EXHIBIT 10.38
AGREEMENT
THIS AGREEMENT ("Agreement") is entered into and effective as of August
17, 1998, between LifeRate Systems, Inc., a Minnesota corporation (the
"Company"), and Xxxxxxx X. Xxxxxxx ("Xxxxxxx").
RECITALS:
A. The Company and Chorske entered into an Employment Agreement, dated
April 29, 1996 (the "Employment Agreement"), pursuant to which Chorske was
employed as the Chief Executive Officer and President of the Company from May 1,
1996 through April 30, 1997.
B. The Company is obligated to pay Xx. Xxxxxxx a cash bonus of $150,000
pursuant to Section 5(c) of the Employment Agreement.
C. Due to the Company's financial condition and limited cash resources,
the Company desires to provide for payment of the Company's $150,000 obligation
in accordance with the terms and conditions of this Agreement.
Accordingly, the parties hereby agree as follows:
1. Cash Payment. The Company shall pay Chorske the sum of $75,000 in equal
quarterly installments of $18,750 in April 1998, July 1998, October 1998 and
January 1999. Chorske acknowledges receipt of the first two installments of
$18,750.
2. Restricted Stock Grant. The Company shall xxxxx Xxxxxxx an aggregate of
200,000 shares of Common Stock (the "Restricted Shares"), which have a market
value on the date this Agreement was approved by the Company's Board of
Directors (based on the closing bid price of the Common Stock on the business
day immediately preceding such date) equal to $75,000. The Company and Chorske
shall enter into a restricted stock agreement in the form attached hereto as
Exhibit A evidencing the terms and conditions of the grant of the Restricted
Share. The Restricted Shares shall be subject to restrictions and forfeiture in
the event that the Company does not achieve certain milestones as set forth in
Exhibit A.
3. Representations and Warranties. Chorske represents and warrants to the
Company as follows:
(a) The Restricted Shares are being acquired for investment for his
own account and not with the view to, or for resale in connection with,
any distribution or public offering thereof. Chorske understands that the
Restricted Shares have not been registered under the Securities Act of
1933, as amended (the "Securities Act"), or any state securities laws by
reason of their contemplated issuance in transactions exempt from the
registration requirements of the Securities Act and applicable state
securities laws and that the reliance of the Company upon these exemptions
is predicated in part upon this representation by Chorske. Chorske further
understands that the Restricted Shares may not be transferred or resold
without registration under the Securities Act and any applicable state
securities laws, or an exemption from the requirements of the Securities
Act and applicable state securities laws.
(b) Chorske is a resident of the State of New Hampshire and
qualifies as an "accredited investor," as defined in Rule 501 of
Regulation D under the Securities Act. Chorske acknowledges that the
Company has made available to him at a reasonable time prior to the
execution of this Agreement the opportunity to ask questions and receive
answers concerning the business, operations and financial condition of the
Company and to obtain any additional information (which the Company
possesses or can acquire without unreasonable effort or expense) as may be
necessary to verify the accuracy of information furnished to such
Investor. Chorske is able to bear the loss of his entire investment in the
Restricted Shares without any material adverse affect on his personal
financial condition, and has such knowledge and experience of financial
and business matters that he is capable of evaluating the merits and risks
of the acquisition of the Restricted Shares.
4. Full Satisfaction. Chorske acknowledges and agrees that upon payment of
the cash described in Section 1 and the grant of Restricted Shares described in
Section 2, the Company shall have satisfied all of its obligations pursuant to
Section 5(c) of the Employment Agreement, and the Company shall have no further
liability or obligation to Chorske under Section 5(c) of the Employment
Agreement.
5. Binding Effect. This Agreement shall be binding upon the heirs,
executors, administrators and successors of the parties hereto.
6. Governing Law. This Agreement and all rights and obligations hereunder
shall be construed in accordance with and governed by the laws of the State of
Minnesota.
7. Entire Agreement. This Agreement, including Exhibit A hereto,
supercedes all previous and contemporaneous oral negotiations, commitments,
writings and understandings among the parties hereto concerning the matters in
this Agreement.
8. Counterparts. This Agreement may be executed in two or more
counterparts, each of which will constitute an original, but all of which, when
taken together, will constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
effective as of the date first written above.
LIFERATE SYSTEMS, INC.
By: /s/ Xxxxx X. Xxxxxxx
-------------------------------------
Xxxxx X. Xxxxxxx
President and Chief Executive Officer
/s/ Xxxxxxx X. Xxxxxxx
-------------------------------------
Xxxxxxx X. Xxxxxxx
