EXHIBIT 10.9
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") effective as of the 15th day of March
2000, between PhotoLoft, Inc., a Nevada corporation having its principal place
of business at 300 Orchard City Drive, Suite 142, Campbell, California 98005
("Employer"), and Chris McConn ("Employee").
WITNESSETH:
WHEREAS, Employer desires to employ Employee upon the terms and subject to the
conditions hereinafter set forth, and Employee desires to accept such
employment:
NOW, THEREFORE, for and in consideration of the premises, the mutual promises,
covenants and agreements contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties agree as follows.
1. EMPLOYMENT. Subject to the terms and conditions of this Agreement,
Employer shall employ Employee and Employee hereby accepts such
employment.
2. TERM. The term of this Agreement shall be for the period from March
15, 2000 through March 15, 2001(the "Initial Term").
3. POSITION AND DUTIES.
a. POSITION. Employee shall serve as CTO and shall perform the
duties and exercise the powers in connection with such position
and which may from time to time be reasonably assigned to or
vested in him or her by the CEO and/or the Board of Directors or
similar governing body of Employer (the "Board") or the duly
authorized committee or designee thereof.
b. FULL TIME EFFORTS. Employee shall perform and discharge
faithfully, diligently and to the best of his or her ability such
duties and responsibilities and shall devote his or her full-time
efforts to the business and affairs of Employer.
c. NO INTERFERENCE WITH DUTIES. Employee shall not devote time to
other activities such as would inhibit or otherwise interfere
with the proper performance of his or her duties.
4. WORK STANDARD. Employee hereby agrees that he or she will at all times
comply with abide by all terms and conditions set forth in this
Agreement, and all applicable work policies, procedures and rules as
may be issued by Employer.
5. COMPENSATION.
a. BASE SALARY. Subject to the terms and conditions set forth in
this Agreement, Employer shall pay Employee, and Employee shall
accept, a salary ("Base Salary") at the annual rate of $115,000
for all services rendered during the term of this Agreement. Base
Salary shall be reviewed no less frequently than annually. The
Base Salary is not to be considered in any way to limit
Employee's opportunity to receive appropriate increases in Base
Salary during the term of this Agreement. The Base Salary shall
be paid in accordance with Employer's normal payroll procedures.
b. EMPLOYMENT OPTIONS. Employee shall continue vesting options
granted under a 1998 Option Agreement.
c. WITHHOLDING. All compensation payable to Employee pursuant to
this Agreement shall be subject to, and Employer will deduct and
withhold, all applicable federal, state and local withholding,
employment, social security, and other similar taxes.
6. FRINGE BENEFITS. During the term of Employee's employment under this
Agreement, Employee shall receive the fringe benefits described below:
a. MEDICAL, DENTAL, VISION, LIFE AND DISABILITY INSURANCE. Employer
shall provide Employee and eligible dependents ("spouse and
children under 21 years of age") with medical, dental and vision
insurance coverage. Life and disability insurance coverage will
be provided by Employer to Employee.
b. VACATION. Employee is eligible for four (4) weeks of vacation per
calendar year.
c. OUT OF POCKET EXPENSES. Employer will reimburse Employee for out
of pocket expenses ("out of pocket expenses") as incurred by the
Employee in the normal course of business, including, but not
limited to corporate entertainment, non-capital purchases and
corporate travel.
7. LAWS, REGULATIONS, AND PUBLIC ORDINANCES. Employee shall comply with
all federal, state, and local statutes, regulations and public
ordinances governing the work.
8. CONFIDENTIAL INFORMATION; INVENTIONS; CONFLICTING EMPLOYMENT;
RETURNING COMPANY DOCUMENTS; SOLICITATION OF EMPLOYEES; NON-COMPETE.
a. COMPANY INFORMATION: Employee agrees at all times during the term
of employment and thereafter, to hold in strictest confidence,
and not use, except for the benefit of the Employer, or to
disclose to any person, firm or corporation without written
authorization of the board of Directors of the Company, any
Confidential Information of the Company. Employee understands
that Confidential Information means any company proprietary
information, technical data, trade secrets or know-how,
including, but not limited to, research, product plans, products,
services, customer lists and customers (including, but not
limited to, customers of the company on whom Employee called or
with whom Employee became acquainted during the term of
employment), markets, software, developments, inventions,
processes, formulas, technology, designs, drawings, engineering,
hardware configuration information, marketing, finances, or other
business information disclosed to me by the company either
directly or indirectly in writing, orally or by drawings or
inspection of parts or equipment. Employee further understands
that Confidential Information does not include any of the
foregoing items which has become publicly known and made
generally available through no wrongful act of Employee.
b. FORMER EMPLOYER INFORMATION. Employee agrees that he will not,
during employment with the company, improperly use or disclose
any proprietary information or trade secrets of any former or
concurrent employer or other person or entity with which Employee
has an agreement or duty to keep in confidence, information
acquired by Employee in confidence, if any, and that he will not
bring onto the premises of the Company any unpublished document
or proprietary information belonging to any such employer, person
or entity unless consented to in writing by such employer, person
or entity.
c. THIRD PARTY INFORMATION. Employee recognizes that the company has
received and in the future will receive from third parties their
confidential or proprietary information subject to a duty on
certain limited purposes. Employee agrees to hold all such
confidential or proprietary information in the strictest
confidence and not to disclose it to any person, firm or
corporation or to use it except as necessary in carrying out work
for the company consistent with the company's agreement with such
third party.
d. INVENTIONS RETAINED AND LICENSED: Employee has attached hereto as
Exhibit A, a list describing all inventions, original works of
authorship, developments, improvements and trade secrets which
were made by Employee prior to employment with the company
(collectively referred to as Prior inventions), which belong to
Employee, which relate to the company's purposed business,
products or hereunder; or, if not such list is attached, Employee
represents that there are no such prior inventions. If in the
course of his employment wit the company, Employee incorporates
into a company product, process or machine a prior invention
owned by Employee or in which Employee has an interest, the
Company is hereby granted and shall have a non-exclusive,
royalty-free, irrevocable, perpetual, worldwide license to make,
have made, modify, use and sell such prior invention as part of
or in connection with such product, process or machine.
e. ASSIGNMENT OF INVENTIONS; Employee agrees that he will promptly
make full written disclosure to the company, will hold in trust
for the sole right and benefit of the company and hereby assign
to the company, or its designee, all right, title, and interest
in and to any and all inventions, original works of authorship,
developments, concepts, improvements or trade secrets, whether or
not patentable or registrable under copyright or similar laws,
which Employee may solely or jointly conceive or develop or
reduce to practice, during the period of time he is in the
employee of the company (collectively referred to as
"Inventions"), except as provided in Section i below. Employee
further acknowledges that all original works of authorship which
are made by him (solely or jointly with others) within the scope
of employment and which are protectable by copyright are "works
made for hire," as that term is defined in the United States
Copyright Act.
f. MAINTENANCE OF RECORDS: Employee agrees to keep and maintain
adequate and current written records of all inventions made by
Employee (solely or jointly with others) during the term of
employment with the company. The records will be in the form of
notes, sketches, drawings and any other format that may be
specified by the company. The records will be available to and
remain the sole property of the company at all times.
g. PATENT AND COPYRIGHT REGISTRATION: Employee agrees to assist the
company, or its designee, at the company's expense, in every
proper way to secure the company's rights in the inventions and
any copyrights, patents, mask work rights or other intellectual
property rights relating thereto in any and all countries,
including the disclosure to the company of all pertinent
information and data with respect thereto, the execution of all
applications, specifications, oaths, assignments and all other
instruments which the company shall deem necessary in order to
apply for and obtain such rights and in order to assign and
convey to the company, its successors, assigns and nominees the
sole and exclusive rights, title and interest in and to such
inventions, and any copyrights, patents, mask work rights, or
other intellectual property rights relating thereto. Employee
further agrees that my obligation to execute or cause to be
executed, when it is in my power to do so, any such instrument or
papers shall continue after the termination of this Agreement. If
the company is unable because of mental or physical incapacity or
for any other reason to secure my signature to apply for or to
pursue any application for any United States or foreign patents
or copyrights registrations covering inventions or original works
of authorship assigned to the company as above, then Employee
hereby irrevocably designates and appoints company and its duly
authorized officers and agents as his agent and attorney in fact,
to act for and in his behalf and stead to execute and file any
such applications and to do all other lawfully permitted acts to
further the prosecution and issuance of letters patent or
copyright registrations thereon with the same legal force and
effect as if executed by Employee.
h. EXCEPTIONS TO ASSIGNMENTS. Employee understands that the
provisions of this Agreement requiring assignment of inventions
to company do not apply to any invention which qualifies fully
under the provisions of California Labor Code Section 2870.
Employee will advise the company promptly in writing of any
inventions that he believes meet the criteria in California Labor
Code Section 2870 and not otherwise disclosed on Exhibit A.
i. RETURNING COMPANY DOCUMENTS. Employee agrees that, at the time of
leaving the employ of the company he will deliver to the company
(and will not keep in his possession or deliver to anyone else)
any and all devices, records, data, notes, reports, proposals,
lists, correspondence, specifications, drawings, blueprints,
sketches, materials, equipment, others documents, or property, or
reproductions of any aforementioned items developed by Employee
pursuant to his employment with the company or otherwise
belonging to the company, its successors or assigns.
j. SOLICITATION OF EMPLOYEES. Employee agrees that, for a period of
one year immediately following the termination of his
relationship with the company for any reason, whether with or
without cause, either directly or indirectly, on his own behalf
or in the service or on behalf of other, solicit, recruit or
attempt to persuade any person to terminate such person's
employment with the company, whether or not such person is a
full-time employee or whether or not such employment is pursuant
to a written agreement or is at-will.
k. NON-COMPETE. Employee agrees that he shall not, for a period of
one year immediately following the termination of my relationship
with the company for any reason, whether with or without cause,
either directly or indirectly engage in any activity that
competes with PhotoLoft, Inc.
9. TERMINATION FOR CAUSE. This Agreement may be terminated at any time by
Employer without prior notice thereof to Employee and without any
liability owning to Employee under this Agreement under the following
conditions, each of which shall constitute "Cause";
a. FAILURE TO DISCHARGE DUTIES. Employee willfully neglects or
refuses to discharge his duties hereunder or refuses to comply
with any lawful and reasonable instructions given to him by
Employer without reasonable excuse;
b. BREACH. Employee shall have committed any material breach, or
repeated or continued after written notice of any breach, whether
material or not, of his obligations hereunder;
c. GROSS MISCONDUCT. Employee is guilty of gross misconduct. For the
purposes of this Agreement the following acts shall constitute
gross misconduct:
i) Any act involving fraud or dishonesty or breach of
applicable regulations of competent authorities in relation
to trading or dealing with stocks, securities, investments
and the like;
ii) The carrying out of any activity or the making of any
statement which would prejudice or impair the good name or
standing of Employer or would bring Employer into contempt,
ridicule or would reasonable shock or offend any community
in which Employer is located;
iii) Attendance at work in a state of intoxication or otherwise
being found in possession at his place of work any
prohibited drug or substance, possession of which would
amount to a criminal offense;
iv) Assault or other act of violence against any employee of
Employer or other person during the course of his or her
employment;
v) Harassment of disparagement of others based on their age,
disability, color, national origin, race, religion, sex or
veteran status, including acts of sexual harassment or,
vi) Conviction of any felony or misdemeanor involving moral
turpitude.
10. TERMINATION BY EMPLOYER FOR REASONS OTHER THAN CAUSE. Notwithstanding
anything herein to the contrary, and subject to the survival
provisions of Paragraph 13.G hereof, Employer may terminate this
Agreement at any time with thirty (30) days prior notice thereof to
Employee. In such an event, Employer shall pay to Employee in
accordance with Employer's normal practices; 1) the Base Salary; 2)
vested Stock Options, 3) Medical, Dental, Vision, Life and Disability
Insurance, 5) and any unused Vacation -for a period of one (1) year
after the date of the termination.
11. TERMINATION BASED UPON CHANGE OF CONTROL. In the event Employer enters
into an agreement with another person or entity, the effect of which
is to change the control of the Employer, then and in such event,
Employee shall be exclusively entitled to terminate this Agreement,
and in such event, Employer shall pay to Employee the severance
payments in the amount of one (1) year base salary, and benefits
payable through the end of the term. Additionally, upon such
termination, the vesting of all options to purchase Common Stock of
the Company held by Employee shall be accelerated so that such options
are immediately exercisable. For purposes of this Agreement, the term
"change of control: shall mean: (i) any change of equity such that
more than fifty percent (50%) of the issued and outstanding shares of
the Company are transferred to a third party; (ii) or debt ownership,
including but not limited to conversion rights of debt to equity of
the Employer such that more than fifty percent (50%) of the issued and
outstanding shares are transferred to a third party; or (iii) a sale
of substantially all of Employer's assets. However, a change of
control shall not include a public offering of the securities of the
Company.
12. TERMINATION BY EMPLOYEE.
a. VOLUNTARY TERMINATION. Employee may terminate his employment
under this Agreement at any time with thirty (30) days prior
written notice thereof to Employer. Upon such termination,
Employee shall be entitled to his pro-rata Base Salary and all
stock options that have vested at that time.
b. RESIGNATION FOR GOOD CAUSE. The termination of his employment
under this Agreement by Employee following a substantial
reduction in Employee's position or duties or material breach of
this Agreement by Employer shall be deemed a termination by
employee for reasons other than cause as set forth in paragraph
10 hereof.
c. TERMINATION UPON DEATH. This Agreement shall terminate
immediately upon Employee's death. Employee's estate shall be
entitled to Employee's Base Salary up to twelve (12) months after
the Employee's death and earned Stock Options. Medical, Dental
and Vision Insurance payments shall continue for six (6) months
from date of Employee's death.
13. GENERAL PROVISIONS.
a. AMENDMENT. This Agreement may be amended or modified only by a
writing signed by both of the parties hereto.
b. BINDING AGREEMENT. This Agreement shall inure to the benefit of
and be binding upon Employee, his or her heirs and personal
representatives, and Employer, its successors and assigns.
c. WAIVER. The waiver by either party of a breach of any provision
contained in this Agreement shall not be construed as or operate
as a waiver of any subsequent breach.
d. NOTICES
i) All notices and all other communication provided for herein
shall be in writing and delivered personally to the other
designated party, or mailed by certified or registered mail,
return receipt requested or delivered by a recognized
national overnight courier service, or sent by facsimile as
follows:
If to Employer to: Mr. Patrick Dane
Director
If to Employer to: Mr. Jack Marshall
CEO, President, Treasurer
If Employee has provided notice to Employer that he is
represented by counsel, Employer shall copy Employee's counsel at
the address specified. Employee agrees and understands that any
legal fees or expenses incurred by him in connection with this
Agreement are his sole responsibility and Employer shall not
reimburse Employee for any portion of such fees or expenses.
ii) All notices sent under this Paragraph 13 shall be deemed
given twenty four (24) hours after sent by facsimile or
courier and seventy-two (72) hours after sent by certified
or registered mail.
iii) Either party hereto may change the address to which notice
is to be sent hereunder by written notice to the other party
in accordance with the provisions of this Paragraph.
e. GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of California, without
regard to principles of conflicts of laws.
f. ENTIRE AGREEMENT. This Agreement contains the full and complete
understanding of the parties hereto with respect to the subject
matter contained herein and this Agreement supersedes and
replaces any prior agreement , either oral or written, which
Employee may have with Employer that relates generally to the
same subject matter.
g. SURVIVAL. Notwithstanding any expiration or termination of this
Agreement, the provisions of this agreement shall survive and
remain in full force and effect, as shall any other provision
hereof that, by its terms or reasonable interpretation thereof,
sets forth obligations that extend beyond the termination of this
Agreement.
h. ASSIGNMENT. This Agreement may not be assigned by Employee
without the prior written consent of Employer, and any attempted
assignment not in accordance herewith shall be null and void and
of no force or effect. Employer can assign this Agreement to any
Affiliate with Employee's written consent. Thereafter, any such
assignee shall be considered to be the Employer for all purposes
under this Agreement; provided however, that references to
previous incentive bonuses shall be deemed to include incentive
bonuses paid by any assignor.
i. SEVERABILITY. If any one or more of the terms, provisions,
covenants or restrictions of this Agreement shall be determined
by a court of competent jurisdiction to be invalid, void or
unenforceable, then the remainder of the terms, provisions,
covenants and restrictions of this Agreement shall remain in full
force and effect, and to that end the provisions hereof shall be
deemed severable.
j. PARAGRAPH HEADING. The section headings set forth herein are for
convenience of reference only and shall not affect the meaning or
interpretation of this Agreement whatsoever.
k. VOLUNTARY AGREEMENT. Employee and Employer represent and agree
that each has reviewed all aspects of this Agreement, has
carefully read and fully understands all provisions of this
Agreement, and is voluntarily entering into this Agreement. Each
party represents and agrees that such party has had the
opportunity to review any and all aspects of this Agreement with
legal, tax or other advisers(s) of such party's choice before
executing this Agreement.
REMEDIES.
ARBITRATION OF DISAGREEMENTS. Any dispute, controversy or claim
arising out of or relating to the obligations under this Agreement
shall be settled by final and binding arbitration in accordance with
the American Arbitration Association Employment Dispute Resolution
Rules. The arbitrator shall be selected by mutual agreement of the
parties, if possible. If the parties fail to reach agreement upon
appointment of an arbitrator within 30 days following receipt by one
party of the other party's notice of desire to arbitrate, the
arbitrator shall be selected from a panel or panels of persons
submitted by the American Arbitration Association (the "AAA"). The
selection process shall be that which is set forth in the AAA
Employment Dispute Resolution Rules, except that, if the parties fail
to select an arbitrator from one or more panels, AAA shall not have
the power to make an appointment but shall continue to submit
additional panels until an arbitrator has been selected.
All fees and expenses of the arbitration, including a transcript if
requested, will be borne by the Employer. Any action to enforce or
vacate the arbitrator's award shall be governed by the Federal
Arbitration Act, if applicable, and otherwise by California state law.
IN WITNESS WHEREOF, the parties hereto have executed, or caused their duly
authorized representative to execute, this Agreement as of the date first above
written.
EMPLOYER EMPLOYEE
Patrick Dane Chris McConn
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") effective as of the 15th day of March
2000, between PhotoLoft, Inc., a Nevada corporation having its principal place
of business at 300 Orchard City Drive, Suite 142, Campbell, California 98005
("Employer"), and Kay Wolf Jones ("Employee").
WITNESSETH:
WHEREAS, Employer desires to employ Employee upon the terms and subject to the
conditions hereinafter set forth, and Employee desires to accept such
employment:
NOW, THEREFORE, for and in consideration of the premises, the mutual promises,
covenants and agreements contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties agree as follows.
1. EMPLOYMENT. Subject to the terms and conditions of this Agreement, Employer
shall employ Employee and Employee hereby accepts such employment.
2. TERM. The term of this Agreement shall be for the period from March 15,
2000 through March 15, 2001 (the "Initial Term").
3. POSITION AND DUTIES.
a. POSITION. Employee shall serve as Vice President, Marketing and shall
perform the duties and exercise the powers in connection with such
position and which may from time to time be reasonably assigned to or
vested in him or her by the CEO and/or Board of Directors or similar
governing body of Employer (the "Board") or the duly authorized
committee or designee thereof.
b. FULL TIME EFFORTS. Employee shall perform and discharge faithfully,
diligently and to the best of his or her ability such duties and
responsibilities and shall devote his or her full-time efforts to the
business and affairs of Employer.
c. NO INTERFERENCE WITH DUTIES. Employee shall not devote time to other
activities such as would inhibit or otherwise interfere with the
proper performance of his or her duties.
4. WORK STANDARD. Employee hereby agrees that he or she will at all times
comply with abide by all terms and conditions set forth in this Agreement,
and all applicable work policies, procedures and rules as may be issued by
Employer.
5. COMPENSATION.
a. BASE SALARY. Subject to the terms and conditions set forth in this
Agreement, Employer shall pay Employee, and Employee shall accept, a
salary ("Base Salary") at the annual rate of $95,000 for all services
rendered during the term of this Agreement. Base Salary shall be
reviewed no less frequently than annually. The Base Salary is not to
be considered in any way to limit Employee's opportunity to receive
appropriate increases in Base Salary during the term of this
Agreement. The Base Salary shall be paid in accordance with Employer's
normal payroll procedures.
b. EMPLOYMENT OPTIONS. Employee will earn up to 150,000 employment
options, granted under the PhotoLoft, Inc. Employee Stock Option Plan.
The options will be priced at the closing price of the stock March 31,
2000.
c. WITHHOLDING. All compensation payable to Employee pursuant to this
Agreement shall be subject to, and Employer will deduct and withhold,
all applicable federal, state and local withholding, employment,
social security, and other similar taxes.
6. FRINGE BENEFITS. During the term of Employee's employment under this
Agreement, Em0ployee shall receive the fringe benefits described below:
a. MEDICAL, DENTAL, VISION, LIFE AND DISABILITY INSURANCE. Employer shall
provide Employee and eligible dependents ("spouse and children under
21 years of age") with medical, dental and vision insurance coverage.
Life and disability insurance coverage will be provided by Employer to
Employee.
b. VACATION. Employee is eligible for four (4) weeks of vacation per
calendar year.
c. OUT OF POCKET EXPENSES. Employer will reimburse Employee for out of
pocket expenses ("out of pocket expenses") as incurred by the Employee
in the normal course of business, including, but not limited to
corporate entertainment, non-capital purchases and corporate travel.
7. LAWS, REGULATIONS, AND PUBLIC ORDINANCES. Employee shall comply with all
federal, state, and local statutes, regulations and public ordinances
governing the work.
8. CONFIDENTIAL INFORMATION; INVENTIONS; CONFLICTING EMPLOYMENT; RETURNING
COMPANY DOCUMENTS; SOLICITATION OF EMPLOYEES; NON-COMPETE.
a. COMPANY INFORMATION: Employee agrees at all times during the term of
employment and thereafter, to hold in strictest confidence, and not
use, except for the benefit of the Employer, or to disclose to any
person, firm or corporation without written authorization of the board
of Directors of the Company, any Confidential Information of the
Company. Employee understands that Confidential Information means any
company proprietary information, technical data, trade secrets or
know-how, including, but not limited to, research, product plans,
products, services, customer lists and customers (including, but not
limited to, customers of the company on whom Employee called or with
whom Employee became acquainted during the term of employment),
markets, software, developments, inventions, processes, formulas,
technology, designs, drawings, engineering, hardware configuration
information, marketing, finances, or other business information
disclosed to me by the company either directly or indirectly in
writing, orally or by drawings or inspection of parts or equipment.
Employee further understands that Confidential Information does not
include any of the foregoing items which has become publicly known and
made generally available through no wrongful act of mine.
b. FORMER EMPLOYER INFORMATION. Employee agrees that she will not, during
employment with the company, improperly use or disclose any
proprietary information or trade secrets of any former or concurrent
employer or other person or entity with which Employee has an
agreement or duty to keep in confidence, information acquired by
Employee in confidence, if any, and that Employee will not bring onto
the premises of the Company any unpublished document or proprietary
information belonging to any such employer, person or entity unless
consented to in writing by such employer, person or entity.
c. THIRD PARTY INFORMATION. Employee recognizes that the company has
received and in the future will receive from third parties their
confidential or proprietary information subject to a duty on certain
limited purposes. Employee agrees to hold all such confidential or
proprietary information in the strictest confidence and not to
disclose it to any person, firm or corporation or to use it except as
necessary in carrying out my work for the company consistent with the
company's agreement with such third party.
d. INVENTIONS RETAINED AND LICENSED: Employee has attached hereto as
Exhibit A, a list describing all inventions, original works of
authorship, developments, improvements and trade secrets which were
made by me prior to employment with the company (collectively referred
to as Prior inventions), which belong to Employee, which relate to the
company's purposed business, products or hereunder; or, if not such
list is attached, Employee represents that there are no such prior
inventions. If in the course of employment wit the company, Employee
incorporates into a company product, process or machine a prior
invention owned by Employee or in which Employee has an interest, the
Company is hereby granted and shall have a non-exclusive,
royalty-free, irrevocable, perpetual, worldwide license to make, have
made, modify, use and sell such prior invention as part of or in
connection with such product, process or machine.
e. ASSIGNMENT OF INVENTIONS; Employee agrees that she will promptly make
full written disclosure to the company, will hold in trust for the
sole right and benefit of the company and hereby assign to the
company, or its designee, all right, title, and interest in and to any
and all inventions, original works of authorship, developments,
concepts, improvements or trade secrets, whither or not patentable or
registrable under copyright or similar laws, which she may solely or
jointly conceive or develop or reduce to practice, during the period
of time she is in the employee of the company (collectively referred
to as "Inventions"), except as provided in Section i below. Employee
further acknowledges that all original works of authorship which are
made by Employee (solely or jointly with others) within the scope of
employment and which are protectable by copyright are "works made for
hire," as that term is defined in the United States Copyright Act.
f. MAINTENANCE OF RECORDS: Employee agrees to keep and maintain adequate
and current written records of all inventions made by her (solely or
jointly with others) during the term of employment with the company.
The records will be in the form of notes, sketches, drawings and any
other format that may be specified by the company. The records will be
available to and remain the sole property of the company at all times.
g. PATENT AND COPYRIGHT REGISTRATION: Employee agrees to assist the
company, or its designee, at the company's expense, in every proper
way to secure the company's rights in the inventions and any
copyrights, patents, mask work rights or other intellectual property
rights relating thereto in any and all countries, including the
disclosure to the company of all pertinent information and data with
respect thereto, the execution of all applications, specifications,
oaths, assignments and all other instruments which the company shall
deem necessary in order to apply for and obtain such rights and in
order to assign and convey to the comp0any, its successors, assigns
and nominees the sole and exclusive rights, title and interest in and
to such inventions, and any copyrights, patents, mask work rights, or
other intellectual property rights relating thereto. Employee further
agrees that her obligation to execute or cause to be executed, when it
is in her power to do so, any such instrument or papers shall continue
after the termination of this Agreement. If the company is unable
because of Employee's mental or physical incapacity or for any other
reason to secure Employee's signature to apply for or to pursue any
application for any United States or foreign patents or copyrights
registrations covering inventions or original works of authorship
assigned to the company as above, then Employee hereby irrevocably
designates and appoints company and its duly authorized officers and
agents as agent and attorney in fact, to act for and in behalf and
stead of Employee to execute and file any such applications and to do
all other lawfully permitted acts to further the prosecution and
issuance of letters patent or copyright registrations thereon with the
same legal force and effect as if executed by Employee.
h. EXCEPTIONS TO ASSIGNMENTS. Employee understands that the provisions of
this Agreement requiring assignment of inventions to company do not
apply to any invention which qualifies fully under the provisions of
California Labor Code Section 2870. Employee will advise the company
promptly in writing of any inventions that she believes meet the
criteria in California Labor Code Section 2870 and not otherwise
disclosed on Exhibit A.
i. RETURNING COMPANY DOCUMENTS. Employee agrees that, at the time of
leaving the employ of the company she will deliver to the company (and
will not keep in her possession or deliver to anyone else) any and all
devices, records, data, notes, reports, proposals, lists,
correspondence, specifications, drawings, blueprints, sketches,
materials, equipment, others documents, or property, or reproductions
of any aforementioned items developed by Employee pursuant to
employment with the company or otherwise belonging to the company, its
successors or assigns.
j. SOLICITATION OF EMPLOYEES. Employee agrees that, for a period of one
(1) year immediately following the termination of Employee's
relationship with the company for any reason, whether with or without
cause, either directly or indirectly, on behalf or in the service or
on behalf of other, solicit, recruit or attempt to persuade any person
to terminate such person's employment with the company, whether or not
such person is a full-time employee or whether or not such employment
is pursuant to a written agreement or is at-will.
k. NON-COMPETE. I agree that I shall not, for a period of one year
immediately following the termination of my relationship with the
company for any reason, whether with or without cause, either directly
or indirectly engage in any activity that competes with PhotoLoft,Inc.
9. TERMINATION FOR CAUSE. This Agreement may be terminated at any time by
Employer without prior notice thereof to Employee and without any
liability owning to Employee under this Agreement under the following
conditions, each of which shall constitute "Cause";
a. FAILURE TO DISCHARGE DUTIES. Employee willfully neglects or refuses to
discharge her duties hereunder or refuses to comply with any lawful
and reasonable instructions given to her by Employer without
reasonable excuse;
b. BREACH. Employee shall have committed any material breach, or repeated
or continued after written notice of any breach, whether material or
not, of her obligations hereunder;
c. GROSS MISCONDUCT. Employee is guilty of gross misconduct. For the
purposes of this Agreement the following acts shall constitute gross
misconduct:
i) Any act involving fraud or dishonesty or breach of applicable
regulations of competent authorities in relation to trading or
dealing with stocks, securities, investments and the like;
ii) The carrying out of any activity or the making of any statement
which would prejudice or impair the good name or standing of
Employer or would bring Employer into contempt, ridicule or would
reasonable shock or offend any community in which Employer is
located;
iii) Attendance at work in a state of intoxication or otherwise being
found in possession at her place of work any prohibited drug or
substance, possession of which would amount to a criminal
offense;
iv) Assault or other act of violence against any employee of Employer
or other person during the course of his or her employment;
v) Harassment or disparagement of others based on their age,
disability, color, national origin, race, religion, sex or
veteran status, including acts of sexual harassment or,
vi) Conviction of any felony or misdemeanor involving moral
turpitude.
10. TERMINATION BY EMPLOYER FOR REASONS OTHER THAN CAUSE. Notwithstanding
anything herein to the contrary, and subject to the survival
provisions of Paragraph 13.G hereof, Employer may terminate this
Agreement at any time with thirty (30) days prior notice thereof to
Employee. In such an event, Employer shall pay to Employee in
accordance with Employer's normal practices; 1) the Base Salary; 2)
vested Stock Options, 3) Medical, Dental, Vision, Life and Disability
Insurance, 5) and any unused Vacation - for a period of one (1) year
after the termination date.
11. TERMINATION BASED UPON CHANGE OF CONTROL. In the event Employer enters
into an agreement with another person or entity, the effect of which
is to change the control of the Employer, then and in such event,
Employee shall be exclusively entitled to terminate this Agreement,
and in such event, Employer shall pay to Employee the severance
payments in the amount of one (1) year base salary, and benefits
payable through the end of the term. Additionally, upon such
termination, the vesting of all options to purchase Common Stock of
the Company held by Employee shall be accelerated so that such options
are immediately exercisable. For purposes of this Agreement, the term
"change of control: shall mean: (i) any change of equity such that
more than fifty (50%) percent (50%) of the issued and outstanding
shares of the Company are transferred to a third party; (ii) or debt
ownership, including but not limited to conversion rights of debt to
equity of the Employer such that more than fifty percent (50%) of the
issued and outstanding shares are transferred to a third party; or
(iii) a sale of substantially all of Employer's assets. However, a
change of control shall not include a public offering of the
securities of the Company.
12. TERMINATION BY EMPLOYEE.
a. VOLUNTARY TERMINATION. Employee may terminate this employment under
this Agreement at any time with thirty (30) days prior written notice
thereof to Employer. Upon such termination, Employee shall be entitled
to her pro-rata Base Salary through the date of such termination and
all stock options that have vested at that time.
b. RESIGNATION FOR GOOD CAUSE. The termination of her employment under
this Agreement by Employee following a substantial reduction in
Employee's position or duties or material breach of this Agreement by
Employer shall be deemed a termination by employee for reasons other
than cause as set forth in paragraph 10 hereof.
c. TERMINATION UPON DEATH. This Agreement shall terminate immediately
upon Employee's death. Employee's estate shall be entitled to
Employee's Base Salary up to twelve (12) months after the Employee's
death and earned Stock Options. Medical, Dental and Vision Insurance
payments shall continue for six (6) months from date of Employee's
death.
GENERAL PROVISIONS.
a. AMENDMENT. This Agreement may be amended or modified only by a writing
signed by both of the parties hereto.
b. BINDING AGREEMENT. This Agreement shall inure to the benefit of and be
binding upon Employee, his or her heirs and personal representatives,
and Employer, its successors and assigns.
c. WAIVER. The waiver by either party of a breach of any provision
contained in this Agreement shall not be construed as or operate as a
waiver of any subsequent breach.
d. NOTICES
i) All notices and all other communication provided for herein shall
be in writing and delivered personally to the other designated
party, or mailed by certified or registered mail, return receipt
requested or delivered by a recognized national overnight courier
service, or sent by facsimile as follows:
If to Employer to: Mr. Patrick Dane
Director
If to Employee to: Mr. Jack Marshall
CEO, President, Treasurer
If Employee has provided notice to Employer that he is represented by
counsel, Employer shall copy Employee's counsel at the address
specified. Employee agrees and understands that any legal fees or
expenses incurred by him in connection with this Agreement are his
sole responsibility and Employer shall not reimburse Employee for any
portion of such fees or expenses.
ii) All notices sent under this Paragraph 13 shall be deemed given
twenty-four (24) hours after sent by facsimile or courier and
seventy-two (72) hours after sent by certified or registered
mail.
iii) Either party hereto may change the address to which notice is to
be sent hereunder by written notice to the other party in
accordance with the provisions of this Paragraph.
e. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of California, without regard to
principles of conflicts of laws.
f. ENTIRE AGREEMENT. This Agreement contains the full and complete
understanding of the parties hereto with respect to the subject matter
contained herein and this Agreement supersedes and replaces any prior
agreement , either oral or written, which Employee may have with
Employer that relates generally to the same subject matter.
g. SURVIVAL. Notwithstanding any expiration or termination of this
Agreement, the provisions of this agreement shall survive and remain
in full force and effect, as shall any other provision hereof that, by
its terms or reasonable interpretation thereof, sets forth obligations
that extend beyond the termination of this Agreement.
h. ASSIGNMENT. This Agreement may not be assigned by Employee without the
prior written consent of Employer, and any attempted assignment not in
accordance herewith shall be null and void and of no force or effect.
Employer can assign this Agreement to any Affiliate with Employee's
written consent. Thereafter, any such assignee shall be considered to
be the Employer for all purposes under this Agreement; provided
however, that references to previous incentive bonuses shall be deemed
to include incentive bonuses paid by any assignor.
i. SEVERABILITY. If any one or more of the terms, provisions, covenants
or restrictions of this Agreement shall be determined by a court of
competent jurisdiction to be invalid, void or unenforceable, then the
remainder of the terms, provisions, covenants and restrictions of this
Agreement shall remain in full force and effect, and to that end the
provisions hereof shall be deemed severable.
j. PARAGRAPH HEADING. The section headings set forth herein are for
convenience of reference only and shall not affect the meaning or
interpretation of this Agreement whatsoever.
k. VOLUNTARY AGREEMENT. Employee and Employer represent and agree that
each has reviewed all aspects of this Agreement, has carefully read
and fully understands all provisions of this Agreement, and is
voluntarily entering into this Agreement. Each party represents and
agrees that such party has had the opportunity to review any and all
aspects of this Agreement with legal, tax or other advisers(s) of such
party's choice before executing this Agreement.
13. REMEDIES.
ARBITRATION OF DISAGREEMENTS. Any dispute, controversy or claim
arising out of or relating to the obligations under this Agreement
shall be settled by final and binding arbitration in accordance with
the American Arbitration Association Employment Dispute Resolution
Rules. The arbitrator shall be selected by mutual agreement of the
parties, if possible. If the parties fail to reach agreement upon
appointment of an arbitrator within 30 days following receipt by one
party of the other party's notice of desire to arbitrate, the
arbitrator shall be selected from a panel or panels of persons
submitted by the American Arbitration Association (the "AAA"). The
selection process shall be that which is set forth in the AAA
Employment Dispute Resolution Rules, except that, if the parties fail
to select an arbitrator from one or more panels, AAA shall not have
the power to make an appointment but shall continue to submit
additional panels until an arbitrator has been selected.
All fees and expenses of the arbitration, including a transcript if
requested, will be borne by the Employer. Any action to enforce or
vacate the arbitrator's award shall be governed by the Federal
Arbitration Act, if applicable, and otherwise by California state law.
IN WITNESS WHEREOF, the parties hereto have executed, or caused their duly
authorized representative to execute, this Agreement as of the date first
above written.
EMPLOYER EMPLOYEE
Patrick Dane Kay Wolf Jones
BY:
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") effective as of the 10th day of May,
2000, between PhotoLoft.com, a Nevada corporation having its principal place of
business at 300 Orchard City Drive, Suite 142, Campbell, California 98005
("Employer" or the "Company"), and Jack Marshall ("Employee").
WITNESSETH:
WHEREAS, Employer AND employee Have entered into that certain Employment
Agreement dated March 15, 2000 ("Employment Agreement");
WHEREAS, Employer and Employee desire to amend and restate the Employment
Agreement, in its entirety as set forth herein ("Amended and Restated Employment
Agreement");
WHEREAS, Employer desires to employ Employee upon the terms and subject to the
conditions hereinafter set forth, and Employee desires to accept such
employment;
NOW, THEREFORE, for and in consideration of the premises, the mutual promises,
covenants and agreements contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto, intending to be legally bound, agree to amend and restate the
Employment Agreement, hereby enter into the Amended and Restated Employment
Agreement, and hereby agree as follows.
1. EMPLOYMENT. Subject to the terms and conditions of this Agreement,
Employer shall employ Employee and Employee hereby accepts such
employment.
2. TERM. The term of this Agreement shall be for the period from April
30, 2000 trough April 30, 2002 (the "Initial Term").
3. POSITION AND DUTIES.
a. POSITION. Employee shall serve as CEO and Chairman of the
Executive Committee until such time as a President is hired by
Employer in accordance with paragraph 6.5 of the Stock Purchase
Agreement dated April 18, 2000 between Intellect Capital Group,
LLC and Employer. Employees duties as CEO are set forth in
Exhibit A attached hereto. At such time, Employee shall resign as
the CEO and shall take the position of Vice Chairman and Chairman
of the Executive Committee. Employee's duties in connection with
the position of Chairman of the Executive Committee are set forth
in Exhibit A attached hereto.
---------
b. FULL TIME EFFORTS. Employee shall perform and discharge
faithfully, diligently and to the best of his ability such duties
and responsibilities and shall devote his full-time efforts to
the business and affairs of Employer.
c. NO INTERFERENCE WITH DUTIES. Employee shall not devote time to
other activities that would, in the sole discretion of the
Employer, inhibit or otherwise interfere with the proper
performance of his or her duties.
4. WORK STANDARD. Employee hereby agrees that he will at all times comply
with and abide by all terms and conditions set forth in this
Agreement, and all applicable work policies, procedures and rules as
may be issued by Employer.
5. COMPENSATION.
a. BASE SALARY. Subject to the terms and conditions set forth in
this Agreement, Employer shall pay Employee, and Employee shall
accept, a salary ("Base Salary") at the annual rate of $240,000
for all services rendered during the term of this Agreement. Base
Salary shall be reviewed no less frequently than annually. The
Base Salary is not to be considered in any way to limit
Employee's opportunity to receive appropriate increases in Base
Salary, at Employer's discretion, during the term of this
Agreement. The Base Salary shall be paid in accordance with
Employer's normal payroll procedures.
b. INCENTIVE BONUS. Subject to the terms and conditions set forth in
this Agreement, Employer shall pay Employee, and Employee shall
accept, an annual bonus ("Incentive Bonus") to be no less than
25% of Employee's Base Salary as defined by this Agreement if
Employer meets the financial goals of the Business Plan (Exhibit
C), including, but not limited to, net revenue, operating
expenses and operating income (as those terms ate defined in the
Business Plan) and the consummation of an investment by at least
one strategic investor in each
year of this contract. Employee is eligible to receive an
additional 25% of Base Salary when certain additional performance
criteria and milestones, which shall be established by the Board
of Directors within S months of the commencement of this
Agreement, are achieved,
c. STOCK OPTIONS. Employer will grant to Employee stock options to
purchase up to 200,000 shares of Common Stock when certain
additional performance criteria and milestones, which shall be
established by the Board of Directors within 3 months of the
commencement of this Agreement, are achieved (these criteria may
be different than those established under subsection 5b). In
addition, Employee will be eligible for participation in future
grants to employees at the discretion of the Board of Directors.
The options referenced in this subsection 5c will be issued at a
price equal to the fair market value of the Common Stock at the
time the options are granted. Employee's current Stock Option
Agreement (relating to a total of 1,551,209 shares under option,
including options already vested) shall remain in effect.
Employee's Stock Option Agreement that shall remain in effect
does not include the 750,000 options referenced in the Employment
Agreement dated March 15, 2000.
d. WITHHOLDING. All compensation payable to Employee pursuant to
this Agreement shall be subject to, and Employer will deduct and
withhold, all applicable federal, state and local withholding,
employment, social security, and other similar taxes.
6. FRINGE BENEFITS. During the term of Employee's employment under this
Agreement, Employee shall receive the fringe benefits described below:
a. MEDICAL, DENTAL, VISION, LIFE AND DISABILITY INSURANCE. Employer
shall provide Employee and eligible dependents ("spouse and
children under 21 years of age") with medical, dental and vision
insurance coverage. Life and disability insurance coverage will
be provided by Employer to Employee at an amount determined by
the Board of Directors, but in no event less than one and
one-half (1 1/2.) times Employee's annual salary.
b. VACATION. Employee is eligible to accrue four (4) weeks of
vacation per calendar year. Employee may not have more than four
weeks of accrued and unused vacation at any time.
c. OUT OF POCKET EXPENSES. Employer will reimburse Employee for
reasonable out of pocket expenses ("out of pocket expenses") as
incurred by the Employee in the normal course of business,
including but not limited to corporate entertainment, non-capital
purchases and corporate travel, subject to the Company's normal
reimbursement policies.
7. LAWS, REGULATIONS, AND PUBLIC ORDINANCES. Employee shall comply with
all federal, state, and local statutes, regulations and public
ordinances governing the work.
8. CONFIDENTIAL INFORMATION; INVENTIONS; CONFLICTING EMPLOYMENT;
RETURNING COMPANY DOCUMENTS; SOLICITATION OF EMPLOYEES; NON-COMPETE;
INEVITABLE DISCLOSURE.
a. COMPANY INFORMATION: Employee agrees at all times during the term
of employment and thereafter, to hold in strictest confidence,
and not use, except for the benefit of the Employer, or to
disclose to any person, firm or corporation without written
authorization of the Board of Directors of the Company, any
Confidential Information of the Company. Employee understands
that Confidential Information means any Company proprietary
information, technical data, trade secrets or know-how,
including, but not limited to, research, product plans, products,
services, customer lists and customers (including, but not
limited to, customers of the Company on whom Employee called or
with whom Employee became acquainted during the term of this
Agreement), markets, software, developments, inventions,
processes, formulas, technology, designs, drawings, engineering,
hardware configuration information, marketing, finances, or other
business information disclosed to Employee by the Company either
directly or indirectly in writing, orally or by drawings or
inspection of parts or equipment. Employee further understands
that Confidential Information does not include any of the
foregoing items which has become publicly known and made
generally available through no wrongful act of Employee.
b. FORMER EMPLOYER INFORMATION. Employee agrees that he will not,
during his employment with the Company, improperly use or
disclose any proprietary information or trade secrets of any
former or concurrent employer or other person or entity with
which Employee has an agreement or duty to keep in confidence,
information acquired by Employee in confidence, if any, and that
Employee will not bring onto the premises of the Company any
unpublished document or proprietary information belonging to any
such employer, person or entity unless consented to in writing by
such employer, person or entity.
c. THIRD PARTY INFORMATION. Employee recognizes that the Company has
received and in the future will receive from third parties their
confidential or proprietary information subject to a duty on
certain limited purposes. Employee agrees to hold all such
confidential or proprietary information in the strictest
confidence and not to disclose it to any person, firm or
corporation or to use it except as necessary in carrying out his
work for the Company consistent with the Company's agreement with
such third party.
d. INVENTIONS RETAINED AND LICENSED: Employee has attached hereto as
Exhibit A, a list describing all inventions, original works of
authorship, developments, improvements and trade secrets which
were made by Employee prior to employment with the Company
(collectively referred to as Prior inventions), which belong to
Employee, which relate to the Company's purposed business,
products or hereunder; or, if no such list is attached, Employee
represents that there are no such prior inventions. If, in the
course of employment with the Company, Employee incorporates into
a Company product, process or machine a prior invention owned by
Employee or in which Employee has an interest, the Company is
hereby granted and shall have a non-exclusive, royalty-free,
irrevocable, perpetual, worldwide license to make, have made,
modify, use and sell such prior invention as part of or in
connection with such product, process or machine.
e. ASSIGNMENT OF INVENTIONS: Employee agrees that he will promptly
make full written disclosure to the Company, will hold in trust
for the sole right and benefit of the Company and hereby assign
to the Company, or its designee, all his right, title, and
interest in and to any and all inventions, original works of
authorship, developments, concepts, improvements or trade
secrets, whither or not patentable or registrable under copyright
or similar laws, which he may solely or jointly conceive or
develop or reduce to practice, during the period of time he is in
the employee of the Company (collectively referred to as
"Inventions"), except as provided in Section h below. Employee
further acknowledges that all original works of authorship which
are made by him (solely or jointly with others) within the scope
of his employment and which are protectable by copyright are
"works made for hire," as that term is defined in the United
States Copyright Act.
f. MAINTENANCE OF RECORDS: Employee agrees to keep and maintain
adequate and current written records of all inventions made by
him (solely or jointly with others) during the term of his
employment with the Company. The records will be in the form of
notes, sketches, drawings and any other format that may be
specified by the Company. The records will be available to and
remain the sole property of the Company at all times.
g. PATENT AND COPYRIGHT REGISTRATION: Employee agrees to assist the
Company, or its designee, at the Company's expense, in every
proper way to secure the Company's rights in the inventions and
any copyrights, patents, mask work rights or other intellectual
property rights relating thereto in any and all countries,
including the disclosure to the Company of all pertinent
information and data with respect thereto, the execution of all
applications, specifications, oaths, assignments and all other
instruments which the Company shall deem necessary in order to
apply for and obtain such rights and in order to assign and
convey to the Company, its successors, assigns and nominees the
sole and exclusive rights, title and interest in and to such
inventions, and any
copyrights, patents, mask work rights, or other intellectual
property rights relating thereto. Employee further agrees that
his obligation to execute or cause to be executed, when it is in
his power to do so, any such instrument or papers shall continue
after the termination of this Agreement. If the Company is unable
because of Employee's mental or physical incapacity or for any
other reason to secure Employee's signature to apply for or to
pursue any application for any United States or foreign patents
or copyrights registrations covering inventions or original works
of authorship assigned to the Company as above, then Employee
hereby irrevocably designates and appoints Company and its duly
authorized officers and agents as his agent and attorney in fact,
to act for and in Employee's behalf and stead to execute and file
any such applications and to do all other lawfully permitted acts
to further the prosecution and issuance of letters patent or
copyright registrations thereon wit the same legal force and
effect as if executed by Employee.
h. EXCEPTIONS TO ASSIGNMENTS. In accordance with Employer's policy
and California law, this Agreement (other than Section e) does
not apply to, and Employee has no obligation to assign to
Employer, any invention that Employee develops entirely on his
own time without using Employer's equipment, supplies,
facilities, or trade secret information except those inventions
that either: (1) relate at the time of conception or reduction to
practice of the invention to Employer's business, or actual or
demonstrably anticipated research development of Employer; or (2)
result from any work performed by Employee for Employer, Employee
will advise the Company promptly in writing of any inventions
that he believes meet the criteria' in California Labor Code
Section 2870 and not otherwise disclosed on Exhibit A.
i. RETURNING COMPANY DOCUMENTS. Employee agrees that, at the time of
leaving the employ of the Company be will deliver to the Company
(and will not keep in his possession or deliver to anyone else)
any and all devices, records, data, notes, reports, proposals,
lists, correspondence, specifications, drawings, blueprints,
sketches, materials, equipment, others documents, or property, or
reproductions of any aforementioned items developed by Employee
pursuant to his employment with the Company or otherwise
belonging to the Company, its successors or assigns.
j. SOLICITATION OF EMPLOYEES. Employee agrees that he shall not, for
a period of one year immediately following the termination of his
relationship with Employer for any reason, whether with or
without cause, either directly or indirectly, on his own behalf
or in the service of or on behalf of others, solicit, recruit or
attempt to persuade any person to terminate such person's
employment with the Company, whether or not such person is a
full-time employee or whether or not such employment is pursuant
to a written agreement or is at-will.
k. INEVITABLE DISCLOSURE. After Employee's employment has terminated
Employee shall not accept employment with any competitor of
Employer, where the new employment is likely to result in the
inevitable disclosure of Employer's trade secrets or confidential
information, or it would be impossible for Employee to perform
his new job without using or disclosing trade secrets or
confidential information.
9. TERMINATION.
a. TERMINATION UPON COMPLETION OF INITIAL TERM. Unless terminated at
an earlier date pursuant to Section 9b or Sections 10-12 this
Agreement shall terminate on April 30, 2001.
b. TERMINATION FOR CAUSE. This Agreement may be terminated at any
time by Employer without prior notice thereof to Employee and
without any liability owning to Employee under this Agreement, in
subjective good faith belief of Employer, under the following
conditions, each of which shall constitute "Cause";
1. FAILURE TO DISCHARGE DUTIES. Employee willfully neglects or
refuses to discharge his duties hereunder or refuses to
comply with any lawful and reasonable instructions given to
him by Employer
2. BREACH. Employee shall have committed any material breach
and such breach is repeated or continued after written
notice of any breach of his obligations hereunder
3. GROSS MISCONDUCT. Employee is guilty of gross misconduct,
For the purposes of this Agreement the following acts shall
constitute gross misconduct:
i) Any act involving fraud or dishonesty or
misappropriation of funds or breach of applicable
regulations of competent authorities in relation to
trading or dealing with stocks, securities, investments
and the like;
ii) The carrying out of any activity or intentionally
making of any statement which would, in the good faith
judgment of Employer, prejudice or impair the good name
or standing of Employer or would bring Employer into
contempt, ridicule or may reasonably shock or offend
any community in which Employer is located;
iii) Attendance at work in a state of intoxication or
otherwise being found in possession at his place of
work any prohibited drug or substance, possession of
which would amount to a criminal offense;
iv) Assault or other act of violence against any employee
of Employer or other person during the course of his
employment;
v) Harassment or disparagement of others based on their
age, disability, color, national origin, race,
religion, sex or veteran status, including acts of
sexual harassment or,
vi) Conviction of any felony, or misdemeanor that in the
good faith judgment of Employer involves moral
turpitude.
10. TERMINATION BY EMPLOYER FOR REASONS OTHER THAN CAUSE. Notwithstanding
anything herein to the contrary, Employer may terminate this Agreement
at any time with thirty (30) days prior notice thereof to Employee. In
such an event, Employer shall pay to Employee all accrued but unpaid
salary, earned bonus and accrued vacation through the date of
termination, and the lesser of (i) the Base Salary for 12 months after
the termination in accordance with the Employer's normal practices, or
(ii) the Base Salary for the remaining life of the contract. In
addition, the vesting of all options to purchase Common Stock of the
Company held by Employee, under this Agreement or any other agreement,
shall be accelerated so that such options are immediately exercisable,
including bonus options to the extent that those options have been
granted as of the date of termination. In addition, Employer will
continue to provide to Employee for 12 months Medical, Dental, Vision,
Life and Disability Insurance. To be eligible for these payments and
benefits upon termination by Employer for Reasons Other than Cause,
Employee must execute a Full General Release Agreement ("Release").
Employer shall have no further obligations to Employee under this
Agreement.
11. TERMINATION BASED UPON CHANGE OF CONTROL.
If the Employee's employment is terminated, without "Cause," during
the first 12 months following a Change in Control (as defined below),
Employee shall be entitled to receive two (2) years Base Salary, 50%
of Base Salary as Incentive Bonus and benefits through the term of
this Agreement. Additionally, upon such termination, the vesting of
all options to purchase Common Stock of the Company held by Employee
shall be accelerated so that such options are immediately exercisable.
To be eligible for this payment, Employee must execute a Release,
Employer shall have no further obligations to Employee under this
Agreement. For purposes of this Section 11 and for purposes of this
Agreement, the term Change of Control: shall mean: (i) any change of
equity such that more than fifty percent (50%) of the issued and
outstanding shares of the Company are transferred to a third party;
(ii) or debt ownership, including but not limited to conversion rights
of debt to equity of the Employer such that more than fifty percent
(50%) of the issued and outstanding shares are transferred to a third
party; or (iii) a sale of substantially all of Emp1oyer' assets or
(iv) issuance of equity securities in an amount in excess of fifty
percent (50%) of the outstanding shares at the time of issuance.
However, a change of control shall specifically exclude (i) public
offering of the securities of the Company, and (ii) the Employers
Stock Purchase Agreement with Intellect Capital Group, LLC dated April
18, 2000.
12. TERMINATION BY EMPLOYEE.
a. VOLUNTARY TERMINATION. Employee may terminate his employment under
this Agreement at any time with thirty (30) days prior written notice
thereof to Employer. Upon such termination, Employee shall be entitled
to his pro-rata Base Salary and pro-rata Incentive Bonus through the
date of such termination and all stock options that have vested at
that time.
b. RESIGNATION FOR GOOD CAUSE. The termination of Employee's employment
under this Agreement by Employee shall be deemed a termination by
Employer for reasons other than cause if:
(i) removal of the Employee from the Executive Committee or a similar
reduction in position or duties; and
(ii) Employer materially breaches its obligations to Employee under
this Agreement.
TERMINATION UPON DEATH OR DISABILITY. To the extent consistent with federal
and state law, Employee's employment, salary, and accrual of commissions
shall terminate on his death or disability. "Disability" means any health
condition, physical or mental, or other cause beyond Employee's control,
that prevents him from performing his duties, even after reasonable
accommodation is made by Employer, for a period of 180 consecutive days
within any 360 day period. In the event of termination due to death or
disability, Employer shall pay employee (or his legal representative) his
salary prorated through the date of termination, at the rate in effect at
the time of termination, together with any benefits, including, without
limitation, prorated bonus and vacation, accrued through the date of
termination. Employer shall have no further obligations to Employee (or his
legal representative) under this Agreement.
GENERAL PROVISIONS.
a. AMENDMENT. This Agreement may be amended or modified only by a
writing signed by both of the parties hereto.
b. BINDING AGREEMENT. This Agreement shall inure to the benefit of
and be binding upon Employee, his or her heirs and personal
representatives, and Employer, its successors and assigns.
c. WAIVER. The waiver by either party of a breach of any provision
contained in this Agreement shall not be construed as or operate
as a waiver of any subsequent breach.
d. NOTICES
i) All notices and all other communication provided for herein shall
be in writing and delivered personally to the other designated
party, or mailed by certified or registered mail, return receipt
requested or delivered by a recognized national overnight courier
service, or sent by facsimile as follows:
If to Employer to: Mr. Patrick Dane
Director
If to Employee to: Mr. Jack Marshall
CEO
If Employee has provided notice to Employer that he is
represented by counsel, Employer shall copy Employee's counsel at
the address specified. Employee agrees and understands that any
legal fees or expenses incurred by him in connection with this
Agreement are his sole responsibility and Employer shall not
reimburse Employee for any portion of such fees or expenses.
ii) All notices sent under this Paragraph 13 shall be deemed given
twenty-four (24) hours after sent by facsimile or courier and
seventy-two (72) hours after sent by certified or registered
mail.
iii) Either party hereto may change the address to which notice is to
be sent hereunder by written notice to the other party in
accordance with the provisions of this Paragraph.
e. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of California without regard to
principles of conflicts of laws.
f. INJUNCTIVE RELIEF. Employee acknowledges that the services to be
rendered under this Agreement and the items described in Section 8 is
of a special, unique and extraordinary character, that it would be
difficult or impossible to replace such services or to compensate
Employer in money damages for a breach of this Agreement. Accordingly,
Employee agrees and consents that it he violates any of the provisions
of this Agreement, Employer, in addition to any other rights and
remedies available under this Agreement or otherwise, shall be
entitled to temporary and permanent injunctive relief, without the
necessity of proving actual damages and without the necessity of
posting any bond or other undertaking in connection therewith.
g. ENTIRE AGREEMENT. This Agreement contains the full and complete
understanding of the parties hereto with respect to the subject matter
contained herein and this Agreement supersedes and replaces any prior
agreement, either oral or written, which Employee may have with
Employer that relates generally to the same subject matter.
h. SURVIVAL. Notwithstanding any expiration or termination of this
Agreement, the provisions of this agreement shall survive and remain
in full force and effect, as shall any other provision hereof that, by
its terms or reasonable interpretation thereof sets forth obligations
that extend beyond the termination of this Agreement.
i. ASSIGNMENT. This Agreement may not be assigned by Employee without the
prior written consent of Employer, and any attempted assignment not in
accordance herewith shall be null and void and of no force or effect.
Employer can assign this Agreement to any Affiliate with Employee's
written consent. Thereafter, any such assignee shall be considered to
be the Employer for all purposes under this Agreement; provided
however, that references to previous incentive bonuses shall be deemed
to include incentive bonuses paid by any assignor.
j. SEVERABILITY. If any one or more of the terms, provisions, covenants
or restrictions of this Agreement shall be determined by a court of
competent jurisdiction to be invalid, void or unenforceable, then the
remainder of the terms, provisions, covenants and restrictions of this
Agreement shall remain in full force and effect, and to that end the
provisions hereof shall be deemed severable.
k. PARAGRAPH HEADING. The section headings set forth herein are for
convenience of reference only and shall not affect the meaning or
interpretation of this Agreement whatsoever.
l. VOLUNTARY AGREEMENT. Employee and Employer represent and agree that
each has reviewed all aspects of this Agreement, has carefully read
and fully understands all provisions of this Agreement, and is
voluntarily entering into this Agreement. Each party represents and
agrees that such party has had the opportunity to review any and all
aspects of this Agreement with legal, tax or other advisers(s) of such
party's choice before executing this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed, or caused their duly
authorized representative to execute, this Agreement as of the date first
above written.
EMPLOYER Jack Marshall
Patrick Dane
BY:
EXHIBIT A
---------
The Employee shall have the following duties:
A. CEO
---
The Employee shall serve the Employer in the position of Chief Executive Officer
("CEO") and a Member of the Executive Committee. In such capacity, Employee
shall, as part of the Executive Committee, manage the day to day operations of
the Company, lead the development of the Company's vision, business, and
recruitment of employees develop the business strategy, positioning and product
or service focus of the Company and such other and different tasks as may be
required or requested by the Board of Director and the Executive Committee.
B. Chairman of the Executive Committee and Vice Chairman
------------------------------------------------------------
Employee shall chair the Executive Committee, which shall, be responsible for
the strategic direction of the Company, including but not limited to,
"evangelizing" the Company, identifying business opportunities for the Company,
setting the direction and focus of the Company's research and development
effort, development of new product or service offerings for the Company, and
such other and different tasks as may be required or requested by the Board of
Directors.
EMPLOYMENT AGREEMENT
--------------------
THIS EMPLOYMENT AGREEMENT ("Agreement") is made and entered into this
26th day of June, 2000, by and between PhotoLoft.com, Inc., a Nevada corporation
- ----
("Employer"), and Brian Dowd, an individual ("Employee").
RECITALS
--------
A. WHEREAS, Employee has experience and expertise applicable to
employment with Employer to perform as the Chief Financial Officer of Employer,
Employer has agreed to employ Employee and Employee has agreed to enter into
such employment, on the terms set forth in this Agreement.
B. WHEREAS, Employee acknowledges that this Agreement is necessary
for the protection of Employer's investment in its business, goodwill, products,
methods of operation, information, and relationships with its customers and
other employees.
C. WHEREAS, Employer acknowledges that Employee desires definition
of his compensation and benefits, and other terms of his employment.
NOW, THEREFORE, in consideration thereof and of the covenants and
conditions contained herein, the parties agree as follows:
AGREEMENT
---------
1. TERM OF AGREEMENT
-------------------
1.1 Initial Term. The initial term of this Agreement shall begin
-------------
on __________ ("Commencement Date") and shall continue until the earlier of: (a)
the date on which it is terminated pursuant to Section 5; or (b) three (3) years
following the Commencement Date ("Initial Term"). After the expiration of the
Initial Term, Employee shall be employed on an at-will basis, with either party
able to terminate the employment, with or without cause and with or without
notice.
2. EMPLOYMENT
----------
2.1 Employment of Employee. Employer agrees to employ Employee to
-----------------------
render services on the terms set forth herein. Employee hereby accepts such
employment on the terms and conditions of this Agreement.
2.2 Position and Duties. Employee shall serve as the Chief
---------------------
Financial Officer of Employer, reporting to the Chief Executive
Officer/President of Employer, and as a member of the Executive Committee, and
shall have the general powers and duties of management usually vested in those
offices in a corporation and such other powers and duties as may be prescribed
from time to time by the Board of Directors.
2.3 Standard of Performance. Employee agrees that be will at all
-------------------------
times faithfully and industriously and to the best of his ability, experience
and talents perform all of the duties that may be required of and from him
pursuant to the terms of this Agreement. Such duties shall be performed at such
place or places as the interests, needs, business and opportunities of Employer
shall require or render advisable.
2.4 Exclusive Service. Employee shall devote all of his
------------------
business energies and abilities and all of his productive time to the
performance of his duties under this Agreement (reasonable absences during
holidays and vacations excepted), and shall not, without the prior written
consent of Employer, render to others any service of any kind (whether or not
for compensation) that, in the sole opinion of Employer, would materially
interfere with the performance of his duties under this Agreement.
Employee shall not, without the prior written consent of
Employer, maintain any affiliation with, whether as an agent, consultant,
employee, officer, director, trustee or otherwise, nor shall he directly or
indirectly render any services of an advisory nature or otherwise to, or
participate or engage in, any other business activity.
3. COMPENSATION
------------
3.1 Compensation. During the term of this Agreement, Employer
------------
shall pa the amounts and provide the benefits described in this Section 3, and
Employee agrees to accept such amounts and benefits in flu payment for
Employee's services under this Agreement.
3.2 Base Salary. Employer shall pay to Employee a base salary of
------------
$150,000.00 annually in equal semi-monthly installments, less applicable taxes.
At Employer's sole discretion, Employee's base salary will be reviewed may be
increased annually.
3.3 Discretionary Bonus. Except as described in Subsection 3.4
--------------------
below, Employee is eligible to receive an annual bonus, as determined by the
Board of Directors in its sole discretion. This discretionary bonus will be
based on performance criteria, and will be based on milestones. The target
amount, performance criteria and milestones are to be established by the Board
of Directors within four (4) months after the Commencement Date. This
discretionary bonus plan will commence on the date of Employee's employment.
3.4 Equity Incentive Plan.
-----------------------
(a) Employee shall be granted 400,000 options for Employer's
common stock ("Common Stock"), each of which shall be priced based on the
closing market value on the day of the grant, which will be the first day of
employment, vested over a 4 year period with periodic vesting occurring at the
end of each six months of employment.
(b) Employee will be eligible for additional grants of
options to purchase Company stock based on the Employer's 1999 Stock Incentive
Plan and at the discretion of the Board of Directors.
(d) Except as otherwise set forth herein, vesting of options
will cease upon the termination of Employee's employment with Employer.
(e) At the time his employment is terminated, or at any time
during his employment, Employee may, at his discretion, assign any option to
purchase Employer's stock, to which Employee may have a vested or non-vested
right, to trusts or trustees for estate planning purposes. Any such assignee
shall be subject to the vesting requirements set forth in this Agreement
including, but not limited to, Subsection 3.5.
(f) In the event of a merger, consolidation, acquisition,
separation or reorganization, as defined in Section 6.1.2 of the 1999 Stock
Option Plan, all of the Employee s currently granted options shall vest
immediately.
3.5 Fringe Benefits. Subject to Section 3.7 and upon satisfaction
----------------
of the applicable eligibility requirements, Employee shall be entitled to all
fringe benefits which Employer may make generally available from time to time
for similar employees. Such benefits shall. include without limitation those
available, if any, under any group insurance, profit sharing, pension or
retirement plans or sick leave policy. Specifically the employer will provide
standard medical and dental insurance and term life insurance at one and a half
times annual salary.
3.6 Vacations. Employee shall accrue, on a daily basis, a total of
---------
two (3) weeks vacation per year. provided however. that Employee's accrued and
unused vacation not to exceed a total of four (5) weeks. Any accrued but unused
vacation will be paid to Employee at the time tat his employment is terminated.
Employer acknowledges that the Employee has prior engagement & on the dates
noted below which can not be rescheduled. Therefore, the following dates are to
be treated as vacation days which will offset vacation accruals during employees
first year of employment. Employee is the best man in a wedding and will need to
take a vacation day on Friday July 21.2000.
3.7 Deduction from Compensation. Employer shall deduct and
-----------------------------
withhold from all compensation payable to Employee all amounts required to be
deducted or withheld pursuant to any present or future law, ordinance,
regulation, order, writ, judgment, or decree requiring such deduction and
withholding.
4. REIMBURSEMENT OF EXPENSES
---------------------------
4.1 Travel and Other Expenses. Employer shall pay to or reimburse
--------------------------
Employee for those reasonable travel, promotional and similar expenditures
incurred by Employee which Employer determines are reasonably necessary for the
proper discharge of Employee's duties under this Agreement and for which
Employee submits appropriate receipts and indicates the amount, date, location
and business character in a timely manner.
4.2 Liability Insurance. Employer shall provide Employee with
--------------------
officers and directors' insurance, or other liability insurance, consistent with
its usual business practices, to cover Employee against all insurable events
related to his employment with Employer. Employer may, in its sole discretion,
provide this benefit through commercially available insurance or may self-insure
this benefit.
5. TERMINATION
-----------
5.1 Termination by Employer With Good Cause. Employer may
--------------------------------------------
terminate Employee's employment at any time, without notice, for "Good Cause."
If Employer should terminate Employee's employment with "Good Cause," Employer
shall pay Employee his salary prorated through the date of termination, at the
rate in effect at the time notice of termination is given, together with any
benefits, such as vacation, accrued through the date of termination. Employer
shall have no further obligations to pay any compensation or any other benefits
to Employee under this Agreement or any otter agreement, and all unvested
options will terminate.
5.2 Good Cause. For purposes of this Agreement, a termination
-----------
shall be for "Good Cause" if Employee, in the subjective, good faith opinion of
Employer, shall:
(a) be convicted of a felony which, in the sole opinion of
Employer, involves moral turpitude;
(b) commit an act, or fail to commit an act, that amounts to
willful misconduct, wanton misconduct or gross negligence;
(c) engage in any activity that is in conflict with
Employee's employment;
(d) commit an act of fraud, misappropriation of funds or
embezzlement in connection with his duties;
(e) breach Employee's fiduciary duty to Employer, including,
but not limited to, acts of self-dealing (whether or not for personal profit);
(i) materially breach this Agreement; or
(g) fail to substantially perform the responsibilities and
duties specified herein (other than any such failure resulting from Employee s
incapacity due to physical or mental illness).
5.3 Termination by Employer Without Good Cause. If Employer
-----------------------------------------------
terminates Employee's employment without Good Cause, then Employer shall pay
Employee: (1) all accrued but unpaid base salary and vacation, in a lump sum;
and (2) an amount equal to the lesser of (i) the remaining base compensation
(base salary) under the Initial Term (at the rate in effect at the time of
termination) and (ii) six (6) months of base compensation (at the rate in effect
at the time of termination). To be eligible for these payments and benefits upon
termination by Employer without Good Cause, Employee must execute a Full General
Release Agreement ("Release"). Employer shall have no further obligations to
Employee under this Agreement.
5.4 Death or Disability. To the extent consistent with federal and
-------------------
state law, Employee's employment, salary, and accrual of commissions shall
terminate on his death or disability. "Disability" means any health condition,
physical or mental, or other cause beyond Employee's control, that prevents him
from performing his duties, even after reasonable accommodation is made by
Employer, for a period of 180 days within any 360 day period. In the event of
termination due to death or Disability, Employer shall pay Employee (or his
legal representative) his salary prorated through the date of termination, at
the rate in effect at the time of termination, together with any benefits,
including, without limitation, accrued bonus, if any, and vacation, accrued
through the date of termination. To be eligible for this payment, Employee (or
his legal representative) must execute a Release. Employer shall have no further
obligations to Employee (or his legal representative) under this Agreement.
5.5 Return of Employer Property. Within five days after the
------------------------------
Termination Date, Employee shall return to Employer all products, books,
records, forms, specifications, formulae, data processes, designs, papers and
writings relating to the business of Employer including without limitation
proprietary or licensed computer programs, customer lists and customer data,
and/or copies or duplicates thereof in Employee's possession or under Employee's
control. Employee shall not retain any copies or duplicates of such property and
all licenses granted to him by Employer to use computer programs or software
shall be revoked on the Termination Date.
6. DUTY OF LOYALTY
-----------------
6.1 During the term of this Agreement, Employee shall not, without
the prior written consent of Employer, directly or indirectly render services of
a business, professional, or commercial nature to any person or firm, whether
for compensation or otherwise, or engage in any activity directly or indirectly
competitive with or adverse to the business or welfare of Employer, whether
alone, as a partner, or as an officer, director, employee, consultant, or holder
of more than 1 % of the capital stock of any other corporation. Otherwise,
Employee may make personal investments in any other business so long as these
investments do not require him to participate in the operation of the companies
in which he invests.
7. CONFIDENTIAL INFORMATION
-------------------------
7.1 Trade Secrets of Employer. Employee, during the term of this
---------------------------
Agreement, will develop, have access to and become acquainted with various trade
secrets which are owned by Employer and/or its affiliates and which are
regularly used in the operation of the businesses of such entities. Employee
shall not disclose such trade secrets, directly or indirectly, or use them in
any way, either during the term of this Agreement or at any time thereafter,
except as required in the course of his employment by Employer. All files,
contracts, manuals, reports, letters, forms, documents, notes, notebooks, lists,
records, documents, customer, lists, vendor lists, purchase information,
designs, computer programs and similar items and information, relating to the
businesses of such entities, whether prepared by Employee or otherwise and
whether now existing or prepared at a future time, coming into his possession
shall remain the exclusive property of such entities, and shall not be removed
for purposes other than work-related from the premises where the work of
Employer is conducted, except with the prior written authorization by Employer.
7.2 Confidential Data of Customer of Employer. Employee, in the
--------------------------------------------
course of his duties, will have access to and become acquainted with financial,
accounting, statistical and personal data of customers of Employer and of their
affiliates. All such data is confidential and shall not be disclosed, directly
or indirectly, or used by Employee in any way, either during the term of this
Agreement (except as required in the course of employment by Employer) or at any
time thereafter.
7.3 Confidentiality Program. Employee shall take such steps and
------------------------
shall adopt and/or implement such policies and programs as may be necessary to
protect and to cause all subordinate employees of Employer to protect the trade
secrets and other confidential information of Employer, its affiliates and
customers.
7.4 Inevitable Disclosure. After Employee's employment has
----------------------
terminated, employee shall not accept employment with any competitor of
Employer, where the new employment is likely to result in the inevitable
disclosure of Employer's trade secrets or confidential information, or it would
be impossible for Employee to perform his new job without using or disclosing
trade secrets or confidential information.
7.5 Continuing Effect. The provisions of this Section 7 shall
------------------
remain in effect after the Termination Date.
8. NO SOLICITATION
----------------
Employee agrees that he will not, during his employment with
Employer, and for one (1) year thereafter, encourage or solicit any other
employee of Employer to terminate his or her employment for any reason, nor will
he assist others to do so.
9. INTELLECTUAL PROPERTIES.
------------------------
9.1 Subject to Subsection 9.2 below, all ownership, copyright,
patent, trade secrecy, and other rights in all works, programs, fixes, routines,
inventions, ideas, designs, manuals, improvements, discoveries, processes,
customer lists or other properties (the "Intellectual Properties") made or
conceived by Employee during the term of his employment by Employer shall be the
right and property solely of Employer, whether developed independently by
Employee or jointly with others, and whether or not developed or conceived
during regular working hours or at Employer's facilities, and whether or not
Employer uses, registers, or markets the same.
9.2 In accordance with Employer's policy and California law, this
Agreement (other than Subsection 9.3) does not apply to, and Employee has no
obligation to assign to Employer, any invention that Employee develops entirely
on his own time without using Employer's equipment, supplies, facilities, or
trade secret information except for those inventions that either:
(1) relate at the time of conception or reduction to practice of the invention
to Employer's business, or actual or demonstrably anticipated research or
development of Employer; or
(2) result from any work performed by Employee for Employer.
9.3 If and to the extent that Employee makes use, in the course of
his employment, of any items or Intellectual Properties previously developed by
Employee or developed by Employee outside the scope of this Agreement, Employee
hereby grants Employer a nonexclusive, royalty-free, perpetual, irrevocable,
worldwide license (with right to sublicense), to make, use, sell, copy,
distribute, modify, and otherwise to practice and exploit any and all such items
and Intellectual Properties.
9.5 Employee will assist Employer as requested during and after
the term of his employment to further evidence and perfect, and to enforce,
Employer's rights in and ownership of the Intellectual Properties covered
hereby, including without limitation, the execution of additional instruments of
conveyance and assisting Employer with applications for patents or copyright or
other registrations, which will be made at Employer's expense. If such
assistance is subsequent to the termination of employment, Employer will pay
reasonable direct expenses in connection with such assistance.
10. OTHER PROVISIONS
-----------------
10.1 Compliance With Other Agreements. Employee represents and
-----------------------------------
warrants to Employer that the execution, delivery and performance of this
Agreement will not conflict with or result in the violation or breach of any
term or provision of any order, judgment, injunction, contract, agreement,
commitment or other arrangement to which Employee is a party or by which he is
bound, including without limitation any agreement restricting the sale of
products similar to Employer's products in any geographic location or otherwise.
Employee acknowledges that Employer is relying on his representation and
warranty in entering into this Agreement, and agrees to indemnify Employer from
and against all claims, demands, causes of action, damages, costs or expenses
(including attorneys' fees) arising from any breach thereof.
10.2 Injunctive Relief. Employee acknowledges that the services to
-----------------
be rendered under this Agreement and the items described in Sections 6, 7, 8 and
9 are of a special, unique and extraordinary character, that it would be
difficult or impossible to replace such services or to compensate Employer in
money damages for a breach of this Agreement. Accordingly, Employee agrees and
consents that if he violates any of the provisions of this Agreement, Employer,
in addition to any other rights and remedies available under this Agreement or
otherwise, shall be entitled to temporary and permanent injunctive relief,
without the necessity of proving actual damages and without the necessity of
posting any bond or other undertaking in connection therewith.
10.3 Attorneys' Fees. The prevailing party in any suit or other
----------------
proceeding brought to enforce, interpret or apply any provisions of this
Agreement, shall be entitled to recover all costs and expenses of the proceeding
and investigation (not limited to court costs), including all attorneys' fees.
10.4 Counsel. The parties acknowledge and represent that, prior to
-------
the execution of this Agreement, they have had an opportunity to consult with
their respective counsel concerning the terms and conditions set forth herein.
Additionally, Employee represents that he has received independent legal advice
concerning the taxability of any consideration received under this Agreement.
Employee has not relied upon any advice from Employer and/or its attorneys with
respect to the taxability of any consideration received under this Agreement.
Employee further acknowledges that Employer has not made any representations to
him with respect to tax issues.
10.6 Nondelegable Duties. This is a contract for Employee's
--------------------
personal services. The duties of Employee under this Agreement are personal and
may not be delegated or transferred in any manner whatsoever, and shall not be
subject to involuntary alienation, assignment or transfer by Employee during his
life,
10.7 Entire Agreement. This Agreement is the only agreement and
-----------------
understanding between the panics pertaining to the subject matter of this
Agreement, and supersedes all prior agreements, summaries of agreements,
descriptions of compensation packages discussions, negotiations,
understandings, representations or warranties, whether verbal or written,
between the parties pertaining to such subject matter.
10.8 Governing Law. The validity, construction and performance of
--------------
this Agreement shall be governed by the laws, without regard to the laws as to
choice or conflict of laws, of the State of California.
10.9 Venue. If any dispute arises regarding the application,
-----
interpretation or enforcement any provision of this Agreement, including fraud
in the inducement, such be resolved either in federal or state court in San
Jose, California.
10.10 No Jury. If any dispute arises regarding the application,
--------
interpretation or enforcement of any provision of this Agreement, including
fraud in the inducement, the parties hereby waive their right to a jury trial.
10.11 No Punitive Damages. If any dispute arises regarding the
---------------------
application, interpretation or enforcement of any provision of this Agreement,
including fraud in the inducement, the parties hereby waive their right to seek
punitive damages in connection with said dispute.
10.12 Severability. The invalidity or unenforceability of any
------------
particular provision of this Agreement shall not affect the other provisions,
and this Agreement shall be construed in all respects as if any invalid or
unenforceable provision were omitted.
10.13 Amendment and Waiver. This Agreement may be amended,
----------------------
modified or supplemented only by a writing executed by each of the parties.
Either party may in writing waive any provision of this Agreement to the extent
such provision is for the benefit of the waiving party. No waiver by either
party of a breach of any provision of this Agreement shall be construed as a
waiver of any subsequent or different breach, and no forbearance by a party t
seek a remedy for noncompliance or breach by the other party shall be construed
as a waiver of any right or remedy with respect to such noncompliance or breach.
10.14 Binding Effect. The provisions of this Agreement shall bind
---------------
and inure to the benefit of the parties and their respective successors and
permitted assigns.
10.15 Notice. Any notices or communications required or permitted
------
by this Agreement shall be deemed sufficiently given if in writing and when
delivered personally or 48 hours after deposit with the United States Postal
Service as registered or certified mail, postage prepaid and addressed as
follows:
(a) If to Employer, to the principal office of Employer in
the State of California, marked "Attention: Jack Marshall"; or
(b) If to Employee, to the most recent address for Employee
appearing in Employer's records.
10.17 Headings. The Section and other headings contained in this
--------
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement a
of the day and year first above written.
EMPLOYER
PHOTOLOFT.COM, INC
-------------------
By:___________________
Its:___________________
BRIAN DOWD
Cefeo Investments, Limited S.A.
c/o Banca Privata Edmond de Rothschild (Lugano) S.A.
via Ginevra 2
Lugano, Switzerland
Tel: + 41 91 913 4500, Fax: + 41 91 913 4501
ESCROW AND OPTION
AGREEMENT
This ESCROW AND OPTION AGREEMENT, made as of the 16th day of June, 2000 (the
"Agreement"), by _____________________ located at
_______________________________ U.S.A. [tel: + ________________, fax: +
________________] (the "Optionor"), Cafeo Investments, Limited, c/o Banca
Privata Edmond de Rothschild (Lugano) S.A., located at via Ginevra 2, Lugano,
Switzerland [tel: + 41 91 913 4500, fax: + 41 91 913 4501] (the "Optionee"),
Chase Manhattan Bank & Trust Co., located at 101 California Street, Suite 2725,
San Francisco, CA 94111, U.S.A. [tel: + 1 415 954 9506, fax: + 1 415 693 8850]
(the "Escrow Agent") and their respective successors and assigns.
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. The Optionor will deposit ________________ shares of common stock (the
"Shares") of $0.001 par value, of Photoloft.com, located at 300 Orchard
City Drive, Suite 142, Campbell, CA 95008, U.S.A. listed on the OTC
Bulletin Board, symbol LOFT (the "Company") with Chase Manhattan Bank,
attention Pardeep Sharma, located at 4 New York Plaza, Ground Floor, New
York, NY 10004-2477, U.S.A. (tel: + 1 212 946 3046, + 1 212 946 8587) by
transfer of the original certificates for Shares with Medallion Signatures
in an account controlled by the Escrow Agent;
2. The Optionor and the Optionee hereby appoint the Escrow Agent as escrow
agent, and the Escrow Agent hereby accepts such appointment for the purpose
and on the terms and conditions set forth in this Option and Escrow
Agreement.
3. The Escrow Agent will accept from the Optionor ___________ Shares by
transfer of the original certificates for Shares with Medallion Signatures.
Such Shares shall contain restrictive legend. The Optionor will remit the
Shares into the Escrow Agents brokerage account (the "Trading Account") as
follows:
Escrow Agent: Chase Manhattan Bank & mist Co.
Brokerage Firm: Chase Manhattan Bank
Address: 4 New York Plaza, Ground Floor, NY, NY 10004
Telephone No: + 1-212-946-3046
Fax No: + 1-212-946-8587
Company's Initials: __ Investor's Initials: __ Finder's Initials: __
June 16th, 2000
Escrow and Option Agreement
Photoloft.com
Page 2
Attention: Pardeep Sharma
Account Name: Corporate Trust Safekeeping Account
Institution No: 26934
ABA: 021-000-021
DTC Routing No: 902
The Escrow Agent will not release, transfer, encumber or sell the Shares
(the "Unexercised Shares") unless the option is exercised in part or in
full by the Optionee and funds are remitted to the Escrow Agent for the
benefit of the Optionor (as described below).
4. The Company agrees to provide certain registration rights for the Shares,
pursuant to the registration rights (the "Registration Rights"), as
attached in Appendix A
5. At any time following the date of execution of this Agreement until the end
of the one hundred and twenty (120) day period (the "Term") commencing on
the later of a) the date of receipt of the Shares by the Escrow Agent (the
"Delivery Date"), b) the date of receipt by the Optionee of the Opinion of
Counsel (as defined below), c) the date of receipt by the Optionee of the
Transfer Agent Consent (as defined below) or d) either the date when the
Shares are no longer subject to restrictions under Rule 144 or the
effective date of a registration statement underlying the Shares, the
Optionee will have the right to exercise the option (the "Option(s)") to
purchase the Shares, in a single transaction or in multiple transactions,
all or in part, at the exercise prices per share as follows:
(one quarter) $2.25
(one quarter) $2.50
(one quarter) $2.75
(one quarter) $3.00
6. The Escrow Agent will accept from the Optionee, by wire transfer funds in
an amount of $ _______________ on one or more occasions (the "Incoming
Funds"), for the purpose of exercising the Option(s). The Optionee is to
remit any funds to the Escrow Agent as follows:
Bank: Chase Manhattan Bank
Beneficiary: Chase Manhattan Bank & Trust Co.
Account Number: Trust Clearing Account Number 507-874439
For Benefit of: Cefeo/________ Escrow
ABA: 021-000-021
Company's Initials: __ Optionor's Initials: __ Optionee's Initials: __
June 16th, 2000
Escrow and Option Agreement
Photoloft.com
Page 3
Attention: Hank Helley
Tel: + 1-415-954-9506
Fax: + 1-415-693-8850
7. Each occasion of the receipt of the Incoming Funds by the Escrow Agent from
the Optionee shall constitute the exercise of the option for a number of
shares that shall be determined by dividing the amount of such Incoming
Funds by the Exercise Price (the "Exercised Shares"), as specified on each
occasion through a notice from the Optionee to the Escrow Agent. The Escrow
Agent may release, transfer, encumber or sell any Exercised Shares on
behalf of the Optionee without further instruction from the Optionor.
8. All Incoming Funds shall be remitted by the Escrow Agent to the Optionor as
follows:
Bank:
Beneficiary:
Account Number:
ABA:
Attention:
Tel:
Fax:
9. The Escrow and Option Agreement shall terminate (the "Termination Date") on
the sooner of a) the exercise of the Option(s) in full for the purchase of
all, the Unexercised Shares or b) the expiration of the Term. On the
Termination Date, all Unexercised Shares shall be returned by the Escrow
Agent to the Optionor and any excess Incoming Funds and all Exercised
Shares remaining in the Trading Account shall remain to the credit and
benefit of the Optionee. Following the Termination Date, the Escrow Agent
shall use its best efforts to return the Unexercised Shares to the Optionor
as quickly as possible. After the Termination Date all activity in the
Trading Account shall be at sole instruction of the Optionee.
10. Each of the Optionor and the Optionee warrants to the Escrow Agent that (a)
except for the interest of the Optionor in the Incoming Funds after the
delivery of the Shares by the Optionor to the Escrow Agent and (b) the
interest of the Optionee in the Shares after the delivery of the Incoming
Funds by Optionee to the Escrow Agent, there exists no security interest in
the Escrow Account, its intended contents, or any escrow funds or any part
thereof
Company's Initials: __ Optionor's Initials: __ Optionee's Initials: __
June 16th 2000
Escrow and Option Agreement
Photoloft.com
Page 4
11. The Company, upon the execution hereof, will provide an opinion letter (the
"Opinion of Counsel") from securities counsel to the Company, to the effect
that (i) the Company is duly incorporated and validly existing; (ii) the
issuance of the Shares has been duly approved by all required corporate
action, and that all such securities, upon due issuance, shall be validly
issued and outstanding, fully paid and nonassessable; (iii) this Agreement
is valid and a binding obligation of the Company, enforceable in accordance
with their terms, except as enforceability of any indemnification
provisions may be limited by principles of public policy, and subject to
laws of general application relating to bankruptcy, insolvency and the
relief of debtors and rules of laws governing specific performance and
other equitable remedies; and (iv) based upon the representations and
warranties of the Company, the offer and sale of the Shares by the Optionee
from the Optionor is exempt from the registration requirements of the
Securities Act; and (v) following the date when the Shares are no longer
subject to restrictions under Rule 144 or the effective date of a
registration statement underlying the Shares, the Shares will be free
trading and without restrictive legend; except that with respect to the
foregoing opinions counsel may add such qualifications as are consistent
with firm practice, including an assumption that the transaction does not
constitute a plan or scheme to evade the registration provisions of the
Securities Act.
12. Upon the mutual execution of this Agreement, the Company will notify the
Company's transfer agent (the "Transfer Agent") of the terms of this
Agreement. Following the Delivery Date, upon written instruction from the
Escrow Agent the Company irrevocably consents to the transfer of the
original certificates for the Shares by the Transfer Agent into the street
name of Chase Manhattan Bank. The Company shall instruct the Transfer
Agent, that upon the exercise of the Option(s) by the Optionee, the
Transfer Agent shall issue the respective Share certificates in the name of
the Optionee or such persons as may be designated by the Optionee or the
Escrow Agent representing the number of Shares issuable pursuant to each
Option(s) and that, following either the date when the Shares are no longer
subject to restrictions under Rule 144 or the effective date of a
registration statement underlying the Shares, the Shares shall otherwise be
freely transferable on the books and records of the Company. Upon the
execution of this Agreement, the Company will cause the transfer agent to
execute and acknowledge in writing to the Optionee an irrevocable consent
of the foregoing (the "Transfer Agent Consent").
13. Following the execution of the Option and Escrow Agreement, upon written
notice from the Optionee, the Company agrees to enter into a European
investor relations program (the "IR Program") with Elliot, Lane &
Associates, a firm focused on investor relations in Germany, at a cost not
to exceed $75,000.
Company's Initials: __ Optionor' s Initials: __ Optionee's Initials: __
June 16th, 2000
Escrow and Option Agreement
Photoloft.com
Page 5
14. The Optionor warrants to the Optionee that it will not sell any of the
Shares to any other party besides the Optionee before the Termination Date.
In addition, the Optionor warrants that it will not sell any other shares
of common stock of the Company that it owns to any party besides the
Optionee before the Termination Date.
15. The Escrow Agent shall have no duties or obligations hereunder except those
specifically set forth herein and such duties and obligations shall be
determined solely by the express provisions of this Escrow and Option
Agreement. The Escrow Agent shall not be liable for anything it may do or
refrain from doing in connection with its duties hereunder except as a
result of its own willful misconduct or fraud. The Escrow Agent shall not
be required to defend any legal proceeding that may be instituted against
it in respect of the subject matter of these instructions unless requested
to do so by the undersigned parties and indemnified to its satisfaction
including the reasonable cost of counsel selected by the Escrow Agent
against the cost and expense of such defense. The Escrow Agent shall not be
required to institute legal proceedings of any kind, and shall have no
responsibility to verify the genuineness or validity of any document or
signature or other item deposited with or submitted to it under expenses
associated with the performances of the Escrow Agent's duties under this
Escrow and Option Agreement, including the fees of counsel of this Escrow
and Option Agreement.
16. Communication from the Escrow Agent shall be delivered by messenger or
forwarded by facsimile, regular, or certified mail, and shall be effective
when received. All communication to the Escrow Agent (including money and
items for deposit hereunder) shall refer to the Trading Account and be
addressed to the Escrow Agent at its address and fax number as set forth
above and shall be effective by the Escrow Agent.
17. The undersigned parties acknowledge that the Escrow Agent may have in the
past, and may in the future, represent either the Optionor or the Optionee,
in transactions or matters other than that covered by this Escrow and
Option Agreement. All parties hereto acknowledge that there currently
exists no conflict between the parties which could in any way preclude the
Escrow Agent from serving as Escrow Agent and continuing his representation
of the Optionor or the Optionee, and all parties hereby waive any current
conflicts or possible conflicts which may exist or possibly could exist, if
any. In the event a conflict between the parties the Escrow Agent will, in
any case, continue to be bound by the term of this Escrow and Option
Agreement
Company's Initials: __ Optionor' s Initials: __ Optionee's Initials: __
June 16th, 2000
Escrow and Option Agreement
Photoloft.com
Page 6
18. This Escrow and Option Agreement shall be governed by and construed, in
accordance with the laws of the State of California, United States of
America.
19. This Escrow and Option Agreement may be executed in several counterparts
each of which shall be an original, and such counterparts shall together
constitute but one and the same instrument.
20. This Escrow and Option Agreement between the Optionee and the Optionor
constitutes the entire agreement between the parties hereto with respect of
the subject matter hereof and may not be changed or modified except by a
written agreement signed by all the parties hereto.
Company's Initials: __ Optionor' s Initials: __ Optionee's Initials: __
June 16th, 2000
Escrow and Option Agreement
Photoloft.com
Page 7
IN WITNESS WHEREOF, each of the parties hereto has executed this Escrow and
Option Agreement on the date and year first written above.
Agreed and Accepted:
The Optionee
Cefeo Investments, Limited S.A.
By:____________________________
Walter Blum
Its: Director
Agreed and Accepted:
The Optionor
By:_____________________
Its:
Agreed and Accepted:
The Company
Photoloft.com
By:_________________
Jack Marshall
Its:
Agreed and Accepted:
The Escrow Agent
Chase Manhattan Trust & Co.
By:______________________
Hank Helley
Its: Vice-President
Company's Initials: __ Optionor' s Initials: __ Optionee's Initials: __
CERTIFICATE OF CORRECTION
OF
CERTIFICATE OF DESIGNATIONS, PREFERENCES AND RIGHTS
OF
SERIES B CONVERTIBLE PREFERRED STOCK
OF
PHOTOLOFT, INC.
Jack Marshall and Lisa Marshall certify that:
1. They are the President and Secretary, respectively, of PhotoLoft,
Inc., a corporation organized and existing under the State of Nevada (the
"Company").
2. The instrument being corrected is entitled "Certificate of
Designations, Preferences and Rights of Series B Convertible Preferred Stock of
PhotoLoft.com", and said instrument was filed with the Secretary of State of the
State of Nevada on May 17,, 2000.
3. Section 2(d)(i) of said Certificate of Designation, as corrected,
should read as follows:
(i) Holder(s) Delivery Requirements. To convert Series B Preferred
Shares into full shares of Common Stock at any time within thirty (30) days
of the date issuance of the Series B Preferred Shares (and, in no case
later than said thirtieth (30th) day after the date of issuance) (the
"Conversion Date"), the holder(s) thereof shall (A) deliver or transmit by
facsimile, for receipt on or prior to 11:59 p.m., Eastern Standard Time, on
such date, a copy of a fully executed notice of conversion in the form
attached hereto (the "Conversion Notice") to the Company or its designated
transfer agent (the "Transfer Agent"), and (B) surrender to a common
carrier for delivery to the Company or the Transfer Agent as soon as
practicable following such date, the original certificates representing the
Series B Preferred Shares being converted (or an indemnification
undertaking with respect to such shares in the case of their loss, theft or
destruction) (the "Preferred Stock Certificates") and the originally
executed Conversion Notice.
1
4. Section 2(e) of said Certificate of Designation, as corrected,
should read as follows:
(e) Mandatory Conversion. On the first to occur of (i) the thirtieth
---------------------
(30th) day from the date of issuance of the Series B Preferred Shares or
(ii) a sale of all or substantially all of the Company's assets to another
Person (as defined below) or a merger or similar transaction which is
effected in such a way that the Company is not the surviving entity or
shares of Common Stock of the Company are to be cancelled in exchange for
value (referred to herein as in "Organic Change") (for purposes of this
Agreement, "Person" shall mean an individual, a limited liability company,
a partnership, a joint venture, a corporation, a trust, an unincorporated
organization and a government or any department or agency thereof), then
all such Series B Preferred Shares shall automatically be converted as of
such date (all Series B Preferred Shares shall be converted as of the
closing of said Organic Change as if the holder(s) of such Series B
Preferred Shares had given the Conversion Notice on the date of such
closing and the Conversion Date had been fixed as of the date of such
closing) in accordance with this Section 2, and all holders of Series B
Preferred Shares shall within two (2) business days thereafter surrender
all Preferred Stock Certificates, duly endorsed for cancellation, to the
Company or its Transfer Agent. No person shall thereafter have any rights
in respect of Series B Preferred Shares, except the right to receive shares
of Common Stock on conversion thereof as provided in this Section 2.
5. That said Sections, as corrected, conform the wording of the amended
Sections to that adopted by the Board of Directors of the Company.
2
IN WITNESS WHEREOF, the Company has caused this Certificate of Correction to be
signed by Jack Marshall, its President, and Lisa Marshall, its Secretary, as of
the 26th day of July, 2000.
PHOTOLOFT.COM
By:
Name: Jack Marshall
Title: President
By:
Name: Lisa Marshall
Title: Secretary
[Notarization]