Document:

AMENDMENT TO PROMISSORY NOTE

Exhibit

4.42

 

AMENDMENT

TO PROMISSORY NOTE

 

This AMENDMENT TO PROMISSORY NOTE (the

“Amendment”) is made this 21st day of December, 2001, between

EpicEdge, Inc., a Texas corporation (“Maker”), and Fleck T.I.M.E. Fund, L.P.

(“Payee”).

 

PREAMBLE

 

WHEREAS, Maker executed a Convertible Promissory

Note on the 1st day of December 2000, whereby it promised to pay to

the order of Payee the sum of $1,000,000, (the “Original Note”), and

 

WHEREAS, in order to maximize the purposes for

which the Original Note was procured, Maker and Payee have agreed to amend the

payment terms.

 

NOW,

THEREFORE, in

exchange for ten and no/100 dollars ($10), the mutual promises contained

herein, and other good and valuable consideration, the receipt and sufficiency

of which are hereby acknowledged, the parties hereto agree to amend the

Original Note as follows:

 

1.             Section (b) of the introductory paragraph of the

Original Note shall be amended to reflect that the maturity date shall be

January 31, 2003;

 

2.             All other terms of the Original Note

shall remain unmodified.

 

 

IN

WITNESS WHEREOF, each

of the parties hereto has executed this Amendment or has caused this Amendment

to be executed on its behalf by a representative duly authorized, all as of the

date first above set forth.

 

	

   

  	

  MAKER:

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

  EPICEDGE, INC.

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

  Name:

  	

   

  	

   

  
	

   

  	

  Title:

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

  PAYEE:

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

  FLECK T.I.M.E. FUND, L.P.

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

  Name:

  	

   

  	

   

  
	

   

  	

  Title:_

EXHIBIT

10.1

 

EMPLOYMENT

AGREEMENT

THIS AGREEMENT

(“Agreement”) made and entered into as of this 8th day of March,

2002, by and between DIGITAL ANGEL CORPORATION, a Delaware corporation

(“Company”) and RANDOLPH K. GEISSLER (“Employee”).

BACKGROUND

 

Company presently employs

Employee as its president and chief executive officer pursuant to a written

Agreement dated as of September 8, 2000. 

Company and Employee desire to amend such Agreement and further desire

that such employment continues upon the terms and conditions set forth in this

Agreement.

TERMS AND CONDITIONS

 

1.             Employment. 

Company hereby employs Employee, and Employee hereby accepts such

employment by Company, on the terms and conditions set forth below.

2.             Capacity. 

Employee shall serve as Company’s president and chief executive

officer.  Employee shall perform such

services for Company and its subsidiaries and affiliates as Company’s board of

directors shall direct from time to time. 

However, no such services shall be of a nature which are not

commensurate with, and/or are beneath the dignity of, Employee’s title.

3.             Term. 

Company’s employment of Employee under this Agreement shall be for an

initial term of five years commencing on March 8, 2002 and ending on March 7,

2007.  

 

 

 

The term of Employee’s

employment under this Agreement shall automatically be renewed for successive

additional one year terms on each anniversary of the commencement of Employee’s

employment under this Agreement, beginning with the March 8, 2003 anniversary

date, each of which terms shall be added at the end of the then existing term

(taking into account any prior extensions or failures to extend), unless either

party notifies the other at least 30 days prior to an anniversary date of this

Agreement.  For example, unless either

party notifies the other to the contrary on or before February 6, 2003, the

term of this Agreement shall be extended from March 8, 2007 to March 7,

2008.  For further example, and assuming

the term of this Agreement has been extended to March 7, 2008, if one party

notifies the other that it does not desire to extend the term of this Agreement

for an additional year and such notice is given on or before February 6, 2004,

the term of this Agreement shall not be extended from March 8, 2008 to March 7,

2009.  Notwithstanding the foregoing,

the term of this Agreement may end prior to the termination date determined

under this paragraph 3 as provided in paragraphs 9, 10, 11 and 12.

4.             Service While Employed.  Employee agrees to devote his best efforts, his full diligence,

and substantially all of his business time, to his duties hereunder and shall

not engage, either directly or indirectly, in any business or other activity

which is competitive with or adverse to the interests or the business of Company.  Employee may engage in other business

activities provided that they do not interfere with the performance of his

duties described herein.

5.             Items Furnished and Relocation.  Company shall furnish Employee with such

private office, an executive assistant, secretarial assistance, and such other

facilities, equipment and services suitable to his position, adequate to

perform his duties hereunder, and 

 

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consistent with past

practices.  Without his consent,

Employee shall not be relocated from Hudson, Wisconsin, and his office shall

remain in St. Paul, Minnesota.

6.             Compensation, Vacations and Reimbursement.  As partial compensation for his services to

Company, Company agrees to pay Employee an annual salary in regular monthly or

other agreed upon installments of not less than $250,000 and an annual bonus of

not less than $50,000.  Employee shall

also be entitled to receive such bonuses (in addition to that required under

the preceding sentence), incentive compensation, and other compensation, if

any, as Company’s board of directors, executive committee, compensation

committee, or other designated committee shall award Employee from time to time

whether in cash, Company stock, stock options, other stock based compensation,

other form of remuneration, or any combination of the foregoing.  In addition, Company shall pay Employee

monthly payments of $5,000 each as a flexible perquisite allowance to be used

by Employee for such purposes as he shall determine.  All such compensation shall be subject to legally required income

and employment tax withholding. 

Employee shall be entitled to paid vacations, reimbursement for all

reasonable business expenses, and an automobile allowance in accordance with

past practices.

7.             Other Benefits. 

In addition to his compensation described in paragraph 6 above, Employee

shall be entitled to participate in such bonus, profit sharing, deferred

compensation and pension plans of Company for which he is eligible.

8.             Welfare and Fringe Benefits.  In addition to his compensation described in

paragraph 6 and the benefits described in paragraph 7 above, Employee shall be

entitled to participate in such welfare and fringe benefits plans and programs

of the Company for which he is eligible.

 

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9.             Death and Disability.  If Employee dies during the term of this Agreement, his

employment shall be deemed to have been terminated as of the last day of the

month in which his death occurs, and Company will pay to Employee’s personal

representative all salary and other compensation due Employee through the end

of such month.  If Employee becomes

permanently disabled so that he cannot perform his duties hereunder, as

determined by a physician selected by or acceptable to Company, his employment

shall be deemed to have been terminated as of the last day of the month in

which such determination is made, and he will receive his salary and other

compensation through the end of such month. 

For purposes of the foregoing computations, Employee shall be deemed to

have earned the same percentage of his minimum annual bonus for such employment

year as the number of days in the employment year through the date his

employment is deemed to terminate is of 365.

10.           Retirement.  From and after the time Employee attains age

65, he may retire at any time by notifying Company at least 120 days prior to

his retirement date or be retired by Company upon at least two years notice.

11.           Default.  In the event that Company fails to perform a

material provision of this Agreement and such failure continues for 30 days

after notification from Employee, the Employee may terminate this Agreement by

notice to the Company.  Company may

terminate this Agreement upon Employee’s material default.  Employee’s material default shall mean (a)

Employee’s willful and continued failure to perform the requirements of his

duties hereunder (other than as a result of total or partial incapacity due to

physical or mental illness) for 30 days after a written demand is delivered

to  Employee on behalf of Company which

specifically identifies the manner in which it is alleged that Employee has not

substantially performed his 

 

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duties, (b) Employee’s

dishonesty in the performance of his duties hereunder, (c) an act or acts on

Employee’s part involving moral turpitude or constituting a felony under the

laws of the United States or any state thereof, (d) any other act or omission

which materially injures the financial condition or business reputation of

Company or any of its subsidiaries or affiliates, or (e) Employee’s material

breach of his non-compete and confidentiality obligations under paragraphs 4

and/or 13 of this Agreement, respectively. 

Any termination shall be without prejudice to any rights or remedies

which Employee or Company may have.

12.           Change in Control.  Notwithstanding any other provision of this

Agreement, should a Change of Control (as defined below) occur, Employee, at

his sole option and discretion, may terminate his employment under this

Agreement at any time within one year after such change of control upon 15 days

notice.  In the event of such

termination, Company shall pay to Employee a severance payment equal to three

times the base amount as defined in Section 280G(b)(3) of the Internal Revenue

Code of 1986, as amended (“Code”) minus $1.00 which shall be payable no later

than one month after the effective date of the Employee’s termination of

employment.  In addition, in the event

of a Change of Control, all outstanding stock options held by Employee shall

become fully exercisable (to the extent not already exercisable).  For purposes of this Agreement, a Change in

Control shall be deemed to occur (a) if any person, as such term is used in

Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934 (“Exchange

Act”), is or becomes the “beneficial owner” (as defined in Rule 13d-3

promulgated under the Exchange Act), directly or indirectly, of securities of

Company representing 20% or more of the combined voting power (i) of Company’s

then outstanding securities or (ii) on a fully diluted basis, (b) upon the

first purchase of the common stock of 

 

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Company pursuant to a

tender or exchange offer (other than a tender or exchange offer made by

Company), (c) upon the approval by Company’s stockholders of a merger or

consolidation, a sale or disposition of all or substantially all of Company’s

assets or a plan of liquidation or dissolution of Company, or (d) if, during

any period of 2 consecutive years, individuals who at the beginning of such

period constitute the board of directors of Company cease for any reason to

constitute at least a majority thereof, unless the election or nomination for

the election by Company’s stockholders of each new director was approved by a

vote of at least 2/3 of the directors then still in office who were directors

at the beginning of the period. 

Notwithstanding the foregoing, a Change in Control shall not be deemed

to occur if Company either merges or consolidates with or into another company

or sells or disposes of all or substantially all of its assets to another

company, if such merger, consolidation, sale or disposition is in connection

with a corporate restructuring wherein the stockholders of Company immediately

before such merger, consolidation, sale or disposition own, directly or

indirectly, immediately following such merger, consolidation, sale or

disposition at least 80% of the combined voting power of all outstanding

classes of securities of the company resulting from such merger or

consolidation, or to which Company sells or disposes of its assets, in

substantially the same proportion as their ownership in Company immediately

before such merger, consolidation, sale or disposition.

13.           Nondisclosure; Return of Records.  Employee will not, except as authorized by

Company, publish or disclose to others, or use for his own benefit, or

authorize anyone else to publish or disclose or use, or copy or make notes of

any secret, proprietary, or confidential information or knowledge of data or

trade secrets of or relating to the business activities of Company which may

come to Employee’s knowledge during his employment with 

 

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the Company.  Upon termination of Employee’s employment

for any reason, Employee will deliver to Company, without retaining any copies,

notes or excerpts, all records, notes, data, memoranda, and all other documents

or materials made or compiled by Employee, or made available to him by Company

during his employment, which are in Employee’s possession and/or control and

which are the property of Company and/or which relate to Employee’s employment

or the business activities of Company.

14.           Binding Effect.  This Agreement shall be binding upon and

inure to the benefit of Company and any successors or assigns of Company, and

Employee, his heirs, personal representatives and assigns, except that, unless

otherwise agreed to by Employee, Employee’s obligations to perform services and

rights to receive payment therefore shall be nonassignable and nontransferable.

15.           Entire Agreement:  Modification.  This Agreement constitutes the entire agreement between the

parties with respect to the subject matter and supersedes all prior or

contemporaneous agreements not set forth in this agreement.  This Agreement may not be modified other

than by an agreement in writing signed by each of the parties.

16.           Waiver.   Any failure by either party to enforce any

provision of this Agreement shall not operate as a waiver of such provision or

any other provision.  Any waiver by

either party of any breach of any provision of this Agreement shall not operate

as a waiver of any other breach of such provision or any other provision of

this agreement.

17.           Severability.  The invalidity or unenforceability of any

particular provision of this Agreement shall not effect the other provisions of

this Agreement, and this Agreement shall be construed in all respects as if

such invalid or unenforceable provision were omitted.

 

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18.           Paragraph Headings. Paragraph

headings throughout this Agreement are solely for the convenience of the

parties and shall not be construed as a part of any section or as modifying the

contents of any section.

19.           Governing Law.  This Agreement shall be governed and

construed in accordance with the laws of the State of Minnesota.

20.           Notices.  All notices under this Agreement shall be

personally delivered, sent certified mail, postage prepaid, to Company at its

corporate office and to Employee at his principal residence, or sent by

telecopy.

21.           Supplemental Compensation.  Upon the termination of Employee’s

employment with Company for any reason other than Company’s termination due to

his material default, as described in paragraph 11, Employee shall be entitled

to receive from Company 60 equal monthly payments, with the first such payment

due on the second first day of the month after termination of employment, equal

to 1/60 of his highest compensation (salary, bonus, and perks) over any one

year period during his employment by Company. 

If Employee should die before all or any part of the above described

monthly payments have been made, all payments or all remaining payments shall

be made to his designated beneficiary, if any, otherwise to his estate.  Notwithstanding the foregoing, the aggregate

amount payable under this paragraph 21 shall be reduced, but not below zero, by

the amount, if any, payable under paragraph 12.

22.           Non-Competition.  During the period that Employee is entitled

to receive payments under paragraph 21, Employee shall not engage, directly or

indirectly, either on his own behalf or on behalf of any other person, firm,

corporation or other entity, in any business competitive with the business of

Company, in the geographic area in which Company is 

 

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conducting business at

the time of termination of Employee’s employment, or own more than 5% of any

such firm, corporation or other entity. 

In addition, Employee must furnish Company with such information as

Company shall from time to time request in order to determine that Employee is

in compliance with the requirements of the preceding provisions of this

paragraph 22.  The payments to be

made under paragraph 21 are conditioned upon Employee’s complying with the

provisions of this paragraph 22, and, in the event that such provisions are not

complied with, Company may suspend such payments for any period of time in

which Employee is not in compliance with the preceding provisions of this

paragraph 22.

23.           Company.  For purposes of paragraphs 4, 13, and 22 of

this Agreement, the Company shall mean Digital Angel Corporation and all

subsidiaries and affiliates of it.

24.           Salary in Stock or Cash.  At least 10 days prior to each March 8 that

this Agreement is in effect, Employee shall elect the amount or percentage, if

any, of his salary for the 12 month period beginning on that date which he

desires to be payable in company common stock (“Stock”).  To the extent Employee elects to have all or

part of his salary paid in Stock, the per share value of the Stock, which shall

be used to determine the number of shares payable for the employment year,

shall be the average closing price for the last five business days prior to the

applicable each March 1, or, if the shares are not publicly traded, the

value as determined by the board of directors. 

Any election shall be irrevocable. 

If Employee fails to make a timely election, his entire salary for the

employment year shall be paid in cash. 

Any shares of Stock payable to Employee shall be subject to such

transfer restrictions as are required by applicable securities law and a legend

to such effect shall be placed on the certificates.  Employee represents and warrants that any Stock which will be

paid to him pursuant to this paragraph 24 shall be 

 

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acquired for investment

purposes and not for resale or distribution. 

Company shall include such Stock in any subsequent registration to the

extent practical.  If any portion of

Employee’s salary is paid in Stock, Employee shall tender to Company the amount

required for income and employment tax withholding on any such payment.  If, and to the extent such amount is not so

tendered, Company may withhold the number of shares of Stock equal to the

amount such required withholding from the shares of Stock issued to Employee.  Notwithstanding the foregoing provisions of

this paragraph 24 for the first year of his employment, all of his

compensation shall be payable in cash unless otherwise elected by Employee on

or before June 1, 2002.  Any such

election made by Employee shall apply only to salary payable after such

election is made.

25.           Other Matters.  For purposes of this paragraph 25, the

following words shall have the following respective meanings:

(a)           Gross Up Payment.  A payment that covers all federal and state

income taxes payable by Employee, if any, which would not have been incurred by

Employee if another payment or transfer and the Gross Up Payment had not been

made to Employee.

(b)           Change

of Control.  As defined in paragraph

12 of this Agreement.

(c)           Triggering

Event.  A Change of Control,

termination of Employee’s employment for any reason other than due to his

material default, as described in paragraph 11, if he ceases to be Company’s

president and chief executive officer for any reason other than termination due

to his material default, as described in paragraph 11, or the sale by

Company of the stock of Company subsidiaries or the sale by 

 

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Company subsidiaries of assets, outside the ordinary course of

business, having aggregate proceeds of at least $110 million.

Within 10 days of the

occurrence of a Triggering Event, Company shall pay to Employee the sum of

$4,000,000.  If the Triggering Event is

the Employee’s death, such amount shall be paid to his designated beneficiary,

if any, otherwise to his estate.  Company

may pay such amount in cash or in Company’s common stock or in a combination of

cash and common stock.  Common Stock

used in payment shall be valued as described in paragraph 24.  The allocation of cash and stock for

payments provided pursuant to this paragraph 25 shall include at least

sufficient cash to cover the tax liability associated with such payments, and

shall otherwise be structure to maximize tax efficiency to both Company and

Employee.

26.           Excise Gross Up.  In the event that any payment or benefit

received or to be received by Employee under this Agreement and/or under

another plan of or agreement with Company is subject to the excise tax (“Excise

Tax”) under Section 4999 of the Internal Revenue Code of 1986, as amended

(“Code”), Company shall pay Employee an amount (“Excise Gross Up Payment”) that

covers all Excise Taxes incurred or to be incurred by Employee because of any

such payment or benefit and all federal and state income taxes and Excise Taxes

on the Excise Gross Up Payment and which, therefore, will place Employee in the

same position that he would have been in had no such payment or benefit been

subject to the Excise Tax.  The Excise

Tax Gross Up Payment (or portion thereof) shall be made upon the earlier of the

imposition of any Excise Tax upon Employee or his payment of any Excise Tax.

27.           Work Product. Employee shall

promptly disclose to Company all inventions made by Employee during the term

hereof, assign such inventions to Company, and 

 

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execute such documents as

are required for Company to obtain patent and/or copyright protection.

28.           Effect of Amendment.  This Agreement shall supersede all

agreements between the parties relating to Employee’s employment by Company.

IN WITNESS WHEREOF, the

parties have duly executed this Agreement as of the day and year first above

written.

 

	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

  DIGITAL ANGEL CORPORATION

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

  By:

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

  Title:

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

  “Company”

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

  Randolph K. Geissler

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

  “Employee”

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  

 

 

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