Document:

Form Performance Unit Award Agreement

 Exhibit 10.27 to 2004 10-K 
  
 PERFORMANCE UNIT AWARD 
 UNDER THE PROVISIONS OF 
 THE CONVERGYS CORPORATION 
 1998 LONG TERM INCENTIVE PLAN, AS AMENDED 
  
 Pursuant to the provisions of the Convergys Corporation 1998 Long Term Incentive Plan, as amended (the “Plan”), a copy of which has been
delivered to you, the Compensation and Benefits Committee of the Board of Directors of Convergys Corporation (the “Compensation Committee”) has granted you a performance unit award, on and subject to the terms of the Plan and your
agreement to the following terms, conditions and restrictions. 
  
 1. Earning and Payout of Award. Subject to and upon the terms, conditions, and restrictions set forth in this Agreement, Convergys Corporation (the “Company”) shall pay you the amount earned in accordance with the payout
schedule provided to you separately (the “Payout Schedule”) as soon as administratively practicable following December 31, XXXX (the “Vest Date”) depending on the level of satisfaction of the performance criteria described in
Section 2 below. 
  
 2. Performance Criteria. You shall be
entitled to receive a payment under this Agreement based on (a) the Company’s Total Shareholder Return (“TSR”) over the three consecutive calendar year period ending on the Vest Date (the “performance period”) relative to
the Total Shareholder Return of the companies included in the New Composite Group of companies listed in the Company’s XXXX proxy statement (other than any company(ies) in such peer group that ceases to exist prior to the last day of the
performance period due to merger, bankruptcy or other corporate event) (collectively, the “Peer Group”) over the performance period and (b) the Payout Schedule. In the event that the number of companies in the Peer Group as of the end of
the applicable performance period is less than XX, the Peer Group used for purposes of this award shall become YYY. The amount earned will be paid in cash as soon as administratively practicable following the end of the performance period.

  
 “TSR” means stock price
appreciation plus dividend yield, assuming immediate reinvestment of dividends in the stock with respect to which such dividends were paid, over the term of the performance period. Stock price appreciation over the term of the performance period for
a company will be determined by comparing (c) the average close price as reported in the Wall Street Journal of the stock of the applicable company for each trading day occurring during the calendar quarter ending on the day immediately preceding
the start of the performance period to (d) the average close price as reported in the Wall Street Journal of the stock of the applicable company for each trading day occurring during the calendar quarter ending on the last day of the performance
period.  
  
 3. Forfeiture of Award. 
  

	 	a.	Your right to receive a payout pursuant to this Agreement shall be forfeited automatically and without further notice if you cease to be an employee of the Company and its
affiliates prior to the Vest Date for any reason other than death, disability, retirement or involuntary termination without cause. For purposes of this Agreement: 

  

	 	(i)	“disability” has the same meaning as in the Company’s long-term disability plan; 

	 	(ii)	“retirement” means termination of employment after (I) attaining age 55 and completing at least ten years of service with the Company or any of its subsidiaries or (II)
completing at least thirty years of service with the Company or any of its subsidiaries; and 

  

	 	(iii)	“cause” means a determination by the Company that you have been involved in fraud, misappropriation, embezzlement, commission of a crime or an act of moral turpitude, or
have violated the Code of Business Conduct, recklessly or willfully injured an employee, company property, business, or reputation, or have acted recklessly in the performance of your duties. 

  
 Your right to receive a payment pursuant to this award shall be forfeited
automatically and without further notice if you cease to be an employee of the Company and its affiliates during the year in which this award is granted to you due to death or involuntary termination without cause. 
  

	 	b.	 If the Compensation Committee determines that you engaged in any Detrimental Activity during your employment with Convergys Corporation or during the two-year
period following the termination of such employment for any reason, (i) to the extent that you have not yet received a payout under this award, your right to receive a payout under this award shall be forfeited and (ii) to the extent that you have
received a payout under this award within the six-month period immediately preceding the termination of your employment (or, if your employment terminated by reason of your retirement or disability, within the period beginning six months prior to
your termination and ending two years following your termination), the Compensation Committee, in its sole discretion, may require you to pay back to the Company the amount you received pursuant to this award. For purposes of this Section 3b,
“Detrimental Activity” shall include: (1) disclosing proprietary, confidential or trade secret information; (2) becoming involved in any business activity in competition with Convergys Corporation in the geographical area where Convergys
Corporation is engaged in such business activity; (3) interfering with Convergys Corporation’s relationships with any person or entity or attempting to divert or change any such relationship to the detriment of Convergys Corporation or the
benefit of any other person or entity; (4) failing to disclose and assign to Convergys Corporation any ideas, inventions, discoveries and other developments conceived by you during your employment, whether or not during working hours, which are
within the scope of or related to Convergys Corporation’s existing or planned business activities; (5) disparaging or acting in any manner which may damage the business of Convergys Corporation or which would adversely affect the goodwill,
reputation or business relationships of Convergys Corporation; (6) inducing any employee of Convergys Corporation to terminate his or her employment relationship with Convergys Corporation; or (7) taking or retaining without authorization any
property of Convergys Corporation. Convergys Corporation shall be entitled to set-off against any payment called for under the first 

	 	 
sentence of this Section any amount otherwise owed to you by the company. Nothing in this Section is intended to supercede or otherwise affect any
Non-Disclosure and Non-Competition agreement or other employment-related agreement between you and Convergys Corporation. References to Convergys Corporation in this paragraph shall include all direct and indirect subsidiaries of Convergys
Corporation. 

  

	 	c.	Your right to receive payout pursuant to this award shall be forfeited to the extent you are permitted to elect and do elect in accordance with applicable rules and procedures to
forfeit and/or surrender your rights hereunder in exchange for a credit to an account maintained for you pursuant to a deferred compensation plan maintained by the Company. 

  
 4. Death, Disability, Retirement, and Involuntary Termination without Cause. 
  

	 	a.	Except as may be otherwise provided under the terms of an employment agreement, if you cease to be an employee of the Company and its affiliates due to death or involuntary
termination without cause after the calendar year in which this award was granted to you but before the Vest Date, your payout under this award will be determined based on the Payout Schedule and the Company’s level of satisfaction of the
performance criteria described in Section 2 over the period beginning January 1, XXXX and ending on the last day of the calendar year preceding the calendar year in which your employment terminates. 

  

	 	b.	If you cease to be an employee of the Company and its affiliates due to disability or retirement, this award will remain in effect following your involuntary termination and through
the remainder of the performance period and you will be entitled to receive the payout earned, if any, based on the Payout Schedule and the Company’s level of satisfaction of the performance criteria described in Section 2 as of the Vest Date.

  
 5. Transferability. Your right to
receive a payout pursuant to this award shall not be transferable nor assignable by you other than by will or by the laws of descent and distribution. 
  
 6. Tax Withholding. In connection with a payment to you pursuant to this award, the Company will withhold or cause to be withheld from such payment
such amount of tax as may be required by law to be withheld with respect to the payment. 
  
 7. No Employment Contract. Nothing contained in this Agreement shall confer upon you any right with respect to continuance of employment by the Company or any subsidiary, nor limit or affect in any manner the
right of the Company or any subsidiary to terminate your employment or adjust your compensation. 
  
 8. Amendments. Any amendment to the Plan shall be deemed to be an amendment to this Agreement to the extent that the amendment is applicable
hereto; provided, however, that no amendment shall adversely affect your rights under this Agreement without your consent. 

 9. Severability. In the event that one or more of the provisions of this Agreement shall be
invalidated for any reason by a court of competent jurisdiction, any provision so invalidated shall be deemed to be separable from the other provisions hereof, and the remaining provisions hereof shall continue to be valid and fully enforceable.

  
 10. Relation to Plan. This Agreement is subject to the
terms and conditions of the Plan. In the event of any inconsistency between the provisions of this Agreement and the Plan, the Plan shall govern. Capitalized terms used herein without definition shall have the meanings assigned to them in the Plan.
The Compensation Committee acting pursuant to the Plan, as constituted from time to time, shall, except as expressly provided otherwise herein, have the right to determine any questions which arise in connection with the grant of this award.

  
 11. Successors and Assigns. Without limiting Section 5
hereof, the provisions of this Agreement shall inure to the benefit of, and be binding upon, your successors, administrators, heirs, legal representatives and assigns, and the successors and assigns of the Company. 
  
 12. Governing Law. The interpretation, performance, and enforcement
of this Agreement shall be governed by the laws of the State of Ohio, without giving effect to the principles of conflict of laws thereof.First Amendment to Loan Agreement by and between Union Bank of California

 Exhibit 10.7 
  
 AMENDMENT TO LOAN AGREEMENT 
  

	    	THIS FIRST AMENDMENT TO LOAN AGREEMENT (“Amendment”) is made effective as of June 30, 2004, between ALPHASMART, INC., a Delaware corporation
(“Borrower”) and UNION BANK OF CALIFORNIA, N.A. (“Bank”). 

  
 RECITALS 
  
 A. Borrower is currently obligated to Bank pursuant to the terms and conditions of that certain Loan Agreement dated as of May 30, 2003 (as amended, supplemented, extended, restated, or renewed from time to time,
“Agreement”), which obligation is further evidenced by that certain commercial promissory note in the maximum principal amount of $3,000,000, dated as of May 30, 2003, executed by Borrower to the order of Bank (“Note”).

  
 B. On November 21, 2003 Bank consented to the merger of
AlphaSmart, Inc., a California corporation (“Alpha California”) with AlphaSmart, Inc., a Delaware corporation (“Alpha Delaware”). Pursuant to the Assignment and Assumption Agreement dated November 21, 2003 Alpha Delaware assumed
from Alpha California all of is obligations to Bank under the Loan Documents. 
  
 C. Borrower and Bank mutually desire to amend the Agreement to reflect certain changes in the terms and conditions set forth therein. 
  
 NOW, THEREFORE, the parties hereto agree as follows: 
  

	 	1.	Section 1.1.2 of the Agreement is deleted with no replacement. 

  

	 	2.	The definitions for “EBITDA” and “Total Debt Service” in Section 1.2 of the Agreement are deleted with no replacement. 

  

	 	3.	Section 1.3 of the Agreement is deleted and replaced with “Reserved”. 

  

	 	4.	Section 1.4 of the Agreement is deleted and replaced with the following: 

  
 “1.4 Prepayment. The Loan may be prepaid in full or in part but only in accordance with the terms of the Note,
and any such prepayment shall be subject to any prepayment fee provided for therein. In the event of a principal prepayment on any term indebtedness, the amount prepaid shall be applied to the scheduled principal installments due in the reverse
order of their maturity on the Loan being prepaid.” 
  

	 	5.	Section 4.4 of the Agreement is hereby amended by adding the following sentence: “All financial covenants shall be determined in accordance with GAAP.”

  

	 	6.	 Section 4.5(a) of the Agreement is deleted and replaced with the following: 

 
“(a) Within forty-five (45) days after the close of each fiscal quarter, except for the final quarter of each fiscal year, its unaudited balance
sheet as of the close of such fiscal quarter, its unaudited income and expense statement with year-to-date totals and supportive schedules, and its statement of retained earnings for that fiscal quarter, all prepared in accordance with GAAP (except
for the absence of footnotes and subject to year-end adjustments).” 
  

	 	7.	Section 4.5(b) of the Agreement is amended by deleting “one hundred twenty (120)” and by substituting “ninety (90)”. 

  

	 	8.	Section 4.5(d) of the Agreement is amended by deleting “thirty (30)” and by substituting “forty-five (45)”. 

  

	 	9.	Section 4.5(e) of the Agreement is deleted and replaced with “Reserved”. 

  

	 	10.	Section 4.6 of the Agreement is deleted and replaced with the following: 

  
 “4.6 Consolidated Net Worth. Borrower will at all times maintain Tangible Net Worth on a consolidated basis of
not less than Ten Million Five Hundred Thousand Dollars ($10,500,000) increasing by seventy-five percent (75%) of Borrower’s net profit after taxes (exclusive of losses) for each fiscal quarter ending on or after June 30, 2004 plus one hundred
percent (100%) of all net proceeds from the sale of equity securities. “Tangible Net Worth” means Borrower’s net worth increased by Subordinated Debt and decreased by patents, licenses, trademarks, trade names, goodwill and other
similar intangible assets, organizational expenses, and monies due from affiliates (including officers, shareholders and directors).” 
  

	 	11.	Section 4.7 of the Agreement is deleted and replaced with the following: 

  
 “4.7 Profitability. 
  
 (a) Borrower will achieve net profit after taxes (not less than zero) for any two fiscal quarters of the four consecutive quarters
then ending, as reported at the end of each such fiscal quarter; and 
  
 (b) Borrower will not incur a loss of more than five percent (5.0%) of the prior fiscal quarter’s net worth.” 
  

	 	12.	Section 4.8 of the Agreement is deleted and replaced with the following: 

  
 “4.8 Quick Ratio. Borrower will at all times maintain a ratio of cash, accounts receivable and marketable
securities to current liabilities of not less than 1.0:1.0.” 
  

	 	13.	Section 4.9 of the Agreement is deleted and replaced with the following: 

  
 “4.9 Debt to Tangible Net Worth. Borrower will at all times maintain a ratio of total liabilities to Tangible
Net Worth of not greater than 1.0:1.0.” 
  
 GENERAL
AMENDMENT PROVISIONS 

 
I. Except as specifically provided herein, all terms and conditions of the Agreement remain in full force and effect, without waiver or modification.
All terms defined in the Agreement shall have the same meaning when used in this Amendment, and this Amendment and the Agreement shall be read together as one document. 
  
 II. Borrower understands that this Amendment shall not be effective and Bank shall have no obligation to amend the Loan Documents,
unless and until each of the following conditions precedent has been satisfied not later than July 31, 2004, or waived by Bank (in Bank’s sole discretion): 
  
 (a) Borrower shall have executed and delivered to Bank this Amendment. 
  
 (b) Borrower shall have executed and delivered to
Bank, (i) Bank’s standard form Security Agreement and Bank shall have filed a financing statement with the Secretary of State of Delaware to perfect Bank’s first priority security interest in the Collateral, and (ii) any filings with the
United States Patent and Trademark Office or the United States Copyright Office that may be required by Bank. 
  
 (c) On or before such time as Bank may require, Borrower shall have taken any and all actions and executed and delivered to Bank
any and all documents necessary or appropriate in Bank’s sole discretion to effectuate this Amendment. 
  
 (d) Borrower shall have reimbursed Bank for Bank’s costs and expenses, including, without limitation, reasonable
attorneys’ fees and expenses (including the fees of Bank’s in-house legal counsel and staff) in the amounts incurred in connection with item (b) above. 
  
 III. Borrower hereby confirms all representations and warranties contained in the Agreement and reaffirms all covenants set forth
therein. Further, Borrower certifies that, as of the date of this Amendment, there exists no Event of Default as defined in the Agreement, nor any condition, act or event which with the giving of notice or the passage of time or both would
constitute an Event of Default. 
  
 IN WITNESS WHEREOF, the parties hereto
have caused this Amendment to become effective as of the date and year first written above. 
  

			
	ALPHASMART, INC.	  	UNION BANK OF CALIFORNIA, N. A.
		
	 By:    /s/ James M. Walker            
	  	By:    /s/ Allan B. Miner                
	 James M. Walker
	  	 Allan B. Miner

	 Title: CFO & COO                
	  	 Vice President

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