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EXHIBIT 10.1
CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT (this "Agreement"), which includes Exhibits A
and B hereto which are incorporated herein by this reference, is entered into by
and between TEKELEC, a California corporation (the "Company"), and XXXXXX
XXXXXXX, a California resident ("Consultant"), and shall become effective as of
August 1, 1996 (the "Effective Date").
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth herein, the receipt and sufficiency of which are hereby acknowledged,
the Company and Consultant agree as follows:
1. CONSULTANCY. The Company hereby retains Consultant, and Consultant
hereby accepts such retention, to consult for the Company upon the terms and
subject to the conditions set forth herein, commencing as of the Effective Date
and continuing until December 1, 1996 or until this Agreement is sooner
terminated in accordance with Section 5 hereof (the "Term"). Consultant shall
render such consulting services to the Company as an independent contractor and
not as an employee, agent, joint venturer or otherwise.
2. DUTIES. Consultant's primary duty and responsibility under this
Agreement shall be to provide consultation and advice to the Company concerning
strategic business planning and related matters as well as such other duties and
responsibilities upon which such parties mutually agree. Consultant agrees (a)
to perform such services diligently and to the best of his abilities and (b) to
make himself available for one to two days per week (as Consultant deems
appropriate or necessary) during the Term (not to exceed a maximum aggregate of
24 days during the Term) to perform such services. Time devoted to Consultant's
duties as a member of the Company's Board of Directors shall not be considered
to be consulting services under this Agreement.
3. COMPENSATION.
3.1 In consideration for his agreement herein to render
consulting services to the Company, the Company agrees (a) to issue to
Consultant as of the Effective Date warrants in the form attached hereto as
Exhibit A and to use reasonable efforts to cause the securities issuable upon
exercise thereof to be registered under the Securities Act of 1933 during the
period they are exercisable; and (b) to compensate Consultant at the rate of
$1,250 per day for each full day during the Term during which Consultant
performs services hereunder.
3.2 No later than 20 days following the last day of each
calendar month during the Term, Consultant shall submit to the President of the
Company a statement of services rendered by Consultant hereunder during the
preceding calendar month, which statement shall set forth the number of days of
consulting services performed, the nature of such services and the amount owed.
The Company agrees to pay to Consultant the full amount due pursuant to each
such statement no later than 10 business days after the Company's receipt of
such statement.
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3.3 Consultant shall not be entitled to receive any
compensation or benefits in connection with his performance of services
hereunder except as expressly provided in Sections 3.1 and 4 hereof.
4. EXPENSES. The Company shall reimburse Consultant for any and all
reasonable out-of-pocket expenses incurred by Consultant in rendering consulting
services hereunder. Such expenses shall include, without limitation, travel,
telephone and telecopy expenses incurred by Consultant in connection with his
performance of services hereunder. All claims for expenses shall be accompanied
by receipts and documented in writing in accordance with the Company's standard
procedures as they may exist from time to time. The Company agrees to reimburse
Consultant for such expenses no later than 10 business days after the Company's
receipt of proper documentation therefor.
5. TERMINATION. This Agreement and Consultant's retention hereunder
shall continue until the earlier to occur of (a) December 1, 1996 or (b) the
death or disability of Consultant.
6. CONFIDENTIALITY. Consultant shall execute on the date hereof and
send to the Company the Confidentiality Agreement attached hereto as Exhibit B.
7. MISCELLANEOUS.
7.1 Notices. Except as otherwise noted herein, all notices
pursuant to this Agreement shall be in writing, shall specifically reference
this Agreement and shall be deemed duly sent and given upon actual delivery to
and receipt by the relevant party (which in the case of the Company shall be the
President).
7.2 Taxes. Consultant is solely responsible for paying when
due all income and other taxes incurred as a result of the compensation paid by
the Company to Consultant for services rendered under this Agreement. Consultant
agrees to defend, indemnify and hold the Company harmless from and against any
and all claims, costs, losses, fees, penalties, interest or damages suffered by
the Company as a result of Consultant's failure to comply with this Section 7.2.
7.3 Legal Advice and Construction of Agreement. Both parties
hereto have received independent legal advice with respect to, and neither has
relied upon the other (or his or its advisors) in entering into, this Agreement.
7.4 Entire Agreement. This Agreement constitutes a single
integrated contract expressing the entire agreement of the parties with respect
to the subject matter hereof and supersedes all prior and contemporaneous oral
and written agreements and discussions with respect to the subject matter
hereof.
7.5 Amendment and Waiver. This Agreement and each provision
hereof may be amended, modified, supplemented or waived only by a written
document specifically identifying this Agreement and signed by both parties
hereto.
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7.6 Specific Performance. Each party hereto may obtain
specific performance to enforce its/his rights hereunder and each party
acknowledges that failure to fulfill its/his obligations to the other party
hereto would result in irreparable harm.
7.7 California Law. This Agreement was negotiated and
delivered within the State of California and the rights and obligations of the
parties hereto shall be construed and enforced in accordance with and governed
by the internal (and not the conflict of laws) laws of California applicable to
the construction and enforcement of contracts between parties resident in
California which are entered into and fully performed in California. Any action
or proceeding arising out of, relating to or concerning this Agreement shall be
filed in the state courts of the County of Los Angeles, State of California or
in a United States District Court in the Central District of California. The
parties hereby waive the right to object to such location on the basis of venue.
7.8 Attorneys' Fees. In the event a lawsuit is instituted by
either party concerning a dispute under this Agreement, the prevailing party in
such lawsuit shall be entitled to recover from the losing party all reasonable
attorneys' fees, costs of suit and expenses (including the reasonable fees,
costs and expenses of appeals), in addition to whatever damages or other relief
the injured party is otherwise entitled to under law or equity.
7.9 Force Majeure. Neither party hereto shall be deemed in
default if its/his performance of obligations hereunder is delayed or becomes
impossible or impracticable by reason of any act of God, war, fire, earthquake,
strike, civil commotion, epidemic or any other cause beyond such party's
reasonable control.
7.10 Successors and Assigns. Neither party may assign this
Agreement or any of its/his rights or obligations hereunder to any third party
or entity, and this Agreement may not be involuntarily assigned or assigned by
operation of law, without the prior written consent of the nonassigning party,
which consent may be given or withheld by such nonassigning party in the sole
exercise of its/his discretion, except that the Company may assign this
Agreement to a corporation acquiring: (1) 50% or more of the Company's capital
stock in a merger or acquisition; or (2) all or substantially all of the assets
of the Company in a single transaction; and except that Consultant may transfer
or assign his rights under this Agreement voluntarily, involuntarily or by
operation of law upon or as a result of his death to his heirs, estate and/or
personal representative(s). Any prohibited assignment or attempted assigned
shall be null and void. This Agreement shall be binding upon and inure to the
benefit of each of the parties hereto and their respective lawful successors and
permitted assigns.
7.11 Limitation of Damages. Except as expressly set forth
herein, in any action or proceeding arising out of, relating to or concerning
this Agreement, including any claim of breach of contract, liability shall be
limited to compensatory damages proximately caused by the breach, and neither
party shall, under any circumstances, be liable to the other party for
consequential, incidental, indirect or special damages, including but not
limited to lost profits or income, even if such party has been apprised of the
likelihood of such damages occurring.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed as of the date first above written.
TEKELEC XXXXXX XXXXXXX
By: /s/ Xxxxxx X. Xxxxxx Signature: /s/ Xxxxxx Xxxxxxx
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Xxxxxx X. Xxxxxx, Chief Executive
Officer and President
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EXHIBIT A
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT
WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO SUCH
SALE OR DISTRIBUTION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT
RELATING THERETO OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED.
Warrants to Purchase
30,000 Shares of Common Stock
TEKELEC
INCORPORATED UNDER THE LAWS OF THE STATE OF CALIFORNIA
Void after August 1, 2001
The Warrants evidenced by this certificate have been issued for good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged.
This Certificate evidences the right of Xxxxxx Xxxxxxx (the "Holder")
to purchase 30,000 shares of Common Stock, without par value (the "Shares"), of
Tekelec, a California corporation (the "Company"), at a price of $9.50 per
Share; subject, however, to the terms and conditions hereinafter set forth.
1. Term of Warrants. The Warrants may not be exercised after the close
of business on August 1, 2001 (the "Warrant Term"), and may be exercised only to
the extent such Warrants are vested and only in accordance with the terms and
conditions hereinafter set forth.
2. Exercise of Warrants. The Warrants shall be exercisable as follows:
(a) Right to Exercise. The Warrants shall vest and become
exercisable cumulatively in 24 equal installments of 1,250 Shares each with one
installment vesting for each full day of consulting services rendered by the
Holder under that certain Consulting Agreement dated as of August 1, 1996
between the Company and the Holder.
(b) Method of Exercise; Payment; Issuance of New Warrants;
Transfer and Exchange. The Warrants may be exercised by the Holder, in whole or
in part, by the surrender of this Certificate, properly endorsed, at the
principal office of the Company, and by the payment to the Company by check of
the then applicable Warrant Price (as such term is hereinafter defined). In the
event of any exercise of the Warrants, certificates for the Shares so purchased
shall be delivered to the Holder within a reasonable time after the Warrants
shall have been so exercised, and unless the Warrants have expired, a new
certificate representing the right to purchase the number of Shares, if any,
with respect to which this Certificate shall not then
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have been exercised shall also be issued to the Holder within such time. All
such new certificates shall be dated the date hereof and shall be identical to
this Certificate except as to the number of Shares issuable pursuant thereto.
(c) Restrictions on Exercise. The Warrants may not be
exercised if the issuance of the Shares upon such exercise would constitute a
violation of any applicable federal or state securities laws or other laws or
regulations. As a condition to the exercise of the Warrants, the Company may
require the Holder to make such representations and warranties to the Company as
may be required by applicable law or regulation.
3. Stock Fully Paid; Reservation of Shares. The Company covenants and
agrees that all Shares will, upon issuance and payment in accordance herewith,
be fully paid, validly issued and nonassessable. The Company further covenants
and agrees that during the Warrant Term the Company will at all times have
authorized and reserved for the purpose of the issue upon exercise of the
Warrants at least the maximum number of Shares as are issuable upon the exercise
of the Warrants.
4. Adjustment of Purchase Price and Number of Shares. The number and
kind of securities purchasable upon the exercise of the Warrants and the Warrant
Price shall be subject to adjustment from time to time upon the happening of
certain events, as follows:
(a) Consolidation, Merger or Reclassification. If the Company
at any time while the Warrants remain outstanding and unexpired shall
consolidate with or merge into any other corporation, or sell all or
substantially all of its assets to another corporation, or reclassify or in any
manner change the securities then purchasable upon the exercise of the Warrants
(any of which shall constitute a "Reorganization"), then lawful and adequate
provision shall be made whereby this Certificate shall thereafter evidence the
right to purchase such number and kind of securities and other property as would
have been issuable or distributable on account of such Reorganization upon or
with respect to the securities which were purchasable or would have become
purchasable under the Warrants immediately prior to the Reorganization. The
Company shall not effect any such Reorganization unless prior to or
simultaneously with the consummation thereof the successor corporation (if other
than the Company) resulting from such Reorganization shall assume by written
instrument executed and mailed or delivered to the Holder, at the last address
of the Holder appearing on the books of the Company, the obligation to deliver
to the Holder such shares of stock, securities or assets as, in accordance with
the foregoing provisions, the Holder may be entitled to purchase.
Notwithstanding anything in this Section 4(a) to the contrary, the prior two
sentences shall be inoperative and of no force and effect if upon the completion
of any such Reorganization the shareholders of the Company immediately prior to
such event do not own at least 50% of the equity interest of the corporation
resulting from such Reorganization, and those Warrants which are unexercised
shall expire on the completion of such Reorganization, if the notice required by
Section 4(e) hereof has been duly given.
(b) Subdivision or Combination of Shares. If the Company at
any time while the Warrants remain outstanding and unexpired shall subdivide or
combine its Common Stock, the Warrant Price shall be adjusted to a price
determined by multiplying the Warrant Price in effect immediately prior to such
subdivision or combination by a fraction (i) the numerator of
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which shall be the total number of shares of Common Stock outstanding
immediately prior to such subdivision or combination and (ii) the denominator of
which shall be the total number of shares of Common Stock outstanding
immediately after such subdivision or combination.
(c) Certain Dividends and Distributions. If the Company at any
time while the Warrants are outstanding and unexpired shall take a record of the
holders of its Common Stock for the purpose of:
(i) Stock Dividends. Entitling them to receive a
dividend payable in, or other distribution without consideration of, Common
Stock, then the Warrant Price shall be adjusted to that price determined by
multiplying the Warrant Price in effect immediately prior to each dividend or
distribution by a fraction (A) the numerator of which shall be the total number
of shares of Common Stock outstanding immediately prior to such dividend or
distribution, and (B) the denominator of which shall be the total number of
shares of Common Stock outstanding immediately after such dividend or
distribution; or
(ii) Distribution of Assets, Securities, etc. Making
any distribution without consideration with respect to its Common Stock (other
than a cash dividend) payable otherwise than in its Common Stock, the Holder
shall, upon the exercise thereof, be entitled to receive, in addition to the
number of Shares receivable thereupon, and without payment of any additional
consideration therefor, such assets or securities as would have been payable to
him as owner of that number of Shares receivable by exercise of the Warrants had
he been the holder of record of such Shares on the record date for such
distribution; and an appropriate provision therefor shall be made a part of any
such distribution.
(d) Adjustment of Number of Shares. Upon each adjustment in
the Warrant Price pursuant to Subsections (b) or (c) (i) of this Section 4, the
number of Shares purchasable hereunder shall be adjusted to that number
determined by multiplying the number of Shares purchasable upon the exercise of
the Warrants immediately prior to such adjustment by a fraction, the numerator
of which shall be the Warrant Price immediately prior to such adjustment and the
denominator of which shall be the Warrant Price immediately following such
adjustment.
(e) Notice. In case at any time:
(i) The Company shall pay any dividend payable in
stock upon its Common Stock or make any distribution, excluding a cash dividend,
to the holders of its Common Stock;
(ii) The Company shall offer for subscription pro rata
to the holders of its Common Stock any additional shares of stock of any class
or other rights;
(iii) There shall be any reclassification of the Common
Stock of the Company, or consolidation or merger of the Company with, or sale of
all or substantially all of its assets to, another corporation; or
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(iv) There shall be a voluntary or involuntary dissolution,
liquidation or winding up of the Company;
then, in any one or more of such cases, the Company shall give to the holder of
the Warrants at least 10 days' prior written notice (or, in the event of notice
pursuant to Section 4 (e) (iii), at least 30 days' prior written notice) of the
date on which the books of the Company shall close or a record shall be taken
for such dividend, distribution or subscription rights or for determining rights
to vote in respect to any such reclassification, consolidation, merger, sale,
dissolution, liquidation or winding up. Such notice in accordance with the
foregoing clause shall also specify, in the case of any such dividend,
distribution or subscription rights, the date on which the holders of Common
Stock shall be entitled thereto, and such notice in accordance with the
foregoing clause shall also specify the date on which the holders of Common
Stock shall be entitled to exchange their Common Stock for securities or other
property deliverable upon such reclassification, consolidation, merger, sale,
dissolution, liquidation or winding up, as the case may be. Each such written
notice shall be given by first-class mail, postage prepaid, addressed to the
Holder at the address of the Holder as shown on the books of the Company.
(f) No Change in Certificate. The form of this Certificate
need not be changed because of any adjustment in the Warrant Price or in the
number of Shares purchasable on its exercise. The Warrant Price or the number of
Shares shall be considered to have been so changed as of the close of business
on the date of adjustment.
5. Fractional Shares. No fractional Shares will be issued in connection
with any subscription hereunder but, in lieu of such fractional Shares, the
Company shall make a cash payment therefor upon the basis of the fair market
value of the Shares.
6. Nontransferability of Warrants. The Warrants may be exercised during
the lifetime of the Holder only by the Holder, and may not be sold, pledged,
assigned, hypothecated, gifted, transferred or disposed of in any manner, in
whole or in part, either voluntarily or involuntarily by operation of law, other
than by will or the laws of descent or distribution, without the prior written
consent of the Company, which consent may be granted or withheld by the Company
in its sole discretion.
7. No Rights as Shareholder. The Holder of the Warrants, as such, shall
not be entitled to vote or receive dividends or be considered a shareholder of
the Company for any purpose, nor shall anything in this Certificate be construed
to confer on the Holder, as such, any rights of a shareholder of the Company or
any right to vote, give or withhold consent to any corporate action, to receive
notice of meetings of shareholders, to receive dividends or subscription rights
or otherwise.
8. Definitions. As used in this Certificate:
(a) "Warrants" shall mean the rights evidenced by this
Certificate.
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(b) "Warrant Price" shall mean $9.50, as adjusted in accordance with
Section 4 hereof.
Dated as of August 1, 1996.
TEKELEC
By:
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Xxxxxx X. Xxxxxx, Chief Executive
Officer and President
Attest:
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Xxxxxx X. Xxxxxx, Secretary
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TEKELEC
SUBSCRIPTION FORM
(To be completed and signed only upon exercise of the Warrants)
TO: Tekelec
00000 Xxxx Xxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Secretary
The undersigned, the holder and registered owner of the attached
Warrants, hereby irrevocably and unconditionally elects to exercise such
Warrants and to purchase * shares of Tekelec Common Stock pursuant to the
terms and conditions thereof, and herewith tenders a check in the amount of
$___________ in full payment of the purchase price for such shares, and requests
that the certificate(s) for such shares be issued in the name of and delivered
to:
(Please print name and address)
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Dated: Signature:
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*Insert here the number of shares called for on the face of the
Warrants (or in the case of partial exercise, that portion as to which the
Warrants is being exercised), without making any adjustment for additional
Common Stock or any other securities or property which, under the adjustment
provisions of the Warrants, may be deliverable upon exercise.
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EXHIBIT B
CONFIDENTIALITY AGREEMENT
AGREEMENT, dated and made effective as of this 1st day of August, 1996,
by and between Tekelec, a California corporation ("Discloser"), and Xxxxxx
Xxxxxxx, a California resident ("Disclosee");
WHEREAS, Discloser intends to provide Disclosee with certain data and
other information of a confidential or proprietary nature to Discloser; and
WHEREAS, Discloser considers certain of this information confidential
but is willing to provide such information to Disclosee on a confidential basis;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. For purposes of this Agreement, the term "Confidential Information"
shall mean that information of Discloser which is disclosed to Disclosee under
the Consulting Agreement, dated the date hereof by and between Discloser and
Disclosee (the "Confidentiality Agreement") and which is in written, graphic,
recorded, photographic or any machine readable form, and which is conspicuously
marked as "confidential," "proprietary" or "sensitive" or in another manner
indicating its confidential and/or proprietary nature or which, in the case of
oral information, is specifically identified as being confidential, proprietary
or sensitive.
2. (a) Disclosee shall use all Confidential Information for purposes in
furtherance of the business objectives of Discloser and shall hold in confidence
and not disclose such Confidential Information in any manner to, or permit the
use thereof by, any person or persons other than persons inside Discloser who
have a legitimate need to know or have access to such Confidential Information
and who are first informed by Disclosee of the confidential nature of the
Confidential Information and agree to maintain the confidentiality thereof.
Disclosee shall use the same degree of care he uses to protect and safeguard the
confidentiality of his own proprietary information to not disclose the
Confidential Information. Disclosee covenants that such degree of care is
reasonably designed to protect the confidentiality of Disclosee's proprietary
and confidential information.
(b) Disclosee shall not be liable for disclosure of any such
Confidential Information if the same:
(i) was in the public domain at the time it was
disclosed;
(ii) was known to Disclosee prior to the time of
disclosure;
(iii) is disclosed with the prior written approval
of Discloser;
(iv) is or becomes publicly known through no
wrongful act of Disclosee;
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(v) was or is independently developed by
Disclosee without any use of the
Confidential Information;
(vi) becomes known to Disclosee from a source
other than Discloser without breach of this
Agreement by Disclosee;
(vii) is or has been furnished by Discloser to
others not in a confidential relationship
with Discloser without restrictions similar
or stricter to those herein on the right of
the receiving party to use or disclose; or
(viii) is disclosed pursuant to the order or
requirement of a court, administrative
agency, or other governmental body.
(c) In the event of a disclosure under subsection (b)(viii)
above, Disclosee shall give Discloser written notice of such order or
requirement as soon as practicable prior to disclosure of the Confidential
Information.
3. The provisions of this Agreement shall supersede the provisions of
any legends which may be affixed to any Confidential Information provided by
Discloser to Disclosee.
4. This document contains the entire agreement between the parties as
to the subject matter hereof and supersedes any previous or contemporaneous
understandings, commitments or agreements, oral or written, as to such subject
matter. This Agreement can only be amended by a written document executed by the
parties hereto.
5. This Agreement shall be governed by the laws of the State of
California.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives as of the date first above
written.
"Discloser" "Disclosee"
TEKELEC XXXXXX XXXXXXX
By: Signature:
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Xxxxxx X. Xxxxxx, Chief Executive
Officer and President
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