EXECUTIVE EMPLOYMENT AGREEMENT
THIS EXECUTIVE EMPLOYMENT AGREEMENT (this "Agreement") is made and
entered into and is effective as of the 27th day of December, 2004 (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 Xxxx Xxxxxxxxxx, an individual whose address
is 0000 Xxxxxxxx Xxxxx, Xxxx Xxxxx, Xxxxxxx 00000 (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 has become familiar with and possessed with the manner, methods, trade
secrets and other confidential information pertaining to the Company's business,
including the Company's client base.
E. Any and all options granted to Executive preceding this Agreement
shall continue and not expire as a result of any options issued under this
Agreement.
F. The Change of Control excludes the Merger with Onstream Media and
the contemplated financing
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 Chief Operations Officer of the Company
and shall have general executive operating supervision over the property,
business and affairs of the Company, its subsidiaries and divisions, subject to
the guidelines and direction of the Board of Directors of the Company. It is
further the intention of the parties that at all times during the "Term," as
hereinafter defined, of the Agreement, the Executive shall serve as a member of
the Board of Directors of the Company, in accordance with the Bylaws 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.
In the event Executive shall, at any time, not be on the Board of Directors of
the Company and serving as Chairman of such Board, it shall be presumed (if
Executive so elects) that the Executive has been terminated other than for cause
and Executive shall have all of the rights specified in Section 6(h) of this
Agreement just as if the Executive had been terminated "Without Cause."
4. Term. The Term of employment hereunder will commence on the date as
set forth above and terminate four (4) 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 Sixty Five Thousand Dollars ($165,000.00) for the first year, with
annual incremental increases of ten (10%) percent per year.
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 2003. 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.
c. Stock Options. The Executive shall be granted options
("Options") to purchase an aggregate of 400,000 shares of Common Stock at an
exercise price of $2.50 and shall 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 100,000 options each, on each anniversary
of the Effective Date of this Agreement, 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; (ii) Constructive
Termination, as defined herein, of the Executive; and (iii) termination of the
Executive other than for Cause, as defined herein. 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 other than for Cause, the Executive shall be entitled to register the
stock received by 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. Such agreement is in the form attached hereto as Exhibit A. Nothing
herein shall effect any options that have previously been issued to the
Executive. Upon any termination of the Executive, and if the 5 day average
closing stock price is equal to or greater than the exercise price ($2.50) of
the option on the date of termination, the Company will cancel the option and
will issue fully paid shares in replacement of the option ("Paid Shares"). The
Company will pay any and all income taxes incurred by executive from the
issuance of the Paid Shares. If the 5 day average closing stock price is less
than the exercise price ($2.50) of the option on the date of termination, the
options will remain exercisable over the initial term.
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d. 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 $1500 monthly
as part of a deferred compensation plan for the executive's retirement.
e. 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 policy.
f. 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.
g. Automobile Expenses. The Company shall provide the
Executive with an automobile allowance not to exceed $1,000 per month. The
Company shall pay all insurance premiums and maintenance for the automobile that
is the subject of the automobile allowance.
h. Memberships, Dues and Charitable Contributions. The Company
shall provide to the Executive, in the Executive's sole discretion (i) a
membership in a social, charitable or religious organization or club, which
membership shall be either in the name of the Executive or in the name of the
Company, as determined by the Executive; or (ii) an equivalent dollar amount of
charitable donations or contributions shall be made, which amounts and which
charities shall be determined in the sole discretion of the Executive; provided
that such Membership, Dues and Charitable Contributions shall not exceed Five
Thousand Dollars ($5,000) per year.
i. 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 one (1) year 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 multiplied times two. Other death benefits will be determined
in accordance with the terms of the Company's benefit programs and plans.
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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
14 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.
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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 3 month period, the Executive shall be entitled to all
Compensation and Benefits as set forth in Subsection 6(h) of this Agreement.
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) and/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).
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 upon the occurrence of one or more of the following events without
the express written consent of the Executive. In such event, the Executive shall
be entitled to all Compensation and Benefits as set forth in Subsection 6(h) of
this Agreement:
(1) a significant change in the nature or scope of
the authorities, powers, functions, duties or responsibilities attached
to Executive's position as described in Section 3; or
(2) Change in the Executive's principal office to a
location outside of Broward County or Palm Beach County; or
(3) any reduction in the Executive's salary or any
change in the method of calculating Executive's Bonus Compensation
hereunder; or
(4) a material breach of the Agreement by the
Company; or
(5) a material reduction of the Executive's benefits
under any employee benefit plan, program or arrangement (for Executive
individually or as part of a group) of the Company as then in effect or
as in effect on the effective date of the Agreement, which reduction
shall not be effectuated for similarly situated employees of the
Company; or
(6) failure by a successor company to assume the
obligations under the Agreement.
Anything herein to the contrary notwithstanding, the Executive shall give
written notice to the Board of Directors of the Company that the Executive
believes an event has occurred which would result in a Constructive Termination
of the Executive's employment under this Section 6(f), which written notice
shall specify the particular act or acts, on the basis of which the Executive
intends to so terminate the Executive's employment, and the Company shall then
be given the opportunity, within fifteen (15) days of its receipt of such notice
to cure said event, provided, however, there shall be no time period permitted
to cure a second or subsequent occurrence under this Section 6(f) (whether such
second occurrence be of the same or a different event specified in subsections
(1) through (7) above).
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.
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(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 or group of persons", 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), or the Executive's employment is
constructively terminated as defined in Section 6(f), 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:
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(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 equal to the lesser of (A) the number of full
months the Executive has been employed by the Company, whether pursuant
to this Agreement or to any other agreement or arrangement, or (B) two
(2) years, and which benefits shall be made for such period (as
determined herein) following the effective date of such termination;
provided that in the Executive's sole discretion, the Executive may
receive the cash equivalent of all or any part of such life, disability
and/or health insurance benefits from the Company in lieu of receiving
such benefits; plus
(2) An amount equal to (3) times the Executive's
annual Base Salary, based upon the greater of the Executive's Base
Salary (i) immediately prior to the effective date of termination or
(ii) as of ninety (90) days prior to the effective date of termination;
provided that all Base Compensation shall be payable to the Executive
bi-weekly; provided that in the event that the Executive is entitled to
receive the Base Compensation as a result of a Change in Control, at
the Executive's option, the Executive may receive either (i) a lump sum
equal to the Base Compensation due to the Executive pursuant to Section
6(g) reduced to present value, as set forth in Section 280G of the
Internal Revenue Code or (ii) bi-weekly, plus any accrued Bonus
multiplied times two, as computed to the effective date of such
termination, computed on the basis of actual figures through such
effective date of termination and based upon the formula set forth in
Section 5(b) above.
The provisions of this Section 6.h notwithstanding, the
Compensation and Benefits to be received by the Executive pursuant to this
Section 6.h shall not exceed the amount set forth in Section 162(m) of the
Internal Revenue Code, or its successor provision.
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:
i. 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.
ii. 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.
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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.
i. 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.
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ii. 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 has personally guaranteed certain obligations on behalf of the Company
and further that the Executive is 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.
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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.
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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
/s/ Xxxxxx Xxxxxx
-----------------
By: /s/ Xxxxx Xxxxxx
----------------
Xxxxx X. Xxxxxx
President
Witness: The Executive
/s/ Xxxxxx Xxxxxx By: /s/ Xxxx Xxxxxxxxxx
----------------- -------------------
Xxxx Xxxxxxxxxx
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