EMPLOYMENT AGREEMENT (the "Agreement"), effective as of December 1,
1998 (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 sales and service of building,
owning and operating electronic commerce networks;
WHEREAS, ▇▇▇▇▇ currently serves as the Chief Technology Officer of the
Company; and
WHEREAS, the Company and ▇▇▇▇▇ believe that it is appropriate for them
to memorialize their understandings with respect to ▇▇▇▇▇'▇ employment,
including confidentiality and non-competition provisions, and agree as to each
other's obligations pursuant to their employer-employee relationship.
NOW, THEREFORE, in consideration of the mutual 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. ▇▇▇▇▇ shall serve in the capacity of
Chief Technology Officer, perform services for the Company normally associated
with such position, and use his best efforts to meet the business requirements
and goals set by the board of directors of the Company (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. ▇▇▇▇▇ 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 orders, directions, and policies
enacted by the Board.
2 Term. The term of this Employment Agreement shall be the period from
the Effective Date and terminating on December 31, 2001 (the "Initial Employment
Term"). The Agreement shall thereafter automatically renew for successive one
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.
3.1 Base Salary. The Company will compensate and pay ▇▇▇▇▇ for his
services during the term of this Agreement at a base salary of $125,000 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"). The Base Salary shall be payable to ▇▇▇▇▇ in accordance with the
Company's standard payroll policy for similarly situated employees of the
Company. The Company has the right, from the Effective Date to December 31,
1999, to accrue the Base Salary of ▇▇▇▇▇. At any time thereafter, the Company's
right and conditions to accrue the Base Salary of ▇▇▇▇▇ shall be mutually agreed
upon by the Company and ▇▇▇▇▇. In the event that the Base Salary is accrued,
▇▇▇▇▇ has the right to convert the accrued Base Salary (less applicable
withholding taxes and standard payroll deductions) ("Accrued Salary") to
purchase shares of the Company's Common Stock, in accordance with the Accrued
Salary Stock Purchase Agreement executed simultaneously with the execution of
this Agreement.
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3.2 Bonus. ▇▇▇▇▇ may receive, from time to time, bonus compensation
from the Company, as established by the Board 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 senior 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 calendar
year of this Agreement, commencing with the 1999 calendar year, the Company will
pay ▇▇▇▇▇ a bonus of no less than twenty-five thousand ($25,000) dollars,
payable by March 15th of the following year.
3.3 Performance Based Options. The parties acknowledge that ▇▇▇▇▇ and
the Company have entered into the 1998 Executive Performance Equity Agreement
(the "Executive Performance Agreement"), to which ▇▇▇▇▇ will be granted options
("Award") to purchase up to one hundred thousand (100,000) shares of the
Company's Common Stock provided that certain performance goals are met.
3.4 Stock Options. In addition, and 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. For purposes of this
Agreement, "Options" shall mean any options granted under the Company's
incentive stock option plan and the Executive Performance Agreement.
3.5 Deferred Compensation.
3.6 Amount. Deferred Compensation shall be the amount which is
calculated as the greater of (A) three hundred (300%) percent of the Base Salary
payments ▇▇▇▇▇ would have received had his employment continued for the
remaining term of this Agreement (including yearly increases); or (B) an amount
equal to two hundred (200%) percent of the highest annual compensation earned by
▇▇▇▇▇ in the past three (3) years (including both Base Salary and Bonus
Compensation). In addition to the Deferred Compensation, ▇▇▇▇▇ shall be entitled
to all of the benefits and personal perquisites otherwise provided in this
Agreement (including the car allowance, as described in Section 4.2 hereof)
during the period of time which is the greater of (X) the remaining term of this
Agreement, or (Y) two (2) years following the date of termination. The Deferred
Compensation herein shall be deemed liquidated damages resulting from the
Company's sole and exclusive remedy for any such termination. Deferred
Compensation shall not be diminished or offset by reason of any earnings by
▇▇▇▇▇ subsequent to the date of termination.
3.7 Payment of Deferred Compensation. Except as otherwise provided
below, the Deferred Compensation shall be paid in monthly installments over the
twelve (12) months following the event giving rise to the payment of Deferred
Compensation. If employment termination is a result of the death of ▇▇▇▇▇, the
initial Deferred 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.
3.8 Withholding. All compensation paid to ▇▇▇▇▇ shall be subject to the
applicable withholding taxes and other employment taxes as required with respect
to compensation paid by an employer to an employee.
4 Benefits.
4.1 Health Insurance; Vacation. The Company shall provide ▇▇▇▇▇ with
health
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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 employees of the Company. ▇▇▇▇▇ shall be
entitled to four (4) weeks paid vacation during each year of this Agreement.
4.2 Car Allowance. The Company will pay to ▇▇▇▇▇ a car allowance of
seven hundred ($700) dollars per month.
4.3 Life Insurance. Provided the Company has a net worth (as reflected
on any quarterly or annual financial statements) in excess of one million
($1,000,000) dollars, the Company shall provide, at its own expense, life
insurance coverage on ▇▇▇▇▇'▇ life for five hundred thousand ($500,000) dollars.
▇▇▇▇▇ shall have full discretion to name the beneficiary of this insurance. The
Company shall have the right at its own expense and for its own benefit to
purchase additional insurance on ▇▇▇▇▇'▇ life for the benefit of the Company,
and ▇▇▇▇▇ shall cooperate by providing necessary information, submitting to
required medical examinations, and otherwise complying with the insurance
carrier's requirements.
4.4 Travel Expenses. Commencing January 1, 2000, the Company shall
reimburse ▇▇▇▇▇ or otherwise provide for or pay up to ten thousand ($10,000)
dollars a year for all reasonable expenses incurred by ▇▇▇▇▇ in connection with
traveling from his residence in Atlanta, GA 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"). In the event ▇▇▇▇▇
relocates to the New York City Area, the Company will cease paying ▇▇▇▇▇'▇
travel expenses pursuant to this Section 4.4.
4.5 Moving Expenses. In the event ▇▇▇▇▇ desires to relocate his
permanent residence from Atlanta, GA to New York, NY or an area within a fifty
(50) mile circumference of New York, NY ("New York City Area"), the Company
shall reimburse ▇▇▇▇▇ or otherwise provide for or pay up to twenty-five thousand
($25,000) dollars for reasonable expenses incurred in relocating him and his
family to the New York City Area.
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 and professional
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.
6.1 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' 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, and the Company will not be required to pay
▇▇▇▇▇ the Deferred Compensation.
6.2 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 ▇▇▇▇▇. In such event, the Company will
pay ▇▇▇▇▇ the Deferred
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Compensation. The date of termination will be the date specified in a notice
from the Board, and ▇▇▇▇▇ will cease to have any power of his office as of such
date.
6.3 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:
6.3.1 Conduct on ▇▇▇▇▇'▇ part willfully intended to or likely to
injure the Company's business or reputation;
6.3.2 Actions by ▇▇▇▇▇ intentionally furnishing materially false,
misleading, or omissive information to the Board;
6.3.3 ▇▇▇▇▇ is convicted of any felony or other serious offense;
6.3.4 Abusive use of drugs or alcohol by ▇▇▇▇▇;
6.3.5 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
6.3.6 The willful and significant failure by ▇▇▇▇▇ to perform
duties and obligations as set forth in this Agreement, resulting in substantial
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 a notice 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 and any Bonus Compensation 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 such event, the Company will not be required to pay ▇▇▇▇▇
the Deferred Compensation.
6.4 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 or other cause, to perform the majority of his usual duties for a
period of at least three (3) continuous months. If ▇▇▇▇▇'▇ employment is
terminated due to ▇▇▇▇▇'▇ death or Disability, the Company will pay ▇▇▇▇▇ the
Deferred Compensation.
6.5 Good Reason. ▇▇▇▇▇ may terminate his employment for Good Reason
("Good Reason") upon sixty (60) days' notice to the Company if (i) ▇▇▇▇▇'▇
duties are materially diminished or altered so as to be inconsistent with
▇▇▇▇▇'▇ position, authority or responsibilities as the Chief Technology Officer
of the Company; (ii) any change of ▇▇▇▇▇'▇ title; (iii) any substantial adverse
change in ▇▇▇▇▇'▇ position, authority or responsibilities as the Chief
Technology Officer; (iv) the material failure by the Company to comply with the
terms of this Agreement; (v) the Company requires ▇▇▇▇▇ to be based or perform
services at any location more than fifty (50) miles from New York, NY (except
normal travel requirements associated with ▇▇▇▇▇'▇ position and title); or (vi)
▇▇▇▇▇'▇ Base Salary is materially diminished. In the event ▇▇▇▇▇'▇ employment
relationship with the Company is terminated for "Good Reason," the Company will
pay ▇▇▇▇▇ the Deferred Compensation. In the event that ▇▇▇▇▇ shall in good faith
give a "Notice of Termination," as hereinafter defined in Section 6.7 hereof,
for Good Reason and it shall thereafter be determined that Good Reason did not
exist, the employment of ▇▇▇▇▇ shall, unless the Company and ▇▇▇▇▇ shall
otherwise mutually agree, be deemed to
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have terminated, at the date of the giving of such purported Notice of
Termination. In such event ▇▇▇▇▇ shall be deemed to have elected to voluntarily
resign and shall be entitled to receive only those payments and benefits which
he would have been entitled to receive at such date under Section 6.1 of this
Agreement.
6.6 Change of Control. Provided that the Company is a public company,
▇▇▇▇▇ may terminate this Agreement upon thirty (30) 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 the event ▇▇▇▇▇'▇ employment relationship with
the Company is terminated for a Change of Control, the Company will pay ▇▇▇▇▇
the Deferred Compensation.
6.7 Termination by the Company for Lack of Presence. The Parties agree
that, commencing on January 1, 2000, ▇▇▇▇▇ must be present, at a minimum of four
(4) business days a week, at the Corporate Headquarters ("Minimum Time"). In the
event that ▇▇▇▇▇ fails to spend the Minimum Time, the Company may terminate
▇▇▇▇▇'▇ employment relationship with the Company. In such an event, the Company
will not be required to pay ▇▇▇▇▇ the Deferred Compensation.
6.8 Notice of Termination. Any termination by the Company for Cause, or
by ▇▇▇▇▇ for Good Reason shall be communicated by Notice of Termination to the
other Party hereto given in accordance with Section 18 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.
6.9 Obligations of the Company Upon Certain Terminations. In the event
that ▇▇▇▇▇'▇ employment with the Company is terminated pursuant to Sections 6.2,
6.4, 6.5 and 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 specific option agreement currently in effect with regard
to each Option grant, provided that, to the extent the provisions of the option
agreements are inconsistent with this Section 6.8.1, the Section shall control.
6.10 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 17 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.
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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"):
7.1 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.
7.2 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.
7.3 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").
7.4 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.
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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:
9.1 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.
9.2 Prevent Disclosure. ▇▇▇▇▇ will take all reasonable precautions to
prevent disclosure of the Confidential Information in accordance with the
Company's reasonable instructions to ▇▇▇▇▇.
9.3 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 Post-Employment Procedures. ▇▇▇▇▇ agrees that, upon the termination of
his employment with the Company, he will (i) participate in good faith in the
Company's exit interview process; and (ii) enter into an appropriate Employment
Termination Agreement, in which, among other things, ▇▇▇▇▇ will represent to the
Company that he has fully complied with the terms of this Agreement and that he
will fulfill the then-executory obligations contained in this Agreement.
12 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
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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.
13 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.
14 Restrictive Covenants.
14.1 ▇▇▇▇▇ 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 that (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.
14.2 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 6.3
hereof through the second (2nd) anniversary of such date, ▇▇▇▇▇ 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 14 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.
14.3 Restrictive Covenants Necessary and Reasonable. ▇▇▇▇▇ agrees that
the provisions of this Section 14 are necessary and reasonable to protect the
Company in the conduct of its business. If any restriction contained in this
Section 14 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.
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15 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 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.
16 Indemnification.
16.1 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 Delaware General Corporation Law (the "DGCL"),
▇▇▇▇▇ 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.
16.2 Subject only to the provisions of this Section 16.2, 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
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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 16.2, 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.
16.3 ▇▇▇▇▇ 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.
16.4 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.
16.5 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.
16.6 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.
17 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:
10
(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.
17.1 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 empaneled by the AAA
to adjudicate the dispute. Judgment on any arbitration award may be entered in
any court of competent jurisdiction.
17.2 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 17. 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.
18 Miscellaneous.
18.1 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.
18.2 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.
18.3 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.
18.4 Attorney's Fees. Should any litigation or arbitration be commenced
between the Parties to this Agreement concerning any provision of this
Agreement, the expense of all attorneys' fees and other costs incurred in
connection therewith shall be paid by the losing Party.
18.5 Severability. Should any provision or portion of this Agreement be
held
11
unenforceable or invalid for any reason, the remaining provisions and portions
of this Agreement shall be unaffected by such holding.
18.6 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.
18.7 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.
18.8 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: _______________________
▇▇▇▇▇ ▇▇▇▇▇
Date:_____________________ Date:______________________
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