Document:

ex10-23

 

EXHIBIT 10.23

BLUE ZONE INC. 1999 STOCK OPTION PLAN

NOTICE OF STOCK OPTION AWARD

			
	     Grantee’s Name and Address:	 	                                                                           

	
	
	
		 	                                                                           

	
	
	
	 	 	                                                                           

     You have been granted an option to purchase shares of Common Stock,
subject to the terms and conditions of this Notice of Stock Option Award (the
“Notice”), the Blue Zone Inc. 1999 Stock Option Plan, as amended from time to
time (the “Plan”) and the Stock Option Award Agreement (the “Option Agreement”)
attached hereto, as follows. Unless otherwise defined herein, the terms
defined in the Plan shall have the same defined meanings in this Notice.

			
	     Award Number	BZ-                                                                    
	
	
	
	     Date of Award	                                                                           
	 
	     Vesting Commencement Date	                                                                           
	 
	     Exercise Price per Share	$                                                                                                 
	 
	     Total Number of Shares of Common
Stock subject to the Option	                                                                           
	 
	     Total Exercise Price	$                                                                                                 
	 
	     Type of Option:	Non-Qualified Stock Option
	 
	     Expiration Date:	November 10, 2009
	 
	     Post-Termination Exercise Period*:	                                                                   Months
	 
	* for situations other than termination for cause, death and disability

     Vesting Schedule:

     Subject to Grantee’s Continuous Service and other limitations set forth in
this Notice, the Plan and the Option Agreement, the Option may be exercised, in
whole or in part, in accordance with the following schedule:

     25% of the Shares subject to the Option shall vest on the Vesting
Commencement Date, an additional 25% of the Shares subject to the Option shall
vest 12 months after the Vesting Commencement Date, an additional 25% of the
Shares subject to the Option shall vest 24 months after the Vesting
Commencement Date and the remaining Shares subject to the Option shall vest 36
months after the Vesting Commencement Date.

     During any authorized leave of absence, the vesting of the Option as
provided in this schedule shall cease after the leave of absence exceeds a
period of ninety (90) days. Vesting of the Option shall resume upon the
Grantee’s termination of the leave of absence and return to service to the
Company or a Related Entity.

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     In the event of the Grantee’s change in status from Employee to Consultant
or from an Employee whose customary employment is 20 hours or more per week to
an Employee whose customary employment is fewer than 20 hours per week, vesting
of the Option shall continue only to the extent determined by the Administrator
as of such change in status.

     In the event of termination of the Grantee’s Continuous Service for Cause,
the Grantee’s right to exercise the Option shall terminate concurrently with
the termination of the Grantee’s Continuous Service.

     IN WITNESS WHEREOF, the Company and the Grantee have executed this Notice
of Stock Option Award and agree that the Option is to be governed by the terms
and conditions of this Notice, the Plan, and the Option Agreement.

			
	 	Blue Zone Inc.,
	 	a Nevada corporation
	 
	 	By:	                                                                   
	 
	 	Title:	                                                                   

THE GRANTEE ACKNOWLEDGES AND AGREES THAT THE SHARES SUBJECT TO THE OPTION SHALL
VEST, IF AT ALL, ONLY DURING THE PERIOD OF THE GRANTEE’S CONTINUOUS SERVICE
(NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED THE OPTION OR ACQUIRING
SHARES HEREUNDER). THE GRANTEE FURTHER ACKNOWLEDGES AND AGREES THAT NOTHING IN
THIS NOTICE, THE OPTION AGREEMENT, OR THE PLAN SHALL CONFER UPON THE GRANTEE
ANY RIGHT WITH RESPECT TO FUTURE AWARDS OR CONTINUATION OF GRANTEE’S CONTINUOUS
SERVICE, NOR SHALL IT INTERFERE IN ANY WAY WITH THE GRANTEE’S RIGHT OR THE
RIGHT OF THE GRANTEE’S EMPLOYER TO TERMINATE GRANTEE’S CONTINUOUS SERVICE, WITH
OR WITHOUT CAUSE.

     The Grantee acknowledges receipt of a copy of the Plan and the Option
Agreement, and represents that he or she is familiar with the terms and
provisions thereof, and hereby accepts the Option subject to all of the terms
and provisions hereof and thereof. The Grantee has reviewed this Notice, the
Plan, and the Option Agreement in their entirety, has had an opportunity to
obtain the advice of counsel prior to executing this Notice, and fully
understands all provisions of this Notice, the Plan and the Option Agreement.
The Grantee hereby agrees that all disputes arising out of or relating to this
Notice, the Plan and the Option Agreement shall be resolved in accordance with
Section 12 of the Option Agreement. The Grantee further agrees to notify the
Company upon any change in the residence address indicated in this Notice.

	 	 	 
	Dated:                                                                   	 	
Signed:                                                                   
	 	 	Grantee

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Award Number: ___________

BLUE ZONE INC. 1999 STOCK OPTION PLAN

STOCK OPTION AWARD AGREEMENT

Grant of Option. Blue Zone Inc., a Nevada corporation (the “Company”), hereby
grants to the Grantee (the “Grantee”) named in the Notice of Stock Option Award
(the “Notice”), an option (the “Option”) to purchase the Total Number of Shares
of Common Stock subject to the Option (the “Shares”) set forth in the Notice,
at the Exercise Price per Share set forth in the Notice (the “Exercise Price”)
subject to the terms and provisions of the Notice, this Stock Option Award
Agreement (the “Option Agreement”) and the Company’s 1999 Stock Option Plan, as
amended from time to time (the “Plan”), which are incorporated herein by
reference. Unless otherwise defined herein, the terms defined in the Plan
shall have the same defined meanings in this Option Agreement. The Option
shall be a Non-Qualified Stock Option.

Exercise of Option.

     (a)     Right to Exercise. The Option shall be exercisable during its term in
accordance with the Vesting Schedule set out in the Notice and with the
applicable provisions of the Plan and this Option Agreement. The Option shall
be subject to the provisions of Section 11 of the Plan relating to the
termination of the Option in the event of a Corporate Transaction or Related
Entity Disposition. No partial exercise of the Option may be for less than the
lesser of five percent (5%) of the total number of Shares subject to the Option
or the remaining number of Shares subject to the Option. In no event shall the
Company issue fractional Shares.

     (b)     Method of Exercise. The Option shall be exercisable only by delivery
of an Exercise Notice (attached as Exhibit A) which shall state the election to
exercise the Option, the whole number of Shares in respect of which the Option
is being exercised, such other representations and agreements as to the
holder’s investment intent with respect to such Shares and such other
provisions as may be required by the Administrator. The Exercise Notice shall
be signed by the Grantee and shall be delivered in person, by certified mail,
or by such other method as determined from time to time by the Administrator to
the Company accompanied by payment of the Exercise Price. The Option shall be
deemed to be exercised upon receipt by the Company of such written notice
accompanied by the Exercise Price, which, to the extent selected, shall be
deemed to be satisfied by use of the broker-dealer sale and remittance
procedure to pay the Exercise Price provided in Section 3(c), below.

     (c)     Taxes. No Shares will be delivered to the Grantee or other person
pursuant to the exercise of the Option until the Grantee or other person has
made arrangements acceptable to the Administrator for the satisfaction of
applicable income tax, employment tax, and social security tax withholding
obligations. Upon exercise of the Option, the Company or the Grantee’s
employer may offset or withhold (from any amount owed by the Company or the
Grantee’s employer to the Grantee) or collect from the Grantee or other person
an amount sufficient to satisfy such tax obligations and/or the employer’s
withholding obligations.

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Method of Payment. Payment of the Exercise Price shall be by any of the
following, or a combination thereof, at the election of the Grantee; provided,
however, that such exercise method does not then violate any Applicable Law :

     (d)     cash, payable in U.S. dollars;

     (e)     check, payable in U.S. dollars;

     (f)     payment through a broker-dealer sale and remittance procedure, if
available, pursuant to which the Grantee (i) shall provide written
instructions to a Company designated brokerage firm to effect the immediate
sale of some or all of the purchased Shares and remit to the Company, out of
the sale proceeds available on the settlement date, sufficient funds to cover
the aggregate exercise price payable for the purchased Shares and (ii) shall
provide written directives to the Company to deliver the certificates for the
purchased Shares directly to such brokerage firm in order to complete the sale
transaction.

Restrictions on Exercise. The Option may not be exercised if the issuance of
the Shares subject to the Option upon such exercise would constitute a
violation of any Applicable Laws.

Termination or Change of Continuous Service. In the event the Grantee’s
Continuous Service terminates, other than for Cause, the Grantee may, to the
extent otherwise so entitled at the date of such termination (the “Termination
Date”), exercise the Option during the Post-Termination Exercise Period. In
the event of termination of the Grantee’s Continuous Service for Cause, the
Grantee’s right to exercise the Option shall, except as otherwise determined by
the Administrator, terminate concurrently with the termination of the Grantee’s
Continuous Service. In no event shall the Option be exercised later than the
Expiration Date set forth in the Notice. In the event of the Grantee’s change
in status from Employee, Director or Consultant to any other status of
Employee, Director or Consultant, the Option shall remain in effect and, except
to the extent otherwise determined by the Administrator, continue to vest.
Except as provided in Sections 6 and 7 below, to the extent that the Grantee is
not entitled to exercise the Option on the Termination Date, or if the Grantee
does not exercise the Option within the Post-Termination Exercise Period, the
Option shall terminate.

Disability of Grantee. In the event the Grantee’s Continuous Service
terminates as a result of his or her Disability, the Grantee may, but only
within twelve (12) months from the Termination Date (and in no event later than
the Expiration Date), exercise the Option to the extent he or she was otherwise
entitled to exercise it on the Termination Date. To the extent that the
Grantee is not entitled to exercise the Option on the Termination Date, or if
the Grantee does not exercise the Option to the extent so entitled within the
time specified herein, the Option shall terminate.

Death of Grantee. In the event of the termination of the Grantee’s Continuous
Service as a result of his or her death, or in the event of the Grantee’s death
during the Post-Termination Exercise Period or during the twelve (12) month
period following the Grantee’s Termination of Continuous Service as a result of
his or her Disability, the Grantee’s estate may exercise the Option, but only
to the extent the Grantee could exercise the Option at the date of termination,
within twelve (12) months from the date of death (but in no event later than
the Expiration Date). To the extent that the Grantee is not entitled to
exercise the Option on the date of death, or if the

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Option is not exercised to the extent so entitled within the time specified
herein, the Option shall terminate.

Transferability of Option. The Option may not be sold, pledged, assigned,
hypothecated, transferred, or disposed of in any manner and may be exercised
during the Grantee’s lifetime only by the Grantee, provided that upon the death
of the Grantee the Option may be exercised by the Grantee’s estate.

Term of Option. The Option may be exercised no later than the Expiration Date
set forth in the Notice or such earlier date as otherwise provided herein.

Entire Agreement: Governing Law. The Notice, the Plan and this Option
Agreement constitute the entire agreement of the parties with respect to the
subject matter hereof and supersede in their entirety all prior undertakings
and agreements of the Company and the Grantee with respect to the subject
matter hereof, and may not be modified adversely to the Grantee’s interest
except by means of a writing signed by the Company and the Grantee. Nothing in
the Notice, the Plan and this Option Agreement (except as expressly provided
therein) is intended to confer any rights or remedies on any persons other than
the parties. The Notice, the Plan and this Option Agreement are to be
construed in accordance with and governed by the internal laws of the State of
New York without giving effect to any choice of law or rule that would cause
the application of the laws of any jurisdiction other than the internal laws of
the State of New York to the rights and duties of the parties. Should any
provision of the Notice, the Plan or this Option Agreement be determined by a
court of law to be illegal or unenforceable, such provision shall be enforced
to the fullest extent allowed by law and the other provisions shall
nevertheless remain effective and shall remain enforceable.

Headings. The captions used in the Notice and this Option Agreement are
inserted for convenience and shall not be deemed a part of the Option for
construction or interpretation.

Dispute Resolution The provisions of this Section 12 shall be the exclusive
means of resolving disputes arising out of or relating to the Notice, the Plan
and this Option Agreement. The Company, the Grantee, and the Grantee’s
assignees pursuant to Section 8 (the “parties”) shall attempt in good faith to
resolve any disputes arising out of or relating to the Notice, the Plan and
this Option Agreement by negotiation between individuals who have authority to
settle the controversy. Negotiations shall be commenced by either party by
notice of a written statement of the party’s position and the name and title of
the individual who will represent the party. Within thirty (30) days of the
written notification, the parties shall meet at a mutually acceptable time and
place, and thereafter as often as they reasonably deem necessary, to resolve
the dispute. If the dispute has not been resolved by negotiation, the parties
agree that any suit, action, or proceeding arising out of or relating to the
Notice, the Plan or this Option Agreement shall be brought in the United States
District Court for the Southern District of New York (or should such court lack
jurisdiction to hear such action, suit or proceeding, in a New York State court
in the County of New York) and that the parties shall submit to the
jurisdiction of such court. The parties irrevocably waive, to the fullest
extent permitted by law, any objection the party may have to the laying of
venue for any such suit, action or proceeding brought in such court. THE
PARTIES ALSO EXPRESSLY WAIVE ANY RIGHT THEY HAVE OR MAY HAVE TO A JURY TRIAL OF
ANY SUCH SUIT, ACTION OR PROCEEDING. If any one or more

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provisions of this Section 12 shall for any reason be held invalid or
unenforceable, it is the specific intent of the parties that such provisions
shall be modified to the minimum extent necessary to make it or its application
valid and enforceable.

Rights as Stockholder. Until the stock certificate evidencing such Shares is
issued (as evidenced by the appropriate entry on the books of the Company or of
a duly authorized transfer agent of the Company), no right to vote or receive
dividends or any other rights as a stockholder shall exist with respect to the
Shares, notwithstanding the exercise of the Option. The Company shall issue
(or cause to be issued) such stock certificate promptly after the Option is
exercised. No adjustment will be made for a dividend or other right for which
the record date is prior to the date the stock certificate is issued, except as
provided in Section 10 of the Plan.

Grantee’s Representations. The Grantee understands that neither the granting
of the Option nor the Shares which may be obtained upon exercise of the Option
have been registered under the Securities Act of 1933, as amended or any United
States securities laws. In the event the Shares purchasable pursuant to the
exercise of the Option have not been registered under the Securities Act of
1933, as amended, at the time the Option is exercised, the Grantee shall, if
requested by the Company, concurrently with the exercise of all or any portion
of the Option, execute and deliver to the Company an “investment representation
statement” in a form acceptable to the Company. The Grantee understands and
agrees that, if the Shares purchasable pursuant to the exercise of the Option
have not been registered under the Securities Act of 1933 , as amended, at the
time the Option is exercised, the Company shall cause the legends set forth
below or legends substantially equivalent thereto, to be placed upon any
certificate(s) evidencing ownership of the Shares together with any other
legends that may be required by the Company or by state or federal securities
laws:

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933 (THE “ACT”) OR ANY STATE SECURITIES LAWS AND MAY NOT BE OFFERED,
SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL
REGISTERED UNDER THE ACT OR, IN THE OPINION OF COUNSEL SATISFACTORY TO THE
ISSUER OF THESE SECURITIES, SUCH OFFER, SALE OR TRANSFER, PLEDGE OR
HYPOTHECATION IS IN COMPLIANCE THEREWITH.

Lock-up Agreement. The Grantee, if requested by the Company and the lead
underwriter of any public offering of the Common Stock or other securities of
the Company (the “Lead Underwriter”), hereby irrevocably agrees not to sell,
contract to sell, grant any option to purchase, transfer the economic risk of
ownership in, make any short sale of, pledge or otherwise transfer or dispose
of any interest in any Common Stock or any securities convertible into or
exchangeable or exercisable for or any other rights to purchase or acquire
Common Stock (except Common Stock included in such public offering or acquired
on the public market after such offering) during the 180-day period following
the effective date of a registration statement of the Company filed under the
Securities Act of 1933, as amended, or such shorter period of time as the Lead
Underwriter shall specify. The Grantee further agrees to sign such documents
as may be requested by the Lead Underwriter to effect the foregoing and agrees
that the Company may impose stop-transfer instructions with respect to such
Common Stock subject until the end of such period. The Company and the Grantee
acknowledge that each Lead

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Underwriter of a public offering of the Company’s Stock or other securities,
during the period of such offering and for the 180-day period thereafter, is an
intended beneficiary of this Section 15. During the period from identification
as a Lead Underwriter in connection with any public offering of the Company’s
Common Stock until the earlier of (i) the expiration of the lock-up period
specified in this section in connection with such offering or (ii) the
abandonment of such offering by the Company and the Lead Underwriter, the
provisions of this Section 15 may not be amended or waived except with the
consent of the Lead Underwriter.

Notices. Any notice required or permitted hereunder shall be given in writing
and shall be deemed effectively given upon personal delivery or upon deposit in
the United States mail by certified mail (if the party is within the United
States), Canada Post (if the party is within Canada) or upon deposit for
delivery by an internationally recognized express mail courier service (for
international delivery of notice), with postage and fees prepaid, addressed to
the other party at its address as shown beneath its signature in the Notice, or
to such other address as such party may designate in writing from time to time
to the other party.

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EXHIBIT A

BLUE ZONE INC. 1999 STOCK OPTION PLAN

EXERCISE NOTICE

Blue Zone, Inc.

Attention: Secretary

Exercise of Option. Effective as of today,                     , the undersigned
(the “Grantee”) hereby elects to exercise the Grantee’s option to purchase
                    shares of the Common Stock (the “Shares”) of Blue Zone Inc. (the
“Company”) under and pursuant to the Company’s 1999 Stock Option Plan, as
amended from time to time (the “Plan”) and the Non-Qualified Stock Option Award
Agreement (the “Option Agreement”) and Notice of Stock Option Award (the
“Notice”) dated                     ,                     . Unless otherwise defined herein, the
terms defined in the Plan shall have the same defined meanings in this Exercise
Notice.

Representations of the Grantee. The Grantee acknowledges that the Grantee has
received, read and understood the Notice, the Plan, and the Option Agreement
and agrees to abide by and be bound by their terms and conditions.

Rights as Stockholder. Until the stock certificate evidencing such Shares is
issued (as evidenced by the appropriate entry on the books of the Company or of
a duly authorized transfer agent of the Company), no right to vote or receive
dividends or any other rights as a stockholder shall exist with respect to the
Shares, notwithstanding the exercise of the Option. The Company shall issue
(or cause to be issued) such stock certificate promptly after the Option is
exercised. No adjustment will be made for a dividend or other right for which
the record date is prior to the date the stock certificate is issued, except as
provided in Section 10 of the Plan.

Delivery of Payment. The Grantee herewith delivers to the Company the full
Exercise Price for the Shares, which, to the extent selected, shall be deemed
to be satisfied by use of the broker-dealer sale and remittance procedure to
pay the Exercise Price provided in Section 3(c) of the Option Agreement.

Tax Consultation. The Grantee understands that the Grantee may suffer adverse
tax consequences as a result of the Grantee’s purchase or disposition of the
Shares. The Grantee represents that the Grantee has consulted with any tax
consultants the Grantee deems advisable in connection with the purchase or
disposition of the Shares and that the Grantee is not relying on the Company
for any tax advice

Taxes. The Grantee acknowledges that federal, state, provincial, territorial
and local income and employment tax withholding requirements may apply in
respect of this Notice of Exercise and authorizes the Company or the Grantee’s
employer to make such withholdings and remittances as are required by
Applicable Law. To the extent permitted by Applicable Law, the Grantee agrees
to satisfy all applicable federal, state, provincial, territorial and local
income and employment tax withholding obligations and herewith delivers to the
Company the full amount

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of such obligations or has made arrangements acceptable to the Company to
satisfy such obligations.

Successors and Assigns. The Company may assign any of its rights under this
Exercise Notice to single or multiple assignees, and this agreement shall inure
to the benefit of the successors and assigns of the Company. This Exercise
Notice shall be binding upon the Grantee and his or her heirs, executors,
administrators, successors and permitted assigns.

Headings. The captions used in this Exercise Notice are inserted for
convenience and shall not be deemed a part of this agreement for construction
or interpretation.

Dispute Resolution. The provisions of Section 12 of the Option Agreement shall
be the exclusive means of resolving disputes arising out of or relating to this
Exercise Notice.

Governing Law; Severability. This Exercise Notice is to be construed in
accordance with and governed by the internal laws of the State of New York
without giving effect to any choice of law rule that would cause the
application of the laws of any jurisdiction other than the internal laws of the
State of New York to the rights and duties of the parties. Should any
provision of this Exercise Notice be determined by a court of law to be illegal
or unenforceable, such provision shall be enforced to the fullest extent
allowed by law and the other provisions shall nevertheless remain effective and
shall remain enforceable.

Notices. Any notice required or permitted hereunder shall be given in writing
and shall be deemed effectively given upon personal delivery or upon deposit in
the United States mail by certified mail, (if the party is within the United
States), by Canada Post (if the party is within Canada) or upon deposit for
delivery by an internationally recognized express mail courier service (for
international delivery of notice) with postage and fees prepaid, addressed to
the other party at its address as shown below beneath its signature, or to such
other address as such party may designate in writing from time to time to the
other party.

Further Instruments. The parties agree to execute such further instruments and
to take such further action as may be reasonably necessary to carry out the
purposes and intent of this agreement.

Entire Agreement. The Notice, the Plan, and the Option Agreement are
incorporated herein by reference, and together with this Exercise Notice
constitute the entire agreement of the parties with respect to the subject
matter hereof and supersede in their entirety all prior undertakings and
agreements of the Company and the Grantee with respect to the subject matter
hereof, and may not be modified adversely to the Grantee’s interest except by
means of a writing signed by the Company and the Grantee. Nothing in the
Notice, the Plan, the Option Agreement and this Exercise Notice (except as
expressly provided therein) is intended to confer any rights or remedies on any
persons other than the parties.

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	Submitted by:	 	Accepted by:
	 
	GRANTEE:	 	BLUE ZONE INC.
	 
	 	 	By:

	 
	
	 	Title:

	(Signature)	 	 
	Address:	 	Address:
	 
	
	 	

	
	 	

3ex10-24

 

EXHIBIT 10.24

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT dated as of the May 1, 2001.

	 	 	 	 	 
	BETWEEN:
	 	 	 	 
	 
	 	BLUE ZONE ENTERTAINMENT INC., a
	 
	 	corporation incorporated under the laws of British
	 
	 	Columbia, having an office at 329 Railway Street,
	 
	 	Vancouver, British Columbia, V6A 1A4
	 
	 	(the “Company”)
	AND:
	 	 	 	 
	 
	 	Jeremy Black, an individual
	 
	 	Vancouver, British Columbia
	 
	 	(the “Employee”)

WITNESSES THAT WHEREAS:

A.     The Company is a leading multimedia company involved in the development and
management of creative interactive broadcast properties for television, radio,
advertising and the internet;

B.     It is in the Company’s best interest to attract and retain qualified
executives and to provide an incentive for such of its senior executives,
including the Employee, to remain with the Company during a change of control;
and

C.     The Company wishes to continue to employ the Employee and the Employee has
agreed to continue to be employed by the Company on the terms and conditions
set forth herein.

     THEREFORE in consideration of the recitals, the following representations
and covenants and the payment of one dollar made by each party to the other,
the receipt and sufficiency of which is acknowledged by each party, the parties
agree on the following terms:

1.0   Employment Duties

1.1     The Company hereby employs the Employee in the position of Chief Financial
Officer on a full-time basis.

1.2     The Employee shall report to the President and CEO of the Company and shall
perform, observe and conform to such duties and instructions as from time to
time are lawfully assigned or communicated to him on behalf of the Company and on behalf of such affiliates or

 

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subsidiaries of the Company designated by the Company as requiring the services
of the Employee and as are consistent with his position of Chief Financial
Officer.

1.3     Throughout the term of this Agreement, the Employee shall:

		
	 	(a)   devote his full time, attention and ability to the business and
affairs of the Company;

		
	 	(b)   well and faithfully serve the Company;

		
	 	(c)   use his best efforts to generally promote the interests of the
Company; and

		
	 	(d)   not be employed or engaged in any capacity in promoting,
undertaking or carrying on any other business or occupation without
the prior written approval of the Company.

1.4   The Employee acknowledges and agrees that he is a fiduciary of the Company.

1.5   Without in any way limiting the scope of the Employee’s fiduciary
obligations to the Company, the Employee agrees that, at all times during the
term of this Agreement and following the termination of this Agreement or the
employment of the Employee with the Company, the Employee shall not engage in
unfair competition with the Company, its affiliates or subsidiaries, aid others
in any unfair competition with the Company, its affiliates or subsidiaries, in
any way breach the confidence that the Company has placed in the Employee,
misappropriate any proprietary or confidential information of the Company, or
misappropriate any corporate opportunities of the Company.

2.0   Compensation

2.1   Salary

2.1.1   As of May 1, 2001, the Employee shall be paid an annual salary of
$93,500.00 (Cdn.) payable in semi- monthly instalments on the first and
fifteenth day of each month (“Salary”). Should the first or fifteenth of any
month not be a business day, the Employee’s semi- monthly instalment otherwise
due on such date shall be paid to the Employee on the immediately preceding
business day. Provided that the Company’s financial condition has not
deteriorated, as of July 1, 2001, the Employee’s Salary shall be increased to
$105,000.00 (Cdn).

2.1.2   Further increases to the Employee’s Salary shall be in the Company’s sole
discretion.

2.2   Statutory Deductions

2.2.1   The Company shall have the right to deduct and withhold from the
Employee’s compensation any amounts required to be deducted and remitted under
the applicable provincial or federal laws of Canada.

 

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2.3   Benefits

2.3.1   The Employee shall be entitled to such benefits as the Company may, at
its sole discretion, offer from time to time to its employees in similar
positions. The introduction and administration of benefits is entirely within
the Company’s sole discretion, and the introduction, deletion or amendment of
benefits shall not constitute a breach of this Agreement.

2.4   Bonus

2.4.1   The Company may pay the Employee bonuses as may be determined by the
Compensation Committee of the Board of the Company, in its sole discretion,
from time to time.

2.5   Shares

2.5.1   The Employee may be entitled to participate in a stock option plan or
share purchase plan or any similar plan as may be offered by the Company at its
sole discretion from time to time. The introduction and administration of any
such plan is entirely at the Company’s sole discretion, and the introduction,
deletion or amendment of such plan shall not constitute a breach of this
Agreement.

2.5.2   Any stock options granted shall be on the terms set out in the form of
the stock option agreement in use by the Company at the time of such grant and
in accordance with the terms of the Company’s Stock Option Plan (the “Stock
Option Plan”), and subject to necessary regulatory and Board approval.

2.6   Vacation

2.6.1   The Employee shall be entitled to an annual vacation of four (4) weeks
per calendar year. The timing of vacations shall be in accordance with the
Company’s policies and practices for senior management personnel and with the
Company’s needs.

2.6.2   The Employee acknowledges and agrees that unless otherwise expressly
agreed in writing between the Employee and the Company, the Employee shall not
be entitled, by reason of his employment with the Company or by reason of any
termination of such employment, howsoever arising, to any remuneration,
compensation or benefits other than those expressly provided for in this
Agreement.

3.0   Non-Competition and Confidentiality

3.1   Non-Competition

3.1.1   During the term of this Agreement and for six (6) months following the
termination of this Agreement, the Employee shall not, without the written
consent of the Company:

		
	 	(a)   own or have any interest directly in;

		
	 	(b)   act as an officer, director, agent, employee or consultant of;
nor

 

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	 	(c)   assist in any way or in any capacity,

any person, firm, association, syndicate, partnership, joint venture,
collaboration, corporation or other entity that is engaged in a business that
is substantially similar to or competes with the business engaged in by the
Company or any entity that directly or indirectly controls, is controlled by,
is under direct or indirect common control of the Company including without
limitation, Blue Zone, Inc., Blue Zone Productions Ltd. and Blue Zone
International Limited (“Affiliates”) within Canada.

3.1.2   The Employee shall not, for a period of twelve (12) months from the date
of termination of this Agreement:

			
	 	(a)	directly or indirectly, either personally, by agent or by
letters, circulars or advertisements, contact for the purpose of
solicitation or solicit any person, firm, association, syndicate,
joint venture, collaboration, corporation, business entity or crown
corporation who is or was a customer of the Company or its Affiliates
on or at any time within the two years prior to the date of
termination of the Employee’s employment with the Company or who was
scheduled to become a customer of the Company or its Affiliates
within twelve months prior to the date of such termination of
employment.

			
	 	(b)	induce or attempt to induce any person:

			
	 	(i)	who was an employee of the Company or its Affiliates at the
time of the date of termination of the employment of the
Employee; or

			
	 	(ii)	who has been, during the two years prior to such inducement
or attempted inducement, an employee of the Company or its
Affiliates;

	 	to leave the employ of the Company or its Affiliates, whether to join
the Employee in a similar enterprise or otherwise.

			
	 	(c)	either directly or indirectly, solicit, divert or take away any
staff, temporary personnel, trade, business, or goodwill from the
Company or its Affiliates, or otherwise compete for accounts or
personnel which become known to him through his relationship with the
Company or its Affiliates and agrees not to influence or attempt to
influence any of the Company’s or its Affiliates’ customers or
personnel not to do business with the Company or its Affiliates.

3.2   Delivery of Records

3.2.1   Any and all computer code, data, notes, diagrams, reports, notebook
pages, memoranda, and like materials, including Confidential Information and
Inventions (as such terms are hereinafter defined) received from or developed
for the Company or its Affiliates and

 

-5-

any copies or excerpts thereof shall remain the property of the Company or its
Affiliates. Upon the termination of the Employee’s relationship with the
Company as established under this Agreement, or at anytime during the term
hereof at the request of the Company, the Employee shall deliver to the Company
all such materials and other property belonging to the Company or developed in
connection with the business of the Company.

3.3   Confidentiality

3.3.1   In the course of carrying out and performing his duties and
responsibilities to the Company, the Employee shall obtain access to and be
entrusted with Confidential Information (as hereinafter defined) relating to
the business and affairs of the Company or its Affiliates.

3.3.2   The term “Confidential Information” as used in this Agreement means all
trade secrets, proprietary information and other data or information (and any
tangible evidence, record or representation thereof), whether prepared,
conceived or developed by an employee of the Company or its Affiliates or
received by the Company or its Affiliates from an outside source which is
maintained in confidence by the Company or its Affiliates or any of its
customers to obtain a competitive advantage over competitors who do not have
access to such trade secrets, proprietary information, or other data or
information. Without limiting the generality of the foregoing, Confidential
Proprietary Information includes:

			
	 	(a)	any ideas, improvements, know-how, research, inventions,
innovations, products, services, sales, scientific or other formulae,
patterns, processes, methods, machines, manufactures, compositions,
processes, procedures, tests, treatments, developments, technical
data, designs, devices, patterns, concepts, computer programs,
computer code, creative development, training or service manuals,
plans for new or revised services or products or other plans, items
or strategy methods on compilation of information, or works in
process, or any Invention (as defined in section 4.2 below), or parts
thereof, and any and all revisions and improvements relating to any
of the foregoing (in each case whether or not reduced to tangible
form) that relate to the business or affairs of the Company or
Affiliates, or that result from its marketing, research and/or
development activities;

			
	 	(b)	any information relating to the relationship of the Company or
its Affiliates with any clients, customers, suppliers, principals,
contacts or prospects of the Company or its Affiliates and any
information relating to the requirements, specifications, proposals,
orders, contracts or transactions of or with any such clients,
customers, suppliers, principals, contacts or prospects of the
Company or its Affiliates, including but not limited to client lists;

			
	 	(c)	any sales plan, marketing material, plan or survey, business plan
or opportunity, product or service development plan or specification,
business proposal or business agreement; and

 

-6-

			
	 	(d)	any information relating to the present or proposed business of
the Company or its Affiliates.

3.3.3   The Employee agrees that the Confidential Information is and will remain
the exclusive property of the Company or its Affiliates. The Employee also
agrees that the Confidential Information:

			
	 	(a)	constitutes a proprietary right which the Company or its
Affiliates is entitled to protect; and

			
	 	(b)	constitutes information and knowledge not generally known to the
trade.

3.3.4   The Employee understands that the Company has from time to time in its
possession information belonging to others or which is claimed by others to be
confidential or proprietary and which the Company has agreed to keep
confidential. The Employee agrees that all such information shall be
Confidential Information for the purposes of this Agreement.

3.3.5   For purposes of the copyright laws of the United States of America, to
the extent, if any, that such laws are applicable to any Confidential
Information, it shall be considered a work made for hire and the Company shall
be considered the author thereof.

3.3.6   The Employee acknowledges and agrees that any Confidential Information
disclosed to the Employee is in the strictest confidence and the Employee
agrees to maintain and hold in strict confidence all Confidential Information
disclosed to him. The disclosure of any such Confidential Information by the
Employee in any form whatsoever except as authorized by the Company or
permitted under section 3.3.9 of this Agreement is and shall be considered a
breach of the Employee’s employment arrangement and shall constitute immediate cause for dismissal.

3.3.7   Except as authorized by the Company, the Employee shall not:

			
	 	(a)	duplicate, transfer, disclose or use nor allow any other person
to duplicate, transfer or disclose any of the Confidential
Information; or

			
	 	(b)	incorporate, in whole or in part, within any domestic or foreign
patent application, any proprietary or Confidential Information
disclosed to the Employee by the Company.

3.3.8   The Employee will safeguard all Confidential Information to which the
Employee has access at all times so that it is not exposed to or used by
unauthorized persons, and will exercise at least the same degree of care that
he would use to protect his own confidential information.

3.3.9   The restrictive obligations set forth above shall not apply to the
disclosure or use of any information which:

			
	 	(a)	is or later becomes publicly known under circumstances involving
no breach of this Agreement by the Employee;

 

-7-

			
	 	(b)	is already known to the Employee outside his employment at the
time of receipt of the Confidential Information;

			
	 	(c)	is disclosed to a third party under an appropriate
confidentiality agreement;

			
	 	(d)	is lawfully made available to the Employee by a third party;

			
	 	(e)	is independently developed by the Employee who has not been privy
to the Confidential Information provided by the Company; or

			
	 	(f)	is required by law to be disclosed but only to the extent of such
requirement and the Employee shall immediately notify in writing the
Chief Executive Officer of the Company upon receipt of any request
for such disclosure.

3.3.10   The Employee acknowledges that a breach by the Employee of any of the
covenants contained in this section 3 shall result in damages to the Company
and that the Company could not be adequately compensated for such damages by a
monetary award. Accordingly, in the event of any such breach, in addition to
all other remedies available to the Company at law or in equity, the Company
shall be entitled as a matter of right to apply to a court of competent
jurisdiction for such relief by way of restraining order, temporary or
permanent injunction, decree or otherwise, as may be appropriate to ensure
compliance with the provisions of this Agreement.

3.3.11   The Employee acknowledges that the restrictions contained in this
section 3 are reasonable and valid and all defences to the strict enforcement
thereof by the Company are hereby waived by the Employee.

3.3.12   The provisions of this section 3 shall survive the termination of this
Agreement.

4.0   Ownership of Future Intellectual Property

4.1   Any new technology, knowledge or information developed by the Employee
related to the business of the Company or any of its Affiliates during the term
of this Agreement shall be the exclusive property of the Company and its
Affiliates.

4.2   The Employee acknowledges that all Confidential Information and all other
discoveries, know-how, inventions, ideas, concepts, processes, products,
protocols, treatments, methods, tests and improvements, computer programs, or
parts thereof, conceived, developed, reduced to practice or otherwise made by
him either alone or with others, and that in any way relates to the present
programs, services, product or business of the Company or its Affiliates,
during the course of his employment with the Company pursuant to this Agreement
or any previous employment agreements or arrangements between the Employee and
the Company or its Affiliates, whether or not conceived, developed, reduced to
practice or made during the Employee’s regular working hours or on the premises
of the Company (collectively “Inventions”), and any and all services and
products which embody, emulate or employ any such

 

-8-

Inventions will be the sole property of the Company or its nominee and all
copyrights, patents, patent rights, trademarks, service marks and reproduction
rights to, and other proprietary rights in, each such Invention, whether or not
patentable or copyrightable, will belong exclusively to the Company or its
nominee. For purposes of the copyright laws of the United States of America,
to the extent, if any, that such laws are applicable to any such Invention or
any such service or product, it will be considered a work made for hire and the
Company will be considered the author thereof.

4.3   The Employee hereby assigns to the Company or its nominee, their successors
or assigns, all his rights, title and interest in and to the Inventions.

4.4   The Employee hereby waives for the benefit of the Company and its
successors and assigns all his moral rights in respect of the Inventions.

4.5   The Employee will assist the Company or its nominee in every proper way
(but at the Company’s expense) to obtain and, from time to time to enforce,
patents or copyrights in respect of the Inventions in any and all countries,
and to that end the Employee will execute all documents for use in applying
for, obtaining and enforcing patents and copyrights on such Inventions as the
Company may desire, together with any assignments of such Inventions to the
Company or Persons designated by it.

4.6   The Employee represents and warrants that he is subject to no contractual
or other restriction or obligation which will in any way limit his activities
on behalf of the Company. The Employee hereby represents and warrants to the
Company that he has no continuing obligations to any previous employer with
respect to any previous invention, discovery or other item of intellectual
property or which requires the Employee not to disclose any information or data
to the Company. The Employee further represents and warrants that he does not
claim rights in, or otherwise excludes from this Agreement, any Invention
except as listed on Schedule “A” hereto.

4.7   The Employee acknowledges that a breach by the Employee of any of the
covenants contained in this section 4 herein shall result in damages to the
Company and that the Company could not be adequately compensated for such
damages by a monetary award. Accordingly, in the event of any such breach, in
addition to all other remedies available to the Company at law or in equity,
the Company shall be entitled as a matter of right to apply to a court of
competent jurisdiction for such relief by way of restraining order, temporary
or permanent injunction, decree or otherwise, as may be appropriate to ensure
compliance with the provisions of this Agreement.

4.8   The provisions of this section 4 shall survive the termination of this
Agreement.

5.0   Term of Employment and Termination

5.1   The term of the Employee’s employment pursuant to this Agreement shall
commence on May 1, 2001 and continue until such time as it is terminated
pursuant to this section 5.

 

-9-

5.2   The Company may terminate the Employee’s employment at any time with no
notice, for cause. If this Agreement and the Employee’s employment are
terminated for cause, no notice, pay in lieu of notice, Salary, benefits, stock
options shall be paid or payable to the Employee after or as a result of such
termination.

5.3   The Company may terminate the Employee’s employment at any time, without
cause, upon providing to the Employee:

			
	 	(a)	three months of notice or payment of three months’ Salary in lieu
of notice or a combination thereof; and

			
	 	(b)	one additional month of notice or Salary in lieu of notice or
combination thereof for each of the Employee’s completed years of
service after January 2, 2001.

5.4   The amount of notice in writing or pay in lieu of notice or combination
thereof provided for in section 5.3 is inclusive of any entitlement to notice
or pay in lieu pursuant to the Employment Standards Act, R.S.B.C. 1996, c.113.

5.5   Notwithstanding the terms of the Stock Option Plan, in the event the
Employee’s employment is terminated by the Company without cause then any stock
options granted to the Employee shall cease to vest on the effective date of
termination pursuant to the notice of termination and shall be exercisable in
accordance with the terms of the Stock Option Plan and, subject to the Stock
Option Plan or stock option agreement, shall remain exercisable until 90 days
following the Employee’s last day of work.

5.6   If prior to the termination of this Agreement, there is a Change in Control
(as such term is defined herein) and in the next 6 month period following the
Change in Control (“Protection Period”), any of the following occur:

			
	 	(a)	the Employee’s employment is terminated for reasons other than
cause, permanent disability or death; or

			
	 	(b)	the Employee resigns within 30 days following:

			
	 	(i)	a material change (other than a change that is clearly and
exclusively consistent with a promotion) in the Employee’s
position, duties, responsibilities, title or office in effect
immediately prior to the Change in Control;

			
	 	(ii)	a failure by the Company to increase the Employee’s Salary or
other forms of compensation in a manner consistent with increases
granted generally to the Company’s other executives;

			
	 	(iii)	a decrease in the Employee’s Salary or a material decrease
in the Employee’s other compensation;

 

-10-

			
	 	(iv)	a relocation of the Employee’s principal place of employment
outside the Greater Vancouver Regional District, without the
Employee’s consent; or

			
	 	(v)	any action or event that would constitute a constructive
dismissal of the Employee at common law,

	 	provided and only if such change, reduction or relocation
is effected by the Company during the Protection Period
and without the Employee’s consent,

then this Agreement shall be deemed to have been terminated by the Company and
the Company shall provide the Employee, in lieu of notice, and in lieu of any
payment described in section 5.3 of this Agreement, an amount equal to 6 months
of Salary plus one month of Salary for each of the Employee’s completed year of
service after January 2, 2001 and the Company shall immediately vest any stock
options granted pursuant to section 2.5 herein, which shall be exercisable in
accordance with the terms of the Stock Option Plan or any other stock option
plan or agreement pursuant to which options were granted.

     5.7   For the purposes of this Agreement, “Change in Control” means:

			
	 	(i)	the direct or indirect sale, lease, exchange or other
transfer of all or substantially all (75% or more) of the assets
of the Company to any person or entity or group of persons or
entities acting in concert as a partnership or other group;

			
	 	(ii)	a merger, consolidation, reorganization or arrangement
involving the Company other than a merger, consolidation,
reorganization or arrangement in which stockholders of the Company
immediately prior to such merger, consolidation, reorganization or
arrangement own, directly or indirectly, securities possessing at
least 65% of the total combined voting power of the outstanding
voting securities of the corporation resulting from such merger,
consolidation, reorganization or arrangement in substantially the
same proportion as their ownership of such voting securities
immediately prior to such merger, consolidation, reorganization or
arrangement;

			
	 	(iii)	a majority of the Board of Directors elected at any annual
or special general meeting of the shareholders of the Company are
not individuals nominated by the Company’s then- incumbent Board;
or

			
	 	(iv)	the acquisition, directly or indirectly, by any person or
related group of persons acting jointly or in concert (other than
the Company or a person that directly or indirectly controls, is
controlled by, or is under common control with, the Company) of

 

-11-

			
	 	 	beneficial ownership of securities possessing more than
[50%] of the total combined voting power of the Company’s
outstanding securities.

5.8   Subject to sections 5.6 and 5.7, in the event it is determined that the
Employee has been constructively dismissed by the Company, the Employee shall
be entitled to the same notice or payment in lieu of notice and vesting of
stock options as if he had been terminated without cause under sections 5.3,
5.4 and 5.5.

5.9   The Employee may terminate this Agreement and his employment with the
Company upon giving the Company thirty (30) days’ notice of resignation of his
employment. Upon the effective date of the Employee’s resignation, the Company
shall not be obligated to make any further payments under this Agreement. On
the giving of such notice by the Employee, or at any time thereafter, the
Company shall have the right to elect to terminate the Employee’s employment at
any time prior to the effective date of the Employee’s resignation, and upon
such election, shall provide to the Employee the following:

			
	 	(a)	a lump sum equal to thirty days Salary or to such proportion of
the thirty days that remains outstanding at the time of the election;
and

			
	 	(b)	continuation of the Benefits for the thirty-day period or such
proportion of the thirty days that remains outstanding at the time of
the election.

For greater certainty, upon such election being made by the Company, the
Employee shall not be entitled to any further vesting of stock options.

6.0   Waiver

6.1   No consent or waiver, express or implied, by any party to this Agreement or
any breach or default by any other party in the performance of its obligations
under this Agreement or of any of the terms, covenants or conditions of this
Agreement shall be deemed or construed to be a consent or waiver of any
subsequent or continuing breach or default in such party’s performance or in
the terms, covenants or conditions of this Agreement. The failure of any party
to this Agreement to assert any claim in a timely fashion for any of its rights
or remedies under this Agreement shall not be construed as a waiver of any such
claim and shall not serve to modify, alter or restrict any such party’s right
to assert such claim at any time thereafter.

7.0   Notices

7.1   Any notice relating to this Agreement or required or permitted to be given
in accordance with this Agreement shall be in writing and shall be personally
delivered, telefaxed or mailed by registered mail, postage prepaid if to the
Company to the address of the Company set out on the first page of this
Agreement and if to the Employee to the home address of the Employee on the
Company’s records. Any notice shall be deemed to have been received if
delivered or telefaxed, when delivered or telefaxed, and if mailed, on the
fifth day (excluding Saturdays, Sundays and holidays) after the mailing
thereof. If normal mail service is interrupted the sender shall deliver such
notice in order to ensure prompt receipt thereof.

 

-12-

7.2   Each party to this Agreement may change its address for the purpose of this
section 7.0 by giving written notice of such change in the manner provided for
in section 7.1.

8.0   Applicable Law

8.1   This Agreement shall be governed by and construed in accordance with the
laws of the province of British Columbia and the federal laws of Canada
applicable therein, which shall be deemed to be the proper law hereof. The
parties hereto hereby submit to the jurisdiction of the courts British
Columbia.

9.0   Severability

9.1   If any provision of this Agreement for any reason is declared invalid, such
declaration shall not affect the validity of any remaining portion of the
Agreement, which remaining portion shall remain in full force and effect as if
this Agreement had been executed with the invalid portion thereof eliminated
and it is hereby declared the intention of the parties that they would have
executed the remaining portions of this Agreement without including therein any
such part, parts or portion which may, for any reason, be hereafter declared
invalid.

10.0   Entire Agreement

10.1   This Agreement constitutes the entire Agreement between the parties hereto
regarding the subject matter described herein and there are no representations
or warranties, express or implied, statutory or otherwise other than set forth
in this Agreement and there are no Agreements collateral hereto other than as
are expressly set forth or referred to herein. This Agreement supersedes the
Employment Agreement between the parties dated December 1, 2000 any other prior
agreements, written or oral in respect of the Employee’s employment with the
Company.

11.0   Amendment

11.1   This Agreement shall not be amended except in writing signed by both parties.

12.0   Independent Legal Advice

12.1   The Employee acknowledges that this Agreement has been prepared by the
Company’s solicitors and acknowledges that the Employee has had sufficient time
to review this Agreement thoroughly, that he or she has read and understood the
terms of this Agreement and that the Employee has been given the opportunity to
obtain independent legal advice concerning the interpretation and effect of
this Agreement prior to its execution.

 

-13-

13.0   Counterpart

13.1   This Agreement may be executed in counterpart, including by facsimile, and
such counterparts together shall constitute one and the same instrument and
notwithstanding the date of execution shall be deemed to bear the date as set
out on the first page of this Agreement.

     IN WITNESS WHEREOF the parties have duly executed this Agreement as of the
date set out on the first page of this Agreement.

 

BLUE ZONE ENTERTAINMENT INC.

	 	 	 	 
	Per:   	 	/s/ Bruce Warren	 
	 	 	

	 	 	     Authorized
Signatory	 

	 	 	 	 
	
SIGNED, SEALED AND DELIVERED by

Jeremy Black in the presence of:	 	)
)
	 	 	)
	/s/ Jamie
Ollivier

Witness	 	)
)
	 	 	)
	 	 	)
	Jamie
Ollivier

Name	 	)
)	/s/ Jeremy
Black

Jeremy Black
	 	 	)
	 

Address	 	)
)
	 	 	)
	 

 	 	)
)
	 	 	)
)
	Executive Creative
Director

Occupation	 	)
)

 

-14-

Schedule “A”

Intellectual Property

     Pursuant to section 4.6 of this Agreement, the Employee excludes the
following Inventions from the operation of section 4.0:

[LIST] OR [NIL]

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