EXHIBIT 10.42
CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT ("Agreement"), effective as of the date indicated at
the end of this Agreement, between ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Consultant"), and CYNET,
INC., a Texas Corporation (hereinafter referred to as "Company");
WHEREAS, Company desires to employ Consultant, and Consultant desires to be
employed by Company on the terms and conditions hereinafter set forth;
NOW, THEREFORE, the parties hereto, intending to be legally bound, hereby agree
as follows:
1. EMPLOYMENT. The Company agrees to employ Consultant to assist the Company
in the sales and marketing of enhanced communication services. Consultant shall
perform such other duties as the management of the Company may from time to time
assign to him hereunder in furtherance of the sales and marketing of its
enhanced communication services.
2. DUTIES AND RESPONSIBILITIES. Consultant shall meet regularly with the
Company's executive who oversees Cynet Interactive and such other executives of
the Company as may be designated by the Company's chairman or Board of
Directors, sell and promote the sales of the Company's enhanced communication
services, regularly submit status reports, expense reports, and such other
reports as may be requested by the Company's designated executive contact.
Consultant agrees to devote sufficient time and attention and his best efforts
to performing his duties hereunder. While employed by the Company, Consultant
will not, without the Company's prior written consent, consult with or engage in
any business activity that is in conflict with or in competition with the
Company.
3. COMPENSATION. The Company shall pay to Consultant as compensation for all
services rendered hereunder Two Hundred Fifty Thousand (250,000) shares of the
Company's Class A Common Stock upon the execution of this agreement, Two Hundred
Fifty Thousand (250,000) shares of the Company's Class A Common Stock and so
long as Consultant has satisfactorily perform his duties and responsibilities
under this agreement an additional, Two Hundred Fifty Thousand (250,000) shares
of the Company's Class A Common Stock 2001on January 31, 2002, April 30, 2002,
and July 31, 2002, which shares the Company agrees to register as soon as
practical after the execution of this Agreement by the parties. Further, the
Company agrees to pay Consultant a sales commission equal to 3% of all sales of
enhanced communication services for which Consultant is responsible. Unless
otherwise agreed, the Company shall not be obligated to issue additional shares
of stock to Consultant under this agreement or any renewal or extension of this
agreement.
4. REIMBURSABLE EXPENSES AND FRINGE BENEFITS. In addition to the compensation
provided under Section 3 above:
(a) Consultant shall be reimbursed for all pre-approved out-of-pocket
expenses incurred by him while conducting Company business in accordance with
the policies adopted by the Company from time to time for such purpose; and
(b) Consultant shall be entitled to participate in other benefit
programs, such as group insurance policies, and medical and health benefits
plans, maintained by the Company and offered to other Consultants of similar
position under the programs adopted by the Company from time to time for such
purpose. The Company reserves the right to modify or terminate any such program
or change the terms of eligibility at any time in its discretion to the fullest
extent permitted by applicable law.
5. TERM OF EMPLOYMENT. The term of Consultant's employment shall be subject to
and commence on the _____ day of November 2001 and continue until the
anniversary date of this agreement. This agreement shall automatically be
renewed for an additional one year term unless on or either party gives written
notice of its desire not to renew the agreement which written notice is
delivered to the other party at least one month prior to the end of the term of
the employment.
6. PROPRIETARY INFORMATION
(a) Consultant recognizes and acknowledges that, in the course of his
employment with the Company, Consultant will be exposed to confidential and
trade secret information of the Company and may be exposed to information
confidential to clients of the Company and/or third-party licensers of the
Company (all such the Company, the Company's client, and third-party licenser
information shall be collectively referred to as "Proprietary Information"). For
purposes of this Agreement, this Proprietary Information shall include, but not
be limited to, the following materials and information (whether reduced to
writing and whether patentable) to which Consultant receives or has received
access or develops or has developed in whole or in part as a direct or indirect
result of his or her employment with the Company.
(b) Application, operating system, communication and other computer
software, including, without limitation, source and object codes, flowcharts,
algorithms, coding sheets, routines, subroutines, compilers, assemblers, design
concepts and related documentation and manuals;
(c) Production processes, marketing techniques, purchasing information,
price lists, pricing policies, quoting procedures, financial information, client
leads, client requirements, client data (including information supplied by or
belonging to clients of the Company that such clients generally consider as
being confidential), information supplied by or belonging to third-party
licensers of the Company that such third-party licensers generally consider as
being confidential, and other materials or information relating to the manner in
which the Company does business;
(d) Discoveries, concepts and ideas, whether patentable or not
patentable, including without limitation, the nature and results of research and
development activities, processes, formulas, techniques, "know-how", designs,
drawings, and specifications;
(e) Any other materials or information related to the business or
activities of the Company, or any companies affiliated with the Company, that
are not generally known to others engaged in similar businesses or activities;
and
(f) All inventions and ideas that are derived from or relate to
Consultant's access to or knowledge of any of the above listed materials and
information.
(g) The Proprietary Information shall not include any materials or
information of the types specified above to the extent that such materials or
information are publicly known or, in the case of information that is not
supplied by or does not belong to clients of the Company, generally utilized by
others engaged in the same business or activities in the course of which the
Company utilized, developed or otherwise acquired such information or materials.
Failure to ▇▇▇▇ any of the Proprietary Information as confidential shall not
affect its status as part of the Proprietary Information under the terms of this
Agreement.
7. OWNERSHIP OF PROPRIETARY INFORMATION
(a) Consultant agrees that the Proprietary Information (excluding
Proprietary Information belonging to clients of the Company and third-party
licensers of the Company) is and shall at all times remain the sole and
exclusive property of the Company.
(b) All notes, data, reference materials, sketches, drawings, memoranda,
and records in any way relating to the Company Proprietary Information or the
Company's business shall belong exclusively to the Company and Consultant agrees
to turn over to the Company, at the request of the Company or in the absence of
such a request, upon the termination of Consultant's employment with the
Company, all copies of such materials in his or her possession or under his or
her control.
(c) Consultant will promptly disclose to the Company all improvements,
inventions, designs, ideas, works of authorship, discoveries, trademarks,
copyrights, trade secrets, formulas, processes, techniques, "know-how", and data
(whether patentable or not patentable) made or conceived or reduced to practice
or learned by Consultant, either alone or jointly with others, during his or her
employment (during or outside of normal working hours) which are related to or
useful in the Company's actual or anticipated business, or which results from
tasks assigned to him or her by the Company or which results from use of the
premises or equipment owned, leased, or contracted for by the Company. All such
improvements, inventions, designs, ideas, works of authorship, discoveries,
trademarks, copyrights, trade secrets, formulas, processes, techniques,
"know-how", and data shall be called "Covered Inventions" in this Agreement. All
Covered Inventions relevant to the subject matter of his or her employment by
the Company which have been made or conceived or first reduced to practice by
him or her prior to his or her engagement by the Company shall be included
within the definition of "Covered Inventions" for the purposes of this
Agreement, except as otherwise set forth in the section titled "Consultant's
Prior Covered Inventions" on page 3 of this Agreement.
(d) Consultant hereby assigns to the Company all rights he or she has in
all Covered Inventions or which he or she may acquire in any Covered Inventions.
He or She agrees that all Covered Inventions shall be the sole property of the
Company and its assigns, and that the Company and its assigns shall be the sole
owner of all patents, copyrights, and other rights in connection therewith. He
or She will assist the Company in every lawful way (at The Company's expense) to
obtain and to enforce patents, copyrights, or other rights on the Covered
Inventions in all countries. As requested by the Company, he or she will execute
documents for use in applying for and obtaining and enforcing such patents,
copyrights, or other rights, together with assignments thereof, to The Company
or to persons designated by the Company. His or Her obligation to assist the
Company in obtaining and
2
enforcing patents and copyrights for the Covered Inventions in all countries
shall continue beyond the termination of his or her employment, but the Company
shall compensate him or her at a reasonable rate after his or her termination
for time actually spent by him or her at the Company's request on such
assistance.
(e) Consultant acknowledges that all original works of authorship which
are made by him or her (solely or jointly with others) within the scope of his
or her employment and which are protected by copyright are "works made for
hire," as that term is defined in the United States Copyright Act, 17 USCA,
Section 101.
8. OWNERSHIP OF WORK PRODUCT.
(a) The Company shall own all Work Product (as defined below). To the
extent permitted by law, All Work Product shall be considered work made for hire
by Consultant and owned by the Company.
(b) If any of the Work Product may not, by operation of law, be
considered work made for hire by Consultant for the Company (or if ownership of
all right, title and interest of the intellectual property rights therein shall
not otherwise vest exclusively in the Company), Consultant agrees to assign, and
upon creation thereof automatically assigns, without further consideration, the
ownership of all Trade Secrets (as defined below), U.S. and international
copyrights, patentable inventions, and other intellectual property rights
therein to the Company, its successors and assigns.
(c) The Company, it successors and assigns, shall have the right to
obtain and hold in its or their own name copyrights, registrations, and any
other protection available in the foregoing.
(d) Consultant agrees to perform upon the reasonable request of the
Company, during or after Consultant's employment, such further acts as may be
necessary or desirable to transfer, perfect and defend the Company's ownership
of the Work Product. When requested, Consultant will
(i) Execute, acknowledge and deliver any requested affidavits and
documents of assignment and conveyance;
(ii) Obtain and aid in the enforcement of copyrights (and, if applicable,
patents) with respect to the Work Product in any countries;
(iii) Provide testimony in connection with any proceeding affecting the
right, title or interest of the Company in any Work Product; and
(iv) Perform any other acts deemed necessary or desirable to carry out the
purposes of this Agreement.
The Company shall reimburse all reasonable out-of-pocket expenses incurred by
Consultant at the Company's request in connection with the foregoing, including
(unless Consultant is otherwise being compensated at the time) a reasonable per
diem or hourly fee for services rendered following termination of Consultant's
employment.
(e) For purposes hereof, "Work Product" shall mean all intellectual
property rights, including all Trade Secrets, U.S. and international copyrights,
patentable inventions, discoveries and improvements, and other intellectual
property rights, in any programming, documentation, technology or other work
product that relates to the business and interests of the Company and that
Consultant conceives, develops, or delivers to the Company at any time during
the term of Consultant's employment. "Work Product" shall also include all
intellectual property rights in any programming, documentation, technology or
other work product that is now contained in any of the products or systems
(including development and support systems) of the Company to the extent
Consultant conceived, developed or delivered such Work Product to the Company
prior to the date of this Agreement while Consultant was engaged as an
independent contractor or Consultant of the Company. Consultant hereby
irrevocably relinquishes for the benefit of the Company and its assigns any
moral rights in the Work Product recognized by applicable law.
9. CONFIDENTIALITY. Consultant shall maintain in strict confidence and shall
not use or disclose (except as required to perform Consultant's duties under
this Agreement) all Trade Secrets of Company, its affiliates and customers. This
obligation shall apply during and after the term of this Agreement for so long
as the pertinent information remains a Trade Secret, and shall apply whether or
not the Trade Secret is in written or tangible form. As provided by [specify
jurisdiction] statutes, "Trade Secret" shall mean any information (including,
but not limited to, technical or non-technical data, a formula, a pattern, a
compilation, a program, a device, a method, a technique, a drawing, a process,
financial data, financial plans, product plans, or a list of actual or potential
customers) that: (i) derives economic value, actual or potential, from not being
generally known to, and not being readily ascertainable by proper means by,
other persons who can obtain economic value from its disclosure or use;
3
and (ii) is the subject of efforts that are reasonable under the circumstances
to maintain its secrecy. In the case of Company's business, Company's Trade
Secrets include (without limitation) information regarding names and addresses
of any customers, sales personnel, account invoices, training and educational
manuals, administrative manuals, prospective customer leads, in whatever form,
whether or not computer or electronically accessible "on-line."
10. RETURN OF MATERIALS. Upon the request of the Company and, in any event,
upon the termination of Consultant's employment,
(a) Consultant shall take such steps as Company may reasonably request
in order to transfer, disclose, and give Company the full benefit of any Work
Product remaining in Consultant's possession; and
(b) Consultant shall deliver to Company all memoranda, notes, records,
drawings, daily or monthly appointment calendars, manuals, disks and other
documents and media, regardless of form, that contain Work Product or Trade
Secrets or otherwise relate to the Company's business. Consultant shall not
retain any such materials (whether in original or duplicated form) following
such delivery.
11. NO SOLICITATION OF CUSTOMERS.
(a) For a period of one (1) year following termination of Consultant's
employment, Consultant shall not, either directly or indirectly, alone or in
concert with others, solicit or attempt to solicit Customers to acquire or
obtain any product or service competitive with any Current Product of the
Company from anyone other than Company.
(b) For purposes of this Section, a "Customer" refers to any person or
group of persons with whom Consultant had direct material contact while selling
Current Products of the Company during the six (6) months preceding termination
of Consultant's employment; "Current Products" refers to the products and
services that Consultant or any personnel under his or her supervision were
authorized to market or sell on behalf of Company during the six (6) months
preceding termination of Consultant's employment.
12. NO RECRUITMENT OF PERSONNEL. For a period of one (1) year following
termination of Consultant's employment, Consultant shall not, either directly or
indirectly, alone or in concert with others, induce or attempt to induce any
Consultant, agent, independent contractor or other personnel of Company to
terminate his, her or their relationship with Company, or recruit or attempt to
recruit such persons to accept employment or a contract with another business
that would have the effect of terminating his, her or its relationship with the
Company.
13. NAMES AND MARKS. Following the termination of Consultant's employment,
Consultant shall not, for the benefit of his or her own or any other person or
entity's business, use or display the names, marks, logos or slogans of the
Company or its affiliates, or any name, ▇▇▇▇, logo or slogan confusingly similar
thereto, without the prior written consent of the Company.
14. ENFORCEMENT. In the event of any breach or threatened breach by Consultant
of any covenant contained in this Sections 6 through 13, the resulting injuries
to the Company would be difficult or impossible to estimate accurately, even
though irreparable injury or damages would certainly result. Accordingly, an
award of legal damages, if without other relief, would be inadequate to protect
the Company. Consultant therefore agrees that, in the event of any such breach,
the Company shall be entitled to apply to a court of competent jurisdiction to
obtain an injunction to restrain the breach or anticipated breach of any such
covenant, and to obtain any other available legal, equitable, statutory, or
contractual relief. Should the Company have cause to seek such relief, no bond
shall be required, and Consultant shall pay all attorney's fees and court costs
which the Company may incur.
15. MISCELLANEOUS.
(a) This Agreement shall inure to the benefit of, and be binding upon,
the Company and its subsidiaries and affiliates, together with their successors
and assigns, and Consultant, together with his or her executors, administrators,
personal representatives, heirs and legatees.
(b) Any notice or request hereunder shall be in writing and shall be
given by hand delivery, mail, telecopy or similar transmission addressed as set
forth beside the name of each party at the end of this Agreement or to any such
other address as either party may specify to the other by written notice. Such
notice or request shall be deemed to have been given and received only on and
after receipt by the designated individual (specifically the President, in the
case of the Company), effective as of the date of such authorized recipient's
actual receipt of such notice or request if received during normal business
hours on a normal business day or as of the first business day after receipt if
given after normal business hours or on a day other than a normal business day.
4
(c) THIS AGREEMENT SHALL BE GOVERNED BY AND ENFORCED UNDER THE LAWS OF
THE STATE OF TEXAS AS THEY APPLY TO A CONTRACT EXECUTED, DELIVERED AND PERFORMED
ENTIRELY IN SUCH STATE.
(d) This Agreement merges and supersedes all prior and contemporaneous
agreements, undertakings, covenants or conditions, whether oral or written,
express or implied, to the extent they contradict or conflict with the
provisions hereof.
(e) This Agreement may be executed in two or more counterparts, each of
which shall be deemed to be an original but all of which together shall
constitute one and the same instrument.
(f) This Agreement may be modified only by a written instrument signed
by each of the parties hereto. No waiver shall be effective unless made in
writing and signed by the party against whom enforcement is sought.
(g) Should any aspect or provision of this Agreement prove invalid or
unenforceable for any reason, the remainder of the Agreement shall nonetheless
be fully enforced to the fullest extent permitted by law, regardless of whether
the invalid or unenforceable aspect or provision is facially severable from the
remainder of the Agreement.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement on
the day and year first above written.
COMPANY CONSULTANT
CYNET, Inc.
Signed: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇. Signed: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
------------------------------------ -----------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇. Name: ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
------------------------------------ -----------------------
Title: CHAIRMAN AND CHIEF EXECUTIVE OFFICER Date: NOVEMBER _____, 2001
------------------------------------ -----------------------
Date: NOVEMBER ____, 2001 Address:
------------------------------------ -----------------------
5
