Document:

EXHIBIT
10.1

 

FOURTH AMENDMENT TO LOAN AND SECURITY AGREEMENT

This FOURTH AMENDMENT TO
LOAN AND SECURITY AGREEMENT (this “Amendment”) is made as of this 16th
day of March, 2005, by and among FLEET RETAIL GROUP, INC.
(successor-by-assignment to Fleet Capital Corporation), as lender (together
with its successors and assigns, the “Lender”), ELECTRONICS BOUTIQUE OF AMERICA
INC., as borrower (the “Borrower”), and ELECTRONICS BOUTIQUE HOLDINGS CORP. (“EB
Holdings”) and EB INVESTMENT CORP. (together with EB Holdings, the “Guarantors”
and each individually as a “Guarantor”; the Guarantors and the Borrower being
sometimes referred to herein collectively as the “Credit Parties” and each
individually as a “Credit Party”).

RECITALS

WHEREAS, the Borrower and
the Lender are parties to a certain Loan and Security Agreement, dated as of
March 16, 1998 (as amended, modified or supplemented from time to time, the “Loan
Agreement”) pursuant to which the Lender has agreed to extend credit to the
Borrower subject to the terms and conditions contained therein;

WHEREAS, the Borrower has
requested that the Lender amend certain provisions of the Loan Agreement; and

WHEREAS, the Lender is
willing to amend certain provisions of the Loan Agreement, but only on the
terms and subject to the conditions set forth herein.

NOW, THEREFORE, based on
these premises, and in consideration of the mutual promises, representations
and warranties, covenants and conditions contained herein and other good and
valuable consideration, the receipt and adequacy of which is hereby
acknowledged, and intending to be legally bound, the parties hereto hereby
agree as follows:

Definitions.  Capitalized terms used herein, and not
otherwise defined herein, shall have the meanings assigned to them in the Loan
Agreement.

Acknowledgment of
Obligations.

Each
of the Credit Parties acknowledges and agrees that, as of March 14, 2005, the
Borrower is unconditionally liable to the Lender under the Loan Agreement and
each of the other Loan Documents for One Million One Hundred Forty-Two Thousand
Six Hundred Twelve Dollars ($1,142,612.00) representing the outstanding LC
Amount (no cash Revolving Credit Loans being presently outstanding), plus all
expenses incurred by the Lender through the Effective Date, including, without
limitation reasonable attorneys’ fees and expenses, and that, as of the
Effective Date, the Borrower has no defenses, counterclaims or rights of setoff
or recoupment with respect to the foregoing obligations.  By operation of Section 4 of the Loan Agreement
(the terms of which remain in effect), each of the Credit Parties acknowledges
that the last day of the current Renewal Term is March 16, 2006.

Each
of the Credit Parties acknowledges and agrees that (i) Borrower has from time
to time requested that Lender arrange for Bank or its affiliates to provide
Borrower with one

or more Bank Products, (ii)
Lender has arranged, and may, in its sole discretion, in the future arrange,
for Bank or its affiliates to provide Borrower with such Bank Products with the
express understanding that all Bank Product Agreements constitute part of the
Loan Documents and all Bank Product Obligations constitute part of the
Obligations secured by a continuing security interest in the Collateral, and
(iii) as of the Effective Date, the Borrower is unconditionally liable to the
Lender for all payments and other obligations incurred by the Borrower with
respect to the Bank Product Agreements (the exposure of Bank and its affiliates
thereunder being underwritten by the Lender on behalf of the Borrower), and
that, as of the Effective Date, the Borrower has no defenses, counterclaims or
rights of setoff or recoupment with respect to such obligations.

Each
of the Credit Parties hereby ratifies and confirms its obligations under the
Loan Documents to which it is  a party
and hereby acknowledges and agrees that each of the Loan Documents to which it
is a party remains in full force and effect.

Each
Guarantor hereby ratifies and confirms its obligations under its surety
agreement and the other Loan Documents to which it is a party and hereby
acknowledges and agrees that, as of the Effective Date, it has no defenses,
counterclaims or rights of setoff or recoupment with respect to its obligations
thereunder.

Amendments.  All of the following amendments to the Loan
Agreement are effective as of the Effective Date:

Notwithstanding
anything to the contrary contained in the Loan Agreement (i) Lender may, in its
sole discretion, at Borrower’s request, issue or cause to be issued Letters of
Credit or LC Guaranties with an expiration date that is later than 365 days
after the issuance date or later than the scheduled Maturity Date, and (ii)
upon termination of the Loan Agreement, Borrower shall deposit with Lender
funds in an amount equal to one hundred fifteen percent (115%) of the LC Amount
to be held by Lender as cash collateral (without interest accruing to
Borrowers) to fund future drawings against outstanding Letters of Credit and LC
Guaranties.

Subsections
8.3.1 and 8.3.2 of the Loan Agreement are deleted as to all dates and periods
ending on or after January 29, 2005.

A
new Subsection 8.3.3 is hereby added to the Loan Agreement to read as follows:

“8.3.3      Eligible Inventory Coverage Ratio.  Maintain an Eligible Inventory Coverage Ratio
of not less than 2.00 to 1.00 measured as of the last Business Day of each
fiscal month commencing with the fiscal month ending January 29, 2005.  For purposes hereof, the term “Eligible
Inventory Coverage Ratio” shall mean the ratio of (a) the Borrowing Base
(without giving effect to a reduction for the LC Amount), to (b) the Maximum
Revolving Credit Amount.”

Exhibit A attached to this Amendment
shall replace Exhibit A-1 (Form of Borrowing Base Certificate) to the Loan
Agreement.  All references to Exhibit A-1
contained in the Loan Agreement shall hereinafter refer to Exhibit A hereto.

The
definition of “Fleet Bank” contained in Appendix A to the Loan Agreement
is deleted, and Appendix A is amended by adding (and inserting in
alphabetical order) the following definition of “Bank” (and all references to “Fleet
Bank” contained in the Loan Agreement are hereby replaced with “Bank”):

“Bank
— means Bank of America, N.A., its successors and assigns, and references to
affiliates of Bank of America, N.A. shall include Lender.”

Representations and
Warranties; Additional Covenants.

In
order to induce the Lender to enter into this Amendment, each Credit Party
represents and warrants to the Lender that (i) the execution, delivery and
performance by the Credit Parties of this Amendment and the transactions
contemplated hereby (A) are and will be within the respective corporate powers
of the Credit Parties, (B) have been authorized by all necessary corporate
action on behalf of the Credit Parties, (C) are not in contravention of any
order or decree of any court or governmental unit, or of any law, rule or
regulation to which any Credit Party or any Credit Party’s property is bound,
(D) are not and will not be in conflict with, or result in a breach of or
constitute (with due notice and/or lapse of time) a default under (x) any
Credit Party’s articles of incorporation or bylaws or (y) any indenture,
agreement, contract or undertaking to which any Credit Party is a party or by
which any of them or any of their property is bound, and (E) except for the
Liens created under the Loan Documents in favor of the Lender, will not result
in the imposition of any Lien on any of the properties of any Credit Party;
(ii) this Amendment shall be valid, binding and enforceable against the Credit
Parties in accordance with its terms; and (iii) no Default or Event of Default
has occurred and is continuing and no Default or Event of Default would result
from the execution, delivery or consummation of the transactions contemplated
by this Amendment.

The
Borrower represents and warrants to the Lender that attached hereto as Exhibit B is a true, correct and
complete entity organizational chart of the Borrower, EB Holdings and their
Subsidiaries, together with a memorandum summarizing the activities and purpose
of each entity within such organizational structure (an “organizational summary
memorandum”).  Borrower reaffirms and
confirms its continuing obligation to update and deliver to the Lender such
entity organizational chart and organizational summary memorandum in accordance
with the Loan Agreement.

EB
Investment Corp. represents and warrants that EB Games Customer Service, Inc.
is a wholly-owned subsidiary of EB Investment Corp. and that its formation and
operation have no adverse impact on the Borrower.

Effectiveness; Conditions
Precedent.

The
effectiveness of the amendments and other provisions hereof are subject to the
following conditions precedent, including, where applicable, that the Lender
shall have received the following documents and other items, duly executed,
where appropriate, by authorized representatives of the Credit Parties and the
Lender, as applicable (all such documents and other items must be in form and
substance satisfactory to the Lender):

This
Amendment (including the Exhibits hereto);

Evidence
that the execution, delivery and performance of this Amendment by each of the
Credit Parties have been duly authorized by all necessary action, and that no
amendment or other modification to the articles or certificate of incorporation
or bylaws of any Credit Party has been made since the date of the original
delivery thereof to Lender and that such documents (in the form delivered to
the Lender) remain in full force and effect; and

Payment
of all reasonable fees and expenses of Blank Rome LLP, counsel to the Lender,
incurred by the Lender that are outstanding as of the date hereof.

The
date which all of the conditions precedent set forth in Section 5(a) hereof
shall have been satisfied or waived is referred to herein as the “Effective
Date.”

Miscellaneous.

Except
as modified or provided herein or in any other instruments or documents
executed in connection herewith, all terms and conditions of the Loan Agreement
and the other Loan Documents shall remain in effect in accordance with their
original tenor.  Except as otherwise
provided herein, each agreement, covenant, representation and warranty of each
of the Credit Parties hereunder shall be deemed to be in addition to, and not
in substitution for, the agreements, covenants, representations and warranties
previously made by such Credit Party.

Each
Credit Party hereby agrees to take all such actions and to execute and/or
deliver to the Lender all such documents, assignments, financing statements and
other documents, as the Lender may require from time to time, to effectuate and
implement the purposes of this Amendment and the other Loan Documents, and to
pay or reimburse the Lender for all reasonable attorneys’ fees and expenses
incurred in connection herewith and therewith.

Each
Credit Party covenants, confirms and agrees that as security for the repayment
of the Obligations of the Credit Parties under the Loan Documents, the Lender
has, and shall continue to have, a continuing first priority, perfected lien on
and security interest in the Collateral, all whether now owned or hereafter
acquired, created or arising, together with all proceeds, including insurance
proceeds thereof, as set forth in the Loan Agreement and the other Loan
Documents, as applicable, subject to no Liens other than Permitted Liens.  Each Credit Party acknowledges and agrees
that nothing herein contained in any way impairs the Lender’s existing rights
and priority in the Collateral.

The
Loan Agreement (as modified by this Amendment), together with the Loan
Documents, contains the entire agreement among the parties with respect to the
transactions contemplated hereby, and supersedes all negotiations,
presentations, warranties, commitments, offers, contracts and writings prior to
the date hereof relating to the subject matters hereof.  The Loan Agreement (as modified by this
Amendment) and the other Loan Documents may be amended, modified, waived,
discharged or terminated only in accordance with the terms thereof.

THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE COMMONWEALTH OF PENNSYLVANIA
WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW.

This
Amendment may be executed in any number of counterparts, each of which when so
executed and delivered shall be deemed an original, but all of which
counterparts together shall constitute but one and the same instrument.  Execution and delivery by facsimile shall
bind each of the parties.

This
Amendment shall be binding upon and inure to the benefit of each of the Credit
Parties and the Lender and their respective successors, heirs and assigns,
except that no Credit Party may assign or transfer its rights or obligations
hereunder without the prior written consent of the Lender.

Any
provision hereof that is prohibited or unenforceable in any jurisdiction shall
be, as to such jurisdiction, ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate
or render unenforceable such provision in any other jurisdiction.

No
rights are intended to be created hereunder for the benefit of any third party
donee, creditor or incidental beneficiary, except that Bank and its affiliates
shall be entitled to rely on Section 2(b) hereof.

The
headings of any section or paragraph of this Amendment are for convenience only
and shall not be used to interpret any provision of this Amendment.

EACH PARTY TO THIS AMENDMENT KNOWINGLY AND INTENTIONALLY
WAIVES THE RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT, PROCEEDING OR
COUNTERCLAIM OF ANY KIND ARISING OUT OF THIS AMENDMENT OR THE OTHER LOAN
DOCUMENTS.

[SIGNATURE
PAGE FOLLOWS]

IN WITNESS WHEREOF, the
parties hereto have caused this Amendment to be duly executed and delivered by
their respective officers thereunto duly authorized as of the date first above
written.

	
   

  	
  ELECTRONICS BOUTIQUE OF AMERICA INC.,

  as the Borrower

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James A. Smith

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ELECTRONICS BOUTIQUE HOLDINGS CORP.,

  as a Guarantor

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James A. Smith

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
					

 

 

	
   

  	
   

  	
   

  
	
   

  	
  EB INVESTMENT CORP.,

  as a Guarantor

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James A. Smith

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  FLEET RETAIL GROUP, INC., as the Lender

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kathleen Dimock

  
	
   

  	
  Name:

  	
  Kathleen Dimock

  
	
   

  	
  Title:

  	
  Managing DirectorExhibit 10.34

 

EMPLOYMENT
AGREEMENT

 

This
Employment Agreement (this “Agreement”), entered into
the 3rd day of March, 2005, effective as of January 1, 2005 is by
and between Dynamic Materials Corporation, a Delaware corporation (the “Company”), and Yvon Cariou (“Executive”).

 

WHEREAS,
Executive has significant experience in the management of companies and is
willing to serve the Company on the terms and subject to the conditions
hereinafter set forth; and

 

WHEREAS, the
Company desires to secure the continued services of Executive subject to the
terns and conditions hereinafter set forth; and

 

NOW,
THEREFORE, in consideration of the foregoing and the mutual covenants and
promises contained herein, the parties agree as follows:

 

1.  Employment

 

The Company
hereby employs Executive as President and Chief Executive Officer of the
Company reporting to the Board, and Executive hereby accepts such employment
and agrees to perform such duties and responsibilities as are assigned to him
from time-to-time by the Board.

 

2.  Full-time
Best Efforts

 

Executive
shall devote his full and exclusive professional time and attention to the
performance of his obligations under this Agreement, and will at all times
faithfully, industriously and to the best of his ability, experience and
talent, perform all of this obligations hereunder.

 

3.  Term of Agreement

 

This agreement
shall be effective on January 1, 2005 (the Effective Date) and shall continue
until terminated pursuant to Section 5 below.

 

4.  Compensation Reimbursement

 

(a)     Salary

 

During the
term of this Agreement, the Company shall pay Executive an annual base salary (“Base
Salary”) of $290,000 payable in accordance with the Company’s standard payroll
practices for similarly situated employees. 
The Base Salary shall be adjusted annually at the discretion of the
Board.

 

(b)     Bonus

 

Executive shall be eligible to
receive an annual bonus (“Bonus”) with a maximum
payout amount of 50% of the Base Salary. 
The Bonus will be based on pre-tax income, before extraordinary items
target for DMC Consolidated, expressed in US Dollars (max 50%), and on
performance goals and rules established by the Board. The Bonus, if any, will
be payable before March 15 following the end of the year for which the
performance is evaluated.  An extra bonus
will be paid based on 4% of pre-tax income, before extraordinary items above
110% of budget.

 

(c)     Stock
Options

 

Executive
shall be eligible to receive options to purchase shares of the Common Stock of
the Company under the Company’s 1997 Equity Incentive Plan (the “Option Plan”),
subject to the terms and conditions of such plan

 

1

 

and the terms
and conditions of the option agreement. 
If the Company terminates the Executive’s employment for any reason other
than Cause pursuant to Section 5(b), all options held by the Executive shall
immediately vest, subject to the terms and conditions of the Option Plan and
the terms and conditions of the option agreement.

 

(d)     Benefits

 

Executive
shall receive the following standard Company benefits:

 

(i).             term
life insurance coverage in the amount of $500,000 which is in addition to the
standard term life insurance provided in the Company’s standard benefit plan;

 

(ii).            participation
in the executive long-term disability plan, subject to any waiting periods or
exclusions required by the insurance provider;

 

(iii).           four
weeks of vacation per year until such time as Executive’s length of service
entitled Executive to additional vacation;

 

(iv).           participation
in the Company’s standard benefit programs including health and dental
insurance, term life insurance, accidental death and dismemberment insurance,
short and long term disability, paid holiday and certain other standard
benefits provided by the Company; and

 

(v).            participation
in the Company’s 401(k) retirement plan.

 

(e)     Expense
Reimbursement

 

The Company
shall reimburse Executive for all travel expenses and other disbursements
incurred by Executive for or on behalf of the Company in the performance of his
duties hereunder, subject to and in accordance with the Company’s expense
reimbursement policies and procedures, as in effect from time-to-time.

 

5.  Termination

 

a)    The
Company may terminate the Executive’s employment at any time for Cause (as
hereinafter defined), effective immediately upon written notice to Executive.
Such notice shall specify that a termination is being made for Cause, shall
state the basis therefor. For purposes of this Agreement, termination for “Cause”
shall be defined as termination because of:

 

(i).             The
continued failure by Executive to substantially perform, or the gross
negligence in the performance of, his duties hereunder for a period of 15 days
after the Chief Executive Officer of the Company has made a written demand for
performance which specifically identities the manner in which he believes that
Executive has not substantially performed his duties.

 

(ii).            The
commission by Executive of a willful act of dishonesty or misconduct which is
injurious to the Company.

 

(iii).           A
conviction or a plea of guilty or nolo contendere in connection with fraud or
any crime that constitutes a felony in the jurisdiction involved.

 

(iv).           The
misconduct by Executive with respect to the business and affairs of the
Company, including material violations of any Company policy, including the
Code of Conduct.

 

b)   The
Company may terminate the Executive’s employment for any reason other than
Cause at any time upon one-year’s written notice to the Executive or the
payment to the Executive of one year’s salary, including a bonus for such
period, based on the average bonus paid to Executive for the two years
preceding the termination; provided, that the Executive shall execute a release
releasing the Company from all claims as a condition of receiving the one year’s
salary and bonus.

 

c)    Upon
the termination of the Executive’s employment hereunder, neither Executive nor
Executive’s beneficiary or estate shall have any further rights or claims
against the Company under this Agreement except the right to receive:

 

(i).             the
unpaid portion of the Salary computed on a pro rata basis to the date of
termination;

 

(ii).            any
unpaid bonus owing under Section 4(b) or 5(b), and

 

2

 

(iii).           reimbursement
for any expenses for which Executive shall not have theretofore bee reimbursed
as provided in Section 4(e).

 

d)   Notwithstanding
any other provision of this Section 5, the Executive shall have the right to
terminate his employment at any time upon one month’s written notice to the
Company. Any such termination by the Executive shall be deemed effective upon
receipt by the Company of such notice.

 

6.  Proprietary Information and Non-Competition
Agreements

 

Executive shall be bound by the terms of the
Company’s standard form of the Key Employee Proprietary Information and
Inventions Agreement, attached hereto as Exhibit A, and the Non-Competition
Agreement, attached hereto as Exhibit B, from and after the date hereof until
the termination of his employment hereunder.

 

7.  Miscellaneous

 

(a)     Judicial
Limitation

 

In the event
that any provision of this Agreement is more restrictive than permitted by the
law of the jurisdiction in which the Company seeks enforcement thereof, the
provisions of this Agreement shall be limited only to that extent that a
judicial determination finds the same to be unreasonable or otherwise
enforceable. Such invalidity or unenforceability shall not affect any other
terms herein, but such term shall be deemed deleted, and such deletion shall
not affect the validity of the other terms thereof. In addition, if any one or
more of the terms contained in this Agreement shall for any reason be held to
be excessively broad or of an overly long duration, that term shall be
construed in a manner to enable it to be enforced to the extent compatible with
applicable law. Moreover, notwithstanding any judicial determination that any
provision of this Agreement is not specifically enforceable the parties intend
that the Company shall nonetheless be entitled to recover monetary damages as a
result of any breach hereof.

 

(b)     Injunctive
Relief

 

In view of the
nature of the rights in goodwill, business reputation and prospects of the
Company to be protected under this Agreement, Executive understands and agrees
that the Company could not be reasonably or adequately compensated in damages
in an action at law for Executive’s breach of his obligations hereunder.
Accordingly, Executive specifically agrees that the Company shall be entitled
to temporary and permanent injunctive relief to enforce the provisions of this
Agreement and that such relief may be granted without the necessity or proving
actual damages. This provision with respect to injunctive relief shall not,
however, diminish the right of the Company to claim and recover damages in addition
to injunctive relief.

 

(c)     Waiver

 

The failure of
the Company to enforce at any time of the provisions of this Agreement or to
require any performance by Executive of the provisions hereof shall in no way
be construed to be a waiver of such provisions or to affect either the validity
of this Agreement, or any part hereof, or the right of the Company thereafter
to enforce each and every provision in accordance with the terms of this
Agreement.

 

(d)     Severability

 

The invalidity
or unenforceability of any particular provision of this Agreement shall not
affect the other provisions hereof, and this Agreement shall be construed in
all respects as if such invalid or unenforceable provisions were omitted.

 

(e)     Assignability

 

This Agreement
shall be freely assignable by the Company and shall inure to the benefit of its
successors and assigns.

 

(f)      Entire
Agreement

 

This Agreement,
including the Proprietary Information Agreement and the Non Competition
Agreement referred to herein, and which are incorporated herein and made a part
hereof by reference, embody the entire

 

3

 

agreement and
understanding of the parties hereto and supersede all prior agreements or
understanding (whether written or oral) with respect to the subject matter
hereof.

 

(g)     Governing
Law and Venue

 

The validity
of this Agreement and any of its terms and provisions, as well as the rights
and duties of the parties hereunder, shall be governed by the laws of the State
of Colorado (without regard to its conflicts of law doctrines) and the venue
for any action to enforce or to interpret this Agreement shall be in a court of
competent jurisdiction located in the State of Colorado and each of the parties
consent to the jurisdiction of such court in any such action or proceeding and
waives any objection to venue laid therein.

 

(h)     Amendments

 

This agreement
may not be amended, altered or modified other than by a written agreement
between the parties hereto.

 

(i)      Counterparts

 

This Agreement
may be executed in any number of counterparts, each of which shall be deemed to
be an original and all of which shall together constitute one and the same
instrument. This Agreement shall become binding when one or more counterparts
hereof shall bear the signatures of all the parties indicated as the
signatories hereto.

 

(j)      Notices

 

All notices,
requests, demands and other communications under the Agreement shall be given
in writing and shall be served either personally, by facsimile or delivered by
first class mail, registered or certified, return receipt requested, postage
prepaid and properly addressed to the parties as noticed herein. Notice shall
be deemed received upon the earliest of actual receipt, confirmed facsimile or
three (3) days following mailing pursuant to this section.

 

(k)     Interpretation

 

Each party has
had the opportunity and has reviewed and revised this Agreement and, therefore,
the rule of construction requiring that any ambiguity be resolved against the
drafting party shall not be employed in the interpretation of this Agreement.

 

The section
headings contained in this Agreement are for convenience and reference purposes
only and shall not affect in any way the meaning and interpretation of this
Agreement.

 

4

 

(l)      Attorney’s
Fees and Costs

 

If either
party shall commence any action or proceeding against the other to enforce the
provisions hereof, or to recover damages as a result of the alleged breach of
any provisions hereof, the prevailing party therein shall be entitled to
recover all reasonable costs incurred in connection therewith, including
reasonable attorney’s fees.

 

 

EXECUTED as
the date first set above

 

 

DYNAMIC
MATERIALS CORPORATION

 

 

	
  /s/ Michel
  Nicolas

  	
   

  
	
  By: Michel
  Nicolas

  
	
  Title:
  Chairman

  

 

 

EXECUTIVE

 

 

	
  /s/ Yvon
  Cariou

  	
   

  

 

5

 

Exhibit A

 

KEY
EMPLOYEE PROPRIETARY INFORMATION

AND INVENTIONS AGREEMENT

 

In
consideration of my employment or continued employment by Dynamic Materials
Corporation, and the compensation now and hereafter paid to me, I hereby agree
as follows:

 

1.   NON
DISCLOSURE

 

1.1      Recognition
of Company’s Rights; Non disclosure.

 

At all times
during my employment and thereafter, I will hold in strictest confidence and
will not disclose, use, lecture upon or publish any of the Company’s
Proprietary Information (as defined below), except as such disclosure, use or
publication may be required in connection with my work for the Company or
unless an officer of the Company expressly authorizes such in writing. I will
obtain the Company’s written approval before publishing or submitting for
publication any material (written, verbal or otherwise) that relates to my work
at the Company and/or incorporates any Proprietary Information. I hereby assign
to the Company any rights I may have or acquire in such Proprietary Information
and recognize that all Proprietary Information shall be the sole property of
the Company and its assigns.

 

1.2      Proprietary
Information

 

The term “Proprietary
Information” shall mean any and all confidential and/or proprietary knowledge,
data or information of the Company. By way of illustration but not limitation, “Proprietary
Information” includes:

 

(a)     trade
secrets, inventions, mask works, ideas, processes, formulas, source and object
codes, data, programs, other works of authorship, know-how, improvements,
discoveries, developments, designs and techniques (hereinafter collectively
referred to as “Inventions”); and

 

(b)     information
regarding plans for research, development, new products, marketing and selling,
business plans, budgets and unpublished financial statements, licenses, prices
and costs, suppliers and customers; and

 

(c)     information
regarding the skills and compensation of other employees of the Company.
Notwithstanding the foregoing, it is understood that, at all such times, I am
free to use information which is generally known in the trade or industry,
which is not gained as a result of a breach of this Agreement, and my own,
skill, knowledge, know-how and experience to whatever extent and in whichever
way I wish.

 

1.3      Third
Party Information

 

I understand,
in addition, that the Company has received and in the future will receive from
third parties confidential or proprietary information (“Third Party Information”)
subject to a duty on the Company’s part to maintain the confidentiality of such
information and to use it only for certain limited purposes. During the term of
my employment and thereafter, I will hold Third Party Information in the
strictest confidence and will not disclose to anyone (other than Company
personnel who need to know such information in connection with their work for
the Company) or use, except in connection with my work for the Company, Third
Party Information unless expressly authorized by an officer of the Company in
writing.

 

A-1

 

1.4      No
Improper Use of Information of Prior Employers and Others

 

During my
employment by the Company, I will not improperly use or disclose any
confidential information or trade secrets, if any, of any former employer or
any other person to whom I have an obligation of confidentiality, and I will
not bring onto the premises of the Company any unpublished documents or any
property belonging to any former employer or any other person to whom I have an
obligation of confidentiality unless consented to in writing by that former
employer of person. I will use in the performance of my duties only information
which is generally known and used by persons with training and experience
comparable to my own, which is common knowledge in the industry or otherwise
legally in the public domain, or which is otherwise provided or developed by
the Company.

 

2.   ASSIGNMENT
OF INVENTION

 

2.1      Proprietary
Rights

 

The term “Proprietary
Rights” shall mean all trade secret, patent, copyright, mask work and other
intellectual property rights throughout the world.

 

2.2      Prior
Inventions

 

Inventions, if
any, patented or unpatented, which I made prior to the commencement of my
employment with the Company are excluded from the scope of this Agreement. To
preclude any possible uncertainty, I have set forth on Schedule I (Previous
Inventions) hereto a complete list of all Inventions that I have, alone or
jointly with others, conceived, developed or reduced to practice or caused to
be conceived, developed or reduced to practice prior to the commencement of my
employment with the Company, that I consider to be my property of the property
of third parties and that I wish to have excluded from the scope of this
Agreement (collectively referred to as “Prior Inventions”). If disclosure of
any such Prior Inventions would cause me to violate any prior confidentiality
agreement, I understand that I am not to list such Prior Inventions in Schedule
I but am only to disclose a cursory name for each such invention, a listing of
the party(ies) to whom it belongs and the fact that full disclosure as to such
inventions has not been made for that reason. A space is provided on Schedule I
for such purpose. If no such disclosure is attached, I represent that there are
no Prior Inventions. If, in the course of my employment with the Company, I
incorporate a Prior Invention into a Company product, process or machine, the
Company is hereby granted and shall have a nonexclusive, royalty-free,
irrevocable, perpetual, worldwide license (with rights to sublicense through
multiple tiers of sublicences) to make, have made, modify, use and sell such
Prior Invention. Notwithstanding the foregoing, I agree that I will not
incorporate, or permit to be incorporated, Prior Inventions in any Company
Inventions without the Company’s prior written consent.

 

2.3      Assignment
of Inventions

 

Subject to Sections 2.4 and 2.6 hereof, I hereby assign and agree to
assign in the future (when any such Inventions or Proprietary Rights are first
reduced to practice or first fixed in a tangible medium, as applicable) to the
Company all my right, title and interest in and to any and all Inventions (and
all Proprietary Rights with respect thereto) whether or not patentable or
registable under copyrights or similar statutes, made or conceived or reduced
to practice or learned by me, either alone or jointly with others, during the
period of my employment with the Company. Inventions assigned to the Company,
or to a third party as directed by the Company pursuant to this Section 2, are
hereinafter referred to as “Company Inventions.”

 

2.4      Nonassignable
Inventions

 

I recognize
that, in the event of a specifically applicable state law, regulation, rule, or
public policy (“Specific Inventions Law”), this Agreement will not be deemed to
require assignment of any invention which:

 

A-2

 

A-    qualifies
fully for protection under a Specific Inventions Law or,

 

B-     by
virtue of the fact that any such invention was, for example, developed entirely
on my own time without using the Company’s equipment, supplies, facilities, or
trade secrets and neither related to the Company’s actual or anticipated
business, research or development, nor resulted from work performed by me for
the Company.

 

2.5      Obligation
to Keep Company Informed

 

During the
period of my employment and for six (6) months after termination of my
employment with the Company, I will promptly disclose to the Company fully and
in writing all Inventions authored, conceived or reduced to practice by me,
either alone or jointly with others. In addition, I will promptly disclose to
the Company all patent applications filed by me or on my behalf within a year
after termination of employment. At the time of each such disclosure, I will
advise the Company in writing of any Inventions that I believe fully qualify
for protection under the provisions of a Specific Inventions Laws; and I will
at that time provide to the Company in writing all evidence necessary to
substantiate that belief. The Company will keep in confidence and will not use
for any purpose or disclose to third parties without my consent any
confidential information disclosed in writing to the Company pursuant to this Agreement
relating to Inventions that qualify fully for protection under a Specific
Inventions Law. I will preserve the confidentiality of any Invention that does
not fully qualify for protection under a Specific Inventions Law.

 

2.6      Government
for Third Party

 

I also agree
to assign all my right, title and interest in and to any particular Invention
to a third party, including without limitation the United States, as directed
by the Company.

 

2.7      Works
for Hire

 

I acknowledge
that all original works of authorship which are made by me (solely or jointly
with others) within the scope of my employment and which are protectable by
copyright are “works made for hire,” pursuant to United States Copyright Act
(17 U.S.C., Section 101).

 

2.8      Enforcement
of Proprietary Rights

 

I will assist
the Company in every proper way to obtain, and from time to time enforce,
United States and foreign Proprietary Rights relating to Company Inventions in
any and all countries. To that end I will execute, verify and deliver such
documents and perform such other acts (including appearances as a witness) as
the Company may reasonably request for use in applying for, obtaining,
perfecting, evidencing, sustaining and enforcing such Proprietary Rights and
the assignment thereof In addition, I will execute, verify and deliver
assignments of such Proprietary Rights to the Company or its designee. My
obligation to assist the Company with respect to Proprietary Rights relating to
such Company Inventions in any and all countries shall continue beyond the
termination of my employment, but the Company shall compensate me at a
reasonable rate after my termination for the time actually spent by me at the
Company’s request on such assistance.

 

In the event
the Company is unable for any reason, after reasonable effort, to secure my
signature on any document needed in connection with the actions specified in
the preceding paragraph, I hereby irrevocably designate and appoint the Company
and its duly authorized officers and agents as my agent and attorney in fact,
which appointment is coupled with an interest, to act for and in my behalf to
execute, verify and file any such documents and to do all other lawfully
permitted acts to further the purposes of the preceding paragraph with the same
legal force and effect as if executed by me. I hereby waive and quitclaim to
the Company any and all claims, of any nature whatsoever, which I now or may
hereafter have for infringement of any Proprietary Rights assigned hereunder to
the Company.

 

A-3

 

3.   RECORDS

 

I agree to keep and maintain adequate and current records (in the form
of notes sketches, drawings and in any other form that may be required by the
Company) of all Proprietary Information developed by me and all Inventions made
by me during the period of my employment at the Company, which records shall be
available to and remain the sole property of the Company.

 

4.   ADDITIONAL ACTIVITIES

 

I agree that during the period of my employment by the Company and for
one (1) year after the date of termination of my employment by the Company I
will not, without the Company’s express written consent, engage in any
employment or business activity which is competitive with, or would otherwise
conflict with, my employment by the Company. I agree further that for the
period of my employment by the Company and for one (1) year after the date of
termination of my employment by the Company I will not:

 

(a)        induce
any employee of the Company to leave the employ of the Company or

 

(b)        solicit
the business of any client or customer of the Company (other than on behalf of
the Company). If any restriction set forth in this Section is found by any
court of competent jurisdiction to be unenforceable because it extends for too
long a period of time or over too great a range of activities or in too broad a
geographic area, it shall be interpreted to extend only over the maximum period
of time, range of activities or geographic area as to which it may be
enforceable.

 

5.   NO CONFLICTING OBLIGATION

 

I represent that my performance of all of the terms of this Agreement
and as an employee of the Company does not and will not breach any agreement to
keep in confidence information acquired by me in confidence or in trust prior
to my employment by the Company. I have not entered into, and I agree I will
not enter into, any agreement either written or oral in conflict herewith.

 

6.   RETURN OF COMPANY DOCUMENTS

 

When I leave the employ of the Company, I will deliver to the Company
any and all drawings, notes, memoranda, specifications, devices, formulas and
documents, together with all copies thereof, and any other material containing
or disclosing any Company Inventions, Third Party Information or Proprietary
Information of the Company. I further agree that any property situated on the
Company’s premises and owned by the Company, including disks and other storage
media, filing cabinets or other work areas, is subject to inspection by Company
personnel at any time with or without notice. Prior to leaving, I will
cooperate with the Company in completing and signing the Company’s termination
statement.

 

7.   LEGAL AND EQUITABLE REMEDIES

 

Because my services are personal and unique and because I may have
access to and become acquainted with the Proprietary Information of the
Company, the Company shall have the right to enforce this Agreement and any of
its provisions by injunction, specific performance or other equitable relief,
without bond and without prejudice to any other rights and remedies that the
Company may have for a breach of this Agreement.

 

8.   NOTICES

 

Any notices required or permitted hereunder shall be given to the
appropriate party at the address specified below or at such other address as
the party shall specify in writing. Such notice shall be deemed given upon
personal delivery to the appropriate address or if sent by certified or
registered mail, three (3) days after the date of mailing.

 

A-4

 

9.   NOTIFICATION OF NEW EMPLOYER

 

In the event that I leave the employ of the Company, I hereby consent
to the notification of my new employer of my rights and obligations under this
Agreement.

 

10. GENERAL
PROVISIONS

 

10.1    Governing
Law; Consent to Personal Jurisdiction

 

This Agreement
will be governed by and construed according to the laws of the state of
Colorado, as such laws are applied to agreements entered into and to be
performed entirely within Colorado between Colorado resident. I hereby
expressly consent to the personal jurisdiction of the state and federal courts
located in Boulder County, Colorado for any lawsuit filed there against me by
the Company arising from or related to this Agreement.

 

10.2    Severability

 

In case any
one or more of the provisions contained in this Agreement shall, for any
reason, be held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect the other
provisions of this Agreement, and this Agreement shall be construed as if such
invalid, illegal or unenforceable provision had never been contained herein. If
moreover, any one or more of the provisions contained in this Agreement shall
for any reason be held to be excessively broad as to duration, geographic
scope, activity or subject, it shall be construed by limiting and reducing it,
so as to be enforceable to the extent compatible with the applicable law as it
shall then appear.

 

10.3    Successors
and Assigns

 

This Agreement
will be binding upon my heirs, executors, administrators and other legal
representatives and will be for the benefit of the Company to any successor in
interest or other assigns.

 

10.4    Survival

 

The provisions
of this Agreement shall survive the termination of my employment and the
assignments of this Agreement by the Company to any successor in interest or
other assignee.

 

10.5    Employment

 

I agree and
understand that nothing in this Agreement shall confer any right with respect
to continuation of employment by the Company, nor shall it interfere in any way
with my right or the Company’s right to terminate my employment at any time,
with or without cause.

 

10.6    Waiver

 

No waiver by
the Company of any breach of this Agreement shall be a waiver of any preceding
or succeeding breach. No waiver by the Company of any right under this
Agreement shall be construed as a waiver of any other right. The Company shall
not be required to give notice to enforce strict adherence to all terms of this
Agreement.

 

10.7    Entire
Agreement

 

The
obligations pursuant to Sections 1 and 2 of this Agreement shall apply to any
time during which I was previously employed, or am in the future employed, by
the Company as a consultant if no other agreement governs nondisclosure and
assignment of inventions during such period. This Agreement is the final,
complete and exclusive agreement of the parties with respect to the subject
matter hereof and supersedes

 

A-5

 

and merges all
prior discussions between us. No modification of or amendment of this
Agreement, not any waiver of any rights under this Agreement, will be effective
unless in writing and signed by the party to be charged. Any subsequent change
or changes in my duties, salary or compensation will not affect the validity or
scope of this Agreement.

 

This Agreement
shall be effective as of the first day of my employment with the Company,
namely: November 16, 2000

 

 

I HAVE READ
THIS AGREEMENT CAREFULLY AND UNDERSTAND ITS TERMS.  

I HAVE
COMPLETELY FILLED OUT EXHIBIT A TO THIS AGREEMENT.

 

 

DATE: January
1, 2005

 

 

SIGNATURE:

 

 

PRINTED NAME:

 

 

ACCEPTED AND
AGREE TO:

 

 

By: January 1,
2005

 

 

Title:

 

 

Dated:

 

A-6

 

EXHIBIT A

 

To:

 

 

From:

Date:

 

 

Re:
Previous Inventions

 

 

1.             Except
as listed in section 2 below, the following is a complete list of all
inventions or improvements relevant to the subject matter of my employment by
Dynamic Materials have been made or conceived or first reduced to practice by
me alone or jointly with others prior to my engagement by Dynamic Materials.

 

No inventions
or improvements.

 

See below:

 

 

 

Additional
sheets attached.

 

 

2.             Due
to a prior confidentiality agreement, I cannot complete the disclosure under
Section 1 above with respect to inventions or improvements generally
listed below, the proprietary rights and duty of confidentiality with respect
to which I owe the following party(ies):

 

	
  Invention or Improvement

  	
   

  	
  Party(ies)

  	
   

  	
  Relationship

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

I-1

 

EXHIBIT B

 

NON COMPETITION AGREEMENT

 

This
Non-Competition Agreement (this “Agreement”) effective as of January 1, 2005 is
by and between Dynamic Materials Corporation (the “Company”) and Yvon Cariou (“Executive”).

 

WHEREAS
Executive has significant experience in the management of companies and is
willing to serve the Company on the terms and subject to the conditions of a
Employment Agreement, dated January 1, 2005; and

 

WHEREAS the
Company wishes to secure its business:

 

NOW,
THEREFORE, in consideration of the foregoing and the mutual covenants and
promises contained herein, the parties agree as follows:

 

1-Covenant
of non competition

 

The Company
and Executive hereby acknowledge the highly competitive nature of the Company’s
businesses.

 

Accordingly,
the parties covenant and agree that Executive shall not, other than for the
direct purpose of his duties as Executive of the Company, directly or
indirectly engage in the business of developing, manufacturing, selling or
distributing explosive cladding products or technologies developed manufactured
or sold by the Company or its affiliates, as of the duration of the Employment
Agreement and up to two (2) years following the Executive’s termination.

 

2-Non
competition conditions

 

During a
period of two (2) years following the Executive’s termination, Executive shall
neither, without the prior written approval of the Chairman of the Company,
which approval shall not be refused without reason:

 

(A)   solicit
any person or entity which is then a supplier of the Company or which had been
a supplier of the Company;

 

(B)    solicit
or make other similar business contact with any person or entity which is then
a customer of the Company;

 

(C)    solicit
the services of, or initiate discussions with any employee of the Company in
order to cause such employee to terminate his or her employment with the
Company, or employ any such employee.

 

If any
provision of this Agreement or the application of any such provision is
invalid, illegal or unenforceable in any jurisdiction, such invalidity,
illegality or unenforceability shall not affect any other provision of this
Agreement or invalidate or render unenforceable such provision in any other
jurisdiction.

 

 

B-1

 

EXECUTED as of the date first set forth above,

 

DYNAMIC MATERIALS
CORPORATION

 

 

	
   

  	
   

  
	
  By: Michel
  Nicolas

  
	
  Title:
  Chairman

  
	
   

  
	
   

  
	
  EXECUTIVE

  
	
   

  
	
   

  
	
   

  	
   

  

 

B-2

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