EXHIBIT 10.1
EMPLOYMENT AGREEMENT
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This EMPLOYMENT AGREEMENT, (the "Agreement") is made and entered into as of
the 1st day of August 1996 between BoxTop Interactive, Inc., a California
corporation (the "Company"), and Xxxxx Xxxx, an individual ("Employee").
WHEREAS, the Company desires to retain the services of Employee and
Employee desires provide such services for the term of this Agreement;
WHEREAS, the Company and the Employee desire that this Agreement supersede
and replace in their entirety any and all employment, consulting or similar
agreements, understandings, or arrangements (whether written or oral) that may
heretofore have been entered into between the Company and Employee (all of such
agreements, understandings, and arrangements being hereinafter collectively
referred to as the "Old Agreement").
WHEREAS, the Company and Employee have determined that it is in their
respective best interests to enter into this Agreement upon the terms and
conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements contained herein, the receipt and sufficiency of which
is hereby acknowledged, the parties hereby agree as follows:
1. Employment.
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1.1 Term: Duties.
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(a) The Company hereby employs Employee, and Employee hereby accepts
employment by the Company, upon the terms and conditions set forth in this
Agreement, for the period commencing on the date hereof (the "Effective Date")
and ending on the fourth anniversary of the Effective Date, unless earlier
terminated pursuant to the terms of this Agreement (the "Employment Term");
provided, however, that the Company may engage Employee as a consultant pursuant
to Section 2 below on the terms and conditions stated therein.
(b) During the Employment Term, Employee shall devote (i)
substantially all of his business time, attention and skill, and (ii) all of his
time and efforts in the interactive media field, to the Company; and shall
perform faithfully, loyally and efficiently as the Chairman of the Board and
Chief Executive Officer of the Company. In such capacity, he shall have such
duties and responsibilities consistent therewith and such other duties and
responsibilities as may from time to time be assigned
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to or vested in him by the Board of Directors (as such term is hereinafter
defined).
1.2 Compensation: Benefits
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(a) In consideration of the services rendered to or for the benefit
of the Company hereunder by Employee during the Employment Term, the Company
shall, during the Employment Term, pay Employee a salary (the "Salary") at the
annual rate of $250,000 during the first year of the term, $275,000 during the
second year of the term, $302,500 during the third year of the term and $332,750
during the last year of the term. The Salary shall be payable in approximately
equal installments in accordance with the Company's normal payroll practices for
its employees, but such installments shall be payable not less frequently than
monthly. The Salary, and all other forms of compensation paid to Employee
hereunder shall be subject to all applicable income taxes, payroll taxes and
other amounts required to be withheld by the Company pursuant to applicable law.
Employee shall be solely responsible for all income taxes, payroll taxes and
other amounts imposed on Employee by reasons of any cash or non-cash
compensation and benefits provided to Employee pursuant to this Agreement.
(b) In addition to the Salary, during the Employment Term, Employee
shall be entitled to:
(i) Vacation at the rate of four weeks per annum during the
Employment Term. In addition, Employee shall be entitled to the usual national
holidays with pay and reasonable sick leave, in each case in accordance with and
subject to the Company's normal policies applicable to its senior executives.
Vacation shall be accrued ratably during each year of the Employment Term during
which Employee renders services hereunder, subject to the limitations set forth
in this Section. Any accrued but unused vacation may be carried forward into
subsequent years, provided, however, that accrued but unused vacation available
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to Employee may not, at any time, exceed a total of six weeks. Vacation shall
not be earned during any period in which accrued but unused vacation time totals
six weeks and shall not again be earned until accrued but unused vacation time
again declines below six weeks. Such vacation shall be taken at such time or
times so as not to interfere with Employee's duties hereunder.
(ii) Fully vested options to purchase 250,000 shares of Common
Stock of the Company, exercisable for ten years from the date hereof at an
exercise price of $1.10 per share. With additional stock options to be issued on
the first, second
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and third anniversary of this Agreement, in the amount of 100,000 shares each.
(iii) An automobile allowance of $1,000 per month, plus
automobile insurance for such automobile.
(iv) A cellular telephone and service, an ISDN telephone line
and a home telephone line to be dedicated to business.
(v) While traveling on Company business the Employee shall be
entitled to travel by first class air travel and stay in first class hotels.
(vi) Participate in such employee benefit and incentive
compensation plans or programs as may from time to time be established by the
Company and as are applicable to the Company's senior executives, in each case
(A) to the extent approved by the Board of Directors and (B) subject to
compliance with all applicable laws.
1.3 Termination of Employment
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(a) Death or Disability. The Employment Term shall terminate
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automatically upon Employee's death. If, in the good faith opinion of the Board
of Directors, Employee shall be prevented from performing his duties and
responsibilities hereunder as a result of physical or mental illness, injury or
other incapacity for a period for more than one hundred fifty days in the
aggregate in any twelve-month period, then, to the extent permitted by law, the
Company may, at the election and in the sole discretion of the Board of
Directors, terminate the Employment Term for "Disability," effective upon the
date specified for such termination in written notice thereof delivered to
Employee. In the event that Employee shall dispute the determination of the
Board of Directors as to the Disability of Employee, Employee may appeal the
determination to a panel of three doctors, one to be selected by Employee, one
to be selected by the Board of Directors and one to be selected by the doctors
chosen by Employee and the Board of Directors. The decision of the panel of
doctors shall be final. Any termination for Disability under this Agreement
shall not affect the rights, if any, that Employee may otherwise have under any
disability plan the Company may have in effect at the date of such termination
and in which Employee is then participating.
(b) Cause. The Company may, at the election and in the sole
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discretion of the Board of Directors, terminate the Employment Term for "Cause"
effective upon the date specified for termination in written notice thereof
delivered to Employee. For purposes of this Agreement, "Cause" shall mean that,
in the good faith judgment of the Board of Directors (not including Directors
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affiliated with or appointed by Employee), one or more of the following events
shall have occurred: (i) Employee's habitual or willful neglect of any of his
material duties and responsibilities hereunder provided that such neglect shall
continue for thirty days following written notice to Employee; (ii) Employee's
refusal to follow reasonable and lawful directions of the Board of Directors
provided that such refusal shall continue for thirty days following written
notice to Employee; (iii) Employee's conviction of, or pleading of nolo
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contendere to, any felony of any type or any misdemeanor involving acts of moral
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turpitude or financial wrongdoing, including without limitation, bribery, fraud
or embezzlement; (iv) Employee's habitual or willful violation of any provision
of this Agreement provided that such violation shall continue for thirty days
after written notice to Employee; and (v) Employee's breach of any
confidentiality, nondisclosure, noncompetition, work for hire or other agreement
as may be entered into by Employee from time to time in connection with
Employee's employment by Company or (vi) a breach by Employee of his obligations
under that certain Letter Agreement dated as of June 5, 1996 among Employee, the
Company and certain other persons.
3. Covenants.
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3.1 Unauthorized Disclosure.
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(a) Employee recognizes that his employment with the Company will
involve contact with information of substantial value to the Company, which is
not old and generally known in the trade and which gives the Company an
advantage over its competitors who do not know or use it, including, but not
limited to, techniques, designs, drawings, processes, inventions, developments,
equipment, prototypes, sales and customer information, and business and
financial information, relating to the business, products, practices or
techniques of the Company (hereinafter referred to as "Confidential
Information;" provided that Confidential Information shall not include
information which (i) is or becomes generally available to the public other than
as a result of a disclosure by Employee, or (ii) becomes available to Employee
on a non-confidential basis from a person other than the Company, but only to
the extent Employee has no reason to believe that such person is bound by a
confidentiality agreement with the Company and is not otherwise believed by
Employee to be prohibited from transmitting the information to Employee.
Employee will at all times regard and preserve as confidential such Confidential
Information obtained by Employee from whatever source and will not, either
during Employee's employment or thereafter, publish or disclose any part of such
Confidential
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Information in any manner, or use the same except on behalf of the Company,
without the prior written consent of the Company.
(b) Inventions.
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(i) Employee will promptly disclose in writing to the officials
designated by the Company to receive such disclosures, complete information
concerning each and every invention, discovery, improvement, device, design,
apparatus, practice, process, method or product (hereinafter referred to as
"Inventions"), whether Employee considers them patentable or not, made,
developed, perfected, devised, conceived or reduced to practice by Employee,
either solely or in collaboration with others, during the period of his
employment by the Company, and up to and including a period of twelve (12)
months after the Employment Term, whether or not during regular working hours,
relating either directly or indirectly to the business, products, practices or
techniques of the Company or to the Company's actual or demonstrably anticipated
research or development, or resulting from any work performed by Employee for
the Company.
(ii) Employee understands that any Inventions made, developed,
perfected, devised, conceived or reduced to practice by Employee during the
period of his employment by the Company, and any other Inventions made,
developed, perfected, devised, conceived or reduced to practice by Employee
during said period of twelve (12) months after the Employment Term, if based
upon the Confidential Information of the Company, relating either directly or
indirectly to the business, products, practices or techniques of the Company or
to the Company's actual or demonstrably anticipated research or development, or
resulting from any work performed by Employee for the Company, are the sole
property of the Company, and hereby assign and agree to assign to the Company
its successors and assigns, all of Employee's right, title and interest in and
to said Inventions, and any patent applications or Letters Patent thereon.
NOTIFICATION
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This Agreement does not apply to an invention for which no equipment,
supplies, facility, or trade secret information of the Company was
used and which was developed entirely on Employee's own time, and (a)
which does not relate (1) to the business of the Company or (2) to the
Company's actual or demonstrably anticipated research or development,
or (b) which does not result from any work performed by Employee for
the Company, as defined and provided by Section 2870 of the California
Labor code. A copy of this Section 2870 is attached hereto as
Appendix A.
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(iii) Employee will, at any time during his employment or thereafter,
upon request and without further compensation therefore, but at no expense to
Employee, do all lawful acts, including the execution of papers and oaths and
the giving of testimony, that in the opinion of the Company, its successors or
assigns, may be necessary or desirable for obtaining, sustaining, reissuing or
enforcing Letters Patent in the United States and throughout the world for said
Inventions, and for perfecting, recording or maintaining the title of the
Company, its successors and assigns, to said Inventions and to any patent
applications made and any Letters Patent granted for said Inventions in the
United States and throughout the world. If after the Employment Term the Company
shall require Employee to travel, the Company shall cooperate with Employee to
schedule such travel time at a time reasonably satisfactory to Employee.
(c) Other Intellectual Property
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(i) Employee will also disclose in writing to the officials
designated by the Company to receive such disclosures, complete information
concerning all other intellectual property, including, but not limited to,
original works of authorship, trademarks, service marks, and trade secrets,
(hereinafter sufficient to as "other intellectual property") whether Employee
considers them intellectual property or not, which is made, developed, created,
devised, conceived, perfected, reduced to practice, or discovered by Employee,
either solely or in collaboration with others, during the period of his
employment by the Company, and up to and including a period of twelve (12)
months after the Employment Term, whether or not during regular working hours,
relating either directly or indirectly to the business, products, practices or
techniques of the Company or to the Company's actual or demonstrably anticipated
research or development, or resulting from any work performed by Employee for
the Company.
(ii) All copyrightable works with regard to paragraph 3.1(c)
(i) above, will be deemed "work for hire" as defined in (S)101 of the Federal
Copyright Act and such copyrightable works shall exclusively belong to the
Company. In the event that (S)101 of the Copyright Act is found to be
inapplicable, Employee will assign all right, title and interest in and to such
copyrightable works to the Company. In addition, Employee will, upon request and
without further compensation therefore, but at no expense to Employee, assist
the Company in obtaining all registrations for such copyrights pursuant to
Section 3.1(c) (iii) below.
(iii) Employee will, at any time during his employment, or
thereafter, upon request and without further compensation therefore, but at no
expense to Employee, do all lawful acts, including the execution of papers and
oaths and the
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giving of testimony, that in the opinion of the Company, its successors or
assigns, may be necessary or desirable for obtaining registrations for other
intellectual property, including, but not limited to trademarks, service marks,
and copyrights, in the United States and throughout the world. If after the
Employment Term the Company shall require Employee to travel, the Company shall
cooperate with Employee to schedule such travel time at a time reasonably
satisfactory to Employee.
(d) As to any Inventions or other intellectual property which were
made, developed, perfected, devised, conceived or reduced to practice by
Employee during the period of his employment by the Company, and up to and
including a period of twelve (12) months after the Employment Term, but which
are claimed for any reason to belong to an entity or person other than the
Company, Employee will promptly after receiving notice of such claim disclose
the same in writing to the Company. Within twenty (20) days thereafter, the
Company shall claim ownership of such Inventions or other intellectual property
under the terms of this Agreement. If the Company makes such a claim, Employee
understands that any controversy relating to such claim will be settled and
determined by binding arbitration conducted in Los Angeles County, California,
in accordance with the rules of the American Arbitration Association then
existing.
3.2 Prohibited and Competitive Activities. Employee and the Company
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recognize that due to the nature of Employee's engagement hereunder and the
relationship of Employee to the Company, both prior and subsequent to the date
of this Agreement, Employee has had and will have access to, has and will
acquire, and has assisted and may continue to assist in developing confidential
and proprietary information relating to the business and operations of the
Company and its affiliates, including, but not limited to Confidential
Information. Employee acknowledges that such information has been and will be
of central importance to the business of the Company and its affiliates and that
disclosure of this information to, or its use by others can and will cause
substantial loss to the Company. Employee and the Company also recognize that
an important part of Employee's duties will be to develop good will for the
Company and its affiliates through his personal contact with Clients (as defined
below), employees and others having business relationships with the Company, and
that there is a danger that this good will, a proprietary asset of the Company,
may follow Employee if and when his relationship with the Company is terminated.
Accordingly, Employee will perform as follows:
(a) Prohibited Activities. Employee will not at any time during the
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Employment Term: (i) (other than in the course of his employment) disclose or
furnish to any other person or, directly or indirectly, use for his own account
or the account of
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any other person, any Confidential Information, no matter from where or in
what manner he may have acquired such Confidential Information, and he shall
retain all such Confidential Information in trust for the benefit of the
Company, its affiliates and the successors and assigns of any of them, (ii)
directly or indirectly through one or more intermediaries, solicit for
employment or recommend to any subsequent employer of Employee the solicitation
for employment of, any person who, at the time of such solicitation, is employed
by the Company or any affiliate thereof, or (iii) directly or indirectly,
whether for his own account or for the account of any other person, solicit,
divert, or endeavor to entice away from the Company or any affiliate thereof, or
otherwise engage in any activity intended to terminate, disrupt, or interfere
with, the Company's or any of its affiliate's relationship with, Clients or
other business relationships of the Company or any affiliate thereof (any
activity described in clause (i), (ii), (iii) of this Section 3.2(a) being
herein referred to as a "Prohibited Activity"); provided, however, that if
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Employee is legally compelled to disclose Confidential Information to any
tribunal or else stand liable for contempt or suffer other similar censure or
penalty, then the disclosure to such tribunal of only those Confidential
Information which are legally required to be disclosed shall not constitute a
Prohibited Activity. Employee shall give the Company as much advance notice of
such disclosure as is practicable and reasonable.
The term, "Clients," shall mean those persons who, at any time during
Employee's course of employment with the Company (including; but without
limitation, prior to the date of this Agreement) are or were clients or
customers of the Company or any affiliate thereof or any predecessor of any of
the foregoing.
(b) Non-Competition. By and in consideration of the Company's
---------------
entering into this Agreement and providing the Salary, and benefits (including,
without limitation, stock options pursuant to a Company stock option plan) to
the Employee, and further in consideration of the Employee's continued exposure
to the confidential and proprietary information of the Company (including, but
without limitation, the Company's Confidential Information), the Employee will
not, during the Employment Term engage in any Competitive Activity. The term
"Competitive Activity" means engaging in any of the following activities: (i)
serving as a director of any Competitor (as defined below), (ii) directly or
indirectly through one or more intermediaries, either (X) controlling any
Competitor or (Y) owning any equity or debt interests in any Competitor (other
than equity or debt interests which are publicly traded and, at the time of any
acquisition, do not exceed 5% of the particular class of interests outstanding)
(it being understood that, if interests in any Competitor are owned by an
investment vehicle or other entity in which the
8
Employee owns an equity interest, a portion of the interests in such Competitor
owned by such entity shall be attributed to the Employee, such portion
determined by applying the percentage of the equity interest in such entity
owned by the Employee to the interests in such Competitor owned by such entity),
(iii) employment by (including serving as an officer, employee or partner of),
providing consulting services to (including, without limitation, as an
independent contractor) or, managing or operating the business or affairs of,
any Competitor or (iv) participating in the ownership, management, operation or
control of or being connected in any manner with any Competitor. The term
"Competitor" as used herein means any person (other than the Company or any
affiliate thereof) that directly or indirectly engages in the interactive media
business or any other line of business in which the Company or any subsidiary is
engaged during the Employment Term in the United States or any political
subdivision thereof, or in any other territory or any territory of the world in
which the Company or any subsidiary thereof has established a subsidiary or
sales or representative office or has retained a sales representative or
distributor. Notwithstanding the above, the term Competitor shall exclude the
business conducted by BoxTop Entertainment, Inc. including Television shows and
specials, concerts and one of a kind specials and the related world wide
distribution of any of the above.
(c) Adaption Rights. The Company shall have the express right to
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edit, revise and adapt any Invention and to cause others to edit, revise and
adapt any Invention as the Board of Directors may deem appropriate.
(d) Waiver of Moral Rights. The Employee hereby expressly waives any
----------------------
"artist's rights" or "moral rights" which the Employee might otherwise have in
any Invention.
(e) Insurance. During the Employment Term, the Company shall at its
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expense, to apply for, obtain and maintain insurance on the life of Employee in
the amount of $1,250,000, for the sole benefit of his spouse (which shall be the
sole payee of such insurance). Employee shall cooperate fully in connection with
the Company obtaining such insurance. The Company at its expense, shall obtain
disability insurance in an amount acceptable to the Employee.
4. Power of Attorney.
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Employee will designate and appoint the Company and its duly authorized
officers and agents as its agents and attorneys-in-fact to execute and file any
certificates, applications or documents and to do all lawful acts necessary to
protect the Company's rights in any Invention and other intellectual property.
Employee expressly acknowledges that the foregoing
9
power of attorney is coupled with an interest and is therefore irrevocable and
shall survive the termination of Employee's engagement by the Company for any
reason.
5. Miscellaneous.
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5.1 Binding Effect: Assignment. This Agreement shall inure to the benefit
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of and be binding upon the parties hereto and their respective heirs, executors,
representatives, estates, successors and assigns, including any successor or
assign to all or substantially all of the business and/or assets of the Company,
whether direct or indirect, by purchase, merger, consolidation, acquisition of
stock, or otherwise; provided, however, that neither the Employee nor any
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beneficiary nor any legal representative of the Employee, may assign all or any
portion of the Employee's rights or obligations under this Agreement without the
prior written consent of the Board of Directors.
5.2 Notices. Whenever notice is required to be given under the terms of
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this Agreement, such notice shall be in writing and delivered by hand or by
registered or certified mail, postage prepaid, or transmitted by telecopier,
addressed as follows:
(a) If to the Company, to it at:
BoxTop Interactive, Inc.
0000 Xxxxxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Chief Executive Officer
Telecopy No: 310.246.9995
(b) If to the Employee, to him at:
Xxxxx Xxxx
0000 Xx. Xxxxxx Xx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
or to such other address as either party shall have specified for itself from
time to time to the other party in writing. All such notices shall be
conclusively deemed to be received and shall be effective, if sent by hand
delivery, upon receipt, or if sent by registered or certified may, upon receipt,
or if transmitted by telecopier.
5.3 Governing Law. This Agreement and the rights and obligations of the
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parties hereto shall be governed by and construed and enforced in accordance
with the laws of the State
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of California without giving effect to the conflicts of law principles thereof.
5.4 Severability. If any term or other provision of this Agreement, or
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any application thereof to any circumstance is invalid, illegal or incapable of
being enforced by any rule of law, or public policy in whole or in part, such
provision or application shall to that extent be severable and shall not affect
any of the other provisions or applications of this Agreement.
5.5 Entire Agreement. This Agreement contains the entire understanding of
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the parties hereto with respect to the subject matter hereof and supersedes and
replaces in its entirety the Old Agreement.
5.6 Existing Agreement. Employee confirms and acknowledges that he has no
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claims against the Company (or its affiliates) under the Old Agreement.
5.7 Counterparts. This Agreement may be executed in any number of
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counterparts, each of which shall be deemed to be an original but all of which
together shall be deemed to constitute one and the same instrument.
5.8 Plurals; Gender; Headings; Sections. In this Agreement, unless the
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context otherwise requires, words in the singular number or in the plural number
shall each include the singular number and the plural number, and the use of any
gender shall include all genders. The headings in this Agreement are for
reference purpose only and shall not limit or otherwise affect the meaning or
interpretation of this Agreement. All references to sections, subsections and
paragraphs herein shall be deemed to refer to sections, subsections or
paragraphs of this Agreement unless the context otherwise requires.
5.9 Further Assurances. Each party hereto shall do and perform or cause
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to be done and performed all further acts and things and shall execute and
deliver all other agreements, certificates, instruments, and documents as any
other party hereto reasonably may request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.
5.10 Amendment and Modification. This Agreement may not be amended, nor
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may any provision hereof be modified, waived or discharged, nor may any breach
hereof be waived, except by an instrument in writing duly signed by the party to
be charged. The written approval of the Board of Directors shall be required
before any material amendment, modification, waiver or discharge
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contemplated by such Sections shall be effective as between the Company and
Employee.
5.11 Waiver. No provision of this Agreement may be waived or discharged
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unless such waiver or discharge is agreed to in writing and signed by the
affected party. No such waiver or discharge by any party hereto at any time, or
any waiver or discharge any breach by any party hereto of any provision of this
Agreement to be performed by such party, shall be deemed to waive or discharge
any other provisions or be a waiver or discharge of any breach of any other
provisions, respectively, at the same or at any prior or subsequent time.
5.12 Withholding. The Company shall have the right to deduct from any
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amounts payable hereunder or otherwise any taxes or other amounts to the extent
required by law to be withheld.
5.13 Certain Definitions.
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For purposes of this agreement:
(a) the term "affiliate" shall mean, with respect to any person, any
other person directly or indirectly controlling, controlled by, or under common
control with such person; and
(b) the term "person" shall mean an individual, a corporation, a
partnership, an association, a trust or any other entity or organization,
including a government or political subdivision or an agency or instrumentality
thereof.
5.14 Arbitration.
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(a) Except as set forth in this Section 5.14, all questions or disputes
arising out of or relating to this Agreement or any breach thereof shall be
finally settled by binding arbitration under the rules of the American
Arbitration Association and judgment upon such award may be entered in any court
having jurisdiction thereof. Any such arbitration proceeding shall take place
in Los Angeles County, California. THE PARTIES EACH HEREBY WAIVE THE RIGHT TO
TRIAL BY JURY IN CONNECTION WITH ANY DISPUTE ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR ANY BREACH THEREOF.
(b) Employee acknowledges that the Company is relying for its protection
upon the existence and validity of, among other things, Sections 3.1, 3.2 and 4
of this Agreement, and that irreparable injury (which would not be adequately
compensated by an award of damages) will result to the Company from any
violation or continuing violation of such provisions. Accordingly, Employee
hereby agrees that in addition to the
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remedies available to the Company by law or under this Agreement, the Company
shall be entitled to seek and obtain, from a court of competent jurisdiction,
such equitable relief (including injunctive relief) as may be permitted by law
for violations of Sections 3.1, 3.2 and 4 of this Agreement. Any such action
shall be brought in the state courts presiding in the County of Los Angeles or
in the Federal Courts in the Central District of California. Each party hereby
consents to personal jurisdiction in such courts and waives any objection to
such venue.
5.15 Attorneys' Fees. In any dispute arising out of this Agreement the
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prevailing party shall be entitled to recover reasonable attorneys' fees and
expenses and other costs in addition to any other relief awarded.
IN WITNESS WHEREOF, this Agreement has been signed by or on behalf of each
of the parties hereto, all as of the date first above written.
BOXTOP INTERACTIVE, INC., a
California corporation
BY: /s/ Xxxxx Xxxxxxx
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Name: Xxxxx Xxxxxxx
Title: Secretary
/s/ Xxxxx Xxxx
---------------------------------
Xxxxx Xxxx, an individual
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Appendix A
NOTIFICATION TO EMPLOYEE
Set forth below is the text of Section 2870, 2871 and 2872 of the
California Labor Code, as published in Xxxx'x Xxx. Cal. Labor Code (1989) and
Xxxx'x Xxx. Cal. Labor Code (1994 Supp.) :
(S) 2870. EMPLOYMENT AGREEMENTS; ASSIGNMENT OF RIGHTS
(c) 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; or
(2) Result from any work performed by the employee for the employer.
(d) 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.
(S) 2871. CONDITIONS OF EMPLOYMENT OR CONTINUED EMPLOYMENT; DISCLOSURE OF
INVENTIONS
No employer shall require a provision made void and unenforceable by
Section 2870 as a condition of employment or continued employment. Nothing in
this article shall be construed to forbid or restrict the right of an employer
to provide in contracts or employment for disclosure, provided that any such
disclosures be received in confidence, of all of the employee's inventions made
solely or jointly with others during the term of his or her employment, a review
process by the employer to determine such issues as may arise, and for full
title to certain patients and inventions to be in the United States, as required
by the contracts between the employer and the United States or any of its
agencies.
(S) 2872. NOTICE TO EMPLOYEE; BURDEN OF PROOF
If an employee agreement entered into after January 1, 1980, contains a
provision requiring the employee to assign or offer to assign any of his or her
rights in any invention to his or her
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employer, the employer must also, at the time the agreement is made, provide a
written notification to the employee that the agreement does not apply to an
invention which qualifies fully under the provisions of Section 2870. In any
suit or action arising thereunder, the burden of proof shall be on the employee
claiming the benefit of its provisions.
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IXL HOLDINGS, INC.
MAY 30, 1997
Mr. Xxxxx Xxxx
BoxTop Interactive, Inc.
00000 Xxxxxxxx Xxxxxxxxx
Xxxxx #0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Re: Merger of BoxTop Interactive, Inc. ("BII") into IXL Merger Corp. III,
Inc. ("Sub") (the "Merger")
Dear Xxxxx:
With regard to the above-referenced transaction, IXL Holding, Inc.
("Parent") hereby agrees as follows:
1. After the consummation of the Merger and thereafter on an on-going
basis, Parent will consult with you in good faith regarding its
international operations.
2. The Employment Agreement dated August 1, 1996 between BoxTop
Interactive, Inc. (a copy of which is attached hereto as Exhibit A)
---------
and you will be assumed by Sub (to be known after the Merger as
"BoxTop Interactive, Inc."), and will continue to govern the terms of
your employment; provided, however, that, notwithstanding anything to
the contrary contained therein, you will report to U. Xxxxxxx Xxxxx,
Xx.
3. Contemporaneously with the consummation of the Merger, Parent will
loan you $50,000, to be repaid by you, together with interest thereon
at the rate of 8% per annum, on the date one year from the date
hereof. All other terms of the loan shall be set forth in a promissory
note, dated of even date herewith, for the benefit of Parent (the
"Note"). Parent hereby agrees that the Note shall be treated as cash
of BII for purposes of calculating the amount of "BII Debt" (as such
term is defined in the Agreement and Plan of Merger, dated of even
date herewith, between Parent, Sub, BII and the BII shareholders),
reducing the amount of BII Debt.
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4. The Parties hereby agree and acknowledge that, immediately after the
consummation of the Merger, there will be warrants outstanding to
purchase 2,309 shares of Class B Common Stock of Parent (the "IXL
Warrants"). If, prior to November 30, 1997, you are able to cause a
reduction in the outstanding number of IXL Warrants, the total Merger
consideration shall be adjusted based on the agreement of the parties.
If this letter accurately reflects your understanding of our
agreement, please so indicate by executing this letter on the signature line
below.
SINCERELY,
IXL HOLDINGS, INC.
By: /s/ Xxxxx X. Xxxxxx
-----------------------------
Xxxxx X. Xxxxxx
Executive Vice President
Confirmed and agreed this 30th day of May, 1997
/s/ Xxxxx Xxxx
------------------------------
Xxxxx Xxxx
IXL HOLDINGS, INC.
By: /s/ Xxxxx X. Xxxxxx
--------------------------------
Xxxxx X. Xxxxxx, Executive Vice
President
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EXHIBIT A
---------
EMPLOYMENT AGREEMENT
--------------------
Original Employment Agreement of Mr. Xxxxx Xxxx dated August 1, 1996.
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ASSUMPTION OF AND FIRST AMENDMENT TO EMPLOYMENT AGREEMENT
This Assumption of and First Amendment to Employment Agreement by and among
IXL Holdings, Inc. ("IXL"), BoxTop Interactive, Inc. ("BoxTop"), and Xxxxx Xxxx
references that certain Employment Agreement dated as of August 1, 1998 by and
between BoxTop and Xxxxx Xxxx (the "Employment Agreement"). Capitalized terms
used but not defined herein shall have the meanings assigned to them in the
Employment Agreement.
WHEREAS, pursuant to the Employment Agreement, Xxxxx Xxxx is employed as
the Chairman of the Board and Chief Executive Officer of BoxTop Interactive,
Inc., the wholly-owned subsidiary of IXL.
WHEREAS, the Board of Directors of IXL has proposed to elect and appoint
Xxxxx Xxxx as the Vice Chairman of the Board of IXL.
WHEREAS, in connection with the appointment of Xxxxx Xxxx as the Vice
Chairman of the Board of IXL, IXL desires to assume the rights and obligations
of BoxTop under the Employment Agreement.
WHEREAS, in connection with the assumption of BoxTop's rights and
obligations under the Employment Agreement, the Employment Agreement must be
amended to accurately reflect Xxxxx Xxxx'x employment by IXL.
NOW THEREFORE, in consideration of the mutual covenants, and obligations
set forth herein and in the Employment Agreement, the parties hereby agree as
follows:
1. Assumption of the Employment Agreement by IXL. IXL hereby assumes the
---------------------------------------------
rights and obligations of BoxTop under the Employment Agreement. Xxxxx Xxxx
hereby consents to such assumption and agrees to be bound by the terms of the
Employment Agreement, as amended hereby, as if IXL were an original party
thereto.
2. Amendments of the Employment Agreement. The Employment Agreement shall
--------------------------------------
be amended as follows:
(a) The term "Company" as it appears in the first paragraph of the
preamble of the Employment Agreement shall be amended to be defined as IXL
Holdings, Inc.
(b) Section 1.1(b) of the Employment Agreement shall be amended by
deleting such section in its entirety and substituting in lieu thereof the
following:
(b) During the Employment Term, Employee shall devote
(i) substantially all of his business time, attention and
skill, and (ii) all of his time and efforts in the
interactive media field to the Company; and shall perform
faithfully, loyally and efficiently as the Vice Chairman of
the Board of the Company. In such capacity, he shall have
such duties and responsibilities consistent therewith and
such other duties and
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responsibilities as may from time to time be assigned to or
vested in him by the Board of Directors (as such term is
hereinafter defined).
(c) The address for notices to the Company set forth in Section 5.2
shall be changed to the following:
IXL Holdings, Inc.
0000 Xxxxx Xxxxxx, X.X.
Xxxxxxx, XX 00000
Attention: U. Xxxxxxx Xxxxx, Xx.
(d) No Further Amendments. Except as otherwise provided in this
---------------------
Section 2, the Employment Agreement shall not be amended or modified.
3. Resignation of BoxTop Offices. Xxxxx Xxxx hereby resigns as the
-----------------------------
Chairman of the Board of Directors and Chief Executive Officer of BoxTop
IN WITNESS WHEREOF, this Assumption of and First Amendment to Employment
Agreement has been executed by the parties hereto as of April 16, 1998.
IXL Holdings, Inc.
By: /s/ U. Xxxxxxx Xxxxx, Xx.
-------------------------------
Name: U. Xxxxxxx Xxxxx, Xx.
Title: Chairman & CEO
BOXTOP INTERACTIVE, INC.
By: /s/ U. Xxxxxxx Xxxxx, Xx.
-------------------------------
Name: U. Xxxxxxx Xxxxx, Xx.
Title: Chairman & CEO
/s/ Xxxxx Xxxx
------------------------------------
XXXXX XXXX
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