Document:

exv10w17

 

Exhibit 10.17

July 12, 2007

John Parsons

7 Rosecliff Drive

Nashua, NH 03062

Dear John:

Please allow this letter to serve as the entire agreement between NitroSecurity, Inc. (the
“Company”) and you, John Parsons (the “Employee”), with respect to your employment with the
Company. The Company acknowledges and agrees that the Employee is and will remain a partner of,
and has and will retain an interest in, Tatum, LLC (“Tatum”), which will benefit the Company in
that the Employee will have access to certain Tatum resources.

Allocation

The Company and the Employee acknowledge and agree that a portion of the Employee’s compensation,
as provided below, will be allocated to Tatum as compensation for Tatum’s provision of resources to
the Employee as provided in the Full-Time Permanent Engagement Resources Agreement between the
Company and Tatum, dated on or about the date of this agreement (the “Resources Agreement”). To
the extent that terms of this agreement conflict with those of the Resources Agreement, the terms
of the Resources Agreement shall control. To the extent permitted by applicable law, the Company
and the Employee agree that any payments made to Tatum will reduce the Employee’s compensation for
purposes of determining taxable income and should not be reflected as compensation in the
Employee’s W-2 report.

Beginning Date

The Employee will be deemed to have become a full-time employee of the Company on July 1, 2007 (the
“Beginning Date”).

Compensation

Base Salary: $36,500 monthly (the “Salary”). Employee’s Salary may be increased, from
time-to-time, by the Company in its sole discretion.

After allocation of a portion of the Salary to Tatum in accordance with the Resources Agreement,
the Employee will be paid the following in accordance with the Company’s normal payroll procedures:
(i) $30,405 monthly, which is equal to approximately 83.3% of the Salary, during the first and
second 12 months of the term of this agreement, (ii) $32,595 monthly, which is equal to
approximately 89.3% of the Salary, during the third 12 months, and (iii) $35,500 monthly, which is
equal to the Salary less $1,000, during the fourth 12 months and each 12-month period thereafter.

Cash Bonuses: (i) $25,000 upon the initial filing by the Company of a Registration Statement on
Form SB-2 (the “Registration Statement”) with the Securities and Exchange Commission (the “SEC”),
and (ii) $25,000 when the SEC declares the Registration Statement effective. Any other Cash Bonus
shall be in the sole discretion of the Company.

After allocation of a portion of any Cash Bonus to Tatum in accordance with the Resources
Agreement, the Employee will be paid 85% of any Cash Bonus in accordance with the Company’s normal
procedures

 

 

for payment of such bonuses. For purposes hereof, “Cash Bonus” shall mean any continent
cash consideration (i.e., not yet realized in cash) that is paid in connection with the Employee’s
employment with the Company, including the Cash Bonuses contemplated by the preceding paragraph.

Equity: As soon as practicable following the execution of this agreement, the Company’s Board of
Directors shall grant the Employee an incentive stock option to purchase 337,735 shares of the
Company’s common stock, one-third of which shall be vested as of the date of grant, another
one-third of which shall vest on December 31, 2007 and the final one-third of which shall vest on
December 31, 2008, subject to continued employment with the Company; provided, however, that if the
Employee is terminated by the Company without Cause (as defined below) between October 1, 2008 and
December 31, 2008, the final one-third shall vest immediately prior to such termination. The
exercise price shall be equal to the fair market value on the date of grant, as determined by the
Company’s Board of Directors. All other terms shall be in accordance with the Company’s standard
form of incentive stock option agreement.

The Company acknowledges that the Employee will share with Tatum 15% of any cash proceeds realized
from any Equity that the Employee may be granted, provided that the Employee hereby expressly
agrees that it is the Employee’s sole duty to pay any proceeds realized from Equity to Tatum and
that that the Company shall have no such obligation to pay any such proceeds to Tatum. For
purposes hereof, “Equity” means any stock, option, warrant, or similar right (i.e., not yet
realized in cash) that is granted to the Employee in connection with services rendered by the
Employee hereunder, including the Equity contemplated by the preceding paragraph.

Benefits

The Employee will be eligible for any Company employment retirement and/or 401(k) plan, if any, and
for vacation and holidays consistent with the Company’s policy as it applies to senior management,
and the Employee will be exempt from any delay periods required for eligibility, to the extent
permitted under the applicable plans.

The Employee expressly waives all Company-provided health and medical benefits. In lieu thereof,
the Employee will remain on his current Tatum medical plan. The Company will reimburse the
Employee for amounts paid by the Employee for such medical insurance for him and (where applicable)
his family of up to $1,000 per month upon presentation of reasonable documentation of premiums paid
by the Employee to Tatum. To the extent permitted by applicable law, such amount will not be
considered reportable W-2 income, but instead non-taxable benefits expense.

The Company shall provide the Employee with written evidence that the Company maintains directors’
and officers’ insurance to cover the Employee at no additional cost to the Employee, and the
Company will maintain such insurance at all times while this agreement remains in effect. The
Company’s Board of Directors, in its sole discretion, may maintain insurance coverage with respect
to occurrences arising during the term of this agreement for a period following the termination of
this agreement or may purchase a directors’ and officers’ extended reporting period, or “tail,”
policy to cover the Employee.

The Employee shall be entitled to the indemnification contained in the Company’s Certificate of
Incorporation, as amended and/or restated from time to time. If the Company amends its Certificate
of Incorporation or By-laws to reduce the indemnification provided to its executive officers, the
Company agrees to indemnify the Employee (to the extent permitted by law) on terms equivalent to
the terms currently contained in the Company’s Certificate of Incorporation during the Employee’s
employment with the Company and for a period of six (6) years thereafter; provided, however, that such
indemnification shall not be required if the Employee has entered into an indemnification agreement
with

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the Company in a form that is generally offered to the other executive officers of the
Company, in which case, the indemnification provided by such agreement shall control.

The Employee shall enter into the Company’s standard form of confidentiality, assignment of
inventions, non-competition and non-solicitation agreement.

Termination

Either party may terminate this agreement (and thereby Employee’s employment with the Company) for
any reason and at any time upon written notice to the other party. This agreement will also
terminate immediately upon the death or permanent disability of the Employee. For purposes of this
agreement, disability will have the meaning contained in Section 22(e)(3) of the Internal Revenue
Code.

The Employee’s Salary will be prorated for the final pay period based on the number of days in the
final pay period up to the termination of employment.

Severance

In the event the Employee’s employment is terminated by the Company without Cause on or prior to
the six (6) month anniversary of the Beginning Date, the Company shall continue to pay to the
Employee his Salary as in effect on the date of termination until the date two (2) months after the
date of termination.

In the event the Employee’s employment is terminated by the Company without Cause after the six (6)
month anniversary of the Beginning Date, the Company shall pay to the Employee an aggregate of
$50,000 in equal installments over a three (3) month period in accordance with the Company’s normal
payroll schedule.

The payment to the Employee of the severance amounts described herein (i) shall be contingent upon
the execution by the Employee of a release in a form reasonably acceptable to the Company and (ii)
shall constitute the sole remedy of the Employee in the event of a termination of the Employee’s
employment.

For purposes of this agreement, “Cause” shall mean (a) a good faith finding by the Company that (i)
the Employee has failed to perform his assigned duties for the Company, or (ii) the Employee has
engaged in dishonesty, gross negligence or misconduct, or (b) the conviction of the Employee of, or
the entry of a pleading of guilty or nolo contendere by the Employee to, any crime involving moral
turpitude or any felony.

Miscellaneous

This agreement contains the entire agreement between the parties with respect to the matters
contained herein, superseding any prior oral or written statements or agreements.

The provisions in this agreement concerning severance and directors’ and officers’ insurance will
survive any termination of this agreement.

The terms of this agreement are severable and may not be amended except in a writing signed by the
parties. If any portion of this agreement is found to be unenforceable, the rest of this agreement
will be enforceable except to the extent that the severed provision deprives either party of a
substantial portion of its bargain.

This agreement will be governed by and construed in all respects in accordance with the laws of the
State of New Hampshire, without giving effect to conflicts-of-laws principles.

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Each person signing below is authorized to sign on behalf of the party indicated, and in each case
such signature is the only one necessary.

Please sign below and return a signed copy of this letter to indicate your agreement with its terms
and conditions.

Sincerely yours,

	 	 	 	 	 
	NITROSECURITY, INC.

	 	 
	 
	 	 	 	 
	By:  

	 	/s/ Kenneth R. Levine
 

Kenneth R. Levine

Chief Executive Officer
	 	 

	 	 	 	 	 
	 

	 	EMPLOYEE:	 	 
	 
	 	 	 	 
	 

	 	/s/ John Parsons
 

John Parsons
	 	 
	 
	 	 	 	 
	 

	 	Date: 7/12/07	 	 

4exv10w18

 

Exhibit 10.18

Tatum, LLC

Full-Time Permanent Engagement Resources Agreement

July 12, 2007

Kenneth R. Levine

Chief Executive Officer

NitroSecurity, Inc.

230 Commerce Way

Portsmouth, NH 03801

Dear Mr. Levine:

Tatum, LLC (“Tatum”) understands that NitroSecurity, Inc. (the “Company”) desires to hire John
Parsons, one of our partners, as an employee of the Company (the “Employee”). The Company
acknowledges that the Employee is and will remain a partner in our firm so that he will have access
to our firm’s resources for use in his employment with the Company. This Full-Time Permanent
Engagement Resources Agreement (this “Resources Agreement”) sets forth the rights of the Company,
through the Employee, to use such resources for the benefit of the Company and for the payment for
such services. Tatum acknowledges that the Company and the Employee have also entered into an
employment agreement, dated on or about the date of this Resources Agreement (the “Employment
Agreement”).

Since the Employee will be under the control and direct management of the Company, and not Tatum,
Tatum’s obligations to the Company are exclusively those set forth in this Resources Agreement.
This document will serve as the entire agreement between the Company and Tatum with respect to the
subject matter herein, and supersedes that certain Project Work Agreement, dated March 26, 2007,
between the Company and Tatum with respect to work to be performed by the Employee.

Compensation

The Company will pay to Tatum in lieu of the Employee, as compensation for the resources Tatum is
providing, a portion of the Employee’s Salary (as defined in the Employment Agreement) and any Cash
Bonus (as defined in the Employment Agreement) as follows:

Salary: (i) $6,095, which is equal to approximately 16.7% of the Salary, during the first and
second 12 months of the term of this Resources Agreement, (ii) $3,905, which is equal to
approximately 10.7% of the Salary, during the third 12 months, and (iii) $1,000 per month during
the fourth 12 months and each 12-month period thereafter.

Cash Bonus: 15% of any Cash Bonus paid to the Employee during the term of this Resources Agreement.

In addition, the Company acknowledges that the Employee will share with Tatum 15% of any cash
proceeds realized from any Equity (as defined in the Employment Agreement) that the Employee may be
granted, provided that Tatum expressly agrees that it is the Employee’s sole duty to pay any
proceeds realized from Equity to Tatum and that Tatum will not seek to recover any such proceeds
from the Company.

Salary, Cash Bonus and Equity are collectively referred to herein as the “Resource Fee.”
Payments to Tatum should be made by direct deposit through the Company’s payroll, or by an
automated clearing house payment, at the same time as payments are made to the Employee in
accordance with

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written instructions provided by Tatum. If such payment method is not available
and payments are made by check, Tatum will issue invoices to the Company, and the Company agrees to
pay such invoices no later than ten (10) days after receipt of invoices. To the extent permitted
by applicable law, the Company and Tatum agree that any payments made to Tatum will reduce the
Employee’s compensation for purposes of determining taxable income and should not be reflected as
compensation in the Employee’s W-2 report.

Deposit

Tatum acknowledges that it received a security deposit of $15,000 (the “Security Deposit”) from the
Company pursuant to the Project Work Agreement, dated March 26, 2007, between Tatum and the
Company. Tatum shall retain the Security Deposit to secure the Company’s future payment
obligations to Tatum under this Resources Agreement. If the Company breaches this Resources
Agreement and fails to cure such breach as provided herein, Tatum will be entitled to apply the
Security Deposit to its damages resulting from such breach. Upon termination of this Resources
Agreement, Tatum will return to the Company the balance of the Security Deposit remaining after
application of any amounts to unfulfilled payment obligations of the Company due Tatum as provided
for in this Resources Agreement.

Insurance

The Company shall provide Tatum with written evidence that the Company maintains directors’ and
officers’ insurance to cover the Employee at no additional cost to the Employee.

Termination

This Resources Agreement will terminate immediately upon the earlier of the effective date of (i)
the termination of the Employee’s employment with the Company or (ii) the Employee ceasing to be a
partner of Tatum.

In the event that either party commits a breach of this Resources Agreement and fails to cure the
same within fourteen (14) days following delivery by the non-breaching party of written notice
specifying the nature of the breach, the non-breaching party will have the right to terminate this
Resources Agreement immediately following the fourteen (14th) day following such written notice of
termination.

Hiring Tatum Partner Outside of Resources Agreement

During the twelve (12)-month period following termination of this Resources Agreement, other than
in connection with (i) the Employee’s employment/partnership with Tatum being terminated by Tatum
or (ii) another agreement between the Company and Tatum, the Company will not employ the Employee,
or engage the Employee as an independent contractor, to render services of substantially the same
nature as those for which Tatum is making the Employee available pursuant to this Resources
Agreement. The parties recognize and agree that a breach by the Company of this provision would
result in the loss to Tatum of the Employee’s valuable expertise and revenue potential and that
such injury will be impossible or very difficult to ascertain. Therefore, in the event this
provision is breached, Tatum will be entitled to receive as liquidated damages an amount equal to
forty-five percent (45%) of the Employee’s Annualized Compensation (as defined below), which amount
the parties agree is reasonably proportionate to the probable loss to Tatum and is not intended as
a penalty. If, however, a court or arbitrator, as applicable, determines that liquidated damages
are not appropriate for such breach, Tatum will have the right to seek actual damages up to
forty-five percent (45%) of the Employee’s Annualized Compensation. The amount will be due and
payable to Tatum upon written demand to the Company. For purposes hereof,
“Annualized Compensation” shall mean the Employee’s portion of the most recent Salary on an

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annualized basis and the maximum amount of any bonus for which the Employee was eligible with
respect to the then-current bonus year.

Disclaimers and Limitations of Liability

It is understood that Tatum does not have a contractual obligation to the Company other than to
make its resources available to the Employee (by virtue of that Employee being a partner in Tatum)
for the benefit of the Company under the terms and conditions of this Resources Agreement. The
Resource Fee will be for the resources provided and for introducing the Employee to the Company.
Tatum assumes no responsibility or liability under this Resources Agreement other than to render
the services called for hereunder and will not be responsible for any action taken by the Company
in following or declining to follow any of Tatum’s advice or recommendations.

Tatum represents to the Company that Tatum has conducted its standard screening and investigation
procedures with respect to the Employee becoming a partner in Tatum, and the results of the same
were satisfactory to Tatum. Tatum’s reports, projections, forecasts, or information or services
are for the sole benefit of the Company and not any unnamed third parties.

Tatum disclaims all warranties, either express or implied, related to the accuracy or reliability
of reports, projections, forecasts or other information prepared by third parties, and Tatum will
not be liable for any claims of reliance on such third party reports, projections, forecasts or
information. Tatum will not be liable for any non-compliance of such third party reports,
projections, forecasts or information or services with federal, state or local laws or regulations.

If, after the Employee ceases to be an employee of the Company, the Employee is subpoenaed or
otherwise required to appear as a witness or to provide evidence in connection with any action,
suit or other proceeding initiated by a third party in connection with the Company or by the
Company against a third party, then the Company shall reimburse Tatum for (i) reasonable, direct,
out-of-pocket expenses (including attorneys’ fees) actually incurred by Tatum in relation to such
action, suit or other proceeding and (ii) the time actually incurred by the Employee in relation to
such action, suit or other proceeding calculated as a per diem amount based on the Employee’s
Salary immediately prior to leaving the Company’s employment; provided, however, that (a) such
reimbursement shall not exceed an aggregate of $15,000, (b) only Tatum’s expenses (and not any
expenses independently incurred by the Employee) shall be reimbursed under clause (i) above if the
Employee is no longer a partner in Tatum when such expenses are incurred, (c) Tatum shall not be
reimbursed under clause (ii) above if the Employee is no longer a partner in Tatum when such time
is incurred and (d) such reimbursement shall only apply to the extent the Employee is not otherwise
entitled to indemnification by the Company.

The Company agrees that, with respect to any claims the Company may assert against Tatum in
connection with this Resources Agreement or the relationship arising hereunder, Tatum’s total
liability will not exceed the Resource Fees actually received by Tatum hereunder.

Tatum will not be liable in any event for incidental, consequential, punitive, or special damages,
including without limitation, any interruption of business or loss of business, profit, or
goodwill.

Arbitration

If the parties are unable to resolve any dispute arising out of or in connection with this
Resources Agreement, either party may refer the dispute to arbitration by a single arbitrator
selected by the parties according to the rules of the American Arbitration Association (“AAA”), and
the decision of the arbitrator will be final and binding on both parties. Such arbitration will be
conducted by the Wilmington, Delaware office of the AAA. In the event that the parties fail to
agree on the selection of the arbitrator
within thirty (30) days after either party’s request for arbitration under this paragraph, the
arbitrator will

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be chosen by AAA. The arbitrator will render his decision within ninety (90) days
after the call for arbitration. The arbitrator will have no authority to award punitive damages.
Judgment on the award of the arbitrator may be entered in and enforced by any court of competent
jurisdiction. The arbitrator will have no authority to award damages in excess or in contravention
of this Resources Agreement and may not amend or disregard any provision herein. Notwithstanding
the foregoing, no issue related to the ownership of intellectual property will be subject to
arbitration but will instead be subject to determination by a court of competent jurisdiction, and
either party may seek injunctive relief in any court of competent jurisdiction.

Miscellaneous

Tatum will be entitled to receive all reasonable costs and expenses incidental to the collection of
overdue amounts under this Resources Agreement, including but not limited to attorneys’ fees
actually incurred.

The Company agrees to allow Tatum to use the Company’s logo and name on Tatum’s website and other
marketing materials for the sole purpose of identifying the Company as a client of Tatum.
Notwithstanding the foregoing, Tatum will not use the Company’s logo or name in any press release
or general circulation advertisement without the Company’s prior written consent.

Neither the Company nor Tatum will be deemed to have waived any rights or remedies accruing under
this Resources Agreement unless such waiver is in writing and signed by the party electing to waive
the right or remedy. This Resources Agreement binds and benefits the successors of Tatum and the
Company.

Neither party will be liable for any delay or failure to perform under this Resources Agreement
(other than with respect to payment obligations) to the extent such delay or failure is a result of
an act of God, war, earthquake, civil disobedience, court order, labor dispute, or other cause
beyond such party’s reasonable control.

The terms of this Resources Agreement are severable and may not be amended except in a writing
signed by Tatum and the Company. If any portion of this Resources Agreement is found to be
unenforceable, the rest of the Resources Agreement will be enforceable except to the extent that
the severed provision deprives either party of a substantial portion of its bargain.

The provisions in this Resources Agreement concerning reimbursement of costs and expenses,
limitation of liability, and arbitration will survive any termination of this Resources Agreement.

This Resources Agreement will be governed by and construed in all respects in accordance with the
laws of the State of Delaware, without giving effect to conflicts-of-laws principles.

Nothing in this Resources Agreement shall confer any rights upon any person or entity other than
the parties hereto and their respective successors and permitted assigns and the Employee.

Each person signing below is authorized to sign on behalf of the party indicated, and in each case
such signature is the only one necessary.

Please sign below and return a signed copy of this letter to indicate the Company’s agreement with
its terms and conditions.

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We look forward to serving you.

Sincerely yours,

	 	 	 	 	 
	 	TATUM, LLC

 	 
	 	By:  	/s/ Janice DiPietro
 	 
	 	 	Janice DiPietro

Area Managing Partner for TATUM, LLC 	 
	 

	 	 	 	 	 
	 	

NITROSECURITY, INC.

 	 
	 	By:  	/s/ Kenneth R. Levine
 	 
	 	 	Kenneth R. Levine

Chief Executive Officer 	 
	 	
Date: 7/12/07 

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