AGREEMENT
THIS AGREEMENT is made and entered into effective as of May 15,
2009
(the "Effective Date"), by and between Merge II, Incorporated, a
Nevada
corporation, ("Merge II") and Mervyn M. Gervis, an individual
("Gervis").
1. Term.
(a) This Agreement shall continue for a period of one (1)
year from
the Effective Date and shall continue thereafter for as long as
Gervis
is elected as Director of Merge II.
(b) Notwithstanding the foregoing and provided that Gervis
has
neither voluntarily resigned nor been terminated for "cause" as
defined
in Section 3(b) of this Agreement, Merge II agrees to use its
best
efforts to reelect Gervis to the Board of Directors for a period
of
three (3) years at the annual meetings of the shareholders.
2. Position and Responsibilities.
(a) Position. Merge II hereby retains Gervis to serve
as Vice
President in charge of corporate development. Gervis shall
perform
such duties and responsibilities as are normally related to
such
position in accordance with Merge II's bylaws and applicable
law,
including those services described on Exhibit A, (the "Services"),
and
Gervis hereby agrees to use his best efforts to provide the
Services.
Gervis shall not allow any other person or entity to perform any of
the
Services for or instead of Gervis. Gervis shall comply with
the
statutes, rules, regulations and orders of any governmental or
quasi-
governmental authority, which are applicable to the performance of
the
Services, and Merge II's rules, regulations, and practices as they
may
from time-to-time be adopted or modified.
(b) Other Activities. Gervis may be employed by another
company, may
serve on other Boards of Directors or Advisory Boards, and may
engage
in any other business activity (whether or not pursued for
pecuniary
advantage), as long as such outside activities do not violate
Gervis'
obligations under this Agreement or Gervis' fiduciary obligations
to
the shareholders, except as set forth in Exhibit B. The
ownership of
less than a 5% interest in an entity, by itself, shall not
constitute a
violation of this duty. Except as set forth in Exhibit B,
Gervis
represents that, to the best of his knowledge, Gervis has no
outstanding agreement or obligation that is in conflict with any of
the
provisions of this Agreement, and Gervis agrees to use his best
efforts
to avoid or minimize any such conflict and agrees not to enter into
any
agreement or obligation that could create such a conflict, without
the
approval of the Chief Executive Officer or a majority of the Board
of
Directors. If, at any time, Gervis is required to make any
disclosure
or take any action that may conflict with any of the provisions of
this
Agreement, Gervis will promptly notify the Chief Executive Officer
or
the Board of such obligation, prior to making such disclosure or
taking
such action.
(c) No Conflict. Except as set forth in Section 2(b) and Exhibit
B,
Gervis will not engage in any activity that creates an actual
conflict
of interest with Merge II, regardless of whether such activity
is
prohibited by Merge II's conflict of interest guidelines or
this
Agreement, and Gervis agrees to notify the Board of Directors
before
engaging in any activity that creates a potential conflict of
interest
with Merge II. Specifically and except as set forth in
Section 2(b)
and Exhibit B of this Agreement, Gervis shall not engage in any
activity that is in direct competition with Merge II or serve in
any
capacity (including, but not limited to, as an employee,
consultant,
advisor or Gervis) in any Merge II or entity that competes
directly
with Merge II, as reasonably determined by a majority of Merge
II's
disinterested board members, without the approval of the Chief
Executive Officer.
3. Compensation and Benefits.
(a) Common Shares. In consideration of the services to be
rendered
under this Agreement, Merge II shall issue Gervis 1,000,000
common
shares upon the signing of this agreement.
(b) Additional Compensation. During the term of this
Agreement, Gervis
may be granted additional stock options, equity rights, and/or
cash
consideration as determined by Merge II's Compensation Committee,
in
its sole discretion.
(c) Benefits. Gervis shall also be eligible to
participate in any
benefits made generally available by Merge II to its senior
executives,
to the extent allowed by the benefit plans established by Merge
II,
which may be amended or terminated at any time in Merge II's
sole
discretion; except that Gervis shall not be entitled to any
paid
vacation leave.
(d) Expenses. Merge II shall reimburse Gervis for all
reasonable
business expenses incurred in the performance of his duties
hereunder
in accordance with Merge II's expense reimbursement guidelines.
(e) Indemnification. Merge II will indemnify and defend
Gervis
against any liability incurred in the performance of the Services
to
the fullest extent authorized in Merge II's Certificate of
Incorporation, as amended, bylaws, as amended, and applicable
law.
Merge II has purchased Gervis' and Officer's liability insurance,
and
Gervis shall be entitled to the protection of any insurance
policies
Merge II maintains for the benefit of its Directors and
officers
against all costs, charges and expenses in connection with any
action,
suit or proceeding to which he may be made a party by reason of
his
affiliation with Merge II, its subsidiaries, or affiliates.
(f) Records. Gervis shall have reasonable access to
books and records
of Merge II, as necessary to enable Gervis to fulfill his
obligations
as a Gervis of Merge II.
4. Termination.
(a) Right to Terminate. At any time, Gervis may be removed as
Vice
President as provided in Merge II's Certificate of
Incorporation,
bylaws, and applicable law. Gervis may resign as Vice President
as
provided in Merge II's Certificate of Incorporation, bylaws and
applicable law. Notwithstanding anything to the contrary
contained in
or arising from this Agreement or any statements, policies, or
practices of Merge II, neither Gervis nor Merge II shall be
required to
provide any advance notice or any reason or cause for termination
of
Gervis' status as Vice President, except as provided in Merge
II's
Certificate of Incorporation, Merge II's bylaws and applicable
law.
(b) Effect of Termination as Vice President. Upon a
termination of
Gervis' status as Vice President, in which Gervis remains a
Director,
this Agreement will terminate, and Merge II and Gervis will sign
Merge
II's standard Director's Agreement, in effect at the time of
the
termination, subject to any modifications to which both parties
mutually agre