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Exhibit 10.6  

 
 

EMPLOYMENT AGREEMENT    
    

THIS EMPLOYMENT AGREEMENT made as of the 1st day of April, 2006. 

B E T W E E N:

HOSTOPIA.COM INC.,

a corporation incorporated under the laws of the State of Delaware (the "Hostopia") 

OF THE FIRST PART

– AND –

PAUL ENGELS

of the City of Toronto in the Province of Ontario (the "Employee") 

OF THE SECOND PART

        WHEREAS Hostopia has agreed to employ the Employee in the position of Executive Vice President and Chief Marketing Officer, and the
Employee has agreed to accept such employment; 

        AND WHEREAS the Employee shall be employed on a full-time basis and shall devote his time, attention and ability to the
business and affairs of Hostopia and shall loyally and faithfully serve Hostopia as Executive Vice President and Chief Marketing Officer during the continuance of his employment under
this agreement; 

        AND WHEREAS the Employee shall use his best efforts to promote the interests of Hostopia; 

        AND WHEREAS the amount of the Employee's annual salary and additional remuneration shall be subject to the final approval of the
compensation committee of the board of directors of Hostopia; 

        AND WHEREAS Hostopia and the Employee wish to record the terms and conditions with respect to the employment relationship
between them; 

        NOW, THEREFORE, in consideration of the Employee's employment by Hostopia and the compensation paid to the Employee from time to time
while so employed, it is agreed: 

 

Section 1.00 — ENGAGEMENT  

	1.1
	Hostopia
hereby agrees to engage the services of the Employee, effective on April 1, 2006, and the Employee hereby accepts this position subject to and upon the terms and
conditions contained in this agreement.

	1.2
	Subject
to 4.1 and 4.3 below, the Employee will be employed for an indefinite period. 

Section 2.00 — DUTIES  

	2.1
	The
Employee shall be employed on a full-time basis and shall devote his time, attention and ability to the business and affairs of Hostopia and shall loyally and
faithfully serve Hostopia during the continuance of his employment under this agreement and shall use his best efforts to promote the interests of Hostopia.

	2.2
	The
Employee shall be subject to the direction and supervision of Colin Campbell or such other persons designated by Hostopia's board of directors.

	2.3
	The
Employee shall comply with all of the rules, regulations and by-laws of Hostopia and with all reasonable orders given by Colin Campbell or such other persons
designated by Hostopia's board of directors.

	2.4
	The
Employee shall be required to provide his services at the head offices of Hostopia in the City of Mississauga, in the Province of Ontario and at such other place or places as
Colin Campbell or such other persons designated by Hostopia's board of directors may designate. 

Section 3.00 — REMUNERATION AND VACATION  

	3.1
	The
Employee's compensation will be paid by Hostopia in accordance with Schedule "A" attached hereto, and the usual policies of Hostopia in force from time to time.

	3.2
	The
Employee's compensation will be reviewed annually by Hostopia, with the first such review to occur one year from the date of this Agreement. Hostopia shall be under no obligation
to increase the compensation at the time of any salary review. In the event that the Employee's compensation is increased, Schedule "A" shall be amended accordingly.

	3.3
	The
Employee shall be entitled to three (3) weeks vacation with pay, during each year of his employment and shall be taken at such time or times as approved by Hostopia.

	3.3
	The
Employee shall be entitled to participate in all benefit plans in effect from time to time for employees of Hostopia, including medical and insurance plans, on the same terms and
conditions as other Hostopia managers 

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	3.4
	The
Employee shall be entitled to participate in the stock option plan offered by Hostopia. Notwithstanding the foregoing, Hostopia in its sole discretion shall determine whether the
Employee will be granted any stock options. 

SECTION 4.00 — TERMINATION  

	4.1
	This
Agreement and the services of the Employee under this Agreement shall be immediately terminated without notice, at the option of Hostopia upon the occurrence of any of the
following events:

	(a)
	if
the Employee dies;

	(b)
	if
the Employee breaches his duties or obligations to Hostopia so as to entitle Hostopia to terminate his for cause, including without limitation, serious misconduct, acts of fraud or
theft against Hostopia, habitual neglect of duty, incompetence, conduct incompatible with his duties or conduct prejudicial to Hostopia's business, or willful disobedience of Hostopia's orders in a
matter of substance;

	(c)
	if
the Employee commits any criminal offence against Hostopia or against any other person or entity such that Hostopia, in its sole discretion, regards the commission of such offence
as being incompatible with the Employee's employment;

	(d)
	if
the Employee is guilty of a breach or non-observance of any of the terms and conditions contained in this Agreement;

	(e)
	if
the Employee is unable to perform his duties and responsibilities on behalf of Hostopia for a period of six (6) months (the "Period of
Illness") and Hostopia is unable to accommodate his disability. For the purposes of calculating a Period of Illness, any absence due to illness shall be considered to be
continuous from the date the Employee was first absent ("First Absence"), where the Employee does not return to perform his duties for more than five
(5) consecutive working days following the First Absence; or

	(f)
	if
the Employee is employed by any party other than Hostopia.

	4.2
	In
the event the Employee's employment is terminated for any of the reasons set out in Section 4.1, Hostopia shall give written notice of termination to the Employee in
accordance with Section 6.1 below, setting out, in summary form, the reasons for termination. Following the foregoing notice, Hostopia shall be released from all liabilities and obligations to
the Employee under this Agreement and at common law following payment to the Employee of any remuneration and benefits owing to him/her as at the date of termination.

	4.3
	Notwithstanding
Sections 1.2 and 4.1 of this Agreement, Hostopia shall be entitled to terminate the employment of the Employee without cause and without notice at any time, provided
that Hostopia pays compensation in lieu of notice in accordance with Schedule "A". 

3

 
	4.4
	This
Agreement is subject to the final approval of the compensation committee of the board of directors of Hostopia. 

SECTION 5.00 — CONFIDENTIALITY, PROPRIETARY RIGHTS,

NON-COMPETITION AND NON-SOLICITATION AGREEMENT  

	5.1
	The
Employee agrees to be bound by the terms and conditions of the confidentiality, proprietary rights, non-competition and non-solicitation agreement annexed
hereto as Schedule "B" (the "Confidentiality, Proprietary Rights, Non-Competition And
Non-Solicitation Agreement"). 

SECTION 6.00 — NOTICE  

	6.1
	Any
notice in writing required or permitted to be given to the Employee under this Agreement shall be sufficiently given if a) delivered to the Employee personally,
b) emailed to the email address provided to the Employee by Hostopia, or c) sent by registered mail to the Employee at his last known residential address. Any notice mailed shall be
deemed to have been received by the Employee on the third (3rd) business day following the date of mailing. Any notice in writing required or permitted to be given to Hostopia under this
Agreement shall be sufficiently given if delivered to Hostopia at its registered office or mailed by registered mail, postage prepaid, addressed to Hostopia at its registered office. Any notice mailed
shall be deemed to have been received by Hostopia on the third (3rd) business day following the date of mailing. If mail service is interrupted then any notice during that period of
interruption shall be delivered by personal service. 

SECTION 7.00 — GOVERNING LAW  

	7.1
	The
provisions of this Agreement shall be governed by and construed in accordance with the laws of the Province of Ontario or the laws of Canada applicable therein. Each of the
parties to this Agreement irrevocably attorn to the jurisdiction of the courts of Toronto in the Province of Ontario. 

SECTION 8.00 — ENUREMENT  

	8.1
	The
provisions of this Agreement shall enure to the benefit of and be binding upon the heirs, executors, administrators and legal personal representatives of the Employee and upon the
successors and assigns of Hostopia. 

SECTION 9.00 — ASSIGNMENT  

	9.1
	This
Agreement shall not be assignable by the Employee under any circumstances. 

4

 

SECTION 10.00 — COMPLETE AGREEMENT  

	10.1
	This
Agreement and all Schedules annexed hereto constitute the entire agreement between the parties and there are no representations, warranties, covenants, agreements or
understandings relative thereto which are not set forth in this Agreement. This Agreement replaces all other agreements, understandings and negotiations whether written or oral which may have existed
between the parties and constitutes the entire agreement between them. No provision of this Agreement shall be effectively amended or waived except in writing signed by the party against whom the
amendment or waiver is sought to be enforced. 

SECTION 11.00 — SEVERABILITY  

	11.1
	Hostopia
and the Employee acknowledge and agree that if any provision of this Agreement or the application of such provision to any party or person or circumstance is held illegal,
invalid, or unenforceable, the remainder of this Agreement, or the application of such provision to a party or person or circumstance other than those as to which it is held illegal, invalid, or
unenforceable shall not be affected thereby. 

SECTION 12.00 — MISCELLANEOUS  

	12.1
	Sections
and section headings contained in this Agreement are included solely for convenience and are not intended to be full or accurate descriptions of the contents of the Sections
and shall not be considered as part of this Agreement.

	12.2
	Each
of the parties hereto may extend the time of performance and waive non performance by any of the other parties to this Agreement of their respective obligations and agreements
under this Agreement, but no act or failure to act by any of the parties shall be deemed to be an extension or waiver of time and strict performance by the other parties of this Agreement of such
obligations and agreements except to the extent of notices given to such of the other parties in writing. 

SECTION 13.00 — EMPLOYEE ACKNOWLEDGEMENT  

	13.1
	The
Employees acknowledges that he:

	(a)
	has
had sufficient time to review this Agreement thoroughly;

	(b)
	has
read and understood the terms and binding effect of this Agreement;

	(c)
	accepts
the terms herein voluntarily and without duress or compulsion;

	(d)
	has
been advised of the right to obtain independent legal and other advice in connection with the execution of this Agreement, and has either obtained or hereby waives the obtaining
of such advice. 

5

 

IN WITNESS WHEREOF this Agreement has been duly executed by the parties hereto. 

	 	 	HOSTOPIA.COM INC.
	

 	
 	

Per:	
 	

/s/ COLIN CAMPBELL
 Colin Campbell
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	/s/ MICHAEL BAYER
Witness:	 	 	 	/s/ PAUL ENGELS
PAUL ENGELS

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Schedule "A"    
    

Total
compensation for the Employee during the period beginning April 1, 2006 and ending March 31, 2007 shall be in accordance with the following: 

	1.
	The
Employee's base salary shall be CDN$160,000 per year, subject to statutory deductions and payable bi-weekly in accordance with the usual policies of Hostopia in force
from time to time.

	2.
	The
Employee shall be eligible to receive additional remuneration in accordance with the following tables, provided that the Sales and Income Goals are met. Hostopia's board of
directors shall determine Hostopia's Sales Goals and Income Goals annually. 

	Sales Goals
	 	Income Goals

	90% of goal:	 	$4,000 and	 	 	 	 
	95% of goal:	 	$4,000 and	 	90% of goal:	 	$2,500 and
	98% of goal:	 	$4,000 and	 	95% of goal:	 	$5,000 and
	99% of goal:	 	$4,000 and	 	100% of goal:	 	$10,000 and
	100% of goal:	 	$20,000 and	 	 	 	 
	102.5% of goal:	 	$15,000 and	 	 	 	 
	105% of goal:	 	$15,000	 	 	 	 

	3.
	The
additional remuneration in section 2 above shall be payable in accordance with the following schedule. 

	Amount Payable 
	 	When Payable 

	20% of the projected annual Employee bonus, based upon Hostopia's performance as indicated in Hostopia's unaudited financial statements, during its first fiscal quarter.	 	30 days following the end of Hostopia's first fiscal quarter.
	25% of the projected annual Employee bonus, based upon Hostopia's performance as indicated in Hostopia's unaudited financial statements, during second fiscal quarter.	 	30 days following the end of Hostopia's second fiscal quarter.
	25% of the projected annual Employee bonus, based upon Hostopia's performance as indicated in Hostopia's unaudited financial statements, during its third fiscal quarter.	 	30 days following the end of Hostopia's third fiscal quarter.
	The remainder of any actual Employee bonus, based upon Hostopia's performance as indicated in Hostopia's unaudited financial statements, during its fourth fiscal quarter.	 	30 days following the end of Hostopia's forth fiscal quarter.

 
	4.
	The
Employee shall be eligible to receive further additional remuneration in accordance with the following: 

	Goal Achieved
	 	Remuneration

	(i)	 	15 (or such other amount as determined by Colin Campbell) contracts per quarter duly authorized and entered into by Hostopia that are credited to the sales teams (minimum $450 per month billing)	 	$	2,000
	 	 	AND	 	 	 
	(ii)	 	18 (or such other amount as determined by Colin Campbell) contracts per quarter duly authorized and entered into by Hostopia that are credited to the sales teams (minimum $450 USD per month billing)	 	$	4,000
	 	 	AND	 	 	 
	(iii)	 	Any Strategic Services Agreement duly authorized and entered into by Hostopia that has minimum monthly revenue that is no less than $20,000 for 12 months either actual or contractual (where there is no right of
termination for convenience during the first 12 months of the term of the agreement), as determined by Hostopia's CEO, President/COO and CFO. The remuneration set out herein may be earned by the Employee, one time for each Strategic Services
Agreement, where the above conditions are met and the Employee remains employed by Hostopia, during the twenty-four month period following the effective date of the Strategic Services Agreement	 	$	5,000

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Additional
Terms 

	(i)
	The
amount by which any of the following material transactions increase or decrease the Employee's remuneration may be excluded from the Employee's remuneration, at the
sole discretion of Hostopia's board of directors:

	(a)
	Purchase
or sale of any assets of Hostopia, or Hostopia's subsidiaries;

	(b)
	Amalgamation,
merger or acquisition by, or of, Hostopia;

	(c)
	Amalgamation,
merger or acquisition by, or of, Hostopia's subsidiaries or business divisions;

	(d)
	Issuance
of any options, warrants or shares of Hostopia;

	(e)
	Any
other transaction or event, which would result in the Employee being unjustly enriched.

	(ii)
	In
the event that the Employee is terminated for any reason, other than for cause, the Employee shall a) continue to receive his salary at his current rate for a
period of no less than 6 months to the date of termination; b) receive any commissions up to the date of termination, if any have been earned in accordance with existing goals; and
c) receive an additional two weeks of severance pay at his current rate for each year of service completed by Employee.

	(iii)
	In
addition, if the company a) files a prospectus in Canada or a registration statement in the United States in respect of an initial public
offering and b) Hostopia's shares are listed on a Canadian or American stock exchange; the Employee will receive a one time bonus of $20,000.00. 

9

  

 
 

Schedule "B"
 
  CONFIDENTIALITY, PROPRIETARY RIGHTS,
  NON-COMPETITION AND NON-SOLICITATION AGREEMENT    
    

        The Employee hereby acknowledges and agrees that the Employee's employment by Hostopia is subject to the following terms and conditions: 

DEFINITIONS  

	1.
	In
this agreement, the following words and phrases shall have the following meanings unless the context otherwise requires:

	a)
	"Business
Opportunities" means potential business ventures of all kinds, including acquisitions, sales, business arrangements and other transactions and
opportunities for new markets, products and services which have been disclosed to, investigated, studied or considered by Hostopia or by others on behalf of Hostopia;

	b)
	"Confidential
Information" means information known or used by Hostopia in connection with its business including but not limited to any formula, design,
prototype, compilation of information, data, program, code, method, technique or process, information relating to any product, device, equipment or machine, Customer Information, Financial
Information, Marketing Information, Intellectual Property, Business Opportunities, or Research and Development, but does not include any of the foregoing which was known to the Employee prior to
employment by Hostopia or which is or becomes a matter of Public Knowledge;

	c)
	"Customer
Information" means information pertaining to Hostopia's customers, customer base and markets, including customer names and addresses and the
names of employees of customers with whom Hostopia is in contact, customer requirements and Hostopia's contracts with its customers, including details about pricing and supply and shall also be deemed
to mean and include confidential information which may be the property of the customer and provided to Hostopia by the customer on terms and conditions which require Hostopia and its employees to
retain such confidential information in confidence;

	d)
	"Developments"
includes any and all Intellectual Property made or created by the Employee alone or jointly with others during the employment of the
Employee with Hostopia or which result from tasks assigned to the Employee by Hostopia or which result from the use of the premises or property of Hostopia (including equipment, supplies or
Confidential Information);

	e)
	"Financial
Information" means information pertaining to Hostopia's costs, sales, income, profit, profitability, pricing, salaries and wages;

	f)
	"Intellectual
Property" means any and all inventions, designs, works, creations, developments, software, programs, codes, source code, drawings, sketches,
compilation of information, analyses, experiments, data, formula, methods, processes, techniques, prototypes, products, samples, and includes any modifications or improvements thereto;

	g)
	"Marketing
Information" means information including but not limited to Hostopia's marketing programs, plans, strategies and proposed future products,
services, advertising and promotions;

	h)
	"Public
Knowledge" means information that is generally known in the trade or business in which Hostopia is engaged, or is otherwise easily accessible
through lawful, non-confidential sources;

	i)
	"Research
and Development" means information pertaining to any research, development, investigation, study, analysis, experiment or test carried on or
proposed to be carried on by Hostopia; and

	j)
	"Domain
Name" means any domain name that is registered by the Employee during the term of the Employee's employment that would not have been registered by
the Employee had the Employee not been provided with Confidential Information. 

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ACKNOWLEDGMENTS  

	2.
	The
Employee acknowledges that:

	a)
	during
the course of employment by Hostopia the Employee will be exposed to and will have an opportunity to learn or otherwise become aware of Confidential Information;

	b)
	the
Confidential Information is a valuable asset which is the property of Hostopia exclusively, the unauthorized use or disclosure of which would cause very serious harm to the
economic interests of Hostopia;

	c)
	it
is important to Hostopia that the Confidential Information remain the exclusive confidential property of Hostopia and that it not be used or disclosed except in accordance with the
knowledge and consent of Hostopia and in Hostopia's best interest; and

	d)
	the
term "Hostopia" includes Hostopia.com Inc., BlueGenesis.com Corp., Internet Names For Business Inc. or any previous, current or future subsidiary, partner or
affiliate of Hostopia.com Inc. BlueGenesis.com Corp. or Internet Names For Business Inc. 

CONFIDENTIAL INFORMATION TO BE KEPT IN CONFIDENCE  

	3.
	The
Employee agrees that at all times during the period of the Employee's employment and at all times following termination of the Employee's employment,

	a)
	the
Employee shall hold in confidence and keep confidential all Confidential Information;

	b)
	the
Employee shall not directly or indirectly use any Confidential Information except in the course of performing duties as an Employee of Hostopia with the knowledge and consent of
Hostopia in Hostopia's interests; and

	c)
	the
Employee shall not directly or indirectly disclose any Confidential Information to any person or entity, except in the course of performing duties as an employee of Hostopia with
the knowledge and consent of Hostopia in Hostopia's interests.

	4.
	Nothing
in this agreement shall prevent the Employee following termination of employment by Hostopia from making use of or disclosing,

	a)
	any
Confidential Information which lawfully is, or lawfully becomes, a matter of Public Knowledge;

	b)
	any
Confidential Information of which the Employee had specific knowledge prior to employment by Hostopia, except to the extent that such Confidential Information has become the
property of Hostopia under paragraphs 6, 7 or 8 herein; or

	c)
	any
Confidential Information of which the Employee obtains specific knowledge following termination of employment by Hostopia from a third party, unless the third party obtained such
Confidential Information directly or indirectly from an individual in violation of any duty of confidence owed to Hostopia; provided that the Employee is able to prove the existence of the
circumstances referred to in subparagraphs 4(a), 4(b), and 4(c) herein. 

RETURN OF PROPERTY AND MATERIALS UPON TERMINATION  

	5.
	Upon
termination of the Employee's employment by Hostopia, the Employee shall promptly deliver to Hostopia all Hostopia property, including without limitation, lap top computers, cell
phones, documents, manuals, lists, data, records, computer programs, codes, materials, prototypes, products, samples, analyses, reports, equipment, tools and devices and any other materials relating
or pertaining to Hostopia's business or containing or pertaining to any Confidential Information, including any copies or reproductions of the same. 

11

 

OWNERSHIP OF DEVELOPMENTS AND DOMAIN NAMES  

	6.
	Any
and all Developments shall be and remain the exclusive property of Hostopia and the Employee shall have no right, title or interest therein even though the Employee may have
created or contributed to the creation of any of the Developments; and Hostopia shall have the sole and exclusive right, title and interest in and to the Developments, which right shall continue
notwithstanding the termination of employment of the Employee.

	7.
	Any
Domain Name shall be and remain the exclusive property of Hostopia and the Employee shall have no right, title or interest therein. Any Domain Name registered in the name of the
Employee shall be held in trust for Hostopia by the Employee and Hostopia shall have the sole and exclusive right, title and interest in and to the Domain Name, which right shall continue
notwithstanding the termination of employment of the Employee. The Employee hereby authorizes Hostopia, on the Employee's behalf, to alter the administrative contact or ownership information held by
the registrar of a Domain Name. 

ASSIGNMENT OF RIGHTS  

	8.
	The
Employee hereby assigns to Hostopia any and all right, title and interest that the Employee may have in and to the Developments and in any patent, copyright, industrial design,
trade mark and any other similar right pertaining to the Developments which the Employee may have by virtue of having created, made, conceived or contributed to any such Developments. For purposes of
U.S. copyright law, each copyrightable Development shall be considered a work made for hire and owned by Hostopia. The Employee further agrees to maintain at all times adequate and current
records relating to the creation and development of the Developments, which records shall be and shall remain the property of Hostopia. 

INTELLECTUAL PROPERTY PROTECTION  

	9.
	Hostopia
alone shall have the right to apply for, prosecute and obtain patents and copyright, industrial design and trade mark registrations and any other registrations or grants of
rights analogous thereto in any and all countries throughout the world in respect to the Developments and the Employee agrees to execute on demand, whether during or subsequent to Employee's
employment, any applications, transfers, assignments and other documents as Hostopia may consider necessary or desirable from time to time for the purpose of obtaining, maintaining or vesting in or
assigning to Hostopia absolute title to any such patents, copyright, industrial design or trade mark or registrations in the Developments, or for the purpose of applying for, prosecuting, obtaining or
protecting any such patents, copyright, industrial design or trade mark registrations in any and all countries of the world; and the Employee further agrees to cooperate and assist in every way
possible in the prosecution and protection of any such applications and the rights granted in respect thereof.

	10.
	The
Employee agrees that Hostopia, its assignees and their licensees are not required to designate the Employee as the author of any Developments. The Employee hereby waives in whole
all moral rights which the Employee may have in the Developments, including the right to the integrity of the Developments, the right to be associated with the Developments, the right to restrain or
claim damages for any distortion, mutilation or other modification of the Developments, and the right to restrain use or reproduction of the Developments in any context and in connection with any
product, service, cause or institution.

	11.
	Listed
in Exhibit A to this Agreement are those works and inventions created by the Employee, alone or jointly with others, prior to the Employee's employment by
Hostopia, which are exempt from the operation of this Agreement. If nothing is listed in Exhibit A, the Employee represents that the Employee has made no such works or inventions as of the date
of this Agreement.

	12.
	The
Employee represents warrants and agrees that the Employee shall not: a) use or disclose to Hostopia the confidential information of another person or entity, or
b) use the intellectual property of a third party without permission. Employee shall indemnify, defend and hold harmless Hostopia, its directors, officers, shareholders, agents and advisors
with respect to any and all costs, expenses, losses, damages or liabilities arising from breach of this representation, warranty or agreement. 

PROTECTION OF COMPUTER SYSTEMS AND SOFTWARE  

	13.
	The
Employee agrees to take all necessary precautions to protect the computer systems and software of Hostopia and of the suppliers and clients of Hostopia, including without
limitation complying with the obligations set out in Hostopia's Computer and Network Protection Rules (collectively, the "Rules"). A copy of the Rules, as currently in effect, is attached as
Exhibit B to this Agreement. The Employee agrees that Hostopia may unilaterally amend the Rules, and upon their delivery to the Employee such new rules shall form part of this Agreement
and will be binding on the Employee. The Employee agrees that violation of any of such Rules may be grounds for discipline up to and including immediate dismissal for cause. 

12

 

NON-COMPETITION  

	14.
	The
Employee agrees that while the Employee is employed by Hostopia, and for 12 months following the termination of the Employee's employment with Hostopia, without the prior
written approval of an officer of Hostopia the Employee will not become engaged, directly or indirectly as an employee, consultant, partner, principal, agent, proprietor, shareholder (other than a
holding of shares listed on a stock exchange that does not exceed 2% of the outstanding shares so listed) or advisor, in a business in

	a)
	Canada;

	b)
	the
United States; or

	c)
	anywhere
else in the world where Hostopia marketed its products or services during the period of the Employee's employment with Hostopia; 

that 

	i.
	develops
or markets software competitive with the software owned or marketed by Hostopia, or

	ii.
	provides
consulting, maintenance, support or training services that are competitive with the consulting, maintenance, support or training services provided
by Hostopia. 

NON-SOLICITATION OF CLIENTS  

	15.
	The
Employee agrees that while the Employee is employed by Hostopia, and for 12 months immediately following the termination of the Employee's employment with Hostopia, the
Employee shall not, directly or indirectly, contact or solicit any customers of Hostopia (as defined below) with which the Employee had contact or for whom the Employee provided services for
the purpose of selling or supplying to these customers of Hostopia any products or services which are competitive with the products or services sold or supplied by Hostopia at the time of the
Employee's termination. The term "customers of Hostopia" in the preceding sentence means any business or organization that:

	a)
	was
a customer of Hostopia at the time of the termination of the Employee's employment with Hostopia; or

	b)
	became
a customer of Hostopia within 12 months after the termination of the Employee's employment with Hostopia if the Employee was involved with the marketing effort in respect
of such customer prior to the termination of the Employee's employment with Hostopia. 

NON-SOLICITATION OF EMPLOYEES  

	16.
	Employee
agrees that while the Employee is employed by Hostopia, and for 12 months after the termination of the Employee's employment with Hostopia, the Employee shall not
directly or indirectly hire any employees or consultants of Hostopia, nor shall the Employee solicit or induce or attempt to induce any persons who were employees or consultants of Hostopia, at the
time of such termination or during the 90 days immediately preceding such termination, to terminate his/her employment or consulting agreement with Hostopia. 

REASONABLENESS OF NON-COMPETITION AND NON-SOLICITATION OBLIGATIONS  

	17.
	The
Employee confirms that the obligations in Sections 14, 15 and 16 are fair and reasonable given that, among other reasons,

	a)
	the
sustained contact the Employee will have with the clients of Hostopia will expose the Employee to Confidential Information regarding the particular requirements of these clients
and Hostopia's unique methods of satisfying the needs of these clients, all of which the Employee agrees not to act upon to the detriment of Hostopia; and/or 

13

 

	b)
	the
Employee will be performing important development work on the software owned or marketed by Hostopia; and/or

	c)
	the
substantial training the Employee will receive from Hostopia. 

and
the Employee agrees that the obligations in Sections 13, 14 and 15, together with the Employee's other obligations under this Agreement, are reasonably necessary for the protection
of Hostopia's proprietary interests. The Employee further confirms that the geographic scope of the obligation in Section 13 is reasonable given the international nature of the market for the
products and services of Hostopia and that a more limited territorial restriction would not adequately protect the legitimate interests of Hostopia. The Employee also agrees that the obligations in
Sections 13, 14 and 15 are in addition to the non-disclosure and other obligations provided elsewhere in this Agreement. The Employee also acknowledges that the Employee's
obligations contained in this Agreement will not preclude the Employee from becoming gainfully directly employed in the software industry following a termination of the Employee's employment with
Hostopia given the Employee's general knowledge and experience in the computer industry. 

NO CONFLICTING OBLIGATIONS  

	18.
	The
Employee acknowledges and represents to Hostopia that the Employee's performance as an employee of Hostopia shall not breach any agreement or other obligation to keep confidential
the proprietary information of any prior Company or any other third party. The Employee further acknowledges and represents that the Employee is not bound by any agreement or obligation with any third
party which conflicts with any of the Employee's obligations under this Agreement.

	19.
	The
Employee represents and agrees that the Employee will not bring to Hostopia, and shall not use in the performance of the Employee's work with Hostopia, any trade secrets,
confidential information and other proprietary information of any prior Company or any other third party. The Employee represents and agrees that in the Employee's work creating Developments the
Employee will not knowingly infringe the intellectual property rights, including copyright, of any third party.

	20.
	The
Employee agrees that during the time that the Employee is employed by Hostopia the Employee shall devote the Employee's full time and attention to the affairs of Hostopia and the
Employee shall not be employed by, or perform services for, or otherwise be engaged in any business with, any other entity without the prior written consent of Hostopia. 

ENFORCEMENT  

	21.
	The
Employee acknowledges and agrees that damages may not be an adequate remedy to compensate Hostopia for any breach of the Employee's obligations contained in this Agreement, and
accordingly the Employee agrees that in addition to any and all other remedies available, Hostopia shall be entitled to obtain relief by way of a temporary or permanent injunction to enforce the
obligations contained in this Agreement. 

CHANGE OF EMPLOYMENT  

	22.
	The
Employee agrees that prior to commencing employment with any other company following termination of the Employee's employment by Hostopia, the Employee shall disclose to such
other company the terms of this Agreement. 

EFFECT OF TERMINATION  

	23.
	Any
reference to a termination of employment in this Schedule "B" to the Agreement shall include termination for any reason whatsoever and with or without cause. The
terms of this Schedule "B" to the Agreement shall be binding upon the Employee during the course of Employee's employment by Hostopia and shall survive the termination of the Employee's
employment by Hostopia, regardless of how the Employee's employment is terminated, whether for cause or otherwise. 

14

 
 
 

Exhibit A    
    

To:
Hostopia.com Inc.. ("Company") 

        The
following is a complete list of all works and inventions relative to the subject matter of my service as an employee of Hostopia that I created prior to my employment
by Hostopia: 

        [            ]
No works and inventions. 

        [            ]
See below: 

        [            ]
Additional sheets attached. 

15

 
 
 

Exhibit B
 
  COMPUTER AND NETWORK PROTECTION RULES    
    

        All employees who use Hostopia's computers ("Computers"), internet connection and local area network (collectively
the "Hostopia Networks") MUST comply with the following rules. Violation of any of these rules constitute grounds for
discipline up to and including immediate dismissal for cause. Violation of these rules may also subject the Employee to penalties or proceedings under civil and criminal law. 

	1.
	The
Employee may use the Computers and Hostopia Networks only for purposes directly related to the Employee's work with Hostopia. The Employee shall not store or use games or
entertainment software on the Computers, nor shall the Employee download from the Hostopia Networks onto the Computers any "freeware", "shareware" or any other software, nor shall the Employee input
any information or material into the Computers that is unrelated to the Employee's work with Hostopia.

	2.
	The
Employee agrees that he/she has read the Internet and Email Acceptable Use Policy and agrees to be bound by this policy as amended from time to time.

	3.
	Only
authorized copies of software may be used on the Computers and the Employee shall not operate on the Computers software which has been copied illegally. The Employee shall not use
the Computers to illegally copy software. The Employee shall respect the software license and network subscription agreements entered into by Hostopia.

	4.
	Copies
of software licensed to the Employee personally, and other software not licensed directly by Hostopia, may only be used on the Computers after approval for such use is obtained
from the Chief Financial Officer of Hostopia. If approved, such software may be used and stored only on the Computer assigned to the Employee who is the authorized user of such software.

	5.
	Appropriate
virus protection software must be installed on each Computer, and must be used whenever new software is uploaded onto a Computer.

	6.
	If
the Employee accesses the Internet from the Employee's computer using the Employee's private Internet service provider, the Employee shall not make any reference to Hostopia in the
course of such usage or to the fact that the Employee is associated with Hostopia.

	7.
	The
Employee shall not send sensitive information regarding Hostopia or its customers over the Internet, unless authorized to do so by a superior.

	8.
	While
using the Computers or the Hostopia Networks, the Employee shall not transmit software or other copyrighted materials over the internet to third parties, nor shall the Employee
download such materials, except with the prior approval of the Chief Technology Officer of Hostopia. The Employee shall not make or disseminate any defamatory, disparaging or other similar statements
on the Hostopia Networks.

	9.
	The
Employee shall be responsible for using the Computers and the Hostopia Networks in an effective, ethical and lawful manner. The Employee shall respect the rights and interests of
others, as well as privacy and confidentiality while using the Computers and the Hostopia Networks.

	10.
	The
Employee shall take all reasonable steps to protect the integrity and the security of the Computers and the Hostopia Networks, including the security of the software and data. The
Employee shall not access or disclose systems information or data, nor shall he/she destroy or remove software or data, without appropriate authorization. The Employee shall not disclose confidential
passwords, access codes, account numbers or other authorizations assigned to him/her. The Employee shall not misrepresent himself/herself as another user, nor shall the Employee change another
person's password without authorization.

	11.
	The
Employee acknowledges that the Computers and Hostopia Networks are the property of Hostopia, and that Hostopia may monitor the Employee's use of the Computers and Hostopia
Networks, including reviewing the e-mail messages sent and received by the Employee. The Employee agrees that he/she does not have an expectation of privacy in such messages.

	12.
	If
an Employee accidentally connects to a web site that contains sexually explicit or otherwise offensive material, he/she must disconnect from that web site immediately and report
the incident to his/her supervisor or the Human Resources Manager.

	13.
	For
greater certainty, the following types of activities are strictly prohibited:

	a)
	Viewing
or distributing obscene, pornographic, profane, or sexually oriented material;

	b)
	Violating
laws, rules and regulations prohibiting sexual harassment;

	c)
	Encouraging
the use of controlled substances for illegal purposes;

	d)
	Engaging
in any activities for personal gain;

	e)
	Obtaining
or distributing copyrighted information without permission;

	f)
	Obtaining
and distributing advertisements for commercial enterprises, including but not limited to, goods, services, or property; 

16

 

	g)
	Violating
or infringing upon the rights of others;

	h)
	Conducting
business unauthorized by Hostopia;

	i)
	Obtaining
or distributing incendiary statements, which might incite violence or describe or promote the use of a weapon;

	j)
	Obtaining
or exchanging proprietary information, trade secrets, or any other privileged, confidential, or sensitive information that is not authorized;

	k)
	Conducting
political activity;

	l)
	Using
the system for any illegal purpose; and

	m)
	Any
use of the Computers or Hostopia Networks that is not in accordance with the Internet and Email Acceptable Use Policy amended from time to time. 

17

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EMPLOYMENT AGREEMENT

Schedule "A"

Schedule "B" CONFIDENTIALITY, PROPRIETARY RIGHTS, NON-COMPETITION AND NON-SOLICITATION AGREEMENT

Exhibit A

Exhibit B COMPUTER AND NETWORK PROTECTION RULESQuickLinks
 -- Click here to rapidly navigate through this document

Exhibit 10.7  

 
 

EMPLOYMENT AGREEMENT    
    

        THIS AGREEMENT is made and entered into as of the 1st day of June, 2006 by and between Hostopia.com Inc. (the "Company") and
Dirk Bhagat (the "Employee"). 

        WHEREAS
the Company wishes to employ Employee and desires to enter into an agreement (the "Agreement") embodying the terms of such employment; 

        AND
WHEREAS Employee has accepted such employment on the basis of the terms and conditions set forth in this Agreement; 

        IN
CONSIDERATION of the recitals and mutual covenants contained herein and for other good and valuable consideration, the parties agree as follows: 

	1.
	Employment:

	(a)
	The
Company hereby employs Employee and Employee hereby accepts employment with the Company for the term of this Agreement set forth in Section 2 below, in a position and with
the duties and responsibilities set forth in Section 3 below, and upon all other terms and conditions in this Agreement set forth.

	(b)
	Employee
shall be headquartered in Mississauga, Ontario, provided that Employee shall render such services within and outside of Canada, as shall from time to time be necessary for
the performance of his duties hereunder.

	2.
	Term:

	(a)
	The
term of Employee's employment pursuant to this Agreement (the "term") shall begin on June 1, 2006 and shall continue for an indefinite period, subject to the
provisions of this Agreement providing for termination of Employee's employment in certain circumstances.

	3.
	Position,
Responsibilities:

	(a)
	It
is intended that at all times during the term of this Agreement, Employee shall serve as the Chief Technology Officer of the Company with responsibility for performing such duties
for the Company and its subsidiaries as Employee shall reasonably be directed to perform by the Company's President and board of directors.

	(b)
	Throughout
the term of this Agreement, Employee shall devote a substantial amount of his full business time and attention to the business and affairs of the Company, except for
vacations and except for illness or incapacity. In addition, nothing in this Agreement shall preclude Employee from devoting reasonable periods required for serving, as appropriate, on boards of
directors of other corporations, from engaging in charitable and public service activities, and from managing his personal investments, provided such activities do not materially interfere with the
performance of his duties and responsibilities under this Agreement. 

 

	4.
	Salary:    For
services rendered by Employee during the term of this Agreement, Employee shall be paid a base salary payable monthly, at an
annual rate of CAD$137,800 during the first year of the term, subject, during the second and the third years of the term and for subsequent years, if any, to annual review and increase at the sole
discretion of the board of directors of the Company, taking into account, among other things, individual performance and general business conditions.

	5.
	Additional
Compensation: Employee shall also receive additional compensation during the term of this Agreement as follows:

	(a)
	An
amount equal to 2.5% of annual base salary, payable quarterly, not to exceed 10% in any fiscal year, if the downtime for the Company's services, as set out in the Company's
standard services agreement, does not exceed .16% in each of the three months in a fiscal quarter as confirmed by the President or Chief Executive Officer; and

	(b)
	An
amount equal to 10% of annual base salary, not to exceed 10% in any fiscal year, payable annually no later than the March 31 date immediately following the Assessment
Date, if:

	(i)
	a
new service ("New Service") is made available to Company's customers or Company's customers' customers ("End-Users"),

	(ii)
	Employee
was responsible for overseeing the development and delivery of the New Service, and

	(iii)
	the
Adoption Rate (as defined below) for the New Service is no less than 2%.

	(A)
	"Adoption
Rate" means the percentage calculated as follows:

	(a)
	total
number of End-Users that use the New Service on the Assessment Date (as defined below) 

divided
by 

	(b)
	total
number of Hosted Websites (as defined below).

	(B)
	"Assessment
Date" means the date that is 12 months following the Launch Date (as defined below)

	(C)
	"Hosted
Websites" means the total number of websites, (excluding parked websites, domain forwards and email accounts), that are hosted on Company's computer servers, on the date that
is 1 day immediately preceding the Launch Date. 

2

 

	(D)
	"Launch
Date" means the date that the New Service is first made available to Company's customers for delivery or sale to End-Users.

	6.
	Business
Expenses:    Employee will be reimbursed for all reasonable expenses incurred by him in connection with the conduct of the Company's
business upon presentation of sufficient evidence of such expenditures provided such expenditures are deductible to the Company for tax purposes or are authorized expenditures pursuant to policies
adopted by the board of directors of the Company from time to time.

	7.
	Benefits
and Vacation:

	(a)
	Employee
will be entitled to participate in all employee benefit programs of the Company from time to time in effect under the terms and conditions of such programs, including, but
not limited to, pension and other retirement plans, group life insurance, hospitalization and surgical and major medical coverages, dental insurance, sick leave, including salary continuation
arrangements, long-term disability, and such other fringe benefits as are or may be available from time to time to employees of the Company.

	(b)
	The
Company may obtain a key-man life insurance policy covering Employee for the benefit of Employee or the Company in such amount as the Company considers appropriate,
and Employee hereby agrees to take all necessary actions to facilitate the issuance and maintenance of such insurance policy.

	(c)
	Employee
shall be entitled to all usual public holidays and, in addition, to three weeks paid vacation during each year of Employee's employment hereunder. Such vacation shall be
utilized by Employee at such time or times as do not materially interfere with the ongoing conduct of the Company's business and operations.

	8.
	Termination
of Employment:

	(a)
	Death.    In
the event of the death of Employee during the term of this Agreement, Employee's salary will be paid to Employee's designated
beneficiary, and in the absence of such designation, to the estate or other legal representative of Employee, through the end of the month in which death occurs. Rights and benefits of Employee under
employee benefit plans and programs of the Company, including life insurance, will be determined in accordance with the terms and conditions of such plans and programs.

	(b)
	Disability.    Employee's
employment shall terminate automatically upon written notice from the Company in the event of Employee's absence or
inability to render the services required hereunder due to disability, illness, incapacity or otherwise for an aggregate of 60 days during any one year period, in accordance with
Section 8(c) below. Prior to termination of Employment, in the event of any such absence or inability, Employee shall be entitled to receive the compensation provided for herein for the first
30 days thereof, whereafter Employee shall be entitled to receive compensation in accordance with the Company's long-term disability plan together with such compensation, if any, as
may be determined by the board of directors of the Company. 

3

 

	(c)
	Termination
by the Company Other Than for Cause.    In the event of termination by the Company of Employee employment hereunder other than for
cause, Employee shall be entitled to continued salary payments, payable monthly, for a period equal to the greater of i) 26 weeks, and ii) 2 weeks multiplied by the number
of years employed by the Company ("Severance Period"), following such termination (notwithstanding that the balance of the term of this Agreement may exceed the Severance Period) at the rate in effect
immediately prior to such termination. Any rights and benefits of Employee under employee benefit plans and programs of the Company will be determined in accordance with the terms of such plans and
programs, provided that all unvested options of Employee or similar awards shall immediately vest upon such termination.

	(d)
	Termination
by the Company for Cause.    In the event of a termination for cause, there will be no continued salary payments by the Company to
Employee and any rights and benefits of Employee under employee benefit plans and programs of the Company will be determined in accordance with the terms of such plans and programs. For purposes of
this Section 8(d) and of Employees employment with the Company, "cause" shall mean that:

	(i)
	Employee
has committed a felony or indictable offence or has improperly enriched himself at the expense of the Company or has committed an act evidencing dishonesty or
moral turpitude including without limitation an act of theft; or

	(ii)
	Employee,
in carrying out his duties hereunder, (i) has been wilfully and grossly negligent, or (ii) has committed wilful and gross misconduct or,
(iii) has failed to comply with an instruction or directive from the board of directors of the Company;

	(iii)
	Employee
has breached a material term of this Agreement;

	(iv)
	Employee
becomes bankrupt or in the event a receiving order (or any analogous order under any applicable law) is made against Employee or in the event Employee
makes any general disposition or assignment for the benefit of his creditors; or

	(v)
	Employee
commits any other act giving the Company cause to terminate Employee's employment, including, but not limited to, chronic alcoholism or drug addiction, material
malfeasance or nonfeasance with respect to Employee's duties hereunder. 

Prior
to any termination of Employee for cause due to any occurrence described in subparagraphs 8(d)(ii), (iii) and (v) above, the Company shall notify Employee in writing of the
particulars of the occurrence upon which termination would be based and shall in such notice advise Employee as to whether in the Company's sole discretion the default of Employee occasioned by such
occurrence is capable of being cured or rectified in full without loss or damage to the Company, in which case the Company shall afford Employee a reasonable period of not less than five business days
in which to cure or rectify such default. In such event and provided Employee cures or rectifies such default in full without loss or damage to the Company, Employee's employment shall not be
terminated on the basis of such occurrence. 

4

 

	(e)
	Termination
by the Employee.    In the event of termination by the Employee hereunder, Employee shall provide the Company with no less than
4 weeks written notice of termination ("Employee Notice Period"). Notwithstanding the foregoing, the Company shall be entitled to terminate this Agreement before the expiry of the Employee
Notice Period if the Company continues salary payments at the rate in effect immediately prior to such termination, for the number of weeks remaining in the Employee Notice Period. Any rights and
benefits of Employee under employee benefit plans and programs of the Company will be determined in accordance with the terms of such plans and programs.

	9.
	Non-Competition:    Employee
agrees that during the period of Employee's employment with the Company and for a period of
18 months from the last payment of compensation to Employee by the Company, Employee shall not engage in or participate in any business activity that competes, directly or indirectly, with the
businesses of the Company, or its subsidiaries or affiliates, provided that Employee shall not be precluded from competing with the business of the Company in the event of a termination of Employee's
employment as a result of a material breach by the Company of the provisions of this Agreement or in the event that Employee's employment is terminated by the Company other than for cause. 

For
purposes of this Section 9, Employee shall be deemed to "compete, directly or indirectly" with the businesses of the Company, or its subsidiaries or affiliates if Employee is or becomes
engaged, otherwise than at the request of the Company, as an officer, director or employee of, or is or becomes associated in a management or ownership, consultant or agent, capacity with, any
corporation, partnership or other enterprise or venture the business of which includes wholesale, private label web hosting and email services in Canada or the United States, or any other
business engaged in from time to time by the Company and is responsible for the performance of functions similar to those performed by Employee during the 12 month period immediately preceding
Employee's termination. 

Notwithstanding
anything to the contrary contained herein Employee may, without being deemed to compete, directly or indirectly, with the businesses of the Company or its subsidiaries or affiliates
own not more than 5% of any class of the outstanding securities of any such corporation listed on a national securities exchange or traded in the
over-the-counter market. 

5

 

It
is the desire and the intent of the parties that the provisions of this Section 9 shall be enforceable to the fullest extent permissible under the laws and public policies applied in each
jurisdiction in which enforcement is sought. Accordingly, if any particular portion of this Section 9 is adjudicated unenforceable in any jurisdiction, such adjudication shall apply only in
that particular jurisdiction in which such adjudication is made. 

The
parties recognize that the Company will have no adequate remedy at law for the breach by Employee of the covenants provided in this Section 9, and, in the event of such breach, the Company
and Employee hereby agree that the Company will be entitled to an injunction, a decree of specific performance, mandamus or other appropriate remedy to enforce such covenants. 

	10.
	Non-Solicitation:    Employee
agrees that for a period of 24 months following the last payment of salary to Employee,
Employee will not, whether as principal, agent, employee, employer, director, officer, shareholder or in any other individual or representative capacity, solicit or attempt to retain in any way
whatsoever any of the employees of the Company or its subsidiaries or affiliates.

	11.
	Confidential
Information:

	(a)
	Employee
agrees not to disclose either while in the Company's employ or at any time thereafter to any person not employed by the Company or not engaged to render services to the
Company, any trade secrets or confidential information of or relating to the Company or its subsidiaries and affiliates or its business obtained by Employee while in the employ of the Company;
provided, however, that this provision shall not preclude Employee from the use or disclosure of information known generally to the public (other than that which Employee may have disclosed in breach
of this Agreement) or of information not generally considered confidential or from disclosure required by law or court order in the proper conduct of the Company's business.

	(b)
	Employee
also agrees that upon leaving the Company's employ, Employee will not take, without the prior written consent of the board of directors of the Company, any document, whether
in paper or electronic form, of the Company or its subsidiaries, affiliates and divisions, which is of a confidential nature relating to the Company or its subsidiaries, affiliates
and divisions.

	(c)
	The
parties recognize that the Company will have no adequate remedy at law for breach by Employee of the covenants provided in this Section 11, and in the event of such breach,
the Company and Employee hereby agree that the Company shall be entitled to an injunction, a decree of specific performance, mandamus or other appropriate remedy to enforce such covenants.

	12.
	Ownership
of Trade Secrets:    All results of services performed by Employee hereunder including without limitation all ideas, copyrights, trade
secrets or otherwise, shall be owned by and be the sole and exclusive property of the Company. Employee hereby transfers and assigns all right, title and interest of every nature and kind whatsoever
therein to the Company and agrees to execute and deliver such further documents and instruments as may be necessary to fully and effectually give effect thereto. 

6

 
	13.
	Withholding:    Anything
to the contrary notwithstanding, all payments required to be made by the Company hereunder to Employee or his estate or
beneficiaries, shall be subject to the withholding of such amounts relating to taxes as the Company may reasonably determine, after consultation with Employee, it should withhold pursuant to any
applicable law or regulation. In lieu of withholding such amounts, in whole or in part, the Company may, in its sole discretion, accept other provisions for payment of taxes and withholdings as
required by law, provided the Company is satisfied that all requirements of law affecting the Company's responsibilities to withhold have been complied with.

	14.
	Notices:    Any
notices, requests, demands or other communications provided for by this Agreement shall be in writing and shall be sufficiently
given when and if sent by personal delivery, overnight courier or by facsimile to the party entitled thereto at the address stated below or at such other address as the addresses may have given by
similar notice: 

To
the Company: 

Hostopia.com Inc.

5915 Airport Road, 11th Floor

Mississauga, Ontario L4V 1T1 

Attention:
Secretary 

Fax
No.: 1 800 979-9587 

To
Employee: 

Dirk
Bhagat

323 Wolverleigh Blvd.

Toronto, ON

M4C 1S5 

Fax
No.: 416-4676-9562 

Any
such notice shall be deemed delivered if given by means of personal delivery on the day of delivery thereof or if given by means of overnight courier or facsimile transmission on the first
business day following the dispatch thereof. 

	15.
	Entire
Agreement:    This Agreement contains the entire agreement between the parties hereto with respect to matters herein and supersedes all
prior agreements and understandings, oral or written, between the parties hereto relating to such matters. 

7

 
	16.
	Assignment:    Except
as herein expressly provided, the respective rights and obligations of Employee and the Company under this Agreement shall
not be assignable by either party without the written consent of the other party and shall enure to the benefit of and be binding upon Employee and the Company and their permitted successors or
assigns, including, in the case of the Company, any other corporation or entity with which the Company may be merged or otherwise combined or which may acquire the Company or its assets in whole or in
substantial part, and, in the case of Employee, his estate or other legal representatives. Nothing herein expressed or implied is intended to confer on any person other than the parties hereto any
rights, remedies, obligations or liabilities under or by reason of this Agreement.

	17.
	Legal
Fees:    In the event of any dispute or legal proceeding arising out of or in connection with this Agreement, the party succeeding in such
action, whether by judicial decision or settlement, shall be reimbursed by the other party for all legal fees and expenses incurred by the successful party with respect to such dispute
or proceeding.

	18.
	Applicable
Law:    This Agreement shall be deemed a contract under, and for all purposes shall be governed by and construed in accordance with,
the laws of the Province of Ontario without regard to the conflict of laws rules thereof. The Company and Employee hereby each irrevocably consent and attorn to the jurisdiction of the courts of the
Province of Ontario with respect to any dispute or proceeding arising in connection with this Agreement.

	19.
	Amendment
or Modification; Waiver:    No provision of this Agreement may be amended or waived unless such amendment or waiver is authorized by
the Company (including any authorized officer or committee by the board of directors) and is in a writing signed by Employee and by a duly authorized officer of the Company. Except as otherwise
specifically provided in this Agreement, no waiver by either party hereto of any breach by the other party of any condition or provision of this Agreement to be performed by such other party shall be
deemed a waiver of a similar or dissimilar breach, condition or provision at the same time or at any prior or subsequent time.

	20.
	Resignation:    Employee
hereby agrees that, upon termination of his employment for any reason whatsoever, Employee shall thereupon be deemed,
upon the request of the Company, to have immediately resigned any position Employee may have as an officer and/or director of the Company together with any other office, position or directorship which
Employee may hold with any of the Company's subsidiaries or related entities in connection with or arising from the performance of Employee's duties of employment under this Agreement. In such event,
Employee shall, at the reasonable request of the Company, forthwith execute any and all documents appropriate to evidence such resignations which are consistent with the terms of
this Agreement.

	21.
	Damages:    In
the event that Employee is awarded any damages as compensation for any breach of this Agreement, a breach of any covenant
contained in this Agreement (whether express or implied by either law or fact), or any other cause of action based in whole or in part on a breach of any provision of this Agreement or related in any
way to Employee's employment hereunder, such damages shall be limited to contractual damages and shall exclude punitive damages and any other type of tort damages resulting from any such breach of any
such term, covenant or condition of the Agreement. 

8

 
	22.
	Provisions
Surviving Termination:    It is expressly agreed that notwithstanding termination of Employee's employment with and by the Company
for any reason or cause or in any circumstances whatsoever, such termination shall be without prejudice to the rights and obligations of Employee and the Company, respectively, in relation to or
arising up to the time of and including the date of termination, and the provisions of Sections 9, 10, 11, 12, 13, 17, 18, 19, 20, 21, 22, and 23, of this Agreement, all of which shall remain
and continue in full force and effect unless and until the board of directors of the Company at its absolute discretion resolves otherwise and so notifies Employee in writing.

	23.
	Indemnity:    The
Company hereby indemnifies Employee and agrees to hold Employee safe, harmless, defended and indemnified (to the
maximum extent permissible under applicable law, as now exists or as may be hereafter amended) against all claims and liabilities incurred by Employee relative to his lawful and authorized performance
of the services under this Agreement, except where such claims and liabilities arise because of Employee's intentional default or malfeasance, gross negligence, habitual neglect, unlawful conduct or
breach of the terms, covenants or conditions of this Agreement.

	24.
	Severability:    In
the event that any provision or portion of this Agreement shall be determined to be invalid or unenforceable for any reason,
the remaining provisions and portions of this Agreement shall be unaffected thereby and shall remain in full force and effect to the fullest extent permitted by law.

	25.
	Counterparts:    This
Agreement may be executed in counterparts, each of which shall be an original, but all of which together shall constitute
one and the same instrument.

	26.
	References:    In
the event of Employee's death or a judicial determination of his incompetency, reference in this Agreement to Employee shall
be deemed, where appropriate, to refer to his legal representatives, or, where appropriate, to refer to his beneficiary or beneficiaries.

	27.
	Captions:    Captions
to the Sections of this Agreement are solely for convenience and no provision of this Agreement is to be construed by
reference to the captions of that Section. 

9

 

IN
WITNESS WHEREOF this Agreement has been executed by a duly authorized officer of the Company and Employee as of the day and year first above written. 

	 	 	 	 	HOSTOPIA.COM INC.
	

 	
 	

 	
 	

By:	
 	

/s/  WILLIAM CAMPBELL      
	 	 	 	 	

	/s/  COLIN CAMPBELL      
 Witness

 	 	)

)

)

)

)	 	/s/  DIRK BHAGAT      
 Dirk Bhagat

 

10

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EMPLOYMENT AGREEMENT

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