Exhibit 10.2

 

EXECUTIVE EMPLOYMENT AGREEMENT

 

AMONG

 

PRIORITY PAYMENT SYSTEMS HOLDINGS, LLC, PIPELINE CYNERGY
HOLDINGS, LLC, PRIORITY HOLDINGS, LLC

 

AND

 

JOHN V. PRIORE

 

MAY 21, 2014

 

 

 

 

EXECUTIVE EMPLOYMENT AGREEMENT

 

THIS EXECUTIVE EMPLOYMENT AGREEMENT (the “Agreement”) by and among Priority
Payment Systems Holdings LLC, Pipeline Cynergy Holdings, LLC (together, the
“Companies”), and John V. Priore (“You” or “Your”)(collectively, the “Parties”),
and solely for purposes of Section 3(E), Priority Holdings, LLC (the “Parent”),
is entered into and effective as of the 21st of May, 2014 (the “Effective
Date”).1

 

WHEREAS, You are currently employed as the President and Chief Executive Officer
of Priority Payment Systems LLC pursuant to an Employment Agreement effective
February 23, 2006 (the “Prior Agreement”);

 

WHEREAS, the Companies desire that You serve as President and Chief Executive
Officer of the Companies, and You desire to do so; and

 

WHEREAS, the Parties desire to express the terms and conditions of Your
employment in this Agreement.

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the Parties agree as follows:

 

1.             Employment and Duties

 

A.       Position. You shall serve as the President and Chief Executive Officer
(“CEO”) of the Companies, each of their respective subsidiaries and Parent (the
Companies, such subsidiaries and Parent are collectively referred to herein as
the “Company Parties”).

 

B.       Reporting. You shall report directly to the Board of Managers of Parent
(the “Board”).

 

C.       Duties. As CEO, You shall be the senior-most executive officer of the
Company Parties with the duties, responsibilities, and authority customarily
associated with and consistent with such position. You agree to perform all such
duties that are consistent with Your position.

 

D.       Devotion of Time. You agree to (i) devote substantially all of your
business time, efforts, skill, and energies to Your position, (ii) devote Your
best efforts, skill, and energies to promote and advance the business and/or
interests of the Company Parties, and (iii) devote Your best efforts to fully
perform Your obligations under this Agreement. During Your employment, You will
not render services to any other entity, regardless of whether You receive
compensation, without the prior written consent of the Board. You may, however,
(A) engage in community, charitable, and educational activities, (B) manage Your
personal investments, (C) serve on the Electronic Transaction Association
Presidential Board of Advisors and the Alpharetta Technology Commission, and (D)
with the prior written consent of the Board, serve on other corporate boards or
committees, provided that such activities do not conflict or interfere with the
performance of Your obligations under this Agreement or conflict with the
interests of the Company Parties.

 

 

1 Unless otherwise indicated, all capitalized terms used in this Agreement are
defined in the “Definitions” section attached as Exhibit A. Exhibit A is
incorporated by reference and is included in the Definition of “Agreement.”

 

 

 

 

E.       Company Policies. You agree to comply with the policies and procedures
of the Company Parties as may be adopted and changed from time to time,
including those described in any applicable Company Party employee handbook. If
this Agreement conflicts with such policies or procedures, this Agreement will
control.

 

F.       Service on Board of Managers. You will serve on the Board, any Board of
Managers of the Companies, if elected by the members of Parent and/or the
Companies to serve in such capacity.

 

2.             Term. Your employment relationship with the Companies is at-will.
You may terminate your employment with the Companies at any time and for any
reason whatsoever simply by notifying the Companies. Likewise, the Companies may
terminate your employment at any time with or without cause or advance notice.
The period during which You are employed by the Companies will be referred to as
the “Employment Period.”

 

3.             Compensation, Benefits, and Perquisites.

 

A.            Base Salary. During the Employment Period, the Companies will pay
You an annual base salary of Four Hundred Fifty Thousand Dollars ($450,000.00)
(“Base Salary”), minus applicable withholdings, in accordance with the
Companies’ normal payroll practices, but no less often than monthly. The Board
will review Your Base Salary at least annually to determine whether to increase
Your Base Salary based upon Your performance and the performance of the Company
Parties.

 

B.            Bonus. During the Employment Period, You will be eligible to
receive an annual bonus with a target payment of at least 70% of Your then
current Base Salary (which target payment may be increased, in the discretion of
the Board, to an amount of up to 100% of Your then current Base Salary) if, as
determined by the Board in its sole discretion, Your performance and the Company
Parties’ performance meets certain criteria established from year to year by the
Board (the “Bonus”). You will not receive any Bonus if You are not employed on
the last day of the calendar year for which the Bonus is to be paid, except as
provided in Sections 5 and 6 below. The Bonus will be subject to all applicable
withholdings and will be paid no later than forty-five (45) days after the end
of the calendar year.

 

C.            Vacation. During the Employment Period, You are entitled to four
(4) weeks of paid vacation per calendar year. All vacation must be pre-approved
by the Board.

 

D.            Automobile Expenses. From the date hereof until March 21, 2015,
the Companies shall pay all lease payments under Your automobile lease currently
in effect, and after the expiration of such lease, You shall be eligible for
automobile use expense reimbursement in accordance with the Companies’ business
expense reimbursement policy.

 

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E.            Equity.

 

(i)        If the Companies terminate your employment under Section 4(D)(1), (2)
or (5), Parent shall have the right (but not the obligation) to purchase all or
any portion of the Equity Securities held by You and/or Your Affiliates or
originally issued to You and/or Your Affiliates but held by one or more of Your
and Your Affiliates’ Permitted Transferees at a per Unit price equal to the fair
market value of such Units as determined pursuant to Section 3(E)(iv) as of the
date of such termination. If You terminate Your employment with the Companies
other than for Good Reason, Parent shall have the right (but not the obligation)
to purchase up to 35% of the Equity Securities held by You and/or Your
Affiliates or originally issued to You and/or Your Affiliates but held by one or
more of Your and Your Affiliates’ Permitted Transferees at a per Unit price
equal to the fair market value of such Units as determined pursuant to Section
3(E)(iv) as of the date of such termination. Parent may exercise any such option
by delivery of written notice thereof (a “Repurchase Notice”) to You and/or Your
applicable Affiliates and/or your respective Permitted Transferees within 180
days after such termination of employment. The Repurchase Notice shall state
that Parent has elected to exercise such option and the number and price of the
Units with respect to which such option is being exercised. Notwithstanding
anything to the contrary in the LLC Agreement (which is incorporated by
reference) or any other agreement, Your Equity Securities shall not be subject
to forfeiture under any circumstances, including, but not limited to, a Change
in Control or Your termination of employment for any reason.

 

(ii)       Following any termination of Your employment other than a termination
under Section 4(D)(1), (2) or (5), You (or Your estate and/or beneficiaries) may
submit annual written notice(s) to Parent requiring Parent to purchase Equity
Securities held by You or any of Your Affiliates having a total fair market
value of no more than $2,000,000 per year. Each annual written notice shall be
referred to herein as a “Redemption Request.” You (or Your estate and/or
beneficiaries) shall be permitted to make one (1) Redemption Request during each
annual period following Your termination until Your Equity Securities are
exhausted. The number of Units to be purchased by Parent pursuant to a
Redemption Request shall be determined by dividing the total dollar amount
requested in the Redemption Request by the fair market value of each Unit as
determined pursuant to Section 3(E)(iv) below. Subject to the following
sentence, the Equity Securities subject to a Redemption Request shall be
purchased by Parent within 180 days after receipt of the applicable Redemption
Request (the “Redemption Date”) at a per Unit price equal to the fair market
value of such Units as of the date of such Redemption Request, as determined
pursuant to Section 3(E)(iv) below (the “Redemption Price”). If any payment of
cash is required upon the purchase of Units to be redeemed on the Redemption
Date and such payment would constitute, result in or give rise to any breach or
violation of, or any default or right or cause of action under, any credit
facility agreement by which Parent or any Company Party is, from time to time, a
party, then Parent may defer making such payment until such restriction no
longer exists, provided that the holders of such Units electing to participate
in the Redemption Request shall retain all rights under the LLC Agreement in
connection with such Units as to that number of Units as such unpaid portion
represents until such time as the unpaid portion of the Redemption Price shall
be paid to such holder in full, provided further that, if such cash payment has
been deferred, the Companies shall use their commercially reasonable efforts to
make such cash payment within nine (9) months from the Redemption Request. If on
any applicable Redemption Date the Redemption Price payable upon redemption of
the Units to be redeemed on such Redemption Date is paid or tendered for payment
or deposited with an independent payment agent so as to be available therefor in
a timely manner, then all rights with respect to such Units shall forthwith
after the Redemption Date terminate, except only the right of the holders to
receive the Redemption Price without interest upon surrender of any certificate
or certificates therefor. For purposes of this Section 3(E)(ii), “Parent” shall
include Parent’s successors and assigns, including, without limitation,
successors through merger, name change, consolidation, or sale of a majority of
Parent’s units or assets.

 

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(iii)      At the closing of any purchase and sale of Equity Securities
hereunder, the holders of Units (or such holder’s estate and/or beneficiaries)
to be sold shall deliver, if such Units are certificated, to Parent a
certificate or certificates representing the Units to be purchased by Parent
duly endorsed, or with membership interest (or equivalent) powers duly endorsed,
for transfer with signature guaranteed, free and clear of any lien or
encumbrance, with any necessary transfer tax stamps affixed, and Parent shall
pay to such holder (or such holder’s estate and/or beneficiaries) by certified
or bank check or wire transfer of immediately available federal funds the
purchase price of the Units being purchased by Parent. The delivery of a
certificate or certificates for such Units and/or the acceptance of any purchase
price therefor by any Person selling such Units hereunder shall be deemed a
representation and warranty by such Person that: (i) such Person has full right,
title and interest in and to such Units; (ii) such Person has all necessary
power and authority and has taken all necessary action to sell such Units as
contemplated; and (iii) such Units are free and clear of any and all liens and
encumbrances.

 

(iv)      For purposes of this Section 3(E), the fair market value of any Equity
Securities to be purchased shall be the fair market value thereof as mutually
agreed upon by the Companies and You. In the event that the Companies and You
are unable to reach agreement, fair market value shall be determined by an
appraiser mutually agreed upon by the Companies and You. In the event that the
Companies and You are unable to mutually agree upon an appraiser, fair market
value shall be determined by three appraisers, one such appraiser to be selected
by the Companies, and one such appraiser to be selected by You, and within
thirty (30) days after the delivery of the Repurchase Notice or Redemption
Request, as applicable, the two appraisers thereby selected shall mutually agree
upon a third appraiser. The appraiser(s) shall perform such fair market value
appraisal taking into account all applicable regulatory guidelines, shall
utilize commonly accepted valuation methodologies, and shall value the Companies
as a “going concern.” Each of the Companies and You may provide the appraiser(s)
with such information as they deem relevant to a determination of the fair
market value of the Equity Securities to be purchased; provided, however, that
each appraiser may consider any additional information which he or she may
consider relevant; provided, further, that, notwithstanding anything to the
contrary in this Agreement or any other agreement, the appraiser(s) shall not
consider (i) any discount for restrictions on transferability of the Equity
Securities, the minority interest of the Equity Securities, the non-voting
status of the Equity Securities, lack of marketability of the Equity Securities,
or any similar discount, or (ii) any premium to any control block of units of
the Company. The appraiser(s) shall deliver their respective appraisals within
sixty (60) days after the date of the Repurchase Notice or Redemption Request,
as applicable. The fair market value shall be the average of the two appraisals
closest in value to each other. The Company will pay the cost of all appraisals.

 

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F.            Benefits Plans. You (and Your spouse and the Your eligible
dependents, as applicable) shall be entitled to participate in any employee
benefit plan that the Companies have adopted or may adopt, maintain, or
contribute to for the benefit of its senior executives at a level commensurate
with the Your position.

 

G.            Business and Entertainment Expenses. You shall be reimbursed in
accordance with the Companies’ expense reimbursement policy for all reasonable
and necessary business and entertainment expenses incurred during the Employment
Period.

 

4.             Termination. Either You or the Companies may terminate Your
employment at any time for any or no reason, including any of the following:

 

A.            Mutual written agreement between You and the Companies at any
time;

 

B.            Your death, upon which such termination shall be automatic;

 

C.            Your disability which renders You unable to perform the essential
functions of Your job even with reasonable accommodation for a total period of
180 days, whether or not such days are consecutive;

 

D.            For Cause. For Cause shall mean a termination by the Companies
because of any of the events set forth in this Section 4(D) below, provided
that, on or prior to the date Your employment is terminated by the Companies for
Cause, the Companies must give You written notice specifying in detail each
reason Your employment is terminated for Cause and disclosing any evidence of
Cause (the “Cause Notice”), and the Companies may not rely upon or use any
evidence not disclosed in the Cause Notice to support the termination of Your
employment for Cause. In addition, if a court of competent jurisdiction later
determines that the reason(s) set forth by the Companies in the Cause Notice are
improper or otherwise do not meet the definition of Cause set forth in this
Section (the “Improper Cause Determination”), the damages to which You will be
entitled shall be equal to the greater of (i) the damages flowing from the
Improper Cause Determination, including, but not limited to, Your attorneys’
fees, costs, and expenses incurred in connection with litigation regarding Your
termination, or (ii) the amounts that would have been paid to You had You been
terminated by the Company without Cause under Section 4(G) below plus Your
attorneys’ fees, costs, and expenses incurred in connection with litigation
regarding Your termination ((i) and (ii) the “Minimum Damages Amount”), but in
no event shall the Minimum Damages Amount be construed to limit any other
damages, direct, indirect, consequential, punitive, or otherwise, arising out of
or because of the Improper Cause Determination.

 

1.Your material breach of this Agreement that results or could reasonably be
expected to result in material injury, material damages, material losses or
material costs to the Companies, as reasonably determined by the Board, that has
not been cured by You within thirty (30) days after receipt by You of written
notice from the Companies specifying in detail such breach; provided, however,
that the foregoing right of cure shall not apply to breaches that are not
reasonably curable as determined by the Board and You shall only be entitled to
one such opportunity to cure with respect to each such breach under this
Agreement;

 

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2.Your fraud;

 

3.Your gross negligence, willful misconduct, or material dishonesty that results
or could reasonably be expected to result in material injury, material damages,
material losses or material costs to the Companies, as reasonably determined by
the Board;

 

4.Your failure to follow the reasonable direction of any individual or board to
which you report that results or could reasonably be expected to result in
material injury, material damages, material losses or material costs to the
Companies, as reasonably determined by the Board. For any such failure listed in
this subsection 4, the Companies shall first give You written notice setting
forth with specificity the reasons that the Companies believe You are failing,
and thirty (30) days to cure such failure; provided, however, that the foregoing
right of cure shall not apply to breaches that are not reasonably curable as
determined by the Board and You shall only be entitled to one such opportunity
to cure with respect to each such breach under this Agreement; or

 

5.Your final conviction of (i) a felony or (ii) a crime involving moral
turpitude.

 

E.            Your resignation for other than Good Reason.

 

F.            Your resignation for Good Reason.

 

G.            Without Cause. Without Cause will mean any termination of
employment by the Companies which is not defined in sub-sections A-F above.

 

5.             Companies’ Post-Termination Obligations

 

A.            If this Agreement terminates for any of the reasons listed in
Sections 4(A)-4(E) of this Agreement, then the Companies will pay to You (i) all
accrued but unpaid wages, based on Your then current Base Salary, through the
termination date, (ii) all accrued but unused vacation through the termination
date, and (iii) any earned but unpaid Bonus under Section 3(B) above for the
calendar year prior to the termination date, to be paid in a lump sum cash
payment no later than thirty (30) days following Your termination date;
provided, however, that if this Agreement terminates for Cause under Section
4(D) above, then the Companies will pay only the amount listed in Sections
5(A)(i) and 5(A)(ii) above. The Companies will have no other obligations to You
(except the put right described in Section 3(E)(ii) above, if applicable),
including under any provision of this Agreement, Company policy, or otherwise,
unless the Companies breach this Agreement; however, You will continue to be
bound by Section 6(D) and all other post-termination obligations to which You
are subject, including, but not limited to, the obligations contained in this
Agreement.

 

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B.            If this Agreement terminates for any reason listed in Sections
4(F) or 4(G) of this Agreement, then the Companies will pay You the amounts
described in Section 5(A)(i)-(iii) above, to be paid in a lump sum cash payment
no later than thirty (30) days following Your termination date, and will comply
with the put right described in Section 3(E)(ii) above, if applicable. In
addition, after Your “separation from service” (as defined in Section
409A(a)(2)(A)(i) of the Internal Revenue Code of 1986, as amended (the “Code”))
from the Companies, the Companies will:

 

(i)        pay You a separation payment equal to the sum of (x) twenty-four (24)
months of Your then current Base Salary, plus (y) 35% of Your then current Base
Salary (provided, however, that if such termination occurs within six (6) months
prior to a Change of Control Transaction, you shall be entitled under this
clause (y) to an amount equal to 70% of Your then current Base Salary (the
“Separation Payment”), to be paid in equal periodic installments over a period
of twenty-four (24) months based on current company payroll practices of every
other Friday (each a “Payroll Date”) beginning with the Payroll Date that
immediately follows the date of Your separation from service by at least sixty
(60) days; and

 

(ii)       reimburse Your and Your eligible dependents’ COBRA premium under the
Companies’ major medical group health plan and dental plan on a monthly basis
for twenty-four (24) months following Your termination.

 

The separation payments set forth in Sections 5(B)(i) are subject to all
applicable withholdings, including, but not limited to, withholdings required by
Code §3401. Except as set forth in this Section 5(B) (and the Put Right
described in Section 3(E)(ii) above, if applicable), the Companies will have no
other obligations to You, including under any provision of this Agreement,
Company policy, or otherwise, unless the Companies breach this Agreement. The
separation payments and benefits set forth in this Section 5(B) (and the put
right described in Section 3(E)(ii) above, if applicable) will constitute full
satisfaction of the Companies’ obligations under this Agreement, unless the
Companies breach this Agreement. The Companies’ obligation to provide the
payments and benefits set forth in this Section 5(B) above will be conditioned
upon the following (the “Separation Conditions”):

 

(y)Your timely execution and non-revocation of a Separation & Release Agreement
in a form prepared by the Companies by which You release each of the Company
Parties and their respective Affiliates, directors, managers, officers,
shareholders, members, employees, agents, attorneys, successors and assigns from
any and all liability and claims of any kind so that the Separation & Release
Agreement will become binding and irrevocable within sixty (60) days of Your
separation from service; and

 

(z)Your compliance with the restrictive covenants (Section 6(D)) and all
post-termination obligations, including, but not limited to, the obligations
contained in this Agreement.

 

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If You do not execute an effective Separation & Release Agreement as set forth
above, the Companies will not be obligated to and will not provide any payments
or benefits to You under this Section 5(B). The Companies’ obligation to make
the Separation Payments set forth in Section 5(B)(i) above will terminate
immediately upon any breach by You of any post-termination obligations to which
You are subject, including, but not limited to, Your obligation to comply with
the restrictive covenants set forth in Section 6(D) below. If You breach any of
Your post-termination obligations, You will return to the Companies any amounts
You received under Section 5(B)(i) above within ten (10) days of notice of such
breach from the Companies.

 

If Your employment terminates for any reason entitling You to receive separation
payments and/or benefits under Section 5(B) above, then in no event shall You be
obligated to seek other employment or take any other action by way of mitigation
of the amounts payable to You under Section 5(B) above, and such amounts shall
not be reduced, regardless of whether You obtain other employment or become
self-employed.

 

Notwithstanding any provisions of this Agreement to the contrary, in the event
of a “change in the ownership of,” a “change in the effective control of,” or a
“change in the ownership of a substantial portion of,” the Company (within the
meaning of Treas. Reg. §§1.280G-1, Q&A-27, -28 or -29) (a “280G Change of
Control”), if You are a “disqualified individual” (within the meaning of Treas.
Reg. §1.280G-1, Q&A-15) with respect to the Company and such 280G Change of
Control, then You hereby irrevocably waive and forfeit any and all of Your
rights or entitlements to receive any portion of any “parachute payments” (as
defined in Code §280G(b)(2)) (the “280G Payments”) which You would receive or to
which You would otherwise be entitled pursuant to this Agreement or any other
agreements or documents governing any of such 280G Payments to the extent that,
if such 280G Payments occurred, they would cause You to receive an “excess
parachute payment (within the meaning of Code §280G(b)(1)). It is intended by
the foregoing that Your 280G Payments shall be reduced such that no portion of
such 280G Payments shall constitute “excess parachute payments” under Code
§280G(b)(1), and that no portion of such 280G Payments shall subject You to
excise tax under Code §4999, and that You shall receive the maximum amount of
the 280G Payments possible subject to this waiver and forfeiture provision. You
agree that the portion of Your 280G Payments that is not subject to this waiver
and forfeiture provision is only so much of the value of Your 280G Payments as
equals $0.01 less than three (3) times Your “base amount” (as defined in Treas.
Reg. §1.280G-1, Q&A-34), and that the remainder of Your 280G Payments shall be
considered waived and forfeited. You shall be entitled to prioritize Your 280G
Payments in writing to the Company, if done in a timely manner, and the Company
shall use its best efforts to respect such priority in implementing the
foregoing waiver and forfeiture provisions.

 

6.             Your Post-Termination Obligations.

 

A.           Return of Materials. Upon the termination of Your employment for
any reason or upon the Companies’ request at any time, You will immediately
return to each Company Party all of such Company Party’s property, including,
but not limited to, mobile phone, personal digital assistant (PDA), keys,
passcards, credit cards, confidential or proprietary lists (including, but not
limited to, customer, supplier, licensor, and client lists), rolodexes, tapes,
laptop computer, software, computer files, marketing and sales materials, and
any other property, record, document, or piece of equipment belonging to such
Company Party. You will not (i) retain any copies of any Company Party’s
property, including any copies existing in electronic form, which are in Your
possession, custody or control, or (ii) destroy, delete, or alter any Company
Party’s property, including, but not limited to, any files stored
electronically, without the Companies’ prior written consent. The obligations
contained in this Section will also apply to any property which belongs to a
third party, including, but not limited to, (i) any entity which is Affiliated
or related to any Company Party, or (ii) any Company Party’s customers,
licensors, or suppliers.

 

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B.           Set-Off. If You have any outstanding obligations to any Company
Party upon and/or following the termination of Your employment for any reason,
You hereby authorize the Companies to deduct any amounts owed to any Company
Party from (i) Your final paycheck, and/or (ii) any amounts that would otherwise
be due to You, including, but not limited to, under Section 5 above, but not
from any amounts that constitute deferred compensation subject to Code §409A and
not exempt therefrom. To the extent Your final paycheck and/or amounts due to
You by the Companies are insufficient to satisfy Your outstanding obligations to
any Company Parties, You agree to repay the Companies all amounts owed within
ten (10) days after your receive the Companies’ written request for such
repayment.

 

C.           Non-Disparagement. During Your employment and following the
termination of Your employment with the Companies for any reason, You will not
make any disparaging or defamatory statements, whether written or verbal,
regarding any Company Party, or any of their respective Affiliates, directors,
managers, officers, shareholders, members, employees, agents, attorneys,
successors or assigns, and the Companies will not make any disparaging or
defamatory statements, whether written or verbal, regarding You.

 

D.           Restrictive Covenants. You acknowledge and agree that: (i) Your
position is a position of trust and responsibility with access to Confidential
Information, Trade Secrets, and information concerning employees and customers
of the Company Parties; (ii) the Trade Secrets and Confidential Information, and
the relationship between each Company Party and each of its employees and
customers, are valuable assets of such Company Party which may not be used for
any purpose other than the business of such Company Party; (iii) the names of
Customers are considered Confidential Information of the Business which
constitutes valuable, special, and unique property of the Company Parties; (iv)
Customer lists and Customer information which have been compiled by the Company
Parties represents a material investment of the Company Parties’ time and money;
(v) the Company Parties will invest their time and money in the development of
Your skills in the Business; and (vi) the restrictions contained in this
Agreement, including, but not limited to, the restrictive covenants set forth in
this Section 6(D) below, are reasonable and necessary to protect the legitimate
business interests of the Company Parties, and they will not impair or infringe
upon Your right to work or earn a living when Your employment with the Companies
ends.

 

1.        Trade Secrets and Confidential Information. You represent and warrant
that: (i) You are not subject to any legal or contractual duty or agreement that
would prevent or prohibit You from performing the duties contemplated by this
Agreement or otherwise complying with this Agreement, and (ii) You are not in
breach of any legal or contractual duty or agreement, including any agreement
concerning trade secrets or confidential information owned by any other party.

 

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You agree that You will not: (i) use, disclose, or reverse engineer the Trade
Secrets or the Confidential Information for any purpose other than the business
of the Company Party’s, except as authorized in writing by the Companies; (ii)
during Your employment with the Companies, use, disclose, or reverse engineer
(a) any confidential information or trade secrets of any former employer or
third party, or (b) any works of authorship developed in whole or in part by You
during any former employment or for any other party, unless authorized in
writing by the former employer or third party; or (iii) upon Your resignation or
termination (a) retain Trade Secrets or Confidential Information, including any
copies existing in any form (including electronic form), which are in Your
possession, custody or control, or (b) destroy, delete, or alter the Trade
Secrets or Confidential Information without the Companies’ written consent.

 

The confidentiality, property, and proprietary rights protections available in
this Agreement are in addition to, and not exclusive of, any and all other
rights to which the Company Parties are entitled under federal and state law,
including, but not limited to, rights provided under copyright laws, trade
secret and confidential information laws, and laws concerning fiduciary duties.

 

2.       Non-Disclosure of Customer Information. During the Restricted Period,
You will not, except as authorized by the Companies, divulge or make accessible
to any Person (i) the names of Customers, or (ii) any information contained in
Customer’s accounts.

 

3.       Non-Solicitation of Customers and Suppliers. During the Restricted
Period, You will not, directly or indirectly, solicit any Customer or supplier
of any Company Party for the purpose of selling or providing any products or
services competitive with the Business.

 

4.       Non-Recruit of Employees. During the Restricted Period, You will not,
directly or indirectly, for Your benefit or for the benefit of any Person other
than any Company Party (i) solicit or assist any Person to solicit, recruit, or
induce any officer, director, manager, executive, employee or consultant of any
Company Party to (A) terminate his or her employment relationship with any
Company Party, or (B) work for any other Person, or (ii) hire or cause to be
hired any Person who is then, or who will have been at any point in time during
the Restricted Period, an officer, a director, a manager, an executive, an
employee or a consultant of any Company Party.

 

5.       Non-Competition. During the Restricted Period, You shall not engage or
participate, directly or indirectly, as principal, agent, executive, director,
proprietor, joint venturer, trustee, employee, employer, consultant,
stockholder, partners or in any other capacity whatsoever, in the conduct or
management of, or fund, invest in, lend to, own any stock or any other equity or
debt investment in, or provide any services of any nature whatsoever to or in
respect of any business that is competitive with or in the same line of business
as the Business in the United States; provided, however, that nothing in this
Section 6(D)(5) shall prohibit You from being a passive beneficial owner of less
than two percent (2%) of the outstanding stock of any publicly-traded
corporation.

 

11 

 

 

6.       Scope. You acknowledge that (A) the markets served by the Company
Parties are intended to be national in scope and not dependent on the geographic
location of the executive personnel or the businesses by which they are
employed; and (B) the above covenants are manifestly reasonable on their face,
and the Parties expressly agree that such restrictions have been designed to be
reasonable and no greater than is required for the protection of the Company
Parties and are a significant element of the consideration hereunder. If the
final judgment of a court of competent jurisdiction declares that any term or
provision of this Section 6 is invalid or unenforceable, the Parties agree that
the court making the determination of invalidity or unenforceability shall have
the power to reduce the scope, duration or area of the term or provision, to
delete specific words or phrases, or to replace any invalid or unenforceable
term or provision with a term or provision that is valid and enforceable and
that comes closest to expressing the intention of the invalid or unenforceable
term or provision, and this Agreement shall be enforceable as so modified to
cover the maximum duration, scope or area permitted by law.

 

E.           Post-Employment Disclosure. During the Restricted Period, You will
provide a copy of Section 6(D) and Exhibit A of this Agreement to persons and/or
entities for whom You work or consult as an owner, partner, joint venturer,
employee or independent contractor. If, following the Employment Period, but
during the Restricted Period, You work or consult for another Person as an
owner, partner, joint venturer, employee or independent contractor, You will
provide the Companies with such Person’s name, the nature of such Person’s
business, Your job title, and a general description of the services You will
provide.

 

7.             Work Product. Your employment duties may include inventing in
areas directly or indirectly related to the business of the Company Parties or
to a line of business that the Company Parties may reasonably be interested in
pursuing. All Work Product will constitute work made for hire. If (i) any of the
Work Product may not be considered work made for hire, or (ii) ownership of all
right, title, and interest to the legal rights in and to the Work Product will
not vest exclusively in the applicable Company Party, then, without further
consideration, You assign all presently-existing Work Product to such Company
Party, and agree to assign, and automatically assign, all future Work Product to
such Company Party.

 

Each Company Party will have the right to obtain and hold in its own name
copyrights, patents, design registrations, proprietary database rights,
trademarks, rights of publicity, and any other protection available in the Work
Product. At the Companies’ request, You agree to perform, during or after Your
employment with the Companies, any acts to transfer, perfect and defend
applicable Company Party’s ownership of the Work Product, including, but not
limited to: (i) executing all documents (including a formal assignment to such
Company Party) necessary for filing an application or registration for
protection of the Work Product (an “Application”), (ii) explaining the nature of
the Work Product to persons designated by the Companies, (iii) reviewing
Applications and other related papers, or (iv) providing any other assistance
reasonably required for the orderly prosecution of Applications.

 

You agree to provide the Companies with a written description of any Work
Product in which You are involved (solely or jointly with others) and the
circumstances attendant to the creation sufficient of such Work Product.

 

12 

 

 

8.             License. During Your employment and after Your employment with
the Companies ends, You grant to the Companies an irrevocable, nonexclusive,
worldwide, royalty-free license to: (i) make, use, sell, copy, perform, display,
distribute, or otherwise utilize copies of the Licensed Materials, (ii) prepare,
use and distribute derivative works based upon the Licensed Materials, and (ii)
authorize others to do the same. You will notify the Companies in writing of any
Licensed Materials You deliver to the Companies.

 

9.             Release. During Your employment and after Your employment with
the Companies ends, You consent to the Company Parties’ use of Your image,
likeness, voice, or other characteristics in the Company Parties’ products or
services. You release each Company Party from any causes of action which You
have or may have arising out of the use, distribution, adaptation, reproduction,
broadcast, or exhibition of such characteristics. You represent that You have
obtained, for the benefit of the Company Parties, the same release in writing
from all third parties whose characteristics are included in the services,
materials, computer programs and other deliverables that You provide to the
Company Parties.

 

10.           Injunctive Relief. You agree that if You breach any portion of
Section 6(D) of this Agreement: (i) the Company Parties would suffer irreparable
harm; (ii) it would be difficult to determine damages, and money damages alone
would be an inadequate remedy for the injuries suffered by the Company Parties,
and (iii) if any Company Party seeks injunctive relief to enforce this
Agreement, You will waive and will not (a) assert any defense that such Company
Party has an adequate remedy at law with respect to the breach, (b) require that
such Company Party submit proof of the economic value of any Trade Secret or
Confidential Information, or (c) require such Company Party to post a bond or
any other security. Nothing contained in this Agreement will limit such Company
Party’s right to any other remedies at law or in equity. You acknowledge that
the Company Parties and their respective Affiliates are express third-party
beneficiaries of this Agreement and that they may enforce these rights as third
party beneficiaries.

 

11.           Independent Enforcement. The covenants set forth in Section 6(D)
of this Agreement will be construed as agreements independent of (i) any other
agreements, or (ii) any other provision in this Agreement, and the existence of
any claim or cause of action by You against any Company Party, whether
predicated on this Agreement or otherwise, regardless of who was at fault and
regardless of any claims that either You or any Company Party may have against
the other, will not constitute a defense to the enforcement by any Company Party
of the covenants set forth in Section 6(D) of this Agreement. No Company Party
will be barred from enforcing the restrictive covenants set forth in Section
6(D) of this Agreement by reason of any breach of (i) any other part of this
Agreement, or (ii) any other agreement with You.

 

12.           Severability. The provisions of this Agreement are severable. If
any provision is determined to be invalid, illegal, or unenforceable, in whole
or in part, the remaining provisions and any partially enforceable provisions
will remain in full force and effect.

 

13.           Attorneys’ Fees. In the event of litigation relating to this
Agreement, the prevailing party will be entitled to recover attorneys’ fees and
costs of litigation in addition to all other remedies available at law or in
equity. If the Companies terminate You without Cause or You resign for Good
Reason, the Companies shall reimburse Your reasonable legal fees incurred in
connection with the negotiation and preparation of any separation and release
agreement executed by You, upon presentation of a bill for such fees.

 

13 

 

 

14.           Waiver. Either Party’s failure to enforce any provision of this
Agreement will not act as a waiver of that or any other provision. Either
Party’s waiver of any breach of this Agreement will not act as a waiver of any
other breach.

 

15.           Entire Agreement. This Agreement, including Exhibit A and the LLC
Agreement which are incorporated by reference, constitutes the entire agreement
between the Parties concerning the subject matter of this Agreement. This
Agreement supersedes any prior communications, agreements or understandings,
whether oral or written, between the Parties relating to the subject matter of
this Agreement, including the Prior Agreement. Other than terms of this
Agreement, no other representation, promise or agreement has been made with You
to cause You to sign this Agreement. To the extent anything in this Agreement
conflicts or is inconsistent with any other agreement, including, but not
limited to, any equity agreement between You and Priority Investment Holdings
LLC or any Company Party, regardless of whether such other agreement is executed
before, on, or after the Effective Date, the Parties understand and agree that
this Agreement shall control.

 

16.           Amendments. This Agreement can be amended, supplemented or
changed, and any provision hereof can be waived, only by written instrument
making specific reference to this Agreement signed by You, in the case of an
amendment, supplement, modification or waiver sought to be enforced against You,
or signed by the Companies and approved by the Board, in the case of an
amendment, supplement, modification or waiver sought to be enforced against the
Companies.

 

17.           Successors and Assigns; Third Party Beneficiaries. This Agreement
will be assignable to, and will inure to the benefit of, the Companies’
successors and assigns, including, without limitation, successors through
merger, name change, consolidation, or sale of a majority of the Companies’
units or assets, and will be binding upon You. You will not have the right to
assign Your rights or obligations under this Agreement. The covenants contained
in Section 6(D) of this Agreement will survive cessation of Your employment with
the Companies, regardless of who causes the cessation or the reason for
cessation. The Parties agree that each Company Party, including Parent, shall be
an express third party beneficiary of this Agreement, including Section 6, and
shall be entitled to enforce the provisions hereof as if such Company Party were
a party hereto. There shall be no third party beneficiaries hereof except as
expressly provided herein.

 

18.           Governing Law; Waiver of Jury Trial. The laws of the State of
Georgia will govern this Agreement. If Georgia’s conflict of law rules would
apply another state’s laws, the Parties agree that Georgia law will still
govern. EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE
UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND
THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY
RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION
DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY
TRANSACTION DOCUMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED IN
CONNECTION HEREWITH OR THEREWITH, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR
THEREBY, OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS
OF THE PARTIES OR ANY OF THEM IN RESPECT OF THIS AGREEMENT. EACH PARTY CERTIFIES
AND ACKNOWLEDGES THAT (i) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER
PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT,
IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (ii) EACH SUCH
PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (iii) EACH
SUCH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (iv) EACH SUCH PARTY HAS BEEN
INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE WAIVERS AND
CERTIFICATIONS IN THIS SECTION. EACH PARTY AGREES THAT THE OTHER MAY FILE A COPY
OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE
PARTIES TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

 

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19.           Notice. Whenever any notice is required, it will be given in
writing addressed as follows:

 

To Companies: c/o Priority Holdings, LLC   2001 Westside Parkway   Suite 155  
Alpharetta, Georgia 30004   Attn: Board of Managers     To Executive: John V.
Priore   260 Ardsley Lane   Alpharetta, GA 30005

 

Notice will be deemed given and effective three (3) days after the deposit in
the U.S. mail of a writing addressed as above and sent first class mail,
certified, return receipt requested, or when actually received. Either Party may
change the address to which notices will be delivered or mailed by notifying the
other party of such change in accordance with this Section.

 

20.           Consent to Jurisdiction and Venue. You agree that any claim
arising out of or relating to this Agreement will be (i) brought in the Superior
Court of Fulton County, Georgia, or (ii) brought in or removed to the United
States District Court for the Northern District of Georgia, Atlanta Division.
You consent to the personal jurisdiction of the courts identified above. You
waive (i) any objection to jurisdiction or venue, or (ii) any defense claiming
lack of jurisdiction or improper venue, in any action brought in such courts.

 

21.           AFFIRMATION. YOU ACKNOWLEDGE THAT YOU HAVE CAREFULLY READ THIS
AGREEMENT, YOU KNOW AND UNDERSTAND ITS TERMS AND CONDITIONS, AND YOU HAVE HAD
THE OPPORTUNITY TO ASK THE COMPANIES ANY QUESTIONS YOU MAY HAVE HAD PRIOR TO
SIGNING THIS AGREEMENT.

 

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22.           Code §409A Compliance.

 

a.       In General. This Agreement shall be interpreted and administered in a
manner so that any amount or benefit payable hereunder shall be paid or provided
in a manner that is either exempt from, or compliant with, the requirements of
Code §409A and applicable Internal Revenue Service guidance and Treasury
Regulations issued thereunder. Nevertheless, the tax treatment of the benefits
provided under the Agreement is not warranted or guaranteed. Neither the
Companies, nor their directors, officers, employees, or advisers, shall be held
liable for any taxes, interest, penalties, or other monetary amounts owed by the
Executive as a result of the application of Code §409A.

 

b.       Reimbursements and In-Kind Benefits. All reimbursements and in-kind
benefits provided under this Agreement that are includible in Executive’s
federal gross taxable income shall be made or provided in accordance with the
requirements of Code §409A, including the requirement that (i) any reimbursement
is 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 benefit 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 was incurred, and (iv) the right to reimbursement or in-kind
benefits is not subject to liquidation or exchange for another benefit.

 

c.       Installment Payments. Any right to a series of installment payments
under this Agreement shall, for purposes of Code §409A, be treated as a right to
a series of separate payments.

 

23.           Counterparts. This Agreement and any agreement referenced herein
may be executed simultaneously in two or more counterparts, each of which shall
be deemed an original but which together shall constitute one and the same
instrument. Delivery of an executed counterpart of a signature page to this
Agreement by facsimile, .pdf or other electronic means shall be effective as
delivery of a manually executed counterpart to the Agreement.

 

[Signatures on the following page]

 

16 

 

 

IN WITNESS WHEREOF, the Parties hereto have executed this Executive Employment
Agreement as of the day and year first above written.

        PRIORITY PAYMENT SYSTEMS HOLDINGS LLC       By:

/s/ Richard J. Harris, Jr.

    Name: Richard J. Harris, Jr.     Title: Chief Operating Officer

 

[Signature Page to Employment Agreement of John V. Priore]

 

 

 

 

IN WITNESS WHEREOF, the Parties hereto have executed this Executive Employment
Agreement as of the day and year first above written.

        PIPELINE CYNERGY HOLDINGS, LLC         By:

/s/ Richard J. Harris, Jr.

    Name: Richard J. Harris, Jr.     Title: Chief Operating Officer

 

[Signature Page to Employment Agreement of John V. Priore]

 

 

 

 

IN WITNESS WHEREOF, the Parties hereto have executed this Executive Employment
Agreement as of the day and year first above written.

        Solely for purposes of Section 3(E):         PRIORITY HOLDINGS, LLC    
    By:

/s/ Richard J. Harris, Jr.

    Name: Richard J. Harris, Jr.     Title: Chief Operating Officer

 

[Signature Page to Employment Agreement of John V. Priore]

 

 

 

 

IN WITNESS WHEREOF, the Parties hereto have executed this Executive Employment
Agreement as of the day and year first above written.

     

/s/ John V. Priore

  John V. Priore

 

[Signature Page to Employment Agreement of John V. Priore]

 

 

 

 

EXHIBIT A

 

DEFINITIONS

 

A.“Affiliate” means, with respect to any Person, any other Person directly or
indirectly controlling, controlled by or under common control with such Person,
and in the case of any natural Person shall include all relatives and family
members of such Person.

 

B.“Business” means the business of providing financial transaction processing
services to merchants for transactions conducted by credit card, debit card,
stored value card, smart card, or other non-cash financial transaction device.

 

C.“Change of Control Transaction” shall have the meaning set forth in the LLC
Agreement.

 

D.“Confidential Information” means (a) any confidential or proprietary
information of any Company Party, to the extent not considered a Trade Secret
under applicable law, and (b) information of any third party provided to any
Company Party which such Company Party is obligated to treat as confidential,
including, but not limited to, information provided to any Company Party by its
licensors, suppliers, or customers. Confidential Information includes, but is
not limited to, (i) future business plans, (ii) the composition, description,
schematic or design of products, future products or equipment of any Company
Party or any third party, (iii) communication systems, audio systems, system
designs and related documentation, (iv) advertising or marketing plans, (v)
information regarding independent contractors, employees, clients, licensors,
suppliers, customers, or any third party, including, but not limited to,
customer lists compiled by any Company Party, and customer information compiled
by any Company Party, and (vi) information concerning any Company Party’s or a
third party’s financial structure and methods and procedures of operation.
Confidential Information will not include any information that (i) is or becomes
generally available to the public other than as a result of an unauthorized
disclosure, (ii) has been independently developed and disclosed by others
without violating this Agreement or the legal rights of any party, or (iii)
otherwise enters the public domain through lawful means.

 

E.“Customer” means any Person to whom any Company Party has (i) sold its
products or services, or (ii) solicited to sell its products or services.

 

F.“Equity Securities” shall have the meaning set forth in the LLC Agreement.

 

G.“Good Reason” will exist if (i) without Your written consent, (1) the
Companies materially reduce Your then current authority, title, duties, or
responsibilities, (2) the Companies materially reduce Your then current Base
Salary or the benefits to which You are entitled as of the Effective Date, (3)
the Companies require You to report to any person or entity other than the
Board, (4) the Companies commit a material breach of this Agreement, (5)
Companies materially change the geographic location at which You must perform
services for the Companies, (6) the Companies, with the actual knowledge of the
Board, provide processing services with respect to adult entertainment merchant
accounts or (7) a successor to the Companies fails to assume this Agreement in
writing upon becoming a successor or assignee of the Companies; (ii) for
subsections (1)-(6) above, You provide written notice to the Companies of any
such action within ninety (90) days of the date on which such action first
occurs and provide the Companies with thirty (30) days to remedy such action
(the “Cure Period”); (iii) for subsections (1)-(6) above, the Companies fail to
remedy such action within the Cure Period; and (iv) for subsections (1)-(6)
above, You resign within thirty (30) days of the expiration of the Cure Period;
provided, however, that the foregoing right of cure shall not apply to actions
that are not reasonably curable and the Companies shall only be entitled to one
such opportunity to cure with respect to each such action under this Agreement.
Good Reason shall not include any isolated, insubstantial, or inadvertent action
that (y) is not taken in bad faith, and (z) is remedied by the Companies within
the Cure Period.

 

 

 

 

H.“Licensed Materials” means any materials that You utilize for the benefit of
any Company Party, or deliver to any Company Party or any Company Party’s
customers, which (i) do not constitute Work Product, (ii) are created by You or
of which You are otherwise in lawful possession, and (iii) You may lawfully
utilize for the benefit of, or distribute to, any Company Party or any Company
Party’s customers.

 

I.“LLC Agreement” means that certain Amended and Restated Limited Liability
Company Agreement of Parent, dated as of the date hereof.

 

J.“Permitted Transferee” shall have the meaning set forth in the LLC Agreement.

 

K.“Person” means any individual, corporation, limited liability company,
partnership, firm, joint venture, association, joint-stock company, trust,
unincorporated organization, governmental body or other entity.

 

L.“Restricted Period” means the time period during Your employment with the
Companies, and for twenty-four (24) months year after Your employment with the
Companies ends.

 

M.“Trade Secrets” means information of any Company Party, and its licensors,
suppliers, clients, and customers, without regard to form, including, but not
limited to, technical or nontechnical data, a formula, a pattern, a compilation,
a program, a device, a method, a technique, a drawing, a process, financial
data, financial plans, product plans, a list of actual customers, clients,
licensors, or suppliers, or a list of potential customers, clients, licensors,
or suppliers which is not commonly known by or available to the public and which
information (i) derives economic value, actual or potential, from not being
generally known to, and not being readily ascertainable by proper means by,
other persons who can obtain economic value from its disclosure or use, and (ii)
is the subject of efforts that are reasonable under the circumstances to
maintain its secrecy.

 

N.“Unit” shall have the meaning set forth in the LLC Agreement.

 

 

 

 

O.“Work Product” means (a) any data, databases, materials, documentation,
computer programs, inventions (whether or not patentable), designs, and/or works
of authorship, including but not limited to, discoveries, ideas, concepts,
properties, formulas, compositions, methods, programs, procedures, systems,
techniques, products, improvements, innovations, writings, pictures, audio,
video, images of You, and artistic works, and (b) any subject matter protected
under patent, copyright, proprietary database, trademark, trade secret, rights
of publicity, confidential information, or other property rights, including all
worldwide rights therein, that is or was conceived, created or developed in
whole or in part by You while employed by any Company Party and that either (i)
is created within the scope of Your employment, (ii) is based on, results from,
or is suggested by any work performed within the scope of Your employment and is
directly or indirectly related to the Business or a line of business that any
Company Party may reasonably be interested in pursuing, (iii) has been or will
be paid for by any Company Party, or (iv) was created or improved in whole or in
part by using any Company Party’s time, resources, data, facilities, or
equipment.