Delaware
(State or other jurisdiction of incorporation or organization)
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000-27465
(Commission File Number)
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26-1469061
(I.R.S. Employer
Identification No.)
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2802 North Howard Avenue
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Tampa, Florida 33607
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(Address of Principal Executive Offices; Zip Code)
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Registrant’s telephone number, including area code: (813) 920 - 9435
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o
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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o
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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o
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2-(b))
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o
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Exhibit
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Description
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2.1
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10.1
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10.2
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10.3
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99.1
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(a)
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Organization of Innovative. Innovative is duly organized, validly existing, and in good standing under the laws of the jurisdiction of its organization.
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(b)
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Authorization of Transaction. Innovative has full power and authority (including full corporate power and authority) to execute and deliver this Agreement and to perform its obligations hereunder. This Agreement constitutes the valid and legally binding obligation of Innovative, enforceable in accordance with its terms and conditions. Innovative needs not give any notice to, make any filing with, or obtain any authorization, consent, or approval of any government or governmental agency in order to consummate the transactions contemplated by this Agreement.
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(c)
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Non-Contravention. Neither the execution and the delivery of this Agreement, nor the consummation of the transactions contemplated hereby, will (1) violate any constitution, statute, regulation, rule, injunction, judgment, order, decree, ruling, charge, or other restriction of any government, governmental agency, or court to which Innovative is subject or any provision of its charter or bylaw or (2) conflict with, result in a breach of, constitute a default under, result in the acceleration of, create in any party the right to accelerate, terminate, modify, or cancel, or require any notice under any agreement, contract, lease, license, instrument, or other arrangement to which Innovative is a party or by which it is bound or to which any of its assets are subject.
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(d)
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Brokers' Fees. Innovative has no liability or obligation to pay any fees or commissions to any broker, finder, or agent with respect to the transactions contemplated by this Agreement for which the Stockholders could become liable or obligated.
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(e)
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Tax-Free Transaction. Innovative shall take no action which causes the transaction to be treated as a taxable transaction for the Stockholders under the Internal Revenue Code.
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5.
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REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE STOCKHOLDERS.
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(a)
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Organization of the Company. The Company is a corporation duly organized on November 20, 2012 and is validly existing and in good standing under the laws of the jurisdiction of its organization
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(b)
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Authorization of Transaction. Each of the Stockholders has authority to enter into this Agreement and to carry out its obligations hereunder. This Agreement has been duly executed and delivered by each of the Stockholders and constitutes their valid and binding obligation, enforceable against each of the Stockholders in accordance with its terms.
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(c)
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Capitalization. There are 2,500 shares of common stock of the Company authorized, 1,500 of which are issued and outstanding. All of the issued and outstanding shares of Common Stock have been duly authorized, are validly issued, fully paid, and non-assessable. There are no outstanding or authorized options, warrants, purchase rights, subscription rights, conversion rights, exchange rights, or other contracts or commitments that could require the Company to issue, sell, or otherwise cause to become outstanding any shares of its capital stock
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(d)
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Non-Contravention. Neither the execution and the delivery of this Agreement, nor the consummation of the transactions contemplated hereby, will (1) violate any constitution, statute, regulation, rule, injunction, judgment, order, decree, ruling, charge, or other restriction of any government, governmental agency, or court to which the Stockholders or the Company are subject to any provision of its charter or bylaw or (2) conflict with, result in a breach of, constitute a default under, result in the acceleration of, create in any party the right to accelerate, terminate, modify, or cancel, or require any notice under any agreement, contract, lease, license, instrument, or other arrangement to which the Stockholders or the Company are a party or by which it is bound or to which any of its assets are subject.
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(e)
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Brokers' Fees. Neither the Stockholders nor the Company has any liability or obligation to pay any fees or commissions to any broker, finder, or agent with respect to the transactions contemplated by this Agreement.
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(f)
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Title to Assets. The Company owns and holds good and marketable title to, free from any security interests or liens, the assets listed on Schedule 5(f).
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(g)
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Investment. Each of the Stockholders (1) understands that the common stock of Innovative to be received pursuant to Section 1(b) above has not been, and will not be, registered under the Securities Act of 1933 (the "Act"), nor under any state securities laws, and is being offered and sold in reliance upon federal and state exemptions for transactions not involving any public offering, (2) is acquiring the common stock solely for his own account for investment purposes, and not with a view to the distribution thereof, (3) has received certain information concerning Innovative and has had access to the copies of the documents listed on Schedule 5(g) in order to evaluate the merits and the risks inherent in holding the common stock, and (4) is able to bear the economic risk and lack of liquidity inherent in holding the common stock.
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(h)
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Restrictions on Sale of Securities and Tax Matters. The Stockholders agree to enter into any lock-up agreement requested by an underwriter of the securities of Innovative provided that Innovative's officers and directors are also subject to such lock-up agreement. The Stockholders agree to file or cause to have filed any federal, state, and local tax returns as required for the Company from the time of its incorporation until the effective date of this transaction. A copy of all such returns will be provided to Innovative as soon as practicable after their filing.
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(a)
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Survival of Representations and Warranties. All of the representations and warranties of the Parties contained in this Agreement above shall survive the date of this Agreement and continue in full force and effect for a period of the greater of (i) three years or (ii) the applicable statute of limitations.
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(b)
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Indemnification Provisions for Benefit of Innovative. In the event either of the Stockholders breaches any of their representations, warranties, and covenants contained herein, and, if there is an applicable survival period pursuant to Section 5(a) above, provided that Innovative makes a written claim for indemnification against either of the Stockholders within the applicable survival period, then each of the Stockholders agrees, to indemnify Innovative from and against the entirety of any losses, damages, expenses or fees, including reasonable attorneys' fees (the "Losses") Innovative may suffer through and after the date of the claim for indemnification resulting from, arising out of, relating to, in the nature of, or caused by the breach (or the alleged breach).
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(c)
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Indemnification Provisions for Benefit of the Stockholders. In the event Innovative breaches any of its representations, warranties, and covenants contained herein, and, if there is an applicable survival period pursuant to Section 6(a) above, provided that the Stockholders make a written claim for indemnification against Innovative within such survival period, then Innovative agrees to indemnify the Stockholders from and against the entirety of any Losses the Stockholders may suffer through and after the date of the claim for indemnification resulting from, arising out of, relating to, in the nature of, or caused by the breach (or the alleged breach).
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(d)
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Matters Involving Third Parties.
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(a)
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Severability. In the event any parts of this Agreement are found to be void, the remaining provisions of this Agreement shall nevertheless be binding with the same effect as though the void parts were deleted.
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(b)
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Entire Agreement. This Agreement (including the Schedules referred to herein) constitutes the entire agreement among the Parties and supersedes any prior understandings, agreements, or representations by or among the Parties, written or oral, to the extent they relate in any way to the subject matter hereof.
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(c)
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Counterparts. This Agreement may be executed in one or more counterparts each of which shall be deemed an original but all of which together will constitute one and the same instrument. The execution of this Agreement may be by actual or facsimile signature.
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(d)
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Binding Effect. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their legal representatives, successors and assigns.
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(e)
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Notices and Addresses. All notices, offers, acceptance and any other acts under this Agreement shall be in writing, and shall be sufficiently given if delivered to the addressees in person, by Federal Express or similar receipted delivery, by facsimile delivery or, if mailed, postage prepaid, by certified mail, return receipt requested, as follows:
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(f)
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Governing Law. This Agreement and any dispute, disagreement, or issue of construction or interpretation arising hereunder whether relating to its execution, its validity, the obligations provided herein or performance shall be governed or interpreted according to the internal laws of the State of Florida without regard to choice of law considerations.
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a.
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Base Salary. Executive’s base salary shall initially be $80,000 per annum (pro-rated based upon the number of days Executive is employed during any partial calendar year) (the “Base Salary”), which salary shall be payable in regular installments in accordance with the Company’s general payroll practices. Such base salary may be increased but not decreased during the Term in the Company’s discretion based upon the Executive’s performance and any other factors the Company deems relevant. Such base salary shall be payable in accordance with the policy then prevailing for the Company’s executives.
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b.
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Bonus. In addition to such Base Salary, the Executive shall be entitled during the Term to participate in a performance bonus program and shall be eligible to participate in and receive payments or awards from all other bonus and other incentive compensation, stock option and restricted stock plans as may be adopted by the Company, all as recommended by the Compensation Committee of the Board of Directors and approved by the Board of Directors, in its sole discretion, and in each case payable to Executive in accordance with the terms and conditions of the applicable plan. Specifically, Executive shall be eligible for the following bonuses:
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(i)
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Executive shall be entitled during the Term to participate in the annual performance bonus program established by the Board of Directors for all senior executives of the Company, with bonus potential of 500% of base salary.
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(ii)
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Executive shall also be entitled to participate in any annual grants under the Long Term Incentive Plan (“LTIP”), as determined by the Board of Directors for all senior executives of the Company, with a target award of 200% of base salary.
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Bonus for the first year following the Start Date shall be a minimum of $20,000.
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Payments. All amounts paid pursuant to this Agreement shall be subject to withholding or deduction by reason of the Federal Insurance Contribution Act, federal income tax, state and local income tax, if any, and comparable laws and regulations.
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c.
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Benefits. Subject to the eligibility requirements (including, but not limited to, participation by part-time employees), and enrollment provisions of the Company’s employee benefit plans, Executive may, to the extent he so chooses, participate in any and all of the Company’s employee benefit plans, at the Company’s expense. All Company benefits are identified in the Employee Handbook and are subject to change without notice or explanation. In addition, subject to the eligibility requirements (including, but not limited to, participation by a part-time employee) and enrollment provisions of the Company’s executive benefit programs, Executive shall also be entitled to participate in any and all other benefits programs established for officers of the Company.
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d.
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Stock Options - Initial Grant. On the Effective Date, Executive will be granted an option to purchase 500,000 shares of the Company’s common stock (the “Initial Options”) on the terms and conditions listed below. Such Initial Options will have a strike price equal to the fair market value of the common stock as of the Effective Date, which pursuant to INIVs’ Amended and Restated Equity Incentive Plan (the “Plan”), shall be equal to the closing price per share of INIVs’ common stock on the last trading day immediately preceding the Effective Date. The vesting provisions of such Initial Options shall be (1) 250,000 vesting on the six-month anniversary of the Effective Date and (2) 13,888.90 vesting each month beginning on the 7th monthly anniversary of the Effective Date and continuing on each monthly anniversary thereafter until the second anniversary of the Effective Date. These Initial Options shall be treated as incentive stock options (ISOs) to the maximum extent permitted under applicable law, and the remainder of the Options, if any, shall be treated as non-qualified stock options. The grant of these Initial Options will be made pursuant to the Company’s Plan and will be evidenced by a separate “Option Agreement” to be executed by the Company and Executive, which will contain all the terms and conditions of the Initial Options (including, but not limited to, the provisions set forth in this Section 3(d)). So long as Executive remains employed by the Company, such Initial Options will have a seven-year term before expiration.
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e.
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Stock Options - Performance Grant. At the date of completion and launch of LiveRiot(TM) technology (the "Launch Date"), Executive will be granted an option to purchase 250,000 shares of the Company’s common stock (the “Performance Options”) on the terms and conditions listed below. Such Performance Options will have a strike price equal to the fair market value of the common stock as of the Launch Date, which pursuant to INIVs’ Amended and Restated Equity Incentive Plan (the “Plan”), shall be equal to the closing price per share of INIVs’ common stock on the last trading day immediately preceding the Launch Date. The Performance Options shall vest fully upon issuance. These Performance Options shall be treated as incentive stock options (ISOs) to the maximum extent permitted under applicable law, and the remainder of the Performance Options, if any, shall be treated as non-qualified stock options. The grant of these Performance Options will be made pursuant to the Company’s Plan and will be evidenced by a separate “Option Agreement” to be executed by the Company and Executive, which will contain all the terms and conditions of the Performance Options (including, but not limited to, the provisions set forth in this Section 3(d)). So long as Executive remains employed by the Company, such Performance Options will have a seven-year term before expiration.
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f.
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Executive understands that, pursuant to the Plan, upon termination of his employment, he will only have ninety (90) days to exercise any vested portion of the Initial Options and the Performance Options. All options awarded pursuant to these Sections 3(d) and 3(e) will contain a provision in the Option Agreement that allows for immediate vesting of any unvested portion of the Options in the event of a change of control of INIV.
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g.
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Paid Time-Off and Holidays. Executive’s paid time-off (“PTO”) and holidays shall be consistent with the standards set forth in the Company’s Employee Handbook, as revised from time to time or as otherwise published by the Company. Notwithstanding the previous sentence, Executive will be eligible for one hundred twenty (120) hours of PTO/year, which will accrue on a pro-rata basis throughout the year, provided, however, that it is the Company’s policy that no more than forty (40) hours of PTO can be accrued beyond this annual limit for any employee at any time. Thus, when accrued PTO reaches one hundred sixty (160) hours, Executive will cease accruing PTO until accrued PTO is one hundred twenty (120) hours or less, at which point Executive will again accrue PTO until he reaches one hundred sixty (160) hours. In addition to PTO, there are also six (6) paid national holidays and one (1) “floater” day available to Company employees. Executive agrees to schedule such PTO so that it minimally interferes with the Company’s operations. Such PTO does not include Board excused absences..
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h.
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Reimbursement of Normal Business Expenses. The Company will reimburse all reasonable business expenses of Executive, including, but not limited to, cell phone expenses and business related travel, meals and entertainment expenses in accordance with the Company’s polices for such reimbursement.
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i.
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Office Will Be Provided. The Company will pay for reasonable offices in California for Executive and employees, including utilities.
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a.
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They have read and understand this Agreement;
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b.
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They have been given the opportunity to consult with an attorney if they so desire;
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c.
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They intend to be legally bound by the promises set forth in this Agreement and enter into it freely, without duress or coercion;
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d.
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They have retained signed copies of this Agreement for their records; and
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e.
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The rights, responsibilities and duties of the parties hereto, and the covenants and agreements contained herein, shall continue to bind the parties and shall continue in full force and effect until each and every obligation of the parties under this Agreement has been performed.
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INNOVATIVE SOFTWARE TECHNOLOGIES, INC., a Delaware Corporation
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By:
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/s/ Jake Wand | ||
Name:
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Jake Wand
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Title:
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President
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EXECUTIVE:
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/s/ James Robert Dwyer |
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James Robert Dwyer
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a.
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Non-Solicitation. Employee agrees and acknowledges that, during the Restrictive Period, he/she will not, directly or indirectly, in one or a series of transactions, as an individual or as a partner, joint venturer, employee, agent, salesperson, contractor, officer, director or otherwise, for the benefit of himself or herself or any other person, partnership, firm, corporation, association or other legal entity:
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(i)
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solicit or induce any Customer or Prospective Customer of the Company to patronize or do business with any other company (or business) that is in the Business conducted by the Company in any market in which the Company does Business; or
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(ii)
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request or advise any Customer or vendor, or any Prospective Customer or prospective vendor, of the Company, who was a Customer, Prospective Customer, vendor or prospective vendor within one year immediately preceding the termination of the Employee’s employment with the Company, to withdraw, curtail, cancel or refrain from doing Business with the Company in any capacity; or
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(iii)
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recruit, solicit or otherwise induce any proprietor, partner, stockholder, lender, director, officer, employee, sales agent, joint venturer, investor, lessor, supplier, Customer, agent, representative or any other person which has a business relationship with the Company or any Affiliated Entity to discontinue, reduce or detrimentally modify such employment, agency or business relationship with the Company; or
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(iv)
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employ or solicit for employment any person or agent who is then (or was at any time within twelve (12) months prior to the date Employee or such entity seeks to employ such person) employed or retained by the Company. Notwithstanding the foregoing, to the extent the Employee works for a larger firm or corporation after his termination from the Company and he or she does not have any personal knowledge and/or control over the solicitation of or the employment of a Company employee or agent, then this provision shall not be enforceable.
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b.
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Non-Competition. Employee agrees and acknowledges that, during the Restrictive Period, he or she will not, directly or indirectly, for himself , or on behalf of others, as an individual on Employee's own account, or as a partner, joint venturer, employee, agent, salesman, contractor, officer, director or otherwise, for himself or any other person, partnership, firm, corporation, association or other legal entity enter into, engage in or accept employment from any business that is in the Business of the Company in the Restricted Area during his last twelve months of employment. The parties agree that this non-competition provision is intended to cover situations where a future business opportunity in which the Employee is engaged or a future employer of the Employee is selling the same or similar products and services in a Business which may compete with the Company’s products and services to Customers and Prospective Customers of the Company in the Restricted Area. This provision shall not cover future business opportunities or employers of the Employee that sell different types of products or services in the Restricted Area so long as such future business opportunities or employers are not in the Business of the Company.
Notwithstanding the preceding paragraphs, the spirit and intent of this non-competition clause is not to deny the Employee the ability to support his or her family, but rather to prevent the Employee from using the knowledge and experiences obtained from the Company in a similar competitive environment.
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c.
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Acknowledgements of Employee.
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(i)
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The Employee understands and acknowledges that any violation of the Restrictive Covenants shall constitute a material breach of this Agreement and the Employment Agreement, and it may cause irreparable harm and loss to the Company for which monetary damages will be an insufficient remedy. Therefore, the Parties agree that in addition to any other remedy available, the Company will be entitled to the relief identified in Paragraph No. 9 below.
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(ii)
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The Restrictive Covenants shall be construed as agreements independent of any other provision in this Agreement and the existence of any claim or cause of action of Employee against the Company shall not constitute a defense to the enforcement of these Restrictive Covenants.
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(iii)
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Employee agrees that the Restrictive Covenants are reasonably necessary to protect the legitimate business interests of the Company.
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(iv)
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Employee agrees that the Restrictive Covenants may be enforced by the Company’s successor in interest by way of merger, business combination or consolidation where a majority of the surviving entity is not owned by Company’s shareholders who owned a majority of the Company’s voting shares prior to such transaction and Employee acknowledges and agrees that successors are intended beneficiaries of this Agreement.
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(v)
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Employee agrees that if any portion of the Restrictive Covenants is held by a court of competent jurisdiction to be unreasonable, arbitrary or against public policy for any reason, such shall be divisible as to time, geographic area and line of business and shall be enforceable as to a reasonable time, area and line of business.
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(vi)
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Employee acknowledges that any violations of the Restrictive Covenants, in any capacity identified herein, may be a material breach of this Agreement and may subject the Employee, and/or any individual(s), partnership, corporation, joint venture or other type of business with whom the Employee is then affiliated or employed, to monetary and other damages..
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(vii)
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Employee agrees that any failure of the Company to enforce the Restrictive Covenants against any other employee, for any reason, shall not constitute a defense to enforcement of the Restrictive Covenants against the Employee.
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a.
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Temporary and permanent injunctive relief, without the necessity of posting a bond, restraining Employee or Representatives and any other person, partnership, firm, corporation, association or other legal entity acting in concert with Employee from any actual or threatened unauthorized disclosure or use of Confidential Information, in whole or in part, or from rendering any service to any other person, partnership, firm, corporation, association or other legal entity to whom such Confidential Information in whole or in part, has been disclosed or used or is threatened to be disclosed or used; and
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b.
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Temporary and permanent injunctive relief, without the necessity of posting a bond, restraining the Employee from violating, directly or indirectly, the restrictions of the Restrictive Covenant in any capacity identified in Paragraph 8, supra, and restricting third parties from aiding and abetting any violations of the Restrictive Covenant; and
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c.
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Compensatory damages, including actual loss from misappropriation and unjust enrichment.
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a.
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Base Salary. Executive’s base salary shall initially be $80,000 per annum (pro-rated based upon the number of days Executive is employed during any partial calendar year) (the “Base Salary”), which salary shall be payable in regular installments in accordance with the Company’s general payroll practices. Such base salary may be increased but not decreased during the Term in the Company’s discretion based upon the Executive’s performance and any other factors the Company deems relevant. Such base salary shall be payable in accordance with the policy then prevailing for the Company’s executives.
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b.
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Bonus. In addition to such Base Salary, the Executive shall be entitled during the Term to participate in a performance bonus program and shall be eligible to participate in and receive payments or awards from all other bonus and other incentive compensation, stock option and restricted stock plans as may be adopted by the Company, all as recommended by the Compensation Committee of the Board of Directors and approved by the Board of Directors, in its sole discretion, and in each case payable to Executive in accordance with the terms and conditions of the applicable plan. Specifically, Executive shall be eligible for the following bonuses:
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(i)
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Executive shall be entitled during the Term to participate in the annual performance bonus program established by the Board of Directors for all senior executives of the Company, with bonus potential of 500% of base salary.
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(ii)
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Executive shall also be entitled to participate in any annual grants under the Long Term Incentive Plan (“LTIP”), as determined by the Board of Directors for all senior executives of the Company, with a target award of 200% of base salary.
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Bonus for the first year following the Start Date shall be a minimum of $20,000.
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Payments. All amounts paid pursuant to this Agreement shall be subject to withholding or deduction by reason of the Federal Insurance Contribution Act, federal income tax, state and local income tax, if any, and comparable laws and regulations.
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c.
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Benefits. Subject to the eligibility requirements (including, but not limited to, participation by part-time employees), and enrollment provisions of the Company’s employee benefit plans, Executive may, to the extent he so chooses, participate in any and all of the Company’s employee benefit plans, at the Company’s expense. All Company benefits are identified in the Employee Handbook and are subject to change without notice or explanation. In addition, subject to the eligibility requirements (including, but not limited to, participation by a part-time employee) and enrollment provisions of the Company’s executive benefit programs, Executive shall also be entitled to participate in any and all other benefits programs established for officers of the Company.
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d.
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Stock Options - Initial Grant. On the Effective Date, Executive will be granted an option to purchase 500,000 shares of the Company’s common stock (the “Initial Options”) on the terms and conditions listed below. Such Initial Options will have a strike price equal to the fair market value of the common stock as of the Effective Date, which pursuant to INIVs’ Amended and Restated Equity Incentive Plan (the “Plan”), shall be equal to the closing price per share of INIVs’ common stock on the last trading day immediately preceding the Effective Date. The vesting provisions of such Initial Options shall be (1) 250,000 vesting on the six-month anniversary of the Effective Date and (2) 13,888.90 vesting each month beginning on the 7th monthly anniversary of the Effective Date and continuing on each monthly anniversary thereafter until the second anniversary of the Effective Date. These Initial Options shall be treated as incentive stock options (ISOs) to the maximum extent permitted under applicable law, and the remainder of the Options, if any, shall be treated as non-qualified stock options. The grant of these Initial Options will be made pursuant to the Company’s Plan and will be evidenced by a separate “Option Agreement” to be executed by the Company and Executive, which will contain all the terms and conditions of the Initial Options (including, but not limited to, the provisions set forth in this Section 3(d)). So long as Executive remains employed by the Company, such Initial Options will have a seven-year term before expiration.
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e.
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Stock Options - Performance Grant. At the date of completion and launch of LiveRiot(TM) technology (the "Launch Date"), Executive will be granted an option to purchase 250,000 shares of the Company’s common stock (the “Performance Options”) on the terms and conditions listed below. Such Performance Options will have a strike price equal to the fair market value of the common stock as of the Launch Date, which pursuant to INIVs’ Amended and Restated Equity Incentive Plan (the “Plan”), shall be equal to the closing price per share of INIVs’ common stock on the last trading day immediately preceding the Launch Date. The Performance Options shall vest fully upon issuance. These Performance Options shall be treated as incentive stock options (ISOs) to the maximum extent permitted under applicable law, and the remainder of the Performance Options, if any, shall be treated as non-qualified stock options. The grant of these Performance Options will be made pursuant to the Company’s Plan and will be evidenced by a separate “Option Agreement” to be executed by the Company and Executive, which will contain all the terms and conditions of the Performance Options (including, but not limited to, the provisions set forth in this Section 3(d)). So long as Executive remains employed by the Company, such Performance Options will have a seven-year term before expiration.
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f.
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Executive understands that, pursuant to the Plan, upon termination of his employment, he will only have ninety (90) days to exercise any vested portion of the Initial Options and the Performance Options. All options awarded pursuant to these Sections 3(d) and 3(e) will contain a provision in the Option Agreement that allows for immediate vesting of any unvested portion of the Options in the event of a change of control of INIV.
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g.
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Paid Time-Off and Holidays. Executive’s paid time-off (“PTO”) and holidays shall be consistent with the standards set forth in the Company’s Employee Handbook, as revised from time to time or as otherwise published by the Company. Notwithstanding the previous sentence, Executive will be eligible for one hundred twenty (120) hours of PTO/year, which will accrue on a pro-rata basis throughout the year, provided, however, that it is the Company’s policy that no more than forty (40) hours of PTO can be accrued beyond this annual limit for any employee at any time. Thus, when accrued PTO reaches one hundred sixty (160) hours, Executive will cease accruing PTO until accrued PTO is one hundred twenty (120) hours or less, at which point Executive will again accrue PTO until he reaches one hundred sixty (160) hours. In addition to PTO, there are also six (6) paid national holidays and one (1) “floater” day available to Company employees. Executive agrees to schedule such PTO so that it minimally interferes with the Company’s operations. Such PTO does not include Board excused absences..
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h.
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Reimbursement of Normal Business Expenses. The Company will reimburse all reasonable business expenses of Executive, including, but not limited to, cell phone expenses and business related travel, meals and entertainment expenses in accordance with the Company’s polices for such reimbursement.
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i.
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Office Will Be Provided. The Company will pay for reasonable offices in California for Executive and employees, including utilities.
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a.
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They have read and understand this Agreement;
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b.
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They have been given the opportunity to consult with an attorney if they so desire;
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c.
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They intend to be legally bound by the promises set forth in this Agreement and enter into it freely, without duress or coercion;
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d.
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They have retained signed copies of this Agreement for their records; and
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e.
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The rights, responsibilities and duties of the parties hereto, and the covenants and agreements contained herein, shall continue to bind the parties and shall continue in full force and effect until each and every obligation of the parties under this Agreement has been performed.
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INNOVATIVE SOFTWARE TECHNOLOGIES, INC., a Delaware Corporation
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By:
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/s/ Jake Wand | ||
Name:
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Jake Wand
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Title:
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President
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EXECUTIVE:
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/s/ Kurling Robinson |
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Kurling Robinson
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a.
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Non-Solicitation. Employee agrees and acknowledges that, during the Restrictive Period, he/she will not, directly or indirectly, in one or a series of transactions, as an individual or as a partner, joint venturer, employee, agent, salesperson, contractor, officer, director or otherwise, for the benefit of himself or herself or any other person, partnership, firm, corporation, association or other legal entity:
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(i)
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solicit or induce any Customer or Prospective Customer of the Company to patronize or do business with any other company (or business) that is in the Business conducted by the Company in any market in which the Company does Business; or
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(ii)
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request or advise any Customer or vendor, or any Prospective Customer or prospective vendor, of the Company, who was a Customer, Prospective Customer, vendor or prospective vendor within one year immediately preceding the termination of the Employee’s employment with the Company, to withdraw, curtail, cancel or refrain from doing Business with the Company in any capacity; or
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(iii)
|
recruit, solicit or otherwise induce any proprietor, partner, stockholder, lender, director, officer, employee, sales agent, joint venturer, investor, lessor, supplier, Customer, agent, representative or any other person which has a business relationship with the Company or any Affiliated Entity to discontinue, reduce or detrimentally modify such employment, agency or business relationship with the Company; or
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(iv)
|
employ or solicit for employment any person or agent who is then (or was at any time within twelve (12) months prior to the date Employee or such entity seeks to employ such person) employed or retained by the Company. Notwithstanding the foregoing, to the extent the Employee works for a larger firm or corporation after his termination from the Company and he or she does not have any personal knowledge and/or control over the solicitation of or the employment of a Company employee or agent, then this provision shall not be enforceable.
|
b.
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Non-Competition. Employee agrees and acknowledges that, during the Restrictive Period, he or she will not, directly or indirectly, for himself , or on behalf of others, as an individual on Employee's own account, or as a partner, joint venturer, employee, agent, salesman, contractor, officer, director or otherwise, for himself or any other person, partnership, firm, corporation, association or other legal entity enter into, engage in or accept employment from any business that is in the Business of the Company in the Restricted Area during his last twelve months of employment. The parties agree that this non-competition provision is intended to cover situations where a future business opportunity in which the Employee is engaged or a future employer of the Employee is selling the same or similar products and services in a Business which may compete with the Company’s products and services to Customers and Prospective Customers of the Company in the Restricted Area. This provision shall not cover future business opportunities or employers of the Employee that sell different types of products or services in the Restricted Area so long as such future business opportunities or employers are not in the Business of the Company.
Notwithstanding the preceding paragraphs, the spirit and intent of this non-competition clause is not to deny the Employee the ability to support his or her family, but rather to prevent the Employee from using the knowledge and experiences obtained from the Company in a similar competitive environment.
|
c.
|
Acknowledgements of Employee.
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|||
(i)
|
The Employee understands and acknowledges that any violation of the Restrictive Covenants shall constitute a material breach of this Agreement and the Employment Agreement, and it may cause irreparable harm and loss to the Company for which monetary damages will be an insufficient remedy. Therefore, the Parties agree that in addition to any other remedy available, the Company will be entitled to the relief identified in Paragraph No. 9 below.
|
(ii)
|
The Restrictive Covenants shall be construed as agreements independent of any other provision in this Agreement and the existence of any claim or cause of action of Employee against the Company shall not constitute a defense to the enforcement of these Restrictive Covenants.
|
(iii)
|
Employee agrees that the Restrictive Covenants are reasonably necessary to protect the legitimate business interests of the Company.
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(iv)
|
Employee agrees that the Restrictive Covenants may be enforced by the Company’s successor in interest by way of merger, business combination or consolidation where a majority of the surviving entity is not owned by Company’s shareholders who owned a majority of the Company’s voting shares prior to such transaction and Employee acknowledges and agrees that successors are intended beneficiaries of this Agreement.
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(v)
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Employee agrees that if any portion of the Restrictive Covenants is held by a court of competent jurisdiction to be unreasonable, arbitrary or against public policy for any reason, such shall be divisible as to time, geographic area and line of business and shall be enforceable as to a reasonable time, area and line of business.
|
(vi)
|
Employee acknowledges that any violations of the Restrictive Covenants, in any capacity identified herein, may be a material breach of this Agreement and may subject the Employee, and/or any individual(s), partnership, corporation, joint venture or other type of business with whom the Employee is then affiliated or employed, to monetary and other damages..
|
(vii)
|
Employee agrees that any failure of the Company to enforce the Restrictive Covenants against any other employee, for any reason, shall not constitute a defense to enforcement of the Restrictive Covenants against the Employee.
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a.
|
Temporary and permanent injunctive relief, without the necessity of posting a bond, restraining Employee or Representatives and any other person, partnership, firm, corporation, association or other legal entity acting in concert with Employee from any actual or threatened unauthorized disclosure or use of Confidential Information, in whole or in part, or from rendering any service to any other person, partnership, firm, corporation, association or other legal entity to whom such Confidential Information in whole or in part, has been disclosed or used or is threatened to be disclosed or used; and
|
|
b.
|
Temporary and permanent injunctive relief, without the necessity of posting a bond, restraining the Employee from violating, directly or indirectly, the restrictions of the Restrictive Covenant in any capacity identified in Paragraph 8, supra, and restricting third parties from aiding and abetting any violations of the Restrictive Covenant; and
|
|
c.
|
Compensatory damages, including actual loss from misappropriation and unjust enrichment.
|
a.
|
Base Salary. Executive’s base salary shall initially be $80,000 per annum (pro-rated based upon the number of days Executive is employed during any partial calendar year) (the “Base Salary”), which salary shall be payable in regular installments in accordance with the Company’s general payroll practices. Such base salary may be increased but not decreased during the Term in the Company’s discretion based upon the Executive’s performance and any other factors the Company deems relevant. Such base salary shall be payable in accordance with the policy then prevailing for the Company’s executives.
|
|
b.
|
Bonus. In addition to such Base Salary, the Executive shall be entitled during the Term to participate in a performance bonus program and shall be eligible to participate in and receive payments or awards from all other bonus and other incentive compensation, stock option and restricted stock plans as may be adopted by the Company, all as recommended by the Compensation Committee of the Board of Directors and approved by the Board of Directors, in its sole discretion, and in each case payable to Executive in accordance with the terms and conditions of the applicable plan. Specifically, Executive shall be eligible for the following bonuses:
|
(i)
|
Executive shall be entitled during the Term to participate in the annual performance bonus program established by the Board of Directors for all senior executives of the Company, with bonus potential of 500% of base salary.
|
(ii)
|
Executive shall also be entitled to participate in any annual grants under the Long Term Incentive Plan (“LTIP”), as determined by the Board of Directors for all senior executives of the Company, with a target award of 200% of base salary.
|
|
Bonus for the first year following the Start Date shall be a minimum of $20,000.
|
|
Payments. All amounts paid pursuant to this Agreement shall be subject to withholding or deduction by reason of the Federal Insurance Contribution Act, federal income tax, state and local income tax, if any, and comparable laws and regulations.
|
c.
|
Benefits. Subject to the eligibility requirements (including, but not limited to, participation by part-time employees), and enrollment provisions of the Company’s employee benefit plans, Executive may, to the extent he so chooses, participate in any and all of the Company’s employee benefit plans, at the Company’s expense. All Company benefits are identified in the Employee Handbook and are subject to change without notice or explanation. In addition, subject to the eligibility requirements (including, but not limited to, participation by a part-time employee) and enrollment provisions of the Company’s executive benefit programs, Executive shall also be entitled to participate in any and all other benefits programs established for officers of the Company.
|
d.
|
Stock Options - Initial Grant. On the Effective Date, Executive will be granted an option to purchase 500,000 shares of the Company’s common stock (the “Initial Options”) on the terms and conditions listed below. Such Initial Options will have a strike price equal to the fair market value of the common stock as of the Effective Date, which pursuant to INIVs’ Amended and Restated Equity Incentive Plan (the “Plan”), shall be equal to the closing price per share of INIVs’ common stock on the last trading day immediately preceding the Effective Date. The vesting provisions of such Initial Options shall be (1) 250,000 vesting on the six-month anniversary of the Effective Date and (2) 13,888.90 vesting each month beginning on the 7th monthly anniversary of the Effective Date and continuing on each monthly anniversary thereafter until the second anniversary of the Effective Date. These Initial Options shall be treated as incentive stock options (ISOs) to the maximum extent permitted under applicable law, and the remainder of the Options, if any, shall be treated as non-qualified stock options. The grant of these Initial Options will be made pursuant to the Company’s Plan and will be evidenced by a separate “Option Agreement” to be executed by the Company and Executive, which will contain all the terms and conditions of the Initial Options (including, but not limited to, the provisions set forth in this Section 3(d)). So long as Executive remains employed by the Company, such Initial Options will have a seven-year term before expiration.
|
|
e.
|
Stock Options - Performance Grant. At the date of completion and launch of LiveRiot(TM) technology (the "Launch Date"), Executive will be granted an option to purchase 250,000 shares of the Company’s common stock (the “Performance Options”) on the terms and conditions listed below. Such Performance Options will have a strike price equal to the fair market value of the common stock as of the Launch Date, which pursuant to INIVs’ Amended and Restated Equity Incentive Plan (the “Plan”), shall be equal to the closing price per share of INIVs’ common stock on the last trading day immediately preceding the Launch Date. The Performance Options shall vest fully upon issuance. These Performance Options shall be treated as incentive stock options (ISOs) to the maximum extent permitted under applicable law, and the remainder of the Performance Options, if any, shall be treated as non-qualified stock options. The grant of these Performance Options will be made pursuant to the Company’s Plan and will be evidenced by a separate “Option Agreement” to be executed by the Company and Executive, which will contain all the terms and conditions of the Performance Options (including, but not limited to, the provisions set forth in this Section 3(d)). So long as Executive remains employed by the Company, such Performance Options will have a seven-year term before expiration.
|
f.
|
Executive understands that, pursuant to the Plan, upon termination of his employment, he will only have ninety (90) days to exercise any vested portion of the Initial Options and the Performance Options. All options awarded pursuant to these Sections 3(d) and 3(e) will contain a provision in the Option Agreement that allows for immediate vesting of any unvested portion of the Options in the event of a change of control of INIV.
|
g.
|
Paid Time-Off and Holidays. Executive’s paid time-off (“PTO”) and holidays shall be consistent with the standards set forth in the Company’s Employee Handbook, as revised from time to time or as otherwise published by the Company. Notwithstanding the previous sentence, Executive will be eligible for one hundred twenty (120) hours of PTO/year, which will accrue on a pro-rata basis throughout the year, provided, however, that it is the Company’s policy that no more than forty (40) hours of PTO can be accrued beyond this annual limit for any employee at any time. Thus, when accrued PTO reaches one hundred sixty (160) hours, Executive will cease accruing PTO until accrued PTO is one hundred twenty (120) hours or less, at which point Executive will again accrue PTO until he reaches one hundred sixty (160) hours. In addition to PTO, there are also six (6) paid national holidays and one (1) “floater” day available to Company employees. Executive agrees to schedule such PTO so that it minimally interferes with the Company’s operations. Such PTO does not include Board excused absences..
|
h.
|
Reimbursement of Normal Business Expenses. The Company will reimburse all reasonable business expenses of Executive, including, but not limited to, cell phone expenses and business related travel, meals and entertainment expenses in accordance with the Company’s polices for such reimbursement.
|
|
i.
|
Office Will Be Provided. The Company will pay for reasonable offices in California for Executive and employees, including utilities.
|
a.
|
They have read and understand this Agreement;
|
b.
|
They have been given the opportunity to consult with an attorney if they so desire;
|
c.
|
They intend to be legally bound by the promises set forth in this Agreement and enter into it freely, without duress or coercion;
|
d.
|
They have retained signed copies of this Agreement for their records; and
|
e.
|
The rights, responsibilities and duties of the parties hereto, and the covenants and agreements contained herein, shall continue to bind the parties and shall continue in full force and effect until each and every obligation of the parties under this Agreement has been performed.
|
INNOVATIVE SOFTWARE TECHNOLOGIES, INC., a Delaware Corporation
|
|||
By:
|
/s/ Jake Wand | ||
Name:
|
Jake Wand
|
||
Title:
|
President
|
||
EXECUTIVE:
|
||
/s/ Charles Zivko | ||
Charles Zivko
|
a.
|
Non-Solicitation. Employee agrees and acknowledges that, during the Restrictive Period, he/she will not, directly or indirectly, in one or a series of transactions, as an individual or as a partner, joint venturer, employee, agent, salesperson, contractor, officer, director or otherwise, for the benefit of himself or herself or any other person, partnership, firm, corporation, association or other legal entity:
|
(i)
|
solicit or induce any Customer or Prospective Customer of the Company to patronize or do business with any other company (or business) that is in the Business conducted by the Company in any market in which the Company does Business; or
|
(ii)
|
request or advise any Customer or vendor, or any Prospective Customer or prospective vendor, of the Company, who was a Customer, Prospective Customer, vendor or prospective vendor within one year immediately preceding the termination of the Employee’s employment with the Company, to withdraw, curtail, cancel or refrain from doing Business with the Company in any capacity; or
|
(iii)
|
recruit, solicit or otherwise induce any proprietor, partner, stockholder, lender, director, officer, employee, sales agent, joint venturer, investor, lessor, supplier, Customer, agent, representative or any other person which has a business relationship with the Company or any Affiliated Entity to discontinue, reduce or detrimentally modify such employment, agency or business relationship with the Company; or
|
(iv)
|
employ or solicit for employment any person or agent who is then (or was at any time within twelve (12) months prior to the date Employee or such entity seeks to employ such person) employed or retained by the Company. Notwithstanding the foregoing, to the extent the Employee works for a larger firm or corporation after his termination from the Company and he or she does not have any personal knowledge and/or control over the solicitation of or the employment of a Company employee or agent, then this provision shall not be enforceable.
|
b.
|
Non-Competition. Employee agrees and acknowledges that, during the Restrictive Period, he or she will not, directly or indirectly, for himself , or on behalf of others, as an individual on Employee's own account, or as a partner, joint venturer, employee, agent, salesman, contractor, officer, director or otherwise, for himself or any other person, partnership, firm, corporation, association or other legal entity enter into, engage in or accept employment from any business that is in the Business of the Company in the Restricted Area during his last twelve months of employment. The parties agree that this non-competition provision is intended to cover situations where a future business opportunity in which the Employee is engaged or a future employer of the Employee is selling the same or similar products and services in a Business which may compete with the Company’s products and services to Customers and Prospective Customers of the Company in the Restricted Area. This provision shall not cover future business opportunities or employers of the Employee that sell different types of products or services in the Restricted Area so long as such future business opportunities or employers are not in the Business of the Company.
Notwithstanding the preceding paragraphs, the spirit and intent of this non-competition clause is not to deny the Employee the ability to support his or her family, but rather to prevent the Employee from using the knowledge and experiences obtained from the Company in a similar competitive environment.
|
c.
|
Acknowledgements of Employee.
|
|||
(i)
|
The Employee understands and acknowledges that any violation of the Restrictive Covenants shall constitute a material breach of this Agreement and the Employment Agreement, and it may cause irreparable harm and loss to the Company for which monetary damages will be an insufficient remedy. Therefore, the Parties agree that in addition to any other remedy available, the Company will be entitled to the relief identified in Paragraph No. 9 below.
|
(ii)
|
The Restrictive Covenants shall be construed as agreements independent of any other provision in this Agreement and the existence of any claim or cause of action of Employee against the Company shall not constitute a defense to the enforcement of these Restrictive Covenants.
|
(iii)
|
Employee agrees that the Restrictive Covenants are reasonably necessary to protect the legitimate business interests of the Company.
|
(iv)
|
Employee agrees that the Restrictive Covenants may be enforced by the Company’s successor in interest by way of merger, business combination or consolidation where a majority of the surviving entity is not owned by Company’s shareholders who owned a majority of the Company’s voting shares prior to such transaction and Employee acknowledges and agrees that successors are intended beneficiaries of this Agreement.
|
(v)
|
Employee agrees that if any portion of the Restrictive Covenants is held by a court of competent jurisdiction to be unreasonable, arbitrary or against public policy for any reason, such shall be divisible as to time, geographic area and line of business and shall be enforceable as to a reasonable time, area and line of business.
|
(vi)
|
Employee acknowledges that any violations of the Restrictive Covenants, in any capacity identified herein, may be a material breach of this Agreement and may subject the Employee, and/or any individual(s), partnership, corporation, joint venture or other type of business with whom the Employee is then affiliated or employed, to monetary and other damages..
|
(vii)
|
Employee agrees that any failure of the Company to enforce the Restrictive Covenants against any other employee, for any reason, shall not constitute a defense to enforcement of the Restrictive Covenants against the Employee.
|
a.
|
Temporary and permanent injunctive relief, without the necessity of posting a bond, restraining Employee or Representatives and any other person, partnership, firm, corporation, association or other legal entity acting in concert with Employee from any actual or threatened unauthorized disclosure or use of Confidential Information, in whole or in part, or from rendering any service to any other person, partnership, firm, corporation, association or other legal entity to whom such Confidential Information in whole or in part, has been disclosed or used or is threatened to be disclosed or used; and
|
|
b.
|
Temporary and permanent injunctive relief, without the necessity of posting a bond, restraining the Employee from violating, directly or indirectly, the restrictions of the Restrictive Covenant in any capacity identified in Paragraph 8, supra, and restricting third parties from aiding and abetting any violations of the Restrictive Covenant; and
|
|
c.
|
Compensatory damages, including actual loss from misappropriation and unjust enrichment.
|