**Exhibit 10(L)**

 

**EMPLOYMENT AGREEMENT**

 

THIS EMPLOYMENTAGREEMENT (the “Agreement”) is made and entered into as of May 6,2005, by and between****LyrisTechnologies, Inc., a Delaware corporation (together with its successorsand assigns permitted hereunder, the “Company”), and Luis Rivera (“Employee”).

 

**RECITALS**

 

WHEREAS, Employeeis currently employed by the Company, which develops software and services fore-mail marketing, e-mail filtering and spam prevention (as the Companycurrently conducts and does so during the term of this Agreement, the “Business”);

 

WHEREAS, theCompany is, concurrently with the execution hereof, entering into a stockpurchase agreement with the Commodore Resources, Inc. a Delawarecorporation (“Commodore”), and the other parties thereto (the “StockPurchase Agreement”); and

 

WHEREAS, Employeeand the Company desire to set forth herein the terms of employment forEmployee, which employment shall be effective as of the closing of thetransactions contemplated by the Stock Purchase Agreement (the “EffectiveDate”).

 

NOW, THEREFORE, inconsideration of the premises and the mutual covenants and agreements containedherein, the sufficiency of which is hereby acknowledged, the parties agree asfollows:

 

**AGREEMENTS:**

 

**1.****                                      EmploymentPeriod**.  Subject to Section 3or mutual written agreement between the Company and Employee, the Companyhereby agrees to employ Employee, and Employee hereby agrees to be employed bythe Company, in accordance with the terms and provisions of this Agreement, forthe period commencing as of the Effective Date and ending on the fifthanniversary of the Effective Date (the “Initial Term”); providedthat, at the expiration of the Initial Term, and on each anniversary of suchexpiration thereafter, the Employment Period shall automatically be extended inone year increments (the “Extended Term”) unless at least three monthsprior to the ensuing expiration date (but no more than 9 months prior to suchexpiration date), the Company or Employee shall have given written notice to theother party that it or he does not wish to extend this Agreement (a “Non-RenewalNotice”).  The term “EmploymentPeriod,” as utilized in this Agreement, shall refer to the EmploymentPeriod as so automatically extended.

 

**2.****                                      Termsof Employment.**

 

(a)                                  Positionand Duties.

 

(i)                                     During theEmployment Period, Employee shall serve as President and Chief ExecutiveOfficer of the Company and, in so doing, shall report to the Board of Directorsof the Company (the “Board”). Employee agrees to perform whatever duties the Board****may assign to Employee from time to time,consistent with Employee’s position with the Company.  Employee shall have supervision and controlover, and responsibility for, such 

 

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management and operationalfunctions of the Company as are usual and customary for such position, andshall have such other powers and duties as may from time to time be prescribedby the Board.

 

(ii)                                  During the EmploymentPeriod, and excluding any periods of vacation and sick leave to which Employeeis entitled, Employee agrees to devote all of his business time to the businessand affairs of the Company and, to the extent necessary to discharge theresponsibilities assigned to Employee hereunder, to use Employee’s reasonablebest efforts to perform faithfully, effectively and efficiently suchresponsibilities.  During the EmploymentPeriod it shall not be a violation of this Agreement for Employee to (A) serveon corporate, civic or charitable boards or committees, (B) deliverlectures or fulfill speaking engagements and (C) manage personalinvestments, so long as such activities do not materially interfere with theperformance of Employee’s responsibilities as an employee of the Company inaccordance with this Agreement.

 

(b)                                 Compensation.

 

(i)                                     BaseSalary.  During the EmploymentPeriod, Employee shall receive a minimum annual base salary per calendar yearof two hundred thousand dollars ($200,000) (“Annual Base Salary”), whichshall be paid in accordance with the customary payroll practices of the Companyand shall be prorated for the year ending December 31, 2005 and for anyother partial year of service.  TheCompany may review and adjust upward Employee’s Annual Base Salary.  The term Annual Base Salary as utilized inthis Agreement shall refer to Annual Base Salary as so adjusted.

 

(ii)                                  AnnualBonus.  Employee shall be eligible toreceive an annual bonus (“Annual Bonus”) at the end of each calendaryear during the Employment Period in accordance with the terms set forth on Schedule Ihereto.

 

(iii)                               Incentive,Savings and Retirement Plans.  Duringthe Employment Period, Employee shall be entitled to participate in allincentive, savings and retirement plans, practices, policies and programs ofthe Company applicable generally to other employees of the Company (“Investment Plans”).

 

(iv)                              WelfareBenefit Plans.  During the EmploymentPeriod, Employee and/or Employee’s family or dependents, as the case may be,shall be eligible for participation in the welfare benefit plans, practices,policies and programs (“Welfare Plans”) provided by theCompany (including, without limitation, medical, prescription, dental, vision,short-term disability, long-term disability, salary continuance, employee life,group life, accidental death and travel accident insurance plans and programs)to the extent applicable generally to other employees of the Company.  The Company will pay any required co-pay forhealth insurance for Employee and his family under the Company’s health plan.

 

(v)                                 Expenses.  During the Employment Period, Employee shallbe entitled to receive prompt reimbursement for all reasonable travel,entertainment and other business-related expenses incurred by Employee inaccordance with the policies, practices and procedures of the Company or theBusiness, as applicable.

 

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(vi)                              Vacationand Holidays.  During the EmploymentPeriod, Employee shall be entitled to a minimum of four weeks vacation.

 

**3.****                                      Terminationof Employment.**

 

(a)                                  Deathor Disability.  Employee’s employmentshall terminate automatically upon Employee’s death during the EmploymentPeriod.  If the Disability of Employeehas occurred during the Employment Period (pursuant to the definition ofDisability set forth below), the Company may give to Employee written notice inaccordance with Section 11(b) of its intention to terminateEmployee’s employment.  In such event,Employee’s employment with the Company shall terminate effective on the 30thday after receipt of such notice by Employee (the “Disability Effective Date”), provided**that, within 30 days after such receipt,Employee shall not have returned to full-time performance of Employee’sduties.  For purposes of this Agreement, “Disability”shall mean Employee’s inability to perform his duties and obligations hereunderfor a period of 180 consecutive days due to mental or physical incapacity asdetermined by a physician selected by the Company or its insurers andacceptable to Employee or Employee’s legal representative (such agreement as toacceptability not to be withheld unreasonably).

 

(b)                                 Terminationby the Company for Cause.  TheCompany may terminate the Employee’s employment during the Employment Periodfor Cause.  For purposes of thisAgreement, “Cause” shall mean: (i) the failure of Employee to materiallyperform his obligations and duties hereunder to the satisfaction of theCompany, which failure is not remedied within 45 days after receipt of writtennotice from the Company; (ii) commission by Employee of an act of fraudupon, or willful gross misconduct toward, the Company or any of its affiliates;(iii) a material breach by Employee of Section 6, Section 7or Section 9, which in either case is not remedied within 15business days after receipt of written notice from the Board or the Company; (iv) theconviction of Employee of any felony (or a plea of nolocontendere thereto) or any crimeinvolving moral turpitude; or (v) the failure of Employee to carry out, orcomply with, in any material respect any directive of the Board consistent withthe terms of this Agreement, which is not remedied within 30 business daysafter receipt of written notice from the Board or the Company.  Any written notice from the Board or theCompany pursuant to this Section 3(b) shall specificallyidentify the failure that it deems to constitute Cause.

 

(c)                                  Terminationby Company Without Cause.  TheCompany may terminate Employee’s employment during the Employment Periodwithout Cause beginning on the date that is sixty (60) days after the EffectiveDate.  For purposes of this Agreement, “withoutCause” shall mean a termination by the Company of Employee’s employment duringthe Employment Period for any other reason other than a termination based uponCause, death or Disability.

 

(d)                                 Terminationby the Employee.  Employee’s employmentmay be terminated during the Employment Period by Employee for Good Reason orwithout Good Reason; provided,**however,that Employee agrees not to terminate his employment for Good Reason unless (i) Employeehas given the Company at least 30 days’ prior written notice of his intent toterminate his employment for Good Reason, which notice shall specify the factsand circumstances constituting Good Reason, and (ii) such facts andcircumstances constituting Good Reason have not been remedied within such 30day period.  For purposes of thisAgreement, 

 

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“Good Reason” shall mean any material breach by the Company of anyprovision of this Agreement and shall also include Company (or its successorsand assigns) substantially altering the position, geographic location, orresponsibilities of Employee during the Employment Period.

 

(e)                                  Dateof Termination.  “Date of Termination”means (i) if Employee’s employment is terminated for any reason other thanEmployee’s death, the termination date set forth in the written notice to thateffect given by Employee to the Company or by the Company to Employee, as thecase may be (taking into account any notice or cure period required hereunder),and (ii) if Employee’s employment is terminated by reason of death orDisability, the date of death of Employee or the Disability Effective Date, asthe case may be.

 

**4.****                                      Obligationsof the Company Upon Termination.**

 

(a)                                  TerminationBecause of Death or Disability.  IfEmployee’s employment is terminated by reason of Employee’s death or Disabilityduring the Employment Period, the Company shall pay to Employee or his legalrepresentatives within 20 days after the Date of Termination (except asotherwise noted with respect to paragraphs (v) and (vi) below) (andthe Company shall have no further obligations hereunder with respect toEmployee):

 

(i)                                     Employee’s AnnualBase Salary through the Date of Termination to the extent not theretofore paid;

 

(ii)                                  Any Annual Bonusawarded to Employee prior to the Date of Termination but not yet paid;

 

(iii)                               Any compensationpreviously deferred by Employee (together with any accrued interest andearnings thereon);

 

(iv)                              Any unreimbursed businessexpenses;

 

(v)                                 Any amount arisingfrom Employee’s participation in, or benefits under, any Investment Plans (“AccruedInvestments”), which amounts shall be payable in accordance with the termsand conditions of such Investment Plans; and

 

(vi)                              Any amounts to whichEmployee is entitled from Employee’s participation in, or benefits under, anyWelfare Plan (“Accrued Welfare Benefits”), which amounts shall bepayable in accordance with the terms and conditions of such Welfare Plans, andany amounts owed as a result of accrued vacation, which amounts shall bepayable in accordance with the policies of the Company.

 

(b)                                 Terminationfor Cause; Other than for Good Reason. If Employee’s employment shall be terminated by the Company for Cause orby Employee without Good Reason, the Company shall pay to Employee within 20days after the Date of Termination (except as otherwise noted with respect toparagraphs (v) and (vi) below) (and the Company shall have no furtherobligations hereunder with respect to Employee):

 

(i)                                     Employee’s AnnualBase Salary through the Date of Termination to the extent not theretofore paid;

 

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(ii)                                  Any Annual Bonusawarded to Employee prior to the Date of Termination but not yet paid;

 

(iii)                               Any compensationpreviously deferred by Employee (together with any accrued interest andearnings thereon);

 

(iv)                              Any unreimbursed businessexpenses;

 

(v)                                 Any AccruedInvestments, which amounts shall be payable in accordance with the terms andconditions of such Investment Plans; and

 

(vi)                              Any Accrued WelfareBenefits, which amounts shall be payable in accordance with the terms andconditions of such Welfare Plans, and any amounts owed as a result of accruedvacation, which amounts shall be payable in accordance with the policies of theCompany.

 

(c)                                  Terminationfor Good Reason; Without Cause.  Ifthe Company shall terminate Employee’s employment without Cause or Employeeshall terminate his employment for Good Reason, the Company shall pay toEmployee within 20 days of the Date of Termination (except as otherwise noted withrespect to paragraphs (v) and (vi) below) (and the Company shall haveno further obligations hereunder with respect to Employee):

 

(i)                                     Employee’s AnnualBase Salary through the Date of Termination to the extent not theretofore paid;

 

(ii)                                  Any Annual Bonusawarded to Employee prior to the Date of Termination but not yet paid;

 

(iii)                               Any compensationpreviously deferred by Employee (together with any accrued interest andearnings thereon);

 

(iv)                              Any unreimbursed businessexpenses;

 

(v)                                 Any Accrued Investments,which amounts shall be payable in accordance with the terms and conditions ofsuch Investment Plans;

 

(vi)                              Any Accrued WelfareBenefits, which amounts shall be payable in accordance with the terms andconditions of such Welfare Plans, and any amounts owed as a result of accruedvacation, which amounts shall be payable in accordance with the policies of theCompany; and

 

(vii)                           An amount equal to 1.5 timesthe Employee’s then current Annual Base Salary.

 

**5.****                                      FullSettlement**.  Neither Employee northe Company shall be liable to the other party for any damages in addition tothe amounts payable under Section 4 arising out of thetermination of Employee’s employment prior to the end of the Employment Period;provided*,*

 

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however, that the Company shall be entitled toseek damages for any breach of Section 6, Section 7,or Section 9or for Employee’s criminal misconduct.

 

**6.****                                      ConfidentialInformation.**

 

(a)                                  Employee acknowledgesthat the Company and its affiliates have trade, business and financial secretsand other confidential and proprietary information (collectively, the “Confidential Information”)and that during the course of Employee’s employment with the Company he hasreceived, shall receive or shall contribute to the ConfidentialInformation.  Confidential Informationincludes technical information, processes and compilations of information,records, specifications and information concerning assets, and information regardingmethods of doing business.  As definedherein, Confidential Information shall not include (i) information that ispublicly and generally known to other persons or entities; provided**that, such information has not been madepublicly and generally known by Employee in violation of this Agreement or, tothe knowledge of Employee, by others in violation of comparable agreements, (ii) informationrequired to be disclosed by Employee pursuant to a subpoena or court order, orpursuant to a requirement of a governmental agency or law of the United Statesof America or a state thereof or any governmental or political subdivisionthereof; provided,**however,that Employee shall take all reasonable steps to prohibit disclosure pursuantto clause (ii) above, and (iii) information already known toEmployee without obligation to keep it confidential, or independently developedby Employee without use of Confidential Information of Company or received byEmployee in good faith from a third party lawfully in possession thereofwithout obligation to keep such information confidential.

 

(b)                                 During and followingEmployee’s employment by the Company, Employee agrees (i) to hold suchConfidential Information in confidence and (ii) not to release suchinformation to any person (other than Company employees and other persons towhom the Company has authorized Employee to disclose such information and thenonly to the extent that such Company employees and other persons authorized bythe Company have a need for such knowledge). Employee agrees to use reasonable efforts to give the Company notice ofany and all attempts to compel disclosure of any Confidential Information, insuch a manner so as to provide the Company with written notice at least fivedays before disclosure or within one business day after Employee is informedthat such disclosure is being or shall be compelled, whichever is earlier.  Such written notice shall include adescription of the information to be disclosed, the court, government agency,or other forum through which the disclosure is sought, and the date by whichthe information is to be disclosed, and shall contain a copy of the subpoena,order or other process used to compel disclosure.

 

(c)                                  Employee furtheragrees not to use any Confidential Information for the benefit of any person orentity other than the Company.

 

**7.****                                      IntellectualProperty Rights; Surrender of Materials Upon Termination.**

 

(a)                                  Inconsideration of the Company’s agreement to employ Employee and the receipt byEmployee of the Confidential Information, Employee hereby assigns to theCompany all his right, title and interest in all Intellectual Property (asdefined below) that Employee makes or conceives, whether as a sole inventor or authoror as a joint inventor or

 

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author, whether made within or outsideworking hours or upon the premises of the Company or elsewhere, as work forhire or otherwise, at any time during his employment with the Company or itsaffiliates (including prior to the Effective Date).  “Intellectual Property” means anyinformation of a technical and/or business nature such as ideas, discoveries,inventions, trade secrets, know-how, and writings and other works of authorshipthat relate directly in any manner to the actual or anticipated business orresearch and development of the Company and its affiliates.  During and subsequent to Employee’semployment, upon the request and at the expense of the Company or its nomineeand for no additional personal remuneration, Employee agrees to execute anyinstrument that the Company considers necessary to secure or maintain for thebenefit of the Company adequate patent, copyright, trademark and other propertyrights in the United States and all foreign countries with respect to anyIntellectual Property.  Employee also agreesto assist the Company as required to draft said instruments and to obtain andenforce such rights.  Employee agrees topromptly disclose to the Company any Intellectual Property when conceived ormade by Employee, in whole or in part, and to make and maintain adequate andcurrent records thereof.

 

(b)                                 Employeeagrees that all Confidential Information and other files, documents, materials,records, customer lists, business proposals, contracts, agreements and otherrepositories containing information concerning the Company or the business ofthe Company, in whatever form, tangible or intangible (including all copiesthereof), that Employee shall prepare, or use, or be provided with as a resultof his employment with the Company, shall be and remain the sole property ofthe Company.  Upon termination ofEmployee’s employment hereunder, Employee agrees that all ConfidentialInformation and other files, documents, materials, records, customer lists,business proposals, contracts, agreements and other repositories containinginformation concerning the Company or the business of the Company (includingall copies thereof) in Employee’s possession, custody or control, whetherprepared by Employee or others, shall remain with or be returned to the Companypromptly (within 24 hours) after the Date of Termination.  The materials required to be returnedpursuant to this Section 7shall not include personal correspondence that does not relate to the Companyor the business of the Company.

 

**8.****                                      Successors.**

 

(a)                                  This Agreement ispersonal to Employee and without the prior written consent of the Company shallnot be assignable by Employee otherwise than by will or the laws of descent anddistribution.  This Agreement shall inureto the benefit of and be enforceable by Employee’s legal representatives.

 

(b)                                 This Agreement shallinure to the benefit of and be binding upon the Company and its successors andassigns.  Employee agrees that theCompany may assign this Agreement to any directly or indirectly ownedsubsidiary or affiliate (affiliate shall have the same meaning as in the StockPurchase Agreement) of the Company, in which event “Company” as used in this Agreementshall thereafter mean such subsidiary or affiliate (except where reference ismade to benefit plans that are maintained by the Company, in which event theCompany shall remain obligated with respect thereto under this Agreement), andin connection with such assignment, such subsidiary shall expressly assume thisAgreement and the Company shall be released therefrom except to the extentreferenced above.

 

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(c)                                  The Company willrequire any successor (whether direct or indirect, by purchase, merger,consolidation or otherwise) to all or substantially all of the business and/orassets of the Company to assume expressly and agree to perform this Agreementin the same manner and to the same extent that the Company would be required toperform it if no such succession had taken place.  As used in this Agreement, “Company”shall mean the Company as hereinbefore defined and any successor to itsbusiness and/or assets as aforesaid which assumes and agrees to perform thisAgreement by operation of law, or otherwise.

 

**9.****                                      Non-Competition;Non-Solicitation.**

 

(a)                                  During his employmentby the Company, including the Employment Period, Employee shall have access toand become acquainted with Confidential Information of the Company as describedin Section 6.  Employeeacknowledges and agrees that his use of Confidential Information in the conductof business on behalf of a competitor of the Company would constitute unfaircompetition with the Company and would adversely affect the business goodwillof the Company.  Accordingly, as amaterial inducement to the Company to enter into this Agreement; to protect theCompany’s Confidential Information that may be disclosed or entrusted toEmployee (the disclosure of which by Employee in violation of this Agreementwould adversely affect the business goodwill of the Company), the business goodwillof the Company that may be developed in Employee and the business opportunitiesthat may be disclosed or entrusted to Employee by the Company; in considerationfor the compensation and other benefits payable hereunder to Employee, for thebenefits to Employee of having access to Confidential Information during theEmployment Period (the disclosure of which by Employee in violation of thisAgreement would adversely affect the business goodwill of the Company); and forother good and valuable consideration, Employee hereby covenants and agreesthat, during the Term of Non-Competition, Employee shall not, directly orindirectly, individually or as an officer, director, manager, employee,shareholder, consultant, contractor, partner, member, joint venturer, agent,equity owner or in any capacity whatsoever:

 

(i)                                     own, engage in,manage, operate, join, control, be employed by, provide Competing Services to,or participate in the ownership, management, operation or control of orprovision of Competing Services to, a Competing Business operating in theGeographic Area;

 

(ii)                                  recruit, hire, assistin hiring, attempt to hire, or contact or solicit with respect to hiring anyperson who, at any time during the 12 month period ending on the Date ofTermination, was an employee of the Company or its affiliates;

 

(iii)                               induce or attempt toinduce any employee of the Company or its affiliates to terminate, or in anyway interfere with, the relationship between such parties and any employeethereof; or

 

(iv)                              induce or attempt toinduce any customer, client, supplier, service provider, or other businessrelation of the Company or its affiliates in the Geographic Area to cease doingbusiness with such parties, or in any way interfere with the relationshipbetween such parties and any such person.

 

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Notwithstanding the foregoing,the Company agrees that Employee may own less than five percent of theoutstanding voting securities of any publicly traded company that is a CompetingBusiness so long as Employee does not otherwise participate in such competingbusiness in any way prohibited by this Section 9.

 

(b)                                 Employee acknowledgesthat the geographic boundaries, scope of prohibited activities, and timeduration of the preceding paragraphs in this Section 9 (includingthe defined terms for “Competing Business,” “Competing Services,”“Geographic Area,” and “Term of Non-Competition” set forth in Section 9(c))are reasonable in nature and are no broader than are necessary to maintain thegoodwill of the Company and the confidentiality of its Confidential Informationand to protect the goodwill and other legitimate business interests of theCompany, and also that the enforcement of such covenants would not causeEmployee any undue hardship or unreasonably interfere with Employee’s abilityto earn a livelihood.  If Employeeviolates the covenants and restrictions in this Section 9 and theCompany brings legal action for injunctive or other equitable relief, Employeeagrees that the Company shall not be deprived of the benefit of the full periodof the restrictive covenant, as a result of the time involved in obtaining suchrelief.  Accordingly, Employee agreesthat the provisions in this Section 9 shall have a durationdetermined pursuant to Section 9(a), computed from the date thelegal or equitable relief is granted.

 

(c)                                  As used in thisAgreement:

 

(i)                                     “CompetingBusiness” means any service or product of any person or organization otherthan the Company or its affiliates in existence or then under development, thatcompetes or could potentially compete, directly or indirectly, with any serviceor product of the Company or its affiliates.

 

(ii)                                  “CompetingServices” means services that, if provided to a business other than aCompeting Business, would constitute the conduct of a Competing Business.

 

(iii)                               “Geographic Area”means the United States.

 

(iv)                              “Term ofNon-Competition” means the period of time beginning on the date hereof andcontinuing until (A) if this Agreement is terminated during the EmploymentPeriod by either the Company for Cause or Employee without Good Reason, twoyears after the Date of Termination, (B) if this Agreement is terminatedduring the Employment Period by either the Company without Cause or Employeefor Good Reason, one year after the Date of Termination, or (C) if theEmployment Period expires by reason of a Non-Renewal Notice, one year****after the last day of the EmploymentPeriod.

 

(d)                                 If any court orarbitrator determines that any portion of this Section 9 is invalidor unenforceable, the remainder of this Section 9 shall not therebybe affected and shall be given full effect without regard to the invalid orunenforceable provisions.  If any courtor arbitrator construes any of the provisions of this Section 9 tobe invalid or unenforceable because of the duration or scope of such provision,such court or arbitrator shall be required to reduce the 

 

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duration or scope of such provision, to the minimum extent necessary soas to be enforceable, and to enforce such provision as so reduced.

 

**10.****                               Non-Disparagement**.  Employee agrees to refrain from engaging inany conduct, or making any comments or statements, during the Employment Periodand thereafter, that have the purpose or effect of harming the reputation orgoodwill of the Company or its affiliates.

 

**11.****                               Miscellaneous.**

 

(a)                                  Construction.  This Agreement shall be governed by andconstrued in accordance with the laws of the State of California withoutreference to principles of conflict of laws. The captions of this Agreement are not part of the provisions hereof andshall have no force or effect.  Wheneverthe terms “hereof”, “hereby”, “herein”, or words of similar import are used inthis Agreement they shall be construed as referring to this Agreement in itsentirety rather than to a particular section or provision, unless thecontext specifically indicates to the contrary. Any reference to a particular “Section” or “paragraph” shall beconstrued as referring to the indicated section or paragraph of thisAgreement unless the context indicates to the contrary.  The use of the term “including” herein shallbe construed as meaning “including without limitation.”  This Agreement may not be amended or modifiedotherwise than by a written agreement executed by the parties hereto or theirrespective successors and legal representatives.

 

(b)                                 Notices.  All notices and other communicationshereunder shall be in writing and shall be given by hand delivery to the otherparty or by registered or certified mail, return receipt requested, postageprepaid, addressed as follows:

 
| If to  Employee:    |   | 44 Mirabel Avenue                 |
|---------------------|--------|-----------------------------------|
|                |   | Mill Valley, CA 94941             |
|                |   |                              |
| If to the  Company: |   | Lyris Technologies, Inc.     |
|                |   | 20709 Allston Way, Suite 200 |
|                |   | Berkeley, CA 94704                |
|                |   |                              |
| With a copy to:     |   | Vinson & Elkins L.L.P.   |
|                |   | 3700 Trammell Crow Center         |
|                |   | 2001 Ross Avenue                  |
|                |   | Dallas, Texas 75201               |
|                |   | Attention: Michael D. Wortley     |

 

or to such other address as either partyshall have furnished to the other in writing in accordance herewith.  Notice and communications shall be effectivewhen actually received by the addressee.

 

(c)                                  Severability.  If any provision of this Agreement is held tobe illegal, invalid or unenforceable under present or future laws effectiveduring the term of this Agreement, such provision shall be fully severable;this Agreement shall be construed and enforced as if such illegal, invalid orunenforceable provision had never comprised a portion of 

 

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this Agreement; and the remaining provisions of this Agreement shallremain in full force and effect and shall not be affected by the illegal,invalid or unenforceable provision or by its severance from thisAgreement.  Furthermore, in lieu of suchillegal, invalid or unenforceable provision there shall be added automaticallyas part of this Agreement a provision as similar in terms to such illegal,invalid or unenforceable provision as may be possible and be legal, valid andenforceable.

 

(d)                                 Withholding.  The Company may withhold from any amountspayable under this Agreement such Federal, state or local taxes as shall berequired to be withheld pursuant to any applicable law or regulation.

 

(e)                                  NoWaiver.  Employee’s or the Company’sfailure to insist upon strict compliance with any provision of this Agreementor the failure to assert any right Employee or the Company may have hereunder,including, without limitation, the right of Employee to terminate employmentfor Good Reason, shall not be deemed to be a waiver of such provision or rightor any other provision or right of this Agreement.

 

(f)                                    Equitableand Other Relief.  Employeeacknowledges that money damages would be both incalculable and an insufficientremedy for a breach of Section 6, Section 7,Section 9 or Section 10by Employee and that any such breach would cause the Company irreparableharm.  Accordingly, the Company, inaddition to any other remedies at law or in equity it may have, shall beentitled, without the requirement of posting of bond or other security, toequitable relief, including injunctive relief and specific performance, inconnection with a breach of Section 6, Section 7,Section 9 or Section 10by Employee.

 

(g)                                 EntireAgreement.  The provisions of thisAgreement constitute the complete understanding and agreement between theparties with respect to the subject matter hereof, and supersede all prior andcontemporaneous oral and written agreements, representations and understandingsof the parties, which are hereby terminated. Employee and the Company acknowledge and represent that there are noother promises, terms, conditions or representations (oral or written)regarding any matter relevant hereto.

 

(h)                                 Counterparts.  This Agreement may be executed in two or morecounterparts.

 

(i)                                     Arbitration.

 

(i)                                     In the event anydispute or controversy arises under this Agreement and is not resolved bymutual written agreement between Employee and the Company within 30 days afternotice of the dispute is first given, then Employee and the Company willmutually select an arbitrator and submit such dispute or controversy toarbitration by such arbitrator; provided, however, if the Companyand Employee have not mutually selected an arbitrator within 90 days afternotice of the dispute is first given, or if Employee and the Company decide atany earlier date not to mutually select an arbitrator, then, upon the writtenrequest of Employee or the Company, such dispute or controversy shall besubmitted to arbitration by an arbitrator to be selected by the AmericanArbitration Association (“AAA”). The arbitration will be conducted in accordance with the Rules forResolution of Employment 

 

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Disputes of the AAA.  Judgment may be entered thereon and the resultsof the arbitration will be binding and conclusive on the parties hereto.  Any arbitrator’s award or finding or anyjudgment or verdict thereon will be final and unappealable.  All parties agree that venue for arbitrationwill be in San Francisco County, California, or such other place as may beagreed upon in writing at the time by the parties and that any arbitrationcommenced in any other venue will be transferred to San Francisco County,California, upon the written request of any party to this Agreement.  All arbitrations will have one individualacting as arbitrator.  Any arbitratorselected will not be affiliated, associated or related to either Employee ofthe Company in any matter whatsoever. The decision of the arbitrator will be binding on all parties.  The prevailing party in the arbitration (asdetermined by the arbitrator) shall be reimbursed, by the other party, itsreasonable attorneys fees, costs and other expenses pertaining to any sucharbitration and enforcement.

 

(ii)                                  THE ARBITRATOR SHALLHAVE NO AUTHORITY TO AWARD PUNITIVE DAMAGES UNDER ANY CIRCUMSTANCES (WHETHER ITBE EXEMPLARY DAMAGES, TREBLE DAMAGES, OR ANY OTHER PENALTY OR PUNITIVE TYPE OFDAMAGES).  REGARDLESS OF WHETHER SUCHDAMAGES MAY BE AVAILABLE UNDER CALIFORNIA LAW, EMPLOYEE AND THE COMPANYEACH HEREBY WAIVE THE RIGHT, IF ANY, TO RECOVER PUNITIVE DAMAGES IN CONNECTIONWITH ANY CLAIMS.  EMPLOYEE AND THECOMPANY ACKNOWLEDGE THAT BY SIGNING THIS AGREEMENT EMPLOYEE AND THE COMPANY AREWAIVING ANY RIGHT THAT EMPLOYEE OR THE COMPANY MAY HAVE TO A JURY TRIAL.

 

(j)            Survival.  Sections 4, 5, 6, 7,8, 9, and 10 of this Agreement shall survive thetermination of Employee’s employment.

 

(k)                                  Amendments.  This Agreement may not be amended or modifiedat any time except by a written instrument executed by the Company andEmployee.

 

(l)                                     Effectiveness.  If the Effective Date has not occurred by May 25,2005, this Agreement shall be null and void and of no force or effect.

 

(m)                               EmployeeAcknowledgment.  Employeeacknowledges that he has read and understands this Agreement, is fully aware ofits legal effect, has not acted in reliance upon any representations orpromises made by the Company other than those contained in writing herein, andhas entered into this Agreement freely based on his own judgment.

 

[SIGNATURE PAGE FOLLOWS]

 

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IN WITNESSWHEREOF, Employee has hereunto set Employee’s hand and the Company has causedthis Agreement to be executed in its name on its behalf, all as of the day andyear first above written.

 
|   | EMPLOYEE:                    |
|--------|------------------------------|
|   |                         |
|   |                         |
|   | /s/ Luis Rivera              |   |
|   |                         |
|   |                         |
|   | COMPANY:                     |
|   |                         |
|   | **LYRIS TECHNOLOGIES, INC.** |
|   |                         |   |
|   |                         |   |
|   | By:                          | /s/ David R. Burt |   |
|   | Name:                        | David R. Burt |
|   | Title:                       |   |
|        |                              |  |  |  |

 

 

[SIGNATURE PAGE TO EMPLOYMENT AGREEMENT]

 

13

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**SCHEDULE I**

 

**Annual Bonus**

 

1.               ProfitSharing Bonus

 

Company shall pay to Employee abonus based on the profitability of the Company as set forth below:

 

•                  Bonus will bepaid quarterly within 30 days after the end of each fiscal quarter for theCompany.

 

•                  Bonus will bebased on Company accomplishing its “Profit Target” for such quarter.

 

Profit Targetfor the quarter ended June 30, 2005 shall be $1,250,000.00.

 

Profit Targetfor the quarter ended September 30, 2005 shall be $1,500,000.00.

 

Profit Targetfor the quarter ended December 31, 2005 shall be $1,500,000.00.

 

Profit Targetfor the quarter ended March 31, 2006 shall be $1,750,000.00.

 

If Company accomplishes itsProfit Target for a quarter, Employee shall be entitled to a bonus equal to$62,500 for the June 30, 2005 quarter, bonus equal to $62,500 for the September 30,2005 quarter, bonus equal to $62,500 for the December 31, 2005 quarter andbonus equal to $62,500 for the March 31, 2006 quarter.

 

If the Company does notaccomplish its Profit Target in a quarter but exceeds its Profit Target in asubsequent quarter, the Profit Sharing Bonus can be increased pro rata by anamount sufficient to make up for a shortfall in a prior quarter.  For the four quarters ended March 31,2006, if the Profit Target equals $6,000,000 the full Profit Sharing Bonus of$250,000 will be paid.

 

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