EXH 10
EXH 10.5
Employment Agreement (the "Agreement"), effective as of June 1, 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 electronic commerce networks; and
WHEREAS, the Company desires ▇▇▇▇▇▇ to serve as Executive Vice
President- Corporate Development and General Counsel of the Company and ▇▇▇▇▇▇
desires to accept the positions of Executive Vice President- Corporate
Development and General Counsel 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 Executive Vice President- Corporate
Development and General Counsel of the Company, to perform services for
the Company normally associated with such positions 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, during reasonable business hours, to the affairs and
business of the Company. ▇▇▇▇▇▇ 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. Notwithstanding the foregoing, the Company
recognizes that ▇▇▇▇▇▇ currently serves as a member of the board of
directors of Studion Inc., and is currently contemplating joining one
more board, and that such positions may have ongoing obligations. The
Company hereby agrees that ▇▇▇▇▇▇' service on the board of directors of
Studion Inc. and such additional board shall not be a breach of the
provisions of this Section 1; provided that such service on the boards
does not interfere with, nor create a conflict of interest with respect
to ▇▇▇▇▇▇' performance of his duties hereunder. ▇▇▇▇▇▇ agrees to use
reasonable business efforts to coordinate his respective commitments so
as to fulfill his obligations to the Company hereunder.
2 Term. The term of this Agreement shall be the period from the Effective
Date and terminating on December 31, 2003 (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. For purposes of this
Agreement, the phrase "Term" when used in this Agreement shall mean
either the Initial Employment Term, the Succeeding Employment Term, or
both, as the context requires.
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
not less than $175,000 per year and the Company agrees that the
base salary will increase annually in an amount no less than
five (5%) percent of the previous year's base salary (the "Base
Salary"), with the first such increase to occur on January 1,
2001, and on January 1 of each year of the Term thereafter. 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 thirty-five
thousand ($35,000) dollars as a signing bonus from
the Company ("Signing Bonus"). The Company will pay
the Signing Bonus to ▇▇▇▇▇▇ ratably over a three (3)
month period, commencing upon 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 the period commencing on the Effective
Date through December 31, 2000, and each year of Term
of this Agreement, the Company will pay ▇▇▇▇▇▇ a
bonus no less than seventy-five thousand ($75,000)
dollars ("Minimum Bonus"). During the first six (6)
months of this Agreement, twenty-five thousand
($25,000) of the Bonus ("Payout Bonus") will be paid
to ▇▇▇▇▇▇ in equal monthly installments, and for each
calendar year thereafter, the Payout Bonus will be
paid to ▇▇▇▇▇▇ ratably at the end of each calendar
quarter. The remaining balance of the
Minimum Bonus will be paid to ▇▇▇▇▇▇ within three (3)
months after calendar year end. In addition, ▇▇▇▇▇▇
will also be eligible for an additional bonus of at
least $75,000 (the "Maximum Bonus") based upon
reasonably based and achievable business goals which
the CEO and ▇▇▇▇▇▇ mutually agree. The Company and
▇▇▇▇▇▇ agree that the goals for the Maximum Bonus
will be set within 30 days of the Effective Date, and
by January 31st of each of year of the Term
thereafter.
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 two hundred sixty-six thousand
(266,000) shares of the 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) one third (1/3) will vest
immediately upon the Effective Date, and (ii) the remaining
two-thirds (2/3) will vest ratably at the end of each month
that ▇▇▇▇▇▇ is employed by the Company over a two (2) year
period, commencing upon the Effective Date; (b) the exercise
price of the Options shall be $2.07 per share, as appropriately
adjusted for stock splits, stock dividends, and the like; (c)
the Options shall have a term of 10 years; and (d) 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,
one hundred (100%) percent of the Options shall immediately
vest upon ▇▇▇▇▇ ▇▇▇▇▇▇▇▇'▇ departure as the Company President
and Chief Executive Officer, for whatever reason, and shall be
immediately exercisable at any time prior to the expiration
date of the term of the Options whether or not ▇▇▇▇▇▇ is
employed by the Company at the time of such exercise.
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 four (4) weeks paid vacation during each year of
this Agreement and an additional week for each additional year
of service thereafter, up to a maximum of six (6) weeks.
b. 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.
c. Car Allowance. The Company will pay to ▇▇▇▇▇▇ a car allowance
of eight hundred ($800) dollars per month. Such car allowance
shall increase by $100 in each January during the Term. In
addition, the Company will reimburse ▇▇▇▇▇▇ for all costs of
fuel and repairs incurred in connection with the use of a car.
The Company will also give ▇▇▇▇▇▇ a computer and all
appropriate ancillary equipment, as ▇▇▇▇▇▇ shall determine, for
use at his home. The Company will also reimburse all costs of
maintenance, repair, upgrades, high speed internet access and
software as ▇▇▇▇▇▇ shall determine.
d. Country Club and Health Membership. The Company shall reimburse
▇▇▇▇▇▇, or pay directly if requested by ▇▇▇▇▇▇, for any
initiation fees, membership fees, dues and expenses incurred by
▇▇▇▇▇▇ during the term of this Agreement for a membership in a
country club chosen by ▇▇▇▇▇▇ and approved by the Company, and
for any health club chosen by ▇▇▇▇▇▇.
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 executives from time to time, to the extent ▇▇▇▇▇▇ meets
the eligibility requirements for any such plan or benefit. (For
purposes of this Agreement, the benefits described in Sections
4.1, 4.3 and 4.4 are hereafter collectively defined as the
"Benefits.")
5 Expenses. The Company shall either reimburse ▇▇▇▇▇▇, or pay directly if
requested by ▇▇▇▇▇▇, 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 as ▇▇▇▇▇▇ shall determine in his sole
discretion. ▇▇▇▇▇▇ 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 ▇▇▇▇▇▇ Without Good Reason. The Parties agree
that ▇▇▇▇▇▇ has the right to voluntarily terminate his
employment with the Company by providing the Company with a
minimum of twenty (20) days' prior written notice. Upon the
termination date specified in the notice, ▇▇▇▇▇▇ 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 date
of such termination of employment.
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 twenty(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, titles, positions or
responsibilities which represents an adverse change
from his status, titles, positions or responsibilities
as in effect immediately prior thereto; the assignment
to ▇▇▇▇▇▇ of any duties or responsibilities which are
inconsistent with his status, titles or positions; 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 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, or
to pay any of the Benefits within twenty (20) days of
the date such payment 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 sixty (60) days
following such notice. ▇▇▇▇▇▇ will cease to have any power of
his office as of such date. In addition, the failure of the
Company to extend the Term of this Agreement for a Succeeding
Employment Term (or a termination by the Company which has the
effect of terminating this Agreement without a Succeeding
Employment Term) shall be deemed a termination of ▇▇▇▇▇▇'
employment by the Company for convenience.
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 the Company's business or
reputation;
ii. Actions by ▇▇▇▇▇▇ intentionally furnishing materially
false, misleading or omissive information to the Board
which results in damage to the Company;
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 7 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 substantial
damage to the Company, but not encompassing illness,
physical or mental incapacity.
For purposes of this provision, no act or failure to act on the part of
▇▇▇▇▇▇ shall be considered "willful" unless it is done, or omitted to be done,
by ▇▇▇▇▇▇ in bad faith or without reasonable belief that his action or omission
was in the best interests of the Company. Any act, or failure to act, based upon
authority given pursuant to a resolution duly adopted by the Board or based upon
the advice of counsel for the Company shall be conclusively presumed to be done,
or omitted to be done, by ▇▇▇▇▇▇ in good faith and in the best interests of the
Company and its affiliates. ▇▇▇▇▇▇' employment hereunder shall not be deemed to
be terminated for Cause until a Notice of Termination (as defined below) is
provided to him, and within seven (7) days after the Notice of Termination is
given to ▇▇▇▇▇▇, he, together with counsel, is heard before the Board (a "Board
Hearing") during which Board Hearing, the Board in good faith resolves that
▇▇▇▇▇▇ is guilty of the conduct described in Section 6.4 hereof. 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. In the
event that ▇▇▇▇▇▇' employment is terminated by the Company for Cause, and the
Board determines that the termination was for reasons other than for Cause,
▇▇▇▇▇▇ will be entitled to receive the Termination Compensation (as defined
below) that would normally have been due him for a termination by the Company
pursuant to Section 6.2 hereof. Additionally, ▇▇▇▇▇▇ shall be reimbursed for all
legal and other expenses incurred by him related to said termination.
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. Change of Control. Provided that the Company is a public
company, ▇▇▇▇▇▇ may terminate this Agreement upon twenty (20)
days' notice to the Company at any time within the one hundred
eighty (180) day period following the date of the occurrence of
a "Change of Control." For the purposes of this Agreement, a
"Change of Control" shall be deemed to have occurred if: the
Company has a net worth of at least one million
($1,000,000) dollars (as reflected on any quarterly or annual
financial statement), and either (i) a third person, including
an entity or a "group" as defined in Article 13(d) or 14(d) of
the Securities Exchange Act of 1934, as amended (other than an
entity or "group" which includes ▇▇▇▇▇▇), becomes the
beneficial owner of shares of the Company having thirty (30%)
percent or more of the total number of votes that may be cast
for the election of directors of the Company in the year 2000
and thereafter; or (ii) as the result of, or in connection
with, any cash tender or exchange offer, merger of other
business combination, sale of assets or contested election, or
any combination of the foregoing transactions (a
"Transaction"), the persons who were directors of the Company
before the Transaction shall cease to constitute a majority of
the Board of the Company or any successor to the Company. In
addition, the term "Change of Control" shall also include the
departure of ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ as the Chief Executive Officer of
the Company, for whatever reason. In the event ▇▇▇▇▇▇ does not
exercise his rights to terminate this Agreement in the event of
a Change of Control as a result of the departure of ▇▇▇▇▇
▇▇▇▇▇▇▇▇ as the Chief Executive Officer of the Company, the
same rights to terminate this Agreement for a Change of Control
shall be in place for ▇▇▇▇▇▇ with respect to the departure of
the Chief Executive Officer who immediately succeeds ▇▇▇▇▇▇▇▇
as Chief Executive Officer of the Company.
g. Notice of Termination. Any termination by the Company for
Cause, or by ▇▇▇▇▇▇ for Good Reason or as a result of a Change
of Control, shall be communicated by 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.
h. 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,
6.5 or 6.6 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 6.8.1, this Section
shall control.
ii. Termination Compensation. If ▇▇▇▇▇▇' employment with
the Company terminates for whatever reason, the Company
will pay ▇▇▇▇▇▇ (i) any accrued and unpaid Base Salary
and pro-rated Minimum Bonus as of the date of
termination, (ii) the payment or reimbursement of all
unpaid Benefits incurred up to the date of termination,
and (iii) an amount to reimburse ▇▇▇▇▇▇ for any and all
monies advanced or expenses incurred on or prior to the
date of termination but not paid to ▇▇▇▇▇▇. In
addition, if ▇▇▇▇▇▇' employment with the Company
terminates pursuant to Sections 6.2, 6.3, 6.5 or 6.6
hereof the Company will pay ▇▇▇▇▇▇ an amount equal to
one hundred fifty (150%) percent of the annual
compensation due to be paid to ▇▇▇▇▇▇ in the year of
such termination (including Base Salary, Minimum Bonus
and Maximum Bonus) (the "Termination Compensation").
The Termination Compensation herein shall be deemed
liquidated damages resulting from the Company's sole
and exclusive remedy for any such termination.
Termination Compensation shall not be diminished or
offset by reason of any earnings by ▇▇▇▇▇▇ subsequent
to the date of termination.
iii. Payment of Termination Compensation. Except as
otherwise provided below, the Termination Compensation
shall be paid in monthly installments over the twelve
(12) months following the event giving rise to the
payment of Termination Compensation. If employment
termination is a result of the death of ▇▇▇▇▇▇, the
initial Termination Compensation payments shall be made
within fifteen (15) days after the personal
representative of ▇▇▇▇▇▇' estate notifies the Company
that Letters Testamentary have been issued to the
estate appointing an authorized representative of the
estate.
iv. Continuation of Benefits. In addition, if ▇▇▇▇▇▇'
employment with the Company terminates pursuant to
Sections 6.2, 6.3, 6.5 or 6.6 hereof, ▇▇▇▇▇▇ shall be
entitled to the Benefits and all of the other benefits
and personal perquisites otherwise provided in this
Agreement during the two year period following the date
of termination.
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, by 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 to either Section 6.1 or 6.4 hereof through the first
(1st) 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. 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 either Party 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 other costs incurred by
prevailing Party in connection therewith shall be paid by the
non-prevailing Party.
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:_____________________