1
EXHIBIT 10.6
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is made and entered into
as of the 1st day of June, 1997, by and between Xxxxxx X. Xxxxxx, a resident of
the State of Maryland ("Executive"), and IDN FORMATION CORP., a Georgia
corporation to be reincorporated in Delaware under the name "Industrial
Distribution Group, Inc. ("IDG").
W I T N E S S E T H:
WHEREAS, IDG is engaged in the business of providing flexible
procurement solutions for industrial users and certain other users that have
maintenance, repair, operating, and production supplies requirements; and
WHEREAS, IDG desires to induce Executive to enter into employment with
IDG for the period provided in this Agreement, and Executive is willing to
accept such employment with IDG on a full-time basis, all in accordance with the
terms and conditions set forth below.
NOW, THEREFORE, for and in consideration of the premises, the mutual
covenants contained herein, and other good and valuable consideration, the
receipt and sufficiency of which are hereby expressly acknowledged, the parties
hereby covenant and agree as follows:
1. DUTIES AND EXTENT OF SERVICES
1.1 POSITION AND DUTIES. IDG hereby enters into this Agreement to
evidence and provide for the employment of Executive as Chairman and Chief
Executive Officer of IDG. Consistent with the policies, guidelines, and
directives adopted or established by the Board of Directors of IDG, acting
pursuant to and in accordance with lawful authority, Executive shall be
responsible for the development, establishment, and implementation of policy and
strategic initiatives for IDG, with authority and responsibility consistent with
his positions as the principal executive officer and Chairman of the Board of
Directors of IDG. Executive shall be appointed as a member of the Board of
Directors of IDG upon execution of this Agreement, and Executive shall be
entitled to serve as a member of IDG's Board of Directors at all times during
the term of this Agreement. Executive shall only be required to report directly
to the Board of Directors of IDG. Executive agrees to serve, without additional
compensation, in a similar executive capacity with subsidiaries of IDG and in
such other executive capacities as may be designated by the Board of Directors
of IDG, consistent with the positions, responsibilities, and authority of
Executive hereunder. Neither Executive's employment hereunder nor any other
position referred to in the preceding sentence shall require Executive to
relocate his primary residence from his current location, and Executive may
perform his duties at such geographic locations as he may determine in his
reasonable discretion, giving due regard to the location of his primary
residence,
2
the location of IDG's principal offices, and the best interest of IDG. The
immediately preceding sentence represents a material and substantial part of
this Agreement.
1.2 EXTENT OF SERVICES. Executive agrees to devote his full working
time, energy, and skill to the business of IDG and its affiliates and to the
promotion of IDG's interests and to discharge Executive's duties in good faith
and in a professional manner. Executive affirms and represents that he is under
no obligation to any former employer or other party that is in any way
inconsistent with, or that imposes any restriction upon, his acceptance of
employment hereunder with IDG, the employment of Executive by IDG, or
Executive's undertakings under this Agreement.
2. TERM
The term of this Agreement (the "Term") shall commence on June 1, 1997
(the "Effective Date") and shall continue for a three-year period, unless and
until this Agreement has been terminated in accordance with Section 7 hereto.
3. COMPENSATION
3.1 BASE SALARY. IDG shall pay to Executive a base annual salary (the
"Base Salary") of Two Hundred Fifty Thousand Dollars ($250,000) for each fiscal
year during the Term (prorated for any partial fiscal year) subject, however, to
being increased for each fiscal year beginning January 1, 1998, to such higher
amount as may be approved by the Board of Directors of IDG. All Base Salary
shall be paid in equal periodic installments in accordance with IDG's normal
payroll policies, as may be in effect or modified during the Term.
3.2 GENERAL INCENTIVE COMPENSATION AND SAVINGS PROGRAMS. IDG hereby
agrees that, as of June 1, 1997, Executive shall be entitled to participate, to
an extent consistent with Executive's title and Base Salary, in an incentive
compensation program that shall be established by IDG, and in all savings
programs, including stock option or other stock-based compensation plans or
profit sharing plans, 401(k) plans, or other savings programs, as may be
established in general by IDG for similarly situated officers, other key
employees, or employees as a group.
Nothing contained herein and no action taken in respect of any
bonus (or otherwise in respect of this Section 3.2) shall create or be construed
to create a trust of any kind. Executive's right to receive any bonus pursuant
to this Section 3.2 shall be no greater than the right of an unsecured general
creditor of IDG to receive payment from IDG. Any bonus paid under this Section
3.2 or otherwise shall be paid from the general funds of IDG, and no special or
separate fund shall be established, and no segregation of assets shall be made,
to assure payment of any bonus hereunder.
3.3 WITHHOLDINGS, PAYROLL TAXES AND OTHER DEDUCTIONS. The payment of
Base Salary and any other compensation hereunder shall be subject to
withholdings and payroll taxes required by applicable law, and such other
deductions as may be required under IDG's employee benefit plans in which
Executive has elected to participate.
-2-
3
4. BENEFITS.
During Executive's employment hereunder, Executive shall:
(a) be eligible to participate in employee fringe benefits and
any pension or profit sharing plans that may be provided by IDG for its
executive employees in general in accordance with the provisions of any
such plans, as the same may be in effect from time to time;
(b) be eligible to participate in any medical and health plans
or other employee welfare benefit plans that may be provided by IDG for
its executive employees in general in accordance with the provisions of
any such plans, as the same may be in effect from time to time;
(c) be entitled to annual paid vacation in accordance with IDG
policy that may be applicable to executive employees from time to time;
and
(d) be entitled to sick leave, sick pay, and disability
benefits in accordance with any IDG policy that may be applicable to
executive employees from time to time.
5. CONFIDENTIAL INFORMATION
5.1 DEFINITION. For purposes of this Agreement, "Confidential
Information" shall mean any and all trade secrets and other information
considered by IDG as being confidential and concerning the business and affairs
of IDG, including but not limited to (a) product specifications, discoveries,
improvements, processes, marketing and service methods or techniques, formulae,
designs, styles, specifications, data bases, computer programs (whether in
source code or object code), know-how, strategies, data, customer lists, current
and anticipated customer requirements, price lists, market studies, business
plans, and any other information, however documented, that is a trade secret of
IDG, or any of its affiliates; (b) information concerning the business and
affairs of IDG (which includes, but is not limited to, historical financial
statements, financial projections and budgets, historical and projected sales,
capital spending budgets and plans, business plans, the names and background of
key personnel, personnel training and techniques and materials, and sales
techniques and materials of IDG), however documented; and (c) notes, analyses,
compilations, studies, summaries, and other material prepared by or for IDG
containing or based, in whole or in part, on any information included in the
foregoing; provided, however, Confidential Information shall not include any
information that Executive demonstrates was or became generally known or
available to the public other than as a result of an unauthorized or unlawful
disclosure directly or indirectly by Executive.
5.2 ACKNOWLEDGMENTS AND AGREEMENTS BY EXECUTIVE. Executive hereby
acknowledges, agrees, and covenants as follows:
-3-
4
(a) Executive's employment hereunder creates a relationship of
confidence and trust between Executive and IDG and its affiliates with
respect to the Confidential Information of IDG and its affiliates and
other information pertaining to the businesses of any client or
customer of IDG or its affiliates that may be made known to Executive
by IDG or any of its affiliates, or by any client or customer of IDG or
any of its affiliates, or learned by Executive during the period of
Executive's employment under this Agreement.
(b) Executive possesses or will possess Confidential
Information that has been, or will be, created, discovered, or
developed by, or otherwise becomes known or disclosed to Executive
(including, without limitation, information created, discovered, or
developed by, or made known to, Executive during the period of
Executive's employment hereunder or during discussions with or
investigations of IDG in contemplation of such employment), which
information Executive acknowledges has or may have commercial value to
IDG or its affiliates in the businesses in which they are or proposed
to be engaged.
(c) Executive hereby agrees that Executive will keep
confidential and will hold for IDG's sole benefit all Confidential
Information, which Executive acknowledges is, or shall be, proprietary
to IDG or its affiliates.
(d) Executive also agrees that Executive will not, without the
prior approval of the Board of Directors of IDG, use for Executive's
benefit or disclose at any time during Executive's employment by IDG,
or thereafter, except to the extent required for the performance by
Executive of Executive's duties as an employee of IDG, any information
obtained or developed by Executive while in the employ of IDG with
respect to the products, employees, financial affairs, or methods of
design, distribution, marketing, service, or procurement of any
customer, client, or supplier of IDG or any of its affiliates, or any
confidential matter with respect thereto, except information that at
the time is generally known to the public other than as a result of
disclosure by Executive not permitted hereunder.
(e) Executive acknowledges and agrees that a remedy at law for
any breach or threatened breach of the provisions of this Section 5
would be inadequate and, therefore, agrees that IDG shall be entitled
to injunctive relief in addition to any other available rights and
remedies in case of any such breach or threatened breach; provided,
however, that nothing contained herein shall be construed as
prohibiting IDG or any of its affiliates from pursuing any other rights
and remedies available for any such breach or threatened breach.
(f) Executive agrees that upon termination of Executive's
employment by IDG for any reason, Executive shall forthwith return to
IDG, or destroy to the satisfaction of IDG, all Confidential
Information in whatever form such information is in the possession of
Executive or under Executive's control, and shall additionally return
all documents and other property that is in Executive's possession or
under Executive's
-4-
5
control and belonging to IDG or any of its affiliates that Executive
does not otherwise have a valid independent right to possess or
control.
6. NO RECRUITMENT; NON-COMPETITION
6.1 PROHIBITED ACTIVITIES. During Executive's employment hereunder and
for one (1) year after the termination of Executive's employment hereunder,
Executive will not, directly or indirectly, for any reason, for his own account,
or on behalf of or together with any other person:
(a) solicit, induce, or conspire with, or attempt to solicit,
induce, or conspire with, any of the officers or employees of IDG or
any of its affiliates (IDG and its affiliates collectively being "IDG"
for purposes of this Section 6) to terminate their employment or
relationship with, or to compete against, IDG;
(b) solicit or induce, or attempt to solicit or induce, any of
the customers or suppliers of IDG, with whom Executive has dealt with
or otherwise has or had direct dealings with during the twenty-four
(24) month period prior to such attempted solicitation or inducement,
to terminate their business relationship with IDG;
(c) divert or attempt to divert any or all of such customers'
or suppliers' business with them from them in violation of this
Agreement or applicable law (including the violation of any trade
secrets law); or
(d) be engaged as an officer or director or in any other
managerial or sales capacity or as an owner, co-owner, or other
investor of or in, whether as an employee, independent contractor,
consultant or advisor, or sales representative or distributor of any
kind, in a business that sells any products or provides any services in
competition with IDG within a radius of 100 miles of each location in
which IDG was engaged in business on the date hereof or, to the extent
permitted by and enforceable under applicable law, in which IDG is so
engaged on the date of Executive's termination.
Notwithstanding the foregoing, Executive may own and hold as a passive
investment up to one percent (1%) of the outstanding capital stock of a
competing entity if that class of capital stock is listed for trading or
quotation on a national or regional stock exchange registered with the SEC or on
The Nasdaq Stock Market.
6.2 DAMAGES. Because of the difficulty in measuring the economic losses
that may be incurred by IDG as a result of any breach by Executive of the
covenants in Section 6.1, and because of the immediate and irreparable damage
that could be caused to IDG for which it would have no other adequate remedy,
Executive agrees that IDG may enforce the provisions of Section 6.1 by any
equitable or legal means, including seeking an appropriate injunction or
restraining order against Executive if a breach of any of those provisions
occurs.
-5-
6
6.3 REASONABLE RESTRAINT. The parties hereto each agree that Sections
6.1 and 6.2 impose a reasonable restraint on Executive in light of the position
of Executive with IDG, the activities and business of IDG on the date hereof,
and the current business plans of IDG (of which Executive acknowledges that he
is aware).
6.4 SEVERABILITY; REFORMATION. The covenants in this Section 6 are
severable and separate, and the unenforceability of any specific covenant in
this Section 6 is not intended by any party hereto to, and shall not, affect the
provisions of any other covenant in this Section 6. If any court of competent
jurisdiction shall determine that the scope, time, or territorial restrictions
set forth in Section 6.1 are unreasonable as applied to Executive, the parties
hereto acknowledge their mutual intention and agreement that those restrictions
be enforced to the fullest extent the court deems reasonable, and thereby shall
be reformed to that extent as applied to Executive.
6.5 INDEPENDENT COVENANT. All of the covenants in this Section 6 are
intended by each party hereto to be, and shall be construed as, an agreement
independent of any other provision in this Agreement, and the existence of any
claim or cause of action of Executive against IDG, whether predicated on this
Agreement or otherwise, shall not constitute a defense to the enforcement by IDG
of any covenant in this Section 6. It is specifically agreed that the period
specified in Section 6.1 shall be computed by excluding from that computation
any time during which Executive is in violation of any provision of Section 6.1.
6.6 MATERIALITY. IDG and Executive hereby agree that this Section 6 is
a material and substantial part of this Agreement.
7. TERMINATION OF EMPLOYMENT
7.1 BY IDG. (a) Executive's employment under this Agreement may be
terminated by IDG at any time for good cause. For the purposes of this Section
7.1, "good cause" shall mean: (i) Executive's breach of a material provision of
this Agreement; (ii) the conviction or indictment (or its procedural equivalent)
of, or the entering of a plea of guilty or no contest by, Executive with respect
to an act or acts involving moral turpitude that constitutes a felony under
applicable law; (iii) the commission by Executive of an act or acts of
dishonesty that subjects IDG or any of its affiliates to material loss or
detriment, including the misappropriation (or attempted misappropriation) of any
of IDG or any of its affiliate's funds, as determined by the Board of Directors
of IDG; or (iv) Executive's habitual neglect of, or refusal to perform,
Executive's duties under this Agreement, or deliberate and intentional disregard
of lawful instructions from the Board of Directors of IDG; provided, however,
that with respect to clauses (i) and (iv) above, Executive shall have received
written notice of such alleged breach, neglect, refusal, or disregard, as the
case may be, from the Board of Directors of IDG and shall have failed within
thirty (30) days after the receipt of such notice to cure and correct such
alleged breach, neglect, refusal, or disregard (or to begin in good faith to
effect such cure and correction if such cure or correction cannot practically be
completed within such 30-day period).
(b) If Executive's employment is terminated under this Section 7.1, IDG
shall have no further obligation to Executive hereunder except to pay to
Executive, in cash on the effective
-6-
7
date of such termination, any amount accrued but unpaid hereunder as of the
termination date, and except for the provisions contained in Sections 5, 6, and
8, which shall specifically survive such termination.
7.2 BY DEATH. If Executive dies, this Agreement shall terminate on the
date of Executive's death. In such event, IDG shall pay promptly to Executive's
designated beneficiary or, if no designated beneficiary, to Executive's estate,
any compensation or other amount earned or accrued as of the date of Executive's
death but not yet paid and any other payments to which Executive is entitled
pursuant to Section 3 or Section 4 hereof. If this Agreement is terminated
pursuant to this Section 7.2, Executive or his estate shall be entitled to
receive a cash payment equal to the present value (based on IDG's then current
cost of borrowing) of his Base Salary for the balance of the Term, payable
within 30 days of the date of termination. Executive shall also be entitled to
receive the bonus payment provided for in Section 3.2 hereof for the fiscal year
in which the termination occurred. Further, all stock options theretofore
granted to Executive by IDG shall remain in force and effect and shall be
exercisable until their expiration date, provided that any such options
otherwise subject to vesting based solely on the lapse of time shall be
immediately vested in full.
7.3 BY DISABILITY. If Executive becomes unable to perform his normal
duties hereunder as a result of his incapacity due to physical or mental illness
for a period of at least one hundred eighty (180) consecutive days, IDG shall
have the option to terminate this Agreement upon the expiration of such period
(the "Disability Date"). In such an event, IDG shall pay to Executive (within
thirty (30) days thereof) all amounts accrued but unpaid as of the Disability
Date and, in the manner and at the times set forth in Section 3.1 above, an
amount equal to the difference between (a) the Base Salary payable for the
remainder of the Term and (b) the monthly payments made to Executive under any
disability insurance coverage provided to Executive pursuant to Section 4
hereof. Executive shall also be entitled to receive the bonus payment provided
for in Section 3.2 hereof for the fiscal year in which the termination occurred.
Further, all stock options theretofore granted to Executive by IDG shall remain
in force and effect and shall be exercisable until their expiration date,
provided that any such options otherwise subject to vesting based solely on the
lapse of time shall be immediately vested in full. If Executive's employment is
terminated by IDG as a result of a disability, as provided in this Section 7.3,
this Agreement shall terminate and neither party shall have any further
obligation to the other, except as provided above, and except for the provisions
contained in Sections 5, 6, and 8, which shall specifically survive such
termination.
7.4 BY DISCHARGE. If Executive's employment under the terms of this
Agreement is terminated by IDG for any reason other than cause, death, or
disability (in any such case a "Discharge"), then IDG shall pay to Executive, on
the date of Discharge, a lump sum cash amount equal to the present value of the
sum of (a) the greater of (i) twelve (12) months Base Salary, and (ii) the
amount of Base Salary that otherwise would have been payable to Executive for
the remainder of the Term plus (b) the bonus payment provided for in Section 3.2
hereof for the fiscal year in which the termination occurs. For purposes of the
present value calculation required by the preceding sentence, the parties shall
use as a rate IDG's then current cost of borrowing. Such payment shall be in
addition to other payments, if any, to which Executive is
-7-
8
entitled pursuant to Section 3 or Section 4 hereof. In addition, all stock
options theretofore granted to Executive shall remain in force and effect and
shall be exercisable until their expiration date, provided that any such options
otherwise subject to vesting based solely on the lapse of time shall be
immediately vested in full. The provisions of Sections 5, 6, and 8 shall
continue without regard to such Discharge or termination of this Agreement.
7.5 BY EXECUTIVE. If (a) IDG significantly reduces Executive's
authority or duties as provided for in this Agreement or Executive's standing
within IDG as a function of Executive's relationships with the Board or with
other members of management of IDG, or Executive's responsibilities for or
control over the direction or operation of IDG's business and personnel, (b) a
change of control of IDG occurs that is not consented to by Executive, (c)
Executive is not elected or retained as Chairman and Chief Executive Officer and
as a director of IDG, or (d) Executive is required by IDG, without his consent,
to relocate his primary residence from his current location, then, in any such
event, Executive may terminate this Agreement and such termination shall be
treated (subject to the provisions of the last sentence of this Section 7.5) as
if it were a Discharge under Section 7.4; provided that the Board of Directors
of IDG shall have received written notice from Executive of any reduction
described in clause (a) above upon which Executive proposes to base a
termination and IDG shall have failed within thirty (30) days thereafter to
reverse or cure the situation giving rise to the grounds asserted by Executive.
For purposes hereof, "change of control" shall mean (e) the acquisition by a
person or entity other than Executive or an affiliate of Executive, whether in
one or several transactions, by exchange, merger, consolidation, assignment,
stock spin-off, stock split-up, or other transaction (other than pursuant to a
registered underwritten public offering of voting stock by IDG), of an amount of
the voting stock of IDG, or of the right to vote or to direct the voting of such
amount of voting stock, sufficient to elect a majority of the Board of Directors
of IDG, or (f) a change in the membership of the Board of Directors of IDG such
that a majority of the members are persons who are not Continuing Directors. For
purposes of this Agreement, a "Continuing Director" is a person who is a member
of the Board of Directors of IDG on the date hereof or a person who is elected
as a director of IDG upon the nomination by or approval of a majority of the
Continuing Directors in office. If Executive terminates this Agreement due to a
change of control, then in lieu of the payment provided for in Section 7.4(a),
Executive shall receive a cash payment equal to the present value (based on
IDG's then current cost of borrowing) of Executive's Base Salary for the
remainder of the Term, or for a period of two years, whichever period is longer,
payable within thirty (30) days of the date of the occurrence of such event.
7.6 BY MUTUAL CONSENT. Nothing contained in this Agreement shall
prevent the parties from acting by mutual consent with respect to any matter,
including the terms or conditions for a termination of this Agreement, provided
that evidence thereof is in a writing signed by the party to be bound thereby.
8. LEGAL EXPENSE REIMBURSEMENTS
8.1 INDEMNIFICATION LEGAL EXPENSES. Without limiting the scope of any
indemnification to which Executive is or may be entitled under applicable law or
pursuant to IDG's Certificate of Incorporation, Bylaws, or contract for
indemnification of officers or
-8-
9
directors of IDG, IDG shall indemnify and hold Executive harmless from and
against the costs and expenses (including attorneys' fees and costs) of
Executive's defense with respect to any suit, investigation, or other action or
proceeding instituted or threatened against Executive by any person, agency,
body, or other entity that is based on, arises out of, or is related to any
position that Executive has after the date hereof with IDG or any of its
subsidiaries or other affiliates or otherwise related to the performance by
Executive of any duty or responsibility under this Agreement. To the maximum
extent permitted by applicable law, IDG agrees to advance to Executive the
amount of such costs and expenses as they are incurred by Executive (upon
written request by Executive therefor, accompanied by reasonably detailed
explanation of the basis for such advance(s)), and Executive agrees, to the
extent that such agreement may be required by applicable law to permit such
advances, to account to IDG for such advance(s), including to refund to IDG any
such amount that it may ultimately be determined (according to applicable law)
that Executive is not entitled to receive as indemnification or reimbursement
for such costs and expenses as a result of the final disposition of the
underlying suit, investigation, or other action or proceeding in respect of
which such costs or expenses were incurred. IDG agrees to take such corporate
action as may be necessary or advisable, if requested by Executive, to
authorize, approve, or effectuate and implement the rights conferred upon
Executive in this Section 8.1.
8.2 ATTORNEY'S FEES. If either Executive or IDG institutes an action
against the other in order to enforce the terms of this Agreement, whether in
court or by arbitration, the prevailing party shall receive its reasonable
attorney's fees from the non-prevailing party. Both parties agree to submit to
the court or arbitrator(s), as the case may be, the issue of deciding which
party, if either, is the prevailing party for purposes of this Section 8.2, and
in such case to decide the amount of attorney's fees that is reasonable in the
circumstances.
8.3 SURVIVAL. The provisions of this Section 8 shall survive any
termination of Executive's employment or of this Agreement.
9. MISCELLANEOUS AND GENERAL
9.1 NON-ASSIGNABILITY. (a) Neither this Agreement nor any right or
interest hereunder may be assigned by Executive, Executive's beneficiaries, or
legal representatives without IDG's prior written consent; provided, however,
that nothing in this Section 9.1 will preclude Executive from designating a
beneficiary to receive any benefits payable hereunder upon Executive's death or
incapacity. Notwithstanding the foregoing, this Agreement and any right or
interest of IDG hereunder may be assigned by IDG to any of its affiliates
without the consent of Executive; provided, however, that in the event of such
an assignment without the consent of Executive, IDG will remain liable for the
payment of all amounts payable to Executive hereunder.
(b) Except as required by law, no right to receive payments
under this Agreement will be subject to anticipation, commutation, alienation,
sale, assignment, encumbrance, charge, pledge, or hypothecation or to exclusion,
attachment levy or similar
-9-
10
process or assignment by operation of law, and any attempt, voluntary or
involuntary, to effect any such action will be null, void and of no effect.
9.2 WAIVER. The waiver by any party to this Agreement of a breach by
the other party of any of the provisions of this Agreement shall not operate as
or be construed as a waiver of any different or subsequent breach.
9.3 ENTIRE AGREEMENT. This Agreement constitutes and expresses the
entire agreement of the parties with respect to the subject matter hereof.
9.4 GOVERNING LAW; CHOICE OF FORUM; ETC. (a) This Agreement shall be
governed by, and construed and enforced in accordance with, the laws of the
State of Delaware (without regard to its rules of conflicts of laws); and the
laws of that state shall govern all of the rights, remedies, liabilities,
powers, and duties of the parties under this Agreement and of any arbitrator or
arbitrators to whom any matter hereunder may be submitted for resolution by the
parties hereto, as contemplated by and pursuant to Title 6, Section 2708 of the
Delaware Code.
(b) Any legal action or proceeding with respect to this
Agreement that alleges a breach of Sections 5, 6, or 8 shall be brought
exclusively in the federal courts located in the State of Delaware, assuming
subject matter jurisdiction thereof (which each party agrees not to challenge),
and by execution and delivery of this Agreement, Executive and IDG irrevocably
consent to the personal jurisdiction of such courts for the adjudication of such
matters; provided, however, that upon agreement of both parties, any such matter
may be submitted to arbitration pursuant to Section 9.4(c). Executive and IDG
irrevocably waive any objection, including any objection to the laying of venue
or based on the grounds of forum non conveniens, that either may now or
hereafter have to the bringing of any action or proceeding in such jurisdiction
for adjudication of such matter.
(c) Any controversy or claim arising out of or relating to
this Agreement, or the breach thereof, other than an allegation of a breach of
Sections 5, 6, or 8 hereof, shall be settled by arbitration in the District of
Columbia in accordance with the applicable rules of the American Arbitration
Association, and judgment upon the award rendered by the arbitrator(s) may be
entered in any court having jurisdiction thereof.
9.5 SEVERABILITY. Should any clause or any other portion of this
Agreement be determined to be void or unenforceable for any reason, such
determination shall not affect the validity or enforceability of any other
clause or portion of this Agreement, all of which shall remain in full force and
effect, unless the result of any such invalidity or unenforceability shall be to
cause a material failure of consideration to the party seeking to sustain the
validity or enforceability of the subject provision.
9.6 NOTICES. All notices and other communications hereunder shall be
deemed to have been duly given on (a) the date of receipt if delivered
personally or (b) the third business day after deposit in the United States
Mail, if sent certified mail, postage prepaid, to IDG at its address provided
following its signature to this Agreement (Attention: Chief Operating Officer),
-10-
11
or to Executive at the address provided following Executive's signature to this
Agreement, as the case may be, or to such other address as one party shall have
given to the other in accordance with this provision.
9.7 EFFECT OF CAPTIONS AND HEADINGS. The captions and headings
contained herein are for convenience only, do not constitute a part of this
Agreement, and shall not be used in construing it.
IN WITNESS WHEREOF, the parties have executed this Agreement, as an
instrument under seal, as of the day and year first written above.
[SEAL] "IDG"
Attest: IDN FORMATION CORP.
By:
------------------------------------ -------------------------------------
Secretary or Assistant Secretary Xxxxxxxx X. Xxxxx, President
Address: 0000 Xxxxx Xxxxx
Xxxxxx, Xxxxxxx 00000
"EXECUTIVE"
(SEAL)
----------------------------------
XXXXXX X. XXXXXX
Address: 0000 Xxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
-11-
