Document:

Mr. Matt Hill

3400 Airport Ave, Building D

Santa Monica, CA 90405

 

	
  

	
Re:

	
Employment Agreement withWebXU, Inc.

 

Dear Matt:

 

On behalf of WebXU, Inc., a Delaware corporation(the “Company”), a Delaware corporation (“WebXU”), I am pleased to offer you employment as CEO of the Companyon the terms and conditions set forth in this letter agreement (this “Agreement”). You may accept this Agreement by signing and returning a copy of this Agreement to the Company as provided below.

 

1. Term of Employment. Your employment under this Agreement shall commence on November 15th, 2010 (“Start Date”) and continue until November 15th, 2014, unless it is terminated earlier either by you or the Company or is extended by both you and the Company in a signed writing (“Separation Date”). Your employment under this Agreement is terminable at will by you orthe Company at any time (for any reason or for no reason) subject to the provisions of Section 3.

 

2. Position and Duties. During the term of this Agreement, the Company shall employ you as the CEO of the Company and you shall report to the Board of Directors of the Company (the “Board”). Your duties shall include the duties set forth in the bylaws of the Company for your position and any other duties the Board may delegate to you from time to time that are not inconsistent with duties assigned to a CEO of a publicly-traded company of comparable size and with a similar business as the Company. You agree, beginning November 15th, 2010and until the Separation Date, to commit substantially all of your working time, attention and efforts to the position on a full-time basis. Subject to the foregoing, the Company acknowledges that, outside of your obligations to the Company, you may also be spending a reasonable amount of time on Permitted Activities (per below ). Upon your employment, the Board shall appoint you to serve as Chairman of theWebXU Board of Directors.  Thereafter, you may be elected and re-elected to the Board in accordance with the terms of the bylaws ofWebXU. This Agreement is personal to you and you may not assign or delegate any of your rights or obligations hereunder without first obtaining the written consent of the Company by action of the Board.  Permitted Activities, shall include; minority interestsand board participation in companies both in related and unrelated industries, and majority interests in companies in industries unrelated to that of the Company.  A list of the companies will be submitted to the Board of Directors of the Company.

 

3. Compensation and Benefits. In consideration for your services to the Company during the time period in which this Agreement is effective, you shall receive the following compensation and benefits from the Company.

  

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(a) Base Salary. The Company shall pay you an annual base salary at the rate of Two hundred and twenty-five thousand dollars ($225,000) per year.  The salary will be paid in installments according to the Company’s regular payroll policy. The Company shall withhold and deduct all applicable federal and state income and employment and disability taxes from your base salary as required by applicable laws. You shall be eligible for discretionary annual increases in your base salary in connection with the Company’s annual executive compensation and performance review conducted by the Board.

 

(b) Annual Incentive Opportunity. You shall be eligible to participate in any bonus plan which the Company may maintain or establish for the executives of the Company on the terms that apply to the executives of the Company. Until the Company establishes such a plan, it shall provide you with an individual annual incentive opportunity under which you would be eligible to receive an annual target bonus based on the achievement of individual and/or corporate objectives set by the Compensation Committee of the Board. Such annual target bonus shall be set at One Hundred percent (100%) of your annual base salary provided the Company is EBITDA positive, and an additional ten percent of your annual base salary (10%) for every $1 million over $1 million in EBITDA . The incentive payment shall be in cash.

 

(c) Stock Options. The Company shall grant you options to purchase the common stock of the Companyin accordance with the WebXU, Inc. 2010Equity Incentive Plan. Stock Options will have a cashless exercise.

 

(1) Stock Option. The Company shall grant you stock options in the amount of three million (3,000,000)optionsto purchase WebXU common stock on the date of the commencement of your employment with the Company. These stock options will have a twenty-four(24) month vesting schedule:

	
  

	
a.

	
Twelve-month cliff: After12 months you will have vested 1,500,000 options and you will then vest monthly of the balance of 1,500,000 shares at the rate of 1/12.The strike price and option grant price will be set by the compensation committee.

 

(2) Milestone Option Grant.After the Stock Option grant (1) has been achieved, The Company shall also grant you a second, stock option grant (per the earn out in (2.i)) of the common stock of the Company(the “Milestone Grants”).

 

The Milestone Stock Option Grant shall be earned upon the achievement of the following performance milestones:

 

(i) Fiftythousand (50,000) options shall be granted for each One Hundred Thousand Dollars ($100,000) in cumulative EBITDA over any 4 consecutive quarters. Additionally, The strike price and option grant price will be set by the compensation committee. EBITDA will be calculated as combined company EBITDA.

  

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(3) Other Benefits.

 

(a) Vacation and Sick Leave. You shall be entitled to accrue up to three (3) weeks of paid vacation each year of employment under this Agreement plus sick leave on the same basis as all other executives of the Company in accordance with the terms and conditions of the vacation and sick leave policies of the Company.

 

(b) Termination and Change of Control Payments and Benefits.

 

(1) Termination for Cause or Termination for Other than Good Reason. In the event that your employment with the Company is terminated by the Company for “Cause” (as defined below) or is terminated by you for reasons other than “Good Reason” (as defined below) then you shall be entitled to payment of your accrued but unpaid salary and vacation pay through the date of the termination of your employment plus any earnedbut unpaid incentive payments tied to your quarterly/annual bonus targets achieved through the termination date.

 

(2) Termination Without Cause or for Good Reason or Termination Due to Death or Disability. In the event that your employment as the Chief Executive Officer of the Company is terminated by the Company without Cause,or is terminated by you due to a Good Reason, or is terminated due to your death or Disability, then you or your estate (if applicable) shall be entitled to payment of your accrued but unpaid salary and vacation pay through the date of the termination of your employment plus any earnedbut unpaid incentive payments tied to your quarterly bonus targets achieved through the termination date plus the following severance benefits in this Section 3(b)(2) provided that you (unless you are deceased) execute an effective release in a form to be provided by the Company with terms substantially as set forth in the attached Exhibit B:

 

(i) Cash Severance Payment. The Company shall pay you or your estate (if applicable) an additional twelve (12) months of your then current base salary, and your target bonus (provided the company is EBITDA positive for the preceding 12 months from the termination date).The Company shall also continue your health insurance coverage for such twelve-month period.

 

(ii) Acceleration of Vesting of Standard Grant. The vesting of your Standard grant shall be accelerated in the amount of 3,000,000 shares of the common stock of the Company upon termination of your employment.

 

 (c) Definitions.

 

As used in this Agreement, the following terms shall have the meanings set forth below:

 

(1) “Cause” shall mean:

 

(i) your failure (other than due to Disability) to materially comply with written Company policies generally applicable to Company officers or employees or any directive of the Board that is reasonably achievable, that is not inconsistent with your position as CEO or the fulfillment of your fiduciary duties and that is not otherwise prohibited by law or established public policy, subject to notice and 30 day cure period to the extent curable;

  

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(ii) your engagement in willful misconduct against the Company that is materially injurious to the Company;

 

(iii) your engagement in any activity that is a conflict of interest or competitive with the Company (other than (1) any action not taken in bad faith and which is promptly remedied by you upon notice by the Board, (2) your management of current personal investments which do not require your active participation in the management or the operation of the investments, such service does not constitute a breach of your fiduciary duties to the Company or prevents you from discharging all of your duties under this Agreement (the activities described in clause (2) are hereafter referred to as “Permitted Activities”);

 

(iv) your engaging in any act of fraud or dishonesty against the Company or any of its Affiliates or any material breach of federal or state securities or commodities laws or regulations;

 

(v) your engaging in an act of assault or other acts of violence in the workplace;

 

(vi) your harassment of any individual in the workplace based on age, gender or other protected status or class or violation of any policy of the Company regarding harassment (subject to investigation by an independent third party of such harassment claim); or

 

(vii) your conviction, guilty plea or plea of nolo contendre for any felony charge.

            (2) Reserved

 

(3) “Disability” shall mean a disability as determined under the Company’s long-term disability plan that prevents you from performing your duties under this Agreement (even with a reasonable accommodation by the Company) for a period of six months or more.

 

(4) “EBITDA” shall mean the Company’s reported earnings before interest, taxes, depreciation and amortization expenses.

 

(5) “Good Reason” shall mean any one of the following without your consent:

 

(i) a demotion or any action by the Company which results in diminution of your position, authority, duties or responsibilities (other than any insubstantial action not taken in bad faith and which is promptly remedied by the Company upon notice by you);

  

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(ii) requirement that you report to work more than 60 miles from the Company’s existing headquarters (not including normal business travel required of your position);

 

(iii) a reduction in your base salary or benefits (unless, in the case of a reduction in benefits only, such reduction in benefits applies to all officers of the Company);

 

(iv) a material breach by the Company of its obligations hereunder which is not cured within thirty (30) days following written notice to the Board by you; or

 

 (v) any failure by a successor to the Company to assume and agree to perform the Company’s obligations hereunder.

 

4. Employment and Post Termination Covenants. By accepting the terms of this Agreement and as a condition for the termination payments and benefits contemplated by Section 3(f)(2)(i), you hereby agree to the following covenants in addition to any obligations you may have by law and make the following representations.

 

(a) Confidentiality. You acknowledge that, in connection with your employment by the Company, you will have access to trade secrets of the Company and other information and materials which the Company desires to keep confidential, including customer lists, supplier lists, financial statements, business records and data, marketing and business plans, and information and materials relating to the Company’s services, products, methods of operation, key personnel, proprietary software and other proprietary intellectual property and information disclosed to the Company of third parties to which the Company owes a duty of nondisclosure (collectively, the “Confidential Information”); provided, however, that Confidential Information does not include information which (i) is or becomes publicly known other than as a result of your actions in violation of this Agreement; (ii) is or becomes available to you from a source (other than the Company) that you reasonably believe is not prohibited from disclosing such information to you by a contractual or fiduciary obligation to the Company, (iii) has been made available by the Company, directly or indirectly, to a non-affiliated third party without obligation of confidentiality; or (iv) you are obligated to produce as a result of a court order or pursuant to governmental action or proceeding, provided that you give the Company prompt written notice of such requirement prior to such disclosure and assistance in obtaining an order protecting such Confidential Information from public disclosure. You covenant and agree that, both during and after the term of your employment with the Company, you will keep secret all Confidential Information and will not disclose, reveal, divulge or otherwise make known any Confidential Information to any person (other than the Company or its employees or agents in the course of performing you duties hereunder) or use any Confidential Information for your own account or for the benefit of any other individual or entity, except with the prior written consent of the Company.

  

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(b) Ownership of Intellectual Property. You agree that all inventions, copyrightable material, software, formulas, trademarks, trade secrets and the like which are developed or conceived by you in the course of your employment by the Company or on the Company’s time or property (collectively, the “Intellectual Property”) shall be disclosed promptly to the Company and the Company shall own all right, title and interest in and to the Intellectual Property. The parties expressly agree that any and all of the Intellectual Property developed by you shall be considered works made-for-hire for the Company pursuant to the United States Copyright Act of 1976, as amended from time to time. In order to ensure that the Company shall own all right, title and interest in and to the Intellectual Property in the event that any of the Intellectual Property is not deemed a work made-for-hire (as defined in the Copyright Act of 1976) and in any other event, you hereby sell and assign all right, title and interest in and to all such Intellectual Property to the Company, and you covenant and agree to affix to the Intellectual Property appropriate legends and copyright notices indicating the Company’s ownership of all Intellectual Property and all underlying documentation to the extent reasonably appropriate, and shall execute such instruments of transfer, assignment, conveyance or confirmation as the Company reasonably considers necessary to transfer, confirm, vest, perfect, maintain or defend the Company’s right, title and interest in and to the Intellectual Property throughout the world. Your obligation under this Section 4(b) to assign to the Company inventions created or conceived by you shall not apply to an invention that you developed entirely on your own time without using the Company’s equipment, supplies, facilities, or trade secret information, provided that those inventions (1) do not or did not relate directly, at the time of conception or reduction to practice of the invention, to the Company’s business as conducted at such time or actual or demonstrably anticipated research or development of the Company; and (2) do not or did not result from any work performed by you for the Company.

 

(c) Non-Solicitation. You agree for a period of not less than one year following the last receipt of any payments under this Agreement that you shall not solicit the services or employment of the employees of the Company and you shall not divert clients or customers of the Company to the disadvantage of the Company; provided that (i) general advertisements not specifically directed at employees of the Company shall not constitute solicitation for purposes of this clause (c) and (ii) this clause (c) shall not prohibit you from hiring employees of the Company who first approach you seeking employment.

 

(d) Non-Competition. You agree not to compete directly or indirectly as a principal, partner, shareholder, limited liability company member, agent, officer, directors, employee, consultant or in any other capacity, with any current or future business of the Company during the period of your employment with the Company and during the post-employment period during which you are being paid compensation by the Company; provided that (i) this clause (d) shall not prohibit you from acquiring securities representing less than 5% of the voting interests of any entity (so long as you are not involved in the management of such entity) and (ii) this clause (d) will not prohibit you from engaging in Permitted Activities (during or after a termination of employment) to the extent you are (or would be) permitted to engage in such Permitted Activity under Section 2 of this Agreement.

  

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(e) Authorization To Work for the Company. You represent that you are legally authorized to work in the United States and that your employment with the Company shall not constitute a violation of any contractual or other legal obligation you may have to another entity or employer.

 

5. Business Expenses. You shall be entitled to reimbursement by the Company for such customary, ordinary and necessary business expenses as are incurred by you in the performance of your duties and activities associated with promoting or maintaining the business of the Company. All expenses as described in this paragraph shall be reimbursed only upon presentation by you of such documentation as may be reasonably necessary to substantiate that all such expenses were incurred in the performance of his duties in accordance with the Company’s policies

 

6. Return Of Company Property. On the Separation Date or as earlier requested by the Company, you agree to return to the Company all Company documents (and all copies thereof) and other Company property in your possession or control, including, but not limited to, Company files, correspondence, memos, notebooks, notes, drawings, records, business plans and forecasts, financial information, specifications, computer-recorded information, tangible property and equipment, credit cards, entry cards, identification badges and keys; and any materials of any kind that contain or embody any proprietary or confidential information of the Company (and all reproductions thereof in whole or in part) (collectively, the “Company Property”). You agree to conduct a good faith and diligent search of your belongings in advance of the aforementioned deadline to ensure your compliance with the provisions of this Section 6.

 

7. Binding on Successors. This Agreement shall be binding upon the Company and any entity which is a successor by merger, acquisition, consolidation or otherwise to the business formerly carried on by the Company, or an affiliate of any such entity, and becomes your employer by reason of (or as the direct result of) any direct or indirect sale or other disposition of the Company or substantially all of the assets of the business currently carried on by the Company, without regard to whether or not such person actively adopts this letter agreement.

 

8. Arbitration. You agree that any future disputes between you and the Company (the “parties”) including but not limited to disputes arising out of or related to this Agreement, shall be resolved by binding arbitration except where the law specifically forbids the use of arbitration as a final and binding remedy, or where section 8(g) below specifically allows a different remedy.

 

(a) The complainant shall provide the other party a written statement of the claim identifying any supporting witnesses or documents and the relief requested.

(b) The respondent shall furnish a statement of the relief, if any, that it is willing to provide, and identifying supporting witnesses or documents. If the matter is not resolved, the parties agree to submit their dispute to a non-binding mediation paid for by the Company, provided, however, that if the amount in dispute is $50,000 or less, this step may be waived at the election of either party.

  

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(c) If the matter is not resolved, the parties agree that the dispute shall be resolved by binding arbitration according to the California Code of Civil Procedure, including the provisions of Section 1283.05, pertaining to discovery.

 

(d) The arbitrator shall have the authority to determine whether the conduct complained of in section 8(a) violates the complainant’s rights and, if so, to grant any relief authorized by law; subject to the exclusions of section (g) below. The arbitrator shall not have the authority to modify, change or refuse to enforce any lawful term of this Agreement.

 

(e) The Company shall bear the costs of the arbitration. If the Company prevails, you shall pay any litigation costs of the Company to the same extent as if the matter had been heard in a court of general jurisdiction. Each party shall pay its own attorneys’ fees, unless the arbitrator orders otherwise, pursuant to applicable law.

 

(f) Arbitration shall be the exclusive final remedy for any dispute between the parties, such as disputes involving claims for discrimination or harassment (such as claims under the Fair Employment and Housing Act, Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act, or the Age Discrimination in Employment Act), wrongful termination, breach of contract, breach of public policy, physical or mental harm or distress or any other disputes, and the parties agree that no dispute shall be submitted to arbitration where the complainant has not complied with the preliminary steps provided for in sections (a) and (b) above.

 

(g) The parties agree that the arbitration award shall be enforceable in any court having jurisdiction to enforce this Agreement, so long as the arbitrator’s findings of fact are supported by substantial evidence on the whole and the arbitrator has not made errors of law; however, either party may bring an action in a court of competent jurisdiction, regarding or related to matters involving the Company’s confidential, proprietary or trade secret information, or regarding or related to inventions that you may claim to have developed prior to or after joining the Company, seeking preliminary injunctive relief in court to preserve the status quo or prevent irreparable injury before the matter can be heard in arbitration.

 

(h) The arbitration shall be held in the City of Los Angeles, California, unless the parties mutually agree to a different location for the arbitration.

 

9. Indemnification. As soon as practicable following the commencement of your employment with the Company, the Company shall enter into an indemnification agreement mutually acceptable to you and the Company which shall provide you with indemnification to the fullest extent permissible under Nevadalaw. In addition, the Company shall maintain a Directors and Officers insurance policy covering its directors and officers consistent with prevailing commercial practice, and you shall be entitled to indemnification as set forth in the Company’s Certificate of Incorporation and Bylaws.

  

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10. Miscellaneous.

 

(a) This Agreement constitutes the complete, final and exclusive embodiment of the entire agreement between you and the Company with regard to the terms and conditions of your employment with the Company and your anticipated termination of employment. It is entered into without reliance on any promise or representation, written or oral, other than those expressly contained herein, and it supersedes any other such promises, warranties or representations and any other written or oral statements concerning your rights to any compensation, equity or benefits from the Company, its predecessors or successors in interest.

 

(b) Subject to the mandatory arbitration provided in Section 8 above, jurisdiction and venue in any action to enforce any arbitration award or to enjoin any action that violates the terms of this Agreement shall be in the Superior Court of the County of Los Angeles or the U.S. District Court for the Central District of California.

 

(c) This Agreement may not be modified or amended except in a writing signed by both you and a duly authorized officer of the Company. This Agreement shall bind the heirs, personal representatives, successors and assigns of both you and the Company, and inure to the benefit of both you and the Company, their heirs, successors and assigns. If any provision of this Agreement is determined to be invalid or unenforceable, in whole or in part, this determination shall not affect any other provision of this Agreement and the provision in question shall be modified by the court so as to be rendered enforceable in a manner consistent with the intent of the parties insofar as possible. Headings and subheadings in this Agreement are solely for convenience and do not constitute terms of this Agreement.

 

(d) This Agreement may be signed in counterparts and the counterparts taken together shall constitute one agreement. Facsimile signatures shall be deemed as effective as original signatures.

 

(e) This Agreement shall be deemed to have been entered into and shall be construed and enforced in accordance with the laws of the State of California as applied to contracts made and to be performed entirely within California.

 

If this Agreement is acceptable to you, please sign below and return the original, fully executed Agreement to Jeff Aaronson, Corporate Secretary and CFO of the Company. A copy of the Agreement is also being provided to you for your records.

  

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I and the other members of the Board of Directors of the Company look forward to your future contributions to the Company.

 

Sincerely,

 

	
WebXU Inc.

	  	  
	
By:  

	
/s/ Mike Warsinske

	  	
Mike Warsinske

	  	
Member –Board of Directors

 

AGREED AND ACCEPTED:

 

	
/s/ Matt Hill

	  	
Nov 15 2010

	
Matt Hill

	  	
Date

  

Page 10 of 10EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (this “Agreement”) is entered into as of November 15th, 2010, by and between WebXU, Inc., a Delaware corporation (the “Company”), and Jeffrey Aaronson, an individual (the “Employee”).

WHEREAS, the Company desires to employ the Employee, and the Employee desires to accept such employment, on the terms and subject to the conditions hereinafter set forth;

NOW, THEREFORE, in consideration of the premises and mutual covenants herein contained, the parties hereto hereby agree as follows:

1.           Term of Employment.

Subject to the terms and conditions of this Agreement, including the provisions hereof governing termination, the Company hereby employs the Employee and the Employee hereby accepts that the Employee shall be an employee-at-will, without a specified term of employment.  As used herein, the term “Employment Period” shall mean the entire period of time that the Employee is employed by the Company.

2.           Position; Duties of Employment.

(a)           The Company hereby employs the Employee as Chief Financial Officer for the Company.  The Employee shall be responsible for managing various financial operations of the company, including reporting the company’s financial performance to the public market on time and accurately, assisting in acquisitions of businesses, managing financial affairs including investment in the company, and internal controls such as, payroll, and other such financial responsibilities. (the “Services”).  The Employee shall report to the CEO of the Company; provided, however, that the Company, in its sole discretion, shall have the right to make changes in the Employee’s reporting assignment.  In addition to the Services, the Employee shall perform such duties as are typically associated with the position in which he is employed, and any other services that the Company may reasonably require of him.

(b)           The Employee shall (i) perform his duties faithfully, diligently and to the best of his ability in accordance with the reasonable directions and orders of the person to whom he reports, and the Company’s Board of Directors and their officer designees, (ii) devote substantially all of his working time, efforts and attention for the benefit of the Company and to the performance of his duties and responsibilities under this Agreement, (iii) shall not, without Company’s prior written consent, render to others services of any kind for compensation, engage in any other business activity or own any equity interest that would materially interfere with the performance of his duties under this agreement, and (iv) shall observe and comply with all Company policies of which the Employee has been advised and as the same shall exist or be created from time to time.  Employee represents to Company that he has no other outstanding commitments inconsistent with any of the terms of this agreement or the services to be rendered under it.

  

 

  

3.           Compensation.

The Company shall pay the Employee, as compensation for Employee’s Services and his performance under this Agreement as follows:

	
  

	
(a)

	
A salary of One Hundred and Seventy Thousand Dollars ($170,000.00) per annum, payable in periodic installments in accordance with the Company’s regular payroll practices;

	
  

	
(b)

	
A standard grant of Two Hundred and Fifty-Thousand Shares (250,000) of the Company’s employee stock options, which options shall vest according to, and be governed by, standard terms applicable to Company’s grant of employee stock options;

	
  

	
(c)

	
All earned and vested options as of the date of termination must be exercised within 60 days of such termination.  All vested options will have a cashless exercise and vesting will accelerate upon change of control.

On an annual basis, the Company shall review the Employee’s performance and other relevant factors relating to salary, and at the time of such review, the salary may be increased as determined in the sole discretion of the Compensation Committee of the Board of Directors of the Company.

4.           Benefits.

The Company shall provide the Employee with coverage pursuant to a medical plan which shall be selected by the Company in its sole discretion.  The Employee shall also be entitled to participate in all other benefit plans provided by the Company to which Employee is eligible.

5.           Reimbursement of Expenses.

The Company shall reimburse the Employee for normal and reasonable business expenses incurred by him in the course of his employment, including the reasonable costs for transportation and accommodations when the Employee is required to travel away from the location at which he is employed.  Such reimbursement shall be subject to the Company’s standard procedures with respect to reimbursement, including such matters as pre-approval requirements, lodging and meal allowances, and reimbursement rates for automobile travel.

6.           Confidentiality.

The Employee acknowledges that, in connection with his employment by the Company, he will have access to trade secrets of the Company and other information and materials which the Company desires to keep confidential, including customer lists, supplier lists, financial statements, business records and data, marketing and business plans, and information and materials relating to the Company’s services, products, methods of operation, key personnel, proprietary software and other proprietary intellectual property and information disclosed to the Company of third parties to which the Company owes a duty of nondisclosure (collectively, the “Confidential Information”); provided, however, that Confidential Information does not include information which (i) is or becomes publicly known through the lawful action of any party other than the Employee; (ii) has been made available by the Company, directly or indirectly, to a non-affiliated third party without obligation of confidentiality; or (iii) the Employee is obligated to produce as a result of a court order or pursuant to governmental action or proceeding, provided that the Employee gives the Company prompt written notice of such requirement prior to such disclosure and assistance in obtaining an order protecting such Confidential Information from public disclosure.  The Employee covenants and agrees that, both during and after the Employment Period, he will keep secret all Confidential Information and will not disclose, reveal, divulge or otherwise make known any Confidential Information to any person (other than the Company or its employees or agents in the course of performing his duties hereunder) or use any Confidential Information for his own account or for the benefit of any other individual or entity, except with the prior written consent of the Company.

  

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7.           Ownership of Intellectual Property.

The Employee agrees that all inventions, copyrightable material, software, formulas, trademarks, trade secrets and the like which are developed or conceived by the Employee in the course of his employment by the Company or on the Company’s time or property (collectively, the “Intellectual Property”) shall be disclosed promptly to the Company and the Company shall own all right, title and interest in and to the Intellectual Property.  The parties expressly agree that any and all of the Intellectual Property developed by the Employee shall be considered works made-for-hire for the Company pursuant to the United States Copyright Act of 1976, as amended from time to time.  In order to ensure that the Company shall own all right, title and interest in and to the Intellectual Property in the event that any of the Intellectual Property is not deemed a work made-for-hire (as defined in the Copyright Act of 1976) and in any other event, the Employee hereby sells and assigns all right, title and interest in and to all such Intellectual Property to the Company, and the Employee covenants and agrees to affix to the Intellectual Property appropriate legends and copyright notices indicating the Company’s ownership of all Intellectual Property and all underlying documentation to the extent reasonably appropriate, and will execute such instruments of transfer, assignment, conveyance or confirmation as the Company considers necessary to transfer, confirm, vest, perfect, maintain or defend the Company’s right, title and interest in and to the Intellectual Property throughout the world.  The Employee’s obligation under this Section 7 to assign to the Company inventions created or conceived by the Employee shall not apply to an invention that the Employee developed entirely on his or her own time without using the Company’s equipment, supplies, facilities, or trade secret information, provided that those inventions (1) do not or did not relate, at the time of conception or reduction to practice of the invention, to the Company’s business or actual or demonstrably anticipated research or development of the Company; and (2) do not or did not result from any work performed by the Employee for the Company.

8.           Covenant to Deliver Business Materials and to Report.

The Employee acknowledges and agrees that all written materials including, without limitation, all memoranda, notes, records, reports, programs, algorithms and other documents or codes (and all copies thereof) concerning the business or affairs of the Company including, without limitation, the Intellectual Property, which he created or obtained or which otherwise came into his possession or control while employed with the Company, are property of the Company, and the Employee shall promptly return all copies thereof to the Company after the termination of his employment.  In addition, the Employee agrees to render to the Company such reports as it may reasonably request with respect to the activities undertaken by him or conducted under his direction in connection with his employment by the Company.

  

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9.           Non-Competition Agreement.

As used in this Agreement, the following capitalized terms shall have the following meanings: (i) “Company’s Products/Services” is defined as operating, managing, and researching, developing, marketing and selling products or services with on-line websites; (ii) “Competitive Business Activity” is defined as the operation, management, research, development, marketing or sale of any product or service that is materially similar to, or is used for the same purpose as, or otherwise competes with, the Company’s Products/Services; (iii) “Competitor” is defined as any business entity that is engaged in a Competitive Business Activity in California or applicable to the top level Internet domains ending in .com, .net and .org; (iv) “Restrictive Period” is the period of time from the date of this Agreement through the date that is one (1) year after Employee’s employment by the Company ceases; (v) “Client” is defined as any person or entity for whom the Company performed work or services during the one-year period prior to the termination of Employee’s employment with the Company, or to whom the Company sold products during same one-year period; and (vi) “Potential Client” is defined as any person or entity with whom the Company has engaged in substantial contact with respect to the performance of work or services, or for the sale of the Company’s Products/Services, during same one-year period.

Because of his employment by Company, Employee will have access to trade secrets, data and confidential information about Company, its products, its customers, and its methods of doing business.  In consideration of his access to this information, Employee agrees that during the Restrictive Period, Employee shall not directly or indirectly (i) have an ownership interest in, manage, operate, control, solicit business for, or otherwise be involved with the management, operation, or control of any Competitor; (ii) perform any work or services (either as an employee, independent contractor or consultant) for any Competitor, provided however, this restriction shall not preclude Employee from performing work or services at any time exclusively for a division or subsidiary of a Competitor if neither Employee nor such division or subsidiary are engaged in any Competitive Business Activity; (iii) solicit or accept business, which constitutes a Competitive Business Activity, from any Client or Potential Client; (iv) solicit or attempt to solicit, or obtain Confidential Information from any past or present employee, Client or customer of the Company or any of its subsidiaries; or (v) perform any work or services, which constitutes a Competitive Business Activity, for any Client or Potential Client, either as an employee, consultant or independent contractor.  In addition, during the Restrictive Period, Employee shall not solicit, induce, or attempt to induce any Client or Potential Client (y) to cease doing business with the Company, or to otherwise reduce the amount of business that it does with the Company; or (z) to do business, which constitutes a Competitive Business Activity, with any person or entity.

Employee further agrees that during the Restrictive Period, Employee shall not, either on his own account or for any other person or entity, solicit, encourage, induce or attempt to induce any employee of the Company to leave his or her employment, or to accept employment with any other person or entity.

The restrictions on certain competitive activities contained in this Section 9 shall be deemed to consist of a series of separate covenants.  It is the intent of the parties to this Agreement that if a determination is made by a court of competent jurisdiction that the character, duration, or geographical scope of any covenant in this Section 9 is unreasonable in light of the circumstances, or if the court shall refuse to enforce all of the covenants included herein because, taken together, they are more extensive than necessary to assure the Company of the said intended benefit, then this Section 9 shall be construed by the court in such a manner as to impose only those restrictions as are reasonable in light of the circumstances as they then exist and as are necessary to assure the Company of the intended benefit of this Section 9, and the other restrictions shall be deemed eliminated from this Agreement.

Employee acknowledges that he has carefully read and considered the provisions of this Section 9 and has consulted legal counsel of his choice with respect thereto and, having done so, Employee agrees that the restrictions on certain competitive activities set forth herein (including, but not limited to, the time periods during which the restrictions are effective and the geographical area of restriction set forth above) are fair and reasonable in light of the circumstances, and are reasonably required for the protection of the interests of the Company.

  

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10.         Right of Injunction.

The Employee acknowledges that the harm and injury to the Company which would result from the breach or threatened breach of any of the provisions of Sections 6, 7, 8 or 9 of this Agreement (the “Injunctive Sections”) by the Employee cannot be adequately compensated for in money damages.  The Employee further acknowledges that any breach of any of the provisions of the Injunctive Sections by him would cause the Company irreparable harm.  Therefore, the Employee agrees that in the event of a breach or threatened breach of any of the provisions of the Injunctive Sections by him, the Company in a lawsuit seeking an injunction restraining the Employee from such actual or threatened breach, shall not be required to prove (i) that irreparable harm or injury would result from the breach of said Injunctive Sections, or (ii) that the Company has no adequate remedy at law.

The Employee shall reimburse the Company for all reasonable costs and expenses (including, without limitation, reasonable attorneys’ fees and expenses) incurred in connection with the enforcement of any of the provisions of the Injunctive Sections if it is determined that the Company was entitled to such relief.

Nothing contained in this Section 10 shall be construed as prohibiting the Company or the Employee from pursuing any other remedies (including, without limitation, an action for damages) which may be available for any actual or threatened breach of any provision this Agreement, and the pursuit of an injunction or any other particular remedy shall not be deemed to be an election of such remedy to the exclusion of any other remedy.

11.         Termination of Employment.

(a)  Termination by Company.  Notwithstanding anything to the contrary contained herein, the Company may terminate the employment of the Employee, with or without cause, at any time during the Employment Period, upon written notice to the Employee.  Employee will receive Three Months (3 months) paid severance.

(b)  Termination Due to Disability.  Notwithstanding anything to the contrary contained herein, but subject to the provisions of applicable law, the Company shall have the right to terminate the Employee’s employment by the Company if he becomes Disabled (as hereinafter defined) during the Employment Period.  As used herein, “Disabled” shall mean that the Employee has a physical or mental condition which prevents him from performing the essential functions required of him pursuant to this Agreement, in his normal and regular manner, which condition has continued for a period of 60 consecutive business days or existed for a total of at least 90 business days in any twelve month period as determined in good faith by the Board of Directors of the Company.  Employee will receive Six Months (6 months) paid severance.

(c)  Termination Due to Death.  Notwithstanding anything to the contrary contained herein, the Employee’s employment by the Company shall terminate immediately if he dies during the Employment Period.  Employee will receive Six Months (6 months) paid severance.

(d)    Effect of Termination.         Upon termination of this Agreement for any reason, Employee’s employment by the Company shall terminate.  Employee will receive Three Months (3 months) paid severance.

12.         Non-Disparagement.  The Employee will not during his employment with the Company or at any time thereafter, publicly disparage the Company, its affiliates and shareholders or any of their officers, directors, employees or agents, other than in connection with disclosures required by applicable law, regulation or order of court or governmental agency.

  

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13.         Miscellaneous Provisions.

(a)  Survival of Certain Obligations.           The Employee’s duties and obligations under Sections 6, 7, 8, 9, 12 and 13 and the Company’s rights under Section 10 of this Agreement and any other provision hereof specifying an obligation or a right of a party after the termination of Employee’s employment or this Agreement, for any reason whatsoever, shall survive such termination and shall remain in full force and effect.

(b)  Successors and Assigns; Prohibition on Assignment.  This Agreement is binding upon, and shall inure to the benefit of, the Company and its successors and assigns.  With respect to the Employee, this is an agreement for the performance of personal services.  Absent the prior written consent of the Company, and subject to the terms of the Employee’s will and the laws of descent and distribution, the Employee shall not assign, transfer, convey, encumber or otherwise dispose of any of his rights under this Agreement, and likewise, he shall not assign any of his duties or obligations under this Agreement.

(c)  No Conflicts.  The Employee represents and warrants to, and covenants with, the Company that the execution and delivery by him of this Agreement do not, and his performance of his obligations hereunder will not, constitute a breach of any agreement, written or oral, to which he is a party or by which he is bound.

(d)  Entire Agreement.  This Agreement contains all of the representations, covenants and agreements between the parties hereto with respect to the subject matter hereof, and constitutes the entire agreement of the parties with respect to said subject matter.  This Agreement supersedes any and all other prior or contemporaneous agreements, whether oral or in writing, between the parties with respect to the subject matter thereof.

(e)  Construction in Favor of Validity.  It is the desire and intent of the parties hereto that the provisions of this Agreement be enforced to the fullest extent permissible under the laws and public policies applied in each jurisdiction in which enforcement is sought.  Accordingly, if any particular provision of this Agreement shall be adjudicated by a court of competent jurisdiction to be invalid, prohibited or unenforceable for any reason, such provision, as to such jurisdiction, shall be ineffective, without invalidating the remaining provisions of this Agreement or affecting the validity or enforceability of such provision in any other jurisdiction.  Notwithstanding the foregoing, if such provision could be more narrowly drawn so as not to be invalid, prohibited or enforceable in such jurisdiction, it shall, as to such jurisdiction, be so narrowly drawn, without invalidating the remaining provisions of this Agreement or affecting the validity or enforceability of such provision in any other jurisdiction.

(f)  Amendment and Waiver.     This Agreement may not be amended or modified except by an instrument in writing signed by the party to be bound thereby.

No delay by either party in exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any right, power or privilege hereunder.  Any failure by either party hereto to require strict performance by the other party or any waiver by any party hereto of any term, covenant or agreement herein shall not be construed as a waiver of any other breach of the same or any other term, covenant or agreement herein.

(g)      Governing Law.  This Agreement shall be governed by and construed in accordance with the laws of the State of California without giving effect to any principles of conflicts of law.  Each party consents to the exclusive venue of the courts of Los Angeles County, California, for resolving any disputes, claims or actions arising out of this Agreement.

  

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(h)  Notices.  Any notice required or permitted to be given hereunder shall be (a) in writing, (b) effective on the first business day following the date of receipt, and (c) delivered by one of the following means: (i) by personal delivery; (ii) by prepaid, overnight package delivery or courier service; or (iii) by the United States Postal Service, first class, certified mail, return receipt requested, postage prepaid.  All notices given under this Agreement shall be addressed to the addresses stated on the signature page(s) to this Agreement, or to new or additional addresses as the parties may be advised in writing.

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IN WITNESS WHEREOF, this Agreement was executed by the undersigned as of the date first above written.

	
WebXU, Inc.

	
(“Company”)

	  
	
By:  

	
/s/ Matt Hill

	
Name:  Matt Hill

	
Its: CEO

	
Address:  3400 Airport Ave

	
  Building D

	
  Santa Monica CA 90405

	  
	
Jeffrey Aaronson

	
(“Employee”)

	  
	
/s/ Jeffrey Aaronson

	
Name:  Jeffrey Aaronson

	
Address:

  

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