Document:

Exhibit 10.1

                         BAYTREE CAPITAL ASSOCIATES, LLC
                                MERCHANT BANKERS
                              THE TRUMP BUILDING AT
                                 40 WALL STREET
                            NEW YORK, NEW YORK 10005
                           212/509-1700 - 212/363-4231

                                  July 14, 1999

Aladdin Systems, Inc.
165 Westbridge Drive
Watsonville, California 95076
Attn: Mr. Johnathan Kahn
      President

Dear Mr. Kahn:

      The purpose of this letter agreement (this "Agreement") is to memorialize
the understanding between Baytree Capital Associates, LLC ("Baytree") and
Aladdin Systems Inc. ("Aladdin") with respect to the investment by Baytree and
others of $1 million into Aladdin or any corporation or other entity formed by
or affiliated with Aladdin (together with Aladdin, the "Company") which
participates in, or which was formed for the purpose of effecting a Transaction
(as hereinafter defined). In the context of this Agreement, "Transaction" shall
mean, whether effected in one transaction or a series of transactions, any
merger, consolidation, reorganization, recapitalization or other business
combination pursuant to which the business of Aladdin is combined with that of
another entity (the "Merger Candidate"), whether or not Aladdin is the surviving
entity in such business combination.

      1. Services. Pursuant to the terms and conditions set forth in this
Agreement, Baytree will assist Aladdin in negotiating and effecting a
Transaction. In this regard, Baytree will, on behalf of Aladdin:

            (a) use its best efforts to identify a Merger Candidate which is a
public company with no material liabilities and at least $1.00 of positive
working capital, having a trading symbol on the Nasdaq Electronic Bulletin
Board;

            (b) advise Aladdin as to the structure and form of the Transaction;

            (c) assist Aladdin in obtaining appropriate information and
performing its due diligence regarding the merger Candidate; and

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            (d) counsel Aladdin with respect to, and assist in the negotiations
with, the Merger Candidate regarding the Transaction in a fashion customary with
transactions of this nature.

            Any obligations pursuant to the Paragraph 1 shall survive the
termination or expiration of this Agreement.

      2. The Investment

            (a) Baytree or other entities identified by Baytree or the Company
shall invest (the "Investment") $1 million in the Company. The investment will
be completed through a limited offering and will be completed contemporaneously
with consummation of the Transaction. The Investment will be subject to
Baytree's successful and satisfactory completion in Baytree's sole and absolute
discretion of its due diligence prior to the funding of the Investment, such
shall include, but not be limited to, a review and analysis of Aladdin's
financial status, business plans and any pending or potential litigation. The
placement of the Common Stock will rely on Rule 504 of Regulation D ("Regulation
D") promulgated under the U.S. Securities Act of 1933, as amended the "Act"),
and shall thereby be exempt from the registration requirements of the Act,
provided, however, that should Rule 504 of Regulation D be changed so that the
exemption from registration for stock so issued under this Agreements altered
then no further Investment as contemplated in this Agreement will occur unless
and until the parties to this Agreement enter into a separate and distinct
agreement to continue with a financing wherein the terms of said financing shall
be specifically described. In connection with their purchase of the Common stock
in the Investment, the purchasers (which may include Baytree) will receive one
(1) share of the Common Stock of the Company for every one ($1 US) dollar so
invested.

            Baytree shall not be deemed an agent of the Company nor an agent of
Aladdin for any purpose. Any proceeds shall be paid, less the legal fees
reimbursement (each as defined in Paragraph 4 below), to the Company at a
closing held with respect to the sale of the Common Stock (the "Closing")
against delivery of certificates representing the securities sold. The Company
agrees that for a period of twelve (12) months from the Closing, it will not,
directly or indirectly, without Baytree's prior written consent, seek to arrange
or place any equity or convertible security financing which contains any
floating conversion price or ratio or other type of reset provision or which are
sold a greater than a 10% discount to the then current market price, except is
such financing is an underwritten public offering or non-convertible debt.
Additionally, the Company agrees that upon Closing, the Company shall grant
Baytree a right of first refusal for a period of eighteen (18) months from the
Closing with respect to any sale of securities by the Company except if the sale
is either pursuant to an underwritten public offering or is non-convertible debt
and except for the issuance of securities upon the exercise of currently
outstanding warrants which shall be as set forth in Section 4. Such right does
not apply to the issuance of securities upon the exercise of options (whether
currently outstanding or granted following the Closing, provided that the total
number of options which the Company may authorize during such term (including
the options currently outstanding) shall not exceed 2.2 million shares and
provided further that any options issued following the Closing shall have an
exercise price equal to or greater than the market price on the date of grant.
Baytree shall have ten (10) business days following receipt of written notice
from the Company setting forth the terms of any proposed financing to be
conducted by it (a "Notice"), to exercise the right of first refusal by agreeing
to provide financing on the same or better economic terms as presented to the
Company. In the event Baytree fails to exercise this right to provide such
financing, the Company

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shall be free to sell such securities in the manner, amount and for the prices
and terms set forth in the Notice without liability to Baytree, subject to
Baytree's right of consent for a period of twelve (12) months as set forth
above. Not withstanding the foregoing, in the event that a Closing is not
consummated, as contemplated herein, the Company shall have no obligation to
Baytree under this paragraph.

      3. Compensation: Expenses. It shall be the Company's obligation to bear
all of its expenses in connection with the Transaction and the financing, which
expenses shall include, but are not limited to the following: printing a
duplication costs, postage and mailing expenses with respect to the transmission
of offering materials, registrar and transfer agent fees, accounting fees and
issue and transfer taxes, if any; provided that Aladdin shall not be liable for
such expense if the Investment does not occur through no fault of Aladdin.
Further, Aladdin will cause the Company to pay to Baytree a non-accountable
expense allowance at closing of Ten Thousand ($10,000.00 US) Dollars with
respect to the Transaction and the Investment; and, Aladdin will cause the
Company to pay the fees and reasonable disbursements of the Merger Candidate's
legal counsel incurred in connection with the Transaction (not to exceed
$35,000.00). Such expenses shall be paid at Closing. As total compensation for
its role in the Transaction, Baytree or its nominee shall receive $20,000 in
cash and 50,000 shares of common stock of the Company at Closing.

      4. Structure of Merger Candidate.

      It is contemplated by the parties that the capitalization of Merger
Candidate will be structured such that following the consummation of the
Transaction 650,000 shares of common stock will be held by the former holders of
the Merger Candidate, 1,000,000 shares of common stock will be held by Baytree
and the other new investors, and an aggregate of 8,350,000 shares of common
stock will either be issued to the holders of Aladdin stock or reserved for
issuance to the holders of Aladdin warrants or options.

      5. Representations, Warranties, and Covenants.

            (a) Aladdin represents and warrants and shall cause the Company to
so represent and warrant that this Agreement has been duly authorized, executed
and delivered by the Company and constitutes a valid and binding agreement of
the Company enforceable against the Company in accordance with it terms. The
Company further represents and warrants that consummation of the transactions
contemplated herein will not conflict with or result in a breach of any of the
terms, provisions or conditions of any written agreement to which it is a party.

      (b) Aladdin has not done, and shall cause the Company not to do anything
that may be considered a direct selling effort in the United States or which
could reasonably be expected to result in general preconditioning of the United
States Market for the Securities of the Company. Subject to the requirements of
law, the Company shall not make any public announcement of the Investment
without the prior written consent of Baytree and in any event, shall make no
such disclosure which could be deemed to be a general solicitation or directed
selling effort within the meaning of Regulation D under the Act.

      (c) Baytree covenants that it will comply with all Rules and Regulations
applicable to Regulation D, all federal and state securities laws and
regulations and all rules promulgated by the

                                                                               7
<PAGE>

NASD with regard to the Investment. Further, Baytree represents and warrants
that this Agreement has been duly authorized, executed and delivered by it and
constitutes its valid and binding agreement enforceable against it in accordance
with its terms. Baytree further represents and warrants that consummation of the
transactions contemplated herein will not conflict with or result in a breach of
any of the terms, provisions or conditions of any written agreement to which it
is a party.

      (d) Aladdin represents, warrants, and covenants that at the time of the
Transaction contemplated herein there shall be no liens, encumbrances or
security interest in any assets of Aladdin (or any subsidiaries or affiliates)
(except for existing liens and security interests), said unencumbered assets
shall include but not be limited to the intellectual or proprietary property of
Aladdin which property shall include but not be limited to, any and all
copyrights issued to, titled to, or claimed by Aladdin.

      6. Term. Baytree agrees to attempt to fulfill its obligations under this
Agreement with 60 days of the date hereof. If the Transaction and the Investment
are not consummated within such time period, Aladdin may terminate this
Agreement and shall have no further obligation to Baytree.

      7. Indemnification. Aladdin agrees to indemnify and to cause the Company
to indemnify the purchasers who participate in the Investment in a form
substantially as set forth in Annex A, attached hereto, which provisions will be
incorporated into the purchase agreement relating to the Investment.

      8. Information. Aladdin recognizes and confirms that in performing its
obligations under this Agreement, Baytree and other persons who participate in
the Investment will be using and relying on date, material, and other
information (the "Information") or ("Offering Materials") furnished by Aladdin
and the Merger Candidate or their respective employees and representatives. In
connection with Baytree's activities on Aladdin's behalf, Aladdin will cooperate
with Baytree and will furnish Baytree with all information concerning Aladdin,
the Transaction and, to the extent available to Aladdin, the Merger Candidate,
which Baytree deems appropriate and will provide Baytree with access to
Aladdin's officers, directors, employees, independent accountants and legal
counsel for the purpose of performing Baytree's obligations pursuant to this
agreement. To the extent that Aladdin has access to the officers, directors,
employees, independent accountants and legal counsel of the Merger Candidate, it
will provide such access to Baytree for the purpose of performing Baytree's
obligations pursuant to this Agreement. Aladdin hereby agrees and represents
that all Information (a) furnished directly by Aladdin to Baytree pursuant to
this Agreement, and (b) contained in any filing by Aladdin with any court or
governmental or regulatory agency, commission or instrumentality (each, and
"Agency") shall, at all times during the period of the engagement of Baytree
hereunder, be accurate and complete in all material respects and that, if the
Information provided by Aladdin becomes materially inaccurate, incomplete or
misleading during the term of Baytree's engagement hereunder, the Company shall
so advise Baytree in writing. Accordingly, Baytree assumes no responsibility for
the accuracy and completeness of the Information. In rendering its services
hereunder, Baytree will be using and relying upon the Information without
independent verification thereof or independent evaluation of any of the assets
or liabilities of Aladdin or the Merger Candidate. All information that is not
publicly available will be confidential and proprietary information belonging to
Aladdin and Baytree shall have not interest of any kind in such information by
virtue of the Agreement. No information shall be revealed, or used

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<PAGE>

(except in the performance of Baytree's duties under this Agreement) by Baytree
unless compelled as determined in good faith by counsel to Baytree and with
reasonable notice given to Aladdin.

      9. Disclosure. Aladdin agrees that, except as compelled by law, rule or
regulation or as necessary to its attorneys, accountants and other similar
advisors, it will not disclose and will cause the Company not to disclose the
services or advice to be provided by Baytree under this Agreement publicly or to
any third party without the prior written approval of Baytree.

      10. Severability. If any provision of this Agreement shall be held or made
invalid by a statute, rule, regulation, decision of a tribunal or otherwise, the
remainder of this Agreement shall not be affected thereby and, to this extent,
the provisions of this Agreement shall be deemed to be severable.

      11. Authorization. Aladdin and Baytree represent and warrant that each has
all requisite power and authority, and all necessary authorizations, to enter
into and carry out the terms and provisions of this Agreement.

      12. Successors. This Agreement and all rights, liabilities and obligations
hereunder shall be binding upon and inure to the benefit of each party's
successors but may not be assigned without the prior written approval of the
other party. Any such approval shall not be reasonably withheld.

      13. Headings. The descriptive headings of the Paragraphs of this Agreement
are inserted for convenience only, do not constitute a part of this Agreement
and shall not affect in any way the meaning or interpretation of this Agreement.

      14. No Brokers. Aladdin represents and warrants to Baytree that other than
as disclosed in writing, there are no brokers, representatives or other persons
which have an interest in or claim for compensation due to Baytree from any
transaction contemplated herein.

      15. Notices. Any notice or other communication to be given to Aladdin
hereunder may be given by delivering the same in writing to the address set
forth above, and any notice or other communication to be given to Baytree may be
given by delivering the same to Baytree Capital Associates, LLC, 40 wall Street,
New York, New York 10005, Attention: Michael Gardner, Principal, or in each
case, such other address of which a party shall have received notice. Any notice
or other communication hereunder shall be deemed given three days after deposit
in the mail if mailed by certified mail, return receipt requested, or on the day
after deposit with an overnight courier service for next day delivery, or on the
date personally delivered.

      Please confirm that the foregoing correctly sets forth our agreement by
signing the enclosed letters in the space provided and returning them to us for
execution, whereupon we will send you a fully executed original letter which
shall constitute a binding agreement as of the date first above written.

                                            Very truly yours,

                                            BAYTREE CAPITAL ASSOCIATES, LLC

                                                                               9
<PAGE>

                                            By: /s/ Michael Gardner
                                                Michael Gardner, Principal

Agreed to and accepted as of the above date

ALADDIN CORPORATION

By: /s/Jonathan Kahn
    Jonathan Kahn, President

                                                                              10
<PAGE>Exhibit 10.2

                              EMPLOYMENT AGREEMENT

      EMPLOYMENT AGREEMENT, dated as of the 25th day of October, 1999 between
Aladdin Systems Holdings, Inc., a Nevada corporation with its principal offices
at 165 Westridge, Watsonville, California (the "Company") and Jonathan Kahn, an
individual residing at c/o Aladdin Systems 165 Westridge, Watsonville,
California (the "Employee").

      In consideration of their mutual promises and covenants set forth herein,
and intending to be legally bound hereby, Company and Employee agree as follows:

      1. Employment. The Company hereby employs the Employee and the Employee
accepts such employment on the terms and conditions hereinafter set forth.

      2. Term. The term of this Agreement shall begin on October 25, 1999 and
shall terminate on October 24, 2002, unless sooner terminated in accordance with
Paragraph 7 below.

      3. Duties. The Employee is engaged herein as Chief Executive Officer and
agrees to perform the duties and services incident to that position and such
other or further duties and services of a similar nature as may be reasonably
required of him by the Board of Directors of the Company or the Board's
designee. Employee shall at all times be subject to the supervision of the Board
of Directors of the Company and of such other person as the Board may designate.

      The Employee shall devote his full business time, attention, energies and
best efforts to the performance of his duties hereunder and to the promotion of
the business and interests of the Company and of any corporate subsidiaries or
affiliated companies. The foregoing shall not be construed, however, as
preventing the Employee from (a) investing his assets in the operations of the
business in which such investment is made and provided such business (i) is not
in competition with the Company or, (ii) if in competition, such business has a
class of securities registered under the Securities Exchange Act of 1934 and the
interest of Employee therein is solely that of an investor owning not more than
10% of any class of the outstanding equity securities of such business or (b)
from serving on the Board of Directors of any company which does not compete
with the Company or (c) providing consulting services to any company which does
not compete with the Company provided that the providing of such services does
not materially interefere with the performance of Employee duties hereunder.

      4. Compensation; Expenses.

            (a) Base Salary. The Employee shall be paid a salary at the rate of
not less than $150,000.00 per year (the "Base Salary"). The Base Salary shall be
paid in installments in arrears in accordance with the Company's regular payroll
practices. The Company may, at its discretion,

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<PAGE>

increase the Employee's Base Salary and his other compensation provided for
herein. Employee shall be entitled to annual increases in Base Salary as
determined by the Board of Directors.

            (b) Fringe Benefits.

                  (i) The Employee shall be entitled to participate in all
insurance, vacation and other fringe benefit programs of the Company to the
extent and on the same terms and conditions as are accorded to other management
employees of the Company, provided, however, that nothing herein shall be deemed
to require grants or awards to Employee under any benefit plans which provide
for awards or grants at the discretion of the Board of Directors or of any
committee or administrator, and that entitlement to vacations shall be governed
solely by clause (ii) of this subparagraph (b).

                  (ii) The Employee shall be entitled in each calendar year
commencing with 1999 to a vacation in accordance with Aladdin's standard
vacation policy of not less than three (3) weeks (pro rated during 1999),
without loss of or reduction in his compensation. Each vacation shall be taken
by the Employee at such time or times as agreed upon by the Company and
Employee. Any portion of Employee's vacation not used during any calendar year
shall be carried forward, provided that Employee may not take more than six (6)
weeks paid vacation during any calendar year.

            (c) Business Expenses. The Company will pay, or reimburse the
Employee, for all ordinary and reasonable out-of-pocket business expenses
incurred by Employee in connection with his performance of services hereunder
during the Employment Term in accordance with the Company's expense
authorization and approval procedures then in effect upon presentation to the
Company of an itemized account and written proof of such expenses.

            (d) Options. Employee shall be entitled to receive options and other
equity based incentives, pursuant to the Company's 1999 Long Term Incentive
Program, as and if determined, from time to time, by the Board of Directors.

            (e) Entire Compensation. The compensation provided for in this
Agreement is in full payment of the services to be rendered by the Employee to
the Company hereunder.

      5. Death or Total Disability of the Employee.

      (a) Death. In the event of the death of the Employee during the term of
this Agreement, this Agreement shall terminate effective as of the date of the
Employee's death, and the Company shall not have any further obligation or
liability hereunder except that the Company shall pay to Employee's designated
beneficiary or, if none, his estate, the portion, if any, of the Employee's Base
Salary for the period up to the Employee's date of death which remains unpaid.

      (b) Total Disability. In the event of the Total Disability (as that term
is hereinafter defined) of the Employee, the Company shall have the right to
terminate the Employee's employment hereunder by giving the Employee 10 days'
written notice thereof and, upon expiration of such 10-day period, the Company
shall not have any further obligation or liability under this Agreement except
that the Company shall pay to the Employee the portion, if any, of the
Employee's Base Salary for the period up to the date of termination which
remains unpaid, provided that if the Employee,

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<PAGE>

during any period of disability, receives any periodic payments representing
lost compensation under any health and accident policy or under any salary
continuation insurance policy, the premiums for which have been paid by the
Company, the amount of Base Salary that the Employee would be entitled to
receive from the Company during such period of disability shall be decreased by
the amounts of such payments.

      The term "Total Disability," when used herein, shall mean a mental,
emotional or physical condition which either (i) has rendered the Employee for a
period of 120 consecutive days, or for a total of 180 days during any period of
24 consecutive months, during the term of this Agreement, or (ii) in the
reasonable opinion of the Company is expected to render the Employee, for a
period of 4 months, unable or incompetent to carry out, on a substantially
full-time basis, the job responsibilities he held or tasks that he was assigned
at the time the disability was incurred. The Employee agrees, in the event of
any dispute as to the determination made pursuant to this paragraph, to submit
to a physical or other examination by a licensed physician selected by the
Company, the cost of which examination shall be paid by the Company.

      Any question as to the existence of the Disability of the Employee as to
which the Company and the Employee cannot agree shall be determined in writing
by a qualified independent physician mutually acceptable to the Employee and the
Company. If the Employee and the Company cannot agree as to a qualified
independent physician, each shall appoint a physician and those two physicians
shall select a third who shall make such termination.

      6. Termination of Employment. In addition to termination pursuant to
paragraph 5, the Company may discharge the Employee and thereby terminate his
employment hereunder for the following reasons ("For Cause"): (i) habitual
intoxication which materially affects the Employee's performance; (ii) drug
addiction; (iii) conviction of a felony adversely affecting the Company or the
Employee's ability to perform his duties hereunder; (iv) adjudication as an
incompetent; (v) misappropriation of corporate funds or other acts of
dishonesty; or (vi) the Employee's breach of this Agreement in any other
material respect.

      In the event that the Company shall discharge the Employee pursuant to
this paragraph 6, the Company shall not have any further obligations or
liability under this Agreement.

      In the event of either a breach of this Agreement by the Company or a
change in control of the Company, as defined below, at Employee's option,
Employee shall have the right to terminate this Agreement. Upon such election to
terminate by Employee: (a) the provisions of Section 8 herein shall be deemed
terminated and (b) Employee shall receive a lump sum payment from the Company
which shall equal to (i) the total of Employee's salary plus all incentive
compensation for the remaining portion of the term of this Agreement, plus (ii)
the cash value of all benefits which would have been received by Employee for
the remaining portion of the term of this Agreement, plus (ii) the cash value of
all unexercised stock options (whether or not vested) or the cashless exercise
value thereof. For the purposes of this Section, a "change in control of the
Company" shall be deemed to occur upon the transfer of ownership of 35% or more
of the voting control of the Company.

      7. Non-Disclosure.

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            (a) Non-Disclosure. The Employee recognizes and acknowledges that he
will have access to certain confidential information of the Company and that
such information constitutes valuable, special and unique property of the
Company. The Employee agrees that he will not, for any reason or purpose
whatsoever, during or after the term of his employment, use any of such
confidential information or disclose any of such confidential information to any
party without express authorization of the Company, except as necessary in the
ordinary course of performing his duties hereunder. The obligation of
confidentiality imposed by this subparagraph shall not apply to information
which appears in issued patents or printed publications or which otherwise
becomes generally known in the industry through no act of the Employee in breach
of this Agreement.

            (b) Inventions, Designs and Product Developments. All inventions,
discoveries, concepts, improvements, formulas, processes, devices, methods,
innovations, designs, ideas and product developments (collectively, the
"Developments"), developed or conceived by Employee, solely or jointly with
others, whether or not patentable or copyrightable, at any time during the
Employment Term or within one year after the termination hereof and which relate
to the actual or planned business activities of the Company and all of the
Employee's right, title and interest therein, shall be the exclusive property of
the Company. The Employee hereby assigns, transfers and conveys to the Company
all of his right, title and interest in and to any and all such Developments.
Employee shall disclose fully, as soon as practicable and in writing, all
Developments to the Board of Directors of the Company. At any time and from time
to time, upon the request of the Company, the Employee shall execute and deliver
to the Company any and all instruments, documents and papers, give evidence and
do any and all other acts which, in the opinion of counsel for the Company, are
or may be necessary or desirable to document such transfer or to enable the
Company to file and prosecute applications for and to acquire, maintain and
enforce any and all patents, trademark registrations or copyrights under United
States or foreign law with respect to any such Developments or to obtain any
extension, validation, reissue, continuance or renewal of any such patent,
trademark or copyright. The Company will be responsible for the preparation of
any such instruments, documents and papers and for the prosecution of any such
proceedings and will reimburse the Employee for all reasonable expenses the
Employee incurs upon authorization of the Board of Directors of the Company.

      8. Non-competition. The Employee agrees that during the term of this
agreement and for a period of one (1) year thereafter, the Employee shall not,
unless acting pursuant hereto or with the prior written consent of the Board of
Directors of the Company, directly or indirectly own, manage, operate, finance,
join, control or participate in the ownership, management, operation, financing
or control of, or be connected as an officer, director, employee, partner,
principal, agent, representative, consultant or otherwise with any business or
enterprise engaged in the business of publishing computer software which
competes with the products of the Company;

      provided, however, that this provision shall not be-construed to prohibit
the ownership by the Employee of not more than 10% of any class of the
outstanding equity securities of any corporation which is engaged in any of the
foregoing businesses having a class of securities registered pursuant to the
Securities Exchange Act of 1934. In the event that the provisions of this
Section should ever be adjudicated to exceed the time, geographic, service or
product limitations permitted by applicable law in any jurisdiction, then such
provisions shall be deemed reformed in such jurisdiction to the maximum time,
geographic, service or product limitations permitted by applicable law.

                                                                              14
<PAGE>

      9. Equitable Relief; Survival.

            (a) The Employee acknowledges that the restrictions contained in
paragraphs 7(a), 7(b) and 8 hereof are, in view of the nature of the business of
the Company, reasonable and necessary to protect the legitimate interests of the
Company, and that any violation of any provisions of those Sections will result
in irreparable injury to the Company. The Employee also acknowledges that the
Company shall be entitled to temporary and permanent injunctive relief, without
the necessity of proving actual damages, and to an equitable accounting of all
earnings, profits and other benefits arising from any such violation, which
rights shall be cumulative and in addition to any other rights or remedies to
which the Company may be entitled. In the event of any such violation, the
Company shall be entitled to commence an action for temporary and permanent
injunctive relief and other equitable relief in any court of competent
jurisdiction and Employee further irrevocably submits to the jurisdiction of any
California State court or Federal court sitting in the Northern District of
California over any suit, action or proceeding arising out of or relating to
paragraph 7 or 8. The Employee hereby waives, to the fullest extent permitted by
law, any objection that he may now or hereafter have to such jurisdiction or to
the venue of any such suit, action or proceeding brought in such a court and any
claim that such suit, action or proceeding has been brought in any inconvenient
forum. Effective service of process may be made upon the Employee by mail under
the notice provisions contained in paragraph 12 hereof.

            (b) Survival of Covenants. The provisions of paragraphs 7 and 8
shall survive the termination of this Agreement.

      10. Remedies Cumulative; No Waiver. No remedy conferred upon the Company
by this Employment Agreement is intended to be exclusive of any other remedy,
and each and every such remedy shall be cumulative and shall be in addition to
any other remedy given hereunder or now or hereafter existing at law or in
equity. No delay or omission by the Company in exercising any right, remedy or
power hereunder or existing at law or in equity shall be construed as a waiver
thereof;, and any such right, remedy or power may be exercised by the Company
from time to time and as often as may be deemed expedient or necessary by the
Company in its sole discretion.

      11. Enforceability. If any provision of this Agreement shall be invalid or
unenforceable, in whole or in part, then such provision shall be deemed to be
modified or restricted to the extent and in the manner necessary to render the
same valid and enforceable, or shall be deemed excised from this Agreement, as
the case may require, and this Agreement shall be construed and enforced to the
maximum extent permitted by law, as if such provision had been originally
incorporated herein as so modified or restricted, or as if such provision had
not been originally incorporated herein, as the case may be.

      12. 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 deemed duly given if (and then two
business days after) it is sent by registered or certified mail, return receipt
requested, postage prepaid, and addressed to the intended recipient as set forth
below:

         If to Company:                              Copy to:

                                                                              15
<PAGE>

      Aladdin Systems Holdings, Inc.     Elias Goodman Shanks & Zizmor, LLP
      165 Westridge                      370 Lexington Avenue
      Watsonville, CA95076-4159          19th Floor
      Attention: President               New York, NY 10017
                                         Attention: Paul Goodman, Esq.

      If to Employee:

      Jonathan Kahn
      c/o Aladdin Systems
      165 Westridge
      Watsonville, CA95076-4159

      Any party hereto may give any notice, request, demand, claim or other
communication hereunder using any other means (including personal delivery,
expedited courier, messenger service, telecopy, telex, ordinary mail, or
electronic mail), but no such notice, request, demand, claim, or other
communication shall be deemed to have been duly given unless and until it
actually is received by the individual for whom it is intended. Any party hereto
may change the address to which notices, requests, demands, claims, and other
communications hereunder are to be delivered by giving the other parties hereto
notice in the manner herein set forth.

      13. Governing Law. This Agreement shall be governed by and construed in
accordance with the internal laws (and not the law of conflicts) of the State of
California.

      14. Contents of Agreement; Amendment and Assignment. This Agreement sets
forth the entire understanding between the parties hereto with respect to the
subject matter hereof and supersedes and is instead of all other employment
arrangement between the Employee and the Company. This agreement cannot be
changed, modified or terminated except upon written amendment duly executed by
the parties hereto. All of the terms and provisions of this Agreement shall be
binding upon and inure to the benefit of and be enforceable by the respective
heirs, representatives, successors and assigns of the parties hereto, except
that the duties and responsibilities of the Employee hereunder are of a personal
nature and shall not be assignable in whole or in part by the Employee.

      IN WITNESS WHEREOF, this Agreement has been executed by the parties on the
date first above written.

                                      ALADDIN SYSTEMS HOLDINGS, INC.

                                      By: /s/ Darryl Lovato

                                                                              16
<PAGE>

                                          Its:   President

                                      EMPLOYEE:

                                      /s/ Jonathan Kahn

                                                                              17

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