Employment Agreement - Odimo Inc. and Alan Lipton
EMPLOYMENT AGREEMENT
BETWEEN
ODIMO INCORPORATED
AND
ALAN LIPTON
<PAGE>
TABLE OF CONTENTS
ARTICLE I - RECITALS..........................................................1
ARTICLE II - TERM.............................................................1
ARTICLE III - DUTIES..........................................................1
ARTICLE IV - COMPENSATION AND OTHER BENEFITS..................................2
ARTICLE V - AUTOMOBILE; BUSINESS EXPENSES.....................................4
ARTICLE VI - VACATION.........................................................4
ARTICLE VII - TERMINATION OF EMPLOYMENT.......................................4
ARTICLE VIII - RESIGNATION....................................................5
ARTICLE IX - NON-COMPETITION..................................................6
ARTICLE X - NOTICES...........................................................8
ARTICLE XI - CONSTRUCTION OF AGREEMENT........................................8
ARTICLE XII - CHANGE IN CONTROL...............................................9
ARTICLE XIII - MISCELLANEOUS.................................................10
<PAGE>
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT ("Agreement") is made
and entered as of the 27th day of August 2004 between ODIMO INCORPORATED, a
Delaware corporation ("Employer"), and ALAN LIPTON ("Employee").
R E C I T A L S
A. Employer and Employee entered into an employment Agreement dated
July 12, 2004 (the "Prior Agreement").
B. By this Agreement, the parties intend to amend, modify and supersede
in its entirety the Prior Agreement effective on the date hereof.
NOW, THEREFORE, in consideration of the mutual promises contained
herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto mutually agree
as follows:
ARTICLE I - RECITALS
The above stated Recitals are true and correct and are incorporated by
reference into this Agreement.
ARTICLE II - TERM
The initial term of this Agreement shall be three (3) years commencing
as of July 12, 2004 (the "Commencement Date") and ending three (3) years
thereafter unless terminated earlier as provided herein (the "Initial Term").
The Initial Term shall be extended for successive one (1) year periods unless
either party gives the other thirty (30) days prior written notice of its intent
not to renew prior to the expiration of the then current term.
ARTICLE III - DUTIES
A. IN GENERAL. Upon the terms and subject to the conditions of this
Agreement, Employer hereby employs Employee and Employee hereby accepts such
employment with Employer for the term of this Agreement as the President and
Chief Executive Officer of Employer. Employee shall have the powers and duties
with respect to Employer's business interests (the "Businesses") as set forth in
the Bylaws of Employer for its Chief Executive Officer and President and such
other executive and managerial duties as normally associated with such
positions, subject to the direction of the Board of Directors in accordance with
the reasonable policies adopted from time to time by the Board of Directors and
communicated by written notice to Employee (the "Duties"). During the term of
this Agreement and subject to Article
<PAGE>
III.D below, Employee shall devote substantially all of Employee's business
time, attention, skill and efforts to the faithful performance of the Duties.
B. PLACE OF PERFORMANCE. The Duties shall be performed in Sunrise,
Florida, except for such travel in the ordinary course of Employer's business as
may from time to time be reasonably required. Employee's principal place of
business shall be at the executive offices of Employer in Sunrise, Florida.
C. DELEGATION. Notwithstanding anything to the contrary contained in
this Article III, Employee shall have the right and authority to delegate
responsibility to one or more personnel as Employee deems appropriate, and is
hereby authorized to hire on behalf of Employer additional agents, employees and
other representatives which in Employee's reasonable opinion are necessary to
handle the affairs of Employer, and to terminate the employment of any and all
agents, employees and other representatives of Employer, other than appointed
officers of Employer, the termination of whom shall be subject to the prior
approval by Employer's Board of Directors.
D. OTHER ACTIVITIES. Employee shall use Employee's best efforts for the
benefit of Employer by whatever activities Employee reasonably deems appropriate
to maintain and improve Employer's standing in the community generally and among
other members of the industries in which Employer is from time to time engaged,
including such entertaining for business purposes as Employee reasonably
considers appropriate. Employee shall not, without the approval of the Board of
Directors of Employer, render services of a business nature to any other person
or entity, if such activities would interfere with the performance of Employee's
Duties as required under this Agreement or otherwise prevent Employee from
devoting substantially all of Employee's business time, attention, skill and
efforts to the performance of Employee's Duties as required under this
Agreement. Subject to the foregoing limitations, the following activities shall
be deemed to be permissible: (i) owning or managing real or personal property
owned by Employee or Employee's family members; (ii) owning any business which
does not compete, directly or indirectly, with Employer; and (iii) holding
directorships or similar positions in any organization which is not competing
with Employer and which is approved by the Board of Directors of Employer.
ARTICLE IV - COMPENSATION AND OTHER BENEFITS
A. BASE SALARY, SIGNING BONUS, ANNUAL BONUS AND EMPLOYEE BENEFIT PLANS.
For all services rendered by Employee in any capacity during Employee's
employment under this Agreement (including any renewals hereof), Employer shall
pay to Employee as compensation the sum of the amounts set forth in the
following subparagraphs 1 through 4.
1. BASE SALARY. Commencing upon the Commencement Date,
Employee shall be paid the sum of Three Hundred Eighty-five Thousand Dollars
($385,000) on an annualized basis (the "Base Salary"), which amount shall be
paid in accordance with Employer's customary payroll practices.
2
<PAGE>
2. ANNUAL BONUS. On or before one hundred twenty (120) days
subsequent to the completion of Employer's preceding fiscal year, Employee shall
be eligible to receive a cash bonus, such bonus to be within the sole discretion
of Employer's Board of Directors.
3. BENEFIT PLANS. During the term of Employee's employment
with Employer, Employee shall be entitled to participate in all incentive,
savings and retirement plans, practices, policies and programs applicable
generally to other executives of Employer ("Investment Plans") and Employee and
Employee's family shall be eligible for participation in and shall receive all
benefits under, welfare benefit plans, practices, policies and programs
applicable generally to other executives of Employer, including but not limited
to comprehensive medical and dental coverage, disability and basic and
supplemental life insurance ("Welfare Plans").
4. DUES. Employer shall pay the dues of such professional
associations and societies of which Employee is a member in furtherance of
Employee's Duties.
B. PAYMENTS UPON TERMINATION.
1. TERMINATION BY EMPLOYER FOR CAUSE; VOLUNTARY UNILATERAL
DECISION BY EMPLOYEE WITHOUT CAUSE; DEATH OR DISABILITY. If Employee's
employment is terminated (i) by Employer for Cause (as hereinafter defined at
Article VII.B); (ii) by Employee by a voluntary unilateral decision by Employee
without Cause (as defined at Article VII.A); or (iii) as a result of Employee's
death or Disability (as defined below), then Employee shall be entitled to: (1)
the base salary pursuant to Article IV.A.1 earned through the date of
termination; (2) accrued vacation under Article VI hereof; and (3) all
applicable reimbursements from Employer due under Article V hereof. As used in
this Agreement, the term "Disability" means (A) Employee's incapacity due to a
permanent mental or physical illness that prevents Employee from performing
Employee's duties hereunder for 26 consecutive weeks or (B) a physical condition
that renders the performance by Employee of Employee's duties hereunder a
serious threat to the health and well being of Employee. Disability shall be
determined by a physician selected by Employee (or Employee's legal
representative) and reasonably acceptable to Employer.
2. TERMINATION FOR REASONS OTHER THAN TERMINATION BY EMPLOYER
FOR CAUSE VOLUNTARY UNILATERAL DECISION BY EMPLOYEE OR DEATH OR DISABILITY. If
Employee's employment is terminated for any reason by either party, other than
as a result of termination by Employer for Cause (as defined at Article VII.B) a
termination by voluntary unilateral decision by Employee without Cause (as
defined at Article VII.A) or a termination as a result of Employee's death or
Disability, Employee shall be entitled to: (1) in one lump sum payment, that
amount which is equivalent to Employee's base salary paid by Employer to
Employee for the fiscal year immediately prior to Employee's termination; and
(2) all applicable reimbursements from Employer due under Article V. For
purposes of this Agreement, clauses (1) and (2) of this Article IV.B.2 of this
Agreement shall collectively be referred to as the "Severance Benefits." Payment
of the Severance Benefits shall be conditioned upon the execution by Employee of
a
3
<PAGE>
valid release, to be prepared by Employer, in which Employee releases Employer,
to the maximum extent permitted by law, from any and all claims Employee may
have against Employer that relate to or arise out of Employee's employment or
termination of employment.
ARTICLE V - AUTOMOBILE; BUSINESS EXPENSES
A. BUSINESS EXPENSES. Employee is authorized to incur reasonable
expenses to execute and/or promote the Businesses of Employer, including, but
not limited to, expenses related to maintenance of professional licenses and
expenses for reasonable entertainment, travel, and similar items, in each case,
in accordance with the policies, practices and procedures of Employer. Employer
will reimburse Employee for all reasonable travel or other expenses incurred
while on business.
B. AUTOMOBILE. During the term of this Agreement, Employer shall
furnish Employee with an automobile, of make and model acceptable to Employee,
and pay all expenses related to such automobile. Such automobile shall be used
by Employee in the performance of Employee's duties and shall be of a make and
model customary for executives in the community who perform similar duties.
ARTICLE VI - VACATION
Employee will be entitled to four (4) weeks paid vacation annually or
such other time as authorized by the Board of Directors during which time
Employee's compensation shall be paid in full. Vacation Days unused in any
calendar year may not be accumulated and carried forward and used in future
years.
ARTICLE VII - TERMINATION OF EMPLOYMENT
A. TERMINATION BY EMPLOYEE. Employee may terminate Employee's
employment with Employer at any time upon notice to Employer for "Cause." As
used in this Paragraph A, the term "Cause" shall mean:
1. Employer's material breach of this Agreement; provided,
however, that in the event Employee believes that this Agreement has been
materially breached, Employee shall provide Employer with written notice of such
breach and provide Employer with a thirty (30) day period in which to cure or
remedy such breach;
2. Assignment to Employee of regular duties inconsistent with
Employee's position, or status with Employer; or
3. The relocation of Employer's principal executive offices to
a location more than seventy-five (75) miles outside of Sunrise, Florida without
Employee's prior consent.
4
<PAGE>
B. TERMINATION BY EMPLOYER. Employee's employment may be terminated by
Employer at any time upon notice to Employee for "Cause." As used in this
Paragraph B, the term "Cause" shall mean:
1. Employee's material breach of any provision of this
Agreement; provided, however, that in the event Employer believes that this
Agreement has been breached, it shall provide Employee with written notice of
such breach and provide Employee with a thirty (30) day period in which to cure
or remedy such breach;
2. The commission by Employee of a crime, or an act of fraud
or dishonesty against Employer, its subsidiaries or affiliates; or
3. The use by Employee of an illegal substance, including, but
not limited to, marijuana, cocaine, heroin, and all other illegal substances,
and/or the dependence by Employee upon the use of alcohol, which, in any case,
in the opinion of both Employee's family physician and a physician chosen by
Employer, materially impairs Employee's ability to perform Employee's Duties
hereunder, which dependence is not cured or rehabilitated, as determined by
Employee's physician, within three (3) months of receipt of written notice from
Employer to Employee.
C. DEATH OR DISABILITY. This Agreement shall terminate upon the death
or the Disability of Employee. Employee or Employee's heirs or estate (as the
case may be) shall be entitled to the compensation provided for with respect to
a termination by death or Disability in this Agreement.
D. TERMINATION OF OBLIGATIONS. Upon the resignation of Employee or
termination of Employee's employment in accordance with the provisions of this
Article VII, all obligations of Employee and Employer hereunder shall be
terminated except as otherwise provided herein.
E. NO MITIGATION. If Employee's employment under this Agreement
terminates for any reason, with or without Cause, Employee shall have no
obligation to seek other employment in mitigation of damages; and no
compensation received by Employee from other employment or other sources shall
be considered as a mitigation of the amounts owing to Employee hereunder.
ARTICLE VIII - RESIGNATION
Any termination of employment under this Agreement, whether or not
voluntary, will automatically constitute a resignation of Employee as an officer
of Employer and all subsidiaries of Employer and if requested to do so by
Employer's Board of Directors, shall resign as a member of the Board of
Directors of Employer and all subsidiaries of Employer; provided, however, that
Employee shall execute such resignation documents as Employer may reasonably
request in order to evidence such resignation and this provision shall survive
the termination of this Agreement.
5
<PAGE>
ARTICLE IX - NON-COMPETITION
A. NON-COMPETITION. While in the employment of Employer and for the
period of three (3) years thereafter (the "Non-Competition Period"), unless
otherwise agreed to in writing by Employer, Employee will not, directly or
indirectly, own, manage, operate, join, control, be employed by or participate
in the ownership, management, operation or control of, or be connected in any
manner with any business that is engaged in selling luxury items, including
diamonds and jewelry , primarily via the internet.
B. CONFIDENTIAL INFORMATION. During and after the term of the
Agreement, Employee shall not directly or indirectly, divulge, furnish or make
accessible to any party not authorized by Employer to receive it, any of the
proprietary or confidential information or knowledge of Employer, including
without limitation, any financial information, marketing plans, strategies,
trade secrets, data, know-how, processes, techniques and other proprietary
information of Employer or its subsidiaries (the "Confidential Information"),
other than in the course of performing Employee's duties hereunder and with the
consent of Employer, which consent shall not unreasonably be withheld, and in
accordance with Employer's policies and regulations, as established from time to
time, for the protection of the Employer's Confidential Information. The term
"Confidential Information" does not include, and there shall be no obligation
hereunder with respect to information (including office practices and
procedures) that is obvious, or that may readily be determined by any person
reasonably knowledgeable in the industry in which Employer operates by diligent
review and examination of public sources, or that becomes generally available to
the public other than as a result of a disclosure by Employee or any agent or
other representative thereof. Employee shall not have any obligation hereunder
to keep confidential any Confidential Information to the extent disclosure of
any thereof is required by law, or determined in good faith by Employee to be
necessary or appropriate to comply with any legal or regulatory order,
regulation or requirement; PROVIDED, HOWEVER, that in the event disclosure is
required by law, Employee shall provide Employer with reasonable notice of such
requirement so that Employer may seek an appropriate protective order and
Employee shall reasonably cooperate with Employer's efforts to seek such a
protective order. Upon termination of employment on the expiration of the
Agreement, all tangible evidence of such confidential or proprietary information
in the possession of Employee shall be returned to Employer, and Employee shall
not make or retain any copies or excerpts thereof, except that Employee may
retain copies of all materials that may be of a personal nature to Employee.
Employee further agrees not to use any Confidential Information for the benefit
of any person or entity other than Employer or its subsidiaries.
C. NON-SOLICITATION. During the term of the Agreement and for a period
of three (3) years thereafter (the "Non-Solicitation Period"), Employee shall
not influence or attempt to influence customers of Employer or any of its
present or future subsidiaries either directly or indirectly, to divert their
business from Employer to any individual, partnership, firm, corporation, or
other entity that is in competition with the business of Employer or any
subsidiary of Employer at any time during the Non-Solicitation Period. During
the Non-Solicitation Period, Employee shall not directly or indirectly solicit
any of Employer's employees independent
6
<PAGE>
contractor physicians to work for (as an employee or independent contractor) any
business, individual, partnership, firm, corporation, or other entity in
competition with the business of Employer or any subsidiary of Employer at any
time during the Non-Solicitation Period.
D. PATENTS/ASSIGNMENT AND TRANSFER OF INVENTIONS. Employee shall
disclose, assign and transfer to Employer any and all ideas, concepts,
discoveries, inventions, developments, improvements, trade secrets, technical
data, know-how or other materials conceived, devised, invented, developed or
reduced to practice or tangible medium by Employee or any of Employee's
affiliates, or under Employee's direction, during the term of this Agreement
(hereinafter "Inventions"). If any patents shall be developed by Employee or any
patents shall result from the knowledge of Employee during the term of this
Agreement,, Employee shall assign such patents to the Employer. Employee also
agrees to execute such documents and perform such activities as the Employer may
reasonably request to obtain such patents and to assist the Employer, as
reasonably requested by the Employer's Board of Directors in defending its
patents.
E. REMEDIES. In the event of an actual or threatened breach by the
Employee of this Article IX, including any subparagraph hereof, Employer shall
be entitled to an injunction restraining Employee from its prohibited conduct.
If the court should hold that the duration and/or scope (geographic or
otherwise) of the covenants contained herein are unreasonable, then, to the
extent permitted by law, the court may prescribe a duration and/or scope
(geographic or otherwise), that is reasonable and the parties agree to accept
such determination, subject to their rights of appeal. Nothing contained herein
shall be construed as prohibiting Employer or any third party from pursuing any
of the remedies available to it for such breach or threatened breach, including
recovery of damages from Employee. In any action or proceeding to enforce the
provisions of this Article IX, the prevailing party (other than Employee in the
event Employee prevails as a result of a determination that the duration and/or
scope (geographic or otherwise) of the covenants contained herein are
unreasonable) shall be reimbursed by the other party for all costs incurred in
such action or proceeding, including, without limitation, all court costs and
filing fees and all reasonable attorneys' fees, incurred either at the trial
level or at the appellate level. If Employee shall be in violation of any of the
restrictive covenants contained in this Agreement, then the time limitation
otherwise applicable to such restrictive covenant shall be extended for a period
of time equal to the period of time during which such breach or breaches occur.
If Employer seeks injunctive relief from such breach in any court, then the
covenant shall be extended for a period of time equal to the pendency of such
proceedings, including all appeals. The existence of any claim or cause of
action by Employee against Employer, whether predicated upon this Agreement or
otherwise, shall not constitute a defense to the enforcement by Employer of the
foregoing restrictive covenant, but shall be litigated separately.
F. ACKNOWLEDGMENTS BY EMPLOYEE. Employee understands that the
restrictions set forth in this Article IX may limit Employee's ability to earn a
livelihood in a business similar to the business of Employer or any subsidiary
thereof, but Employee nevertheless believes that Employee has received and will
receive sufficient consideration and other benefits as an employee of Employer
and as otherwise provided hereunder to justify clearly such restrictions
7
<PAGE>
which, in any event (given Employee's education, skills and ability), Employee
does not believe would prevent Employee's from earning a living. Employee
acknowledges that the geographic boundaries, scope of prohibited activities, and
duration of this Article IX are reasonable in nature and are no broader than are
necessary to maintain the confidentiality and the goodwill of Employer's
proprietary information, plans and services and to protect the other legitimate
business interests of Employer.
ARTICLE X - NOTICES
Any notice, request, demand, offer, payment or communication required
or permitted to be given by any provision of this Agreement shall be deemed to
have been delivered and given for all purposes if written and if (a) delivered
personally or by courier or delivery service, at the time of such delivery; or
(b) directed by registered or certified United States mail, postage and charges
prepaid, addressed to the intended recipient, at the address specified below, at
such time that the intended recipient or its agent signs or executes the
receipt:
If to Employer: Odimo Incorporated
14001 NW 4th Street
Sunrise, FL 33325
Attn: Chairman of the Board
If to Employee: Alan Lipton
644 Ocean Boulevard
Golden Beach, Fl 33160
Any party may change the address to which notices are to be mailed by giving
written notice as provided herein to the other party. Commencing immediately
after the receipt of such notice, such newly designated address shall be such
person's address for purposes of all notices or other communications required or
permitted to be given pursuant to this Agreement.
ARTICLE XI - CONSTRUCTION OF AGREEMENT
A. FLORIDA LAW. This Agreement shall be considered for all purposes a
Florida document and shall be construed pursuant to the laws of the State of
Florida, and all of its provisions shall be administered according to and its
validity shall be determined under the laws of the State of Florida without
regard to any conflict or choice of law issues.
B. GENDER AND NUMBER. Whenever appropriate, references in this
Agreement in any gender shall be construed to include all other genders,
references in the singular shall be construed to include the plural, and
references in the plural shall be construed to include the singular, unless the
context clearly indicates to the contrary.
8
<PAGE>
C. CERTAIN WORDS. The words "hereof," "herein," "hereunder," and other
similar compounds of the word "here" shall mean and refer to the entire
Agreement and not to any particular article, provision or paragraph unless so
required by the context.
D. CAPTIONS. Paragraph titles or captions contained in this Agreement
are inserted only as a matter of convenience and/or reference, and they shall in
no way be construed as limiting, extending, defining or describing either the
scope or intent of this Agreement or of any provision hereof.
E. SEVERABILITY. The invalidity or unenforceability of any provision
hereunder (or any portion of such a provision) shall not affect the validity or
enforceability of the remaining provisions (or remaining portions of such
provisions) of this Agreement.
ARTICLE XII- CHANGE IN CONTROL
This Agreement shall continue in full force and effect notwithstanding
any change in control, merger, consolidation or reorganization of any kind
involving Employer or the sale of all or substantially all of its assets. This
Agreement shall be binding upon Employer and Employee and their respective
heirs, executors, administrators, successors and assigns.
Notwithstanding anything to the contrary contained herein, if at any
time during the term of this Agreement and any renewal thereof, there shall be a
Change in Control (as hereinafter defined) of Employer, and if such Change in
Control results in a diminution in Employee's compensation, responsibilities or
position such that Employee cannot in good faith continue to fulfill the
responsibilities for which he is employed, as determined by Employee in his sole
discretion during the six (6) month period commencing on the date of the Change
of Control and ending on the date with is (6) months thereafter, and if such
Change in Control did not occur due to Employee's intentional bulk sale of
voting shares of Employer owned by him directly to such control persons or
group, then Employee shall have the option of terminating this Agreement upon
ten (10) days' notice and, in such event Employer shall pay to Employee at the
time of such termination the Severance Benefits. Said lump sum payment shall be
in lieu of any and all compensation due to Employee for the years that would
otherwise be remaining for the term of this Agreement. Upon receipt of said lump
sum payment, this Agreement and all rights and duties of the parties shall be
terminated.
As used herein, "Change in Control" shall mean the occurrence of any
one of the following: (i) Employer enters into an agreement of reorganization,
merger, or consolidation pursuant to which Employer or a subsidiary is not the
surviving corporation; (ii) Employer sells substantially all of its assets to a
purchaser other than a subsidiary; or (iii) shares of stock of Employer
representing in excess of fifty percent (50%) of the total combined voting power
of all outstanding classes of stock of Employer are acquired, in one transaction
or a series of transactions, by a single purchaser or group of related
purchasers (as such terms are defined in Rule 12b-2 under the Securities
Exchange Act of 1934, as amended).
9
<PAGE>
ARTICLE XIII - MISCELLANEOUS
A. ENTIRE AGREEMENT. This Agreement (and all other documents executed
simultaneously herewith or pursuant hereto) constitutes the entire agreement
among the parties pertaining to the subject matter hereof, and supersedes and
revokes any and all prior or existing agreements, written or oral, relating to
the subject matter hereof, and this Agreement shall be solely determinative of
the subject matter hereof.
B. RESTRICTIVE COVENANT. In the event the non-competition,
non-solicitation clause or any other restrictive covenant of this Agreement
shall be deemed unenforceable, invalid or overbroad in whole or in part for any
reason, then any arbitration panel or court of competent jurisdiction is hereby
authorized, requested and instructed to reform such provision(s) to provide for
the maximum competitive restraints upon Employee's activities (in time and
geographic area), which may then be legal and valid.
C. WAIVER. Either Employer or Employee may, at any time or times, waive
(in whole or in part) any rights or privileges to which Employee or it may be
entitled hereunder. However, no waiver by any party of any condition or of the
breach of any term, covenant, representation or warranty contained in this
Agreement, in any one or more instances, shall be deemed to be or construed as a
further continuing waiver of any other condition or of any breach of any other
terms, covenants, representations or warranties contained in this Agreement, and
no waiver shall be effective unless it is in writing and signed by the waiving
party.
D. ATTORNEYS' FEES. In the event that either party shall be required to
retain the services of an attorney to enforce any of Employee's or its rights
hereunder, the prevailing party in any arbitration or court action shall be
entitled to receive from the other party all costs and expenses including (but
not limited to) court costs and attorneys' fees (whether in the arbitration or
in a court of original jurisdiction or one or more courts of appellate
jurisdiction) incurred by him or it in connection therewith. The parties hereby
expressly confer on the arbitrator the right to award costs and attorneys' fees
in the arbitration.
E. DISPUTE RESOLUTION. Except for any dispute or controversy in which
Employer is seeking injunctive relief pursuant to Article IX, Employee and
Employer shall settle by arbitration any dispute or controversy arising in
connection with this Agreement, whether or not such dispute involves a plan
subject to the Employee Retirement Income Security Act of 1974, as amended. Such
arbitration shall be conducted in accordance with the rules of the American
Arbitration Association before a panel of three arbitrators sitting in Broward
County, Florida or such other location as shall be mutually agreed by the
parties. The award of the arbitrators shall be final and nonappealable, and
judgment may be entered on the award of the arbitrators in any court having
proper jurisdiction. THE ARBITRATORS SHALL HAVE NO AUTHORITY TO AWARD PUNITIVE
DAMAGES UNDER ANY CIRCUMSTANCES (WHETHER IT BE EXEMPLARY DAMAGES, TREBLE
DAMAGES, OR ANY OTHER PENALTY OR PUNITIVE TYPE OF DAMAGES) REGARDLESS OF WHETHER
SUCH DAMAGES MAY BE AVAILABLE UNDER APPLICABLE LAW, EMPLOYEE AND EMPLOYER HEREBY
10
<PAGE>
EACH WAIVING THEIR RIGHT, IF ANY, TO RECOVER PUNITIVE DAMAGES IN CONNECTION WITH
ANY SUCH CLAIMS, DISPUTES OR DISAGREEMENTS REGARDLESS OF WHETHER SUCH CLAIM,
DISPUTE OR DISAGREEMENT ARISES UNDER THE LAW OF CONTRACTS, TORTS, (INCLUDING,
WITHOUT LIMITATION, NEGLIGENCE OF EVERY KIND AND STRICT LIABILITY WITHOUT
FAULT), OR PROPERTY, OR AT COMMON LAW OR IN EQUITY OR OTHERWISE. EMPLOYEE
ACKNOWLEDGES THAT BY SIGNING THIS AGREEMENT) EMPLOYEE IS WAIVING ANY RIGHT THAT
EMPLOYEE MAY HAVE TO A JURY TRIAL OR, OTHER THAN AS PROVIDED BY SECTION 16, A
TRIAL BEFORE A JUDGE IN CONNECTION WITH, OR RELATING TO, A CLAIM.
F. VENUE. Without limiting Paragraph E above, any litigation arising
hereunder shall be instituted only in Broward County, Florida, the place where
this Agreement was executed, and all parties hereto agree that venue shall be
proper in said county for all such legal or equitable proceedings.
G. ASSIGNMENT. The rights and obligations of the parties under this
Agreement shall inure to the benefit of and shall be binding upon their
successors, assigns, and/or other legal representatives. Additionally, covenants
in this Agreement which are for the benefit of Employer also shall run in favor
of Employer's subsidiaries. This Agreement shall not be assignable by Employer
or Employee. The services of Employee are personal and Employee's obligations
may not be delegated by Employee's except as otherwise provided herein.
H. AMENDMENT. This Agreement may not be amended, modified, superseded,
canceled, or terminated, and any of the matters, covenants, representations,
warranties or conditions hereof may not be waived, except by a written
instrument executed by Employer and Employee or, in the case of a waiver, by the
party to be charged with such waiver.
I. NO THIRD PARTY BENEFICIARY. Nothing expressed or implied in this
Agreement is intended or shall be construed to confer upon or give any person,
other than Employer and Employee and their respective successors and permitted
assigns, any rights or remedies under or by reason of this Agreement.
J. INDEMNIFICATION. To the fullest extent permitted by law and
Employer's certificate of incorporation and by-laws, Employer shall promptly
indemnify Employee for all amounts (including, without limitation, judgments,
fines, settlement payments, losses, damages, costs and expenses (including
reasonable attorneys' fees)) incurred or paid by the Employee in connection with
any action, proceeding, suit or investigation arising out of or relating to the
performance by Employee of services for (or acting as a fiduciary of any
Employee benefit plans, programs or arrangements of) Employer or any of its
subsidiaries or affiliates, including as a director, officer or employee of
Employer or any such subsidiary or affiliate. Employer also agrees to maintain a
directors' and officers' liability insurance policy covering Employee to the
extent Employer provides such coverage for its other executive officers.
11
<PAGE>
K. TAX WITHHOLDING. All payments to the Employee under this Agreement
will be subject to the withholding of all applicable employment and income
taxes.
L. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, and any such counterpart shall, for all purposes, be deemed an
original, but all such counterparts together shall constitute but one and the
same instrument.
[SIGNATURES ON NEXT PAGE]
12
<PAGE>
IN WITNESS WHEREOF, Employer and Employee have caused this Agreement to
be executed on the day and year first above written.
Odimo Incorporated
By: /s/ JEFFREY KORNBLUM
-------------------------------------
Name: Jeffrey Kornblum
Title: Chief Operating Officer
ALAN LIPTON
/s/ ALAN LIPTON
-----------------------------------------
13