Executive Employment Agreement - Take to Auction.com Inc. and Mitchell Morgan
AMENDED AND RESTATED
EXECUTIVE EMPLOYMENT AGREEMENT
This Amended and Restated Executive Employment Agreement ("Restated
Agreement"), by and between Take to Auction.com, Inc., a Florida corporation
(the "Company"), and Mitchell Morgan ("Employee"), is made and effective as of
the 25th day of August, 1999.
Recitals
The Company and Employee entered into an Executive Employment Agreement
dated August 25, 1999 (the "Original Agreement") which provided for, among other
things, a stock option of 50,000 shares of common stock, par value $.001. The
Company and Employee now wish to amend and restate the Original Agreement to
reflect an increase in the options due to an additional option grant and the
latest stock split by terminating the Original Agreement and replacing the same
with the terms and conditions set forth below as of the date first written
above.
A G R E E M E N T S
In consideration of the mutual promises, terms, covenants and
conditions set forth herein and the performance of each, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties, intending to be legally bound, hereby agree as
follows:
1. EMPLOYMENT AND DUTIES.
(a) Subject to the terms and conditions of this Restated Agreement, the
Company hereby employs Employee as Vice President and Chief Financial Officer of
the Company of the Company. As such, Employee shall have responsibilities,
duties and authority reasonably accorded to and expected of such position and
will report directly to the President and Chief Executive Officer. Employee
hereby accepts this employment upon the terms and conditions herein contained
and, subject to Section 1(b) hereof, agrees to devote Employee's full business
time, attention and efforts to promote and further the business of the Company.
Employee shall faithfully adhere to, execute and fulfill all policies
established by the Company.
(b) Employee shall not, during the term of his employment hereunder, be
engaged in any other business activity pursued for gain, profit or other
pecuniary advantage if such activity interferes with Employee's duties and
responsibilities hereunder. The foregoing limitations shall not be construed as
prohibiting Employee from making personal investments in such form or manner as
will neither require Employee's services in the operation or affairs of the
companies or enterprises in which such investments are made nor violate the
terms of Section 4 hereof.
2. TERM. The Company employs Employee for a period commencing the date hereof
and ending on the third anniversary of the date hereof (the "Term"), subject to
termination prior to
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such date pursuant to Section 5 hereof. Sixty (60) days prior to the end of the
Term (or any renewal term), either the Company or Employee may give notice to
the other of its determination not to renew this Restated Agreement. If a notice
of non-renewal is not delivered, this Restated Agreement will automatically
continue in effect for successive one (1) year renewal terms subject to
termination prior to such date pursuant to Section 5 hereof. If such notice of
non-renewal is given by any party, then Employee's employment will terminate at
the end of such term (or on such other date as the parties mutually agree).
3. COMPENSATION. For all services rendered by Employee, the Company shall
compensate Employee as follows:
(a) BASE SALARY. The base salary payable hereunder to Employee shall
equal $120,000 per year, payable on a regular basis in accordance with the
Company's standard payroll procedures but not less than monthly. The annualized
base salary shall be adjusted annually by the greater of five percent (5%) of
the base salary or the increase in an amount determined at the discretion of the
Compensation Committee of the Board of Directors.
(b) EXECUTIVE PERQUISITES, BENEFITS, AND OTHER COMPENSATION. Employee
shall be entitled to receive additional benefits and compensation from the
Company in such form and to such extent as specified below:
(i) Payment of all premiums for coverage for Employee under
health, hospitalization, disability, dental, life and other insurance plans that
the Company may have in effect from time to time. The benefits provided to
Employee under this clause (i) shall be at least equal to such benefits provided
to executives or employees in similar positions at the Company.
(ii) Reimbursement for all business travel and other
out-of-pocket expenses reasonably incurred by Employee in the performance of
Employee's services pursuant to this Restated Agreement. All reimbursable
expenses shall be appropriately documented in reasonable detail by Employee upon
submission of any request for reimbursement, and in a format and manner
consistent with the Company's expense reporting policy.
(iii) The Company shall provide Employee with other executive
perquisites (including, but not limited to, participation in the Company's
Long-Term Incentive Plan) as may be available to or deemed appropriate for
Employee by the Board and participation in all other Company-wide employee
benefits as available from time to time. Employee shall be entitled to four
weeks of vacation per year in addition to all Federal and religious holidays.
4. NON-COMPETITION AND NON-SOLICITATION.
(a) Employee acknowledges that during the course of Employee's
employment Employee will receive confidential and proprietary information from
and concerning the Company. Employee also acknowledges that the Company will
make substantial investments in the development of the Company's goodwill and in
Employee's professional development. The capital expended to develop this
goodwill directly benefits Employee and should continue to do so in the event
that the relationship between the Company and Employee is terminated.
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Likewise, the Company has conferred and will confer a direct economic benefit on
Employee. Employee agrees that the Company is entitled to protect these business
interests and investments and to prevent Employee from using or taking advantage
of the foregoing economic benefits to the Company's detriment.
(b) Employee agrees that, except for services and duties performed for
or on behalf of the Company according to this Restated Agreement, Employee will
not, during the period of Employee's employment with the Company, and for a
period (the "Restricted Period") of one (1) year immediately following the
termination of Employee's employment under this Restated Agreement, for any
reason whatsoever, directly or indirectly, for himself or on behalf of or in
conjunction with any other person, persons, company, partnership, corporation,
association, enterprise, venture or business of whatever nature:
(i) engage, as an officer, director, shareholder, owner,
partner, joint venturer, lender or in a managerial capacity, whether as an
employee, independent contractor, agent, consultant or advisor or as a sales
representative, in any online auction facilitation or similar business in direct
competition with those aspects of the business of the Company or any subsidiary
of the Company, with which Employee has had any involvement, within United
States of America, Canada and all other countries in which customers of the
Company have access to the world wide web (the "Territory");
(ii) solicit any person who is, at that time, or who has been
within one (1) year prior to that time, an employee of the Company for the
purpose or with the intent of enticing such employee away from or out of the
employ of the Company;
(iii) solicit any person or entity which is, at that time, or
which has been within one (1) year prior to that time, a customer, vendor,
distributor, service provider or supplier of the Company for the purpose of
soliciting or selling products or services in direct competition with those
aspects of the business of the Company or any subsidiary of the Company with
which Employee has had any involvement, within the Territory; or
(iv) solicit any prospective acquisition candidate, on
Employee's own behalf or on behalf of any competitor or potential competitor,
which candidate was, to Employee's knowledge, either called upon by the Company
or for which the Company made an acquisition analysis, for the purpose of
acquiring such entity. Notwithstanding the above, the foregoing covenant shall
not be deemed to prohibit Employee from acquiring as an investment not more than
two percent (2%) of the capital stock of a competing business whose stock is
traded on a national securities exchange or over-the-counter.
(c) In recognition of the substantial nature of such potential damages
and the difficulty of measuring economic losses to the Company as a result of a
breach of the foregoing covenants, and because of the immediate and irreparable
damage that could be caused to the Company for which they would have no other
adequate remedy, Employee agrees that in the event of breach by Employee of the
foregoing covenant, the Company shall be entitled to specific performance of
this provision and injunctive and other equitable relief.
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(d) It is agreed by the parties that the foregoing covenants in this
Section 4 impose a reasonable restraint on Employee in light of the activities
and business of the Company on the date of the execution of this Restated
Agreement and the current plans of the Company and Employee that such covenants
be construed and enforced in accordance with the changing activities, business
and locations of the Company throughout the term of this Restated Agreement,
whether before or after the date of termination of the employment of Employee.
For example, if, during the term of this Restated Agreement, the Company engages
in new and different online auction facilitation activities, or establishes new
locations for its current activities or business and Employee is involved with
providing such new online auction facilitation services, then Employee will be
precluded from soliciting the customers or employees of such new activities or
business or from such new location and from directly competing with such new
business within the United States of America through the term of this Restated
Agreement.
(e) All of the covenants in this Section 4 shall be construed as an
agreement independent of any other provision in this Restated Agreement, and the
existence of any claim or cause of action of Employee against the Company,
whether predicated on this Restated Agreement or otherwise, shall not constitute
a defense to the enforcement by the Company of such covenants. Further, this
Section 4 shall survive the termination of this Restated Agreement and the
termination of Employee's employment with the Company. It is specifically agreed
that the period of one (1) year following termination of employment stated at
the beginning of this Section 4, during which the agreements and covenants of
Employee made in this Section 4 shall be effective, shall be computed by
excluding from such computation any time during which Employee is in violation
of any provision of this Section 4.
5. TERMINATION; RIGHTS ON TERMINATION. This Restated Agreement and Employee's
employment may be terminated for any one of the following causes:
(a) DEATH. The death of Employee shall immediately terminate this
Restated Agreement with no severance compensation due to Employee's estate,
heirs or other descendants or representatives.
(b) DISABILITY. If, as a result of incapacity due to physical or mental
illness or injury, Employee shall have been absent from Employee's full-time
duties hereunder for four (4) consecutive months, then thirty (30) days after
receiving written notice (which notice may occur before or after the end of such
four (4) month period, but which shall not be effective earlier than the last
day of such four (4) month period), the Company may terminate Employee's
employment hereunder provided Employee is unable to resume Employee's full-time
duties at the conclusion of such notice period. Also, Employee may terminate
Employee's employment hereunder if his health should become impaired to an
extent that makes the continued performance of Employee's duties hereunder
hazardous to Employee's physical or mental health or life, provided that
Employee shall have furnished the Company with a written statement from a
qualified doctor to such effect and provided, further, that, at the Company's
request made within thirty (30) days of the date of such written statement,
Employee shall submit to an examination by a doctor selected by the Company who
is reasonably acceptable to Employee or Employee's doctor and such doctor shall
have concurred in the conclusion of Employee's doctor. In the event this
Restated
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Agreement is terminated as a result of Employee's disability, Employee shall
receive from the Company Employee's base salary at the rate then in effect,
payable at the Company's regular and customary intervals for the payment of
salaries as then in effect, less any amounts Employee might receive under the
Company's disability insurance policy, if any, for whatever time period is
remaining under the Term or for six (6) months, whichever amount is less.
(c) CAUSE. The Company may, in its sole and absolute discretion,
terminate the employment of Employee hereunder immediately upon after delivery
of written notice to Employee, or at such later time as the Company may specify
in such notice, for "Cause." As used in this Restated Agreement "Cause"
includes, but is not limited to, the following: (1) Employee's willful and
material breach of this Restated Agreement; (2) Employee's gross negligence in
the performance, or intentional nonperformance, (continuing for ten (10) days
after receipt of written notice of need to cure) of any of Employee's material
duties and responsibilities hereunder; (3) Employee's willful dishonesty or
fraud, whether or not with respect to the business or affairs of the Company,
which affects the operations, property or reputation of the Company; (4)
Employee's conviction of a felony crime; (5) chronic alcohol or illegal drug
abuse by Employee; (6) Employee's willful injury to any independent contractor,
employee or agent of the Company, or to any other person in the course of
Employee's performance of services for the Company; or (7) If Employee sexually
harasses any employee, agent or contractor of the Company or commits any act
which otherwise creates an offensive work environment for employees, agents or
contractors of the Company.
The Company shall not be limited to termination as a remedy for any
damaging, injurious, improper or illegal act by Employee, but may also seek
damages, injunction, or such other remedy as the Company may deem appropriate
under the circumstances. If Employee's employment is terminated for Cause,
Employee agrees to vacate the Company's offices on or before the effective date
of the termination and to return and deliver to the Company at such time all
Company property. In the event of a termination for Cause, as enumerated above,
Employee shall have no right to any severance compensation.
(d) WITHOUT CAUSE. At any time after the commencement of employment,
provided the Company does not have Cause to terminate Employee pursuant to (c)
above, Employee may, without Cause, terminate this Restated Agreement and
Employee's employment, effective ninety (90) days after written notice is
provided to the Company. Employee may only be terminated without Cause by the
Company during the Term hereof if such termination is approved by a majority of
the members of the Board. Should Employee be terminated by the Company without
Cause during the Term, Employee shall be entitled to receive from the Company
one (1) year's base salary (at Employee's then current base) payable over the
course of the year following such termination. The severance compensation shall
be paid in accordance with the Company's standard payroll procedures but not
less than monthly. If Employee resigns or otherwise terminates Employee's
employment without cause pursuant to this Section 5(d), Employee shall receive
no severance compensation.
(e) TERMINATION BY EXECUTIVE FOR GOOD REASON OR UPON CHANGE IN CONTROL.
Upon the termination of the Employee's employment hereunder by the Employee (i)
for "Good Reason", as specified in Section 5(e)(B) hereof, or (ii) within 180
days
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after the occurrence of a "Change in Control" as specified in Section 5(e)(A)
hereof, the Company shall (i) continue to pay to the Employee the base salary
through the effective date of termination specified in such notice and (ii) pay
to the Employee, in a lump sum, an amount equal to 200% of the annual base
salary prevailing on the date of such termination. In addition, upon such
termination, all options to purchase shares of the Company's common stock, if
any, shall accelerate and become immediately exercisable.
(A) For purposes of this Restated Agreement, a "Change in
Control" shall mean:
(i) The acquisition (other than by or from the
Company), at any time after the date hereof, by any person, entity or "group",
within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange
Act of 1934 (the "Exchange Act"), of beneficial ownership (within the meaning of
Rule 13d-3 promulgated under the Exchange Act) of 20% or more of either the then
outstanding shares of common stock or the combined voting power of the Company's
then outstanding voting securities entitled to vote generally in the election of
directors (together with such common stock, "Voting Securities"); or
(ii) Approval by the shareholders of the Company of
(x) a reorganization, merger or consolidation with respect to which persons who
were the shareholders of the Company immediately prior to such reorganization,
merger or consolidation do not, immediately thereafter, own more than 50% of the
combined voting power entitled to vote generally in the election of directors of
the reorganized, merged or consolidated company's then outstanding voting
securities, (y) a liquidation or dissolution of the Company or (z) the sale of
all or substantially all of the assets of the Company, unless the approved
reorganization, merger, consolidation, liquidation, dissolution or sale is
subsequently abandoned.
(B) For purposes of this Restated Agreement, "Good Reason"
shall mean:
(i) The assignment to the Employee of any duties
inconsistent in any respect with the Employee's position (including status,
offices, titles and reporting requirements), authority, duties or
responsibilities as contemplated by Section 1 of this Restated Agreement, or any
other action by the Company which results in a diminution in such position,
authority, duties or responsibilities, excluding for this purpose an isolated,
insubstantial and inadvertent action not taken in bad faith and which is
remedied by the Company promptly after receipt of written notice thereof given
by the Employee;
(ii) Any failure by the Company to comply with any of
the provisions of Section 3 of this Restated Agreement, other than an isolated,
insubstantial and inadvertent failure not occurring in bad faith and which is
remedied by the Company promptly after receipt of written notice thereof given
by the Employee;
(iii) The Company's requiring the Employee to be
based at any office or location other than within a 25 mile radius of the
Company's offices in Miami, Florida, except for
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travel reasonably required in connection with the performance of the Employee's
responsibilities hereunder; or
(iv) Any purported termination by the Company of the
Employee's employment other than as expressly permitted by this Restated
Agreement.
(f) Upon termination of this Restated Agreement for any reason provided
above, Employee shall be entitled to receive all compensation earned and all
benefits and reimbursements due through the effective date of termination.
Additional compensation subsequent to termination, if any, will be due and
payable to Employee only to the extent and in the manner expressly provided
above. All other rights and obligations of the Company and Employee under this
Restated Agreement shall cease as of the effective date of termination, except
that the Company's obligations under Section 10 hereof and Employee's
obligations under Sections 4, 8, 9 and 11 hereof shall survive such termination
in accordance with their terms. Further, unless Employee and the Company
otherwise agree in writing, upon termination of this Restated Agreement for any
reason, Employee will immediately resign from all director, officer or other
positions held with the Company.
(g) If termination of Employee's employment arises out of the Company's
failure to pay Employee the amounts to which he is entitled under this Restated
Agreement or as a result of any other material breach of this Restated Agreement
by the Company, as determined pursuant to the provisions of Section 16 below,
the Company shall pay all amounts and damages to which Employee may be entitled
as a result of such breach, including interest thereon and all reasonable legal
fees and expenses and other costs incurred by Employee to enforce Employee's
rights hereunder. Further, none of the provisions of Section 4 hereof shall
apply in the event this Restated Agreement is terminated as a result of a
material breach by the Company.
6. PARTICIPATION IN STOCK OPTION PLAN.
The Employee shall be granted an option (the "Option") to purchase
145,408 shares of the Company's Common Stock , par value $.001 per share
("Common Stock"), at an exercise price of $0.41 (the fair market value of the
Company's common stock on the date of grant). The Option may be exercised, in
whole or in part, in accordance with the following vesting schedule: (i)
48,469.33 shares of Common Stock shall vest one year after the signing of this
Restated Agreement, (ii) 48,469.33 shares of Common Stock shall vest two years
after the signing of this Restated Agreement, and (iii) 48,469.33 shares of
Common Stock shall vest three years after the signing of this Restated
Agreement. The Option shall expire seven (7) years from the date hereof (the
"Expiration Date"), and must be exercised, if at all, in whole or in part, on or
before the Expiration Date. The Option Agreement will be in substantially the
form of Exhibit A attached hereto.
7. PURCHASE RIGHT ON EMPLOYEE'S STOCK AND OPTIONS.
(a) Irrevocable Option to Purchase. Upon (i) the death or Retirement of
Employee, (ii) the Company's termination of Employee's employment with the
Company by reason of Employee's Disability pursuant to the provisions of Section
5(b) (a "Disability Termination") or
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for any other reason except a termination for Cause pursuant to the provisions
of Section 5(c) (a "Non-Cause Termination"), or (iii) the termination of
Employee's employment with the Company by Employee for any reason other than a
termination which follows less than six months service to the Company or is
effected upon less than 90 days' prior written notice to the Company of such
termination (hereinafter, a "Proper Employee Termination"), then the Company
shall have the exclusive and irrevocable right and option, exercisable in the
sole judgment and discretion of the Board, to purchase and acquire from
Employee, or from Employee's Estate, all of Employee's shares of Company capital
stock ("Stock") (if any) and all of Employee's options or rights to purchase
Stock ("Options") (if any) in accordance with the terms and conditions provided
in this Section 7. Employee or Employee's Estate hereby irrevocably and
unconditionally agrees to transfer Employee's Stock and Employee's Options on
the terms and conditions set forth in this Section 7.
(b) Purchase Price. The purchase price to be paid for any Stock to be
acquired under this Section 7 shall be the fair market value of such Stock as of
the last day of the calendar month immediately preceding the date of death or
termination of employment as described in Section 7(a) hereof. The purchase
price to be paid for Employee's Options to be acquired under this Section 7
shall be the fair market value of the Stock for which Employee's Options are
exercisable (the "Vested Options" as of the last day of the calendar month
immediately preceding the date of death or termination of employment as
described Section 7(a) hereof), less an amount equal to the exercise price of
Employee's Options in respect of such Stock. In each case, the fair market value
of the Stock shall be determined in good faith by the Board (not taking into
account any discount for non-voting nature (if applicable), minority interest or
restriction on transferability) and, if Employee or Employee's Estate does not
object to such determination in a writing delivered to and received by the
Company within ten (10) business days of the Company's delivery of such
determination to such party, such Board' determination shall be conclusive and
binding upon Employee or Employee's Estate, as the case may be, for all purposes
hereunder. If Employee or Employee's Estate makes a timely (i.e., within the 10
business days) written objection to the determination of fair market value made
by the Board, the determination of such fair market value of the Stock shall be
submitted to an investment banking or valuation firm selected by the Board after
consultation with Employee or Employee's Estate (the "Primary Investment Firm"),
whose fees and expenses shall be shared equally by the Company, on the one hand,
and Employee or Employee's Estate, on the other hand. If Employee and the
Company agree in advance in writing to the selection of the Primary Investment
Firm, then such Primary Investment Firm's determination shall be conclusive and
binding upon Employee or Employee's Estate, as the case may be, for all purposes
hereunder. If Employee and the Company do not agree in advance in writing to the
selection of the Primary Investment Firm, then the Primary Investment Firm shall
determine the fair market value of the Stock promptly following its selection by
the Board; if, following such determination of fair market value by such Firm,
either the Company or Employee or Employee's Estate objects to such
determination in a writing delivered to the other party within ten (10) business
days of receipt thereof, the Company and Employee or Employee's Estate shall
mutually agree to a second investment banking or valuation firm (the "Secondary
Investment Firm"), who shall make a determination of such fair market value of
the Stock and whose fees and expenses shall be paid by the person objecting to
the determination made by the Primary Investment Firm. If such valuation by the
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Secondary Investment Firm is procured, it shall be delivered to the other party,
and the average of the fair market values as determined by the Primary
Investment Firm and the Secondary Investment Firm shall be the fair market value
for purposes of this Section 7 and shall be conclusive and binding on all
parties for all purposes hereof.
(c) Upon termination of Employee for Cause, the Company shall have the
right and option to acquire Employee's Stock for the Net Book Value per share of
such Stock, based upon the Company's latest audited financial statements. All of
Employee's Options shall be terminated, expired, void and of no further force or
effect.
(d) Employee must deliver stock certificates representing his Stock to
the Company within five business days of a demand in writing to such effect. If
Employee fails to so deliver the stock certificates, the Company may mail a
check for the purchase price or the net book value purchase price of such Stock
to Employee's last known address and cancel such Stock on the books and records
of the Company and such Stock shall have no further force or effect. In the case
of a negative net book value, no purchase price need be delivered before
canceling the Stock.
8. COMPANY PROPERTY; INVENTIONS.
(a) All records, designs, patents, business plans, financial
statements, manuals, memoranda, lists, and other property delivered to or
compiled by Employee by or on behalf of the Company or their representatives,
vendors, or customers which pertain to the business of the Company shall be and
remain the property of the Company, as the case may be, and be subject at all
times to their discretion and control. Likewise, all correspondence, reports,
records, charts, advertising materials, and other similar data pertaining to the
business, activities, or future plans of the Company which is collected by
Employee shall be delivered promptly to the Company without request by it upon
termination of Employee's employment.
(b) Employee shall disclose promptly to the Company any and all
significant conceptions and ideas for inventions, improvements, and valuable
discoveries, whether patentable or not, which are conceived or made by Employee,
solely or jointly with another, during the period of employment, and which are
directly related to the business or activities of the Company and which Employee
conceives as a result of Employee's employment by the Company. Employee hereby
assigns and agrees to assign all of Employee's interests therein to the Company
or its nominee. Whenever requested to do so by the Company, Employee shall
execute any and all applications, assignments, or other instruments that the
Company shall deem necessary to apply for and obtain Letters Patent of the
United States or any foreign country or to otherwise protect the Company's
interest therein.
9. CONFIDENTIALITY AND PROPRIETARY INFORMATION.
(a) Acknowledgment. Employee acknowledges and agrees that in the course
of rendering services to the Company and its customers, Employee will have
access to and will become acquainted with confidential and proprietary
information about the professional, business and financial affairs of the
Company, its affiliates and its vendors, suppliers and customers, and
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that Employee may have contributed to or may in the future contribute to such
information. Employee further recognizes that Employee is being employed as a
key employee, that the Company is engaged in a highly competitive business, and
that the success of the Company in the marketplace and business depends upon its
goodwill and reputation for integrity, quality and dependability. Employee
recognizes that in order to guard the legitimate interests of the Company it is
necessary for the Company to protect all such confidential and proprietary
information, goodwill and reputation.
(b) Proprietary Information. In the course of Employee's service to the
Company, Employee may have access to confidential know-how, business documents
or information, marketing data, client lists and trade secrets which are
confidential. Such information shall hereinafter be called "Proprietary
Information" and shall include any and all items enumerated in the preceding
sentence which come within the scope of the business activities of the Company
as to which Employee has had or may have access, whether previously existing,
now existing or arising hereafter, whether or not conceived or developed by
others or by Employee alone or with others during the period of his service to
the Company, and whether or not conceived or developed during regular working
hours. "Proprietary Information" shall not include any information which is in
the public domain during the period of service by Employee or becomes public
thereafter, provided such information is not in the public domain as a
consequence of disclosure by Employee in violation of this Restated Agreement.
(c) Fiduciary Obligations. Employee agrees and acknowledges that the
Proprietary Information is of critical importance to the Company and a violation
of this Section 8 will seriously and irreparably impair and damage the Company's
business. Employee therefore agrees, while he is an employee of the Company and
at all times thereafter, to keep all Proprietary Information strictly
confidential.
(d) Non-Disclosure. Except as required by law or order of any court or
governmental entity or in connection with the proper performance of his duties
hereunder, Employee shall not disclose, directly or indirectly (except as
required by law), any Proprietary Information to any person other than (a) the
Company, (b) persons who are authorized employees of the Company at the time of
such disclosure, (c) such other persons, including prospective investors or
lenders, to whom Employee has been instructed to make disclosure by the
Company's Board, or (d) Employee's counsel, so long as such counsel agrees to
keep all Proprietary Information confidential (in the case of clauses (b) and
(c), only to the extent required in the course of Employee's service to the
Company). Upon any termination of Employee's employment hereunder, Employee
shall deliver to the Company all notes, letters, documents, tapes, discs,
recorded data and records which may contain Proprietary Information which are
then in Employee's possession or control and shall not retain, use, or make any
copies, summaries or extracts thereof.
10. INDEMNIFICATION. In the event Employee is made a party to any threatened,
pending, or completed action, suit, or proceeding, whether civil, criminal,
administrative, or investigative (other than an action by the Company against
Employee), by reason of the fact that Employee is or was performing services
under this Restated Agreement, then the Company shall indemnify Employee against
all expenses (including reasonable attorneys' fees), judgments,
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fines, and amounts paid in settlement, as actually and reasonably incurred by
Employee in connection therewith. In the event that both Employee and the
Company are made a party to the same third-party action, complaint, suit, or
proceeding, the Company agrees to engage competent legal representation, and
Employee agrees to use the same representation, provided that if counsel
selected by the Company shall have a conflict of interest that prevents such
counsel from representing Employee, Employee may engage separate counsel and the
Company shall pay all reasonable attorneys' fees of such separate counsel.
Further, while Employee is expected at all times to use Employee's best efforts
to faithfully discharge his duties under this Restated Agreement, Employee
cannot be held liable to the Company for errors or omissions made in good faith
where Employee has not exhibited gross, willful and wanton negligence and
misconduct or performed criminal and fraudulent acts which materially damage the
business of the Company.
11. REPRESENTATIONS OF EMPLOYEE. Employee hereby represents and warrants to the
Company that the execution of this Restated Agreement by Employee and his
employment by the Company and the performance of Employee's duties hereunder
will not violate or be a breach of any agreement with a former employer, client,
or any other person or entity. Further, Employee agrees to indemnify the Company
for any claim, including but not limited to attorneys' fees and expenses of
investigation, by any such third party that such third party may now have or may
hereafter come to have against the Company based upon or arising out of any
noncompetition agreement, invention or secrecy agreement between Employee and
such third party which was in existence as of the date of this Restated
Agreement.
Employee has and will continue to truthfully disclose to the Company
the following matters, whether occurring, at any time during the five (5) years
immediately preceding the date of this Restated Agreement or at any time during
the term of this Restated Agreement:
(1) any criminal complaint, indictment or criminal
proceeding in which Employee is named as a defendant;
(2) any allegation, investigation, or proceeding,
whether administrative, civil or criminal, against Employee by any
licensing authority or industry association; and
(3) any allegation, investigation or proceeding,
whether administrative, civil, or criminal, against Employee for
violating professional ethics or standards, or engaging in illegal,
immoral or other misconduct (of any nature or degree), relating to the
business of the Company.
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12. ASSIGNMENT; BINDING EFFECT. This Restated Agreement shall inure to the
benefit of and be binding on Employee and the Company and Employee's and the
Company's respective heirs, personal representatives, successors and assigns;
provided, however, that Employee shall have no right to assign Employee's rights
or duties under this contract to any other person. In the event of the sale,
merger or consolidation of the Company, Employee specifically agrees that the
Company may assign the Company's rights and obligations hereunder to the
Company's successor, assign or purchaser. In addition, and in any event, the
Company may, at any time, assign the Company's rights and obligations under this
Restated Agreement to any person that is an affiliate of the Company or to any
person which, after any such assignment, employs at least 50% of the employees
employed by the Company immediately prior to the assignment.
13. COMPLETE AGREEMENT; AMENDMENTS. This Restated Agreement supersedes any other
agreements or understandings, written or oral, among the Company and Employee,
and Employee has no oral representations, understandings or agreements with the
Company or any of its officers, directors, or representatives covering the same
subject matter as this Restated Agreement. This written Restated Agreement is
the final, complete, and exclusive statement and expression of the agreement
between the Company and Employee and of all the terms of this Restated
Agreement, and it cannot be varied, contradicted, or supplemented by evidence of
any prior or contemporaneous oral or written agreements. This written Restated
Agreement may not be later modified except by a written instrument signed by a
duly authorized officer of the Company and Employee, and no term of this
Restated Agreement may be waived except by a written instrument signed by the
party waiving the benefit of such term.
14. NOTICE. Whenever any notice is required hereunder, it shall be given in
writing addressed as follows:
To the Company: Take to Auction.com, Inc.
2335 N.W. 107th Avenue, Suite 2M-23
Miami, Florida 33172
Attention: President
To Employee: Mitchell Morgan
13802 SW 83rd Avenue
Miami, Florida 33158
Notice shall be deemed given and effective three (3) days after the
deposit in the U.S. mail of a writing addressed as above and sent first class
mail, certified, return receipt requested, or, in any other case, when actually
received. Either party may change the address for notice by notifying the other
party of such change in accordance with this Section 14.
15. SEVERABILITY. If any portion of this Restated Agreement is held invalid or
inoperative, the other portions of this Restated Agreement shall be deemed valid
and operative and, so far as is reasonable and possible, effect shall be given
to the intent manifested by the portion held invalid or inoperative. Employee
and the Company agree and acknowledge that the provisions of Sections 4 and 9
are material and of the essence to this Restated Agreement. If the
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<PAGE>
scope of any restriction or covenant contained therein should be or become too
broad or extensive to permit enforcement thereof to its fullest extent, then
such restriction or covenant shall be enforced to the maximum extent permitted
by law, and Employee hereby consents and agrees that (a) it is the parties
intention and agreement that the covenants and restrictions contained therein be
enforced as written, and (b) in the event a court of competent jurisdiction
should determine that any restriction or covenant contained therein is too broad
or extensive to permit enforcement thereof to its fullest extent, the scope of
any such restriction or covenant may be modified accordingly in any judicial
proceeding brought to enforce such restriction or covenant, but should be
modified to permit enforcement of the restrictions and covenants contained
herein to the maximum extent the court, in its judgment, will permit.
16. ARBITRATION. Any unresolved dispute or controversy arising under or in
connection with this Restated Agreement or Employee's employment with the
Company (or any termination thereof) shall be settled exclusively by
arbitration, conducted before a panel of three (3) arbitrators in Broward
County, Florida, in accordance with the rules of the American Arbitration
Association then in effect. A decision by a majority of the arbitration panel
shall be final and binding. Judgment may be entered on the arbitrators' award in
any court having jurisdiction. The prevailing party shall receive and the
unsuccessful party shall pay the reasonable fees and expenses of any arbitration
proceeding in connection with this Restated Agreement.
17. GOVERNING LAW. This Restated Agreement shall in all respects be construed
according to the laws of the State of Florida.
18. HEADINGS. The paragraph headings herein are for reference purposes only and
are not intended in any way to describe, interpret, define, or limit the extent
or intent of the Restated Agreement or of any part hereof.
19. COUNTERPARTS. This Restated Agreement may be executed in counterparts, each
of which shall be deemed an original and all of which together shall constitute
but one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have made and entered into this
Restated Agreement as of the date first above written.
The Company:
TAKE TO AUCTION.COM, INC.
By: /s/ Albert Friedman
----------------------------
Name: Albert Friedman
Title: President
Employee:
/s/ Mitchell Morgan
------------------------------
Mitchell Morgan
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