EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement"), effective as of
July 2, 1998, is made and entered into by and between U.S. Interactive, Inc., a
New Jersey corporation (the "Company"), successor by merger to DIGITAL
EVOLUTION, INC., a California corporation ("Digital"), and XXXX XXXXXX (the
"Executive").
RECITALS
WHEREAS, Digital and the Executive are parties to that certain
Employment Agreement dated as of November 14, 1996 (the "Original Employment
Agreement");
WHEREAS, Digital has entered into a Merger Agreement pursuant
to which Digital will be merged with and into the Company (the "Merger");
WHEREAS, from and after the Merger, the Company will engage in
the business information technology services, principally web-based technologies
associated with, internet, intranet and extranet design, consultation,
installation and maintenance professional services (the "Business");
WHEREAS, the Executive possesses an intimate knowledge of the
business and affairs of Digital and its policies, procedures, methods and
personnel; and
WHEREAS, in connection with and as a condition to the Merger,
the Company (as successor to Digital) desires to continue to employ the
Executive as its Executive Chairman on the terms and conditions hereinafter set
forth and the Executive desires to accept such continued employment on such
terms and conditions.
NOW, THEREFORE, in consideration of the premises and the
mutual covenants and agreements contained herein, and for other good and
valuable consideration, the receipt and sufficiency of which hereby are
acknowledged, the parties agree as follows:
1. Employment. Subject to and pursuant to the terms of this
Agreement, effective as of the date of this Agreement (the "Effective Date"),
the Original Employment Agreement shall be amended and restated in its entirety
as set forth in this Agreement, the Original Employment Agreement shall have no
further force and effect and the Company shall employ the Executive, and the
Executive shall be employed by and shall serve the Company, in the capacity of
Executive Chairman, reporting directly to the Board of Directors (the "Board")
pursuant to the terms and conditions of this Agreement. Executive, Xxxxxxx
Xxxxxxxxx and Xxxxx Xxxxx shall also have the title of Co-Founders, such title
to be used in press releases, promotional literature, announcements and the
like.
2. Term and Renewals. Subject to the provisions for earlier
termination provided herein, the term of this Agreement (the "Initial Term")
shall commence on the Effective Date and shall terminate on the one (1) year
anniversary of the Effective Date. The Initial Term shall be renewed for a one
(1)-year period (the "Initial Renewal Term") if at least thirty (30) days prior
to the expiration of the Initial Term either party hereto shall not have given
the other party written notice not to renew this Agreement. The Initial Renewal
Term and each "Renewal Term" (as defined in this Section 2) shall be renewed for
successive one (1)-year periods (each, a "Renewal Term") if at least thirty (30)
days prior to the expiration of the Initial Renewal Term or a Renewal Term, as
the case may be, either party hereto shall not have given the other party
written notice not to renew this Agreement. The Initial Term, together with any
Initial Renewal Term and all Renewal Terms, if any, is referred to herein as the
"Term." Nothing in this Agreement shall be construed to require either party
hereto to renew this Agreement and either party hereto has the sole discretion
not to renew this Agreement.
3. Duties. During the Term, the Executive shall be employed at
the offices of the Company in Los Angeles, California, or such other office of
the Company as may be selected by the Executive, and shall serve as and have the
title of the Executive Chairman, Co-Founder and Chief Technology Officer of the
Company reporting directly to the Board, and shall have all duties and
responsibilities customarily associated with such positions, including duties
determined by the Board and appropriate for persons in such positions, as
limited or expanded pursuant to this Agreement. The Executive shall also serve
as Chairman of the Board. The Executive shall devote substantially all of his
working time and effort during normal business hours to the business and affairs
of the Company, and shall use his reasonable best efforts to perform his duties
and responsibilities hereunder faithfully and efficiently. Notwithstanding the
foregoing, the Executive may devote a portion of his working time and effort
during normal business hours to charitable activities, the management of his
investments, other business activities that do not compete with the Business,
and to such other matters as the Executive may determine, so long as such
activities do not prevent the Executive from performing his duties hereunder.
4. Compensation. For services rendered by the Executive during
the Term pursuant to this Agreement, the Company shall pay or award compensation
to the Executive as follows:
(a) Base Compensation. The Company shall pay to the
Executive a base salary ("Base Compensation") of $235,000 per annum, payable in
accordance with the Company's customary payroll practices for its officers. The
amount of Base Compensation shall be reviewed by the Board annually; provided,
however, that Base Compensation may not be decreased.
(b) Bonus Compensation. In addition to the Base
Compensation, the Board of Directors of the Company (or the Compensation
Committee of the Board) may in its discretion award the Executive a performance
bonus (the "Performance Bonus") in cash or stock options commensurate with the
Executive's performance as Executive Chairman. An Executive Committee, comprised
of the Executive chairman, Chief Executive Officer, President and Chief
Financial Officer of the Company, the purpose of which, in part, will be to
create a Management Compensation Incentive Program in which the Executive and
other management personnel will be participants, will be formed. The Management
Compensation Incentive Program will be administered by the Compensation
Committee of the Board of Directors.
(c) Withholding. The Company shall deduct and
withhold from the compensation payable to the Executive hereunder any and all
applicable federal, state and local income and employment withholding taxes and
any other amounts required to be deducted or withheld by the Company under
applicable statute or regulation.
5. Additional Benefits.
(a) Fringe Benefits; Reimbursement; Vacation. In
addition to Base Compensation and Performance Bonus provided for in Section 4
above, in connection with the Executive's employment by the Company, the
Executive shall be entitled to receive:
(i) all fringe benefits customarily offered by
the Company to its senior executive officers, including without limitation,
expense accounts, participation in any Company stock compensation plan and the
various employee benefit plans or programs (collectively, the "Benefit Plans")
provided to the employees of the Company in general, subject to the eligibility
requirements with respect to each such Benefit Plan, and to such other benefits
or perquisites as may be approved by the Board during the Term;
(ii) reimbursement from the Company for all
customary, ordinary and necessary business expenses incurred by the Executive in
the performance of his duties and responsibilities hereunder;
(iii) four (4) weeks' paid vacation benefits, or
such greater amount as may be available under the Company's vacation policy in
effect for its senior executive officers, which may not be carried over to the
following year;
(iv) annual membership in professional or
business organizations (not to include country clubs or social clubs) reasonably
requested by Executive, and approved by the Compensation Committee, in an amount
up to $10,000 per year;
(v) use of the automobile currently provided by
Digital;
(vi) use of up-to-date computer equipment and
facsimile machine for Executive's home office and connectivity to the Company's
offices and the Internet; and
(vii) continuation of the Executive's current
health plan until such time as the Company has a health plan substantially
equivalent to Executive's current health plan.
6. Termination of Employment.
(a) Termination. Except as otherwise provided in this
Agreement, the Executive's employment by the Company hereunder shall terminate
upon the earliest to occur of the dates specified below (as applicable, the
"Termination Date"):
(i) The close of business on the date of
expiration of the Term.
(ii) The close of business on the date of the
Executive's death ("Death").
(iii) The close of business on the date
specified as the effective date of termination of the Executive's employment in
a "Notice of Termination" (as defined below) delivered by the Company to the
Executive due to the Executive's "Disability" (as defined below). For purposes
of this Agreement, the term "Disability" shall mean the inability or incapacity
of the Executive, due to any medically determined physical or mental impairment,
to perform his duties and responsibilities for the Company for a total of one
hundred eighty (180) calendar days in any consecutive twelve (12) month period
during the Term, that has been verified in a written opinion from a physician.
(iv) The close of business on the date specified
as the effective date of termination of the Executive's employment by the
Executive in a Notice of Termination delivered by the Executive to the Company
(a "Voluntary Termination").
(v) The close of business on the date specified
as the effective date of termination of the Executive's employment by the
Company for "Cause" (as defined below) in a Notice of Termination delivered by
the Company to the Executive. For purposes of this Agreement, the term "Cause"
shall mean termination based on
(A) the Executive's material breach of
this Agreement which, if capable of cure, is not cured fully within thirty (30)
days after written notice from the Board to the Executive identifying such
breach, provided, that such thirty (30)-day period shall be extended to sixty
(60) days if such breach is not reasonably susceptible to cure within thirty
(30) days and the Executive shall have commenced to cure within such thirty (30)
day period and is then proceeding with due diligence to cure such breach;
(B) conviction of the Executive for (x)
any crime constituting a felony in the jurisdiction in which committed, (y) any
crime involving moral turpitude (whether or not a felony) or (z) any other
criminal act against the Company involving dishonesty whether or not a felony or
willful misconduct intended to injure the Company;
(C) substance abuse (including
drunkenness) by the Executive which is repeated after written notice from the
Board to the Executive identifying such abuse;
(D) the failure or the refusal of the
Executive to follow lawful and proper directives of the Board, which is not
corrected within thirty (30) days after written notice from the Board to the
Executive identifying such failure or refusal;
(E) willful malfeasance or gross
misconduct by the Executive which discredits or damages the Company; or
(F) conviction of the Executive for a
violation of the federal securities laws.
(vi) The close of business on the date specified
as the effective date of termination of the Executive's employment by the
Company other than for Death, Disability or Cause in a Notice of Termination
delivered by the Company to the Executive.
(b) Notice of Termination. Any termination of the
Executive's employment hereunder (other than termination as a result of Death)
by the Company or by the Executive shall be communicated by a Notice of
Termination to the other party hereto given in accordance with the provisions of
Section 10(b) below. For purposes of this Agreement, a "Notice of Termination"
shall mean a written notice which (i) indicates the specific termination
provision in this Agreement relied upon, and (ii) if applicable, sets forth the
facts and circumstances claimed to provide a basis for termination of the
Executive's employment, including, in the case of a Voluntary Termination,
whether such Voluntary Termination constitutes a "Constructive Voluntary
Termination" (as defined below).
7. Payment Upon Termination of Employment.
(a) Voluntary Termination, Termination for Cause or
Expiration of Term. If the Executive's employment is terminated pursuant to a
Voluntary Termination, a termination for Cause or the expiration of the Term,
then, without limiting any other rights or remedies available to the Company at
law or in equity, the Company shall pay or provide to the Executive, his legal
representatives, heirs, eligible dependents, if any, or permitted assigns, as
applicable,
(i) on the Termination Date, all Base
Compensation earned but unpaid as of the Termination Date; and
(ii) all benefits to which such persons may be
entitled under any of the Benefit Plans which provide for benefits after
termination of employment, in accordance with the terms thereof or as otherwise
required by law.
(b) Other Terminations. Subject to the provisions of
Section 7(c) below, if the Executive's employment is terminated other than
pursuant to a Voluntary Termination, a termination for Cause or the expiration
of the Term:
(i) the Company shall pay to the Executive, his
legal representatives, heirs or permitted assigns, on the Termination Date, all
Base Compensation (in the event of Disability, less any disability payments made
to Executive pursuant to a Company disability plan or policy, and Performance
Bonus (other than the Performance Bonus, if any, for the fiscal year in which
the Termination Date occurs, the payment of which is governed by clause (iv) of
this Section 7(b)) earned but unpaid as of the Termination Date;
(ii) during the period beginning on the
Termination Date and extending until the date this Agreement otherwise would
have terminated had the employment of the Executive not been earlier terminated
(such period is referred to herein as the "Remaining Term"), the Company shall
provide to the Executive, his legal representatives, heirs, eligible dependents,
if any, or permitted assigns, as applicable, all benefits to which such persons
may be entitled under any of the Benefit Plans, and specifically, without
limitation, shall provide the Executive and his eligible dependents, if any,
with life, disability, accident and group health insurance benefits
substantially similar to those which the Executive and his dependents were
receiving immediately prior to the Notice of Termination, provided that the
Executive or his legal representatives, heir or permitted assigns pay the
regular premium required of active employees for such coverage, and provided
further that following the expiration of the Remaining Term, the Executive shall
be eligible to purchase health insurance benefits in accordance with applicable
federal law;
(iii) during the Remaining Term, the Company
shall pay the Executive the Base Compensation that would have been payable had
the Executive's employment not been terminated, and such Base Compensation shall
be payable in accordance with the Company's customary payroll practices for its
officers, less the amount, if any, of monthly disability income paid to the
Executive pursuant to any Company-sponsored long-term disability plan;
(iv) on the Termination Date the Company shall
pay to the Executive, his legal representatives, heirs or permitted assigns, a
pro-rata portion of his Performance Bonus for such fiscal year (the "Pro Rata
Bonus"), such payment to be made within thirty (30) days following the date on
which a bonus is declared in which the Executive would have participated but for
his termination; and
(v) all stock options, warrants, rights and
other Company stock-related awards granted to the Executive by the Company
(collectively, the "Stock Awards") that otherwise would have vested and become
exercisable during the Remaining Term, shall become upon the Termination Date
fully vested and nonforfeitable, all restrictions (except for restrictions
required by law), if any, thereon shall lapse, all performance goals, if any,
associated therewith shall be deemed met in full, and the Executive shall be
entitled to exercise any or all such Stock Awards in accordance with the terms
of the documentation pursuant to which such Stock Awards were granted (as such
Stock Awards are amended by this clause (v)).
Notwithstanding any other provision of this Agreement to the contrary,
the Executive shall not be required to mitigate the amount of any payment
provided for in this Section 7(b) by seeking other employment or otherwise, and
the amount of any payment provided for in this Section 7(b) shall not be reduced
by any compensation earned by the Executive as a result of his employment by
another employer after the Termination Date or otherwise.
(c) Termination Following the Effective Date or a
Change in Control. Notwithstanding any other provision of this Agreement to the
contrary, if within six (6) months following the Effective Date or a "Change in
Control" (as defined below) of the Company, as applicable, the employment of the
Executive terminates pursuant to a "Constructive Involuntary Termination" (as
defined below), the Executive shall be entitled to the compensation and benefits
described in Section 7(b) above (including the vesting of Stock Awards and the
proration of a Performance Bonus) as if the Executive's employment had been
terminated other than pursuant to a Voluntary Termination, a termination for
Cause or the expiration of the Term, during the period beginning on the date of
termination by the Executive and extending through the Remaining Term.
Notwithstanding any other provision of this Agreement to the contrary, the
Executive shall not be required to mitigate the amount of any payment provided
for in this Section 7(c) by seeking other employment or otherwise, and the
amount of any payment provided for in this Section 7(c) shall not be reduced by
any compensation earned by the Executive as a result of his employment by
another employer after the Termination Date or otherwise.
For purposes of this Section 7(c), the following terms shall have the following
meanings:
(i) "Change in Control" shall mean and be
determined to have occurred if (i) any person (as such term is used in Sections
13(b) and 14(b) of the Securities Exchange Act of 1934, as amended) (the
"Exchange Act") is or becomes the beneficial owner (as defined in Rule 13d-3
promulgated under the Exchange Act), directly or indirectly, of securities of
the Company representing 40% or more of the combined voting power of the then
outstanding securities of the Company; (ii) during any period of twenty-four
(24) months, a majority of the members of the Board who are elected by the
holders of the Company's Common Stock are replaced by directors who were not
nominated and approved by the directors previously elected by such holders of
the Common Stock; (iii) the Company, or substantially all of the assets of the
Company on a consolidated basis, shall be combined with or acquired by another
company, entity or individual; or (iv) a majority of the members of the Board
are represented by, or appointed by or affiliated with, any person (as such term
is used in Sections 13(b) and 14(b) of the Exchange Act) whom the Board has
determined is seeking to effect a Change in Control of the Company of the type
described in clauses (i), (ii) or (iii) of this definition.
(ii) "Constructive Involuntary Termination"
shall mean voluntary termination of employment by the Executive as a result of a
significant reduction or adverse change in the duties, responsibilities,
reporting relationship, job description, compensation, perquisites, office or
location of employment of the Executive without the written consent of the
Executive, which is not cured fully within thirty (30) days after written notice
from Executive to the Board identifying such significant reduction or adverse
change, provided, that such thirty (30) day period shall be extended to sixty
(60) days if such significant reduction or adverse change is not reasonably
susceptible to cause within thirty (30) days and the Company shall have
commenced care within such thirty (30) day period and is then proceeding with
due diligence to cure such breach.
(d) Exclusive Payments. The payments upon termination
made by the Company to the Executive pursuant to Sections 7(b) and (c) above
shall constitute the exclusive payments due to the Executive upon termination
under this Agreement.
(e) The Board of Directors of the Company have
approved this Agreement and the Company shall submit to the shareholders of the
Company for approval any payments to be made hereunder that would be parachute
payments (as defined in Section 280G of the Internal Revenue Code) to the extent
such approval avoids the characterization of such payments as excess parachute
payments. Notwithstanding any such submission for shareholder approval, or if
such approval is not obtained, if any payments required under this Agreement are
not deductible by the Company as a result of Section 280G of the Internal
Revenue Code, and any regulations thereunder (or any successor statute or
regulation), then such amounts will be reduced to the extent the payments will
be deductible by the Company.
8. Executive Covenants.
(a) Unauthorized Disclosure. The Executive agrees and
understands that due to the Executive's position with the Company and Digital,
the Executive has been and will be exposed to, and will receive confidential and
proprietary information relating to the businesses of Digital and the Company,
including but not limited to technical information, computer software (including
source and object code data and related documentation), research and development
results, know-how, product information, formulae, processes, business and
marketing plans, strategies, customer information, other information concerning
the Company's and Digital's products promotions, development, financing,
expansion plans, business policies and practices (collectively, the "Trade
Secrets"). The Executive agrees that during the Term and at all times thereafter
the Executive will keep such Trade Secrets confidential and will not disclose
such Trade Secrets, either directly or indirectly, to any third person or entity
without the prior written consent of the Company. This confidentiality covenant
has no geographical or territorial restriction. On the Termination Date, the
Executive promptly will return to the Company such Trade Secrets. Disclosure of
Trade Secrets by the Executive shall not be construed to be unauthorized when
disclosure is made in the course of performance of the Executive's duties and
responsibilities, in the course of employment, in compliance with instructions
of the Board, in compliance with law, or as may be required by the government.
Notwithstanding the foregoing the Executive's obligation of
confidentiality shall not apply to any information, whether or not it is within
the meaning of Trade Secret, if such information (i) were known to the Executive
prior to his employment by Digital, or (ii) were or become generally available
to the public other than as a result of a disclosure by the Executive in
violation of the provisions of this Section 8(a), or (iii) were or is disclosed
to third parties by the Company without the obligation of confidentiality,
except in connection with the Business of the Company.
(b) Prohibited and Competitive Activities. The
Executive and the Company recognize that due to the nature of the Executive's
engagement hereunder and the relationship of the Executive to the Company,
subsequent to the Effective Date, the Executive will have access to, and will
acquire, and may assist in developing Trade Secrets. The Executive acknowledges
that Trade Secrets will be of central importance to the Company and its
affiliates and that disclosure of it to, or its use by, others could cause
substantial loss to the Company. If the disclosure by the Executive is not
within the exceptions enumerated in the Section 8(a) above, the Executive
accordingly agrees as follows:
(i) Prohibited Activities. The Executive will
not at any time during the Term and at all times thereafter, other than in the
course of his employment, disclose or furnish to any other person or, directly
or indirectly, use for his own account or the account of any other person, any
Trade Secrets, and he shall retain all such Trade Secrets in trust for the
benefit of the Company, its affiliates and the successors and assigns;
(ii) Non-Competition. By and in consideration of
the Company's entering into this Agreement and providing the compensation and
benefits to be provided by the Company to the Executive, and further in
consideration of the Executive's continued exposure to Trade Secrets, the
Executive agrees that he will not, from the Effective Date until the Termination
Date, engage in any "Competitive Activity" as defined below. For purposes of
this Agreement, the term "Competitive Activity" shall mean engaging in any of
the following activities: (A) serving as a director of any "Competitor" (as
defined below); (B) directly or indirectly through one or more intermediaries,
either (x) controlling any Competitor or (y) owning any equity or debt interests
in any Competitor (other than equity or debt interests which are publicly traded
and, at the time of any acquisition, when combined with other holdings, do not
exceed 5% of the particular class of interests outstanding) (it being understood
that, if interests in any Competitor are owned by an investment vehicle or other
entity in which the Executive owns an equity interest, a portion of the
interests in such Competitor owned by such entity shall be attributed to the
Executive, such portion determined by applying the percentage of the equity
interest in such entity owned by the Executive to the interests in such
Competitor owned by such entity); (C) employment by (including serving as an
officer or partner of), providing consulting services to (including, without
limitation, as an independent contractor), or managing or operating the business
or affairs of, any Competitor; or (D) participating in the ownership,
management, operation or control of or being connected in any manner with any
Competitor. For purposes of this Agreement, the term "Competitor" shall mean any
person (other than the Company or any wholly-owned subsidiary of the Company)
that engages in the Business (as determined at the time of termination of
employment) at the time of determination, in any "Restricted Area" (as defined
below) in competition with the Company. For purposes of this Agreement, the term
"Restricted Area" shall mean the United States and any territory thereof.
(iii) In the event of termination of Executive's
employment hereunder pursuant to a Voluntary Termination (other than in
connection with a Constructive Involuntary Termination) or for Cause, the
Executive agrees that he will not, from the Termination Date to the scheduled
expiration of the Term, engage in any Competitive Activity;
(iv) In the event of termination of Executive's
employment hereunder for any reason (other than a termination by the Company
prior to expiration of the then current term, which termination is not pursuant
to Section 6(a)(ii) or 6(a)(v) hereof), the Company shall have the option to
extend the obligation of the Executive not to engage in any Competitive Activity
for a period of twelve (12) months beyond the Termination Date (or twelve (12)
months beyond the scheduled expiration of the Term if Executive is subject to
(iii) above) by payment to Executive of Executive's Base Compensation and
providing to Executive the benefits to be provided to Executive hereunder, all
in accordance with the terms of this Agreement.
(v) Inventions and Patents. Executive
acknowledges that all inventions, innovations, improvements, developments,
methods, designs, analyses, drawings, reports and all similar or related
information, if patentable, which relate to the Business and which are made by
Executive while employed by the Company or Digital ("Work Product") belong to
the Company.
(vi) Non-solicitation. The Executive agrees that
during the Term and for a period of three (3) years thereafter, Executive shall
not directly through another entity (i) induce or attempt to induce any key
employee of the Company to leave the employ of the Company, or in any way
interfere with the relationship between the Company and any employee thereof, or
(ii) induce or attempt to induce any customer, supplier, licensee, licensor,
franchisee or other business relation of the Company to cease doing business
with the Company, or in any way interfere with the relationship between any such
customer, supplier, licensee or business relation and the Company. For purposes
of this Agreement, a customer, supplier, licensee, licensor, franchisee or
business relation means any person or entity which at the time of determination
is, or has been within two (2) years prior to such time, a customer, supplier,
licensee, licensor, franchisee or business relation of the Company or Digital.
9. Miscellaneous.
(a) In connection with the Merger, and at all times
thereafter, Executive shall have all right, title and interest in and to the
name Digital Evolution and any marks related thereto; provided, however, for the
six (6) month period following the Merger, Executive does hereby grant to the
Company an exclusive (as to third parties and Executive), royalty-free license
to use, and to continue any existing use of, the name Digital Evolution and any
variations thereof and marks related thereto.
(b) Binding Effect; Assignment. Except as otherwise
provided herein, the terms and conditions of this Agreement shall inure to the
benefit of and be binding upon the respective successors and assigns of the
parties. Nothing in this Agreement, express or implied, is intended to confer
upon any party other than the parties hereto or their respective successors and
assigns any rights, remedies, obligations, or liabilities under or by reason of
this Agreement, except as expressly provided in this Agreement. The Executive,
or any beneficiary or legal representative of the Executive, shall not assign
all or any portion of the Executive's rights or obligations under this Agreement
without the prior written consent of the Company.
(c) Notices. Any notice, request, instruction or
other document to be given hereunder by any party to any other party shall be in
writing and shall be deemed to have been given (i) if mailed with the United
States Postal Service by prepaid, first class, certified mail, return receipt
requested, at the time of receipt by the intended recipient, or (ii) if sent by
facsimile transmission, when so sent and receipt acknowledged by an appropriate
telephone or facsimile receipt (followed by a hard copy mailed in accordance
with clause (i) of this Section 9(c)) addressed as follows:
If to the Company, addressed to:
U.S. Interactive, Inc.
0 Xxxxx Xxxxxx Xxxxxxx
Xxxxx 000
Xxxxxxx, XX 00000
Telecopier: (000) 000-0000
Attn: Chief Executive Officers
If to the Executive:
Xx. Xxxx Xxxxxx
0000 Xxxxxxxx Xxxxxx
Xxxxx Xxxxxx, Xxxxxxxxxx 00000
or such other address as may be given from time to time under the terms of this
notice provision.
(d) Entire Agreement. This Agreement and the
documents referred to herein constitute the entire agreement among the parties
and no party shall be liable or bound to any other party in any manner by any
warranties, representations, or covenants except as specifically set forth
herein or therein.
(e) Amendments and Waivers. This Agreement may not be
amended except by an instrument in writing signed on behalf of each of the
parties hereto. No amendment or waiver may be charged against a party without
that party's prior written consent. Any amendment or waiver effected in
accordance with this paragraph shall be binding upon each transferee of any
party hereto.
(f) Titles and Subtitles. The titles and subtitles
used in this Agreement are used for convenience only and are not to be
considered in construing or interpreting this Agreement.
(g) Counterparts. This Agreement may be executed in
one or more counterparts, all of which shall be considered one and the same
agreement and each of which shall be deemed an original.
(h) Severability. If one or more provisions of this
Agreement are held to be unenforceable under applicable law, such provision
shall be excluded from this Agreement and the balance of this Agreement shall be
interpreted as if such provision were so excluded and shall be enforceable in
accordance with its terms.
(i) Governing Law. This Agreement shall be governed
by and construed under the laws of the state of incorporation of the Company as
applied to agreements among residents entered into and to be performed entirely
within such state.
(j) Mediation and Arbitration. Any dispute (except
for disputes with respect to the Executive's obligations under Section 8 hereof)
which may arise between the parties hereto as to the construction,
interpretation or effect of this Agreement which is not resolved by mutual
agreement between the parties, shall first be submitted to nonbinding mediation
on terms and conditions to be mutually agreed upon by the parties. In the event
that a dispute is not resolved by nonbinding mediation, the disputing party may
give the other party notice of such party's intention to cause the same to be
submitted to arbitration. After fifteen (15) days have elapsed from the giving
of such notice, but not before such time, the party who gave such notice may
cause any such dispute which then remains unresolved to be submitted to
arbitration by submitting the same to the office of the American Arbitration
Association (the "AAA") acting in the state of incorporation of the Company as
determined by the Company (or any successor thereto, but if no organization is
then performing a function reasonably similar to the AAA, then to a court of
competent jurisdiction in accordance with the rules of such court) with a
request for arbitration to be conducted in accordance with the rules thereof by
one (1) arbitrator to be jointly selected by the parties. The Company shall pay
the reasonable travel expenses of the Executive to attend the arbitration
hearing. The prevailing party's expenses, including without limitation
attorneys' fees, in connection with such arbitration shall be borne by the
losing party; provided, however, that if liability is allocated by the
arbitrator between the parties, the expenses of such arbitration, including
without limitation the parties' attorneys' fees, shall be borne by the parties
in proportion to their respective percentages or proportions of liability
assessed by the arbitrator. The decision of the arbitrator as to all matters
properly submitted to such arbitrator and as to the apportionment of expenses of
arbitration shall be conclusive and binding upon the parties and judgment upon
any award may be entered in any court of competent jurisdiction.
[END OF PAGE]
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first written above.
U.S. INTERACTIVE, INC.
By: /s/ Xxxxx X. Xxxxx
-----------------------
/s/ Xxxx Xxxxxx
---------------------------
Name: Xxxx Xxxxxx
