Executive Services Agreement

Exhibit 10.14

Executive Services Agreement

June 23, 2008

Xx. Xxxxxx X. Xxxx
Chief Executive Officer
Xxxxxx Products. Inc.
0000 Xxxx Xxxxx
Xxx Xxxxxxx, XX00000

Dear Xxx:

Xxxxx, LLC (“Xxxxx,” “we,” or “us”) is pleased that Xxxxxx Products, Inc. (the “Company,” “you” or “your”) desires to employ Xxxxx Xxxxxxxxx, a member of Xxxxx (the “Employee”), to serve as Chief Financial Officer of the Company. Prior to agreeing to serve as Principal Accounting Officer of the Company, Employee requests up to two weeks to conduct his own due diligence with regards to Company’s accounting, controls and procedures and conduct discussions with assigned audit partner from Ernst & Young and Chairman of the Audit Committee. This letter along with the terms and conditions attached as Exhibit A and any other exhibits or schedules attached hereto (collectively, the “Agreement”) confirms our mutual understanding of the terms and conditions upon which we will make available to you the Employee and Xxxxx’x intellectual capital to the Employee for use in connection with the Employee’s employment relationship with you.

Effective as of June 24, 2008, the Employee will become your employee serving in the capacity set forth above. The Employee will work on a full-time basis and be subject to the supervision, direction and control of and report directly to the Company’s management. While the Employee will remain a member of Xxxxx and have access to Xxxxx’x intellectual capital to be used in connection with the Employee’s employment relationship with you, we will have no supervision, direction or control over the Employee with respect to the services provided by the Employee to you.

You will pay directly to the Employee a salary of $32,200 a month (“Salary”). In addition, you will reimburse the Employee for out-of-pocket expenses incurred by the Employee to the same extent that you reimburse other senior managers for such expenses. In addition, you will pay directly to Xxxxx a fee of $6,800 semi-monthly on the 1st and 15th of each month (“Fees”). The parties acknowledge and agree that the Salary and Fees set forth above are based upon this Agreement having a minimum term of three months (the “Minimum Term”). In the event you terminate this Agreement prior to the expiration of the Minimum Term other than for the Employee’s material failure to perform the obligations of his or her position with the Company, provided the Employee fails to cure such breach within 10 days after receipt of written notice of such breach, you agree that the Salary shall be retroactively increased to $40,250 a month and the Fees shall be retroactively increased to $17,000 a month. You agree to pay upon the termination of this Agreement a lump sum amount (i) to the Employee equal to the difference between the Salary actually paid and the Salary that should have been paid taking into account the retroactive adjustment, and (ii) to Xxxxx equal to the difference between the Fees actually paid and the Fees that should have been paid taking into account the retroactive adjustment. Payments for the first and last pay periods will be prorated based on the number of days worked and the number of work days in the pay period. Fees for the first and last periods worked will be invoiced by Xxxxx and paid within ten (10) days of receipt of invoice.

Payments to the Employee shall be made in accordance with the Company’s standard payroll and expense reimbursement policies, Payments to Xxxxx should be made in accordance with the instructions set forth on Exhibit A on the 1st and 15th of each month.

Except as specifically provided for herein, you will have no obligation to provide the Employee with any health insurance benefits or equity bonuses. In lieu of the Employee participating in the Company-sponsored employee health insurance plans, the Employee will remain on his or her current health insurance plans. As an employee, the Employee will be eligible for any Company vacation and holidays consistent with the Company’s policy as it applies to senior management. The Employee will be exempt from any delay periods otherwise required for vacation and holiday eligibility.

You will have the opportunity to make the Employee a permanent, full-time member of Company management at any time during the term of this Agreement by entering into another form of Xxxxx agreement, at a fee calculated as 35% of first full year base salary plus bonus with final terms negotiated at such time.

As a condition to providing the services hereunder, we require a security deposit in an amount equal to $15,000 (the “Deposit”), which will only be used by us under the limited circumstances described on Exhibit A. The Deposit is due upon the execution of this Agreement.

The Company will provide Xxxxx or the Employee with written evidence that the Company maintains directors’ and officers’ insurance covering the Employee in an amount reasonably acceptable to the Employee at no additional cost to the Employee, and the Company will maintain such insurance at all times while this Agreement remains in effect. Furthermore, the Company will maintain such insurance coverage with respect to occurrences arising during the term of this Agreement for at least three years following the termination or expiration of this Agreement or will purchase a directors’ and officers’ extended reporting period or “tail” policy to cover the Employee.

We appreciate the opportunity to serve you and believe this Agreement accurately reflects our mutual understanding. We would be pleased to discuss this Agreement with you at your convenience. If the foregoing is in accordance with your understanding, please sign a copy of this Agreement and return it to my attention.

Sincerely,
Xxxxx,LLC

Xxxxxx X. Xxxxxxxx
Managing Partner

Accepted and agreed:
Xxxxxx Products, Inc.

By: Name:		/s/ Xxxxxx X. Xxxx Xxxxxx X. Xxxx
Title:		Chief Executive Officer

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Exhibit A

Terms and Conditions

1.		Relationship of the Parties. The parties agree that Xxxxx will be serving the Company as an independent contractor for all purposes and not as an employee, agent, partner of, or joint venturer with the Company and that the Employee will be serving the Company as an employee of the Company for all purposes and not as an independent contractor.
2.		Payment Terms, Payments to Xxxxx should be made by electronic transfer in accordance with the instructions set forth below or such alternative instructions as provided by Xxxxx from time to time. Any amounts not paid when due may be subject to a periodic service charge equal to the lesser of 1.5% per month and the maximum amount allowed under applicable law, until such amounts are paid in full, including assessed service charges. In lieu of terminating this Agreement. Xxxxx may suspend the provision of services (including the Employee’s services) if amounts owed are not paid in accordance with the terms of this Agreement.
		Bank Name: Xxxxx Fargo, N.A. Branch: San Francisco Account Name: Xxxxx, LLC Account Number: 4121546642 Routing Number for ACH Payments: 000000000 Swift Code: XXXXXX0X Please reference Xxxxxx Products in the body of the payment.
3.		Deposit. If the Company breaches this Agreement and fails to cure such breach as provided for herein, Xxxxx will be entitled to apply the Deposit to its or the Employee’s damages resulting from such breach. In the event the Deposit falls below the amount required, the Company will pay Xxxxx an additional amount equal to the shortfall. Upon the expiration or termination of this Agreement, Xxxxx will return to the Company the balance of the Deposit remaining after application of any amounts to damages as provided for herein, including, without limitation, unfulfilled payment obligations of the Company to Xxxxx or the Employee.
4.		Termination.

(a) Either party may terminate this Agreement by providing the other party a minimum of 30 days’ advance written notice and such termination will be effective as of the date specified in such notice, provided that such date is no earlier than 30 days after the date of delivery of the notice. Xxxxx will continue to provide, and the Company will continue to pay for, the services until the termination effective date.

(b) Xxxxx may terminate this Agreement immediately upon written notice to the Company if: (i) the Company is engaged in or asks Xxxxx or the Employee to engage in or ignore any illegal or unethical activity; (ii) the Employee ceases to be a member of Xxxxx for any reason; (iii) the Employee becomes disabled; or (iv) the Company fails to pay any amounts due to Xxxxx or the Employee when due. For purposes of this Agreement, disability will be defined by the applicable policy of disability insurance or, in the absence of such insurance, by Xxxxx’x management acting in good faith. Notwithstanding the foregoing, in lieu of terminating this Agreement under (ii) and (iii) above, upon the mutual agreement of the parties, the Employee may be replaced by another Xxxxx member.

(c) In the event that a party commits a breach of this Agreement, other than for the reasons described in the above Section, and fails to cure the same within 10 days following delivery by the non-breaching party of written notice specifying the nature of the breach, the non-breaching party may terminate this Agreement effective upon written notice of such termination.

(d) The expiration or termination of this Agreement will not destroy or diminish the binding force and effect of any of the provisions of this Agreement that expressly, or by reasonable implication, come into or continue in effect on or after such expiration or termination, including, without limitation, provisions relating to payment of fees and expenses (including witness fees and expenses), hiring the Employee, governing law, arbitration, limitation of liability, and indemnity.

5. Hiring the Employee Outside of a Xxxxx Agreement. During the term of this Agreement and for the 12-month period following the termination or expiration of this Agreement, other than in connection with this Agreement or another Xxxxx agreement, the Company will not employ the Employee, or engage the

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		Employee as an independent contractor. The parties recognize and agree that a breach by the Company of this provision would result in the loss to Xxxxx of the Employee’s valuable expertise and revenue potential and that such injury will be impossible or very difficult to ascertain. Therefore, in the event this provision is breached, Xxxxx will be entitled to receive as liquidated damages an amount equal to 45% of the Annualized Compensation (as defined below), which amount the parties agree is reasonably proportionate to the probable loss to Xxxxx and is not intended as a penalty. The amount will be due and payable to Xxxxx upon written demand to the Company. If a court or arbitrator determines that liquidated damages are not appropriate for such breach, Xxxxx will have the right to seek actual damages and/or injunctive relief. “Annualized Compensation” means the equivalent of the Employee’s Salary calculated on a full-time annual basis plus the maximum amount of any bonus for which the Employee was eligible with respect to the then-current bonus year.
6.		Warranties and Disclaimers. It is understood that Xxxxx does not have a contractual obligation to the Company other than to provide the Employee to the Company and to provide the Employee access to Xxxxx’x intellectual capital to be used in connection with the Employee’s employment relationship with the Company. The Company acknowledges that any information, including any resources delivered through Xxxxx’x proprietary information and technology system, will be provided by Xxxxx as a tool to be used in the discretion of the Company. Xxxxx will not be responsible for any action taken by the Company in following or declining to follow any of Xxxxx’x or the Employee’s advice or recommendations. Xxxxx represents to the Company that Xxxxx has conducted its standard screening and investigation procedures with respect to the Employee becoming a member of Xxxxx, and the results of the same were satisfactory to Xxxxx. Xxxxx disclaims all other warranties, whether express, implied or statutory. Without limiting the foregoing, Xxxxx makes no representation or warranty as to the services provided by the Employee, or the accuracy or reliability of reports, projections, certifications, opinions, representations, or any other information prepared or made by Xxxxx or the Employee (collectively, the “Information”) even if derived from Xxxxx’x intellectual capital, and Xxxxx will not be liable for any claims of reliance on the Information or that the Information does not comply with federal, state or local laws or regulations. The services provided by Xxxxx hereunder are for the sole benefit of the Company and not any unnamed third parties. The services will not constitute an audit, review, or compilation, or any other type of financial statement reporting or attestation engagement that is subject to the rules of the AICPA or other similar state or national professional bodies and will not result in an opinion or any form of assurance on internal controls.
7.		Limitation of Liability; Indemnity.

(a) The liability of Xxxxx in any and all categories and for any and all causes arising out of this Agreement, whether based in contract, tort, negligence, strict liability or otherwise will, in the aggregate, not exceed the actual Fees paid by the Company to Xxxxx over the previous two months’ of the Agreement. In no event will Xxxxx be liable for incidental, consequential, punitive, indirect or special damages, including, without limitation, any interruption or loss of business, profit or goodwill. As a condition for recovery of any liability, the Company must assert any claim against Xxxxx within three months after discovery or 60 days after the termination or expiration of this Agreement, whichever is earlier.

(b) The Company agrees to indemnify Xxxxx and the Employee to the full extent permitted by law for any losses, costs, damages, and expenses (including reasonable attorneys’ fees), as they are incurred, in connection with any cause of action, suit, or other proceeding arising in connection with the Employee’s services to the Company.

8. Governing Law, Arbitration, and Witness Fees.

(a) This Agreement will be governed by and construed in accordance with the laws of the State of New York, without regard to conflicts of laws provisions.

(b) If the parties are unable to resolve any dispute arising out of or in connection with this Agreement, the parties agree and stipulate that any such disputes will be settled by binding arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association (“AAA”). The arbitration will be conducted in the New York, New York office of the AAA by a single arbitrator selected by the parties according to the rules of the AAA, and the decision of the arbitrator will be final and binding on both parties. In the event that the parties fail to agree on the selection of the arbitrator within 30 days after either party’s request for arbitration under this Section, the arbitrator will be chosen by the AAA. The arbitrator may in his or her discretion order documentary discovery but will not allow depositions without a showing of compelling need. The arbitrator will render his or her decision within 90 days after the call for arbitration. Judgment on the award of the arbitrator may be entered in and enforced by any court of competent

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jurisdiction. The arbitrator will have no authority to award damages in excess or in contravention of this Agreement and may not amend or disregard any provision of this Agreement, including this Section. Notwithstanding the foregoing, either party may seek appropriate injunctive relief from any court of competent jurisdiction, and Xxxxx may pursue payment of undisputed amounts through any court of competent jurisdiction.

     (c) In the event any member or employee of Xxxxx (including, without limitation, the Employee to the extent not otherwise entitled in his or her capacity as an employee of the Company) is requested or authorized by the Company or is required by government regulation, subpoena, or other legal process to produce documents or appear as witnesses in connection with any action, suit or other proceeding initiated by a third party against the Company or by the Company against a third party, the Company will, so long as Xxxxx is not a party to the proceeding in which the information is sought, reimburse Xxxxx for its member’s or employee’s professional time (based on customary rates) and expenses, as well as the fees and expenses of its counsel (including the allocable cost of in-house counsel), incurred in responding to such requests.

9. Miscellaneous.

     (a) This Agreement constitutes the entire agreement between the parties with regard to the subject matter hereof and supersede any and all agreements, whether oral or written, between the parties with respect to its subject matter. No amendment or modification to this Agreement will be valid unless in writing and signed by both parties.

     (b) If any portion of this Agreement is found to be invalid, or unenforceable, such provision will be deemed severable from the remainder of this Agreement and will not cause the invalidity or unenforceability of the remainder of this Agreement, except to the extent that the severed provision deprives either party of a substantial portion of its bargain.

     (c) Neither the Company nor Xxxxx will be deemed to have waived any rights or remedies accruing under this Agreement unless such waiver is in writing and signed by the party electing to waive the right or remedy. The waiver by any party of a breach or violation of any provision of this Agreement will not operate or be construed as a waiver of any subsequent breach of such provision or any other provision of this Agreement.

     (d) Neither party will be liable for any delay or failure to perform under this Agreement (other than with respect to payment obligations) to the extent such delay or failure is a result of an act of God, war, earthquake, civil disobedience, court order, labor dispute, or other cause beyond such party’s reasonable control.

     (e) The Company may not assign its rights or obligations under this Agreement without the express written consent of Xxxxx. Nothing in this Agreement will confer any rights upon any person or entity other than the parties hereto and their respective successors and permitted assigns and the Employee.

     (f) The Company agrees to reimburse Xxxxx for all costs and expenses incurred by Xxxxx in enforcing collection of any monies due under this Agreement, including, without limitation, reasonable attorneys’ fees.

     (g) The Company agrees to allow Xxxxx to use the Company’s logo and name on Xxxxx’x website and other marketing materials for the sole purpose of identifying the Company as a client of Xxxxx. Xxxxx will not use the Company’s logo or name in any press release or general circulation advertisement without the Company’s prior written consent.

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