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HEADS OF AGREEMENT FOR CHANGE IN MANAGEMENT OF NATIONAL SOLUTIONS CORPORATION
HEADS OF AGREEMENT entered into on January 9, 1997 in consideration of the
mutual agreements set forth herein by and between Systems Communications, Inc.
(SCI) as the stockholder of National Solutions Corporation (NSC) and Xxxx
Xxxxxx, Xxxxx Xxxxxx and Xxxx Xxxxxxxxxx (collectively, the Retiring
Management). The parties agree as follows:
1. SCI will include in the current S-1 registration it is preparing for
filing all shares of SCI common stock now registered in the names of Retiring
Management and issued under 2 below with a limitation on sales by each of
Retiring Management pursuant to the registration statement of 5,000 shares per
month as a means of protecting the integrity of the public market for SCI's
common stock such restriction to remain in effect until three years have
passed from the date of original issue of the shares of SCI's common stock
registered in the names of Retiring Management, after which period there shall
be no limitation on the number of shares Retiring Management can sell each
month; provided, that with the Company's approval each of Retiring Management
may margin up to seventy percent of their respective shares, which approval
cannot be unreasonably withheld with reasonableness to be determined by the
impact on the Company or stock price.
2. SCI's common stock (3,018 shares) earned by each of Retiring Management in
the acquisition of Health Management Technologies will be issued to Retiring
Management immediately. SCI shall place 200,000 shares of its common stock in
escrow to be released to Retiring Management upon NSC's collection of net
operating revenues, exclusive of subcontractors' fees and charges, of
$2,000,000 from a transaction, fee based agreement within the automotive
industry produced by NOVA which is acceptable to and for performance by NSC.
3. Retiring Management, and each of them individually, waives all accrued
bonuses, including stock bonuses and deferred stock under the SCI-NSC
acquisition agreement.
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4. NSC, under the direction of SCI, and Retiring Management shall negotiate
in good faith a license agreement between NSC and a new company (NOVA) to be
organized by Retiring Management pursuant to which NSC will license, in
consideration for a royalty payment of one-half of one percent of NOVA's
revenues derived from use of the licensed software, NSC software technology
under the NSC-CREDA agreement such that NOVA will be able to engage in the
business of servicing exclusively state governments west of the Mississippi
River, excluding Utah, and Mexico, Central and South America, with minimum
performance standards to be negotiated. Net profits (to be more specifically
defined) earned by NSC from New York and New Jersey and net profits earned by
NOVA from Mexico under the license agreement will be subject to a 50-50 net
profit sharing between NOVA and NSC. The license agreement shall provide that
NOVA shall use NSC as its exclusive data center for two years, to the extent
that NSC has the capacity to service NOVA, for processing work under the
license agreement and shall require NSC to make its data center available to
service NOVA's work for three additional years. Territorial exclusivity shall
be subject to performance and productions standards to be developed in the
license agreement. Services provided to NOVA by NSC's data center shall be at
fair market value to be negotiated on a contract by contract basis.
5. NSC releases Retiring Management from their respective non-compete and
confidentiality agreements under their employment agreements and the SCI-NSC
acquisition agreement as necessary for Retiring Management to conduct the
business of NOVA under the license agreement provided in 4, above.
6. Retiring Management, or such of them as appropriate or through NOVA, will
provide consulting services with respect to the Chrysler/BCBSM/NSC contract
and extensions and the retrospective Medicare COB services in the future for
Ford Motor Company and with other existing NSC clients and identifying new
opportunities as requested by NSC and accepted by Retiring Management, with
the compensation for such services to be negotiated in good faith with respect
to each engagement for consulting services.
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7. NSC will pay its current American Express account and will reimburse Xxxxx
Xxxxxx for any payments on such account which he is required to make, in
either case from the first revenues received (after payment of all accrued
subcontractor fees and costs) from Blue Cross/Blue Shield under the agreement
with Ford Motor Company. SCI will indemnify Xxxxxx in the event NSC is unable
to make payment in accordance with this paragraph.
8. NSC will pay the accrued salaries through January 9, 1997 as funds from
operations or other sources become available.
9. Retiring Management will submit letters of resignation from all positions
which they have held at NSC and acknowledge that all salary and benefits
(subject to COBRA rights) from NSC are terminated effective immediately.
10. Retiring Management will assist SCI as needed in the transition to new
executive management of NSC, including advice to employees of NSC to cooperate
with new management of NSC and deliver all property of NSC in their possession
which is at locations not under the control of NSC.
11. Provided that all terms hereunder are performed, the parties will enter
into a mutual general release of all claims of every nature.
12. Retiring Management waives all conflict which the law firm of Holland &
Knight may have in representing SCI in capital raising activities which
conflict arises from that firm's prior representation of Retiring Management.
Retiring Management will execute such form of waiver as may be required by
that firm.
IN WITNESS WHEREOF, the undersigned have executed this Heads of Agreement the
date first above written.
(Corporate Seal) Systems Communications, Inc.
On its behalf and as the sole
stockholder of NSC
Attest:
By: Xxxxxx X. Williams____________
/s/ Xxxxx X. Salmon_______ Xxxxxxx X. Xxxxxxxx, President
Secretary
/s/ Xxxx Looney___________ /s/ Xxxxx Tolly___________________
Xxxx Xxxxxx Xxxxx Xxxxxx
Xxxx Paolicelli___________
Xxxx Xxxxxxxxxx
