EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT ("Agreement") is made, entered into, and
effective as of August 31, 2000 ("Effective Date"), by and between Digital West,
Inc., a California corporation (the "Company") and Andrew Hart ("Employee").
RECITALS
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WHEREAS, the Company desires to benefit from Employee's expertise and
employ Employee and Employee is willing to accept such employment.
NOW, THEREFORE, in consideration of the mutual covenants and conditions
contained herein, the parties hereto hereby agree as follows:
AGREEMENT
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1. Term and Duties.
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The Company hereby employs Employee as President as of the Effective Date
for a period of three (3) years, at which time this Agreement shall terminate
unless (i) extended by mutual agreement of the parties or (ii) for a period of
three (3) additional years upon the election of the Company. Employee shall
faithfully and diligently perform all professional duties and acts as may be
reasonably requested of Employee by the Company or its officers consistent with
the function of a President in this or a similar company.
2. Duties.
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Employee shall have supervision and control over, and responsibility for,
the overall day to day operations of Digital West and shall have such other
powers and duties as may from time to time be prescribed by the Board of
Directors. Employee will perform Employee's services to the best of Employee's
ability. Employee agrees throughout the term of this Agreement to devote
sufficient time, energy and skill to the business of the Company and to the
promotion of the best interests of the Company. Employee will be provided with
appropriate equipment, secretarial help, supplies, and other facilities and
services suitable to Employee's position and adequate for the performance of his
duties in the discretion of the Board of Directors.
3. Compensation.
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3.1 Subject to the termination of this Agreement as provided herein,
the Company shall compensate Employee for his services as follows (collectively
referred to as the "Compensation"):
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(a) Employee shall receive an annual salary ("Salary") equal to 2% of the
Company's gross income up to $15,000,000 in annual sales, and 1.25% of annual
sales in excess of $15,000,000 ("Percentage Compensation"). For the six months
immediately following the date of this Agreement Employee shall receive a
guaranteed monthly salary against the Percentage Compensation of $15,000 per
month. Subsequent to such initial six month period, Employee shall receive a
guaranteed monthly salary against the Percentage Compensation of $12,000 per
month. Such Salary shall be payable in semi-monthly installments in accordance
with the Company's practices, less normal payroll deductions.
(b) Employee shall receive, in addition to the Salary set forth above, a
cash bonus (the "Bonus"), payable annually following the end of each fiscal
year, equal to 15% of the total cumulative EBITDA of the Company (as determined
in accordance with GAAP) less the Cash Purchase Price and any and all funds
invested into Digital West by GONT.
(c) In addition to the Salary and Bonus set forth above, Employee shall be
granted options to acquire common stock of Go Online Networks Corporation
("GONT") as follows: At the end of Year 1, Employee will become eligible to
purchase up to 250,000 shares of common stock at a price of $0.22 per share; at
the end of Year 2, Employee will become eligible to purchase an additional
200,000 shares of common stock at a price of $0.40 per share; and at the end of
Year 3, Employee will become eligible to purchase an additional 200,000 shares
of common stock at a price of $0.80 per share. All options granted hereunder
shall be exercisable for a period of two (2) years from their date of grant.
4. Disclosure of Confidential Information.
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4.1 Employee shall not, during the term of this Agreement and
thereafter, communicate, divulge, or use for the benefit of himself or any other
person, partnership, association, or corporation, either directly or indirectly,
any information or knowledge concerning the Company and any information,
including but not limited to pricing schedules, customer lists, communication
techniques, invoicing, and billing which may be communicated to Employee by the
Company during the term of this Agreement.
4.2 Employee agrees that any and all customer lists, pricing schedules,
products, formulas, inventions, schematics, techniques, and goods created by
Employee while rendering services to Company shall be considered the property of
the Company which shall own all rights and interest in the same.
4.3 Employee covenants and agrees that during the term of this
Agreement he will not do any act, or fail to do any act, the result of which may
be prejudicial or injurious to the business and goodwill of the Company.
5. Expenses.
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The Company shall reimburse Employee for all reasonable business related
expenses incurred by Employee in the course of his normal duties on behalf of
the Company. In reimbursing Employee for expenses, the ordinary and usual
business guidelines and documentation requirements shall be adhered to by the
Company and Employee. Any expenses which, individually or in the aggregate,
exceed Five Hundred Dollars ($500.00) must be consented to by the Company in
writing prior to being incurred by Employee.
6. Termination.
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6.1 Termination by the Company. The Company reserves the right to
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terminate this Agreement at any time for "cause". For the purposes of this
Agreement, an event or occurrence constituting "cause" shall include, but not be
limited to:
6.1.1 Employee's failure or refusal, after notice thereof, to perform
specific directives of the Board of Directors of the Company, when such
directives are consistent with the scope and nature of the Employee's duties and
responsibilities as set forth herein or the commission of any intentional tort
by the Employee against the Company, or any breach by the Employee of any of the
covenants set forth in paragraphs 4 or 9 of this Agreement;
6.1.2 Drunkenness or use of drugs which interferes with the performance of
Employee's obligations under this Agreement, continuing after notice thereof;
6.1.3 Any act of dishonesty or moral turpitude by the Employee which
constitutes a crime under the laws of the place where the act was committed;
6.1.4 Any willful or intentional act by Employee which, although not a
crime, is of such impropriety or magnitude that it substantially adversely
affects the business and the reputation of the Company.
In the event Employee is terminated for cause as defined herein, Employee
shall not be entitled to any bonus, termination or severance payment of any
sort.
6.2 Termination upon Death or Disability. This Agreement shall be
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terminated upon the death of the Employee or, at the Company's discretion, if
the Employee suffers any physical or mental disability that would prevent the
performance of his duties under this Agreement. Such a termination, in the case
of disability, shall be effected by giving ninety (90) days written notice of
termination to Employee.
6.3 Termination with Notice. This Agreement may be terminated by
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either the Employee or the Company, with or without cause, by giving the other
party at least thirty (30) days notice in advance. In the event that this
Agreement is terminated by the Company prior to the completion of the term of
employment pursuant to this paragraph without Cause, Employee shall be entitled
to compensation provided for in this Agreement. In the event this Agreement is
terminated by the Employee, Employee shall be entitled to compensation earned by
and vested in him prior to the date of termination.
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7. Binding Effect.
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This Agreement shall be binding upon and inure to the benefit of the
parties hereto their respective devisees, legatees, heirs, legal
representatives, successors, and permitted assigns. The preceding sentence
shall not affect any restriction on assignment set forth elsewhere in this
Agreement.
8. Notices.
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All notices provided for in this Agreement shall be in writing signed by
the party giving such notice, and delivered personally or sent by overnight
courier or messenger or sent by registered or certified mail (air mail if
overseas), return receipt requested, or by telex, facsimile transmission,
telegram or similar means of communication. Notices shall be deemed to have
been received on the date of personal delivery, telex, facsimile transmission,
telegram or similar means of communication, or if sent by overnight courier or
messenger, shall be deemed to have been received on the next delivery day after
deposit with the courier or messenger, or if sent by certified or registered
mail, return receipt requested, shall be deemed to have been received on the
third business day after the date of mailing. Notices shall be sent to the
addresses set forth below:
If to the Company:
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Go Online Networks Corporation
5681 Beach Boulevard, Suite 101
Buena Park, CA 90621
Attn: Joseph Naughton, Chief Executive Officer
Facsimile No.: (714) 994-3242
With a copy to:
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Cutler Law Group
610 Newport Center Drive, Suite 800
Newport Beach, CA 92660
Attn: M. Richard Cutler, Esq.
Facsimile No.: (949) 719-1988
If to the Employee:
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Andrew Hart
9540 Cozycraft Ave.
Chatsworth, CA 91311
Facsimile No.: (818) 718-5766
9. Assignment.
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Subject to all other provisions of this Agreement, any attempt to assign or
transfer this Agreement or any of the rights conferred hereby, by judicial
process or otherwise, to any person, firm, company, or corporation without the
prior written consent of the other party, shall be invalid, and may, at the
option of such other party, result in an incurable event of default resulting in
termination of this Agreement and all rights hereby conferred.
10. Choice of Law.
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This Agreement and the rights of the parties hereunder shall be governed by
and construed in accordance with the laws of the State of California including
all matters of construction, validity, performance, and enforcement and without
giving effect to the principles of conflict of laws.
11. Jurisdiction.
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The parties submit to the jurisdiction of the Courts of the State of
California or a Federal Court empaneled in the State of California, County of
Orange, for the resolution of all legal disputes arising under the terms of this
Agreement, including, but not limited to, enforcement of any arbitration award.
12. Entire Agreement.
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Except as provided herein, this Agreement, including exhibits, contains the
entire agreement of the parties, and supersedes all existing negotiations,
representations, or agreements and all other oral, written, or other
communications between them concerning the subject matter of this Agreement.
There are no representations, agreements, arrangements, or understandings, oral
or written, between and among the parties hereto relating to the subject matter
of this Agreement that are not fully expressed herein.
13. Severability.
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If any provision of this Agreement is unenforceable, invalid, or violates
applicable law, such provision, or unenforceable portion of such provision,
shall be deemed stricken and shall not affect the enforceability of any other
provisions of this Agreement.
14. Captions.
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The captions in this Agreement are inserted only as a matter of convenience
and for reference and shall not be deemed to define, limit, enlarge, or describe
the scope of this Agreement or the relationship of the parties, and shall not
affect this Agreement or the construction of any provisions herein.
15. Counterparts.
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This Agreement may be executed in one or more counterparts, each of which
shall be deemed an original, but all of which shall together constitute one and
the same instrument.
16. Modification.
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No change, modification, addition, or amendment to this Agreement shall be
valid unless in writing and signed by all parties hereto.
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17. Waiver.
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No waiver of any breach, covenant, representation, warranty or default of
this Agreement by any party shall be considered to be a waiver of any other
breach, covenant, representation, warranty or default of this Agreement.
18. Interpretation
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The terms and conditions of this Agreement shall be deemed to have been
prepared jointly by all of the Parties hereto. Any ambiguity or uncertainty
existing hereunder shall not be construed against any one of the drafting
parties, but shall be resolved by reference to the other rules of interpretation
of contracts as they apply in the State of California.
19. Attorneys' Fees.
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Except as otherwise provided herein, if a dispute should arise between the
parties including, but not limited to arbitration, the prevailing party shall be
reimbursed by the non-prevailing party for all reasonable expenses incurred in
resolving such dispute, including reasonable attorneys' fees.
20. Taxes.
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Any income taxes required to be paid in connection with the payments due
hereunder, shall be borne by the party required to make such payment. Any
withholding taxes in the nature of a tax on income shall be deducted from
payments due, and the party required to withhold such tax shall furnish to the
party receiving such payment all documentation necessary to prove the proper
amount to withhold of such taxes and to prove payment to the tax authority of
such required withholding.
21. Not for the Benefit of Creditors or Third Parties.
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The provisions of this Agreement are intended only for the regulation of
relations among the parties. This Agreement is not intended for the benefit of
creditors of the parties or other third parties and no rights are granted to
creditors of the parties or other third parties under this Agreement. Under no
circumstances shall any third party, who is a minor, be deemed to have accepted,
adopted, or acted in reliance upon this Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the Effective Date.
"Company" "Employee"
Digital West, Inc. Andrew Hart
/s/ Joseph M. Naughton /a/ Andrew Hart
