EXHIBIT 10.56
TRANSITIONAL SERVICES AGREEMENT
This Transitional Services Agreement (the "Agreement") is made and
entered into by and between Xxxxxxx Xxxxxxxxxxx ("Xx. Xxxxxxxxxxx") and
Breakaway Solutions, Inc. ("Breakaway" or the "Company"). This Agreement shall
be effective on the date when it becomes fully executed by both parties (the
"Effective Date").
WITNESSETH:
WHEREAS, Xx. Xxxxxxxxxxx is employed by Breakaway pursuant to a letter
agreement between the parties dated January 25, 2000 (the "Employment
Agreement"); and
WHEREAS, Xx. Xxxxxxxxxxx and Breakaway entered into a Restricted Stock
Agreement dated January 26, 2000 (the "Restricted Stock Agreement"); and
WHEREAS, pursuant to the Restricted Stock Agreement, Xx. Xxxxxxxxxxx
and Breakaway executed Joint Escrow Instructions dated January 26, 2000 (the
"Joint Escrow Instructions") to State Street Bank and Trust Company as Escrow
Agent (the "Escrow Agent"); and
WHEREAS, Xx. Xxxxxxxxxxx entered into a Non-Disclosure,
Non-Solicitation and Assignment Agreement with Breakaway as of January 26, 2000
(the "NDA"); and
WHEREAS, Xx. Xxxxxxxxxxx desires to resign from employment with
Breakaway and from her position as an officer of Breakaway; and
WHEREAS, Breakaway desires to obtain transitional assistance from
Xx. Xxxxxxxxxxx;
NOW, THEREFORE, in consideration of the mutual covenants contained in
this Agreement, Xx. Xxxxxxxxxxx and Breakaway agree as follows:
1. TRANSITIONAL SERVICES. Effective from and after the Effective Date
until the termination of her employment, Xx. Xxxxxxxxxxx'x duties and
responsibilities as an officer and employee of Breakaway shall be to use her
reasonable best efforts to perform Transitional Services for Breakaway.
"Transitional Services" means assisting with establishing Breakaway's procedures
and processes for closing unneeded facilities, settling leases, old payables,
and bad debts, and engaging in other associated tasks required for closing down
portions of Breakaway's business. Breakaway shall not require Xx. Xxxxxxxxxxx to
perform responsibilities other than Transitional Services, provided that Xx.
Xxxxxxxxxxx may voluntarily agree to perform other responsibilities. For
purposes of the Employment Agreement, "the duties and responsibilities inherent
in the position and such other duties and responsibilities as the Company's
Board of Directors shall from time to time reasonably assign to you" shall mean
Transitional Services.
For purposes of the Restricted Stock Agreement, Xx. Xxxxxxxxxxx'x "duties and
responsibilities as an employee of the Company" shall mean Transitional
Services.
2. CONTINUED EMPLOYMENT. Provided that Xx. Xxxxxxxxxxx remains employed
with Breakaway through June 1, 2001 and subject to mutual agreement of both Xx.
Xxxxxxxxxxx and the Company on a budget, revenue targets, time frame and action
plan for the Transition Services by not later than April 27, 2001, any
termination of her employment with Breakaway on or after that date, regardless
of whether initiated by Xx. Xxxxxxxxxxx or Breakaway, shall be considered to be
a termination of her employment by Breakaway without Cause for purposes of the
Employment Agreement and the Restricted Stock Agreement including, without
limitation, for purposes of the payment of six months of salary continuation
pursuant to the Employment Agreement and the termination of the Purchase Option
under the Restricted Stock Agreement. In the event of termination of the
Purchase Option, promptly after notice from Xx. Xxxxxxxxxxx, Breakaway shall
enter into a joint written instruction to the Escrow Agent to release to Xx.
Xxxxxxxxxxx all Shares (as defined in the Restricted Stock Agreement) then held
by the Escrow Agent. The effect of any termination of Xx. Xxxxxxxxxxx'x
employment before June 1, 2001 for purposes of the Employment Agreement and the
Restricted Stock Agreement shall be governed by the terms of the Employment
Agreement and the Restricted Stock Agreement as modified pursuant to Section 1
above.
3. CONTINUED INDEMNIFICATION AND INSURANCE RIGHTS.
(a) Breakaway acknowledges that Xx. Xxxxxxxxxxx has certain rights
to indemnification pursuant to and subject to the certificate of
incorporation, the articles of incorporation and/or the by-laws of each
of Breakaway, its subsidiary, Eggrock Partners, Inc., and the
predecessor of Eggrock Partners, Inc., Eggrock Partners, LLC (either or
both of Eggrock Partners, Inc. and Eggrock Partners, LLC are referred
to below as "Eggrock") (together, the "Indemnification Provisions"). In
the event that there is any modification of any of the Indemnification
Provisions that would otherwise have the effect of reducing Xx.
Xxxxxxxxxxx'x rights to indemnification from those rights that she
would have in the absence of such a modification under the current
Indemnification Provisions as an officer or former officer of Breakaway
and as a former officer and director of Eggrock, Breakaway shall
indemnify Xx. Xxxxxxxxxxx for any and all liability, damages,
penalties, assessments, attorney's fees, defense costs and/or expenses
(collectively "Liabilities") that she may incur for which she would
otherwise have been insured or indemnified in the absence of any such
modification of any of the Indemnification Provisions.
(b) Breakaway specifically acknowledges that Xx. Xxxxxxxxxxx is
entitled to full indemnification from Breakaway for any Liabilities and
for the advancement of attorney's fees, defense costs and expenses that
she incurs to the fullest extent permissible under the By-laws with
respect to the court action entitled XXXX XXXX V. EGGROCK PARTNERS,
LLC, BREAKAWAY SOLUTIONS, INC. AND XXXXXXX XXXXXXXXXXX, Middlesex
Superior Court, Civil Action No. 00-5441-E, including any appeals and
related proceedings (the "Xxxx Litigation"), except to the extent that
Xx. Xxxxxxxxxxx receives any insurance payments with respect to any
such amounts.
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(c) Breakaway acknowledges that Xx. Xxxxxxxxxxx has certain rights
to insurance coverage pursuant to and subject to the various directors'
and officers' liability insurance policies currently held by Breakaway
and/or Eggrock (collectively, the "D&O Policies"). In the event that
there is any modification of any of the D&O Policies that would
otherwise have the effect of reducing Xx. Xxxxxxxxxxx'x rights to
insurance from those rights that she would have in the absence of such
a modification under the current D&O Policies as an officer or former
officer of Breakaway and as a former officer and director of Eggrock,
Breakaway shall indemnify Xx. Xxxxxxxxxxx for any and all liabilities
that she may incur for which she would otherwise have been insured in
the absence of any such modification of any of the D&O Policies.
4. CONTINUATION OF AGREEMENTS; INTEGRATION. The Employment Agreement
and the Restricted Stock Agreement shall continue in effect in accordance with
their terms except as modified by this Agreement. The NDA and the Joint Escrow
Instructions shall continue in effect in accordance with their terms
notwithstanding this Agreement. Nothing in this Agreement is intended to affect
Breakaway's commitments or any other terms of the two letter agreements related
to representation of the defendants in the Xxxx Litigation dated January 25,
2001 and signed by, INTER ALIA, R. Xxxx Xxxxxx, P.C. of the law firm of Xxxxxxx
Procter LLP. All other agreements between the parties concerning any subject
matter of this Agreement are superseded, null and void.
5. WAIVER. No waiver of any provision hereof shall be effective unless
made in writing and signed by the waiving party. The failure of either party to
require the performance of any term or obligation of this Agreement, or the
waiver by either party of any breach of this Agreement, shall not prevent any
subsequent enforcement of such term or obligation or be deemed a waiver of any
subsequent breach.
6. NOTICES. Any notices, requests, demands and other communications
provided for by this Agreement shall be sufficient if in writing and delivered
in person or sent by a nationally recognized overnight courier service or by
registered or certified mail, postage prepaid, return receipt requested, to Xx.
Xxxxxxxxxxx at the last address Xx. Xxxxxxxxxxx has provided to Breakaway or, in
the case of Breakaway, at its main offices, attention of the Chief Executive
Officer, and shall be effective on the date of delivery in person or by courier
or three (3) days after the date mailed.
7. AMENDMENT. This Agreement may be amended or modified only by a
written instrument signed by Xx. Xxxxxxxxxxx and by a duly authorized
representative of Breakaway.
8. GOVERNING LAW. This is a Massachusetts contract and shall be
construed under and be governed in all respects by the laws of the Commonwealth
of Massachusetts, without giving effect to the conflict of laws principles of
such Commonwealth.
9. CONSENT TO JURISDICTION. Both parties agree that the state and
federal courts located in the Commonwealth of Massachusetts shall have sole and
exclusive jurisdiction over the parties and over any dispute concerning this
Agreement. Without limiting the foregoing, the parties submit to personal
jurisdiction of such courts.
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10. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be taken to be
an original; but such counterparts shall together constitute one and the same
document.
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IN WITNESS WHEREOF, this Agreement has been executed as a sealed
instrument by Breakaway, by its duly authorized officer, and by Xx. Xxxxxxxxxxx.
BREAKAWAY SOLUTIONS, INC.
By: /s/ XXXXXXX XXXXXX
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Date
/s/ Xxxxxxx Xxxxxxxxxxx
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XXXXXXX XXXXXXXXXXX
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Date
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