ex10-5.htm


    Exhibit
      10.5

     

    EMPLOYMENT
      AGREEMENT

    


    


    This
      Employment Agreement (this "Agreement"), is entered into on October 1, 2004,
      between VEMICS, Inc. ("VEMICS") and Fred Zolla ("Employee").

    


    In
      consideration of the mutual covenants contained herein, and for other good
      and
      valuable consideration, the receipt and sufficiency of which are hereby
      acknowledged, the parties hereto agree as follows:

    


    1. Employment;
      Duties.

    


    VEMICS
      hereby employs Employee as the Chief Executive Officer and Chairman of the
      Board
      of Directors of VEMICS. The employee shall function with full authority to
      establish policy, set corporate direction and manage VEMICS's strategic
      direction, investor relations, vendor relations, strategic alliances, operations
      and strategic planning. Employee agrees to perform and discharge such duties
      and
      responsibilities as are prescribed from time-to-time by the VEMICS Board of
      Directors and as are appropriate for video conference/distance learning
      executives of corporations with the financial, personnel and other resources
      that are similar to that of VEMICS.  The Employee shall devote all of
      his business time, attention, and energy to the Company and shall not, during
      the term of his employment, be actively engaged in any managerial or employment
      capacity in any other business activity for gain, profit, or other pecuniary
      advantage; provided that the foregoing does not prohibit the Employee from
      making investments that do not unreasonably interfere with the performance
      of
      his duties with the Company.

    


    2. Compensation
      and
      Withholding.

    


    For
      his
      services pursuant to this Agreement, VEMICS will pay Employee an interim salary
      at the annual rate of $86,400. VEMICS will pay the Salary semimonthly (as
      calculated by dividing the gross salary by 26 equal payments) and may withhold
      from the Salary, the Benefits and any other compensation provided to Employee
      hereunder, all Federal, state and local income, employment and other taxes,
      as
      and in such amounts as may be required to be withheld under applicable
      law.

    


    Employee's
      salary will immediately be increased to $155,000 ("Salary") for the first year
      either upon improved financial condition or full funding or of the VEMICS
      business plan (minimum of $3,000,000 in equity or debt financing or sales).
      Partial funding will result in proportionate salary increases to be determined
      by the compensation committee or through approval of the "Use of Proceeds"
      report submitted to investors.

    


    In
      the
      second year of this contract, following either improved financial condition
      or
      full funding of the business plan, Employee's salary shall be increased to
      $190,000 annually. The Salary may be increased and cash or stock bonuses may
      be
      awarded from time-to-time to Employee as the Board determines at its sole
      discretion. .

    


    3. Employment
      Term.

    


    The
      term
      of this Agreement will commence on the date of this agreement or Employee's
      first date of employment, whichever is later, and, unless sooner terminated
      as
      provided in Section 5, will end on December 31, 2007.

    


    4. Benefits
      and Incentive
      Payments.

    


        4.1           
      VEMICS will approve the grant to Employee of an option to purchase shares of
      the
      Company's common stock, in accordance with the terms of the Company's stock
      option plan, as the same may be amended from time to time, and a nonqualified
      stock option agreement to be entered into by the Employee and the Company.
      This
      option expires when Employee's employment terminates for cause or without cause
      or when Employee resigns, or upon Employee's death.

    


      
      4.2            Employee
      will be entitled to a noncumulative paid vacation of three (3) weeks,
plus
      the
      week between Christmas and New Year's Day for each full year of the term hereof,
      each of which weeks may be taken separately or together, and sick days in
      accordance with VEMICS's policy, during which Employee will be entitled to
      the
      full compensation and Benefits (as defined in Section 4.3) otherwise payable
      hereunder; provided, however, any allotted vacation time which has not been
      used
      in any particular year of the term hereof shall not be carried over to the
      next
      ensuing year without the express written consent of the Employer.

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     
      4.3            Employee
      may participate, on the same basis and subject to the same qualifications
      as other personnel of VEMICS, or as offered to key executives of the company,
      in
      any pension, profit sharing, life insurance, health insurance, hospitalization,
      dental, drug prescription, short and long term disability, accidental death
      or
      dismemberment and other benefit plans and policies VEMICS provides with respect
      to its personnel generally (collectively, the "Benefits").  In
      addition, VEMICS shall provide a workman's compensation and disability coverage
      equal to full salary in the event that the employee becomes permanently disabled
      while employed at VEMICS while engaged in performing his duties, or not, during
      work time or on personal time. In the event that the company shall fail to
      provide this coverage and employee becomes disabled VEMICS shall fulfill its
      obligation from corporate funds for the rest of employees life or for an equal
      duration that would be covered by an executive level similar insurance policy
      intended to provide an income for the employee and/or his family if employee
      becomes disabled and can not perform his regular duties.

    


     
      4.4            VEMICS
      will pay or promptly reimburse Employee, in accordance with VEMICS's
      normal policies and procedures for its personnel, for all allowances and
      expenses provided for hereunder and for all reasonable out-of-pocket business,
      entertainment and travel expenses incurred by Employee in the performance of
      his
      duties hereunder.  Upon full funding or sufficiently improved
      financial condition, VEMICS will provide employee with a monthly auto allowance
      of $800 which will cover all direct auto expense of auto payments (if any)
      gas,
      oil, and insurance.

     

    
                 
            
4.5             A
        guaranteed minimum year end bonus of $25,000 will also be paid to employee
        on or before December 15 of each year following the first full year of funding,
        providing the cash flow of the company warrants such payments. In the event
        that
        a cash payment can not be executed due to the cash flow situation at the
        time,
        as determined by the compensation committee, bonus money can accrue or be
        taken
        in stock options at the current best rate available.

    

    


                 
      5.         Termination of Employment
      and Severance Benefits.

     

     
      5.1            Termination by VEMICS
      of
      Employee with cause. VEMICS Board of Directors
      may terminate Employee's employment with VEMICS, with Cause. Termination with
      Cause shall be effective immediately. For purposes of this section "Cause"
      shall
      be defined as: (i) gross misfeasance, gross malfeasance or gross nonfeasance
      by
      the Employee with respect to his duties hereunder; (ii) conviction of the
      Employee of a criminal offense, other than a traffic offense; or (iii)
      performance by the Employee of any act of moral turpitude, fraud or gross
      dishonesty, with respect to the performance by the
      Employee of his duties hereunder. Employee
      terminated by VEMICS for cause, as defined herein, shall only be entitled to
      receive, except as otherwise required by law, salary, benefits and
      reimbursements (provided for in Section 4.3), that accrued prior to the
      effective date of the termination.  In addition, VEMICS shall pay
      salary and benefits of employee for an additional one hundred eighty (180)
      days
      from the effective date of termination herein. Nothing in this Section shall
      create any implication that VEMICS is waiving any remedy VEMICS may have for
      breach by the Employee of this Agreement. The amount of salary and benefits
      shall be the same as existed at the time of termination by Company. The Company
      shall be required to give employee thirty (30) days written notice prior to
      termination with cause as defined herein.

     

    
                        
        5.2            
        Termination be
        VEMICS
        of Employee without cause; If VEMICS's Board or its designee terminates
        Employee's employment hereunder for any reason other than Cause as defined
        under
        section 5.1, or Employee's death or Permanent Disability (as defined in Section
        5.5), then (a) the Employee shall be entitled to receive (i) the salary and
        benefits accrued prior to the Termination Date, and (ii) payment or
        reimbursement of any expenses, provided for under Section 4.3, that were
        incurred by Employee prior to the Termination Date, and (b) after the
        Termination Date. VEMICS will also continue to pay the full salary and benefits
        (salary to be paid in equal semimonthly payments) to Employee for a period
        of
        time of eighteen (18) months from the date employment is terminated by the
        Board
        of Directors without cause. The amount of salary and benefits shall be the
        same
        as existed at the time of termination by Company. The Company shall be required
        to give employee ninety (90) days written notice prior to termination without
        cause.

    

     

                      
      5.3            Employee's Resignation
      from
      VEMICS without Cause. If Employee voluntarily resigns his employment with
      VEMICS, without Cause, then employee shall be entitled to salary, benefits
      and
      reimbursements (provided for in Section 4.3), that accrued prior to the
      effective date of the termination.  In addition, VEMICS shall pay
      employee salary and benefits for an additional thirty (30) days from the
      effective date of termination. The amount of salary and benefits shall be the
      same as existed at the time of termination by Employee. The Employee shall
      be
      required to give VEMICS sixty (60) days written notice prior to termination
      without cause.

    
       

                       
        5.4  
         Employees
        Resignation from
        VEMICS with Cause.  If Employee resigns from VEMICS with Cause,
        as defined herein, then (a) Employee shall be entitled to receive (i) the
        salary
        and benefits accrued prior to the termination Date and (ii) payment or
        reimbursement of any expenses, provided for under Section 4.3, that were
        incurred by Employee prior to the termination date and (b) after the termination
        date. The amount of salary and benefits shall be the same as existed at the
        time
        of termination by Employee.  VEMICS will also continue to pay the full
        salary and benefits of Employee (salary to paid in equal semimonthly payments)
        to Employee for a period of time of eighteen (18) months from the date Employee
        resigns from VEMICS with Cause.  For purposes of this section "Cause"
        shall be defined as (i) a breach by VEMICS of any of its material agreements
        contained herein and the continuation of such breach for ten business days
        after
        written notice thereof is given to VEMICS (ii) The creation of a hostile
        work
        environment such that employee is unable to perform his responsibilities
        and
        duties as set forth under this agreement as well as the continuation of a
        hostile work environment for ten business days after written notice thereof
        is
        given to VEMICS. The Employee shall be required to give VEMICS thirty (30)
        days
        written notice prior to termination with cause as defined herein.

      


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      5.5           
        Compensation Upon
        Death or Permanent Disability.  If Employee dies or suffers a
        Permanent Disability, then VEMICS will () pay Employee or his estate, six
        months
        Salary and bonus as described in section 5.2, according to the regular payroll
        and (ii) continue for Employee's spouse and dependent children (if Employee
        has
        died) and for Employee and his spouse and dependent children (if Employee
        suffers a Permanent Disability), all of the Benefits that Employee was receiving
        at the time of his death or Permanent Disability, for 18 months after Employee's
        death or permanent disability.  This clause is in addition to the
        disability key man insurance policy clause in section 4.2.  "Permanent
        Disability' means the inability of Employee to perform his duties hereunder
        as a
        result of any physical or mental incapacity for 60 consecutive days or 90
        days
        during any twelve month period, as determined by the Board.  The
        amount of Salary and Benefits shall be the same as existed at the time of
        termination by Company.

       

                                  
         6.            Covenant Regarding
        Confidentiality.

      


      6.1.           
        Employee acknowledges that he will have access to, and knowledge of, VEMICS
        Confidential Information, and that improper use or disclosure of VEMICS
        Confidential Information by Employee, whether during or after the termination
        of
        his employment by VEMICS, could cause serious injury to the business of VEMICS.
        Accordingly, Employee agrees that he will forever keep secret and inviolate
        all
        VEMICS Confidential Information which has or shall come into his possession,
        and
        that he will not use the same for his own private benefit or directly or
        indirectly for the benefit of others, and that he will not discuss VEMICS
        Confidential Information with any other person or organization, all for so
        long
        as VEMICS Confidential Information is not generally known by, or accessible
        to,
        the public.

       

                         
        6.2           
        Definition of
        Confidential Information: 'VEMICS Confidential Information" as used in
        this Agreement shall mean any and all technical and non-technical information
        including patent, copyright, trade secret, and proprietary information,
        techniques, sketches, drawings, models, inventions, know-how, processes,
        apparatus, equipment, algorithms, software programs, software source documents,
        and formulae related to the current, future, and proposed products and services
        of VEMICS, and includes, without limitation, VEMICS information concerning
        research, experimental work, development, design details and specifications,
        engineering, financial information, procurement requirements, purchasing,
        manufacturing, customer lists, business forecasts, sales and merchandising,
        and
        marketing plans and information. "Confidential Information" shall also include
        proprietary or confidential information of any third party that may disclose
        such information to employee in the course of their employment to
        VEMICS.

       

                         
        6.3  
        The
        Employee further agrees that he will, immediately after termination of his
        employment with the Company, and in no event later than 24 hours after
        termination, return to the Company all books, records, customer and pricing
        lists, correspondences, contracts or orders, advertising or promotion material,
        and other written, typed or printed materials, whether furnished by the Company
        or prepared by the Employee, which contain any information relating to the
        Company's business, and the Employee agrees that he will neither make nor
        retain
        any copies of such materials.

      


      6.4           
        Nondisclosure
        and
        Nonuse obligation:  Employee hereby agrees that he will not
        make use of, disseminate, or in any way disclose any Confidential Information
        of
        the VEMICS to any other party to any person, firm, or business, except to
        the
        extent necessary for the performance of his duties as an employee of VEMICS
        and
        any other purpose that VEMICS may hereafter authorize in writing. Employee
        hereby agrees that it shall treat all Confidential Information of the VEMICS
        with due care to protect its Confidentiality.

       

                        
        6.5            Exclusions
        from
        Nondisclosure and Nonuse obligations: VEMICS and Employee's obligations
        under this section with respect to any portion of the VEMICS Confidential
        Information shall terminate under this section when Employee can document
        that:

      


      i. It
        was in
        the public domain at or subsequent to the time it was communicated
        to Employee by VEMICS through no fault of Employee;

      ii. It
        was
        rightfully in Employee's possession free of any obligation of confidence
        at or subsequent to the time it was communicated to Employee by VEMICS;
        or

      


      A
        disclosure of Confidential Information:

      


      a)         in
        response to a valid order by a court or other governmental
        body;


      b)        otherwise
        required by law, or necessary to establish the rights of either party
        under this Agreement, shall not be considered to be a breach of
        this  Agreement or a waiver of confidentiality for other purposes;
        provided, however, that Recipient shall provide prompt written notice thereof
        to
        enable Discloser to seek a protective order or otherwise prevent such
        disclosure.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

                       
        6.6  
         Enforceability
        of this
        Confidentiality Provision:  A breath of any of the promises
        contained in this section will result in irreparable and continuing damage
        to
        VEMICS for which there will be no adequate remedy at law, Employee agrees
        that
        VEMICS shall be entitled to injunctive relief and/or a decree for specific
        performance, and such other relief as may Court may deem proper and just.
        (including monetary damages if appropriate).

       

                                  
        7. Arbitration.

      


      Any
        dispute or controversy arising under or in connection with this Agreement
        or in
        any manner associated with Employee's employment shall be settled exclusively
        by
        arbitration in New York, in accordance with the Rules of the American
        Arbitration Association then in effect, except for the terms under Section
        6.6.
        The parties agree to execute and be bound by the mutual agreement to arbitrate
        claims relating to Employee's employment, attached hereto as Attachment
        A.

       

                                  
        8. General.

      


      8.1           
        This Agreement will be construed, interpreted and governed by the laws of
        the
        State of New York, without regard to the conflicts of law rules
        thereof.

       

                         
        8.2  
        The
        provisions set forth in Sections 6 ,7 and 8 of this employment agreement
        shall
        remain in full force and effect even in the event this agreement is terminated,
        for whatever reason, by Employee or VEMICS. All reference to VEMICS in Sections
        6 ,7 and 8 include VEMICS's subsidiaries and other affiliates, if
        any.

      


      8.3           
        This Agreement will extend to and be binding upon Employee, his legal
        representatives, heirs and distributees, and upon VEMICS, its successors
        and
        assigns regardless of any change in the business structure of VEMICS, be
        it
        through spin-offs merger, sale of stock, sale of assets or any other
        transaction. However, this Agreement is a personal services contract and,
        as
        such, Employee may not assign any of his duties or obligations
        hereunder.

      


       8.4           
        In the event that VEMICS shall be sold or the current organizational structure
        is altered or changed by a change in ownership then the stock vesting shall
        be
        accelerated to the end of the current employment year plus twelve months
        and be
        transferred to the employee's estate.

      


      8.5           
        In the event of a future disposition of the properties and businesses of
        the
        Company by merger, acquisition, consolidation, sale of assets or otherwise,
        then
        the Company may elect to assign this Agreement and all of its rights and
        obligations hereunder to the acquiring or surviving person or entity; provided
        that such corporation, person or entity
        shall
        assume in-writing all of the obligations of the Company hereunder; or in
        addition to the Company's other rights of termination, to terminate this
        Agreement upon at least five days' written notice by paying Employee the
        compensation owed him in accordance with Section 5.3 (Termination Without
        Cause)
        of this Agreement.

      


      8.6           
        This Agreement constitutes the entire agreement of the parties with respect
        to
        the subject matter hereof. No waiver, modification or change of any of the
        provisions of this Agreement will be valid unless in writing and signed by
        both
        parties. Any and all prior agreements between the parties written or oral
        relating to Employee's employment by VEMICS are of no further force or
        effect.

      


      8.7           
        The waiver of any breach of any duty, term or condition of this Agreement
        shall
        not be deemed to constitute a waiver of any preceding or succeeding breach
        of
        the same or any other duty, term or condition of this Agreement. No waiver
        of
        any provision of this Agreement shall be valid unless in writing and signed
        by
        both the Employee and an authorized officer of the Company. If any provision
        of
        this Agreement is unenforceable in any jurisdiction in accordance with its
        terms, the provision shall be enforceable to the fullest extent permitted
        in
        that jurisdiction and shall continue to be enforceable in accordance with
        its
        terms in any other jurisdiction.

      


      8.8           
        All notices pursuant to this Agreement shall be in writing and delivered
        personally receipt acknowledged (which shall include Federal Express, Express
        Mail or similar service) or sent by certified mail, return receipt requested,
        addressed to the parties hereto and shall be deemed given upon receipt, if
        delivered personally, and three days after mailing, if mailed, unless received
        earlier. Notices shall be addressed and sent to VEMICS at its principal
        executive office and to executive at this home address as it appears in VEMICS's
        personnel records.

       

      8.9           
        The parties agree that, in the event of any breach or violation of this
        Agreement, such breach of violation will result in immediate and irreparable
        injury and harm to,
        the
        innocent party, who shall be entitled to the remedies of injunction and specific
        performance or either of such remedies, if available, as well as all other
        legal
        or equitable remedies, if available, plus reasonable attorneys fees and costs
        incurred in obtaining any such relief.

      


             
        8.9A                      
The Section headings contained in this Agreement are for convenience of
        reference only and shall not be used in construing this Agreement.

      


              8.9B                      
        This Agreement may be executed in counterparts, each of which will be deemed
        an
        original but all of which will together constitute one and the same
        agreement.

      


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      IN
        WITNESS HEREOF, the parties have executed this Agreement as of the date first
        above written.

       

       

      
        
          	 	Vemics,
                  Inc.	 
	 	 	 	 
	
                  Date

                	
                  By:
                    

                	                                                         
                  	 
	 	 	Fred
                  Zolla	 
	 	 	Chairman/CEO