Document:

Unassociated Document

SETTLEMENT & WORLDWIDE LICENSE AGREEMENT

AGREEMENT (“Agreement”) made as of January 31, 2001, (the “Effective Date”), by and among Bracco International B.V. (“Bracco”), a Netherlands corporation having a place of business at 3051 Strawinskylaan, 1077 ZX Amsterdam, Netherlands; Schering Aktiengesellschaft (“Schering”), a German corporation having a place of business at Mullerstrasse 178, 13342 Berlin-Wedding, Germany; and Alliance Pharmaceutical Corp. (“Alliance”), a New York corporation having a place of business at 3040 Science Park Road, San Diego, California 92121. Bracco, Schering, and Alliance may be referred to separately as a “Party” or collectively as the “Parties”.

 

WHEREAS, Bracco possesses intellectual property relating to the formulation method of preparing or use of Microbubbles (as this term is defined below);

 

WHEREAS, Alliance possesses intellectual property relating to the formulation method of preparing or use of Microbubbles;

 

WHEREAS, Schering possesses intellectual property relating to the formulation method of preparing or use of Microbubbles;

 

WHEREAS, Schering and Alliance have entered into a License Agreement under which Alliance granted to Schering an exclusive worldwide license with a right to sublicense under the Alliance Patents as defined therein;

 

WHEREAS, there is pending before the United States Patent and Trademark Office Interference No. 104,427 between Bracco and Alliance; and

 

WHEREAS, the Parties desire to settle the interference and all potential intellectual property disputes relating to their future and planned activities involving certain Products (as this term is defined below) or Microbubbles that have been or are currently being developed or may be developed in the future.

 

NOW, THEREFORE, in consideration of the foregoing and the covenants and acknowledgements and representations contained in this Agreement, the Parties hereby agree as follows:

 

 

ARTICLE I.  DEFINITIONS

 

1.1.  Definitions. For purposes of this Agreement, the terms defined in this Article shall have the meanings specified below. These terms are intended to encompass both the singular and plural forms.

 

	1.1.1  	“Affiliate” shall mean a person or an entity that controls, is controlled by, or is under common control with a Party to this Agreement.

 

	1.1.2  	“Alliance” shall mean Alliance as identified as a Party above and any Affiliate of Alliance.

 

	 
	 	1 	 
	

	 

  [****] Represents material which has been redacted pursuant to a request
  for confidential treatment pursuant to Rule 24B-2 under the Securities
  Exchange Act of 1934, as amended.

  

	1.1.3  	“Alliance Licensed Patents” shall mean Licensed Patents which are owned, obtained, acquired, purchased by or licensed to, with a right to sublicense, or in any way under the control or at disposal of Alliance, except for Third Party patents and patent applications acquired after December 20, 2000 by Alliance which, prior to their acquisition and not as a result of the negotiations leading up to such acquisition, had been previously exclusively licensed or otherwise exclusively restricted to any Third Party.

 

	1.1.4  	“BR-1” shall mean a phospholipid-stabilized Microbubble formulation not prepared by freeze drying wherein the fluorine atoms contained in the Microbubbles are in the form of SF6.

 

	1.1.5  	[****] or mixtures thereof.

 

	1.1.6  	“Bracco” shall mean Bracco as identified as a Party above and any Affiliate of Bracco.

 

	1.1.7  	“Bracco Licensed Patents” shall mean Licensed Patents which are owned, obtained, acquired, purchased or licensed to, with a right to sublicense, or in any way under the control or at disposal of Bracco, except for Third Party patents and patent applications acquired after December 20, 2000 by Bracco which, prior to their acquisition and not as a result of the negotiations leading up to such acquisition, had been previously exclusively licensed or otherwise exclusively restricted to any Third Party.

 

	1.1.8  	“Distributor” shall mean any Third Party engaged solely in the shipping, transportation, or distribution of any product, whether or not owned by a Party.

 

	1.1.9  	“Imavist” shall mean a phospholipid-stabilized Microbubble formulation not prepared by freeze drying wherein the fluorine atoms contained in the Microbubble are in the form of C6F14.

 

	1.1.10  	[****] by Alliance within five years of the Effective Date of this Agreement.

 

	1.1.11  	“Joint Development Parties” shall mean any Third Party engaged in the development, manufacture, sale, use, exportation or importation of a Party’s Product(s).

 

	1.1.12  	“Licensed Patents” shall mean all present and future patent and patent application claims, worldwide, that are directed to Microbubbles, formulations of Microbubbles, intermediates used in making Microbubbles, methods of preparing Microbubbles or the use of Microbubbles in Ultrasound Imaging (including harmonic imaging) that cover a Product, method of preparing a Product or method of using a Product, provided that such patent and patent application claims shall not include those directed to (i) non-Ultrasound Imaging uses of Microbubbles such as uses in drug delivery; gene therapy; sonothrombolysis; magnetic resonance imaging; and oxygen delivery, and (ii) Microbubbles with targeting ligands, peptides or chelates and formulations,
intermediates for, methods of preparing and the use of same.

 

	 
	 	2 	 
	

	 

  [****] Represents material which has been redacted pursuant to a request
  for confidential treatment pursuant to Rule 24B-2 under the Securities
  Exchange Act of 1934, as amended.

  

	1.1.13  	“Medical Diagnostic Imaging Field” shall mean any in vivo imaging of at least a portion of a patient, including but not limited to radiopharmaceutical, ultrasound, MRI, X-ray and light imaging.

 

	1.1.14  	“Microbubbles” shall mean microbubbles, microspheres, microballoons, microparticles and/or microvesicles containing gas or gas mixtures.

 

	1.1.15  	“Physiologically Acceptable Gas” shall mean a gas selected from air, nitrogen, oxygen, carbon dioxide, helium, xenon or mixtures thereof.

 

	1.1.16  	“Products” shall mean Imavist or Imavist II in the case of Alliance or Schering, and BR-1 or BR-14 in the case of Bracco.

 

	1.1.17  	“Schering” shall mean Schering as identified as a Party above and any Affiliates of Schering.

 

	1.1.18  	“Schering Licensed Patents” shall mean Licensed Patents which are owned, obtained, acquired, purchased by or licensed to, with a right to sublicense, or in any way under the control or at disposal of Schering, except for Third Party patents and patent applications acquired after December 20, 2000 by Schering which, prior to their acquisition and not as a result of the negotiations leading up to such acquisition, had been previously exclusively licensed or otherwise exclusively restricted to any Third Party.

 

	1.1.19  	“Third Party” shall mean any entity other than Bracco, Alliance, or Schering, including any person or other entity that controls, is controlled by, or is under common control with that entity.

 

	1.1.20  	“Ultrasound Imaging” shall mean the in vivo imaging of at least a portion of a patient with ultrasound, including but not limited to harmonic imaging.

 

 

ARTICLE II.  WORLDWIDE GRANT OF INTELLECTUAL PROPERTY RIGHTS

 

2.1.  Bracco hereby grants an irrevocable worldwide nonexclusive license to Schering and Alliance under the Bracco Licensed Patents to make, have made, use, sell, offer to sell, import Imavist and/[****] whether or not Imavist and/[****] are combined with other elements and used outside the coverage of the Licensed Patents. This license of
the instant provision 2.1 includes the right to sublicense such rights to current and future Distributors and Joint Development Partners.

	 
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  [****] Represents material which has been redacted pursuant to
  a request for confidential treatment pursuant to Rule 24B-2 under the
  Securities Exchange Act of 1934, as amended. 

2.2.  Schering hereby grants an irrevocable worldwide nonexclusive license to Bracco under the Schering Licensed Patents to make, have made, use, sell, offer to sell, import or export BR-1 and/or [****], whether or not BR-1 and/or [****] are combined with other elements and used outside the coverage of the Licensed Patents. This license of
the instant provision 2.2 includes the right to sublicense such rights to current and future Distributors and Joint Development Partners.

 

ARTICLE III.  WORLDWIDE SETTLEMENT OF INTELLECTUAL PROPERTY DISPUTES

 

3.1.  It is the intention of the Parties to settle any and all current and potential intellectual property disputes pertaining to the Licensed Products so as to obtain freedom to market their respective Products and therefor the Parties have voluntarily entered into this Agreement. In that connection, the Parties shall:

 

	3.1.1  	withdraw all current oppositions brought against the Licensed Patents of another Party in countries foreign to the United States;

 

	3.1.2  	refrain from filing any future oppositions or other challenge against the Licensed Patents of another Party in countries foreign to the United States;

 

	3.1.3  	refrain from filing any requests for interference, reexamination or other challenge against the Licensed Patents of another Party in the United States; and

 

	3.1.4  	in the event an interference is declared by the United States Patent and Trademark Office (“PTO”), meet and cooperate in good faith to find a joint settlement in a timely and efficient manner consistent with the requirements of 35 U.S.C. § 135 and other applicable laws and regulations.

 

3.2.  In order to advance the resolution of PTO interference No. 104,427 (the “Interference”), Bracco and Alliance counsel have met, exchanged information and determined in good faith and in order to resolve the Interference in just, timely and efficient manner, to proceed as follows:

 

	3.2.1  	Alliance will file three motions in the Interference, namely, (1) a motion to [****], (2) a motion to [****], and (3) a motion to be [****].

 

	3.2.2  	Bracco will file papers in the Interference [****] above and [****].

 

	3.2.3  	Bracco will file motions in the Interference [****] Schnalder AAA application, which claims are set forth in Exhibits B and C annexed hereto) and accompanying motions for benefit.

 

	3.2.4  	Alliance will file papers [****] the Proposed Counts.

 

	 
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  [****] Represents material which has been redacted pursuant to a request
  for confidential treatment pursuant to Rule 24B-2 under the Securities
  Exchange Act of 1934, as amended.

  

	3.2.5  	Bracco and Alliance will generally cooperate in a reasonable manner in filing the motions and papers identified above. In this regard, Bracco and Alliance will file [****] below unless they are reasonably necessary to effectuate the above. If, however, after the Parties file these motions and papers, the PTO comes to some other judgment that does not include awarding Alliance judgment for Count 2 and either awarding Bracco judgment for the Proposed Counts or denying or dismissing the motions for the Proposed Counts (e.g., the PTO sua 
sponte corresponds some or all of the claims that make up Count 2 and some or all of the claims that make up the Proposed Counts to a single count in the original interference or in a new interference), then Bracco and Alliance will confer on an appropriate way to advance the resolution of the Interference. If agreement on such an appropriate way to advance the resolution cannot be reached, Bracco and Alliance will be free to file any motions or other papers to pursue any outcome.

 

3.3.  Bracco and Alliance will file all agreements and understandings regarding the Interference, including this Agreement, with the PTO as required by 35 U.S.C. § 135(c).

 

3.4.  In the event the [****] application, the [****] application and/or an application claiming priority from the [****] application or the 
[****] application issues as a United States patent, Bracco will grant [****] under any such patent for any products or methods used outside of the Medical Diagnostic Imaging Field. Notwithstanding the foregoing, the license set forth in this Section 3.4 shall not include any other Bracco patent or patent application, even if the patent or patent application has claims that are the same or similar to the New Claims, provided that the patent does not issue from the [****]
 application, the [****] application or an application that claims priority from the [****] application or the [****] application.

 

3.5.  Neither Bracco nor Alliance will, in the future, assert an issue preclusion defense in any proceeding, other than an interference proceeding in the PTO, based upon the other Party requesting entry of an adverse judgment pursuant to Sections 3.2.2 and 3.2.4 above.

 

3.6.  The licenses set forth in this Agreement shall not be affected in any way by any outcome of the Interference.

 

 

ARTICLE IV.  FIRST RIGHT OF NEGOTIATION

 

4.1.  Alliance’s license of Imavist to Schering is terminated. Alliance will give Bracco a first right of negotiation for any rights to Imavist returned to Alliance as a result of such termination, which right of negotiation will be for ninety (90) days starting at the time Alliance informs Bracco that it desires a development/marketing partner for Imavist II.

 

4.2.  Alliance hereby grants to Bracco, subject to any rights of Schering, a first right of negotiation for worldwide rights (e.g., development and marketing) to [****] which right of negotiation will be for a one hundred and twenty (120) day period starting at the time Alliance informs Bracco that it desires a development marketing partner for [****]
.

	 
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  [****] Represents material which has been redacted pursuant to a request
  for confidential treatment pursuant to Rule 24B-2 under the Securities
  Exchange Act of 1934, as amended.

  

ARTICLE V.  EFFECT OF AGREEMENT ON THIRD PARTIES

 

5.1.  Nothing in this Agreement shall be construed to (1) obligate any Party to bring any action against any Third Party based on such Party’s Licensed Patents, or (2) limit or affect a Party’s right to bring any action against any Third Party based on such Party’s Licensed Patents.

 

5.2.  Nothing in this Agreement shall be construed to (1) obligate any Party to negotiate with or obtain licenses from any Third Party, or (2) limit or affect a Party’s rights to negotiate or obtain licenses from any Third Party.

 

 

ARTICLE VI.  FEES, PAYMENTS, ROYALTIES, WARRANTIES, INDEMNIFICATION

 

6.1.  [****]. Each Party shall bear its own costs and expenses, including, without limitation, its attorneys fees, relating to any action to be taken or having been taken in respect to this Agreement.

 

6.2.  Each Party makes the following warranties and representations to the other Parties:

 

	6.2.1  	each Party is a corporation duly organized and validly existing and in good standing under the laws of the state or country in which it is organized and has all requisite power and authority to enter into and perform this Agreement and the transactions contemplated hereby and to require its Affiliates to abide by its terms and conditions;

 

	6.2.2  	all requisite corporate actions on the part of each Party has been completed for the authorization of the execution and delivery of this Agreement and the performance of the transactions contemplated hereunder.

 

	6.2.3  	this Agreement is, and such other transactions will be, valid and binding obligations of each Party enforceable in accordance with their respective terms; and

 

	6.2.4  	the execution, delivery and performance of this Agreement and the consummation of transactions contemplated hereby do not and will not violate the provisions of any Party’s certificate of incorporation or bylaws or similar type documents or the provisions of any note, indenture, lease, license permit or other instrument or obligation or violate any law, order, rule or regulation applicable to it.

 

6.3.  No Party makes any warranties or representations, either express or implied, concerning the scope, validity or enforceability of its respective Licensed Patents.

 

6.4.  No party shall have any obligation to indemnify any other Party for any lawsuit arising in connection with Imavist, [****], BR-1 or[****], or the Schering, Alliance or Bracco Licensed Patents.

	 
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  [****] Represents material which has been redacted pursuant to
  a request for confidential treatment pursuant to Rule 24B-2 under the
  Securities Exchange Act of 1934, as amended. 

6.5.  No Party makes any warranties or representations, either express or implied, or assumes any responsibility whatsoever with respect to the manufacture, use or sale or other disposition by any other Party of that Party’s Product, even if that Party’s Product makes use of any inventions claimed in the Licensed Patents of another Party.

 

 

ARTICLE VII.  DURATION

 

7.1.  The term of the license granted from Bracco to Schering and Alliance set forth in Section 2.1 above and the Schering and/or Alliance obligations set forth in Section 3 above shall start at the Effective Date and shall last until Imavist and [****] are no longer under development or planned for development, undergoing regulatory approval, or being manufactured, sold or prepared for sale by either Schering or Alliance.

 

7.2.  The term of the license granted from Schering and/or Alliance to Bracco set forth in Sections 2.2 and 2.3 above and the Bracco obligations set forth in Section 3 above shall start at the Effective Date and shall last until BR-1 and [****] are no longer under development or planned for development, undergoing regulatory approval, or being manufactured, sold or prepared for sale by Bracco.

 

 

ARTICLE VIII.  CONFIDENTIALITY

 

8.1.  Each Party will maintain the other Party’s information in confidence. No party will disclose the contents of this Agreement to any other person or entity and each Party will retain in confidence the terms and conditions of this Agreement, except as necessary to comply with law or the valid order of a court or agency of competent jurisdiction of a state or federal authority; or to the extent necessary in any action, suit or proceeding to enforce this Agreement or to their respective Affiliates, banks, auditors, accountants, lawyers, and any other representative of a Party who has a good faith need to know, provided that any such person or entity to whom disclosure is made must be advised of the
confidentiality of the information disclosed and agree to keep such information confidential.

 

8.2.  No public statements of any kind pertaining to this Agreement may be made except as required by law, such as that enforced by the Securities Exchange Commission of the United States of America.

 

 

ARTICLE IX.  MISCELLANEOUS

 

9.1.  Notice. All notices or communications required pursuant to this Agreement shall be in writing and shall be deemed to have been duly given upon the date of receipt if delivered by hand, international overnight courier, confirmed facsimile transmission, or registered or certified mail (return receipt requested, postage prepaid) to the following addressees or facsimile numbers:

 

	9.1.1  	For Alliance:

 

Alliance Pharmaceutical

 

3040 Science Park Road

 

San Diego, CA 92121

 

USA

 

Attn: President

 

Facsimile: +1-858-410-5343

 

	 
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	9.1.2  	For Bracco:

 

Bracco Imaging S.p.A.

 

  Via Egidio Folle 50. 

20 134 Milano, ITALY

 

  Attn: Director, Intellectual Property

 

Facsimile: +39-02-2177-2785

 

	9.1.3  	For Schering:

 

Schering Aktiengesellschaft

 

13342 Berlin

 

Germany

 

Attn: Legal Department

 

Facsimile: +49-30-4681-4086

 

9.2.  Choice of Law: The Parties agree that this Agreement shall be governed by the laws of the State of New York without reference to conflict of laws principles.

 

9.3.  Entire Agreement: This Agreement, including all Exhibits attached hereto and all documents delivered concurrently herewith,. set forth all the licenses, covenants, premises, agreements, warranties, representations, conditions, and understandings between the Parties hereto and supersede all prior agreements and understandings between the Parties relating to the subject matter hereof. This Agreement, including, without limitation, the Exhibits attached hereto, is intended to describe the full extent of the legally enforceable undertakings of the Parties hereto.

 

9.4.  Severability: In the event that any provision of this Agreement shall, for any reason, be held to be invalid or unenforceable in any respect, such invalidity or unenforceability shall not affect any other provision hereof, and the Parties shall negotiate in good faith to modify the Agreement to preserve their original intent.

 

9.5.  Amendment and Waiver: This Agreement may be amended, supplemented, or otherwise modified only be means of a written instrument signed by all Parties. Any waiver of any rights or failure to act in a specific instance shall relate only to such instances and shall not be construed as an agreement to waive any rights or fail to act in any other instance, whether or not similar.

 

9.6.  Headings: The sections and paragraph headings contained herein are for the purposes of convenience only and are not intended to define or limit the contents of said sections or paragraphs.

 

9.7.  Counterparts: This Agreement may be signed in counterpart, each of which shall be deemed to be an original. Signatures shall be provided by facsimile transmission, with original signatures following by mail.

	 
	 	 	 
	

	 

 

9.8.  Assignment: Neither this Agreement nor the licenses granted herein may be assigned to any Third Party. No Party shall assign, by operation of law or otherwise, any Licensed Patents to a Third Party without such Third Party agreeing to be bound in writing by the licenses granted hereunder.

 

IN WITNESS WHEREOF, the undersigned Parties have duly executed and delivered this Agreement as of the date first written above.

 

	
Alliance Pharmaceutical Corp.

 

By: /s/ Lloyd A. Rowland                             

 

Name: Lloyd A. Rowland

 

Title: Vice President & General Counsel

 

Date: 31 Jan 2001

 

 

 

Schering Aktiengellschaft

 

By: /s/ H. G. Rook                                      

 

Name: H. G. Rook

 

Title: Head of SBK, DG & RP

 

Date: 31.1.2001

 
	
for and on behalf of

 

Bracco International B.V.

 

By: Bracco Holding BV

 

Name: Diana Bracco

 

Title: Managing Director

 

Date: 31.01.01

 

 

	 
	 	9Unassociated Document

 

EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT (“Agreement”), dated for reference this 1st day of July 2004, is made

 

BETWEEN:

 

MARK ROSEBOROUGH of 2238 West Livingstone Street, Allentown, Pennsylvania, U.S.A.

 

(“Roseborough”)

 

AND:

 

EPOD International Inc of 2223 Hayman Rd Kelowna, BC, V1Z1Z6, Canada

 

(the “Company”)

 

WHEREAS:

 

A.  The Company wishes to employ Roseborough as the Company’s President;

 

B.  The terms of Roseborough’s prospective employment with the Company have, to date, not been evidenced in writing; and

 

C.  It is in the best interests of the Company to set forth the terms and conditions of Roseborough’s employment in writing and, accordingly, Roseborough and the Company wish to enter into this Agreement.

 

THEREFORE, in consideration of the mutual covenants herein contained, and for other good and valuable consideration the receipt and sufficiency of which is hereby acknowledged, the parties hereto do hereby agree as follows:

	1.  	EMPLOYMENT, TITLE AND DUTIES

 

1.1  The Company hereby offers employment to Roseborough, and Roseborough hereby accepts and confirms such employment, as the Company’s President.

 

1.2  As President, Roseborough shall undertake and perform such assignments and responsibilities for the Company as he may from time to time be delegated by the Company’s Board of Directors, which shall include, but not be limited to, the assignments and responsibilities set out in Schedule “A” of this Agreement. It is understood and agreed that Roseborough will devote his full time attention and energies to his duties as President with the exception that it is agreed that he may, at his sole discretion, spend up to two (2) days per month in his private consulting business.

 

1.3  Roseborough will perform his duties under this Agreement diligently, honestly, and in good faith.

 

	2.  	TERM

 

2.1  The term of Roseborough’s employment hereunder shall continue for a term of three years from the date of this Agreement until January 14, 2007 unless terminated earlier in accordance with the terms of section 8.

	 
	 	 	 
	

	 

 

	3.  	COMPENSATION

 

3.1  As compensation for Roseborough’s employment hereunder, Roseborough shall be paid a monthly salary fixed from time to time by the Board of Directors, which salary shall be at a rate of not less than $120,000 (Cdn.) per annum ($10,000 per month) Roseborough’s salary as President, to be reviewed annually by the Board of Directors while Roseborough is acting as President under subsection 1.1.

 

3.2  In addition to the monthly salary referred to above, Roseborough shall also receive an amount equal to 1% of the Company’s pre-tax income. This amount shall be paid on a quarterly basis and reconciled annually in accordance with the Company’s audited financial statements. For greater clarity it is agreed between the parties that “pre-tax income” is defined as being “pre-tax income from the audited financial statements prepared in accordance with generally accepted accounting principles”.

 

3.3  Subject to subsection 3.1, the Company will pay Roseborough a salary at such amount as the Board of Directors may determine in it’s absolute discretion having in mind the financial condition of the Company and its subsidiaries as a whole, the ability of the Company to pay the salary, the performance of Roseborough, and the performance of the Company and its subsidiaries, if any, under his guidance. 

 

3.4  Roseborough shall be eligible to participate in any incentive or bonus plans for which Roseborough may be eligible in accordance with the policies with respect thereto established from time to time by the Company’s Board of Directors.

 

3.5  Roseborough shall receive stock options (pursuant to the provisions of the Share Option Agreement set out in Schedule “B”) equivalent to 1% of all issued and outstanding shares of the Company with such options to be issued to Roseborough at the price determined by the Board for its Directors. The parties agree that a separate stock option agreement in the form provided by Schedule “B” will be executed by the parties at or immediately prior to the issuance of the options referred to herein. In recognition of Roseborough’s right to receive the stock options as described herein, the Company undertakes to annually file an S-8 Registration Statement with the United
States Securities & Exchange Commission registering the stock options such that they are on exercise freely tradable by Roseborough. 

 

3.6  In addition, as recognition for past efforts Roseborough shall be paid a bonus of $60,000 CDN (sixty thousand dollars)

 

	4.  	BENEFITS

 

4.1  Roseborough will be entitled to participate in any group medical, dental, and insurance plans offered by the Company to its senior level employees.

 

4.2  Roseborough acknowledges that the Company has provided him with and he is aware of the full details of the group benefits offered by the Company to its employees.

 

4.3  Roseborough shall be reimbursed for moving and relocation expenses incurred to take up the position of President up to a maximum amount of $10,000 (U.S. dollars).

 

	5.  	EXPENSES

 

The Company will reimburse Roseborough’s reasonable business expenses incurred in the course of Roseborough’s work for the Company, in accordance with its then current policies, and on Roseborough’s presentation of receipts and other supporting information as the Company may from time to time reasonably require.

	 
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	6.  	VACATION

 

6.1  Roseborough will be entitled to a vacation of four (4) weeks during each year of employment, during which he will receive full compensation, or to such longer periods of time as may be mutually agreed to by the Company and Roseborough.

 

6.2  Roseborough agrees to take his vacations at such times as are mutually satisfactory to the Company and Roseborough, having regard to maintaining the efficient operation of the Company.

 

	7.  	RESTRICTIVE COVENANTS

 

7.1  REMOVED

 

7.2  Roseborough acknowledges that the Company’s business and future success depend on the preservation of trade secrets and other confidential, proprietary information concerning the Company, its subsidiaries, suppliers and customers (“Secrets”). Roseborough agrees not to, except as authorized or required by his duties, reveal or divulge to any person, company, agency or authority any of the Secrets concerning the organization, business, finances, transactions, or other affairs of the Company and its subsidiaries which may come to his knowledge during the term of this Agreement, and he will keep in complete secrecy all confidential information entrusted to him and will not use or attempt to
use any such information in any manner which may injure or cause loss either directly or indirectly to the Company’s business. This restriction will continue to apply after the termination of this Agreement without limit in time, but will cease to apply to information or knowledge which may come into the public domain.

 

7.3  Roseborough acknowledges that during the performance of his duties he has access to all of the Company’s confidential and proprietary information. Roseborough further acknowledges that he has fiduciary duties to the Company that extend beyond the last day of his employment. In addition to these obligations and the obligations set out in section 7.2 herein, Roseborough agrees that for a period of one (1) year after the termination of his employment anywhere in the world he will not carry on, directly or indirectly, in any capacity, including as an employee, a sales representative or agent, owner, officer, director, lender, investor (except as a shareholder in a publicly traded Company not
controlled by him), partner, consultant, distributor or broker, in the business of managing and/or enhancing electricity.

 

7.4  Roseborough agrees that for a period of one year following the termination of his employment he will not solicit any customer of the Company with whom he had any business dealings nor will he attempt to solicit any employees of the Company to accept employment with any other business or entity competitive with the Company.

 

7.5  Roseborough acknowledges that the Company will suffer irreparable harm in the event of his breach of the restrictive covenant. In addition to its claim for damages, the Company is entitled to enforce the provisions set out above by way of injunction. Roseborough further acknowledges that all restrictions in this agreement are necessary and fundamental to the protection of the legitimate business interests of the Company and do not deprive him of the means or opportunity for suitably supporting himself or his family of for obtaining employment after termination of his employment with the Company. Roseborough waives all defences to the strict enforcement of the restrictions in this
agreement.

 

7.6  The confidentiality provisions of this section 7 are in addition to, and not in substitution for, any other rights or remedies the Company may have under applicable law for the protection of its properties and trade secrets.

 

	8.  	TERMINATION

 

8.1  By the Company for Cause

	 
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The Company in its absolute discretion may terminate Roseborough’s employment for cause. For the purposes of this section cause includes but is not limited to the following:

 

	(a)  	any material breach of the provisions of this Agreement;

 

	(b)  	unethical practices;

 

	(c)  	intentional disloyalty; and

 

	(d)  	any and all omissions, commissions or other conduct which would constitute cause at law, in addition to the specified causes.

 

Failure by the Company to rely on the provisions of this paragraph in any given instance or instances, shall not constitute a precedent, condonation or be deemed a waiver. Unless provided elsewhere herein, all compensation and benefits shall cease to accrue on Roseborough’s termination date.

 

8.2  By the Company without Cause

 

The Company may terminate Roseborough’s employment at any time without cause by giving Roseborough ninety (90) days advance notice in writing. If terminated without cause, the Company shall continue to pay Roseborough his salary during the ninety day period and then, at the conclusion of the ninety (90) day notice period, pay to Roseborough, as liquidated damages for the loss of reputation and standing in the business community and other damages suffered by Roseborough as a result of the termination and in discharge of all obligations of the Company to Roseborough under this Agreement the following: (a) any existing Company bonus or bonuses due or accruing due during the year in which termination occurs; (b) accrued vacation (c) such amounts of pre-tax income (as described in paragraph 3.2) as will be owing
and/or accruing due to Roseborough during the year that notice of termination is given. In addition to the payments described herein, the Company also agrees that all stock options held by or accruing to Roseborough for the balance of the term of this Agreement will continue to be issued over the period of this agreement.

 

Roseborough shall not be obligated, at his election, to continue to work during the ninety day notice period nor will he be required to mitigate any damages that may be suffered by reasons of the termination without cause by the Company. In the event that Roseborough secures other contracts after the termination with the effect that his damages are mitigated, any monies received by Roseborough under such contract shall not in any manner be set off against, credited towards or deducted from the amount payable to Roseborough under this paragraph.

 

8.3  By Roseborough for Cause

 

Roseborough may terminate his employment for cause following fourteen (14) days’ written notice to the Company. In such circumstances, Roseborough’s stock options shall immediately vest in full. For the purpose of this section, cause shall include, but not be limited to the following: 

 

	(a)  	any material breach of this Agreement by the Company which is not cured within thirty days following written notice by Roseborough; 

 

	(b)  	bad faith attempts to induce Roseborough’s resignation; and

 

	(c)  	any change in control of the Company (as hereinafter defined).

 

The phrase “change in control of the Company” shall mean the voluntary or involuntary ceding of the ability to direct the operations and policies of the Company, or the Company’s proxy machinery, to any person or group of persons not now in control of the Company, whether by stock ownership, contract or otherwise and for greater certainty shall include but not be limited to the occurrence of an amalgamation, arrangement or other form of merger, or pursuant to a securities takeover bid if, following the completion of the transaction, the shareholders of the Company prior to such transaction, taken together, will have the right to vote less than 20% of the voting shares of the merged entity, the offer or the Company, as applicable, following the completion of the transaction.

	 
	 	4 	 
	

	 

If Roseborough elects to terminate his employment pursuant to paragraphs 8.3 (a), (b) or (c), then the provisions of subsection 8.2 shall apply and the Company shall within fourteen (14) days of the termination date thereof pay to Roseborough all monies and other forms of compensation listed in subsection 8.2.

 

8.4                        By Roseborough without cause

 

Roseborough may at any time, for any reason, on the giving of four (4) weeks’ written notice to the Company terminate his employment pursuant to this agreement. Unless otherwise provided herein, all compensation shall cease accruing upon Roseborough’s termination date for any termination by Roseborough without cause.

 

	
9.  
	DEATH OR DISABILITY

 

Roseborough’s employment and salary shall terminate on Roseborough’s death or disability subject to Roseborough’s right to apply for long term disability benefits in appropriate circumstances. “Disability” means any health condition or other cause beyond Roseborough’s control that reasonably prevents Roseborough from performing his duties for a period of 180 days within any 365 calendar day period. Provided, however, the Company may, in its sole discretion, grant Roseborough a leave of absence, or make other reasonable accommodation for Roseborough’s disability. The terms of such a leave shall be confirmed by the Company in writing, and shall determine Roseborough’s right, if any, to continued compensation, his obligation to continue his job duties, the terms under which
he may return to work, and all other conditions of the leave.

 

	
10.  
	INDEMNIFICATION OF ROSEBOROUGH

 

The Company will indemnify and save harmless Roseborough, his heirs and personal representatives, against all costs, charges and expenses made by third parties including an amount paid to settle an action or satisfy any claim or judgement, actually and reasonably incurred by him, including an amount paid to settle an action or satisfy a judgement in a civil, criminal, or administrative action or proceeding to the extent such claim or judgement relates to services which Roseborough was providing in good faith to the Company under this Agreement, except where such amount paid is a result of an action arising from or related to the negligence of Roseborough .

 

	
11.  
	COMPLETE AGREEMENT

 

This Agreement comprises the entire agreement of Roseborough and the Company with respect to the employment of Roseborough. It may be changed only by further written agreement, signed by both parties. It supersedes and merges within it all prior agreements and understandings between these parties, whether written or oral, express or implied. In interpreting and construing this Agreement, the fact that one or the other of the Company or Roseborough may have drafted this Agreement or any provision hereof shall not be given any weight or relevance whatsoever.

 

	
12.  
	WAIVER

 

No waiver of any provision of this Agreement shall be valid unless in writing signed by the waiving party, nor shall any waiver or failure to enforce any right hereunder constitute a waiver of that right or of any other right under this Agreement.

 

	
13.  
	NOTICE

 

13.1  Any notice, request or other document to be delivered under this Agreement by any party to another will be in writing and delivered personally or sent by facsimile or certified or registered mail, postage prepaid. Any such notice, request or other document will be deemed to have been given to and received by the party to whom it was addressed on delivery, if delivered personally, on transmission, if sent by facsimile, and if mailed, on the seventh day following mailing. In the event of disruption of postal services for any reason whatsoever, notice will only be effected by facsimile or personal delivery.

	 
	 	5 	 
	

	 

 

13.2  Notices must be sent to the parties at the addresses set out on the first page of this Agreement or at such other address as the parties may from time to time advise.

 

	
14.  
	ASSIGNMENT

 

Neither this Agreement nor any benefit or interest granted by it may be assigned by any party to this Agreement without the written consent of the other.

 

	
15.  
	GOVERNING LAW

 

This Agreement will be interpreted in accordance with the laws of British Columbia.

 

	
16.  
	FURTHER ACTS

 

The parties agree to do all acts and things as are necessary and reasonable in order to ensure the terms of this Agreement are complied with.

 

	
17.  
	TIME OF ESSENCE

 

Time is of the essence of this Agreement.

 

	
18.  
	SAVINGS CLAUSE

 

If any provision of this Agreement is held to be invalid or unenforceable to any extent in any context, it shall nevertheless be enforced to the fullest extent allowed by law in that and other contexts, and the validity and force of the remainder of this Agreement shall not be affected thereby.

 

	
19.  
	ENUREMENT

 

This Agreement endures to the benefit of and is binding on the parties to this Agreement and their respective heirs, executors, administrators, successors and permitted assigns.

 

	
20.  
	EFFECTIVE DATE

 

Notwithstanding the date that this Agreement is executed and delivered by the parties, it will have effect from the reference date first given above.

 

By his signature below, Roseborough acknowledges that Roseborough has read and understands this Agreement, that its terms have been fully and fairly negotiated by Roseborough and the Company, and that Roseborough signs it voluntarily.

	 
	 	6 	 
	

	 

	
 

SIGNED, AND DELIVERED by MARK ROSEBOROUGH in the presence of:

 

 

 

Name

 

Address

 

Occupation
	
 

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MARK ROSEBOROUGH

 

EPOD International Inc.

 

	By: 	                                                 	 	 
	 	Authorized Signatory 	 	 
	 	 	 	 

	
 

	 	7 	 
	

	

SCHEDULE A

 

EPOD INTERNATIONAL INC.

 

RESPONSIBILITIES OF

 

PRESIDENT 

 

The President will:

 

	1.  	Assist in the long term planning for the Company; 

 

	2.  	Oversee the implementation of policies set by the Board of Directors;

 

	3.  	Report to shareholders regularly on the development and performance of the Company;

 

	4.  	In consultation with the Board of Directors, determine the direction and progress of the Company by considering, drafting and implementing both short and long range plans for the Company;

 

	5.  	Provide day to day management and oversight of all aspects of the operations of the Company and its subsidiaries; 

 

	6.  	Perform due diligence reviews of additional technologies and applications presented to the Company;

 

	7.  	Liase with the Company’s advisory board and specialists during the development of the Company’s current products and the review of future products and applications;

 

	8.  	Assist the Chief Executive Officer in relation to the Company’s fund raising and investor relations activities; and

 

	9.  	Participate as a member of the Executive Committee of the Board.

	 
	 	8

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