Exhibit 10.7
CONSULTANT AND NON-COMPETITION AGREEMENT
AGREEMENT dated as of November 1, 1996, between CareFlow |Net, Inc., a
Delaware corporation having a principal place of business at 000 Xxxx Xxxxxx -
Xxxxx 000, Xxxxxxxxxx, Xxxx Xxxxxxxx 00000 (the "Company"), and Xxxxxxxx X.
Xxxxx, Ph.D. ("Consultant"), residing at 0000 Xxxxxxxx Xxxxx, Xxxxxxxxxx, Xxxx
Xxxxxxxx 00000.
RECITALS:
A. The Company wishes to retain Consultant as an independent consultant
to the Company upon terms and conditions as set forth herein, to assist the
Company in, among other things, product design development and design review and
product commercialization, including patent, copyright or other proprietary
rights obtained thereon, related to the Business of the Company (as defined
herein), and Consultant desires to undertake such efforts upon the terms and
conditions set forth herein; and
B. The Company desires that Consultant not compete with the Company,
except as set forth herein,
THEREFORE, In consideration of the above premises and the mutual
agreements hereinafter set forth, the parties hereby agree as follows:
1. DEFINITIONS. Whenever used in this Agreement, the following terms and
their variant forms shall have the meaning set forth below:
1.1 "AGREEMENT" shall mean this Agreement and any Exhibits
incorporated herein, together with any amendments hereto made in the manner
described in this Agreement.
1.2 "AFFILIATE" shall mean any business entity which controls the
Company, is controlled by, or is under common control with the Company.
1.3 "BUSINESS OF THE COMPANY" shall mean the business of researching,
developing, inventing, manufacturing, licensing or selling software and related
products for the management, storage, manipulation, retrieval (and related
functions) of healthcare data, including patient medical and financial
information and providing services in support of such software and related
products.
1.4 "CONSULTING FIELD" shall mean activities relating to research and
development, technical review, testing and commercialization of the software
and related
products of the Company and provision of consulting and software and related
product support services by the Company.
1.5 "INITIAL TERM" shall mean that period of time commencing with the
date of this Agreement and running until the earlier of (a) October 31, 1999
or (b) any termination of this Agreement as provided for in Section 4 hereof.
1.6 "INVENTION" shall mean any discovery, whether or not patentable,
including, but not limited to, any useful process, method, formula, technique,
machine, manufacture, composition of matter, algorithm, computer program,
software, or any portion thereof or code therefor, as well as improvements
thereto, which is new or which Consultant has a reasonable basis to believe may
be new.
1.7 "PROPRIETARY INFORMATION" shall mean:
(a) Information related to the Business of the Company or any
Affiliate,
(i) Which derives economic value, actual or potential, from not
being generally known to or readily ascertainable by other
persons who can obtain economic value from its disclosure or use;
and
(ii) Which is the subject of efforts that are reasonable under
the circumstances to maintain its secrecy; and
(b) All tangible reproductions or embodiments of such information.
Assuming the criteria in (a)(i) and (a)(ii) above are satisfied, Proprietary
Information includes, but is not limited to, technical and nontechnical data
related to the formulas, patterns, designs, compilations, programs, algorithms,
software, codes, Inventions, methods, techniques, drawings, processes, finances,
actual or potential customers and suppliers, existing and future products, and
employees of the Company or its Affiliates. Proprietary Information also
includes information which has been disclosed to the Company or its Affiliates
by a third party and which the Company or any Affiliate is obligated to treat as
confidential.
1.8 "SUBJECT INVENTION" shall mean any Invention that is conceived by
Consultant, alone or in a joint effort with others during the Term of this
Agreement, that results from work or other activities that Consultant performs
or undertakes under this Agreement or from work or activities that have been
assigned as part of his duties as a consultant to the Company; or from any
Proprietary Information that has been disclosed to Consultant.
1.9 "SUBJECT WORK" shall mean any Work that is conceived by
Consultant, alone or in a joint effort with others during the Term of this
Agreement, that results from work or other activities that Consultant performs
or undertakes under this Agreement or from work or activities that have been
assigned as part of his duties as a consultant to the Company; or from
- 2 -
any Proprietary Information that has been disclosed to Consultant. It is
understood that a Subject Work can also be deemed an Invention or a Subject
Invention.
1.10 "TERM" shall mean the Initial Term and all subsequent renewal
periods.
1.11 "WVU" shall mean West Virginia University .
1.12 "WORK" shall mean a copyrightable Work of authorship, including
without limitation, any technical descriptions for products, user's guides,
illustrations, advertising materials, computer programs and codes (including the
contents of read only memories), plans, diagrams, specifications and other such
Works, and any contribution to such materials.
02. TERMS OF CONSULTING ARRANGEMENT; DUTIES. The Company hereby retains
Consultant, and Consultant hereby accepts such engagement, in a consulting and
advisory position, to perform the tasks and services delegated to him by the
Board of Directors and President of the Company or their designated employees or
representatives. Consultant shall be referred to as Consultant and Chief
Scientist and shall at the request of the Company, be available for one day per
week during the Term pursuant to a mutually agreed-upon schedule to render
advisory and consultation services to the Company. Such advisory and
consultation services shall be approved in advance by the Company and shall (i)
be carried out at the facilities of the Company or at such other place as may be
mutually convenient and agreed to by the Company and the Consultant, as
appropriate, (ii) relate primarily to the Consulting Field, (iii) include
assisting the Company in obtaining patents, copyrights or other rights relating
to the Subject Inventions and technologies developed during the Term, as
appropriate, subject to the provisions of Sections 5, 6, 7 and 8 hereof , and
assisting the Company in negotiations relating to such commercialization and
(iv) include public relations activities, such as public appearances and
interviews in support of the Business of the Company and the products and
services of the Company. Consultant will be designated as a nominee for
election as a director of the Company, and agrees to serve in such capacity if
so elected, during the Term.
3. TERM AND TERMINATION.
3.1 TERM. This Agreement shall remain in effect for the Term. Upon
expiration of the Initial Term or any subsequent renewal Term, this Agreement
may be renewed only by mutual, written agreement of Consultant and the Company.
Absent such written renewal agreement, this Agreement shall expire at the end of
the then current Term. The obligations of Consultant pursuant to Sections 5
through 12 of this Agreement shall survive the termination of the engagement of
Consultant hereunder.
3.2 TERMINATION. During the Term, commencing November 1, 1996, the
engagement of the Consultant under this Agreement may be terminated by either
party upon
- 3 -
at least 120 days prior written notice of its intent to terminate; provided,
however, that if Consultant elected to terminate the Agreement pursuant to this
paragraph, the provisions of Sections 5, 6 and 7 shall apply to any Subject
Invention or Subject Work conceived, initiated, reduced to practice, or
substantially completed during the Term for a period of 240 days after the date
of such termination.
4. COMPENSATION; EXPENSES. Consultant shall receive the following
compensation for services provided hereunder:
4.1 COMPENSATION. Consultant shall be compensated at a rate of
$50,000 per annum, payable in equal monthly increments commencing as of November
1, 1996. Consultant shall be eligible to receive stock options, as shall be
determined from time to time by the Board of Directors under comparable criteria
as may be applied to other senior management of the Company.
4.2 EXPENSE REIMBURSEMENT. During the Term, the Consultant shall be
reimbursed for reasonable travel expenses incurred in connection with his
activities hereunder, upon submission of appropriate vouchers and in accordance
with then current Company expense reimbursement policies.
5. INVENTIONS.
5.1 SUBJECT INVENTIONS CONCEIVED DURING THE TERM. Consultant agrees
that all Subject Inventions, and all patent rights and copyrights to such
Subject Inventions, will become the property of the Company. Consultant hereby
irrevocably assigns or agrees to assign to the Company all of his rights to all
such Subject Inventions and agrees that he shall receive no further compensation
or consideration for such assignments.
5.2 NOTIFICATION OF CONCEPTION OF SUBJECT INVENTION. Consultant
agrees that if he, alone or in a joint effort with others, conceives a Subject
Invention during the Term, he will promptly provide a written description of
the Subject Invention to the Company.
5.3 RECORDS. Consultant shall maintain and make copies available to
the Company appropriate records of all research and development activities
adhering to any specific guidelines for the same which are promulgated by the
Company, which shall, if properly maintained and promptly disclosed to the
Company, satisfy the requirement of providing a written disclosure of any
Subject Inventions or Subject Works. If applicable, Consultant shall complete
written call reports on contacts with prospective or existing customers adhering
to any specific guidelines for the same which are promulgated by the Company.
- 4 -
6. PATENT APPLICATIONS. Consultant agrees that should the Company elect
to file an application for patent protection either in the United States or in
any foreign country, on a Subject Invention of which Consultant was an inventor
or co-inventor, he will execute all necessary documentation relating to the
patent applications, including formal assignments to the Company.
Consultant further agrees that he will cooperate with attorneys or
other persons designated by the Company by explaining the nature of any Subject
Invention for which the Company elects to file an application for patent
protection, reviewing applications and other papers and providing any other
cooperation required for prosecution of the patent applications. The Company
will be responsible for all expenses incurred for the preparation and
prosecution of all patent applications on Subject Inventions assigned to the
Company.
7. COPYRIGHTS.
7.1 SUBJECT WORKS CREATED BY CONSULTANT DURING THE TERM. Consultant
agrees that every Subject Work shall be considered a "Work Made for Hire" and
be subject to the applicable provisions contained in Sections 101 and 201 of the
United States Copyright Law, Title 17 of the United States Code. All right,
title and interest to copyrights in all such Subject Works will be the property
of the Company. Consultant acknowledges and agrees that, to the extent the
provisions of Title 17 of the United States Code do not vest in the Company the
copyrights to such Subject Works, Consultant hereby assigns or agrees to assign
to the Company all right, title and interest to copyrights which he may have in
the Subject Works; further, the foregoing shall be deemed a continuing
assignment.
7.2 NOTIFICATION OF CREATION OF SUBJECT WORK. Consultant must
disclose to the Company all Subject Works referred to in Section 7.1 and will
execute and deliver all applications registrations, and documents relating to
the copyrights to the Subject Works and will provide assistance to secure and
perfect the Company's title to the copyrights in the Subject Works. The Company
will be responsible for all expenses incurred in connection with the
registration of all the copyrights.
7.3 NO PRIOR SUBJECT WORKS. Consultant claims no ownership rights
in any Subject Works relating to the Consulting Field, except those described on
Exhibit A.
8. PROPRIETARY INFORMATION.
8.1 OWNERSHIP OF PROPRIETARY INFORMATION. All Proprietary
Information received or developed by Consultant while he is a consultant to the
Company will remain the sole and exclusive property of the Company.
- 5 -
8.2 OBLIGATIONS OF CONSULTANT. During the Term and thereafter,
Consultant will hold the Proprietary Information in trust and strictest
confidence, and will not use, reproduce, distribute, disclose or otherwise
disseminate the Proprietary Information, except to the extent necessary to
perform the duties assigned to him by the Company.
8.3 DELIVERY UPON TERMINATION. Upon termination of his engagement
by the Company, Consultant will promptly deliver to the Company all property
belonging to the Company, including without limitation all Proprietary
Information then in his possession or control.
9. COVENANTS.
9.1 COVENANT NOT TO COMPETE.
During the Term, any renewal term and for a period of one (1)
year thereafter, the Consultant covenants and agrees not to consult with or
become employed by, license otherwise make available any Subject Invention,
including any Subject Work, to, or enter into discussions or negotiations to
consult with to become employed by, license otherwise make available any Subject
Invention, including any Subject Work, to, any other entity which competes, or
which, through the services of Consultant, could compete, directly or
indirectly, with the Business of the Company, without the prior written consent
of the Company. In addition, Consultant covenants and agrees (A) not to engage
in any activities that compete or could compete, directly or indirectly, with
the Business of the Company without the prior written consent of the Company
during the Term, any renewal term and thereafter (i) for a period of one (1)
year if the Consultant elects to terminate this Agreement pursuant to Section
3.2 or not to renew this Agreement or (ii) for a period of 120 days if the
Company elects to terminate this Agreement pursuant to Section 3.2 or not to
renew this Agreement and (B) not to cause the unauthorized use of any Subject
Invention or Subject Work during the Term, any renewal term and thereafter.
9.2 NON-SOLICITATION.
The Consultant expressly covenants and agrees that he will not,
at any time during the Term, and for a period of one (1) year thereafter,
directly or indirectly, (a) induce or attempt to influence any employee of, or
consultant under contract with, the Company to leave its employ; or (b) aid, or
agree to aid, any competitor or supplier of the Company in any attempt to hire
any person who shall have been employed by, or who was a consultant under
contract with, the Company, within one year preceding such requested aid; or
(c) induce, or attempt to influence, any person who was a supplier to the
Company to transact business with a competitor of the Company; provided, nothing
contained herein shall otherwise prevent Consultant from writing letters of
recommendation for any such person if Consultant has otherwise complied with the
terms of this Agreement.
- 6 -
9.3 COOPERATION IN LICENSING
Consultant agrees if requested by the Company, to use his best
efforts to assist the Company in obtaining licenses or other rights to use
patents or other proprietary rights held by WVU or other inventors relating to
the Consulting Field.
For the purposes of this Section 9, the term "directly or
indirectly", shall include participation as an officer, director, employee,
consultant agent, representative, shareholder, partner, joint venturer or
individual proprietor. The foregoing shall not be construed as preventing
Consultant from investing assets in such form or manner where Consultant does
not perform services for such company in which such investment may be made. The
ownership by Consultant of stock listed on a national securities exchange, of
any corporation conducting such competing business, provided Consultant and
members of Consultant's family, in the aggregate, do not beneficially own more
than two (2%) percent of the stock of such corporation, shall not be deemed a
violation of this Agreement.
10. CONSULTANT'S REPRESENTATIONS.
10.1 NO OTHER AGREEMENTS. Consultant represents that, other than as
set forth on Schedule 10.1, with the exception of WVU, Consultant is not
currently a party to any employment, consulting or other agreement with, nor
does he consult with or have any other obligation or understanding to provide
services to any entity other than the Company, and Consultant agrees that he
will notify the Company if and when he enters into any such agreement,
consulting relationship, obligation or understanding. Consultant represents
that he is not now under any agreement, express or implied, nor has he
previously at any time entered, nor will he during the Term, enter into any
agreement with any person, firm or corporation which would or could in any
manner preclude or prevent his from entering into and performing this Agreement
according to its terms; provided, however, that the Company shall not assign any
work, activity or duty to Consultant that will conflict with his obligations as
an employee of WVU.
10.2 NO INVENTIONS OR WORKS AFFECTED. Consultant hereby warrants and
represents to the Company that he has not executed any agreement with any other
party which purports to require him to assign or license any Subject Work or any
Subject Invention pertaining to the Business of the Company created, conceived
or first practiced by him during the Term.
10.3 NO VIOLATION OF LAWS OR AGREEMENTS. Consultant hereby
represents and warrants to the Company that his execution and performance of his
duties under this Agreement will not result in a material violation or breach of
any applicable law, rule or regulation of any governmental entity or any
contract to which Consultant is a party or is otherwise bound.
- 7 -
11. RELATIONSHIP OF PARTIES.
11.1 RELATIONSHIP. It is hereby agreed between the parties that
Consultant is an independent contractor, and shall not hold himself out to be an
officer, partner or employee of the Company for any purpose whatsoever.
Consultant shall control the manner and means of accomplishing the agreed
services, and shall be responsible for the full, adequate, and timely completion
of said services. The Company may, during the Term, engage other independent
contractors to perform the same or similar work that Consultant performs
hereunder.
11.2 BENEFITS; TAXES. None of the benefits provided by the Company
to its employees, including but not limited to medical, life, accident, or
disability insurance, pension or profit sharing plans, unemployment or Worker's
Compensation, are available to Consultant. No withholding or Federal or state
income taxes, social security or related contributions shall be made from
payments made to the Consultant, and Consultant shall be solely responsible for
payment of any such taxes or contributions due on account of payments received
under this Agreement.
11.3 COMPLIANCE WITH LAWS, RULES, REGULATIONS. The Consultant shall
observe all laws and governmental regulations and all of the Company rules and
regulations while providing services pursuant to this Agreement.
12. REMEDIES.
12.1 UNIQUENESS OF SERVICES. It is expressly understood and agreed
that the services to be rendered hereunder by Consultant are special, unique,
and of extraordinary character, that the material terms and conditions contained
in this Agreement are of the essence of this Agreement; that each of such
material terms and conditions is reasonable and necessary to protect the
business, interests and properties of the Company; and that irreparable loss and
damage will be suffered by the Company should Consultant breach any of such
material terms and conditions. Therefore, Consultant agrees and consents that,
in addition to all the remedies provided by law or in equity, the Company shall
be entitled to a temporary restraining order and temporary and permanent
injunctions to prevent a breach or contemplated breach of any of such covenants
and agreements, to enforce specific performance by Consultant, or to enjoin
Consultant from performing services rendered under this Agreement for any other
person or entity.
12.2 CUMULATIVE REMEDIES. The Company and Consultant agree that
all remedies available to the Company or Consultant, as applicable, shall be
cumulative.
13. SEVERABILITY. The parties agree that each of the provisions included
in this Agreement is separate, distinct, and severable from the other provisions
of this Agreement, and
- 8 -
that the invalidity or unenforceability of any Agreement provision shall not
affect the validity or enforceability of any other provision of this Agreement.
Further, if any provision of this Agreement is ruled invalid or unenforceable by
a court of competent jurisdiction because of a conflict between the provision
and any applicable law or public policy, the provision shall be redrawn to make
the provision consistent with and valid and enforceable under the law or public
policy.
14. NOTICE. All notices and other communications required or permitted
under this Agreement shall be in writing and, if mailed by prepaid first-class
mail or certified mail, return receipt requested, shall be deemed to have been
received on the earlier of the date shown on the receipt or five (5) business
days after the postmarked date thereof. In addition, notices hereunder may be
delivered by hand or overnight courier, in which event the notice shall be
deemed effective when delivered. All notices and other communications under
this Agreement shall be given to the parties hereto at the following addresses
(or at such other addresses as either party shall provide to the other pursuant
to this section):
(i) If the Company, to it at:
000 Xxxx Xxxxxx - Xxxxx 000
Xxxxxxxxxx, Xxxx Xxxxxxxx 00000
with a copy to:
Xxxxxxx Xxxxx Xxxxxxx & Xxxxxx, LLP
000 Xxxxxxx Xxxxxx - 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxx, Esq.
(ii) If to Consultant, to him at:
0000 Xxxxxxxx Xxxxx
Xxxxxxxxxx, Xxxx Xxxxxxxx 00000
with a copy to:
Xxxxxx Xxxxx
The Atrium Building, Apt. 000
Xxxxx Xxx Xxxxxxxxx
Xxxxxxxxx, Xxxxxxxx
- 9 -
15. BINDING EFFECT. The rights, benefits, duties and obligations under this
Agreement shall inure to, and be binding upon, the Company, and its respective
successors and assigns and upon Consultant and his representatives, heirs, and
legatees. Consultant may not assign his obligations hereunder.
16. GOVERNING LAW.
This Agreement shall be governed by and construed in accordance with
the laws of the State of Maryland.
17. WAIVER. A waiver by the Company of any breach of this Agreement by
Consultant shall not be effective unless in writing, and no waiver shall operate
or be construed as a waiver of the same or another breach on a subsequent
occasion.
18. ENTIRE AGREEMENT. This Agreement embodies the entire and final
agreement of the parties on the subject matter stated in the Agreement. No
amendment or modification of this Agreement shall be valid or binding upon the
Company or Consultant unless made in writing and signed by both parties. All
prior understandings and agreements relating to the subject matter of this
Agreement are hereby expressly terminated.
- 10 -
19. HEADINGS.
The headings of the paragraphs herein are inserted for convenience and
shall not affect any interpretation of this Agreement.
THIS AGREEMENT, AS A CONDITION OF CONSULTANT'S ENGAGEMENT BY THE
COMPANY, CONTAINS AN ASSIGNMENT OF CERTAIN PATENT AND OTHER PROPRIETARY RIGHTS
TO INVENTIONS HE CONCEIVES WHILE A CONSULTANT TO THE COMPANY AND IMPOSES UPON
HIM CERTAIN CONFIDENTIALITY RESTRICTIONS WITH RESPECT TO PROPRIETARY INFORMATION
BELONGING TO THE COMPANY. PLEASE READ THIS AGREEMENT CAREFULLY BEFORE SIGNING.
IN WITNESS WHEREOF, the Company and Consultant have executed and
delivered this Agreement as of the date first set forth above.
XXXXXXXX X. XXXXX: CAREFLOW | NET, INC.
/s/ Xxxxxxxx X. Xxxxx By: J. Xxxxxx Xxxxxx
--------------------- ----------------
Title: President and CEO
-----------------
- 11 -
CONSULTANT AND NON-COMPETITION AGREEMENT
Dated as of November 1, 1996
between CareFlow |Net, Inc. (the "Company"), and Xxxxxxxx X. Xxxxx, Ph.D.
("Consultant")
SCHEDULE 10.1
Consultant is a principal of Cybermarch, Inc. and another company spun off from
Cybermarch, (to be known as "TU On the Net"). TU On the Net is primarily
concerned with providing technical education world-side on the Internet.
Consultant hereby advises the Company that Consultant's involvement in either of
these two entities or entities dealing with these two antedates is and will be
outside the scope of the Consulting Field and that such activities have not and
will not in any way conflict with the terms and conditions of this Agreement.
- 12 -
CAREFLOW | NET, INC.
(the "Company")
SPECIAL TERMS AND CONDITIONS FOR CONFIDENTIAL INFORMATION
The Company has disclosed and may disclose certain confidential information
(the "Confidential Information") to you in connection with the Business of the
Company.
The Confidential Information heretofore or hereafter made available to you was
and will be made on the following terms and conditions.
1. You will maintain all the Confidential Information in secrecy, will
not disclose it to others, and will use it only for the purposes of
the Consultant and Non-Competition Agreement executed simultaneously
herewith.
2. You will disclose the Confidential Information only with the
permission of the Company, and only to those who have reason to know
and who have undertaken an obligation of secrecy to you at least as
extensive as that which you have to us under the terms of this
agreement.
3. Your obligations of secrecy and non-use under this agreement will not
extend to any information which:
a. is generally available to the public as of the date of this
agreement or subsequently becomes available to the public through no
fault of yours, or
b. was already known to you prior to your receipt from us, as
evidenced by your prior written records, or
c. is disclosed to you by a third party who did not derive the
information directly or indirectly from us.
4. All memoranda, papers, letters, notes, notebooks and other written or
printed matter and all copies thereof in any way relating to the
Business of the Company that come into your possession or are made by
you shall be held by you as our property and returned to us promptly
upon our request.
- 13 -
If you are willing to accept the disclosures of the Confidential
Information under these terms and conditions, please indicate your acceptance by
signing the enclosed copy of this letter and returning it to us.
Very truly yours,
CAREFLOW | NET, INC.
By: /s/ J. Xxxxxx Xxxxxx
--------------------------------
Name: J. Xxxxxx Xxxxxx
------------------------------
Title: President and CEO
-----------------------------
Accepted as of the first day of November, 1996
/s/ Xxxxxxxx X. Xxxxx
------------------------------
Xxxxxxxx X. Xxxxx, Ph.D.
