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EXHIBIT 10.4
[LETTERHEAD OF AUTHORISZOR]
This Consulting Agreement, dated as of July 21, 2000 (the "Agreement"), by and
between Authoriszor Inc., a Delaware corporation ("Authoriszor"), and EFR, LLC
("EFR") a limited liability company.
1- CONTRACT START DATE
July 21, 2000.
2- CONTRACT EXPIRATION DATE
January 20, 2001, unless terminated in accordance with provisions stated in
this Contract.
3- SPECIFIC DUTIES
EFR agrees to provide the best efforts of Edward F. Rogers ("Consultant") to
provide advice and counsel on a broad range of subjects as requested by
Authoriszor's President & CEO ("President") to whom the Consultant will
report.
During the term of this Agreement, the EFR and Authoriszor hereby agree that
the Consultant will have no authority to bind Authoriszor or its
subsidiaries with regard to any obligation or liability or waive or promise
of any right or claim of Authoriszor or its subsidiaries in any manner
whatsoever; and the Consultant shall not perform any executive duties or
responsibilities, including any decision-making responsibilities with
respect to the business of Authoriszor.
4- WORK DAYS
EFR and Authoriszor agree that the Consultant will spend a minimum of 10
days per month performing consulting services to Authoriszor. The Consultant
and the President will meet at the beginning of each month to determine the
activity and the days required by the Consultant for that month. If they
both agree that more than 10 days are required to complete the assigned
tasks,
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Edward F. Rogers
July 21, 2000
Page 2
Authoriszor will agree to pay for additional days at the agreed upon rate
per day of $3,000 ($2,000 in cash, $1,000 in restricted stock). The
President will confirm the monthly days scheduled, if it is more than 10
days, in writing the same day the meeting is held. If during any month, days
beyond the agreed to days are required for any reason, Authoriszor and EFR
must agree to the additional days in writing.
5- INVOICING
EFR will invoice Authoriszor on the first business day of each month for
Consultant's services provided in the prior month.
6- PAYMENT
Authoriszor agrees to pay EFR no later than the 10th day of the month the
invoice is dated.
7- CASH COMPENSATION
Authoriszor agrees to pay EFR two thousand dollars ($2,000.00) per day for
each day of consulting services provided by Consultant, as agreed to by
Authoriszor and EFR.
8- RESTRICTED SHARES
Authoriszor agrees to deliver to EFR in January 2001 the earned shares
certificate of Authoriszor's common stock with the restriction that these
shares must not be sold, traded or exchanged, for a period of twelve (12)
months after the Expiration Date of this contract. In the event that
Authoriszor has a change in ownership of more than 50% in a single
transaction or series of transactions, the share restrictions will be lifted
and these shares will have the same rights as all the common shares. The
grant of the restricted shares is contingent upon the execution by EFR of an
investment letter in the form attached hereto as Exhibit A.
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Edward F. Rogers
July 21, 2000
Page 3
METHOD OF DETERMINING NUMBER OF RESTRICTED SHARES
The method agreed to by Authoriszor and EFR for the number of restricted
shares is to establish a value of $1,000 per day times the number of days of
consulting services provided in each month in order to determine the total
dollar value per week/month. The per share price for each restricted share
issued shall be calculated weekly for the days worked in that week and will
be the last reported sales price of the Authoriszor's common stock on the
NASDAQ National Market System at the close of business on the last business
day of the week in the week the Consultant's services were performed.
CALCULATION
The number of Restricted Shares can be calculated by multiplying the number
of consulting service days in the week by $1,000 to determine the total
restricted value in that week.
The total restricted value divided by last reported sales price at the close
of business on the last day of the week the services were performed will
equal the number of restricted shares for that week.
Each week, the last business day of which falls in a particular month, can
then be totaled to arrive at the monthly aggregation and also the total
contract amount.
The total aggregate of the Restricted Shares will be delivered to EFR in
January 2001.
9- STOCK OPTIONS
In addition to the Cash Compensation and Restricted Stock, Authoriszor will
grant to EFR an option to purchase 100,002 shares of common stock of
Authoriszor. The options will vest on a monthly pro rated basis (i.e. 16,667
per month) as long as this Agreement is
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Edward F. Rogers
July 21, 2000
Page 4
in effect. The options will be exercisable over a three-year period
commencing on the six-month anniversary of the expiration date of this
agreement. In the event Authoriszor has a change in ownership of more than
50% in a single transaction or a series of transactions, the option share
restrictions will be lifted and the shares will vest and be immediately
exercisable. The grant of this option is contingent upon execution by the
Consultant of an investment letter in the form attached hereto as Exhibit B.
OPTION SHARE PRICE
The exercise price for the options issued to EFR shall be $7.75 per share,
the NASDAQ National Market System stock price at the close of business on
the business day immediately preceding the Start Date of this contract.
10- EXPENSES
Authoriszor will reimburse EFR for all of the Consultant's reasonable
business related expenses incurred in the performance of this agreement.
Authoriszor agrees to pay directly for all of the Consultant's living
accommodations and provide a $50.00 per day meal allowance when Consultant
is working in the Burlington, Massachusetts office. In addition, Authoriszor
will also pay all reasonable related business expenses incurred by
Consultant in the performance of services for Authoriszor outside of
Burlington, MA.
11- DATA AND INFORMATION
EFR agrees that all data, information and work that the Consultant receives,
obtains or compiles during this Agreement shall be the sole property of
Authoriszor. The Consultant agrees that all works or authorship that are
made by the Consultant within the scope of this engagement by Authoriszor
shall be considered "works made for hire" under applicable copyright law, to
the extent possible. The Consultant furthermore agrees to hold confidential
all such data and information, during and after the termination of the
Agreement. The Consultant
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Edward F. Rogers
July 21, 2000
Page 5
agrees to comply with Authoriszor's Insider Trading Policy during the term
of this Agreement.
12- CONTRACT TERMINATION
Either party may terminate this contract with two weeks written notice.
13- ENTIRE AGREEMENT
This Agreement represents the entire agreement between the parties with
respect to the subject matter herein. Any variations, modifications or
changes shall only be in a writing executed by both parties. This document
supercedes any and all other verbal or written communications pertaining to
Authoriszor and EFR.
14- RELATIONSHIP OF PARTIES
In performing the Consulting Services under this Agreement, Consultant shall
be an independent contractor and, as between Authoriszor and EFR,
Authoriszor shall not be responsible for withholding, collection or payment
of income taxes or other taxes of any nature on behalf of Consultant or any
agent of Consultant. Nothing contained in this Agreement shall make
Consultant the agent, employee, joint venturer or partner of Authoriszor or
provide the Consultant with the power or authority to bind Authoriszor to
any contract, agreement or arrangement with any individual or entity except
with the prior written approval of the President.
15- NON-ASSIGNABILITY
This Agreement with EFR is exclusively for the services of Edward F. Rogers
as a consultant for EFR, and therefore none of the rights or obligations of
this Agreement may be assigned or otherwise transferred to anyone else.
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Edward F. Rogers
July 21, 2000
Page 6
16- MISCELLANEOUS
16.1 NOTICES. Any notice to be given hereunder is to be given in
writing by either party to the other and delivered or sent by courier,
prepaid airmail post or facsimile transmission addressed to the address of
the addressees set forth with each party's name below and shall be deemed to
be served in the case of courier immediately upon delivery, and in the case
of airmail post three days after posting and in the case of facsimile
immediately upon confirmed successful transmission.
16.2 SEVERABILITY. Whenever possible, each provision of this Agreement
will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this agreement is held to be
invalid, illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability will not effect any other provision or any
other jurisdiction, but this agreement will be reformed, construed, and
enforced in such jurisdiction as if such invalid, illegal or unenforceable
provision had never been contained herein.
16.3 GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the Commonwealth of Massachusetts.
16.4 BINDING AGREEMENT. This agreement shall inure to the benefit of
and be binding upon the parties and their respective successors and assigns.
Whenever a reference to any party is made herein, such reference shall be
deemed to include a reference to the heirs, executors, legal
representatives, successors and assigns of such party.
16.5 AMENDMENTS. This Agreement may not be modified, altered, or
amended, waived, unless in writing signed by the parties.
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Edward F. Rogers
July 21, 2000
Page 7
16.6 NON-SOLICITATION. EFR agrees that prior to the expiration of this
Agreement and for a period of one (1) year after the expiration of this
Agreement for whatever reason, not to solicit, hire, influence, or attempt
to influence any employee of the Authoriszor to terminate their employment
or other contractual relationship with Authoriszor for any reason. In
addition, EFR agrees that during the same time period Consultant will not
directly or indirectly attempt to solicit or conduct business, that is
directly competitive with Authoriszor's product business, with any person or
entity that is a client, customer or active prospect of Authoriszor.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and
date of this Agreement.
Authoriszor Inc. EFR, LLC
One Van de Graaff Drive 65 Colony Road
Suite 502 Westport, CT 06880
Burlington, MA 01803-5188
------------------------- -------------------------
Richard A. Langevin Edward F. Rogers
President & CEO President, CEO & Member
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Date Date
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Exhibit A
INVESTMENT LETTER
Authoriszor Inc.
One Van de Graaff Drive
Suite 502
Burlington, Massachusetts 01803
Mr. Langevin:
In connection with the issuance of up to ___________ shares (the "Shares")
of the common stock, par value $.01 per share, of Authoriszor Inc., (the
"Company"), to the undersigned pursuant to that certain Consulting Agreement,
dated as of _______, 2000, by and between the Company and EFR LLC ("EFR") and
the sole member of EFR, Edward F. Rogers ("Rogers," together with EFR, the
"Consultant"), the Consultant hereby makes the following acknowledgments and
representations:
1. The Consultant is financially able to bear the economic risks of acquiring
an interest in the Company and has no need for liquidity in this investment.
2. The Consultant has such knowledge and experience in financial and business
matters in general and with respect to businesses of a nature similar to the
Company so as to be capable of evaluating the merits and risks of, and making an
informed business decision with regard to, the acquisition of the Shares.
3. The Consultant is acquiring the Shares solely for its own account and not
with a view to or for resale in connection with any distribution or public
offering thereof, within the meaning of any applicable securities laws and
regulations, unless such distribution or offering is registered under the
Securities Act of 1933, as amended (the "Securities Act"), or an exemption from
such registration is available.
4. The Consultant (i) has received all the information it has deemed necessary
to make an informed investment decision with respect to an acquisition of the
Shares; (ii) understands that the Company is subject to the reporting
requirements of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and has had the opportunity to review all publicly available filings made
by the Company with the Securities and Exchange Commission (the "SEC") pursuant
to either the Securities Act or the Exchange Act; (iii) has had the unrestricted
opportunity to make such investigation as it has desired pertaining to the
Company and the acquisition of an interest therein and to verify the information
which is, and has been, available to it; and (iv) has had the opportunity to ask
questions of representatives of the Company concerning the Company.
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5. The Consultant has received no public solicitation or advertisement with
respect to the Shares.
6. The Consultant realizes that the Shares are "restricted securities" as that
term is defined in SEC Rule 144, and the resale of these Shares is restricted by
federal and state securities laws. Therefore, the Consultant understands that
any resale of the Shares by it must be registered by the Company under the
Securities Act (and any applicable state securities law) or be effected in
circumstances that, in the opinion of counsel for the Company at the time,
create an exemption or otherwise do not require registration under the
Securities Act (or applicable state securities laws).
7. The Consultant acknowledges and consents that certificates now or hereafter
issued for the Shares may bear a legend substantially as follows:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 (THE "SECURITIES ACT"), AND ARE
"RESTRICTED SECURITIES" AS THAT TERM IS DEFINED IN RULE 144 UNDER THE
SECURITIES ACT. THE SHARES MAY NOT BE OFFERED FOR SALE, SOLD OR
OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE ACT OR PURSUANT TO AN EXEMPTION FROM REGISTRATION
UNDER THE SECURITIES ACT, THE AVAILABILITY OF WHICH IS TO BE
ESTABLISHED TO THE SATISFACTION OF THE COMPANY.
8. The Consultant understands that the Shares are being transferred to it
pursuant to the exemption from registration under the Securities Act and that
the Company is relying upon the representations made herein as the basis for
your claiming the exemption.
9. In the event the Shares or any portion thereof are subsequently
transferred, the Consultant agrees to execute, deliver and file all such papers,
documents and instruments as may be required by the SEC and any state securities
commission to qualify the transfer for an exemption from registration under the
Securities Act, or any applicable state securities laws, respectively, to the
extent that such papers, documents and instruments may be necessary or
appropriate for such transfer. The Consultant agrees to furnish the Company
with a copy of all such papers, documents and instruments, and, in addition,
will furnish the Company with any other information that the Company may
reasonably require to ensure that no subsequent transfer or disposition of the
Shares is in violation of the Securities Act or any applicable state securities
laws.
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10. The Consultant further acknowledges that it is aware that stop-transfer
instructions shall be given to the transfer agent of the Shares to prevent any
unauthorized or illegal transfer of the Shares.
11. For purposes hereof, the term resale includes any transfer for value
including the mortgage, pledge, or hypothecation of such Shares.
12. This investment letter shall be binding upon the Consultant's successors
and assigns and shall inure to the benefit of your successors and assigns.
Sincerely,
EFR LLC
By:
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Edward F. Rogers, its Sole Member
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Exhibit B
INVESTMENT LETTER
Authoriszor Inc.
One Van de Graaff Drive
Suite 502
Burlington, Massachusetts 01803
Mr. Langevin:
In connection with the grant of an option "Option") to purchase up to
___________ shares (the "Shares") of the common stock, par value $.01 per share,
of Authoriszor Inc., (the "Company"), to the undersigned pursuant to that
certain Consulting Agreement, dated as of _______, 2000, by and between the
Company and EFR LLC ("EFR") and the sole member of EFR, Edward F. Rogers
("Rogers," together with EFR, the "Consultant"), the Consultant hereby makes the
following acknowledgments and representations:
1. The Consultant is financially able to bear the economic risks of acquiring
an interest in the Company and has no need for liquidity in this investment.
2. The Consultant has such knowledge and experience in financial and business
matters in general and with respect to businesses of a nature similar to the
Company so as to be capable of evaluating the merits and risks of, and making an
informed business decision with regard to, the acquisition of the Shares.
3. The Consultant is acquiring the Shares solely for its own account and not
with a view to or for resale in connection with any distribution or public
offering thereof, within the meaning of any applicable securities laws and
regulations, unless such distribution or offering is registered under the
Securities Act of 1933, as amended (the "Securities Act"), or an exemption from
such registration is available.
4. The Consultant (i) has received all the information it has deemed necessary
to make an informed investment decision with respect to an acquisition of the
Shares; (ii) understands that the Company is subject to the reporting
requirements of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and has had the opportunity to review all publicly available filings made
by the Company with the Securities and Exchange Commission (the "SEC") pursuant
to either the Securities Act or the Exchange Act; (iii) has had the unrestricted
opportunity to make such investigation as it has desired pertaining to the
Company and the acquisition of an interest therein and to verify the information
which is, and has been, available to it; and (iv) has had the opportunity to ask
questions of representatives of the Company concerning the Company.
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5. The Consultant has received no public solicitation or advertisement with
respect to the Shares.
6. The Consultant realizes that the Shares are "restricted securities" as that
term is defined in SEC Rule 144, and the resale of these Shares is restricted by
federal and state securities laws. Therefore, the Consultant understands that
any resale of the Shares by it must be registered by the Company under the
Securities Act (and any applicable state securities law) or be effected in
circumstances that, in the opinion of counsel for the Company at the time,
create an exemption or otherwise do not require registration under the
Securities Act (or applicable state securities laws).
7. The Consultant acknowledges and consents that certificates now or hereafter
issued for the Shares may bear a legend substantially as follows:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 (THE "SECURITIES ACT"), AND ARE
"RESTRICTED SECURITIES" AS THAT TERM IS DEFINED IN RULE 144 UNDER THE
SECURITIES ACT. THE SHARES MAY NOT BE OFFERED FOR SALE, SOLD OR
OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE ACT OR PURSUANT TO AN EXEMPTION FROM REGISTRATION
UNDER THE SECURITIES ACT, THE AVAILABILITY OF WHICH IS TO BE
ESTABLISHED TO THE SATISFACTION OF THE COMPANY.
8. The Consultant understands that the Shares are being transferred to it
pursuant to the exemption from registration under the Securities Act and that
the Company is relying upon the representations made herein as the basis for
your claiming the exemption.
9. In the event the Shares or any portion thereof are subsequently
transferred, the Consultant agrees to execute, deliver and file all such papers,
documents and instruments as may be required by the SEC and any state securities
commission to qualify the transfer for an exemption from registration under the
Securities Act, or any applicable state securities laws, respectively, to the
extent that such papers, documents and instruments may be necessary or
appropriate for such transfer. The Consultant agrees to furnish the Company
with a copy of all such papers, documents and instruments, and, in addition,
will furnish the Company with any other information that the Company may
reasonably require to ensure that no subsequent transfer or disposition of the
Shares is in violation of the Securities Act or any applicable state securities
laws.
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10. The Consultant further acknowledges that it is aware that stop-transfer
instructions shall be given to the transfer agent of the Shares to prevent any
unauthorized or illegal transfer of the Shares.
11. For purposes hereof, the term resale includes any transfer for value
including the mortgage, pledge, or hypothecation of such Shares.
12. This investment letter shall be binding upon the Consultant's successors
and assigns and shall inure to the benefit of your successors and assigns.
Sincerely,
EFR LLC
By:
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Edward F. Rogers, its Sole Member
