Document:

Exhibit 10.1

 

VALENTIS, INC.

 

STOCK BONUS AWARD
AGREEMENT

 

This Stock Bonus Award Agreement (the “Agreement”) is made as of July 1,
2005, by and between Valentis, Inc., a Delaware corporation (the “Company”), and                 
(“Employee”).  Capitalized terms not defined herein shall
have the meanings assigned to such terms in the Company’s Amended and Restated
1997 Equity Incentive Plan (the “Plan”).

 

1.                                       Issuance of Stock.

 

(a)                                  Pursuant
to the Plan and subject to the terms and conditions of this Agreement, on the
Issuance Date (as defined below), the Company will issue to Employee             
shares of the Company’s common stock (the “Shares”)
for good and valuable consideration which the Company has determined to exceed
the par value of the Company’s Common Stock. 
The term “Shares” refers to the issued
Shares and all assets or other securities received in replacement of or in
connection with the Shares pursuant to stock dividends or splits, all
securities received in replacement of the Shares in a recapitalization, merger,
reorganization, exchange or the like, and all new, substituted or additional assets,
securities or other property to which Employee is entitled by reason of
Employee’s ownership of the Shares.

 

(b)                                 The
parties agree that the Shares have a Fair Market Value of $2.80  per share as of the date of this Agreement.

 

(c)                                  The
issuance of the Shares under this Agreement shall occur at the principal office
of the Company simultaneously with the execution of this Agreement by the
parties (the “Issuance Date”).  On the Issuance Date, the Company will
deliver to Employee a certificate representing the Shares to be issued to
Employee (which shall be issued in Employee’s name).

 

2.                                       Limitations on Transfer.

 

(a)                                  Subject
to the provisions of Section 2(b) below, if Employee’s Continuous Status
as an Employee, Director or Consultant terminates for any reason, including as
a result of Employee’s death or disability, all of the Unreleased Shares (as
defined below) shall thereupon be forfeited immediately and without any further
action by the Company (the “Forfeiture Restriction”).  Upon the occurrence of such a forfeiture, the
Company shall become the legal and beneficial owner of the Shares being
forfeited and all rights and interests therein or relating thereto, and the
Company shall have the right to retain and transfer to its own name the number
of Shares being forfeited by Employee.

 

(b)                                 Subject
to the Employee’s Continuous Status as an Employee, Director or Consultant
through each such date, (i) 1/24th of the Shares shall be
released from the Forfeiture Restriction on July 31, 2005, (ii) 1/8th
of the Shares shall be released from the Forfeiture Restriction on each of October 31,
2005, January 31, 2006, April 30, 2006, July 31, 2006, October 31,
2006, January 31, 2007 and April 30, 2007, and (iii) 1/12th
of the

 

 

Shares shall be released from the Forfeiture Restriction on June 30,
2007.  In the event of a Change of Control, if Employee is an executive officer of the
Company, the Forfeiture Restriction shall automatically lapse if and to the
same extent that the vesting of outstanding Options held by Employee would
accelerate in connection with such transaction as provided in Section 12(b)(1) of
the Plan.  In the event of a Change of
Control, if outstanding Stock Awards under the Plan are assumed by the acquiror
or similar awards are substituted for such Stock Awards as provided in Section 12(b)(2) of
the Plan, to the extent there are Unreleased Shares following the application
of clause (i) above, this Agreement shall be assumed by any acquiror and
the Forfeiture Restrictions shall continue with respect to such Unreleased
Shares (or any assets or other securities received by or distributed to
Employee with respect to, in exchange for or in substitution of the Unreleased
Shares.  In the event of a Change of
Control, if the acquiror refuses to assume, substitute or continue Stock Awards
as provided in Section 12(b)(2) of the Plan, then all Unreleased
Shares as of the date of the Change of Control shall be forfeited upon the
occurrence of the Change of Control.

 

(c)                                  Any
of the Shares which, from time to time, have not yet been released from the
Forfeiture Restriction are referred to herein as “Unreleased
Shares.”

 

(d)                                 No
Unreleased Shares or any interest or right therein or part thereof shall be
liable for the debts, contracts or engagements of Employee or his successors in
interest or shall be subject to disposition by transfer, alienation,
anticipation, pledge, encumbrance, assignment or any other means whether such
disposition be voluntary or involuntary or by operation of law by judgment,
levy, attachment, garnishment or any other legal or equitable proceedings
(including bankruptcy), and any attempted disposition thereof shall be null and
void and of no effect.  Any permitted
transfer or sale of the Shares is subject to restrictions on transfer imposed
by any applicable state and federal securities laws.

 

3.                                       Escrow.

 

(a)                                  Employee
hereby authorizes and directs the secretary of the Company, or such other
person designated by the Company from time to time, to transfer any Unreleased
Shares which are forfeited pursuant to Section 2 above from Employee to
the Company.

 

(b)                                 To
insure the availability for delivery of Employee’s Unreleased Shares upon
forfeiture under Section 2, Employee hereby appoints the secretary, or any
other person designated by the Company as escrow agent from time to time, as
its attorney-in-fact to sell, assign and transfer unto the Company, such
Unreleased Shares, if any, forfeited by Employee pursuant to Section 2 and
shall, upon execution of this Agreement, deliver and deposit with the secretary
of the Company, or such other person designated by the Company, the share
certificate(s) representing the Unreleased Shares, together with the stock assignment
duly endorsed in blank, attached hereto as Exhibit A.  The Unreleased Shares and stock assignment
shall be held by the secretary in escrow, pursuant to the Joint Escrow
Instructions of the Company and Employee attached as Exhibit B hereto,
until the Shares are forfeited as provided in Section 2, until such
Unreleased Shares are fully released from the Forfeiture Restriction, or until
such time as this Agreement no longer is in effect.  Upon release

 

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of the Unreleased Shares from the Forfeiture Restriction, the escrow
agent shall promptly deliver to Employee the certificate or certificates
representing such Shares in the escrow agent’s possession belonging to
Employee, and the escrow agent shall be discharged of all further obligations
hereunder; provided, however, that the escrow agent shall nevertheless retain
such certificate or certificates as escrow agent if so required pursuant to
other restrictions imposed pursuant to this Agreement.  If any assets or other securities received by
or distributed to Employee with respect to, in exchange for or in substitution
of such Unreleased Shares are held by the escrow agent pursuant to this Section 3(b) and
the Joint Escrow Instructions, such assets or other securities shall also be
subject to the restrictions set forth in this Agreement and held in escrow
pending release of the Unreleased Shares with respect to which such assets or
other securities relate from the Forfeiture Restriction (or, if such Unreleased
Shares are no longer outstanding, until such time as such Unreleased Shares
would have been released from the Company’s Repurchase Option pursuant to this
Agreement).

 

(c)                                  The
Company, or its designee, shall not be liable for any act it may do or omit to
do with respect to holding the Shares in escrow and while acting in good faith
and in the exercise of its judgment.

 

4.                                       Taxation Representations.  In connection with the issuance of the
Shares, Employee represents to the Company the following:

 

(a)                                  Employee
acknowledges that he has been informed that unless an election is filed by
Employee with the Internal Revenue Service and, if necessary, the proper state
taxing authorities, within thirty (30) days of the date of this
Agreement, electing pursuant to Section 83(b) of the Internal Revenue
Code of 1986, as amended (and similar state tax provisions if applicable), to
be taxed currently on the fair market value of the Shares on the date of this
Agreement, there will be a recognition of taxable income to Employee equal to
the fair market value of the Shares at the time the Forfeiture Restriction
lapses.  Employee represents that
Employee has consulted any tax consultant(s) Employee deems advisable in
connection with the receipt or disposition of the Shares or the filing of the
election under Section 83(b) and similar tax provisions and that
Employee is not relying on the Company for any tax advice.

 

EMPLOYEE ACKNOWLEDGES
THAT IT IS EMPLOYEE’S SOLE RESPONSIBILITY AND NOT THE COMPANY’S TO FILE TIMELY
THE ELECTION UNDER SECTION 83(b), EVEN IF EMPLOYEE REQUESTS THE COMPANY OR
ITS REPRESENTATIVE TO MAKE THIS FILING ON EMPLOYEE’S BEHALF.

 

(b)                                 Employee
has reviewed with his own tax advisors the federal, state, local and foreign
tax consequences of this investment and the transactions contemplated by this
Agreement.  Employee is relying solely on
such advisors and not on any statements or representations of the Company or
any of its agents.  Employee understands
that Employee (and not the Company) shall be responsible for his own tax
liability that may arise as a result of this investment or the transactions
contemplated by this Agreement.  Employee
has reviewed this Agreement in its entirety, has had an

 

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opportunity to obtain the advice of counsel prior to executing this
Agreement and fully understands all provisions of this Agreement.

 

(c)                                  Notwithstanding
anything to the contrary in this Agreement, the Company shall be entitled to
require Employee to satisfy any federal, state or local tax withholding
obligation with respect to the issuance, lapsing of restrictions on the Shares
by any of the following means or by a combination of such means:  (i) tendering a cash payment; (ii) authorizing
the Company to withhold shares from the Shares otherwise issuable to Employee;
or (iii) delivering to the Company owned and unencumbered shares of the Common
Stock of the Company.   The Company shall not be obligated to deliver
any new certificate representing vested Shares to Employee or his legal
representative unless and until Employee or his legal representative shall have
paid or otherwise satisfied in full the amount of all federal, state and local
taxes applicable to the taxable income of Employee resulting from the grant of the
Shares or the lapse or removal of the Forfeiture Restriction.

 

5.                                       Restrictive Legends and Stop-Transfer Orders.

 

(a)                                  Legends.  The certificate or certificates representing
the Shares shall bear the following legend (as well as any legends required by
applicable state and federal corporate and securities laws):

 

THE
SHARES REPRESENTED BY THIS CERTIFICATE MAY BE TRANSFERRED ONLY IN
ACCORDANCE WITH THE TERMS OF AN AGREEMENT BETWEEN THE COMPANY AND THE
SHAREHOLDER, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY.

 

 (b)                              Stop-Transfer Notices.  Employee agrees that, in order to ensure
compliance with the restrictions referred to herein, the Company may issue
appropriate “stop transfer” instructions to its transfer agent, if any, and
that, if the Company transfers its own securities, it may make appropriate
notations to the same effect in its own records.

 

(c)                                  Refusal to Transfer.  The Company shall not be required (i) to
transfer on its books any Shares that have been sold or otherwise transferred
in violation of any of the provisions of this Agreement or (ii) to treat
as owner of such Shares or to accord the right to vote or pay dividends to any
purchaser or other transferee to whom such Shares shall have been so
transferred.

 

(d)                                 Removal of Legend.  After such time as the Forfeiture Restriction
shall have lapsed with respect to the Shares, and upon Employee’s request, a
new certificate or certificates representing such Shares shall be issued
without the legend referred to in Section 5(a)(i), and delivered to
Employee.

 

6.                                       No Employment Rights.  Nothing in this Agreement shall affect in any
manner whatsoever the right or power of the Company, or a parent or subsidiary
of the Company, to terminate Employee’s employment or consulting relationship,
for any reason, with or without cause.

 

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7.                                       Miscellaneous.

 

(a)                                  Governing Law.  This Agreement and all acts and transactions
pursuant hereto and the rights and obligations of the parties hereto shall be
governed, construed and interpreted in accordance with the laws of the State of
California, without giving effect to principles of conflicts of law.

 

(b)                                 Entire Agreement; Enforcement of Rights.   The Plan is incorporated herein by
reference.  This Agreement and the Plan
set forth the entire agreement and understanding of the parties relating to the
subject matter herein and merge all prior discussions between them.  No modification of or amendment to this
Agreement, nor any waiver of any rights under this Agreement, shall be
effective unless in writing signed by the parties to this Agreement.  The failure by either party to enforce any
rights under this Agreement shall not be construed as a waiver of any rights of
such party.  Notwithstanding anything to
the contrary anywhere else in this Agreement, the grant of the Shares is
subject to the terms, definitions and provisions of the Plan, which is
incorporated herein by reference.  Any of
your rights hereunder shall be in addition to any rights you may otherwise have
under benefit plans or agreements of the Company to which you are a party or in
which you are a participant, including, but not limited to, any Company
sponsored employee benefit plans, stock option plans, severance plans or
severance agreements.  The provisions of
this Agreement shall not in any way limit your rights under such other plans
and agreements.

 

(c)                                  Severability.  If one or more provisions of this Agreement
are held to be unenforceable under applicable law, the parties agree to
renegotiate such provision in good faith. 
In the event that the parties cannot reach a mutually agreeable and
enforceable replacement for such provision, then (i) such provision shall
be excluded from this Agreement, (ii) the balance of the Agreement shall
be interpreted as if such provision were so excluded and (iii) the balance
of the Agreement shall be enforceable in accordance with its terms.

 

(d)                                 Construction.  This Agreement is the result of negotiations
between and has been reviewed by each of the parties hereto and their
respective counsel, if any; accordingly, this Agreement shall be deemed to be
the product of all of the parties hereto, and no ambiguity shall be construed
in favor of or against any one of the parties hereto.

 

(e)                                  Notices.  Any notice required or permitted by this
Agreement shall be in writing and shall be deemed sufficient when delivered
personally or sent by telegram or fax or 48 hours after being deposited in the
U.S. mail, as certified or registered mail, with postage prepaid, and addressed
to the party to be notified at such party’s address or fax number as set forth
below or as subsequently modified by written notice.

 

(f)                                    Counterparts.  This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one instrument.

 

(g)                                 Successors and Assigns.  The rights and benefits of this Agreement
shall inure to the benefit of, and be enforceable by the Company’s successors
and assigns.  The Company

 

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may assign its rights under this Agreement to any successor (whether
direct or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company without the
prior written consent of Employee. The rights and obligations of Employee under
this Agreement may only be assigned with the prior written consent of the
Company.

 

 [Signature Page Follows]

 

6

 

The parties have executed this Agreement as of the
date first set forth above.

 

	
   

  	
  VALENTIS, INC.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Address:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  863A
  Mitten Road

  	
   

  
	
   

  	
  Burlingame,
  California 94010

  	
   

  
					

 

EMPLOYEE ACKNOWLEDGES AND
AGREES THAT NOTHING IN THIS AGREEMENT SHALL CONFER UPON EMPLOYEE ANY RIGHT WITH
RESPECT TO CONTINUATION OF SUCH EMPLOYMENT RELATIONSHIP WITH THE COMPANY, NOR
SHALL IT INTERFERE IN ANY WAY WITH EMPLOYEE’S RIGHT OR THE COMPANY’S RIGHT TO
TERMINATE EMPLOYEE’S EMPLOYMENT RELATIONSHIP AT ANY TIME, WITH OR WITHOUT CAUSE.

 

	
   

  	
  EMPLOYEE

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Signature:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Print Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Address:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
					

 

I,                                   ,
spouse of the above-named Employee, have read and hereby approve the foregoing
Agreement.  In consideration of the
Company’s issuing the Shares to my spouse as set forth in the Agreement, I
hereby agree to be irrevocably bound by the Agreement and further agree that
any community property or similar interest that I may have in the Shares shall
be similarly bound by the Agreement.  I hereby
appoint my spouse as my attorney-in-fact with respect to any amendment or
exercise of any rights under the Agreement.

 

 

	
   

  	
   

  	
   

  
	
   

  	
  (Signature)

  	
   

  

 

7

 

EXHIBIT A

 

ASSIGNMENT
SEPARATE FROM CERTIFICATE

 

FOR VALUE RECEIVED I,                                    ,
hereby sell, assign and transfer unto
                                        
                         
(                    )
shares of the Common Stock of Valentis, Inc. registered in my name on the
books of said corporation represented by Certificate No.            herewith
and do hereby irrevocably constitute and appoint                         
to transfer the said stock on the books of the within named corporation with
full power of substitution in the premises.

 

This Assignment Separate
from Certificate may be used only in accordance with the Stock Bonus Award Agreement
between Valentis, Inc. and the undersigned dated                     ,
200    .

 

Dated:                        ,               

 

	
   

  	
  Signature:

  	
   

  	
   

  

 

 

INSTRUCTIONS:  Please
do not fill in any blanks other than the signature line.  The purpose
of this assignment is to enable the Company to enforce the Forfeiture
Restriction, as set forth in the Stock Bonus Award Agreement, without requiring
additional signatures on the part of Employee.

 

 

EXHIBIT B

 

JOINT
ESCROW INSTRUCTIONS

 

July 1, 2005 

 

Valentis, Inc.

Attn: Secretary

 

As Escrow Agent for both Valentis, Inc.
(the “Company”) and the undersigned
recipient of stock of the Company (the “Employee”),
you are hereby authorized and directed to hold the documents delivered to you
pursuant to the terms of that certain Stock Bonus Award Agreement (“Agreement”) between the Company and
Employee, in accordance with the following instructions:

 

1.                                       In
the event of forfeiture of any of the shares owned by Employee pursuant to the
Forfeiture Restriction set forth in the Agreement, the Company and/or any
assignee of the Company (referred to collectively for convenience herein as the
“Company”) shall give to Employee and
you a written notice specifying the number of shares of stock forfeited and the
date of forfeiture.  Employee and the Company hereby irrevocably
authorize and direct you to effect the forfeiture contemplated by such notice
in accordance with the terms of said notice.

 

2.                                       As
of the date of forfeiture indicated in such notice, you are directed (a) to
date the stock assignments necessary for the forfeiture and transfer in
question, (b) to fill in the number of shares being forfeited and
transferred, and (c) to deliver the same, together with the certificate
evidencing the shares of stock to be forfeited and transferred, to the Company
or its assignee.

 

3.                                       Employee
irrevocably authorizes the Company to deposit with you any certificates
evidencing shares of stock to be held by you hereunder and any additions and
substitutions to said shares.  Employee does hereby irrevocably
constitute and appoint you as Employee ‘s attorney-in-fact and agent for the
term of this escrow to execute, with respect to such securities, all documents
necessary or appropriate to make such securities negotiable and to complete any
transaction herein contemplated, including but not limited to the filing with
any applicable state blue sky authority of any required applications for
consent to, or notice of transfer of, the securities.  Subject to the
provisions of this paragraph 3, Employee shall exercise all rights and
privileges of a stockholder of the Company while the stock is held by you.

 

4.                                       Upon
written request of Employee, but no more than once per calendar year, unless
the Forfeiture Restriction has been triggered, you will deliver to Employee a
certificate or certificates representing the number of shares of stock as are
not then subject to the Forfeiture Restriction.  Within one hundred
twenty (120) days after all shares of stock subject to the Agreement are fully
released from the Forfeiture Restriction, or such time as the Agreement no
longer is in effect, you will deliver to Employee a certificate or certificates
representing the

 

 

aggregate number of shares held or issued pursuant to the Agreement and
not forfeited pursuant to the Forfeiture Restriction set forth in Section 2
of the Agreement.

 

5.                                       If
at the time of termination of this escrow you should have in your possession
any documents, securities, or other property belonging to Employee, you shall
deliver all of the same to Employee and shall be discharged of all further
obligations hereunder.

 

6.                                       Your
duties hereunder may be altered, amended, modified or revoked only by a writing
signed by all of the parties hereto.

 

7.                                       You
shall be obligated only for the performance of such duties as are specifically
set forth herein and may rely and shall be protected in relying or refraining
from acting on any instrument reasonably believed by you to be genuine and to
have been signed or presented by the proper party or parties.  You
shall not be personally liable for any act you may do or omit to do hereunder
as Escrow Agent or as attorney-in-fact for Employee while acting in good faith,
and any act done or omitted by you pursuant to the advice of your own attorneys
shall be conclusive evidence of such good faith.

 

8.                                       You
are hereby expressly authorized to disregard any and all warnings given by any
of the parties hereto or by any other person or corporation, excepting only
orders or process of courts of law and are hereby expressly authorized to
comply with and obey orders, judgments or decrees of any court.  In
case you obey or comply with any such order, judgment or decree, you shall not
be liable to any of the parties hereto or to any other person, firm or
corporation by reason of such compliance, notwithstanding any such order,
judgment or decree being subsequently reversed, modified, annulled, set aside,
vacated or found to have been entered without jurisdiction.

 

9.                                       You
shall not be liable in any respect on account of the identity, authorities or
rights of the parties executing or delivering or purporting to execute or
deliver the Agreement or any documents or papers deposited or called for
hereunder.

 

10.                                 You
shall not be liable for the expiration of any rights under any applicable
state, federal or local statute of limitations or similar statute or regulation
with respect to these Joint Escrow Instructions or any documents deposited with
you.

 

11.                                 You
shall be entitled to employ such legal counsel and other experts as you may
deem necessary properly to advise you in connection with your obligations
hereunder, may rely upon the advice of such counsel, and the Company shall reimburse
you for any reasonable attorneys’ fees incurred in connection therewith.

 

12.                                 Your
responsibilities as Escrow Agent hereunder shall terminate if you shall cease
to be an officer or agent of the Company or if you shall resign by written
notice to each party.  In the event of any such termination, the
Company shall appoint a successor Escrow Agent.

 

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13.                                 If
you reasonably require other or further instruments in connection with these
Joint Escrow Instructions or obligations in respect hereto, the necessary
parties hereto shall join in furnishing such instruments.

 

14.                                 It
is understood and agreed that should any dispute arise with respect to the
delivery and/or ownership or right of possession of the securities held by you
hereunder, you are authorized and directed to retain in your possession without
liability to anyone all or any part of said securities until such disputes
shall have been settled either by mutual written agreement of the parties concerned
or by a final order, decree or judgment of a court of competent jurisdiction
after the time for appeal has expired and no appeal has been perfected, but you
shall be under no duty whatsoever to institute or defend any such proceedings.

 

15.                                 Any
notice required or permitted hereunder shall be given in writing and shall be
deemed effectively given upon personal delivery or upon deposit in the United
States Post Office, by registered or certified mail with postage and fees
prepaid, addressed to each of the other parties thereunto entitled at the
addresses set forth on the signature page attached hereto or at such other
addresses as a party may designate by ten (10) days’ advance written
notice to each of the other parties hereto.

 

16.                                 By
signing these Joint Escrow Instructions, you become a party hereto only for the
purpose of said Joint Escrow Instructions; you do not become a party to the
Agreement.

 

17.                                 This
instrument shall be binding upon and inure to the benefit of the parties
hereto, and their respective successors and permitted assigns.

 

18.                                 These
Joint Escrow Instructions shall be governed by, and construed and enforced in
accordance with, the laws of the State of California, excluding that body of
law pertaining to conflicts of law.

 

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The parties have executed these Joint Escrow
Instructions as of the date first set forth above.

 

	
   

  	
  VALENTIS, INC.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Address:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  863A
  Mitten Road

  	
   

  
	
   

  	
  Burlingame,
  California 94010

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  EMPLOYEE:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  [Name of Employee]

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Address:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ESCROW AGENT:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Secretary,
  Valentis, Inc.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Address:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  863A
  Mitten Road

  	
   

  
	
   

  	
  Burlingame,
  California 94010

  	
   

  
						

 

4EXHIBIT 10.16

                              EMPLOYMENT AGREEMENT

     This Employment Agreement is made and entered into this 25th day of May,
2005, with an effective date for Base Salary as described in Section 3.1 of this
Agreement, of the 1st day of July, 2005, by and between Bizcom U.S.A., Inc., a
Florida corporation ("Company") and Hanan "Hank" Klein ("Executive").

                                    RECITALS

A.   The Company has for the past several years employed Executive as the sole
     Officer and Director of the Company, but desires to be assured of the
     association and services of Executive for the Company.

B.   Executive is willing and desires to continue his employment with the
     Company, and the Company is desirous of continuing to employ Executive,
     upon the terms, covenants and conditions hereinafter set forth.

                                    AGREEMENT

NOW, THEREFORE, in consideration of the mutual terms, covenants and conditions
hereinafter set forth, the parties hereto do hereby agree as follows:

      1.    Employment. The Company hereby agrees to employ the Executive as
            Chief Executive Officer, President, Chairman of the Board and
            Secretary, subject to the supervision and direction of the Company's
            Board of Directors (of which Executive is the only current member).
            Executive shall also serve as Chairman of the Board, Chief Executive
            Officer, President and Secretary of the Company's following
            subsidiaries: Bizcom Southern Holdings, Inc., a Florida Corporation
            and SMR Management Inc., a Florida corporation (collectively
            referred to as the "Subsidiaries").

      2.    Term. The Company hereby agrees to employ the Executive for a period
            of two (2) years, (the "Initial Term") commencing on the above date
            and expiring on the second anniversary thereof (the "Expiration
            Date"), unless sooner terminated as hereinafter set forth. The
            Initial Term of this Agreement and the employment of the Executive
            hereunder, may be renewed and/or extended for such period or periods
            as may be mutually agreed to by the Company and the Executive in a
            written supplement to this Agreement, signed by the Executive and
            the Company. If this Agreement is not terminated (pursuant to
            Section 7 of this Agreement) by either party by giving written
            notice of such termination on or before the Second Anniversary of
            the Initial Term, this Agreement shall be extended for an additional
            two years. (The Initial Term and any extensions shall be hereinafter
            referred to as the "Employment Period").

      3.    Compensation and Reimbursement.

            3.1   Base Salary. For all services rendered by Executive under this
                  Agreement, the Company shall initially pay Executive a Base
                  salary of one hundred thirty thousand dollars ($130,000) per
                  annum, payable every two weeks in equal installments (the
                  "Base Salary"). The Base Salary is broken down as follows: One
                  hundred ten thousand dollars ($110,000) as compensation for

<PAGE>

                  all officer positions held by Executive for the Company and
                  its subsidiaries. The Base Salary for all positions held by
                  Executive shall not be divisible in the event that Executive
                  no longer holds any of these positions. The Base Salary shall
                  continue to be paid to Executive so long as he holds the
                  position as President/CEO of the Company. Executive shall also
                  be paid twenty thousand dollars ($20,000) for his position as
                  a member of the Board. The amount of the Base Salary for
                  either position may be increased at any time and from time to
                  time at the sole discretion of the Board of Directors of the
                  Company. In the event that Executive's position as
                  President/CEO is terminated pursuant to the terms of this
                  Agreement, then the Base Salary for Executive as Director
                  shall be increased to fifty thousand dollars ($50,000) per
                  year unless Executive is simultaneously terminated both as an
                  officer and director of the Company. The Board of Directors
                  shall review Executive's Base Salary at the end of each year
                  of Executive's employment during the Employment Term and shall
                  endeavor to increase the Base Salary from year to year during
                  the Employment Term. No such change shall in any way abrogate,
                  alter, terminate or otherwise affect the other terms of this
                  Agreement. The Executive may elect to defer any portion of his
                  Base Salary, but any such deferment shall be repayable on
                  written demand by Executive to the Company. No deferment by
                  Executive of compensation of any nature shall be considered a
                  waiver of Executive's right to receive any deferred portion of
                  such compensation.

            3.2   Performance Bonus. In addition to the Base Salary, Executive
                  shall be eligible for a performance bonus ("Performance
                  Bonus") of fifty thousand dollars ($50,000) if the Company
                  reaches at least five million dollars ($5,000,000) in gross
                  sales in any twelve month period. The Performance Bonus shall
                  be paid, if earned, within 90 days after such operating
                  results have been determined by the Company's in house
                  accounting department or its independent accountants, which
                  shall not be later than the close of the Company's fiscal
                  year. The Executive may elect to defer all or any portion of
                  his Performance Bonus, but any such deferment shall be
                  repayable on written demand by Executive to the Company. No
                  deferment of any nature of the Base Salary shall be considered
                  a waiver of Executive's right to receive all or any deferred
                  portion of the Performance Bonus.

            3.3   Additional Benefits. In addition to the Base Salary and the
                  Performance Bonus, Executive shall be entitled to the
                  following benefits:

                        Insurance. Executive shall be provided family health and
                        dental, which shall be fully paid for by the Company.

                        Automobile and Related Expenses. Company shall provide
                        Executive with a reasonably priced luxury vehicle.
                        Company shall also be responsible for all maintenance,
                        repair and insurance on the vehicle. In the event that
                        Executive pays for any Automobile expense, same shall be
                        reimbursed by the Company. In the event that, at any
                        time, Executive does not request or receive any of the
                        benefits of the Automobile and Related Expenses as

                                       2

<PAGE>

                        described herein, such failure shall not be deemed a
                        waiver of Executive's right to receive any or all of the
                        Automobile and Related Expenses benefits.

                        Reimbursement. Executive shall be reimbursed for all
                        reasonable "out-of-pocket" business expenses for
                        business travel and business entertainment incurred in
                        connection with the performance of his duties under this
                        Agreement. In the event that Executive does not request
                        or receive any or all of the benefits of the
                        Reimbursements as described herein, such failure shall
                        not be deemed a waiver of Executive's right to receive
                        any or all of the Reimbursements to which Executive may
                        be entitled.

            3.4   Vacation; Personal Days; Sick Days. During the Initial Term,
                  the Executive shall be entitled to paid vacation, sick days
                  and personal time as may be adopted by the Company's Board of
                  Directors with respect to the Company's senior management, in
                  each year of employment, in addition to any holidays which the
                  Company observes. Unused vacation, sick or personal days
                  cannot be carried forward from year to year, unless otherwise
                  provided for in the Company's Employee Handbook.

            3.5   Stock Options. Executive shall be entitled to participate in
                  the Company's stock option plans as may from time to time be
                  in effect and to receive incentive and other stock options as
                  may from time to time be granted to him thereunder. The
                  Company shall not be obligated to create a stock option plan.
                  Executive is granted a non-incentive stock option plan in the
                  form attached hereto as schedule 3.5.

      4     Scope of Duties.

            4.1   Duties of the Executive. Although the Executive is currently
                  the sole officer and director of the Company, the Company will
                  likely retain others to fill certain officer and board
                  positions in the foreseeable future. In the event that any
                  such positions are filled, the Executive shall report to, and
                  shall be subject to the supervision and direction of the Board
                  of Directors of the Company. The duties of the Executive shall
                  include, but not be limited to, managing, developing and
                  overseeing the Company operations in conjunction with the Vice
                  President, if such position is filled by someone other than
                  Executive. The Executive shall also be responsible for
                  developing and implementing strategies, products and services
                  which will improve or add to the Company's products and
                  services. The duties of the Executive may be changed or
                  amended at any time at the sole discretion of the Company's
                  Board of Directors.

            4.2   Executive's Devotion of Time. Executive hereby agrees to
                  devote substantially all of his full work time, abilities and
                  energy to the faithful performance of the duties assigned to
                  him and to the promotion and forwarding of the business
                  affairs of the Company, and not to divert any business
                  opportunities from the Company to himself or to any other
                  person or business entity.

                                       3

<PAGE>

            4.3   Conflicting Activities.

                  (1)   Executive shall not, during the Employment Period, be
                        engaged in any other business activity without the prior
                        written consent of the Board of Directors of the
                        Company; provided, however, that this restriction shall
                        not be construed as preventing Executive from investing
                        his personal assets in passive investments in business
                        entities which are not in competition with the Company
                        or its affiliates, or from pursuing business
                        opportunities as may be permitted by paragraphs 4.2,
                        4.3(2) and 4.3(3).

                  (2)    Executive hereby agrees to promote and develop all
                         business opportunities that come to his attention
                         relating to current or anticipated future business of
                         the Company, in a manner consistent with the best
                         interests of the Company and with his duties under this
                         Agreement. Should Executive discover a business
                         opportunity that does not relate to the current or
                         anticipated future business of the Company, he shall
                         first offer such opportunity to the Company. Should the
                         Board of Directors of the Company not exercise its
                         right to pursue this business opportunity within a
                         reasonable period of time, not to exceed sixty (60)
                         days, then Executive may develop the business
                         opportunity for himself; provided, however, that such
                         development may in no way conflict or interfere with
                         the duties owed by Executive to the Company under this
                         Agreement. Further, Executive may develop such business
                         opportunities only on his own time, and may not use any
                         service, personnel, equipment, supplies, facility, or
                         trade secrets of the Company in their development. As
                         used herein, the term "business opportunity" shall not
                         include business opportunities involving investment in
                         publicly traded stocks, bonds or other securities, or
                         other investments of a personal nature not in conflict
                         with any provision herein.

                  (3)    Exclusive Agreement. The Executive represents and
                         warrants to the Company that there are no agreements or
                         arrangements, whether written or oral, in effect which
                         would prevent the Executive from rendering service to
                         the Company during the Employment Period as provided
                         herein.

                  (4)    Approved Corporate Activities. Anything herein to the
                         contrary notwithstanding, nothing shall preclude the
                         Executive from (i) serving on the boards of directors
                         of a reasonable number of other non-competing
                         corporations or the boards of a reasonable number of
                         trade associations and/or charitable organizations,
                         (ii) engaging in charitable activities and community
                         affairs, and (iii) managing his personal investments
                         and affairs, provided that such activities do not
                         materially interfere with the proper performance of his
                         duties and responsibilities as Chief Executive Officer
                         of the Company.

           4.4.    Place of Performance. The Executive shall be based at the
                   Company's principal executive offices, except for required
                   travel relating to the Company's business. The Executive may
                   also perform a portion of his services from a home office, if
                   any, provided that such activities do not materially
                   interfere with the proper performance of his duties and
                   responsibilities as Chief Executive Officer of the Company.

      5.    Severance. Executive shall at all times be entitled to severance
            benefits equal to those provided to other executive officers of the
            Company. However, this Agreement shall govern in the event of any
            conflict between this Agreement and Company's policy on severance
            benefits.

                                       4

<PAGE>

      6.    Non-competition; Non-Solicitation; Unauthorized Disclosure;
            Injunctive Relief.

            6.1   Non-Competition. Except with respect to services performed
                  under this Agreement on behalf of the Company, and subject to
                  the obligations of the Executive as an officer of the Company
                  and the employment obligations of the Executive under this
                  Agreement, the Executive agrees that at no time during the
                  Employment Period, including any period in which the Executive
                  received compensation under Section 7, and for a period of one
                  (1) year thereafter, the Executive shall not, directly or
                  indirectly, own (other than as passive investment), manage,
                  operate, join, control, participate in, or otherwise be
                  connected or associated with, in any manner, including as an
                  officer, director, employee, independent contractor, partner,
                  consultant, advisor, agent, proprietor, trustee or investor,
                  any Competing Business in the Territory; provided, however,
                  that nothing contained in this Section 6.1 shall prevent the
                  Executive from owning less than 5% of the voting stock of a
                  publicly held corporation for investment purposes. For
                  purposes of this Section 6.1, the term "Competing Business"
                  shall mean a business engaged in building, developing,
                  operating or otherwise providing mobile voice and/or data
                  services over radio frequencies or which competes with any
                  business then being operated by the Company or any affiliate.
                  For purposes of this Section 6.1, the term "Territory" means
                  any state where the Company operates at the date of
                  termination of Executive's employment hereunder; and any state
                  in which the Company or any affiliate has taken substantial
                  steps toward establishing operations. The Executive's
                  obligations under this Section 6.1 shall survive the
                  termination of this Agreement and the Executive's employment
                  hereunder.

            6.2   Non-Solicitation. The Executive agrees that, during the
                  Employment Period and for a period of two (2) years
                  immediately following any termination of this Agreement for
                  any reason, the Executive shall not, directly or indirectly,
                  (i) employ or seek to employ or engage, or assist anyone else
                  to employ or seek to employ or engage, any person who at any
                  time during the year preceding the termination of the
                  Executive's employment hereunder was in the employ of the
                  Company or its affiliates or was an independent contractor
                  providing material merchandising, marketing, sales, financial
                  or management consulting services in connection with the
                  business of the Company or its affiliates; (ii) interfere in
                  any manner in the relationship of the Company or its
                  affiliates with any of its suppliers or independent
                  contractors, whether or not the relationship between the
                  Company or its affiliate and such supplier or independent
                  contractor was originally established in whole or in part by
                  the Executive's efforts; or (iii) solicit or accept business
                  from any clients of the Company or its affiliates, from any
                  prospective clients whose business the Company or any
                  affiliate of the Company is in the process of soliciting at
                  the time of the Executive's termination, or from any former
                  clients which had been doing business with the Company within
                  one year prior to the Executive's termination. The Executive's
                  obligations under this Section 6.2 shall survive the
                  termination of this Agreement.

            6.3   Unauthorized Disclosure. During the Employment Period and
                  thereafter, the Executive shall not, without the written
                  consent of the Board or a person authorized by the Board or as
                  may otherwise be required by law or court order, disclose to

                                       5

<PAGE>

                  any person, other than an employee of the Company or person to
                  whom disclosure is reasonably necessary or appropriate in
                  connection with the performance by the Executive of his duties
                  as an executive of the Company, any Confidential Information
                  (as hereinafter defined) obtained by him while in the employ
                  of the Company. As used herein, Confidential Information means
                  not only information disclosed by the Company and its
                  affiliates to the Executive, but also information developed or
                  learned by the Executive during the course or as a result of
                  employment hereunder, which information the Executive
                  acknowledges is and shall be the sole and exclusive property
                  of the Company. Confidential Information includes all
                  proprietary information that has or could have commercial
                  value or other utility in the business in which the Company or
                  its affiliates are engaged or contemplate engaging, and all
                  proprietary information of which the unauthorized disclosure
                  could be detrimental to the interests of any of the Company or
                  its affiliates, whether or not such information is
                  specifically labeled as Confidential Information by the
                  Company. In the event that Executive's employment with the
                  Company ceases for any reason, the Executive will not remove
                  from the premises of the Company without its prior written
                  consent any records, files, drawings, documents, or equipment
                  belonging to the Company and will immediately return to the
                  Company any records, files, drawings, documents, or equipment
                  belonging to the Company in the Executive's possession or
                  under the Executive's control. The Executive's obligations
                  under this Section 6.3 shall survive the termination of this
                  Agreement.

            6.4   Proprietary Information. During the Employment Term, the
                  Executive will disclose to the Company all designs, inventions
                  and business strategies or plans developed by the Executive
                  during such period which relate directly or indirectly to the
                  business of the Company or its affiliates, including without
                  limitation any process, plan, operation, product or
                  improvement. The Executive agrees that all of the foregoing
                  are and will be the sole and exclusive property of the Company
                  and that the Executive will at the request and cost of the
                  Company do whatever is reasonably necessary to secure the
                  rights thereto, by patent, copyright or otherwise, to the
                  Company.

            6.5   Severability. The parties to this Agreement understand and
                  agree that if any portion of the restrictive covenants set
                  forth in this Section 6 is held to be unreasonable, arbitrary
                  or against public policy, then that portion of the covenant
                  shall be considered divisible as to the time and geographic
                  area. The parties to this Agreement agree that if any court of
                  competent jurisdiction determines that the specified time
                  period or the specified geographical area of application is
                  unreasonable, arbitrary or against public policy, then a
                  lesser time period, geographical area, or both, that is
                  determined to be reasonable, non-arbitrary and not against
                  public policy shall be reformed by agreement of the parties,
                  or, if the parties cannot agree, then by such court and
                  enforced against the Executive. The Executive agrees and
                  acknowledges that he is familiar with the present and proposed
                  operations of the Company and that he believes that the
                  restrictive covenant as set forth in this Section 6 is
                  reasonable with respect to the subject matter, duration and
                  geographical application.

                                       6

<PAGE>

            6.6   Injunction. The Company and the Executive acknowledge that an
                  actual or threatened breach by the Executive of any of the
                  covenants contained in this Section 6 may cause irreparable
                  harm or damage to the Company or its subsidiaries, the
                  monetary amount of which may be virtually impossible to
                  ascertain. As a result, the Executive agrees that the Company
                  shall be entitled to an injunction issued by any court of
                  competent jurisdiction enjoining and restraining all
                  violations of this Section 6 by the Executive or his
                  associates, affiliates, partners or agents, and that the right
                  to an injunction shall be cumulative and in addition to all
                  other remedies the Company may possess.

      7.    Termination.

            7.1   Basis for Termination.

                  (1)   Mutual Agreement. Executive's employment hereunder may
                        be terminated at any time by mutual agreement of the
                        parties.

                  (2)   Permanent Incapacity. This Agreement shall automatically
                        terminate on the last day of the month in which
                        Executive dies or becomes permanently incapacitated.
                        "Permanent Incapacity" as used herein shall mean mental
                        or physical incapacity, or both, reasonably determined
                        by the Company's Board of Directors based upon a
                        certification of such incapacity by, in the discretion
                        of the Company's Board of Directors, either Executive's
                        regularly attending physician or a duly licensed
                        physician selected by the Company's Board of Directors,
                        rendering Executive unable to perform substantially all
                        of his duties hereunder and which appears reasonably
                        certain to continue for at least six consecutive months
                        without substantial improvement. Executive shall be
                        deemed to have "become permanently incapacitated" on the
                        date the Company's Board of Directors has determined
                        that Executive is permanently incapacitated and so
                        notifies Executive.

                  (3)   For Cause. Executive's employment may be terminated by
                        the Company "with cause," effective upon delivery of
                        written notice to Executive given at any time (without
                        any necessity for prior notice) if any of the following
                        shall occur:

                         (a)   any material breach of Executive's obligations in
                               this Agreement which remains uncured by Executive
                               for a period of 14 days after receiving written
                               notification by the Company of such material
                               breach; or

                         (b)   any material acts or events which inhibit
                               Executive from fully performing his
                               responsibilities to the Company in good faith, in
                               effect, (i) a felony criminal conviction; (ii)
                               any other criminal conviction involving
                               Executive's lack of honesty or moral turpitude;
                               (iii) drug or alcohol abuse; or (iv) material
                               acts of dishonesty, gross carelessness or gross
                               misconduct.

                  (4)   Disability. The Company may terminate this Agreement
                        upon the Disability (as defined below) of the Executive.
                        For purposes of this Agreement, "Disability" shall mean
                        the absence of the Executive from the Executive's duties
                        with the Company for a period of 90 days whether or not
                        consecutive in any 12-month period as a result of
                        incapacity due to mental or physical illness. The
                        Termination Date for a termination of this Agreement
                        pursuant to this Section 8.1(4) shall be the date
                        specified by the Board in a written notice. Upon any

                                       7

<PAGE>

                        termination of this Agreement pursuant to this Section
                        7.1(4), the Executive shall be entitled to the
                        compensation specified in Section 7.2 hereof.

                  (5)   Death. This Agreement shall terminate automatically upon
                        the death of the Executive, without any requirement of
                        notice by the Company to the Executive's estate. The
                        date of the Executive's death shall be the Termination
                        Date for a termination of this Agreement pursuant to
                        this Section 7.1(5). Upon any termination of this
                        Agreement pursuant to this Section 7.1(5), the Executive
                        shall be entitled to the compensation specified in
                        Section 7.2 hereof.

                  (6)   Non-Renewal. In the event that this Agreement is not
                        renewed beyond the Initial Term as provided in Section 2
                        hereof, then this Agreement shall terminate at the end
                        of such Initial Term of this Agreement. The last day of
                        the Initial Term shall be the Termination Date for a
                        termination pursuant to this Section 7.1(6). Upon any
                        termination of this Agreement pursuant to this Section
                        7.1(6), the Executive shall be entitled to the
                        compensation specified in Section 7.2 hereof.

                  (7)   Without Cause. Executive's employment may be terminated
                        by the Company "without cause" (for any reason or no
                        reason at all) at any time by giving Executive 60 days
                        prior written notice of termination, which termination
                        shall be effective on the 60th day following such
                        notice. If Executive's employment under this Agreement
                        is so terminated, the Company shall (i) continue to pay
                        Executive his Base Salary over the remaining term of
                        this Agreement as if Executive had not been so
                        terminated, (ii) pay a prorated portion of the
                        Performance Bonus, if any, earned for the year in which
                        termination occurs prorated to the date of termination,
                        plus (iii) pay any unreimbursed expenses accruing to the
                        date of termination. For purposes of this provision,
                        Executive's annual Base Salary shall be calculated as of
                        the termination effective date. After the Company's
                        termination of Executive under this provision, the
                        Company shall not be obligated to provide the benefits
                        to Executive described in Sections 3.3, 3.5 and 3.6
                        (except as may be required by law). The termination
                        pursuant to this section shall not have any effect on
                        any options already granted to Executive or any options
                        to which Executive may be entitled prior to the
                        effective date of termination.

                  (8)   Termination by Executive. Executive may terminate his or
                        her employment hereunder by giving the Company 60 days
                        prior written notice, which termination shall be
                        effective on the 60th day following such notice.

            7.2   Payment Upon Termination. Upon termination pursuant to Section
                  7.1(3), 7.1(4) 7.1(5) and 7.1(8). the Company shall pay to
                  Executive within 10 days after termination an amount equal to
                  the sum of (1) Executive's Base Salary accrued to the date of
                  termination; (2) unreimbursed expenses accrued to the date of
                  termination; and (3) any deferred compensation, deferred
                  reimbursements and expenses and deferred bonuses. After any
                  such termination, the Company shall not be obligated to
                  compensate Executive, his estate or representatives except for
                  the foregoing compensation then due and owing, nor provide the
                  benefits to Executive described in Section 3.3, 3.5, and 3.6
                  (except as otherwise provided herein or as may be required by
                  law).

                                       8

<PAGE>

            7.3   Dismissal from Premises. At the Company's sole option,
                  Executive shall immediately leave the Company's premises on
                  the date notice of termination is given by either Executive or
                  the Company. Nothing contained in this section shall restrict
                  or eliminate any of the obligations under this Agreement,
                  including compensation, benefits, etc.

      8.    Arbitration. Any dispute or controversy between the parties which
            arise out of the scope of this Agreement shall be resolved by
            arbitration in accordance with the rules of the American Arbitration
            Association then in effect (except to the extent that procedures
            outlined below differ from such rules). Within seven (7) days after
            receipt of written notice from either party that a dispute exists
            and that arbitration is required, both parties must within seven (7)
            business days agree on an acceptable arbitrator. If the parties
            cannot agree on an arbitrator, then the parties shall list the "Big
            Five" accounting firms (other than the Company's auditors) in
            alphabetical order and the first firm that does not have a conflict
            of interest and is willing to serve will be selected as the
            arbitrator. The parties agree to act as expeditiously as possible to
            select an arbitrator and conclude the dispute. The arbitrator must
            render his decision in writing within 30 days of his or its
            appointment. The cost and expenses of the arbitration and of legal
            counsel to the prevailing party shall be borne by the non-prevailing
            party. Each party will advance one-half of the estimated fees and
            expenses of the arbitrator. Judgment may be entered on the
            arbitrator's award in any court having jurisdiction; provided that
            the Company shall be entitled to seek a restraining order or
            injunction in any court of competent jurisdiction to prevent any
            continuation of any violation of Section 6 hereof.

      9     Miscellaneous.

            9.1   Transfer and Assignment. This Agreement is personal as to
                  Executive and shall not be assigned or transferred by
                  Executive without the prior written consent of the Company.
                  This Agreement shall be binding upon and inure to the benefit
                  of all of the parties hereto and their respective permitted
                  heirs, personal representatives, successors and assigns.

            9.2   Severability. Nothing contained herein shall be construed to
                  require the commission of any act contrary to law. Should
                  there be any conflict between any provisions hereof and any
                  present or future statute, law, ordinance, regulation, or
                  other pronouncement having the force of law, the latter shall
                  prevail, but the provision of this Agreement affected thereby
                  shall be curtailed and limited only to the extent necessary to
                  bring it within the requirements of the law, and the remaining
                  provisions of this Agreement shall remain in full force and
                  effect.

            9.3   Governing Law. This Agreement is made under and shall be
                  construed pursuant to the laws of the State of Florida. Any
                  and all legal action between the parties shall be instituted
                  and maintained in Broward County, Florida.

            9.4   Counterparts. This Agreement may be executed in several
                  counter parts and all documents so executed shall constitute
                  one agreement, binding on all of the parties hereto,
                  notwithstanding that, all of the parties did not sign the
                  original or the same counterparts.

                                       9

<PAGE>

            9.5   Entire Agreement. This Agreement constitutes the entire
                  agreement and understanding of the parties with respect to the
                  subject matter hereof and supersedes all prior oral or written
                  agreements, arrangements, and understandings with respect
                  thereto. No representation, promise, inducement, statement or
                  intention has been made by any party hereto that is not
                  embodied herein, and no party shall be bound by or liable for
                  any alleged representation, promise, inducement, or statement
                  not so set forth herein. However, any deferred salary,
                  bonuses, reimbursements, expenses or loans due or payable to
                  Executive prior to the date of this Agreement shall remain in
                  full force and effect.

            9.6   Modification. This Agreement may be modified, amended,
                  superseded, or cancelled, and any of the terms, covenants,
                  representations, warranties or conditions hereof may be
                  waived, only by a written instrument executed by the party or
                  parties to be bound by any such modification, amendment,
                  superceding, cancellation, or waiver.

            9.7   Attorneys' Fees and Costs. In the event of any dispute arising
                  out of the subject matter of this Agreement, the prevailing
                  party shall recover, in addition to any other damages
                  assessed, his/its attorneys' fees and court costs incurred in
                  litigating or otherwise settling or resolving such dispute
                  whether or not an action is brought or prosecuted to judgment.
                  In construing this Agreement, none of the parties hereto shall
                  have any term or provision construed against such party solely
                  by reason of such party having drafted the same.

            9.8   Waiver. The waiver by either of the parties, express or
                  implied, of any right under this Agreement or any failure to
                  perform under this Agreement by the other party, shall not
                  constitute or be deemed as a waiver of any other right under
                  this Agreement or of any other failure to perform under this
                  Agreement by the other party, whether of a similar or
                  dissimilar nature.

            9.9   Cumulative Remedies. Each and all of the several rights and
                  remedies provided in this Agreement, or by law or in equity,
                  shall be cumulative, and no one of them shall be exclusive of
                  any other right or remedy, and the exercise of any one of such
                  rights or remedies shall not be deemed a waiver of, or an
                  election to exercise, any other such right or remedy.

            9.10  Headings. The section and other headings contained in this
                  Agreement are for reference purposes only and shall not in any
                  way affect the meaning and interpretation of this Agreement.

            9.11  Notices. Any notice under this Agreement must be in writing,
                  may be sent by facsimile, sent by express 24-hour guaranteed
                  courier, or may be served by depositing the same in the United
                  States mail, addressed to the party to be notified,
                  postage-prepaid and registered or certified with a return
                  receipt requested. The addresses of the parties for the
                  receipt of notice shall be as follows:

                                       10

<PAGE>

                    If to the Company:

                        5440 NW 33rd Ave., Suite 106, Fort Lauderdale, FL  33309

                    If to Executive:

                        4550 Hazleton Lane
                        Lake Worth, FL 33467

                  Each notice given by registered or certified mail shall be
                  deemed delivered and effective on the date of delivery as
                  shown on the return receipt, and each notice delivered in any
                  other manner shall be deemed effective as of the time of
                  actual delivery thereof. Each party may change its address for
                  notice by giving notice thereof in the manner provided above.

            9.12  Survival. Any provision of this Agreement which imposes an
                  obligation after termination or expiration of this Agreement
                  shall survive the termination or expiration of this Agreement
                  and be binding on the Executive and the Company.

            9.13  Right of Set-Off. Upon termination or expiration of this
                  Agreement, the Company shall have the right to set-off against
                  the amounts due Executive hereunder the amount of any
                  outstanding loan or advance from the Company to Executive.

            9.14  Effective Date. This Agreement shall become effective as of
                  the date set forth on page one when signed by Executive and
                  the Company.

            9.15  No Third Party Beneficiary. Nothing expressed or implied in
                  this Agreement is intended, or shall be construed, to confer
                  upon or give any person (other than the parties hereto and, in
                  the case of the Executive, his heirs, personal
                  representative(s) and/or legal representative) any rights or
                  remedies under or by reason of this Agreement. No agreements
                  or representations, oral or otherwise, express or implied,
                  have been made by either party with respect to the subject
                  matter of this agreement which agreements or representations
                  are not set forth expressly in this Agreement.

         IN WITNESS WHEREOF, the parties hereto have caused this Employment
Agreement to be executed as of the date first set forth above.

Bizcom U.S.A., Inc.

By: /s/ Hanan Klein
    -------------------------
        Director

    /s/ Hanan Klein
    --------------------------
       Hanan "Hank" Klein

                                       11
<PAGE>

                                  SCHEDULE 3.5

                   STOCK OPTIONS GRANTED TO HANAN "HANK" KLEIN

500,000 options in terms of the Company Stock Option Plan.

These options are granted as follows:

125,000 with an execute price at $2.50 vesting immediately from date of grant at
May 25, 2005,

125,000 with an execute price at $3.00 vesting immediately from date of grant at
May 25, 2005

125,000 with an execute price at $4.00 vesting six months from date of grant at
November 25, 2005

125,000 with an execute price at $5.00 vesting one year from date of grant at
May 25, 2006.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00087-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00087-of-00352.parquet"}]]