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EXHIBIT 10.14
CONSULTING AGREEMENT
This Consulting Agreement (the "Agreement") is made this ____ day of
August, 1999, by and between Neoforma GAR, Inc., a Delaware corporation (the
"COMPANY"), and Xxxx Xxxxx of Highland Park, Illinois (the "CONSULTANT").
RECITALS
The Company is a wholly-owned subsidiary of Neoforma, Inc.
("NEOFORMA"), a Delaware corporation, and has acquired all of the issued and
outstanding securities (the "SECURITIES PURCHASE") of General Asset Recovery,
LLC, ("GAR") pursuant to the terms of a certain Securities Purchase Agreement
dated July 16th, 1999, which provided for the Consultant's acting as a
consultant to the Company.
The Company wishes to hire the Consultant as an independent contractor
to perform the services set forth herein, for the period of time, and upon the
terms and subject to the conditions, which are more particularly set forth
below; and
The Consultant desires to perform such services, for such period of
time and upon such terms and subject to such conditions;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
hereinafter set forth, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. Consulting Period. The Consultant is hereby retained by the Company
to perform, and the Consultant hereby agrees to perform, the services provided
for herein, as an independent contractor, for a period commencing on the date
hereof and ending on the two (2) year anniversary of the date hereof unless
terminated earlier as provided for herein (the "CONSULTING PERIOD").
2. Services and Duties. The Consultant agrees that during the
Consulting Period, he will provide certain services to the Company, consisting
of support and assistance in connection with the operation of the business
previously operated by General Asset Recovery, LLC, as well as such other tasks
and responsibilities which may be delegated to the Consultant by or under the
authority of the President of the Company and/or the Chief Executive Officer of
Neoforma, from time to time (the "CONSULTING SERVICES"). The Consultant shall
report directly to the President of the Company and to the Chief Executive
Officer of Neoforma or to any officer of Neoforma designated by the Board of
Directors of Neoforma.
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The Consultant agrees that he will conduct himself in a professional
and ethical manner at all times during the term of this Agreement and will take
no action that might cause injury to the business or goodwill of the Company.
The Consultant shall not perform consulting or other services for any
entity or person which is directly competitive with Neoforma or the Company
during the Consulting Period without the prior written consent of the Board of
Directors of Neoforma, which shall not be unreasonably withheld. However,
Consultant shall be permitted to perform consulting services for and be employed
by other non-competing businesses. It is the intention of the parties that
Consultant shall not be required to devote his full time and efforts to his
duties under this Consulting Agreement.
3. Compensation/Reimbursement for Expenses. All compensation paid or
payable hereunder shall be deemed to be paid or payable by the Company unless
this Agreement specifically states otherwise.
(a) Consulting Fees. In consideration for the Consulting Services
and subject to the due performance thereof, the Company shall pay to the
Consultant during the Consulting Period a fee of One Hundred Fifty Thousand
Dollars ($150,000) per year (the "CONSULTING FEE") which Consulting Fee shall be
payable during the term of this Agreement in equal semi-monthly installments in
accordance with the Company's customary practices. The Consulting Fee shall be
pro-rated for any partial year during which the Consultant provides Consulting
Services.
(b) Reimbursement for Expenses. At the end of each month during the
Consulting Period, the Company shall reimburse the Consultant for reasonable
items of miscellaneous and travel expenses incurred in furtherance of the
business of the Company, but payment shall be made only against a signed
itemized list of such expenditures.
(c) Automobile Allowance. The Consultant shall be entitled each
month to an automobile allowance in an amount equal to his actual automobile
related expenses, up to the amount of One Thousand Four Hundred Dollars ($1,400)
which shall be used for automobile related expenses incurred by the Consultant
in the performance of his duties hereunder.
4. Key Person Life Insurance. The Company shall have the right but not
the obligation to maintain and pay for a key person life insurance policy on the
life of the Consultant throughout the duration of this Agreement, as to which
the Company shall be the sole beneficiary and owner. The Consultant agrees upon
the execution of this Agreement to
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cooperate fully with the Company and to provide the Company with all necessary
documents in order for the Company to obtain such policy.
5. Status as Independent Consultant. It is the intent and purpose of
this Agreement to create a legal relationship of independent contractor, and not
employment, as between the Company and the Consultant. The Consultant will not
be treated as an employee of the Company for purposes of the Federal Insurance
Contributions Act, the Social Security Act, the Federal Unemployment Tax Act,
income tax withholding at source, or workmen's compensation laws, and will not
be eligible for any employee benefits whatsoever, other than those set forth
herein. The Consultant shall be responsible for the payment of self-employment
and federal income taxes due on all payments hereunder. In the event that any
governmental or administrative agency, whether federal, state or local, shall
subsequently determine that for their purposes, the relationship is one of
employment as between said parties, then in such event Consultant shall bear any
and all loss, costs and expenses of the Company in connection with or arising
out of such determination, whether in the nature of past or future FICA
contributions, Social Security taxes, unemployment taxes or income taxes. The
Consultant shall indemnify the Company and hold it harmless from any liability
to any former Company or to any other party in connection with or arising out of
any such governmental or administrative determination, or otherwise as a
consequence of Consultant's status as an independent contractor rather than an
employee of the Company.
6. Termination.
(a) This Agreement may be terminated upon any of the following:
(i) the Consultant's death;
(ii) the action by the Board of Directors of Neoforma
following the Consultant's "disability". For this purpose, "disability" means a
physical or mental illness or other incapacity which renders the Consultant
unable to perform substantially all of his duties for a period of two (2)
months. For purposes of this Agreement, disability shall be deemed a
continuation of any prior disability if the disability is related to the prior
disability and commences within eight (8) months of the termination of the prior
disability. Disability, and any relation to any prior disability, shall be
determined by a physician acceptable to the Company; or
(iii) the action of the Board of Directors or Chief Executive
Officer of Neoforma or the President of the Company for Cause. "Cause" is
defined as the occurrence of any of the following events: (A) fraud,
misappropriation, embezzlement or intentional misconduct on the part of the
Consultant, (B) the Consultant's willful failure to substantially
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perform his duties for the Company when, and to the extent, requested by the
Board of Directors, or its lawfully designated representative, to do so and
failure to correct same within five (5) business days after notice from the
Board of Directors or its lawfully designated representative requesting the
Consultant to do so, which has a materially adverse effect upon the Company, or
(C) the Consultant's willful breach of any material provision of this Agreement
and such breach continues for a period of five (5) business days after notice
from the Board of Directors or its lawfully designated representative of such
breach. Termination by the Company for cause will be effective immediately upon
receipt by the Consultant of notice of such termination.
(b) Termination of Benefits. In the event of any termination
pursuant to this Section during the term of this Agreement, in addition to the
termination of the various benefits and compensation payable to the Consultant
hereunder generally, the benefits provided for pursuant to Section 3 of this
Agreement shall, to the extent not yet accrued, automatically cease and
terminate.
(c) Survival. Notwithstanding anything else in this Agreement, the
provisions of Section 7 (Confidentiality), Section 8 (Non-Competition and
Non-Solicitation), Section 9 (Developments), and Section 20 (Equitable Remedies)
shall survive the termination of this Agreement, if by the Company, for "cause"
or by the Consultant. In the event this Agreement is terminated by the Company
without cause, or due to the bankruptcy or insolvency of the Company, or due to
any material breach of this Agreement by the Company, the only provision of this
Agreement which shall survive shall be Section 7 (Confidentiality) to the extent
that it deals with Confidential Information of the Company which existed prior
to the date of this Agreement.
7. Confidentiality. During the Consulting Period and thereafter, the
Consultant hereby covenants and agrees that he shall not other than for the
benefit of the Company publish, disclose to any third party or in any way use
for his own benefit any confidential information ("Confidential Information"),
including without limitation, any balance sheet or income statement information
(including but not limited to the value, amount or condition of capital assets
and/or inventory, sales figures, profitability, etc.), or any other financial
data, banking information, credit information, trade secrets, financial
statements or related data, customer lists or information pertaining to
customers or any unique distribution, manufacturing, marketing and research
methods of the Company or its parent or affiliates (or formerly of General Asset
Recovery, LLC), and any other Confidential Information concerning the Company's
or its parent or affiliate's, business, structure or affairs, (or the business,
structure or affairs formerly of General Asset Recovery, LLC). All Confidential
Information and copies thereof are the sole property of the Company and
Consultant shall deliver promptly to the Company at the termination of his
Consulting Period or at any time as
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Neoforma's Board of Directors may request, without retaining copies, any
Confidential Information made, compiled, delivered, made available or otherwise
obtained by Consultant. Consultant shall also use his best efforts and exercise
utmost diligence to protect and safeguard the Confidential Information of the
Company's customers, contractors and others with whom the Company has a business
relationship, whether learned or acquired by Consultant during the course of his
Consulting Period.
The nondisclosure obligations of this Section 7 shall not apply to: (a)
information that may be disclosed generally or is in the public domain through
no fault of the Consultant; (b) information received from a third party outside
the Company that was disclosed without a breach of any confidentiality
obligation; (c) information approved for release by written authorization of the
Company; or (d) information that may be required by law or an order of any
court, agency or proceeding to be disclosed. This Section 7 shall remain in
effect notwithstanding any termination of this Agreement.
8. Non-Competition and Non-Solicitation.
(a) During the time the Consultant is consulting for the Company,
Consultant shall devote his full time and efforts to the business of the Company
and shall not participate, directly or indirectly, in any capacity, in any
business or activity that is in competition with the Company. For a period of
eighteen (18) months after the termination of the Consulting Period with the
Company for any reason: (i) Consultant shall not hire or attempt to hire any
employee of the Company, or assist in such hiring by anyone else, or encourage
any employee to terminate his or her employment with the Company; (ii)
Consultant shall not participate, directly or indirectly, in any capacity, in
any business or activity that is in competition with the Company in the medical
equipment re-sale industry, medical facility planning industry or in any other
business in which the Company is engaged, in any state in which the Company does
business; and (iii) Consultant shall not cause or assist to cause any of the
customers of the Company with whom Consultant communicated, dealt with or became
acquainted during his term of consulting for the Company to enter into
contractual arrangements with himself or any other person, firm, partnership,
corporation or other company in any business or activity that is in competition
with the Company.
(b) "Blue Pencil" Rule. The Consultant and the Company desire that
the provisions of this Section 8 be enforced to the fullest extent permissible
under the laws and public policies applied in each jurisdiction in which
enforcement is sought. If a court of competent jurisdiction, however, determines
that any restrictions imposed on the Consultant in this Section are unreasonable
or unenforceable because of duration, area of restriction, or otherwise, the
Consultant and the Company agree and intend that the court shall enforce this
Section 8 to whatever extent the court deems reasonable to effect the intent of
this Section 8.
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(c) Legitimate Purpose. The Consultant has read carefully all of
the terms and conditions of this Section 8 and agrees that the restraints set
forth herein (i) are reasonable and necessary to support the legitimate business
interests and goodwill of the Company, and (ii) will not preclude the Consultant
from earning a livelihood during the life of this Section 8.
9. Developments. All Confidential Information and all other
discoveries, inventions, processes, methods, and improvements conceived,
developed, or otherwise made by Consultant at any time, alone or with others,
and in any way relating to the Company's present or future business or products,
whether or not patentable or subject to copyright protection and whether or not
reduced to tangible form or reduced to practice, during the term of this
agreement and for six months thereafter ("Developments"), shall be the sole
property of the Company. Consultant agrees to and hereby does assign to the
Company all right, title, and interest throughout the world in and to all
Developments and agrees to promptly disclose such Developments to the Company
and take all such actions reasonably requested by the Company to establish and
confirm the Company's ownership of such Developments. Consultant agrees that all
such Developments shall constitute works made for hire under the copyright laws
of the United States and hereby assigns to the Company all copyrights, patents,
trademarks and other proprietary rights the Consultant may have in such
Developments.
10. Notices. All necessary notices, payments, demands and requests
shall be in writing and shall be deemed duly given three (3) days after being
mailed by certified mail, postage prepaid, return receipt requested, or when
actually received if sent by facsimile, overnight delivery or other means, and
addressed as follows:
Company: c/o Neoforma, Inc.
0000-0 Xxxxx Xxxxxxxxx
Xxxxx Xxxxx, Xxxxxxxxxx 00000
Attn: Wm. Xxxxxx Xxxxxx, Controller
Facsimile: (000) 000-0000
With a Copy to: Xxxx X. Xxxxxxxxxxx, Esq.
Pepe & Hazard, LLP
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Facsimile: (000) 000-0000
Consultant: Xxxx Xxxxx
000 Xxxxx Xxxxx
Xxxxxxxx Xxxx, Xxxxxxxx 00000
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With a Copy to: Marks, Marks and Xxxxxx Ltd.
000 Xxxxx Xx Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxx, Esq.
Facsimile No.: (000) 000-0000
Each addressee may change its address or facsimile number for notice by
giving notice of change of address or facsimile number in the manner set forth
above.
11. Assignment. This Agreement shall be freely assignable by the
Company to, and shall inure to the benefit of and be binding upon, any other
entity which shall succeed to the business presently being operated by the
Company, but, being a contract for personal services, neither this Agreement nor
any rights hereunder shall be assignable by the Consultant.
12. Further Execution. The parties agree to execute all documents
necessary to further effectuate the terms of this Agreement.
13. Litigation. In the event of any dispute respecting this agreement,
such dispute shall be resolved in a court of competent jurisdiction in the State
of Illinois, and the parties hereto consent to such venue and jurisdiction. Each
party shall bear the cost of its own fees and expenses.
14. Authority. Each party represents that its undersigned
representative or corporate officer has all requisite power and authority to
enter into this Agreement and to execute any and all instruments and documents
on its behalf necessary to and in performance of their respective obligations
hereunder.
15. Counterparts. This Agreement may be executed in separate
counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same instrument.
16. Waivers. No waiver, permit, consent or approval of any kind or
character on the part of any party of any breach or default under this
Agreement, nor any waiver on the part of any party of any provisions or
conditions of this Agreement, shall be valid unless made in writing and signed
by the party to be charged therewith, and shall be effective only to the extent
specifically set forth in such writing. No delay or omission to exercise any
right, power or remedy inuring to any party, upon any breach or default of any
party under this Agreement, shall impair any such right, power or remedy of such
party nor shall it be construed to be a waiver of any such breach or default, or
an acquiescence therein, or of any similar breach or
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default thereafter occurring; nor shall any waiver of any single breach or
default be deemed a waiver of any other breach or default theretofore or
thereafter occurring. All remedies either under this Agreement or by law or
otherwise afforded to any party, shall be cumulative and not alternative.
17. Severability. In case any provision of this Agreement shall be
invalid, illegal or unenforceable, such provision shall be reformed to the
extent necessary to permit enforcement thereof, and the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
18. Titles and Subtitles. The titles of the sections and subsections of
this Agreement are for convenience of reference only and are not to be
considered in construing this Agreement.
19. Equitable Remedies. Each party hereto hereby confirms that damages
at law may be an inadequate remedy for the breach or threatened breach of this
Agreement and agrees that, in the event of a breach or threatened breach by a
party of any provision hereof, the other party's rights and obligations
hereunder shall be enforceable by specific performance, injunction, or other
equitable remedy, in addition to and not in lieu of any rights to damages at law
or other rights provided by statute or otherwise for a breach or threatened
breach of any provision hereof. Accordingly, each party hereto hereby waives and
agrees not to assert any objection to such equitable relief based upon the
purported existence of an adequate remedy at law, notwithstanding that another
party may also assert claims for damages at law or other claims as an
alternative to, or in addition to, such equitable relief.
20. Miscellaneous. This Agreement is entered into and shall be
construed under the laws of the State of Illinois applicable to contracts made
and to be entirely performed within that state. This Agreement shall be amended,
modified or terminated only by an instrument in writing, signed by the party or
parties to be charged. This Agreement constitutes the full and entire
understanding and agreement between the parties with regard to the subject
matter hereof, and supersedes all previous oral or written agreements,
correspondence and understandings with regard to such subject matter.
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IN WITNESS WHEREOF the parties have executed or caused to be executed
this Agreement under seal as of the day and year first above written.
CONSULTANT: NEOFORMA GAR, INC.
__________________________________ By:________________________________
Xxxx Xxxxx
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