, the Securities Act or Exchange Act with knowledge of the activities
giving rise to such liability or knowledge of facts from which the Executive
should have reasonably inferred the activities giving rise to liability had
occurred or were likely to occur, such action or finding shall constitute Cause
for termination under this Agreement unless (i) such action or finding was
based on the activities of others and the Executive had no personal involvement
or knowledge of such activities, or (ii) the Company’s Board of Directors
determines in its sole and exclusive discretion that the actions found to be in

 

 

violation of the FCPA, the Securities Act or Exchange Act were taken in
good faith and in compliance with all applicable policies of the Company.

 

8.                                      Ownership
and Protection of Information; Copyrights.

 

8.1.                            Access
to Proprietary Information.  The
Company shall disclose to the Executive, or place the Executive in a position
to have access to, develop, or acquire knowledge of, trade secrets or
confidential and/or proprietary information of the Company or its Affiliates;
and/or shall entrust the Executive with business opportunities of the Company
or its Affiliates; and/or shall place the Executive in a position to develop
business good will on behalf of the Company or its Affiliates.

 

8.2.                            Ownership
of Information.  All information,
ideas, concepts, processes, programs, systems, methods, formulae, techniques,
improvements, discoveries, contributions and inventions, whether patentable or
not, which are conceived, made, developed, discovered or acquired by the
Executive, individually or in conjunction with others, during the Executive’s
course of employment with the Company (whether during business hours or
otherwise and whether on the Company’s premises or otherwise) that relate to
the Company’s business, products or services (including, without limitation,
all such information relating to corporate opportunities, research, financial
and sales data, pricing and trading terms, evaluations, opinions,
interpretations, acquisition prospects, the identity of customers or their
requirements, the identity of key contacts within the customer’s organizations
or within the organization of acquisition prospects, or marketing and
merchandising techniques, prospective names, and marks) shall be disclosed to
the Company and are and shall be the sole and exclusive property of the
Company.  Moreover, all documents,
drawings, memoranda, notes, records, files, correspondence, manuals, models,
specifications, computer programs, e-mail, voice mail, electronic databases,
maps and all other writings or materials of any type embodying any of such information,
ideas, concepts, improvements, discoveries, inventions, and such works in
progress, created in the course of employment are and shall be the sole and
exclusive property of the Company.

 

8.3.                            Intellectual
Property Development.  If, during the
Executive’s employment by the Company, the Executive creates any original work
of authorship or work in progress which is the subject matter of copyright
(such as videotapes, written presentations on acquisitions, computer programs,
drawings, maps, architectural renditions, models, manuals, brochures, or the
like), trademark, and/or patent relating to the Executive’s business, products,
or services, whether such work is created solely by the Executive or jointly
with others (whether during business hours or otherwise and whether on the
Employer’s premises or otherwise), the Executive shall disclose such work to
the Company.  The Company shall be deemed
the author of such work if the work is prepared by the Executive in the scope
of the Executive’s employment; or, if the work is not prepared by the Executive
within the scope of the Executive’s employment but is specially ordered by the
Company as a contribution to a collective work, as a part of an audio-visual
work, as a translation, as a supplementary work, as a compilation, or as an
instructional text, then the work shall be considered to be work made for hire
and the Company shall be the author of the work.  If such work relating to the Company’s
business is neither prepared by the Executive within the scope of the Executive’s
employment nor a work specially ordered and is deemed to be a work made for
hire, then the Executive hereby agrees to assign, and by these presents does
assign, to the Company all of the Executive’s worldwide right, title, and
interest in and to such work and all rights of copyright, trademark, and patent
therein.  If such work has no relation to
the Company’s business, then any such title and rights related thereto will
belong to the Executive.

 

8.4.                            Non-disclosure.  The Executive acknowledges that the business
of the Company and its Affiliates is highly competitive and that their
strategies, methods, books, records, and documents, their technical information
concerning their products, equipment, services, and processes, procurement
procedures and pricing techniques, the names of and other information (such as
credit and financial data) concerning their customers and business Affiliates,
all comprise confidential business information and trade secrets which are
valuable, special, and unique assets that the Company or its Affiliates use in
their business to obtain a competitive advantage over their competitors.  The Executive further acknowledges that
protection of such confidential business information

 

 

and trade secrets against unauthorized disclosure and use is of
critical importance to the Company and its Affiliates in maintaining their
competitive position. The Executive hereby agrees that the Executive will not,
at any time during or after his or her employment by the Company, make any unauthorized
disclosure of any confidential business information or trade secrets of the
Company or its Affiliates, or make any use thereof, except in the carrying out
of the Executive’s employment responsibilities under this Agreement; provided,
however, that these restrictions shall not apply to (i) such portions of any
information treated as confidential information or trade secrets by the Company
or its Affiliates that in fact become publicly available other than through the
action of the Executive, or (ii) such portions of information which, although
it was treated as confidential or a trade secret at the time of its creation,
is no longer confidential or a trade secret at the time of termination of the
Executive’s employment by the Company as long as a reason why such information
is no longer confidential or a trade secret is not due to any acts or omissions
of the Executive, and provided further that such restrictions shall not apply
to the portions of such information that is part of the Executive’s general
business knowledge or experience.  The
Company’s Affiliates shall be third party beneficiaries of the Executive’s
obligations under this Section 8. 
As a result of the Executive’s employment by the Company, the Executive
may also from time to time have access to, or knowledge of, confidential
business information or trade secrets of third parties, such as customers,
suppliers, partners, joint venturers, and the like, of the Company and its
Affiliates.  The Executive also agrees to
preserve and protect the confidentiality of such third party confidential
information and trade secrets to the same extent, and on the same basis, as the
Company has agreed to protect and preserve such third party confidential
information and trade secrets.  These
obligations of confidence apply irrespective of whether the information has
been reduced to a tangible medium of expression (e.g., is only maintained in
the minds of Company’s employees) and, if it has been reduced to a tangible
medium, irrespective of the form or medium in which the information is embodied
(e.g., documents, drawings, memoranda, notes, records, files, correspondence,
manuals, models, specifications, computer programs, e-mail, voice mail,
electronic databases, maps and all other writings or materials of any type).

 

8.5.                            Information
and Property Re-delivery Upon Termination. 
Upon termination of the Executive’s employment with the Company, for any
reason, the Executive promptly shall deliver to the Company all of the Company’s
property issued to the Executive and written materials, records, videotape,
computer programs, drawings, maps, architectural renditions, models, manuals,
brochures, and other documents made by, or coming into the possession of, the
Executive during the period of the Executive’s employment by the Company that
are owned by the Company or its Affiliates or which contain or disclose
confidential business information or trade secrets of the Company or its
Affiliates, and all copies thereof.

 

8.6.                            Assistance
in Protection.  Both during the period
of the Executive’s employment by the Company and thereafter, the Executive
shall assist the Company and its nominee, at any time, at the Company’s cost,
in the protection of the Company’s worldwide right, title, and interest in and
to information, ideas, concepts, improvements, discoveries, and inventions, and
its copyrighted, trademarked, and patented works, including without limitation,
the execution of all formal assignment documents requested by the Company or
its nominee and the execution of all lawful oaths and applications for
applications for patents and registration of copyright in the United States and
foreign countries.

 

The Executive agrees that if requested by the
Company, the Executive will Cooperate with, assist and support the Company in
connection with any investigation, settlement, defense or prosecution of any
contemplated or actual litigation or other proceedings relating to or in any
way connected to the Executive’s activities as an employee of the Company or
any information or business records gained or seen in connection with the
Executive’s employment or at the time of employment of which the Executive has
personal or corporate knowledge.  “Cooperation”
shall include, but shall not be limited to, assisting with responding to questions
and discovery, signing affidavits, executing documents, meeting with the
Company’s counsel, and appearing at depositions, administrative hearings, court
hearings or trials.

 

 

The Executive agrees to communicate with any
party adverse to the Company, or with a representative, agent, or legal counsel
for such party, concerning any such pending or future claims or litigation or
administrative hearing solely through legal counsel for the Company.

 

8.7.                            Remedies.  The Executive acknowledges that money damages
would not be sufficient remedy for any breach of this Section 8 by the
Executive.  After provision of 15 Days
advance written notice, and if the Executive fails to remedy such alleged
breach within such period of time, the Company shall be entitled to enforce the
provisions of this Section 8 by terminating any payments then owing to the
Executive under this Agreement and/or to specific performance and injunctive
relief as remedies for such alleged breach or any threatened breach.  Such remedies shall not be deemed the
exclusive remedies for a breach of this Section 8, but shall be in
addition to all remedies available at law or in equity to the Company,
including the recovery of damages from the Executive and the Executive’s agents
involved in such breach and remedies available to the Company pursuant to other
agreements with the Executive.

 

9.                                      Non-competition
Obligations.

 

9.1.                            Access
to Proprietary Information.  The
Company shall disclose to the Executive, or place the Executive in a position
to have access to, develop, or acquire knowledge of, trade secrets and/or
proprietary or confidential information of the Company or its Affiliates;
and/or shall entrust the Executive with business opportunities of the Company
or its Affiliates; and/or shall place the Executive in a position to develop
business good will on behalf of the Company or its Affiliates.

 

9.2.                            Non-Competition.  As an additional incentive for the Executive
to enter into this non-competition agreement of this Section 9, and as
part of the consideration for this Executive’s non-competition agreement
hereunder; the Executive agrees that trade secrets and confidential information
of the Company or its Affiliates will be disclosed or entrusted to the
Executive, the business goodwill of the Company or its Affiliates will be
developed by the Executive, or business opportunities will be disclosed or
entrusted to the Executive by the Company or its Affiliates.  The Executive agrees that during the period
of the Executive’s non-competition obligations hereunder, the Executive will
not, directly or indirectly for the Executive or for others, in any geographic
area or market where the Company or any of its Affiliated companies are
conducting any business as of the date of termination of the employment relationship
or have during the previous 12 months conducted any business: (i) engage in any
business competitive with the business conducted by the Company; (ii) render
advice or services to, or otherwise assist, any other person, association, or
entity who is engaged, directly or indirectly, in any business competitive with
the business conducted by the Company; (iii) induce any employee of the Company
or any of its Affiliates to terminate his or her employment with the Company or
its Affiliates, or hire or assist in the hiring of any such employee  by any person, association, or entity not
Affiliated with the Company.  A business
competitive with the business of the Company is defined as any business that
sells or produces a healthcare membership savings card business or distributes
its product and/or services through a network marketing strategy.  These non-competition obligations shall
extend for so long as the Executive is employed by the Company or, if the
employment relationship terminates prior to the expiration of the Term, for a
period of three years following termination of the Executive’s employment
relationship.

 

9.3.                            Remedies.  The Executive understands that the foregoing
restrictions may limit the Executive’s ability to engage in certain businesses
anywhere in the world during the period provided for above, but acknowledges
that the Executive will receive sufficiently high remuneration and access to
and knowledge of confidential and proprietary information and trade secrets and
other benefits (e.g., the right to receive compensation under this Agreement
for the remainder of the Term upon Termination except for termination for Cause
or voluntary termination) under this Agreement to justify such
restriction.  The Executive acknowledges
that money damages would not be a sufficient remedy for any breach of this Section 9
by the Executive, and the Company shall be entitled to enforce the provisions
of this Section 9 by terminating any payments then owing to the Executive
under this Agreement and/or to specific performance and injunctive relief as
remedies for such

 

 

breach or any threatened breach. Such remedies shall not be deemed the
exclusive remedies for a breach of this Section 9, but shall be in
addition to all remedies available at law or in equity to the Company,
including, without limitation, the recovery of damages from the Executive
involved in such breach and remedies available to the Company pursuant to other
agreements with the Executive.

 

9.4.                            Judicial
Modification.  It is expressly
understood and agreed that the Company and the Executive consider the
restrictions contained in this Section 9 to be reasonable and necessary to
protect the proprietary and/or confidential information and trade secrets of
the Company. Nevertheless, if any of the aforesaid restrictions are found by a
court having jurisdiction to be unreasonable, or overly broad as to geographic
area or time, or otherwise unenforceable, the parties intend for the
restrictions therein set forth to be modified by such courts so as to be
reasonable and enforceable and, as so modified by the court, to be fully
enforced.

 

10.                                 Dispute Resolution

 

10.1                        Dialogue.  In the event
of a “Dispute,” the parties shall through confidential dialogue and
communication, including, as appropriate, fact to face personal discussions,
attempt to achieve an amicable and mutually satisfactory resolution of such
claim, dispute or controversy.  In this
regard an officer, as may be designated in writing by the Company, will
represent the Company.

 

10.2                        Submission to Mediation. 
Any “Dispute” that cannot be resolved by the parties shall be submitted
to mediation before a mediator selected by the parties.  The parties shall bear their own costs for
mediation and the costs of the mediator shall be borne equally.

 

10.3.                     Submission to
Arbitration.  If the parties are
unable to agree to a mediator within 15 Days or if the Dispute is not resolved
as a result of the mediation within 60 Days (or such other period as may be
agreed by the parties), either party may submit the matter to arbitration for
final, binding and exclusive settlement by three arbitrators in accordance with
the Commercial Arbitration Rules of the American Arbitration Association in
effect on the date of such controversy or claim.  Any such arbitration shall take place in
Dallas, Texas and shall be conducted before three arbitrators.  The parties hereby submit to the jurisdiction
of the courts (federal and state) in Dallas, Texas for the entering and
enforcement of such order confirming the arbitrators’ award. The arbitrators
shall have all the powers of a Texas court of law and equity, including the
power to order specific performance of this agreement and the production of
relevant and unprivileged documents by one party for any inspection and
duplication by the other party prior to any hearing.  Any arbitration decision pursuant to this Section 10
shall be final and binding upon the parties and judgment thereon may be entered
in any court of competent jurisdiction. 
An award of costs and fees (including reasonable attorneys’ fees and
arbitration fees) incurred by the parties in carrying on any arbitration
proceeding hereunder shall be determined by the arbitrators by reference to
fault.  Nothing in this Agreement shall
limit the right of the parties, before and during such arbitration, to have
recourse to such judicial remedies, including preliminary injunction and
attachment, as would be available in the absence of this Section 10.  For purposes of this Agreement, the term “Dispute” means any dispute, disagreement,
breach, or difference which arises between or among the parties in connection
with or arising out of this Agreement (including, without limitation, any
dispute as to the termination or invalidity of this Agreement or any provision
of it).

 

11.                               Miscellaneous.

 

11.1                        Maintenance
of Privacy Rights.  The Executive
shall refrain, both during the employment relationship and after the employment
relationship terminates, from publishing any oral or written statements about
the Company, any of its subsidiaries or Affiliates, or any of such entities’
officers, employees, agents or representatives that are slanderous, libelous,
or defamatory; or that disclose trade secrets of or private or confidential
information about the Company, any of its subsidiaries or Affiliates, or any of
such entities’ business affairs, officers, employees, agents, or
representatives; or that constitute an intrusion into the seclusion or private

 

 

lives of the Company, any of its subsidiaries or Affiliates, or any of
such entities’ officers, employees, agents, or representatives; or that give
rise to unreasonable publicity about the private lives of the Company, any of
its subsidiaries or Affiliates, or any of such entities’ officers, employees,
agents, or representatives; or that place the Company, any of its subsidiaries
or Affiliates, or any of such entities’ officers, employees, agents, or
representatives in a false light before the public; or that constitute a
misappropriation of the name or likeness of the Company, any of its subsidiaries
or Affiliates, or any of such entities’ officers, employees, agents, or
representatives.  A violation or
threatened violation of this prohibition may be enjoined by court of competent
jurisdiction or by an arbitration panel pursuant to Section 10.  The rights afforded the Company and its
Affiliates under this Section 11.1 are in addition to any and all rights
and remedies otherwise afforded by law.

 

11.2                        Notices.  For purposes of this Agreement, notices and
all other communications provided for herein shall be in writing and shall be
deemed to have been duly given when personally delivered or when mailed by
United States registered or certified mail, return receipt requested, postage
prepaid, addressed as follows:

 

	
  If the Company, to:

  	
   

  	
  Precis, Inc.

  
	
   

  	
   

  	
  2040 North Highway 360

  
	
   

  	
   

  	
  Grand Prairie, Texas 75050

  
	
   

  	
   

  	
  Attention: Judith Henkels, Chief Executive
  Officer,

  
	
   

  	
   

  	
  President and Chairman of the Board

  
	
   

  	
   

  	
   

  
	
  With a copy to

  	
   

  	
  Precis, Inc.

  
	
   

  	
   

  	
  2040 North Highway 360

  
	
   

  	
   

  	
  Grand Prairie, Texas 75050

  
	
   

  	
   

  	
  Attention: General Counsel

  
	
   

  	
   

  	
   

  
	
  If the Executive, to:

  	
   

  	
  Robert L. Bintliff

  
	
   

  	
   

  	
  3612 Autumn Drive

  
	
   

  	
   

  	
  Fort Worth, Texas 76109

  

 

Each party must furnish a change of address to the other in writing in
accordance herewith.  Notices of changes
of address shall be effective only upon receipt.

 

11.3                        Applicable
Law.  This Agreement shall be
governed in all respects by the laws of the State of Texas, notwithstanding any
conflict-of- law rule or principle that might refer the construction of the
Agreement to the laws of another State or country.  In the event that any law or laws of the
State of Texas shall require or otherwise dictate that the law of another state
or jurisdiction be applied in any proceeding involving this Agreement, such Texas
law or laws shall be superseded by this provision and the remaining laws of the
State of Texas shall nonetheless be applied in such proceeding.

 

11.4                        Waiver.  No failure by either party hereto at any time
to give notice of any breach by the other party of, or to require compliance
with, any condition or provision of this Agreement shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time. Any term or provision of this Agreement may be waived in
writing at any time by a party, if the party is entitled to the benefits
thereof.  No such waiver shall, unless
explicitly stated, be a continuing waiver. 
No failure to exercise or delay in exercising any right hereunder shall
constitute a waiver thereof.  The failure
or delay of any party at any time to require performance by another party of
any provision of this Agreement, even if known, shall not affect the right of
such party to require performance of that provision or to exercise any right,
power or remedy under this Agreement. 
Any waiver by any party of any breach of any provision of this Agreement
shall not be construed as a waiver of any continuing or succeeding breach of
such provision, a waiver of any continuing or succeeding breach of such right,
power or remedy under this Agreement.  No
notice to or demand on any party in

 

 

any case shall, of itself, entitle such party to any other or further
notice or demand in similar or other circumstances.

 

11.5                        Effect of
Invalid Provisions.  It is the desire
and intent of the parties that the terms, provisions, covenants, and remedies
contained in this Agreement shall be enforceable to the fullest extent
permitted by law.  If any such term,
provision, covenant, or remedy of this Agreement or the application thereof to
any person, association, or entity or circumstances shall, to any extent, be
construed to be invalid or unenforceable in whole or in part, then such term,
provision, covenant, or remedy shall be construed in a manner so as to permit
its enforceability under the applicable law to the fullest extent permitted by
law.  In any case, the remaining
provisions of this Agreement or the application thereof to any person,
association, or entity or circumstances other than those to which they have been
held invalid or unenforceable, shall remain in full force and effect. In the
event any provision of this Agreement may be construed in two or more ways, one
of which would render the provision invalid or otherwise voidable or
unenforceable and another of which would render the provision valid and
enforceable, such provision shall have the meaning which renders it valid and
enforceable.

 

11.6.                     Assignment.  This Agreement shall be binding upon and
inure to the benefit of the Company and any other person, association, or
entity which may hereafter acquire or succeed to all or substantially all of
the business or assets of the Company by any means whether direct or indirect,
by purchase, merger, consolidation, or otherwise. The Executive’s rights and
obligations under this Agreement are personal and such rights, benefits, and
obligations of the Executive shall not be voluntarily or involuntarily
assigned, alienated, or transferred, whether by operation of law or otherwise,
without the prior written consent of an authorized officer of the Company.

 

11.7.                     Entire
Agreement.  Except as provided in (1)
written company policies promulgated by the Company dealing with issues such as
securities trading, business ethics, governmental affairs and political
contributions, consulting fees, commissions or other payments, compliance with
law, investments and outside business interests as officers and employees,
reporting responsibilities, administrative compliance, and the like, or (2) any
signed written agreements contemporaneously or hereafter executed by the Company
and the Executive, this Agreement constitutes the entire agreement of the
parties and contains all of the covenants, promises, representations,
warranties, and agreements between the parties with respect to the Executive’s
employment relationship with the Company and the term and termination of such
relationship, and replaces and merges previous agreements and discussions
pertaining to the employment relationship between the Company and the
Executive. Specifically, but not by way of limitation, the Employment Agreement
dated June 8, 2001 between the Company, The Capella  Group, Inc. and the Executive is hereby
canceled and the Executive hereby irrevocably waives and renounces all of the
Executive’s rights and claims under such June 8, 2001 Employment Agreement.  Any modification of this Agreement will be
effective only if it is in writing and signed by each party whose rights
hereunder are affected thereby.

 

11.8                        Counterparts.  This Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original and all of
which together shall be deemed to be a single agreement.

 

11.9                        Headings
and Captions; Interpretation.  In
this Agreement, unless the context otherwise requires, (i) references to
Sections are to Sections of this Agreement; (ii) use of any gender includes the
other genders; (iii) any reference to a “Day”
(including the phrase “Business Day)
shall mean a period of 24 hours running from midnight to midnight; (iv) a
reference to any other document referred to in this Agreement is a reference to
that other document as amended, varied, modified or supplemented at any time;
(v) where a word or phrase is given a particular meaning, other parts of speech
and grammatical forms of that word or phrase shall have corresponding meanings;
(vi) a reference to this “Agreement”
or any other agreement or document shall be construed as a reference to it as
amended, or modified from time to time; and a reference to “Affiliate” or “Affiliated”  means an
entity that directly or indirectly through one or more intermediaries,
controls, is controlled by, or is under common control with the Company.  The headings in this Agreement are inserted
for

 

 

convenience only and shall not be taken into consideration in the
interpretation or construction of this Agreement.

 

11.10 Confidentiality.  The Executive understands and hereby agrees
that the contents, details, terms, and/or negotiation of this Agreement are
strictly CONFIDENTIAL. The Executive further agrees that he or she will NOT
DISCLOSE any of the contents, details, terms, and/or negotiation of this
Agreement to any person or organization except under process of law.

 

[Intentionally Left Blank]

 

 

11.11 Consultation
with Independent Counsel.                                           THE
EXECUTIVE HAS BEEN ADVISED TO CONSULT WITH AN ATTORNEY OF HIS OR HER CHOICE
PRIOR TO EXECUTING THIS AGREEMENT.  The
Executive acknowledges that he or she is fully advised as to the meaning and
finality of this Agreement and intends to be bound by it.

 

IN WITNESS WHEREOF,
parties have duly executed this Agreement in multiple originals to be effective
on the date first stated above.

 

	
  “Company”

  	
   

  	
  PRECIS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Judith
  H. Henkels

  	
   

  
	
   

  	
   

  	
   

  	
  Judith H. Henkels

  
	
   

  	
   

  	
   

  	
  Chief Executive Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  “Executive”

  	
   

  	
  By:

  	
  /s/ Robert
  L. Bintliff

  	
   

  
	
   

  	
   

  	
   

  	
  Robert L. Bintliff

  
	
   

  	
   

  	
   

  	
  Chief Financial Officer

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