EMPLOYMENT AGREEMENT


 


THIS
EMPLOYMENT AGREEMENT (the
"Agreement"), dated as of
August 30, 2012 by
and between Thomas
Kidrin (the "Executive")
and Worlds Online Inc., a Delaware
corporation (the "Company").


 


WI TN
E S S
E TH:


 


 


WHEREAS,
Executive and the
Company desire to
enter into an
Employment Agreement to provide
for Executive's employment
by the Company on the terms and subject
to the conditions set forth herein.


 


NOW,
THEREFORE, in consideration
of the mutual
promises, representations and warranties
set forth herein,
and for other
good and valuable
consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties
hereto, intending to be legally
bound hereby, agree as follows:


 


 


1.              
Offices and Duties. 
The Company hereby
employs Executive during
the Term (as hereinafter
defined) to serve
as the Company's
President and Chief Executive Officer and to perform such executive
and supervisory duties
on behalf of the Company as the Company's
Board of Directors may from time to time
reasonably direct. Executive hereby accepts such employment and agrees that throughout
the Term he shall
faithfully, diligently and to
the best of his ability, in
furtherance of the business oftl1e Company, perfom
tl1e duties assigned to him
or incidental to tl1e offices assumed by him pursuant to tl1is Section. Executive
shall devote substantially approximately
one-half of his business time and attention to
the business and affairs of the Company,
but Executive shall not be required to devote any
minimum amount of time or report or perform his duties hereunder
on a fixed or periodic basis, and Executive may
engage or participate in such other activities
incidental to any otl1er employment, occupation
or business venture or enterprise as do
not materially interfere with or compromise his
ability to perform his duties hereunder. The Company
understands that Executive is also providing
executive level services for Worlds Inc.,
a Delaware corporation and former parent oftl1e
Company, and the Company acknowledges
that the provision of
such services is permitted hereunder and shall not be
deemed a breach of this Agreement.
 Executive shall at all times be subject
to tl1e direction and control oftl1e Company's
Board of Directors, and
observe and comply witl1 such rules,
regulations, policies and practices as tl1e Company's
Board of Directors may from time to time establish.


 


2.              
Term.  The employment
of Executive hereunder
shall commence on
the date hereof
and end on August
30, 2017, provided, that
Executive shall have tl1e right in his sole discretion to extend
tl1e term for an additional 12 months
ending on August 30, 2018, by notifying tl1e Company in writing of such no later than
June I, 2018,
subject in all respects to earlier termination upon tl1e terms
and conditions provided elsewhere herein. 
The term during which Executive is employed
herem1der shall be referred to herein as
the "Term". As used herein, "Termination Date"
means tl1e last day of the
Term.


 



    	(1)



    	 



     


	 	3.	Compensation.


 


(a)                   
As compensation for
his services hereunder,
the Company shall
pay to Executive during
the Te1m:


 


(i)             
a base salary at
the rate of$175,000
per annum (the
"Base Salary"), such Base
Salary to be
paid in substantially
equal installments no
less often than twice
monthly;


 


(ii)            
the Base Salary
shall be increased
by 10% on
the anniversary each
year of the Tem1
over the prior
year's Base Salary;


 


	 	(iii)	a car allowance in the amount of $500 per month, payable monthly;


 


(iv)          
a bonus (the
"2.5% Bonus") in
respect of each
Bonus Period (as hereinafter
defined), payable within
ninety (90) days
after the end of such Bonus Pe1iod,
in an an10unt equal to two
and one-half percent (2.5%) of Pre-Tax Income (as hereinafter defined)
for the applicable Bonus Period, provided,
however, that the maximun1 amount of the
2.5% Bonus earned for any Bonus
Period shall not exceed 50% of Executive's
then Base Salary, and
further provided, that the 2.5% Bonus shall
only be payable if the Company reports Net
Income (as hereinafter defined) for such
Bonus Period;


 


(v)            
a bonus (the
"Additional Bonus") in
respect of each
Bonus Period, payable within
ninety (90) days
after the end
of such Bonus
Period, as follows: (A) $75,000, if Pre-Tax
Income for the Bonus Period is between 150% and
200% of the prior fiscal year's
Pre-Tax Income; or (B) $100,000, if Pre-Tax Income for the Bonus Period is
between 201%and250% of the prior fiscal year's
Pre-Tax Income; or (C) $200,000, if
Pre-Tax Income for the Bonus
Period is 251% or greater than the
prior fiscal year's Pre-Tax Income, provided,
however, that the Additional Bonus payable to Executive with
respect to any Bonus
Period shall not exceed five (5%) percent
of Pre-Tax Income for such Bonus Period, and further provided, that the Additional
Bonus shall only be payable if the Company reports
Net Income for such Bonus Period and the Company's Earnings Per Share (as hereinafter
defined) are higher for such Bonus Period than in the year
prior to such Bonus Period; and


 


(vi)          
such additional incentive
or bonus compensation
as the Company's
Board of Directors may
from time to
time determine.


 


	 	(b)	For the purposes of paragraph 3(a):


 


 


and


 



 


(i)
“Bonus Period" is a
fiscal year of
the Company ending
dming the Term;


 


(ii)            
The "Pre-Tax Income," "Net
Income," and "Earnings
Per Share" in
any Bonus Period is the
Company's income before provision
for income taxes as
reported in its audited financial
statements for such Bonus Period.


 


The
dete1111ination of the Pre-Tax
Income and the
2.5% Bonus and
Additional Bonus for any Bonus
Period shall be
determined by the
Company's then Chief Financial Officer
(or other senior most accounting official if no one holds a position with
that title) in accordance with the Company's audited financial statements
as prepared by the Company's independent auditor, which shall
be conclusive and binding upon
the Company and Executive.


 


(c)                   
The Company shall
provide major medical,
hospitalization and dental
insurance for the benefit of
Executive and his
family consistent with
benefits made available to other of the Company's senior
executives and if no such benefits
are then available or paid
to other executives, than in the amount of, rn1d providing coverage
for, no lesser benefits thrn1 Executive
has prior to the date hereof, and
the Company shall pay
all premiums rn1d any other
costs or expenses incurred to maintain
such policies in effect during the
Tenn.


 


(d)                  
In addition to
his Base Salary
and other compensation
provided herein, Executive shall
be entitled to
participate, to the
extent he is
eligible under the terms rn1d conditions
thereof, in any stock, stock option or
other equity participation plan
and any profit-sharing, pension,
retirement, insurance, medical service or
other employee benefit plrn1 generally available
to the executive officers
of the Company, and to
receive any other benefits or perquisites
generally available to the executive officers of
the Company pursurn1t to rn1y employment policy or practice, which may
be in effect
from time to
time during the
Term. The above notwithstanding, the Company shall
use its commercially reasonable efforts to obtain for the
benefit of Executive a life insurance policy
with a death benefit of at
least $2 million payable to a
beneficiary of Executive's choice, provided, however, that the
Comprn1y shall not be
obligated to spend more than $10,000
annually on the premiums for such policy.
Except as otherwise
expressly provided herein, the Company
shall be under no
obligation hereunder to institute
or to continue any such employee benefit
plan or employment policy or practice.


 


(e)                  
No provision hereof is
intended, or shall
be deemed, to
impair or limit Executive's
eligibility to receive,
or rn1y right
he may now
or at any
time hereafter have
to receive, hold or dispose of
any common stock, par value
$.001 per share,
of the Company (the "Common Stock")
or other securities of the Company or to
receive, hold or exercise any options, warrants or other rights to acquire rn1y Common Stock or other securities of the Company.


 


(f)                    
During the Tenn,
Executive shall not
be entitled to
additional compensation for serving
in any office
of the Company
(or any subsidiary
thereof) to which
he is elected or appointed.


 



    	(2)



    	 



     


4.              
Stock Options.


 


(a)            
By its approval
of this Agreement,
the Company's Board
of Directors has approved
the issuance to
Executive of an
option to acquire
4,500,000 shares of the Company's
Common Stock, under and pursuant to the
provisions of the Worlds Online Inc. 2012 Stock
Option Plan, as adopted by the
Company's Board of Directors and as
approved by the Company's Shareholders (the
"Plan") and on the terms set
forth in the Stock Option
Agreement annexed to this Agreement
as Exhibit A (the "Option Agreement"),
which provides inter alia that such
option shall vest as set forth below, and
be exercisable at the exercise p1ice of
$0.010 per share (which is the closing market price of the
Company's Common Stock on the last trading date prior
to the date
hereof) at any time during the
five (5) year period following the
date hereof (subject to earlier termination
as provided under the Plan):


 


	 	(i)	the option to acquire 1,500,000 shares shall vest immediately;


 


	 	(ii)	the option to acquire 1,500,000 shares shall vest on August 30, 2013; and


 


	 	(iii)	the option to acquire 1,500,000 shares shall vest on August 30, 2014.


 


(b)          
The option being
granted hereby is
subject in all
respects to the
tem1s and provisions of
the Plan and
the Option Agreement,
including, without limitation,
the termination provisions contained in the
Plan, and in
the event of any conflict
between the terms of this Agreement
and the Plan or the Option
Agreement, the Plan or
the Option Agreement shall control. The option
granted hereby is also subject to the
approval of the Plan
by the Company's shareholders.It is the
intention of the parties hereto that, to the
extent possible, the options granted herein
shall be "incentive
stock options" as such term is defined
in the Internal
Revenue Code of 1986
and any of
the terms of
the options shall be modified,
as minimally as necessary, to maintain their
status as incentive stock options.


 


(c)            
Executive shall receive
such other option,
restrictive stock awards
or other security-based compensation
as the Board
of Directors shall
approve.


 


5.              
Expense Allowance.  The
Company shall pay
directly, or advance
funds to Executive
or reimburse Executive for,
all expenses reasonably
incurred by him
in connection with
the performance of his duties as an employee
or consultant hereunder, upon the submission
to the Company of itemized expense reports, receipts or vouchers in accordance
witl1 its tl1en customary policies and practices.


 


6.              
Location: Office.  Except  for
routine  travel  and
temporary  accommodation  reasonably
required  to perform  his services
hereunder, Executive  shall
not be required 
to perform  his services
hereunder  at any location other than the
principal executive office of the Company, which office shall be located throughout the Term at its location
on t11e date hereof, or, if relocated,
at a location within a distance of 30 miles
from its location on the date hereof,  or
at such other office or site to which Executive may,
in his sole discretion, consent; nor shall he
be required to relocate his principal
residence to, or otherwise to reside at, any location
specified by the Company. The Company shall provide Executive with suitable office
space, furnishings and equipment, secretarial and clerical services and such other facilities and office
support as Executive may reasonably request.


 


7.              
Vacation.  Executive shall be
entitled to four
(4) weeks paid
vacation during each
year of his full
time employment hereunder,
such vacation to
be taken at
such time or times as shall be
agreed upon by Executive and the Company.
Vacation time shall be cumulative
from year to year, except that Executive shall
not be entitled to take more than six weeks
vacation during any consecutive 12-month period during the Term. Accrued but
unused vacation time shall be
paid in cash on the Termination
Date, except that
in the event of a Termination pursuant to Section 12, the amount of accrued
vacation time to be paid on the Termination Date shall be
limited to six weeks and
in the event of a Termination pursuant
to Section 13, the amount of vacation time to be paid
on the Termination Date shall be limited to four
weeks.


 


8.              
Key-Man Insurance.  The Company
shall have the
right from time
to time to
purchase, increase, modify or
terminate insurance policies
on the life of Executive for the benefit of
the Company in such an10unts as the Company may
determine in its
sole discretion. In connection therewith,
Executive shall, at such time or times and at such place or places
as the Company may reasonably direct, submit
himself to such physical exan1inations
and execute and deliver such documents as the
Company may deem necessary or appropriate.


 



    	(3)



    	 



     


 


	 	9.	Trade Secrets.


 


(a)           
Executive shall hold
in a fiduciary
capacity for the
benefit of the
Company all confidential or
proprietary information relating to or concerned
with the Company or its Affiliates (as defined below)
or its products or services, prospective products or services, operations, business
and affairs ("Confidential Information"),
and he shall not, at any time hereafter, use
or disclose any Confidential Information to any
person other than to the Company or its
designees or except as may otherwise be required
in connection with the business m1d affairs of the Company, m1d in furtherance of the
foregoing Executive agrees that:


 


(i)              
Executive will receive,
maintain m1d hold
Confidential Information in strict
confidence m1d will
use the same
level of care in
safeguarding it that he uses with his own
confidential material of a similar nature;


 


(ii)            
Executive will tal(e
all such steps
as may be
reasonably necessary to prevent the
disclosure of Confidential
Information; and


 


(iii)          
Executive will not
utilize Confidential Information
for his personal
benefit without first having
obtained the Company's
consent to such utilization.


 


"Affiliate"
of a Person means  another Person directly
or indirectly controlling, controlled  by, or under common control
witl1, such Person; for this purpose, "control" of a Person  means
the power  (whetl1er or not exercised) to direct
tl1e policies, operations or activities of such Person by virtue of t11e ownership of, or right to vote or direct the manner of
voting of, securities of such Person, or pursuant to agreement or law or otherwise. The term "Person" includes without
limitation a natural person, corporation, joint stock
company, limited liability company, partnership, joint 
venture, association, trust, governmental authority, or any group of the foregoing acting in concert.


 


(b)           
The commitments set
fortl1 in paragraph
9(a) shall not
extend to any
portion of Confidential Information:


 


(i)             
that is generally
available to the
public;


 


(ii)            
that was not
acquired, directly or indirectly
and/or in any
mam1er, from the Company
and which Executive
lawfully had in
his possession prior
to the date
of this


Agreement; or


 


(iii)          
that, hereafter, tlrrough
no act or
omission on the
part of t11e
Executive, becomes information generally
available to the
public.


 


(c)            
At any time
upon written request
by t11e Company
(i) the Confidential Information,
including any copies,
shall be returned
to the Company, and
(ii) all documents, drawings, specifications,
computer software, and any other material
whatsoever in t11e possession of t11e Executive
that relates to such Confidential Information, including all
copies and/or any other form of reproduction and/or description thereof made
by Executive shall, at the Company's option, be returned to the Company or destroyed.


 


(d)
In the event
that Executive becomes
legally compelled (by
deposition interrogatory,  request  of
documents,  subpoena, civil investigative
 demand  or
similar process) to disclose
any of t11e Confidential Information, t11e Executive shall provide
the Comp:my with prompt prior written notice of such requirement so that it (or
its designees) may seek a protective order
or otl1er appropriate remedy and/or waive compliance with the terms of this Agreement. In the event that such protective order
or other remedy is not obtained, or t11e Company waives compliance with t11e provisions
hereof, the Executive agrees to furnish only such portion of the Confidential Information
which is legally required to be furnished.



 



    	(4)



    	 



     


10.Intellectual
Propertv.  Any idea, invention,
design, process, system,
procedure, improvement, development or discovery
conceived, developed, created or
made by Executive, alone or with
ot11ers, during t11e Term and applicable to the business of the Company, whether or
not patentable or registrable, shall become the sole and exclusive property of t11e Company.
Executive shall disclose the san1e promptly and completely to t11e Company and shall, during the Tenn or t11ereafter, (i)
execute all documents requested by the Company for vesting in the Company the
entire right, title and
interest in and to the
same, (ii) execute all documents requested by the Company for filing
and procuring such applications for patents, trademarks, service marks or copyrights
as the Company, in its sole discretion, may desire to
prosecute, and (iii) give the Company all
assistance it may reasonably require, including
the giving of testimony in any Proceeding
(as defined below), in other to obtain,
maintain and protect the Company's right
therein and thereto.



 


A "Proceeding"
is any suit,
action, arbitration, audit,
investigation or other
proceeding before or by
any court, magistrate,
arbitration panel or
other tribunal, or any governmental agency, authority
or instrumentality of competent jurisdiction.


 


11.          
No Competition.


 


(a)
During the Restricted Period
(as defined below),
Executive shall not,
directly or


 


(i)             
own, control, manage,
operate, participate or
invest in, or
otherwise be connected with,
in any manner,
any business activity,
venture or enterprise
which is engaged
in any business in the
United States in which the
Company (or any subsidiary thereof) is currently
engaged or is engaged
at the time ofte1mination of Executive's employment hereunder, or


 


(ii)            
for himself or
on behalf of
any other person,
employ or engage
any person who at the
time shall have
been within the
preceding 12-month period an employee of
the Company (or such subsidiary) or contact any
supplier, customer or employee of the Company
(or such subsidiary) for the purpose of soliciting or
diverting any supplier, customer or
employee from the Company (or such subsidiary).


 


(b)            
The provisions of
paragraph  l l(a)
notwithstanding, Executive may
(i) invest his funds
in securities of
an issuer if
the securities of
such issuer are listed
for trading on a registered securities
exchange or actively traded
in an over-the-counter market and Executive's
holdings therein represent less than 5% of the
total number of shares or principal amount
of the securities of such issuer outstanding and
(ii) work as an executive
and be a director of Worlds Online
Inc.


 


(c)            
Executive acknowledges that
the provisions of
this Section, and
the pe1iod of time,
geographic area and
scope and type
of restrictions on his activities set forth herein, are reasonable and
necessary for the protection of the Company.


 


(d)           
"Restricted Pe1iod" shall mean
the period commencing
on the date
hereof and ending August
30, 2018; provided,
however, that if
Executive has exercised
his option to extend the Term to August
30, 2018 in accordance with Section 2 hereof, the Restricted
Period shall end August 30, 2019.


 



    	(5)



    	 



     


(e)            
The Company acknowledges that
the services Executive provides
to Worlds Inc. are not competitive
with the Company and
not subject to the
restrictions contained in this Section 11.


 


12.          
Termination Upon Disabilitv. In
the event that
the Board of
Directors determines that
the Executive is unable
to perform his
duties hereunder by reason
of any disability or incapacity (due
to any physical or mental injury, illness
or defect) for an aggregate of 180
days in any consecutive 12-month period,
the Company shall have the right
to te1111inate Executive's employment hereunder within 30 days after the 180th day
of his disability or incapacity by giving
Executive notice to such effect at least I 0 days prior to the date of termination set
forth in such notice, and on such date such employment shall terminate. The Board of
Directors' determination shall be made after due inquiry, on the basis of convincing
evidence presented in at least two medical opinions rendered by reputable physicians
with experience in diagnosing and treating the condition described in the opinion.


 


	 	13.	Termination for Cause.


 


(a)            
In addition to
any other rights
or remedies provided
by law or
in this Agreement, the
Company may terminate
Executive's employment under this Agreement if:


 


(i)             
Executive is convicted
of, or enters
a plea of
guilty or 110/0
 contendere (which plea
is not withdrawn
prior to its approval by the court)
to, a felony offense or the commission
of a fraud against, or embezzlement
or misappropriation of funds or other
assets of, the Company (or any subsidiary thereof) and
either Executive fails to perfect an appeal
of such conviction prior to the expiration
of the maximum period of time within
which, under applicable law or rules of
court, such appeal may be perfected or, if Executive does perfect such
an appeal, his conviction of such
as offense is sustained on
appeal; or


 


(ii)            
the Company's Board
of Directors determines,
after due inquiry,
based on convincing evidence,
that Executive has:


 


	 	(A)	violated, or caused the Company (or any subsidiary thereof) or any officer, employee or other agent thereof, or any other person to violate, any material law, regulation or ordinance or any material rule, regulation, policy or practice established by the Company's Board of Directors;


 


	 	(B)	willfully, or because of gross or persistent negligence, (x) failed properly to perform his duties hereunder or (y) acted in a manner detrimental to, or adverse to the interests of, the Company; or


 


	 	(C)	violated, or failed to perform or satisfy any material covenant, condition or obligation required to be performed or satisfied by Executive hereunder; and that, in the case of any violation or failure referred to in clause (A), (B) or (C) of this paragraph (ii) of Section 13(a), such violation or failure has caused, or is reasonably likely to cause, the Company to suffer or incur a substantial casualty, loss, penalty, expense or other liability or cost.


 



    	(6)



    	 



     


 


(b)            
The Company may
effect such termination
for cause by
giving Executive notice to
such effect, setting
forth in reasonable detail the
factual basis for such termination, at
least thirty (30) days prior to
the date of termination
set forth therein; provided, however, that
Executive may avoid such termination if Executive,
prior to the date
of termination set forth in such notice, explains
to the reasonable
satisfaction of the Company's
Board of Directors why the facts relied
upon by the Company in terminating Executive's employment do not constitute a For Cause Event
(as defined below) or that Executive has ceased any
such claimed violation and/or cured any such failure to perform within such 30
day period.


 


(c)            
In making any
determination pursuant to
Section 13(a) as
to the occurrence
of any act or
event described in clauses (A) to
(C) of paragraph (ii) thereof(each, a "For
Cause Event"), each of the following shall constitute
convincing evidence of such occurrence:


 


(i)             
if Executive is
made a party
to, or target of,
any Proceeding arising
under or relating to
any For Cause
Event, Executive's failure
to defend against such Proceeding or to
answer any complaint filed against
him therein, or to deny any claim,
charge, averment, or allegation thereof asserting
or based upon the
occurrence of a For Cause Event;


 


(ii)            
any judgment, award,
order, decree or
other adjudication or ruling
in any such Proceeding
finding or based
upon the occurrence
of a For
Cause Event; or


 


(iii)          
any settlement or
compromise of, or
consent decree issued
in, any such Proceeding
in which Executive expressly
admits the occurance
of a For Cause Event;


 


provided
that none of
the foregoing shall
be dispositive or
create an irrebuttable
presumption of the occurrence
of such For
Cause Event; and providedfi1rther that
the Company's Board of Directors may rely
on any other factor or
event as convincing evidence of the occurrence
of a For Cause
Event.


 


(d)            
In determining and
assessing the detrimental
effect of any
For Cause Event
on the Company and
whether such For
Cause Event warrants
termination of Executive's employment hereunder, the Company's Board of Directors
shall take the following factors,
to the extent applicable and material, into account:


 


(i)              
whether the Company's
Board of Directors
directed or authorized Executive to
take, or to
omit to take,
any action involved in such For
Cause Event, or approved, consented to or acquiesced in his
taking or omitting to take such
action;


 



    	(7)



    	 



     


(ii)            
any award of
damages, penalty or other sanction,
remedy or relief granted or
imposed in any Proceeding based
upon or relating to such For
Cause Event, and whether such sanction,
remedy or relief is sufficient
to recompense the Company or any other injured
person, or to prevent or to
deter the recurrence of such For
Cause Event;


 


(iii)          
whether any lesser
sanction would be
appropriate and effective;
and


 


(iv)          
any adverse effect
that the loss
of Executive's services
would have, or
be reasonably likely to
have, upon the
Company.


 


14.                 
Termination by Executive
for Good Reason.
In addition to
any other rights
or remedies provided by
law or in
this Agreement, Executive may
terminate his employment hereunder:


 


(i)             
if (A) the
Company violates, or
fails to perform or
satisfy any material covenant, condition
or obligation required
to be perforn1ed
or satisfied by
it hereunder or (B) as
a result of any
action or failure to act by the Company, there
is a material change in the
nature or scope of the duties, obligations,
rights or powers of Executive's employment, by giving
the Company notice to such effect, setting
forth in reasonable detail the factual
basis for such termination, at least
thirty (30) days prior to the date of
termination set forth therein; provided however that the
Company may avoid such termination if it,
prior to the date of termination set forth
in such notice, cures or explains to the
reasonable satisfaction of
Executive the factual basis for termination set
forth therein; or


 


(ii)            
if a Change
of Control (as
hereinafter defined) occurs
while Executive is
a full-time employee of the
Company, by giving
the Company notice
to such effect
within ninety (90) days after the occunence
of such Change
of Control, setting forth the event or
circumstance constituting such Change of
Control, such termination to be effective
upon the date of termination, not more than thirty (30) days after the date of
such notice, set forth therein or, if no such date is
set forth therein, i1mnediately upon delivery of such notice to the
Company.


 


15.           
Voluntary Termination.  In
addition to any
other rights or
remedies provided by
law or in this
Agreement, from and
after the date
hereof, Executive may terminate his employment hereunder
by giving the Company written
notice to such effect at least ninety
(90) days prior lo the date of termination set forth
therein.


 


	 	16.	Compensation and Benefits upon Termination.


 


(a)            
Upon termination of
Executive's employment hereunder,
he shall be
entitled to receive, in
any case, any
Base Salary pursuant
to Section 3(a)(i) accrued
but unpaid to the Termination Date.
 Any amount payable to Executive under
this subparagraph shall be
paid promptly, m1d in any event within thirty
(30) days after the Termination Date.


 



    	(8)



    	 



     


(b)            
If Executive's employment is
terminated as a result of
a "For Cause Event" pursuant to
Section 13, except for the payment
of any amount required to be made by
Section 16(a), from and after the Termination
Date, the Company shall have no
further obligation to Executive hereunder, including
without limitation any obligation pursuant
to Section 17.


 


(c)            
If the Executive's
employment is terminated
(i) by him
pursuant to Section
14(i); or (ii) by
the Company other
than as a result of a "For Cause Event" pursuant
to Section 13; he shall be entitled
to receive an amount equal to the full value of any Base Salary still remaining until
the end of the Term plus an amount equal to three times
the Base Salary at the time of termination,
unless such payment would trigger the excise tax under Section 4999 of the Code in
which case the aggregate
payments hereunder shall be reduced to the maximum amount which would not trigger
such tax.  Notwithstanding the foregoing, if
the Executive's employment is terminated by the
Company after a Change of Control has occurred
for any reason other than as a result of a "For Cause Event" pursuant
to Section 13, he shall be entitled to receive,
upon the terms and subject to the conditions set forth in Section 17, the Parachute
Amount (as hereinafter defined in Section 17). Any amount payable to Executive under
this subparagraph shall be paid promptly, and in any
event within thirty (30) days after the Tem1ination Date.


 


(d)           
If the Executive's
employment terminates as
a result of
a Change of
Control pursuant to Section
14(ii), he shall be
entitled to receive, upon the terms and
subject to the conditions set fortl1 in Section
17, the Parachute Amount.  Any amount
payable to Executive under this subparagraph shall
be paid promptly, and in any event within
thirty (30) days after the Termination Date.


 


(e)            
If the Executive's
employment is terminated
by him pursuant
to Section 14(i)
or l4(ii) of
this Agreement, or by the Company
other than as a result of a "For Cause Event" pursuant to Section 13, the
Company shall for the two (2) year period following the Termination Date
maintain and pay for Executive and his
family, or reimburse Executive, for the cost of medical, dental, and hospitalization benefits comparable to such benefits maintained
by the Company during the twelve (12) months prior to the Termination Date. If
the Executive voluntarily terminates his employment pursuant to Section 15 of this
Agreement such benefits shall be maintained for one (I)
year following such termination.


 


(f)Executive
shall have no
obligation herew1der to
seek or to
accept any other employment
after the Termination
Date or otherwise
to mitigate the
payments required to
be made by this Section. No compensation or otl1er
amount received or receivable by
Executive on accom1t of any employment or
engagement after the Termination Date shall
be offset against
or deducted from any payment required
to be made
by this Section 16 or
Section 17.


 


(g)                   
In the event
the Company terminates
Executive other than
as a result
of a "For Cause
Event" pursuant to
Section 13, or iftl1e Executive's employment
is tem1inated by him pursuant to Section l4(i) or l4(ii) of this Agreement, Executive shall receive
as his sole and exclusive remedy and damages
the payments he would otherwise be
entitled to receive under the applicable
provisions of this Section 16 (and, if applicable,
the other benefits provided under clause (h) of this Section 16).


 


(h)                  
In the event
of Executive's death
or if the Company
terminates Executive for disability
pursuant to Section
12, the Company shall pay, in the
case of Executive's death, Executive's estate an
amount equal to his then current Base
Salary and in the event
of termination for disability, an amount
equal to two times his then current
Base Salary. Any an10unt payable to Executive (or his estate) under this
subparagraph shall be paid promptly, and in any event within thirty (30) days after
the date Executive dies
or is terminated for disability, as the case may be.


 


 



    	(9)



    	 



     


 


	 	17.	Change of Control.


 


(a)            
For the purposes
of this Section
17:


 


(i)             The
"Act" is the
Securities Exchange Act
of 1934, as
amended.


 


(ii)
            A "person"
includes a "group"
within the meaning
of Section  13(d)(3)
of


 


(iii)            "Control"
is used herein as
defined in Rule
12b-2  under the
Act.


 


(iv)          
"Beneficially owns" and "acquisition"
are used herein
as defined in Rules
13d-3 and 13d-5,
respectively, under the
Act.


 


(v)            
"Non-Affiliated Person" means any
person, other than
Executive, an employee stock
ownership trust of
the Company (or
any trustee thereof
for the benefit of
such trust), or any person controlled
by Executive, the Company or
such a trust.


 


(vi)          
"Voting Securities" includes
Common Stock and
any other securities
of the Company that
ordinarily entitle the
holders thereof to vote, together with
the holders of Common Stock or as a separate
class, with respect
to matters submitted to a vote of the
holders of Common Stock, but securities
of the Company as to which the consent of
the holders thereof is required
by applicable Jaw or the terms of such securities
only with respect to ce1iain specified
transactions or other matters, or the holders
of which are entitled to vote only upon
the occurrence of certain specified events (such
as default in the payment of a mandatory dividend on preferred stock
or a scheduled installment of principal
or interest of any debt
security), shall not be Voting Securities.


 


(vii)        
"Right" means any
option, warrant or
other right to
acquire any Voting Security
(other than such
a right of
conversion or exchange included
in a Voting Security).


 


	 	(viii)	The "Code" is the Internal Revenue Code of 1986, as amended.


 


(ix)          
"Base amount," "present
value" and "parachute
payment" are used
herein as defined in
Section 280G of the
Code.


 


	 	(b)	A "Change of Control" occurs when:


 


(i)              
a Non-Affiliated Person
acquires control of
the Company;


 


(ii)            
upon an acquisition
of Voting Securities or Rights
by a Non-Affiliated Person from
persons other than
the Executive (or
persons controlled by
the Executive) or any change in the number or
voting power of outstanding Voting
Securities, such Non-Affiliated Person beneficially owns Voting Securities
or Rights entitling such person to cast
a number of votes (determined in accordance with Section
l7(g)) equal to or greater than 25% of the
sum of (A) the number of
votes that may be cast by all other
holders of outstanding Voting Securities and (B) the number
of votes that may be
cast by such Non-Affiliated Person (determined in accordance with Section l7(g)); or


 


(iii)          
upon any change
in the membership
of the Company's
Board of Directors, a
majority of the
directors are persons who are not
nominated or appointed by the Company's Board of
Directors as constituted prior to such change.


 


(c)            
The "Parachute Amount" to
which Executive shall
be entitled pursuant
to Sections 16(c) and
(d) shall equal
2.99 multiplied by
the Executive's base
amount.


 


(d)            
It is
intended that the
present value of
any payments or
benefits to Executive, whether
hereunder or otherwise,
that are includible
in the computation
of the Parachute Amount shall
not exceed 2.99 times the Executive's
base amount. Accordingly, if Executive
receives any payment or benefit from
the Company prior to payment of the Parachute
Amount which, when added to
the Parachute Amount, would
subject any of the payments or
benefits to Executive
to the excise tax imposed by Section
4999 of the Code, the
Parachute Amount shall be
reduced by the least amount necessary
to avoid such tax. The Company
shall have no obligation hereunder to make
any payment or provide any
benefit to Executive after the
payment of the Parachute Amount which
would subject any of such
payments or benefits to the excise
tax imposed by Section 4999 of
the Code.


 


(e)            
Any other provision
hereof notwithstanding, Executive
may (but only
to the extent not
prohibited by the
United States securities
laws, as then
amended), prior to
his receipt of the Parachute
Amount pursuant to Section l7(d), waive
the payment thereof, or, after
his receipt of the Parachute Amount thereunder, treat some
or all of such ammount
as a loan from the Company which Executive
shall repay to the Company within 180 days
after the receipt thereof, together with
interest thereon at the rate provided in Section
7872 of the Code,
in either case,
by giving the Company notice to such
effect.


 



    	(10)



    	 



     


(f)Any
determination of the Executive's
base amount, the Parachute
Amount, any liability for excise tax
under Section 4999 of the
Code or other matter required to be made pursuant to
this Section 17, shall be made by
the Company's regularly -engaged independent certified public
accountants, whose determination shall be conclusive and binding
upon the Company and Executive; provided that such accountants shall
give to Executive, on or before the date on which payment
of the Parachute Amount or any later
payment or benefit would
be made, a notice setting
forth in reasonable detail such determination
and the basis therefor, and stating expressly that Executive is
entitled to rely thereon.


 


(g)The
number of votes
that may be
cast by holders
of Voting Securities
or Rights upon the
issuance or grant
thereof shall be deemed to be
the largest number of
votes that may be cast by the holders
of such securities or the
holders of any other
Voting Securities into which such
Voting Securities or Rights are convertible
or for which
they are exchangeable or exercisable, determined as
though such Voting Securities or Rights
were immediately convertible, exchangeable or
exercisable and without regard to
any anti-dilution or other adjustments provided for therein.


 


18.          
Other Termination Provisions.


 


(a)                   
Throughout the 7-year
period following the
Termination Date, the
Company shall indemnify Executive,
and hold him
harmless from, any
loss, damages, liability, obligation or expense that
he may suffer or incur
in connection with any
claim made or Proceeding c01mnenced
during such period relating to his service
as a director, officer, employee or agent of the Company (or any subsidiary thereat)
to the san1e extent and in same manner as the
Company shall be obligated so to indemnify Executive immediately prior
to the Termination Date; provided
that, if during such 7-year
period the Company adopts or assumes any indemnification policy or practice
with respect to its directors, officers, employees or
agents that is more favorable
than that in effect on the Termination
Date, Executive shall be entitled to such more
favorable indemnification.


 


(b)                   
Throughout the 7-year
period following the
Termination Date, the
Company shall maintain for
the benefit of
Executive directors' and officers'
liability insurance (on a "claims made"
basis) providing coverage
at least as favorable to
Executive (including with respect to
limits of liability, exclusions, and deductible
and retention amounts)
as that in effect on the Tem1ination
Date.


 


19.          
Limitation of Authoritv. Except
as expressly provided
herein, no provision
hereof shall be deemed
to authorize or
empower either party
hereto to act
on behalf of, obligate or bind
the other party hereto.


 


20.          Notices.
 Any notice
or demand required
or permitted to
be given or
made hereunder to or
upon either party
hereto shall be deemed to have been
duly given or made for all purposes
if (a) in writing and sent by (i) messenger or an overnight courier service
against receipt, or (ii) certified or registered
mail, postage paid, return receipt requested, or (b) sent by telegram, telecopy, telex
or similar electronic means, provided that
a written copy thereof is sent on the same day by postage-paid first-class mail,
to such party at the following address:


 


 



    	(11)



    	 



     


to the Company
at:


its then
current address of
its principal office
as stated on the cover
page of its
most recent public
filing under the Act and if such
address is then Executive's residence, to the address of the Company's Chief
Financial Officer.


 


with a copy
to:


Feder Kaszovitz
LLP


845 Third
Avenue, 11th Floor


New York,
New York 10022-6601 Attn: 
Irving Rothstein, Esq.


Fax: (212)
888-7776


 


 


to Executive
at:


11 Royal
Road Brookline, MA  02445


Fax:  (617)
975-3888


 


 


or
such other address
as either party
hereto may at
any tin1e, or
from time to
time, direct by notice
given to the
other party in
accordance with this Section. The date of giving or
making of any such notice or demand
shall be, in the case of clause
(a) (i), the
date of the receipt; in
the case of clause (a) (ii),
five business days after
such notice or demand is sent; and,
in the case of clause
(b), the business day next following the
date such notice or demand is sent.


 


21.           
Amendment.  Except as
otherwise provided herein,
no amendment of
this Agreement shall be
valid or effective,
unless in writing
and signed by or on
behalf of the parties hereto.


 


22.            
Waiver.  No course
of dealing or
omission or delay
on the part
of either party
hereto in asserting or
exercising any right
hereunder shall constitute or operate
as a waiver of any such right. 
No waiver of any provision hereof
shall be effective,
unless in writing and signed by or
on behalf of the party to be
charged therewith. No waiver
shall be deemed a continuing waiver or waiver in respect of
any other or subsequent breach
or default, unless expressly so stated
in writing.


 


23.
              Governing Law.
This Agreement shall be
governed by, and
interpreted and enforced
in accordance with, the
laws of the
Commonwealth of Massachusetts without regard
to principles of choice of law or
conflict of laws.



 


24.           
Jurisdiction.  Each of
the parties hereto
hereby irrevocably consents
and submits to
the jurisdiction of the
courts of the
Commonwealth of Massachusetts and the United
States District Court for the District of Massachusetts
in co1111ection with any suit, action or proceeding arising out
of or relating to this Agreement
or the transactions contemplated hereby, waives
any objection to venue in
the County of Norfolk, Commonwealth of Massachusetts,
or such District, and agrees that service of
any summons, complaint, notice or
other process relating to such proceeding may be effected in the manner provided
by clause (a) (ii) of Section 20.


 


25.           
Remedies.  In the
event of any
actual or prospective
breach or default
by either party hereto,
the other party
shall be entitled to equitable relief,
including remedies in
the nature of rescission, injunction and specific performance. All remedies hereunder
are cumulative and not exclusive, and
nothing herein shall be deemed
to prohibit or limit either party
from pursuing any other remedy
or relief available
at law or
in equity for such actual or
prospective breach or default, including the recovery of damages.


 


26.           Severability.
 The provisions
hereof are severable
and in the
event that any
provision of this Agreement
shall be detem1ined
to be invalid
or w1enforceable in any respect by
a court of competent jurisdiction, the remaining
provisions hereof shall not be affected, but shall,
subject to the discretion of
such court, remain in full force and
effect, and any invalid or
unenforceable provision shall be deemed, without further
action on the part
of the parties hereto, amended
and limited to the extent necessary to render
the same valid and
enforceable.


 


27.           Counterparts.
This Agreement may
be executed in
COU11terparts, each of
which shall be deemed an
original and which
together shall constitute one and the same agreement.


 


28.           
Assignment.  This Agreement,
and each right, interest
and obligation here1mder,
may not be assigned
by either party
hereto without the
prior written consent
of the other party
hereto, ai1d ai1y purported assignment without
such consent shall be void and without
effect, except that
this Agreement shall be assigned
to, and assumed by,
any person with or into
which the Company merges
or consolidates, or which acquires all
or substantially all of its
assets, or which otherwise succeeds to and continues the Company's
business substantially as an entirety.
 Except as otherwise expressly provided
herein or required by law, Executive shall not have any
power of anticipation, assignment or
alienation of any payments required to
be made to him hereunder, and no
other person may acquire ai1y right
or interest in ai1y thereof by reason of
any purported sale, assignment or other disposition
thereof, whether voluntary or involuntary, ai1y
claim in a bai1kruptcy or other insolvency
proceeding against Executive, or ai1y other ruling, judgment, order, write or decree.


 


29.           
Binding Effect.  This
Agreement shall be
binding upon ai1d
inure to the
benefit of the parties
hereto and their respective successors
and permitted assigns. This
Agreement is not intended, and shall not
be deemed, to create or confer
ai1y right or interest for the benefit
of any person not a party hereto.


 


30.           
Titles and Captions. 
The titles and
captions of the
Articles and Sections
of this Agreement are
for convenience of
reference only ai1d
do not in ai1y way define
or interpret the intent of the parties
or modify or otherwise affect any of the provisions hereof.


 



    	(12)



    	 



     


31.           
Grammatical Conventions.  Whenever
the context so
requires, each pronoun or verb
used herein shall be construed
in the singular or the plural sense
and each capitalized term
defined herein and each pronoun used herein shall be
construed in the masculine, feminine or neuter sense.


 


32.           
References.  The te1111s 
"herein,"  "hereto," 
"hereof,"  "hereby," 
and  "hereunder,"  and
 other te1111s  of
similar import, refer 
to this Agreement 
as a whole, and not to any Article,
Section or other  part hereof.


 


33.          
No Presumptions.  Each
party hereto acknowledges
that it has
had an opportunity
to consult with counsel
and has participated
in the preparation
of this Agreement. No party hereto
is entitled to any presumption with respect to
the interpretation of any provision hereof or the resolution of any
alleged ambiguity herein based
on any claim that the other party hereto drafted or
controlled the drafting of this Agreement.


 


34.           
Entire Agreement.  This
Agreement embodies the
entire agreement of
the parties hereto with
respect to the
subject matter hereof
and supersedes any prior agreement, commitment or arrangement relating tl1ereto,
written or oral, if any, which shall terminate
immediately upon the commencement of the Tenn, except that each party tl1ereto shall
(a) remain required to
perform any act and to satisfy any
obligation or condition that such party is required to perform or satisfy thereunder
with respect to any event occurring or circumstance
existing prior to the commencement of tl1e Term hereof (including
witl10ut limitation the payment or delivery to Executive of
any compensation, reimbursable expense or
employee benefit or perquisite to which he may be entitled, but which
has not yet been paid
to him, on
account of his employment under any such prior arrangement)
that has not been so perfo1111ed or satisfied, and (b) retain his or its tight
under any such prior assignment to assert
or to allege any claim or cause of action relating
to or based upon, or otl1erwise to enforce,
any provision tl1ereof with respect to any
event occurring or circumstance existing during
the term tl1ereof.


 


[Remainder of page
blank. Signatures appear
on following page.]


 



    	(13)



    	 



     


IN WITNESS
WHEREOF, the undersigned
have duly executed
this Agreement as
of the day and
year first above
written.


 


 


 


 


THE COMPANY:


 





 


Name:
 Robert Fireman


Title: Director
(on behalf of the
Board)


 


 


EXECUTIVE:


 


 


Thomas Kidrin