--------------------------------------------------------------------------------

 
Exhibit 10.2

 
EMPLOYMENT AGREEMENT
 
 
            This Employment Agreement (this “Agreement”) is effective as of the
21st day of June, 2005 (the “Effective Date”), between Summus, Inc., a Delaware
corporation (the “Company”), and Andrew L. Fox (the “Executive”).
 
 
RECITALS:
 
 
            WHEREAS, the Company desires to employ Executive, and Executive
desires to be employed by the Company, on the terms and subject to the
conditions set forth herein;
 
WHEREAS, the Company has previously entered into an employment agreement with
the Executive dated July 28, 2004 (the “Existing Employment Agreement”); and
 
WHEREAS, the Company and the Executive desire to cancel the Existing Employment
Agreement with the Executive as of the Effective Date of this Agreement and
replace it in its entirety with this Agreement.
 
            NOW, THEREFOR, in consideration of the mutual premises herein
contained, the parties agree as follows:
 
            1.         Employment; Cancellation of Existing Employment
Agreement.  The Company hereby employs Executive as Executive Vice President -
Business Development and Sales, and Executive hereby accepts such employment, on
the terms and subject to the conditions hereinafter set forth. As of the
Effective Date of this Agreement, the Existing Employment Agreement shall be
cancelled, void and of no effect. 
 
            2.         Duties of Executive.
 
                        2.1       Executive shall report directly to the Chief
Executive Officer, and shall perform such duties consistent with his position as
Executive Vice President - Business Development and Sales pursuant to the
direction of the Chief Executive Officer.
 
                        2.2       Executive shall be required to devote his full
business time, attention and effort to the Company’s business and affairs except
for vacation time and reasonable periods of absence due to sickness, personal
injury or other disability and shall perform diligently such duties as are
customarily performed by executives in similar positions with companies similar
in character or size to the Company, all subject to the direction of the Board,
together with such other duties as may be reasonably requested from time to time
by the Board, which duties shall be consistent with his positions as set forth
above.  Executive agrees to use all of his skills and business judgment and
render services to the best of his ability to serve the interests of the
Company.  Subject to the terms of Section 8 hereof, this shall not preclude
Executive from serving on community and civic boards, participating in industry
associations, pursuing his personal financial and legal affairs or otherwise
engaging in other activities, so long as such activities do not unreasonably
interfere with his duties to the Company.
 

 
 

--------------------------------------------------------------------------------

 

 
            3.         Support Services.  Executive shall be entitled to all the
administrative, operational and facility support customary to a similarly
situated executive.  This support shall include, without limitation, a suitably
appointed private office, and payment of or reimbursement for reasonable
cellular telephone expenses, travel and entertainment expenses, reasonable
expenses of Executive maintaining his professional license and standing and any
and all other business expenses reasonably incurred on behalf of or in the
course of performing duties for the Company, all in accordance with the expense
reimbursement policies established from time to time by the Company.  Executive
agrees to provide documentation of these expenses as may be reasonably
required. 
 
            4.         Term. Unless earlier terminated as provided herein, the
Executive’s employment shall be for a continuing term (the “Term”) of one year
from the Effective Date of this Agreement which shall be automatically extended
(without further action of the Company, the Board of Directors or the
Compensation Committee) each day for an additional day so that the remaining
term shall continue to be one (1) year; provided that either party may at any
time, by written notice to the other party, fix the Term to a finite term of one
year, without automatic extension, commencing with the date of such notice.
 
            5.         Compensation.  Throughout the Term, the Company shall pay
or provide, as the case may be, to Executive the compensation and other benefits
and rights set forth in this Section 5.
 
                        5.1       Base Salary.  The  Company shall pay to
Executive a base salary (“Base Salary”), payable in accordance with the
Company’s usual pay practices (and in any event no less frequently than
monthly), of $120,000 per annum.  The Compensation Committee shall annually
review Executive’s Base Salary in light of the base salaries paid to other
executive officers of the Company and the performance of Executive, and the
Compensation Committee may, in its discretion, increase such Base Salary by an
amount it determines is appropriate. Notwithstanding any other provisions in
this Agreement, Executive’s Base Salary shall automatically be increased to
$140,000 once the Company achieves positive cash flow for a fiscal quarter.
 
Once Executive’s Base Salary is increased, it shall not thereafter be reduced
for any reason.
 
                        5.2      Bonuses and Commissions. 
 
(a)      The Executive shall also receive from the Effective Date of this
Agreement:
 
(1)      a commission bonus of $10,000 for each transaction brought to Summus by
Executive that the Company receives a gross profit of $250,000 from. No funds
under this provision of Executive’s employment agreement shall be payable until
a gross profit of $250,000 is received by the Company from each such respective
transaction.

 
2

--------------------------------------------------------------------------------

 

(2)      a commission bonus of three percent (3%) of the gross profit received
by Summus from all transactions brought to the Company by Executive and a
commission bonus of one percent (1%) of the gross profit received by the Company
from all other transactions of the Company brought by personnel under
Executive’s supervision. No funds under this provision of Executive’s employment
agreement shall be payable to him until funds are received by Summus. Executive
shall receive the commission bonus on the transactions as set forth in this
Section 5.2 (b)(2) for a period of eighteen (18) months from the launch of each
such product related to these transactions arranged by him or by personnel under
Executive’s supervision, as the case may be. After such eighteen (18) month
period has expired, the commission bonus pursuant to this Section 5.2 (b)(2)
shall expire and no longer be payable to Executive. Any funds payable to
Executive pursuant to this Section 5.2(b)(2) shall be net of any bonuses earned
by Executive pursuant to Section 5.2(b)(1) of this Agreement.

For purposes of all of Executive’s commission calculations “gross profit” is
equal to revenue received by the Company from such transaction or transactions
minus the direct costs and any and all partnership costs associated with such
revenues in accordance with generally accepted accounting principles (GAAP).
 
(b)      The Company may consider the Executive for a cash bonus for each fiscal
year, or part thereof that he is employed by the Company, in an amount to be
determined at the discretion of the Board.
 
(c)      Any cash bonus earned by the Executive pursuant to the provisions of
this Section 5.2 or any other provision of this Agreement shall not be paid to
the Executive unless and until the Company has achieved a cash flow positive
position, which will be certified to the Board of Directors by an executive
officer of the Company.
 
5.3      Option Grants. The Company shall grant to the Executive options to
purchase 200,000 shares of the Company’s common stock on the terms as set forth
in the Stock Option Agreement attached to this Agreement as Appendix A, which is
incorporated into this Agreement for all purposes.
 
All options and/or warrants previously granted to the Executive in lieu of cash
compensation forgone by the Executive shall be amended to have a life of ten
(10) years from the date of each such respective grant while Executive is
employed by the Company or a life of three years from the date of termination of
the Executive’s employment.
 
                        5.4       Insurance.  The Company shall provide medical,
vision, hospitalization, disability and dental insurance for Executive, his
spouse and eligible family members, subject to and in accordance with the
Company’s policy, the proportion of the cost thereof to be borne by the Company
and Executive to be in accordance with such policy.
 

 
3

--------------------------------------------------------------------------------

 
 
 
                        5.5       Employee Benefit Plans.  Executive shall be
eligible to participate in all retirement and other benefit plans of the Company
generally available from time to time to employees of the Company and for which
Executive qualifies under the terms thereof (and nothing in this Agreement
shall, or shall be deemed to, in any way affect Executive’s rights and benefits
thereunder except as expressly provided herein).
 
                        5.6       Other Benefit Plans.  Executive shall be
entitled to participate in any equity or other employee benefit plan that is
generally available to senior executive officers, as distinguished from general
management, of the Company, at the highest level provided for any employee. 
Executive’s participation in and benefits under any such plan shall be on the
terms and subject to the conditions specified in the governing document of the
particular plan.   
 
                        5.7       Vacation.  Executive shall be entitled to
Twenty (20) days of vacation allowance each year, which shall accrue at the rate
of five (5) days per calendar quarter, but may be used in advance of accrual. 
Vacation days not used in one calendar year shall carry over to the following
calendar year(s) up to a maximum of ten days. Executive shall also be entitled
to a sick leave allowance as provided under the Company’s vacation and sick
leave policy for executive officers.
 
6.         Permanent Disability.
 
                        6.1       For purposes of this Agreement, Executive’s
“Permanent Disability” shall be deemed to have occurred one day after one
hundred eighty (180) days in the aggregate during any consecutive twelve (12)
month period, or one day after one hundred twenty consecutive days, during which
the 180 or 120 day period, as the case may be, Executive, by reason of his
physical or mental disability or illness, shall have been unable to discharge
fully his duties under this Agreement.
 
                        6.2       If either the Company or Executive, after
receipt of notice of Executive’s Permanent Disability from the other, disputes
that Executive’s Permanent Disability shall have occurred, Executive shall
promptly submit to a physical examination by a physician at any major accredited
hospital and, unless such physician shall issue his written statement to the
effect that, in his opinion, based on his diagnosis, Executive is capable of
resuming his employment and devoting his full time and energy to discharging
fully his duties hereunder within thirty (30) days after the date of such
statement, such Permanent Disability shall be deemed to have occurred on the day
above specified.
 
 
  
 

 
4

--------------------------------------------------------------------------------

 

 
7.         Termination.
 
                        7.1       Bases for Termination.  Executive’s employment
under this Agreement and the Term shall be terminated immediately on the death
of Executive and may be terminated by the Board:
 
(a)        at any time after the Permanent Disability of Executive
 
(b)        at any time without Cause prior to a Change of Control;
 
(c)        at any time without Cause upon a Change of Control; or
 
(d)        at any time for “Cause” (as defined in Section 7.8 hereof);
 
                        7.2       Termination by Death.  If Executive’s
employment is terminated by death, Executive’s estate or designated
beneficiaries shall be entitled to receive:
 
(a)        any accrued but unpaid salary;
 
(b)        a cash lump sum payment in respect of accrued but unused vacation
days pursuant to the terms of this Agreement;   
 
(c)        life insurance benefits pursuant to any life insurance policy
purchased by the Company on the Executive;  
 
(d)        a cash lump sum payment equal to his then-current Base Salary under
Section 5.1 hereof payable within ten (10) days of Executive’s termination;
 
(e)        acceleration of the vesting of one hundred percent (100%) of the
unvested portion of all of Executive’s stock options or other stock-based
awards, together with the right to exercise such stock options or awards for a
period equal to the remaining term for exercising such options or awards under
the applicable agreement and/or plan; and;
 
(f)        reimbursement for all expenses incurred by Executive pursuant to
Section 3 hereof. 
 
7.3       Termination for Permanent Disability.  If Executive’s employment is
terminated by the Company for Permanent Disability, Executive shall be entitled
to receive:
 
(a)        his then current Base Salary under Section 5.1 hereof, payable at
such times as his Base Salary would have been paid if his employment had not
been terminated for a period of six (6) months, minus any amounts payable under
any short-term disability insurance policy provided by the Company.
 

 
5

--------------------------------------------------------------------------------

 

 
(b)        continuation of the insurance provided by the Company pursuant to
Section 5.4 for 12 months;
 
(c)        a cash lump sum payment equal to his then-current Base Salary under
Section 5.1 hereof payable within ten (10) days of Executive’s termination;
 
(d)        acceleration of the vesting of one hundred percent (100%) of the
unvested portion of all of Executive’s stock options or other stock-based
awards, together with the right to exercise such stock options or awards for a
period equal to the remaining term for exercising such options or awards under
the applicable agreement and/or plan; and
 
(e)        reimbursement for all expenses incurred by Executive pursuant to
Section 3 prior to his termination.
 
                        7.4       Termination by the Company without Cause prior
to a Change of Control.  If Executive’s employment is terminated by the Company
without Cause (as defined in Section 7.8(a)) prior to a Change of Control ,
Executive shall be entitled to receive:
 
(a)        accrued but unpaid Base Salary to the date of such termination;
 
(b)        a cash lump sum payment in respect of accrued but unused vacation
days pursuant to the terms of this Agreement;
 
(c)        a cash lump sum payment equal to his then-current Base Salary under
Section 5.1 hereof payable within ten (10) days of Executive’s termination;
 
(d)        acceleration of the vesting of one hundred percent (100%) of the
unvested portion of Executive’s stock options or other stock-based awards,
together with the right to exercise such stock options or awards for a period
equal to the remaining term for exercising such options or awards under the
applicable agreement and/or plan;
 
(e)        continuation of the insurance provided by the Company pursuant to
Section 5.4 for 12 months; and
 
(f)        reimbursement for all expenses incurred by Executive pursuant to
Section 3 prior to his termination.
 
             7.5       Termination by the Company without Cause Upon a Change of
Control or by Executive for Good Reason at Any Time.  If Executive’s employment
is terminated by the Company without Cause (as defined in Section 7.8(a)) upon a
Change of Control (as defined in Section 7.8 (c)) or by Executive for Good
Reason (as defined in Section 7.8(e)) at any time, Executive shall be entitled
to receive:
 

 
6

--------------------------------------------------------------------------------

 

 
(a)        accrued but unpaid Base Salary to the date of such termination;
 
(b)        a cash lump sum payment in respect of accrued but unused vacation
days;
 
(c)        a cash lump sum payment of up two (2) times his then-current Base
Salary under Section 5.1 hereof based on the greater of the closing price of the
Company’s common stock on the date of the Change of Control or the date of
termination pursuant to this Section 7.5. The Executive shall receive the
multiple of his Base Salary as set forth below based on such closing common
stock price. This amount shall be paid within ten (10) days of Executive’s date
of termination
 
Multiple of Base Salary
Closing Stock Price at Date of
Change of Control or Date of
Termination
1.00 times Base Salary
$3.50 or lower
1.25 times Base Salary
$4.00
1.50 times Base Salary
$4.50
1.75 times Base Salary
$5.00
2.00 times Base Salary
$5.50

 
(d)        acceleration of the vesting of one hundred percent (100%) of the
unvested portion of Executive’s stock options or other stock-based awards,
together with the right to exercise such stock options or awards for a period
equal to the remaining term for exercising such options or awards under the
applicable agreement and/or plan;
 
(e)        continuation of the insurance provided by the Company pursuant to
Section 5.4 for the longer of 12 months; and
 
(f)        reimbursement for all expenses incurred by Executive pursuant to
Section 3 prior to his termination.
 
             7.6       Termination by the Company for Cause or by Executive
without Good Reason upon a Change of Control.  If Executive’s employment is
terminated by the Company for Cause or by Executive without Good Reason upon a
Change of Control (other than as a result of Executive’s Permanent Disability or
Death), the Company shall not have any other or further obligations to Executive
under this Agreement, except
 
(a)        as may be provided in accordance with the terms of retirement and
other benefit plans pursuant to Sections 5.5 and 5.6 hereof;
 
(b)        as to that portion of any unpaid Base Salary and other benefits
accrued and earned under this Agreement through the date of such termination;
 

 
7

--------------------------------------------------------------------------------

 

 
(c)        all stock option grants that have vested as of the Executive’s date
of termination pursuant to this Section 7.6 for the remainder of the term of
such option grants;
 
(d)        as to benefits, if any, provided by any insurance policies in
accordance with their terms; and
 
(e)        reimbursement for all expenses incurred by Executive pursuant to
Section 3 prior to his termination). 
 
In addition, if Executive’s employment is terminated by the Company for Cause at
any time during the Term, Executive shall immediately forfeit any and all
unvested stock rights, stock options and other such unvested incentives or
awards previously granted to him by the Company and any and all Bonuses earned
but not paid pursuant to Section 5.2.  The foregoing sentence shall be in
addition to, and not in lieu of, any and all other rights and remedies which may
be available to the Company under the circumstances, whether at law or in
equity. 
 
                        7.7       Termination Upon Cessation of Business.  The
Company shall have the right to immediately terminate Executive’s employment
under this Agreement upon a Cessation of Business (as defined in Section
7.8(b)).  Upon termination in connection with a Cessation of Business, the
Company shall pay to Executive any accrued but unpaid Base Salary until the date
of Cessation of Business. The Company may make such payments in accordance with
its regular payroll schedule or in a single lump sum payment in its sole
discretion.
 
                        7.8       Definitions.  As used herein:
 
(a)        “Cause” shall mean:
 
(1)        active participation by Executive in fraudulent conduct against the
Company, conviction of or a plea of guilty or nolo contendere with respect to a
felony involving theft or moral turpitude, an act or series of deliberate acts
which were not taken in good faith by Executive and which, in the reasonable
judgment of the Board, results or will likely result in material injury to the
business, operations or business reputation of the Company, or an act or series
of acts constituting willful malfeasance or gross misconduct;
 
(2)        a substantial and continual refusal by Executive in breach of this
Agreement to perform the duties, responsibilities or obligations assigned to
Executive pursuant to the terms hereof, which breach has not been cured (if it
is of a nature that can be cured) to the Board’s reasonable satisfaction within
ten (10) days after the Company gives written notice thereof to Executive; or
 
(3)        excessive absenteeism by Executive; provided that absenteeism (i)
related to illness or otherwise covered by Section 6 hereof, (ii) required to be
permitted under applicable federal or state laws, or (iii) permitted under
Company policy, shall not be deemed to be excessive.
 

 
8

--------------------------------------------------------------------------------

 
 
 
 
            Executive shall be permitted to respond and defend himself before
the Board within thirty (30) days after delivery to Executive of written
notification of any proposed termination for Cause which specifies in detail the
reasons for such termination.  If the majority of the members of the Board
(excluding Executive) do not confirm that the Company had grounds for a “Cause”
termination, Executive shall have the option to treat his employment as not
having terminated or as having been terminated pursuant to a termination without
Cause.
 
(b)        “Cessation of Business” shall mean the Company’s ceasing to operate
in the ordinary course of business, whether by dissolution, liquidation, in
connection with a good faith determination by the Board that the continuing
operation of the business in its ordinary course is reasonably likely to render
the Company unable to meet its liabilities as they mature.
 
(c)        A “Change in Control” shall occur if:
 
(1)        there shall be consummated any consolidation or merger of the Company
in which the Company is not the continuing or surviving corporation;
 
(2)        any Person (as defined in Section 2(a)(2) of the Securities Act of
1933, as amended) other than the Company, is or becomes the beneficial owner,
directly or indirectly (including by holding securities which are exercisable
for or convertible into shares of capital stock of the Company) of forty percent
(40%) or more of the combined voting power of the then outstanding shares of
capital stock of the Company entitled to vote generally in the election of
directors;
 
(3)        the Company sells, leases, exchanges or otherwise transfers all or
substantially all of its property and assets (in a transaction or series of
transactions contemplated or arranged by any party as a single plan);
 
(4)        Continuing Directors cease to constitute at least a majority of the
Board; or
 
(5)        a majority of the Outside Directors determine that a Change in
Control has occurred.
 
(d)        “Continuing Directors” shall mean the members of the Board in office
on July 16, 2004, and any successor to any such director whose nomination or
selection was approved by a majority of the directors in office at the time of
the director’s nomination or selection.
 
 
                         (e)        “Good Reason” means a termination of
Executive’s employment by Executive within ninety (90) days following:
 

 
9

--------------------------------------------------------------------------------

 

 
(1)        a reduction in Executive’s Base Salary or incentive compensation or
equity participation opportunity;
 
(2)        a material reduction in Executive’s position(s), duties and
responsibilities or reporting lines from those described in Section 2 hereof;
 
(3)        a change in the location of the Company’s headquarters or of the
office of Executive from the Raleigh-Durham metropolitan area;
 
(4)        a material breach of this Agreement by the Company if such breach is
not cured within 15 days of written notice thereof by Executive to the Company;
or
 
(5)        any failure by the Company to obtain from any successor to the
Company an agreement reasonably satisfactory to Executive to assume and perform
this Agreement, as contemplated by Section 11.3 hereof. 
 
            Notwithstanding the foregoing, a termination shall not be treated as
a termination for Good Reason (A) if Executive shall have consented in writing
to the occurrence of the event giving rise to the claim of termination for Good
Reason, or (B) unless Executive shall have delivered a written notice to the
Board within thirty (30) days of his having actual knowledge of the occurrence
of one of such events stating that he intends to terminate his employment for
Good Reason and specifying the factual basis for such termination, and such
event, if capable of being cured, shall not have been cured within ten (10) days
of the receipt of such notice.
 
(f)         “Outside Director” means a member of the Board who is not, and who
during the past six months was not, an employee of officer of the Company.
 
(g)        “Termination Upon a Change in Control” means:
 
(1)        a termination by Executive for Good Reason within one year following
a Change in Control;
 
(2)        declination by Executive of an offer of employment from the Company
or the Company’s successor, for Good Reason at or in anticipation of a Change in
Control, if Executive would not have been permitted to retain Executive’s
existing position; or
 
(3)        termination of Executive’s employment by the Company or the Company’s
successor within one year following a Change in Control other than a termination
for Cause or a termination resulting from Executive’s death or Permanent
Disability.
 

 
10

--------------------------------------------------------------------------------

 

 
                        7.9       Mitigation of Damages.  Executive is not
required to mitigate the amount of any payments to be made by the Company
pursuant to this Agreement following his termination by seeking other employment
or otherwise.  In addition, the amount of any post-termination payments provided
for in this Agreement shall, except as otherwise expressly provided herein, not
be reduced by any remuneration earned by Executive during the period following
the termination of his employment as a result of employment by another employer
or otherwise after the date of termination of his employment with the Company.
 
8.         Covenants and Confidential Information. 
 
                        8.1       Restrictive Covenants.  Executive acknowledges
the Company’s reliance on and expectation of Executive’s continued commitment to
performance of his duties and responsibilities during the term.  In light of
such reliance and expectation on the part of the Company, during the applicable
period hereafter specified in Section 8.2, Executive shall not
 
(a)        directly or indirectly, do or suffer any of the following;
 
(1)        own, manage, control or participate in the ownership, management or
control of, or be employed or engaged by or otherwise affiliated or associated
as a consultant, independent contractor or otherwise with, any other
corporation, partnership, proprietorship, firm, association or other business
entity engaged in the business of, or otherwise engage in the business of,
information processing of multimedia over mobile and wireless networks  within
the United States in competition with the Company; provided, however, that the
beneficial and/or record ownership of not more than 4.9% of any class of
publicly traded securities of any entity shall not be deemed a violation of this
covenant;
 
(2)        solicit any business or contracts from any customers of the Company
or its affiliates, any past customers of the Company or its affiliates, or any
prospective customers of the Company or its affiliates (i.e., potential
customers from which the Company or its affiliates has solicited business at any
time during the one year period preceding the expiration or termination of the
Term), except as necessitated by Executive’s position with the Company and then
only in furtherance of the business interests of the Company or its affiliates;
 
(3)        induce or attempt to induce any such customer to alter its business
relationship with the Company or its affiliates except as necessitated by
Executive’s position with the Company and then only in furtherance of the
business interests of the Company or its affiliates;
 
(4)        solicit or induce or attempt to solicit or induce any employee of the
Company or its affiliates to leave the employ of the Company or any of its
affiliates for any reason whatsoever or hire any employee or any person who was
an employee of the Company or its affiliates within the twelve (12) month period
prior to such hiring; or             
 

 
11

--------------------------------------------------------------------------------

 
 
 
                          (b)        disclose, divulge, discuss, copy or
otherwise use or suffer to be used in any manner, other than in accordance with
Executive’s duties hereunder, any confidential or proprietary information
relating to the Company’s business, prospects, finances, operations or
properties or other trade secrets of the Company, it being acknowledged by
Executive that all such information regarding the business of the Company
compiled or obtained by, or furnished to, Executive while Executive shall have
been employed by or associated with the Company is confidential and/or
proprietary information and the Company’s exclusive property; provided, however,
that the foregoing restrictions shall not apply to the extent that such
information: (A) is clearly obtainable in the public domain; (B) becomes
obtainable in the public domain, except by reason of the breach by Executive of
the terms hereof or by another person barred by a similar duty of
confidentiality; or (C) is required to be disclosed by rule of law or by order
of a court or governmental body or agency.
 
                        8.2       Applicable Periods.  The applicable periods
shall be:
 
(a)        so long as Executive is an employee of the Company;
 
(b)        as to Section 8.1(b), at any time after Executive is no longer an
employee of the Company; and
 
(c)        for a period of 6 months after termination of employment.
 
                        8.3       Injunctive Relief.  Executive agrees and
understands that the remedy at law for any breach by him of this Section 8 will
be inadequate and that the damages flowing from such breach are not readily
susceptible to being measured in monetary terms.  Accordingly, it is
acknowledged that the Company shall be entitled to immediate injunctive relief
and may obtain a temporary order restraining any threatened or further breach. 
Nothing in this Section 8 shall be deemed to limit the Company’s remedies at law
or in equity for any breach by Executive of any of the provisions of this
Section 8 which may be pursued or availed of by the Company.
 
                        8.4       Acknowledgment by Executive.  Executive has
carefully considered the nature and extent of the restrictions upon him and the
rights and remedies conferred upon the Company under this Section 8, and hereby
acknowledges and agrees that the same are reasonable in time and territory, are
designed to eliminate competition which otherwise would be unfair to the
Company, do not stifle the inherent skill and experience of Executive, would not
operate as a bar to Executive’s sole means of support, are fully required to
protect the legitimate interests of the Company, and do not confer a benefit
upon the Company disproportionate to the detriment of Executive.
 
                        8.5       Survival.  Executive acknowledges that
Executive’s obligations under this Section 8 shall survive in accordance with
Section 8.2 hereof regardless of whether Executive’s employment by the Company
is terminated, voluntarily or involuntarily, by the Company or Executive, with
Cause or without Cause, or the Executive with or without Good Reason.
 

 
12

--------------------------------------------------------------------------------

 

 
 
          9.         Proprietary Rights.
 
                        9.1       At all times during the Term, all right, title
and interest in all copyrightable material which Executive shall conceive or
originate, either individually or jointly with others, and which arise out of
the performance of this Agreement, will be the property of the Company and are
by this Agreement assigned to the Company along with ownership of any and all
copyrights in the copyrightable material.  At all times during the Term,
Executive agrees to execute all papers and perform all other acts necessary to
assist the Company to obtain and register copyrights on such materials in any
and all countries, and the Company agrees to pay expenses associated with such
copyright registration.  Works of authorship created by Executive for the
Company in performing his responsibilities under this Agreement shall be
considered “works made for hire” as defined in the U.S. Copyright Act.  In
addition, Executive hereby assignees to the Company all proprietary rights,
including but not limited to, all patents, copyrights, trade secrets and
trademarks Executive might otherwise have, by operation of law or otherwise, in
all inventions, discoveries, works, ideas, information, knowledge and data
related to Executive’s access to confidential information of the Company during
the Term.
 
                        9.2       All know-how and trade secret information
conceived or originated by Executive which arises out of the performance of his
obligations or responsibilities under this Agreement during the Term shall be
the property of the Company, and all rights therein are by this Agreement
assigned to the Company.
 
                        9.3       If, during the term, Executive is engaged in
or associated with the planning or implementing of any project, program or
venture involving the Company and a third party or parties, all rights in such
project, program or venture shall belong to the Company.  Except as formally
approved by the Board, Executive shall not be entitled to any interest in such
project, program or venture or to any commission, finder’s fee or other
compensation in connection therewith other than the compensation to be paid to
Executive as provided in this Agreement.
 
                        9.4       Upon termination of the Term, Executive shall
deliver promptly to the Company all records, manuals, books, documents, letters,
memoranda, notes, notebooks, reports, data, tables, calculations, customer and
prospective customer lists, and copies of all of the foregoing, which are the
property of the Company, and all other property, trade secrets and confidential
information of the Company, including, but not limited to, all documents which
in whole or in part contain any trade secrets or confidential information of the
Company, which in any of these cases are in his possession or under his control.
 
                        9.5       The obligations of Executive under this
Section 9 shall survive the termination or expiration of the Term.
 

 
13

--------------------------------------------------------------------------------

 

 
 
            10.       Indemnification.  During the Term, the Company shall
indemnify Executive and hold Executive harmless from and against any claim, loss
or cause of action arising from or out of Executive’s performance as an officer,
director or employee of the Company or any of its subsidiaries or in any other
capacity, including any fiduciary capacity, in which Executive serves at the
request of the Company to the maximum extent permitted by applicable law.  If
any claim is asserted hereunder with respect to which Executive reasonably
believes in good faith he is entitled to indemnification, the Company shall pay
Executive’s legal expenses (or cause such expenses to be paid), on a monthly
basis, provided that Executive shall reimburse the Company for such amounts if
Executive shall be found by a court of competent jurisdiction not to have been
entitled to indemnification.  In addition, the Company agrees to provide
Executive with coverage under a directors and officers liability insurance
policy.
 
            11.       Miscellaneous.
 
                        11.1     Representation and Warranty by Executive. 
Executive represents and warrants that he is not a party to any agreement,
contract or understanding, whether employment or otherwise, which would restrict
or prohibit him from undertaking or performing employment in accordance with the
terms and conditions of this Agreement.
 
                        11.2     Severability.  The provisions of this Agreement
are severable and if any one or more provisions may be determined to be illegal
or otherwise unenforceable, in whole or in part, the remaining provisions and
any partially unenforceable provision, to the extent enforceable in any
jurisdiction, nevertheless shall be binding and enforceable.
 
                        11.3     Assignment.  This Agreement shall be binding
upon and inure to the benefit of the heirs and representatives of Executive and
the assigns and successors of the Company, but neither this Agreement nor any
rights or obligations hereunder shall be assignable or otherwise subject to
hypothecation by Executive (except by will or by operation of the laws of
intestate succession) or by the Company, except that the Company may assign this
Agreement to any successor (whether by merger, purchase or otherwise) to all or
substantially all of the stock, assets or business of the Company, and the
Company shall require such successor to expressly agree to assume the
obligations of the Company hereunder.
 
                        11.4     Dispute Resolution.  Any controversy or claim
arising out of or relating to this Agreement, or the breach thereof, shall be
settled by mediation, and if not settled within 14 days of the submission to
meditation, by arbitration in accordance with the Arbitration Rules of the
American Arbitration Association, and the arbitration shall be held in the
Raleigh, North Carolina area.  The arbitrator shall be acceptable to both the
Company and Executive.  If the parties cannot agree on an acceptable arbitrator,
the dispute shall be heard by a panel of three (3) arbitrators, one appointed by
each of the parties and the third appointed by the other two arbitrators. 
Judgment upon the award
 

 
14

--------------------------------------------------------------------------------

 

 
rendered by the arbitrator or arbitrators may be entered in any court having
jurisdiction thereof.  The arbitrator or arbitrators shall be deemed to possess
the power to issue mandatory orders and restraining orders in connection with
such arbitration; provided, however, that nothing in this Section 11.4 shall be
construed so as to deny the Company the right and power to seek and obtain
injunctive relief in a court of equity for any breach or threatened breach by
Executive of his covenants contained in Section 8 hereof.  All costs and
expenses of arbitration shall be paid one-half by the Company and one-half by
Executive.
                        11.5     Notices.  All notices and other communications
required or permitted under this Agreement shall be in writing, and shall be
deemed properly given if delivered personally, mailed by registered or certified
mail in the United States mail, postage prepaid, return receipt requested, send
by facsimile or sent by Express Mail, Federal Express or other nationally
recognized express delivery service, as follows:
 
If to Summus:
If to Executive:
   
434 Fayetteville Street
112 Silo Drive
Suite 600
Chapel Hill, NC 27514
Raleigh, North Carolina 2760
 
Attn: Chief Executive Officer
 

 
            Notice given by hand, certified or registered mail, or by Express
Mail, Federal Express or other such express delivery service, shall be effective
upon receipt.  Notice given by facsimile transmission shall be effective upon
actual receipt if received during the recipient’s normal business hours, or at
the beginning of the recipient’s next business day after receipt if not received
during the recipient’s normal business hours.  All notices by facsimile
transmission shall be confirmed promptly after transmission in writing by
certified mail or personal delivery.
 
            Any party may change any address to which notice is to be given to
it by giving notice as provided above of such change of address.
 
                        11.6     Amendment.  This Agreement may only be amended
by written agreement of the parties hereto.
 
                        11.7     Beneficiaries; References.  Executive shall be
entitled to select (and change, to the extent permitted under applicable law) a
beneficiary or beneficiaries to receive any compensation or benefit payable
hereunder following Executive’s death, and may change such election, in either
case by giving the Company written notice thereof.  In the event of Executive’s
death or a judicial determination of his incompetence, reference in this
Agreement to Executive shall be deemed, where appropriate, to refer to his
beneficiary, estate or other legal representative.  Any reference to the
masculine gender in this Agreement shall include, where appropriate, the
feminine.
 

 
15

--------------------------------------------------------------------------------

 

 
                        11.8     Survivorship.  The respective rights and
obligations of the parties hereunder shall survive any termination of this
Agreement to the extent necessary to the intended preservation of such rights
and obligations.  The provisions of this Section are in addition to the
survivorship provisions of any other section of this Agreement.
 
                        11.9     Governing law.  This Agreement shall be
construed, interpreted and governed in accordance with the laws of the State of
North Carolina without reference to rules relating to conflicts of law.  For
purposes of jurisdiction and venue, the Company hereby consents to jurisdiction
and venue in any suit, action or proceeding with respect to this Agreement in
any court of competent jurisdiction in the state in which Executive resides at
the commencement of such suit, action or proceeding and waives any objection,
challenge or dispute as to such jurisdiction or venue being proper.
 
                        11.10   Effect of Prior Agreements.  This Agreement
contains the entire understanding between the parties hereto with respect to the
subject matter hereof, and supersedes in all respects any prior or other
agreement or understanding between the Company or any affiliate of the Company
and Executive with respect to the subject matter hereof.
 
                        11.11   Withholding.  The Company shall be entitled, to
the extent permitted or required by law, to withhold from any payment of any
kind due Executive under this Agreement to satisfy the tax withholding
obligations of the Company under applicable law.
 
                        11.12   Counterparts.  This Agreement may be executed in
two counterparts, each of which shall be deemed an original.       
 
 
IN WITNESS WHEREOF, the parties hereto, having duly been authorized, have
executed this Agreement as of June 29, 2005.
 
SUMMUS, INC. (USA).
ANDREW L. FOX
 
 
By:   /s/ Gary E. Ban                 
 
  /s/ Andrew L. Fox         
 
 
Name:    Gary E. Ban
 
Title:  Chief Executive Officer
 

 
  
 
 
 
 
16