Document:

f8k032514a1ex10i_genie.htm

Exhibit 10.01

 

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

 

This AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this “Agreement”), entered into on this March 25, 2014, with effect as of January 1, 2014 (the “Effective Date”), is by and between Genie Energy Ltd., a Delaware corporation (the “Company”), and Howard S. Jonas (the “Executive”).

 

WHEREAS, in recognition of the Executive’s experience and abilities, the Company desires to assure itself of the continued employment of the Executive in accordance with the terms and conditions provided herein;

 

WHEREAS, the Executive wishes to continue to perform services for the Company in accordance with the terms and conditions provided herein;

 

WHEREAS, the Company and the Executive are parties to that certain Employment Agreement, dated as of October 28, 2011 (the “Prior Agreement”); and

 

WHEREAS, the parties desire to amend and restate the Prior Agreement, with effect as of the date set forth above as follows:

 

NOW, THEREFORE, in consideration of the promises and the respective covenants and agreements of the parties herein contained, and intending to be legally bound hereby, the parties hereto agree as follows:

 

1.             Employment’ Prior Agreement.  The Company hereby agrees to continue to employ the Executive, and the Executive hereby agrees to continue to be employed by and perform services for the Company, on the terms and conditions set forth herein.

 

For all purposes related to the period beginning on and following the Effective Date, except as expressly provided herein, the Prior Agreement shall be of no further force or effect and the terms hereof shall govern the employment relationship between the Company and the Executive and the other matters covered hereby.

 

2.             Term.  This Agreement is for the period (the “Term”) commencing on the Effective Date hereof, and terminating on December 31, 2018,  or upon the Executive’s earlier death or other termination of employment pursuant to Section 7 hereof; provided, however, that commencing on December 31, 2018 and each anniversary thereafter, the Term shall automatically be extended for one additional year beyond its otherwise scheduled expiration unless, not later than ninety (90) days prior to any such anniversary, either party hereto shall have notified the other party in writing that such extension shall not take effect.

 

3.             Position.  During the Term, the Executive shall serve as the Chairman of the Board of Directors and Chief Executive Officer of the Company.

 

4.             Duties and Reporting Relationship.  During the Term, the Executive shall use his skills and render services to the best of his abilities on behalf of the Company.  The Executive shall dedicate as much time (up to his full business time) as is, in the judgment of the Board of Directors of the Company (the “Board”), necessary or advisable for the performance his duties hereunder.  The Executive shall report directly to the Board.  Notwithstanding the foregoing, the Company acknowledges that the Executive will be serving as the Chairman of the Board of IDT Corporation and CTM Media Holdings, Inc., as well as in certain other positions with business and not-for-profit entities, and that, for so long as the Executive performs his duties hereunder, such service shall not be deemed to be a breach of the terms hereof.

 

  

 

  

 

5.             Place of Performance.  The Executive shall perform his duties and conduct his business at the offices of the Company, currently located in Newark, New Jersey, except for required travel on the Company’s business.

 

6.             Compensation and Related Matters.

 

(a)            Base Salary.  The Company shall pay the Executive as follows:

 

(i)            For the period between the Effective Date and December 31, 2018 (the “Initial Term”), a grant of options (the “Options”) to purchase three million (3,000,000)  shares of the Company’s Class B Common Stock, par value $0.01 per share (“Class B Common Stock”) at an exercise price of $10.30 per share.  The Options shall become exercisable as to six hundred thousand shares of Class B Common Stock on each of December 31, 2014, 2015, 2016, 2017 and 2018,    subject to the restrictions and acceleration events set forth herein and in the Option Agreement (a copy of which is annexed hereto as Exhibit A, the “Option Agreement”)

 

(ii)            In the event that the Executive resigns for any reason other than for Good Reason (as set forth in Section 7(c) hereunder), those Options that have not vested as of the resignation effective date shall terminate and be of no further force and effect.

 

(iii)           In the event that there is a Change of Control, all restrictions on exercise of the Options shall lapse and the Options shall become fully vested immediately prior to such Change of Control. For purposes of this Agreement, a Change of Control shall be defined as set forth in the Plan (as defined below).

 

(iv)          While the Options will not be issued pursuant thereto, except to the extent inconsistent with the terms hereof or of the Option Agreement, the Options shall be governed by the terms of  the Company’s 2011 Stock Option and Incentive Plan, as amended (the “Plan”) as if they had been issued pursuant thereto.

 

(v)           In addition to the Options, the Company may pay the Executive a cash base salary not to exceed FIFTY THOUSAND DOLLARS ($50,000) per annum during the Initial Term, and the Executive shall be eligible to receive bonuses as determined by the Compensation Committee of the Board.

 

(vi)          Except as otherwise agreed upon by the Parties hereto, for any period following the Initial Term, the Company shall pay the Executive an annual Base Salary of at least Two Million United States Dollars ($2,000,000), in cash or equity interests or a combination thereof, all as mutually agreed to by the Parties hereunder.

 

  

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(b)           Employee Benefit Plans.  During the Term, the Executive shall be entitled to participate in those incentive plans, programs, and arrangements which are available to other senior executive officers of the Company (the “Benefits Plans”).  The Executive shall be provided benefits under the Benefit Plans substantially equivalent, in the aggregate, to the benefits provided to other senior executive officers of the Company and on substantially similar terms and conditions.

 

(c)           Pension and Welfare Benefits.  During the Term, the Executive shall be eligible to participate in the pension and retirement plans (the “Pension Plans”) provided to other senior executive officers of the Company, and participate fully in all health benefits, insurance programs, life and disability insurance and other similar executive welfare benefit arrangements available to other senior executive officers of the Company and shall be provided benefits under such plans and arrangements substantially equivalent, in the aggregate, to the benefits provided to other senior executive officers of the Company and on substantially similar terms and conditions.

 

(d)           Fringe Benefits and Perquisites.  During the Term, the Company shall provide to the Executive all of the fringe benefits and perquisites that are provided to other senior executive officers of the Company, and the Executive shall be entitled to receive any other fringe benefits or perquisites that become available to other senior executive officers of the Company subsequent to the date hereof.  The benefits described herein include, but are not limited to, an automobile leased for the Executive by the Company, the make and model of which is consistent with that being used by the Executive on the execution date of this Agreement.

 

(e)           Business Expenses.  The Executive will be reimbursed for all ordinary and necessary business expenses incurred by him in connection with his employment (including without limitation, expenses for travel and entertainment incurred in conducting or promoting business for the Company) upon submission by the Executive of receipts and other documentation in accordance with the Company’s normal reimbursement procedures.

 

7.             Termination.  The Executive’s employment hereunder may be terminated without breach of the Agreement only under the following circumstances:

 

(a)            Death; Disability.  The Executive’s employment hereunder shall terminate upon his death or “Disability” (as hereafter defined).  For purposes of this Agreement, “Disability” shall mean the inability of the Executive to perform his duties on account of a physical or mental illness for a period of one hundred twenty (120) consecutive days or one hundred and eighty (180) days in any ten (10) month period.

 

(b)           Cause.  The Company may terminate the Executive’s employment hereunder with or without “Cause.”  For purposes of this Agreement, the Company shall have “Cause” to terminate the Executive’s employment hereunder (i) upon the Executive’s conviction for the commission of an act or acts constituting a felony under the laws of the United States or any state thereof, or (ii) upon the Executive’s willful and continued failure to substantially perform his duties hereunder (other than any such failure resulting from the Executive’s incapacity due to physical or mental illness), after written notice has been delivered to the Executive by the Company, which notice specifically identifies the manner in which the Executive has not substantially performed his duties, and the Executive’s failure to substantially perform his duties is not cured within ten (10) business days after notice of such failure has been given to the Executive.  For purposes of this Section 7 (b), no act or failure to act on the Executive’s part shall be deemed “willful” unless done or omitted to be done, by the Executive not in good faith and without reasonable belief that the Executive’s act, or failure to act, was in the best interest of the Company.

 

  

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(c)           Termination by the Executive.  As provided in this Section 7(c), the Executive may terminate his employment hereunder for “Good Reason.”  “Good Reason” shall mean the occurrence (without the Executive’s express written consent) of any one of the following acts by the Company, or failure by the Company to act:

 

(i)             a material breach of the Agreement by the Company;

 

(ii)            the assignment to the Executive of any duties inconsistent with the Executive’s status as a senior executive officer of the Company or a material adverse alteration in the nature or status of the Executive’s responsibilities; or

 

(iii)          any purported termination of the Executive’s employment which is not effected pursuant to a Notice of Termination satisfying the requirement of paragraph (d) below; for purposes of this Agreement, no such purported termination shall be effective.

 

(iv)          a material reduction in Executive’s annual Base Salary;

 

(v)           a material reduction in Executive’s positions, duties, responsibilities or reporting lines from those described in Section 4 hereof;

 

(vi)          relocation of Executive’s principal place of employment to a location more than 50 miles outside of the Metropolitan New York area; or

 

(vii)         a “Change in Control,” as defined in the Plan,

 

(each of the foregoing being a “Good Reason Event”). Executive may terminate employment for Good Reason if (A) Executive has given written notice to the Company of the existence of the Good Reason Event no later than ninety (90) days after its initial existence, (B) the Company has not remedied such Good Reason Event in all material respects within thirty (30) business days after its receipt of such written notice, and (C) Executive terminated employment within one year following the initial existence of such Good Reason Event.

 

The Executive’s right to terminate the Executive’s employment for Good Reason shall not be affected by the Executive’s incapacity due to physical or mental illness.  The Executive’s continued employment shall not constitute consent to, or a waiver of rights with respect to any act or failure to act constituting Good Reason hereunder.  Notwithstanding the foregoing, a termination shall not be treated as a Termination for Good Reason if the Executive shall have consented in writing to the occurrence of the event giving rise to the claim of Termination for Good Reason.

 

  

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(d)           Notice of Termination.  Any termination of the Executive’s employment by the Company or by the Executive (other than termination by reason of the Executive’s death) shall be communicated by written Notice of Termination to the other party hereto in accordance with Section 12 hereof.  For purposes of this Agreement, a “Notice of Termination” shall mean a notice that shall indicate the specific termination provision in this Agreement relied upon and shall set forth in reasonable detail the facts and circumstances claims to provide a basis for termination of the Executive’s employment under the provision so indicated.  Further, a Notice of Termination for Cause or Disability must include a copy of a resolution duly adopted by the affirmative vote of not less than a majority of the entire membership of the Board at a meeting of the Board (after reasonable notice to the Executive and an opportunity for the Executive, together with the Executive’s counsel, to be heard before the Board) finding that, in the good faith opinion of the Board, the Executive was guilty of conduct set forth in the definition of Cause herein or satisfied the criteria of a Disability, and specifying the particulars thereof.

 

(e)           Date of Termination.  “Date of Termination” shall mean if the Executive’s employment is terminated (i) by his death, the date of his death, (ii) by reason of Disability, the date that the Executive is determined by the Board to be Disabled, (iii) by resignation of the Executive, the date the Executive so notifies the Board, or (iv) pursuant to paragraph (c) or (d) above, the date specified in the Notice of Termination; provided, however, that if within thirty (30) business days after any Notice of Termination is given the party receiving such Notice of Termination notifies the other party that a dispute exists concerning the termination, the Date of Termination shall be the date on which the dispute is finally determined.  If within fifteen (15) business days after any Notice of Termination is given, or if later, prior to the Date of Termination (as determined without regard to this Section 7(e)), the party receiving such Notice of Termination notifies the other party that a dispute exists concerning the termination, the Date of Termination shall be the date on which the dispute is finally resolved, either by mutual written agreement of the parties or by a final judgment, order or decree of a court of competent jurisdiction (which is not appealable or with respect to which the time for appeal, therefrom has expired and no appeal has been perfected); provided further that the Date of Termination shall be extended by a notice of dispute only if such notice is given in good faith and the party giving such notice pursues the resolution of such dispute with reasonable diligence.

 

(f)            Compensation During Dispute.  If a purported termination occurs during the Term of this Agreement, and such termination is disputed in accordance with Section 7(e) hereof, the Company shall continue to pay the Executive the full compensation in effect when the notice giving rise to the dispute was given (including, but not limited to, Base Salary) and continue the Executive as a participant in all compensation, benefit and insurance plans in which the Executive was participating when the notice giving rise to the dispute was given, until the dispute is finally resolved.  Amounts paid under this Section 7(f) are in addition to all other amounts due under this Agreement and shall not be offset against or reduce any other amounts due under this Agreement.

 

8.             Compensation Upon Termination or During Disability.

 

(a)           Death; Disability. In the event that Executive’s employment is terminated pursuant to Section 7(a) hereof, then as soon as practicable thereafter, the Company shall pay the Executive or the Executive’s Beneficiary (as defined in Section 11(b) hereof), as the case may be, (i) all unpaid amounts, if any, to which the Executive was entitled as of the Date of Termination under Section 6(a) hereof and (ii) all unpaid amounts to which the Executive was then entitled under the Benefit Plans, the Pension Plans and any other unpaid employee benefits, perquisites or other reimbursements (the amounts set forth in clauses (i) and (ii) above being hereinafter referred to as the “Accrued Obligations”).  In addition, in the event of the Executive’s death, the Company shall pay Executive’s estate a lump sum payment equal to twelve (12) months of the cash portion of Executive’s base salary (at the rate in effect on the date of his death) (the “Severance Benefit”). Any unvested Options or other equity grants in the Company or its subsidiaries granted to the Executive in connection with his service to the Company (“Equity Grants”) shall vest upon a termination pursuant to Section 7(a).

 

  

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(b)           Termination for Cause; Voluntary Termination without Good Reason.  If the Executive’s employment is terminated by the Company for Cause or by the Executive other than for Good Reason, then the Company shall pay all Accrued Obligations to the Executive, the Company shall have no further obligations to the Executive under this Agreement.  If the Executive’s employment is terminated by the Executive other than for Good Reason, all Options that have not vested shall be forfeited.  If the Executive’s employment is terminated by the Company for Cause, then the Pro Rata Portion (as defined below) of the Options that have not vested as of the Date of Termination shall accelerate and vest and all other Options that had not yet vested shall be forfeited.  As used herein, the term “Pro Rata Portion” shall mean a percentage of the Options that are scheduled to vest on December 31 of the calendar year in which the Date of Termination shall occur that is represented by the portion of such calendar year that has elapsed as of the Date of Termination.  By way of example, if the Executive’s employment is terminated by the Company for Cause on June 30, 2015, Options with respect to one half of the six hundred thousand (600,000) shares of Class B Common Stock that were scheduled to vest on December 31, 2015 shall accelerate and vest as of such termination and the remainder of the Options shall be forfeited.

 

(c)           Termination Without Cause; Termination for Good Reason.  If the Company shall terminate the Executive’s employment, other than for Cause, or the Executive shall terminate his employment for Good Reason, then;

 

(i)             the Company shall pay to the Executive, within ten (10) days after the Date of Termination, the Accrued Obligations;

 

(ii)            all Equity Grants shall accelerate and vest as of the Date of Termination; and

 

(iii)           the Company shall pay the Executive the Severance Benefit within sixty (60) days of the Date of Termination.

 

9.             Non-Disclosure.  The parties hereto agree, recognize and acknowledge that during the Term the Executive shall obtain knowledge of confidential information regarding the business and affairs of the Company.  It is therefore agreed that the Executive will respect and protect the confidentiality of all confidential information pertaining to the Company, and will not (i) without the prior written consent of the Company, (ii) unless required in the course of the Executive’s employment hereunder, or (iii) unless required by applicable law, rules, regulations or court, government or regulatory authority order or decree, disclose in any fashion such confidential information to any person (other than a person who is a director of, or who is employed by, the Company or any subsidiary or who is engaged to render services to the Company or any subsidiary) at any time during the Term.

 

  

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10.           Covenant Not to Compete.

 

(a)            Executive hereby agrees that for a period of one (1) year following the termination of this Agreement (other than a termination of the Executive’s employment (i) by the Executive for Good Reason or (ii) by the Company other than for Cause) (the “Restricted Period”) the Executive shall not, directly or indirectly, whether acting individually or through any person, firm, corporation, business or any other entity:

 

(i)            engage in, or have any interest in any person, firm, corporation, business or other entity (as an officer, director, employee, agent, stockholder, or other security holder, creditor, consultant or otherwise) that engages in any business activity where a substantial aspect of the business of the Company is conducted, or planned to be conducted, at any time during the Restricted Period, which business activity is the same as, similar to or competitive with the Company as the same may be conducted from time to time;

 

(ii)           interfere with any contractual relationship that may exist from time to time of the business of the Company, including, but not limited to, any contractual relationship with any director, officer, employee, or sales agent, or supplier of the Company; or

 

(iii)          solicit, induce or influence, or seek to induce or influence, any person who currently is, or from time to time may be, engaged or employed by the Company (as an officer, director, employee, agent, or independent contractor) to terminate his or her employment or engagement by the Company.

 

(b)           Notwithstanding anything to the contrary contained herein, Executive, directly or indirectly, may own publicly traded stock constituting not more than five percent (5%) of the outstanding shares of such class of stock of any corporation covered by clause (a)(i) above if, and as long as, Executive is not an officer, director, employee or agent of, or consultant or advisor to, or has any other relationship or agreement with such corporation.

 

(c)           Executive acknowledges that the non-competition provisions contained in this Agreement are reasonable and necessary, in view of the nature of the Company and his knowledge thereof, in order to protect the legitimate interests of the Company.

 

11.           Successors; Binding Agreement.

 

(a)           The Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company, by agreement in form and substance reasonably satisfactory to the Executive, to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place.  Failure of the Company to obtain such assumption and agreement prior to the effectiveness of any such succession shall be a breach of this Agreement and shall entitle the Executive to compensation from the Company in the same amount and on the same terms as he would be entitled to hereunder if he terminated his employment for Good Reason, except that for purposes of implementing the foregoing, the date on which any such succession becomes effective shall be deemed the Date of Termination.  As used in this Agreement, “Company” shall mean the Company as hereinafter defined and any successor to its business and/or assets as aforesaid that executes and delivers the agreement provided for in this Section 11 or that otherwise becomes bound by all the terms and provisions of this Agreement by operation of law.

 

  

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(b)   This Agreement and all rights of the Executive hereunder shall insure to the benefit of and be enforced by the Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributee, devisee, and legatees.  If the Executive should die while any amounts should still be payable to him hereunder if he had continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to the Executive’s devisee, legatee, or other designee or, if there be no such designee, to the Executive’s estate (any of which is referred to herein as a “Beneficiary”).

 

12.   Notice.  For purposes of this Agreement, notices, demands and all other communications provided for in this Agreement shall be in writing and shall be deemed to have been duly given when delivered or (unless otherwise specified) mailed by United States certified or registered mail, return receipt requested, postage paid, addressed as follows:

 

If to the Company:

 

Genie Energy, Ltd.

550 Broad Street

Newark,  New Jersey 07102

Attn:  General Counsel

 

If to the Executive, at the executive’s address in the Company’s human resources files.

 

or to such other address as either party may have furnished to the other in writing in accordance herewith, except that notices of change of address shall be effective only upon receipt.

 

13.           Miscellaneous.  No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing signed by the Executive and such other officer of the Company as may be specifically designated by the Board.  No waiver by either party hereto at any time of any breach by the other party hereto, or compliance with any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or prior or subsequent time.  No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party which are not set forth expressly in this Agreement.  The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the state of New Jersey without regard to its conflicts of law principles.

 

  

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14.           Validity.  The invalidity or unenforceability of any provision or provisions of this Agreement shall not affect the validity or enforceability if any such other provision of this Agreement, which shall remain in full force and effect.

 

15.           Remedies of the Company.  Upon any termination for Cause that may cause irreparable harm to the Company or upon the violation of the provisions of Section 9 or 10 hereof, the Company shall be entitled, if it so elects, to institute and prosecute proceedings to obtain injunctive relief and damages, costs and expenses, including, without limitation, reasonable attorneys' fees and expenses, with respect to such termination.

 

16.           Counterparts.  This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instrument.

 

17.           Entire Agreement.  This Agreement and the other agreements referred to herein  set forth the entire agreement of the parties hereto in respect of the subject matter contained herein and supersede any and all other prior agreements, promises, covenants, arrangements, communications, representations or warranties, whether oral or written, by any officer, employee or representative of any party hereto, and in prior agreements of the parties hereto in respect to the subject matter contained herein is hereby terminated and canceled.

 

18.           Special Rules Regarding Section 409A of the Internal Revenue Code.

 

(a)            It is intended that any and all benefits under this Agreement either (i) shall not constitute “nonqualified deferred compensation” within the meaning of Section 409A of the Internal Revenue Code (“Section 409A”), and therefore are exempt from Section 409A or (ii) are subject to a “substantial risk of forfeiture” and exempt from Section 409A under the “short−term deferral rule” set forth in Treasury Regulation § 1.409A−1(b)(4).  In any event, all provisions of this Agreement shall be construed and interpreted in a manner consistent with the requirements for avoiding taxes or penalties under Section 409A.

(b)           Notwithstanding anything herein to the contrary, if the Company determines that the Severance Benefit constitutes “nonqualified deferred compensation” within the meaning of Section 409A, payment of such Severance Benefit shall not commence until the Executive incurs a “separation from service” within the meaning of Treasury Regulation §1.409A−1(h) (“Separation from Service”). If, at the time of Executive’s Separation from Service, the Executive is a “specified employee” (under Section 409A), such Severance Benefit shall not be paid until after the earlier of (i) the expiration of the six−month period measured from the date of Executive’s Separation from Service with the Company, or (ii) the date of the Executive’s death (the “409A Suspension Period”).

(c)           The determination of whether the Severance Benefit constitutes “nonqualified deferred compensation” within the meaning of Section 409A shall be made by the Company in good faith. If the Company determines that such Severance Benefit is subject to the 409A Suspension Period, and the Executive does not believe that such determination is reasonable, then the Company and the Executive shall mutually select, at the Company’s expense, an independent outside counsel to render a legal opinion regarding the applicability of the 409A Suspension Period. If the outside counsel described in the preceding sentence agrees with the Company’s determination that any items due to the Executive under this agreement should be subject to the 409A Suspension Period, then such payment shall be made at the end of the 409A Suspension Period as set forth in Section 17(b) hereof; provided however, if such outside counsel determines that such payment shall not be subject to the 409A Suspension Period, then such payment shall be effected within fourteen (14) days of the date of such counsel’s determination.

 

  

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IN WITNESS WHEREOF, the Executive has executed this Third Amended and Restated Employment Agreement, and the Company has cause this Third Amended and Restated Employment Agreement to be executed by its duly authorized representative, as of the date and year first above written.

 

	 	EXECUTIVE 
 

/s/Howard S. Jonas                                                 

Howard S. Jonas

GENIE ENERGY, LTD.

 

By:    /s/Avi Goldin                                                 

          Avi Goldin

          Chief Financial Officer

 

 

 10f8k032814ex1001_excelcorp.htm

Exhibit 10.01

 

EXCLUSIVE RESELLER AGREEMENT

This Agreement is made and entered into as of this 24th day of March, 2014 by and between TransBlue, LLC, a limited liability company having its principal place of business at 388 Beery Street, Brooklyn New York 11211 ( “TransBlue”), and 420 Solutions Corporation, a corporation duly organized and existing under the laws of the State of Delaware, having its principal place of business at 595 Madison Avenue, New York, New York (“Reseller”; Reseller is a wholly owned subsidiary of Excel Corporation (EXCC), a Delaware publicly traded corporation).

RECITALS

WHEREAS TransBlue is in the business of providing Point of Banking processing services for merchants (the “POB Services”, which category of products and services does not include point of sale (“POS”) credit and debit card transaction processing using point of sale equipment for purposes of this Agreement), directly or indirectly for and on behalf of one or more processors or sponsoring Banks (collectively, the “Banks”); and

WHEREAS, TransBlue desires to retain the services of the Reseller in the capacities herein set forth and the Reseller desires to represent TransBlue in such capacities.

NOW, THEN, THEREFORE, IN CONSIDERATION OF THE MUTUAL PROMISES AND COVENANTS HEREIN CONTAINED, TransBlue and the Reseller hereby agree as follows:

1.      Reseller Obligations.  Without limitation, the Reseller agrees to:

1.1           solicit potential merchants interested in procuring the POB Services (each a “Merchant”) for all POB Services that TransBlue offers;

1.2           carry out investigation, site inspection and assist potential Merchant in completing the Merchant Application provided by TransBlue and obtaining any and all documentation required in support thereof;

1.3           promote the continuing use of the POB Services to Merchants that Reseller has solicited to complete a Merchant Application, that have been approved to accept POB Services through TransBlue and that have had at least one POB unit/machine installed and activated at the Merchant’s location(s) through which the Merchant’s customers can use their PIN-based debit/ATM cards to authorize TransBlue’s processing of an ACH-debit transaction from that cardholder’s depository bank account (“hereinafter, “TransBlue Merchants”);

1.4           provide TransBlue Merchants with the name and address and contact information of TransBlue, or any Banks or other entity, which TransBlue represents, as specifically instructed by TransBlue in connection with all customer service questions;

 

  

  

  

 

1.5           in the course of promoting the POB Services, use only those marketing materials approved in writing in advance by TransBlue and obtain written approval of any marketing or solicitation material related to the Services prepared by Reseller or not otherwise furnished by TransBlue;

1.6           act in compliance with all applicable laws and regulations of Visa, MasterCard and NACHA and any other applicable laws, regulations or association rules;

1.7           conform to all applicable policies and procedures of TransBlue and perform his/her obligations in a good workmanship manner, with professional diligence and demeanor; and

1.8           have Excel Corporation issue common stock to TransBlue (or its designee(s) in accordance with Section 3, below.

2.      TransBlue Obligations. During the term hereof, TransBlue agrees to:

2.1           accept completed Merchant applications and agreements from Reseller and forward them to Banks, without any obligation or undertaking that such applications shall be approved or accepted, but while using its best efforts to get approval and acceptance of applications by Banks;

2.2           compensate Reseller in accordance with Schedule A hereto, on the 15th day of each month for all residual compensation due for POB transactions for which TransBlue received revenue during the prior calendar month (with residual reports segregating the revenue and transaction information by Merchant MID number(s)). Residual compensation shall continue to be paid to Reseller with respect to all TransBlue Merchants signed by Reseller for so long as Reseller is not actively targeting TransBlue Merchants to accept POB Services on behalf of any competitor of TransBlue, and for so long as the respective TransBlue Merchants are actively having POB transactions processed through TransBlue, remain in compliance with the terms hereof, and TransBlue is receiving revenue for those TransBlue Merchants from the Banks. TransBlue reserves the right to offset Reseller’s compensation for any amounts owed by Reseller to TransBlue, or any revenue paid to Reseller but is uncollected from any TransBlue Merchant, or any losses incurred by TransBlue due to any wrongful or negligent acts by Reseller. TransBlue shall not be obligated to pay Reseller residuals in any month during which Reseller’s total residual compensation is less than $300. If Reseller’s compensation is less than $300, the residual balances shall be carried over until the monthly $300 minimum is met.  TransBlue waives any claim against Reseller regarding any compensation it fails to dispute within thirty (30)-days unless there was no reasonable way that Reseller should have known that the compensation or residuals paid to it for that month was inaccurate.;

 

2.3           not utilize the services of any other resellers, agents, representatives, contractors, to market or solicit or sign any Merchants for POB Services in the following merchant/business types:  (a) merchants on the TMF or MATCH lists; (b) medical marijuana dispensaries; (c) head shops; (d) merchants without a social security number or federal tax identification/EIN number; (e) adult stores & escort services.  Reseller’s right to be the exclusive Reseller of TransBlue’s POB Services shall continue in perpetuity unless (x) the term of this Agreement expires, (y) this Agreement is terminated by TransBlue for cause or by Reseller without cause or (z) Reseller fails to successfully solicit Merchants that install and activate four hundred (400) POB units within the first twelve (12) months following the execution of this Agreement (e.g., by February 28, 2015) and a total of eight hundred (800) POB units within the first eighteen (18) months following the execution of this Agreement (e.g., by September 31, 2015);

 

  

  

  

 

2.4           exercise reasonable commercial efforts to white-label or co-brand for Reseller, the POB Services and supporting materials (such as Merchant Applications), and to include on such co-branded materials the statement that Reseller “is a wholly owned subsidiary of Excel Corporation (EXCC), a publicly traded company”;

2.5           exercise reasonable commercial best efforts to provide state-of-the-art POB units/machines and POB Services (and all ancillary products and services and supplies, including the prompt shipping and activation of fully encrypted POB units to TransBlue Merchants as soon as a Merchant signs a Merchant Application), as may be reasonably requested/needed for each TransBlue Merchant, and to insure that the POB Services are provided continuously, consistent with industry best practices, to all TransBlue Merchants;

2.6           exercise reasonable commercial best efforts to provide all TransBlue Merchants with 24/7 POB transaction processing, customer service, and support, and next-business day service or replacement of POB machines/units (with re-programming, encryption and installation);

2.7           provide continuing education and training to Reseller so that Reseller remains current and knowledgeable regarding the POB Services and any changes or additions thereto;

2.8.           fully comply with all applicable regulations, rules and procedures by Banks, NACHA, credit card associations and government regulators so as to avoid the interruption of the provision POB Services to TransBlue Merchants;  and

2.9           utilize best commercial efforts to ensure that any rates or fees that TransBlue charges to Reseller in addition to those listed in Schedule A hereto, including any increases in Schedule A rates caused by the increase in TransBlue’s costs of such services from the Banks or NACHA are provided to TransBlue, are passed through to Reseller or TransBlue Merchants at TransBlue’s costs, and that TransBlue has undertaken best commercial efforts to minimize those additional fees, charges or increases.

3.           Issuance of Securities.

(a)            Closing Stock Grant.  Upon execution hereof, the Reseller hereby agrees to have Excel Corp. issue to TransBlue (or its designee(s), 200,000 shares (the "Closing Stock") of Excel Corp.’s common stock, par value $.001 per share ("Common Stock").

 

  

  

  

 

(b)           Stock Earnout.  In addition to the foregoing, during the Term, provided that this Agreement has not been sooner terminated pursuant to the terms of this Agreement and TransBlue is not in default on its obligations under this Agreement, the Reseller shall cause Excel Corp. to issue to TransBlue (or its designee(s)) up to 800,000 shares of Excel Corp.’s Common Stock ("Earnout Shares"), calculated in accordance with the following formula: (i) 100,000 Earnout Shares upon the installation and activation of the one hundredth (100th) POB unit/machine at TransBlue Merchants; plus (ii) 100,000 Earnout Shares upon the installation and activation of the two hundredth (200th) POB unit/machine at TransBlue Merchants; plus (iii) 100,000 Earnout Shares upon the installation and activation of the three hundredth (300th) POB unit/machine at TransBlue Merchants; plus (iv) 100,000 Earnout Shares upon the installation and activation of the four hundredth (400th) POB unit/machine at TransBlue Merchants; plus (v) 100,000 Earnout Shares upon the installation and activation of the five hundredth (500th) POB unit/machine at TransBlue Merchants; plus (vi) 100,000 Earnout Shares upon the installation and activation of the six hundredth (600th) POB unit/machine at TransBlue Merchants; plus (vii) 100,000 Earnout Shares upon the installation and activation of the seven hundredth (700th) POB unit/machine at TransBlue Merchants; plus (viii) 100,000 Earnout Shares upon the installation and activation of the eight hundredth (800th) POB unit/machine at TransBlue Merchants.  For the purposes of this Agreement, the term Closing Stock and Earnout Shares shall be collectively referred to as the "Securities".

(c)           Consideration for Stock Issuance. The issuance of the Securities is made in consideration of the services to be provided by, and the exclusive right for Reseller to resell POB Services to certain merchant types/market segments for, TransBlue during the Term.

(d)           Adjustment to the Number of Securities.                                                                           The number of Securities issuable hereunder is subject to adjustment from time to time, as follows: (i) if Excel Corp. at ny time shall split or subdivide its shares, the Securities shall be proportionately increased; and (ii) if Excel Corp. at any time shall combine or reverse split its shares the number of Securities issuable shall be proportionately decreased.

(e)           No Voting Rights.  TransBlue (or its designee(s)) will not be entitled to any voting rights or other rights as it relates to the Earnout Shares until they have been issued in accordance with Section 3 (b) above.

(f)           Representations and Warranties of TransBlue. TransBlue represents and warrants to the Reseller that:

 

(i)           Information on TransBlue.   TransBlue has been furnished with or has had access at the EDGAR Website of the Commission to Excel Corp.’s filings and disclosures (hereinafter referred to collectively as the "Reports").

(ii)           Information on TransBlue.   TransBlue (and/or the majority owners of TransBlue) is an "accredited investor", as such term is defined in Regulation D promulgated by the Commission under the 1933 Act, is experienced in investments and business matters, has made investments of a speculative nature and has purchased securities of United States publicly-owned companies in private placements in the past and, with its representatives, has such knowledge and experience in financial, tax and other business matters as to enable TransBlue to utilize the information made available by the Reseller to evaluate the merits and risks of and to make an informed investment decision with respect to the Securities, which represents a speculative investment.  TransBlue has the authority and is duly and legally qualified to purchase and own the Securities.  TransBlue is able to bear the risk of such investment for an indefinite period and to afford a complete loss thereof.

 

  

  

  

 

(iii)           Purchase of Securities.  On the Closing Date, TransBlue will acquire the Securities as principal for its own account for investment only and not with a view toward, or for resale in connection with, the public sale or any distribution thereof.

(iv)           Compliance with Securities Act.   TransBlue understands and agrees that the Securities have not been registered under the 1933 Act or any applicable state securities laws, by reason of their issuance in a transaction that does not require registration under the 1933 Act (based in part on the accuracy of the representations and warranties of TransBlue contained herein), and that such Securities must be held indefinitely unless a subsequent disposition is registered under the 1933 Act or any applicable state securities laws or is exempt from such registration.

(v)           Securities Legend.  The Securities shall bear the following or similar legend:

"THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, NOR APPLICABLE STATE SECURITIES LAWS.  THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT.  NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES."

(vi)           Communication of Offer.  The offer to sell the Securities was directly communicated to TransBlue by the Reseller.  At no time was TransBlue presented with or solicited by any leaflet, newspaper or magazine article, radio or television advertisement, or any other form of general advertising or solicited or invited to attend a promotional meeting otherwise than in connection and concurrently with such communicated offer.

(vii)           No Governmental Review.  TransBlue understands that no United States federal or state agency or any other governmental or state agency has passed on or made recommendations or endorsement of the Securities or the suitability of the investment in the Securities nor have such authorities passed upon or endorsed the merits of the offering of the Securities.

 

  

  

  

 

3.      Independent Contractor Status/Working Facilities/Downline Agents. The Reseller shall furnish its own office space, such facilities, and services, as shall be reasonably necessary for the performance of duties of Reseller hereunder. Reseller may utilize the services of its own independent contractors, sales representatives, agents or affiliates to perform its obligations hereunder, but Reseller shall maintain solely responsible to insure that such agents comply with the applicable terms of this Agreement. TransBlue and Reseller shall be deemed to be independent contractors and neither party shall be considered to be an employee, joint venture or partner of each other. Reseller shall not incur any debt in the name of TransBlue, nor shall Reseller enter into or hold out that it has the right to enter into any legally binding agreements on behalf of TransBlue or the Banks.  All Merchant Applications shall be subject to the approval of TransBlue or the Banks.

4.      Expenses. Reseller shall be responsible for all business expenses, which are incurred by the Reseller in the course of carrying out is obligations hereunder, unless otherwise previously agreed in writing by TransBlue. Any such agreed upon expenses may be reimbursed upon the presentation by the Reseller of an itemized account of such expenditures containing such details as may be required by TransBlue policy or an officer of TransBlue.

5.      Representations. Each party hereto represents, warrants and covenants the following to and for the benefit of other:

5.1           Good Standing.  It is validly existing and in good standing under the laws of the State of Delaware.

5.2           Full Authority.  It has full authority and corporate power to enter into this Agreement and to perform its obligations under this Agreement.

5.3           Sale of Information.  It shall not sell, purchase, provide or exchange credit card, debit card or Banks account numbers or any Merchant information collected or received through the POB system, to any third party without the consent of the other Party, which consent shall not be unreasonably withheld; any and all such Merchant Information is jointly owned by Reseller and TransBlue and the Parties shall equally share in any revenues derived from the sale of the Merchant Information thereof (not including the use by Excel and Excel’s other subsidiary company to cross-sell other products and services, i.e., cash advance purchase of receivables and credit and debit card processing services).

5.4           No Violation.  Its performance of this Agreement shall not violate any applicable law or regulation or any agreement to which it is bound as of the date hereof.

5.5           Enforceability.  This Agreement represents a valid obligation of the party and is fully enforceable against it.

  

  

  

 

5.6           Compliance.  It shall comply with the terms of this Agreement, with all applicable Banks card association and ACH network rules, including, without limitation those of NACHA, and with all applicable state and federal laws and regulations and any agreement between TransBlue and applicable Banks as well as all applicable Banks’ ethics statements.

 

5.7           No Litigation.  Neither it nor any of its officers and directors are a party to any pending litigation that would have an impact on this Agreement and have never been fined or penalized by Visa, MasterCard, NACHA or any other association in the credit, payments or Banking industry; and

5.8           No Crime.  Neither it, nor any of its officers and directors have never been convicted of a crime punishable by greater than 365 days of incarceration or of a crime of dishonesty.

 

5.9           Compliance with Bank Agreements.   It shall conduct its business in such a way so as not to cause the other Party to violate the provisions of any agreement between either Party and any Banks or any other third party.

6.      Restrictive Covenants.

6.1           Reseller agrees that all financial data, customer lists, computer programs, contracts, agreements, books, records, correspondence and other materials furnished to the Reseller by TransBlue TransBlue are and shall remain property of TransBlue and are confidential. Reseller agrees to deliver all such materials including copies thereof to TransBlue upon termination of Reseller’s activities hereunder, or at any time at TransBlue’s request. The Reseller further agrees the Reseller shall not at any time during or after the term hereof (except in fulfillment of Reseller’s obligations under this agreement) use for his/her own personal use, reveal, divulge, disclose, sell, transfer, or make known to any person or entity any such confidential information, including, but not limited to: customer lists, trade secrets or confidential business information relating to the business of TransBlue and shall retain all such knowledge and information in trust in a fiduciary capacity for the sole benefit of TransBlue, its successors and assigns unless such disclosure has been authorized by TransBlue or is required by law, a court of competent jurisdiction or a governmental regulatory agency.  TransBlue acknowledges and agrees that customer lists or information developed by Reseller using its own efforts or obtained from any source other than TransBlue is and shall remain the sole and exclusive property of Reseller, and TransBlue shall make no claim thereto.

6.2           Reseller specifically agrees that, during the term hereto, it shall not: (i) directly or indirectly for or on behalf of any third party, solicit, nor attempt to move, nor change the POB Services merchant account relationship of a TransBlue Merchant to another provider of POB processing services; or (ii) solicit or offer services that are in any way competitive with the POB Services offered by TransBlue. (The parties agree that credit and debit transaction processing services at the point of sale are NOT deemed to be competitive with POB Services, and Reseller and its agents, representatives, employees and affiliates may market such services and other ancillary products and services to TransBlue Merchants.)

 

  

  

  

 

6.3           During the term of this agreement and for eighteen (18) months after the termination of this agreement, the Reseller shall not (a) target any TransBlue Merchant located in the United Sates for the same or similar POB services being provided by TransBlue for solicitation to move that business to a competing POB entity or organization, or (b) directly or indirectly entice, induce or in any manner influence any person who is, or shall be in the service of TransBlue to leave the same for the purpose of engaging in a business or being employed by or associated with any person or entity which conducts such a business.

7.      Term. The term of this agreement shall be for a period of four (4) years commencing on the date signed below. Thereafter, this Agreement shall automatically renew for consecutive, additional one (1) year terms unless either party shall provide the other party written notice of non-renewal at least 30 days prior to the commencement of any additional one (1) year term hereof. TransBlue’s obligations to pay residual compensation to Reseller shall continue in perpetuity and shall survive the termination of this Agreement.

8.      Survival Clause. The following provisions of this Agreement shall survive termination of this agreement and shall inure to the benefit of the respective parties, their successors and assigns: 2.2, 2.4, 2.5, 2.6, 2.8, 2.9, 5.3, 6, 8, 9, 10, 11, 12, 13, 14, 15 and 16.

9.      Indemnification.

9.1           Each party (the “Indemnifying Party”) shall save, defend, indemnify, reimburse and hold other Party harmless for all suits, actions, proceedings, looses, claims, liabilities, damages, costs and expenses (including all costs and reasonable attorney’s fees) actually incurred in connection with any consultation, negotiation, or actual action, suit, or proceeding to which the other Party shall be made a party by reason of:

(a)           the acts or omissions of the Indemnifying Party;

(b)           the Indemnifying Party’s violation of this agreement, applicable law, Credit Card Association, NACHA, rules or the other Party’s policy and procedures;

(c)           any fraudulent or dishonest conduct or misrepresentation of or by the Indemnifying Party; or

(d)           taxes owed with respect to compensation hereunder.

 

9.2           In the event either Party makes any claim under this provision, the claiming Party shall have the right, (subject to its right of reimbursement hereunder) but not the obligation, to defend the suit with counsel of its choice.  The Indemnifying Party agrees to cooperate in such an action. The Claiming Party agrees not to settle any claim for which indemnification hereunder may be sought without prior written consent of the Indemnifying Party.

 

  

  

  

 

9.3           Under no circumstances shall either Party be liable for any indirect or consequential damages hereunder. Under no circumstances shall the liability of either Party exceed the aggregate amount of residual commissions actually paid to the Reseller in the three (3) months preceding the event giving rise to liability.

10.       No Prior Agreements. This Agreement supersedes all prior agreements and understandings between the Reseller and TransBlue and its directors, officers, shareholders, Resellers, or representatives and constitutes. This is the entire agreement between the parties respecting the subject matter hereof and there are no representations, warranties or commitments other than those expressed herein.

11.      No Waiver/Oral Modifications.  No modification or amendment or waiver of any clause or provisions this Agreement shall be valid unless in writing and assigned by the party to be bound, with all the dignity and formality of this Agreement.  Failure to timely enforce a provision shall not be deemed or construed to be a waiver by either party of one of the provisions of this agreement.  Any waiver shall not operate or be construed as a waiver of any subsequent or similar event or the enforcement of other clauses or provisions of this Agreement.

12.      Notice. Notice hereunder shall be in writing and shall be deemed to have been properly given when delivered personally to the address of the other Party set out above, or, as when sent by facsimile with telephone confirmation of receipt or when sent by overnight courier one day after deposit or by U.S. registered or certified mail, postage prepaid with return receipt requested three business days after deposit thereof to the other Party at the address written below after the signature of the other Party, or to such other place as either party may designate by prior written notice.

13.      Assignability. This Agreement is for services of the Parties only and may not be assigned or transferred without the express written consent of the other Party, which consent shall not be unreasonably withheld. This Agreement shall inure to the benefit of and be binding upon the Parties and their respective heirs, personal representatives, successors and permitted assigns. Reseller is permitted to assign certain functions hereunder, and the receipt of residuals, to Reseller’s agents, representatives, ISOs, subcontractors.  Reseller is permitted to sell any residual stream hereunder to any other party, without prior notice to or consent of TransBlue.

14.      Dispute Resolution. This agreement shall be governed by and construed in accordance with the laws of the State of New York and any dispute shall be submitted to binding arbitration, before a sole arbitrator, with such arbitration to be conducted in the State of New York, County of Kings and shall be conducted under the rules (but not the auspices) of the Commercial Section of the Arbitration Association of America.  The parties shall select the arbitrator from a list of ten arbitrators who work or live within twenty (20) miles of the Kings County courthouse, by alternatively striking one name from the list until only one remains.  The parties shall each advance one half of the estimated fees to the arbitrator in advance of the commencement of the arbitration, and the prevailing party in any arbitration shall recover the costs of the arbitration (including the reasonable attorneys’ fees).  Each party irrevocably consents to the jurisdiction of the Courts of the State of New York, County of Kings, for any action to confirm an arbitration award, or to enforce any violations of the Confidentiality, Noncompetition or Nonsolicitation obligations of the parties hereunder.

 

  

  

  

 

15.      Severability, Construction and Headings. If any portion hereof shall be found invalid for any reason, it shall not affect the other portions. For purposes of construction, this Agreement shall be deemed as being drafted by both parties, equally.  The paragraph headings are provided for convenience only, and shall not be interpreted as binding or determinative of the intent of the parties.

16.      Execution. This agreement may be executed in counterparts, each which shall be deemed an original, but all of which together shall constitute one and the same instrument.  By signing below, each signatory represents, warrants and agrees that s/he has the actual authority to bind his/her respective company and that all necessary corporate approvals have been granted:

 

	420 Solutions Corporation, 

A Wholly Owned Subsidiary of 

Excel Corporation

	 	 	 TransBlue, LLC	 
	 	 	 	 	 
	
By: _________________________

	 	 	
By: _________________________

	 
	
Name: Ruben Azrak

	 	 	
Name: Jacob Katz

	 
	
Title: Excel Interim CEO

	 	 	
Title: Managing Member/President

	 
	Date: __________________	 	 	Date: _______________	 
	 	 	 	 	 
	WITNESSED BY:  	 	 	WITNESSED BY:  	 
	 	 	 	 	 
	_________________________ 	 	 	_________________________ 	 
	Name:	 	 	Name:

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