CONSULTING AGREEMENT
Consulting Agreement, dated as of the ___ day of June, 1999, by and
between Xxxxxxxxxxx.xxx (US) Ltd., a Delaware corporation (the "Corporation"),
and Xxxxxx X. Xxxxx, M.D., an individual residing in Collegeville, Pennsylvania
(the "Consultant").
W I T N E S S E T H:
The parent corporation of the Corporation is a party to that certain
Merger Agreement and Plan of Reorganization, dated June __, 1999, among
Cyber-Tech, Inc., a New Jersey corporation ("Cyber-Tech"), its shareholders,
MCNS Merger Subsidiary II, Inc. ("Subsidiary"), and Xxxxxxxxxxx.xxx, Inc., a
Delaware corporation ("Parent") (the "Merger Agreement"). As a condition to the
Closing of the Merger Agreement, the Corporation and Consultant are to enter in
to an agreement upon the terms outlined herein under which Consultant will
provide consulting services in connection with the operation of its business and
that of Subsidiary as the surviving corporation to Cyber-Tech. In consideration
of the mutual covenants herein contained and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged by
the parties hereto, the parties hereto hereby agree as follows:
1. Consulting. The Corporation hereby retains the Consultant in an
independent contractor capacity, and the Consultant hereby accepts and agrees to
such capacity, commencing as of the date hereof, upon the terms and conditions
hereinafter set forth.
2. Term. The term of the Consultant's service under this Agreement shall
commence as of the date hereof and shall continue until the close of business on
June 30, 2002, unless sooner terminated pursuant to the terms hereof. This
Agreement shall be renewable by the mutual written consent of the parties.
3. Duties and Services. During the term, Consultant agrees to provide to
the Corporation the services set forth on Exhibit A attached hereto and made
part hereof (the "Services"), subject to the terms and conditions of this
Agreement. Consultant will initially hold the title of "Medical Director,
Cardiovascular." Consultant shall commit to as much time as is necessary to
ensure successful performance of the Services, and shall respond to all requests
by the Company for information on a timely basis. The Company shall provide
Consultant with sufficient access to the Company's facilities, staff and
resources as may be necessary for Consultant to perform the Services.
4. Fee for Services. As compensation for the Services, the Corporation
shall pay Consultant the fees set forth on Exhibit B attached hereto and made a
part hereof. Consultant shall in no way be eligible for any fringe benefits or
other benefits normally afforded to employees of the Corporation, and Consultant
shall be obligated to pay any and all applicable taxes and other governmental
and licensing requirements arising from the compensation to be paid to the
Consultant hereunder. The fees provided for herein shall continue to be paid to
Consultant unless his services are terminated pursuant to Section 6 hereof.
5. Expenses. During the term, the Corporation shall reimburse Consultant
for necessary and reasonable out-of-pocket travel expenses incurred in
performing the Services hereunder, provided that Consultant submits to the
Corporation adequate records and other documentation evidence as may be required
by Federal and State statutes and regulations for the substantiation of each
such expenditure as an income tax deduction to the Corporation.
6. Termination.
(a) Termination. Notwithstanding anything to the contrary contained
herein, the Consultant's service to the Corporation, as well as the Consultant's
right to any compensation which thereafter otherwise would accrue to his
hereunder or in connection therewith, shall terminate upon the earliest to occur
of the following events:
(i) the death or disability (as defined below) of the
Consultant,
(ii) the expiration of the term of this Agreement,
(iii) the Consultant's voluntary termination of services, or
(iv) upon delivery of written notice, with or without "cause"
(as defined below), to the Consultant from the Corporation of such
termination.
(b) Certain Definitions. For the purpose of this Section 6, (i) the
term "cause" is defined as (A) the commission by the Consultant of a felony or
an offense involving moral turpitude, the Consultant's engaging in theft,
embezzlement, fraud, obtaining funds or property under false pretenses, or
similar acts of misconduct with respect to the property of the Corporation or
its Consultants, stockholders, affiliates, customers, licensees, licensers or
suppliers, (B) the repeated failure by the Consultant to perform his material
duties hereunder or comply with reasonable written policies or directives of the
Board of Directors of the Corporation, (C) material misfeasance or malfeasance,
or (D) the breach of this Agreement by the Consultant in any material respect,
which breach is not cured within thirty (30) days after Consultant's receipt of
written notice of the breach (or if a breach is a repetition of a previous
breach occurring within the previous twelve (12) months, no cure right shall be
given), and (ii) the Consultant shall be deemed "disabled" if, at the
Corporation's option, it gives notice to the Consultant or his representative
that due to a disabling mental or physical condition, he has been prevented, for
a continuous period of 90 days during the term hereof or for an aggregate of 120
days during any six month period during the term hereof, from substantially
performing those duties which he was required to perform pursuant to the
provisions of this Agreement prior to incurring such disability.
(c) Severance; Release. In the event of and upon the termination by
the Corporation of the Consultant under this Agreement without "cause", in
addition to the Fees earned hereunder and unpaid or not delivered through the
date of termination and any expenses referred to in Section 5 hereof, the
Corporation shall pay the Consultant a cash payment (the "Severance Payment")
equal in the aggregate to the sum of three (3) months fees. In the event of
termination of this Agreement by the Corporation by reason of the death or
disability of the Consultant or for "cause", or in the event of the voluntary
termination of this Agreement by Consultant, the
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Corporation shall not be obligated to make the Severance Payment to the
Consultant. The Severance Payment shall be paid to the Consultant in
consecutive, equal monthly installments, on the fifteenth day of each calendar
month commencing during the month next following the first to occur of (1) the
month in which the Consultant is no longer providing services to the Corporation
and (2) the effective date of a general release from the Consultant in customary
form for such circumstances. The Severance Payment shall be in lieu of any other
claim for compensation under this Agreement, any wage continuation law or at
common law, or any claim to severance or similar payments or benefits which the
Consultant may otherwise have or make. Without limiting any other rights or
remedies which the Corporation may have, it is understood that the Corporation
shall be under no further obligation to make any such severance payments and
shall be entitled to be reimbursed therefor by the Consultant or his estate if
the Consultant violates any of the covenants set forth in this Agreement. In the
event that the Severance Payment shall become payable to the Consultant, the
Consultant shall not be required, either in mitigation of damages or by the
terms of any provisions of this Agreement or otherwise, to seek or accept
employment, and if the Consultant does accept employment, any benefits or
payments under this Agreement shall not be reduced by any compensation earned or
other benefits received as a result of such employment.
7. Confidentiality.
(a) Subject to the Consultant's obligations to his primary employer,
the Consultant agrees to the following to and for the benefit of the
Corporation:
(i) Confidentiality. The Consultant understands and agrees
that the Consultant's service creates a relationship of confidence
and trust between the Consultant and the Corporation with respect to
all Confidential Information. At all times, both during the
Consultant's service with the Corporation and after his termination,
the Consultant will keep in confidence and trust all such
Confidential Information, and will not use or disclose any such
Confidential Information without the written consent of the
Corporation, except as may be necessary in the ordinary course of
performing the Consultant's duties to the Corporation.
(ii) Confidential Information. As used in this Agreement,
"Confidential Information" means information belonging to the
Corporation which is of value to the Corporation in the course of
conducting its business and the disclosure of which is reasonably
likely to result in a competitive or other disadvantage to the
Corporation. Confidential Information includes, without limitation,
financial information, reports, and forecasts; inventions,
improvements and other intellectual property; trade secrets;
know-how; designs, processes or formulae, software; market or sales
information or plans; customer lists; and business plans, prospects
and opportunities (such as possible acquisitions or dispositions of
businesses or facilities) which have been discussed or considered by
the management of the Corporation or Cyber-Tech in the three (3)
previous years. Confidential Information includes information
developed by the Consultant in the course of the Consultant's
service to the Corporation or Cyber-Tech in the three (3) previous
years, as well as other information to which the Consultant may have
access in connection with the
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Consultant's engagement hereunder pertaining to the same or similar
lines of business as may be engaged in, or proposed to be engaged
in, by the Corporation or Cyber-Tech during the term of this
Agreement. Confidential Information also includes the confidential
information of others with which the Corporation has a business
relationship. Notwithstanding the foregoing, Confidential
Information does not include information in the public domain,
unless due to breach of the Consultant's duties under this Section 7
or information known to the Consultant prior to his engagement by
the Corporation or Cyber-Tech.
(iii) Inventions. The Consultant recognizes that the
Corporation possesses a proprietary interest in all of the
Confidential Information and has the exclusive right and privilege
to use, protect by copyright, patent or trademark, or otherwise
exploit the processes, ideas and concepts described therein to the
exclusion of the Consultant, except as otherwise agreed between the
Corporation and the Consultant in writing. The Consultant expressly
agrees that any products, inventions, discoveries or improvements
made by the Consultant or his agents in the course of the
Consultant's service or during any period that the Consultant has
heretofore been a consultant to the Corporation or Cyber-Tech,
including any of the foregoing which is based on or arises out of
the Confidential Information, shall be the property of and inure to
the exclusive benefit of the Corporation. The Consultant further
agrees that any and all products, inventions, discoveries or
improvements developed by the Consultant (whether or not able to be
protected by copyright, patent or trademark) during the course of
his service or during any period that the Consultant has heretofore
been a consultant to the Corporation or Cyber-Tech, or involving the
use of the time, materials or other resources of the Corporation or
any of its subsidiaries or affiliates or Cyber-Tech, shall be
promptly disclosed to the Corporation and shall become the exclusive
property of the Corporation and the Consultant shall execute and
deliver any and all documents necessary or appropriate to implement
the foregoing.
(iv) Business Opportunities. The Consultant agrees, during the
term, to offer or otherwise make known or available to it, as
directed by the Board of Directors of the Corporation and without
additional compensation or consideration, any business prospects,
contracts or other business opportunities that he may discover,
find, develop or otherwise have available to his in the same or
similar lines of business as the Corporation's, and further agrees
that any such prospects, contacts or other business opportunities
shall be the property of the Corporation.
(v) Documents, Records, etc. All documents, records, data,
apparatus, equipment and other physical property, whether or not
pertaining to Confidential Information, which are furnished to the
Consultant by the Corporation or Cyber-Tech or are produced by the
Consultant in connection with the Consultant's service will be and
remain the sole property of the Corporation. The Consultant will
return to the Corporation all such materials and property as and
when requested by the Corporation. In any event, the Consultant will
return all such materials and property
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immediately upon termination of the Consultant's service for any
reason. The Consultant will not retain with the Consultant any such
material property or any copies thereof after such termination.
(vi) Third-Party Agreements and Rights. The Consultant hereby
confirms that the Consultant is not bound by the terms of any
agreement with any previous employer (other than Cyber-Tech) or
other party which restricts in any way the Consultant's use or
disclosure of information reasonably likely to be useful or
necessary to the performance by the Consultant of his services
hereunder, or the Consultant's engagement in any business. The
Consultant represents to the Corporation that the Consultant's
execution of this Agreement, the Consultant's engagement by the
Corporation and the performance of the Consultant's proposed duties
for the Corporation will not violate any obligations the Consultant
may have to any such previous employer or other party. In the
Consultant's work for the Corporation, the Consultant will not
disclose or make use of any information in violation of any
agreements with or right of any such previous employer or other
party, and the Consultant will not bring to the premises of the
Corporation any copies or other tangible embodiments of non-public
information belonging to or obtained from any such previous
employment or other party.
(vii) Litigation and Regulatory Cooperation. During and after
the Consultant's service, the Consultant shall cooperate fully with
the Corporation in the defense or prosecution of any claims or
actions now in existence or which may be brought in the future
against or on behalf of the Corporation or its subsidiaries or
affiliates which relate to events or occurrences that transpired
while the Consultant was performing services for the Corporation or
Cyber-Tech. The Consultant's full cooperation in connection with
such claims or actions shall include, but not be limited to, being
available to meet with counsel to prepare for discovery or trial and
to act as a witness on behalf of the Corporation at mutually
convenient times. During and after the Consultant's engagement, the
Consultant also shall cooperate fully with the Corporation in
connection with any such investigation or review of any federal,
state or local regulatory authority as any such investigation or
review relates to events or occurrences that transpired while the
Consultant was performing services for the Corporation or
Cyber-Tech. The Corporation shall reimburse the Consultant for any
reasonable out-of-pocket expenses incurred in connection with the
Consultant's performance of obligations pursuant to this subsection
(vii). The performance by the Consultant under this subsection (vii)
after the termination of the Consultant's services to the
Corporation shall be subject to his other confidentiality
obligations hereunder.
(viii) Obligation to Primary Employer. The Consultant's
obligations to his primary employer shall not materially interfere
with the Consultant's performance of the covenants and obligations
set forth herein, and Consultant shall not disclose any material
Confidential Information to his primary employer without the consent
of the Corporation.
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(ix) Use of Name. The Corporation will not use the name of the
Consultant in advertising, press releases or other public
documentation without the Consultant's consent, which will not be
unreasonably withheld or delayed.
(b) The provisions of this Section 7 shall survive the termination
or expiration of this Agreement, irrespective of the reason therefor.
8. Notices. All notices shall be in writing and shall be deemed to have
been duly given to a party hereto on the date of such delivery, if delivered
personally, or on the third day after being deposited in the mail if mailed via
registered or certified mail, return receipt requested, postage prepaid, or on
the next business day after being sent by recognized national overnight courier
service, in the case of the Consultant at his current address as set forth in
the Corporation's records, and in the case of the Corporation, at it address set
forth above.
9. Assignability and Binding Effect. This Agreement shall inure to the
benefit of and shall be binding upon the heirs, executors, administrators,
successors and legal representatives of the Consultant, and shall inure to the
benefit of and be binding upon the Corporation and its successors and assigns.
This Agreement may be assigned by the Corporation to any subsidiary, affiliate
or successor to its business, provided such entity has the financial capability
to carry out the Corporation's obligations to the Consultant hereunder. The
Consultant may not assign, transfer, pledge, encumber, hypothecate or otherwise
dispose of this Agreement, or any of his rights or obligations hereunder, and
any such attempted delegation or disposition shall be null and void and without
effect.
10. Severability. In the event that any provisions of this Agreement would
be held to be invalid, prohibited or unenforceable in any jurisdiction for any
reason (including, but not limited to, any provisions which would be held to be
unenforceable because of the scope, duration or area of its applicability),
unless narrowed by construction, this Agreement shall, as to such jurisdiction
only, be construed as if such invalid, prohibited or unenforceable provision had
been more narrowly drawn so as not to be invalid, prohibited or unenforceable
(or if such language cannot be drawn narrowly enough, the court making any such
determination shall have the power to modify such scope, duration or area or all
of them, but only to the extent necessary to make such provision or provisions
enforceable in such jurisdiction, and such provision shall then be applicable in
such modified form). If, notwithstanding the foregoing, any provision of this
Agreement would be held to be invalid, prohibited or unenforceable in any
jurisdiction, such provision shall be ineffective to the extent of such
invalidity, prohibition or unenforceability, without invalidating the remaining
provisions of this Agreement or affecting the validity or enforceability of such
provision in any other jurisdiction.
11. Governing Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New Jersey, without regard to
principles of conflict of laws and regardless of where actually executed,
delivered or performed.
12. Complete Understanding; Counterparts. This Agreement constitutes the
complete understanding and supersedes any and all prior agreements and
understandings between the parties with respect to its subject matter, and no
statement, representation, warranty or covenant has been made by either party
with respect thereto except as expressly set forth herein. This Agreement shall
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not be altered, modified, amended or terminated except by written instrument
signed by each of the parties hereto. The Section and paragraph headings
contained herein are for convenience only, and are not part of and are not
intended to define or limit the contents of said Sections and paragraphs. This
Agreement may be executed in counterparts, each of which shall be deemed an
original and all of which, when taken together, shall constitute one and the
same agreement.
13. Indemnification. Consultant shall be indemnified with respect to
Services provided under this Agreement as an agent of the Corporation to the
fullest extent provided under Delaware law and the Certificate of Incorporation
and Bylaws of the Corporation.
(Remainder of page intentionally left blank)
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
XXXXXXXXXXX.XXX (US) LTD.
By:_________________________________
Name:_______________________________
Title:______________________________
____________________________________
Xxxxxx X. Xxxxx, M.D.
EXHIBIT A
SERVICES
Consultant agrees to provide to the Company the following services:
1. Continue responsibilities as Editor-in-chief of HeartInfo.
2. Recruit new editorial board members for HeartInfo.
3. Develop new initiatives related to content and services directed toward
physicians and lay persons.
4. Identify new business opportunities.
5. Participate in key medical and sales meetings.
6. Utilize public relations opportunities to promote HeartInfo.
7. Identify opportunities for cooperation and synergy with academic and other
non-profit institutions related to content development.
8. Cultivate the relationships between the physicians on the HeartInfo
medical board and help keep them active and participatory.
EXHIBIT B
COMPENSATION
1. Base Consulting Fees: During the term, Consultant shall be entitled to
receive annual consulting fees of $50,000 per year, payable in accordance with
the Company's general policies.
2. Additional Compensation: During the term, and subject to the conditions
set forth herein, Consultant shall also be entitled to receive as additional
compensation the following:
(a) Provided that Consultant has not been terminated by the Corporation
for cause, on June 30, 2000, Consultant shall receive, as a restricted stock
grant, the number of shares of Company common stock ("Parent Shares") equal to
$40,000 divided by the average of the closing prices for the Parent Shares as
reported in The Wall Street Journal for each of the twenty (20) trading days
ending on June 29, 2000. These Parent Shares shall vest and be released to
Consultant as follows: (i) one-third on June 30, 2000; and (ii) one-third on
each of the first and second anniversaries thereafter, provided that this
Agreement remains in effect on each of such anniversary dates.
(b) Provided that Consultant has not been terminated by the Corporation
for cause, on June 30, 2001, Consultant will receive, as a restricted stock
grant, the number of Parent Shares equal to $40,000 divided by the average of
the closing prices for the Parent Shares as reported in The Wall Street Journal
for each of the twenty (20) trading days ending on June 29, 2001. These shares
shall vest and be released to Consultant as follows: (i) one-third on the date
of the grant; and (ii) one-third on each of the first and second anniversaries
thereafter, provided that the Consulting Agreement has been renewed and is in
effect on each of such anniversary dates.
(c) Provided that Consultant has not been terminated by the Corporation
for cause, on June 30, 2002, Consultant will receive, as a restricted stock
grant, the number of Parent Shares equal to $40,000 divided by the average of
the closing prices for the Parent Shares as reported in The Wall Street Journal
for each of the twenty (20) trading days ending on June 28, 2002. These shares
shall vest and be released to Consultant as follows: (i) one-third on the date
of the grant; and (ii) one-third on each of the first and second anniversaries
thereafter, provided that the Consulting Agreement has been renewed and is in
effect on each of such anniversary dates.
(d) In the event this Agreement expired during or at the end of the
previous period, no compensation shall be payable and no shares shall vest in
respect of any subsequent period. In the event this Agreement is terminated by
the Corporation without "cause," the compensation owed for the period in which
termination occurs shall be paid and the shares vesting during that period shall
vest, but no compensation shall be payable for any subsequent period and no
vesting shall occur in any subsequent period.
(e) Expiration of this Agreement on June 30, 2002, does not mean that
Consultant loses rights vested on or prior to such expiration.
