EXHIBIT 10.1
January 5, 2000
EduLink, Inc.
000 Xxxxx Xxxxxxx Xxxxx
Xxxxx 000
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx Xxxxxxxxx, Chief Executive Officer
Re: Agreement by and between EduLink, Inc. and
Saatchi & Saatchi North America, Inc.
Dated as of July 1,1997 (the "Agreement")
This letter agreement will serve to memorialize the agreement between you
and us in connection with the above-referenced Agreement. Capitalized items not
otherwise defined herein shall have the meaning given them in the Agreement.
Based on the foregoing, the parties agree as follows:
1. Background.
1.1 EduLink, Inc. ("EduLink") engaged Saatchi & Saatchi North America,
Inc. ("SSNA"), the Saatchi Entertainment Group, a division of SSNA,
Darwin Digital, a division of SSNA, and certain other affiliates of
SSNA (collectively "Saatchi") to render certain Services under
the Agreement.
1.2 Saatchi claims that as of the date hereof, Phase I of the Agreement
has been completed and that Saatchi has fully performed the Services
in accordance with the terms of the Agreement. EduLink disputes such
claims.
1.3 Saatchi claims that EduLink owes Saatchi in excess of $1,500,000,
inclusive of a debt owed to Saatchi by EduLink evidenced by a
Promissory Note dated December 31,1997 (the "December Note"). EduLink
disputes such claims.
January 5, 2000
Page 2.
1.4 EduLink is diligently seeking financing of $9,500,000 pursuant to
various private placements (herein called "Financing Activities") and
intends to complete such financing within one year of this letter
agreement.
2. The parties desire to resolve each and all of their disputes and claims
against the other and accordingly agree that:
2.1 The Agreement shall be terminated, effective on the date hereof, and
Saatchi shall have no further obligations to render Services
thereunder;
2.2 Subject to the full and prompt performance by EduLink of all of its
obligations set forth in this letter agreement, the parties mutually
agree that the amount owed to Saatchi for the Services performed
pursuant to the Agreement as of the date hereof is $1,000,000 (the
"Agreed Sum"), inclusive of a debt owed to Saatchi by EduLink
evidenced by the December Note, which December Note shall be cancelled
upon prompt payment in full by EduLink of the Agreed Sum in accordance
with the terms of this letter agreement. In the event that EduLink
fails to promptly perform any of its obligations hereunder (as to
which, time shall be of the essence), then the December Note shall
remain in effect, not be cancelled and shall survive and not be
affected by the general release set forth in Sections 5.1 and 5.2
hereof; but EduLink shall receive as a credit toward the payment of
such December Note all payments actually made hereunder.
2.3 EduLink agrees to pay Saatchi by check made payable to "Saatchi &
Saatchi North America, Inc." fifteen percent (15%) of any Net
Financing Proceeds received by EduLink, pursuant to its Financing
Activities until Saatchi has been paid the Agreed Sum in Full. "Net
Financing Proceeds" shall mean the gross sums received by EduLink from
its Financing Activities, less aggregate commissions of up to five
percent (5%) of such gross sums paid or retained by brokers,
investment bankers and other third parties. Such percentage of Net
Financing Proceeds payable to Saatchi hereunder shall be remitted to
Saatchi within fifteen (15) business days following the end of each
calendar month in which such Net Financing Proceeds are received by
EduLink, together with appropriate accountings.
2.4 To the extent Saatchi has received less than $100,000 pursuant to
Section 2.3 above by January 10, 2000, EduLink shall pay Saatchi the
difference
January 5, 2000
Page 3.
between $100,000 and the sums actually paid to Saatchi by EduLink
pursuant to Section 2.3 above as of January 10, 2000.
2.5 To the extent Saatchi has received less than 400,000 in the aggregate
pursuant to Sections 2.3 and 2.4 above by April 30, 2000, EduLink
shall pay Saatchi the difference between $400,000 and the sums
actually paid to Saatchi by EduLink pursuant to Sections 2.3 and 2.4
above as of April 30, 2000.
2.6 To the extent Saatchi has received less than $600,000 in the aggregate
pursuant to sections 2.3, 2.4 and 2.5 above by December 31, 2000,
EduLink shall pay Saatchi the difference between $600,000 and the sums
actually paid to Saatchi by EduLink pursuant to Sections 2.3, 2.4 and
2.5 above as of December 31, 2000.
2.7 To the extent Saatchi has received less than $1,000,000 (plus any
accrued interest pursuant to Section 2.8 below) in the aggregate
pursuant to Sections 2.3, 2.4, 2.5 and 2.6 above by December 31, 2001,
EduLink shall pay Saatchi the difference between $1,000,000 (plus any
such accrued interest) and the sums actually paid to Saatchi by
EduLink pursuant to Sections 2.3, 2.4, 2.5 and 2.6 above as of
December 31, 2001.
2.8 Notwithstanding the foregoing to the contrary, if but only if Saatchi
has not been paid the Agreed Sum by December 31, 2000, then commencing
as of January 1, 2000, interest shall accrue on the unpaid balance of
the Agreed Sum, computed at the end of each calendar quarter, at an
interest rate of prime plus one percent (1%), as such prime rate is
established by Chase Manhattan Bank at the commencement of each
applicable calendar quarter.
2.9 The parties mutually agree that in lieu of the shares of EduLink's
Common Stock and the Warrants granting the Holder the right to
purchase EduLink's Common Stock issuable to Saatchi pursuant to the
terms of Section 8 of the Agreement, EduLink shall issue and Saatchi
shall accept, 100,000 shares of EduLink's Common Stock. Within sixty
(60) days of the date of this letter agreement, EduLink shall deliver
to Saatchi stock certificate(s) representing such 100,000 shares of
EduLink's Common Stock.
January 5, 2000
Page 4.
3. Content.
3.1 All materials delivered to Saatchi on EduLink's behalf by teachers
from the Redondo Beach and Berryessa School Districts, other than the
materials described in Sections 3.2.1, 3.2.2 and 3.2.3 below, shall be
delivered to EduLink by Saatchi within ten (10) days following the
date of this letter agreement, including without limitation:
3.1.1 Seventeen mathematics lesson plans (Redondo Beach);
3.1.2 Twenty-three history lesson plans for Unit 8 (Berryessa);
3.1.3 Seven science lesson plans;
3.1.4 Information on a conceptual library (Berryessa).
3.2 Work Product: All work product resulting from services rendered by
Saatchi under the Agreement shall be delivered to EduLink by Saatchi
within ten (10) days following the date of this letter agreement. Such
work product shall include, without limitation:
3.2.1 One mathematics lesson plan based upon material provided by
Redondo Beach School District teachers, as refined by Saatchi,
inclusive of graphic user interfaces;
3.2.2 Seven history lesson plans based upon material provided by
Berryessa School District teachers, as refined by Saatchi,
inclusive of graphic user interfaces;
3.2.3 One science lesson plan based upon material provided by Redondo
Beach School District teachers, as refined by Saatchi;
3.2.4 All completed and/or rough screens developed for the teacher,
parent, student and school desktops within the so-called
schoolhouse shell;
3.2.5 The files for the following three sites, each to be transferred
via CD-ROM: xxx.xxxxxxxxxxxxx.xxx/xxxxx000:
xxx.xxxxxxxxxxxxx.xxx/xxxxxxxxxxxxxxxx/xxxx0;
xxx.xxxx.xxx/xxxxxxx.
January 5, 2000
Page 5.
3.2.6 Any and all data relating to market research conducted on
EduLink's behalf;
3.2.7 Any licenses or rights obtained by Saatchi to utilize and
exploit material included in the items set forth in Sections
3.2.1 through 3.2.6 above.
4. Rights.
4.1 Saatchi hereby assigns to EduLink all of its right, title and interest
in and to the content described in Section 3.1 above.
4.2 Saatchi hereby grants to EduLink an exclusive license to use and
exploit, in any and all media, all of Saatchi's right, title and
interest, if any, in and to the content described in Section 3.2
above. The term of such license shall expire on December 31, 2001.
4.3 Upon the expiration of the license described in Section 4.2 above, if
Saatchi has then received the Agreed Sum from EduLink, all of
Saatchi's right, title and interest, if any, in and to the content
described in Section 3.2 above shall be the sole and exclusive
property of EduLink and Saatchi shall have no claims to such property
whatsoever; if, however, upon the expiration of the license described
in Section 4.2 above, Saatchi has not received the Agreed Sum from
EduLink, then EduLink shall: return all of such content to Saatchi;
refrain from utilizing or exploiting in any manner any of such
content; forfeit any claim to ownership of such content; and execute
and deliver to Saatchi such investments and provide such other
information which may be necessary or helpful in Saatchi's opinion in
obtaining, maintaining and enforcing copyrights and other intellectual
property rights relating to such content and/or effectuating the
ownership and enjoyment by Saatchi thereof.
5. Release.
5.1 General Release. Except with respect to breaches of or obligations
created by this letter agreement, which obligations shall survive this
Release to the extent contemplated by this letter agreement, EduLink,
on the one hand,
January 5, 2000
Page 6.
and Saatchi, on the other hand, each hereby forever fully and finally
release, acquit and discharge the other from any and all claims,
demands, costs, losses, damages, liabilities, obligations, actions,
causes of action, lawsuits and expenses (including, without
limitation, all attorneys' fees and costs) of every type, kind and
character whatsoever, whether known or unknown, suspected or
unsuspected, however arising, including without limitation, by reason
of the Agreement.
5.2 Section 1542 Waiver. This Release is not to be construed as an
admission by either party of the validity of any unlawful or wrongful
conduct or of any liability, or lack thereof, to the other party, all
of which is expressly denied. The parties intend that this Release
shall be effective as a full and final accord and satisfaction and
release of each and every released matter. In furtherance of this
intention, they acknowledge that they are familiar with Section 1512
of the Civil Code of the state of California, which provides as
follows:
A general release does not extend to claims which the creditor
does not know or suspect to exist in his favor at the time of
executing the release, which if known by him must have
materially affected his settlement with the debtor.
The parties waive and relinquish to the fullest possible extent every
right or benefit which they have or may have under Section 1542 and
under any similar or analogous law of any other applicable
jurisdiction with regard to the subject matter of this Release. The
parties acknowledge that they are aware they may hereafter discover
facts in addition to or different from those which they now know or
believe to be true with respect to the subject matter of this Release.
Nevertheless, they intend fully, finally and forever, to settle and
release all released matters, known or unknown, suspected or
unsuspected, which now exist, heretofore existed, or may arise
hereafter based on existing facts and circumstances. In furtherance of
this intention, the releases given in this Release shall be in, and
shall remain in, effect as full and complete releases, notwithstanding
the discovery or existence of any additional or different facts.
5.3 No Assignments. Each party warrants and represents that it has not
previously assigned or transferred or purported to assign or transfer
to any third party any claims or other rights released hereunder.
January 5, 2000
Page 7.
Please confirm your acceptance and agreement to the foregoing by signing in
the indicated space below.
Very truly yours,
SAATCHI & SAATCHI NORTH AMERICA, INC.
By: ________________________________
Name: ______________________________
Title: _____________________________
ACCEPTED AND AGREED:
EDULINK, INC.
By: _________________________________
Name: _______________________________
Title: ______________________________
EXHIBIT 10.2
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT made as of this 4th day of September, 1999, by and
between Xxxxxxx Xxxxxxxxx, an individual residing at 00 Xxxxxxxxx Xxxxxx,
Xxxxxx, Xxxxxxxxxx 00000 ("Executive") and EDULINK, INC., a California
corporation with its principal offices at 000 Xxxxx Xxxxxxx Xxxxx, Xxxxxxx
Xxxxx, Xxxxxxxxxx 00000 (the "Company").
WITNESSETH:
WHEREAS the Company is engaged in the design, development, production and
marketing of an internet-based interactive educational system designed for
institutional and individual and users; and
WHEREAS Executive has, since the inception of the Company in 1996, served as
its Chief Executive Officer and the Company recognizes the value of his services
which are of a specific, unique and extraordinary character and therefor
requires the continued services of Executive as its Chief Executive Officer for
a specified period of time; and
WHEREAS the Company believes that the establishment and maintenance of sound
and vital management of the Company is essential to the protection and
enhancement of the interests of the Company and its stockholders and, in order
to secure such protection, desires to obtain the contractual commitment of
certain of its executive officers, including the Executive, to render their
services to the Company for a specific period of time; and
WHEREAS for the foregoing reasons, the Company desires to employ the
Executive as its Chief Executive Officer, and Executive is desirous of being so
employed, all on and subject to the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants herein and other
good and valuable consideration, the receipt and sufficiency of which are hereby
unconditionally acknowledged, the parties hereto do hereby agree as follows:
1. Employment. During the Term (as hereinafter defined) of this Agreement,
the Company hereby employs Executive as its Chief Executive Officer, upon and
subject to the terms and conditions set forth in this Agreement. Executive
hereby agrees to accept such employment, upon and subject to the terms and
conditions set forth in this Agreement, provided that Executive agrees that
Company intends to replace Executive with others to serve as its CEO and
Executive hereby consents to such action, provided that in such event Executive
shall be engaged by Company as its Senior Vice President - Business Development
and shall have the rights to the compensation and benefits set forth
hereinbelow. In addition, the Company shall, subject to Executive's consent,
cause Executive to be re-elected to the Company's Board of Directors during the
Term of this Agreement.
2. Executive's Duties and Responsibilities.
2.1 Executive will perform all of the services customarily associated with
the position of Chief Executive Officer during the Term of this Agreement,
subject to the policies established by and under the direction of the Board of
Directors of the Company, and subject to Executive's
1.
engagement as Senior Vice President, as set forth in Paragraph 1 above.
Executive also agrees to perform such other duties and responsibilities,
consistent with such position, as the Board of Directors may assign to him from
time to time during the Term hereof.
2.2 Executive agrees to devote that portion of his business time, attention
and energy which is reasonably required for him to perform his duties under this
Agreement during the Term hereof and Executive shall perform such duties
diligently, in good faith and in a manner consistent with the best interests of
the Company. Executive further agrees to use his best efforts at all times
during the Term hereof to preserve, protect, enhance, and maintain the trade,
business and goodwill of the Company.
2.3 Executive shall perform his services wherever his services are
reasonably required but principally at 000 Xxxxx Xxxxxxx Xxxxx, Xxxxxxx Xxxxx,
Xxxxxxxxxx 00000. Under no circumstances shall Executive, without his prior
written consent, be required to change the location of his current residence in
order to perform the services required of him under this Agreement (nor to
travel any distance which is significantly greater than the distance currently
traveled by the Executive to the Company's offices). The Company shall furnish
Executive with a private office, stenographic help and such other facilities,
services and staff as are suitable to his position and necessary and adequate
for the performance of his services under this Agreement.
3. Term.
3.1 The term of this Agreement shall commence as of September ____, 1999 and
shall expire on December 31, 2004, subject to earlier termination as hereinafter
provided in paragraph 3.2 hereof (the "Term").
3.2 Pursuant to the provisions of Paragraph 3.1 above, the Term of this
Agreement shall terminate on the earlier to occur of any of the following
events:
(a) The death of Executive;
(b) The Permanent Disability (hereinafter defined) of Executive as
provided in Paragraph 7 hereof;
(c) Any repeated breach of trust or other repeated action by which
Executive obtains material personal gain at the expense or to the detriment of
the Company;
(d) The failure of Executive to perform the customary duties of his
position, provided that Executive is furnished with notice of such breach from
the Company (with Executive not participating or voting with respect to any such
notice if Executive is a director of the Company) and Executive fails to cure
any such breach within thirty (30) days of such notice;
(e) A conviction of the Executive for any felony or of any other crime
involving moral turpitude;
(f) The delivery of notice to the Company by the Executive, or to the
Executive to the Company, as the case may be, of the termination of this
Agreement for any breach or default by the Company or the Executive, as the case
may be, of any of their respective representations, warranties, obligations or
covenants under this Agreement, provided that any such breach or default is not
cured within thirty (30) days after such notice from Executive or the Company,
as the case may be.
2.
(g) The entry by a court of competent jurisdiction of a decree or order
for relief in respect of the Company in a voluntary case under any applicable
bankruptcy, insolvency, or similar law then in effect or the appointment of a
receiver, liquidator, assignee, custodian, trustee, or sequestrator of the
Company or for any substantial part of its property or an order by any such
court for the wind-up or liquidation of the Company's affairs; or a petition
initiating an involuntary case under any such bankruptcy, insolvency, or similar
law is filed against the Company and remains pending for sixty (60) days without
a stay or dismissal; or the Company commences a voluntary case under any such
bankruptcy, insolvency, or similar law then in effect, or makes any general
assignment for the benefit of its creditors or takes action in furtherance of
any of the foregoing; or
4. Compensation. In consideration of the performance by Executive of his
services under this Agreement during the Term hereof, the Company shall pay
Executive the following compensation:
(a) During the first year of the Term hereof, a salary of Fourteen
Thousand Four Hundred Dollars ($14,400) plus reimbursement of expenses
previously advanced by Executive on Company's behalf equal to One Hundred Thirty
Five Thousand Six Hundred Dollars ($135,600) ("Prior Expenses"); and during each
additional year of the Term hereof, a salary of One Hundred Fifty Thousand
Dollars ($150,000). Such salary (plus such Prior Expenses with respect to the
first year of the Term) is herein called the "Base Salary" and shall be paid to
Executive in equal monthly installments, in arrears, on the first day of each
month during the Term hereof.
(b) The Company shall also pay Executive, in addition to the Base Salary,
the following incentive compensation in each calendar year during the Term
hereof (except for the calendar year ended December 31, 1999): The greater of
ten percent (10%) of the Net Pre-Tax Profits (hereinafter defined) of the
Company or ten percent (10%) of the Net Cash Flow (hereinafter defined) of the
Company (the "Bonus"). Notwithstanding the foregoing or any other provision of
this Agreement to the contrary, the maximum bonus payable to Executive in any
specific calendar year shall not exceed an amount equal to twice Executive's
Base Salary during the calendar years ending December 31, 2000 and 2001 and
three times such base salary during the calendar years, 2002, 2003 and 2004.
For purposes hereof, "Net Pre-Tax Profits" shall mean the net pre-tax income
of the Company and "Net Cash Flow" shall mean the net pre-tax cash flow of the
Company, in each calendar year during the Term hereof, as determined by the
Company's certified public accountants, at the Company's expense, applying
generally accepted accounting principles consistently applied during each
period. In determining Net Pre-Tax Profits and Net Cash Flow, the Company's
accountants shall not consider losses incurred in any prior calendar year and
shall add to the net calculations of each of such items, any compensation or
similar expense incurred or recognized by the Company in connection with the
issuance of securities of the Company for purchase prices which are less than,
or warrants, options or other convertible securities which are exercisable at
prices below, fair market value.
(c) The Bonus shall be payable to Executive within thirty (30) days
following the completion of the audited or unaudited financial statements of the
Company for each such calendar year during the Term of this Agreement, but in
any event, not later than April 1 of each such year (or within ten (10) days
after the final resolution of any disagreement with respect to the calculation
of Net Pre-Tax Profits or Net Cash Flow pursuant to the terms of subparagraph
(d) below). In the event of any termination of this Agreement prior to the
expiration of the Term hereof, the Company shall pay Executive (or his estate in
the case of any earlier termination due to Executive's death) the Bonus in a
pro-rated amount based upon Net Pre-Tax Profits and Net Cash Flow for the number
of days in any such calendar year in which any such termination occurs, such
payment to be made sixty (60) days after any such termination (unless such
termination results from an occurrence under Paragraphs 3.2(c), 3.2(d), 3.2(e),
3.2(f), but only in the event of a termination by the Company thereunder, or
3.2(g), in which case,
3.
notwithstanding any provision of this Agreement to the contrary, the Company
shall have no obligation to make any Bonus payment to Executive).
Notwithstanding the foregoing, the minimum, Bonus shall be paid semi-annually on
June 1 and December 31 of each such calendar year.
(d) The Company shall deliver to Executive with each Bonus payment during
the Term hereof (other than all minimum Bonus payments), a report setting forth
the calculation of Net Pre-Tax Profits and Net Cash Flow. Unless Executive
notifies the Company within fifteen (15) business days after receipt of said
calculations of his disagreement therewith (which notice shall state with
reasonable specificity the reasons for any such disagreement and the amounts in
dispute), said calculations will be final, binding and conclusive on Executive.
If there is a disagreement, and the disagreement cannot be resolved by the
Company and the Executive within sixty (60) days following the delivery of such
calculations, the items in dispute may be submitted by either the Company or the
Executive to the Company's then independent auditors (with a copy being
furnished to the other party). After affording each of the Company and the
Executive the opportunity to present their respective positions (which
opportunity shall not extend for more than ten (10) business days following the
submission of such disputed items to such auditors), the independent auditors
shall determine what, if any, changes are required in the calculations, and such
determination shall be final, binding and conclusive on the Company and the
Executive. The fees, costs and expenses of such independent auditing firm shall
be allocated between the Company and the Executive as follows:
(1) If the Company or Executive submits such calculations to such
independent auditors and the auditors confirm that calculations of Net Pre-Tax
Profits and Net Cash Flow (within 5% thereof, plus or minus), the party which
submitted such calculations to such auditors will pay all of the costs therefor;
or
(2) If the Company or Executive submits such calculations to such
independent auditors and the auditors determine that the calculation of Net
Pre-Tax Profits was understated by more than 5%, then the Company will pay all
of the costs therefor; or
(3) If the Company or Executive submits such calculations to such
independent auditors and the auditors determine that the calculation of Net
Pre-Tax Profits and Net Cash Flow was overstated by more than 5%, the Executive
will pay all of the costs therefor.
(e) Executive shall have the right, at Executive's sole expense, upon
reasonable advance notice and during normal business hours at the Company's
offices, to examine and copy the books and records of the Company relating to
Net Pre-Tax Profits and Net Cash Flow. Executive hereby acknowledges and agrees
that any non-published documentation or other information obtained by him in the
course of any such examination shall be subject to the provisions of Paragraph 8
hereof.
(f) The Company shall, in addition to the Base Salary and the Bonus,
reimburse Executive for all ordinary and necessary out-of-pocket expenses
incurred by him in the performance of his services under this Agreement, subject
to and upon receipt by the Company of invoices or other documentation in support
thereof. Such expenses for which Executive shall be entitled to reimbursement
shall include, but not be limited to, travel and entertainment expenses and
expenses incurred in connection with promoting the Company's business.
5. Executive Benefits. In addition to the Base Salary and the Bonus,
Executive shall receive the following benefits:
4.
5.1 Executive shall be entitled to four (4) weeks paid vacation and fifteen
(15) paid sick days during each year of the Term hereof. Executive shall take
such vacation at such times as will not unreasonably interfere with significant
activities of the Company and upon reasonable advance notice to the Company. Any
unused vacation shall be paid to Executive by the Company at the end of each
year of the Term hereof.
5.2 The Company shall pay for and maintain for Executive during the term
second and each subsequent year of the Term of this Agreement, disability
insurance providing for the payment to Executive of a minimum of sixty percent
(60%) of his Base Salary for any "disability" as defined in such disability
insurance policy. The Company shall also pay and maintain for Executive during
the Term hereof, major medical, hospitalization, dental and vision insurance
(which insurance will cover Executive and members of his immediate family). The
Company shall maintain such disability, medical, dental, and vision insurance in
effect, at the Company's cost, for a period of eighteen (18) months after the
expiration of this Agreement or the termination of this Agreement pursuant to
Paragraphs 3.2(b), 3.2(f) or 3.2(h) hereof. During the Term of this Agreement,
the Company may, at its election at any time during the Term hereof, obtain and
maintain at its cost, a key man life insurance policy on the Executive's life
with the Company as the beneficiary thereof and Executive will cooperate with
the Company and its insurer with respect thereto.
5.3 The Company grants to Executive the following number of options to
purchase one share of Company's Common Stock per option at an exercise price of
$.25 per share, provided that Executive shall not have the right to exercise
those options corresponding to the specific deliverables described below unless
and until such deliverables are completed on or before the corresponding
"outside completion date":
Number of Options Deliverable Outside Completion Date
----------------- ----------- -----------------------
50,000 Design Phase Elements
Described in Schedule A.
50,000 Build-Out Elements
Described in Schedule A.
50,000 Completion of Beta Test
described in Schedule A.
50,000 National Launch of 7th
and 8th Grade Service
Described in Schedule A.
The remaining terms and conditions applicable to such options, are described in
Schedule A-1, attached hereto.
5.4 The Company agrees that the exercise price of each of the 500,000
Options to purchase one (1) share of Company's Common Stock heretofore granted
to Executive shall be equal to $.25 per share (rather than $3.50 with respect to
the first 100,000 Options, $5.00 with respect to the next 200,000 Options, and
$7.00 with respect to the next 200,000 Options). The provision of this Paragraph
5.4 constitutes a material inducement for Executive to continue rendering
services to Company.
5.
5.5 The Company agrees that nothing contained in this Agreement is intended
to, or shall be deemed to be granted to the Executive in lieu of, or as a
limitation upon, any rights and privileges which the Executive may otherwise be
entitled to as an executive employee of the Company under any retirement,
pension, profit sharing, insurance, hospitalization or other employee benefit
plan of any type (including, without limitation, any incentive, profit sharing,
bonus or stock option plan), which may now be in effect or which may hereafter
be adopted by the Company, or any subsidiary of the Company, it being understood
that the Executive shall have the same rights and privileges to participate in
such Company (including its subsidiaries) benefit plans as any other officer or
executive employee of the Company or any of its subsidiaries.
6. Severance; Change of Control.
6.1 In the event that, upon the expiration of the Term hereof on December
31, 2004, this Agreement has not been renewed or Executive and the Company have
not entered into a successor employment agreement, the Company shall pay to
Executive on such date, in cash, a lump sum amount equal to Executive's then
Base Salary plus the bonus compensation payable to Executive for the calendar
year 2003, then multiplied by a factor of 1.5.
6.2 Omitted.
6.3 If, at any time after a Change in Control has occurred, the Company (or
any successor thereto) terminates this Agreement prior to the expiration of the
Term of this Agreement, Executive shall receive (1) his Base Salary, Bonus and
all fringe benefits provided for under Paragraph 5 hereof, including, without
limitation, all benefits and awards under the Company's stock option, stock
appreciation, restricted stock, stock bonus and similar plans and the Company's
pension and retirement plans and programs which are then in effect, accrued
through the date of any such termination; provided, however, that all of
Executive's vested stock options, stock appreciation rights, restricted stock
grants and stock bonuses and similar benefits shall be deemed to vest in full on
any such termination date, notwithstanding any provision to the contrary in any
applicable agreement or plan and (ii) a lump sum payment, in cash, on the date
of any such termination, in an amount equal to the then Base Salary of Executive
multiplied by a factor of 5.
6.4 For purposes hereof, a "Change in Control" shall mean and be deemed to
have occurred if: (I) any "person" or "group" (as such terms are used in
Sections 3(a)(9) and 13(d)(3) of the Securities Exchange Act of 1934, as amended
(the "Act"), except for an employee stock ownership trust (or any of the
trustees hereof), becomes a "beneficial owner" (as such term is used in Rule
13d-3 promulgated under the Act), after the date hereof, directly or indirectly,
of securities of the Company representing thirty percent (30%) or more of the
combined voting power of the Company's then outstanding securities; or (ii) the
majority of the Board of Directors, as such entire Board of Directors is
comprised as of the date hereof, no longer serve as directors of the Company,
except that there shall not be counted toward such majority who no longer serve
as directors any director who ceased to serve either prior to the date of a
Change in Control, for any reason, or at any other time due to voluntary
resignation, death, disability or termination for cause or any director who is
elected to the Board of Directors after the date hereof and who is approved by
Executive; or (iii) the shareholders of the Company approve a plan of
liquidation of the Company or an agreement for the sale or disposition by the
Company of all or substantially all of the Company's assets; or (iv) the
shareholders of the Company approve a merger of consolidation of the Company
with any other entity, other than a merger or consolidation which would result
in the combined voting power of the Company's voting securities outstanding
immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of the surviving
entity) more than fifty percent (50%) of the combined voting power of the voting
securities of the Company or such surviving entity outstanding immediately after
such merger or
6.
consolidation; or (v) any other event shall have occurred which constitutes
a change in ownership or effective control of the Company or in the ownership of
its assets; provided, however, that no Change in Control shall be deemed to have
occurred if any aforementioned plan of liquidation, sale of assets, merger or
consolidation is not consummated. Notwithstanding the foregoing, any transaction
involving a leveraged buyout or other acquisition of the Company which would
otherwise constitute a Change in Control, in which Executive participates in the
surviving or successor entity (other than solely as an employee or consultant),
shall not constitute a Change in Control.
7. Disability.
7.1 Subject to the terms of Paragraph 7.2 below, in the event Executive
suffers any illness, injury or other incapacity which causes him to become
temporarily disabled during the Term of this Agreement, he shall continue to
receive one hundred percent (100%) of the Base Salary, Bonus and all other
benefits to which he was entitled at the time he became so disabled for any
period of disability not in excess of six (6) consecutive calendar months, the
term "Permanent Disability" as used in this Agreement shall mean any disability
of Executive for a period in excess of six (6) consecutive calendar months. For
the purpose of this Paragraph, the terms "disabled" and "disability" shall mean
any physical or mental illness, injury or other incapacity which, in the opinion
of a doctor reasonably satisfactory to the Company and Executive, renders the
Executive unable to perform his duties hereunder. The date that any such
disability shall be deemed to have commenced shall be the date Executive first
absents himself from work during a continuous period of disability as so
determined by the doctor hereinabove set forth.
7.2 Upon any Permanent Disability, the Company may at any time thereafter
either reduce the Base Salary to be received by Executive to seventy-five
percent (75%) of the Base Salary at the time of any such Permanent Disability
(including all payments Executive may receive under any disability policy
maintained by the Company) or terminate this Agreement upon ninety (90) days
prior written notice to Executive. In the event of any such termination,
Executive shall be entitled to receive from the Company or from the Company's
disability carrier, disability compensation in an amount which shall, when added
to all social security benefits received by Executive as a result of the
Permanent Disability, equal Seventy Thousand Dollars ($70,000) per annum.
8. Confidentiality and Non-Disclosure Covenant.
8.1 During the Term of this Agreement, Executive hereby acknowledges that he
may obtain and be entrusted with unpublished material confidential and
proprietary information relating to the Company's present and proposed business
and operations, including, without limitation, financial information relating to
the Company's present and proposed business and proposed business and
operations, the cost and pricing of the Company's services, the sales and
marketing plans and strategies of the Company, proposed Company's accounts and
the terms of all material agreements to which the Company is a party. All of
such information that may be obtained by Executive shall, for purposes hereof,
be referred to as "Confidential Information." Executive hereby agrees that,
unless the Confidential Information becomes publicly known through legitimate
origin not involving any improper act or omission of Executive, neither he, nor
any entity or person owned or controlled directly or indirectly by him, shall,
during the Term of this Agreement or thereafter, use for his own benefit or for
the benefit of others for any purpose and in any manner whatsoever, divulge to
any person, firm, corporation or other entity or otherwise publish or disclose
any Confidential Information (except as necessary in connection with the
performance of Executive's services under this Agreement). This provision shall
survive the expiration or termination of this Agreement. Notwithstanding the
foregoing, Executive shall not be in breach of this covenant with respect to any
use or disclosure of any Confidential Information by him which does not cause
any material damage to the Company or is required as a result of any legal
process served upon him in any judicial or administrative proceeding (provided
that the Company shall be
7.
give notice in time to enable it to object to such disclosure) or was obtained
by Executive from a third party without such third party's breach of agreement
or obligation of trust.
8.2 Executive hereby acknowledges and agrees that any actual or threatened
breach of the provisions of this Paragraph 8 may cause irreparable harm to the
Company and may not be remediable by an action at law for damages and,
therefore, the Company shall be entitled to seek, as a non-exclusive remedy, in
any court of competent jurisdiction, all equitable remedies therefor, including,
without limitation, a temporary or permanent injunction or specific performance
of the provisions hereof, without the necessity of showing any actual damage or
that monetary damages would not provide an adequate remedy at law or posting a
bond therefor. The provisions of this Paragraph 8 shall survive the termination
or expiration of the Term of this Agreement.
9. Representations and Warranties of Executive. The Executive represents and
warrants to the Company as follows:
9.1 All action on the part of the Executive necessary for the authorization,
execution, delivery and performance of this Agreement and the consummation of
the transactions contemplated hereby, has been taken and this Agreement
constitutes a valid and legally binding obligation of Executive, enforceable in
accordance with its terms, except as the same may be limited by bankruptcy,
insolvency, reorganization, moratorium, or other laws affecting generally the
enforcement of creditors' rights and by general principles of equity.
9. Representations and Warranties of Executive. The Executive represents and
warrants to the Company as follows:
9.1 All action of the part of the Executive necessary for the authorization,
execution, delivery and performance of this Agreement and the consummation of
the transactions contemplated hereby, has been taken and this Agreement
constitutes a valid and legally binding obligation of Executive, enforceable in
accordance with its terms, except as the same may be limited by bankruptcy,
insolvency, reorganization, moratorium, or other laws affecting generally the
enforcement of creditors' rights and by general principles of equity.
9.2 The authorization, execution, delivery and performance of this
Agreement, and the consummation of the transactions contemplated hereby, will
not result in any violation or be in conflict with or constitute, with or
without the passage of time and giving of notice, a default under any provision
of any instrument, judgment, order, writ, decree or agreement to which Executive
is a party or by which he is bound.
9.3 There is no action, suit, proceeding, or investigation pending, or to
the knowledge of Executive, currently threatened against Executive, in any way
relating to the validity of this Agreement or the right of Executive to enter
into or to consummate this Agreement and the transactions contemplated hereby.
10. Representations and Warranties of the Company. The Company represents
and warrants to the Executive as follows:
10.1 All action on the part of the Company necessary for the authorization,
execution, delivery and performance of this Agreement and the consummation of
the transactions contemplated hereby, has been taken and this Agreement
constitutes a valid and legally binding obligation of the Company, enforceable
in accordance with its terms, except as the same may be limited by bankruptcy,
insolvency, reorganization, moratorium, or other laws affecting generally the
enforcement of creditors' rights and by general principles of equity.
10.2 The authorization, execution, delivery and performance of this
Agreement, and the consummation of the transactions contemplated hereby, will
not result in any violation or be in conflict with or constitute, with or
without the passage of time and giving of notice, a default under any provision
of the Company's Certificate of Incorporation by By-Laws or any instrument,
judgment, order, writ, decree or agreement to which the Company is a party or by
which he is bound.
10.3 There is no action, suit, proceeding, or investigation pending, or to
the knowledge of the Company, currently threatened against the Company, in any
way relating to the validity
8.
of this Agreement of the right of the Company to enter into or to consummate
this Agreement and the transactions contemplated hereby.
11. Arbitration. Except for any action under this Agreement for injunctive
or other equitable relief, all disputes, controversies and differences between
the parties hereto arising under this Agreement which the parties hereto are
unable to settle amicably shall be resolved in Los Angeles, California, by
binding arbitration in accordance with the Rules then in force of the American
Arbitration Association. The arbitration shall be held before three arbitrators
one of which shall be selected by the other two arbitrators, and the decision of
such arbitrators shall be deemed to be final, and judgment upon any award or
decision rendered thereby may be entered in any court, domestic or foreign,
having jurisdiction thereof.
12. Miscellaneous.
12.1 This Agreement constitutes the sole and entire agreement between the
parties hereto with respect to the subject matter hereof. This Agreement may not
be changed or modified except by an instrument in writing signed by the party to
be bound thereby.
12.2 All notices, consents, requests, demands and other communications
required or permitted to be given under this Agreement shall be in writing and
delivered personally, receipt prepaid, return receipt requested, addressed to
the parties hereto as follows (or to such other address and/or to such other
persons as either of the parties hereto shall specify by notice given in
accordance with this provision):
(a) If to the Company:
EduLink, Inc. 000
Xxxxx Xxxxxxx Xxxxx
Xxxxx 000
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Attn: Chief Executive Officer
(b) If to Executive:
Xxxxxxx Xxxxxxxxx
00 Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxx 00000
All such notices, consents, requests, demands and other communications shall be
deemed given when personally delivered as aforesaid, or, if mailed as aforesaid,
on the third business day after the mailing thereof or on the day actually
received, if earlier, except for a notice of a change of address which shall be
effective only upon receipt.
12.3 Neither party hereto may assign this Agreement of their respective
rights, benefits or obligations hereunder without the written consent of the
other party hereto. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their successors, heirs, personal
representatives, administrators, executors and permitted assigns. Nothing
contained in this Agreement is intended to confer upon any person or entity,
other than the parties hereto, and their respective successors, heirs, personal
representatives, administrators, executors or permitted assigns, any rights,
benefits, obligations, remedies or liabilities under or by reason of this
Agreement. Notwithstanding the foregoing,
9.
in the event of a sale of securities or assets of the Company constituting a
Change of Control, the Company shall have the right to assign this Agreement to
the person or entity acquiring the stock or assets of the Company provided that
any such person or entity agrees in writing to assume and be bound by all of the
terms and provisions of this Agreement.
12.4 No waiver of this Agreement shall be effective unless in writing and
signed by the party to be bound thereby. The waiver by either party hereto of a
breach of any provision of this Agreement, or of any representation, warranty,
covenant or obligation in this Agreement to the other party hereto shall not be
construed as a waiver of any subsequent breach or of any other provision,
representation, warranty, covenant or obligation of such other party, unless the
instrument of waiver expressly so provides.
12.5 This Agreement shall be governed by and construed in accordance with
the laws of the State of California with respect to contracts made and to be
fully performed therein, without regard to the conflicts of laws principles
thereof. By his execution hereof, Executive hereby consents and irrevocably
submits to the in personam jurisdiction of the American Arbitration Association
tribunal located in the City and County of Los Angeles, State of California and
agrees that any process in any action commenced in such tribunal under this
Agreement may be served upon him personally, by certified or registered mail,
return receipt requested, or by Federal Express or other courier service, with
the same full force and effect as if personally served upon him in Los Angeles
City. Each of the parties hereto hereby waives any claim that the jurisdiction
of any such tribunal is not a convenient forum for any such action and any
defense of lack of in personam jurisdiction with respect thereto. In the event
of any such action or proceeding the party prevailing therein shall be entitled
to payment from the other party hereto of its reasonable counsel fees and
disbursements in an amount determined therein.
12.6 The parties hereto hereby agree that, at any time and from time to time
during the Term hereof, upon the reasonable request of the other party hereto,
they shall do, execute, acknowledge and deliver, or cause to be done, executed,
acknowledge and delivered, such further acts, deeds, assignments, transfers,
conveyances and assurances as may be reasonably required to more effectively
consummate this Agreement and the transactions contemplated thereby or to
confirm or otherwise effectuate the provisions of this Agreement.
12.7 If any term or provision of this Agreement, or the application thereof
to any person or circumstance, if finally determined by a court or arbitration
tribunal to any extent to be illegal, invalid or unenforceable, the remainder of
this Agreement, or the application of such term or provision to persons or
circumstances other than those as to which it is held illegal, invalid or
unenforceable, shall not be affected thereby and each term and provision of this
Agreement shall be valid and shall be enforced to the fullest extent permitted
hereunder and by law.
12.8 Except as required by applicable law or in connection with the
preparation of the Company's financial statements or documents, the Company will
not publish or disclose the compensation or other provisions of this Agreement.
12.9 During and after the Term of this Agreement, the Company shall defend,
indemnify and hold Executive harmless from any claims, causes of action,
liabilities, damages, costs or expenses incurred by Executive based upon or in
connection with the performance of his services under this Agreement to the
fullest extent permitted by the laws of the State of California and the Articles
of
10.
Incorporation and By-Laws of the Company. This provision will survive the
expiration or termination of the Term of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executive this Agreement this ____
day of August, 1999.
EDULINK, INC.
By: /s/ Xxxxxx Xxxxxxxx
---------------------------
Xxxxxx Xxxxxxxx - President
/s/ Xxxxxxx Xxxxxxxxx
---------------------------
Xxxxxxx Xxxxxxxxx
11.
EXHIBIT 10.3
AMENDMENT TO EMPLOYMENT AGREEMENT
Notwithstanding the provisions of the employment agreement dated as of
September 1, 1999 ("Agreement"), between Xxxxxxx Xxxxxxxxx ("Executive") and
EduLink, Inc. ("Company") to the contrary, the parties agree as follows:
(1) Payment to Executive of the annual compensation described in
paragraph 4(a) of the Agreement shall commence on January 1, 2000,
rather than September, 1999; accordingly, Executive waives any claims
to compensation during the period September 1, 1999 through December
31, 1999.
(2) Paragraph 5.3 of the Agreement shall be amended to provide that:
(3) The words "Warrant" shall be substituted for the word "Option"
wherever it appears.
Dated: As of February 1, 2000.
EDULINK, INC.
By: /s/ Xxxxxxx Xxxxxxxxx
----------------------
XXXXXXX XXXXXXXXX, CEO
/s/ Xxxxxx Xxxxxxxx
----------------------
XXXXXX XXXXXXXX
EXHIBIT 10.4
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT made as of this ____ day of September, 1999, by and
between Xxxxxx Xxxxxxxx, an individual residing at 0000 Xxxxxxxxxx Xxxx,
Xxxxxxxx Xxxxxxx, Xxxxxxxxxx 00000 ("Executive") and EDULINK, INC., a California
corporation with its principal offices at 000 Xxxxx Xxxxxxx Xxxxx, Xxxxxxx
Xxxxx, Xxxxxxxxxx 00000 (the "Company").
WITNESSETH:
WHEREAS, the Company is engaged in the design, development, production and
marketing of an internet-based interactive educational system designed for
institutional and individual and users; and
WHEREAS, Executive has, since the inception of the Company in 1996, served
as its President and the Company recognizes the value of his services which are
of a specific, unique and extraordinary character and therefor requires the
continued services of Executive as its President for a specified period of time;
and
WHEREAS, the Company believes that the establishment and maintenance of
sound and vital management of the Company is essential to the protection and
enhancement of the interests of the Company and its stockholders and, in order
to secure such protection, desires to obtain the contractual commitment of
certain of its executive officers, including the Executive, to render their
services to the Company for a specific period of time; and
WHEREAS, for the foregoing reasons, the Company desires to employ the
Executive as its President, and Executive is desirous of being so employed, all
on and subject to the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants herein and other
good and valuable consideration, the receipt and sufficiency of which are hereby
unconditionally acknowledged, the parties hereto do hereby agree as follows:
1. Employment. During the Term (as hereinafter defined) of this Agreement,
the Company hereby employs Executive as its President, upon and subject to the
terms and conditions set forth in this Agreement. Executive hereby agrees to
accept such employment, upon and subject to the terms and conditions set forth
in this Agreement. In addition, the Company shall, subject to Executive's
consent, cause Executive to be re-elected to the Company's Board of Directors
during the Term of this Agreement.
2. Executive's Duties and Responsibilities.
2.1 Executive will perform all of the services customarily associated with
position of President during the Term of this Agreement, subject to the policies
established by and under the direction of the Board of Directors of the Company.
Executive also agrees to perform such other duties and responsibilities,
consistent with such position, as the Board of Directors may assign to him from
time to time during the Term hereof.
1.
2.2 Executive agrees to devote substantially all of his business time,
attention and energy to the performance of his duties under this Agreement
during the Term hereof and shall perform such duties diligently, in good faith
and in a manner consistent with the best interests of the Company. Executive
further agrees to use his best efforts at all times during the Term hereof to
preserve, protect, enhance, and maintain the trade, business and goodwill of the
Company.
2.3 Executive shall perform his services wherever his services are
reasonably required but principally at one of the principal offices of the
Company which are presently located at 0000 Xxxxxxxxxx Xxxx, Xxxxxxxx Xxxxxxx,
Xxxxxxxxxx 00000, and 000 Xxxxx Xxxxxxx Xxxxx, Xxxxxxx Xxxxx, Xxxxxxxxxx 00000.
Under no circumstances shall Executive, without his prior written consent, be
required to change the location of his current residence in order to perform the
services required of him under this Agreement (nor to travel any distance which
is significantly greater than the distance currently traveled by the Executive
to the Company's offices). The Company shall furnish Executive with a private
office, stenographic help and such other facilities, services and staff as are
suitable to his position and necessary and adequate for the performance of his
services under this Agreement.
3. Term.
3.1 The term of this Agreement shall commence as of September ___, 1999 and
shall expire on December 31, 2004, subject to earlier termination as hereinafter
provided in paragraph 3.2 hereof (the "Term").
3.2 Pursuant to the provisions of Paragraph 3.1 above, the Term of this
Agreement shall terminate on the earlier to occur of any of the following
events:
(a) The death of Executive;
(b) The Permanent Disability (hereinafter defined) of Executive as
provided in Paragraph 7 hereof;
(c) Any repeated breach of trust or other repeated action by which
Executive obtains material personal gain at the expense or to the detriment of
the Company;
(d) The failure of Executive to perform the customary duties of his
position, provided that Executive is furnished with notice of such breach from
the Company (with Executive not participating or voting with respect to any such
notice if Executive is a director of the Company) and Executive fails to cure
any such breach within thirty (30) days of such notice;
(e) A conviction of the Executive for any felony or of any other crime
involving moral turpitude;
(f) The delivery of notice of the Company by the Executive, or to the
Executive to the Company, as the case may be, of the termination of this
Agreement for any breach or default by the Company or the Executive, as the case
may be, of any of their respective representations, warranties, obligations or
covenants under this Agreement, provided that any such breach or default is not
occured within thirty (30) days after such notice from Executive or the Company,
as the case may be.
(g) The entry by a court of competent jurisdiction of a decree or order
for relief in respect of the Company in a voluntary case under any applicable
bankruptcy, insolvency, or similar law then in effect or the appointment of a
receiver, liquidator, assignee, custodian, trustee, or sequestrator of the
Company or for any substantial part of its property or an order by any such
court for
2.
the wind-up or liquidation of the Company's affairs; or a petition initiating an
involuntary case under any such bankruptcy, insolvency, or similar law is filed
against the Company and remains pending for sixty (60) days without a stay or
dismissal; or the Company commences a voluntary case under any such bankruptcy,
insolvency, or similar law then in effect, or makes any general assignment for
the benefit of its creditors or takes action in furtherance of any of the
foregoing; or
4. Compensation. In consideration of the performance by Executive of his
services under this Agreement during the Term hereof, the Company shall pay
Executive the following compensation:
(a) A base salary of One Hundred Fifty Thousand Dollars ($150,000)
during each year of the Term hereof (the "Base Salary"), such salary to be paid
to Executive in equal monthly installments (after the deduction of all
applicable withholding and other required payroll deductions) (the "Monthly Base
Salary Payments"), in arrears, on the first day of each month during the Term of
this Agreement.
(b) The Company shall also pay Executive, in addition to the Base
Salary, the following incentive compensation in each calendar year during the
Term hereof (except for the calendar year ended December 31, 1999): The greater
of ten percent (10%) of the Net Pre-Tax Profits (hereinafter defined) of the
Company or ten percent (10%) of the Net Cash Flow (hereinafter defined) of the
Company (the "Bonus"). Notwithstanding the foregoing or any other provision of
this Agreement to the contrary, the maximum bonus payable to Executive in any
specific calendar year shall not exceed an amount equal to twice Executive's
Base Salary during the calendar years ending December 31, 2000 and 2001 and
three times such base salary during the calendar years, 2002, 2003 and 2004.
For purposes hereof, "Net Pre-Tax Profits" shall mean the net pre-tax income
of the Company and "Net Cash Flow" shall mean the net pre-tax cash flow of the
Company, in each calendar year during the Term hereof, as determined by the
Company's certified public accountants, at the Company's expenses, applying
generally accepted accounting principles consistently applied during each
period. In determining Net Pre-Tax Profits and Net Cash Flow, the Company's
accountants shall not consider losses incurred in any prior calendar year and
shall add to the net calculations of each of such items, any compensation or
similar expense incurred or recognized by the Company in connection with the
issuance of securities of the Company for purchase prices which are less than,
or warrants, options or other convertible securities which are exercisable at
prices below, fair market value.
(c) The Bonus shall be payable to Executive within thirty (30) days
following the completion of the audited or unaudited financial statements of the
Company for each such calendar year during the Term of this Agreement, but in
any event, not later than April 1 of each such year (or within ten (10) days
after the final resolution of any disagreement with respect to the calculation
of Net Pre-Tax Profits or Net Cash Flow pursuant to the terms of subparagraph
(d) below). In the event of any termination of this Agreement prior to the
expiration of the Term hereof, the Company shall pay Executive (or his estate in
the case of any earlier termination due to Executive's death) the Bonus in a
prorated amount based upon Net Pre-Tax Profits and Net Cash Flow for the number
of days in any such calendar year in which any such termination occurs, such
payment to be made sixth (60) days after any such termination (unless such
termination results from an occurrence under Paragraphs 3.2(c), 3.2(d), 3.2(e),
3.2(f), but only in the event of a termination by the Company thereunder, or
3.2(g), in which case, notwithstanding any provision of this Agreement to the
contrary, the Company shall have no obligation to make any Bonus payment to
Executive). Notwithstanding the foregoing, the minimum, Bonus shall be paid
semi-annually on June 1 and December 31 of each such calendar year.
3.
(d) The Company shall deliver to Executive with each Bonus payment
during the Term hereof (other than all minimum Bonus payments), a report setting
forth the calculation of Net Pre-Tax Profits and Net Cash Flow. Unless Executive
notifies the Company within fifteen (15) business days after receipt of said
calculations of his disagreement therewith (which notice shall state with
reasonable specificity the reasons for any such disagreement and the amounts in
dispute), said calculations will be final, binding and conclusive on Executive.
If there is a disagreement, and the disagreement cannot be resolved by the
Company and the Executive within sixty (60) days following the delivery of such
calculations, the items in dispute may be submitted by either the Company or the
Executive to the Company's then independent auditors (with a copy being
furnished to the other party). After affording each of the Company and the
Executive the opportunity to present their respective positions (which
opportunity shall not extend for more than ten (10) business days following the
submission of such disputed items to such auditors), the independent auditors
shall determine what, if any, changes and required in the calculations, and such
determination shall be final, binding and conclusive on the Company and the
Executive. The fees, costs and expenses of such independent auditing firm shall
be allocated between the Company and the Executive as follows:
(1) If the Company or Executive submits such calculations to such
independent auditors and the auditors confirm that calculations of Net Pre-Tax
Profits and Net Cash Flow (within 5% thereof, plus or minus), the party which
submitted such calculations to such auditors will pay all of the costs therefor;
or
(2) If the Company or Executive submits such calculations to such
independent auditors and the auditors determine that the calculation of Net
Pre-Tax Profits was understated by more than 5%, then the Company will pay all
of the costs therefor; or
(3) If the Company or Executive submits such calculations to such
independent auditors and the auditors determine that the calculation of the Net
Pre-Tax Profits and Net Cash Flow was overstated by more than 5%, the Executive
will pay all of the costs therefor.
(e) Executive shall have the right, at Executive's sole expense, upon
reasonable advance notice and during normal business house at the Company's
offices, to examine and copy the books and records of the Company relating to
Net Pre-Tax Profits and Net Cost Flow. Executive hereby acknowledges and agrees
that any non-published documentation or other information obtained by him in the
course of any such examination shall be subject to the provisions of Paragraph 8
hereof.
(f) The Company shall, in addition to the Base Salary and the Bonus
reimburse Executive for all ordinary and necessary out-of-pocket expenses
incurred by him in performance of his services under this Agreement, subject to
and upon receipt by the Company of invoices or other documentation in support
thereof. Such expenses for which Executive shall be entitled to reimbursement
shall include, but not be limited to, travel and entertainment expenses and
expenses incurred in connection with promoting the Company's business.
5. Executive Benefits. In addition to the Base Salary and the Bonus,
Executive shall receive the following benefits:
5.1 Executive shall be entitled to four (4) weeks paid vacation and fifteen
(15) paid sick days during each year of the Term hereof. Executive shall take
such vacation at such times as will not unreasonably interfere with significant
activities of the Company and upon reasonable advance notice to the Company. Any
unused vacation shall be paid to Executive by the Company at the end of each
year of the Term hereof.
4.
5.2 The Company shall pay for the maintain for Executive during the term
second and each subsequent year of the Term of this Agreement, disability
insurance providing for the payment to Executive of a minimum of sixty percent
(60%) of his Base Salary for any "disability" as defined in such disability
insurance policy. The Company shall also pay and maintain for Executive during
the Term hereof, major medical, hospitalization, dental and vision insurance
(which insurance will cover Executive and members of his immediate family). The
Company shall maintain such disability, medical, dental, and vision insurance in
effect, at the Company's cost, for a period of eighteen (18) months after the
expiration of this Agreement or the termination of this Agreement pursuant to
Paragraphs 3.2(b), 3.2(f) or 3.2(h) hereof. During the Term of this Agreement.
The Company may, at its election at any time during the Term hereof, obtain and
maintain at its cost, a key man life insurance policy on the Executive's life
with the Company as the beneficiary thereof and Executive will cooperate with
the Company and its insurer with respect thereto.
5.3 The Company grants to Executive the following number of options to
purchase one share of Company's Common Stock per option at an exercise price of
$.25 per share, provided that Executive shall not have the right to exercise
those options corresponding to the specific deliverables described below unless
and until such deliverables are completed on or before the corresponding
"outside completion date":
Number of Option Deliverable Outside Completion Date
---------------- ----------- -----------------------
50,000 Design Phase Elements
Described in Schedule A.
50,000 Build-Out Elements Described in
Schedule A.
50,000 Completion of Beta Test
described in Schedule A.
50,000 National Launch 7th and 8th
Grade Service Described in
Schedule A.
The remaining terms and conditions applicable to such options, are described in
Schedule A-1, attached hereto.
5.4 The Company agrees that the exercise price of each of the 500,000
Options to purchase one (1) share of Company's Common Stock heretofore granted
to Executive shall be equal to $.25 per share (rather than $3.50 with respect to
the first 100,000 Options, $5.00 with respect to the next 200,000 Options, and
$7.00 with respect to the next 200,000 Options). The provision of this Paragraph
5.4 constitutes a material inducement for Executive to continue rendering
services to Company.
5.5 The Company agrees that nothing contained in this Agreement is intended
to, or shall be deemed to be granted to the Executive in lieu of, or as a
limitation upon, any rights and privileges which the Executive may otherwise be
entitled to as an executive employee of the Company under any retirement,
pension, profit sharing, insurance, hospitalization or other employee benefit
plan of any type (including, without limitation, any incentive, profit sharing,
bonus or stock option plan), which may now
5.
be in effect or which may hereafter be adopted by the Company, or any subsidiary
of the Company, it being understood that the Executive shall have the same
rights and privileges to participate in such Company (including its
subsidiaries) benefit plans as any other officer or executive employee of the
Company or any of its subsidiaries.
6. Severance; Change of Control.
6.1 In the event that, upon the expiration of the Term hereof on December
31, 2004, this Agreement has not been renewed or Executive and the Company have
not entered into a successor employment agreement, the Company shall pay to
Executive on such date, in cash, a lump sum amount equal to Executive's then
Base Salary plus the bonus compensation payable to the Executive for the
calendar year 2003, then multiplied by a factor of 1.5.
6.2 Omitted
6.3 If, at any time after a Change in Control has occurred, the Company (or
any successor thereto) terminates this Agreement prior to the expiration of the
Term of this Agreement, Executive shall receive (1) has Base Salary, Bonus and
all fringe benefits provided for under Paragraph 5 hereof, including, without
limitation, all benefits and awards under the Company's stock option, stock
appreciation, restricted stock, stock bonus and similar plans and the Company's
pension and retirement plans and programs which are then in effect, accrued
through the date of any such termination; provided, however, that all of
Executive's vested stock options, stock appreciation rights, restricted stock
grants and stock bonuses and similar benefits shall be deemed to vest in full on
any such termination date, notwithstanding any provision to the contrary in any
applicable agreement or plan and (ii) a lump sum payment, in cash, on the date
of any such termination, in an amount equal to the then Base Salary of Executive
multiplied by a factor of 5.
6.4 For purposes hereof, a "Change in Control" shall mean and be deemed to
have occurred if: (I) any "person" or "group" (as such terms are used in
Sections 3(a)(9) and 13(d)(3) of the Securities Exchange Act of 1934, as amended
(the "Act"), except for an employee stock ownership trust (or any of the
trustees thereof), becomes a "beneficial owner" (as such term is used in Rule
13d-3 promulgated under the Act), after the date hereof, directly or indirectly,
of securities of the Company representing thirty percent (30%) or more of the
combined voting power of the Company's then outstanding securities; or (ii) the
majority of the Board of Directors, as such entire Board of Directors is
comprised as of the date hereof, no longer serve as directors of the Company,
except that there shall not be counted toward such majority who no longer serve
as directors any director who ceased to serve either prior to the date of a
Change in Control, for any reason, or at any other time due to voluntary
resignation, death, disability or termination for cause or any director who is
elected to the Board of Directors after the date hereof and who is approved by
Executive; or (iii) the shareholders of the Company approve a plan of
liquidation of the Company or an agreement for the sale or disposition by the
Company of all or substantially all of the Company's assets; or (iv) the
shareholders of the Company approve a merger of consolidation of the Company
with any other entity, other than a merger or consolidation which would result
in the combined voting power of the Company's voting securities outstanding
immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of the surviving
entity) more than fifty percent (50%) of the combined voting power of the voting
securities of the Company or such surviving entity outstanding immediately after
such merger or consolidation; or (v) any other event shall have occurred which
constitutes a change in ownership or effective control of the Company or in the
ownership of its assets; provided, however, that no Change in Control shall be
deemed to have occurred if any aforementioned plan of liquidation, sale of
assets, merger on consolidation is not consummated. Notwithstanding the
foregoing, any transaction involving a leveraged buyout or other acquisition of
the Company which would otherwise constitute a Change in
6.
Control, in which Executive participates in the surviving or successor entity
(other than solely as an employee or consultant), shall not constitute a Change
in Control.
7. Disability.
7.1 Subject to the terms of Paragraph 7.2 below, in the event Executive
suffers any illness, injury or other incapacity which causes him to become
temporarily disabled during the Term of this Agreement, he shall continue to
receive one hundred percent (100%) of the Base Salary, Bonus and all other
benefits to which he was entitled at the time he became so disabled for any
period of disability not in excess of six (6) consecutive calendar months. The
term "Permanent Disability" as used in this Agreement shall mean any disability
of Executive for a period in excess of six (6) consecutive calendar months. For
the purpose of this Paragraph, the terms "disabled" and "disability" shall mean
any physical or mental illness, injury or other incapacity which, in the opinion
of the doctor reasonably satisfactory to the Company and executive, renders the
Executive unable to perform his duties hereunder. The date that any such
disability shall be deemed to have commenced shall be the date Executive first
absents himself from working during a continuous period of disability as
determined by the doctor hereinabove set forth.
7.2 Upon any Permanent Disability, the Company may at any time thereafter
either reduce the Base Salary to be received by Executive to seventy-five
percent (75%) of the Base Salary at the time of any such Permanent Disability
(including all payments Executive may receive under any disability policy
maintained by the Company) or terminate this Agreement upon ninety (90) days
prior written notice to Executive. In the event of any such termination,
Executive shall be entitled to receive from the Company or from the Company's
disability carrier, disability compensation in an amount which shall, when added
to all social security benefits received by Executive as a result of the
Permanent Disability, equal Seventy Thousand Dollars ($70,000) per annum.
8. Confidentiality and Non-Disclosure Covenant.
8.1 During the Term of this Agreement, Executive hereby acknowledges that he
may obtain and be entrusted with unpublished material confidential and
proprietary information relating to the Company's present and proposed
business and operations, including, without limitation, financial information
relating to the Company's present and proposed business and proposed business
and operations, the cost and pricing of the Company's services, the sales and
marketing plans and strategies of the Company, proposed Company's accounts and
the terms of all material agreements to which the Company is a party. All of
such information that may be obtained by Executive shall, for purposes hereof,
be referred to as "Confidential Information." Executive hereby agrees that,
unless the Confidential Information becomes publicly known through legitimate
origin not involving any improper act or omission of Executive, neither he, nor
any entity or person owned or controlled directly or indirectly by him, shall,
during Term of this Agreement or thereafter, use for his own benefit or for the
benefit of others for any purpose and in any manner whatsoever, divulge to any
person, firm, corporation or other entity or otherwise publish or disclose any
Confidential Information (except as necessary in connection with the performance
of Executive's services under this Agreement). This provision shall survive the
expiration or termination of this Agreement. Notwithstanding the foregoing,
Executive shall not be in breach of this covenant with respect to any use or
disclosure of any Confidential Information by him which does not cause any
material damage to the Company or is required as a result of any legal process
served upon him in any judicial or administrative proceeding (provided that the
Company shall be given notice in time to enable it to object to such disclosure)
or was obtained by Executive from a third party without such third party's
breach of agreement or obligation of trust.
7.
8.2 Executive hereby acknowledges and agrees that any actual or threatened
breach of the provisions of this Paragraph 8 may cause irreparable harm to the
Company and may not be remediable by an action at law for damages and,
therefore, the Company shall be entitled to seek, as a non-exclusive remedy, in
any court of competent jurisdiction, all equitable remedies therefor,
including, without limitation, a temporary or permanent injunction or specific
performance of the provisions hereof, without the necessity of showing any
actual damage or that monetary damages would not provide an adequate remedy at
law or posting a bond therefor. The provisions of this Paragraph 8 shall survive
the termination or expiration of the Term of this Agreement.
9. Representations and Warranties of Executive. The Executive represents and
warrants to the Company as follows:
9.1 All action of the part of the Executive necessary for the authorization,
execution, delivery and performance of this Agreement and the consummation of
the transactions contemplated hereby, has been taken and this Agreement
constitutes a valid and legally binding obligation of Executive, enforceable in
accordance with its terms, except as the same may be limited by bankruptcy,
insolvency, reorganization, moratorium, or other laws affecting generally the
enforcement of creditor's rights and by general principles of equity.
9.2 The authorization, execution, delivery and performance of this
Agreement, and the consummation of the transactions contemplated hereby, will
not result in any violation or be in conflict with or constitute, with or
without the passage of time and giving of notice, a default under any provision
of any instrument, judgment, order, writ, decree or agreement to which Executive
is a part or by which he is bound.
9.3 There is no action, suit, proceeding, or investigation pending, or to
the knowledge of Executive, currently threatened against Executive, in any way
relating to the validity of this Agreement or the right of Executive to enter
into or to consummate this Agreement and the transactions contemplated hereby.
10. Representations and Warranties of the Company. The Company represents
and warrants to the Executive as follows:
10.1 All action on the part of the Company necessary for the authorization,
execution delivery and performance of this Agreement and the consummation of the
transactions contemplated hereby, has been taken and this Agreement constitutes
a valid and legally binding obligation of the Company, enforceable in
accordance with its terms, except as the same may be limited by bankruptcy,
insolvency, reorganization, moratorium, or other laws affecting generally the
enforcement of creditors' rights and by general principles of equity.
10.2 The authorization, execution, delivery and performance of this
Agreement, and the consummation of the transactions contemplated hereby, will
not result in any violation or by in conflict with or constitute, with or
without the passage of time and giving of notice, a default under any provision
of the Company's Certificate of Incorporation by By-Laws or any instrument,
judgment, order, writ, decree or agreement to which the Company is a party or by
which he is bound.
10.3 There is no action, suit, proceeding, or investigation pending, or to
the knowledge of the Company, currently threatened against the Company, in any
way relating to the validity of this Agreement or the right of the Company to
enter into or to consummate this Agreement and the transactions contemplated
hereby.
8.
11. Arbitration. Except for any action under this Agreement for injunctive
or other equitable relief, all disputes, controversies and differences between
the parties hereto arising under this Agreement which the parties hereto are
unable to settle amicably shall be resolved in Los Angeles, California, by
binding arbitration in accordance with the Rules then in force of the American
Arbitration Association. The arbitration shall be held before three arbitrators
one of which shall be selected by the other two arbitrators, and the decision
of such arbitrators shall be deemed to be final, and judgment upon any award or
decision rendered thereby may be entered in any court, domestic or foreign,
having jurisdiction thereof.
12. Miscellaneous.
12.1 This Agreement constitutes of sole and entire agreement between the
parties hereto with respect to the subject matter hereof. This Agreement may not
be changed or modified except by an instrument in writing signed by the party to
be bound thereby.
12.2 All notices, consents, requests, demands and other communications
required or permitted to be given under this Agreement shall be in writing and
delivered personally, receipt prepaid, return receipt requested, addressed to
the parties hereto as follows (or to such other address and/or such other
persons as either of the parties hereto shall specify by notice given in
accordance with this provision):
(a) If to the Company:
EduLink, Inc.
000 Xxxxx Xxxxxxx Xxxxx
Xxxxx 000
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Attn: Chief Executive Officer
(b) If to Executive:
Xxxxxx Xxxxxxxx
0000 Xxxxxxxxxx Xxxx
Xxxxxxxx Xxxxxxx, Xxxxxxxxxx 00000
All such notices, consents, requests, demands and other communications shall be
deemed given when personally delivered as aforesaid, or, if mailed as aforesaid,
on the third business day after the mailing thereof or on the day actually
received, if earlier, except for a notice of a change of address which shall be
effective only upon receipt.
12.3 Neither party hereto may assign this Agreement or their respective
rights, benefits or obligations hereunder without the written consent of the
other party hereto. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their successors, heirs, personal
representatives, administrators, executors and permitted assigns. Nothing
contained in this Agreement is intended to confer upon any person or entity,
other than the parties hereto, and their respective successors, heirs, personal
representatives, administrators, executors or permitted assigns, any rights,
benefits, obligations, remedies or liabilities under or by reason of this
Agreement. Notwithstanding the foregoing, in the event of a sale of securities
or assets of the Company constituting a Change of Control, the Company shall
have the right to assign this Agreement to the person or entity acquiring the
stock or assets
9.
of the Company provided that any such person or entity agrees in writing to
assume and be bound by all of the terms and provisions of this Agreement.
12.4 No waiver of this Agreement shall be effective unless in writing and
signed by the party to be bound thereby. The waiver by either party hereto of a
breach of any provision of this Agreement, or of any representation, warranty,
covenant or obligation in this Agreement by the other party hereto shall not be
construed as a waiver of any subsequent breach or of any other provision,
representation, warranty, covenant or obligation of such other party, unless the
instrument of waiver expressly so provides.
12.5 This Agreement shall be governed by and construed in accordance with
the laws of the State of California with respect to contracts made and to be
fully performed therein, without regard to the conflicts of laws principles
thereof. By his execution hereof, Executive hereby consents and irrevocably
submits to the in personam jurisdiction of the American Arbitration Association
tribunal located in the City and County of Los Angeles, State of California and
agrees that any process in any action commenced in such tribunal under this
Agreement may be served upon him personally, by certified or registered mail,
return receipt requested, or by Federal Express or other courier service, with
the same full force and effect as if personally served upon him in Los Angeles
City. Each of the parties hereto hereby waives any claim that the jurisdiction
of any such tribunal is not a convenient forum for any such action and any
defense of lack of in personam jurisdiction with respect thereto. In the event
of any such action or proceeding the party prevailing therein shall be entitled
to payment from the other party hereto of its reasonable counsel fees and
disbursements in an amount determined therein.
12.6 The parties hereto hereby agree that, at any time and from time to time
during the Term hereof, upon the reasonable request of the other party thereto,
they shall do, execute, acknowledge and deliver, or cause to be done, executed,
acknowledge and delivered, such further acts, deeds, assignments, transfers,
conveyances and assurances as may be reasonably required to more effectively
consummate this Agreement and the transactions contemplated thereby or to
confirm or otherwise effectuate the provisions of this Agreement.
12.7 If any term or provision of this Agreement, or the application thereof
to any person or circumstance, is finally determined by a court or arbitration
tribunal to any extent to be illegal, invalid or unenforceable, the remainder of
this Agreement, or the application of such term or provision to persons or
circumstances other than those as to which it is held illegal, invalid or
unenforceable, shall not be affected thereby and each term and provision of this
Agreement shall be valid and shall be enforced to the fullest extent permitted
hereunder and by law.
12.8 Except as required by applicable law or in connection with the
preparation of the Company's financial statements or documents, the Company will
not publish or disclose the compensation or other provisions of this Agreement.
12.9 During and after the Term of this Agreement, the Company shall defend,
indemnify and hold Executive harmless from any claims, cause of action,
liabilities, damages, costs or expenses incurred by Executive based upon or in
connection with the performance of his services under this Agreement to the
fullest extent permitted by the laws of the State of California and the Articles
of
10.
Incorporation and By-Laws of the Company. This provision will survive the
expiration or termination of the Term of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement this ____
day of September, 1999.
EDULINK, INC.
By: /s/ Xxxxxxx Xxxxxxxxx
-----------------------
Xxxxxxx Xxxxxxxxx - CEO
/s/ Xxxxxx Xxxxxxxx
------------------------
Xxxxxx Xxxxxxxx
11.
EXHIBIT 10.5
AMENDMENT TO EMPLOYMENT AGREEMENT
Notwithstanding the provisions of the employment agreement dated as of
September 1, 1999 ("Agreement"), between Xxxxxx Xxxxxxxx ("Executive") and
EduLink, Inc. ("Company") to the contrary, the parties agree as follows:
(1) Payment to Executive of the annual compensation described in
paragraph 4(a) of the Agreement shall commence on January 1, 2000,
rather than September, 1999; accordingly, Executive waives any claims
to compensation during the period September 1, 1999 through December
31, 1999.
(2) Paragraph 5.3 of the Agreement shall be amended to provide that:
(3) The words "Warrant" shall be substituted for the word "Option"
wherever it appears.
Dated: As of February 1, 2000.
EDULINK, INC.
By: /s/ Xxxxxxx Xxxxxxxxx
----------------------
XXXXXXX XXXXXXXXX, CEO
/s/ Xxxxxx Xxxxxxxx
----------------------
XXXXXX XXXXXXXX
EXHIBIT 10.6
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT made as of this 4th day of September, 1999, by and
between Xxx Xxxxxxxx, an individual residing at 0000 Xxxxxxxxxx Xxxx,
Xxxxxxxx Xxxxxxx, Xxxxxxxxxx 00000 ("Executive") and EDULINK, INC., a California
corporation with its principal offices at 000 Xxxxx Xxxxxxx Xxxxx, Xxxxxxx
Xxxxx, Xxxxxxxxxx 00000 (the "Company").
WITNESSETH:
WHEREAS, the Company is engaged in the design, development, production and
marketing of an internet-based interactive educational system designed for
institutional and individual and users; and
WHEREAS, the Company believes that the establishment and maintenance of
sound and vital management of the Company is essential to the protection and
enhancement of the interests of the Company and its stockholders and, in order
to secure such protection, desires to obtain the contractual commitment of
certain of its executive officers, including the Executive, to render their
services to the Company for a specific period of time; and
WHEREAS, for the foregoing reasons, the Company desires to employ the
Executive as its Senior Vice President - Operations, and Executive is desirous
of being so employed, all on and subject to the terms and conditions
hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants herein and other
good and valuable consideration, the receipt and sufficiency of which are
hereby unconditionally acknowledged, the parties hereto do hereby agree as
follows:
1. Employment. During the Term (as hereinafter defined) of this Agreement,
the Company hereby employs Executive as its Senior Vice President - Operations,
upon and subject to the terms and conditions set forth in this Agreement.
Executive hereby agrees to accept such employment, upon and subject to the
terms and conditions set forth in this Agreement.
2. Executive's Duties and Responsibilities.
2.1 Executive will perform all of the services customarily associated
with the position of Senior Vice President - Operations during the Term of this
Agreement, subject to the policies established by and under the direction of
the Board of Directors of the Company. Executive also agrees to perform such
other duties and responsibilities, consistent with such position, as the Board
of Directors may assign to him from time to time during the Term hereof.
2.2 Executive agrees to devote substantially all of his business time,
attention and energy to the performance of his duties under this Agreement
during the Term hereof and shall perform such duties diligently, in good faith
and in a manner consistent with the best interests of the Company. Executive
further agrees to use his best efforts at all times during the Term hereof to
preserve, protect, enhance, and maintain the trade, business and goodwill of
the Company.
1.
2.3 Executive shall perform his services wherever his services are
reasonably required but principally at one of the principal offices of the
Company which are presently located at 0000 Xxxxxxxxxx Xxxx, Xxxxxxxx Xxxxxxx,
Xxxxxxxxxx 00000, and 000 Xxxxx Xxxxxxx Xxxxx, Xxxxxxx Xxxxx, Xxxxxxxxxx 00000.
Under no circumstances shall Executive, without his prior written consent, be
required to change the location of his current residence in order to perform
the services required of him under this Agreement (nor to travel any distance
which is significantly greater than the distance currently traveled by the
Executive to the Company's offices). The Company shall furnish Executive with a
private office, stenographic help and such other facilities, services and staff
as are suitable to his position and necessary and adequate for the performance
of his services under this Agreement.
3. Term.
3.1 The term of this Agreement shall commence as of September ____,
1999 and shall expire on December 31, 2004, subject to earlier termination as
hereinafter provided in paragraph 3.2 hereof (the "Term").
3.2 Pursuant to the provisions of Paragraph 3.1 above, the Term of this
Agreement shall terminate on the earlier to occur of any of the following
events:
(a) The death of Executive;
(b) The Permanent Disability (hereinafter defined) of Executive as
provided in Paragraph 7 hereof;
(c) Any repeated breach of trust or other repeated action by which
Executive obtains material personal gain at the expense or to the detriment of
the Company;
(d) The failure of Executive to perform the customary duties of his
position, provided that Executive is furnished with notice of such breach from
the Company (with Executive not participating or voting with respect to any
such notice if Executive is a director of the Company) and Executive fails to
cure any such breach within thirty (30) days of such notice;
(e) A conviction of the Executive for any felony or of any other
crime involving moral turpitude;
(f) The delivery of notice to the Company by the Executive, or to
the Executive to the Company, as the case may be, of the termination of this
Agreement for any breach or default by the Company or the Executive, as the
case may be, of any of their respective representations, warranties,
obligations or covenants under this Agreement, provided that any such breach or
default is not cured within thirty (30) days after such notice from Executive
or the Company, as the case may be.
(g) The entry by a court of competent jurisdiction of a decree or
order for relief in respect of the Company in a voluntary case under any
applicable bankruptcy, insolvency, or similar law then in effect or the
appointment of a receiver, liquidator, assignee, custodian, trustee, or
sequestrator of the Company or for any substantial part of its property or an
order by any such court for the wind-up or liquidation of the Company's
affairs; or a petition initiating an involuntary case under any such
bankruptcy, insolvency, or similar law is filed against the Company and remains
pending for sixty (60) days without a stay or dismissal or the Company
commences a voluntary case under any such bankruptcy, insolvency, or similar
law then in effect, or makes any general assignment for the benefit of its
creditors or takes action in furtherance of any of the foregoing; or
2.
4. Compensation. In consideration of the performance by Executive of his
services under this Agreement during the Term hereof, the Company shall pay
Executive the following compensation:
(a) A base salary of Ninety Thousand Dollars ($90,000) during each
year of the Term hereof (the "Base Salary"), such salary to be paid to
Executive in equal monthly installments (after the deduction of all applicable
withholding and other required payroll deductions) (the "Monthly Base Salary
Payments"), in arrears, on the first day of each month during the Term of this
Agreement.
(b) The Company shall also pay Executive, in addition to the Base
Salary, the following incentive compensation in each calendar year during the
Term hereof (except for the calendar year ended December 31, 1999): The greater
of ten percent (10%) of the Net Pre-Tax Profits (hereinafter defined) of the
Company or ten percent (10%) of the Net Cash Flow (hereinafter defined) of the
Company (the "Bonus"). Notwithstanding the foregoing or any other provision of
this Agreement to the contrary, the maximum bonus payable to Executive in any
specific calendar year shall not exceed an amount equal to twice Executive's
Base Salary during the calendar years ending December 31, 2000 and 2001 and
three times such base salary during the calendar years, 2002, 2003 and 2004.
For purposes hereof, "Net Pre-Tax Profits" shall mean the net
pre-tax income of the Company and "Net Cash Flow" shall mean the net pre-tax
cash flow of the Company, in each calendar year during the Term hereof, as
determined by the Company's certified public accountants, at the Company's
expense, applying generally accepted accounting principles consistently applied
during each period. In determining Net Pre-Tax Profits and Net Cash Flow, the
Company's accountants shall not consider losses incurred in any prior calendar
year and shall add to the net calculations of each of such items, any
compensation or similar expense incurred or recognized by the Company in
connection with the issuance of securities of the Company for purchase prices
which are less than, or warrants, options or other convertible securities which
are exercisable at prices below, fair market value.
(c) The Bonus shall be payable to Executive within thirty (30) days
following the completion of the audited or unaudited financial statements of
the Company for each such calendar year during the Term of this Agreement, but
in any event, not later than April 1 of each such year (or within ten (10) days
after the final resolution of any disagreement with respect to the calculation
of Net Pre-Tax Profits or Net Cash Flow pursuant to the terms of subparagraph
(d) below). In the event of any termination of this Agreement prior to the
expiration of the Term hereof, the Company shall pay Executive (or his estate
in the case of any earlier termination due to Executive's death) the Bonus in a
pro-rated amount based upon Net Pre-Tax Profits and Net Cash Flow for the
number of days in any such calendar year in which any such termination occurs,
such payment to be made sixty (60) days after any such termination (unless such
termination results from an occurrence under Paragraphs 3.2(c), 3.2(d), 3.2(e),
3.2(f), but only in the event of a termination by the Company thereunder, or
3.2(g), in which case, notwithstanding any provision of this Agreement to the
contrary, the Company shall have no obligation to make any Bonus payment to
Executive). Notwithstanding the foregoing, the minimum, Bonus shall be paid
semi-annually on June 1 and December 31 of each such calendar year.
(d) The Company shall deliver to Executive with each Bonus payment
during the Term hereof (other than all minimum Bonus payments), a report
setting forth the calculation of Net Pre-Tax Profits and Net Cash Flow. Unless
Executive notifies the Company within fifteen (15) business days after receipt
of said calculations of his disagreement therewith (which notice shall state
with reasonable specificity the reasons for any such disagreement and the
amounts in dispute), said calculations will be final, binding and conclusive on
Executive. If there is a disagreement, and the disagreement cannot be resolved
by the Company and the Executive within sixty (60) days following the delivery
of such calculations, the items in dispute may be submitted by either the
Company or the Executive to the Company's then independent auditors (with a
copy being furnished to the other party).
3.
After affording each of the Company and the Executive the opportunity to
present their respective positions (which opportunity shall not extend for more
than ten (10) business days following the submission of such disputed items to
such auditors), the independent auditors shall determine what, if any, changes
are required in the calculations, and such determination shall be final,
binding and conclusive on the Company and the Executive. The fees, costs and
expenses of such independent auditing firm shall be allocated between the
Company and the Executive as follows:
(1) If the Company or Executive submits such calculations to
such independent auditors and the auditors confirm that calculations of Net
Pre-Tax Profits and Net Cash Flow (within 5% thereof, plus or minus), the party
which submitted such calculations to such auditors will pay all of the costs
therefor; or
(2) If the Company or Executive submits such calculations to
such independent auditors and the auditors determine that the calculation of
Net Pre-Tax Profits was understated by more than 5%, then the Company will pay
all of the costs therefor; or
(3) If the Company or Executive submits such calculations to
such independent auditors and the auditors determine that the calculation of
Net Pre-Tax Profits and Net Cash Flow was overstated by more than 5%, the
Executive will pay all of the costs therfor.
(e) Executive shall have the right, at Executive's sole expense,
upon reasonable advance notice and during normal business hours at the
Company's offices, to examine and copy the books and records of the Company
relating to Net Pre-Tax Profits and Net Cash Flow. Executive hereby
acknowledges and agrees that any non-published documentation or other
information obtained by him in the course of any such examination shall be
subject to the provisions of Paragraph 8 hereof.
(f) The Company shall, in addition to the Base Salary and the
Bonus, reimburse Executive for all ordinary and necessary out-of-pocket
expenses incurred by him in the performance of his services under this
Agreement, subject to and upon receipt by the Company of invoices or other
documentation in support thereof. Such expenses for which Executive shall be
entitled to reimbursement shall include, but not be limited to, travel and
entertainment expenses and expenses incurred in connection with promoting the
Company's business.
5. Executive Benefits. In addition to the Base Salary and the Bonus,
Executive shall receive the following benefits:
5.1 Executive shall be entitled to four (4) weeks paid vacation and
fifteen (15) paid sick days during each year of the Term hereof. Executive
shall take such vacation at such times as will not unreasonably interfere with
significant activities of the Company and upon reasonable advance notice to the
Company. Any unused vacation shall be paid to Executive by the Company at the
end of each year of the Term hereof.
5.2 The Company shall pay for and maintain for Executive during the
term second and each subsequent year of the Term of this Agreement, disability
insurance providing for the payment to Executive of a minimum of sixty percent
(60%) of his Base Salary for any "disability" as defined in such disability
insurance policy. The Company shall also pay and maintain for Executive during
the Term hereof, major medical, hospitalization, dental and vision insurance
(which insurance will cover Executive and members of his immediate family). The
Company shall maintain such disability, medical, dental, and vision insurance
in effect, at the Company's cost, for a period of eighteen (18) months after
the expiration of this Agreement or the termination of this Agreement pursuant
to Paragraphs 3.2(b), 3.2(f) or
4.
3.2(h) hereof. During the Term of this Agreement, the Company may, at its
election at any time during the Term hereof, obtain and maintain at its cost, a
key man life insurance policy on the Executive's life with the Company as the
beneficiary thereof and Executive will cooperate with the Company and its
insurer with respect thereto.
5.3 The Company grants to Executive the following number of options to
purchase one share of Company's Common Stock per option at an exercise price of
$.25 per share, provided that Executive shall not have the right to exercise
those options corresponding to the specific deliverables described below unless
and until such deliverables are completed on or before the corresponding
"outside completion date":
Number of Options Deliverable Outside Completion Date
----------------- ----------- -----------------------
50,000 Design Phase Elements
Described in Schedule A.
50,000 Build-Out Elements
Described in Schedule A.
50,000 Completion of Beta Test
described in Schedule A.
50,000 National Launch of
7th and 8th Grade Service
Described in Schedule A.
The remaining terms and conditions applicable to such options, are described in
Schedule A-1, attached hereto.
5.4 The Company agrees that nothing contained in this Agreement is
intended to, or shall be deemed to be granted to the Executive in lieu of, or
as a limitation upon, any rights and privileges which the Executive may
otherwise be entitled to as an executive employee of the Company under any
retirement, pension, profit sharing, insurance, hospitalization or other
employee benefit plan of any type (including, without limitation, any
incentive, profit sharing, bonus or stock option plan), which may now be in
effect or which may hereafter be adopted by the Company, or any subsidiary of
the Company, it being understood that the Executive shall have the same rights
and privileges to participate in such Company (including its subsidiaries)
benefit plans as any other officer or executive employee of the Company or any
of its subsidiaries.
6. Severance: Change of Control.
6.1 In the event that, upon the expiration of the Term hereof on
December 31, 2004, this Agreement has not been renewed or Executive and the
Company have not entered into a successor employment agreement, the Company
shall pay to Executive on such date, in cash, a lump sum amount equal to
Executive's then Base Salary plus the bonus compensation payable to Executive
for the calendar year 2003, then multiplied by a factor of 1.5.
6.2 Omitted.
5.
6.3 If, at any time after a Change in Control has occured, the Company
(or any successor thereto) terminates this Agreement prior to the expiration of
the Term of this Agreement, Executive shall receive (1) his Base Salary, Bonus
and all fringe benefits provided for under Paragraph 5 hereof, including,
without limitation, all benefits and awards under the Company's stock option,
stock appreciation, restricted stock, stock bonus and similar plans and the
Company's pension and retirement plans and programs which are then in effect,
accrued through the date of any such termination; provided, however, that all
of Executive's vested stock options, stock appreciation rights, restricted
stock grants and stock bonuses and similar benefits shall be deemed to vest in
full on any such termination date, notwithstanding any provision to the
contrary in any applicable agreement or plan and (ii) a lump sum payment, in
cash, on the date of any such termination, in an amount equal to the then Base
Salary of Executive multiplied by a factor of 5.
6.4 For purposes hereof, a "Change in Control" shall mean and be deemed
to have occurred if: (I) any "person" or "group" (as such terms are used in
Sections 3(a)(9) and 13(d)(3) of the Securities Exchange Act of 1934, as
amended (the "Act"), except for an employee stock ownership trust (or any of
the trustees thereof), becomes a "beneficial owner" (as such term is used in
Rule 13d-3 promulgated under the Act), after the date hereof, directly or
indirectly, of securities of the Company representing thirty percent (30%) or
more of the combined voting power of the Company's then outstanding securities;
or (ii) the majority of the Board of Directors, as such entire Board of
Directors is comprised as of the date hereof, no longer serve as directors of
the Company, except that there shall not be counted toward such majority who no
longer serve as directors any director who ceased to serve either prior to the
date of a Change in Control, for any reason, or at any other time due to
voluntary resignation, death, disability or termination for cause or any
director who is elected to the Board of Directors after the date hereof and who
is approved by Executive; or (iii) the shareholders of the Company approve a
plan of liquidation of the Company or an agreement for the sale or disposition
by the Company of all or substantially all of the Company's assets; or (iv) the
shareholders of the Company approve a merger of consolidation of the Company
with any other entity, other than a merger or consolidation which would result
in the combined voting power of the Company's voting securities outstanding
immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of the surviving
entity) more than fifty percent (50%) of the combined voting power of the voting
securities of the Company or such surviving entity outstanding immediately
after such merger or consolidation; or (v) any other event shall have occurred
which constitues a change in ownership or effective control of the Company or
in the ownership of its assets; provided, however, that no Change in Control
shall be deemed to have occurred if any aforementioned plan of liquidation,
sale of assets, merger or consolidation is not consummated. Notwithstanding the
foregoing, any transaction involving a leveraged buyout or other acquisition of
the Company which would otherwise constitute a Change in Control, in which
Executive participates in the surviving or successor entity (other than solely
as an employee or consultant), shall not constitute a Change in Control.
7. Disability.
7.1 Subject to the terms of Paragraph 7.2 below, in the event Executive
suffers any illness, injury or other incapacity which causes him to become
temporarily disabled during the Term of this Agreement, he shall continue to
receive one hundred percent (100%) of the Base Salary, Bonus and all other
benefits to which he was entitled at the time he became so disabled for any
period of disability not in excess of six (6) consecutive calendar months. The
term "Permanent Disability" as used in this Agreement shall mean any disability
of Executive for a period in excess of six (6) consecutive calendar months. For
the purpose of this Paragraph, the terms "disabled" and "disability" shall mean
any physical or mental illness, injury or other incapacity which, in the
opinion of a doctor reasonably satisfactory to the Company and Executive,
renders the Executive unable to perform his duties hereunder. The date that any
6.
such disability shall be deemed to have commenced shall be the date Executive
first absents himself from work during a continuous period of disability as so
determined by the doctor hereinabove set forth.
7.2 Upon any Permanent Disability, the Company may at any time
thereafter either reduce the Base Salary to be received by Executive to
seventy-five percent (75%) of the Base Salary at the time of any such Permanent
Disability (including all payments Executive may receive under any disability
policy maintained by the Company) or terminate this Agreement upon ninety (90)
days prior written notice to Executive. In the event of any such termination,
Executive shall be entitled to receive from the Company or from the Company's
disability carrier, disability compensation in an amount which shall, when
added to all social security benefits received by Executive as a result of the
Permanent Disability, equal Seventy Thousand Dollars ($70,000) per annum.
8. Confidentiality and Non-Disclosure Covenant.
8.1 During the Term of this Agreement, Executive hereby acknowledges
that he may obtain and be entrusted with unpublished material confidential and
proprietary information relating to the Company's present and proposed business
and operations, including, without limitation, financial information relating
to the Company's present and proposed business and proposed business and
operations, the cost and pricing of the Company's services, the sales and
marketing plans and strategies of the Company, proposed Company's accounts and
the terms of all material agreements to which the Company is a party. All of
such information that may be obtained by Executive shall, for purposes hereof,
be referred to as "Confidential Information." Executive hereby agrees that,
unless the Confidential Information becomes publicly known through legitimate
origin not involving any improper act or omission of Executive, neither he, nor
any entity or person owned or controlled directly or indirectly by him, shall,
during the Term of this Agreement or thereafter, use for his own benefit or for
the benefit of others for any purpose and in any manner whatsoever, divulge to
any person, firm, corporation or other entity or otherwise publish or disclose
any Confidential Information (except as necessary in connection with the
performance of Executive's services under this Agreement). This provision shall
survive the expiration or termination of this Agreement. Notwithstanding the
foregoing, Executive shall not be in breach of this covenant with respect to
any use or disclosure of any Confidential Information by him which does not
cause any material damage to the Company or is required as a result of any
legal process served upon him in any judicial or administrative proceeding
(provided that the Company shall be given notice in time to enable it to object
to such disclosure) or was obtained by Executive from a third party without
such third party's breach of agreement or obligation of trust.
8.2 Executive hereby acknowledges and agrees that any actual or
threatened breach of the provisions of this Paragraph 8 may cause irreparable
harm to the Company and may not be remediable by an action at law for damages
and, therefore, the Company shall be entitled to seek, as a non-exclusive
remedy, in any court of competent jurisdiction, all equitable remedies
therefor, including, without limitation, a temporary or permanent injunction or
specific performance of the provisions hereof, without the necessity of showing
any actual damage or that monetary damages would not provide an adequate remedy
at law or posting a bond therefor. The provisions of this Paragraph 8 shall
survive the termination or expiration of the Term of this Agreement.
9. Representations and Warranties of Executive. The Executive represents
and warrants to the Company as follows:
9.1 All action on the part of the Executive necessary for the
authorization, execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby, has been taken and this
Agreement constitutes a valid and legally binding obligation of Executive,
enforceable in accordance with its terms, except as the same may be limited by
bankruptcy, insolvency,
7.
reorganization, moratorium, or other laws affecting generally the enforcement
of creditors' rights and by general principles of equity.
9.2 The authorization, execution, delivery and performance of this
Agreement, and the consummation of the transactions contemplated hereby, will
not result in any violation or be in conflict with or constitute, with or
without the passage of time and giving of notice, a default under any provision
of any instrument, judgment, order, writ, decree or agreement to which Executive
is a party or by which he is bound.
9.3 There is no action, suit, proceeding, or investigation pending, or
to the knowledge of Executive, currently threatened against Executive, in any
way relating to the validity of this Agreement or the right of Executive to
enter into or to consummate this Agreement and the transactions contemplated
hereby.
10. Representations and Warranties of the Company. The Company represents
and warrants to the Executive as follows:
10.1 All action on the part of the Company necessary for the
authorization, execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby, has been taken and this
Agreement constitutes a valid and legally binding obligation of the Company,
enforceable in accordance with its terms, except as the same may be limited by
bankruptcy, insolvency, reorganization, moratorium, or other laws affecting
generally the enforcement of creditors' rights and by general principles of
equity.
10.2 The authorization, execution, delivery and performance of this
Agreement, and the consummation of the transactions contemplated hereby, will
not result in any violation or be in conflict with or constitute, with or
without the passage of time and giving of notice, a default under any
provision of the Company's Certificate of Incorporation or By-Laws or any
instrument, judgment, order, writ, decree or agreement to which the Company is
a party or by which he is bound.
10.3 There is no action, suit, proceeding, or investigation pending,
or to the knowledge of the Company, currently threatened against the Company,
in any way relating to the validity of this Agreement or the right of the
Company to enter into or to consummate this Agreement and the transactions
contemplated hereby.
11. Arbitration. Except for any action under this Agreement for injunctive
or other equitable relief, all disputes, controversies and differences between
the parties hereto arising under this Agreement which the parties hereto are
unable to settle amicably shall be resolved in Los Angeles, California, by
binding arbitration in accordance with the Rules then in force of the American
Arbitration Association. The arbitration shall be held before three arbitrators
one of which shall be elected by the other two arbitrators, and the decision of
such arbitrators shall be deemed to be final, and judgment upon any award or
decision rendered thereby may be entered in any court, domestic or foreign,
having jurisdiction thereof.
12. Miscellaneous.
12.1 This Agreement constitutes the sole and entire agreement between
the parties hereto with respect to the subject matter hereof. This Agreement
may not be changed or modified except by an instrument in writing signed by the
party to be bound thereby.
12.2 All notices, consents, requests, demands and other communications
required or permitted to be given under this Agreement shall be in writing and
delivered personally, receipt prepaid,
8.
return receipt requested, addressed to the parties hereto as follows (or to
such other address and/or to such other persons as either of the parties hereto
shall specify by notice given in accordance with this provision):
(a) If to the Company:
EduLink, Inc.
000 Xxxxx Xxxxxxx Xxxxx
Xxxxx 000
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Attn: Chief Executive Officer
(b) If to Executive:
Xxx Xxxxxxxx
_____________________________
_____________________________
All such notices, consents, requests, demands and other communications shall be
deemed given when personally delivered as aforesaid, or, if mailed as
aforesaid, on the third business day after the mailing thereof or on the day
actually received, if earlier, except for a notice of a change of address which
shall be effective only upon receipt.
12.3 Neither party hereto may assign this Agreement or their
respective rights, benefits or obligations hereunder without the written
consent of the other party hereto. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their successors, heirs,
personal representatives, administrators, executors and permitted assigns.
Nothing contained in this Agreement is intended to confer upon any person or
entity, other than the parties hereto, and their respective successors, heirs,
personal representatives, administrators, executors or permitted assigns, any
rights, benefits, obligations, remedies or liabilities under or by reason of
this Agreement. Notwithstanding the foregoing, in the event of a sale of
securities or assets of the Company constituting a Change of Control, the
Company shall have the right to assign this Agreement to the person or entity
acquiring the stock or assets of the Company provided that any such person or
entity agrees in writing to assume and be bound by all of the terms and
provisions of this Agreement.
12.4 No waiver of this Agreement shall be effective unless in writing
and signed by the party to be bound thereby. The waiver by either party herto
of a breach of any provision of this Agreement, or of any representation,
warranty, covenant or obligation in this Agreement by the other party hereto
shall not be construed as a waiver of any subsequent breach or of any other
provision, representation, warranty, covenant or obligation of such other
party, unless the instrument of waiver expressly so provides.
12.5 This Agreement shall be governed by and construed in accordance
with the laws of the State of California with respect to contracts made and to
be fully performed therein, without regard to the conflicts of laws principles
thereof. By his execution hereof, Executive hereby consents and irrevocably
submits to the in personam jurisdiction of the American Arbitration Association
tribunal located in the City and County of Los Angeles, State of California and
agrees that any process in any action commenced in such tribunal under this
Agreement may be served upon him personally, by certified or registered mail,
return receipt requested, or by Federal Express or other courier service, with
the same
9.
full force and effect as if personally served upon him in Los Angeles City.
Each of the parties hereto hereby waives any claim that the jurisdiction of any
such tribunal is not a convenient forum for any such action and any defense of
lack of in personam jurisdiction with respect thereto. In the event of any such
action or proceeding, the party prevailing therein shall be entitled to payment
from the other party hereto of its reasonable counsel fees and disbursements in
an amount determined therein.
12.6 The parties hereto hereby agree that, at any time and from time
to time during the Term hereof, upon the reasonable request of the other party
hereto, they shall do, execute, acknowledge and deliver, or cause to be done,
executed, acknowledged and delivered, such further acts, deeds, assignments,
transfers, conveyances and assurances as may be reasonably required to more
effectively consummate this Agreement and the transactions contemplated thereby
or to confirm or otherwise effectuate the provisions of this Agreement.
12.7 If any term or provision of this Agreement, or the application
thereof to any person or circumstance, is finally determined by a court or
arbitration tribunal to any extent to be illegal, invalid or unenforceable, the
remainder of this Agreement, or the application of such term or provision to
persons or circumstances other than those as to which it is held illegal,
invalid or unenforceable, shall not be affected thereby and each term and
provision of this Agreement shall be valid and shall be enforced to the fullest
extent permitted hereunder and by law.
12.8 Except as required by applicable law or in connection with the
preparation of the Company's financial statements or documents, the Company
will not publish or disclose the compensation or other provisions of this
Agreement.
12.9 During and after the Term of this Agreement, the Company shall
defend, indemnify and hold Executive harmless from any claims, causes of
action, liabilities, damages, costs or expenses incurred by Executive based
upon or in connection with the performance of his services under this Agreement
to the fullest extent permitted by the laws of the State of California and the
Articles of Incorporation and By-Laws of the Company. This provision will
survive the expiration or termination of the Term of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement this
4th day of September, 1999.
EDULINK, INC.
By: /s/ Xxxxxxx Xxxxxxxxx
-----------------------
Xxxxxxx Xxxxxxxxx - CEO
/s/ Xxx Xxxxxxxx
----------------
Xxx Xxxxxxxx
EXHIBIT 10.7
AMENDMENT TO EMPLOYMENT AGREEMENT
Notwithstanding the provisions of the employment agreement dated as of
September 1, 1999 ("Agreement"), between Xxx Xxxxxxxx ("Executive") and EduLink,
Inc. ("Company") to the contrary, the parties agree as follows:
(1) Payment to Executive of the annual compensation described in
paragraph 4(a) of the Agreement shall commence on January 1,
2000, rather than September, 1999; accordingly, Executive waives
any claims to compensation during the period September 1, 1999
through December 31, 1999.
(2) Paragraph 5.3 of the Agreement shall be amended to provide that:
a. The words "Warrant" shall be substituted for the word
"Option" wherever it appears.
b. The number of Warrants applicable to the Deliverable
described as "Design Phase Elements" shall be reduced from
"200,000" to "50,000, " and the number of Warrants
applicable to the Deliverable described as "Build-Out
Elements" shall be reduced from "200,000" to "50,000."
(3) A new paragraph 5.5 shall be deemed added to the Agreement as
follows:
"5.5 In consideration of Executive's execution of this Agreement,
Company grants to Executive 300,000 Warrants to purchase one
share of Company's Stock per Warrant at an exercise price of
$.25 per share."
Dated: As of February 1, 2000.
EDULINK, INC.
By: /s/ Xxxxxxx Xxxxxxxxx
----------------------
XXXXXXX XXXXXXXXX, CEO
/s/ Xxx Xxxxxxxx
----------------------
XXX XXXXXXXX
EXHIBIT 10.8
CONTRACT AGREEMENT
EDULINK/SAIC-2000-001
INTRODUCTION
This Contract Agreement, effective October 1, 1999 is made between EduLink, Inc.
(hereinafter referred to as "Buyer"), a corporation with principal offices in
Westlake Village, California, and Science Applications International Corporation
(hereinafter referred to as "Seller"), a Delaware Corporation with principal
offices in San Diego, California. The work, defined by Individual Task Order
Statement of Work and Schedule will be performed on a Time and Material basis,
in accordance with Schedule A (Specific Terms and Conditions), and any
referenced documents listed in Section 14.0 of this agreement.
SCHEDULE A
SPECIFIC TERMS AND CONDITIONS
1.0 TERM AND PERIOD OF PERFORMANCE
The term of this Agreement is October 1, 1999 to September 30, 2000, unless
amended in writing by mutual agreement of the parties. The period of performance
for Task Orders issued under this Agreement will be as defined in the Task
Order. Seller is not obligated to continue work or provide services and Buyer is
not obligated to compensate Seller for expenses incurred or commitments made
before or after these dates.
1.1 LABOR RATES
A Not-to-Exceed price will be negotiated for each Task Order issued under this
Agreement in accordance with the following Time and Material (T&M) rates:
Labor Category Labor Rate
-------------- ----------
Program Manager $200.00/hour
Senior Technical Manager $150.00/hour
Mid-level Technical Staff $120.00/hour
Junior Technical Staff $90.00/hour
Project Control/Administrative $68.00/hour
Task Orders issued hereunder may include one or more labor categories. The
hourly rates shall remain fixed for the term of the Agreement.
1.2 FUNDING
Funding will be established by individual Task Orders. Unless this Agreement is
amended in writing by mutual agreement of the parties. Seller is not obligated
to incur expenses or make commitments in excess of the amount stated in each
Task Order and Buyer is not obligated to compensate Seller beyond the amount
stated.
2.0 ORDERING
(a) Any supplies or services to be furnished under this agreement shall be
ordered by issuance of a Task Order by the individual designated in
Section 2.2
(b) There is no limit on the number of Task Orders that may be issued. The
Buyer may issue Task Orders requiring delivery to multiple destinations
or performance at multiple locations.
(c) Any Task Order issued during the effective period of this Agreement and
not completed within that period shall be completed by the Seller
within the time specified in the Task Order. The Agreement shall govern
the Seller's and the Buyer's rights and obligations with respect to that
Task Order to the same extent as if the Task Order were completed during
the Agreement's effective term.
2.1 TASK ORDERS
(a) Only the Buyer's designated Representatives, as set forth in paragraph
2.2 hereto, are authorized to place orders hereunder.
(b) All delivery orders issued hereunder are subject to the terms and
conditions of this Agreement. The Agreement shall control in the event
of conflict with any task order. When mailed, a Task Order shall be
"issued" for purposes of this Agreement at the time Buyer deposits the
order in the mail, or, if transmitted by other means, when physically
delivered to Seller.
(c) In addition to any other data that may be called for in the agreement,
the following information shall be specified in each Task Order, as
applicable:
Date of Order Period of Performance Buyer Furnished
Material Value
Contract and Order Number Place of Performance Estimated
Categories/Hours
Not-to-Exceed Price
(d) The information contained in each Task Order respecting to labor
categories/hours, period of performance, and the Not-to-Exceed price
shall be the result of either Buyer's estimate or the negotiated
agreement reached by the parties in advance of Task Order issuance.
(e) Orders may be modified by written agreement between Buyer's Contract
Representative and the Seller. Modifications to task orders shall
include the information set forth in paragraph c above, as applicable.
Orders may be modified orally by Buyer's Contract Representative in
emergency circumstances. Oral modifications shall be confirmed by
issuance of a written modification within seven (7) working days from
the time of the oral communication modifying the order.
2.2 AUTHORIZED ORDERING AGENTS
In addition to the Seller Representative listed in Section 3.0, the following
Edulink, Inc. employees are hereby designated Authorized Ordering Agents for
the supplies and/or services listed in this Agreement, subject to the dollar
limits indicated below:
Name: Xxx Xxxxxxxx Dollar Limit Per Order: TBD
Name: Xxxxxx Xxxxxxxx Dollar Limit Per Order: TBD
Name: ______________ Dollar Limit Per Order: ________
Authority of the above named individuals to act as Ordering Agents for Buyer
is limited to this Agreement. In the event that the Seller performs work under
instructions from individuals other than those listed above, Seller is hereby
notified that payment for such work may not be made.
2.3 INSPECTION
All materials furnished and services performed pursuant hereto shall be subject
to inspection and test by Buyer and its agents during the period of
performance. In the event that material furnished or services supplied are not
performed in accordance with the specifications and instructions of Buyer,
Buyer may require Seller to replace or correct services or materials. The cost
of replacement or corrections shall be determined under the Payment clause of
this contract, but the "hourly rate" for labor hours incurred in the
replacement or correction shall be reduced to exclude that portion of the rate
attributable to profit. If the
Seller fails to proceed with the reasonable promptness within the Not-to-Exceed
price, the Buyer may terminate the contract for default.
2.4 INVOICES
Invoices shall be prepared in duplicate and contain the following information:
contract number, task order number, labor categories, hourly rate, labor hours,
extended totals by category, material and other direct costs detail shall be
separated from labor costs. Invoices will be mailed to:
Edulink, Inc.
0000 Xxxxxxxxxx Xxxx
Xxxxxxxx Xxxxxxx, XX 00000
Invoices shall clearly reference a unique invoice number on each invoice, period
of incurred costs, and the date of the invoice. Invoices shall include the
"Amount Previously Billed," the "Amount of this Invoice," and the "Total Amount
Billed to Date" for each labor category.
Invoices not paid within 45 days shall be subject to 1.5% interest charge.
2.5 PAYMENT
The Buyer shall pay the Seller upon the submission of invoices approved by the
Buyer as follows:
(a) Hourly Rate. The amounts shall be computed by multiplying the appropriate
hourly rates in Section 1.1 by the number of direct labor hours
performed. Invoices may be submitted once each month to the Buyer. The
Buyer shall pay the invoice within 30 days after the approval by Buyer.
Overtime rates are not authorized unless negotiated and approved by
Buyer.
(b) Materials and Other Direct Costs. Materials and other direct costs, such
as travel, will be reimbursed on actual cost basis with reasonable and
allocable materials handling costs and profit included in the charge to
the extent that they are clearly excluded from hourly rates.
(c) Total Cost. It is estimated that the total cost to the Buyer for the
performance of this contract shall not exceed the ceiling price. The
Seller agrees to use its best efforts to perform the work within the
ceiling price of each task order. If at any time the Seller has reason to
believe that the total price to the Buyer will be substantially greater
or less than the ceiling price, the Seller shall notify the Buyer and
provide a revised estimate for performing the work.
(d) If acceptable by Buyer, Seller prefers invoice payment via Electronic
Funds Transfer (EFT) through the Treasury Financial Communications
System. The following information is provided:
Science Applications International Corporation
00000 Xxxxxx Xxxxx Xxxxx, Xxx Xxxxx, XX 00000
Contact Person: Xxxx X. Xxxxx
Phone Number: (000) 000-0000
Name of Financial Institution: Bank of America, NT&SA
Address: 000 "X" Xxxxxx, Xxxxx 000, Xxx Xxxxx, XX 00000
ABA Identifier: 000000000
Telegraphic Abbrv: BNKAMER
Account Number: 14520-00006
Please also reference:
Project Number: (to be furnished with first invoice)
"Advice San Diego Corporate Banking Number 1450"
Should EFT payment not be available, please remit payments to the
following address:
Science Applications International Corporation
Drawer CS
Xxxxxxx, XX 00000-0000
2.6 YEAR 0000 XXXXXXXX
(a) SAIC's standard Year 2000 warranty specifically disclaims the following:
(i) System wide warranty responsibility,
(ii) Warranty responsibility for any items (i.e. COTS software) not
developed by SAIC or our vendors and subcontractors,
(iii) Warranty responsibility for corrupted inputs that are not Year 2000
compliant.
The following clauses are incorporated by reference into each task
order.
(a) Year 2000 Warranty
Seller warrants that the services performed under this Contract shall be
performed with that degree of skill and judgment normally exercised by
recognized professional firms performing services of a similar nature.
Buyer's exclusive remedy for breach of this warranty is to have Seller
re-perform any services whose non-compliance with this warranty is made
known by the Buyer to Seller in writing within ninety (90) days after
Buyer's acceptance of the non-compliant services.
Except as provided in the immediate paragraph above, Seller disclaims any
warranty, responsibility, or liability for the Year 2000 compliance or
functionality of Buyer's hardware, software, firmware or computer
systems, and disclaims any warranty that any services provided will
achieve Year 2000 compliance or functionality with Buyer's systems. The
provisions of this Year 0000 Xxxxxxxx shall take precedence over any
inconsistent provisions elsewhere in this Contract including its exhibits
and attachments.
(b) Disclaimer of Impiled Warranties
THE EXPRESS WARRANTIES, IF ANY, CONTAINED IN THE CONTRACT ARE THE SOLE
AND EXCLUSIVE WARRANTIES PROVIDED BY SELLER, SELLER SPECIFICALLY
DISCLAIMS, AND CUSTOMER, WAIVES ANY OTHER WARRANTIES, INCLUDING BUT NOT
LIMITED TO WARRANTIES OR MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE, AS WELL AS ANY WARRANTIES ALLEGED TO HAVE ARISEN FROM CUSTOM
USAGE, OR PAST DEALINGS BETWEEN THE PARTIES.
(c) Limitation of Liability
Buyer agrees that, Seller's total liability to Buyer and all liabilities
arising out of or related to this contract, from any cause or causes, and
regardless of the legal theory, including breach of contract, warranty,
negligence, strict liability, or statutory liability, shall not, in the
aggregate, exceed the amounts paid to Seller under the Contract, or under
the specific task order at issue, whichever is less.
In no event shall either Seller or Buyer be liable to the other for any
special, indirect, incidental, consequential, or economic (including, but
not limited to lost profits and lost business opportunity) damages,
regardless of the legal theory under which such damages are sought, and
even if the parties have been advised of the possibility of such damages.
Any claim by Buyer against Seller relating to this contract, other than
in warranty, must be made in writing and presented to Seller within one
(1) year after the earlier of: (1) the date on which Buyer accepts the
deliverable at issue; or (2) the date on which Seller completes
performance of the services specified in the contract. Any claim under
warranty must be made within the time specified in the applicable
warranty clause.
(d) Limitation on Dissemination of SAIC Commercial Work Product
Seller and Buyer expressly exclude any and all third parties form the
benefits of this Agreement. In the event that Buyer furnishes any Seller
work product to a person who is not a party to this Agreement, Buyer
agrees to defend, indemnity, and hold harmless Seller from and against
all claims, damages, losses, costs and expenses (including reasonable
attorney's fees) of actions brought by third parties, and arising out of
or relating to such third party's use or distribution of, or reliance
upon, Seller's work product.
3.0 TECHNICAL AND CONTRACTUAL REPRESENTATIVES
The following authorized representatives are hereby designated for this
Contract:
Seller: Science Applications Buyer: Edulink, Inc.
International Corporation
Technical: Xxxxx Xxxxx Technical: /s/ Xxx Xxxxxxxx
----------------------
Contractual: Xxxxxx Xxxxxxx Contractual: /s/ Xxxxxx Xxxxxxxx
--------------------
3.1 CONTACTS
Contacts with Buyer which affect the contract prices, schedule, statement of
work, and contract terms and conditions shall be made with the authorized
contractual representative. No changes to this Contract shall be binding upon
Buyer unless incorporated in a written modification to the Contract and signed
by Buyer's contractual representative.
3.2 CHANGES
Buyer may, by written notice to Seller at any time before completion of this
contract, make changes within the general scope of this contract in any one of
the following: (a) drawings, designs, or specifications; (b) quantity, (c)
delivery; (d) method of shipment or routing and (e) make changes in the amount
of Buyer furnished property. If any such change causes a material increase or
decrease in any hourly rate or the Not-to-Exceed price, or the time required for
the performance of any part of the work under this contract, the Buyer shall
make an equitable adjustment in the hourly rates of delivery schedule, or both,
and shall modify the contract Not-to-Exceed price. As a condition precedent to
any equitable adjustment, the Seller must notify Buyer in writing of any request
for adjustment within thirty (30) days from the date Seller receives notice from
Buyer of a change, or from the date of any act of Buyer which Seller considers
to constitute a change. Failure to are to any adjustment shall be a dispute and
shall be settle through arbitration. Seller shall proceed with the work ad
changed without interruption and without awaiting settlement of any such claim.
3.3 DISCLOSURE
Seller shall not disclose information concerning work under this Contract to any
third party; unless such disclosure is necessary for the performance of the
contract effort. No news, releases, public announcements, denial or confirmation
of any part of the subject matter of this Contact or any phase of any program
hereunder shall be made without prior written consent of Buyer. The restrictions
of this paragraph shall continue in effect upon completion or termination of
this Contract for such period of time
as may be mutually agreed upon in writing by the parties. In the absence of a
written established period, no disclosure is authorized. Failure to comply with
the provisions of this Clause may be cause for termination of this Contract.
4.0 ASSIGNMENT OF CONTRACTS
This Contract is not assignable and shall not be assigned by Seller without the
prior written consent of Buyer. Further, Seller agrees to obtain Buyer's
approval before subcontracting this order or any substantial portion thereof;
provided, however, that this limitation shall not apply to the purchase of
standard commercial supplies or raw materials.
5.0 INFRINGEMENT INDEMNITY
In lieu of warranty by Buyer or Seller against infringement, statutory or
otherwise, it is agreed that Seller shall defend at its expense, any suit
against Buyer or its customers based on a claim that any item furnished under
the order or the normal use of sale thereof infringes any U.S. Letters patent or
copyright, and shall pay costs and damages finally awarded in any such suit,
provided that Seller is notified in writing of the suit and give authority,
information, and assistance at Seller's expense for the defense of the same. If
the use or sale of said item is enjoined as a result of such suit, Seller, at no
Expense to Buyer, shall obtain for Buyer and its customers the right use and
sell said item or shall substitute an equivalent item acceptance to the Buyer
and extend this patent indemnity thereto.
6.0 PROPRIETARY INFORMATION, TOOLS, MATERIALS, ETC.
(a) Seller agrees it will keep confidential and not use any material,
jigs, dies, fixtures, molds, patterns, tape, gauges, other equipment,
designs, sketches, specifications, drawings, computer programs and
software, or other data or information furnished by Buyer for any purpose
whatsoever other than as herein specified, including but not limited to
the manufacturer of large quantities, without prior written consent of
Buyer. All materials, jigs, dies, fixtures, molds, patterns, tapes,
gauges, other equipment, design, sketches, specifications, drawings,
computer programs and software, or other data or information furnished by
Buyer, whether loaned to Seller or fabricated, manufactured, purchased,
or otherwise acquired by Seller for the performance of this Contract and
specifically charged to Buyer are property of the Buyer. They are to be
marked for identification as Buyer may designate an upon completion of
termination of this Contract shall be returned to Buyer in good
condition, reasonable wear only excepted, together with all spoiled and
surplus material, unless otherwise directed in writing by Buyer. Seller
agrees to replace, at its expense, all such items not so returned. Seller
shall make no charge for any storage, maintenance or retention of such
property of Buyer. Seller shall bear all risk of loss for the Buyer's
property in Seller's possession.
(b) If Buyer furnishes any material for fabrication hereunder, Seller agrees:
(i) not to substitute any other material in such fabrication without
Buyer's prior written consent, (ii) that title to such material shall not
be affected by incorporation in or attachment to any other property; and
(iii) to state and warrant on its packing sheet and invoice for final
parts: "All materials furnished by Buyer on the order (except that which
becomes normal industrial waste or was replaced at Seller's expense) has
been returned in the form of parts or held as unused material for Buyer's
disposition".
7.0 DISPUTES
Any dispute or disposed of shall be determined in the following manner.
(a) Buyer and Seller agree to enter into negotiations to resolve any dispute.
Both parties agree to negotiate in good faith to reach a mutually
agreeable settlement within a reasonable amount of time.
(b) If negotiation is unsuccessful, Buyer and Seller agree to enter into
binding Arbitration. The American Arbitration Associations (AAA)
Commercial Arbitration Rules (most recent edition) are to govern this
Arbitration. The Arbitration shall take place in the Commonwealth of
Virginia. The Arbitrator shall be bound to follow the applicable contract
provisions and Virginia law in adjudicating the dispute. It is agreed by
both parties that the Arbitrator's decision is final, and that no party
may take any action, judicial or administrative, to overturn this
decision. The judgment rendered by the Arbitrator may be entered in any
court having jurisdiction thereof.
Pending any decision, appeal or judgment referred to in this provision or the
settlement of any dispute arising under this Contract, Seller shall proceed
diligently with the performance of this Contract.
8.0 DEFAULT
(a) The Buyer may, by written notice of default to the Seller, terminate the
whole or any part of this Contract in any one of the following
circumstances; (i) if Seller fails to make progress in the work so as to
endanger performance delivery of the suppliers or to perform the services
within the time specified herein or any extension thereof; or (ii) if
Seller fails to perform any of the other provisions of this Contract in
accordance with its terms, and in either of these two circumstances does
not cure such failure within a period of 10 days (or such longer period
as) Buyer may authorize in writing) after receipt of notice from the
Buyer specifying such failure; or (iii) Seller becomes insolvent or the
subject of proceedings under any law relating to bankruptcy or the relief
of debtors or admits in writing its inability to pay its debts as they
become due.
(b) If this Contract is so terminated, Seller shall submit a final
termiation settlement proposal to the Buyer. The Seller shall submit the
proposal promptly but no later than six (6) months from the effective
date of the termination. If Seller fails to submit the proposal within
the time allowed, the Buyer may determine the amount, if any, due the
Seller because of termination. The amount will be determined as follows
(i) An amount for direct labor hours determined by multiplying the number
of direct labor hours expended before the effective date of termination
by the hourly rates, less profit, in the schedule, less any hourly rate
payments already made to the Seller, (ii) An amount for material expenses
incurred before the effective date of termination, not previously paid to
the Seller. Buyer may procure or otherwise obtain upon such terms and in
such manner as Buyer may deem appropriate, supplies or services similar
to those terminated, Seller, subject to the exceptions set forth below;
shall be liable to Buyer for any excess costs of such similar supplies or
services.
(c) Seller shall transfer title and deliver to Buyer, in the manner and to
the extent requested in writing by Buyer at or after terminations such
complete articles, partially completed articles and materials, parts,
tools, dies, patterns, jigs, fixtures, plans, drawings, information and
contract rights as Seller has produced or acquired for the performance of
the terminated part of this Contract, and Buyer will pay Seller the
contract price for compete articles delivered to and accepted by Buyer
and the fair value of the other property of Seller so requested and
delivered.
(d) Seller shall continue performance of this Contract to the extent not
terminated. Buyer shall have no obligations to Seller with respect to the
terminated part of the Contract except as herein provided. In case of
Seller's default, Buyer's rights as set forth herein shall be in addition
to Buyer's other rights although not set forth in this Contract.
(e) Seller shall not be liable for damages resulting from default due to
causes beyond the Seller's control and without Seller's fault or
negligence, provided, however, that if Seller's default is caused by the
default of a contractor or supplier, and without the fault or negligence
of either of them and, provided further, the supplies or services to be
furnished by the contractor or supplier were not obtainable from other
sources.
9.0 GENERAL RELATIONSHIP
Seller agrees that in all matters relating to this Contract it shall be
acting as independent contractor and shall assume and pay all liabilities and
perform all obligations imposed with respect to the performance of this
Contract. Seller shall have no right, power or authority to create any
obligation, expressed or implied, on behalf of Buyer and shall have no authority
to represent Buyer as an agent.
10.0 NON-WAIVER OF RIGHTS
The failure of Buyer to insist upon strict performance of any of the terms and
conditions in the Contract, or to exercise any rights or remedies, shall not be
construed as a waiver of its rights to assert any of the same or to rely on any
such terms or conditions at any time thereafter. The invalidity in whole or in
part of any term or condition of this contract shall not affect the validity of
other parts hereof.
11.0 APPLICABLE STATE LAW AND COMPLIANCE
This Contract shall be governed by and construed in accordance with the law of
the Commonwealth of Virginia. Seller agrees to comply with the applicable
provisions of any Federal, state or local law or ordinance and all others, rules
and regulations issued thereunder.
12.0 ORDER OF PRECEDENCE
The document identified below is hereby incorporated by reference. In the vent
of an inconsistency or conflict between or among the provisions of the Contract,
the inconsistency shall be resolved by giving precedence to this Contract.
13.0 CONDUCT OF OPERATIONS
Buyer represents and warrants to Seller that Buyer conducts its business and
operations in compliance with all applicable Federal, state and local laws
relating to or governing gambling, lotteries, games of chance and the gaming
industry generally.
14.0 ENTIRE AGREEMENT
Upon acceptance of this Contract, Seller agrees that the provisions under this
Contract, including all documents incorporated herein by references, shall
constitute the entire Agreement between the parties hereto and supersede all
prior agreements relating to the subject matter hereof. No prior or
contemporaneous statement or representation, whether oral or written, has been
relied upon by the parties, except as expressly stated herein. This contract may
not be modified or terminated orally, and no modification or any claimed waiver
of any of the provisions hereof shall be binding unless in writing and signed by
the party against whom such modification or waiver is sought to be enforced.
In witness whereof, the duly authorized representatives of Buyer and the Seller
have executed this Contract on the Dates shown.
BUYER: SELLER:
Edulink, Inc. Science Applications
International Corporation
By: /s/ By:
------------------------------ --------------------------
Name: /s/ Xxxxxx Xxxxxxxx Name: Xxxxxx Xxxxxxx
---------------------------- ------------------------
Title: President & Chief Operating Title: Senior Contracts
Officer Representative
--------------------------- ----------------------
Date: 9/23/99 Date:
---------------------------- ------------------------
SAMPLE TASK ORDER FORMAT
TASK ORDER NUMBER 001
UNDER CONTRACT AGREEMENT EDULINK/SALC-2000-001
Date:
-------------
Period of Performance:
---------------
Buyer Furnished Material:
---------------
Description of Work to be Performed:
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Labor Category Rate Estimated Hours Total Not-to-Exceed Price
-------------- ---- --------------- -------------------------
Program Manager $200.00/hour
Senior Technical Manager $150.00/hour
Mid-level Technical Staff $120.00/hour
Junior Technical Staff $90.00/hour
Project Control/Admin. $68.00/hour
Materials and Other Direct Costs. Materials and other directs costs, such as
travel, will be reimbursed on actual cost basis with reasonable and allocable
materials handling costs and profit included in the charge to the extent that
they are clearly excluded from hourly rates.
In witness whereof, the duly authorized representatives of Buyer and the Seller
have executed this Task Order on the dates shown.
BUYER: SELLER:
Edulink, Inc. Science Applications
International Corporation
By: By:
------------------------------ ----------------------------------
Name: Name: Xxxxxx Xxxxxxx
---------------------------- --------------------------------
Title: Title: Senior Contracts Representative
--------------------------- ------------------------------
Date: Date:
---------------------------- --------------------------------
[SAIC LOGO]
Science Applications International Corporation
An Employee-Owned Company
February 8, 2000 CLF10753
Edulink, Inc.
0000 Xxxxxxxxxx Xxxx
Xxxxxxxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xx. Xxxxxx Xxxxxxx
Reference: Contract No. Edulink/SAIC-2000-001, Task Order 1
Subject: Modification 1
Dear Xx. Xxxxxxx:
Science Applications International Corporation (SAIC) respectfully requests a
modification to the subject task order. Currently the task order specifies
requirements for Program Manager, Mid-level Technical Staff, and Project
Control/Admin hours and trips from Baltimore and Orlando to Los Angeles. SAIC
requests authorization to utilize all of the labor categories defined in the
contract as well as additional travel. The hours would be reallocated within the
original task order funding ceiling for direct labor, and travel would be
reimbursed at actual cost plus reasonable handling costs.
This modification would allow the flexibility that is necessary to address the
dynamic nature of the requirements and design effort.
If you authorize the modification, please indicate your concurrence by signing
the acknowledgement block at the end of this letter. If you have any questions
or concerns regarding the above, I may be contacted at (000) 000-0000, by
facsimile at (000) 000-0000, or by e-mail at xxxxxx.x.xxxxxxx@xxxx.xxx.
Sincerely, AUTHORIZATION
SCIENCE APPLICATIONS /s/ Xxxxxx X. Xxxxxxxx
INTERNATIONAL CORPORATION ----------------------------
Signature
/s/ Xxxxxx B, Xxxxxxx /s/ Rinaco X. Xxxxxxxx
-------------------------------- ----------------------------
Xxxxxx X. Xxxxxxx Print/Type Name
Senior Contracts Representative
President
----------------------------
cc: X. Xxxxxxx, X. Xxxxx/SAIC Title
ltr. log/file
2/8/00
----------------------------
Date
0000 Xxxxxxxxx Xxxxx, X.X. Xxx 0000, XxXxxx, Xxxxxxxx 00000 * (000) 000-0000
EXHIBIT 10.9
As of February 1, 2000
Xxxx Xxxx
University of California, Los Angeles
National Center for History in the Schools
Department of History
0000 Xxxxxx Xxxx
000 Xxxxxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Dear Xx. Xxxx:
This letter shall serve to memorialize the agreement between you and us,
as follows:
0 We hereby engage you to render your services as an independent
contractor, and you hereby accept such engagement, to assist us in
supervising and guiding those individuals (the "Design Team") engaged
by us to design the content of an interdisciplinary, cross age,
inquiry based 7th and 8th grade curriculum which satisfies core
curriculum standards. In this connection, you agree to supervise the
Design Team so as to ensure that the content to be delivered to us by
the Design Team, consisting of ten units ("Units") with approximately
70 lessons and 560 activities, plus approximately 40 inquiry and
design based investigative questions for a contemplated 3-D virtual
world (herein collectively called the "Content"), shall conform to the
National Standards for United States History (in an international
context) and that the various activities shall be consistent with the
types of activities set forth in the two volumes of "Bring History
Alive: Sourcebooks for Teaching World and United States History." In
addition, you agree to supervise the Design Team so as to ensure that
any interdisciplinary content (i.e. content relating to subjects other
than History, such as Mathematics and Science) included within any of
the above-described approximate number of 560 activities or 40
investigative questions shall not dilute or adversely effect the
delivered content's acceptability in terms of conforming to the
National Standards for United States and World History. It is
specifically understood that you shall not be responsible for guiding
the Design Team in terms of ensuring whether any of the incorporated
interdisciplinary content conforms with the National Standards for
subjects other than History, such as Mathematics and Science.
1 In consideration of the rendition of your services, we shall pay you
the sum of $3,000 per month, commencing as of February 1, 2000, for a
period of twelve consecutive months or until such time as the Content
is delivered to and approved by us, whichever first occurs. Such
$3,000 monthly payment shall be deemed an advance against a fee equal
to $100 per hour for each hour of services rendered by you hereunder.
You agree to log the time expended by you on our behalf and send us a
xxxx reflecting the time so expended within 10 days after the end of
each calendar month and within 15 days following the end of each
three-month period, we shall pay you the difference between the total
fees due you and the total sums theretofore paid to you by us;
provided, however, you agree that at such time as you estimate that
the time you must expend on a monthly basis will exceed 40 hours, you
shall notify us so that we may have the opportunity to review with you
the work situation in depth.
2 In addition, we shall pay you bonuses equal to seven and one-half
percent (7.5%) of the gross royalties actually earned by the U.C.
Regents ("UCLA") pursuant to any license between UCLA and EduLink
relating to the intellectual property so licensed to us by UCLA
relating specifically to history curriculum for the 7th and 8th
grades. This 7.5% will not apply to "advances" paid to UCLA but will
apply to UCLA's gross earnings under the license. The bonus will be
paid as and when payments/accountings are to be rendered to UCLA under
the license, if any.
3 We agree that we shall take reasonable steps to ensure that the
individual members of the Design Team are willing and able to comply
with your guidance so that you are able to satisfy your obligations to
us.
4 In addition to the foregoing, we hereby grant to you Warrants to
purchase 1,000,000 shares of our Common Stock at an exercise price of
ten cents ($.10) per share, such Warrants to vest at the rate of
100,000 Warrants for each Unit of Content delivered to and approved by
us hereunder. The documentation reflecting the issuance of such
Warrants shall be issued to you within the next 60 days and such
documentation (as well as documentation relating to any warrants
described in paragraphs 6 and 7 below) shall contain all of those
provisions customarily included in such documents, including without
limitation, provisions relating to the term by which such Warrants may
be exercised (i.e. four years from issuance) and the restrictions on
sale of the Warrants or the underlying securities.
5 You agree to serve on EduLink's "Curriculum Committee" and will
receive additional Warrants to purchase 500,000 shares of EduLink's
Common Stock at an Exercise Price of $.20 per share. In addition, you
agree to assist us in securing the services of at least three
pre-approved individuals to serve on the Curriculum Committee, one to
represent Science, one to represent Mathematics, and one to represent
English Literature; for your assistance, you shall receive an
additional 1,000,000 Warrants, one-third of which shall vest as each
of such
individuals agrees to serve on such Curriculum Committee, provided the
agreements for such services are obtained on or before April 30, 2000.
The exercise price applicable to each of such Warrants will equal
$.20.
6 You shall also have the right to render services similar to those
described in paragraph 1 above for and in connection with our creation
of curriculum for three additional grade groupings: 9th/10th;
11th/12th; 4th/5th/6th. The terms of agreement with respect to fees
payable to you would be the same as those set forth in paragraph 2
above (plus the 7.5% bonus described in paragraph 3 above if material
is licensed from UCLA relating to history curriculum for each
applicable grade grouping), such fees to be subject to increases as
determined and agreed upon after good faith negotiations between you
and us; and you shall also be entitled to additional Warrants to
purchase 1,000,000 shares of EduLink's Common Stock per each grade
grouping, such Warrants to vest at the rate of 100,000 Warrants per
Unit delivered, up to 10 Units per grade grouping. The exercise prices
will equal 75% of the average market price of EduLink's Common Stock
on the close of business during the five business days immediately
preceding the date the applicable Warrants vest.
7 You agree that as between you and us, all of the results and proceeds
of your services shall be our sole and exclusive property, from
inception, inclusive of any copyrights therein, and for this purpose
any such results and proceeds shall be considered a "work for hire."
8 You agree that we shall hve the right to use your name, likeness and
biographical data in our various publicity material concerning our
business activities so as to reflect your engagement hereunder.
9 Entire Agreement. This Agreement contains the entire Agreement between
you and us, and there are no other promises or conditions either oral
or written. This Agreement supersedes any prior written or oral
agreements or communications between the parties.
10 This Agreement may be modified or amended only if made in writing and
signed by both parties.
If the foregoing confirms your understanding of our Agreement, please sign this
letter in the space provided below.
Very truly yours,
EduLink, Inc.
By: ________________________
Xxxxxxx Xxxxxxxxx
AGREED TO AND ACCEPTED
______________________
Xxxx Xxxx
EXHIBIT 10.10
As of February 1, 2000
Xxxxxxxx XxXxxxx
d/b/a XxXxxxx and Associates
0000 Xxxxxxxxxx Xxxxxx
Xxxxx Xxxxxx, Xxxxxxxxxx 00000
Dear Xx. XxXxxxx:
This letter shall serve to memorialize the agreement between you and us,
as follows:
1. You and individuals furnished by you are in the business of rendering
consulting services to educational institutions and businesses,
specializing in matters related to learning and curriculum, including:
course design; curriculum design; instructor development; distance
learning implementation; educational assignment; structuring and
coordination of educational programs; recruitment of instructors and
implementation of training; and development of tutorial and counseling
programs.
2. Commencing on February 1, 2000, you, together with those content
development specialists designated by you from time to time and
approved by us from time to time ("Specialists"), shall provide us
with the content development of an interdisciplinary, cross-age,
inquiry-based 7th/8th grade curriculum. "Content development," for
purposes herein, includes: responsibility to core curriculum
standards; collation of our previous course content; integration of
educational software applications required by our current and future
agreements with our content providers; presentation and final editing
of content for fulfillment of deliverable agreement schedule;
recruitment and training of online tutors as needed. You and we shall
mutually determine a
product delivery schedule for the above-described content to be so
developed by you and such Specialists and shall memorialize such
schedule in writing signed by you and us (the "Deliverable Schedule").
3. In consideration of the services to be provided pursuant to the
provisions of paragraph 2 above, we shall pay you the total sum of
$148,400, which sum shall be disbursed in installments based upon the
satisfactory delivery to us of the content so developed hereunder
pursuant to the Deliverable Schedule and payment schedule to be
mutually agreed upon by you and us. In this connection, you agree that
payments to you pursuant to this paragraph 3 shall release us of any
obligation to make any payments to the Specialists and that you shall
be responsible for making all required payments to such Specialists.
In addition, you agree that the results and proceeds of services
rendered hereunder by you and the Specialists shall be deemed our sole
and exclusive property, from inception, inclusive of all copyrights
therein, and for this purpose shall be considered a "work for hire."
4. In addition to the foregoing, you shall render the following services
for us:
(a) Schedule and manage the Specialists;
(b) Liaison and interface between the Specialists and us and our
multiple content providers;
(c) Assist us in exploring federal and private funding sources for our
continued research and development;
(d) Aggregate and analyze student assessments of the curriculum
developed by you and the Specialists;
(e) Provide qualitative and quantitative assessments of student, parent
and teacher responses to our content, services and products, as
developed;
(f) Identify possible schools to participate in our Beta Test and
service launch;
(g) Identify possible corporate alliances;
(h) Assist in planning for and scheduling additional rollouts of
content for other grade levels (i.e. 4th through 6th; 9th through
12th).
5. In consideration of the services to be provided by you pursuant to
paragraph 4 above, we shall pay you the sum of $3,000 per month,
commencing on the first day of February, 2000 (receipt of such
February monthly payment you hereby acknowledge) and continuing for a
period of twelve consecutive months, or until this Agreement is
terminated pursuant to the provisions below.
6. This Agreement may be terminated by us prior to January 31, 2001 if
you have defaulted in any of your material obligations hereunder,
including without limitation, your failure or the failure of the
Specialists to satisfy the delivery requirements set forth in the
Deliverable Schedule to be mutually agreed upon, as set forth above.
7. Upon termination of this Agreement, payments shall cease, provided,
however, that you shall be entitled to payments for periods and
partial periods that occurred prior to the date of termination and for
which you have not yet been paid. Any extraordinary expenses shall be
submitted to us for pre-approval (in writing) and shall be paid if so
approved. This Agreement shall terminate automatically upon your
completion of the services required by this Agreement.
8. Confidentiality. You recognize that you have and will have the
following information relating to us and our business:
* Products
* Future plans
* Business affairs
* Trade secrets
* Customer lists
* Copyrights
You also recognize that the foregoing information and other proprietary
information (collectively "Information") are valuable, special, and unique
assets. You agree that neither you nor any Specialist will at any time or in
any manner, either directly or indirectly, use any Information for your or such
Specialist's own benefit, or divulge, disclose or communicate any Information
in any manner to any third party without our prior written consent. You shall
protect the Information and treat it as strictly confidential.
9. You agree that we shall have the right to use your, and each
Specialist's, name, likeness and biographical data in our various
publicity material concerning our business activities so as to reflect
your engagement hereunder.
10. You shall cause each specialist to execute such documentation which
ensures our rights to the results and proceeds of their services as we
may reasonably from time to time require.
11. Entire Agreement. This Agreement contains the entire Agreement between
you and us, and there are no other promises or conditions either oral
or written. This Agreement supersedes any prior written or oral
agreements or communications between the parties.
12. This Agreement may be modified or amended only if made in writing and
signed by both parties.
If the foregoing confirms your understanding of our Agreement, please sign
this letter in the space provided below.
Very truly yours,
EduLink, Inc.
By: /s/ Xxxxxxx Xxxxxxxxx
---------------------
Xxxxxxx Xxxxxxxxx
AGREED TO AND ACCEPTED
/s/ Xxxxxxxx XxXxxxx
----------------------------
Xxxxxxxx XxXxxxx
d/b/a XxXxxxx and Associates
