Exhibit 10.7
 

SEPARATION AND CONSULTING AGREEMENT

     Crexendo,   Inc.  (the   "Company")  and  David Rosenvall
("Executive")  enter  into  this  Separation  and  Consulting   Agreement  (this
"Agreement") on the 8th day of September, 2011 (the "Effective Date").

W I T N E S S E T H:

     WHEREAS, Executive is employed by the Company as Chief Technology Officer;

     WHEREAS, Executive’s employment as the Chief Technology Officer will cease
effective September 15, 2011 (the “Separation Date”);
 
 
     WHEREAS, the Company desires to retain Executive as a consultant following
the Separation Date;

    WHEREAS, the Company desires to restrict Executive from engaging in
competitive activities and actions, enter into a non-disparagement and
non-disclosure obligation as well as to clarify ownership of technology, and to
compensate Executive for those commitments;

     NOW, THEREFORE, in consideration of the covenants and mutual promises
contained in this Agreement, the parties agree as follows:

      1.  Separation Date. On September 15, 2011 (“Separation Date”),
Executive’s employment as the Chief Technology Officer with the Company or as an
employee of any subsidiary of the Company shall terminate and he will resign as
an officer of the Company and any subsidiary of the Company.

     2. Effect on Employment.  Executive’s separation and termination as an
employee is a voluntary termination. All rights and benefits conferred as an
employee will terminate on the Separation Date or as the benefit agreement may
detail.

      3. Consulting Services.
 
           3.1           Beginning on the Separation Date and ending on
September 14, 2013, Executive agrees to cooperate  with the Company in the
transition of technology projects of the Company (including but not limited to
working on user interface of the telecom division and the web services division,
working on web services software including the web store building software of
the  Company)  and to  perform  such other  projects and activities (the
"Consulting  Services") as may be reasonably requested by  Management of the
Company and agreed to by Executive,  which agreement may not be unreasonably
withheld by Executive.  The Company and Executive agree that the services
envisioned under this Agreement will require no more than 70 hours per month the
first year of the Consulting Term and 40 hours per month for the second year of
the Consulting Term of Executive’s working time. Nothing contained in this
Section 3 shall be deemed to create an employment relationship between the
Company and Executive during the
Consulting Period.  In providing the Consulting Services, Executive shall be an
independent contractor and shall not have authority to bind the Company with
respect to any matter.
 
 
 
 

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           3.2           Executive acknowledges and agrees that,
during  the  Consulting Term,  he is not eligible as part of his compensation
under this Agreement to participate in any compensation or
benefit  programs  offered by the Company to its active employees or insurance
plans or other  employee  benefit plans offered from time to time by the Company
to its active employees. The Company recognizes that Executive may offer
consulting services, or engage in activities not inconsistent with clause 4
herein, to other entities during the Consulting Period, subject to the
noncompetition provisions of the Employment Agreement.

           3.3           Payments. In consideration for the Consulting Services
to be provided by Executive pursuant to Section 3 of this Agreement the Company
agrees to pay Executive the amount of $75,000 per year (the "Payments").  The
Payments will be made in equal monthly installments.

           3.4           Receipt of Other Compensation. The Company and
Executive agree that, following the Separation Date, Executive is not and will
not be due any compensation, including, but not limited to, compensation for
unpaid salary (except for amounts unpaid and owing for Executive’s employment
with the Company prior to the Separation Date), unpaid bonus, severance and
accrued or unused vacation time or vacation pay from the Company or any of its
affiliates.

4. Additional Consideration, Restrictions and Obligations

           4.1           Additional Consideration. In consideration of
Executive’s agreeing to restrictions contained in this agreement, including
non-competition, non-solicitation, non-disclosure, no contest of ownership of
technology and non-disparagement, the Company agrees to pay Executive the sum of
$150,000.00 within ten days of the execution of this Agreement. This additional
consideration is specifically for the obligations and limitations contained in
this section.

           4.2         NON COMPETITION/ NON SOLICITATION:    Executive covenants
and agrees that during (i)  his  Consulting Term (the term  the term “Consulting
Term” shall be defined as the period  of the Consulting Agreement executed
contemporaneously with this agreement and commences on September 15, 2011 and
terminates on September 14, 2013) with the Company, and  (ii) for a period of
one (1) year after the  termination of the Consulting Term  with the Company,
Executive will not for any reason, without the prior written consent of the
Company, directly or indirectly, whether for his own account or as a stockholder
(other than as permitted by Section 4.2.4 below), partner, joint venturer,
director, officer, employee, consultant, lender, advisor, and/or agent, of any
person, firm, corporation, or other entity:

4.2.1           Engage in Competitive Activities or otherwise associate with
businesses that are substantially in competition with the Company or any of its
affiliates (in each case for the purposes of this Section 4.2, the term
“Company” shall be deemed to include any successor entity to the Company
including but not limited to iMergent, Inc. and
NetGateway, Inc.).  Competitive Activities include but are not limited
to  (A) engaging in a business which involves (i) sales or any activity
whatsoever which pertains to  or otherwise relates  to the provisioning of
telecom services, (ii) the establishment or providing of website builder tools,
Search Engine Optimization tools, link building tools, paid search tools,
conversion rate optimization tools, and web analytic tools or any other product
which the Company may now or may during the term of the Consulting Term
agreement sell or otherwise provide, (iii) the creation or maintenance of
related web sites; (B) soliciting any customer or prospective customer, supplier
or vendor of the Company, or any of its affiliates to  purchase or provide any
goods or services of the type provided by the Company, as applicable, from
anyone other than the Company, or any of its affiliates; and (C) assisting any
person or entity in any way to do, or attempt to do, anything prohibited by
clause (A) or (B) above; or
 
 
 
 

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4.2.2    Establish any new business that engages in Competitive Activities; or

4.2.3           Solicit, recruit or hire any employees of the Company or any of
their affiliates, contractors or persons who have worked or consulted and or
acted as an agent or independent contractor for the Company or any of such
affiliates during the time Executive was employed by Company and during the
Consulting Term, or solicit or encourage any employee of the Company or any of
their affiliates to leave the employment of the Company, or any of such
affiliates, as applicable.

4.2.4           Notwithstanding anything to the contrary contained in this
Section 4.2, the Company hereby agrees that the foregoing covenant shall not be
deemed breached by Executive solely as a result of the ownership by Executive of
less than an aggregate of 5% of any class of stock of a corporation engaged,
directly or indirectly, in Competitive Activities; provided that such stock is
listed on a national securities exchange or is quoted on the New York, American
or NASDAQ National Market Systems.

4.2.5           Executive hereby declares, acknowledges and agrees that the
foregoing time limitations are reasonable and properly required for the adequate
protection of the business and the goodwill of the Company.  In the event any
time limitation is deemed to be unreasonable by a court of competent
jurisdiction, the Executive agrees to the reduction of the time limitation to a
period which the court deems reasonable, considering Executive’s execution and
delivery of this Agreement has induced the Company to enter into this agreement.
Executive further acknowledges and understands that the provisions of this
section may limit Executive’s ability to earn a livelihood in a business similar
to the business of the Company but nevertheless agrees and hereby acknowledges
that the consideration provided under this agreement is sufficient to justify
the restrictions contained in this Agreement. In consideration thereof and in
light of Executive’s education, skills and abilities, Executive agrees that he
will not assert in any forum that such provisions prevent him from earning a
living or otherwise are void or unenforceable or should be held void or
unenforceable.

4.2.6           The parties acknowledge that in the event of a breach or
threatened breach of Sections 4.2.1, 4.2.2 or 4.2.3 above, the Company shall not
have an adequate remedy
at law.  Accordingly, in the event of any breach or threatened breach of
Sections 4.2.1, 4.2.2 or 4.2.3 above, the Company shall be entitled to such
equitable and injunctive relief as may be available to restrain Executive and
any business, firm, partnership, individual, corporation or entity participating
in the breach or threatened breach from the violation of the provisions of
Sections 4.2.1, 4.2.2 or 4.2.3 above. Nothing in this Agreement shall be
construed as prohibiting the Company from pursuing any other remedies available
at law or in equity for breach or threatened breach of Sections 4.2.1, 4.2.2 or
4.2.3 above, including the recovery of damages.

4.2.7           Permitted Activities.  Activities not prohibited by this section
include any activities or businesses not engaged in by the Company or any of its
affiliates during the period of time Executive was employed by the Company,
during the Consulting Term, and not engaged in by the Company or any of its
affiliates at the termination of the Consulting Term (collectively “Permitted
Activities”). The parties agree that Executive providing services as a direct
employee for an employer who does not in any manner sell any services to third
parties shall not be considered a violation of this Agreement.

4.3 NO CONTEST OF OWNERSHIP OF TECHNOLOGY OR INFORMATION.     All information,
ideas, concepts, improvements, discoveries, and inventions, whether patentable
or not, which are conceived, made, developed or acquired by Executive
individually or in conjunction with others, or in an manner used or developed by
Company during the time Executive was employed by Company or during the
Consulting Term with Company or any of its affiliates which relate to the
business, products or services of  Company or its affiliates (including, without
limitation, all such information relating to its web building platform, telecom
platform, internal processes, corporate opportunities, research, financial and
sales data, pricing and trading terms, evaluations, opinions, interpretations),
and all correspondence, memoranda, notes, records, data or information,
analyses, or other documents (including, without limitation, any
computer-generated, computer-stored or electronically-stored materials) of any
type embodying any of such items, shall be the sole and exclusive property of
Company or its affiliates, as the case may be.

4.4 NON DISCLOSURE.   Executive acknowledges that the businesses of the Company 
is highly competitive and that it has developed and owns valuable information
which is confidential, unique and specific to the Company (“Proprietary and
Confidential Information”) and which includes, without limitation, non-public
engineering plans; software development, web building platform, telecom
platforms; technical information concerning products, equipment, services and
processes and other trade secrets, concepts, ideas, plans, strategies, analyses,
surveys and proprietary information related to the past, present or anticipated
business of the Company. Proprietary and Confidential Information excludes
information which: (a) is now or hereafter becomes generally known or available,
through no act or failure to act on Executive’s part; (b) Company gives written
permission to Executive to disclose; or (c) disclosure is required by order of
Court or operation of law.
 
 
 
 

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4.4.1               Executive further acknowledges that protection of such
Proprietary and Confidential Information against unauthorized disclosure and use
is of critical importance to the Company in maintaining its competitive
position. Executive hereby agrees that he will not, at
any time during or after his employment or Consulting Period with the Company,
disclose to others, permit to be disclosed, use, permit to be used, copy or
permit to be copied, any such Proprietary and Confidential Information (whether
or not developed by Executive and whether or not received as an employee or
consultant) without the prior written consent of the of the Company. Executive
further agrees to maintain in confidence any proprietary and confidential
information of third parties received or of which he has knowledge as a result
of his employment or consultancy. The prohibitions of this Section shall not
apply, however, to information in the public domain (but only if the same
becomes part of the public domain through means other than a disclosure
prohibited hereunder). The above notwithstanding, a disclosure shall not be
unauthorized if (i) it is required by law or by a court of competent
jurisdiction or (ii) it is in connection with any judicial, arbitration, dispute
resolution or other legal proceeding in which Executive’s legal rights and
obligations as an employee or under this Agreement are at issue; provided,
however, that Executive shall, to the extent practicable and lawful in any such
events, give prior notice to the Company of his intent to disclose any such
Proprietary and Confidential Information in such context so as to allow the
Company or its affiliates an opportunity (which Executive will not oppose) to
obtain such protective orders or similar relief with respect thereto as may be
deemed appropriate.
 
           4.5 NON-DISPARAGMENT.

4.5.1           At all times  hereafter,  Executive will not disparage or
criticize, orally or in writing, the business, products, policies, decisions,
directors, officers or employees of the  Company or any of its
operating  divisions, subsidiaries or affiliates to any person.

                      4.5.2           At all times hereafter, the Company and
its officers, directors, employees and agents will not disparage or criticize,
orally or in writing, Executive.

5.           ASSIGNMENT AND TRANSFER.  Executive’s rights and obligations under
this Agreement shall not be transferable by assignment or otherwise, and any
purported assignment, transfer or delegation thereof shall be void.  This
Agreement shall inure to the benefit of, and be enforceable by, any purchaser of
substantially all of Company’s assets, any corporate successor to the Company or
any assignee thereof.

6.         NO INCONSISTENT OBLIGATIONS.  Executive is aware of no obligations,
legal or otherwise, inconsistent with the terms of this Agreement or with his
entering into the consulting agreement with the Company.

7.        MISCELLANEOUS.

7.1      Entire Agreement.  This Agreement contains the entire agreement and
understanding between the parties hereto and supersedes any prior or
contemporaneous written or oral agreements between them.

7.2      Amendment.  This Agreement may be amended only by a writing signed by
Executive and by a duly authorized representative of the Company.  Section 4.
Shall survive termination of this Agreement. 

7.3      Severability.  If any term, provision, covenant or condition of this
Agreement, or the application thereof to any person, place or circumstance,
shall be held to be invalid, unenforceable or void, the remainder of this
Agreement and such term, provision, covenant or condition as applied to other
persons, places and circumstances shall remain in full force and effect.

7.4      Construction.  The headings and captions of this Agreement are provided
for convenience only and are intended to have no effect in construing or
interpreting this Agreement.  The language in all parts of this Agreement shall
be in all cases construed according to its fair meaning and not strictly for or
against the Company or Executive.

7.5      Rights Cumulative.  The rights and remedies provided by this Agreement
are cumulative, and the exercise of any right or remedy by either party hereto
(or by its successor), whether pursuant to this Agreement, to any other
agreement, or to law, shall not preclude or waive such party’s right to exercise
any or all other rights and remedies.

7.6      Nonwaiver.  No failure or neglect of either party hereto in any
instance to exercise any right, power or privilege hereunder or under law shall
constitute a waiver of any other right, power or privilege or of the same right,
power or privilege in any other instance.  All waivers by either party hereto
must be contained in a written instrument signed by the party to be charged and,
in the case of the Company, by an officer of the Company (other than Executive)
or other person duly authorized by the Company.
 
 
 
 

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7.7      Remedy for Breach.  The parties hereto agree that, in the event of
breach or threatened breach of any covenants of Executive, the damage or
imminent damage to the value and the goodwill of the Company’s business shall be
inestimable, and that therefore any remedy at law or in damages shall be
inadequate.  Accordingly, the parties hereto agree that the Company shall be
entitled to injunctive relief against Executive in the event of any breach or
threatened breach of any of such provisions by Executive, in addition to any
other relief (including damages) available to the Company under this Agreement
or under law.  This Agreement shall be governed under the laws of the State of
Utah and any action to enforce this Agreement must be commenced within the State
of Utah in Salt Lake County.

7.8      Notices.  All notices and other communications hereunder shall be in
writing and shall be deemed given if delivered personally or by commercial
delivery service, or mailed by registered or certified mail (return receipt
requested) or sent electronically by email (with acknowledgement of complete
transmission) to the parties at the following addresses (or at such other
address for a party as shall be specified by like notice):

If to the Company, to:
1651 South 52nd Street
Tempe, AZ 85281
Electronically to Jeffrey Korn, chief legal officer at Jkorn@crexendo.com
Telephone No.   (886) 621-1111
 
 
 
 
If to Executive, to:
 
 

Telephone No. (   )

7.9      Assistance in Litigation.  Executive shall, during the Consulting Term
and after termination, upon reasonable notice, furnish such information and
proper assistance to the Company as may reasonably be required by the Company in
connection with any litigation which it or any of its subsidiaries or affiliates
is, or may become, a party.  After the termination of his Consulting Term, any
such reasonable assistance will take into account Executive’s schedule and
commitments.  Executive will be reimbursed for all out-of-pocket expenses
incurred in connection any such assistance.

7.10      Execution.  This Agreement may be executed in counterparts, each of
which shall be deemed an original but both of which together will constitute one
and the same instrument.
 
 
 
 

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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the Effective Date.

Crexendo, Inc.
 
EXECUTIVE
           
By:
 /s/ Jeffrey G. Korn
   
 /s/ David Rosenvall
 
Name:  Jeffrey G. Korn
 
Individual
Title:    Corporate Secretary/ SVP