EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (this "Agreement") is made and entered into as of
the 5th day of May, 1999 ("Effective Date"), by and between ModaCAD, Inc., a
California corporation ("Employer"), and Xxx Xxxxxxxx, an individual resident in
California ("Executive").
RECITALS
A. Employer is a corporation engaged in the business of designing,
developing, marketing and distributing computer software products and is a
developer and provider of technologies and digital content for electronic
merchandising on the Internet.
B. Executive is employed by Employer as its Chief Financial Officer (CFO)
and Financial Vice President (Financial V.P.).
C. Employee and Executive now desire to enter into this Agreement for the
purpose of providing for the continued employment of Executive by Employer on
the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the above recitals and the mutual
promises and covenants set forth herein, and for other valuable consideration,
the adequacy and receipt of which are hereby acknowledged, the parties hereby
agree as follows:
1. Employment; Employment Term
1.1 Employer agrees to employ Executive, and Executive agrees to be
employed by Employer, as Employer's CFO and Financial V.P. until such time
as a new replacement CFO is hired by the Company and thereafter Executive
is to be employed as its Executive Vice President (Exec. V.P.), for a term
commencing on the Effective Date and continuing for a term of three (3)
years, unless earlier terminated in accordance with the provisions of
Section 4 hereof (the "Employment Term"). Executive's primary duties and
responsibilities as CFO and Financial V.P. hereunder shall be to manage and
administer the financial matters of the Company, and as Exec. V.P to be
responsible for contract management, negotiation and administration, all
subject to the supervision and direction of Employer's Chairman and
Co-Chief Executive Officer and President and Co-Chief Executive Officer
(collectively the Co-CEOs). Executive agrees to perform such duties and to
satisfy such responsibilities throughout the Employment Term.
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1.2 The services to be rendered by Executive hereunder shall be
furnished at such places as Employer deems appropriate, but in no event
will Executive be required to relocate his principal residence outside Los
Angeles, California, or to spend more than thirty (30) days in any one
calendar year outside of Los Angeles, California, in order to perform
Executive's duties under this Agreement.
2. Compensation
2.1 Employer agrees to pay Executive a salary at the rate of One
Hundred Twenty Five Thousand Dollars ($125,000) per year, payable in
accordance with Employer's regular salary payroll policies and procedures.
In addition, upon execution and delivery of this Agreement,
2.2 Employer shall pay to Executive an annual performance bonus for
each calendar year of the Employment Term in which Employer achieves
"aggregate gross revenues" equal to or greater than the minimum target
amount for such calendar year set forth on Exhibit "A" hereto, the amount
of which bonus shall be equal to the dollar amount set forth opposite the
relevant target amount of aggregate gross revenues which Employer achieves
for such calendar year. For this purpose, "aggregate gross revenues" shall
include all revenues of Employer and any company controlling, controlled by
or under common control with Employer for the relevant calendar year.
Executive's bonus shall be due and payable to Executive not later than
thirty (30) days following the release of Employer's audited financial
statements for the year concerned.
2.3 It is recognized that during the Employment Term Executive will be
required to incur ordinary and necessary business promotion expenses in
connection with the performance of his duties and Executive shall be
entitled to reimbursement for such expenses in accordance with Employer's
general reimbursement policies and procedures as may be established from
time to time by Employer's Co-CEOs. Such reimbursement shall be subject to
authorization by the Co-CEOs.
2.4 It is recognized that the services to be performed by Executive
will require the use of a suitable automobile and Employer shall pay to
Executive monthly on the first business day of each month during the
Employment Term an automobile expenses reimbursement allowance in an amount
of Four Hundred Dollars ($400).
2.5 It is recognized that during the Employment Term Executive will be
required to incur continuing expenses to stay abreast of developments in
the areas of Executive's expertise. Executive shall be entitled to
reimbursement for such expenses to the extent incurred in accordance with
Employer's policies upon presentation of vouchers or other evidence of
those expenditures in a form in accordance with Employer's policies and
procedures as may be established from time to time by Employer's Co-CEOs.
2.6 Executive shall be entitled to reimbursement for expenses incurred
in connection with his home office as may be required in order to perform
his duties under this Agreement, to the extent such expenses are permitted
in accordance with the Employer's policies and procedures as may be
established from time to time by Employer's Co-CEOs. Such expenses shall
be reimbursed upon presentation of vouchers or other evidence of those
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expenditures in a form in accordance with Employer's policies and
procedures as may be established from time to time by Employer's Co-CEOs.
Without limitation of the immediately preceding sentence, Employer
acknowledges that it is a requirement of Executive's duties that Executive
have a separate telephone line at his home office and the expense incurred
by Executive in connection with the installation and use of such separate
telephone facilities shall be reimbursed to Executive when and as incurred.
2.7 During the Employment Term and continuing for the life of the
Executive thereafter, without regard to whether Executive is employed by
Employer during any part of such period, Executive and Executive's
dependents shall be entitled to participate in any and all of Employer's
group medical, dental, medical reimbursement and life insurance benefit
programs, the benefits set forth in Paragraph 3, and other such benefit
programs as may be made available to Employer's executives generally, upon
the same terms and conditions as such programs are made available to other
senior executive executives of Employer; provided, however, that if at any
time during such period of time Employer does not offer Executive and
Executive's dependents full coverage under a comprehensive medical and
dental reimbursement plan, Employer shall promptly reimburse Executive for
all costs and expenses of Executive's own medical and dental reimbursement
plan for Executive and Executive's dependents; and provided, further, that
Employer shall have no obligation under this Section 2.7 following any
termination of Executive pursuant to Section 4.2.
2.8 Executive shall be entitled to three (3) full weeks of vacation
during each calendar year of the Employment Term, commencing with calendar
year 1999. Executive agrees that without the express prior written consent
of Employer such vacation periods shall not be accumulated, but shall be
taken during each calendar year or forfeited, and Executive agrees to
schedule and take such vacation at a time or times which do not
unreasonably impair Employer's operations.
2.9.1 Executive shall be entitled to incentive stock options and
bonuses under Employer's 1995 Stock Option Plan as amended _____1998, which
are granted to other executives based on performance or other criteria
established from time to time by Employer.
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Employment of Executive with Employer shall terminate for any reason
other than as described in clause (a) or other than for a reason
constituting "just cause" pursuant to Section 4.2, or if there is a "Change
in Control" (as defined below), the exercisability of the Option shall
accelerate so that it becomes immediately exercisable, as of the date of
termination or Change in Control, as to all of the shares covered by the
Option and shall thereafter remain exercisable for a period of 90 days, in
the case of such a termination (except that the 90 day period shall be
extended to 12 months if Executive shall die during such 90 day period) or,
in the case of a Change in Control, for a period of five (5) years; and (c)
for customary antidilution protections.
2.9.2 As used herein, the term "Change in Control" shall be deemed to
have occurred (a) on the date Employer first has actual knowledge that any
person (as such term in Sections 13(d) and 14(d)(2) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act")) who is not such
beneficial owner on the Date of Grant has become the beneficial owner (as
defined in Rule 13(d)-3 under the Exchange Act), directly or indirectly, of
securities of Employer representing 40% or more of the combined voting
power of Employer's then outstanding securities or (b) on a date the
stockholders of Employer approve (i) a merger of Employer with or into any
other corporation in which Employer is not the surviving corporation or in
which Employer survives as a subsidiary of another corporation, (ii) a
consolidation of Employer with any other corporation or (iii) the sale or
disposition of all or substantially all of Employer's assets or a plan of
complete liquidation.
2.9.3 In addition to any ISO's granted to Executive pursuant to
Section 2.9.1, Employer shall grant such number of additional options,
exercisable for five (5) years at a per share price equal to the fair
market value of a share of Employer's Common Stock on the date of grant, to
purchase shares of Employer's Common Stock as the Compensation Committee
shall determine is appropriate from time to time. To the extent permitted
under Section 422(d) of the Internal Revenue Code of 1986, as amended, such
additional options shall be "incentive stock options" and, to the extent
not so permitted, such options will be "nonstatutory stock options".
2.9 Executive shall be entitled to participate in any profit-sharing,
pension, stock option, stock ownership, insurance or other plans, benefits
or policies available generally to Executives of Employer on terms and
conditions not less advantageous than those applicable to such Executives.
2.10 Executive shall be entitled during the Employment Term, and
thereafter in regard to any claim or assertion relating to actions,
circumstances or events occurring during the Employment Term, to the
benefit of the indemnification provisions contained in Employer's Bylaws,
as they may be amended from time to time, to the extent permitted by
applicable law; provided, however, that, notwithstanding such
indemnification provisions, Executive shall not be required to serve as a
director of Employer during any period of time in which Executive is not
covered by a policy of directors' and officers' errors and omissions
insurance policy, having coverage in an amount and scope reasonably
satisfactory to Executive.
3. Sick Leave and Disability.
3.1 During the Employment Term, in the event that Executive shall, by
reason of illness or other physical or mental disability, be unable to
perform his duties herein for a period of up to one hundred eighty (180)
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consecutive days, said disability shall be deemed for purposes of this
Agreement to be temporary and Executive shall continue to receive all
compensation payable pursuant to Section 2.
3.2 During the Employment Term, in the event that Executive shall, by
reason of illness or other physical or mental disability, be unable to
perform his duties hereunder for more than One Hundred Eighty (180)
consecutive days, said disability shall be deemed for purposes of this
Agreement to be permanent, and this Agreement shall thereupon terminate,
and, subject to the provisions of Section 3.3 hereof, Employer shall have
no further obligations whatever to Executive, except pursuant to the Option
and to make the severance payments provided in Sections 4.3.1 and 4.3.2
hereof, which payments shall be paid to Executive immediately upon such
termination. It is understood that, except as provided in Sections 3.1 and
3.3 hereof, Executive shall not be entitled to receive compensation during
any period of disability.
3.3 In the event of Executive's permanent disability as provided in
Sections 3.2 hereof, if Employer does not then have an Employer-paid
disability insurance plan providing for Executive to receive payments for
as long as Executive remains permanently disabled in amounts equal to at
least seventy percent (70%) of Executive's salary paid as provided in this
Agreement, Employer shall make disability payments monthly to Executive for
so long as Executive remains permanently disabled in an amount equal to
seventy percent (70%) of Executive's salary paid as provided in this
Agreement.
4. Termination of Agreement.
4.1.1 Employer, acting only through a resolution adopted by its Board
of Directors, may terminate Executive's employment under this Agreement at
Employer's election by sending a six month written notice to Executive,
notifying Executive that effective at the end of such six-month period this
Agreement and the Employment Term shall be terminated. Upon the expiration
of such six-month period, Employer's employment of Executive and the
Employment Term shall cease and be at an end and Employer shall have no
further obligations whatever to Executive, except pursuant to the Option
and to continue to provide Executive the benefits set forth in Section 2.7
and to make the severance payments provided in Sections 4.3.1 and 4.3.2
hereof, the performance of which shall be an absolute condition to the
effectiveness of any termination by Employer of Executive's employment
pursuant to this Section 4.1.1.
4.1.2 Executive may terminate his employment with Employer by giving
thirty (30) days written notice of termination to Employer's Board of
Directors, and this Agreement and the Employment Term shall be terminated
effective at the close of business on said thirtieth (30th) day. Thereupon,
the Employment Term shall cease at the expiration of such thirty (30) day
period, Executive shall have no further obligations whatever to Employer
and Executive shall not be entitled to be paid the severance payment
provided in Section 4.3 hereof, however Executive shall be entitled to
continue to receive the lifetime benefits set forth in Section 2.7 hereof.
4.2 Notwithstanding any provision set forth in Section 4.1 hereof,
Executive's employment may be terminated at any time by Employer
immediately and without any requirement of advance notice, and without any
obligation to pay any severance payment, for just cause. For purposes of
this Agreement, "just cause" means: (i) the continued use of non-medically
prescribed narcotic drugs by Executive which renders him unable to fulfill
his duties under this Agreement; and (ii) the commission by Executive of an
act of fraud or embezzlement against Employer or Executive's conviction of
a felony involving moral turpitude.
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4.3.1 If Employer should terminate this Agreement for any reason other
than for a reason constituting just cause pursuant to Section 4.2 hereof,
Employer shall pay to Executive (and the vesting of any Options granted
shall accelerate in accordance with Section 2.9.1(b)), on the effective
date of such termination, a severance payment in an amount equal to the
greater of: (i) Two Hundred Thousand Dollars ($200,000.00); or (ii) the
cumulative balance of Executive's salary which would have been payable to
Executive during the remainder of the full three (3)-year Employment Term
pursuant to Section 2.1 of this Agreement if Employer had not so terminated
this Agreement. Further, upon the occurrence of a Change in Control which
does not result in this Employment Agreement, and all rights and
obligations hereunder, being fully assumed by, as the case may be, the
surviving corporation, the successor to Employer or the transferee of all
or substantially all of the Company's assets, such Change in Control shall
be deemed a termination entitling Executive to receive the severance
payments set forth in the immediately preceding sentence and in Section
4.3.2. In partial consideration of such payment and continuing for a period
of Two and One-Half years (913 days) thereafter (the "Advisory Period"),
Executive shall, to the extent that his physical and mental conditions
permit, be available to consult with and advise Employer's officers,
directors and other representatives in regard to matters concerning
Employer's business. Notwithstanding any other provision of this Agreement,
if Executive's physical or mental condition prevents him from fulfilling
his consulting or advisory duties, he shall still be paid such severance
payment. Executive and Employer agree that it is impossible to determine
with any reasonable accuracy the amount of prospective damages to Executive
from Employer's termination other than for just cause of this Agreement;
and, in consideration thereof, Executive and Employer agree that the
severance payment provided above is reasonable, and is not a penalty, based
upon facts and circumstances of the parties at the time of entering into
this Agreement, and with due regard to Executive's future expectations.
Notwithstanding the foregoing, if Executive should cease his employment
hereunder voluntarily for any reason, or if Employer should terminate this
Agreement for just cause, all compensation and benefits payable to
Executive (including those provided in Section 2.7) shall thereupon without
any further writing or act cease, lapse and be unconditionally terminated.
4.3.2 If any payments made to Executive under this Agreement or
otherwise (the "Payments") are subject to the excise tax imposed by Section
4999 of the Code (the "Excise Tax"), then Employer shall pay Executive an
additional amount ("Gross Up") such that the net amount retained by
Executive after deduction of any Excise Tax on the Payments and any Federal
and State income taxes and Excise Tax upon the Payments shall be equal to
the Payments. For purposes of determining the amount of the Gross Up,
Executive shall be deemed to pay Federal, State and local income taxes at
the highest marginal rate of taxation in the calendar year in which the
Payment is to be made. State and local income taxes shall be determined
based upon the state and locality of your domicile on the date on
termination is effective. The determination of whether such Excise Tax is
payable and the amount thereof shall be based upon the opinion of tax
counsel selected by Employer and acceptable to Executive. If such opinion
is not finally accepted by the IRS upon audit, then appropriate adjustments
shall be computed (without interest but with Gross Up, if applicable) by
such tax counsel based upon the final amount of the Excise Tax so
determined. The amount shall be paid by the appropriate party in one lump
cash sum within 30 days of such computation.
4.4 On the event of Executive's death at any time during the
Employment Term, this Agreement and the Employment Term shall thereupon
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terminate, and Employer shall be obligated to pay Executive's estate only
that portion of Executive's salary which had accrued through the date of
his death, plus a death benefit bonus, in an amount equal to six months'
salary of Executive, provided, that, if Executive should die after Employer
shall have given notice pursuant to Section 4.1.1 of termination of
Executive's employment other than for just cause, but prior to the
expiration of the six-month notice period required by that Section,
Employer shall nonetheless pay to Executive's estate the severance payment
provided in Section 4.3 hereof.
4.5 Any demotion of Executive from the position set forth in Section
1.1 of this Agreement, or any material diminishment of the responsibilities
regularly exercised by an Executive holding that job title, shall be
conclusively presumed for purposes of this Agreement, unless Executive
otherwise agrees in advance in writing, to constitute Employer's
termination without just cause of Executive's employment under this
Agreement. Such presumptive termination shall entitle Executive to the
severance payment provided in Section 4.3 hereof and accelerated vesting of
the Option as provided in Section 2.9.1(b), without limitation of any other
right or remedy of Executive under this Agreement or applicable law. It is
agreed that the changes in duty from Chief Financial Officer to Executive
Vice President, and, if applicable, any resumption thereafter of some or
all of the duties of Chief Financial Officer, would not be deemed to be a
demotion or material diminishment of responsibilities.
5. Executive's Agreement Not to Compete With, and to Protect the
Proprietary Assets of Employer.
5.1 During the Employment Term, Executive shall not directly or
indirectly engage, be involved, or have any financial interest, in any
proprietorship, partnership, company or other business which engages in
competition with Employer in any line of business in which Employer is or
may be from time to time engaged during such period of time, whether
Executive does so as a partner, officer, director, Executive, consultant or
holder of any beneficial interest in any such business or activity. During
and after the Employment Term, Executive shall not divert nor attempt to
divert from Employer any business of any kind in which Employer is or may
be engaged. Furthermore, Executive shall not induce or attempt to induce
any person who is an Executive of Employer to leave the employ of Employer.
5.2 Employer acknowledges that in the performance of his duties as an
Executive of Employer he may have access to Employer's existing or
potential trade secrets, including, but not limited to, any formula,
discovery, idea or concept, pattern, device, compilation of information
used in Employer's business, designs, plan, proposal, software (both object
code and source code) and software documentation, flow charts, diagrams,
models, data and data bases, marketing and research and development plans,
pricing plans and price lists, financial data and projections of sales,
expenses, etc., and other confidential information, which allows Employer
to obtain an advantage over others, including competitors, who do not know
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or use such trade secrets (cumulatively, "Trade Secrets"); inventions,
including but not limited to, any new machines, manufacturing or production
devices, methods, processes, uses, apparatuses, developments, improvements,
composition of matter, design, or configuration of any kind, discovered,
conceived, developed, made, or produced, or any improvements to them
(cumulatively, "Inventions"); and other confidential market information,
including, but not limited to, customer, marketing, sales, financial,
administrative, production, processing, operational and other proprietary
information used in Employer's business (cumulatively, "Confidential
Information") which are confidential and proprietary to Employer.
Accordingly, during and after the Employment Term, Executive shall keep in
confidence at all times and not disclose to any person, firm or
corporation, and not make any use of, except as expressly authorized by
Employer, any Trade Secrets, Inventions or Confidential Information which
are made available to Executive and identified as proprietary or which,
from the circumstances involved, Executive should recognize as proprietary.
Executive further agrees that all Trade Secrets, Inventions and
Confidential Information shall remain the exclusive property of Employer
and shall not be removed from Employer's premises under any circumstances
whatever, except as expressly authorized by Employer.
5.3 If Executive at any time should have any question about
Executive's use or disclosure of Trade Secrets, Inventions or Confidential
Information or whether any ideas, procedures, information, documentation,
materials or representations are Trade Secrets, Inventions or Confidential
Information, Executive shall promptly discuss the question with Employer's
Management, whose determination shall be binding on Executive.
5.4 Executive further agrees not to disclose to Employer, or induce
Employer to use, any Trade Secrets, Inventions or Confidential Information
belonging to a third party.
6. Executive's Agreement that All Inventions Developed in the Course of
Employment Are the Property of Employer.
6.1 As part of Executive's employment responsibilities, Executive is
being hired to invent and develop further ideas, products, financial
policies and procedures relating to Employer's business, including, without
limitation, new products and systems. Accordingly, Executive shall:
(i) Disclose promptly, in writing, to such person and in such
manner as Employer may from time to time designate, all inventions,
made or conceived by Executive, either solely or jointly with others,
during the Employment Term relating to Employer's business or
Employer's actual or anticipated research and development or resulting
from any work which Executive performed for Employer. Executive also
agrees to assign and convey to Employer upon request, the complete
right, title and interest in and to all such inventions, improvements,
and developments. Executive understands that Employer does not require
disclosure or an assignment of any rights in an invention for which no
equipment, supplies, facility, Trade Secrets, Inventions or
Confidential Information of Employer was used, or which was developed
entirely on Executive's own time, and (a) which does not relate to the
business of Employer or to Employer's actual or anticipated research
or development, or (b) which does not result from any work which
Executive performed for Employer.
(ii) Upon request made during the Employment Term or thereafter,
to do all lawful acts, including the execution of papers and giving of
testimony, that may be necessary or helpful in obtaining, sustaining,
or reissuing patents of the United States and foreign counties on all
Trade Secrets and Inventions, and for perfecting and maintaining
Employer's title thereto; and to otherwise cooperate with Employer in
any controversy or legal proceedings relating to any invention or
patents thereon.
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(iii) Cooperate generally with Employer in any controversy or
legal proceedings relating to said inventions, improvement or
developments, or to patent applications or patents thereon or
copyrights thereof.
6.2 For purposes of this Agreement, an invention related to Employer's
business is deemed to have been made during the Employment Term, if, during
such period, the invention was conceived or actually reduced to practice.
Any patent applications filed by Executive during the Employment Term shall
be presumed to relate to an invention made during the Employment Term, and
Employer shall be entitled to all right, title and interest in and to each
such invention, unless a preponderance of the evidence shows that the
invention was not made during such period or was unrelated to Employer's
business.
6.3 A complete description of all inventions, discoveries and other
rights, properties and assets actually made or owned by Executive, and
potentially related to Employer's business, before entering Employer's
employ and being retained by Executive as his property is set forth in
Exhibit 1 hereto, which is incorporated by this reference in full into this
Agreement.
6.4 Executive acknowledges and agrees that his covenants and
undertakings contained in this Section 6 relate to matters which are of a
special, unique and extraordinary character, which gives them a peculiar
value impossible of replacement by Employer and for the loss of which
Employer cannot be reasonably or adequately compensated by monetary
damages. Accordingly, any breach by Executive of the provisions of this
Section 6 would cause Employer irreparable injury and damages and Executive
therefore expressly agrees that Employer shall be entitled to injunctive
and other equitable relief to prevent a breach or a continuing breach of
any of the provisions of this Section 6, and to secure the enforcement of
any of these provisions, in addition to any other legal or equitable remedy
that may be available to Employer. Further, Executive agrees that the
provisions of this Section 6 shall survive any termination of Executive's
employment by Employer, and that those provisions shall not be construed to
limit any of Executive's obligations and duties to Employer which may be
provided by law.
7. Miscellaneous.
7.1 All notices hereunder to the parties hereto shall be in writing
and sent by certified or registered mail, return receipt requested, postage
prepaid, or by telegram or telex, addressed to the respective parties at
the following addresses:
EMPLOYER: ModaCAD, Inc.
0000 Xxxxxxxxx Xxxxxxxxx
Xxxxxx Xxxx, XX 00000
Attention: The Board of Directors
Executive: Mr. Xxx Xxxxxxxx
00000 Xxxxxxxx Xxxx
Xxx Xxxxxxx, XX 00000
Any party may, by written notice complying with the requirements of this
Section, specify another or different person or address for the purpose of
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notification hereunder. Such notices shall be deemed to have been given and
received on the next day following the sending of such telegram or telex
and, if mailed, on the fifth business day following such mailing.
7.2 This Agreement contains the entire and only agreement of the
parties hereto respecting the matters herein set forth, supersedes all
prior agreements (including, without limitation, the Existing Employment
Agreement, provided, however, that any salary, bonus, expense allowance or
reimbursement, or other compensation or benefit accrued but unpaid to
Executive as of the Effective Date shall continue to be owing and payable
by the Employer to Executive and any incentive stock options which
Executive is entitled to under the provisions of Section 2.9 of the
Existing Employee Agreement shall be granted at the first Board of
Directors meeting following release of Employer's audited financial
statement for 1997) and understandings between the parties hereto regarding
the matters hereby contemplated, and may not be changed or terminated
orally, nor shall any change, termination or attempted waiver of any of the
provisions contained in this Agreement by binding unless in writing and
signed by the party against whom the same is sought to be enforced, nor
shall this Section itself be waived verbally. This Agreement may be amended
only by a written instrument duly executed by or on behalf of the parties
hereto.
7.3 This Agreement and all of its provisions, rights and obligations
shall be binding upon and shall inure to the benefit of the parties hereto
and their respective successors. This Agreement may be assigned by the
Employer to any person, firm or cooperation which shall become the owner of
substantially all of the assets of the Employer or which shall succeed to
the business of the Employer; provided, however, that in the event of any
such assignment Employer shall obtain an instrument in writing from the
assignee in which such assignee assumes the obligations of Employer
hereunder and Employer shall deliver an executed copy thereof to Executive,
whereupon Employer shall be released of all further liability to Executive
hereunder.
7.4 This Agreement is made and intended to be performed principally in
the State of California and shall take effect under, be construed and
enforced according to, and the rights and obligations of the parties shall
be governed in all respects by, the laws of the State of California. Should
any action be brought to interpret or enforce the terms hereof, the
prevailing party shall be awarded costs and reasonable attorneys' fees.
7.5 The headings of the Sections of this Agreement have been inserted
for convenience of reference only, and shall in no way affect the
interpretation of any of the terms or conditions of this Agreement.
7.6 If any provision or part thereof of this Agreement for any reason
shall be held by an official body to be invalid or unenforceable, the valid
and enforceable provisions or parts of this Agreement shall nonetheless
continue to be given effect and bind Employer and Executive.
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the day and year first above written.
MODACAD, INC.,
a California corporation
/s/ XXX XXXXXXXX By: /s/ XXXXXXXX XXXXXXXXX
------------------------- -------------------------------
Xxx Xxxxxxxx, Xxxxxxxx Xxxxxxxxx,
"Executive" President and COO
"Employer"
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