Document:

EXHIBIT 10.1

 

FOURTH AMENDMENT
TO OFFICE/WAREHOUSE LEASE

 

This Fourth
Amendment to Office/Warehouse Lease is made December 1, 2005, by and
between FLYING CLOUD BUSINESS CENTRE INVESTORS LLC, a Delaware limited
liability company (“Lessor”) and FARGO ELECTRONICS, INC., a Delaware
corporation (“Lessee”).

 

RECITALS

 

A.            Lessor is the successor to Aetna
Life Insurance Company and Opus Northwest, LLC, as owner of the
Office/Warehouse Complex known as Flying Cloud Business Centre located at 6601
Flying Cloud Drive, Eden Prairie, Minnesota.

 

B.            Lessor’s predecessors and Lessee are
parties to that certain Office/Warehouse Lease dated June 10, 1996, as
amended by Amendment to Lease dated June 10, 1996, as amended by Second
Amendment to Office/Warehouse Lease dated August 29, 1996, and as amended
by Third Amendment to Office/Warehouse Lease dated February 28, 2001,
pursuant to which Lessee leases from Lessor approximately 96,240 square feet of
space.  The Office/Warehouse Lease as
amended is referred to herein as the “Lease”.

 

C.            Lessor and Lessee wish to modify the
terms and conditions of the Lease as hereinafter set forth.

 

NOW,
THEREFORE, in consideration of the foregoing, and the covenants and agreements
hereinafter set forth, and for other good and valuable consideration, the
parties amend the Lease as follows:

 

1

 

1.             Definitions.  Capitalized terms used in this Fourth
Amendment shall have the meanings set forth in the Lease unless otherwise
specifically defined herein.

 

2.             Term.  The current termination date of the Lease is December 31,
2006.  The term of the Lease is extended
for an additional 120 months for the period commencing January 1, 2007 and
terminating December 31, 2016 (the “Extension Term”), unless terminated
earlier as provided in the Lease.

 

3.             Base Rent.  The Base Rent for the Premises payable by
Lessee during the Extension Term will be as follows:

 

	
  Period

  	
   

  	
  Per Square Foot Rent

  	
   

  	
  Monthly Base Rent

  	
   

  
	
  1/1/07 – 12/31/11

  	
   

  	
  $

  	
  5.00

  	
   

  	
  $

  	
  40,100.00

  	
   

  
	
  1/1/12 – 12/31/16

  	
   

  	
  $

  	
  5.75

  	
   

  	
  $

  	
  46,115.00

  	
   

  

 

4.             Additional Rent.  In addition to the Base Rent set forth in
Paragraph 3, Lessee will continue to be responsible for its proportionate share
of Real Estate Taxes, Operating Expenses, and other Additional Rent as provided
in the Lease.  This Additional Rent is
currently estimated at $2.80 per square foot for calendar year 2005, or
$22,456.00 per month.

 

5.             Option to Renew.  Lessee shall have the option to extend the
term of this Lease beyond the Extension Term for one period of either 2 years
or 5 years, as selected by Lessee, on the following terms and conditions, such
extension period being sometimes referred to herein and in the Lease as the “Renewal
Term”:

 

(a)                                  At
the time of the exercise of the option, the Lease shall be in full force and
effect and Lessee shall not be in default in the performance of any term of the
Lease in respect to a matter as to which notice of default has been given under
the Lease which has not been remedied within the time permitted in the Lease.

 

2

 

(b)                                 Lessee
shall exercise its option to extend the term of the Lease for the Renewal Term
by notifying Lessor in writing of its election to exercise the right to renew
and extend the term of the Lease no later than June 30, 2016.

 

(c)                                  In
exercising its right to extend the term of this Lease for the Renewal Term, the
notice from Lessee shall clearly indicate whether the Renewal Term will be for
a period of 2 years or for a period of 5 years.

 

(d)                                 The
Renewal Term shall be upon the same terms, covenants, and conditions as in the
Lease; provided, however, the Base Rent for the Renewal Term shall be the fair
market Base Rent rate for the Premises on the date the Renewal Term commences
in relation to comparable (in quality and location) space located in the
Minneapolis-St. Paul metropolitan area. 
The fair market Base Rent for the Premises shall be determined as of July 1,
2016.

 

(e)                                  Upon
notification with respect to such renewal, and for a period of 60 days thereafter,
the parties shall make a good faith effort to agree upon the fair market Base
Rent of the Premises for the Renewal Term. 
In the event that Lessor and Lessee fail to agree within the 60 day time
period, the fair market Base Rent of the Premises for the Renewal Term shall be
determined by arbitration in the manner set forth in Article XXXI of the
Lease; provided, however, in no event shall the Base Rent of the Premises for
the Renewal Term be less than $5.75 per square foot or greater than $6.90 per square
foot.  Any determination by arbitration
or any agreement reached by the parties with respect to the fair market Base
Rent and resulting Base Rent of the Premises for the Renewal Term shall be set
forth in a supplement to this Lease signed by the parties.

 

6.             Right of First Opportunity.  Lessor will give written notice to Lessee of
any adjacent space in the Office/Warehouse Complex that becomes available for
lease during the term of this Lease (the “Offer Space”).  Lessor’s notice will include the Base Rent
for the Offer Space calculated at the market rate at which Lessor would, as of
the date upon which Lessor submits written notice to Lessee, expect to charge a
new tenant for the Offer Space for the term in question; provided, however,
that space that is

 

3

 

available as of the date of this Fourth Amendment shall not be included
as Offer Space until it has been leased and has again become available for
leasing.  Following such notice, Lessee
shall have the right to lease the Offer Space in accordance with the following
conditions:

 

(a)                                  Lessee
is not in default under the Lease.

 

(b)                                 The
party currently leasing the Offer Space does not desire to continue to lease
the Offer Space.

 

(c)                                  Other
tenants in the Office/Warehouse Complex with the rights to lease the Offer
Space do not desire to lease the Offer Space.

 

(d)                                 Lessee
provides written notice to Lessor exercising its right to lease the Offer Space
(the “Election Notice”) within 30 days following Lessor’s notice of
availability of the Offer Space.

 

(e)                                  If
Lessee fails to timely exercise its right to lease the Offer Space, Lessee
shall have no further right to lease the Offer Space pursuant to this Paragraph
6 until it has been leased by Lessor to a third party and has again become
available.

 

(f)                                    If
Lessee exercises its right to lease the Offer Space, Lessor and Lessee shall
enter into an amendment to the Lease which adds the Offer Space to the Lease,
subject to the following terms and conditions:

 

(1)                                  The
Base Rent for the Offer Space will be the rate which Lessor submits in its
written notice to Lessee that the Offer Space is available.

 

(2)                                  Lessee’s
pro rata share of Real Estate Taxes, Operating Expenses, and other Additional
Rent pursuant to the Lease will be increased as to include the Offer Space.

 

(3)                                  The
Offer Space shall be delivered to and accepted by Lessee in “as is” condition
when it becomes available.

 

(4)                                  The
obligations of Lessee for Base Rent and Additional Rent with respect to the
Offer Space will commence on the date possession of the Offer Space is tendered
by Lessor to Lessee.

 

4

 

(5)                                  The
Offer Space shall be added to the Premises for a term concurrent with the
current term of the Lease.

 

(6)                                  Except
as herein specifically provided to the contrary, all of the terms and
conditions of the Lease shall apply to the Offer Space upon its addition to the
Premises.

 

(7)                                  Lessee’s
right to lease the Offer Space must be exercised with regard to the entire Offer
Space.

 

(8)                                  Any
improvements to be made to the Offer Space will be constructed by Lessee, at
Lessee’s sole cost and expense, in accordance with plans and specifications
submitted by Lessee and approved by Lessor as provided in Article VIII of
the Lease.

 

(9)                                  Within
15 days after receipt from Lessor, Lessee will execute and deliver to Lessor
those instruments Lessor may reasonably request to evidence the lease of the
Offer Space and the amendments to the Lease required by this Paragraph 6.

 

(10)                            Lessor
shall not be liable for failure to deliver possession of the Offer Space to
Lessee by reason of holding over by third parties, nor shall such failure
impair the validity of Lessee’s leasing of the Offer Space or extend the term
thereof.

 

(11)                            The
right of Lessee under this Paragraph 6 will not be severed from the Lease or
separately sold, assigned, or transferred, and will expire on the expiration or
earlier termination of this Lease.

 

7.             Lessee Improvements.  Lessee agrees to construct and install
improvements to the westerly 24,000 square feet of the Premises to create
additional office space (the “Tenant Improvements”).  Lessee will begin construction of the Tenant
Improvements as soon as reasonably possible following removal of the
contingencies described in Paragraph 11 and will complete the improvements on
or before January 1, 2008. 
Improvements will be constructed at Lessee’s sole cost and expense
(except as

 

5

 

provided in Paragraph 9) and will be in accordance with Lessor’s review
and approval of plans and specifications as provided in Article VIII of
the Lease.

 

8.             Space Planning Allowance.  Lessor will provide Lessee with a $30,000.00
allowance for space planning, design, and construction drawings for the Tenant
Improvements.  This allowance, provided
Lessee is not in default, will be payable to Lessee upon Lessor’s receipt of
paid invoices and lien waivers from architects, planners, designers, or other
contractors providing space planning, design, or construction drawing services
to Lessee related to the Tenant Improvements.

 

9.             Use of Leftover Improvement
Allowance.  Paragraph 5 of the Third
Amendment to Office/Warehouse Lease provides a $50,000.00 allowance from Lessor
to Lessee for certain improvement work to the Premises.  $6,451.80 of this $50,000.00 allowance
remains and will be applied by Lessor to the Tenant Improvements and will be
paid to Lessee by Lessor upon Lessor’s receipt of paid invoices and lien
waivers from contractors, subcontractors, and material suppliers in connection
with the Tenant Improvements.

 

10.           Construction of Additional Parking.  Lessor, at Lessor’s sole cost and expense,
will design and construct approximately 100 additional parking stalls to be
located on the Property (the “Parking Improvements”).  The Parking Improvements will be for the
exclusive use of Lessee during the term of the Lease.  The approximate location of the Parking
Improvements is as set forth on the sketch attached hereto as Exhibit A and described in the letter
from Welsh Construction dated October 3, 2005 attached hereto as Exhibit B.

 

6

 

11.           Contingencies.  Both the Parking Improvements described in
Paragraph 10 and the Tenant Improvements described in Paragraph 7 will require
approvals from the City of Eden Prairie. 
Notwithstanding any other provision of this Fourth Amendment to the
contrary, this Fourth Amendment and all obligations of Lessor and Lessee
provided herein are subject to successfully obtaining all necessary approvals
for the Parking Improvements and the Tenant Improvements on or before June 30,
2006.  Lessor and Lessee will cooperate
with each other and use their best good faith efforts to promptly apply for,
pursue, and obtain the necessary approvals from the City.  Lessor will be responsible for obtaining
approvals for the Parking Improvements and Lessee will be responsible for
obtaining approvals for the Tenant Improvements.  If all approvals necessary for the Parking
Improvements and the Tenant Improvements have not been obtained by June 30,
2006, the parties may by written agreement extend the contingency to a date
mutually agreed upon or, failing such extension, this Fourth Amendment will
terminate and be of no further force or effect. 
Promptly after obtaining all approvals and the satisfaction of the
contingencies described in this paragraph, Lessor will commence construction of
the Parking Improvements and Lessee will commence construction of the Tenant
Improvements.

 

12.           Effect of Amendment.  Except as amended by this Fourth Amendment,
the Lease will remain in full force and effect.

 

7

 

IN WITNESS
WHEREOF, the parties have executed this Fourth Amendment to Office/Warehouse
Lease as of the day and year first above written.

 

	
   

  	
  LESSOR:

  
	
   

  	
   

  
	
   

  	
  FLYING CLOUD
  BUSINESS CENTRE

  
	
   

  	
  INVESTORS
  LLC

  
	
   

  	
   

  	
   

  
	
   

  	
  By Trumball
  One Investors, LLC,

  
	
   

  	
  a General Partner,

  
	
   

  	
   

  	
   

  
	
   

  	
  By UBS Realty Investors, LLC, Manager

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
  /s/ J.
  Raymond Frazier

  	
   

  
	
   

  	
   

  	
   

  	
  J. Raymond
  Frazier, Director

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  LESSEE:

  
	
   

  	
   

  	
   

  
	
   

  	
  FARGO
  ELECTRONICS, INC.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jeffrey D. Upin

  	
   

  
	
   

  	
   

  	
  Jeffrey D. Upin, Secretary

  	
   

  
						

 

8Exhibit 10.1

 

EMPLOYMENT AGREEMENT

 

This
Employment Agreement (this “Agreement”) is entered into as of this 5th day of January,
2006, by and among Vistula Communications Services, Inc., a Delaware
corporation (the “Employer”), and Ian Cope (the “Employee”).

 

The
parties hereto agree as follows:

 

§1.           Employment.  Upon the terms and subject to the conditions
described in this Agreement, the Employer hereby employs the Employee and the
Employee hereby accepts employment by the Employer.

 

§2.           Term.  Employee’s employment with the Employer
pursuant to this Agreement shall be for the period beginning on the date of
this Agreement (the “Commencement Date”) and continuing until such employment
is terminated as provided for in Section 9 (the “Term”).

 

§3.           Services.  The Employee shall serve as the Employer’s
Chief Operations Officer, reporting to the Employer’s Chief Executive Officer.
The Employee shall devote his full business and professional time, attention,
energy, loyalty, and skill to the Employer’s business, performing such
executive or administrative tasks and having such responsibilities as may be
assigned to him from time to time by the Employer’s Chief Executive Officer.

 

§4.           Compensation.

 

(a)           As
compensation for his services under this Agreement, the Employer shall pay the
Employee a base salary at the annual rate of $140,000 (the “Base Salary”),
payable in monthly installments, in arrears, and in accordance with the
Employer’s general policies and procedures for payment of salaries to its
management personnel. The Employee’s performance shall be reviewed not less
often than annually for the purpose, among others, of considering potential
increases in the Base Salary, but the Employer shall not be obligated to make
any such increases.

 

(b)           In
addition to the compensation described in Section 4(a) above, the Employee
shall be eligible to participate in any bonus or incentive compensation plans
that may be established by the Board from time to time applicable to the
Employee’s services; provided, however, that the payment of any
additional compensation under this Section 4(b) shall be at the sole discretion
of the Board.

 

§5.           Fringe
Benefits and Perquisites; Expense Reimbursement.  During the term of this Agreement, the
Employee shall also be entitled to the following fringe benefits and
perquisites:

 

(a)           Group
health and welfare benefits comparable to those offered generally to the
Employer’s personnel from time to time;

 

 

(b)           Fifteen (15)
days paid vacation during the first year of this Agreement and twenty (20) days
paid vacation during each subsequent year during the Term (prorated for any
partial years during the term of this Agreement); and

 

(c)           Such other
benefits and perquisites as may be offered generally to the Employer’s
management personnel from time to time pursuant to such terms, conditions, and
policies as may be approved by the Board and solely to the extent that the
Employee’s position, tenure, salary, age, health and other qualifications make
him eligible to participate.

 

During the term of his
employment, the Employer shall reimburse the Employee for all reasonable
expenses incurred by him in connection with the performance of his duties
hereunder in accordance with the Employer’s regular reimbursement policies as
in effect from time to time and upon receipt of itemized vouchers or receipts
therefor and such other supporting information as the Employer may reasonably
require.

 

§6.           Option
Grant.  Upon execution of this
Agreement, the Employer shall grant to the Employee an incentive stock option (the
“Option”) to purchase 250,000 shares of the Employer’s common stock, par value
$0.001 per share (“Common Stock”). The Option shall vest as follows: (i) 50,000
of the shares subject to such Option shall be immediately vested and
purchasable thereunder; and (ii) the remainder of the shares subject to such
Option shall vest and become purchasable thereunder in four equal annual
installments of 50,000 shares commencing on the first anniversary of the
Commencement Date and thereafter on each subsequent anniversary of the
Commencement Date until fully vested. The Option will be subject to the terms
and conditions of the Employer’s 2004 Amended and Restated Stock Incentive
Plan.  The exercise price per share of
the Option shall be $1.42.

 

§7.           Confidentiality;
Noncompetition.  The Employee shall
not, directly or indirectly, at any time (whether during the term of this
Agreement or thereafter), disclose any Confidential Information (defined below)
to any person, association, or other entity (other than the Affiliated
Companies, as defined below), or use, or permit or assist any person,
association, or other entity (other than an Affiliated Company) to use, any
Confidential Information, excepting only: (i) Confidential Information which
(A) is then generally available to or obtainable by the public and which did
not become so available or obtainable through the breach of any provision of
this Agreement by the Employee, or (B) is obtained by the Employee on a
non-confidential basis from a source other than an Affiliated Company or any
agent or other representative of an Affiliated Company and such source had the
right to disclose such Confidential Information to the Employee without
violating any legal, contractual, fiduciary, or other obligation; and (ii)
disclosures required by applicable law.

 

Upon termination of his employment by the Employer
(for any reason), the Employee shall immediately deliver to the Employer all
documents and other materials containing any Confidential Information which are
in his possession or under his control.

 

2

 

During the Restricted
Period (defined below), the Employee shall not, directly or indirectly (whether
individually or as a shareholder or other owner, partner, member, director, officer,
employee, consultant, creditor or agent of any person, association, or other
entity):

 

(a)           Enter
into, engage in, or promote or assist (financially or otherwise), directly or
indirectly, any business which competes with the business of any Affiliated
Company (the “Business”), provided that the foregoing shall not preclude the
Employee from owning less than 1% of the outstanding capital stock of any
corporation whose shares are publicly traded on a national securities exchange
or system;

 

(b)           Solicit
or attempt to solicit business in competition with the Business from any person
or entity (in any such case, a “Restricted Company”), or interfere or attempt
to interfere with any relationship of any Affiliated Company with any
Restricted Company;

 

(c)           Induce
or encourage any employee, officer, director, agent, supplier, or independent
contractor of any Affiliated Company to terminate its relationship with any
such Affiliated Company, or otherwise interfere or attempt to interfere in any
way with any Affiliated Company’s relationships with its employees, officers,
directors, agents, suppliers, independent contractors, or others;

 

(d)           Employ
or engage any person who, at any time within the one-year period immediately
preceding such employment or engagement, was an employee, officer, director, or
agent of any Affiliated Company; or

 

(e)           Make
any statement (oral or written) or take any other action which would tend to
disparage or diminish the reputation of any Affiliated Company.

 

For purposes of this
Agreement:

 

(i) “Affiliated
Company” shall include the Employer and all subsidiaries or affiliates of the
Employer;

 

(ii) “Confidential
Information” shall mean all trade secrets, proprietary data, and other
confidential information of any Affiliated Company, including without
limitation financial information, information relating to business operations,
services, promotional practices, suppliers, employees, independent contractors,
or other parties, and any information which any Affiliated Company is obligated
to treat as confidential pursuant to any course of dealing or any agreement to
which it is a party or otherwise bound;

 

3

 

(iii) the “Restricted
Period” shall mean the period beginning on the date hereof and ending on the
first anniversary of the date (the “Termination Date”) of termination (for any
reason) of Employee’s employment with the Employer (whether pursuant to this
Agreement or otherwise); and

 

The Employee acknowledges that (1) the provisions of
this section are fundamental and essential for the protection of the Employer’s
legitimate business and proprietary interests, (2) such provisions are
reasonable and appropriate in all respects, and (3) in the event of any
violation by the Employee of any of such provisions, the Employer would suffer
irreparable harm and its remedies at law would be inadequate.  In the event of any violation or attempted
violation of such provisions by the Employee, the Employer shall be entitled to
a temporary restraining order, temporary and permanent injunctions, specific
performance, and other equitable relief, without any showing of irreparable
harm or damage or the posting of any bond, in addition to any other rights or
remedies which may then be available to the Employer.

 

§8.           Developments.

 

(a)           The
Employee agrees that all originals and all copies of all manuscripts, drawings,
prints, manuals, diagrams, letters, notes, notebooks, reports, models, and all
other materials containing, representing, evidencing, recording, or constituting
any Confidential Information (as defined in Section 7 hereof) however and
whenever produced (whether by Employee or others), shall be the sole property
of the Employer.

 

(b)           The
Employee agrees that all Confidential Information and all other discoveries,
inventions, ideas, concepts, research and other information, processes,
products, methods and improvements, or parts thereof conceived, developed, or
otherwise made by the Employee alone or jointly with others and in any way
relating to any Affiliated Company’s present or proposed products, programs or
services or to tasks assigned to the Employee during the course of the Employee’s
employment, whether or not patentable or subject to copyright protection and
whether or not reduced to tangible form or reduced to practice during the
period of the Employee’s employment with the Employer, whether or not made
during the Employee’s regular working hours, and whether or not disclosed by
the Employee to the Employer (hereinafter referred to as “Developments”),
together with all products or services which embody or emulate such
Developments, shall be the sole property of the Employer.  The Employee agrees to, and hereby does
assign to the Employer, all the Employee’s right, title and interest throughout
the world in and to all Developments and to anything tangible which evidences,
incorporates, constitutes, represents or records any such Developments.  The Employee agrees that all such
Developments shall constitute works made for hire under the copyright laws of
the United States and hereby assigns and, to the extent any such assignment
cannot be made at present, the Employee hereby agrees to assign to the Employer
all copyrights, patents, and other proprietary rights he may have in any such
Developments, together with the right to file for and/or own wholly without
restriction United States and foreign patents, trademarks, and copyrights.  The Employee agrees to waive, and hereby
waives, all moral rights or proprietary rights in or to any

 

4

 

Developments and, to the
extent that such rights may not be waived, agrees not to assert such rights
against any Affiliated Company or its licensees, successors or assigns.

 

§9.           Termination.  The Employee’s employment with the Employer
shall terminate automatically upon the death of the Employee and may be
terminated by the Employer, without any further obligation on the part of the
Employer (except as provided in clause (c) below), immediately upon notice to
the Employee under any of the following circumstances:

 

(a)           At
any time for Cause (defined below);

 

(b)           At
any time when the Employee is under a Long-Term Disability (defined below); or

 

(c)           At
any time without Cause; provided, however, that if the Employer terminates the
Employee’s employment pursuant to this clause (c) and no other basis for
termination exists under this Agreement, then the Employee shall be entitled to
severance payments in an aggregate amount equal to the pro rata monthly portion
of Employee’s Base Salary for a period equal to three (3) months (any such
severance payments shall be payable periodically in the same manner as the Base
Salary is payable under §4 of this Agreement) and the noncompetition
obligations of the Employee under clauses (a) and (b) of the third paragraph of
Section 7 shall cease.

 

For purposes of this Agreement:

 

(i)            “Cause”
shall mean:

 

(A) any act
constituting (1) a felony under the federal laws of the United States, the laws
of any state, or any other applicable law, regardless of whether a conviction
has been obtained, (2) fraud, embezzlement, misappropriation of assets, willful
misfeasance, or dishonesty, or (3) any other criminal conduct which in any way
adversely affects the reputation, goodwill, or business position of the Employer
or any other Affiliated Company; or

 

(B) the failure of
the Employee: (1) to perform any obligation required to be performed by the
Employee under this Agreement, or (2) to perform his duties in accordance with
the policies, programs, budgets, procedures, and directions established from
time to time by the Employer including, without limitation, the Company’s code
of ethics (any such failure, a “Performance Failure”).

 

(ii)           “Long-Term
Disability” shall mean that, because of physical or mental incapacity, it is
more likely than not that the Employee will be unable, within 180 days after
such incapacity commenced, to perform the essential functions of his position
with the Employer, with or without reasonable accommodation.  In the event of any disagreement about
whether or when the Employee is under a Long-Term Disability, the question
shall be determined:  (A) by a physician
selected by agreement between the Employee and the Employer if such a physician
is selected within 10 days after either of them requests the other so to agree;
or, if not, (B) by two

 

5

 

physicians, the first of whom shall be selected by the Employee and the
second of whom shall be selected by the Employer or, if the Employee fails to
make a selection within 10 days after being requested to do so by the Employer,
the second physician shall be selected by the first physician; or, if the two
physicians fail to agree, (C) by a third physician selected by the first two
physicians.  The Employee shall submit to
all reasonable examinations requested by any such physicians.

 

§10.         No
Conflict. The Employee represents and warrants that Employee is not subject
to any agreement, order, judgment or decree of any kind which would prevent
Employee from entering into this Agreement or performing fully the Employee’s
obligations hereunder.  Employee
acknowledges being instructed:  (a) that
it is the Employer’s policy not to seek access to or make use of trade secrets
or confidential business information belonging to other persons or
organizations, including but not limited to competitors or former employers;
and (b) that the Employee should not, under any circumstances, reveal to the
Employer or any Affiliated Company or make use of trade secrets or confidential
business information belonging to any other person or organization.  The Employee represents and warrants that the
Employee has not violated and shall not violate such instructions.

 

§11.         Remedies.  All rights and remedies of any party under
this Agreement are cumulative and in addition to all other rights and remedies
which may be available to that party from time to time, whether under any other
agreement, at law, or in equity.

 

§12.         Survival.  The termination of the Employee’s employment
with the Employer (for any reason) shall not relieve any party of any of that
party’s obligations under this Agreement existing at, arising as a result of,
or relating to acts or omissions occurring prior to, such termination.  Without limiting the generality of the preceding
sentence, in no event shall the termination of such employment modify or affect
any obligations of the Employee or rights of the Employer under §7 and §8 of
this Agreement, all of which shall survive the termination of such employment.

 

§13.         Notices. All
notices and other communications under this Agreement to any party shall be in
writing and shall be deemed given when delivered personally, telecopied (which
is confirmed) to that party at the telecopy number for that party set forth
below, mailed by certified mail (return receipt requested) to that party at the
address for that party (or at such other address for such party as such party
shall have specified in notice to the other party) or delivered to Federal
Express, UPS, or any similar express courier service for delivery to that party
at that address:

 

	
  (a)

  	
   

  	
  If to the Employer:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Vistula Communications
  Services, Inc.

  
	
   

  	
   

  	
  Suite 801, 405
  Park Avenue

  
	
   

  	
   

  	
  New York, NY 10022

  
	
   

  	
   

  	
  Telecopy No.:
  (212) 832-7563

  
	
   

  	
   

  	
  Attention: Chief
  Executive Officer

  

 

6

 

	
   

  	
   

  	
  with a copy to:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Foley Hoag LLP

  
	
   

  	
   

  	
  155 Seaport Boulevard

  
	
   

  	
   

  	
  Boston, MA 02210

  
	
   

  	
   

  	
  Attention: Paul Bork,
  Esq.

  
	
   

  	
   

  	
  Telecopy No.: (617)
  832-7000

  
	
   

  	
   

  	
   

  
	
  (b)

  	
   

  	
  If to the Employee:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Ian Cope

  
	
   

  	
   

  	
  1039 Hollywood AV

  
	
   

  	
   

  	
  Bronx, NY 10465

  
	
   

  	
   

  	
  Telecopy No.: (718)
  931-7616

  

 

§14.         Severability.  The intention of the parties is to comply
fully with all rules, laws, and public policies to the extent possible.  If and to the extent that any court of
competent jurisdiction is unable so to construe any provision of this Agreement
and holds that provision to be invalid, such invalidity shall not affect the
remaining provisions of this Agreement, which shall remain in full force and
effect.  With respect to any provision in
this Agreement finally determined by such a court to be invalid or
unenforceable, such court shall have jurisdiction to reform this Agreement to
the extent necessary to make such provision valid and enforceable, and, as
reformed, such provision shall be binding on the parties.

 

§15.         Non-Waiver.  No failure by any party to insist upon strict
compliance with any term of this Agreement, to exercise any option, to enforce
any right, or to seek any remedy upon any default of another party shall
affect, or constitute a waiver of, the other party’s right to insist upon such
strict compliance, exercise that option, enforce that right, or seek that
remedy with respect to that default or any prior, contemporaneous, or
subsequent default.  No custom or
practice of the parties at variance with any provision of this Agreement shall
affect, or constitute a waiver of, any party’s right to demand strict
compliance with all provisions of this Agreement.

 

§16.         Complete
Agreement.  This Agreement and all
documents referred to in this Agreement, all of which are hereby incorporated
herein by reference, contain the entire Agreement between the parties and
supersede all other agreements and understandings between the parties with
respect to the subject matter of this Agreement.  No alterations, additions, or other changes
to this Agreement shall be made or be binding unless made in writing and signed
by both parties.

 

§17.         Governing
Law.  This Agreement shall be
governed by and construed in accordance with the laws of the State of New York
without regard to principles of conflicts of law.  The Employee hereby consents to the exclusive
jurisdiction of the courts of the State of New York in the event of any dispute
arising hereunder.

 

7

 

§18.         Captions.  The captions of the various sections of this
Agreement are not part of the context of this Agreement, are only guides to
assist in locating those sections, and shall be ignored in construing this
Agreement.

 

§19.         Genders
and Numbers.  Where permitted by the
context, each pronoun used in this Agreement includes the same pronoun in other
genders and numbers, and each noun used in this Agreement includes the same
noun in other numbers.

 

§20.         Successors.  This Agreement shall be personal to the Employee
and no rights or obligations of the Employee under this Agreement may be
assigned by the Employee to any third party. 
Any assignment or attempted assignment by the Employee in violation of
the preceding sentence shall be null and void. 
Subject to the foregoing, this Agreement shall be binding upon, inure to
the benefit of, and be enforceable by and against the successors and assigns of
each party.

 

[Remainder
of page intentionally left blank]

 

8

 

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

 

 

	
  Vistula
  Communications Services, Inc.

  	
  Employee

  
	
   

  	
   

  
	
   

  	
   

  
	
  By

  	
  /s/ George R. Vaughn

  	
   

  	
  /s/ Ian Cope

  	
   

  
	
  Name:

  	
  George R. Vaughn

  	
  Ian Cope

  
	
  Title:

  	
  Chief Financial Officer

  	
   

  
						

 

9

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