Document:

exv10w2

 

Exhibit 10.2

EXECUTIVE EMPLOYMENT AGREEMENT

     This Executive Employment Agreement (this “Agreement”) is made as of the 1st day of May, 2006
by and between InferX Corp., a Virginia corporation (the “Company”), and Bhupindra K. (“B.K.”)
Gogia, a natural person, residing in the Commonwealth of Virginia (“Executive”).

     WHEREAS, the Company wishes to employ Executive as its President and Chief Executive Officer
(“CEO”) and Executive wishes to accept such employment;

     WHEREAS, the Company and Executive wish to set forth the terms of Executive’s employment and
certain additional agreements between Executive and the Company.

     NOW, THEREFORE, in consideration of the foregoing recitals and the representations, covenants
and terms contained herein, the parties hereto agree as follows:

     1. Employment Period

          The Company will employ Executive, and Executive will serve the Company, under the terms of
this Agreement commencing May 1, 2006 (the “Commencement Date”) for a term of five (5) years unless
earlier terminated under Section 4 hereof. The period of time between the commencement and the
termination of Executive’s employment hereunder shall be referred to herein as the “Employment
Period.”

     2. Duties and Status

          The Company hereby engages Executive as its President and CEO on the terms and conditions set
forth in this Agreement. including the terms and conditions of the Employee Proprietary
Information, Inventions, and Non-Competition Agreement attached hereto as Exhibit A and
incorporated herein (the “Non-Disclosure Agreement”). Executive agrees to devote the Executive’s
entire business time, attention and energies to the business and interests of the Company during
the Employment Period. During the Employment Period, Executive shall report directly to the Board
of Directors of the Company (the “Board”) and shall exercise such authority, perform such executive
functions and discharge such responsibilities as are reasonably associated with Executive’s
position, commensurate with the authority vested in Executive pursuant to this Agreement and
consistent with the governing documents of the Company.

 

 

     3. Compensation and Benefits

	 	(a)	 	Salary. During the Employment Period, the Company shall pay
to Executive, as compensation for the performance of his duties and
obligations under this Agreement, a base salary of $180,000 per annum,
payable semi-monthly.
	 
	 	(b)	 	Bonus. During the Employment Period, Executive shall be
eligible for a bonus to be paid in cash, stock or both on terms that shall be
mutually acceptable to the Board and Executive.
	 
	 	(c)	 	Equity. Executive shall be entitled to receive restricted
stock, options, etc. (“Equity”) under the Company’s 2006 Stock Incentive Plan
to acquire shares of the Company’s common stock at the discretion of the
Board.
	 
	 	(d)	 	Other Benefits. During the Employment Period, Executive
shall be entitled to participate in all of the employee benefit plans,
programs and arrangements of the Company in effect during the Employment
Period which are generally available to senior executives of the Company,
subject to and on a basis consistent with the terms, conditions and overall
administration of such plans, programs and arrangements. In addition, during
the Employment Period, Executive shall be entitled to fringe benefits and
perquisites comparable to those of other senior executives of the Company
including, but not limited to, standard holidays, twenty (20) days of vacation
pay plus five (5) sick/personal days, to be used in accordance with the
Company’s vacation pay policy for senior executives.
	 
	 	(e)	 	Business Expenses. During the Employment Period, the Company
shall promptly reimburse Executive for all appropriately documented,
reasonable business expenses incurred by Executive in the performance of his
duties under this Agreement, including telecommunications expenses and travel
expenses.
	 
	 	(f)	 	Automobile Allowance. The Company shall pay up to $850 per
month to lease an automobile for Executive, such lease to be in the name of
the Company.
	 
	 	(g)	 	Life insurance. The Company shall pay premiums on life
insurance with a face value not to exceed $1,000,000. The premiums will be
taxable to the Executive and Executive shall have the right to designate the
beneficiaries of such policies.

     4. Termination of Employment

	 	(a)	 	Termination for Cause. The Company may terminate Executive’s
employment hereunder for Cause (defined below). For purposes of this
Agreement and subject to Executive’s opportunity to cure as provided in
Section 4(c) hereof, the Company shall have Cause to terminate Executive’s
employment hereunder if such termination shall be the result of:

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	 	(i)	 	a material breach of fiduciary duty or
material breach of the terms of this Agreement or any other agreement
between Executive and the Company (including without limitation any
agreements regarding confidentiality, inventions assignment and
non-competition);
	 
	 	(ii)	 	the commission by Executive of any act of
embezzlement, fraud, larceny or theft on or from the Company;
	 
	 	(iii)	 	substantial and continuing neglect or
inattention by Executive of the duties of his employment or the
willful misconduct or gross negligence of Executive in connection
with the performance of such duties which remains uncured for a
period of fifteen (15) days following receipt of written notice from
the Board specifying the nature of such breach;
	 
	 	(iv)	 	the commission and indictment by Executive
of any crime involving moral turpitude or a felony; and
	 
	 	(v)	 	Executive’s performance or omission of any
act which, in the judgment of the Board, if known to the customers,
clients, stockholders or any regulators of the Company, would have a
material and adverse impact on the business of the Company.

	 	(b)	 	Termination for Good Reason. Executive shall have the right
at any time to terminate his employment with the Company upon not less than
thirty (30) days prior written notice of termination for Good Reason (defined
below). For purposes of this Agreement and subject to the Company’s
opportunity to cure as provided in Section 4(c) hereof, Executive shall have
Good Reason to terminate his employment hereunder if such termination shall be
the result of:
	 
	 	 	 	(i) the Company’s material breach of this Agreement; or
	 
	 	 	 	(ii) A requirement by the Company that Executive
perform any act or refrain from performing any act that would be in
violation of any applicable law.

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	 	(c)	 	Notice and Opportunity to Cure. Notwithstanding the
foregoing, it shall be a condition precedent to the Company’s right to
terminate Executive’s employment for Cause and Executive’s right to terminate
for Good Reason that (i) the party seeking termination shall first have given
the other party written notice stating with specificity the reason for the
termination (“breach”) and (ii) if such breach is susceptible of cure or
remedy, a period of fifteen (15) days from and after the giving of such notice
shall have elapsed
without the breaching party having effectively cured or remedied such
breach during such 15-day period, unless such breach cannot be cured or
remedied within fifteen (15) days, in which case the period for remedy or
cure shall be extended for a reasonable time (not to exceed an additional
thirty (30) days) provided the breaching party has made and continues to
make a diligent effort to effect such remedy or cure.
	 
	 	(d)	 	Voluntary Termination. Executive, at his election, may
terminate his employment upon not less than sixty (60) days prior written
notice of termination other than for Good Reason.
	 
	 	(e)	 	Termination Upon Death or Permanent and Total Disability.
The Employment Period shall be terminated by the death of Executive. The
Employment Period may be terminated by the Board if Executive shall be
rendered incapable of performing his duties to the Company by reason of any
medically determined physical or mental impairment that can be reasonably
expected to result in death or that can be reasonably be expected to last for
a period of either (i) six (6) or more consecutive months from the first date
of Executive’s absence due to the disability or (ii) nine (9) months during
any twelve-month period (a “Permanent and Total Disability”). If the
Employment Period is terminated by reason of a Permanent and Total Disability
of Executive, the Company shall give thirty (30) days’ advance written notice
to that effect to Executive.
	 
	 	(f)	 	Termination at the Election of the Company. At the election
of the Company, otherwise than for Cause as set forth in Section 4(a) above,
upon not less than sixty (60) days prior written notice of termination.
	 
	 	(g)	 	Termination for Business Failure. Anything contained herein
to the contrary notwithstanding, in the event the Company’s business is
discontinued because continuation is rendered impracticable by substantial
financial losses, lack of funding, legal decisions, administrative rulings,
declaration of war, dissolution, national or local economic depression or
crisis or any reasons beyond the control of the Company, then this Agreement
shall terminate as of the day the Company determines to cease operation with
the same force and effect as if such day of the month were originally set as
the termination date hereof. In the event this Agreement is terminated
pursuant to this Section 4(g), the Executive will not be entitled to severance
pay.

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     5. Consequences of Termination

	 	(a)	 	By Executive for Good Reason or the Company Without Cause.
In the event of a termination of Executive’s employment during the Employment
Period by Executive for Good Reason pursuant to Section 4(b) or the Company
without Cause pursuant to Section 4 (f) the Company shall pay Executive (or
his estate) and provide him with the following, provided that Executive enter
into a release of claims agreement agreeable to the Company and Executive:

	 	(i)	 	Cash Payment. A cash payment, payable in
equal installments over a six (6) month period after Executive’s
termination of employment, equal to the sum of the following:

	 	(A)	 	Salary. The equivalent of
the greater of (i) twenty-four (24) months of Executive’s
then-current base salary or (ii) the remainder of the term of
this Agreement (the “Severance Period”); plus
	 
	 	(B)	 	Earned but Unpaid Amounts.
Any previously earned but unpaid salary through Executive’s
final date of employment with the Company, and any previously
earned but unpaid bonus amounts prior to the date of
Executive’s termination of employment.
	 
	 	(C)	 	Equity. All Equity vested
at time of termination shall be retained by Executive and all
Equity that has not vested shall be accelerated and be deemed
vested for purposes of this Section 5.

	 	(ii)	 	Other Benefits. The Company shall provide
continued coverage for the Severance Period under all health, life,
disability and similar employee benefit plans and programs of the
Company on the same basis as Executive was entitled to participate
immediately prior to such termination, provided that Executive’s
continued participation is possible under the general terms and
provisions of such plans and programs. In the event that Executive’s
participation in any such plan or program is barred, the Company
shall use its commercially reasonable efforts to provide Executive
with benefits substantially similar (including all tax effects) to
those which Executive would otherwise have been entitled to receive
under such plans and programs from which his continued participation
is barred. In the event that Executive is covered under
substitute benefit plans of another employer prior to the
expiration of the Severance Period, the Company will no longer be
obligated to continue the coverages provided for in this Section
5(a)(ii).

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	 	(b)	 	Other Termination of Employment. In the event that
Executive’s employment with the Company is terminated during the Employment
Period by the Company for Cause (as provided for in Section 4(a) hereof) or by
Executive other than for Good Reason (as provided for in Section 4(b) hereof),
the Company shall pay or grant Executive any earned but unpaid salary, bonus,
and Options through Executive’s final date of employment with the Company, and
the Company shall have no further obligations to Executive.
	 
	 	(c)	 	Withholding of Taxes. All payments required to be made by
the Company to Executive under this Agreement shall be subject only to the
withholding of such amounts, if any, relating to tax, excise tax and other
payroll deductions as may be required by law or regulation.
	 
	 	(d)	 	No Other Obligations. The benefits payable to Executive
under this Agreement are not in lieu of any benefits payable under any
employee benefit plan, program or arrangement of the Company, except as
specifically provided herein, and Executive will receive such benefits or
payments, if any, as he may be entitled to receive pursuant to the terms of
such plans, programs and arrangements. Except for the obligations of the
Company provided by the foregoing and this Section 5, the Company shall have
no further obligations to Executive upon his termination of employment.
	 
	 	(e)	 	Mitigation or Offset. Executive shall not be required to
mitigate the damages provided by this Section 5 by seeking substitute
employment or otherwise and there shall not be an offset of the payments or
benefits set forth in this Section 5.

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     6. Governing Law

          This Agreement and the rights and obligations of the parties hereto shall be construed in
accordance with the laws of the Commonwealth of Virginia, without giving effect to the principles
of conflict of laws.

     7. Indemnity and Insurance

          The Company shall indemnify and save harmless Executive for any liability incurred by reason
of any act or omission performed by Executive while acting in good faith on behalf of the Company
and within the scope of the authority of Executive pursuant to this Agreement and to the fullest
extent provided under the Bylaws, the Articles of Incorporation and the Stock Corporation Act of
Virginia, except that Executive must have in good faith believed that such action was in, or not
opposed to, the best interests of the Company, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe that such conduct was unlawful.

          The Company shall provide that Executive is covered by Directors and Officers insurance that
the Company provides to other senior executives and/or board members.

     8. Cooperation with the Company After Termination of Employment

          Following termination of Executive’s employment for any reason, Executive shall fully
cooperate with the Company in all matters relating to the winding up of Executive’s pending work on
behalf of the Company including, but not limited to, any litigation in which the Company is
involved, and the orderly transfer of any such pending work to other employees of the Company as
may be designated by the Company. Following any notice of termination of employment by either the
Company or Executive, the Company shall be entitled to such full time or part time services of
Executive as the Company may reasonably require during all or any part of the sixty (60)-day period
following any notice of termination, provided that Executive shall be compensated for such services
at the same rate as in effect immediately before the notice of termination.

     9. Notice

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          All notices, requests and other communications pursuant to this Agreement shall be sent by
overnight mail of by fax with proof of transmission to the following addresses:

     If to Executive:

B.K. Gogia

Phone:

Email:

     If to the Company:

InferX Corp.

Attn: B.K. Gogia, President

1600 International Drive

Suite 100

McLean, Virginia 22102

Phone: (703) 917-0880

Fax: (703) 917-0563

Email bkgogia@inferx.com

     10. Waiver of Breach

          Any waiver of any breach of this Agreement shall not be construed to be a continuing waiver or
consent to any subsequent breach on the part of either Executive or of the Company.

     11. Non-Assignment / Successors

          Neither party hereto may assign his/her or its rights or delegate his/hers or its duties under
this Agreement without the prior written consent of the other party; provided, however, that (i)
this Agreement shall inure to the benefit of and be binding upon the successors and assigns of the
Company upon any sale or all or substantially all of the Company’s assets, or upon any merger,
consolidation or reorganization of the Company with or into any other corporation, all as though
such successors and assigns of the Company and their respective successors and assigns were the
Company; and (ii) this Agreement shall inure to the benefit of and be binding upon the heirs,
assigns or designees of Executive to the extent of any payments due to them hereunder. As used in
this Agreement, the term “Company” shall be deemed to refer to any such successor or assign of the
Company referred to in the preceding sentence.

     12. Severability

          To the extent any provision of this Agreement or portion thereof shall be invalid or
unenforceable, it shall be considered deleted there from and the remainder of such provision and of
this Agreement shall be unaffected and shall continue in full force and effect.

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     13. Counterparts

          This Agreement may be executed in one or more counterparts, each of which shall be deemed to
be an original but all of which together will constitute one and the same instrument.

     14. Arbitration

          Executive and the Company shall submit to mandatory and exclusive binding arbitration, any
controversy or claim arising out of, or relating to, this Agreement or any breach hereof where the
amount in dispute is greater than or equal to $50,000, provided, however, that the
parties retain their right to, and shall not be prohibited, limited or in any other way restricted
from, seeking or obtaining equitable relief from a court having jurisdiction over the parties. In
the event the amount of any controversy or claim arising out of, or relating to, this Agreement, or
any breach hereof, is less than $50,000, the parties hereby agree to submit such claim to
mediation. Such arbitration shall be governed by the Federal Arbitration Act and conducted through
the American Arbitration Association (“AAA”) in the District of Columbia, before a single neutral
arbitrator, in accordance with the National Rules for the Resolution of Employment Disputes of the
American Arbitration Association in effect at that time. The parties may conduct only essential
discovery prior to the hearing, as defined by the AAA arbitrator. The arbitrator shall issue a
written decision which contains the essential findings and conclusions on which the decision is
based. Mediation shall be governed by, and conducted through, the AAA. Judgment upon the
determination or award rendered by the arbitrator may be entered in any court having jurisdiction
thereof.

     15. Entire Agreement

          This Agreement and all schedules and other attachments hereto constitute the entire agreement
by the Company and Executive with respect to the subject matter hereof and, except as specifically
provided herein, supersedes any and all prior agreements or understandings between Executive and
the Company with respect to the subject matter hereof, whether written or oral. This Agreement may
be amended or modified only by a written instrument executed by Executive and the Company.

     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date above

	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	B.K. GOGIA	 	 	 	INFERX CORP.	 	 
	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By: Dr. Jerzy Bala	 	 
	 

	 	 	 	 	 	Its: CTO and Co-Founder	 	 

-9-exv10w3

 

Exhibit 10.3

EXECUTIVE EMPLOYMENT AGREEMENT

     This Executive Employment Agreement (this “Agreement”) is made as of the 1st day of May, 2006
by and between InferX Corp., a Virginia corporation (the “Company”), and Dr. Jerzy W. Bala a
natural person, residing in the Commonwealth of Virginia (“Executive”).

     WHEREAS, the Company wishes to employ Executive as its Chief Technical Officer (“CTO”) and
Executive wishes to accept such employment;

     WHEREAS, the Company and Executive wish to set forth the terms of Executive’s employment and
certain additional agreements between Executive and the Company.

     NOW, THEREFORE, in consideration of the foregoing recitals and the representations, covenants
and terms contained herein, the parties hereto agree as follows:

     1. Employment Period

          The Company will employ Executive, and Executive will serve the Company, under the terms of
this Agreement commencing May 1, 2006 (the “Commencement Date”) for a term of three (3) years
unless earlier terminated under Section 4 hereof. The period of time between the commencement and
the termination of Executive’s employment hereunder shall be referred to herein as the “Employment
Period.”

     2. Duties and Status

          The Company hereby engages Executive as its CTO on the terms and conditions set forth in this
Agreement. including the terms and conditions of the Employee Proprietary Information, Inventions,
and Non-Competition Agreement attached hereto as Exhibit A and incorporated herein (the
“Non-Disclosure Agreement”). Executive agrees to devote the Executive’s entire business time,
attention and energies to the business and interests of the Company during the Employment Period.
During the term of the Employment Period, Executive shall report directly to the President and
shall exercise such authority, perform such executive functions and discharge such responsibilities
as are reasonably associated with Executive’s position, commensurate with the authority vested in
Executive pursuant to this Agreement and consistent with the governing documents of the Company.

     3. Compensation and Benefits

(a) Salary. During the Employment Period, the Company shall pay
to Executive, as compensation for the performance of his duties and
obligations under this Agreement, a base salary of $150,000 per annum,
payable semi-monthly.

 

 

(b) Bonus. During the Employment Period, Executive shall be
eligible for a bonus to be paid in cash, stock or both on terms that shall be
mutually acceptable to the Board of Directors of the Company (the “Board”) and
Executive.

(c) Equity. Executive shall be entitled to receive restricted
stock, options, etc. (“Equity”) under the Company’s 2006 Stock Incentive Plan
to acquire shares of the Company’s common stock at the discretion of the
Board.

(d) Other Benefits. During the Employment Period, Executive
shall be entitled to participate in all of the employee benefit plans,
programs and arrangements of the Company in effect during the Employment
Period which are generally available to senior executives of the Company,
subject to and on a basis consistent with the terms, conditions and overall
administration of such plans, programs and arrangements. In addition, during
the Employment Period, Executive shall be entitled to fringe benefits and
perquisites comparable to those of other senior executives of the Company
including, but not limited to, standard holidays, twenty (20) days of vacation
pay plus five (5) sick/personal days, to be used in accordance with the
Company’s vacation pay policy for senior executives.

(e) Business Expenses. During the Employment Period, the Company
shall promptly reimburse Executive for all appropriately documented,
reasonable business expenses incurred by Executive in the performance of his
duties under this Agreement, including telecommunications expenses and travel
expenses.

     4. Termination of Employment

	 	(a)	 	Termination for Cause. The Company may terminate Executive’s
employment hereunder for Cause (defined below). For purposes of this
Agreement and subject to Executive’s opportunity to cure as provided in
Section 4(c) hereof, the Company shall have Cause to terminate Executive’s
employment hereunder if such termination shall be the result of:

	 	(i)	 	a material breach of fiduciary duty or
material breach of the terms of this Agreement or any other agreement
between Executive and the Company (including without limitation any
agreements regarding confidentiality, inventions assignment and
non-competition);

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	 	(ii)	 	the commission by Executive of any act of
embezzlement, fraud, larceny or theft on or from the Company;
	 
	 	(iii)	 	substantial and continuing neglect or
inattention by Executive of the duties of his employment or the
willful misconduct or gross negligence of Executive in connection
with the performance of such duties which remains uncured for a
period of fifteen (15) days following receipt of written notice from
the Board specifying the nature of such breach;
	 
	 	(iv)	 	the commission and indictment by Executive
of any crime involving moral turpitude or a felony; and
	 
	 	(v)	 	Executive’s performance or omission of any
act which, in the judgment of the Board, if known to the customers,
clients, stockholders or any regulators of the Company, would have a
material and adverse impact on the business of the Company.

	 	(b)	 	Termination for Good Reason. Executive shall have the right
at any time to terminate his employment with the Company upon not less than
thirty (30) days prior written notice of termination for Good Reason (defined
below). For purposes of this Agreement and subject to the Company’s
opportunity to cure as provided in Section 4(c) hereof, Executive shall have
Good Reason to terminate his employment hereunder if such termination shall be
the result of:

	 	(i)	 	the Company’s material breach of this Agreement; or
	 
	 	(ii)	 	A requirement by the Company that Executive
perform any act or refrain from performing any act that would be in
violation of any applicable law.

	 	(c)	 	Notice and Opportunity to Cure. Notwithstanding the
foregoing, it shall be a condition precedent to the Company’s right to
terminate Executive’s employment for Cause and Executive’s right to terminate
for Good Reason that (i) the party seeking termination shall first have given
the other party written notice stating with specificity the reason for the
termination (“breach”) and (ii) if such breach is susceptible of cure or
remedy, a period of fifteen (15) days from and after the giving of such notice
shall have elapsed without the breaching party having effectively cured or
remedied such breach during such 15-day period, unless such breach cannot be
cured or remedied within fifteen (15) days, in which case the period for
remedy or cure shall be extended for a reasonable time (not to exceed an
additional thirty (30) days) provided the breaching party has made and
continues to make a diligent effort to effect such remedy or cure.

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	 	(d)	 	Voluntary Termination. Executive, at his election, may
terminate his employment upon not less than sixty (60) days prior written
notice of termination other than for Good Reason.
	 
	 	(e)	 	Termination Upon Death or Permanent and Total Disability.
The Employment Period shall be terminated by the death of Executive. The
Employment Period may be terminated by the Board if Executive shall be
rendered incapable of performing his duties to the Company by reason of any
medically determined physical or mental impairment that can be reasonably
expected to result in death or that can be reasonably be expected to last for
a period of either (i) six (6) or more consecutive months from the first date
of Executive’s absence due to the disability or (ii) nine (9) months during
any twelve-month period (a “Permanent and Total Disability”). If the
Employment Period is terminated by reason of a Permanent and Total Disability
of Executive, the Company shall give thirty (30) days’ advance written notice
to that effect to Executive.
	 
	 	(f)	 	Termination at the Election of the Company. At the election
of the Company, otherwise than for Cause as set forth in Section 4(a) above,
upon not less than sixty (60) days prior written notice of termination.
	 
	 	(g)	 	Termination for Business Failure. Anything contained herein
to the contrary notwithstanding, in the event the Company’s business is
discontinued because continuation is rendered impracticable by substantial
financial losses, lack of funding, legal decisions, administrative rulings,
declaration of war, dissolution, national or local economic depression or
crisis or any reasons beyond the control of the Company, then this Agreement
shall terminate as of the day the Company determines to cease operation with
the same force and effect as if such day of the month were originally set as
the termination date hereof. In the event this Agreement is terminated
pursuant to this Section 4(g), the Executive will not be entitled to severance
pay.

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     5. Consequences of Termination

	 	(a)	 	By Executive for Good Reason or by the Company Without Cause.
In the event of a termination of Executive’s employment during the Employment
Period by Executive for Good Reason pursuant to Section 4(b) or by the Company
without Cause pursuant to Section 4(f) the Company shall pay Executive (or his
estate) and provide him with the following, provided that Executive enter into
a release of claims agreement agreeable to the Company and Executive:

	 	(i)	 	Cash Payment. A cash payment, payable in
equal installments over a six (6) month period after Executive’s
termination of employment, equal to the sum of the following:

	 	(A)	 	Salary. The equivalent of
nine (9) months of Executive’s then-current base salary (the
“Severance Period”); plus
	 
	 	(B)	 	Earned but Unpaid Amounts.
Any previously earned but unpaid salary through Executive’s
final date of employment with the Company, and any previously
earned but unpaid bonus amounts prior to the date of
Executive’s termination of employment.
	 
	 	(C)	 	Equity. All Equity vested
at time of termination shall be retained by Executive and all
Equity that has not vested shall be accelerated and be deemed
vested for purposes of this Section 5.

	 	(ii)	 	Other Benefits. The Company shall provide
continued coverage for the Severance Period under all health, life,
disability and similar employee benefit plans and programs of the
Company on the same basis as Executive was entitled to participate
immediately prior to such termination, provided that Executive’s
continued participation is possible under the general terms and
provisions of such plans and programs. In the event that Executive’s
participation in any such plan or program is barred, the Company
shall use its commercially reasonable efforts to provide Executive
with benefits substantially similar (including all tax effects) to
those which Executive would otherwise have been entitled to receive
under such plans and programs from which his continued participation
is barred. In the event that Executive is covered under substitute
benefit plans of another employer prior to the expiration of the
Severance Period, the Company will no longer be obligated to continue
the coverages provided for in this Section 5(a)(ii).

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	 	(b)	 	Other Termination of Employment. In the event that
Executive’s employment with the Company is terminated during the Employment
Period by the Company for Cause (as provided for in Section 4(a) hereof) or by
Executive other than for Good Reason (as provided for in Section 4(b) hereof), the Company shall pay or grant
Executive any earned but unpaid salary, bonus, and Options through
Executive’s final date of employment with the Company, and the Company
shall have no further obligations to Executive.
	 
	 	(c)	 	Withholding of Taxes. All payments required to be made by
the Company to Executive under this Agreement shall be subject only to the
withholding of such amounts, if any, relating to tax, excise tax and other
payroll deductions as may be required by law or regulation.
	 
	 	(d)	 	No Other Obligations. The benefits payable to Executive
under this Agreement are not in lieu of any benefits payable under any
employee benefit plan, program or arrangement of the Company, except as
specifically provided herein, and Executive will receive such benefits or
payments, if any, as he may be entitled to receive pursuant to the terms of
such plans, programs and arrangements. Except for the obligations of the
Company provided by the foregoing and this Section 5, the Company shall have
no further obligations to Executive upon his termination of employment.
	 
	 	(e)	 	Mitigation or Offset. Executive shall be required to
mitigate the damages provided by this Section 5 by seeking substitute
employment or otherwise and there shall be an offset of the payments or
benefits set forth in this Section 5.

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     6. Governing Law

          This Agreement and the rights and obligations of the parties hereto shall be construed in
accordance with the laws of the Commonwealth of Virginia, without giving effect to the principles
of conflict of laws.

     7. Indemnity and Insurance

          The Company shall indemnify and save harmless Executive for any liability incurred by reason
of any act or omission performed by Executive while acting in good faith on behalf of the Company
and within the scope of the authority of Executive pursuant to this Agreement and to the fullest
extent provided under the Bylaws, the Articles of Incorporation and the Stock Corporation Act of
Virginia, except that Executive must have in good faith believed that such action was in, or not
opposed to, the best interests of the Company, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe that such conduct was unlawful.

          The Company shall provide that Executive is covered by any Directors and Officers insurance
that the Company provides to other senior executives and/or board members.

     8. Cooperation with the Company After Termination of Employment

          Following termination of Executive’s employment for any reason, Executive shall fully
cooperate with the Company in all matters relating to the winding up of Executive’s pending work on
behalf of the Company including, but not limited to, any litigation in which the Company is
involved, and the orderly transfer of any such pending work to other employees of the Company as
may be designated by the Company. Following any notice of termination of employment by either the
Company or Executive, the Company shall be entitled to such full time or part time services of
Executive as the Company may reasonably require during all or any part of the sixty (60)-day period
following any notice of termination, provided that Executive shall be compensated for such services
at the same rate as in effect immediately before the notice of termination.

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     9. Notice

          All notices, requests and other communications pursuant to this Agreement shall be sent by
overnight mail of by fax with proof of transmission to the following addresses:

     If to Executive:

Dr. Jerzy W. Bala

Phone: 

Fax: 

Email:

     If to the Company:

InferX Corp.

Attn: B.K. Gogia, President

1600 International Drive

Suite 100

McLean, Virginia 22102

Phone: (703) 917-0880

Fax: (703)

Email gogia@inferx.com

     10. Waiver of Breach

          Any waiver of any breach of this Agreement shall not be construed to be a continuing waiver or
consent to any subsequent breach on the part of either Executive or of the Company.

     11. Non-Assignment / Successors

          Neither party hereto may assign his/her or its rights or delegate his/hers or its duties under
this Agreement without the prior written consent of the other party; provided, however, that (i)
this Agreement shall inure to the benefit of and be binding upon the successors and assigns of the
Company upon any sale or all or substantially all of the Company’s assets, or upon any merger,
consolidation or reorganization of the Company with or into any other corporation, all as though
such successors and assigns of the Company and their respective successors and assigns were the
Company; and (ii) this Agreement shall inure to the benefit of and be binding upon the heirs,
assigns or designees of Executive to the extent of any payments due to them hereunder. As used in
this Agreement, the term “Company” shall be deemed to refer to any such successor or assign of the
Company referred to in the preceding sentence.

     12. Severability

          To the extent any provision of this Agreement or portion thereof shall be invalid or
unenforceable, it shall be considered deleted there from and the remainder of such provision and of
this Agreement shall be unaffected and shall continue in full force and effect.

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     13. Counterparts

          This Agreement may be executed in one or more counterparts, each of which shall be deemed to
be an original but all of which together will constitute one and the same instrument.

     14. Arbitration

          Executive and the Company shall submit to mandatory and exclusive binding arbitration, any
controversy or claim arising out of, or relating to, this Agreement or any breach hereof where the
amount in dispute is greater than or equal to $50,000, provided, however, that the
parties retain their right to, and shall not be prohibited, limited or in any other way restricted
from, seeking or obtaining equitable relief from a court having jurisdiction over the parties. In
the event the amount of any controversy or claim arising out of, or relating to, this Agreement, or
any breach hereof, is less than $50,000, the parties hereby agree to submit such claim to
mediation. Such arbitration shall be governed by the Federal Arbitration Act and conducted through
the American Arbitration Association (“AAA”) in the District of Columbia, before a single neutral
arbitrator, in accordance with the National Rules for the Resolution of Employment Disputes of the
American Arbitration Association in effect at that time. The parties may conduct only essential
discovery prior to the hearing, as defined by the AAA arbitrator. The arbitrator shall issue a
written decision which contains the essential findings and conclusions on which the decision is
based. Mediation shall be governed by, and conducted through, the AAA. Judgment upon the
determination or award rendered by the arbitrator may be entered in any court having jurisdiction
thereof.

     15. Entire Agreement

          This Agreement and all schedules and other attachments hereto constitute the entire agreement
by the Company and Executive with respect to the subject matter hereof and, except as specifically
provided herein, supersedes any and all prior agreements or understandings between Executive and
the Company with respect to the subject matter hereof, whether written or oral. This Agreement may
be amended or modified only by a written instrument executed by Executive and the Company.

     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date above

	 	 	 	 	 	 	 	 	 
	JERZY BALA

	 	 	 	INFERX CORP.	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Its:	 	 	 	 
	 

	 	 	 	 	 	 	 	 

- 9 -

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