EXHIBIT 99.3
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EMPLOYMENT AGREEMENT
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THIS EMPLOYMENT AGREEMENT ("Agreement") is made and entered into this
20th day of December, 2000, by and between BrightCube, Inc., a Nevada
corporation formerly known as PhotoLoft, Inc. ("Employer"), and Al Marco, an
individual ("Employee").
RECITALS
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A. WHEREAS, Employee has experience and expertise applicable to
employment with Employer to perform as the Chief Executive Officer of Employer,
Employer has agreed to employ Employee and Employee has agreed to enter into
such employment on the terms set forth in this Agreement.
B. WHEREAS, Employee acknowledges that this Agreement is necessary
for the protection of Employer's investment in its business, good will,
products, methods of operation, information, and relationships with its
customers and other employees.
C. WHEREAS, Employer acknowledges that Employee desires definition
of his compensation and benefits, and other terms of his employment.
NOW, THEREFORE, in consideration thereof and of the covenants and
conditions contained herein, the parties agree as follows:
AGREEMENT
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1. TERM OF AGREEMENT
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1.1 Initial Term. The initial term of this Agreement shall
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begin on December 20, 2000 ("Commencement Date") and shall continue until the
earlier of: (a) the date on which it is terminated pursuant to Section 5; or (b)
three (3) years following the Commencement Date ("Initial Term"). After the
expiration of the Initial Term, Employee shall be employed on an at-will basis,
with either party able to terminate the employment, with or without cause and
with or without notice.
2. EMPLOYMENT
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2.1 Employment of Employee. Employer agrees to employ
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Employee to render services on the terms set forth herein. Employee hereby
accepts such employment on the terms and conditions of this Agreement.
2.2 Position and Duties. Employee shall serve as the Chief
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Executive Officer of Employer, reporting to the Board of Directors of Employer,
and shall have the general powers and duties of management usually vested in
that office in a corporation and such other powers and duties as may be
prescribed from time to time by the Board of Directors.
EXHIBIT 99.3
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2.3 Board Membership. For so long as Employee is serving as
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the Chief Executive Officer of Employer, Employer will nominate Employee to
serve as a member of its Board of Directors and will take reasonable commercial
actions to assure that Employee is elected as a member of the Board of
Directors. Employee agrees to serve in such capacity for no additional
compensation beyond that already provided in this Agreement.
2.4 Standard of Performance. Employee agrees that he will at
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all times faithfully and industriously and to the best of his ability,
experience and talents perform all of the duties that may be required of and
from him pursuant to the terms of this Agreement. Such duties shall be
performed at such place or places as the interests, needs, business and
opportunities of Employer shall require or render advisable.
2.5 Exclusive Service. Employee shall devote all of his
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business energies and abilities and all of his productive time to the
performance of his duties under this Agreement (reasonable absences during
holidays and vacations excepted), and shall not, without the prior written
consent of Employer, render to others any service of any kind (whether or not
for compensation) that, in the sole opinion of Employer, would materially
interfere with the performance of his duties under this Agreement. The
foregoing notwithstanding, the expenditure of reasonable amounts of time for
personal business, charitable, community or professional activities will not be
deemed a breach of this Agreement, provided that such activities, individually
or in the aggregate, in the opinion of Employer do not interfere materially with
the performance of Employee's duties hereunder, and further provided that in
engaging in such activities he complies with the confidentiality and duty of
loyalty provisions of this Agreement. The foregoing notwithstanding, Employer
acknowledges that Employee owns 100% of Marco Fine Arts and consents to the
retention of such ownership so long as Marco Fine Arts does not compete with the
business of Employer.
3. COMPENSATION
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3.1 Compensation. During the term of this Agreement,
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Employer shall pay the amounts and provide the benefits described in this
Section 3, and Employee agrees to accept such amounts and benefits in full
payment for Employee's services under this Agreement.
3.2 Base Salary. Employer shall pay to Employee a base
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salary of $240,000 annually in equal semi-monthly installments, less applicable
taxes. At Employer's sole discretion, Employee's base salary may be increased
annually.
3.3 Discretionary Bonus. If Employer's revenue for 2001 is
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at least $17 million and EBITDA is at least $3 million, Employee shall receive,
at Employee's option, either (i) a bonus of 100% of Base Salary in cash or (ii)
a stock option grant for the number of shares of Employer's common stock (the
"Common Stock") equal to 120% of Base Salary divided by the average closing
stock price. The determination of revenue and EBITDA for purposes of this
calculation shall be such amounts from or derived from Employer's audited 2001
financial statements. Such bonus shall be paid within 3 months of December 31,
2001. For purposes of this section only, "average closing stock price" shall
mean the average of the closing prices of the Common Stock for the 10 trading
days prior to the date the bonus is paid. All stock options granted under this
Section 3.3 shall be granted at fair market value on the date of grant and shall
vest in accordance with the terms of Employer's policies then in effect for
similarly situated employees. Employee is eligible to receive an annual bonus
in subsequent years of this agreement, as determined by the Board of Directors
in its sole discretion. Such discretionary bonus will be based on performance
criteria and milestones. Both the performance criteria and milestones are to be
established by the Board of Directors within four (4) months after each Employer
year end.
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EXHIBIT 99.3
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3.4 Equity Incentive Plan.
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(a) Employee shall be granted an option to purchase
1,500,000 shares of the Common Stock, at an exercise price equal to the closing
market price of the Common Stock on the day of the grant, which will be the
first day of employment, vested over a three (3) year period, as follows:
1/12th each 3 months from the Commencement Date. The other terms and conditions
of Employee's option shall be as set forth in the option documents evidencing
the same, and such option shall be subject to the terms and conditions of the
option plan of Employer.
(b) Except as otherwise set forth herein, vesting of
options will cease upon the termination of Employee's employment with Employer.
3.5 Fringe Benefits. Subject to Section 3.7 and upon
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satisfaction of the applicable eligibility requirements, Employee shall be
entitled to all fringe benefits which Employer may make generally available from
time to time for similar employees. Such benefits shall include without
limitation those available, if any, under any group insurance, profit sharing,
pension or retirement plans or sick leave policy.
3.6 Vacations. During Employee's first year of employment
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with Employer, as measured from the Commencement Date, Employee shall accrue, on
a daily basis, a total of fifteen (15) days vacation per year. After Employee's
completion of one full year of employment with Employer, as measured from the
Commencement Date, Employee shall accrue, on a daily basis, a total of twenty
(20) days vacation per year. However, in no event shall Employee's accrued and
unused vacation exceed a total of thirty (30) days. Any accrued but unused
vacation will be paid to Employee at the time that his employment is terminated.
3.7 Deduction from Compensation. Employer shall deduct and
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withhold from all compensation payable to Employee all amounts required to be
deducted or withheld pursuant to any present or future law, ordinance,
regulation, order, writ, judgment, or decree requiring such deduction and
withholding.
4. REIMBURSEMENT OF EXPENSES
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4.1 Travel and Other Expenses. Employer shall pay to or
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reimburse Employee for those travel, promotional and similar expenditures
incurred by Employee which Employer determines are reasonably necessary for the
proper discharge of Employee's duties under this Agreement and for which
Employee submits appropriate receipts and indicates the amount, date, location
and business character in a timely manner.
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EXHIBIT 99.3
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4.2 Liability Insurance. Employer shall provide Employee
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with officers and directors' insurance, or other liability insurance, consistent
with its usual business practices, to cover Employee against all insurable
events related to his employment with Employer.
5. TERMINATION
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5.1 Termination by Employer With Good Cause. Employer may
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terminate Employee's employment at any time, without notice, for Good Cause (as
defined below). If Employer should terminate Employee's employment with Good
Cause, Employer shall pay Employee his salary prorated through the date of
termination, at the rate in effect at the time notice of termination is given,
together with any benefits, such as vacation, accrued through the date of
termination. Employer shall have no further obligations to pay any compensation
or any other benefits to Employee under this Agreement or any other agreement,
and all unvested options will terminate.
5.2 Good Cause. For purposes of this Agreement, a
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termination shall be for "Good Cause" if Employee, in the subjective, good faith
opinion of Employer, shall:
(a) be convicted of (1) any felony or (2) a misdemeanor
which, in the sole, but good faith, opinion of Employer involves moral
turpitude;
(b) commit an act, or fail to commit an act, that
amounts to willful misconduct, wanton misconduct or gross negligence;
(c) engage in any activity that is in conflict with
Employee's employment, provided that, for the purpose of this subsection only,
with respect to the first such act only, and only if such act is curable,
Employee shall have 3 days within which to cure the violation, after receiving
written notice from Employer specifying in reasonable detail the basis for any
such violation;
(d) commit an act of fraud, misappropriation of funds or
embezzlement in connection with his duties;
(e) breach Employee's fiduciary duty to Employer,
including, but not limited to, acts of self-dealing (whether or not for personal
profit);
(f) materially breach this Agreement, provided that, for
purposes of this subsection only, and with respect to the first such breach
only, Employee shall have 15 days within which to cure the breach, if curable,
after receiving written notice from Employer specifying in reasonable detail the
basis for any breach; or
(g) fail to substantially perform the responsibilities
and duties specified herein (other than any such failure resulting from
Employee's incapacity due to physical or mental illness), provided that, for the
purpose of this subsection only, and with respect to the first failure on
particular grounds, and three such failures in total during the course of this
Agreement, only, Employee shall have 15 days within which to cure the failure,
after receiving written notice from Employer specifying in reasonable detail the
basis for any failure.
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EXHIBIT 99.3
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5.3 Termination by Employer Without Good Cause.
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(a) If Employer terminates Employee's employment without
Good Cause within 18 months of the Commencement Date, then Employer shall pay
Employee: (i) all accrued but unpaid base salary and vacation through the date
of such termination, in a lump sum; and (ii) an amount equal to the remainder of
the base salary in effect at the time through the Initial Term.
(b) If Employer terminates Employee's employment without
Good Cause after the 18th month from the Commencement Date, then Employer shall
pay Employee: (i) all accrued but unpaid base salary and vacation through the
date of such termination, in a lump sum, and (ii) the lesser of (A) twelve (12)
months salary (at the rate in effect at the time of termination) or (B) the
remaining base salary that would be payable through the conclusion of the
Initial Term.
(c) The severance payments under either subsection
(2)(a)(ii) or subsection (2)(b)(ii) above, will be made in 24 equal semi-monthly
installments, beginning fifteen (15) days after the effective date of the
Release noted below.
(d) Notwithstanding anything else set forth herein,
Employer shall not be required to pay any amount under this Section 5.3 that
would reduce Employer's cash balance below $4 million at the date of
termination. For purposes of this Section 5.3 cash shall include cash and what
would be considered cash equivalents under Generally Accepted Accounting
Principles.
(e) In addition, if Employee is terminated without Good
Cause, all of Employee's unvested stock options that have been granted under
Section 3.4 and Section 3.3, to the extent that they have actually been granted,
shall vest as of the date of termination. To be eligible for any payments
and/or accelerated vesting as set forth in this Section 5.3 (other than payment
for accrued salary and accrued vacation days), Employee must execute a
Separation Agreement and General Release substantially in the form attached
hereto as Exhibit A (the "Release") for the benefit of the Employer. Employer
shall have no further obligations to Employee under this Agreement.
5.4 Change in Control.
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(a) If Employee's employment is terminated, without
"Good Cause," during the first 12 months following a Change in Control, then
Employer shall pay Employee: (i) all accrued but unpaid base salary and
vacation through the date of such termination, in a lump sum, and (ii) the
lesser of (A) twelve (12) months salary (at the rate in effect at the time of
termination) or (B) the remaining base salary that would be payable through the
conclusion of the Initial Term.
(b) The payment referred to in subsection (a)(ii) shall
be made in 24 equal semi-monthly installments, beginning fifteen (15) days after
the effective date of the Release noted above. In addition, all of Employee's
unvested options that have been granted under Section 3.4 and Section 3.3, to
the extent that they have actually been granted, shall vest as of the date of
termination. To be eligible for such payment referenced in subsection (a)(ii)
and to receive the accelerated vesting on his options, Employee must execute the
Release. Employer shall have no further obligations to Employee under this
Agreement.
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EXHIBIT 99.3
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(c) For purposes of this Agreement, a "Change in
Control" shall mean any sale or other disposition of all or substantially all of
the assets of Employer, or the acquisition, in a single transaction or series of
related transactions, of more than fifty percent (50%) of the outstanding shares
of the voting stock of Employer by one party or by two or more parties acting in
concert, provided that a Change in Control shall not be deemed to have occurred
by virtue of a sale of equity or debt to unrelated investors or a strategic
partner for fair market value or greater. Notwithstanding anything herein to
the contrary, if Employee is a person or member of a group that acquires control
of Employer in an event that would otherwise be a Change in Control, such event
shall not be deemed a Change in Control and Employee shall have no right to
benefits hereunder as a result of such event.
5.5 Death or Disability. To the extent consistent with
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federal and state law, Employee's employment, salary, and accrual of commissions
shall terminate on his death or disability. "Disability" means any health
condition, physical or mental, or other cause beyond Employee's control, that
prevents him from performing his duties, even after reasonable accommodation is
made by Employer, for a period of 180 consecutive days within any 360 day
period. In the event of termination due to death or Disability, Employer shall
pay Employee (or his legal representative) his salary prorated through the date
of termination, at the rate in effect at the time of termination, together with
any benefits, including, without limitation, prorated bonus (to the extent
earned) and vacation, accrued through the date of termination. Employee shall
also be entitled to receive an amount equal to the lesser of: (i) six (6) months
salary (at the rate in effect at the time of termination); or (ii) the remaining
salary that would be payable through the conclusion of the Initial Term. This
payment will be made in 12 equal semi-monthly installments, beginning fifteen
(15) days after the effective date of the Release noted above. To be eligible
for this payment, Employee (or his legal representative) must execute the
Release. Employer shall have no further obligations to Employee (or his legal
representative) under this Agreement.
5.6 Return of Employer Property. Within five (5) days after
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the Termination Date, Employee shall return to Employer all products, books,
records, forms, specifications, formulae, data processes, designs, papers and
writings relating to the business of Employer including without limitation
proprietary or licensed computer programs, customer lists and customer data,
and/or copies or duplicates thereof in Employee's possession or under Employee's
control. Employee shall not retain any copies or duplicates of such property
and all licenses granted to him by Employer to use computer programs or software
shall be revoked on the Termination Date.
6. DUTY OF LOYALTY
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6.1 During the term of this Agreement, Employee shall not,
without the prior written consent of Employer, directly or indirectly render
services of a business, professional, or commercial nature to any person or
firm, whether for compensation or otherwise, or engage in any activity directly
or indirectly competitive with or adverse to the business or welfare of
Employer, whether alone, as a partner, or as an officer, director, employee,
consultant, or holder of more than 1% of the capital stock of any other
corporation. Otherwise, Employee may make personal investments in any other
business so long as these investments do not require him to participate in the
operation of the companies in which he invests.
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EXHIBIT 99.3
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7. NO SOLICITATION OF EMPLOYEES OR CUSTOMERS
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Employee agrees that during his employment with Employer, and for
one (1) year thereafter, he will not, with respect to fields in which Employee
knows, or has reason to know, that Employer conducts, or intends to conduct,
business at the time Employee's employment is terminated, directly or indirectly
call on, or otherwise solicit, or accept business from any actual customer or
potential customer known by Employee to be targeted by Employer, nor will he
assist others in doing so. Employee further agrees that he will not, during the
period stated above, encourage or solicit any other employee of Employer to
terminate his or her employment for any reason, nor will he assist others to do
so.
8. OTHER PROVISIONS
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8.1 Compliance With Other Agreements. Employee represents
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and warrants to Employer that the execution, delivery and performance of this
Agreement will not conflict with or result in the violation or breach of any
term or provision of any order, judgment, injunction, contract, agreement,
commitment or other arrangement to which Employee is a party or by which he is
bound, including without limitation any agreement restricting the sale of
products similar to Employer's products in any geographic location or otherwise.
Employee acknowledges that Employer is relying on his representation and
warranty in entering into this Agreement, and agrees to indemnify Employer from
and against all claims, demands, causes of action, damages, costs or expenses
(including attorneys' fees) arising from any breach thereof.
8.2 Inventions Agreement. Employee agrees that he will
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execute Employer's standard agreement regarding inventions and confidentiality.
8.3 Injunctive Relief. Employee acknowledges that the
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services to be rendered under this Agreement and the items described in Sections
6, and 7 are of a special, unique and extraordinary character, that it would be
difficult or impossible to replace such services or to compensate Employer in
money damages for a breach of this Agreement. Accordingly, Employee agrees and
consents that if he violates any of the provisions of this Agreement, Employer,
in addition to any other rights and remedies available under this Agreement or
otherwise, shall be entitled to temporary and permanent injunctive relief,
without the necessity of proving actual damages and without the necessity of
posting any bond or other undertaking in connection therewith.
8.4 Attorneys' Fees. The prevailing party in any suit or
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other proceeding brought to enforce, interpret or apply any provisions of this
Agreement, shall be entitled to recover all costs and expenses of the proceeding
and investigation (not limited to court costs), including all attorneys' fees.
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EXHIBIT 99.3
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8.5 Counsel. The parties acknowledge and represent that,
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prior to the execution of this Agreement, they have had an opportunity to
consult with their respective counsel concerning the terms and conditions set
forth herein. Additionally, Employee represents that he has received
independent legal advice concerning the taxability of any consideration received
under this Agreement. Employee has not relied upon any advice from Employer
and/or its attorneys with respect to the taxability of any consideration
received under this Agreement. Employee further acknowledges that Employer has
not made any representations to him with respect to tax issues.
8.6 Nondelegable Duties. This is a contract for Employee's
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personal services. The duties of Employee under this Agreement are personal and
may not be delegated or transferred in any manner whatsoever, and shall not be
subject to involuntary alienation, assignment or transfer by Employee during his
life.
8.7 Entire Agreement. This Agreement is the only agreement
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and understanding between the parties pertaining to the subject matter of this
Agreement, and supersedes all prior agreements, summaries of agreements,
descriptions of compensation packages, discussions, negotiations,
understandings, representations or warranties, whether verbal or written,
between the parties pertaining to such subject matter.
In addition, Employee acknowledges and agrees that any and all
employment agreements, arrangements or understandings between Employee and EVG
(the "EVG Employment Arrangements"), if any, are terminated as of the date of
this Agreement and that neither Extreme Velocity Group, Inc. or its predecessors
(together, "EVG"), the surviving corporation in the merger of PhotoL Acquisition
Corp. with and into EVG (the "Surviving Corporation") nor Employer have any
obligations to Employee in connection with or with respect to such EVG
Employment Arrangements.
Furthermore, Employee fully and forever releases and discharges
Employer, EVG and the Surviving Corporation and each of their current, former
and future parents, subsidiaries, related entities, employee benefit plans and
their fiduciaries, predecessors, successors, officers, directors, shareholders,
agents, employees and assigns, with respect to any and all claims, liabilities
and causes of action arising from or in connection with the EVG Employment
Arrangements, Employee's employment with EVG prior to the date hereof or the
cessation of such prior employment.
8.8 Governing Law. The validity, construction and
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performance of this Agreement shall be governed by the laws, without regard to
the laws as to choice or conflict of laws, of the State of California.
8.9 Venue. If any dispute arises regarding the application,
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interpretation or enforcement of any provision of this Agreement, including
fraud in the inducement, such dispute shall be resolved either in federal or
state court in Los Angeles, California.
8.10 Severability. The invalidity or unenforceability of any
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particular provision of this Agreement shall not affect the other provisions,
and this Agreement shall be construed in all respects as if any invalid or
unenforceable provision were omitted.
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EXHIBIT 99.3
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8.11 Amendment and Waiver. This Agreement may be amended,
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modified or supplemented only by a writing executed by each of the parties.
Either party may in writing waive any provision of this Agreement to the extent
such provision is for the benefit of the waiving party. No waiver by either
party of a breach of any provision of this Agreement shall be construed as a
waiver of any subsequent or different breach, and no forbearance by a party to
seek a remedy for noncompliance or breach by the other party shall be construed
as a waiver of any right or remedy with respect to such noncompliance or breach.
8.12 Binding Effect. The provisions of this Agreement shall
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bind and inure to the benefit of the parties and their respective successors and
permitted assigns.
8.13 Notice. Any notices or communications required or
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permitted by this Agreement shall be deemed sufficiently given if in writing and
when delivered personally or 48 hours after deposit with the United States
Postal Service as registered or certified mail, postage prepaid and addressed as
follows:
(a) If to Employer, to the principal office of Employer
in the State of California, marked "Attention: Xxxxxx X. Xxxxxx, Chairman"; or
(b) If to Employee, to the most recent address for
Employee appearing in Employer's records.
8.14 Headings. The Section and other headings contained in
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this Agreement are for reference purposes only and shall not affect in any way
the meaning or interpretation of this Agreement.
[SIGNATURE PAGE FOLLOWS]
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EXHIBIT 99.3
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first above written.
EMPLOYER
BrightCube, Inc.
By:_______________________________
Name:_____________________________
Title:____________________________
EMPLOYEE
__________________________________
Al Marco
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EXHIBIT 99.3
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EXHIBIT A
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Separation Agreement and General Release
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