Document:

f8k011712ex10i_osl.htm

 

Exhibit 10.1

 

EMPLOYMENT AGREEMENT

 

 

This Employment Agreement (the “Agreement”) is entered into as of January 17, 2011 (the “Effective Date”), by and between ROBERT H. ROTHENBERG, (the “Employee”) and OSL Holdings, Inc (the “Company”).

 

WHEREAS, the Company desires to employ the Employee, and the Employee desires to be employed by the Company, on the terms and subject to the conditions set forth herein.

 

NOW, THEREFORE, in consideration of agreements herein contained and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:

 

	
1)  

	
Employment. Subject to the terms and conditions set forth in this Agreement, the Company offers and the Employee hereby accepts employment, effective as of the Effective Date.

 

	
2)  

	
Initial Term. Subject to earlier termination as provided in Section 5 hereof, this Agreement and the Employee’s employment shall continue for an Initial Term of two (2) years, commencing on the Effective Date and ending on the second anniversary of the Effective Date (the “Initial Term”).  

 

	
a)  

	
After the Initial Term, and subject to earlier termination as provided in Section 5 hereof, this Agreement shall renew for successive, additional one (1) year periods (each additional year, a “Renewal Term”) commencing on the second anniversary of the Effective Date, and on each anniversary thereafter, unless terminated by written notice from either party to the other not less than ninety (90) days prior to the expiration of the then Term, on the terms and conditions as they exist on the last day of the existing Term or Renewal Term, as the case may be (the term of this Agreement, as it may be from time to time modified and in effect, the “Term”).

 

	
b)  

	
The Initial Term and the Renewal Terms (if any) are sometimes collectively referred to herein as the “Term”.

 

	
3)  

	
Capacity and Performance. During the Term, the Employee shall serve the Company as its President (and Chief Strategy Officer). The Employee shall comply with and perform, faithfully, diligently and to the best of his ability, such duties as are customary for President and Chief Strategy Officer or such duties as may from time to time be vested in or requested of him by the CEO and/or Board of Directors of the Company (the “CEO and/or Board of Directors” are hereinafter collectively referred to herein as the “Board”).

 

	
4)  

	
Compensation and Benefits. As compensation for the satisfactory performance by the Employee of his duties and obligations hereunder to the Company and subject to the provisions of Section 5, the Company shall pay to Employee the following:

 

	
a)  

	
Base Salary During Term. Commencing on or about January 17, 2012, the Employee began receiving an annualized base salary (the “Base Salary”) of $240,000 which shall continue through the pay period ending on or about January 17, 2014.

 

	
i)  

	
Thereafter, the Base Salary will be reviewed annually by the Board based upon the performance of both the Employee and the Company, with any positive adjustments to Base Salary to be made at the discretion of the Board.

 

	
ii)  

	
The Base Salary shall be payable by the Company to the Employee in equal installments on the dates that payments of salary are regularly made by the Company to its Employees, subject to deductions for taxes and contribution for benefits, if any, in accordance with the Company’s regular payroll practices.

 

	
b)  

	
Signing Compensation:  The Company shall pay a signing bonus of $50,000 to cover consulting time Employee expended prior to signing employment agreement.  The signing bonus will be paid in equal installments on a weekly basis over the first 90 days of the agreement.

 

	
c)  

	
Bonus.  In addition to the base salary outlined in (a), the Company may pay you a bonus of up to Hundred Thousand Dollars ($100,000) per year as set forth below in the Schedule A of this Agreement. This bonus plan and the base salary shall be revisited once a year based on a performance review to be conducted annually, with the first review taking place on or around nine (9) months from your start date of employment.

 

 

	 
Employment Agreement for Bob Rothenberg

	Page 1 of 8

 

  

  

  

 

	
d)  

	
Benefits.  During the Term and subject to any contribution therefore generally required of Employees of the Company of similar position and responsibility, the Employee shall be entitled to participate in all employee benefits plans from time to time adopted by the Company and in effect for employees of the Company in similar positions, including 401(k), and medical plans. Such participation shall be subject to (1) the terms of the applicable plan documents, (2) generally applicable Company policies and (3) the discretion of the Board or any administrative or other committee provided for in or contemplated by such plan. The Company’s current plans and policies shall govern all other benefits. The Company may alter, modify, add to, or eliminate its employee benefits plans at any time as the Company and/or the Board, in its sole judgment, determines to be appropriate. The Company agrees to maintain 401(k), and medical plans substantially similar to those Company plans in effect immediately prior to the Effective Date.

 

	
i)  

	
At the current moment, the benefits provided for Executives of the Company of similar position and responsibility include “Full Coverage for Employee and Dependents”.

 

	
e)  

	
Expenses. The Company shall pay or reimburse the Employee for all reasonable travel and other properly documented expenses incurred by the Employee in performing his duties under this Agreement in accordance with the Company’s policies relating thereto.

 

	
f)  

	
Vacation. During the Term, the Employee shall be entitled to receive up to twenty (25) days of Paid Time Off (PTO) per year on an accrual basis.  PTO includes vacation, personal, sick and floating days.  All PTO shall be accrued and used in accordance with the Company’s policies relating thereto in the then current Employee Handbook.

 

	
i)  

	
Stock Award. The Company anticipates delivery of Company stock and/or Equity to certain of its Employees.   Employee will be entitled to 500,000 shares at signing of the employment agreement and 500,000 shares each year (or the appropriate equivalent), that will vest monthly in equal increments each year of employment.

 

	
5)  

	
Termination of Employment. Notwithstanding the provisions of Section 2 hereof, the Employee’s employment and this Agreement shall terminate prior to the expiration of the Term under any of the following circumstances:

 

	
a)  

	
Death or Disability. In the event of the Employee’s death or Disability during the Term, the Employee’s employment and this Agreement shall immediately and automatically terminate and the Company shall pay to the Employee (or in the case of death, the Employee’s designated beneficiary or, if no beneficiary has been designated by the Employee, his estate), any Base Salary earned or unearned through the date of the original term but unpaid through the date of death or Disability, after which Company shall have no further obligation or liability to the Employee relating to Employee’s employment by the Company or this Agreement (other than as it relates to any non-voting shares/options of the Company owned by Employee).  For the purposes of this Agreement “Disability” shall mean any physical or mental incapacity as a result of which the Employee is unable to perform substantially all his duties and responsibilities for an aggregate of 180 days, whether or not consecutive, during any twelve month period.

 

	
b)  

	
By the Company for Cause.

 

	
i)  

	
The Company may terminate the Employee’s employment and this Agreement for Cause at any time during the Term. Upon such termination, the Company shall have no further obligation or liability to the Employee relating to the Employee’s employment by the Company or this Agreement, other than Base Salary earned but unpaid through the date of termination or as it relates to any non-voting shares/options of the Company owned by Employee.

 

 

	 
Employment Agreement for Bob Rothenberg

	Page 2 of 8

 

  

  

  

 

	
ii)  

	
The following events or conditions shall constitute “Cause” for purpose of Employee’s employment: (1) the Employee’s refusal or failure to render services to the Company in accordance with his obligations under this Agreement if such failure or refusal continues for more than ten (10) days after written notice from the Company to the Employee setting forth the specifics of the Employee’s breach; (2) the commission by the Employee of any act of gross negligence, dishonesty or breach of fiduciary duty towards the Company; (3) the conviction of the Employee of any felony or any act involving dishonesty, fraud, theft or breach of trust.

 

	
c)  

	
By the Company Other than for Cause. Company may terminate the Employees employment and this Agreement at any time without Cause during the Initial Term or any Renewal Term.  If Employee is discharged without Cause during the Term,  Employee shall be entitled to (i) receive Base Salary and continuation of benefits through the date of discharge, and (ii) upon delivery of a general release satisfactory to Company and so long as Employee is in full compliance with his obligations under Section 6 during the entire Non-Competition Period (as hereunder defined), Employee shall receive continuation of Base Salary for a period of six (6) months; provided, however that payment of the “post termination” compensation shall be paid in equal installments spread across the term of Employee’s Non-Competition Period.  Thereafter, Company shall have no further obligations or liabilities to Employee under the Employment Agreement (other than as relates to any non-voting shares/options of the Company owned by Employee) or otherwise arising from Employee’s employment with, or termination of that employment by the Company.

 

	
i)  

	
If Company elects not to renew this Agreement at the conclusion of the Initial Term, Company shall either (i) pay Employee’s Base Salary and benefits through the expiration date of the Initial Term or, (ii) at the election of Company and upon delivery of a general release satisfactory to Company, and so long as Employee is in full compliance with his obligations under Section 6 during the entire Non-Competition Period (as hereunder defined) pay Employee severance equal to six (6) months of Base Salary.  Payment of severance compensation shall be spread across the entire term of Employee’s Non-Competition Period.  Thereafter, Company shall have no further obligations or liabilities to Employee under the Employment Agreement (other than as relates to any non-voting shares/options of the Company owned by Employee) or otherwise arising from Employees employment with, or termination of that employment by the Company.

 

	
ii)  

	
The Employee shall not be required to mitigate the amount of any payment provided for in this Section 5 by seeking other employment. However, if the Employee shall obtain other employment during the Non-Competition Period or during any period in which the Employee is receiving continued payments, and the annualized salary for the other employment is greater than that of the Employee’s base salary at the time of termination, the payments to be made by the Company under this Section 5(c) shall cease immediately.

 

	
d)  

	
By the Employee.   If the Employee terminates this Agreement and/or his employment with the Company for any reason other than Good Reason, death or Disability, the Company shall have no further obligation or liability to the Employee relating to the Employee’s employment or this Agreement (other than as relates to any non-voting shares/options of the Company owned by Employee) except for any Base Salary earned but unpaid and any reasonable, properly documented and approved business expenses incurred but unreimbursed through the date of termination.

 

	
i)  

	
For purposes of this Agreement, “Good Reason” for termination by Employee (who shall provide thirty (60) days advance written notice if requested by the Company) shall exist if (a) the Company breaches this Agreement in any material respect, which it refuses to correct within ten (10) days following written notice of same from Employee setting forth the specifics of Company’s alleged breach.  In the event of such a termination, Employee shall receive the same post-termination compensation as would have been applicable in the event Company had terminated Employee other than for Cause.

 

 

	 
Employment Agreement for Bob Rothenberg

	Page 3 of 8

 

  

  

  

 

	
e)  

	
Post-Agreement Employment. Upon the expiration of the Initial Term or any Renewal Term, this Agreement shall automatically be deemed to have terminated and the Company shall have no further obligations to Employee hereunder (other than as relates to any non-voting shares/options of the Company owned by Employee), including without limitation, any duty to provide severance pay to Employee. In the event the Employee remains in the employ of the Company following the expiration or termination of this Agreement, then such employment shall be on an at-will basis, unless otherwise agreed to in writing by the Company and the Employee.

 

	
6)  

	
Confidentiality; Non-Competition.

 

	
a)  

	
Confidentiality.     It is specifically understood and agreed that some of the Company’s business activities are confidential in nature and constitute trade secrets, including but not limited to the Company’s “know-how,” methods of business and operations, and proprietary and financial analyses and reports (all such information, the “Confidential Information”). All of the Confidential Information is and shall be the property of the Company for its own exclusive use and benefit, and the Employee agrees that he will hold all of the Confidential Information in strictest confidence and will not, at any time, either during or after his employment with the Company, use or permit the use of the same for his own benefit or for the benefit of others unless authorized to do so by the prior written consent of the Board or by a contract or agreement to which the Company is a party or is bound. The provisions of this Section 6(a) shall survive the termination of this Agreement indefinitely.

 

	
b)  

	
Non-Competition.  In consideration of the mutual promises contained in this Agreement, including, without limitation, those involving the Confidential Information, compensation and termination, and in order to protect the Confidential Information and to reduce the likelihood of irreparable damage that would occur in the event the Confidential Information is provided to or used by a competitor of the Company, the Employee agrees that during the Term and for an additional period of twelve (6) months immediately following the Term (collectively the “Non-Competition Period”), not to engage in any Competitive Activity. For purposes of this Agreement, “Competitive Activity” shall mean engaging in any activity, without the prior written consent of the Company (which consent may be withheld in Company’s sole discretion), directly or indirectly, either through any form of ownership or as a director, officer, principal, agent, manager, employee, employer, adviser, consultant, stockholder, partner, or in any other individual or representative capacity whatsoever, either for his own benefit or for the benefit of any other person, firm, corporation, governmental or private entity of any nature whatsoever, that involves any of (i) office supply company; or, (ii) business activity, on behalf of any person or entity, that competes with the business of the Company.   If, during any period within the Non-Competition Period, the Employee is not in compliance with the terms of this Section 6(b), the Company shall be entitled to, among other remedies, compel compliance by the Employee of the terms of this Section 6(b) for an additional period equal to the period of such noncompliance. For purposes of this Agreement, the term “Non-Competition Period” shall also include this additional period. The Employee hereby acknowledges that the worldwide boundaries, scope of prohibited activities and the time duration of the provisions of this Section 6(b) are reasonable and are no broader than are necessary to protect the legitimate business interests of the Company. The provisions of this Section 6(b) shall survive the termination of the Employee’s employment and can only be revoked or modified by a writing signed by the parties that specifically states an intent to revoke or modify this provision. The Company and the Employee agree and stipulate that the agreements and covenants not to compete contained in this Section 6(b) are fair and reasonable in light of all of the facts and circumstances of the relationship between the Employee and the Company; however, the Employee and the Company are aware that in certain circumstances courts have refused to enforce certain agreements not to compete. Therefore, in furtherance of, and not in derogation of the provisions of this Section 6(b), the Company and the Employee agree that in the event a court should decline to enforce the provisions of this Section 6(b), that this Section 6(b) shall be deemed to be modified or reformed to restrict the Employee’s competition with the Company or its affiliates to the maximum extent, as to time, geography and business scope, that the court shall find enforceable; provided, however, in no event shall the provisions of this Section 6(b) be deemed to be more restrictive to the Employee than those contained herein

 

 

	 
Employment Agreement for Bob Rothenberg

	Page 4 of 8

 

  

  

  

 

	
c)  

	
Non-Interference or Solicitation. In consideration of the numerous mutual promises contained in this Agreement, and in order to prevent the Employee from violating the provisions of Section 6(a) and 6(b), the Employee agrees that during his employment with the Company, during the Non-Competition Period and for an additional period of six months (6) months beyond the expiration of any Non-Competition Period, that neither Employee nor any individual, partner, limited partnership, corporation or other entity or business with which he is in any way affiliated, including, without limitation, any partner, limited partner, member, director, officer, shareholder or employee of any such entity or business, will solicit for employment or hire any person who is, or within the preceding six months was, an officer, manager, or employee of the Company.  In consideration of the mutual promises contained in this Agreement, and in order to prevent the Employee from violating the provisions of Section 6(a) and 6(b), the Employee further agrees that during the period beginning with the Effective Date, throughout the Non-Competition Period and for an additional period of six (6) months beyond the expiration of the Non-Competition Period, he shall not, directly or indirectly, as a manager, agent, consultant, stockholder, director, employee, employer, partner or in any other individual or representative capacity, solicit or encourage any customer, supplier, contractor, partner or investor of the Company or any of its affiliates with whom the Employee or Company had dealings or about whom the Employee acquired Confidential Information during his employment with the Company, to do business with any person or entity other than the Company or its affiliates, or reduce the amount or scope of business that it did with the Company and its affiliates as of the last day of Employee’s employment with the Company.

 

	
d)  

	
Return of Documents.   The Employee agrees that at such time as his relationship with the Company is terminated (for whatever reason), the Employee shall not take with him, but will leave with the Company, all work product, Confidential Information, records, files, memoranda, reports, customer lists, supplier lists, documents and other information related to the conduct of the business, in whatever form (including on computer disk), and any copies thereof; or if such items are not on the premises of the Company, the Employee agrees to immediately return such items to the Company upon the Employee’s termination. The Employee acknowledges that all such items are and shall at all times remain the property of the Company.

 

	
7)  

	
Effect of Termination. The provisions of this Section 7 shall apply in the event of termination of this Agreement and/or the Employee’s employment pursuant to Sections 2 or 5.

 

	
a)  

	
Payment in Full. Payment by the Company to the Employee of any Base Salary and other amounts provided for herein shall constitute the entire obligation of the Company to the Employee; provided, however, that nothing in this Section 7(a) is intended or shall be construed to affect the rights and obligations of either the Company, or the Employee with respect to any loans, stock warrants, stock pledge arrangements, option plans or other agreements to the extent said rights or obligations survive the Employee’s termination of employment under the provisions of documents relating thereto.

 

	
b)  

	
Termination of Benefits.  Except for any right to continuation of benefits coverage provided by the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”) or other applicable law, benefits shall terminate pursuant to the terms of the applicable benefit plans as of the termination date of the Employee’s employment without regard to any continuation of Base Salary or other payments to the Employee following such termination date.

 

 

	 
Employment Agreement for Bob Rothenberg

	Page 5 of 8

 

  

  

  

 

 

	
c)  

	
Cessation of Severance and Benefits.  If the Employee breaches his obligations under this Agreement, the Company may immediately cease payment of all severance and benefits described in this Agreement. The cessation of these payments shall be in addition to, and not as an alternative to, any other remedies at law or in equity available to the Company, including the right to seek specific performance or an injunction.

 

	
8)  

	
Survival of Certain Provisions.  The obligations of the parties under Sections 6 and 7 of this Agreement shall expressly survive any termination of the Employee’s employment, regardless of the manner of such termination, or termination of this Agreement.

 

	
9)  

	
Conflicting Agreements. The Employee hereby warrants that the execution of this Agreement and the performance of his obligations hereunder will not breach or be in conflict with any other agreement to which or by which the Employee is a party or is bound and that the Employee is not now subject to and will not enter into any agreements that would affect the performance of his obligations hereunder.

 

	
10)  

	
Withholding.  All payments made by the Company under this Agreement shall be subject to and reduced by any federal, state and/or local taxes or other amounts required to be withheld by the Company under any applicable law.

 

	
11)  

	
Miscellaneous.

 

	
a)  

	
Assignment.  The Employee may not assign this Agreement or any interest herein but this Agreement shall inure to the benefit of the estate of the Employee or his legal successor upon death or Disability. The Company may assign this Agreement. This Agreement shall inure to the benefit of and be binding upon the successors and assigns of the Company.

 

	
b)  

	
Waiver; Amendment.  No waiver of any provision hereof shall be effective unless made in writing and signed by the waiving party. The failure of the Company to require the performance of any term or obligation of this Agreement, or the waiver by the Company of any breach of this Agreement, shall not prevent any subsequent enforcement of such term or obligation or be deemed a waiver of any subsequent breach. This Agreement may be amended or modified only by a written instrument signed by the Employee and the Company.

 

	
c)  

	
Notices.  All notices, requests and other communications provided for by this Agreement shall be in writing and shall be effective when delivered in person against a receipt, by facsimile or by overnight air courier or four (4) business days after being deposited in the mail of the United States, postage prepaid, registered or certified, and addressed (i) in the case of the Employee, to the address set forth underneath his signature to this Agreement or (ii) in the case of the Company, at the address of the Company’s principal office on the date of the notice and to the attention of the CEO,  or to such other address as either party may specify by notice to the other, given in accordance with the provisions of this Section 11(c).

 

	
d)  

	
Entire Agreement.  This Agreement constitutes the entire agreement between the Company and the Employee with respect to the terms and conditions of the Employee’s employment with the Company and supersedes and cancels all prior communications, agreements and understandings, written or oral, between the Employee and the Company, with respect to the terms and conditions of the Employee’s employment with the Company.

 

	
e)  

	
Counterparts; Facsimile Signatures.  This Agreement may be executed in counterparts, each of which shall be original and all of which together shall constitute one and the same instrument.  This Agreement may be executed and delivered by facsimile and, upon such delivery, the facsimile will be deemed to have the same effect as if the original signature had been delivered by the other party.

 

	
f)  

	
Governing Law.  This Agreement, the employment relationship contemplated herein and any claim arising from such relationship, whether or not arising under this Agreement, shall be governed and interpreted by the laws of the Commonwealth of Pennsylvania without giving effect to conflicts of laws principles. The parties hereto consent to the exclusive jurisdiction of the courts of the Commonwealth of Pennsylvania and of federal courts situated therein to hear all claims, disputes and causes of action arising out of this Agreement, and agree that the exclusive venue for all such claims shall be in either the Court of Common Pleas of Montgomery County, Pennsylvania or the United States District Court for the Eastern District of Pennsylvania.  Each party hereto stipulates and acknowledges that litigation of claims in any such court would not be unreasonable.

 

 

	 
Employment Agreement for Bob Rothenberg

	Page 6 of 8

 

  

  

  

 

IN WITNESS WHEREOF, the parties have executed and delivered this Agreement on the date first above written.

 

 

	OSL	 	ROBERT H. ROTHENBERG
	 	 	 	 	 
	By:	
 

	 	By: 	
 

	 	 	 	 	 
	Name:	 	 	Name:	 
	 	 	 	 	 
	Title:	
 

	 	Title:	 

 

 

 

	 
Employment Agreement for Bob Rothenberg

	Page 7 of 8

 

  

  

  

 

 

Schedule A

Bonus Plan

Set forth below is the Bonus Plan (“Plan”) from the Start Date of your employment with the Company and throughout your first year of employment with the Company. The terms and conditions set forth in this Plan shall not be amended or modified except by written notice executed by the Chief Executive Officer or the Chief Financial Officer of the Company.

 

Going forward, the performance-based bonus will be revisited once a clear set of goals can be set forth by the Company and mutually agreed upon between you and the Company annually, with the first review taking place within 60 days of your start date of employment.  If no plan is put in place by the company then the Plan will be based on

 

	
·  

	
1⁄2 (uncapped) based on organic Net Revenue growth of client portfolio – for example

	
(i)  

	
Bonus allocation per 1% of revenue growth from benchmark period (the benchmark period being defined as the 3-month monthly average prior to the Effective Date)

	
(ii)  

	
No bonus below a certain growth

	
(iii)  

	
Bonus allocation per additional 1% above a certain growth

	
·  

	
1⁄2 (uncapped) based on Gross Profit of client portfolio –

	
(iv)  

	
Bonus allocation for every month during which fully loaded Direct Costs of Services =<  certain growth of Net Revenues during first six months period and =< certain growth of Net Revenues during second six months period

 

	
·  

	
Bonus shall be paid quarterly within Fifteen (15) days from the end of each Fiscal Quarter for any Bonus that was earned in that period.

 

 

	 
Employment Agreement for Bob Rothenberg

	Page 8 of 8f10q1111ex10xv_loto.htm

Exhibit 10.15

 

 

LOTO INC.

EMPLOYMENT AGREEMENT

 

EMPLOYMENT AGREEMENT, dated this 21st day of October, 2011 (the “Agreement”), by and between Loto Inc., a Nevada corporation (the “Company”), and Fulvio Ciano (the “Executive”).

WHEREAS, the Company desires to engage the Executive to serve the Company as the Chief Executive Officer and Chief Financial Officer and the Executive desires to serve as the Chief Executive Officer and Chief Financial Officer of the Company;

NOW THEREFORE, in consideration of the premises and the mutual agreements made herein, the Company and the Executive agree as follows:

1.           Employment; Duties.  The Company shall engage the Executive to serve as Chief Executive Officer and Chief Financial Officer of the Company.  The Executive shall serve the Company in such capacity for the “Employment Period” as defined in Section 2.  The Executive agrees that during the term of his employment hereunder, he shall devote substantially all of his professional working time, attention, knowledge and experience and give his best effort, skill and abilities to promote the business and interests of the Company as directed by the Board of Directors of the Company or a committee of the Board of Directors to which the Board of Directors has duly delegated authority thereof (collectively, the “Board”).

2.           Employment Period.  This Agreement shall have an initial term of one year to be effective commencing as of the date hereof and ending on the first anniversary of thereof (the “Initial Employment Period”), unless sooner terminated in accordance with the provisions of Section 7 or Section 8.  This Agreement shall automatically renew and continue to remain in effect after the Initial Employment Period for successive one year periods (each, a “Renewal Employment Period”), until terminated as provided herein, unless either party provides the other party with written notice of non-renewal not later than ten business days prior to the expiration of the Initial Period or the anniversary of such date in any subsequent Renewal Employment Period.  The Initial Employment Period and each Renewal Employment Period of this Agreement is referred to herein as the “Employment Period.”

3.           Compensation.

(a)           Base Compensation.  The Executive shall be paid a base salary of one hundred twenty thousand (120,000) Canadian Dollars per annum, payable incrementally on a monthly basis and pro-rated for any partial year of employment, less any applicable statutory and regulatory deductions (the “Base Salary”).  The Base Salary shall be payable in accordance with the Company’s regular payroll practices, as the same may be modified from time to time. This Base Salary shall be increased to one hundred fifty thousand (150,000) Canadian Dollars per annum, subject to the same conditions set forth above, upon the Company’s receipt of revenue from the sale of its products and services.

 

 

  

Page 1 of 9

  

 

Loto Inc. - Employment Agreement

 

(b)           Options. The Executive shall be granted such options to purchase shares of the Company’s common stock, subject to the terms and conditions set forth in the Stock Option Agreement attached hereto as Exhibit A.

(c)           Expense Reimbursement. The Executive shall be entitled to reimbursement of reasonable out-of-pocket expenses incurred in connection with travel and matters related to the Company's business and affairs if made in accordance with written Company policy as in effect from time to time as determined by the Board.

(d)           Place of Employment. The parties agree that the principal place of services to be rendered to the Company by Executive shall be in Toronto, Canada, unless otherwise agreed to by the parties hereto, and all compensation shall be paid to Executive in such jurisdiction.  The Company acknowledges and agrees that Executive may reside from time to time in other jurisdictions and may travel to any and all other jurisdictions related to services to be rendered to the Company and Executive, none of which shall have the effect of changing the deemed principal place of services rendered by Executive to the Company unless otherwise required by the laws of such other jurisdictions.

4.           Trade Secrets.  The Executive agrees that it is in the Company's legitimate business interest to restrict his disclosure or use of Trade Secrets and Confidential Information relating to the Company or its affiliates as provided herein, and agrees not to disclose or use the Trade Secrets and/or Confidential Information relating to the Company or its affiliates for any purpose other than in connection with his performance of his duties to the Company.  For purposes of this Agreement, “Trade Secrets” shall mean all confidential and proprietary information belonging to the Company (including prospective client lists, ideas, formulas, compositions, inventions (whether patentable or unpatentable and whether or not reduced to practice), know-how, manufacturing and production processes and techniques, research and development information, drawings, specifications, designs, plans, proposals, technical data, copyrightable works, financial and marketing plans and customer and supplier lists and information). For purposes of this Agreement, “Confidential Information” shall mean all information other than Trade Secrets belonging to, used by, or which is in the possession of the Company and relating to the Company’s business or assets specifically including, but not limited to, information relating to the Company’s products, services, strategies, pricing, customers, representatives, suppliers, distributors, technology, finances, employee compensation, computer software and hardware, inventions, developments, in each case to the extent that such information is not required to be disclosed by applicable law or compelled to be disclosed by any governmental authority.  Notwithstanding the foregoing, the terms “Trade Secrets” and “Confidential Information” do not include information that (i) is or becomes generally available to or known by the public (other than as a result of a disclosure by the Executive), provided, that the source of such information is not known by the Executive to be bound by a confidentiality agreement with the Company; or (ii) is independently developed by the Executive without violating this Agreement. In addition to the provisions set forth above, the Executive shall execute the Proprietary Information and Invention Agreement (the “Proprietary Information and Invention Agreement”) attached hereto as Exhibit B, and shall agree to the terms and conditions set forth therein.  In the event of any conflict between the terms of this Agreement and the terms of the Proprietary Information and Invention Agreement, the terms of the Proprietary Information and Invention Agreement shall govern.

 

 

  

Page 2 of 9

  

 

Loto Inc. - Employment Agreement

 

 

5.           Return of Documents and Property.  Upon the expiration or termination of the Executive's employment with the Company, or at any time upon the request of the Company, the Executive (or his heirs or personal representatives) shall deliver to the Company (a) all documents and materials (including, without limitation, computer files) containing Trade Secrets and Confidential Information relating to the business and affairs of the Company or its affiliates, and (b) all documents, materials, equipment and other property (including, without limitation, computer files, computer programs, computer operating systems, computers, printers, scanners, pagers, telephones, credit cards and ID cards) belonging to the Company or its affiliates, which in either case are in the possession or under the control of the Executive (or his heirs or personal representatives).

6.           Discoveries and Works.  All Discoveries and Works made or conceived by the Executive during his employment by the Company, solely, jointly or with others, that relate to the Company's present or anticipated activities, or are used or useable by the Company shall be owned by the Company.  For the purposes of this Section 6, (including the definition of “Discoveries and Works”) the term “Company” shall include the Company and its affiliates.  The term “Discoveries and Works” includes, by way of example but without limitation, Trade Secrets and other Confidential Information, patents and patent applications, service marks, and service mark registrations and applications, trade names, copyrights and copyright registrations and applications.  The Executive shall (a) promptly notify, make full disclosure to, and execute and deliver any documents requested by the Company, as the case may be, to evidence or better assure title to Discoveries and Works in the Company, as so requested, (b) renounce any and all claims, including but not limited to claims of ownership and royalty, with respect to all Discoveries and Works and all other property owned or licensed by the Company, (c) assist the Company in obtaining or maintaining for itself at its own expense United States and foreign patents, copyrights, trade secret protection or other protection of any and all Discoveries and Works, and (d) promptly execute, whether during his employment with the Company or thereafter, all applications or other endorsements necessary or appropriate to maintain patents and other rights for the Company and to protect the title of the Company thereto, including but not limited to assignments of such patents and other rights.  Any Discoveries and Works which, within one year after the expiration or termination of the Executive's employment with the Company, are made, disclosed, reduced to tangible or written form or description, or are reduced to practice by the Executive and which pertain to the business carried on or products or services being sold or delivered by the Company at the time of such termination shall, as between the Executive and, the Company, be presumed to have been made during the Executive's employment by the Company.  The Executive acknowledges that all Discoveries and Works shall be deemed “works made for hire” under the U.S. Copyright Act of 1976, as amended 17 U.S.C. Sect. 101.

7.           Termination.

(a)           Manner of Termination. The Company and the Executive may terminate this Agreement, with or without cause, in accordance with the provisions of this Section 7.

 

  

Page 3 of 9

  

 

Loto Inc. - Employment Agreement

(b)           Termination.  The Company may terminate this Agreement with or without cause upon ten business days notice during the Employment Period, in which case the Company shall continue to pay the Executive’s Base Salary during the ten business day notice period, plus reimbursement of any and all reasonable and pre-approved expenses incurred by Executive as of the date of notice of such date, and all of such payments shall completely and fully discharge any and all obligations and liabilities of the Company to the Executive.

(c)           Termination by Executive. The Executive may terminate this Agreement with or without cause at any time during the Employment Period upon ten business days prior written notice of termination to the Company.

(d)           Effect of Termination.  Except as otherwise provided herein with respect to a termination pursuant to Section 7(b), in the event this Agreement is terminated pursuant to this Section 7, the Executive's rights and the Company's obligations hereunder shall cease as of the effective date of the termination, including, without limitation, the right to receive Base Salary, options and all other compensation or benefits provided for in this Agreement, and the Executive shall not be entitled to any further compensation, options, or severance compensation of any kind, and shall have no further right or claim to any compensation, options, benefits or severance compensation under this Agreement or otherwise against the Company or its affiliates, from and after the date of such termination, except as required by applicable law.  Any termination under this Section 7 is subject to the provisions of Sections 18 and 20 hereof.

(e)           Relinquishment of Authority.  Notwithstanding anything to the contrary set forth herein, upon written notice to the Executive, the Company may immediately relieve the Executive of all his duties and responsibilities hereunder and may relieve the Executive of authority to act on behalf of, or legally bind, the Company.

(f)           Transition Services and Certifications. Following any termination for any reason, the Executive shall render any and all services reasonably necessary for the Company to facilitate proper transition of the Company’s books and records and the Executive shall certify to the Company that any and all books and records maintained during the period of Executive’s services to the Company were true and complete and did not contain any material misstatements or omissions or any misleading information of any nature or kind, and that all controls and procedures of the Company under the management authority of Executive during the period of employment were properly observed during the period of service of the Executive.

8.           Disability: Death.

(a)           If, prior to the expiration of any applicable Employment Period, the Executive shall be unable to perform his duties hereunder by reason of physical or mental disability, the Company shall have the right to terminate this Agreement and the remainder of the Employment Period by giving written notice to the Executive to that effect.  A determination of the Executive’s ability to perform his duties shall be made by the Company’s Board of Directors.  Immediately upon the giving of such notice, the Employment Period shall terminate.

 

 

  

Page 4 of 9

  

 

Loto Inc. - Employment Agreement

 

(b)           Upon termination of this Agreement pursuant to Section 8(a), the Executive shall be paid his Base Salary through the effective date of such termination.  All other compensation and benefits provided for in Section 3 of this Agreement shall cease upon termination pursuant to Section 8(a), except as otherwise required by applicable law.

(c)           If, prior to the expiration of the Employment Period or the termination of this Agreement, the Executive shall die, the Executive's estate shall be paid his Base Salary and other compensation due through such date of death.  Except as otherwise provided in this Section 8(d), upon the death of the Executive, the Employment Period shall terminate without further notice and the Company shall have no further obligations hereunder, including, without limitation, obligations with respect to compensation and benefits provided for in Section 3 of this Agreement, other than as set forth in the immediately preceding sentence or as otherwise required by law.  Any termination under this Section 8 is subject to the provisions of Section 18 hereof.

9.           No Conflicts.  The Executive has represented and hereby represents to the Company and its affiliates that the execution, delivery and performance by the Executive of this Agreement do not conflict with or result in a violation or breach of, or constitute (with or without notice or lapse of time or both) a default under any contract, agreement or understanding, whether oral or written, to which the Executive is a party or of which the Executive is or should be aware and that there are no restrictions, covenants, agreements or limitations on his right or ability to enter into and perform the terms of this Agreement, and agrees to indemnify and save the Company and its affiliates harmless from any liability, cost or expense, including attorney’s fees, based upon or arising out of any such restrictions, covenants, agreements, or limitations that may be found to exist.  For purposes of this Agreement, “affiliate” shall include any subsidiary in the case of the Company, and any person or entity directly or indirectly controlled by or controlling the Company.

10.           Non-competition.   Except as authorized by the Board of Directors, during the Executive’s employment by the Company and for a period of one year thereafter, Executive will not (except as an officer, director, stockholder, employee, agent or consultant of the Company or any subsidiary or affiliate thereof) either directly or indirectly, whether or not for consideration, (i) in any way, directly or indirectly, solicit, divert, or take away the business of any person who is or was a customer of the Company, or in any manner influence such person to cease doing business in part or in whole with Company; (ii) engage in a Competing Business; (iii) except for investments or ownership in public entities, mutual funds and similar investments, none of which constitute more than 5% of the ownership or control of such entities, own, operate, control, finance, manage, advise, be employed by or engaged by, perform any services for, invest or otherwise become associated in any capacity with any person engaged in a Competing Business in the United States; or (iv) engage in any practice the purpose or effect of which is to intentionally evade the provisions of this covenant. For purposes of this section, “Competing Business” means any company or business which is engaged directly or indirectly in any business carried on or planned to be carried on by the Company or any of its subsidiaries or affiliates.

 

  

Page 5 of 9

  

 

Loto Inc. - Employment Agreement

11.           Non-Solicitation.  During the Executive’s employment by the Company and for a period of one year thereafter (the “Restricted Period”), the Executive, directly or indirectly, whether for his account or for the account of any other individual or entity, shall not solicit or canvas the trade, business or patronage of, or sell to, any individuals or entities that were either customers of the Company during the time the Executive was employed by the Company, or prospective customers with respect to whom a sales effort, presentation or proposal was made by the Company or its affiliates, during the one year period prior to the termination of the Executive’s employment.  The Executive further agrees that during the Restricted Period, he shall not, directly or indirectly, (i) solicit, induce, enter into any agreement with, or attempt to influence any individual who was an employee or consultant of the Company at any time during the time the Executive was employed by the Company, to terminate his or her employment relationship with the Company or to become employed by the Executive or any individual or entity by which the Executive is employed or (ii) interfere in any other way with the employment, or other relationship, of any employee or consultant of the Company or its affiliates.

12.           Enforcement.  The Executive agrees that any breach of the provisions of this Agreement would cause substantial and irreparable harm, not readily ascertainable or compensable in terms of money, to the Company for which remedies at law would be inadequate and that, in addition to any other remedy to which the Company may be entitled at law or in equity, the Company shall be entitled to temporary, preliminary and other injunctive relief in the event the Executive violates or threatens to violate the provisions of this Agreement, as well as damages, including, without limitation consequential damages, and an equitable accounting of all earnings, profits and benefits arising from such violation, in each case without the need to post any security or bond.  Nothing herein contained shall be construed as prohibiting the Company from pursuing, in addition, any other remedies available to the Company for such breach or threatened breach.  A waiver by the Company of any breach of any provision hereof shall not operate or be construed as a waiver of a breach of any other provision of this Agreement or of any subsequent breach by the Executive.

13.           Determinations by the Company.  All determinations and calculations with respect to this Agreement shall be made by the Board or any committee thereof to which the Board has delegated such authority, in good faith in accordance with applicable law, the certificate of incorporation and by-laws of the Company, in its sole discretion, and shall be final, conclusive and binding on all persons, including the Executive and the personal representative of his estate.

14.           Successors and Assigns.  This Agreement shall inure to the benefit of and shall be binding upon (i) the Company, its successors and assigns, and any company with which the Company may merge or consolidate or to which the Company may sell substantially all of its assets, and (ii) Executive and his executors, administrators, heirs and legal representatives.  Since the Executive’s services are personal and unique in nature, the Executive may not transfer, sell or otherwise assign his rights, obligations or benefits under this Agreement.

 

  

Page 6 of 9

  

 

Loto Inc. - Employment Agreement

15.           Notices.  Any notice required or permitted under this Agreement shall be deemed to have been effectively made or given if in writing and personally delivered, or sent properly addressed in a sealed envelope postage prepaid by certified or registered mail, or delivered by a reputable overnight delivery service.  Unless otherwise changed by notice, notice shall be properly addressed to the Executive if addressed to the address of record on file with the Company; and properly addressed to the Company if addressed to:

Loto Inc.

Suite 502, 25 Adelaide Street

Toronto, Ontario, Canada M5C 3A1

Telephone:  (416) 479-0880

Attention:  Donald Ziraldo

With a copy to:

Wuersch & Gering LLP

100 Wall Street, 21st Floor

New York, New York 10005

Telephone:  212-509-5050

Telecopier:  212-509-9559

Attention:  Travis L. Gering, Esq.

 

16.           Severability.  It is expressly understood and agreed that although the Company and the Executive consider the restrictions contained in this Agreement to be reasonable and necessary for the purpose of preserving the goodwill, proprietary rights and going concern value of the Company, if a final determination is made by arbitration or any court having jurisdiction that any provision contained in this Agreement is invalid, the provisions of this Agreement shall not be rendered void but shall be deemed amended to apply as to such maximum time and territory and to such other extent as such arbitral body or court may determine or indicate to be reasonable.  Alternatively, if the arbitrable body or court finds that any provision or restriction contained in this Agreement or any remedy provided herein is unenforceable, and such restriction or remedy cannot be amended so as to make it enforceable, such finding shall not affect the enforceability of any of the other restrictions contained therein or the availability of any other remedy.  The provisions of this Agreement shall in no respect limit or otherwise affect the Executive's obligations under any other agreements with the Company.

17.           Counterparts.  This Agreement may be executed in several counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instrument.  Signatures hereto may be facsimiles or electronically scanned copies which shall have the same full force and effect as a manually signed original thereof.

18.           Effects of Termination.  Notwithstanding anything to the contrary contained herein, if this Agreement is terminated pursuant to Section 7 or Section 8 or expires by its terms, the provisions of Sections 4-20 of this Agreement shall survive and continue in full force and effect.

 

  

Page 7 of 9

  

 

Loto Inc. - Employment Agreement

19.           Arbitration.  All disputes and controversies arising out of or relating to this Agreement shall be finally settled and binding under the Rules of International Commercial Dispute Resolution of the American Arbitration Association (“ICDR”).  The place of arbitration shall be New York.  The Arbitration shall be conducted in English by a single arbitrator appointed in accordance with the ICDR rules.  Any award, verdict or settlement issued under such arbitration may be entered by any party for order of enforcement by any court of competent jurisdiction.  The arbitrator shall have no power to take interim measures he or she deems necessary, including injunctive relief and measures for the protection or conservation of property.

20.           Miscellaneous.  This Agreement constitutes the entire agreement, and supersedes all prior agreements, of the parties hereto relating to the subject matter hereof, and there are no written or oral terms or representations made by either party other than those contained herein.  This Agreement cannot be modified, altered or amended except by a writing signed by both parties.  No waiver by either party of any provision or condition of this Agreement at any time shall be deemed a waiver of such provision or condition at any prior or subsequent time or of any other provision or condition at the same or any prior or subsequent time.

 

 

  

Page 8 of 9

  

 

Loto Inc. - Employment Agreement

 

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

 

	 	 	EXECUTIVE	 
	 	 	 	 
	
 

	
 

	/s/ Fulvio Ciano	 
	 	 	Name: Fulvio Ciano	 

 

	 	

THE COMPANY: LOTO INC.

	 
	 	 	 	 
	
 

	
By: 

	/s/ Donald Ziraldo	 
	 	 	

Name: Donald Ziraldo

Title:   Chairman of the Board

	 

 

 

 Page 9 of 9

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00198-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00198-of-00352.parquet"}]]