10.1 Employment Agreement of Xxxx Xxxxx
EMPLOYMENT AGREEMENT
BETWEEN BLUE GATE CORPORATION AND
XXXX X. XXXXX
This Employment Agreement (the "Agreement") is made effective as of the
_____ day of February, 2005, by and between Blue Gate Corporation, a Nevada
corporation ("Blue Gate"), and Xxxx X. Xxxxx (the "Executive").
WHEREAS, The Executive is willing to be employed by Blue Gate from and
after the effective date on the basis and terms and conditions set forth in this
Agreement.
THEREFORE, upon the mutual promises and covenants of the parties, and other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, and intending to be legally bound, the parties agree as follows:
1. Employment.
Blue Gate hereby employs the Executive, and the Executive hereby accepts
such employment, for the period stated in section (3) below and upon the
other terms and conditions herein provided.
2. Position and Duties.
During the Employment Period the Executive agrees to serve as Chief
Financial Officer ("CFO") of Blue Gate. In his capacity of CFO, the
Executive will perform such duties and responsibilities for Blue Gate as
the Board of Directors of Blue Gate may from time to time assign to him.
The Executive shall have no responsibility for payroll or for the filing of
any payroll tax return, nor for payment of any tax of any kind that may be
due or payable by Blue Gate or any of its divisions.
3. Term.
By this Agreement, Blue Gate employs the Executive, and the Executive
accepts employment with Blue Gate, for a period consisting of two (2)
years, commencing on the date of this Agreement.
4. Compensation.
In consideration of such service, Blue Gate agrees to pay the Executive as
compensation an annual salary of $120,000.00, in accordance with Blue
Gate's regular payroll practices in effect from time to time.
Stock Options. In addition to the compensation set forth above, the
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Executive shall be entitled to receive options to purchase 350,000 shares
of Blue Gate shares of common stock, par value $.001 per share ("Option
Shares"), at the per-share option price of $.50, granted pursuant to a
Stock Option Agreement being entered into in connection herewith.
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This option ______[shall expire in February 2010] ________ and shall become
vested and exercisable _________ [pro rata on a monthly basis over the
two-year term of the Employment Agreement]_____________ until this option
become fully vested; provided, however, that if a suitable replacement for
Executive's position is hired by Blue Gate within the first year of this
Agreement not because of any fault in Executive's performance hereunder,
then (notwithstanding the above or anything else contained herein) 100% of
the then unvested shares shall immediately become vested.
The Option Shares to be issued pursuant to this Agreement shall be
restricted securities with piggy back registration rights, and shall
terminate and become null and void after the expiration of five (5) years
from the date of grant.
Bonus. In addition to the compensation set forth above, Executive and Blue
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Gate agree to enter into good faith negotiations with a view to reaching an
agreement on the payment of one or more bonuses (the "Bonuses") in such
amounts as are mutually agreed upon by Executive and Blue Gate, if major
transactions (such as acquisitions and financings) agreed mutually upon by
them shall be achieved. The Bonuses shall be payable at such time as is
mutually agreed upon by Executive and Blue Gate.
5. [INTENTIONALLY OMITTED]
6. Confidentiality.
In the course of the performance of Executive's duties hereunder, Executive
recognizes and acknowledges that Executive may have access to certain
confidential and proprietary information of Blue Gate or any of its
affiliates. Without the prior written consent of Blue Gate, Executive shall
not disclose any such confidential or proprietary information to any person
or firm, corporation, association, or other entity for any reason or
purpose whatsoever, and shall not use such information, directly or
indirectly, for Executive's own behalf or on behalf of any other party.
Executive agrees and affirms that all such information is the sole property
of Blue Gate and that at the termination and/or expiration of this
Agreement, at Blue Gate's written request, Executive shall promptly return
to Blue Gate any and all such information so requested by Blue Gate.
The provisions of this Section shall not, however, prohibit
Executive from disclosing to others or using in any manner information
that:
(a) has been published or has become part of the public domain
other than by acts, omissions or fault of Executive;
(b) has been furnished or made known to Executive by third
parties (other than those acting directly or indirectly for or on behalf of
Executive) as a matter of legal right without restriction on its use or
disclosure;
(c) was in the possession of Executive prior to obtaining such
information from Blue Gate in connection with the performance of this
Agreement; or
(d) is required to be disclosed by law.
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7. Indemnification.
Blue Gate shall to the full extent permitted by law or as set forth in the
Articles of Incorporation and the Bylaws of Blue Gate, indemnify, defend
and hold harmless Executive from and against any and all claims, demands,
liabilities, damages, loses and expenses (including reasonable attorney's
fees, court costs and disbursements) arising out of the performance by him
of his duties hereunder except in the case of his willful misconduct.
8. Termination.
This Agreement and the employment relationship created hereby will
terminate (i) upon the death of Executive under section 8(a); (ii) with
cause under Section 8(b); or (iii) upon the voluntary termination of
employment by Executive under Section 8(c).
(a) Death. This Agreement will terminate on the Death of the
Executive.
(b) With Cause. Blue Gate may terminate this Agreement at any time
because of (i) the determination by the Board of Directors in the exercise
of its reasonable judgment that Executive has committed an act or acts
constituting a felony or other crime involving moral turpitude, dishonesty
or theft or fraud; or (ii) Executive's willful misconduct in the
performance of his duties hereunder, provided, in each case, however, that
Blue Gate shall not terminate this Agreement pursuant to this Section
unless Blue Gate shall first have delivered to the Executive, a notice
which specifically identifies such breach or misconduct and the executive
shall not have cured the same within fifteen (15) days after receipt of
such notice.
(c) Voluntary Termination. The Executive may terminate his
employment voluntarily.
Obligations of Blue Gate Upon Termination. In the event of the termination
of Executive's employment pursuant to Section 8 (a), (b) or (c), Executive
will be entitled only to the compensation earned by him hereunder as of the
date of such termination (plus any life insurance benefits).
9. Waiver of Breach.
The waiver by any party hereto of a breach of any provision of this
Agreement will not operate or be construed as a waiver of any subsequent
breach by any party.
10. Arbitration.
If a dispute should arise regarding this Agreement the parties agree that
all claims, disputes, controversies, differences or other matters in
question arising out of this relationship shall be settled finally,
completely and conclusively by arbitration in
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Houston, Texas in accordance with the Commercial Arbitration Rules of the
American Arbitration Association (the "Rules"). The governing law of this
Agreement shall be the substantive law of the State of Texas, without
giving effect to conflict of laws. A decision of the arbitrator shall be
final, conclusive and binding on Blue Gate and Executive.
11. Covenant Not to Compete.
So long as the Executive is employed by Blue Gate and for a period of
eighteen (18) months after either (i) the voluntary termination of
employment by Executive or (ii) the termination of the Executive by Blue
Gate for cause, as set forth in Section 8(b) hereof, the Executive
specifically agrees that he will not, for himself, on behalf of, or in
conjunction with any person, firm, corporation or entity, other than Blue
Gate (either as principal, employee, shareholder, member, director,
partner, consultant, owner or part-owner of any corporation, partnership or
any type of business entity) anywhere in any county in which Blue Gate is
doing business at the time of termination, directly or indirectly, own,
manage, operate, control, be employed by, participate in, or be connected
in any manner with the ownership, management, operation, or control of any
business similar to the type of business conducted by Blue Gate at the time
of termination of the Executive's employment.
Executive's Acknowledgments and Agreements. The Executive acknowledges and
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agrees that:
(1) Due to the nature of Blue Gate's business, the foregoing
covenants place no greater restraint upon the Executive than is reasonably
necessary to protect the business and goodwill of Blue Gate;
(2) These covenants protect a legitimate interest of Blue Gate and do
not serve solely to limit Blue Gate's future competition;
(3) This Agreement is not an invalid or unreasonable restraint of
trade;
(4) A breach of these covenants by the Executive would cause
irreparable damage to Blue Gate;
(5) These covenants will not preclude the Executive from becoming
gainfully employed following termination of employment with Blue Gate;
(6) These covenants are reasonable in scope and are reasonably
necessary to protect Blue Gate's business and goodwill and valuable and
extensive trade which Blue Gate has established through its own expense and
effort;
(7) The signing of this Agreement is necessary for the Executive's
employment; and
(8) He has carefully read and considered all provisions of this
Agreement and that all of the restrictions set forth are fair and
reasonable and are reasonably required for
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the protection of the interests of Blue Gate.
Remedies, Injunction. In the event of the Executive's actual or threatened
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breach of any provisions of this Agreement, the Executive agrees that Blue
Gate shall be entitled to a temporary restraining order, preliminary
injunction and/or permanent injunction restraining and enjoining the
Executive from violating the provisions herein. Nothing in this Agreement
shall be construed to prohibit Blue Gate from pursuing any other available
remedies for such breach or threatened breach, including the recovery of
damages from the Executive. The Executive further agrees that for the
purpose of any such injunction proceeding, it shall be presumed that Blue
Gate's legal remedies would be inadequate and that Blue Gate would suffer
irreparable harm as a result of the Executive's violation of the provisions
of this Agreement. In any proceeding brought by Blue Gate to enforce the
provisions of this Agreement, no other matter relating to the terms of any
claim or cause of action of the Executive against Blue Gate will be defense
thereto. The foregoing remedy provisions are subject to the provisions of
Sec.15.15 of the Texas Business and Commerce Code, as amended (the "Code"),
which Code provisions shall control in the event of any conflict between
the provisions hereof, and the Code or any other law in effect relevant and
applicable hereto.
12. Benefits Insurance.
(a) Medical, Dental and Vision Benefits. During this Agreement,
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Executive and his dependents will be entitled to receive such group
medical, dental and vision benefits as Blue Gate may provide to its other
executives, provided such coverage is reasonably available, or be
reimbursed if Executive is carrying his own similar insurance.
(b) Benefit Plans. The Executive will be entitled to participate in
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any benefit plan or program of Blue Gate that may currently be in place or
implemented in the future.
(c) Other Benefits. During the Term, Executive will be entitled to
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receive, in addition to and not in lieu of base salary, bonus or other
compensation, such other benefits and normal perquisites as Blue Gate
currently provides or such additional benefits as Blue Gate may provide for
its executive officers in the future.
13. Vacation and Sick Leave.
(a) Vacation Pay. The Executive shall be entitled to an annual
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vacation leave of four (4) weeks at full pay.
(b) Sick Pay. The Executive shall be entitled to sick leave as
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needed.
14. Reimbursement of Expenses.
Upon submission of a detailed statement and reasonable documentation, Blue
Gate will reimburse Executive in the same manner as other executive
officers for all reasonable and necessary or appropriate out-of-pocket
travel and other expenses incurred by Executive in rendering services
required under this Agreement.
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15. Withholding of Taxes.
Blue Gate may withhold from any payments under this Agreement all
applicable taxes, as shall be required pursuant to any law or governmental
regulation or ruling.
16. Entire Understanding.
This Agreement sets forth the entire understanding between the parties with
respect to the subject matter hereof and cancels and supersedes all prior
oral and written agreements between the parties with respect to the subject
matter hereof.
17. Severability.
If for any reason any provision of this Agreement shall be held invalid,
such invalidity shall not affect any other provision of this Agreement not
held so invalid.
18. Governing Law.
This Agreement has been executed and delivered in the State of Texas and
its validity, interpretation, performance and enforcement shall be governed
by and construed in accordance with the laws thereof applicable to
contracts executed and to be wholly performed in Texas.
19. Notices.
All notices shall be in writing and shall have been duly given if delivered
by hand or mailed, certified or registered mail, return receipt requested
to the following address or to such other address as either party may
designate by like notice:
If to Executive:
Xxxx X. Xxxxx
X.X. Xxx 000000
Xxxxxxx, Xxxxx 00000
If to Blue Gate:
Blue Gate Corporation
Attn: Xxxxxxx Xxxxxxxxx, Chief Executive Officer
000 X. Xxxx Xxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Blue Gate has caused this Agreement to be executed by its officer and the
Executive has signed this Agreement.
20. Successors, Binding Agreement.
This Agreement is binding upon Blue Gate's successors. Blue Gate will
require any successor (whether direct or indirect, by purchase, merger,
consolidation, or otherwise) to all or substantially all of the business
and/or assets of Blue Gate to expressly assume and agree to perform this
Agreement in the same manner and to the same extent that Blue Gate would be
required to perform it as if no such succession had taken place. Failure of
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Blue Gate to obtain such assumption and agreement prior to the
effectiveness of any such succession shall constitute a breach of this
Agreement.
This Agreement shall inure to the benefit of both Blue Gate and its
successors and assigns and the Executive and his personal or legal
representatives, executors, administrators, heirs, distributes, successors
and assigns.
Blue Gate: Executive:
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XXXXXXX XXXXXXXXX, XXXX X. XXXXX
CHIEF EXECUTIVE OFFICER
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