EMPLOYMENT
AGREEMENT
THIS EMPLOYMENT AGREEMENT (“Agreement”) is made and
entered into effective as of May 19, 2009 (“Effective Date”) by and
between LiveDeal, Inc., a Nevada corporation (the “Company”) and Richard F.
Sommer (“Executive”).
In
consideration of the mutual promises, covenants and agreements herein contained,
intending to be legally bound, the parties agree as follows:
1. Employment. The
Company hereby agrees to employ Executive, and Executive hereby agrees to serve,
subject to the provisions of the Agreement, as an employee of the Company in the
position of President and Chief Executive Officer. Executive will
perform all services and acts reasonably necessary to fulfill the duties and
responsibilities of his positions and will render such services on the terms set
forth herein and will report to the Chairman of the Board of Directors of the
Company (the “Chairman”)
and the Company’s Board of directors (the “Board”). Executive
will have such other executive and managerial powers and duties with respect to
the Company as may reasonably be assigned to him by the Chairman and the Board,
to the extent consistent with his positions and status as set forth
above. Executive agrees to faithfully perform the lawful duties
assigned to him pursuant to this Agreement to the best of his abilities and to
devote all of
his business time and attention to the Company’s business and not to any other
business. Notwithstanding the foregoing, Executive may (a) serve on
civic or charitable or not-for-profit industry related organizations, (b) engage
in charitable, civic, educational, professional community and/or industry
activities without remuneration therefor and (c) manage personal and family
investments, so long as such activities do not interfere with the performance of
Executive’s duties under this Agreement. Executive also may serve on
the board of directors or advisory committee of other for-profit enterprises
subject to the consent of the Chairman and the Board, which shall not
unreasonably be withheld; provided, however that Executive shall not serve on
more than three such boards of directors (including the Company’s) at the same
time.
2. Term. This
Agreement is for a three-year period (the “Term”) commencing on the
Effective Date hereof and terminating on the third anniversary of the Effective
Date, or upon the date of termination of employment pursuant to Section
8 of this Agreement;
provided, however, that the Term may be extended as mutually agreed to by
the parties.
3. Place of
Performance. Executive may perform his duties and conduct his
business on behalf of the Company at remote locations of his choosing by
telecommuting; provided that such practice shall not substantially interfere
with the performance of Executive’s duties hereunder and provided, further that
at least 50% of his time in performing his duties is spent physically in the
Company’s offices in either Santa Clara, CA or Las Vegas, NV.
4. Compensation.
(a) Salary. Executive
shall be paid a salary at the annual rate of $300,000 (the “Salary”), payable in
accordance with the Company’s regular payroll practices, subject to all
applicable withholdings, including taxes.
(b) Performance
Bonuses. Executive will be entitled to receive up to $100,000
per year of a performance bonus in the event the Company reaches certain
performance measures established by the Compensation Committee of the Board or
the entire Board. All bonuses payable under this Section 4(b) will be
subject to all applicable withholdings, including taxes.
(c) Success
Fee. In the event of the (i) sale of the Company (by merger,
consolidation, sale of all or substantially all of its assets, sale of control
or other means) in a single transaction or series of related transactions or
(ii) disposition of assets, in each case that results in either proceeds
received by the Company’s shareholders or a subsequent distribution of proceeds
to the Company’s shareholders in excess of $9,000,000 beginning from the date of
this Agreement (including pursuant to a dividend of any cash held by the Company
as of the date of this Agreement), the Company agrees to pay you a fee in cash
(“Success Fee”) equal to
2% of the amount received directly by the Company’s shareholders in excess of
the $9,000,000 if you have performed the services required of you to the
reasonable satisfaction of the Company as determined by the Board of Directors
of the Company. If earned, you will receive the Success Fee at
the time the shareholders receive the qualifying proceeds or
distribution.
You agree
to advise, assist and represent the Company in connection with any disposition
of assets or sale of the Company, including but not limited to (i) identifying,
introducing and consulting as to strategy for initiating discussions with,
potential purchasers, (ii) assisting in structuring the transaction, (iii)
participating actively in any negotiation of the terms and conditions of the
transaction, (iv) assisting in the preparation of definitive documentation, and
(v) assisting the Company to close the transaction, in each case to the extent
requested and in the manner directed by the Company’s Board of
Directors.
The
Company, through its Board of Directors, reserves total and unrestricted control
of any such transaction, disposition or distribution including, without
limitation, the right not to enter into or consummate any such transaction,
disposition or distribution (irrespective of the reason therefor), to determine
the value or price and other terms and the value of any non−cash consideration.
Your entitlement to the Success Fee is dependent on the actual closing or
consummation of the transactions and actual distribution or realization or
proceeds to or by the Company’s shareholders without regard to the reason for a
failure or inability to do so.
5. Business
Expenses. During the Term, the Company will reimburse
Executive for all reasonable business expenses incurred by him in connection
with his employment and the performance of his duties as provided hereunder,
upon submission by the Executive of receipts and other documentation in
conformance with the Company’s normal procedures for executives of Executive’s
position and status.
6. Vacation, Holidays and Sick
Leave. During the Term, Executive will be entitled to four weeks of paid
vacation per year, paid holidays and paid sick leave, all in accordance with the
Company’s standard policies for its officers, as may be amended from time to
time.
7. Benefits. During
the Term, Executive will be eligible to participate fully in all health and
benefit plans available to senior officers of the Company generally, as the same
may be amended from time to time by the Board.
8. Termination of
Employment.
(a) Notwithstanding
any provision of this Agreement to the contrary, the employment of Executive
hereunder will terminate on the first to occur of the following
dates:
(i) the
date of Executive’s death;
(ii) in
the event that Executive has experienced a Disability (as defined below), the
date on which the Company gives Executive notice of termination on
account of Disability;
(iii) in
the event that Executive has engaged in conduct that constitutes
Cause (as defined below), the date on which the Company gives notice
of termination for Cause;
(iv) expiration
of the Term; or
(v) the
date on which the Company gives Executive notice of termination for any reason
other than the reasons set forth in Sections 8(a)(i)
through (iv)
above.
(b) For
purposes of this Agreement, “Disability” will mean an
illness, injury or other incapacitating condition as a result of which Executive
is unable to perform, with reasonable accommodation, the services required to be
performed under this Agreement for 10 consecutive days during the
Term. Executive agrees to submit to such medical examinations as may
be necessary to determine whether a Disability exists, pursuant to such
reasonable requests made by the Company from time to time. Any
determination as to the existence of a Disability will be made by a physician
mutually selected by the Company and Executive.
(c) For
purposes of this Agreement, “Cause” will mean the
occurrence of any of the following events, as reasonably determined by the
Board:
(i) Executive’s
willful and continued refusal to substantially perform his duties
hereunder;
(ii) Executive’s
conviction of a felony, or his guilty plea to or entry of a nolo contendere plea
to a felony charge; or
(iii) Executive’s
breach of any material term of this Agreement or the Company’s written policies
and procedures, as in effect from time to time.
9. Compensation in Event of
Termination. Upon termination of this Agreement and
Executive’s employment, the Company will have no further obligation to Executive
except to pay the amounts set forth in this Section
9.
(a) In
the event Executive’s employment is terminated pursuant to Section 8(a)(i),
(ii), (iii) or (iv) on or before the
expiration of the Term, Executive will be entitled to payment of any earned but
unpaid Salary through the date of termination. Any bonuses, fees or
payments due to Executive under Section 4(b) above
shall be paid to Executive as set forth therein.
(b) In
the event Executive’s employment is terminated pursuant to Section 8(a)(v) on or
before the expiration of the Term, and provided that Executive (i) formally
resigns in writing from the Board and as an officer and director of any
subsidiary of the Company, and (ii) executes a valid release of any and all
claims that Executive may have relating to his employment against the Company
and its agents, including, but not limited to, its officers, directors and
employees, in a form provided by the Company and that contains a 12-month
non-solicitation clause, Executive will be entitled to continue receiving Salary
for a period of three months, subject to all applicable withholdings and
taxes. Any bonuses, fees or payments due to Executive under Section 4(b) above
shall be paid to Executive as set forth therein. Notwithstanding the
foregoing, upon termination of Executive for any reason or upon resignation by
Executive and unless waived in writing by the Chairman, Executive hereby agrees
and will be deemed to have immediately resigned as a member of the Board and as
a director and officer of any subsidiary of the Company.
10. Confidentiality. Executive
covenants and agrees that he will not at any time during or after the end of the
Term, without written consent of the Company or as may be required by law or
valid legal process, directly or indirectly, use for his own account, or
disclose to any person, firm or corporation, other than authorized officers,
directors, attorneys, accountants and employees of the Company or its Affiliates
(as defined below), Confidential Information (as hereinafter defined) of the
Company. As used herein, “Confidential Information” of
the Company means information about the Company of any kind, nature or
description, including but not limited to, any proprietary information, trade
secrets, data, formulae, supplier, client and customer lists or requirements,
price lists or pricing structures, marketing and sales information, business
plans or dealings and financial information and plans as well as papers, resumes
and records (including computer records) that are disclosed to or otherwise
known to Executive as a direct or indirect consequence of Executive’s employment
with the Company, which information is not generally known to the public or in
the businesses in which the Company is engaged. Confidential
Information also includes any information furnished to the Company by a third
party with restrictions on its use or further disclosure.
11. Non-Disparagement. During
and after the Term, each of Executive and the Company covenants and agrees that
he/it will not make disparaging or derogatory comments about the other party, or
any of its or its Affiliate’s respective directors, officers, employees,
suppliers, customers, distributors, sales representatives, licensees, business,
operations, products or services.
12. Dispute
Resolution. Except for an action exclusively seeking
injunctive relief, any disagreement, claim or controversy arising under or in
connection with this Agreement, including Executive’s employment or termination
of employment with the Company will be resolved exclusively by arbitration
before a single arbitrator in accordance with the National Rules for the
Resolution of Employment Disputes of the American Arbitration Association (the
“Rules”), provided that,
the arbitrator will allow for such discovery as would otherwise be allowed under
the California Code of Civil Procedure, including access to essential documents
and witnesses; provided further, that the Rules will be modified by the
arbitrator to the extent necessary to be consistent with applicable
law. The arbitration will take place in San Francisco,
CA. The award of the arbitrator with respect to such disagreement,
claim or controversy will be in writing with sufficient explanation to allow for
such meaningful judicial review as permitted by law, and that such decision will
be enforceable in any court of competent jurisdiction and will be binding on the
parties hereto. The remedies available in arbitration will be
identical to those allowed at law. The arbitrator will be entitled to
award reasonable attorneys’ fees to the prevailing party in any arbitration or
judicial action under this Agreement, consistent with applicable
law. The Company and Executive each will pay its or his own
attorneys’ fees and costs in any such arbitration, provided that, the Company
will pay for any costs, including the arbitrator’s fee, that Executive would not
have otherwise incurred if the dispute were adjudicated in a court of law,
rather than through arbitration.
13. Binding
Agreement.
(a) This
Agreement is a personal contract and the rights and interests of Executive
hereunder may not be sold, transferred, assigned, pledged, encumbered or
hypothecated by him, provided that all rights of the Executive hereunder shall
inure to the benefit of, and be enforceable by Executive’s personal or legal
representatives, executors, heirs, administrators, successors, distributors,
devisees and legatees.
(b) In
addition to any obligations imposed by law, any successor to Company (whether
direct or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the assets of the Company, is bound by this Agreement in
the same manner and to the same extent that the Company would be required to
perform if no such succession had taken place.
14. Enforceability. Executive
represents and warrants to and covenants with the Company as
follows:
(a) Executive
acknowledges and agrees to the adequacy and receipt of the Salary and other
benefits provided to Executive under this Agreement for each of the covenants
set forth in this Agreement, and that the Company regards Executive’s commitment
to abide by such covenants as an essential condition to the Company’s agreement
to enter into this Agreement and to pay Executive such benefits.
(b) Executive
acknowledges and agrees that the covenants set forth in this Agreement are
reasonably necessary for the protection of the interests of the Company, are
reasonable as to duration, scope and territory, and are not unreasonably
restrictive of Executive.
(c) The
Company’s remedy at law for breach of any of the covenants set forth in this
Agreement will be inadequate. In addition to any other rights or
remedies that the Company may have, Employer shall be entitled to injunctive
relief, without posting bond.
15. Return of Company
Property. Executive agrees that following the termination of
his employment for any reason, he will promptly return all property of the
Company, its Affiliates and any divisions thereof he may have managed that is
then in or thereafter comes into his possession, including, but not limited to,
documents, contracts, agreements, plans, photographs, books, notes,
electronically stored data and all copies of the foregoing, as well as any
materials or equipment supplied by the Company to Executive.
16. Entire
Agreement. This Agreement contains all the understandings
between the parties hereto pertaining to the matters referred to herein, and
supersedes all undertakings and agreements, whether oral or written, previously
entered into by them with respect thereto. Executive represents that,
in executing this Agreement, he does not rely, and has not relied, on any
representation or statement not set forth herein made by the Company with regard
to the subject matter, bases or effect of this Agreement otherwise.
17. Amendment or Modification,
Waiver. No provision of this Agreement may be amended or
waived unless such amendment or waiver is agreed to in writing, signed by
Executive and by a duly authorized officer of the Company. The
failure of either party to this Agreement to enforce any of its terms,
provisions or covenants will not be construed as a waiver of the same or of the
right of such party to enforce the same. Waiver by either party
hereto of any breach or default by the other party of any term or provision of
this Agreement will not operate as a waiver of any other breach or
default.
18. Notices. Any
notice to be given hereunder will be in writing and will be deemed given when
delivered personally, sent by courier or fax or registered or certified mail,
postage prepaid, return receipt requested, addressed to the party concerned at
the address indicated below or to such other address as such party may
subsequently give notice of hereunder in writing:
To Executive at:
Richard Sommer
______________________
______________________
Phone: (___) ___-________
To the Company at:
LiveDeal, Inc.
2490 E. Sunset Rd., #100
Las
Vegas, NV 89120
Phone:
(702) 939-0230
Fax:
(702) 939-0246
Attention: CFO
With a copy (which shall not constitute
notice hereunder) to:
Daniel M. Mahoney, Esq.
Snell & Wilmer L.L.P.
One Arizona Center
400 East Van Buren St., 10th
Floor
Phoenix, Arizona 85004
Phone:
(602) 382-6206
Fax:
(602) 382-6070
Any
notice delivered personally or by courier under this Section will be deemed
given on the date delivered. Any notice sent by fax or registered or
certified mail, postage prepaid, return receipt requested, will be deemed given
on the date faxed or mailed. Each party may change the address to
which notices are to be sent by giving notice of such change in conformity with
the provisions of this Section.
19. Severability. In
the event that any one or more of the provisions of this Agreement will be held
to be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remainder of the Agreement will not in any way be affected
or impaired thereby. Moreover, if any one or more of the provisions
contained in this Agreement will be held to be excessively broad as to duration,
activity or subject, such provisions will be constructed by limiting and
reducing them so as to be enforceable to the maximum extent allowed by
applicable law.
20. Survivorship. The
respective rights and obligations of the parties hereunder will survive any
termination of this Agreement to the extent necessary for the intended
preservation of such rights and obligations.
21. Each Party the
Drafter. This Agreement and the provisions contained in it
will not be construed or interpreted for or against any party to this Agreement
because that party drafted or caused that party’s legal representative to draft
any of its provisions.
22. Governing
Law. This Agreement will be governed by and construed in
accordance with the laws of the State of Nevada, without regard to its conflicts
of laws principles.
23. Headings. All
descriptive headings of sections and paragraphs in this Agreement are intended
solely for convenience, and no provision of this Agreement is to be construed by
reference to the heading of any section or paragraph.
24. Counterparts. This
Agreement may be executed in counterparts, each of which will be deemed an
original, but all of which together will constitute one and the same
instrument.
[Signature
Page Follows]
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date
first written above.
LIVEDEAL,
INC., a Nevada corporation
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EXECUTIVE
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By:
Rajesh Navar
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Richard
F. Sommer
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Its:
Chairman of the Board
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[RICHARD
SOMMER EMPLOYMENT AGREEMENT]