EXHIBIT 10.1
EMPLOYMENT AGREEMENT
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This Employment Agreement (the "Agreement") dated and effective as of
April 2, 2003 (the "Effective Date") is by and between US DATAWORKS, INC., a
Nevada corporation (the "Company"), and XXXXX X. XXXXXXXX ("Xxxxxxxx"). In
consideration of the mutual covenants and promises contained herein, the parties
agree as follows.
WHEREAS, Xxxxxxxx has been employed by the Company for a number of
years, and the services of Xxxxxxxx, his managerial and financial experience,
and his knowledge of the affairs of the Company are of great value to the
Company; and
WHEREAS, the Company deems it essential that it have the advantage of
the services of Xxxxxxxx for a period extending beyond his present employment
agreement, and desires to enter into a continuing agreement of employment with
him, and to provide Xxxxxxxx with compensation for past contributions to the
Company; and Xxxxxxxx desires to enter into such an agreement with the Company
upon the terms and conditions stated hereunder.
ARTICLE 1
GENERAL PROVISIONS
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Section 1.1 EMPLOYMENT. The Company hereby employs Xxxxxxxx, and
Xxxxxxxx accepts such employment by the Company upon the terms and conditions
hereof.
Section 1.2 TERM. Subject to earlier termination as specifically set
forth herein, the initial term of this Agreement shall be three (3) years (the
"Term") commencing on the Effective Date. The Term shall be extended
automatically without further action by either party for successive one (1) year
terms, unless either party shall have served ninety (90) days prior written
notice upon the other party that this Agreement shall terminate.
Section 1.3 TERMINATION. Xxxxxxxx'x employment and this Agreement shall
terminate upon the earliest to occur of any of the following events (the actual
date of such termination being referred to herein as the "Termination Date"):
(a) Pursuant to Section 1.2.
(b) In the event of Xxxxxxxx'x death or disability as set forth in
Section 3.8.
(c) Termination of Xxxxxxxx'x employment by the Company for cause
without any prior notice (except as specifically set forth
below), upon the occurrence of any of the following events
(each of which shall constitute "Cause"):
(i) any embezzlement or wrongful diversion of funds of
the Company or any affiliate of the Company by
Xxxxxxxx;
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(ii) gross malfeasance by Xxxxxxxx in the conduct of
Xxxxxxxx'x duties;
(iii) breach of this Agreement and, if such breach is
capable of being cured, as determined by the Board of
Directors of the Company (the "Board of Directors"),
failure of Xxxxxxxx to cure such breach after notice
and reasonable opportunity to cure such breach; or
(iv) gross neglect by Xxxxxxxx in carrying out Xxxxxxxx'x
duties.
(d) Termination of Xxxxxxxx'x employment by the Company at any
time without Cause.
(e) Termination by Xxxxxxxx of his employment at any time.
Section 1.4 TERMINATION OBLIGATIONS: RETURN OF COMPANY PROPERTY. Upon
termination of this Agreement, Xxxxxxxx shall promptly return all Company
property.
ARTICLE 2
POSITION AND DUTIES; OTHER BUSINESS ACTIVITIES
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Section 2.1 POSITION. Xxxxxxxx shall be employed as President and Chief
Operating Officer of the Company and report to the Chief Executive Officer.
Xxxxxxxx holds a voting seat on the Board of Directors and shall continue to
serve at the pleasure of the Board of Directors and the stockholders. Such
employees as Xxxxxxxx may determine, subject to the approval of the Board of
Directors or the Chief Executive Officer, shall report to Xxxxxxxx.
Section 2.2 DUTIES; FULL ATTENTION TO BUSINESS. Xxxxxxxx shall perform
such services for the Company, that reasonably serve the purpose of this
Agreement and/or meet the needs of the Company, as may be reasonably assigned to
him by the Board of Directors and that are consistent with the position Xxxxxxxx
holds. Xxxxxxxx shall devote his full business time, energies, interest,
abilities and productive efforts to the business of the Company. Without the
Company's written consent, Xxxxxxxx shall not render any kind of employee-type
or consulting services to others for compensation and, in addition, shall not
engage in any activity which conflicts or interferes with his performance of
duties hereunder.
Section 2.3 COVENANT NOT TO COMPETE DURING TERM. During the Term,
Xxxxxxxx shall comply in all respects with the Company's written policies with
respect to conflicts of interest. Xxxxxxxx shall not, without the prior written
consent of the Board of Directors, engage in or be interested, directly or
indirectly, in any business or operation competitive with the Company. For the
purpose of this paragraph, Xxxxxxxx shall be deemed to be interested in a
business or operation which is competitive with the Company if Xxxxxxxx is a
holder of 5% or more of the issued and outstanding ownership interests in such
business or operation, or serves as a director, officer, employee, agent,
partner, individual proprietor, lender, consultant, or independent contractor of
such business or operation.
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Section 2.4 NON-DISCLOSURE OF CONFIDENTIAL INFORMATION. Xxxxxxxx
acknowledges that in connection with his employment by the Company or its
affiliates, he has and may acquire or learn "Confidential Information" of the
Company by virtue of a relationship of trust and confidence between Xxxxxxxx and
the Company. Xxxxxxxx warrants and agrees that during the Term he shall not
disclose to anyone (other than to officers of the Company or to such other
persons as such officers may designate), or use, except in the course of his
employment with the Company or its affiliates, any Confidential Information
acquired by him in the course of or in connection with his employment. As used
herein, the term "Confidential Information" shall include, but not be limited
to: all information of any type or kind, whether or not reduced to a writing and
whether or not conceived, originated, discovered or developed in whole or in
part by Xxxxxxxx, which is directly related to the Company, its operations,
policies, agreements with third parties, its financial affairs and related
matters, including business plans, strategic planning information, product
information, purchase and sales information and terms, supplier negotiation
points, styles and strategies, contents and terms of contracts between the
Company and suppliers, advertisers, vendors, contact persons, terms of supplier
and/or vendor contracts or particular transactions, potential supplies and/or
vendors, or other related data; marketing information such as but not limited
to, prior, ongoing or proposed marketing programs, presentations, or agreements
by or on behalf of the Company, pricing information, customer bonus programs,
marketing tests and/or results of marketing efforts, computer files, lists and
reports, manuals and memos pertaining to the business of the Company, lists or
compilations of vendor and/or supplier names, addresses, phone numbers,
requirements and descriptions, contract information sheets, compensation
requirements or terms, benefits, policies, and any other financial information
whether about the Company, entities related or affiliated with the Company or
other key information pertaining to the business of the Company, including but
not limited to all information which is not generally available to or known in
the information services industry (or is available only as a result of an
unauthorized disclosure) and is treated by the Company as "Confidential
Information" during the term of this Agreement, regardless of whether or not
such Information is a "trade secret" as otherwise defined by applicable law
unless such information is in the public domain.
Section 2.5 NO SOLICITATION OF EMPLOYEES. Xxxxxxxx specifically agrees
that during the Term and for a period of two (2) years after his termination of
employment with the Company, Xxxxxxxx shall not, directly or indirectly, either
for himself or for any other person, firm, corporation or legal entity, solicit
any individual then employed by the Company to leave the employment of the
Company.
Section 2.6 OWNERSHIP OF WORK PRODUCT AND IDEAS. Any discoveries,
inventions, patents, materials, licenses and ideas applicable to the industry or
relating to Xxxxxxxx'x services for the Company or its affiliates, whether or
not patentable or copyrightable, created by Xxxxxxxx during his employment by
the Company or its affiliates ("Work Product") and all business opportunities
within the industry ("Opportunities") introduced to Xxxxxxxx by the Company or
its affiliates will be owned by the Company, and Xxxxxxxx will have no personal
interest in such, except to the extent that the Company allows Xxxxxxxx to
invest or participate in or have other rights to such Work Product or
Opportunities. Xxxxxxxx will, in such connection, promptly
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disclose any such Work Product and Opportunities to the Company and, upon
request of the Company, will assign to the Company all right in such Work
Product and Opportunities.
ARTICLE 3
COMPENSATION; BENEFITS
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Section 3.1 SALARY. The Company shall pay Xxxxxxxx Seven Thousand Two
Hundred Ninety-One and 67/100 Dollars ($7,291.67) on a semi-monthly basis, for
an annualized base salary ("Base Salary") of One Hundred Seventy-five Thousand
and NO/100 Dollars ($175,000.00). Beginning with the first anniversary of the
date of the Agreement and for each subsequent year of employment (or any portion
of any such year), Xxxxxxxx shall be entitled to a base salary review by the
Company to determine if any increase to base salary is warranted as a result of
performance.
Section 3.2 BONUS. In addition to the Xxxxxxxx'x base salary, Xxxxxxxx
shall be eligible to receive a bonus ("Bonus") for each fiscal year equal to (a)
5% of the Company's EBITDA, as determined by the Board of Directors, but not in
excess of 1.5 times the amount of Xxxxxxxx'x Base Salary paid to him during such
fiscal year, plus (b) such additional amount based on Xxxxxxxx'x performance as
may be determined by the Board of Directors in its sole discretion. Any Bonus
owing to Xxxxxxxx shall be paid within thirty (30) days following the filing of
the Company's annual report on Form 10-K for the applicable fiscal year.
Section 3.3 PAID VACATION. Xxxxxxxx shall be entitled to three weeks of
paid vacation during each year of service or such longer amount of vacation time
as Xxxxxxxx and the Compensation Committee of the Board of Directors shall
mutually agree upon.
Section 3.4 STOCK OPTIONS.
(a) Subject to approval of the Compensation Committee of the Board
of Directors, the Company will grant to Xxxxxxxx (i) an option
to purchase 1,775,000 shares of common stock of the Company
under the Company's 2000 Stock Option Plan (the "Plan"), which
shall be intended to qualify as an incentive stock option to
the maximum extent permitted under Section 422 of the Internal
Revenue Code of 1986, as amended, and (ii) subject to
compliance with the limitations of the American Stock Exchange
applicable to grants of options to officers without
stockholder approval, an option to purchase an additional
2,900,000 shares outside the Plan, half of which (1,450,000)
will be granted as soon as practicable following the Effective
Date and the other half of which (1,450,000) will be granted
one year later. Subject to approval of the Compensation
Committee, the Company will also grant to Xxxxxxxx an option
to purchase an additional 325,000 shares under the Plan,
provided that the Board of Directors and the stockholders of
the Company have approved an increase in the number of shares
authorized for issuance under the Plan to 15 million shares
and a sufficient increase in the number of shares for which
options may be granted to an individual under the Plan (the
"Plan Amendment"). All such options will have an exercise
price per
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share equal to the fair market value of the Company's common
stock as of the date of grant. If, by reason of the
limitations of the American Stock Exchange applicable to
grants of options to officers without stockholder approval,
the Company cannot grant an option to purchase all 2,900,000
shares outside the Plan, then the Company will grant an option
to purchase such shares that are in excess of the American
Stock Exchange limitations under the Plan following the Plan
Amendment, subject to approval of the Compensation Committee.
Each option shall be subject to the terms and conditions of
the Plan (or substantially equivalent terms if the option is
granted outside the Plan) and an option agreement to be
entered into between the Company and Xxxxxxxx, in a form
approved by the Compensation Committee of the Board of
Directors. Each option agreement shall provide that the option
shall have a ten year term (subject to earlier termination in
connection with termination of employment).
(b) The options shall vest and become exercisable, subject to
continued employment, as follows:
(i) The option described in Section 3.4(a)(i) for
1,775,000 shares shall vest as to 50% of the shares
on December 31, 2003 and as to the remaining 50% on
the first anniversary of the Effective Date of this
Agreement,
(ii) The option described in Section 3.4(a)(ii) for
1,450,000 shares, to be granted following the
Effective Date, shall vest as to 50% of the shares on
March 31, 2005, and as to the remaining 50% of the
shares on Xxxxx 00, 0000,
(xxx) The option described in Section 3.4(a)(ii) for
1,450,000 shares to be granted one year following the
Effective Date shall vest as to 50% of the shares on
March 31, 2005, and as to the remaining 50% of the
shares on March 31, 2006, and
(iv) The option described in Section 3.4(a) for 325,000
shares shall vest as to 50% of the shares on March
31, 2005, and as to the remaining 50% of the shares
on March 31, 2006,
in each case to become fully vested and exercisable upon a Change in
Control as defined in the Plan.
(c) Xxxxxxxx shall be eligible to receive additional grants of
options pursuant to the Plan in the sole discretion of the
Compensation Committee of the Board of Directors.
(d) If the Company is subject to a Change in Control as defined in
the Plan during the Term but prior to the grant of the option
described in Section 3.4(a)(ii) for 1,450,000 shares (to be
granted one year following the Effective Date), or the option
described in Section 3.4(a) for 325,000 shares (to be granted
following the Plan Amendment), Xxxxxxxx shall be entitled to a
cash bonus equal to the excess of the fair market value of the
shares for which such options were not granted as
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of the date of the Change in Control, over the fair market
value of such shares as of April __, 2003. Any payments due
hereunder shall be paid within sixty (60) days of the date of
the Change in Control.
Section 3.5 [RESERVED.]
Section 3.6 OTHER BENEFITS. During the Term, Xxxxxxxx shall be entitled
to participate in present and future employee benefit plans which are available
to the Company's employees, subject to eligibility requirements thereunder. The
Company shall also pay $10,000 to Xxxxxxxx as a signing bonus within ten (10)
days following the closing by the Company of a debt financing in the amount of
at least $1.5 million following execution of this Agreement (a "Funding Event").
Section 3.7 REIMBURSEMENT OF EXPENSES AND COMMISSIONS. Upon execution
of this Agreement, the Company shall reimburse Xxxxxxxx for all reasonable
business expenses previously incurred by him and due and owing under that one
certain Employment Agreement dated April 2, 2001 (which amount is $10,101.83).
The Company shall provide Xxxxxxxx with a corporate charge card to be used for
reasonable business purposes only and shall promptly reimburse Xxxxxxxx for all
reasonable business expenses incurred by him in the performance of his duties
hereunder subject to and in accordance with the Company's business expense
reimbursement policies as in effect from time to time. The Company shall also
pay to Xxxxxxxx the amount of previously accrued, unpaid commissions (in the
aggregate amount of $66,449.99), in installments at the rate of $5,000 per month
until the balance is paid in full.
Section 3.8 DISABILITY OR DEATH. If the Board of Directors determines,
on the basis of professional medical advice, that Xxxxxxxx has become unable to
substantially perform his duties under this Agreement due to illness or mental
or physical disability, and that such failure or inability has continued or is
reasonably expected to continue for any consecutive six-month period, the
Company shall have the option to terminate this Agreement by giving written
notice to Xxxxxxxx thereof and the basis therefor at least 30 days prior to the
effective date of termination. This Agreement shall also terminate immediately
upon Xxxxxxxx'x death. If Xxxxxxxx'x employment with the Company is terminated
pursuant to this Section 3.8, the Company shall pay Xxxxxxxx the salary, bonuses
and commissions which are earned but unpaid as of the date of termination. The
Board of Directors shall have discretion to determine the amount, if any, of
Bonus which Xxxxxxxx has earned prior to termination of employment during a
fiscal year.
Section 3.9 SEVERANCE.
(a) If the Company terminates Xxxxxxxx'x employment other than for
Cause pursuant to Section 1.3(d), and other than by reason of
death or Disability pursuant to Section 3.8, or if Xxxxxxxx
resigns within ten (10) days following a material diminution
in his title within six (6) months following a Change of
Control, then subject to Xxxxxxxx'x continuing obligations
under Sections 2.4 and 2.5 and in consideration of the
execution, delivery and effectiveness of a general release of
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claims in a standard form approved by the Company, the Company
shall pay to Xxxxxxxx a lump sum of two (2) times Xxxxxxxx'x
current Base Salary in cash within fifteen (15) days after the
date of termination (or, if later, upon the effectiveness of
the general release following any applicable revocation
period) and shall vest 100% of Xxxxxxxx'x then remaining
unvested options granted in accordance with this Agreement, in
addition to other amounts payable from qualified plans,
nonqualified retirement plans, and deferred compensation
plans, which amounts shall be paid in accordance with the
terms of such plans.
(b) If Xxxxxxxx resigns within ten (10) days following a material
diminution in his title by the Board of Directors of the
Company, other than in connection with a termination of his
employment for Cause or as a result of death or Disability
pursuant to Section 3.8, then subject to Xxxxxxxx'x continuing
obligations under Sections 2.4 and 2.5 and in consideration of
the execution, delivery and effectiveness of a general release
of claims in a standard form approved by the Company, the
Company shall vest 50% of Xxxxxxxx'x then remaining unvested
options granted in accordance with this Agreement, and
Xxxxxxxx'x entitlement to other amounts payable from qualified
plans, nonqualified retirement plans, and deferred
compensation plans shall be determined in accordance with the
terms of such plans.
(c) If the Company terminates Xxxxxxxx'x employment for Cause, or
if Xxxxxxxx resigns (other than pursuant to Section 3.9(b)
above), then Xxxxxxxx shall only be entitled to be paid his
accrued, unpaid Base Salary through the effective date of his
termination of employment and his entitlement to other amounts
payable from qualified plans, nonqualified retirement plans,
and deferred compensation plans shall be determined in
accordance with the terms of such plans.
(d) No severance benefits shall be provided pursuant to Sections
3.9(a) or (b) if Xxxxxxxx'x employment is terminated by reason
of expiration or non-renewal of this Agreement for any reason.
Section 3.10 EXCESS PARACHUTE PAYMENTS.
(a) If there is a "change of control" of the Company within the
meaning of Section 280G of the Internal Revenue Code of 1986,
as amended (the "Code"), a portion of the benefits to which
Xxxxxxxx is entitled under this Agreement could be
characterized as "excess parachute payments" within the
meaning of Section 280G of the Code. The parties hereto
acknowledge that the protections set forth in this Section
3.10 are important, and it is agreed that Xxxxxxxx should not
have to bear the full burden of the excise tax that might be
levied under Section 4999 of the Code or any similar provision
of federal, state of local law, in the event that any portion
of the benefits payable to Xxxxxxxx pursuant to this Agreement
or the other incentive plans of the Company are treated as an
excess parachute payment. The parties, therefore, have agreed
as set forth in this Section 3.10.
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(b) Anything in this Agreement to the contrary notwithstanding, if
it shall be determined that any payment or distribution
(including income recognized by Xxxxxxxx upon the early
vesting of restricted property or upon the exercise of options
whose exercise date has been accelerated) by the Company or
any other Person to or for the benefit of Xxxxxxxx (whether
paid or payable or distributed or distributable pursuant to
the terms of this Agreement or otherwise, but determined
without regard to any additional payments required under this
Section 3.10 (a "Payment") would be subject to the excise tax
imposed by Section 4999 of the Code or any similar provision
of any federal, state or local law or any interest or
penalties are incurred by Xxxxxxxx with respect to such excise
tax (such excise tax, together with any such interest and
penalties, are hereinafter collectively referred to as the
"Excise Tax"), then the Company shall pay an additional
payment, not to exceed the amount of Xxxxxxxx'x then current
Base Salary in the aggregate (a "Gross-Up Payment"), in an
amount such that after payment by Xxxxxxxx of all taxes
(including any interest or penalties imposed with respect to
such taxes), including, without limitation, any income taxes
(and any interest and penalties imposed with respect thereto)
and Excise Tax imposed on the Gross-Up Payment, Xxxxxxxx
retains an amount of the Gross-Up Payment equal to fifty
percent (50%) of the Excise Tax imposed on the Payments.
Xxxxxxxx will bear the cost of the remaining fifty percent
(50%) until the aggregate Gross-Up Payments from the Company
have reached the amount of Xxxxxxxx'x then current Base
Salary, and will thereafter bear all additional taxes,
interest or penalties.
(c) In the event of any dispute as to the applicability or amount
of any Gross-Up Payment, all determinations required to be
made under this Section 10, including whether and when a
Gross-Up Payment is required and the amount of such Gross-Up
Payment and the assumptions to be utilized in arriving at such
determination, shall be made by the independent public
accounting firm regularly employed by the Company (the
"Accounting Firm") which shall provide detailed supporting
calculations both to the Company and to Xxxxxxxx within 15
business days after the receipt of notice from Xxxxxxxx that
there has been a Payment, or such earlier time as is requested
by the Company. All fees and expenses of the Accounting Firm
will be borne by the Company. If the Accounting Firm
determines that no Excise Tax is payable by Xxxxxxxx, it shall
furnish Xxxxxxxx with a written statement that failure to
report the Excise Tax on Xxxxxxxx'x applicable federal income
tax return would not result in the imposition of a negligence
or similar penalty. Any determination by the Accounting Firm
shall be binding on the Company and Xxxxxxxx unless and until
a final determination is received from the Internal Revenue
Service indicating a contrary result. As a result of
uncertainty in the application of Section 4999 of the Code at
the time of the initial determination by the Accounting Firm
hereunder, it is possible that Gross-Up Payments may not have
been made by the Company that should have been made
("Underpayment"), consistent with the calculations required to
be made hereunder. If Xxxxxxxx thereafter is required to make
a payment of any Excise Tax, the Accounting Firm
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shall determine the amount of the Underpayment that has
occurred and any such Underpayment shall be promptly paid by
the Company to or for the benefit of Xxxxxxxx, consistent with
the maximum limitation stated in this Section 3.10. In the
event it is determined by the Accounting Firm that the Gross
Payments previously made by the Company exceeded the
limitations stated in this Section 3.10, upon written notice
from the Company, accompanied by a copy of the Accounting
Firm's calculation of same, the amount of such overpayment
shall be promptly paid by Xxxxxxxx to the Company.
ARTICLE 4
MISCELLANEOUS PROVISIONS
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Section 4.1 ENTIRE AGREEMENT. This Agreement contains the entire
Agreement between the Parties and supersedes all prior oral and written
Agreements, understandings, commitments, or practices between the Parties with
respect to the subject matter hereof, including the Employment Agreement dated
April 2, 2001, by and between Xxxxxxxx and the Company. Other than as expressly
set forth herein, Xxxxxxxx and the Company acknowledge and represent that there
are no other promises, terms, conditions or representations (verbal or written)
regarding any matter relevant hereto. No supplement, modification, or amendment
of any term, provision or condition of this Agreement shall be binding or
enforceable unless evidenced in writing and executed by the parties. The
provisions of Sections 2.3, 2.4, 2.5 and 2.6 shall survive termination of this
Agreement.
Section 4.2 APPLICABLE LAW. This Agreement shall be governed
exclusively by and construed in accordance with the laws of the State of Texas,
notwithstanding choice of law provisions thereof; and the venue of any
litigation commenced hereunder shall be Houston, Texas.
Section 4.3 INJUNCTIVE RELIEF. Xxxxxxxx acknowledges that his services
are of a special, unique, unusual, extraordinary and intellectual character,
which gives them a peculiar value, the loss of which cannot be reasonably or
adequately compensated in damages in an action at law. If he should breach this
Agreement, in addition to its rights and remedies under general law, the Company
shall be entitled to seek equitable relief by way of injunction or otherwise.
Section 4.4 PARTIAL INVALIDITY. If the application of any provision of
this Agreement, or any section, subsection, subdivision, sentence, clause,
phrase, word or portion of this Agreement should be held invalid or
unenforceable, the remaining provisions thereof shall not be affected thereby,
but shall continue to be given full force and effect as if the invalid or
unenforceable provision had not been included herein.
Section 4.5 NOTICES. Notices given under this Agreement shall be given
by registered or certified mail, postage prepaid, return receipt requested, or
by personal delivery to the respective addresses of the parties. Notices to
Xxxxxxxx shall be sent to ________________. Notices to the Company shall be sent
to 0000 Xxxxxxxxx Xxxx, Xxxxx 000, Xxxxxxx, Xxxxx 00000,
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Attn: Board of Directors. A mailed first-class notice shall be deemed given two
(2) business days after deposit with U.S. Postal Service.
Section 4.6 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same instrument.
Section 4.7 ASSIGNMENT. This Agreement may not be assigned or
encumbered in any way by Xxxxxxxx. The Company may assign this Agreement to any
successor (whether by merger, consolidation, or purchase of the Company's stock)
to all or a controlling interest in the Company's business, in which case this
Agreement shall be binding upon and inure to the benefit of such successor(s)
and assign(s).
Section 4.8 LIMITATION ON WAIVER. A waiver of any term, provision, or
condition of this Agreement shall not be deemed to be, or constitute a waiver of
any other term, provision or condition herein, whether or not similar. No waiver
shall be binding unless in writing and signed by the waiving party.
Section 4.9 ATTORNEY'S FEES. In the event that any proceeding is
commenced involving the interpretation or enforcement of the provisions of this
Agreement, the Party prevailing in such proceeding shall be entitled to recover
its reasonable costs and attorneys' fees.
Section 4.10 ARBITRATION. If a dispute or claim shall arise with
respect to any of the terms or provisions of this Agreement, or with respect to
the performance by either of the parties under this Agreement, other than in
connection with the Company's enforcement of the provisions of Sections 2.3,
2.4, 2.5, and 2.6 or pursuant to Section 4.3, then either party may, by notice
as herein provided, require that the dispute be submitted under the Commercial
Arbitration Rules of the American Arbitration Association to an arbitrator in
good standing with the American Arbitration Association within fifteen (15) days
after such notice is given. The written decision of the single arbitrator
ultimately appointed by or for both parties shall be binding and conclusive on
the parties, including with respect to any award of attorneys' fees or costs.
Judgment may be entered on such written decision by the single arbitrator in any
court having jurisdiction and the parties consent to the jurisdiction of the
courts of the State of Texas for this purpose. Any arbitration undertaken
pursuant to the terms of this section shall occur in the State of Texas.
Section 4.11 TAXES. All payments made pursuant to the provisions of
this Agreement shall be subject to the withholding of applicable taxes.
Section 4.12 NOT FOR THE BENEFIT OF CREDITORS OR THIRD PARTIES. The
provisions of this Agreement are intended only for the regulation of relations
among the parties. This Agreement is not intended for the benefit of creditors
of the parties or other third parties and no rights are granted to creditors of
the parties or other third parties under this Agreement.
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IN WITNESS WHEREOF, this Agreement is executed as of the Effective Date.
/S/ XXXXX X. XXXXXXXX
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Xxxxx X. Xxxxxxxx
US DATAWORKS, INC.
By: /S/ XXXXXXX X. XXXXX
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Name: XXXXXXX X. XXXXX
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Title: CEO
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