EMPLOYMENT AGREEMENT
--------------------
DATED: August 1, 1998
PARTIES: NeTTaxi Online Communities, Inc., a Delaware corporation (herein
the 'Employer")
Xxxxxx X. Xxxxxxxx, Xx., an individual (herein the "Employee")
RECITALS:
A. Employee desires to provide services to Employer and Employer desires to
retain the services of Employee.
B. Employer and Employee desire to formalize the terms and conditions of
Employee's employment with Employer.
AGREEMENT:
NOW, THEREFORE, in consideration of the Recitals and the mutual covenants set
forth herein below, and as a material inducement for Employee to enter into this
Employment Agreement (the "Agreement"), Employer and Employee hereby agree as
follows:
Section 1. Employment. Employer hereby employs Employee in the capacity
---------- ------------
of Chief Executive Officer and a member of the Board of Directors (the "Board").
Employee hereby accepts such employment, upon the terms and subject to the
conditions herein contained.
Section 2. Duties. During the Employee's employment with Employer,
----------- --------
Employee will report directly to the Board, will be responsible for performing
those duties consistent with the position of President as may from time to time
may be reasonably assigned to or requested of Employee by Employer's Board.
Employee shall use his reasonable efforts to perform faithfully and effectively
such responsibilities. Employee shall conduct all of his activities in a manner
so as to maintain and promote the business and reputation of the Employer.
Employee, during his employment with Employer, will devote all of his business
time, attention and skills to the business and affairs of Employer. Employee's
principal place of employment during his employment with Employer shall be in
Campbell, California. In the event that Employer shall change the location of
its principal office, Employee shall be entitled to be reimbursed for reasonable
documented relocation expenses.
Section 3. Compensation and Benefits,
----------- ----------------------------
3.1 Annual Salary. Employer shall pay to Employee, and Employee
---------------
will accept, as 'FULL compensation for any and all services rendered and to be
rendered by him to Employer in all capacities during the term of his employment
under this Agreement: (1) a base salary at the annual rate of $125,000 for the
first year of employment hereunder, or at such higher rate as the Board shall
determine, in its sole discretion ("Base Salary"), payable in accordance-'with
the regular payroll practices of Employer; and (ii) the additional benefits
hereinafter set forth in this Section 3.
3.2 Annual Bonus and Option
--------------------------
(a) Employee shall be entitled to an annual bonus in the minimum amount
of Fifty Thousand Dollars ($50,000) U.S.D. (the "Minimum Bonus"), up to a
maximum of the Annual Salary then payable to Employee in accordance with the
terms and provisions of this Agreement, payable on the anniversary date of this
Agreement, commencing August 1, 1999. Any annual bonus in excess of the Minimum
Bonus shall be determined by the Board in its sole discretion based upon
performance targets established by the Board at the beginning of each year of
employment hereunder; and
(b) Upon execution of this Agreement, Employer hereby grants to
Employee a stock option for 175,000 shares of common stock of Employer to
Employee as an inducement to Employee to
enter into this Agreement, together with an option to purchase an additional
175,000 shares of common stock of Employer at the price of $0.10 per share all
under the Company's Employee Stock Option PlanThe option may be exercised
annually as to one-third (1/3) of such shares, if and only if Employee is in the
employ of Employer. In the event Employee is not employed due to those events
described in Section 5(a), 5(b), 5(d), 5(e) and 5(f), then and in such event the
option may be exercisable at the time of such termination irrespective of the
fact that Employee is no longer employed by Employer. The option may be
exercisable at any time within five (5) years from the date of this Agreement,
after which time the option shall lapse and be of no further force or effect.
3.3 Annual Salary Increases. The Base Salary set forth for the
--------------------------
Employee in Section 3.1 shall be increased by an amount equivalent to an
increase of Ten Percent (10%) per annum, which increase shall be cumulative for
each year. For example, in year three (3) of the Term of Employment, as defined
below, the base annual salary due Employee shall be the sum of One Hundred Fifty
One Thousand Two Hundred Fifty Dollars ($151,250), based upon the formula of
year one base of $125,000 x 10% = $137,500; and for year two base x 10% for year
three annual increase of 10% = $151,250. The Minimum Bonus or any additional
bonus amount shall not be taken into consideration when determining the annual
salary increases.
3.4 Employee Benefits.
-------------------
(a) Expenses. Employer shall reimburse Employee for expenses he
---------
reasonably incurs in connection with the performance of his duties (including
business, travel and entertainment expenses), and all in accordance with
Employer's policies with respect hereto.
(b) Employer Health and Welfare Plans. Employee will be entitled to
----------------------------------
participate in such Employee benefit plans and programs as Employer may from
time to time offer or provide to Employees of Employer, including, but not
limited to, participation in life insurance, health and accident, medical and
dental, disability and retirement plans and programs.
(c) Vacation. Employee shall be eligible for three (3) weeks of
---------
paid vacation leave per year after the first year of employment, and thereafter
four (4) weeks per annum.
(d) Automobile. Employer shall pay to Employee, or to an automobile
-----------
leasing company chosen by Employee, a car allowance not to exceed the sum of Six
Hundred Dollars ($600) per month, payable monthly, commencing on the first
calendar month of each month after the effective date of this Agreement. In
addition, Employer shall pay all insurance costs and repair costs for the
vehicle leased by Employee within 30 days after receipt of bills or statements
reflecting such expenditures.
Section 4. Employment Term. Employee' s employment by Employer pursuant
----------- ----------------
to this Agreement shall commence on the date of this Agreement and will continue
until the day:.prior to the fourth anniversary of the date of this Agreement
(the "Initial Term"). Thereafter, this Agreement shall be automatically renewed
for successive one year periods commencing on August 1st of each subsequent year
(the Initial Term, together with any subsequent employment period being referred
to herein as the "Employment Term"); provided, however, that either party may
elect to terminate this Agreement as of July 31, 2001 or as of any subsequent
July 31st (a "Renewal Termination Date"), by written notice to such effect
delivered to the other party at least 90 days prior to the Renewal Termination
Date.
Section 5. Termination of Employment.
----------- ----------------------------
5.1 Events of Termination. Employee's employment with Employer will
----------------------
terminate upon the occurrence of any one or more of the following events:
(a) Death. In the event of Employee's death, Employee's employment
------
will terminate on the date of death.
(b) Disability. In the event of Employee's Disability (as
-----------
hereinafter defined), Employer will have the option to terminate Employee's
employment by giving a notice of termination to Employee. The notice of
termination shall specify the date of termination, which date shall not be
earlier
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than thirty (30) days after the notice of termination is given. For purposes of
this Agreement, "Disability" means the 'inability of Employee to substantially
perform his duties hereunder for 180 days out of 365 consecutive days as a
result of a physical or mental illness, all as determined in good faith by the
Board.
(c) Termination by Employer for Cause. Employer may, at its option,
----------------------------------
terminate Employee's employment for "Cause" based on objective factors
determined in good faith by a majority of the Board by giving a Notice of
Termination to Employee specifying the reasons for termination and if Employee
shall fail to cure same within ten (10) days of his receiving the Notice of
Termination his Employment shall terminate at the end of such ten (10) day
period; provided, that in the event the Board in good faith determines that the
underlying reasons giving rise to such determination cannot be cured, then said
cure period shall not apply and Employee's employment shall terminate on the
date of Employee's receipt of the Notice of Termination. "Cause" shall mean: (a)
Employee's conviction of, guilty or no contest plea to, or confession of guilt
to, a felony; (ii) a willful act by Employee which constitutes gross misconduct
and which is materially injurious to Employer; (iii) a willful and material
failure by Employee to substantially perform his duties, other than a failure
resulting from a Disability as defined in Section 5.1 (b) hereof; (iv) violation
by Employee of Section 7.4 of this Agreement; or (v) except as may be permitted
herein, disclosure of material Confidential Information (as defined in Section
7.1 hereof) without the prior written consent of Employer.
(d) Without Cause by Employer. Employer may, at its option,
-----------------------------
terminate Employee's employment for any reason whatsoever (other than for the
reasons set forth above in Subsection (c) above) by giving a notice of
termination to Employee, and Employee's employment shall terminate on the later
of the date the notice of termination is given or the date set forth in such
notice of termination. At the time of such termination without cause, Employer
shall pay to Employee, without offset, termination standard and consistent
withholdings as required by governmental taxing authorities pertaining to wages,
all benefits reasonably calculated to be due Employee, including but not limited
to: (i) base annual salary commutatively for the remainder of the entire
Employment Term; (H) Minimum Bonus, plus any pro rata bonus in excess of the
Minimum Bonus, as determined by the date of such termination; (Iii) pre-payment
of all automobile allowance for the remaining period of the Employment Term,
together with insurance premiums based upon the initial cost of automobile
insurance as existed in the immediately preceding calendar year prior to such
termination of the Employment Term; and (iv) continued coverage for life, health
and disability Insurance for the remainder of the Employment Term. All such sums
due Employee shall be paid in a lump sum within three (3) calendar days of such
termination, excepting that the continuation of Employee in any Employment
Benefit Plan shall continue to be paid monthly or other periodic payment period
as other employees of Employer throughout the natural expiration of the
Employment Term. Notwithstanding the foregoing, the severance provision,
provided in subsection (d) immediately below, shall supersede the foregoing
termination provisions of this subsection based upon a change of control of the
Employer based upon a takeover of 'the Employer through a change of control of
the company.
(e) Severance Based upon Chance of Control. In the event Employer
-----------------------------------------
enters into an agreement with another person or entity, the effect of which is
to change the control of the Employer as of the date of entry into this
Agreement and in which event there is any charge in the provisions of this
Agreement or the benefits due the Employee by virtue of this Agreement, then and
in such event, Employee shall be exclusively entitled to terminate this
Agreement, and in such event, Employer shall pay to employee a severance payment
equal] to three (3) years of annual benefits to be realized by Employee in
accord with the terms of this Agreement, payable in one lump sum, as if no
change of control were to have occurred. In other words, ail base income,
incentive income, deferred compensation, stock options and warrants (deemed
immediately vested), and health and welfare benefits will be paid to Employee in
one lump sum effective upon the change of control of Employer. In the event of
any delayed benefits owed to Employee hereunder are accelerated based upon the
provisions of this subparagraph (e), Employer shall pay same to Employee on an
accelerated basis, without discount for current payment accorded the amount of
such payment.
For purposes of this subparagraph (e), the term "change of control" shall
mean: (i) any change of equity such that more than fifty percent (50%) of the
issued and outstanding shares are transferred to a third party; (H) or debt
ownership, including but not limited to conversion rights of debt to equity of
the Employer such that more than fifty percent (50%) of the issued and
outstanding shares are
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transferred to a third party, or (iii) a sale of substantially all of Employees
assets, defined herein as Seventy Percent (70%) or greater of the Employees
gross assets.
(f) Employees Material Breach. Employee may, at his option,
----------------------------
terminate Employee's employment upon Employees material breach of this Agreement
by giving Employer written notice of such breach (which notice will identify the
manner in which Employer has materially breached this Agreement) and if such
breach is not cured within thirty (30) days of employer receiving such written
notice, Employee's employment shall terminate at the end of such thirty (30) day
period. Employer's "Material Breach" of this Agreement shall mean- (i) the
failure of Employer to pay Base Salary or additional compensation hereunder in
accordance with this Agreement; (ii) the assignment to Employee without
Employee's consent of duties substantially inconsistent with his duties as set
forth in Section 2 hereof; or (iii) the relocation of Employer's principal
offices to a geographic location other than in the northern California vicinity.
In the event of Employees breach, the amounts due Employee would be equivalent
to those benefits set forth in Paragraph 5.1 (e).
(g) Certain Obligations of Employer Following Termination of Employee's
-------------------------------------------------------------------
Employment. Following the termination of Employee's employment under the
-----------
circumstances described below, Employer will pay to Employee in accordance with
its regular payroll practices the following compensation and provide the
following benefits in full satisfaction and final settlement of any and all
claims and demands that Employee now has or hereafter may have hereunder against
Employer under this Agreement:
(i) Death; Disability. In the event that Employee's employment is
-------------------
terminated by reason of Employee's death or Disability, Employee or his estate,
as the case may be, shall be entitled to the following payments:
(1) Base Salary through the date Employee's employment is terminated.
(2) Any additional compensation, pro rated to the date of death of
Employee or the date of termination due to Employee's Disability; and Employer
shall pay to Employee or his estate, as the case may be, the amounts and shall
provide all benefits generally available under the employee benefit plans, and
the policies and practices of Employer, determined in accordance with the
applicable terms and provisions of such plans, policies and practices, in each
case, as accrued to the date of termination or otherwise payable as a
consequence of Employee's death or disability.
(ii) Termination by Employer for Cause. In the event Employee's
--------------------------------------
employment is terminated by Employer pursuant to Section 5.1 (c) hereof,
Employee shall be entitled to no further compensation or other benefits under
this Agreement except as to that portion of any unpaid Base Salary, Minimum
Bonus, and other benefits accrued and earned by him hereunder up, to and
including the effective date of such termination.
(iii) Nature of Payments. All amounts to be paid by Employer to
---------------------
Employee pursuant to this Section 5 shall be considered by the parties to be
severance payments. In the event such payments are treated as damages, it is
expressly acknowledged by the parties that damages to Employee for termination
of employment would be difficult to ascertain and the above amounts are
reasonable estimates 'thereof.
Section 6. Duties Upon Termination. Upon termination of Employee's
----------- --------------------------
employment with Employer pursuant to Sections 5.1 (a), 5.1 (b), 5.1 (d) and 5.1
(f) hereof, or upon expiration of the Employment Term, Employee will be released
from any duties and obligations hereunder; and, in the event of termination of
Employee's Pmn1nvmPnt pursuant to Sections 5.1(c) and 5.1(e) hereof, the
obligations of Employer to
7.1 Confidential Information Defined. "Confidential Information"
-----------------------------------
means any and all information (oral or written) relating to Employer or any
person controlling, controlled by, or under common
-4-
control with Employer or any of their respective activities, including, but not
limited to, information relating to: discoveries, innovations, software,
patents, patent applications, know how, secret processes, research, test
procedures and results, machinery, and equipment; manufacturing processes;
financial information; products; identify and description of materials and
services used; purchasing; costs; pricing; customers and prospects; advertising,
promotion and marketing; trademarks and trademark registrations; copyrights and
copyright registrations; and information pertaining to any governmental
investigation, except such information which can be shown by Employee to be
generally known in the industry or in the public domain (such information not
being deemed to be in the public domain merely because it is embraced by more
general information which is in the public domain).
7.2 Non-Disclosure of Confidential Information. Employee shall not,
-------------------------------------------
at any time (other than as may be required or appropriate in connection with the
performance by him of his duties hereunder) directly or indirectly, use,
communicate, disclose or disseminate any Confidential Information in any manner
whatsoever (except as may be required under legal process by subpoena or other
court order; provided, that Employee will take reasonable steps to give Employer
sufficient prior written notice in order to contest such requirement or order).
7.3 Certain Activities. Employee shall not while employed by
--------------------
Employer and for a period of two years thereafter, directly or indirectly, hire,
offer to hire, entice away or in any other manner persuade or attempt to
persuade any officer, employee, agent, lessor, lessee, licensor, licensee,
customer, prospective customer, supplier or shareholder or perspective
shareholder of Employer to discontinue or alter his, her or its relationship
with Employer.
7.4 Covenant Not to Compete. During the Employee's employment and
--------------------------
for a period of one year after the termination of Employee's employment,
Employee will not directly or indirectly engage in competition with Employer by
being associated with any competitor of Employer that sells or offers to sell
any products or services which compete with the products or services offered or
sold by Employer or being developed by Employer for sale at the time of
termination of Employee, or induce or attempt to induce, directly or indirectly,
any then potential customer contemplating doing business with Employer to not
commence doing business, or any current customer of Employer to cease doing
business, in whole or in part, with Employer or solicit business of any such
customer for any products or services of any competitor of Employer which
compete with the products or services offered or sold by Employer or being
developed by Employer for sale at the time of termination of Employee
7.5 Injunctive Relief. Employee acknowledges and agrees that: (a)
-------------------
Employer xxxx be irreparably injured in the event of a breach by Employee of any
of his obligations under this Section 7; (b) monetary damages will not be an
adequate remedy for any such breach; (c) Employer will be entitled to injunctive
relief, in addition to any other remedy which it may have, in the event of any
such breach, including, but not limited to, termination of Employee's employment
for Cause; and (d) the existence of any claims which Employee may have against
Employer, whether under this Agreement or otherwise, will not be a defense to
the enforcement by Employer of any of its rights under this Section 7.
7.6 Non-Exclusivity and Survival. The covenants and obligations of
------------------------------
Employee contained in this Section 7 are in addition to, and not in lieu of, any
covenants and obligations which Employee may have with respect to the subject
matter hereof, whether by contract, as a matter of law or otherwise, and such
covenants and obligations, and their enforceability, will survive any
termination of Employee's employment by either party and any investigation made
with respect to the breach thereof by Employer at any time.
Section B. Registration Rants.
---------------------------------
8.1 Company Registration.
(a) Notice of Registration. If at any time or from time to time the
-------------------------
Company shall determine to register any of its securities, either for its own
account or the account of a security holder or holders, other than a
registration relating solely to employee benefit plans or a registration
relating solely to a Commission Rule 145 transaction, the Company will:
-5-
(i) Promptly give to each Holder written notice thereof, and
(ii) include in such registration (and any related qualification under
blue sky laws or other compliance), and in any underwriting involved therein,
ail the Registrable Securities specified in a written request or requests, made
within 20 days after receipt of such written notice from the Company, by any
Holder.
(b) Underwriting. If the registration of which the Company gives
-------------
notice is for a registered public offering involving an underwriting, the
Company shall so advise the Holders as part of the written notice given pursuant
to Section 8.1 (a)(i). In such event the right of any Holder to registration
pursuant to this Section 3.6 shall be conditioned upon such Holder's
participation in such underwriting and the inclusion of such Holder's
Registrable Securities in the underwriting to the extent provided herein. All
Holders proposing to distribute their securities through such underwriting shall
(together with the Company and any other shareholders distributing their
securities through such underwriting) enter into an underwriting agreement in
customary form with the managing underwriter selected for such underwriting by
the Company. Notwithstanding any other provision of this Section 8.1, if the
Managing underwriter determines that marketing factors require a limitation of
the number of shares to be underwritten, the managing underwriter may limit the
Registrable Securities to be included in such registration. The Company shall so
advise all Holders' and the number of shares of Registrable Securities that may
be included in the registration and underwriting shall be allocated among all
Holders in proportion, as nearly as practicable, to the respective amounts of
Registrable Securities held by such Holders at the time of Filing the
registration Statement. To facilitate the allocation of shares in accordance
with the above provisions, the Company may round the number of shares allocated
to any Holder or other shareholder to the nearest 100 shares. If any Holder or
other shareholder disapproves of the terms of any such underwriting, he may
elect to withdraw therefrom by written notice to the Company and the managing
underwriter. Any securities excluded or withdrawn from such underwriting shall
be withdrawn from such registration, and shall not be transferred in a public
distribution prior to 90 days after the effective date of the registration
statement relating thereto, or such other shorter period of time as the
underwriters may require. The Company may include shares of Common Stock held by
shareholders other than Holders in a registration statement pursuant to this
Section 8.6, and to the extent that, the amount of Registrable Securities
otherwise includable in such registration statement would not thereby be
diminished.
(c) Right to Terminate Registration. The Company shall have the
-----------------------------------
right to terminate or withdraw any registration initiated by it under this
Section 8.1(c) prior to the effectiveness of such registration whether or not
any Holder has elected to include securities in such registration.
Section 9. Miscellaneous Provisions.
9.1 Severability. If in any jurisdiction any term or provision
-------------
hereof is determined to be invalid or ' unenforceable; (a) the remaining terms
and provisions hereof shall be unimpaired; (b) any such invalidity or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction, and (c) "he Invalid or
unenforceable term or provision shall, for purposes of such jurisdiction, be
deemed replaced by a term or provision that is valid and enforceable and that
comes closest to expressing the intention of the invalid or unenforceable term
or provision.
9.2 Execution in Counterparts. This Agreement may be executed in
----------------------------
one or more counterparts, and by the different parties hereto in separate
counterparts, each of which shall be deemed to be an original but all of which
taken together shall constitute one and the same agreement (and all signatures
need not appear on any one counterpart), and this Agreement shall become
effective when one or more counterparts has been signed by each of the parties
hereto and delivered to each of the other parties hereto.
9.3 Notices. All notices, requests, demands and other
--------
communications hereunder shall be in writing and shall be deemed duly given when
delivered by hand, or when delivered if mailed by registered or certified mail
or private courier service, postage prepaid, return receipt requested or via
far-simile (with written confirmation of receipt) as follows:
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If to Employer, to: NeTTaxi Online Communities, Inc.
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attn: Xxxxxx Xxxxxxxx, Xx., President
TeIefax, No.: 408.879.9907
Copy to: Xxxx Xxxx Xxxxx, Esq.
Xxxxx Xxxxxxxxx Xxx & Stone
0000 Xxxxxxx Xxxx Xxxx #0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Telefax No.: 310.286.1816
If to Employee, to: Mr. Xxxxxx A- Xxxxxxxx, Jr.
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Telefax No.: 408.879.9907
or to other such address(es) as a party hereto shall have designated by like
notice to the other parties hereto.
9.4 Amendment. No provision of this Agreement may be modified,
----------
amended, waived or discharged in any manner except by a written instrument
executed by Employer and Employee.
9.5 Entire Agreement This Agreement constitutes the entire
-----------------
agreement of the parties hereto with respect to the subject matter hereof, and
supersedes all prior agreements and understandings of the parties hereto, oral
or written, with respect to the subject matter hereof.
9.6 Applicable Law. This Agreement shall be governed by and
----------------
construed in accordance with the laws of the State of California applicable to
contracts made and to be wholly performed therein without regard to its
conflicts or choice of law provisions.
9.7 Heading. The headings contained herein are for the sole purpose
--------
of convenience of reference, and, shall not in any way limit or affect the
meaning or interpretation of any of the terms or provisions of this Agreement.
9.8 Binding Effect: Successors and Assigns. Employee may not
-------------------------------------------
delegate his duties or assign his rights hereunder. This Agreement will inure to
the benefit of, and be binding upon, the parties hereto and their respective
heirs, legal representatives, successors and permitted assigns.
9.9 Waiver. The failure of either of the parties hereto at any time
-------
to enforce any of the provisions of this Agreement shall not be deemed or
construed to be a waiver of any such provision, nor to in any way affect the
validity of this Agreement or any provision hereof, or the right of either of
the parties hereto to thereafter enforce each and every provision of this
Agreement. No waiver of any breach of any of the provisions of this Agreement
shall be effective unless set forth in a written instrument executed by the
party against whom or which enforcement of such waiver is sought, and no waiver
of any such breach shall be construed or deemed to be a waiver of any other or
subsequent breach.
9.10 Representations and Warranties. Employee and Employer hereby
---------------------------------
represent and warrant to the other that: (a) he or it has full power, authority
and capacity to execute and deliver this Agreement, and to perform his or 'its
obligations hereunder-, (b) such execution, delivery and performance will not,
and with the giving of notice or lapse of time or both would not, result in the
breach of any agreements or other obligations to which he or it is a party or he
or it is otherwise bound; and (c) this Agreement is his or its valid and binding
obligation in accordance with its terms. Employer represents that it will
purchase directors' and officers' liability insurance covering Employee in such
amounts as reasonably determined by the Board and consistent with the amounts
purchased for other Employee officers of the Company.
9.11 Enforcement. If any party institutes legal action to enforce
------------
or interpret the terms and conditions of this Agreement, the prevailing party
shall be awarded reasonable attorneys' fees at all trial
-7-
and appellate levels, and the expenses and costs incurred by such prevailing
party in connection therewith.
9.12 Arbitration. Except as provided in Section 7.5 hereof any
------------
dispute arising out of this Agreement, including but not limited to the
determination by the Board of a termination for Cause pursuant to Section 5
hereof or in respect of the branch hereof shall be resolved under the following
procedures. The burden of proof for demonstrating cause shall be on Employer.
The party claiming to be aggrieved shall furnish to the other party a written
statement of the grievance and the relief requested and proposed. If the other
party does not agree to furnish the relief requested or proposed, or otherwise
does not satisfy the demand of the party claiming to be aggrieved, the parties
shall submit the dispute to non-binding mediation before a mediator to be
jointly selected by the parties. Employer shall pay the cost of the meditation.
If the mediation does not produce a resolution of the dispute, the par-ties
agree that the dispute shall be resolved by final and blinding arbitration
before an arbitrator mutually selected by the parties or, if no agreement is
reached, then under the Expedited Labor Arbitration Rules of the American
Arbitration Association, except that the arbitrator shall be selected by
alternately striking names from a panel of five (5) neutral labor or employment
arbitrators designated by the American Arbitration Association, The arbitrator
shall have the authority to grant any relief authorized by law. The arbitrator
shall not have the authority to modify, change or refuse to enforce the terms of
this Agreement. In addition, the arbitrator shall not have the authority to
require Employer to change any lawful policy or benefit plan. The hearing shall
be transcribed. Employer shall bear the costs of arbitration if Employee
prevails. If Employer prevails, Employee will pay half the cost of arbitration
or ' $500, whichever is less. Each party shall beer his or its own legal fees.
Arbitration shall bear the exclusive final remedy for any dispute between the
parties; provided, however, that nothing in this Section 5.12 shall limit the
right of Employer to go to court to obtain injunctive relief for violation of
Section 7 hereof. The parties further agree that no dispute shall be submitted
to arbitration where the party claiming to be aggrieved has not provided the,
other party with a written statement of the grievance and first sought
mediation.
9.13 Continuing Effect. Where the context of this Agreement
-------------------
requires, the respective rights and obligations of the parties shall survive any
termination or expiration of the term of this Agreement.
9.14 Expenses. Each part/ to this Agreement agrees to bear his or
---------
its own expenses in connection with the negotiation and execution of this
Agreement.
IN WITNESS WHEREOF, this Agreement has been executed and delivered by the
parties hereto as of the date first above written.
NETTAXI ONLINE COMMUNITIES, INC.
By /S/ XXXXXX X. XXXXXXXX, Xx.
-----------------------------------
Name XXXXXX X. XXXXXXXX, Xx.
-----------------------------------
Title CEO
-----------------------------------
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