THIS EMPLOYMENT AGREEMENT is made and entered
into this 3rd day of February, 2014, by and between NET TALK.COM INC., a Florida corporation (the "Company"), and Steven
Healy, residing at Address, FL zip (the "Executive").
The Company hereby employs the Executive,
and the Executive hereby accepts such employment, upon the terms and subject to the conditions set forth in this Agreement. (The
“Amendment Employment Agreement”)
Subject to the provisions for termination
as hereinafter provided, the term of employment under this Agreement shall begin as of January 2nd , 2014,
and shall continue through January 3rd, 2016, provided, however, (each such January 2nd being referred to
as a "Renewal Date"), the term of this Agreement shall automatically be extended for an additional one year so that on
each Renewal Date the then remaining unexpired term of this Agreement shall be two years, unless either party gives the other written
notice of termination at least ninety (90) days prior to any such Renewal Date.
(a) Base Salary.
The Company shall pay to the Executive as basic compensation for all services rendered by the Executive during the term of
this Agreement a basic annualized salary of $100,000 per year (starting March 16th, 2014 the base salary will increase to $105,000,
and on January 2nd, 2015 the Base Salary will increase to $125,000 or such other sum in excess of that amount as the
parties may agree on from time to time or as provided in the next sentence (as in effect from time to time, the "Base Salary"),
payable twice-monthly or in other more frequent installments, as determined by the Company. The Board of Directors shall
have the authority to increase the Executive's Base Salary in effect from time to time. In addition, the Board of Directors, in
its discretion, may award a bonus or bonuses to the Executive in addition to the bonuses provided for in Section 3(b).
(b) Bonuses. In
addition to the Base Salary to be paid pursuant to Section 3(a), for each of the Company's two fiscal years ending December 31,
2016, to the extent earned, specified on Exhibit A to this agreement. For each fiscal year ending on or after December 31, 2014,
the Company shall pay to the Executive as incentive compensation annual bonuses in accordance with comparable incentive bonus plan(s)
adopted by the Board of Directors of the Company.
Plans and Initial Award. (i) It is anticipated that the Company will adopt certain incentive compensation
plans, including a long term incentive plan (the "LTIP"), providing for annual or other periodic awards to key employees,
among other things, of restricted stock, and a stock option plan (the "ISO/NSO Plan"), providing for the annual or other
periodic issuance of options to purchase the Company's common stock. The LTIP and ISO/NSO Plan are referred to collectively in
this Agreement as the "Plans." The Executive will be given an opportunity to participate in the Plans, in accordance
with and subject to the terms of the Plans as they may be adopted, amended and administered from time to time.
(1) In addition to the incentive
compensation referred to in Section 3(c)(i), the Company hereby agrees to issue to the Executive under the LTIP, effective immediately
following the completion of the Distribution, 0 shares of the Company's common stock (the "Initial Restricted Stock").
and all risks of forfeiture shall lapse as to all of the Initial Restricted Stock and the Initial Options shall be fully vested
and shall be exercisable as to all of the shares of common stock covered by the Initial Options upon (i) the death of the Executive
or termination of employment upon the "Permanent Disability" (as that term is defined in Section 7(b) (ii) of this Agreement)
of the Executive, (ii) the termination of employment of the
(d) Reimbursement. The
Company shall reimburse the Executive, in accordance with the Company's policies and practices for senior management, for all reasonable
expenses incurred by the Executive in the performance of the Executive's duties under this Agreement, provided, however, that the
Executive must furnish to the Company an itemized account, satisfactory to the Company, in substantiation of such expenditures.
(e) Certain Benefits. The
Executive shall be entitled to such fringe benefits including, but not limited to, medical and other insurance benefits as may
be provided from time to time by the Company to other senior officers of the Company. In addition, without restricting the foregoing,
the Company shall provide the Executive at the Company's sole cost and expense with (i) a policy or policies of term life insurance
(the "Basic Life Insurance") providing, among other things, basic death benefits of not less than three times the Base
Salary in effect from time to time, (ii) directors and officers liability insurance with coverage, terms and limits suitable for
an executive officer of a OTCBB, or any up listed Stock Exchange, comparable in financial size and wherewithal to that of the Company.
(f) Other Incentive
and Benefit Plans. The Executive shall be eligible to participate, in accordance with the terms of such
plans as they may be adopted, amended and administered from time to time, in incentive bonus, benefit or similar plans, including
without limitation, any stock option, bonus or other equity ownership plan, any short, mid or long term incentive plan and any
other bonus, pension or profit sharing plans established by the company from time to time.
(a) General. The
Executive is engaged as the Chief Financial Officer. In addition, at the request of the Board of Directors, the Executive shall
serve in the same positions in any wholly owned subsidiary of the Company, with additional compensation. The Executive's duties
shall be commensurate with those customarily associated with the Chief Financial Officer of a corporation comparable to the Company.
(b) Specific. In
addition to the general duties, responsibilities and authority as Chief Financial Officer, and without in any way intending to
diminish the Executive duties, responsibilities and authority, the Executive's duties, responsibilities and authority shall include
but not be limited to (i) participating in consultation with the rest of the Management Team in the development and implementation
of the Company's strategic business plans.
(c) Indemnification. To
the fullest extent permitted by law, the Company shall indemnify and hold harmless the Executive for all liabilities, costs, expenses
and damages arising out of or in connection with the Executive's service to the Company under this Agreement. In furtherance of
this indemnity, the Company shall enter into an indemnification agreement, in form and substance reasonably satisfactory to the
Executive and the Company. In addition, the indemnity providing officer or director, or service in a similar capacity, for any
civic, community or charitable organization, provided such service is undertaken at the request of or with the knowledge and acquiescence
of the Company. The foregoing indemnification shall be in addition to any rights or benefits the Executive may have under statute,
the Bylaws or Articles of Incorporation of the Company, under a policy of insurance, or otherwise.
|5.||EXTENT OF SERVICES; VACATIONS AND DAYS OFF
of Services. During the term of the Executive's employment under this Agreement, except during customary
vacation periods and periods of illness, the Executive shall devote full-time energy and attention during regular business hours
to the benefit and business of the Company as may be reasonably necessary in performing the Executive's duties pursuant to this
Agreement. Notwithstanding the foregoing, the Executive may (i) serve on corporate, trade association, civic, religious or charitable
boards or committees, (ii) deliver lectures, carry out non related consultancy activity, fulfill speaking engagements or teach
at educational institutions and (iii) manage personal investments, so long as such activities do not materially interfere with
the performance of the Executive's duties and responsibilities and do not create a conflict of interest.
(b) Vacations. The
Executive shall be entitled to vacations with pay and to such personal and sick leave with pay in accordance with the policy of
the Company as may be established from time to time by the Company and applied to other senior officers of the Company. In no event
shall the Executive be entitled to not fewer than four weeks' annual vacation. Unused vacation days may be carried over from one
year to the next for a period of up to two years. Any vacation days which remain unused on the second anniversary of the end of
the fiscal year to which they originally related shall expire and shall thereafter no longer be useable by the Executive.
The Company shall provide the Executive
with a fully furnished office at located in northern Dade or Broward County, Florida, and the facilities of the Company shall be
generally available to the Executive in the performance of the Executive's duties pursuant to this Agreement, it being understood
and contemplated by the parties that all equipment, supplies and office personnel required in the performance of the Executive's
duties under this Agreement shall be supplied by and at the sole expense of the Company.
|7.||ILLNESS OR INCAPACITY, TERMINATION ON DEATH, ETC.
(a) Death. If
the Executive dies during the term of the Executive's employment, the Company shall pay to the estate of the Executive within 30
days after the date of death such Base Salary and any cash bonus compensation earned and unearned during the full duration of this
contract, and pursuant to the provisions of any incentive compensation plan then in effect but not yet paid, as would otherwise
have been payable to the Executive up to the end of the month in which the Executive's death occurs. After receiving the full payments
provided in this Section 7(a), the Executive and the Executive's estate shall have no further rights under this Agreement (other
than those rights already accrued).
(b) Disability. (i)
During any period of disability, illness or incapacity during the term of this Agreement which renders the Executive at least temporarily
unable to perform the services required under this Agreement, the Executive shall receive the Base Salary payable under Section
3(a) of this Agreement plus any cash bonus compensation earned pursuant to the provisions of any incentive compensation plan then
in effect but not yet paid, less any cash benefits received by him under any disability insurance carried by or provided by the
Company. Upon the Executive's "Permanent Disability" (as defined below), which Permanent Disability continues during
the payment periods specified herein, the Company shall pay to the Executive for the period of time specified below an amount (the
"Disability Payment") equal to the (i) sum of (A) the Base Salary paid in the same monthly or other period installments
as in effect at the time of the Executive's Permanent Disability plus (B) an amount equal to the target level of the annual cash
bonus payable to the Executive under the Company's Management Incentive Compensation Plan as described on Exhibit A or any similar
bonus or incentive plans or programs then in effect (the "MICP Target Amount") in respect of the fiscal year during which
the Executive's Permanent Disability occurred, which MICP Target Amount shall be paid in pro rata equal monthly installments over
the period of time specified below (ii) reduced by the amount of any monthly payments under any policy of disability income insurance
paid for by the Company which payments are received during the time when any Disability Payment is being made to the Executive
following the Executive's Permanent Disability. For so long as the Executive's Permanent Disability continues, the Disability Payment
shall be paid by the Company to the Executive in equivalent installments at the same time or times as would have been the case
for payment of Base Salary over the unexpired term of this Agreement if the Executive had not become permanently disabled and had
remained employed by the Company hereunder, but in no case shall such period exceed 24 months. The Executive may be entitled to
receive payments under any disability income insurance which may be carried by or provided by the Company from time to time. Upon
"Permanent Disability" (as that term is defined in Section 7(b) (ii) below) of the Executive, except as provided in this
Section 7(b) all rights of the Executive under this Agreement (other than rights already accrued) shall terminate.
(ii) The term "Permanent
Disability" as used in this Agreement shall mean, in the event a disability insurance policy is maintained by the Company
covering the Executive at such time and is in full force and effect, the definition of permanent disability set forth in such policy.
In the event no disability insurance policy is maintained at such time and in full force and effect, "Permanent Disability"
shall mean the inability of the Executive, as determined by the Board of Directors of the Company, by reason of physical or mental
disability to perform the duties required of him under this Agreement for a period of one hundred and eighty (180) days in any
one-year period. Successive periods of disability, illness or incapacity will be considered separate periods unless the later period
of disability, illness or incapacity is due to the same or related cause and commences less than six months from the ending of
the previous period of disability. Upon such determination, the Board of Directors may terminate the Executive's employment under
this Agreement upon ten (10) days' prior written notice. If any determination of the Board of Directors with respect to permanent
disability is disputed by the Executive, the parties hereto agree to abide by the decision of a panel of three physicians. The
Executive and Company shall each appoint one member, and the third member of the panel shall be appointed by the other two members.
The Executive agrees to make him available for and submit to examinations by such physicians as may be directed by the Company.
Failure to submit to any such examination shall constitute a breach of a material part of this Agreement.
(a) By the
Executive. (i) The Executive may terminate the Executive's employment hereunder upon giving at least
ninety (90) days' prior written notice. In addition, the Executive shall have the right to terminate the Executive's employment
hereunder on the conditions and at the times provided for in Section 8(d) of this Agreement.
the Executive gives notice pursuant to Section 8(a) (i) above, the Company shall have the right (but not
the obligation) to relieve the Executive, in whole or in part, of the Executive's duties under this Agreement, or direct the Executive
to no longer perform such duties, or direct that the Executive should no longer report to work, or any combination of the foregoing.
In any such event, the Executive shall be entitled to receive only the Base Salary not yet paid, as would otherwise have been payable
to the Executive up to the end of the month specified as the month of termination in the termination notice. In the event the Executive
gives notice pursuant to Section 8(a)(i) above but specifies a termination date in excess of ninety (90) days from the date of
such notice, the Company shall have the right (but not the obligation) to accelerate the termination date to any date prior to
the date specified in the notice that is in excess of ninety (90) days from the date of the notice, and the Company shall have
the right (but not the obligation) to relieve the Executive, in whole or in part, of the Executive's duties under this Agreement,
or direct the Executive to no longer perform such duties, or direct that the Executive should no longer report to work, or any
combination of the foregoing; provided, however, that in any such event the Executive shall be entitled to receive the Base Salary,
as would otherwise have been payable to the Executive up to the end of the month of the termination date properly selected by the
Company. Upon receiving the payments provided for under this Section 8(a), all rights of the Executive under this Agreement (other
than rights already accrued) shall terminate.
(b) Termination for
"Good Cause". (i) Except as otherwise provided in this Agreement, the Company may terminate the
employment of the Executive hereunder only for "good cause," which shall mean (a) the willful, substantial, continued
and unjustified refusal of the Executive substantially to perform his duties with the willful intention of harming the company
(other than any failure due to physical or mental incapacity) or (b) continued willful misconduct materially and demonstrably injurious
to the Company, financially or otherwise, in each case, as determined in the reasonable discretion of the Board of Directors, but
with respect to each of the foregoing bases for termination specified in the preceding clause, only if (1) the Executive has been
provided with written notice of any assertion that there is a basis for termination for good cause which notice shall specify in
reasonable detail specific facts regarding any such assertion and the Executive has been given a reasonable period of time within
which to remedy or cure the problem or complaint, (2) such notice is provided to the Executive a reasonable time before the Board
of Directors meets to consider any possible termination for cause, (3) at or prior to the meeting of the Board of Directors to
consider the matters described in the written notice, an opportunity is provided to the Executive and his counsel to be heard by
the Board of Directors with respect to the matters described in the written notice, before it acts with respect to such matter,
(4) any resolution or other action by the Board of Directors with respect to any deliberation regarding or decision to terminate
the Executive for good cause is duly adopted by a unanimous vote of the entire Board of Directors of the Company at a meeting of
the Board duly called and held and (5) the Executive is promptly provided with a copy of the resolution or other corporate action
taken with respect to such termination. No act or failure to act by the Executive shall be considered willful unless done or omitted
to be done by him not in good faith and without reasonable belief that his action or omission was in the best interests of the
the employment of the Executive is terminated for good cause under Section 8(b) (i) of this Agreement, the Company shall pay to
the Executive any Base Salary earned prior to the effect yet paid and any cash bonus compensation earned pursuant to the provisions
of any incentive compensation plan then in effect but not paid to the Executive prior to the effective date of such termination.
Under such circumstances, such payments shall be in full and complete discharge of any and all liabilities or obligations of the
Company to the Executive hereunder, and the Executive shall be entitled to no further benefits under this Agreement (other than
rights already accrued).
Termination of the employment of the Executive other than as expressly specified above in Section 8(b) (i) for good cause shall
be deemed to be a termination of employment "Without Good Cause."
(c) Termination without Good Cause. (i)
Notwithstanding any other provision of this Agreement, the Company shall have the right to terminate the Executive's employment
Without Good Cause pursuant to the provisions of this Section 8(c). If the Company shall terminate the employment of the Executive
Without Good Cause effective on a date earlier than the termination date provided for in Section 2 (with the effective date of
termination as so identified by the Company being referred to herein as the "Accelerated Termination Date"), the Executive,
until the end of the term of this Agreement then in effect as provided for in Section 2, but in no case shall such period exceed
24 months, or until the date which is 12 months after the Accelerated Termination Date, whichever is greater, shall continue to
receive (1) the Base Salary, paid in the same monthly or other periodic installments as in effect prior to the Accelerated Termination
Date (2) an equal monthly pro rata portion of an amount of cash equal to the MICP Target Amount (as that term is defined in Section
7(b)(i)) in respect of the year during which the Executive's employment terminates, multiplied times the number of years (or fractions
thereof) remaining in the then unexpired term of this Agreement or multiplied rata portion of an amount of cash equal to the cash
value of any bonus paid or to be paid to the Executive in the form of performance shares or restricted stock under the LTIP as
described on Exhibit A or any similar bonus or incentive plans or programs then in effect (valued, if applicable under the terms
of such plans or programs, at the greater of the closing price on the OTCBB Stock Exchange, or other such market on which the Company's
stock trades if it is not listed on the New York Stock Exchange/ or other exchanges, on the first trading day of the plan or program
cycle or the Accelerated Termination Date, or if the Accelerated Termination Date is not a trading day, on the first trading day
thereafter) in respect of the then-current three year cycle of such plans or programs or such other cycle as is then in effect,
calculated as if the then-current cycle were completed and the target levels attained (the "LTIP Target Amount"), which
cash payment shall be in lieu and in full satisfaction any rights under the LTIP in respect of such stock or shares as described
in Exhibit A or any similar bonus or incentive plans or programs in effect at the time of such payment (all of which stock or shares
shall be cancelled upon such payment and receipt); provided however, if the Accelerated Termination Date is prior to December 31st,
2014, the amount of cash payable to the Executive under the LTIP shall be a minimum of $350,000, and (4) any other cash or other
bonus compensation earned prior to the date of such termination pursuant to the terms of all incentive compensation plans then
in effect other than the Company's Management Incentive Compensation Plan as described on Exhibit A or any similar bonus or incentive
plans or programs then in effect; provided that, notwithstanding such termination of employment, the Executive's covenants set
forth in Section 10 and Section 11 are intended to and shall remain in full force and effect and provided further that in the event
of such termination, the Company shall have the right (but not the obligation) to relieve the Executive, in whole or in part, of
the Executive's duties under this Agreement, or direct the Executive to no longer perform such duties, or direct that the Executive
no longer be required to report to work, or any combination of the foregoing.
parties agree that, because there can be no exact measure of the damage that would occur to the Executive as a result of a termination
by the Company of the Executive's employment Without Good Cause, the payments and benefits paid and provided pursuant to this Section
8(c) shall be deemed to constitute liquidated damages and not a penalty for the Company's termination of the Executive's employment
Without Good Cause.
(d) Change of Control.
(i) For purposes of this Agreement, a "Change in Control”:
(1) a change
in control of the Company of a nature that is required, pursuant to the Securities Exchange Act of 1934 (the "1934 Act"),
to be reported in response to Item 1(a) of a Current Report on Form 8-K or Item 6(e) of Schedule 14A under the 1934 Act (in each
case under this Agreement, references to provisions of the 1934 Act and the rules and regulations promulgated there under being
understood to refer to such law, rules and regulations as the same are in effect on November 1, 1996); or
(2) the acquisition
of "Beneficial Ownership" (as defined in Rule 13d-3under the 1934 Act) of the Company's securities comprising 35% or
more of the combined voting power of the Company's outstanding securities by any "person" (as that term is used
in Sections 13(d) and 14(d) (2) of the 1934 Act and the rules and regulations promulgated there under, but not including any trustee
or fiduciary acting in that capacity for an employee benefit plan sponsored by the Company) and such person's "affiliates"
and "associates" (as those terms are defined under the 1934 Act), but excluding any ownership by the Executive and his
affiliates and associates; or
(3) the failure
of the "Incumbent Directors" (as defined below) to constitute at least a majority of all directors of the Company (for
these purposes, "Incumbent Directors" means individuals who were the directors of the Company on January 2, 2014 and,
after his or her election, any individual becoming a director subsequent to January 2, 2014, whose election, or nomination for
election by the Company's stockholders, is approved by a vote of at least two-thirds of the directors then comprising the Incumbent
Directors, except that no individual shall be considered an Incumbent Director who is not recommended by management and whose initial
assumption of office as a director is in connection with an actual or threatened "election contest" relating to the "election
of directors" of the Company, as such terms are used in Rule 14a-11 of Regulation 14A under the 1934 Act); or
(4) the closing of
a sale of all or substantially all of the assets of the Company;
(5) the Company's
adoption of a plan of dissolution or liquidation; or
closing of a merger or consolidation involving the Company in which the Company is not the surviving corporation or if, immediately
following such merger or consolidation, less than seventy-five percent (75%) of the surviving corporation's outstanding
voting stock is held or is anticipated to be held by persons who are stockholders of the Company immediately prior to
such merger or consolidation.
a Change in Control of the Company occurs, the Executive shall have the right, exercisable for a period of one year thereafter
by delivering a written statement to that effect to the Company, to immediately terminate this Agreement and upon such a determination
the Executive shall have the right to receive and the Company shall be obligated to pay to Executive in cash a lump sum payment
in an amount equal to the sum of (1) the "Control Cash Payment" as that term is defined in Section 8(d)(iii) of this
Agreement; (2) three times the annual Base Salary then in effect, (3) three times the MICP Target Amount (as that term is defined
in Section 7(b)(i)) in the year in which employment terminates, (4) the cash value of the LTIP Target Amount (as that term is defined
in Section 8(c)), which cash payment shall be in lieu and in full satisfaction of any rights under the LTIP in respect of such
stock or shares as described in Exhibit A or any similar bonus or incentive plans or programs in effect at the time of such payment
(all of which stock or shares shall be cancelled upon such payment and receipt), and (5) the additional payments necessary to discharge
certain tax liabilities (the "Gross Up") as that term is defined in Section 13 of this Agreement (the sum of the foregoing
amounts other than the Gross Up being referred to as the "Change in Control Payment"). If the Executive fails to exercise
his rights under this Section 8(d) within one year following a Change in Control, such rights shall expire and be of no further
force or effect.
“Control Cash Payment” shall be (A) $125,000 if any Event that constitutes a Change of Control occurs.
(e) Intentions Regarding
Certain Stock and Benefit Plans. Except as otherwise provided herein, upon any termination of the Executive's employment Without
Good Cause or upon the exercise by the Executive of his rights to terminate his employment following a Change of Control, it is
the intention of the parties that any and all vesting or performance requirements or conditions affecting any outstanding restricted
stock, performance stock, stock option, stock appreciation right, bonus, award, right, grant or any other incentive compensation
under any of the Plans, under this Agreement, or otherwise received, shall be deemed to be fully satisfied and any risk of forfeiture
with respect thereto shall be deemed to have lapsed.
(f) Certain Rights
Mutually Exclusive. The provisions of Section 8(c) and Section 8(d) are mutually exclusive, provided, however, that if within one
year following commencement of an 8(c) payout there shall be a Change in Control as defined in Section 8(d) (i), then the Executive
shall be entitled to the amount payable to the Executive under Section 8(d) (ii) and Section 8(d) (iii) reduced by the amount that
the Executive has received under Section 8(c) up to the date of the change in control. The triggering of the lump sum payment requirement
of Section 8(d) shall cause the provisions of Section 8(c) to become inoperative.
The Executive agrees that during the term
of the Executive's employment by the Company, the Executive will disclose and disclose only to the Company all ideas, methods,
plans, developments or improvements known by him which relate directly or indirectly to the business of the Company, whether acquired
by the Executive before or during the Executive's employment by the Company. Nothing in this Section 9 shall be construed as requiring
any such communication where the idea, plan, method or development is lawfully protected from disclosure as a trade secret of a
third party and of this Section 9 shall not be violated by ordinary and customary communications with reporters, bankers and securities
analysts and other members of the investment community.
The Executive agrees to keep in strict secrecy
and confidence any and all information the Executive assimilates or to which the Executive has access during the Executive's employment
by the Company and which has not been publicly disclosed and is not a matter of common knowledge in the fields of work of the Company.
The Executive agrees that both during and after the term of the Executive's employment by the Company, the Executive will not,
without the prior written consent of the Company, disclose any such confidential information to any third person, partnership,
joint venture, company, corporation or other organization. The foregoing covenants shall not be breached to the extent that any
such confidential information becomes a matter of general knowledge other than through a breach by the Executive of the Executive's
obligations under this Section 10.
|11.||NONCOMPETITION AND NONSOLICITATION
(a) General. The
Executive hereby acknowledges that, during and solely as a result of the Executive's employment by the Company, the Executive has
received and shall continue to receive: (1) special training and education with respect to the operations of the Company's real
estate development and management businesses and its leasing, lending and financing activities, and other related matters, and
(2) access to confidential information and business and professional contacts. In consideration of the special and unique opportunities
afforded to the Executive by the Company as a result of the Executive's employment, as outlined in the previous sentence, the Executive
hereby agrees to the restrictive covenants in this Section 11.
(b) Noncompetition. During
the term of the Executive's employment, whether pursuant to this Agreement, any automatic or other renewal hereof or otherwise,
and, except as may be otherwise herein provided, for a period of two (2) years after the termination of the Executive's employment
with the Company ,regardless of the reason for such termination, the Executive shall not, directly or indirectly, enter into, engage
in, be employed by or consult with any business which competes with the Company's real estate lending, leasing, development or
management businesses in Florida. The Executive shall not engage in such prohibited activities, either as an individual, partner,
officer, director, stockholder, employee, advisor, independent contractor, joint venture, consultant, agent, or representative
or salesman for any person, firm, partnership, corporation or other entity so competing with the Company. The restrictions of this
Section 11 shall not be violated by (i) the ownership of no more than 2% of the outstanding securities of any company whose stock
is traded on a national securities exchange or is quoted in the Automated Quotation System of the National Association of Securities
Dealers (NASDAQ), or (ii) other outside business investments that do not in any manner conflict with the services to be rendered
by the Executive for the Company and that do not diminish or detract from the Executive's ability to render the Executive's required
attention to the business of the Company.
(c) No solicitation. During
the Executive's employment with the Company and, except as may be otherwise herein provided, for a period of two (2) years following
the termination of the Executive's employment with the Company, regardless of the reason for such termination, the Executive agrees
the Executive will refrain from and will not, directly or indirectly, as an individual, partner, officer, director, stockholder,
employee, advisor, independent contractor, joint venture, consultant, agent, representative, salesman or otherwise solicit any
of the employees of the Company to terminate their employment.
(d) Term Extended
or Suspended. The period of time during which the Executive is prohibited from engaging in certain
business practices pursuant to Sections 11(b) or (c) shall be extended by any length of time during which the Executive is in breach
of such covenants.
(e) Essential Element. It
is understood by and between the parties hereto that the foregoing restrictive covenants set forth in Sections 11(a) through (c)
are essential elements of this Agreement, and that, but for the agreement of the Executive to comply with such covenants, the Company
would not have agreed to enter into this Agreement. Such covenants by the Executive shall be construed as agreements independent
of any other provision in this Agreement. The existence of any claim or cause of action of the Executive against the Company, whether
predicated on this Agreement, or otherwise, shall not constitute a defense to the enforcement by the Company of such covenants.
(f) Severability. It
is agreed by the Company and Executive that if any portion of the covenants set forth in this Section 11 are held to be invalid,
unreasonable, arbitrary or against public policy, then such portion of such covenants shall be considered divisible both as to
time and geographical area. The Company and Executive agree that, if any court of competent jurisdiction determines the specified
time period or the specified geographical area applicable to this Section 11 to be invalid, unreasonable, arbitrary or against
public policy, a lesser time period or geographical area which is determined to be reasonable, non-arbitrary and not against public
policy may be enforced against the Executive. The Company and the Executive agree that the foregoing covenants are appropriate
and reasonable when considered in light of the nature and extent of the business conducted by the Company.
The Executive agrees that damages at law
will be an insufficient remedy to the Company if the Executive violates the terms of Sections 9, 10 or 11 of this Agreement and
that the Company would suffer irreparable damage as a result of such violation. Accordingly, it is agreed that the Company shall
be entitled, upon application to a court of competent jurisdiction, to obtain injunctive relief to enforce the provisions of such
Sections, which injunctive relief shall be in addition to any other rights or remedies available to the Company. The Executive
agrees to pay to the Company all reasonable costs and expenses incurred by the Company relating to the enforcement of the terms
of Sections 9, 10 or 11 of this Agreement, including reasonable fees and reasonable disbursements of counsel selected by the Company
(during investigation and before and at trial and in appellate proceedings).
|13.||PAYMENT OF EXCISE TAXES
of Excise Taxes. If the Executive is to receive any (1) Change of Control Payment under Section 8(d), (2)
any benefit or payment under Section 7 as a result of or following the death or Permanent Disability of the Executive, (3) any
benefit or payment under Section 8(c) as a result of or following any termination of employment hereunder Without Good Cause, (4)
any benefit or payment under the Plans as a result of a Change of Control, following the death or Permanent Disability of the Executive
or following the termination of employment hereunder Without Good Cause (such sections being referred to as the "Covered Sections"
and the benefits and payments to be received there under being referred to as the "Covered Payments"), the Executive
shall be entitled to receive the amount described below to the extent applicable: If any Covered Payment(s) under any of the Covered
Sections or by the Company under another plan or agreement (collectively, the "Payments") are subject to the excise tax
imposed by Section 4999 of the Internal Revenue Code of 1986 (as amended from time to time, the "Code"), or any successor
or similar provision of the Code (the "Excise Tax"), the Company shall pay the Executive an additional amount (the "Gross
Up") such that the net amount retained by the Executive after deduction of any Excise Tax on the Payments and the federal
income tax on any amounts paid under this Section 13 shall be equal to the Payments.
Adjustment Payments. For purposes of determining the Gross Up, the Executive shall be deemed to pay the federal
income tax at the highest marginal rate of taxation (currently 39.5%) in the calendar year in which the payment to which the Gross
Up applies is to be made. The determination of whether such Excise Tax is payable and the amount thereof shall be made upon the
opinion of tax counsel selected by the Company and reasonably acceptable to the Executive. The Gross Up, if any, that is due as
a result of such determination shall be paid to the Executive in cash in a lump sum within thirty (30) days of such computation.
If such opinion is not finally accepted by the Internal Revenue Service upon audit or otherwise, then appropriate adjustments shall
be computed (without interest but with Gross Up, if applicable) by such tax counsel based upon the final amount of the Excise Tax
so determined; any additional amount due the Executive as a result of such adjustment shall be paid to the Executive by his or
her Company in cash in a lump sum within thirty (30)days of such computation, or any amount due the Executive's Company as a result
of such adjustment shall be paid to the Company by the Executive in cash in a lump sum within thirty (30) days of such computation.
of Breach. The waiver by either party to this Agreement of a breach of any of the provisions of this Agreement
by the other party shall not be construed as a waiver of any subsequent breach by such other party.
with Other Agreements. The Executive represents and warrants that the execution of this Agreement by him
and the Executive's performance of the Executive's obligations hereunder will not conflict with, result in the breach of any provision
of or the termination of or constitute a default under any Agreement to which the Executive is a party or by which the Executive
is or may be bound.
Binding Effect; Assignment. The rights and obligations of the Company under this Agreement shall inure to
the benefit of and shall be binding upon the successors and assigns of the Company. This Agreement is a personal employment contract
and the rights, obligations and interests of the Executive hereunder may not be sold, assigned, transferred, pledged or hypothecated.
Agreement. This Agreement contains the entire agreement and supersedes all prior agreements and understandings,
oral or written, with respect to the subject matter hereof. This Agreement may be changed only by an agreement in writing signed
by the party against whom any waiver, change, amendment, modification or discharge is sought.
(e) Headings. The
headings and indentations contained in this Agreement are for reference purposes only and shall not affect the meaning or interpretation
of this Agreement.
No Duty to Mitigate. The Executive shall be under no duty to mitigate any
loss of income as result of the termination of his employment hereunder and any payments due the Executive upon termination of
employment shall not be reduced in respect of any other employment compensation received by the Executive following such termination.
Florida Law. This Agreement shall be construed pursuant to and governed by the substantive laws of the State of
Florida (except that any provision of Florida law shall not apply if the law of a state or jurisdiction other than Florida would
Process. The parties to this Agreement agree that jurisdiction and venue in any action brought pursuant to this
Agreement to enforce its terms or otherwise with respect to the relationships between the parties shall properly lie in and only
in the Circuit Court of the State of Florida in and for Dade County (the "Circuit Court") and the parties agree that
jurisdiction shall not properly lie in any other jurisdiction provided, however, if jurisdiction does not properly lie with the
Circuit Court, the parties agree that jurisdiction and venue shall properly lie in and only in the United States District Court
for the District of Florida, Dade Division. The parties hereby waive any objections which they may now or hereafter have based
on venue and/or forum non conveniens and irrevocably submit to the jurisdiction of any such court in any legal suit, action or
proceeding arising out of or relating to this Agreement. The parties further agree that the mailing by certified or registered
mail, return receipt requested, of any process required by any such court shall constitute valid and lawful service of process
against them, without the necessity for service by any other means provided by statute or rule of court.
Severability. Any provision of this Agreement which is determined by a court of competent jurisdiction
to be prohibited, unenforceable or not authorized in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent
of such prohibition, unenforceability or non-authorization without invalidating the remaining provisions hereof or affecting the
validity, enforceability or legality of such provision in any other jurisdiction. In any such case, such determination shall not
affect any other provision of this Agreement, and the remaining provisions of this Agreement shall remain in full force and effect.
If any provision or term of this Agreement is susceptible to two or more constructions or interpretations, one or more of which
would render the provision or term void or unenforceable, the parties agree that a construction or interpretation which renders
the term or provision valid shall be favored.
Deduction for Tax Purposes. The Company's obligations to make payments under
this Agreement are independent of whether any or all of such payments are deductible expenses of the Company for federal income
(k) Enforcement. If,
within 10 days after demand to comply with the obligations of one of the parties to this Agreement served in writing on the other,
compliance or reasonable assurance of compliance is not forthcoming, and the party demanding compliance engages the services of
an attorney to enforce rights under this Agreement, the prevailing party in any action shall be entitled to recover all reasonable
costs and expenses of enforcement (including reasonable attorneys' fees and reasonable expenses during investigation, before and
at trial and in appellate proceedings). In addition, each of the parties agrees to indemnify the other in respect of any and all
claims, losses, costs, liabilities and expenses, including reasonable fees and reasonable disbursements of counsel (during investigation
prior to initiation of litigation and at trial and in appellate proceedings if litigation ensues), directly or indirectly resulting
from or arising out of a breach by the other party of their respective obligations hereunder. The parties' costs of enforcing this
Agreement shall include prejudgment interest. -of- pocket expenses in connection with the enforcement of this Agreement, all such
amounts shall accrue interest at 10% per annum (or such lower rate as may be required to avoid any limit imposed by applicable
law) commencing 30 days after any such expenses are incurred.
(I) Notices. All
notices which are required or may be given under this Agreement shall be in writing and shall be deemed to have been duly given
when received if personally delivered; when transmitted if transmitted by telecopy or similar electronic transmission method; one
working day after it is sent, if sent by recognized expedited delivery service; and three days after it is sent, if mailed, first
class mail, certified mail, return receipt requested, with postage prepaid. In each case notice shall be sent to:
To the Company:
NET TALK.COM INC.
1080 NW 163rd Drive
North Miami, FI.33169
Attn: Chairman of the Board
Facsimile: (305) 621 - 1201
To the Executive at the Executive's address
herein first above written, or to such other address as either party may specify by written notice to the other.
IN WITNESS WHEREOF, the parties hereto have
executed this Agreement, the day and year first above written.
|| /s/Anastasios Kyriakides
||CHIEF FINANCIAL OFFICER
|| /s/Steven Healy