EXHIBIT 10.16
ADDENDUM
On the seventh (7th) day of February, 2000 an employment agreement was entered
into by and between MegaMedia Networks, Inc., ("the Company"), and Steve H.
Noble, III, ("the Executive").
RECITAL
Whereas, the Company for good and sufficient business reasons has requested a
deferral of certain compensation set forth in section four of the Executive's
agreement with Mega Media Networks, Inc. for a period of four months and the
Executive has agreed to such deferral. The parties agree to amend said section
as follows:
1. Executive compensation commencing on June 9, 2000 and
continuing for a period of seventeen weeks concluding on
Friday October 6, 2000 (Deferral Term) shall be reduced by
twenty percent (20%). The total of this deferred amount shall
not exceed $9,480.77 calculated as: $145,000 salary/ 52 weeks
annually =$2,788.46 * 17 weeks = $47,403.85 * 20% = $9,480.77.
Such reduction shall be taken as $557.69 per week for the
Deferral Term.
a. At the end of the Deferral Term the Company will compensate
the Executive for the aforesaid monetary reduction of wages
during the Deferral Term in one of two methods selected at the
Executive's discretion as follows:
i. Payment of the deferred amount in a lump sum to
the Executive on Monday October 9; or
ii. Payment of the deferred amount by issuing shares
of Company common stock in the exact amount of the
deferred salary at a unit price of $1.00 per
share.
b. One month of salary shall be placed within 10 business days of
execution of this Addendum in an escrow account in the name of
the Executive to provide for security in the case Company
failure. This amount shall be payable to the Executive on
demand upon failure of the Company to meet on a timely basis
its salary payment obligation to the Executive prior to his
Termination under Section 9 of the Employment Agreement.
2. In consideration of this agreement the Company agrees to
cancel the Stock Options granted in Exhibit A and replace the
shares contemplated therein with granted shares under the
following terms:
a. Upon execution of this Agreement and payment by Executive of
an aggregate purchase price of One Thousand Five Hundred
dollars ($1,500.00), Executive shall be issued 150,000 shares
of the Company's common stock, $0.01 par value, in his name,
to
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be held by an Escrow Agent, as provided in the Escrow
Agreement of even date herewith, as set forth in Exhibit A,
which shares may not be sold, exchanged, transferred, pledged,
hypothecated, or otherwise disposed of and are subject to
forfeiture as described below ("Escrow Stock"). If Executive
voluntarily terminates his employment or his employment is
terminated "for cause" (as defined in paragraph 9D), prior to
the occurrence of the earliest event specified in subsections
(a) through (f) below, Executive shall forfeit all right,
title and interest to the Escrow Stock. Otherwise, complete
ownership, subject to restrictions set forth in the Securities
Act of 1933 as amended, and the rules and regulations
promulgated from time to time by the Securities and Exchange
Commission, in all of the Escrow Stock shall be delivered to
Executive promptly on the earliest to occur of the following:
b. February 5, 2001;
c. Executive's death;
d. Executive's permanent disability as defined in paragraph 9B;
e. Termination of the Executive's employment by the Company
without cause as defined in paragraph 9D;
f. Termination by the Executive of his employment as a result of
Constructive Discharge as defined in paragraph 9C;
g. A "change in control" of the Company which shall be defined as
(i) a sale, purchase, merger or other business combination
which results in transfer to a third party of an ownership
interest of greater that 50% of the company or any successor
entity to the Company, (ii) a sale or other disposition of all
or substantially all of the Company's assets, or (iii)
election by the shareholders of the Company of persons to
serve as directors of the Company, comprising more that
one-half (1/2) the total number of directors, persons who were
not nominated or recommended to the shareholders for election
as directors by the Board's nominating committee.
Provided that Executive has not voluntarily terminated his
employment or his employment has not been terminated "for
cause" (as defined in paragraph 9D), prior to the occurrence
of the earliest event specified in subsections (a) through (f)
above, upon the occurrence of the earliest event specified in
subsections (a) through (f) above, the Company shall instruct
its Escrow Agent to deliver a certificate or certificates in
Executive's name
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for the 150,00 shares of the Company's common stock, $0.01 par
value, to Executive.
3. The following modifies, replaces and supercedes the Stock
Option Agreement vesting February 6, 2001:
ESCROW AGREEMENT
EXHIBIT A
THIS ESCROW AGREEMENT (the "Escrow Agreement") is dated as of February
6, 2000, by and among MegaMedia Networks, Inc., (the "Company"), Steven H. Noble
III (the "Executive"), and Christopher P. Flannery, an attorney who practices
law in the Commonwealth of Pennsylvania, as Escrow Agent (the "Escrow Agent").
WHEREAS, the Stockholders of the Company have transferred shares of
common stock of the Company (the "Shares") to the Escrow Agent to support stock
rights granted or to be granted to current or new employees, including Steven H.
Noble III as the Company's Chief Financial Officer utilizing an escrow
arrangement as described in this Escrow Agreement; and,
WHEREAS, the terms and conditions of Executive's employment with the
Company are set forth in an employment agreement between them, dated as of
February 6, 2000, (the "Employment Agreement"), attached as described in this
Escrow Agreement; and,
WHEREAS, the Escrow Agent is willing to act hereunder on the terms and
conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual covenants and
obligations set forth below, and intending to be legally bound, the parties
hereto hereby agree as follows:
1. ESCROW ACCOUNT
1.1 DEPOSIT. The Stockholders have delivered the Shares to the
Escrow Agent along with blank stock powers with Medallion
guaranteed signatures (the "Escrow") to be held by the Escrow
Agent in a separate account (the "Escrow Account") subject to
the terms and provisions of this Escrow Agreement. The Shares
in the Escrow Account will be used to support stock rights
granted or to be granted to the Company's executives.
1.2 TRANSFER TO EXECUTIVE. Upon execution of the Employment
Agreement between Executive and the Company and payment to the
Escrow Agent of One Thousand and Five Hundred Dollars
($1,500.00), 150,000 of the shares in the Escrow Account shall
be transferred on the books of the Company to Executive and a
certificate for those 150,000 shares shall be issued in
Executive's name. Executive shall thereupon be a stockholder
in the Company with respect to those shares and shall have the
rights of a stockholder with respect to all such shares,
including the rights to vote such shares and to receive any
dividend or other distributions paid with respect to such
shares, but shall not be able to sell,
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exchange, transfer, pledge, hypothecate or otherwise dispose
of the shares until the conditions specified in paragraph
4(B)(i) of the Employment Agreement have been met.
1.3 STOCK POWER. In aid of the restrictions on transfer of the
Shares, Executive's execution of the Employment Agreement
shall acknowledge his agreement to have the certificate
evidencing his shares held by Escrow Agent as security for
Executive's performance of the Employment Agreement until the
conditions specified in paragraph 4(B)(i) of the Employment
Agreement have been met. Executive shall also execute a stock
power agreement with a Medallion guaranteed signature, endorse
in blank, a copy of which is attached hereto as Attachment A,
and deposit it with the Escrow Agent until the conditions in
paragraph 4(B)(i) have been met or until the shares are
forfeited a specified in the Employment Agreement.
2. DISBURSEMENT OF ESCROW.
2.1 DELIVERY OF ESCROW STOCK TO EXECUTIVE. Provided that Executive
has not voluntarily terminated his employment or employment
has not been terminated "for cause" (as defined in paragraph
9D of the Employment Agreement) prior to the occurrence of the
earliest event specified in paragraphs 4(b)(i)(a) through (f)
of the Employment Agreement, upon the occurrence of the
earliest event specified in the paragraph 4(b)(i)(a) through
(f), of the Employment Agreement the Escrow Agent shall
promptly deliver to Executive, both the certificate or
certificates held by him in Executive's name and the executed
stock power agreement.
2.2 CANCELLATION OF ESCROW STOCK. In the event Executive has
voluntarily terminated his employment or his employment has
been terminated "for cause" (as defined in paragraph 9D of the
Employment Agreement) prior to the occurrence of the earliest
event specified in paragraphs 4(b)(i)(a) through (f) of the
Employment Agreement, Escrow Agent is authorized and directed
to send the executed stock power agreement with Medallion
guaranteed signature, endorsed in blank, together with the
stock certificate or certificates evidencing ownership of the
150,000 shares of the Company's common stock, $0.01 par value,
held by Escrow Agent in Executive's name to the Transfer Agent
and to direct the Transfer Agent to cancel the Escrow Stock.
2.3 CONTROVERSIES. If any controversy arises between two or more
of the parties, or between any of the parties and any person
not a party, as to whether or not or to whom the Escrow Agent
shall deliver the Escrow or any portion thereof or as to any
other matter arising out of or relating to this Escrow
Agreement, the Escrow Agent shall not be required to determine
the same and need not make any delivery of the Escrow
concerned or any portion thereof but may retain the same until
the rights of the parities to the dispute shall have been
finally determined by agreement or by final judgment of a
court of competent jurisdiction after all appeals have been
finally determined (or the time for further appeals has
expired without an appeal having been made). The Escrow Agent
shall deliver that portion of the Escrow concerned covered by
such agreement or final order within
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five (5) days after the Escrow Agent receives a copy thereof.
The Escrow Agent shall assume that no such controversy has
arisen unless and until it receives written notice from the
Company or the Executive that such controversy has arisen,
which refers specifically to this Agreement and identifies the
adverse claimants to the controversy.
2.4 NO OTHER DISBURSEMENTS. No portion of the Escrow shall be
disbursed or otherwise transferred except in accordance with
this Escrow Agreement.
3. ESCROW AGRENT. The acceptance by the Escrow Agent of his
duties hereunder is subject to the following terms and
conditions, which the parties to this Agreement hereby agree
shall govern and control with respect to the rights, duties,
liabilities and immunities of the Escrow Agent:
3.1 The Escrow Agent shall not be responsible or liable in any
manner whatever for the sufficiency, correctness, genuineness
or validity of any property deposited with or held by him.
3.2 The Escrow Agent shall be protected in acting upon any written
notice, certificate, instruction, request or other paper or
document believed by him to genuine and to have been signed or
presented by the proper party or parties.
3.3 The Escrow Agent shall not be liable for any act done
hereunder except in the case of its willful misconduct or bad
faith.
3.4 The Escrow Agent shall not be obligated or permitted to
investigate the correctness or accuracy of any document or to
determine whether or not the signatures contained in said
documents are genuine or to require documentation or evidence
substantiating any such document or signature.
3.5 The Escrow Agent shall have no duties as Escrow Agent except
those which are expressly set forth herein, and in any
modification or amendment hereof; provided, however, that no
such modification or amendment hereof shall affect its duties
unless it shall have given its written consent thereto. The
Escrow Agent shall not be prohibited from owning an equity
interest in the Company or any third party that is in any way
affiliated with or conduct business with the Company.
3.6 The company and the Executive acknowledge that the Escrow
Agent is practicing attorney and may have worked with the
Company, the Stockholders, the Executive or affiliates of them
on other unrelated transactions, and that they and each of
them has specifically requested that the Escrow Agent draft
the documents for this transaction and act as Escrow Agent.
Each party represents that the Escrow Agent draft the
documents for this transaction and act as Escrow Agent. Each
party represents that it has retained legal and other counsel
of its choosing with respect to the transactions contemplated
herein and is satisfied in its sole discretion with the form
and content of the documentation drafted by the Escrow Agent.
The parties hereby waive any objection to the Escrow Agent so
acting based upon conflict of interest or lack of
impartiality. The Escrow Agent
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agrees to act impartially and in accordance with the terms of
this Agreement and with the parties' respective instructions,
so long as they are not in conflict with the terms of this
Escrow Agreement.
4. TERMINATION. This Agreement shall terminate on the earlier of
(a) the date on which the certificate or certificates for the
150,000 shares shall have been transferred to Executive, or
(b) the next business day after the expiration of Executive's
stock rights under paragraph 4B(i) of the Employment
Agreement.
5. MISCELLANEOUS.
5.1 INDEMNIFICATION OF ESCROW AGENT.
(a) The Company and the Executive each agree, jointly and
severally, to indemnify the Escrow Agent for, and to hold him
harmless against, any loss incurred without willful misconduct
or bad faith on the Escrow Agent's part, arising out of or in
connection with the administration of this Agreement,
including the cost and expenses of defending himself against
any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder. The
indemnification shall not apply to a party with respect to a
direct claim against the Escrow Agent by such party alleging
in good faith a breach of this Escrow Agreement by the Escrow
Agent, which claim result in a final non-appealable judgment
against the Escrow Agent with respect to such claim.
(b) In the event of any dispute as to the nature of the rights or
obligations of the Executive, the Company or the Escrow Agent
hereunder, the Escrow Agent may at any time or from time to
time interplead, deposit and/or pay all or any part of the
Escrow Account with or to a court of competent jurisdiction
sitting in Philadelphia, Pennsylvania or in any appropriate
federal court, in accordance with the procedural rules
thereof. The Escrow Agent shall give notice of such action to
the Company and the Executive. Upon such interpleader, deposit
or payment, the Escrow Agent shall immediately and
automatically be relieved and discharged from all further
obligations and responsibilities hereunder, including the
decision to interplead, deposit or pay such funds.
5.2 AMENDMENTS. This Escrow Agreement may be modified or amended
only by a written instrument executed by each of the parties
hereto.
5.3 NOTICES. All communications required to be given under this
agreement to any party shall be sent by first class mail or
facsimile to such party at the address listed below or such
other addresses as shall be specified by the parties by like
notice.
5.4 SUCCESSORS AND ASSIGNS. This Escrow Agreement shall bind and
inure to the benefit of the parties hereto and their
respective successors and assigns; provided, however that the
Escrow Agent shall not assign its duties under this Escrow
Agreement.
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5.5 GOVERNING LAW. This Escrow Agreement shall be governed by and
construed and interpreted in accordance with the laws of the
Commonwealth of Pennsylvania.
5.6 COUNTERPARTS. This Escrow Agreement may be executed in two or
more counterparts, each of which shall be an original, and all
of which together shall constitute one and the same agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
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Executive - Steven H. Noble III MegaMedia Networks, Inc.,
By William A. Mobley, Jr., Chairman
ESCROW AGENT:
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Christopher P. Flannery, Esq.
Astor Weiss, Kaplan, Watters & Strong, LLP
The Belleveue, 6th Floor
Broad Street at Walnut
Philadelphia, PA 19103
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4. All other provisions of the Employment Agreement executed by
and between the parties on the 7th day of February, 2000 shall
remain in full force and effect and the rights and
responsibilities and duties of the parties to that Employment
Agreement and the covenants and agreements contained therein
shall continue to bind the signatories and shall continue in
full force and effect pursuant to that agreement until the
provisions thereof have been fully performed.
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Witness Executive - Steve H. Noble Date
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Witness MegaMedia Networks, Inc. Date
By: William A. Mobley, Jr., President
