Exhibit 10.1
 

 
EMPLOYMENT AGREEMENT
 
This Employment Agreement (the “Agreement”), effective as of October 1, 2008
(the “Effective Date”), is by and between R. LaDuane Clifton (the “Executive”)
and a21, Inc., a corporation formed under the laws of the State of Delaware (the
“Company” or “a21”).
 
W I T N E S S E T H:
 
WHEREAS, the Company desires to employ the Executive, and the Executive is
willing to render services to the Company, on the terms and subject to the
conditions hereinafter set forth.
 
NOW, THEREFORE, in consideration of the premises and the mutual covenants,
agreements and promises hereinafter set forth, the parties hereto covenant and
agree as follows:
 
1. EMPLOYMENT.  The Company shall employ the Executive as its Chief Financial
Officer and Vice President, and the Executive hereby accepts such employment
upon the terms and subject to the conditions hereinafter set forth, commencing
on the Effective Date and continuing until terminated pursuant to Paragraph 4
hereof (the “Employment Period”).
 
2. DUTIES.
 
(a) The Executive shall report to a21’s Board of Directors (the “a21 Board”)
through its Chief Executive Officer.  The Executive shall perform and discharge
diligently and faithfully such duties as may be assigned to him from time to
time by the a21 Board and its Chief Executive Officer as are customary for the
position of Chief Financial Officer.  The Executive shall be based in the
Jacksonville, Florida, metropolitan area, but his position will require
reasonable travel outside of such area.
 
(b) The Executive shall devote his full business time, attention, skills and
energies to the performance of his duties hereunder and to the promotion of the
business of the Company.  The Executive may not, during the Employment Period,
be employed or engaged in any other business activity, whether or not such
activity is pursued for gain, profit or other pecuniary advantage, which would
not allow him to contribute his full business time, attention, skills and
energies to the performance of his duties hereunder and to the promotion of the
business of the Company without the written consent of the Chief Executive
Officer of the Company.  Nothing in this paragraph will be construed as
preventing the Executive from investing his personal assets in businesses which
do not compete with the Company and engaging in not-for-profit and civic
activities that do not interfere with the Executive’s duties hereunder.
 
3. COMPENSATION.
 
(a) Salary.  For services rendered by the Executive hereunder during the
Employment Period, the Company shall pay Executive a base salary (the “Salary”)
at the annual gross rate of One Hundred Fifty Thousand Dollars ($150,000) in
accordance with the Company’s ordinary payroll practices.  An employment review
will take place on an annual basis.  Any increases in the Salary shall be
determined on an annual basis by the Board in its sole discretion.
 
(b) Benefits.  During the Employment Period, the Company shall pay Nine Hundred
Dollars ($900) per month (the “Benefit Amount”) of medical, dental, life
insurance, pension or other employee benefits for the Executive, each as
determined by the Executive, whether the Executive elects to use the benefit
plans provided by the Company from time to time or otherwise.  The Company will
permit the Executive to make contributions to the Company’s 401(k) plan, subject
to the terms and conditions of such plan.  The Executive is entitled to such
amount of paid time off (“PTO”) as is in the best interests of the Company after
coordination with the Chief Executive Officer of the Company, which in no event
shall be less than four (4) calendar weeks.
 
(c) Expense Reimbursement. The Executive is authorized to incur reasonable
expenses related to the performance of his duties under this Agreement in
accordance with budgets and guidelines established by the Company from time to
time or otherwise approved by the Chief Executive Officer of the Company.  The
Company shall promptly reimburse the Executive for all such documented expenses
in accordance with its expense reimbursement policy in effect from time to time.
 
(d) Special Bonus.  If both a Change in Control and a greater than $9,000,000
reduction in the amount of the Company’s outstanding promissory notes occur
after the Effective Date (collectively, the “Conditions”), then the Company
shall pay the Executive a special bonus (the “Special Bonus”).  The Special
Bonus shall be equal to the lesser of (i)(a) 1.5% multiplied by the amount the
Company’s outstanding promissory notes are reduced below the amount of such
notes in existence at the Effective Date, plus (b) 1.5% multiplied by the amount
of capital (whether in the form of equity and/or debt) received by the Company
within ninety (90) days after the Effective Date, unless such capital is used to
reduce the amount of the Company’s outstanding promissory notes in existence at
the Effective Date, and (ii) Fifty Thousand Dollars ($50,000).  The Company
shall pay the Special Bonus within ten (10) days after satisfaction of both of
the Conditions in accordance with its ordinary payroll practices.  The Special
Bonus shall only be paid once.  Debt forgiveness, conversion or exchange of
outstanding promissory notes into or for the Company’s equity securities shall
satisfy the Conditions.
 
(e) Taxes.  All payments and benefits provided to the Executive hereunder shall
be reported as taxable income to the extent required by law and shall be subject
to applicable income and payroll withholding taxes.
 
4. TERM AND TERMINATION.
 
(a) The term of this Agreement (the “Employment Period”) shall commence on
October 1, 2008, and continue unless terminated earlier in accordance with this
Paragraph 4.
 
(b) Termination Without Cause.  Either party hereto may terminate this Agreement
and the Executive’s employment for any reason at any time during the Employment
Period, effective upon ten (10) days prior written notice to the other
party.  In the event the Company terminates this Agreement and the Executive’s
employment without Cause (as hereinafter defined), the Company shall, subject to
Executive’s compliance with Sections 5, 6 and 7 hereof, the Executive’s
resignation from all positions (including any directorships) with the Company or
its Affiliates (as defined below) and the execution and delivery by the
Executive of a separation agreement and general release, in a form reasonably
acceptable to the Company, of all claims related to his employment or
termination thereof through and including the date Executive signs such release,
pay to the Executive (i) any unpaid Salary accrued as of the date of
termination, (ii) any earned but unused PTO prorated through the last full
calendar month of service, (iii) Salary at the annual rate in effect on the date
of termination for a period of six (6) months in installments in accordance with
the Company’s ordinary payroll practices, (iv) benefits at a monthly rate not to
exceed Nine Hundred Dollars ($900) for a period of six (6) months, and (v)
reimbursement of any outstanding business expenses for which Executive is
entitled to be reimbursed in accordance with this Agreement up to and including
the date of termination.  The Executive shall not be entitled to any further
payments or benefits from the Company or any of its Affiliates, except as
required by any federal or state law requiring continuation of benefits and
except as may be provided in any other written agreement with the Company.
 
(c) Termination for Cause.  The Company may terminate this Agreement and the
Executive’s employment for Cause (as hereinafter defined) at any time, effective
immediately upon giving the Executive written notice of such termination.  As
used herein, the term “Cause” shall mean any of the following events:
 
(i) the Executive’s conviction of or plea of guilty, nolo contendere, or no
contest to a misdemeanor involving moral turpitude or a felony which may result
in a term of imprisonment;
 
(ii) the Executive’s material breach of this Agreement or willful failure to
carry out the lawful directives of the Board consistent with Paragraph 2(a)
hereof (provided the Company has given the Employee advance written notice
specifying the nature of such breach or failure to carry out the lawful
directives of the Board and the Executive has not cured such breach within
thirty (30) days of having received such notice); or
 
(iii) the Executive’s (A) willful gross misconduct, including, without
limitation, dishonesty, fraud or theft, or (B) willful bad faith act or failure
to act that is in the sole discretion of the Board injurious to the business or
reputation of the Company.
 
In the event of termination for Cause, the Company shall pay to the Executive
(i) any unpaid Salary accrued as of the date of termination, and (ii)
reimbursement of any outstanding business expenses for which Executive is
entitled to be reimbursed in accordance with this Agreement up to and including
the date of termination.  The Executive shall not be entitled to any further
payments or benefits except as required by any federal or state law requiring
continuation of benefits and except as may be provided in any other written
agreement with the Company.
 
(d) Death.  If the Executive dies during the Employment Period, this Agreement
and the Executive’s employment shall terminate as of the date of his death.  The
Company shall pay to the Executive’s estate any unpaid Salary and the
Executive’s estate shall not be entitled to any further payments or benefits
from the Company or any of its Affiliates except as required by any federal or
state law requiring continuation of benefits and except as may be provided in
any other agreement with the Company.
 
(e) Disability.  If the Executive is incapacitated by accident, sickness or
otherwise so as to render him mentally or physically incapable of performing the
services required of him under this Agreement (referred to herein as a
“Disability”) for (i) a period of ninety (90) consecutive days or (ii) for an
aggregate of one hundred twenty (120) business days during any twelve (12) month
period, the Company may terminate this Agreement and the Executive’s employment
effective immediately after the expiration of either of such periods, upon
giving the Executive written notice of such termination.  Notwithstanding the
foregoing provision, if it is determined by the Company that the Executive has a
“disability” as defined under the Americans with Disabilities Act, the
Executive’s employment shall not be terminated on the basis of such disability
unless it is first determined by the Company, after consultation with the
Executive, that there is no reasonable accommodation which would permit the
Executive to perform the essential functions of his position without imposing an
undue hardship on the Company.
 
In the event the Executive is determined to have a Disability hereunder and
receives payments under any disability plan maintained by the Company for its
employees or under any other arrangement maintained by the Company for the
Executive or by the Executive, such payments shall reduce and offset any Salary
payable to the Executive pursuant to Paragraph 3 hereof, to extent permitted
under such plan or arrangement.  In the event of termination pursuant to this
Subparagraph 4(e), the Company shall pay to the Executive any unpaid Salary
accrued as of the date of termination and the Executive shall not be entitled to
any further payments or benefits from the Company or any of its Affiliates
except as required by any federal or state law requiring continuation of
benefits and except as may be provided in any other agreement with the Company.
 
5. NON-SOLICITATION.
 
(a) Non-Solicitation of Employees and Consultants.  The Executive hereby agrees
that during the Employment Period and for a period equal to six (6) months after
the Employment Period (the “Survival Period”), he shall not, directly or
indirectly through any other individual, person or entity, employ, solicit or
induce any individual, who is or was at any time during the last twelve (12)
months of the Executive’s employment by the Company, an employee or consultant
of the Company, to terminate or refrain from renewing or extending his or her
employment or relationship with the Company, or to become employed by or enter
into a contractual relationship with the Executive or any other individual,
person or entity.  For the purposes of Paragraphs 5, 6 and 7 of this Agreement
the term “Company” shall be deemed to include the Company and each of its
Affiliates.  For the purposes of this Agreement, the term “Affiliate” shall
mean, with respect to any person, any person directly or indirectly controlling,
controlled by, or under common control with, such other person at any time
during the period for which the determination of affiliation is being made.
 
(b) Non-Solicitation of Suppliers or Vendors.  The Executive hereby agrees that
during the Employment Period and the Survival Period he may not, directly or
indirectly through any other individual, person or entity, solicit, persuade or
induce any individual, person or entity which is, or at any time during the
Employment Period was, a supplier of any product or service to the Company, or
vendor of the Company (whether as a distributor, agent, commission agent,
employee or otherwise), to terminate, reduce or refrain from renewing or
extending his, her or its contractual or other relationship with the Company.
 
(c) Non-Solicitation of Customers.  The Executive hereby agrees that during the
Employment Period and the Survival Period he may not, directly or indirectly
through any other individual, person or entity, solicit, persuade or induce any
individual, person or entity which is, or at any time during the Employment
Period was, a customer of the Company to terminate, reduce or refrain from
renewing or extending its contractual or other relationship with the Company in
regard to the purchase of products or services manufactured, marketed or sold by
the Company, or to become a customer of or enter into any contractual or other
relationship with the Executive or any other individual, person or entity in
regard to the purchase of products or services similar or identical to those
manufactured, marketed or sold by the Company.
 
6. CONFIDENTIALITY.  The Executive agrees that, during the Employment Period and
thereafter, the Executive shall not divulge to anyone, other than as necessary
in the performance of his duties hereunder or as required by law or legal
process, confidential information of the Company, its Affiliates or its
customers, including, without limitation, know-how, trade secrets, customer
lists, costs, profits or margin information, markets, sales, pricing policies,
operational methods, plans for future development, data, drawings, samples,
processes or products and other information disclosed to the Executive or known
by him as a result of or through his employment by the Company, which is not
generally known in the businesses in which the Company is engaged and which
relates directly or indirectly to the Company’s products or services or which is
directly or indirectly useful in any aspect of the Company’s business.  In the
event the Company is bound by a confidentiality agreement with a customer,
supplier or other party regarding the confidential information of such customer,
supplier or other party, which provides greater protection than specified above
in this Paragraph 6, the provisions of such other confidentiality agreement
shall be binding upon the Executive and shall not be superseded by this
Paragraph 6.  Upon the termination of the Executive’s employment hereunder or at
any other time upon the Company’s request, the Executive shall deliver forthwith
to the Company all memoranda, notes, records, reports, computer disks and other
documents (including all copies thereof) containing such confidential
information.
 
7. NON-COMPETITION.  The Executive acknowledges that he has substantial
experience and expertise, that in the course of providing services to the
Company he will become familiar with the Company’s trade secrets and with other
confidential information concerning the Company and that Executive’s services
have been and will be of special, unique and extraordinary value to the
Company.  The Executive hereby agrees that during the Employment Period and the
Survival Period, the Executive shall not, directly or indirectly, anywhere in
the entire United States and Europe, own, manage, operate, control or
participate in the ownership, management, operation or control of, or be
connected as an officer, employee, partner, director, independent contractor or
in any other capacity with, or have any financial interest in, or aid or assist
anyone else in the manufacture, sale or representation of products or the
provision of services identical or similar to the products and services
manufactured, sold, represented or provided by the Company, and which products
or services are marketed to the same customer base as the products or services
offered by the Company, at any time during the Employment Period or the Survival
Period, or which are included in any business plans of the Company in existence
and under consideration during the Employment Period and of which Executive was
aware.
 
8. REASONABLE RESTRICTIONS.  The parties acknowledge that (i) the type and
periods of restriction imposed in this Agreement are fair and reasonable and are
reasonably required in order to protect and maintain the proprietary interests
of the Company described above, other legitimate business interests of Company
and the goodwill associated with the business of the Company, and (ii) that the
time, scope, geographic area and other provisions of this Agreement have been
specifically negotiated by sophisticated commercial parties, represented by
legal counsel, and are given as an integral part of the transactions
contemplated by this Agreement.  Accordingly, you agree not to contest the
validity or enforceability of any provision of this Agreement and agree that if
any court should hold any provision of this Agreement to be unenforceable, the
remaining provisions will nonetheless be enforceable according to their terms.
 
9. REMEDIES.  The Executive acknowledges and agrees that the Company’s remedy at
law for a breach or threatened breach of any of the provisions of Paragraphs 5,
6 or 7 of this Agreement would be inadequate and, in recognition of that fact,
in the event of a breach or threatened breach by the Executive of any of the
provisions of Paragraphs 5, 6 or 7 of this Agreement, it is agreed that in
addition to its remedy at law, the Company shall be entitled to appropriate
equitable relief in the form of specific performance, preliminary or permanent
injunction, temporary restraining order or any other appropriate equitable
remedy which may then be available.  Notwithstanding any provision of this
Agreement to the contrary, it is expressly understood and agreed that, although
the Executive and the Company consider the restrictions contained in Paragraphs
5, 6 and 7 to be reasonable for the purpose of preserving the Company’s goodwill
and other proprietary rights, if a final judicial determination is made by a
court having jurisdiction that the time and scope of the restrictions in such
Paragraphs is an unreasonable or otherwise unenforceable restriction against the
Executive, the provisions of such Paragraphs shall not be rendered void but
shall be deemed amended to apply as to the maximum time and scope permitted and
to such other extent as the court may determine to be
reasonable.  Notwithstanding the foregoing, in the event the Company breaches
any of its payment obligations under Section 4 of this Agreement (provided the
Executive has given the Company written notice specifying the nature of such
breach and a period of at least thirty (30) days to cure such breach),
Executives obligations under Sections 5 and 7 of this Agreement shall terminate
and be of no further force and effect after the expiration of such thirty (30)
day period if the Company has not cured such breach.
 
10. SECTION 409A COMPLIANCE.  All payments of “nonqualified deferred
compensation” (within the meaning of Section 409A of the Internal Revenue Code
of 1986, as amended (“Code”)) are intended to comply with the requirements of
Code Section 409A, and shall be interpreted in accordance therewith.  Neither
party individually or in combination may accelerate any such deferred payment,
except in compliance with Code Section 409A, and no amount shall be paid prior
to the earliest date on which it is permitted to be paid under Code Section
409A.  In the event that the Executive is determined to be a “key employee” (as
defined in Code Section 416(i) (without regard to paragraph (5) thereof)) of the
Company at a time when its stock is deemed to be publicly traded on an
established securities market, payments determined to be “nonqualified deferred
compensation” payable following termination of employment shall be made no
earlier than the earlier of (i) the last day of the sixth (6th) complete
calendar month following such termination of employment, or (ii) the Executive’s
death, consistent with the provisions of Code Section 409A.  Unless otherwise
expressly provided, any payment of compensation by Company to the Executive,
whether pursuant to this Agreement or otherwise, shall be made within two and
one-half months (2½ months) after the end of the calendar year in which the
Executive’s right to such payment vests (i.e., is not subject to a substantial
risk of forfeiture for purposes of Code Section 409A).  Notwithstanding anything
herein to the contrary, no amendment may be made to this Agreement if it would
cause the Agreement or any payment hereunder not to be in compliance with Code
Section 409A.
 
11. REPRESENTATION/WARRANTY.  The Executive represents and warrants that he is
not bound by the terms of a confidentiality agreement or non-competition
agreement or any other agreement with a former employer or other third party
which would preclude him from accepting employment by the Company or which would
preclude him from effectively performing his duties for the Company.  The
Company represents and warrants that it has all requisite corporate power and
authority to consummate the transactions contemplated by this Agreement and that
this Agreement is binding on the Company and enforceable against the Company in
accordance with its terms.
 
12. NOTICES.  Any notices or other communications required to be given pursuant
to this Agreement shall be in writing and shall be deemed given: (i) upon
delivery, if by hand; (ii) after two (2) business days if sent by express mail
or air courier; (iii) four (4) business days after being mailed (seven (7)
business days for international mailings), if sent by registered or certified
mail, postage prepaid, return receipt requested; or (iv) upon transmission, if
sent by facsimile (provided that a confirmation copy is sent in the manner
provided in clause (ii) or clause (iii) of this Paragraph 10 within thirty-six
(36) hours after such transmission), except that if notice is received by
facsimile after 5:00 p.m. on a business day at the place of receipt, it shall be
effective as of the following business day.  All communications hereunder shall
be delivered to the respective parties at the following addresses:
 
If to the Company:
 
a21, Inc.
 
7660 Centurion Parkway
 
Jacksonville, Florida  32256
 
Attention: Chairman of Compensation Committee, Board of Directors
 
with a copy to:
 
Loeb & Loeb LLP
 
345 Park Avenue
 
New York, New York 10154
 
Attention: Lloyd L. Rothenberg, Esq.
 
If to the Executive:
 
R. LaDuane Clifton
 
At his residential address on
 
file at the corporate office of a21, Inc.
 
or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above.
 
13. GOVERNING LAW/JURISDICTION.  This Agreement shall be governed by and
construed in accordance with the law of the State of New York, regardless of the
law that might otherwise govern under applicable principles of conflicts of laws
thereof.  The parties hereto hereby irrevocably consent to the exclusive
jurisdiction of the state or federal courts sitting in New York County, State of
New York, in connection with any controversy or claim arising out of or relating
to this Agreement, or the negotiation or breach thereof, and hereby waive any
claim or defense that such forum is inconvenient or otherwise improper.  Each
party hereby agrees that any such court shall have in personam jurisdiction over
it and consents to service of process in any matter authorized by New York law.
 
14. SEVERABILITY.  Whenever possible, each provision or portion of any provision
of this Agreement shall be interpreted in such manner as to be effective and
valid under applicable law, but if any provision or portion of any provision of
this Agreement is found to be invalid or unenforceable in any respect under any
applicable law or rule in any jurisdiction, such finding or construction shall
not affect the remainder of the provisions of this Agreement, which shall be
given full force and effect without regard to the invalid or unenforceable
provision, and such invalid or unenforceable provision shall be modified
automatically to the least extent possible in order to render such provision
valid and enforceable, but only if the provision as so modified remains
consistent with the parties’ original intent.
 
15. WAIVER OF BREACH.  The waiver by either party hereto of a breach of any
provision of this Agreement by the other party shall not operate or be construed
as a waiver of any subsequent breach.
 
16. SUCCESSORS AND ASSIGNS.  This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective heirs,
successors, representatives and assigns.  This Agreement is assignable to any
legal successor of the Company.  This Agreement may not be assigned by the
Executive.
 
17. ENTIRE AGREEMENT.  This Agreement constitutes the entire understanding and
agreement between the Company and the Executive with regard to all matters
contained herein and incorporates and supersedes all prior agreements by and
between the Executive and the Company, between the parties concerning the
employment of the Executive by the Company.  There are no other agreements,
conditions or representations, oral or written, express or implied, with regard
thereto.  This Agreement may be amended only in a writing signed by both
parties.
 
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date set
forth above.
a21, INC.
EXECUTIVE
By:                                                                
 
Name:
R. LaDuane Clifton
Title: