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EXHIBIT 10.4
CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT (the "Agreement") is made and entered into as
of the 1st day of August, 1997 (the "Effective Date"), by and between VIASOFT,
INC., a Delaware corporation (the "Company"), and XXXXXXX X.
XXXX, an individual ("Consultant").
WITNESSETH:
WHEREAS, Consultant is currently employed by the Company as Executive
Vice President and Chief Technology Officer;
WHEREAS, Consultant desires, as of the Effective Date, to resign his
position as Executive Vice President and Chief Technology Officer in order to
allow Consultant more time to pursue other personal and professional interests;
WHEREAS, the Company is willing to accept such resignations but
desires, commencing on the Effective Date, to retain the services of Consultant
for the purpose of providing consulting advice in the areas of business and
product development, strategic planning and technology acquisitions; and
WHEREAS, Consultant desires to provide such services to the Company,
commencing immediately upon the Effective Date, on the terms and conditions of
this Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements set forth herein, the Company and Consultant, intending
to be legally bound, hereby agree as follows:
1. Engagement of Consultant. From and after the Effective Date and for
the Term of this Agreement (as defined in Section 2), the Company hereby retains
Consultant to provide the consulting services described on EXHIBIT A, and
Consultant hereby agrees to provide such services to the Company, all upon the
terms and conditions set forth in this Agreement.
2. Term. Subject to the terms and conditions of this Agreement,
Consultant agrees to provide to the Company the consulting services described on
EXHIBIT A during the period commencing on the Effective Date and ending on
August 31, 1998, which term may be extended from time to time pursuant to a
written instrument executed by the Company and Consultant. As used herein, the
"Term" means the initial term, and any extensions thereof, during which
Consultant agrees to provide consulting services to the Company.
3. Consulting Services. The services to be provided by Consultant
hereunder shall consist of the consulting services described in EXHIBIT A and
such other consulting service as the Board of Directors and/or the Chief
Executive Officer of the Company may reasonably request from time to time in
connection with the business of the Company. Consultant shall devote such
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time, attention and energies to the business of the Company as is reasonably
necessary in order to provide the services described herein; provided, that the
parties contemplate that Consultant shall devote approximately eighty (80) hours
per month to performing such services.
4. Compensation. During the Term, the Company shall pay the following
compensation to Consultant:
4.1 Retainer. A retainer (the "Consulting Fee") to Consultant
in the amount of $156,000 for the 13-month Term, which Consulting Fee
shall be paid on a monthly basis in equal installments of $12,000 in
arrears.
4.2 Fees for Additional Hours. The parties contemplate that
Consultant shall devote approximately eighty (80) hours per month to
performing the consulting services. Consultant shall document the hours
worked and shall submit these records to the CEO on a monthly basis.
The parties acknowledge that the services may require variable hours
and that some weeks will be full-time and others will not be worked at
all but they anticipate that the average hours worked by Consultant
shall be approximately 80 hours per month. Hours worked by the
Consultant over and above the average hours contemplated will be
compensated at the rate of $300 per hour, calculated as follows:
If the total hours worked by Consultant during the period August
1, 1997 through January 31, 1998 are more than 480 hours, the
additional hours will be paid at $300 per hour and shall be paid
no later than February 28, 1998; and
If the total hours worked by Consultant during the period
February 1, 1998 through August 31, 1998 are more than 560 hours,
the additional hours will be paid at $300 per hour and shall be
paid no later than September 30, 1998.
4.3 Business Expenses. In addition, during the Term Consultant
shall be entitled to receive prompt reimbursement for all reasonable
out-of-pocket expenses incurred in the reasonable discretion of
Consultant in connection with the due and proper performance of his
duties hereunder in accordance with the Company's regular expense
reimbursement practices. Consultant may choose, in his discretion, to
travel business class for any international travel.
5. Other Benefits; Stock Option Rights.
5.1 Benefits. During the Term, the Company shall provide
Consultant those additional benefits described in EXHIBIT B hereto.
5.2 Existing Stock Rights. Consultant and the Company confirm
and agree that as of immediately prior to the Effective Date, all of
Consultant's vested and unvested rights
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to acquire stock or other securities of the Company are accurately and
completely set forth on EXHIBIT B hereto.
5.3 Amendment of Stock Rights. Each stock option agreement
described in EXHIBIT B is hereby amended to provide that during the Term of this
Agreement, the options thereunder shall continue to vest and shall continue to
be exercisable, in accordance with the terms and conditions thereof, as if
Consultant's employment with the Company had not terminated. Each restricted
stock purchase agreement described on EXHIBIT B is hereby amended to provide
that during the Term of this Agreement, the Company will not exercise its
repurchase option thereunder (which shall be tolled during the Term) and the
shares subject thereto shall continue to be released from the Company's
repurchase option on the schedule therein, as if Consultant's employment with
the Company had not terminated. Termination or expiration of this Agreement
shall be treated in the same manner as termination of employment under such
stock option agreements and restricted stock purchase agreements. Consultant
acknowledges and agrees that as a result of the foregoing amendments, any
incentive stock options described on EXHIBIT B shall hereafter be treated as
non-qualified stock options.
6. Nature of Relationship. Consultant acknowledges and agrees that he
is an independent contractor and will not act as an agent of the Company nor be
deemed an employee of the Company for any purposes, including without limitation
for the purposes of any employee benefit programs, income tax withholding,
F.I.C.A. taxes, unemployment benefits, or otherwise. Consultant shall not enter
into any agreement or incur any obligations on behalf of the Company, or commit
the Company in any manner without the Company's prior written consent. As an
independent contractor, Consultant understands and agrees that he is solely
responsible for the control and supervision of the means by which his
responsibilities are fulfilled. Such means are subject to Consultant's
discretion, which discretion must be exercised consistent with the terms of this
Agreement. The Company shall not enter into any agreement or incur any
obligations on Consultant's behalf, or commit Consultant in any manner without
Consultant's prior written consent.
7. Termination.
7.1 Termination Because of Death. This Agreement shall
terminate if Consultant shall die. The termination of this Agreement pursuant to
this Section 7.1 shall be effective at the time of death.
7.2 Termination by Consultant for Breach. This Agreement may
be terminated by Consultant if the Company commits a material breach of the
terms and conditions of this Agreement and the Company fails to cure such breach
within thirty (30) days after delivery by Consultant to the Company of a written
notice setting forth the nature and extent of such breach. The termination of
this Agreement pursuant to this Section 7.2 shall be effective at a time
specified by Consultant that is no less than sixty (60) days after the aforesaid
cure period.
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7.3 Termination by the Company. This Agreement may be
terminated by the Company in any of the following circumstances:
(i) for "Cause" (as defined in Section 17);
(ii) if Consultant shall materially breach this Agreement or
habitually neglect his duties hereunder;
(iii) if Consultant shall be unable to perform his material duties
hereunder owing to illness or incapacity for sixty (60)
consecutive days; or
(iv) if the Company determines that it no longer requires the
services of Consultant for any other reason.
The termination of this Agreement pursuant to this Section 7.3 shall be
effective (A) in the case of a termination of this Agreement pursuant to
subsection (i) or (ii) above, immediately upon receipt by Consultant of written
notice of termination from the Company; or (B) in the case of a termination
pursuant to subsection (iii) or (iv) above, 30 days after receipt by Consultant
of written notice of termination from the Company.
7.4 Termination Because of Expiration. This Agreement shall
terminate upon the expiration of the Term, as such may be extended from time to
time in accordance with Section 2.
7.5 Payments Upon Termination Without Cause or for Company
Breach. If this Agreement is terminated by Consultant pursuant to Section 7.2 or
by the Company pursuant to Section 7.3(iv), the Company shall pay to Consultant
liquidated damages and severance equal to $72,000 (representing six months of
Consulting Fee compensation under Section 4), shall accelerate the vesting of
all options that would vest as of the date six months after the termination date
and release all shares from the Company's repurchase option that would be
released as of date six months after the termination date with respect to the
restricted stock, and shall reimburse Consultant for all expenses incurred by
Consultant through the date of termination for which Consultant is entitled to
reimbursement under Section 4.
7.6 Payments Upon Other Termination; Death, Disability or
Expiration. If this Agreement is terminated (i) upon the death of Consultant
pursuant to Section 7.1, (ii) pursuant to Section 7.3(i), 7.3 (ii) or 7.3(iii),
or (iii) upon the expiration of the Term pursuant to Section 7.4, the Company
shall pay to Consultant (or, if applicable, his personal representative) the
Consulting Fee through the date of termination and all expenses incurred by
Consultant through the date of termination for which Consultant is entitled to
reimbursement in accordance with Section 4.
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7.7 No Waiver. The failure or delay by either party hereto to
exercise its right to terminate this Agreement with respect to any one or more
of the matters referred to in this Section 7 shall not be taken or held to be a
waiver by such party of its right of termination of this Agreement in respect to
such matter or any subsequent matter.
7.8 Exclusive Remedy. Except as expressly provided in this
Section 7, upon the expiration or termination of this Agreement, the Company
shall not have any liability or obligation of any kind or character to
Consultant under the terms of this Agreement or in connection with the
expiration or termination hereof.
7.9 Surviving Obligations. Upon any termination or expiration
of this Agreement, Consultant shall continue to be subject to the provisions of
Sections 9, 10, 11, 13, 15 and 16 (it being understood and agreed that such
provisions shall survive any such termination or expiration and shall continue
in full force and effect thereafter).
8. Consultant's Warranties. Consultant hereby warrants that no other
party has exclusive rights to its services in the specific areas described
herein and that Consultant is in no way compromising any rights or trust
relationships between any other party and Consultant, or creating a conflict of
interest, or any possibility thereof, for Consultant or for the Company.
Consultant further warrants that all services provided hereunder: (i) will be
performed in accordance with all applicable Federal, State, or local laws,
regulations and executive orders; and (ii) that performance of Consultant's
obligations hereunder will not result in a breach or default under any agreement
with or obligation to any third party, or in infringement of any intellectual
property rights of any third party. Consultant agrees to indemnify and hold the
Company harmless from any and all claims of other parties, arising out of or
related in any way to any breach of these warranties.
9. Safeguarding Proprietary Information and Other Company Documents and
Materials.
9.1 Ownership; Nondisclosure. All Proprietary Information of
the Company received by Consultant shall remain the exclusive property of the
Company. During and following the Term, Consultant shall not use for his own or
another's benefit or purposes, or disclose or communicate to any Person,
directly or indirectly, any Proprietary Information of any kind concerning any
matters affecting or relating to the Company or its business, EXCEPT as strictly
required to carry out the internal business of the Company consistent with its
policies, or as expressly authorized in writing in advance on behalf of the
Company.
9.2 Third Parties' Rights. Consultant agrees not to use or
disclose to the Company, or induce or cause the Company to use, any Proprietary
Information belonging to any Person without the prior written consent of that
Person. If Consultant uses his own Inventions, Trade Secrets or other
Proprietary Information, Consultant will automatically confer on the Company the
unrestricted right to use freely all of those matters used.
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9.3 Use and Return of Information, Documents and Things.
Consultant agrees that all information, documents and things (including, but not
limited to, printouts, disks, tapes, programs, documentation, reports, records,
notes, supplies, equipment, drawings, designs, and all business, product,
marketing and sales information) which Consultant makes or which come into his
possession or control by reason of the consulting arrangement created under this
Agreement are the property of the Company. Consultant agrees not to use them in
any way except in the regular course of the Company's internal business and
consistent with its policies and Consultant will return them to the Company
promptly upon any termination of this Agreement. Consultant will not deliver,
reproduce, or in any way allow any information, documents or things to be
delivered or used by any Person without the specific direction or consent of the
Company. Consultant will not take or retain originals or copies of any
information, documents or things of the Company.
9.4 Other Obligations. Consultant acknowledges that the
Company from time to time may have agreements with other Persons including the
U.S. Government, or agencies thereof, which impose obligations or restrictions
on the Company regarding Proprietary Information or regarding the confidential
nature of their work. Consultant agrees to be bound by all such obligations and
restrictions and to take all action necessary to discharge the obligations of
the Company thereunder, including signing such other confidentiality agreements
as may be required by other Persons as a condition to the Company obtaining or
using Proprietary Information.
10. Intellectual Property Rights.
10.1 Assignment. Consultant agrees that any Intellectual
Property which it conceives, creates or reduces to practice while providing
consulting services for the Company pursuant to this Agreement, either alone or
with the help of others, belongs to the Company if it (i) is made by use of the
Company's property, staff, facilities, or Proprietary Information or on Company
time, (ii) relates to the Company's actual or anticipated business, research or
development, or (iii) results from or is suggested by, any work which Consultant
performs for the Company, and Consultant hereby assigns all right, title and
interest in this Intellectual Property to the Company or its nominee. Consultant
also agrees that the Company has the right (but not the obligation) to patent,
copyright, keep as a trade secret or otherwise deal with this Intellectual
Property as the Company chooses. Consultant agrees to assign to the Company or
its nominee all rights which Consultant may possess in any Intellectual Property
of the Company regardless of where or how created where the Company is required
to grant those rights to the United States Government or any of its agencies or
to any third party.
If any Intellectual Property relating in any manner to the actual or
anticipated business, research or development of the Company is disclosed by
Consultant to any Person within six (6) months after the termination of this
Agreement, it shall be conclusively presumed that such Intellectual Property was
conceived or resulted from developments made during the period of
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Consultant's consulting relationship with the Company and Consultant agrees that
any such Intellectual Property will belong to the Company. Consultant agrees
that any patent application filed within six (6) months after termination of
this Agreement that (i) is made by use of the Company's property, staff,
facilities, or Proprietary Information or on Company time, (ii) relates to the
Company's actual or anticipated business, research or development, or (iii)
results from or is suggested by, any work which Consultant performs for the
Company shall be conclusively presumed to relate to an Invention made during the
term of Consultant's consulting relationship with the Company. All works of
authorship which Consultant creates under this Section 10.1 are intended to be
and will be deemed "works for hire" within the copyright laws, meaning that the
Company will be the owner of the copyrights.
10.2 Disclosure. To permit the Company to claim rights to
which it may be entitled under this Agreement, Consultant agrees to disclose
promptly and in writing to the Company, in confidence, all Intellectual Property
which Consultant (alone or with others) conceives, makes or creates during the
course of this Agreement, that (i) is made by use of the Company's property,
staff, facilities, or Proprietary Information or on Company time, (ii) relates
to the Company's actual or anticipated business, research or development, or
(iii) results from or is suggested by, any work which Consultant performs for
the Company whether or not Consultant considers it patentable or otherwise
protectable. Consultant agrees that this Intellectual Property will be deemed
the Company's Proprietary Information for purposes of Consultant's nondisclosure
obligations under Section 9.1, beginning on the date of its conception or
creation. Consultant agrees to keep current and complete records concerning all
such Intellectual Property which Consultant develops (which records shall be the
Company's property) and to deliver the records to the Company upon written
request.
10.3 Assistance. Consultant agrees, at any time while this
Agreement is in effect or thereafter, on request of the Company and at the
Company's expense, to execute specific assignments in favor of the Company or
its nominee of any of the Intellectual Property covered by this Section 10, and
to execute all papers and perform all lawful acts the Company considers
necessary, for the procurement, protection from infringement, and enforcement of
patents or copyrights of the United States and foreign countries or other forms
of protection and for the transfer of any interest Consultant may have in such
patents, copyrights or other forms of protection to the Company or its nominee.
Consultant agrees, at any time while this Agreement is in effect and thereafter,
on the request of the Company, to execute all documents and assist at the
Company's expense in the preservation or exercise of all of the Company's
interests arising under this Agreement.
10.4 Consultant's Rights. Consultant will retain all rights to
any Intellectual Property not belonging to or assignable to the Company under
this Section
11. Non-Competition; Solicitation of Customers and Solicitation of
Employees.
11.1 Non-Competition.
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11.1.1 Consultant agrees that, while this Agreement
is in force and for a period of six (6) months thereafter, Consultant shall not,
directly or indirectly, engage in competition with the Company within any state
in the United States, or any country outside of the United States in which the
Company is then conducting its business (the United States and such countries
being the "Territory"), in any manner or capacity (e.g., as a management
consultant, principal, partner, owner, officer, director, stockholder or
management employee).
11.1.2 Ownership by Consultant, as a passive
investment, of less than 1% of the outstanding shares of capital stock of any
corporation listed on a national securities exchange or publicly traded in the
over-the-counter market shall not constitute a breach of this Section 11.
11.1.3 Consultant further agrees that, while this
Agreement is in force and for six (6) months after his termination, he will not,
directly or indirectly, assist or encourage any other person in carrying out,
directly or indirectly, any activity that would be prohibited by this Section 11
if such activity were carried out by Consultant, either directly or indirectly,
and in particular Consultant agrees that he will not, directly or indirectly,
induce any employee or consultant of the Company to carry out, directly or
indirectly, any such activity.
11.2 Agreement Not to Solicit Customers. Consultant agrees
that while this Agreement is in force and for a period of twelve (12) months
thereafter, he will not, either directly or indirectly, on his own behalf or in
the service or on behalf of others, solicit, divert or appropriate, or attempt
to solicit, divert or appropriate, to any competing business (i) any person or
entity whose account with the Company was sold or serviced (including
maintenance) by the Company during the twelve (12) months preceding the
termination of this Agreement, or (ii) any person or entity whose account with
the Company has been directly solicited at least twice by the Company within the
twelve (12) month period prior to the date of termination of this Agreement.
11.3 Agreement Not to Solicit Employees and Contractors.
Consultant agrees that while this Agreement is in force and for a period of nine
(9) months thereafter, he will not, either directly or indirectly, on his own
behalf or in the service or on behalf of others solicit, divert or hire away, or
attempt to solicit, divert or hire away any person then employed by the Company
or then serving as a consultant, sales representative or distributor of the
Company.
11.4 Reformation. In the event that any provision in this
Section 11 is held to be over broad as written, such provision shall be deemed
amended to narrow its application to the extent necessary to make the provision
enforceable to the fullest extent allowable. Consultant and the Company hereby
agree that such amendment shall be accomplished as follows:
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(i) In the case of duration, the length of the covenant or
provision shall be reduced in increments of one (1) month each
until it is of the greatest duration as may be enforceable
under applicable law; and
(ii) In the case of geographic scope, the geographic scope of the
covenant or provision shall be reduced until it is of the
greatest geographic scope as may be enforceable under
applicable law, which reduction shall be effected by
eliminating in the following order, one by one, countries
outside the United States, beginning with the country in which
the Company received the least volume of gross revenue over
the prior six (6) months, and continuing in the inverse order
ranked by the Company's gross revenue over the prior six (6)
months within each country until such scope is enforceable,
and then, if necessary, by eliminating in the following order,
one by one, individual States within the United States,
beginning with the State in which the Company received the
least volume of gross revenue over the prior six (6) months,
and continuing in the inverse order ranked by the Company's
gross revenue over the prior six (6) months within each State
until such scope is enforceable, and then, if necessary and
applicable, by eliminating in the following order the counties
in the State of Arizona, beginning with the county in which
the Company received the least gross revenue over the prior
six (6) months, and continuing in the inverse order ranked by
the Company's gross revenue over the prior six (6) months
within each county in Arizona until such scope is enforceable.
11.5 Reasonableness. Consultant and the Company agree that the
covenants set forth in this Section 11 are appropriate and reasonable when
considered in light of the nature and extent of the Company's business.
Consultant acknowledges that: (i) the Company has a legitimate interest in
protecting the Company's business activities; (ii) the covenants set forth
herein are not oppressive to Consultant and contain reasonable limitations as to
time, scope, geographical area and activity; (iii) the covenants do not harm in
any manner whatsoever the public interest; (iv) Consultant can earn a livelihood
without violating any of the covenants set forth herein; and (v) Consultant has
received and will receive substantial consideration for agreeing to such
covenants, including without limitation the consideration received and to be
received by Consultant under this Agreement.
11.6 Notice to Future Employers. For the period of twelve (12)
months following the Term, Consultant shall provide a copy of this Agreement to
any future or prospective employer (or consulting client) of Consultant and
agrees that the Company also may do so.
12. Subcontracting and Assignments by Consultant. It is understood and
agreed that this Agreement is for the rendering of consulting services by
Consultant who is acting as an independent contractor. Consultant may not assign
any rights or obligations under this
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Agreement or subcontract any part or all of the services to be provided without
the prior written consent of the Company.
13. Surrender of Records and Property. Upon termination or expiration
of this Agreement, Consultant shall deliver promptly to the Company all records,
manuals, books, blank forms, documents, letters, memoranda, notes, notebooks,
reports, data, tables, calculations or copies thereof, which are the property of
the Company and which relate in any way to the business, products, practices or
techniques of the Company, and all other property, Trade Secrets and Proprietary
Information of the Company, including, but not limited to, all documents which
in whole or in part contain any Trade Secrets or Proprietary Information of the
Company, which in any of these cases are in Consultant's possession or under
Consultant's control.
14. Assignment. This Agreement shall not be assignable, in whole or in
part, by either party without the written consent of the other party, except
that the Company may, without the consent of Consultant, assign its rights and
obligations under this Agreement to any corporation, firm or other business
entity: (i) with or into which the Company may merge or consolidate; (ii) to
which the Company may sell or transfer all or substantially all of its assets;
or (iii) which controls, is controlled by or is under common control with, the
Company, where control means the ownership of 50% or more of the equity
investment and of the voting power of an entity.
15. Injunctive Relief. Consultant agrees that it would be difficult to
compensate the Company fully for damages for any violation of the provisions of
this Agreement, including without limitation the provisions of Sections 9, 10
and 11, which violations would cause the Company irreparable harm. Accordingly,
Consultant specifically agrees that the Company shall be entitled to temporary
and permanent injunctive relief to enforce the provisions of this Agreement.
This provision with respect to injunctive relief shall not, however, diminish
the right of the Company to claim and recover damages in addition to injunctive
relief.
16. Dispute Resolution. If there shall be any dispute between the
Company and Consultant whatsoever, the dispute shall be resolved in accordance
with the dispute resolution procedures set forth in EXHIBIT C hereto, the
provisions of which are incorporated as a part hereof, and the parties hereto
hereby agree that such dispute resolution procedures shall be the exclusive
method for resolution of disputes under this Agreement. Notwithstanding anything
herein to the contrary, nothing in this Section 16 or EXHIBIT C shall preclude
either party from seeking interim or provisional relief, in the form of a
temporary restraining order, preliminary injunction or other interim equitable
relief concerning a dispute, either prior to or during any of the negotiations
or proceedings provided for herein, if deemed necessary by the party, in its
discretion, to protect its interests. Further, this Section 16 shall be
specifically enforceable. IT IS EXPRESSLY UNDERSTOOD THAT BY SIGNING THIS
AGREEMENT, WHICH INCORPORATES BINDING ARBITRATION, THE COMPANY AND CONSULTANT
AGREE TO WAIVE COURT OR JURY TRIAL AND TO WAIVE PUNITIVE,
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STATUTORY, CONSEQUENTIAL AND ANY DAMAGES, OTHER THAN COMPENSATORY DAMAGES, TO
THE FULLEST EXTENT ALLOWED BY LAW.
17. Definitions.
For purposes of this Agreement, the following terms have the meanings ascribed
to them below.
"Cause" means the occurrence of any of the following: (i) Consultant's
gross and willful misconduct which is injurious to the Company; (ii)
Consultant's engaging in fraudulent or dishonest conduct with respect
to the Company's business or in conduct of a criminal nature or acts of
serious moral turpitude that may have an adverse impact on the
Company's standing and reputation; (iii) the continued and unjustified
failure or refusal by Consultant to perform the duties required of him
by this Agreement or to adhere to written Company policy, which failure
or refusal shall not be cured within fifteen (15) days following
receipt by Consultant of written notice from the Company specifying the
factors or events constituting such failure or refusal; (iv)
Consultant's use of drugs and/or alcohol in violation of then current
Company policy; or (v) Consultant's material breach of his obligations
under Sections 8, 9, 10 and 11 hereof which, if capable of cure, shall
not be cured within fifteen (15) days after written notice thereof to
Consultant.
"Intellectual Property" means all Inventions (whether or not
patentable), Trade Secrets, works of authorship (whether or not
copyrightable), patents, copyrights, trademarks, trade names, ideas or
concepts, or improvements, modifications or additions to any of the
above.
"Inventions" means any new discoveries, innovations, programs,
machines, manufacturing methods, processes, uses, apparatuses,
compositions of matter, data or designs, or improvements, modifications
or additions to any of the same, and is not limited to the definition
of an invention contained in the United States patent laws.
"Person" means any individual, corporation, partnership, trust or other
association or entity.
"Proprietary Information" means all information treated by a Person as
proprietary, whether in tangible or intangible form, and whether or not
it is marked as proprietary, including without limitation Intellectual
Property and other property rights, as well as all business or
technical information such as, for example, methods of doing business,
business plans, development plans, product information, profit and loss
statements and other financial information and lists of customers,
suppliers and employees.
"Trade Secrets" means all concepts, ideas, formulae, patterns, devices
or compilations of information used in a company's business which may
relate to the development, production, licensing, or sale of the
company's goods or services, to the management or
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administration of the company, or which otherwise give it a competitive
advantage, which are not publicly known without restriction and without
breach of this Agreement. Consultant will have the burden of proving
public knowledge.
18. Miscellaneous.
18.1 Notices. All notices and other communications hereunder
shall be in writing and shall be given by delivery in person, by registered or
certified mail (return receipt requested and with postage prepaid thereon) or by
cable, telex or facsimile transmission to the parties at the following addresses
(or at such other address as either party shall have furnished to the other in
accordance with the terms of this Section 18.1):
Viasoft, Inc. Xxxxxxx X. Xxxx
0000 X. 00xx Xx., Xxxxx 000 11640 S. Warcloud Court
Phoenix, AZ 8518 Xxxxxxx, Xxxxxxx 00000
Fax: (000) 000-0000
Attention: General Counsel
All notices and other communications hereunder that are addressed as provided in
or pursuant to this Section 18.1 shall be deemed duly and validly given: (i) if
delivered in person, upon delivery; (ii) if delivered by registered or certified
mail (return receipt requested and with postage paid thereon), 72 hours after
being placed in a depository of the United States mails; or (iii) if delivered
by cable, telex or facsimile transmission, upon transmission thereof and receipt
of the appropriate confirmation of receipt.
18.2 Prior Agreements. This Agreement contains the entire
agreement of the parties relating to the subject matter hereof and supersedes
all prior agreements and understanding with respect to such subject matter,
except for other written agreements between the parties that are specifically
referenced in this Agreement (including EXHIBIT B hereto), and the parties
hereto have made no agreements, inducements, representations or warranties
relating to the subject matter of this Agreement which are not set forth herein.
18.3 Taxes and Fringe Benefits.
(i) Tax Reporting and Withholding. Contractor is not
an employee of the Company and the Company will not withhold any income
tax, FICA, Medicare, worker's compensation, or other employment taxes
from payments to Consultant made pursuant to this Agreement, other than
any taxes required by law to be withheld in connection with the
exercise or sale of Viasoft common stock. Consultant is responsible for
income tax withholding, FICA, Medicare, and other employment taxes, if
any, as required with respect t payments made to Consultant under this
Agreement. The Company will comply with all tax reporting requirements
relating to payments made to an independent contractor. In the event
any person or governmental entity attempts to hold the Company
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liable or responsible for income tax, FICA, Medicare, worker's
compensation, or other employment taxes related to payments the Company
makes to Consultant under this Agreement, Consultants shall indemnify
and hold the Company, and its directors, officers, shareholders,
employees and agents, harmless from and against any loss or liability,
including attorneys' fees, penalties and interest.
(ii) Fringe Benefits. Because Consultant is engaged
as an independent contractor, Consultant is not eligible for, nor entitled to,
and shall not participate in, any of the Company's benefit plans, any fringe
benefits, health insurance workers' compensation insurance allowances, programs
reimbursements, or the like, which the Company makes available to its employees.
18.4 Amendments. No amendment, modification or rescission of
this Agreement shall be deemed effective unless made in writing signed by the
parties hereto.
18.5 No Waiver. No term or condition of this Agreement shall
be deemed to have been waived nor shall there be any estoppel to enforce any
provisions of this Agreement, except by a statement in writing signed by the
party against whom enforcement of the waiver or estoppel is sought. Any written
waiver shall not be deemed a continuing waiver unless specifically stated, shall
operate only as to the specific term or condition waived and shall not
constitute a waiver of such term or condition for the future or as to any act
other than that specifically waived.
18.6 Severability. If, after application of any provision of
this Agreement specifying how reformation shall be accomplished, including
Section 11.4, to the extent any provision of this Agreement shall still be
invalid or unenforceable, it shall be considered deleted here from and the
remainder of such provision and of this Agreement shall be unaffected and shall
continue in full force and effect.
18.7 Survival. Sections 7.5, 7.6, 7.9, 9, 10, 11, 13, 15 and
16 shall survive termination or expiration of this Agreement.
18.8 Governing Law. This Agreement is made under and shall be
governed by and construed in accordance with the laws of the State of Arizona.
18.9 Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the day and year first set forth above.
VIASOFT, INC.
By /s/ Xxxxxxxxx X. Xxxxxxxx
--------------------------------------
Its Vice President & General Counsel
--------------------------------------
/s/ Xxxxxxx X. Xxxx
--------------------------------------
XXXXXXX X. XXXX
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EXHIBIT A
DESCRIPTION OF CONSULTING SERVICES
Consulting services related to identifying, negotiating and consummating
acquisitions of technology, products or companies and assisting in developing a
strategy and vision, as well as short and long term plans, for Viasoft business
development and other services of a similar nature requested by the Board of
Directors or the CEO.
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EXHIBIT B
ADDITIONAL BENEFITS AND STOCK RIGHTS
ADDITIONAL BENEFITS:
OFFICE Consultant shall be provided an office at the
Company's headquarters in Phoenix, Arizona.
PARKING Consultant shall be provided an assigned, covered
parking place at the Company's headquarters in
Phoenix, Arizona.
COMPUTER/ Consultant shall be provided a computer and office
SUPPORT supplies, as well as reasonable administrative support, to
perform the consulting services.
INSURANCE Viasoft will maintain your current health insurance
coverage by paying the cost of COBRA benefits for a
period of one hundred twenty (120) days from the
Effective Date.
STOCK RIGHTS:
Incentive Stock Option Agreement dated February 28, 1995
Non-Qualified Stock Option Agreement dated February 28, 1995
Restricted Stock Purchase Agreement dated October 26, 1993
Restricted Stock Purchase Agreement dated February 19, 1993
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EXHIBIT C
DISPUTE RESOLUTION PROCEDURES
A. If a controversy should arise which is covered by Section 16, then
not later than three (3) months from the date of the event which is the subject
of dispute either party may serve on the other a written notice specifying the
existence of such controversy and setting forth in reasonably specific detail
the grounds thereof ("Notice of Controversy"); provided that, in any event, the
other party shall have at least thirty (30) days from and after the date of the
Notice of Controversy to serve a written notice of any counterclaim ("Notice of
Counterclaim"). The Notice of Counterclaim shall specify the claim or claims in
reasonably specific detail. If the Notice of Controversy or the Notice of
Counterclaim, as the case may be, is not served within the applicable period,
the claim set forth therein will be deemed to have been waived, abandoned and
rendered unenforceable.
B. Following receipt of the Notice of Controversy (or the Notice of
Counterclaim, as the case may be), there shall be a three week period during
which the parties will make a good faith effort to resolve the dispute through
negotiation ("Period of Negotiation"). Neither party shall take any action
during the Period of Negotiation to initiate arbitration proceedings.
C. If the parties should agree during the Period of Negotiation to
mediate the dispute, then the Period of Negotiation shall be extended by an
amount of time to be agreed upon by the parties to permit such mediation. In no
event, however, may the Period of Negotiation be extended by more than five (5)
weeks or, stated differently, in no event may the Period of Negotiation be
extended to encompass more than a total of eight (8) weeks.
D. If the parties agree to mediate the dispute but are thereafter
unable to agree within one (1) week on the format and procedures for the
mediation, then the effort to mediate shall cease, and the Period of Negotiation
shall terminate four (4) weeks from the Notice of Controversy (or the Notice of
Counterclaim, as the case may be).
E. Following the termination of the Period of Negotiation, the dispute
(including the main claim and counterclaim, if any) shall be settled by
arbitration, governed by the Federal Arbitration Act, 9 U.S.C. Section 1 et seq.
("FAA"), and judgment upon the award may be entered in any court of competent
jurisdiction. The format and procedures of the arbitration are set forth below.
F. A notice of intention to arbitrate ("Notice of Arbitration") shall
be served on the opposing party within forty-five (45) days of the termination
of the Period of Negotiation. If the Notice of Arbitration is not served within
this period, the claim set forth in the Notice of
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Controversy (or the Notice of Counterclaim, as the case may be) will be deemed
to have been waived, abandoned and rendered unenforceable.
G. The Company shall designate a neutral third party to administer the
arbitration, such as the American Arbitration Association, or another neutral
individual or entity (the "Administrator").
H. The arbitrators shall reach a decision on the merits on the basis of
applicable legal principals as embodied in the law of the State of Arizona. The
arbitration hearing shall take place in Phoenix, Arizona.
I. There shall be three arbitrators, regardless of the amount in
controversy. Each party shall select one arbitrator within fifteen (15) days
after the Notice of Arbitration is served by notifying the opposing party and
the Administrator of such selection, and the two party-appointed arbitrators
shall select the third arbitrator within fifteen (15) days after they are
selected and shall promptly notify the parties of such selection. The third
arbitrator, in order to be eligible to serve, shall be a lawyer in Phoenix,
Arizona (i) who has at least fifteen (15) years experience specializing in
general commercial litigation, general corporate and commercial matters and (ii)
who has had both training and experience as an arbitrator. In the event the
party-appointed arbitrators cannot agree on a third arbitrator, the
Administrator shall appoint a third arbitrator who shall meet the foregoing
criteria. Until the conclusion of the arbitration, each party shall pay the fees
and costs of its party-appointed arbitrator, and the parties shall each pay
one-half (1/2) the fees and costs of the third arbitrator. Upon the conclusion
of the arbitration, the prevailing party shall be entitled to reimbursement of
the arbitrators' fees it has paid, as set forth below.
J. At the time of appointment and as a condition thereto, each
arbitrator will be apprised of the time limitations and other provisions of this
Exhibit C and shall indicate such arbitrator's agreement to comply with such
provisions and time limitations.
K. During the thirty (30) day period following appointment of the third
arbitrator, either party may serve on the other a request for limited numbers of
documents (no more than twenty (20) categories of documents may be requested)
directly related to the dispute. Such documents will be produced within seven
(7) days of the request to the extent practicable.
L. Following the thirty (30) day period of document production, there
will be a forty-five (45) day period during which limited depositions will be
permissible. Neither party will take more than five (5) depositions, and no
party can question a witness for more than three (3) hours in any deposition.
M. Disputes as to discovery or prehearing matters of a procedural
nature shall be promptly submitted to the arbitrators pursuant to telephone
conference call or otherwise. The
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arbitrators shall make every effort to render a ruling on such interim matters
at the time of the hearing (or conference call) or within five (5) business days
thereafter.
N. Following the period of depositions, the arbitration hearing shall
promptly commence. The arbitrators will make every effort to commence the
hearing within thirty (30) days of the conclusion of the deposition period and,
in addition, will make every effort to conduct the hearing on consecutive
business days to conclusion. The Federal Rules of Evidence will apply during the
arbitration hearing.
O. An award will be rendered, at the latest, within six (6) months of
the date of the Notice of Arbitration and within thirty (30) days of the close
of the arbitration hearing. The award shall set forth the grounds for the
decision (findings of fact and conclusions of law) in reasonably specific
detail. The award shall be final and nonappealable except as provided in the
FAA.
The award may only be made for compensatory damages, and if any other
damages (whether exemplary, punitive, consequential, statutory or other) are
included, the award shall be vacated and remanded, or modified or corrected, as
appropriate to promote this damage limitation.
The prevailing party in the arbitration shall be entitled to
reimbursement from the other party of costs incurred in connection with the
arbitration, including, without limitation, filing fees, attorneys' fees,
disbursements of counsel, costs, and arbitrator's fees.
P. All decisions and awards of the arbitrators must be by a majority of
the arbitrators.
Q. All negotiations and proceedings pursuant to this Exhibit C and
information and documents disclosed therein ("Confidential Information") shall
be used only for negotiation, mediation, and arbitration as provided in this
Exhibit C, and for no other purpose. Specifically, Confidential Information
shall not be disclosed to anyone other than (i) the parties and their attorneys
and staffs; (ii) outside experts or consultants retained by the parties for
purposes of mediation or arbitration, including their secretarial or clerical
personnel, provided that the outside experts and consultants have first read
this paragraph and have agreed to abide by its terms; and (iii) other persons
upon whom the parties mutually agree in writing. All arbitrators and mediators
shall agree in writing, prior to the start of any mediation or arbitration, to
agree to comply with the foregoing restrictions regarding Confidential
Information. All documents will be returned to the party that produced such
documents when the documents are no longer needed or upon the final
determination of the mediation or arbitration.
R. The parties may agree upon different procedures or deadlines only in
a writing signed by both parties.
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