EXHIBIT 10.36
June 19, 1997
Critical Technologies, Inc.
0000 Xxxxxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Xxxxxxxx Communications Group, Inc.
000 Xxxx 0xx Xxxxxx
Xxxxx, Xxxxxxxx 00000
Re: $1,100,000 Obligation - Letter Agreement
This letter refers to the September 30, 1996, amendment (the "Amendment")
to the Employee Services and Staffing Agreement between Critical Technologies,
Inc. ("CTI") and Concentric Network Corporation ("CNC") dated as of November 1,
1995 (the "1995 Agreement"). Paragraph 14 of Amendment provides as follows:
Effective upon the closing of any Acquisition of CTI, CTI shall pay,
or cause the person acquiring CTI to pay, to CNC the sum of
$1,100,000. Such sum shall be paid in cash unless the consideration
paid to CTI or the shareholders of CTI in the Acquisition consist
solely or partly of securities of the acquirer which can be traded on
the NASDAQ National Market, the New York Stock Exchange or the
American Stock Exchange, in which case the acquirer shall have the
right to pay such amount to CNC in a combination of cash and such
securities in the same proportion and manner that such cash and
securities is paid to CTI or the shareholders of CTI. Such securities
shall be valued for the purposes of this agreement at the average of
the closing sale price of such securities for the 30 trading days
preceding the closing of such Acquisition. In the event that the total
consideration for the Acquisition is paid in two or more increments,
the $1,100,000 to be paid to CNC shall be paid concurrently with each
such increment. The proportion of the $1,100,000 paid at each
increment shall be the same proportion as the consideration paid at
such increment represents as a portion of the total consideration paid
in all increments. For purposes of this Agreement, an "Acquisition"
shall mean any of transactions or series of transactions in which all
or substantially all the business of CTI is transferred to another
person, whether the form of such transaction is a stock sale by the
shareholders of CTI, a merger, a consideration or a transfer of
assets.
On March 6, 1997, Xxxxxxxx Communications Group, Inc. acquired all of the
outstanding common stock of CTI which constituted an "Acquisition" for the
purposes of the Amendment, thereby creating a $1,100,000 obligation in favor of
CNC.
In consideration of WCG's loan to CNC evidenced by The Concentric Network
Corporation 10% Convertible Promissory Note of even date herewith and $1,100,000
of service credits being made available to CNC under certain circumstance as set
forth in the Service Credits - Letter Agreement of even date herewith, CNC
agrees that all obligations of CTI, its parent company and/or its affiliates
under the Amendment are, as of the date of this letter, fully and finally
satisfied and no further payment or other obligation remains outstanding or
unsatisfied.
Sincerely,
CONCENTRIC NETWORK CORPORATION
By: /s/ Xxxxx X. Xxxxxxxx
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Its:
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