Document:

MODIFICATION AND AMENDMENT AGREEMENT

 

This Modification and Amendment Agreement (“Agreement”) dated as of August 2, 2005 is entered into by and among AVVAA World Health Care Products, Inc., a Nevada corporation (the “Company”) and the subscribers identified on the signature page hereto (each a “Subscriber” and collectively “Subscribers”).

 

WHEREAS, the Company and the Subscribers are parties to a Subscription Agreement (“Subscription Agreement”) dated April 5, 2005 relating to an aggregate investment by Subscribers in $1,100,000 of principal amount of promissory notes of the Company convertible into shares of the Company’s $.001 par value common stock and Warrants in the amounts set forth on Schedule A attached hereto; and

 

WHEREAS, on the Initial Closing Date $660,000 of the Purchase Price was paid to the Company and up to $440,000 of the Purchase Price was payable within five business days after the Actual Effective Date, which is the Second Closing Date.

 

NOW THEREFORE, in consideration of the mutual covenants and other agreements contained in this Agreement, the Company and the Subscribers hereby agree as follows:

 

1.                                  All the capitalized terms employed herein shall have the meanings attributed to them in the Subscription Agreement and the documents and agreements delivered therewith.

 

2.                                  The Company agrees to file form 10KSB for the fiscal year end May 31, 2005 not later than August 15, 2005.

 

3.                                  The Liquidated Damages as described in Section 11.4 of the Subscription Agreement shall be amended from an amount equal to two percent (2%) to an amount equal to five percent (5%) for each thirty (30) days or part thereof of the Purchase Price of the Notes remaining unconverted and Purchase Price of Shares issued upon conversion of the Notes owned of record by the holder which are subject to a Non-Registration Event.

 

4.                                  The maximum Conversion Price, as set forth in Section 2.1. (b) of the Note, shall be $0.16. There shall be no minimum Conversion Price.

 

5.                        For the benefit of the parties hereto, the Company hereby makes all the representations, warranties, covenants undertakings and indemnifications contained in the Transaction Documents, as if such representations were made by the Company as of this date. The Subscribers hereby make all of the representations, warranties, covenants, indemnifications and undertakings contained in the Transaction Documents as if such representations were made by the Subscribers as of this date.

 

6.                       Subscribers agree to accelerate a funding of an aggregate of $140,000 of the Second Closing Purchase Price in the amounts set forth on the signature page hereto (“Interim Funding”). The balance of the Second Closing Purchase Price will be funded on the Second Closing Date pursuant to the Subscription Agreement.

 

7.                                  All of the terms and conditions described in Section 2 of the Subscription Agreement in reference to the Second Closing shall apply to the Interim Funding Closing, as if such representations and warranties were made and given on all such dates except for the requirement that the Registration Statement be declared effective as a condition to the Second Closing.

 

1

 

 

 

8.                      All other terms and conditions of the Transaction Documents, including any damages or interest which have accrued shall remain in full force and effect and payable.

 

9.                      Each of the undersigned states that he has read the foregoing Agreement and understands and agrees to it.

 

10.                    A Use of Proceeds for the Interim Funding closing is attached hereto on Schedule B. A deviation of five percent (5%) or more from the Use of Proceeds shall be deemed an Event of Default under the Transaction Documents.

 

11.                    A legal fee of $3,000 will be paid to Grushko & Mittman, P.C. in connection with this Interim Funding.

 

 

	
            AVVAA WORLD HEALTH CARE PRODUCTS, INC.
 

 

	
            /s/  J.S. Farley
 	
             

	
            Jack Farley
 	
             

	
            President/CEO
 
			

 

	
            /s/  Alpha Capital Aktiengesellschaft
 	
            /s/  Platinum Partners Value Arbitrage Fund L.P.
 

	
            ALPHA CAPITAL AKTIENGESELLSCHAFT

($57,273.00)
 	
            PLATINUM PARTNERS VALUE
 ARBITRAGE FUND
L.P.
 

	
             
 	
            ($57,273.00)
 

 

 

	
            /s/ JM Investors LLC
 	
            /s/  Osher Capital Corp.
 	
             

	
            JM INVESTORS
 	
            OSHER CAPITAL CORP.
 
	
            ($19,090.00)
 	
            ($6,364.00)
 	
             

				

 

 

2exv10w1

 

EXHIBIT 10.1

Summary of Interwoven, Inc. Non-employee Director Compensation

          Cash Compensation. Each non-employee director receives an annual fee of $20,000 for
service on the Board of Directors. In addition, each non-employee director receives an annual fee
of $5,000 for each standing committee of the Board of Directors on which he or she serves. The
chairperson of the Audit Committee is paid an additional $5,000 per year and the chairperson of the
Compensation Committee is paid an additional $2,500 per year for their service as chairpersons of
those committees. Interwoven, Inc.’s Lead Independent Director is paid an additional $10,000 per
year for his or her services in that capacity. In addition, Interwoven, Inc. reimburses reasonable
travel and related expenses incurred by non-employee directors in connection with their attendance
at meetings of the Board of Directors and its committees.

          Option Grants. Under the 1999 Equity Incentive Plan, each non-employee director is
automatically granted an option to purchase 10,000 shares of common stock under this plan when
first becoming a member of the Board of Directors. Subsequently, each non-employee director is
automatically granted an additional option to purchase 10,000 shares of common stock following each
annual meeting of stockholders if the director has served continuously as a member of the Board of
Directors for at least one year. Each option granted to a director under the 1999 Equity Incentive
Plan has a ten-year term and terminates three months following the date the director ceases to be
one of Interwoven, Inc.’s directors or consultants, 12 months afterwards if termination is due to
death or disability. All such options are fully vested and immediately exercisable as of the date
of grant. In addition, non-employee directors are eligible to receive discretionary awards under
the 1999 Equity Incentive Plan.

          Other Benefits. Each non-employee director is eligible and may elect to receive medical,
dental and vision benefits. These benefits are available to Interwoven, Inc. employees, officers
and directors generally and in operation provide for the same method of allocation of benefits
between management and non-management participants.EX-10.1

EMPLOYMENT AGREEMENT

This Employment Agreement (“Agreement”) is made as of the 27th day of December,
2004, by and between Nevada Security Bank (“Bank”), and Hal Giomi (“Executive”).

RECITALS

WHEREAS, the Bank desires to employ the Executive as its Chief Executive Officer and to avail
itself of his skill, knowledge and experience to ensure the successful management of its business;

WHEREAS, the Executive wishes to be employed by the Bank in the above-mentioned capacity for the
Term hereinafter described;

WHEREAS, by execution of this Agreement the parties desire to specify the terms of the Executive’s
employment with the Bank;

NOW, THEREFORE, in consideration of the covenants and conditions contained herein, it is agreed
that from December 27, 2004 (the “Effective Date”), the following terms and conditions shall apply
to the Executive’s employment:

1. EMPLOYMENT TERM: The Bank hereby employs the Executive and the Executive hereby
accepts employment with the Bank for a period of three (3) years commencing with the Effective Date
of this agreement (the “Term), subject, however, to prior termination of this Agreement as
hereinafter provided. As used in this Agreement, the word “Term” shall refer to the entire period
of employment of the Executive by the Bank hereunder, whether for the period provided hereunder, or
whether terminated earlier as hereinafter provided. The Employment Term shall automatically renew
for subsequent three-year (3) periods, unless at least ninety (90) days prior to the ending of the
Employment Term, either party to the Agreement provides written notice of the party’s intent to
terminate the Agreement.

2. DUTIES OF THE EXECUTIVE:

2.1 Duties: The Executive shall hold the office of Chief Executive Officer of the
Bank and will perform the duties normally performed by such officer of a bank, including the
general supervision and operation of the business and affairs of the Bank, subject to the powers
vested in the Board of Directors of the Bank and in the Bank’s shareholders pursuant to the Bank’s
Charter and By-Laws, and by applicable law. During the Term, the Executive shall perform
exclusively the services herein contemplated to be performed by him under this Agreement
faithfully, diligently to the best of his ability, consistent with the highest and best standards
of the banking industry and in compliance with all applicable laws and the Bank’s Articles of
Incorporation and By-Laws.

2.2 Place of Performance: The Executive shall perform said duties throughout the
Bank’s service area and be located at the Bank’s principal executive offices. Except as provided
herein, the duties, positions and business location hereunder may only be changed by written
agreement of the parties.

2.3 Conflict of Interest: Except with prior written consent of the Board of Directors
of the Bank, the Executive shall devote his entire productive professional time, ability and
attention to the business of the Bank during the Term, and the Executive shall not directly or
indirectly render any services of a business, commercial or professional nature to any other
person, firm or corporation, whether for compensation or otherwise, which are in conflict with the
Bank’s interest. Notwithstanding the foregoing, the Executive may make investments of a passive
nature in any business or venture; provided, however, that such business or venture shall not be in
competition, directly or indirectly, in any manner with the Bank.

3. COMPENSATION

3.1 Base Salary: For the Executive’s services hereunder, the Bank shall pay or cause
to be paid, as a base salary to the Executive a minimum of One Hundred Eighty Thousand Dollars
($180,000) per year each year of the Term, prorated for any portion of a year, in which this
Agreement is in effect. The Executive’s salary shall be payable in equal installments in
conformity with the Bank’s normal payroll period. Annual increases shall be made at the sole
discretion of the Board of Directors. The parties understand and agree that pursuant to applicable
federal law the Bank is prohibited from compensating the Executive for any services rendered to The
Bank Holdings and that The Bank Holdings shall reimburse the Bank a portion of the Executive’s
salary for all services rendered to The Bank Holdings by the Executive.

3.2 Bonuses: Such a plan shall be within the complete and sole discretion of the
Board of Directors. The Executive shall be entitled to participate in the Bank’s Executive
Compensation Plan (“Bonus Plan”) which will be developed by the Bank’s Board of Directors. It is
understood that the terms, conditions, eligibility, benefits, provisions and grants from such a
plan shall be within the complete and sole discretion of the Board of Directors.

3.3 Stock Options: Pursuant to “The Bank Holdings Stock Option Plan,” the Executive
shall be granted the option to purchase a minimum of Sixty Thousand (60,000) shares of The Bank
Holdings Common Stock. All of the terms, conditions, vesting rights, qualifications, eligibility
requirements and other provisions of “The Bank Holding Stock Option Plan” are incorporated into
this Agreement by this reference. The Executive acknowledges that he has received, reviewed and
understood the provision of “The Bank Holdings Stock Option Plan.” Any increase in the number of
options granted to the Executive pursuant to this Agreement shall be made at the sole discretion of
the Board of Directors.

4. EXECUTIVE BENEFITS

4.1 Vacation: The Executive will be entitled to six (6) weeks vacation during each
year of the Term, prorated for any portion of a year. The Executive is required to and shall take
at least two (2) weeks of vacation annually (the “Mandatory Vacation”) which shall be taken
consecutively. Should Executive not take the entire six (6) weeks vacation during each year, the
unused vacation shall accrue and be taken the following year. The Executive may accumulate thirty
(30) days of vacation in excess of his current year’s entitlement. At the end of the year, any
vacation not used in excess of such thirty (30) days shall be paid out to the Executive in lieu of
accrued vacation.

4.2 Automobile Allowance: The Bank shall pay the Executive the sum of Seven Hundred
Fifty Dollars ($750) per month as and for expenses to cover all costs of use, maintenance, repair,
upkeep, fuel, cleaning and operation of his automobile (except mileage costs incurred to travel to
locations outside of the Reno service area) used in the course and scope of his employment.

4.3 Insurance Coverage: The Bank, at the Bank’s expense, shall provide for the
Executive and his dependent family, medical, dental, and vision coverage, and, for the Executive
himself, life, accident, disability and the like insurance benefits equivalent to the maximum
benefits available from time to time under the Bank’s Group Insurance program for an employee of
the Executive’s salary level during the Term. Additionally, the Bank, at its expense, shall
provide the Executive with term life insurance benefits in the amount of not less that Five Hundred
Thousand Dollars ($500,000) with beneficiary to be of the Executive’s choice, provided that the
Executive is rated in the highest category by the Insurance Company. If rated lower, the Bank will
spend the amount it would have spent for the highest rating and purchase the maximum amount of
insurance at the Executive’s lower rating. Said coverage shall be in existence and take effect as
of the Effective Date and shall continue throughout the Term. The Bank shall provide the Executive
with disability insurance providing for monthly disability payments.

4.4 Business Expenses: The Executive shall be entitled to reimbursement by the Bank
for any ordinary and necessary business expenses he incurs in the performance of his duties during
the Term, including, but not limited to, entertainment, dues, and other expenses, meals, travel
expenses, conventions, meetings, seminars and the like which are reasonable for the office of the
Executive.

4.5 Club Memberships: The Executive shall be provided paid membership in clubs
selected by the Chief Executive Officer.

4.6 Retirement Benefits:  Retirement age shall be at a minimum Sixty-two (62) years
of age. Upon retirement Bank, at its expense, will provide the Executive and his eligible
dependents the equivalent maximum benefit available through the Bank’s Group Insurance program for
an employee of the Executive’s salary level. This group insurance benefit shall continue until the
Executive is eligible to qualify for governmental healthcare benefits (including, but not limited
to, Medicare benefits). Upon eligibility to qualify for such governmental benefits the Bank’s
obligation to provide the group insurance benefits noted above shall cease and the Bank will, at
its expense, provide the Executive and his eligible dependents additional insurance benefits to
supplement the governmental healthcare benefits for which Executive is eligible to qualify. This
supplemental insurance plan benefits shall include, at a minimum, Medicare supplemental, vision,
dental, and prescription drug benefits.

5. TERMINATION

5.1 Termination for Cause: The Bank may terminate this Agreement at any time by
action of its Board of Directors, without further obligation or liability to the Executive, in the
event that:

5.1.1 The Executive commits an act or acts of malfeasance or misfeasance in his duties; or

5.1.2 The Executive fails to abide by and/or enforce the Bank’s safety and soundness policies;
or

5.1.3 The Executive is convicted of a felony or misdemeanor involving moral turpitude; or
State and/or Federal regulators request or order termination of this Agreement; or

5.1.4 The Executive commits any act, which could cause termination of Coverage under the
Bank’s Blanket Bond as to the Executive, as distinguished from termination of such coverage as to
the Bank as a whole; or

5.1.5 The Executive dies.

5.2 Termination without Cause: In the event the Board of Directors of the Bank
determines that either (i) the continued association of the Executive with the Bank or (ii) the
performance of his duties by the Executive is not in the best interest of the Bank, then the Bank
may terminate this Agreement by action of its Board of Directors. In the event of such termination
without cause, and subject to any limitation of payments to Officers and Directors under applicable
Federal and State law, the Executive shall be paid as and for severance payments and in lieu of any
and all other Compensation, remedy or damages, a lump-sum equal to not less than Twenty-four (24)
months compensation at the then current base salary of the Executive, plus an additional severance
payment of one (1) month of the Executive’s then current base salary for each year of service to
the Bank, plus any accrued but unpaid Bonus Compensation described elsewhere in this Agreement. In
addition, the Bank, at its expense will provide the Executive and his dependent family with
insurance coverage, as described in Paragraph 4.3 above, following the Executive’s termination for
a period of time not less than twelve (12) months plus one (1) additional month for every year of
service provided by the Executive to the Bank. Upon such payment, any and all obligations of the
Bank to the Executive shall have been fully and completely satisfied and the Executive shall be
entitled to no additional compensation, claim, right or benefit hereunder or otherwise.

5.3 Action by Supervisory Authority: If the Bank is closed or taken over by any
banking supervisory authority, such banking authority may immediately terminate this Agreement
without liability or obligation to the Executive.

5.4 Merger or Corporate Dissolution: In the event of any of the following
occurrences, the Executive may terminate this Agreement: (i) a dissolution or liquidation of the
Bank or The Bank Holdings; (ii) a reorganization, merger, or consolidation of the Bank or The Bank
Holdings with one or more corporations, the result of which (A) the Bank or The Bank Holdings is
not the surviving corporation or (B) the Bank or The Bank Holdings becomes a subsidiary of another
corporation (which shall be deemed to have occurred if another corporation shall own, directly or
indirectly, over 25% of the aggregate voting power of all outstanding equity securities of the Bank
or The Bank Holdings); (iii) a sale of substantially all the assets of the Bank or The Bank
Holdings to another corporation; or (iv) a sale of the equity securities of the Bank or The Bank
Holdings representing more than 25% of the aggregate voting power of all outstanding equity
securities of the Bank or The Bank Holdings to any person or entity or any group of persons and/or
entities acting in concert. In the event of such termination, and subject to any limitation of
payments to Officers and Directors under applicable Federal and State law, the Executive shall be
paid, as and for severance payments and in lieu of any and all other compensation remedy or
damages, a lump-sum equal to not less than Twenty-four (24) months compensation at the then current
base salary of the Executive, plus an additional severance payment of one (1) month of the
Executive’s then current base salary for each year of service to the Bank, plus any accrued but
unpaid Bonus Compensation described elsewhere in this Agreement. In addition, the Bank, at its
expense, will provide the Executive and his dependent family with insurance coverage, as described
in Paragraph 4.3 above, following the Executive’s termination for a period of not less than Twelve
(12) months plus one (1) additional month for every year of service provided by the Executive to
the Bank. Upon such payment, any and all obligations of Bank to the Executive shall have been
fully and completely satisfied and the Executive shall be entitled to no additional compensation,
claim, right or benefit hereunder or otherwise. Any stock options shall only be exercised in
accordance with “The Bank Holdings Stock Option Plan” referenced and incorporated in this
Agreement.

5.5 Termination by the Executive:  The Executive may terminate his employment
hereunder at any time upon ninety (90) days written notice to the Bank. In such event, the
Executive shall be entitled to all salary, bonus and other benefits (accrued vacation, etc.), which
have accrued prior to the effective date of termination. Any stock options shall only be exercised
in accordance with “The Bank Holdings Stock Option Plan” referenced and incorporated in this
Agreement.

6. GENERAL PROVISIONS:

6.1 IRS Section 280G. If any portion of the amounts payable to the Executive under
this Agreement as a result of a Merger or Corporate Dissolution defined in Section 5.4 above,
either alone or together with other payments or benefits which are “contingent on change in
ownership or control” would constitute “excess parachute payments” that are subject to the excise
tax imposed by section 4999 (or similar tax and/or assessments) of the Internal Revenue Code of
1986, as amended (Code) then such payments shall either be (i) paid in full, or (ii) reduced to an
amount equal to two hundred ninety-nine percent (299%) of the Executive’s “base amount”, whichever
of the foregoing payments, taking into account the applicable federal, state and local income taxes
and the excise tax imposed by Code section 4999, results in the receipt by the Executive on an
after-tax basis of the greatest amount of benefits. If any such payments under this Agreement are
“excess parachute payments”, Executive shall be responsible for the payment of any excise taxes and
Bank (or its successor) shall be responsible for any loss of deductibility related thereto. If, at
a later date, it is determined that the amount of excise taxes payable by the Executive is greater
than the amount initially so determined, then the Executive shall pay an amount equal to the sum of
such additional excise taxes and any interest, fines and penalties resulting from such
underpayment.

Any determination required under this Section 6.1 shall be made in writing

by the Bank’s independent public accountants immediately prior to a Merger or Corporate Dissolution
(“Accountants”), whose determination shall be conclusive and binding upon the Executive and the
Bank for all purposes. For purposes of making the calculations required by this Section 6.1, the
Accountants may make reasonable assumptions and approximations concerning applicable taxes and may
rely on reasonable, good faith interpretations concerning the application of Code sections 280G and
4999. The Executive and the Bank shall furnish the Accountants with such information and documents
as the Accountants may reasonably request in order to make a determination (or determinations)
under this Section. The Bank shall bear all costs the Accountants may reasonably incur in
connection with any calculations contemplated by this Section 6.1.

The terms “contingent on change in ownership or control”, “excess parachute payments” and
“base amount”, are defined in Code section 280G and Treasury Regulations section 1.280G-1. This
Section 6.1 shall apply and be interpreted in accordance with Code section 280G and the Treasury
regulations promulgated thereunder effective January 1, 2004, or the Treasury regulations then in
effect.

6.2 Indemnification: To the extent permitted by law, applicable statutes, the
Articles of Incorporation, the By-Laws and resolutions of the Bank in effect from time to time, the
Bank shall indemnify the Executive against liability or loss arising out of the Executive’s actual
or asserted misfeasance of malfeasance in the performance of the Executive’s duties or out of any
actual or asserted wrongful act against, or by, the Bank including but not limited to judgments,
fines, settlements and expenses incurred in the defense of actions, proceedings and appeals
therefrom. The Bank shall provide Directors and Officers Liability Insurance to indemnify and
insure the Bank and the Executive from and against the aforementioned liabilities. The provisions
of this paragraph shall apply to the estate, executor, administrator, heirs, legatees or devisees
of the Executive.

6.3 Notices: Any notice, request, demand or other communication required or permitted
hereunder shall be deemed to be properly given when personally served in writing, when deposited in
the United States mail, postage prepaid, or when communicated to public telegraph company for
transmittal, addressed to the party at the parties’ last known address contained in the records at
the Bank. Either party may change address by written notice in accordance with this paragraph.

6.4 Benefits of Agreement: This Agreement will inure to the benefits of and be
binding upon its parties and their respective executors, administrators, successors and assigns.

6.5 Applicable Law: This Agreement is to be governed by and construed under the laws
of the State of Nevada.

6.6 Captions and Headings: Captions and headings are used in this Agreement for
convenience only, are not a part of this Agreement between the parties and shall not be used in
construing it.

6.7 Invalid Provision: Should any portion or provision of this Agreement for any
reasons be declared invalid, void, or unenforceable by a court of competent jurisdiction, the
validity and binding effect of all remaining portions or provisions shall not be affected; and the
remainder of this Agreement shall remain in full force and effect as if this Agreement had been
executed with said portion or provision eliminated.

6.8 Entire Agreement: This Agreement contains the entire agreement of the parties and
supersedes all other agreements, either oral or in writing, between the parties hereto with respect
to the employment of the Executive by the Bank. Each party to this Agreement acknowledges that no
representations, inducements, promises or agreements, oral or otherwise, have been made by any
party or anyone acting on behalf of any party, which are not embodied herein and that no other
agreement, statement or promise not contained in this Agreement shall be valid or binding. This
Agreement may not be modified or amended by oral agreement but only by an agreement in writing
signed by the Bank and the Executive.

6.9 Arbitration: Any dispute, controversy or claim arising out of or relating to this
Agreement, or the breach thereof, or the employment relationship between the parties shall be
submitted to final and binding arbitration in accordance with the rules of the American Arbitration
Association, and judgment upon the award rendered by the arbitrator(s) may be entered into any
court having jurisdiction thereof.

6.10 Attorney’s Fees: If any action, including arbitration, is brought to enforce
this Agreement or to determine the relative rights and obligations for either of its parties, the
prevailing party shall be entitled to reasonable attorney’s fees.

6.11 Receipt of Agreement: Each of the parties hereto acknowledges that he has read
this Agreement and any referenced or incorporated documents in their entirety and does hereby
acknowledge receipt of fully-executed copies thereof. A fully-executed copy of this Agreement
shall be an original for all purposes and is a duplicate original.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the 15th day of
September, 2005.

	 	 	 
	The “Bank”

Nevada Security Bank

	 	The “Executive”

Hal Giomi

Ed Allison, Chairman of the Board

By:      /s/Ed Allison     By:      /s/ Hal Giomi

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