EXHIBIT 10.1

EXECUTIVE EMPLOYMENT AGREEMENT

This EXECUTIVE EMPLOYMENT AGREEMENT ("Agreement"), effective as of September
 29, 2014 ("Effective Date"), by and between VGTEL, INC., a New York
corporation, with an office at 400 Rella Blvd., Montebello NY 10901 ("Company"),
and  GREGORY WELLS, with an address at  Poway CA  ("Executive").  

WHEREAS, the parties hereto desire to enter into this Agreement to define and
set forth the terms and conditions of Executive’s employment by/with Company;

WHEREAS, Executive is willing to accept such employment and perform services for
Company, on the terms and conditions hereinafter set forth.

NOW, THEREFORE, that in consideration of the mutual covenants and agreements
herein contained and for other good and valuable consideration, the parties
agree as follows:

1.

Duties and Scope of Employment.    Company shall employ Executive in the
position of Chief Executive Officer, with such duties and responsibilities
including but not limited to the oversight and management of Company’s
business/management, and other matters as agreed by Company and Executive, such
as reasonably dictated by the Company’s Board of Directors (“Board”).

2.

Term of Employment.  (a) an initial One (1) year term, commencing on August 19,
2014 and continuing August 18, 2015 (“Initial Term”), and thereafter the
Executive’s term of employment shall automatically be extended for additional
one (1) year renewal terms (collectively, the "Additional Employment Period(s)")
unless, not later than thirty (30) calendar days prior to such date, either
Company or Executive shall have delivered written notice to the other party that
such party does not wish to extend the term of employment. Executive’s
employment with Company during the Additional Employment Periods shall be as an
employee of Company, at all times subject to earlier termination of this
Agreement in accordance with the notice and termination rights provided in
Section 4 of this Agreement.  The terms Initial Term and Additional Employment
Period shall as be individually and/or jointly referred to as “Employment
Period”.

 

3.

Executive's Compensation and Benefits.

 

 

(a)  Base Salary.  (i)  Company shall pay a base salary to Executive as follows:
 From August 19, 2014 to August 18, 2015, $14,583.33 per calendar month, payable
semi-monthly in accordance with Company’s standard payroll policies.  Upon the
execution of this Employment Agreement Company shall grant and immediately issue
to Executive 250,000 shares of Company’s common stock, par value $0.0001
(“Common Stock”). If Executive completes his employment with Company for the
Initial Term, then Company shall grant to Executive an option to purchase
500,000 shares of Common Stock, with an exercise price per share equal to 25% of
the average closing price of the Common Stock during the five (5) trading days
immediately prior to exercise.  

 

(ii)  Company shall pay a base salary to Executive during each renewal
Additional Employment Period as follows:  From August 19, 2015 to August 18,
2016, and for each subsequent yearly period thereafter, $16,666.66 per calendar
month, or such other amounts as Executive and Company may mutually agree for
subsequent Additional Employment Period(s), the same payable semi-monthly in
accordance with Company’s standard payroll policies.

 

(b)  Company Shares, Options and Warrants.  All shares issued by Company to
Executive hereunder, including all shares of common stock issuable upon exercise
of all warrants, options or other convertible securities issued by Company to
Executive pursuant to this Agreement (collectively, “Shares”) are to be issued
in reliance upon the exemptions from the registration requirements of the
Securities Act of 1933, as amended (the "Act"), pursuant to Section 4(2) of the
Act. The certificates evidencing the above mentioned Shares will contain a
legend (A) stating that the Shares have not been registered under the Act and
(B) setting forth or referring to the restrictions on transferability and sale
of the Shares under the Act.  The issuance of the Shares in payment of services
rendered are exempt from registration under the Securities Act of 1933, as
amended (the “Securities Act”), pursuant to Regulation D and Section 4(2).
 Executive has represented that he is an “accredited investor” within the
meaning of Rule 501 of Regulation D promulgated under the Securities Act, and
that he is acquiring the Shares for investment purposes for his own respective
account and not as nominees or agents, and not with a view to the resale or
distribution thereof, and Executive understands that the Shares may not be sold
or otherwise disposed of without registration under the Securities Act or an
applicable exemption therefrom.  Executive shall have “tag-along” rights to sell
the Shares of Common Stock issued by Company to Executive pursuant to this
Agreement, on a proportionate basis, alongside the Company in any sales of
Common Stock by the Company prior to consummation of an initial public offering
by Company.  To the extent any Shares issued pursuant to this Agreement and held
by Executive are not registered with the SEC on an appropriate registration
statement, Executive shall have “piggyback” registration rights with respect to
such Shares and such Shares shall be included in any subsequent registration
statement filed by the Company with the SEC, subject only to the customary right
of Company’s underwriters to exclude such shares from the registration statement
as long as Executive is not treated less favorably than any other persons with
piggyback registration rights.  

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(c)  Benefits.  Unless agreed otherwise, Executive shall be entitled participate
in and receive all pension/401(k), health, dental, life, vision, long-term care,
accident and disability insurance coverage and other benefits under Company's
executive benefits plan that are generally made available to senior executives
of Company on terms at least as favorable as those offered to other senior
executives of the Company. The Company and Executive shall agree upon a Medical
Plan conducive to the Company, Executive and other members who may be included
in the coverage; provided, however, that if Company is unable to provide
Executive with such benefits at the commencement of the Employment Period (or at
any other time during the Employment Period) due to the terms and conditions of
the applicable benefits plan or program (including any waiting periods or
residency requirements thereunder), or for any other reason, Company agrees to
reimburse Executive for all reasonable expenses and fees incurred by Executive
in obtaining substantially equivalent benefits until such time that such
benefits are provided by Company.

 

 

(d)  Vacation: Holidays. During the Initial Term, in addition to any
Company-wide holidays, Executive shall receive three (3) weeks of paid vacation,
which shall accrue on the first day of the Initial Term.  During each subsequent
Additional Employment Period, in addition to any Company-wide holidays,
Executive shall receive four (4) weeks of paid vacation, which shall accrue on
the first day of each Additional Employment Period.  Unused vacation time shall
accrue from year to year until used.  Accrued and unused vacation shall be paid
to Executive upon his termination at a rate based on Executive’s base salary at
the time of Executive’s termination of his employment with Company.  In
addition, Executive will be provided the same sick leave and holiday benefits
provided to other similarly-situated senior employees of Company.

 

(e)  Expenses.  Company shall reimburse Executive for all reasonable business
and travel expenses actually incurred by or paid by Executive in the performance
of duties and services on behalf of Company, in accordance with Company's
expense reimbursement policy as in effect from time to time.  For all such
expenses Executive shall furnish to Company appropriate supporting documentation
in respect of which Executive seeks reimbursement, when and where applicable.
 Additionally, Company shall provide Executive with a corporate credit card for
all reimbursable business, travel and related reimbursements.

 

 

(f)  Bonus.  For each Employment Period during the term of this Agreement,
Executive shall be paid a bonus (the "Performance Bonus(es)") to be determined
by the Board upon completion of each Employment Period, subject to the
achievement of certain conditions set forth by the Board following consultation
with Executive. The conditions shall consist of a list of preset expectations
assigned by the Board to the Executive based on achievement of meaningful
milestones that are deemed critical for Company to achieve its short, medium and
long term goals.  The conditions approved by the Board shall include reasonably
achievable metrics calculated to provide Executive with minimum Performance
Bonuses as follows: (i) annual cash Performance Bonus equal to at least fifty
percent (50%) of Executive’s annual base salary then in effect, and (ii)
additional Shares (including warrants, options or other securities convertible
into Common Stock) to acquire such number of shares of Common Stock so that,
when combined with the other Shares granted in Section 3(a) above, Executive
will have the opportunity to receive, upon completion of his second (2nd)
Additional Employment Period, total Shares (including immediately exercisable
and unrestricted warrants, options and other securities convertible into Common
Stock) equal to an aggregate of not less than 4.9% of the Fully Diluted Common
Stock of the Company (inclusive of the Shares granted to Executive pursuant to
this Agreement including this Section 3(f)), if the applicable conditions are
satisfied.  To the extent Shares other than Common Stock are used to satisfy
this requirement, such Shares shall be immediately exercisable and have an
exercise price equal to the option exercise price set forth in Section 3(a)(ii)
above. For purposes of this Agreement, "Fully Diluted Common Stock" shall mean
the sum of (i) the number of shares of Common Stock then outstanding and (ii)
the number of shares of Common Stock determined as if all options, warrants or
other convertible securities or instruments or other rights to acquire Common
Stock or any other existing or future classes of capital stock have been
exercised or converted, as applicable, in full, regardless of whether any such
options, warrants, convertible securities or instruments or other rights are
then vested or exercisable or convertible in accordance with their terms.
 Payment of all Performance Bonus amounts shall be made within (90) days after
such determination or the end of the applicable Employment Period, whichever
occurs first.  Executive shall be eligible for the entire Performance Bonus only
if the Executive is an employee of the Company during the entire applicable
Employment Period, except in the event of a Termination for Cause; provided,
however, Executive shall receive a prorated Performance Bonus through the
effective date of termination if he is terminated (i) by Company without Cause
(as defined herein), or (ii) based upon death or Disability (as defined herein),
or (iii) pursuant to a resignation for Good Reason.  Payment of the Performance
Bonus for the current fiscal year as of the Effective Date shall be prorated
based on the number of days remaining in the applicable Employment Period.  The
Company reserves the right to implement a bonus plan document to further
describe the Performance Bonus which Executive acknowledges and agrees may place
additional restrictions on the payment of the Performance Bonus consistent with
reasonable industry practice but subject to the foregoing terms. The Board may
from time to time award Executive additional bonuses in its sole and absolute
discretion.

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(g)  Rights Upon Termination.  Upon the termination of employment, Executive
shall be entitled to the compensation and benefits earned and the reimbursements
described in this Agreement for the period preceding the effective date of the
termination.  In addition, if Executive’s employment is terminated or not
renewed by Company other than for “Cause” (as defined below) during any
Additional Employment Period, or Executive’s employment is terminated by
Executive for “Good Reason” (as defined below) during any Employment Period,
then Company shall provide to Executive: (i) the Accrued Obligations (as defined
below); (ii) the Health Insurance Obligations (as defined below); and (iii) as
severance, Executive’s base salary in effect as of the termination date, for a
period equal to ninety (90) days following termination (the “Severance Payment”,
and together with the Accrued Obligations and the Health Insurance Obligations,
the “Severance Obligations”).

(h)  Definitions.  For purposes of this Agreement:

(i)

“Accrued Obligations” shall mean (i) the amount of any accrued but unpaid base
salary due and owing to Executive as of the date of termination of his
employment, less applicable withholdings and deductions, (ii) the prorated
amount of any accrued but unpaid Performance Bonus or other bonus or incentive
compensation, if any, payable to Executive subject to the proportional
achievement the performance conditions, (iii) any accrued but unpaid vacation or
other paid time off, as required by law and/or this Agreement, (iv)
reimbursement of expenses incurred by Executive in accordance with this
Agreement and not previously reimbursed, and (iv) any and all other vested
benefits.  All uncontested Accrued Obligations payable in cash shall be paid
within fifteen (15) days after termination of Executive’s employment or as
required by law.

(ii)

“Health Insurance Obligations” shall mean maintaining and providing for
Executive, at no cost to Executive (other than employee contributions in
accordance with the Company’s policies then in effect) for a period ending at
the earlier of: (i) twelve (12) months after the date of termination, and (ii)
the date of Executive’s full-time employment by another employer (provided that
Executive is entitled under the terms of such new employment to benefits
substantially similar to those described in this section), Executive’s continued
participation in group health insurance and dental insurance offered by Company
in which Executive was participating immediately prior to the date of
termination.

4.

Termination.   (a)  Disability.    Executive’s employment shall terminate in the
event of Executive’s ‘Disability’ (as defined herein), upon thirty (30) days’
written notice to Executive.  Executive shall be deemed to have a “Disability”
if an independent medical doctor (selected by Company’s health insurer and
reasonably acceptable to Executive or his legal representative) certifies that
Executive, for ninety (90) consecutive days or one hundred eighty (180)
non-consecutive days in any twelve (12) month period, has been unable to perform
the essential functions of his job duties with or without reasonable
accommodation, and the independent medical doctor provides a medical opinion
that Executive will not be able to resume his duties hereunder on a full time
basis for the remaining current Employment Period..  Executive, or his guardian,
shall cooperate in submitting to a medical examination for the purpose of
certifying Disability under this Section 4(a) if requested by Company.  For the
avoidance of doubt, nothing in this Agreement shall preclude Company from
temporarily filling Executive's position while Executive is on a leave of
absence due to a Disability.

(b)  Termination Upon Death.    If the Executive should die during the term of
this Agreement, the Company's obligations under this Agreement shall cease, and
the Executive's employment shall be terminated as of the Executive’s date of
death.

(c)  Termination by Company.   Company may terminate Executive's employment
hereunder without ‘Cause’ (as defined herein) with at least ninety (90) days
prior written notice.  In addition, Company may terminate Executive's employment
hereunder for Cause at any time; provided, however, that prior to any
termination of employment for ‘Cause’ (as the term is hereinafter defined),
Company must first provide written notice to Executive within thirty (30)
calendar days after the initial discovery of the condition, describing the
existence of such triggering condition, and Executive shall thereafter have the
right to remedy the condition within ten (10) calendar days of the date
Executive received the written notice from Company, unless such breach/condition
cannot be cured or remedied.  If Executive remedies the condition within such
ten (10) calendar day period (or longer period, as provided in the preceding
sentence), as reasonably determined by the Board after a diligent and good faith
inquiry, then no Cause shall be deemed to exist with respect to such
breach/condition.  If Executive does not remedy the breach/condition within such
ten (10) calendar day period (or longer period, as provided herein), as
reasonably determined by the Board after a diligent and good faith inquiry, then
Company may deliver a notice of termination for Cause at any time within thirty
(30) calendar days following the expiration of such cure period, in which case
termination will be effective upon delivery of such notice.  For purposes of
this Agreement, “Cause” shall mean the following:

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(i)

Executive’s willful refusal or failure to carry out any reasonable direction or
instruction issued by the Board, or his repeated willful failure to perform his
duties and responsibilities under this Agreement to the reasonable satisfaction
of the Board (other than as a result of a Disability);  

(ii)

Executive’s breach of any material term of this Agreement or any written policy
or Company procedure, in any material respect;

(iii)

Executive’s commission of an act of theft, fraud, embezzlement, falsification of
Company documents, misappropriation of funds or other assets of Company, or
other acts of dishonesty, misconduct or moral turpitude involving the property
or affairs of Company or the carrying out of his duties for Company, which
results in material damage to Company, provided however, that should Executive
commission of acts as described in this subsection (iii) shall be disclosed,
then Company shall be entitled to suspend Executive without the notice provision
provided to Executive in subsection 4(c). If such inquiry is resolved without
Executive being deemed to have committed such act(s), then Company shall
promptly reinstate Executive and pay to him all compensation to which he
otherwise would have been entitled, but for such suspension;

(iv)

Executive’s gross negligence or willful misconduct in connection with the
execution of his duties, which results in material damage to Company, provided
however, that should Executive commission of acts/conduct as described in this
subsection (iv) result in material damage to Company, then Company shall be
entitled to suspend Executive without pay.   If after the notice requirements
under this Section 4(c) Executive is deemed to have cured/remedied the alleged
acts/conduct, then Company shall promptly reinstate Executive and pay to him all
compensation to which he otherwise would have been entitled, but for such
suspension;  

(v)

Executive’s conviction of (or entering of a plea of guilty or nolo contendere
with respect to) any felony evidencing moral turpitude, fraud or embezzlement
under the laws of the United States or any other jurisdiction, such conviction
allowing Company to immediately terminate Executive, upon Company being apprised
of such conviction, without any notice requirements under this Section 4(c);
provided, however, that should Executive be indicted for any felony described in
this subsection (v), Company shall be entitled to suspend Executive without pay
pending resolution of such indictment and such suspension shall not be
considered Good Reason (as defined herein); and provided further, that if
Company suspends Executive pending resolution of such indictment, and such
indictment is resolved without Executive being convicted (or entering a plea of
guilty or nolo contendere with respect to) any felony that is the subject matter
of such indictment, Company shall promptly reinstate Executive and pay to him
all compensation to which he otherwise would have been entitled, but for such
suspension; and

(vi)

Executive is found to be habitually and repeatedly under the influence of
illegal substances or habitually and repeatedly intoxicated while performing
services for Company provided however, that should Executive commission of acts
as described in this subsection (vi) shall be disclosed, then Company shall be
entitled to suspend Executive without the notice provision provided to Executive
in subsection 4(c). If such inquiry is resolved without Executive being deemed
to have committed such act(s), then Company shall promptly reinstate Executive
and pay to him all compensation to which he otherwise would have been entitled,
but for such suspension.  

For purposes of this Section 4(c), no act, or failure to act, on Executive’s
part shall be considered “willful” unless intentionally done, or intentionally
omitted to be done, by him.  Determination as to whether or not Cause exists for
termination of Executive’s employment will be made by the Board after a diligent
and good faith inquiry.  

 

 (d)  Termination by Executive.   Executive may terminate this Agreement on at
least two (2) weeks’ notice, and Company shall have no obligations to Executive
on and subsequent to the termination date except as specifically provided in
this Agreement.  In addition, Executive may resign from his employment hereunder
for Good Reason (as defined herein); provided, however, that prior to any
resignation of employment for Good Reason, Executive must first provide written
notice to Company within thirty (30) days of the initial existence of the
condition, describing the existence of such condition, and Company shall
thereafter have the right to remedy the condition within thirty (30) days after
the date Company received the written notice from Executive.  If Company
remedies the condition within such thirty (30) day period, then no Good Reason
shall be deemed to exist with respect to such condition.  If Company does not
remedy the condition within such thirty (30) day period, then Executive may
deliver a notice of resignation for Good Reason at any time following the
expiration of such cure period, in which case termination will be effective upon
delivery of such notice.  If Executive’s employment is terminated by Executive
for Good Reason during any Employment Period, the termination will be treated as
a termination by Company of Executive’s employment other than for Cause and
Executive will be entitled to the rights and benefits described in Section 3(g)
above.  For purposes of this Agreement, “Good Reason” shall mean the occurrence,
without Executive’s prior written consent, of any of the following conditions:

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(i)

The relocation of Company’s principal executive offices to a location outside a
fifty (50) mile radius from its current location, or Company requiring Executive
to be based anywhere other than Company’s principal executive offices, except
for travel reasonably required on Company business;

(ii)

A material breach of this Agreement by Company, including, without limitation,
the failure by Company to pay to Executive any portion of Executive’s then base
salary, Performance Bonus, Shares, warrants or options, or other incentive or
other form of compensation due under this Agreement, which, if correctable,
remains uncured for fifteen (15) days following written notice to Company by
Executive of such breach;

(iii)

Any material reduction in Executive’s base salary and/or Performance Bonus, or
any material reduction in Executive’s comprehensive benefit package (other than
changes to such plans as are required under applicable law or by group insurance
carriers and other than such changes as are generally applicable to all senior
executives of Company);

(iv)

The assignment to Executive of duties that represent or constitute a material
adverse change or diminution in Executive’s position, duties, job title and/or
responsibilities to Company; or

(v)

 A “Change in Control” of Company, which means the occurrence of (i) the
consummation of a reorganization, merger, share exchange, consolidation,
recapitalization or liquidation of Company; (ii) the sale or disposition of all
or substantially all of the assets of the Company; or (iii) the acquisition by
any third party, directly or indirectly, of fifty percent (50%) or more of the
total voting power represented by Company’s then issued and outstanding stock or
other voting securities.

5.

Notices.   All notices required or permitted to be given under the provisions of
this Agreement shall be in writing and delivered personally, by certified or
registered mail, return receipt requested, postage prepaid, or by overnight
courier, to the parties at the following addresses listed above, or to such
other persons at such other addresses as any party may, in the future, request
by notice in writing to the other party to this Agreement.

 

6.

Successors and Assigns.   Any successor of Company (whether direct or indirect
and whether by purchase, lease, merger, consolidation, liquidation or otherwise)
to all or substantially all of Company's business and/or assets, shall assume
the obligations under this Agreement and agrees expressly to perform the
obligations under this Agreement in the same manner and to the same extent as
Company would be required to perform such obligations in the absence of such a
succession.   This Agreement may not be assigned by Executive.

 

7.

Severability.   If any provision of this Agreement is declared or found to be
illegal, unenforceable, or void, in whole or in part, then both parties shall be
relieved of all obligations arising under such provision, but only to the extent
such provision is illegal, unenforceable, or void, it being the intent and
agreement of the parties that this Agreement shall be deemed amended by
modifying such provision to the extent necessary to make it legal and
enforceable while preserving its intent or, if such is not possible, by
substituting therefore another provision that is legal and enforceable and
achieves the same objectives. The foregoing notwithstanding, if the remainder of
this Agreement shall not be affected by such declaration or finding and is
capable of substantial performance, then each provision not so affected shall be
enforced to the extent permitted by law.

 

8.

Entire Agreement; Integration  This Agreement, intended by the parties to be the
final expression of their Agreement with respect to the employment of Executive
by Company and supersedes all other prior or contemporaneous agreements,
employment contracts, and understandings, both written and oral, express or
implied, with respect to the subject matter of this Agreement.    

 

9.   

Unauthorized Disclosure.  During the period of his employment hereunder, the
Executive shall not, without the prior written consent of the Company, disclose
to any person, other than a person to whom disclosure is necessary or
appropriate in connection with the performance by the Executive of his duties as
an executive of the Company, services, improvements, designs, methodologies,
processes, customers, methods of marketing or distribution, systems, procedures,
plans, proposals, or policies, the disclosure of which he knows, or should have
reason to know, could be damaging to the Company.  Following the termination of
employment hereunder, the Executive shall not disclose any confidential
information of the type described above except as may be required by order of
court in connection with any judicial or administrative proceeding or inquiry;
provided, however, nothing contained in this Section 9 shall apply to any
knowledge or information that (1) is generally available to the public or
becomes generally available to the public other than as a result of a disclosure
in violation hereof by Executive, (2) prior to its disclosure, was available to
Executive prior to his association with the Company or (3) becomes available to
Executive from a source other than the Company.

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10.

Amendments; Modifications.   This Agreement may be amended only by the written
agreement of the parties hereto. No provisions of this Agreement may be
modified, waived, or discharged unless such waiver, modification, or discharge
is agreed to in writing signed by Executive and the Company. No waiver by either
party hereto at any time of any breach by the other party hereto or compliance
with any condition or provision of this Agreement to be performed by such other
party shall be deemed a waiver of similar or dissimilar provisions or conditions
at the same or at any prior or subsequent time.

 

11.

Choice of Law; Dispute Resolution.  The formation, construction, and performance
of this Agreement shall be construed in accordance with the laws of the State of
California, without regard to principles of conflicts of law.  Each of the
parties hereto agrees to submit all claims or disputes arising out of, or
related to this Agreement or Executive's employment with Company, first to
private and confidential non-binding mediation by Judicial Arbitration &
Mediation Service, Inc. – San Diego Office of Dispute Resolution (“JAMS”).  Both
parties shall participate in such mediation proceedings, in good faith, prior to
proceeding with arbitration.  If the parties are unable to resolve such claim or
dispute by non-binding mediation, then either party may thereafter submit the
claim or dispute to private and confidential binding arbitration conducted by
JAMS, before one (1) arbitrator.  Subject to the terms of this Section 11, the
arbitration proceedings shall be governed by the rules of arbitration of JAMS
and shall take place in San Diego, California.  The decision of the arbitrator
shall be final and binding on each of the parties and judgment thereon may be
entered in any court having jurisdiction.  This arbitration procedure is
intended to be the exclusive method of resolving any claim arising out of or
related to this Agreement.  The only exception to this arbitration provision
shall be an action by either party seeking equitable, including injunctive,
relief in a court of competent jurisdiction, which shall be brought exclusively
in the state courts of the State of California, County of San Diego.  In the
event of any arbitration or other action arising out of or related to this
Agreement, the prevailing party in such arbitration or other action shall be
entitled to receive an award of all costs and expenses of such arbitration or
other action, including reasonable attorneys’ fees and costs, and all other
expenses in connection therewith, in addition to any other award or remedy
provided in such arbitration or action.  This dispute resolution agreement will
cover all matters directly or indirectly arising out of or related to
Executive’s employment, recruitment and/or termination of employment, including,
but not limited to, claims involving laws against any form of discrimination or
wrongful termination, and whether brought under federal or state law, and/or
claims involving other employees.  Excluded from this arbitration provision are
workers’ compensation claims, unemployment insurance claims or any other claim
which is not subject to arbitration by law.  

 

12.

Joint Construction.   The drafting and negotiation of this Agreement has been
participated in by each of the parties hereto, and for all purposes, therefore,
this Agreement shall be deemed to have been drafted jointly by each of the
parties and any rule of construction concerning ambiguous terms being construed
against the drafting party shall not be in effect.

 

13.

Withholding of Taxes.   Company may withhold from any amounts payable under this
Agreement all federal, state, city, and other taxes as shall be required
pursuant to any law or government

regulation or ruling.

14.

Further Action.  The parties hereto shall execute and deliver all documents,
provide all information and take or forbear from all such action as may be
necessary or appropriate to achieve the purposes of this Agreement.

 

15.

Indemnification.  To the fullest extent permitted by applicable law, Company
shall indemnify, defend and hold Executive harmless from and against all claims,
losses, costs, liabilities, expenses (including reasonable attorneys’ fees),
judgments, fines, settlements and other amounts actually and reasonably incurred
by Executive in connection with any pending, threatened or completed action or
proceeding, whether civil, criminal, administrative, or investigative, or any
third party claims, that Executive is made a party to by reason of the fact that
he is or was performing services as an employee, officer, director or agent of
Company (including, but not limited to, his roles as President, Chief Executive
Officer and as a Director of Company).  Such indemnification shall continue as
to Executive even if he has ceased to be an employee, officer, director or agent
of Company and shall inure to the benefit of Executive’s heirs and estate.
 During Executive’s employment with Company and from and after the date that
Executive’s employment is terminated for any reason whatsoever, Executive shall
receive the same benefits provided to any of Company’s officers and directors
under any applicable directors’ and officers’ liability insurance or similar
policy, indemnification agreement, Company policy and/or the Bylaws of Company,
in each case, as may be amended or restated from time to time.

16.

Counterparts.   This Agreement may be executed in two or more counterparts, each
of which will be deemed an original.

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17.

Non-Solicitation; Outside Activities.   (a)  For a period of twelve (12) months
immediately following Executive's termination of employment, the Executive will
not, directly or indirectly, recruit or hire or solicit any person who, during
the 12-month period preceding the date of recruitment or hiring or solicitation,
was an executive, employee or contractor of the Company or any of its
subsidiaries or affiliates.  However, nothing contained in this Agreement shall
prohibit the Executive from placing or hiring based upon non-targeted general
solicitations of employment for his own behalf or on behalf of any third party.
 

(b)

Furthermore, during the Employment Period, Executive shall devote his full
energies, interest, abilities, and productive time to the performance of duties
for Company as described hereunder and shall not, without Company's prior
written consent:

 

(i)

render to others services of any kind, or engage in any other business activity
that materially interferes with the performance of his duties under this
Agreement;

(ii)

perform any services, directly or indirectly, whether as an employee,
consultant, independent contractor, for any person or entity competing, directly
or indirectly with Company;

(iii)

own, directly or indirectly, whether as partner, creditor, shareholder, or
otherwise, any interest in any entity competing, directly or indirectly, with
the Company;

(iv)

promote, participate, or engage in any activity or other business competitive
with the Company; compete, directly or indirectly, with any products or services
marketed or offered by the Company; or

(v)

engage in any activity which constitutes a conflict of interest.

(c)

Notwithstanding the above, nothing contained in this Agreement or this Paragraph
17 shall prohibit the Executive at any time from: (i) acquiring, making and
managing personal business investments of his choice; (ii) serving in any
capacity with any civic, educational or charitable organizations and/or any
trade associations, or (iii) serving on the boards of directors of other
for-profit entities from time to time; provided such activities and service do
not materially interfere or conflict with the performance of his duties
hereunder.

 

18.

Return of Materials.  All property, including, without limitation, all books,
manuals, memorandums; policy statements, correspondence (letters, telegrams,
mailgrams), minutes of meetings, agendas, interoffice communications, forecasts,
analyses, working papers, charts, expense account reports, ledgers, journals,
financial statements, statements of accounts, data compilations, records,
reports, notes, memoranda, computer disks, flow charts, computer documents and
computer software, data sheets, contracts, lists, and other documents,
proprietary information and equipment pertaining to the business of Company or
any of its subsidiaries and associates that may come into the possession or
control of Executive, or furnished to and/or prepared by Executive, shall at all
times remain the property of Company or such subsidiary or associate, as the
case may be.  On termination of Executive's employment for any reason, Executive
agrees to deliver promptly to Company all such property of Company in the
possession of Executive or directly or indirectly under the control of
Executive.  Executive agrees not to make for his personal or business use or
that of any other party, reproductions or copies of any such property or other
properly of Company.

19.

Indemnification of Executive Relating to Section 409A.  The Company agrees to
defend, indemnify and hold Executive harmless for any additional taxes,
penalties and interest assessed against Executive pursuant to Section 409A of
the Internal Revenue Code of 1986, as amended (the “Code”), and the regulations
promulgated thereunder (collectively, “Section 409A”), because of any negligent
actions taken, or negligent failure to take any action, by Company that results
in a failure to comply with Section 409A, with regard to any payment or
distribution made or to be made under this Agreement (or of any award of
compensation, including equity compensation or benefits).  Company agrees to pay
Executive an additional payment for any such additional taxes, penalties and
interest that may be assessed under Section 409A, such that, after payment by
Executive of the additional taxes, penalties and interest assessed under Section
409A, Executive will be in the economic position Executive would have been had
such payment or distribution not been determined to be noncompliant with Section
409A.

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20.

Gross-Up for Excess Parachute Payments.  In the event that any payment,
insurance benefits, accelerated vesting, pro-rated bonus or other benefit
payable to Executive hereunder shall (i) constitute “parachute payments” within
the meaning of Section 280G (as it may be amended or replaced) of the Code
(“Parachute Payments”) and (ii) be subject to the excise tax imposed by Section
4999 (as it may be amended or replaced) of the Code (the “Excise Tax”), then the
Company shall pay to Executive an additional amount (the “Gross-Up Amount”) such
that the net benefits retained by Executive after deduction of the Excise Tax
(including interest and penalties) and any federal, state or local income taxes
(including interest and penalties) upon the Gross-Up Amount, shall be equal to
the benefits that would have been delivered hereunder had the Excise Tax not
been applicable and the Gross-Up Amount not paid.  For purposes of determining
the Gross-Up Amount: (x) the amount of the Excise Tax and related income tax
consequences attributed to benefits under this Agreement shall be equal to the
increase in such taxes compared to such taxes that would have been payable by
Executive if none of the benefits under this Agreement had been Parachute
Payments; and (y) Executive shall be deemed to pay federal, state and local
income taxes at the highest marginal rate of taxation for Executive’s taxable
year in which the Gross-Up Amount is includable in Executive’s income for
purposes of federal, state, and local income taxation.  Any Gross-Up Amounts due
under this Section 20 shall be paid in accordance with Section 1.409A-3(i)(1)(v)
of the Treasury Regulations (or any successor provisions thereto).

 

21.

Executive Representations and Warranties.  Executive represents and warrants as
of the date of his initial hiring by the Company, the Effective Date, and during
the Employment Period that:

(a)

Neither the execution of this Agreement, nor employment with the Company, nor
performance of the duties required hereby will violate any obligations of
Executive to any former employer or breach any agreement to keep in confidence
information acquired by Executive before Executive's employment by the Company;
and,

(b)

Executive has not entered into, and will not enter into any agreement, either
written or oral, that conflicts with this Agreement.

 

22.

Voluntary Execution.  Executive acknowledges that he has read and understands
the Agreement, is fully aware of its legal effect, has not acted in reliance
upon any representations or promises made by the Company other than those
contained in writing herein. The Executive has been advised to obtain
independent legal counsel regarding this Agreement and the Executive is signing
this Agreement knowingly and voluntarily.

 

23.

No Assignment of Benefits.  The rights of any person to payments or benefits
under this Agreement shall not be made subject to option or assignment, either
by voluntary or involuntary assignment or by operation of law, including without
limitation bankruptcy, garnishments, attachment or other creditor's process, and
any action in violation of this paragraph shall be void.

IN WITNESS WHEREOF, this Agreement has been executed by the parties as of the
day and year first above written.

VGTEL, INC.

By: /s/ Neil Fogel

Name:

Neil Fogel

Title:

Chief Financial Officer

By: /s/ Gregory Wells

GREGORY WELLS, Individually  

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