Exhibit 10.1
CONSULTING AGREEMENT
This Consulting Agreement (this "Agreement"), effective as of June 30, 2006 (the
"Effective Date"), is by and between Tumbleweed Communications Corp., a Delaware
corporation with offices located at 000 Xxxxxxx Xxxxx, Xxxxxxx Xxxx, XX 00000
("Tumbleweed"), and Xxxxx Xxxxxxx, an individual residing in California
("Consultant"). In consideration of the premises and mutual promises set forth
in this Agreement, and other good and valuable consideration, the exchange,
receipt and sufficiency of which are acknowledged, the parties agree as follows:
1. Services. Consultant hereby agrees to perform the services described in
Exhibit A in accordance with the timeline set forth therein (collectively, the
"Services"). Consultant shall exercise the highest degree of professionalism,
and utilize Consultant's expertise and creative talents in completing the
Services. In completing the Services, unless otherwise agreed by Tumbleweed in
writing, Consultant shall provide his own equipment, tools and other materials
at Consultant's own expense. Consultant shall perform the Services in a timely
and professional manner consistent with industry standards, and at a location,
place and time which Tumbleweed deems appropriate. Consultant may not
subcontract or otherwise delegate his obligations under this Agreement without
Tumbleweed's prior written consent. Consultant shall take all necessary
precautions to prevent injury to any persons (including employees of Tumbleweed)
or damage to property (including Tumbleweed's property) during the Term (as
defined in Section 4 below). If Tumbleweed permits Consultant to use any of
Tumbleweed's software, equipment, tools, or facilities during the Term: (a)
Consultant shall comply with all terms and conditions governing the use of such
software, equipment, tools, or facilities (e.g., software licenses, security
requirements and safety requirements); and (b) such permission shall be
gratuitous and Consultant shall be responsible for any injury to any person
(including death) or damage to property (including Tumbleweed's property)
arising out of use of such software, equipment, tools or facilities, whether or
not such claim is based upon its condition or on the alleged negligence of
Tumbleweed in permitting its use.
2. Reports. Consultant shall coordinate his work efforts with and
regularly report Consultant's progress in performing the Services to
Tumbleweed's Chief Executive Officer, at whose direction Consultant shall
prepare and deliver reports describing in reasonable detail the activities and
results generated during the course of performing the Services.
3. Compensation and Expenses. In consideration for the performance of all
Services under this Agreement, Tumbleweed will compensate Consultant as set
forth in Exhibit A. Unless otherwise agreed in writing in advance by Tumbleweed,
Tumbleweed will not reimburse Consultant for any costs or expenses incurred by
Consultant in connection with this Agreement.
4. Term and Termination. The term of this Agreement will commence on the
Effective Date of this Agreement and continue in full force and effect until
Tumbleweed's acceptance of the last deliverable described in Exhibit A, unless
earlier terminated in accordance with the terms and conditions of this
Agreement, or extended by mutual written agreement of the parties (the "Term").
Consultant may terminate this Agreement upon written notice to Tumbleweed if
Tumbleweed materially breaches any term or condition of this Agreement and, if
capable of cure, does not cure such breach within thirty (30) calendar days
after receiving written notice of such breach stating the non-breaching party's
intent to terminate this Agreement. Tumbleweed may terminate this Agreement with
or without cause upon ten (10) days prior written notice to Consultant. The
obligations of the parties contained in Sections 2, 4, 5, 8, 10, 11 and 12 of
this Agreement shall survive expiration or any termination of this Agreement.
5. Inventions.
5.1 Consultant shall promptly disclose in writing to Tumbleweed, or to
any persons designated by Tumbleweed, all discoveries, inventions, and
improvements including, without limitation, any designs, formulas, compounds,
structures, works of authorship, trade secrets, technology, computer programs,
ideas, processes, techniques, know-how and data, whether or not patentable or
copyrightable, (collectively, "Inventions") which Consultant, either alone or
jointly, makes, conceives of or reduces to practice (a) in the course of or as a
result of performing Services, (b) through use of information disclosed by
Tumbleweed, (c) through funding provided by Tumbleweed, and/or (d) from use of
premises or materials owned, leased or contracted for by Tumbleweed (such
Inventions collectively, "Tumbleweed Inventions"). Consultant shall not disclose
Tumbleweed Inventions to any person outside Tumbleweed unless requested in
writing to do so by Tumbleweed.
5.2 Consultant agrees that all Tumbleweed Inventions shall be the
sole property of Tumbleweed. Consultant agrees to irrevocably assign and hereby
irrevocably assigns to Tumbleweed all right, title and interest in and to all
Tumbleweed Inventions including, without limitation, all patents, patent rights,
copyrights, mask work rights, trade secret rights, and other intellectual
property and rights anywhere in the world in connection therewith (collectively
"Rights"). Tumbleweed shall be the sole owner of all Rights.
5.3 Consultant agrees to perform, during and after the Term of this
Agreement, all acts deemed necessary or desirable by Tumbleweed to permit and
assist it in evidencing, perfecting, obtaining, maintaining, defending and
enforcing Rights and/or Consultant's assignment with respect to such Tumbleweed
Inventions in any and all countries. Such acts may include, but are not limited
to, execution of documents and assistance and cooperation in legal proceedings.
If, and then only to the extent that, Tumbleweed is unable after reasonable
efforts, to secure Consultant's signature on any document needed in connection
with furthering the purposes of this Section 5.3, Consultant hereby irrevocably
designates and appoints Tumbleweed and its duly authorized officers and agents,
as Consultant's agents and attorneys-in-fact to act for and in behalf and
instead of Consultant, to execute and file any documents and to do all other
lawfully permitted acts to further the purposes of this Section 5.3 with the
same legal force and effect as if executed by Consultant. It is understood and
agreed that Tumbleweed, or its designee, shall have the sole right, but not the
obligation, to prosecute and maintain patent applications and patents worldwide
with respect to Tumbleweed Inventions.
5.4 Any assignment of copyright under this Section 5 includes,
without limitation, all rights of paternity, integrity, disclosure and
withdrawal and any other rights that may be known as or referred to as "moral
rights" (collectively "Moral Rights"). To the extent such Moral Rights cannot be
assigned under applicable law and to the extent the following is allowed by the
laws in various countries where Moral Rights exist, Consultant hereby waives
such Moral Rights and consents to any action of Tumbleweed that would violate
such Moral Rights in the absence of such consent. Consultant shall confirm any
such waivers and consents from time to time as requested by Tumbleweed.
5.5 Consultant shall not incorporate any Invention owned by
Consultant or any third party into any work product of the Services without
Tumbleweed's prior written consent. Consultant hereby grants to Tumbleweed a
nonexclusive, royalty-free, fully, paid-up, perpetual, irrevocable, worldwide
license to use, reproduce, distribute, perform, display, transmit, prepare
derivative works of, make, have made, modify, sell, import, export, sublicense
(with the right to grant and authorize sublicenses) and otherwise exploit, and
have the same performed on its behalf by third parties, any such Invention
incorporated in any such work product.
6. Certain Other Contracts.
6.1 Consultant shall not improperly use or disclose any
confidential information, proprietary information or trade secrets of any former
or current employer of Consultant or other person or entity with which
Consultant has an agreement or duty to keep in confidence information acquired
by Consultant, if any. Consultant shall not bring onto Tumbleweed's premises any
unpublished document or proprietary information belonging to any such employer,
person or entity unless consented to in writing in advance by such employer,
person or entity.
6.2 Consultant shall not perform the Services during time that is
required to be devoted to any third party. Consultant shall not use the funding,
resources and facilities of any other third party, without the prior written
consent of Tumbleweed, to perform Services and shall not perform Services in any
manner that would give any third party rights or access to any work product of
such Services.
6.3 Consultant represents and warrants that Consultant has no
outstanding agreement or obligation that is in conflict with any of the
provisions of this Agreement or that would preclude Consultant from rendering
the Services and otherwise complying with the provisions of this Agreement.
Consultant shall not enter into any such conflicting agreement during the Term
of this Agreement.
7. Government Contracts.
7.1 U.S. Government Contracts. In the event that Consultant shall
perform services under this Agreement in connection with any U.S. Government
contract in which Tumbleweed may be the prime contractor or subcontractor,
Consultant agrees to abide by all laws, rules and regulations relating thereto.
To the extent that any such law, rule or regulation requires that a provision or
clause be included in this Agreement, Consultant agrees that such provision or
clause shall be deemed added to, and integrated into, this Agreement by this
reference.
7.2 Security. Without limiting any obligations of Consultant set
forth in Section 8: (a) in the event the services of the Consultant require
Consultant to have access to U.S. Department of Defense classified material, or
other classified material in the possession of Tumbleweed's facility, such
material shall not be removed from Tumbleweed's facility; and (b) Consultant
agrees that all work performed under this Agreement by Consultant which involves
the use of classified material mentioned above shall be performed in a secure
fashion (consistent with applicable law and regulations for the handling of
classified material) and only at Tumbleweed's facility.
8. Confidentiality.
8.1 Consultant acknowledges that, during the Term of this
Agreement, Tumbleweed may disclose information to Consultant relating to
Tumbleweed's business (including, without limitation, names, expertise and
compensation of employees and consultants, trade secrets, know-how, mask works,
formulas, processes, techniques, methods, ideas, inventions (whether patentable
or not), improvements, discoveries, developments, designs, schematics, computer
programs and documentation, algorithms, test data, development tools,
manufacturing capability or processes, relationships with other business or
research organizations, business plans, budgets, contracts, grants, costs,
profits, and other technical, business, financial, customer and product
development plans, forecasts, strategies, budgets, unpublished financial
statements, costs, prices, projects, products, suppliers, licenses, customers
and potential customers) (collectively "Confidential Information"). Confidential
Information shall be deemed to include Inventions and also includes any
information which Tumbleweed has received from a third party to which Tumbleweed
is obligated to treat as confidential or proprietary. Consultant acknowledges
that Tumbleweed's business is extremely competitive, dependent in part upon the
maintenance of secrecy, and that any disclosure of the Confidential Information
would result in serious harm to Tumbleweed. Confidential Information does not
include any information that Consultant can document (a) is or becomes generally
known to the public through no improper action or inaction by Consultant or any
affiliate, agent, consultant or employee of Consultant, (b) was in Consultant's
possession or becomes known to Consultant prior to receipt from Tumbleweed
without restriction, or (c) was rightfully disclosed to Consultant by a third
party without restriction. Notwithstanding the foregoing, all Confidential
Information developed by or for Consultant and assigned to Tumbleweed in
connection with this Agreement shall be deemed Confidential Information of
Tumbleweed and exception (b) above will not be applicable thereto.
8.2 Consultant shall only use the Confidential Information to
perform the Services under this Agreement and shall not use the Confidential
Information in any way that is detrimental to Tumbleweed.
8.3 Consultant agrees (a) to hold the Confidential Information in
strictest confidence and to apply his best efforts to protect such Confidential
Information (including, without limitation, taking at least that level of
precaution Consultant employs with respect to his most sensitive confidential
materials), (b) to maintain any such Confidential Information or any information
derived therefrom wholly separate from information provided to Consultant by any
third party or belonging thereto, (c) not to disclose, directly or indirectly,
any Confidential Information or any information derived therefrom to any third
person, (d) not to take any such Confidential Information into the facilities of
any third party, and (e) not to copy or reverse engineer any such Confidential
Information. Consultant shall notify Tumbleweed in writing immediately upon the
occurrence of any unauthorized release or other breach of this Section 8 of
which Consultant is aware.
8.4 Consultant may disclose any Confidential Information that is
required to be disclosed by law, government regulation or court order. If
disclosure is required, Consultant shall give Tumbleweed at least thirty (30)
calendar days advance notice, or such notice as is reasonably practicable under
the circumstances, to enable Tumbleweed to seek confidential treatment of such
Confidential Information, whether by protective order or otherwise.
8.5 Upon the earlier of expiration or termination of this
Agreement, or upon Tumbleweed's request, Consultant shall promptly return to
Tumbleweed or, at Tumbleweed's request, destroy all materials containing
Confidential Information as well as data, records, reports, notes, compilations
and other property, whether or not pertaining to Confidential Information,
furnished by Tumbleweed to Consultant or produced by Consultant in connection
with the Services rendered under this Agreement, together with all copies of any
of the foregoing.
8.6 Nothing in this Agreement is intended to grant to Consultant
any rights under any patent or copyright of Tumbleweed, nor shall this Agreement
grant Consultant any rights in or to any Confidential Information, except for
the purpose of providing Services to Tumbleweed.
8.7 Except to the extent required by law, Consultant shall not
disclose the terms, existence or subject matter of this Agreement.
9. Use of Name. It is understood by Consultant that Consultant's name may
appear in certain Tumbleweed disclosure documents including, without limitation,
those required by securities laws and in other regulatory and administrative
filings in the ordinary course of Tumbleweed's business.
10. Indemnification. Consultant shall indemnify and hold harmless
Tumbleweed, its directors, officers, employees, agents, contractors, customers,
licensees, successors and assigns (collectively, "Indemnitees") from and against
any and all liabilities, losses, damages, settlements, claims, actions, suits,
penalties, fines, costs and expenses (including, without limitation, attorney's
fees and other expenses of litigation), incurred by any Indemnitee to the extent
arising from (a) any negligent, reckless or intentionally wrongful act of
Consultant, (b) any breach of Consultant of any of his obligations under this
Agreement, (c) any failure of Consultant to perform the Services in accordance
with all applicable laws, rules and regulations, or (d) any actual or alleged
violation of a third party's rights resulting in whole or in part from
Tumbleweed's use of the work product of Consultant under this Agreement.
11. Non-Solicitation. During the Term of this Agreement and for a period of
twelve (12) months thereafter, Consultant shall not directly or indirectly
solicit or encourage any employee or contractor of Tumbleweed to terminate
employment with, or cease providing services to, Tumbleweed.
12. Miscellaneous Provisions.
12.1 Independent Contractor; Withholdings. Consultant shall at all
times be an independent contractor, and as such shall not have any right, power
or authority to bind Tumbleweed. Consultant shall not act as an agent nor shall
Consultant be deemed to be an employee, agent, partner, franchisor, franchisee
or legal representative of Tumbleweed for any purpose including, without
limitation, for the purposes of any employee benefit program or unemployment
benefits. Consultant shall exercise his own independent and professional
judgment in performing the Services. Consultant shall determine in his
discretion the manner and means of performing the Services. Consultant
recognizes that no amount will be withheld from his compensation for payment of
any federal, state, or local taxes and that Consultant has sole responsibility
to pay such taxes, if any, and file such returns as shall be required by
applicable laws and regulations. To the extent required by applicable laws and
regulations, Tumbleweed shall report such compensation to the appropriate state
and federal regulatory agencies. Consultant shall not enter into any agreements
or incur any obligations on behalf of Tumbleweed. Consultant hereby indemnifies
Tumbleweed against any obligation imposed on Tumbleweed to pay withholding taxes
or similar items or resulting from a court's or governmental entity's
determination that Consultant is not an independent contractor to Tumbleweed.
12.2 Notices. Any notice required or permitted to be given under
this Agreement shall be in writing and shall be delivered in person, by a
nationally recognized overnight courier, or by facsimile (receipt confirmed), to
the addresses given in Exhibit A or such other addresses as may be designated in
writing by the applicable party from time to time, and shall be deemed to have
been given when sent.
12.3 Compliance with Laws. Consultant shall perform all Services in
accordance with all applicable laws, rules and regulations. Any software and
other technical information disclosed under this Agreement may be subject to
restrictions and controls imposed by the Export Administration Act, Export
Administration Regulations and other laws and regulations of the United States
and any other applicable government or jurisdiction, as enacted from time to
time (the "Acts"). Consultant agrees to comply with all restrictions and
controls imposed by the Acts.
12.4 Severability. If any provision, or portion thereof, of this
Agreement is found to be invalid, unlawful or unenforceable to any extent, such
provision of this Agreement will be enforced to the maximum extent permissible
by applicable law so as to effect the intent of the parties, and the remainder
of this Agreement will continue in full force and effect. The parties shall
negotiate in good faith an enforceable substitute provision for any invalid or
unenforceable provision that most nearly achieves the intent and economic effect
of such provision.
12.5 Construction and Remedies. The section headings contained in
this Agreement are for reference purposes only and shall not affect in any way
the meaning or interpretation of this Agreement. All references to "Sections"
and/or "Exhibits" refer to the sections and exhibits to this Agreement. The word
"day" when used in this Agreement means a calendar day. The word "law" (or
"laws") when used in this Agreement means any applicable, legally binding
statute, ordinance, resolution, regulation, code, guideline, rule, order,
decree, judgment, injunction, mandate or other legally binding requirement of a
government entity. The parties and their respective counsel have had an
opportunity to fully negotiate this Agreement. Accordingly, neither this
Agreement as a whole nor any part of this Agreement shall be construed in favor
of or against either party. If any term of the body of this Agreement conflict
with any Exhibit to this Agreement, the term of the body of this Agreement shall
prevail. Unless otherwise expressly stated to the contrary in this Agreement,
all remedies are cumulative, and the exercise of any express remedy by either
party in this Agreement does not by itself waive such party's right to exercise
its other rights and remedies available at law or in equity. Consultant
acknowledges that Tumbleweed would have no adequate remedy at law to enforce
Section 7 of this Agreement. In the event of a breach or threatened breach by
Consultant of Section 7, Tumbleweed shall have the right to obtain injunctive or
other similar relief, as well as any remedy available at law, without the
requirement of posting bond or other similar measures.
12.6 Assignment. Consultant may not assign or otherwise transfer
this Agreement or any rights or obligations under this Agreement, in whole or in
part, voluntarily or involuntarily, by operation of law or otherwise (including,
without limitation, by way of a change of ownership of fifty percent (50%) of
more of Consultant's outstanding shares, asset acquisition, merger,
consolidation or otherwise, whether in one or a series of transactions).
Tumbleweed may assign all rights and liabilities under this Agreement without
the consent of Consultant. Subject to the foregoing, this Agreement will inure
to the benefit of and be binding upon each of the heirs, assigns and successors
of the respective parties. Any assignment in violation of this Section 12.6 will
be null and void.
12.7 Governing Law and Dispute Resolution. This Agreement will be
interpreted and construed in accordance with the laws of the State of
California, without regard to conflict of law principles. The parties agree that
any dispute arising under or in connection with this Agreement (including,
without limitation, Consultant's performance of Services under, breach,
termination, interpretation or validity of this Agreement) shall be subject to
the exclusive jurisdiction and venue of the state courts in and for the County
of Santa Mateo, California and the federal courts in and for the Northern
District of California, and each party hereby agrees to submit to the personal
and exclusive jurisdiction and venue of such courts.
12.8 Waiver. Any waiver of the provisions of this Agreement or of a
party's rights or remedies under this Agreement must be in writing to be
effective. Failure, neglect, or delay by a party to enforce the provisions of
this Agreement or its rights or remedies at any time, will not be construed as a
waiver of such party's rights under this Agreement and will not in any way
affect the validity of the whole or any part of this Agreement or prejudice such
party's right to take subsequent action.
12.9 Entire Agreement; Modification. This Agreement (including,
without limitation, the Exhibits and any addenda to this Agreement signed by
both parties) contains the entire agreement of the parties with respect to the
subject matter of this Agreement and supersedes all previous communications,
representations, understandings and agreements, either oral or written, between
the parties with respect to said subject matter. Notwithstanding the foregoing,
neither party shall be relieved of any of its respective obligations with
respect to any information subject to the terms of any confidentiality agreement
entered into by the parties prior to the Effective Date. Except as set forth in
Section 12.4, this Agreement may not be amended, except by a writing signed by
both parties.
12.10 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be an original and all of which shall
constitute one Agreement. Facsimile signatures shall be acceptable as originals
and binding on the parties.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the Effective
Date.
TUMBLEWEED COMMUNICATIONS CORP.: CONSULTANT:
By: By:
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Print Name: Print Name:
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Title: Date:
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Date:
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EXHIBIT A
Scope of Services:
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Consultant will contribute to Tumbleweed's strategy development and business
planning by providing insight into (i) the longer-term technology needs of the
markets the company serves and intends to serve, and (ii) how the company can
competitively provide products and services to meet those technology needs.
Consultant will provide technological analysis and assessment services,
including reviews of emerging technologies provided by start-up companies and
similar entities, that will be a key source of advice to senior management in
aligning the company's strategy and resources with the market opportunities at
hand.
Frequency of Services:
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Consultant will provide two days of Services per week; Services in excess of two
days per week require the prior written consent of Tumbleweed's CEO.
Compensation:
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1. Consultant will receive a one-time fee of Twelve Thousand Dollars ($12,000)
within ten business days of the Effective Date.
2. Consultant will be granted stock options to purchase 125,000 shares of
Tumbleweed common stock. The stock options are subject to a vesting schedule,
whereby they vest ratably over a period of one year at rate equal to 1/12th per
month.
If a Change of Ownership Control occurs during the Term of this Agreement,
followed within six months by either (i) the termination of this Agreement by
the successor to Tumbleweed for any reason other than Cause, then immediately
prior to such termination, subject to your delivery of a signed release of
claims in a form reasonably satisfactory to such successor, the vesting of one
hundred percent of the then-outstanding stock options granted pursuant to this
Agreement shall occur.
"Cause" means only: the commission of a felony by you intended to result in your
substantial personal enrichment at Tumbleweed's expense, conviction of a crime
involving moral turpitude, or willful failure to perform your duties to
Tumbleweed, which failure is deliberate, results in injury to Tumbleweed, and
continues for more than 15 days after written notice is given to you. For
purposes of this definition, no act or omission is considered to have been
"willful" unless it was not in good faith and you had knowledge at the time that
the act or omission was not in the best interests of Tumbleweed.
"Change of Ownership Control" means any sale of all or substantially all of
Tumbleweed's assets, or any merger, consolidation, or stock sales that results
in the holders of Tumbleweed's capital stock immediately prior to such
transaction owning less than 50% of the voting power of Tumbleweed's capital
stock immediately after such transaction.
3. In addition, Consultant will be paid monthly for services rendered on a per
diem basis, at a rate equivalent to $250,000 per year for full time Services.
Addresses for the Purpose of Giving Notice:
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If to Consultant: If to Tumbleweed:
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Xxxxx Xxxxxxx Tumbleweed Communications Corp.
000 Xxxxxxx Xxxxx
Xxxxxxx Xxxx, Xxxxxxxxxx 00000
Attention: Director of Product Marketing
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With a copy to:
Attention: General Counsel
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