Exhibit 10.4

 

EMPLOYMENT AGREEMENT

 

This EMPLOYMENT AGREEMENT (“Agreement”), dated as of February 8, 2017, is made
by and between Diego Pellicer Worldwide, Inc., a Corporation organized under the
laws of Delaware (the “Company”) and _____________ (the “Executive”). Each of
the Company and the Executive are referred to herein individually as a “Party”
and collectively as the “Parties.”

 

RECITALS:

 

WHEREAS, the Company wishes to employ the Executive as its Vice President of
Real Estate and the Executive wishes to accept such employment, on the terms set
forth below, effective as of February 8, 2017 (the “Effective Date”);

 

NOW, THEREFORE, in consideration of the foregoing premises, and the covenants,
representations and warranties set forth herein, and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged and
accepted, the Parties, intending to be legally bound, hereby agree as follows:

 

1. Term. The Company hereby employs the Executive, and the Executive hereby
accepts such employment, for an initial term commencing as of the Effective Date
and continuing for a term of five years, through January 31, 2022 (the
“Termination Date”) unless sooner terminated in accordance with the provisions
of Section 5 hereof (the “Initial Term”), with such employment to continue for
successive one-year periods in accordance with the terms of this Agreement
(subject to termination as aforesaid) unless either Party notifies the other
Party of non-renewal in writing prior to three months before the expiration of
the initial term and each annual renewal, as applicable. (The period during
which the Executive is employed hereunder being hereinafter referred to as the
“Term”).

 

2. Duties. During the Term, the Executive shall be employed by the Company as
its Vice President of Real Estate. The Executive shall devote his working time,
energy, attention, skill and best efforts to the affairs of the Company and to
the faithful performance of the duties of said offices and shall faithfully
perform such other duties of an executive, managerial or administrative nature
as shall be specified and designated from time to time by the Company’s Board of
Directors.

 

3. Place of Performance. Employee shall be based in the State of Nevada except
for travel required for Company business.

 

4. Compensation.

 

(a) Base Salary. The Company shall pay the Executive during the Term a salary at
a minimum rate of Ninety Thousand Dollars ($90,000) per annum for the period
beginning on the Effective Date through the Initial Term (the “Base Salary”), in
accordance with the customary payroll practices of the Company applicable to
senior executives. For each year thereafter, the Company’s Board (or
compensation committee of the Company’s Board, or, at the discretion of the
Company’s Board, by a committee composed of two or more members of the Company’s
Board (for purposes of this Agreement, the “Committee”) shall review the
Executive’s Base Salary and may provide for such increases therein as it may, in
its discretion, deem appropriate. (Any such increased salary shall constitute
the “Base Salary” as of the time of the increase.)

 

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(b) Bonus. During the Term, in addition to the Base Salary, for each fiscal year
of the Company ending during the Term, the Executive shall have the opportunity
to receive an annual bonus in an amount and on such terms to be determined by
the Company’s Board, or, at the discretion of the Company’s Board, the Committee
(“Performance Bonus”). The Company’s Board, or, at the discretion of the
Company’s Board, the Committee, shall further have the discretion to grant
Executive annual bonuses in such amounts and on such terms as it shall determine
in its sole discretion. Nothing contained in the foregoing shall limit the
Executive’s eligibility to receive any other bonus under any other bonus plan,
stock option or equity–based plan, or other policy or program of the Company.

 

(c) Equity Incentive Compensation. In consideration of the Executive’s
commitment to enter into this Agreement and to render the services described
herein and provided that the Executive is employed by and rendering services to
the Company on each such date , the Company shall issue to the Executive,
calculated, initially as of February 1, 2017, and thereafter, on each successive
February 1st throughout the Initial Term of this Agreement (the “February 1st
Adjustment Date”), a combination of stock grants and stock options so that the
Executive shall have a beneficial stock ownership position equal to seven and
one-half (7.5%) percent of the Company’s outstanding common shares (the
“Executive Beneficial Ownership Position”), issuable as soon as practicable
following each such February 1st Adjustment Date. No Company common shares
purchased or stock grants earned by the Executive, whether open market or
purchased from and issued directly by the Company shall be included when
calculating the Executive Beneficial Ownership Position but “Executive Stock
Option”, defined in Section 4 (c)(i) below, shall be included in all such
calculations. The Executive Beneficial Ownership Position shall be comprised of,
issued and maintained as follows:

 

(i) First Year Non-Qualified Stock Option. The Company shall issue to the
Executive a one-time, non-qualified stock option to purchase that number of the
Company’s restricted common shares in an amount equal to five (5%) percent of
the Company’s outstanding common shares as of February 1, 2017 (the Executive
Stock Option”), which shall be exercisable at the election of the Executive
anytime during the 10-year period following the date of grant, at the exercise
price of $.25 per share; that the Executive Stock Option shall vest fifty (50%)
percent on August 1, 2017, and fifty (50%) percent on February 1, 2018, and;
that when such Executive Stock Option is properly exercised, the Company
restricted common shares issued thereunder shall be deemed validly issued, fully
paid and non-assessable; that for purposes of reporting to the applicable
regulatory agencies, the value assigned to these Stock Options such be
determined by the Company’s Chief Financial Officer, applying acceptable
valuation formulae used for such purposes; it is the intention of the Parties
that the Executive Stock Option shall be part of and represent five(5.0%)
percent of the Executive Beneficial Ownership Position for the initial February
1, 2017 calculation of the Executive Beneficial Ownership Position;

 

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(ii) First Year and Successive Stock Grants: The Company shall make stock grants
to the Executive in that amount of the Company’s restricted common shares
pursuant to the following times and terms:

 

(x) As of February 1, 2017, the Company shall make a stock grant to the
Executive representing two and one-half (2.5%) percent of the issued and
outstanding Company common shares calculated and determined as of February1,
2017 (the “Initial Stock Grant”), and which Initial Stock Grant, when combined
with the Executive Stock Option, shall fulfill and meet the Executive Beneficial
Ownership Position for the first year of the Initial Term of this Agreement,
and;

 

(y) Commencing on February 1, 2018, and thereafter on each successive February
1st Adjustment Date throughout the Initial Term of this Agreement, the Company
shall issue to Executive stock grants for that number of additional shares of
the Company’s restricted common shares necessary to maintain the Executive
Beneficial Ownership Position for each such February 1st Adjustment Date; for
example, if on a February 1st Adjustment Date, the Executive beneficially owns
seven (7%) percent of the Company’s then outstanding common shares, the Company
shall issue to Executive a stock grant representing one-half (0.5%) percent of
the Company’s then outstanding common shares to meet and attain the Executive
Beneficial Ownership Position; that when issued, such shares contained in each
stock grant of the Company’s restricted common shares shall be deemed validly
issued, fully paid and non-assessable; that for purposes of reporting to the
applicable regulatory agencies, the value assigned to the shares contained in
the Initial Stock Grant and in all subsequent stock grants made to Executive
pursuant to this Section 4 c. of this Agreement shall be the average public
market share price as reported by Bloomberg for the 10 trading days immediately
preceding, for the Initial Stock Grant, the date of February 1, 2017 and,
thereafter, the 10 trading days immediately preceding each successive February
1st Adjustment Date thereafter, and; that the proper officers of the Company
shall instruct the Company’s Transfer Agency to issue and deliver to Executive
stock certificates, representing that number of Company restricted common shares
issued to Executive to maintain his Executive Beneficial Ownership Position
throughout the Initial Term of this Agreement at each February 1st Adjustment
Date, affixed with the appropriate designation as restricted securities.

 

(iii) Executive shall be entitled to participate in any equity compensation plan
of the Company in which he is eligible to participate, and may, without
limitation, be granted in accordance with any such plan options to purchase
shares of the Company’s common stock, shares of restricted stock, and other
equity awards in the discretion of the Company’s Board or the Committee.

 

(d) Benefits. The Executive shall be permitted during the Term to participate in
any group life, hospitalization or disability insurance plans, health programs,
retirement plans, fringe benefit programs and other benefits that may be
available to other senior executives of the Company generally, in each case to
the extent that the Executive is eligible under the terms of such plans or
programs. Full medical, dental, and vision coverage will be provided and paid
for by the Company.

 

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(e) Vacation. The Executive shall be entitled to vacation of no less than 20
business days per year, not including national holidays, to be credited in
accordance with ordinary Company policies.

 

(f) Expenses. The Company shall pay or reimburse the Executive for all ordinary
and reasonable out-of-pocket expenses actually incurred (and, in the case of
reimbursement, paid) by the Executive during the Term in the performance of the
Executive’s services under this Agreement, in accordance with the Company’s
policies regarding such reimbursements.

 

5. Termination of Employment; Change of Control.

 

(a) Termination upon Death or Disability. This Agreement and Executive’s
employment hereunder shall automatically terminate on the date on which
Executive dies or becomes permanently incapacitated. Executive shall be deemed
to have become “permanently incapacitated” on the date that is thirty (30) days
after the Company has determined that Executive has suffered a Permanent
Incapacity (as defined below) and so notifies Executive. For purposes of this
Agreement, “Permanent Incapacity” shall mean that (i) Executive is unable to
engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment that can be expected to result in
death or can be expected to last for a continuous period of not less than twelve
(12) months; or (ii) Executive is, by reason of any medically determinable
physical or mental impairment that can be expected to result in death or can be
expected to last for a continuous period of not less than twelve (12) months,
receiving income replacement benefits for a period of not less than twelve (12)
months under an accident and health plan covering employees of the service
provider’s employer.

 

(b) Termination by the Company for Cause. The Company may terminate this
Agreement and Executive’s employment hereunder with Cause (as defined below),
effective upon delivery of written notice to Executive given at any time during
the Term (without any necessity for prior notice). For purposes of this
Agreement, “Cause” shall mean the Executive’s: (i) conviction of any felony or
any other crime involving moral turpitude, (ii) fraud against the Company or any
of its subsidiaries or affiliates or theft of or maliciously intentional damage
to the property of the Company or any of their subsidiaries or affiliates, (iii)
willful breach of Executive’s fiduciary duties to the Company, or (iv) breach by
Executive of any provision of this Agreement.

 

(c) Termination by Company without Cause. The Company may terminate this
Agreement and Executive’s employment hereunder without Cause, effective upon
delivery of written notice to Executive given at any time during the Term
(without any necessity for prior notice) provided that the Company complies with
all provisions of this Agreement, including without limitation, obligations
related to severance, vesting of options and continuation of benefits as set
forth herein.

 

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(d) Termination by the Executive for Good Reason. The Executive may terminate
this Agreement and Executive’s employment hereunder with Good Reason (as defined
below). For purposes of this Agreement, “Good Reason” shall mean (i) the
material reduction of the Executive’s title, authority, duties and
responsibilities or the assignment to the Executive of duties materially
inconsistent with the Executive’s position or positions with the Company; (ii) a
material reduction in Base Salary of the Executive; (iii) the Company’s material
breach of this Agreement; or (iv) any change in the geographic location at which
Executive must perform the services under this Agreement, which change is
reasonably material to Executive. Notwithstanding the foregoing, (x) Good Reason
shall not be deemed to exist unless notice of termination on account thereof
(specifying a termination date no later than thirty (30) days from the date of
such notice) is given no later than 30 days after the time at which the event or
condition purportedly giving rise to Good Reason first occurs or arises and (y)
if there exists (without regard to this clause (y)) an event or condition that
constitutes Good Reason, the Company shall have fifteen (15) days from the date
notice of such a termination is given to cure such event or condition and, if
the Company does so, such event or condition shall not constitute Good Reason
hereunder.

 

(e) Termination by the Executive other than for Good Reason. The Executive may
terminate this Agreement and Executive’s employment hereunder other than for
Good Reason, provided that the Executive gives the Company no less than thirty
(30) days prior written notice of such termination.

 

(f) Change of Control. The Executive may terminate this Agreement and
Executive’s employment hereunder within the six month period following the
Transition Period (as defined below), provided that the Executive gives the
Company no less than thirty (30) days prior written notice of such termination.
For purposes of this Agreement, “Transition Period” means the period commencing
on the date of the Change of Control (as defined below) and ending on the first
anniversary of such Change of Control. For purposes of this Agreement, “Change
of Control” shall mean the occurrence of any of the following:

 

(i) Change in Ownership. A change in ownership of the Company occurs on the date
that any one person, or more than one person acting as a group, acquires
ownership of stock of the Company that, together with stock held by such person
or group, constitutes more than fifty percent (50%) of the total fair market
value or total voting power of the stock of the Company, excluding the
acquisition of additional stock by a person or more than one person acting as a
group who is considered to own more than fifty percent (50%) of the total fair
market value or total voting power of the stock of the Company.

 

(ii) Change in Effective Control. A change in effective control of the Company
occurs on the date that either: (A) any one person, or more than one person
acting as a group, acquires (or has acquired during the twelve (12) month period
ending on the date of the most recent acquisition by such person or persons)
ownership of stock of the Company possessing thirty percent (30%) or more of the
total voting power of the stock of the Company; or (B) a majority of the members
of the Company’s Board is replaced during any twelve (12) month period by
directors whose appointment or election is not endorsed by a majority of the
members of the Company’s Board prior to the date of the appointment or election;
provided, that this paragraph (2) will apply to the Company only if no other
corporation is a majority shareholder of the Company.

 

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(iii) Change in Ownership of Substantial Assets. A change in the ownership of a
substantial portion of the Company’s assets occurs on the date that any one
person, or more than one person acting as a group, acquires (or has acquired
during the twelve (12) month period ending on the date of the most recent
acquisition by such person or persons) assets from the Company that have a total
gross fair market value equal to or more than forty percent (40%) of the total
gross fair market value of the assets of the Company immediately prior to such
acquisition or acquisitions. For this purpose, “gross fair market value” means
the value of the assets of the Company, or the value of the assets being
disposed of, determined without regard to any liabilities associated with such
assets.

 

(iv) Intended Interpretation. It is the intent of the Parties that the
definition of Change in Control under this Agreement be construed consistent
with the definition of “Change in Control” as defined in Section 409A of the
Internal Revenue Code of 1986, as amended (the “Code”) and the applicable
Treasury Regulations, as amended from time to time.

 

6. Payments Upon Termination.

 

(a) Upon termination of this Agreement and Executive’s employment hereunder due
to Executive’s death or disability pursuant to Section 5(a) hereof, (i) the
Executive (or the Executive’s estate or beneficiaries in the case of the death
of the Executive) shall be entitled to receive any Base Salary and other
benefits (including any bonus for a calendar year completed before termination)
earned and accrued under this Agreement prior to the date of termination (and
reimbursement under this Agreement for expenses incurred prior to the date of
termination) and (ii) the Executive (or the Executive’s estate or beneficiaries
in the case of the death of the Executive) shall have no further rights to any
other compensation or benefits hereunder, or any other rights hereunder (but,
for the avoidance of doubt, shall receive such disability and death benefits as
may be provided under the Company’s plans and arrangements in accordance with
their terms).

 

(b) Upon termination of this Agreement and Executive’s employment hereunder (i)
by the Company for Cause pursuant to Section 5(b) hereof or by Executive other
than for Good Reason pursuant to Section 5(e) hereof, (i) the Company shall pay
to Executive an amount equal to Executive’s then Base Salary and other benefits
(including any bonus for a calendar year completed before termination) earned
and accrued under this Agreement prior to the date of termination (and
reimbursement under this Agreement for expenses incurred prior to the date of
termination) and (ii) the Executive shall have no further rights to any other
compensation or benefits under this Agreement on or after the termination of
employment.

 

(c) Upon termination of this Agreement and Executive’s employment hereunder (i)
by the Company without Cause pursuant to Section 5(c) hereof, (ii) by Executive
for Good Reason pursuant to Section 5(d) hereof or (iii) by Executive following
a Change in Control of the Company pursuant to Section 5(f) hereof, (x) the
Company shall pay to Executive (I) an amount equal to the Executive’s then Base
Salary for a period of (a) three years or (b) through the Termination Date,
whichever is greater, and other benefits (including any bonus for a calendar
year completed before termination) earned and accrued under this Agreement prior
to the date of termination (and reimbursement under this Agreement for expenses
incurred prior to the date of termination); and (II) an amount equal to 3.0
times (a) the average of the Base Salary amounts paid to Executive over the
three calendar years prior to the date of Termination, (b) if less than three
years have elapsed between the date of this Agreement and the date of
termination, the highest Base Salary paid to Executive in any calendar year
prior to the date of Termination, or (c) if less than 12 months have elapsed
from the date of this Agreement to the date of termination, the highest Base
Salary received in any month times 12; and (y) the Executive shall have no
further rights to any other compensation or benefits under this Agreement on or
after the termination of employment.

 

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(d) Nothing contained in this Section 6 shall affect the terms of any employee
stock options, stock grants, or other equity-based compensation that may have
been issued by the Company to Executive, which in the event of termination of
Executive’s employment with the Company shall continue to be governed by their
own terms and conditions.

 

(e) Unless the payment is required to be delayed pursuant to Code Section 409A
(as defined below), the cash amounts payable to the Executive (or the
Executive’s estate or beneficiaries in the case of the death of the Executive)
under this Section 6 shall be paid to the Executive (or the Executive’s estate
or beneficiaries in the case of the death of the Executive) in a single-sum
payment within 60 days following the effective date of termination of this
Agreement and Executive’s employment hereunder.

 

7. Parachutes. If any amount payable to or other benefit receivable by the
Executive pursuant to this Agreement would be deemed to constitute a Parachute
Payment (as defined below), alone or when added to any other amount payable or
paid to or other benefit receivable or received by the Executive which is deemed
to constitute a Parachute Payment (whether or not under an existing plan,
arrangement or other agreement), and would result in the imposition on the
Executive of an excise tax under Section 4999 of the Code, then the Parachute
Payments shall be reduced (but not below zero) so that the maximum amount of the
Parachute Payments (after reduction) shall be one dollar ($1.00) less than the
amount which would cause the Parachute Payments to be subject to the excise tax
imposed by Section 4999 of the Code. Any such reduction shall be made by first
reducing severance benefits (if any). Notwithstanding the foregoing, if the
reduction of Parachute Payments under this Section 7 would be equal to or
greater than $50,000, then there shall be no such reduction and the full amount
of the Parachute Payment shall be payable. “Parachute Payment” shall mean a
“parachute payment” as defined in Section 280G of the Code. The calculation
under this Section 7 shall be as determined by the Company’s accountants.

 

8. Execution of Release. The Executive acknowledges that, if required by the
Company prior to making the payments and benefits set forth in Section 5 (other
than accrued but unpaid Base Salary and other benefits), all such payments and
benefits are subject to his execution of a general release from liability of the
Company, and their respective Officers (including his successor),
Directors/Managers and employees, and such release becoming irrevocable by its
terms. If Executive fails to execute such release, or such release does not
become irrevocable, all such payments and benefits set forth in Section 6 hereof
shall be forfeited.

 

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9. Application of Code Section 409A.

 

(a) This Agreement shall be interpreted to avoid any penalty sanctions under
Section 409A of the Code (“Code Section 409A”). If any payment or benefit cannot
be provided or made at the time specified herein without incurring sanctions
under Code Section 409A, then such benefit or payment will be provided in full
(to the extent not paid in part at earlier date) at the earliest time thereafter
when such sanctions will not be imposed. For purposes of Code Section 409A, all
payments to be made upon a termination of employment under this Agreement may
only be made upon Executive’s “separation from service” (within the meaning of
such term under Code Section 409A) with the Company, each payment made under
this Agreement will be treated as a separate payment, and the right to a series
of installment payments under this Agreement will be treated as a right to a
series of separate payments. In no event will Executive, directly or indirectly,
designate the calendar year of payment, except as permitted under Code Section
409A.

 

(b) Notwithstanding anything herein to the contrary, if, at the time of
Executive’s “separation from service” with the Company, the Company has
securities which are publicly traded on an established securities market and
Executive is a “specified employee” (as such term is defined in Code Section
409A) and it is necessary to postpone the commencement of any payments or
benefits otherwise payable under this Agreement as a result of such termination
of employment to prevent any accelerated or additional tax under Code Section
409A, then the Company will postpone the commencement of the payment of any such
payments or benefits hereunder (without any reduction in such payments or
benefits ultimately paid or provided to Executive), until the first payroll date
that occurs after the date that is six (6) months following Executive’s
“separation of service” with the Company. If any payments are postponed due to
such requirements, such postponed amounts will be paid with interest at the
applicable federal rate as provided under Section 7872(f)(2)(A) of the Code in a
lump sum to Executive on the first payroll date that occurs after the date that
is six (6) months following Executive’s “separation of service” with the
Company. If Executive dies during the postponement period prior to the payment
of the postponed amount, the amounts withheld on account of Code Section 409A
will be paid to the personal representative of Executive’ s estate within sixty
(60) days after the date of Executive’s death. Payments pursuant to Section 6 of
this Agreement are intended to satisfy the short-term deferral exception under
Code Section 409A.

 

(c) All reimbursements and in-kind benefits provided under this Agreement will
be made or provided in accordance with the requirements of Code Section 409A,
including, where applicable, the requirement that (i) any reimbursement will be
for expenses incurred during Executive’s lifetime (or during a shorter period of
time specified in this Agreement), (ii) the amount of expenses eligible for
reimbursement, or in kind benefits provided, during a calendar year may not
affect the expenses eligible for reimbursement, or in kind benefits to be
provided, in any other calendar year, (iii) the reimbursement of an eligible
expense will be made on or before the last day of the calendar year following
the year in which the expense is incurred, and (iv) the right to reimbursement
or in kind benefits is not subject to liquidation or exchange for another
benefit.

 

(d) To the extent applicable, all grants, awards, bonuses or other payments made
to Executive or for which Executive is eligible under any Company bonus,
incentive, deferred compensation plan or program or any other compensation
arrangement will be structured to comply with the requirements of Code Section
409A or an exception from such requirements.

 

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10. Covenants of the Executive.

 

(a) Confidentiality. During the Term, the Company has and will continue to
provide Executive with access to, and may confide in him, information, business
methods and systems, techniques and methods of operation developed at great
expense by the Company and which are assets of the Company. Executive recognizes
and acknowledges that: (i) all Confidential Information (defined below) is the
property of the Company and is unique, extremely valuable and developed and
acquired by great expenditures of time, effort and cost; (ii) the misuse,
misappropriation or unauthorized disclosure by Executive of the Confidential
Information would constitute a breach of trust and would cause serious
irreparable injury to the Company; and (iii) it is essential to the protection
of the Company’s goodwill and to the maintenance of the Company’s competitive
position that the Confidential Information be kept secret and that Executive not
disclose the Confidential Information to others or use same to his own advantage
or to the advantage of others. Accordingly, Executive shall not, during the Term
or thereafter, directly or indirectly, in any manner, utilize or disclose to any
person, firm, corporation, association or other entity, or use on his own
behalf, any confidential and proprietary information of the Company, including,
but not limited to, information relating to strategic plans, sales, costs,
client lists, client preferences, client identities, investment strategies,
computer programs, profits or the business affairs and financial condition of
the Company, or any of its clients, or any of the Company’s business methods,
systems, marketing materials, clients or techniques (collectively “Confidential
Information”), except for (i) such disclosures where required by law, but only
after written notice to the Company detailing the circumstances and legal
requirement for the disclosure; or (ii) as authorized during the performance of
Executive’s duties for such use or purpose as are reasonably believed by
Executive to be in the best interests of the Company. At any time, upon request,
Executive shall deliver to the Company all of its property including, but not
limited to, its Confidential Information (whether electronically stored or
otherwise) which are in his possession or under his control. Property to be
returned includes, but is not limited to, notebook pages, documents, records,
prototypes, client files, drawings, electronically stored data, computer media
or any other materials or property in Executive’s possession.

 

(b) Noninterference. During the Term and for a period of one (1) years following
the end of the Term (the “Restricted Period”), for whatever reason, he will not,
directly or indirectly, for himself or on behalf of any third party, at any time
or in any manner:

 

(i) persuade, induce, solicit, influence or attempt to influence, or cause any
person who is an employee of the Company to terminate his or her relationship
with the Company or refer any such employee to anyone, without prior written
approval from the Company;

 

(ii) request or cause any of the Company’s clients or potential clients to
cancel, modify or terminate any existing or continuing or, to Executive’s
knowledge, prospective business relationship with the Company;

 

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(iii) engage in or participate in any effort or act to induce, or in any way
cause, any client or, to Executive’s knowledge, prospective client of the
Company, to deal with Executive or any other person or entity except in a
capacity as representative of the Company, or otherwise take any action which
might reasonably be expected to be disadvantageous to the Company;

 

(iv) persuade, induce, solicit, influence or attempt to influence, or cause any
client or, to Executive’s knowledge, prospective client of the Company to cease
or refrain from doing business, or to decline to do business, or to change or
alter any existing or prospective business relationship, with the Company;

 

(v) accept business from, or perform or provide any services for, any client, or
to Executive’s knowledge, prospective client of the Company;

 

(vi) contract with or communicate with, in either case in connection with
services, any client or, to Executive’s knowledge, prospective client of the
Company; or

 

(vii) provide any third party with any information concerning any client, or to
Executive’s knowledge, prospective client of the Company, including but not
limited to, the disclosure of any client name or data, in whatever form, to such
third party.

 

(c) Noncompetition. During the Term and Restricted Period, Executive shall not,
directly or indirectly, engage or participate in, or become employed by, or
affiliated with, or enter into or maintain a contractual relationship with, or
render advisory or any other services to, any person or business entity or
organization, of whatever form, that competes with the Company in the United
States or any other location in which the Company conducts business prior to
your termination date.

 

(d) Injunctive Relief. Executive acknowledges that his compliance with the
covenants in Sections 9(a), 9(b) and 9(c) hereof (the “Restrictive Covenants”)
is necessary to protect the good will, Confidential Information and other
proprietary interests of the Company, that such covenants are supported by
adequate and sufficient consideration, and that, in the event of any violation
or threatened violation by Executive of any such provision, the Company will
sustain serious, irreparable and substantial harm to its business, the extent of
which will be difficult to determine and impossible to remedy by an action at
law for money damages. Accordingly, Executive agrees that, in the event of such
violation or threatened violation by him, the Company shall be entitled to an
injunction before trial from any court of competent jurisdiction as a matter of
course and upon the posting of not more than a nominal bond, in addition to all
such other legal and equitable remedies as may be available to the Company.
Executive further acknowledges that he has carefully considered the nature and
extent of the restrictions contained herein and the rights and remedies
conferred upon the Company under this Agreement, and hereby acknowledges and
agrees that the same are reasonable, are designed to protect the legitimate
business interests of the Company, and do not confer benefits upon the Company
disproportionate to the detriment upon him. In the event that Executive violates
any of the covenants in this Agreement and the Company commences legal action
for injunctive or other relief, the Company shall have the benefit of the full
period of the covenants, computed from the date Executive ceased violation of
the covenants, either by order of the court or otherwise. Executive acknowledges
that any claim or cause of action he may have against the Company shall not
constitute a defense to the enforcement by the Company of his covenants in
Article 5 of this Agreement (e.g., these covenants are independent of any other
provision in this Agreement and of any other promise made to Executive).
Executive also acknowledges that his experience and capabilities are such that
he can obtain suitable employment otherwise than in violation of the covenants
in this Agreement and that the enforcement of these covenants will not prevent
the earning of a livelihood nor cause undue hardship. Without limiting the
foregoing, in the event of a breach by Executive of any Restrictive Covenant,
the Company’s obligations under this Agreement shall immediately terminate,
Executive shall not be entitled to any additional monetary payments or benefits
of any kind whatsoever and Executive shall reimburse the Company for all of its
attorneys fees and costs associated with any legal or equitable proceedings or
litigation seeking to enforce the terms of this Agreement.

 

 10 

 

 

(e) Remedies Cumulative and Concurrent. The rights and remedies of the Company
as provided in this Section 10 shall be cumulative and concurrent and may be
pursued separately, successively or together, at the sole discretion of the
Company, and may be exercised as often as occasion therefor shall arise. The
failure to exercise any right or remedy shall in no event be construed as a
waiver or release thereof.

 

(f) Executive’s Authorization. Executive authorizes the Company to inform any
third parties, including future employers, prospective employers and the
Company’s clients or prospective clients, of the existence of this Agreement and
his obligations under it.

 

(g) Survivability. The provisions of this Section 10 shall survive the cessation
of Employee’s employment for any reason, as well as the expiration of this
Agreement at the end of its Term or at any time prior thereto.

 

(h) Definition of Company. For purposes of this Section 10, the term “Company”
shall include the Company and any of its parents, subsidiaries, affiliates or
any related companies including their respective successors and assigns.

 

11. Other Provisions.

 

(a) Severability. The Executive acknowledges and agrees that (i) he has had an
opportunity to seek advice of counsel in connection with this Agreement and (ii)
the Restrictive Covenants are reasonable in geographical and temporal scope and
in all other respects. If it is determined that any of the provisions of this
Agreement or any part thereof, including, without limitation, any of the
Restrictive Covenants, is held invalid or unenforceable by any court of
competent jurisdiction, the other provisions of this Agreement will remain in
full force and effect. Any provision of this Agreement held invalid or
unenforceable only in part or degree will remain in full force and effect to the
extent not held invalid or unenforceable.

 

(b) Duration and Scope of Covenants. If any court or other decision-maker of
competent jurisdiction determines that any of the Restrictive Covenants
contained in this Agreement, including, without limitation, any of the
Restrictive Covenants, or any part thereof, is unenforceable because of the
duration or geographical scope of such provision, then, after such determination
has become final and unappealable, the duration or scope of such provision, as
the case may be, shall be reduced so that such provision becomes enforceable
and, in its reduced form, such provision shall then be enforceable and shall be
enforced.

 

 11 

 

 

(c) Arbitration.

 

(i) Subject to the limitations of this Section 11(c), if any dispute arises
between the Parties under or concerning this Agreement or the terms hereof, or
regarding the manner in which Executive was treated while employed by the
Company, the termination of his employment, or any alleged violation by the
Company of Executive’s rights under any common law theory, or any applicable
federal, state, or local law, statute, regulation, or ordinance (including
without limitation 42 U.S.C. § 1981, Title VII of the Civil Rights Act of 1964,
the Age Discrimination in Employment Act, the Americans with Disabilities Act,
and any other local, state, or federal legislation that pertains to employee
rights or discrimination in employment), the Parties agree to submit such issue
to final and binding arbitration in accordance with the then existing National
Rules for the Resolution of Employment Disputes of the American Arbitration
Association. Nothing in this Section 11(c), however, will preclude the Company
from seeking the judicial relief set forth under Section 10 of this Agreement.

 

(ii) The Parties agree that the interpretation and enforcement of the
arbitration provisions in this Agreement will be governed exclusively by the
Federal Arbitration Act (the “FAA”), 9 U.S.C. § 1 et seq., provided that they
are enforceable under the FAA, and will otherwise be governed by the law of the
State of Delaware.

 

(iii) The Parties agree and understand that one of the objectives of this
arbitration agreement is to resolve disputes expeditiously, as well as fairly,
and to those ends it is the obligation of all Parties to raise any disputes
subject to arbitration hereunder in an expeditious manner. Accordingly, the
Parties agree that, as to any dispute that can be brought hereunder, a demand
for arbitration must be postmarked or delivered in person to the other Party no
later than six (6) months after the date the demanding Party knows or should
have known of the event or events giving rise to the claim. Failure to demand
arbitration on a claim within these time limits is intended to, and will to the
furthest extent permitted by law, be a waiver and release with respect to such
claims. If, and only if, the waiver and release of claims referenced in the
immediately preceding sentence is found by a court of competent jurisdiction to
be unenforceable as against Executive or the Company under this Agreement, then
the Parties will nevertheless submit such claims to arbitration pursuant to this
Section 11(c) within the time permitted by law.

 

(iv) The Company will pay the arbitrator’s fees.

 

(v) Unless otherwise agreed by the Parties, arbitration will take place in Reno,
Nevada.

 

(vi) In rendering an award, the arbitrator will determine the rights and
obligations of the Parties according to federal law and the substantive law of
the State of Delaware without regard to any principles governing conflicts of
laws and the arbitrator’s decision will be governed by state and federal
substantive law, including state and federal discrimination laws referenced in
Section 11(c)(i) hereof, as though the matter were before a court of law.

 

 12 

 

 

(vii) Any arbitration award will be accompanied by a written statement
containing a summary of the issues in controversy, a description of the award,
and an explanation of the reasons for the award. The decision of the arbitrator
will be made within thirty (30) days following the close of the hearing. The
Parties agree that the award will be enforceable exclusively by any state or
federal court of competent jurisdiction within the United States.

 

(viii) It is understood and agreed by the Parties that their agreement herein
concerning arbitration does not contain, and cannot be relied upon Executive to
contain, any promises or representations concerning the duration of the
employment relationship, or the circumstances under or procedures by which the
employment relationship may be modified or terminated.

 

(ix) If any part of this arbitration procedure is in conflict with any mandatory
requirement or applicable law, the law will govern, and that part of this
arbitration procedure will be reformed and construed to the maximum extent
possible in conformance with the applicable law. The arbitration procedure will
remain otherwise unaffected and enforceable.

 

(d) Notices. All notices, demands, consents, requests, instructions and other
communications to be given or delivered or permitted under or by reason of the
provisions of this Agreement or in connection with the transactions contemplated
hereby shall be in writing and shall be deemed to be delivered and received by
the intended recipient as follows: (i) if personally delivered, on the business
day of such delivery (as evidenced by the receipt of the personal delivery
service), (ii) if mailed certified or registered mail return receipt requested,
two (2) business days after being mailed, (iii) if delivered by overnight
courier (with all charges having been prepaid), on the business day of such
delivery (as evidenced by the receipt of the overnight courier service of
recognized standing), or (iv) if delivered by facsimile transmission or other
electronic means, including email, on the business day of such delivery if sent
by 6:00 p.m. in the time zone of the recipient, or if sent after that time, on
the next succeeding business day. If any notice, demand, consent, request,
instruction or other communication cannot be delivered because of a changed
address of which no notice was given (in accordance with this Section 11(d), or
the refusal to accept same, the notice, demand, consent, request, instruction or
other communication shall be deemed received on the second business day the
notice is sent (as evidenced by a sworn affidavit of the sender). All such
notices, demands, consents, requests, instructions and other communications will
be sent to the following addresses or facsimile numbers as applicable:

 

If to the Company, to:  

Ron Throgmartin

3685 Thompson Mill Road

Buford, Georgia 30519

Attention: Ron Throgmartin

Telephone No.:

Email:

 

 13 

 

 

With copies to:  

Joseph J. Tomasek, Esqq

74 Linden Avenue

Verona, New Jersey 07044

Telephone No.: 973-224-1061

Email: jtoma4368@aol.com

      If to the Executive, to:    

 

Any such person may by notice given in accordance with this Section 11(d) to the
other Parties hereto designate another address or person for receipt by such
person of notices hereunder.

 

(e) Section Headings. The headings of Sections in this Agreement are provided
for convenience only and will not affect its construction or interpretation. All
references to or “Section” or “Sections” refer to the corresponding Article or
Section or Sections of this Agreement, unless the context indicates otherwise.

 

(f) Construction. The Parties have participated jointly in the negotiation and
drafting of this Agreement. In the event an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly
by the Parties and no presumption or burden of proof shall arise favoring or
disfavoring any Party by virtue of the authorship of any of the provisions of
this Agreement. Any reference to any federal, state, local, or foreign statute
or law shall be deemed also to refer to all rules and regulations promulgated
thereunder, unless the context requires otherwise. Unless otherwise expressly
provided, the word “including” shall mean including without limitation. The
Parties intend that each representation, warranty, and covenant contained herein
shall have independent significance. If any Party has breached any
representation, warranty, or covenant contained herein in any respect, the fact
that there exists another representation, warranty, or covenant relating to the
same subject matter (regardless of the relative levels of specificity) which the
Party has not breached shall not detract from or mitigate the fact that the
Party is in breach of such representation, warranty, or covenant. All words used
in this Agreement will be construed to be of such gender or number as the
circumstances require.

 

(h) Counterparts. This Agreement may be executed in one or more counterparts,
each of which will be deemed to be an original copy of this Agreement and all of
which, when taken together, will be deemed to constitute one and the same
agreement. In the event that any signature is delivered by facsimile
transmission or by e-mail delivery of a “.pdf” format data file, such signature
shall create a valid and binding obligation of the Party executing (or on whose
behalf such signature is executed) with the same force and effect as if such
facsimile or “.pdf” signature page were an original thereof.

 

(i) Entire Agreement. This Agreement contains the entire agreement between the
Parties with respect to the subject matter hereof and supersedes all prior
agreements, written or oral, with respect thereto.

 

(j) Waivers and Amendments. This Agreement may be amended, superseded, canceled,
renewed or extended, and the terms hereof may be waived, only by a written
instrument signed by the Parties or, in the case of a waiver, by the Party
waiving compliance. No delay on the part of any Party in exercising any right,
power or privilege hereunder shall operate as a waiver thereof, nor shall any
waiver on the part of any Party of any such right, power or privilege nor any
single or partial exercise of any such right, power or privilege, preclude any
other or further exercise thereof or the exercise of any other such right, power
or privilege.

 

 14 

 

 

(k) Assignment. This Agreement shall be binding upon and inure to the benefit of
the Parties and their respective successors, heirs (in the case of the
Executive) and assigns. No rights or obligations of the Company under this
Agreement may be assigned or transferred by the Company except that such rights
or obligations may be assigned or transferred pursuant to a merger or
consolidation in which the Company is not the continuing entity, or the sale or
liquidation of all or substantially all of the assets of the Company; provided,
however, that the assignee or transferee is the successor to all or
substantially all of the assets of the Company and such assignee or transferee
assumes the liabilities, obligations and duties of the Company, as contained in
this Agreement, either contractually or as a matter of law.

 

(l) Withholding. The Company shall be entitled to withhold from any payments or
deemed payments any amount of tax withholding it determines to be required by
law.

 

(m) Binding Effect. This Agreement shall be binding upon and inure to the
benefit of the Parties and their respective successors, permitted assigns,
heirs, executors and legal representatives.

 

(n) Survival. Anything contained in this Agreement to the contrary
notwithstanding, the provisions of Section 10 and any other provisions of this
Agreement expressly imposing obligations that survive termination of Executive’s
employment hereunder, and the other provisions of this Section 11 to the extent
necessary to effectuate the survival of such provisions, shall survive
termination of this Agreement and any termination of the Executive’s employment
hereunder.

 

(o) Existing Agreements. The Executive represents to the Company that he is not
subject or a Party to any employment or consulting agreement, non-competition
covenant or other agreement, covenant or understanding which might prohibit him
from executing this Agreement or limit his ability to fulfill his
responsibilities hereunder.

 

(p) Legal Fees: The Parties hereto agree that the Company shall pay the legal
fees relating to any dispute, claim, action or proceeding between the Parties
hereto arising out of or relating to the terms and conditions of this Agreement
or any provision thereof.

 

(q) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE WITHOUT REGARD TO ANY
PRINCIPLES OF CONFLICTS OF LAW WHICH COULD CAUSE THE APPLICATION OF THE LAWS OF
ANY JURISDICTION OTHER THAN THE STATE OF DELAWARE.

 

(r) Waiver of Jury Trial. EACH OF THE PARTIES HEREBY IRREVOCABLY WAIVES ANY AND
ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

[Signatures follow on next page]

 

 15 

 

 

IN WITNESS WHEREOF, the Company and the Executive have caused their respective
signature pages to this Agreement to be duly executed as of the date first
written above.

 

  COMPANY:   DIEGO PELICER WORLDWIDE, INC.         By:     Name: Ron Throgmartin
  Title: Chief Executive Officer         EXECUTIVE:    

 

 16