exv10w3






Exhibit 10.3




EXECUTIVE EMPLOYMENT AND NON-COMPETITION AGREEMENT




     THIS EMPLOYMENT AND NON-COMPETITION AGREEMENT (the “Agreement”), is entered into by and
between Digi-Data Corporation (the “Company”), and John Salerno (the “Executive”).



     The Company desires to employ Executive, and Executive desires to be employed by the Company.
In consideration of the mutual covenants and promises contained herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged by the parties hereto,
the parties agree as follows:




	1.	 	Term of Employment. The Company hereby agrees to employ the Executive, and the
Executive hereby accepts employment with the Company, upon the terms set forth in this
Agreement, for the period to be known as the “Employment Period”, which shall commence on
February 27, 2006 (the “Commencement Date”) and shall end on the earlier of (a) the three-year
anniversary of the date thereof, or (b) the effective date of any termination in accordance
with the provisions of Section 4 of this Agreement.







	2.	 	Title; Capacity.








	 	2.1	 	The Executive shall serve as the President of the BigVault Division. The
Executive shall be subject to the supervision of, and shall have such authority as is
delegated to him, by the CEO of the Company.
	 
	 	2.2.	 	The Executive agrees to undertake the duties and responsibilities of the
position of Division President, which may be assigned by the CEO of the Company, and
which may be altered or modified from time to time by the CEO of the Company. The
Executive agrees to abide by the rules, regulations, instructions, personnel
practices and policies of the Company and any changes thereof which may be adopted at
any time by the Company. The Executive acknowledges receipt of copies of all such
existing rules and policies committed to writing as of the date of this Agreement.
Executive shall not be required to relocate from New York to any other location at
which the Company conducts business.
	 
	 	2.3	 	During the Employment Period, the Executive will devote his full time (often
more than forty (40) hours per week), efforts and attention to the business of the
Company. During the Employment Period, the Executive shall be permitted to perform
outside business endeavors, subject to non-competitive agreements between the Company
and Executive, and, provided that such outside activity does not interfere with the
performance










 









 












	 	   	 	of Executive’s duties. It is understood that the Executive will resign his
current position as an officer of bigVAULT Storage Technologies, Inc., however,
he will still remain a major shareholder and board member provided i) such
activities do not constitute a conflict of interest or ii) that such time and
effort expended on these activities does not materially affect the performance of
the Executive’s responsibilities for the Company.






	3.	 	Compensation and Benefits.






	 	3.1	 	Salary. As compensation for his employment hereunder, the Company shall
pay the Executive an annual base salary of $126,000.00, payable in accordance with
the Company’s normal payroll schedule.
	 
	 	3.2	 	Bonus Upon Sale Or Other Disposition.






	 	(a)	 	Subject to Section 5, in the event of the sale or other
disposition of all or substantially all of the stock or assets of the Company
(a “Sale”) that occurs pursuant to the provisions of a binding agreement
entered into prior to the end of the Bonus Period, as such term is defined
below, the Executive shall be entitled to a share of the Net Proceeds (as such
term is defined herein) of the Sale, determined in the manner set below.
	 
	 	(b)	 	First, any and all loans and/or liabilities of the Company
payable to third parties shall be satisfied out of the proceeds of the Sale
(provided, however, that if the stock of the Company is sold, then to the
extent that the purchaser does not require the loans and/or liabilities of the
Company to be satisfied as a condition to such Sale, such loans and/or
liabilities payable to third parties shall not be satisfied out of the
proceeds of such Sale).
	 
	 	(c)	 	Second, any and all loans and/or capital contributions made
to the Company by its shareholder and/or any affiliate thereof on or after
January 1, 2005 shall be repaid, together with accrued and unpaid interest
thereon, with interest to accrue beginning on the date hereof at the rate of
five percent (5%) per annum on the outstanding balance as of the date hereof
on all such loans and/or capital contributions made on or after the date
hereof.
	 
	 	(d)	 	The proceeds of a Sale remaining after the application of
Sections 3.2(b) and 3.2(c) hereof shall hereinafter be referred to as the “Net
Proceeds”. If Executive is entitled to a share of Net Proceeds










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	 	 	 	pursuant to Section 3.2(a) hereof, his share thereof shall be determined as follows:






	 	(i)	 	Net Proceeds of less than $10 million: Executive’s share is the greater of
(i) $50,000, or (ii) 5.0% of Net Proceeds.
	 
	 	(ii)	 	Net Proceeds between $10 million and $20 million: Executive’s share is 6.25%
of Net Proceeds.
	 
	 	(iii)	 	Net Proceeds in excess of $20 million: Executive’s share is 7.5% of Net
Proceeds.






	 	 	 	The sharing percentages set forth above shall apply only to the Net Proceeds (if any)
falling within the respective intervals. The amount determined pursuant to this Section
3.2(d) shall be hereinafter referred to as the “Sale
Bonus”.






	 	(e)	 	Notwithstanding the foregoing, if Executive’s employment with the Company is terminated as
the result of Executive’s death or “disability” (as such term is defined in Section 4.3
hereof), the Sale Bonus shall equal; (i) if such death or disability occurs on or prior to
February 27, 2007, zero (0); (ii) if such death or disability occurs
after
February 27,
2007 and
on
or
prior
to February 27, 2008, one third (1/3) of the Sale Bonus
otherwise determined pursuant to Section 3.2(d) hereof; (iii) if such death or disability
occurs after ___ February 27, 2008 and on or prior to February 27, 2009, two thirds (2/3) of the
Sale Bonus otherwise determined pursuant to Section 3.2(d) hereof; and (iv) if such death or
disability occurs after February 27, 2009, one hundred percent (100%) of the Sale Bonus
otherwise determined pursuant to Section 3.2(d) hereof.
	 
	 	(f)	 	For purposes of this Agreement, the term “Bonus
Period” shall be defined as follows:






	 	(i)	 	If the Executive is employed by the Company as of the date on which a
binding agreement that ultimately culminates in a Sale is executed, such agreement
shall in all events be deemed entered into during the Bonus Period;
	 
	 	(ii)	 	If the Executive is terminated “for cause” (as such term is defined herein),
the Bonus Period shall be the period ending on the date of any such termination;










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	 	(iii)	 	If the Executive voluntarily terminates his employment with
the Company, the Bonus Period shall be the period ending on the
date of any such termination;
	 
	 	(iv)	 	If the Executive is terminated by the
Company, other than “for cause”, the Bonus Period shall be the
period ending on the later of (A) February 27, 2009 or (B) the
second (2nd) anniversary of the date of such termination;
provided, however, that if the Executive is terminated by the
Company pursuant to Section 5.3(a), the Bonus Period shall be the
period ending on the date of any such termination; and
	 
	 	(v)	 	If the Executive’s employment is terminated
as the result of the Executive’s death or disability, the Bonus
Period shall be the period ending on the second (2nd)
anniversary of the date of such death or disability.






	 	(g)	 	If Mehul Mehta is no longer employed by the Company (other
than due to his death or disability), on February 27, 2007, then the
Executive shall be entitled to only two-thirds (2/3) of the Sale Bonus that
he would otherwise be entitled to hereunder (if any) Mehul Mehta is employed
by the Company on February 27, 2007, but is no longer employed by the
Company (other than due to his death or disability) on February 27, 2008,
then the Executives shall be entitled to only seven-ninths (7/9) of the Sale
Bonus that he would otherwise be entitled to hereunder (if any). If Mehul
Mehta is employed by the Company on February 27, 2008 but is no longer
employed by the Company (other than due to his death or disability) on
February 27, 2009, than the Executive shall be entitled to only eight-ninths
(8/9) of the Sale Bonus that he would otherwise be entitled to hereunder (if
any). This Section 3.2(g) shall be applied after first applying all other
provisions of Section 3.2.






	 	3.3	 	Bonus Based On Objectives. The Executive may be eligible to receive
an annual cash bonus based upon objectives set by the Company. Executive acknowledges
and agrees that the granting of any bonus to the Executive, and the amount awarded,
will be made at the complete and sole discretion of the Board and that he has no
right, guarantee or entitlement to such bonus.










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	 	3.4	 	Withholding. The Company will withhold from any salary or bonus
payable to Executive under this Agreement such federal, state or local taxes as
shall be required to be withheld pursuant to any applicable law or regulation, and
may withhold for other normal deductions for fringe benefits and as otherwise
agreed by the parties.
	 
	 	3.5	 	Benefits: In addition to the compensation provided herein, Executive
shall be entitled to the benefits available generally to Company employees pursuant to
Company programs, including, by way of illustration, vacation, paid holidays, sick
leave, retirement, any insurance programs of the Company which may now or, if not
terminated, shall hereafter be in effect, or in any other or additional such programs
which may be established by the Company, as and to the extent any such programs are or
may from time to time be in effect, as determined by the Company and the terms hereof.
Executive’s eligibility for and participation in such benefit plans is governed by
the terms and conditions of those plans, and by the — policies of Company.






	4.	 	Employment Termination. The employment of the Executive by the Company pursuant
to this Agreement shall terminate upon the occurrence of any of the following:






	 	4.1	 	Expiration of the Employment Period in accordance with Section 1(a).
	 
	 	4.2	 	At the election of the Company, for cause, immediately upon notice by the
Company to the Executive. For the purposes of this Section 4.2, “for cause” shall
include, but not be limited to, a termination for any of the following or any
statement of intention to do any of the following (including any act or omission which
gives rise to any of the following): dishonesty (including but not limited to any acts
of embezzlement or misappropriation of funds); fraud; serious dereliction of
fiduciary obligation; criminal activity; conviction of a felony, plea of guilty or
nolo contendere to a felony charge or any criminal act involving moral turpitude;
unauthorized disclosure of confidential information belonging to the Company, or
entrusted to the Company by a client, customer, or other third party; a willful
violation of any major Company rule, regulation, procedure or policy; being under the
influence of drugs or alcohol (other than prescription medicine or other
medically-related drugs to the extent that they are taken in accordance with their
directions) during the performance of any of the duties for which Executive is
assigned to perform resulting in a material reduction of work effectiveness; engaging
in behavior that would constitute grounds for liability for harassment or
discrimination (as proscribed by the U.S. Equal Employment Opportunity










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	 	 	 	Commission or any other applicable state or local regulatory body, regulation or
law) or other willful conduct that is violative of laws governing the workplace;
or a breach of any promise, duty, restriction or obligation under this Agreement.
	 
	 	4.3	 	Upon the death or disability of the Executive. As used in this Agreement, the
term “disability” shall mean the inability of the Executive, due to a physical or
mental disability, to perform the essential functions of his position, with or without
reasonable accommodation. Executive agrees and acknowledges that a termination under
this paragraph does not violate any federal, state or local law, regulation or
ordinance, including but not limited to the Americans With Disabilities Act.
	 
	 	4.4	 	At the election of the Executive upon not less than forty-five (45) days
prior written notice of termination.
	 
	 	4.5	 	At the election of the Company, without cause, at any time for any or for no
reason, with or without notice.
	 
	 	4.6	 	By mutual agreement of the parties.






	5.	 	 Effect of Termination of Employment.






	 	5.1	 	Termination for Cause or at Election of Executive. In the event
the Executive’s employment is terminated for cause pursuant to Section 4.2 or at the
election of the Executive pursuant to Section 4.4, the Company shall pay to the
Executive the compensation and benefits otherwise payable to him under Section 3.1 of
this Agreement through the last day of his actual employment by the Company. No
further compensation (including any Sale Bonus) shall be paid.
	 
	 	5.2	 	Termination Upon Expiration or Disability. In the event the Executive’s
employment is terminated due to the expiration of the Employment Period pursuant to
Section 4.1, or upon disability pursuant to Section 4.3, the Company shall pay to the
Executive the compensation and benefits otherwise payable to him under Section 3.1 of
this Agreement through the last day of his actual employment by the Company, and, in
the case of termination due to the expiration of the Employment Period pursuant to
Section 4.1, for an additional six (6) months, as well. In addition, the Company
shall pay to the Executive any Sale Bonus that may otherwise become due and payable
pursuant to the terms and conditions of Section 3.2 of this Agreement. No further
compensation shall be paid.






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	 	5.3	 	Termination Without Cause. In the event the Executive’s employment is
terminated without cause, pursuant to Section 4.5, (i) the Executive shall remain
eligible to receive a Sale Bonus pursuant to and in accordance with the provisions
of Section 3.2 hereof, including Section 3.2(f)(iv), and (ii) the Company shall
continue to pay Executive his salary, pursuant to Section 3.1, for a period of time
after termination as described below:






	 	(a)	 	If the Company has not achieved the target
performance benchmarks as set forth on Exhibit B, attached hereto, with
respect to either the first eighteen (18) months of the Employment Period, or,
thereafter, with respect to the most recently ended six (6) month semi-annual
period, and provided that the Company terminates the employment of the
Executive within thirty (30) days after the end of either the first eighteen
(18) months of the Employment Period, or, thereafter, the most recently ended
six (6) month semi-annual period, the Company shall pay Executive his salary
pursuant to Section 3.1 of this Agreement for six months following the date of
the termination of Executive’s employment.
	 
	 	(b)	 	If the Company terminates the employment of the Executive
without cause, other than pursuant to Section 5.3(a) hereof, then the Company
shall pay Executive his salary pursuant to Section 3.1 of this Agreement for
the following number of months following the date of the termination of
Executive’s employment: the sum of (i) six months, and (ii) the excess (if
any) of thirty six (36) months over the number of full months Executive has
been employed by the Company.
	 
	 	(c)	 	The Executive shall not be entitled to any of the pay
described in this Section 5.3 unless and until the Executive executes and
delivers to the Company a release in form and substance acceptable to
the Company and substantially similar to the release attached hereto as
Exhibit A by which the Executive releases the Company from any obligations and
liabilities related to his employment or termination of employment,
except for the Company’s obligations with respect to the payment of
continuing salary under this Section 5.3. The parties hereto acknowledge and
agree that the compensation to be provided under this Section 5.3 is to be
provided in consideration for the above-specified release, including a release
under the Age Discrimination in Employment Act.










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	 	5.4	 	Termination for Death. If the Executive’s employment is terminated by
death pursuant to Section 4.3, the Company shall pay to the estate of the
Executive the compensation which would otherwise be payable to the Executive under
Section 3.1 of this Agreement through the last day of his actual employment by the
Company. In addition, in the event that any Sale Bonus becomes payable pursuant
to Section 3.2 hereof, in accordance with its terms (including Section 3.2(e) and
Section 3.2(f)(iv)), such Sale Bonus (if any) shall be paid by the Company to the
estate of the Executive.
	 
	 	5.5	 	Survival. The provisions of Sections 6, 7 and 15 shall survive the
termination of Executive’s employment for any reason. The provisions of Section 3.2
shall survive the termination of Executive’s employment for any reason in accordance
with its terms, including the provisions of Sections 3.2(e) and 3.2(f).






	6.	 	Non-Competition and Conflicts of Interest.






	 	6.1	 	During the Employment Period and for a period of one (1) year after the
termination or expiration thereof, Executive shall not, directly or indirectly, in
any capacity whatsoever (other than as the holder of not more than one percent (1%)
of the total outstanding stock of a publicly held company), either on Executive’s own
behalf or as a partner, officer, director, employee, agent, or consultant of any
other person or entity, do or attempt to do any of the following:






	 	(a)	 	compete with the Company, including by engaging in the
business of (i) providing hardware, software, and services relating to
storing, accessing, and distributing digital content, including but not
limited to internet and locally addressed storage, remote and local vaulting
services, and related ancillary products and services, (ii) the design,
manufacture, sale or promotion of high-capacity computer storage systems, such
as disk-based (RAID) storage products, and (iii) related services. The parties
agree that they will negotiate in good faith on any disagreement related to
the interpretation of Section 6.1(a)(i), (ii) or (iii) hereof;
	 
	 	(b)	 	solicit, encourage, or induce any current or prospective
clients, customers, suppliers, vendors, or contractors of the Company, to
terminate or decrease any business relationship with the Company or not to
proceed with, or enter into, any business relationship with the Company, nor
shall Executive otherwise interfere with any business relationship between the
Company and any of its current










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	 	 	 	or prospective franchisees, clients, customers, suppliers, vendors, or
contractors; or
	 
	 	(c)	 	solicit, recruit, encourage or induce any partner, officer,
director, employee, agent, consultant or independent contractor of the
Company to terminate his/her employment or relationship with the Company, or
otherwise interfere with or disrupt the Company’s relationship with any
partner, officer, director, employee, agent, or consultant.






	 	6.3	 	The parties agree that the relevant public policy aspects of covenants not to
compete have been discussed, and that every effort has been made to limit the
restrictions placed upon the Executive to those that are reasonable and necessary to
protect the Company’s legitimate interests.
	 
	 	6.4	 	Executive recognizes, acknowledges and agrees that much of the
Company’s business is conducted over the Internet, and that the Internet poses special
concerns and considerations with respect to covenants not to compete, including the
fact that limiting the geographic scope of any restrictions placed upon
Executive would not adequately protect Company’s legitimate interests.
The Executive also recognizes, acknowledges and agrees that Company’s business
is global in scope and that the time period and scope of the foregoing restrictions
are reasonable and necessary for the protection of Company’s valid business interests.
The Executive further recognizes, acknowledges and agrees that if his employment with
Company terminates for any valid or other reason, the Executive can earn a livelihood
without violating any of the restrictions contained in this Section.
	 
	 	6.5	 	If any restriction set forth in this Section 6 is found by any court of
competent jurisdiction to be unenforceable because it extends for too long a period of
time or over too great a range of activities or in too broad a geographic area, it
shall be interpreted to extend only over the maximum period of time, range of
activities or geographic area as to which it may be enforceable.
	 
	 	6.6	 	The restrictions contained in this Section 6 are necessary for the protection
of the business and goodwill of Company and are considered by Executive to be
reasonable for such purpose. Executive recognizes, acknowledges and agrees that any
breach by him of any of the provisions contained in this Section 6 will cause Company
immediate, material and irreparable injury and damage, and there is no adequate remedy
at law for such breach. Accordingly, in the event of a breach of any of the provisions
of






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	 	 	 	this Section 6 by Executive, in addition to any other remedies it may have at
law or in equity, Company shall be entitled immediately to seek enforcement of
this Section 6 in a court of competent jurisdiction by means of a decree of
specific performance, an injunction without the posting of a bond or the
requirement of any other guarantee, and any other form of equitable relief, and
Company is entitled to recover from Executive the costs and attorneys’ fees it
incurs to enforce the terms of this Section. This provision is not a waiver of any
other rights which Company may have under this Agreement, including the right to
recover money damages.
	 
	 	6.7	 	The Executive represents and warrants to the Company that Executive is not
bound by any restrictive covenants and has no prior or other obligations or
commitments of any kind that would in any way prevent, restrict, hinder or interfere
with Executive’s acceptance of employment or the performance of all duties and
services hereunder to the fullest extent of the Executive’s ability and knowledge.
The Executive agrees to indemnify and hold harmless the Company for any
liability the Company may incur as the result of the existence of any such covenants,
obligations or commitments.
	 
	 	6.8	 	Executive agrees to comply with all rules and policies of the Company
relating to conflicts of interest, specifically including but not limited to the
following:






	 	(a)	 	Executive will promptly notify the Company of any conflicts
of interest or excessive gifts or offers of gifts or remuneration from
clients, suppliers, or others doing or seeking to do business with the
Company;
	 
	 	(b)	 	Executive will promptly inform the Company of any business
opportunities that come to the attention of Executive that relate to the
existing or prospective business of the Company and will not participate in
any such opportunities without the prior written consent of the Company;
	 
	 	(c)	 	Executive will not engage in any act involving dishonesty,
bad faith or lack of integrity or candor with respect to the Company;
	 
	 	(d)	 	Executive will not engage in any act or omission that injures
the business or affairs of the Company, monetarily or otherwise; and




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	 	(e)	 	Executive will not engage in any other employment or business
activity that interferes with the performance of Executive’s duties
during working hours or at Executive’s work location.






	7.	 	Proprietary Information and Developments.






	 	7.1	 	Proprietary
Information.






	 	(a)	 	Executive agrees that all information and know-how,
regardless of whether in writing, of a private, secret or confidential nature
concerning the Company’s business or financial affairs, including the terms
of this Agreement, (collectively, “Proprietary Information”) is
and shall be the exclusive property of the Company. By way of
illustration, but not limitation, Proprietary Information may include
information about Company’s methods of operation, manufacturing, selling,
marketing, promoting or otherwise providing products, goods or services,
trade secrets, inventions, processes, techniques, projects, developments,
plans, financial data, personnel data, computer programs, and existing or
potential Customers, suppliers, officers, directors, agents, vendors, owners,
shareholders, contractors, partners, representatives, advisors, and
consultants of Company. Executive will not disclose any Proprietary
Information to any person outside the Company or use the same for any
unauthorized purposes, and will not use or aid others in obtaining or using
any such Proprietary Information without written approval by an officer of the
Company, either during or after his employment, unless and until such
Proprietary Information has become public knowledge without fault by the
Executive.
	 
	 	(b)	 	Executive agrees that all files, letters, memoranda, reports,
records, data, sketches, drawings, notebooks, computer programs, or other
written, photographic, electronic or other tangible material
containing Proprietary Information, whether created by the
Executive or others, which shall come into his custody or possession,
shall be and are the exclusive property of the Company to be used by the
Executive only in the performance of his duties for the Company and for the
benefit of Company in connection with the performance of those duties, and
immediately upon the termination of the Executive’s employment, or at any
other time upon request of the Company, the Executive shall return to the
Company all such Proprietary Information of the Company.




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	 	(c)	 	Executive agrees that his obligation not to disclose or use
information, know-how and records of the types set forth in paragraphs (a)
and (b) above, also extends to such types of information, know-how,
records and tangible property of affiliates of the Company, customers of
the Company or suppliers to the Company or other third parties who may
have disclosed or entrusted the same to the Company or to the Executive in
the course of the Company’s business.






	 	7.2	 	Inventions and Developments.






	 	(a)	 	Executive will make full and prompt disclosure in writing to
the Company of any and all inventions, ideas, discoveries,
information, works of authorship, documents, records, proposals, writings,
drawings, plans, schematics, computer software or programs, know-how,
processes, formulas, designs, data, improvements or revisions
(collectively, “Inventions”), whether or not copyrightable or patentable,
which Executive may in whole or any part make, devise, conceive, create,
design, invent, develop, reduce to practice or discover, either solely or
jointly with another or others (whether or not Company personnel), during
Executive’s employment by Company, including those created, made,
conceived or reduced to practice while employed by the Company prior to the
date hereof, (whether at the request or upon the suggestion of Company or
otherwise, and whether during or outside of normal working hours), in
connection with computer software, data storage, or other related services of
the Company which is offered, used, sold or being developed by Company at the
time of such Inventions. All of the foregoing will belong exclusively to
Company and Company will be deemed the author or creator thereof.
	 
	 	(b)	 	Executive agrees to assign and does hereby assign to the
Company (or any person or entity designated by the Company) all his right,
title and interest in and to all Inventions and all related patents, patent
applications, copyrights and copyright applications.
	 
	 	(c)	 	Both during and after his employment with the Company and
without further compensation, Executive agrees to cooperate fully with the
Company, including but not limited to executing and delivering documents,
immediately upon request, in perfecting or recording in Company all right,
title and interest in and to all Inventions, filing for and/or obtaining
patent(s) or copyright




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	 	 	 	registration(s) on all Inventions (both in the United States and foreign
countries), and protecting and enforcing Company’s rights in all
Inventions. Executive further agrees that Company is authorized to take
such actions (including but not limited to making filings) in Company’s
name and/or Executive’s name which Company, in its sole discretion, deems
necessary or desirable to accomplish in order to protect its rights and
interests in any Invention.






	8.	 	Company Property. All correspondence, records, documents, software,
promotional materials, and other Company property, including all copies, which come into the
Executive’s possession by, through or in the course of his employment, regardless of the
source and whether created by the Executive, are the sole and exclusive property of the
Company, and immediately upon the termination of the Executive’s employment, the Executive
shall return to the Company all such property of the Company.
	 
	9.	 	Notices. All notices required or permitted under this Agreement shall be in writing
and shall be deemed effective upon delivery personally, by facsimile or by overnight mail, or
upon deposit in the United States Post Office, by registered or certified mail, postage
prepaid, addressed to the other party at the address last known, or at such other address or
addresses as either party shall designate to the other in accordance with this Section 9.
	 
	10.	 	Pronouns. Whenever the context may require, any pronouns used in this Agreement
shall include the corresponding masculine, feminine or neuter forms, and the singular forms of
nouns and pronouns shall include the plural, and vice versa.
	 
	11.	 	Entire Agreement; Modification. This Agreement constitutes the
entire agreement between the parties and supersedes all prior agreements and
understandings, whether written or oral, relating to the subject matter of this Agreement.
This Agreement may be amended or modified only by a written instrument executed by both the
Company and the Executive.
	 
	12.	 	Severability. This Agreement shall be enforceable to the fullest extent allowed by
law. In the event that a court holds any provision of this Agreement to be invalid or
unenforceable, the parties agree that, if allowed by law, that provision shall be reduced,
modified or otherwise conformed to the relevant law, judgment or determination to the degree
necessary to render it valid and enforceable without affecting the rest of this Agreement.
Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction
shall, as to such jurisdiction, be deemed severable from the remainder of this Agreement, and
the remaining




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	 	 	provisions contained in this Agreement shall be construed to preserve to the maximum
permissible extent the intent and purposes of this Agreement. Any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render unenforceable such
provision in any other jurisdiction.
	 
	13.	 	Governing Law. The validity and construction of this Agreement or of any of its terms
or provisions shall be determined under the laws of the State of Maryland, regardless of any
principles of conflicts of laws or choice of laws of any jurisdiction. Except as set out in
Section 15 below, the state courts of the State of Maryland and, if the jurisdictional
prerequisites exist at the time, the United States District Court for Maryland, shall have
sole and exclusive jurisdiction to hear and determine any dispute or controversy arising under
or concerning this Agreement.
	 
	14.	 	Successors and Assigns. This Agreement shall be binding upon and inure to the
benefit of both parties and their respective successors and assigns, including any corporation
with which or into which the Company may be merged or which may succeed to its assets or
business, provided, however, that the obligations of the Executive are personal and shall not
be assigned by him/her. Notwithstanding the foregoing, Executive has the right to assign to
any third party any right to receive any bonus payment set forth in Section 3.2 of this
Agreement.
	 
	15.	 	Arbitration.






	 	15.1	 	Executive and the Company agree that any controversy, dispute or claim
directly or indirectly arising out of or relating to this Agreement, or the breach
thereof, or arising out of or relating to the employment of the Executive, or the
termination thereof, shall be resolved either as provided for by applicable law, or,
at the option of either party, by impartial binding arbitration. In the event that
either party demands arbitration, Executive and the Company agree that such
arbitration shall be the exclusive, final and binding forum for the ultimate
resolution of such claims, subject to any rights of appeal that either party may have
under the Federal Arbitration Act and/or under applicable state law dealing with the
review of arbitration decisions. Specifically, this Agreement is intended to include,
but is not limited to, claims under Title VII of the Civil Rights Act of 1964, as
amended, the Age Discrimination in Employment Act, the Fair Labor Standards Act, the
Americans with Disabilities Act, the Family and Medical Leave Act, any wage and hour
or wage payment or collection law, or any other federal, state, or local law,
regulation or ordinance regarding employment. It also includes, but is not limited
to, all claims for breach of contract or wrongful discharge, breach of express or
implied promises or covenants of good faith and fair dealing, intentional or
negligent infliction of emotional distress, defamation, or any loss,




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	 	 	 	expense, or claim whatsoever resulting from or related to Executive’s employment.
	 
	 	15.2	 	Executive and the Company understand and acknowledge that this Agreement
means that neither can pursue an action against the other in a court of law regarding
any employment dispute, except for claims involving workers’ compensation benefits or
unemployment benefits, and except as set forth elsewhere in this Agreement, in the
event that either party notifies the other of its demand for arbitration under this
Agreement. The parties also agree that the obligation to arbitrate any dispute is
fully enforceable under the Federal Arbitration Act, and that a judgment upon any such
award may be entered in any court having jurisdiction over such claims. The parties
further understand that this Agreement does not alter any of the substantive rights
that the parties may have under law, including the Executive’s statutory right to
file a charge with an administrative agency for investigative purposes or other
action by the agency, nor does it limit or restrict Executive’s ability to participate
or assist any agency in its investigation, processing or handling of any charge. This
Agreement simply transfers final resolution of a party’s right to seek relief from
either a judge or a jury to a speedy and impartial arbitrator for the mutual benefit
of both parties, when arbitration is demanded.
	 
	 	15.3	 	In the event that Executive or the Company initially elects to file suit in
any court, the other party will have 60 days from the date that it is formally served
with a summons and copy of the suit to notify the party filing suit of the non-filing
party’s demand for arbitration. In that case, the suit must be dismissed by consent of
the parties or by the court on motion, and arbitration commenced with the American
Arbitration Association (“AAA”). In situations where suit has not been filed, either
Executive or the Company may initiate arbitration by serving a written demand for
arbitration upon the other party and the AAA. Such a demand must be served within
the same limitations period that would apply if the action were pursued in court.
Any claim which is not timely made will be deemed waived.
	 
	 	15.4	 	Any arbitration will be conducted in accordance with the American Arbitration
Association National Rules for the Resolution of Employment Disputes, effective
September 15, 2005, and any amendments or revisions thereto (“AAA Rules”). A copy of
the AAA Rules may be obtained upon request. The dispute shall be heard and determined
by one arbitrator and that arbitrator shall be a member of the National Academy of
Arbitrators. The arbitrator may grant any remedy or relief that would have been




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	 	 	 	available to the parties had the matter been heard in court. Unless otherwise
mutually agreed upon, the arbitration shall be heard within 25 miles of the
Executive’s current or most recent place of employment. The Company will pay any
filing or other administrative fees that exceed $100.00 (One Hundred Dollars), and
that are required by AAA for the cost of providing administrative services. All
other expenses of the arbitrator, including required travel, shall be borne by the
Company. As provided by the AAA Rules, the arbitrator shall have the authority to
order such discovery as the arbitrator considers necessary to a full and fair
exploration of the issues in dispute, consistent with the expedited nature of
arbitration. The parties shall bear their own costs and attorneys’ fees incurred
during this discovery process, as well as during the arbitration.
	 
	 	15.5	 	The parties understand and agree that this Section 15, concerning
arbitration, shall not include any controversies or claims related to any agreements
or provisions (including provisions in this Agreement) respecting
confidentiality, proprietary information, non-competition, non-solicitation, trade
secrets, or breaches of fiduciary obligations by Executive, which shall not
be subject to arbitration.
	 
	 	15.6	 	Executive has been advised of his right to consult with an attorney prior
to entering into this Agreement.






	16.	 	Miscellaneous.






	 	16.1	 	No delay or omission by the Company in exercising any right under this
Agreement shall operate as a waiver of that or any other right. A waiver or consent
given by the Company on any one occasion shall be effective only in that instance and
shall not be construed as a bar or waiver of any right on any other occasion.
	 
	 	16.2	 	The headings of the sections of this Agreement are for convenience of
reference only and in no way define, limit or affect the scope or substance of any
section of this Agreement.




IN WITNESS WHEREOF, the parties hereto have executed this Employment Agreement




	 	 	 	 

	/s/ John Salerno

	 	By: Digi-Data Corporation
	 
	 	 
	 
	 	 
	 

	 	/s/ Illegible
	 

	 	 






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