SAGENT TECHNOLOGY, INC.
CONSULTING AGREEMENT
This Consulting Agreement ('Agreement') is made and entered into as of
the seventh day of April, 1997 by and between Sagent Technology, Inc. (the
'Company'), and Ralph Kimball Associates, Inc. ('Consultant'). The Company
desires to retain Consultant as an independent contractor to perform consulting
services for the Company and 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. SERVICES AND COMPENSATION
(a) Consultant agrees to perform for the Company the services
('Services') described in Exhibit A, attached hereto.
(b) The Company agrees to pay Consultant the compensation set
forth in Exhibit A for the performance of the Services.
2. 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, 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 will designate all Confidential Information at the
time of disclosure to Consultant in writing. Any information disclosed to
Consultant without being designated as Confidential in writing at the time of
disclosure will be treated as public information.
(b) 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. It is understood that
said Confidential Information shall remain the sole property of the Company.
Consultant further agrees to take all reasonable precautions to prevent any
unauthorized disclosure of such Confidential Information. Confidential
Information does not include information which (i) is known to Consultant at the
time of disclosure to Consultant by the Company as evidenced by written records
of Consultant, (ii) has become publicly known and made generally available
through no wrongful act of Consultant, or (iii) has been rightfully received by
Consultant from a third party who is authorized to make such disclosure.
(c) Consultant agrees that Consultant will not, during the term
of this Agreement, improperly use or disclose any proprietary information or
trade secrets of any former
or current employer or other person or entity with which Consultant has an
agreement or duty to keep in confidence information acquired by Consultant if
any, and that Consultant will not bring onto the premises of the Company any
unpublished document or proprietary information belonging to such employer,
person or entity unless consented to in writing by such employer, person or
entity. Consultant will indemnify the Company and hold it harmless from and
against all claims, liabilities, damages and expenses, including reasonable
attorney's fees and costs of suit, arising out of or in connection with any
violation or claimed violation of a third party's rights resulting in whole or
in part from the Company's use of the work product of Consultant under this
Agreement.
(d) 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. Consultant agrees that 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 Company's
earlier request, Consultant will deliver to the Company all of the Company's
property or Confidential Information that Consultant may have in Consultant's
possession or control.
3. OWNERSHIP
(a) Consultant agrees that all copyrightable material, notes,
records, drawings, designs, inventions, improvements, developments, discoveries
and trade secrets conceived, made or discovered by Consultant, solely or in
collaboration with others, during this Agreement which result from performing
the Services hereunder (collectively 'Inventions') are the sole property of the
Company. Consultant further agrees to assign (or cause to be assigned) and does
hereby assign fully to the Company all Inventions and any copyrights, patents,
mask work rights or other intellectual property rights relating thereto.
(b) Consultant agrees to assist 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 right,
title and interest in and to such Inventions, and any copyrights, patents, mask
work rights or other intellectual property rights relating thereto. Consultant
further agrees that Consultant's obligation to execute or cause to be executed,
when it is in Consultant's power to do so, any such instrument or papers shall
continue after the termination of this Agreement.
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(c) Consultant agrees that if in the course of performing the
Services, Consultant incorporates into any Invention developed hereunder any
invention, improvement, development, concept, discovery or other proprietary
information owned by Consultant or in which 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) Consultant agrees that if the Company is unable because of
Consultant's unavailability, dissolution, mental or physical incapacity, or for
any other reason, to secure 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
Consultant hereby irrevocably designates and appoints the Company and its duly
authorized officers and agents as Consultant's agent and attorney in fact, to
act for and in 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 Consultant.
4. CONFLICTING OBLIGATIONS
(a) Consultant certifies that Consultant has no outstanding
agreement or obligation that is in conflict with any of the provisions of this
Agreement, or that would preclude Consultant from complying with the provisions
hereof, and further certifies that Consultant will not enter into any such
conflicting Agreement during the term of this Agreement. Company agrees that the
activities of Ralph Kimball Associates as defined in Exhibit A, Category 1 of
this Agreement, including its relationships with Red Brick Systems, if..., and
Wiley Computer Books do not constitute Conflicting Obligations.
(b) In view of Consultant's access to the Company's trade secrets
and proprietary know-how, Consultant further agrees that 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.
5. 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) termination as provided below.
(b) The Company may terminate this Agreement upon giving two
weeks prior written notice thereof to Consultant. Any such notice shall be
addressed to Consultant at the address shown below or such other address as
either party may notify the other of and shall be deemed given upon delivery if
personally delivered, or forty-eight (48) hours after deposited in the United
States mail, postage prepaid, registered or certified mail, return receipt
requested. The Company may terminate this Agreement immediately and without
prior notice if Consultant refuses to or is unable to perform the Services or is
in breach of any material provision of this
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Agreement. Company agrees that in the event of termination of this Agreement by
Company, Company's right to use Consultant's name and likeness as defined in
Exhibit A shall terminate immediately.
(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
Consultant for Services completed and accepted by the Company prior to the
termination date and related expenses, if any, in accordance with the provisions
of Section 1 (Services and Compensation) hereof;
(ii) Sections 2 (Confidentiality), 3 (Ownership) and 7
(Independent Contractors) shall survive termination of this Agreement; and
(iii) The option to purchase 0.75% of the Company's
outstanding equity, on a fully diluted basis, set forth in Exhibit A,
'Options--Option 1 Terms,' shall not terminate if this Agreement is terminated
for any reason other than for Cause. As used herein, 'Cause' is defined as (i)
willful failure by the Consultant to substantially perform his duties hereunder
other than a failure resulting from the Consultant's complete or partial
incapacity due to physical or mental illness or impairment, or (ii) an act by
the Consultant which constitutes gross misconduct and which is injurious to the
Company, or (iii) a breach by the Consultant of a material provision of this
Agreement, or (iv) a material violation of a federal or state law or regulation
materially applicable to the business of the Company. No act, or failure to act,
by the Consultant shall be considered 'willful' unless committed without good
faith and without a reasonable belief that the act or omission was in the
Company's best interest.
6. ASSIGNMENT
Neither this Agreement nor any right hereunder or interest herein
may be assigned or transferred by Consultant without the express written consent
of the Company. Company may not assign any of its rights or obligations under
this Agreement without the prior written consent of Consultant except in
connection with the sale of all or substantially all of Company's business,
whether by means of a merger, sale of stock, a sale of assets, or otherwise.
7. INDEPENDENT CONTRACTOR
The parties to this Agreement are independent contractors.
Nothing in this Agreement shall in any way be construed to constitute Consultant
as an agent, employee or representative of the Company, but Consultant shall
perform the Services hereunder as an independent contractor. Consultant agrees
to furnish (or reimburse the Company for) all tools and materials necessary to
accomplish this contract, and shall incur all expenses associated with
performance, except as expressly provided on Exhibit A of this Agreement.
Consultant acknowledges and agrees that Consultant is obligated to report as
income all compensation received by Consultant pursuant to this Agreement and
Consultant agrees to and acknowledges the obligation to pay all self-employment
and other taxes thereon. Consultant further agrees to
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indemnify and hold harmless the Company and its directors, officers, and
employees from and against all taxes, losses, damages, liabilities, costs and
expenses, including attorney's fees and other legal expenses, arising directly
or indirectly from (i) any negligent, reckless or intentionally wrongful act of
Consultant or Consultant's assistants, employees or agents, (ii) a determination
by a court or agency that the Consultant is not an independent contractor, or
(iii) any breach by the Consultant or Consultant's assistants, employee or
agents of any of the covenants contained in this Agreement.
8. BENEFITS
Consultant acknowledges and agrees and it is the intent of the
parties hereto that Consultant receive no Company-sponsored benefits from the
Company either as a Consultant or employee. Such benefits include, but are not
limited to, paid vacation, sick leave, medical insurance, and 401(k)
participation. If Consultant is reclassified by a state or federal agency or
court as an employee, Consultant will become a reclassified employee and will
receive no benefits except those mandated by state or federal law, even if by
the terms of the Company's benefit plans in effect at the time of such
reclassification Consultant would otherwise be eligible for such benefits.
9. ARBITRATION AND EQUITABLE RELIEF
(a) Except as provided in Section 9(d) below, the Company and
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 San Mateo 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 arbitrator may grant injunctions or other relief in such dispute
or controversy. 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. Consultant
hereby consents to the personal jurisdiction of the state and federal courts
located in California for any action or proceeding arising from or relating to
this Agreement or relating to any arbitration in which the parties are
participants.
(c) The Company and Consultant shall each pay one-half of the
costs and expenses of such arbitration, and each shall separately pay its
counsel fees and expenses unless otherwise required by law.
(d) The parties may apply to any court of competent jurisdiction
for a temporary restraining order, preliminary injunction, or other interim or
conservatory relief, as necessary, without breach of this arbitration agreement
and without abridgment of the powers of the arbitrator.
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(e) CONSULTANT HAS READ AND UNDERSTANDS SECTION 9, WHICH
DISCUSSES ARBITRATION. CONSULTANT UNDERSTANDS THAT BY SIGNING THIS AGREEMENT,
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, TO BINDING ARBITRATION, EXCEPT AS
PROVIDED IN SECTION 9(d), AND THAT THIS ARBITRATION CLAUSE CONSTITUTES A WAIVER
OF 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.
10. GOVERNING LAW
This Agreement shall be governed by the internal substantive
laws, but not the choice of law rules, of the State of California.
11. ENTIRE AGREEMENT
This Agreement is the entire agreement of the parties and
supersedes any prior agreements between them, whether written or oral, with
respect to the subject matter hereof. No waiver, alteration, or modification of
any of the provisions of this Agreement shall be binding unless in writing and
signed by duly authorized representatives of the parties hereto.
12. ATTORNEY'S FEES
In any court action at law or equity which is brought by one of
the parties to enforce or interpret the provisions of this Agreement, the
prevailing party will be entitled to reasonable attorney's fees, in addition to
any other relief to which that party may be entitled.
13. SEVERABILITY
The invalidity or unenforceability of any provision of this
Agreement, or any terms thereof, shall not affect the validity of this Agreement
as a whole, which shall at all times remain in full force and effect.
14. INDEMNIFICATION
Company will indemnify and hold Consultant harmless from and
against expenses, damages, claims, suits, actions, judgements and costs
(including but not limited to attorneys' fees) arising from or in any way
connected with any claim, action or suit that arises from Consultant's
endorsements of the Company products or the performance of his obligations under
this Agreement. Company's obligation to defend and indemnify Consultant with
respect to claims asserted by a third party is conditioned upon Consultant (1)
giving prompt written notice to Company of the claim, (2) allowing Company to
have sole and exclusive control of the defense of the claim and any settlement
negotiations including the exclusive authority to compromise any claim and make
all strategy decisions regarding all facets of the litigation or
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matter, and (3) at Company's reasonable request and expenses assisting Company
in such defense.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
CONSULTANT
Ralph Kimball [Associates, Inc.]
By: /s/ Ralph Kimball
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Title: President
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Address: 13150 Highway 9 Boulder Creek
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CA 95036
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COMPANY
SAGENT TECHNOLOGY, INC.
By: /s/ John Zicker, VP Technology
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Title: VP Technology
-----------------------------------------
Address: 225 East Bayshore Rd., Palo Alto,
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CA
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EXHIBIT A
SERVICES AND COMPENSATION
1. CONTACT. Consultant's principal Company contact:
Name: John Zicker
Title: Vice President of Technology
2. SERVICES
Consultant shall perform and the Company shall pay for the following
work:
Category I
a. Consultant shall commit an average of one business week during
each three month period commencing with the Effective Date of
the Agreement to performing the services described below in
subsection b;
b. Consultant shall deliver product specifications and design
reviews to the Company. The subject matter to these product
specifications and design reviews will be mutually agreed upon
by Consultant and Company prior to their preparation. Company
agrees to reasonably accept these product specifications and
design reviews as satisfactory, bearing in mind the constraint
of one week's work per quarter in the investigation and
preparation of these product specifications and design reviews.
Upon request by the Company, additional specification and design
work can be provided at Consultant's discretion at Consultant's
normal daily consulting fee; and
c. Name and Likeness. Consultant hereby grants to Company the
exclusive worldwide right and license within the Market, as
defined herein, during the term of this Agreement to use Ralph
Kimball's name, likeness, voice, signature, initials, photograph
and endorsement solely in connection with the advertising,
marketing and promotion in all forms of media of Company
products, subject to the terms and conditions of this Agreement,
Consultant agrees to not take any action inconsistent with the
endorsement of the Company products including but not limited to
(a) discouraging use of the Company products in any way and (b)
knowingly allowing Ralph Kimball's name, likeness, voice,
signature, initials, photograph or endorsement to be used in
connection with the advertising of other products in the Market.
For purposes of this Agreement, 'Market' shall mean the data
mart and data warehousing markets excluding Consultant's
existing relationships with Ralph Kimball Associates, Red Brick
Systems, Inc., if..., and Wiley Computer Books. It is understood
that the existing
activities of Ralph Kimball Associates excluded from the above
definition of Market involve Consultant performing all forms of
data warehouse designs, performing all forms of data warehouse
reviews, conducting public and private seminars on a wide range
of data mart and data warehouse topics, providing briefings for
consulting organizations and hardware companies, meeting with
the customers of consulting organization and hardware companies,
entering into confidential relationship with consulting
organizations and hardware companies, writing books and articles
on data mart and data warehouse topics for a variety of
publications, and that Ralph Kimball Associates and any of the
entities who are clients of Ralph Kimball Associates may use
Ralph Kimball's name and likeness in connection with the
delivery of the above described services by Ralph Kimball
Associates.
Company will consult with Consultant and obtain his approval
before introducing any models or lines of Company products to be
endorsed by Consultant. In addition, Company will submit to
Consultant a true and complete copy of all promotional or
advertising material using Consultant's endorsement at least ten
(10) days prior to the intended release of such material to the
general public for Consultants approval, which may be withheld
only on the grounds that direct quotations attributable to
Kimball are inaccurate or misleading. If within three (3)
business days after receipt of a copy of such material,
Consultant shall not have provided a written objection to such
material, Consultant will have been deemed to have accepted and
consented to such material. If Consultants provide such a
written objection within three (3) business days after receipt
of a copy thereof from Company the parties will discuss
Kimball's objections and work together in good faith to resolve
such objections as expeditiously as possible and, pending
conclusion of such discussions, Company will refrain from using
such material.
Consultant and company agree that this Agreement does not grant
Company the right to trademark Ralph Kimball's name or likeness
as part of the Company's product development, marketing, sales
or promotional activities.
During the term of this Agreement, Company will supply and
deliver to Consultant the Company's products free of charge in
such quantities as Consultant may reasonably request for his own
use and evaluation. Consultant will at all times during the term
of this Agreement have the right to test and evaluate any
Company products, and the Company will cooperate with Consultant
in all reasonable ways to allow for this reasonable testing and
evaluation of the Company products.
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Category 2
a. Subject to Consultant's previously scheduled activities,
Consultant shall be available for up to ten business days during
each three month period (the 'Minimum Quarterly Time
Commitment') commencing with the Effective Date of the Agreement
(each, a 'Quarter') to participate in marketing and sales events
as requested by the Company. Company's failure to request
Consultant to participate in marketing and sales events which
will consume Consultant's Minimum Quarterly Time Commitment
shall not constitute a breach by Consultant of its obligations
pursuant to this Agreement, Consultant's failure to meet the
Minimum Quarterly Time Commitment because of inability to
participate in one or more marketing and sales events requested
by the Company due to schedule conflicts also shall not
constitute a breach by Consultant of its obligations pursuant to
this Agreement, but any such days may be added by the Company to
increase Consultant's Minimum Quarterly Time Commitment in one
or more future Quarters. Similarly, in the event that the
Company asks Consultant to spend additional days beyond the
Minimum Quarterly Time Commitment to participate in marketing
and sales events, Consultant may apply the days in excess of the
Minimum Quarterly Time Commitment to offset any failure to have
met or to meet the Minimum Quarterly Time Commitment in a prior
or future Quarter.
3. COMPENSATION
Cash, Reimbursement and Other Compensation
a. The Company shall pay Consultant $2,500 for each day spent
providing the Services listed under Category 2. In areas where
travel is not required, Consultant will charge Company $1,250
for each half day, and in cases where full days of travel are
required or overnight flights are required, an additional full
day at $2,500 per day will be charged to the Company as
incurred.
b. The Company shall reimburse Consultant for reasonable
pre-approved travel, living and other expenses incurred by
Consultant in performing the Services hereunder.
c. Consultant shall submit all statements for Services and expenses
in a form prescribed by the Company and such statement shall be
approved by the contact person listed above.
d. In consideration of the services to be performed by Consultant,
for a period of 90 days from the signing of this Agreement,
Consultant shall be entitled to purchase from the Company (i) a
number of shares of preferred capital stock of the Company equal
to 0.25% of the Company's fully
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diluted outstanding shares immediately prior to such sale at a
purchase price of $2.50 per share pursuant to a stock purchase
agreement mutually agreeable to the parties. Additionally, in
consideration of the services to be performed by Consultant,
Consultant shall be entitled to purchase from the Company (ii) a
number of shares of preferred capital stock equal to 0.75% of
the Company's fully diluted outstanding shares immediately prior
to such sale at the same price per share as offered by the
Company in its next round of financing by participating in such
financing; provided that if the Company does not complete such
financing prior to December 31, 1997, Consultant shall have the
right to purchase such number of shares at a price per share of
$5.00; provided further that if the Company has begun
negotiations with respect to such financing prior to December
31, 1997, Consultant shall have the option to participate in
such financing subsequent to December 31, 1997, rather than to
purchase such shares at $5.00 per share.
Options
Upon execution of this agreement, the Company will issue to Consultant
two options to purchase shares of Common Stock of the Company, based on a
fully-diluted, outstanding capitalization of the Company as of April 7, 1997.
These options are separate from the rights to purchase Company's stock described
in section 3d.
Option 1 Terms:
o 0.75% of Company's fully diluted outstanding shares as of the
signing of this Agreement.
o 1/24th vests on each monthly anniversary of the date of this
agreement.
o Exercise price is $0.25 per share.
o Lock-up period is as defined in the Company's 1995 Stock Plan,
as amended, which is 180 days.
o The 1995 Stock Plan contains early exerciseability provisions,
including Company right of repurchase, which lapses according to
the vesting schedule.
Option 2 Terms:
o 0.25% of Company's fully diluted outstanding shares as of the
signing of this Agreement.
o The shares will vest at the rate of 1/8 for each Quarter over a
two year period provided that Consultant is not in breach of its
obligation to provide services as described in Category 2 of
'Services' above in such quarter.
o Exercise price is $0.25 per share.
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o Lock-up period is as defined in the Company's 1995 Stock Plan,
as amended, which is 180 days.
o The 1995 Stock Plan contains early exerciseability provisions,
including Company right of repurchase, which lapses according to
the vesting schedule.
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o Lock-up period is as defined in the Company's 1995 Stock Plan,
as amended, which is 180 days.
o The 1995 Stock Plan contains early excerciseability provisions,
including Company right of repurchase, which lapses according to
the vesting schedule.
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Consulting Agreement - Sagent Technology Inc. and Ralph Kimball Associates Inc.
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