EXHIBIT 10.5
XXXXXXXX.XXX, INC.
0000 X. XXXXXXXX XXXXX
XXXXX 000
XXXX XXXXX, XXXXXXX 00000
August 15, 2001
Xx. Xxxxxx Xxxxxx
000 Xxxxxxxxx Xxxxxx #000
Xxx Xxxx, XX 00000
Re: Employment of Xxxxxx Xxxxxx by xXxxxxxx.xxx, Inc.
Dear Xx. Xxxxxx:
The following sets forth our mutual understanding respecting your
employment by xXxxxxxx.xxx, Inc. (the "Company"), and, when this letter is
signed by you, it shall constitute an employment agreement between you and the
Company. For purposes of this letter agreement, you are hereinafter sometimes
referred to in the third person as the "Employee". The terms of your employment
are as follows:
1. Employment. The Employee shall devote substantially all his
business time, energy and skill to the service of the Company, which services
shall consist of: (a) managing the day-to-day business operations of Critical
Infrastructure Fund, L.P., Critical Infrastructure Fund, Ltd. and Critical
Infrastructure Fund (BVI), LP (collectively, the "Funds"); (b) reviewing and
supervising the investments of the Funds; (c) marketing and coordinating the
marketing of the Funds to prospective investors; (d) marketing the Funds to
companies as a source of private capital; and (e) managing the day-to-day
business operations of Critical Investments, LLC and Critical Advisors, L.L.C.
During the period of the Employee's employment hereunder, the Employee shall not
engage in any other business activity whether or not such activity is pursued
for gain, profit, or other pecuniary advantage including, without limitation,
management or management consulting activities; provided, however, the Employee
may invest his personal assets in businesses, including charitable causes, that
do not directly or indirectly compete with the businesses in which the Company
is engaged during the period that the Employee is employed hereunder.
2. Term. Unless sooner terminated pursuant to the provisions of
this letter agreement, the term of employment of the Employee shall begin on
August 15, 2001 and shall terminate on December 31, 2002, unless extended by
mutual written agreement of the Company and the Employee.
3. Compensation. In consideration of the Employee's services
hereunder, the Company shall provide to the Employee the following compensation:
(a) During the period from the date of this letter until
December 31, 2001, the Company shall pay to the Employee an annual salary of One
Hundred Thousand Dollars ($100,000) (the Salary"). The Salary shall be payable
bi-weekly in accordance with the current normal payroll policies of the Company,
which policiEs may be changed by the Company from time to time in its sole
discretion but in no event less than monthly, and shall be subject to all
applicable withholding taxes and deductions.
(b) The Company shall issue the Employee a warrant to
purchase 100,000 shares of common stock, par value $.001 per share, of the
Company, in accordance with the terms of the Stock Purchase Warrant attached
hereto as Exhibit "A" and incorporated herein.
(c) The Employee shall be entitled to paid vacation in
accordance with the vacation policy of the Company in effect for senior
executives of the Company from time to time, and in no event less than two weeks
per calendar year. Vacation shall be taken by the Employee at such times as
approved in writing (including electronic mail) by the Chief Executive Officer
or Chief Operating Officer of the Company, which approval shall not be
unreasonably withheld. Except as otherwise required by law or as otherwise
provided under the Company's policies regarding vacations for employees in the
jurisdiction in which the Employee works, the Company shall not pay the Employee
any additional compensation for any vacation time which is not used prior to the
end of the calendar year or any earlier termination of employment. The Employee
shall be entitled to all other employee benefits which are generally made
available by the Company to all of its employees.
(d) The Company shall from time to time, no less
frequently than by December 31st of each year that the Employee is employed
hereunder, review the Employee's compensation and may, in its sole and absolute
discretion, increase or decrease the Salary.
4. Business Expenses and Reimbursements. The Employee shall be
entitled to reimbursement by the Company for ordinary and necessary business
expenses incurred by the Employee in the performance of his duties for the
Company, which types of expenditures shall be determined and approved by the
Company in accordance with its standard practice and further provided that: (a)
each such expenditure, including meals and entertainment expenses, is of a
nature qualifying it as a proper full or partial deduction on the federal and
state income tax returns of the Company as a business expense; and (b) the
Employee furnishes the Company with adequate records and other documentary
evidence required by federal and state statutes and regulations for the
substantiation of such expenditures as deductible business expenses of the
Company.
5. Restrictive Covenants. The Employee acknowledges and agrees
that the agreements and covenants contained in this Section 5 are essential to
protect the business interests of the Company and that the Company will not
enter into this employment agreement but for such agreements and covenants.
Accordingly, the Employee covenants and agrees to the following:
(a) The Employee recognizes that the services to be
performed by him hereunder are special, unique and extraordinary and that, by
reason of his working relationship
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with the Company, he may acquire confidential information concerning the
operation of the Company, the use or disclosure of which would cause the Company
substantial loss and damages which could not be readily calculated and for which
no remedy at law would be adequate. Accordingly, the Employee shall not, for any
reason or at any time, during or after his employment by the Company hereunder,
use, for himself or for the benefit of any other person, firm, corporation or
entity or disclose to any person (except to the extent that the proper
performance of his duties may reasonably require such use or disclosure) any
proprietary or confidential information of the Company obtained by him in the
course of, or as a result of, his employment by the Company. Any information
relating to the Company or any of its affiliates not generally available to the
public or known to the Employee prior to the commencement of his employment
hereunder shall be construed as proprietary or confidential for purposes of this
employment agreement, including, but not limited, customer lists, supplier
lists, employee lists, marketing data or plans, business plans, and any
financial data of any kind. The Employee confirms that all of the aforementioned
confidential information is the exclusive property of the Company. All business
records, papers and documents kept or made by the Employee during his employment
by the Company hereunder relating to the business of the Company shall be and
remain the property of the Company at all times. Upon the request of the Company
at any time, the Employee shall promptly deliver to the Company, and shall
retain no copies of, any written materials, records and documents made by the
Employee or coming into his possession during his employment by the Company
concerning the business or affairs of the Company other than (i) such materials
as may be necessary for him to fulfill his obligations hereunder and (ii)
personal materials, records and documents (including notes and correspondence)
of the Employee not containing proprietary information relating to such business
or affairs.
(b) Subsequent to the employment of the Employee
hereunder, the Employee shall not, for a period of twelve (12) months from the
expiration date of this employment agreement or the date of the termination of
this employment agreement, employ or solicit for employment or endeavor in any
way to entice away from employment with the Company or its affiliates any
non-clerical employee of the Company or its affiliates.
(c) Except as may be required by law, the Employee shall
not intentionally make any oral or written communication to any person,
corporation, partnership, government, investor, lender, or any other entity
which disparages, denigrates or negatively affects the reputation of the
Company, its affiliates, officers, directors, members, employees or agents.
Additionally, except as may be required by law, the Employee shall not make any
such communications even if such communications are true or are based upon facts
learned by the Employee during or after his employment by the Company.
6. Termination. The Company may terminate this employment
agreement for "cause" upon prior written notice to the Employee. If this
employment agreement is terminated for "cause", the Company shall pay the
Employee all Salary due to the Employee, if any, as accrued through the last day
of the employment relationship prior to termination, subject to the Company's
rights under Section 7 hereof. If this employment agreement is terminated
pursuant to this Section 6, the Employee shall be entitled to the vested
warrants granted to the Employee by the Company, which warrants shall be
exercisable until thirty (30) days from the date of termination. However, all
unvested warrants granted to the Employee by the Company shall
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terminate on the date of termination of this employment agreement. For purposes
of this employment agreement, the Company shall have "cause" to terminate this
agreement if (a) the Employee has breached the material terms of, or failed to
perform in any material respect the duties under, this employment agreement and
has failed to cure such breach or failure to perform within thirty (30) days
following written notice to the Employee of such breach or failure to perform,
(b) the Employee is in breach in any material respect of any of the
representations and warranties set forth in Section 21 hereof, (c) the Employee
has committed any material act of dishonesty against the Company, or (d) the
Employee is convicted of a felony of any kind.
7. Company Right to Offset. Any payments to be made to the
Employee by the Company upon termination of this employment agreement in
accordance with the terms contained herein shall be offset by liquidated amounts
of cash owed by the Employee to the Company and the value of any tangible or
intangible property of the Company in the possession or control of the Employee
on the date of termination, which is not paid or returned to the Company
promptly after the date of termination. The value of all property not so
returned to the Company shall be mutually agreed to by the Company and the
Employee in order for the Company to offset the cash value of such property from
any cash amounts owed to the Employee by the Company hereunder.
8. Surrender of Records. Upon the termination of the Employee's
employment hereunder, for any reason whatsoever, or at any time upon the
Company's request, the Employee shall deliver to the Company all files, customer
lists, price lists, bids, specifications, forms, software, financial data,
papers and other documents, including, but not limited to, all copies of the
foregoing (including those contained in magnetic media or other forms of
computer storage); all computers, modems, diskettes, samples, credit cards,
keys, security passes, tools, vehicles and equipment; and all other materials
and other property in his possession or control that relate to his employment
with the Company, all of which at all times shall be the property of the Company
unless otherwise agreed to in writing by the Company.
9. Entire Agreement. This employment agreement and the attached
Warrant represent the entire understanding and agreement between the parties
with respect to the subject matter hereof, and supersede all other negotiations,
understandings and representations (if any) made by and between such parties.
10. Amendments. The provisions of this employment agreement may
not be amended, supplemented, waived or changed orally, but only by a writing
signed by the party as to whom enforcement of any such amendment, supplement,
waiver or modification is sought and making specific reference to this
employment agreement.
11. Assignments. The Employee shall not assign his rights and/or
obligations hereunder.
12. Binding Effect. All of the terms and provisions of this
employment agreement, whether so expressed or not, shall be binding upon, inure
to the benefit of, and be enforceable by the parties and their respective
administrators, executors, legal representatives, heirs, successors and
permitted assigns.
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13. Severability. If any part of this employment agreement or the
Warrant entered into pursuant hereto is contrary to, prohibited by or deemed
invalid under applicable law or regulation, such provision shall be inapplicable
and deemed omitted to the extent so contrary, prohibited or invalid, but the
remainder hereof shall not be invalidated thereby and shall be given full force
and effect so far as possible.
14. Survival. Notwithstanding anything to the contrary herein, the
provisions of Sections 5 through 26 (inclusive) hereof shall survive and remain
in effect in accordance with their respective terms in the event the employment
of Employee is terminated.
15. Waivers. Each party to this employment agreement may (a)
extend the time for the performance of any of the obligations or other acts of
the other party, (b) waive any inaccuracies in the representations and
warranties of the other party contained herein or (c) waive compliance with any
of the agreements of the other party contained herein. Any such extension or
waiver shall be valid only if set forth in an instrument in writing signed by
the party to be bound thereby. Any waiver of any term or condition shall not be
construed as a waiver of any subsequent breach or a subsequent waiver of the
same term or condition, or a waiver of any other term or condition, of this
employment agreement. The failure of any party to assert any of its rights
hereunder shall not constitute a waiver of any of such rights.
16. Notices. All notices, requests, consents and other
communications required or permitted under this employment agreement shall be in
writing (including telex, telegraphic communication, and electronic
communication) and shall be (as elected by the person giving such notice) hand
delivered by messenger or courier service, electronically transmitted,
telecommunicated, or delivered by a recognized national overnight delivery
service (such as Federal Express) (postage prepaid), addressed to:
If to Employee: With a Copy to:
-------------- ---------------
Xxxxxx Xxxxxx Xxxxxx X. Xxxxxxx, Ph.D.
000 Xxxxxxxxx Xxxxxx #000 Xxxxxxx & Associates, Inc.
Xxx Xxxx, XX 00000 Xxx 00000
Xxxxxxxxxx, XX 00000-0000
If to the Company: With a Copy to:
----------------- --------------
xXxxxxxx.xxx, Inc. Xxxxxxx & Xxxxxx LLP
0000 X. Xxxxxxxx Xxxxx 000 Xxxxxxxxx Xxxxx
Xxxxx 000 Xxxxx 000
Xxxx Xxxxx, XX 00000 Ft. Xxxxxxxxxx, XX 00000
Attn: Chairman of the Board Attn: Xxxxxx X. Xxxxxxx, P.A.
or to such other address as any party may designate by notice complying with the
terms of this Section. Each such notice shall be deemed delivered (a) on the
date delivered if by personal
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delivery, (b) on the date telecommunicated if by telecopy, (c) on the date of
transmission with confirmed answer back if by telex or electronically
transmitted, and (d) on the date upon which the delivery receipt is signed or
delivery is refused, as the case may be, if sent by overnight delivery service.
19. Jurisdiction and Venue. The parties acknowledge that a
substantial portion of negotiations, anticipated performance and execution of
this employment agreement occurred or shall occur in Palm Beach County, Florida,
and that, therefore, without limiting the jurisdiction or venue of any other
federal or state courts, each of the parties irrevocably and unconditionally (a)
agrees that any suit, action or legal proceeding arising out of or relating to
this employment agreement may be brought in the courts of record of the State of
Florida in Palm Beach County or the court of the United States, Southern
District of Florida; (b) consents to the jurisdiction of each such court in any
such suit, action or proceeding; (c) waives any objection which it may have to
the laying of venue of any such suit, action or proceeding in any of such
courts; and (d) agrees that service of any court paper may be effected on such
party by mail, as provided in this employment agreement, or in such other manner
as may be provided under applicable laws or court rules in said state.
20. Remedies Cumulative. No remedy herein conferred upon any party
is intended to be exclusive of any other remedy, and each and every such remedy
shall be cumulative and shall be in addition to every other remedy given
hereunder or now or hereafter existing at law or in equity or by statute or
otherwise. No single or partial exercise by any party of any right, power or
remedy hereunder shall preclude any other or further exercise thereof.
21. Representations and Warranties. Each party represents and
warrants to the other party that such party is fully empowered to enter and
perform its or his respective obligations under this employment agreement and,
without limitation, that such party is under no restrictive covenants to any
person or entity that will be violated by entering into and performing this
employment agreement, and that this employment agreement constitutes the valid
and legally binding obligation of each party enforceable in accordance with its
terms, except as such enforcement may be subject to (a) bankruptcy or other laws
now or hereafter in effect relating to creditors' rights generally and (b)
general principles of equity (regardless of whether such enforcement is
considered in a proceeding in equity or at law). The execution and delivery of
this employment agreement by each party has been duly authorized by all
necessary action.
23. Independent Advice from Counsel. Each of the parties has
received independent legal advice from legal counsel of his or its choice with
respect to this employment agreement and its terms. The Employee shall be
responsible to pay all fees and expenses of his legal counsel relating to this
employment agreement. The terms of this employment agreement are the result of
mutual negotiations between the parties, and the provisions of this employment
agreement shall be interpreted and construed in accordance with their fair
meanings, and not strictly for or against either party, regardless of which
party may have drafted this employment agreement or any specific provision.
24. Counterparts. This employment agreement may be executed in
counterparts, and by the different parties hereto in separate counterparts, each
of which when executed shall be
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deemed to be an original but all of which taken together shall constitute one
and the same agreement.
25. Headings. The descriptive headings contained in this
employment agreement are for convenience of reference only and shall not affect
in any way the meaning or interpretation of this employment agreement.
26. Governing Law. This employment agreement and all transactions
contemplated by this employment agreement shall be governed by, and construed
and enforced in accordance with, the internal laws of the State of New York
without regard to principles of conflicts of laws.
If the foregoing understanding respecting your employment is acceptable
to you, please indicate your approval thereof by signing a copy of this letter
in the space provided below and returning it to the undersigned. Thereupon, this
employment agreement shall be in full force and effect in accordance with the
terms set forth herein.
Sincerely,
XXXXXXXX.XXX, INC.
By: /s/ Xxxxxxx Xxxxxxx
--------------------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Chief Executive Officer and President
The terms and provisions of this employment agreement are hereby approved and
accepted as of the date first above written.
/s/ Xxxxxx Xxxxxx
-----------------------------------------------
Xxxxxx Xxxxxx
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