EMPLOYMENT AGREEMENT
This
Employment Agreement (this “Agreement”) is made and entered into as of the
10th
day of December (the “Effective Date”) by and among NYC MAGS, INC., a New York
corporation (the “Company”), Xxxxxxx Xxxxxxxx, an individual who has been
appointed by IB3 NETWORKS, INC.’s (“IB3”) board of directors to serve as the
President of NYC Mags, Inc. and XxxxxxxXxxxxxXxxxxxxx.xxx, the Company herein
after (“Executive”) and IB3. The Company, Executive and
IB3 are collectively referred to herein as the “Parties.” In
consideration of the mutual terms and conditions stated herein, the sufficiency
of which is hereby acknowledged, the Company, Executive and IB3 agree as
follows:
1. Employment
a. The
Company agrees to continue to employ Executive, and Executive agrees to continue
in the employment of the Company, serving as the Company’s
President. In that position, Executive shall render to the Company
such administrative and management services as are customarily performed by
persons situated in a similar executive position, and also perform such other
duties and serve in such other positions as the Company reasonably directs from
time to time. Executive shall devote Executive’s appropriate business
time attention, skill, and energy to the business of the Company, shall use
Executive’s best efforts to promote the success of the Company’s business, and
shall cooperate fully in the advancement of the best interests of the
Company. Executive may undertake outside employment, consultant ship
or independent contracting work, if it does not conflict with responsibilities
of his position at the company.
2. Compensation and
Benefits
a. Compensation and Benefits
based upon XxxxxxxXxxxxxXxxxx.xxx Website. Executive shall be
entitled to the following compensation if the website XxxxxxxXxxxxxXxxxx.xxx
(the “Website”) satisfies the following criteria:
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(i)
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Completion
of Website. If the Website is completed (“Completion of the
Website” as hereinafter defined) within 180 days from the Effective Date
of this Agreement then upon Completion of the Website, IB3 shall issue to
the Executive One Hundred Fifty Thousand (150,000) shares of IB3 common
stock within 10 business days as directed by Executive.
Completion of the Website is defined as the Website 1) being accessible
via the Internet, 2) being able to process customer requests to become
members of the Website and 3) providing its members the ability to contact
other members and 4) being able to process payment for membership on the
Website. IB3 will use its best efforts and resources, including
but not limited to financial, to assist Executive to build the
Website.
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(ii)
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If
XxxxxxxXxxxxxXxxxx.xxx website generates One Thousand (1,000) or more
Paying Members (as hereinafter defined) upon the first to occur of 1) One
Hundred Twenty (120) days from the Completion of the Website or
2) Three Hundred (300) days from the Effective Date of this
Agreement, then IB3 shall issue an additional Fifty Thousand (50,000)
shares of IB3 common stock to the Executive. Paying Member is
defined as an individual who has paid the Company any monetary
amount in order to have access to the
Website.
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(iii)
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If,
within Three Hundred Sixty Five (365) days of the Effective Date of this
Agreement, XxxxxxxXxxxxxXxxxx.xxx website generates Six Thousand (6,000)
or more Paying Members, then IB3 shall issue an additional Ten Thousand
(10,000) shares of IB3 common stock to the
Executive. Thereafter, for each additional Five Thousand
(5,000) individuals (in excess of the initial Six Thousand (6,000) Paying
Members) who become Paying Members within Three Hundred Sixty
Five (365) days of the Effective Date of this Agreement, IB3 shall issue
an additional Ten Thousand (10,000) shares of IB3 common stock to the
Executive. Notwithstanding the prior two sentences, IB3 shall
not issue more than One hundred thousand (100,000) shares of common stock
to the Executive pursuant to the provisions of this Section
2(a)(iii).
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b. Compensation and Benefits
based upon Gross Revenue. If the Website’s Gross Revenue (as
hereinafter defined) equals or exceeds One Million Dollars ($1,000,000) within
Three Hundred Sixty Five (365) days from the Effective Date of this Agreement,
then IB3 shall issue an additional One Hundred Fifty Thousand (150,000) shares
of IB3 common stock to the Executive for every One Million Dollars ($1,000,000)
of Gross Revenue produced by the Website in the first Three Hundred Sixty Five
(365) days from the Effective Date of this Agreement. Notwithstanding
the prior sentence, IB3 shall not issue more than Seven Hundred Fifty Thousand
(750,000) shares to the Executive pursuant to the provisions of this Section
2(b). Gross Revenue is defined as all income received by the Website
for the sales of its good and services.
c. Bonus Compensation based on
Gross Revenue. Within fifteen (15) days after the Company’s
second and fourth fiscal quarters after the Effective Date, and each subsequent
second and forth quarter thereafter, the Company shall pay to the Executive a
cash bonus equal to Two percent (2%) of the Website’s (XxxxxxxXxxxxxXxxxx.xxx)
Gross Revenues for the just completed and prior fiscal quarter,.
d. Sale of the
Company. If IB3 Networks, Inc. sells the subsidiary NYC , Inc/
XxxxxxxXxxxxxXxxxx.xxx while Executive is serving as its President or other
position to a third party or larger online dating site the Executive will
receive Ten percent (10%) of the NET proceeds paid to IB3 Networks, Inc. upon
closing. If Executive secures interested party to purchase
XxxxxxxXxxxxxXxxxx.xxx IB3 Networks, Inc. will compensate Executive Fifteen
percent (15%) of the NET proceeds paid to IB3 Networks, Inc.,
e. Stock Options
Compensation. IB3 shall issue the following stock options to
the Executive:
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(i)
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At
the Exercise Time (as hereinafter defined), for the purchase price of
Fifty cents ($0.50) per share of IB3 common stock, the Executive shall
have the option to purchase an amount of shares of common stock of IB3
equal to One percent (1%) of IB3’s shares of common stock outstanding at
the Exercise Time. The Exercise Time is defined as
One (1) year from the Effective Date of this Agreement. If the Executive’s
employment Agreement is terminated, as defined in Section 3. Termination,
prior to the Exercise Time, then the Executive shall have no
right to purchase shares of stock pursuant to this Section
2(d)(i).
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(ii)
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In
the event that Two Million Dollars ($2,000,000) is an amount that equals
or exceeds Fifteen percent (15%) of the Company’s earnings before
interest, expense, taxes, depreciation and amortization based on an
independent audit (“EBITDA”) an any
point in time during the first Seven Hundred Thirty (730) days
from the Effective Date of this Agreement, then , the Executive, for the
purchase price of Fifty cents ($0.50) per share of IB3 common stock, shall
have the option to purchase an amount of shares of common stock of IB3
equal to One percent (1%) of IB3’s shares of common stock outstanding at
such time as the Company’s EBIIDA equals or exceeds Two Million Dollars
($2,000,000). In the event of a reverse stock split, recapitalization, or
issuance of additional shares, the purchase price per share shall be
adjusted, pro-rata to the total aggregate number of shares, as
appropriate. If the Executive or the Company has terminated the
Executive’s employment with the Company prior to the Exercise Time, then
the Executive shall not have the right to purchase shares of stock
pursuant to this Section 2(d)(i).
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f. Monthly
Compensation. The monthly compensation of the Executive shall
be as follows:
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(i)
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Compensation
for Months One to Three. Subject to Section 2(e)(v), Executive
shall receive a cash salary of Five Thousand Dollars ($5,000) per month
for the first, second and third month after the Effective
Date.
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(ii)
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Compensation
for Months Four to Eight. Subject to Section 2(e)(v), Executive
shall receive a cash salary of Eight Thousand Dollars ($8,000) per month
for the fourth, fifth, sixth, seventh and eighth month after the Effective
Date.
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(iii)
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Compensation
for Months Nine to Twelve. Subject to Section 2(e)(v),
Executive shall receive a cash salary of Ten Thousand Dollars ($10,000)
per month for the ninth, tenth, eleventh and twelfth month after the
Effective Date.
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(iv)
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Compensation
for all months after the Twelfth Month. After the Twelfth month
from the Effective Date, the Executive shall receive a cash salary of Ten
Thousand Dollars ($10,000) per
month.
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(v)
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Notwithstanding
the provisions of Section 2(e)(i)-(iii), if IB3 fails to place at least
One Million dollars ($1,000,000) of Securities (as hereinafter defined) in
the Private Placement (as hereinafter defined), then the Executive shall
not receive payment in cash but shall instead receive an amount of shares
of IB3 common stock equal to the cash payment Executive was slated to
receive pursuant to Section 2(e)(i), (ii) or (iii),
respectively. The value of a share of stock shall be the
average closing price of a share of stock of the Company for the last ten
(10) business days of the calendar month for which the compensation is
being paid. If the Executive is issued stock pursuant to this
Section 2(e)(v), then if the shares of stock have not been registered,
then IB3 shall register such shares in an S-8 registration statement.
Within five business days of issuing shares to
executive.
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g. Success Fee. IB3 is
conducting a private placement of up to Five Million Dollars ($5,000,000) of any
capital stock (common, preferred, preference or otherwise) or other equity or
ownership interest in IB3 (the “Private Placement”) and any securities,
warrants, options or other rights to acquire any such capital stock or other
equity or ownership interest (the "Securities"). If, collectively, 1)
the Executive and 2) any Purchaser(s) (“Purchasers” is defined for this section
only as an acquaintance or contact generated by Executive without any assistance
of the Company) who purchased the Securities in IB3 as a result of the
Purchaser’s relationship with the Executive, purchase at least One
Million Dollars ($1,000,000) of Securities in the Private Placement, then IB3
shall pay to Executive a fee ("Success Fee") in an amount equal to Ten percent
(10%) of the gross proceeds raised by IB3 for each sale of the Securities to 1)
the Executive or 2) any Purchaser who purchased the Securities in IB3 as a
result of the Purchaser’s relationship with the Executive. The
Success Fee shall, at the option of the Executive, be payable in (i) cash; (ii)
shares of common stock of IB3 in an amount equal to the Success Fee; the value
of common stock of IB3 shall be the average closing price of common stock of IB3
for the ten (10) business days prior to the Closing date; or (iii) a combination
of cash and shares of the common stock of IB3. In the event that the
Executive utilizes the services of a broker dealer or third party to raise any
portion of funds, IB3 agrees to compensate the broker dealer or third party
separately.
h. Compensation for Business
Expenses. Reasonable expenses incurred by Executive to travel
between New York City and IB3’s headquarters in Ohio, including all airfare,
airport transfers, accommodations, and food will be paid for by
IB3. The executive will need to provide receipts of expenses and
reimburse the company for shortfall or expenses without receipts. Any
travel is subject to pre-approval by IB3. The Executive will incur
normal business expenses in the course of doing business, which will be
pre-approved by the Company. A monthly stipend, to be determined by
the Company, will be allotted the Executive. Expenses such as, but
not limited to, taxis to and from appointments, cell phone charges, and parking
expenses should Executive use his personal or rental car to attend
appointments. The Executive will need to provide receipts of expenses
and reimburse the company for shortfall or expenses without
receipts. IB3 will provide the Executive, within a reasonable time
frame, business cards and budget for Executive to produce mockup advertisement
creative, full color boards for presentations, and sales materials for
XxxxxxxXxxxxxXxxxx.xxx to be used at PPM presentations. The amount of the
budget for expenses discussed in this section is to be determined by IB3 and
Company after consultation with Executive, and shall not be unreasonably
withheld.
i. Board Membership. IB3
offers Executive upon execution of this Employment Agreement, in which executive
has ninety days, to accept or reject as his sole discretion the appointment as a
board member of IB3.
j. Annual
Review. One (1) year from the Effective Date, the Company
shall review the Executive’s compensation, and both parties (IB3 and Executive)
will not unreasonably withhold an extension of this employment
agreement.
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3. Termination of
Employment
Notwithstanding
anything to the contrary contained in this Agreement, the Executive or Ib3 shall
have right to terminate this Agreement, without cost or penalty to receiving
party for Cause (“Cause” is defined using objective standards defined by the
best business practices in the industry and geographical area Executive works)
by providing the other party a written Thirty (30) day notice of breach or
default, and the party receiving such notice will be afforded Sixty (60) days
from receipt of said notice to correct such default. If default is
not corrected or cured both parties agree this will be reviewed through
mediation with a mutually agreed upon mediator in the State of Ohio, and both
parties will accept the findings and resolution. Except as otherwise
expressly provided in this Agreement or required by law, the Company’s
obligations under this Agreement will automatically terminate upon the
termination of Executive’s employment with the Company and Executive will have
no obligation or duty to further serve the Company in any capacity, nor will the
Company be under any obligation to make any further payments or provide any
further benefits to Executive except as expressly provided for hereunder or
otherwise by applicable law. The Company and/or IB3 shall remain
liable for any payments/debt accrued, but not yet paid.
This
Agreement may be terminated by either party without cause if IB3. discontinues
its business as it is now conducted, or becomes bankrupt, insolvent, is in
receivership, or assignee in bankruptcy under federal or state law.
4. Termination
Payments
Upon
termination of Executive’s employment, Executive will resign all positions of
any kind held with the Company and its affiliates. If the Company
terminated the Executive, the Company will be obligated to provide Executive
only a prorated amount of the salary due him pursuant to Section 2(e) through
the date of termination; and if, upon the date of termination, a performance
condition provided for in Sections 2(a)-(d) and (f) has been satisfied, then the
Executive shall be due the compensation or stock provided for in such particular
section for satisfying the condition; however, if, upon the date of termination,
the Executive has not satisfied a performance condition provided for in Sections
2(a)-(d) and (f), then the Executive shall not receive any compensation 1) for
any unsatisfied condition in Section 2(a)-(d) and (f) and 2) for any performance
condition provided for in Sections 2(a)-(d) and (f) if such condition
should be satisfied after the termination of the Executive’s
employment with the Company. If the Executive terminates his
employment with the Company, then the Executive shall not be entitled to any
compensation otherwise due him under Section 2 of this Agreement.
5. Miscellaneous
a. Successors and
Assigns. This Agreement will be binding upon and inure to the
benefit of (i) the Company and its successors and assigns and (ii) Executive and
Executive’s heirs and personal representatives. This Agreement is not
assignable by Executive.
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b. Stock
Matters. Executive may transfer shares of common stock of IB3
received as part of this Agreement or any other Agreement, furnished by IB3, to
any third party. Both Parties agree that the common stock issued to
Executive will be restricted shares, subject to SEC Rule 144 for One (1) year,
effective upon issuance by IB3 or Company. Upon the satisfaction of
any of the terms or conditions contained in this Agreement whereby Executive
becomes entitled to receive shares of IB3, Company and/or IB3 shall duly issue
said shares to Executive within Ten (10) business days.
c. Notices. All
notices, requests, demands and other communications hereunder will be in writing
and will be deemed to have been duly given if delivered via telecopy, overnight
delivery, or prepaid certified or registered U.S. Mail, return receipt
requested, to the following addresses or to such other address as either Party
any designate by like notice:
If to
IB3, to: XX0 Xxxxxxxx, Inc., c/o Xxxx X. Xxxxxxx, 00 Xxxxx Xxxx Xxxxxx, Xxxxx
Xxxxxxxxxx, Xxxx 00000;
If to the
Company,
to: NYC
MAGS, c/o Xxxxxxx Xxxxxxxx, 000 Xxxxxxxx, Xxxxx 000, Xxx Xxxx, XX 00000, with
copies to The Law Office of Xxxxxxx X. Xxxx, P.C., 4733 Xxxxxxxx, XX 00000;
and
If to
Executive, to: Xxxxxxx Xxxxxxxx, 000 Xxxxxxxx, Xxxxx 000, Xxx Xxxx, XX 00000,
with copies to The Law Office of Xxxxxxx X. Xxxx, P.C., 4733 Xxxxxxxx, XX
00000
d. Entire Agreement;
Modification. This Agreement contains the entire agreement of
the Parties about the subjects in it, and it replaces all prior contemporaneous
oral or written agreements, understandings, statements, representations and
promises by either Party. No supplement, modification, or amendment
to this Agreement will be effective and binding unless the same is contained in
writing accepted and duly executed by the Parties.
e. Paragraph
Headings. The paragraph headings used in this Agreement are
included solely for convenience and will not affect, or be used in connection
with, the interpretation of this Agreement.
f. Severability. The
provisions of this Agreement will be deemed severable and the invalidity or
unenforceability of any provision will not affect the validity or enforceability
of the other provisions hereof.
g. Governing
Law. This Agreement will, except to the extent that federal
law will be deemed to apply, be governed by and construed and enforced in
accordance with the laws of Ohio.
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h. Jurisdiction and Venue in
Judicial Proceedings. Any judicial action arising under this
Agreement or otherwise in connection with Executive’s employment hereunder, and
not otherwise prohibited by this Agreement, will be instituted only in state
and/or federal courts located in Ohio. The Parties hereby expressly
consent to the jurisdiction of and waive any objection to venue in such
courts. The Parties hereby expressly agree that in any judicial
action arising under this Agreement or otherwise in connection with Executive’s
employment hereunder, the substantially prevailing party shall be entitled to
receive its attorney’s fees.
IN
WITNESS WHEREOF, the Parties have entered into this Agreement as of the date
first hereinabove written.
| IB3 Networks, Inc. | |
| By: | /s/ Xxxx X. Xxxxxxx |
| Name: | Xxxx X. Xxxxxxx |
| Title: | CEO |
| NYC MAGS, INC. | |
| By: | /s/ Xxxxxxx Xxxxxxxx |
| Name: | Xxxxxxx Xxxxxxxx |
| Title: | CEO |
| /s/ Xxxxxxx Xxxxxxxx | |
| By: | Xxxxxxx Xxxxxxxx, an individual |
