1
EXHIBIT 10.7
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into as
of November 12, 1999, between Digital LAVA, Inc., a Delaware corporation (with
its successors and assigns, referred to as the "Corporation"), and Xxxxxx X.X.
Xxxxxxxx (referred to as "Xx. Xxxxxxxx").
PRELIMINARY STATEMENT
Previously the Corporation and Xx. Xxxxxxxx entered into an Employment
Agreement effective September 1, 1998 (the "1998 Agreement"). On November 12,
1999, the Corporation and Xx. Xxxxxxxx entered into a loan agreement and Xx.
Xxxxxxxx executed a Promissory Note (the "Note"), in consideration for, among
other things, the termination of the 1998 Agreement and its replacement with
this Agreement effective as of November 12, 1999.
The Corporation desires to continue to employ Xx. Xxxxxxxx, and Xx.
Xxxxxxxx wishes to continue to be employed by the Corporation, upon the terms
and subject to the conditions set forth in this Agreement. The Corporation and
Xx. Xxxxxxxx also wish to enter into the other agreements set forth in this
Agreement, all of which are related to Xx. Xxxxxxxx'x employment under this
Agreement.
AGREEMENT
Xx. Xxxxxxxx and the Corporation therefore agree as follows:
1. EMPLOYMENT FOR TERM. The Corporation hereby employs Xx. Xxxxxxxx and
Xx. Xxxxxxxx hereby accepts employment with the Corporation for the period
beginning on November 12, 1999 (the "Commencement Date"), and ending on the
December 31, 2001 (the "Initial Term"), unless otherwise sooner terminated as
herein provided. The Initial Term shall automatically be renewed for additional
one-year periods (the "Renewal Terms;" together with the Initial Term, referred
to as the "Term") unless either party notifies the other in writing of its
intention not to renew this Agreement no less than 180 days prior to the
expiration of the Initial Term or a Renewal Term. The termination of Xx.
Xxxxxxxx'x employment under this Agreement shall end the Term but shall not
terminate Xx. Xxxxxxxx'x or the Corporation's other agreements, except as
otherwise provided herein.
2. POSITION AND DUTIES. During the Term, Xx. Xxxxxxxx shall serve as
President and Chief Technology Officer of the Corporation. During the Term the
Xx. Xxxxxxxx shall report directly to, and receive direction from, the Chief
Executive Officer of the Corporation. During the Term, Xx. Xxxxxxxx shall also
hold such additional positions and titles as the Chief Executive Officer of the
Corporation may determine from time to time. During the Term, Xx. Xxxxxxxx shall
devote his full business time and efforts to his duties as an employee of the
Corporation.
3. COMPENSATION.
(a) BASE SALARY. The Corporation shall pay Xx. Xxxxxxxx a base salary
at the rate currently in effect until December 31, 1999. Thereafter, beginning
on January 1, 2000 and ending on December 31, 2000, the Corporation shall pay
Xx. Xxxxxxxx a base salary at the rate
2
of $253,000 per annum. Thereafter, beginning on January 1, 2001 and ending on
the last day of the Term, the Corporation shall pay Xx. Xxxxxxxx a base salary
at the rate of $263,000 per annum (the "Base Salary"), payable at least monthly
on the Corporation's regular pay cycle for professional employees.
(b) STOCK OPTIONS. Pursuant to the terms of the Incentive Stock
Option Agreement, attached hereto as Exhibit A, the Corporation shall grant to
Xx. Xxxxxxxx on November 12, 1999 an option under the Corporation's 1996 Stock
Option Plan to purchase 50,000 shares of the Corporation's Common Stock.
(c) OTHER AND ADDITIONAL COMPENSATION. The preceding sections
establish the minimum compensation during the Term and shall not preclude the
CEO from awarding Xx. Xxxxxxxx a higher salary, in light of performance of Xx.
Xxxxxxxx and the Corporation (and such other factors the CEO deems appropriate),
as are consistent with the Corporation's compensation practices for its senior
executives.
(d) ANNUAL BONUS. During the Term and beginning on January 1, 2000,
the Corporation shall pay Xx. Xxxxxxxx an annual bonus if the Corporation's
stated revenue goals for the applicable fiscal year are achieved as evaluated
and determined in the sole discretion of the Chief Executive Officer, and if Xx.
Xxxxxxxx is employed by the Corporation for the entire fiscal year in question.
The amount of the bonus shall be determined in the following manner: (i) Xx.
Xxxxxxxx shall be entitled to a bonus of $75,000 (which represents the maximum
bonus achievable by Xx. Xxxxxxxx) if 100% of the Corporation's revenue goals are
achieved for the applicable fiscal year; (ii) Xx. Xxxxxxxx shall not be entitled
to a bonus if less than 75% of the Corporation's revenue goals are achieved for
the applicable fiscal year; and (iii) if 75% to 99% of the Corporation's revenue
goals are achieved for the applicable fiscal year, Xx. Xxxxxxxx shall be
entitled to a pro rata percentage of $75,000 as determined by the Chief
Executive Officer.
4. XX. XXXXXXXX BENEFITS. During the Term, Xx. Xxxxxxxx shall be
entitled to the employee benefits, including vacation, 401(k) plan, health plan
and other insurance and additional benefits made available by the Corporation to
any other employee of the Corporation. In addition, the Corporation will pay the
health insurance premium for Xx. Xxxxxxxx'x immediate family for the initial
term of this contract.
5. EXPENSES. Pursuant to the Corporation's policies for employees, the
Corporation shall reimburse Xx. Xxxxxxxx for actual out-of-pocket expenses
incurred by him in the performance of his services for the Corporation upon the
receipt of appropriate documentation of such expenses, subject, however, to the
Corporation's reasonable policies relating to business-related expenses as then
in effect from time to time.
6. TERMINATION.
(a) GENERAL. The Corporation has the right to terminate Xx.
Xxxxxxxx'x employment and Term for any reason, at any time with or without Cause
or cause of any kind. Furthermore, the Term shall end immediately upon Xx.
Xxxxxxxx'x death. The Term may also end for Disability, as defined in Section
7(b).
-2-
3
(b) NOTICE OF TERMINATION. If it elects to end the Term, the
Corporation shall promptly give Xx. Xxxxxxxx notice of the termination,
including a statement of whether the termination was for Cause, was without
cause or was on account of Disability (as such terms are defined in Section 7(a)
and 7(b) below). The Corporation's failure to give notice under this Section
6(b) shall not, however, affect the validity of the Corporation's termination of
the Term.
(c) EFFECTIVE TERMINATION BY CORPORATION. If, during the Term, the
Corporation (i) removes Xx. Xxxxxxxx as President and Chief Technology Officer,
(ii) breaches a material provision of this Agreement or (iii) requires Xx.
Xxxxxxxx to perform a material portion of his services at a location more than
25 miles from the current corporate headquarters in Marina del Rey, CA, other
than for customary travel consistent with Xx. Xxxxxxxx'x travel requirements
prior to the effective date of this Agreement, then, at his option, Xx. Xxxxxxxx
may elect to resign, and will be entitled to rights under this Agreement as if
he were terminated without Cause as set forth in Section 7(c)(ii) below. In the
case of clause (i) above, Xx. Xxxxxxxx shall give four (4) months' prior written
notice to the Corporation of Xx. Xxxxxxxx'x intention to resign, and in the case
of clauses (ii) or (iii) above, Xx. Xxxxxxxx shall only be required to give
thirty (30) days prior written notice to the Corporation. Upon receipt of such
notice from Xx. Xxxxxxxx hereunder, the Corporation shall have the right and a
reasonable opportunity to correct or cure the condition which would otherwise
entitle Xx. Xxxxxxxx to resign at the end of the applicable notice period. In
the case of clauses (i, ii, iii), Xx. Xxxxxxxx will be entitled to receive the
pro-rata portion of any earned bonus effective as of the date of Xx. Xxxxxxxx'x
written resignation.
7. DEFINITIONS; SEVERANCE BENEFITS.
(a) "CAUSE" DEFINED. "Cause" means (i) willful malfeasance or willful
misconduct by Xx. Xxxxxxxx in connection with his employment; (ii) Xx.
Xxxxxxxx'x gross negligence in performing any of his duties under this
Agreement; (iii) Xx. Xxxxxxxx'x conviction of, or entry of a plea of guilty to,
or entry of a plea of nolo contendere with respect to, any crime other than a
traffic violation or infraction which is a misdemeanor; (iv) Xx. Xxxxxxxx'x
material breach of any written policy applicable to all employees adopted by the
Corporation which is not cured to the reasonable satisfaction of the Corporation
within fifteen (15) business days after notice thereof; or (v) material breach
by Xx. Xxxxxxxx of any of his agreements in this Agreement which is not cured to
the reasonable satisfaction of the Corporation within fifteen (15) business days
after notice thereof. Any determination by the Corporation of whether "Cause"
exists to terminate Xx. Xxxxxxxx shall be made by the Board, which shall give
Xx. Xxxxxxxx 5 days' prior written notice of a meeting to be held for such
purpose, which Xx. Xxxxxxxx and his counsel shall be offered an opportunity to
attend.
(b) DISABILITY DEFINED. "Disability" shall mean Xx. Xxxxxxxx'x
incapacity due to physical or mental condition that results in his being unable
to substantially perform his duties hereunder for six consecutive months (or for
six months out of any nine month period). During a period of Disability, Xx.
Xxxxxxxx shall continue to receive his base salary hereunder, provided
-3-
4
that if the Corporation provides Xx. Xxxxxxxx with disability insurance
coverage, payments of Xx. Xxxxxxxx'x base salary shall be reduced by the amount
of any disability insurance payments received by Xx. Xxxxxxxx due to such
coverage. The Corporation shall give Xx. Xxxxxxxx written notice of termination
at the end of such 6 month period, which shall take effect sixty (60) days after
the date it is sent to Xx. Xxxxxxxx unless Xx. Xxxxxxxx shall have returned to
the performance of his duties hereunder during such sixty (60) day period
(whereupon such notice shall become void).
If there should be any dispute between the parties as to the Xx.
Xxxxxxxx'x physical or mental disability at any time, such question shall be
settled by the opinion of an impartial reputable physician agreed upon for such
purpose by the parties or their representatives. The certificate of such
physician as to the matter in dispute shall be final and binding on the parties.
The costs and fees related to such impartial physician's certificate shall be
borne by the Corporation.
(c) TERMINATION.
(i) If the Corporation ends the Term for Cause or Disability, or
if Xx. Xxxxxxxx resigns as an employee of the Corporation for reasons other than
as provided in Section 6(c), or if Xx. Xxxxxxxx dies, then the Corporation shall
have no obligation to pay Xx. Xxxxxxxx any amount, whether for salary, benefits,
bonuses, or other compensation or expense reimbursements of any kind, accruing
after the end of the Term, and such rights shall, except as otherwise required
by law, be forfeited immediately upon the end of the Term.
(ii) If the Corporation ends the Term without Cause or if Xx.
Xxxxxxxx elects to terminate during the Initial Term or a Renewal Term pursuant
to the provisions of Section 6(c), then the Corporation shall be obligated to
pay Xx. Xxxxxxxx a severance payment equal to one hundred percent (100%) of the
Xx. Xxxxxxxx'x annual Base Salary as in effect immediately prior to the
termination date. Any such severance payment shall be paid to Xx. Xxxxxxxx in
the form of one lump sum within 30 days of the termination date.
(iii) If Employee elects to resign during the Initial Term or a
Renewal Term pursuant to Section 6(c)(i) or (ii), then Employee shall receive a
severance payment equal to eight months' salary (or the number of months
remaining in the Initial Term or Renewal Term then in effect, if less than eight
months), payable upon the effective date of resignation. The "Severance Period",
as used herein, shall in such circumstances equal a period of eight months (or
such shorter period, if the number of months remaining in the Initial Term of
the Renewal Term then in effect is less than eight months). Notwithstanding the
foregoing, if Employee is dismissed without Cause during the four month period
following Employee's notice of resignation pursuant to Section 6(c)(i) or (ii),
his severance payment will be increased by an amount equal to the salary amount
he would have received during the remainder of the four month period had he not
been terminated without Cause. In such instance, the Severance Period will be
increased by the amount of time beginning on the date of the termination without
Cause and ending at the end of the four month period.
-4-
5
(iv) In the event of any termination pursuant to the provisions
of Section 7(c)(ii) above, Xx. Xxxxxxxx shall also be entitled to receive health
benefits at the Company's expense for a twelve month period from the termination
date.
8. CONFIDENTIALITY, OWNERSHIP, AND COVENANTS.
(a) "CORPORATION INFORMATION" AND "INVENTIONS" DEFINED. "CORPORATION
INFORMATION" means all information, knowledge or data of or pertaining to (i)
the Corporation, its employees, and (ii) any other person, firm, corporation or
business organization with which the Corporation may do business during the
Term, that is not in the public domain (and whether relating to methods,
processes, techniques, discoveries, pricing, marketing or any other matters).
"INVENTIONS" collectively refers to any and all inventions, trade secrets,
source and object codes, data, programs, other works of authorship and
developments regarding any of the foregoing.
(b) CONFIDENTIALITY. (i) Xx. Xxxxxxxx hereby recognizes that the
value of all trade secrets and other proprietary data and all other information
of the Corporation not in the public domain disclosed by the Corporation in the
course of his employment with the Corporation may be attributable substantially
to the fact that such confidential information is maintained by the Corporation
in strict confidentiality and secrecy and would be unavailable to others without
the expenditure of substantial time, effort or money. Xx. Xxxxxxxx, therefore,
except as provided in the next two sentences, covenants and agrees that all
Corporation Information shall be kept secret and confidential at all times
during the Term and for the three (3) year period after the end of the Term and
shall not be used or divulged by him outside the scope of his employment as
contemplated by this Agreement, except as the Corporation may otherwise
expressly authorize by action of the Board and except if such Corporation
Information is then in the public domain through no action (or non-action) on
the part of Xx. Xxxxxxxx. In the event that Xx. Xxxxxxxx is requested in a
judicial, administrative or governmental proceeding to disclose any of the
Corporation Information, Xx. Xxxxxxxx will promptly so notify the Corporation so
that the Corporation may seek a protective order or other appropriate remedy
and/or waive compliance with this Agreement. If disclosure of any of the
Corporation Information is required, Xx. Xxxxxxxx may furnish the material so
required to be furnished, but Xx. Xxxxxxxx will furnish only that portion of the
Corporation Information that legally is required.
(ii) Xx. Xxxxxxxx also hereby agrees to keep the terms of this
Agreement confidential to the same extent that the Corporation maintains such
confidentiality (except with regard to any disclosure by the Corporation
required under applicable securities laws).
(c) OWNERSHIP OF INVENTIONS, PATENTS AND TECHNOLOGY. Xx. Xxxxxxxx
hereby assigns to the Corporation all of Xx. Xxxxxxxx'x right (including patent
rights, copyrights, trade secret rights, and all other rights throughout the
world), title and interest in and to Inventions, whether or not patentable or
registrable under copyright or similar statutes, made or conceived or reduced to
practice or learned by Xx. Xxxxxxxx, either alone or jointly with others, during
the
-5-
6
course of the performance of services for the Corporation. Xx. Xxxxxxxx shall
also assign to, or as directed by, the Corporation, all of Xx. Xxxxxxxx'x right,
title and interest in and to any and all Inventions, the full title to which is
required to be in the United States government by a contract between the
Corporation and the United States government or any of its agencies. The
Corporation shall have all right, title and interest in all research and work
product produced by Xx. Xxxxxxxx as an employee of the Corporation.
(d) XX. XXXXXXXX'X COVENANTS. (i) Xx. Xxxxxxxx acknowledges and
agrees that his services pursuant to this Agreement are unique and
extraordinary; that the Corporation will be dependent upon Xx. Xxxxxxxx for; and
that he will have access to and control of confidential information of the
Corporation which is vital to the success of the Corporation's business. Xx.
Xxxxxxxx further acknowledges that because of his knowledge of the Corporation's
confidential information it is unlikely that Xx. Xxxxxxxx could work for a
competitor of the Corporation without divulging such confidential information.
Xx. Xxxxxxxx further acknowledges that the business of the Corporation is
national in scope and cannot be confined to any particular geographic area of
the United States. For the foregoing reasons, and in consideration for the
benefits offered by the Corporation under this Agreement, Xx. Xxxxxxxx hereby
agrees that (a) for a twelve month period, commencing with the date of Xx.
Xxxxxxxx'x employment termination with the Corporation (the "Covenant Period"),
Xx. Xxxxxxxx shall not accept employment nor engage as a consultant with a
competitor of the Corporation if such position would be comparable to the
position Xx. Xxxxxxxx held with the Corporation and where Xx. Xxxxxxxx can not
satisfy the Corporation, in its reasonable judgement, that the new employer is
prepared to and takes adequate steps to preclude and prevent inevitable
disclosure of the Corporation's confidential information and (b) that
eligibility for severance payments and other benefits under this Agreement are
contingent upon the Xx. Xxxxxxxx'x agreement and compliance with the covenant as
stated above in Section 8(d). No further payments nor eligibility for benefits
continuation will be available to Xx. Xxxxxxxx as of the date Xx. Xxxxxxxx
commences employment/consulting in violation of these covenants. It is a
specific condition of the Agreement that if Xx. Xxxxxxxx commences employment or
engages as a consultant with a competitor of the Corporation if such position
would be comparable to the position Xx. Xxxxxxxx held with the Corporation, Xx.
Xxxxxxxx shall advise competitor in writing of his obligations pursuant to this
Agreement and specifically disclose all covenants contained in Section 8 of this
Agreement. It is also a specific condition of the Agreement that so long as Xx.
Xxxxxxxx is receiving any payments or benefits under this Agreement with respect
to any type of termination, Xx. Xxxxxxxx shall be obligated to immediately
notify the Corporation as to the specifics of the new position that Xx. Xxxxxxxx
is planning to commence as an employee or consultant for any company which is a
competitor of Corporation, and take affirmative steps to assure the Corporation,
that Xx. Xxxxxxxx will not divulge any of the Corporation's confidential
information in Xx. Xxxxxxxx'x new employment. The foregoing covenants do not
apply if Xx. Xxxxxxxx was terminated for reason of Disability as described in
Section 7(b).
(ii) Xx. Xxxxxxxx also covenants that for a twelve month period,
commencing with the date of Xx. Xxxxxxxx'x termination (the "Covenant Period"),
he may not directly or
-6-
7
indirectly hire, employ or retain any person who was an employee of the
Corporation within the prior 9 months or directly or indirectly solicit, entice,
induce or encourage any such person to become employed by any other person. If
Xx. Xxxxxxxx should wish to discuss possible employment with any then-current
Corporation employee during the Covenant Period, Xx. Xxxxxxxx may request
written permission to do so from the Chief Executive Officer of the Corporation
who may, in his/her discretion, grant a written exception to the no solicitation
covenant set forth above, provided, however, Xx. Xxxxxxxx agrees that he will
not discuss any such employment possibility with such employees prior to
securing the Corporation's permission. If the Corporation should decline to
grant such permission, Xx. Xxxxxxxx agrees that he will not at any time, advise
the employee concerned that he/she was the subject of a request under this
paragraph or that the Corporation refused to grant Xx. Xxxxxxxx the right to
discuss employment possibility with him/her.
(iii). If Xx. Xxxxxxxx fails to adhere to the foregoing covenants Xx.
Xxxxxxxx acknowledges and agrees that the Corporation shall be entitled to
terminate all payments/benefits Xx. Xxxxxxxx is granted under the Agreement,
injunctive relief to prevent a threatened misappropriation of confidential
information, and any other remedies available to the Corporation in law or
equity.
(e) REMEDIES. Xx. Xxxxxxxx hereby acknowledges that the covenants and
agreements contained in Section 8 (the "Restrictive Covenants") are reasonable
and valid in all respects and that the Corporation is entering into this
Agreement, inter alia, on such acknowledgment. If Xx. Xxxxxxxx breaches, or
threatens to commit a breach, of any of the Restrictive Covenants, the
Corporation shall have the following rights and remedies, each of which rights
and remedies shall be independent of the other and severally enforceable, and
all of which rights and remedies shall be in addition to, and not in lieu of,
any other rights and remedies available to the Corporation under law or in
equity: (i) the right and remedy to have the Restrictive Covenants specifically
enforced by any court having equity jurisdiction, it being acknowledged and
agreed that any such breach or threatened breach will cause irreparable injury
to the Corporation and that money damages will not provide an adequate remedy to
the Corporation; (ii) the right and remedy to require Xx. Xxxxxxxx to account
for and pay over to the Corporation all compensation, profits, monies, accruals,
increments or other benefits (collectively, "Benefits") derived or received by
Xx. Xxxxxxxx as the result of any transactions constituting a breach of any of
the Restrictive Covenants, and Xx. Xxxxxxxx shall account for and pay over such
Benefits to the Corporation; (iii) if any court determines that any of the
Restrictive Covenants, or any part thereof, is invalid or unenforceable, the
remainder of the Restrictive Covenants shall not thereby be affected and shall
be given full effect, without regard to the invalid portions; and (iv) if any
court construes any of the Restrictive Covenants, or any part thereof, to be
unenforceable because of the duration of such provision or the area covered
thereby, such court shall have the power to reduce the duration or area of such
provision and, in its reduced form, such provision shall then be enforceable and
shall be enforced.
(f) JURISDICTION. The parties intend to and hereby confer
jurisdiction to enforce the Restrictive Covenants upon the courts of any
jurisdiction within the geographical scope of
-7-
8
such Covenants. If the courts of any one or more such jurisdictions hold the
Restrictive Covenants wholly unenforceable by reason of the breadth of such
scope or otherwise, it is the intention of the parties that such determination
not bar or in any way affect the Corporation's right to the relief provided
above in the courts of any other jurisdiction, within the geographical scope of
such Covenants, as to breaches of such Covenants in such other respective
jurisdictions such Covenants as they relate to each jurisdiction being, for this
purpose, severable into diverse and independent covenants.
9. SUCCESSORS AND ASSIGNS.
(a) XX. XXXXXXXX. This Agreement is a personal contract, and the
rights and interests that the Agreement accords to Xx. Xxxxxxxx may not be sold,
transferred, assigned, pledged, encumbered, or hypothecated by him. All rights
and benefits of Xx. Xxxxxxxx shall be for the sole personal benefit of Xx.
Xxxxxxxx, and no other person shall acquire any right, title or interest under
this Agreement by reason of any sale, assignment, transfer, claim or judgment or
bankruptcy proceedings against Xx. Xxxxxxxx. Except as so provided, this
Agreement shall inure to the benefit of and be binding upon Xx. Xxxxxxxx and his
personal representatives, distributees and legatees.
(b) THE CORPORATION. This Agreement shall be binding upon the
Corporation and inure to the benefit of the Corporation and of its successors
and assigns, including (but not limited to) any corporation that may acquire all
or substantially all of the Corporation's assets or business or into or with
which the Corporation may be consolidated or merged. The Corporation's
obligations under this Agreement shall cease, however, if the successor to, the
purchaser or acquirer either of the Corporation or of all or substantially all
of its assets, or the entity with which the Corporation has affiliated, shall
assume in writing the Corporation's obligations under this Agreement (and
deliver an executed copy of such assumption to Xx. Xxxxxxxx), in which case such
successor or purchaser, but not the Corporation, shall thereafter be the only
party obligated to perform the obligations that remain to be performed on the
part of the Corporation under this Agreement.
10. ENTIRE AGREEMENT. This Agreement represents the entire agreement
between the parties concerning Xx. Xxxxxxxx'x employment with the Corporation
and supersedes all prior negotiations, discussions, understandings and
agreements, whether written or oral, between Xx. Xxxxxxxx and the Corporation
relating to the subject matter of this Agreement, including but not limited to
the Employment Agreement dated as of April 1, 1996 between the Corporation and
Xx. Xxxxxxxx, and the Employment Agreement effective as of September 1, 1998
between the Corporation and Xx. Xxxxxxxx.
11. AMENDMENT OR MODIFICATION, WAIVER. No provision of this Agreement
may be amended or waived unless such amendment or waiver is agreed to in writing
signed by Xx. Xxxxxxxx and by a duly authorized officer of the Corporation. No
waiver by any party to this Agreement of any breach by another party of any
condition or provision of this Agreement to be
-8-
9
performed by such other party shall be deemed a waiver of a similar or
dissimilar condition or provision at the same time, any prior time or any
subsequent time.
12. NOTICES. Any notice to be given under this Agreement shall be in
writing and delivered personally or sent by overnight courier or registered or
certified mail, postage prepaid, return receipt requested, addressed to the
party concerned at the address indicated below, or to such other address of
which such party subsequently may give notice in writing:
If to Xx. Xxxxxxxx: Xxxxxx X.X. Xxxxxxxx
0000 Xxxxxxx Xxxx
Xxx Xxxxxxx, XX 00000
If to the Corporation: Digital Lava, Inc.
00000 Xxxxxxxx, Xxxxx 000
Xxxxxx Xxx Xxx, XX 00000
Fax: 000-000-0000
Attention: Chief Executive Officer
with a copy to: Xxxxxx & Xxxxxxx
000 Xxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, XX 00000-0000
Fax: 000-000-0000
Attention: Xxxxxxx Xxxx, Esq.
Any notice delivered personally or by overnight courier shall be deemed given on
the date delivered and any notice sent by registered or certified mail, postage
prepaid, return receipt requested, shall be deemed given on the date mailed.
13. SEVERABILITY. If any provision of this Agreement or the application
of any such provision to any party or circumstances shall be determined by any
court of competent jurisdiction to be invalid and unenforceable to any extent,
the remainder of this Agreement or the application of such provision to such
person or circumstances other than those to which it is so determined to be
invalid and unenforceable shall not be affected, and each provision of this
Agreement shall be validated and shall be enforced to the fullest extent
permitted by law. If for any reason any provision of this Agreement containing
restrictions is held to cover an area or to be for a length of time that is
unreasonable or in any other way is construed to be too broad or to any extent
invalid, such provision shall not be determined to be entirely null, void and of
no effect; instead, it is the intention and desire of both the Corporation and
Xx. Xxxxxxxx that, to the extent that the provision is or would be valid or
enforceable under applicable law, any court of competent jurisdiction shall
construe and interpret or reform this Agreement to provide for a restriction
having the maximum enforceable area, time period and such other constraints or
conditions (although not greater than those contained currently contained in
this Agreement) as shall be valid and enforceable under the applicable law.
-9-
10
14. SURVIVORSHIP. The respective rights and obligations of the parties
hereunder shall survive any termination of this Agreement to the extent
necessary to the intended preservation of such rights and obligations.
15. HEADINGS. All descriptive headings of sections and paragraphs in
this Agreement are intended solely for convenience of reference, and no
provision of this Agreement is to be construed by reference to the heading of
any section or paragraph.
16. WITHHOLDING TAXES. All salary, benefits, reimbursements and any
other payments to Xx. Xxxxxxxx under this Agreement shall be subject to all
applicable payroll and withholding taxes and deductions required by any law,
rule or regulation of and federal, state or local authority.
17. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together constitute one and same instrument.
18. APPLICABLE LAW; ARBITRATION. The validity, interpretation and
enforcement of this Agreement and any amendments or modifications hereto shall
be governed by the laws of the State of California, as applied to a contract
executed within and to be performed in such State. The parties agree that any
disputes shall be definitively resolved by binding arbitration before the
American Arbitration Association in Los Angeles, California and consent to the
jurisdiction to the federal court located in Los Angeles, California or, if
there shall be no jurisdiction, to the state courts located in Los Angeles,
California, to enforce any arbitration award rendered with respect thereto. Each
party shall choose one arbitrator and the two arbitrators shall choose a third
arbitrator. All costs and fees related to such arbitration (and judicial
enforcement proceedings, if any) shall be borne by the unsuccessful party.
-10-
11
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
DIGITAL LAVA, INC.
By: /s/ Xxxxxx Xxxxxx
--------------------------------------
Xxxxxx Xxxxxx, Chief Executive Officer
/s/ Xxxxxx X. X. Xxxxxxxx
--------------------------------------
Xxxxxx X.X. Xxxxxxxx
-11-
