EX 10.7
FIRST AMENDMENT TO
EMPLOYMENT AGREEMENT AND ASSIGNMENT OF RIGHTS AND EXCLUSIVE LICENSE AND
ASSUMPTION OF OBLIGATIONS AND SALE OF CERTAIN ASSETS
This FIRST AMENDMENT TO EACH OF EMPLOYMENT AGREEMENT AND
ASSIGNMENT OF RIGHTS AND EXCLUSIVE LICENSE AND ASSUMPTION OF OBLIGATION AND SALE
OF CERTAIN ASSETS (the "AMENDMENT"), dated as of September __2004, by and among
Sonoma College, Inc. ("SONOMA"), H. Xxxx Xxxxxxx, Ph.D. ("XXXXXXX"), an
individual whose address is 12140 Vintage Lane and Homeland Safety Training,
Inc. ("HSTi") X.X. Xxx 000, Xxxx Xxxxx, XX 00000
WHEREAS, Sonoma and Xxxxxxx entered into an Employment Agreement dated
February 26, 2004 (the "EMPLOYMENT AGREEMENT") PURSUANT TO WHICH Sonoma employs
Xxxxxxx as President and Chief Academic Officer of Sonoma; and
WHEREAS, Sonoma and HSTi, an entity that Xxxxxxx owns a majority of its
issued and outstanding equity, entered into an Assignment of Rights and
Exclusive License and Assumption of Obligations and Sale of Certain Assets dated
February 26, 2004 (the "RIGHTS AGREEMENT") pursuant to which HSTi assigned
certain intellectual property and inventory to Sonoma
WHEREAS, the parties desire to amend the Employment Agreement and the
Rights Agreement as set forth herein:
NOW THEREFORE, in consideration of the premises and of the mutual
agreements and covenants hereinafter set forth, the parties hereto agree as
follows:
1. Capitalized terms used in this Amendment have meanings ascribed to them
in the Employment Agreement and those definitions are incorporated by reference
into this Amendment.
2. Section 3.1 of the Employment Agreement is hereby deleted in it's
entirety and replaced with the following:
Section 3.1. Base Salary. For the period beginning on February 26, 2004 and
ending on August 31, 2004, Xxxxxxx'x salary shall be equivalent to seventy five
thousand dollars ($75,000) per years. For the period beginning on September 1,
2004 and ending on the termination of the Agreement, Xxxxxxx'x salary shall be
equivalent to one hundred thousand dollars ($100,000) per year. In addition,
beginning on September 1, 2004, Xxxxxxx may be entitled to a quarterly cash
bonus of up to twenty five thousand dollars ($25,000) (not to exceed one hundred
thousands dollars ($100,000) per year) (the "CASH BONUS"), as determined on a
quarter by quarter basis. If Xxxxxxx and/or the Company achieves certain
quarterly objectives as agreed to in writing by and between the Board of
Directors of the Company and Xxxxxxx. Any portion of the Cash Bonus earned by
Xxxxxxx pursuant to this Section 3.1 shall be paid by the Company to Xxxxxxx no
later than (y) with respect to each quarter (other than fiscal year-end quarter)
thirty (30) days after the completion of the quarterly financials of the
Company; and (2) with respect to fiscal year-end quarter, thirty (30) days after
the completion of the annual audit of the Company."
3. Section 3.4 and subsequent 3.4.1, 3.4.2, 3.4.2.1, 3.4.2.2, 3.4.2.3, 3.4.2.4,
3.4.3, 3.4.4, 3.4.5 and 3.4.6 of the Employment Agreement are hereby deleted in
their entirety and replaced with the following:
"Section 3.4. Stock Options. For each of the next three (3) fiscal years of the
Company (commencing with the year ending in 2005), Xxxxxxx may be entitled to an
option ("bonus options") to purchase three hundred thirty three thousand
(333,000) shares of common stock of the Company for the achievement of certain
objectives as agreed to in writing by and between the Board of Directors of the
Company and Xxxxxxx (the "BONUS OBJECTIVES"). If the Bonus Objectives are
attained, with respect to a fiscal year in which a Bonus Option may be granted
pursuant to the immediately preceding sentence, the Bonus
Option shall be granted pursuant to and in accordance with the terms and
conditions of the Company's 2004 Stock Option Plan. The exercise price with
respect to any Bonus Option shall be the fair market value of the common stock
underlying such option on the date such option was granted."
4. Section 3.1 of the Rights Agreement is hereby deleted in its entirety and
replaced with the following:
"Section 3.1. PAYMENT. In consideration of the assignments and licenses granted
to the Company pursuant to Article 2 of this Agreement, the Company hereby
grants to HSTi an option (the "OPTION") to purchase 400,000 shares of common
stock of the Company at an exercise price of twenty-five cents ($0.25) per share
(subject to adjustment for stock splits, stock dividends and the like). The
Option shall vest on June 30, 2006 and may be exercised during the period
beginning on June 30, 2006 and ending on June 20, 2011. The Option is not
transferable or assignable and a change of control of HSTi, except in the case
of the death or disability of Xxxx Xxxxxxx, whether by merger, sale or issuance
of equity or otherwise will terminate the Option."
5. COUNTERPARTS. This Amendment may be executed in any number of
counterparts, each of which shall be deemed an original as against the party
whose signature appears thereon, and all of which shall together constitute one
and the same instrument. This Amendment shall become binding when one or more
counterparts hereof, individually or taken together, shall bear the signature of
all the parties reflected hereon as the signatories.
6. GOVERNING LAW. This Amendment shall be governed and construed in
accordance with the laws of the State of California applicable to agreements
made and to be performed entirely within such State and the federal laws of the
United States of America, without regard to the conflict of laws rules thereof.
IN WITNESS WHERE, the undersigned have executed this Amendment as
of the date set forth above.
SONOMA:
Sonoma College, Inc.
By: /s/ Xxxxxxx Xxxxxx
---------------------------------
Xxxxxxx Xxxxxx
Chief Executive Officer
XXXXXXX:
/s/ H. Xxxx Xxxxxxx
---------------------------------
H. Xxxx Xxxxxxx, Ph.D.
HSTi:
Homeland Security Training, Inc.
By: /s/ H. Xxxx Xxxxxxx, Ph.D.
---------------------------------
H. Xxxx Xxxxxxx, Ph.D.
President
