**Exhibit 10(t)**

 

**EMPLOYMENT AGREEMENT**

 

THISEMPLOYMENT AGREEMENT (the “Agreement”) is made and entered into as ofMay 6, 2005, by and between Lyris Technologies, Inc., a Delaware corporation(together with its successors and assigns permitted hereunder, the “Company”),and Jason Han (“Employee”).

 

**RECITALS**

 

WHEREAS,Employee is currently employed by the Company, which develops software andservices for e-mail marketing and publishing, e-mail filtering and spamprevention (the “Business”);

 

WHEREAS,the Company is, concurrently with the execution hereof, entering into (or haspreviously entered into) a Stock Purchase Agreement with Commodore Resources,Inc. and the other parties thereto (the “Stock Purchase Agreement”); and

 

WHEREAS,Employee and 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, in consideration of the premises and the mutual covenants andagreements contained herein, the sufficiency of which is hereby acknowledged,the parties agree as follows:

 

**AGREEMENTS:**

 

**1.****                                     ****Employment Period****.**Subject to Section 3 or mutual writtenagreement between the Company and Employee, the Company hereby agrees to employEmployee, and Employee hereby agrees to be employed by the Company, inaccordance with the terms and provisions of this Agreement, for the periodcommencing as of the Effective Date and ending on the Fifth (5th)anniversary 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 tothe other party that it or he does not wish to extend this Agreement (a “Non-RenewalNotice”). The term “Employment Period,” as utilized in thisAgreement, shall refer to the Employment Period as so automatically extended.

 

**2.****                                     ****Terms of Employment****.**

 

(a)                                  Position and Duties.

 

(i)                                     During the Employment Period, Employee shallserve as Director of Sales Operations of the Company and, in so doing, shallreport to the President and Chief Executive Officer. Employee agrees to performwhatever duties the Board may assign to Employee from time to time, consistentwith Employee’s position with the Company. Employee shall have supervision andcontrol over, and responsibility for, such management and operational

 

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functionsof the Company as are usual and customary for such position, and shall havesuch other powers and duties as may from time to time be prescribed by thePresident and Chief Executive Officer.

 

(ii)                                  During the Employment Period, and excludingany periods of vacation and sick leave to which Employee is entitled, Employeeagrees to devote all of his business time to the business and affairs of theCompany and, to the extent necessary to discharge the responsibilities assignedto Employee hereunder, to use Employee’s reasonable best efforts to performfaithfully, effectively and efficiently such responsibilities. 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) deliver lectures orfulfill speaking engagements and (C) manage personal investments, so long assuch activities do not materially interfere with the performance of Employee’sresponsibilities as an employee of the Company in accordance with thisAgreement.

 

(b)                                 Compensation.

 

(i)                                     Base Salary. During the Employment Period, Employee shall receive an annual basesalary per calendar year of Seventy Thousand dollars ($70,000) (“Annual BaseSalary”), which shall be paid in accordance with the customary payrollpractices of the Company and shall be prorated for the year ending December 31,2005 and for any other partial year of service. The Company may review andadjust Employee’s Annual Base Salary. The term Annual Base Salary as utilizedin this Agreement shall refer to Annual Base Salary as so adjusted.

 

(ii)                                  Annual Bonus. Employee shall be eligible to receive anannual bonus (“Annual Bonus”) at the end of each calendar year duringthe Employment Period in accordance with the terms set forth on Schedule Ihereto. Employee is also eligible for sales commissions as set forth inSchedule I.

 

(iii)                               Incentive, Savings and Retirement Plans. During the Employment Period, Employeeshall be entitled to participate in all incentive, savings and retirementplans, practices, policies and programs of the Company applicable generally toother employees of the Company (“Investment Plans”).

 

(iv)                              Welfare Benefit Plans. During the Employment Period, Employeeand/or Employee’s family or dependents, as the case may be, shall be eligiblefor participation in the welfare benefit plans, practices, policies andprograms (“Welfare Plans”) provided by the Company (including, withoutlimitation, medical, prescription, dental, vision, short-term disability,long-tem disability, salary continuance, employee life, group life, accidentaldeath and travel accident insurance plans and programs) to the extentapplicable generally to other employees of the Company.

 

(v)                                 Expenses. During the Employment Period, Employee shall be entitled to receiveprompt reimbursement for all reasonable travel, entertainment and otherbusiness-related expenses incurred by Employee in accordance with the policies,practices and procedures of the Company or the Business, as applicable.

 

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(vi)                              Vacationand Holidays.  During the EmploymentPeriod, Employee Period, Employee shall be entitled to vacation and holidays inaccordance with the policies of the Company

 

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

 

(a)                                  Deathor Disability.  Employee’s employmentshall terminate automatically upon Employee’s death during the EmploymentPeriod. If the Disability of Employee has occurred during the Employment Period(pursuant to the definition of Disability set forth below), the Company waygive to Employee written notice in accordance with Section 11(b) of itsintention to terminate Employee’s employment. In such event, Employee’semployment with the Company shall terminate effective on the 30th day afterreceipt of such notice by Employee (the “Disability Effective Date”),provided that, within 30 days after such receipt, Employee shall not havereturned to full-time performance of Employee’s duties. For purposes of thisAgreement “Disability” shall mean Employee’s inability to perform hisduties and obligations hereunder for a period of 180 consecutive days due tomental or physical incapacity as determined by a physician selected by theCompany or its insurers and acceptable to Employee or Employee’s legalrepresentative (such agreement as to acceptability not to be withheldunreasonably).

 

(b)                                 Terminationby the Company for Cause.  TheCompany may terminate the Employee’s employment during the Employment Periodfor Cause. For purposes of this Agreement, “Cause” shall mean: (1) the failureof Employee to perform his obligations and duties hereunder to the satisfactionof the Company, which failure is not remedied within 15 days after receipt ofwritten notice from the Company; (ii) commission by Employee of an act of fraudupon, or willful misconduct toward, the Company or any of its affiliates; (iii)a material breach by Employee of Section 6, Section 7 or Section9, which in either case is not remedied within 15 days after receipt ofwritten notice from the Board or the Company; (iv) the conviction of Employeeof 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 15 days after receiptof written notice from the Board or the Company. Any written notice from theBoard or the Company 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, “without Cause” shall mean a terminationby the Company of Employee’s employment during the Employment Period for any otherreason other than a termination based upon Cause, death or Disability.

 

(d)                                 Terminationby the Employee.  Employee’semployment may be terminated during the Employment Period by Employee for GoodReason or without Good Reason; provided, however, that Employeeagrees not to terminate his employment of Good Reason unless (i) Employee hasgiven the Company at lease 30 day’s prior written notice of his intent toterminate his employment for Good Reason, which notice shall specify the factsand circumstances constituting Good

 

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Reason, and (ii) such facts and circumstances constituting Good Reasonhave not been remedied within such 30 day period. For purposes of thisAgreement, “Good Reason” shall mean any material breach by the Company of anyprovision of this Agreement.

 

(e)                                  Dateof Termination.  “Date ofTermination” means (i) if Employee’s employment is terminated for anyreason other than Employee’s death, the termination date set forth in thewritten notice to that effect given by Employee to the Company or by theCompany to Employee, as the case may be (taking into account any notice or cureperiod required hereunder). and (ii) if Employee’s employment is terminated byreason of death or Disability, the date of death of Employee or the DisabilityEffective Date, as the case may be.

 

**4.****                                      Obligationof 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) (and the Companyshall have no further obligations hereunder with respect to Employee);

 

(i)                                     Employee’sAnnual Base Salary through the Date of Termination to the extent nottheretofore paid.

 

(ii)                                  AnyAnnual Bonus awarded to Employee prior to the Date of Termination but not yetpaid;

 

(iii)                               Anycompensation previously deferred by Employee (together with any accruedinterest and earnings thereon);

 

(iv)                              Anyunreimbursed business expenses;

 

(v)                                 Anyamount arising from arising from Employee’s participation in, or benefits underany investment Plans (“Accrued Investments”), which amounts shall bepayable in accordance with the terms and conditions of such Investment Plans;and

 

(vi)                              Anyamounts to which Employee is entitled from Employee’s participation in, orbenefits under, any Welfare Plan (“Accrued Welfare Benefits”), whichamounts shall be payable in accordance with the terms and conditions of suchWelfare Plans, and any amounts owed as a result of accrued vacation, whichamounts shall be payable 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 orEmployee without Good Reason, the Company shall pay to Employee within 20 daysafter 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’sAnnual Base Salary through the Date of Termination to the extent not thereforepaid;

 

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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 unreimbursedbusiness expenses;

 

(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 accuredvacation, which amounts shall be payable in accordance with the policies of theCompany.

 

(c)                                  Terminationfor Good Reason; Without Cause.  Ifthe Company shall terminate Employee’s employement 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 notedwith respect to paragraphs (v) and (vi) below (and the Company shall have nofurther obligations hereunder with respect to Employee):

 

(i)                                     Employee’sAnnual Base Salary through the Date of Termination to the extent nottheretofore paid;

 

(ii)                                  AnyAnnual Bonus awarded to Employee prior to the Date of Termination but not yetpaid;

 

(iii)                               Anycompensation previously deferred by Employee (together with any accruedinterest and earnings thereon);

 

(iv)                              Anyunreimbursed business expenses;

 

(v)                                 AnyAccrued Welfare Benefits, which amounts shall be payable in accordance with theterms and conditions of such Welfare Plans, and any amounts owed as a result ofaccrued vacation, which amounts shall be payable in accordance with thepolicies of the Company; and

 

(vii)                           Anamount equal to one year of the employee’s salary.

 

**5.****                                      FullSettlement.**Neither Employee nor the Company shall be liable to theother party for any damages in addition to the amounts payable under Section4 arising out of the termination of Employee’s employement prior to the endof the Employment Period; provided, however, that the Company shall beentitled to seek damages for any breach of Section 6, Section 7,or Section 9 or for Employee’s criminal misconduct.

 

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**6.****                                      Confidentialinformation.**

 

(a)                                  Employeeacknowledges that the Company and its affiliates have trade, business andfinancial secrets and other confidential and proprietary information(collectively, the “Confidential Information”) and that during thecourse of Employee’s employment with the Company he has received, shall receiveor shall contribute to the Confidential Information. Confidential Informationincludes technical information, processes and compilations of information,records, specifications and information concerning assets, and informationregarding methods of doing business. As defined herein, ConfidentialInformation shall not include (i) information that is publicly and generallyknown to other persons or entities who can obtain economic value from itsdisclosure or use; 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, and(ii) information required to be disclosed by Employee pursuant to a subpoena orcourt order, or pursuant to a requirement of a governmental agency or law ofthe United States of America or a state thereof or any governmental orpolitical subdivision thereof; provided, however, that Employee shalltake all reasonable steps to prohibit disclosure pursuant to clause (ii)above.

 

(b)                                 Duringand following Employee’s employment by the Company, Employee agrees (i) to holdsuch Confidential 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 reasonableefforts to give the Company notice of any and all attempts to compel disclosureof any Confidential Information, in such a manner so as to provide the Companywith written notice at least five days before disclosure or within one businessday after Employee is informed that such disclosure is being or shall becompelled, 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)                                  Employeefurther agrees not to use any Confidential Information for the benefit of anyperson or entity 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 orauthor or as a joint inventor or author whether made within or outside workinghours or upon the premises of the Company or elsewhere, as work for hire orotherwise, at any time during his employment with the Company or its affiliates(including prior to the Effective Date). “Intellectual Property” meansany information of a technical and or business nature such as ideas,discoveries, inventions, trade secrets, know-how, and writings and other worksof authorship that relate in any manner to the actual or anticipated businessor research and development of the Company and its affiliates.

 

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During and subsequent to Employee’s employment, upon the request and atthe expense of the Company or its nominee and for no additional personalremuneration, Employee agrees to execute any instrument that the Companyconsiders necessary to secure or maintain for the benefit of the Companyadequate patent, copyright, trademark and other property rights in the UnitedStates and all foreign countries with respect to any Intellectual Property.Employee also agrees to assist the Company as required to draft saidinstruments and to obtain and enforce such rights. Employee agrees to promptlydisclose to the Company and Intellectual Property when conceived or made byEmployee, in whole or in part, and to make and maintain adequate and currentrecords thereof.

 

(b)                                 Employeeagrees that all Confidential Information and other files, documents, materials,records, customer lists, business proposals, contracts, agreements and otherrepositories containing information concerting 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 of Employee’s employment hereunder, 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 (including all copies thereof) in Employee’s possession, custody orcontrol, whether prepared by Employee or others, shall remain with or bereturned to the Company promptly (within 24 hours) after the Date ofTermination. The materials required to be returned pursuant to this Section7 shall not include personal correspondence that does not relate to theCompany or the business of the Company.

 

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

 

(a)                                  ThisAgreement is personal to Employee and without the prior written consent of theCompany shall not be assignable by Employee otherwise than by will or the lawsof descent and distribution. This Agreement shall inure to the benefit of andbe enforceable by Employee’s legal representatives.

 

(b)                                 ThisAgreement shall inure to the benefit of and be binding upon the Company and itssuccessors and assigns. Employee agrees that the Company may assign thisAgreement to any directly or indirectly owned subsidiary or affiliate of theCompany, in which event “Company” as used in this Agreement shallthereafter mean such subsidiary or affiliate (except where reference is made tobenefit plans that are maintained by the Company, in which event the Company shallremain obligated with respect thereto under this Agreement), and in connectionwith such assignment, such subsidiary shall expressly assume this Agreement andthe Company shall be released therefrom except to the extent referenced above.

 

(c)                                  TheCompany will require any successor (whether direct or indirect, by purchase,merger, consolidation or otherwise) to all or substantially all of the businessand/or assets of the Company to assume expressly and agree to perform thisAgreement in the same manner and to the same extent that the Company would berequired to perform it if no such succession had taken place. As used in thisAgreement, “Company” shall mean the Company as

 

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hereinbefore defined and any successor to its business and/or assets asaforesaid which assumes and agrees to perform this Agreement by operation oflaw, or otherwise.

 

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

 

(a)                                  Duringhis employment by the Company, including the Employment Period, Employee shallhave access to and become acquainted with Confidential Information of theCompany as described in Section 6. Employee acknowledges and agrees thathis use of Confidential Information in the conduct of business on behalf of acompetitor of the Company would constitute unfair competition with the Companyand would adversely affect the business goodwill of the Company. Accordingly,as a material inducement to the Company to enter into this Agreement; toprotect the Company’s Confidential Information that may be disclosed orentrusted to Employee (the disclosure of which by Employee in violation of thisAgreement would adversely affect the business goodwill of the Company), thebusiness goodwill of the Company that may be developed in Employee and thebusiness opportunities that may be disclosed or entrusted to Employee by theCompany; in consideration for the compensation and other benefits payablehereunder to Employee, for the benefits to Employee of having access toConfidential Information during the Employment Period (the disclosure of whichby Employee in violation of this Agreement would adversely affect the businessgoodwill of the Company); and for other good and valuable consideration,Employee hereby covenants and agrees that, during the Term of Non-Competition,Employee shall not, directly or indirectly, 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 CompetingServices to, or participate in the ownership, management, operation or controlof or provision of Competing Services to, a Competing Business operating in theGeographic Area;

 

(ii)                                  recruit,hire, assist in hiring, attempt to hire, or contact or solicit with respect tohiring any person who, at any time during the 12 month period ending on theDate of Termination, was an employee of the Company or its affiliates;

 

(iii)                               induceor attempt to induce any employee of the Company or its affiliates toterminate, or in any way interfere with, the relationship between such partiesand any employee thereof; or

 

(iv)                              induceor attempt to induce any customer, client, supplier, service provider, or otherbusiness relation of the Company or its affiliates in the Geographic Area tocease doing business with such parties, or in any way interfere with therelationship between such parties and any such person.

 

Notwithstanding the foregoing, the Company agrees that Employee may ownless than five percent of the outstanding voting securities of any publiclytraded company that is a Competing Business so long as Employee does nototherwise participate in such competing business in any way prohibited by this Section9.

 

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(b)                                 Employeeacknowledges that the geographic boundaries, scope of prohibited activities,and time duration of the preceding paragraphs in this Section 9(including the defined terms for “Competing Business,” “CompetingServices,” “Geographic Area,” and “Term of Non-Competition”set forth in Section 9(c)) are reasonable in nature and are no broaderthan are necessary to maintain the goodwill of the Company and theconfidentiality of its Confidential Information and to protect the goodwill andother legitimate business interests of the Company, and also that theenforcement of such covenants would not cause Employee any undue hardship orunreasonably interfere with Employee’s ability to earn a livelihood. IfEmployee violates the covenants and restrictions in this Section 9 andthe Company brings legal action for injunctive or other equitable relief,Employee agrees that the Company shall not be deprived of the benefit of thefull period of the restrictive covenant, as a result of the time involved inobtaining such relief. Accordingly, Employee agrees that the provisions in thisSection 9 shall have a duration determined pursuant to Section 9(a),computed from the date the legal or equitable relief is granted.

 

(c)                                  Asused in this Agreement:

 

(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. Competing Business includes, butis not limited to, any enterprise engaged in the development or marketing ofsoftware and services for e-mail marketing and publishing, e-mail filtering andspam prevention.

 

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

 

(iii)                               “GeographicArea” means the United States.

 

(iv)                              “Termof Non-Competition” means the period of time beginning on the date hereofand continuing until (A) if his 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 terminated duringthe Employment Period by either the Company without Cause or Employee for GoodReason, one year after the Date of Termination, or (C) if the Employment Periodexpires by reason of a Non-Renewal Notice, one year after the last day of theEmployment period.

 

(d)                                 Ifany court or arbitrator determines that any portion of this Section 9 isinvalid or unenforceable, the remainder of this Section 9 shall notthereby be affected and shall be given full effect without regard to theinvalid or unenforceable provisions. If any court or arbitrator construes anyof the provisions of this Section 9 to be invalid or unenforceablebecause of the duration or scope of such provision, such court or arbitratorshall be required to reduce the duration or scope of such provision, to theminimum extent necessary so as to be enforceable, and to enforce suchprovisions as so reduced.

 

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**10.****                               Non-Disparagement.**Employee agrees to refrain from engaging in any conduct, or making anycomments or statements, during the Employment Period and thereafter, that havethe purpose or effect of harming the reputation or goodwill of the Company orits affiliates.

 

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

 

(a)                                  Construction.This Agreement shall be governed by and construed in accordance with the lawsof the State of Delaware without reference to principles of conflict of laws.The captions of this Agreement are not part of the provisions hereof and shallhave no force or effect. Whenever the terms “hereof”, “hereby”, “herein”, orwords of similar import are used in this Agreement they shall be construed asreferring to this Agreement in its entirety rather than to a particular sectionor provision, unless the context specifically indicates to the contrary. Anyreference to a particular “Section” or “paragraph” shall be construed asreferring to the indicated section or paragraph of this Agreement unless thecontext indicates to the contrary. The use of the term “including” herein shallbe construed as meaning “including without limitation.” This Agreement may notbe amended or modified otherwise than by a written agreement executed by theparties hereto or their respective successors and legal representatives.

 

(b)                                 Notices.All notices and other communications hereunder shall be in writing and shall begiven by band delivery to the other party or by registered or certified mail,return receipt requested, postage prepaid, addressed as follows:

 
| If to Employee:    | Jasen Han                     |   |
|--------------------|-------------------------------|--------|
|               | 42 Homeylen Lane              |   |
|               | Oakland, CA 94611             |   |
|               |                          |
| If to the Company: | Lyris Technologies, Inc.      |   |
|               | 2070 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 party shall have furnished to theother in writing in accordance herewith. Notice and communications shall beeffective when actually received by the addressee.

 

(c)                                  Severability.If any provision of this Agreement is held to be illegal, invalid orunenforceable under present or future laws effective during the term of thisAgreement, such provision shall be fully severable; this Agreement shall beconstrued and enforced as if such illegal, invalid or unenforceable provisionhad never comprised a portion of this Agreement; and the remaining provisionsof this Agreement shall remain in full force and effect and shall not beaffected by the illegal, invalid or unenforceable provision or by its

 

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severance from this Agreement. Furthermore, in lieu of such illegal,invalid or unenforceable provision there shall be added automatically as partof this Agreement a provision as similar in terms to such illegal, invalid orunenforceable provision as may be possible and be legal, valid and enforceable.

 

(d)                               Withholding.The Company may withhold from any amounts payable under this Agreement suchFederal, state or local taxes as shall be required to be withheld pursuant toany applicable law or regulation.

 

(e)                                  NoWaiver. Employee’s or the Company’s failure to insist upon strictcompliance with any provision of this Agreement or the failure to assert anyright Employee or the Company may have hereunder, including, withoutlimitation, the right of Employee to terminate employment for Good Reason,shall not be deemed to be a waiver of such provision or right or any otherprovision or right of this Agreement.

 

(f)                                    Equitableand Other Relief. Employee acknowledges that money damages would be bothincalculable and an insufficient remedy for a breach of Section 6, Section7, Section 9, or Section 10 by Employee and that any suchbreach would cause the Company irreparable harm. 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 accurity, toequitable relief, including injunctive relief and specific performance, inconnection with a breach of Section 6, Section 7, Section 9or Section 10 by Employee.

 

(g)                                 EntireAgreement. The provisions of this Agreement constitute the completeunderstanding and agreement between the parties with respect to the subjectmatter hereof, and supersede all prior and contemporaneous oral and writtenagreements, representations and understandings of the parties, which are herebyterminated. Employee and the Company acknowledge and represent that there areno other promises, terms, conditions or representations (oral or written)regarding any matter relevant hereto.

 

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

 

(i)                                     Arbitration.

 

(i)                                     Inthe event any dispute or controversy arises under this Agreement and is notresolved by mutual written agreement between Employee and the Company within 30days after notice of the dispute is first given, then Employee and the Companywill mutually select an arbitrator and submit such dispute or controversy toarbitration by such arbitrator; provided, however, if the Companyand Empoyee 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 inaccordance with the Rules for Resolution of Employment Disputes of the AAA.Judgment may be entered thereon and the results of the arbitration will bebinding and conclusive on the parties hereto. Any arbitrator’s award or findingor any judgment

 

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or verdict thereon will befinal and unappealable. All parties agree that venue for arbitration will be inAlameda County, California, or such other place as may be agreed upon inwriting at the time by the parties and that any arbitration commenced in anyother venue will be transferred to Alameda County, California, upon the writtenrequest of any party to this Agreement. All arbitrations will have oneindividual acting as arbitrator. Any arbitrator selected will not beaffiliated, associated or related to either Employee of the Company in anymatter whatsoever. The decision of the arbitrator will be binding on allparties. The prevailing party in the arbitration (as determined by thearbitrator) shall be reimbursed, by the other party, its reasonable attorneysfees, costs and other expenses pertaining to any such arbitration andenforcement.

 

(ii)                                  THEARBITRATOR SHALL HAVE NO AUTHORITY TO AWARD PUNITIVE DAMAGES UNDER ANYCIRCUMSTANCES (WHETHER IT BE EXEMPLARY DAMAGES, TREBLE DAMAGES, OR ANY OTHERPENALTY OR PUNITIVE TYPE OF DAMAGES). REGARDLESS OF WHETHER SUCH DAMAGES MAY BEAVAILABLE UNDER DELAWARE LAW, EMPLOYEE AND THE COMPANY EACH HEREBY WAIVE THERIGHT, IF ANY, TO RECOVER PUNITIVE DAMAGES IN CONNECTION WITH ANY CLAIMS.EMPLOYEE AND THE COMPANY ACKNOWLEDGE THAT BY SIGNING THIS AGREEMENT EMPLOYEEAND THE COMPANY ARE WAIVING ANY RIGHT THAT EMPLOYEE OR THE COMPANY MAY HAVE TOA JURY TRIAL.

 

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

 

(k)                                  Amendments.This Agreement may not be amended or modified at any time except by a writteninstrument executed by the Company and Employee.

 

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

 

(m)                               EmployeeAcknowledgment. Employee acknowledges that he has read and understands thisAgreement, is fully aware of its legal effect, has not acted in reliance uponany representations or promises made by the Company other than those containedin writing herein, and has entered into this Agreement freely based on his ownjudgment.

 

[SIGNATURE PAGE FOLLOWS]

 

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**SCHEDULE 1**

 

**Annual Bonus**

 

1. Profit Sharing Bonus

 

Company shall pay to Employee a bonus based on the profitability of theCompany as set forth below:

 

•                  Bonus will bepaid quarterly within 30 days after the end fiscal quarter for the Company

 

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

 

Profit Target for the quarter ended June 30, 2005 shall be$1,250,000.00,

 

Profit Target for the quarter ended September 30, 2005 shall be$1,500,000.00,

 

Profit Target for the quarter ended December 31, 2005 shall be$1,500,000.00,

 

Profit Target for the quarter ended March 31, 2006 shall be$1,750,000.00,

 

If Company accomplished its Profit Target for a quarter, Employeesshall be entitled to a bonus equal to $2,635 for the June 30, 2005 quarter,bonus equal to $ 2,625 for the September 30, 2005 quarter, bonus equal to$2,625 for the December 31, 2005 quarter and bonus equal to and bonus equal to$2,625 for the March 31, 2006.

 

If the Company does not accomplish its Profit Target in a quarter butexceeds its Profit Target in a subsequent quarter, the Profit Sharing Bonus canbe increased pro rata by an amount sufficient to make up for a shortfall in aprior quarter. For the four quarters ended March 31, 2006, if the Profit Targetequals $6,000,000 the full Profit Sharing Bonus of $10,500 will be paid.

 

2. Incentive Bonus

 

Once each quarter, Employee shall be eligible to receive a merit bonusbased on mutually areed goals between the Employee and President and ChiefExecutive Officer.

 

3. Sales Commissions

 

Employee shall be eligible to receive sales commissions based onmutually agreed terms between the Employee and President and Chief ExecutiveOfficer.

 

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IN WITNESS WHEREOF, Employee has hereunto set Employee’s hand and theCompany has caused this Agreement to be executed in its name on its behalf, allas of the day and year first above written.

 

 
|   | EMPLOYEE:                |
|--------|--------------------------|
|   |                     |
|   |                     |
|   | /s/ Jason Han            |
|   | Jason Han                |
|   |                     |
|   |                     |
|   | COMPANY:                 |
|   |                     |
|   | LYRIS TECHNOLOGIES, INC. |
|   |                     |
|   |                     |
|   | By:                      | /s/ Luis Rivera |
|   | Name:                    | Luis Rivera |
|   | Title:                   | President |

 

 

**[SIGNATURE PAGE TO EMPLOYMENT AGREEMENT]**

 

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