EMPLOYMENT AGREEMENT (the "Agreement"), effective as of January 3, 2000
(the "Effective Date"), between eB2B Commerce, Inc., a Delaware corporation with
principal offices at 00 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, (the
"Company") and Xxxxxx Xxxxxxx residing at 000 Xxxx Xxxx, Xxxxxxxxx Xxxxxx, Xxx
Xxxx, ("Cisario"). The Company and Cisario 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; and
WHEREAS, the Company desires to obtain the services of Cisario as Chief
Financial Officer, Treasurer and Secretary, and Cisario is willing to render
such services to the Company upon the terms and conditions herein set forth.
NOW, THEREFORE, in consideration of the mutual covenants herein set
forth, the Parties do hereby agree as follows:
1 Employment. The Company hereby employs Cisario and Cisario accepts this
employment and agrees to render services to the Company on the terms and
conditions set forth in this Agreement. Cisario shall serve in the capacity of
Chief Financial Officer, Treasurer and Secretary, perform services for the
Company normally associated with such positions, 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, Cisario will devote his best
efforts, including his full-time attention, during reasonable business hours, to
the affairs and business of the Company. Cisario 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, 2002, (the "Initial Employment
Term"). The Agreement shall thereafter automatically renew for successive one
(1) year terms, until terminated by either Party in accordance with this
Agreement (the "Succeeding Employment Term"), unless either Party provides
written notice of termination to the other party at least ninety (90) days prior
to the expiration of the Initial Employment Term or any Succeeding Employment
Term.
3 Compensation.
3.1 Base Salary The Company will compensate and pay Cisario for his
services during the term of this Agreement at a base salary of one hundred fifty
thousand ($150,000) dollars 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 Cisario in accordance with the Company's standard payroll policy for
similarly situated employees of the Company.
3.2 Bonus. Cisario 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, Cisario 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, the Company will pay Cisario a bonus of no less than
fifty thousand ($50,000) dollars, payable by March 15th of the following year.
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3.3 Stock Options. Cisario shall be entitled to receive one hundred
thousand (100,000) options to acquire shares of the Common Stock of the Company
pursuant to the terms of the Company's existing Stock Option Plan ("Options"),
subject to the following terms:
3.3.1 The Options will vest as follows: (i) thirty-three and
one-third (33 1/3%) percent will vest immediately upon the Effective Date, and
(ii) sixty-six and two-thirds (66 2/3%) percent will vest ratably at the end of
each quarter that Cisario is employed by the Company over a two (2) year period,
commencing upon the Effective Date.
3.3.2 The exercise price for the Options shall be at five dollars
and fifty ($5.50) cents per share, as appropriately adjusted for stock splits,
stock dividends, and the like.
3.3.3 The vested Options shall be exercisable until the earlier of
ten (10) years after vesting or within ninety (90) days after termination of
Cisario`s employment with the Company, except as otherwise set forth elsewhere
in this Agreement.
3.3.4 Issuance of the Options shall be in accordance with all
applicable securities laws and the other terms and conditions of the Company's
Stock Option Plan and the Stock Option Agreement form.
3.4 Deferred Compensation.
3.4.1 Amount. Deferred Compensation shall be the amount which is
calculated as an amount equal to the greater of (i) one hundred fifty (150%)
percent of the annual compensation earned by Cisario in the prior year
(including both Base Salary and Bonus Compensation), or (ii) the base salary
and minimum bonus payment in effect at such time. In addition to the Deferred
Compensation, Cisario shall be entitled to all of the benefits and personal
perquisites otherwise provided in this Agreement during the one (1) year
period 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 Cisario subsequent to the
date of termination.
3.4.2 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
Cisario, the initial Deferred Compensation payments shall be made within fifteen
(15) days after the personal representative of Cisario's estate notifies the
Company that Letters Testamentary have been issued to the estate appointing an
authorized representative of the estate.
3.4.3 Withholding. All compensation paid to Cisario 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 reimburse Cisario for
any Consolidated Omnibus Budget Reconciliation Act of 1985 ("COBRA") payments,
as and when due. Upon Cisario losing coverage under COBRA, the Company shall
provide Cisario with health insurance coverage during the remaining term of this
Agreement, similar to such coverage provided to other employees. In addition,
the Company shall provide Cisario with 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.
Cisario shall be entitled to four (4) weeks paid vacation during each year of
this
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Agreement.
4.2 Car Allowance. The Company will pay to Cisario a car allowance of
seven hundred ($700) dollars per month.
4.3 Life Insurance. The Company shall have the right, at its own
expense and for its own benefit, to purchase insurance on Cisario's life for the
benefit of the Company, and Cisario shall cooperate by providing necessary
information, submitting to required medical examinations, and otherwise
complying with the insurance carrier's requirements.
4.4 Country Club. The Company shall reimburse Cisario for any initial
membership fees and dues and expenses, incurred by Cisario during the term of
this Agreement, for a family membership in a country club, chosen by Cisario and
approved by the Company.
5 Expenses. The Company shall reimburse Cisario or otherwise provide for or pay
for all reasonable expenses incurred by Cisario 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 Cisario in accordance with
the Company's travel policy, as established by the Board; and (ii) all
reasonable expenses in connection with Cisario's attendance at trade and
professional conferences, which are in furtherance of the business of the
Company. Cisario 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 Cisario. The Parties agree that Cisario 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, Cisario 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
Cisario the Deferred Compensation.
6.2 Termination by the Company for Convenience. The Parties agree that
the Board has the right to terminate Cisario's employment for convenience during
the term of this Agreement upon notice to Cisario. In such event, the Company
will pay Cisario the Deferred Compensation. The date of termination will be the
date specified in a notice from the Board, and Cisario will cease to have any
power of his office as of such date. A termination of this Agreement by the
Company in accordance with Section 2 shall be deemed a termination by the
Company for Convenience.
6.3 Termination by the Company for Cause. The Parties agree that the
Board has the right to terminate Cisario's 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 Cisario's part willfully intended to or likely to
injure the Company's business or reputation;
6.3.2 Actions by Cisario intentionally furnishing materially false,
misleading, or omissive information to the Board;
6.3.3 Cisario is convicted of any felony or other serious offense;
6.3.4 Abusive use of drugs or alcohol by Cisario;
6.3.5 Any fraud, embezzlement or misappropriation by Cisario of the
"assets"
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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 Cisario to perform
duties and obligations as set forth in this Agreement, resulting in substantial
damage to the Company, as hereinafter defined in Section 6.7 hereof, but not
encompassing illness, physical or mental incapacity.
In the event that Cisario's employment is terminated by the Company for
Cause, the date of employment termination will be as specified in a Notice of
Termination (as defined in Section 6.7 hereof) sent to Cisario by the Company,
and Cisario will cease to have any authority to act on behalf of the Company as
of such date. The Company will pay Cisario the Base Salary and any Bonus
Compensation due him as of such date, and all benefits provided by the Company
to Cisario will cease as of such date except as otherwise required by law. In
such event, the Company will not be required to pay Cisario the Deferred
Compensation. In the event that Cisario's employment is terminated by the
Company for Cause, and a court or other tribunal determines that the termination
was for reasons other than for Cause, Cisario will be entitled to receive twice
the Deferred Compensation that would normally have been due him for a
termination by the Company pursuant to Section 6.2 hereof. Additionally, Cisario
shall be reimbursed for all legal and other expenses incurred by him related to
said termination.
6.4 Termination by the Company for Death or Disability. The Parties
agree that Cisario's employment will terminate upon Cisario's death or
Disability. The term "Disability" shall be defined as Cisario's 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
Cisario's employment is terminated due to Cisario's death or Disability, the
Company will pay Cisario the Deferred Compensation.
6.5 Good Reason. Cisario may terminate his employment for Good Reason
("Good Reason") upon sixty (60) days' notice to the Company if (i) Cisario's
duties are materially diminished or altered so as to be inconsistent with
Cisario's position, authority or responsibilities as the Chief Financial Officer
of the Company; (ii) any change of Cisario's title as Chief Financial Officer;
(iii) any substantial adverse change in Cisario's position, authority or
responsibilities as the Chief Financial Officer; (iv) the material failure by
the Company to comply with the terms of this Agreement; (v) the Company requires
Cisario to be based or perform services at any location more than fifty (50)
miles from New York, NY (except normal travel requirements associated with
Cisario's position and title); (vi) Xxxxx Xxxxxxxx does not hold the position of
Chief Executive Officer of the Company; or (vii) Cisario's Base Salary is
materially diminished. In the event Cisario's employment relationship with the
Company is terminated for "Good Reason," the Company will pay Cisario the
Deferred Compensation. In the event that Cisario shall in good faith give a
Notice of Termination for Good Reason and it shall thereafter be determined that
Good Reason did not exist, the employment of Cisario shall, unless the Company
and Cisario shall otherwise mutually agree, be deemed to have terminated, at the
date of the giving of such purported Notice of Termination. In such event,
Cisario 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,
Cisario 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
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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 Cisario), 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 Cisario's
employment relationship with the Company is terminated for a Change of Control,
the Company will pay Cisario the Deferred Compensation.
6.7 Notice of Termination. Any termination by the Company for Cause, or
by Cisario 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 Cisario's 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.
6.8 Obligations of the Company Upon certain Terminations
6.8.1 Options. In the event that Cisario's employment with the
Company is terminated pursuant to Sections 6.2, 6.4, 6.5 or 6.6 of this
Agreement, all options granted to Cisario 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, this Section shall control.
6.9 Survival of Agreement Upon Termination. In the event that Cisario's
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.
7 Confidential Information. Cisario 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 Cisario's employment or engagement with the
Company, excepting information obtained by Cisario 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
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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, xxxxxxxx, and payment of xxxxxxxx;
(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
Cisario during Cisario's 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 Cisario's Obligations as to Confidential Information and Materials. During
Cisario's employment by the Company, Cisario will have access to Confidential
Information and will occupy a position of trust and confidence with respect to
the Company's affairs and business. Cisario 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
Cisario's employment with the Company, Cisario 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 Cisario's duties with
the Company.
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9.2 Prevent Disclosure. Cisario will take all reasonable precautions to
prevent disclosure of the Confidential Information in accordance with the
Company's reasonable instructions to Cisario.
9.3 Return all Materials. Upon termination of Cisario's employment with
the Company, for any reason whatsoever, Cisario 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. Cisario 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 Cisario, whether alone or
with others, in the course of Cisario's employment by the Company, or (ii)
conceived or made by Cisario, whether alone or with others, in the course of
Cisario's employment, but which reach fruition within the period from the date
of termination of Cisario's 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. Cisario 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. Cisario 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 Cisario.
11 Post-Employment Procedures. Cisario 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, Cisario 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. Cisario 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,
Cisario 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 Cisario. Cisario 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,
Cisario may have to preserve the confidentiality of another's proprietary
information or materials, or (ii) exercising any rights Cisario may claim to any
patent or copyright trade secrets, or other
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discoveries, inventions, ideas, know-how, techniques methods, processes or other
proprietary information or materials before performing that work, Cisario shall
inform the Company in writing of any apparent conflict between Cisario's 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
Cisario agrees thereafter to make no such claim against the Company. The Company
shall hold such disclosures by Cisario in strict confidence.
14 Restrictive Covenants.
14.1 Cisario 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 Cisario 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, Cisario 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 Cisario's employment pursuant to either Section 6.1 or 6.3
hereof through the second (2nd) anniversary of such date, Cisario 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, Cisario is a passive investor in any publicly
held entity and Cisario owns three (3%) percent or less of the equity interests
therein.
14.3 Restrictive Covenants Necessary and Reasonable. Cisario 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.
15 Injunctive Relief. Cisario, recognizing that irreparable injury shall result
to the Company in the event of Cisario's 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 Cisario, 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 Cisario, his executors, administrators or assigns, against any and
all judgments,
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penalties (including excise and similar taxes), fines, settlements and
reasonable expenses (including attorneys' fees) actually incurred by Cisario
(net of any related insurance proceeds or other amounts received by Cisario or
paid by or on behalf of the Company on Cisario's 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 Cisario was, is or is threatened to be made
a named defendant or respondent (a "Proceeding"), because Cisario is or was an
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 Cisario by the Board in accordance with the applicable
provisions of the Delaware General Corporation Law (the "DGCL"),Cisario 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 Cisario 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 Cisario 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 Cisario has not
met the applicable standard of conduct for indemnification shall not be a
defense to the action or create a presumption that Cisario 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 Cisario under this
Agreement except as expressly provided herein, and the execution and delivery of
this Agreement by the Company and Cisario shall not in any way diminish,
restrict, limit or affect Cisario's 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
Cisario shall continue to serve as an officer of the Company (or shall continue
at the request of the Company to serve as an Affiliate Executive) and,
thereafter, as long as Cisario shall be subject to any possible Proceeding by
reason of the fact that Cisario was or is an 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
Cisario 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 Cisario's acts as an officer of the
Company or as an Affiliate Executive. The Company may promptly notify Cisario 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 16.2, the Company shall, to the full extent permitted by law, in
addition to and not in limitation of the other rights granted Cisario under this
Agreement, hold harmless and indemnify Cisario to the full extent of coverage
which would otherwise have been provided for the benefit of Cisario pursuant to
the Insurance Policies.
16.3 Cisario 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 Cisario in connection with such Proceeding or otherwise
expended or incurred by Cisario (such amounts so expended or
9
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, Cisario 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 xxxx, agreement
or other documentation relating thereto, a copy of which shall be appended to
the schedule as an exhibit. Where Cisario is requesting Advanced Amounts,
Cisario must also provide (i) written affirmation of such Cisario's 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 Cisario 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 Cisario for an accounting of
profits made from the purchase or sale by Cisario 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 Cisario is an officer of the Company (or is
serving at the request of the Company as an Affiliate Executive) and shall
continue thereafter so long as Cisario shall be subject to any possible
Proceeding by reason of the fact that Cisario was a director or officer of the
Company or was serving as such an Affiliate Executive.
16.6 Promptly after receipt by Cisario of notice of the commencement of
any Proceeding, Cisario 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 Cisario. 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 Cisario, 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 Cisario without Cisario's prior written consent.
17 Dispute Resolution. The Company and Cisario 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.
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
10
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 Cisario
at the address as first set forth above. The Company or Cisario 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 Cisario 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 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.
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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: /s/ Xxxxx X. Xxxxxxxx By: /s/ Xxxxxx Xxxxxxx
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Xxxxx X. Xxxxxxxx Xxxxxx Xxxxxxx
Chief Executive Officer
Date: Date:
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