Exhibit 10.9
CONSULTING AGREEMENT
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THIS AGREEMENT is made effective 1st April, 1997 (the "Effective Date")
between ZMAX Corporation, a Nevada corporation (the "Company"), and MBY, Inc., a
Delaware corporation, (the "Consultant") and Xxxxxx Xxxxx.
INTRODUCTION
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The Company, the Consultant, and Xxxxxx Xxxxx desire to enter into an
agreement whereby the Consultant will perform services as an independent
contractor to the Company and all services to be performed by the Consultant
shall be performed on behalf of the Consultant by Xxxxxx Xxxxx.
NOW, THEREFORE, the parties agree as follows:
1. Terms and Conditions of Engagement.
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(a) Independent Contractor. The Company hereby enters into an
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arrangement with the Consultant as independent contractor and the Consultant
accepts such arrangement with the Company in such capacity subject to the terms
and conditions hereof. The Consultant shall report to the Board of Directors of
the Company (the "Board of Directors") and shall have such authority and
responsibilities and perform such duties as shall be assigned to the Consultant
from time to time by the Board of Directors. All services to be performed by
the Consultant hereunder shall be performed on behalf of the Consultant
exclusively by Xxxxxx Xxxxx, the President of the Consultant, and Consultant
shall make Xxxxxx Xxxxx available therefor. The Consultant agrees to cause
Xxxxxx Xxxxx to serve and Xxxxxx Xxxxx agrees to serve, without additional
compensation, in such of the following positions as to which he is elected:
Chairman of the Board of Directors, member of the Board of Directors, member of
the board of directors of one or more entities directly or indirectly controlled
by or under common control with the Company (an "Affiliate"). Xxxxxx Xxxxx is
not being employed as an employee of the Company hereunder.
(b) Exclusivity. Throughout the term of the Consultant's engagement
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hereunder, the Consultant shall devote the time necessary to perform the
Consultant's duties. The Company shall not require the full-time services of
the Consultant. However, the Consultant shall devote at least on average one
eight hour day per week to the performance of his duties.
2. Compensation.
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(a) Consulting Fees. In consideration for the Consultant's services
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hereunder, the Company shall pay to the Consultant a monthly consulting fee in
the amount of $20,000 for the Term of this Agreement.
(b) Expenses. The Consultant shall be entitled to be reimbursed in
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accordance with the policies of the Company, as adopted and amended from time to
time, for all reasonable and necessary expenses incurred by the Consultant in
connection with the performance of the Consultant's duties hereunder upon
submission of verification of the nature and amount of such expenses in
accordance with the reimbursement policies from time to time adopted by the
Company.
3. Term, Termination and Termination Payments.
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(a) Term. The term of this Agreement (the "Term") shall commence as
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of the Effective Date of this Agreement and shall expire on the third
anniversary of the Effective Date. The term shall automatically renew for an
additional year at the end of each expiring term, unless either the Consultant
or the Company gives notice of termination before ninety (90) days prior to the
expiration of the then current Term.
(b) Termination. This Agreement and the Consultant's engagement
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with the Company hereunder may only be terminated prior to the end of the Term:
(i) by mutual agreement of the Consultant and the Company;
(ii) by the Company without Cause; or
(iii) by the Company for Cause.
Notice of termination by either the Company or the Consultant shall be given in
writing and shall specify the basis for termination and the effective date of
termination. This Agreement shall also terminate immediately upon the death or
the Disability of Xxxxxx Xxxxx.
For purposes of this Agreement, "Cause" means (w) any willful failure
by the Consultant in the performance of any of its duties pursuant to this
Agreement or breach by the Consultant or Xxxxxx Xxxxx of any of the terms of
this Agreement; (x) the Consultant's or Xxxxxx Xxxxx'x conviction of any crime
(felony level, or penalized by incarceration or lesser crime involving moral
turpitude), or any act involving money or other property involving the Company
which would constitute a felony in the jurisdiction involved; or (y) any act by
the Consultant or Xxxxxx Xxxxx of fraud, misappropriation, dishonesty,
embezzlement, or similar conduct against the Company or a customer of the
Company. The determination of the existence of "Cause" will be made in good
faith by the Board of Directors.
For purposes of this Agreement, "Disability" means the first to occur
of: (i) a disability of Xxxxxx Xxxxx within the meaning of Section 72(m)(7) of
the Internal Revenue Code; that is, Xxxxxx Xxxxx is unable to engage in any
substantial gainful activity with the Company or any other employer, by reason
of any medically determinable physical or mental impairment which can be
expected to result in death or to be of long continued and indefinite duration;
or (ii) a three-month period during which, due to accident, or illness, or any
other physical or mental incapacity, Xxxxxx Xxxxx cannot perform his duties and
obligations hereunder.
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(c) Effect of Termination. Upon termination of this Agreement and
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the Consultant's engagement hereunder, the Company shall have no further
obligation to the Consultant, Xxxxxx Xxxxx, or Xxxxxx Xxxxx'x estate with
respect to this Agreement, except for payment of consulting fees, if any,
accrued pursuant to Section 2(a) hereof and unpaid at the Termination Date, and
termination payments, if any, set forth in Section 3(e) hereof, as applicable,
subject to the provisions of Section 8 hereof. Nothing contained herein shall
limit or impinge any other rights or remedies of the Company, the Consultant, or
Xxxxxx Xxxxx under any other agreement or plan to which the Consultant or Xxxxxx
Xxxxx is a party or of which the Consultant or Xxxxxx Xxxxx is a beneficiary.
(d) Survival. The covenants of the Consultant and Xxxxxx Xxxxx in
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Sections 4, 5, 6, and 7 hereof shall survive the termination of this Agreement
and the Consultant's engagement hereunder and shall not be extinguished thereby.
(e) Termination Without Cause. Upon termination of the Consultant's
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engagement by the Company without Cause under Section 3(b)(ii) hereof, the
Company shall be obligated to continue to pay the Consultant its monthly fee of
$20,000 for the remaining Term of this Agreement or until one (1) year after
such termination (whichever occurs first).
4. Agreement Not to Compete and Not to Solicit Customers.
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(a) Agreement Not to Compete. The Consultant and Xxxxxx Xxxxx agree
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that commencing on the Effective Date and continuing through the Consultant's
engagement hereunder and for two (2) years after the termination of this
Agreement (the "Applicable Period"), they will not (except (i) for Berty's
service as a director and/or consultant of the companies listed on Exhibit A, or
(ii) on behalf of or with the prior written consent of the Company, which
consent may be withheld in Company's sole discretion), within the world (the
"Area"), either directly or indirectly, on the Consultant's or Xxxxxx Xxxxx'x
own behalf, or on behalf of others, engage in, as a director, officer,
principal, partner, consultant or executive or managerial employee, or provide
any of the same type of services performed on behalf of the Company, to any
Competing Business or own a controlling beneficial interest in a Competing
Business. For purposes of this Section 4, the Consultant and Xxxxxx Xxxxx
acknowledge and agree that the Business of the Company is conducted in the Area.
"Competing Business" means any person, firm, corporation, joint
venture or other business entity which is engaged in the design, production,
marketing, distribution, or provision of software engineering/reengineering of
Year 2000 Compliance Products and Services (the "Business of the Company") (or
any aspect thereof) within the Area.
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"Year 2000 Compliance Products and Services" means software tools,
methodologies, processes and associated services (including without limitation,
program management, analysis, assessment, conversion, testing, quality
assurance, and configuration management) relating to computer software problems
and issues associated with the year 2000.
(b) Agreement Not to Solicit Customers. The Consultant and Michel
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Berty agree that commencing on the Effective Date and continuing through the
Applicable Period, they will not, either directly or indirectly, on the
Consultant's own behalf or in the service of or on behalf of others, solicit or
divert, or attempt to solicit or divert, to a Competing Business, any individual
or entity (i) which is a client or customer of the Company or an Affiliate, (ii)
as to which, to the knowledge of Consultant or Berty, the Company or an
Affiliate is in the process of making a proposal or negotiating for a customer
or client relationship or is discussing or conducting a "pilot", or (iii) with
whom the Company or an Affiliate jointly provides services or products through
alliances or joint ventures to a client or customer during the term of the
Consultant's engagement with the Company.
5. Agreement Not to Solicit Employees.
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The Consultant and Xxxxxx Xxxxx agree that commencing on the Effective
Date and continuing through the Applicable Period, they will not, either
directly or indirectly, on the Consultant's or Xxxxxx Xxxxx'x own behalf or in
the service of or on behalf of others, solicit, divert or hire away, or attempt
to solicit, divert or hire away, to any Competing Business in the Area any
person employed by the Company or an Affiliate, whether or not such employee is
a full-time employee or a temporary employee of the Company or an Affiliate and
whether or not such employment is pursuant to written agreement and whether or
not such employment is for a determined period or is at will.
6. Ownership and Protection of Confidential Information and Trade Secrets.
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(a) Definitions. "Confidential Information" means data and
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information relating to the business of the Company or an Affiliate (which does
not rise to the status of a Trade Secret) which is or has been disclosed to the
Consultant by the Company or an Affiliate or of which the Consultant became
aware as a consequence of or through his relationship to the Company and which
has value to the Company and is not generally known to its competitors.
Confidential Information shall not include any data or information that has been
voluntarily disclosed to the public by the Company (except where such public
disclosure has been made by the Consultant without authorization) or that has
been independently developed and disclosed by others, or that otherwise enters
the public domain through lawful means.
"Trade Secrets" means information, including a formula, pattern,
compilation, program, device, method, technique, or process that: (i) derives
independent economic value, actual or potential, from not being generally known
to, and not being readily ascertainable by proper means by, other persons who
can obtain economic value from its disclosure or use, and (ii) is the subject of
efforts that are reasonable under the circumstances to maintain its secrecy.
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(b) Confidentiality. All Confidential Information and Trade Secrets
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and all physical embodiments thereof received or developed by the Consultant
while engaged by the Company or an Affiliate are confidential to and are and
will remain the sole and exclusive property of the Company or Affiliate. Except
to the extent necessary to perform the duties assigned by the Company or an
Affiliate, the Consultant and Xxxxxx Xxxxx will hold such Confidential
Information and Trade Secrets in trust and strictest confidence, and will not
use, reproduce, distribute, disclose or otherwise disseminate the Confidential
Information and Trade Secrets or any physical embodiments thereof and may in no
event take any action causing or fail to take the action necessary in order to
prevent, any Confidential Information and Trade Secrets disclosed to or
developed by the Consultant to lose its character or cease to qualify as
Confidential Information or Trade Secrets.
(c) Return of Company Property. Upon request by the Company or an
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Affiliate, and in any event upon termination of the engagement of the Consultant
with the Company or an Affiliate for any reason, as a prior condition to
receiving any final fees hereunder (including any payments pursuant to Section
3(e) hereof), the Consultant will promptly deliver to the Company or an
Affiliate all property belonging to the Company or an Affiliate, including,
without limitation, all Confidential Information and Trade Secrets (and all
embodiments thereof) then in the Consultant's or Xxxxxx Xxxxx'x custody, control
or possession.
(d) Survival. The covenants of confidentiality set forth herein will
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apply on and after the date hereof to any Confidential Information and Trade
Secrets disclosed by the Company or an Affiliate, or developed by the Consultant
prior to or after the date hereof. The covenants restricting the use of
Confidential Information will continue and be maintained by the Consultant for a
period of two years following the termination of this Agreement. The covenants
restricting the use of Trade Secrets will continue and be maintained by the
Consultant following termination of this Agreement for so long as permitted by
the Maryland Uniform Trade Secrets Act.
7. Remedies.
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The Consultant and Xxxxxx Xxxxx agree that the covenants and agreements
contained in Sections 4, 5, and 6 hereof are of the essence of this Agreement;
that each of such covenants is reasonable and necessary to protect and preserve
the interests and properties of the Company and the Business of the Company;
that the Company is engaged in and throughout the Area in the Business of the
Company; that irreparable loss and damage will be suffered by the Company should
the Consultant or Xxxxxx Xxxxx breach any of such covenants and agreements; that
each of such covenants and agreements is separate, distinct and severable not
only from the other of such covenants and agreements but also from the other and
remaining provisions of this Agreement; that the unenforceability of any such
covenant or agreement shall not affect the validity or enforceability of any
other such covenant or agreements or any other provision or provisions of this
Agreement; and that, in addition to other remedies available to it, the Company
shall be entitled to specific performance of this Agreement and to both
temporary and permanent injunctions to prevent a breach or contemplated breach
by the Consultant or Xxxxxx Xxxxx of any of such covenants or agreements.
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8. No Set-Off.
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The existence of any claim, demand, action or cause of action by the
Consultant or Xxxxxx Xxxxx against the Company, or any Affiliate of the Company,
whether predicated upon this Agreement or otherwise, shall not constitute a
defense to the enforcement by the Company of any of its rights hereunder. The
existence of any claim, demand, action or cause of action by the Company against
the Consultant or Xxxxxx Xxxxx, whether predicated upon this Agreement or
otherwise, shall not constitute a defense to the enforcement by the Consultant
of any of its rights hereunder; provided, however, that the Company shall have
the right to discontinue payments to the Consultant under Section 3(e) hereof,
as applicable, if the Consultant or Xxxxxx Xxxxx should breach any of their
obligations under Sections 4, 5, or 6 hereof and the Company notifies the
Consultant of that breach.
9. Notice.
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All notices, requests, demands and other communications required
hereunder shall be in writing and shall be deemed to have been duly given if
delivered or if mailed, by United States certified or registered mail, prepaid
to the party to which the same is directed at the following addresses (or at
such other addresses as shall be given in writing by the parties to one
another):
If to the Company: ZMAX CORPORATION
00000 Xxxxxxx Xxxxxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxxx, President
Fax: 000-000-0000
If to the Consultant: MBY Consultant, Inc.
40 Xxxxx'x Path
P. O. Xxx 000
Xxxxxxxxx, Xxx Xxxx 00000
Attn: Xxxxxx Xxxxx, President
Fax: 000-000-0000
If to Xxxxxx Xxxxx: Xxxxxx Xxxxx
40 Xxxxx'x Path
P. O. Xxx 000
Xxxxxxxxx, Xxx Xxxx 00000
Fax: 000-000-0000
Notices delivered in person shall be effective on the date of delivery. Notices
delivered by mail as aforesaid shall be effective upon the third calendar day
subsequent to the postmark date hereof.
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10. Miscellaneous.
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(a) Assignment. Neither this Agreement nor any right of the parties
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hereunder may be assigned or delegated by any party hereto without the prior
written consent of the other party.
(b) Waiver. The waiver by the Company of any breach of this
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Agreement by the Consultant shall not be effective unless in writing, and no
such waiver shall constitute the waiver of the same or another breach on a
subsequent occasion.
(c) Governing Law and Choice of Forum. This Agreement shall be
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governed by and construed in accordance with the internal laws of the State of
Maryland. The parties agree that any appropriate state or federal court located
in Maryland shall have exclusive jurisdiction of any case or controversy arising
under or in connection with this Agreement and shall be a proper forum in which
to adjudicate such case or controversy. The parties expressly consent to
personal jurisdiction and venue in such courts.
(d) Entire Agreement/Amendment. This Agreement embodies the entire
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agreement of the parties hereto relating to the subject matter hereof and
supersedes all oral agreements, and to the extent inconsistent with the terms
hereof, all other written agreements. This Agreement may not be modified,
amended, supplemented or terminated except by a written instrument executed by
the parties hereto.
(e) Severability. Each of the covenants and agreements hereinabove
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contained shall be deemed separate, severable and independent covenants, and in
the event that any covenant shall be declared invalid by any court of competent
jurisdiction, such invalidity shall not in any manner affect or impair the
validity or enforceability of any other part or provision of such covenant or of
any other covenant contained herein.
(f) Captions and Section Headings. Captions and section headings
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used herein are for convenience only and are not a part of this Agreement and
shall not be used in construing it.
(g) Arbitration. Except as provided in Section 7, any dispute
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arising under this Agreement shall be submitted to a single arbitrator selected
by the American Arbitration Association whose rules of arbitration and
conciliation shall apply. The American Arbitration Association shall select an
arbitrator experienced in computer consulting.
[INTENTIONALLY BLANK]
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IN WITNESS WHEREOF, the Company, the Consultant, and Xxxxxx Xxxxx have
each executed and delivered this Agreement as of the date first shown above.
COMPANY:
ZMAX Corporation
/s/ Xxxxxxx X. Xxxxxxx
By: Xxxxxxx X. Xxxxxxx
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Title: President
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[CORPORATE SEAL]
CONSULTANT:
MBY, Inc.
/s/ Xxxxxx Xxxxx
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By: Xxxxxx Xxxxx
Title: President
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[CORPORATE SEAL]
XXXXXX XXXXX:
By: /s/ Xxxxxx Xxxxx
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Xxxxxx Xxxxx
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EXHIBIT "A"
to
CONSULTING AGREEMENT
XXXXXX XXXXX, DIRECTOR AND CONSULTING RELATIONSHIPS
DIRECTOR:
COMPUTRON Application Software
INTERSOLV Client/Server Supplier
MASTECH American and Offshore Service Company
SAPIENS Rapid Application Development Provider
CONSULTANT:
CAP GEMINI GROUP Consultant to the President of Directoire
P.A.C. U.S. Representative of this French
Consulting Company specialized in market
surveys in Europe.
00573615.W51
