EXHIBIT 10(t)
CONSULTING AGREEMENT
CONSULTING AGREEMENT (the "Agreement"), dated Jan 1, 2000, by and
between Rainbow Technologies, Inc., a Delaware corporation, with offices located
at 00 Xxxxxxxxxx Xxxxx, Xxxxxx, Xxxxxxxxxx 00000 (the "Company"), and Xxxxxx
Investments, with offices located at 000 Xxxxxxxx Xxxxx Xxxxx, Xxxxxxx, Xxxxxxx,
Xxxxxx X0X 0X0 ("Consiilting Firm").
1 Relationship. The Company agrees to hire Consulting Firm to
perform certain services for the Company, and Consulting Firm agrees to assign
Xxxxx Xxxxxx ("Consultant") to perform such services, on the basis of the terms
and conditions set forth herein. For purposes of this agreement, Consulting Firm
and Consultant are used interchangeably.
2 Purpose of Agreement. As a condition to, and in consideration
for the relationship formed by this Agreement, Consultant acknowledges that the
confidential information and inventions of Company are trade secrets and
important assets of Company, and agrees to be bound by the terms of this
Agreement.
3 Services to be Performed. Consultant shall work and consult
with the Company (the "Services") in connection with the identification of areas
of technology and product development that are within the general scope of the
Company's product and service.
4 Compensation. In consideration for the approximately 170 hours
per month of Services performed by Consultant pursuant to this Agreement, the
Company will pay Consulting Firm a monthly consulting fee in the amount of $US
11,666.67, payable monthly upon the receipt of each invoice. Also, Consultant
will be paid an annual consulting incentive based upon specific goals.
Compensation will be adjusted annually according to the Company's consulting
policies.
5 Expenses. The Company shall reimburse Consultant or otherwise
provide for or pay for all reasonable expenses incurred by Consultant in
furtherance of or in connection with the business of the Company, including, but
not by way of limitation, (i) all reasonable expenses incurred by Consultant in
accordance with the Company's travel policy, as established by the Board; and
(ii) all reasonable expenses in connection with Consultant's attendance at trade
and professional conferences, which are in furtherance of the business of the
Company. Consultant agrees that he will furnish the Company with adequate
records and other documents for the substantiation of each such business
expense.
6 Term. The term of this Agreement shall be for a period of one
(1) year commencing upon the execution of this Agreement ("Initial Term"). This
Agreement shall thereafter automatically continue (the "Succeeding Term") until
terminated by either Party in accordance with this Agreement, unless either
Party provides written notice of termination to the other party at least ninety
(90) days prior to the termination date. If Company terminates this agreement
for reasons other than the Consultant's breach of the terms and conditions of
this Agreement, Company will pay Consultant 12 months consulting fees plus the
prior year's consulting incentive ("Termination Fee").
7 Confidentiality. The information and materials set forth in
Section 7.1, 7.2, 7.3 and 7.4 (collectively referred to as "Confidential
Information"), whether in written, oral, magnetic, photographic, optical or
other form and whether now existing or developed or created during the period of
Consultant's relationship or engagement with Company, excepting information
obtained from general or public sources, are proprietary to Company and are
highly confidential in nature.
7.1 Business Records, Marketing Plans and
Customer Information. All books, records, documents, memoranda and materials,
and the information contained therein, relating to the business and finances of
Company including, but not limited to: (i) marketing and development plans,
forecasts, forecast assumptions, forecast volumes, future plans and potential
strategies of Company; (ii) cost objectives, pricing policies and procedures,
quoting policies and procedures, and unpublished price lists; (iii) licensing
policies, strategies and techniques; (iv) customer lists, names of past, present
and prospective customers and their representatives; (v) data and other
information about
or provided by past, present and prospective vendors; (vii) purchasing
Information, orders, invoices, xxxxxxxx, and payment of xxxxxxxx; (viii) past,
present and prospective licenses and licensees, the terms and conditions of any
licenses or prospective licenses, contracts or prospective contracts; (ix) types
of products, supplies, materials and services purchased, leased, licensed and/or
sold by Company; (x) past, present and future research and development
arrangements; (xi) customer service information; (xii) joint ventures, mergers
and/or acquisitions; (xiii) Company personnel policies and procedures, Company
personnel files, and the compensation of officers, directors and Consultants of
Company; and (xiv) all other confidential business records and trade secrets of
Company.
7.2 Technology and Manufacturing Procedures. All
books, records, documents, memoranda and materials, and the information
contained therein, relating to the technology of Company (whether or not
patentable, whether or not protected by copyright, whether developed by or for
the Company) including, but not limited to: (i) technology licensed to Company
by any third party; (ii) ideas and concepts for existing and new products,
processes and services; (iii) specifications for products, equipment and
processes, whether technical or financial; (iv) manufacturing and performance
specifications and procedures; (v) engineering drawings, flow charts, and
graphs; (vi) technical, research and engineering data; (vii) formulations,
materials, and material specifications; (viii) laboratory studies and benchmark
tests; (ix) laboratory notebooks (or equivalent); (x) plant layout and
equipment; (xi) manuals, including service manuals and operation manuals; (xii)
quality assurance policies, procedures and specifications; (xiii) feasibility
and trade secrets related to the research, engineering, development and
manufacturing of Company.
7.3 Third Party Information. Any and all other
information and materials in Company's possession or under its control from any
other person or entity which Company is obligated to treat as confidential or
proprietary.
7.4 Not Generally Known. Any and all
Confidential Information not generally known to the public or within the
industries or trades in which the Company competes.
8 General Skills and Knowledge. The general skills and
experience gained by Consultant during Consultant's relationship with Company,
and information publicly available or generally known within the industries or
trades in which Company competes, is not considered Confidential Information.
9 Consultant's Obligations as to Confidential Information and
Materials. During Consultant's relationship by Company, Consultant may have
access to all or a portion of the Confidential Information and, as such, will
occupy a position of trust and confidence with respect to Company's affairs and
business. Consultant will take the following steps to preserve the confidential
and proprietary nature of the Confidential Information:
9.1 Non-Disclosure. During and for a period of
three (3) years after Consultant's relationship with Company, Consultant will
not use, disclose or otherwise permit any person or entity access to any of the
Confidential Information other than as required in the performance of
Consultant's duties with Company. In addition, Consultant will take all
reasonable precautions to prevent disclosure of the Confidential Information.
9.2 Prevent Disclosure. Consultant will take all
reasonable precautions to prevent disclosure of the Confidential Information in
accordance with the Company's reasonable instructions to Consultant.
9.3 Return All Materials. Upon termination of
Consultant's relationship with Company, for any reason whatsoever, Consultant
will deliver to Company all tangible materials embodying the Confidential
Information, including, without limitation, any documentation, records,
listings, notes, data, sketches, drawings, memoranda, models, accounts,
reference materials, samples, machine-readable media and equipment which in any
way relate to the Confidential Information. Consultant may not retain any copies
or abstracts of any Confidential Information.
10 Ideas and Inventions. Consultant agrees that all right, title
and interest in or to any and all Inventions are the property of Company. For
the purposes of this Agreement, "Inventions" shall mean all techniques,
processes, methods, inventions, discoveries, developments, innovations and
improvements (i)conceived or made by Consultant, whether alone or with others,
in the course of Consultant's
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relationship with the Company, or (ii) conceived or made by Consultant, whether
alone or with others, in the course of Consultant's relationship, but which
reach fruition by the second (2nd) anniversary of the termination of
Consultant's relationship, and which either (a) involve or are reasonably
related to the business of the Company or to the Company's actual or planned
research or development; or (b) incorporate or are based on, in whole or in
part, any of the Confidential Information. Consultant agrees to promptly
disclose all Inventions to the Company, and to provide all assistance reasonably
requested by the Company in the preservation of its interests in the Inventions,
such as by executing documents, testifying, etc. Consultant agrees to execute,
acknowledge and deliver any instruments confirming the complete ownership by the
Company of such Inventions. Expenses for such assistance shall be paid by the
Company. Consultant's time for such assistance shall be compensated at the rate,
and subject to the limitations, set forth in Section 4 above. No additional
compensation shall be paid to Consultant for any Ideas or Inventions.
11 Work for Hire. The Company and Consultant agree that the work
product of Consultant in performance of Services required by this Agreement,
including, without limitation, reports, information, data, documents, marketing
plans, marketing information, brochures, market studies and press materials,
shall be the exclusive property of the Company and shall be deemed a "work for
hire." No work product of Consultant shall be deemed to fall within any other
classification which would result in ownership rights of any description
concerning such materials vesting in Consultant. In the event any ownership
rights in Consultant's work product are deemed to vest in Consultant, Consultant
hereby assigns all such rights to the Company. Consultant agrees that any
materials produced by Consultant in the course of performing Services under this
Agreement shall not be the subject of an application for copyright, perfection
of copyright or patent by or on behalf of Consultant and that Consultant shall
cooperate with the Company in any application for copyright or patent it deems
appropriate concerning any materials produced pursuant to this Agreement.
12 Restrictive Covenants.
12.1 Consultant acknowledges that (i) the
Company's business is all aspects of designing, manufacturing, marketing,
licensing, maintaining and supporting security related computer equipment and
software products for various needs, including but not limited to the Internet,
corporate networks and communications networks, and consulting services relating
thereto, and (ii) fulfillment of the obligations hereunder will result in
Consultant becoming familiar with the business affairs of the Company and any
present or future parent, subsidiary and/or affiliate.
12.2 Covenant Not to Compete. In consideration
for the compensation, and as a condition to the performance by the Company of
all obligations under this Agreement, Consultant agrees that during the Initial
Term or any Succeeding Terms of this Agreement and for the period from the date
of termination of Consultant's employment through the second (2nd) anniversary
of such date, Consultant shall not directly or indirectly through any other
person, firm or corporation compete with or be engaged in the same business or
"participate in" any other business or organization which during such period
competes with or is engaged in the same business as the Company. The term
"participate in" shall mean: "directly or indirectly, for his own benefit or
for, with, or through any other person, firm, or corporation, own, manage,
operate, control, loan money to, or participate in the ownership, management,
operation, or control of, or be connected as a director, officer, employee,
partner, consultant, agent, independent contractor, or otherwise with, or
acquiesce in the use of his name." Notwithstanding the foregoing, it shall not
be a breach of the provisions of this Section 12 if, after the term of this
Agreement, Consultant is a passive investor in any publicly held entity and
Consultant owns three (3%) percent or less of the equity interests therein.
12.3 Solicitation of Employees. Consultant agrees
that during the Initial Term, and all Succeeding Terms, and for a period of one
(1) year thereafter, Consultant shall not induce or influence, or seek thereto,
any person who is engaged as an employee, agent, consultant or otherwise of the
Company to terminate his or her engagement or employment with the Company or to
engage or otherwise participate in a business activity, directly or indirectly,
competing with the business of the Company.
12.4 Restrictive Covenants Necessary and
Reasonable. Consultant agrees that
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the provisions of this Section 12 are necessary and reasonable to protect the
Company in the conduct of its business. If any restriction contained in this
Section 12 shall be deemed to be invalid, illegal, or unenforceable by reason of
the extent, duration or geographical scope thereof, or otherwise, then the court
making such determination shall have the right to reduce such extent, duration,
geographical scope, or other provisions hereof and in its reduced form such
restriction shall then be enforceable in the manner contemplated hereby.
13 Independent Contractor Status. It is specifically agreed and
understood that in performing the services herein, Consultant is acting as an
independent contractor and not as an employee of the Company. Furthermore,
nothing contained in this Agreement shall be construed to create the
relationship of partnership, joint venture or any other relationship between the
parties hereto other than the relationship of independent contractor.
14 Taxes. Consultant shall be solely liable for any and all
applicable taxes, including but not limited to sales, use, gross receipts,
value-added, excise, property or income, and penalties, levied or imposed, by
any federal, national, state, provincial or local governments, or any
subdivision of the foregoing related to this Agreement.
15 Indemnification. Consultant shall indemnify, defend and hold
harmless the Company with respect to any claim, debt or liability to the extent
that it is associated with any Canadian tax liability arising from this
Agreement including, but not limited to, sales tax, excise tax, payroll taxes,
El, CCP income tax and GST.
16 Injunctive Relief. Consultant, recognizing that irreparable
injury shall result to Company in the event of Consultant's breach of the terms
and conditions of this Agreement, agrees that in the event of his breach or
threatened breach, Company shall be entitled to injunctive relief restraining
Consultant, and any and all persons or entities acting for or with Consultant,
from such breach or threatened breach. Nothing herein contained, however, shall
be construed as prohibiting Company from pursuing any other remedies available
to it by reason of such breach or threatened breach.
17 Assignment. This Agreement is for the personal services of
Consultant only, and not for any other individual or entity. As such, this
Agreement is not assignable by Consultant under any circumstances and Consultant
hereby agrees that this restriction is reasonable in view of the services
performed by him. Consultant agrees that the Company may assign this Agreement.
If this assignment is the result of a merger of other business combination, the
Termination Fee will increase by 50%.
18 Miscellaneous.
18.1 Notices. Any and all notices, demands,
requests or other communication required or permitted by this Agreement or by
law to be served on, given to, or delivered to any Party hereto by any other
Party to this Agreement shall be in writing and shall be deemed duly served,
given, or delivered when personally delivered to the Party to be notified, or in
lieu of such personal delivery, when deposited in the mail, registered or
certified mail, return receipt requested, or when confirmed as received if
delivered by overnight courier, addressed to the to the Party to be notified, at
the address of the Company at its principal office, as first set forth above, or
to Consultant at the address as first set forth above. The Company or Consultant
may change the address in the manner required by law for purposes of this
paragraph by giving notice of the change, in the manner required by this
paragraph, to the respective Parties.
18.2 Amendment. This Agreement may not be
modified, changed, amended, or altered except in writing signed by Consultant or
his duly authorized representative, and by a, authorized officer of the Company.
18.3 Governing Law. This Agreement shall be
interpreted in accordance with the laws of the State of California. It shall
inure to the benefit of and be binding upon the Company, and its successors and
assigns. Consultant expressly consents to the personal jurisdiction of the state
and federal courts located in the State of California, County of Los Angeles for
any claims, suits or actions arising from or related to this Agreement.
18.4 Attorney's Fees. Should any litigation or
arbitration be commenced between
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the Parties to this Agreement concerning any provision of this Agreement, the
expense of all attorneys' fees and other costs incurred in connection therewith
shall be paid by the losing Party.
18.5 Severability. Should any provision or
portion of this Agreement be held unenforceable or invalid for any reason, the
remaining provisions and portions of this Agreement shall be unaffected by such
holding.
18.6 Entire Agreement. This Agreement constitutes
the sole and only agreement of the Parties hereto respecting the subject matter
hereof. Any prior agreements, promises, negotiations, or representations
concerning its subject matter not expressly set forth in this Agreement, are of
no force and effect.
18.7 Counterparts. This Agreement and any
certificates made pursuant hereto, may be executed in any number of counterparts
and when so executed all of such counterparts shall constitute a single
instrument binding upon all Parties hereto notwithstanding the fact that all
Parties are not signatory to the original or to the same counterpart.
18.8 Section Headings. The Article and Section
headings used in this Agreement are for reference purposes only, and should not
be used in construing this Agreement.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as
of the date set forth above.
RAINBOW TECHNOLOGIES, INC.
By: /s/ Xxxxxx Xxxxxx /s/ Xxxxxx Investments
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Xxxxxx Xxxxxx Xxxxxx Investments
Chief Executive Officer
/s/ Xxxxx Xxxxxx
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Xxxxx Xxxxxx
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