EMPLOYMENT AGREEMENT
WHEREAS,
Pursuant to a Stock Purchase Agreement dated November 14, 2007 (“Purchase
Agreement”),
All
Ad Acquisition, Inc., a Delaware corporation (“Company”),
has
agreed to purchase (“Purchase”)
100%
of the shares of Ad Authority, Inc., a Delaware corporation from Iakona, Inc.,
a
California corporation;
WHEREAS,
contingent on and effective as of the closing of the Purchase (“Effective
Date”)
the
Company desires to employ Xxxxx X. Xxxxx (“Executive”),
and
the Executive desires to be employed by the Company, on the terms and conditions
set forth herein;
WHEREAS,
the
Company’s Board of Directors (the “Board”)
has
approved and authorized the entry into this Agreement with the
Executive.
NOW
THEREFORE,
in
consideration of the mutual covenants contained in this Agreement, the Company
and the Executive agree that the Executive shall be employed by the Company
in
accordance with the following terms and conditions:
1. Duties
and Scope of Employment.
a. Position
and Duties.
As of
the Effective Date, the Executive will serve as Chief Executive Officer
(“CEO”)
of the
Company. The Executive shall render such business and professional services
in
the performance of his duties as the CEO of the Company, consistent with the
Executive’s position within the Company, as shall reasonably be assigned to him
by the Board. The Executive shall report to the Board. Executive’s place of work
shall be San Diego, California.
b. Obligations.
During
the Executive’s employment with the Company (the “Employment
Period”),
the
Executive shall perform his duties faithfully and to the best of his ability
and
shall devote his full business efforts and time to the Company. The Executive
is
permitted to engage in (i) civic and charitable organization activities that
do
not materially interfere with his responsibilities to the Company; (ii)
membership on the board of directors and advisory board of companies (and
activities related thereto) that are not in competition with the Company; and
(iii) personal and family investments to the extent that the time so spent
does
not interfere with Executive’s duties to the Company. For the duration of the
Executive’s employment with the Company, the Executive agrees not to engage in
any other employment, occupation or consulting activity, whether or not for
compensation, which is in competition with the Company.
2. Term.
The
term of employment under this Agreement (the “Initial
Term”)
begins
at the Effective Date and extends for two (2) years. This Agreement may be
renewed for such time as the parties agree (a “Renewal Term”). The Initial Term
plus any Renewal Term then in effect are the term of this Agreement (the
“Employment Term”). The Employment Term may be terminated early as provided in
this Agreement.
3. Compensation.
a. Base
Salary.
The
Company shall pay the Executive an annual salary of $240,000 as compensation
for
the Executive’s services (the “Base
Salary”).
The
amount of the Base Salary will be reviewed annually during the Employment Term
by the Board, and may be increased by the Board. The Base Salary shall be paid
periodically in accordance with the Company’s normal payroll practices and shall
be subject to all required withholding and any payroll deductions elected by
the
Executive.
b. Performance
Bonus.
The
Executive shall receive a performance bonus, for each calendar year in the
amount of 10% of earnings before interest, taxes, depreciation and amortization
of the Company and all consolidated businesses calculated pursuant to generally
accepted principles and in a manner consistent with Company’s past practices
(the “Performance
Bonus”).
Such
Performance Bonus is deemed earned at the end of the calendar year and shall
be
payable, if at all, within sixty (60) days of the end of the calendar
year.
c. Stock
Awards.
The
Company agrees to adopt an equity incentive plan reasonably approved by
Executive within 90 days after the Closing and award equity compensation to
Employee on a basis that is no less favorable than that received by similarly
situated officers, directors and employees of the Company.
d. Benefits.
The
Executive will be entitled to participate in or receive any fringe benefit,
retirement, health and welfare, and other employee benefit plans, policies,
or
arrangements maintained by the Company for its senior management employees
in
effect from time to time which the Executive is eligible to participate, subject
to the applicable terms and conditions of the particular benefit plan or policy
and/or the determination of the Board, as applicable.
e. Vacation.
During
the Employment Period, the Executive will be entitled to four (4) weeks of
paid
vacation per year in accordance with the Company’s vacation policy, with the
timing and duration of specific vacations mutually and reasonably agreed to
by
the Board and the Executive.
4. Expenses.
During
the Employment Period, the Company will reimburse the Executive for reasonable
travel, entertainment or other expenses incurred by the Executive in the
furtherance of or in connection with the performance of the Executive’s duties
hereunder, in accordance with the Company’s expense reimbursement policy as in
effect from time to time, including, without limitation, business class travel
for all flights over two (2) hours, provision of use of a reasonable automobile
for business purposes (along with gas, insurance and maintenance thereon) and
a
portable telephone, Blackberry or similar device (along with all access and
use
charges). Executive shall be reimbursed for the full cost of first class air
travel for flights up to two hours or train travel on Company
business.
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5. Severance.
a. Termination
not for Cause or for Good Reason.
If the
Executive’s employment is terminated by the Company without Cause (as defined in
Section 6 below) or if the Executive terminates his employment for Good Reason
(as defined in Section 6 below), then, (1) Executive’s non-competition
obligations shall be limited as provided in the Purchase Agreement and set
forth
in the Non-Competition Agreement; and (2) contingent, in each case, upon the
Executive entering into a waiver of release and claims in favor of the Company
in substantially the form as attached hereto as Exhibit A, the Executive shall
be entitled to receive:
(i) a
one-time lump sum payment in an amount equal to the aggregate of twelve (12)
months of the Executive’s then current Base Salary and two times (1) the greater
of Executive’s Performance Bonus for the year of termination or (2) the largest
bonus paid to Executive over the past three (3) years;
(ii) reimbursement
for any premiums for health (i.e., medical, vision and dental) coverage and
benefits that the Executive qualifies for under COBRA; provided, however, that
(x) the Executive constitutes a qualified beneficiary, as defined in Section
4980B(g)(1) of the Code; and (y) the Executive elects continuation coverage
pursuant to COBRA, within the time period prescribed pursuant to COBRA. The
Company shall continue to provide the Executive with health coverage until
the
earliest of (x) the date the Executive is no longer eligible to receive
continuation coverage pursuant to COBRA, (y) eighteen (18) months from the
termination date or (z) the date on which the Executive obtains comparable
health coverage. The Executive shall notify the Company promptly after the
Executive obtains alternative health coverage and the Company shall determine,
in its sole discretion, if such health coverage is comparable; and
(iii) immediately
upon such termination, all stock options or other stock-based awards granted
by
the Company to the Executive that are outstanding and, if applicable,
unexercised shall become vested and exercisable as to one hundred percent (100%)
of the shares subject to each such option (in addition to any shares subject
to
the options that are vested at the time of the termination of employment);
with
respect to any awards of stock subject to a right of repurchase by the Company
(or its successor) one hundred percent (100%) of the shares subject to each
such
award shall have such repurchase rights lapse (in addition to any repurchase
rights that have lapsed prior to the termination of employment). All outstanding
options shall remain exercisable for three (3) years from the date of
termination. Any options shall remain exercisable for the remainder of their
maximum term.
b. Voluntary
Termination; Termination for Cause.
If the
Executive’s employment with the Company terminates voluntarily by the Executive
(other than a termination for Good Reason) or for Cause by the Company, then
all
payments of compensation by the Company to the Executive hereunder other than
that set forth in subsection (a)(iii) above will terminate immediately upon
the
effective date of such termination (except as provided in Section 5(d)
below).
c. [Intentionally
deleted].
d. Accrued
Wages and Vacation; Expenses.
Without
regard to the reason for, or the timing of, the Executive’s termination of
employment: (i) the Company shall pay the Executive any unpaid Base Salary
due
for periods prior to the date of termination; (ii) the Company shall pay the
Executive all of the Executive's accrued and unused vacation through the date
of
termination; and (iii) following submission of proper expense reports by the
Executive, the Company shall reimburse the Executive for all expenses reasonably
and necessarily incurred by the Executive in connection with the business of
the
Company prior to the date of termination. These payments shall be made promptly
upon termination and within the period of time mandated by law.
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3 -
6. Definitions.
a. Cause.
For
purposes of this Agreement, “Cause” means any of the following that are not
“cured” within thirty (30) days after receipt of written notice from Company
specifying such breach or default and the specific steps necessary to cure
such
breach or default: (i) the Executive’s willful failure to perform his material
duties as an officer or employee of the Company or a material breach of a
material term of this Agreement; (ii) the commission of an act of fraud,
embezzlement or material dishonesty that results in substantial personal
enrichment to the Executive; (iii) the Executive’s conviction of, or plea of
nobo contendere to a felony; (iv) the Executive’s gross negligence or breach of
fiduciary duty that results in material harm to the Company; (v) the material
breach of a material term of the Non-Competition/Non-Solication and Proprietary
Inventions and Assignment Agreements (attached as Exhibits hereto) or (vi)
the
commission of an act which constitutes competition with the Company or any
of
its affiliates.
b. Change
in Control.
For
purposes of this Agreement, “Change in Control” shall mean the occurrence of any
of the following events:
(i) the
date
on which any “person” (as such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended (the “Exchange
Act”))
obtains “beneficial ownership” (as defined in Rule 13d-3 of the Exchange Act) or
a pecuniary interest in fifty percent (50%) or more of the combined voting
power
of the Company’s then outstanding securities (“Voting
Stock”);
(ii) the
consummation of a merger, consolidation, reorganization, or similar transaction
other than a transaction: (1) in which substantially all of the holders of
the
Voting Stock hold or receive directly or indirectly fifty percent (50%) or
more
of the Voting Stock of the resulting entity or a parent company thereof, in
substantially the same proportions as their ownership of the Company immediately
prior to the transaction; or (2) in which the holders of the Company’s capital
stock immediately before such transaction will, immediately after such
transaction, hold as a group on a fully diluted basis the ability to elect
at
least a majority of the directors of the surviving corporation (or a parent
company); or
(iii) there
is
consummated a sale, lease, exclusive license, or other disposition by Company
of
all or substantially all of the consolidated assets of the Company and its
affiliates, other than a sale, lease, license, or other or other disposition
by
Company of all or substantially all of the consolidated assets of the Company
and its affiliates to an entity, fifty percent (50%) or more of the combined
voting power of the voting securities of which are owned by stockholders of
the
Company in substantially the same proportions as their ownership of the Company
immediately prior to such sale, lease, license, or other or other disposition
by
Company.
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c. COBRA.
For
purposes of this Agreement, “COBRA” means the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended.
d. Code.
For
purposes of this Agreement, the “Code” means the Internal Revenue Code of 1986,
as amended.
e. Good
Reason.
For
purposes of this Agreement, “Good Reason” means (i) without the Executive’s
express written consent, a reduction of the Executive’s duties, position or
responsibilities relative to the Executive’s duties, position or
responsibilities in effect immediately prior to such reduction, or the removal
of the Executive from such position, duties and responsibilities, unless the
Executive is provided with comparable duties, position and responsibilities;
for
purposes of clarification, a reduction in duties, position or responsibilities
solely by virtue of the Company being acquired and made part of a larger entity
(as, for example, when the Chief Executive Officer of the Company remains as
such following a Change in Control but is not made the Chief Executive Officer
of the acquiring entity or, if applicable, its parent) shall constitute “Good
Reason,” (ii) without the Executive’s express written consent, a reduction from
the immediately preceding year of the Executive’s Base Salary (other than a
reduction effected in connection with an across-the-board reduction in the
compensation of the Company’s executive management team necessitated by the
business or financial condition of the Company where the reduction to the
Executive is no worse than the median percentage reduction to other executives),
(iii) a relocation of the Executive more than thirty (30) miles from his then
current principal place of business, or (iv) the failure of the Company to
require any successor to the Company to assume, in writing, the obligations
of
the Company to the Executive under this Agreement and any other agreement
between the Company and the Executive then in effect; (v) Company’s or Buyers
(as defined in the Purchase Agreement) breach that is not timely cured of this
Agreement, the Purchase Agreement or any other written or oral agreement with
Executive; or (vi) Executive’s death or disability.
7. Board
Membership.
The
Executive’s membership on the Board shall continue during his employment with
the Company and, by execution of this Agreement, the Executive agrees to tender
the Executive’s resignation from the Board, contingent and effective upon the
termination of his employment with the Company.
8. Restrictive
Covenants.
The
Executive agrees to execute the Proprietary Interests and Inventions Agreement,
Arbitration Agreement and Non-Competition/Non-Solicitation Agreement attached
hereto as Exhibits B, C and D, respectively.
9. Limitation
on Payments.
a. In
the
event that the severance and other benefits provided for in this Agreement
or
otherwise payable to the Executive (i) constitute “parachute payments” within
the meaning of Section 280G of the Code, and (ii) would be subject to the excise
tax imposed by Section 4999 of the Code (the “Excise
Tax”),
then,
the Executive's benefits under this Agreement shall be either:
(i) delivered
in full, or
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(ii) delivered
as to such lesser extent which would result in no portion of such benefits
being
subject to the Excise Tax (the “Adjusted
Amount”),
whichever of the foregoing amounts, taking into account the applicable federal,
state and local income taxes and the Excise Tax, results in the receipt by
the
Executive on an after-tax basis, of the greatest amount of benefits,
notwithstanding that all or some portion of such benefits may be taxable under
Section 4999 of the Code.
b. Unless
the Company and the Executive otherwise agree in writing, any determination
required under this Section shall be made in writing by a mutually agreed
independent public accounting firm or other independent third party (the
“Accountants”),
whose
determination in accordance with subsection 9.c. shall be conclusive and binding
upon the Executive and the Company for all purposes. The Company shall bear
all
costs the Accountants may reasonably incur in connection with any calculations
and opinions contemplated by this Section 9.
c. For
purposes of making the calculations required by this Section, the Accountants
may make reasonable assumptions and approximations concerning applicable taxes
and may rely on reasonable, good faith interpretations concerning the
application of Section 280G and 4999 of the Code. The Company and the Executive
shall furnish to the Accountants such information and documents as the
Accountants may reasonably request in order to make a determination under this
Section. The Accountants shall provide their calculations, together with
detailed supporting documentation, to the Company and the Executive at least
fifteen (15) calendar days before the date on which the Executive’s right to
benefits pursuant to this Agreement is triggered (if requested at that time
by
the Company or the Executive at least 30 days before such event) or such other
time as mutually agreed by the Company and the Executive. If the Accountants
determine that no Excise Tax is payable with respect to the benefits provided
pursuant to this Agreement, either before or after the application of the
Adjusted Amount, it shall furnish the Company and the Executive with an opinion
reasonably acceptable to the Executive that no Excise Tax will be imposed with
respect to such benefits and payments. Any good faith determinations of the
Accountants made hereunder shall be final, binding and conclusive upon the
Company and the Executive.
10. Section
409A.
a. Amendment.
It is
the Company’s intention that the benefits and rights to which the Executive
could become entitled to in connection with this Agreement, including any
termination of employment, comply with Section 409A of the Code. If the
Executive or the Company believes, at any time, that any such benefit or right
does not comply, it will promptly advise the other and both parties will
negotiate reasonably and in good faith to amend the terms of this Agreement
so
that it complies with Section 409A of the Code in the manner that has the most
limited possible economic effect on the Executive.
b. Actions.
The
Company will not take any action that would expose any payment or benefit to
the
Executive to accelerated or additional tax under Section 409A of the Code,
unless (i) the Company is obligated to take the action under an agreement,
plan
or arrangement to which the Executive is a party; (ii) the Executive requests
the action; (iii) the Company advises the Executive in writing that the action
may result in the imposition of accelerated or additional tax under Section
409A
of the Code and the Executive subsequently requests in writing that the action
be taken. The Company will hold the Executive harmless for any action it may
take in violation of this paragraph, including any attorney’s fees that the
Executive may
incur
in enforcing his rights hereto.
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11. Assignment.
This
Agreement will be binding upon and inure to the benefit of (a) the heirs,
executors and legal representatives of the Executive upon the Executive’s death
or disability and (b) any successor of the Company. Any such successor of the
Company will be deemed substituted for the Company under the terms of this
Agreement for all purposes. For this purpose, “successor” means any person,
firm, corporation or other business entity that at any time, whether by
purchase, merger or otherwise, directly or indirectly acquires all or
substantially all of the assets or business of the Company and expressly assumes
all of Company’s obligations hereunder. None of the rights of the Executive to
receive any form of compensation payable or any obligations of the Executive
pursuant to this Agreement may be assigned or transferred, except, with respect
to compensation, by will or the laws of descent and distribution. Any other
attempted assignment, transfer, conveyance or other disposition of the
Executive’s right to compensation or other benefits shall be null and
void.
12. Notices.
All
notices, requests, demands and other communications called for hereunder shall
be in writing and shall be deemed given (i) on the date of delivery if delivered
personally, (ii) one (1) day after being sent by a well established commercial
overnight service, or (iii) four (4) days after being mailed by registered
or
certified mail, return receipt requested, prepaid and addressed to the parties
or their successors at the following addresses, or at such other addresses
as
the parties may later designate in writing:
If
to the
Company:
All
Ad
Acquisition, Inc.
c/x
Xxxxxx Capital Partners, LLP
000
Xxxxxxxxx Xxxxxx, Xxx. 000
Xxx
Xxxx,
Xxx Xxxx 00000
Attention:
Xxxxxxx Xxxx
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
Xxxxxxxxx
Xxxxxxx
MetLife
Building
000
Xxxx
Xxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attention:
Xxxxxx Xxxxx, Shareholder
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
E-mail:
xxxxxx@xxxxx.xxx Web: xxx.xxxxx.xxx
If
to the
Executive:
At
the
last residential address known by the Company.
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13. Severability.
If any
term or provision of this Agreement shall to any extent be declared illegal
or
unenforceable by arbitrator(s) or by a duly authorized court of competent
jurisdiction, then the remainder of this Agreement or the application of such
term or provision in circumstances other than those as to which it is so
declared illegal or unenforceable, shall not be affected thereby, each term
and
provision of this Agreement shall be valid and enforceable to the fullest extent
permitted by law and the illegal or unenforceable term or provision shall be
deemed replaced by a term or provision that is valid and enforceable and that
comes closest to expressing the intention of the invalid or unenforceable term
of provision.
14. Integration.
This
Agreement and the documents and agreements expressly incorporated herein by
reference represent the entire agreement and understanding between the parties
as to the subject matter herein and supersede all prior or contemporaneous
agreements whether written or oral. No waiver, alteration, or modification
of
any of the provisions of this Agreement shall be binding unless in writing
and
signed by duly authorized representatives of the parties hereto.
15. Waiver
of Breach.
Any
waiver of a breach of any term or provision of this Agreement, must be in
writing to be effective or binding on the parties and shall not operate as
or be
construed to be a waiver of any other previous or subsequent breach of this
Agreement.
16. Headings.
All
captions and section headings used in this Agreement are for convenient
reference only and do not form a part of this Agreement.
17. Withholding.
The
Company shall be entitled to withhold, or cause to withheld, from any payment
made to the Executive in respect of the Executive’s employment by the Company
any amount of, as, or on account of, withholding taxes and other amounts
required by law to be withheld, with respect to such payment.
18. Governing
Law.
This
Agreement shall be governed by the laws of the State of California (with the
exception of its conflict of laws provisions).
19. Acknowledgment.
The
Executive acknowledges that he has had the opportunity to discuss this matter
with and obtain advice from his private attorney, has had sufficient time to,
and has carefully read and fully understands all the provisions of this
Agreement, and is knowingly and voluntarily entering into this
Agreement.
20. Waiver
and Release.
Except
with respect to Company’s obligation to make salary, bonus and other payments,
distributions and reimbursements to Executive and his affiliates (including,
without limitation, Iakona, Inc., Blue Label Financial Services, Inc. and Blue
Label Funding, Inc.) that accrued prior to the Effective Date, Executive’s
rights as a shareholder of Company and Company’s statutory, contractual and
other obligations to provide indemnification to any of the persons or entities
listed above in consideration for entering this Agreement, the Executive and
the
Company, along with and for its predecessors, successors, agents, employees,
shareholders, parent and subsidiary companies, officers, directors, and assigns,
hereby release, remise, acquit, and forever discharge each other of and from
any
and all claims, demands, acts, omissions, causes of action, and/or other
liability of any kind, whether known or unknown, arising prior to the date
of
this Agreement.
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8 -
21. Counterparts.
This
Agreement may be executed in counterparts and by facsimile, and each counterpart
shall have the same force and effect as an original and shall constitute an
effective, binding agreement on the part of each of the
undersigned.
(Signature
Page Follows)
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9 -
IN
WITNESS WHEREOF, the undersigned have executed this Employment Agreement on
the
respective dates set forth below.
Parties:
ALL
AD ACQUISITION, INC.
|
EXECUTIVE
|
|||
By:
|
/s/
Xxxxxxx Xxxx
|
/s/
Xxxxx Xxxxx
|
||
Name:
|
Date:
|
|||
Title:
|
The
Executive’s Address for Notice:
|
|||
Date:
|
4-15-07
|
000
Xxxx Xxxxx
|
||
Xxx
Xxxxx, Xxxxxxxxxx 00000
|
Signature
Page of Employment Agreement
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EXHIBIT
A
RELEASE
OF CLAIMS AGREEMENT
I
understand that my employment with All Ad Acquisition, Inc. (the “Company”)
terminated effective , ____ (the “Separation Date”). The Company has agreed that
if I choose to sign this Release Agreement (“Release”), the Company will pay me
certain severance benefits (minus standard withholdings and deductions) pursuant
to the terms of the Employment Agreement between myself and the Company, dated
________ (the “Agreement”). I understand that I may not be entitled to such
benefits unless I sign this Release and it becomes fully effective. I understand
that, regardless of whether I sign this Release, the Company will pay me all
of
my accrued salary and vacation through the Separation Date, to which I am
entitled by law.
In
consideration for the severance benefits I am receiving under the Agreement,
as
described therein except with respect to Company’s obligation to make salary,
bonus and other payments, distributions and reimbursements to Executive and
his
affiliates (including, without limitation, Iakona, Inc., Blue Label Financial
Services, Inc. and Blue Label Funding, Inc.) that accrued prior to the date
hereof, Executive’s rights as a shareholder of Company and Company’s statutory,
contractual and other obligations to provide indemnification to any of the
persons or entities listed above (collectively, “Excluded Claims”), I hereby
generally and completely release the Company, its directors, officers,
employees, shareholders, partners, agents, attorneys, predecessors, successors,
parent and subsidiary entities, insurers, affiliates, and assigns from any
and
all claims, liabilities and obligations, both known and unknown, that arise
out
of or are in any way related to events, acts, conduct, or omissions occurring
prior to my signing this Agreement. This general release includes, but is not
limited to: (1) all claims arising out of or in any way related to my employment
with the Company; (2) all claims related to my compensation or benefits from
the
Company, including salary, bonuses, commissions, vacation pay, expense
reimbursements, severance pay, fringe benefits, stock awards, stock options,
or
any other ownership interests in the Company; (3) all claims for breach of
contract, wrongful termination, and breach of the implied covenant of good
faith
and fair dealing; (4) all tort claims, including claims for fraud, defamation,
emotional distress, and discharge in violation of public policy; and (5) all
federal, state, and local statutory claims, including claims for discrimination,
harassment, retaliation, attorneys’ fees, or other claims arising under the
federal Civil Rights Act of 1964 (as amended), the federal Americans with
Disabilities Act of 1990, the federal Age Discrimination in Employment Act
of
1967 (as amended) (“ADEA”), and the California Fair Employment and Housing Act
(as amended). Notwithstanding anything contained in this Release, nothing herein
shall release the parties’ rights under this Release and my right (if any) to
indemnification granted by any act or agreement of the Company, state or federal
law or policy of insurance or any claims for severance benefits under the
Agreement.
In
releasing claims unknown to me at present, except with respect to the Excluded
Claims, I am waiving all rights and benefits under Section 1542 of the
California Civil Code, and any law or legal principle of similar effect in
any
jurisdiction: “A
general release does not extend to claims which the creditor does not know
or
suspect to exist in his or her favor at the time of executing the release,
which
if known by him or her must have materially affected his or her settlement
with
the debtor.”
I
understand this Release will not be effective until the ADEA Effective Date,
defined below. I acknowledge that I am knowingly and voluntarily waiving and
releasing any rights I may have under the ADEA. I also acknowledge that the
consideration given for the waiver in the above paragraph is in addition to
anything of value to which I was already entitled. I have been advised by this
writing, as required by the ADEA that: (a) my waiver and release do not apply
to
any claims that may arise after my signing of this Release; (b) I should consult
with an attorney prior to signing this Release; (c) I have twenty-one (21)
days
within which to consider this Release (although I may choose to voluntarily
sign
this Release earlier); (d) I have seven (7) days after I sign this Release
to
revoke it; and (e) this Release will not be effective until the eighth day
after
this Release has been signed by me (the “ADEA Effective Date”).
I
accept
and agree to the terms and conditions stated above:
Date
|
Xxxxx
X. Xxxxx
|
A-2
EXHIBIT
B
PROPRIETARY
INFORMATION AND INVENTIONS AGREEMENT
The
following Agreement confirms certain terms of my employment with All Ad
Acquisition, Inc., (hereafter referred to as the “Company”), which is a material
part of the consideration for my employment by the Company and the compensation
received by me from the Company from time to time. The headings contained in
this Agreement are for convenience only, have no legal significance, and are
not
intended to change or limit this Agreement in any matter
whatsoever.
Definitions
The
“Company”
As
used
in this Agreement, the “Company” refers to All Ad Acquisition, Inc. I understand
and agree that the terms of this Agreement will continue to apply to me even
if
I transfer at some time from one subsidiary or affiliate of the Company to
another.
“Proprietary
Information”
I
understand that the Company possesses and will possess Proprietary Information
which is important to its business. For purposes of this Agreement, “Proprietary
Information” is information that was or will be developed, created, or
discovered by or on behalf of the Company, or which became or will become known
by, or was or is conveyed to, the Company, which has commercial value in the
Company’s business and which relates to any of the Company’s business
operations, products or services.
“Proprietary
Information” includes, but is not limited to information about software programs
and subroutines, source and object code, algorithms, trade secrets, designs,
technology, know-how, processes, data, ideas, techniques, inventions (whether
patentable or not), works of authorship, formulas, business and product
development plans, customer lists, terms of compensation and performance levels
of Company employees, Company customers and other information concerning the
Company’s actual or anticipated business, research or development, or which is
received in confidence by or for the Company from any other person.
I
understand that my employment creates a relationship of confidence and trust
between the Company and me with respect to Proprietary Information.
“Company
Documents and Materials”
I
understand that the Company possesses or will possess “Company Documents and
Materials” which are important to its business. For purposes of this Agreement,
“Company Documents and Materials” are documents or other media or tangible items
that contain or embody Proprietary Information or any other information
concerning the business, operations or plans of the Company, whether such
documents, media or items have been prepared by me or by others.
“Company
Documents and Materials” include, but are not limited to, blueprints, drawings,
photographs, charts, graphs, notebooks, customer lists, computer disks, tapes
or
printouts, sound recordings and other printed, typewritten or handwritten
documents, sample products, prototypes and models.
Assignment
of Rights
All
Proprietary Information and all patents, patent rights, copyrights, trade secret
rights, trademark rights and other rights (including, without limitation,
intellectual property rights) anywhere in the world in connection therewith
is
and shall be the sole property of the Company. I hereby assign to the Company
any and all rights, title and interest I may have or acquire in any Proprietary
Information that was developed in whole or in part by me in the course of my
employment by the Company.
At
all
times, both during my employment by the Company and after its termination,
I
will keep in confidence and trust and will not use or disclose any Proprietary
Information or anything relating to it without the prior written consent of
an
officer of the Company, except as may be necessary in the ordinary course of
performing my duties to the Company.
Maintenance
and Return of Company Documents and Materials
I
agree
to make and maintain adequate and current written records, in a form specified
by the Company, of all inventions, trade secrets and works of authorship
assigned from me or to be assigned to the Company pursuant to this Agreement.
All Company Documents and Materials are and shall be the sole property of the
Company.
I
agree
that during my employment by the Company, I will not remove any Company
Documents and Materials from the business premises of the Company or deliver
any
Company Documents and Materials to any person or entity outside the Company,
except as I am required to do in connection with performing the duties of my
employment. I further agree that, immediately upon the termination of my
employment by me or by the Company for any reason, or during my employment
if so
requested by the Company, I will return all Company Documents and Materials,
apparatus, equipment and other physical property, or any reproduction of such
property, excepting only (i) my personal copies of records relating to my
compensation; (ii) my personal copies of any materials previously distributed
generally to Employees of the Company; and (iii) my copy of this
Agreement.
Disclosure
of Inventions to the Company
I
will
promptly disclose in writing to my immediate supervisor or to such other person
designated by the Company all “Inventions,” which includes, without limitation,
all software programs or subroutines, source or object code, algorithms,
improvements, inventions, works of authorship, trade secrets, technology,
designs, formulas, ideas, processes, techniques, know-how and data, whether
or
not patentable, made or discovered or conceived or reduced to practice or
developed by me, either alone or jointly with others, during the term of my
employment which relate to any of the Company’s business operations, products or
services.
B-2
I
will
also disclose to the President of the Company all Inventions made, discovered,
conceived, reduced to practice, or developed by me within six (6) months after
the termination of my employment with the Company which resulted, in whole
or in
part, from my prior employment by the Company. Such disclosures shall be
received by the Company in confidence (to the extent such Inventions are not
assigned to the Company pursuant to Section (E) below) and do not extend the
assignment made in Section (E) below.
Right
to
New Ideas
Assignment
of Inventions to the Company
I
agree
that all Inventions which I make, discover, conceive, reduce to practice or
develop (in whole or in part, either alone or jointly with others) during my
employment shall be the sole property of the Company to the maximum extent
permitted by Section 2870 of the California Labor Code or any like statute
of
any other state. Section 2870 provides as follows:
Any
provision in an employment agreement which provides that an employee shall
assign, or offer to assign, any of his or her rights in an invention to his
or
her employer shall not apply to an invention that the employee developed
entirely on his or her own time without using the employer’s equipment,
supplies, facilities, or trade secret information except for those inventions
that either:
(1)
|
Relate
at the time of conception or reduction to practice of the invention
to the
employer’s business, or actual or demonstrably anticipated research or
development of the employer.
|
(2)
|
Result
from any work performed by the employee for his
employer.
|
To
the
extent a provision in an employment agreement purports to require an employee
to
assign an invention otherwise excluded from being required to be assigned under
subdivision (a), the provision is against the public policy of this state and
is
unenforceable.
This
assignment shall not extend to Inventions, the assignment of which is prohibited
by Labor
Code
Section
2870.
Works
Made for Hire
The
Company shall be the sole owner of all patents, patent rights, copyrights,
trade
secret rights, trademark rights and all other intellectual property or other
rights in connection with Inventions. I further acknowledge and agree that
such
Inventions, including, without limitation, any computer programs, programming
documentation, and other works of authorship, are “works made for hire” for
purposes of the Company’s rights under copyright laws. I hereby assign to the
Company any and all rights, title and interest I may have or acquire in such
Inventions. If in the course of my employment with the Company, I incorporate
into a Company product, process or machine a prior Invention owned by me or
in
which I have interest, the Company is hereby granted and shall have a
nonexclusive, royalty-free, irrevocable, perpetual, sublicensable, worldwide
license to make, have made, modify, use, market, sell and distribute such prior
Invention as part of or in connection with such product, process or
machine.
B-3
Cooperation
I
agree
to perform, during and after my employment, all acts deemed necessary or
desirable by the Company to permit and assist it, at the Company’s expense, in
further evidencing and perfecting the assignments made to the Company under
this
Agreement and in obtaining, maintaining, defending and enforcing patents, patent
rights, copyrights, trademark rights, trade secret rights or any other rights
in
connection with such Inventions and improvements thereto in any and all
countries. Such acts may include, but are not limited to, execution of documents
and assistance or cooperation in legal proceedings. I hereby irrevocably
designate and appoint the Company and its duly authorized officers and agents,
as my agents and attorney-in-fact to act for and on my behalf and instead of
me,
to execute and file any documents, applications or related findings and to do
all other lawfully permitted acts to further the purposes set forth above in
this Subsection (3), including, without limitation, the perfection of assignment
and the prosecution and issuance of patents, patent applications, copyright
applications and registrations, trademark applications and registrations or
other rights in connection with such Inventions and improvements thereto with
the same legal force and effect as if executed by me.
Assignment
or Waiver of Moral Rights
Any
assignment of copyright hereunder (and any ownership of a copyright as a work
made for hire) includes all rights of paternity, integrity, disclosure and
withdrawal and any other rights that may be known as or referred to as “moral
rights” (collectively “Moral Rights”). To the extent such Moral Rights cannot be
assigned under applicable law and to the extent the following is allowed by
the
laws in the various countries where Moral Rights exist, I hereby waive such
Moral Rights and consent to any action of the Company that would violate such
Moral Rights in the absence of such consent.
List
of
Inventions
I
have
attached hereto as Exhibit B-1, a complete list of all inventions or
improvements to which I claim ownership and that I desire to remove from the
operation of this Agreement, and I acknowledge and agree that such list is
complete. If no such list is attached to this Agreement, I represent that I
have
no such inventions or improvements at the time of signing this
Agreement.
Non-Solicitation
of Company Employees
During
the Restricted Period (as defined in the Non-Competition/Non-Solicitation
Agreement, dated November 14, 2007, by and between the Company and me), I will
not encourage or solicit any employee of the Company to leave the Company for
any reason or to accept employment with any other company. As part of this
restriction, I will not interview or provide any input to any third party
regarding any such person during the period in question. However, this
obligation shall not affect any responsibility I may have as an employee of
the
Company with respect to the bona fide hiring and firing of Company
personnel.
B-4
Company
Authorization for Publication
Prior
to
my submitting or disclosing for possible publication or dissemination outside
the Company any material prepared by me that incorporates information that
concerns the Company’s business or anticipated research, I agree to deliver a
copy of such material to an officer of the Company for his or her review. Within
twenty (20) days following such submission, the Company agrees to notify me
in
writing whether the Company believes such material contains any Proprietary
Information or Inventions, and I agree to make such deletions and revisions
as
are reasonably requested by the Company to protect its Proprietary Information
and Inventions. I further agree to obtain the written consent of the Company
prior to any review of such material by persons outside the
Company.
Former
Employer Information
I
represent that my performance of all the terms of this Agreement and as an
employee of the Company does not and will not breach any agreement to keep
in
confidence proprietary information, knowledge or data acquired by me in
confidence or in trust prior to my employment by the Company, and I will not
disclose to the Company or induce the Company to use any confidential or
proprietary information or material belonging to any previous employers or
others. I have not entered into and I agree I will not enter into any agreement,
either written or oral, in conflict herewith or in conflict with my employment
with the Company. I further agree to conform to the rules and regulations of
the
Company.
Severability
I
agree
that if one or more provisions of this Agreement are held to be unenforceable
under applicable law, such provisions shall be excluded from this Agreement
and
the balance of the Agreement shall be interpreted as if such provision were
so
excluded and shall be enforceable in accordance with its terms.
Authorization
to Notify New Employer
I
hereby
authorize the Company to notify my new employer about my rights and obligations
under this Agreement following the termination of my employment with the
Company.
Reliance
on Representations
I
understand and acknowledge that, except as set forth in this Agreement and
in
the offer letter from the Company to me, (i) no other representation or
inducement has been made to me, (ii) I have relied on my own judgment and
investigation in accepting my employment with the Company, and (iii) I have
not
relied on any representation or inducement made by any officer, employee or
representative of the Company. No modification of or amendment to this Agreement
nor any waiver of any rights under this Agreement will be effective unless
in a
writing signed by the Company’s Director of HR Acquisitions and me. I understand
and agree that any subsequent change or changes in my duties, salary or
compensation will not affect the validity or scope of this
Agreement.
B-5
Effective
Date
This
Agreement shall be effective as of the first day of my employment with the
Company and shall be binding upon me, my heirs, executor, assigns and
administrators and shall inure to the benefit of the Company, its subsidiaries,
successors and assigns. Notwithstanding any other provision hereof to the
contrary, the parties hereto acknowledge and agree that this Agreement shall
only become effective on the Closing Date (as such term is defined in the Stock
Purchase Agreement, dated November 14, 2007, by and between the Company and
me).
Governing
Law
Although
I may work for the Company outside of California or the United States, I
understand and agree that this Agreement shall be interpreted and enforced
in
accordance with the laws of the State of California.
B-6
I
HAVE
READ THIS AGREEMENT CAREFULLY AND I UNDERSTAND AND ACCEPT THE OBLIGATIONS WHICH
IT IMPOSES UPON ME WITHOUT RESERVATION. NO PROMISES OR REPRESENTATIONS HAVE
BEEN
MADE TO ME TO INDUCE ME TO SIGN THIS AGREEMENT. I SIGN THIS AGREEMENT
VOLUNTARILY AND FREELY.
Date
|
Employee
Signature
|
|
Employee
Name (Please Print)
|
[SIGNATURE
PAGE TO PROPRIETARY INFORMATION AND INVENTIONS AGREEMENT]
B-7
EXHIBIT
B-1
1.
|
The
following is a complete list of all Inventions or improvements relevant
to
the subject matter of my employment by the Company that have been
made or
discovered or conceived or first reduced to practice by me or jointly
with
others prior to my employment by the Company that I desire to remove
from
the operation of the Company’s Proprietary Information and Inventions
Agreement:
|
____ |
No
inventions or improvements.
|
____ |
See
below: Any and all inventions regarding the
following:
|
____ |
Additional
sheets attached.
|
2.
|
I
propose to bring to my employment the following materials and documents
of
a former employer: (NOTE: You do not need to list materials and documents
if the former employer has been acquired by All Ad Acquisition,
Inc.).
|
____ |
No
materials or documents
|
____ |
See
below:
|
Date
|
Employee
Signature
|
|
Employee
Name (Please Print)
|
EXHIBIT
C
ARBITRATION
AGREEMENT
This
Mutual Arbitration Agreement (“Agreement”) is entered into between All Ad
Acquisition, Inc. (“Company”) and the employee named below
(“Employee”).
Agreement
to Arbitrate Certain Disputes and Claims
We
agree
to arbitrate before a neutral arbitrator any and all disputes or claims arising
from or relating to Employee’s employment with Company, or the termination of
that employment, including claims against any current or former agent or
employee of Company, whether the disputes or claims arise in tort, contract,
or
pursuant to a statute, regulation, or ordinance now in existence or which may
in
the future be enacted or recognized, including, but not limited to, the
following claims:
· |
claims
for fraud, promissory estoppel, fraudulent inducement of contract
or
breach of contract or contractual obligation, whether such alleged
contract or obligation be oral, written, or express or implied by
fact or
law;
|
· |
claims
for wrongful termination of employment, violation of public policy
and
constructive discharge, infliction of emotional distress,
misrepresentation, interference with contract or prospective economic
advantage, defamation, unfair business practices, and any other tort
or
tort-like causes of action relating to or arising from the employment
relationship or the formation or termination
thereof;
|
· |
claims
for discrimination, harassment, or retaliation under any and all
federal,
state, or municipal statutes, regulations, or ordinances that prohibit
discrimination, harassment, or retaliation in employment, as well
as
claims for violation of any other federal, state, or municipal statute,
regulation, or ordinance, except as set forth
herein;
|
· |
claims
for non-payment or incorrect payment of wages, commissions, bonuses,
severance, employee fringe benefits, stock options and the like,
whether
such claims be pursuant to alleged express or implied contract or
obligation, equity, the California Labor Code, the Fair Labor Standards
Act, the Employee Retirement Income Securities Act, and any other
federal,
state, or municipal laws concerning wages, compensation or employee
benefits; and
|
· |
claims
arising out of or relating to the grant, exercise, vesting and/or
issuance
of equity in the Company or options to purchase equity in the
Company.
|
We
understand and agree that arbitration of the disputes and claims covered by
this
Agreement shall be the sole and exclusive method of resolving any and all
existing and future disputes or claims arising out of Employee’s employment with
Company or the termination thereof. We further understand and agree that claims
for workers’ compensation benefits, unemployment insurance, or state or federal
disability insurance are not covered by this Agreement and shall therefore
be
resolved in any appropriate forum, including courts of law, as required by
the
laws then in effect.
We
understand and agree that nothing in this Agreement shall prevent either party
from seeking from a court the remedy of an injunction for a claimed
misappropriation of a trade secret, patent right, copyright, trademark, or
any
other intellectual or confidential property. Nothing in this Agreement should
be
interpreted as restricting or prohibiting the Employee from filing a charge
or
complaint with a federal, state, or local administrative agency charged with
investigating and/or prosecuting complaints under any applicable federal, state
or municipal law or regulation. Any dispute or claim that is not resolved
through the federal, state, or local agency must be submitted to arbitration
in
accordance with this Agreement.
We
understand and agree that any demand for arbitration by either the Employee
or
Company shall be filed within the statute of limitation that is applicable
to
the claim(s) upon which arbitration is sought or required. Any failure to demand
arbitration within this time frame shall constitute a waiver of all rights
to
raise any claims in any forum arising out of any dispute that was subject to
arbitration.
Final
and
Binding Arbitration
We
understand and agree that the arbitration of disputes and claims under this
Agreement shall be instead of a trial before a court or jury. We further
understand and agree that, by accepting this Agreement, we are expressly waiving
any and all rights to a trial before a court regarding any disputes and claims
which we now have or which we may in the future have that are subject to
arbitration under this Agreement.
Arbitration
Procedures
We
understand and agree that the arbitration shall be conducted in accordance
with
the Employment Arbitration Rules and Procedures of JAMS; provided, however,
that
the Arbitrator shall allow the discovery authorized by California Code of Civil
Procedure section 1283.05 or any other discovery required by law in arbitration
proceedings and the California Rules of Evidence shall apply. A copy of the
JAMS
Employment Arbitration Rules and Procedures can be found through a link on
the
JAMS website, which is presently located at the following url:
xxxx://xxx.xxxxxxx.xxx. To the extent that any of the JAMS Employment
Arbitration Rules and Procedures or anything in this Agreement conflicts with
any arbitration procedures required by applicable law, the arbitration
procedures required by applicable law shall govern. Employee and Company also
agree that nothing in this Agreement relieves either of them from any obligation
they may have to exhaust certain administrative remedies before arbitrating
any
claims or disputes under this Agreement.
We
understand and agree that the Arbitrator shall issue a written award that sets
forth the essential findings and conclusions on which the award is based. The
Arbitrator shall have the authority to award any relief authorized by law in
connection with the asserted claims or disputes. The Arbitrator’s award shall be
subject to correction, confirmation, or vacation, as provided by any applicable
law setting forth the standard of judicial review of arbitration
awards.
Place
of
Arbitration
C-2
We
understand and agree that the arbitration shall take place in San Diego,
California, or, at the Employee’s option, the county in which the Employee
resides at the time the arbitrable dispute or claim arose.
Governing
Law
We
understand and agree that this Agreement and its validity, construction and
performance, as well as disputes and/or claims arising under this Agreement,
shall be governed by the laws of the State of California. If the Agreement
is
not enforceable under these laws, the parties agree to apply applicable federal
law.
Costs
of
Arbitration
We
understand and agree that Company will bear the arbitrator’s fee and any other
type of expense or cost that the employee would not be required to bear if
he or
she were free to bring the dispute or claim in court as well as any other
expense or cost that is unique to arbitration. Company and Employee shall each
pay their own attorneys’ fees incurred in connection with the arbitration;
provided that the arbitrator will have authority to award attorneys’ fees to the
prevailing party. If there is a dispute as to whether Company or Employee is
the
prevailing party in the arbitration, the Arbitrator will decide this
issue.
Severability
We
understand and agree that if any term or portion of this Agreement shall, for
any reason, be held to be invalid or unenforceable or to be contrary to public
policy or any law, then the remainder of this Agreement shall not be affected
by
such invalidity or unenforceability but shall remain in full force and effect,
as if the invalid or unenforceable term or portion thereof had not existed
within this Agreement.
Complete
Agreement
We
understand and agree that this Agreement contains the complete agreement between
Company and Employee regarding the subjects covered in it; that it supersedes
any and all prior representations and agreements between us, if any; and that
it
may be modified only in a writing, expressly referencing this Agreement, and
signed by the Chief Executive Officer of Company and Employee. If this
modification has not been signed by the Employee, but the Employee continues
to
accept employment after having notice of the modification, it shall become
effective after a reasonable period
Knowing
Acceptance of Agreement
We
understand and agree that we have been advised to consult with an attorney
of
our own choosing before accepting this Agreement, and we have had an opportunity
to do so. We agree that we have read this Agreement carefully and understand
that by accepting it, we are waiving all rights to a trial or hearing before
a
court or jury of any and all disputes and claims subject to arbitration under
this Agreement. It is intended that this Agreement shall at all times apply
to
Company and shall immediately apply to Employee upon signing, upon any form
of
electronic acceptance or within a reasonable time following continued
employment.
C-3
Notwithstanding
any other provision hereof to the contrary, the parties hereto acknowledge
and
agree that this Agreement shall only become effective on the Closing Date (as
such term is defined in the Stock Purchase Agreement, dated November 14, 2007,
by and between the Company and Employee).
Date
|
Employee
Signature
|
|
Employee
Name (Please Print)
|
C-4
EXHIBIT
D
NON-COMPETITION/NON-SOLICITATION
AGREEMENT
This
Non-Competition
Agreement
(this
“Agreement”),
dated
November 14, 2007, is made by and between Xxxxx X. Xxxxx (the “Employee”)
and
All Ad Acquisition, Inc. a Delaware corporation (“Acquiror”).
For
purposes of this Agreement, “Acquiror” shall be deemed to include Acquiror and
its wholly and majority-owned direct and indirect subsidiaries that operate
the
Business (as defined below) of the Company.
Background
Acquiror
and Ad Authority, Inc., a Delaware corporation (the “Company”)
are
parties to an Stock Purchase Agreement dated on or about November 14, 2007
(the
“Purchase
Agreement”),
pursuant to which Acquiror will acquire the Company (the “Purchase”).
Employee understands and agrees that he is a key and significant member of
either the management and/or the technical workforce of the Company and that
he
will receive substantial consideration as a result of Acquiror’s purchase of the
Company. Employee is willing to enter into this Agreement as a condition of
the
closing of the Purchase and to protect Acquiror’s legitimate interests as a key
employee of the Company. Employee understands and acknowledges that the
execution and delivery of this Agreement by Employee is a material inducement
to
the willingness of Acquiror to enter into the Purchase Agreement, and a material
condition to Acquiror consummating the transactions contemplated by the Purchase
Agreement. Capitalized terms used herein and not defined herein shall have
the
meanings assigned to such terms in the Purchase Agreement.
Acquiror
and Employee both agree that the Company’s business includes the design,
development, manufacture, production, marketing and sales of products and
services related to the Business (as defined below) throughout each county
or
state of the United States or country in which the Company conducted or as
of
the Closing Date (as defined in the Purchase Agreement) had developed or had
been actively developing (the “Restrictive
Territory”).
Acquiror represents and Employee understands that, following the Purchase,
Acquiror will continue conducting the Company’s business in the Restrictive
Territory.
NOW,
THEREFORE, in consideration of the foregoing premises and for good and valuable
consideration, receipt of which is hereby acknowledged, Employee, intending
to
be legally bound, agrees as follows:
1. Agreement
Not to Compete/Solicit.
During
the Restrictive Period (as defined below), Employee agrees that he will not,
as
an employee, agent, consultant, advisor, independent contractor, general
partner, officer, director, Employee, investor, lender or guarantor of any
corporation, partnership or other entity, or in any other capacity directly
or
indirectly:
(a) engage
in, have an interest in or provide advice or assistance to any internet
advertising business if at the time of the proposed activity the Company is
engaged in or as of the Closing Date of the Purchase had developed or had been
actively developing such business (hereafter referred to as the “Business”)
in the
Restrictive Territory; or
(b) permit
Employee’s name to be used in connection with a business, which is competitive
or substantially similar to the Business; or
(c) do
anything to cause or encourage any officer, director, employee, consultant,
agent or broker of the Company to terminate or sever his or her employment
or
other relationship with the Company for the purpose of competing with or
proposing to compete with the Company, or for the purpose of damaging the
Company in any way; or
(d) do
anything to cause or encourage any customer to terminate, modify or fail to
review any contract or other relationship with the Company; or
(e) (iii)
contact or otherwise act in concert with, for purposes of competing, directly
or
indirectly, or aiding another to compete, directly or indirectly, with the
Business or of damaging the Company in any way, any person that became known
to
Employee by or through the Business or whose name or business was obtained
by or
from the Company; or
(f) without
the prior written consent of Buyer, directly or indirectly, solicit for
employment or hire any current employee, agent or broker of the
Company.
Notwithstanding
the foregoing, Employee may (i) own, directly or indirectly, solely as an
investment, up to one percent (1%) of any class of “publicly traded securities”
of any business that is competitive or substantially similar to the Business
or
(ii) work for a division, entity or subgroup of any of such companies that
engages in the Business so long as such division, entity or subgroup does not
engage in the Business. The term “publicly traded securities” shall mean
securities that are traded on a national securities exchange or listed on the
National Association of Securities Dealers Automated Quotation
System.
For
purposes of this Agreement, the restrictive period (referred to herein as the
“Restrictive Period”) shall commence on the Closing Date of the Purchase and
shall continue until the third (3rd) anniversary of the Closing Date; provided,
however, that with respect to (a) through (e) above, if Employee’s employment
with the Company is terminated without “Cause” (as such term is defined in
Employee’s employment agreement with Acquiror) or by Employee for “Good Reason”
(as such term is defined in Employee’s employment agreement with Acquiror or
Company) the Restrictive Period shall end on the earlier of (i) one (1) year
after the termination of employment date and (ii) three (3) years after the
Closing Date. In the event that no Closing occurs as contemplated by the
Purchase Agreement and the Purchase Agreement thereby terminates, this Agreement
shall terminate and be of no further force or effect.
2. Acknowledgment.
Employee hereby acknowledges and agrees that:
(a) this
Agreement is necessary for the protection of the legitimate business interests
of Acquiror in acquiring the Company;
(b) the
execution and delivery and continuation in force of this Agreement is a material
inducement to Acquiror to execute the Purchase Agreement and is a mandatory
condition precedent to the closing of the Purchase, without which Acquiror
would
not close the transactions contemplated by the Purchase Agreement;
D-2
(c) the
scope
of this Agreement in time, geography and types and limitations of activities
restricted is reasonable;
(d) Employee
has no intention of competing with the Business acquired by Acquiror within
the
area and the time limits set forth in this Agreement; and
(e) breach
of
this Agreement will be such that Acquiror will not have an adequate remedy
at
law because of the unique nature of the operations and the assets being conveyed
to Acquiror.
3. Remedy.
Employee acknowledges and agrees that (a) the rights of Acquiror under this
Agreement are of a specialized and unique character and that immediate and
irreparable damage will result to Acquiror if Employee fails to or refuses
to
perform his obligations under this Agreement and (b) Acquiror may, in addition
to any other remedies and damages available, seek an injunction in a court
of
competent jurisdiction to restrain any such failure or refusal. No single
exercise of the foregoing remedies shall be deemed to exhaust Acquiror’s right
to such remedies, but the right to such remedies shall continue undiminished
and
may be exercised from time to time as often as Acquiror may elect. Employee
represents and warrants that his expertise and capabilities are such that his
obligations under this Agreement (and the enforcement thereof by injunction
or
otherwise) will not prevent him from earning a livelihood.
4. Severability.
If any
provisions of this Agreement as applied to any part or to any circumstances
shall be adjudged by a court to be invalid or unenforceable, the same shall
in
no way affect any other provision of this Agreement, the application of such
provision in any other circumstances, or the validity or enforceability of
this
Agreement. Acquiror and Employee intend this Agreement to be enforced as
written. If any provision, or part thereof, however, is held to be unenforceable
because of the duration thereof or the area covered thereby, all parties agree
that the court making such determination shall have the power to reduce the
duration and/or area of such provision, and/or to delete specific words or
phrases and in its reduced form such provision shall then be
enforceable.
5. Amendment.
This
Agreement may not be amended except by an instrument in writing signed by
Acquiror’s Senior Vice President of Human Resources, or his or her designee, and
Employee.
6. Waiver.
No
waiver of any nature, in any one or more instances, shall be deemed to be or
construed as a further or continued waiver of any breach of any other term
or
agreement contained in this Agreement.
7. Headings.
The
headings contained in this Agreement are for reference purposes only and shall
not affect in any way the meaning or interpretation of this
Agreement.
8. Governing
Law.
This
Agreement shall be construed and interpreted and its performance shall be
governed by the laws of the State of California without regard to conflicts
of
law principles of any jurisdiction.
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9. Entire
Agreement.
This
Agreement and the documents referenced herein constitutes the entire agreement
of the parties with respect to the subject matter of this Agreement and
supersedes all prior agreements and undertakings, both written and oral, between
the parties, or any of them, with respect to the subject matter of this
Agreement (but does not in any way merge or supersede the Purchase Agreement
or
any other agreement executed in connection with the Purchase Agreement,
including the Employee’s employment agreement with Acquiror, if any). To extent
that the provisions of this Agreement are ambiguous or incomplete they shall
be
construed in a manner consistent with the Purchase Agreement or other agreement
executed in connection therewith, although in the event of a conflict between
the terms of this Agreement and such other agreements, the terms of this
Agreement shall control.
IN
WITNESS WHEREOF, Acquiror and Employee have executed this Agreement on the
day
and year first above written.
Employee
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Signature
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Name
(Please Print)
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All
Ad Acquisition, Inc.
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a
Delaware corporation
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By:
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Name:
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Title:
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