Document:

exv10w16

 

EXHIBIT 10.16

TASER INTERNATIONAL, INC.

2004 OUTSIDE DIRECTOR STOCK OPTION PLAN

(AS ADOPTED BY THE BOARD OF DIRECTORS ON JANUARY 30, 2004 AND APPROVED BY THE STOCKHOLDERS AT THE APRIL 29,

2004 ANNUAL MEETING OF STOCKHOLDERS)

(AMENDED BY THE BOARD OF DIRECTORS IN MARCH, 2006)

1. Purposes of the Plan. The purposes of this 2004 Outside Director Stock Option Plan are to
attract and retain the best available personnel for service as Outside Directors (as defined
herein) of the Company, to provide additional incentive to the outside directors of the Company to
serve as Directors, and to encourage their continued service on the Board.

     All options granted hereunder shall be nonstatutory stock options.

     2. Definitions. As used herein, the following definitions shall apply:

          (a) “Board” means the Board of Directors of the Company.

          (b) “Code” means the Internal Revenue Code of 1986, as amended.

          (c) “Common Stock” means the Common Stock of the Company.

          (d) “Company” means TASER International, Inc., a Delaware corporation.

          (e) “Director” means a member of the Board.

          (f) “Employee” means any person, including officers and Directors, employed by the Company or
any Parent or Subsidiary of the Company. The payment of a Director’s fee by the Company shall not
be sufficient in and of itself to constitute “employment” by the Company.

          (g) “Exchange Act” means the Securities Exchange Act of 1934, as amended.

          (h) “Fair Market Value” means, as of any date, the value of Common Stock determined as
follows:

               (i) If the Common Stock is listed on any established stock exchange or a national market
system, including without limitation the NASDAQ National Market or The NASDAQ SmallCap Market of
The NASDAQ Stock Market, its Fair Market Value shall be the closing sales price for such stock (or
the closing bid, if no sales were reported) as quoted on such exchange or system for the last
market trading day prior to the time of determination, as reported in The Wall Street Journal or
such other source as the Administrator deems reliable;

               (ii) If the Common Stock is regularly quoted by a recognized securities dealer but selling
prices are not reported, the Fair Market Value of a Share of Common Stock shall be the mean between
the high bid and low asked prices for the Common Stock on the date of determination, as reported in
The Wall Street Journal or such other source as the Board deems reliable, or;

               (iii) In the absence of an established market for the Common Stock, the Fair Market Value
thereof shall be determined in good faith by the Board.

          (i) “Inside Director” means a Director who is an Employee.

D-1

 

          (j) “Option” means a stock option granted pursuant to the Plan.

          (k) “Optioned Stock” means the Common Stock subject to an Option.

          (l) “Optionee” means a Director who holds an Option.

          (m) “Outside Director” means a Director who is (i) not an Employee and (ii) not a partner nor
a member of any venture capital firm or institutional investor which owns securities of the Company
having more than five percent (5%) of the total voting power of the Company.

          (n) “Parent” means a “parent corporation,” whether now or hereafter existing, as defined in
Section 424(e) of the Code.

          (o) “Plan” means this 2004 Director Stock Option Plan.

          (p) “Share” means a share of the Common Stock, as adjusted in accordance with Section 10 of
the Plan.

          (q) “Subsidiary” means a “subsidiary corporation,” whether now or hereafter existing, as
defined in Section 424(f) of the Internal Revenue Code of 1986.

     3. Stock Subject to the Plan. Subject to the provisions of Section 10 of the Plan, the
maximum aggregate number of Shares which may be optioned and sold under the Plan is 200,000 Shares
of Common Stock (the “Pool”) on a post January 26, 2004 stock split basis. The Shares may be
authorized, but unissued, or reacquired Common Stock.

     If an Option expires or becomes unexercisable without having been exercised in full, the
unpurchased Shares which were subject thereto shall become available for future grant or sale under
the Plan (unless the Plan has terminated). Shares that have actually been issued under the Plan
shall not be returned to the Plan and shall not become available for future distribution under the
Plan.

     4. Administration and Grants of Options under the Plan.

          (a) Procedure for Grants. All grants of Options to Outside Directors under this Plan shall be
automatic and nondiscretionary and shall be made strictly in accordance with the following
provisions:

               (i) No person shall have any discretion to select which Outside Directors shall be granted
Options or to determine the number of Shares to be covered by Options granted to Outside Directors.

               (ii) Each new Outside Director shall be automatically granted an Option to purchase $150,000
in face value of Company stock underlying options based on the closing stock price as reported by
NASDAQ on the day before the grant date (the “First Option”) on the date on which the later of the
following events occurs: (A) the effective date of this Plan, as determined in accordance with
Section 6 hereof, or (B) the date on which such person first becomes an Outside Director, whether
through election by the stockholders of the Company or appointment by the Board to fill a vacancy;
provided, however, that an Inside Director who ceases to be an Inside Director but who remains a
Director shall not receive a First Option.

               (iii) Each Outside Director shall be automatically granted an Option to purchase $40,000 in
face value of Company stock underlying options based on the closing stock price as reported by
NASDAQ on the day before the grant date (a “Subsequent Option”) on the date of the annual meeting
of stockholders of each year provided he or she is then an Outside Director and if as of such date,
he or she shall have served on the Board for at least the preceding six (6) months.

D-2

 

               (iv) Notwithstanding the provisions of subsections (ii) and (iii) hereof, any exercise of an
Option granted before the Company has obtained shareholder approval of the Plan in accordance with
Section 16 hereof shall be conditioned upon obtaining such shareholder approval of the Plan in
accordance with Section 16 hereof.

               (v) The terms of a First Option granted hereunder shall be as follows:

                    (A) the term of the First Option shall be ten (10) years.

                    (B) the First Option shall be exercisable only while the Outside Director remains a Director
of the Company, except as set forth in Sections 8 and 10 hereof.

                    (C) the exercise price per Share shall be 100% of the Fair Market Value per Share on the date
of grant of the First Option. In the event that the date of grant of the First Option is not a
trading day, the exercise price per Share shall be the Fair Market Value on the next trading day
immediately following the date of grant of the First Option.

                    (D) subject to Section 10 hereof, the First Option shall become exercisable as to 1/4th of the
Shares subject to the First Option on the day before the annual meeting of stockholders of each
year or, if no such meeting is held, on each anniversary of the date of grant, provided that the
Optionee continues to serve as a Director on such dates.

               (vi) The terms of a Subsequent Option granted hereunder shall be as follows:

                    (A) the term of the Subsequent Option shall be ten (10) years.

                    (B) the Subsequent Option shall be exercisable only while the Outside Director remains a
Director of the Company, except as set forth in Sections 8 and 10 hereof.

                    (C) the exercise price per Share shall be 100% of the Fair Market Value per Share on the date
of grant of the Subsequent Option. In the event that the date of grant of the Subsequent Option is
not a trading day, the exercise price per Share shall be the Fair Market Value on the next trading
day immediately following the date of grant of the Subsequent Option.

                    (D) subject to Section 10 hereof, the Subsequent Option shall become exercisable as to 1/3 of
the Shares subject to the Subsequent Option on the day before the annual meeting of stockholders of
each year or, if no such meeting is held, on each anniversary of the date of grant, provided that
the Optionee continues to serve as a Director on such dates.

               (vii) In the event that any Option granted under the Plan would cause the number of Shares
subject to outstanding Options plus the number of Shares previously purchased under Options to
exceed the Pool, then the remaining Shares available for Option grant shall be granted under
Options to the Outside Directors on a pro rata basis. No further grants shall be made until such
time, if any, as additional Shares become available for grant under the Plan through action of the
Board or the stockholders to increase the number of Shares which may be issued under the Plan or
through cancellation or expiration of Options previously granted hereunder.

     5. Eligibility. Options may be granted only to Outside Directors. All Options shall be
automatically granted in accordance with the terms set forth in Section 4 hereof.

     The Plan shall not confer upon any Optionee any right with respect to continuation of service
as a Director or nomination to serve as a Director, nor shall it interfere in any way with any
rights which the Director or the Company may have to terminate the Director’s relationship with the
Company at any time.

D-3

 

     6. Term of Plan. The Plan shall become effective upon the earlier to occur of its adoption by
the Board or its approval by the stockholders of the Company as described in Section 16 of the
Plan. It shall continue in effect for a term of ten (10) years unless sooner terminated under
Section 11 of the Plan.

     7. Form of Consideration. The consideration to be paid for the Shares to be issued upon
exercise of an Option, including the method of payment, shall consist of (i) cash, (ii) check,
(iii) other shares which (x) in the case of Shares acquired upon exercise of an Option, have been
owned by the Optionee for more than six (6) months on the date of surrender, and (y) have a Fair Market Value on the date of surrender equal to the aggregate
exercise price of the Shares as to which said Option shall be exercised, (iv) consideration
received by the Company under a cashless exercise program implemented by the Company in connection
with the Plan, or (v) any combination of the foregoing methods of payment.

     8. Exercise of Option.

          (a) Procedure for Exercise; Rights as a Shareholder. Any Option granted hereunder shall be
exercisable at such times as are set forth in Section 4 hereof; provided, however, that no Options
shall be exercisable until shareholder approval of the Plan in accordance with Section 16 hereof
has been obtained.

     An Option may not be exercised for a fraction of a Share.

     An Option shall be deemed to be exercised when written notice of such exercise has been given
to the Company in accordance with the terms of the Option by the person entitled to exercise the
Option and full payment for the Shares with respect to which the Option is exercised has been
received by the Company. Full payment may consist of any consideration and method of payment
allowable under Section 7 of the Plan. Until the issuance (as evidenced by the appropriate entry
on the books of the Company or of a duly authorized transfer agent of the Company) of the stock
certificate evidencing such Shares, no right to vote or receive dividends or any other rights as a
shareholder shall exist with respect to the Optioned Stock, notwithstanding the exercise of the
Option. A share certificate for the number of Shares so acquired shall be issued to the Optionee
as soon as practicable after exercise of the Option. No adjustment shall be made for a dividend or
other right for which the record date is prior to the date the stock certificate is issued, except
as provided in Section 10 of the Plan.

     Exercise of an Option in any manner shall result in a decrease in the number of Shares which
thereafter may be available, both for purposes of the Plan and for sale under the Option, by the
number of Shares as to which the Option is exercised.

          (b) Termination of Continuous Status as a Director. Subject to Section 10 hereof, in the
event an Optionee’s status as a Director terminates (other than upon the Optionee’s death or total
and permanent disability (as defined in Section 22(e)(3) of the Code)), the Optionee may exercise
his or her Option, but only within three (3) months following the date of such termination, and
only to the extent that the Optionee was entitled to exercise it on the date of such termination
(but in no event later than the expiration of its ten (10) year term). To the extent that the
Optionee was not entitled to exercise an Option on the date of such termination, and to the extent
that the Optionee does not exercise such Option (to the extent otherwise so entitled) within the
time specified herein, the Option shall terminate.

          (c) Disability of Optionee. In the event Optionee’s status as a Director terminates as a
result of total and permanent disability (as defined in Section 22(e)(3) of the Code), the Optionee
may exercise his or her Option, but only within twelve (12) months following the date of such
termination, and only to the extent that the Optionee was entitled to exercise it on the date of
such termination (but in no event later than the expiration of its ten (10) year term). To the
extent that the Optionee was not entitled to exercise an Option on the date of termination, or if
he or she does not exercise such Option (to the extent otherwise so entitled) within the time
specified herein, the Option shall terminate.

          (d) Death of Optionee. In the event of an Optionee’s death, the Optionee’s estate or a person
who acquired the right to exercise the Option by bequest or inheritance may exercise the Option,
but only within twelve (12) months following the date of death, and only to the extent that the
Optionee was entitled to exercise it on the date of death (but in no event later than the
expiration of its ten (10) year term). To the extent that the Optionee was not entitled to
exercise an Option on the date of death, and to the extent that the Optionee’s estate or a person
who acquired the right to exercise such

D-4

 

Option does not exercise such Option (to the extent
otherwise so entitled) within the time specified herein, the Option shall terminate.

     9. Non-Transferability of Options. Unless otherwise determined by the Board, the Option may
not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner other than
by will or by the laws of descent or distribution and may be exercised, during the lifetime of the
Optionee, only by the Optionee.

     10. Adjustments Upon Changes in Capitalization, Dissolution, Merger or Asset Sale.

          (a) Changes in Capitalization. Subject to any required action by the stockholders of the
Company, the number of Shares covered by each outstanding Option, the number of Shares which have
been authorized for issuance under the Plan but as to which no Options have yet been granted or
which have been returned to the Plan upon cancellation or expiration of an Option, as well as the
price per Share covered by each such outstanding Option, and the number of Shares issuable pursuant
to the automatic grant provisions of Section 4 hereof shall be proportionately adjusted for any
increase or decrease in the number of issued Shares resulting from a stock split, reverse stock
split, stock dividend, combination or reclassification of the Common Stock, or any other increase
or decrease in the number of issued Shares effected without receipt of consideration by the
Company; provided, however, that conversion of any convertible securities of the Company shall not
be deemed to have been “effected without receipt of consideration.” Except as expressly provided
herein, no issuance by the Company of shares of stock of any class, or securities convertible into
shares of stock of any class, shall affect, and no adjustment by reason thereof shall be made with
respect to, the number or price of Shares subject to an Option.

          (b) Dissolution or Liquidation. In the event of the proposed dissolution or liquidation of
the Company, to the extent that an Option has not been previously exercised, it shall terminate
immediately prior to the consummation of such proposed action.

          (c) Merger or Asset Sale. In the event of a merger of the Company with or into another
corporation or the sale of substantially all of the assets of the Company, outstanding Options may
be assumed or equivalent options may be substituted by the successor corporation or a Parent or
Subsidiary thereof (the “Successor Corporation”). If an Option is assumed or substituted for, the
Option or equivalent option shall continue to be exercisable as provided in Section 4 hereof for so
long as the Optionee serves as a Director or a director of the Successor Corporation. Following
such assumption or substitution, if the Optionee’s status as a Director or director of the
Successor Corporation, as applicable, is terminated other than upon a voluntary resignation by the
Optionee, the Option or option shall become fully exercisable, including as to Shares for which it
would not otherwise be exercisable. Thereafter, the Option or option shall remain exercisable in
accordance with Sections 8(b) through (d) above.

     If the Successor Corporation does not assume an outstanding Option or substitute for it an
equivalent option, the Option shall become fully vested and exercisable, including as to Shares for
which it would not otherwise be exercisable. In such event the Board shall notify the Optionee
that the Option shall be fully exercisable for a period of ninety (90) days from the date of such
notice, and upon the expiration of such period the Option shall terminate.

     For the purposes of this Section 10(c), an Option shall be considered assumed if, following
the merger or sale of assets, the Option confers the right to purchase or receive, for each Share
of Optioned Stock subject to the Option immediately prior to the merger or sale of assets, the
consideration (whether stock, cash, or other securities or property) received in the merger or sale
of assets by holders of Common Stock for each Share held on the effective date of the transaction
(and if holders were offered a choice of consideration, the type of consideration chosen by the
holders of a majority of the outstanding Shares). If such consideration received in the merger or
sale of assets is not solely common stock of the successor corporation or its Parent, the
Administrator may, with the consent of the successor corporation, provide for the consideration to
be received upon the exercise of the Option, for each Share of Optioned Stock subject to the
Option, to be solely common stock of the successor corporation or its Parent equal in fair market
value to the per share consideration received by holders of Common Stock in the merger or sale of
assets.

     11. Amendment and Termination of the Plan.

D-5

 

          (a) Amendment and Termination. The Board may at any time amend, alter, suspend, or
discontinue the Plan, but no amendment, alteration, suspension, or discontinuation shall be made
which would impair the rights of any Optionee under any grant theretofore made, without his or her
consent. In addition, to the extent necessary and desirable to comply with any applicable law,
regulation or stock exchange rule, the Company shall obtain shareholder approval of any Plan
amendment in such a manner and to such a degree as required.

          (b) Effect of Amendment or Termination. Any such amendment or termination of the Plan shall
not affect Options already granted and such Options shall remain in full force and effect as if
this Plan had not been amended or terminated.

     12. Time of Granting Options. The date of grant of an Option shall, for all purposes, be the
date determined in accordance with Section 4 hereof.

     13. Conditions Upon Issuance of Shares. Shares shall not be issued pursuant to the exercise
of an Option unless the exercise of such Option and the issuance and delivery of such Shares
pursuant thereto shall comply with all relevant provisions of law, including, without limitation,
the Securities Act of 1933, as amended, the Exchange Act, the rules and regulations promulgated
thereunder, state securities laws, and the requirements of any stock exchange upon which the Shares
may then be listed, and shall be further subject to the approval of counsel for the Company with
respect to such compliance.

     As a condition to the exercise of an Option, the Company may require the person exercising
such Option to represent and warrant at the time of any such exercise that the Shares are being
purchased only for investment and without any present intention to sell or distribute such Shares,
if, in the opinion of counsel for the Company, such a representation is required by any of the
aforementioned relevant provisions of law.

     Inability of the Company to obtain authority from any regulatory body having jurisdiction,
which authority is deemed by the Company’s counsel to be necessary to the lawful issuance and sale
of any Shares hereunder, shall relieve the Company of any liability in respect of the failure to
issue or sell such Shares as to which such requisite authority shall not have been obtained.

     14. Reservation of Shares. The Company, during the term of this Plan, will at all times
reserve and keep available such number of Shares as shall be sufficient to satisfy the requirements
of the Plan.

     15. Option Agreement. Options shall be evidenced by written option agreements in such form as
the Board shall approve.

     16. Shareholder Approval. Continuance of the Plan shall be subject to approval by the
stockholders of the Company at or prior to the first annual meeting of stockholders held subsequent
to the granting of an Option hereunder. Such shareholder approval shall be obtained in the degree
and manner required under applicable state and federal law and any stock exchange rules.

D-6

 

TASER INTERNATIONAL, INC.

2004 DIRECTOR STOCK OPTION PLAN

DIRECTOR OPTION AGREEMENT

     TASER International, Inc., a Delaware corporation (the “Company”), has granted to ___
(the “Optionee”), an option to purchase a total of [___(___)] shares of the Company’s
Common Stock (the “Optioned Stock”), at the price determined as provided herein, and in all
respects subject to the terms, definitions and provisions of the Company’s 2004 Director Stock
Option Plan (the “Plan”) adopted by the Company which is incorporated herein by reference. The
terms defined in the Plan shall have the same defined meanings herein.

     1. Nature of the Option. This Option is a nonstatutory option and is not intended to qualify
for any special tax benefits to the Optionee.

     2. Exercise Price. The exercise price is $___for each share of Common Stock.

     3. Exercise of Option. This Option shall be exercisable during its term in accordance with
the provisions of Section 8 of the Plan as follows:

          (a) Right to Exercise.

               (i) This Option shall become exercisable in installments cumulatively with respect to 1/4th of
the Shares subject to the Option on the day before the annual meeting of stockholders of each year
or, if no such meeting is held, on each anniversary of the date of grant, provided that the
Optionee continues to serve as a Director on such dates; provided, however, that in no event shall
any Option be exercisable prior to the date the stockholders of the Company approve the Plan.

               (ii) This Option may not be exercised for a fraction of a share.

               (iii) In the event of Optionee’s death, disability or other termination of service as a
Director, the exercisability of the Option is governed by Section 8 of the Plan.

          (b) Method of Exercise. This Option shall be exercisable by written notice which shall state
the election to exercise the Option and the number of Shares in respect of which the Option is
being exercised. Such written notice, in the form attached hereto as Exhibit A, shall be signed by
the Optionee and shall be delivered in person or by certified mail to the Secretary of the Company.
The written notice shall be accompanied by payment of the exercise price.

     4. Method of Payment. Payment of the exercise price shall be by any of the following, or a
combination thereof, at the election of the Optionee:

          (a) cash;

          (b) check;

          (c) surrender of other shares which (x) in the case of Shares acquired upon exercise of an
Option, have been owned by the Optionee for more than six (6) months on the date of surrender, and
(y) have a Fair Market Value on the date of surrender equal to the aggregate exercise price of the
Shares as to which said Option shall be exercised; or

          (d) delivery of a properly executed exercise notice together with such other documentation as
the Company and the broker, if applicable, shall require to effect an exercise of the Option and
delivery to the Company of the sale or loan proceeds required to pay the exercise price.

 

 

     5. Restrictions on Exercise. This Option may not be exercised if the issuance of such Shares
upon such exercise or the method of payment of consideration for such shares would constitute a
violation of any applicable federal or state securities or other law or regulations, or if such
issuance would not comply with the requirements of any stock exchange upon which the Shares may
then be listed. As a condition to the exercise of this Option, the Company may require Optionee to
make any representation and warranty to the Company as may be required by any applicable law or
regulation.

     6. Non-Transferability of Option. This Option may not be transferred in any manner otherwise
than by will or by the laws of descent or distribution and may be exercised during the lifetime of
Optionee only by the Optionee. The terms of this Option shall be binding upon the executors,
administrators, heirs, successors and assigns of the Optionee.

     7. Term of Option. This Option may not be exercised more than ten (10) years from the date of
grant of this Option, and may be exercised during such period only in accordance with the Plan and
the terms of this Option.

     8. Taxation Upon Exercise of Option. Optionee understands that, upon exercise of this Option,
he or she will recognize income for tax purposes in an amount equal to the excess of the then Fair
Market Value of the Shares purchased over the exercise price paid for such Shares. Since the
Optionee is subject to Section 16(b) of the Securities Exchange Act of 1934, as amended, under
certain limited circumstances the measurement and timing of such income (and the commencement of
any capital gain holding period) may be deferred, and the Optionee is advised to contact a tax
advisor concerning the application of Section 83 in general and the availability of a Section 83(b)
election in particular in connection with the exercise of the Option. Upon a resale of such Shares
by the Optionee, any difference between the sale price and the Fair Market Value of the Shares on
the date of exercise of the Option, to the extent not included in income as described above, will
be treated as capital gain or loss.

	 	 	 	 	 
	Date of Grant: 	TASER INTERNATIONAL, INC.,

a Delaware corporation

 	 
	 	By:  	 	 
	 	 	 	 
	 	 	 	 
	 

     Optionee acknowledges receipt of a copy of the Plan, a copy of which is attached hereto, and
represents that he or she is familiar with the terms and provisions thereof, and hereby accepts
this Option subject to all of the terms and provisions thereof. Optionee hereby agrees to accept
as binding, conclusive and final all decisions or interpretations of the Board upon any questions
arising under the Plan.

	 	 	 	 	 	 	 
	Dated:

	 	 
	 	Optionee
	 	 
	 

	 	 
	 	 	 	 

-2-

 

EXHIBIT A

DIRECTOR OPTION EXERCISE NOTICE

TASER International, Inc.

Attention: Corporate Secretary

     1. Exercise of Option. The undersigned (“Optionee”) hereby elects to exercise Optionee’s
option to purchase shares of the Common Stock (the “Shares”) of TASER International, Inc.
(the “Company”) under and pursuant to the Company’s 2004 Director Stock Option Plan and the
Director Option Agreement dated                      (the “Agreement”).

     2. Representations of Optionee. Optionee acknowledges that Optionee has received, read and
understood the Agreement.

     3. Federal Restrictions on Transfer. Optionee understands that the Shares must be held
indefinitely unless they are registered under the Securities Act of 1933, as amended (the “1933
Act”), or unless an exemption from such registration is available, and that the certificate(s)
representing the Shares may bear a legend to that effect. Optionee understands that the Company is
under no obligation to register the Shares and that an exemption may not be available or may not
permit Optionee to transfer Shares in the amounts or at the times proposed by Optionee.

     4. Tax Consequences. Optionee understands that Optionee may suffer adverse tax consequences
as a result of Optionee’s purchase or disposition of the Shares. Optionee represents that Optionee
has consulted with any tax consultant(s) Optionee deems advisable in connection with the purchase
or disposition of the Shares and that Optionee is not relying on the Company for any tax advice.

     5. Delivery of Payment. Optionee herewith delivers to the Company the aggregate purchase
price for the Shares that Optionee has elected to purchase and has made provision for the payment
of any federal or state withholding taxes required to be paid or withheld by the Company.

     6. Entire Agreement. The Agreement is incorporated herein by reference. This Exercise Notice
and the Agreement constitute the entire agreement of the parties and supersede in their entirety
all prior undertakings and agreements of the Company and Optionee with respect to the subject
matter hereof. This Exercise Notice and the Agreement are governed by Delaware law except for that
body of law pertaining to conflict of laws.

	 	 	 	 	 	 	 
	Submitted by:	 	 	 	Accepted by:  
	 
	 	 	 	 	 	 
	OPTIONEE:	 	 	 	TASER INTERNATIONAL, INC.
	 
	 	 	 	 	 	 
	 

	 	 	 	By:	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	Its:	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	Address:	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Dated:

	 	 	 	Dated:	 	 
	 

	 	 
	 	 	 	 

-3-Exhibit 10.2

    MUTUAL
      RESCISSION AND RELEASE AGREEMENT

     

    THIS
      MUTUAL RESCISSION AND RELEASE AGREEMENT
      (the
“Rescission Agreement”),
      is made
      and entered into March 12, 2007, by and among Edulink, Inc., a Nevada
      corporation with its principal place of business located at 201 Wilshire Blvd,
      Santa Monica, California 90401 (“Edulink"); a majority of Edulink shareholders
      listed on Schedule A attached hereto and made a part hereof (the “Edulink
      Shareholders”); Mega Media Group, Inc., a New York Corporation with its
      principal place of business located at 598 Broadway, 3rd
      Floor,
      New York, NY 10012
      ("Mega
      Media”) and the Mega Media shareholders listed on Schedule B attached hereto and
      made a part hereof (“MM Shareholders”) (collectively, Mega Media and the MM
      Shareholders shall be known as the “MM Group”).

    

    Premises

    

    A.  Pursuant
      to that certain Stock Purchase Agreement and Share Exchange by and among Edulink
      and the MM Group dated August 10, 2006 (the "Exchange Agreement"), which closed
      on August 11, 2006 (the “Effective Time”), Edulink acquired all of the
      outstanding common stock of Mega Media and Mega Media became a wholly-owned
      subsidiary of Edulink (the “Reverse Merger”). No shares of Edulink were issued
      to the MM Group. 

    

    B.  Notwithstanding
      anything to the contrary contained in the Exchange Agreement, this Rescission
      Agreement shall constitute an amendment to the Exchange Agreement. Any
      capitalized term used herein and not defined herein shall have the same meaning
      ascribed to such term in the Exchange Agreement.

    

    C.  Contemporaneously
      with the execution of the Exchange Agreement, certain Edulink shareholders
      listed on Schedule B attached hereto and made a part hereof delivered to the
      MM
      Group duly executed irrevocable proxies.

    

    D.  On
      or
      about August 28, 2006 (the “Suspension Date”), the Securities and Exchange
      Commission (SEC) suspended trading of Edulink's common stock because Edulink
      was
      delinquent in filing its 1934 Exchange Act filings for several years prior
      to
      the Reverse Merger (the “Trading Suspension”). After the Suspension Date,
      Edulink's prior management disclosed for the first time to Mega Media and
      Edulink's new executive officers and directors that there was an outstanding
      comment letter from the SEC issued prior to the Merger that warned of probable
      suspension of trading. As a consequence of the Trading Suspension and draining
      much of its resources to bring all of Edulink’s filings current, Mega Media has
      not been able to carry out its business plan and cannot effectively do so while
      Edulink still allocates its personnel and financial resources to matters
      relating to ongoing filings required by the SEC. 

    

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

    E.  The
      Board
      of Directors of each of Edulink and Mega Media have each mutually agreed to
      and
      determined that is fair to and in the best interests of their respective
      corporations and shareholders to rescind the Exchange Agreement and unwind
      the
      Reverse Merger and the transactions contemplated thereby as if they never
      occurred, upon the terms and subject to the conditions set forth in this
      Rescission Agreement.

    

    F.  A
      majority of each of the Edulink shareholders and MM Shareholders has approved
      by
      written consent this Rescission Agreement and the transactions contemplated
      and
      described hereby and thereby, including without limitation to rescind the
      Exchange Agreement and unwind the Reverse Merger and the transactions
      contemplated thereby as if they never occurred, upon the terms and subject
      to
      the conditions set forth in this Rescission Agreement.

    

    G.  Effective
      ab
      initio,
      and
      subject to the terms set forth herein, each of Edulink, Edulink Shareholders,
      Mega Media and the MM Shareholders mutually agree to rescind the Exchange
      Agreement and unwind the Reverse Merger and the transactions contemplated
      thereby, upon the terms and subject to the conditions set forth in this
      Rescission Agreement.

    

    Agreement

    

    NOW,
      THEREFORE,
      for good
      and valuable consideration, the receipt and sufficiency of which is hereby
      acknowledged, and in order to avoid the cost of litigation among the parties,
      the parties hereby acknowledge that there are certain breaches of warranties
      and
      representations of the Exchange Agreement as set forth in Paragraph D above,
      and
      agree as follows:

    

    1.  Rescission.Effective
      ab
      initio,
      the
      Exchange Agreement, in its entirety, is hereby unequivocally rescinded,
      abrogated, cancelled, void in its inception and of no force or effect
      whatsoever, and the parties shall be returned to their positions prior to the
      Exchange Agreement and Reverse Merger. Upon completion of the deliveries set
      forth in Section 2 below, the obligations of all parties shall be terminated
      and
      the Reverse Merger and the transactions contemplated thereby unwound and voided
      as if the Exchange Agreement was never entered into and the Reverse Merger
      never
      occurred. All agreements entered into as contemplated by the Exchange Agreement,
      including but not limited to the Edulink Shareholder’s Irrevocable Proxy’s, are
      terminated effective ab
      initio.

    

    2.  Deliveries.Within
      five (5) business days of the execution of this Rescission Agreement, the
      following shall occur:

    

    (a) Edulink
      shall deliver to Mega Media all of the outstanding common stock of Mega Media
      (the "MM Shares"), which was issued under the Exchange Agreement, thereby
      separating Mega Media from Edulink; and

    

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    (b) Mega
      Media shall deliver to Edulink resignations from the Edulink officers and
      directors appointed in the Exchange Agreement. 

    

    3.  Termination
      of Liability.Neither
      party shall have any liability or obligation whatsoever to the other party
      under
      the Exchange Agreement, Reverse Merger and the transactions contemplated
      thereby.

     

    4.  Release.

    

    (a) Edulink,
      its subsidiaries, successors, assigns, divisions, affiliates and past and
      present officers, directors, employees and agents, hereby release, remise and
      discharge MM Group, all corporations or other entities owned or controlled
      by MM
      Group or in which MM Group have an interest, and MM Group’s past and present
      officers, directors, employees, agents, attorneys, accountants, representatives,
      successors and assigns (collectively the "MM Group Releasees”) from any and all
      claims, debts, losses, covenants, agreements, contracts, liabilities,
      obligations, accounts, expenses, actions, causes of action and suits, whether
      past, present or future, known or unknown, at law or in equity, of whatever
      kind
      or nature whatsoever, which Edulink and the other parties noted above now have,
      own or hold, or have at any time heretofore had, owned or held, or may at any
      time hereafter have, own or hold against the MM Group Releasees by reason of
      any
      fact, matter, cause or thing whatsoever arising from or in connection with
      the
      Agreement, matters related thereto, and the operations of Edulink (i) from
      the
      beginning of the world until the Closing Date, and (ii) from the date hereof
      and
      continuing in perpetuity (and specifically excluding the period from August
      11,
      2006 through the date of this agreement). 

     

    (b)
      MM
      Group,
      its subsidiaries, successors, assigns, divisions, affiliates and past and
      present officers, directors, employees and agents, hereby release, remise and
      discharge Edulink, all corporations or other entities owned or controlled by
      Edulink or in which Edulink have an interest, and Edulink’s past and present
      officers, directors, employees, agents, attorneys, accountants, representatives,
      successors and assigns (collectively the Edulink “Releasees”) from any and all
      claims, debts, losses, covenants, agreements, contracts, liabilities,
      obligations, accounts, expenses, actions, causes of action and suits, whether
      past, present or future, known or unknown, at law or in equity, of whatever
      kind
      or nature whatsoever, which MM Group and the other parties noted above now
      have,
      own or hold, or have at any time heretofore had, owned or held, or may at any
      time hereafter have, own or hold against the Edulink Releasees by reason of
      any
      fact, matter, cause or thing whatsoever arising from or in connection with
      the
      Agreement, matters related thereto, and the operations of Edulink from August
      11, 2006 through the date of this agreement.

    

    5.  Representations.

    

    (a)
      Each
      party has all requisite corporate power and authority to enter into and perform
      this Rescission Agreement and to consummate the transactions contemplated
      hereby.

    

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    (b)
      Each
      party hereby agrees to indemnify and defend the other parties and their
      directors and officers and hold them harmless from and against any and all
      liability, damage, cost or expense incurred on account of or arising out of
      the
      actions of an indemnifying party for:

    

    (i)
      Any
      breach of or inaccuracy in representations, warranties or agreements
      herein;

    

    (ii)
      Any
      action, suit or proceeding based on a claim that any of said representations,
      warranties or agreements were inaccurate or misleading or otherwise cause for
      obtaining damages or redress from an indemnifying party or any of its directors
      or officers.

    

    (c)
      The
      representations, warranties and agreements contained in this Rescission
      Agreement shall be binding on each party’s successors, assigns, heirs and legal
      representatives and shall inure to the benefit of the respective successors
      and
      assigns of the other parties.

    

    6.  Time
      of the Essence.The
      parties agree and stipulate that time is of the essence with respect to
      compliance with each and every item set forth in this Rescission
      Agreement.

    

    7.  Confidentiality.
      Each
      party hereto agrees with the other party that, unless and until the transactions
      contemplated by this Rescission Agreement have been consummated, they and their
      representatives will hold in strict confidence all data and information obtained
      with respect to another party or any subsidiary thereof from any representative,
      officer, director or employee, or from any books or records or from personal
      inspection, of such other party, and shall not use such data or information
      or
      disclose the same to others, except: (i) to the extent such data is a matter
      of
      public knowledge or is required by law to be published; and (ii) to the extent
      that such data or information must be used or disclosed in order to consummate
      the transactions contemplated by this Rescission Agreement.

    

    8.  Joint
      Press Release/Publicity.Edulink
      and Mega Media will mutually agree on the issuance of a joint press release
      in
      regards to this Rescission Agreement. Except as required by law, no
      party
      shall issue any other press releases or make any public announcement or filing,
      except for the Form 8-K referenced in Section 9 below,
      regarding this Rescission Agreement and the transactions provided for herein
      without the prior written consent of the other.

    

    9.  Report
      on Form 8-K.The
      parties agree that Edulink will file a Form 8-K with the SEC within four (4)
      days of the date
      first above written reporting this Rescission Agreement and the Joint Press
      Release referenced in Section 8 above.

    

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    10.  Survival;
      Termination.
      The
      representations, warranties and covenants of the respective parties shall
      survive the Closing Date and the consummation of the transactions herein
      contemplated for 18 months.

    

    11.  Counterparts
      and Fax Signatures.
      This
      Rescission Agreement may be executed by fax signature and in multiple
      counterparts, each of which shall be deemed an original and all of which taken
      together shall be deemed a single instrument. 

    

    12.  Headings;
      Context.
      The
      headings of the sections and paragraphs contained in this Rescission Agreement
      are for convenience of reference only and do not form a part hereof and in
      no
      way modify, interpret or construe the meaning of this Rescission
      Agreement.

    

    13.  Benefit.
      This
      Rescission Agreement shall be binding upon and shall inure only to the benefit
      of the parties hereto, and their permitted assigns hereunder. This Rescission
      Agreement shall not be assigned by any party without the prior written consent
      of the other party. 

    

    14.  Severability.
      In the
      event that any particular provision or provisions of this Rescission Agreement
      or the other agreements contained herein shall for any reason hereafter be
      determined to be unenforceable, or in violation of any law, governmental order
      or regulation, such unenforceability or violation shall not affect the remaining
      provisions of such agreements, which shall continue in full force and effect
      and
      be binding upon the respective parties hereto.

    

    15.  No
      Strict Construction. The
      language of this Rescission Agreement shall be construed as a whole, according
      to its fair meaning and intendment, and not strictly for or against any party
      hereto, regardless of who drafted or was principally responsible for drafting
      the Rescission Agreement or terms or conditions hereof.

    

    16.  Execution
      Knowing and Voluntary.
      In
      executing this Rescission Agreement, the parties severally acknowledge and
      represent that each: (a) has fully and carefully read and considered this
      Rescission Agreement; (b) has been or has had the opportunity to be fully
      apprized by its attorneys of the legal effect and meaning of this document
      and
      all terms and conditions hereof; (c) is executing this Rescission Agreement
      voluntarily, free from any influence, coercion or duress of any
      kind.

    

    17.  Attorneys’
      Fees.In
      the
      event that any party institutes any action or suit to enforce this Agreement
      or
      to secure relief from any default hereunder or breach hereof, the breaching
      party or parties shall reimburse the non-breaching party or parties for all
      costs, including reasonable attorneys' fees, incurred in connection therewith
      and in enforcing or collecting any judgment rendered therein. 

    

    18.  Governing
      Law, Forum and Consent to Jurisdiction.
      This
      Rescission Agreement shall be construed, interpreted and governed in accordance
      with the laws of the State of New York. Each of the parties hereto hereby
      irrevocably and unconditionally submits for itself and its property in any
      legal
      action or proceeding relating to or arising in connection with this Rescission
      Agreement to the exclusive general jurisdiction of the Courts of the State
      of
      New York, the courts of the United States of America for the Southern District
      of New York, and the appellate courts of any of the foregoing.

    

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    19.  Entire
      Agreement. This
      Rescission Agreement represents the entire agreement between the parties
      relating to the subject matter hereof and supersedes any prior oral or written
      agreements or undertakings between the parties to such matters. This Rescission
      Agreement alone fully and completely expresses the agreement of the parties
      relating to the subject matter hereof. There are no other courses of dealing,
      understanding, agreements, representations or warranties, written or oral,
      except as set forth herein. This Rescission Agreement may not be amended,
      canceled, revoked or otherwise modified except by written agreement executed
      by
      all of the parties hereto.

    

    

    

    

    [Remainder
      of Page Intentionally Blank]

    

    [Signature
      Pages Follow]

     

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF,
      the
      parties hereto have caused this Rescission Agreement to be executed by their
      respective duly authorized officers or representatives and entered into as
      of
      the date first above written.

     

    
      	
              ATTEST:

            	
              EDULINK,
                INC.

            
	 	 
	
              ___________________________

            	
              By:

            	
              /s/
Michael
                Rosenfeld

            
	 	
              Name:

            	
              Michael
                Rosenfeld

            
	 	
              Title:

            	
              Chief
                Executive Officer

            

    

    

    
      	
              ATTEST:

            	
              MEGA
                MEDIA GROUP, INC.

            
	 	 
	
              ___________________________

            	
              By:

            	
              /s/
                Aleksandr
                Shvarts

            
	 	
              Name:

            	
              Aleksandr
                Shvarts

            
	 	 	
              Chief
                Executive Officer

            

    

    

    

    

    Edulink
      Shareholders:

    

    
      	
              /s/
                Michael
                Rosenfeld

            	 	
              /s/
Stanley
                Merdinger

            
	
              Michael
                Rosenfeld

            	 	
              Stanley
                Merdinger

            
	 	 	 
	
              /s/Boris
                Berenfeld

            	 	
              /s/
                Natalie
                Merdinger

            
	
              Boris
                Berenfeld

            	 	
              Natalie
                Merdinger

            
	 	 	 
	
              /s/
                Ian
                Rescigno

            	 	
              /s/
Jerry
                Hanley 

            
	
              Ian
                Rescigno

            	 	
              Jerry
                Hanley 

            
	 	 	 
	
              /s/ 
                Ronald
                Rescigno

            	 	
              /s/
                Rip
                Gerber

            
	
              Ronald
                Rescigno

            	 	
              Rip
                Gerber

            
	 	 	 
	
              /s/
                Robert
                Rescigno

            	 	
              /s/
                Louis
                Capannelli

            
	
              Robert
                Rescigno

            	 	
              Louis
                Capannelli

            
	 	 	 
	
              /s/
                Joe
                Pikulski

            	 	
              /s/
                Paula
                Cruz Takash

            
	
              Joe
                Pikulski

            	 	
              Paula
                Cruz Takash

            

    

     

    

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

     

    Mega
      Media Shareholders:

     

    

    
      	
              /s/
Aleksandr
                Shvarts

            	 	
              /s/
Dr.
                Lev Paukman

            
	
              Aleksandr
                Shvarts, on behalf of himself and the individuals listed on Schedule
                C
                attached hereto and made a part hereof

            	 	
              Dr.
                Lev Paukman

            
	
               

              /s/
Alex
                Puzaitzer

            	 	
               

              /s/
Elan
                Kaufman

            
	
              Alex
                Puzaitzer

            	 	
              Elan
                Kaufman

            
	 	 	 
	
              /s/Boris
                Motovich

            	 	
              /s/
Eric
                Schwartz

            
	
              Boris
                Motovich

            	 	
              Eric
                Schwartz

            
	
               

              /s/
Boris
                Tantsky 

            	
            	
              /s/
Gennady
                Pomeranets

            
	
              Boris
                Tantsky 

            	 	
              Gennady
                Pomeranets

            
	
               

              /s/
Danny
                Vinokur

            	 	
               

              /s/
Richard
                Larson

            
	
              Danny
                Vinokur

            	 	
              Richard
                Larson

            
	
              /s/
David
                Kokakis, Esq. 

            	 	
               

              /s/
Julia
                Milne

            
	
              David
                Kokakis, Esq. 

            	 	
              Julia
                Milne

            
	
               

              /s/
Karo
                Osipov

            	 	
              /s/
Michael
                Kaufman

            
	
              Karo
                Osipov

            	 	
              Michael
                Kaufman

            
	 	 	 
	
              FD
                IMPORT

            	 	
              MATRIX
                ALLIANCE

            
	
               

              By:  
                /s/  StevenFruman

            	 	
               

              By: 
                /s/ Arik
                Kislin;

            
	
              Name: 
                Steven
                Fruman

            	 	
              Name:
                Arik
                Kislin;

            

    

    

     

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    Schedule
      A

     

    

    Edulink
      Shareholders

    

     

    

     

    
      	
              Michael
                Rosenfeld

            
	
              Boris
                Berenfeld

            
	
              Ian
                Rescigno

            
	
              Ronald
                Rescigno

            
	
              Robert
                Rescigno

            
	
              Joe
                Pikulski

            
	
              Stanley
                Merdinger

            
	
              Natalie
                Merdinger

            
	
              Rip
                Gerber 

            
	
              Jerry
                Hanley 

            
	
              Louis
                Cappanelli

            
	
              Paula
                Cruz Takash

            

    

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    Schedule
      B

    

    Mega
      Media Shareholders

    

    

    

    
      	
              Aleksandr
                Shvarts

            
	
              Alex
                Puzaitzer

            
	
              Andre
                Anekeyev

            
	
              Andrew
                Furhman

            
	
              Andy
                Tavel

            
	
              Anna
                Perkerman

            
	
              Annette
                Sharvit

            
	
              Boris
                Motovich

            
	
              Boris
                Tantsky

            
	
              Danny
                Vinokur

            
	
              David
                Kokakis

            
	
              Dr.
                Lev Paukman

            
	
              Elan
                Kaufman

            
	
              Eric
                Schwartz

            
	
              Fd
                Import

            
	
              Galina
                Goldberg

            
	
              Gennady
                Pomeranets

            
	
              Kirill
                Zadov

            
	
              Marina
                Stronkin

            
	
              Matrix
                Alliance

            
	
              Michael
                Koblenz

            
	
              Michael
                Kaufman

            
	
              Michael
                Novakhov

            
	
              Mikhail
                Bouzoukashvilli

            
	
              Moshe
                Soloway 

            
	
              Nicole
                Caracappa

            
	
              Olena
                Ahafonova

            
	
              Ric
                Aliberti

            
	
              Richard
                Larson

            
	
              Julia
                Milne

            
	
              Viktor
                Lushin

            
	
              Vldimir
                Grjonko

            
	
              Yevgeny
                Morgovsky

            
	
              Yuri
                Pirags

            
	
              Yuriy
                Avezov

            

    

    

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    Schedule
      C

    

    Mega
      Media Shareholders - Proxies

    

    
      	 
	
              Andy
                Tavel

            
	
              Galina
                Goldberg

            
	
              Kirill
                Zadov

            
	
              Michael
                Novakhov

            
	
              Mikhail
                Bouzoukashvilli

            
	
              Nicole
                Caracappa

            
	
              Viktor
                Lushin

            
	
              Vldimir
                Grjonko

            
	
              Yevgeny
                Morgovsky

            
	
              Yuriy
                Avezov

            
	
              Yuri
                Pirag

            
	
              Charles
                Suitt

            

    

    
 

     

    11

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00119-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00119-of-00352.parquet"}]]