Exhibit 99.2
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is made between SLM
Holdings, Inc., a Delaware corporation (the "Company"), and Xxx Xxxxxxxxxxx
("Executive"), with address at 00000 Xxxxxx Xxxxx Xx, Xxxxxxx, XX 00000;
W I T N E S S E T H:
WHEREAS, the parties hereto have agreed to enter into this Employment
Agreement pursuant to the terms and conditions of the Asset Purchase Agreement
(the "Purchase Agreement"), dated August 21, 2007, by and between SLM Holdings,
Inc., a Delaware corporation (the "Company"), and VerticalFalls, Inc., a
Virginia corporation ("VerticalFalls");
WHEREAS, Xxx Xxxxxxxxxxx (the "Executive") is the Chief Executive
Officer of VerticalFalls;
NOW, THEREFORE, in consideration of the mutual promises contained
herein, the parties, intending to be legally bound, agree as follows:
1. EFFECTIVE DATE. This Employment Agreement (the "Agreement")
shall become effective as of the date of its execution (the "Effective Date")
and shall terminate and be of no force or effect if the Agreement is terminated
in accordance with its terms.
2. EMPLOYMENT AND DUTIES. Executive shall have such duties,
functions, responsibilities, and authority customarily pertaining to the
position of Interim Chief Operating Officer and member of the Board of Directors
(the "Board"), subject, however, to the directives of the majority of Board.
Executive shall devote his full time, skill, attention and his best efforts
during normal business hours to the business and affairs of the Company, and in
furtherance of the business and affairs of the Company and its subsidiaries;
except for usual, ordinary, and customary periods of vacation and absence due to
illness or other disability;
3. BASE COMPENSATION. The Company shall pay Executive for his
services under this Agreement as follows:
(a) A gross base annual salary equal to $200,000.00 for
the duration of his employment (the "Base Salary") payable in accordance with
the regular semi-monthly payroll schedule of Buyer. Any unpaid amount of the
annual base salary shall accrue interest at the rate of 8% per annum, principle
and interest to be payable upon the earlier of (i) after eight months from the
execution of this Agreement; or (ii) at the time the Company obtains, after the
execution of this Agreement, gross revenues from any sources in the amount of at
least $1,000,000.00; or (iii) upon Buyer's receipt at any time after the
execution of this Agreement of aggregate net proceeds from private or public
offerings of its securities amounting to at least $5,000,000 cumulatively.
Notwithstanding anything to the contrary herein, Executive
agrees that non-payment of the Executive's Base Salary for the first four months
from the date of this agreement shall not constitute Good Reason for termination
of this Agreement. Executive also agrees that (i) payment of at least $8,500 per
calendar month for each month during months 4 to 8 from the effective date of
this agreement; or (ii) receipt by the Executive of at least $20,000 of his Base
Salary then due and full payment of the bonus specified in Section 3 (b)(i)
shall each operate to preclude the Executive from terminating this Agreement
under Section 10 or any other applicable provision in this Agreement for a
period of eight months from the date of this agreement.
(b) Additional compensation to be payable as follows:
(i) A bonus of $100,000 payable in the form of
an eight month note. The note described in this paragraph
shall be payable at a rate of $0.50 for every net dollar
raised by the Company at any time after the execution of this
Agreement. The note shall be payable in full upon the earlier
of (i) after eight months from the execution of this
Agreement; or (ii) at the time the Company obtains gross
revenues from any sources in the amount of at least
$1,000,000.00;
(ii) An additional bonus of $100,000 if the
Company obtains revenues in the amount of $2,500,000 within a
period of 14 succeeding months after the execution of this
Agreement; and
(iii) An additional bonus of $100,000 if the
Company obtains revenues in the amount of $5,000,000 within a
period of 14 succeeding months after the execution of this
Agreement;
(c) In addition to the payments described in 3a and 3b
above, the company agrees to reimburse Executive's costs for Medical insurance
obtained up to a maximum amount of $1,000 per month.
Notwithstanding anything herein to the contrary, in the event
that the Company pays its Chief Executive Officer, Xxxxx Xxxxxxx, any amount as
salary for services rendered by him after the execution of this Agreement, the
Executive shall be entitled to receive an equivalent amount as payment of his
Base Salary, which amount shall be deductible from the amount due on the Note.
4. STOCK. Upon execution of this agreement, the Company shall
issue and deliver to Executive 4,875,000 shares of the Buyer's common stock
(fully vested). The shares shall at all points in time have the same rights,
privileges, and preferences as the shares that may be held from time to time by
Xxxxx Xxxxxxx. To the extent any change occurs in the rights, privileges, and
preferences of the common stock currently held by Xxxxx Xxxxxxx, the same
changes will be reflected in the interests granted to the Executive.
5. VACATIONS. Executive shall be entitled to take three weeks
vacations, with pay, provided that such vacations do not interfere with the
performance of his duties and services hereunder.
6. BUSINESS EXPENSES. Executive shall be reimbursed by the
Company for all expenses reasonably paid or incurred by him that is not in
excess of $1,000 within a period of one (1) month, provided that such expenses
are incurred in connection with the performance of his duties hereunder, and
only upon approval obtained after presentation of expense statements, receipts
or vouchers or such other supporting information reasonably evidencing such
expenses.
7. TERM. The term of Executive's employment by the Company
hereunder shall be for a period of three (3) years commencing on the Effective
Date of this Agreement. The term of this Agreement may be extended upon mutual
written consent of both parties to this Agreement.
8. TERMINATION. Executive's employment with the Company shall
terminate upon the first to occur of the (i) expiration of the term of this
Agreement (as may be extended pursuant to Section 6
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hereof), (ii) death of Executive, (iii) disability of Executive, but only upon
compliance with the provisions of Section 9 hereof, (iv) termination of
Executive for Cause (as defined in Section 9), (v) termination by Executive
pursuant to Section 11 hereof; or (vi) written consent of all parties to this
Agreement.
9. DISABILITY OF EXECUTIVE. If, as a result of Executive's
incapacity due to physical or mental illness, Executive shall have been absent
from his duties hereunder on a full-time basis for the entire period of three
consecutive months, and within thirty (30) days after written notice of
termination is given (which may occur before or after the end of such
three-month period) he shall not have returned to the performance of his duties
hereunder on a full-time basis (a "Disability"), employment of Executive
hereunder shall cease.
10. TERMINATION FOR CAUSE. The Company may terminate Executive's
employment hereunder for Cause. For purposes of this Agreement, the Company
shall have "Cause" to terminate Executive's employment hereunder upon:
(a) Discovery by the Company of any misrepresentation or false
statements made by the Executive in the Asset Purchase Agreement
entered into by and between the Company and VerticalFalls Software,
Inc. dated August 21, 2007;
(b) Executive's conviction of, or plea of nolo contendere to, any
felony of theft, fraud, embezzlement or violent crime;
(c) The willful and continued failure by Executive to
substantially perform Executive's duties with the Company (other than
such failure resulting from Executive's incapacity due to physical or
mental illness), after a written demand for substantial performance is
delivered to Executive by the Board, which specifically identifies the
manner in which the Board believes that Executive has not substantially
performed Executive's duties;
(d) The willful engaging by Executive in misconduct which is
materially injurious to the interests of the Company or any successor
thereto (or any affiliate of the Company or a successor thereto);
(e) The failure of the Company to earn revenues in the amount of
$1,000,000 within the first 8 months of the effectivity of this
Agreement; or
(f) The failure of the Company to earn revenues in the amount of
$3,000,000 within the first 14 months of the effectivity of this
Agreement;
For purposes of this Section 10, no act, or failure to act, on
Executive's part shall be considered "willful" unless done, or omitted to be
done, by Executive not in good faith and without reasonable belief that
Executive's action or omission was in the best interest of the Company.
Notwithstanding the foregoing, Executive shall not be deemed to have
been terminated for Cause unless and until there shall have been delivered to
Executive a copy of a notice of termination from the Board, after (x) reasonable
notice to Executive, (y) an opportunity for Executive, together with Executive's
counsel (the reasonable fees of which shall be born by the Executive), to be
heard before the Board, finding that, in the good faith opinion of the Board,
Executive was guilty of conduct set forth above in clauses (a), (b) or (c) of
the second sentence of this Section 9 and specifying the particulars thereof in
detail, and (z) in the case of conduct set forth in clause (c), a period of not
less than sixty (60) days to remedy same.
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In the event of termination of the Executive for Cause, the Executive
shall forfeit and immediately return all shares of common stock in the Company
which he has received by virtue of his employment herein.
11. TERMINATION BY EXECUTIVE. Executive may terminate his
employment hereunder (i) for Good Reason, or (ii) for any other reason upon
providing at least 90 days advance written notice.
For purposes of this Agreement, "Good Reason" shall mean any of the
following:
(a) A failure by the Company to comply with any material provision
of this Agreement which has not been cured within sixty (60) working
days after written notice of such noncompliance has been given by
Executive to the Company;
(b) A material change in the nature or scope of Executive's
duties, as described herein, or as may be reasonably requested by the
Board of Directors of the Company, from time to time, from those
engaged in by Executive on and immediately after the date of this
Agreement;
(c) A reduction in Executive's annual Base Salary, other
compensation or any other benefits from that provided to him pursuant
to this Agreement, unless such reduction is with the express or implied
consent of the Executive;
(d) A material diminution in Executive's eligibility to
participate in or in the benefits provided to Executive under any
bonus, stock option or other incentive compensation plans or employee
welfare and pension benefit plans (including medical, dental, life
insurance, retirement and long-term disability plans) from that
provided to him on the date of this Agreement;
12. NOTICE OF TERMINATION. Any termination of Executive's
employment by the Company pursuant to Sections 7, 8 or 9 shall be communicated
by 120 day prior written Notice of Termination to the Executive. For purposes of
this Agreement, a "Notice of Termination" shall mean a notice which shall
indicate the specific termination provisions in this Agreement relied upon and
shall set forth in reasonable detail the facts and circumstances claimed or
provide a basis for termination of Executive's employment under the provision so
indicated.
13. EFFECT OF TERMINATION OF EMPLOYMENT FOR CAUSE If the Company
shall terminate Executive's employment for Cause, then upon such termination,
all rights, benefits and compensation of Executive under this Agreement shall
immediately terminate, except that equity options, if any, shall continue to be
governed in accordance with their terms. The rights and remedies of the Company
as set forth in this Section 12 shall be cumulative with and shall be in
addition to (i) any and all other relief available to the Company for breach by
Executive of any other provision of this Agreement, and (ii) any and all other
general or equitable relief to which the Company may be entitled by reason of
such breach.
14. OTHER TERMINATION OF EMPLOYMENT. If Executive shall terminate
his employment for Good Reason under Section 11 hereof, then (i) within 30 days
following such termination, upon Executive's execution of the General Release,
the Company shall pay to Executive an amount equal to three (3) times the sum of
(A) the amount of Executive's monthly base salary; (ii) Executive shall be
entitled to continue to participate in all benefit programs and incentive plans
of the Company during a period equal to the remainder of Executive's employment
term hereunder, but in no event shall such period be more than twelve (12)
months.
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15. LEGAL FEES. Each Party shall pay all reasonable legal fees and
expenses promptly as they are incurred by the other party in seeking to obtain
or enforce any right or benefit provided under this Agreement.
16. CONFIDENTIALITY; NON-COMPETE. During the time of Executive's
employment and for a period of two (2) years following the termination of
Executive's employment with the Company, Executive agrees not to compete with
the Company for any acquisition, prospect or project that the Company was
pursuing, or has expressed its intention to pursue prior to Executive's
termination, and Executive shall hold in strict confidence and shall not,
directly or indirectly, disclose or reveal to any person, or use for his own
personal benefit or for the benefit of anyone else, any trade secrets,
confidential dealings, or other confidential or proprietary information of any
kind, nature, or description (whether or not acquired, learned, obtained, or
developed by Executive alone or in conjunction with others) belonging to or
concerning the Company or any of its subsidiaries, except (i) with the prior
written consent of the Company duly authorized by its Board of Directors, (ii)
in the course of the proper performance of Executive's duties hereunder, (iii)
for information (x) that becomes generally available to the public other than as
a result of unauthorized disclosure by Executive or his affiliates or (y) that
becomes available to Executive on a nonconfidential basis from a source other
than the Company or its subsidiaries who is not bound by a duty of
confidentiality, or other contractual, legal, or fiduciary obligation, to the
Company, or (iv) as required by applicable law or legal process.
17. MISCELLANEOUS. (a) NOTICES. Any notice or communication
required or permitted hereunder shall be given in writing and shall be (i) sent
by first class registered or certified United States mail, postage prepaid, (ii)
sent by overnight or express mail or expedited delivery service, (iii) delivered
by hand or (iv) transmitted by facsimile transmission, to the address or fax
number for the party as set forth opposite such party's name on the signature
page hereof, or to such other address or to the attention of such other person
as hereafter shall be designated in writing by the applicable party in
accordance herewith. Any such notice or communication shall be deemed to have
been given as of the date of first attempted delivery at the address or fax
number and in the manner provided above.
(b) SUCCESSORS AND ASSIGNS. This Agreement is personal in
nature and neither of the parties hereto shall, without the consent of the
other, assign or transfer this Agreement or any rights or obligations hereunder;
provided, however, that in the event of a merger, consolidation or transfer or
sale of all or substantially all of the assets of the Company, this Agreement
shall be binding upon the successor to the Company's business and assets.
(c) INTERPRETATION. When the context in which words are
used in this Agreement indicates that such is the intent, words in the singular
number shall include the plural and vice versa, and the words in masculine
gender shall include the feminine gender and vice versa.
(d) SEVERABILITY. Every provision in this Agreement is
intended to be severable. In the event that any provision of this Agreement
shall be held to be invalid, the same shall not affect in any respect whatsoever
the validity of the remaining provisions of this Agreement.
(e) CAPTIONS. Any section or paragraph titles or captions
contained in this Agreement are for convenience only and shall not be deemed a
part of the context of this Agreement.
(f) ENTIRE AGREEMENT. This Agreement together with the
Purchase Agreement contains the entire understanding and agreement between the
parties and supersedes any prior written or oral agreements between them
respecting the subject matter contained herein. There are no representations,
agreements, arrangements or understandings, oral or written, between and among
the
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parties hereto relating to the subject matter of this Agreement which are not
fully expressed herein or therein.
(g) NO WAIVER. Except as provided under this Agreement,
the failure of any party to insist upon strict performance of a covenant or of
any obligation hereunder, irrespective of the length of time for which such
failure continues, shall not be a waiver of such party's right to demand strict
compliance in the future. No consent or waiver, express or implied, to or of any
breach or default in the performance of any obligation hereunder shall
constitute a consent or waiver to or of any other breach or default in the
performance of the same or any obligation hereunder.
(h) AMENDMENT. This Agreement may be changed, modified or
amended only by an instrument in writing duly executed by all of the parties
hereto. Any such amendment shall be effective as of such date as may be
determined by the parties hereto.
(i) ENFORCEMENT. The Company may enforce this Agreement
pursuant to the provisions of the Purchase Agreement.
(j) CHOICE OF LAW. This agreement and the rights and
obligations of the parties hereunder shall be governed by the laws of New York.
IN WITNESS WHEREOF, the parties have executed this Agreement or caused
the same to be executed by their duly authorized corporate officers, all as of
the day and year first above written.
"Executive" /s/ Xxx Xxxxxxxxxxx
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Xxx Xxxxxxxxxxx
Address: 00000 Xxxxxx Xxxxx Xx, Xxxxxxx, XX 00000
Fax No. 000-000-0000
"Company" SLM HOLDINGS, INC
By: /s/ Xxxxx Xxxxxxx
---------------------------------
Xxxxx Xxxxxxx
Executive Officer
Address:
Fax No.
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