Employment Agreement - US Audiotex Corp., Imperial Bank and Michael Presto
EMPLOYMENT AGREEMENT
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This Employment Agreement (this "Agreement") is made as of September 1999
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by and among U.S. Audiotex Corporation, a Delaware corporation (the "Company"),
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Imperial Bank ("Imperial) and Michael Presto ("Executive").
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RECITALS
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WHEREAS, the Company desires to employ Executive to serve as Chief
Operating Officer of the Company on the terms and conditions herein provided;
WHEREAS, Executive desires to become an employee of the Company on the
terms and conditions herein provided;
NOW, THEREFORE, in consideration of the mutual covenants herein contained
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties agree as follows:
1. Employment. The Company hereby employs Executive, subject to the
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terms and conditions herein provided. During the Employment Period (as defined
below), Executive shall faithfully and diligently perform his duties under this
Agreement and shall use his best efforts to promote the interests of the
Company.
2. Term. Subject to the terms and conditions hereof, the initial term of
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employment of Executive by each Company under this Agreement shall be for the
period commencing on the date hereof (the "Commencement Date") and expiring when
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terminated as provided in Section 8 hereof (the "Expiration Date"). For
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purposes hereof, such period is referred to herein as the "Employment Period").
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3. Executive's Obligations.
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In his capacity as an executive of the Company, Executive shall report
directly to the Chief Executive Officer Thomas R. Evans. Executive shall at
all times comply with and be subject to the Company's policies, procedures,
directives and regulations as established by the Company from time to time.
Executive accepts such employment, responsibility and authority and agrees to
perform the services of Chief Operating Officer of the Company and such other
services as shall from time to time be reasonably assigned to him and agrees to
devote all of his working time, skill and attention to such services.
Notwithstanding the foregoing, the parties agree that the Executive may
continue any educational, charitable and community activities (including
membership on the board of educational, charitable or community organizations)
in which he is engaged on the date hereof and may engage in other educational,
charitable and community activities (including
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membership on the board of educational, charitable or community organizations)
and serve on boards of directors of other companies provided such activities do
not materially interfere with the performance of his duties to the Company.
4. Executive's Compensation and Benefits. During the Employment Period,
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as full compensation to the Executive for his performance of the services
hereunder and for his acceptance of the responsibilities described herein, the
Company agrees to pay the Executive, and the Executive agrees to accept, the
following salary and other benefits:
4.1 Base Salary. From the Commencement Date of this agreement the Company
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shall pay the Executive a salary at the annual rate of $200,000. The base
salary due the Executive hereunder (the "Base Salary") shall be payable in
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accordance with the Company's standard payment policy, less any amounts required
to be withheld by the Company from such Base Salary pursuant to the benefit
plans in which Executive participates pursuant to Section 4.5 and applicable
laws and regulations.
4.2 Bonus. (a) The Executive shall be eligible to receive annual bonuses
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(each a "Bonus") at the discretion of, and in the amounts and at the times
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determined by, the compensation committee. Executive agrees that there can be
no assurance that the Compensation Committee will grant a Bonus in any year
except that the Executive shall be paid a guaranteed bonus in the minimum
amount of $100,000 in the first year of his employment ("Guaranteed Payment").
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4.3 Long Term Incentives. On the Commencement Date, the Company will
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grant Executive options to acquire 125,000 shares of its common stock, which
represent 2.5% of the Company's Fully Diluted Common Stock on the Commencement
Date (inclusive of the 125,000 share option grant to Executive). On the IPO
Date, the Company will grant executive additional options to acquire such number
of shares of its common stock so that, when combined with the options granted in
the immediately preceding sentence, Executive will have received pursuant to
this Section 4.3 options to acquire shares of common stock equal to an aggregate
of two and one-half percent (2.5%) of the Fully Diluted Common Stock of the
Company outstanding as of the IPO Date (inclusive of the option grant to
Executive). For purposes of this Section 4.3, "Fully Diluted Common Stock"
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shall mean the aggregate of (i) the number of shares of Company common stock
authorized and outstanding determined on an as-converted basis and (ii) the
number of shares of Company common stock subject to outstanding options,
warrants and other rights to acquire Company common stock determined on an as-
converted bases. Such options will be non-transferable and shall be exercisable
at any time for a ten year period after the date of grant. The exercise price
of such options shall be equal to $4.00 per share. All of the option shares
shall initially be unvested and subject to repurchase by the Company at the
exercise price paid per share. Subject to Section 8 hereof, Executive shall
acquire a vested interest in, and the Company's repurchase right shall
accordingly lapse with respect to one-third of the option shares granted
pursuant to this Section 4.3 on the first anniversary of the Commencement Date
and the remaining option shares in a series of twenty four (24) successive equal
monthly installments during the Employment Period. Following termination of the
Employment Period, Executive
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shall acquire a vested interest in, and the Company's repurchase right shall
accordingly terminate with respect to, all of any unvested option shares for
which the Company did not exercise its repurchase right within thirty (30) days
following such termination. Executive shall be entitled to pay the exercise
price of such options in the same manner and on the same terms as the Company
offers to members of its senior management who receive similar options.
4.4 Other Benefit Plans. Subject to all eligibility requirements,
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and to the extent permitted by law, the Executive shall be entitled to
participate in any and all employee benefit plans (including, but not limited
to, retirement, life insurance, medical, dental, disability, and savings plans)
established or maintained by the Company from time to time for the benefit of
their employees (or executives) in general.
4.5 Vacation. The Executive shall be entitled to four weeks paid
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vacation per annum.
4.6 Shareholder Rights. If, at any time, Imperial is granted
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"piggy-back" registration rights with respect to its shares of the Company's
common stock, Executive shall, at such time, be granted "piggy-back"
registration rights similar to those granted to Imperial, subject to customary
underwriters carve-backs and a carve-back in proportion to such shares sold by
Imperial, if any. Executive shall have "tag-along" rights, on a proportionate
basis, on any sales of Company shares by Imperial prior to consummation of an
initial public offering by the Company.
5. Reasonable Expenses. The Company will reimburse the Executive for all
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reasonable business expenses, including travel and lodging, which are properly
incurred by him in the performance of his duties hereunder, upon presentation of
proper vouchers therefor and in accordance with written policies established
from time to time by the Company for such reimbursements.
6. Assistance. Executive shall make himself reasonably available, upon
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the request of the Company, to testify or otherwise assist in litigation,
arbitration, or other disputes involving the Company, or any of its officers,
directors, employees, subsidiaries or affiliates, during the Employment Period.
7. Covenant Not to Compete.
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7.1 General Covenant. During the Employment Period and for a period of
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one year after the termination of this Agreement pursuant to Sections 8.3, 8.4,
or 8.5.1 (the "Non-Compete Period"), except in pursuit of his services as an
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officer and employee of the Company, Executive shall not, either individually or
as a partner, joint venturer, consultant, shareholder, member or Representative
(as defined below) of another Person (as defined below) or otherwise, directly
or indirectly, participate in, engage in, or have a financial or management
interest in, promote, or assist any other Person in any business operation or
any enterprise if such business operation or enterprise engages, or would
engage, in a Restricted Business in a Restricted Area; provided,
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however, the Executive may own up to one percent of the outstanding
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equity securities of any Person.
For purposes of this Section 7.1: "Person" means an individual, a
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partnership, a limited liability company, a joint venture, a corporation, a
trust, an unincorporated organization, a division or operating group of any of
the foregoing, a government or any department or agency thereof or any other
entity.
"Representative" means any officer, director, principal, agent, employee,
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consultant or other representative of a Person.
"Restricted Business" means any business involved in the processing of
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payments to government entities or any other business in which the Company is
actively engaged on the date of termination of the Employment Period.
"Restricted Area" means any country in which the Company or its
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subsidiaries conducts a Restricted Business on the date of termination of the
Employment Period.
7.2 Nonsolicitation. During the Non-Compete Period and for a period of
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one year following termination of the Agreement, except a termination pursuant
to Section 8.5.2, Executive shall not, directly or indirectly (i) employ or
seek to employ any person who is at the date of termination of this Agreement,
an officer, general manager or director or equivalent or more senior level
employee of the Company, their subsidiaries or affiliates or otherwise solicit,
encourage, cause or induce any such employee of the Company, its subsidiaries or
affiliates to terminate such employee's employment with the Company, its
subsidiaries or affiliates for the employment of another company (including for
this purpose the contracting with any person who was an independent contractor
(excluding consultant) of the Company during such period), except for persons
who are recruited by Executive to the Company within ninety (90) days after the
Commencement Date and are identified in writing by Executive to the Company
after the end of such period, or (ii) take any action that would interfere with
the relationship of the Company, its subsidiaries and affiliates with their
respective suppliers and franchisees, except to the extent permitted by the
Board.
7.3 Enforcement. Executive agrees that all restrictions and agreements
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contained in this Section 7, including, without limitation, those relating to
duration and restricted territory, are necessary and fundamental to the
protection of the business of the Company and are reasonable and valid.
Executive agrees that the remedy at law for any breach of this Agreement will be
inadequate, and that the damages flowing from such breach are not readily
susceptible to being measured in monetary terms. Accordingly, Executive agrees
that upon breach of this Section 7, the Company shall be entitled to immediate
injunctive relief and may obtain a temporary order restraining any threatened
further breach. Nothing in this Agreement shall be deemed to limit the Company's
remedies at law or in equity for any breach by Executive of any of the
provisions of this Agreement that may be pursued or availed of by the Company.
Nothing contained herein
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shall be construed as prohibiting the Company from pursuing any other remedies
available to it for such breach or threatened breach, including the recovery of
damages from the Executive.
Although the restrictions contained in Sections 7. 1 and 7.2 are considered
by the parties to be fair and reasonable in the circumstances, it is recognized
that restrictions of such nature may fail for technical reasons, and accordingly
it is hereby agreed that if any of such restrictions shall be adjudged to be
void or unenforceable for whatever reason, but would be valid if part of the
wording thereof were deleted, or the period thereof reduced or the area dealt
with thereby reduced in scope, the restriction contained in Sections 7.1 and 7.2
shall be enforced to the maximum extent permitted by law, and the parties
consent and agree that such scope or wording may be accordingly judicially
modified in any proceeding brought to enforce such restrictions.
Notwithstanding that the Executive's employment hereunder may be terminated
as provided in Section 8, this Agreement shall continue in full force and effect
insofar as is necessary to enforce the covenants and agreements of the Executive
contained in this Section 7.
8. Termination.
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8.1 Termination by the Company Without Cause. The Company may terminate
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the Employment Period upon sixty (60) days' prior written notice to Executive
for any reason other than the reasons specified in Sections 8.2, 8.3 and 8.4.
Upon termination of the Employment Period pursuant to this Section 8.1, neither
the Company on the one hand, nor Executive, on the other hand, will have any
liability or obligation to the other in respect of this Agreement, except that
(A) for the one-year period following the date of such notice, Executive shall
be entitled to continue to (i) receive the Base Salary then in effect and (ii)
to the extent permitted by such plans, participate in the employee benefit plans
maintained by the Company in which Executive participated as of the date of such
notice, or, to the extent not permitted by such plans, receive equivalent
benefits or cash payments on an individual basis, (B) in addition to options or
shares that are vested through the date of termination of the Employment Period,
all of the remaining unvested options or shares as of the date of termination of
the Employment Period (such number of options or shares hereinafter referred to
as the "Severance Shares") shall immediately vest, notwithstanding anything to
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the contrary in any other agreement between Executive and the Company and (C)
Executive shall continue to be entitled to the Guarantee Payment set forth in
Section 4.2. In the
<PAGE>
event of any termination of employment hereunder, Executive shall be under no
obligation to seek other employment and there shall be no offset against any
amounts due Executive under this Agreement on account of any remuneration
attributable to any subsequent employment that Executive may obtain. If
Executive dies after a termination of employment but prior to receiving all
amounts due him, the remaining amounts shall be paid to his designated
beneficiary or, if none, his estate.
8.2 Death. If Executive dies during the Employment Period, the Employment
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Period applicable to the Company shall automatically terminate and all
obligation of the parties shall terminate effective the date of death, except
for obligations under any and all employee benefit plans maintained by the
Company in which the Executive participates as of the date of termination, for
which the terms of the plans shall govern. However, the Severance Shares shall
immediately vest, notwithstanding anything to the contrary in any other
agreement between the Executive and the Company.
8.3 Disability. If Executive becomes Disabled (as hereinafter defined)
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during the Employment Period, the Company shall be entitled to terminate his
employment and the Employment Period upon written notice to Executive or a
person acting on his behalf. In the event of such termination, Executive shall
be released from any duties hereunder, and for the one year period following
such termination the Company shall be required to pay Executive the Base Salary
then in effect ("Salary Continuation Period"). In such event, to the extent
permitted by such plans, Executive shall also continue to participate during
the Salary Continuation Period in the employee benefit plans maintained by the
Company in which Executive participates as of the date of termination. In
addition, the Severance Shares shall immediately vest, notwithstanding anything
to the contrary in any other agreement between the Executive and the Company.
For purposes of this Agreement, "Disabled" shall mean mental or physical
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impairment or incapacity rendering Executive substantially unable to perform his
duties under this Agreement for a period of longer than 120 days out of any 360
day period during the Employment Period. A determination of whether Executive
is Disabled shall be made by the Company in its sole discretion upon its own
initiative after obtaining certification from a duly licensed physician or upon
request of Executive or a person acting on his behalf.
8.4 Termination by the Company for Cause. The Company may terminate the
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Employment Period effective immediately upon written notice to Executive in the
event of any of the following:
(i) Executive's material breach of any material term or condition
of this Agreement, such breach continuing unremedied for 30 days after
written notice thereof from the Company specifying the acts
constituting the breach and requesting that they be remedied, it being
understood that issues with respect to
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the quality of Executive's performance or results thereof shall not be
grounds for termination under this Section 8.4;
(ii) Executive's
(A) personal dishonesty, fraud, misappropriation, willful
misconduct or breach of fiduciary duty, in each such case materially
harmful to the Company's property, personnel or business operations,
or materially damaging to the Company's relationships with its
customers, clients or employees or materially detrimental to the
goodwill of the Company; or
(B) intentional failure to perform the duties of his
employment or his other obligations hereunder, or any continuing
action by Executive materially detrimental to the goodwill of the
Company or materially damaging to the Company's relationships with its
customers, clients or employees, which non-performance or actions
remain unremedied for 30 days after written notice thereof from the
Company specifying in detail the non-performance or actions and
requesting that they be remedied, it being understood that issues with
respect to the quality of Executive's performance or results thereof
shall not be grounds for termination under this Section 8.4;
(iii) Executive's pleading guilty or no-contest to, or conviction
of, a felony or a crime involving moral turpitude or fraud;
(iv) misappropriation (or attempted misappropriation) of
company's funds or property or of a business opportunity of the
Company, including attempting to secure or securing any personal
profit in connection with any transaction entered into on behalf of
the Company;
(v) Executive's conviction of any criminal offense involving
dishonesty or breach of trust or money laundering, or Executive's
agreement to enter into a pretrial diversion or similar program in
connection with a prosecution for such offense;
(vi) Executive's excessive drunkenness, use of illegal drugs or
abuse of any controlled substance; or
(vii) Executive's excessive absenteeism not related to
Executive's illness, which absenteeism remains unremedied for 30 days
after written notice thereof requesting that it be remedied.
Upon termination of the Employment Period pursuant to this Section 8.4, the
Executive will be bound by the provisions of Section 7 and the Company will not
have any liability to Executive in respect of this Agreement, including, without
limitation, claims for damages or liability to the Company by Executive for
compensation, severance payments and other benefits which would have accrued to
Executive hereunder after termination; provided, however, that all
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<PAGE>
compensation, benefits and reimbursements accrued through the date of
termination shall be paid to Executive at the times normally paid by the
Company. Upon termination of the Employment Period pursuant to this Section 8.4,
all of Executive's unvested options to acquire share of common stock of the
Company shall be canceled.
8.5 Termination by Executive.
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8.5.1 Voluntary Termination. Executive may terminate the Employment
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Period upon sixty (60) days' written notice to the Company and, upon such
termination, the provisions of the last paragraph of Section 8.4 shall apply,
except in the event that Executive terminates this Agreement pursuant to Section
8.5.2. Upon termination of the Employment Period pursuant to this Section
8.5.1, all of Executive's unvested options to acquire shares of common stock of
the Company shall be canceled. Executive agrees, in connection with the
termination of the Employment Period pursuant to this Section 8.5.2, not to
disclose to the media his intent to resign.
8.5.2 Termination for Good Reason. Executive may terminate the
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Employment Period at any time for Good Reason. "Good Reason" shall mean (i) a
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material diminution of Executive's authority, duties and responsibilities as
provided in Section 3, (ii) a reduction in or failure to pay timely Executive's
base salary, or (iii) the appointment of any person to a superior executive
position, (iv) any relocation of the Company's corporate headquarters to a place
90 miles or more outside of New York City, (v) the Company's breach of any
material term or condition of this Agreement and (vi) after expiration of the
six (6) month period following a Change in Control (as defined in Section 9.2);
provided, however, that each of the reasons set forth in (i) through (vi) of
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the preceding sentence shall be identified in written notice thereof delivered
by Executive to the Company specifying the nature of the reason and the Company
shall have been afforded a period of thirty (30) days to respond to such notice
and cure the condition set forth in such notice if capable of being cured. If
Executive terminates this Agreement for Good Reason, the provisions of Section
8.1 shall apply and Executive shall be bound by the provisions of Section 7.
9. Change in Control.
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9.1 Acceleration of Options. If a Change in Control occurs, all of
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Executive's options to acquire shares of common stock of the Company shall
immediately vest and shall become immediately exercisable and all of Executive's
option shares shall immediately vest and cease to be subject to repurchase
rights, if any, notwithstanding anything to the contrary in any other agreement
between Executive and the Company. In addition, if the Company terminates the
Employment Period without cause as provided in Section 8.1 and within three (3)
months thereafter the Company enters into a definitive agreement for a Change in
Control (as defined in Section 9.2) occurs, Executive shall be entitled to the
benefits set forth in this Section 9.1.
9.2 Definition of Change of Control. For purposes of this Section 9,
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"Change in Control" shall mean: (i) the sale, lease, transfer, conveyance or
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other disposition (other than by
<PAGE>
way of merger or consolidation), in one or a series of related transactions, of
all or substantially all of the assets of the Company and subsidiaries (if any),
taken as a whole to any Person other than to the Company or one of its wholly-
owned subsidiaries; (ii) the Company consolidates with or merges into another
Person (other than a subsidiary) or any Person (other than a subsidiary)
consolidates with, or merges into, the Company, in any such event pursuant to a
transaction in which the outstanding shares of common stock of the Company are
changed into or exchanged for cash, securities or other property, other than any
such transaction where the holders of the shares of common stock of the Company
immediately prior to such transaction own, directly or indirectly, not less than
a controlling interest in the voting equity of the surviving or resulting Person
immediately after such transaction; (iii) the consummation of any transaction or
series of transaction (including. without limitation, any merger or
consolidation) the result of which is that any Person (other than a subsidiary
of the Company), becomes the beneficial owner (as such term is defined in Rule
l3d-3 and Rule l3d-5 under the Securities Exchange Act of 1934, as amended),
directly or indirectly, of fifty percent (50%) or more of the voting equity of
the Company; or (iv) following the Company's initial public offering, a change
in the composition of the Company's Board of Directors, as a result of which
fewer than a majority of the incumbent directors are directors who either (A)
had been directors of the Company on the Commencement Date or the date 24 months
prior to the date of the event that may constitute a Change in Control (the
"original directors") or (B) were elected, or nominated for election, to the
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Company's Board of Directors with the affirmative votes of at least a majority
of the aggregate of the original directors who were still in office at the time
of the election or nomination and the directors whose election or nomination was
previously so approved. Notwithstanding the foregoing, the term "Change in
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Control" shall not include any transaction or series of transactions with or
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to (A) any affiliate of the Company, (B) any entity or successor entity in which
the Company holds at least a majority of the total voting power of such entity
or successor entity (or retains the right or ability by voting power, contract
or otherwise to elect or designate for election a majority of the members of the
board of directors or other governing body of such entity or successor entity),
(C) any entity or successor entity in which no person or entity holds a greater
percentage of the total voting power of such entity or successor entity than the
Company's percentage voting interest in such entity or successor entity or (D)
any entity formed at the direction of the Company in connection with obtaining
financing for the Company or any of its subsidiaries under an arrangement that
provides the Company with an option to reacquire its assets or other properties
or other similar financing arrangement.
10. Insurance. The Company will have the right at its own cost and
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expense to apply for and secure in its own name, or otherwise, life, health or
accident insurance or any or all of them covering Executive, and Executive
agrees to submit to the usual and customary medical examination and otherwise to
cooperate with the Company in connection with the procurement of any such
insurance, and any claims thereunder.
11. Confidentiality; Books and Records; Company Property. Except in
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accordance with the provisions of this Agreement, during the Employment Period
and thereafter, Executive shall keep secret and retain in strictest confidence,
and shall not use for the benefit of Executive or others, all confidential
matters and affairs relating to the Company. Upon any termination of this
agreement Executive shall promptly deliver to the Company all confidential
information
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theretofore supplied to him, and each copy thereof, whether in his possession or
otherwise available to him, and shall certify in writing to the Company that all
analysis, studies and other documents that discuss or analyze the business of
the Company have been destroyed. All papers, books and records of every kind and
description relating to the business and affairs of the Company, whether or not
prepared by Executive, and all property owned by the Company shall be the sole
and exclusive property of the Company and Executive shall surrender them to the
Company upon request, during and after the Employment Period.
12. Miscellaneous.
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12.1 Notices. All notices, requests, demands and other communications
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which are required to be or may be given under this Agreement to any of the
other parties shall be in writing and shall be deemed to have been duly given
when (a) delivered in person, the day following dispatch by an overnight courier
service (such as Federal Express or UPS, etc.) or (b) five days after dispatch
by certified or registered first class mail, postage prepaid, return receipt
requested, to the party to whom the same is so given or made:
If to the Company,
addressed to:
U.S. Audiotex Corporation
18 Crow Canyon Court
Suite 300
San Ramon, CA 94583
Telephone: (925) 838-7996
Facsimile: (925) 838-4395
Attn:
If to Executive,
addressed to him at: Michael P. Presto
1385 York Avenue - Apt 30G
New York, NY 10021
Telephone: 212.585.1870
Facsimile: 212 ______________
12.2 Amendments. This Agreement cannot be altered or otherwise amended
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except pursuant to an instrument in writing signed by each of the parties.
12.3 Assignment. Executive acknowledges that the services required of
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Executive hereunder are personal and that Executive may not assign this
Agreement or any rights or duties under this Agreement. The Company may not
assign or otherwise transfer this Agreement to any
<PAGE>
other entity without the prior written consent of Executive, which consent shall
not be unreasonably withheld.
12.4 Entire Agreement. This Agreement contains the entire agreement
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between the parties with respect to the transactions contemplated herein and
supersedes all previous written or oral negotiations, commitments and
understandings.
12.5 Counterparts. This Agreement may be executed in two or more
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counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same instrument.
12.6 Headings. All headings are inserted for convenience of reference
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only and shall not affect the meaning or interpretation of any such provisions
or of this Agreement, taken as an entirety.
12.7 Severability. If and to the extent that any court of competent
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jurisdiction holds any provision (or any part thereof) of this agreement to be
invalid or unenforceable, such holding shall in no way affect the validity or
enforceability of the remainder of this Agreement, but shall be confined in its
operation to the jurisdiction in which made and to the provisions of this
Agreement directly involved in the controversy in which such judgment shall have
been rendered.
12.8 Governing Law. This Agreement shall be governed by and construed in
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accordance with the laws of the State of New York without reference to the
conflicts of laws principles thereof.
12.9 Arbitration. All disputes and controversies arising under or
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in connection with this Agreement, other than the seeking of injunctive or other
equitable relief pursuant to Section 7.3 hereof, shall be settled by arbitration
conducted before a panel of three (3) arbitrators sitting in New York City, New
York, or such other location agreed by the parties hereto, in accordance with
the rules for expedited resolution of commercial disputes of the American
Arbitration Association then in effect. The determination of the majority of
the arbitrators shall be final and binding on the parties. Judgment may be
entered on the award of the arbitrator in any court having proper jurisdiction.
12.10 Indemnification. The Company shall indemnify Executive to the
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fullest extent permitted by law for any and all costs, liabilities, judgments,
damages and expenses incurred by Executive that arise out of, is in connection
with or is related to Executive's actions or inactions in his performance of his
duties hereunder as an employee, director or committee member of fiduciary of
the Company, or any benefit plan of any of the foregoing that are not covered,
and actually paid, by the Company's directors and officers liability insurance
policies. The Company, within ten (10) days of presentation of invoices, shall
advance to Executive reimbursement of all legal fees and disbursements incurred
by the
<PAGE>
Executive in connection with any potentially indemnifiable matter. The Company
shall have the right to select counsel of its choice to undertake such defense.
12.11 Binding Effects. This Agreement shall be binding upon and inure to
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the benefit of the parties hereto and their respective successors, legal
representatives and assigns.
12.12 Acquisitions, Mergers, Etc. Nothing herein contained shall
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be construed to prevent or limit any acquisition, consolidation, or merger of
the Company.
12.13 Covenants, Etc. Executive hereby covenants, warrants and
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represents that (i) the execution of this Agreement and the discharge of his
obligations hereunder will not breach or conflict with any other contract,
agreement or understanding between Executive and any other party or parties;
(ii) there are no agreements or arrangements, whether written or oral, in effect
which would prevent Executive from rendering services to the Company during the
term of this Agreement; (iii) Executive has not made and will not make any
commitment to do any act in conflict with this Agreement; and (iv) the terms of
this Agreement have been fully explained to him, that he understands the nature
and extent of the rights and obligations provided under this Agreement, and that
he has been given the opportunity to be represented by legal counsel in the
negotiation and preparation of this Agreement. The Company hereby covenants,
warrants and represents that q (i) the execution of this Agreement and the
discharge of its obligations hereunder will not breach or conflict with any
other contract, agreement or understanding between the Company and any other
party or parties, (ii) the execution and delivery of this Agreement have been
duly and validly authorized by the Company; and (iii) this Agreement is binding
upon and enforceable against the Company in accordance with its terms.
12.14 Waiver. No consent or waiver, express or implied, by any
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party to or of any breach or default by another party in performance by the
breaching party of its obligations under this Agreement shall be deemed or
construed to be a consent or waiver to or of any breach or default by the
breaching party in the performance by such breaching party of any other
obligations of such breaching party under this Agreement. Failure on the part
of any party to object to or complain of any act or failure to act of any of the
other parties or to declare any of the other parties in default shall not
constitute a waiver of any right or remedy or the ability to object or complain
or to declare any default at any time in the future.
12.15 Survival. The provisions of Sections 5,7,8,11 and 12 shall survive
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the termination of this Agreement.
12.16 Legal Fees. Each party will be responsible for their own legal
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fees and costs of counsel incurred in connection with negotiation and
preparation of this Agreement.
12.17 Other Employment. Executive hereby represents and warrants to the
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Company that Executive is not prohibited from accepting employment with the
Company by any non-competition or other restriction contained in any employment
agreement with any other entity. Executive understands and agrees that any
breach of this representation or warranty that results in Executive being
prohibited from performing his duties under this Agreement will
<PAGE>
constitute a material breach for purposed of Section 8.4 (i) of this Agreement,
and on or at any time after it is determined that Executive is so prohibited,
the Company will be permitted to terminate Executive's employment pursuant to
Section 8.4.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement on
the day and year first above written.
U.S. AUDIOTEX CORPORATION
By: /s/ Thomas R. Evans
_____________________________
Name: Thomas R. Evans
Title: Chairman & CEO
/s/ Michael Presto
________________________________
Michael Presto