CONSULTING AGREEMENT (the "Agreement"), dated as of February 29, 2000,
between DYNAMICWEB ENTERPRISES, INC., a New Jersey corporation with principal
offices at 000 Xxxxx 00 Xxxx, Xxxxxxxx X, Xxxxx 000, Xxxxxxxxx, Xxx Xxxxxx 00000
(the "Company"), and XXXXXX X. XXXXXXXXXX, XX. with an address at 00 Xxxxxx
Xxxxx, Xxxx Xxxxxx, XX 00000 ("Consultant").
WHEREAS, the Consultant has served as the Chief Executive Officer of the
Company and has extensive experience in the field of business-to-business
electronic commerce;
WHEREAS, the Company has entered into an Agreement and Plan of Merger dated
December 1, 1999 with eB2B Commerce, Inc., as amended (the "Merger Agreement");
WHEREAS, in connection with the merger ("Merger") contemplated by the
Merger Agreement, the Consultant will resign as an officer, director and
employee of the Company; and
WHEREAS, due to the Consultant's expertise in the field of business-to-
business electronic commerce, the Company desires to retain the Consultant as a
consultant to the Company after the Merger, on the terms set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants herein set forth,
the Company and Consultant do hereby agree as follows:
1 Engagement. Effective immediately upon the consummation of the Merger
(the "Effective Time"), the Employment Agreement, dated as of March 1, 1998,
among the Company and the Consultant shall terminate and the Company hereby
agrees to engage the Consultant to serve as a business consultant, and the
Consultant hereby agrees to render business consulting services, to the Company
on the terms and conditions set forth in this Agreement. The services to be
rendered by the Consultant under this Agreement shall consist of providing
advice and consultation with respect to the Company's business operations and
with respect to the business-to-business electronic commerce industry generally,
to the extent requested by the Company. Such services shall be provided by the
Consultant at his discretion and at such times and places and in such manner as
may be convenient to the Consultant.
2 Term. The term of engagement under this Agreement shall commence at the
Effective Time, and shall continue for a term of eighteen (18) months, unless
terminated earlier pursuant to Section 6 of this Agreement.
3 Compensation. In consideration of the performance of the Consultant's
services hereunder and the Consultant's observation of the other terms,
conditions and covenants set forth herein, the Consultant shall receive a
monthly fee of $12,500, payable within ten (10) days after the end of each such
month during the term of engagement hereunder. Such fee shall be paid by wire
transfer if the Company regularly pays other vendors by means of wire transfers.
4 Company Vehicle. Until December 31, 2001, the Company shall provide to
the Consultant the use of the Jeep Cherokee currently leased by the Company for
use by the Consultant and the Company shall maintain the current levels of
insurance coverage on such vehicle. The Consultant will be responsible for the
maintenance, repair, fuel and all other costs relating to such vehicle,
including any material increase in the cost of insurance during such period. The
Consultant hereby agrees to indemnify and hold harmless the Company from any
damages or claims (including any third party claims) incurred by the Company
relating to such vehicle.
5 Expense Reimbursement. The Company shall reimburse Consultant or
otherwise provide for or pay for all reasonable and necessary expenses incurred
by Consultant at the request of the Company and in connection with the
performance of Consultant's duties and responsibilities hereunder, in accordance
with the Company's standard policies and procedures. Consultant agrees that he
will furnish to the Company adequate records and other documents for the
substantiation of each such expense.
6 Termination.
6.1 Termination by Consultant for Convenience. The Consultant has the right
to terminate his engagement hereunder for any reason at any time during the term
of this Agreement. In such event, all of the Company's obligations under this
Agreement will terminate immediately upon the date of such termination.
6.2 Termination by Consultant for Good Reason. The Consultant has the right
to terminate this Agreement for Good Reason at any time during the term of this
Agreement. In such event, all of Consultant's obligations under this Agreement
(other than those set forth in Section 7 and 10(A) hereof) will terminate
immediately upon the date of such termination, including without limitation,
those set forth in Sections 8 and 9. For the purposes of this Agreement, "Good
Reason" shall mean a material breach by the Company of this Agreement, the
Lock-Up Agreement dated February 29, 2000 between the Consultant and the
Company, the Indemnification Agreement dated February 29, 2000 between the
Consultant and the Company or the Executive Performance Bonus Agreement dated
February 29, 2000 between the Consultant and the Company; which is not cured, in
the case of a breach of any obligation to make any payment to the Consultant,
within 14 days after the Company's receipt of notice thereof, and, in the case
of a breach of any other obligation, within 30 days after the Company's receipt
of notice thereof.
6.3 Termination by the Company for Cause. The Company has the right to
terminate Consultant's engagement hereunder for "Cause." For the purposes of
this Agreement, "Cause" shall include: (i) conduct by Consultant willfully
intended to or likely to materially injure the Company's business or reputation;
(ii) fraud, embezzlement or misappropriation by Consultant of the assets of the
Company (and, as used in this Section 6.3, "assets" shall include, but not be
limited to Confidential Information (defined below)) and (iii) a material breach
by Consultant of any of the Consultant's covenants hereunder; provided, however,
that before such termination may occur, the Company shall have provided
Consultant with written notice and, if curable, a seven day opportunity to cure,
and shall have conducted a good faith investigation that includes a reasonable
opportunity for Consultant to present relevant information and evidence and,
following such investigation, the Board of Directors of the Company shall have
determined in good faith that Cause exists to terminate the Consultant's
engagement.
7 Confidentiality Agreement. As used herein, "Confidential Information"
shall mean all information concerning the Company (and each of its affiliates
and subsidiaries) (collectively, the "Company Group") and its past, present and
prospective customers, which is not generally known to the public.
7.1 Non-Disclosure. Consultant will not use, disclose or otherwise permit
any person or entity access to any Confidential Information other than as
required in the performance of
Consultant's services hereunder or as otherwise required by law or order of
a court or other judicial or administrative body.
7.2 Prevent Disclosure. Consultant will take all reasonable precautions to
prevent disclosure of any Confidential Information in accordance with the
Company's reasonable instructions to Consultant.
7.3 Return all Materials. Upon termination of Consultant's engagement
hereunder, Consultant will deliver to the Company all tangible materials
embodying 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 Confidential Information.
8 Non-Solicitation of Customers and Employees. During the term of the
Consultant's engagement hereunder, the Consultant shall not, either directly or
indirectly, (i) knowingly solicit away or attempt to solicit away from any
member of the Company Group any customers of any member of the Company Group or
any persons or entities known by the Consultant to be prospective customers of
any member of the Company Group (a "prospective customer" shall mean any person
or entity with whom any member of the Company Group has engaged in discussions
or other communications relating to such person or entity becoming a customer of
any member of the Company Group within ninety (90) days prior to such
solicitation or attempted solicitation) or (ii) knowingly solicit away or
attempt to solicit away from any member of the Company Group any person who at
the time of such solicitation or attempted solicitation (or at any time within
90 days prior to such solicitation or attempted solicitation) was an employee or
independent contractor of any member of the Company Group.
9 Non-Competition Agreement. For good and valuable consideration, the
receipt of which is hereby acknowledged, Consultant agrees that for a period
from the Effective Time until the date which is nine (9) months after the
Effective Time, Consultant shall not, directly or indirectly, engage or
"participate in" (as defined below) any business or other enterprise which is
engaged in the Business of the Company Group (a "Competitor"). The term
"participate in" shall mean: to own, manage, operate, control, loan money to,
invest in or be connected as a director, officer, employee, partner, consultant,
agent, independent contractor, or otherwise, or acquiesce in the use of
Consultant's name; provided that owning one percent (1%) or less of the
outstanding shares of capital stock of any corporation with one or more classes
of its capital stock listed on a national securities exchange or publicly traded
in the over-the-counter market shall not be included within the definition of
"participate in." The term "Business" of the Company Group shall mean the
business of bringing together buyers and sellers through the creation of
Internet-based or electronic markets that facilitate the exchange of goods,
services and information, but shall not include providing infrastructure
services. The term "infrastructure services" means selling software and services
to businesses engaged in electronic commerce to enable and facilitate the
execution of electronic commerce, including consulting and systems integration
and providing software. In addition to participating in infrastructure services,
it shall not be a breach of this Section 9 if the Consultant accepts employment
with a Competitor, the business of which is diversified provided that (i) he may
not, directly or indirectly, render services or assistance to any aspect of the
Competitor's business that is in any way engaged in the Business of the Company
Group and (ii) the Company shall have received, prior to the commencement of
such employment, written assurances deemed satisfactory by the Company from the
Consultant and the Competitor that he will not, directly or indirectly, render
services or assistance to any aspect of the Competitor's business that is in any
way engaged in the Business of the Company Group. Notwithstanding any term in
this Section 9 to the contrary,
the Consultant shall not, for a period of time from the Effective Date
until eighteen (18) months after the Effective Date, directly or indirectly,
engage or participate in the business of any of the following enterprises:
CommerceOne; Ariba; PurchasePro; Sterling Commerce; SPS Commerce; QRS Corp.;
Harbinger; GE Information Services; iCongo; or Xxxxxxxx.xxx. Upon the
Consultant's request, the Consultant and the Company shall discuss in good faith
whether a particular activity would violate this Section 9.
10 Non-Disparagement; Certain Statements. (A) During the term of the
engagement hereunder and at all times after the termination of such engagement,
the Consultant shall not, directly or indirectly, make any false or defamatory
statements about any member of the Company Group or any of its directors,
officers or employees. (B) In addition to the foregoing, during the term of the
effectiveness of the non-competition agreement as set forth in the first
sentence of Section 9 hereof, the Consultant shall not, directly or indirectly:
(i) take any action or make any statement intended, directly or indirectly, to
benefit a Competitor of any member of the Company Group, (ii) perform services
as a market analyst or engage in similar activity with respect to the securities
of companies engaged in the Business of the Company Group; or (iii) except in
response to any question posed to the Consultant by a student during an
educational seminar or lecture at a college or university (provided such
response relates solely to the Consultant's experiences as an officer of a
company engaged in business-to-business electronic commerce), make any
statements to the public in any medium or forum (including any Internet message
board or any conference) relating to the Company or to the Business generally,
without first (1) providing the Company with the text of any such proposed
statements and, if applicable, a description of the substance of any additional
verbal statements which the Consultant intends to make and (2) obtaining the
Company's consent to such statements. Nothing in this Section 10 shall be
construed to prohibit the Consultant from responding truthfully or giving
truthful testimony in response to a subpoena, discovery request, court order or
in connection with any other legal process or proceeding. (C) During the term of
the engagement hereunder and at all times after the termination of such
engagement, no member of the Company Group shall, directly or indirectly, make
any false or defamatory statements about the Consultant. Upon the Consultant's
request, the Consultant and the Company shall discuss in good faith whether a
particular activity would violate this Section 10.
11 Copyrights. Consultant agrees that any work which has been or will be
prepared for the Company by the Consultant which is protected under United
States Copyright laws or under the universal Copyright Convention, the Berne
Copyright convention and/or the Buenos Aires Copyright Convention shall be a
work made for hire and ownership of all copyrights (including all renewals and
extensions) therein shall vest in the Company. In the event any such work is
deemed not to be a work made for hire for any reason, Consultant hereby grants,
transfers and assigns all right, title and interest in such work and all
copyrights in such work and all renewals and extensions thereof to the Company,
and agrees to provide all assistance reasonably requested by the Company in the
establishment, preservation and enforcement of its copyright in such work, such
assistance to be provided at the Company's expense but without any additional
compensation to Consultant. Consultant hereby agrees to and does hereby waive
all rights with respect to the work which has been or will be developed or
produced by the Consultant in connection with his employment by the Company
prior to the Effective Date or in connection with the engagement hereunder,
including, without limitation any and all rights of identification of authorship
and any and all rights of approval, restriction, or limitation on use or
subsequent modifications.
12 Conflicting Obligations and Rights. Consultant shall inform the Company
in writing of any apparent conflict between Consultant's services hereunder and
(i) any obligations
Consultant may have to preserve the confidentiality of another's proprietary
information or materials, or (ii) any rights Consultant may claim to any
patent, copyright, trade secret, or other discovery, invention, idea,
know-how, technique, method, process or other proprietary information or
materials, prior to the performance of such duties and responsibilities. In the
absence of such written notice, the Company may conclude that no such conflict
exists and Consultant agrees thereafter to make no claim against the Company
relating to the foregoing. The Company shall hold such disclosures by Consultant
in strict confidence.
13 Remedies. Consultant, recognizing that irreparable injury may result to
the Company in the event of Consultant's breach of the terms and conditions of
this Agreement, agrees that, in the event of a material breach or threatened
material breach of the terms of Section 7, 8, 9, or 10 hereof, the Company shall
be entitled to injunctive relief restraining Consultant, and any and all persons
or entities acting for or with him, from such breach or threatened breach.
Consultant does not, however, waive any right to have a bond posted in
connection with any action seeking injunctive relief. In addition, in the event
Consultant breaches the terms of Section 7, 8, 9 or 10 hereof, the Consultant
shall, on demand, pay to the Company, as liquidated damages, the amount of
$150,000; provided no such payment will be required unless (A) the Consultant
has received notice of such material breach or threatened material breach; (B)
to the extent such breach is curable, the Consultant has failed to cure such
breach within five (5) days of such notice; and (C) there has been a Final
Determination that the Consultant has materially breached one of such Sections
7, 8, 9 or 10. As used herein, a "Final Determination" shall mean (i) a judgment
of any court, if no appeal is pending from such judgment and if the time to
appeal therefrom has elapsed, (ii) a determination by an arbitrator in any
arbitration proceedings, if there is not pending any motion to set aside such
determination and if the time within which to move to set aside such
determination has elapsed, (iii) a written acknowledgement signed by the
Consultant or (iv) such other evidence of a final determination as shall be
acceptable to the Consultant. Nothing herein contained, however, shall be
construed as prohibiting the Company from pursuing any other remedies available
to it by reason of such breach or threatened breach.
15 Covenants Necessary and Reasonable. The parties expressly acknowledge
and agree that the covenants and agreements of the Consultant set forth herein
are reasonable in all respects, and necessary in order to protect and maintain
the value and goodwill of the Company's business, as well as the proprietary and
other legitimate business interests of the Company. In the event that any
provision contained in this Agreement shall be held to be excessively broad as
to duration, geographical scope, or otherwise, such provision shall be construed
as modified to the extent necessary to cause such provision to be enforceable.
16 Post-Engagement Procedures. Consultant agrees that, upon the termination
of his engagement with the Company hereunder, he will certify to the Company in
writing that he has fully complied with the terms of this Agreement.
17 Non-Assignability. Consultant's rights under this Agreement are personal
to him, and no such right or benefit shall be subject to voluntary or
involuntary alienation, assignment, or transfer. The obligations of the Company
hereunder shall be binding on its successor and assigns and the provisions of
this Agreement may be enforced by any successor or assignee of the Company.
18 Independent Contractor Status. The Consultant shall be responsible for
the payment and reporting of all Federal and state income taxes, unemployment
insurance, social security/self-employment taxes or other payments required to
be withheld or paid pursuant to
any law or requirement of any governmental body. The Consultant shall not
be entitled to any rights, benefits or privileges established for employees of
the Company, such as health, disability and/or life insurance or any retirement
plan benefits, nor shall the Consultant be entitled to unemployment payments in
the event of termination of the engagement hereunder.
19 General Release. At the Effective Time, Consultant shall deliver to the
Company a General Release substantially in the form attached hereto as Exhibit
A.
20 Miscellaneous.
20.1 Notices. Any and all notices, demands, requests or other
communications 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, when deposited in the United States
registered or certified mail (postage prepaid, return receipt requested), or
when confirmed as received if delivered by overnight courier (charges prepaid),
addressed to the applicable party at the respective address first set forth
above, or such other address as such party shall have provided to the other
party, in the manner required by this paragraph.
20.2 Amendment. This Agreement may not be modified, changed, amended, or
altered except in writing signed by Consultant or his duly authorized
representative, and by an authorized officer of the Company.
20.3 Governing Law. This Agreement shall be interpreted in accordance with
the laws of the State of New York. It shall inure to the benefit of and be
binding upon the Company, and its successors and assigns.
20.4 Attorney's Fees. Should any litigation be commenced between 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.
20.5 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.
20.6 Entire Agreement; Termination of Prior Agreements. This Agreement
constitutes the entire 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. Without limiting the foregoing, effective as of the
Effective Time, (i) the Consultant hereby resigns all of his positions as
director, officer and employee of the Company; and (ii) all employment
agreements or other agreements between the Consultant and the Company which
relate to providing services to the Company and/or compensation of any kind to
the Consultant for such services or in connection with such agreements
(including any agreements concerning severance payments or post termination
obligations) are hereby terminated and shall be of no further force or effect.
20.7 Counterparts. This Agreement 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.
20.8 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 have executed this Consulting Agreement the
day and year as set forth above.
DYNAMICWEB ENTERPRISES, INC.
By: /s/ Xxxxxx X. Xxxxxxxxxx, Xx.
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Name: Xxxxxx X. Xxxxxxxxxx, Xx.
Title: Chief Executive Officer
/s/ Xxxxxx X. Xxxxxxxxxx, Xx.
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Xxxxxx X. Xxxxxxxxxx, Xx.
