Document:

ex10-4.htm

Exhibit 10.4

Form of Continuing Security Agreement

Dated as of May 14, 2013

Grant of Security Interest. Xhibit Corp. (whether one or more, the "Debtor", individually and collectively if more than one) grants to JPMorgan Chase Bank, N.A., whose address is 201 N. Central Ave, 21st Floor, AZl-1178, Phoenix, AZ 85004 (together with its successors and assigns, the "Bank") a continuing security interest in, pledges and assigns to the Bank all of the Collateral (as hereinafter defined) owned by the Debtor, all of the collateral in which the Debtor has rights or power to transfer rights and all Collateral in which the Debtor later acquires ownership, other rights or rights or power to transfer rights to secure the payment and performance of the Liabilities.

Borrower. "Borrower" means SkyMall, LLC.

"Liabilities" means all obligations, indebtedness  and liabilities of the Borrower whether individual, joint and several, absolute or contingent, direct or indirect, liquidated or unliquidated, now or hereafter existing in favor of the Bank, including without limitation, all liabilities, all interest, costs and fees arising under or from any note, open account, overdraft, letter of credit application, endorsement, surety agreement, guaranty, credit card, lease, Rate Management Transaction, acceptance, foreign exchange contract or depository service contract, whether payable to the Bank or to a third party and subsequently acquired by the Bank, any monetary obligations (including interest) incurred or accrued during the pendency of any bankruptcy, insolvency, receivership or other similar proceedings, regardless of whether allowed or allowable in such proceeding, and all renewals, extensions, modifications, consolidations, rearrangements, restatements, replacements or substitutions of any of the foregoing. "Rate Management Transaction" means any transaction (including an agreement with respect  thereto) that is a rate swap, basis swap, forward rate transaction, commodity swap, commodity option, equity or equity index swap, equity or equity index option, bond option, interest rate option, foreign exchange transaction, cap transaction, floor transaction, collar transaction, forward transaction, currency swap transaction, cross-currency rate swap transaction, currency option, derivative transaction or any other similar transaction (including any option with respect to any of these transactions) or any combination thereof, whether linked to one or more interest rates, foreign currencies, commodity prices, equity prices or other financial measures. The Debtor and the Bank specifically contemplate that Liabilities include indebtedness hereafter incurred by the Borrower to the Bank.

The term "Collateral" means all of the Debtor's "accounts"; "chattel paper"; "deposit accounts" and other payment obligations of financial institutions (including the Bank); "documents"; "equipment", including any documents and certificates of title issued with respect to any of the equipment; "general intangibles" and any right to a refund of taxes paid at any time to any governmental entity; "instruments"; "inventory", including any documents and certificates of title issued with respect to any of the inventory; "investment property"; "financial assets"; "letter of credit rights"; all as defined in the UCC, whether now owned or hereafter acquired, whether now existing or hereafter arising, and wherever located. In addition, the term "Collateral" includes all "proceeds", "products" and "supporting obligations" (as such terms are defined in the UCC) of the Collateral, including but not limited to all stock rights, subscription rights, dividends, stock dividends, stock splits, or liquidating dividends, and all cash, accounts, chattel paper, "instruments," "investment property," "financial assets," and "general intangibles" (as such terms are defined in the UCC) arising from the sale, rent, lease, casualty Joss or other disposition of the Collateral, and any Collateral returned to, repossessed by or stopped in transit by the Debtor, and all insurance claims relating to any of the Collateral. The term "Collateral" further includes all of the Debtor's right, title and interest in and to all books, records and data relating to the Collateral, regardless of the form of media containing such information or data, and all software necessary or desirable to use any of the Collateral or to access, retrieve, or process any of such information or data. Where the Collateral is in the possession of the Bank or the Bank's agent, the Debtor agrees to deliver to the Bank any property that represents an increase in the Collateral or profits or proceeds of the Collateral.

The term "UCC" means the Uniform Commercial Code of Arizona, as in effect from time to time.

Representations, Warranties and Covenants. The Debtor represents, warrants, and covenants to the Bank that each of the following is true and will remain true until termination of this agreement and payment in full of all Liabilities and agrees with the Bank that:

  

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1. At its own expense, it shall maintain comprehensive casualty insurance on the Collateral against such risks, in such amounts, with such deductibles and with such companies as may be satisfactory to the Bank. Each insurance policy on the Collateral shall contain a lender's loss payable endorsement satisfactory to the Bank and a prohibition against cancellation or amendment of the policy or removal of the Bank as loss payee without at least thirty (30) days' prior written notice to the Bank. In all events, the amounts of such insurance coverages on the Collateral shall be in such minimum amounts that the Debtor will not be deemed a co-insurer. The policies on the Collateral, or certificates evidencing them, shall, if the Bank so requests, be deposited with the Bank.

 

2. It shall permit the Bank, at the Debtor's expense, to inspect and examine the Collateral  and to check and test the same as to quality, quantity, value, and condition, and will provide any information that the Bank may reasonably request and will permit the Bank or the Bank's agents to inspect and copy its books, records and data, at any time during normal business hours.

 

3. It shall maintain the Collateral in good repair; pay promptly when due all taxes and assessments upon the Collateral or for the use or operation of the Collateral; use the Collateral in accordance with law and in compliance with any policy of insurance thereon; and exhibit the Collateral to the Bank on demand.

 

4. Until the Bank gives notice to the Debtor to the contrary or until the Debtor is in default, it may use the funds collected in its business. Upon notice from the Bank or upon default, the Debtor agrees that all sums of money it receives on account of or in payment or settlement of the accounts, chattel paper, certificated securities, negotiable certificates of deposit, documents, general intangibles and instruments shall be held by it as trustee for the Bank without commingling with any of the Debtor's other funds, and shall immediately be delivered to the Bank with endorsement to the Bank's order of any check or similar instrument. It is agreed that, at any time the Bank so elects, the Bank shall be entitled, in its own name or in the name of the Debtor or otherwise, but at the expense and cost of the Debtor, to collect, demand, receive, sue for or compromise any and all accounts, chattel paper, certificated securities, negotiable certificates of deposit, documents, general intangibles, and instruments, and to give good and sufficient releases, to endorse any checks, drafts or other orders for the payment of money payable to the Debtor and, in the Bank's discretion, to file any claims or take any action or proceeding which the Bank may deem necessary or advisable. It is expressly understood and agreed, however, that the Bank shall not be required or obligated in any manner to make any demand or to make any inquiry as to the nature or sufficiency of any payment received by it or to present or file any claim or take any other action to collect or enforce the payment of any amounts which may have been assigned to the Bank or to which the Bank may be entitled at any time or times. All notices required in this paragraph will be immediately effective when sent. Such notices need not be given prior to the Bank's taking action. The Debtor irrevocably appoints the Bank or the Bank's designee as the Debtor's attorney-in-fact to do all things with reference to the Collateral as provided for in this agreement including without limitation (1) to sign the Debtor's name on any invoice or bill of lading relating to any Collateral, on assignments and verifications of account and on notices to the Debtor's customers, and (2) to do all things necessary to carry out this agreement or to perform any of the Debtor's obligations under this agreement, (3) to notify the post office authorities to change the Debtor's mailing address to one designated by the Bank, and (4) to receive, open and dispose of mail addressed to the Debtor. The Debtor ratifies and approves all acts of the Bank as attorney-in-fact. This power of attorney appointment is irrevocable, coupled with an interest, and shall survive the death or disability of Debtor. The Bank shall not be liable for any act or omission, nor any error of judgment or mistake of fact or law, but only for its gross negligence or willful misconduct. This power being coupled with an interest is irrevocable until all of the Liabilities have been fully satisfied. Immediately upon its receipt of any Collateral evidenced by an agreement, "instrument," "chattel paper," certificated "security" or "document" (as such terms are defined in the UCC) (collectively, "Special Collateral"), it shall mark the Special Collateral to show that it is subject to the Bank's security interest, pledge and assignment and shall deliver the original to the Bank together with appropriate endorsements and other specific evidence of assignment or transfer in form and substance satisfactory to the Bank.

 

5. It will not, sell, lease, license or offer to sell, lease, license, grant as security to anyone other than the Bank, or otherwise transfer the Collateral or any rights in or to the Collateral, without the written consent of the Bank, except for the sale of inventory in the ordinary course of business; or change the location of the Collateral from the locations of the Collateral disclosed to the Bank, without providing at least ten (10) days' prior written notice to the Bank.

 

6. No financing statement or similar record covering all or any part of the Collateral or any proceeds is on file in any public office, unless the Bank has approved that filing.

  

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7. Without notice or demand and without affecting the Debtor's obligations hereunder, from time to time, the Bank is authorized to: (a) renew, modify, compromise, rearrange, restate, consolidate, extend, accelerate or otherwise change the time for payment of, or otherwise change the terms of the Liabilities or any part thereof, including increasing or decreasing the rate of interest thereon; (b) release, either in whole or in part, the Borrower, and release, either in whole or in part, substitute or add any one or more sureties, endorsers, or guarantors; (c) take and hold other collateral for the payment of the Liabilities, and enforce, exchange, substitute, subordinate, impair, waive  or release any such collateral; (d) proceed against the Collateral or any other collateral for the Liabilities and direct the order or manner of sale as the Bank in its discretion may determine; (e) take any action against the Borrower, the Collateral or any other collateral for the Liabilities, or any other person liable for any of the Liabilities, and (f) apply any and all moneys received by the Bank, or recoveries from the Collateral or any other collateral for the Liabilities, in such order or manner as the Bank in its discretion may determine, including but not limited to applying them against obligations, indebtedness or liabilities which are not secured by this agreement.

 

8. Its obligations hereunder shall not be released, diminished or affected by (a) any act or omission of the Bank, (b) the voluntary or involuntary liquidation, sale or other disposition of all or substantially all of the assets of the Borrower, or any receivership, insolvency, bankruptcy, reorganization, or other similar proceedings affecting the Borrower or any of its assets or any other obligor on the Liabilities or that obligor's assets, (c) any change in the composition or structure of the Borrower or any other obligor on the Liabilities, including a merger or consolidation with any other person or entity, or (d) any payments made upon the Liabilities.

 

9. It expressly consents to any impairment of the Collateral or any other collateral for the Liabilities, including, but not limited to, failure to perfect a security interest in such collateral and any release, either in whole or in part, of the Collateral or any other collateral for the Liabilities. Any such impairment or release shall not affect the Debtor's obligations hereunder.

 

10. It waives (a) to the extent not prohibited by applicable law, all rights and benefits under any laws or statutes regarding sureties, as may be amended, (b) any right the Debtor may have to receive notice of the following matters before the Bank enforces any of its rights: (i) the Bank's acceptance of this agreement, (ii) incurrence or acquisition or material alteration of any Liabilities, any credit that the Bank extends to the Borrower, (iii) the Borrower's default, (iv) any demand, diligence, presentment, dishonor and protest, (v) any action that the Bank takes regarding the Borrower, anyone else, any other collateral for the Liabilities, or any of the Liabilities, which it might be entitled to by law or under any other agreement, (vi} any adverse facts that would affect the Debtor's risk (c} any right it may have to require the Bank to proceed against the Borrower, any guarantor or other obligor on the Liabilities, the Collateral or any other collateral for the Liabilities, or pursue any remedy in the Bank's power to pursue, or to exercise any right of setoff, (d) any defense based on any claim that the Debtor's obligations exceed or are more burdensome than those of the Borrower, (e) the benefit of any statute of limitations affecting the Debtor's obligations hereunder or the enforcement hereof, (f) any defense arising by reason of any disability or other defense of the Borrower or by reason of the cessation from any cause whatsoever (other than payment in full) of the obligation of the Borrower for the Liabilities, (g) any defense based on or arising out of any defense that the Borrower may have to the payment or performance of the Liabilities or any portion thereof, (h) any defense based on or arising out of the Bank's negligent administration of the Liabilities, and (i) and agrees not to enforce any rights of subrogation, contribution, reimbursement, exoneration or indemnification that it may have against the Borrower, any person or entity liable on the Liabilities, or the Collateral, until the Borrower and the Debtor have fully performed all of their obligations to the Bank, even if those obligations are not covered by this agreement. The Bank may waive or delay enforcing any of its rights without losing them. Any waiver affects only the specific terms and time period stated in the waiver.

 

11. The Debtor has (a) without reliance on the Bank or any information received from the Bank and based upon the records and information the Debtor deems appropriate, made an independent investigation of the Borrower, the Borrower's business, assets, operations, prospects and condition, financial or otherwise, and any circumstances that may bear upon those transactions, the Borrower or the obligations, liabilities and risks undertaken pursuant to this agreement; (b) adequate means to obtain from the Borrower on a continuing basis information concerning the Borrower and the Bank has no duty to provide any information concerning the Borrower or other obligor on the Liabilities to the Debtor (c) full and complete access to the Borrower and any and all records relating to any Liabilities now or in the future owing by the Borrower; (d) not relied and will not rely upon any representations or warranties of the Bank not embodied in this agreement or any acts taken by the Bank prior to or after the execution or other authentication and delivery of this agreement (including but not limited to any review by the Bank of the business, assets, operations, prospects and condition, financial or otherwise, of the Borrower); and (e) determined that the Debtor will receive benefit, directly or indirectly, and has or will receive fair and reasonably equivalent value, for the execution and delivery of this agreement and the rights provided to the Bank. By entering into this agreement, the Debtor does not intend: (i) to incur or believe that the Debtor will incur debts that would be beyond the Debtor's ability to pay as those debts mature; or (ii) to hinder, delay or defraud any creditor of the Debtor. The Debtor is neither engaged in nor about to engage in any business or transaction for which the remaining assets of the Debtor are unreasonably small in relation to the business or transaction, and any property remaining with the Debtor after the execution or other authentication of this agreement is not unreasonably small capital.

 

  

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12. The Debtor agrees to fully cooperate with the Bank and not to delay, impede or otherwise interfere with the efforts of the Bank to secure payment from the assets which secure the Liabilities including actions, proceedings, motions, orders, agreements or other matters relating to relief from automatic stay, abandonment of property, use of cash collateral and sale of the Bank's collateral free and clear of all liens.

 

13. Its principal residence or chief executive office is at the address shown above.

 

14. Its name as it appears in this agreement is its exact name as it appears in its organizational documents, as amended, including any trust documents; and it will not without the Bank's prior written consent, change its name, its business organization, the jurisdiction under which it is formed or organized, or its chief executive office, or any additional places of business.

 

15. The execution and delivery of this agreement and the performance of the obligations it imposes do not violate any law, do not conflict with any agreement by which it is bound, and do not require the consent or approval of any governmental authority or any third party.

 

16. This agreement is a valid and binding agreement, enforceable according to its terms.

 

17. It is duly organized, validly existing and in good standing under the laws of the state where it is organized and in good standing in each state where it is doing business; and the execution and delivery of this agreement and the performance of the obligations it imposes (i) are within its powers and have been duly authorized by all necessary action of its governing body; and (ii) do not contravene the terms of its articles of incorporation or organization, its by-laws, or any agreement or document governing its affairs.

 

18. When the Collateral is located at, used in or attached to a facility leased by the Debtor, the Debtor will, at the request of the Bank, obtain from the lessor a consent to the granting of this security interest and a release or subordination of the lessor's interest in any of the Collateral, in form and substance satisfactory to the Bank.

 

19. Without limiting any foregoing waiver, consent or agreement, the Debtor further waives any and all benefits under Arizona Revised Statutes Section 12-1641 through 12-1646, inclusive, and Rule l7(f) of the Arizona Rules of Civil Procedure, including any revision or replacement of such statutes or rules hereafter enacted.

Reinstatement. The Debtor  agrees that to the extent any payment or transfer is received by the Bank in connection with the Liabilities, and all or any part of such payment or transfer is subsequently invalidated, declared to be fraudulent or preferential, set aside or required to be transferred or repaid by the Bank or paid over to a trustee, receiver or any other person or entity, whether under any bankruptcy act or otherwise (any of those payments or transfers is hereinafter referred to as a "Preferential Payment"), then this agreement shall continue to be effective or shall be reinstated, as the case may he, even if all Liabilities have been paid in full, and whether or not the Bank is in possession of this agreement or whether agreement has been marked paid, cancelled, released or returned to the Borrower or the Debtor, and, to the extent of the payment or repayment or other transfer by the Bank, the Liabilities or part intended to be satisfied by the Preferential Payment shall be revived and continued in full force and effect as if the Preferential Payment had not been made. If this agreement must be reinstated, the Debtor agrees to execute and deliver to the Bank any new security agreements and financing statements, if necessary or if requested by the Bank, in form and substance acceptable to the Bank, covering the Collateral. The obligations of the Debtor under this section shall survive the termination of this agreement.

 

  

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Remedies Regarding Collateral. The Bank shall have the right to require the Debtor to assemble the Collateral and make it available to the Bank at a place to be designated by the Bank which is reasonably convenient to both parties, the right to take possession of the Collateral with or without demand and with or without process of law, and the right to sell and dispose of it and distribute the proceeds according to law. The Debtor agrees that upon default the Bank may dispose of any of the Collateral in its then present condition, that the Bank has no duty to repair or clean the Collateral prior to sale, and that the disposal of the Collateral in its present condition or without repair or clean-up shall not affect the commercial reasonableness of such sale or disposition. The Bank's compliance with any applicable state or federal Jaw requirements in connection with the disposition of the Collateral will not  adversely affect the commercial reasonableness of any sale of the Collateral. The Bank may disclaim warranties of title, possession, quiet enjoyment, and the like, and the Debtor agrees that any such action shall not affect the commercial reasonableness of the sale. In connection with the right of the Bank to take possession of the Collateral, the Bank may take possession of any other items of property in or on the Collateral at the time of taking possession, and hold them for the Debtor without liability on the part of the Bank. The Debtor expressly agrees that the Bank may enter upon the premises where the Collateral is believed to be located without any obligation of payment to the Debtor, and that the Bank may, without cost, use any and all of the Debtor's "equipment" (as defined in the UCC) in the manufacturing or processing of any "inventory" (as defined in the UCC) or in growing, raising, cultivating, caring for, harvesting, loading and transporting of any of the Collateral that constitutes "farm products" (as defined in the UCC). If there is any statutory requirement for notice, that requirement shall be met if the Bank sends notice to the Debtor at least ten (10) days prior to the date of sale, disposition or other event giving rise to the required notice, and such notice shall be deemed commercially reasonable. Without limiting any other remedy, the Debtor is liable for any deficiency remaining after disposition of the Collateral. The Bank is authorized to cause all or any part of the Collateral to be transferred to or registered in its name or in the name of any other person or business entity, with or without designating the capacity of that nominee. At its option the Bank may, but shall be under no duty or obligation to, discharge taxes, liens, security interests or other encumbrances at any time levied or placed on the Collateral, pay for insurance on the Collateral, and pay for the maintenance and preservation of the Collateral, and the Debtor agrees to reimburse the Bank on demand for any such payment made or expense incurred by the Bank with interest at the highest rate at which interest may accrue under any of the instruments evidencing the Liabilities. The Debtor authorizes the Bank to endorse on the Debtor's behalf and to negotiate drafts reflecting proceeds of insurance of the Collateral, provided that the Bank shall remit to the Debtor such surplus, if any, as remains after the proceeds have been applied, at the Bank's option, to the satisfaction of all of the Liabilities (in such order of application as the Bank may elect) or to the establishment of a cash collateral account for the Liabilities. The Bank shall have the right now, and at any time in the future in its sole and absolute discretion, without notice to the Debtor to (a) prepare, file and sign the Debtor's name on any proof of claim in bankruptcy or similar document against any owner of the Collateral and (b) prepare, file and sign the Debtor's name on any notice of lien, assignment or satisfaction of lien or similar document in connection with the Collateral.

 

Miscellaneous. A carbon, photographic or other reproduction of this agreement is sufficient as, and can be filed as, a financing statement or similar record. The Debtor authorizes the Bank to file one or more financing statements or similar records covering the Collateral or such lesser amount of assets as the Bank may determine, or the Bank may, at its option, file financing statements or similar records containing any collateral description which reasonably describes the Collateral, and the Debtor will pay the cost of filing them in all public offices where filing is deemed by the Bank to be necessary or desirable. In addition, the Debtor shall execute and deliver, or cause to be executed and delivered, such other documents as the Bank may from time to time request to perfect or to further evidence the pledge, security interest and assignment created in the Collateral by this agreement. If any provision of this agreement cannot be enforced, the remaining portions of this agreement shall continue in effect. No delay on the part of the Bank in the exercise of any right or remedy waives that right or remedy, no single or partial exercise by the Bank of any right or remedy precludes any other exercise of it or the exercise of any other right or remedy, and no waiver or indulgence by the Bank of any default is effective unless it is in writing and signed by the Bank, nor does a waiver on one occasion waive that right on any future occasion. All obligations of the Debtor set forth in this agreement shall bind the Debtor's heirs, executors, administrators, successors and assigns. The provisions of this agreement are severable, and if any one or more of the provisions of this agreement are held to be invalid, illegal or unenforceable in any jurisdiction, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired; and the invalidity, illegality or unenforceability in one jurisdiction shall not affect the validity, legality or enforceability of such provision(s) in any other jurisdiction. Time is of the essence under this agreement and in the performance of every term, covenant and obligation contained herein.

Indemnification. The Debtor agrees to indemnify, defend and hold the Bank, its parent companies, subsidiaries, affiliates, their respective successors and assigns and each of their respective shareholders, directors, officers, employees and agents (collectively the "Indemnified Persons") harmless from and against any and all loss, liability, obligation, damage, penalty, judgment, claim, deficiency, expense, interest, penalties, attorneys' fees (including the fees and expenses of attorneys engaged by the Indemnified Person at the Indemnified Person's reasonable discretion) and amounts paid in settlement ("Claims") to which any Indemnified Person may become subject arising out of or relating to this agreement or the Collateral, except to the limited extent that the Claims are proximately caused by the Indemnified Person's gross negligence or willful misconduct. The indemnification provided for in this paragraph shall survive the termination of this agreement and shall not be affected by the presence, absence or amount of or the payment or nonpayment of any claim under, any insurance.

  

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Governing Law and Venue. This agreement shall be governed by and construed in accordance with the laws of the State of Arizona (without giving effect to its laws of conflicts), and to the extent applicable, federal law, except to the extent that the laws regarding the perfection and priority of security interests of the state(s) in which either the Debtor or any property securing the Liabilities is located, are applicable. The Debtor agrees that any legal action or proceeding with respect to any of its obligations under this agreement may be brought by the Bank in any state or federal court located in the State of Arizona, as the Bank in its sole discretion may elect. By the execution and delivery of this agreement, the Debtor submits to and accepts, for itself and in respect of its property, generally and unconditionally, the non-exclusive jurisdiction of those courts. The Debtor waives any claim that the State of Arizona is not a convenient forum or the proper venue for any such suit, action or proceeding.

WAIVER OF SPECIAL DAMAGES. THE DEBTOR WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT THE UNDERSIGNED MAY HAVE TO CLAIM OR RECOVER FROM THE BANK IN ANY LEGAL ACTION OR PROCEEDING ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES.

JURY WAIVER. TO THE MAXIMUM EXTENT NOT PROHIBITED BY APPLICABLE LAW, THE DEBTOR AND THE BANK (BY ITS ACCEPTANCE HEREOF) HEREBY VOLUNTARILY, KNOWINGLY, IRREVOCABLY AND UNCONDITIONALLY WAIVE ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE (WHETHER BASED ON CONTRACT, TORT, OR OTHERWISE) BETWEEN OR AMONG THE DEBTOR AND THE BANK ARISING OUT OF OR IN ANY WAY RELATED TO THIS DOCUMENT. THIS PROVISION IS A MATERIAL INDUCEMENT TO THE BANK TO PROVIDE THE FINANCING DESCRIBED HEREIN.

	  	
Debtor:ex10-5.htm

Exhibit 10.5

 

EMPLOYMENT AGREEMENT

    This Employment Agreement (the “Agreement”), between Skymall Holding Corp., a Delaware corporation (the “Company”), and Kevin Weiss (“Employee”), is entered into effective as of April 18, 2013 (the “Effective Date”).

 

Recitals:

    The Company desires to retain Employee and Employee desires to be employed by the Company under the terms and subject to the conditions set forth below.

Agreements:

    In consideration of the mutual promises and covenants contained in this Agreement, the Company and Employee agree as follows:

       1. Term. The term of this Agreement shall begin on the Effective Date and shall expire on the fifth anniversary of this Agreement, unless sooner terminated by the Employee or the Company as provided herein (the “Term”).

 

       2.  Employment.

 

          (a) Position and Duties. The Company agrees to employ and engage the services of Employee during the Term as the Chief Executive Officer (CEO) for the Company, reporting directly to its board of directors (the “Board”). Employee agrees to serve the Company in such capacity during the Term. Employee’s duties and responsibilities shall be those typical of a CEO, including (i) developing and setting the Company’s strategy, (ii) overseeing the Company’s operations and activities, (iii) working with the Board and senior management to develop and set the Company’s budget, (iv) overall management of the Company and (v) such other duties and responsibilities as may be assigned by the Board. All senior management employees of the Company shall report directly to Employee, or to such other employees of the Company as he designates. In addition, during the Term, Employee shall serve as a member of the board of directors of SkyMall, Inc. (it being understood that, in such capacity, Employee will enjoy the contract rights to indemnification provided for in Article Sixth of the Certificate of Incorporation of SkyMall, Inc.).

          (b) Devotion of Efforts. Employee shall devote his full business time to the business and affairs of the Company, using his reasonable best efforts to promote the interests of the Company, and shall perform faithfully and efficiently the responsibilities assigned to him in accordance with this Agreement. This Section 2(b) shall not prohibit Employee from engaging in personal, investment, board or charitable activities, if such activities do not materially conflict with the business of the Company or materially interfere with Employee’s duties under this Agreement. Employee shall notify the Company in writing from time to time of any board, officer or other significant positions which he holds in connection with any such personal, investment, board or charitable activities. Such positions as of the Effective Date are set forth on Exhibit A to this Agreement.

 

       3.  Compensation and Other Employment Terms.

      

          (a) Base Salary. During the Term, the Company shall pay Employee a base salary of $500,000.00 per year. The base salary shall be payable in cash, subject to applicable withholdings, in accordance with the then current payment policies of the Company for its employees, but no less frequently than monthly. The base salary may be increased during the Term by the Company, and may be decreased by the Company but only in connection with (and only to the same proportional extent as) across the board salary reductions affecting similarly situated employees of the Company (an "Across-the-Board Salary Reduction").

 

  

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          (b) Bonus. In addition to the base salary specified in Section 3(a), Employee shall  be eligible to participate in bonus plan(s) adopted from time to time by the Company. Employee's target bonus in 2013 will be $250,000.00 (the "Target Bonus"), prorated from the Effective Date and payable in or about March 2014. The bonus plan(s) referenced in this Section 3(b) will be jointly developed by the Employee and the Company within 90 days of the Effective Date. The grant of a bonus is discretionary and subject to the conditions set forth in the plans approved by the Company. Employee must be an active employee in good standing on the payment date to be eligible to receive a bonus payment. Notwithstanding the preceding sentence, the Company shall pay Employee the full amount of any bonus applicable in respect of a calendar year in the event that, at any time after November 30 of such year and before the date of payment of the bonus, (i) the Company terminates employee's employment due to his death or Disability or without Cause or (ii) Employee terminates his employment for Good Reason; and, if any such termination instead occurs on or before November 30 of such  year,  then  the Company shall pay Employee a portion of the applicable bonus, pro rated (if and as applicable) based on the partial achievement (if any) through the termination date of any goals,  metrics, targets or other objectives applicable established for the bonus at issue.

          (c) Vacation. Employee shall be entitled to (i) four (4) weeks of paid vacation annually (pro rated from the Effective Date through the end of2013), and (ii) all federal and state holidays generally observed by the Company. Unused vacation time in any year shall be forfeited and shall not carry over to the next year. The timing of paid vacations shall be scheduled in a manner reasonably acceptable to the Company.

         

          (d) Employee Benefits. During the Term, and to the extent eligible, Employee shall be entitled to participate in all retirement, savings and other benefit plans and programs available either to similarly situated employees or to employees of the Company generally. In addition, Employee and his eligible dependents shall be eligible to participate in each welfare benefit plan of the Company currently maintained or hereafter established by the Company for the benefit of its employees (each, a "Welfare Benefit Plan"), in each case in accordance with the terms of such plans. Such Welfare Benefit Plans may include, without limitatio medical, dental, life and disability insurance plans and programs; provided that the Company may change its Welfare Benefit Plans from time to time in its discretion. During the Term, the Company shall pay the full amounts of all medical insurance premiums for Employee and his dependents. To the extent benefits provided under any such Welfare Benefit Plan are subject to Section 409A of the Internal Revenue Code of 1986, as amended, the benefits provided in any calendar year shall not affect the benefits to be provided in any other calendar year.

 

          (e) Business Expense Reimbursement.  The  Company shall reimburse Employee for all reasonable business expenses incurred in connection with the performance of his duties under this Agreement, including (i) reasonable travel and commuting expenses (including expenses of commuting to and from Employee's home in Massachusetts) and (ii) the reasonable expenses of moving Employee's personal belongings from his principal residence to the area of Phoenix, Arizona (it being understood that, after doing so, Employee nonetheless will periodically commute to and from the aforesaid Massachusetts home). Employee shall provide to the Company reasonable supporting documentation for all such expenses. The expenses eligible for reimbursement in any calendar year shall not affect the expenses available for reimbursement in any other calendar year, and all expenses shall be reimbursed by the Company within sixty (60) days after Employee submits such expense for reimbursement, but in no event later than the December 31 following the calendar year in which the expense was incurred.

  

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          (f)    Long Term Incentive Compensation.    The Company expects to adopt a long-term incentive plan in order to promote the success and enhance the value of the Company by linking the personal interests of its key employees to those of the  Company's owners.   Subject to the approval of the Company, when the long-term incentive plan is adopted, it is expected Employee will be awarded a 10% profits interest in the Company or an affiliate, vesting in equal installments of twenty five percent (25%) per year on each anniversary date of the initial grant and provided the Employee has completed at least one year of continuous employment with the Company. Notwithstanding the foregoing or any other provision of this Agreement, (i) if the Company terminates Employee's employment with  Cause,  as  defined herein, Employee  shall forfeit any and all profits interest awarded to Employee, whether vested or unvested, (ii) if Employee terminates this Agreement without Good Reason, as defined herein, Employee shall forfeit 50% of any and all vested profits interest awarded to Employee (it being understood that Employee shall not have a right to any unvested profits interest), and (iii) if the Company consummates a Change of Control Transaction (as hereinafter defined) at any time following the first anniversary of this Agreement then, subject to the terms of the long-term incentive plan, all unvested profits interests in the Company or an affiliate previously awarded to Employee shall vest immediately prior to the Change of Control Transaction; provided, however, that any Change of Control Transaction that results from a bona fide offer or proposal made by the Company or an affiliate thereof prior to the first anniversary of this Agreement, regardless of whether the transaction closes after the first anniversary of this Agreement, shall not result in acceleration of any unvested profits interest.

 

          (g) Meaning of Change of Control Transaction.  For purposes of this Agreement, "Change of Control Transaction" means either: (A) the acquisition of the Company, the Company's parent entity SkyMall Holding, LLC, a Delaware limtited liability company, or the Subsidiary (the entity at issue being called the "Target") by another entity by means of any transaction or series of related transactions to which the Target is party (including, without limitation, any stock acquisition, asset acquisition, acquisition of limited liability company interests, reorganization, merger or consolidation, but excluding any sale of equity securities undertaken primarily for capital raising purposes) that results in the voting securities of the Target outstanding immediately prior thereto failing to represent, immediately after such transaction or series of transactions (either by remaining outstanding or by being converted into voting securities of the surviving entity or the entity that controls such surviving entity), a majority of the total voting power represented by the outstanding voting securities of the Target, such surviving entity or the entity that controls such surviving entity; or (B) a sale or other conveyance of all or substantially all of the assets of the Target. Notwithstanding the preceding sentence, if such surviving entity or the entity that controls it shall not have any voting securities, then a "Change of Control Transaction" will be deemed to occur if the holders (or one or more groups of the holders) of the Target's equity securities immediately before the consummation of such transaction or series of transactions shall fail to control (within the meaning of Rule 405 promulgated under the Securities Act of 1933, as amended) the governing body of such surviving entity or the entity that controls it. For purposes of this Section 3(g), the term "voting securities" means the equity securities of the entity at issue having ordinary voting power with respect to the election of such entity's board of directors (if such entity is a corporation), or its manager(s) or managing member(s) (if such entity is a limited liability company), or its equivalent governing body.

 

          (h) Key Man Insurance Policy. The Company may, in its discretion and at its sole expense, obtain a key man life insurance policy (the "Policy") on the life of Employee, with the Company as the beneficiary under the Policy. Employee agrees to reasonably cooperate with the Company and its insurer with respect to the acquisition and/or maintenance of the Policy.

 

       4.  Termination; Compensation Upon Termination.

          (a) Termination upon Death or Disability. Employee's employment shall automatically terminate if Employee dies or becomes Disabled during the Term.

 

  

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          (b) Compensation Upon Termination by Company With Cause, or by Employee Without Good Reason. If the Company terminates Employee's employment with Cause, or if Employee terminates this Agreement without Good Reason, then the Company shall pay or provide to Employee (within ten (10) days after effective date of the termination of his employment) (i) his base salary through the date of termination, (ii) any accrued benefits to the date of termination, and (iii) reimbursement of outstanding business expenses incurred to the date of termination.

 

          (c)  Compensation Upon Termination by Employee for Good Reason. If Employee terminates his employment for Good Reason, or if the Company terminates his employment without Cause (and not due to his death or Disability), then the Company shall pay or provide to Employee (within ten (10) days after effective date of the termination of his employment)  (i) his base salary through the date of termination, (ii) any accrued benefits to the date of termination, (iii) reimbursement of outstanding business expenses incurred to the date of termination, (iv) Employee's profits interest in the Company (if any) vested as of the date of effective date of his termination of employment; and (iv) Severance. Notwithstanding the foregoing, the Company's obligation to pay Severance shall be conditioned upon (A) Employee being employed under this Agreement for a Term of at least 90 days, and (B) Employee executing and delivering to the Company a complete general release of all claims, known or unknown, against the Company and its subsidiaries and affiliates, including employment-related claims, in a form acceptable to the Company.

 

          (d)  Definitions.  For the purposes of this Agreement,

             (i) "Good Reason" shall mean (A) a material breach by the Company of any of its obligations under this Employment Agreement (including any reduction of his then-current base salary or any guaranteed portion of any bonus, but excluding an Across­ the-Board Salary Reduction) which is not otherwise corrected if capable of being corrected, within thirty (30) days after a written demand for performance has been delivered by the Employee which specifically identifies the manner in which the Employee believes the Company has not complied with the obligation(s) at issue; or (B) the Employee being directed by the Board to engage in unlawful acts; or (C) the occurrence of any of the following events without the Employee's express, prior written consent (unless corrected before the date of termination): (1) the assignment to the Employee of any duties that (i) are of lesser status, dignity and character than the duties reasonably and customarily required of an employee assigned the title,_ position, responsibilities and authority contemplated in Section 2(a) above or (ii) are otherwise materially inconsistent with such title, position, responsibilities and authority; (2) a substantial reduction in the nature or status of the Employee's title, position, responsibilities or authority from those contemplated in Section 2(a) above; or (3) any other action by the Company which results in a material diminution in the Employee's title, position, responsibilities or authority; or (D) a relocation of the Employee's principal place of employment to a location more than fifty (50) miles from the Company's current employee offices in Phoenix, Arizona.

             (ii) "Disability" shall mean Employee's inability, with reasonable accommodation, to perform one or more of the essential functions of Employee's position hereunder on a full-time basis for a period exceeding 90 consecutive days or for periods aggregating more than 90 days during any 12 month period as a result of incapacity due to physical or mental impairment not due to drug or alcohol abuse (it being understood that, if Employee is not performing due to drug or alcohol abuse, such non-performance shall entitle the Company to terminate for Cause as provided in this Agreement). If there is a dispute  as to whether Employee is or was physically or mentally unable to perform the essential functions of Employee's position under this Agreement, such dispute shall be submitted for resolution to a licensed physician agreed upon by the Company and Employee, or if an agreement cannot be promptly reached, the Company and Employee will each select a physician, and if these physicians cannot agree, they will pick  a third physician whose decision shall be binding on all parties. If such a dispute arises, Employee shall submit to such examinations and shall provide such information as such physician(s) may request,  and the  determination  of the physician(s) may be released to the Company and, as to Employee's physical or mental condition, shall be binding and conclusive.

  

-4-

  

 

             (iii)  "Cause"  shall   mean   Employee's:   (A)   indictment, conviction or plea of nolo contendere for (1) any felony, or (2) any misdemeanor (other than a traffic violation) relating to the Company which is punishable by imprisonment under  federal, state or local law; or (B) breach  of fiduciary duty; or (C) commission of embezzlement or fraud on, or in his dealings with, the Company or his misappropriation of any of the Company's funds or assets; or (D) willful failure to perform his material duties which is continuing for at least fifteen (15) days after a written demand for performance has been delivered by the Board which specifically identifies the manner in which the Company believes the Employee has not substantially performed  said duties, or the Employee's  material violation of any covenant of his in this Employment Agreement, provided that the Board has given the Employee written notice specifically identifying such violation and he has not cured the same within fifteen (15) days after the giving thereof (provided, however, that neither of the above cure periods will be applicable in the event that the applicable actions, by their nature, cannot be cured); or (E) willful misconduct that results or is likely to result in gain or personal enrichment of the Employee at the expense of the Company, whether monetarily or otherwise, or any other willful misconduct that has or is likely to have a material adverse effect upon the Company's financial condition, results of operations, business or prospects or any of its assets, properties or rights (whether tangible or intangible), including (but not limited to) intentionally causing or knowingly influencing the material misstatement of a financial position or statement of income or expense of the Company; or (F) willful failure to comply with any applicable law that is material to the business or affairs of the Company or with any written Company policies or directives including (but not limited to) those relating to discrimination or sexual harassment, provided that the Board has given the Employee written notice specifically  identifying  such violation  and he has  not cured the same within fifteen (15) days after the giving thereof (provided, however, that no such cure period will be applicable in the event that the applicable actions, by their nature, cannot be cured).

             (iv) "Severance" shall mean (a) $500,000, less applicable withholdings; and (b) a lump sum bonus payment as set forth below (the "Severance Bonus"), less applicable withholdings. The Company shall pay the Severance to Employee within ten (10) days after effective date of the termination of his employment. Inthe event Severance is payable to Employee in calendar year 2013 or 2014, the Severance Bonus shall equal the Target Bonus. In the event Severance is payable to Employee in any other calendar year during the Term, the Severance Bonus shall be a sum equaling the average bonus payment he actually received in the Company's two most-recently ended fiscal years. Employee will not be required to mitigate the amount of the aforesaid Severance payment (including by requiring Employee to seek post­ termination employment), nor will any post-termination earnings that Employee may receive from any other source reduce such payment. The Company's obligation to make such-payment will not be affected by any set-off, counterclaim, recoupment, defense or other claim, right or action that the Company may have at any time against Employee or others (excluding only the requirement in Section 4(c) above relating to the general release).

 

    5. Nonrecruitment, Nonsolicitation, Noncompetition and Nondisparagement Covenants.

   

          (a) Nonrecruitment of Employees. In consideration  of  the compensation and benefits being paid and to be paid by the Company to Employee hereunder, Employee agrees that, during employment with the Company and for one year after the termination of Employee's employment by either party and for any reason, Employee shall not, directly or indirectly, hire, solicit or recruit for employment or encourage to leave employment with the Company, on his own behalf or on behalf of any other person or entity other than the Company, any employee of the Company with whom Employee worked during Employee's employment, unless such person has thereafter ceased to be employed by the  Company for a period of at least one year prior to any such hiring, solicitation, recruitment or encouragement. This Section 5(a) will not apply to non-targeted, public advertising of available positions of employment engaged in by Employee or any other person or entity.

  

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          (b) Nonsolicitation of Customers. In consideration of the compensation and benefits being paid and to be paid by the Company to Employee hereunder, Employee agrees that, during employment with the Company and for one year after the termination of Employee's employment by either party and for any reason, Employee shall not, directly or indirectly, on behalf of himself or of anyone other than the Company, for the purpose of selling or providing Competitive Services do any of the following things: (a) solicit or attempt to solicit any Customer to cease or refuse to furnish goods or services to, or .purchase goods or services from., the Company; or (b) solicit or attempt to solicit any Customer to transfer any material portion of its business with the Company to any other person or entity. For purposes of this Agreement,

 

             (i) the term "Competitive Services" means: (A) multi-channel direct marketing of merchandise through catalogue and websites, and (B) turn-key merchandise fulfillment solutions for loyalty marketing programs, and

 

             (ii) the term "Customer" means any person or entity: (A) with whom Employee had material contact on behalf of the Company during the last eighteen (18) months of his employment for the purpose of the Company providing, selling, or attempting to provide or sell products or services to such person or entity; or (B)  about whom  Employee learned confidential information or trade secrets during and as a result of his employment with the Company.

 

Nothing in the foregoing provisions of this Section 4(b) and nothing in Section 4(c) below will be construed as barring or restricting Employee in terms of his rights, after he is no longer employed by the Company, to render services in any capacity either (i) to an entity that provides Competitive Services which produced, during such entity's most recently ended fiscal year, less than twenty-five percent (25%) of such entity's gross revenue (when consolidated with all such entity's subsidiaries, if any), where the services Employee  renders  are substantially related to such Competitive Services, or (ii) to an entity that provides Competitive Services, where the services Employee renders are wholly unrelated to such Competitive Services.

 

          (c) Noncompetition. In consideration of  the  compensation  and benefits being paid and to be paid by the Company to Employee hereunder, Employee agrees that during the Restricted Period, Employee shall not have any ownership interest in, and shall not engage, directly or indirectly, in the provision of management, business development, strategic planning, financing, consulting or sales services for, any person or entity engaged in the business of providing Competitive Services within the Restricted Territory. Notwithstanding anything in this Agreement to the contrary, Employee rnay acquire up to 1% of any company whose stock is publicly traded on a national securities exchange or over-the-counter market. For purposes of this Agreement, (i) "Restricted Period" means the period of Employee's employment with the Company and for one year after the termination of Employee's employment by either party and for any reason; provided, however, that if a court of competent jurisdiction determines that such period is unenforceable, "Restricted Period" shall mean the period of Employee's employment with the Company and for nine months after the termination of Employee's employment by either party and for any reason, or such other period as the court shall determine to be reasonable, and (ii) "Restricted Territory" means the North America; provided, however, that  if  a  court  of  competent  jurisdiction   determines  that  such  territory  is  too  broad  to  be enforceable, "Restricted Territory" shall mean the United States of America. The Restricted Period shall be extended by the number of days in any period in which Employee is deemed to be in default or breach of Sections 5, 6 or 7 of this Agreement.

 

  

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          (d) Nondisparagement. During Employee's employment with the Company and for one year after the termination of Employee's employment by either party and for any reason, neither of Employee or the Company will make any statement (written or oral) that could reasonably be perceived as disparaging the other (including, in the case of the Company, its employees). By way of example and not limitation,  (i) Employee  agrees that he will not make any written or oral statements that cast in a negative light the services, qualifications, business operations or business ethics of the Company or its employees, and (ii) Company agrees that it will not make any written or oral statements that cast in a negative light the services, qualifications, capabilities or business ethics of Employee. Nothing in this Section 5(d) shall restrict either party's ability to consult with counsel or to take any legal action with respect to Employee's employment or termination of employment with the Company.

          (e) Enforceability of Covenants. Employee represents and acknowledges that the covenants in this Agreement are reasonably necessary for the protection of the interests of the Company, are reasonable as to duration, scope and territory, and are not unreasonably restrictive of Employee. Notwithstanding the foregoing, should any court of competent jurisdiction determine that any covenants in this Agreement are unreasonable as to duration, scope, or territory, the covenants shall be enforceable as provided in this Agreement with respect to the maximwn duration, scope and territory as the court determines to be reasonable. Employee agrees that any breach of these covenants may  result  in  if!eparable damage. and injury to the Company, and that the Company may be entitled, in addition to monetary damages and to any other remedies available to the Company under this Agreement and at law, to seek injunctive relief in any court of competent jurisdiction.

 

    6.  Nondisclosure of Trade Secrets and Confidential Information.

 

          (a) Trade Secrets Defined. As used in this Agreement,  the  term "Trade Secrets" shall mean all secret, proprietary or confidential information regel!ding the Company, its activities, business or customers that fits within the definition of "trade secrets" under the Uniform Trade Secrets Act. "Trade Secrets" shall not include information that has become generally available to the public by the act of one who has the right to disclose such information without violating any right or privilege of the Company. This definition shall not limit any definition of "trade secrets" or any equivalent term under the Uniform Trade Secrets Act or any other state, local or federal law.

 

          (b) Confidential Information  Defined.  As  used  in this  Agreement, the term "Confidential Information" shall mean all information regarding the Company, its activities, business or customers that is not generally known to persons not employed by the Company and that is not generally disclosed  by Company practice or authority to persons not employed by the Company and is the subject of reasonable efforts to keep it confidential. "Confidential Information" shall include, but not be limited to, business methods and forms, marketing plans, strategic business plans, information regarding leads or lead generation methods, information  regarding Company's Customers and suppliers, technical information regarding Company products or services, product development, operations techniques, models, current and future development and expansion or contraction plans of Company, sale/acquisition plans and contracts, information concerning the legal affairs of the Company and infonnation concerning the financial affairs of the Company. "Confidential Information" shall not include information that has become generally available to the public by the act of one who has the right to disclose such information without violating any right or privilege of the Company. This definition shall not limit any definition of "confidential  information"  or  any  equivalent  tenn under the Unifonn Trade Secrets Act or any other state, local or federal law. Additionally, "Confidential Information" shall not include Employee's copies of lists of customers  (or customer leads), clients, suppliers and vendors of the Company provided that (i) the persons and entities identified thereon are parties with whom Employee conducted business before the Effective Date, and (ii) Employee does not use any such lists in contravention of his obligations under Sections 5(b) and S(c) hereof.

 

          (c) Nondisclosure of Confidential Information and Trade Secrets. During Employee's employment and for a period of one year after the tennination of Employee's employment by either party and for any reason, Employee shall not directly or indirectly transmit or disclose any Trade Secrets or Confidential Infonnation to any person or entity, or make use of any such Trade Secrets or Confidential Information, directly or indirectly, for himself or for others, without the prior express written consent of the Company, except pursuant to the good faith perfonnance of Employee's duties under this Agreement. Trade Secrets protected by the Uniform Trade Secrets Act or other applicable federal, state or local law shall not lose this protection at the end of the one-year period but shall remain protected from use or disclosure for so long as they remain Trade Secrets.

 

  

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          (d) Enforceability of Covenants. Employee and the Company agree that Employee's obligations under these nondisclosure covenants are separate and distinct from other provisions of this Agreement, and a failure or alleged failure of the Company to perform its obligations under any provision of this Agreement shall not constitute a defense to the enforceability of these nondisclosure covenants. Nothing in this provision or this Agreement shall limit any rights or remedies otherwise available to the Company under federal, state or local law.

 

    7.  Ownership of Protected Works.

          (a) Protected Works. The tenn "Protected Works" as used in this Agreement means any and all ideas, inventions, formulas, source codes, object codes, techniques, processes, concepts, systems, programs, software, software integration techniques, hardware systems, schematics, flow charts, computer data bases, client lists (subject to the last sentence of Section 6(b) above), trademarks, service marks, brand names, trade names, compilations, documents, data, notes, designs, drawings, technical data and/or training materials, including improvements thereto or derivatives therefrom, whether or not patentable, or subject to copyright or trademark or trade secret protection, developed and produced by Employee, alone or in conjunction with others, during his employment with the Company and relating in any way to the business of the Company.

 

          (b) Ownership and Assignment  of  Protected  Works.  Employee agrees that any and all Protected Works developed by Employee during his employment with the Company are the sole property of the Company, and that no compensation in addition to the amounts set forth in Section 3 of this Agreement is due to Employee for development of such Protected Works. Employee hereby assigns and agrees to assign all of his respective rights, title and interest in Protected Works, including all patents or patent applications, and all copyrights therein, to the Company. Employee further agrees at the Company's request and without further consideration, but at the expense of the Company, that Employee will communicate to the Company any facts known to Employee and testify in any legal proceedings, sign all lawful papers, make all rightful oaths, execute all divisional, continuing, continuation-in-part, or reissue applications, all assignments, all registration applications and all other instruments or papers to carry into full force and effect, the assignment, transfer and conveyance hereby made or intended to be made and generally do everything possible for title to the Protected Works and all patents or copyrights or trademarks or service marks therein to be clearly and exclusively held by the Compariy. Employee agrees that he will not apply for any state, federal, or other jurisdiction's registration of rights in any of the Protected Works and that he will not oppose or object in any way to  applications for registration of the same by the Company or others designated by the Company. Employee agrees to exercise reasonable care to avoid making the Protected Works available to any third party.  Employee also agrees that he shall be liable to the Company for all damages, excluding the Company's attorneys' fees and other expenses of litigation, if the Protected Works are made available to third parties in any manner by Employee without the express written consent of the Company.                                                                               ·

 

    8. Rights to Materials and  Return  of  Materials.  All  records,  files, software, software code, memoranda, reports, price lists, leads, customer lists, drawings, training materials, workflows, phone lists, plans, sketches, documents, technical information, and other tangible items (together with all copies of such documents and things) relating to the business of the Company, which Employee shall use or prepare or come in contact with in the course of, or as a result of, Employee's employment shall, as between the parties to this Agreement, remain the sole ,property of the Company. Laptop computers, software and related data, infomiation and things provided to Employee by the Company or obtained by Employee, directly or indirectly, from the Company, also shall remain the sole property of the Company. Upon the termination of Employee's employment or upon the demand of the  Company,  Employee  shall  immediately return all such materials and things to the Company and shall not retain any copies or remove or participate in removing any such materials or things from the premises of the Company after termination or the Company's request for return. Notwithstanding the preceding sentence, Employee may retain his personal copies of (i) records relating to his employment and compensation (e.g., this Agreement, copies of bonus plans, and the like), (ii) materials previously distributed generally to the Company's employees or participants in its employee benefits plans and programs  (including Welfare Benefit Plans), and (iii) other agreements or instruments hereafter entered into between Employee and the Company.

 

  

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    9.    Compliance with Policies and Laws.  Employee agrees to be bound by and to observe any and all of the Company's written policies, work rules or standards of conduct. Employee further agrees to abide by the laws and regulations of the United States and other applicable jurisdictions  and to exercise good judgment  in the best interest of the Company.

 

    10.  Miscellaneous.

 

          (a) Entire Agreement. This Agreement constitutes  the  entire agreement between Employee and the Company with respect to the subject matter hereof, and supersedes all prior oral or written agreements or understandings related to the subject hereof.

 

          (b) Amendments. The Agreement may not be amended or modified, and no provision of this Agreement may be waived except in writing signed by both  the Company and Employee. Waiver of any one provision of this Agreement shall not be deemed a waiver of any other provision.

 

          (c) Assignment. This Agreement shall be binding  upon and inure to the benefit of the parties hereto and their respective, heirs, legal representatives, successors and assigns; provided, however, Employee agrees that his rights and obligations hereunder are personal to him and may not be assigned without the express written consent of the Company.

 

          (d) Seve:rability. Each provision shall be considered severable. If for any reason any provision or provisions are determined to be invalid or contrary to applicable law, such invalidity will not impair the operation of or affect the remaining provisions.

 

          (e) Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Arizona, without giving effect to any choice or conflict of law provision or rule (whether of the State of Arizona or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Arizona.

 

          (f) Headings. Section headings contained in this Agreement are inserted for convenience only and shall not affect in any way the meaning or interpretation of this Agreement.

 

          (g) Counterparts. This Agreement may be executed in two or more counterparts and by facsimile signature, each of which shall be deemed an original and all of which shall together constitute one and the same instrument.

          (h)    Representation  by Counsel.  Each party acknowledges and agrees that this Agreement has been reviewed by legal counsel of his or its choosing.

 

          (i) Dispute Resolution. The parties agree that, except as provided in Section 1O(i)(iii), any controversy, claim or dispute of whatever nature between Employee and the Company arising out of or relating to this Agreement, or arising out of Employee's employment with the Company (each, a "dispute"), shall, subject to the mediation provision set forth below, be filed exclusively in the state or federal courts in Maricopa County, Arizona. The parties consent and agree to the jurisdiction of the Arizona  courts. Neither of the parties will argue or contend that it is not subject to the jurisdiction of the Arizona courts or that venue in Maricopa County, Arizona, is improper. The parties agree to waive any right to a trial by jury in any such dispute and that the matter will be tried solely to the court. The parties understand that they are giving up valuable legal rights under this provision, including the right to trial by jury, and that they voluntarily and knowingly waive those rights.

 

  

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          (i) Mediation. The parties will first attempt to mediate the dispute before a neutral mediator mutually agreed upon by the parties. Ifthe parties cannot agree on a mediator within 15 days after either party provides the other with written notice ofa dispute to be resolved pursuant to this Section lO(i)(i), then the American Arbitration Association ("AAA") shall be asked to designate a mediator who is available to conduct a mediation as promptly as possible.

          (ii) Litigation. If the parties are unable to resolve their dispute by mediation, after the unsuccessful conclusion of any such mediation, either party may pursue the remedies available to it at law or equity; provided that any such proceeding shall be subject to all of the terms of this Section 10, including jurisdiction, choice-of-law, venue and waiver of jury trial.

          (iii) Exceptions.  The parties agree that the procedures outlined in this Section 10 are the exclusive methods of dispute resolution,  except that notwithstanding the foregoing, the Company may bring an action for injunctive relief, specific performance or other equitable relief in any court of competent jurisdiction to enforce the provisions of Sections 5, 6, 7 and 8 of this Agreement. Should a party institute a legal action or  administrative proceeding against the other with respect to any  dispute  without  complying  with  the requirements of this Agreement, such breaching party shall be responsible for all damages, costs, expenses and attorney's fees incurred by the other party in dismissing such action and otherwise as a result of such breach.

       G) Notices. All notices, requests, demands, claims, and other communications hereunder  will be in writing. Any notice request, demand, claim or other communication hereunder shall be duly given if delivered by hand delivery or if delivered to the following address by mail or receipted delivery:

 

To the Company:  Tina Rhodes

 

Skymall Holding Corp.

2525 East Camelback Road, Suite 850

Phoenix, Arizona 85016

 

With a copy to: Karen McConnell

Ballard Spahr LLP

I East Washington Street, Suite 2300 Phoenix, Arizona 85004-2555

To Employee:  At his  then-current  principal  residential  address as last reflected in the Company's books and records.

 

  

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With a copy to:

Winslett Studnicky McCormick & Bomser LLP

6 East 39th Street, 6th Floor

New York NY 10016-0112

Attn: Larry Studnicky, Esq.

Either party may change its or his address for notice by written notice to the other.

          (k) Taxes.  Any payments provided for hereunder  shall be paid net of any applicable employment taxes or other withholdings required under federal, state or local law.

      

          (1) Survival.   The provisions  of Sections 4 through 8 and 10 shall survive the expiration or termination of this Agreement.

[signatures on following page]

 

  

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

 

EMPLOYEE:

 

/s/ Kevin M. Weiss

Kevin M. Weiss

 

 

COMPANY:

 

SKYMALL HOLDING CORP.

 

By:  ____________________

Name:  __________________

Title:  ___________________

 

 

[SIGNATURE PAGE TO EMPLOYMENT AGREEMENT]

 

  

-12-

  

 

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

 

 

EMPLOYEE:

______________

Kevin M. Weiss

 

COMPANY:

 

SKYMALL HOLDING CORP.

 

By:  /s/ Daniel T. Shom

Name:  Daniel T. Shom

Title:  _____________

 

[SIGNATURE PAGE TO EMPLOYMENT AGREEMENT]

 

  

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Exhibit A

Significant Positions Held on Effective Date

 

 

Operating Partner, Bertram Capital Management LLC

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00217-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00217-of-00352.parquet"}]]