seaway8k060108ex10b.htm


    
      

      

    

    Exhibit
10-B

    
      EMPLOYMENT AGREEMENT

       

      THIS
EMPLOYMENT AGREEMENT made this 1st day
of June,
2008
(the “Effective Date”), by and between CHRISTOPHER
M. SWARTZ, individually, whose address is 234 Paddock, Watertown,
New York 13601 (hereinafter, at times, referred to as the "Executive"), and
SEAWAY
VALLEY CAPITAL CORPORATION (“Seaway” or the “Company”), a corporation of
the State of Delaware, whose address is 10-18 Park Street, 2nd
Floor, Gouverneur, New York.  Company and Executive shall hereinafter
collectively, at times, be referred to as the "Parties" or individually, at
times, as a "Party" and this Employment Agreement shall hereinafter, at times,
be referred to as the "Agreement."

       

      WHEREAS:

       

      
        	
                A.

              	
                Company
      currently operates retail stores and is also positioned to capitalize on
      the merging of its operations with those of the operations of North
      Country Hospitality, Inc. (together, the
  “Business”);

              


      

       

      
        	
                B.

              	
                Company
      desires to obtain the services of Executive as its employee in the
      capacity of VICE PRESIDENT and CHIEF OPERATING OFFICER, and Executive
      desires to provide services to Company as its employee, in such
      capacities, and in accordance with the terms, conditions and covenants set
      forth in this Agreement; and,

              


      

       

      
        	
                C.

              	
                Company
      would not have provided Executive with the opportunities, information and
      other benefits hereinafter described if Executive had not agreed to
      provide full time and exclusive services (as delimited in Section 1C
      hereof) relative to the Business for Company as specified hereunder for
      the full term hereof and pursuant to the terms, conditions and covenants
      of this Agreement.

              


      

       

      NOW THEREFORE THIS AGREEMENT
WITNESSETH THAT in consideration of the premises and the mutual
covenants, agreements, representations and warranties contained herein, and
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereto hereby agree as follows:

       

      1.           EMPLOYMENT

       

       
A.       Employment

       

      Company
hereby hires and employs Executive to serve as its Vice President and Chief
Operating Officer. Executive shall have those duties and responsibilities as
shall be determined, from time to time, by Company’s Board of
Directors.

       

       
B.       Acceptance

       

      Executive
hereby accepts its employment hereunder, subject to all of the terms,
conditions, and covenants contained in this Agreement.

       

      
        	
                 
      

              	
                C.

              	
                Loyalty

              


      

       

      Subject
to his obligations to those entities identified as “other employment” on Exhibit
A hereto, which Executive covenants will not materially interfere with his
services to the Company,  Executive shall devote his full and
exclusive time relative to the Business, attention and best efforts to the
performance of his duties under this Agreement. During the term of his
employment under this Agreement, Executive shall not at any time or place or to
any extent whatsoever, either directly or indirectly, without the express prior
written consent of Company obtained in each instance, voluntarily engage in any
conduct, litigation, business practice, governmental, regulatory or
administrative agency’s investigation or dispute or in any activity whatsoever
competitive with, adverse to or detrimental to the business or affairs of
Company, whether alone, as a partner, or as a past or present officer, director,
employee, agent, member or shareholder or in any other capacity whatsoever, of
any company or other entity except under, and pursuant to, this Agreement, and
all fees, commissions, or other income attributable to Executive's business
services relative to the Business during the term of this Agreement shall inure
to and belong to and be the sole property of Company, as the case may be,
subject to the terms and conditions set forth below.

       

      
        
           


        

        
           


          
            

          

        

        
           


        

      

       

      Other
than for activities and those activities directly related to those listed below
in Exhibit A, Executive shall not act as an employee, consultant,
independent contractor or otherwise for any other person, corporation, LLC, LLP,
joint venture, partnership or other entity whatsoever nor conduct any other
business whatsoever during the term of this Agreement without the express
written consent of Company obtained in each instance in advance except as
provided herein. Notwithstanding the foregoing to the contrary, nothing herein
shall prevent Executive from being a passive investor or receiving dividend or
interest income or capital gains from investments, all of which Company
acknowledges it shall have no entitlement to. Furthermore, Executive may serve
as a member of a board of directors or other organization(s) which do not
compete with Company and which do not pose any conflict of interest or
appearance of conflict of interest, and may participate in other professional,
civic, governmental organizations or activities which do not materially affect
Executive’s ability to carry out its full time duties hereunder. Any and all
such activities shall be disclosed to Company’s Board of Directors, in advance,
during the term of this Agreement.

       

       
D.      Location

       

      Executive
shall perform services for Company at such reasonable locations as may be
mutually agreed upon by the Parties from time to time.

       

      2.           RESPONSIBILITIES
OF EXECUTIVE

       

       
A.       Best Efforts

       

      Executive
shall use his best efforts on a full time and regular basis (as delimited in
Section 1C above) to perform those services which are customary and consistent
with Executive’s role with Company, or as otherwise directed by Company’s Board
of Directors and assist Company in a diligent and aggressive manner with the
operation and growth of Company and in obtaining new business, acquisition
targets, technologies, strategic alliances and other growth producing
opportunities.

       

       
B.       Cooperation and Conduct

       

      Executive
shall work with Company to assure that he at all times cooperates with Company
personnel, conducts himself in a manner consistent with the high image,
reputation and credibility of Company and engages in no activities which reflect
adversely on Company.

       

       
C.       Reports

       

      Executive
shall furnish Company, at intervals as reasonably requested by Company, with all
financial reports, budgets, forecasts, and such other information regarding his
business efforts on behalf of Company under this Agreement as Company may
request from time to time.

       

       
D.      Meetings

       

      Executive
shall attend any and all meetings and trade shows as reasonably required by
Company, at Company’s expense.

       

      
        
           


        

        
           


          
            

          

        

        
           


        

      

       

       
E.       Compliance with Laws

       

      Executive
shall comply with all applicable federal, state and local laws and regulations
in performing its obligations hereunder.

       

       
F.       Business Practices

       

      Executive
acknowledges Company's corporate policy prohibiting its employees from receiving
or offering any gifts, rebates or other payments in connection with any Company
related business transaction or relationship, and hereby represents and
covenants that he has not made, and will not make, any such payment(s) in
connection with any Company related business transaction or relationship and
will notify Company immediately if any party requests that any such prohibited
payment be made.

       

      3.           SCOPE
AND LIMITATIONS OF EXECUTIVE'S AUTHORITY

       

      A.     Trade
Practices

       

      At no
time shall Executive make any false or misleading representations or engage in
any other unfair or deceptive trade practices with respect to
Company.  Executive shall refrain from communicating any
representations, guarantees or warranties with respect to Company, except such
as are authorized expressly by Company in writing or are set forth in Company's
literature.

       

      B.     Relationship
of the Parties

       

      Executive
acknowledges that he is being engaged hereunder as a full time employee of
Company, as delimited in Section 1C hereof.  Executive shall not
engage in any other commercial venture during the term hereof without Company’s
prior written consent.  Subject to the exclusions specifically set
forth in Section 1 hereof, Executive further acknowledges and agrees that all
income or other earnings which accrue to Executive from his business efforts
relative to the Business on behalf of Company during the term of this Agreement
(and any extension thereof) shall be the sole and exclusive property of Company,
except as may be otherwise agreed upon in writing.

       

      4.           COMPENSATION

       

        
A.     Salary - Cash

       

      Subject
to the terms hereof, the cash compensation to be paid by Company to Executive in
consideration for all services rendered hereunder shall be an annual salary of
ONE HUNDRED TWENTY-FIVE THOUSAND DOLLARS ($125,000.00), U.S.
currency.

       

        
B.     Salary – Cash or Stock

       

      Subject
to the terms hereof, the Company shall pay an additional amount of compensation
to Executive, which shall be an annual amount of Fifty Thousand Dollars
($50,000).  The additional amount shall, at the discretion of the
Board of Directors, be payable either in cash or in immediately-saleable shares
of the Company’s common stock, which shall be valued for this purpose at 85% of
the average of the closing bid prices during the five days preceding
issuance.

       

        
C.     Vacation

       

      Executive
shall be entitled to FOUR (4) WEEKS per annum of paid vacation hereunder, at
times and for duration to be discussed in advance and agreed upon by Company’s
Board of Directors.

       

      
        
           


        

        
           


          
            

          

        

        
           


        

      

       

        
D.     Benefit Plans

       

      Executive
shall be entitled to participate in any benefit plan maintained by Employer in
which the Company’s Chief Executive Officer is a participant, pursuant to the
terms and conditions of such plans, if any, if approved by the Board of
Directors and stockholders of Employer. At a minimum, such benefit plans shall
be the same as or similar to those currently provided to other executives of
Company.

       

        
E.     Health Insurance

       

      Executive
shall be eligible for the same health insurance benefits (for himself, his
spouse and children) as are provided by Company for the Company’s Chief
Executive Officer in accordance with the policy in place for Company, which may
be modified from time to time, in Company’s sole and absolute
discretion.

       

      5.        
   EXECUTIVE'S
BUSINESS EXPENSES

       

      Executive
shall be reimbursed for normal and necessary business expenses incurred in
connection with his business efforts on Company’s behalf hereunder. Said
expenses shall be presented to Company in accordance with its customary policy
for approval and shall be promptly reimbursed.

       

      6.           
TAXES

       

      Company
shall withhold all applicable employment taxes, including Federal and state
income taxes, Social Security and unemployment taxes, disability or any similar
taxes or other payments, with respect to amounts earned or received by Executive
hereunder.

       

      7.           COVENANTS

       

        A. 
    Confidential Information

       

      Executive
acknowledges that during the term of this Agreement and otherwise during the
course of performing services for Company, Executive shall have access to
certain written and non-written information which Company considers confidential
and proprietary ("Confidential Information"). In consideration for Executive
being granted access to such Confidential Information and for the other benefits
hereunder, Executive hereby agrees that, during the term of this Agreement and
thereafter for a period of THREE (3) YEARS, Executive
shall keep secret and retain in strictest confidence, and shall not, without the
prior written consent of Company obtained in each instance, furnish, make
available or disclose to any third party, or use for the benefit of himself or
any third party, any Confidential Information.  As used in this
Paragraph, "Confidential Information" shall mean any information relating to the
business or affairs of Company which is not generally known to the public,
including, but not limited to, product or business plans, improvements and
developments, Company financial statements; customer and potential customer
identities; names and qualifications of Company employees, suppliers; pricing
methodologies and profit margins, including information regarding competitive
bids, business or acquisition strategies,  internal company and
product methodologies and analyses, inventions, copyrightable work or other
proprietary information used or developed by Company in connection with its
business, and the existence and terms of this
Agreement.  Notwithstanding the foregoing, Confidential Information
shall not include any information, which is or becomes in the public domain
through no wrongful act on the part of Executive or its employees or
agents.

       

       
B.      Covenant Not To Compete

       

      In
consideration of the undertak­ings by the Company herein, the Executive
covenants for the benefit of the Company as follows:

       

      
        
           


        

        
           


          
            

          

        

        
           


        

      


      (a) The “Restricted Period” for
purposes of this Covenant shall commence on the date of this Agreement and shall
continue for a period ending on the date which is three years after the
termination of his employment.

      


      (b) During the Restricted Period the
Executive shall not, directly or indirectly, as an employee, consultant or
principal, through equity ownership or otherwise, for himself or for any other
person, engage in, or assist any other person to engage in, Restricted
Activities.  For purposes hereof, “Restricted Activities” shall mean
the following:

      


      (i)  Directly
or indirectly soliciting, diverting, taking away or attempting to solicit,
divert, or take away any business opportunities which became available to the
Company or its affiliated entities during the Term of this
Agreement.

       

      (ii) Hiring, offering to hire, enticing
away or in any manner persuading or attempting to persuade any person affiliated
(as em­ployee or as independent contractor) with the Company or any
affiliate of the Corporation to discontinue his relation­ship with such
company, or to become employed by any other entity.

       

      (iii) Opening a place of business
located within twenty (20) miles of any place of business owned or operated by
the Company or any affiliated entity during the last year of the Executive’s
employment.

       

       
D.      Equitable Remedies

       

      The
restrictions contained in this Section 7 are necessary for the protection of the
business and goodwill of Company and are considered by the Executive to be
reasonable for such purpose. The Executive acknowledges and agrees that any
breach of this Section 7 is likely to cause Company substantial and irrevocable
damage which is difficult to measure. Therefore, in the event of any such breach
or threatened breach, the Executive agrees and consents that Company, in
addition to such other remedies which may be available, shall have the right to
obtain temporary or permanent injunctive relief (along with reasonable legal
fees and costs provided Company is the prevailing party) restraining such a
breach or threatened breach and the right to specific performance of the
provisions of this Section 7 without the necessity of proof of actual damages.
Executive hereby waives the adequacy of a remedy at law as a defense to such
relief.

       

      8.           DURATION
OF AGREEMENT/TERMINATION/SURVIVAL

       

       
A.      Duration

       

      Except in
the case of earlier termination, as hereinafter specifically provided, the term
(the “Employment Period”) of this Agreement shall be as of the date first above
written (the effective date hereof) through and including ONE (1) YEAR from the
date first above written; provided, however, that after expiration of the
employment period, this Agreement and the Employment Period shall automatically
be renewed each January 1 for successive one-year terms so that the remaining
term of this Agreement and the Employment Period shall continue to be one year
at all times after expiration of the employment period unless the Company or the
Executive delivers written notice to the other party at least SIXTY (60) DAYS
preceding the expiration of the employment period or any one-year extension date
of the intention not to extend the term of this Agreement.

       

      
        
           


        

        
           


          
            

          

        

        
           


        

      

       

       
B.      Termination

       

      Either
Executive or Company may terminate this Agreement at will, with or without
cause, at any time during the employment period or any extension term
(hereinafter referred to as the "Termination Date").  If the
termination is without cause, SIXTY (60) DAYS advance written notice must be
provided by the terminating Party to the other Party.  EACH PARTY
ACKNOWLEDGES THAT SUCH TIME PERIOD IS ADEQUATE TO ALLOW IT TO TAKE ALL ACTIONS
REQUIRED TO ADJUST ITS BUSINESS OPERATIONS IN ANTICIPATION OF TERMINATION. If
the termination is for Cause, no advance notice shall be required, but may be
provided at the option of the terminating Party. “Cause” for purposes of this
paragraph shall include, but not necessarily be limited to, the
following:

       

      
        	
                 
      

              	
                (1)

              	
                Termination
      by Executive

              


      

       

      In the
case of termination by Executive, Cause shall exist if Company breaches any
provision of this Agreement or any other agreement to which Executive and
Company are parties.  In the event Executive terminates this contract
for Cause, Executive shall be entitled to compensation based on the remaining
Term provided for herein. If Executive terminates his employment hereunder
without cause, he shall forfeit any remaining salary then payable hereunder for
the remaining duration of the term of this Agreement but shall be entitled to
all compensation due him as of the date of termination.

       

      (2)           Termination
by Company

       

      In the
case of termination by Company, Cause shall exist if Executive acts in any way
damaging or detrimental to the business or business reputation of Company If
Company terminates Executive’s employment hereunder without cause, Executive
shall be entitled all salary payable for the balance of the employment period of
this Agreement. Should Company terminate Executive’s employment hereunder with
cause, Executive shall be entitled to one (1) years salary as severance;
provided, however, that such payment shall not be due to Executive in the event
Executive is terminated for engaging in action which is materially fraudulent
toward the Company or which represents willful disregard of a legitimate
instruction of the Board of Directors.

       

      
        	
                 
      

              	
                (3)

              	
                Additional
      Cause

              


      

       

      Cause
shall exist for termination by either Party if the other Party assigns or
attempts to assign this Agreement, except as permitted hereunder, liquidates or
terminates its business, is adjudicated a bankrupt, makes an assignment for the
benefit of creditors, invokes the provisions of any law for the relief of
debtors.

       

      (4)           Continuation
of Salary

       

      In the
event that, prior to the third anniversary of the date of this Agreement, the
Executive’s employment is terminated for any reason other than termination by
the Executive without cause, and the Executive remains personally liable as a
guarantor of any debts against which the Company is required to indemnify the
Executive under the terms of the Merger Agreement dated April 1, 2008, then,
notwithstanding the termination of employment, the Company will continue to pay
Executive the cash compensation provided for  in Section 4(A) and
Section 4(B) hereof until the earlier of (a) the date on which all such
guarantees are released or the related debts are extinguished or (b) the third
anniversary of the date of this Agreement.

       

      
        
           


        

        
           


          
            

          

        

        
           


        

      

       

       
C.      No Representation as to
Tenure

       

      THIS
AGREEMENT IS EXECUTED BY BOTH COMPANY AND EXECUTIVE WITH THE KNOWLEDGE THAT IT
MAY BE TERMINATED OR NOT EXTENDED. EXECUTIVE ACKNOWLEDGES THAT APART FROM THE
TERMS OF THIS AGREEMENT, COMPANY HAS MADE NO REPRESENTATION AS TO THE LENGTH OF
TIME DURING WHICH THIS AGREEMENT WILL REMAIN IN FORCE.

       

       
D.      Survival

       

      ALL
REPRESENTATIONS, WARRANTIES, COVENANTS AND AGREEMENTS CONTAINED IN THIS
AGREEMENT, OR IN ANY SCHEDULE, CERTIFICATE, DOCUMENT OR STATEMENT DELIVERED
PURSUANT HERETO, SHALL SURVIVE THE TERMINATION OF THIS AGREEMENT AND SHALL BE
DEEMED TO HAVE BEEN RELIED UPON (AND NOT BE AFFECTED IN ANY RESPECT BY) THE
TERMINATION OF THIS AGREEMENT.

       

      9.      
     ASSIGNMENT

       

      No Party
may assign, transfer or sell all of any of its rights under this Agreement (or
delegate all or any of its obligations hereunder) without the prior written
consent of the other Party. Subject to these restrictions, the provisions of
this Agreement shall be binding upon and inure to the benefit of the Parties,
their successors and permitted assigns.

       

      10.          WAIVER

       

      The
waiver by either Party of any of its rights or any breaches of the other Party
under this Agreement must be in writing to be effective and any such waiver in a
particular instance shall not be construed as a waiver of the same or different
rights or breaches in subsequent instances.  All remedies, rights
undertakings and obligations hereunder shall be cumulative, and none shall
operate as a limitation of any other.

       

      11.          NOTICES

       

      All
notices and demands of any kind which either Company or Executive may be
required or desire to serve upon the other under the terms of this Agreement
shall be in writing and shall be served by personal delivery, by certified
mail-return receipt requested or by commercial courier service, at the addresses
set forth in this Agreement or at such other addresses as may be designated
hereafter by the Parties in writing.  If by personal delivery or
commercial courier, service shall be deemed complete upon the delivery
date.  If by certified mail, service shall be deemed complete upon the
date of the mailing.

       

      12.          EXECUTION

       

      This
Agreement shall become effective only upon its execution by Executive within or
outside the State of New York and its subsequent execution by Company in the
State of New York, as of the Effective Date.

       

      13.          SEVERABILITY

       

      In the
event that any of the provisions of this Agreement or the application of any
such provisions to the Parties hereto with respect to their obligations
hereunder shall be held by a court of competent jurisdiction to be unlawful or
unenforceable, the remaining provisions of this Agreement shall remain in full
force and effect, and shall not be affected, impaired or invalidated in any
manner.

       

      
        
           


        

        
           


          
            

          

        

        
           


        

      

       

      14.          PARAGRAPH
HEADINGS AND LANGUAGE INTERPRETATIONS

       

      The
paragraph headings contained herein are for reference only and shall not be
considered substantive provisions of this Agreement. The use of a singular or
plural form shall include the other form, and the use of a masculine, feminine
or neuter gender shall include the other genders, as applicable.

       

      15.          ENTIRE AGREEMENT

       

      This
Agreement constitutes the final agreement between the Parties pertaining in any
manner to the subject matter hereof, and contains all of the covenants and
undertakings between the Parties with respect to said subject
matter.  Each party to this Agreement acknowledges that no written or
oral representations, inducements, promises or agreements have been made which
are not embodied herein and the Parties will not rely on any future oral
representations, inducements, promises or agreements unless embodied in a
written amendment hereto.  Any and all prior or contemporaneous,
written or oral agreements between the Parties pertaining in any manner to the
subject matter of this Agreement expressly are superseded and canceled by this
Agreement.  Except as otherwise provided herein, this Agreement may
not be amended, modified or supplemented, except by a written instrument signed
by both parties hereto. IT IS THE INTENTION AND DESIRE OF THE PARTIES THAT THE
EXPRESS PROVISIONS OF THIS AGREEMENT NOT BE SUBJECT TO VARIATION BY IMPLIED
COVENANTS OF ANY KIND.

       

      16.          COUNTERPARTS

       

      This
Agreement may be executed in ONE (1) or more counterparts, each of which will be
deemed to be any original copy of this Agreement and all of which, taken
together, shall be deemed to constitute ONE (1) and the same
Agreement.

       

      17.          CONSENT
TO JURISDICTION

       

      Company
and Executive hereby submit and consent to the exclusive venue and jurisdiction
of the Supreme Court of the State of New York in respect of the interpretation
and enforcement of the provisions of this Agreement, and hereby waive and agree
not to assert as a defense in any action, suit or proceeding for the
interpretation or enforcement of this Agreement, that it is not subject thereto
or that such action, suit or proceeding may not be brought or is not
maintainable in said courts or that this Agreement may not be enforced in or by
said courts or that its property is exempt or immune from execution, that the
suit, action or proceeding is brought in an inconvenient forum, or that the
venue of the suit, action or proceeding is improper. Company and Executive agree
that service of process may be made in any manner permitted by the laws of the
State of New York or the federal laws of the United States in any such action,
suit or proceeding against Company and Executive with respect to this
Agreement.  Company and Executive agree that final judgment (with all
right of appeal having expired or been waived) against it in any such action,
suit or proceeding shall be conclusive and that the other Party is entitled to
enforce such judgment in any other jurisdiction by suit on the judgment, a
certified copy of which shall be conclusive evidence of the fact and amount of
indebtedness arising from such judgment.

       

      18.          ADVICE
OF COUNSEL

       

      THE
PARTIES ACKNOWLEDGE THAT THEY HAVE EACH RECEIVED A COPY OF THIS AGREEMENT, THAT
THEY HAVE READ AND FULLY UNDERSTAND THIS AGREEMENT, AND THAT THEY HAVE BEEN
ADVISED TO SEEK AND HAVE SOUGHT OR WAIVED INDEPENDENT LEGAL COUNSEL OF THEIR
CHOICE TO AID IN THEIR UNDERSTANDING HEREOF.

       

      [SIGNATURES
ON FOLLOWING PAGE]

       

      
        
           


        

        
           


          
            

          

        

        
           


        

      


       

      IN WITNESS WHEREOF, the
Parties hereto have caused this Agreement to be executed the day and year first
appearing above by their duly authorized officers, as set forth
below.

       

       

       

      


       

      
        	
                By:

              	
                SEAWAY
      VALLEY CAPITAL CORPORATION

              
	 
      	 
      
	 
      	 
      
	 
      	
                /S/ THOMAS
      SCOZZAFAVA

              
	 
      	
                Thomas
      Scozzafava, CEO, Chairman

              


      

       

       

       

      


       

      
        	
                EXECUTIVE

              
	 
      	 
      
	 
      	 
      
	
                By:

              	
                /S/ CHRISTOPHER SWARTZ

              
	 
      	
                Christopher
      M. Swartz

              
	 
      	
                Individually