Exhibit 10.99.5
CONTRACT BUY-OUT AGREEMENT
This Contract Buy-Out and License Modification Agreement ("Agreement"),
dated as of December 21, 1998, is made and entered into by and between Youth
Services International, Inc., a Maryland corporation ("YSI") and Golden Eagle
Education & Training, Inc. (formerly, "International Youth Institute, Inc."), a
Maryland corporation ("Golden Eagle").
Explanatory Statement
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A. YSI and Golden Eagle are parties to (i) an Amended and Restated
Training Services Agreement, dated as of January 1, 1997 ("TSA"), (ii) a License
Agreement, dated as of March 6, 1997 ("License Agreement"), and (iii) an
Agreement for the Transfer and Assignment of Intellectual Property, dated as of
March 6, 1997 ("Assignment").
B. YSI and Golden Eagle desire to effectuate a mutual termination of the
TSA on the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the Explanatory Statement, which is
incorporated into and made a part hereof, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto do hereby agree-as follows:
1. Termination of TSA. In consideration of the payment by YSI to Golden
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Eagle provided for in Section 2 hereof, YSI and Golden Eagle hereby terminate
and rescind the TSA in every respect. From and after the Payment Date
(hereinafter defined), the provisions of the TSA shall be of no further force or
effect whatsoever.
2. Buy-Out Amount. As full payment to Golden Eagle for a release and
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discharge of YSI's obligations under the TSA, YSI agrees to pay to Golden Eagle,
by bank treasurer's check or wire transfer, the sum of One Million One Hundred
Fifty Thousand Dollars ($1,150,000) on December 31, 1998 (the "Payment Date").
3. Payments under TSA. YSI agrees to pay, on or before the Purchase Date,
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any and all sums due and owing by it to Golden Eagle under the TSA through the
Payment Date.
4. Golden Eagle Training and Education Employees. YSI shall have the
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right, but not the obligation, to employ employees of Golden Eagle who have
heretofore performed services for YSI under the TSA. No employee of Golden
Eagle shall have any obligation to accept any employment that may be offered to
him or her by YSI.
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5. Expenses. All costs and expenses incurred in connection with this
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Agreement and the transactions contemplated hereby will be paid by the party
incurring such costs and expenses.
6. Public Announcements. No public announcement of the existence or terms
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of this Agreement shall be made by either party without the consent of the
other, and the text of any such announcement shall be reviewed and approved by
the other party before it is made, which consent and approval shall not be
unreasonably withheld.
7. Compliance by Golden Eagle.
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A. Golden Eagle hereby agrees that it will not (a)(i) assist, advise or
consult with, (ii) team with, or (iii) lend its name to or otherwise be a part
of a bid proposal (as subcontractor, consultant, reference or otherwise) of, any
person or party in connection with any proposal for any contract relating to
current operations of YSI or the renewal of any YSI contract, or (b)otherwise
violate or breach the noncompete provisions of the Assignment and hereby
represents and warrants that it has not done any of the foregoing.
B. Golden Eagle agrees that any material violation of the provisions of
this Section 7 would enable YSI to reclaim the amount paid by YSI to Golden
Eagle under Section 2 hereof, in addition to any other legal or equitable relief
to which YSI may be entitled, provided, however, that the amount that YSI may
reclaim under the provisions of this paragraph shall be reduced by the sum of
two hundred thousand dollars ($200,000) on each anniversary of the date of
this agreement until such amount shall be reduced to zero, it being understood
that such reduction does not limit the amount of damages or other relief to
which YSI may be entitled.
8. Further Assurances. The parties will use their respective best efforts
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to implement the provisions of this Agreement and will, without further
consideration, promptly execute and deliver such additional documents or
instruments reasonably necessary to carry out the intentions of the parties
expressed herein.
9. Training Materials. The parties agree that all training materials
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currently in the possession of YSI or the Golden Eagle trainers providing
training for YSI will remain in the possession of YSI after the Payment Date
pursuant to the License Agreement.
10. License Agreement and Assignment. The parties agree that the terms of
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the License Agreement and the Assignment shall remain in full force and effect.
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11. Indemnification. Golden Eagle shall indemnify and hold harmless YSI
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from and against any and all claims, damages, losses, and costs (including
reasonable attorneys and experts fees) incurred by YSI arising out of or in
connection with any act or omission by Golden Eagle in the performance of its
obligations under the TSA prior to the date of this Agreement. YSI shall
indemnify and hold harmless Golden Eagle from and against any and all claims,
damages, losses, and costs (including reasonable attorneys and experts fees)
incurred by Golden Eagle arising out of or in connection with any act or
omission by YSI in the provision of training services from and after the date of
this Agreement that heretofore were performed by Golden Eagle pursuant to the
TSA.
12. Notices. All notices or other communications required to be given to
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the parties hereto shall be in writing and shall be delivered personally,
transmitted by facsimile, mailed-by registered or certified mail (return receipt
requested, postage prepaid) as follows:
If to YSI, to:
Youth Services International, Inc.
0 Xxxx Xxxxxx Xxxxx
Xxxxxx Xxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxx, Chairman and CEO
FAX: (000) 000-0000
If to Golden Eagle, to:
Golden Eagle Education & Training, Inc.
000 X. Xxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxx 00000
Attention: Xx. Xxxxx Xxxxx, Chairman and CEO
FAX: (000) 000-0000
13. Governing Law. The provisions of this Agreement shall be governed by,
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and construed in accordance with the laws of the State of Maryland.
14. Miscellaneous. This Agreement constitutes the entire agreement
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between the parties with respect to the subject matter hereof. This Agreement
shall not be assigned by either party without the written consent of the other
party. This Agreement is binding upon and shall insure to the benefit of the
parties hereto and their respective successors and permitted assigns.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed as of the day and year first above written.
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Youth Services International, Inc.
By: /s/ Xxxx X. Xxxxxxx
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Xxxx X. Xxxxxxx, Senior Vice
President and General Counsel
Golden Eagle Education & Training, Inc.
By: /s/ Xx. Xxxxx X. Xxxxx
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Xx. Xxxxx Xxxxx, Chairman and
Chief Executive Officer
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