EXHIBIT 10.44
EMPLOYMENT AGREEMENT
THIS AGREEMENT made as of August 7, 2000
BETWEEN: XXXXXX XXXXXX, an individual, of 0000 Xxxxx Xx., Xxxxxxx Xxxxxxxxxx,
X.X.X. 00000
("Karwat")
AND: E*COMNETRIX INC., a Canadian corporation, having its offices located at
000 Xxxxxxxxx Xxxxxxx, Xxxxx 000X, Xxxx Xxxxxx, Xxxxxxxxxx,
X.X.X., 00000
("ECOM" or the "Company")
WITNESSES THAT WHEREAS:
A. ECOM entered into a Letter of Intent dated February 21, 2000, as
amended, with Exstream Data, Inc. ("EDI") of Oakland, California under
which ECOM agreed to acquire ECOM in a share exchange transaction (the
"Acquisition"); and
X. Xxxxxx is the President of EDI and has entered into an employment
agreement effective as of September 1, 1994, (the "Original
Agreement") with EDI; and
C. The Original Agreement terminates at will, and the parties wish to
enter into this agreement (the "Agreement") to replace the Original
Agreement effective upon the close of the Acquisition (the "Close" or
"Closing Date");
NOW THEREFORE, in consideration of the recitals, the following agreements, the
payment of One Dollar ($1.00) made by each party to the other, and other good
and valuable consideration, the receipt and sufficiency of which is acknowledged
by each party, the parties agree as follows:
ARTICLE ONE
SERVICES
Services
1.1 Subject to the terms and conditions herein contained, Karwat shall
serve ECOM as its Chief Operating Officer and EDI as its President and
Chief Executive Officer which services may include, but are not
limited to, operating management of ECOM, EDI and future subsidiaries.
For purposes of this agreement "operating management" is defined as
management of technical infrastructure and related support systems,
and internal product and service development, and service fulfilment,
customer care and other back office customer support operations, and
on a case by case basis the integration of the operations of acquired
companies (the "Official Services"). From time to time Karwat may be
asked to perform services other than the Official Services (the
"Unofficial Services"). The parties specifically acknowledge and agree
that the addition or deletion of Unofficial Services to the
responsibilities of Karwat shall not constitute a breach of this
Agreement by ECOM and shall not be construed as constructive dismissal
of Karwat by ECOM. Karwat shall not be entitled to receive any
additional compensation for providing Unofficial Services. Formal
changes to the definition of Official Services, as contained in this
Agreement, will be at the sole discretion of the Board of Directors of
ECOM not to include the vote of Karwat if he is a member
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of the Board of Directors of ECOM. Upon the Close Karwat will be
appointed as a Director of ECOM.
Term of Services
1.2 The term of this Agreement will commence on the Closing Date and
Karwat's employment under this agreement will be `at will'.
Performance of Service
1.3 Karwat will perform the work and services for ECOM from time to time
in the United States of America and in such other places as ECOM may
require from time to time. Karwat will not be required to relocate
from the San Francisco Bay Area. During the term of the Agreement and
so long as Karwat shall remain employed by ECOM or any of its
operating subsidiaries, Karwat shall be entitled to the continued use
of the exact physical space in which he presently maintains his office
within the suite of offices occupied by ECOM at 000 Xxxxx Xxxxxx,
Xxxxxxx, Xxxxxxxxxx so long as ECOM continues to occupy the space at
000 Xxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxx.
1.4 The manner in which services are to be performed and the specific
hours to be worked by Karwat shall be determined by Karwat, provided
that Karwat shall work as many hours as may be reasonably necessary to
fulfil Karwat's obligations under this Agreement.
1.5 Karwat's service shall be exclusive to ECOM with respect to the
business currently conducted or proposed to be conducted by ECOM and
its operating subsidiaries. Notwithstanding, during the term of this
Agreement, nothing shall prohibit Karwat from engaging (whether or not
during normal business hours) in any other business or professional
activity, whether or not such activity is pursued for gain, profit or
other pecuniary advantage so long as such activity does not compete,
directly or indirectly, with ECOM's business as currently conducted or
proposed to be conducted; including, without limitation: (a) investing
his personal assets in businesses that do not compete with ECOM's
business as currently conducted or proposed to be conducted; (b)
providing services as a director, consultant or advisor to businesses
that do not compete with ECOM's business as conducted or proposed to
be conducted; (c) purchasing securities in any corporation or other
entity that do not compete with ECOM's business as currently conducted
or proposed to be conducted; (d) purchasing securities in a
corporation whose securities are regularly traded (provided that such
purchases shall not result in his collectively owning beneficially at
any time five percent (5%) or more of the equity securities of any
corporation engaged in a business competitive to that of ECOM's
businesses currently conducted or proposed to be conducted; and (e)
engaging in charitable activities, participating in conferences,
preparing or publishing papers or books or teaching.
ARTICLE TWO
REMUNERATION
Compensation
2.1 During the term of this Agreement, in consideration for the services
provided by Karwat, ECOM will pay Karwat Twelve Thousand Five Hundred
US dollars (US$12,500) per month, payable beginning on the next
scheduled pay date subsequent to the Closing Date.
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2.2 During the term of this Agreement Karwat shall be entitled to similar
benefits as are generally available to other employees of ECOM.
2.3 As a condition of this Agreement ECOM shall enter into a Piggy-back
Registration Rights Declaration, of the form contained in Attachment A
hereto, with Karwat subsequent to the Close.
2.4 The parties acknowledge and agree that as material inducement to enter
into this Agreement that Karwat has been issued 550,000 stock options
under separate agreements subject to the terms and conditions of those
agreements.
Expenses
2.3 Karwat will be reimbursed for all travelling, office and other
out-of-pocket expenses actually and properly incurred by Karwat in
connection with the duties hereunder including, but not limited to,
parking expenses while at the company premises, cellular phone usage,
and Karwat's Lake View Club membership. For all such expenses, Karwat
will furnish to ECOM statements and vouchers.
ARTICLE THREE
KARWAT'S COVENANTS
Service
3.1 Subject to sections 1.3, 1.4 and 1.5, Karwat will devote his time,
attention and ability to the business of ECOM and will well and
faithfully serve ECOM and will use his best efforts to promote the
interests of ECOM.
Duties and Responsibilities
3.2 Karwat will duly and diligently perform all the duties assigned to him
while in the service of ECOM.
Non-Disclosure
3.3 (a) For the purposes of this Agreement, "Confidential Information"
means information which is not generally known about processes
used and products sold and services provided by ECOM, including,
without limitation, information relating to research,
development, design, manufacture, purchasing, accounting,
engineering, marketing, merchandising, distributing, selling and
servicing.
(b) Karwat will not (either during the continuance of their service
or at any time thereafter) disclose any Confidential Information
to any person other than at the request of ECOM and for ECOM's
purposes and shall not (either during the continuation of their
service or at any time thereafter) use for his own purposes or
for any purposes other than those of ECOM any such Confidential
Information he may acquire in relation to the business of ECOM.
ARTICLE FOUR
ECOM'S COVENANTS
Hold Harmless
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4.1 ECOM agrees to indemnify and hold Karwat harmless with respect to any
acts or omissions taken by Karwat as an officer, director, or employee
of ECOM or EDI except as to any acts or omissions which Karwat
knowingly and intentionally takes in violation of any applicable laws.
ECOM further agrees that its duty to indemnify and hold harmless
Karwat includes the obligation to pay any and all legal fees Karwat
incurs as a result of any legal complaint which has been filed prior
to the effective date of this Agreement against Karwat by Xxxxxxx
Xxxxxxx, an individual and shareholder of EDI. In the event a conflict
of interest arises between Karwat and ECOM with respect to legal
action filed by Xxxxxxx prior to the effective date of this Agreement,
Karwat shall be entitled to select and retain separate legal counsel
and ECOM shall continue to pay for Karwat's legal defense.
ARTICLE FIVE
TERMINATION OF SERVICES
Termination by ECOM for Cause or by ECOM or Karwat on Notice
5.1 Either Karwat or ECOM may terminate this Agreement upon giving 90 days
notice in writing. ECOM may terminate this Agreement by vote of its
Board of Directors, not including Karwat, at any time for Cause (as
that term is defined herein). If Karwat's employment is terminated for
Cause, ECOM shall not be obligated to provide Karwat the severance
payment set forth in Section 5.2. If Karwat terminates this Agreement,
with or without notice, ECOM shall not be obligated to provide Karwat
the severance payment set forth in Section 5.2.
5.2 If Karwat's employment or association with ECOM terminates due to an
Involuntary Termination Without Cause or A Constructive Termination (as
those terms are defined herein) at any time after the effective date of
this Agreement, Karwat shall be entitled to receive within ten days of
the Involuntary Termination Without Cause or Constructive Termination,
a single lump sum severance payment of One Hundred Fifty Thousand
Dollars ($150,000), subject to applicable tax withholdings. In the
event that ECOM terminates this Agreement under this section 5.2 Karwat
will be entitled to no further compensation except as specifically set
forth under this section 5.2. and for services rendered through the
effective date of termination.
5.3 Karwat shall not be required to mitigate damages or the amount of any
payment provided under this Agreement by seeking other employment or
otherwise, nor shall the amount of any payment provided for under this
Agreement be reduced by any compensation earned by Karwat as a result
of employment by another employer or by any retirement benefits
received by Karwat after the date of Karwat's Involuntary Termination
Without Cause Or Constructive Termination.
5.4 "Cause" shall mean (i) conviction of any felony involving moral
turpitude, dishonesty or fraud which materially xxxxx ECOM; (ii)
willful and material breach of the ECOM's written policies; or (iii) a
knowing, intentional and material breach of any agreement with the
ECOM including the terms of this Agreement (other than as a result of
death, disability or action of the Company). Cause shall not include
any act or omission undertaken or omitted to be taken by Karwat that
was done so at the direction of the Board of Directors, or that he
believed in good faith at the time was not illegal after reasonable
inquiry; it shall be deemed reasonable and in good faith for Karwat to
rely on advice provided by the Company's legal counsel, with respect
to legal issues, and the Company's accountants, with respect to
accounting or accounting related issues.
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5.5 "Constructive Termination" means that Karwat voluntarily terminates
employment with ECOM after any of the following are undertaken without
Karwat's express written consent: (i) the assignment to Karwat of any
continuing duties or responsibilities that result in a material
diminution or materially adverse change of his position, status or
circumstances or employment; (ii) a reduction by ECOM in Karwat's
salary; (iii) any failure by ECOM to maintain in effect any benefit
plan in which Karwat is participating, or the taking any action by the
Company that would materially adversely affect Karwat's participation
in or reduce Karwat's benefits under any of such plans or deprive
Karwat of any fringe benefit then enjoyed by Karwat; (iv) a relocation
of Karwat's business office to a location more than 25 miles from the
location at which he performed duties as of the effective date, or
such other location thereafter that Karwat consents to; (v) any
material breach by ECOM of this Agreement or any other agreement
between Karwat and ECOM that remains uncured for twenty (20) days
after written notice thereof to the Chairman or any two members of
ECOM's Board of Directors; and (vi) after the failure by ECOM to
obtain the assumption by any successor-in-interest or assignee of ECOM
this Agreement or any other materially agreement between Karwat and
ECOM relating to Karwat's employment.
5.6 "Involuntary Termination Without Cause" means Karwat's dismissal or
discharge from ECOM other than for Cause.
Return of Property
5.7 Upon any termination of this Agreement, Karwat will at once deliver or
cause to be delivered to ECOM all books, documents, effects, money,
securities, records of Confidential Information or copies thereof or
other property belonging to ECOM or for which ECOM is liable to
others, which is in the possession, charge, control or custody of
Karwat.
Provisions which Operate Following Termination
5.8 Notwithstanding any termination of this Agreement for any reason
whatsoever and with or without cause, the provisions of sections 3.3
and 5.3 of this Agreement and any other provisions of this Agreement
necessary to give efficacy thereto will continue in full force and
effect following such termination.
ARTICLE SIX
GENERAL
Sections and Headings
6.1 The division of this Agreement into Articles and Sections and the
insertion of headings are for the convenience of reference only and
will not affect the construction or interpretation of this Agreement.
Benefit of Agreement
6.2 This Agreement will enure to the benefit of and be binding upon the
successors and permitted assigns of ECOM and Karwat respectively and
upon the heirs, executors, administrators and legal personal
representatives of Karwat. Karwat may not assign the whole or any part
of their rights hereunder without the prior written consent of ECOM.
Entire Agreement
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6.3 This Agreement constitutes the entire agreement between the parties
with respect to the subject matter hereof and cancels and supersedes
any prior understandings and agreements between the parties. There are
no representations, warranties, forms, conditions, undertakings or
collateral agreements, express, implied or statutory between the
parties other than as expressly set forth in this Agreement.
Amendments and Waivers
6.4 No amendment to this Agreement will be valid or binding unless set
forth in writing and duly executed by all of the parties hereto. No
waiver of any breach of any provision of this Agreement will be
effective or binding unless made in writing and signed by the party
purporting to give the same and, unless otherwise provided in the
written waiver, will be limited to the specific breach waived.
Severability
6.5 If any provision of this Agreement is determined to be invalid or
unenforceable in whole or in part, such invalidity or unenforceability
will attach only to such provision or part thereof and the remaining
part of such provision and all other provisions hereof will continue
in full force and effect.
Notices
6.6 Any demand, notice or other communication (a "Notice") to be given in
connection with this Agreement will be given in writing and may be
given by personal delivery or by registered mail addressed to the
recipient as follows:
To Karwat: 0000 Xxxxx Xxxxx
Xxxxxxx, Xxxxxxxxxx, X.X.X. 00000
To the Board of
Directors of ECOM: Xxxxx 000X
000 Xxxxxxxxx Xxxxxxx
Xxxx Xxxxxx, Xxxxxxxxxx, XXX 00000
or such other address or individual as may be designated by notice by
either party to the other. Any Notice given by personal delivery will
be deemed to have been given on the day of actual delivery thereof and,
if made or given by registered mail, on the fifth day following the
deposit thereof in the mail.
Governing Law
6.7 This Agreement shall be deemed to have been made and executed in the
State of California and shall be construed in accordance with the laws
of California under the jurisdiction of the State of California and
the laws of the United States applicable therein.
Dispute Resolution
6.8 Dispute Resolution. Any dispute under this Agreement shall be
submitted to binding arbitration in San Rafael, California under the
Rules of Arbitration of the American Arbitration Association. If
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the parties can agree on a single arbitrator, the arbitration will be
conducted in front of such arbitrator, but if they cannot, then each
side will appoint one arbitrator and those two arbitrators will in
turn mutually agree on a third arbitrator and the arbitration will be
conducted in front of a panel of such three arbitrators. Judgement on
the arbitration award by such arbitrator(s) may be entered in any
court of competent jurisdiction. Notwithstanding the foregoing, the
parties may apply to any court of competent jurisdiction for
preliminary injunctive relief pending the outcome of any such
arbitration without breach of this arbitration provision. The
prevailing party shall be entitled to recover from the other party
reasonable attorneys' fees and costs incurred in connection with any
such arbitration.
Counterparts
6.9 This Agreement may be executed in as many counterparts as may be
necessary or by facsimile and each such facsimile or counterpart so
executed will be deemed to be an original and such counterparts
together will constitute one and the same instrument and
notwithstanding the date of execution will be deemed to bear the date
as set out on the first page of this Agreement.
IN WITNESS WHEREOF the parties hereto have executed this Agreement as of the day
and year first above written.
XXXXXX XXXXXX
___/s/ Xxxxxx Karwat____
E*COMNETRIX INC.
__/s/ [Illegible]________
Xxxx X. Xxxxx, President
__/s/ [Illegible]________
J. Xxxx Mustad, CEO
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