Exhibit 10.1
EXECUTIVE EMPLOYMENT AGREEMENT
THIS EXECUTIVE EMPLOYMENT AGREEMENT (this "Agreement") is made and entered
into and is effective as of the 8th day of March, 2005 (the "Effective Date"),
between Onstream Media Corporation, a Florida corporation, whose principal place
of business is 0000 X.X. 00xx Xxxxxx, Xxxxxxx Xxxxx, Xxxxxxx 00000 (the
"Company") and Xxxxxx X. Xxxxxxxxx, an individual whose address is 0000 XX 00xx
Xxxxx, Xxxx Xxxxxxxxxx, Xxxxxxx 00000-0000 (the "Executive").
RECITALS
A. The Company is a Florida corporation and is principally engaged in the
business of providing managed services including webcasting, digital asset
management, collaboration and video and audio transport, storage and encoding
(the "Business").
B. The Company presently employs the Executive and desires to continue to
employ the Executive and the Executive desires to continue in the employ of the
Company.
C. The Company has established a valuable reputation and goodwill in the
Business.
D. The Executive, by virtue of the Executive's employment with the Company
will become familiar with and possess the manner, methods, trade secrets and
other confidential information pertaining to the Company's business, including
the Company's client base.
NOW, THEREFORE, in consideration of the mutual agreements herein made, the
Company and the Executive do hereby agree as follows:
1. Recitals. The above recitals are true, correct, and are herein
incorporated by reference.
2. Employment. The Company hereby employs the Executive, and the Executive
hereby accepts employment, upon the terms and conditions hereinafter set forth.
3. Authority and Power During Employment Period.
a. Duties and Responsibilities. During the term of this Agreement,
the Executive shall serve as the Chief Financial Officer and a Senior Vice
President of the Company and shall have general executive operating supervision
and authority over the financial aspects and affairs of the Company, its
subsidiaries and divisions, including accounting and reporting matters, subject
to the guidelines and direction of the Board of Directors of the Company.
b. Time Devoted. Throughout the term of the Agreement, the Executive
shall devote substantially all of the Executive's business time and attention to
the business and affairs of the Company consistent with the Executive's senior
executive position with the Company, except for reasonable vacations and except
for illness or incapacity, but nothing in the Agreement shall preclude the
Executive from engaging in personal business including as a member of the board
of directors of related companies, charitable and community affairs, provided
that such activities do not interfere with the regular performance of the
Executive's duties and responsibilities under this Agreement.
4. Term. The Term of employment hereunder will commence on the date as set
forth above and terminate three(3) years from the Effective Date, and such term
shall automatically be extended for successive one (1) year terms thereafter
unless (a) the parties mutually agree in writing to alter or amend the terms of
the Agreement or (b) one or both of the parties exercises their right, pursuant
to Section 6 herein, to terminate this employment relationship. For purposes of
this Agreement, the Term (the "Term") shall include the initial term and all
renewals thereof.
5. Compensation and Benefits.
a. Salary. The Executive shall be paid a base salary (the "Base
Salary"), payable semi-monthly, at an annual rate of no less than One Hundred
Fifty Thousand Dollars ($150,000), with annual incremental increases of ten
(10%) percent per year, such increases to be effective starting December 27,
2005.
b. Performance Based Bonus. As additional compensation, the
Executive shall be entitled to receive a bonus ("Bonus") for each fiscal year
during the Term of the Executive's employment by the Company in an amount equal
to one percent (1%) of Earnings of the Company Before Income Tax, Depreciation
and Amortization (EBITDA) in excess of the EBITDA for the previous fiscal year
(only to the extent of positive net income for such period). The base year for
the Bonus shall commence fiscal 2005. The Bonus shall be payable within thirty
(30) days of the determination of the amount of the Bonus; provided that at the
Executive's sole discretion, to elect to take his bonus in cash or in restricted
common stock of the Company, based upon an amount of such restricted common
stock which shall be equal to Seventy-Five (75%) of the fair market value of the
Company's common stock, which fair market value shall be equal to the average of
the closing price for the five (5) prior trading days immediately prior to the
determination of such Bonus. Notwithstanding the above, Executive's election to
receive stock in accordance with this Section 5(b) is subject to approval by a
majority of the Company's shareholders.
c. Stock Options. The Executive has been granted, under the
Company's stock option plan, options ("Options") to purchase an aggregate of
150,000 shares of Common Stock at an exercise price of $1.21 per share, which
was the fair market value at the date such options were granted; such Options
will be exercisable for a period of four (4) years from the date of vesting,
unless sooner terminated as described herein. The Options shall vest in
installments of 50,000 options per year, beginning on December 15, 2005, subject
to anti-dilution provisions relating to adjustments in the event that the
Company, among other things, declares stock dividends, effects forward or
reverse stock splits. In addition, the Options shall automatically vest upon the
happening of the following events: (i) change of control of the Company, as
defined herein; or The unvested Options shall automatically terminate upon the
happening of the following: (i) the Executive's termination for Cause, as
defined herein; and (ii) the Executive's voluntary termination.
In the event this Agreement is not renewed or the Executive is
terminated for other than Cause, the Executive shall be entitled to register the
stock earned, vested and received by the Executive upon the exercise of the
options provided hereunder on the terms and conditions set forth in a
registration rights agreement to be mutually agreed upon by and between
Executive and the Company. The Company shall file such Registration Statement as
promptly as practicable and at its sole expense. The Company will use its
reasonable best efforts through its officers, directors, auditors and counsel in
all matters necessary or advisable to file and cause to become effective such
Registration Statement as promptly as practicable.
b. Executive Benefits. The Executive shall be entitled to
participate in all benefit programs of the Company currently existing or
hereafter made available to executives and/or other salaried employees,
including, but not limited to, pension and other retirement plans, group life
insurance, hospitalization, surgical and major medical coverage, sick leave,
disability and salary continuation, vacation and holidays, cellular telephone
and all related costs and expenses, long-term disability, and other fringe
benefits. In addition the executive will be entitled to receive $1,500 monthly,
effective starting with the payment for the month of January 2005, as part of a
deferred compensation plan for the executive's retirement.
c. Vacation. During each fiscal year of the Company, the Executive
shall be entitled to reasonable vacation time and to utilize such vacation as
the Executive shall determine; provided however, that the Executive shall
evidence reasonable judgment with regard to appropriate vacation scheduling.
Notwithstanding the foregoing, Executive shall be entitled to four (4) weeks
vacation per year, with unused vacation accruing to the following year in
accordance with the Company's policies.
d. Business Expense Reimbursement. During the Term of employment,
the Executive shall be entitled to receive proper reimbursement for all
reasonable, out-of-pocket expenses incurred by the Executive (in accordance with
the policies and procedures established by the Company for its senior executive
officers) in performing services hereunder, provided the Executive properly
accounts therefor. Executive shall be allowed a maximum of $1,000 per year
reimbursement for continuing education expenses.
e. Automobile Expenses. The Company shall provide the Executive with
an automobile allowance including insurance and maintenance not to exceed $750
per month.
g. Place of Employment - Moving Allowance. This Agreement is entered
into on the basis that the principal place of business of the Company, and the
location from which Executive is to be based for the performance of his services
hereunder, is Pompano Beach, Florida. In the event that the Company shall change
the location of Company's principal office, or otherwise require Executive to be
based and/or to operate from another location which is more than fifty (50)
miles further from Executive's then-current residence to the Company's current
headquarters office at 0000 X.X. 00xx Xxxxxx, Xxxxxxx Xxxxx, Xxxxxxx 00000,
Company shall reimburse Executive for all moving and relocation expenses paid or
incurred in connection with Executive's relocation to a new residence closer to
Company's new principal office.
6. Consequences of Termination of Employment.
a. Death. In the event of the death of the Executive during the Term,
salary shall be paid to the Executive's designated beneficiary, or, in the
absence of such designation, to the estate or other legal representative of the
Executive for a period of six (6) months from and after the date of death. The
Company shall also be obligated to pay to the Executive's estate or heirs, as
the case may be, such amount of Bonus based upon (i) the formula set forth in
Section 5(b) of this Agreement, and (ii) the greater of (a) the Bonus earned or
accrued for such fiscal year annualized for a 12-month period, or (b) the Bonus
for the prior year. Other death benefits will be determined in accordance with
the terms of the Company's benefit programs and plans.
b. Disability.
(1) In the event of the Executive's disability, as hereinafter
defined, the Executive shall be entitled to compensation in accordance with the
Company's disability compensation practice for senior executives, including any
separate arrangement or policy covering the Executive, but in all events the
Executive shall continue to receive the Executive's salary for a period, at the
annual rate in effect immediately prior to the commencement of disability, of
not less than 180 days from the date on which the disability has been deemed to
occur as hereinafter provided below. Any amounts provided for in this Section
6(b) shall not be offset by other long-term disability benefits provided to the
Executive by the Company.
(2) "Disability," for the purposes of this Agreement, shall be
deemed to have occurred in the event (A) the Executive is unable by reason of
sickness or accident to perform the Executive's duties under this Agreement for
an aggregate of 180 days in any twelve-month period or (B) the Executive has a
guardian of the person or estate appointed by a court of competent jurisdiction.
Termination due to disability shall be deemed to have occurred upon the first
day of the month following the determination of disability as defined in the
preceding sentence.
Anything herein to the contrary notwithstanding, if, following a termination of
employment hereunder due to disability as provided in the preceding paragraph,
the Executive becomes reemployed, whether as an Executive or a consultant to the
Company, any salary, annual incentive payments or other benefits earned by the
Executive from such reemployment shall offset any salary continuation due to the
Executive hereunder commencing with the date of re-employment.
c. Termination by the Company for Cause.
(1) Nothing herein shall prevent the Company from terminating
Employment for "Cause," as hereinafter defined. The Executive shall continue to
receive salary only for the period ending twenty (20) days after the date of
such termination plus any accrued Bonus through such date of termination. Any
rights and benefits the Executive may have in respect of any other compensation
shall be determined in accordance with the terms of such other compensation
arrangements or such plans or programs.
(2) "Cause" shall mean and include those actions or events specified
below in subsections (A) through (E) to the extent the same occur, or the events
constituting the same take place, subsequent to the date of execution of this
Agreement: (A) Committing or participating in an injurious act of fraud, gross
neglect or embezzlement against the Company; (B) committing or participating in
any other injurious act or omission wantonly, willfully, recklessly or in a
manner which was grossly negligent against the Company, monetarily or otherwise;
(C) engaging in a criminal enterprise involving moral turpitude; (D) conviction
of an act or acts constituting a felony under the laws of the United States or
any state thereof; or (E) any assignment of this Agreement by the Executive in
violation of Section 15 of this Agreement. No actions, events or circumstances
occurring or taking place at any time prior to the date of this Agreement shall
in any event constitute or provide any basis for any termination of this
Agreement for Cause;
(3) Notwithstanding anything else contained in this Agreement, this
Agreement will not be deemed to have been terminated for Cause unless and until
there shall have been delivered to the Executive a notice of termination stating
that the Executive committed one of the types of conduct set forth in this
Section 6(c) contained in this Agreement and specifying the particulars thereof
and the Executive shall be given a thirty (30) day period to cure such conduct,
if possible.
d. Termination by the Company Other than for Cause. The foregoing
notwithstanding, the Company may terminate the Executive's employment for
whatever reason it deems appropriate; provided, however, that in the event such
termination is not based on Cause, as provided in Section 6(c) above, the
Company may terminate this Agreement upon giving three (3) months' prior written
notice. During such three (3) month period, the Executive shall continue to
perform the Executive's duties pursuant to this Agreement, and the Company shall
continue to compensate the Executive in accordance with this Agreement.
Subsequent to such three month period, the Executive shall be entitled to
receive Compensation and Benefits, in accordance with this Agreement, for a
period of six months, including all benefits the Executive is entitled to under
this agreement or additional benefits as provided by the Company to other
Executives prior to the termination date.
e. Voluntary Termination. In the event the Executive terminates the
Executive's employment on the Executive's own volition (except as provided in
Section 6 (f) or Section 6(g)) prior to the expiration of the Term of this
Agreement, including any renewals thereof, such termination shall constitute a
voluntary termination and in such event the Executive shall be limited to the
same rights and benefits as provided in connection with a termination for Cause
as provided in Section 6(c). Notwithstanding the provisions of this Subsection
(e), in the event the Executive gives the Company two (2) months written notice
of his intent to voluntarily terminate this Agreement, he will be entitled to
continue to receive compensation in accordance with this Agreement during such
period as well as for one month subsequent to termination.
f. Constructive Termination of Employment. If the Executive so
elects, a termination by the Company other than for Cause shall be deemed to
have occurred in the event of (i) a significant change in the Executive's
position as described in Section 3 hereof or (ii) a change in Executive's
principal office to a location outside of Broward County or Palm Beach County as
long as the Company has its corporate headquarters within those counties. The
Executive shall give written notice to the Board of Directors of the particulars
of any event that has occurred which would result in Constructive Termination
hereunder and the Company shall be given the opportunity, within fifteen (15)
days of its receipt of such notice, to cure said event.
g. Termination Following a Change of Control.
(1) In the event that a "Change in Control" of the Company shall
occur at any time during the Term hereof, the Executive shall have the right to
terminate the Executive's employment under this Agreement upon thirty (30) days
written notice given at any time within one year after the occurrence of such
event, and such termination of the Executive's employment with the Company
pursuant to this Section 6(g)(1), and, in any such event, such termination shall
be deemed to be a Termination by the Company other than for Cause and the
Executive shall be entitled to such Compensation and Benefits as set forth in
Subsection 6(h) of this Agreement.
(2) For purposes of this Agreement, a "Change in Control" of the
Company shall mean a change in control (A) as set forth in Section 280G of the
Internal Revenue Code or (B) of a nature that would be required to be reported
in response to Item 1 of the current report on Form 8K, as in effect on the date
hereof, pursuant to Section 13 or 15(d) of the Securities Exchange Act of 0000
(xxx "Xxxxxxxx Xxx"); provided that, without limitation, such a change in
control shall be deemed to have occurred at such time as:
(A) any "person", other than the Executive, (as such term is used in
Section 13(d) and 14(d) of the Exchange Act) is or becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Company representing thirty percent (30%) or
more of the combined voting power of the Company's outstanding securities then
having the right to vote at elections of directors; or,
(B) there is a failure to elect three or more (or such number of
directors as would constitute a majority of the Board of Directors) candidates
nominated by management of the Company to the Board of Directors; or
(C) the individuals who at the commencement date of the Agreement
constitute the Board of Directors cease for any reason to constitute a majority
thereof unless the election, or nomination for election, of each new director
was approved by a vote of at least two thirds of the directors then in office
who were directors at the commencement of the Agreement; or
(D) the business of the Company for which the Executive's services
are principally performed is disposed of by the Company pursuant to a partial or
complete liquidation of the Company, a sale of assets (including stock of a
subsidiary of the Company) or otherwise.
Anything herein to the contrary notwithstanding, this Section 6(g)(2) will not
apply where the Executive gives the Executive's explicit written waiver stating
that for the purposes of this Section 6(g)(2) a Change in Control shall not be
deemed to have occurred. The Executive's participation in any negotiations or
other matters in relation to a Change in Control shall in no way constitute such
a waiver which can only be given by an explicit written waiver as provided in
the preceding sentence.
(3) In the event that, within twelve (12) months of any Change in
Control of the Company or any "Attempted Change in Control," as hereinafter
defined of the Company, the Company terminates the employment of the Executive
under this Agreement, other than for Cause as defined in Section 6(d), then, in
any such event, such termination shall be deemed to be a Termination by the
Company other than for Cause and the Executive shall be entitled to such
Compensation and Benefits as set forth in Subsection 6(h) of this Agreement.
An "Attempted Change in Control" shall be deemed to have occurred if
any substantial attempt, accompanied by significant work efforts and
expenditures of money, is made to accomplish a Change in Control, as described
in subparagraphs (A), (B), (C) or (D) above whether or not such attempt is made
with the approval of a majority of the then current members of the Board of
Directors.
h. Compensation and Benefits Upon Termination of Executive Employment. In
the event of any termination of Executive's employment other than for Cause
under Section 6(d), or any termination of Executive's employment pursuant to
Section 6(f) or Section 6(g),on the effective date of any such termination, the
Executive shall be entitled to receive the following:
(1) All life, disability, health insurance and other benefits
pursuant to Section 5, to which he was entitled to continue to receive thirty
(30) days prior to the Effective Date of such termination, for a period of Six
(6) months and which benefits shall be made for such period (as determined
herein) following the effective date of such termination; plus
(2) All Options granted to the Executive that have been earned and
vested will have the right to be exercised through the termination date of the
individual option grant, or the maximum allowable by law, as if the Executive
were still employed by the Company. In the event of a Change of Control then any
previous grants, vested or unvested, that the Executive is the holder of will be
immediately vested.
7. Covenant Not to Compete and Non-Disclosure of Information.
a. Covenant Not to Compete. The Executive acknowledges and
recognizes the highly competitive nature of the Company's business and the
goodwill, continued patronage, and specifically the names and addresses of the
Company's Clients (as hereinafter defined) constitute a substantial asset of the
Company having been acquired through considerable time, money and effort.
Accordingly, in consideration of the execution of this Agreement, in the event
the Executive's employment is terminated by reason of disability pursuant to
Section 6(b) or for Cause pursuant to Section 6(c), then the Executive agrees to
the following:
(1) That during the Restricted Period (as hereinafter defined) and
within the Restricted Area (as hereinafter defined), the Executive will not,
individually or in conjunction with others, directly or indirectly, engage in
any Competitive Business Activities (as hereinafter defined), whether as an
officer, director, proprietor, employer, partner, independent contractor,
investor (other than as a holder solely as an investment of less than 1% of the
outstanding capital stock of a publicly traded corporation), consultant, advisor
or agent.
(2) That during the Restricted Period and within the Restricted
Area, the Executive will not, directly or indirectly, compete with the Company
by soliciting, inducing or influencing any of the Company's Clients which have a
business relationship with the Company at the time during the Restricted Period
to discontinue or reduce the extent of such relationship with the Company.
b. Non-Disclosure of Information. In the event Executive's
employment has been terminated pursuant to either Section 6(b) or Section 6(c)
hereof, Executive agrees that, during the Restricted Period, Executive will not
use or disclose any Proprietary Information of the Company for the Executive's
own purposes or for the benefit of any entity engaged in Competitive Business
Activities. As used herein, the term "Proprietary Information" shall mean trade
secrets or confidential proprietary information of the Company which are
material to the conduct of the business of the Company. No information can be
considered Proprietary Information unless the same is a unique process or method
material to the conduct of Company's Business, or is a customer list or similar
list of persons engaged in business activities with Company, or if the same is
otherwise in the public domain or is required to be disclosed by order of any
court or by reason of any statute, law, rule, regulation, ordinance or other
governmental requirement. Executive further agrees that in the event his
employment is terminated pursuant to Sections 6(b) or 6(c) above, all Documents
in his possession at the time of his termination shall be returned to the
Company at the Company's principal place of business.
c. Documents. "Documents" shall mean all original written, recorded,
or graphic matters whatsoever, and any and all copies thereof, including, but
not limited to: papers; books; records; tangible things; correspondence;
communications; telex messages; memoranda; work-papers; reports; affidavits;
statements; summaries; analyses; evaluations; client records and information;
agreements; agendas; advertisements; instructions; charges; manuals; brochures;
publications; directories; industry lists; schedules; price lists; client lists;
statistical records; training manuals; computer printouts; books of account,
records and invoices reflecting business operations; all things similar to any
of the foregoing however denominated. In all cases where originals are not
available, the term "Documents" shall also mean identical copies of original
documents or non-identical copies thereof.
d. Company's Clients. The "Company's Clients" shall be deemed to be
any partnerships, corporations, professional associations or other business
organizations for whom the Company has performed Business Activities.
e. Restrictive Period. The "Restrictive Period" shall be deemed to
be twelve (12) months following termination of this Agreement pursuant to
Sections 6(b) or 6(c) of this Agreement.
f. Restricted Area. The "Restricted Area" shall, if this Agreement
has been terminated pursuant to Section 6(b) or 6(c), be the area commonly
included as part of the "Standard Xxxxxxxxxxxx Xxxxxxxxxxx Xxxx" xx Xxxxxxx
Xxxxx, Xxxxxxx.
g. Competitive Business Activities. The term "Competitive Business
Activities" as used herein shall be deemed to mean the Business.
h. Covenants as Essential Elements of this Agreement. It is
understood by and between the parties hereto that the foregoing covenants
contained in Sections 7(a) and (b) are essential elements of this Agreement, and
that but for the agreement by the Executive to comply with such covenants, the
Company would not have agreed to enter into this Agreement. Such covenants by
the Executive shall be construed to be agreements independent of any other
provisions of this Agreement. The existence of any other claim or cause of
action, whether predicated on any other provision in this Agreement, or
otherwise, as a result of the relationship between the parties shall not
constitute a defense to the enforcement of such covenants against the Executive.
i. Survival After Termination of Agreement. Notwithstanding anything
to the contrary contained in this Agreement, the covenants in Sections 7(a) and
(b) shall survive the termination of this Agreement and the Executive's
employment with the Company.
j. Remedies.
(1) The Executive acknowledges and agrees that the Company's remedy
at law for a breach or threatened breach of any of the provisions of Section
7(a) or (b) herein would be inadequate and a breach thereof will cause
irreparable harm to the Company. In recognition of this fact, in the event of a
breach by the Executive of any of the provisions of Section 7(a) or (b), the
Executive agrees that, in addition to any remedy at law available to the
Company, including, but not limited to monetary damages, all rights of the
Executive to payment or otherwise under this Agreement and all amounts then or
thereafter due to the Executive from the Company under this Agreement may be
terminated and the Company, without posting any bond, shall be entitled to
obtain, and the Executive agrees not to oppose the Company's request for
equitable relief in the form of specific performance, temporary restraining
order, temporary or permanent injunction or any other equitable remedy which may
then be available to the Company.
(2) The Executive acknowledges that the granting of a temporary
injunction, temporary restraining order or permanent injunction merely
prohibiting the use of Proprietary Information would not be an adequate remedy
upon breach or threatened breach of Section 7(a) or (b) and consequently agrees,
upon proof of any such breach, to the granting of injunctive relief prohibiting
any form of competition with the Company. Nothing herein contained shall be
construed as prohibiting the Company from pursuing any other remedies available
to it for such breach or threatened breach.
8. Indemnification.
a. The Executive shall continue to be covered by the Articles of
Incorporation and/or the Bylaws of the Company with respect to matters occurring
on or prior to the date of termination of the Executive's employment with the
Company, subject to all the provisions of Florida and Federal law and the
Articles of Incorporation and Bylaws of the Company then in effect. Such
reasonable expenses, including attorneys' fees, that may be covered by the
Articles of Incorporation and/or Bylaws of the Company shall be paid by the
Company on a current basis in accordance with such provision, the Company's
Articles of Incorporation and Florida law. To the extent that any such payments
by the Company pursuant to the Company's Articles of Incorporation and/or Bylaws
may be subject to repayment by the Executive pursuant to the provisions of the
Company's Articles of Incorporation or Bylaws, or pursuant to Florida or Federal
law, such repayment shall be due and payable by the Executive to the Company
within twelve (12) months after the termination of all proceedings, if any,
which relate to such repayment and to the Company's affairs for the period prior
to the date of termination of the Executive's employment with the Company and as
to which Executive has been covered by such applicable provisions.
b. The Company specifically acknowledges and agrees that the
Executive may become personally liable for certain obligations of the Company.
The Company shall indemnify and hold the Executive harmless from any and all
obligations that the Executive may incur, including, without limitation, costs
and attorneys fees in connection with such guaranties or personal liabilities.
Any costs or expenses that may be incurred by the Executive in connection with
such liabilities or guaranties shall be reimbursed to the Executive, upon
receipt by the Company of documented evidence of such liabilities, within three
(3) business days of the receipt of such documented evidence.
9. Withholding. Anything to the contrary notwithstanding, all payments
required to be made by the Company hereunder to the Executive or the Executive's
estate or beneficiaries shall be subject to the withholding of such amounts, if
any, relating to tax and other payroll deductions as the Company may reasonably
determine it should withhold pursuant to any applicable law or regulation. In
lieu of withholding such amounts, the Company may accept other arrangements
pursuant to which it is satisfied that such tax and other payroll obligations
will be satisfied in a manner complying with applicable law or regulation.
10. Certain Tax Matters. The Company shall indemnify and hold the
Executive harmless from and against (i) the imposition of excise tax (the
"Excise Tax") under Section 4999 of the Internal Revenue Code of 1986, as
amended (or any successor provision thereto, the "Code"), on any payment made
under this Agreement (including any payment made under this paragraph) and any
interest, penalties and additions to tax imposed in connection therewith, and
(ii) any federal, state or local income tax imposed on any payment made pursuant
to this paragraph. The Executive shall not take the position on any tax return
or other filing that any payment made under this Agreement is subject to the
Excise Tax, unless, in the opinion of independent tax counsel reasonably
acceptable to the Company, there is no reasonable basis for taking the position
that any such payment is not subject to the Excise Tax under U.S. tax law then
in effect. If the Internal Revenue Service makes a claim that any payment or
portion thereof is subject to the Excise Tax, at the Company's election, and the
Company's direction and expense, the Executive shall contest such claim;
provided, however, that the Company shall advance to the Executive the costs and
expenses of such contest, as incurred. For the purpose of determining the amount
of any payment under clause (ii) of the first sentence of this paragraph, the
Executive shall be deemed to pay federal income taxes at the highest marginal
rate of federal income taxation applicable to individuals in the calendar year
in which such indemnity payment is to be made and state and local income taxes
at the highest marginal rates of taxation applicable to individuals as are in
effect in the jurisdiction in which the Executive is resident, net of the
reduction in federal income taxes that is obtained from deduction of such state
and local taxes.
11. Notices. Any notice required or permitted to be given under the terms
of this Agreement shall be sufficient if in writing and if sent postage prepaid
by registered or certified mail, return receipt requested; by overnight
delivery; by courier; or by confirmed telecopy, in the case of the Executive to
the Executive's last place of business or residence as shown on the records of
the Company, or in the case of the Company to its principal office as set forth
in the first paragraph of this Agreement, or at such other place as it may
designate.
12. Waiver. Unless agreed in writing, the failure of either party, at any
time, to require performance by the other of any provisions hereunder shall not
affect its right thereafter to enforce the same, nor shall a waiver by either
party of any breach of any provision hereof be taken or held to be a waiver of
any other preceding or succeeding breach of any term or provision of this
Agreement. No extension of time for the performance of any obligation or act
shall be deemed to be an extension of time for the performance of any other
obligation or act hereunder.
13. Completeness and Modification. This Agreement constitutes the
entire understanding between the parties hereto superseding all prior and
contemporaneous agreements or understandings among the parties hereto concerning
the Employment Agreement. This Agreement may be amended, modified, superseded or
canceled, and any of the terms, covenants, representations, warranties or
conditions hereof may be waived, only by a written instrument executed by the
parties or, in the case of a waiver, by the party to be charged.
14. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which shall
constitute but one agreement.
15. Binding Effect/Assignment. This Agreement shall be binding upon
the parties hereto, their heirs, legal representatives, successors and assigns.
This Agreement shall not be assignable by the Executive but shall be assignable
by the Company in connection with the sale, transfer or other disposition of its
business or to any of the Company's affiliates controlled by or under common
control with the Company.
16. Governing Law. This Agreement shall become valid when executed
and accepted by Company. The parties agree that it shall be deemed made and
entered into in the State of Florida and shall be governed and construed under
and in accordance with the laws of the State of Florida. Anything in this
Agreement to the contrary notwithstanding, the Executive shall conduct the
Executive's business in a lawful manner and faithfully comply with applicable
laws or regulations of the state, city or other political subdivision in which
the Executive is located.
17. Further Assurances. All parties hereto shall execute and deliver
such other instruments and do such other acts as may be necessary to carry out
the intent and purposes of this Agreement.
18. Headings. The headings of the sections are for convenience only
and shall not control or affect the meaning or construction or limit the scope
or intent of any of the provisions of this Agreement.
19. Survival. Any termination of this Agreement shall not, however,
affect the ongoing provisions of this Agreement which shall survive such
termination in accordance with their terms.
20. Severability. The invalidity or unenforceability, in whole or in
part, of any covenant, promise or undertaking, or any section, subsection,
paragraph, sentence, clause, phrase or word or of any provision of this
Agreement shall not affect the validity or enforceability of the remaining
portions thereof.
21. Enforcement. Should it become necessary for any party to
institute legal action to enforce the terms and conditions of this Agreement,
the successful party will be awarded reasonable attorneys' fees at all trial and
appellate levels, expenses and costs.
22. Venue. Company and Executive acknowledge and agree that the U.S.
District for the Southern District of Florida, or if such court lacks
jurisdiction, the 15th Judicial Circuit (or its successor) in and for Palm Beach
County, Florida, shall be the venue and exclusive proper forum in which to
adjudicate any case or controversy arising either, directly or indirectly, under
or in connection with this Agreement and the parties further agree that, in the
event of litigation arising out of or in connection with this Agreement in these
courts, they will not contest or challenge the jurisdiction or venue of these
courts.
23. Construction. This Agreement shall be construed within the fair
meaning of each of its terms and not against the party drafting the document.
THE EXECUTIVE ACKNOWLEDGES THAT THE EXECUTIVE HAS READ ALL OF THE TERMS OF THIS
AGREEMENT, UNDERSTANDS THE AGREEMENT, AND AGREES TO ABIDE BY ITS TERMS AND
CONDITIONS.
IN WITNESS WHEREOF, the parties have executed this Agreement as of date
set forth in the first paragraph of this Agreement.
Witness: The Company:
ONSTREAM MEDIA CORPORATION
By: /s/ Xxxxx X. Xxxxxx
-------------------
Xxxxx X. Xxxxxx
President
Witness: The Executive
/s/ Xxxxxx X. Xxxxxxxxx
-----------------------
Xxxxxx X. Xxxxxxxxx
