Exhibit 10.2
AGREEMENT made as of this 11th day of August, 1998 by and
between TELLURIAN, INC. ("Tellurian") with an office at 300K, Xxxxx 00 Xxxxx,
Xxxxxx, Xxx Xxxxxx 00000, XXXXXX XXXXXXX residing at 00 Xxxxx Xxxxx, Xxxxxx, Xxx
Xxxxxx 00000, ("Xxxxxx") and XXXXXXX XXXXXXX residing at 000 X. Xxxxxxx Xxxxxx,
Xxxxxxxxxxx, Xxxxx Xxxxxxxx 00000 ("Xxxxxxx"). Xxxxxx and Xxxxxxx are
collectively referred to as the Swallows.
W I T N E S S E T H :
WHEREAS, Tellurian has an employment agreement dated as of
November 8, 1996 with Xxxxxx (the "Employment Agreement"); and
WHEREAS, Tellurian and Xxxxxx desire to terminate the
Employment Agreement with certain exceptions; and
WHEREAS, Tellurian and Xxxxxx desire to enter into certain
agreements whereby he will provide consulting services to Tellurian and certain
repairs and maintenance to Tellurian customers who have purchased Virtual
Reality products from it; and
WHEREAS, Xxxxxx desires to obtain a license to develop Virtual
Reality products and to license such developed products from Tellurian; and
WHEREAS, the Swallows purchased from Xxxxx Xxxxxx a $150,000
promissory note payable by Tellurian together with accrued unpaid interest (the
"Note"); and
WHEREAS, the Swallows desire to convert the Note into 100,000
shares of Tellurian's Common Stock and contemporaneously grant options to
purchase the aggregate of 100,000 shares of Tellurian's Common Stock to Xxxxxxx
Xxxx (50,000 shares and Xxxxx Xxxxxx 50,000 shares).
NOW, THEREFORE, IT IS MUTUALLY AGREED AS FOLLOWS:
1. Tellurian and Xxxxxx hereby terminate the Employment
Agreement, except for Article VIIIA. Xxxxxx agrees that he shall not directly or
indirectly induce or attempt to influence any employee of Tellurian to terminate
his employment with Tellurian and shall not directly or indirectly as a
principal, partner, officer, agent or employee, consultant or otherwise compete
against the Company or be financially interested in any business operating in
the continental United States which is involved in any product or service which
is a part of Tellurian's present activities, (including, without limitation,
those activities of Tellurian's subsidiaries) as of the date hereof except as
described herein as a sublicensee of Tellurian. Such covenant not to compete
shall be for a period of fifteen years from the date hereof. Except as set forth
herein, during the fifteen year term of this
1
agreement, Xxxxxx shall not use for his personal benefit, or disclose,
communicate or divulge to, or use for the direct or indirect benefit of any
person, firm, association or company other than Tellurian, any material referred
to herein or any information regarding the business methods, business secrets,
or other knowledge or processes used or developed by Tellurian or any names and
addresses of customers or clients or any other confidential information relating
to or dealing with the business operations or activities of Tellurian made known
to Xxxxxx or learned or acquired by Xxxxxx while in the employ of Tellurian.
As consideration for such termination, Xxxxxx will receive the
(i) sum of $27,000 as severance pay (at his option, in cash or kind) due within
ten days of Tellurian's completion of its proposed public offering which is on
file with the Securities and Exchange Commission (File No. 333-56793), and (ii)
right to use Tellurian Virtual Reality equipment currently in Ronald's
possession (which equipment has a fair market value of approximately $50,000)
for his further development of Virtual Reality products to be owned by Tellurian
and licensed to Xxxxxx on a non-transferable basis for a period of fifteen years
from the date hereof. Such equipment shall also be used for the continued
research and support of existing Tellurian customers as described in paragraph 3
below.
2. Xxxxxx acknowledges that he shall not sell Tellurian
virtual reality products (including, without limitation, image generators and
helmets) and virtual reality products developed by Xxxxxx outside of the United
States or in violation of Tellurian's agreement with Fightertown dated November
1997. Further, Tellurian can seek equitable relief, specific performance and/or
damages against Xxxxxx in case of breach of the provisions of this paragraph.
3. Xxxxxx agrees to accept telephone inquiries from Tellurian
customers experiencing problems with Tellurian Virtual Reality systems and
provide support to those customers at standard billing rates to be invoiced by
him for his sole benefit. Tellurian is not responsible for the collection or
billing of these accounts. All such financial arrangements are between Xxxxxx
and the customers. However, Xxxxxx will not deny telephone assistance to any
customer unless said customer has unpaid bills that are at least 15 days past
due. Assuming the duties of Xxxxxx are carried out faithfully and to the best of
his abilities, Tellurian will relinquish title to the $50,000 worth of materials
described in paragraph 1 herein at the end of the five year consulting period.
Failure to carry out the duties described herein would cause the immediate
return to Tellurian of the $50,000 described herein that has been loaned to him.
4. The Swallows agree that they will not sell or otherwise
transfer their Tellurian Common Stock beneficially owned by them from the date
hereof until September 30, 2000 without the prior written consent of X.X.
Xxxxxxx & Co., Inc. The foregoing shall not apply to the 100,000 shares of
Common Stock to be received by Xxxxxxx and/or Xxxxxx upon conversion of the Note
and the possible exercise of options granted by them to Xxxxxxx Xxxx and Xxxxx
Xxxxxx as described herein.
2
5. Xxxxxx agrees to provide consulting services to Tellurian
with regard to its virtual reality products and systems upon Tellurian's
request, to support the existing and future Tellurian customer base with respect
to answering questions that they have with respect to Tellurian virtual reality
products purchased by them and to repair and maintain Tellurian virtual reality
products purchased by existing and future customers of Tellurian as described in
paragraph 3. These consulting services will be provided by Xxxxxx for a period
of five years expiring on the close of business on August 7, 2003. In
consideration of the above referenced consulting services, including those
described in paragraph 3 herein, Tellurian agrees to pay Xxxxxx or his assignee
the following, (i) the sum of $70,000 to be paid within 10 days of the closing
of Tellurian's abovementioned public offering; (ii) the sum of $35,000 to be
paid on March 31, 1999; (iii) the sum of $35,000 to be paid on June 30, 1999;
and (iv) the sum of $35,000 to be paid on September 30, 1999. In the event
Xxxxxx fails to comply with the material terms and conditions of this Agreement,
Tellurian may terminate the payments. It is understood that although the
consulting fees are paid on an accelerated basis over the course of
approximately one year, the consulting period is for a term of five years from
the date of this Agreement until the close of business on August 7, 2003 and in
this respect, the payments are earned by Xxxxxx over the five year term of this
Agreement. In this respect, all paid but unearned payments are refundable to
Tellurian in the event that Xxxxxx breaches the material terms of this
Agreement. In the event that any uncontested payment is not made in accordance
with the aforesaid terms, Tellurian shall have fifteen days after the actual
receipt of notice to cure the default. In the event that the default remains
uncured for the aforesaid fifteen days, then the amount payable to Xxxxxx or his
assignee shall include a penalty of 1% of the principal amount due per day
commencing on the 16th day following actual receipt by Tellurian of notice.
6. The Swallows hereby grant Xxxxxxx Xxxx (or in the event of
his death, Xxxxxx Xxxxxx) an irrevocable transferable proxy to vote their
Tellurian Common Stock beneficially owned by them for the maximum period
permitted by Delaware Corporation Law. Such proxy shall terminate upon the
Swallows sale or other transfer of Tellurian Common Stock (solely as it applies
to the Tellurian shares that are sold or transferred, but not with respect to
their other Common Stock) in the event that paragraph 4 of this Agreement is
complied with.
7. Tellurian hereby grants limited licensing rights to the
Swallows intended to allow him to continue in the development and sale of
virtual reality products.
They are granted:
* The right to continue doing research using
the same principles of image generation that
Tellurian has been working on during
Ronald's tenure with Tellurian;
* The right to sell new systems and
replacement parts and services to existing
Tellurian customers (with the exception of
the customers listed on Schedule A;
* The right to use any terms (such as "Eagle")
which refer to the product and which are
within Tellurian's rights to use;
3
* The right to grant sublicenses of Tellurian
virtual reality products;
* The right to work for a company that has a
previously established position in the
virtual reality arena; and
* The right to enter partnerships and
corporations and raise capital in any manner
deemed appropriate by Xxxxxx provided such
arrangements acknowledge the ownership and
other rights of Tellurian as described
herein and Ronald's limited licensing rights
in any product or technology developed by
him.
Specifically excluded from these rights are:
* Any use of the Tellurian name except where
it is needed to identify Xxxxxx as in
"Xxxxxx Xxxxxxx, formerly of Tellurian,
Inc.";
* Any rights which Tellurian cannot grant,
such as, but not limited to, rights ceded to
Voyager and rights ceded to Fightertown USA;
* The right to sell the Tellurian technology
to a third party either on a cash or royalty
basis or to grant sublicenses without our
consent;
* The right to work for a new company or an
existing company that has no previous
experience in making and/or marketing
virtual reality products if such action can
reasonably be assumed to interfere with
Tellurian's right to own any virtual reality
developments made by Xxxxxx and to be
licensed to him;
* The right to make statements, whether verbal
or written, which can be construed to be
detrimental to Tellurian in its continued
endeavors; and
* The right of Xxxxxx to transfer any of the
specific rights granted hereunder for Xxxxxx
to any entity (including, without
limitation, an entity controlled by him)
without the consent of Tellurian except as
provided hereunder.
8. Tellurian will make inventory items available to Xxxxxx at
a price not exceeding 10% above original cost or less if management chooses to
lower the price for any reason. Xxxxxx will make any product or service which
Tellurian wishes to buy from
4
them available to Tellurian at 10% above documented cost or less if Xxxxxx
chooses to lower said price. Each party will treat orders from the other with
the same priority and same sequence for attention as any other orders received
from third-party customers.
9. Effective June 30, 1998, the Swallows hereby convert the
entire principal and accrued unpaid interest of the Note into 100,000 shares of
Tellurian's Common Stock. 50,000 shares shall be issued in the name of Xxxxxxx
Xxxxxxx and 50,000 shares shall be issued in the name of Xxxxxx Xxxxxxx. The
Swallows represent that they are the legal owner of the Note and that such Note
has not been sold or otherwise transferred or encumbered.
10. Xxxxxx hereby grants Xxxxx Xxxxxx an option to purchase
50,000 shares of Tellurian's Common Stock at an exercise price of $.10 per
share. Such option shall be exercisable at any time from the date hereof until
September 30, 1999. In consideration of the grant of such option, Xx. Xxxxxx has
agreed to pay Xxxxxx the sum of $.001 per share. A form of option between Xxxxxx
as seller and Xxxx as buyer is attached hereto as Exhibit B.
11. Xxxxxxx hereby grants Xxxxxxx Xxxx an option to purchase
50,000 shares of Tellurian's Common Stock at an exercise price of $.10 per
share. Such option shall be exercisable at any time from the date hereof until
September 30, 1999. In consideration of the grant of such option, Xx. Xxxx has
agreed to pay Xxxxxxx the sum of $.001 per share. A form of option between
Xxxxxxx as seller and Xxxx as buyer is attached hereto as Exhibit C.
12. Tellurian specifically acknowledges that Xxxxxx xxx assign
any or all of the payments due him under this agreement to a third party of his
choice. Tellurian agrees that upon receipt of an assignment form in form and
substance like the sample assignment included as Exhibit D of this agreement, it
will make payments to the party designated in that assignment. Further,
Tellurian acknowledges that the act of becoming an assignee under this agreement
shall not obligate the assignee to Tellurian in any way nor will Tellurian have
any rights of replevin against the assignee if Xxxxxx fails to comply with any
portion of this agreement. Tellurian may pursue any recovery action for payments
made to the assignee on behalf of Xxxxxx solely against Xxxxxx.
13. The parties have not made any representations or
warranties with respect to the subject matter hereof not set forth herein. This
Agreement, together with any instruments executed simultaneously hereof,
constitutes the entire agreement between the parties with respect to the subject
matter hereof. All understandings and agreements heretofore had between the
parties with respect to the subject matter hereof are merged in this Agreement,
which fully and completely expresses their agreement.
14. This Agreement may not be changed, modified, extended,
terminated or discharged orally, but only by an agreement in writing, which is
signed by all of the parties to this Agreement.
15. The parties agree to execute any and all such other and
further
5
instruments and documents, and to take any and all such further actions
reasonably required to effectuate this Agreement and the intent and purposes
hereof.
16. All notices or other communications required or permitted
hereunder shall be in writing and shall be mailed by Registered or Certified
Mail, Return Receipt Requested, postage prepaid, as follows:
To Powers: To the Address listed at the beginning of
this Agreement.
To the Company: To the address listed at the beginning of
this Agreement
Copy to: Xxxxxx Xxxxx P.C.
000 Xxxxx Xxxx Xxxx., Xxxxx 000
Xxxxx Xxxx, XX 00000
or in each case to such other address as shall have last been furnished by like
notice. If mailing by Registered or Certified Mail is impossible due to an
absence of postal service, notice shall be in writing and personally delivered
to the aforesaid address. Each notice or communication shall be deemed to have
been given as of the date so mailed or delivered, as the case may be.
17. This Agreement shall be construed and enforced in
accordance with the internal laws of the State of New Jersey, without giving
effect to the principles of conflicts of law.
18. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their heirs, executors, administrators,
personal representatives and successor.
IN WITNESS WHEREOF, the undersigned has executed this
Agreement this 11th day of August, 1998.
/S/ Xxxxxx Xxxxxxx
----------------------
XXXXXX XXXXXXX
/S/ Xxxxxxx Xxxxxxx
----------------------
XXXXXXX XXXXXXX
TELLURIAN, INC.
By: /S/ Xxxxxx Xxxxxx
----------------------
Xxxxxx Xxxxxx, President
6
On the Stationery of Tellurian, Inc.
SECTION 7
SCHEDULE A
The following is a listing of Tellurian customers which meet the criteria of
this agreement, as relating to Section 7.
Voyager Graphics
Voyager Simulation
Ship Analytics
AST
ATC
ATS
Xxxxx Xxxxxx
Servos & Simulation
Xxx Xxxxx
Xxxx Curelasian, "Virtual Warehousing"
SimCom
Xxxxxx
7
EXHIBIT B
OPTION TO PURCHASE COMMON STOCK
AGREEMENT made as of the 11th day of August, 1998 between Xxxxxx
Xxxxxxx, residing at 00 Xxxxx Xxxxx, Xxxxxx, Xxx Xxxxxx 000000 ("Seller") and
Xxxxx Xxxxxx residing at 0 Xxxxxxxx Xxxx, Xxxxxx Xxx, Xxx Xxxx ("Buyer").
W I T N E S S E T H:
WHEREAS, Seller desires to grant Buyer an option to purchase 50,000
shares of Common Stock of Tellurian, Inc. ("Tellurian") from his personal
holdings (the "Common Stock"); and
WHEREAS, Buyer desires to purchase an option to purchase said 50,000
shares of Tellurian's Common Stock.
NOW, THEREFORE, it is agreed to as follows:
1. Grant of Option. In consideration of the sum of $50 (equal to $.001)
per exercisable share) to be paid within five (5) days from the date hereof,
Seller grants to Buyer the option to purchase 50,000 shares of Common Stock of
Tellurian from his personal holdings. This option may be exercised in whole or
in part and from time-to-time during the exercise period of this option.
Simultaneous with receipt of the $50 referred to above, Seller will deliver to
Xxxxxx Xxxxx P.C., as Escrow Agent, the Common Stock together with properly
executed stock powers with signature guaranteed by a commercial bank or a member
of the New York Stock Exchange, to be held in escrow by Xxxxxx Xxxxx P.C. This
option granted to Buyer shall be protected against dilution of the interest
represented by the underlying shares of Common Stock to the same extent as
Seller is protected against dilution.
2. Purchase Price. The purchase price of the stock is $.10 per share
(or an aggregate of $5,000 in the event this option is exercised in full)
payable by certified check, bank check or money order made payable to the Seller
at the time provided in paragraph 4.
3. Exercise of Option. The option must be exercised by the Buyer on or
before September 30, 1999, by notice in writing, mailed on or before such date
by registered or certified mail, return receipt requested, postage prepaid, to
Seller at the address indicated herein, with a copy to Xxxxxx Xxxxx P.C. Notice
shall be deemed given and the option exercised on the date on which the notice
is mailed to Seller or sent by facsimile transmission, as provided below. Notice
of exercise of option shall also be deemed proper if sent for delivery via
overnight courier service (i.e. Federal Express, UPS, Express Mail) with payment
of the purchase price made to Xxxxxx Xxxxx P.C., as provided in paragraph 4.
4.Completion of Sale. Contemporaneously with the giving of notice of the
8
exercise of the option, Buyer shall deliver to Escrow Agent the purchase price.
Seller hereby authorizes Xxxxxx Xxxxx P.C. to release the stock and stock powers
from escrow and to deliver same to Buyer upon the mailing of the purchase price
by Xxxxxx Xxxxx P.C. to Seller by registered or certified mail, return receipt
requested, postage prepaid, to Seller's address as indicated herein.
5. Failure to Exercise Option or Complete Sale. If Buyer fails to
exercise its option in accordance with paragraph 3, Xxxxxx Xxxxx P.C. shall
immediately return the stock certificates and stock powers to the Buyer upon the
expiration of such option.
6. Notice. Except as otherwise provided herein, all notices required to
be given to any party to this Agreement shall be given to the parties at the
addresses and fax numbers specified herein, or such other addresses and fax
numbers as the party may notify the other party in writing.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the date first above written.
SELLER: BUYER:
/S/ Xxxxxx Xxxxxxx /S/ Xxxxx Xxxxxx
---------------------- ---------------------------
XXXXXX XXXXXXX XXXXX XXXXXX
---------------------- ---------------------------
Fax No. Fax No.
9
EXHIBIT C
OPTION TO PURCHASE COMMON STOCK
AGREEMENT made as of the 11th day of August, 1998 between Xxxxxxx
Xxxxxxx, residing at 000 X. Xxxxxxx Xxxxxx, Xxxxxxxxxxx, Xxxxx Xxxxxxxx 00000
("Seller") and Xxxxxxx Xxxx residing at 000 X, Xxxxx 00 Xxxxx, Xxxxxx, Xxx
Xxxxxx 00000 ("Buyer").
W I T N E S S E T H:
WHEREAS, Seller desires to grant Buyer an option to purchase 50,000
shares of Common Stock of Tellurian, Inc. ("Tellurian") from his personal
holdings (the "Common Stock"); and
WHEREAS, Buyer desires to purchase an option to purchase said 50,000
shares of Tellurian's Common Stock.
NOW, THEREFORE, it is agreed to as follows:
1. Grant of Option. In consideration of the sum of $50 (equal to $.001)
per exercisable share) to be paid within five (5) days from the date hereof,
Seller grants to Buyer the option to purchase 50,000 shares of Common Stock of
Tellurian from his personal holdings. This option may be exercised in whole or
in part and from time-to-time during the exercise period of this option.
Simultaneous with receipt of the $50 referred to above, Seller will deliver to
Xxxxxx Xxxxx P.C., as Escrow Agent, the Common Stock together with properly
executed stock powers with signature guaranteed by a commercial bank or a member
of the New York Stock Exchange, to be held in escrow by Xxxxxx Xxxxx P.C. This
option granted to Buyer shall be protected against dilution of the interest
represented by the underlying shares of Common Stock to the same extent as
Seller is protected against dilution.
2. Purchase Price. The purchase price of the stock is $.10 per share
(or an aggregate of $5,000 in the event this option is exercised in full)
payable by certified check, bank check or money order made payable to the Seller
at the time provided in paragraph 4.
3. Exercise of Option. The option must be exercised by the Buyer on or
before September 30, 1999, by notice in writing, mailed on or before such date
by registered or certified mail, return receipt requested, postage prepaid, to
Seller at the address indicated herein, with a copy to Xxxxxx Xxxxx P.C. Notice
shall be deemed given and the option exercised on the date on which the notice
is mailed to Seller or sent by facsimile transmission, as provided below. Notice
of exercise of option shall also be deemed proper if sent for delivery via
overnight courier service (i.e. Federal Express, UPS or Express Mail) with
payment of the purchase price made to Xxxxxx Xxxxx P.C., as provided in
paragraph 4.
10
4. Completion of Sale. Contemporaneously with the giving of notice of
the exercise of the option, Buyer shall deliver to Escrow Agent the purchase
price. Seller hereby authorizes Xxxxxx Xxxxx P.C. to release the stock and stock
powers from escrow and to deliver same to Buyer upon the mailing of the purchase
price by Xxxxxx Xxxxx P.C. to Seller by registered or certified mail, return
receipt requested, postage prepaid, to Seller's address as indicated herein.
5. Failure to Exercise Option or Complete Sale. If Buyer fails to
exercise its option in accordance with paragraph 3, Xxxxxx Xxxxx P.C. shall
immediately return the stock certificates and stock powers to the Buyer upon the
expiration of such option.
6. Notice. Except as otherwise provided herein, all notices required to
be given to any party to this Agreement shall be given to the parties at the
addresses and fax numbers specified herein, or such other addresses and fax
numbers as the party may notify the other party in writing.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the date first above written.
SELLER: BUYER:
/S/ Xxxxxxx Xxxxxxx /S/ Xxxxxxx Xxxx
---------------------- --------------------
XXXXXXX XXXXXXX XXXXXXX XXXX
000-000-0000 000-000-0000
---------------------- --------------------
Fax No. Fax No.
11
EXHIBIT D
FORM
OF
IRREVOCABLE ASSIGNMENT
OF
COLLECTION RIGHTS
--------------------------------------------------------------------------------
Xxxxxx Xxxxxxx and Xxxxxxx Xxxxxxx, both being parties known to
Tellurian, Inc., do hereby direct Tellurian, Inc. to make any and all payments
due to Xxxxxx Xxxxxxx (by virtue of paragraph 5 of the August 11, 1998 document
entitled "AGREEMENT") to the benefit and attention of Xxxxxxx Xxxxxxx. Said
payments shall be made payable to Xxxxxxx Xxxxxxx and mailed to him at the
following address: 000 X. Xxxxxxx Xxxxxx, Xxxxxxxxxxx, Xxxxx Xxxxxxxx 00000.
This Agreement shall remain in full force and effect unless revoked in
writing by both Xxxxxxx Xxxxxxx and Xxxxxx Xxxxxxx and acknowledged in writing
by a duly authorized representative of Tellurian, Inc.
Dated: August 11, 1998
-------------------------
Xxxxxxx Xxxxxxx
-------------------------
Xxxxxx Xxxxxxx
12
