EXHIBIT 10.18
HELLOSOFT, INC.
SERVICES AGREEMENT
This Services Agreement (the "Agreement") is made and entered into as of
March 31st, 2004 ("Effective Date") by and between NEW VISUAL, a California
corporation, having its place of business at 0000 Xxxxxx Xxxx, Xxxxx 000, Xxx
Xxxxx, XX 00000 (the "Company"), and HelloSoft, Inc., a California corporation,
having its principal place of business at 0000 Xxxxxxx Xxxx, Xxxxx 000 Xxx Xxxx
XX 00000, XX (the "Consultant"). The Company desires to retain the Consultant as
an independent contractor to perform consulting services for the Company and the
Consultant is willing to perform such services on terms set forth more fully
below. In consideration of the mutual promises contained herein, the parties
agree as follows:
1. Purpose and Scope of Agreement. This Agreement sets for the terms
and conditions under which Consultant will perform development services for
Company. Consultant has agreed to enter into this Agreement and work at a pace
as allowed by the Company's available resources. The Consultant is entering into
this Agreement (Phase 1) with the understanding that the Consultant and the
Company are working towards the mutual goal of executing a license agreement
(Phase 2) that provides the Company with services and Consultant compensation as
described in the November 14th, 2003 proposal from HelloSoft to New Visual.
2. Services and Compensation.
(a) The Consultant agrees to perform for the Company the
services set forth on Exhibit A attached hereto (the "Services"). During the
performance of the Services, Consultant may deliver its own products,
inventions, discoveries, and intellectual property ("HSInventions") to the
Company.
(b) The Company agrees to pay the Consultant the compensation
set forth on Exhibit B attached hereto for the performance of the Services.
3. Confidentiality.
(a) "Confidential Information" means any Company proprietary
information, technical data, trade secrets or know-how, including, but not
limited to, research, product plans, products, services, customers, customer
lists, markets, software, developments, inventions, prototypes, specifications,
processes, formulas, technology, designs, drawings, engineering, hardware
configuration information, marketing, finances or other business information
disclosed by the Company either directly or indirectly in writing, orally or by
drawings or inspection of parts or equipment. Company's Confidential Information
is of substantial value, and Company's business will be impaired if such
Confidential Information is improperly disclosed or used.
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(b) For greater certainty, "Confidential Information" does not
include information which (i) is known to the Consultant at the time of
disclosure to the Consultant by the Company as evidenced by written records of
the Consultant, (ii) has become publicly known and made generally available
through no wrongful act of Consultant or (iii) has been rightfully received by
the Consultant from a third party who is authorized to make such disclosure.
(c) The Consultant will not, during or subsequent to the term
of this Agreement, use the Company's Confidential Information for any purpose
whatsoever other than the performance of the Services on behalf of the Company
or disclose the Company's Confidential Information to any third party, and it is
understood that said Confidential Information shall remain the sole property of
the Company. The Consultant further agrees to take all reasonable precautions to
prevent any unauthorized disclosure of the Confidential Information including,
but not limited to, having each employee of the Consultant, if any, with access
to any Confidential Information, execute a nondisclosure agreement containing
provisions in the Company's favor substantially similar to Sections 2, 3 and 5
hereof. The Consultant will not directly or indirectly disclose to anyone the
existence of this Agreement or the fact that the Consultant has this arrangement
with the Company, without the Company's prior written consent.
(d) The Consultant recognizes that the Company has received
and in the future will receive from third parties their confidential or
proprietary information subject to a duty on the Company's part to maintain the
confidentiality of such information and to use it only for certain limited
purposes. The Consultant agrees that the Consultant owes the Company and such
third parties, during the term of this Agreement and thereafter, a duty to hold
all such confidential or proprietary information in the strictest confidence and
not to disclose it to any person, firm or corporation or to use it except as
necessary in carrying out the Services for the Company consistent with the
Company's agreement with such third party.
(e) Upon the termination of this Agreement, or upon the
Company's earlier request, the Consultant will deliver to the Company (or
destroy upon request of Company,) all of the Company's property or Confidential
Information that the Consultant may have in Consultant's possession or control.
In the case of destruction, the Consultant shall prove the destruction of the
Confidential Information by sending written evidence to the Company within 30
days of such destruction.
4. Ownership.
(a) The Consultant agrees that all copyrightable material,
notes, records, drawings, designs, inventions, improvements, developments,
discoveries and trade secrets (collectively, the "Inventions") conceived, made
or discovered by the Consultant, solely or in collaboration with others, during
the period of this Agreement which relate in any manner to the business of the
Company that the Consultant may be directed to undertake, investigate or
experiment with or which Consultant may become associated with in work,
investigation or experimentation in the line of business of the Company in
performing the Services hereunder, are the sole property of the Company. In
addition, any Inventions which constitute copyrightable subject matter shall be
considered "works made for hire" as that term is defined in the United States
Copyright Act. The Consultant further agrees to assign (or cause to be assigned)
and does hereby assign fully to the Company all such Inventions and any
copyrights, patents, mask work rights or other intellectual property rights
relating thereto.
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(b) The Consultant agrees to assist the Company, or its
designee, at the Company's expense, in every proper way to secure the Company's
rights in the Inventions and any copyrights, patents, mask work rights or other
intellectual property rights relating thereto in any and all countries,
including the disclosure to the Company of all pertinent information and data
with respect thereto, the execution of all applications, specifications, oaths,
assignments and all other instruments which the Company shall deem necessary in
order to apply for and obtain such rights and in order to assign and convey to
the Company, its successors, assigns and nominees the sole and exclusive rights,
title and interest in and to such Inventions, and any copyrights, patents, mask
work rights or other intellectual property rights relating thereto. The
Consultant further agrees that the Consultant's obligation to execute or cause
to be executed, when it is in the Consultant's power to do so, any such
instrument or papers shall continue after the termination of this Agreement.
(c) The Consultant agrees that if, in the course of performing
the Services, the Consultant incorporates into any Invention developed hereunder
any invention, improvement, development, concept, discovery or other proprietary
information owned by the Consultant or in which the Consultant has an interest,
the Company is hereby granted and shall have a nonexclusive, royalty-free,
perpetual, irrevocable, worldwide license to make, have made, modify, use and
sell such item as part of or in connection with such Invention.
(d) The Consultant agrees that if the Company is unable
because of the Consultant's unavailability, dissolution, mental or physical
incapacity, or for any other reason, to secure the Consultant's signature to
apply for or to pursue any application for any United States or foreign patents
or mask work or copyright registrations covering the Inventions assigned to the
Company above, then the Consultant hereby irrevocably designates and appoints
the Company and its duly authorized officers and agents as the Consultant's
agent and attorney in fact, to act for and in the Consultant's behalf and stead
to execute and file any such applications and to do all other lawfully permitted
acts to further the prosecution and issuance of patents, copyright and mask work
registrations thereon with the same legal force and effect as if executed by the
Consultant.
5. Certain Federal Securities Law Matters. Consultant acknowledges that
he is aware that the federal securities laws prohibit any person who has
received from an issuer material, non-public information concerning the issuer
from purchasing or selling securities of such issuer or from communicating such
information to any other person under circumstances in which it is reasonably
foreseeable that such person is likely to purchase or sell such securities.
Consultant acknowledges receipt of and agrees to abide by the Company's xxxxxxx
xxxxxxx policy.
6. Reports. The Consultant agrees that it will from time to time during
the term of this Agreement or any extension thereof keep the Company advised as
to the Consultant's progress in performing the Services hereunder and that the
Consultant will, as requested by the Company, prepare written reports with
respect thereto. It is understood that the time required in the preparation of
such written reports shall be considered time devoted to the performance of the
Consultant's Services.
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7. Acceptance of Deliverables
Within fourteen days after receipt of the Services, Company shall evaluate
whether the Services are acceptable or not. If requested during such evaluation,
Consultant, at its expense, shall provide Company with explanatory information
with respect to the Services.
(a) If Company rejects the Services, Company shall provide
written notice to Consultant.
(b) If Company rejects the Services, Company shall provide, in
writing, any reason for such rejection and Consultant shall make proper repair
and adjustment therefore within three(3) weeks of Company's rejection. When
Company confirms that the repaired and adjusted Services meet Company's standard
of specification, or Consultant does not receive any written reply from Company
within fourteen (14) days of providing the repaired and adjusted Services,
Services shall be deemed completed and the final payment shall be made by
Company.
8. Conflicting Obligations.
(a) The Consultant certifies that the Consultant has no
outstanding agreement or obligation that is in conflict with any of the
provisions of this Agreement, or that would preclude the Consultant from
complying with the provisions hereof, and further certifies that the Consultant
will not enter into any such conflicting Agreement during the term of this
Agreement.
(b) In view of the Consultant's access to the Company's trade
secrets and proprietary know-how, the Consultant further agrees that the
Consultant will not, without Company's prior written consent, design identical
or substantially similar designs as those developed under this Agreement for any
third party during the term of this Agreement and for a period of twelve (12)
months after the termination of this Agreement.
9. Term and Termination.
(a) This Agreement will commence on the date first written
above and will continue until the earlier of (i) final completion of the
Services or (ii) earlier termination as provided below.
(b) The Company may terminate this Agreement upon completion
of Services. The Company may terminate this Agreement immediately and without
prior notice if the Consultant refuses to or is unable to perform the Services
or is in breach of any material provision of this Agreement.
(c) Upon such termination all rights and duties of the parties
toward each other shall cease except:
(i) that the Company shall be obliged to pay, within
thirty (30) days of the effective date of termination, all amounts owing to the
Consultant for unpaid Services and related expenses, if any, in accordance with
the provisions of Section 1 hereof; and
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(ii) Sections 2, 3 and 8 hereof shall survive
termination of this Agreement.
10. Assignment. Neither party will sell, transfer, or assign any right
or obligation under this Agreement without the prior written consent of the
other party, except that Consultant may assign all of its rights and obligations
hereunder to a Subsidiary or in the event of a Change of Control. A Change of
Control in a party occurs when a person or other entity acquires ownership or
control of, directly or indirectly, more than 50% of the outstanding shares or
securities (representing the right to vote for the election of directors or
other managing authority) of the party. Any attempted act in derogation of the
foregoing will be null and void. This Agreement will be binding upon, and inure
to the benefit of, successors in interest to and permitted assigns of the
parties.
11. Independent Contractor. Nothing in this Agreement shall in any way
be construed to constitute the Consultant as an agent, employee or
representative of the Company, but the Consultant shall perform the Services
hereunder as an independent contractor. The Consultant acknowledges and agrees
that the Consultant is obligated to report as income all compensation received
by the Consultant pursuant to this Agreement, and the Consultant agrees to and
acknowledges the obligation to pay all self-employment and other taxes thereon.
The Consultant further agrees to indemnify the Company and hold it harmless to
the extent of any obligation imposed on the Company (i) to pay in withholding
taxes or similar items or (ii) resulting from the Consultant's being determined
not to be an independent contractor.
12. Benefits. The Consultant acknowledges and agrees, and it is the
intent of the parties hereto, that the Consultant receive no benefits from the
Company, either as an independent contractor or employee. If the Consultant is
at any time reclassified by a state or federal agency or court as an employee of
the Company for tax or other purposes, the Consultant will become a non-benefit
employee and will receive no benefits from the Company, except those mandated by
state or federal law, even if by the terms of the benefit plans or programs of
the Company in effect at the time of such reclassification the Consultant would
otherwise be eligible for such benefits.
13. Indemnification by Consultant for Infringement Claims. Consultant
shall (i) defend and/or, at its option, settle any initiated or threatened
litigation, suit, arbitration or other proceeding by a third party (each, a
"Proceeding") against Company, and any licensee, sublicensee, assignee, or
transferee of Company (the "Indemnitees"), based on a claim that the
HSInventions infringe any IP rights of a third party, and (ii) pay any direct
damages finally awarded in such Proceeding, including any amount agreed to by
Consultant in a settlement. If HSInventions are, or in the opinion of Consultant
may become, the subject of any such Proceeding, Consultant may, and in the event
of an adjudication that any HSInventions infringe third party IP rights or an
injunction is issued against Company's or any Indemnitee's use of the
HSInventions embodied therein, Consultant shall, at its expense, do one of the
following things: (1) procure for Company and its Licensees the right to use
such HSInventions as authorized in this Agreement; (2) replace the HSInventions
containing the infringing IP with deliverables containing non-infringing
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technology of equivalent functionality; or (3) if none of the foregoing remedies
are commercially feasible, upon the destruction by Company and its Licensees of
such HSInventions, which Company and its Licensees shall do promptly upon
written request by Consultant, refund to Company a reasonable amount. Consultant
shall have no obligations under this Section 12 to the extent that such
infringement results from modifications to the Invention by someone other than
Consultant or someone authorized by Consultant, if such infringement would have
been avoided by the absence of such modifications.
14. Arbitration and Equitable Relief.
(a) Except as provided in Subsection 10(d) below, the Company
and the Consultant agree that any dispute or controversy arising out of,
relating to or in connection with the interpretation, validity, construction,
performance, breach or termination of this Agreement shall be settled by binding
arbitration to be held in Santa Xxxxx County, California, in accordance with the
Commercial Arbitration Rules, supplemented by the Supplemental Procedures for
Large Complex Disputes, of the American Arbitration Association as then in
effect (the "Rules"). The decision of the arbitrator shall be final, conclusive
and binding on the parties to the arbitration. Judgment may be entered on the
arbitrator's decision in any court of competent jurisdiction.
(b) The arbitrator(s) shall apply California law to the merits
of any dispute or claim, without reference to conflicts of law rules.
(c) The Company and the Consultant shall each pay one-half of
the costs and expenses of such arbitration, and each shall separately pay its
counsel fees and expenses.
(d) The Consultant agrees that it would be impossible or
inadequate to measure and calculate the Company's damages from any breach of the
covenants set forth in Sections 2 or 3 hereof. Accordingly, the Consultant
agrees that if the Consultant breaches Sections 2 or 3 hereof, the Company will
have available, in addition to any other right or remedy available, the right to
obtain from any court of competent jurisdiction an injunction restraining such
breach or threatened breach and specific performance of any such provision. The
Consultant further agrees that no bond or other security shall be required in
obtaining such equitable relief and the Consultant hereby consents to the
issuance of such injunction and to the ordering of such specific performance.
(e) THE CONSULTANT HAS READ AND UNDERSTANDS SECTION 11 HEREOF,
WHICH DISCUSSES ARBITRATION. THE CONSULTANT UNDERSTANDS THAT BY SIGNING THIS
AGREEMENT, THE CONSULTANT AGREES TO SUBMIT ANY CLAIMS ARISING OUT OF, RELATING
TO, OR IN CONNECTION WITH THIS AGREEMENT, OR THE INTERPRETATION, VALIDITY,
CONSTRUCTION, PERFORMANCE, BREACH OR TERMINATION THEREOF, EXCEPT AS PROVIDED IN
SUBSECTION 10(d) HEREOF, TO BINDING ARBITRATION, AND THAT THIS ARBITRATION
CLAUSE CONSTITUTES A WAIVER OF THE CONSULTANT'S RIGHT TO A JURY TRIAL AND
RELATES TO THE RESOLUTION OF ALL DISPUTES RELATING TO ALL ASPECTS OF THE
RELATIONSHIP BETWEEN THE PARTIES.
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15. Miscellaneous
(a) Governing Law. This Agreement shall be governed by the
internal substantive laws, but not the choice of law rules, of the State of
California.
(b) Reimbursement of Expenses. In addition to the Compensation
described in Attachment B, Consultant shall be reimbursed by Company for all
reasonable out-of-pocket travel-related expenses incurred by Consultant in
connection with the performance of his services under this Agreement. Expenses
in excess of $1,000 must be approved in advance by the Chief Executive Officer
of the Company.
(c) Entire Agreement. This Agreement and any attachments
hereto constitute the entire agreement of the parties and supersedes any prior
agreements (excluding non-disclosure agreements) between them, whether written
or oral, with respect to the subject matter hereof.
(d) Modifications. No modifications or amendments to this
Agreement shall be valid unless in writing and signed by and on behalf of both
Parties.
(e) Severability. If any provision of this Agreement, or the
application of such provision to any person or circumstance, shall be held
invalid, the remainder of this Agreement shall not be affected thereby and shall
continue in full force and effect.
(f) Force Majeure. Neither Party to this Agreement shall be
liable for its failure to perform any of its obligations hereunder during any
period in which such performance is delayed by fire, flood, war, embargo, riot
or the intervention of any government authority, provided that the party
suffering the delay notifies the other party of the delay, acts diligently to
remedy the cause of such delay, and promptly resumes its performance upon the
cessation of the cause for the delay. Notwithstanding the foregoing, a party's
performance shall not be excused for delays caused by any subcontractor or agent
of that party, except to the extent that such subcontractor's or agent's
performance of its obligations to that party would be excused if this Section
15.6 were to apply to such obligation.
(g) Relationship of Parties. The Parties are independent
contractors and are not, and shall not represent themselves as, principal and
agent, or joint venturers. The Parties may represent themselves as partners.
Neither party shall attempt to act, or represent itself as having the power, to
bind the other or create any obligation on behalf of the other.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
HELLOSOFT, INC. NEW VISUAL
By: Xxxx Xxxxxxx By: Xxxx Xxxxx
Signature:/s/ Xxxx Xxxxxxx Signature: /s/ Xxxx Xxxxx
----------------------------------- --------------------------------
Title: VP of Biz Dev Title: CEO/President
Address: 0000 Xxxxxxx Xxxxx #000 Address: 0000 Xxxxxx Xxxx, Xxxxx 000
Xxxxxxx: Xxx Xxxx, XX 00000. Address: Xxx Xxxxx, XX 00000
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EXHIBIT A
SERVICES
1. Contact.
The Company's principal Contractor Engineering contact: Hem Hingarh
The Company's principle Business contact: Xxxx Xxxxxxx
2. Description
Items will be added to this section as needed. No additions or
modifications to this section shall be valid unless both Parties have
agreed in writing.
EXHIBIT B
COMPENSATION FOR SERVICES
Company will be required to reimburse Consultants within 30 days for
any pre-authorized expenses relating to travel requested or authorized
by Company, provided that such expenses shall conform to Company's
travel expense policy.
Payments will be added to this section as required. No additions or
modifications to this section shall be valid unless both Parties have
agreed in writing. Payments in consideration of Services rendered will
be paid 50% in cash at mutually agreed upon milestones, and 50% in
restricted stock on initiation of the required Service. The number of
shares issued to Consultant will be derived from a 25% discount of the
price per share of the Company's publicly traded stock at the close of
the first day of the beginning of the Service.
