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EXHIBIT 10.20
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into
this 25th day of January 1999, by and between INTERNET UNIVERSE, LLC (formerly
named Collectors Universe, LLC), a California limited liability company (the
"Company"), and XXXXX XXXXXXXXX, an individual (the "Executive").
WITNESSETH:
WHEREAS, the Company, which is wholly-owned by Professional Coin
Grading Service ("PCGS" or "Parent"), is engaged in the business of conducting
auctions, over the internet, at which it sells rare and valuable collectibles,
including, coins, stamps, comic books, movie posters, records and products and
other items that have been autographed by sports and other celebrities
(collectively, "Collectibles"); and
WHEREAS, pursuant to an Asset Acquisition Agreement of even date
herewith (the "Asset Acquisition Agreement"), PCGS has acquired a substantial
portion of the assets of Info Exchange, Inc. ("Info Exchange"), which has been
engaged in the business of developing and maintaining software and other data
needed for and used in the conduct of auctions and sales of products, including
Collectibles, over the internet; and
WHEREAS, PCGS is contributing the assets of Info Exchange to the
Company and the Company desires to employ Executive, who was the President of
Info Exchange, as its President and Chief Operating Officer, and Executive
desires to accept and serve in such position with the Company, pursuant to the
terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and the respective
covenants and agreements of each party to the other set forth herein, the
Company and the Executive, intending to be legally bound, hereby agree as
follows:
1. Employment; Appointment as a Director.
1.1 Employment. The Executive is hereby employed as the
President of the Company, and the Executive accepts such employment, on the
terms and conditions set forth in this Agreement. In that position, Executive
shall be responsible for (i) developing and maintaining the software and other
proprietary data and techniques required to establish, operate and maintain
separate internet websites (each of which shall sometimes be referred to
hereinafter as a "Universe") through which the Company or PCGS will be able to
operate and manage auctions of and to sell Collectibles and other products and
to provide services to the public over the internet, and (ii) performing such
other duties as are assigned to Executive by the Chairman of the Company (the
"Chairman") or by the Managers of the Company (the "Management Committee").
During the Executive's employment hereunder, Executive agrees that:
(a) He shall devote his full business time and all of
his skills and efforts to the diligent and timely performance of the foregoing
responsibilities and such other duties as shall be assigned to him from time to
time by the Chairman or the Management Committee; and
(b) He shall not serve as an officer, director,
employee, consultant or advisor to any other business or otherwise engage in any
business activities; provided, however, that the Executive may serve as a
director of another corporation so long as (i) such corporation does not
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compete, directly or indirectly, with the Company or any of its Affiliates (as
defined in Subsection 11.8 hereof), (ii) such services do not adversely affect
Executive's ability to perform his duties under this Agreement, and (iii) such
service is first approved by the Management Committee of the Company. Executive
hereby represents and warrants that he is under no contractual commitments
(written or oral) that are inconsistent with his obligations set forth in this
Agreement, including, but not limited to, any non-competition, trade secret or
confidentiality agreements. Without limiting the generality of the foregoing,
Executive represents that none of the information that he needs or will use in
performing his duties hereunder belongs to any other person or entity.
1.2 Directorship. Executive also shall be appointed as a
director to serve on the Board of Directors of PCGS, effective beginning as of
January 4, 1999 and continuing until such time as a successor is elected to the
PCGS Board of Directors. Executive shall not be entitled to any compensation for
his services as a member of the PCGS Board of Directors.
2. Term. The term of this Agreement and Executive's employment
hereunder shall be approximately three (3) years, commencing on January 4, 1999
(the "Employment Commencement Date") and ending on December 31, 2001; provided,
however, that this Agreement and Executive's employment hereunder shall be
subject to earlier termination as provided in Section 7 hereof.
3. Compensation.
3.1 Base Salary. As compensation for all services to be
rendered by Executive to the Company, or any of its Affiliates, whether under
this Agreement or otherwise, the Company shall pay to the Executive a base
salary of One Hundred Twenty Thousand Dollars ($120,000) each year during the
term of this Agreement (the "Annual Base Salary"). The Annual Base Salary shall
be paid in periodic installments on a regular basis in accordance with the
Company's normal payroll procedures and policies.
3.2 Incentive Compensation. Executive shall become entitled,
upon commencement of his employment, to earn bonus compensation on the following
terms and conditions:
(a) 1999 Bonus. Executive shall be entitled to
receive a cash bonus of $60,000 if, during the calendar year ending December 31,
1999, the Company is able to establish and operate at least ten (10) fully
functional website Universes, at least five of which must be "Major Universes"
and the other five shall be "Minor Universes" (as such terms are hereinafter
defined).
(i) The Major Universes may consist of
separate Universes for the auctioning and sale of (A) coins, (B)
stamps, (C) sports cards and sports memorabilia, (D) products and items
autographed by (sports, music, performing arts and other) celebrities,
(E) comic books and other collectibles as mutually agreed. To qualify
as a fully functional Major Universe, a Universe must (x) have
average gross revenues (whether from sales or advertising) of at least
five thousand dollars ($5,000) per week and at least one thousand
(1,000) different customers each day, for at least 4 consecutive weeks
during any 4 weeks of calendar 1999, and (y) contain functional
content, that includes at least a price guide and editorials that are
accessible to and usable by PCGS, the Company and such customers.
(ii) The requirement of at least five (5)
fully functional Minor Universes will be deemed to have been satisfied
if at least five (5) Universes, in addition to the five Major
Universes, have been established and are operational for the sale of
other collectible products or items over the internet, each such
additional Universe contains functional content that includes a price
guide and editorials that are accessible to and usable by PCGS, the
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Company and such customers and, for at least two (2) consecutive weeks
during any 4 weeks of calendar 1999: (A) those additional Universes
generate aggregate gross revenues $15,000 (whether from sales or
advertising) per week, (B) each such additional Universe has at least
one hundred (100) different customers per day and (C) all of such
additional Universes have, in the aggregate, at least 2,500 different
customers per day.
(b) Subsequent Year Bonuses. For services rendered in
calendar year 2000 and 2001, Executive shall have the opportunity to earn
bonuses equal to as much as fifty percent (50%) of his Annual Base Salary for
such year based on the achievement of overall profitability goals established
for the Company by its Management Committee. Achievement of such goals will be
determined by reference to the financial statements of the Company for each of
such calendar years and, if earned, shall be payable within fifteen (15) days
following the final determination that such goals have been achieved.
(c) It shall be a condition precedent to the payment
of any annual bonus pursuant to this Section 3.2 that Executive shall have be
employed with the Company or any parent corporation or subsidiary of PCGS or of
the Company for the entire calendar year, to and including the last day of such
year, and Executive shall not be entitled to receive a partial or pro-rated
bonus for any partial year of employment hereunder.
3.3 Participation in Fringe Benefit Programs. During his
employment with the Company, the Executive shall be entitled to participate in
all employee benefit plans or programs (including vacation time, sick leave and
holidays, but excluding any incentive or bonus compensation plans or programs
other than those described in Section 3.2 above) generally available to all
employees of Company, to the extent that his position, title, tenure, salary,
age, health and other qualifications make him eligible to participate therein.
The Executive's participation in any such plan or program shall be subject to
the provisions, rules and regulations thereof that are generally applicable to
all participants therein.
3.4 Expense Reimbursement. In accordance with Company's
policies established from time to time, the Company will pay or reimburse
Executive for all reasonable and necessary out-of-pocket expenses incurred by
him in the performance of his duties under this Agreement, subject to the
presentment to Company of reports and receipts identifying the amounts and
business purposes of such expenses and the payees thereof.
3.5 Moving Expenses. The Company shall pay Executive the sum
of $10,000 to defray the costs of moving his personal residence to Orange
County, California.
3.6 Stock Options. Effective as of January 22, 1999, Executive
shall be granted employee stock options to purchase (i) 675 shares of PCGS
common stock at an exercise price of $600 per share and (ii) an additional 500
shares of PCGS common stock at an exercise price of $1,200 per share pursuant to
and on the terms and conditions contained in the form of Stock Option Agreement
attached hereto as Exhibit A.
4. Confidential Information and Company Property.
4.1 Confidential Information. Unless the Management Committee
expressly agrees to the contrary in writing, during the term of this Agreement
and at all times thereafter Executive shall hold in strict confidence and shall
not disclose to any person or entity, and Executive shall not use, other than
for the sole benefit of the Company and PCGS, any Confidential Information of
the Company or of PCGS. For purposes hereof, "Confidential Information of the
Company or PCGS" shall mean any (i)
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financial statements or other financial information or data (historical or
prospective) of or relating to Company, PCGS or any Affiliate or customer of
Company or PCGS that has not been publicly disclosed by the owner of such
information, (ii) the Proprietary Assets (as defined in the Asset Acquisition
Agreement) and any improvements or enhancements thereto; (iii) software used in
the business of the Company or that of PCGS (iv) manufacturing or marketing data
and any other information relating to any technique, process, formula, software,
developmental or experimental work, work in progress, business methods or trade
secrets, (v) information relating to customers or clients of the Company, PCGS
or any of their respective Affiliates (including, without limitation, any
customer or client list or lists of customer or client sources), (vi) business
or marketing plans of the Company or PCGS, and (v) any other proprietary,
confidential or secret information belonging or relating to the Company, PCGS or
any of its Affiliates or any of their products or services or other business
activities. The foregoing restrictions with respect to the disclosure of
Confidential Information shall not apply to (x) information which is or becomes,
other than as a result of a breach of this Agreement, generally available to the
public, or (y) the disclosure of information required pursuant to a subpoena or
other legal process; provided that the Executive shall notify the Company, in
writing, of the receipt of any such subpoena or other legal process requiring
such disclosure immediately after receipt thereof and the Company shall have a
reasonable opportunity to quash such subpoena or other legal process or to
obtain appropriate protective orders prior to any disclosure by the Executive.
4.2 Other Company Property. Upon termination of his employment
for any reason whatsoever, Executive shall promptly return and deliver to the
Company (i) all documents, records, notebooks, work papers and all similar
repositories containing any information belonging to or concerning the Company,
PCGS or any Affiliate or any customer or supplier of Company, whether prepared
by Executive, the Company, PCGS or anyone else, including all of the Proprietary
Assets and all copies thereof, and (ii) all other property of Company or PCGS in
Executive's possession, such as but not limited to, computers, printers and
other computer accessories, telephones, pagers and other communication devices,
furniture and keys.
5. Covenants Against Actions Damaging the Company. Executive agrees
that, during the term of this Agreement or at any time thereafter, he will not
(i) make any claim that he has any right, interest or title, of any kind or
nature whatsoever, in or to any of the Proprietary Assets or any improvements or
enhancements thereto or derivative works therefrom, or in or to any products,
methods, practices, processes, discoveries, ideas, software, improvements,
enhancements, devices, creations, business plans or systems, or, subject to
applicable labor laws, inventions, relating to the business of Company, PCGS or
any Affiliate thereof, or used, developed or discovered by the Company, PCGS,
any Affiliate or by Executive at any time during his employment with Company,
PCGS or any Affiliate thereof, or (ii) disclose any of such matters to any third
party. Executive further agrees that, at the Company's request, at any time
during or after his employment with Company, he will assign to the Company all
rights that he may have to any inventions, works of authorship, software,
developments, improvements, enhancements or trade secrets or other proprietary
or intellectual property that he may have developed during the course of his
employment with Info Exchange, Inc. or which he may develop during the course of
his employment with the Company or PCGS and will execute and deliver to the
Company or PCGS such documents and instruments as the Company or PCGS may
reasonably require to evidence or effectuate such assignment. Executive further
agrees that during the term of this Agreement, and for a period of two (2) years
following the termination (for any reason) of his employment with Company he
shall not, whether for himself or on behalf of or in conjunction with any third
party, (x) hire any employee of the Company, PCGS or any Affiliate thereof, or
induce or entice any such employee to leave his employment with Company, PCGS or
any Affiliate, and (y) attempt to induce any person that, at the time of or
within the 12 months immediately preceding the termination of his employment,
was a customer of or supplier to the Company, PCGS or any of their Affiliates to
cease doing business, or to
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reduce the volume of business that such customer or supplier had been doing,
with Company, PCGS or any such Affiliate.
6. Non-Competition.
6.1 Executive agrees that he will not engage, either directly
or indirectly, in any Competitive Activities (as hereinafter defined) at any
time during the term of this Agreement.
6.2 In addition, if Executive's employment is terminated
without Cause pursuant to Paragraph 7.2 hereof, and Executive engages in any
Competitive Activities, or breaches any of his obligations under Sections 4 or 5
of this Agreement, at any time during the Severance Period (as hereinafter
defined in Section 8.2 below), then, Executive's right to receive Severance
Compensation, and any other amounts under this Agreement (including any amounts
otherwise payable under Section 8 hereof), shall terminate automatically and
without the necessity of any further action on the part of the Company or
Executive.
6.3 For purposes of this Section 6, Executive shall be deemed
to be engaged in "Competitive Activities" in violation of this Agreement if he
engages, either directly or indirectly, in or participates or provides any
assistance (financial or advisory or other and whether as employee, employer,
consultant, agent, principal, partner, stockholder, lender, officer, director,
manager, or in any other representative capacity) in or to any person,
corporation, or other business entity that engages or is proposing to engage in,
any business or business activities that compete with or are substantially
similar to the business or business activities of the Company or PCGS, or any of
their Affiliates, in any city or county within the United States in which the
Company or PCGS or any of their Affiliates is engaging and continues to engage
in its business. Notwithstanding the foregoing, however, Executive's ownership
of up to one percent (1%) of the outstanding shares of any class of equity
securities of any corporation that are listed for trading on the New York or
American Stock Exchanges or on the NASDAQ Stock Market shall not constitute a
breach of this Section 6.
6.4 In furtherance and not in limitation of the foregoing
provisions of this Section 6, should the duration or geographical extent of, or
business activities covered by any provision of this Section 6, or any of the
provisions of Sections 4 or 5 of this Agreement, be in excess of that which is
valid and enforceable under applicable law, then such provision shall be
construed to cover only the maximum duration, extent or activities which may
validly and enforceably covered under applicable law. The Executive acknowledges
the uncertainty of the law in this respect and expressly stipulates that such
provisions shall be given the construction which renders its provisions valid
and enforceable to the maximum extent (not exceeding its express terms) possible
under applicable law.
7. Termination Prior to Expiration of the Term.
7.1 Terminations Other than without Cause.
(a) Disability. Executive's employment shall
terminate immediately, without notice, upon the Executive's becoming totally
disabled. For purposes of this Agreement, the term "totally disabled" or "total
disability" means an inability of Executive, due to a physical or mental
illness, injury or impairment, to perform a substantial portion of his duties
for a period of 120 or more consecutive days, or for an aggregate of 180 days
(whether or not consecutive) in any 12-month period, as determined by Company's
Management Committee.
(b) Death of Executive. Executive's employment shall
terminate immediately, without notice, upon the death of Executive.
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(c) Termination for Cause. The Company may terminate
Executive's employment at any time for "Cause" (as hereinafter defined)
immediately upon written notice to Executive. For purposes hereof "Cause" shall
exist and the Company shall be entitled to terminate Executive's employment
pursuant to this Section 7.1(c), if:
(i) Executive has committed a material
breach of his duty of loyalty to Company or PCGS or has violated any
conflict of interest policy of PCGS or the Company; or
(ii) Executive has committed an act or has
failed to act, where such act or failure to act constitutes intentional
misconduct, a reckless disregard of the consequences of such act or
failure to act, or gross carelessness by Executive; or
(iii) Executive has committed, or is charged
with the commission of, an act that, under applicable law or government
regulations, could be held to constitute the commission of a felony, or
the commission of a misdemeanor involving moral turpitude, or could
subject the Company, PCGS or any Affiliate to civil or criminal
penalties or fines or civil liabilities; or
(iv) Executive commits a breach of any of
his covenants contained in any of Sections 4, 5 or 6 hereof; or
(v) Executive commits any other breach of
this Agreement, or of any duties assigned to Executive by the Chairman
or Management Committee, which is willful on the part of Executive, or
Executive habitually neglects his duties under this Agreement, and
fails to cure such breach or neglect of duties within fifteen (15) days
following written notice thereof from the Management Committee or if
there are more than two (2) instances of any such breach or of any
habitual neglect of duties in any period of 12 consecutive months, even
if remedied within a period of fifteen (15) days after notice thereof
from the Management Committee.
7.2 Termination Without Cause. The Company may terminate
Executive's employment for any reason, other than one of the reasons enumerated
in Paragraphs 7.1(a), 7.1(b) or 7.1(c) hereof, or for no reason whatsoever, at
any time effective upon written notice to Executive. Any such termination
pursuant to this Section 7.2 shall constitute a "termination without Cause" to
which Subsection 8.2 hereof shall be applicable. In the event that the Company
commits a material breach of this Agreement and fails to cure such breach within
thirty (30) days of its receipt of a written notice from Executive specifying
the nature of such breach, Executive's sole right and remedy shall be (i) to
terminate this Agreement effective on ten (10) days' prior written notice to the
Company, and (ii) to receive the compensation set forth in Subsection 8.2
hereof, to the same extent as if such breach by the Company constituted a
termination of Executive's employment by the Company without Cause.
8. Compensation upon the Termination of the Executive's Employment by
the Company.
8.1 Termination due to Disability or Death or for Cause. In
the event that the Executive ceases to be employed by the Company by reason of
the termination of Executive's employment by the Company pursuant to Paragraph
7.1(a), Paragraph 7.1(b) or Paragraph 7.1(c) above, then, he shall not be
entitled to any compensation, nor shall the Company have any obligation to pay
any sum or have any liability to Executive whether as compensation for his
services or as a result of such termination of employment, or otherwise, other
than (i) the portion of his then current Base Salary which has accrued through,
but was unpaid as of, the date of such termination of employment; and (ii) if
and to the extent unpaid as of the effective date of such termination of
employment, any bonus earned for the calendar year immediately preceding the
year in which such termination occurred. Without limiting the foregoing, in the
event of a termination of Executive's employment pursuant to Paragraph 7.1(a),
Paragraph 7.1(b) or Paragraph 7.1(c), Executive shall not be deemed to have
earned and shall not be
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entitled to receive any bonus compensation for or in respect of the calendar
year in which such termination occurred.
8.2 Termination By the Company Without Cause. In the event
that Executive ceases to be employed by the Company by reason of the termination
of Executive's employment by Company without Cause pursuant to Section 7.2 above
(including a termination of Executive's employment by Executive due to a
material breach of this Agreement by the Company which goes uncured), Executive
shall not be entitled to any compensation, nor shall the Company have any
obligation to pay any sum or have any liability to Executive whether as
compensation for his services or as a result of such termination of employment,
or otherwise, other than (i) the portion of his then current Base Salary which
has accrued through, but was unpaid as of, the date of such termination of
employment, (ii) if and to the extent unpaid as of the effective date of such
termination of employment, any bonus earned for the calendar year immediately
preceding the year in which such termination occurred, and (iii) severance
payments in an aggregate amount (the "Severance Amount") equal to the lesser of
(A) one year's Annual Base Salary (as then in effect) or (B) the result obtained
by multiplying one-twelfth (1/12th) of Executive's then current Annual Base
Salary by the number of months then remaining in the term of this Agreement (the
"Severance Period"). Without limiting the foregoing, in the event of a
termination of Executive's employment pursuant to Section 7.2, Executive shall
not be deemed to have earned and shall not be entitled to receive any bonus
compensation for or in respect of the calendar year in which such termination
occurred.
8.3 Timing of Payments and Withholding. All payments required
to be made by the Company to the Executive pursuant to this Section 8,
including, but not limited to any Severance Amount that may become payable
pursuant to Section 8.2, shall be paid in accordance with the Company's normal
payroll procedures and policies and will be subject to withholding of all
applicable payroll and similar taxes required, under applicable law. In
addition, if the Executive becomes entitled to receive the Severance Amount
pursuant to Section 8.2, such Amount shall be paid during the Severance Period
in installments in the same amounts and at the same times as the installments of
his annual base salary would have been paid hereunder had he been employed by
the Company for the remainder of the term of this Agreement.
9. Assignment. This Agreement shall not be assignable, in whole or in
part, by either party without the written consent of the other party, except
that the Company may, without the consent of the Executive, assign its rights
and obligations under this Agreement to (i) PCGS, (ii) an Affiliate of the
Company or of PCGS, or (iii) to any unaffiliated corporation, firm or other
business entity with or into which the Company may merge or consolidate, or to
which the Company may sell or transfer all or substantially all of its assets.
After any such assignment by the Company, the Company shall be discharged from
all further liability hereunder and such assignee shall thereafter be deemed to
be the Company for the purposes of all provisions of this Agreement including
this Section 9.
10. Injunctive Relief. The Executive is being employed by the Company
due to his knowledge of the industry in which the Company conducts business and
his substantial experience and his record of achievement with his prior
employers within such industry. The parties acknowledge, and Executive agrees,
that for these reasons, it would be difficult to compensate the Company or PCGS
fully for the damages they would incur if Executive were to violate or breach
any of his material obligations under this Agreement, which shall include,
without limitation, the Executive's obligations under Sections 4, 5 and
Subsection 6.1 hereof. Accordingly, the Executive specifically agrees that each
of the Company and PCGS shall be entitled to temporary, preliminary and
permanent injunctive relief to halt a breach or to prevent a threatened breach
of this Agreement by Executive and to the remedy of specific enforcement of
Executive's obligations under this Agreement, without any obligation to post a
bond or cash or other security in connection therewith. Nothing herein, however,
shall diminish the right of the
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Company and the right of PCGS to claim and recover monetary damages in addition
to injunctive relief and specific performance.
11. Miscellaneous.
11.1 Governing Law. This Agreement is deemed to have been made
in the State of California, and its interpretation, its construction and the
remedies for its enforcement or breach are to be applied pursuant to, and in
accordance with, the laws of the State of California for contracts made and to
be performed in that state. In the event any party hereto is required to
initiate any legal action or proceeding to enforce its rights hereunder, such
action or proceeding shall be brought and maintained exclusively in the Superior
Court for the County of Orange, in California and each party agrees to accept,
and not to challenge, the jurisdiction of such court over the parties and the
subject matter of such action or proceeding or the convenience of the forum and
to accept and not to challenge the adequacy of service by certified or
registered mail. The prevailing party in any such action or proceeding shall be
entitled to recover its reasonable attorneys fees and disbursements, expert
witness fees and disbursements and other costs of suit from the non-prevailing
party. TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, EACH PARTY HEREBY
EXPRESSLY WAIVES ITS RIGHT TO A JURY TRIAL IN ANY SUCH ACTION OR PROCEEDING,
IRRESPECTIVE OF WHICHEVER PARTY MAY BRING ANY SUCH ACTION OR PROCEEDING.
11.2 Prior Agreements. This Agreement contains the entire
agreement of the parties relating to the subject matter hereof and supersedes
all prior or concurrent agreements and understanding with respect to such
subject matter, and the parties hereto have made no agreements, representations
or warranties relating to the subject matter of this Agreement which are not set
forth herein. Notwithstanding the foregoing, nothing in this Agreement shall
affect any of the rights of the Company or the obligations of Executive under
the Asset Acquisition Agreement or under that certain Non-Competition Agreement
of even date herewith entered into by Executive with the Company pursuant to the
Asset Acquisition Agreement (the "Non-Compete Agreement). Executive acknowledges
and agrees that he has received separate consideration for his covenants and
agreements under the Asset Acquisition Agreement and his Non-Compete Agreement
and that each of the Asset Acquisition Agreement and the Non-Compete Agreement
shall survive the execution and delivery of this Agreement and any termination
of this Agreement or Executive's employment hereunder.
11.3 Withholding Taxes. The Company may withhold from any
salary and benefits payable under this Agreement all federal, state, city or
other taxes or amounts as shall be required to be withheld pursuant to any law
or governmental regulation or ruling.
11.4 Amendments. No amendment or modification of this
Agreement shall be deemed effective unless made in writing signed by the parties
hereto.
11.5 No Waiver. No term or condition of this Agreement shall
be deemed to have been waived nor shall there be any estoppel to enforce any
provisions of this Agreement, except by a statement in writing signed by the
party against whom enforcement of the waiver or estoppel is sought. Any written
waiver shall not be deemed a continuing waiver unless specifically stated, shall
operate only as to the specific term or condition waived and shall not
constitute a waiver of such term or condition for the future or as to any act
other than that specifically waived.
11.6 Severability. If, but only to the extent that, any
provision of this Agreement shall be invalid or unenforceable, then, subject to
the provisions contained in Section 7.4 hereof, such offending provision shall
be deleted from this Agreement, but only to the extent necessary to preserve the
validity and effectiveness of this Agreement to the fullest extent permitted
under applicable law.
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11.7 Interpretation. This Agreement is the result of
arms-length negotiations between the parties hereto and no provision hereof,
because of any ambiguity found to be contained herein or otherwise, shall be
construed against a party because such party or its legal counsel was the
draftsman of that provision. Unless otherwise indicated elsewhere in this
Agreement, (a) the term "or" shall not be exclusive, (b) the term "including"
shall mean "including, but not limited to," (c) the terms "herein," "hereof,"
"hereto," "hereunder" and other terms similar to such terms shall refer to this
Agreement as a whole and not merely to the specific section, subsection,
paragraph or clause where such terms may appear.
11.8 Affiliate. As used in this Agreement, the term
"Affiliate"(when used with reference to the Company or PCGS, as the case may be)
means any corporation, association or other business entity (i) which owns or
controls more than 50% of the total voting power of the Company or PCGS (as the
case may be) or, (ii) of which more than 50% of the shares of stock or other
ownership interests entitled to vote in the election of directors, managers, or
trustees thereof is owned or controlled, directly or indirectly, by the Company
or PCGS (as the case may be), and in the case of the Company, includes PCGS.
11.9 PCGS as Third Party Beneficiary. PCGS is an intended
third party beneficiary of the covenants and agreements of Executive hereunder
and shall be entitled to enforce such covenants and agreements independently of
the Company.
11.10 Counterpart Execution. This Agreement may be executed by
facsimile and in counterparts, each of which shall be deemed an original and all
of which when taken together shall constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year set forth above.
"EXECUTIVE" INTERNET UNIVERSE, LLC
a California limited liability company
/s/ Xxxxx Xxxxxxxxx By: /s/ Xxxxx Xxxx
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XXXXX XXXXXXXXX
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