Exhibit 10.34
May 26, 2000
Via Hand Delivery
-----------------
Xxxx Xxxxxx
000 Xxxxxxxx Xxxxxx
Xxx Xxxxx, XX 00000
Re: Consulting Services and Resignation Agreement
---------------------------------------------
Dear Bart:
Pursuant to our Memorandum of Understanding dated May 4, 2000, this letter
sets forth the terms of our agreement (the "Agreement") regarding (a) your
resignation of your employment with CrossWorlds Software, Inc. ("CrossWorlds")
and (b) your provision of consulting services to CrossWorlds until November 2,
2000, and related issues.
1. Resignation. You have resigned your positions as an employee and an
-----------
officer of CrossWorlds, effective May 1, 2000.
2. Consulting Services.
-------------------
Commencing May 2, 2000 and continuing until November 2, 2000 (the
"Consulting Period"), you will provide consulting services to CrossWorlds as an
independent contractor (the "Services"). The Services will consist of advice on
business development and marketing matters, and working with CrossWorlds
employees to implement business development and marketing matters, upon request
by CrossWorlds. More specifically:
a. You will make available to CrossWorlds at least twenty (20) hours
of Services per week from May 2 until August 2, 2000 (the "Initial
Period"); and
b. You will make available to CrossWorlds the reduced amount of ten
(10) hours of Services per week from August 3, 2000 until
November 2, 2000 (the "Subsequent Period").
3. Compensation.
------------
a. During the Initial Period, CrossWorlds will pay you consulting
fees, on a bimonthly basis, at the rate of $21,875 per month; and
b. During the Subsequent Period, CrossWorlds will pay you consulting
fees, on a bimonthly basis, at the rate of $10,938 per month.
-1-
4. Stock Options.
-------------
a. During the Initial Period, you will continue to vest in the options
granted you as of May 1, 2000 under the 1997 Stock Plan and the
1999 Executive Stock Plan, in accordance with the terms of your
stock option agreements;
b. At the end of the Consulting Period, you will have a 30- or 90-day
period (depending on the stock option agreement and Stock Plan
applicable to the relevant grant) in which to exercise your vested
options under the 1997 Stock Plan and the 1999 Executive Stock
Plan.
5. COBRA Benefits.
--------------
If you are eligible for and elect COBRA coverage, then commencing May 2,
2000 and continuing until the earlier of November 2, 2000 or the date you begin
working full-time as an employee or consultant for a third party (the "Reduced
Services Point"), CrossWorlds will pay your premiums under federal COBRA law for
medical, dental and vision coverage (including premiums for your spouse and/or
dependents to the extent that you covered your spouse and/or dependents under
CrossWorlds' medical, dental and/or vision coverage as of May 1, 2000).
CrossWorlds shall have no obligation to make any additional payments in
connection with such COBRA coverage after the Reduced Services Point.
6. Loan.
----
a. With respect to CrossWorlds' loan to you of $150,000, as reflected
in the Secured Loan Agreement made as of November 15, 1999 (the
"Loan"), you and CrossWorlds each acknowledge that the principal
amount of the Loan as of the date of this Agreement is $125,000.
b. You and CrossWorlds each acknowledge and agree that in January 2000
they reached an understanding that the Loan would be amended as
follows: (i) 1/24, or $6250, of the principal amount of the Loan
and any accrued interest would be forgiven each month for 24
months, assuming your continued employment with CrossWorlds, with
the first forgiveness occurring on February 1, 2000; (ii) upon a
Change of Control of CrossWorlds during your employment at
CrossWorlds, the Loan would be forgiven entirely (where "Change of
Control" means a sale of all or substantially all of CrossWorlds'
assets, or a merger, consolidation or other capital reorganization
of CrossWorlds with or into another corporation, or any other
transaction or series of related transactions in which CrossWorlds'
stockholders immediately prior thereto own less than 50% of the
voting stock of CrossWorlds (or its successor or parent)
immediately thereafter); (iii) your obligation to pay down the
principal of the Loan as you sell shares of CrossWorlds under
section 1(B) of Exhibit A to the Secured Loan Agreement would be
deleted; (iv) the security interest in your principal residence
provided for under section 5 and Exhibit B of the Secured Loan
Agreement would be removed; (v) a
-2-
conforming change would be made to extend the term of the Loan to
January 1, 2002; and (vi) the interest rate of the Loan was amended
to be 5.88% per annum, compounded annually. You and CrossWorlds
each agree to more fully document the Loan as described and
modified by this section 6.b., by executing further definitive
documents.
c. During the Consulting Period, CrossWorlds shall continue
forgiveness of the Loan at the rate of $6250 per month, plus
accrued interest, as of the first day of each month.
d. CrossWorlds agrees to defer your obligation to repay the Loan upon
termination of employment with CrossWorlds, until December 31,
2000. You agree to pay the principal amount (as reduced pursuant to
this Agreement) and any accrued interest to CrossWorlds no later
than December 31, 2000.
7. Expense Reimbursements. You agree to promptly submit final expense
----------------------
reimbursement requests for all business expenses you incurred through May 1,
2000 for which you seek reimbursement, if any. CrossWorlds will reimburse you
for these expenses pursuant to its regular business practices.
8. Confidentiality. You and CrossWorlds each agree that the provisions of
---------------
this Agreement (including the matters referenced herein) shall be held in
strictest confidence by CrossWorlds and you and shall not be publicized or
disclosed in any manner whatsoever. Notwithstanding the prohibition in the
preceding sentence: (a) you may disclose this Agreement to your immediate
family; (b) you and/or CrossWorlds may disclose this Agreement in confidence to
their respective attorneys, accountants, auditors, tax preparers, and financial
advisors; (c) CrossWorlds may disclose this Agreement as necessary to fulfill
standard or legally required corporate reporting or disclosure requirements; and
(d) you and/or CrossWorlds may disclose this Agreement insofar as such
disclosure may be necessary to enforce its terms or as otherwise required by
law.
Without limiting the foregoing or your obligations under your "Employment,
Confidential Information and Invention Assignment Agreement" with CrossWorlds
(which remains in full force and effect), you agree at all times to hold in
strictest confidence, and not to use except for the benefit of CrossWorlds or to
disclose to any person, firm or corporation without written authorization of the
Board of Directors of CrossWorlds, any Confidential Information of CrossWorlds.
"Confidential Information" means any CrossWorlds or third party proprietary
information, technical data, trade secrets or know-how, disclosed to you by
CrossWorlds either directly or indirectly in writing, orally or by drawings or
observation of parts or equipment, including but not limited to:
. research, product plans, market information;
. products, services, including product technical information, performance
characteristics and limitations, documentation related to services
performed for customers, specifications, designs, materials and test
results;
-3-
. customer lists and customers (including but not limited to customers of
CrossWorlds on whom you called or with whom you became acquainted during
the term of your employment);
. customer requirements, terms of agreements or proposed agreements with
customers, vendors and other companies;
. personnel lists and information regarding skills, compensations and
positions of various personnel;
. target markets, strategy and business plans;
. software, developments, inventions, processes, formulas, technology,
designs, drawings, engineering, and hardware configuration information;
. marketing, financial or other business information, including pricing
information, contacts, sales techniques, surveys, results of operations,
margins and budgets; and
. patent applications, patent disclosures and related information.
9. Non-Competition. Up to and including November 2, 2000, you agree that
---------------
you will not provide services (as an employee, contractor, consultant or
otherwise) to a direct competitor of CrossWorlds, as determined in CrossWorlds'
discretion. Upon determining that you may wish to provide services to an entity
that may be a direct competitor of CrossWorlds, you may notify CrossWorlds in
writing of the same, and CrossWorlds will respond within a reasonable time as to
whether, in CrossWorlds' discretion, such entity is a direct competitor of
CrossWorlds.
10. Non-Solicitation. You agree that, for a period of twelve (12) months
----------------
after the date of this Agreement, you will not solicit the employment of any
person who shall then be employed by CrossWorlds (as an employee or consultant),
or who shall have been employed by CrossWorlds (as an employee or consultant),
within the prior twelve (12) month period, on behalf of you or any other person,
firm, corporation, association or other entity, directly or indirectly.
11. Non-Disparagement. You and CrossWorlds each agree not to disparage
-----------------
the other in any manner likely to be harmful to the other party, to the business
reputation of CrossWorlds' employees, or to CrossWorlds' business or reputation,
provided that you and CrossWorlds will each respond accurately and fully to any
question, inquiry or request for information when required by legal process.
Further, you and CrossWorlds each agree to refrain from tortiously interfering
with the contracts and business relationships of the other party (for example,
CrossWorlds' relationships with its customers and partners).
12. No Admissions. It is understood and agreed by the parties that this
-------------
Agreement represents a compromise settlement of various matters, and that the
promises and payments in consideration of this Agreement shall not be construed
to be an admission of any liability or obligation by either party to the other
party or to any other person.
13. Release. Except as otherwise set forth in this Agreement, you hereby
-------
release, acquit and forever discharge CrossWorlds, its parent and subsidiaries,
and their officers, directors, agents, servants, employees, shareholders,
successors, assigns and affiliates, of and
-4-
from any and all claims, liabilities, demands, causes of action, costs,
expenses, attorneys' fees, damages, indemnities and obligations of every kind
and nature, in law, equity or otherwise, known and unknown, suspected and
unsuspected, disclosed and undisclosed, arising out of or in any way related to
agreements, events, acts or conduct at any time prior to and including November
2, 2000, including but not limited to: all such claims and demands directly or
indirectly arising out of or in any way connected with your employment with
CrossWorlds or the termination of that employment; claims or demands related to
salary, bonuses, commissions, stock, stock options, or any other ownership
interests in CrossWorlds, vacation pay, fringe benefits, expense reimbursements,
severance pay, or any other form of compensation; claims pursuant to any
federal, state or local law or cause of action including, but not limited to,
the federal Civil Rights Act of 1964, as amended; the federal Americans with
Disabilities Act of 1990; the California Fair Employment and Housing Act, as
amended; tort law; contract law; wrongful discharge; discrimination; fraud;
defamation; emotional distress; and breach of the implied covenant of good faith
and fair dealing.
You further acknowledge that you have read and understand Section 1542 of
the California Civil Code, which provides: "A general release does not extend
to claims which the creditor does not know or suspect to exist in his favor at
the time of executing the release, which if known by him must have materially
affected his settlement with the debtor." You expressly waive and relinquish
all rights and benefits under Section 1542 and any other law of any jurisdiction
of similar effect with respect to your release of any claims you may have
against CrossWorlds. You also acknowledge that you are receiving additional
consideration in return for the waiver and release contained in this section
above and beyond any consideration to which you may already have been entitled.
14. Remedies. You and CrossWorlds each agree that any failure to perform
--------
our respective duties and obligations under this Agreement will entitle the
other party to seek all legal and equitable remedies, including, without
limitation, monetary damages and injunctive relief. You further acknowledge and
agree that, if you breach this Agreement (including without limitation the
provisions of section 9), in addition to the other remedies available to
CrossWorlds, CrossWorlds shall be entitled to recover all payments, benefits and
other consideration provided under this Agreement (except that, with respect to
a breach of section 9, the payments previously made to you by CrossWorlds under
section 3 shall be unaffected), and shall be entitled to cease providing you any
additional payments, benefits and other consideration contemplated by this
Agreement. Your release of CrossWorlds (and its parent and subsidiaries, and
their officers, directors, agents, servants, employees, shareholders,
successors, assigns and affiliates), set forth above, shall remain in full force
and effect notwithstanding any breach of this Agreement by you.
15. Miscellaneous. This Agreement shall bind the heirs, personal
-------------
representatives, successors and assigns of both you and CrossWorlds, and inure
to the benefit of both you and CrossWorlds and our successors and assigns. This
Agreement shall be deemed to have been entered into and shall be construed and
enforced in accordance with the laws of the State of California as applied to
contracts made and to be performed entirely within California. This Agreement
constitutes the complete, final and exclusive embodiment of the entire agreement
between you and CrossWorlds with regard to this subject matter, except for the
Employment,
-5-
Confidential Information and Invention Assignment Agreement and the 1997 and
Executive Stock Plans and any option agreements issued to you under those plans.
It is entered into without reliance on any promise or representation, written or
oral, other than those expressly contained herein, and it supersedes any other
such promises, warranties or representations. This Agreement may not be modified
or amended except in a writing signed by both you and a duly authorized officer
of CrossWorlds. If any provision of this Agreement is determined to be invalid
or unenforceable, in whole or in part, this determination will not affect any
other provision of this Agreement and the provision in question shall be
modified by the court so as to be rendered enforceable. This Agreement may be
executed in two counterparts, each of which shall be deemed an original, all of
which together shall constitute one and the same instrument.
To indicate your agreement to all of the above terms and conditions, please sign
this Agreement below and return the original signed copy of the Agreement to
CrossWorlds' Vice-President, Human Resources, Xxxxxxx Xxxxx-Xxxxxxx.
Very truly yours,
/s/ Xxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxxx
President and Chief Executive Officer
I agree with and accept the above terms and conditions as evidenced by my
signature below. I acknowledge that I have carefully read this Agreement, I
understand this Agreement and I have been afforded the opportunity to be advised
of its meaning and consequences by my attorney. I further acknowledge that I
have agreed to this Agreement of my own free will, with full appreciation that I
am forever foreclosed from pursuing any of the rights that I have waived. I
represent and warrant that prior to accepting this Agreement and the offer
contained herein, I have not breached any of the terms of this Agreement.
Signed: /s/ Xxxxxx X. Xxxxxx Signed: /s/ Xxxxxxxxx X. Xxxxxx
--------------------------- -----------------------------
Xxxxxx X. Xxxxxx Xxxxxxxxx X. Xxxxxx
Date: 5/27/00 Date: 5-22-00
----------------------------- -------------------------------
-6-
