EMPLOYMENT
AGREEMENT
THIS EMPLOYMENT AGREEMENT
(this “
Agreement
”) is made,
entered into and effective as of this 24
th
day of
December (the “
Effective Date
”) by
and between
CommerceTel
Corporation
, a Nevada corporation (the “
Company
”), and
Dennis
Becker
, an individual resident of the State of California (“
Employee
”).
WHEREAS
, the Company and
Employee desire to set forth in a written agreement the terms and conditions
pursuant to which Employee shall be employed by the Company; and
WHEREAS
, the parties intend to
supersede all prior oral and written communications, correspondence, letters and
negotiations between them with the terms set forth herein with regard to the
terms of Employee’s employment.
NOW, THEREFORE
, in
consideration of the foregoing and the respective representations, warranties,
covenants, agreements and conditions set forth herein, and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and intending to be legally bound hereby, each party hereby agrees
as follows:
1.
Definitions
. For
purposes of this Agreement, the following capitalized terms shall have the
definitions set forth below. Other capitalized terms used in this
Agreement that are not defined in this
Section 1
shall have the definitions given to them in this Agreement.
(a) “
Board
” means the
Board of Directors of the Company, including any authorized committee(s)
thereof.
(b) “
Cause
”
means:
(i)
commission by Employee of a felony;
(ii) Employee’s
insobriety, use of illegal drugs, abuse of prescription drugs or abuse of
alcohol;
(iii) Employee’s
engaging in fraud, misappropriation, embezzlement, deceit or other unlawful act
or similar acts involving dishonesty or moral turpitude on the part of
Employee;
(iv) Employee’s
insubordination, commission of an act of dishonesty, gross negligence, self
dealing, willful misconduct, deceit or other unlawful act in connection with the
performance of Employee’s duties hereunder, including without limitation,
misappropriation of funds or property of the Company, securing or attempting to
secure personally any profit in connection with any transaction entered into on
behalf of the Company;
(v) Employee’s
willful act or gross negligence having the effect of injuring the reputation,
business or business relationships of the Company and its subsidiaries or
affiliates;
(vi) Employee’s
disregard of (A) any provision of any policy, work rule, procedure or standard
of the Company; or (B) any directive of the Company or the Board;
(vii) Employee’s
violation of any fiduciary obligation to the Company;
(viii) Employee’s
violation of any provision of the policies, work rules, procedures or standards
of the Company;
(ix) Employee’s
failure to perform his duties under this Agreement; or
(x) Employee’s
violation of any covenant or obligation under this Agreement or any other
agreement with the Company.
With
respect to subparts (vi) through (x) only (but not with respect to subparts (i)
through (v)), if the Company believes that Employee has engaged in conduct that
would support a termination for Cause, the Company shall provide Employee
written notice of such act or failure to act, and Employee shall have ten (10)
days following receipt of such notice by the Company to cure such act or failure
to act, and if Employee cures such act or failure to act within such ten (10)
day period, such act or failure to act shall not be considered Cause under this
Agreement. Notwithstanding the foregoing sentence, if Employee’s act
or failure to act is of a type or severity that by its nature cannot be cured,
then the Company shall have the right to proceed immediately toward termination,
notwithstanding the cure procedures described.
(c) “
Confidential
Information
” means any data or information concerning the Company, its
parents, subsidiaries and affiliates, or the operations of the Company or its
parents, subsidiaries and affiliates, other than Trade Secrets, without regard
to form, that is valuable to the Company or its parents, subsidiaries or
affiliates and is not generally known by the public or competitors of the
Company or its parents, subsidiaries or affiliates. To the extent
consistent with the foregoing, Confidential Information includes, but is not
limited to, information about the business practices, customers of the Company,
its parents, subsidiaries and affiliates (including, without limitation, mailing
lists and customer lists and records), lists of the current or potential
customers, vendors and suppliers, lists of and other information about the
executives and employees, financial information, business strategies, business
methods, product information, contracts and contractual arrangements, marketing
plans, the type and volume of the business of the Company, its parents,
subsidiaries and affiliates, personnel information, information about the
Company’s vendors, suppliers and strategic partners, price lists, pricing
policies, pricing information, business methods, research and development
techniques and activities of the Company, its parents, subsidiaries and
affiliates, and all information located in the books and records of the Company,
its parents, subsidiaries and affiliates. Confidential Information
also includes any information or data described above which the Company or any
parent, subsidiary or affiliate of the Company obtains from another party and
which the Company or such parent, subsidiary or affiliate treats as proprietary
or designates as confidential information whether or not owned or developed by
the Company or such parent, subsidiary or affiliate.
(d) “
Disability
” means
that Employee qualifies for benefits under the long-term disability plan or
policy maintained by the Company, or, in the absence of such a plan or policy, a
physical or mental impairment that renders Employee substantially incapable of
performing the essential functions of his job as determined by the Company, with
or without reasonable accommodations as contemplated by Americans with
Disabilities Act.
(e) “
Free Cash Flow
” means
operating cash flows (net income plus amortization and depreciation) minus
capital expenditures and dividends.
(f) “
Good Reason
” means
(i) a reduction by the Company of Employee’s salary, benefits or any other
form of remuneration or perquisites,
provided
such
reduction is not applied to all similarly situated employees in the same
fashion; or (ii) any breach by the Company of any material provision of this
Agreement after written notice by Employee thereof, and such breach remaining
uncured following an opportunity for Company to cure same within thirty (30)
days of the receipt of such notice.
(g) “
Sale Transaction
”
means any transaction or series of related transactions involving (i) an
acquisition (whether of stock, equity securities or assets), merger,
consolidation, reorganization or business combination pursuant to which the
business of the Company is combined with another unaffiliated third party; (ii)
the purchase of all or substantially all of the business of another unaffiliated
third party or parties (whether by way of merger, consolidation, reorganization
or sale of all or substantially all assets or securities); or (iii) the
formation of a joint venture or partnership by or with the Company for the
purpose of effecting a transfer of control of, or a material interest in, the
Company, or any such purchases by a person or entity that has such an
effect.
(h) “
Territory
” means the
United States of America. The parties acknowledge and agree that the
foregoing description of the Territory is reasonable and embodies locations
where the Company currently conducts its business and operations or reasonably
expects to conduct the business in accordance with the Company’s business
plan.
(i) “
Trade Secret
” means
information of the Company or its parents, subsidiaries or affiliates, without
regard to form, including, but not limited to, technical or nontechnical data, a
formula, a pattern, a compilation, a program, a device, a method, a technique, a
drawing, a design, a process, financial data, financial plans, product plans,
technology plans, marketing plans, acquisition strategies, strategic plans, or a
list of actual or potential customers or suppliers which is not commonly known
by or available to the public and which information: (i) derives economic value,
actual or potential, from not being generally known to, and not being readily
ascertainable by proper means by, other persons who can obtain economic value
from its disclosure or use; and (ii) is the subject of efforts that are
reasonable under the circumstances to maintain its secrecy. Trade Secrets also
includes any information or data described above which the Company or any
parent, subsidiary or affiliate of the Company obtains from another party and
which the Company treats as proprietary or designates as trade secrets, whether
or not owned or developed by the Company or such parent, subsidiary or affiliate
of the Company.
(j) “
Work Product
” means
all discoveries, designs, artwork, Trade Secrets, Confidential Information,
trademarks, data, analyses, materials, formulas, strategic plans, acquisition
strategies, research, documentation, computer programs, information technology
systems, communication systems, audio systems, manufacturing systems, system
designs, inventions (whether or not patentable), copyrightable subject matter,
works of authorship, and other proprietary information or work product
(including all worldwide rights therein under patent, copyright, trademark,
trade secret, confidential information, moral rights and other property rights),
which Employee has made or conceived, or may make or conceive, either solely or
jointly with others, while providing services to the Company or its subsidiaries
or with the use of the time, material or facilities of the Company or its
subsidiaries or relating to any actual or anticipated business of the Company or
its subsidiaries known to Employee while employed at the Company, or suggested
by or resulting from any task assigned to Employee or work performed by Employee
for or on behalf of the Company.
2.
Employment,
Duties and Term
.
(a) Subject
to the terms hereof, the Company hereby employs Employee as President and Chief
Executive Officer, and Employee accepts such employment with the Company on the
terms set forth in this Agreement. In such capacity, Employee shall
perform the duties appropriate to such office or position, and such other duties
and responsibilities commensurate with such position as are assigned to him from
time to time by the Board or its designees.
(b) Employee
shall devote his full working time and best efforts to the performance of his
duties under this Agreement for and on behalf of the Company and shall not work
for anyone else or engage in any activity in competition with or detrimental to
the Company. Notwithstanding the foregoing, Employee shall be
permitted to serve on corporate, civic or charitable boards or committees, so
long as the Board consents in advance in writing to such activities, and such
activities do not materially interfere with the performance of his
responsibilities as an employee of the Company in accordance with this
Agreement.
(c) Unless
earlier terminated as provided herein, Employee’s employment under this
Agreement shall be for an initial term commencing on the Effective Date and
ending on the third (3
rd
)
anniversary of the Effective Date (the “
Initial
Term
”). Unless earlier terminated as set forth herein, at the
conclusion of the Initial Term, this Agreement shall automatically renew for
additional one-year renewal terms (each a “
Renewal Term
”),
unless either Employee or the Company notifies the other in writing of its
desire not to renew this Agreement at least ninety (90) days prior to the
conclusion of the Initial Term or any subsequent Renewal Term. The
date on which this Agreement is terminated or expires as provided herein is
herein called the “
Termination Date
,”
and the period from the Effective Date through the Termination Date is herein
called the “
Term
.”
3.
Compensation
.
(a)
Base
Salary
. In consideration of the services rendered by Employee,
and subject to the terms and conditions hereof, the Company shall pay Employee
during the Term an annual base salary of at least $120,000 (the “
Base
Salary
”). The Base Salary shall be subject to increase, if at
all, based on an annual salary review by the Board, on or before each
anniversary of the Effective Date. The Base Salary shall be payable
in accordance with the Company’s payroll practices as in effect from time to
time. In addition to the foregoing annual adjustment, if any, of the
Base Salary as determined by the Board, the Base Salary shall be subject to
adjustment as follows:
(i)
The Base Salary shall be increased to $150,000 in the event that the
Company consummates one (1) Sale Transaction,
provided
that (A)
such Sale Transaction has been approved by the Board and (B) the Free Cash Flow
Target (as defined below) has been met; and
(ii) The
Base Salary shall be increased to $180,000 in the event that the Company
consummates a second (2
nd
) Sale
Transaction,
provided
that (A)
such Sale Transaction has been approved by the Board and (B) the Free Cash Flow
Target (as defined below) has been met.
(iii) The
Base Salary shall be increased to $225,000 in the event that the Company
completes a financing of at least $3,000,000 and the Company has completed at
least one Sale Transaction.
For
purposes of
Sections
3(a)(i)
and
3(a)(ii)
,
whether the Free Cash Flow Target has been met shall be determined by the Board
as follows: upon the date that is six (6) months following the
consummation of the Sale Transaction, the Board shall calculate the Free Cash
Flow of the business acquired in the Sale Transaction for the three (3) month
period immediately preceding such date (the “
Measurement
Period
”). For purposes of this
Section
3(a)
, the “
Free
Cash Flow Target
” means that the business acquired in the Sale
Transaction has earned an amount of Free Cash Flow equal to or greater than
$25,000 during the Measurement Period.
(b)
Bonus
. In
addition to the Base Salary, the Board may award Employee an annual bonus of up
to 50% of the Base Salary for achieving milestones as defined by the Board from
time to time.
(c)
Vacation
. Employee
shall receive vacation in accordance with the policies of the Company;
provided
,
however
, that
Employee shall be given at a minimum four (4) weeks of vacation per calendar
year (and pro-rated for any partial calendar year). Beginning in the
calender year 2011, at the completion of each calendar year, the Company shall
pay Employee a cash lump sum payment for any unused vacation time from the
recently completed calendar year. Any unused vacation may not be carried forward
to a subsequent year.
(d)
Benefits
. During
the Term, Employee shall be entitled to participate in any other employee
benefit plans generally provided by the Company to its full-time employees from
time to time, but only to the extent provided in such employee benefit plans and
for so long as the Company provides or offers such benefit plans. The
Company reserves the right to modify, amend or terminate such benefit plans at
any time without prior notice.
(e)
Expense
Reimbursement
. During the Term, Employee shall be entitled to
be reimbursed in accordance with the policies of the Company, as adopted from
time to time, for all reasonable and necessary expenses incurred by Employee in
connection with the performance of Employee’s duties of employment
hereunder. Unless the expense policies provide otherwise, Employee
shall submit written requests for payment accompanied with such evidence of fees
and expenses incurred as the Company reasonably may require no later than thirty
(30) days following the end of the calendar year in which such fees and expenses
are incurred, and reimbursement payments shall be made within thirty (30) days
after the Company’s receipt of Employee’s written request.
(f)
Stock
Options
. Employee shall be granted stock options pursuant to
the terms and conditions of the Company’s incentive stock option plan, if and
when adopted by the Board. Awards thereunder shall be made to
Employee from time to time at the discretion of the Board.
4.
Termination
.
(a) This
Agreement may be terminated during the Term as follows:
(i)
by mutual agreement of the Company and
Employee;
(ii) by
the Company, immediately, without any advance notice from the Company, for
Cause;
(iii) by
the Company, upon the death or Disability of Employee;
(iv)
by the Company, upon thirty (30) days prior written notice,
without Cause;
(v) by
Employee, upon ninety (90) days prior written notice, without Good Reason;
or
(vi) by
Employee, immediately, without any advance notice from Employee, for Good
Reason.
(b) Upon
Employee’s separation from service following the termination or expiration of
this Agreement, the Company shall pay to Employee the following: (i)
all Base Salary earned or accrued through the Termination Date; (ii) all accrued
and unused vacation time for the calendar year in which the Termination Date
occurs; and (iii) reimbursement for any expenses under
Section
3(d)
that were incurred by Employee prior to the Termination
Date.
(c) If
this Agreement is terminated pursuant to
Section
4(a)(ii)
(by the Company for Cause), pursuant to
Section 4(a)(iii)
(death or Disability of Employee), pursuant to
Section
4(a)(v)
(by Employee without Good Reason), or due to Employee providing
notice to the Company that Employee is not renewing this Agreement pursuant to
the provisions of
Section
2(c)
, then Employee shall only be entitled to receive those payments set
forth in
Section 4(b)
,
and Employee shall not be entitled to any further payments
whatsoever.
(d) If
this Agreement is terminated pursuant to
Section
4(a)(i)
(mutual agreement), pursuant to
Section
4(a)(iv)
(by the Company without Cause), pursuant to
Section 4(a)(vi)
(by Employee with Good Reason) or due to the Company providing notice to
Employee that the Company is not renewing this Agreement pursuant to the
provisions of
Section
2(c)
, then, in addition to the payments set forth in
Section
4(b)
above, the Company shall pay Employee six (6) months of Base Salary,
at the rate in effect as of the Termination Date, which payments shall commence
within thirty (30) days following Employee’s separation from service, payable as
described in
Section
4(e)
, and which shall be made in accordance with the regular payroll
practices of the Company (the “
Separation
Payments
”). Additionally, the Employee’s stock options shall continue to
vest for six (6) months following the date of termination and the Employee’s
option to exercise such options shall be extended per the period defined in the
Company’s Employee Stock Option Plan from the six (6) month anniversary of the
Termination Date.
(e) To
receive the Separation Payments described in
Section
4(d)
, Employee must execute, not later than ten (10) days following
Employee’s separation from service a release of claims against the Company, its
affiliates and their respective managers, directors, officers and equity
holders, in the form and substance of
Exhibit
A
, and Employee must not have thereafter revoked such
release. If Employee has not executed the release of claims in favor
of the Company and returned it to the Company by the date the payment described
in
Section
4(d)
becomes due or if Employee revokes an executed release, Employee
shall forfeit all rights to such payment under this Agreement.
(f) “
Separation from
service
” as used in this
Section
4
to determine the date of any payment, shall mean the date of Employee’s
“separation from service” as defined by Section 409A of the Internal Code
Revenue Code of 1986, as amended, and the Treasury regulations and formal
guidance issued thereunder.
5.
Confidential
Relationship and Protection of Trade Secrets and Confidential
Information
. In the course of Employee’s employment by the
Company, Employee has had access to and shall have access to the Company’s most
sensitive and most valuable Trade Secrets, proprietary information, and
Confidential Information concerning the Company and its subsidiaries, their
present and future business plans, development projects, artwork, designs,
products, formulas, suppliers, customers, acquisition strategies and business
affairs which constitute valuable business assets of the Company and its
subsidiaries, the use, application or disclosure of any of which shall cause
substantial and possible irreparable damage to the business and asset value of
the Company. Accordingly, Employee accepts and agrees to be bound by
the following provisions:
(a) At
any time, upon the request of the Company and in any event upon any termination
or expiration of this Agreement, Employee shall deliver to the Company all
analyses, strategies, plans, acquisition strategies, artwork, technology plans,
memoranda, notes, records, drawings, manuals, files or other documents, and all
copies of each, concerning or constituting Confidential Information or Trade
Secrets and any other property or files belonging to the Company or any of its
subsidiaries that are in the possession of Employee, whether made or compiled by
Employee or furnished to or acquired by Employee from the Company.
(b) To
protect the Trade Secrets and Confidential Information, Employee agrees
that:
(i) Employee
shall hold in confidence the Trade Secrets. Except in the performance
of services for the Company, Employee shall not at any time use, disclose,
reproduce, distribute, transmit, reverse engineer, decompile, disassemble, or
transfer the Trade Secrets or any portion thereof.
(ii) Employee
shall hold in confidence the Confidential Information. Except in the
performance of services for the Company, Employee shall not, at any time during
the Term of this Agreement and for two (2) years thereafter, use, disclose,
reproduce, distribute, transmit, reverse engineer, decompile, disassemble, or
transfer the Confidential Information or any portion thereof.
6.
Restrictive
Covenants
. For purposes of this
Section
6
, the “
Company
” shall
include the Company and its parents and subsidiaries.
(a)
Restricted
Period
. For purposes hereof, if this Agreement is terminated
pursuant to
Section
4(a)(ii)
(by the Company for Cause), pursuant to
Section
4(a)(v)
(by Employee without Good Reason), or due to Employee providing
notice to the Company that Employee is not renewing this Agreement pursuant to
the provisions of
Section
2(c)
, then the “
Restricted Period
”
shall last until the two (2) year anniversary of the Termination
Date. If this Agreement is terminated pursuant to
Section
4(a)(i)
(mutual agreement), pursuant to
Section 4(a)(iv)
(by the Company without Cause), pursuant to
Section
4(a)(vi)
(by Employee with Good Reason), or due to the Company providing
notice to Employee that the Company is not renewing this Agreement pursuant to
the provisions of
Section
2(c)
, then the “
Restricted Period
”
shall last until the date that is one week after the date of the last Separation
Payment paid by the Company.
(b)
Non-Solicitation
. Employee
agrees that during the Term of this Agreement and in the event of any
termination or expiration of this Agreement, until the expiration of the
Restricted Period, Employee shall not, anywhere within the Territory, without
the prior written consent of the Company, either directly or indirectly, on his
own behalf or in the service of or on behalf of others, (i) solicit, contact,
call upon, communicate with or attempt to communicate with any supplier of goods
or services to the Company, any customer of the Company or prospective customer
of the Company, or any representative of any customer or prospective customer of
the Company with a view to selling or providing any product, deliverable or
service competitive or potentially competitive with any product, deliverable or
service sold or provided or under development by the Company during the period
of two (2) years immediately preceding the Termination Date (
provided
that the
foregoing restrictions shall apply only to customers or prospective customers of
the Company, or representatives of customers or prospective customers of the
Company with which Employee had material contact during the two (2) year period
immediately preceding the Termination Date); (ii) solicit, induce or encourage
any supplier of the Company to terminate or modify any business relationship
with the Company; or (iii) otherwise take any action which may reasonably
be anticipated to interfere with or disrupt any past, present or prospective
business relationship, contractual or otherwise, between the Company and any
customer, supplier or agent of the Company. The actions prohibited by
this
Section 6(b)
shall not be engaged in by Employee directly or indirectly, whether as employee,
independent contractor, manager, salesperson, agent, technical support
technician, sales or service representative, or otherwise.
(c)
Non-Recruitment
. During
the Term of this Agreement, and in the event of any termination or expiration of
this Agreement until the expiration of the Restricted Period, Employee shall
not, without the prior written consent of the Company, either directly or
indirectly, on his own behalf or in the service of or on behalf of others,
solicit or attempt to solicit for employment any person employed by the Company
in the Territory, whether or not such person is a full-time employee or a
temporary employee of the Company, and whether or not such employment is
pursuant to a written agreement or independent contractor agreement and whether
or not such employment is for a determined period or is at will.
(d)
Non-Disparagement
. Employee
covenants and agrees not to make any statements of any kind, oral or written,
that are derogatory or disparaging toward the Company or the management,
products, employees, customers or services of the Company;
provided
,
however
, that nothing
contained herein shall limit Employee’s obligation to give truthful testimony to
a court or governmental agency, when required to do so by subpoena, court order,
law or administrative regulation.
(e)
Reasonableness
. Employee
acknowledges and agrees that the covenants contained in this
Section 6
(“
Restrictive
Covenants
”) are reasonable and valid in all respects. Further,
if any Restrictive Covenants, or portion thereof, are declared to be invalid or
unenforceable, Employee shall, as soon as possible, execute a supplemental
agreement with the Company granting to the Company, to the extent legally
permissible, the protection intended to be afforded to the Company by the
Restrictive Covenants, or portion thereof, so declared invalid or
unenforceable.
(f)
Tolling
. Employee
agrees that in the event the enforceability of any of the terms of this
Section
6
shall be challenged in court and Employee is not enjoined from
breaching the Restrictive Covenants set forth in this
Section 6
,
then if a court of competent jurisdiction finds that the challenged covenants
are enforceable, the time period restrictions specified in this
Section 6
shall be deemed tolled upon the filing of the lawsuit involving the
enforceability of this
Section 6
until the dispute is finally resolved and all periods of appeal have
expired.
7.
Work
Product
. All Work Product shall be the exclusive property of
the Company. If any of the Work Product may not, by operation of law
or otherwise, be considered the exclusive property of the Company, or if
ownership of all right, title, and interest to the legal rights therein shall
not otherwise vest exclusively in the Company, Employee hereby assigns to the
Company, and upon the future creation thereof automatically assigns to the
Company, without further consideration, the ownership of all Work
Product. The Company shall have the right to obtain and hold in its
own name copyrights, patents, registrations, and any other protection available
in the Work Product. Employee shall promptly disclose any and all
such Work Product to the Company. Employee agrees to perform, during
or after termination of Employee’s employment by the Company, and without
requiring the Company to provide any further consideration therefore, such
further acts as may be necessary or desirable to transfer, perfect and defend
the Company’s ownership of the Work Product as requested by the
Company.
8.
License
. To
the extent that any pre-existing materials are contained in the materials
Employee delivers to the Company or the Company’s customers, and such
preexisting materials are not Work Product, Employee grants to the Company an
irrevocable, exclusive, worldwide, royalty-free license to: (i) use
and distribute (internally or externally) copies of, and prepare derivative
works based upon, such pre-existing materials and derivative works thereof and
(ii) authorize others to do any of the foregoing. Employee shall
notify the Company in writing of any and all pre-existing materials delivered to
the Company by Employee. Employee acknowledges that the Company does
not wish to incorporate any unlicensed or unauthorized materials into its
products or technology. Therefore, Employee agrees that Employee
shall not knowingly disclose to the Company, use in the Company’s business, or
cause the Company to use, any information or material which is confidential to
any third party unless the Company has a written agreement with such third party
or the Company otherwise has the right to receive and use such
information. Employee shall not incorporate into Employee’s work any
material which is subject to the copyrights, patent or other proprietary right
of any third party unless the Company has a written agreement with such third
party or otherwise has the right to receive and use such material.
9.
Defense
or Prosecution of Claims
. Employee agrees that during his
employment and following the termination of his employment for any reason, he
shall cooperate at the request of the Company in the defense or prosecution of
any lawsuits or claims in which the Company, its affiliates and their respective
managers, directors, employees, officers or equity holders may be or become
involved and which relate to matters occurring while he was employed by the
Company, unless and to the extent that (a) Employee receives a written opinion
of counsel, which is provided to the Company, that Employee shall suffer
material harm or material prejudice as a result of such cooperation or (b) a
material conflict of interest arises or exists with respect to such cooperation,
and in each such case Employee shall cooperate to the maximum extent possible
without incurring material harm or material prejudice or a material conflict of
interest.
10.
Specific
Enforcement
. The Company and Employee agree that any violation
of
Sections 5
,
6
,
7
,
8
,
or
9
of this Agreement shall cause irreparable injury to the Company and its
affiliates and that, accordingly, the Company shall be entitled, in addition to
any other rights and remedies it may have at law or in equity, to seek an
injunction enjoining and restraining Employee from doing or planning to do any
such act and any other violation or threatened violation of
Sections 5
,
6
,
7
,
8
,
or
9
. Employee
agrees that the Company shall be entitled to recover from Employee all of the
Company’s costs and expenses, including reasonable attorneys’ fees, incurred by
the Company in the course of successfully defending or enforcing this
Agreement.
11.
No
Conflicting Obligations
. Each party represents and warrants to
the other party that it or he is not now under any obligation of a contractual
or other nature to any person or entity which is inconsistent or in conflict
with this Agreement, or which would prevent, limit or impair in any way the
performance by it or him of its or his obligations hereunder.
12.
Indemnity
. Employee
shall indemnify the Company and its subsidiaries, affiliates, successors and
assigns from and against any and all actions, suits, proceedings, liabilities,
damages, losses, costs and expenses (including attorneys’ and experts’ fees)
arising out of or in connection with any breach or threatened breach by Employee
of any one or more provisions of this Agreement. The existence of any
claim, demand, action or cause of action of Employee against the Company shall
not constitute a defense to the enforcement by the Company of any of the
covenants or agreements herein.
13.
Governing
Law
. This Agreement shall be governed by and construed in
accordance with the laws of the State of California, without giving effect to
principles of conflicts of laws.
14.
Consent
to Jurisdiction and Venue; Waiver of Jury Trial
.
(a) Each
party hereby irrevocably and unconditionally consents to submit to the exclusive
jurisdiction of the courts of the United States of America located in the State
of California, for any actions, suits or proceedings arising out of or relating
to this Agreement (and the parties agree not to commence any action, suit or
proceeding relating thereto except in such courts), and further agrees that
service of any process, summons, notice or document by U.S. registered or
certified mail to such party’s principal place of business shall be effective
service of process for any action, suit or proceeding arising out of or relating
to this Agreement in any such court. Each party hereby irrevocably
and unconditionally waives any objection to the laying of venue of any action,
suit or proceeding arising out of this Agreement, in the above-named courts, and
hereby further irrevocably and unconditionally waives his or its right and
agrees not to plead or claim in any such court that any such action, suit or
proceeding brought in any such court has been brought in an inconvenient
forum.
(b) TO
THE EXTENT NOT PROHIBITED BY APPLICABLE LAW WHICH CANNOT BE WAIVED, EACH OF THE
PARTIES HEREBY WAIVES AND COVENANTS NOT TO ASSERT (WHETHER AS PLAINTIFF,
DEFENDANT OR OTHERWISE) ANY RIGHT TO TRIAL BY JURY IN ANY FORUM IN RESPECT OF
ANY ISSUE OR ACTION, CLAIM, CAUSE OF ACTION OR SUIT (IN CONTRACT, TORT OR
OTHERWISE), INQUIRY, PROCEEDING OR INVESTIGATION ARISING OUT OF OR BASED UPON
THIS AGREEMENT OR THE SUBJECT MATTER HEREOF OR IN ANY WAY CONNECTED WITH OR
RELATED OR INCIDENTAL TO THE TRANSACTIONS CONTEMPLATED HEREBY, IN EACH CASE
WHETHER NOW EXISTING OR HEREAFTER ARISING. ANY PARTY HERETO MAY FILE
AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN
EVIDENCE OF THE CONSENT OF EACH SUCH PARTY TO THE WAIVER OF ITS RIGHT TO TRIAL
BY JURY.
15.
Remedies
Cumulative
. The provisions of this Agreement do not in any way
limit or abridge any rights of the Company or any of its subsidiaries or other
affiliates under the law of unfair competition, trade secret, copyright, patent,
trademark or any other applicable law(s), all of which are in addition to and
cumulative of the Company’s rights under this Agreement.
16.
Severability
. Each
of the provisions of this Agreement shall be deemed separate and severable each
from the other. In the event that any provision or portion of this
Agreement shall be determined to be invalid or unenforceable for any reason by
final judgment of a court of competent jurisdiction, the remaining provisions or
portions of this Agreement shall be unaffected thereby and shall remain in full
force and effect to the fullest extent permitted by law. In the event
that any provision or portion of this Agreement shall be determined by any court
of competent jurisdiction to be unreasonable or unenforceable, in whole or in
part, as written, Employee hereby consents to and affirmatively requests that
such court reform such provision or portion of this Agreement so as to be
reasonable and enforceable and that such court enforce such provision or portion
of this Agreement as so reformed.
17.
No
Defense
. The existence of any claim, demand, action or cause
of action of Employee against the Company, whether or not based upon this
Agreement, shall not constitute a defense to the enforcement by the Company of
any covenant or agreement of Employee contained herein.
18.
No
Attachment
. Except as required by law, no right to receive
payments under this Agreement shall be subject to anticipation, commutation,
alienation, sale, assignment, encumbrance, charge, pledge or hypothecation, or
to execution, attachment, levy or similar process or assignment by operation of
law, and any attempt, voluntary or involuntary, to effect any such action shall
be null, void and of no effect; provided, however, that this provision shall not
prevent Employee from designating one or more beneficiaries to receive any
amount after his death and shall not preclude his executor or administrator from
assigning any right hereunder to the person or persons entitled thereto, and in
the event of Employee’s death or a judicial determination of Employee’s
incompetence, Employee’s rights under this Agreement shall survive and shall
inure to the benefit of Employee’s heirs, beneficiaries and legal
representatives.
19.
Source of
Payments
. All payments provided under this Agreement shall be
paid in cash from the general funds of the Company, and no special or separate
fund shall be established and no other segregation of assets shall be made to
assure payment.
20.
Tax
Withholding
. The Company may withhold from any compensation
and benefits payable under this Agreement all federal, state, city or other
taxes as shall be required pursuant to any law or governmental regulation or
ruling.
21.
Notices
. All
notices, requests, claims, demands and other communications hereunder shall be
in writing and shall be deemed to have been duly given when delivered in person,
by any overnight courier or other service providing evidence of delivery, by
registered or certified mail (postage prepaid, return receipt requested), or by
facsimile or e-mail with a copy delivered the next business day by any overnight
courier or other service providing evidence of delivery, to the respective
parties at the following address:
|
|
If to the Company:
|
CommerceTel
Corporation
|
|
|
San
Diego, California 92123
|
|
|
Attention:
|
Chairman
of the Board
|
|
|
Facsimile:
|
(619)
725-0958
|
|
|
If to Employee:
|
Dennis
Becker
|
|
|
___________________________
|
|
|
___________________________
|
|
|
Facsimile:
______________
|
|
|
E-mail:
______________
|
22.
Amendment
and Waiver
. No provision of this Agreement may be amended or
modified, unless such amendment or modification is in writing and signed by the
Company and by Employee. No waiver by either party hereto of any
breach by the other party hereto of any condition or any provisions of this
Agreement to be performed by such other party shall be deemed a waiver of a
subsequent breach of such condition or provision or waiver of a similar or
dissimilar condition or provision at the same time or any subsequent
time.
23.
Assignment;
Successors in Interest
. No assignment or transfer by either
party of such party’s rights and obligations hereunder shall be made except with
the prior written consent of the other party hereto. This Agreement
shall be binding upon and shall inure to the benefit of the parties and their
respective successors and permitted assigns, and any reference to a party shall
also be a reference to the successors and permitted assigns thereof, including,
without limitation, successors through merger, consolidation, or sale of
substantially all of the Company’s equity interests or assets, and shall be
binding upon Employee.
24.
Prior
Agreements
. This Agreement supersedes all previous agreements
between the Company and Employee concerning terms and conditions of the
employment of Employee by the Company, and all such previous agreements are
hereby canceled by mutual consent.
25.
Entire
Agreement
. This Agreement contains the entire agreement
between the parties relating to Employee’s employment with the Company, and no
statements, representations, promises or inducements made by any party hereto,
or agreement of either party, which is not contained in this Agreement or in a
writing signed by both parties and expressly providing that it is supplemental
to this Agreement, shall be valid or binding.
26.
Counterparts
. This
Agreement may be executed in multiple counterparts, each of which shall for all
purposes be deemed to be an original and all of which, when taken together,
shall constitute one and the same instrument. This Agreement may be
executed and delivered by facsimile or other electronic
transmission.
27.
Section
409A
. This Agreement shall be construed in a manner consistent
with the applicable requirements of Section 409A of the Internal Revenue Code of
1986, as amended, and the formal guidance issued thereunder (“
Section 409A
”), and
the Company, in its sole discretion and without the consent of Employee, may
amend the provisions of this Agreement if and to the extent the Company
determines that such amendment is necessary or appropriate to comply with the
applicable requirements of Section 409A. If a payment date that
complies with Section 409A is not otherwise provided herein for any payment (in
cash or in-kind) or reimbursement that would otherwise constitute a “deferral of
compensation” under Section 409A, then such payment or reimbursement, to the
extent such payment or reimbursement becomes due hereunder, shall in all events
be made not later than two and one-half (2½) months after the end of the later
of the fiscal year or the calendar year in which the payment or reimbursement is
no longer subject to a substantial risk of forfeiture. The Company
shall only reimburse those amounts eligible to reimbursed under this Agreement
for which Employee submits, within thirty (30) days following the end of the
calendar year in which the expense was incurred, written requests for payments
accompanied with such evidence of fees and expenses incurred as the Company may
reasonably require and as may be needed to comply with applicable IRS rules and
Treasury regulations.
28.
Independent
Review and Advice
. Employee represents and warrants that he
executes this Agreement with full knowledge of the contents of this Agreement,
the legal consequences thereof, and any and all rights which each party may have
with respect to one another; that Employee has had the opportunity to receive
independent legal advice with respect to the matters set forth in this Agreement
and with respect to the rights and asserted rights arising out of such matters;
and that Employee is entering into this Agreement of his own free
will.
29.
Survival
. The
obligations of the parties under
Sections
3(d)
,
4(b)
,
4(c)
,
4(d)
,
4(e)
,
5
,
6
,
7
,
8
,
9
,
10
,
12
,
13
,
14
,
15
,
16
,
17
,
18
,
19
,
20
,
22
,
23
,
24
,
25
,
27
and
29
shall survive the termination or expiration of this Agreement and shall not be
extinguished thereby.
(Signatures
begin on next page)
IN WITNESS WHEREOF
, Employee
has hereunder set his hand and seal, and the Company has caused this Employment
Agreement to be executed by its duly authorized officer, to be effective as of
the Effective Date.
|
“
EMPLOYEE
”:
|
|
|
|
By:
|
|
|
|
Dennis
Becker, individually
|
|
|
|
|
“
COMPANY
”:
|
|
|
|
CommerceTel
Corporation
|
|
|
|
|
By:
|
|
|
Name:
|
|
|
Title:
|
|
[Signature
Page to Employment Agreement]
EXHIBIT
A
CONFIDENTIAL
GENERAL RELEASE
In
consideration of the promises, rights and benefits set forth in the Employment
Agreement dated as of _______________ (the “
Agreement
”) by and
between
CommerceTel
Corporation
, a Nevada corporation (the “
Company
”), and
Dennis
Becker
, an individual resident of the State of California (“
Employee
”), Employee
hereby executes this Confidential General Release (“
Release
”):
1.
Employee hereby releases the Company, its past and
present parents, subsidiaries, affiliates, predecessors, successors, assigns,
related companies, entities or divisions, its or their past and present employee
benefit plans, trustees, fiduciaries and administrators, and any and all of its
and their respective past and present officers, directors, partners, insurers,
equity holders, agents, representatives, attorneys and employees, including,
without limitation, each of their affiliates (all collectively included in the
term “
Company
”
for purposes of this Release), from any and all claims, demands or causes of
action which Employee, or Employee’s heirs, executors, administrators, agents,
attorneys, representatives or assigns (all collectively included in the term
“
Employee
” for
purposes of this Release), have, had or may have against the Company, based on
any events or circumstances arising or occurring prior to and including the date
of Employee’s execution of this Release to the fullest extent permitted by law,
regardless of whether such claims are now known or are later discovered,
including but not limited to, any claims relating to Employee’s employment or
termination of employment by the Company, any rights of continued employment,
reinstatement or reemployment by Company, and any costs or attorneys’ fees
incurred by Employee;
provided
,
however
, Employee is
not waiving, releasing or giving up any rights to vested benefits under any
pension or savings plan, or to enforce the Agreement, or any other rights which
cannot be waived as a matter of law. In the event any claim or suit
is filed on Employee’s behalf, Employee waives any and all rights to receive
monetary damages or injunctive relief in favor of Employee.
2.
Employee agrees and
acknowledges: that, except for any rights to vested benefits under
any pension or savings plan, or to enforce this Agreement, or any other rights
which cannot be waived as a matter of law, this Release is intended to be a
general release that extinguishes all claims by Employee against the Company;
that Employee is waiving any claims arising under Title VII of the Civil Rights
Act of 1964, the Civil Rights Act of 1991, the Americans With Disabilities Act,
the Age Discrimination in Employment Act, the Employee Retirement Income
Security Act, and all other federal, state and local statutes, acts, ordinances
and common law, including, but not limited to, any and all claims alleging
personal injury, emotional distress or other torts, or breach of contract, to
the fullest extent permitted by law; that Employee is waiving all claims against
the Company, known or unknown, arising or occurring prior to and including the
date of Employee’s execution of this Release; that the consideration that
Employee will receive in exchange for Employee’s waiver of the claims specified
herein exceeds anything of value to which Employee is already entitled; that
Employee was hereby informed by the Company in writing to consult with an
attorney and that Employee was provided at least twenty-one (21) days to
consider this Release; that Employee has entered into this Release knowingly and
voluntarily with full understanding of its terms and after having had the
opportunity to seek and having received advice from counsel of Employee’s
choosing; and that Employee has had a reasonable period of time within which to
consider this Release. Employee represents that Employee has not
assigned any claim against the Company to any person or
entity. Employee agrees not to apply for or seek future employment by
the Company.
Employee
acknowledges that Employee may hereafter discover facts different from or in
addition to those it now knows or believes to be true with respect to the
matters released herein. Employee acknowledges that the releases
contained herein shall remain effective in all respects notwithstanding such
different or additional facts. Seller consequently executes this
Release herein voluntarily, with full knowledge of its significance, and with
the express intention of waiving Section 1542 of the California Civil Code
regarding the extinguishment of all obligations and claims, whether known or
unknown. Section 1542 of the California Civil Code reads as
follows:
A GENERAL
RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO
EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN
BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE
DEBTOR.
3.
Notwithstanding anything to the contrary
contained in Section 2, Employee will remain eligible for indemnification
pursuant to the provisions of the Company’s organizational documents, including
its articles of incorporation and bylaws.
4.
Employee agrees to keep the terms of
this Release confidential and not to disclose the terms of this Release to
anyone except to Employee’s attorneys, tax consultants or as otherwise required
by law, and agrees to take all steps necessary to assure confidentiality by
those recipients of this information.
5.
Employee hereby agrees and acknowledges that Employee
has carefully read this Release, fully understands what this Release means, and
is signing this Release knowingly and voluntarily, that no other promises or
agreements have been made to Employee other than those set forth in the
Agreement or this Release, and that Employee has not relied on any statement by
anyone associated with Company that is not contained in the Agreement or this
Release in deciding to sign this Release.
6.
The rights and obligations of the parties
under this Release shall be construed in accordance with the laws of the State
of California, and all disputes arising under this Release shall be submitted to
the courts in California.
Employee
will deliver an executed copy of the Release to:
CommerceTel
Corporation
8929 Aero
Drive, Suite E
San
Diego, CA 92123
Attention: Chairman
of the Board
Facsimile: (619)
725-0958
Employee
may revoke this Release within seven (7) calendar days after it is executed by
Employee by delivering a written notice of revocation to the addresses above no
later than the close of business on the seventh (7th) calendar day after this
Release was signed by Employee. If Employee revokes this Release, the
Company shall have no obligation to provide any severance benefits set forth in
the Agreement.
EMPLOYEE:
Signature:
Print
name:
Date: