EXHIBIT 10.7
CONSULTING AGREEMENT
This Consulting Agreement is made and entered into by and between GK
Intelligent Systems, Inc., a Delaware corporation, with its principal place of
business located in Houston, Texas, and Xxxxxx X. Xxxxxxxx, P.C., a Texas
Professional Corporation.
1. DEFINITIONS.
1.1 The following terms shall have the following meanings:
(a) "Agreement" means this Consulting Agreement.
(b) "Arbitration Program" means the terms and provisions of the
Arbitration Program attached hereto as Exhibit A and incorporated herein
for all purposes.
(c) "Company" means GK Intelligent Systems, Inc., a Delaware
corporation.
(d) "Confidential Information" or "Trade Secrets" means any and all
information or material proprietary to the Company or designated as
confidential by the Company and not generally known by persons who are not
consultants or employees of the Company, which Consultant develops or of
which Consultant may obtain knowledge or access through or as a result of
the Consultant's association with the Company, either in the future or
during previous employment by the Company (including information and
materials conceived, originated, discovered or developed in whole or in
part by the Consultant at the request or for the benefit of the Company or
while the Consultant was employed by the Company) and incudes, but is not
limited to, the designs, manufacture, makeup, configuration, contents,
applications, and programming of the Company's core products and
technologies (SMART ONE Trainer and its derivatives, SMART ENTERPRISE,
SMART SUPPORT, SMART PERFORM and/or CARNOT derived products and their
successors and any other subsequent core businesses) as well as the
following types of information and other information of a similar nature
whether or not reduced to writing and whether or not expressly identified
as confidential by the Company: applications and computer programs and
related documentation, Company manuals and other training and technical
materials; marketing concepts, techniques and plans; business plans and
concepts, research and development, financial information pertaining to
the Company; the Company's operating techniques and business practices and
procedures; and all information regarding any special projects.
"Confidential Information" also includes any information described above
which the Company obtains from another party and which the Company treats
as proprietary or designates as confidential or proprietary information,
whether or not owned or developed by the Company.
(e) "Covenant Not to Compete" refers to the agreement and covenant
of Consultant and Xxxxxxxx, individually not to engage in any of the
Restricted Activities within the Restricted Area during the Restricted
Period.
(f) "Consultant" means Xxxxxx X. Xxxxxxxx, P.C.
(g) "Effective Date" means September 15, 1998.
(h) "Expiration Date" means September 15, 1999.
(i) "Xxxxxxxx" means Xxxxxx X. Xxxxxxxx, an individual, employed by
Consultant.
(j) "Parties" means GK Intelligent Systems, Inc. and Xxxxxx X.
Xxxxxxxx, P.C.
(k) "Restricted Activities" refers to any act, effort or statement
by Consultant or Xxxxxxxx, individually, directly or indirectly (as an
employee, consultant, agent, principal, partner, stockholder, corporate
officer, director, or in any other individual or representative capacity)
that is in any manner whatsoever in competition with the core products and
technologies of the Company, including SMART ONE Trainer and its
derivatives, SMART ENTERPRISE, SMART SUPPORT, SMART PERFORM and/or CARNOT
derived products and their successors and any other subsequent core
businesses of the Company.
(l) "Restricted Area" means North America.
(m) "Restricted Period" means the Term of this Agreement and the
three-year period immediately following the expiration or earlier
termination of this Agreement.
(n) "Term" means the period commencing on September 15, 1998, and
ending on September 15, 1999.
(o) "Termination Date" means the date of the written notice of
termination of this Agreement or automatic termination, whichever occurs
first.
1.2 Singular and masculine forms of any nouns or pronouns shall embrace
and be applied as the plural or as the feminine or neuter, as appropriate to the
context, and vice versa.
2. RECITALS.
2.1 The Company desires to retain Consultant to perform certain services
and Consultant desires to perform such services for the Company in accordance
with the terms and conditions set forth herein.
2.2 Xxxxxxxx is employed as president of Consultant and the parties
contemplate that Xxxxxxxx, on behalf of Consultant, will perform all services
contemplated by this Agreement. Xxxxxxxx is joining in this Agreement for the
purposes of making and binding himself individually to the covenants regarding
work product, confidentiality and competition contained in Sections 6, 7 and 8
of this Agreement, and without which agreements of Xxxxxxxx, individually, the
Company would not enter into this Agreement. Xxxxxxxx acknowledges that the
Company's agreement to retain Consultant under this Agreement, together with the
sum of $10.00, the receipt of which is hereby acknowledged is good and
sufficient consideration for his agreement to be bound individually to Sections
6, 7 and 8 of this Agreement.
3. AGREEMENT TO PROVIDE CONSULTING SERVICES.
3.1 SERVICES. The Company hereby retains Consultant to perform such
services as from time to time the Company may request, including but not limited
to the following:
(a) Advise and consult directly with employees of the Company
designated by the Company's Board of Directors on matters
concerning the Company's business and similar matters;
(b) Promotion of the Company's products and services;
(c) Preparation of such reports as may be required by the
Company; and
(d) Performance of such other and further services as required by
the Company, as may be assigned from time to time consistent
with this Agreement.
(e) All services performed by Consultant pursuant to this
Agreement shall be performed by Xxxxxxxx, on behalf of
Consultant.
3.2 DEVOTION OF EFFORT. The Consultant shall exercise its best efforts in
the performance of services and shall devote such time, attention, skill, and
energy to the business of the Company and to the promotion of the Company's
products and services as may be necessary to complete the tasks assigned by the
Company and to otherwise work toward fulfilling the Company's overall goals.
Consultant agrees to be available to provide consulting services upon the
Company's request up to a maximum of 100 hours per month during the Term. The
Consultant shall be free, during the Term to engage in other enterprises or
business activities, subject to the obligations of Consultant and Xxxxxxxx, as
set forth in Sections 7 and 8.
3.3 STATUS AS INDEPENDENT CONTRACTOR. Consultant shall be deemed for all
purposes to be an independent contractor. Xxxxxxxx is an employee of Consultant
and not an employee of Company. Therefore, the Company shall not withhold any
sums from the gross payment to be made to Consultant for social security or
other federal, state, or local tax liabilities or contributions, and all
withholdings, liabilities, and contributions shall be solely the responsibility
of Consultant. Neither Xxxxxxxx nor any other employee of Consultant shall
participate in any employee benefit program of the Company during the term of
this Agreement.
4. TERM.
4.1 TERM. It is the understanding and agreement of the Parties that the
retention of Consultant under this Agreement shall be for a period of one (1)
year, commencing on September 15, 1998, and running through September 15, 1999,
which period is defined in this Agreement as the Term. During the Term, the
Company may not terminate this Agreement except for cause, including any of the
following:
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(a) Consultant's failure to cause Xxxxxxxx to perform the services
contemplated under this Agreement;
(b) The engagement in fraud, embezzlement, or other theft or
conversion of property or money of the Company or other
defalcation in connection with or arising out of services
performed pursuant to this Agreement by any employee or agent
of Consultant;
(c) Attempts by Consultant to employ or solicit for employment any
employee or consultant of the Company or to terminate
employment or consulting services with the Company, or to
reduce or discontinue any such services to the Company,
without the written consent of the Company;
(d) Attempts by Consultant to induce or encourage any person or
entity with whom the Company does business or has a
contractual relationship to discontinue any such patronage or
services or to violate or breach any provision of a contract
between such person or entity and the Company;
(e) Engagement by Consultant or any employee or agent of
Consultant in any act or practice in connection with any
services provided under this Agreement that could constitute
violation of any law or regulation;
(f) Consultant's failure to comply with any court or
administrative order governing the conduct of the Company; and
(g) Violation of Sections 7 or 8 or any other material provision
of this Agreement or any other agreement with the Company by
Consultant or Xxxxxxxx;
5. COMPENSATION.
5.1 CONSULTING PAYMENTS. As compensation for the services to be rendered
hereunder, the Company shall pay Consultant the sum of $7,500 per month for
consulting services while this Agreement is in effect. This amount shall be paid
on the 15th day of each month commencing October 15, 1998 and continuing on the
15th day of each month until expiration or earlier termination of this
Agreement. If this Agreement is terminated for any of the reasons described in
Section 4.1, the Company shall have no further payment obligations to
Consultant.
5.2 EXPENSES REIMBURSED. During the Term of this Agreement, Consultant
shall be reimbursed for its reasonable expenses incurred in the performance of
the consulting services in accordance with general policy of the Company, as
adopted by the Board of Directors from time to time.
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5.3 INABILITY TO PERFORM SERVICES. If Xxxxxxxx is unable to perform the
duties contemplated under this Agreement on behalf of Consultant by reason of
illness or incapacity of any kind for a period of more than six (6) months, the
consulting payments to Consultant may be reduced or terminated by the Company at
its absolute discretion.
6. OWNERSHIP OF WORK PRODUCT.
6.1 PROPERTY OF THE COMPANY. All intellectual property, including, but not
limited to, all ideas and concepts contained in computer programs and software,
documentation or other literature or illustrations that are conceived,
developed, written, or contributed by Consultant or Xxxxxxxx pursuant to this
Agreement, either individually or in collaboration with others, shall belong to
and be the sole property of the Company.
6.2 WORKS MADE FOR HIRE. Consultant agrees that all rights in all works
prepared or performed by Consultant pursuant to this Agreement, including patent
rights and copyrights applicable to any of the intellectual property described
in subsection 6.1 shall belong exclusively to the Company and shall constitute
"works made for hire" for purposes of copyright law.
6.3 PROPERTY OF CONSULTANT. The provisions of subsection 6.2 shall not be
construed to assign to the Company any of Consultant's rights in any invention
for which no equipment, supplies, facilities, or trade secret information of the
Company was used or that does not result from any work performed by Consultant
for the Company.
7. CONFIDENTIAL INFORMATION AND TRADE SECRETS.
7.1 COMPANY'S DISCLOSURE OF CONFIDENTIAL AND PROPRIETARY INFORMATION TO
CONSULTANT. The Company and Consultant recognize and agree that by virtue of the
Consultant's association with the Company, Consultant and Xxxxxxxx will receive
some or all of the following: training and knowledge in the form of instruction
in the business, of the Company; contact with, knowledge of, and relationships
with, actual or potential clients, customers, purchasers, marketers and
distributors of the Company's products and services, or their consultants,
agents or representatives; contact with, and information about, the Company's
research and development, technology, products, services, procedures and
standards; and other information and data regarding existing or potential
products, services, projects, research and development and business plans of the
Company.
7.2 RETURN OF CONFIDENTIAL AND PROPRIETARY MATERIALS. The Parties
acknowledge that through Xxxxxxxx'x prior employment with the Company and
ongoing association with the Company as an employee of Consultant, both Xxxxxxxx
and Consultant have become familiar with the Trade Secrets and other
confidential and proprietary information of the Company and, pursuant to this
Agreement, will continue to gain knowledge of and become more familiar with such
information as well as additional confidential data and information. Consultant
and Xxxxxxxx acknowledge that all notes, data, forms, reference and training
materials, memoranda, computer print-outs and other documentation and records in
any way incorporating or reflecting any Confidential Information or Trade
Secrets shall belong exclusively to the Company and Consultant and Xxxxxxxx
agree to promptly deliver such materials and all copies thereof to Company on
the termination of this Agreement howsoever occurring, or at an earlier time
upon request of the Company. Consultant further agrees to provide an inventory
of all such material upon termination of this Agreement and at such other times
as the Company may request.
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7.3 NON-DISCLOSURE OF CONFIDENTIAL AND PROPRIETARY INFORMATION. Consultant
and Xxxxxxxx agree during the Term of this Agreement and thereafter to hold in
confidence and not to use for their own benefit, directly or indirectly, or for
the benefit of any other person or entity (except the Company) any Confidential
Information or Trade Secrets or to reveal, report, publish, copy, duplicate,
disclose, convey or transfer any Confidential Information or Trade Secrets to
any other person or entity, or otherwise utilize any Confidential Information or
Trade Secrets for any purpose, except in the course of his work for and on
behalf of the Company. Consultant also agrees that during the Term of this
Agreement, it will cause its employees, agents and representatives to abide by
the rules, guidelines, policies and procedures relating to confidential and
proprietary information implemented and/or amended from time to time by the
Company and its management.
7.4 PROTECTION OF CONFIDENTIAL AND PROPRIETARY MATERIALS. Consultant
agrees to cause its employees, agents and representatives to take all
precautions necessary to preclude the dissemination and/or disclosure of the
Company's Trade Secrets and Confidential Information and to restrict use of it
so that such information will not be disclosed or made accessible to any person
or entity not employed by or affiliated with the Company. Consultant and
Xxxxxxxx agree that this obligation of strict confidentiality and non-disclosure
shall survive termination of this Agreement with the Company and shall continue
in full force and effect notwithstanding the termination of this Agreement.
7.5 INJUNCTIVE RELIEF FOR BREACH OF COVENANTS. Consultant and Xxxxxxxx
acknowledge that any breach of or threatened breach of the covenants contained
in this Section 7 would cause the Company irreparable harm and that money
damages would not provide an adequate remedy to the Company for any such breach.
Because of the unique nature of the Confidential Information and Trade Secrets
to which Consultant shall have access, and because of the inadequacy of monetary
awards for breaches of the obligations as set forth in this section, if
Consultant fails to comply with any such obligations, or in the event of breach
or threatened breach of any of the provisions herein, the Company, in addition
to any other remedies available to it at law or in equity, shall be entitled to
immediate injunctive relief against Consultant and Xxxxxxxx to enforce the
provisions of this section, and shall be entitled to recover from Consultant and
Xxxxxxxx the Company's reasonable attorney's fees and other expenses incurred in
connection with such proceedings.
8. NON-COMPETITION.
8.1 COMPANY'S INTEREST IN PROTECTING BUSINESS. Consultant acknowledges
that the Company has a vital business interest in protecting the Confidential
Information and Trade Secrets as well as its goodwill, business contacts and
relationships and the business it plans to develop with and through the
Consultant. Further, Consultant acknowledges that such business interests on the
part of the Company give rise to the Company's desire to restrain Consultant
from competing with the Company for a reasonable period of time and within
reasonable geographic limits after the Termination Date. Therefore, Consultant
hereby enters into this Covenant Not to Compete with the Company in
consideration of the Company's agreement to retain Consultant for the Term, and
its agreement to disclose its Confidential Information and Trade Secrets to
Consultant during the term of Consultant's association with the Company.
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8.2 CONSULTANT'S COVENANT NOT TO COMPETE.
(a) In consideration of the foregoing, Consultant and Xxxxxxxx agree that
during the Restricted Period, neither Consultant nor Xxxxxxxx will, directly
or indirectly, as an officer, director, shareholder, proprietor, agent, partner,
joint venturer, recruiter, consultant, employee, or in any other individual or
representative capacity engage in any of the Restricted Activities within the
Restricted Area. Consultant and Xxxxxxxx further covenant and agree that during
the Restricted Period they will not, either on their own behalf or for or on
behalf of another, contact for the purpose of competing with the Company, any
customer or client to whom the Company sold or offered for sale any products or
services during Xxxxxxxx'x previous employment with the Company or at any time
during the term of this Agreement.
8.3 COVENANT NOT TO RECRUIT COMPANY'S EMPLOYEES.
(a) Consultant and Xxxxxxxx agree that during the Restricted Period, they
will not recruit or participate, directly or indirectly, in the recruitment of
any of the Company's employees on its own account or for or on behalf of any
competitor of the Company, nor seek to recruit any employee of the Company for
any purpose without the Company's knowledge and written consent.
8.4 INJUNCTIVE RELIEF FOR BREACH OF COVENANT NOT TO COMPETE.
(a) Consultant and Xxxxxxxx recognize and agree that the Company's
enforcement of the Covenant Not to Compete shall be necessary to prevent
irreparable harm and damage to the business of the Company and that the
limitations as to time, geographical area and scope of activity to be restrained
are reasonable and do not impose a greater restraint on Consultant or Xxxxxxxx
than is necessary to protect the goodwill and other business interests of the
Company.
(b) Because of the unique nature of the special training and knowledge
received by the Consultant and Xxxxxxxx from the Company and because of the
inadequacy of monetary awards for breach of the obligations contained in this
Section 8, if Consultant or Xxxxxxxx fails to comply with any such obligations
or in the event of a breach or threatened breach of any of the provisions
herein, the Company in addition to any other remedies available to it at law or
in equity, shall be entitled to immediate injunctive relief to enforce the
provisions of this Section 8 and shall be entitled to recover from Consultant
and Xxxxxxxx reasonable attorney's fees and other expenses incurred by the
Company in connection with such proceedings.
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8.5 MODIFICATION OF COVENANT NOT TO COMPETE. In the event any of the
provisions of this Agreement should ever be deemed or adjudged by a court of
competent jurisdiction to exceed the applicable legal limitations, then such
provisions shall be reformed to the maximum time, geographic or other
limitations permitted by applicable law, it being the Parties' intention to
permit the reviewing court to modify this Agreement to the extent necessary to
cure any such invalidity or unenforceability.
8.6 AGREEMENT ANCILLARY TO OTHER AGREEMENTS. The Covenant Not to Compete
set forth in this Section 8 is ancillary to and part of other agreements between
the Company and the Consultant, including (i) the agreement set forth in Section
4 for the Company to engage Consultant for at least the Initial Term; and (ii)
the agreement set forth in Section 7 pursuant to which the Company agrees to
disclose certain confidential and proprietary information to Consultant during
the term of this Agreement. Furthermore, the Parties acknowledge that the
Company's agreement to retain Consultant for a set term, and to disclose to
Consultant its Confidential Information and Trade Secrets, gives rise to the
Company's interest in restraining Consultant from competing with the Company
after termination of this Agreement.
9. NO INDEPENDENT OBLIGATION CREATED.
Consultant specifically recognizes and agrees that this Agreement shall
not be construed as creating or evidencing any separate or independent
obligation of the Company to train Consultant for any specified period of time
or to assign to Consultant any particular duties or responsibilities. Nothing in
this Agreement limits the Company's right to terminate this Agreement for cause
during the Initial Term.
10. TERMINATION.
10.1 TERMINATION WITHOUT CAUSE.
(a) During the Term, the Company may not terminate this Agreement
without cause.
(b) Consultant may terminate this Agreement at any time by giving ten (10)
days written notice to the Company at the address indicated in this Agreement or
at such other address as the Company may hereafter provide to Consultant. Upon
termination of this Agreement, the Company shall have no further obligations to
Consultant.
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10.2 TERMINATION FOR CAUSE.
(a) At any time, with or without advance notice, the Company may terminate
this Agreement for cause, including but not limited to any of the reasons listed
in Section 4.1.
(b) In the event of termination of this Agreement for cause, the Company
shall not be required to make, and Consultant shall not be entitled to receive,
any consulting payments, as set forth in Section 5.1, subsequent to the act for
which termination occurs.
10.3 NOTICE OF TERMINATION
Notice of termination by either party shall be effective upon delivery.
11. SPECIAL AGREEMENTS OF CONSULTANT.
11.1 Consultant represents and warrants that it is a valid professional
corporation, formed and existing under the laws of the State of Texas.
11.2 Consultant agrees to shall perform all services contemplated by this
Agreement in accordance with all applicable laws, rules, regulations and
professional codes of ethics.
11.3 Consultant shall take all steps necessary for the reporting,
withholding, and payment of any income or other taxes of Consultant arising out
of this Agreement, if required by law and for the reporting, withholding and
payment as an employer of any income taxes attributable to the employees of
Consultant (including Xxxxxxxx), if any, which arise out of this Agreement.
Consultant shall be responsible for any and all compensation which is paid to
the employees of Consultant (including Xxxxxxxx) and for all expenses incurred
by the Consultant in connection with services performed by Consultant on behalf
of Company that are not reimbursable pursuant to Section 5.2 of this Agreement.
12. BINDING ARBITRATION.
The Parties agree to be bound by the terms and provisions of the
Arbitration Program pursuant to which any and all disputes shall be resolved by
mandatory binding arbitration upon the request of either party, subject only to
the specific exceptions set forth in the Arbitration Program.
13. INVALIDITY.
Whenever possible, each provision of this Agreement shall be interpreted
in such a manner as to be effective and valid under applicable law, but if any
provision of this Agreement is held to be invalid, illegal, or unenforceable in
any respect under any applicable law or rule in any jurisdiction, such
invalidity, illegality, or unenforceability shall not affect any other
provision; rather, this Agreement shall be reformed, construed, and enforced in
any such jurisdiction as if such invalid, illegal, or unenforceable provisions
had never been contained herein, and a new, enforceable provision shall be
substituted which accomplishes the intent of the invalid, illegal, or
unenforceable provision as nearly as practicable.
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14. ASSIGNABILITY.
Neither this Agreement nor any of the duties or obligations hereunder
shall be assignable by Consultant without the prior written consent of the
Company. The rights and obligations of the Company shall inure to the benefit of
and shall be binding upon any successors and assigns of the Company.
15. SURVIVAL OF CERTAIN CLAUSES.
Consultant specifically recognizes and agrees that the agreements and
covenants set out in Section 7 which relate to Confidential Information and
Trade Secrets, and in Section 8 which relate to the Consultant's Covenant Not To
Compete are continuing and ongoing obligations which extend beyond the
Expiration Date. Consultant acknowledges that all such agreements shall survive
the termination of his Agreement for any reason whatsoever and shall be binding
on Consultant and Consultant's successors and assigns and shall continue in full
force and effect notwithstanding termination of this Agreement.
16. SEVERABILITY OF AGREEMENT.
The provisions of this Agreement shall be severable. If any provision of
this Agreement is adjudicated unenforceable, the remaining provisions shall
nevertheless remain in full force and effect.
17. NOTICES.
Written notices required or permitted by the provisions of this Agreement
shall be deemed to be delivered when deposited in the United States mail,
postage prepaid, certified mail, return receipt requested, addressed as follows:
IF TO CONSULTANT:
Xxxxxx X. Xxxxxxxx, P.C.
0000 Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxx 00000
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IF TO THE COMPANY:
GK Intelligent Systems, Inc.
0000 Xxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attention: General Counsel
or to such other address as either party may hereafter furnish to the other
in writing.
18. NONWAIVER OF SUBSEQUENT BREACH.
The waiver by any party hereto of a breach of any provision of this
agreement shall not operate or be construed as a waiver of any subsequent breach
by any party.
19. WRITTEN AMENDMENT.
No amendment, modification, extension or renewal of this Agreement shall
be deemed effective unless or until executed in writing by the Parties with the
same formality attending execution of this Agreement.
20. CHOICE OF LAW.
THIS CONSULTING AGREEMENT SHALL GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF TEXAS. THIS AGREEMENT HAS BEEN ENTERED INTO IN
WHOLE OR IN PART IN XXXXXX COUNTY, TEXAS, AND SHALL BE PERFORMABLE FOR ALL
PURPOSES IN XXXXXX COUNTY, TEXAS. COURTS WITHIN THE STATE OF TEXAS SHALL HAVE
JURISDICTION OVER ANY AND ALL DISPUTES ARISING UNDER OR PERTAINING TO THIS
AGREEMENT (AND NOT SUBJECT TO ARBITRATION), AND VENUE IN ANY SUCH DISPUTE SHALL
BE IN XXXXXX COUNTY, TEXAS. IN THE EVENT THE PERSONAL SERVICE CANNOT BE
OTHERWISE OBTAINED WITH RESPECT TO SUCH LITIGATION, CONSULTANT AND THE COMPANY
EACH HEREBY APPOINTS THE SECRETARY OF STATE FOR THE STATE OF TEXAS AS ITS AGENT
FOR SERVICE OF PROCESS.
21. ENTIRE AGREEMENT.
THIS AGREEMENT CONSTITUTES THE ENTIRE AGREEMENT BETWEEN THE PARTIES HERETO
WITH RESPECT TO THE SUBJECT MATTER HEREOF. THIS AGREEMENT MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THIS AGREEMENT MAY BE AMENDED ONLY BY AN INSTRUMENT
IN WRITING EXECUTED BY THE PARTIES HERETO.
22. MULTIPLE COUNTERPARTS.
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This Agreement may be executed in multiple counterparts, each of which
shall serve as an original for all purposes, but all copies shall constitute but
one and the same Agreement.
EXECUTED ON THE DATE(S) SET FORTH BELOW:
GK INTELLIGENT SYSTEMS, INC.
______________________________________
Xxxx X. Xxxxxxx
President and Chief Executive Officer
XXXXXX X. XXXXXXXX, P.C.
______________________________________
Xxxxxx X. Xxxxxxxx
President
______________________________________
Xxxxxx X. Xxxxxxxx,
Individually
STATE OF TEXAS ss.
ss.
COUNTY OF XXXXXX xx.
This instrument was acknowledged before me this ______ day of
September, 1998, by Xxxx X. Xxxxxxx, as President and Chief Executive Officer of
GK Intelligent Systems, Inc., on behalf of said corporation.
______________________________________
Notary Public
My commission expires ________________
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STATE OF TEXAS ss.
ss.
COUNTY OF XXXXXX xx.
This instrument was acknowledged before me this ______ day of
September, 1998, by Xxxxxx X. Xxxxxxxx, as President of Xxxxxx X. Xxxxxxxx,
P.C., on behalf of said corporation.
______________________________________
Notary Public
My commission expires ________________
STATE OF TEXAS ss.
ss.
COUNTY OF XXXXXX xx.
This instrument was acknowledged before me this ______ day of
September, 1998, by Xxxxxx X. Xxxxxxxx, as his individual act and deed.
______________________________________
Notary Public
My commission expires ________________
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EXHIBIT A
ARBITRATION PROGRAM
1. BINDING ARBITRATION. Upon the demand of either party, whether made
before or after the institution of any judicial proceeding, any Dispute (as
defined below) shall be resolved by binding arbitration in accordance with the
terms of this Arbitration Program. A "Dispute" shall include any action,
dispute, claim, or controversy of any kind (E.G., whether in contract or in
tort, statutory or common law, legal or equitable, or otherwise), now existing
or hereafter arising between the Parties in any way arising out of, pertaining
to or in connection with (1) any agreement, document or instrument to which this
Arbitration Program is attached or in which it is referred to or any related
agreements, documents, or instruments (the "Documents"), (2) any past, present
or future incidents, omissions, acts, errors, practices, or occurrences causing
injury to either party whereby the other party or its agents, consultants or
representatives may be liable, in whole or in part, or (3) any other aspect of
the past, present, or future relationships of the Parties including any agency,
independent contractor or employment relationship but excluding claims for
workers' compensation and unemployment benefits ("Relationship"). Any party to
this Arbitration Program may, by summary proceedings (E.G., a plea in abatement
or motion to stay further proceedings), bring any action in court to compel
arbitration of any Disputes. Any party who fails or refuses to submit to binding
arbitration following a lawful demand by the opposing party shall bear all costs
and expenses incurred by the opposing party in compelling arbitration of any
Dispute. The Parties agree that by engaging in activities with or involving each
other as described above, they are participating in transactions involving
interstate commerce.
2 GOVERNING RULES. All Disputes between the Parties submitted to
arbitration shall be resolved by binding arbitration administered by the
American Arbitration Association (the "AAA") in accordance with, and in the
following order of priority: (1) the terms of this Arbitration Program, (2) the
Commercial Arbitration Rules of the AAA, (3) the Federal Arbitration Act (Title
9 of the United States Code) and (4) to the extent the foregoing are
inapplicable, unenforceable or invalid, the laws of the State of Texas. The
validity and enforceability of this Arbitration Program shall be determined in
accordance with this same order of priority. In the event of any inconsistency
between this Arbitration Program and such rules and statutes, this Arbitration
Program shall control. Judgment upon any award rendered hereunder may be entered
in any court having jurisdiction.
3 NO WAIVER; PRESERVATION OF REMEDIES: MULTIPLE PARTIES. No provision of,
nor the exercise of any rights under, this Arbitration Program shall limit the
right of the Company, during any Dispute, to seek, use, or employ ancillary or
preliminary judicial remedies, including the institution of activities for
temporary restraining orders or temporary or permanent injunctions or other
equitable relief for the purpose of enforcing the non-competition covenant, the
confidentiality agreements or to protect itself from other irreparable harm and
any such action shall not be deemed an election of remedies. Such rights can be
exercised at any time except to the extent such action is contrary to a final
award or decision in any arbitration proceeding. The institution and maintenance
of an action for judicial relief or pursuit of provisional or ancillary remedies
shall not constitute a waiver of the right of either party to submit the Dispute
to arbitration, nor render inapplicable the compulsory arbitration provisions
hereof.
4 STATUTE OF LIMITATIONS. All statutes of limitation applicable to any
Dispute shall apply to any proceeding in accordance with this Arbitration
Program.
5 ARBITRATOR POWERS AND QUALIFICATIONS: AWARDS; MODIFICATION OR VACATION
OF AWARD. Arbitrators are empowered to resolve Disputes by summary rulings
substantially similar to summary judgments and motions to dismiss. Arbitrators
shall resolve all Disputes in accordance with the applicable substantive law.
Any arbitrator selected shall be required to be a practicing attorney licensed
to practice law in the State of Texas and shall be required to be experienced
and knowledgeable in the substantive laws applicable to the subject matter of
the Dispute. With respect to a Dispute in which the claims or amounts in
controversy do not exceed $500,000.00, a single arbitrator shall be chosen and
shall resolve the Dispute. In such case, the arbitrator shall be required to
make specific, written findings of fact, and shall have authority to render an
award up to but not to exceed $500,000.00, including costs, fees, expenses and
all other damages of any kind. A Dispute involving claims or amounts in
controversy exceeding $500,000.00, shall be decided by a majority vote of a
panel of three arbitrators (an "Arbitration Panel"), the determination of any
two of the three arbitrators constituting the determination of the Arbitration
Panel, provided, however, that all three Arbitrators on the Arbitration Panel
must actively participate in all hearings and deliberations. Arbitrators,
including any Arbitration Panel, may grant any remedy or relief deemed just and
equitable and within the scope of this Arbitration Program and may also grant
such ancillary relief as is necessary to make effective any award. Arbitration
Panels shall be required to make specific, written findings of fact and
conclusions of law, and in such proceedings before an Arbitration Panel only,
the Parties shall have the additional right to seek vacation or modification of
any award of an Arbitration Panel that is based in whole, or in part, on an
incorrect or erroneous ruling of law by appeal to a federal or state court of
appeals, following the entry of judgment on the award in federal or state
district court, as appropriate. For these purposes, the award and judgment
entered by the federal or state district court shall be considered to be the
same as the award and judgment of the Arbitration Panel. All requirements
applicable to appeals from any federal or state district court judgment shall be
applicable to appeals from judgments entered on decisions rendered by
Arbitration Panels. The appellate courts shall have the power and authority to
vacate or modify an award based upon a determination that there has been an
incorrect or erroneous ruling of law. The appellate court shall also have the
power to reverse and/or remand the decision of an Arbitration Panel. Subject to
the foregoing, the determination of an Arbitrator or Arbitration Panel shall be
binding on all parties and shall not be subject to further review or appeal
except as otherwise allowed by applicable law.
6 DISCOVERY AND PRETRIAL MATTERS. Discovery and pretrial motions shall be
governed by the Texas Rules of Civil Procedure. Arbitrators shall rule on all
discovery disputes and other pretrial matters within twenty (20) days of
submission unless otherwise agreed by the Parties.
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7 COSTS, ATTORNEYS' FEES AND OTHER EXPENSES. To the extent permitted by
applicable law, Arbitrators, including any Arbitration Panel, shall have the
power to award recovery of all costs and fees (including attorneys' fees,
administrative fees, and arbitrators' fees) to the prevailing party.
8 CONFIDENTIALITY. Each party agrees to keep all Disputes and arbitration
proceedings strictly confidential, except for disclosures of information
required in the ordinary course of business of the Parties or by applicable law
or regulation.
9 OTHER MATTERS AND MISCELLANEOUS. To the maximum extent practicable, the
AAA, the Arbitrator (or the Arbitration Panel, as appropriate) and the Parties
shall take any action necessary to require that an arbitration proceeding
hereunder shall be concluded within 180 days of the filing of the Dispute with
the AAA. Arbitration proceedings hereunder shall be conducted in Houston, Texas,
unless otherwise agreed by the Parties. Arbitrators shall be empowered to impose
sanctions and to take such other actions as they deem necessary to the same
extent a court could pursuant to the Texas Rules of Civil Procedure and
applicable law. This Arbitration Program, together with the Consulting Agreement
to which it is appended, constitutes the entire agreement of the Parties with
respect to its subject matter and supersedes all prior discussions,
arrangements, negotiations, and other communications on dispute resolution. The
provisions of this Arbitration Program shall survive any termination, amendment,
or expiration of the Consulting Agreement, unless the Parties otherwise
expressly agree in writing. This Arbitration Program may be amended, changed, or
modified only by the express provisions of a writing which specifically refers
to this Arbitration Program and which is signed by both Parties. If any term,
covenant, condition or provision of this Arbitration Program is found to be
unlawful, invalid or unenforceable, such illegality, or invalidity or
unenforceability shall not affect the legality, validity or enforceability of
the remaining parts of this Arbitration Program, and all such remaining parts
hereof shall be valid and enforceable and have full force and effect as if the
illegal, invalid or unenforceable part had not been included.
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