Exhibit 10.2
SLS International, Inc.
0000 Xxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
July 17, 2002
Xxxxxx X. Xxxxx PLLC
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxx X. Xxxxx
Gentlemen,
This letter confirms the agreement of Xxxxxx X. Xxxxx PLLC ("Xxxxx") to provide
services to SLS International, Inc. (the "Company"), and of the Company to pay
for such services:
1. Services. Xxxxx shall provide legal services for the Company,
consisting of the preparation of a Registration Statement on
Form S-8 for the Company's 2000 Stock Purchase and Option Plan
("Option Plan"), covering 2,000,000 shares of the Company's
common stock including the shares issuable upon exercise of
the Xxxxx Options (as defined below). Xxxxx shall prepare the
Registration Statement and shall submit it to the Company
within ten business days of the date of this letter. Xxxxx
shall promptly make all revisions to such Registration
Statement as shall be reasonably requested by the Company or
its counsel. It is the Company's obligation and the Company's
responsibility to Edgarize the documents and to file the
Registration Statement promptly following completion thereof,
with notice of filing faxed promptly to Xxxxxxx (as defined
below). Such Registration Statement shall be filed with the
Securities and Exchange Commission prior to the delivery of
the Xxxxx Options by Xxxxxxx to AVG (as defined below).
2. Compensation. In consideration of the services described in
item 1 above, the Company grants to Xxxxxx X. Xxxxx ("AVG"),
as designee of Xxxxx, options to purchase shares of common
stock of the Company under four stock options (the "Xxxxx
Options") further described in item 3 below. The Xxxxx Options
are granted by the Company pursuant to the Option Plan and are
delivered to Xxxxxxx to be held in escrow pursuant paragraph 4
below. AVG shall be entitled to pay the exercise price of such
options by using (and only by using) the credit account in an
aggregate amount of $40,000 described in a separate letter
agreement among Xxxxx, AVG and the Company dated the date
hereof (the "Settlement Agreement").
3. Terms of Options. The Xxxxx Options shall be issued on the
terms set forth below, and as set forth in paragraph 4 below
the Xxxxx Options shall be delivered to Xxxxxxx on the date
hereof (with certain provisions left blank by the Company as
set forth in paragraph 4 below):
the first option shall have an issuance date of the day of the
filing with the Securities and Exchange Commission of the
Registration Statement on Form S-8 for the shares covered by
the Option Plan. Such first option shall grant AVG the right
to purchase 22,727 shares at $0.44 per share. Each succeeding
option shall be issued 30, 60 and 90 days respectively (such
dates, collectively with the date of issuance of the first
option, "Option Issue Dates") after the date of issuance of
the first option. If an Option Issue Date occurs on a weekend,
then that Option Issue Date shall be the next business day.
The exercise price for each such succeeding option shall be
the average closing bid price for the shares, published on the
NASD Bulletin Board, for the 5 trading days preceding the
Option Issue Date of each such succeeding option ("Exercise
Price"). The number of shares to be issued under each such
option shall be the quotient of (a) $10,000 divided by (b) the
respective per share Exercise Price thereof. Each Xxxxx Option
shall be immediately exercisable and shall have a term of four
(4) months following the respective Option Issue Date. If not
exercised within such four-month period, such Option shall
expire and be of no further force or effect.
4. Escrow. To ensure the Company's performance of its obligations
under items 2 and 3 above, simultaneously with the execution
of this letter, the Company shall deliver the Xxxxx Options to
Xxxxxx Xxxxxxx, Xxxxx'x and AVG's attorney ("Xxxxxxx"). The
first option shall be held in escrow by Xxxxxxx until the
Registration Statement on Form S-8 has been filed, at which
time Xxxxxxx shall fill in the issuance date of the option as
the date of the filing of the Registration Statement and shall
deliver the first option to AVG. The three succeeding options
shall be held in escrow by Xxxxxxx (with the dates thereof,
the Exercise Prices thereof, and the numbers of shares subject
thereto each being blank and to be determined pursuant to the
formula stated in item 3 above). Xxxxxxx shall fill in the
issuance date, Exercise Price and number of shares for each
succeeding option in accordance with item 3, and deliver the
applicable succeeding option to AVG on the 30th, 60th and 90th
day, respectively, as described in item 3. At least four hours
prior to delivery of each succeeding option to AVG, Xxxxxxx
shall fax to the Company at (000) 000-0000 notice of the date,
Exercise Price and number of shares that he will fill in such
option, with a copy to Xxxx Xxxxxxx at (000) 000-0000. Unless
the Company or its attorney indicates disagreement with the
issuance date, Exercise Price or number of shares within four
hours by return fax to Xxxxxxx at (000) 000-0000, the amounts
specified by Xxxxxxx shall be deemed final, absent intentional
error or fraud. If there is a dispute over the calculation of
Exercise Price or the number of shares, the parties agree to
submit and be bound by the calculation thereof by the
Company's auditors. Notwithstanding anything to the contrary
contained herein, the Company shall not alter the delivery
instructions concerning the options as specified herein,
except in the event of a disagreement with the calculations of
Exercise Price, number of shares and issuance date.
5. Settlement Agreement. Pursuant to the Settlement Agreement,
Xxxxx and AVG have signed a General Release and a Stipulation,
which are being held in escrow by Xxxxxxx. In the Settlement
Agreement, the Company, Xxxxx and AVG agreed that the General
Release shall be delivered to the Company, and the Stipulation
shall be filed, promptly following the parties' agreement on
the services set forth in item 1 of the Settlement Agreement,
Xxxxx'x performance of such services, and the Company's
delivery of the options set forth in item 1 of the Settlement
Agreement. Xxxxx, AVG and the Company agree that upon the
Company's delivery of the options to Xxxxxxx, Xxxxx'x
performance of the services provided in item 1 hereof, and the
Company's filing of the Registration Statement on Form S-8
described herein, all such conditions to delivery of the
General Release and filing of the Stipulation will have been
met, and at such time, Xxxxxxx will deliver the General
Release and file the Stipulation as described in the
Settlement Agreement.
6. Company Covenant. The Company covenants that it will timely
file its periodic reports with the SEC as required by the
Exchange Act of 1934, as amended, for any period during which
any of the Xxxxx Options are outstanding.
7. Escrow Agent. The parties agree to indemnify Xxxxxxx and hold
him free and harmless from any and all claims, lawsuits,
actions or proceedings in connection with the transactions
contemplated herein, except for acts of gross negligence or
malfeasance.
Very truly yours,
Xxxxxx X. Xxxxx PLLC
By
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Accepted and Agreed
SLS International, Inc.:
By
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Xxxx Xxxx, President
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Xxxxxx X. Xxxxx Xxxxxx Xxxxxxx
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