Document:

Unassociated Document

    China
National Petroleum Corporation Kunlun Natural Gas Co., Ltd.

    Xi’an
Xilan Natural Gas Co., Ltd.

     

    Strategic
Cooperation Framework Agreement

     

     

    July 6,
2009

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
              Party
      A: 

            	
              CNPC
      (China National Petroleum Corporation) Kunlun Natural Gas Co., Ltd. (“CNPC
      Kunlun”)

            
	Party
      B:	Xi’an
      Xilan Natural Gas Co., Ltd. (“Xilan Natural
Gas”)

    

     

    WHEREAS,

    Party A
has accumulated rich experience in the investment and operation of vehicular CNG
projects, and has been authorized by CNPC to be in charge of CNPC’s vehicular
CNG business nationwide as well as its LNG business in southern China, with
advantages in upstream natural gas supplies, funding, engineering, and human
resources in place;

     

    WHEREAS,

    Party B
possesses rich experience in urban natural gas and vehicular natural gas
investments and operations, and has established advantages in the location,
market, operation and development of urban natural gas and vehicular fueling
stations;

     

    After
equal negotiations, Party A and B have reached the following agreement (the
“Agreement”) regarding strategic cooperation in vehicular CNG business between
both parties.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

       

    

    I.
Overview of cooperating parties

     

    Party A
is the wholly owned subsidiary of CNPC (China National Petroleum Corporation),
and is designated by CNPC to specialize in vehicular CNG business. Currently, it
has initiated CNG projects in 70 cities and 18 provinces including Shandong,
Shanghai, Tianjin, Hainan, Sichuan, Shaanxi, Shanxi, Inner Mongolia, Hebei,
Henan, Hubei, Hunan, Jiangsu, and is the largest CNG supplier in
China.

     

    Party B
is a US listed company specialized in the investment, construction and operation
of urban pipeline natural gas and vehicular natural gas in China, and possesses
over ten years of experience in urban natural gas project operation and
management. Xilan Natural Gas has been conducting natural gas business in over
ten cities across three provinces in China, and has obtained government approval
to construct approximately 100 CNG fueling stations, with 35 stations currently
under operation.

     

    II.
Principle, scope, purpose

     

    
      	
              1.

            	
              Principle:
      to achieve mutual benefit through share of resources, combining of
      strength, collaboration with integrity; to establish strategic long-term
      relations with the goal of mutual benefit and joint venture as the
      tie.

            

    

    
      	
              2.

            	
              Scope:
      cities already covered by Party B’s business as well as cities that
      maximize the share of resource and joint of
  strength.

            

    

    
      	
              3.

            	
              Purpose:
      to achieve core competitive advantage and market share through strategic
      cooperation to maximize the market potential for CNG
    business.

            

    

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    III.
Mechanism

     

    1.         Organization

     

    To
facilitate the cooperation, both parties consent to the establishment of the
following Executive Committee (the “Committee”) and working group:

     

    (1) Members of the
Committee:

     

    Party A: Tao, Yuchun,
Chief General Manager

     Zhou, Gan, Chief
General Manager Assistant

     Zhang, Yuliang,
Director of Market Development

     Niu, Wenjun,
Director of Planning

    Party B: Ji, Qinan, Chief
Executive Officer

     Zhang, Huaifu, Vice
President

     Ren, Yanlin, Vice
President

     Wang, Bin, Director
of Investment and Development

     Cao, Lixia, Director
of Customer Relations

     Guo, Lihong,
Director of Property Management

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

       

    

    (2) Members of the Working
Group:

     

    Party A: Zhou, Gan; Niu,
Wenjun; Zhang, Yuliang; Li, Kun; Xu, Gaofeng

    
      Party B:
Zhang, Huaifu; Ren, Yanlin; Wang, Bin; Cao, Lixia; Guo,
Lihong

    

    Gan Zhou
and Huaifu Zhang will be in charge of the working group for both
parties.

     

    2.           Decision
making, communication, coordination

     

    (1) Executive Committee:
responsible for the assessment and approval of projects and plans submitted by
the working group and coordination of difficulties faced by the working group. A
Committee meeting will be held semi-annually and special meetings could be
called in case of need.

     

    (1)
Working Group: responsible for the proposition of cooperation projects and plan
to be submitted to the Committee for approval; regular quarterly meetings will
be held to discuss cooperation related issues; research seminars and discussion
sessions could be called on a need basis.

     

    IV.
Content and approach

     

    To build
CNG fueling stations and compressor stations in cities covered by CNPC natural
gas pipeline networks, based on specific discussions by both parties to maximize
the joint strength. The preliminary plan includes selecting approximately 20
cities along CNPC pipeline networks to proceed the CNG project during the two
years from the date of this Agreement.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    The
approach of cooperation include the establishment of a joint venture to explore
the vehicular CNG market with Party A holding 51% the equity interest of the
joint venture and Party B holding 49% of the equity interest of the joint
venture.

     

    V.
Responsibility and Obligation

     

    
      	
              1.

            	
              Both
      parties should prioritize the other party when selecting business partners
      to initiate CNG projects in planned
cities.

            

    

    
      	
              2.

            	
              Both
      parties should fulfill the responsibilities and obligations specified in
      this Agreement and Corporate Charter of the joint venture by both
      parties.

            

    

    
      	
              3.

            	
              Party
      A should be responsible for the natural gas quota and the upstream natural
      gas supplies to maximize CNPC’s advantage and support to the joint
      venture.

            

    

    
      	
              4.

            	
              Party
      B should be responsible for the management and operation support for the
      joint venture

            

    

     

    VI.
Other

     

    This
Agreement has four copies, and will be deemed legally effective when executed by
authorized signatory and stamped by both parties.

    Other
issues not specified in this Agreement are subject to further negotiation of
both parties.

     

    This
Agreement is executed on this 6th
day of July, 2009 in ShenZhen, China.EXHIBIT
10.1

    EMPLOYMENT
AGREEMENT

     

    

     

    EMPLOYMENT AGREEMENT (the
“Agreement”) dated May 8, 2009 by and between
Nu Horizons Electronics Corp.
(the “Company”) and James Estill (the
“Executive”).

     

    The
Company desires to employ Executive and to enter into an agreement embodying the
terms of such employment;

     

    Executive
desires to accept such employment and enter into such an agreement;

     

    In
consideration of the promises and mutual covenants herein and for other good and
valuable consideration, the parties agree as follows:

     

    1. Term of
Employment.  Subject to the provisions of Section 9 of this
Agreement, Executive shall be employed by the Company for a period commencing on
June 1, 2009 (the “Effective Date”) and ending on the fourth anniversary of the
Effective Date (the “Initial Term”) on the terms and subject to the conditions
set forth in this Agreement. The Initial Term shall be automatically extended
for successive one-year periods (the “Additional Terms”) unless terminated at
the end of the Initial Term or any Additional Term by either party upon ninety
(90) days’ prior written notice given to the other party (the Initial Term and
any Additional Terms shall be referred to as the “Employment Term”), in which
case the Agreement and Executive’s employment shall terminate at the end of the
Initial Term or Additional Term, as the case may be. The provisions of Sections
10 of this Agreement shall survive any termination of this Agreement or
Executive’s termination of employment hereunder.

     

    2. Position.

     

    a. During
the Employment Term, Executive shall serve as the Company’s President and Chief
Executive Officer.  The Executive shall report to both the Company’s
Executive Chairman of the Board and the Company’s Board of Directors (the
“Board”) regarding the Company’s business operations.  The Executive
shall oversee and manage the affairs of the Company’s business, and shall have
overall supervision and control of the Company’s day-to-day business activities
consistent with the Company’s past business practices.  During the
Employment Term, the Executive shall be granted such additional authority as may
be required from time to time by the Board, consistent with the Executive’s
position with the Company.  Executive will be a member of an Executive
Management Committee (the “Committee”) to be established by, and serve at the
discretion of, the Board, which Committee will be comprised of the Company’s
Executive Chairman of the Board, its Senior Executive Vice President and Chief
Operating Officer and Executive, in his capacity as President and Chief
Executive Officer.  The Committee will meet regularly to deal with
day-to-day business matters; any major business matters that can not be resolved
with unanimity by the Committee will be brought to the attention of the Board of
Directors.

     

    b. At
such time as the Board shall consist of a sufficient number of independent
directors (as defined in The Nasdaq Stock Market Marketplace Rule 4200) to
permit the Company to continue to comply with The Nasdaq Stock Market
Marketplace Rule 4350(c) notwithstanding the Executive’s service as a director,
the Executive shall be nominated to serve as a member of the
Board.  Upon any election of the Executive to serve on the Board or
the board of directors of any of the Company’s subsidiaries or affiliates, he
will serve as a director thereof without additional compensation.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    c. During
the Employment Term, Executive shall perform faithfully and loyally and to the
best of Executive’s abilities, the duties assigned to Executive
hereunder.  Executive shall use Executive’s best efforts, skills, and
abilities to promote the business and interests of the Company in a professional
manner.  During the Employment Term, Executive will devote Executive’s
full business time and best efforts to the performance of Executive’s duties
hereunder and will not engage in any other business, profession or occupation
which would conflict or interfere with the rendition of such services, either
directly or indirectly, without the prior written consent of the
Board.  Notwithstanding the foregoing, it shall not be a violation of
this Agreement for Executive to serve on the Board of Research in Motion Ltd and
on other boards or committees, so long as such activities do not significantly
interfere with the performance of Executive’s duties under this Agreement or
cause Executive to breach the terms of this Agreement, as determined by the
Board in its sole discretion.  Prior to joining any additional board
or committee in addition to Research in Motion Ltd, Executive will get written
approval from the Executive Chairman of the Board or the Board.

     

    3.
­Base
Salary.  During the Employment Term, the Company shall pay
Executive a base salary at the annual rate of $350,000 (the “Initial Base
Rate”), payable in regular installments in accordance with the Company’s usual
payment practices for senior executives.  Notwithstanding the
foregoing, Executive’s base salary shall be reduced to an annual rate of $30,000
if at any time(s), during the Employment Term the Company is not profitable for
three consecutive fiscal quarters.  In such event, following the
fiscal quarter in which the Company reports a profit in its press release
reporting its financial results, the Executive’s base salary shall be restored
to the Initial Base Rate (i.e., $87,500 per quarter). Executive’s annual base
salary, as in effect from time to time, is hereinafter referred to as the “Base
Salary.”  Any determination of profitability pursuant to this Section
shall exclude any unusual item(s) to the extent that the Company’s Audit
Committee determines that it is appropriate for the Company to make a pro forma
adjustment for such item(s).

     

    4. Bonus
Compensation.  In addition to Base Salary, Executive shall be
entitled to an incentive bonus for each fiscal year during the Employment Term,
based upon Executive’s performance relative to specified quantitative goals (the
“Quantitative Bonus”) and qualitative goals (the “Qualitative Bonus”) to be
mutually agreed, which goals will be approved by the Board and the Compensation
Committee of the Board in respect of each such fiscal year. The total of the
Quantitative Bonus and the Qualitative Bonus shall be referred to as the
“Bonus.” The Bonus shall be in an amount up to an aggregate 150% of the Initial
Base Salary, with a target Bonus in an amount equal to an aggregate of 75% of
the Initial Base Salary.  The Bonus shall be paid to Executive no
later than 30 days following the delivery to the Company by its independent
registered public accounting firm of such firm’s signed, final report with
respect to the Company’s consolidated financial statements for the applicable
completed fiscal year. In order for any Bonus to be earned and received by
Executive, Executive must be employed and in good standing on the last day of
the relevant fiscal year.

     

    a. Quantitative Bonus:
The Quantitative Bonus, if any, will be in amount up to 100% of the Initial Base
Salary (i.e. $350,000),
with a target of 50% of the Initial Base Salary (i.e.
$175,000).  The Quantitative Bonus will be calculated based on
reaching a minimum achievement goal (the “Minimum”), where Executive shall have
the right to receive a portion of such Quantitative Bonus, a target achievement
goal (the “Target”), where Executive shall have the right to receive the target
amount ($175,000), and an overachievement goal (the “Maximum”), where Executive
shall have the right to receive the maximum incentive amount ($350,000) of the
Quantitative Bonus.  The actual incentive payment amount will be
calculated, based on actual results attained, prorated on a straight-line basis
between the Minimum and the Target, or the Target and the Maximum, as
applicable.

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    (i)  For
the Company’s fiscal year ending February 28, 2010 (“Fiscal 2010”), the
Quantitative Bonus will be calculated based on the Company’s achievement of
certain levels of annual consolidated income before provision for income tax,
excluding any unusual item(s) to the extent that the Company’s Audit Committee
determines that it is appropriate for the Company to make a pro forma adjustment
for such item(s) in its press release reporting the financial results for Fiscal
2010 (“Pre-Tax Income”). The Minimum shall be $5,000,000 Pre-Tax Income, the
Target shall be $10,000,000 Pre-Tax Income and the Maximum shall be $13,000,000
Pre-Tax Income.  The Quantitative Bonus payable to Executive shall be
calculated, based on actual results reported by the Company in respect of Fiscal
2010, prorated on a straight-line basis between the Minimum and the Target, or
the Target and the Maximum, as applicable.

     

    b. Qualitative Bonus:
The Qualitative Bonus, if any, shall be in an amount up to 50% of the Initial
Base Salary (i.e.
$175,000), with a target bonus in an amount equal to 25% of the Initial Base
Salary (i.e.
$87,500).  The Qualitative Bonus amount will be such amount as
the Board and the Compensation Committee shall determine in their sole and
absolute discretion.  All or any portion of the Qualitative Bonus may
be paid in the form of stock compensation in the sole and absolute discretion of
the Board and Compensation Committee.

     

    c. Bonus for Fiscal
2010:  Notwithstanding the foregoing, Executive’s Bonus for
Fiscal 2010 shall be no less than $100,000.

     

    5. Stock
Options: On or about the Effective Date, the Board will grant to
Executive options to acquire 360,000 shares of the Company’s common stock (the
“Stock Options”).  The Stock Options will have the terms set forth
below and be otherwise subject to the terms of the Company’s 2002 Key Employee
Stock Incentive Plan:

     

    a. an
exercise price equal to the greater of $2.00 per share or the closing stock
price on the trading day preceding the date of grant;

     

    b. a term
of 10 years from the date of grant;

     

    c.
provided that Executive has been employed for at least the applicable “Required
Duration,” will vest when the market price of the Company’s common stock
achieves the target prices set forth below for at least 10 consecutive trading
days:

     

    
      	
              Number
      of Shares

            	
              Required
      Duration of Employment

            	
              Target
      Price

            
	
              120,000

            	
              1
      Year

            	
              $4.00

            
	
              120,000

            	
              2
      Years

            	
              $6.00

            
	
              120,000

            	
              3
      Years

            	
              $8.00

            

    

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

    Notwithstanding
the foregoing, all 360,000 Stock Options will become fully-vested on the ninth
anniversary of the date of grant provided that Executive is still employed by
the Company on such date; and

     

    d.
automatically become fully exercisable in the event of a sale or change of
control of the Company.

     

    6. Employee
Benefits.

     

    a.
Executive and his spouse shall be entitled to all benefits available to other of
the senior executives and their spouses, including health, dental and other
insurance programs, if any, subject in each case to the generally applicable
terms and conditions of the plan or program in
question.  Notwithstanding the foregoing, these benefits may be
modified or eliminated at the Company’s sole discretion, at any time, without
compensation or notice to Executive.

     

    b.
Executive shall be entitled to four weeks’ paid vacation
annually.  Vacation shall be taken at such times as do not materially
interfere with the performance of Executive’s duties hereunder as mutually
agreed upon by Executive and the Company.  Executive may not carry
forward accrued unused vacation, if any, to any subsequent calendar
year.

     

    c. During
Executive’s employment hereunder, the Company shall provide the Executive with a
monthly car allowance of $1,000.

     

    d. The
Company shall reimburse the Executive for thirty (30) round-trip economy airline
tickets from Canada to New York during the Employment Term to be used by
Executive and/or Executive’s family members. For the purposes of this Agreement,
“family members” shall mean Executive’s spouse, parents, children and siblings,
whether by blood, marriage or adoption.

     

    7. Relocation
Expenses:  The Company shall reimburse Executive for the
Executive’s living expenses actually incurred in living on Long Island, New York
prior to moving into a permanent residence on Long Island during the first year
of the Employment Term in an amount not to exceed $30,000.  The Company shall reimburse Executive
for the reasonable moving costs and expenses incurred by the Executive
in connection with the physical
move to the Long Island, New York area in an amount not to exceed
$50,000.  The Company shall reimburse Executive for legal expenses
associated with the physical move to the Long Island, New York area in an amount not to exceed
$5,000.

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

    8. Reimbursement of
Expenses.  During
the Employment Term, the Executive may incur reasonable expenses in connection
with conducting and promoting the business and affairs of the Company, including
expenses for travel and similar items, subject to reasonable limitations and
restrictions set by the Company from time to time.  These
expenses include, but are not limited to: (a) training and personal development
programs completed by the Executive, in an amount not to exceed $5,000 per year;
and  (b) YPO/WPO membership expenses, in an amount not to exceed
$12,000 per year.  The
Company will reimburse the Executive for such business expenses and any other
expenses for which he has the right to reimbursement hereunder upon the
presentation by the Executive of an itemized account of such expenditures,
consistent with procedures established by the Company, together with such bills,
receipts or other documentary evidence as shall be required by the Company for
tax or accounting purposes which reimbursement shall be made at the times
provided and otherwise in accordance with the Company’s reimbursement
policy.

     

    9. Termination.

     

    a.
Notwithstanding anything in this Agreement to the contrary, the Company shall
have the right to terminate this Agreement at any time, with or without
cause.

     

    b. Should
the Company terminate this Agreement “for cause” or the Executive terminates
this Agreement without “good reason,” the Executive shall be paid his Base
Salary through the date of termination and shall be reimbursed for any expenses
properly incurred prior to the date of termination, but shall have no further
entitlement to compensation, benefits or other remuneration
whatsoever.  For purposes of this Agreement, “for cause” shall
mean:

     

    (1) Any
material breach by Executive of the terms of this Agreement or intentional
refusal by the Executive to perform his duties hereunder; or

     

    (2) Any
act by the Executive constituting a felony under the laws of the State of New
York or the United States, or any act which is dishonest, deceitful, or involves
moral turpitude or which results in material gain or personal enrichment at the
expense of the Company; or

     

    (3) Any
act by the Executive constituting a violation of the Company's harassment,
discrimination, electronic communications and code of conduct policies;
or

     

    (4) Any
failure or refusal by the Executive to act subject to and in accordance with the
lawful direction of the Company or its agents; or

     

    (5) Any
willful, intentional or grossly negligent act by the Executive having the effect
of injuring the reputation of the Company.

     

    c. Should
the Company elect to terminate this Agreement without cause or the Executive
terminates this Agreement for “good reason,” provided that the Executive
executes a separation agreement and general release, the Executive shall be
entitled to receive (i) his Base Salary through the date of termination, (ii)
any earned but unused vacation, (iii) any unreimbursed expenses properly
incurred prior to the last day of work, and (iv) severance pay equal to six
months’ of the Executive’s Initial Base Salary, which shall be payable over such
six-month period.  For purposes of this Agreement, “good reason” shall
mean (A) the failure of the Company to pay or cause to be paid Executive’s Base
Salary or Bonus when due hereunder or (B) any substantial and sustained
diminution in Executive’s authority or responsibilities from those described in
Section 2 hereof; provided that either of the events described in clauses (A)
and (B) of this Section shall constitute good reason only if the Company fails
to cure such event within 45 days after receipt from Executive of written notice
of the event which constitutes good reason; provided, further, that “good
reason” shall cease to exist for an event on the 60th day following the later of
its occurrence or Executive’s knowledge thereof, unless Executive has given the
Company written notice thereof prior to such date.

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

     

    d. Should
this Agreement terminate due to the Executive’s death or disability, the
Executive shall be paid his Base Salary through the date of termination and
shall be reimbursed for any expenses properly incurred prior to the date of
termination, but shall have no further entitlement to compensation, benefits or
other remuneration whatsoever.  For purposes of this Agreement,
"disability" shall mean a physical or mental condition which prevents Executive
from performing the essential functions of his position with the Company, with
or without a reasonable accommodation, for more than ninety (90) consecutive
days or for more than 120 days in any 365-day period.

     

    e. Should
the Executive elect to terminate this Agreement without “good reason,” Executive
agrees that he shall give the Company three (3) months’ notice of his intent to
terminate his employment (the “Notice Period”).  During the Notice
Period, the Executive will continue to be entitled to receive his Base Salary
(but not any performance bonus), his fiduciary duties and his obligations to the
Company will continue, and Executive shall cooperate in the transition of his
responsibilities.  The Company shall have the right, in its sole
discretion, to direct that the Executive no longer come into the office during
the Notice Period.

     

    f. If the
Executive’s employment is terminated by the Company other than “for cause” on or
before the first anniversary of the Effective Date, in addition to any other
amounts payable pursuant to this Section 9, the Company shall reimburse the
Executive for expenses actually incurred by him in an amount not to exceed
$50,000 in connection with his
physical relocation to Canada, together with real estate commissions and
legal expenses actually incurred by the Executive in connection with the sale of
his Long Island home in an amount not to exceed $50,000.

     

    g. Upon
termination of Executive’s employment for any reason, Executive shall resign, as
of the date of such termination and to the extent applicable, from the Board
(and any committees thereof) and the Board of Directors (and any committees
thereof) of any of the Company’s affiliates.

     

    10. Restrictive
Covenants.

     

    a. Confidential
Information.  During and after the Employment Term, Executive
shall not, directly or indirectly in one or a series of transactions, disclose
to any person, or use or otherwise exploit for his own benefit or for the
benefit of anyone other than the Company, any Confidential Information of the
Company (as hereinafter defined), whether or not reduced to writing or physical
embodiment and whether prepared by Executive or not.  Confidential
Information may be disclosed in good faith by Executive in connection with the
performance of his duties under this Agreement.  Executive shall have
no obligation hereunder to keep any Confidential Information confidential if and
to the extent disclosure of any thereof is specifically required by law;
provided, however, that in the event disclosure is required by law, Executive
shall provide the Company with prompt notice of such requirement, prior to
making the disclosure, so that the Company may seek an appropriate protective
order.  The terms of this Section 10 shall survive the termination of
Executive’s employment with the Company, regardless of who terminates the
Agreement, or the reasons therefor.  At the conclusion of Executive’s
employment with the Company, for any reason, Executive shall immediately return
and deliver to the Company any and all computers, hard drives, papers, books,
records, documents, memoranda, manuals, e-mail, electronic or magnetic
recordings or data, including all copies thereof, laptops, pagers, personal
digital assistants, cell phones, corporate credit cards, keys, and/or access
cards, and any other property  belonging to the Company or any
affiliate, containing Confidential Information, or relating to the Company or
any affiliate’s business, which are in Executive’s possession, whether prepared
by Executive or others.  If at any time after termination of
Executive’s employment with the Company, for any reason, Executive determines
that Executive has any Confidential Information in Executive’s possession or
control, Executive shall immediately return to the Company all such Confidential
Information in Executive’s possession or control, including all copies and
portions thereof.  For purposes of this Agreement, “Confidential
Information” means information, regardless of form or characteristic, which: (a)
the Company does not make available to the public, industry, or third parties;
and (b) relates to the Company’s business operations, products, processes,
business plans, purchasing, marketing, clients, suppliers, or service
providers.  “Confidential Information” includes, but is not limited to
the following: financial information and data; cost, margin and profit
information and data; business plans; customer lists; research; development
plans and strategies; new product ideas; sales and marketing plans and
strategies; price information and policies; and any confidential information
that has been entrusted to the Company by another person or entity under an
obligation of confidentiality.

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

     

    b. Non-Competition.  While
actually employed and for a period of twelve (12) months following the
termination of employment (the “Restricted Period”), Executive shall not engage
in any Competitive Activity.

     

    c. Non-Solicitation of
Executives.  During the Employment Term and the Restricted
Period, Executive shall not, directly or indirectly: (1) solicit, induce, or
attempt to influence, any employee of the Company, its subsidiaries or
affiliates to terminate their employment with the Company, its subsidiaries or
affiliates; or (2) solicit, hire or retain as an employee or independent
contractor, or assist any third party in the solicitation, hiring, or retention
as an employee or independent contractor, any person who during the previous 12
months was an employee of the Company, or any of its subsidiaries or
affiliates.

     

    d. Non-Solicitation of Clients
or Potential Clients.  During the Employment Term and the
Restricted Period, Executive shall not, directly or indirectly, solicit any
Client or Potential Client of the Company, its subsidiaries or affiliates with
whom Executive had contact or a relationship, directly or indirectly, during and
within the scope of his employment with the Company or any of its subsidiaries
or affiliates, for the purpose or with the intent of encouraging or inducing
such Client or Potential Client to curtail, limit, or cancel their business with
the Company, its subsidiaries or affiliates.

     

    e. Acknowledgement.  Executive
acknowledges and agrees that the time periods referred to in the paragraphs
above are reasonable and valid in duration and scope and in all other
respects.  Executive also represents that Executive’s financial
resources, experience and capabilities are such that the enforcement of the
foregoing covenants will not prevent Executive from earning a livelihood, and
acknowledges that it would cause the Company serious and irreparable injury and
cost if Executive were to use his ability and knowledge in competition with the
Company or to otherwise breach the obligations contained in this
Agreement.  If the scope of any of the restrictions set forth above
are deemed by any arbitration panel, court or other tribunal to be too broad to
permit enforcement of such restriction to its full extent, then such restriction
shall be enforced to the maximum extent permitted by law, and Executive hereby
consents and agree that such scope may be judicially modified accordingly in any
proceeding brought to enforce such restriction.

     

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

     

    f. Liquidated
Damages.  The parties hereto agree that the damages that may be
suffered by the Company as a result of any violations of Section 10 would be
extremely difficult to ascertain.  Accordingly, the Executive and the
Company agree that in the event of an actual breach by Executive of Section 10,
the Company shall be entitled to preliminary and permanent injunctions enjoining
Executive from violating such provisions and Executive shall pay to the Company,
as liquidated damages, and not as a penalty, an amount equal to 100% of
Executive Revenues during the twelve month period immediately preceding the
termination of Executive’s employment with the Company (“Liquidated
Damages’).  The Executive shall also be required to pay the Company an
amount equal to the excess, if any of (A) the amount of commissions earned by
the Executive and the Executive’s new employer as a direct or indirect result of
the Executive’s efforts during the Restricted Period, over (B) the Liquidated
Damages.  The parties further agree that in the event of a threatened
breach by the Executive of Section 10, the Company shall be entitled to
preliminary and permanent injunctions enjoining Executive from violating such
provisions.  In the event the liquidated damages provision of this
Section 10 is determined to be void or otherwise inapplicable or unenforceable,
the Company shall have the right to avail itself of any and all other remedies
without limitation.

     

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

     

    g. Definitions.

     

    (i)  "Competitive
Activity" means that Executive, whether acting alone or in conjunction with
others, directly or indirectly (x) Renders services for any organization or
engages (either as owner, investor, partner, stockholder, employer, employee,
consultant, advisor, or director) directly or indirectly, in any business which
is or becomes competitive with the business of the Company, its subsidiaries or
affiliates; or (y) Induces any customer or Client of the Company, its
subsidiaries or affiliates with whom Executive had contacts or relationships,
directly or indirectly, during and within the scope of his employment with the
Company or any of its subsidiaries or affiliates, to curtail, limit, or cancel
their business with the Company, its subsidiaries or
affiliates.  Executive reserves the right to seek clarification
regarding whether activity falls within the scope of "Competitive Activity," as
defined herein, by submitting a written request for clarification to the Board
and General Counsel.  The Board and General Counsel shall determine
whether such activity is prohibited under this provision of the Agreement and
provide a written response within a reasonable period of time which shall not
exceed thirty (30) days. Notwithstanding the foregoing, Competitive Activity
shall not mean the purchase of stock or other securities of an organization or
business so long as it is listed upon a recognized securities exchange or traded
over-the-counter and such investment does not represent a greater than five
percent equity interest in the organization or business and, provided that
Executive shall not otherwise violate the terms of this Section 10(g)(i), shall
not include Executive’s ownership of 16% of the issued and outstanding shares of
Connect Tech Inc.

     

    (ii)  "Client"
means a person or entity to or from which the Company purchased products or to
or for which the Company otherwise performed work or provided services during
the two-year period prior to the termination of Executive's employment;
and  “Potential Client” means a person or entity the Company
solicited, contacted or submitted a proposal for the purchase or sale of
products, performance of work or services during said two year
period.

     

    11. Representations and
Warranties.  The Executive represents and warrants to the
Company that he is not bound by any agreement or any other existing or previous
obligation or business relationship which conflicts with, or may conflict with,
or which will or could prevent the full performance of Executive's duties and
obligation hereunder, Executive's acceptance of employment with the Company will
not cause Executive to be in breach of any employment or other agreement. In
addition, Executive agrees to follow Executive's policies and procedures
contained in the Company's Code of Business Conduct and Ethics, which Code may
be amended from time to time. In the event of any conflict between the terms of
this Agreement and the Code, the terms of this Agreement shall be
controlling.

     

    12. Rule 10b5-1
Plan.  The Board shall consider a purchase plan adopted by
Executive pursuant the provisions of Rule 10b5-1 of the Securities Exchange Act
of 1934, as amended (“Rule 10b5-1” and such plan, the “Rule 10b5-1 Plan”), to
the extent the terms of such Rule 10b5-1 Plan are in accordance with the
regulations required by Rule 10b5-1 and all other applicable securities laws, in
the opinion of the Company’s legal counsel.

     

    13. Miscellaneous.

     

    a. Governing Law; Consent to
Jurisdiction.  This Agreement shall be governed by and
construed in accordance with the laws of the State of New York, irrespective of
any conflict of law principles.  Executive consents to the
jurisdiction of the state courts of and federal courts located in the State of
New York for the enforcement of the obligations evidenced by this Agreement and
expressly waives any defense based upon venue or forum non
conveniens.

     

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

     

    b. Entire
Agreement/Amendments.  This Agreement contains the entire
understanding of the parties with respect to the employment of Executive by the
Company.  There are no restrictions, agreements, promises, warranties,
covenants or undertakings between the parties with respect to the subject matter
herein other than those expressly set forth herein.  This Agreement
may not be altered, modified, or amended except by written instrument signed by
the parties hereto.

     

    c. No
Waiver.  The failure of a party to insist upon strict adherence
to any term of this Agreement on any occasion shall not be considered a waiver
of such party’s rights or deprive such party of the right thereafter to insist
upon strict adherence to that term or any other term of this
Agreement.

     

    d. Severability.  In
the event that any one or more of the provisions of this Agreement shall be or
become invalid, illegal or unenforceable in any respect, the validity, legality
and enforceability of the remaining pro­visions of this Agreement shall not
be affected thereby.

     

    e. Assignment.  This
Agreement, and all of Executive’s rights and duties hereunder, shall not be
assignable or delegable by Executive.  Any purported assignment or
delegation by Executive in violation of the foregoing shall be null and void
ab initio and of no
force and effect.  This Agreement may be assigned by the Company to a
person or entity which is an affiliate or a successor in interest to
substantially all of the business operations of the Company.  Upon
such assignment, the rights and obligations of the Company hereunder shall
become the rights and obligations of such affiliate or successor person or
entity.

     

    f. Set
Off.  The Company’s obligation to pay Executive the amounts due
hereunder shall be subject to set-off, counterclaim or recoupment of amounts
owed by Executive to the Company or its affiliates.

     

    g. Compliance with IRC Section
409A.  Notwithstanding anything herein to the
contrary, (i) if at the time of Executive’s termination of employment with the
Company Executive is a “specified employee” as defined in Section 409A of the Internal
Revenue Code of 1986, as amended (the “Code”) and the deferral of the commencement
of any payments or benefits otherwise payable hereunder as a result of such
termination of employment is necessary in order to prevent any accelerated or additional tax under
Section 409A of the Code, then the Company will defer the commencement of the
payment of any such payments or benefits hereunder (without any reduction in
such payments or benefits ultimately paid or provided to Executive) until the date that is six months
following Executive’s termination of employment with the
Company (or the earliest date as is permitted under Section 409A of the Code)
and (ii) if any other payments of money or other benefits due to Executive
hereunder could cause the application of an
accelerated or additional tax under Section 409A of the Code, such payments or
other benefits shall be deferred if deferral will make such payment or other
benefits compliant under Section 409A of the Code, or otherwise such payment or other benefits shall be
restructured, to the extent possible, in a manner, determined by the Board, that
does not cause such an accelerated or additional tax.

     

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

     

    h. Successors; Binding
Agreement.  This Agreement shall inure to the benefit of and be
binding upon personal or legal representatives, executors, administra­tors,
successors, heirs, distributees, devisees and legatees.

     

    i. Notice.  For
the purpose of this Agreement, notices and all other communications provided for
in the Agreement shall be in writing and shall be deemed to have been duly given
when delivered by hand or overnight courier or three days after it has been
mailed by United States registered mail, return receipt requested, postage
prepaid, addressed to the respective addresses set forth below in this
Agreement, or to such other address as either party may have furnished to the
other in writing in accordance herewith, except that notice of change of address
shall be effective only upon receipt.

     

    If to the
Company:

     

    Nu
Horizons Electronics Corp.

    70 Maxess Road,

    Melville, New York
11747

    Attn:
Arthur Nadata

    Facsimile:
(631) 396- 5060

    

    with a copy to:

     

    Nancy Lieberman,
Esq.

    Farrell Fritz, PC

    1320 RexCorp Plaza

    Uniondale,
NY  11556

    Facsimile:  (516) 227-0777

    

    If to
Executive:

     

    To the
most recent address of Executive set forth in the personnel records of the
Company.

     

    j. Prior
Agreements  This Agreement supersedes all prior agreements and
understandings (including verbal agreements) between Executive and the Company
and/or its affiliates regarding the terms and conditions of Executive’s
employment with the Company and/or its affiliates including, without limitation,
the letter dated January 30, 2009 and the memorandum dated February 16, 2009
(collectively, the “Prior Writing”).

     

    k. Cooperation.  Executive
shall provide Executive’s reasonable cooperation in connection with any action
or proceeding (or any appeal from any action or proceeding) which relates to
events occurring during Executive’s employment hereunder.  This
provision shall survive any termination of this Agreement.

     

    l. Withholding
Taxes.  The Company may withhold from any amounts payable under
this Agreement such Federal, state and local taxes as may be required to be
withheld pursuant to any applicable law or regulation.

     

    m. Counterparts.  This
Agreement may be signed in counterparts, each of which shall be an original,
with the same effect as if the signatures thereto and hereto were upon the same
instrument.

     

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

     

     

    IN
WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the
day and year first above written.

     

    
      	 Nu
      Horizons Electronics Corp.	 	
              James
      Estill

            
	 	 	 
	 	 	 
	By:  	/s/Arthur
      Nadata	 	      
              /s/James Estill

            
	Name:	Arthur
      Nadata	 	 
	Title:     	Chairman/CEO	 	 

    

     

    
      
         

      

      
        12

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00160-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00160-of-00352.parquet"}]]