Unassociated Document


    

      Exhibit
        10.5

      


      EMPLOYMENT
        AGREEMENT

      


      


      THIS
        EMPLOYMENT AGREEMENT (“Agreement”)
        dated
        December 29, 2005 and effective as of December 29, 2005 (the “Effective
        Date”),
        between Cape Coastal Trading Corporation, a Delaware corporation, with its
        principal place of business located at 8550 West Bryn Mawr, Suite 200, Chicago,
        Illinois 60631 its affiliates, subsidiaries, successors and assigns (the
        “Company”)
        and
        Anthony Priore, an individual residing in Highland Park, Illinois (the
“Executive”).

      


      1. Employment
        Period.
        As of
        the Effective Date, the Company shall employ the Executive, and the Executive
        agrees to be employed by Company in the position of Chief Marketing Officer
        in
        accordance with the terms and subject to the conditions of this Agreement,
        commencing on the Effective Date and terminating on the day which is the
        second
        anniversary of the Effective Date unless terminated in accordance with the
        provisions of Section 11, in which case the provisions of Section 11 shall
        control (the “Term”).
        

      


      The
        Executive affirms that, except as otherwise set forth herein, no obligation
        exists between the Executive and any other entity which would prevent or
        impede
        the Executive’s immediate and full performance of every obligation of this
        Agreement.

       

      2. Position
        and Duties.
        During
        the Term of the Executive’s employment hereunder, the Executive shall continue
        to serve in, and assume duties and responsibilities consistent with, the
        position of Chief Marketing Officer. The Executive agrees to devote
        his working
        time, as
        set
        forth in Section 4 hereof, utilizing his skill, energy and best business
        efforts
        on behalf of the Company. Notwithstanding anything to the contrary contained
        herein, upon written notice to the Board of Directors the Executive may hold
        officer and non-executive director positions (or the equivalent position)
        in or
        at other entities not inconsistent with the best interests of the Company
        so
        long as the Board of Directors has not provided Executive written notice
        that it
        has determined that such activities will interfere with his ability to perform
        his duties and responsibilities hereunder. 

       

      3. No
        Conflicts.
        The
        Executive covenants and agrees that for so long as he is employed by the
        Company, he shall inform the Company of each and every business opportunity
        related to the business of the Company of which he becomes aware, and that
        he
        will not, directly or indirectly, exploit any such opportunity for his own
        account, nor will he render any services to any other person or business,
        acquire any interest of any type in any other business (except for an ownership
        interest of not more than 1% of a publicly traded entity) or engage in any
        activities that conflict with the Company’s best interests or which is in
        competition with the Company. 

       

      4. Days/Hours
        of Work and Work Week.
        The
        Executive shall normally work 5 days per week and his hours of work shall
        be
        appropriate to the nature of the Executive’s duties and responsibilities with
        the Company, it being recognized that such duties and responsibilities require
        flexibility in the Executive’s work schedule. 

       

      5. Employment
        Location.
        The
        locus of the Executive’s employment with the Company shall be the Company’s
        principal executive office which is currently located at 8550 West Bryn Mawr,
        Suite 200, Chicago, Illinois 60631. 

       

      6. Compensation.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      (a) Base
        Salary.
        During
        the first 12 months of the Term, the Company shall pay, and the Executive
        agrees
        to accept, in consideration for the Executive’s services hereunder, an annual
        salary of $190,000.00, less all applicable taxes and other appropriate
        deductions. On the first anniversary of the Effective Date, the Executives
        annual salary shall increase to $210,000.00. The
        Company’s Chief Executive Officer (the “CEO”)
        shall
        annually review the Executive’s base salary to determine whether such salary
        should be increased and the amount of any such increase shall be within the
        CEO’s sole discretion. 

       

      (b) Annual
        Performance Bonus.
        During
        the Term of this Agreement, the Executive
        shall be entitled to an annual performance bonus with a targeted amount equal
        to
        30% of the Executive’s annual base salary and a maximum payout in an amount not
        to exceed 60% of the Executive’s annual base salary
        (or
pro-rata
        portion
        thereof in the case of a period of less than 12 months)
        based on
        an evaluation conducted by the Board of the
        Executive’s performance and the operating performance of the Company during the
        fiscal year to which the performance bonus pertains based on established
        target
        performance as follows 70% corporate financial targets, 30% individual
        leadership goals, and self-funding above financial targets. Each annual
        performance bonus shall be paid by the Company to the Executive promptly
        after
        the
        first meeting of the Board following the previous calendar year,
        but
        in no case later than March 30th of each year. The Company will deliver a
        more
        detailed formal written plan document within 45-days of the Effective Date
        setting forth the final terms and conditions of the Annual Performance Bonus
        for
        the first year of this Agreement.

       

      7. Business
        Expenses.
        During
        the Term of this Agreement, the Executive shall be entitled to payment or
        reimbursement of any and all reasonable expenses paid or incurred by him
        in
        connection with and related to the performance of his duties and
        responsibilities hereunder for the Company. All requests by the Executive
        for
        payment of
        reimbursement of such expenses shall be supported by appropriate invoices,
        vouchers, receipts or such other supporting documentation in such form and
        containing such information as the Company may from time to time reasonably
        require, evidencing that the Executive, in fact, incurred or paid said
        expenses.

       

      8. Vacation.
        During
        the Term of this Agreement, the Executive shall be entitled to accrue 20
        personal and vacation days per year. The Executive shall be entitled to carry
        over 40 hours of accrued, unused vacation time from year to year.

       

      9. Equity
        Compensation.

      


      (a) Incentive
        Plan.
        By the
        Effective Date, the Company plans to have received all requisite approvals
        required to adopt a new equity incentive plan (the “Plan”).
        Within 45 days of the date on which the Plan is adopted, the Company will
        provide a copy of the Plan to the Executive. 

      


      (b) Stock
        Options.
        After
        the adoption of the Plan and subject to approval of the Board of Directors,
        the
        Company shall issue to the Executive a stock option to acquire 150,000 shares
        of
        the Company’s common stock (the “Common
        Stock”)
        under
        the Plan at an exercise price equal to the fair market value of the Common
        Stock
        as of the date of grant. The stock option granted pursuant to this Section
        and
        each subsequent grant of options to the Executive during the Term shall be
        evidenced by a written stock option agreement.

      


      (c) Vesting
        and Exercise.
        The
        stock option to be granted pursuant to this Section shall vest and become
        exercisable as follows: 1/4 upon the first anniversary of the grant date,
        and
        1/4 upon the second, third, and fourth anniversaries of the grant date.
        Subsequent stock options granted to the Executive shall vest pursuant to
        the
        terms and conditions of the Plan.

       

      
        
          
          

        

        
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          10.
            Other Benefits. During the Term of this Agreement, the
            Executive shall be eligible to participate in incentive, savings, retirement
            (401(k)), and welfare benefit plans, including, without limitation, health,
            medical, dental, vision, life (including accidental death and dismemberment)
            and
            disability insurance plans (collectively, “Benefit Plans”), in
            substantially the same manner and at substantially the same levels as
            the
            Company makes such opportunities available to the Company's executive
            employees.

        

         

        11. Termination
          of Employment.

      

       

      (a) Death.
        In the
        event that, during the Term of this Agreement, the Executive dies, this
        Agreement and the Executive’s employment with the Company shall automatically
        terminate and the Company shall have no further obligations to the Executive
        or
        his heirs, administrators or executors with respect to compensation and benefits
        accruing thereafter, except for the obligation to pay the Executive’s heirs,
        administrators or executors any earned but unpaid base salary, unpaid
pro
        rata
        annual
        bonus and unused vacation days accrued through the date of death, including
        any
        carryover days. The Company shall deduct, from all payments made hereunder,
        all
        applicable taxes, including income tax, FICA and FUTA, and other appropriate
        deductions.

      


      (b) Disability.
        In
        the
        event that, during the Term of this Agreement, the Executive shall be prevented
        from performing his duties and responsibilities hereunder to the full extent
        required by the Company by reason of Disability, as defined below, this
        Agreement and the Executive’s employment with the Company shall automatically
        terminate and the Company shall have no further obligations to the Executive
        or
        his heirs, administrators or executors with respect to compensation and benefits
        accruing thereafter, except for the obligation to pay the Executor’s heirs,
        administrators or executors any earned but unpaid base salary, unpaid
pro
        rata
        annual
        bonus and unused vacation days accrued through the date of Disability, including
        any carryover days. The Company shall deduct, from all payments made hereunder,
        all applicable taxes, including income tax, FICA and FUTA, and other appropriate
        deductions through
        the last date of the Executive’s employment with the Company. For purposes of
        this Agreement, “Disability”
shall
        mean a physical or mental disability that, in the Board’s discretion, based upon
        the medical opinions of two qualified physicians specializing in the area
        or
        areas of the Executive’s affliction, one of whom shall be chosen by the Board
        and one of whom shall be chosen by the Executive, prevents the performance
        by
        the Executive, with or without reasonable accommodation, of his duties and
        responsibilities hereunder for a continuous period of not less than six
        consecutive months. 

      


      (c) Cause.

      


      (i) At
        any
        time during the Term of this Agreement, the Company may terminate this Agreement
        and the Executive’s employment hereunder for Cause. For purposes of this
        Agreement, “Cause”
shall
        mean:
        (a)
the
        willful and continued failure of the Executive to substantially perform his
        duties to and responsibilities for the Company (other than any such failure
        resulting from a Disability); (b) the
        conviction of, or plea of guilty or nolo
        contendere
        to a
        felony; or (c) fraud,
        dishonesty, competition with the Company, unauthorized use of any of the
        Company’s or any subsidiary’s trade secrets or confidential
        information, a
        material breach of the Company’s policies or codes of conduct, a willful or
        material breach of any agreement between the Executive and the Company including
        this Agreement, or gross misconduct which is materially and demonstratively
        injurious to the Company. 

       

      (ii) Termination
        of the Executive for Cause shall be made by delivery to the Executive of
        written
        notice from the Board specifying the basis of the Executive’s termination is for
        Cause, describing the conduct or circumstances justifying termination for
        Cause,
        and indicating that the Board has found that such conduct or circumstances
        has
        occurred and warrants the Executive’s termination of employment for Cause. Upon
        receipt of such demand or notice, the Executive, shall be entitled to appear
        before the CEO for the purpose of demonstrating that the conduct indicated
        does
        not exist or that breach of 11(c)(i)(A) has been cured. After such appearance,
        the CEO shall make a final determination on the existence of a basis warranting
        Executive’s termination for Cause. No termination for Cause will be final until
        the CEO has reached such a determination. 

       

      
        
          
          

        

        
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      (iii) Upon
        termination of Executive’s employment for Cause, the Company shall have no
        further obligations or liability to the Executive or his heirs, administrators
        or executors with respect to compensation and benefits thereafter, except
        for
        the obligation to pay the Executive any earned but unpaid base salary through
        the Executive’s last day of employment with the Company. The Company shall
        deduct, from all payments made hereunder, all applicable taxes, including
        income
        tax, FICA and FUTA, and other appropriate deductions.

       

      (d) Good
        Reason.

       

      (i) At
        any
        time during the Term of this Agreement, subject to the conditions set forth
        in
        Section 11(d)(iii) below, the Executive may terminate this Agreement and
        the
        Executive’s employment with the Company for Good Reason. For purposes of this
        Agreement, Good
        Reason
        shall
        mean the occurrence, without the Executive’s consent, of any of the following
        events: (A) the assignment of duties and responsibilities that are inconsistent
        with and reflect a substantial diminution in the duties and responsibilities
        assumed by the Executive on the Effective Date; (B) a Change of Control (as
        defined in Section 11(d)(ii) herein below) that results in the termination
        of
        the Executive’s employment with the Company or a material adverse change in the
        Executive’s duties and responsibilities or, as applicable, in connection with
        which the successor does not agree to assume, or is not deemed to assume
        by
        operation of law, the Company’s obligations under this Agreement; (C) a material
        breach of this Agreement by the Company; (D) a relocation of the Company’s
        principal executive offices to a location that is greater than 50 miles from
        its
        current location; or (E) a reduction in the Executive’s base salary or a
        material reduction in other benefits, as described in Section 10(a), other
        than
        reductions generally applicable to executives of the Company. 

      


      (ii) For
        purposes of this Agreement, “Change
        of Control”
means:
        (A) any sale, lease, exchange or other transfer (in one transaction or a
        series
        of related transactions) of all, or substantially all, of the assets of the
        Company other than any sale, lease, exchange or other transfer to any company
        where the Company owns, directly or indirectly, 100 percent of the outstanding
        voting securities of such company after any such transfer; (B) any person
        or
        persons (as such term is used in Section 13(d) of the Exchange Act of 1934,
        as
        amended), other than the holders of voting securities of the Company as of
        the
        Effective Date, shall acquire or become the beneficial owner (within the
        meaning
        of Rule 13d-3 under the Exchange Act) whether directly, indirectly, beneficially
        or of record, of 51% or more of outstanding voting securities of the Company;
        or
        (C) consummation by any entity, person, or group (including any affiliate
        thereof, other than the Company) of a tender offer or exchange offer where
        the
        offeree acquires more than 51% of the then outstanding voting securities
        of the
        Company.

      


      (iii) The
        Executive shall be entitled to terminate this Agreement for Good Reason if
        Executive has delivered to the Company written notice of his intention to
        terminate this Agreement for Good Reason promptly, and in no event longer
        than 5
        business days, after either the date on which the Executive (A) receives
        written
        notice from the Company of the occurrence of an event within the meaning
        of Good
        Reason under Section 11(d)(i) or (B) obtains actual knowledge of the occurrence
        of an event within the meaning of Good Reason under Section 11(d)(i) and
        which
        provides, in reasonable detail, the circumstances of the occurrence of the
        event; provided, however, that the Executive shall not be entitled to terminate
        this Agreement for Good Cause if the Company eliminates such event or
        circumstances within 10 days of the Company’s receipt of the written notice
        described in this Section. 

       

      
        
          
          

        

        
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      (iv) In
        the
        event that Executive terminates this Agreement for Good Reason, the Company
        shall pay or provide to the Executive (or, following his death, to the
        Executive’s heirs, administrators or executors)
        any
        earned but unpaid base salary, unpaid pro
        rata
        annual
        bonus and unused vacation days accrued through the Executive’s last day of
        employment with the Company, including any carryover days. In addition, the
        Company shall pay Executive in 12 equal semi-monthly installments as severance
        an amount equal to 50% of the Executive’s annual base salary on the date of the
        termination of this Agreement in
        accordance with the Company’s standard payroll schedule less all applicable
        taxes and other appropriate deductions and adjustments pursuant to the Company’s
        employee compensation policies in effect on such date and provided
        the Executive agrees to execute the Company’s standard separation and release
        agreement and Executive
        shall receive for a period of 6 months following the date of termination,
        coverage, at the Company’s expense, under the Benefits Plans; provided, however,
        that such continued benefit plan coverage shall be canceled or reduced to
        the
        extent of any comparable benefit coverage offered to the Executive by a
        subsequent employer or other person or entity for which the Executive performs
        services, including but not limited to consulting services. The Company shall
        deduct, from all payments made hereunder, all applicable taxes, including
        income
        tax, FICA and FUTA, and other appropriate deductions. 

       

      (e) Without
        Cause.

       

      (i) By
        The Executive.
        At any
        time during the Term of this Agreement, the Executive shall be entitled to
        terminate this Agreement without Cause by providing 30 days prior written
        notice
        of such intent to terminate to the Company. Upon termination by the Executive
        of
        this Agreement pursuant to this Section, the Company shall have no further
        obligations to the Executive or his heirs, administrators or executors with
        respect to compensation and benefits thereafter, except for the obligation
        to
        pay the Executive (or, following his death, to the Executive’s heirs,
        administrators or executors) any earned but unpaid base salary, pro
        rata
        annual
        bonus and unused vacation days accrued through the Executive’s last day of
        employment with the Company. The Company shall deduct, from all payments
        made
        hereunder, all applicable taxes, including income tax, FICA and FUTA, and
        other
        appropriate deductions.

       

      (ii) By
        The Company.
        At any
        time during the Term of this Agreement, the Company shall be entitled to
        terminate this Agreement without Cause by providing 30 days prior written
        notice
        of such intent to the Executive. Upon termination by the Company of this
        Agreement without Cause, the Company shall pay or provide to the Executive
        (or,
        following his death, to the Executive’s heirs, administrators or executors): any
        earned but unpaid base salary, unpaid pro
        rata
        annual
        bonus and unused vacation days accrued through the Executive’s last day of
        employment with the Company, including any carryover days. In addition, so
        long
        as Executive has not and does not violate the provisions of Sections 12,
        13 and
        14 of this Agreement, the Company shall pay or provide to the Executive as
        severance in 12 equal semi-monthly installments an amount equal to 50% of
        the
        Executive’s annual base salary on the date of the termination of this Agreement
in
        accordance with the Company’s standard payroll schedule less all applicable
        taxes and other appropriate deductions and adjustments pursuant to the Company’s
        employee compensation policies in effect on such date and provided
        the Executive agrees to execute the Company’s standard separation and release
        agreement and Executive shall receive for a period of 6 months following
        the
        date of termination, payment or reimbursement, at the Company’s expense, of
        Executive’s COBRA rights under the Benefits Plans (if Executive elects COBRA
        continuation); provided, however, that such continued benefit plan coverage
        shall be canceled or reduced to the extent of any comparable benefit coverage
        offered to the Executive by a subsequent employer or other person or entity
        for
        which the Executive performs services, including but not limited to consulting
        services. The Company shall deduct, from all payments made hereunder, all
        applicable taxes, including income tax, FICA and FUTA, and other appropriate
        deductions. 

       

      
        
          
          

        

        
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      12. Confidential
        Information.
        

       

      (a) The
        Executive expressly acknowledges that, in the performance of his duties and
        responsibilities with the Company, he has been exposed, and will be exposed,
        to
        the trade secrets, business and/or financial secrets and confidential and
        proprietary information of the Company, its affiliates and/or its clients
        or
        customers (“Confidential
        Information”).
        The
        term “Confidential Information” includes, without limitation, information or
        material that has actual or potential commercial value to the Company, its
        affiliates and/or its clients or customers and is not generally known to
        and is
        not readily ascertainable by proper means to persons outside the Company,
        its
        affiliates and/or its clients or customers.

       

      (b) Except
        as
        authorized in writing by the Board, during the performance of the Executive’s
        duties and responsibilities for the Company and until such time as any such
        Confidential Information becomes generally known to and readily ascertainable
        by
        proper means to persons outside the Company, its affiliates and/or its clients
        or customers,
        the
        Executive agrees to keep strictly confidential and not use for his personal
        benefit or the benefit to any other person or entity the Confidential
        Information, whether or not prepared or developed by the Executive. Confidential
        Information includes, without limitation, the following, whether or not
        expressed in a document or medium, regardless of the form in which it is
        communicated, and whether or not marked “trade secret” or “confidential” or any
        similar legend: (i) lists
        of
        and/or information concerning customers, suppliers, employees, consultants,
        and/or co-venturers of the Company, its affiliates or its clients or customers;
        (ii) information
        submitted by customers, suppliers, employees, consultants and/or co-venturers
        of
        the Company, its affiliates and/or its clients or customers; (iii) information
        concerning the business of the Company, its affiliates and/or its clients
        or
        customers, including, without limitation, cost information, profits, sales
        information, prices, accounting, unpublished financial information, business
        plans or proposals, markets and marketing methods, advertising and marketing
        strategies, administrative procedures and manuals, the terms and conditions
        of
        the Company’s contracts and trademarks and patents under consideration,
        distribution channels, franchises, investors, sponsors and advertisers; (iv)
        technical
        information concerning products and services of the Company, its affiliates
        and/or its clients or customers, including, without limitation, product data
        and
        specifications, diagrams, flow charts, know how, processes, designs, formulae,
        inventions and product development; (v) lists
        of
        and/or information concerning applicants, candidates or other prospects for
        employment, independent contractor or consultant positions at or with any
        actual
        or prospective customer or client of Company and/or its affiliates,
        any and
        all confidential processes, inventions or methods of conducting business
        of the
        Company, its affiliates and/or its clients or customers; (vi) any
        and
        all versions of proprietary computer software (including source and object
        code), hardware, firmware, code, discs, tapes, data listings and documentation
        of the Company, its affiliates and/or its clients or customers; (vii)
any
        other
        information disclosed to the Executive by, or which the Executive obtained
        under
        a duty of confidence from, the Company, its affiliates and/or its clients
        or
        customers; (viii) all
        other
        information concerning the Company not generally known to the public which,
        if
        misused or disclosed, could reasonably be expected to adversely affect the
        business of the Company, its affiliates and/or its clients or customers.
        Confidential Information shall not include (i) information which is in the
        public domain or which enters the public domain without the fault of Executive,
        (ii) information which was in the possession of Executive in written or other
        documentary form prior to the time of disclosure by the Company to Executive,
        and (iii) information which is required by Executive to be disclosed in legal
        proceedings, including pursuant to subpoena or court order.

       

      
        
          
          

        

        
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      (c) The
        Executive affirms that he does not possess and will not rely upon the protected
        trade secrets or confidential or proprietary information of his prior
        employer(s) in providing services to the Company.

       

      (d) In
        the
        event that the Executive’s employment with the Company terminates for any
        reason, the Executive shall deliver forthwith to the Company any and all
        originals and copies of Confidential Information.

       

      13. Ownership
        and Assignment of Inventions. 

      


      (a) The
        Executive acknowledges that, in connection with his duties and responsibilities
        relating to his employment with the Company, he and/or other employees of
        the
        Company working with him, without him or under his supervision, may create,
        conceive of, make, prepare, work on or contribute to the creation of, or
        may be
        asked by the Company or its affiliates to create, conceive of, make, prepare,
        work on or contribute to the creation of, without limitation, lists, business
        diaries, business address books (except
        for business addresses and business address books not related to the Company),
        documentation, ideas, concepts, inventions, designs, works of authorship,
        computer programs, audio/visual works, developments, proposals, works for
        hire
        or other materials to the extent that any of the same relate to any actual
        or
        reasonably anticipated Business of the Company (as such phrase is defined
        in
        paragraph 14(a) hereof) or any of the Company’s affiliates (“Inventions”).
        Executive expressly acknowledges that all of his activities and efforts relating
        to any Inventions, whether or not performed during his or the Company’s regular
        business hours, are within the scope of his employment with the Company and
        that
        the Company owns all right, title and interest in and to all Inventions,
        including, to the extent that they exist, all intellectual property rights
        thereto, including, without limitation, copyrights, patents and trademarks
        in
        and to all Inventions. The Executive also acknowledges and agrees that the
        Company owns and is entitled to sole ownership of all rights and proceeds
        to all
        Inventions.

      (b) The
        Executive expressly acknowledges and agrees to assign to the Company, and
        hereby
        assigns to the Company, all of the Executive’s right, title and interest in and
        to all Inventions, including, to the extent they exist, all intellectual
        property rights thereto, including, without limitation, copyrights, patents
        and
        trademarks in and to all Inventions.

       

      (c) In
        connection with all Inventions, the Executive agrees to disclose any Invention
        promptly to the Company and to no other person or entity. The Executive further
        agrees to execute promptly, at the Company’s request, specific written
        assignments of the Executive’s right, title and interest in any Inventions, and
        do anything else reasonably necessary to enable the Company to secure or
        obtain
        a copyright, patent, trademark or other form of protection in or for any
        Invention in the United States or other countries.

      


      (d) The
        Executive acknowledges that all rights, waivers, releases and/or assignments
        granted in this Section by the Executive are freely assignable by the Company
        and are made for the benefit of the Company and its Affiliates, subsidiaries,
        licensees, successors and assigns.

      


      14. Non-Competition
        And Non-Solicitation.
        

      


      (a) The
        Executive agrees and acknowledges that the Confidential Information that
        the
        Executive has already received and will receive are valuable to the Company,
        its
        affiliates and/or its clients or customers, and
        that
        its protection and maintenance constitutes a legitimate business interest
        of
        Company, its
        affiliates and/or its clients or customers
        to be
        protected by the non-competition restrictions set forth herein. The Executive
        agrees and acknowledges that the non-competition restrictions set forth herein
        are reasonable and necessary and do not impose undue hardship or burdens
        on the
        Executive. The Executive also acknowledges that the products and services
        developed or provided by the Company, its
        affiliates and/or its clients or customers
        are or
        are intended to be sold, provided, licensed and/or distributed to customers
        and
        clients in and throughout the United States (the “Geographic
        Boundary”),
        and
        that the Geographic Boundary, scope of prohibited competition, and time duration
        set forth in the non-competition restrictions set forth below are reasonable
        and
        necessary to maintain the value of the Confidential Information of, and to
        protect the goodwill and other legitimate business interests of, the Company,
        its
        affiliates and/or its clients or customers.
        The
        Executive also acknowledges that the business of the Company is the offering
        through its online marketplace of high quality new, overstock, close-out
        and
        refurbished brand name consumer merchandise (the “Business of the
        Company”).

      


      
        
          
          

        

        
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      (b) The
        Executive hereby agrees and covenants that he shall not, directly or indirectly,
        in any capacity whatsoever, including, without limitation, as an employee,
        employer, consultant, principal, partner, shareholder, officer, director
        or any
        other individual or representative capacity (other than a holder of less
        than
        one percent (1%) of the outstanding voting shares of any publicly held company),
        or whether on the Executive’s own behalf or on behalf of any other person or
        entity or otherwise howsoever, during the Executive’s employment with the
        Company and for a period of one year following the termination of this Agreement
        for any reason, in the Geographic Boundary:

      


      (i) Engage,
        own, manage, operate, control, be employed by, consult for, participate in,
        or
        be connected in any manner with the ownership, management, operation or control
        of any business in competition with the Business of the Company; 

      


      (ii) Solicit,
        persuade or induce any Customer: to terminate, reduce or refrain from renewing,
        extending, or entering into contractual or other relationships with the Company
        or to become a customer of or enter into any contractual or other relationship
        with any other individual, person or entity for the purpose of purchasing
        competitive products or services; or

      


      (iii) Recruit,
        hire, induce, contact, divert or solicit, or attempt to recruit, induce,
        contact, divert or solicit, any employee of the Company to leave the employment
        thereof, whether or not any such employee is party to an employment agreement.
        

      


      15. Indemnification.
        The
        Company hereby covenants and agrees to indemnify the Executive to the fullest
        extent permitted by law and to hold the Executive harmless fully, completely,
        and absolutely against and in any respects to any and all actions, suits,
        proceedings, claims, demands, judgments, costs, expenses (including attorneys’
fees), losses, and damages resulting from the Executive’s good faith performance
        of his job duties pursuant to this Agreement. The Company also hereby agrees
        to
        cover the Executive under a directors’ and officers’ liability insurance policy
        at all times while an employee and for the applicable statute of limitations
        after termination hereof, with such coverage no less favorable than that
        given
        to other executive employees of the Company.

       

      16. Notice.
        For
        purposes of this Agreement, notices and all other communications provided
        for in
        this Agreement or contemplated hereby shall be in writing and shall be deemed
        to
        have been duly given when personally delivered, delivered by a nationally
        recognized overnight delivery service or when mailed United States Certified
        or
        registered mail, return receipt requested, postage prepaid, and addressed
        as
        follows:

       

      
        
          
          

        

        
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            8 -

          
            

          

        

        
          
          

        

      

      If
        to the
        Company: 

      


      Cape
        Coastal Trading Corporation

      8550
        West
        Bryn Mawr

      Suite
        200

      Chicago,
        Illinois 60631

      


      If
        to the
        Executive:

      Anthony
        Priore

      
        c/o
          Cape
          Coastal Trading Corporation

        8550
          West
          Bryn Mawr

        Suite
          200

        Chicago,
          Illinois 60631

      

      


      17. Miscellaneous.

       

      (a) Telephones,
        stationery, postage, e-mail, the internet and other resources made available
        to
        the Executive by the Company, are solely for the furtherance of the Company’s
        business.

       

      (b) All
        issues and disputes concerning, relating to or arising out of this Agreement
        and
        from the Executive’s employment by the Company, including, without limitation,
        the construction and interpretation of this Agreement, shall be governed
        by and
        construed in accordance with the internal laws of the State of Illinois,
        without
        giving effect to that State’s principles of conflicts of law. The Executive
        hereby consents to jurisdiction in the courts of Illinois.

       

      (c) The
        Parties agree that any provision of this Agreement deemed unenforceable or
        invalid may be reformed to permit enforcement of the objectionable provision
        to
        the fullest permissible extent. Any provision of this Agreement deemed
        unenforceable after modification shall be deemed stricken from this Agreement,
        with the remainder of the Agreement being given its full force and
        effect.

       

      (d) The
        Company shall be entitled to equitable relief, including injunctive relief
        and
        specific performance as against the Executive, for the Executive’s threatened or
        actual breach of Sections 12, 13 and 14 of this Agreement, as money damages
        for
        a breach thereof would be incapable of precise estimation, uncertain, and
        an
        insufficient remedy for an actual or threatened breach of Sections 12, 13
        and 14
        of this Agreement. The Parties agree that any pursuit of equitable relief
        in
        respect of Sections 12, 13 and 14 of this Agreement shall have no effect
        whatsoever regarding the continued viability and enforceability of Section
        16 of
        this Agreement. 

       

      (e) Any
        waiver or inaction by the Company or the Executive for any breach of this
        Agreement shall not be deemed a waiver of any subsequent breach of this
        Agreement.

       

      (f) The
        Parties independently have made all inquiries regarding the qualifications
        and
        business affairs of the other which either party deems necessary. The Executive
        affirms that he fully understands this Agreement’s meaning and legally binding
        effect. Each party has participated fully and equally in the negotiation
        and
        drafting of this Agreement. 

       

      (g) The
        Executive’s obligations under this Agreement are personal in nature and may not
        be assigned by the Executive to any other person or entity. This
        Agreement shall be enforceable by the
        Company
        and its
        parents, affiliates, successors and assigns.

       

      
        
          
          

        

        
          -
            9 -

          
            

          

        

        
          
          

        

      

      (h) This
        instrument constitutes the entire Agreement between the Parties regarding
        its
        subject matter. When signed by all Parties, this Agreement supersedes and
        nullifies all prior or contemporaneous conversations, negotiations, or
        agreements, oral and written, regarding the subject matter of this Agreement.
        In
        any future construction of this Agreement, this Agreement should be given
        its
        plain meaning. This Agreement may be amended only by a writing signed by
        the
        Parties.

       

      (i) This
        Agreement may be executed in counterparts, a counterpart transmitted via
        facsimile, and all executed counterparts, when taken together, shall constitute
        sufficient proof of the Parties’ entry into this Agreement. The Parties agree to
        execute any further or future documents which may be necessary to allow the
        full
        performance of this Agreement. This Agreement contains headings for ease
        of
        reference. The headings have no independent meaning.

      


      [SIGNATURE
        PAGE FOLLOWS]

      


      
        
          
          

        

        
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      THE
        EXECUTIVE STATES THAT HE HAS FREELY AND VOLUNTARILY ENTERED INTO THIS AGREEMENT
        AND THAT HE HAS READ AND UNDERSTOOD EACH AND EVERY PROVISION THEREOF. THIS
        AGREEMENT IS EFFECTIVE UPON THE EXECUTION OF THIS AGREEMENT BY BOTH
        PARTIES.

      


      


      UNDERSTOOD,
        AGREED, AND ACCEPTED:

      


       

    

    
      	EXECUTIVE	 	COMPANY
	 	 	 	 	 
	Anthony Priore	 	Cape Coastal Trading
              Corporation
	 	 	 	 	 
	/s/
              Anthony Priore	 	By:	/s/
              Robert H. Tomlinson, Jr. 
	 	 	 	Name:  	Robert
              H. Tomlinson, Jr. 
	 	 	 	Title: 	President
&
CEO  
	 	 	 	 	 
	 	 	 	 	 
	Date:
               December
              29, 2005 	 	Date:
              	December
              29, 2005 


    

          


       

    
      
        
        

      

      
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