Document:

fsb2a10907ex10iii_serviceair.htm

     

    C
      O N S U L T I N G  A G R E E M E N T

     

    THIS
      AGREEMENT is dated for
      reference the 10Th day of
      September,
      2007.

     

    BETWEEN:

     

    SERVICE
      AIR GROUP INC. (US), a body corporate with offices at 7164-120th
      Street, Surrey, British Columbia, Canada V3W 3M8

     

    (the
      “Company”)

     

    AND:

     

    MOHAMMAD
      SULTAN, with an address at 11083-132nd
      Street, Surrey,
      British Columbia , V3T 3X1

     

    (the
      “Contractor”)

     

    WHEREAS:

     

    A.  The
      Company hereby acknowledges that
      the contractor had provided the Company with the services detailed in Schedule A hereto (the “Services”) in regards to
      the Company’s management and operations since December 18, 2003;

     

    B.  The
      Contractor had been providing the
      Services to the Company without an agreement since December 18, 2003 and has
      agreed to continue his services on the terms and conditions of this
      Agreement.

     

    NOW
      THEREFORE THIS AGREEMENT WITNESSES
      that in consideration of the mutual covenants and promises set forth herein,
      and
      for other good and valuable consideration, the receipt and sufficiency of which
      is hereby acknowledged by each, the parties hereto agree as
      follows:

     

    ARTICLE 1

     

    APPOINTMENT
      AND AUTHORITY OF CONTRACTOR

     

    1.1  Appointment
      of Contractor.  The Company hereby appoints the Contractor to
      perform the Services for the benefit of the Company as hereinafter set forth,
      and the Company hereby authorizes the Contractor to exercise such powers as
      provided under this Agreement.  The Contractor accepts such
      appointment on the terms and conditions herein set forth.

     

    1.2  Performance
      of Services.  The Services hereunder have been and shall continue
      to be provided on the basis of the following terms and conditions:

     

    
      	
              (a)  

            	
              the
                Contractor shall report directly to the Chief Executive Officer and/or
                President of the Company;

            

    

     

    
      	
              (b)  

            	
              the
                Contractor shall faithfully, honestly and diligently serve the Company
                and
                cooperate with the Company and utilize maximum professional skill
                and care
                to ensure that all services rendered hereunder, including the Services,
                are to the satisfaction of the Company,

            

    

     

     

    
      
        
        

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      	 	acting
              reasonably, and the Contractor shall provide any other services not
              specifically mentioned herein, but which by reason of the Contractor's
              capability the Contractor knows or ought to know to be necessary to
              ensure
              that the best interests of the Company are maintained;
              and

    

     

    
      	
              (c)  

            	
              the
                Company shall report the results of the Contractor's duties hereunder
                as
                may be requested by the Company from time to
                time.

            

    

     

    1.3  Authority
      of Contractor.  The Contractor shall have no right or authority,
      express or implied, to commit or otherwise obligate the Company in any manner
      whatsoever except to the extent specifically provided herein or specifically
      authorized in writing by the Company.

     

    1.4  Independent
      Contractor.  In performing the Services, the Contractor shall be
      an independent contractor and not an employee or agent of the Company, except
      that the Contractor shall be the agent of the Company solely in circumstances
      where the Contractor must be the agent to carry out its obligations as set
      forth
      in this Agreement.  Nothing in this Agreement shall be deemed to
      require the Contractor to provide the Services exclusively to the Company and
      the Contractor hereby acknowledges that the Company is not required and shall
      not be required to make any remittances and payments required of employers
      by
      statute on the Contractor's behalf and the Contractor or any of its agents
      shall
      not be entitled to the fringe benefits provided by the Company to its
      employees.

     

    ARTICLE 2

     

    CONTRACTOR'S
      AGREEMENTS

     

    2.1  Expense
      Statements.  The Contractor may incur expenses in the name of the
      Company as agreed in advance in writing by the Company, provided that such
      expenses relate solely to the carrying out of the Services.  The
      Contractor will immediately forward all invoices for expenses incurred on behalf
      of and in the name of the Company and the Company agrees to pay said invoices
      directly on a timely basis.  The Contractor agrees to obtain approval
      from the Company in writing for any individual expense of $1,000 or greater
      or
      any aggregate expense in excess of $1,000 incurred in any given month by the
      Contractor in connection with the carrying out of the Services.

     

    2.2  Regulatory
      Compliance.  The Contractor agrees to comply with all applicable
      securities legislation and regulatory policies in relation to providing the
      Services, including but not limited to United States securities laws (in
      particular, Regulation FD) and the policies of the United States Securities
      and
      Exchange Commission.

     

    2.3  Prohibition
      Against Insider Trading.  The Contractor hereby acknowledges that
      the Contractor is aware, and further agrees that the Contractor will advise
      those of its directors, officers, employees and agents who may have access
      to
      Confidential Information, that United States securities laws prohibit any person
      who has material, non-public information about a company from purchasing or
      selling securities of such a company or from communicating such information
      to
      any other person under circumstances in which it is reasonably foreseeable
      that
      such person is likely to purchase or sell such securities.

     

    ARTICLE 3

     

    COMPANY'S
      AGREEMENTS

     

    3.1  Compensation
      Shares. The compensation for the Services rendered by the Contractor
      pursuant to this Agreement shall be calculated as 10,000 (Ten Thousand) shares
      per month of the Company's restricted common stock (the “Compensation Shares”)
      for the Term, payable upon completion of the term.

     

    
      
        
        

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    3.2  Voting
      of Compensation Shares.  The Contractor covenants and agrees that,
      with respect to the Compensation Shares that it receives, it shall, at all
      times
      that it is the beneficial owner of such shares, vote such shares on all matters
      coming before it as a stockholder of the Company in the same manner as the
      majority of the board of directors of the Company shall recommend.

     

    3.3  Information.  Subject
      to the terms of this Agreement, including without limitation Article 5 hereof, and provided that the Contractor
      agrees that it will not disclose any material non-public information to any
      person or entity, the Company shall make available to the Contractor such
      information and data and shall permit the Contractor to have access to such
      documents as are reasonably necessary to enable it to perform the Services
      under
      this Agreement.  The Company also agrees that it will act reasonably
      and promptly in reviewing materials submitted to it from time to time by the
      Contractor and inform the Contractor of any material inaccuracies or omissions
      in such materials.

     

    ARTICLE 4

     

    DURATION,
      TERMINATION AND DEFAULT

     

    4.1  Effective
      Date.  This Agreement shall become effective as of the December
      18, 2003, (the “Effective Date”), and shall continue to December 17, 2008 (the
“Term”) or until earlier terminated pursuant to the terms of this
      Agreement.

     

    4.2  Termination.  Without
      prejudicing any other rights that the Company may have hereunder or at law
      or in
      equity, the Company may terminate this Agreement immediately upon delivery
      of
      written notice to the Contractor if:

     

    
      	
              (a)  

            	
              the
                Contractor breaches section 2.2 of this
                Agreement;

            

    

     

    
      	
              (b)  

            	
              the
                Contractor breaches any other material term of this Agreement and
                such
                breach is not cured to the reasonable satisfaction of the Company
                within
                thirty (30) days after written notice describing the breach in reasonable
                detail is delivered to the
                Contractor;

            

    

     

    
      	
              (c)  

            	
              the
                Company acting reasonably determines that the Contractor has acted,
                is
                acting or is likely to act in a manner detrimental to the Company
                or has
                violated or is likely to violate the confidentiality of any information
                as
                provided for in this Agreement;

            

    

     

    
      	
              (d)  

            	
              the
                Contractor is unable or unwilling to perform the Services under this
                Agreement, or

            

    

     

    
      	
              (e)  

            	
              the
                Contractor commits fraud, serious neglect or misconduct in the discharge
                of the Services.

            

    

     

    4.3  Duties
      Upon Termination.  Upon termination of this Agreement for any
      reason, the Contractor shall upon receipt of all sums due and owing, promptly
      deliver the following in accordance with the directions of the
      Company:

     

    
      	
              (a)  

            	
              a
                final accounting, reflecting the balance of expenses incurred on
                behalf of
                the Company as of the date of termination;
                and

            

    

     

    
      	
              (b)  

            	
              all
                documents pertaining to the Company or this Agreement, including
                but not
                limited to, all books of account, correspondence and contracts, provided
                that the Contractor shall be entitled thereafter to inspect, examine
                and
                copy all of the documents which it delivers in accordance with this
                provision at all reasonable times upon three (3) days’ notice to the
                Company.

            

    

     

     

    
      
        
        

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    4.4  Compensation
      of Contractor on Termination.  Upon termination of this Agreement,
      the Contractor shall be entitled to receive as its full and sole compensation
      in
      discharge of obligations of the Company to the Contractor under this Agreement
      all sums due and payable under this Agreement to the date of termination and
      the
      Contractor shall have no right to receive any further payments; provided,
      however, that the Company shall have the right to offset against any payment
      owing to the Contractor under this Agreement any damages, liabilities, costs
      or
      expenses suffered by the Company by reason of the fraud, negligence or wilful
      act of the Contractor, to the extent such right has not been waived by the
      Company.

     

    ARTICLE 5

     

    CONFIDENTIALITY
      AND NON-COMPETITION

     

    5.1  Maintenance
      of Confidential Information.  The Contractor acknowledges that in
      the course of its appointment hereunder the Contractor will, either directly
      or
      indirectly, have access to and be entrusted with information (whether oral,
      written or by inspection) relating to the Company or its respective affiliates,
      associates or customers (the “Confidential Information”).  For the
      purposes of this Agreement, “Confidential Information” includes, without
      limitation, any and all Developments (as defined herein), trade secrets,
      inventions, innovations, techniques, processes, formulas, drawings, designs,
      products, systems, creations, improvements, documentation, data, specifications,
      technical reports, customer lists, supplier lists, distributor lists,
      distribution channels and methods, retailer lists, reseller lists, employee
      information, financial information, sales or marketing plans, competitive
      analysis reports and any other thing or information whatsoever, whether
      copyrightable or uncopyrightable or patentable or unpatentable.  The
      Contractor acknowledges that the Confidential Information constitutes a
      proprietary right, which the Company is entitled to
      protect.  Accordingly the Contractor covenants and agrees that during
      the Term and thereafter until such time as all the Confidential Information
      becomes publicly known and made generally available through no action or
      inaction of the Contractor, the Contractor will keep in strict confidence the
      Confidential Information and shall not, without prior written consent of the
      Company in each instance, disclose, use or otherwise disseminate the
      Confidential Information, directly or indirectly, to any third
      party.

     

    5.2  Exceptions.
      The general prohibition contained in Section 5.1
      against the unauthorized disclosure, use or dissemination of the Confidential
      Information shall not apply in respect of any Confidential Information
      that:

     

    
      	
              (a)  

            	
              is
                available to the public generally in the form
                disclosed;

            

    

     

    
      	
              (b)  

            	
              becomes
                part of the public domain through no fault of the
                Contractor;

            

    

     

    
      	
              (c)  

            	
              is
                already in the lawful possession of the Contractor at the time of
                receipt
                of the Confidential Information; or

            

    

     

    
      	
              (d)  

            	
              is
                compelled by applicable law to be disclosed, provided that the Contractor
                gives the Company prompt written notice of such requirement prior
                to such
                disclosure and provides assistance in obtaining an order protecting
                the
                Confidential Information from public
                disclosure.

            

    

     

    5.3  Developments.  Any
      information, data, work product or any other thing or documentation whatsoever
      which the Contractor, either by itself or in conjunction with any third party,
      conceives, makes, develops, acquires or acquires knowledge of during the
      Contractor’s appointment with the Company or which the Contractor, either by
      itself or in conjunction with any third party, shall conceive, make, develop,
      acquire or acquire knowledge of (collectively the “Developments”) during the
      Term or at any time thereafter during which the Contractor is engaged by the
      Company that is related to the business 

     

     

     

    
      
        
        

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    of
      designing
      and supplying security systems for the cargo transit industry shall
      automatically form part of the Confidential Information and shall become and
      remain the sole and exclusive property of the Company.  Accordingly,
      the Contractor does hereby irrevocably, exclusively and absolutely assign,
      transfer and convey to the Company in perpetuity all worldwide right, title
      and
      interest in and to any and all Developments and other rights of whatsoever
      nature and kind in or arising from or pertaining to all such Developments
      created or produced by the Contractor during the course of performing this
      Agreement, including, without limitation, the right to effect any registration
      in the world to protect the foregoing rights.  The Company shall have
      the sole, absolute and unlimited right throughout the world, therefore, to
      protect the Developments by patent, copyright, industrial design, trademark
      or
      otherwise and to make, have made, use, reconstruct, repair, modify, reproduce,
      publish, distribute and sell the Developments, in whole or in part, or combine
      the Developments with any other matter, or not use the Developments at all,
      as
      the Company sees fit.

     

    5.4  Protection
      of Developments.  The Contractor does hereby agree that, both
      before and after the termination of this Agreement, the Contractor shall perform
      such further acts and execute and deliver such further instruments, writings,
      documents and assurances (including, without limitation, specific assignments
      and other documentation which may be required anywhere in the world to register
      evidence of ownership of the rights assigned pursuant hereto) as the Company
      shall reasonably require in order to give full effect to the true intent and
      purpose of the assignment made under Section 5.3
      hereof.  If the Company is for any reason unable, after reasonable
      effort, to secure execution by the Contractor on documents needed to effect
      any
      registration or to apply for or prosecute any right or protection relating
      to
      the Developments, the Contractor hereby designates and appoints the Company
      and
      its duly authorized officers and agents as the Contractor’s agent and attorney
      to act for and in the Contractor’s behalf and stead to execute and file any such
      document and do all other lawfully permitted acts necessary or advisable in
      the
      opinion of the Company to effect such registration or to apply for or prosecute
      such right or protection, with the same legal force and effect as if executed
      by
      the Contractor.

     

    5.5  Remedies.  The
      parties to this Agreement recognize that any violation or threatened violation
      by the Contractor of any of the provisions contained in this Article 5 will result in immediate and irreparable
      damage to the Company and that the Company could not adequately be compensated
      for such damage by monetary award alone.  Accordingly, the Contractor
      agrees that in the event of any such violation or threatened violation, the
      Company shall, in addition to any other remedies available to the Company at
      law
      or in equity, be entitled as a matter of right to apply to such relief by way
      of
      restraining order, temporary or permanent injunction and to such other relief
      as
      any court of competent jurisdiction may deem just and proper.

     

    5.6  Reasonable
      Restrictions.  The Contractor agrees that all restrictions in this
Article 5 are reasonable and valid, and all
      defenses to the strict enforcement thereof by the Company are hereby waived
      by
      the Contractor.

     

    ARTICLE 6

     

    DEVOTION
      TO CONTRACT

     

    6.1  Devotion
      to Contract.  During the term of this Agreement, the Contractor
      shall devote sufficient time, attention, and ability to the business of the
      Company, and to any associated company, as is reasonably necessary for the
      proper performance of the Services pursuant to this
      Agreement.  Nothing contained herein shall be deemed to require the
      Contractor to devote its exclusive time, attention and ability to the business
      of the Company.  During the term of this Agreement, the Contractor
      shall, and shall cause each of its agents assigned to performance of the
      Services on behalf of the Contractor, to:

     

    
      	
              (a)  

            	
              at
                all times perform the Services faithfully, diligently, to the best
                of its
                abilities and in the best interests of the
                Company;

            

    

     

     

    
      
        
        

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              (b)  

            	
              devote
                such of its time, labour and attention to the business of the Company
                as
                is necessary for the proper performance of the Services hereunder;
                and

            

    

     

    
      	
              (c)  

            	
              refrain
                from acting in any manner contrary to the best interests of the Company
                or
                contrary to the duties of the Contractor as contemplated
                herein.

            

    

     

    6.2  Other
      Activities.  The Contractor shall not be precluded from acting in
      a function similar to that contemplated under this Agreement for any other
      person, firm or company.

     

    ARTICLE 7

     

    PRIVATE
      PLACEMENT OF COMPENSATION SHARES

     

    7.1  Documents
      Required from Contractor.  The Contractor shall complete, sign and
      return to the Company as soon as possible, on request by the Company, such
      additional documents, notices and undertakings as may be required by regulatory
      authorities and applicable law.

     

    7.2  Acknowledgements
      of Contractor  The Contractor acknowledges and agrees
      that:

     

    
      	
              (a)  

            	
              the
                Contractor agrees and acknowledges that none of the Compensation
                Shares
                have been registered under the Securities Act of 1933 or under any
                state
                securities or "blue sky" laws of any state of the United States,
                and,
                unless so registered, may not be offered or sold in the United States
                or,
                directly or indirectly, to U.S. Persons (as that term is defined
                in
                Regulation S under the Securities Act of 1933), except in accordance
                with
                the provisions of Regulation S, pursuant to an effective registration
                statement under the Securities Act of 1933, or pursuant to an exemption
                from, or in a transaction not subject to, the registration requirements
                of
                the Securities Act of 1933 and in each case only in accordance with
                applicable state securities laws;

            

    

     

    
      	
              (b)  

            	
              the
                Contractor has not acquired the Compensation Shares as a result of,
                and
                will not itself engage in, any “directed selling efforts” (as defined in
                Regulation S under the 1933 Act) in the United States in respect
                of any of
                the Securities which would include any activities undertaken for
                the
                purpose of, or that could reasonably be expected to have the effect
                of,
                conditioning the market in the United States for the resale of any
                of the
                Compensation Shares; provided, however, that the Contractor may sell
                or
                otherwise dispose of any of the Compensation Shares pursuant to
                registration thereof under the 1933 Act and any applicable state
                securities laws or under an exemption from such registration
                requirements;

            

    

     

    
      	
              (c)  

            	
              the
                Compensation Shares will be subject in the United States to a one
                (1) year
                hold period from the date of issuance of the Compensation Shares
                unless
                such Compensation Shares are registered with the Securities and Exchange
                Commission (“SEC”);

            

    

     

    
      	
              (d)  

            	
              the
                decision to execute this Agreement and purchase the Compensation
                Shares
                agreed to be purchased hereunder has not been based upon any oral
                or
                written representation as to fact or otherwise made by or on behalf
                of the
                Company other than those made by the Company in the information the
                Company has filed with the SEC;

            

    

     

    
      	(e) 	 it
              will indemnify and hold harmless the Company and, where applicable,
              its
              directors, officers, employees, agents, advisors and shareholders from
              and
              against any and all loss, liability, claim, damage and expense whatsoever
              (including, but not limited to, any and all fees, costs and expenses
              whatsoever reasonably incurred in investigating, preparing or defending
              against any claim, lawsuit, administrative proceeding or investigation
              whether 

    

     

     

    
      
        
        

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              commenced
                or threatened) arising out of or based upon any representation or
                warranty
                of the Contractor contained herein or in any document furnished by
                the
                Contractor to the Company in connection herewith being untrue in
                any
                material respect or any breach or failure by the Contractor to comply
                with
                any covenant or agreement made by the Contractor to the Company in
                connection therewith;

            

    

     

    
      	
              (f)  

            	
              the
                issuance and sale of the Compensation Shares to the Contractor will
                not be
                completed if it would be unlawful;

            

    

     

    
      	
              (g)  

            	
              the
                Compensation Shares are not listed on any stock exchange or subject
                to
                quotation and no representation has been made to the Contractor that
                the
                Compensation Shares will become listed on any other stock exchange
                or
                subject to quotation on any other quotation system except that market
                makers are currently making markets in the Company’s common stock on the
                OTC Bulletin Board;

            

    

     

    
      	
              (h)  

            	
              no
                securities commission or similar regulatory authority has reviewed
                or
                passed on the merits of the Compensation
                Shares;

            

    

     

    
      	
              (i)  

            	
              there
                is no government or other insurance covering the Compensation
                Shares;

            

    

     

    
      	
              (j)  

            	
              there
                are risks associated with an investment in the Compensation Shares,
                including the risk that the Contractor could lose all of its
                investment;

            

    

     

    
      	
              (k)  

            	
              the
                Contractor and the Contractor’s advisor(s) have had a reasonable
                opportunity to ask questions of and receive answers from the Company
                in
                connection with the distribution of the Compensation Shares hereunder,
                and
                to obtain additional information, to the extent possessed or obtainable
                without unreasonable effort or expense, necessary to verify the accuracy
                of the information about the
                Company;

            

    

     

    
      	
              (l)  

            	
              the
                books and records of the Company were available upon reasonable notice
                for
                inspection, subject to certain confidentiality restrictions, by the
                Contractor during reasonable business hours at its principal place
                of
                business, and all documents, records and books in connection with
                the
                distribution of the Compensation Shares hereunder have been made
                available
                for inspection by the Contractor, the Contractor’s lawyer and/or
                advisor(s);

            

    

     

    
      	
              (m)  

            	
              the
                Company will refuse to register any transfer of the Compensation
                Shares
                not made in accordance with the provisions of Regulation S, pursuant
                to an
                effective registration statement under the 1933 Act or pursuant to
                an
                available exemption from the registration requirements of the 1933
                Act;

            

    

     

    
      	
              (n)  

            	
              the
                statutory and regulatory basis for the exemption claimed for the
                offer of
                the Compensation Shares, although in technical compliance with Regulation
                S, would not be available if the offering is part of a plan or scheme
                to
                evade the registration provisions of the 1933 Act;
                and

            

    

     

    
      	
              (o)  

            	
              the
                Contractor has been advised to consult the Contractor’s own legal, tax and
                other advisors with respect to the merits and risks of an investment
                in
                the Compensation Shares and with respect to applicable resale
                restrictions, and it is solely responsible (and the Company is not
                in any
                way responsible) for compliance
                with:

            

    

     

     

    
      
        
        

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              (i)  

            	
              any
                applicable laws of the jurisdiction in which the Contractor is resident
                in
                connection with the distribution of the Compensation Shares hereunder,
                and

            

    

     

    
      	
              (ii)  

            	
              applicable
                resale restrictions.

            

    

     

    7.3  Representations,
      Warranties and Covenants of the Contractor.  The Contractor hereby
      represents and warrants to and covenants with the Company (which
      representations, warranties and covenants shall survive the end of the expiry
      of
      the Term or early termination of this Agreement) that:

     

    
      	
              (a)  

            	
              the
                Contractor is not a U.S. Person and is a resident in
                Canada;

            

    

     

    
      	
              (b)  

            	
              the
                Contractor is not acquiring the Compensation Shares for the account
                or
                benefit of, directly or indirectly, any U.S.
                Person;

            

    

     

    
      	
              (c)  

            	
              the
                sale of the Compensation Shares to the Contractor as contemplated
                in this
                Agreement complies with or is exempt from the applicable securities
                legislation of the jurisdiction of residence of the
                Contractor;

            

    

     

    
      	
              (d)  

            	
              the
                Contractor is acquiring the Compensation Shares for investment only
                and
                not with a view to resale or distribution and, in particular, it
                has no
                intention to distribute either directly or indirectly any of the
                Compensation Shares in the United States or to U.S.
                Persons;

            

    

     

    
      	
              (e)  

            	
              the
                Contractor is outside the United States when receiving and executing
                this
                Agreement and is acquiring the Compensation Shares as principal for
                the
                Contractor’s own account, for investment purposes only, and not with a
                view to, or for, resale, distribution or fractionalisation thereof,
                in
                whole or in part, and no other person has a direct or indirect beneficial
                interest in such Compensation
                Shares;

            

    

     

    
      	
              (f)  

            	
              the
                entering into of this Agreement and the transactions contemplated
                hereby
                have been duly authorized by all necessary corporate action on the
                part of
                the Contractor;

            

    

     

    
      	
              (g)  

            	
              the
                entering into of this Agreement and the transactions contemplated
                thereby
                will not result in the violation of any of the terms and provisions
                of any
                law applicable to the Contractor, or of any agreement, written or
                oral, to
                which the Contractor may be a party or by which the Contractor is
                or may
                be bound;

            

    

     

    
      	
              (h)  

            	
              the
                Contractor has duly executed and delivered this Agreement and it
                constitutes a valid and binding agreement of the Contractor enforceable
                against the Contractor in accordance with its
                terms;

            

    

     

    
      	
              (i)  

            	
              the
                Contractor has the requisite knowledge and experience in financial
                and
                business matters as to be capable of evaluating the merits and risks of
                the prospective investment in the Compensation Shares and the
                Company;

            

    

     

    
      	
              (j)  

            	
              the
                Contractor is not an underwriter of, or dealer in, the common shares
                of
                the Company, nor is the Contractor participating, pursuant to a
                contractual agreement or otherwise, in the distribution of the
                Compensation Shares;

            

    

     

    
      	
              (k)  

            	
              the
                Contractor is not aware of any advertisement of pertaining to the
                Company
                or any of the Compensation Shares;
                and

            

    

     

     

    
      
        
        

        D/WLM/872185.1

        
        

      

      
        
        

        
          

        

      

      
        -9-

      

    

     

     

    
      	
              (l)  

            	
              no
                person has made to the Contractor any written or oral
                representations:

            

    

     

    
      	
              (i)  

            	
              that
                any person will resell or repurchase any of the Compensation
                Shares;

            

    

     

    
      	
              (ii)  

            	
              that
                any person will refund the purchase price of any of the Compensation
                Shares;

            

    

     

    
      	
              (iii)  

            	
              as
                to the future price or value of any of the Compensation Shares;
                or

            

    

     

    
      	
              (iv)  

            	
              that
                any of the Compensation Shares will be listed and posted for trading
                on
                any stock exchange or automated dealer quotation system or that
                application has been made to list and post any of the Compensation
                Shares
                of the Company on any stock exchange or automated dealer quotation
                system,
                except that currently certain market makers make market in the common
                shares of the Company on the OTC Bulletin
                Board.

            

    

     

    7.4  Legending
      of Compensation Shares.  The Contractor hereby acknowledges that
      upon the issuance thereof, and until such time as the same is no longer required
      under the applicable securities laws and regulations, the certificates
      representing any of the Compensation Shares will bear a legend in substantially
      the following form:

     

    NONE
      OF THE SECURITIES REPRESENTED HEREBY HAVE BEEN REGISTERED UNDER THE 1933 ACT,
      OR
      ANY U.S. STATE SECURITIES LAWS, AND, UNLESS SO REGISTERED, MAY NOT BE OFFERED
      OR
      SOLD, DIRECTLY OR INDIRECTLY, IN THE UNITED STATES (AS DEFINED HEREIN) OR TO
      U.S. PERSONS EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF REGULATION S UNDER
      THE
      1933 ACT, PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE 1933 ACT,
      OR
      PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO,
      THE
      REGISTRATION REQUIREMENTS OF THE 1933 ACT AND IN EACH CASE ONLY IN ACCORDANCE
      WITH APPLICABLE STATE SECURITIES LAWS.  IN ADDITION, HEDGING
      TRANSACTIONS INVOLVING THE SECURITIES MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE
      WITH THE 1933 ACT.  "UNITED STATES" AND "U.S. PERSON" ARE AS DEFINED
      BY REGULATION S UNDER THE 1933 ACT.

     

    7.5  The
      Contractor hereby acknowledges and agrees to the Company making a notation
      on
      its records or giving instructions to the registrar and transfer agent of the
      Company in order to implement the restrictions on transfer set forth and
      described in this Agreement.

     

    ARTICLE 8

     

    MISCELLANEOUS

     

    8.1  Notices.  All
      notices required or allowed to be given under this Agreement shall be made
      either personally by delivery to or by facsimile transmission to the address
      as
      hereinafter set forth or to such other address as may be designated from time
      to
      time by such party in writing:

     

     

    
      
        
        

        D/WLM/872185.1

        
        

      

      
        
        

        
          

        

      

      
        -10-

      

    

     

     

     

    
      	
              (a)  

            	
              in
                the case of the Company, to:

            

    

     

    Service
      Air Group Inc. (NJ, USA)

    7164-120th
      Street 

    Surrey,
      British Columbia 

    Canada
      V3W 3M8

     

    Attention:  President

     

    Fax
      No.
      (604) 288-5064

     

    
      	
              (b)  

            	
              and
                in the case of the Contractor to:

            

    

     

    Mohammad
      Sultan

    11083-132nd
      Street

    Surrey,
      British Columbia

    Canada  V3T
      3X1

    

                                                  
      Facsimile:  (604) 288-5064

     

    8.2  Change
      of Address.  Any party may, from time to time, change its address
      for service hereunder by written notice to the other party in the manner
      aforesaid.

     

    8.3  Entire
      Agreement.  As of from the date hereof, any and all previous
      agreements, written or oral between the parties hereto or on their behalf
      relating to the appointment of the Contractor by the Company are null and
      void.  The parties hereto agree that they have expressed herein their
      entire understanding and agreement concerning the subject matter of this
      Agreement and it is expressly agreed that no implied covenant, condition, term
      or reservation or prior representation or warranty shall be read into this
      Agreement relating to or concerning the subject matter hereof or any matter
      or
      operation provided for herein.

     

    8.4  Further
      Assurances.  Each party hereto will promptly and duly execute and
      deliver to the other party such further documents and assurances and take such
      further action as such other party may from time to time reasonably request
      in
      order to more effectively carry out the intent and purpose of this Agreement
      and
      to establish and protect the rights and remedies created or intended to be
      created hereby.

     

    8.5  Waiver.  No
      provision hereof shall be deemed waived and no breach excused, unless such
      waiver or consent excusing the breach is made in writing and signed by the
      party
      to be charged with such waiver or consent.  A waiver by a party of any
      provision of this Agreement shall not be construed as a waiver of a further
      breach of the same provision.

     

    8.6  Amendments
      in Writing.  No amendment, modification or rescission of this
      Agreement shall be effective unless set forth in writing and signed by the
      parties hereto.

     

    8.7  Assignment.  Except
      as herein expressly provided, the respective rights and obligations of the
      Contractor and the Company under this Agreement shall not be assignable by
      either party without the written consent of the other party and shall, subject
      to the foregoing, enure to the benefit of and be binding upon the Contractor
      and
      the Company and their permitted successors or assigns.  Nothing herein
      expressed or implied is intended to confer on any person other than the parties
      hereto any rights, remedies, obligations or liabilities under or by reason
      of
      this Agreement.

     

    8.8  Severability.  In
      the event that any provision contained in this Agreement shall be declared
      invalid, illegal or unenforceable by a court or other lawful authority of
      competent jurisdiction, such provision shall be deemed not to affect or impair
      the validity or enforceability of any other provision of this Agreement, which
      shall continue to have full force and effect.

     

     

    
      
        
        

        D/WLM/872185.1

        
        

      

      
        
        

        
          

        

      

      
        -11-

      

    

     

    8.9  Headings.  The
      headings in this Agreement are inserted for convenience of reference only and
      shall not affect the construction or interpretation of this
      Agreement.

     

    8.10  Number
      and Gender.  Wherever the singular or masculine or neuter is used
      in this Agreement, the same shall be construed as meaning the plural or feminine
      or a body politic or corporate and vice versa where the context so
      requires.

     

    8.11  Time.  Time
      shall be of the essence of this Agreement. In the event that any day on or
      before which any action is required to be taken hereunder is not a business
      day,
      then such action shall be required to be taken at or before the requisite time
      on the next succeeding day that is a business day.  For the purposes
      of this Agreement, “business day” means a day which is not Saturday or Sunday or
      a statutory holiday in Reno, Nevada, U.S.A.

     

    8.12  Enurement.  This
      Agreement is intended to bind and enure to the benefit of the Company, its
      successors and assigns, and the Contractor and the personal legal
      representatives of the Contractor.

     

    8.13  Counterparts.  This
      Agreement may be executed in several counterparts, each of which will be deemed
      to be an original and all of which will together constitute one and the same
      instrument.

     

    8.14  Currency.  Unless
      otherwise provided, all dollar amounts referred to in this Agreement are in
      lawful money of the United States of America.

     

    8.15  Electronic
      Means.  Delivery of an executed copy of this Agreement by
      electronic facsimile transmission or other means of electronic communication
      capable of producing a printed copy will be deemed to be execution and delivery
      of this Agreement as of the effective date of this Agreement.

     

    8.16  Proper
      Law.  This Agreement will be governed by and construed in
      accordance with the law of British Columbia.  The parties hereby
      attorn to the jurisdiction of the Courts in the Province of British
      Columbia.

     

    IN
      WITNESS WHEREOF, the parties have
      duly executed this Agreement as of the day and year first above
      written.

     

    SERVICE
      AIR GROUP INC. (US)

     

    Per:          /s/
      Mohammad
      Sultan                                                      

    Authorized
      Signatory

    Name:     Mohammad
      Sultan

    Title:       Director

    
 

    /s/Mohammad
      Sultan                                                      

                  
      Mohammad Sultan

     

    
 

    
      
        
        

        D/WLM/872185.1

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    SCHEDULE A                                           

     

     

    Pursuant
      to the Consulting Agreement, the Contractor will perform the following
      services:

     

    
      	
              1.  

            	
              reporting
                directly to the Board of Directors of the Company, the Contractor
                shall
                serve as the Chief Executive Officer, Chief Financial Officer
                and President of the
                Company;

            

    

     

    
      	
              2.  

            	
              the
                Contractor shall be responsible for setting the overall corporate
                direction for the Company, including establishing and maintaining
                budgets
                for the Company and ensuring the Company has adequate capital for
                its
                operations, marketing and general corporate activities, all subject
                to any
                applicable law and to instructions provided by the Board of Directors
                of
                the Company from time to time;

            

    

     

    
      	
              3.  

            	
              the
                Contractor shall faithfully, honestly and diligently serve the Company
                and
                cooperate with the Company and utilize maximum professional skill
                and care
                to ensure that all services rendered hereunder are to the satisfaction
                of
                the company, acting reasonably, and the Contractor shall provide
                any other
                services not specifically mentioned herein, but which by reason of
                the
                Contractor’s capability the Contractor knows or ought to know to be
                necessary to ensure that the best interests of the Company are
                maintained;

            

    

     

    
      	
              4.  

            	
              the
                Contractor shall assume, obey, implement and execute such duties,
                directions, responsibilities, procedures, policies and lawful orders
                as
                may be determined or given from time to time by the Company;
                and

            

    

     

    
      	
              5.  

            	
              the
                Contractor shall report the results of his/her duties hereunder to
                the
                Company as it may request from time to
                time.puredepth_8ka-ex1022.htm

     

    EXHIBIT
      10.22

     

    

    

     

    September
      14, 2007

    
       

      Thomas
        L.
        Marcus

      346
        Greenoaks Drive

      Atherton,
        CA  94027

       

      Re:           Employment
        with PureDepth, Inc.

       

      Dear
        Tom:

       

      PureDepth,
        Inc. (the “Company”) is pleased to extend you (hereinafter, “Employee”) the
        following offer of employment, on the terms set forth in this letter agreement
        (the “Agreement”), effective upon your acceptance by execution of a counterpart
        copy of this Agreement where indicated below (the “Effective
        Date”).

       

      1.           Employment.  Company
        hereby employs Employee, and Employee hereby accepts employment, upon the
        terms
        and conditions set forth herein.

       

      2.           Duties.

       

      2.1           Position.  Employee
        is employed as Chief Executive Officer (“CEO”) and shall report to and have the
        duties and responsibilities assigned by Company’s Board of Directors (“Board”)
        both upon initial hire and as may be reasonably assigned from time to
        time.  Employee shall perform faithfully and diligently all duties
        assigned to Employee.

       

      2.2           Best
        Efforts/Full-time.  Employee will expend Employee’s best efforts
        on behalf of Company, and will abide by all policies and decisions made by
        Company, as well as all applicable federal, state and local laws, regulations
        or
        ordinances.  Employee will act in the best interest of Company at all
        times.  Employee shall devote Employee’s full business time and
        efforts to the performance of Employee’s assigned duties for
        Company.  Employee may, without seeking or obtaining approval by the
        Board (so long as the following do not materially interfere with the performance
        of the Employee’s duties hereunder and such do not create a conflict of interest
        as more fully described in section 8 of this Agreement) (i) make and
        manage personal business investments of his choice; and (ii) serve in any
        capacity with any civic, educational, religious or charitable
        organization.

       

      2.3           Work
        Location.  Employee’s principal place of work shall be located at
        the Company’s primary office in the San Francisco Bay area.  Employee
        shall be required, as part of his duties, to travel extensively for business
        and
        such travel shall include international trips.

       

      3.           Term.

       

      3.1           Term.  The
        employment relationship pursuant to this Agreement shall be on an at-will
        basis
        and may be terminated by the Company or the Employee at any time, for any
        reason
        subject to the provisions regarding termination as set forth in section 7
        below.

       

      3.2           Start
        Date.  Employee’s employment with the Company will begin as of
        September 1, 2007 (the “Employment Date”).

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      4.           Compensation.

       

      4.1           Base
        Salary.  Subject to the terms of this Agreement, as compensation
        for Employee’s performance of Employee’s duties hereunder, Company shall pay to
        Employee a base salary of $276,000.00 per year (“Base Salary”), payable in
        accordance with the normal payroll practices of Company, less required
        deductions for state and federal withholding tax, social security and all
        other
        employment taxes.  In the event Employee’s employment under this
        Agreement is terminated by either party, for any reason, Employee will earn
        the
        Base Salary pro rated to the date of termination.

       

      4.2           Equity.  Subject
        to approval by the Board on or before each of the grant dates set forth below,
        Employee will be granted the following stock options (the
“Options”):

       

      (a)           an
        option to purchase 150,000 shares of Company common stock to be granted on
        the
        date which is the earlier of (i) the date of the Company’s achievement of a
        milestone to be determined by the Board, or (ii) October 15, 2007 (the
“September Option”), which shall vest on a monthly basis over the three (3)
        month period following September 11, 2007 (subject to Employee’s continuous
        service to the Company in any capacity); 

       

      (b)           an
        option to purchase 150,000 shares of Company common stock to be granted on
        December 1, 2007 (the “December Option”), which shall vest on a monthly
        basis over the three (3) month period following the grant date (subject to
        Employee’s continuous service to the Company in any capacity);

       

      (c)           at
        the discretion of the Board (upon recommendation of the Compensation Committee
        of the Board (the “Compensation Committee”)), an option to purchase shares of
        Company common stock to be granted on the date that the Board (upon
        recommendation of the Compensation Committee) determines whether and the
        extent
        to which the 90 Day Goals (described in Section 5 below) have been met, and
        which shall be exercisable for a number of shares to be determined by the
        Board
        (upon recommendation of the Compensation Committee) but not to exceed 37,500;
        and

       

      (d)           at
        the discretion of the Board (upon recommendation of the Compensation Committee),
        an option to purchase shares of Company common stock to be granted on the
        date
        that the Committee determines whether and the extent to which the 180 Day
        Goals
        (described in Section 5 below) have been met, and exercisable for a number
        of shares of Company common stock to be determined by the Board (upon
        recommendation of the Compensation Committee) but not to exceed
        37,500.

       

      The
        exercise price of each of the foregoing Options will be equal to the closing
        price of the Company’s common stock on the Option grant date as reported by the
        OTC Bulletin Board.  Each Option will also be subject to the terms and
        conditions of the Company’s 2006 Stock Incentive Plan and form of stock option
        agreement, which Employee will be required to sign as a condition of receiving
        the Option.

       

      4.3           Customary
        Fringe Benefits.  Employee will be eligible for all customary and
        usual fringe benefits generally available to employees of Company subject
        to the
        terms and conditions of Company’s benefit plan documents.  Company
        reserves the right to change or eliminate the fringe benefits on a prospective
        basis, at any time.

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

      5.           Performance
        Bonus.  Employee shall be entitled to a performance bonus based on
        achievement of certain goals as determined by the Compensation
        Committee.

       

      5.1           Ninety
        (90) Day Goals.  Employee and the Compensation Committee shall
        mutually establish goals to be achieved by Employee within the initial
        90 days of Employee’s employment (“90 Day Goals”).  Such
        goals shall be established within the initial ten (10) day period following
        Employee’s execution of this Agreement.

       

      The
        90 Day Goals target bonus will be $50,000 (the “90 Day
        Bonus”).  Achievement of the 90 Day Goals and eligibility for the
        90 Day Bonus will be determined by the evaluation of the Compensation
        Committee.  The 90 Day Bonus will be paid (in full or in part) by
        December 15, 2007.

       

      5.2           180
        Day Goals.  The 180 Day Goals will be mutually established by
        the Compensation Committee and Employee promptly following the October 3,
        2007 Board meeting.

       

      The
        180 Day Goals target bonus will be $50,000 (the “180 Day
        Bonus”).  Achievement of the 180 Day Goals and eligibility for the 180
        Day Bonus will be determined by the evaluation of the Compensation Committee
        not
        later than February 29, 2008 and paid (in full or in part) by
        March 15, 2008.

       

      6.           Business
        Expenses.  Employee will be reimbursed for all reasonable,
        out-of-pocket business expenses incurred in the performance of Employee’s duties
        on behalf of Company.  To obtain reimbursement, expenses must be
        submitted promptly with appropriate supporting documentation in accordance
        with
        Company’s policies.

       

      7.           Termination
        of Employee’s Employment.

       

      7.1           Termination
        for Cause by Company.  Although Company anticipates a mutually
        rewarding employment relationship with Employee, Company may terminate
        Employee’s employment immediately at any time for Cause if the Board finds that
        good grounds exist for a “for cause” termination.  For purposes of
        this Agreement, Cause shall mean:

       

      (a)           the
        Employee’s theft, dishonesty, willful misconduct, breach of fiduciary duty for
        personal profit, or falsification of any Company documents or
        records;

       

      (b)           the
        Employee’s unauthorized use, misappropriation, destruction or diversion of any
        material asset or corporate opportunity of the Company (including, without
        limitation, the Employee’s improper use or disclosure of the Company’s
        confidential or proprietary information or his failure to abide by Company
        policies relating to confidentiality or reasonable workplace
        conduct);

       

      (c)           any
        intentional act by the Employee which has a material detrimental effect on
        the
        Company’s reputation or business;

       

      (d)           any
        violation of the Company’s Code of Ethics, as previously approved by the Board,
        as well as Employee’s material failure to abide by the Company’s policies, as
        may be established from time to time;

       

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

      (e)           any
        material breach by the Employee of this Agreement and any other agreement
        between the Company and Employee, including without limitation, the Company’s
        Employee Proprietary Rights Agreement/Non-Disclosure Agreement, which breach
        is
        not cured within 15 days after Employee receives notice from the Board
        specifying said breach; or

       

      (f)           the
        Employee’s conviction (including any plea of guilty or nolo contendere) of any
        criminal act involving fraud, dishonesty, misappropriation or moral turpitude,
        or which impairs the Employee’s ability to perform his duties with the
        Company.

       

      In
        the
        event Employee’s employment is terminated in accordance with this
        subsection 7.1, Employee shall be entitled to receive only the Base Salary
        then in effect, pro rated to the date of termination.  Employee will
        also be permitted to retain all rights to fringe benefits and/or equity that
        had
        vested as of the date of his termination.  All other Company
        obligations to Employee pursuant to this Agreement will become automatically
        terminated and completely extinguished.  Employee will not be entitled
        to receive the Severance described in subsection 7.2 below.

       

      7.2           Termination
        Without Cause by Company/Severance.

       

      (a)           Company
        may terminate Employee’s employment under this Agreement without Cause at any
        time on thirty (30) days’ advance written notice to Employee.  In the
        event of such termination, Employee willreceive the following:

       

      (i)           the
        Base Salary then in effect, pro rated to the date of termination;

       

      (ii)           a
        “Severance Payment” equal to four and one-half (4.5) months of Employee’s Base
        Salary (the “Severance Period”) then in effect on the date of termination, less
        applicable withholding, payable in accordance with the Company’s standard
        payroll procedures following the effective date of the release of claims
        described in (b) herein;

       

      (iii)           in
        the event Employee is covered by the Company’s group medical plan as of his
        employment termination and he timely elects to continue coverage under that
        plan
        pursuant to applicable law (“COBRA”), the Company will pay Employee’s COBRA
        premiums until the earlier of (A) Employee’s coverage under another group
        health plan, or (B) the last day of the Severance Period; thereafter,
        Employee shall be solely responsible for payment of his COBRA premiums;
        and

       

      (iv)           to
        the extent that the September Option and/or the December Option are then
        outstanding and shares subject thereto are not yet vested, such shares shall
        become fully vested immediately prior to such termination.

       

      (b)           The
        Severance Payment, the COBRA premiums and the accelerated vesting of the
        September Option and/or December Option (hereafter, collectively referred
        to in
        total as “Severance”) shall be provided to Employee subject to the
        following:

       

      (i)           Employee
        complies with all surviving provisions of this Agreement as specified in
        subsection 13.8 below; and

       

      (ii)           Employee
        executes a full general release in a form satisfactory to the Company, releasing
        all claims, known or unknown, that Employee may have against Company arising
        out
        of or any way related to Employee’s employment or termination of employment with
        Company.

       

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

      7.3           Voluntary
        Resignation by Employee for Good Reason/Severance.  Employee may
        voluntarily resign Employee’s position with Company for Good Reason, at any time
        on thirty (30) days’ advance written notice.  In the event of
        Employee’s resignation for Good Reason, Employee will be entitled to receive the
        following:  (i) Base Salary then in effect, prorated to the date
        of termination; and (ii) the Severance described in subsection 7.2
        above, provided Employee complies with all of the conditions in
        subsection 7.2 above.  All other Company obligations to Employee
        pursuant to this Agreement will become automatically terminated and completely
        extinguished.  Employee will be deemed to have resigned for Good
        Reason in the following circumstances:  (a) Company’s material
        breach of this Agreement; (b) Employee’s Base Salary is materially reduced
        below Employee’s salary in effect at any time during the preceding twelve
        months, unless the reduction is made as part of, and is generally consistent
        with, a general reduction of senior executive salaries; (c) Employee’s
        position and/or duties are modified so that Employee’s duties are no longer
        consistent with the position of CEO or Employee no longer reports to the
        Board
        of Directors; or (d) Company relocates Employee’s principal place of work
        to a location away from the location specified in subsection 2.3, without
        Employee’s prior written approval.

       

      7.4           Voluntary
        Resignation by Employee Without Good Reason.  Employee may
        voluntarily resign Employee’s position with Company, at any time on thirty (30)
        days’ advance written notice.  In the event of Employee’s resignation,
        Employee will be entitled to receive only the Base Salary for the thirty-day
        notice period.  All other Company obligations to Employee pursuant to
        this Agreement will become automatically terminated and completely
        extinguished.  In addition, Employee will not be entitled to receive
        the Severance described in subsection 7.2 above.

       

      8.           No
        Conflict of Interest.  During the term of Employee’s employment
        with Company and during any period Employee is receiving payments from Company
        pursuant to this Agreement, Employee must not engage in any work, paid or
        unpaid, that creates an actual conflict of interest with
        Company.  Such work shall include, but is not limited to, directly or
        indirectly competing with Company in any way, or acting as an officer, director,
        employee, consultant, over 5% stockholder, volunteer, lender, or agent of
        any
        business enterprise of which is in direct competition with the business in
        which
        Company is now engaged or in which Company becomes engaged during the term
        of
        Employee’s employment with Company, as may be determined by the Board in its
        sole discretion.  If the Board believes such a conflict exists during
        the term of this Agreement, the Board may ask Employee to choose to discontinue
        the other work or resign employment with Company if he chooses not to
        discontinue the other work.  If the Board believes such a conflict
        exists during any period in which Employee is receiving payments pursuant
        to
        this Agreement, the Board may ask Employee to choose to discontinue the other
        work or forfeit the remaining Severance Payment(s).  Notwithstanding
        the above, Employee shall not be required to sever his current relationship
        with
        Newforth Partners nor shall Employee be required to sever his current
        relationship with RG5 as a board member and which shall not require more
        than
        one (1) business day per quarter of Employee’s time.

       

      9.           Confidentiality
        and Proprietary Rights.  As a condition of employment, Employee
        agrees to read, sign and abide by the terms of Company’s Employee Proprietary
        Rights Assignment Agreement/Non-Disclosure Agreement, which is provided with
        this Agreement and incorporated herein by reference.

       

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

      10.           Nonsolicitation.  Employee
        understands and agrees that Company’s employees and any information regarding
        Company employees is confidential and constitute trade secrets of the
        Company.  Employee agrees that during the term of this Agreement and
        for a period of one (1) year after the termination of employment with the
        Company, Employee will not, separately or in conjunction with others, encourage
        or cause others to solicit or personally encourage any employees of the Company
        to terminate or alter their relationships with the Company.

       

      11.           Injunctive
        Relief.  Employee acknowledges that Employee’s breach of the
        covenants contained in Sections 8-10 (collectively “Covenants”) would cause
        irreparable injury to Company and agrees that in the event of any such breach,
        Company shall be entitled to seek temporary, preliminary and permanent
        injunctive relief without the necessity of proving actual damages or posting
        any
        bond or other security.

       

      12.           Agreement
        to Arbitrate.  In the event of any dispute or claim relating to or
        arising out of Employee’s employment relationship with the Company, this
        Agreement, or the termination of Employee’s employment with the Company for any
        reason (including, but not limited to, any claims of breach of contract,
        defamation, wrongful termination or age, sex, sexual orientation, race, color,
        national origin, ancestry, marital status, religious creed, physical or mental
        disability or medical condition or other discrimination, retaliation or
        harassment), Employee and the Company agree that all such disputes shall
        be
        fully resolved by confidential, binding arbitration conducted by a single
        arbitrator through the American Arbitration Association (“AAA”) under the AAA’s
        National Rules for the Resolution of Employment Disputes then in effect,
        which
        are available online at the AAA’s website at
www.adr.org.  Claims for breach of the Company’s Employee
        Proprietary Rights and Assignment Agreement/Non-Disclosure Agreement and
        Company’s right to obtain injunctive relief pursuant to Section 11, above,
        are excluded.

       

      13.           General
        Provisions.

       

      13.1           Successors
        and Assigns.  The rights and obligations of Company under this
        Agreement shall inure to the benefit of and shall be binding upon the successors
        and assigns of Company.  Employee shall not be entitled to assign any
        of Employee’s rights or obligations under this Agreement.

       

      13.2           Waiver.  Either
        party’s failure to enforce any provision of this Agreement shall not in any way
        be construed as a waiver of any such provision, or prevent that party thereafter
        from enforcing each and every other provision of this Agreement.

       

      13.3           Attorneys’
        Fees.  Each side will bear its own attorneys’ fees in any dispute
        unless a statutory section at issue, if any, authorizes the award of attorneys’
fees to the prevailing party.

       

      13.4           Severability.  In
        the event any provision of this Agreement is found to be unenforceable by
        an
        arbitrator or court of competent jurisdiction, such provision shall be deemed
        modified to the extent necessary to allow enforceability of the provision
        as so
        limited, it being intended that the parties shall receive the benefit
        contemplated herein to the fullest extent permitted by law.  If a
        deemed modification is not satisfactory in the judgment of such arbitrator or
        court, the unenforceable provision shall be deemed deleted, and the validity
        and
        enforceability of the remaining provisions shall not be affected
        thereby.

       

      13.5           Interpretation;
        Construction.  The headings set forth in this Agreement are for
        convenience only and shall not be used in interpreting this
        Agreement.  This Agreement has been drafted by legal counsel
        representing Company, but Employee has participated in the negotiation of
        its
        terms.  Furthermore, Employee acknowledges that Employee has had an
        opportunity to review and revise the Agreement and have it reviewed by legal
        counsel, if desired, and, therefore, the normal rule of construction to the
        effect that any ambiguities are to be resolved against the drafting party
        shall
        not be employed in the interpretation of this Agreement.

       

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

      13.6           Governing
        Law.  This Agreement will be governed by and construed in
        accordance with the laws of the United States and the State of
        California.  Each party consents to the jurisdiction and venue of the
        state or federal courts in Santa Clara County, California, if applicable,
        in any
        action, suit, or proceeding arising out of or relating to this
        Agreement.

       

      13.7           Notices.  Any
        notice required or permitted by this Agreement shall be in writing and shall
        be
        delivered as follows with notice deemed given as
        indicated:  (a) by personal delivery when delivered personally;
        (b) by overnight courier upon written verification of receipt; (c) by
        telecopy or facsimile transmission upon acknowledgment of receipt of electronic
        transmission; or (d) by certified or registered mail, return receipt
        requested, upon verification of receipt.  Notice shall be sent to the
        addresses set forth below, or such other address as either party may specify
        in
        writing.

       

      13.8           Survival.  Sections
        8 (“No Conflict of Interest”), 9 (“Confidentiality and Proprietary Rights”), 10
        (“Nonsolicitation”), 11 (“Injunctive Relief”), 12 (“Agreement to Arbitrate”), 13
        (“General Provisions”) and 14 (“Entire Agreement”) of this Agreement shall
        survive Employee’s employment by Company.

       

      14.           Entire
        Agreement.  This Agreement, including the Company Employee
        Proprietary Rights Assignment Agreement/Non-Disclosure Agreement incorporated
        herein by reference and Company’s stock option plan and related option documents
        described in subsection 4.2 of this Agreement, constitutes the entire
        agreement between the parties relating to this subject matter and supersedes
        all
        prior or simultaneous representations, discussions, negotiations, and
        agreements, whether written or oral.  This Agreement may be modified
        or amended only with the written consent of Employee and an authorized officer
        of the Company, provided, however, that the Company may amend or modify this
        Agreement in order to comply with the provisions of, or to be exempt from
        the
        application of, Section 409A of the Internal Revenue Code, to the extent
        applicable.  Notwithstanding the preceding sentence, the Company will
        have no obligation to amend or modify this Agreement to provide that any
        payment
        or benefit hereunder will comply with, or be exempt from, Section 409A, and
        the
        Company makes no representation or warranty regarding compliance with, or
        exemption from, Section 409A with respect to any payment or benefit provided
        by
        this Agreement.  Employee agrees that Employee shall bear sole and
        exclusive responsibility for any and all federal, state, local and/or foreign
        tax consequences (including, without limitation, any and all tax liability
        under
        Section 409A) of this Agreement, and fully indemnifies and holds the Company
        harmless therefore.  Employee should consult with his own tax advisor
        in connection with this Agreement and its tax consequences.  No oral
        waiver, amendment or modification will be effective under any circumstances
        whatsoever, including without limitation any changes that may be necessary
        to
        comply with the provisions of Section 409A of the Code, to the extent
        applicable.  No oral waiver, amendment or modification will be
        effective under any circumstances whatsoever.

       

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

      15.           Authority.  The
        individual signing this Agreement on behalf of the Company has the authority
        to
        bind the Company to the terms of this Agreement and both parties will be
        considered bound to the terms of this Agreement upon their signatures thereto
        below.

       

      Sincerely,

       

    

     

    
      	 	 	 
	
              Mark
                Kalow

            	 	
            
	
              Member,
                Board of Directors

            	 	
            
	 	 	 

    

    

    
      	
              Date:

            	 	 	
            	 

    

    

    
      	 	 	 
	 	 	 
	
              Acknowledged,
                Accepted and Agreed:

            	 	 
	 	 	 
	 	 	 
	 	 	 
	
              Tom
                Marcus

            	 	 
	 	 	 
	 	 	 

    

    
      	
              Date:

            	 	 	
               

            	 

    

     

     

     

    8

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