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EXHIBIT 10.38
MANAGEMENT SERVICES AGREEMENT
This Management Services Agreement (the "Agreement") is entered into by
and among Visioneer, Inc. ("Seller"), a Delaware corporation, Primax V
Acquisition Corp., a California corporation ("Buyer"), Primax Electronics Ltd.,
a corporation organized under the laws of Taiwan ("Buyer Parent") and J. Xxxxx
Xxxxx ("Xx. Xxxxx") as of December 2, 1998 (the "Effective Date").
RECITALS
A. Pursuant to that certain Asset Purchase Agreement between
Seller, Buyer and Buyer Parent dated as of the date hereof (the "Purchase
Agreement"), Seller is selling to Buyer and Buyer is purchasing from Seller
substantially all of the "Hardware Assets", "Visioneer Name" and "Other Assets"
set forth as Purchased Assets in the Purchase Agreement. Any capitalized terms
not otherwise defined herein shall have those meanings attributed to them in the
Purchase Agreement.
B. Concurrently with the sale of the Purchased Assets to Buyer
pursuant to the Purchase Agreement, Seller is entering into an Agreement and
Plan of Merger between [Saturn] and Seller dated as of the date hereof, whereby
[Saturn] will merge with and into Seller [the "Merger"]. The Merger is subject
to Seller stockholder approval, and will not close until such approval has been
obtained (the "Merger Closing Date").
C. In connection with and at the time of the execution of the
Purchase Agreement, Mr. Smart, the current President and Chief Executive Officer
of Seller, has entered into that certain Employment and Non-Compete Agreement by
and between Mr. Smart and Buyer (the "Employment Agreement"), pursuant to which,
among other things, Buyer has agreed to employ Mr. Smart, and Mr. Smart has
agreed to accept employment with Buyer, in the capacity as the Chief Executive
Officer of Buyer, with such employment to commence upon the Employment
Commencement Date (as defined below). Until that time, Mr. Smart will retain his
current position with Seller, but will also render services to Buyer pursuant to
the terms of this Agreement.
* * * * *
In consideration of the foregoing and the mutual covenants
contained herein, the parties hereto agree as follows:
1. MANAGEMENT SERVICES. During the term of this agreement, Seller will
cause Mr. Smart to provide, and Mr. Smart hereby agrees that he will provide,
management services (the "Services") to Buyer as described on Exhibit A attached
to this Agreement. Seller shall use best efforts to cause Mr. Smart to perform
the Services in a manner satisfactory to Buyer.
2. FEES; SUPPORT. As consideration for the Services to be provided
hereunder and other obligations, Buyer will compensate Seller for the services
of Mr. Smart in accordance with
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the terms set forth in Exhibit B to this Agreement. In addition, Buyer will
provide Mr. Smart with such support facilities and space as may be required in
Buyer's judgment to enable him to properly perform the Services.
3. EXPENSES. Buyer agrees to reimburse any and all expenses incurred by
Seller or Mr. Smart pursuant to the terms set forth in Exhibit B. As a condition
to receipt of reimbursement, Seller or Mr. Smart shall be required to submit to
Buyer reasonable evidence that the amount involved was expended and related to
the Services provided under this Agreement.
4. TERM AND TERMINATION. The obligation to provide the Services
described hereunder shall commence at 12:01 a.m. on the day following the
Closing Date (as that term is defined in the Purchase Agreement) and shall
continue until the Employment Commencement Date, as defined herein (the
"Management Services Period").
5. INDEPENDENT CONTRACTOR. The relationship of Seller and of Mr. Smart
to Buyer will be that of an independent contractor and not that of an employee.
Neither Seller nor Mr. Smart will be eligible for any employee benefits during
the Management Services Period, nor will Buyer make deductions from payments
made to Seller for taxes, all of which will be Seller's responsibility. Seller
agrees to indemnify and hold Buyer harmless from any liability for, or
assessment of, any such taxes imposed on Buyer by relevant taxing authorities.
6. SUPERVISION OF MANAGEMENT SERVICES. All Management Services to be
performed hereunder will be as agreed between Seller or Mr. Smart on the one
hand and Xxxxxxx Xxxxx of Buyer. Mr. Smart will be required to report to Xx.
Xxxxx concerning the Management Services performed under this Agreement. The
nature and frequency of these reports will be left to the mutual agreement of
Xx. Xxxxx and Mr. Smart.
7. EMPLOYMENT COMMENCEMENT DATE. The Employment Commencement Date as
that term is used in this Agreement shall mean 12:01 a.m. on the day following
the earliest of (a) the Merger Closing Date, (b) any day prior to the Merger
Closing Date on which the Agreement and Plan of Merger referred to above is
terminated by either party in accordance with its terms, or (c) March 31, 1999.
On the Employment Commencement Date, Mr. Smart shall become a full-time employee
in accordance with the terms of the Employment Agreement, the employment of Mr.
Smart by Seller shall cease, and Mr. Smart shall resign any and all positions as
an officer of Seller or any successor to Seller.
8. MISCELLANEOUS.
(a) AMENDMENTS AND WAIVERS. Any term of this Agreement may be
amended or waived only with the written consent of the parties.
(b) SOLE AGREEMENT. This Agreement, including the Exhibits
hereto, constitutes the sole agreement of the parties and supersedes all oral
negotiations and prior writings with respect to the subject matter hereof.
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(c) NOTICES. Any notice required or permitted by this
Agreement shall be in writing and shall be deemed sufficient upon receipt, when
delivered personally or by courier, overnight delivery service or confirmed
facsimile, or forty-eight (48) hours after being deposited in the regular mail
as certified or registered mail (airmail if sent internationally) with postage
prepaid, if such notice is addressed to the party to be notified at such party's
address or facsimile number as set forth below, or as subsequently modified by
written notice.
(d) CHOICE OF LAW. The validity, interpretation, construction
and performance of this Agreement shall be governed by the laws of the State of
California, without giving effect to the principles of conflict of laws.
(e) SEVERABILITY. If one or more provisions of this Agreement
are held to be unenforceable under applicable law, the parties agree to
renegotiate such provision in good faith. In the event that the parties cannot
reach a mutually agreeable and enforceable replacement for such provision, then
(i) such provision shall be excluded from this Agreement, (ii) the balance of
the Agreement shall be interpreted as if such provision were so excluded and
(iii) the balance of the Agreement shall be enforceable in accordance with its
terms.
(f) COUNTERPARTS. This Agreement may be executed in
counterparts, each of which shall be deemed an original, but all of which
together will constitute one and the same instrument.
(g) ARBITRATION. Any dispute or claim arising out of or in
connection with any provision of this Agreement will be finally settled by
binding arbitration in San Jose, California in accordance with the rules of the
American Arbitration Association by one arbitrator appointed in accordance with
said rules. The arbitrator shall apply California law, without reference to
rules of conflicts of law or rules of statutory arbitration, to the resolution
of any dispute. Judgment on the award rendered by the arbitrator may be entered
in any court having jurisdiction thereof. Notwithstanding the foregoing, the
parties may apply to any court of competent jurisdiction for preliminary or
interim equitable relief, or to compel arbitration in accordance with this
paragraph, without breach of this arbitration provision. This Section 9(g) shall
not apply to the Confidentiality Agreement.
(h) ADVICE OF COUNSEL. EACH PARTY ACKNOWLEDGES THAT, IN
EXECUTING THIS AGREEMENT, SUCH PARTY HAS HAD THE OPPORTUNITY TO SEEK THE ADVICE
OF INDEPENDENT LEGAL COUNSEL, AND HAS READ AND UNDERSTOOD ALL OF THE TERMS AND
PROVISIONS OF THIS AGREEMENT. THIS AGREEMENT SHALL NOT BE CONSTRUED AGAINST ANY
PARTY BY REASON OF THE DRAFTING OR PREPARATION HEREOF.
[Signature Page Follows]
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The parties have executed this Agreement on the respective dates set
forth below.
VISIONEER, INC. PRIMAX V ACQUISITION CORP.
By: /s/ J. XXXXX XXXXX By:
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Title: President and CEO Title:
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Address: 00000 Xxxxxx Xxxxx Address:
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Xxxxxxx, XX 00000
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Date: Date:
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PRIMAX ELECTRONICS LTD. J. XXXXX XXXXX
By: /s/ J. XXXXX XXXXX
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Title:
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Address: Address: 00000 XXXXX Xx
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Xxxxxxxx, XX 00000
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Date: Date:
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SIGNATURE PAGE TO MANAGEMENT SERVICES AGREEMENT
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The parties have executed this Agreement on the respective dates set
forth below.
VISIONEER, INC. PRIMAX V ACQUISITION CORP.
By: By: /s/ XXXXXXX XXXXX
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Title: Title: Xxxxxxx Xxxxx, President and CEO
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Address: Address:
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Date: Date:
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PRIMAX ELECTRONICS LTD. J. XXXXX XXXXX
By: /s/ XXXXXXX XXXXX
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Title: Xxxxxxx Xxxxx,
President and CEO
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Address: Address:
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Date: Date:
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SIGNATURE PAGE TO MANAGEMENT SERVICES AGREEMENT
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EXHIBIT A
DESCRIPTION OF MANAGEMENT SERVICES
Seller will make available to Buyer the management services of Xxxxx Xxxxx, who
shall perform services commensurate with the position of President and Chief
Executive Officer of the Hardware Business, in the same manner as Mr. Smart
performed such services for Seller prior to consummation of the Purchase
Agreement.
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EXHIBIT B
COMPENSATION
In consideration of the performance of the Management Services
set forth in Exhibit A, Buyer shall pay to Seller a fee payable as follows:
(1) Management Service Fees. Subject to reimbursement of
expenses as set forth in Section (2) below, during the Management Services
Period Buyer shall reimburse Seller for one-half of Mr. Smart's current salary,
payable on a [bi-weekly] basis.
(2) Direct Expenses. Buyer shall reimburse Seller for all
direct expenses incurred by Seller or Mr. Smart on behalf of Buyer in connection
with performance of the Management Services under this Agreement, in accordance
with Buyer's standard expense reimbursement policies. Payment shall be made
within fifteen (15) days of receipt of invoice.
