EXHIBIT 10.15
AGREEMENT
This AGREEMENT is made and entered into February 6, 2003 (this "Agreement") by
and between Arbinet-thexchange, Inc. (formerly known as Arbinet Holdings, Inc. a
Delaware corporation, the "Company") having an office at 00 Xxxxx Xxxxxx, 00xx
Xxxxx, Xxx Xxxx, XX 00000 and Xxxxxxx X. Xxxxx, an individual currently residing
at 0000 Xxxxx Xxxx Xxxxx, Xxxxxx Xxxxxxx, XX 00000 (collectively, the
"Parties").
WHEREAS, the Company and Xx. Xxxxx entered into that certain employment
agreement dated December 2nd 1999 as amended by that certain Letter Agreement
dated as of August 3, 2000 and further amended by the Amended and Restated
Employment Agreement dated February 12th 2001 (the "Prior Agreement").
WHEREAS, the Company and Xx. Xxxxx desire to replace and supersede the Prior
Agreement on the terms set forth herein.
WHEREAS, Xx. Xxxxx entered into those certain promissory notes dated February
28, 2000 and March 6, 2001 in favor of the Company and has agreed to amend the
terms of these promissory notes (the "Loan Agreements").
WHEREAS, the Board of Directors (the "Board") elected Xx. Xxxxx as the Chairman
of its Board of Directors on August 2, 2000. On October 17, 2001, the Board
elected to remove the word "Executive" from his title, in light of the
Xx. Xxxxx'x acceptance as President and CEO of Safeguard Scientifics.
NOW THEREFORE, in consideration of the mutual covenants hereinafter contained,
the Parties agree as follows:
1. Termination of Prior Agreement. The Parties agree the Prior Agreement
was terminated as of October 31, 2001 (the "Employment Termination
Date"), and Xx. Xxxxx agrees to and has provided services under the
terms described herein since the Employment Termination Date.
2. Services.
a. Position. The Company hereby retains Xx. Xxxxx to perform
business consulting services as Chairman of the Company's Board
of Directors, and Xx. Xxxxx agrees to perform such services for
the Company on the terms and conditions hereinafter set forth,
for so long as Xx. Xxxxx remains Chairman of the Company.
Chairman shall have such authority and shall perform such duties
and responsibilities as are set forth in the Company's by-laws,
are delegated by the Company's Board of Directors and are
ordinary or necessary to the position of Chairman of the Board.
b. Independent Contractor. In accordance with the mutual intentions
of the Company and Xx. Xxxxx, this Agreement establishes between
them an independent contractor relationship, and all of the
terms and conditions of this Agreement shall be interpreted in
light of that relationship. Xx. Xxxxx agrees to furnish personal
services as provided in this Agreement as an independent
contractor using Xx. Xxxxx'x own means and methods. Xx. Xxxxx is
engaged in an advisory capacity. There is no intention to create
by this Agreement an employer-employee or agency relationship.
3. Term. Xx. Xxxxx shall provide services under the terms of this Agreement
until Xx. Xxxxx'x services are terminated pursuant to Paragraph 7 below.
4. Fees. Xx. Xxxxx shall be paid a fee of Six Thousand Two Hundred Fifty
Dollars ($6,250) on the last day of each calendar month in which he
performs services under this Agreement. The fees provided for under the
terms of this paragraph shall constitute full payment for Xx. Xxxxx'x
services to the Company under this Agreement, and Xx. Xxxxx shall not
receive any additional payments for his services. Xx. Xxxxx agrees to
accept exclusive liability for the payment of all taxes and
contributions owing in either a personal or professional capacity on, or
arising out of, any of the payments made to Xx. Xxxxx under this
Agreement and the Loan Agreements with the Company and to reimburse and
indemnify the Company for such taxes or contributions or penalties that
the Company may be compelled to pay in the event that Xx. Xxxxx fails to
pay such taxes
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or contributions. Xx. Xxxxx also agrees to comply with all valid
administrative regulations respecting the assumption of liability for
such taxes and contributions.
5. Business Expenses. Xx. Xxxxx shall be reimbursed for all reasonable
expenses for travel and entertainment, provided Xx. Xxxxx shall account
for and substantiate all such expenses in accordance with Company
policies and guidelines.
6. Freedom to Contract. Xx. Xxxxx represents and warrants that he has the
right to enter into this Agreement, that he is eligible to perform the
services provided for hereunder for the Company and that no other
written or verbal agreements exist that would be in conflict with or
prevent performance of any portion of this Agreement. Xx. Xxxxx further
agrees to hold the Company harmless from any and all liability arising
out of any prior contractual obligations entered into by Xx. Xxxxx. Xx.
Xxxxx represents and warrants that he has not made and will not make any
contractual or other commitments that would conflict with or prevent his
performance of any portion of this Agreement or conflict with the full
enjoyment by the Company of the rights herein granted.
7. Termination, Notwithstanding the provisions of Paragraph 3 above, Xx.
Xxxxx'x services under this Agreement shall be terminated on the
earliest of the following dates:
a. Death. On the date of Xx. Xxxxx'x death.
b. By Notice. On the date that Xx. Xxxxx notifies Company in
writing that he wishes to terminate his services under this
Agreement.
c. By the Board. On the date that the Company's Board of Directors
notifies Xx. Xxxxx in writing of the date of termination of his
services as Chairman of the Board for any or no reason.
Following the termination of Xx. Xxxxx'x services under this Agreement,
the Company will have no further liability to Xx. Xxxxx and no further
payments will be made to Xx. Xxxxx, except: (i) the Company shall pay to
Xx. Xxxxx (or, in the case of automatic termination upon Xx. Xxxxx'x
death under subparagraph (a) above, to Xx. Xxxxx'x legal representatives
or such named beneficiaries as Xx. Xxxxx may designate from time to time
in a writing delivered to the Company) the pro rata portion of his
monthly fee for the
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relevant calendar month through the date of termination, calculated by
multiplying the Six Thousand Two Hundred Fifty Dollar ($6,250) fee by a
fraction, the numerator of which will be the number of days in the
calendar month of termination prior to termination and the denominator
of which shall be the number of days of that month; and (ii) to the
extent Xx. Xxxxx is entitled to the reimbursement of business expenses
incurred prior to termination as provided in Paragraph 5 above.
8. Restrictive Covenants.
a. Confidentiality. Xx. Xxxxx agrees that both during the term of
this Agreement and thereafter he will not disclose to any third
party or use in any way (except in furtherance of the best
interests of the Company during his performance of services
hereunder during the Agreement's term) any proprietary
information or confidential records, including without
limitation (i) the software products, programs, applications and
processes utilized by the Company (other than prepackaged "off
the shelf" products); (ii) the name and/or address of any
customer or affiliate of the Company or any information
concerning the transactions or relations of any customer, vendor
or affiliates of the Company with the Company or any of its
partners, principals, stockholders, directors, officers or
agents; (iii) any information concerning any product,
technology, or procedure employed by the Company but not
generally known to its customers, vendors or competitors, or
under development by or being tested by the Company but not at
the time offered by the Company generally to customers or
vendors; (iv) any information relating to the Company's computer
software, computer systems, pricing or marketing methods, sales
margins, cost of goods, cost of material, capital structure,
operating results, borrowing arrangements or business plans; (v)
any information which is generally regarded as confidential or
proprietary in any line of business engaged in by the Company;
(vi) any business plans, budgets, advertising or marketing
plans; (vii) any information contained in any of the Company's
written or oral policies and procedures or manuals; (viii) any
information belonging to customers, vendors or affiliates of the
Company or any other person or entity that the Company has
agreed to hold in confidence; (ix) any inventions, innovations
or improvements covered by this Agreement; and (x) all written,
graphic and other material relating
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to any of the foregoing. Xx. Xxxxx acknowledges and understands
that information that is not novel or copyrighted or patented
may nonetheless be proprietary information. The term
"proprietary information" shall not include information
generally available to the public or information that is or
becomes available to Xx. Xxxxx on a non-confidential basis from
a source other than the Company or the Company's directors,
officers, employees, partners, principals or agents (other than
as a result of a breach of any obligation of confidentiality).
Immediately upon termination of Xx. Xxxxx'x services under this
Agreement or at any other time upon the Company's request, Xx.
Xxxxx will return to the Company all personal property
(including without limitation, all files, records, documents,
lists, equipment, supplies, promotional materials, keys, phone
or credit cards and similar items and all copies thereof or
extracts therefrom) and confidential records of the Company. For
purposes of this Agreement, "confidential records" means all
correspondence, memoranda, files, manuals, books, lists,
financial, operating or marketing records, magnetic tape, or
electronic or other media or equipment of any kind.
b. No Solicitation of Employees. Xx. Xxxxx agrees that, both during
the term of this Agreement and for a period of twelve (12)
months following the termination of Xx. Xxxxx'x services under
this Agreement at any time and for any reason, Xx. Xxxxx will
not, on behalf of himself or any other person or entity directly
or indirectly solicit or attempt to solicit (i) any of the
employees (other than clerical or non-administrative employees),
agents, consultants or representatives of the Company to
terminate his, her or its relationship with the Company; or (ii)
any of the employees, agents, consultants or representatives of
the Company to become employees, agents, representatives or
consultants of any other person or entity (including Xx. Xxxxx
or any person or entity owned or controlled by Xx. Xxxxx).
c. No Solicitation of Customers. Vendors and Distributors. Xx.
Xxxxx agrees that, both during the term of this Agreement and
for a period of twelve (12) months following the termination of
this Agreement at any time and for any reason, Xx. Xxxxx will
not, on behalf of himself or any other person or entity,
directly or indirectly solicit or attempt to solicit any
customer, vendor or distributor of the Company with respect to
any product or service (i) being furnished, made, sold or
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leased by the Company, or (ii) proposed to be furnished, made,
sold or leased by the Company and which is covered in a written
proposal or business plan by the Company.
d. Non-Competition. During the term of this Agreement and for a
period of twelve (12) months following the termination of Xx.
Xxxxx'x services under this Agreement at any time and for any
reason, Xx. Xxxxx shall not, on behalf of himself or any other
person or entity, directly or indirectly (whether as officer,
director, employee, consultant, investor, lender, joint
venturer, partner, stockholder, sole proprietor or otherwise),
be employed by, perform any services for or hold any ownership
interest in any business in competition with any business
conducted by the Company or its affiliates in any jurisdiction
where the Company and/or its affiliates conduct such business as
of the date of the termination of Xx. Xxxxx'x services hereunder
(including, without limitation, any business activity or
jurisdiction which is covered by or included in a written
proposal or business plan existing as of the date of the
termination of Xx. Xxxxx'x services hereunder). The above
notwithstanding, it shall not be considered a violation of this
subparagraph (d) if Xx. Xxxxx (i) owns, for investment purposes,
up to one percent (1%) of the total outstanding equity
securities of a publicly traded company, and/or (ii) performs
services for any enterprise to the extent such services are not
performed, directly or indirectly, for a business unit of the
enterprise in competition with the Company and/or its
affiliates. The Company does not anticipate that Xx. Xxxxx'x
position as Chief Executive Officer with Safeguard Scientifics,
Inc., as that company's business is currently constituted, will
violate this restrictive covenant.
e. Enforcement. Xx. Xxxxx acknowledges and agrees that the
Company's business is of a highly competitive nature and that
the services to be provided by Xx. Xxxxx under this Agreement
are of a special, unique and extraordinary nature. Xx. Xxxxx
further acknowledges and agrees that the restrictions contained
in this Paragraph 8 are necessary to prevent the use and
disclosure of confidential information and to protect other
legitimate business interests of the Company. Xx. Xxxxx
acknowledges that all of the restrictions in this Paragraph 8
are reasonable in all
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respects, including duration, territory and scope of activity.
Xx. Xxxxx agrees that the restrictions contained in this
Paragraph 8 shall be construed as separate agreements
independent of any other provision of this Agreement or any
other agreement between Xx. Xxxxx and the Company. Xx. Xxxxx
agrees that the existence of any claim or cause of action by Xx.
Xxxxx against the Company, whether predicated on this Agreement
or otherwise, shall not constitute a defense to the enforcement
by the Company of the covenants and restrictions in this
Paragraph 8. Xx. Xxxxx agrees that the restrictive covenants
contained in this Paragraph 8 are a material part of Xx. Xxxxx'x
obligations under this Agreement for which the Company has
agreed to compensate Xx. Xxxxx as provided in this Agreement.
Xx. Xxxxx agrees that the injury the Company will suffer in the
event of the breach by Xx. Xxxxx of any clause of this Paragraph
8 will cause the Company irreparable injury that cannot be
adequately compensated by monetary damages alone. Therefore, Xx.
Xxxxx agrees that the Company, without limiting any other legal
or equitable remedies available to it, shall be entitled to
obtain equitable relief by injunction or otherwise from any
court of competent jurisdiction, including, without limitation,
injunctive relief to prevent Xx. Xxxxx'x failure to comply with
the terms and conditions of this Paragraph 8. The twelve (12)
month periods referenced in subparagraphs (b), (c) and (d) above
shall be extended on a day-for-day basis for each day during
which Xx. Xxxxx violates the provisions of subparagraphs (b),
(c) or (d) in any respect, so that Xx. Xxxxx is restricted from
engaging in the activities prohibited by subparagraphs (b), (c)
and (d) for the full twelve (12) month period.
9. Intangible Property. Xx. Xxxxx will not at any time during or after the
term of this Agreement have or claim any right, title or interest in any
trade name, trademark, patent, copyright, work for hire or other similar
rights belonging to or used by the Company and shall not have or claim
any right, title or interest in any material or matter of any sort
prepared for or used in connection with the business or promotion of the
Company, whatever Xx. Xxxxx'x involvement with such matters may have
been, and whether procured, produced, prepared, or published in whole
or in part by Xx. Xxxxx, it being the intention of the Parties that Xx.
Xxxxx shall and hereby does, recognize that the Company
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now has and shall hereafter have and retain the sole and exclusive
rights in any and all such trade names, trademarks, patents, copyrights
(all of Xx. Xxxxx'x work in this regard being a work for hire for the
Company under the copyright laws of the United States), material and
matter as described above. If any such work created by Xx. Xxxxx is not
a work made for hire under the copyright laws of the United States, then
Xx. Xxxxx hereby assigns to the Company all right, title and interest in
each such work (including without limitation all copyright rights). Xx.
Xxxxx will promptly disclose in writing to the Company any and all
inventions, innovations, or improvements (including policies,
procedures, products, improvements, software, ideas and discoveries)
conceived or made by Xx. Xxxxx, either alone or jointly with others. Xx.
Xxxxx shall cooperate fully with the Company during the term of this
Agreement and thereafter in the securing of trade name, trademark,
patent or copyright protection or other similar rights in the United
States and in foreign countries and shall give evidence and testimony
and execute and deliver to the Company all papers requested by it in
connection therewith.
10. Non-Disclosure. Except as may be required by law, neither Xx. Xxxxx nor
the Company shall disclose the financial terms of this Agreement to
persons not involved in the operation of the Company, and the Parties
shall disclose the financial terms of the Agreement to those involved in
the operation of the Company only as needed to implement the terms of
the Agreement or carry out the operations of the Company. The above
notwithstanding, the financial terms of the Agreement may be disclosed
to: (i) the Parties' attorneys, accountants, financial or tax advisors,
and any potential investors in or purchasers of the Company, provided
such persons agree not to disclose such terms of the Agreement further;
and (ii) members of Xx. Xxxxx'x immediate family, provided such family
members agree not to reveal the terms of the Agreement further.
11. Successors and Assigns. The rights and obligations of the Company under
this Agreement shall be binding on and inure to the benefit of the
Company, its successors and permitted assigns. The rights and
obligations of Xx. Xxxxx under this Agreement shall be binding on and
inure to the benefit of the heirs and legal representatives of Xx.
Xxxxx. Neither Party may assign this Agreement without the prior written
consent of the other, except that the Company may assign the Agreement
to any entity acquiring all or substantially all of the assets or the
business of the Company.
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12. Waiver or Modification. Any waiver by the Company of a breach of any
provision of this Agreement shall not operate as, or be construed to be,
a waiver of any other breach of such provision of this Agreement. The
failure of the Company to insist on strict adherence to any term of this
Agreement on one or more occasions shall not be considered a waiver or
deprive the Company of the right thereafter to insist on strict
adherence to that term or any other term of this Agreement. Neither this
Agreement nor any part of it may be waived, changed or terminated
orally, and any waiver, amendment or modification must be in writing
signed by Xx. Xxxxx and the Company's Chief Executive Officer.
13. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall, when executed, be deemed to be an
original and all of which. shall be deemed to be one and the same
instrument.
14. Choice of Law. This Agreement will be governed and construed and
enforced in accordance with the laws of the State of New York, without
regard to its conflicts of law rules. Any action to enforce this
Agreement must be brought in a court situated in the State of New York
and the Parties hereby consent to the jurisdiction of courts situated in
the State of New York.
15. Entire Agreement. This Agreement contains the entire understanding of
the Parties relating to the subject matter of this Agreement and
supersedes all other prior written or oral agreements, understandings
or arrangements between the Parties relating to the subject matter
hereof, including, without limitation, the Prior Agreement. Xx. Xxxxx
agrees and acknowledges that he has been provided with everything to
which he is entitled under the Prior Agreement, and that he will not
receive any further payments or benefits thereunder. Xx. Xxxxx
acknowledges that, in entering into this Agreement, he does not rely and
has not relied on any statements or representations not contained in
this Agreement.
16. Severability. Any term or provision of this Agreement that is
determined to be invalid or unenforceable by any court of competent
jurisdiction in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of
this Agreement
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or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction and such invalid
or unenforceable provision shall be modified by such court so that it is
enforceable to the extent permitted by applicable law.
17. Notices. All notices and other communications required or permitted to
be given under this Agreement shall be in writing and delivery shall be
deemed to have been made (i) three business days following the date
when such notice is deposited in first class mail, postage prepaid,
return receipt requested; or (ii) the business day following the date
when such notice is deposited with any nationally reputable overnight
air courier service to the Party entitled to receive the same, at the
address indicated below or at such other address as such Party shall
have specified by written notice to the other Party given in accordance
with the terms of this Paragraph 17:
If to the Company Arbinet-thexchange Inc.
00 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Chief Executive Officer
with a copy to: Arbinet-thexchange, Inc.
00 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Contract Compliance
If to Xx. Xxxxx: Xxxxxxx X. Xxxxx
0000 Xxxxx Xxxx Xxxxx
Xxxxxx Xxxxxxx, XX 00000
18. Headings. The headings of any paragraphs in this Agreement are for
reference only and shall not be used in construing the terms of this
Agreement.
19. No Third Party Beneficiaries. This Agreement does not create, and shall
not be construed as creating any rights enforceable by any person not a
Party to this Agreement.
20. Survival. The covenants, agreements, representations and warranties
contained in this Agreement shall survive the termination of Xx. Xxxxx'x
services under this Agreement at any time and for any reason.
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IN WITNESS WHEREOF, this Agreement has been executed and delivered by
the Parties as of the first date written above.
ARBINET-THEXCHANGE, INC.
By /s/ J. Xxxx Hockerneier
--------------------------------
J. Xxxx Hockerneier
President & CEO
XXXXXXX X. XXXXX
/s/ Xxxxxxx X. Xxxxx
--------------------------------
