Document:

FARMOUT AGREEMENT

FARMOUT AGREEMENT

East Corning Property

Tehama County, California

This agreement is made effective the 15th day of April 2002 between Olympic Resources (Arizona) Ltd. (hereinafter referred to as "Olympic") and __Fairchild International Corporation (the farmee). 

Whereas, Olympic represents, but does not warrant that it holds those interests in and to certain lands and leases all as more particularly set forth in Exhibit "A" hereto.

Whereas, the farmee has the right to earn from Olympic an assignment, pursuant to Clause 3 below, of a portion of Olympic's interest in said leases. Olympic is willing to grant such right and/or option as provided herein. 

Now, therefore, for and in consideration of the mutual promises and covenants contained herein, to be kept and performed by the parties hereto, and other good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, the parties hereto do hereby agree as follows:

1. DEFINITIONS

"AMI" means those lands within Article XVI.A of the Operating Agreement;

"Balance of the Farmout Lands" means those Farmout Lands which are not earned by the farmee pursuant to Clause 4(a) of this Agreement;

"Drilling Unit" means that amount of oil and gas leased land encompassed within the Farmout Lands which should be transferred to the farmee as part of its interest in the Test Well or Test Wells in order to provide the farmee with a marketable interest in and to the Test Well or Wells or such larger area as may be transferred to each non-operating participant as provided for under the Operating Agreement.

"Encumbrances" means those royalties described as "Encumbrances" in Exhibit "A" and such other encumbrances as may be determined and accepted by the Non Operating participants under the Operating Agreement;

"Farmout Lands" means those oil and gas leased lands including the zones and formations within, upon or under the lands set forth in Exhibit "A" 

"Lands and/or Leased Lands" means the land legally described in the Operating Agreement including such other lands or leased lands as may be included by virtue of the operation of the AMI.

"Operating Agreement" means the 1982 Form 610 AAPL Joint Operating Agreement, including the 1984 COPAS Accounting Procedure, a copy of which is attached hereto as Exhibit "A" (conflict prior); 

"Operator" means Lario Oil and Gas Company.

"Test Wells" means the test wells described in clause 2;

"Test Well #1-7" means the Test Well located at and described as Test Well #1-7 (Section 7-T23N-R2W);

"Title Documents" means the documents of title set forth in Exhibit "A";

2. TEST WELLS

(a)On or before May 31st, 2002, on behalf of itself and the farmee, Olympic shall participate in the drilling of the following two Test Wells on the terms set out in the Operating Agreement::

	
Test Well
	
Objective Depth

	
Strange Brew #1-31 (Section 31 - T24N - R2W) 
	
5,300 feet

	
Layla #1-7 (Section 7 - T23N - R2W)
	
3,000 feet

Subsequent to the drilling of the Test Wells as stated above but no later than December 31, 2003 Olympic shall on behalf of itself and the farmee participate in the drilling of the Test Wells set forth below on the terms set out in the Operating Agreement: objective depths:

	
Test Well
	
Objective Depth

	
Great Ulysses #1-36 (Section 36 - T24N - R3W )
	
5,300 feet

	
Spoonful #1-1 (Section 1 - T23N - R3W)
	
3,000 feet

	
Layla #1-1 (Section 1 - T23N -R3W)
	
3,000 feet

	
Strange Brew #1-30 (Section 30-T24N-R2W)
	
5,600 feet

(b)The parties acknowledge that the order, location and objective depth of the Test Wells described above may change from time to time and that it is the intention of the parties that the farmee has the option to participate in the first 6 wells drilled after the date hereof on the Farmout Lands and to thereby earn an interest in such wells and all of the Farmout Lands in accordance with the terms of this Agreement. Notwithstanding the foregoing, if there is any change in the location or objective depth of any Test Well (and for purposes of this clause if a well not contemplated by the above 6 well program is proposed to be drilled on the Farmout Lands before all of the above 6 Test Wells have been proposed or drilled, the proposal of that well shall constitute a change in the location and/or objective depth of the next Test Well to be drilled pursuant to this Agreement), such that the farmee's estimated costs for that Test Well up to but not including casing exceed $80,000.00 (Cdn), the farmee shall have the right to elect not to participate in that Test Well but shall nonetheless retain the right to participate in any subsequent Test Well and to earn an interest in the Balance of the Farmout Lands in accordance with the terms of this Agreement. Nothing herein shall require the farmee to participate in more than 6 wells to earn an interest in the Balance of the Farmout Lands.

(c)If the drilling of any Test Well becomes impractical, Olympic shall immediately provide notice to the farmee and shall as soon as reasonably possible propose a substitute well. All rights and obligations under this Agreement shall apply to the substitute well.

3.COSTS

(a)Subject to Clause 3(f), the farmee shall have the option but not the obligation to pay 5% of all costs and expenses incurred for the joint account under the Operating Agreement respecting the drilling of each Test Well to Objective Depth. Olympic shall provide notice to the farmee of the drilling of each Test Well together with the Authority for Expenditure therefor required pursuant to Clause 3(e) at least 15 days prior to the anticipated spud date of the Test Well, and the farmee shall have 7 days from receipt of such notice to elect by notice in writing to Olympic to participate in that Test Well. Failure to respond within such 7-day period shall be deemed an election by the farmee not to participate. Subject to Clause 2(b), if the farmee elects or is deemed to elect not to participate in a Test Well, the farmee shall have no further right to earn an interest in that Test Well or any Test Well proposed thereafter. Such election shall not in any way adversely affect any interests which the farmee may have earned in the Farmout Lands prior to such election.

(b)Once a Test Well has been drilled to Objective Depth the farmee shall have the right to elect, upon receiving all information available in respect of the Test Well, to participate in the setting of production casing for and completion of the Test Well as described in the Authority for Expenditure contemplated in Clause 3(e). If the farmee elects not to participate in the proposed casing and completion of a Test Well and such operation is carried out, the farmee shall be subject to those penalties applicable pursuant to the Operating Agreement. If the farmee elects not to participate and as a result thereof there is a production penalty or forfeiture of lands pursuant to the Operating Agreement, the farmee shall nonetheless be considered to have participated fully in that Test Well for purposes of determining whether the farmee has earned an interest in that Test Well, has the right to participate in subsequent Test Wells and is entitled to earn the Balance of the Farmout Lands subject to such restrictions as may be imposed on the Farmor under the Operating Agreement arising out of the farmee's election to withdraw.

(c)Subject to Clause 3(f), if the farmee elects to participate in the completion of a Test Well, the farmee shall, notwithstanding that it owns only a 3.75% undivided interest in that Test Well, pay 5% of all completion costs and expenses which shall include the costs of the wellhead and other required surface production equipment, and all pipelines and meters required to produce and transport the gas production to a gas sales line or other point where the production can be marketed and sold.

(d)If all parties with an interest in the Test Well elect to abandon the Test Well, the farmee shall (only if it has participated in the drilling of the Test Well) pay 5% of all costs associated with the plugging and abandoning of it notwithstanding that it owns only a 3.75% undivided interest in that Test Well.

(e)An Authorization for Expenditure for each Test Well shall be forwarded to the farmee prior to commencement of drilling operations in respect of it. This Authorization for Expenditure shall represent the Operator's and Olympic's good faith estimate of the costs of the Test Well, and Olympic shall have the right from time to time to demand and receive from the farmee no earlier than 30 days prior to the expected spud date of each Test Well in which the farmee elects to participate payment in advance of the farmee's respective share of the Authorization of Expenditure for the Test Well as to all amounts up to but not including casing of the Test Well. The farmee shall pay the full amount of the payment so invoiced prior to commencement of drilling operations for that Test Well. Olympic shall only use such monies for the Test Well in question, and shall immediately return such monies to the farmee if the Test Well is not drilled or if the monies delivered are in excess of what is required for farmee's proportionate share of the aforesaid Test Well drilling expenses. If the farmee fails to pay for such costs and expenses as provided for herein then Olympic's sole remedy shall be to terminate this Agreement by written notice to the farmee, provided that such termination shall not in any way adversely affect any interests in the Farmout Lands which the farmee may have earned in the Farmout Lands prior to the termination.

(g)The parties acknowledge with respect to Test Well #1-7 that Olympic's interest therein is reduced (as set forth in Schedule "A") by virtue of a pooling arrangement. Accordingly, the farmee shall have the option to pay 2.7% of the drilling costs for that Test Well to earn a 2.025% undivided interest in that Test Well and associated Drilling Unit, and to thereafter pay 2.7% of the completion costs as provided for in Clause 3(c). The farmee shall have the right but not the obligation to participate in Test Well #1-7 as to an interest greater than set forth above if offered by Olympic. Except for the amended percentages respecting costs and earning for Test Well #1-7 as set forth in this Clause 3(g), the provisions of this Agreement shall apply to said Test Well mutatis mutandis. 

(h)Upon the farmee earning an interest in a Test Well and Drilling or the Balance of the Farmout Lands, as the case may be, the farmee shall earn a 3.75% undivided interest in all seismic, geological, geophysical and similar information and data relating to the Test Well and associated Drilling Unit or the Balance of the Farmout Lands, as the case may be. In this regard the farmee shall be required to pay to Olympic a fee of $15,000.00 (US) for each Test Well in which it elects to participate, such payment to be made concurrently with the first cash advance being made by the farmee to participate in the drilling of a proposed well. Such fees shall represent payment to Olympic for a 3.75% undivided interest in all the aforesaid information and data relating to the Test Well and the associated Drilling Unit in question, and upon the farmee earning an interest in the Balance of the Farmout Lands, payment for a 3.75% undivided interest in all such information and data relating to the Balance of the Farmout Lands. Olympic shall take all steps as the farmee may reasonably request to transfer legal title to such data and information to the farmee. Notwithstanding the foregoing, the farmee shall in accordance with this Clause 3(h) be entitled to a 2.025% interest in the data and information relating to Test Well #1-7 with the corresponding fee payable being $8,100.00 (US).

4. EARNING ASSIGNMENT

(a)Upon the farmee paying to Olympic its share of the costs of drilling if applicable completing a Test Well as provided for in Clause 3 hereof, the farmee shall earn and Olympic shall be deemed to have immediately assigned to the farmee a 3.75% undivided interest in the Test Well and the associated Drilling Unit for that Test Well (or in the case of Test Well #1-7 and the associated Drilling Unit a 2.025% undivided interest), free and clear of all royalties, claims, penalties or other encumbrances except the Encumbrances. 

(b)Upon the farmee paying for the drilling costs and if applicable completing all or any portion of 6 Test Wells in accordance with this Agreement, the farmee shall earn a 3.75% working interest in the Balance of the Farmout Lands free and clear of all royalties, claims, penalties or other encumbrances except the Encumbrances, provided that if by December 31, 2003 less than 6 Test Wells have been drilled the farmee shall earn subject to any limitations established under the Operating Agreement an interest in the Balance of the Farmout Lands by virtue of having paid for its share of drilling costs (up to but not including casing) for the Test Wells actually drilled prior to December 31, 2003, notwithstanding that the farmee has not paid for such drilling costs for 6 Test Wells. 

(c)Immediately upon the farmee earning an interest in a Test Well and the associated Drilling Unit, or in the Balance of the Farmout Lands, as the case may be, Olympic shall do all things as may be reasonably requested by the farmee to transfer to the farmee legal title to the 3.75% working interest earned by the farmee (or in the case of Test Well #1-7 the interest earned therein by the farmee), including formal recognition of the farmee's interest in the Title Documents and the Operating Agreement as provided for under the Operating Agreement, and prior to such transfer shall hold farmee's legal interest in trust for it. In connection therewith, Olympic shall in a timely fashion provide copies of all notices (including all notices of proposed operations and default notices) issued in respect of those Farmout Lands and Test Wells that the farmee earns an interest in, and shall in a timely fashion deliver all such notices (including notices of proposed operations, responses thereto and default notices) that the farmee provides to Olympic in respect thereof. In addition, Olympic shall immediately after receipt provide to the farmee its share of the revenue from the Farmout Lands which Olympic may receive on behalf of the farmee.

(d)Except for those costs set forth in Clause 3 above in respect of which the farmee is required to pay a 5% share (or a 2.7% share as regards Test Well #1-7), the farmee shall only be obligated to pay its 3.75% share (or a 4.05% share regards Test Well #1-7) of all other costs relating to the interests earned by the farmee in the Farmout Lands, Test Wells and associated Drilling Units.

5. WELL GEOLOGIC AND GEOPHYSICAL DATA

Olympic will provide the farmee with access to all seismic, geological, geophysical and other data relevant to each of the Test Wells made available to it by the Operator as soon as reasonably possible, and shall provide the farmee at all times with drilling reports, including logs pertaining to the Test Wells as received from the Operator. The farmee will have full access to the Test Well and all information relating thereto during drilling and/or completion of it.

6. OPERATING AGREEMENT

All operations on the Farmout Lands will be conducted in accordance with the terms and provisions of the Operating Agreement. Said Operating Agreement designates Lario Oil & Gas Company as Operator. This agreement is subject to the express provisions of the Operating Agreement and in the event of any conflicts between the provisions herein contained and the provisions of the Operating Agreement, the provisions of the Operating Agreement shall prevail.

8. COMPLIANCE WITH LAWS, RULES AND REGULATIONS

Olympic shall ensure all operations carried out on the Farmout Lands are conducted in accordance with the Operating Agreement and generally accepted industry practices, and shall ensure no liens are registered against any of the Farmout Lands in connection with the operations. Olympic shall ensure the timely payment of all amounts required to keep the Title Documents in good standing.

9. REPRESENTATIONS AND WARRANTIES

While Olympic does not represent or warrant title to the Farmout Lands, it does represent and warrant that:
(a) except for the Encumbrances, the Farmout Lands and the Title Documents are not subject to any royalties, net profits interests, claims or encumbrances created by, through or under Olympic or it affiliates, or of which Olympic or its affiliates have knowledge; 

(b) neither Olympic or its affiliates have received any notice of default or other claim which adversely affects the Farmout Lands, the Title Documents or Olympic's interests therein; and

(c) it has received consents to the dispositions provided for herein from all parties to the Operating Agreement. 

10. AREA OF MUTUAL INTEREST

If at any time Olympic or any of its affiliates acquires in the aggregate at least a 15% undivided interest in lands or other property located within the AMI between April 1, 2002 and April 1, 2007, Olympic shall and/or shall cause its affiliates to, within 10 days of each such acquisition, offer the farmee the right to acquire a 3.75% undivided interest in such lands or property upon the same terms and conditions which Olympic and/or its affiliates acquired such interests. To the extent possible Olympic shall consult with and involve the farmee in the acquisition before it is completed. All lands owned jointly by the parties pursuant to this clause and not subject to an existing joint operating agreement shall be governed by the Operating Agreement. If any lands are subject to an existing joint operating agreement, Olympic shall do all things necessary to have the farmee's interest therein recognized.

11. INSURANCE

Olympic shall ensure that at all times the insurance provided for in the Operating Agreement is maintained for the benefit of itself and the farmee, and that the farmee is listed as a named insured.

12. GOOD STANDING UNDER OPERATING AGREEMENT

Olympic shall at all times ensure that it is not in default under the Operating Agreement, that it participates fully on behalf of itself and the farmee in the drilling and completion of each Test Well in a timely fashion, and that it pays all costs and expenses associated therewith in strict compliance with the Operating Agreement. If at any time Olympic fails to comply with the foregoing such that the farmee is unable to earn the interest in any or all of the Test Wells or any or all of the Earning Blocks as provided for herein, then it shall immediately provide notice thereof to the farmee and, in addition:
(a) Olympic shall return all monies which were forwarded to it by the farmee pursuant to clause 3 hereof unless such monies have been forwarded to and expended by the Operator under the Operating Agreement; and

(b) Olympic shall be liable for and indemnify the farmee against all costs, damages and expenses suffered by the farmee which results from Olympic's breach of this clause 12 including without limitation all losses, costs or damages suffered by the farmee resulting from any forfeitures of interests or suspensions of rights to which Olympic is subject under the Operating Agreement.

13. SUCCESSORS IN INTEREST

This Agreement and its terms shall not be assigned and/or sold without the prior written consent of the parties hereto, such consent shall not be unreasonably withheld. 

14. CONFLICT

This Agreement shall supersede any prior correspondence or oral communication between the parties regarding terms of this Farmout Agreement. This Agreement may only be amended in writing. 

15. FORCE MAJEURE

If either party is rendered, wholly or in part, unable by force majeure to carry out its obligations under this Agreement, other than the obligation to make money payments, it shall give the other party prompt written notice of the force majeure with reasonably full particulars concerning it. Thereupon, so far as the party and its obligations are affected by the force majeure, such obligations shall be suspended during the continuance of the force majeure and for such time thereafter as is reasonably required to resume performance of the obligation following removal of the force majeure situation. The term "force majeure" as herein employed, shall mean an act of god, strike, lockout or other industrial disturbance, act of public enemy, war, blockade, public riot, lightning, fire, storm, flood, explosion, unusual government action, unusual governmental delay, restraint or inaction, unavailability of equipment or any other cause, whether of the kind specifically enumerated above or otherwise, which is not reasonably within the control of that party and which is not caused by its negligence.

16. TAX PARTNERSHIP

It is not intended by the Agreement to create, nor shall this Agreement be construed as creating any relationship between the parties hereto of employer and employees, or any partnership, or association or corporation between the parties hereto. The liabilities of the parties hereto shall be as set forth in this Agreement and Olympic and the farmee shall be responsible only for their share of the costs, expenses, debts or obligations incurred hereunder as herein provided. The parties hereto agree as between themselves to elect to be excluded from the application of Subchapter K of Chapter I of Subtitle A of the United States Internal Revenue Code of 1954, as amended, and similar provisions of the statutes of any state.

17. NOTICE

Except as otherwise specifically provided herein, any notice or other communication required hereunder shall be considered as having been given if delivered personally, or if mailed postage prepaid or telephone addressed to the following addresses respectively:

 

	
 

OLYMPIC RESOURCES (ARIZONA) LTD.
	
FAIRCHILD INTERNATIONAL

CORPORATION 

	
525-999 West Hastings St.

Vancouver, BC V6C 2W2

604-689-1810

604-689-1817 fax

ATTN: Mr. Daryl Pollock
	
600-595 Hornby St.

Vancouver, BC V6C 1A4

604-646-5614

604-688-1817

ATTN: Rob Grace

	
 
	
 

18. NON-DISCLOSURE

All information regarding a Test Well shall be held confidential for a period of one (1) year from the drilling of the Test Well. Neither party shall disclose any such confidential information to third parties without prior consent of the other party unless such disclosure is required by applicable law, rule, order or regulation or by any stock exchange on which that party is or desires to be listed.

 

IN WITNESS WHEROF, the parties have executed or have caused this instrument to be executed by their duly authorized officers and/or representatives. 

	
OLYMPIC RESOURCES (ARIZONA) LTD.

By: /s/ Darly Pollock

________________________________

Daryl Pollock

President
	
FAIRCHILD INTERNATIONAL

CORPORATION

By: /s/ Rob Grace

__________________________________

Rob Grace

PresidentEXHIBIT 10

EXHIBIT 10.1

 

 

AMENDED AND RESTATED

EMPLOYMENT AGREEMENT

 

 

THIS AMENDED AND RESTATED

EMPLOYMENT AGREEMENT (this “Agreement”) is made as of January 3,

2002 (the “Effective Date”), among Springwell Capital Corporation, a

Delaware corporation (the “Company”), I-Link Incorporated, a Florida

corporation (“I-Link”), and Helen Seltzer (“Executive”).

 

Springwell Capital Partners,

LLC (the “LLC”) owns a majority of the issued and outstanding shares of

capital stock of I-Link and all of the issued and outstanding shares of capital

stock of the Company.

 

The Company assists the LLC

in connection with the management of the business and affairs of the

Subsidiaries of the LLC, including I-Link.

 

The Company, I-Link and

Executive, among others, entered into an Employment Agreement dated as of

January 3, 2002 (the “Employment Agreement”) and now wish to amend and restate

the terms of the Employment Agreement. 

Certain definitions are set forth in Section 9 of this

Agreement.

 

The parties hereto agree

that the Employment Agreement is hereby amended and restated in its entirety to

read as follows:

 

Section 1.              Employment.

 

(a)           Employment Period. The Company agrees to employ

Executive and Executive accepts such employment for the period (the “Employment

Period”) beginning as of the Effective Date and ending upon (a) the fourth

anniversary of the Effective Date or (b) such earlier date upon which the

employment of the Executive shall terminate in accordance with Section 2

herein (the date of termination being hereinafter called the “Termination

Date”).  The Employment Period may

be extended by written agreement of the parties hereto.

 

(b)           Position and Duties.

 

(i)            During the Employment Period, Executive shall serve as

the Chief Executive Officer of I-Link and shall report to the Board.  Executive shall act as the chief executive

officer of I-Link and shall be responsible for the general management and

control of the business and affairs of I-Link and shall perform all duties and

shall have all powers which are commonly incident to the office of the chief

executive as well as all powers that are delegated to Executive by the Board.

 

(ii)           Executive shall devote her best efforts and her full

business time and attention to the business and affairs of I-Link and its

Subsidiaries, except for permitted vacation periods in accordance with I-Link’s

policy, periods of illness or other incapacity, reasonable time spent with

respect to civic and charitable activities.

 

(c)           Salary, Bonus and Benefits.

 

(i)            During the Employment Period, I-Link will pay Executive a

base salary of $275,000 per annum (the “Annual Base Salary”).   The Annual Base Salary shall be paid in

such installments as is the policy of I-Link with respect to executive officers

of the Company, but in no event less frequently than bi-weekly.

 

(ii)           Commencing with the fiscal year ending December 31, 2002,

Executive shall be eligible for a discretionary annual bonus of up to one

hundred percent (100%) of Executive’s Annual Base Salary (the “Bonus”).  The amount of any Bonus to be awarded shall

be determined by the Board, based on performance criteria established at the

beginning of each fiscal year, and the timing of such award and the payment of

any such Bonus shall be consistent with the 

 

 

1

 

 

past practice of I-Link.  Notwithstanding the foregoing, Executive’s

Bonus for the fiscal year ending on December 31, 2002 shall be in an amount

equal to at least fifty percent (50%) of Executive’s Annual Base Salary.

 

(iii)          Executive shall be entitled to participate in all employee

pension and welfare benefit plans, programs and practices maintained by I-Link

for its employees generally in accordance with the terms of such plans,

programs and practices as in effect from time to time, and in any other

insurance, pension, retirement or welfare benefit plans, programs and practices

which I-Link provides to its executives from time to time.

 

(d)           Expenses.

 

(i)            I-Link shall pay, or reimburse the Executive (at I-Link’s

option), in accordance with policies established by the Company, for all

reasonable and necessary expenses and other disbursements incurred by the

Executive for or on behalf of I-Link in the performance of her duties

hereunder, including, without limitation, travel on behalf of or in connection

with her services for I-Link in a manner customary for I-Link’s senior

executives, including food and lodging expenses while the Executive is away

from home performing services for I-Link.

 

(ii)           I-Link

shall pay (or reimburse Executive for) the following expenses, up to a maximum

of $50,000.00:

 

(A)

reasonable moving expenses incurred by the Executive to relocate to the Salt

Lake City metropolitan area;

 

(B)

the reasonable cost of maintaining an apartment or house for the Executive and

her husband in the Salt Lake City metropolitan area for up to six (6) months

following the Effective Date; and

 

(C)

the reasonable expenses (including airfare and hotel accommodations) for a

reasonable number of trips between Salt Lake City and New York City during the

six (6) month period following the Effective Date.

 

 (e)          Workplace and

Work Schedule.  Executive’s

workplace shall be I-Link’s office in Draper, Utah.  Executive shall be entitled to such holidays as are established

by the policies of I-Link.  Executive

shall be entitled to three (3) weeks of vacation per year, which may be taken

in various periods, subject to I-Link’s needs.

 

Section 2.              Termination Of Employment.

 

(a)           Death or Disability.  The Company may terminate the Executive’s employment hereunder

due to the Executive’s death or Disability. 

If the Executive dies during the Employment Period, the Termination Date

shall be deemed to be the date of the Executive’s death.

 

(b)           Cause.  The

Company may terminate the employment of Executive hereunder at any time for

Cause (such termination being referred to herein as a “Termination for  Cause”)

by giving the Executive written notice of such termination, with such

termination to take effect upon the receipt of such notice.  Notwithstanding any provisions contained

herein to the contrary, in no event shall the Company terminate the employment

of the Executive pursuant to this Section 2(b) without a prior hearing

on at least thirty (30) days’ notice to the Executive and approval of such

Termination for Cause by a majority of the entire Board.

 

(c)           Without Cause. 

The Company may terminate the employment of the Executive at any time

during the Employment Period without Cause.

 

(d)           Good Reason. 

The Executive may terminate her employment hereunder for Good Reason by

providing written notice to the Company within 45 days of her knowledge of the

event constituting Good Reason. 

Notwithstanding the foregoing provisions to the contrary, in no event

shall the Executive terminate her employment hereunder for Good Reason without

providing the Company with at least fifteen (15) days’ prior written Notice of

Termination given by the Executive to the Company and an opportunity for the

Company to cure within that fifteen (15) day period the Good 

 

 

2

 

 

Reason which the Executive believes provides

her with grounds to terminate her employment.

 

(e)           Notice of Termination.  Any purported termination pursuant to this Section 2 shall

be communicated to the Executive or the Board, as applicable, by Notice of

Termination.

 

Section 3.              Effect Of Termination Of

Employment.

 

(a)           Death, Disability or Cause.                 Upon

the termination of the Executive’s employment hereunder due to death or

Disability pursuant to Section 2(a) or Termination for Cause pursuant to

Section 2(b), neither the Executive nor her beneficiary or estate shall

have any further rights or claims against the Company or I-Link under this

Agreement, except the right to receive (i) the unpaid portion, if any, of the

Annual Base Salary provided for in Section 1 (and, if the termination

occurs prior to December 31, 2002, Executive’s guaranteed Bonus for the 2002

fiscal year), computed on a pro rata basis to the Termination Date (based on

the actual number of days elapsed over a year of 365 or 366 days, as

applicable) and (ii) reimbursement for any expenses for which the Executive

shall not have been reimbursed as provided for in Section 1 (such

amounts being collectively referred to as “Accrued Compensation”).

 

(b)           Without Cause.    Upon

a termination of the Executive’s employment hereunder by the Company without

Cause pursuant to Section 2(c), neither the Executive nor her

beneficiary or estate shall have any further rights or claims against the

Company or I-Link under this Agreement, except the right to receive

 

(i)            any Accrued Compensation;

 

(ii)           100% of the Annual Base Salary, payable in accordance with Section

1(c)(i), for the one-year period following the Termination Date.

 

(c)           Good Reason.       Upon

a termination of the Executive’s employment hereunder by the Executive for Good

Reason pursuant to Section 2(d), neither the Executive nor her

beneficiary or estate shall have any further rights or claims against the

Company or I-Link under this Agreement, except the right to receive

 

(i)            any Accrued Compensation;

 

(ii)           100% of the Annual Base Salary, payable in accordance with Section

1(c)(i), for the six-month period following the Termination Date.

 

(d)           Mititgation.           Notwithstanding

the foregoing, the Executive shall be required to mitigate the amount of any

payment provided for in  Sections

3(b)(ii) and 3(c)(ii) by seeking other employment at a comparable level to

the Executive’s position hereunder and subject to the limitations on

competition hereunder, and the amount of such payment by the Company provided

for in Section 3(b)(ii) or Section 3(c)(ii), as the case may be,

shall be reduced by any compensation earned by the Executive from a source

other than the Company during the period such payment is to be made by the

Company.

 

Section 4.              Inventions.

 

(a)           The Executive hereby assigns to I-Link the entire right,

title and interest of the Executive in and to all work, inventions, ideas,

disclosures and improvements, whether or not patented or patentable, made,

conceived or reduced to practice by the Executive, solely or with others, in

whole or in part, at any time during the Employment Period, which in any way

relate to the Business.  During the

Employment Period, the Executive shall communicate promptly and disclose to

I-Link all information, details and data pertaining to such work, inventions,

ideas, disclosures and improvements. 

The Executive shall, at any time (including any time after the

expiration of the Employment Period), execute and deliver to I-Link such formal

transfers and assignments and such other papers and documents as may be

required of the Executive to perfect I-Link’s rights hereunder and to permit

I-Link to file and prosecute patent applications.  Any work, invention, idea, disclosure or improvement by the

Executive relating to the Business within six (6) months following the

expiration of the Employment Period shall be deemed to fall within the

provisions of this Section 4 unless proved by the Executive to have been

first conceived and made following such expiration.

 

 

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(b)           Nothing in this Section 4 shall abrogate or reduce

any other restrictions on the Executive under applicable law.

 

Section 5.              Noncompetition Covenant With Respect To The

Business.

 

(a)           The Executive shall not, at any time prior to the

Termination Date or during the period thereafter ending on the later of (x) the

sixth monthly anniversary of the Termination Date, and (y) the end of the

period that the Company is to pay severance to the Executive under Section

3(b)(ii) hereunder even if severance is reduced or eliminated during such

period by other compensation earned by the Executive (such period being

referred to herein as the “Stipulated Period”), (i) engage in the

Territory in any business or activity, whether or not for profit, which is

competitive with the Business, or (ii) intentionally disrupt or attempt to

disrupt the relationship, contractual or otherwise, between the Company, I-Link

or any of their respective Subsidiaries and any third party, including, but not

limited to, any customer, supplier or employee of any of them.  The Executive shall be deemed to have

violated the provisions of the foregoing sentence if she shall (A) solicit or

directly or indirectly for herself or any third party hire or otherwise retain

the services of any individual who shall have been an employee of the Company,

I-Link or any of their respective Subsidiaries within the immediately preceding

six (6) month period, (B) be an employee, officer or director of, consultant to,

or owner of an equity interest in any Person engaged or intending to engage in

any activity which would violate the provisions of the foregoing sentence if

engaged in by the Executive; provided, however, that (x) the Executive may own

up to, but not more than, a 1% equity interest in any public company with a

market capitalization in excess of $100,000,000, and (y) the Executive may

engage in a business or activity which derives less than 25% of its revenues

from the Business for the twelve (12) month period preceding the Executive’s

first engaging therein and which has projected less than 25% of its revenues

from the Business for the twelve (12) month period following the Executive

first engaging therein, and (z) the Executive may be employed by a Person

deriving 25% or more of its revenue from the Business so long as her activities

for such a Person are in areas unrelated to the Business.

 

(b)           During the term of the Executive’s

employment and the Stipulated Period, the Executive shall inform all Designated

Persons of the existence of this Agreement and the relevant terms of Sections

4, 5 and 6.

 

Section 6.              Unauthorized Disclosure.

 

The Executive shall not make

any Unauthorized Disclosure.  For

purposes of this Agreement, “Unauthorized Disclosure” means disclosure

by the Executive without the consent of the Board to any Person, other than an

employee of the Company, I-Link or a Person to whom disclosure is reasonably

necessary or appropriate in connection with the performance by the Executive of

her duties as an executive of I-Link or as may be legally required, of any

confidential information about the Company, I-Link or any of their respective

Subsidiaries obtained by the Executive while in the employ of the Company

(including, but not limited to, any confidential information with respect to

any of I-Link’s customers or methods of distribution) the disclosure of which

she knows or has reason to believe will be materially injurious to the Company,

I-Link or any of their respective Subsidiaries; provided, however, that such

term shall not include the use or disclosure by the Executive, without consent,

of any information known generally to the public (other than as a result of

disclosure by her in violation of this Section 6) or any information not

otherwise considered confidential by a reasonable Person engaged in a business

similar to that conducted by the Company, I-Link or any of their respective

Subsidiaries.

 

Section 7.              Acknowledgments By The Executive.

 

The Executive understands

that the restrictions contained in Sections 4, 5 and 6 herein may limit

her ability to earn a livelihood in a competing business, but the Executive

nevertheless believes that she has received and will receive sufficient

consideration and other benefits as an employee of the Company and as otherwise

provided hereunder, including the significant number of Executive Securities

being issued to the Executive, to clearly justify such restrictions which, in

any event (given her education, skills and ability), the Executive does not believe

would prevent her from earning a livelihood.

 

Section 8.              Tax Withholding.

 

The Company and I-Link may

withhold from any compensation or severance payable under this Agreement all

federal, state, city or other taxes as shall be required pursuant to any law or

governmental regulation or ruling.

 

 

4

 

 

Section 9.              Definitions.

 

“Affiliate” of any

particular Person means (i) any other Person controlling, controlled by, or

under common control with such particular Person, where “control” means the

possession, directly or indirectly, of the power to direct the management and

policies of a Person whether through the ownership of voting securities, by

contract, or otherwise, and (ii) if such Person is a partnership, any partner

thereof.

 

“Board” means the

Board of Directors of I-Link.

 

“Business” means the

offering of out-sourced, Internet-based unified messaging services for business

customers and consumers, including the provision of fax delivery using

telephone transmissions delivered through the Internet.  “Business” also means any other business

activity which is I-Link’s principal Internet-related business activity at the

time either Sections 4 or 5 is invoked.

 

“Cause” means (i) the

Executive’s conviction of a crime constituting a felony, or (ii) any of the

following performed or caused by the Executive which may reasonably be

anticipated to have a Material Adverse Effect and which, if curable, remains

uncured for a period of fifteen (15) days after written notice thereof is

delivered from the Company to the Executive: 

(A) the willful and continued failure to substantially perform the

duties described in Section 1 (other than any failure resulting from an

illness), (B) misappropriation of funds, properties or assets of the I-Link or

any of its Subsidiaries, (C) commission of a material tort relating to the

Executive’s employment with the Company, and (D) breach of the fiduciary duty

owed by the Executive to the Company, I-Link or of their respective

Subsidiaries.

 

“Designated

Person” means any person proposing (i) to hire or retain the Executive as

an employee, consultant, director, teacher, lecturer or author, or (ii) to make

a financial investment (whether equity or debt) in any Person in which the

Executive owns or may own an equity interest (other than a public company with

a market capitalization in excess of $100,000,000 in which the Executive owns

up to, but not more than a 1% equity interest).

 

“Disability” means a

physical or mental infirmity which impairs the Executive’s ability to perform

substantially her duties for a total period exceeding six (6) months during the

Employment Period or for a period of four (4) consecutive months.  Disability shall be determined by a

physician acceptable to both the Company and the Executive, or, if the Company

and Executive cannot agree upon a physician within 15 days after the Company

claims that the Executive is suffering from a Disability, by a physician

selected by two physicians, one designated by each of the Company and the

Executive.  The Executive’s failure to

submit to any physical examination by any such physician after such physician

has given reasonable notice of time and place of such examination shall be

conclusive evidence of the Executive’s inability to perform her duties

hereunder.

 

 “Good Reason” means, during the Employment Period and

without Executive’s consent:

                (i)            a material diminution of Executive’s title, reporting

structure, position or responsibilities or

 

(ii)           a reduction in, or failure to pay, Executive’s

Annual Base Salary or any reduction in the benefits being  required to be provided herein or any other

material breach of this Agreement.

 

“Material Adverse Effect”

means a material adverse effect on the business, operations, financial

condition, results of operations, properties, assets or liabilities of the

I-Link and its Subsidiaries taken as a whole.

 

“Notice of Termination”

means a written notice which indicates the Termination Date, the specific

termination provision in this Agreement relied upon, and the facts and

circumstances, if any, claimed to provide a basis for such termination.

 

“Person” means an

individual, a partnership, a limited liability company, a corporation, an

association, a joint stock company, a trust, a joint venture, an unincorporated

organization and a governmental entity or any department, agency or political

subdivision thereof.

 

 

5

 

 

“Subsidiary” means

any corporation or other entity of which the securities having a majority of

the ordinary voting power in electing the board of directors are, at the time

as of which any determination is being made, owned by the Company either

directly or through one or more Subsidiaries.

 

“Territory” means any

of the following geographic areas in which products, processes or services have

been manufactured, provided, sold or offered or promoted for sale by I-Link or

any of its Subsidiaries or with respect to which I-Link or any of its

Subsidiaries has devoted substantial expense in anticipation of launching into

such area a portion of the Business: 

(i) the United States of America, including its territories, (ii)

Canada, (iii) Mexico, and (iv) each country in the European Union.

 

Section 10.            Notices.

 

Any notice provided for in

this Agreement must be in writing and must be either personally delivered,

mailed by first class mail (postage prepaid and return receipt requested) or

sent by reputable overnight courier service (charges prepaid) to the recipient

at the address below indicated:

 

If to Company:

 

Springwell Capital Corporation.

One Landmark Square

Suite 320

Stamford, Connecticut 06901

Attention:  Chairman

 

with copies to:

Counsel Corporation (US)

280 Park Avenue

28th Floor West

New York, New York 10017

Attention: Chief Executive Officer

 

If

to I-Link:

 

I-Link Incorporated

13751 S. Wadsworth Drive

Draper, Utah 84020

 

If to Executive:

 

32 North Ridge Way

Sandy, Utah

 

or such other address or to the attention of

such other person as the recipient party shall have specified by prior written

notice to the sending party.  Any notice

under this Agreement will be deemed to have been given when so delivered or

sent or, if mailed, five days after deposit in the U.S. mail.

 

Section 11.            General Provisions.

 

(a)           Severability. 

Whenever possible, each provision of this Agreement will be interpreted

in such manner as to be effective and valid under applicable law, but if any

provision of this Agreement is held to be invalid, illegal or unenforceable in

any respect under any applicable law or rule in any jurisdiction, such

invalidity, illegality or unenforceability will not affect any other provision

or any other jurisdiction, but this Agreement will be reformed, construed and

enforced in such jurisdiction as if such invalid, illegal or unenforceable provision

had never been contained herein.

 

 

6

 

 

(b)           Complete Agreement.  This Agreement, those documents expressly referred to herein and

other documents of even date herewith embody the complete agreement and

understanding among the parties and supersede and preempt any prior

understandings, agreements or representations by or among the parties, written

or oral, which may have related to the subject matter hereof in any way.

 

(c)           Counterparts. 

This Agreement may be executed in separate counterparts, each of which

is deemed to be an original and all of which taken together constitute one and

the same agreement.

 

(d)           Successors and Assigns.  Except as otherwise provided herein, this Agreement shall bind

and inure to the benefit of and be enforceable by Executive, the Company and

I-Link and their respective successors and assigns; provided that the

rights and obligations of Executive under this Agreement shall not be

assignable.

 

(e)           Choice of Law. 

This Agreement will be governed by and construed in accordance with the

internal laws of the State of New York, without giving effect to any choice of

law or conflict of law provision or rule (whether of the State of New York or

any other jurisdiction) that would cause the application of the laws of any

jurisdiction other than the State of New York.

 

(f)            Remedies. 

Each of the parties to this Agreement will be entitled to enforce its

rights under this Agreement specifically, to recover damages and costs

(including attorney’s fees) caused by any breach of any provision of this

Agreement and to exercise all other rights existing in its favor.  The parties hereto agree and acknowledge

that money damages may not be an adequate remedy for any breach of the

provisions of this Agreement and that any party may in its sole discretion

apply to any court of law or equity of competent jurisdiction (without posting

any bond or deposit) for specific performance and/or other injunctive relief in

order to enforce or prevent any violations of the provisions of this Agreement.

 

(g)           Amendment and Waiver.  The provisions of this Agreement may be amended and waived only

with the prior written consent of the Company, I-Link and Executive.

 

(h)           Insurance. 

The Company, at its discretion, may apply for and procure in its own

name and for its own benefit life and/or disability insurance on Executive in

any amount or amounts considered available. 

Executive agrees to cooperate in any medical or other examination,

supply any information, and to execute and deliver any applications or other

instruments in writing as may be reasonably necessary to obtain and constitute

such insurance.  Executive hereby

represents that she has no reason to believe that her life is not insurable at

rates now prevailing for healthy women of her age.

 

(i)            Termination. 

This Agreement (except for the provisions of Sections 1(a),  (b),

(c) and Section 3) shall survive a Separation and shall remain in full

force and effect after such Separation.

 

IN WITNESS WHEREOF, the

parties hereto have executed this Amended and Restated Employment Agreement on

the date first written above.

 

	

   

  	

   

  	

  SPRINGWELL CAPITAL

  CORPORATION

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

   

  	

  Name:

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  Its:

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  I-LINK INCORPORATED

  	

   

  
	

   

  	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

   

  	

  Name:

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  Title:

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  Helen Seltzer

  
									

 

 

7

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