Document:

Exhibit 10.19

 

GMS INC.

 

ANNUAL INCENTIVE PLAN

 

1.              Purpose

 

The purpose of this GMS Inc. Annual Incentive Plan is to promote the interests of the Company and its shareholders by motivating superior performance by executive officers and other key personnel with annual bonus opportunities based upon corporate and individual performance.

 

2.              Definitions

 

(a)         “Award” means an award granted to a Participant under the Plan subject to such terms and conditions as the Plan Administrator may establish under the terms of the Plan.

 

(b)         “Board” means the Board of Directors of the Company.

 

(c)          “Company” means GMS Inc. and its subsidiaries.

 

(d)         “Participant” means an employee of the Company who has been granted an Award under the Plan.

 

(e)          “Performance Criteria” shall have the meaning set forth in Section 5(b) hereof.

 

(f)           “Performance Goals” shall have the meaning set forth in Section 5(c) hereof.

 

(g)          “Plan” means this GMS Inc. Annual Incentive Plan, as it may be amended and restated from time to time.

 

(h)         “Plan Administrator” means the Compensation Committee of the Board, or such other committee of the Board that the Board shall designate from time to time to administer the Plan.

 

(i)             “Plan Year” means each fiscal year in which the Plan shall be in effect.

 

3.              Plan Administration

 

(a)         General. The Plan shall be administered by the Plan Administrator. The Plan Administrator shall have such powers and authority as may be necessary or appropriate for the Plan Administrator to carry out its functions as described in the Plan. No member of the Plan Administrator shall be liable for any action or determination made in good faith by the Plan Administrator with respect to the Plan or any Award hereunder. The Plan Administrator may delegate, to any appropriate officer or employee of the Company, responsibility for performing certain ministerial functions under this Plan.

 

(b)         Discretionary Authority. Subject to the express limitations of the Plan, the Plan Administrator shall have authority in its discretion to determine the time or times at which Awards may be granted, the recipients of Awards, the Performance Criteria, the Performance Goals and all other terms of an Award. The Plan Administrator shall also have discretionary authority to interpret the Plan, to make all factual determinations under the Plan, and to make all other determinations necessary or advisable for the administration of the Plan. The Plan Administrator may prescribe, amend, and rescind rules and regulations relating to the Plan. All interpretations, determinations, and actions by the Plan Administrator shall be final, conclusive, and binding upon all parties.

 

 

4.              Eligibility and Participation

 

Employees of the Company who hold a position as an executive officer of the Company shall be eligible to participate in the Plan for a Plan Year on such basis and on such terms and conditions as determined by the Plan Administrator. In addition, any other employees of the Company designated by the Plan Administrator to receive an Award for a Plan Year shall become a Participant in the Plan with respect to such Plan Year.

 

5.              Awards

 

(a)         Amount of Awards. The Plan Administrator will determine in its discretion the amount of an Award, the Performance Criteria, the applicable Performance Goals relating to the Performance Criteria, and the amount and terms of payment to be made upon achievement of the Performance Goals for each Plan Year.

 

(b)         Performance Criteria. For purposes of Awards granted under the Plan, the “Performance Criteria” for a given Plan Year shall be one or any combination of the following, for the Company or any identified subsidiary or business unit, as may be selected by the Plan Administrator in its sole discretion at the time of an Award: (i) net earnings; (ii) earnings per share; (iii) net debt; (iv) revenue or sales growth; (v) net or operating income; (vi) net operating profit; (vii) return measures (including, but not limited to, return on assets, capital, equity or sales); (viii) cash flow (including, but not limited to, operating cash flow, distributable cash flow and free cash flow); (ix) earnings before or after taxes, interest, depreciation, amortization and/or rent; (x) share price (including, but not limited to growth measures and total stockholder return); (xi) expense control or loss management; (xii) customer satisfaction; (xiii) market share; (xiv) economic value added; (xv) working capital; (xvi) the formation of joint ventures or the completion of other corporate transactions; (xvii) gross or net profit margins; (xviii) revenue mix; (xix) operating efficiency; (xx) product diversification; (xxi) market penetration; (xxii) measurable achievement in quality, operation or compliance initiatives; (xxiii) quarterly dividends or distributions; (xxiv) employee retention or turnover; (xxv) any combination of or a specified increase in any of the foregoing, or such other Performance Criteria determined to be appropriate by the Plan Administrator in its sole discretion.

 

(c)          Performance Goals. For purposes of Awards granted under the Plan, the “Performance Goals” for a given Plan Year shall be the levels of achievement relating to the Performance Criteria as may be selected by the Plan Administrator for the Award. The Plan Administrator may establish such Performance Goals relative to the applicable Performance Criteria as it determines in its sole discretion at the time of an Award. The Performance Goals may be applied on an absolute basis or relative to an identified index or peer group, as specified by the Plan Administrator. The Performance Goals may be applied by the Plan Administrator after excluding charges for restructurings, discontinued operations, extraordinary items and other unusual or non-recurring items, and the cumulative effects of accounting changes, and without regard to realized capital gains.

 

(d)         Payment of Awards. The payment of awards under the Plan shall be made at such time or times as determined by the Plan Administrator in its sole discretion and generally shall be made within two and one half months following the end of the applicable Plan Year.

 

(e)          Form of Payment. Awards under the Plan shall generally be made in cash. The Plan Administrator may, in its discretion, provide that a Participant receive all or a portion of an Award in stock units or other equity-based compensation to be granted under one or more equity incentive compensation plans sponsored or maintained by the Company from time to time.

 

 

(f)           Tax Withholding. Any payment under this Plan shall be subject to applicable income and employment taxes and any other amounts that the Company is required by law to deduct and withhold from such payment.

 

6.              Termination of Employment

 

(a)         General Rule. Subject to the provisions of Section 6(b) hereof, the obligation of the Company to satisfy payment of an Award to a Participant hereunder is conditioned upon the continued employment of the Participant with the Company at the time determined by the Plan Administrator for payment of an Award. If the employment of a Participant with the Company is terminated for any reason, at any time prior to the time determined by the Plan Administrator for payment of an Award hereunder, the Award shall be forfeited and automatically be cancelled without further action of the Company, unless otherwise provided by the Plan Administrator.

 

(b)         Exceptions. The Plan Administrator may, in its discretion, provide for the payment of an Award in the event a Participant’s employment with the Company is terminated for any reason including, but not limited to, a termination by the Company without cause or as a result of the Participant’s death or disability. Such payment may be made on a pro-rated or accelerated basis as determined by the Plan Administrator in its sole discretion.

 

7.              General Provisions

 

(a)         Effective Date. The Plan shall be effective with respect to Plan Years beginning on or after May 1, 2016.

 

(b)         Amendment and Termination. The Company may, from time to time, by action of the Board, amend, suspend or terminate any or all of the provisions of the Plan with respect to the then current Plan Year and any future Plan Year, without the requirement of obtaining the consent of the affected Participants.

 

(c)          No Right to Employment. Nothing in the Plan shall be deemed to give any Participant the right to remain employed by the Company or to limit, in any way, the right of the Company to terminate, or to change the terms of, a Participant’s employment at any time.

 

(d)         Governing Law. The Plan shall be governed by and construed in accordance with the laws of Delaware, without regard to the choice-of-law rules thereof.

 

(e)          Section 409A. The Company intends that that payments and benefits under this Plan will either comply with or be exempt from Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) and the regulations and guidance promulgated thereunder (collectively “Section 409A”) and, accordingly, to the maximum extent permitted, this Plan shall be interpreted to be exempt from Section 409A or in compliance therewith, as applicable. Nothing contained herein shall constitute any representation or warranty by the Company regarding compliance with Section 409A. The Company shall have no obligation to take any action to prevent the assessment of any additional income tax, interest or penalties under Section 409A on any person and the Company, its subsidiaries and affiliates, and each of their respective employees or representatives, shall have no liability to any person with respect thereto. A termination of employment shall not be deemed to have occurred for purposes of any provision of the Plan providing for the payment of any amounts or benefits that are considered nonqualified deferred compensation under Section 409A upon or following a termination of employment, unless such termination is also a “separation from service” within the meaning of Section 409A and the payment thereof prior to a “separation from service” would violate Section 409A. For purposes of any such

 

 

provision of the Plan or relating to any such payments or benefits, references to a “termination,” “termination of employment,” or like terms shall mean “separation from service.” If an amount is paid in two or more installments, for purposes of Section 409A, each installment shall be treated as a separate payment. Notwithstanding any contrary provision in the Plan, any payment(s) of nonqualified deferred compensation (within the meaning of Section 409A) that are otherwise required to be made under the Plan to a “specified employee” (as defined under Section 409A) as a result of his or her separation from service (other than a payment that is not subject to Section 409A) shall be delayed for the first six months following such separation from service (or, if earlier, until the date of death of the specified employee) and shall instead be paid on the day that immediately follows the end of such six-month period.

 

(f)           Section 162(m) Transition Relief. This Plan, having been adopted prior to the Company’s securities having become publicly held in connection with an initial public offering, is intended to satisfy the requirements for the transition relief under Treasury Regulation §1.162-27(f)(1) such that the deduction limit set forth in Treasury Regulation §1.162-27(b) does not apply to any remuneration paid pursuant to this Plan until the first meeting of the shareholders of the Company at which directors of the Company are to be elected that occurs after the close of the third calendar year following the calendar year in which the initial public offering of the Company’s securities occurs.EXHIBIT 10.3

EMPLOYMENT AGREEMENT

 This EMPLOYMENT AGREEMENT (this
"Agreement") is made as of the October
1, 2015, by and
between Indaba Group, Inc., a Delaware corporation (the "Company", which is a
wholly owned subsidiary of CloudCommerce, Inc., (formerly Warp 9, Inc.) a
Nevada corporation ("CloudCommerce"), and Ryan Shields, an individual
("Employee"), and is made with respect to the following facts:

R E C I T A L S

A.        The Company and the
Employee wish to ensure that the Company will receive the benefit of Employee's
loyalty and service during Employee's tenure and that the Employee will be
appropriately treated and compensated for services rendered.  

B.        The parties have
entered into this Agreement for the purpose of setting forth the terms of
employment of the Employee by the Company.

NOW, THEREFORE, in consideration of the
premises and mutual covenants herein contained, THE PARTIES HERETO AGREE AS
FOLLOWS:

1.                 
Employment
of Employee and Duties. 
The Company
hereby hires Employee and Employee hereby accepts employment upon the terms and
conditions described in this Agreement.  The Employee shall be the Chief Executive
Officer of the Company, with the responsibility for the day-to-day management
of the Company's operations.  Subject to (a) the general supervision of the
board of directors of the Company (the "Board of Directors"), and (b) the
Employee's duty to report to the Board of Directors periodically, as specified
by them from time-to-time, Employee shall have all of the authority to perform
his employment duties for the Company.

2.                 
Time
and Effort. 
Employee agrees to devote his full working time and attention to the management
of the Company's business affairs, the implementation of its strategic plan, as
determined by the Board of Directors, and the fulfillment of his duties and
responsibilities as Chief Executive Officer.  Expenditure of a reasonable amount
of time for personal matters and business and charitable activities shall not
be deemed to be a breach of this Agreement, provided that those activities do
not materially interfere with the services required to be rendered to the
Company under this Agreement.

3.                 
The
Company's Authority. 
Employee agrees
to comply with the Company's reasonable rules and regulations as adopted by the
Company's Board of Directors regarding performance of his duties, and to carry
out and perform those orders, directions and policies established by the
Company with respect to his engagement.  Employee shall promptly notify the
Company's Board of Directors of any objection he has to the Board's directives
and the reasons for such objection.

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4.                 
Noncompetition
by Employee. 
Employee is subject to noncompetition obligations pursuant to Section 3.1 of
that certain Agreement and Plan of Merger, dated as of June 26, 2015, by and
among Indaba Group, LLC, a Colorado limited liability company, Employee, Blake
Gindi, Jack Gindi, CloudCommerce, and Warp 9, Inc., a Delaware corporation (the
"Merger Agreement").  Upon the expiration of the term of those obligations, and
if Employee is then employed by the Company, then thereafter and throughout the
remaining term of this Agreement, Employee shall not, directly or indirectly,
either as an employee, employer,  consultant, agent, principal, partner,
stockholder (in a private company), corporate officer, director, or in any
other individual or representative capacity, engage or participate in any
business that is in direct competition with the business of the Company or its
affiliates.  Furthermore, any commissions, referral fees or other compensation
paid to Employee by other payors during the term of this Agreement will be the
property of the Company, and therefore, all such compensation will promptly be
remitted by Employee to the Company.

5.                 
Term of
Agreement. 
Subject to earlier termination as provided herein, the term of this Agreement
shall be for two (2) years.  Notwithstanding the foregoing, the Company and Employee agree
that Employee's employment hereunder may be terminated by the Employee
resigning with "Good Reason" or by the Company's declaration of termination
with "Cause" at any time, subject to the terms of this Section 5 and Section
6.  Such termination shall be effective upon delivery of written notice
from the acting party to the other of its election to terminate employment
pursuant to this Section 5.  "Cause" when used in connection with the
termination of employment with the Company, shall mean the termination of the
Employee's employment by the Company by reason of (i) Employee's material
breach of any of this Agreement which breach, if curable, is not cured within
thirty (30) days of written notice to Employee of such breach; (ii) the
conviction of, or the entering of a guilty plea or no contest plea by, the
Employee for a crime involving moral turpitude by a court of competent
jurisdiction; (iii) the commission by the Employee of an act of fraud upon the
Company or any of its affiliates; (iv) the misappropriation of any funds or
property of the Company or any of its affiliates by the Employee; (v) the
failure by the Employee to perform material duties reasonably assigned to him
or otherwise assigned to and accepted by Employee, or to comply with any
written Company policy after reasonable written notice and opportunity to cure
such performance; (vi) the engagement by the Employee in any direct, material
conflict of interest with the Company without compliance with the Company's
conflict of interest policy, if any, then in effect;  or (vii) the engagement
in any activity which would constitute a material violation of the provisions
of the Company's insider trading policy, if any, then in effect.  Cause shall
not be present unless (1) the Company shall have given Employee written notice
specifying in reasonable detail the event or circumstances constituting Cause,
and (2) Employee fails to cure such event or circumstances within forty-five
(45) days from the date of such notice from the Company. "Good Reason" when
used in connection with the resignation of employment from the Company by
Employee, shall mean the resignation from the Company by Employee by reason of:
(i) any deliberate breach by the Company with any of the material provisions of
this Agreement, other than an isolated, insubstantial or inadvertent failure
which is remedied by Company promptly after Company's receipt of written notice
thereof from Employee; (ii) a material diminution in Executive's authorities,
duties or responsibilities normally associated with Employee's position or 
Employee is assigned duties and responsibilities that are inconsistent, in a
material respect, with the scope of duties and responsibilities associated with
Employee's status as a senior executive officer; (iii) the Company's failure to
nominate the Employee for election to the Board of Directors and to use its best
efforts to have him elected and re-elected, as applicable or (iii) a material
breach by the Company of the Company's Articles of 

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Incorporation or
By-laws if such breach would materially prejudice Employee.  Good Reason
shall not be present unless (1) Employee shall have given the Company written
notice specifying in reasonable detail the event or circumstances constituting
Good Reason, and (2) the Company fails to cure such event or circumstances
within forty-five (45) days from the date of such notice from Employee.  

6.                 
Severance
Benefits.  

6.1  Continuation
of Salary and Benefits.  In the event that the Employee's employment is
terminated by the Employee for Good Reason prior to the end of the initial
term, the Company shall, subject to the terms of Sections 6.2 and 6.3 below,
and only if and as long as Employee is not in breach of his obligations under
this Agreement, pay compensation to Employee in the manner set forth below. If
the Employee's employment is terminated by the Employee for Good Reason during
the term of this Agreement, then the Company shall continue to pay to Employee
his current base salary provided for under this Agreement in periodic payments
in accordance with its customary payroll practices for a period of until the second
(2nd) anniversary date of this Agreement (the "Severance Payment
Period"). If the Employee's employment is terminated by the Employee for Good
Reason, the Company shall also continue to provide benefits in the kind and
amounts provided to its employees generally throughout the Severance Payment
Period, including continuation of any Company-paid benefits provided pursuant
hereto, for the Employee and, if applicable, the Employee's spouse and minor
children, provided such benefits will be subject to immediate termination to
the extent Employee receives benefits under another similar benefit plan. 
Employee agrees that the above payments shall be a full settlement of the
Company's obligations to Employee hereunder in the event of a termination for
Good Reason.

                        6.2       Disability;
Death.       If at any time during the term of this Agreement, Employee
is unable, due to physical or mental disability, to perform effectively his
duties hereunder, the Company shall continue payment of compensation as
provided in Section 9.1 during the first six (6) months of such
disability to the extent not covered by the Company's disability insurance
policies.  Upon the expiration of such six-month period, the Company, at its
sole option, may continue payment of Employee's salary for such additional
periods as the Company elects, or may terminate this Agreement without any
further obligations hereunder.  If Employee should die during the term of this
Agreement, Employee's employment and the Company's obligations hereunder shall
terminate as of the end of the month in which Employee's death occurs and there
will be no salary and benefit continuation period.  Employee shall be deemed to
have incurred a disability if Employee suffers a physical or mental condition
which (i) satisfies the definition of "total disability" in the Company's
disability insurance policies, or (ii) if no such policy or plan is then
covering Employee, in the reasonable judgment of the Board of Directors,
prevents Employee from engaging in any substantial gainful employment with the
Company for a period of more than six (6) months.

6.3       Standstill
Agreement; Lock-up Letters.      So long as Employee is employed by the
Company or receives severance compensation as provided in Section 6.1 above,
Employee agrees that he will sign any reasonable securities lock-up letters,
standstill agreements, or other similar documentation required by an
underwriter in connection with a public offering of securities by the Company
or its parent corporation or take other actions reasonably related thereto as
requested by the Board of Directors under similar terms and conditions as for
other management employees of the Company generally.  Failure to take  

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any such
action shall be a "Cause" for termination and shall cause Employee to forfeit
any further rights to compensation or other payments hereunder.  In addition,
Employee agrees that in such event the Company can seek and obtain specific
performance of such covenant, including any injunction requiring execution
thereof, and the Employee hereby appoints the then current president of the
Company to sign any such documents on his behalf so long as such documents are
prepared on the same basis as for other management shareholders generally.

6.4       Relocation
or Material Changes in Duties.  If Employee's employment is terminated
because of Employee' refusal to relocate to another office of the Company that
is more than twenty (20) statute miles from the Employee's then current office,
or to accept a material change in duties, such termination shall be deemed a
termination with Cause.  

7.                 
Confidential
Information: Nondisclosure Covenant.

7.1.      Confidential
Information.  As used herein the term "Confidential Information" shall
mean all customer and contract lists, records, financial data, trade secrets,
business and marketing plans and studies, suppliers, investors, financing
sources, manuals for employee and personnel policies, manufacturing and/or
production manuals, computer programs and software, strategic plans, formulas,
manufacturing and production processes and techniques (including without
limitation types of machinery and equipment used together with improvements and
modifications thereon), tools, applications for patents, designs, models,
patterns, drawings, tracings, sketches, blueprints, and all other similar
information developed and/or used by Company in the course of its business and
which is not known by or readily available to the general public.

7.2       Nondisclosure
Covenant.  Employee acknowledges that, in the course of performing
services for and on behalf of Company, Employee has had and will continue to
have access to Confidential Information.  Employee hereby covenants and agrees
to maintain in strictest confidence all Confidential Information in trust for
Company, its successors and assigns, and to disclose such information only on a
"need-to-know" basis in furtherance and for the benefit of the Company's
business.  During the period of Employee's employment with Company and at any
and all times following Employee's termination of employment for any reason,
including without limitation Employee's voluntary resignation with or without
Good Reason or involuntary termination with Cause, Employee agrees to not
misappropriate, utilize for any purpose other than for the direct benefit of
the Company, or disclose or make available to anyone outside Company's
organization, any Confidential Information or anything relating thereof without
the prior written consent of Company, which consent may be withheld by Company
for any reason or no reason at all.

7.3       Return of
Property.  Upon Employee's termination of his employment with
Company for any reason, including without limitation Employee's voluntary
resignation with or without Good Reason or involuntary termination by the
Company with Cause, Employee hereby agrees to immediately return to Company's
possession all copies of any writings, computer discs or equipment, drawings or
any other information relating to Confidential Information which are in
Employee's possession or control.  Employee further agrees that, upon the
request of Company at any time during Employee's period of employment 

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with Company, Employee shall
promptly return to Company all such copies of writings, computer discs or
equipment, drawings or any other information relating to Confidential
Information which are in Employee's possession or control.

7.4       Rights to
Inventions and Trade Secrets.  Employee hereby assigns to Company all
right, title and interest in and to any ideas, inventions, original works or
authorship, developments, improvements or trade secrets which Employee solely
or jointly has conceived or reduced to practice, or will conceive or reduce to
practice, or cause to be conceived or reduced to practice during his employment
with Company.  All original works of authorship which are made by Employee
(solely or jointly with others) within the scope of Employee's services
hereunder and which are protectable by copyright are "works made for hire," as
that term is defined in the United States Copyright Act.

8.                 
Noninterference
and Nonsolicitation Covenants. 
In further reflection of the Company's important interests in its proprietary
information and its trade, customer, vendor and employee relationships,
Employee agrees that, during the thirty-six (36) month period following the
termination of Employee's employment with Company for any reason, including
without limitation Employee's voluntary resignation with or without Good Reason
or involuntary termination by the Company with Cause, Employee will not
directly or indirectly, for or on behalf of any person, firm, corporation or
other entity, (a) interfere with any contractual or other business
relationships that Company has with any of its customers, clients, service
providers or materials suppliers as of the date of Employee's termination of
employment, or (b) solicit or induce any employee of Company to terminate
his/her employment relationship with Company.  

9.                 
Compensation.  During the term of this
Agreement, the Company shall pay the following compensation to Employee:

9.1       Base Salary. 
The Company shall pay Employee an annual rate of base salary of One Hundred Seventy Five Thousand
Dollars ($175,000.00) in periodic installments in
accordance with the Company's customary payroll practices, but no less
frequently than monthly.  Employee's base salary shall be reviewed at least
annually by the Board of Directors and the Board of Directors may, but shall
not be required to, increase the base salary during the term.  Employee's
annual base salary, as in effect from time to time, is hereinafter referred to
as "Base Salary."

9.2       Annual Bonus. 
Any compensation bonuses to be paid to Employee will be mutually determined by
the Company and CloudCommerce.

9.3       Equity Awards. 
During the term, Employee shall be eligible to participate in any Company
incentive compensation plan, as determined by the Board of Directions, in its
discretion.

9.4       Benefits.  So long as Employee is employed
by the Company, the Employee shall participate in any employee benefit plans
sponsored by the Company generally for its employees serving in similar
employment capacities as the Employee as determined from time to time by the
Board of Directors or any compensation committee of the Board of Directors, if
any, and on terms at least as favorable to Employee as are generally offered to
other employees of the Company serving in a similar capacity.  

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10.             
Office
and Staff. 
In order to enable Employee to perform his obligations and duties pursuant to
this Agreement, the Company agrees that it shall provide suitable office space
for Employee in Denver, Colorado, or in another location mutually agreed upon,
together with all necessary and appropriate supporting staff and secretarial
assistance, equipment, stationery, books and supplies.  Employee agrees that
the office space and supporting staff presently in place is suitable for the
purposes of this Agreement. The Company agrees to provide at its expense
parking for one (1) vehicle by the Employee at the Company's executive offices. 

11.             
Reimbursement
of Expenses. 
The Company shall reimburse Employee for the reasonable (and pre-approved by
the Company in writing) travel and other expenses incurred by Employee in
connection with the performance of Employee's duties under this Agreement. 
Employee's pre-approved reimbursable expenses shall be paid by the Company in
cash or check within a reasonable time after presentment by Employee of an
itemized list of invoices sufficiently describing such expenses.  All
compensation provided in Sections 8 of this Agreement shall be subject to
customary withholding tax and other employment taxes, to the extent required by
law.  Expense reimbursements will not be subject to withholding.  

12.             
Rights
In And To Inventions And Patents.

            12.1     Description
of Parties' Rights.  The Employee agrees that with respect to any
inventions made by him or the Company during the term of this Agreement, solely
or jointly with others, (i) which are made with the Company's equipment,
supplies, facilities, trade secrets or time, or (ii) which relate to the
business of the Company or the Company's actual or demonstrably anticipated
research or development, or (iii) which result from any work performed by the
Employee for the Company, such inventions shall belong to the Company.  The
Employee also agrees that the Company shall have the right to keep such
inventions as trade secrets, if the Company chooses.

            12.2     Disclosure
Requirements.  For purposes of this Agreement, an invention is deemed
to have been made during the term of this Agreement if, during such period, the
invention was conceived or first actually reduced to practice.  In order to
permit the Company to claim rights to which it may be entitled, the Employee
agrees to disclose to the Company in confidence the nature of all patent
applications filed by the Employee during the term of this Agreement.

13.             
Assignability
of Benefits. 
Except to the extent that this provision may be contrary to law, no assignment,
pledge, collateralization or attachment of any of the benefits under this
Agreement shall be valid or recognized by the Company.  Except as provided by
law, payment provided for by this Agreement shall not be subject to seizure for
payment of any debts or judgments against the Employee, nor shall the Employee
have any right to transfer, modify, anticipate or encumber any rights or
benefits hereunder. 

14.             
Notice.  All notices and other communications required or
permitted hereunder shall be in writing or in the form of email, facsimile or
letter to be given only during the recipient's normal business hours unless
arrangements have otherwise been made to receive such notice outside of normal
business hours, and can be mailed by registered or certified mail, postage
prepaid, or otherwise delivered by hand, messenger, email or facsimile (as
provided above) addressed (a) 

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if to the
Employee, at the address for such Employee set forth on the signature page
hereto or at such other address as such Employee shall have furnished to the
Company in writing or (b) if to the Company, to its principal executive offices
and addressed to the attention of the Chairman of the Board, or at such other
address as the Company shall have furnished in writing to the Employee.

 

In case of the Company:

                      Indaba
Group, Inc.

                      C/O
CloudCommerce, Inc.

                      1933 Cliff
Dr. Suite 11

                      Santa
Barbara, CA 93109

                      Attention: Andrew Van Noy, CEO

                      Telephone: 805-964-3313

                      Facsimile: 805-964-6968

In case of the Employee:

The address listed below 

signature to this Agreement.

15.             
Attorneys'
Fees.  In
the event that any of the parties must resort to legal action in order to
enforce the provisions of this Agreement or to defend such suit, the prevailing
party shall be entitled to receive reimbursement from the nonprevailing party
for all reasonable attorneys' fees and all other costs incurred in commencing
or defending such suit.

16.             
Entire
Agreement. 
This Agreement and the Merger Agreement embody the entire understanding among
the parties and merge all prior discussions or communications among them, and
no party shall be bound by any definitions, conditions, warranties, or
representations other than as expressly stated in this Agreement and the Merger
Agreement or as subsequently set forth in a writing signed by the duly
authorized representatives of all of the parties to this Agreement.

17.             
No Oral
Change; Amendment. 
This Agreement may only be changed or modified and any provision hereof may
only be waived in writing signed by the party against whom enforcement of any
waiver, change or modification is sought.  This Agreement may be amended only
in writing by mutual consent of the parties.

18.             
Severability.  In the event that any
provision of this Agreement shall be void or unenforceable for any reason
whatsoever, then such provision shall be stricken and of no force and effect. 
The remaining provisions of this Agreement shall, however, continue in full
force and effect, and to the extent required, shall be modified to preserve
their validity.

19.             
Applicable
Law.  This
Agreement shall be construed as a whole and in accordance with its fair
meaning.  This Agreement shall be interpreted in accordance with the laws of
the State of California.

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20.             
Successors
and Assigns. 
Each covenant and condition of this Agreement shall inure to the benefit of and
be binding upon the parties hereto, their respective heirs, personal
representatives, assigns and successors in interest.  Without limiting the
generality of the foregoing sentence, this Agreement shall be binding upon any
successor to the Company whether by merger, reorganization or otherwise.

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

COMPANY:                                                              INDABA
GROUP, INC.

a Delaware corporation

By:                                                                  

Andrew Van Noy, Chairman of the
Board

 

EMPLOYEE:                                                                                                                                    

Ryan Shields

 

                                                                        

Street Address

 

                                                                          

City, State and Zip Code

Telephone Number:                                         

Facsimile Number:                                          

Email Address:                                                 

-8-

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