EMPLOYMENT AGREEMENT (the "Agreement"), effective as of December 1,
1998 (the "Effective Date"), between eB2B Commerce, Inc., a Delaware corporation
with principal offices at 00 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, (the
"Company") and Xxxxx Xxxxxxxx, residing at 000 Xxxx Xxxxxxx, Xxxxxxxxxxx, Xxx
Xxxx, ("Xxxxxxxx"). The Company and Xxxxxxxx may be referred to herein
collectively as the "Parties" or individually as a "Party."
WHEREAS, the Company is engaged in the sales and service of building,
owning and operating electronic commerce networks;
WHEREAS, Xxxxxxxx currently serves as the President and Chief Executive
Officer of the Company; and
WHEREAS, the Company and Xxxxxxxx believe that it is appropriate for
them to memorialize their understandings with respect to Fiorillo's employment,
including confidentiality and non-competition provisions, and agree as to each
other's obligations pursuant to their employer-employee relationship.
NOW, THEREFORE, in consideration of the mutual covenants herein set
forth, the Parties do hereby agree as follows:
1 Employment. The Company hereby employs Xxxxxxxx and Xxxxxxxx accepts
this employment and agrees to render services to the Company on the terms and
conditions set forth in this Agreement. Xxxxxxxx shall serve in the capacity of
President and Chief Executive Officer, perform services for the Company normally
associated with such positions, and use his best efforts to meet the business
requirements and goals set by the board of directors of the Company (the
"Board"). In furtherance thereof, Xxxxxxxx will devote his best efforts,
including his full-time attention, during reasonable business hours, to the
affairs and business of the Company. Xxxxxxxx further agrees to observe and
comply with the rules and regulations of the Company as adopted by the Board
with respect to performance of his duties, and to carry out and perform orders,
directions, and policies enacted by the Board.
2 Term. The term of this Employment Agreement shall be the period from
the Effective Date and terminating on December 31, 2002 (the "Initial Employment
Term"). The Agreement shall thereafter automatically renew for successive one
year terms, until terminated by either Party in accordance with this Agreement
(the "Succeeding Employment Term"), unless either Party provides written notice
of termination to the other party at least ninety (90) days prior to the
expiration of the Initial Employment Term or any Succeeding Employment Term.
3 Compensation.
3.1 Base Salary. The Company will compensate and pay Xxxxxxxx for his
services during the term of this Agreement at a base salary of $195,000 per
year, and the Company agrees that the base salary will increase annually in an
amount no less than five (5%) percent of the previous year's base salary (the
"Base Salary"). The Base Salary shall be payable to Xxxxxxxx in accordance with
the Company's standard payroll policy for similarly situated employees of the
Company. The Company has the right, from the Effective Date to December 31,
1999, to accrue the Base Salary of Xxxxxxxx. At any time thereafter, the
Company's right and conditions to accrue the Base Salary of Xxxxxxxx shall be
mutually agreed upon by the Company and Xxxxxxxx. In the event that the Base
Salary is accrued, Xxxxxxxx has the right to convert the accrued Base Salary
(less applicable withholding taxes and standard payroll deductions) ("Accrued
Salary") to purchase shares of the Company's Common Stock, in accordance with
the Accrued Salary Stock Purchase Agreement executed simultaneously with the
execution of this Agreement.
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3.2 Bonus. Xxxxxxxx may receive, from time to time, bonus compensation
from the Company, as established by the Board following the negotiation of the
terms by the Parties (the "Bonus Compensation"). If at any time hereafter the
Company shall adopt a bonus program, an option program or any other form of
equity participation for senior executives of the Company, Xxxxxxxx shall be
eligible to participate in such program in a manner and capacity commensurate
with his position and duties. Notwithstanding the foregoing, For each calendar
year of this Agreement, commencing with the 1999 calendar year, the Company will
pay Xxxxxxxx a bonus of no less than fifty thousand ($50,000) dollars, payable
by March 15th of the following year.
3.3 Performance Based Options. The parties acknowledge that Xxxxxxxx
and the Company have entered into the 1998 Executive Performance Equity
Agreement (the "Executive Performance Agreement"), to which Xxxxxxxx will be
granted options ("Award") to purchase up to two hundred fifty thousand (250,000)
shares of the Company's Common Stock provided that certain performance goals are
met.
3.4 Stock Options. In addition, and without limiting the foregoing,
during the term of this Agreement, Xxxxxxxx shall be entitled to participate, as
determined by the Board of Directors, in the Company's incentive stock option
plan to the same extent as other employees of the Company. For purposes of this
Agreement, "Options" shall mean any options granted under the Company's
incentive stock option plan and the Executive Performance Agreement.
3.5 Deferred Compensation.
3.6 Amount. Deferred Compensation shall be the amount which is
calculated as the greater of (A) four hundred (400%) percent of the Base Salary
payments Xxxxxxxx would have received had his employment continued for the
remaining term of this Agreement (including yearly increases); or (B) an amount
equal to two hundred fifty (250%) percent of the highest annual compensation
earned by Xxxxxxxx in the past three (3) years (including both Base Salary and
Bonus Compensation). In addition to the Deferred Compensation, Xxxxxxxx shall be
entitled to all of the benefits and personal perquisites otherwise provided in
this Agreement (including the car allowance, as described in Section 4.2 hereof)
during the period of time which is the greater of (X) the remaining term of this
Agreement, or (Y) three (3) years following the date of termination. The
Deferred Compensation herein shall be deemed liquidated damages resulting from
the Company's sole and exclusive remedy for any such termination. Deferred
Compensation shall not be diminished or offset by reason of any earnings by
Xxxxxxxx subsequent to the date of termination.
3.7 Payment of Deferred Compensation. Except as otherwise provided
below, the Deferred Compensation shall be paid in monthly installments over the
twelve (12) months following the event giving rise to the payment of Deferred
Compensation. If employment termination is a result of the death of Xxxxxxxx,
the initial Deferred Compensation payments shall be made within fifteen (15)
days after the personal representative of Fiorillo's estate notifies the Company
that Letters Testamentary have been issued to the estate appointing an
authorized representative of the estate.
3.8 Withholding. All compensation paid to Xxxxxxxx shall be subject to
the applicable withholding taxes and other employment taxes as required with
respect to compensation paid by an employer to an employee.
4 Benefits.
4.1 Health Insurance; Vacation. The Company shall provide Xxxxxxxx with
health insurance coverage, personal time and other benefits during the term of
this Agreement as
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agreed upon by the Board, but in no event will such benefits be less than those
offered to other employees of the Company. Xxxxxxxx shall be entitled to four
(4) weeks paid vacation during each year of this Agreement and an additional
week for each additional year of service thereafter.
4.2 Car Allowance. The Company will pay to Xxxxxxxx a car allowance of
eight hundred fifty ($850) dollars per month.
4.3 Life Insurance. Provided the Company has a net worth (as reflected
on any quarterly or annual financial statements) in excess of one million
($1,000,000) dollars, the Company shall provide, at its own expense, life
insurance coverage on Fiorillo's life for one million ($1,000,000) dollars.
Xxxxxxxx shall have full discretion to name the beneficiary of this insurance.
The Company shall have the right at its own expense and for its own benefit to
purchase additional insurance on Fiorillo's life for the benefit of the Company,
and Xxxxxxxx shall cooperate by providing necessary information, submitting to
required medical examinations, and otherwise complying with the insurance
carrier's requirements.
5 Expenses. The Company shall reimburse Xxxxxxxx or otherwise provide for
or pay for all reasonable expenses incurred by Xxxxxxxx in furtherance of or in
connection with the business of the Company, including, but not by way of
limitation, (i) all reasonable expenses incurred by Xxxxxxxx in accordance with
the Company's travel policy, as established by the Board; and (ii) all
reasonable expenses in connection with Fiorillo's attendance at trade and
professional conferences, which are in furtherance of the business of the
Company. Xxxxxxxx agrees that he will furnish the Company with adequate records
and other documents for the substantiation of each such business expense.
6 Employment Termination.
6.1 Resignation of Xxxxxxxx. The Parties agree that Xxxxxxxx has the
right to voluntarily terminate his employment with the Company by providing the
Company with a minimum of sixty (60) days' notice. Upon the termination date
specified in the notice, Xxxxxxxx will cease to have any of the powers
associated with the offices he held with the Company. In such event, all of the
Company's obligations under this Agreement will terminate immediately upon the
date of such termination of employment, and the Company will not be required to
pay Xxxxxxxx the Deferred Compensation.
6.2 Termination by the Company for Convenience. The Parties agree that
the Board has the right to terminate Fiorillo's employment for convenience
during the term of this Agreement upon notice to Xxxxxxxx. In such event, the
Company will pay Xxxxxxxx the Deferred Compensation. The date of termination
will be the date specified in a notice from the Board, and Xxxxxxxx will cease
to have any power of his office as of such date.
6.3 Termination by the Company for Cause. The Parties agree that the
Board has the right to terminate Fiorillo's employment during the term of this
Agreement for "Cause." For the purposes of this Agreement, the term "Cause" will
mean:
6.3.1 Conduct on Fiorillo's part willfully intended to or likely to
injure the Company's business or reputation;
6.3.2 Actions by Xxxxxxxx intentionally furnishing materially
false, misleading, or omissive information to the Board;
6.3.3 Xxxxxxxx is convicted of any felony or other serious offense;
6.3.4 Abusive use of drugs or alcohol by Xxxxxxxx;
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6.3.5 Any fraud, embezzlement or misappropriation by Xxxxxxxx of
the "assets" of the Company. For the purposes of this provision, the Parties
acknowledge that "asset" includes, but is not limited to the "Confidential
Information" (as defined in Section 7 of this Agreement); or
6.3.6 The willful and significant failure by Xxxxxxxx to perform
duties and obligations as set forth in this Agreement, resulting in substantial
damage to the Company, but not encompassing illness, physical or mental
incapacity.
In the event that Fiorillo's employment is terminated by the Company
for Cause, the date of employment termination will be as specified in a notice
to Xxxxxxxx from the Company, and Xxxxxxxx will cease to have any authority to
act on behalf of the Company as of such date. The Company will pay Xxxxxxxx the
Base Salary and any Bonus Compensation due him as of such date, and all benefits
provided by the Company to Xxxxxxxx will cease as of such date except as
otherwise required by law. In such event, the Company will not be required to
pay Xxxxxxxx the Deferred Compensation.
6.4 Termination by the Company for Death or Disability. The Parties
agree that Fiorillo's employment will terminate upon Fiorillo's death or
Disability. The term "Disability" shall be defined as Fiorillo's inability,
through physical or mental illness or other cause, to perform the majority of
his usual duties for a period of at least three (3) continuous months. If
Fiorillo's employment is terminated due to Fiorillo's death or Disability, the
Company will pay Xxxxxxxx the Deferred Compensation.
6.5 Good Reason. Xxxxxxxx may terminate his employment for Good Reason
("Good Reason") upon sixty (60) days' notice to the Company if (i) Fiorillo's
duties are materially diminished or altered so as to be inconsistent with
Fiorillo's position, authority or responsibilities as the President and Chief
Executive Officer of the Company; (ii) any change of either of Fiorillo's two
titles; (iii) any substantial adverse change in Fiorillo's position, authority
or responsibilities as the President and Chief Executive Officer; (iv) the
material failure by the Company to comply with the terms of this Agreement; (v)
the Company requires Xxxxxxxx to be based or perform services at any location
more than fifty (50) miles from New York, NY (except normal travel requirements
associated with Fiorillo's position and titles); or (vi) Fiorillo's Base Salary
is materially diminished. In the event Fiorillo's employment relationship with
the Company is terminated for "Good Reason," the Company will pay Xxxxxxxx the
Deferred Compensation. In the event that Xxxxxxxx shall in good faith give a
"Notice of Termination," as hereinafter defined in Section 6.7 hereof, for Good
Reason and it shall thereafter be determined that Good Reason did not exist, the
employment of Xxxxxxxx shall, unless the Company and Xxxxxxxx shall otherwise
mutually agree, be deemed to have terminated, at the date of the giving of such
purported Notice of Termination. In such event Xxxxxxxx shall be deemed to have
elected to voluntarily resign and shall be entitled to receive only those
payments and benefits which he would have been entitled to receive at such date
under Section 6.1 of this Agreement.
6.6 Change of Control. Provided that the Company is a public company,
Xxxxxxxx may terminate this Agreement upon thirty (30) days' notice to the
Company at any time within the one hundred eighty (180) day period following the
date of the occurrence of a "Change of Control." For the purposes of this
Agreement, a "Change of Control" shall be deemed to have occurred if: the
Company has a net worth of at least one million ($1,000,000) dollars (as
reflected on any quarterly or annual financial statement), and either (i) a
third person, including an entity or a "group" as defined in Article 13(d) or
14(d) of the Securities Exchange Act of 1934, as amended (other than an entity
or "group" which includes Xxxxxxxx), becomes the beneficial owner of shares of
the Company having thirty (30%) percent or more of the total number of votes
that may be cast for the election of directors of the Company in the year 2000
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and thereafter; or (ii) as the result of, or in connection with, any cash tender
or exchange offer, merger of other business combination, sale of assets or
contested election, or any combination of the foregoing transactions (a
"Transaction"), the persons who were directors of the Company before the
Transaction shall cease to constitute a majority of the Board of the Company or
any successor to the Company. In the event Fiorillo's employment relationship
with the Company is terminated for a Change of Control, the Company will pay
Xxxxxxxx the Deferred Compensation.
6.7 Notice of Termination. Any termination by the Company for Cause, or
by Xxxxxxxx for Good Reason shall be communicated by Notice of Termination to
the other Party hereto given in accordance with Section 18 hereof. For purposes
of this Agreement, a "Notice of Termination" means a written notice which (i)
indicates the specific termination provision in this Agreement relied upon, (ii)
sets forth in reasonable detail the facts and circumstances claimed to provide a
basis for termination of Fiorillo's employment under the provision so indicated
and (iii) if the termination date is other than the date of receipt of such
notice, specifies the termination date of this Agreement which date shall be in
accordance with the specific termination provision of this Agreement relied
upon.
6.8 Obligations of the Company Upon Certain Terminations.
6.8.1 Options. In the event that Fiorillo's employment with the
Company is terminated pursuant to Sections 6.2, 6.4, 6.5 and 6.6 of this
Agreement, all Options granted to Xxxxxxxx by the Company shall immediately vest
upon such termination and remain exercisable until the scheduled expiration date
of each such Option. The Options shall be subject to the provisions of the
specific option agreement currently in effect with regard to each Option grant,
provided that, to the extent the provisions of the option agreements are
inconsistent with this Section 6.8.1, the Section shall control.
6.8.2 Other Services. In the event that Fiorillo's employment with
the Company is terminated pursuant to Sections 6.2, 6.5 and 6.6 of this
Agreement, the Company shall, for a period of two (2) years following his
termination, provide Xxxxxxxx with (i) office space of no less than one thousand
(1,000) square feet located in a reputable office building in midtown Manhattan
(New York, New York) or such other location as Xxxxxxxx may choose, at a lease
cost not to exceed six thousand ($6,000) dollars per month; and (ii) a full-time
secretary that is acceptable to Xxxxxxxx, and whose salary and benefits shall
not to exceed sixty thousand ($60,000) dollars a year.
6.9 Survival of Agreement Upon Termination. In the event that
Fiorillo's employment is terminated pursuant to any provision set forth in this
Section 6, the rights and obligations of the Parties which are set forth in
Sections 7 through 17 of this Agreement shall survive the employment termination
for a period from the date of such employment termination through the third
(3rd) anniversary of such date.
7 Confidential Information. Xxxxxxxx hereby agrees and acknowledges that
the following information and materials, whether in written, oral, magnetic,
photographic, optical or other form and whether now existing or developed or
created during the period of Fiorillo's employment or engagement with the
Company, excepting information obtained by Fiorillo from general or public
sources, are proprietary to the Company and are highly confidential in nature
(the "Confidential Information"):
7.1 Business Records, Marketing Plans and Customer Information. All
books, records, documents, memoranda and materials, and the information
contained therein directly relating to the business and finances of the Company
including, but not limited to: (i) marketing and development plans, forecasts,
forecast assumptions, forecast volumes, future plans and potential strategies of
the Company; (ii) cost objectives, pricing policies and procedures,
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quoting policies and procedures, and unpublished price lists; (iii) licensing
policies, strategies and techniques; (iv) customer lists, names of past, present
and prospective customers and their representatives; (v) data and other business
information about or provided by past, present and prospective customers; (vi)
names of past, present and prospective vendors and their representatives, data
and other Information about or provided by past, present and prospective
vendors; (vii) purchasing information, orders, invoices, xxxxxxxx, and payment
of xxxxxxxx; (viii) past, present and prospective licenses and licensees, the
terms and conditions of any licenses or prospective licenses, contracts or
prospective contracts; (ix) types of products, supplies, materials and services
purchased, leased, licensed and/or sold by the Company; (x) past, present and
future research and development arrangements; (xi) customer service information;
(xii) joint ventures, mergers and/or acquisitions; (xiii) the Company personnel
policies and procedures, the Company personnel files, and the compensation of
officers, directors and employees of the Company; and (xiv) all other
confidential business records and trade secrets of the Company.
7.2 Technology and Manufacturing Procedures. All books, records,
documents, memoranda and materials, and the information contained therein,
relating to the technology of the Company (whether or not patentable, whether or
not protected by copyright, whether developed by or for the Company) including,
but not limited to: (i) ideas and concepts for existing and new products,
processes and services; (ii) specifications for products, equipment and
processes, whether technical or financial; (iii) manufacturing and performance
specifications and procedures; (iv) engineering drawings, flow charts, and
graphs; (v) technical, research and engineering data; (vi) formulations,
materials, and material specifications; (vii) laboratory studies and benchmark
tests; (viii) laboratory notebooks; (ix) plant layout and equipment; (x)
manuals, including service manuals and operation manuals; (xi) quality assurance
policies, procedures and specifications; (xii) validation studies; and (xiii)
all other know-how, methodology, procedures, techniques and trade secrets
related to the research, engineering and development affairs of the Company.
7.3 Third Party Information. Any and all other information and
materials in the Company's possession or under its control from any other person
or entity which the Company is obligated to treat as confidential or proprietary
("Third Party Information").
7.4 Not Generally Known. Any and all Confidential Information not
generally known to the public or within the industries or trades in which the
Company competes.
8 General Skills and Knowledge. The general skills and experience gained
by Xxxxxxxx during Fiorillo's employment with the Company, and information
publicly available or generally known within the industries or trades in which
the Company competes, is not considered Confidential Information.
9 Fiorillo's Obligations as to Confidential Information and Materials.
During Fiorillo's employment by the Company, Xxxxxxxx will have access to
Confidential Information and will occupy a position of trust and confidence with
respect to the Company's affairs and business. Xxxxxxxx agrees to take the
following steps to preserve the confidential and proprietary nature of the
Confidential Information:
9.1 Non-Disclosure. During and for a period of three (3) years after
Fiorillo's employment with the Company, Xxxxxxxx will not use, disclose or
otherwise permit any person or entity access to any of the Confidential
Information other than as required in the performance of Fiorillo's duties with
the Company.
9.2 Prevent Disclosure. Xxxxxxxx will take all reasonable precautions
to prevent disclosure of the Confidential Information in accordance with the
Company's reasonable
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instructions to Xxxxxxxx.
9.3 Return all Materials. Upon termination of Fiorillo's employment
with the Company, for any reason whatsoever, Xxxxxxxx will deliver to the
Company all tangible materials embodying the Confidential Information,
including, without limitation, any documentation, records, listings, notes,
data, sketches, drawings, memoranda, models, accounts, reference materials,
samples, machine-readable media and equipment which in any way relate to the
Confidential Information.
10 Ideas and Inventions. Xxxxxxxx agrees that all right, title and
interest in or to any and all Inventions are the property of the Company. For
the purposes of this Agreement, "Inventions" shall mean all ideas, concepts,
know-how, techniques, processes, methods, inventions, discoveries, developments,
innovations and improvements (i) conceived or made by Xxxxxxxx, whether alone or
with others, in the course of Fiorillo's employment by the Company, or (ii)
conceived or made by Xxxxxxxx, whether alone or with others, in the course of
Fiorillo's employment, but which reach fruition within the period from the date
of termination of Fiorillo's employment through the second (2nd) anniversary of
such date, and which either (a) involve or are reasonably related to the
business of the Company or to the Company's actual or demonstrably anticipated
research or development; or (b) incorporate or are derived from, in whole or in
part, any of the Confidential Information. Xxxxxxxx agrees to promptly disclose
all Inventions to the Company, and to provide all assistance reasonably
requested by the Company in the preservation of its interests in the Inventions,
such as by executing documents, testifying, etc. Xxxxxxxx agrees to execute,
acknowledge and deliver any instruments confirming the complete ownership by the
Company of such Inventions. Such assistance shall be provided at the Company's
expense without any additional compensation to Xxxxxxxx.
11 Post-Employment Procedures. Xxxxxxxx agrees that, upon the termination
of his employment with the Company, he will (i) participate in good faith in the
Company's exit interview process; and (ii) enter into an appropriate Employment
Termination Agreement, in which, among other things, Xxxxxxxx will represent to
the Company that he has fully complied with the terms of this Agreement and that
he will fulfill the then-executory obligations contained in this Agreement.
12 Copyrights. Xxxxxxxx agrees that any work prepared for the Company
which is protected under United States Copyright laws or under the universal
Copyright Convention, the Berne Copyright convention and/or the Buenos Aires
Copyright Convention shall be a work made for hire and ownership of all
copyrights (including all renewals and extensions) therein shall vest in the
Company. In the event any such work is deemed not to be a work made for hire for
any reason, Xxxxxxxx hereby grants, transfers and assigns all right, title and
interest in such work and all copyrights in such work and all renewals and
extensions thereof to the Company, and agrees to provide all assistance
reasonably requested by the Company in the establishment, preservation and
enforcement of its copyright in such work, such assistance to be provided at the
Company's expense but without any additional compensation to Xxxxxxxx. Xxxxxxxx
hereby agrees to and does hereby waive all moral rights with respect to the work
developed or produced hereunder, including, without limitation any and all
rights of identification of authorship and any and all rights of approval,
restriction, or limitation on use or subsequent modifications.
13 Conflicting Obligations and Rights. Before (i) performing any
obligations Xxxxxxxx may have to preserve the confidentiality of another's
proprietary information or materials, or (ii) exercising any rights Xxxxxxxx may
claim to any patent or copyrights trade secrets, or other discoveries,
inventions, ideas, know-how, techniques methods, processes or other proprietary
information or materials before performing that work, Xxxxxxxx shall inform the
Company in writing of any apparent conflict between Fiorillo's work for the
Company and such other obligations
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and/or rights. In the absence of such written notice, the Company may conclude
that no such conflict exists and Xxxxxxxx agrees thereafter to make no such
claim against the Company. The Company shall hold such disclosures by Xxxxxxxx
in strict confidence.
14 Restrictive Covenants.
14.1 Xxxxxxxx acknowledges that (i) the Company's business is all
aspects of business-to-business electronic commerce, but not limited to,
building, owning and operating electronic commerce networks; and providing
systems integration and consulting services relating thereto, and that (ii)
fulfillment of the obligations hereunder will result in Xxxxxxxx becoming
familiar with the business affairs of the Company and any present or future
parent, subsidiary and/or affiliate.
14.2 Covenant Not to Compete. In consideration for the Compensation,
and as a condition to the performance by the Company of all obligations under
this Agreement, Xxxxxxxx agrees that during the Initial Employment Term or any
Succeeding Employment Terms of this Agreement and for the period from the date
of termination of Fiorillo's employment pursuant to either Section 6.1 or 6.3
hereof through the second (2nd) anniversary of such date, Xxxxxxxx shall not
directly or indirectly through any other person, firm or corporation compete
with or be engaged in the same business or "participate in" any other business
or organization which during such period competes with or is engaged in the same
business as the Company. The term "participate in" shall mean: "directly or
indirectly, for his own benefit or for, with, or through any other person, firm,
or corporation, own, manage, operate, control, loan money to, or participate in
the ownership, management, operation, or control of, or be connected as a
director, officer, employee, partner, consultant, agent, independent contractor,
or otherwise with, or acquiesce in the use of his name." Notwithstanding the
foregoing, it shall not be a breach of the provisions of this Section 14 if,
after the term of this Agreement, Xxxxxxxx is a passive investor in any publicly
held entity and Xxxxxxxx owns three (3%) percent or less of the equity interests
therein.
14.3 Restrictive Covenants Necessary and Reasonable. Xxxxxxxx agrees
that the provisions of this Section 14 are necessary and reasonable to protect
the Company in the conduct of its business. If any restriction contained in this
Section 14 shall be deemed to be invalid, illegal, or unenforceable by reason of
the extent, duration or geographical scope thereof, or otherwise, then the court
making such determination shall have the right to reduce such extent, duration,
geographical scope, or other provisions hereof and in its reduced form such
restriction shall then be enforceable in the manner contemplated hereby.
15 Injunctive Relief. Xxxxxxxx, recognizing that irreparable injury shall
result to the Company in the event of Fiorillo's breach of the terms and
conditions of this Agreement, agrees that in the event of his breach or
threatened breach, the Company shall be entitled to injunctive relief
restraining Xxxxxxxx, and any and all persons or entities acting for or with
him, from such breach or threatened breach. Nothing herein contained, however,
shall be construed as prohibiting the Company from pursuing any other remedies
available to it by reason of such breach or threatened breach.
16 Indemnification.
16.1 To the full extent allowed by law, the Company shall hold harmless
and indemnify Xxxxxxxx, his executors, administrators or assigns, against any
and all judgments, penalties (including excise and similar taxes), fines,
settlements and reasonable expenses (including attorneys' fees) actually
incurred by Xxxxxxxx (net of any related insurance proceeds or other amounts
received by Xxxxxxxx or paid by or on behalf of the Company on Fiorillo's behalf
in compensation of such judgments, penalties, fines, settlements or expenses) in
connection with
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any threatened, actual or completed action, suit or proceeding, whether civil,
criminal, arbitral, administrative or investigative, or any appeal in such
action, suit or proceeding, to which Xxxxxxxx was, is or is threatened to be
made a named defendant or respondent (a "Proceeding"), because Xxxxxxxx is or
was a director or officer of the Company, or was serving at the request of the
Company as a director, officer, partner, venturer, proprietor, trustee,
employee, agent or similar functionary (an "Affiliate Executive") of another
corporation, partnership, joint venture, sole proprietorship, trust, employee
benefit plan or other enterprise (each, a "Company Affiliate"). Upon
authorization of indemnification of Xxxxxxxx by the Board in accordance with the
applicable provisions of the Delaware General Corporation Law (the "DGCL"),
Xxxxxxxx shall be presumed to be entitled to such indemnification under this
Agreement upon submission of a Claim (as hereinafter defined). Thereafter, the
Company shall have the burden of proof to overcome the presumption that Xxxxxxxx
is so entitled. Such presumption shall only be overcome by a judgment or other
final adjudication, after all appeals and all time for appeals have expired
("Final Determination"), adverse to Xxxxxxxx establishing that such
indemnification is not permitted hereunder or by law. An actual determination by
the Company (including its Board, legal counsel, or its stockholders) that
Xxxxxxxx has not met the applicable standard of conduct for indemnification
shall not be a defense to the action or create a presumption that Xxxxxxxx has
not met the applicable standard of conduct. The purchase, establishment or
maintenance of any Indemnification Arrangement shall not in any way diminish,
restrict, limit or affect the rights and obligations of the Company or of
Xxxxxxxx under this Agreement except as expressly provided herein, and the
execution and delivery of this Agreement by the Company and Xxxxxxxx shall not
in any way diminish, restrict, limit or affect Fiorillo's right to
indemnification from the Company or any other Party or Parties under any other
indemnification arrangement, the Certificate of Incorporation or Bylaws of the
Company, or the DGCL.
16.2 Subject only to the provisions of this Section 16.2, as long as
Xxxxxxxx shall continue to serve as a director and/or officer of the Company (or
shall continue at the request of the Company to serve as an Affiliate Executive)
and, thereafter, as long as Xxxxxxxx shall be subject to any possible Proceeding
by reason of the fact that Xxxxxxxx was or is a director and/or officer of the
Company (or served in any of said other capacities), the Company shall, unless
no such policies are available in any market, purchase and maintain in effect
for the benefit of Xxxxxxxx one or more valid, binding and enforceable policies
(the "Insurance Policies") of directors' and officers' liability insurance ("D&O
Insurance") providing adequate liability coverage for Fiorillo's acts as a
director and/or officer of the Company or as an Affiliate Executive. The Company
may promptly notify Xxxxxxxx of any lapse, amendment or failure to renew said
policy or policies or any provision thereof relating to the extent or nature of
coverage provided thereunder. In the event the Company does not purchase and
maintain in effect said policy or policies of D&O Insurance pursuant to the
provisions of this Section 16.2, the Company shall, to the full extent permitted
by law, in addition to and not in limitation of the other rights granted
Xxxxxxxx under this Agreement, hold harmless and indemnify Xxxxxxxx to the full
extent of coverage which would otherwise have been provided for the benefit of
Xxxxxxxx pursuant to the Insurance Policies.
16.3 Xxxxxxxx shall have the right to receive from the Company on
demand, or at his Option to have the Company pay promptly on his behalf, in
advance of a Final Determination of a Proceeding all expenses payable by the
Company pursuant to the terms of this Agreement as corresponding amounts are
expended or incurred by Xxxxxxxx in connection with such Proceeding or otherwise
expended or incurred by Xxxxxxxx (such amounts so expended or incurred being
referred to as "Advanced Amounts"). In making any claim for payment by the
Company of any expenses, including any Advanced Amount, pursuant to this
Agreement, Xxxxxxxx shall submit to the Company a written request for payment (a
"Claim"), which includes a schedule setting forth
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in reasonable detail the dollar amount expended (or incurred or expected to be
expended or incurred). Each item on such schedule shall be supported by the
xxxx, agreement or other documentation relating thereto, a copy of which shall
be appended to the schedule as an exhibit. Where Xxxxxxxx is requesting Advanced
Amounts, Xxxxxxxx must also provide (i) written affirmation of such Fiorillo's
good faith belief that he has met the standard of conduct required by law for
indemnification, and (ii) a written undertaking to repay such Advanced Amounts
if a Final Determination is made that Xxxxxxxx is not entitled to
indemnification hereunder.
16.4 The Company shall not be liable under this Agreement to make any
payment in connection with any claim made against Xxxxxxxx for an accounting of
profits made from the purchase or sale by Xxxxxxxx of securities of the Company
within the meaning of Section 16(b) of the Exchange Act or similar provisions of
any state statutory law or common law.
16.5 All agreements and obligations of the Company contained herein
shall continue during the period Xxxxxxxx is a director and/or officer of the
Company (or is serving at the request of the Company as an Affiliate Executive)
and shall continue thereafter so long as Xxxxxxxx shall be subject to any
possible Proceeding by reason of the fact that Xxxxxxxx was a director or
officer of the Company or was serving as such an Affiliate Executive.
16.6 Promptly after receipt by Xxxxxxxx of notice of the commencement
of any Proceeding, Xxxxxxxx shall, if a claim in respect thereof is to be made
against the Company under this Agreement, notify the Company of the commencement
thereof, but failure to so notify the Company will not relieve the Company from
any liability which it may have to Xxxxxxxx. With respect to any such
Proceeding: (i) the Company shall be entitled to participate therein at its own
expense; (ii) except with prior written consent of Xxxxxxxx, the Company shall
not be entitled to assume the defense of any Proceeding; and (iii) the Company
shall not settle any Proceeding in any manner which would impose any penalty or
limitation on Xxxxxxxx without Fiorillo's prior written consent.
17 Dispute Resolution. The Company and Xxxxxxxx agree that any dispute or
controversy arising between any of the Parties to this Agreement, or any person
or entity in privity therewith, out of the transactions effected and
relationships created in connection herewith, including any dispute or
controversy involving the formation, terms or construction of this Agreement,
regardless of kind or character, will be resolved through binding arbitration
held in New York, NY. The only disputes not subject to mandatory, binding
arbitration are requests for injunctive relief. With respect to the arbitration
of any dispute or controversy, each Party understands that: (i) arbitration is
final and binding on the Parties; (ii) each Party is waiving its right to seek
certain remedies in court, including to right to a jury trial; (iii) discovery
in arbitration is different and more limited than discovery in litigation; and
(iv) an arbitrators' award need not include factual findings or legal reasoning,
and any Party's right to appeal or to seek modification of a ruling by the
arbitrator is strictly limited.
17.1 Each Party to this Agreement will submit any dispute or
controversy to arbitration before the American Arbitration Association ("AAA")
within five (5) days after receiving a written request to do so from the other
Party. If any Party fails to submit a dispute or controversy to arbitration as
requested, then the requesting Party may commence the arbitration proceeding.
The Federal Arbitration Act will govern the proceeding and all issues raised by
this Agreement to be arbitrated. Each Party to this Agreement will be bound by
the determination of an arbitration panel of three members empaneled by the AAA
to adjudicate the dispute. Judgment on any arbitration award may be entered in
any court of competent jurisdiction.
17.2 Any Party to this Agreement may bring an action including a
summary or expedited proceeding of any such dispute or controversy in a court of
competent jurisdiction
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and, further, may seek provision or ancillary remedies, including temporary or
injunctive relief in connection with such dispute or controversy in a court of
competent jurisdiction, provided that the dispute or controversy is ultimately
resolved through binding arbitration conducted in accordance with the terms and
conditions of Section 17. If any Party institutes legal proceedings in an effort
to resist arbitration and is unsuccessful in doing so, the prevailing Party is
entitled to recover, from the losing Party, its legal fees and out-of-pocket
expenses incurred in connection with the defense of such legal proceedings.
18 Miscellaneous.
18.1 Notices. Any and all notices, demands, requests or other
communication required or permitted by this Agreement or by law to be served on,
given to, or delivered to any Party hereto by any other Party to this Agreement
shall be in writing and shall be deemed duly served, given, or delivered when
personally delivered to the Party to be notified, or in lieu of such personal
delivery, when deposited in the United States mail, registered or certified
mail, return receipt requested, or when confirmed as received if delivered by
overnight courier, addressed to the to the Party to be notified, at the address
of the Company at its principal office, as first set forth above, or to Xxxxxxxx
at the address as first set forth above. The Company or Xxxxxxxx may change the
address in the manner required by law for purposes of this paragraph by giving
notice of the change, in the manner required by this paragraph, to the
respective Parties.
18.2 Amendment. This Agreement may not be modified, changed, amended,
or altered except in writing signed by Xxxxxxxx or his duly authorized
representative, and by a member of the Board.
18.3 Governing Law. This Agreement shall be interpreted in accordance
with the laws of the State of New York. It shall inure to the benefit of and be
binding upon the Company, and its successors and assigns.
18.4 Attorney's Fees. Should any litigation or arbitration be commenced
between the Parties to this Agreement concerning any provision of this
Agreement, the expense of all attorneys' fees and other costs incurred in
connection therewith shall be paid by the losing Party.
18.5 Severability. Should any provision or portion of this Agreement be
held unenforceable or invalid for any reason, the remaining provisions and
portions of this Agreement shall be unaffected by such holding.
18.6 Entire Agreement. This Agreement constitutes the sole and only
agreement of the Parties hereto respecting the subject matter hereof. Any prior
agreements, promises, negotiations, or representations concerning its subject
matter not expressly set forth in this Agreement, are of no force and effect.
18.7 Counterparts. This Agreement and any certificates made pursuant
hereto, may be executed in any number of counterparts and when so executed all
of such counterparts shall constitute a single instrument binding upon all
Parties hereto notwithstanding the fact that all Parties are not signatory to
the original or to the same counterpart.
18.8 Section Headings. The Article and Section headings used in this
Agreement are for reference purposes only, and should not be used in construing
this Agreement.
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the
day and year set forth below.
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eB2B COMMERCE, INC
By: By:
--------------------------------- -------------------------
Xxxxx Xxxxxxxx
Date: Date:
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