EMPLOYMENT AGREEMENT
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AGREEMENT dated as of the 1st day of April, 2004 by and between Netsmart
Technologies, Inc., a Delaware corporation with its principal office at 0000
Xxxxxxx Xxxxxxx, Xxxxx X-000, Xxxxx Xxxxx, Xxx Xxxx 00000 (the "Company"), and
Xxxxxx Xxxx, residing at 00 Xxxxxxx Xxxxxx, Xxxx Xxxxxx, XX 00000 (the
"Executive") superceding all other agreements or understandings heretofore in
effect.
W I T N E S S E T H :
WHEREAS, the Company has employed the Executive as the chief executive
officer of its subsidiary, Creative Socio-Medics Corp. ("CSM") and as an officer
of the Company and desires to continue to obtain the benefits of Executive's
knowledge, skill and ability in connection with managing the operations of the
Company and to continue to employ Executive on the terms and conditions
hereinafter set forth; and
WHEREAS, the Executive desires to provide his services to the Company
and to accept employment by the Company on the terms and conditions hereinafter
set forth;
NOW, THEREFORE, in consideration of the mutual promises set forth in
this Agreement, the parties agree as follows:
1. Employment and Duties.
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(a) Subject to the terms and conditions hereinafter set forth, the Company
hereby employs the Executive as a senior executive officer. During the
Employment Term, as hereinafter defined, the Executive shall report to the
Company's chief executive officer. The Executive shall work in coordination with
the Company's chief executive officer in such areas as the planning,
organization and direction of the Company's business, and he shall be
responsible for the implementation of the Company's marketing program. The
Executive position shall be as President of the Company. He shall also continue
to serve as Chief Executive Officer of CSM. The Executive shall also perform
such other duties and responsibilities as may be determined by the Company's
board of directors (the "Board") or the Company's chief executive officer, as
long as such duties and responsibilities are consistent with those of the senior
executive officer.
(b) The Executive shall serve as a director of the Company or any of its
subsidiaries, if elected, and in such executive capacity or capacities with
respect to any affiliate of the Company to which he may be elected or appointed,
provided that such duties are consistent with those of a senior executive
officer. During the Employment Term, the Executive shall receive no additional
compensation for services rendered pursuant to this Paragraph 1(b).
(c) Unless terminated earlier as provided for in Paragraph 1(d) or
Paragraph 6 of this Agreement, this Agreement shall have a term commencing as of
the date of this Agreement and expiring on December 31, 2004. The Executive
shall have the right, on notice given not later than sixty (60) days prior to
the end of the term, to extend the term for a period of one (1) year. The
initial term and any one-year extension of such term are collectively referred
to as the "Employment Term."
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(d) Notwithstanding the provisions of Paragraph 1(c) of this Agreement, as
long as this Agreement shall not have been terminated pursuant to Paragraph
6(a), (b) or (c) of this Agreement, the Executive, on ninety (90) days written
notice to the Board, shall have the right to terminate the Employment Term, in
which event (i) the Employment Term shall end on the date set forth in such
notice with the same effect as if such date were the last day of the Employment
Term set forth in Paragraph 1(c) of this Agreement, and (ii) such termination of
the Employment Term by the Executive shall be deemed to be Retirement by the
Executive as such term is defined in the Company's Executive Retirement Plan
(the terms and conditions of which are incorporated by reference herein).
2. Executive's Performance of Duties.
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The Executive hereby accepts the employment contemplated by this
Agreement. During the Employment Term, the Executive shall devote substantially
all of his business time to the performance of his duties under this Agreement,
and shall perform such duties diligently, in good faith and in a manner
consistent with the best interests of the Company.
3. Compensation and Other Benefits.
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(a) For his services to the Company during the Employment Term, the Company
shall pay the Executive an annual salary ("Salary") for the year 2004 at the
rate of $172,439 to be increased on January 1, 2005 and on each January 1st
thereafter by a percentage not less than the greater of (i) five percent (5%) or
(ii) the (then) current annual percentage increase in the "Consumer Price Index
for Urban Wage Earners and Clerical Workers (Revised Series) - New York
Metropolitan Area". As used in this Agreement, the term "Salary" shall mean the
salary in effect at the time of any relevant Company event after giving effect
to the annual adjustments specified herein. All Salary payments shall be payable
in such installments as the Company regularly pays its executive officers, but
not less frequently than semi-monthly.
(b) The Executive will participate in the yearly sales commission plan as
defined in the annual budget. Such commissions will be paid quarterly.
(c) If the Compensation Committee of the Board ("the Committee")
establishes a bonus plan or bonus pool for the Company's key management
employees, which bonus plan or bonus pool may be based on a percentage of the
Company's net income or such other formula as the Committee may determine, or
which bonus plan or bonus pool may be based on the Committee's judgmental
assessment of the Company's strategic progress and performance (including, but
not limited to, the successful completion or implementation of certain
acquisitions, divestitures, partnerships or other business combinations), the
Executive shall participate in such bonus plan or pool commensurate with his
position in the Company. The size of the bonus pool and the extent of
Executive's participation in the bonus pool will be determined by the
Compensation Committee, whose determination shall be final, binding and
conclusive on the Company and the Executive. If, for any year, no bonus plan or
bonus pool is established, the Executive shall be eligible for a discretionary
bonus as determined by the Compensation Committee and the Board. Any bonus
payments made to the Executive shall hereinafter be referred to as "Bonus."
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(d) The Executive shall receive the following benefits during the
Employment Term and for a period of six calendar years following Retirement
(including the year in which Retirement occurs):
(i) Major medical health insurance for the Executive and members of
his immediate family.
(ii) Accident and life insurance to the extent such benefits are
currently provided to the Company's executive officers, and long-term disability
insurance which is currently in effect for the Executive, provided that the
aggregate premiums paid directly by the Company and/or reimbursed by the Company
to the Executive for such insurance coverage shall not exceed $7,500 per annum,
and provided further that during Retirement such insurance coverage shall only
be provided to Executive to the extent permitted by the Company's insurers.
Should the aggregate premium for such insurance coverage be less than $7,500 per
annum during the term of this Agreement, the Executive may, in his sole
discretion, obtain additional insurance coverage such that the aggregate premium
of such additional insurance and the insurance then in force shall not exceed
$7,500 per annum, and the premium for such additional insurance shall be timely
reimbursed to the Executive by the Company.
(iii) Long-term medical care insurance to the extent that the Company
is able, by using reasonable efforts, to obtain such coverage for an annual
premium which does not exceed $3,000. To the extent that the annual premium for
such coverage exceeds $3,000, if the Executive desires such coverage, he shall
be responsible for the additional premiums.
(e) The Executive shall receive the following benefits during the
Employment Term:
(iv) An automobile allowance of $1,200 per month payable monthly.
(v) Vacation of five (5) weeks per annum.
(f) Subsequent to the Employment Term for the balance of the Executive's
life, the Company will obtain major medical health insurance for the
Executive and his spouse which is comparable with the major medical and other
health insurance provided from time to time by the Company to its employees;
provided that to the extent that such insurance costs the Company more than $600
per month, any excess premium shall be paid by the Executive. In the event that
the Executive is covered by major medical insurance by another company
subsequent to the termination of the Employment Term, the Company shall not be
required to provide such benefits to the Executive.
(g) Any payments ("disability insurance payments") received by the
Executive pursuant to a disability policy obtained through the Company (whether
paid for by the Company or the Executive) shall be applied on a
dollar-for-dollar basis to reduce the Salary or disability payments payable by
the Company pursuant to this Agreement during the period when such disability
insurance payments are being made.
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4. Reimbursement of Expenses.
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The Company shall reimburse the Executive, upon presentation of proper
expense statements, for all authorized, ordinary and necessary out-of-pocket
expenses reasonably incurred by the Executive during the Employment Term in
connection with the performance of his services pursuant to this Agreement
hereunder in accordance with the Company's expense reimbursement policy.
5. Additional Consideration Resulting from Certain Covered Transactions.
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(a) For purposes of this Agreement, the term "Covered Transaction" shall
mean a corporate transaction (other than an Excluded Transaction as hereinafter
defined) concluded during the Employment Term or (in the event of the
Executive's Retirement) during a period of five years following the date of such
Retirement, with a third party who is introduced to the Company directly or
indirectly by the Executive. Such Covered Transactions shall include: (i) any
merger, consolidation or sale by the Company of all or substantially all of its
business or assets, or the sale of the stock, business or assets of any
subsidiary; (ii) the acquisition by the Company of the stock or assets of any
other corporation, partnership, or limited liability company, other than the
purchase of capital assets or other assets by the Company in the normal course
of business; (iii) any joint venture or similar transaction pursuant to which
the Company and one or more other parties contribute funds or assets (including
intellectual property rights) to another entity or third party, (iv) any
licensing, distribution or similar transaction in which the Company pays or
receives consideration for the grant or receipt of licensing distribution,
marketing or similar rights; and (v) any other transaction which results in a
business combination.
(b) For purposes of this Agreement, the term "Excluded Transaction" shall
mean a corporate transaction with respect to which (i) the Executive introduced
the Company to an investment banker or business broker or finder or other third
party who is entitled to receive a commission, fee or other compensation with
respect to such corporate transaction, or (ii) a corporate transaction which is
brought to the attention of the Executive in his position as a senior executive
officer or Director of the Company.
(c) In the event that the Company consummates a Covered Transaction
(as herein defined), the Company shall pay to the Executive the Additional
Consideration contemplated by this Agreement. Such Additional Consideration
shall include (i) if the Covered Transaction is a stock or securities
transaction, a certain number of Warrants which equal 2% of the number of shares
of the Company's common stock (or 2% of the number of shares of the Company's
common stock issuable upon the exercise or conversion of convertible securities)
issued or paid by the Company in respect of the Covered Transaction; or (ii) if
the Covered Transaction is a cash transaction, certain cash payment(s) which
equal 1% of the total cash value paid by the Company in respect of the Covered
Transaction.
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(d) Any Warrants issued by the Company to the Executive as the Additional
Consideration provided herein shall (i) have an exercise price equal to the
lower of (x) the closing price of the Company's common stock on the date of the
execution of a definitive agreement with respect to the Covered Transaction, or
(y) the closing price of the Company's common stock on the closing date of the
Covered Transaction; (ii) have a term of five years from the date of issuance;
(iii) provide for cashless exercise thereof; (iv) include anti-dilution
provisions in the event that the Company should (x) make or pay a cash or stock
dividend or distribution with respect to its outstanding shares of common stock,
or (y) subdivide or reclassify its outstanding common stock into a greater or
lesser number of shares by effecting a stock split or reverse split; and (v)
provide "piggyback" registration rights with respect to the shares of common
stock issuable upon the exercise of such Warrants.
(e)The value of any Company securities (including common stock and
convertible securities) referenced herein shall be the greater of (i) the
closing price of such securities on the principal market on which such
securities are traded on the date of closing of the respective Covered
Transaction, or (ii) the average closing price of such securities for the twenty
(20) consecutive trading days commencing five (5) trading days after the closing
of the respective Covered Transaction.
(f)Should the Executive's employment with the Company be terminated by the
Company prior to the end of the Employment Term for any reason other than Cause,
any Additional Consideration owing and payable to the Executive under the
provisions of this Paragraph 5 shall be immediately payable. Should the
Executive's employment with the Company be terminated for Cause, no Additional
Consideration shall be payable notwithstanding the consummation of a Covered
Transaction. Should the Executive terminate his employment with the Company
other than for death, Disability or Retirement, or following a Change of Control
(as hereinafter defined), no Additional Consideration will be due the Executive.
6. Termination of Employment.
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(a) This Agreement and Executive's employment hereunder shall terminate
immediately upon the death of the Executive.
(b) This Agreement and Executive's employment relationship pursuant to this
Agreement, may be terminated by the Executive or the Company on not less than
thirty (30) days' written notice in the event of Executive's Disability. For
purposes of this Agreement, the term "Disability" shall mean any illness,
disability or incapacity of the Executive which prevents him from substantially
performing his regular duties for a period of three (3) consecutive months or
four (4) months, even though not consecutive, in any twelve (12) month period.
However, if the Executive is covered by long-term disability insurance, the
Company may not terminate this Agreement pursuant to this Paragraph 6(b) unless
the Executive is then eligible for and receiving disability payments under his
long-term disability insurance.
(c) In the event of a termination of the Executive's employment as a result
of his death or Disability, as herein defined, the Company shall continue to pay
to the Executive or his beneficiary, his Salary at the annual rate in effect at
the date of death or date of termination resulting from a Disability, until the
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earlier of (i) six (6) months from the date of death or such termination
resulting from a Disability or (ii) the expiration of the Employment Term.
(d) The Company may terminate this Agreement and the Executive's employment
relationship pursuant to this Agreement for Cause, in which event no further
compensation shall be payable to Executive subsequent to the date of such
termination. The term "Cause" shall mean (i) repeated failure to perform
material instructions from the Board, provided that such instructions are
reasonable and consistent with Executive's duties as set forth in Paragraph
1 of this Agreement, (ii) a breach of Paragraphs 7, 8 or 9 of this Agreement;
(iii) a breach of trust whereby the Executive obtains personal gain or benefit
at the expense of or to the detriment of the Company; or (iv) a conviction of
the Executive of any felony. If the Company proposes to terminate this Agreement
pursuant to clauses (i), (ii) or (iii) of this Paragraph 6(d), the Company shall
notify the Executive in writing setting forth in reasonable detail the basis for
the proposed termination, and the Executive shall have a reasonable opportunity
to respond to the Board and to be represented before the Board by counsel. If
this Agreement is terminated pursuant to clause (iv) of this Paragraph 6(d), and
the conviction is subsequently reversed on appeal, the Company shall pay the
Executive his Salary for the balance of the Employment Term. For purposes of
clause (iv) of this Paragraph 6(d), a guilty plea or plea of nolo contendere or
similar plea shall be deemed to be a conviction.
(e) In the event that the Company terminates the Executive's employment
other than as provided in Paragraphs 6(a), (b), (c) and (d) hereof, the Company
shall pay to Executive as severance payments (w) his Salary then in effect as
provided in this Agreement for the balance of the Employment Term, (x) his Bonus
for the year immediately preceding such termination for the balance of the
Employment Term, (y) his automobile allowance, and (z) amounts due in respect of
earned, but unused vacation, all of which shall be paid annually in twelve (12)
equal monthly installments commencing within the month following the month in
which Executive's termination occurs. The period during which such severance
payments are payable shall be considered the "Severance Period", and following
any such Severance Period, the Executive's Retirement shall commence for
purposes of this Agreement and the Company's Executive Retirement Plan.
(f) In the event that, as a result of or following a Change of Control (as
hereinafter defined), the Executive is terminated by the Company other than for
death, Disability or Cause, or resigns for any reason (including Retirement),
the Company shall pay to the Executive severance in an amount equal to the
product of forty-eight (48) multiplied by one twelfth (1/12) of the sum of (i)
his annual Salary then in effect, (ii) his average Bonus and/or commissions, as
the case may be, for prior three years, (iii) his annual automobile allowance
and (iv) his annual vacation pay. The severance payment provided herein shall be
considered the "Change-in-Control Severance" and shall be paid to the Executive
on the date of the termination of his employment.
(g) Should the payment of the Change-in-Control Severance provided in
Paragraph 6(f) hereof result in the Executive being subject to an "excise tax"
on "excess parachute payments" pursuant to the provisions and definitions of
Section 280(G) of the Internal Revenue Code ("the Code") and pertinent Treasury
Department regulations related thereto, the payment of such severance shall be
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adjusted by the Company such that the net after-tax benefit to the Executive of
such severance payment (giving effect to any applicable excise tax, income tax
and/or other taxes) will be the greater of that benefit resulting from (x) the
Company's payment of the Change-in-Control Severance provided in Paragraph 6(f)
hereof, or (y) the Company's payment of a severance equal to 2.99 times the
Executive's "base compensation amount" as such term is defined in Section 280(G)
of the Code. For purposes of this Paragraph 6(g), all calculations of the
Change-in-Control Severance or other severance, and the Company's obligations
related thereto, and of the Executive's tax liability related thereto, shall be
made and agreed to by the Company and the Executive's personal tax advisor, and
failing such agreement, a third-party professional tax accountant not associated
with the Company or the Executive shall be retained by mutual agreement of the
Company and the Executive to resolve any such disagreement or dispute. The costs
associated with the retention of any such third-party tax accountant shall be
borne by the Company.
(h) For purposes of this Agreement, a Change of Control shall be deemed to
have occurred if (x) any "person" (as such term is used in Sections 13(d) and
14(d)(2) of the Securities Exchange Act of 1934, as amended) is or becomes the
beneficial owner, directly or indirectly, of securities of the Company
representing twenty five (25%) percent or more of the combined voting power of
the Company's then outstanding securities, or (y) during any period of two (2)
consecutive years, individuals who at the beginning of such period constitute
the Board cease for any reason to constitute a least a majority thereof unless
the election of each new director was nominated, ratified or approved by at
least two-thirds (2/3) of the directors then still in office who were either
directors at the beginning of such period or who were elected or appointed with
the approval or ratification of at least two-thirds (2/3) of the directors who
were directors at the beginning of such period, or (z) the Board of Directors
determines that an event (including a "CSM Disposition" as defined herein),
other than as described in clauses (x) and (y) of this Paragraph 6(h), has
resulted and will result in a Change of Control.
(i) For purposes of this Agreement, a CSM Disposition shall mean a
transaction, however structured, as a result of which the Company ceases to own
the business presently being conducted by CSM, as the same business may be
developed in the future, and includes, but is not limited to, a sale by CSM of
all or a substantial portion of its business and assets, the sale by the Company
of all or substantially all of the stock of CSM (provided that a public offering
by CSM shall not be treated as a CSM Disposition), or the merger or
consolidation of CSM with or into another corporation if, as a result thereof,
the Company ceases to own a controlling interest in CSM.
7. Trade Secrets and Proprietary Information.
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The Executive recognizes and acknowledges that the Company, through the
expenditure of considerable time and money, has developed and will continue to
develop in the future, information concerning customers, clients, marketing,
products, services, business, research and development activities and
operational methods of the Company and its customers or clients, contracts,
financial or other data, technical data or any other confidential or proprietary
information possessed, owned or used by the Company, the disclosure of which
could or does have a material adverse effect on the Company, its business, any
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business it proposes to engage in, its operations, financial condition or
prospects and that the same are confidential and proprietary and considered
"confidential information" of the Company for the purposes of this Agreement. In
consideration of his employment hereunder, the Executive agrees that he will
not, during or after the Term, without the consent of the Board make any
disclosure of confidential information now or hereafter possessed by the
Company, to any person, partnership, corporation or entity either during or
after the term here of, except that nothing in this Agreement shall be construed
to prohibit the Executive from using or disclosing such information (a) if such
disclosure is necessary in the normal course of the Company's business in
accordance with Company policies or instructions or authorization from the
Board, (b) such information shall become public knowledge other than by or as a
result of disclosure by a person not having a right to make such disclosure, (c)
complying with legal process; provided, that in the event the Executive is
required to make disclosure pursuant to legal process, the Executive shall give
the Company prompt notice thereof and the opportunity to object to the
disclosure, or (d) subsequent to the Term, if such information shall have either
(i) been developed by the Executive independent of any of the Company's
confidential or proprietary information or (ii) been disclosed to the Executive
by a person not subject to a confidentiality agreement with or other obligation
of confidentiality to the Company. For the purposes of Paragraphs 7, 8 and 9 of
this Agreement, the term "Company" shall include the Company, its parent, its
subsidiaries and affiliates.
8. Covenant Not To Solicit or Compete.
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(a) During the period from the date of this Agreement until one (1) year
after the Executive is no longer receiving payments from the Company hereunder
or under the Company's Executive Retirement Plan, the Executive will not,
directly or indirectly:
(i) Persuade or attempt to persuade any person or entity which is or
was a customer, client or supplier of the Company to cease doing business with
the Company, or to reduce the amount of business it does with the Company (the
terms "customer" and "client" as used in this Paragraph 8 to include any
potential customer or client to whom the Company submitted bids or proposals, or
with whom the Company conducted negotiations, during the term of Executive's
employment hereunder or during the twelve (12) months preceding the termination
of his employment);
(ii) solicit for himself or any other person or entity other than the
Company the business of any person or entity which is a customer or client of
the Company, or was a customer or client of the Company during the one (1) year
period prior to the termination of his employment;
(iii) persuade or attempt to persuade any employee of the Company, or
any individual who was an employee of the Company during the one (1) year period
prior to the termination of his employment, to leave the Company's employ, or to
become employed by any person or entity other than the Company; or
(iv) engage in any business in the United States whether as an
officer, director, consultant, partner, guarantor, principal, agent, employee,
advisor or in any manner, which directly competes with the business of the
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Company as it is engaged in at the time of the termination of this Agreement,
unless, at the time of such termination or thereafter during the period that the
Executive is bound by the provisions of this Paragraph 8, the Company ceases to
be engaged in such activity, provided, however, that nothing in this Paragraph 8
shall be construed to prohibit the Executive from owning an interest of not more
than five (5%) percent of any public company engaged in such activities.
(b) The Executive acknowledges that the restrictive covenants (the
"Restrictive Covenants") contained in Paragraphs 7, 8 and 9 of this Agreement as
a condition of his employment are reasonable and valid in geographical and
temporal scope and in all other respects. If any court determines that any of
the Restrictive Covenants, or any part of any of the Restrictive Covenants, is
invalid or unenforceable, the remainder of the Restrictive Covenants and parts
thereof shall not thereby be affected and shall remain in full force and effect,
without regard to the invalid portion. If any court determines that any of the
Restrictive Covenants, or any part thereof, is invalid or unenforceable because
of the geographic or temporal scope of such provision, such court shall have the
power to reduce the geographic or temporal scope of such provision, as the case
may be, and, in its reduced form, such provision shall then be enforceable.
(c) The Company acknowledges that the payment of his severance hereunder
and/or any other compensation or benefit due to the Executive is a necessary
prerequisite to the Executive being bound by the Restrictive Covenants. If the
Company fails to pay to the Executive his severance hereunder, and/or any other
compensation or benefit due to the Executive, or any part thereof, within ten
business days after receipt of written notice of such failure, the Executive
shall be relieved of his obligations to comply with the Restrictive Covenants.
9. Inventions and Discoveries.
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Executive agrees promptly to disclose in writing to the Company any
invention or discovery made by him during the period of time that this
Agreement remains in full force and effect, whether during or after working
hours, in any business in which the Company is then engaged or which otherwise
relates to any product or service dealt in by the Company and such inventions
and discoveries shall be the Company's sole property. Upon the Company's
request, Executive shall execute and assign to the Company all applications for
copyrights and letters patent of the United States and such foreign countries as
the Company may designate, and Executive shall execute and deliver to the
Company such other instruments as the Company deems necessary to vest in the
Company the sole ownership of all rights, title and interest in and to such
inventions and discoveries, as well as all copyrights and/or patents. If
services in connection with applications for copyrights and/or patents are
performed by Executive at the Company's request after the termination of his
employment hereunder, the Company shall pay him reasonable compensation for such
services rendered after termination of this Agreement.
10. Injunctive Relief.
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Executive agrees that his violation or threatened violation of
any of the provisions of Paragraphs 7, 8 or 9 of this Agreement shall cause
immediate and irreparable harm to the Company. In the event of any breach or
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threatened breach of any of said provisions, Executive consents to the entry of
preliminary and permanent injunctions by a court of competent jurisdiction
prohibiting Executive from any violation or threatened violation of such
provisions and compelling Executive to comply with such provisions. This
Paragraph 10 shall not affect or limit, and the injunctive relief provided in
this Paragraph 10 shall be in addition to, any other remedies available to the
Company at law or in equity or in arbitration for any such violation by
Executive. In the event an injunction is issued against any such violation by
Executive, the period referred to in Paragraph 8 of this Agreement shall
continue until the later of the expiration of the period set forth therein or
one (1) month from the date a final judgment enforcing such provisions is
entered and the time for appeal has lapsed. Subject to Paragraph 8(c) of this
Agreement, the provisions of Paragraphs 7, 8, 9 and 10 of this Agreement shall
survive any termination of this Agreement and Executive's employment
relationship with the Company pursuant to this Agreement.
11. Indemnification.
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The Company shall provide the Executive with payment of legal fees and
indemnification to the maximum extent permitted by the Company's Certificate of
Incorporation, By-Laws, and the Delaware General Corporation Law.
12. Miscellaneous.
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(a) Executive represents, warrants, covenants and agrees that he has a
right to enter into this Agreement, that he is not a party to any agreement or
understanding, oral or written, which would prohibit performance of his
obligations under this Agreement, and that he will not use in the performance of
his obligations hereunder any proprietary information of any other party which
he is legally prohibited from using. The Company represents, warrants and agrees
that it has full power and authority to execute and deliver this Agreement and
perform its obligations hereunder. The Company further represents, warrants and
agrees that the Agreement: (x) has been duly authorized by the Board and no
other corporate action is required of the Company to enter into this Agreement
and perform its obligations hereunder; (y) does not require the consent of any
third party; and (z) does not violate any law, regulation, rule or material
agreement, mortgage, bond, pledge, note or other instrument to which it or its
properties are bound.
(b) Any notice, consent or communication required under the provisions of
this Agreement shall be given in writing and sent or delivered by hand,
overnight courier or messenger service, against a signed receipt or
acknowledgment of receipt, or by registered or certified mail, return receipt
requested, or facsimile or similar means of communication if receipt is
acknowledged or if transmission is confirmed by mail as provided in this
Paragraph 12(b), to the parties at their respective addresses set forth at the
beginning of this Agreement or by facsimile to the Company at (000) 000-0000 or
to Executive at, with notice to the Company being sent to the attention of the
individual who executed this Agreement on behalf of the Company. Either party
may, by like notice, change the person, address or facsimile number to which
notice is to be sent. If no facsimile number is provided for the Executive,
notice to him shall not be sent by facsimile.
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(c) This Agreement shall in all respects be construed and interpreted in
accordance with, and the rights of the parties shall be governed by, the laws of
the State of New York applicable to contracts executed and to be performed
wholly within such State, without regard to principles of conflicts of laws
except that the provisions of Paragraph 11 shall be governed by the Delaware
General Corporation law.
(d) Except for actions, suits, or proceedings taken pursuant to or under
Paragraph 8, 9, 10 or 11 of this Agreement, any dispute concerning this
Agreement or the rights of the parties hereunder shall be submitted to binding
arbitration in New York City before a single arbitrator under the rules of the
American Arbitration Association. The award of the arbitrator shall be final,
binding and conclusive on all parties, and judgment on such award may be entered
in any court having jurisdiction. The arbitrator shall have the power, in his
discretion, to award counsel fees and costs to the prevailing party. The
arbitrator shall have no power to modify or amend any specific provision of this
Agreement except as expressly provided in Paragraph 12(f) of this Agreement.
(e) Notwithstanding the provisions of Paragraph 12(d) of this Agreement,
with respect to any claim for injunctive relief or other equitable remedy
pursuant to Paragraph 10 of this Agreement or any claim to enforce an
arbitration award or to compel arbitration, the parties hereby (i) consent to
the exclusive jurisdiction of the United States District Court for the Southern
or Eastern District of New York and Supreme Court of the State of New York in
the County of New York or Suffolk, (ii) agree that any process in any action
commenced in such court under this Agreement may be served upon them personally,
either (x) by certified or registered mail, return receipt requested, or by
Federal Express or other courier service which obtains evidence of delivery,
with the same full force and effect as if personally served upon them in New
York City or Suffolk County, as the case may be, or (y) by any other method of
service permitted by law, and (iii) waives any claim that the jurisdiction of
any such court is not a convenient forum for any such action and any defense of
lack of in personam jurisdiction with respect thereof.
(f) If any term, covenant or condition of this Agreement or the application
thereof to any party or circumstance shall, to any extent, be determined to be
invalid or unenforceable, the remainder of this Agreement, or the application of
such term, covenant or condition to parties or circumstances other than those as
to which it is held invalid or unenforceable, shall not be affected thereby and
each term, covenant or condition of this Agreement shall be valid and be
enforced to the fullest extent permitted by law, and any court or arbitrator
having jurisdiction may reduce the scope of any provision of this Agreement,
including the geographic and temporal restrictions set forth in Paragraph 8 of
this Agreement, so that it complies with applicable law.
(g) This Agreement constitute the entire agreement of the Company and the
Executive as to the subject matter hereof, superseding all prior or
contemporaneous written or oral understandings or agreements, including any and
all previous employment agreements or understandings, all of which are hereby
terminated, with respect to the subject matter covered in this Agreement. This
Agreement may not be modified or amended, nor may any right be waived, except by
11
a writing which expressly refers to this Agreement, states that it is intended
to be a modification, amendment or waiver and is signed by both parties in the
case of a modification or amendment or by the party granting the waiver. No
course of conduct or dealing between the parties and no custom or trade usage
shall be relied upon to vary the terms of this Agreement. The failure of a party
to insist upon strict adherence to any term of this Agreement on any occasion
shall not be considered a waiver or deprive that party of the right thereafter
to insist upon strict adherence to that term or any other term of this
Agreement.
(h) Neither party hereto shall have the right to assign or transfer any of
its or his rights hereunder except in connection with a merger of consolidation
of the Company or a sale by the Company of all or substantially all of its
business and assets.
(i) This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective heirs, successors, executors, administrators
and permitted assigns.
(j) The headings in this Agreement are for convenience of reference only
and shall not affect in any way the construction or interpretation of this
Agreement.
(k) No delay or omission to exercise any right, power or remedy accruing to
either party hereto shall impair any such right, power or remedy or shall be
construed to be a waiver of or an acquiescence to any breach hereof. No waiver
of any breach hereof shall be deemed to be a waiver of any other breach hereof
theretofore or thereafter occurring. Any waiver of any provision hereof shall be
effective only to the extent specifically set forth in an applicable writing.
All remedies afforded to either party under this Agreement, by law or otherwise,
shall be cumulative and not alternative and shall not preclude assertion by such
party of any other rights or the seeking of any other rights or remedies against
any other party.
IN WITNESS WHEREOF, the parties have executed this Agreement as
of the date first above written.
NETSMART TECHNOLOGIES, INC.
By: /s/ Xxxx S.T. Xxxxxxxxx
-------------------------------
Chairman, Compensation Committee
By: /s/ Xxxxx X. Xxxxxx
-------------------------------
Xxxxx X. Xxxxxx, Chief Executive Officer
THE EXECUTIVE
/s/ Xxxxxx Xxxx
-----------------------------
Xxxxxx Xxxx
