EMPLOYMENT & NON-COMPETE AGREEMENT
This Agreement is made as of July 22, 1997, between Infodata Systems
Inc., a Virginia Corporation (the "Company"), AMBIA Corporation, a California
corporation ("AMBIA"), and Xxxx Xxxxxxxxx ("Employee"). The Company and Employee
agree as follows:
1. Employment. The Company and AMBIA agree to employ Employee and
Employee accepts such employment by the Company upon the terms and conditions
set forth in this Agreement, for the period beginning on the date of this
agreement and ending upon termination pursuant to paragraph 4 (the "Employment
Period"). During the Employment Period, employee shall serve: (a) the Company as
Vice President, West Coast Operations, and shall be responsible for (i) vertical
integration of the Company's Business into the pharmaceutical industry, and (ii)
the Company's United States consulting and integration activities west of the
Mississippi River; and (b) AMBIA as Executive Vice President, provided that and
for so long as AMBIA remains a subsidiary of the Company. Employee shall perform
his duties in California, unless the parties mutually agree in writing
otherwise.
2. Compensation and Benefits. In consideration for the valuable
services to be rendered by Employee and for his agreement not to compete against
the Company as described in paragraph 5, the Company hereby agrees that during
the two years of the Employment Period, the Company will pay employee a gross
salary at the annual rate of $110,000 per annum (the "Base Salary"). Employee's
Base Salary may be adjusted annually based on an annual performance salary
review as determined in the reasonable discretion of the Board of Directors of
the Company (the "Board"); provided, however, that employee's Base Salary may
not be adjusted to an amount which is less than the initial Base Salary amount
stated above. Employee will also be eligible for participation in the Company's
incentive compensation program, 1995 Stock Option Plan, as amended, 1997 Stock
Purchase Plan and other employee benefit and welfare benefit plans and programs
provided to other employees of the Company from time to time. The Company shall
reimburse (or pay on his behalf) reasonable expenses incurred by Employee at the
request of, or on behalf of, the Company in the performance of Employee's duties
pursuant to this Agreement and in accordance with the Company's employment
policies.
3. Services. During the Employment Period, Employee agrees to devote
his best efforts and substantially all of his business time and attention to the
business affairs of the Company (except for reasonable vacation periods subject
to the reasonable approval of the Board of reasonable periods of illness or
other incapacity). During the Employment Period, Employee agrees to render such
services as the Board may from time to time direct. During the Employment
Period, Employee agrees that he will not, except with the prior written consent
of the Board or President of the Company, become engaged in or render services
for any business other than the Business of the Company; provided, however, that
Employee may purchase or otherwise acquire up to (but not more than) five
percent (5%) of any class of securities of any enterprise (but without otherwise
actively participating in the activities of such enterprise) and up to (but not
more than one percent (1%) of any class of securities of any enterprise (but
without otherwise actively participating in the activities of such enterprise)
if such securities are listed on any national or regional securities exchange or
have been registered under Section 12(g) of the Securities Exchange Act of 1934,
as amended. Notwithstanding anything to the contrary in this Agreement, the
Board and the President of the Company hereby agree that Employee may render
services for the businesses listed on Exhibit "A" hereto so long as Employee's
services to such other businesses does not unreasonably interfere, in the
opinion of the Board of the President of the Company, with Employee's
performance of his duties to the Company or the Company's Business.
4. Termination. The Employment Period will continue from the date of
this Agreement for a period of twenty-four (24) months, unless extended by the
mutual agreement of the Company and Employee or unless terminated earlier by (a)
Employee's death or permanent disability which renders the Employee unable to
perform his duties hereunder (as determined by the provider of the Company's
disability insurance under the terms of the Company's disability insurance
policy), (b) by Employee's resignation upon prior written notice to the Company
of sixty (60) days or (c) the Board for Cause. For purpose of this paragraph
"Cause" shall mean (i) the failure or refusal of Employee to follow the lawful
directives of the Board or a designee (except due to sickness, injury or
disabilities), which directives are substantially consistent with Employee's
employment responsibilities hereunder, (ii) gross inattention to duty or any
other willful, reckless or grossly negligent act (or omission to act) by
Employee, which, in the good faith judgment of the Board, materially injures the
Company, including the failure to follow the policies and procedures of the
Company, (iii) a material breach of this Agreement by Employee, or (iv) the
commission by Employee of a felony or other crime involving moral turpitude or
the commission by Employee of an act of financial dishonesty against the
Company.
5. Noncompetition.
(a) The non-compete provisions of this paragraph 5 will apply
to Employee during the Employment Period and upon the expiration of the
Employment Period or the earlier termination of the Employment Period under
paragraphs 4(b) or 4(c) above. In the event the Employment Period is earlier
terminated without Cause, then no part of this paragraph 5 will apply to
Employee.
(b) Employee recognizes and acknowledges that by virtue of
accepting employment hereunder, Employee will acquire valuable knowledge,
enhance his professional skills and experience, and learn proprietary trade
secrets and Confidential Information (as hereinafter defined in Paragraph 6) of
the Company. In consideration of the foregoing and this employment contract,
Employee agrees that during the Employment Period and for two (2) years
thereafter (the "Non-Compete Period"), Employee will not directly or indirectly:
(i) except in connection with any duties as an
employee of the Company, divert or attempt to divert any party who is
or was an existing or prospective client, customer or supplier of AMBIA
and/or the Company within the last 28 months prior to the date of
termination from engaging in business with the Company or any of its
Affiliates, or provide any services or products to or engage in any
business that is competitive with Infodata's or AMBIA's Business;
(ii) during the one-year period immediately following
the date of termination of employment under this Agreement, solicit for
employment or encourage to leave their employment, in each case, either
as an employee, agent or representative, any person who was during the
two-year period prior to such solicitation or encouragement or is an
officer, employee, agent or representative of AMBIA or the Company;
(iii) disturb, or attempt to disturb, any business
relationship between any third party and AMBIA or the Company; or
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(iv) make any statement to any third party, including
the press or media, which is false or defamatory regarding either AMBIA
or the Company.
Employee and the Company each agree that the restraints imposed under this
paragraph 5 are reasonable and not unduly harsh or oppressive.
(c) If, at the time of enforcement of any provision of
paragraph 5(b) above, any of the provisions of this paragraph 5 shall be
determined to be invalid or unenforceable by reason of being vague or
unreasonable as to duration, area, scope of activity or otherwise, then this
paragraph shall be considered divisible (with the other provisions to remain in
full force and effect) and the invalid or unenforceable provisions shall become
and be deemed to be immediately amended to include only such time, area, scope
of activity and other restrictions, as shall be determined to be reasonable and
enforceable by the court or other body having jurisdiction over the matter, and
Employee expressly agrees that this Agreement, as so amended, shall be valid and
binding as though any invalid or unenforceable provision had not been included
herein.
(d) Since a material purpose of this Agreement is to protect
the Company's and AMBIA's investment in the Employee and to secure the benefits
of his background and general experience in the industry, the parties hereto
agree and acknowledge that money damages may not be an adequate remedy for any
breach of the provisions of this paragraph 5. Therefore, in the event of a
breach by Employee of any of the provisions of this paragraph 5, the Company,
AMBIA or their successors or assigns may, in addition to other rights and
remedies existing in their favor apply to any court of law or equity of
competent jurisdiction for specific performance and/or injunctive or other
relief in order to enforce or prevent any violations of the provisions of this
Agreement.
6. Confidential Information. Employee acknowledges that the
information, observations, data and trade secrets (collectively, "Confidential
Information") obtained by him during the course of his performance under this
Agreement concerning AMBIA's and the Company's Business are the property of the
AMBIA and/or the Company. For purposes of this Agreement, "trade secret" means
any method, program or compilation of information which is used in AMBIA's or
the Company's Business, including but not limited to: (a) techniques, plans and
materials used by either AMBIA or the Company, (b) business and marketing
methods and strategies employed by either AMBIA or the Company, (c) all computer
hardware and software developed or utilized by either AMBIA or the company in
its Business and (d) all lists of past, present or prospective clients,
customers and suppliers of either AMBIA or the Company; provided, however, that
such term shall not include any such items Employee lawfully used, owned,
possessed or developed prior to the formation of AMBIA and was using for
purposes unrelated to AMBIA's Business at any time prior to the date of this
Agreement. Employee agrees that he will not disclose to any unauthorized Person
or use for his own account any of such Confidential Information without the
Board's written consent, unless and to the extent that the aforementioned
matters becoming generally known to and available for use by the public other
than as a result of Employee's acts or omissions to act or become known to
Employee lawfully outside the scope of his employment under this Agreement.
Employee agrees to deliver to the Company at the termination of his employment,
or at any other time the Company may request, all memoranda, notes, plans,
records, reports and other documents (and copies thereof) relating to the
Business of either AMBIA or the Company which he may then possess or have under
his control.
7. Notices. Any notice provided for in this Agreement shall be in
writing and shall be either
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personally delivered, sent by overnight courier
(e.g., Federal Express) or mailed by first class certified mail, return receipt
requested, to the recipient at the address below indicated:
To the Company: Infodata Systems Inc.
00000 Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xx. Xxxxx Xxxxxxxxx, President
To Employee: Xxxx Xxxxxxxxx
00000 Xxxxxxxx Xxxxx
Xxxxxxxx, XX 00000
or such other address or to the attention of such other Person as the recipient
party shall have specified by prior written notice to the sending party. Any
notice under this Agreement will be deemed to have been given when so delivered,
sent or mailed.
8. Miscellaneous. Whenever possible, each provision of this Agreement
will be interpreted in such manner as to be effective and valid under applicable
law. The parties agree that (i) the provisions of this Agreement shall be
severable in the event that any of the provisions hereof are for any reason
whatsoever invalid, void or otherwise unenforceable, (ii) such invalid, void or
otherwise unenforceable provisions shall be automatically replaced by other
provisions which are as similar as possible in terms to such invalid, void or
otherwise unenforceable provisions but are valid and enforceable and (iii) the
remaining provisions shall remain enforceable to the fullest extent permitted by
law. This Agreement, the Merger Agreement and the other agreements and documents
executed in connection with the Merger Agreement contain the entire agreement
and understanding among the parties with respect to the subject matter hereof
and supersede and preempt any and all prior understandings, agreements or
representations by or among the parties, written or oral, which may have related
to the subject matter hereof in any way. This Agreement may be executed on
separate counterparts, each of which is deemed to be an original and all of
which taken together constitute one and the same agreement. This Agreement is
intended to bind and inure to the benefit of and benefit of and
be enforceable by Employee and the Company, and their respective successors and
assigns. Employee may not assign his rights or delegate his obligations
hereunder without the prior written consent of the Company. The Company may
assign its rights and delegate its duties hereunder without the consent of
Employee to Permitted Transferees. All questions concerning the construction,
validity and interpretation of the Agreement will be governed by the internal
law, and not the law of conflicts, of the State of California. Any provision of
this Agreement maybe amended or waived only with the prior written consent of
the Company and Employee.
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9. Definitions. "PERSON" shall mean and include an individual, a
partnership, a joint venture, a corporation, a trust, an unincorporated
organization and a governmental entity or any department or agency thereof.
"PERMITTED TRANSFEREE" shall mean (a) any successor by merger or consolidation
to the Company or any Permitted Transferee; (b) any purchaser of all or
substantially all of the Company's or any Permitted Transferee's assets; and (c)
any lender to (i) the Company, (ii) any Permitted Transferee and/or (iii) any
affiliate of the Company or of any Permitted Transferee. "BUSINESS" shall mean
with respect to either AMBIA or the Company, (i) the design, development,
installation, implementation, sale, support, maintenance, marketing and
management of electronic document management systems, including the performance
of integration services and the design, development, sale, and re-sale of
software products relating to such systems, and (ii) the design, development,
support, maintenance, sale, re-sale and integration of software products that
are being produced or are in the process of being produced, designed or
developed by either AMBIA or the Company as of the date of this Agreement.
IN WITNESS WHEREOF, the parties have executed the Agreement on the day
and year first above written.
WITNESS/ATTEST: INFODATA SYSTEMS INC.
By: /s/Xxxxx Xxxxxxxxx
----------------------- --------------------------
Xxxxx Xxxxxxxxx, President
/s/Xxxx Xxxxxxxxx
----------------------- --------------------------
Xxxx Xxxxxxxxx
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SCHEDULE A
LIST OF BUSINESSES FOR WHICH XXXX XXXXXXXXX
MAY RENDER SERVICES PURSUANT TO HIS
EMPLOYMENT AGREEMENT DATED AS OF JULY 22, 1997
ONSALE, Inc.*
Software Partners, Inc.*
*-Provided that such services do not compete with the products or services of
Infodata or AMBIA, as set forth in the Employment Agreement.
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