Document:

ESCROW AGREEMENT

       This ESCROW AGREEMENT, effective as of the 27th day of September, 2004 (the "Effective Date") (sometimes hereinafter referred to as this "Escrow Agreement" or this "Agreement"), by and among PARADIGM GROUP II, LLC; PARADIGM MILLENNIUM FUND, L.P. (collectively "Paradigm"); and XFORMITY, INC., a Texas corporation ("XFM"); and CLIFFORD L. NEUMAN, P.C. (the "Escrow Agent").  Paradigm, XFM and the Escrow Agent are hereinafter sometimes individually referred to herein as a "party" and collectively as the "parties".

W I T N E S S E T H:

       WHEREAS, XFM and Paradigm are affiliated parties to that certain Agreement and Plan of Merger, dated on or about August 13, 2004 (the "Merger Agreement") (capitalized terms having the meaning assigned to them in the Merger Agreement unless otherwise defined herein); 

       WHEREAS, XFM and Paradigm agreed to execute and deliver the Indemnity Agreement pursuant to which Paradigm agrees to indemnify, defend and hold harmless XFM from any debt, obligation or liability arising from any activity pertaining to XML-Global Technologies, Inc. arising before the Closing Date; 

       WHEREAS, to secure Paradigm's obligations under the Indemnity Agreement, XFM and Paradigm have agreed that the 6,179,193 shares to be issued to Paradigm as contemplated by the Merger Agreement, shall be withheld and deposited into escrow, subject to the terms and conditions of this Agreement; and

       WHEREAS, the Escrow Agent has agreed to act as escrow agent pursuant to the terms hereof.

       NOW, THEREFORE, in consideration of the mutual obligations and covenants hereafter set forth, Paradigm, XFM and the Escrow Agent hereby covenant and agree as follows:

1.     Designation of Escrow Agent.

       Paradigm and XFM hereby designate and appoint the Escrow Agent as escrow agent to serve in accordance with the terms of this Escrow Agreement during the Escrow Period.  The Escrow Agent hereby accepts such appointment and agrees to perform the duties set forth
herein.

2.     Delivery of Escrow Shares to Escrow.
       The parties hereby acknowledge and agree that, on the Closing Date, Paradigm shall deliver to the Escrow Agent a certificate representing 6,179,193 shares of XML Common Stock (the "Escrow Shares").

       The parties acknowledge and agree that the number of shares issuable to Paradigm upon consummation of the merger described in the Merger Agreement shall be reduced by the number of Escrow Shares delivered to the Escrow Agent pursuant to this Escrow Agreement.

       The Escrow Shares shall be held in escrow and distributed in accordance with the terms and provisions of this Escrow Agreement.

3.    
Effect of Escrow.
       Notwithstanding the delivery of the Escrow Shares to the Escrow Agent in accordance with Section 2 of this Escrow Agreement, Paradigm and XFM agree that the merger and the other transactions provided for or contemplated in the Merger Agreement shall be deemed closed and consummated for all purposes, subject only to the conditions subsequent contained in Section 4.1 of the Merger Agreement and the requirements of paragraph 5(b) of this Escrow Agreement.

4.     Title to Escrow Shares and XFM Stock

       (a)       The Escrow Agent shall have no discretion whatsoever with respect to the management, disposition or investment of the Escrow Shares and is not be a trustee or fiduciary to XFM or Paradigm. The Escrow Agent shall hold the Escrow Shares in accordance with this Agreement. 

       (b)       Until such time as this Escrow terminates in accordance with the provisions of this Escrow Agreement, the Escrow Shares shall be and remain the exclusive property of Paradigm and Paradigm shall possess and exercise all rights of beneficial ownership with respect to such shares including, without limitation, the right to vote such shares on all matters presented to the shareholders of XML and the right to participate in any and all dividends and distributions declared and paid by XML with respect to the Shares.  The delivery of the Escrow Shares pursuant to the terms of this Agreement to the Escrow Agent shall in no way be deemed or construed to be a transfer by Paradigm of any right, title or interest in and to the Escrow Shares to any other party, except to the extent provided for and subject to the terms and conditions of this Agreement.  Notwithstanding the foregoing, until the Escrow Shares are distributed and released from escrow or this Escrow Agreement is otherwise terminated in accordance with its terms, Paradigm may not sell, transfer, assign or encumber the Escrow Shares

5.     Release of Escrow Shares and Termination of Escrow.

       (a)       The Escrow Agent shall disburse Escrow Shares in accordance with the joint written instructions of XFM and Paradigm given at any time.  Without limiting the generality of the foregoing, XFM and Paradigm may deliver a joint written instruction (reasonably satisfactory to the Escrow Agent) directing the Escrow Agent to make one or more deliveries of the Escrow Shares.

       (b)       In the event that XFM or any of its permitted assigns under the Indemnity Agreement, and their respective officers, directors, employees, owners, shareholders, agents or permitted successors-in-interest (collectively, the "XFM Indemnified Parties") shall have incurred a claim for indemnification pursuant to the terms of the Indemnity Agreement, XFM shall give written notice to Paradigm and the Escrow Agent of such claim for indemnification substantially in the form attached hereto as Exhibit A (the "Notice of Indemnification"), directing the release from escrow of the Escrow Shares.

              (i)       If Paradigm objects to the requested release from escrow, Paradigm shall, within 14 days after the receipt of the Notice of Indemnification, deliver to the Escrow Agent a notice of objection substantially in the form attached hereto as Exhibit B (the Paradigm's Notice of Objection"), together with proof that a copy thereof has been provided to XFM in accordance with Section 15 hereof, which specifies the total amount of Escrow Shares that Paradigm objects to releasing (the "Disputed Amount").  If the Escrow Agent receives a Paradigm Notice of Objection within said 14 days, the Escrow Agent shall release to XFM the amount of Escrow Shares requested by XFM in the Notice of Indemnification.  If the Escrow Agent does not receive Paradigm's Notice of Objection within said 14 days, the Escrow Agent shall release and deliver to XFM the amount of Escrow Shares requested in the Notice of Indemnification.

              (ii)       In the event that Paradigm files a Paradigm's Notice of Objection in the manner and within the time period prescribed herein, the Escrow Agent shall retain the subject portion of the Escrow Shares, which portion may include all the Escrow Shares, until otherwise directed by either (a) a joint written instruction (reasonably satisfactory to the Escrow Agent) from XFM and Paradigm or (b) a copy of a final and non-appealable arbitration award or judgment.

       Upon termination of this Escrow Agreement in accordance with the provisions of paragraph 12 below, the Escrow Agent shall disburse any and all Escrow Shares remaining in escrow on the termination date by delivering such Escrow Shares to Paradigm.

6.       Escrow Period.

       The term of this Agreement shall commence on the Effective Date and terminate as described in paragraph 12 herein. Notwithstanding the foregoing sentence, the term of this Agreement shall expire twelve (12) months after the Effective Date.  The period during which this Escrow Agreement shall be effective is herein referred to as the "Escrow Period."

7.       Escrow Agent.

       The duties and responsibilities of the Escrow Agent shall be limited to those expressly set forth in this Agreement.  No implied duties of the Escrow Agent shall be read into this Agreement and the Escrow Agent shall not be subject to, or obliged to recognize any other agreement between, or direction or instruction of, any or all the parties hereto even though reference thereto may be made herein.

       (a)       In the event all or any part of the Escrow Shares shall be attached, garnished or levied upon pursuant to any court order, or the delivery thereof shall be stayed or enjoined by a court order, or any other order, judgment or decree shall be made or entered by any court affecting the Escrow Shares, or any part thereof, or any act of the Escrow Agent, the Escrow Agent is hereby expressly authorized to obey and comply with all final writs, orders, judgments or decrees so entered or issued by any court; and, if the Escrow Agent obeys or complies with such writ, order, judgment or decree, it shall not be liable to Paradigm or XFM or to any other person by reason of such compliance.

       (b)       The Escrow Agent shall not be liable to anyone for any damages, losses or expenses incurred as a result of any act or omission of the Escrow Agent. The Escrow Agent shall not incur any such liability with respect to (i) any action taken or omitted in good faith upon the advice of counsel for the Escrow Agent given with respect to any question relating to the duties and responsibilities of the Escrow Agent under this Agreement or (ii) any action taken or omitted in reliance upon any instrument, including any written notice or instruction provided for herein, not only as to its due execution by an authorized person as to the validity and effectiveness of such instrument, but also as to the truth and accuracy of any information contained therein that the Escrow Agent shall in good faith believe to be genuine, to have been signed by a proper person or persons and to conform to the provisions of this Agreement.

       (c)       The Escrow Agent shall not be responsible for the sufficiency or accuracy, or the form, execution, validity or genuineness, of documents received hereunder, or for any description therein, nor shall it be responsible or liable in any respect on account of the identity, authority or rights of any person executing or delivering or purporting to execute or deliver any such document or this Agreement, or on account of or by reason of forgeries, false representations, or the exercise of its discretion in any particular manner, nor shall the Escrow Agent be liable for any mistake of fact or of law or any error of judgment, or for any act or omission, except as a result of its gross negligence or willful malfeasance.  The Escrow Agent is not authorized and shall not disclose the name, address, or security positions of the parties or the securities held hereunder in response to requests concerning shareholder communications under Section 14 of the Exchange Act, the rules and regulations thereunder, and any similar statute, regulation, or rule in effect from time to time. Under no circumstances shall the Escrow Agent be liable for any general or consequential damages or damages caused, in whole or in part, by the action or inaction of Paradigm or XFM or any of their respective agents or employees.  The Escrow Agent shall not be liable for any damage, loss, liability, or delay caused by accidents, strikes, fire, flood, war, riot, equipment breakdown, electrical or mechanical failure, acts of God or any cause which is reasonably unavoidable or beyond its reasonable control.

       (d)       The Escrow Agent may consult with legal counsel of its own choosing and shall be fully protected in acting or refraining from acting in good faith and in accordance with the opinion of such counsel.

       (e)       In the event of a dispute between the parties hereto sufficient in the discretion of the Escrow Agent to justify its doing so, the Escrow Agent shall be entitled to tender the Escrow Shares into the registry or custody of any court of competent jurisdiction, to initiate such legal proceedings as it deems appropriate, and thereupon to be discharged from all further duties and liabilities under this Agreement.  Any such legal action may be brought in any such court as the Escrow Agent shall determine to have jurisdiction over the Escrow Shares.  The filing of any such legal proceedings shall not deprive the Escrow Agent of its compensation hereunder earned prior to such filing.

       (f)       The Escrow Agent shall be under no duty to take any legal action in connection with this Agreement or towards its enforcement, or to appear in, prosecute or defend any action or legal proceeding that would result in or might cause it to incur any costs, expenses, losses or liability, unless and until it shall be indemnified with respect thereto in accordance with Section 8 of this Agreement.

       (g)       Any other controversy or claim arising out of or relating to this Agreement, or the breach of the same, shall be settled through consultation and negotiation in good faith and a spirit of mutual cooperation.  However, if those attempts fail, each of the parties agrees that any dispute or controversy arising out of or in connection with this Agreement or any alleged breach hereof shall be settled by arbitration in Chicago, Illinois, pursuant to the Commercial Arbitration Rules of the AAA.  If Paradigm and XFM cannot jointly select a single arbitrator to determine the matter, one arbitrator shall be chosen by each of Paradigm and XFM (or, if a party fails to make a choice, by the AAA on behalf of such party) and the two arbitrators so chosen will select a third (or, if they fail to make a choice, by the AAA).  The decision of the single arbitrator jointly selected by Paradigm and XFM, or, if three arbitrators are selected, the decision of any two of them will be final and binding upon the parties and the judgment of a court of competent jurisdiction may be entered thereon.  The arbitrator or arbitrators shall award the costs and expenses of the arbitration, including reasonable attorneys' fees, disbursements, arbitration expenses, arbitrators' fees and the administrative fee of the AAA, to the prevailing party as shall be determined by the arbitrator or arbitrators.

8.       The Escrow Agent's Fees.

       All fees and expenses of the Escrow Agent shall be as set forth on Exhibit A attached hereto and incorporated herein and shall be paid by Paradigm.

9.       Indemnification of the Escrow Agent.

       XFM and Paradigm each agrees, jointly and severally, to indemnify the Escrow Agent and hold it harmless against any losses, claims, damages, liabilities and/or expenses, including reasonable costs of investigation and fees and expenses of independent counsel and disbursements (collectively, the "Escrow Agent Losses") which may be imposed upon the Escrow Agent or incurred by it in connection with the performance of its duties hereunder, including any litigation arising from this Escrow Agreement or involving its subject matter, except for Escrow Agent Losses incurred by the Escrow Agent resulting from its own gross negligence or willful misconduct.  In so agreeing to indemnify and hold harmless the Escrow Agent, as among themselves, Paradigm on the one hand, and XFM on the other, intend hereby to share equally (50% to Paradigm and 50% to XFM) all amounts required to be paid pursuant to this Section 9.  This indemnification shall survive the termination or the resignation or removal of the Escrow Agent.

10.       Resignation of the Escrow Agent.

       It is understood that the Escrow Agent reserves the right to resign as Escrow Agent at any time by giving written notice of its resignation, specifying the effective date thereof, to Paradigm and XFM.  Within thirty (30) days after receiving the aforesaid notice, Paradigm and XFM shall appoint a successor Escrow Agent to which the Escrow Agent may distribute the property then held hereunder, less its fees, costs and expenses (including counsel fees and expenses) which may remain unpaid at that time.  If a successor Escrow Agent has not been appointed and has not accepted such appointment by the end of such thirty (30) day period, the Escrow Agent may apply to a court of competent jurisdiction for the appointment of a successor Escrow Agent and the fees, costs and expenses (including reasonable counsel fees and expenses) which it incurs in connection with such a proceeding shall be paid by Paradigm.

11.       Amendment.

       This Escrow Agreement may be amended by and upon written notice to the Escrow Agent at any time given jointly by Paradigm and XFM, but the duties or powers or responsibilities of the Escrow Agent may not be increased without its consent.  However, any successor to the business of Escrow Agent whether by reorganization or otherwise, will act with like effect as though originally named.

12.       Termination.

       This Escrow Agreement may be terminated at any time upon ten (10) calendar days' notice by an instrument executed by XFM and Paradigm and delivered to the Escrow Agent.  This Escrow Agreement shall thereupon terminate on the date specified in such notice or, if no date is specified, on the tenth business day following receipt thereof by the Escrow Agent.  Such notice shall specify the disposition by the Escrow Agent of the Escrow Shares.  This Escrow Agreement shall also terminate on the date that the Escrow Shares have been released according to the terms hereof, or upon termination of the Indemnity Agreement, whichever occurs first.

13.       Certain Corporate Matters.

       Paradigm hereby appoints the following persons to serve as authorized signatories of Paradigm hereunder and to give any instruction contemplated hereby.  The signature set forth opposite each person's name is his genuine signature.

	
Name
	
Signature
	 
	
Mark Haugejorde
	
_______________________________
	 

Each of Paradigm and XFM may add additional authorized signatories, or revoke the authority of the above signatories, by notice to the other and to the Escrow Agent

14.       Miscellaneous.

       (a)       This Escrow Agreement is binding upon, and shall inure to the benefit of, and be enforceable by the respective beneficiaries, representatives, successors and assigns of the parties hereto.

       (b)       Other than the Merger Agreement, this Escrow Agreement contains the entire understanding of the parties with respect to the subject matter hereof.  Nothing herein shall limit or affect the rights of the parties under the Merger Agreement.

       (c)       THIS ESCROW AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS.

       (d)       This Escrow Agreement, and any of the notices issued pursuant hereto, may be executed simultaneously in one or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.

       (e)       Article headings contained herein are for reference purposes only and shall not in any way affect the meaning or interpretation of this Escrow Agreement.

15.       Notices.

       All notices provided for hereunder shall be in writing and shall be deemed to be given:  (a) when delivered to the individual, or to an officer of the company, to which the notice is directed; or (b) three days after the same has been deposited in the United States mail sent Certified or Registered mail with Return Receipt Requested, postage prepaid and addressed as provided in this paragraph; or (c) when delivered by an overnight delivery service (including Federal Express or United States Express Mail) with receipt acknowledged and with all charges prepaid by the sender addressed as provided in this paragraph. Notices shall be directed as follows:

       if to XFM:

       XFormity, Inc.

       14333 Proton Drive

       Dallas, Texas 75244

       Attention: Mark Haugejorde, President

       With copy to:

       Matt Hutchins, Esq.

       Andrews Kurth, LLP

       1717 Main Street

       Suite 3700

       Dallas, Texas 75201

       Fax: (214) 659-4401

       if to Paradigm:

       Paradigm Group II, LLC

       3000 Dundee Road

       Suite 105

       Northbrook, Illinois  60062

       Attention: Sheldon Drobny, President

       if to the Escrow Agent:

       Clifford L. Neuman, P.C. 

       1507 Pine Street

       Boulder, Colorado 80303

       If the date on which any action, calculation or notice required or permitted to be taken, made or given hereunder is other than a business day, then such action, calculation or notice, as the case may be, may be taken, made or given on the next succeeding business day.

(Signature Page to Follow)

       IN WITNESS WHEREOF, this Escrow Agreement has been duly executed and delivered by Paradigm and the duly authorized officers of XFM, and the Escrow Agent, on the date first above written.

	
	
PARADIGM GROUP II, LLC and 

PARADIGM MILLENNIUM FUND, L.P.

	 	
By: /s/ Sheldon Drobny                          

Printed Name:  Sheldon Drobny

Title:  Managing Member

	 	
XFORMITY, INC.

	 	
By: /s/ Mark Haugejorde                   

Name:  Mark Haugjorde

Title:  President

	 	
ESCROW AGENT:

	 	
By:  /s/ Clifford L. Neuman               

Clifford L. Neuman, P.C., Escrow Agent

 

EXHIBIT A

[DATE]

[NAME OF ESCROW AGENT]

Attention:_____________

Dear__________________:

This Notice is being delivered to you pursuant to paragraph 4(b)(i) of the Escrow Agreement (the "Escrow Agreement") dated as of ___________, 2004 among the undersigned, Seller and _________________________________, as Escrow Agent (the "Escrow Agent").  Capitalized terms used herein shall have the meaning assigned to them in the Escrow Agreement unless otherwise defined herein.

Please be advised that the undersigned is entitled to $_______________ of indemnification payments pursuant to paragraph 5(b) of the Escrow Agreement as a result of [SPECIFIC OCCURRENCE WHICH HAS RESULTED IN REQUIREMENT OF INDEMNIFICATION.]  Accordingly, the undersigned hereby authorizes and directs you to disburse Escrow Shares having a Market Value of $______________ to the undersigned in accordance with the terms of the Escrow Agreement unless you receive a contrary notice from Seller pursuant to Section 5(b) of the Escrow Agreement.

                                                  
       Sincerely,

                                                  
       [__________________________________]

                                                  
       By___________________________________

                                                  
                Name:

                                                  
                Title:

EXHIBIT B

[DATE]

[NAME OF ESCROW AGENT]

Attention:________________

Dear:_____________________

This Notice is being delivered to you pursuant to paragraph 5(b) of the Escrow Agreement (the "Escrow Agreement") dated as of ____________, 2004 by and among the undersigned, Buyer and _______________________________, as Escrow Agent (the "Escrow Agent").  Capitalized terms used herein shall have the meaning assigned to them in the Escrow Agreement unless otherwise defined herein.

Please be advised that the undersigned disputes the Notice of Indemnification dated ___________________, a copy of which was received by the undersigned on ______________.  The total Disputed Amount is $__________________.

Accordingly, the undersigned direct the Escrow Agent to continue to hold the Disputed Amount, subject to the terms and provisions of the Escrow Agreement.  The undersigned authorizes the release to Buyer of the amount requested in the Notice of Indemnification other than the Disputed Amount in accordance with paragraph 5(b) of the Escrow Agreement.

                                                  
              Sincerely,

                                                  
              [__________________________________]

                                                  
              By___________________________________

                                                  
                     Name:

                                                  
                     Title:EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (this "Agreement"), effective as of the 27th day of  September, 2004, is by and among XFORMITY, INC., a Texas corporation (the "Company"), with offices at 14333 Proton Drive, Dallas, Texas 75244; and JACK RABIN, an individual and a resident of the State of Texas, with an address at c/o XFormity, Inc., 14333 Proton Drive, Dallas, Texas  75244 (the "Executive").

WITNESSETH:

WHEREAS, in recognition of the valuable nature of Executive's management and operational capabilities to the business of Company, Company desires to enter into this Agreement with Executive to be effective as of the date above first written (the "Effective Date"); and

WHEREAS, Executive desires to enter into this Agreement with Company and to be employed by Company in the capacity, for the period, and on the terms and conditions set forth herein;

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

	Employment.

	Company hereby agrees to employ Executive, and Executive hereby agrees to serve the Company, as Chief Financial Officer of the Company, and, subject to the direction of the Board of Directors of Company, to perform such duties, functions and responsibilities commensurate with and appropriate to such positions, and as the same may be from time to time set forth in the By-laws of the Company or otherwise delegated to Executive by the Board of Directors of Company or their designates.  As of the Effective Date of this Agreement, said duties, responsibilities and functions of Executive are set forth in Schedule A attached hereto and incorporated herein  by reference for all purposes.

	Executive shall receive from Company the necessary power and authority to carry out and discharge all such duties, functions and responsibilities.

	Executive shall be an employee of the Company and shall devote his entire business time and attention to the performance, discharge and fulfillment of all such duties, functions and responsibilities.

	Executive will perform his services in the State of Illinois, or at such other location as may be mutually agreed upon by the Board of Directors of Company and Executive.

	Term of Employment.  

	Subject to the provisions for termination as hereinafter provided, the term of employment under this Agreement shall be effective as of the Effective Date and shall continue for a period of one (1) year following the Effective Date (the "Expiration Date"); provided, however, that beginning with the first anniversary of the term of this Agreement, and on each subsequent anniversary date of the term thereafter (each a "Renewal Date"), the term of this Agreement shall automatically be extended for an additional one year so that on each Renewal Date the then remaining, unexpired term of this Agreement shall be one (1) year, unless either party gives the other written notice of non-renewal at least ninety (90) days prior to any such Renewal Date.

	This Agreement shall terminate prior to the expiration of the initial term or any renewal term of this Agreement upon the earliest to occur of the following:

	the death or permanent disability (as defined in Company's permanent disability insurance program, if any, then in effect covering Executive or if no permanent disability program is then in effect, in the opinion of the Executive exercised in good faith) of Executive; provided, however, that the Company shall remain responsible for and shall satisfy its obligations under its life and permanent disability insurance programs then in effect covering Executive as are referred to in Schedule B attached hereto and incorporated herein by reference for all purposes; and further provided, however, that in addition to Company's obligations to Executive under its life and permanent disability insurance programs then in effect covering Executive, the Company shall pay (a) to any beneficiary or beneficiaries designated  by the Executive or, if none, (b) to his estate or other legal representative in the event of Executive's death a pro rata portion of the Annual Base Salary to the last day of the month in which his death occurs;

	as permitted by Section 6 hereof by Executive for "Good Reason" (as hereinafter defined) pursuant to Section 6;

	as permitted by Section 7 hereof by Executive upon a "Change of Control of the Company" (as hereinafter defined pursuant to Section 7); or

	as permitted by Section 7 hereof, by Company for "Cause" (as hereinafter defined) pursuant to Section 7.

Sections 6, 7, 8, and 11 shall survive the termination of this Agreement.

	Compensation.

	In consideration for all of the services to be rendered by Executive to the Company, the Company shall pay Executive an initial monthly base salary ("Monthly Base Salary") of an amount equal to One Hundred Twenty Thousand and 00/100 Dollars ($120,000.00).  The Monthly Base Salary may be increased as approved by the Board of Directors or any authorized committee thereof in its sole discretion (the "Compensation Committee") (such annual base salary, as it may be increased from time to time hereafter, being herein referred to as the "Annual Base Salary").  

	The Monthly Base Salary shall be paid to Executive in consistent periodic installments throughout the year in accordance with Company's normal and customary pay policy for executive officers of Company.

	In addition to the Monthly Base Salary to be paid pursuant to subsection 3(a) of this Agreement, during the term of this Agreement or any renewal or extension, the  Executive may be eligible for annual bonuses as may be approved by the Board of Directors, subject to their sole discretion.

	The amount of the Annual Base Salary and any other amounts payable pursuant to this Agreement are gross amounts due by Company to Executive hereunder, and Company shall have the right to deduct therefrom all taxes and other amounts which may be required to be deducted or withheld by law (including, but not limited to, federal income tax withholding and social security payments), whether such law is now in effect or becomes effective after the date of this Agreement.

	In addition to the foregoing, in the event that Company grants equity options or similar incentives to its officers and employees from time to time hereafter, Executive shall be allowed to participate in any such future equity options or similar incentives on such terms as are approved by the Board of Directors of Company or the Compensation Committee and are offered to other executive officers of Company.

	Executive Benefits and Business Expenses.

	During the term hereof, Executive shall be entitled to participate in such employee benefit plans and programs maintained by the Company for the benefit of its executive officers, and to participate in applicable new or amended programs, including, but not limited to, medical, dental, health, life, accident and disability insurance programs, savings for retirement plans, bonus, stock option plans, and any other incentive compensation plans.

	The Company shall cover all costs of domestic and international business travel.

	Executive shall be reimbursed for any necessary business expenses reasonably incurred by Executive in carrying out Executive's duties, functions and responsibilities hereunder, including, without limitation, mobile telecommunications, taxi fares, parking and toll charges, and the like.

	Vacation and Sick Leave Time.

Executive shall be entitled to annual sick leave time pursuant to the plan or policy adopted  by the Company, or as hereafter may be amended, available for other executive officers of Company. Commencing on the Effective Date, the Executive shall be entitled to annual vacation time equal to no less than four (4) weeks paid vacation every year throughout the term of this Agreement.  

	Termination.  In the event of (a) termination by the Company or any successor of the Executive's employment hereunder without Cause, or (b) Executive terminates his employment for Good Reason, then Executive shall be entitled to receive upon execution and delivery to the Company of a general release in a form mutually acceptable to the Company and the Executive:  (i) an amount (the "Termination Amount") equal to (x) twelve (12) months of the then Annual Base Salary, payable monthly; (ii) Executive's outstanding options for membership interests and any options subject to purchase agreements or performance benchmarks shall accelerate and fully vest; and (iii) any and all deferred compensation, including, without limitation, accounts under any Company deferred compensation plans or arrangements shall accelerate and fully vest, including as to any amounts contributed by the Company for the year in which the termination occurs.

For the purpose of this Agreement, "Good Reason" is defined as (a) the material reduction of the Executive's title, duties, authority or responsibilities, relative to the Executive's title, duties, authority or responsibilities as in effect immediately prior to such reduction; (b) a reduction by the Company in the Annual Base Salary of the Executive as in effect immediately prior to such reduction; (c) any breach of this Agreement by the Company; or (d) any act or set of facts or circumstances which would, under Texas case law or statute, constitute a constructive termination of the Executive.

	Change of Control.  In the event of a Change of Control of the Company, at the option of the Executive, (a) the term of employment shall terminate, (b) Executive's outstanding options for membership interests and any options subject to purchase agreements or performance benchmarks shall accelerate and fully vest, and (c) the Company shall pay Executive, in a lump sum, an amount equal to the Termination Amount upon execution and delivery of a general release to the Company in a form mutually acceptable to the Company and the Executive. 

For this purpose, "Change of Control of the Company" is defined as:

	Any "person" (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended) (except Paradigm Millennium Fund, LP or Paradigm Group II, LLC) or becomes the "beneficial owner" (as defined in Rule 13d-3 under said Act), directly or indirectly, of securities of the Company representing 50% or more of the total voting power represented by the Company's then outstanding voting securities; or

	The consummation of a merger or consolidation of the Company with any other entity other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) at least fifty percent (50%) of the total voting power represented by the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation; or

	The consummation of the sale or disposition by the Company of all or substantially all of the Company's assets.

	Golden Parachute Gross-Up for Taxes.  In the event that the benefits provided for in this Agreement or otherwise payable to the Executive constitute "parachute payments" within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the "Code") or any successor provision and as a result are subject to the excise tax imposed by Section 4999 of the Code or any successor provision, then the Executive shall receive (a) a lump-sum cash payment from the Company sufficient to pay such excise tax, and (b) an additional lump-sum cash payment from the Company sufficient to pay the excise tax and all federal and state income taxes arising from the payments made by the Company to Executive pursuant to this sentence.  Unless the Company and the Executive otherwise agree in writing, the determination of Executive's tax liability arising from such taxes, and the amount required to be paid under this Section 8, shall be made in writing by the Accountants.  For purposes of making the calculations required by this Section 8, the Accountants may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of Sections 280G and 4999 of the Code or any successor provision.  The Company and the Executive shall furnish to the Accountants such information and documents as the Accountants may reasonably request in order to make a determination under this Section 8.  The Company shall bear all costs the Accountants may reasonably incur in connection with any calculations contemplated by this Section 8.

	Breach by Company; Nonexclusive Remedy.

	In the event of a material breach of this Agreement by the Company which remains uncured after written notice thereof by Executive to the Company and the expiration of thirty (30) days opportunity to cure such breach, the Company shall be obligated to pay Executive as liquidated damages, and not as a penalty, in a lump sum or on an annuity basis, at Executive's sole option, an amount equal to the Termination Amount.  It is acknowledged and agreed to by the parties hereto that because actual damages would be difficult to ascertain in the event that Company breaches this Agreement, the amount of liquidated damages provided for herein is reasonable and appropriate to remedy any such breach and to compensate Executive for any damages incurred by him hereunder.

	In the event that Company, or its successor or assigns, fails to perform or breaches this Agreement in any respect and Executive shall file any judicial action for enforcement of this Agreement and successfully recovers compensation or damages, Executive shall be entitled to recover an additional amount as interest at ten percent (10%) per annum on the amount owed from the date such amount was due and payable, together with all actual expenses and attorneys' fees reasonably incurred by Executive in obtaining legal advice regarding his rights under this Agreement and in prosecuting and disposing of such action.

	The provisions of this Section 9 shall not constitute the exclusive remedy of Executive for Company's breach of this Agreement.

	Breach by Executive.

	In the event that Executive materially breaches this Agreement, Company may terminate this Agreement, at the option of Company, (i) effective thirty (30) days after Company gives written notice of such termination to Executive, or (ii) effective upon payment of thirty (30) days' pay in lieu of notice; provided, however, that the Company shall pay to Executive, on the date of such termination, all cash and non-cash compensation then accrued under this Agreement to the date of such termination.  A termination under  this Section 10(a) shall be deemed a termination for Cause (as hereinafter defined).

	A material breach of this Agreement by Executive, shall be deemed to have occurred upon the happening of any of the following events (for "Cause"), to-wit:

	Executive's conviction of any felony offense during the term of this Agreement; or

	Executive's breach of any of Executive's material obligations hereunder, including, without limitation, Executive's obligations under Sections 11 and 12 hereof; or

	Executive's refusal to abide by or comply with the reasonable and lawful directives of the Board of the Directors of the Company that are consistent with  the duties of similarly-situated senior executives or are otherwise required under this Agreement; or

	Executive's dishonesty, fraud, or willful misconduct with respect to the business or affairs of the Company; or 

	intentional damage to any material property of the Company.  In each such event listed in (ii) through (v) above, the Company shall give the Executive notice thereof which shall specify in reasonable detail the circumstances constituting Cause, and there shall be no Cause with respect to any such circumstances if cured by the Executive within thirty (30) days after such notice.

In the event Company elects to terminate Executive pursuant to this Section 10, Company shall give written notice to Executive specifically stating each fact and reason, which is the basis for such termination. Following such termination, Company shall have no further obligation to Executive under this Agreement except for accrued and unpaid cash and non-cash compensation payments then due and owing to Executive.

	Confidentiality, Proprietary Information and Trade Secrets.

	During the term of this Agreement and for a period of three (3) years after the termination of this Agreement, Executive shall not disclose, communicate or divulge to any person, firm, association or company, other than the Company, any material referred to in Subsections 11(f), (g) and (h) hereof, or any proprietary information regarding the business methods, business, policies, procedures, techniques, research or development projects or results, trade secrets or other knowledge or processes of, or developed by, Company or any names and addresses of customers or clients or any data on or relating to past, present or prospective customers or clients or any other confidential information relating to or dealing with the business operations or activities of Company, made known to Executive or learned or acquired by Executive while employed by Company.

	During the term of this Agreement and for a period of one (1) year after the termination of this Agreement, Executive shall not, directly or indirectly, in any geographic area served by Company or its affiliates induce or attempt to influence any employee of Company to terminate his or her employment with Company or to hire any such employee of Company, without the Company's prior written consent.

	Executive covenants and agrees that Executive will not during the term of this Agreement and for a period of one (1) year following the termination of this Agreement for any reason, directly or indirectly, engage in any business or group of affiliated or unaffiliated businesses (other than Company) that engages in a business which is directly competitive with the business of the Company.

	Executive acknowledges and agrees that the restrictions contained in  Subsections 11(a), (b) and (c) (the "Restrictions"), in view of the nature of the business in which Company is engaged, are reasonable and necessary in order to protect the legitimate business interests of Company, and that any violation thereof would result in irreparable harm to Company, and Executive therefore further acknowledges and agrees that, in the event Executive violates, or threatens to violate, any of such Restrictions, Company shall be entitled to obtain from any court of competent jurisdiction, without the posting of any bond or other security, preliminary and permanent injunctive or equitable relief as well as damages and an equitable accounting of all earnings, profits and other benefits arising from such violation, which rights shall be cumulative and in addition to any other rights or remedies at law or in equity to which Company may be entitled.

	If any Restriction, or any part thereof, is determined in any judicial or administrative proceeding to be invalid or unenforceable, the remainder of the Restrictions shall not thereby be affected and shall be given full effect, without regard to the invalid provisions.

	If Executive violates any of the Restrictions, the restrictive period shall not run in favor of Executive from the time of the commencement of any such violation until such time as such violation shall be cured by Executive to the reasonable satisfaction of Company.

	It is recognized that Executive will have access to certain confidential information of Company and its affiliates, and that such information constitutes valuable, special and unique property of Company and its affiliates.  Executive shall not at any time during the term of this Agreement and for a period of two (2) years after the termination of this Agreement disclose any such confidential information to any party for any reason or purpose except as may be made in the normal cause of business of Company and for its benefit.

	For purposes of this Agreement, Confidential Information shall include the Company's trade secrets and proprietary information, techniques, sketches, drawings, know-how, processes, apparatus, equipment, algorithms, software programs, software source documents and formulae related to the current, future and proposed products and services of the Company, and/or the Company's parents, subsidiaries, customers and/or vendors, whether delivered in written (or other tangible) form or verbally, and includes, without limitation, information concerning research, design details and specifications, financial data, procurement requirements, customer lists, business forecasts and purchasing, sales, merchandising, development and marketing plans, but shall exclude (i) confidential information that was in the public domain at the time it was communicated to the Executive; (ii) confidential information that enters the public domain subsequent to the time it was communicated to Executive through no fault of the Executive; or (iii) confidential information that was in Executive's possession free of any obligation of confidence at the time it was communicated to Executive.

	Representations and Warranties of Executive.  

Except for restrictions heretofore disclosed in writing by Executive to Company, Executive represents and warrants to Company that (a) there are no restrictions, agreements or understandings whatsoever to which Executive is a party which would prevent or make unlawful the execution or performance of this Agreement or his employment hereunder; (b) his execution of this Agreement and his employment hereunder shall not constitute a breach of any contract, agreement or understanding to which he is a party or by which he may be bound; and (c) he is free and able to execute and perform this Agreement in all respects.

	Successors.

	This Agreement shall inure to the benefit of and be binding upon Company and Executive.  This Agreement and the benefits and obligations of Company hereunder may be assigned by Company to any person acquiring all or substantially all of the assets or all of the issued and outstanding equity securities of the Company; provided, however, that the Company shall remain jointly and severally liable to Executive with such assignee for the fulfillment of Company's obligations under this Agreement, or to any corporation with which Company may be merged or consolidated.

	This Agreement shall inure to the benefit of and be binding upon Executive and Executive's executors, administrators, trustees, heirs and legal representatives.  Because Executive's duties, functions, responsibilities, and services hereunder are special, personal and unique in nature, Executive shall not transfer, sell or assign, by operation of law or otherwise, Executive's obligations under this Agreement.

	Waivers.  Neither the failure nor any delay on the part of either party hereto to exercise any right, remedy, power or privilege (collectively, "Right") under this Agreement shall operate as a waiver, abandonment or release thereof; nor shall any single or partial exercise of any Right preclude any other or further exercise of the same or of any other Right, nor shall any waiver of any Right with respect to any occurrence be construed as a waiver of such Right with respect to any other occurrence.

	Severability.  If any provision of this Agreement shall be held to be invalid or unenforceable, such invalidity or unenforceability shall not affect or impair the validity or enforceability of the remaining provisions of this Agreement, which provisions shall remain in full force and effect and the parties hereto shall continue to be bound thereby.

	Entire Agreement.  This Agreement contains the entire agreement between the parties relating to the subject matter hereof and supersedes all previous agreements and understandings between the parties, whether written or oral, with respect to the subject matter hereof.  This Agreement shall not be modified, altered or amended except by a writing executed by both parties.

	Notices.  Any notice or other communication provided for in this Agreement or contemplated hereby shall be sufficiently given if given in writing and delivered personally or by certified mail, return receipt requested, and addressed, in the case of the Company, to the Company at:

Jack Rabin

c/o XFormity, Inc.

14333 Proton Drive

Dallas, Texas  75244

and in the case of Executive, to the address set forth in the introductory paragraph.  Notice shall be effective when so delivered personally.  Either party may designate a different address by giving notice of change of address in the manner provided above.

	Construction of Agreement.  This Agreement shall be governed by, construed and enforced in accordance with the laws of the State of Texas.

(Signature Page to Follow)

IN WITNESS WHEREOF, the parties hereto have executed and delivered this Agreement on and as of the day and year above first written,

"Company"

XFORMITY, INC.

  a Texas corporation

By:

Printed Name: Mark Haugejorde

Title: President & CEO

"Executive"

JACK RABIN, an individual and resident of the State of Illinois

XML-GLOBAL TECHNOLOGIES, INC., a Colorado corporation, agreeing to be bound hereby, hereby executes and delivers this Agreement for the purpose of covenanting and agreeing to guarantee the performance of the Company's duties, responsibilities and obligations to the Executive hereunder.

XML-GLOBAL TECHNOLOGIES, INC.,

a Colorado corporation

By: _________________________________

Printed Name: _________________________

Title: ________________________________

Schedule A

to

Employment Agreement by

and among XFormity, Inc., as the Company,

and

Jack Rabin, as the Executive.

Description of Functions, Duties and Responsibilities of Executive

Under the direction and supervision of the President and CEO, Executive shall oversee and have the primary responsibility within the Company for all financial matters pertaining to the Company.

Schedule B

to

Employment Agreement

by and among XFormity, Inc., as the Company

and

Jack Rabin, as Executive

Executive Officer Benefits of Company

	Life insurance

	Medical insurance

	Dental insurance

	Directors and Officers Insurance

	Retirement Plan

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