Exhibit 10.5

 
EXECUTIVE EMPLOYMENT AGREEMENT
 
This EXECUTIVE EMPLOYMENT AGREEMENT (“Agreement”) is made and entered into
effective as of the 1st day of December 2018, by and between Exactus, Inc. a
Nevada corporation headquartered at 4870 Sadler Road, Suite 300, Glen Allen, VA
23060 (“Company”) and Timothy Ryan, an individual (“Executive”). As used herein,
the “Effective Date” of this Agreement shall mean December 1, 2018.
 
W I T N E S S E T H:
 
WHEREAS, on February 29, 2016 the Company and Exactus BioSolutions Corporation,
a Delaware corporation (the “Predecessor Company”) entered into a Share Exchange
Agreement (the “Share Exchange”) pursuant to which the Company acquired all of
the issued and outstanding capital stock of the Predecessor Company.
 
WHEREAS, Executive was party to an Employment Agreement dated as of December 15,
2015 by and between and Executive and the Predecessor Company (the “Predecessor
Employment Agreement”).
 
WHEREAS, the Executive desires to be employed by the Company as its Executive
Vice President and the Company wishes to employ the Executive in such capacity.
 
WHEREAS, in consideration for entry into this Agreement and the employment of
Executive pursuant to the terms hereof, Executive and Company agree to terminate
the Predecessor Employment Agreement and Executive agrees to release Company
from any and all obligations under the Agreement for payment of any amounts that
could be due or owing, including, without limitation, all compensation, bonus,
benefits, car allowances, equity awards, separation and other payments
thereunder, including any and all amount accrued or unpaid thereunder or which
could accrue or become payable thereunder, other than: (i) all cash compensation
and bonuses paid on or before the Effective Date (but not any accrued and unpaid
amounts existing as of the Effective Date which shall be waived and released in
all respects); (ii) reimbursement of all reasonable and necessary expenses
incurred by Executive on or prior to the Effective date which shall become
obligations pursuant to this Agreement; and (iii) 225,000 options issued
pursuant to the Company’s 2018 Equity Incentive Plan at an exercise price of
$0.089 per share, which shall be fully-vested on the Effective Date
(collectively, the “Retained Benefits”).
 
WHEREAS, this Agreement is being entered into between the Company and the
Executive in connection with that certain Exchange Agreements between the
Company and certain other parties signatory thereto and as a condition thereof
(the “Exchange Agreements”).
 
NOW, THEREFORE, in consideration of the foregoing and their respective covenants
and agreements contained in this document, the Company and the Executive hereby
agree as follows:
 
1. Employment and Duties. The Company agrees to employ and the Executive agrees
to serve as the Company’s Executive Vice President. The duties and
responsibilities of the Executive shall include the duties and responsibilities
as the Company’s Board of Directors (“Board”) may from time to time assign to
the Executive.
 
The Executive shall devote his full time efforts and services to the business
and affairs of the Company and its subsidiaries. Nothing in this Section 1 shall
prohibit the Executive from: (A) serving as a director or member of any other
board, committee thereof of any other entity or organization; (B) delivering
lectures, fulfilling speaking engagements, and any writing or publication
relating to his area of expertise; (C) serving as a director or trustee of any
governmental, charitable or educational organization; (D) engaging in additional
activities in connection with personal investments and community affairs,
including, without limitation, professional or charitable or similar
organization committees, boards, memberships or similar associations or
affiliations or (E) performing advisory activities, provided, however, such
activities are not in competition with the business and affairs of the Company
or would tend to cast executive of Company in a negative light in the reasonable
judgment of the Board.
 
2. Term. The term of this Agreement shall commence on the Effective Date and
shall continue for a period of two (2) years following the Effective Date (such
initial two (2) year term, the “Initial Term”) and shall be automatically
renewed for successive one (1) year periods thereafter unless either party
provides the other party with written notice of his or its intention not to
renew this Agreement at least three (3) months prior to the expiration of the
initial term or any renewal term of this Agreement. “Employment Period” shall
mean the initial two (2) year term plus renewals, if any.
 
 
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3. Place of Employment. The Executive’s services shall be performed at the
address for the Company set forth above and at such location or locations as the
Board of Directors shall determine, in its sole discretion. Should the Company
require services at a location greater than 25 miles from the Executive’s
current residence the Company will provide for and pay the usual and customary
fees associated with moving the Executive and his household to the required
location.
 
4. Base Salary. The Company agrees to pay the Executive an initial base salary
(“Base Salary”) of $120,000 per annum ($10,000 per month). Annual adjustments
after the first year of the Employment Period shall be determined by the Board.
The Base Salary shall be paid in periodic installments in accordance with the
Company’s regular payroll practices.
 
5. Bonuses.
 
(a)           Annual Bonus. The Executive shall be eligible to receive an annual
bonus the (“Annual Bonus”) as determined by the Compensation Committee or the
Board of Directors of the Company (the “Compensation Committee”). The Annual
Bonus shall be paid by the Company to the Executive promptly after determination
that the relevant targets, if any, have been met, it being understood that the
attainment of any financial targets associated with any bonus shall not be
determined until following the completion of the Company’s annual audit and
public announcement of such results and shall be paid promptly following the
Company’s announcement of earnings. In the event that the Compensation Committee
is unable to act or if there shall be no such Compensation Committee, then all
references herein to the Compensation Committee (except in the proviso to this
sentence) shall be deemed to be references to the Board. Upon his termination
from employment, the Executive shall be entitled to receive a pro-rata portion
of the Annual Bonus calculated based upon his final day of employment,
regardless of whether he is employed by the Company through the conclusion of
the fiscal quarter or year, as the case may be, on which the Annual Bonus is
based.
 
(b)           Equity Awards. The Executive shall be eligible for such grants of
awards under a Company incentive plan (or any successor or replacement plan
adopted by the Board and approved by the stockholders of the Company) (the
“Plan”) or as the Compensation Committee or Board may from time to time
determine (the “Share Awards”).  Share Awards shall be subject to the applicable
Plan terms and conditions, provided, however, that Share Awards shall be subject
to any additional terms and conditions as are provided herein or in any award
certificate(s), which shall supersede any conflicting provisions governing Share
Awards provided under the Plan.
 
6.            Severance
Compensation.                                                      Upon
termination of employment for any reason, the Executive shall be entitled to:
(A) all Base Salary earned through the date of termination to be paid according
to Section 4; (B) any and all reasonable expenses paid or incurred by the
Executive in connection with and related to the performance of his duties and
responsibilities for the Company during the period ending on the termination
date to be paid according to Section 8; (C) any accrued but unused vacation time
through the termination date in accordance with Company policy; and (D) any
Annual Bonuses earned through the date of termination to be paid according to
Section 5(a); and (E) all Share Awards earned and vested prior to termination.
 
Additionally, if the Executive’s employment is terminated prior to expiration of
the Employment Period (including due to his death or Disability, as defined in
Section 12(b)) unless the Executive’s employment is terminated for Cause (as
defined in Section 12(c)) or the Executive terminates his employment without
Good Reason (as defined in Section 12(d) and other than for a Change in Control
as provided in Section 12(d) and Section 12(f)), the Executive shall be entitled
to receive a cash amount equal to such amount as the Executive would have been
entitled to receive as an aggregate Base Salary for the balance of the Initial
Term (the “Initial Term Severance Payment”) (provided that if this Agreement has
been renewed subsequent to the Initial Term and the Executive’s employment is
terminated prior to expiration of the Employment Period (including due to his
death or Disability) unless the Executive’s employment is terminated for Cause
or the Executive terminates his employment without Good Reason and other than
for a Change in Control, the Executive shall be entitled to receive a cash
payment as determined by the Board (the “Renewal Separation Payment”) (the
Initial Term Severance Payment or the Renewal Separation Payment, as applicable
herein shall may be referred to as the “Separation Payment”), provided, however
that the Separation Payment shall in no event be less than 12 months of Base
Salary as then in effect, plus 50% of the prior year bonus, and if no such bonus
has been paid, 75% of the Base Salary as then in effect; provided, that the
Executive executes an agreement releasing Company and its affiliates from any
liability associated with this Agreement and such release is irrevocable at the
time the Separation Payment is first payable under this Section 6 and the
Executive complies with his other obligations under Section 13 of this
Agreement. Subject to the terms hereof, one-half (1/2) of the Separation Payment
shall be paid within thirty (30) days of the Executive’s termination of
employment (“Initial Payment”), provided that the Executive has executed a
release; and the balance of the Separation Payment shall be paid in
substantially equal installments on the Company’s regular payroll dates
beginning with the first payroll date coincident with or immediately following
the Initial Payment and ending with the last payroll date that occurs in the
third calendar year beginning after the Executive’s termination of employment.
 
 
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The Executive may continue coverage with respect to the Company’s group health
plans as permitted by the Consolidated Omnibus Budget Reconciliation Act of 1985
(“COBRA”) for himself and each of his “Qualified Beneficiaries” as defined by
COBRA (“COBRA Coverage”). The Company shall reimburse the amount of any COBRA
premium paid for COBRA Coverage timely elected by and for the Executive and any
Qualified Beneficiary of the Executive, and not otherwise reimbursed, during the
period that ends on the earliest of (x) the date the Executive or the Qualified
Beneficiary, as the case may be, ceases to be eligible for COBRA Coverage, (y)
the last day of the consecutive eighteen (18) month period following the date of
the Executive’s termination of employment and (z) the date the Executive or the
Qualified Beneficiary, as the case may be, is covered by another group health
plan. To reimburse any COBRA premium payment under this paragraph, the Company
must receive documentation of the COBRA premium payment within ninety (90) days
of its payment.
 
7. Clawback Rights. The Annual Bonus, and any and all stock based compensation
(such as options and equity awards) (collectively, the “Clawback Benefits”)
shall be subject to “Clawback Rights” as follows: during the period that the
Executive is employed by the Company and upon the termination of the Executive’s
employment and for a period of three (3) years thereafter, if there is a
restatement of any financial results directly attributable to the Executive from
which any Clawback Benefits to the Executive shall have been determined, the
Executive agrees to repay any amounts which were determined by reference to any
Company financial results which were later restated (as defined below), to the
extent the Clawback Benefits amounts paid exceed the Clawback Benefits amounts
that would have been paid, based on the restatement of the Company’s financial
information. All Clawback Benefits amounts resulting from such restated
financial results shall be retroactively adjusted by the Compensation Committee
to take into account the restated results, and any excess portion of the
Clawback Benefits resulting from such restated results shall be immediately
surrendered to the Company and if not so surrendered within ninety (90) days of
the revised calculation being provided to the Executive by the Compensation
Committee following a publicly announced restatement, the Company shall have the
right to take any and all action to effectuate such adjustment. At the option of
the Executive, the excess portion of the Clawback Benefits resulting from such
restated results may be repaid by either: (i) cash payment, or (ii) surrender of
common stock to the Company, valued at the closing market price for the
Company’s common stock on the date of surrender. The calculation of the revised
Clawback Benefits amount shall be determined by the Compensation Committee in
good faith and in accordance with applicable law, rules and regulations. All
determinations by the Compensation Committee with respect to the Clawback Rights
shall be final and binding on the Company and the Executive. The Clawback Rights
shall terminate following a Change of Control as defined in Section 12(f),
subject to applicable law, rules and regulations. For purposes of this Section
7, a restatement of financial results that requires a repayment of a portion of
the Clawback Benefits amounts shall mean a restatement resulting from material
non-compliance of the Company with any financial reporting requirement under the
federal securities laws and shall not include a restatement of financial results
resulting from subsequent changes in accounting pronouncements or requirements
which were not in effect on the date the financial statements were originally
prepared (“Restatements”). The parties acknowledge it is their intention that
the foregoing Clawback Rights as relates to Restatements conform in all respects
to the provisions of the Dodd-Frank Wall Street Reform and Consumer Protection
Act of 2010 (“Dodd-Frank Act”) and require recovery of all “incentive-based”
compensation, pursuant to the provisions of the Dodd-Frank Act and any and all
rules and regulations promulgated thereunder from time to time in effect.
Accordingly, the terms and provisions of this Agreement shall be deemed
automatically amended from time to time to assure compliance with the Dodd-Frank
Act and such rules and regulations as hereafter may be adopted and in effect.
 
8. Expenses. The Executive shall be entitled to prompt reimbursement by the
Company for all reasonable ordinary and necessary travel, entertainment, and
other expenses incurred by the Executive while employed (in accordance with the
policies and procedures established by the Company for its senior executive
officers) in the performance of his duties and responsibilities under this
Agreement; provided, that the Executive shall properly account for such expenses
in accordance with Company policies and procedures.
 
 
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9. Other Benefits. During the term of this Agreement, the Executive shall be
eligible to participate in incentive, stock purchase, savings, retirement
(401(k)), and welfare benefit plans, including, without limitation, health,
medical, dental, vision, life (including accidental death and dismemberment) and
disability insurance plans (collectively, “Benefit Plans”), in substantially the
same manner and at substantially the same levels as the Company makes such
opportunities available to the Company’s managerial or salaried executive
employees and/or its senior executive officers.
10. Vacation. During the term of this Agreement, the Executive shall be entitled
to accrue, on a pro rata basis, seven (7) weeks paid vacation per year. Vacation
shall be taken at such times as are mutually convenient to the Executive and the
Company and no more than seven (14) consecutive days shall be taken at any one
time without Company approval in advance.
 
11. Intentionally Omitted.
 
12. Termination of Employment.
 
(a)            Death. If the Executive dies during the Employment Period, this
Agreement and the Executive’s employment with the Company shall automatically
terminate and the Company’s obligations to the Executive’s estate and to the
Executive’s Qualified Beneficiaries shall be those set forth in Section 6
regarding severance compensation.
 
(b)            Disability. In the event that, during the term of this Agreement
the Executive shall be prevented from performing his essential functions
hereunder to the full extent required by the Company by reason of Disability (as
defined below), this Agreement and the Executive’s employment with the Company
shall automatically terminate. The Company’s obligation to the Executive under
such circumstances shall be those set forth in Section 6 regarding severance
compensation. For purposes of this Agreement, “Disability” shall mean a physical
or mental disability that prevents the performance by the Executive, with or
without reasonable accommodation, of his essential functions hereunder for an
aggregate of ninety (90) days or longer during any twelve (12) consecutive
months. The determination of the Executive’s Disability shall be made by an
independent physician who is reasonably acceptable to the Company and the
Executive (or his representative), be final and binding on the parties hereto
and be made taking into account such competent medical evidence as shall be
presented to such independent physician by the Executive and/or the Company or
by any physician or group of physicians or other competent medical experts
employed by the Executive and/or the Company to advise such independent
physician.
 
(c)           Cause.
 
(1)           At any time during the Employment Period, the Company may
terminate this Agreement and the Executive’s employment hereunder for Cause. For
purposes of this Agreement, “Cause” shall mean: (a) the willful and continued
failure of the Executive to perform substantially his duties and
responsibilities for the Company (other than any such failure resulting from the
Executive’s death or Disability) after a written demand by the Board for
substantial performance is delivered to the Executive by the Company, which
specifically identifies the manner in which the Board believes that the
Executive has not substantially performed his duties and responsibilities, which
willful and continued failure is not cured by the Executive within thirty (30)
days following his receipt of such written demand; (b) the conviction of, or
plea of guilty or nolo contendere to, a felony, or (c) fraud, dishonesty or
gross misconduct which is materially and demonstratively injurious to the
Company. Termination under clauses (b) or (c) of this Section 12(c)(1) shall not
be subject to cure.
 
(2)           
For purposes of this Section 12(c), no act, or failure to act, on the part of
the Executive shall be considered “willful” unless done, or omitted to be done,
by him in bad faith and without reasonable belief that his action or omission
was in, or not opposed to, the best interest of the Company. Between the time
the Executive receives written demand regarding substantial performance, as set
forth in subparagraph (1) above, and prior to an actual termination for Cause,
the Executive will be entitled to appear (with counsel) before the full Board to
present information regarding his views on the Cause event. After such hearing,
termination for Cause must be approved by a majority vote of the full Board
(other than the Executive). After providing the written demand regarding
substantial performance, the Board may suspend the Executive with full pay and
benefits until a final determination by the full Board has been made.
 
 
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(3)           Upon termination of this Agreement for Cause, the Company shall
have no further obligations or liability to the Executive or his heirs,
administrators or executors with respect to compensation and benefits
thereafter, except for the obligation to pay the Executive any Base Salary
earned through the date of termination to be paid according to Section 4; any
unpaid Annual Bonus to be paid according to Section 5; reimbursement of any and
all reasonable expenses paid or incurred by the Executive in connection with and
related to the performance of his duties and responsibilities for the Company
during the period ending on the termination date to be paid according to Section
8; and any accrued but unused vacation time through the termination date in
accordance with Company policy. The Company shall deduct, from all payments made
hereunder, all applicable taxes, including income tax, FICA and FUTA, and other
appropriate deductions.
 
(d)           For Good Reason or a Change of Control or Without Cause.
 
(1)           At any time during the term of this Agreement and subject to the
conditions set forth in Section 12(d)(2) below the Executive may terminate this
Agreement and the Executive’s employment with the Company for “Good Reason” or
for a “Change of Control” (as defined in Section 12(f)). For purposes of this
Agreement, “Good Reason” shall mean the occurrence of any of the following
events without Executive’s consent: (A) the assignment to the Executive of
duties that are significantly different from, and/or that result in a
substantial diminution of, the duties that he assumed on the Effective Date
(including reporting to anyone other than solely and directly to the Board); (B)
the assignment to the Executive of a title that is different from and
subordinate to the title Executive Vice President of Sales and Marketing of the
Company, provided, however, for the absence of doubt following a Change of
Control, should the Executive be required to serve in a diminished capacity in a
division or unit of another entity (including the acquiring entity), such event
shall constitute Good Reason regardless of the title of the Executive in such
acquiring company, division or unit; or (C) material breach by the Company of
this Agreement.
 
(2)           The Executive shall not be entitled to terminate this Agreement
for Good Reason unless and until he shall have delivered written notice to the
Company within ninety (90) days of the date upon which the facts giving rise to
Good Reason occurred of his intention to terminate this Agreement and his
employment with the Company for Good Reason, which notice specifies in
reasonable detail the circumstances claimed to provide the basis for such
termination for Good Reason, and the Company shall not have eliminated the
circumstances constituting Good Reason within thirty (30) days of its receipt
from the Executive of such written notice. In the event the Executive elects to
terminate this Agreement for Good Reason in accordance with Section 12(d)(1),
such election must be made within the one-twenty (120) days following the
initial existence of one or more of the conditions constituting Good Reason as
provided in Section 12(d)(1). In the event the Executive elects to terminate
this Agreement for a Change in Control in accordance with Section 12(d)(1), such
election must be made within one hundred eighty (180) days of the occurrence of
the Change of Control.
 
(3)           In the event that the Executive terminates this Agreement and his
employment with the Company for Good Reason or for a Change of Control or the
Company terminates this Agreement and the Executive’s employment with the
Company without Cause, the Company shall pay or provide to the Executive (or,
following his death, to the Executive’s heirs, administrators or executors) the
severance compensation set forth in Section 6 above. The Company shall deduct,
from all payments made hereunder, all applicable taxes, including income tax,
FICA and FUTA, and other appropriate deductions.
 
 (4)           The Executive shall not be required to mitigate the amount of any
payment provided for in this Section 12(d) by seeking other employment or
otherwise, nor shall the amount of any payment provided for in this Section
12(d) be reduced by any compensation earned by the Executive as the result of
employment by another employer or business or by profits earned by the Executive
from any other source at any time before and after the termination date. The
Company’s obligation to make any payment pursuant to, and otherwise to perform
its obligations under, this Agreement shall not be affected by any offset,
counterclaim or other right that the Company may have against the Executive for
any reason.
 
 
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(e)           Without “Good Reason” by the Executive. At any time during the
term of this Agreement, the Executive shall be entitled to terminate this
Agreement and the Executive’s employment with the Company without Good Reason
and other than for a Change of Control by providing prior written notice of at
least thirty (30) days to the Company. Upon termination by the Executive of this
Agreement or the Executive’s employment with the Company without Good Reason and
other than for a Change of Control, the Company shall have no further
obligations or liability to the Executive or his heirs, administrators or
executors with respect to compensation and benefits thereafter, except for the
obligation to pay the Executive any Base Salary earned through the date of
termination to be paid according to Section 4; any unpaid Annual Bonus to be
paid according to Section 5; reimbursement of any and all reasonable expenses
paid or incurred by the Executive in connection with and related to the
performance of his duties and responsibilities for the Company during the period
ending on the termination date to be paid according to Section 8; and any
accrued but unused vacation time through the termination date in accordance with
Company policy. The Company shall deduct, from all payments made hereunder, all
applicable taxes, including income tax, FICA and FUTA, and other appropriate
deductions.
 
(f)            Change of Control. For purposes of this Agreement, “Change of
Control” shall mean the occurrence of any one or more of the following: (i) the
accumulation (if over time, in any consecutive twelve (12) month period),
whether directly, indirectly, beneficially or of record, by any individual,
entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the
Securities Exchange Act of 1934, as amended) of more than fifty percent (50%) or
more of the shares of the outstanding Common Stock of the Company, whether by
merger, consolidation, sale or other transfer of shares of Common Stock (other
than a merger or consolidation where the stockholders of the Company prior to
the merger or consolidation are the holders of a majority of the voting
securities of the entity that survives such merger or consolidation), (ii) a
sale of all or substantially all of the assets of the Company or (iii) during
any period of twelve (12) consecutive months, the individuals who, at the
beginning of such period, constitute the Board, and any new director whose
election by the Board or nomination for election by the Company’s stockholders
was approved by a vote of at least two-thirds (2/3) of the directors then still
in office who either were directors at the beginning of the twelve (12) month
period or whose election or nomination for election was previously so approved,
cease for any reason to constitute at least a majority of the Board; provided
that the following acquisitions shall not constitute a Change of Control for the
purposes of this Agreement: any acquisition of Common Stock or securities
convertible into Common Stock by any employee benefit plan (or related trust)
sponsored by or maintained by the Company. Notwithstanding the foregoing, a
Change of Control shall exclude the initial event that causes the Company to
become a public reporting company with the Securities and Exchange Commission
and any event within twelve (12) months following the Effective Date.
 
(g)            Any termination of the Executive’s employment by the Company or
by the Executive (other than termination by reason of the Executive’s death)
shall be communicated by written Notice of Termination to the other party of
this Agreement. For purposes of this Agreement, a “Notice of Termination” shall
mean a written notice which shall indicate the specific termination provision in
this Agreement relied upon and shall set forth in reasonable detail the facts
and circumstances claimed to provide a basis for termination of the Executive’s
employment under the provision so indicated, provided, however, failure to
provide timely notification shall not affect the employment status of the
Executive.
 
13. Confidential Information.
 
(a)           Disclosure of Confidential Information. The Executive recognizes,
acknowledges and agrees that he has had and will continue to have access to
secret and confidential information regarding the Company, its subsidiaries and
their respective businesses (“Confidential Information”), including but not
limited to, its products, methods, formulas, software code, patents, sources of
supply, customer dealings, data, know-how, trade secrets and business plans,
provided such information is not in or does not hereafter become part of the
public domain, or become known to others through no fault of the Executive. The
Executive acknowledges that such information is of great value to the Company,
is the sole property of the Company, and has been and will be acquired by him in
confidence. In consideration of the obligations undertaken by the Company
herein, the Executive will not, at any time, during or after his employment
hereunder, reveal, divulge or make known to any person, any information acquired
by the Executive during the course of his employment, which is treated as
confidential by the Company, and not otherwise in the public domain. The
provisions of this Section 13 shall survive the termination of the Executive’s
employment hereunder.
 
 
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(b)           The Executive affirms that he does not possess and will not rely
upon the protected trade secrets or confidential or proprietary information of
any prior employer(s) in providing services to the Company or its subsidiaries.
 
(c)           In the event that the Executive’s employment with the Company
terminates for any reason, the Executive shall deliver forthwith to the Company
any and all originals and copies, including those in electronic or digital
formats, of Confidential Information; provided, however, the Executive shall be
entitled to retain (i) papers and other materials of a personal nature,
including, but not limited to, photographs, correspondence, personal diaries,
calendars and rolodexes, personal files and phone books, (ii) information
showing his compensation or relating to reimbursement of expenses, (iii)
information that he reasonably believes may be needed for tax purposes and (iv)
copies of plans, programs and agreements relating to his employment, or
termination thereof, with the Company.
 
14. Non-Competition and Non-Solicitation.
 
(a)           The Executive agrees and acknowledges that the Confidential
Information that the Executive has already received and will receive is valuable
to the Company and that its protection and maintenance constitutes a legitimate
business interest of the Company, to be protected by the non-competition
restrictions set forth herein. The Executive agrees and acknowledges that the
non-competition restrictions set forth herein are reasonable and necessary and
do not impose undue hardship or burdens on the Executive. The Executive also
acknowledges that the Company’s Business (as defined in Section 14(b)(1) below)
is conducted worldwide (the “Territory”), and that the Territory, scope of
prohibited competition, and time duration set forth in the non-competition
restrictions set forth below are reasonable and necessary to maintain the value
of the Confidential Information of, and to protect the goodwill and other
legitimate business interests of, the Company, its affiliates and/or its clients
or customers. The provisions of this Section 14 shall survive the termination of
the Executive’s employment hereunder for the time periods specified below.
 
(b)           The Executive hereby agrees and covenants that he shall not
without the prior written consent of the Company, directly or indirectly, in any
capacity whatsoever, including, without limitation, as an employee, employer,
consultant, principal, partner, shareholder, officer, director or any other
individual or representative capacity (other than (i) as a holder of less than
two (2%) percent of the outstanding securities of a company whose shares are
traded on any national securities exchange or (ii) as a limited partner, passive
minority interest holder in a venture capital fund, private equity fund or
similar investment entity which holds or may hold an equity or debt position in
portfolio companies that are competitive with the Company; provided however,
that the Executive shall be precluded from serving as an operating partner,
general partner, manager or governing board designee with respect to such
portfolio companies), or whether on the Executive's own behalf or on behalf of
any other person or entity or otherwise howsoever, during the Term and
thereafter to the extent described below, within the Territory:
 
(1)           Engage, own, manage, operate, control, be employed by, consult
for, participate in, or be connected in any manner with the ownership,
management, operation or control of any business in competition with the
Business of the Company, as defined in the next sentence. For purposes hereof,
the Company’s Business shall mean the electronics distribution business as well
as any future related or unrelated industries or segments in which the Company
may engage or operate in the future.
 
(2)           Recruit, solicit or hire, or attempt to recruit, solicit or hire,
any employee, or independent contractor of the Company to leave the employment
(or independent contractor relationship) thereof, whether or not any such
employee or independent contractor is party to an employment agreement, for the
purpose of competing with the Business of the Company;
 
(3)           Attempt in any manner to solicit or accept from any customer of
the Company, with whom Executive had significant contact during Executive’s
employment by the Company (whether under this Agreement or otherwise), business
of the kind or competitive with the business done by the Company with such
customer or to persuade or attempt to persuade any such customer to cease to do
business or to reduce the amount of business which such customer has customarily
done or might do with the Company, or if any such customer elects to move its
business to a person other than the Company, provide any services of the kind or
competitive with the business of the Company for such customer, or have any
discussions regarding any such service with such customer, on behalf of such
other person for the purpose of competing with the Business of the Company; or
 
 
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(4)           Interfere with any relationship, contractual or otherwise, between
the Company and any other party, including, without limitation, any supplier,
distributor, co-venturer or joint venturer of the Company, for the purpose of
soliciting such other party to discontinue or reduce its business with the
Company for the purpose of competing with the Business of the Company.
 
With respect to the activities described in Paragraphs (1), (2), (3) and (4)
above, the restrictions of this Section 14(b) shall continue during the Term and
for a period of one (1) year thereafter.
 
15. Section 409A.
 
The provisions of this Agreement are intended to comply with or are exempt from
Section 409A of the Code (“Section 409A”) and the related Treasury Regulations
and shall be construed in a manner consistent with the requirements for avoiding
taxes or penalties under Section 409A. The Company and the Executive agree to
work together in good faith to consider amendments to this Agreement and to take
such reasonable actions necessary, appropriate or desirable to avoid imposition
of any additional tax under Section 409A or income recognition prior to actual
payment to the Executive under this Agreement.
 
It is intended that any expense reimbursement made under this Agreement shall be
exempt from Section 409A. Notwithstanding the foregoing, if any expense
reimbursement made under this Agreement shall be determined to be “deferred
compensation” subject to Section 409A (“Deferred Compensation”), then (a) the
right to reimbursement or in-kind benefits is not subject to liquidation or
exchange for another benefit, (b) the amount of expenses eligible for
reimbursement, or in-kind benefits, provided during any taxable year shall not
affect the expenses eligible for reimbursement, or in-kind benefits to be
provided, in any other taxable year (provided that this clause (b) shall not be
violated with regard to expenses reimbursed under any arrangement covered by
Section 105(b) of the Code solely because such expenses are subject to a limit
related to the period the arrangement is in effect) and (c) such payments shall
be made on or before the last day of the taxable year following the taxable year
in which the expense was incurred.
 
With respect to the time of payments of any amount under this Agreement that is
Deferred Compensation, references in the Agreement to “termination of
employment” and substantially similar phrases, including a termination of
employment due to the Executive’s Disability, shall mean “Separation from
Service” from the Company within the meaning of Section 409A (determined after
applying the presumptions set forth in Treasury Regulation Section
1.409A-1(h)(1)). Each installment payable hereunder shall constitute a separate
payment for purposes of Treasury Regulation Section 1.409A-2(b), including
Treasury Regulation Section 1.409A-2(b)(2)(iii). Each payment that is made
within the terms of the “short-term deferral” rule set forth in Treasury
Regulation Section 1.409A-1(b)(4) is intended to meet the “short-term deferral”
rule. Each other payment is intended to be a payment upon an involuntary
termination from service and payable pursuant to Treasury Regulation Section
1.409A-1(b)(9)(iii), et. seq., to the maximum extent permitted by that
regulation, with any amount that is not exempt from Code Section 409A being
subject to Code Section 409A.
 
Notwithstanding anything to the contrary in this Agreement, if the Executive is
a “specified employee” within the meaning of Section 409A at the time of the
Executive’s termination, then only that portion of the severance and benefits
payable to the Executive pursuant to this Agreement, if any, and any other
severance payments or separation benefits which may be considered Deferred
Compensation (together, the “Deferred Separation Benefits”), which (when
considered together) do not exceed the Section 409A Limit (as defined herein)
may be made within the first six (6) months following the Executive’s
termination of employment in accordance with the payment schedule applicable to
each payment or benefit. Any portion of the Deferred Separation Benefits in
excess of the Section 409A Limit otherwise due to the Executive on or within the
six (6) month period following the Executive’s termination will accrue during
such six (6) month period and will become payable in one lump sum cash payment
on the date six (6) months and one (1) day following the date of the Executive’s
termination of employment. All subsequent Deferred Separation Benefits, if any,
will be payable in accordance with the payment schedule applicable to each
payment or benefit. Notwithstanding anything herein to the contrary, if the
Executive dies following termination but prior to the six (6) month anniversary
of the Executive’s termination date, then any payments delayed in accordance
with this paragraph will be payable in a lump sum as soon as administratively
practicable after the date of the Executive’s death and all other Deferred
Separation Benefits will be payable in accordance with the payment schedule
applicable to each payment or benefit.
 
 
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For purposes of this Agreement, “Section 409A Limit” shall mean a sum equal to
(x) the amounts payable within the terms of the “short-term deferral” rule under
Treasury Regulation Section 1.409A-1(b)(4) plus (y) the amount payable as
“separation pay due to involuntary separation from service” under Treasury
Regulation Section 1.409A-1(b)(9)(iii) equal to the lesser of two (2) times: (i)
the Executive’s annualized compensation from the Company based upon his annual
rate of pay during the Executive’s taxable year preceding his taxable year when
his employment terminated, as determined under Treasury Regulation
1.409A-1(b)(9)(iii)(A)(1); and (ii) the maximum amount that may be taken into
account under a qualified plan pursuant to Section 401(a)(17) of the Code for
the year in which the Executive’s employment is terminated.  
 
16. Miscellaneous.
 
 (a)           Neither the Executive nor the Company may assign or delegate any
of their rights or duties under this Agreement without the express written
consent of the other; provided, however, that the Company shall have the right
to delegate its obligation of payment of all sums due to the Executive
hereunder, provided that such delegation shall not relieve the Company of any of
its obligations hereunder.
 
(b)           During the term of this Agreement, the Company (i) shall indemnify
and hold harmless the Executive and his heirs and representatives to the maximum
extent provided by the laws of the State of Nevada and by Company’s bylaws and
(ii) shall cover the Executive under the Company’s directors’ and officers’
liability insurance on the same basis as it covers other senior executive
officers and directors of the Company.
 
(c)           This Agreement constitutes and embodies the full and complete
understanding and agreement of the parties with respect to the Executive’s
employment by the Company, supersedes all prior understandings and agreements,
whether oral or written, between the Executive and the Company, and shall not be
amended, modified or changed except by an instrument in writing executed by the
party to be charged. If any provision of this Agreement, or the application
thereof, shall for any reason and to any extent be invalid or unenforceable,
then the remainder of this Agreement and the application of such provision to
other persons or circumstances shall be interpreted so as reasonably to effect
the intent of the parties hereto.  The parties further agree to replace such
void or unenforceable provision of this Agreement with a valid and enforceable
provision that shall achieve, to the extent possible, the economic, business and
other purposes of the void or unenforceable provision. No waiver by either party
of any provision or condition to be performed shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same time or any prior or
subsequent time. The Predecessor Employment Agreement is terminated in all
respects effective as of the Effective Date. All rights and benefits of
Executive under the Predecessor Employment Agreement are hereby released and of
no further force and effect other than the Retained Benefits.  Executive hereby
knowingly and voluntarily releases and forever discharges the Company, any
related companies, and the former and current employees, officers, agents,
directors, shareholders, investors, attorneys, affiliates, successors and
assigns of any of them (the “Released Parties”) from all liabilities, claims,
demands, rights of action or causes of action Executive had, has or may have
against any of the Released Parties through the Effective Date of this
Agreement, including but not limited to any claims or demands based upon or
relating to Executive’s employment with the Company or the cessation of that
employment.  This includes, but is not limited to, a release of any rights or
claims Employee may have under Title VII of the Civil Rights Act of 1964, as
amended; the Equal Pay Act; the Age Discrimination in Employment Act of 1967;
the Employee Retirement Income Security Act, except as provided herein; the
Americans with Disabilities Act; the Family and Medical Leave Act of 1993; or
any other federal, state or local laws or regulations applicable to the
employment relationship.  This also includes, but is not limited to, a release
by Executive of any claims for wrongful discharge, breach of contract, or any
other statutory, common law, tort, contract, or negligence claim that Executive
had, has or may have against any of the Released Parties through the date of
this Agreement.  This release covers both claims that Executive knows about and
those claims Executive may not know about. Notwithstanding anything herein to
the contrary, the release shall not discharge any obligation of the Company for
indemnification of Executive under the Predecessor Agreement, this Agreement,
the Company’s Articles of Incorporation or Bylaws, or pursuant to applicable
law, other than such indemnification as may be contrary to public policy as
determined by the Securities and Exchange Commission.
 
(d)           This Agreement shall inure to the benefit of, be binding upon and
enforceable against, the parties hereto and their respective successors, heirs,
beneficiaries and permitted assigns.
 
 
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(e)           The headings contained in this Agreement are for convenience of
reference only and shall not affect in any way the meaning or interpretation of
this Agreement.
 
(f)           All notices, requests, demands and other communications required
or permitted to be given hereunder shall be in writing and shall be deemed to
have been duly given when personally delivered, sent by registered or certified
mail, return receipt requested, postage prepaid, or by reputable national
overnight delivery service (e.g., Federal Express) for overnight delivery to the
party at the address set forth in the preamble to this Agreement, or to such
other address as either party may hereafter give the other party notice of in
accordance with the provisions hereof. Notices shall be deemed given on the
sooner of the date actually received or the third business day after deposited
in the mail or one business day after deposited with an overnight delivery
service for overnight delivery.
 
(g)           This Agreement shall be governed by and construed in accordance
with the internal laws of the State of New York, and each of the parties hereto
irrevocably consents to the jurisdiction and venue of the federal and state
courts located in the State of New York, County of New York, for any disputes
arising out of this Agreement, or the Executive’s employment with the Company.
The prevailing party in any dispute arising out of this Agreement shall be
entitled to his or its reasonable attorney’s fees and costs.
 
(h)           This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one of the same instrument. The parties hereto have
executed this Agreement as of the date set forth above.
 
(i)           The Executive represents and warrants to the Company, that he has
the full power and authority to enter into this Agreement and to perform his
obligations hereunder and that the execution and delivery of this Agreement and
the performance of his obligations hereunder will not conflict with any
agreement to which the Executive is a party.
 
(j)           The Company represents and warrants to the Executive that it has
the full power and authority to enter into this Agreement and to perform its
obligations hereunder and that the execution and delivery of this Agreement and
the performance of its obligations hereunder will not conflict with any
agreement to which the Company is a party.
 
 
[Signature page follows immediately]
 
 
 
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IN WITNESS WHEREOF, the Executive and the Company have caused this Executive
Employment Agreement to be executed as of the date first above written.
 
 
 
 
 
 
 
 
EXCACTUS, INC.
By:                                                                 
Name: _____________________________
Title:            _____________________________
Date Signed: ________________________
 
 
 
TIMOTHY RYAN
Executive
 
___________________________________________
 
Date Signed: _________________________

 
 
 
 
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