EXHIBIT 10.1
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
This Amended and Restated Employment Agreement ("Agreement") is made
and entered into as of September 6, 2001, and is by and between Terremark
Worldwide, Inc., a Florida corporation, and Xxxxxx X. Xxxxxx (hereinafter called
the "Executive").
RECITALS
WHEREAS, an Employment Agreement between the Executive and Terremark
Holdings, Inc., a Florida corporation, was executed on March 5, 2001, as amended
(the "Original Agreement"), and subsequent to such execution, Terremark
Holdings, Inc. merged with and into AmTec, Inc., a Delaware corporation, whereby
AmTec, Inc., as the surviving corporation, immediately thereafter changed its
name to Terremark Worldwide, Inc. (the "Company");
WHEREAS, as a condition precedent to the Company obtaining a loan, in
the maximum principal amount of $48,000,000 (the "Company Loan"), pursuant to
the Amended and Restated Credit Agreement, dated as of September 5, 2001 (the
"Credit Agreement") by and among the Company, NAP of the Americas, a Florida
corporation ("NAP") and Ocean Bank, a Florida-chartered bank (the "Bank"), the
Bank required that the Executive guarantee (i) the full payment and performance
of the Company Loan and (ii) all of the obligations at any time owed by the
Company or NAP to the Bank under the Credit Agreement, the promissory note
evidencing the Company Loan and the various other loan documents executed
pursuant to the Credit Agreement (collectively, the "Guaranty");
WHEREAS, as a condition precedent to the Company obtaining the Company
Loan, the Bank required that the Executive provide a $5,000,000 time deposit or
certificate of deposit purchased by the Executive, together with a pledge and
collateral assignment thereof from the Executive to the Bank (the "Partial Cash
Collateral"), for the purpose of securing the repayment of a portion of the
existing line of credit from the Bank to the Executive in the original principal
amount of $7,500,000 and the existing loan from the Bank to Communications
Investors Group, a Florida general partnership of which the Executive is one of
the two general partners, in the original principal amount of $4,000,000 (the
"Executive Loans");
WHEREAS, as a condition precedent to the Company obtaining the Company
Loan, the Bank required that the Executive agree to accelerate the maturity
dates of the Executive Loans to December 31, 2001 or alternatively provide full
cash collateralization for the Executive Loans on or prior to December 31, 2001
(the "Refinancing Obligations");
WHEREAS, the parties acknowledge that the Bank would not have required
the Executive to provide the Partial Cash Collateral or agree to the Refinancing
Obligations if the Company had not entered into the Credit Agreement and
obtained the Company Loan;
WHEREAS, in order to induce the Bank to enter into the Credit Agreement
and provide the Company Loan, the Executive provided the Guaranty and the
Partial Cash Collateral and has agreed to undertake the Refinancing Obligations;
WHEREAS, the Executive has provided certain other guarantees in
connection with other indebtedness of the Company with various lenders and
creditors including, but not limited to, those guarantees set forth on Schedule
1, as updated from time to time (the "Additional Guarantees" and, together with
the Guaranty, the Partial Cash Collateral and the Refinancing Obligations, the
"Executive Financial Assistance");
WHEREAS, The Executive possesses knowledge and skills which the Company
believes will be of substantial benefit to its operations and success, and the
Company desires to employ the Executive on the terms and conditions set forth
below; and
WHEREAS, in consideration of the Executive Financial Assistance, the
Executive and the Company are willing to amend and restate the Original
Agreement, and the Executive is willing to make his services available to the
Company on the terms and conditions below.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and mutual covenants
set forth herein, the parties agree as follows:
1. Employment.
1.1 Employment and Term. The Company hereby agrees to
employ the Executive and the Executive hereby agrees to serve the Company on the
terms and conditions set forth herein.
1.2 Duties of Executive. During the Term of Employment
under this Agreement, the Executive shall serve as the President, Chief
Executive Officer and Chairman of Terremark Worldwide, Inc., shall diligently
perform all services as may be assigned to him by the Board (provided that, such
services shall not materially differ from the services currently provided by the
Executive), and shall exercise such power and authority as may from time to time
be delegated to him by the Board. The Executive shall devote his full time and
attention to the business and affairs of the Company, render such services to
the best of his ability, and use his best efforts to promote the interests of
the Company. It shall not be a violation of this Agreement for the Executive to
(i) serve on corporate, civic or charitable boards or committees, (ii) deliver
lectures, fulfill speaking engagements or teach at educational institutions, or
(iii) manage personal investments, so long as such activities do not
significantly interfere with the performance of the Executive's responsibilities
to the Company in accordance with this Agreement.
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2. Term.
2.1 Initial Term. The initial Term of Employment under
this Agreement, and the employment of the Executive hereunder, commenced on
April 28, 2001 (the Commencement Date") and shall expire on the date that is
twelve months after the Commencement Date, unless sooner terminated in
accordance with Section 5 hereof (the "Initial Term")
2.2 Renewal Terms. At the end of the Initial Term, the
Term of Employment automatically shall renew for successive one year terms
(subject to earlier termination as provided in Section 5 hereof), unless the
Company or the Executive delivers written notice to the other at least one month
prior to the Expiration Date (as defined in Section 2.3) of its or his election
not to renew the Term of Employment.
2.3 Term of Employment and Expiration Date. The period
during which the Executive shall be employed by the Company pursuant to the
terms of this Agreement is sometimes referred to in this Agreement as the "Term
of Employment", and the date on which the Term of Employment shall expire
(including the date on which any renewal term shall expire), is sometimes
referred to in this Agreement as the "Expiration Date."
3. Compensation.
3.1 Base Salary. The Executive shall receive a base
salary at the annual rate of $350,000.00 (the "Base Salary") during the Term of
Employment, with such Base Salary payable in installments consistent with the
Company's normal payroll schedule, subject to applicable withholding and other
taxes. The Base Salary shall be reviewed, at least annually, for merit increases
and may, by action and in the sole discretion of the Board, be increased at any
time or from time to time.
3.2 Bonuses. During the Term of Employment, the Executive
shall be eligible to receive bonuses in such amounts and at such times as the
Board shall determine in its sole discretion.
4. Expense Reimbursement and Other Benefits.
4.1 Reimbursement of Expenses. Upon the submission of
proper substantiation by the Executive, and subject to such rules and guidelines
as the Company may from time to time adopt, the Company shall reimburse the
Executive for all reasonable expenses actually paid or incurred by the Executive
during the Term of Employment in the course of and pursuant to the business of
the Company. The Executive shall account to the Company in writing for all
expenses for which reimbursement is sought and shall supply to the Company
copies of all relevant invoices, receipts or other evidence reasonably requested
by the Company.
4.2 Compensation/Benefit Programs. During the term of
Employment, the Executive shall be entitled to participate in all medical,
dental, hospitalization, accidental death and dismemberment, disability, travel
and live insurance plans, and any and all other plans as are presently and
hereinafter offered by the Company to its executives, including savings,
pension,
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profit-sharing and deferred compensation plans, subject to the general
eligibility and participation provisions set forth in such plans.
4.3 Working Facilities. During the Term of Employment,
the Company shall furnish the Executive with an office, secretarial help and
such other facilities and services suitable to his/her position and adequate for
the performance of his/her duties hereunder.
4.4 Stock Options. During the Term of Employment, the
Executive shall be eligible to be granted options (the "Stock Options") to
purchase common stock (the "Common Stock") of the Company under (and therefore
subject to all terms and conditions of) the Company's 1996 Stock Option Plan, as
amended, and any successor plan thereto (the "Stock Option Plan") and all rules
of regulation of the Securities and Exchange Commission applicable to stock
option plans then in effect. The number of Stock Options and terms and
conditions of the Stock Options shall be determined by the Committee appointed
pursuant to the Stock Option Plan, or by the Board of Directors of the Company,
in its sole discretion and pursuant to the Stock Option Plan.
4.5 Other Benefits. The Executive shall be entitled to
three weeks of vacation each calendar year during the Term of Employment, to be
taken at such times as the Executive and the Company shall mutually determine
and provided that no vacation time shall interfere with the duties required to
be rendered by the Executive hereunder. Any vacation time not taken by Executive
during any calendar year may not be carried forward into any succeeding calendar
year. The Executive shall receive such additional benefits, if any, as the Board
of the Company shall from time to time determine.
5. Termination.
5.1 Termination for Cause. The Company shall at all times
have the right, upon written notice to the Executive, to terminate the Term of
Employment, for Cause. For purposes of this Agreement, the term "Cause" shall
mean (i) an action or omission of the Executive which constitutes a willful and
material breach of, or failure or refusal (other than by reason of his
disability) to perform his duties under, this Agreement which is not cured
within fifteen (15) days after receipt by the Executive of written notice of
same, (ii) fraud, embezzlement, misappropriation of funds or breach of trust in
connection with his services hereunder, (iii) conviction of a felony or any
other crime which involves dishonesty or a breach of trust, or (iv) gross
negligence in connection with the performance of the Executive's duties
hereunder, which is not cured within fifteen (15) days after written receipt by
the Executive of written notice of same. Any termination for Cause shall be made
in writing to the Executive, which notice shall set forth in detail all acts or
omissions upon which the Company is relying for such termination. The Executive
shall have the right to address the Board regarding the acts set forth in the
notice of termination. Upon any termination pursuant to this Section 5.1, the
Company shall only be obligated to pay to the Executive his Base Salary to the
date of termination. The Company shall have no further liability hereunder to
the Executive other than for (i) reimbursement for reasonable business expenses
incurred prior to the date of termination,
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subject however, to the provisions of Section 4.1, and (ii) those continuing
obligations of the Company set forth in Article 19 and Article 20.
5.2 Disability. The Company shall at all times have the
right, upon written notice to the Executive, to terminate the Term of
Employment, if the Executive shall become entitled to benefits under the
Company's group disability policy or any individual disability policy then in
effect, or, if the Executive shall as the result of mental or physical
incapacity, illness or disability, become unable to perform his obligations
hereunder for a period of 90 days in any 12-month period. The Company shall have
sole discretion based upon competent medical advice to determine whether the
Executive continues to be disabled. Upon any termination pursuant to this
Section 5.2, the Company shall (i) pay to the Executive any unpaid Base Salary
through the effective date of termination specified in such notice, (ii) pay to
the Executive a severance payment equal to one month of the Executive's Base
Salary at the time of the termination of the Executive's employment with the
Company. The Company shall have no further liability hereunder to the Executive
other than for (i) reimbursement for reasonable business expenses incurred prior
to the date of termination, subject however, to the provisions of Section 4.1,
and (ii) those continuing obligations of the Company set forth in Article 19 and
Article 20.
5.3 Death. Upon the death of the Executive during the
Term of Employment, the Company shall pay to the estate of the deceased
Executive any unpaid Base Salary through the Executive's date of death. The
Company shall have no further liability hereunder to the Executive other than
for (i) reimbursement for reasonable business expenses incurred prior to the
date of termination, subject however, to the provisions of Section 4.1, and (ii)
those continuing obligations of the Company set forth in Article 19 and Article
20.
5.4 Termination without Cause. Subject to Section 5.8, at
any time the Company shall have the right to terminate the Term of Employment by
written notice to the Executive. Upon any termination pursuant to this Section
5.4 (that is not a termination under any of Sections 5.1, 5.2, 5.3, 5.5 or 5.6),
the Company shall (i) pay to the Executive any unpaid Base Salary through the
effective date of termination specified in such notice, (ii) continue to pay the
Executive's Base Salary for a period (the "Continuation Period") through the
date on which the Term of Employment would have ended pursuant to Section 2
hereof in the absence of an earlier termination pursuant to this Section 5 but
in no event for more than six (6) months from notice of termination hereunder,
(iii) continue to provide the Executive with the benefits he/she was receiving
under Sections 4.2 and 4.4 hereof (the "Benefits") through the end of the
Continuation Period in the manner and at such times as the Incentive
Compensation or Benefits otherwise would have been payable or provided to the
Executive. In the event that the Company is unable to provide the Executive with
any Benefits required hereunder by reason of the termination of the Executive's
employment pursuant to this Section 5.4, then the Company shall pay the
Executive cash equal to the value of the Benefit that otherwise would have
accrued for the Executive's benefit under the plan, for the period during which
such Benefits could not be provided under the plans. The Company's good faith
determination of the amount that would have been contributed or the value of any
Benefits that would have accrued under any plan shall be binding and conclusive
on the Executive. For this purpose, the Company may use as the
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value of any Benefit the cost to the Company of providing that Benefit to the
Executive. Further, the Executive shall continue to vest in the Executive's
Stock Options through the end of the Continuation Period in the same manner and
to the same extent as if his employment hereunder terminated on the last day of
the Continuation Period. The Company shall have no further liability hereunder
to the Executive other than for (i) reimbursement for reasonable business
expenses incurred prior to the date of termination, subject however, to the
provisions of Section 4.1, (ii) payment of compensation for unused vacation days
that have accumulated during the calendar year in which such termination occurs,
and (iii) those continuing obligations of the Company set forth in Article 19
and Article 20. For all purposes hereunder, the failure by the Company to offer
to renew the Agreement following the expiration of the Initial Term or any
Renewal Term on the same terms and conditions hereunder shall be treated as if
the Company terminated this Agreement pursuant to this Section 5.4.
5.5 Termination by Executive.
(a) The Executive shall at all times have the
right, upon sixty (60) days written notice to the Company, to terminate the Term
of Employment.
(b) Upon termination of the Term of Employment
pursuant to this Section 5.5 (that is not a termination under Section 5.6) by
the Executive without Good Reason, the Company shall pay to the Executive any
unpaid Base Salary through the effective date of termination specified in such
notice. The Company shall have no further liability hereunder to the Executive
other than for (i) reimbursement for reasonable business expenses incurred prior
to the date of termination, subject however, to the provisions of Section 4.1,
and (ii) those continuing obligations of the Company set forth in Article 19 and
Article 20. At the Company's sole option, upon receipt of notice from the
Executive pursuant to this Section, the Company may immediately terminate the
Term of Employment, in which case, in addition to the covenants set forth above,
the Company shall pay the Executive 60 days of Base Salary. For all purposes
hereunder, the failure by the Executive to offer to renew the Agreement
following the expiration of the Initial Term or any Renewal Term on the same
terms and conditions hereunder shall be treated as if the Executive terminated
this Agreement pursuant this Section 5.5, except that the Executive shall not be
entitled to any Base Salary in excess of that which is due through the last day
of the Executive's employment hereunder.
(c) Upon termination of the Term of Employment
pursuant to this Section 5.5 (that is not a termination under Section 5.6) by
the Executive for Good Reason, the Company shall pay to the Executive the same
amounts that would have been payable by the Company to the Executive under
Section 5.4 of this Agreement if the Term of Employment had been terminated by
the Company without Cause. The Company shall have no further liability
hereunder.
(d) For purposes of this Agreement, "Good
Reason" shall mean (i) the assignment to the Executive of any duties
inconsistent in any respect with the Executive's position (including status,
offices, titles and reporting requirements), authority, duties or
responsibilities as contemplated by Section 1.2 of this Agreement, or any other
action by the
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Company which results in a diminution in such position, authority, duties or
responsibilities, excluding for this purpose an isolated, insubstantial and
inadvertent action not taken in bad faith and which is remedied by the Company
promptly after receipt of notice thereof given by the Executive; (ii) any
failure by the Company to comply with any of the provisions of Article 3 of this
Agreement, other than an isolated, insubstantial and inadvertent failure not
occurring in bad faith and which is remedied by the Company promptly after
receipt of notice thereof given by the Executive; (iii) the Company's requiring
the Executive to be based at any office or location outside of the area for
which Executive was originally hired to work except for travel reasonably
required in the performance of the Executive's responsibilities. For purposes of
this Section 5.5(d), any good faith determination of "Good Reason" made by the
Board shall be conclusive.
5.6 Change in Control of the Company.
(a) In the event that (i) a Change in Control
(as defined in paragraph (b) of this Section 5.6) in the Company shall occur
during the Term of Employment, and (ii) prior to the later of the Expiration
Date or one year after the date of the Change in Control, either (x) the Term of
Employment is terminated by the Company without Cause, pursuant to Section 5.4
hereof or (y) the Executive terminates the Term of Employment for Good Reason
the Company shall (1) pay to the Executive any unpaid Base Salary through the
effective date of termination, (2) pay to the Executive as a single lump sum
payment, within 30 days of the termination of his employment hereunder, a lump
sum payment equal to the sum of (x) two times the sum of Executive's annual Base
Salary, Incentive Compensation, and the value of the annual fringe benefits
(based upon their cost to the Company) required to be provided to the Executive
under Sections 4.2 and 4.4 hereof, for the year immediately preceding the year
in which his employment terminates, plus (y) the value of the portion of his
benefits under any savings, pension, profit sharing or deferred compensation
plans that are forfeited under those plans by reason of the termination of his
employment hereunder. Further, upon the Change in Control, the Executive's Stock
Options shall immediately vest. The Company shall have no further liability
hereunder to the Executive other than for (i) reimbursement for reasonable
business expenses incurred prior to the date of termination, subject however, to
the provisions of Section 4.1, (ii) payment of compensation for unused vacation
days that have accumulated during the calendar year in which such termination
occurs, and (iii) those continuing obligations of the Company set forth in
Article 19 and Article 20.
(b) For purposes of this Agreement, the term
"Change in Control" shall mean:
(i) Approval by the stockholders of the
Company of (x) a reorganization, merger, consolidation or other form of
corporate transaction or series of transactions, in each case, with
respect to which persons who were the stockholders of the Company
immediately prior to such reorganization, merger or consolidation or
other transaction do not, immediately thereafter, own more than 50% of
the combined voting power entitled to vote generally in the election of
directors of the reorganized, merged or consolidated company's then
outstanding voting securities, in substantially the same proportions as
their ownership immediately prior to such reorganization, merger,
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consolidation or other transaction, or (y) a liquidation or dissolution
of the Company or (z) the sale of all or substantially all of the
assets of the Company (unless such reorganization, merger,
consolidation or other corporate transaction, liquidation, dissolution
or sale is subsequently abandoned);
(ii) the acquisition (other than from
the Company) by any person, entity or "group", within the meaning of
Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act, of more
than 30% of either the then outstanding shares of the Company's Common
Stock or the combined voting power of the Company's then outstanding
voting securities entitled to vote generally in the election of
directors (hereinafter referred to as the ownership of a "Controlling
Interest") excluding, for this purpose, any acquisitions by (1) the
Company or its Subsidiaries, (2) any person, entity or "group" that as
of the Commencement Date of this Agreement owns beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the Securities
Exchange Act) of a Controlling Interest or (3) any employee benefit
plan of the Company or its Subsidiaries.
(iii) The resignation of Xxxxxx X. Xxxxxx
as both Chairman and CEO of the Company, his death, or his absence from
the day to day business affairs of the Company for more than 90
consecutive days due to disability or incapacity.
5.7 Resignation. Upon any notice or termination of
employment pursuant to this Article 5, the Executive shall automatically and
without further action be deemed to have resigned as an officer, and if he or
she was then serving as a director of the Company, as a director, and if
required by the Board, the Executive hereby agrees to immediately execute a
resignation letter to the Board.
5.8 Continual Employment. For so long as (i) the Guaranty
is outstanding, (ii) any of the Additional Guarantees are outstanding or (iii)
the Company is indebted to the Executive, (w) the Board may not remove the
Executive from his position as either President or Chief Executive Officer of
the Company, (x) the Board shall be obligated to nominate the Executive as a
Director as member of the "management" (or equivalent thereof) slate of
Directors, (y) upon election of the Executive as a Director by the stockholders
of the Company, the Directors shall elect the Executive as the Chairman of the
Board, and (z) no other officer of the Company may be removed from his or her
respective position by the Board without the prior written consent of the
Executive. For purposes of this Section 5.8 the term "remove" includes, with
respect to any such officer or the Executive, as the case may be (each, an
"Officer"), anything with respect to such Officer that would give the Executive
a right under Section 5.5 to terminate his Term of Employment for Good Reason.
Notwithstanding the foregoing, nothing contained in this Section 5.8 shall
prevent the Company from removing the Executive from his position as either
President or Chief Executive Officer of the Company pursuant to Section 5.1
hereof.
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5.9 Survival. The provisions of this Article 5,
including, without limitation, Section 5.8, shall survive the termination of
this Agreement, as applicable.
6. Restrictive Covenants.
6.1 Non-Competition. At all times while the Executive is
employed by the Company and for a one year period after the termination of the
Executive's employment with the Company for any reason (other than by the
Company without Cause (as defined in Section 5.1 hereof) or by the Executive for
Good Reason (as defined in Section 5.5(d) hereof)), the Executive shall not,
directly or indirectly, engage in or have any interest in any sole
proprietorship, partnership, corporation or business or any other person or
entity (whether as an employee, officer, director, partner, agent, security
holder, creditor, consultant or otherwise) that directly or indirectly (or
through any affiliated entity) engages in competition with the Company (based on
the business in which the Company was engaged or was actively planning on being
engaged as of the date of termination of the Employee's employment and in the
geographic areas in which the Company operated or was actively planning on
operating as of date of termination of the Employee's employment); provided that
such provision shall not apply to the Executive's ownership of Common Stock of
the Company or the acquisition by the Executive, solely as an investment, of
securities of any issuer that is registered under Section 12(b) or 12(g) of the
Securities Exchange Act of 1934, as amended, and that are listed or admitted for
trading on any United States national securities exchange or that are quoted on
the National Association of Securities Dealers Automated Quotations System, or
any similar system or automated dissemination of quotations of securities prices
in common use, so long as the Executive does not control, acquire a controlling
interest in or become a member of a group which exercises direct or indirect
control or, more than five percent of any class of capital stock of such
corporation.
6.2 Nondisclosure. The Executive shall not at any time
divulge, communicate, use to the detriment of the Company or for the benefit of
any other person or persons, or misuse in any way, any Confidential Information
(as hereinafter defined) pertaining to the business of the Company. Any
Confidential Information or data now or hereafter acquired by the Executive with
respect to the business of the Company (which shall include, but not be limited
to, information concerning the Company's financial condition, prospects,
technology, customers, suppliers, sources of leads and methods of doing
business) shall be deemed a valuable, special and unique asset of the Company
that is received by the Executive in confidence and as a fiduciary, and
Executive shall remain a fiduciary to the Company with respect to all of such
information. For purposes of this Agreement, "Confidential Information" means
information disclosed to the Executive or known by the Executive as a
consequence of or through his employment by the Company (including information
conceived, originated, discovered or developed by the Executive) prior to or
after the date hereof, and not generally known, about the Company or its
business. Notwithstanding the foregoing, nothing herein shall be deemed to
restrict the Executive from disclosing Confidential Information to the extent
required by law.
6.3 Nonsolicitation of Employees and Clients. At all
times while the Executive is employed by the Company and for a two (2) year
period after the termination of the
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Executive's employment with the Company for any reason, the Executive shall not,
directly or indirectly, for himself or for any other person, firm, corporation,
partnership, association or other entity (a) employ or attempt to employ or
enter into any contractual arrangement with any employee or former employee of
the Company, unless such employee or former employee has not been employed by
the Company for a period in excess of six months, and/or (b) call on or solicit
any of the actual or targeted prospective clients of the Company on behalf of
any person or entity in connection with any business competitive with the
business of the Company, nor shall the Executive make known the names and
addresses of such clients or any information relating in any manner to the
Company's trade or business relationships with such customers, other than in
connection with the performance of Executive's duties under this Agreement.
6.4 Ownership of Developments. All copyrights, patents,
trade secrets, or other intellectual property rights associated with any ideas,
concepts, techniques, inventions, processes, or works of authorship developed or
created by Executive during the course of performing work for the Company or its
clients (collectively, the "Work Product") shall belong exclusively to the
Company and shall, to the extent possible, be considered a work made by the
Executive for hire for the Company within the meaning of Title 17 of the United
States Code. To the extent the Work Product may not be considered work made by
the Executive for hire for the Company, the Executive agrees to assign, and
automatically assign at the time of creation of the Work Product, without any
requirement of further consideration, any right, title, or interest the
Executive may have in such Work Product. Upon the request of the Company, the
Executive shall take such further actions, including execution and delivery of
instruments of conveyance, as may be appropriate to give full and proper effect
to such assignment.
6.5 Books and Records. All books, records, and accounts
relating in any manner to the customers or clients of the Company, whether
prepared by the Executive or otherwise coming into the Executive's possession,
shall be the exclusive property of the Company and shall be returned immediately
to the Company on termination of the Executive's employment hereunder or on the
Company's request at any time.
6.6 Definition of Company. Solely for purposes of this
Article 6, the term "Company" also shall include any existing or future
subsidiaries of the Company that are operating during the time periods described
herein and any other entities that directly or indirectly, through one or more
intermediaries, control, are controlled by or are under common control with the
Company during the periods described herein.
6.7 Acknowledgement by Executive. The Executive
acknowledges and confirms that (a) the restrictive covenants contained in this
Article 6 are reasonably necessary to protect the legitimate business interests
of the Company, and (b) the restrictions contained in this Article 6 (including
without limitation the length of the term of the provisions of this Article 6)
are not overbroad, overlong, or unfair and are not the result of overreaching,
duress or coercion of any kind. The Executive further acknowledges and confirms
that his full, uninhibited and faithful observance of each of the covenants
contained in this Article 6 will not cause him any undue hardship, financial or
otherwise, and that enforcement of each of the covenants contained herein will
not impair his ability to obtain employment commensurate with his abilities and
on
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terms fully acceptable to him or otherwise to obtain income required for the
comfortable support of him and his family and the satisfaction of the needs of
his creditors. The Executive acknowledges and confirms that his special
knowledge of the business of the Company is such as would cause the Company
serious injury or loss if he were to use such ability and knowledge to the
benefit of a competitor or were to compete with the Company in violation of the
terms of this Article 6. The Executive further acknowledges that the
restrictions contained in this Article 6 are intended to be, and shall be, for
the benefit of and shall be enforceable by, the Company's successors and
assigns.
6.8 Reformation by Court. In the event that a court of
competent jurisdiction shall determine that any provision of this Article 6 is
invalid or more restrictive than permitted under the governing law of such
jurisdiction, then only as to enforcement of this Article 6 within the
jurisdiction of such court, such provision shall be interpreted and enforced as
if it provided for the maximum restriction permitted under such governing law.
6.9 Extension of Time. If the Executive shall be in
violation of any provision of this Article 6, then each time limitation set
forth in this Article 6 shall be extended for a period of time equal to the
period of time during which such violation or violations occur. If the Company
seeks injunctive relief from such violation in any court, then the covenants set
forth in this Article 6 shall be extended for a period of time equal to the
pendency of such proceeding including all appeals by the Executive.
6.10 Survival. The provisions of this Article 6 shall
survive the termination of this Agreement, as applicable.
7. Injunction. It is recognized and hereby acknowledged by the
parties hereto that a breach by the Executive of any of the covenants contained
in Article 6 of this Agreement will cause irreparable harm and damage to the
Company, the monetary amount of which may be virtually impossible to ascertain.
As a result, the Executive recognizes and hereby acknowledges that the Company
shall be entitled to an injunction from any court of competent jurisdiction
enjoining and restraining any violation of any or all of the covenants contained
in Article 6 of this Agreement by the Executive or any of his affiliates,
associates, partners or agents, either directly or indirectly, and that such
right to injunction shall be cumulative and in addition to whatever other
remedies the Company may possess.
8. Assignment. Neither party shall have the right to assign or
delegate his rights or obligations hereunder, or any portion thereof, to any
other person.
9. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Florida.
10. Section 162(m) Limits. Notwithstanding any other provision of
this Agreement to the contrary, if and to the extent that any remuneration
payable by the Company to the Executive for any year would exceed the maximum
amount of remuneration that the Company may deduct for that year under Section
162(m) ("Section 162(m)") of the Internal Revenue Code of 1986, as amended (the
"Code"), payment of the portion of the remuneration for that year that would not
11
be so deductible under Section 162(m) shall, in the sole discretion of the
Board, be deferred and become payable at such time or times as the Board
determines that it first would be deductible by the Company under Section
162(m), with interest at the "short-term applicable rate" as such term is
defined in section 1274(d) of the Code. The limitation set forth under this
Article 10 shall not apply with respect to any amounts payable to the Executive
or any third party pursuant to Article 5, Article 19 or Article 20.
11. Entire Agreement. This Agreement constitutes the entire
agreement between the parties hereto with respect to the subject matter hereof
and, upon its effectiveness, shall supersede all prior agreements,
understandings and arrangements, both oral and written, between the Executive
and the Company (or any of its affiliates) with respect to such subject matter.
This Agreement may not be modified in any way unless by a written instrument
signed by both the Company and the Executive.
12. Notices. All notices required or permitted to be given
hereunder shall be in writing and shall be personally delivered by courier, sent
by registered or certified mail, return receipt requested or sent by confirmed
facsimile transmission addressed as set forth herein. Notices personally
delivered, sent by facsimile or sent by overnight courier shall be deemed given
on the date of delivery and notices mailed in accordance with the foregoing
shall be deemed given upon the earlier of receipt by the addressee, as evidenced
by the return receipt thereof, or three (3) days after deposit in the U.S. mail.
Notice shall be sent (i) if to the Company, addressed to Xxxxxxxxx.xxx, Inc.,
0000 X. Xxxxxxxx Xxxxx, 0xx Xxxxx, Xxxxx, Xxxxxxx 00000, Attn: Xxxxx X.
Xxxxxxxx, Executive Vice-President, and (ii) if to the Executive, to his address
as reflected on the payroll records of the Company, or to such other address as
either party hereto may from time to time give notice of to the other.
13. Benefits; Binding Effect. This Agreement shall be for the
benefit of and binding upon the parties hereto and their respective heirs,
personal representatives, legal representatives, successors and, where
applicable, assigns, including, without limitation, any successor to the
Company, whether by merger, consolidation, sale of stock, sale of assets or
otherwise. Specifically, this Agreement shall be binding upon the survivor of
the Merger of the Company into AmTec, Inc.
14. Severability. The invalidity of any one or more of the words,
phrases, sentences, clauses or sections contained in this Agreement shall not
affect the enforceability of the remaining portions of this Agreement or any
part thereof, all of which are inserted conditionally on their being valid in
law, and, in the event that any one or more of the words, phrases, sentences,
clauses or sections contained in this Agreement shall be declared invalid, this
Agreement shall be construed as if such invalid word or words, phrase or
phrases, sentence or sentences, clause or clauses, or section or sections had
not been inserted. If such invalidity is caused by length of time or size of
area, or both, the otherwise invalid provision will be considered to be reduced
to a period or area which would cure such invalidity.
15. Waivers. The waiver by either party hereto of a breach or
violation of any term or provision of this Agreement shall not operate nor be
construed as a waiver of any subsequent breach or violation.
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16. Damages. Nothing contained herein shall be construed to
prevent the Company or the Executive from seeking and recovering from the other
damages sustained by either or both of them as a result of its or his breach of
any term or provision of this Agreement. In the event that either party hereto
brings suit for the collection of any damages resulting from, or the injunction
of any action constituting, a breach of any of the terms or provisions of this
Agreement, then the party found to be at fault shall pay all reasonable court
costs and attorneys' fees of the other.
17. Section Headings. The section headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
18. No Third Party Beneficiary. Nothing expressed or implied in
this Agreement is intended, or shall be construed, to confer upon or give any
person other than the Company, the parties hereto and their respective heirs,
personal representatives, legal representatives, successors and assigns, any
rights or remedies under or by reason of this Agreement.
19. Indemnification.
(a) Subject to limitations imposed by law, the Company
shall indemnify and hold harmless the Executive to the fullest extent permitted
by law from and against any and all claims, damages, expenses (including
attorneys' fees), judgments, penalties, fines, settlements, and all other
liabilities incurred or paid by him in connection with the investigation,
defense, prosecution, settlement or appeal of any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative and to which the Executive was or is a party or is threatened to
be made a party by reason of the fact that the Executive is or was an officer,
employee or agent of the Company, or by reason of anything done or not done by
the Executive in any such capacity or capacities, provided that the Executive
acted in good faith, in a manner that was not grossly negligent or constituted
willful misconduct and in a manner he reasonably believed to be in or not
opposed to the best interests of the Company, and, with respect to any criminal
action or proceeding, had no reasonable cause to believe his conduct was
unlawful. The Company also shall pay any and all expenses (including attorney's
fees) incurred by the Executive as a result of the Executive being called as a
witness in connection with any matter involving the Company and/or any of its
officers or directors.
(b) The Company shall pay any expenses (including
attorneys' fees), judgments, penalties, fines, settlements, and other
liabilities incurred by the Executive in investigating, defending, settling or
appealing any action, suit or proceeding described in this Section 19 in advance
of the final disposition of such action, suit or proceeding. The Company shall
promptly pay the amount of such expenses to the Executive, but in no event later
than 10 days following the Executive's delivery to the Company of a written
request for an advance pursuant to this Section 19, together with a reasonable
accounting of such expenses.
(c) The Executive hereby undertakes and agrees to repay
to the Company any advances made pursuant to this Article 19 if and to the
extent that it shall ultimately be found that the Executive is not entitled to
be indemnified by the Company for such amounts.
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(d) The Company shall make the advances contemplated by
this Article 19 regardless of the Executive's financial ability to make
repayment, and regardless whether indemnification of the Indemnitee by the
Company will ultimately be required. Any advances and undertakings to repay
pursuant to this Article 19 shall be unsecured and interest-free.
(e) Without limiting the foregoing, the Company agrees
that it shall defend, indemnify and hold harmless the Executive to the fullest
extent permitted by law, from and against, and shall reimburse the Executive
for, any and all claims, damages, expenses (including attorneys' fees),
judgments, penalties, fines, settlements, and all other liabilities incurred or
paid by him (any of the foregoing, a "Loss") in connection with the
investigation, defense, prosecution, settlement or appeal of any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative, and resulting from or arising out of,
(including any allegation by any third party (including, without limitation, any
local, state or federal governmental agency or entity)), the Guaranty and the
Additional Guarantees. The Executive shall promptly notify the Company of any
such Loss in accordance with Section 12 hereof. The Company shall pay such Loss
to the Executive or object thereto within five (5) days of the receipt of such
notice. The Executive hereby undertakes and agrees to repay the Company any
amounts paid to him pursuant to this Section 19(e) if and to the extent it shall
ultimately be found that the Executive is not entitled to be indemnified by the
Company for such amounts.
(f) The provisions of this Article 19 shall survive the
termination of this Agreement.
20. Executive Financial Assistance to the Company.
20.1 Release of Guaranty and Additional Guarantees. The
Company shall, when reasonable to endeavor, use its commercially reasonable
efforts to (i) obtain from the Bank the full release of the Guaranty and all of
the Executive's liabilities thereunder, (ii) obtain from each creditor and
lender which is the beneficiary of any Additional Guaranty the release of such
Additional Guaranty and all of the Executive's liabilities thereunder, and (iii)
to otherwise take all other commercially reasonable actions to release the
Executive's contingent liabilities arising from the Executive's Guaranty and the
Additional Guarantees.
20.2 Certain other Expenses. The Company agrees to pay and
reimburse the Executive for all of his out-of-pocket costs and expenses in
connection with the preparation, negotiation and execution of the documents
relating to the Credit Agreement and the Executive Financial Assistance
(including, without limitation, fees and disbursements for legal counsel and any
fees for tax planning purposes).
20.3 Life Insurance Premiums. The Company agrees to pay
all of the premiums for the following insurance policies that the Bank has
required to be maintained pursuant to the terms of the Credit Agreement: (i) the
insurance policy on the life of the Executive in the amount of $15,000,000 owned
by the Company, (ii) the insurance policy on the life of the Executive in the
amount of $5,000,000 owned by Terremark Worldwide, Inc., (iii) the insurance
policy on the life of the Executive in the amount of $2,000,000 owned by the
14
Company, and (iv) other insurance policies on the life of the Executive as the
Bank may require from time to time.
20.4 Refinancing Obligations. The Company hereby
acknowledges that in order to obtain the Company Loan, the Executive was
required to agree to provide the Guaranty and the Partial Cash Collateral and to
agree to the Refinancing Obligations. In consideration of the foregoing, the
parties hereto agree as follows:
(a) The Company shall, as of the date hereof,
lend to the Executive $5,000,000, bearing no interest (the "Executive Bridge
Loan"). The Executive Bridge Loan shall be payable, in full, by the Executive
within 90 days from the release by the Bank of the Guaranty and the applicable
lenders and creditors of the Additional Guarantees;
(b) The Executive shall use his commercially
reasonable efforts to repay the Executive Loans (through refinancing with
another lending institution or otherwise) prior to December 31, 2001; provided,
however, that if the Executive Loans have not been so repaid prior to December
31, 2001, the Company agrees that it shall supply to the Executive in cash the
additional amount, in excess of the Partial Cash Collateral, necessary to
provide for the full cash collateralization of the Executive Loans (the
"Additional Cash Collateral"). As of September 6, 2001, the Additional Cash
Collateral would have been approximately $6,500,000. To the extent that the
Company is obligated to so provide the Additional Cash Collateral, the Executive
hereby agrees to use his best efforts to secure from the Bank the release of
such Additional Cash Collateral as soon as the Bank shall no longer require the
Additional Cash Collateral in connection with the Executive Loans, but in no
event later than December 31, 2002;
(c) The Additional Cash Collateral, if any,
shall be placed in a restricted account with the Bank, separate from the account
holding the Executive's Partial Cash Collateral. Such restricted account shall
be in the name of the Company only, and only the Company shall be entitled, and
have the right to receive, all interest earned on the Additional Cash
Collateral; and
(d) If any default by the Executive under any of
the Executive Loans, that is not the result of an act or omission by the
Company, causes the Company to suffer a loss of any or all of the Additional
Cash Collateral (a "Cash Collateral Loss"), then, upon the Company providing
notice of such loss in accordance with Section 12 hereof, the Executive agrees
that he shall, within one business day of receipt of such notice, indemnify the
Company for the full amount of the Cash Collateral Loss.
20.5 Survival. The provisions of this Article 20 shall
survive the termination of this Agreement, as applicable.
15
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first above written.
COMPANY:
TERREMARK WORLDWIDE, INC.
By: /s/Xxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Executive Vice-President
EXECUTIVE:
/s/Xxxxxx X. Xxxxxx
----------------------------------------
Name: Xxxxxx X. Xxxxxx
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