Document:

Exhibit 10.1

 

Engagement of MV Advisors
II, LLC by Aspyra, Inc.

 

Summary of Terms

 

June 2008

 

1.             John Mutch will continue to
serve the Board of Directors of Aspyra, Inc. (“Aspyra”) as Chairman,
concurrent with the stockholder vote June 26, 2008.  He will receive the standard compensation,
including director fees and non-qualified stock option grants, for directors
who are not officers or employees of Aspyra, as described in Aspyra’s proxy
statement for its 2008 Annual Meeting and as such standard compensation may be
modified from time to time.  The initial
non-qualified option grant for 10,000 shares will be granted on the trading day
when Mr. Mutch’s is re-elected by the stockholder vote for 2008, or if
announced later than one hour prior to the close of trading, on the next
trading day (the “Grant Date”).

 

2.             Aspyra will enter into a
consulting agreement (the “Agreement”) with MV Advisors II, LLC (“MV Advisors”),
a company for which Mr. Mutch is the sole Manager and Member, to be
effective as of the date that Mr. Mutch is re-elected to the Board of
Aspyra (the “Effective Date”).  Under the
Agreement, MV Advisors will consult with management and the Board to explore
strategies to increase shareholder value and liquidity.

 

3.             MV Advisors will receive a
fee of $75,000 per year, paid in non-refundable quarterly advances with the
first payment due June 26, 2008. 
Future payments will be reduced by the amount of each director retainer
fee paid to Mr. Mutch, and by each director meeting fee that Mr. Mutch
is eligible to receive, whether or not he earns such fee by attending the
associated meeting.  MV Advisors will
also be reimbursed for reasonable out-of-pocket travel, food and lodging
expenses incurred in connection with the services performed, following delivery
of receipts or other documentation therefor to Aspyra.

 

4.             Mr. Mutch, in his
capacity as a consultant through MV Advisors, will receive an additional
non-qualified option grant for 240,000 shares on the Grant Date.  This option will vest and become exercisable
in equal monthly installments over 36 months, beginning June 26,
2008.  Vesting will fully accelerate upon
a “Change in Control,” which will be defined as set forth on Annex 1
hereto.  Vesting will also fully
accelerate upon termination of Mr. Mutch’s services, unless such services
terminate due to any of the following: (a) a termination of the Agreement
by MV Advisors or MV Advisors giving a notice of non-renewal, in each case
while Aspyra is not in material breach of the Agreement; (b) a termination
of the Agreement by Aspyra due to uncured material breach by MV Advisors; (c) Mr. Mutch
resigning from or declining to stand for reelection to the Board other than due
to a disability, or (d) Mr. Mutch being removed from the Board for “Cause”
(as defined below). The option, to the extent vested, will remain exercisable
until the earlier to occur of (i) a Change in Control; (ii) Mr. Mutch’s
removal for Cause and (iii) the one-year anniversary of the termination of
the services of Mr. Mutch for any reason other than his removal for Cause.
For the avoidance of doubt, Mr. Mutch will be deemed to be providing
service to Aspyra so long as Mr. Mutch is providing services to Aspyra
through MV Advisors under the Agreement or Mr. Mutch serves as a director
of Aspyra.  For purposes of this
Agreement, “Cause” will mean any willful breach of duty by Mr. Mutch in
the course of his duties as a director, continued violation of written Aspyra
policies after written notice of such violation, violation of Aspyra’s Insider
Trading Policies, conviction of a felony or any crime involving fraud, theft,
embezzlement, dishonesty or moral 

 

1

 

turpitude, engaging in
activities which materially defame Aspyra, engaging in conduct which is material
injurious to Aspyra or its Affiliates, or any of their respective customer or
supplier relationships, financially or otherwise, or Mr. Mutch’s gross
negligence or continued failure in Mr. Mutch’s duties as a director or his
continued incapacity to perform such duties.

 

5.             MV Advisors will receive an
incentive payment equal to 5% of the total gross contract value to Aspyra of
any new contract with Microsoft Corporation or any affiliate thereof
(collectively, “Microsoft”) that is entered into during the term of the
Agreement or within one year after the expiration or termination therof,
provided that such new contract was entered into as a direct result of initial
contacts made during the term of the Agreement from MV Advisors to Microsoft.  Total gross contract value will refer to the
total expected gross payments to Aspyra under the terms of the contract or
relationship, and payment will be due upon the commencement of such contract or
relationship, and will be based on the best reasonable estimate of the total
expected gross payments for the first three years of the contract or
relationship.  The Agreement will set
forth a mechanism for estimating the total gross contract value and the
resolution of any disputes related thereto. 
At the end of the three year period, MV Advisors will be paid 5% of the
positive difference, if any, between the actual gross payments for the first
three years of the contract or relationship and the estimated total gross
contract value determined at the commencement of the arrangement.  After the third year, MV Advisors will be
paid 5% of the actual gross payments from such contract or relationship,
including any amendments or renewals thereof, on a quarterly basis, for an
additional three years.  MV Advisor’s
right to incentive payments will survive expiration or termination of the
Agreement.

 

6.             During the term of the
Agreement and for six months after the expiration or termination thereof, MV
Advisors or its designee will have the right to purchase no less than $250,000
in the next offering of equity securities by Aspyra, other than issuances of
securities (i) under any Aspyra employee benefits plan, as such term is
defined in Rule 405 of Regulation C promulgated under the Securities Act
of 1933, as amended, (ii) pursuant to the exercise, conversion or exchange
of any Aspyra securities or any rights to acquire Aspyra securities that are
outstanding as of the date hereof, provided such outstanding securities or
rights are not materially modified or repriced after the date hereof, (iii) to financial institutions, equipment lessors, real
property lessors, suppliers or third party service providers in
connection with the provision of goods or services to Aspyra or pursuant to a debt financing, equipment leasing or
real property leasing transaction; (iv) by reason of a dividend, stock
split, split-up or other distribution on shares of Common Stock, and (v) pursuant
to the acquisition of another corporation by Aspyra by merger, purchase of
substantially all of the assets or other reorganization or to a joint venture
agreement.  Such securities will be made
available to MV Advisors or its designee on the same terms offered to other
participants in the same offering of securities.  In the event that approval of Aspyra’s
shareholders is required by the American Stock Exchange as a condition to
participation by MV Advisors or its designee in such financing, Aspyra will
promptly pursue such shareholder approval. 
If MV Advisors or its designee does not participate in an offering which
is subject to the right of participation, the same right of participation will
apply to the next offering in the same fashion and to the same extent as set
forth in the first sentence of this paragraph; provided that, if MV Advisors or
its designee does not participate in an offering for which the right of
participation applies following a request from the Board that MV Advisors not
participate, the right of participation for the next offering will survive
expiration or termination of the Agreement indefinitely.

 

7.             Aspyra will reimburse MV
Advisors up to $20,000 in legal fees in connection with the negotiation,
preparation and entry into the Agreement. 
Such amount will be payable within 10 days of submission of an invoice
regardless of whether the Agreement is ultimately executed.

 

2

 

8.             MV Advisors will be free to
contract with other persons and/or entities to provide them with services
similar to those provided to Aspyra, provided that MV Advisors does not create a
conflict with the services to Aspyra or cause a breach of fiduciary duty by Mr. Mutch.

 

9.             The Agreement will have an
initial term expiring one year after the Effective Date, and will automatically
renew for successive one year terms unless one party provides 60 days advance
notice of non-renewal to the other party. 
Aspyra may terminate the Agreement upon 60 days’ advance written notice
if MV Advisors has materially breached the Agreement, and such breach is not
cured within such 60 day period.  MV
Advisors may terminate the Agreement at any time upon 60 days’ advance written
notice.  Termination of the Agreement
will not affect Mr. Mutch’s status as Chairman of the Board or as a
director.

 

10.           The terms of the Agreement
will be disclosed in filings with the Securities and Exchange Commission and
other public disclosures to the extent required to comply with applicable laws
and the rules of the American Stock Exchange, provided that Aspyra will
provide a copy of each proposed disclosure to MV Advisors in advance of such
disclosure, and will consider the input of MV Advisors concerning such
disclosure, including any requests that portions of the Agreement be the
subject of a request for confidential treatment.

 

Subject to
the negotiation and execution of definitive Consulting Agreement between MV
Advisors and Aspyra, the foregoing, including Annex 1 attached hereto,
correctly sets forth the understanding of both parties regarding the provision
of consulting services by MV Advisors to Aspyra.

 

	
  ASPYRA,
  INC.

  	
  MV
  ADVISORS II, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/
  James F. Zierick

  	
   

  	
  By:

  	
  /s/
  John Mutch

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  James
  F. Zierick

  	
   

  	
  John
  Mutch

  
	
   

  	
  Chief Executive Officer

  	
   

  	
  Managing Partner

  
					

 

3

 

ANNEX 1

 

CHANGE IN CONTROL

 

For purposes of the Agreement,
a “Change in Control” means:

 

(a)           Merger or Consolidation.  A merger or consolidation of Aspyra with any
other entity, other than (i) a merger or consolidation which would result
in the voting securities of Aspyra outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity), in combination with the
ownership of any trustee or other fiduciary holding securities under an
employee benefit plan of Aspyra, at least 50% of the combined voting power of
the voting securities of Aspyra or such surviving entity outstanding
immediately after such merger or consolidation, or (ii) a merger or
consolidation effected to implement a recapitalization of Aspyra (or similar
transaction) in which no person or entity acquires more than fifty percent
(50%) of the combined voting power of Aspyra’s then outstanding securities.

 

(b)           Sale of Assets.  The sale or disposition by Aspyra of more
than one-third (1/3rd) of all of Aspyra’s assets other than to an affiliate or
subsidiary;

 

(c)           Acquisition of 50% of
Outstanding Securities.  In
any twelve (12) month period, any person or entity becoming the “beneficial
owner” (as defined in Rule 13d-3 under the Security Exchange Act of 1934,
as amended), directly or indirectly, of securities of Aspyra representing Fifty
Percent (50%) or more of the combined voting power of Aspyra’s then outstanding
securities; or

 

(d)           Change in Board of Directors.  In any twelve (12) month period, if there is
a change in the majority of the Board of Directors of Aspyra (the “Board”)
without the consent of the pre-existing directors.

 

The foregoing
notwithstanding, a “Change in Control” shall not include any transaction
or series of related transactions (i) that the Board determines are
primarily for the purpose of providing financing for Aspyra or (ii) immediately
following which, in the judgment of the Board, the holders (or their
affiliates) of Aspyra’s capital stock immediately prior to such transaction or
series of transactions continue to have control in any entity which owns all or
substantially all of the assets of Aspyra.

 

4Exhibit 10.1

 

HKN, INC.

EXECUTIVE RETENTION AGREEMENT

 

THIS
EXECUTIVE RETENTION AGREEMENT (the “Agreement”) is made
and entered into effective as of the 1st day of July, 2008 by and
between HKN, INC., a Delaware
corporation, whose principal office is 180 State Street, Suite 200,
Southlake, Texas 76092 (“the Company”)
and                         
an individual employee of the Company, whose home address is
                                                                        ,
(the “Employee”).

 

DECLARATIONS

 

WHEREAS, the Employee is, as of the Date hereof, in
the employ of the Company and is an executive officer of the Company on whom
the Company relies and whom the Company desires to retain in its employment;
and

 

WHEREAS, the Company
desires to provide Employee with assurances and inducements, conditioned as set
forth herein both to allow him [her] to maintain a focus on making decisions
and undertaking actions that are in the best overall interests of the Company
and to alleviate job security concerns; and

 

WHEREAS, the Company has determined and that a
proper inducement for the Employee to remain in the employ of the Company is to
provide certain retention payments; and

 

WHEREAS,
as further inducement for the Employee to remain in the employ of the
Company, the Company has determined to provide additional severance
consideration that would be paid by the Company to Employee should the Company
terminate Employee’s employment during the term of this Agreement.

 

NOW
THEREFORE, in consideration of the Employee’s acceptance of and
continued employment with the Company, both
parties hereto, the Company and the Employee, agree as follows:

 

AGREEMENT

 

1.             Retention
Payments:

 

a.             From the
Effective Date and through the Term of this Agreement, the Company shall pay to
the Employee quarterly payments of 
                      
each at the end of each of the Company’s fiscal quarters, with the first
payment due and payable to the Employee on September 30, 2008.

 

b.             To receive the
Retention Payment, Employee must have remained in the employ of the Company as
of the date of the respective payment date.

 

 

2.             Additional Severance Upon Involuntary Termination:

 

a.             In the event that the Company involuntarily terminates or otherwise
determines to sever the employment relationship with the Employee during the
Term of this Agreement, then the Company will pay to Employee a sum of money,
IN ADDITION TO any and all severance pay and related compensation such Employee
is entitled to receive under the policies in effect by the Company on the date
of this Agreement, the additional amount of
                          
(hereinafter referred to as the “Additional Severance”).

 

b.             The payment of this Additional Severance will become due to the Employee
from the Company upon any event of involuntarily termination during the Term,
whether it be with or without cause, or an event of individual involuntary
termination or in connection with a layoff, office closing or forced
reduction.   Notwithstanding the
preceding sentence, any involuntary termination resulting from the Employee’s
wilful misconduct, fraud or criminal conduct shall relieve the Company from any
and all severance payment obligations to the Employee including, without
limitation, the Additional Severance described herein.

 

3.             Voluntary Termination:

 

In
the event that Employee elects for any reason to voluntarily terminate his/her
employment with the Company during the Term, then in such event Employee will
not be entitled to receive the Additional Severance and will be only entitled
to receive such severance and compensation benefits, if any, Employee may be
entitled to receive pursuant to the policies of the Company in effect as of
that date of voluntarily termination.  
Further Employee’s rights to any further Retention Payments shall
terminate without further action or notice from the Company.

 

4.          No Guaranty of Employment:

 

This
Agreement shall not constitute nor be construed nor interpreted as any
guarantee nor contract for continued employment of Employee with the Company,
any subsidiary or any successor company.

 

5.          Term of Agreement:

 

Unless
otherwise agreed to in writing by the parties hereto, this Agreement shall be
in effect    from the date first set
forth above and continuing for 18-months thereafter terminating on December 31,
2009 without further action of the parties. 
At the expiration of the Term this Agreement may be extended, modified
or renegotiated only upon the mutual written agreement of both parties.

 

 

6.             Parties:

 

This
Agreement shall be binding on the parties hereto and shall further be binding
upon the successors, assigns, parent corporations or subsidiary corporations of
the Company, and shall further inure to the benefit of the heirs of
Employee.  Specifically, this Agreement
shall survive and be binding upon any successor entity that is the survivor,
successor, reorganized, affiliated or purchaser organization resulting from a
combination, restructuring, merger, sale or other reorganization of the
Company.

 

7.             Governing Law:

 

This Agreement shall be governed by and interpreted
in accordance with the laws of the State of Texas, without giving effect to the
principles of conflicts of law thereof.

 

8.       Entire
Agreement:

 

This
Agreement constitutes the entire agreement between the parties with respect to
the subject matter hereof.

 

9.       Representations Contrary to this Agreement:

 

No
employee, officer, or director of the Company has the authority to alter, vary,
or modify the terms of this Agreement except by means of an authorized written
amendment to this Agreement.  No verbal
or written representations contrary to the terms of this Agreement and its
written amendments shall be binding upon this Agreement or the Company, nor may
any such representation be relied upon by Employee.

 

IN
WITNESS whereof this Agreement has been executed the day and year first above
written.

 

HKN, INC. (the Company)

 

 

	
  By:

  	
   

  	
   

  
	
  Name:
  

  	
  Mikel
  D. Faulkner

  
	
  Its:

  	
  President
  and Chief Executive Officer

  
				

 

 

(the Employee)

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