Exhibit 10.10
netValue, inc.
0000 Xxxxxxx Xxxx
Xxxxxxxx Xxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Xx. Xxxxx X. Xxxxxxx
Xx. Xxxx Xxxxxxxxxx
Dear Xxxx and Xxxxx:
This letter will serve to evidence the agreements between each of
Xxxxx X. Xxxxxxx ("Xxxxxxx") and Xxxx Xxxxxxxxxx ("Xxxxxxxxxx") and netValue,
inc. (the "Company") regarding the mutual release from performance under your
respective employment agreements with the Company (the "Employment
Agreements").
Upon the execution of a definitive agreement between the Company and
IQ, Inc. regarding the licensing of the Company's systems and software (the
"IQ Agreement"), the Employment Agreements shall automatically be terminated.
Upon such event, Xxxxxxx and Xxxxxxxxxx and the Company shall each waive all
rights, privileges, claims and obligations that such parties have under the
Employment Agreements. Upon the execution of the IQ Agreement and in exchange
for the termination of the Employment Agreements, the Company agrees as
follows:
1. Each of Xxxxxxx and Xxxxxxxxxx shall be entitled to receive their current
salaries, consisting of an $85,000 base payment (defined in the Employment
Agreements as "The Starting Salary") and a $15,000 Draw against the current
year's earned commissions, until September 30, 1998. To the extent that the
Draw exceeds the commissions earned by each of Xxxxxxx and Xxxxxxxxxx in
accordance with the terms of the Employment Agreements (and exclusive of any
payments received by the Company from IQ, Inc.) through September 30, 1998,
such excess, if any (the "Excess Draws"), shall be repaid by either of them in
accordance with paragraph 5 hereof. As stated in the Employment Agreements,
the salaries shall continue to be paid in accordance with the Company's normal
payment practices (but not less frequently than bi-weekly).
2. Each of Xxxxxxx and Xxxxxxxxxx shall receive a cash payment of $20,000,
$10,000 of which shall be payable upon the execution of the IQ Agreement and
$10,000 of which shall be payable upon the earlier of (i) 90 days after the
execution of the IQ Agreement, or (ii) the Company's receipt of the proceeds
of the initial public offering of its Common Stock (the "IPO").
3. The Company shall issue to each of Xxxxxxx and Xxxxxxxxxx options to
purchase 75,000 shares of the Company's Common Stock at the per share price of
the Company's IPO. These options shall vest immediately upon issuance and
shall be exercisable for a period of two years from the date of issuance.
These options will be subject to any restrictions on sale or transfer (the
"Lock-up Agreement") required by the underwriter of such IPO (the
"Underwriter"). These options are in addition to the options to purchase
15,000 shares of the Company's Common Stock which have previously been granted
to each of Xxxxxxx and Xxxxxxxxxx and have vested under the Company's
Non-Qualified Stock Option Plan.
4. Within 5 business days of executing this letter agreement, the Company
agrees to deliver (i) certificates representing 737,000 shares of the
Company's Common Stock to Xxxxxxx; and (ii) certificates representing 642,000
shares of the Company's Common Stock to Xxxxxxxxxx. The parties hereto
acknowledge and agree that except with respect to the shares which may be
issued in accordance with the terms of this letter agreement, these
certificates represent all of the shares of the Company's Common Stock owned
by Xxxxxxx and Xxxxxxxxxx. In consideration of the terms hereof, the Company
will permit each of Xxxxxxx and Xxxxxxxxxx to sell 20,000 shares of Common
Stock in the IPO.
5. The amount of any advances made or to be made to Xxxxxxxxxx and Xxxxxxx
shall be considered loans from the Company to each of Xxxxxxx and Xxxxxxxxxx.
The principal amounts of these loans shall be due upon the earlier of 18
months from the execution of this letter agreement or the expiration of the
Lock-up Agreement. These principal amounts shall accrue interest at the rate
of interest at the rate of 8.5%, until the entire principal balance has been
repaid. These principal amounts are as follows:
x. Xxxxxxxxxx. (i) the amount of $8,344.66 representing general
advances; and (ii) the Excess Draw, if any.
x. Xxxxxxx. The Excess Draw, if any.
6. The Company will take all actions necessary to transfer ownership to
Xxxxxxx and Xxxxxxxxxx of the personal computers that each of Xxxxxxx and
Xxxxxxxxxx is presently using to perform work on behalf of the Company. This
obligation shall be limited to one personal computer for each of Xxxxxxx and
Xxxxxxxxxx. Xxxxxxx and Xxxxxxxxxx each represent and warrant that they are
not in possession of any other equipment or property of the Company, except
for such property and equipment used by them at the Company's executive
offices located at 0000 Xxxxxxx Xxxx, Xxxxxxxx Xxx, Xxxxxxxxx, Xxxxxxxxxxx
00000, which property or equipment shall be retained by the Company. The
Company agrees to timely make all payments under the computer lease with
Toshiba which is guaranteed by Xxxxx Xxxxxxx and agrees to indemnify him from
any damages or claims resulting from its failure to do so.
7. The Company agrees to continue to pay all health insurance premiums for
the coverage
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presently provided to each of Xxxxxxx and Xxxxxxxxxx until the date on which
IQ, Inc. begins to provide them with health insurance coverage, provided that
in no event shall this obligation of the Company extend beyond September 30,
1998.
8. The Company agrees to continue to reimburse the out-of-pocket expenses
incurred by each of Xxxxxxx and Xxxxxxxxxx in accordance with the terms of the
Employment Agreements until the date on which Xxxxxxx and/or Xxxxxxxxxx are
engaged by IQ, Inc. as employees or consultants, provided that in no event
shall this obligation of the Company extend beyond that date which is 60 days
subsequent to the execution of the IQ Agreement.
9. The parties acknowledge and agree that Sections 6, 7, 8b., 9, 20 and 22 of
the Employment Agreements shall survive the termination, if any, of the
Employment Agreements, provided that so long as Xxxxxxx and Xxxxxxxxxx are
employed by IQ, Inc. and are soliciting the Company's customers in furtherance
of the IQ Agreement, Section 8b. of the Employment Agreements shall not
survive with respect to customers of the Company.
10. The breach by any party of any terms or conditions of this letter
agreement shall be deemed to be a breach of the letter agreement by such
party.
Very truly yours,
NET VALUE, INC.
/ s / Xxxxxxx X. Xxxxx
---------------------------
Xxxxxxx X. Xxxxx, President
Agreed to and accepted:
/ s / Xxxxx X. Xxxxxxx
------------------------------
Xxxxx X. Xxxxxxx
/ s / Xxxx Xxxxxxxxxx
------------------------------
Xxxx Xxxxxxxxxx
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