EXH 10
EXH 10.6
Employment Agreement (the "Agreement"), effective as of
October 31, 2000 (the "Effective Date"), between EB2B COMMERCE, INC., a Delaware
corporation with principal offices at ▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, (the "Company") and ▇▇▇▇▇▇ ▇▇▇▇▇, residing at ▇▇▇, ▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇ ("▇▇▇▇▇"). The Company and ▇▇▇▇▇ may be referred to herein collectively as
the "Parties" or individually as a "Party."
WHEREAS, the Company is engaged in the building, owning and operating
of business-to-business electronic commerce networks; and
WHEREAS, the Company desires ▇▇▇▇▇ to serve as Chief Technology Officer
of the Company and ▇▇▇▇▇ desires to accept the position of Chief Technology
Officer and serve the Company as set forth herein.
NOW, THEREFORE, in consideration of the mutual promises and covenants
herein set forth, the Parties do hereby agree as follows:
1 Employment. The Company hereby employs ▇▇▇▇▇ and ▇▇▇▇▇ accepts this
employment and agrees to render services to the Company on the terms
and conditions set forth in this Agreement. During the term of this
Agreement, ▇▇▇▇▇ shall serve as Chief Technology Officer of the Company
("CTO"), to perform services for the Company normally associated with
such position and such other duties as the Board of Directors ("Board")
or Chief Executive Officer reasonably request. ▇▇▇▇▇ shall use his best
efforts to meet the business requirements and goals set by the Board.
In furtherance thereof, ▇▇▇▇▇ will devote his best efforts, including
his full-time attention to the affairs and business of the Company. In
addition, ▇▇▇▇▇ will use his best business judgment in determining the
allocation of business time spent working between the Company's offices
located in New York, NY and his home in Martha's Vineyard, MA. ▇▇▇▇▇
agrees not to serve on any corporate, industry, civic, or charitable
boards or committees that would interfere or create a conflict of
interest with respect to his duties hereunder without the prior consent
of the Board. ▇▇▇▇▇ further agrees to observe and comply with the rules
and regulations of the Company as adopted by the Board with respect to
performance of his duties, and to carry out and perform all reasonable
orders, directions, and policies enacted by the Board.
2 Term. The term of this Agreement shall be the period from the Effective
Date and terminating on December 31 2002 (the "Initial Employment
Term"). The Agreement shall thereafter automatically renew for
successive one (1) year terms, until terminated by either Party in
accordance with this Agreement (the "Succeeding Employment Term"),
unless either Party provides written notice of termination to the other
party at least ninety (90) days prior to the expiration of the Initial
Employment Term or any Succeeding Employment Term.
3 Compensation.
a. Base Salary. The Company will compensate and pay ▇▇▇▇▇ for his
services during the term of this Agreement at a base salary of $175,000 per year
(the "Base Salary"). The Base Salary shall be payable to ▇▇▇▇▇ in accordance
with the Company's standard payroll policy for similarly situated employees of
the Company.
b. Bonus.
i. Signing Bonus. Upon the execution of this Agreement, ▇▇▇▇▇ will
be entitled to the sum of fifty thousand ($50,000) dollars as a signing bonus
from the Company ("Signing Bonus"). The Company will pay the Signing Bonus to
▇▇▇▇▇ with the first regular payroll period following the Effective Date.
ii. Annual Bonus. ▇▇▇▇▇ may receive, from time to time, bonus
compensation from the Company, as directed by the Board of Directors following
the negotiation of the terms by the Parties (the "Bonus Compensation"). If at
any time hereafter the Company shall adopt a bonus program, an option program or
any other form of equity participation for executives of the Company, ▇▇▇▇▇
shall be eligible to participate in such program in a manner and capacity
commensurate with his position and duties. Notwithstanding the foregoing, for
each year of this Agreement, the Company will pay ▇▇▇▇▇ a bonus of up to one
hundred twenty-five thousand ($125,000) dollars ("Maximum Bonus") based on the
pro rata achievement of goals set by the Board within 30 days of the Effective
Date and reviewed and revised annually, however the Company will pay ▇▇▇▇▇ a
bonus of no less than ninety thousand ($90,000) dollars ("Minimum Bonus") per
year. The Minimum Bonus will be paid to ▇▇▇▇▇ ratably at the end of each
calendar quarter.
c. Stock Options. Without limiting the foregoing, during the term of this
Agreement, ▇▇▇▇▇ shall be entitled to participate, as determined by the Board of
Directors, in the Company's incentive stock option plan to the same extent as
other employees of the Company. In addition, ▇▇▇▇▇ shall be entitled to receive
options to purchase 550,000 shares of Common Stock of the Company ("Options")
pursuant to the terms of the Company's 2000 Stock Option Plan (the "Option
Plan"), subject to the following terms: (a) the Options will vest as follows:
(i) two hundred fifty thousand (250,000) Options will vest immediately upon the
Effective Date, and (ii) the remaining three hundred thousand (300,000) Options
will vest ratably at the end of each month that ▇▇▇▇▇ is employed by the Company
over an eighteen month period, commencing upon the Effective Date; (b) the
exercise price of the Options shall be $2.10 per share, as appropriately
adjusted for stock splits, stock dividends, and the like; and (c) the other
terms and conditions of the Options will be in accordance with the provisions of
the Option Plan and the Stock Option Agreement evidencing the issuance of the
Options. In addition, the Company represents to ▇▇▇▇▇ that the Options will
fully vest upon a "change of control" event involving the Company as described
in the Stock Option Agreement.
d. Restricted Stock Grant. As additional consideration for entering into
this Agreement, the Company hereby grants to ▇▇▇▇▇ 50,000 shares of the
Company's Common Stock, with such shares designated as "Restricted Shares"
pursuant to the terms of the Company's Option Plan (the "Granted Shares). The
Granted Shares are subject to ▇▇▇▇▇ remaining an employee of the Company
pursuant to the terms of this Agreement
for a period of one year from the Effective Date. Following such one-year period
the Granted Shares shall no longer be "Restricted Shares," and ▇▇▇▇▇ shall own
the Granted Shares without encumbrance (other than the obligation to comply with
applicable securities laws in connection with any sale or other divestiture of
such Granted Shares). The issuance of the Granted Shares will be evidenced in a
separate Restricted Stock Grant Agreement in accordance with the provisions of
the Option Plan. In addition, the Company represents to ▇▇▇▇▇ that the
restriction placed on the Granted Shares will be removed and the Granted Shares
will fully vest upon a "change of control" event involving the Company as
described in the Restricted Stock Grant Agreement or in the event ▇▇▇▇▇'▇
employment is terminated by the Company "for convenience" in accordance with
Section 6.3 below.
4 Benefits.
a. Health Insurance; Vacation. The Company shall provide ▇▇▇▇▇ with
health insurance coverage, personal time and other benefits during the term of
this Agreement as agreed upon by the Board, but in no event will such benefits
be less than those offered to other executives of the Company. ▇▇▇▇▇ shall be
entitled to three (3) weeks paid vacation during each year of this Agreement.
b. Travel Expenses. The Company shall reimburse ▇▇▇▇▇ or otherwise
provide for or pay for all reasonable expenses incurred by ▇▇▇▇▇ in connection
with traveling from his residence in Massachusetts to the Company's offices
currently located in New York, NY or to such other location as the Board of
Directors may direct from time to time ("Corporate Headquarters"). ▇▇▇▇▇ will
use reasonable efforts to obtain advanced/reduced fares when possible.
c. Lodging Expenses. The Company shall reimburse ▇▇▇▇▇ or otherwise
provide for or pay for all reasonable expenses incurred by ▇▇▇▇▇ in connection
with lodging near the Corporate Headquarters for business purposes, including
the rental of an apartment for $3,050 per month, subject to an average annual
increase of approximately 8.5%.
d. Life Insurance. The Company shall have the right at its own expense
and for its own benefit to purchase insurance on ▇▇▇▇▇'▇ life, and ▇▇▇▇▇ shall
cooperate by providing necessary information, submitting to required medical
examinations, and otherwise complying with the insurance carrier's requirements.
e. Miscellaneous. ▇▇▇▇▇ shall be entitled to participate in all other
retirement, welfare and other benefit plans, and to receive all fringe benefits,
that are provided by the Company to its most senior executives from time to
time, to the extent ▇▇▇▇▇ meets the eligibility requirements for any such plan
or benefit.
5 Expenses. The Company shall reimburse ▇▇▇▇▇ or otherwise provide for or
pay for all reasonable expenses incurred by ▇▇▇▇▇ in furtherance of or in
connection with the business of the Company, including, but not by way of
limitation, (i) all reasonable expenses incurred by ▇▇▇▇▇ in accordance with the
Company's travel policy, as established by the Board; and (ii) all reasonable
expenses in connection with ▇▇▇▇▇'▇ attendance at trade, professional and
industry related conferences which are in furtherance of the business of the
Company. ▇▇▇▇▇ agrees that he will furnish the
Company with adequate records and other documents for the substantiation of each
such business expense.
6 Employment Termination.
a. Resignation of ▇▇▇▇▇. The Parties agree that ▇▇▇▇▇ has the right to
voluntarily terminate his employment with the Company by providing the Company
with a minimum of sixty (60) days' prior written notice. Upon the receipt of
such notice by the Company, ▇▇▇▇▇ will cease to have any of the powers
associated with the offices he held with the Company. In such event, all of the
Company's obligations under this Agreement will terminate immediately upon the
termination date specified in the notice.
b. Resignation of ▇▇▇▇▇ for Good Reason. The Parties agree that ▇▇▇▇▇ has
the right to voluntarily terminate his employment with the Company for "Good
Reason" upon providing sixty (60) days prior written notice to the Board. For
purposes of this Agreement, "Good Reason" shall mean the occurrence of any of
the following events or conditions:
i. a change in ▇▇▇▇▇'▇ status, title, position or responsibilities which
represents an adverse change from his status, title, position or
responsibilities as in effect immediately prior thereto; the assignment to ▇▇▇▇▇
of any duties or responsibilities which are inconsistent with his status, title
or position; or any removal of ▇▇▇▇▇ from or failure to reappoint or reelect him
to any of such offices or positions, except in connection with the termination
of his employment for "Disability" (as defined below), for "Cause" (as defined
below), as a result of his death, or by ▇▇▇▇▇ other than for Good Reason;
ii. a reduction in the Base Salary;
iii. the relocation of the offices of the Company at which ▇▇▇▇▇ is
principally employed to a location more than fifty (50) miles from the location
of such offices immediately prior to the relocation, except for required travel
on the on the business of the Company to an extent substantially consistent with
▇▇▇▇▇'▇ customary business travel obligation and duties; or
iv. the failure by the Company or its affiliates to pay to ▇▇▇▇▇ any
portion of ▇▇▇▇▇'▇ current compensation within twenty (20) days of the date such
compensation is due.
c. Termination by the Company for Convenience. The Parties agree that the
Board has the right to terminate ▇▇▇▇▇'▇ employment for convenience during the
term of this Agreement upon notice to ▇▇▇▇▇. The date of termination will be the
date specified in a notice from the Board and will be at least thirty (30) days
following such notice. ▇▇▇▇▇ will cease to have any power of his office as of
the date of receipt of such notice by ▇▇▇▇▇.
d. Termination by the Company for Cause. The Parties agree that the Board
has the right to terminate ▇▇▇▇▇'▇ employment during the term of this Agreement
for "Cause." For the purposes of this Agreement, the term "Cause" will mean:
i. Conduct on ▇▇▇▇▇'▇ part that is willfully intended to and likely to
injure to the Company's business or reputation;
ii. Actions by ▇▇▇▇▇ intentionally furnishing materially false,
misleading or omissive information to the Board;
iii. ▇▇▇▇▇ is convicted of any felony or other serious offense;
iv. Abusive use of drugs or alcohol by ▇▇▇▇▇;
v. Any fraud, embezzlement or misappropriation by ▇▇▇▇▇ of the
"assets" of the Company. For the purposes of this provision, the Parties
acknowledge that "asset" includes, but is not limited to the "Confidential
Information" (as defined in Section 8 of this Agreement); or
vi. The willful and significant failure by ▇▇▇▇▇ to perform reasonably
assigned duties and obligations as set forth in this Agreement, resulting in
damage to the Company, but not encompassing illness, physical or mental
incapacity.
In the event that ▇▇▇▇▇'▇ employment is terminated by the Company for
Cause, the date of employment termination will be as specified in the notice of
termination to ▇▇▇▇▇ from the Company, and ▇▇▇▇▇ will cease to have any
authority to act on behalf of the Company as of such date. The Company will pay
▇▇▇▇▇ the Base Salary due him as of such date, and all benefits provided by the
Company to ▇▇▇▇▇ will cease as of such date except as otherwise required by law.
e. Termination by the Company for Death or Disability. The Parties agree
that ▇▇▇▇▇'▇ employment will terminate upon ▇▇▇▇▇'▇ death or Disability. The
term "Disability" shall be defined as ▇▇▇▇▇'▇ inability, through physical or
mental illness to perform the majority of his usual duties for a period of at
least three (3) continuous months.
f. Notice of Termination. Any termination by the Company for Cause, or by
▇▇▇▇▇ for Good Reason shall be communicated by a Notice of Termination to the
other Party hereto given in accordance with Section 17 hereof. For purposes of
this Agreement, a "Notice of Termination" means a written notice which (i)
indicates the specific termination provision in this Agreement relied upon, (ii)
sets forth in reasonable detail the facts and circumstances claimed to provide a
basis for termination of ▇▇▇▇▇'▇ employment under the provision so indicated and
(iii) if the termination date is other than the date of receipt of such notice,
specifies the termination date of this Agreement which date shall be in
accordance with the specific termination provision of this Agreement relied
upon.
g. Obligations of the Company Upon Certain Terminations.
i. Options. In the event that ▇▇▇▇▇'▇ employment with the Company is
terminated pursuant to Sections 6.2, 6.3 or 6.5 of this Agreement, all Options
granted to ▇▇▇▇▇ by the Company shall immediately vest upon such termination and
remain exercisable until the scheduled expiration date of each such Option. The
Options shall be subject to the provisions of the Option Plan and the specific
Stock Option Agreement in effect with regard to each Option grant, provided
that, to the extent the provisions of the Stock Option Agreements are
inconsistent with this Section 6.7.1, this Section shall control.
h. Termination Payments. If ▇▇▇▇▇'▇ employment with the Company is
terminated pursuant to Sections 6.2, 6.3 or 6.5 of this Agreement, the Company
will pay, in twelve equal monthly installments, to ▇▇▇▇▇ an amount equal to the
sum of his Base Salary at the rate then in effect.
i. Survival of Agreement Upon Termination. In the event that ▇▇▇▇▇'▇
employment is terminated pursuant to any provision set forth in this Section 6,
the rights and obligations of the Parties which are set forth in Sections 7
through 16 of this Agreement shall survive the employment termination for a
period from the date of such employment termination through the third (3rd)
anniversary of such date.
7 Confidential Information. ▇▇▇▇▇ hereby agrees and acknowledges that the
following information and materials, whether in written, oral, magnetic,
photographic, optical or other form and whether now existing or developed or
created during the period of ▇▇▇▇▇'▇ employment or engagement with the Company,
excepting information obtained by ▇▇▇▇▇ from general or public sources, are
proprietary to the Company and are highly confidential in nature (the
"Confidential Information"):
a. Business Records, Marketing Plans and Customer Information. All books,
records, documents, memoranda and materials, and the information contained
therein directly relating to the business and finances of the Company including,
but not limited to: (i) marketing and development plans, forecasts, forecast
assumptions, forecast volumes, future plans and potential strategies of the
Company; (ii) cost objectives, pricing policies and procedures, quoting policies
and procedures, and unpublished price lists; (iii) licensing policies,
strategies and techniques; (iv) customer lists, names of past, present and
prospective customers and their representatives; (v) data and other business
information about or provided by past, present and prospective customers; (vi)
names of past, present and prospective vendors and their representatives, data
and other Information about or provided by past, present and prospective
vendors; (vii) purchasing information, orders, invoices, ▇▇▇▇▇▇▇▇, and payment
of ▇▇▇▇▇▇▇▇; (viii) past, present and prospective licenses and licensees, the
terms and conditions of any licenses or prospective licenses, contracts or
prospective contracts; (ix) types of products, supplies, materials and services
purchased, leased, licensed and/or sold by the Company; (x) past, present and
future research and development arrangements; (xi) customer service information;
(xii) joint ventures, mergers and/or acquisitions; (xiii) the Company personnel
policies and procedures, the Company personnel files, and the compensation of
officers, directors and employees of the Company; and (xiv) all other
confidential business records and trade secrets of the Company.
b. Technology and Manufacturing Procedures. All books, records, documents,
memoranda and materials, and the information contained therein, relating to the
technology of the Company (whether or not patentable, whether or not protected
by copyright, whether developed by or for the Company) including, but not
limited to: (i) ideas and concepts for existing and new products, processes and
services; (ii) specifications for products, equipment and processes, whether
technical or financial; (iii) manufacturing and performance specifications and
procedures; (iv) engineering drawings, flow charts, and graphs; (v) technical,
research and engineering data; (vi) formulations, materials, and material
specifications; (vii) laboratory studies and benchmark tests; (viii) laboratory
notebooks; (ix) plant layout and equipment; (x)
manuals, including service manuals and operation manuals; (xi) quality assurance
policies, procedures and specifications; (xii) validation studies; and (xiii)
all other know-how, methodology, procedures, techniques and trade secrets
related to the research, engineering and development affairs of the Company.
c. Third Party Information. Any and all other information and materials in
the Company's possession or under its control from any other person or entity
which the Company is obligated to treat as confidential or proprietary ("Third
Party Information").
d. Not Generally Known. Any and all Confidential Information not generally
known to the public or within the industries or trades in which the Company
competes.
8 General Skills and Knowledge. The general skills and experience gained by
▇▇▇▇▇ during ▇▇▇▇▇'▇ employment with the Company, and information publicly
available or generally known within the industries or trades in which the
Company competes, is not considered Confidential Information.
9 ▇▇▇▇▇'▇ Obligations as to Confidential Information and Materials. During
▇▇▇▇▇'▇ employment by the Company, ▇▇▇▇▇ will have access to Confidential
Information and will occupy a position of trust and confidence with respect to
the Company's affairs and business. ▇▇▇▇▇ agrees to take the following steps to
preserve the confidential and proprietary nature of the Confidential
Information:
a. Non-Disclosure. During and for a period of three (3) years after ▇▇▇▇▇'▇
employment with the Company, ▇▇▇▇▇ will not use, disclose or otherwise permit
any person or entity access to any of the Confidential Information other than as
required in the performance of ▇▇▇▇▇'▇ duties with the Company by order of a
court of competent jurisdiction, a governmental agency or otherwise by
applicable law.
b. Prevent Disclosure. ▇▇▇▇▇ will take all reasonable precautions to
prevent disclosure of the Confidential Information in accordance with the
Company's reasonable instructions to ▇▇▇▇▇.
c. Return all Materials. Upon termination of ▇▇▇▇▇'▇ employment with the
Company, for any reason whatsoever, ▇▇▇▇▇ will deliver to the Company all
tangible materials embodying the Confidential Information, including, without
limitation, any documentation, records, listings, notes, data, sketches,
drawings, memoranda, models, accounts, reference materials, samples,
machine-readable media and equipment which in any way relate to the Confidential
Information.
10 Ideas and Inventions. ▇▇▇▇▇ agrees that all right, title and interest in
or to any and all Inventions are the property of the Company. For the purposes
of this Agreement, "Inventions" shall mean all ideas, concepts, know-how,
techniques, processes, methods, inventions, discoveries, developments,
innovations and improvements (i) conceived or made by ▇▇▇▇▇, whether alone or
with others, in the course of ▇▇▇▇▇'▇ employment by the Company, or (ii)
conceived or made by ▇▇▇▇▇, whether alone or with others, in the course of
▇▇▇▇▇'▇ employment, but which reach fruition within the period from the date of
termination of ▇▇▇▇▇'▇ employment through the second (2nd) anniversary of such
date, and which either (a) involve or are reasonably related to the business of
the Company or to the Company's actual or demonstrably anticipated research or
development; or (b) incorporate or are derived from, in whole or in part, any of
the Confidential Information.
▇▇▇▇▇ agrees to promptly disclose all Inventions to the Company, and to provide
all assistance reasonably requested by the Company in the preservation of its
interests in the Inventions, such as by executing documents, testifying, etc.
▇▇▇▇▇ agrees to execute, acknowledge and deliver any instruments confirming the
complete ownership by the Company of such Inventions. Such assistance shall be
provided at the Company's expense without any additional compensation to ▇▇▇▇▇.
11 Copyrights. ▇▇▇▇▇ agrees that any work prepared for the Company which is
protected under United States Copyright laws or under the universal Copyright
Convention, the Berne Copyright convention and/or the Buenos Aires Copyright
Convention shall be a work made for hire and ownership of all copyrights
(including all renewals and extensions) therein shall vest in the Company. In
the event any such work is deemed not to be a work made for hire for any reason,
▇▇▇▇▇ hereby grants, transfers and assigns all right, title and interest in such
work and all copyrights in such work and all renewals and extensions thereof to
the Company, and agrees to provide all assistance reasonably requested by the
Company in the establishment, preservation and enforcement of its copyright in
such work, such assistance to be provided at the Company's expense but without
any additional compensation to ▇▇▇▇▇. ▇▇▇▇▇ hereby agrees to and does hereby
waive all moral rights with respect to the work developed or produced hereunder,
including, without limitation any and all rights of identification of authorship
and any and all rights of approval, restriction, or limitation on use or
subsequent modifications.
12 Conflicting Obligations and Rights. Before (i) performing any
obligations ▇▇▇▇▇ may have to preserve the confidentiality of another's
proprietary information or materials, or (ii) exercising any rights ▇▇▇▇▇ may
claim to any patent or copyrights trade secrets, or other discoveries,
inventions, ideas, know-how, techniques methods, processes or other proprietary
information or materials before performing that work, ▇▇▇▇▇ shall inform the
Company in writing of any apparent conflict between ▇▇▇▇▇'▇ work for the Company
and such other obligations and/or rights. In the absence of such written notice,
the Company may conclude that no such conflict exists and ▇▇▇▇▇ agrees
thereafter to make no such claim against the Company. The Company shall hold
such disclosures by ▇▇▇▇▇ in strict confidence.
13 Restrictive Covenants.
a. Acknowledgement. ▇▇▇▇▇ acknowledges that (i) the Company's business is
all aspects of business-to-business electronic commerce, but not limited to,
building, owning and operating electronic commerce networks; and providing
systems integration and consulting services relating thereto, and (ii)
fulfillment of the obligations hereunder will result in ▇▇▇▇▇ becoming familiar
with the business affairs of the Company and any present or future parent,
subsidiary and/or affiliate.
b. Covenant Not to Compete. In consideration for the Compensation, and as a
condition to the performance by the Company of all obligations under this
Agreement, ▇▇▇▇▇ agrees that during the Initial Employment Term or any
Succeeding Employment Terms of this Agreement and for the period from the date
of termination of ▇▇▇▇▇'▇ employment pursuant hereto through the second (2nd)
anniversary of such date (the "Non-compete Term"), ▇▇▇▇▇ shall not directly or
indirectly through any other person, firm or corporation compete with or be
engaged in the same business or "participate in" any other
business or organization which during such period competes with or is engaged in
the same business as the Company. The term "participate in" shall mean:
"directly or indirectly, for his own benefit or for, with, or through any other
person, firm, or corporation, own, manage, operate, control, loan money to, or
participate in the ownership, management, operation, or control of, or be
connected as a director, officer, employee, partner, consultant, agent,
independent contractor, or otherwise with, or acquiesce in the use of his name."
Notwithstanding the foregoing, it shall not be a breach of the provisions of
this Section 13 if, after the term of this Agreement, ▇▇▇▇▇ is a passive
investor in any publicly held entity and ▇▇▇▇▇ owns three (3%) percent or less
of the equity interests therein.
c. No Solicitation of Employees. In addition, during the Non-compete Term
▇▇▇▇▇ agrees not to recruit, contract or hire any employee, agent, consultant or
otherwise of the Company, or otherwise induce such employee, agent, consultant
or otherwise to leave or terminate his or her employment or engagement with the
Company, to become an employee of or otherwise be associated with him or any
company or business with which he, directly or indirectly, is or may become
associated with, or competes with the business of the Company.
d. Restrictive Covenants Necessary and Reasonable. ▇▇▇▇▇ agrees that the
provisions of this Section 13 are necessary and reasonable to protect the
Company in the conduct of its business. If any restriction contained in this
Section 13 shall be deemed to be invalid, illegal, or unenforceable by reason of
the extent, duration or geographical scope thereof, or otherwise, then the court
making such determination shall have the right to reduce such extent, duration,
geographical scope, or other provisions hereof and in its reduced form such
restriction shall then be enforceable in the manner contemplated hereby.
14 Injunctive Relief. ▇▇▇▇▇, recognizing that irreparable injury shall
result to the Company in the event of ▇▇▇▇▇'▇ breach of the terms and conditions
of this Agreement, agrees that in the event of his breach or threatened breach,
the Company shall be entitled to seek injunctive relief restraining ▇▇▇▇▇, and
any and all persons or entities acting for or with him, from such breach or
threatened breach. Nothing herein contained, however, shall be construed as
prohibiting the Company from pursuing any other remedies available to it by
reason of such breach or threatened breach.
15 Indemnification.
a. To the full extent allowed by law, the Company shall hold harmless and
indemnify ▇▇▇▇▇, his executors, administrators or assigns, against any and all
judgments, penalties (including excise and similar taxes), fines, settlements
and reasonable expenses (including attorneys' fees) actually incurred by ▇▇▇▇▇
(net of any related insurance proceeds or other amounts received by ▇▇▇▇▇ or
paid by or on behalf of the Company on ▇▇▇▇▇'▇ behalf in compensation of such
judgments, penalties, fines, settlements or expenses) in connection with any
threatened, actual or completed action, suit or proceeding, whether civil,
criminal, arbitral, administrative or investigative, or any appeal in such
action, suit or proceeding, to which ▇▇▇▇▇ was, is or is threatened to be made a
named defendant or respondent (a "Proceeding"), because ▇▇▇▇▇ is or was a
director or officer of the Company, or was serving at the request of the Company
as a director,
officer, partner, venturer, proprietor, trustee, employee, agent or similar
functionary (an "Affiliate Executive") of another corporation, partnership,
joint venture, sole proprietorship, trust, employee benefit plan or other
enterprise (each, a "Company Affiliate"). Upon authorization of indemnification
of ▇▇▇▇▇ by the Board in accordance with the applicable provisions of the
corporation law of the Company's domicile, ▇▇▇▇▇ shall be presumed to be
entitled to such indemnification under this Agreement upon submission of a Claim
(as hereinafter defined). Thereafter, the Company shall have the burden of proof
to overcome the presumption that ▇▇▇▇▇ is so entitled. Such presumption shall
only be overcome by a judgment or other final adjudication, after all appeals
and all time for appeals have expired ("Final Determination"), adverse to ▇▇▇▇▇
establishing that such indemnification is not permitted hereunder or by law. An
actual determination by the Company (including its Board, legal counsel, or its
stockholders) that ▇▇▇▇▇ has not met the applicable standard of conduct for
indemnification shall not be a defense to the action or create a presumption
that ▇▇▇▇▇ has not met the applicable standard of conduct. The purchase,
establishment or maintenance of any Indemnification Arrangement shall not in any
way diminish, restrict, limit or affect the rights and obligations of the
Company or of ▇▇▇▇▇ under this Agreement except as expressly provided herein,
and the execution and delivery of this Agreement by the Company and ▇▇▇▇▇ shall
not in any way diminish, restrict, limit or affect ▇▇▇▇▇'▇ right to
indemnification from the Company or any other Party or Parties under any other
indemnification arrangement, the Certificate of Incorporation or Bylaws of the
Company, or the DGCL.
b. Subject only to the provisions of this Section 15.2, as long as ▇▇▇▇▇
shall continue to serve as a director and/or officer of the Company (or shall
continue at the request of the Company to serve as an Affiliate Executive) and,
thereafter, as long as ▇▇▇▇▇ shall be subject to any possible Proceeding by
reason of the fact that ▇▇▇▇▇ was or is a director and/or officer of the Company
(or served in any of said other capacities), the Company shall, unless no such
policies are available in any market, purchase and maintain in effect for the
benefit of ▇▇▇▇▇ one or more valid, binding and enforceable policies (the
"Insurance Policies") of directors' and officers' liability insurance ("D&O
Insurance") providing adequate liability coverage for ▇▇▇▇▇'▇ acts as a director
and/or officer of the Company or as an Affiliate Executive. The Company may
promptly notify ▇▇▇▇▇ of any lapse, amendment or failure to renew said policy or
policies or any provision thereof relating to the extent or nature of coverage
provided thereunder. In the event the Company does not purchase and maintain in
effect said policy or policies of D&O Insurance pursuant to the provisions of
this Section 15.2, the Company shall, to the full extent permitted by law, in
addition to and not in limitation of the other rights granted ▇▇▇▇▇ under this
Agreement, hold harmless and indemnify ▇▇▇▇▇ to the full extent of coverage
which would otherwise have been provided for the benefit of ▇▇▇▇▇ pursuant to
the Insurance Policies.
▇. ▇▇▇▇▇ shall have the right to receive from the Company on demand, or at
his Option to have the Company pay promptly on his behalf, in advance of a Final
Determination of a Proceeding all expenses payable by the Company pursuant to
the terms of this Agreement as corresponding amounts are expended or incurred by
▇▇▇▇▇ in connection with such Proceeding or otherwise expended or incurred by
▇▇▇▇▇ (such amounts so expended or incurred being referred to as "Advanced
Amounts"). In making any claim for payment by the Company of any expenses,
including any Advanced
Amount, pursuant to this Agreement, ▇▇▇▇▇ shall submit to the Company a written
request for payment (a "Claim"), which includes a schedule setting forth in
reasonable detail the dollar amount expended (or incurred or expected to be
expended or incurred). Each item on such schedule shall be supported by the
▇▇▇▇, agreement or other documentation relating thereto, a copy of which shall
be appended to the schedule as an exhibit. Where ▇▇▇▇▇ is requesting Advanced
Amounts, ▇▇▇▇▇ must also provide (i) written affirmation of such ▇▇▇▇▇'▇ good
faith belief that he has met the standard of conduct required by law for
indemnification, and (ii) a written undertaking to repay such Advanced Amounts
if a Final Determination is made that ▇▇▇▇▇ is not entitled to indemnification
hereunder.
d. The Company shall not be liable under this Agreement to make any payment
in connection with any claim made against ▇▇▇▇▇ for an accounting of profits
made from the purchase or sale by ▇▇▇▇▇ of securities of the Company within the
meaning of Section 16(b) of the Exchange Act or similar provisions of any state
statutory law or common law.
e. All agreements and obligations of the Company contained herein shall
continue during the period ▇▇▇▇▇ is a director and/or officer of the Company (or
is serving at the request of the Company as an Affiliate Executive) and shall
continue thereafter so long as ▇▇▇▇▇ shall be subject to any possible Proceeding
by reason of the fact that ▇▇▇▇▇ was a director or officer of the Company or was
serving as such an Affiliate Executive.
f. Promptly after receipt by ▇▇▇▇▇ of notice of the commencement of any
Proceeding, ▇▇▇▇▇ shall, if a claim in respect thereof is to be made against the
Company under this Agreement, notify the Company of the commencement thereof,
but failure to so notify the Company will not relieve the Company from any
liability which it may have to ▇▇▇▇▇. With respect to any such Proceeding: (i)
the Company shall be entitled to participate therein at its own expense; (ii)
except with prior written consent of ▇▇▇▇▇, the Company shall not be entitled to
assume the defense of any Proceeding; and (iii) the Company shall not settle any
Proceeding in any manner which would impose any penalty or limitation on ▇▇▇▇▇
without ▇▇▇▇▇'▇ prior written consent.
16 Dispute Resolution. The Company and ▇▇▇▇▇ agree that any dispute or
controversy arising between any of the Parties to this Agreement, or any person
or entity in privity therewith, out of the transactions effected and
relationships created in connection herewith, including any dispute or
controversy involving the formation, terms or construction of this Agreement,
regardless of kind or character, will be resolved through binding arbitration
held in New York, NY. The only disputes not subject to mandatory, binding
arbitration are requests for injunctive relief. With respect to the arbitration
of any dispute or controversy, each Party understands that: (i) arbitration is
final and binding on the Parties; (ii) each Party is waiving its right to seek
certain remedies in court, including to right to a jury trial; (iii) discovery
in arbitration is different and more limited than discovery in litigation; and
(iv) an arbitrators' award need not include factual findings or legal reasoning,
and any Party's right to appeal or to seek modification of a ruling by the
arbitrator is strictly limited.
a. Each Party to this Agreement will submit any dispute or controversy to
arbitration before the American Arbitration Association ("AAA") within five (5)
days after receiving a written request to do so from the other Party. If any
Party fails to submit a dispute or controversy to arbitration as requested, then
the requesting Party may commence the arbitration proceeding. The Federal
Arbitration Act will govern the proceeding and all issues raised by this
Agreement to be arbitrated. Each Party to this Agreement will be bound by the
determination of an arbitration panel of three members empanelled by the AAA to
adjudicate the dispute. Judgment on any arbitration award may be entered in any
court of competent jurisdiction.
b. Any Party to this Agreement may bring an action including a summary or
expedited proceeding of any such dispute or controversy in a court of competent
jurisdiction and, further, may seek provision or ancillary remedies, including
temporary or injunctive relief in connection with such dispute or controversy in
a court of competent jurisdiction, provided that the dispute or controversy is
ultimately resolved through binding arbitration conducted in accordance with the
terms and conditions of Section 16. If any Party institutes legal proceedings in
an effort to resist arbitration and is unsuccessful in doing so, the prevailing
Party is entitled to recover, from the losing Party, its legal fees and
out-of-pocket expenses incurred in connection with the defense of such legal
proceedings.
17 Miscellaneous.
a. Notices. Any and all notices, demands, requests or other communication
required or permitted by this Agreement or by law to be served on, given to, or
delivered to any Party hereto by any other Party to this Agreement shall be in
writing and shall be deemed duly served, given, or delivered when personally
delivered to the Party to be notified, or in lieu of such personal delivery,
when deposited in the United States mail, registered or certified mail, return
receipt requested, or when confirmed as received if delivered by overnight
courier, addressed to the to the Party to be notified, at the address of the
Company at its principal office, as first set forth above, or to ▇▇▇▇▇ at the
address as first set forth above. The Company or ▇▇▇▇▇ may change the address in
the manner required by law for purposes of this paragraph by giving notice of
the change, in the manner required by this paragraph, to the respective Parties.
b. Amendment. This Agreement may not be modified, changed, amended, or
altered except in writing signed by ▇▇▇▇▇ or his duly authorized representative,
and by a member of the Board.
c. Governing Law. This Agreement shall be interpreted in accordance with
the laws of the State of New York. It shall inure to the benefit of and be
binding upon the Company, and its successors and assigns.
d. Attorney's Fees. Should ▇▇▇▇▇ substantially prevail any litigation or
arbitration commenced between the Parties to this Agreement concerning any
provision of this Agreement, the expense of all attorneys' fees and the Company
shall pay other costs incurred by ▇▇▇▇▇ in connection therewith.
e. Severability. Should any provision or portion of this Agreement be held
unenforceable or invalid for any reason, the remaining provisions and portions
of this Agreement shall be unaffected by such holding.
f. Entire Agreement. This Agreement constitutes the sole and only agreement
of the Parties hereto respecting the subject matter hereof. Any prior
agreements, promises, negotiations, or representations concerning its subject
matter not expressly set forth in this Agreement, are of no force and effect.
g. Counterparts. This Agreement and any certificates made pursuant hereto,
may be executed in any number of counterparts and when so executed all of such
counterparts shall constitute a single instrument binding upon all Parties
hereto notwithstanding the fact that all Parties are not signatory to the
original or to the same counterpart.
h. Section Headings. The Article and Section headings used in this
Agreement are for reference purposes only, and should not be used in construing
this Agreement.
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the day
and year set forth below.
eB2B Commerce, Inc
By:______________________ By:______________________
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
Chief Executive Officer Date:_____________________
Date:_____________________