Document:

Exhibit 10.26

 

EMPLOYMENT AGREEMENT

 

	
  DATE:

  	
  August 9, 2004

  	
   

  
	
   

  	
   

  	
   

  
	
  PARTIES:

  	
  eCollege.com, Inc., a Delaware corporation

  	
  (the “Company”)

  
	
   

  	
   

  	
   

  
	
   

  	
  Marguerite M. Elias, a resident of Illinois

  	
  (the “Employee”)

  

 

RECITAL:

 

The Company is engaged in the business of providing value added
information services to the post-secondary and related education markets.  The Company desires to employ and retain the
unique experience, abilities, and services of the Employee as the Company’s Senior
Vice President and General Counsel and the Employee desires to hold such
positions under the terms and conditions of this Employment Agreement (the
“Agreement”).

 

AGREEMENT:

 

The parties agree as follows:

 

1.                                       EMPLOYMENT

 

(a)                                  Duties.  The Company shall employ the Employee as
Senior Vice President and General Counsel and the Employee accepts employment
with the Company on the terms and conditions set forth in this Agreement.  The Employee agrees to devote her full time
and attention (reasonable periods of illness excepted) to the performance of
her duties under this Agreement.  In
general, such duties shall consist of the duties and responsibilities described
on Schedule A to this Agreement and such other duties as the Board of Directors
of the Company (the “Board”) may determine so long as such duties are not
materially inconsistent for a similarly situated executive of a public
company.  In performing such duties, the
Employee shall be subject to the direction and control of the Chief Executive
Officer of the Company (the “CEO”).  The
Employee further agrees that in all aspects of such employment, the Employee
shall comply with the reasonable policies, standards, and regulations of the
Company established from time to time of which the Employee is or should be
aware, and shall perform her duties in good faith with due care and in the best
interests of the Company.  The devotion
of reasonable periods of time by the Employee for personal investment, outside
business or charitable activities shall not be deemed a breach of this
Agreement, provided that such activities are approved by the Board in writing
(for the purposes of this paragraph, the term “personal investment, outside
business or charitable activities” shall not include passive investment by the
Employee of her personal assets which investment shall be deemed not a breach
of this Agreement provided such investment does not violate Section 2
hereof).  Notwithstanding the foregoing,
the Employee shall be entitled to engage in and continue the activities set
forth in Schedule B of this Agreement; provided that the Board may review such
activities on an annual basis and if the Board determines that such activities 

 

 

are interfering with the performance of her duties
hereunder and so notifies the Employee in writing, the Employee shall terminate
such activities within 60 days of such notice.

 

(b)                                 Term.  Employment of the Employee as Senior Vice
President and General Counsel began on July 12, 2004 (the “Commencement Date”) and shall end on the
date of termination pursuant to Section 5 of the Agreement.

 

2.                                       RESTRICTIVE COVENANTS; CONFIDENTIALITY

 

(a)                                  Noncompetition;
Nondisclosure; Inventions.  In
consideration for the compensation and benefits to be provided hereunder,
including the severance arrangements set forth in Sections 5 and 6 hereof, and
in consideration of the Employee’s exposure to the Company’s confidential and
proprietary information, the Employee covenants to the following:

 

(1)                                  Noncompetition
and Nonsolicitation.  During the term
of this Agreement and for a period of twelve (12) months after the termination
of the Employee’s employment with the Company, the Employee shall not, within
any locality or region of the United States, Canada or any other country in
which the Company had operations or conducted business at the time of the termination
of this Agreement, directly or indirectly: (1) (A) own directly or beneficially
(as a proprietor, partner, stockholder, or otherwise) an equity or debt
interest of five percent (5%) or more in; or (B) participate (as an officer,
director, or in any other capacity) in the management, operation, or control
of; or (C) perform services as or act in the capacity of an employee,
independent contractor, consultant, lender, principal or agent of any division
or business unit of an enterprise, to the extent that such division or business
unit is engaged, directly or indirectly, or any company or other entity engaged
primarily, in the provision of value added information services to the
post-secondary and related education markets that are competitive with the
services provided by the Company or such other business activity that the
Company is engaged in on the date of termination, except with the prior written
consent of the Board; or, (2) contact, solicit or direct or influence any
person, firm, or corporation to contact or solicit, any of the Company’s
customers, prospective customers, or business brokers for the purpose of
selling or attempting to sell, any products and/or services that are the same
as, or similar to, the provision of value added information services to the
post-secondary and related education markets or other products and services
provided by the Company to its customers during the term of the Employee’s
employment hereunder.

 

The Employee expressly agrees that this noncompete provision is
necessary to protect the Company’s trade secrets and business and is further
justified by virtue of the fact that the Employee is a senior executive officer
of the Company.  The Employee further
acknowledges and agrees that the restrictions set forth in this section of the
Agreement 

 

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are reasonable and necessary to protect the interest of the
Company.  For purposes of this Section
2(a), the term Company includes all of its subsidiaries and affiliates and the
activities listed in Schedule B of this Agreement are deemed not to be
competitive with the Company, unless the Board provides written notice to the
Employee that such activities have become competitive with the Company in which
case the Employee shall terminate such activities within 60 days of such
notice.

 

In addition, during the term of the Employee’s employment hereunder and
for a period of twelve (12) months after the termination of this Agreement, the
Employee will not disclose the identity of any such business brokers,
customers, or prospective customers, or any part thereof, whose relationship
with the Company is not then a matter of public record or public knowledge
(other than as a result of unauthorized disclosure by the Employee), to any
person, firm, corporation, association, or other entity for any reason or
purpose whatsoever, other than pursuant to court order or government inquiry;
provided, the Employee must give the Company written notice of the court order
or inquiry at least 15 days prior to the disclosure, or, if later, immediately
upon the Employee’s learning of the court order or government inquiry.  Moreover, the Employee will not solicit,
directly or indirectly, or accept if offered to him, with or without
solicitation, on her own behalf or on behalf of any other person, the services
of any person who is an employee of the Company during the six month period
prior to the termination of the Employee’s employment with the Company, nor,
directly or indirectly, solicit any of the Company’s employees to terminate
employment with the Company, nor directly or indirectly agree to hire any
employee of the Company to provide service for himself or any company,
individual or other entity; provided that the foregoing shall not prohibit the
Employee from soliciting or hiring any such employee after the date on which
such person’s employment with the Company was terminated by the Company.

 

(2)                                  Confidentiality.  The Employee acknowledges and agrees that all
product specifications, product planning information, lists of the Company’s
customers and suppliers, business brokers, marketing plans, financial
information, and other Company data related to its business (“Confidential Information”) are valuable
assets of the Company.  Except as necessary
in connection with the Employee’s performance of her duties hereunder, the
Employee shall not, directly or indirectly, during or after her employment with
the Company, disclose any Confidential Information to any person or use any
Confidential Information for the benefit of the Employee or any other person,
except with the prior written consent of the Board; provided, however, that the
foregoing restriction on Confidential Information shall not apply to
information that is (1) information that the Employee knew before the
commencement of her employment with the Company, (2) information that becomes a
matter of public record or public knowledge other than as a result of
unauthorized disclosure by the Employee, or (3) is disclosed by the Employee
pursuant 

 

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to court order or government inquiry, so long as the Employee gives the
Company written notice of the court order or inquiry at least 15 days prior to
the disclosure, or, if later, immediately upon the Employee’s learning of the
court order or government inquiry.

 

(3)                                  Ideas,
Inventions.  The Employee recognizes
and agrees that all ideas, inventions, enhancements, plans, writings, and other
developments or improvements (the “Inventions”)
conceived by the Employee, alone or with others, during the term of her
employment with the Company, whether or not during working hours, that are
within the scope of the Company’s business operations or that relate to any of
the Company’s work or projects, are the sole and exclusive property of the
Company.  The Employee further agrees
that (1) she will promptly disclose all Inventions to the Company and hereby
assigns to the Company all present and future rights she has or may have in
those Inventions, including without limitation those relating to patent,
copyright, trademark or trade secrets; and (2) all of the Inventions eligible
under the copyright laws are “work made for hire.” At the request the Company,
the Employee will do all things deemed by the Company to be reasonably
necessary to perfect title to the Inventions in the Company and to assist in
obtaining for the Company such patents, copyrights or other protection as may
be provided under law and desired by the Company, including but not limited to
executing and signing any and all relevant applications, assignments or other
instruments.

 

Notwithstanding the foregoing, the Company hereby notifies the Employee
that the provisions of this Section 2(a)(3) shall not apply to any Inventions
for which no equipment, supplies, facility or Confidential Information of the
Company was used and which were developed entirely on the Employee’s own
personal time, unless (1) the Invention relates (i) to the business of the
Company, or (ii) to actual or demonstrably anticipated research or development
of the Company, or (2) the Invention results from any work performed by the
Employee for the Company.

 

(b)                                 Nondisparagement.  During the term of the Employee’s employment
with the Company and for a period of two years thereafter, the parties shall
not make any statements concerning the other party that would tend to diminish
the esteem, respect, good will, or confidence in which that party is held by
members of the community in which that party, or its officers, directors and
employees, conduct their business affairs or that would provoke adverse or
derogatory feelings or opinions in such members of those communities as to that
party; provided, however, that this Section 2(b) shall not preclude either
party from responding to a court order or government inquiry so long as the
responding party has given the other party written notice of such court order
or government inquiry at least 15 days prior to the disclosure, or, if later,
immediately upon the party’s learning of the court order or government inquiry.

 

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(c)                                  Return
of Documents and Computer Data.  The
Employee acknowledges and agrees that all originals and copies of all computer
data, records, reports, documents, lists, plans, drawings, memoranda, notes,
and other documentation related to the business of the Company or containing
any Confidential Information shall be the sole and exclusive property of the
Company, and shall be returned to the Company (without any copies being
maintained by Employee other than copies of her address book, calendar (each
whether paper or electronic) and other personal information) upon the
termination of employment with the Company or earlier upon the written request
of the Company.

 

(d)                                 Injunction.  The Employee and the Company agree that the
services to be rendered by her to the Company and the Confidential Information
to which she has access are of a special and unique character, the loss of
which would result in damages which would be difficult to measure from any
breach by the Employee or the Company of Section 2(a) or 2(b) and that monetary
damages would be an inadequate remedy for any such breach which may cause the
Company irreparable injury. Accordingly, the Employee and Company agrees that
if the Employee or Company shall breach or take steps preliminary to breaching
Section 2(a) or 2(b), the Employee or Company, as appropriate, shall be
entitled, in addition to all other remedies it may have at law or in equity, to
an injunction or other appropriate orders to restrain any such breach, without
showing or proving any actual damage sustained by the Employee or Company, or
without posting of any bond or security.

 

(e)                                  No
Release.  The Employee agrees that
the termination of employment with the Company shall not release the Employee
from any obligations set forth herein pursuant to Section 2(a), 2(b) or 2(c) or
the Company from any obligations set forth herein pursuant to Section 2(b),
Section 5 or Section 6.

 

(f)                                    Enforceability.  If any one or more of the provisions
contained in Section 2 of this Agreement shall be held to be excessively broad
as to duration, activity or subject, such provisions shall be construed by
limiting and reducing them so as to be enforceable to the fullest extent
permitted by law.

 

3.                                       COMPENSATION

 

(a)                                  Base
Compensation; Bonus Compensation.  In
consideration of all services to be rendered by the Employee to the Company and
the other terms and conditions of this Agreement, the Company shall pay to the
Employee base and bonus compensation as described on Schedule A of this
Agreement.

 

(b)                                 Other
Benefits.  The Employee has been
provided with a brochure that provides a brief, general description of the
Company’s benefit programs.  The Employee
agrees and acknowledges that the benefits provided by the Company may be
changed or amended from time to time, and at any time, at the sole discretion
of the Company.  The Employee shall be
entitled to not less than four weeks vacation each year which shall not accrue
from year to year.  The Employee shall be
allowed to participate in any hospitalization, health and disability insurance 

 

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plans, other health programs, pension and profit sharing plans and
other similar benefit programs maintained by the Company for the benefit of its
employees and any bonus plans, equity incentive plans and other benefit
programs generally available to senior executive officers of the Company.

 

4.                                       COMPANY POLICIES

 

(a)                                  General
Policy Descriptions.  The Employee
has been provided with the eCollege.com Employee Benefits Summary, which
includes descriptions of Medical Insurance and Prescription Card, Dental
Insurance, Flexible Reimbursement Program, Personal Days, Paid Holidays, Direct
Deposit, Bonus Programs, Employee Referral Program and Smoke Free Work
Environment as of March 31, 1999. 
Additional policies and standards of the Company will be provided to the
Employee from time to time during the Employee’s employment.

 

(b)                                 Changes
to Company Policies.  The Employee
agrees and acknowledges that the Company’s policies may be created, eliminated,
changed or amended from time to time, and at any time, at the sole discretion
of the Company.

 

5.                                       TERMINATION

 

(a)                                  At-Will
Employment.  The Employee agrees and
acknowledges that, just as she has the right to terminate her employment with
the Company at any time for any reason, the Company has the same right, and may
terminate her employment with the Company at any time for any reason.

 

(b)                                 Termination
without Cause; Termination For Good Reason. 
Subject to Section 6(b) below, upon termination of the Employee’s
employment with the Company by the Company without Cause (as defined in Section
5(f) below) or by the Employee for Good Reason (as defined in Section 5(f)
below), other than as a result of death or Disability, the Company shall pay to
or provide the Employee the following: (1) any unpaid base salary the Employee
has earned through the date of termination, (2) any unpaid annual bonus that
the Employee has earned with respect to a year ending prior to such
termination, (3) 12 months of the Employee’s then current base salary paid on
the Company’s normal payroll dates, (4) the pro-rated portion (based on the
number of days in the year completed through the date of termination) of the
Employee’s target bonus for the year of termination (paid on the normal date
for the payment of the bonus), such amount to be paid only if the Employee has
met her pro-rated objective performance targets through the date of
termination, (5) an amount equal to the Employee’s target bonus for the year of
termination, (6) the costs of COBRA continuation coverage for the Employee and
her dependents from the date the Employee’s employment terminates through the
earlier of (A) the first anniversary of such termination and (B) the date on
which the Employee becomes entitled to health coverage of a similar type from
another employer, plus/less (7) any positive/negative accrued vacation
days.  In addition to the foregoing, upon
a termination of the Employee’s employment described in this Section 5(b), any
stock options, stock appreciation rights, performance shares, restricted stock,

 

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share rights and all other similar types of equity incentives held by
the Employee immediately prior to the termination of the Employee’s employment
that, but for the termination of the Employee’s employment, would have become
vested and, if applicable, exercisable by the first anniversary of the date of
her termination of employment, will become immediately vested and, if
applicable, exercisable.  No amount shall
be payable and no benefits shall be provided pursuant to this Section 5(b)
until the Employee has executed a release and waiver agreement (substantially
in the form attached hereto as Schedule C) releasing and waiving any claims
against the Company and in which the Company releases and waives claims against
the Employee and if the Employee is serving as a Director of the Company a
valid and effective resignation from the Board unless the Employee beneficially
owns, directly or indirectly, 5% or more of the Company’s Common Stock.

 

(c)                                  Termination
for Cause.  Upon termination of the
Employee’s employment with the Company by the Company for Cause, the Company
shall pay to the Employee any unpaid base salary the Employee has earned
through the date of termination and no more. 
No amount shall be payable and no benefits shall be provided pursuant to
this Section 5(c) until the Employee has executed a release and waiver
agreement (substantially in the form attached hereto as Schedule C) releasing
and waiving any claims against the Company and in which the Company releases
and waives claims against the Employee and if the Employee is serving as a
Director of the Company a valid and effective resignation from the Board.

 

(d)                                 Termination
as a Result of Death or Disability. 
Upon termination of the Employee’s employment by the Company as a result
of death or Disability, the Company shall pay to the Employee the
following:  (1) any unpaid base salary
the Employee has earned through the date of termination, (2) any unpaid annual
bonus that the Employee has earned with respect to a year ending prior to such
termination, and (3) 12 months of the Employee’s then current base salary paid
on the Company’s normal payroll dates, less in the case of termination as a
result of Disability any amounts paid to Employee as a result of disability
insurance policies maintained by the Company.

 

(e)                                  Termination
by Employee Without Good Reason. 
Upon termination of the Employee’s employment with the Company by
Employee without Good Reason, the Company shall pay to the Employee the
following: (1) any unpaid base salary the Employee has earned through the date
of termination and (2) any unpaid annual bonus that the Employee has earned
with respect to a year ending prior to such termination.  No amount shall be payable and no benefits
shall be provided pursuant to this Section 5(e) until the Employee (or her
representative) has executed a release and waiver agreement (substantially in
the form attached hereto as Schedule C) releasing and waiving any claims
against the Company and in which the Company releases and waives claims against
the Employee and if the Employee is serving as a Director of the Company a
valid and effective resignation from the Board unless the Employee beneficially
owns, directly or indirectly, 5% or more of the Company’s Common Stock.

 

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(f)                                    Definitions.

 

(1)                                  Cause.  For purposes of this Agreement, “Cause” shall mean the Employee’s:

 

(A)                              willful
failure or refusal to comply, in a material manner, with the reasonable
policies, standards, and regulations of the Company following written notice of
breach and a reasonable opportunity to cure; or

 

(B)                                engaging
in fraud;

 

(C)                                engaging
in dishonesty that results in a demonstrable material harm to the Company; or

 

(D)                               engaging
in any act of misconduct in the performance of her duties on behalf of the
Company that results in material harm to the Company; or

 

(E)                                 failure
to perform any material provision of this Agreement to be performed by the
Employee or breach by the Employee of this Agreement, provided however, that if
such failure or breach can be cured, the Employee will receive written notice
of such failure or breach and a reasonable opportunity to cure such breach;

 

provided, however, that Cause shall in no event be deemed to exist
except upon a finding reflected in a resolution of the Board approved by at
least 50% of the members of the Board, whose finding shall not be binding upon
or entitled to any deference by any court, arbitrator or other decision-maker
ruling on this Agreement, at a meeting of which the Employee shall have been
given proper notice and at which the Employee (and her counsel) shall have a
reasonable opportunity to be heard.

 

(2)                                  Disability.  For purposes of this Agreement, Disability means the Employee’s incapacity
due to physical or mental illness as determined for purposes of the Company’s
long-term disability insurance plans.

 

(3)                                  Good
Reason.  For purposes of this
Agreement, the Employee will have Good Reason
to terminate her employment with the Company if one or more of the following
occurs without her prior written consent:

 

(A)                              The
material breach of this Agreement by the Company; or

 

(B)                                A
material lessening of the Employee’s role, duties or status with the Company,
including without limitation a requirement that the Employee report to anyone
other than the Company’s President, the CEO or the Board; or

 

(C)                                The
requirement that the Employee’s principal office be other than in the Chicago,
Illinois metropolitan area; or

 

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(D)                               The
assignment to the Employee of duties materially inconsistent with her position.

 

provided, however, that (i) the Employee must deliver
written notice of her intention to terminate her employment for Good Reason,
specifying the event or condition giving rise to Good Reason, to the Company
within 45 days after the Employee first becomes aware of the event or condition
in order for the Employee’s resignation with Good Reason to be effective
hereunder and (ii) no event or condition described above shall constitute Good
Reason if the Company cures the event or condition within a reasonable period
after written notice thereof to the Company; and (iii) the Company shall only
be permitted the opportunity to cure one time during each three-year term of
the Employee’s employment hereunder.

 

6.                                       CHANGE IN CONTROL EVENT; HOSTILE TAKE-OVER.

 

(a)                                  Equity
Compensation.  If a Change in Control
Event (as defined in the Company’s 1997 Stock Option Plan, as amended April 13,
1999) occurs, then, immediately prior to and contingent upon the Change in
Control Event, (1) all presently outstanding stock options, stock appreciation
rights, performance shares, share rights and all other similar types of equity
incentives held by the Employee immediately prior to the date of the Change in
Control Event will become fully vested and, if applicable, exercisable, and (2)
all restrictions on restricted stock presently held by the Employee immediately
prior to the date of the Change in Control Event will lapse.

 

(b)                                 Termination
Following Change in Control.  If,
within the two-year period following a Change in Control Event, the Employee’s
employment with the Company is terminated by the Company without Cause or by
the Employee for Good Reason, then the amounts and benefits payable pursuant to
Section 5(a) above shall be paid to the Employee in a lump sum within 5 days of
the termination of the Employee’s employment with the Company; provided, that
no amount shall be payable and no benefits shall be provided pursuant to this
Section 6(b) until the Employee has executed a release and waiver agreement
(substantially in the form attached hereto as Schedule B) releasing and waiving
any claims against the Company and in which the Company releases and waives
claims against the Employee.

 

(c)                                  Hostile
Take-Over.  Notwithstanding any other
provision of this Agreement, any termination by the Employee of her employment
with the Company, for any reason or no reason, during the 30-day period
immediately following the 180th day after the completion of the Hostile
Take-Over (as defined in the Company’s 1999 Stock Incentive Plan, as amended
through July 1, 2002) shall be treated for purposes of this Agreement as a
termination for Good Reason.

 

9

 

(d)                                 Parachute
Payments.

 

(1)                                  In
General.  The payments under Section
6 of this Agreement will be made without regard to whether the deductibility of
such payments (considered together with any other entitlements or payments
otherwise paid or due to the Employee) would be limited or precluded by Section
280G of the Code and without regard to whether such payments would subject the
Employee to a Parachute Excise Tax (as defined below).

 

(2)                                  Additional
Payment.  If payment of Total
Payments (as defined below) result in the imposition of a Parachute Excise Tax,
the Employee will be entitled to an additional payment in an amount such that,
after the payment of all federal and state income, employment and excise taxes
on both the Total Payments and the additional payment made pursuant to this
Section 6(d)(2), the Employee will be in the same after-tax position as if no
Parachute Excise Tax had been imposed.

 

(3)                                  Payment
Determination and Adjustments.  The
determination of the amount of the Total Payments and whether and to what
extent payments under Section 6(d)(2) are required to be made will be made at
the Company’s expense by the Company’s independent auditor.  In the event of any underpayment or
overpayment to the Employee (determined after the application of this Section
6(d), the amount of such underpayment or overpayment will be immediately paid
by the Company to the Employee or refunded by the Employee to the Company.

 

(e)                                  Enforcement
Expenses.  The Company shall pay the
Employee on demand the amount necessary to reimburse the Employee 50% of all
expenses (including 50% of all reasonable attorneys’ fees and legal expenses)
incurred by the Employee in enforcing any of the obligations of the Company
under this Section 6 following a Change of Control Event; provided, however,
that the Company will reimburse the Employee for the remaining 50% of such
expenses if the Employee prevails on any material issue in her attempt to
enforce those obligations.

 

7.                                       REPRESENTATIONS AND WARRANTIES OF EMPLOYEE

 

(a)                                  No
Other Employment Agreements.  The
Employee represents and warrants to the Company that there is no employment
contract or any other contractual obligation to which the Employee is subject,
which prevents the Employee from entering into this Agreement or from
performing fully the Employee’s duties under this Agreement.

 

(b)                                 Special
Needs. There are no special accommodations required to be made by Company
for the Employee to perform her duties and responsibilities.

 

8.                                       MISCELLANEOUS PROVISIONS

 

(a)                                  Indemnification.  During the Employee’s employment hereunder
and thereafter, the Company agrees to indemnify the Employee against all claims
arising out of 

 

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actions or omissions during the Employee’s service to
the Company, to the same extent and on the same terms and conditions provided
for in Section 6 of the Company’s Amended and Restated Bylaws as in effect on
the Commencement Date.  The Company
agrees it will use its best effort to continue to maintain directors’ and
officers’ liability insurance at the same levels of coverage as exist on the
Commencement Date during the term of this Agreement.

 

(b)                                 Notices.
Any notice, election, waiver, consent, acceptance or other communication
required or permitted to be given under this Agreement shall be in writing and
shall be hand delivered, transmitted via fax, by e-mail or sent via nationally
recognized third party delivery (such as Federal Express or UPS) for next day
delivery, addressed to the parties as follows:

 

If to Company:

 

eCollege

eCollege Building

Attn:                    President

4900 South Monaco Street

Denver, Colorado 80237

Fax:                           1-303-873-3849

 

 

If to the Employee:

 

Marguerite M. Elias

957 W. Belden Ave.

Chicago, IL 60614

 

Copy to:

 

Nancy O. Ryan

Pepper Hamilton LLP

3000 Two Logan Square

Philadelphia, PA 19103

Fax: 215-981-4750

 

Any notice or other communication shall be deemed to be given at the
date the notice is hand delivered to the individual, the date the notice is
sent via fax, or the date following the date of deposit with any nationally
recognized third party delivery (such as Federal Express or UPS) for next day
delivery to the addresses The addresses to which notices or other
communications shall be sent may be changed from time to time by giving written
notice to the other party as provided in this Paragraph.

 

(c)                                  Amendments.
This Agreement may be amended only by an instrument in writing executed by all
the parties.

 

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(d)                                 Entire
Agreement. This Agreement (including the schedules) sets forth the entire
understanding of the parties with respect to the subject matter of this
Agreement and supersedes any and all prior understandings and agreements,
whether written or oral, between the parties with respect to such subject
matter.  The Employee represents that, in
executing this Agreement, she does not rely and has not relied upon any
representation or statement not set forth herein with regard to the subject
matter or effect of this Agreement or otherwise.

 

(e)                                  Counterparts.
This Agreement may be executed by the parties in separate counterparts, each of
which when executed and delivered shall be an original, but all of which
together shall constitute one and the same Instrument. Fax signatures shall
have the same effect as an original signature.

 

(f)                                    Severability.
If any provision of this Agreement shall be invalid or unenforceable in any
respect for any reason, the validity and enforceability of any such provision
in any other respect and of the remaining provisions of this Agreement shall
not be in any way impaired; provided, however, that the parties will attempt to
agree upon a valid and enforceable provision which shall be a reasonable
substitute for each invalid provision or unenforceable provision in light of
the tenor of this Agreement and, upon so agreeing, shall incorporate such
substitute provision Into this Agreement.

 

(g)                                 Waiver.
A provision of this Agreement may be waived only by a written instrument
executed by the party waiving compliance. No waiver of any provision of this
Agreement shall constitute a waiver of any other provision, whether or not
similar, nor shall any waiver constitute a continuing waiver. Failure to
enforce any provision of this Agreement shall not operate as a waiver of such
provision or any other provision.

 

(h)                                 Further
Assurances. From time to time, each of the parties shall execute,
acknowledge, and deliver any instruments or documents necessary to carry out
the purposes of this Agreement.

 

(i)                                     No
Third-Party Beneficiaries.. Nothing in this Agreement, express or implied,
is intended to confer on any person, other than the parties to this Agreement,
any right or remedy of any nature whatsoever.

 

(j)                                     Expenses.  The Company will pay (or reimburse the
Employee for) the reasonable legal fees and expenses incurred by her in
connection with the negotiation and documentation of this Agreement up to a
maximum of $5,000.

 

(k)                                  Exhibits.
The exhibits and schedules referenced in this Agreement are a part of this
Agreement as if fully set forth in this Agreement

 

(l)                                     Governing
Law. This Agreement shall be governed by and construed in accordance with
the laws of the United States of America and the State of Delaware; without
regard to the principles of conflicts of law thereof.

 

12

 

(m)                               Waiver
of Jury Trial.  As a specifically
bargained for inducement for each of the parties hereto to enter into this
Agreement (after having the opportunity to consult with counsel), each party
hereto expressly waives the right to trial by jury in any lawsuit or proceeding
relating to or arising in any way from this Agreement or the matters contemplated
hereby.

 

(n)                                 Withholding.  All payments to the Employee under this
Agreement shall be reduced by all applicable withholding required by federal,
state or local law.

 

IN WITNESS WHEREOF, the parties hereto have executed
this Agreement as of the date and year first written above.

 

	
   

  	
  eCollege.com, Inc.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Oakleigh Thorne

  	
   

  
	
   

  	
  Oakleigh Thorne, Chief Executive Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  /s/ Marguerite M. Elias

  	
   

  
	
   

  	
  Marguerite M. Elias

  
					

 

13

 

SCHEDULE A

 

COMPENSATION AND DUTIES

 

1.                                       BASE SALARY. For the period beginning on
the Commencement Date through July 11, 2005, the base salary payable
to the Employee shall be at the rate of $220,000 per year, payable on the
Company’s normal payroll dates.

 

2.                                       BASE SALARY ADJUSTMENT.  The Employee’s base salary for periods after
July 11, 2005 shall be at the rate as set by the Board of the
Company, at the recommendation of the CEO and the Compensation Committee,
payable on the Company’s normal payroll dates. 
Salary adjustments will include, at a minimum, any cost of living
increase to the extent provided generally to all members of the Management
Committee.  Base salary will not be
adjusted downward unless the Employee consents in advance in writing to such
adjustment.

 

3.                                       BONUS/OTHER COMPENSATION.  The Employee’s annual target bonus for each
year of the term of this Agreement, pursuant to the eCollege 2004 Annual
Corporate Incentive Plan, is 35% of her base salary, subject to the Company’s
achieving the criteria set forth in that Plan or as may be approved by the
Compensation Committee for years after 2004; provided, however, that with
respect to 2004, the Employee’s annual bonus will be pro-rated for portion of
year actually worked, with a guaranteed minimum bonus for 2004 of $38,500.  The bonus will be paid within 30 days
following the annual audit of the Company’s financial records.  Subject to the foregoing, in any year in
which the Employee is not employed by the Company for the entire year, the
bonus will be prorated according to the number of days in the year that the
Employee was employed by the Company.

 

4.                                       LONG TERM INCENTIVE COMPENSATION.  The Employee understands that the Company is
currently structuring a new long-term equity incentive plan, the 2004
Performance Equity Plan, which is expected to be in place in August, 2004.  The Company agrees that for the year 2004 the
Employee will receive 4% of the pool to be established under the plan, the form
of which will be determined by the Compensation Committee of the Board, and any
future long-term equity incentive compensation will be determined by the
Compensation Committee.

 

5.                                       EXPENSES. 
The Company shall reimburse the Employee for all necessary and
reasonable travel and other business expenses incurred by the Employee in the
performance of her duties hereunder in accordance with the normal expense
reimbursement policies of the Company as may be adopted generally from time to
time for executive officers.

 

6.                                       DUTIES AND JOB DESCRIPTION. As Senior Vice
President and General Counsel, the Employee’s duties shall include oversight of
all legal affairs and human resource matters for the Company.  The Employee shall also serve as the
Company’s Secretary.

 

A-1

 

SCHEDULE B

 

PERMITTED OUTSIDE ACTIVITIES

 

Volunteer Activities with and on behalf of
Playing 2 Win 4 Life, a foundation for ALS.

 

B-1

 

SCHEDULE C

 

THIS MUTUAL RELEASE AND NON-DISPARAGEMENT AGREEMENT (this “Mutual
Release”) is made as of the
         day of
           ,
          by and between
[Executive] (“Executive”) and eCOLLEGE.COM, INC. (the “Company”).

 

WHEREAS, Executive’s employment as an executive of the Company has
terminated; and

 

WHEREAS, pursuant to Section[s] [5] [and] [6] of the Employment
Agreement by and between the Company and Executive dated June
     , 2004 (the “Employment Agreement”), the
Company has agreed to pay Executive certain amounts and to provide her with
certain rights and benefits, subject to the execution of this Mutual Release.

 

NOW THEREFORE, in consideration of these premises and the mutual
promises contained herein, and intending to be legally bound hereby, the
parties agree as follows:

 

SECTION 1.                                Consideration.  Executive acknowledges that: (i) the
payments, rights and benefits set forth in Section[s] [5] [and] [6] of the
Employment Agreement constitute full settlement of all her rights under the
Employment Agreement, (ii) she has no entitlement under any other severance or
similar arrangement maintained by the Company, and (iii) except as otherwise
provided specifically in this Mutual Release, the Company does not and will not
have any other liability or obligation to Executive.  Executive further acknowledges that, in the
absence of her execution of this Mutual Release, the benefits and payments
specified in Section[s] [5] [and] [6] of the Employment Agreement would not
otherwise be due to Executive.

 

SECTION 2.                                Mutual
Release and Covenant Not to Sue.

 

2.1.                              The
Company (including for purposes of this Section 2.1, its parents, affiliates
and subsidiaries) hereby fully and forever releases and discharges Executive
(and her heirs, executors and administrators), and Executive hereby fully and
forever releases and discharges Company (including all predecessors and
successors, assigns, officers, directors, trustees, employees, agents and
attorneys, past and present) from any and all claims, demands, liens,
agreements, contracts, covenants, actions, suits, causes of action,
obligations, controversies, debts, costs, expenses, damages, judgments, orders
and liabilities, of whatever kind or nature, direct or indirect, in law, equity
or otherwise, whether known or unknown, arising through the date of this Mutual
Release, out of Executive’s employment by the Company or the termination
thereof, including, but not limited to, any claims for relief or causes of
action under the Age Discrimination in Employment Act, 29 U.S.C. § 621 et seq., or any other federal, state or local statute,
ordinance or regulation regarding discrimination in employment and any claims,
demands or actions based upon alleged wrongful or retaliatory discharge or
breach of contract under any state or federal law.

 

2.2.                              Executive
expressly represents that she has not filed a lawsuit or initiated any other
administrative proceeding against the Company (including for purposes of this
Section 2.2, its parents, affiliates and subsidiaries) and that she has not
assigned any claim against the Company or any affiliate to any other person or
entity.  The Company expressly represents
that it 

 

C-1

 

has not filed a lawsuit or
initiated any other administrative proceeding against Executive and that it has
not assigned any claim against Executive to any other person or entity.  Both Executive and the Company further
promise not to initiate a lawsuit or to bring any other claim against the other
arising out of or in any way related to Executive’s employment by the Company
or the termination of that employment. 
This Mutual Release will not prevent Executive from filing a charge with
the Equal Employment Opportunity Commission (or similar state agency) or
participating in any investigation conducted by the Equal Employment
Opportunity Commission (or similar state agency); provided,
however, that any claims by Executive for personal relief in
connection with such a charge or investigation (such as reinstatement or
monetary damages) would be barred.

 

2.3.                              
The foregoing will not be deemed to release the Executive or the Company from
(a) claims solely to enforce this Mutual Release, (b) claims solely to enforce
Sections 2, 5 or 6 of the Employment Agreement, or (c) claims solely to enforce
the terms of any equity incentive award agreement or arrangement between the Executive
and the Company, including without limitation any awards to the Executive under
the Company’s 2004 Performance Equity Plan, or (d) claims for indemnification
under the Company’s By-Laws, under any indemnification agreement between the
Company and Executive or under any similar agreement.

 

SECTION 3.                                Restrictive
Covenants.  Executive and the Company
acknowledges that restrictive covenants contained in Section 2 of the
Employment Agreement will survive the termination of her employment.  Executive affirms that those restrictive
covenants are reasonable and necessary to protect the legitimate interests of
the Company, that she received adequate consideration in exchange for agreeing
to those restrictions and that she will abide by those restrictions.

 

SECTION 6.                                Rescission
Right.  Executive expressly
acknowledges and recites that (a) she has read and understands the terms of
this Mutual Release in its entirety, (b) she has entered into this Mutual
Release knowingly and voluntarily, without any duress or coercion; (c) she has
been advised orally and is hereby advised in writing to consult with an
attorney with respect to this Mutual Release before signing it; (d) she was
provided twenty-one (21) calendar days after receipt of the Mutual Release to
consider its terms before signing it; and (e) she is provided seven (7)
calendar days from the date of signing to terminate and revoke this Mutual
Release, in which case this Mutual Release shall be unenforceable, null and
void.  Executive may revoke this Mutual Release
during those seven (7) days by providing written notice of revocation to the
Company.

 

SECTION 8.                                Miscellaneous.

 

8.1                                 Successors
and Assigns.  This Mutual Release
shall inure to the benefit of and be binding upon the Company and Executive and
their respective successors, executors, administrators and heirs.  Executive not may make any assignment of this
Mutual Release or any interest herein, by operation of law or otherwise.  The Company may assign this Mutual Release to
any successor to all or substantially all of its assets and business by means
of liquidation, dissolution, merger, consolidation, transfer of assets, or
otherwise.

 

C-2

 

8.2                                 Severability.  Whenever possible, each provision of this
Mutual Release will be interpreted in such manner as to be effective and valid
under applicable law.  However, if any
provision of this Mutual Release is held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
will not affect any other provision, and this Mutual Release will be reformed,
construed and enforced as though the invalid, illegal or unenforceable
provision had never been herein contained.

 

8.3                                 Entire
Agreement; Amendments.  Except
as otherwise provided herein, this Mutual Release contains the entire agreement
and understanding of the parties hereto relating to the subject matter hereof,
and merges and supersedes all prior and contemporaneous discussions, agreements
and understandings of every nature relating subject matter hereof.  This Mutual Release may not be changed or
modified, except by an agreement in writing signed by each of the parties
hereto.

 

8.6                                 Governing
Law.  This Mutual Release shall be
governed by, and enforced in accordance with, the laws of the State of Delaware
without regard to the application of the principles of conflicts of laws.

 

8.7                                 Counterparts
and Facsimiles.  This Mutual Release
may be executed, including execution by facsimile signature, in multiple
counterparts, each of which shall be deemed an original, and all of which
together shall be deemed to be one and the same instrument.

 

IN WITNESS WHEREOF, the Company has caused this Mutual Release to be
executed by its duly authorized officer, and Executive has executed this Mutual
Release, in each case as of the date first above written.

 

	
   

  	
  eCOLLEGE.COM, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  
	
   

  	
  Name & Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  [EXECUTIVE]

  
	
   

  	
   

  
	
   

  	
   

  	
   

  

 

C-3Exhibit 10.22

 

LOAN
MODIFICATION AGREEMENT

 

This Loan Modification Agreement is entered into as
of April 1, 2004, by and between SILICON VALLEY BANK, a California chartered
bank (“Bank”), with its principal place of business at 3003 Tasman Drive, Santa
Clara, California 95054 and with a loan production office at 4410 Arapahoe
Avenue, Suite 200, Boulder, CO 80303, and eCollege.com (“eCollege”), whose
address is 4900 South Monaco Street, Denver, Colorado 80237, and DataMark, Inc.
(“DataMark”), whose address is 2305 President’s Drive, Salt Lake City, UT 84120
(hereinafter eCollege and DataMark shall be referred to collectively as the
“Borrowers” and individually as a “Borrower”).

 

1.                                       DESCRIPTION OF
EXISTING INDEBTEDNESS: Among other indebtedness which may be owing by
Borrowers to Bank, Borrowers are or may be indebted to Bank pursuant to, among
other documents, a Loan and Security Agreement, dated as of October 30, 2003,
as it may be amended from time to time (the “Loan Agreement”). The Loan
Agreement provided for, among other things, a Committed Revolving Line in the
original principal amount of up to Ten Million Dollars ($10,000,000) and a Term
Loan of up to Three Million Dollars ($3,000,000). Defined terms used but not
otherwise defined herein shall have the same meanings as set forth in the Loan
Agreement.

 

Hereinafter, all indebtedness owing by Borrowers to
Bank shall be referred to as the “Indebtedness.”

 

2.                                       DESCRIPTION OF
COLLATERAL. Repayment of the Indebtedness is secured by the Collateral, as
described in the Loan Agreement and in the Intellectual Property Security
Agreements.

 

Hereinafter, the above-described security
documents, together with all other documents securing repayment of the
Indebtedness shall be referred to as the “Security Documents”. Hereinafter, the
Security Documents, together with all other documents evidencing or securing
the Indebtedness shall be referred to as the “Existing Loan Documents”.

 

3.                                       DESCRIPTION OF
CHANGE IN TERMS.

 

Modification(s) to Loan Agreement.

 

1.                                       Section 6.2 entitled
“Financial Statements, Reports, Certificates” is amended by changing subsection
(a)(i) thereof to read as follows:

 

(a) Borrowers will deliver to Bank: (i) as soon as
available, but no later than 30 days (but through the period ending 9/30/04, no
later than 40 days) after the last day of each month, company prepared
consolidated and consolidating balance sheets and income statements covering
the operations of eCollege and its Subsidiaries during the period certified by
a Responsible Officer of eCollege and in a form acceptable to Bank;

 

2.                                       Section 6.2
entitled “Financial Statements, Reports, Certificates” is amended by changing
subsection (c) thereof to read as follows:

 

(c) Within 30 days (but through the period ending
9/30/04, within 40 days) after the last 

 

 

day of each month, Borrowers will deliver to Bank
with the monthly financial statements a Compliance Certificate signed by a
Responsible Officer of eCollege in the form of Exhibit D.

 

3.                                       Section 6.7
entitled “Financial Covenants” is amended by changing subsection (i) thereof
entitled “Quick Ratio (Adjusted)” to read as follows:

 

(i)                                     Quick
Ratio (Adjusted). A ratio of Quick Assets to Current Liabilities minus Deferred Revenue
and any Quarter-End Advance of at least 1.30 to 1.00 through 3/31/04, and
of at least 1.50 to 1.00 at 4/30/04 and thereafter.

 

4.                                       Section 6.7
entitled “Financial Covenants” is amended by changing subsection (iii) thereof
entitled “Debt Service Coverage Ratio” to add the following sentence at the end
thereof:

 

For purposes hereof
“interest expense” shall exclude non-current, non-cash and non-recurring
interest expense items and shall include only actual cash paid interest expense
items.

 

5.                                       Section 13.1
entitled “Definitions” is amended by adding the following definition therein to
read as follows:

 

“Quarter-End
Advance” is an Advance made on the last Business Day of a fiscal quarter which
Advance remains outstanding no longer than 3 Business Days following the date
such Advance is made and the proceeds of which remain on deposit at Bank during
the period such Advance is outstanding.

 

6.                                                                                       Section 13.1
entitled “Definitions” is amended by changing the following definitions therein
to read as follows:

 

“Deferred Revenue” is all amounts received
in advance of performance under a maintenance contract and not yet recognized
as revenue, and other amounts received from or billed to customers in excess of
revenue that has been earned, including customer advances or deposits that
customers are required to pay for services, where such payments received are
recorded as customer advances (liability) until the revenue is recognized as
earned.

 

“Tangible Net Worth” is, on any date, the
consolidated total assets (excluding proceeds of any Quarter-End Advance) of
eCollege and its Subsidiaries minus, (i) any amounts attributable
to (a) goodwill, (b) intangible items such as unamortized debt discount and
expense, Patents, trade and service marks and names, Copyrights and research
and development expenses except prepaid expenses, and (c) reserves not already
deducted from assets, and (ii) Total Liabilities excluding all
Subordinated Debt and excluding any Quarter-End Advance.

 

 

7.                                       Exhibit D attached
hereto shall be substituted for that attached to the Loan Agreement.

 

4.                                       CONSISTENT CHANGES. The Existing
Loan Documents are hereby amended wherever necessary to reflect the changes
described above.

 

5.                                       PAYMENT OF
EXPENSES. Borrowers shall pay Bank all of Bank’s out-of-pocket expenses in
connection with this Loan Modification Agreement.

 

6.                                       NO DEFENSES. Borrowers (and
each guarantor and pledgor signing below) agrees that, as of the date hereof,
they have no defenses against the obligations to pay any amounts under the
Indebtedness.

 

7.                                       CONTINUING
VALIDITY. Borrowers (and each guarantor and pledgor signing below) understand
and agree that in modifying the existing Indebtedness, Bank is relying upon
Borrowers’ representations, warranties, and agreements, as set forth in the
Existing Loan Documents. Except as expressly modified pursuant to this Loan
Modification Agreement, the terms of the Existing Loan Documents remain
unchanged and in full force and effect. Bank’s agreement to modifications to
the existing Indebtedness pursuant to this Loan Modification Agreement in no
way shall obligate Bank to make any future modifications to the Indebtedness.
Nothing in this Loan Modification Agreement shall constitute a satisfaction of
the Indebtedness. It is the intention of Bank and Borrowers to retain as liable
parties all makers and endorsers of Existing Loan Documents, unless the party
is expressly released by Bank in writing. Unless expressly released herein, no
maker, endorser, or guarantor will be released by virtue of this Loan
Modification Agreement. The terms of this paragraph apply not only to this Loan
Modification Agreement, but also to all subsequent loan modification
agreements.

 

8.                                       CONDITIONS. The
effectiveness of this Loan Modification Agreement is conditioned upon receipt
by Bank of a fully executed counterpart hereof.

 

This Loan Modification Agreement is executed as of
the date first written above.

 

 

	
  BORROWERS:

  	
  BANK:

  
	
  eCollege.com.

  	
  SILICON VALLEY BANK

  
	
  By: /s/ Douglas H. Kelsall

  	
   

  	
  By: /s/ Frank Amoroso

  	
   

  
	
  Name: Douglas H. Kelsall

  	
  Name: Frank Amoroso

  
	
  Title: President and COO

  	
  Title: VP

  
	
   

  	
   

  
	
  DataMark, Inc.

  	
   

  
	
  By: /s/ Douglas H. Kelsall

  	
   

  	
   

  
	
  Name: Douglas H. Kelsall

  	
   

  
	
  Title: Assistant Treasurer

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