Document:

July 1, 2007

 

 

 

 

July 26, 2007

James M. Craig

Chief Financial Officer

Interim President and Chief Executive Officer

Varsity Group Inc.

Re:  Second Amendment to Employment Agreement

Dear Jim:

The letter agreement (this "Agreement") shall serve as the second amendment to your employment agreement dated May 16, 2006 with Varsity Group Inc. (your "Employment Agreement").   Defined term shall have the same meanings provided for in the Employment Agreement.

Effective as of the date hereof, you have agreed to serve as Chief Executive Officer of the Company reporting directly to the board of directors of the Company.  

Your current salary shall increase from Two Hundred Twenty Five Thousand Dollars ($225,000) to Two Hundred Fifty Thousand Dollars ($250,000) retroactive to July 1, 2007.

For purposes of the Employment Agreement and any amendment thereto, a "change of control" shall be deemed to be occasioned by, or to include, (A) the acquisition of the Company by another entity by means of any transaction or series of transactions (including without limitation, any reorganization, merger or consolidation but, excluding any merger effected exclusively for the purpose of changing the domicile of the Corporation), unless the Corporation's stockholders of record as constituted immediately prior to such acquisition or sale will, immediately after such acquisition (by virtue of securities issued as consideration for the Corporation's acquisition) hold at least 50% of the voting power of the surviving or acquiring entity; or (B) sale of all or substantially all of the assets of the Company.

The severance benefits described in Section 7(c) of the Employment Agreement are increased from a period of six months to a period of twelve months.  

You agree that your Employment Agreement, this Amendment as of the date hereof and the amendment dated November 17, 2006 constitute the entire agreement between you and Company with respect to your employment with the Company, and agree that the terms of your Employment Agreement and the amendment dated November 17, 2006 shall be incorporated herein as if restated in full.   Please confirm your agreement by signing and counterpart to this letter.

Very truly yours,

Varsity Group Inc.

 

 

By: _/s/ Eric Kuhn_______________

Name:   Eric Kuhn

Title:  Board Chairman

Confirmed and Agreed:

 

 

__/s/ James Craig_______________

James M. Craig

Title:  Chief Executive OfficerE. Kuhn Resignation Letter

July 30, 2007

Eric J. Kuhn

Chairman of the Board of Directors

Varsity Group Inc.

Re: Amendment to Employment Agreement

Dear Eric:

This letter agreement (this "Agreement") shall serve as amendment #2 to your employment agreement dated August 24, 1999 with Varsitybooks.com Inc. (your "Employment Agreement").  

Effective as of August 1, 2007, you have agreed to reduce your salary to $15,000 per annum.

The foregoing amendment shall not constitute "Good Reason" as defined in Section 6(d)(ii) your Employment Agreement, and this Agreement shall not serve as a "Notice of Termination" under Section 6(c) of your Employment Agreement.

You agree that your Employment Agreement and this Agreement together constitute the entire agreement between you and the Company with respect to your employment with the Company, and agree that the terms of your Employment Agreement shall be incorporated herein as if restated in full.  Please confirm your agreement by signing and counterpart to this letter.

Very truly yours

Varsity Group Inc.

By:/s/ Jim Craig

Jim Craig 

Title: CEO

Confirmed and Agreed:

/s/ Eric J. Kuhn

Eric J. KuhnExhibit 10.54

    
      

    

    EXHIBIT
      10.54

    

    AMENDMENT
      TO REGISTRATION RIGHTS AGREEMENT

    

    THIS
      AMENDMENT to REGISTRATION RIGHTS AGREEMENT (the “Amendment”)
      is
      made and entered into this 26th
      day of
      March, 2007, by and between Smart Online, Inc. (the “Company”)
      and
      _______________________ (the “Investor”).

    

    WITNESSETH:

    

    WHEREAS,
      the Company and the Investor entered into a certain Registration Rights
      Agreement dated February 21, 2007 (the “Agreement”);
      and

    

    WHEREAS,
      the Agreement provides that the Company is required to pay a cash registration
      penalty payment to the Investor on March 26, 2007 (the “Initial
      Penalty”)
      if the
      Company had not filed the Registration Statement (as defined in the Agreement)
      with the Securities and Exchange Commission (the “SEC”)
      by the
      Required Filing Date (as defined in the Agreement) and is required to pay
      additional cash registration penalty payments on each 30th
      day
      anniversary after the Required Filing Date (the “Additional
      Penalties”)
      until
      such time that the Company files the Registration Statement with the SEC;
      and

    

    WHEREAS,
      the Required Filing Date was March 23, 2007, and the Company was unable to
      file
      the Registration Statement with the SEC, making the Initial Penalty due and
      payable to the Investor on March 26, 2007; and

    

    WHEREAS,
      as a shareholder in the Company, the Investor desires to support the Company
      in
      its efforts to file the Registration Statement in a timely manner without
      incurring undue expense; and

    

    WHEREAS,
      the Investor and the Company have agreed to amend the Agreement to extend the
      Required Filing Date to April 3, 2007 and to provide that the Initial Penalty
      and the Additional Penalties related to the filing of the Registration Statement
      shall not be due and payable to the Investor if the Company files the
      Registration Statement by April 3, 2007; and

    

    WHEREAS,
      the Investor and the Company have agreed to amend the Agreement to provide
      that
      if the Company has not filed the Registration Statement with the SEC by April
      3,
      2007, the Company will be required to pay the Investor the Initial Penalty
      on
      April 4, 2007 and the Additional Penalties shall be due and payable on each
      30th
      day
      anniversary after March 26, 2007, the date on which the Initial Penalty was
      due
      and payable; and 

    

    NOW,
      THEREFORE, in consideration of the premises and the agreements of the parties
      set forth herein, the adequacy and sufficiency of which are acknowledged, the
      parties hereto agree as follows:

    

    
      	 	
              1.

            	
              Amendment
                of Agreement.  

            

    

    

    
      	
            	(a)	
              The
                existing Paragraph 1(a) of the Agreement is hereby deleted in its
                entirety
                and the following substituted
                therefor:

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    

    
      
        	
              	(a)	
                subject
                  to receipt of necessary information from the Investors, prepare
                  and file
                  with the Securities and Exchange Commission (“SEC”),
                  within forty-one (41) calendar days after the Closing Date (the
                  “Required
                  Filing Date”),
                  a Registration Statement on Form S-1 to enable the resale of the
                  Shares by
                  the Investors from time to
                  time;

              

      

    

    

    (b) The
      existing Paragraph 1(b) of the Agreement is hereby deleted in its entirety
      and
      the following substituted therefor:

    

    
      	 	
              (b)

            	
              use
                its best efforts, subject to receipt of necessary information from
                the
                Investors, to cause the Registration Statement to become effective
                as soon
                as practicable, but in no event later than sixty (60) days after
                the
                Required Filing Date of the Registration Statement with the SEC or
                ninety
                (90) days after the Required Filing Date if the Registration Statement
                is
                reviewed by the SEC (the “Required
                Effective Date”).
                If the Registration Statement (i) has not been filed by the Required
                Filing Date or (ii) has not been declared effective by the SEC on
                or
                before the Required Effective Date, then the Company shall on the
                first
                business day after the Required Filing Date if not filed or the Required
                Effective Date if not declared effective, as the case may be, make
                a payment to the Investor as compensation for such delay an amount
                equal
                to one percent (1%) of the Purchase Price paid for the Shares purchased
                by
                the Investor,
                and on each 30th
                day anniversary after March 26, 2007 if not filed or after the Required
                Effective Date if not declared effective, as the case may be, make
                a
                payment to the Investor as compensation for such delay an amount
                equal to
                one-half percent (0.5%) of the Purchase Price paid for the Shares
                purchased by the Investor (collectively, the “Late
                Registration Payments”),
                until the Registration Statement is filed or declared effective by
                the
                SEC, as the case may be. Notwithstanding the foregoing, in no event
                shall
                the total of all Late Registration Payments exceed in the aggregate
                ten
                percent (10%) of such Purchase Price. Late Registration Payments,
                if any,
                will be prorated on a daily basis and will be paid to Investor by
                wire
                transfer or check within five (5) Business Days after the date that
                each
                payment is due; 

            

    

     

    2.    Ratification.
      Except
      as expressly amended by this Amendment, the terms and conditions of the
      Agreement are hereby ratified and confirmed to be in full force and effect
      without modification or revision, and are hereby incorporated as if fully set
      forth herein. In the event of a conflict between the terms of this Amendment
      and
      the Agreement, the terms of this Amendment shall control.

    

    3.    No
      Novation.
      The
      parties agree that the execution of this Amendment shall constitute an amendment
      to the Agreement and shall not be construed as a novation of the Agreement.
      The
      parties hereby acknowledge their intent that this Amendment will not disturb
      the
      existing rights, remedies and obligations created under the
      Agreement.

    

    [Signature
      on Following Page]

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Signature
      Page to Amendment to Registration Rights Agreement

    

    IN
      WITNESS WHEREOF, the Company and the Investor have caused this Amendment to
      be
      executed by their duly authorized representatives as of the day and year first
      above written.

    

    

     

    
      	 	
              _____________________________

              By:
                

              Its:
                

              

              ____________________

              By:
                

              Its:
                

              

              

               

              

              SMART
                ONLINE, INC.

               

               

              By:
                ____________________________

              Name:
                

              Title:

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