<PAGE> 1
As filed with the Securities and Exchange Commission on May 7, 1999
Registration Statement No. 333-65093
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
POST-EFFECTIVE AMENDMENT NO. 1
TO
FORM SB-2
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
MIGRATEC, INC.
(Exact name of small business issuer as specified in its Charter)
Florida 7371 65-125664
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification No.) Identification No.)
12801 North Stemmons Freeway, Suite 710
Farmers Branch, TX 75234
(972)969-0300
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
W. Curtis Overstreet, President
MIGRATEC, INC.
12801 North Stemmons Freeway, Suite 710
Farmers Branch, TX 75234
(972)969-0300
(Name, address and telephone number of agent for service)
With copies to:
James M. Schneider, Esq.
ATLAS, PEARLMAN, TROP & BORKSON, P.A.
200 East Las Olas Boulevard, Suite 1900
Fort Lauderdale, FL 33301
Telephone No.: (954) 763-1200
Facsimile No.: (954) 766-7800
APPROXIMATE DATE OF PROPOSED SALE TO THE PUBLIC: As soon as practicable after
the effective date of this Registration Statement.
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box: [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering: [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration number of the earlier registration statement for the same
offering: [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box: [ ]
<PAGE> 2
<TABLE>
<CAPTION>
ITEM 27. EXHIBITS.
Exhibit
Number Page
- ------- ----
<S> <C>
3.1 Articles of Incorporation(2)
3.2 Articles of Amendment dated February 18, 1994(2)
3.3 Articles of Amendment dated March 12, 1996(2)
3.4 Articles of Amendment dated February 12, 1998(2)
3.5 By-Laws(2)
4.1 Form of Common Stock Certificate(2)
5.1 Opinion of Atlas, Pearlman, Trop & Borkson, P.A.(2)
10.1 Agreement for the Exchange of Common Stock between New York
Acquisitions Inc. and Migratec Inc. (formerly One Up Corporation)
dated February 29, 1996(2)
10.2 Commercial Lease Agreement between the Company and TDC Dallas
Partners No. 2 Ltd. dated April 7, 1997(2)
10.3 Employment Agreement between the Company and W. Curtis Overstreet
dated April 10, 1997(2)
10.4 Employment Agreement between the Company and Joseph B. Meredith dated
June 1, 1997(2)
10.5 Employment Agreement between the Company and Rick J. Johnson dated
July 1, 1997(2)
10.6 Employment Agreement between the Company and Mark C. Myers dated
April 1, 1998(2)
10.7 Settlement Agreement between the Company and Richard G. Dews dated
March 25, 1998(2)
10.8 Strategic Product Assessment Report prepared for the Company by
Deloitte & Touche Consulting Group dated April 6, 1998(2)
10.9 Agreement between the Company and Reasoning Inc. dated August 4,
1998(2)
10.10 Agreement between the Company and Electronic Data Systems Corporation
dated September 1, 1998(2)
23.1 Consent of King Griffin & Adamson P.C.(2)
23.2 Consent of Atlas, Pearlman, Trop & Borkson, P.A. [contained in such
firm's opinion filed as Exhibit 5.1](2)
24.1 Power of Attorney relating to the signing of amendments hereto is
incorporated in the signature pages of this Registration Statement
27.1 Financial Data Schedules(1)
</TABLE>
(1) Previously filed
(2) Filed herewith
<PAGE> 3
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Post-Effective Amendment No. 1 to Form SB-2
and authorized this Registration Statement to be signed on its behalf by the
undersigned, in the city of Dallas, State of Texas on May 7, 1999.
MIGRATEC, INC.
By: /s/ W. CURTIS OVERSTREET
-----------------------------------
W. Curtis Overstreet, President and
Principal Executive Officer
POWER OF ATTORNEY
Know all men by these presents, that each person whose signature appears below
constitutes and appoints W. Curtis Overstreet and Benjamin Swirsky or either of
them, such person's true and lawful attorney-in-fact and agent, with full power
of substitution and resubstitution, for such person and in such person's name,
place and stead, in any and all capacities (including such person's capacity as
a director and/or officer of MigraTEC, Inc.) to sign any and all amendments
(including post-effective amendments pursuant to Rule 462(b) or otherwise) to
this Registration Statement, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto each said attorney-in-fact and agent full power and
authority to do and perform each and every act and thing requisite and necessary
to be done in and about the premises, as fully to all intents and purposes as
he might or could do in person, hereby ratifying and confirming all that each
said attorney-in-fact and agent, or their or his substitute or substitutes, may
lawfully do or cause to be done by virtue thereof.
In accordance with the requirements of the Securities Act of 1933, this
Registration Statement was signed by the following persons in the capacities
and on the dates stated.
<TABLE>
<CAPTION>
Signature Title Date
- -------------------------------------------------------------------------------------------------
<S> <C> <C>
President, Principal Executive May 7, 1999
/s/ W. CURTIS OVERSTREET Officer and Director ---------------------
- -------------------------------
W. Curtis Overstreet
/s/ BENJAMIN SWIRSKY Chairman of the Board and May 7, 1999
- ------------------------------- Director ---------------------
Benjamin Swirsky
/s/ MARK C. MYERS Principal Financial Officer and May 7, 1999
- ------------------------------- Secretary ---------------------
Mark C. Myers
/s/ CYNTHIA K. ALDERMAN Principal Accounting Officer May 7, 1999
- ------------------------------- ---------------------
Cynthia K. Alderman
/s/ DEANE C. WATSON, JR. Director May 7, 1999
- ------------------------------- ---------------------
Deane C. Watson, Jr.
/s/ MARCUS R. ROWAN Vice Chairman of the Board May 7, 1999
- ------------------------------- and Director ---------------------
Marcus R. Rowan
/s/ RICHARD A. GRAY, JR. Director May 7, 1999
- ------------------------------- ---------------------
Richard A. Gray, Jr.
</TABLE>
<PAGE> 4
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION PAGE
- ------- ----------- ----
<S> <C>
3.1 Articles of Incorporation(2)
3.2 Articles of Amendment dated February 18, 1994(2)
3.3 Articles of Amendment dated March 12, 1996(2)
3.4 Articles of Amendment dated February 12, 1998(2)
3.5 By-Laws(2)
4.1 Form of Common Stock Certificate(2)
5.1 Opinion of Atlas, Pearlman, Trop & Borkson, P.A.(2)
10.1 Agreement for the Exchange of Common Stock between New York
Acquisitions Inc. and Migratec Inc. (formerly One Up Corporation)
dated February 29, 1996(2)
10.2 Commercial Lease Agreement between the Company and TDC Dallas
Partners No. 2 Ltd. dated April 7, 1997(2)
10.3 Employment Agreement between the Company and W. Curtis Overstreet
dated April 10, 1997(2)
10.4 Employment Agreement between the Company and Joseph B. Meredith dated
June 1, 1997(2)
10.5 Employment Agreement between the Company and Rick J. Johnson dated
July 1, 1997(2)
10.6 Employment Agreement between the Company and Mark C. Myers dated
April 1, 1998(2)
10.7 Settlement Agreement between the Company and Richard G. Dews dated
March 25, 1998(2)
10.8 Strategic Product Assessment Report prepared for the Company by
Deloitte & Touche Consulting Group dated April 6, 1998(2)
10.9 Agreement between the Company and Reasoning Inc. dated August 4,
1998(2)
10.10 Agreement between the Company and Electronic Data Systems Corporation
dated September 1, 1998(2)
23.1 Consent of King Griffin & Adamson P.C.(2)
23.2 Consent of Atlas, Pearlman, Trop & Borkson, P.A. [contained in such
firm's opinion filed as Exhibit 5.1](2)
24.1 Power of Attorney relating to the signing of amendments hereto is
incorporated in the signature pages of this Registration Statement
27.1 Financial Data Schedules(1)
</TABLE>
(1) Previously filed
(2) Filed herewith
<PAGE> 1
EXHIBIT 3.1
ARTICLES OF INCORPORATION
OF
NEW YORK SPORTS, INC.
ARTICLE I. NAME
The name of this corporation shall be:
NEW YORK SPORTS, INC.
ARTICLE II. PURPOSES
The general nature of the business to be transacted by this Corporation is:
(1) To engage in the business of producing a sports magazine.
(2) To engage in capital ventures and business enterprises of all kinds,
whether as a promoter, partner, member, or associate, broker or as a member
of such enterprises;
(3) To engage in any lawful act or activity for which corporations may be
organized under the General Corporation Law of the State of Florida.
ARTICLE III. POWERS
This corporation shall have the following powers:
(1) To do each and everything necessary, suitable or proper for the
accomplishment of any one or more of the foregoing purposes or the
attainment of any one or more of the foregoing objects or conducive to or
expedient for the interest or benefit of the corporation and to contract
accordingly, and, in addition, to exercise and possess all powers, rights
and privileges necessary or incidental to the purposes for which the
corporation is organized or to the activities in which it is engaged and any
other rights.
(2) To have and exercise in addition to the foregoing, all powers,
privileges and rights conferred on ordinary corporations by the laws of the
State and all powers and rights incidental or conducive to carrying out the
purposes for which this Corporation is formed, except such as are
inconsistent with the express provisions of the act under which this
Corporation is incorporated, and to do any such thing anywhere, and the
enumeration of the foregoing powers shall not be held to limit or restrict
in any manner the general powers which may be law or possessed by this
corporation, all of which are hereby expressly claimed.
-1-
<PAGE> 2
ARTICLE IV. CAPITAL STOCK
This Corporation is authorized to have Two Hundred One Million
(201,000,000) shares of capital stock. The capital stock shall be
designated and divided into "Redeemable Convertible 12% Preferred Stock"
with a par value of $1,000.00 per share (totalling One Million shares) and
"Common Shares" with no par value (totalling Two Hundred Million shares).
VOTING
The holders of Redeemable Convertible 12% Preferred Stock shall be entitled
to two (2) votes per Share. The holders of ordinary Common Shares shall be
entitled to one (1) vote per ordinary Common Share respecting all matters
on which holders of Common Shares shall be entitled to vote.
DIVIDEND RIGHTS
For any Quarter, after the Convertible Redeemable 12% dividend rate is paid
on the Preferred Shares, all shares of common stock shall be entitled to
share equally on a per share basis in such dividends as the BOARD OF
DIRECTORS may declare from sources legally available therefore.
LIQUIDATION RIGHTS
The Convertible Redeemable 12% Preferred Shares shall first receive
proceeds up to their par value. Upon any liquidation, partial return of
capital, or dissolution of the Corporation, whether voluntary or
involuntary. Thereafter, all shares of common stock shall be entitled to
share equally in the assets available for distribution to common
stockholders after payment of all prior legal obligations of the
Corporation.
PREFERENCED SHARES
As stated above, the Convertible Redeemable 12% Preferred Shares shall be
preferenced as to dividends, liquidation and return of capital. The
Corporation may, upon fifteen (15) days notice, redeem any or all of the
Convertible Redeemable 12% Preferred Shares outstanding, by paying the full
par value and any accrued 12% quarterly dividend legally due. The
Corporation may subsequently re-issue Preferred Shares from treasury, recall
and re-issue, as deemed appropriate by the BOARD OF DIRECTORS.
PREFERRED SHARES-CONVERSION PRIVILEGE
At any time after issuance of a Convertible Redeemable 12% Preferred Share,
the registered owners of the first 150 Convertible 12% Preferred Shares may
elect to convert to ordinary Common Stock by surrendering the certificate,
properly endorsed, and receiving 66,600 shares of ordinary Common Stock for
each share of Convertible Redeemable 12% Preferred Stock. The Board of
Directors based on the average bid price for any quarter, may issue
additional Convertible Redeemable 12% Preferred Shares that give effect to
the then market value of the Common Shares.
ARTICLE V. DENIAL OF PREEMPTIVE RIGHTS
No holder of any share of the Corporation shall, because of his ownership of
-2-
<PAGE> 3
shares, have a preemptive or other right, to purchase, subscribe for or
take any part of any shares or any part of the notes, debentures, bonds or
other securities convertible into or carrying options or warrants to
purchase shares of the Corporation issued, optioned or sold by the
Corporation, whether the shares be authorized by this Article of
Incorporation or be authorized by an amended article duly filed and in
effect at the time of the issuance or sale of such shares or of such notes,
debentures, bonds or other securities convertible into or carrying options
or warrants to purchase shares of the Corporation. Any part of the shares
authorized by this Article of Incorporation, or by an amended Article duly
filed, or any part of the notes, debentures, bonds or other securities
convertible into or carrying options or warrants to purchase shares of the
Corporation, may at any time be issued, optioned for sale and sold or
disposed of by the Corporation pursuant to resolution of its Board of
Directors to such persons and upon such terms and conditions as may, to
such Board, seem proper and advisable without first offering to existing
shareholders the said shares or the said notes, debentures, bonds or other
securities convertible into or carrying options or warrants to purchase
shares of the Corporation, or any part of any thereof.
ARTICLE VI. INITIAL CAPITAL
The amount of capital with which this Corporation will begin business is
not less than Three Hundred Dollars ($300.00).
ARTICLE VII. TERM OF EXISTENCE
This Corporation is to exist perpetually.
ARTICLE VIII. ADDRESS
The street address of the principal office of this company in this State is
401 W. Lantana Rd., Suite 6, Lantana, FL 33462.
ARTICLE IX. DIRECTORS
This Corporation shall have not less than one Director. The number of
Directors may be increased or decreased from time to time by the by-laws
adopted by the Board of Directors, but shall never be less than one.
ARTICLE X. CLASSIFICATION OF DIRECTORS
Pursuant to Section 607.114(4), Florida Statutes, the Directors can be
divided into not more than four classes, as nearly equal in number as
possible, whose terms of office shall respectively expire at different
times, with the proviso that no such term shall continue longer than four
years, and that at least one-fifth in number of the Directors shall be
elected annually.
-3-
<PAGE> 4
ARTICLE XI. AMENDMENTS
These Articles of Incorporation may be amended in the manner provided by
law. Every amendment shall be approved by the Board of Directors, proposed
by them to the stockholders, and approved by consent procedure at a
stockholders meeting by a majority of the stock entitled to vote thereof.
IN WITNESS WHEREOF, we have made and subscribed these articles of
incorporation this 24th day of January, 1989.
/s/ BEATRICE J. HANKS
--------------------------------
Beatrice J. Hanks, Incorporator
STATE OF NEW YORK
COUNTY OF NEW YORK
Before me personally appeared Beatrice J. Hanks to me well known and known
to me to be the individual described in and who executed the foregoing
Articles of Incorporation, and acknowledged to and before me that they
executed said Articles of Incorporation for the purpose therein expressed.
WITNESS my hand and official seal this 21st day Feb., 1989.
/s/ ILLEGIBLE
----------------------
Notary Public
State of New York
(SEAL)
My Commission Expires:
-4-
<PAGE> 5
STATE OF FLORIDA
DEPARTMENT OF STATE
Certificate Designating Place of Business or Domicile for the Service of
Process Within the State, Naming Agent Upon Whom Process may Be Served and
Names and Addresses of the Officers and Directors.
---------------------------------
The following is submitted, in compliance with Chapter 48.091, Florida
Statutes:
---------------------------------
A corporation organized (or organizing) under the laws of the State of
Florida with the principal office at 401 W. Lantana Road, Suite 6, Lantana,
Florida 33462 as its agent to accept service of process within this state.
Officers:
NAME TITLE SPECIFIC ADDRESS
Beatrice J. Hanks Incorporator 401 W. Lantana Road
Suite 6
Lantana, Florida 33462
BY: /s/ BEATRICE J. HANKS
----------------------------
Beatrice J. Hanks
ACCEPTANCE:
I agree as Resident Agent to accept Service of Process: to keep office open
during prescribed hours; to post my name (any other officer of said
corporation authorized to accept service of process at the above Florida
designated address) in some conspicuous place in office as required by law.
/s/ BEATRICE J. HANKS
Filing fee: -------------------------------
Beatrice J. Hanks
Resident Agent
-5-
<PAGE> 1
EXHIBIT 3.2
ARTICLES OF AMENDMENT
OF
NEW YORK SPORTS, INC.
1. The name of the corporation is
NEW YORK SPORTS, INC.
2. ARTICLE I of the Articles of Incorporation of the corporation is
hereby amended by deleting ARTICLE I in its entirety and substituting the
following therefor:
"ARTICLES I The name of the Corporation shall be:
NEW YORK ACQUISITIONS, INC.
3. By the unanimous consent of the Board of Directors and the consent
of a majority of the Shareholders of New York Sports, Inc., the Directors
and Shareholders adopted, at a Special Meeting of Shareholders and
Directors of the Corporation occurring on February 18, 1994, the foregoing
Amendment to the Articles of Incorporation. The number of votes cast by the
shareholders were sufficient for approval.
Dated: February 18, 1994
NEW YORK SPORTS, INC.
BY: /s/ BEATRICE J. HANKS
----------------------------------
BEATRICE J. HANKS, PRESIDENT
<PAGE> 2
[SEAL]
[FLORIDA DEPARTMENT OF STATE LETTERHEAD]
March 4, 1994
Lorry Baum
3511 West Commercial Boulevard
Suite 401
Ft. Lauderdale, FL 33309
Re: Document Number K68350
The Articles of Amendment to the Articles of Incorporation of NEW YORK
SPORTS, INC. which changed its name to NEW YORK ACQUISITIONS, INC., a
Florida corporation, were filed on March 3, 1994.
Should you have any questions regarding this matter, please telephone (904)
487-6050, the Amendment Filing Section.
Annette Hogan
Corporate Specialist
Division of Corporations Letter Number: 694A00009996
<PAGE> 1
EXHIBIT 3.3
AMENDMENT TO
ARTICLES OF INCORPORATION
OF
NEW YORK ACQUISITIONS, INC.
THE UNDERSIGNED, being the sole director of NEW YORK ACQUISITIONS,
INC., does hereby amend the Articles of Incorporation of NEW YORK
ACQUISITIONS, INC. as follows:
ARTICLE III
NAME
Effective upon the date of filing of this amendment, the name of the
corporation shall be ONE UP CORPORATION.
I hereby certify that the following was adopted by a majority
unanimous vote of the shareholders and directors of the corporation on
March 12, 1996, the number of votes cast was sufficient for approval.
IN WITNESS WHEREOF, I have hereunto subscribed to and executed this
Amendment to Articles of Incorporation this on March 12, 1996.
/s/ RICHARD DEWS
------------------------------
Richard Dews, President and Sole Director
Subscribed and Sworn on this 15th day of March, 1996,
Before me: FELITA SANTOS
[ILLEGIBLE]
----------------------------------
Notary Public
My Commission Expires: April 11, 1996
<PAGE> 1
EXHIBIT 3.4
ARTICLES OF AMENDMENT
TO
ARTICLES OF INCORPORATION
OF
ONE UP CORPORATION
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
(present name)
Pursuant to the provisions of section 607.1006, Florida Statutes, this Florida
profit corporation adopts the following articles of amendment to its articles
of incorporation:
FIRST: Amendment(s) adopted: (indicate article number(s) being amended, added
or deleted)
Article One is being amended to read as follows:
The name of the corporation is MigraTEC, Inc.
SECOND: If an amendment provides for an exchange, reclassification or
cancellation of issued shares, provisions for implementing the amendment if not
contained in the amendment itself, are as follows:
<PAGE> 2
THIRD: The date of each amendment's adoption: February 12, 1998
------------------
FOURTH: Adoption of Amendment(s) (CHECK ONE)
[ ] The amendment(s) was/were approved by the shareholders. The number
of votes cast for the amendment(s) was/were sufficient for
approval.
[ ] The amendment(s) was/were approved by the shareholders through
voting groups. The following statement must be separately provided
for each voting group entitled to vote separately on the
amendment(s):
"The number of votes cast for the amendment(s) was/were
sufficient for approval by ."
---------------------------
voting group
[X] The amendment(s) was/were adopted by the board of directors
without shareholder action and shareholder action was not required.
[ ] The amendment(s) was/were adopted by the incorporators without
shareholder action and shareholder action was not required.
Signed this 12th day of February, 1998.
Signature /s/ CURTIS OVERSTREET
-----------------------------------------------------------
(By the Chairman or Vice Chairman of the Board of Directors,
President or other officer if adopted by the shareholders)
OR
(By a director if adopted by the directors)
OR
(By an incorporator if adopted by the incorporators)
Curtis Overstreet
-------------------------------------------
Typed or printed name
President and Director
-------------------------------------------
Title
<PAGE> 3
[SEAL]
[FLORIDA DEPARTMENT OF STATE LETTERHEAD]
February 18, 1998
CYNTHIA K. ALDERMAN
12801 STEMMONS FREEWAY
SUITE 710
FARMERS BRANCH, TX 75234
Re: Document Number K68350
The Articles of Amendment to the Articles of Incorporation for ONE UP
CORPORATION which changed its name to MIGRATEC, INC., a Florida
corporation, were filed on February 16, 1998.
The certification requested is enclosed.
Should you have any question regarding this matter, please telephone (850)
487-6050, the Amendment Filing Section.
Karen Gibson
Corporate Specialist
Division of Corporations Letter Number:798A00009305
<PAGE> 4
[STATE OF FLORIDA DEPARTMENT OF STATE LETTERHEAD]
I certify from the records of this office that MIGRATEC, INC. is a
corporation organized under the laws of the State of Florida, filed on
February 24, 1989.
The document number of this corporation is K68350.
I further certify that said corporation has paid all fees and penalties due
this office through December 31, 1998, that its most recent annual report
was filed on February 11, 1998, and its status is active.
I further certify that said corporation has not filed Articles of
Dissolution.
Given under my hand and the
Great Seal of the State of Florida
at Tallahassee, the Capitol, this the
Eighteenth day of February, 1998
[SEAL]
/s/ SANDRA B. MORTHAM
Sandra B. Mortham
Secretary of State
<PAGE> 1
EXHIBIT 3.5
BY-LAWS
OF
NEW YORK SPORTS, INC.
ARTICLE 1.
MEETING OF STOCKHOLDERS
Section 1. STOCKHOLDERS AND ANNUAL MEETING. For purposes of these ByLaws,
the term Stockholders shall denote the holders of any and all shares of any
and all classes of the outstanding stock of NEW YORK SPORTS, INC. (the
"Corporation"). The annual meeting of Stockholders shall be held at the
principal office of the Corporation, in the City of Port St. Lucie, County
of Martin, State of Florida, or at such other places as the Board of
Directors may from time to time determine, either within or without, the
State of Florida, pursuant to the Rules and Regulations of the Securities
and Exchange Commission, for the purpose of electing Directors and
transacting other business. The Secretary shall serve personally, or by
mail, a written notice thereof, not less than ten (10) nor more than sixty
(60) days prior to such meeting, addressed to each stockholder at his
address as it appears on the stock book as of a date to be declared by the
Board of Directors in accordance with Section 6 of these By-laws; but at any
meeting at which all Stockholders shall be present, or of which all
Stockholders not present have waived notice in writing, the giving of notice
as above required may be dispensed with.
Section 2. SPECIAL MEETING. Special meetings of Stockholders other than
those regulated by Statute, may be called at any time by a majority of the
Directors. Notice of such meeting stating the purpose for which it is called
shall be served personally or by mail by the Secretary not less than ten
(10) days before the date set for such meeting. If mailed, it shall be
directed to a Stockholder at his address as it appears on the stock book as
of the Record Date to be determined in accordance with Section 6 of these
By-laws; but at any meeting of which all Stockholders shall be present, or
of which all Stockholders not present have waived notice in writing, the
giving of notice as above required may be dispensed with. The Board of
Directors shall also, in like manner call a special meeting of Stockholders
whenever so requested in writing by Stockholders representing not less than
ten (10) percent of the voting power of the outstanding voting stock of the
Corporation. The President may at his discretion call a special meeting of
Stockholders upon ten (10) days notice. No business other than that
respecting the purposes specified in the call for the special meeting, shall
be transacted at any special meeting of the stockholders, except upon the
unanimous consent of all the Stockholders entitled to notice thereof.
Special meetings may be held within or without the State of Florida.
Section 3. VOTING. At all meetings of the Stockholders, each Stockholder of
the Corporation shall be entitled at each proposal presented at the meeting
to an amount of votes per share, if any, as determined by the rights and
limitations respecting each of the classes of outstanding stock of the
Corporation delineated in the Articles of Incorporation of the Corporation
as amended from time to time. Voting rights of Stockholders shall be
determined with reference to the names and addresses of Stockholders as
appearing on the
1
<PAGE> 2
books of the Corporation as of the Record Date. Votes may be cast in person
or by written authorized proxy.
Section 4. PROXY. Each proxy must be executed in writing by the Stockholder
of the Corporation, or his duly authorized attorney. No proxy shall be valid
after the expiration of eleven (11) months from the date of its execution
unless it shall have specified therein its duration.
Section 5. QUORUM. A majority of the voting power of the outstanding voting
stock of the Corporation shall constitute a quorum at any Stockholder's
meeting, but any number of Stockholders, even if less than a quorum, may
adjourn the meeting from time to time and place to place.
Section 6. RECORD DATE. The Board of Directors may fix a date not more than
forty (40) days prior to the date set for a meeting of Stockholders as the
Record Date as of which the Stockholders of record who have the right to
and are entitled to notice of and to vote at the meeting and any
adjournment thereof shall be determined.
Section 7. VALIDATION. When Stockholders who hold a majority of the voting
power of all the outstanding voting stock of the Corporation shall be
present at such meeting, however called or notified, and shall sign a
written consent thereto on the record of the meeting, the acts of such
meeting shall be as valid as if legally called and notified.
Section 8. ACTION BY STOCKHOLDERS WITHOUT A MEETING. Notwithstanding any of
the foregoing provisions of this Article I, any action which may be taken
by Stockholders at a meeting may be taken without a meeting provided that a
written consent is signed by Stockholders representing an amount of the
voting power of the outstanding voting stock of the Corporation necessary to
take such Stockholder action, provided that all consents solicited and
tendered under this Section or Section 607.394 of the Florida Statutes shall
be subject to:
a. The setting of a record date for said consent shall be
established by the Board of Directors of the Company. But in no case shall
the Record Date be less than ninety (90) days from the earliest date a
consent is tendered to the corporate Secretary.
b. That any consent tendered to the corporate Secretary of the
Company shall not be effective until 90 days have elapsed from the date of
tender in order to allow the corporate Secretary to review the consent for
compliance with all provisions of the corporate By-Laws, Articles and the
laws of the State of Florida, fair and reasonable disclosure under the
United States Securities & Exchange Commission rules and regulations, and
compliance with all applicable anti-fraud provisions of the State and
Federal statutes.
ARTICLE II.
DIRECTORS
Section 1. NUMBER. The affairs and business of this Corporation shall be
managed and its corporate powers exercised by a Board of Directors composed
of at least one (1) member but not to exceed nine (9) members who need not
be Stockholders of record. All of the Directors shall be of full age and at
least one of such Directors shall be a citizen of the United States.
2
<PAGE> 3
Section 2. HOW ELECTED. At the annual meeting of Stockholders, the
individuals receiving a plurality of the votes cast shall be directors and
shall constitute the Board of Directors until the next annual meeting of the
Stockholders and election and qualification of their successors. In no case
shall there be cumulative voting.
Section 3. TERM OF OFFICE. The term of office of each of the Directors shall
be one (1) year and thereafter until his successor has been elected and
qualified.
Section 4. DUTIES. The Board of Directors shall have the control and general
management of the affairs and business of the Corporation. Such Directors
shall in all cases act as a Board, regularly convened, by a majority vote,
and they may adopt such rules and regulations for the conduct of their
meetings and the management of the company as they may deem proper, not
inconsistent with the Articles of Incorporation of the Corporation, as
amended, these By-laws or the laws of the State of Florida.
Section 5. DIRECTOR'S MEETINGS. Regular meetings of the Board of Directors
shall be held immediately following the annual meeting of the Stockholders,
and at such other times as the Board of Directors may determine. Special
meetings of the Board of Directors may be called by any two Directors at any
time, and shall be called by the President or the Secretary upon the written
request of two (2) Directors. Directors' meetings may be held within or
without the State of Florida.
Section 6. NOTICE OF MEETINGS. Notice of meetings, other than the regular
annual meeting, shall be given by service upon each Director in person, or
by mailing to him at his last known post office address, at least fifteen
(15) days before the date therein designated for such meeting including the
day of mailing, of a written or printed notice thereof specifying the time
and place of such meeting, and the business to be brought before the
meeting, and no business other than that specified in such notice shall be
transacted at any special meeting. At any meeting at which every member of
the Board of Directors shall be present, although held without notice, any
business may be transacted as if the meeting had been duly called.
Section 7. VOTING. At all meetings of the Board of Directors, each Director
is to have one vote, irrespective of the number of shares of stock that he
may hold. The act of a majority of the Directors present at a meeting at
which a quorum is present shall be the act of the Board of Directors.
3
<PAGE> 4
Section 8. VACANCIES. Vacancies in the Board occurring between annual
meetings shall be filled for the unexpired portion of the term by a majority
vote of the remaining Directors. If the remaining Directors become
deadlocked and are unable to form a majority for purposes of filling the
vacancy, the vacancy shall be filled by the Stockholders representing a
majority of the voting power of the outstanding voting stock of the
Corporation either at a special meeting duly called for such purpose or by
written consent in accordance with Article I, Section 8.
Section 9. REMOVAL OF DIRECTORS. Directors may be removed in the following
manner:
1. Any one or more of the Directors may be removed either with or
without cause, at any time by a vote of the Stockholders holding fifty-one
(51) percent of the stock, at any special meeting called for that purpose.
2. Any Director may be removed for cause, by a majority vote of the
Directors, at any special meeting of the Directors called for that purpose.
Section 10. WAIVER OF NOTICE. Whenever by statute, the provision of the
Articles of Incorporation or these By-laws, the Stockholders or the Board
of Directors are authorized to take any action after notice, such notice
may be waived, in writing, before or after the holding of the meeting, by a
majority of the persons entitled to such notice, or, in the case of a
Stockholder, by his attorney thereunto authorized.
Section 11. QUORUM. At any meeting of the Board of Directors, fifty-one (51)
percent of the Board shall constitute a quorum of the transaction of
business, but in the event of a quorum not being present, a less number may
adjourn the meeting to some future date.
Section 12. EXECUTIVE COMMITTEE. The Board of Directors may, by resolution,
designate two or more of their number to constitute an Executive Committee,
who to the extent provided in such resolution, shall have and may exercise
the powers of the Board of Directors.
Section 13. ACTION OF DIRECTORS WITHOUT A MEETING. Any action which may be
taken at a meeting of the Directors of the Corporation or a Committee
thereof, may be taken without a meeting if a consent in writing setting
forth the action so to be signed by all of the Directors or all the members
of the Committee, as the case may be, is filed in the minutes of the
proceedings of the Board or of the Committee. Such consent shall have the
same effect as a unanimous vote.
ARTICLE III.
OFFICERS
Section 1. OFFICERS. This Corporation shall have a President, a Secretary
and a Treasurer, and such other officers as shall be elected from time to
time by the Board. Any person may hold two (2) or more
4
<PAGE> 5
offices except that the President may not also be Secretary or Assistant
Secretary.
Section 2. ELECTION. All officers of the Corporation shall be elected
annually by the Board of Directors at its meeting held immediately after the
meeting of Stockholders, and shall hold office for the term of one (1) year,
or until their successors are duly elected. Officers may also be members of
the Board. The Board may appoint such other officers, agents and employees
as it shall deem necessary who shall have such authority and shall perform
such duties as from time to time shall be prescribed by the Board.
Section 3. DUTIES OF OFFICERS. The duties and powers of the officers of the
Corporation shall be as follows:
PRESIDENT. The President shall be the chief executive officer of the
Corporation, shall have general and active management of the business and
affairs of the Corporation subject to the directions of the Board of
Directors, and shall preside at all meetings of the Stockholders and Board
of Directors unless a Chairman of the Board of Directors is elected as one
of the officers of the Corporation, in which case the Chairman of the Board
shall preside.
SECRETARY. The Secretary shall have custody of, and maintain, all of the
corporate records except the financial records; shall record the minutes of
all meetings of the Stockholders and Board of Directors, send out all
notices of meetings, and perform such other duties as may be prescribed by
the Board of Directors or President.
TREASURER. The Treasurer shall have custody of all corporate funds and
financial records, shall keep full and accurate accounts of receipts and
disbursements and render account thereof at the annual meetings of
Stockholders and whenever else required by the Board of Directors or
President, and shall perform such other duties as may be prescribed by the
Board of Directors or President.
Section 4. BOND. The Treasurer shall, if required by the Board of Directors,
give to the Corporation such security for the faithful discharge of his
duties as the Board may direct.
Section 5. VACANCIES, HOW FILLED. All vacancies in any office shall be
filled by the Board of Directors without undue delay at its regular meeting
or at a meeting specially called for that purpose. In the case of this
absence of any officer of the Corporation or for any reason that the Board
of Directors may deem sufficient, the Board may, except as specifically
otherwise provided in these By-Laws, delegate the powers or duties of such
officers to any other officer or Director for the time being, provided
fifty-one (51) percent of the entire Board concur therein.
Section 6. COMPENSATION OF OFFICERS. The officers shall receive such salary
or compensation as may be determined by the Board of Directors.
Section 7. REMOVAL OF OFFICERS. The Board of Directors may remove any
officer by a majority vote, at any time with or without cause.
5
<PAGE> 6
ARTICLE IV.
INDEMNIFICATION
Section 1. INDEMNIFICATION OF OFFICERS AND DIRECTORS. The Board of
Directors and employees, individually and collectively, shall be covered on
any liability claims not covered by insurance policies and any future
amounts falling within the deductible portion of any future policy(s), and
for any deductible portion on any insurance policy and also on any other
claim for which there is no insurance coverage. Therefore, under and
through the self-insurance program, or by direct coverage or payment, the
additional interest of all employees and the Board of Directors of the
Corporation, while acting in the scope of their duties while performing or
failing to perform any and all acts within or required by such duty, is
hereby assumed by the Corporation, which will include all legal and defense
costs and all settlements and court awards that the employees and/or Board
of Directors may be subject to for any act or claim that would be
constituted as a breach of a duty imposed upon them or otherwise, or for
any act they perform in furtherance of the Corporation's business and
functions. This indemnity includes all damages, including those not covered
because of any deductible provision under any insurance policy.
ARTICLE V.
CERTIFICATES OF STOCK
Section 1. DESCRIPTION OF STOCK CERTIFICATE. The certificates of stock
shall be numbered in the order in which they are issued. They should be in
a book and shall be issued in consecutive order and record of the name of
the person owning the shares, with the date of issuance and number thereof,
shall be kept by the Secretary, or other Registrar appointed by the Board
of Directors. Such certificates shall exhibit the holder's name and the
class and number of shares. They shall be signed by the President or
Vice-President, either manually or by facsimile, and countersigned by the
Secretary, Assistant Secretary, Treasurer or Assistant Treasurer, either
manually or by facsimile, and sealed with the seal of the Corporation.
Section 2. TRANSFER OF STOCK. The stock of the Corporation shall be
assignable and transferable on the books of the Corporation only by the
person in whose name it appears on said books, his legal representatives or
by his duly authorized agent. In case of transfer by attorney, the power of
attorney, duly executed and acknowledged, shall be deposited with the
Secretary, or other duly appointed Registrar, as the case may be. In all
cases of transfer, the former certificate must be surrendered up and
cancelled before a new certificate may be issued.
Section 3. LOST CERTIFICATES. If a Stockholder shall claim to have lost or
destroyed a certificate or certificates of stock issued by the Corporation,
the Board of Directors may direct, at its discretion, a new certificate or
certificates issued, upon the making of an affidavit of the fact by the
person claiming the certificate of stock to be lost or destroyed, and upon
the deposit of a bond or other indemnity in such amount and with such
sureties, if any, as the Board or the Transfer Agent may require.
6
<PAGE> 7
ARTICLE VI.
SEAL
Section 1. CORPORATE SEAL. The corporate seal shall have the name of the
Corporation and the word "seal" inscribed thereon, and may be a facsimile,
engraved, printed or an impression seal.
ARTICLE VII.
DIVIDENDS
Section 1. WHEN DECLARED. The Board of Directors shall vote to declare dividends
from net earnings or from surplus of the assets over liabilities including
capital, whenever, in their opinion, the condition of the Corporation's affairs
will render it expedient for such dividends to be declared. When the Board of
Directors shall so determine, the dividends may be paid in cash, stock or other
property.
ARTICLE VIII.
AMENDMENTS
Section 1. HOW AMENDED. These By-Laws may be altered, amended, repealed or added
to by the vote of the Board, or at a special meeting of Directors called for
that purpose. These By-Laws, and any amendments thereto, and new By-Laws added
by the Directors, may be amended, altered or replaced by the Stockholders at any
annual or special meeting of the Stockholders.
IN WITNESS WHEREOF, the undersigned President and Secretary of this Corporation
acknowledge that the foregoing seven (7) page By-Laws of NEW YORK SPORTS, INC.
have been duly adopted by the Directors of the Corporation on the ___th day of
January, 1989.
February 27, 1998 /s/ BEATRICE J. HANKS
- ------------------------------------ ------------------------------------
Date Beatrice J. Hanks
President/Secretary/Director
February 27, 1998 /s/ STEPHEN H. HANKS
- ------------------------------------ ------------------------------------
Date Stephen H. Hanks
Vice President/Secretary/Director
7
<PAGE> 1
EXHIBIT 4.1
NOT VALID UNLESS COUNTERSIGNED BY TRANSFER AGENT
INCORPORATED UNDER THE LAWS OF THE STATE OF FLORIDA
NUMBER SHARES
CUSIP NO. 598622 10 8
MIGRATEC
AUTHORIZED COMMON STOCK: 200,000,000 SHARES
NO PAR VALUE
THIS CERTIFIES THAT
IS THE RECORD HOLDER OF (SPECIMEN)
Shares of MIGRATEC, INC. Common Stock
transferable on the books of the Corporation in person or by July authorized
attorney upon surrender of this Certificate properly endorsed. This Certificate
is not valid until countersigned by the Transfer Agent and registered by the
Registrar.
Witness the facsimile seal of the Corporation and the facsimile signatures of
its duly authorized officers.
Dated:
[SEAL]
/s/ ILLEGIBLE /s/ CURTIS OVERSTREET
- ----------------------------------- -----------------------------
SECRETARY PRESIDENT
COUNTERSIGNED & REGISTERED
--------------------------------------------
COUNTERSIGNED
<PAGE> 2
NOTICE: Signature must be guaranteed by a firm which is a member of a
registered national stock exchange, or by a bank (other than a saving
bank), or a trust company. The following abbreviations, when used in
the inscription on the face of this certificate, shall be construed as
though they were written out in full according to applicable laws or
regulations:
<TABLE>
<CAPTION>
<S> <C>
TEN COM - as tenants in common UNIF GIFT MIN ACT.......... Custodian............
TEN ENT - as tenants by the entireties (Cust) (Minor)
JT TEN - as joint tenants with right under Uniform Gifts to Minors
of survivorship and not as tenants Act...........................
in common (State)
</TABLE>
Additional abbreviations may also on used though not in the above list
For Value Received,_____________ hereby sell, assign and
transfer unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
[ ]
-----------------------------------------------------------------------------
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE OF ASSIGNEE)
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
Shares
----------------------------------------------------------------------
of the capital stock represented by the within certificate, and do
hereby irrevocably constitute and appoint
Attorney
----------------------------------------------------------------------
to transfer the said stock on the books of the within named Corporation with
full power of substitution in the premises.
Dated
-----------------------
----------------------------------------------------------------
NOTICE: THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE
NAME AS WRITTEN UPON THE FACE OF THE CERTIFICATE IN
EVERY PARTICULAR WITHOUT ALTERATION OR ENLARGEMENT OR
ANY CHANGE WHATEVER
<PAGE> 1
[ATLAS, PEARLMAN, TROP & BORKSON, P.A. LETTERHEAD]
May 7, 1999
MigraTEC, Inc.
12801 North Stemmons Freeway, Suite 710
Farmers Branch, Texas 75272
RE: REGISTRATION STATEMENT ON FORM SB-2; MIGRATEC, INC. (THE "COMPANY"),
34,571,469 SHARES OF COMMON STOCK (THE REGISTRATION STATEMENT)
Gentlemen:
This opinion is submitted pursuant to the applicable rules of the
Securities and Exchange Commission with respect to the registration by the
Company of 34,571,469 shares of Common Stock, no par value per share (the
"Common Stock"), to be sold by the Selling Security Holders designated in the
Registration Statement. The shares of Common Stock to be sold include up to
8,353,719 shares of Common Stock issuable upon exercise of Common Stock
Purchase Warrants (the "Warrants").
In our capacity as counsel to the Company, we have examined the original,
certified, conformed, photostat or other copies of the Company's Articles of
Incorporation (as Amended), By-Laws, the Warrants and corporate minutes
provided to us by the Company. In all such examinations, we have assumed the
genuineness of all signatures on original documents, and the conformity to
originals or certified documents of all copies submitted to us as conformed,
photostat or other copies. In passing upon certain corporate records and
documents of the Company, we have necessarily assumed the correctness and
completeness of the statements made or included therein by the Company, and we
express no opinion thereon.
Based upon and in reliance of the foregoing, we are of the opinion that
the Common Stock previously issued and to be issued upon exercise of the
Warrants, when issued in accordance with the terms of the Warrants, will be
validly issued, fully paid and nonassessable.
We hereby consent to the use of this opinion in the Registration Statement
to be filed with the Commission.
Very truly yours,
ATLAS, PEARLMAN, TROP & BORKSON, P.A.
<PAGE> 1
EXHIBIT 10.1
THE SECURITIES WHICH ARE THE SUBJECT OF THIS AGREEMENT HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 (THE "1933 ACT"), NOR REGISTERED UNDER ANY
STATE SECURITIES LAW, AND ARE "RESTRICTED SECURITIES" AS THAT TERM IS DEFINED
IN RULE 144 UNDER THE 1933 ACT. THE SECURITIES MAY NOT BE OFFERED FOR SALE,
SOLD OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE 1933 ACT, OR PURSUANT TO AN EXEMPTION FROM REGISTRATION
UNDER THE 1933 ACT, THE AVAILABILITY OF WHICH IS TO BE ESTABLISHED TO THE
SATISFACTION OF THE COMPANY.
AGREEMENT FOR THE EXCHANGE OF COMMON STOCK
AGREEMENT made this 29th day of February, 1996 by and between NEW
YORK ACQUISITIONS INC. ("ISSUER") and ONE UP CORPORATION (the "Target").
In consideration of the mutual promises, covenants and representations
contained herein, and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
1. EXCHANGE OF SECURITIES. Subject to the terms and conditions of this
Agreement, the ISSUER agrees to issue to the One Up Group and/or its designees
9,069,945 shares of the common stock of ISSUER, $0.01 par value (the "Shares"),
in exchange for 100% of the issued and outstanding shares of the Target. The
existing shareholders of the Target are collectively referred to in this
Agreement as the "One Up Group".
2. REPRESENTATIONS AND WARRANTIES.
ISSUER represents and warrants to Target and the One Up Group the
following:
i. Organization. ISSUER is a corporation duly organized validly
existing, and in good standing under the laws of, has all necessary corporate
powers to own properties and carry on a business, and is duly qualified to do
business and is in good standing in___________. All actions taken by the
Incorporators, directors and shareholders of ISSUER have been valid and in
accordance with the laws of the State of _______________.
ii. Capital. The authorized capital stock of ISSUER consists of
200,000,000 shares of common stock, no par value, of which 1,131,579
(including all shares issuable upon conversion of the Company's outstanding
Preferred Shares) are issued and outstanding. All outstanding shares are fully
paid and nonassessable, free of liens, encumbrances, options, restrictions and
legal or equitable rights of others not a party to this Agreement. At closing,
there will be no outstanding subscriptions, options, rights, warrants,
convertible securities, or other agreements or commitments obligating ISSUER to
issue or
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<PAGE> 2
to transfer from treasury any additional shares of its capital stock. None of
the outstanding shares of ISSUER are subject to any stock restriction
agreements. All of the shareholders of ISSUER have valid title to such shares
and acquired their shares in a lawful transaction and in accordance with the
laws of the United States and and are fully paid, validly issued and
non-assessable.
iii. Financial Statements. Exhibit A to this Agreement includes
the balance sheet of ISSUER as of December 31 of 1993, 1994 and 1995, and the
related statements of income and retained earnings for the period then ended
(collectively, the "Financial Statements"). The Financial Statements have been
prepared in accordance with generally accepted accounting principles
consistently followed by ISSUER throughout the periods indicated, and fairly
present the financial position of ISSUER as of the date of the balance sheet in
the financial statements, and the results of its operations for the periods
indicated.
iv. Absence of Changes. Since December 31, 1995, there has not
been any change in the financial condition or operations of ISSUER.
v. Liabilities. ISSUER does not have any debt, liability, or
obligation of any nature, whether accrued, absolute, contingent, or otherwise,
and whether due or to become due, that is not reflected on the ISSUER's
Financial Statements. There are no pending, or to ISSUER'S best knowledge,
asserted or threatened claims, lawsuits or contingencies involving ISSUER or its
capital stock. There is no dispute of any kind between ISSUER and any third
party, and no such dispute will exist at the closing of this Agreement. At
closing, ISSUER will be free from any and all liabilities, liens, claims and/or
commitments.
vi. Ability to Carry Out Obligations. ISSUER has the right,
power, and authority to enter into and perform its obligations under this
Agreement. The execution and delivery of this Agreement by ISSUER and the
performance by ISSUER of its obligations hereunder will not cause, constitute,
or conflict with or result in (a) any breach or violation or any of the
provisions of or constitute a default under any license, indenture, mortgage,
charter, instrument, articles of incorporation, bylaw, or other agreement or
instrument to which ISSUER or its shareholders are a party, or by which they may
be bound, nor will any consents or authorizations of any party other than those
hereto be required, (b) an event that would cause ISSUER to be liable to any
party, or (a) an event that would result in the creation or imposition or any
lien, charge or encumbrance on any asset of ISSUER or upon the securities of
ISSUER to be acquired by TARGET.
vii. Full Disclosure. None of the representations and warranties
made by the ISSUER, or in any certificate or memorandum furnished or to be
furnished by the ISSUER, contains or will contain any untrue statement of a
material fact, or omit any material fact the omission of which would be
misleading.
viii. Contract and Leases. ISSUER is not currently carrying on any
business and is not a party to any contract, agreement or lease. No person holds
a power of attorney from ISSUER.
-2-
<PAGE> 3
ix. Compliance with Laws. ISSUER has complied with, and is not in
violation of any federal, state, or local statute, law, and/or regulation
pertaining to ISSUER. ISSUER has complied with all federal and state securities
laws in connection with the issuance, sale and distribution of its securities.
x. Litigation. ISSUER is not (and has not been) a party to any
suit, action, arbitration, or legal, administrative, or other proceeding, or
pending governmental investigation. To the best knowledge of the ISSUER, there
is no basis for any such action or proceeding and no such action or proceeding
is threatened against ISSUER and ISSUER is not subject to or in default with
respect to any order, writ, injunction, or decree of any federal, state, local,
or foreign court, department, agency, or instrumentality.
xi. Conduct of Business. Prior to the closing, ISSUER shall
conduct its business in the normal course, and shall not (1) sell, pledge, or
assign any assets (2) amend its Articles of Incorporation or Bylaws, (3) declare
dividends, redeem or sell stock or other securities, (4) incur any liabilities,
(5) acquire or dispose of any assets, enter into any contract, or guarantee
obligations of any third party, or (6) enter into any other transaction.
xii. Corporate Documents. Copies of each of the following
documents, which are true, complete and correct in all material respects, will
be attached to and made a part of this Agreement:
a. Articles of Incorporation;
b. Bylaws;
(1) Minutes of Shareholders Meetings;
(2) Minutes of Directors Meetings;
(3) List of Officers and Directors;
(4) Copy of all Correspondences and Reports filed with the
SEC.
(5) Balance Sheet as of December 31, 1995, together with
other financial statements described in Section 2.(iii);
(6) Stock register and stock records of ISSUER and a
current, accurate list of ISSUER's shareholders.
xiii. Documents. All minutes, consents or other documents
pertaining to ISSUER to be delivered at closing shall be valid and in accordance
with the laws of the United States and ___________________.
xiv. Title. The Shares to be issued to the One Up Group will be,
at closing, free and clear of all liens, security interests, pledges, charges,
claims, encumbrances and restrictions of any kind. None of such Shares are or
will be subject to any voting trust or agreement. No person holds or has the
right to receive any proxy or similar instrument with respect to such shares.
The ISSUER is not a party to any agreement which offers or grants to any person
the right to purchase or acquire any of the securities to be issued to TARGET.
There is no applicable local, state or federal law, rule, regulation, or decree
which would, as a result of the issuance of the Shares to the One Up Group,
impair, restrict or delay the One Up Group's voting rights with respect to the
Shares.
-3-
<PAGE> 4
3. Target represents and warrants to ISSUER the following:
i. Organization. Target is a corporation duly organized, validly
existing, and in good standing under the laws of Texas, has all necessary
corporate powers to own properties and carry on a business, and is duly
qualified to do business and is in good standing in Texas. All actions taken by
the Incorporators, directors and shareholders of Target have been valid and in
accordance with the laws of the State of Texas.
ii. Shareholders and Issued Stock. The following sets forth the
names and share holdings of 100% of ONE UP CORPORATION'S shareholders and
shares:
<TABLE>
<CAPTION>
Name Number of Shares
---- ----------------
<S> <C>
Richard Dews 1090
Wayne Sanderson 60
Mike Mobley 50
</TABLE>
iii. Listing Stock for Trading. Upon closing, ISSUER shall take all
commercially reasonable steps necessary to get the ISSUER's common stock listed
for trading in NASD Automated Bulletin Board and to, as soon as practicably
possible, have the company listed with Standard and Poors or Moodys in their
Accelerated Corporate Report and to pay the fee for said listing.
4. INVESTMENT INTENT. Target agrees that the Shares being issued
pursuant to this Agreement may be sold, pledged, assigned, hypothecated or
otherwise transferred, with or without consideration (a "Transfer"), only
pursuant to an effective registration statement under the Act, or pursuant to
an exemption from registration under the Act, the availability of which is to
be established to the reasonable satisfaction of ISSUER. Target agrees, prior
to any Transfer, to give written notice to ISSUER expressing his desire to
effect the transfer and describing the proposed transfer.
5. CLOSING. The closing of this transaction shall take place at a time
and place mutually convenient for the parties. Unless the closing of this
transaction takes place on or before February ___, 1996, then either party may
terminate this Agreement. If this Agreement is terminated due to the failure of
the ISSUER to satisfactorily provide the documents specified below, there shall
be no further obligation or liability owing between the parties. As part of the
closing, the following documents, in form reasonably acceptable to counsel to
the parties, shall be delivered.
i. By the ISSUER
(1) Board of Directors Minutes duly authorizing the issuance of
certificates for 8,235,510 Shares registered in the name of Richard Dews,
453,497 Shares registered in the name of Wayne Sanderson, 380,938 Shares
registered in the name of Mike Mobley, 400,000 shares to be issued pursuant to
a Form S-8 Ruling in the name of bona fide third-party consultants to be
designated by One Up at closing.
-4-
<PAGE> 5
(2) The resignation of all officers of ISSUER.
(3) A Board of Directors resolution appointing such person as
TARGET designates as a director of ISSUER.
(4) The resignation of all the directors of ISSUER, except that
of Target's designee, dated subsequent to the resolution described in 3, above.
(5) Certified Audited financial statements of ISSUER, which
shall include a balance sheet dated as of December 31, 1995 and statements of
operations, stockholders equity and cash flows for the twelve month period then
ended.
(6) All of the business and corporate records of ISSUER,
including but not limited to correspondence files, bank statements, checkbooks,
savings account books, minutes of shareholder and directors meetings, financial
statements, shareholder listings, stock transfer records, agreements and
contracts.
(7) All other minutes of ISSUER's shareholders or directors.
(8) An Opinion Letter from our Attorney attesting to the
validity and condition of the ISSUER.
ii. BY TARGET:
(1) Delivery to the ISSUER of duly executed and authorized
Articles of Exchange and Plan of Exchange in material conformance with Texas
law to evidence the exchange of 100% of the issued and outstanding stock of
TARGET in accordance therewith and herewith.
6. REMEDIES.
i. Arbitration. Any controversy or claim arising out of, or
relating to, this Agreement, or the making, performance, or interpretation
thereof, shall be settled by arbitration in Dallas, Dallas County, Texas in
accordance with the Rules of the American Arbitration Association then
existing, and judgment on the arbitration award may be entered in any court
having jurisdiction over the subject matter of the controversy.
ii. Termination. In addition to any other remedies, TARGET may on
or before the closing date terminate this Agreement, without liability if:
(1) Any bonafide action or proceeding shall be pending against
the ISSUER on the closing date that could result in an unfavorable judgment,
decree, or order that would prevent or make unlawful the carrying out of this
Agreement or if any agency of the federal or of any state government shall have
objected at or before the closing date to the acquisition of the SHARES by
TARGET or to any other action required by or in connection with this Agreement;
or
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<PAGE> 6
(2) If the legality and sufficiency of all steps taken and to be
taken by ISSUER in carrying out this Agreement shall not have been approved by
TARGET'S counsel, which approval shall not be unreasonably withheld.
7. MISCELLANEOUS.
i. Caption and Headings. The Article and paragraph headings
throughout this Agreement are for convenience and reference only, and shall in
no way be deemed to define, limit, or add to the meaning of any provision of
this Agreement.
ii. No Oral Change. This Agreement and any provision hereof, may
not be waived, changed, modified, or discharged orally, but only by an
agreement in writing signed by the party against whom enforcement of any
waiver, change, modification, or discharge is sought.
iii. Non Waiver. Except as otherwise expressly provided herein, no
waiver of any covenant, condition, or provision of this Agreement shall be
deemed to have been made unless expressly in writing and signed by the party
against whom such waiver is charged; and (i) the failure of any party to insist
in any one or more cases upon the performance of any of the provisions,
covenants, or conditions of this Agreement or to exercise any option herein
contained shall not be construed as a waiver or relinquishment for the future
of any such provisions, covenants, or conditions, (ii) the acceptance of
performance of anything required by this Agreement to be performed with
knowledge of the breach of failure of a covenant, condition, or provision
hereof shall not be deemed a waiver of such breach or failure, and (iii) no
waiver by any party of one breach by another party shall be construed as a
waiver with respect to any other or subsequent breach.
iv. Entire Agreement. This Agreement contains the entire Agreement
and understanding between the parties hereto, and supersedes all prior written
or oral agreements and understandings.
v. Counterparts. This Agreement may be executed simultaneously in
one or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
vi. Notices. All notices, requests, demands, and other
communications under this Agreement shall be writing and shall be deemed to have
been duly given on the date of service if served personally on the party to whom
notice is to be given, or on the third day after mailing is if mailed to the
party to whom notice is to be given, by first class mail, registered or
certified postage prepaid, and property addressed, and by fax, as follows:
-6-
<PAGE> 7
ISSUER: Ms. Beatrice Hanks
355 First Street
New York, NY 11215
Fax: (718) 369-3186
Copy to: Eric P. Littman, Esquire
1428 Brickell Avenue
8th Floor
Miami, FL 33131
Tel: (305) 372-3322
Fax: (305) 372-0280
The TARGET: Richard Dews
5 Campus Circle
Suite 100
Westlake, TX 76262
Fax: (817) 962-6511
Copy to: Anthony J. Ciaccio
Ciaccio & Associates
901 Main St., Suite 4600
Dallas, Texas 75202
Tel: (214) 747-7504
Fax: (214) 747-7503
IN WITNESS WHEREOF, the undersigned has executed this Agreement this
29th day of February, 1996.
NEW YORK ACQUISITIONS, INC. ONE UP CORPORATION
By: /s/ BEATRICE HANKS By: /s/ RICHARD DEWS
------------------------- -------------------------
Beatrice Hanks, President Richard Dews, President
-7-
<PAGE> 8
AGREEMENT OF CONSENT
I, Michael W. Mobley, owner of fifty (50) shares of Common Stock of
One Up Corporation ("One Up"), (such shares owned by me free and clear of all
liens, claims and encumbrances), hereby provide irrevocable consent to One Up
to enter into and perform all obligations under that certain Agreement for the
Exchange of Common Stock (the "Exchange Agreement") and such other documents as
may be necessary and appropriate to achieve the purposes and intent expressed
therein. I hereby acknowledge that I have been provided an opportunity to
review a draft of the Exchange Agreement and consult with advisors prior to
entering into this Agreement.
I hereby understand and agree that as a result of the transactions
described in the Exchange Agreement, all of the shares of Common Stock of One
Up that I own (i.e., fifty (50)), will be exchanged for 364,138 shares of
Common Stock of New York Acquisitions, Inc., a Florida corporation. I
understand and agree that none of the shares I receive of New York
Acquisitions, Inc. will be registered under federal or state securities laws. I
agree that any transfer of such shares must be in accordance with applicable
federal and state securities laws.
IN WITNESS WHEREOF, intending to be legally bound to the foregoing, I
hereby execute this Agreement of Consent to be effective as of this 26th day of
February, 1996.
/s/ MICHAEL W. MOBLEY
---------------------------------
Michael W. Mobley
I, the spouse of Michael W. Mobley, hereby consent to the foregoing
and irrevocably waive any claim to the contrary.
---------------------------------
Spouse's Signature
---------------------------------
Print Name
---------------------------------
Date
-1-
<PAGE> 9
AGREEMENT OF CONSENT
I, H. Wayne Sanderson, owner of sixty (60) shares of Common Stock of
One Up Corporation ("One Up"), (such shares owned by me free and clear of all
liens, claims and encumbrances), hereby provide irrevocable consent to One Up
to enter into and perform all obligations under that certain Agreement for the
Exchange of Common Stock (the "Exchange Agreement") and such other documents
as may be necessary and appropriate to achieve the purposes and intent
expressed therein. I hereby acknowledge that I have been provided an
opportunity to review a draft of the Exchange Agreement and consult with
advisors prior to entering into this Agreement.
I hereby understand and agree that as a result of the transactions
described in the Exchange Agreement, all of the shares of Common Stock of One
Up that I own (i.e. sixty (60)), will be exchanged for 453,497 shares of Common
Stock of New York Acquisitions, Inc., a Florida corporation. I understand and
agree that none of the shares I receive of New York Acquisitions, Inc. will be
registered under federal or state securities laws. I agree that any transfer of
such shares must be in accordance with applicable federal and state securities
laws.
IN WITNESS WHEREOF, intending to be legally bound to the foregoing, I
hereby execute this Agreement of Consent to be effective as of this 29th day of
February, 1996.
/s/ H. WAYNE SANDERSON
---------------------------------
H. Wayne Sanderson
<PAGE> 10
AGREEMENT OF CONSENT
I, Richard G. Dews, owner of one thousand ninety (1090) shares of
Common Stock of One Up Corporation ("One Up"), (such shares owned by me free
and clear of all liens, claims and encumbrances), hereby provide irrevocable
consent to One Up to enter into and perform all obligations under that certain
Agreement for the Exchange of Common Stock (the "Exchange Agreement") and such
other documents as may be necessary and appropriate to achieve the purposes and
intent expressed therein. I hereby acknowledge that I have been provided an
opportunity to review a draft of the Exchange Agreement and consult with
advisors prior to entering into this Agreement.
I hereby understand and agree that as a result of the transactions
described in the Exchange Agreement, all of the shares of Common Stock of One
Up that I own (i.e. one thousand ninety (1090)), will be exchanged for
8,235,510 shares of Common Stock of New York Acquisitions, Inc., a Florida
corporation. I understand and agree that none of the shares I receive of New
York Acquisitions, Inc. will be registered under federal or state securities
laws. I agree that any transfer of such shares must be in accordance with
applicable federal and state securities laws.
IN WITNESS WHEREOF, intending to be legally bound to the foregoing, I
hereby execute this Agreement of Consent to be effective as of this 29th day of
February, 1996.
/s/ RICHARD G. DEWS
---------------------------------
Richard G. Dews
<PAGE> 11
ARTICLES OF EXCHANGE
Pursuant to Article 5.04 of the Texas Business Corporation Act, as
amended, the undersigned domestic corporations hereby adopt the following
Articles of Exchange for the purpose of exchanging their shares of stock:
1. The names of the undersigned corporations are as follows:
Name of Corporation
One Up Corporation, a Texas corporation
New York Acquisitions, Inc., a Florida corporation
2. The Plan of Exchange dated as of February 29, 1996 (the "Plan"), a
copy of which is attached as Exhibit A hereto, was approved by the shareholders
of One Up Corporation in the manner prescribed by the Texas Business
Corporation Act, as amended (the "Act"). Shareholder approval is not required
for New York Acquisitions, Inc. under Article 5.03 of the Act.
3. The number of shares outstanding and entitled to vote on the Plan
for One Up Corporation is:
<TABLE>
<CAPTION>
No. of Shares
No. of Shares Entitled
Outstanding to Vote
------------- -------------
<S> <C> <C>
One Up Corporation 1,000 1,000
</TABLE>
One Up Corporation has only one class of capital stock outstanding.
4. The number of shares voted for and against the Plan are:
<TABLE>
<CAPTION>
Voted For Voted Against Abstain
--------- ------------- -------
<S> <C> <C> <C>
One Up Corporation 950 0 50
</TABLE>
No shares of One Up Corporation were entitled to vote as a class or a series
with respect to the Plan.
5. The approval by One Up Corporation of the Plan and the performance
of its terms was duly authorized by all action required by the State of Texas
and its constituent documents.
6. The approval by New York Acquisition, Inc. of the Plan and the
performance of its terms was duly authorized by all action required by the laws
of the State of Florida and its constituent documents.
<PAGE> 12
IN WITNESS WHEREOF, each of the undersigned corporations has caused
these Articles of Exchange to be executed by and on its behalf and in its
corporate name as of February 29, 1996.
ONE UP CORPORATION
a Texas corporation
By: /s/ RICHARD DEWS
----------------------------------
Richard Dews, President
NEW YORK ACQUISITIONS, INC.
a Florida corporation
By: /s/ BEATRICE J. HANKS
-------------------------------
Print Name: Beatrice J. Hanks
-----------------------
Its: President
------------------------------
<PAGE> 13
EXHIBIT A
PLAN OF EXCHANGE
This Plan of Exchange (the "Plan") dated as of February 29, 1996, is
entered into by and between One Up Corporation, a Texas corporation, and New
York Acquisitions, Inc., a Florida corporation.
R E C I T A L S:
WHEREAS, One Up Corporation is a corporation duly organized and
validly existing under the laws of the State of Texas;
WHEREAS, New York Acquisitions, Inc. is a corporation duly organized
and validly existing under the laws of the state of Florida;
WHEREAS, the Boards of Directors of One Up Corporation and New York
Acquisitions, Inc. deem it advisable, and for the benefit and in the best
interest of their respective corporations and shareholders, that such
corporations (sometimes collectively referred to herein as the "Exchanging
Corporations") effect an exchange of shares (the "Exchange") upon the terms and
conditions set forth in this Plan and pursuant to the applicable laws of the
State of Texas; and
WHEREAS, all necessary shareholder or other approvals have been
received by the Exchanging Corporations.
In accordance with Article 5.02 of the Texas Business Corporation Act,
as amended, the Plan of Exchange is as follows:
ARTICLE ONE
1.01. All of the shares of stock of One Up Corporation will be
acquired by New York Acquisitions, Inc.
1.02 The terms and conditions for the exchange of all of the shares of
stock of One Up Corporation shall be that in return for its shares One Up
Corporation will receive 9,069,945 shares of the Common Stock of New York
Acquisition, Inc.
1.03 The manner and basis of exchanging the share of One Up
Corporation shall result in each of the issued and outstanding shares of One Up
Corporation held by its shareholders immediately prior to the Effective Time of
the Exchange, by virtue of the Exchange and without the necessity of any action
on the part of the shareholders of One Up Corporation shall be converted into
7558.2875 shares of Common Stock of New York Acquisitions, Inc. and no cash,
securities or other property shall be issued in the
<PAGE> 14
Exchange. No fractional shares of stock will be issued in the Exchange.
ARTICLE TWO
2.01. The Exchange shall become effective (hereinbefore and hereinafter
called the "Effective Time of the Exchange") upon the filing with the Secretary
of State of the State of Texas of Articles of Exchange with respect to the
Exchange and the issuance by the Secretary of State of the State of Texas of a
Certificate of Exchange pursuant to Article 5.04 of the Texas Business
Corporation Act, as amended.
ARTICLE THREE
3.01. The Boards of Directors of the Exchange Corporations may, in
their sole discretion, abandon the Exchange, subject to the right of third
parties under any contracts relating thereto, without any action or approval
from the shareholders of their respective corporations, at any time before the
Effective Time of the Merger, as provided by the laws of the State of Texas.
-2-
<PAGE> 1
EXHIBIT 10.2
"EXHIBIT A"
Standard Commercial Lease Agreement
1986
COMMERCIAL LEASE AGREEMENT
THIS Lease AGREEMENT is entered into by:
1. LANDLORD: TDC Dallas Partners No. 2. Ltd. ("Landlord").
2. TENANT: One Up Corporation ("Tenant").
3. LEASED PREMISES: In consideration of the rents, term and
covenants of this Lease Agreement (the "Lease"), Landlord hereby
leases to Tenant certain premises (the "Leased Premises") containing
approximately 14,200 square feet within the building or project known
as Valley View Tech Center II/III, and located at 12801 Stemmons
Freeway, suite 710 on a certain tract of land in Farmers Branch,
Dallas County, Texas. Such land (which is described in the attached
Exhibit A), together with the building(s), landscaping, parking and
driveway areas, sidewalks, and other improvements thereon shall be
referred to in this Lease as the "Project". In the case of a
multi-building Project, the word "Building" shall refer to the
particular building in which the Leased Premises are located and the
tract of land upon which such building is located. In the case of a
single building Project the term "Building" as used herein shall be
synonymous with the term "Project". If the Leased Premises encompass
an entire building, then the term "Leased Premises" shall be
synonymous with "Building". A fuller description of the Leased
Premises, including a floor plan thereof, is contained in Exhibit B
to be attached.
4. TERM:
(a) The term of this Lease shall be Thirty Six (36) months and
Twenty Four (24) days commencing on April 7, 1997 (the "Commencement
Date") and terminating on the last day of April, 2000 (the
"Termination Date"). The Commencement Date may be subject to change,
however, pursuant to Subparagraphs (b) and (c) below. However, any
such change in the Commencement Date shall have no effect upon the
Termination Date.
(b) Tenant acknowledges that it has inspected and accepts the
Leased Premises in their present condition as suitable for Tenant's
purposes. If this Lease is executed before the Leased Premises become
vacant or otherwise available for occupancy, or if any present tenant
or occupant of the Leased Premises holds over and Landlord cannot
acquire possession of the Leased Premises prior to the Commencement
Date stated above, Tenant agrees to accept possession of the Leased
Premises at such time as Landlord is able to tender the same, which
date shall then be the Commencement Date of the Lease term.
(c) [OMITTED]
(d) Tenant acknowledges that no representations or promises
regarding repairs, alterations, remodeling, or improvements to the
Leased Premises have been made by Landlord, its agents, employees, or
other representatives, unless such are expressly set forth in this
Lease, and that Tenant is solely responsible for applying for and
obtaining a certificate of occupancy for the Leased Premises. Tenant
agrees that if its occupancy of the Leased Premises is delayed under
the circumstances described in Subparagraph (b) or (c) above, this
Lease shall nonetheless continue in full force and effect. However,
any rental amounts applicable to such period of delay shall be abated
and such abatement shall constitute full settlement of all claims by
Tenant against Landlord by reason of any such delay in possession of
the Leased Premises. Tenant's taking possession of the leased
Premises shall conclusively establish that the improvements, if any,
to be made by Landlord under the terms of this Lease, have been
completed in accordance with the plans and specifications therefor
and that the Leased Premises are in good and satisfactory condition
as of the date of Tenant's possession, unless Tenant notifies
Landlord in writing specifying any defects within ten (10) days after
taking possession. Landlord shall use reasonable diligence to repair
promptly such items but Tenant shall have no claim for damages or
rebate or abatement of rent by reason thereof. After the Commencement
Date and upon completion of any necessary repairs as provided above.
Tenant shall, upon demand, execute and deliver to Landlord a letter
of acceptance of the Leased Premises and acknowledgment of the date
of the Commencement Date.
5. BASE RENT AND SECURITY DEPOSIT:
(a) Tenant agrees to pay to Landlord as rent the sum of Three
Hundred Ninety-One Thousand Nine Hundred Twenty and 00/100 Dollars
($391,920) subject to adjustment for early or delayed occupancy under
the terms hereof. Such rent shall be payable in monthly amounts of
Ten Thousand Six Hundred Fifty and no/100 Dollars ($10,650.00) each,
in advance, without demand deduction or offset (sometimes referred to
in this Lease as the "Base Rent" or "Base Rental"). Such rental
amounts shall be due and payable to Landlord in lawful money of the
United States of America at the address shown below. An amount equal
to one monthly Base Rental payment shall be due and payable on the
date Tenant executes this Lease and such amount shall be applied to
the rent due for the first complete calendar month occurring after
the Commencement Date, provided that if the Commencement Date should
be a date other than the first day of a calendar month the rent for
such partial month shall be prorated. All succeeding installments of
rent shall be due and payable on or before the first day of each
succeeding calendar month during the Lease term. The amount of the
Base Rent shall be adjusted as provided in Paragraph 6 below.
(b) On the date Tenant executes this Lease there shall be due
and payable by Tenant a security deposit in an amount equal to one
Two monthly Base Rental installment. Such deposit shall be held by
Landlord (without any obligation to pay interest thereon or segregate
such monies from Landlord's general funds) as security for the
performance of Tenant's obligations under this Lease. Tenant agrees
to increase such security deposit from time to time so that it is at
all times equal to one Two monthly Base Rental installment, as
adjusted pursuant to Paragraph 6(a) below. Tenant shall deposit cash
with Landlord in an amount sufficient so to increase the security
deposit within five (5) days after written demand by Landlord. It is
expressly understood that the
1
<PAGE> 2
security deposit is not an advance payment of rental or a measure of
Landlord's damages in the event of Tenant's default under this Lease.
Upon the occurrence of any event of default by Tenant or breach by
Tenant of its covenants under this Lease, Landlord may, from time to
time, without prejudice to any other remedy provided herein or
provided by law, use, apply, or retain all or part of the security
deposit for the payment of any rent or other sum in default, or for
the payment of any other amount which Landlord my spend or become
obligated to spend by reason of Tenant's default, or for payment of
any other amount which Landlord may spend or become obligated to
spend by reason of Tenant default or breach, or to compensate
Landlord for any damage, injury, expense or liability caused to
Landlord by such default or breach. If any portion of the security
deposit is so used or applied, Tenant shall, within five (5) days
after written demand therefor, deposit cash with Landlord in an
amount sufficient to restore the security deposit to the amount
required by this Paragraph. Tenant's failure to do so shall be a
default under this Lease. The balance of the security deposit shall
be returned by Landlord to Tenant at such time after termination of
this Lease that all of Tenant's obligations have been fulfilled.
(c) Other remedies for nonpayment of Rent notwithstanding, if
the monthly Base Rental payment is not received by Landlord on or
before the tenth (10th) day of the month for which such rent is due,
or if any other payment due Landlord by Tenant hereunder (such sums
being deemed to be additional Rent) is not received by Landlord on or
before the tenth (10th) day of the month next following the month in
which Tenant was invoiced, a service charge of five percent (5%) of
such past due amount shall be additionally due and payable by Tenant.
Such service charge shall be cumulative of any other remedies
Landlord may have for nonpayment of Rent and other sums payable under
this Lease.
(d) If three (3) consecutive monthly Rental payments in one
calendar year or any for five (5) monthly Rental payments during the
Lease term (or any renewal or extension thereof) are not received by
Landlord on or before the tenth (10th) day of the month for which
such Rent was due, the Base Rent hereunder shall automatically become
due and payable by Tenant in advance in quarterly installments equal
to three (3) months' Base Rent each. The first of such quarterly Base
Rent payments shall be due and payable on the first day of the next
succeeding calendar month and on the first day of every third
(3rd) calendar month thereafter. This remedy shall be cumulative of
any other remedies of Landlord under this Lease for nonpayment of
Rent.
6. ADDITIONAL RENT:
(a) Taxes, Insurance and Common Area Maintenance
(1) In the event the "Tax, Insurance and Common Area
Maintenance Expenses" (as defined below) of the Building shall in any
calendar year during the term of this Lease exceed the sum of the
actual expenses for calendar year 1997 per square foot, then with
respect to such excess (the "Tax, Insurance and Common Area
Maintenance Differential"), Tenant agrees to pay as additional rental
Tenant's pro rata share of the Tax, Insurance and Common Area
Maintenance Differential within ten (10) days following receipt of an
invoice from Landlord stating the amount due. The pro rata share to
be paid by Tenant is Nine and 7521 ten thousandths percent (9.7521%)
subject, however, to adjustment for any expansion of the Leased
Premises. In the case of a multi-building Project, if such Tax,
Insurance and Common Area Maintenance Expenses are not separately
assessed to the Building but are assessed against the Project as a
whole, Landlord shall determine the portion of such Tax, Insurance
and Common Area Maintenance Expenses allocable to the Building in
which the Leased Premises are located.
(2) At or prior to the commencement of this Lease and at any
time during the Lease term, Landlord may deliver to Tenant a written
estimate of any additional rent applicable to the Leased Premises
(based on the pro rata share stated above) which may be anticipated
for excess Tax, Insurance and Common Area Maintenance Expenses during
the calendar year in which this Lease commences or for any succeeding
calendar year, as the case may be. Based upon such written estimate,
the monthly Base Rental shall be increased by one-twelfth (1/12) of
the estimated additional rent.
(3) Statements showing the actual Tax and Insurance Expenses
(as well as the actual Common Area Maintenance Expenses, as defined
in Paragraph 6(b) below) and Tenant's proportionate share thereof
(hereinafter referred to as the "Statement of Actual Adjustment")
shall be delivered by Landlord to Tenant after any calendar year in
which additional rental was paid or due by Tenant. Within ten (10)
days after the delivery by Landlord to Tenant of such Statement of
Actual Adjustment, Tenant shall pay Landlord the amount of any
additional rental shown on such statement as being due and unpaid. If
such Statement of Actual Adjustment shows that Tenant has paid more
than the amount of additional rental actually due from Tenant for the
preceding calendar year and if Tenant is not then in default under
this Lease, Landlord shall credit the amount of such excess to the
next Base Rental installment due from Tenant.
(4) "Tax and Insurance Expenses" shall mean: (i) all ad
valorem, rental, sales, use, and other taxes (other than Landlord's
income taxes), special assessments, and other governmental charges,
and all assessments due to deed restrictions and/or owner's
associations which accrue against the Building during the term of
this Lease; and (ii) all insurance premiums paid by Landlord with
respect to the Building including, without limitation, public
liability, casualty, rental, and property damage insurance.
(b) Common Area Maintenance
(1) "Common Area Maintenance Expenses" shall mean all
expenses (other than the Tax and Insurance Expenses described above)
incurred by Landlord for the maintenance, repair, and operation of
the Building, (excluding only structural soundness of the roof,
foundation and exterior walls) including, but not limited to,
management fees, utility expenses (if not separately metered),
maintenance and repair costs, sewer, landscaping, trash and security
costs (if furnished by Landlord), wages and fringe benefits payable
to employees of Landlord whose duties are connected with the
operation and maintenance of the Building, amounts paid to
contractors or subcontractors for work or services performed in
connection with the operation and maintenance of the Building, all
services, supplies, repairs, replacements or other expenses for
maintaining, repairing, and operating the Building, including without
limitation common areas and parking areas and roof, exterior wall and
foundation work that is not related to structural soundness.
(2) The term "Common Area Maintenance Expenses" does not
include the cost of any capital Improvement to the Building other
than the reasonably amortized cost of capital improvements which
result in the reduction of Insurance Expenses or Common Area
Maintenance Expenses. Further, the term "Common Area Maintenance
Expenses" shall not include repair, restoration or other work
occasioned by fire, windstorm or other casualty with respect to which
Landlord actually receives insurance proceeds, income and franchise
taxes of Landlord, expenses incurred in leasing to or procuring of
tenants, leasing commissions, advertising expenses, expenses for the
renovating of space for new tenants, interest or principal payments
on any mortgage or other indebtedness of Landlord, compensation paid
to any employee of Landlord above the grade of building
superintendent, or depreciation allowance or expense.
(c) If the Commencement Date of this Lease is a day other then
the first day of a month, or if the Termination Date is a day other
than the last day of a month, the amount shown as due by Tenant on
the Statement of Actual Adjustment shall reflect a proration based on
the ratio that the number of days this Lease was in effect during
such month bears to the actual number of days in said month.
2
<PAGE> 3
(d) The failure of Landlord to exercise its rights hereunder to
estimate expenses and require payment of same as additional rental
shall not constitute a waiver of such rights which rights may be
exercised from time to time at Landlord's discretion.
(e) If the nature of Tenant's business or use of the Leased
Premises is such that additional costs are incurred by Landlord for
cleaning, sanitation, trash collection or disposal services, Tenant
agrees to pay as additional rental to Landlord the amount of such
additional costs upon demand.
7. TENANT REPAIRS AND MAINTENANCE:
(a) Tenant shall maintain all parts of the Leased Premises and
their appurtenances (except those for which Landlord is expressly
responsible under this Lease) in good, clean and sanitary condition
at its own expense. Tenant shall promptly make all necessary repairs
and replacements to the Leased Premises, including but not limited
to, electric light lamps or tubes, windows, glass and plate glass,
interior and exterior doors, any special office entry, interior walls
and finish work, floors and floor coverings, downspouts, gutters,
heating and air conditioning systems, dock boards, truck doors, dock
bumpers, plumbing work and fixtures other than common building sewage
lines. Tenant shall be obligated to repair wind damage to glass
caused by events other than hurricanes or tornadoes. Otherwise,
however, Tenant shall not be obligated to repair any damage caused by
fire, hurricane, tornado or other casualty covered by the insurance
maintained by Landlord.
(b) Tenant shall not damage or disturb the integrity, structural
soundness, or support of any wall, roof, or foundation of the Leased
Premises. Any damage to these walls caused by Tenant or its
employees, agents or invitees shall be promptly repaired by Tenant at
its sole cost and expense.
(c) Landlord shall have the right to coordinate any repairs and
other maintenance of any rail tracks serving or to serve the Project,
and if Tenant uses such rail tracks, Tenant shall reimburse Landlord
from time to time upon demand for a share of the cost of such repairs
and maintenance and any other sums specified in any agreement to
which Landlord is a party respecting such tracks. Tenant's share of
such costs shall be additional rent and shall reflect a proration
based on the ratio that the space contained in the Leased Premises
bears to the entire space occupied by rail users in the Project.
(d) Tenant shall, at its own cost and expense, enter into a
regularly scheduled preventive maintenance/service contract with a
maintenance contractor for servicing all heating and air conditioning
systems and equipment within the Leased Premises. The maintenance
contractor and the contract must be approved by Landlord. The service
contract must include all services suggested by the equipment
manufacturer within the operation/maintenance manual and must become
effective (and a copy delivered to Landlord) within thirty (30) days
of the date Tenant takes possession of the Leased Premises. If Tenant
fails to enter into such service contract as required, Landlord shall
have the right to do so on Tenant's behalf and Tenant agrees to pay
Landlord the cost and expense of same upon demand. Landlord shall
provide Tenant a warranty through September 30, 1997 on all heating
and air conditioning systems and equipment within the Leased
Premises. **
(e) Tenant shall pay all charges for pest control and
extermination within the Leased Premises.
(f) At the termination of this Lease, Tenant shall deliver the
Leased Premises "broom clean" to Landlord in the same good order and
condition as existed at the Commencement Date of this Lease, ordinary
wear, natural deterioration beyond the control of Tenant, damage by
fire, tornado or other casualty excepted.
(g) Not in limitation on the foregoing, it is expressly
understood that Tenant shall repair and pay for all damage caused by
the negligence of Tenant, Tenant's employees, agents or invitees, or
caused by Tenant's default hereunder. All requests for repairs or
maintenance that are the responsibility of Landlord under this Lease
must be made in writing to Landlord at the address set forth below.
8. LANDLORD'S REPAIRS: Landlord shall be responsible, at its
expense, only for the structural soundness of the roof, foundation
and exterior walls of the Building. Any repair to the roof,
foundation or exterior walls occasioned by the act or omission of
Tenant, or its agents, employees, guests or invitees shall be the
responsibility of Tenant. The term "walls" as used in this Paragraph
8 shall not include windows, glass or plate glass, interior doors,
special store fronts, office entries or exterior doors. Landlord's
liability with respect to any defects, repairs or maintenance for
which Landlord is responsible at its expense under this Lease shall
be limited to the cost of such repairs or maintenance or the curing
of such defect. As expenses included in Common Area Maintenance
Expenses, Landlord will be responsible for landscaping and
maintenance of common areas and parking areas, exterior painting, and
common sewage line plumbing. Tenant shall immediately give Landlord
written notice of defects or need for repairs, after which Landlord
shall have a reasonable opportunity to repair same or cure such
defect. Landlord shall not be required to perform any covenant or
obligation of this Lease, or be liable in damages to Tenant, so long
as the performance or non-performance of the covenant or obligation
is delayed, caused by, or prevented by an act of God or force
majeure. An "act of God" or "force majeure" is defined for purposes
of this Lease as strikes, lockouts, sit-downs, material or labor
restrictions by any governmental authority, riots, floods, washouts,
explosions, earthquakes, fire, storms, acts of the public enemy,
wars, insurrections and any other similar cause not reasonably within
the control of Landlord, and which by the exercise of due diligence
Landlord is unable, wholly or in part, to prevent or overcome.
9. UTILITY SERVICE: Tenant shall pay the cost of all utility
services, including, but not limited to, initial connection charges
and all charges for gas, water, and electricity used on the Leased
Premises. If the Leased Premises are separately metered, Tenant shall
pay such costs directly to the appropriate utility company.
Otherwise, Tenant shall pay such costs pursuant to Paragraph 6(b)
above. Tenant shall pay all costs caused by Tenant introducing
excessive pollutants into the sanitary sewer system, including
permits, fees and charges levied by any governmental subdivision for
any pollutants or solids other than ordinary human waste. If Tenant
can be clearly identified as being responsible for obstructions or
stoppage of the common sanitary sewage line, the Tenant shall pay the
entire cost thereof, upon demand, as additional rent. Tenant shall be
responsible for the installation and maintenance of any dilution
tanks, holding tanks, settling tanks, sewer sampling devices, sand
traps, grease traps or similar devices which may be required by the
appropriate governmental subdivision for Tenant's use of the sanitary
sewer system. Tenant shall also pay all surcharges (i.e. charges in
excess of normal charges) levied due to Tenant's abnormal use of
sanitary sewer or waste removal services so that no such surcharges
shall affect Landlord or other tenants in the Project under Paragraph
6(b) above.
10. SIGNS: No sign, door plaques, advertisement, or notice shall be
displayed, painted or affixed by Tenant on any part of the Project or
Building, parking facilities, or Leased Premises without prior
written consent of Landlord. The color, size, character, style,
material, and placement shall be approved by Landlord, and subject to
any applicable governmental laws, ordinances, regulations, project
specifications, and other requirements. Sign on doors and entrances
to the Leased Premises, if approved by Landlord, shall be placed
thereon by a contractor approved by Landlord and paid for by Tenant.
Tenant shall remove all such signs at the termination of this lease.
Such installations and removals shall be made in such manner as to
avoid injury or defacement of the Project and other improvements, and
Tenant, at its sole expense, shall repair any injury or defacement,
including, without limitation, any discoloration caused by such
installation and/or removal.
** However, this warranty shall become null and void if Tenant does
not provide Landlord with evidence that it has entered into a
preventitive maintenance/service contract as described herein.
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11. USAGE: Tenant warrants and represents to Landlord that the
Leased Premises shall be used and occupied only for the purpose of
general office/sales/computer software company. Any change in the
stated usage purposes or in the scope or extent of such usage as
previously described to Landlord by Tenant shall be subject to the
prior written approval of Landlord. Tenant shall occupy the Leased
Premises, conduct its business and control its agents, employees,
invitees and visitors in a lawful and reputable way and as not to
create any nuisance or otherwise interfere with, annoy or disturb any
other tenant in its normal business operations or Landlord in its
management of the project. Tenant shall not commit, or allow to be
committed, any waste on the Leased Premises.
12. INSURANCE:
(a) Tenant shall not permit the Leased Premises to be used in
any way which would, in the opinion of Landlord, be hazardous or
which would in any way increase the cost of or render void the fire
insurance on improvements or contents in the Project belonging to
Landlord or other tenants. If at any time during the term of this
Lease the State Board of Insurance or other insurance authority
disallows any of Landlord's sprinkler credits or imposes an
additional penalty or surcharge in Landlord's insurance premiums
because of Tenant's original or subsequent placement or use of
storage racks or bins, method of storage, or nature of Tenant's
inventory or any other act of Tenant, Tenant agrees to pay as
additional rental the increase in Landlord's insurance premiums. If
an increase in the fire and extended coverage premiums paid by
Landlord for the Building in which Tenant occupies space is caused by
Tenant's use or occupancy of the Leased Premises; or if Tenant
vacates the Leased Premises and causes an increase, then Tenant shall
pay as additional rental the amount of such increase to Landlord.
(b) Tenant shall procure and maintain throughout the term of
this Lease a policy or policies of insurance, at its sole cost and
expense, insuring both Landlord and Tenant against all claim, demands
or actions arising out of or in connection with: (i) the Leased
Premises; (ii) the condition of the Leased Premises; (iii) Tenant's
operations in and maintenance and use of the Leased Premises; and
(iv) Tenant's liability assumed under this Lease. The limits of such
policy or policies shall be not less than one million dollars
($1,000,000) combined single limit coverage per occurrence for injury
to persons (including death) and/or property damage or destruction,
including loss of use. All such policies shall be procured by Tenant
from responsible insurance companies satisfactory to Landlord.
Certified copies of such policies, together with receipts for payment
of premiums, shall be delivered to Landlord prior to the Commencement
Date of this Lease. Not less than fifteen (15) days prior to the
expiration date of any such policies, certified copies of renewal
policies and evidence of the payment of renewal premiums shall be
delivered to Landlord. All such original and renewal policies shall
provide for at least thirty (30) days written notice to Landlord
before such policy may be cancelled or changed to reduce insurance
coverage provided thereby. Upon request of Landlord, Tenant further
agrees to complete and return to Landlord an insurance questionnaire
(such form to be provided by Landlord) regarding Tenant's insurance
coverage and intended use of the Leased Premises. Tenant warrants and
represents that all information contained in such questionnaire shall
be true and correct as of the date thereof and shall be updated by
Tenant from time to time upon Landlord's request.
13. RELOCATION: Upon request by Landlord during the term of this
Lease, Tenant agrees to relocate to other space in the Building
and/or Project designated by Landlord, provided such other space is
as large or larger than the Leased Premises and has at least the same
number of windows. Landlord shall pay all out-of-pocket expenses of
any such relocation, including the expenses of moving and
reconstructing all Tenant furnished and Landlord furnished
improvements. In the event of such relocation, this Lease shall
continue in full force and effect without any change in its terms
other than substitution of the new description of the Leased Premises
for the original description set forth in Paragraph 3 of this Lease.
14. COMPLIANCE WITH LAWS, RULES AND REGULATIONS: Tenant shall
comply with all applicable laws, ordinances, orders, rules and
regulations of state, federal, municipal, or other agencies or bodies
relating to the use, condition and occupancy of, and business
conducted on, the Leased Premises, including without limitation, the
Resource Conservation and Recovery Act, the Comprehensive
Environmental Response Act, and the rules, regulations and directives
of the U.S. Environmental Protection Agency. Tenant shall also comply
with the rules of the Project which may hereafter be adopted by
Landlord. Landlord shall have the right at all times to change the
rules and regulations of the Project or to amend them in any
reasonable manner as may be deemed advisable for the safety, care,
cleanliness, and good order of the Project and Leased Premises. All
rules and regulations of the Project and any changes or amendments
thereto will be sent by Landlord to Tenant in writing and shall
thereafter be carried out and observed by Tenant.
15. ASSIGNMENT AND SUBLETTING: The Tenant agrees not to assign,
transfer, or mortgage this Lease or any right or interest therein, or
sublet the Leased Premises or any part thereof, without the prior
written consent of Landlord.* No assignment or subletting made with
the consent of Landlord shall relieve Tenant of its obligations
hereunder, and Tenant shall continue to be liable as a principal (and
not as a guarantor or surety) to the same extent as though no
assignment or sublease had been made. Consent by Landlord to an
assignment or sublease shall not be construed to be consent to any
additional assignment or subletting. Each such successive act shall
require similar consent of Landlord. Landlord shall be reimbursed by
Tenant for any costs or expenses incurred as a result of Tenant's
request for consent to any such assignment or subletting. In the
event Tenant subleases the Leased Premises, or any portion thereof,
or assigns this Lease with the consent of the Landlord at an annual
Base Rental exceeding that stated herein, such excess shall be paid
by Tenant to Landlord as additional rental hereunder within ten (10)
days after receipt by Tenant. Upon the occurrence of an "event of
default" as defined below, if all or any part of the Leased Premises
are then assigned or sublet, Landlord may, in addition to any other
remedies provided by this Lease or provided by law, collect directly
from the assignee or subtenant all rents due to Tenant. Landlord
shall have a security interest in all properties on the Leased
Premises to secure payment of such sums. Any collection directly by
Landlord from the assignee or subtenant shall not be construed,
however, to constitute a novation or release of Tenant from the
further performance of its obligations under this Lease.
Notwithstanding the foregoing, it is expressly agreed that if this
Lease is assigned to any person or entity pursuant to the provisions
of the Bankruptcy Code, 11 U.S.C. Section 101 et esp. (the
"Bankruptcy Code"), any and all monies or other considerations
payable or otherwise to be delivered in connection with such
assignment shall be paid or delivered to Landlord, shall be and
remain the exclusive property of Landlord and shall not constitute
property of Tenant or of the estate of Tenant within the meaning of
the Bankruptcy Code. Any and all monies or other considerations
constituting Landlord's property under the preceding sentence not
paid or delivered to Landlord shall be held in trust for the benefit
of Landlord and be promptly paid or delivered to Landlord. Any person
or entity to which this Lease is assigned pursuant to the provisions
of the Bankruptcy Code shall be deemed without further act or deed to
have assumed all of the obligations arising under this Lease on and
after the date of such assignment. Any such assignee shall upon
demand execute and deliver to Landlord an instrument confirming such
assumption.
16. ALTERATIONS AND IMPROVEMENTS:
(a) Tenant shall not make or perform, or permit the making or
performance of, any initial or subsequent tenant finish work or any
alterations, installations, decorations, improvements, additions or
other physical changes in or about the Leased Premises (referred to
collectively as "Alterations") without Landlord's prior consent.
Landlord agrees not to withhold its consent unreasonably to any
nonstructural Alterations proposed
** Which consent shall not be unreasonably withheld.
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to be made by Tenant to adapt the Leased Premises for Tenant's
business purposes. Notwithstanding the foregoing provisions or
Landlord's consent to any Alterations, all Alterations shall be made
and performed in conformity with and subject to the following
provisions: All Alterations shall be made and performed at Tenant's
sole cost and expense and at such time and in such manner as Landlord
may from time to time reasonably designate. Alterations shall be made
only by contractors or mechanics approved by Landlord, such approval
not to be unreasonably withheld. No Alteration shall affect any part
of the Building other than the Leased Premises or adversely affect
any service required to be furnished by Landlord to Tenant or to any
other tenant or occupant of the Building or reduce the value of the
Building. No alteration shall affect the outside appearance of the
Building. Tenant shall submit to Landlord detailed plans and
specifications (including layout, architectural, mechanical and
structural drawings) for each proposed Alteration and shall not
commence any such Alteration without first obtaining Landlord's
written approval of such plans and specifications. Prior to the
commencement of each proposed Alteration, Tenant shall furnish to
Landlord duplicate original policies of worker's compensation
insurance covering all persons to be employed in connection with such
Alterations, including those to be employed by all contractors and
subcontractors and comprehensive public liability insurance
(including property damage coverage) in which Landlord, its agents,
and any lessor under any ground or underlying lease, and any
mortgagee of the Building shall be named as parties insured, which
policies shall be issued by companies, and shall be in form and
amounts, satisfactory to Landlord and shall be maintained by Tenant
until the completion of such Alteration. If Landlord shall require
Tenant to assure payment of all costs of such alterations, prior to
commencement of any approved Alteration, Tenant shall cause to be
issued and delivered to Landlord an irrevocable documentary letter of
credit or payment bond in the full amount of the cost of the said
approved Alterations issued by a substantial banking institution
reasonably acceptable to Landlord payable in whole or in part, from
time to time to the order of Landlord upon written demand accompanied
by Landlord's certification that Tenant has defaulted with respect to
the obligation secured thereby. The term of the letter of credit
shall be from date of issuance through ninety (90) days after
completion of construction of the approved Alterations. Tenant shall
cause its contractor to provide Landlord with a certificate of
completion of the Alterations and a bills paid affidavit and full
lien waiver; and upon receipt of same, and no fewer than thirty-one
(31) days following completion if Tenant is not in default hereunder,
Landlord shall return the letter of credit to Tenant unused and
endorsed for cancellation. Tenant shall, if requested by Landlord at
the time of Landlord's consent to the Alterations, agree to restore
the Leased Premises at the termination of this Lease to their
condition prior to making such Alterations. All permits, approvals
and certificates required by all governmental authorities shall be
timely obtained by Tenant and submitted to Landlord. Notwithstanding
Landlord's approval of plans and specifications for any Alterations,
all Alterations shall be made and performed in full compliance with
applicable laws, orders and regulations of Federal, State, County,
and Municipal authorities and with all directions, pursuant to law,
of all public officers, and with all applicable rules, orders,
regulations and requirements of the Dallas Board of Fire Underwriters
or any similar body. All alterations shall be made and performed in
accordance with the Building rules. All materials and equipment to be
incorporated in the Leased Premises as a result of all Alterations
shall be new and first quality. No such materials or equipment shall
be subject to any lien, encumbrance, chattel mortgage or title
retention or security agreement. If such Alterations are being
performed by Tenant in connection with Tenant's initial occupancy of
the Leased Premises, Tenant agrees to make proper application for,
and obtain, a certificate of occupancy from the city in which the
Leased Premises are located. Tenant shall furnish such certificate to
Landlord promptly after issuance of same.
(b) Tenant shall not at any time prior to or during the term of
this Lease, directly or indirectly employ or permit the employment
of, any contractor, mechanic, or laborer in the Leased Premises,
whether in connection with any Alteration or otherwise, if such
employment will interfere or cause any conflict with other
contractors, mechanics, or laborers engaged in the construction,
maintenance or operation of the Building by Landlord, Tenant, or
other. In the event of any such interference or conflict. Tenant,
upon demand of Landlord, shall cause all contractors, mechanics, or
laborers causing such interference or conflict to leave the Building
immediately.
(c) All appurtenances, fixtures, improvements, and other
property attached to or installed in the Leased Premises, whether by
Landlord or Tenant or others, and whether at Landlord's expense or
Tenant's expense, or the joint expense of Landlord and Tenant, shall
be and remain the property of Landlord, except that any such
fixtures, improvements, additions, and other property which have been
installed at the sole expense of Tenant and which are removable
without material damage to the Leased Premises shall be and remain
the property of Tenant. At Landlord's option, Tenant shall remove any
property belonging to Tenant at the end of the term hereof, and
Tenant shall repair or, at Landlord's option, shall pay to Landlord
the cost of repairing any damage arising from such removal. Any
replacements of any property of Landlord, whether made at Tenant's
expense or otherwise, shall be and remain the property of Landlord.
17. CONDEMNATION:
(a) If, during the term (or any extension or renewal) of this
Lease, all or a substantial part of the Leased Premises are taken for
any public or quasi-public use under any governmental law, ordinance
or regulation, or by right of eminent domain or by private purchase
in lieu thereof, and the taking would prevent or materially interfere
with the then current use of the Leased Premises, this Lease shall
terminate and the Rent shall be abated during the unexpired portion
of this Lease effective on the date physical possession is taken by
the condemning authority.
(b) If a portion of the Leased Premises is taken as described
above and this Lease is not terminated as provided in subparagraph
(a) above, the Rent payable under this Lease during the unexpired
portion of the term shall be adjusted to such an extent as may be
fair and reasonable under the circumstances.
(c) In the event of such taking or private purchase in lieu
thereof, Landlord and Tenant shall each be entitled to receive any
sums separately awarded to each party by the condemning authority. In
the event separate awards to Landlord and Tenant are not made,
Landlord shall be entitled to receive any and all sums by the
condemning authority.
18. FIRE AND CASUALTY:
(a) If the Building should be damaged or destroyed by fire,
tornado, or other casualty, Tenant shall give immediate written
notice thereof to Landlord.
(b) If the Building should be totally destroyed by fire,
tornado, or other casualty, or if it should be so damaged thereby
that rebuilding or repairs cannot in Landlord's estimation be
completed within one hundred eighty (180) days after the date on
which Landlord is notified by Tenant of such damage, this Lease shall
terminate and the Rent shall be abated during the unexpired portion
of this Lease, effective upon the date of occurrence of such damage.
(c) If the Building should be damaged by any peril covered by
the insurance maintained by Landlord, but only to such extent that
rebuilding or repairs can in Landlord's estimation be completed
within one hundred twenty (120) days after the date on which Landlord
is notified by Tenant of such damage, this Lease shall not terminate
and Landlord shall, to the extent of insurance proceeds received,
then proceed with reasonable diligence to rebuild and repair the
Building to substantially the same condition in which it existed
prior to such damage. Landlord shall not be required, however, to
rebuild, repair, or replace any part of the partitions, fixtures,
additions, and other improvements which may have been placed in, on,
or about the Lease
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Premises by Tenant. If the Leased Premises are untenantable in whole
or in part following such damage, the Rent payable hereunder during
the period in which they are untenantable shall be reduced to such
extent as may be fair and reasonable under all of the circumstances.
If Landlord should fail to complete such repairs and rebuilding
within one hundred twenty (120) days after the date on which Landlord
is notified by Tenant of such damage, Tenant may terminate this Lease
by delivering written notice of termination to Landlord. Such
termination shall be Tenant's exclusive remedy and all rights and
obligations of the parties under this Lease shall then cease.
Notwithstanding the foregoing provisions of this subparagraph (c),
Tenant agrees that if the Leased Premises, the Building and/or
Project are damaged by fire or other casualty caused by the fault or
negligence of Tenant or Tenant's agents, employees or invitees,
Tenant shall have no option to terminate this Lease, even if the
damage cannot be repaired within one hundred twenty (120) days, and
the Rent shall not be abated or reduced before or during the repair
period.
(d) Notwithstanding anything herein to the contrary, if the
holder of any indebtedness secured by a mortgage or deed of trust
covering the Building and/or Project requires that the insurance
proceeds be applied to such indebtedness, then Landlord shall have
the right to terminate this Lease by delivering written notice of
termination to Tenant within fifteen (15) days after such requirement
is made. All rights and obligations under this Lease shall then
cease.
19. CASUALTY INSURANCE: Landlord shall at all times during the term
of this Lease maintain a policy or policies of insurance with the
premiums paid in advance, issued by and binding upon some solvent
insurance company, insuring the Building against loss or damage by
fire, explosion, or other hazards and contingencies. Landlord shall
not be obligated, however, to insure any personal property
(including, but not limited to any furniture machinery goods or
supplies) of Tenant or which Tenant may have in the Leased Premises
or any fixtures installed by or paid for by Tenant upon or within the
Leased Premises or any improvements which Tenant may construct or
install on the Leased Premises or any signs identifying Tenant's
business located on the exterior of the Building.
20. WAIVER OF SUBROGATION: To the extent that Landlord or Tenant
receives casualty insurance proceeds, such recipient hereby waives
and releases any and all rights, claims, demands and causes of action
such recipient may have against the other on account of any loss or
damage occasioned to such recipient or its businesses real and
personal properties, the Leased Premises, the Building, the Project,
or its contents arising from any risk or peril covered by any
insurance policy carried by either party. Inasmuch as the above
mutual waivers will preclude the assignment of any such claim by way
of subrogation (or otherwise) to an insurance company (or any other
person), each party hereto hereby agrees immediately to give to its
respective insurance companies written notice of the terms of such
mutual waivers and to have their respective insurance policies
properly endorsed, if necessary, to prevent the invalidation of such
insurance coverages by reason of such waivers. This provision shall
be cumulative of Paragraph 21 below.
21. HOLD HARMLESS: Landlord shall not be liable to Tenant, Tenant's
employees, agents, invitees, licensees or visitors, or to any other
person, for any injury to person or damage to property on or about
the Leased Premises or the Project caused by the negligence or
misconduct of Tenant, its agents, employees, invitees, or of any
other persons entering upon the Leased Premises or the Project under
express or implied invitation by Tenant. Tenant agrees to indemnify
and hold Landlord harmless from any and all loss, attorney's fees,
expenses, or claims arising out of any such damage or injury.
22. QUIET ENJOYMENT: Landlord warrants that it has full right to
execute and to perform this Lease and to grant the estate demised and
that Tenant, upon payment of the required Rent and performing the
covenants and agreements contained in this Lease, shall peaceably and
quietly have, hold, and enjoy the Leased Premises during the full
term of this Lease, including any extensions or renewals thereof.
23. LANDLORD'S RIGHT OF ENTRY: Landlord shall have the right, at
all reasonable hours, to enter the Leased Premises for the following
reasons: Inspection, cleaning or making repairs, making such
alterations or additions as Landlord may deem necessary or desirable;
installation of utility lines servicing the Leased Premises or any
other space in the Building; determining Tenant's use of the Leased
Premises, or for determining if any act of default under this Lease
has occurred. Landlord shall give twenty-four (24) hours written
notice to Tenant prior to such entry, except in cases of emergency
when Landlord may enter the Leased Premises at any time and without
prior notice. During the period that is six (6) months prior to the
end of the Lease term, Landlord and Landlord's agents and
representatives shall have the right to enter the Leased Premises at
any reasonable time during business hours, without notice, for the
purpose of showing the Leased Premises and shall have the right to
erect on the Leased Premises a suitable sign indicating the Leased
Premises are available for lease. Tenant shall give written notice to
Landlord at least thirty (30) days prior to vacating the Leased
Premises and shall arrange to meet with Landlord for a joint
inspection of the Leased Premises prior to vacating. In the event of
Tenant's failure to give such notice or arrange such joint
inspection, Landlord's inspection at or after Tenant's vacating the
Leased Premises shall be conclusively deemed correct for purposes of
determining Tenant's responsibility for repairs and restoration.
24. ASSIGNMENT OF LANDLORD'S INTEREST IN LEASE: Landlord shall have
the right to transfer and assign, in whole or in part, its rights and
obligations with respect to the Project and premises that are the
subject of this Lease, including Tenant's security deposit. In such
event, Landlord shall be released from any further obligation under
this Lease and Tenant agrees to look solely to Landlord's successor
for the performance of such obligations.
25. [OMITTED]
26. DEFAULT BY TENANT: The following shall be events of default by
Tenant under this Lease:
(a) Tenant shall fail to pay when due any installment of Rent or
other payment required pursuant to this Lease;
(b) [OMMITTED]
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(c) Tenant shall fail to comply with any term, provision or
covenant of this Lease, other than the defaults listed in this
paragraph 26, and the failure is not cured within ten (10) days after
written notice thereof to Tenant;
(d) Tenant shall file a petition or be adjudged a debtor or
bankrupt or insolvent under the National Bankruptcy Code, as amended,
or any similar law or statute of the United States or any state; or a
receiver or trustee shall be appointed for all or substantially all
of the assets of Tenant; or Tenant shall make a transfer in fraud of
creditors or shall make an assignment for the benefit of creditors;
(e) Tenant shall do or permit to be done any act which results
in a lien being filed against the Leased Premises.
27. REMEDIES FOR TENANT'S DEFAULT: Upon the occurrence of any event of
default set forth in this Lease, Landlord shall have the option to pursue
any one or more of the following remedies without any prior notice or
demand;
(a) Landlord may terminate this Lease, in which event Tenant
shall immediately surrender the Leased Premises to Landlord, and if
Tenant fails to do so, Landlord may, without prejudice to any other
remedy which it may have, enter upon and take possession of the
Leased Premises, and expel or remove Tenant and any other person who
may be occupying all or any part of the Leased Premises. Landlord
shall not be liable for prosecution or any claim for damages as a
result of such actions. Tenant agrees to pay on demand the amount of
all losses, costs, expenses, deficiencies, and damages, including,
without limitation, reconfiguration expenses, rental concessions and
other inducements to new tenants, advertising expenses and broker's
commissions, which Landlord may incur or suffer by reason of Tenant's
default or the termination of the Lease under this subparagraph,
whether through inability to relet the Leased Premises on
satisfactory terms or otherwise. Tenant acknowledges that its
obligation to pay Base Rent and all additional Rent hereunder is not
only compensation for use of the Leased Premises but also
compensation for sums already expended and/or being expended by
Landlord with respect to its obligations hereunder and with respect
to the Leased Premises, and Tenant acknowledges that Tenant's default
in timely payment of all sums due hereunder shall constitute
significant financial loss to Landlord. Tenant further acknowledges
that any failure to pay any sum due hereunder shall evidence Tenant's
inability to meet its debts as they become due. In such event, in
addition to Landlord's other remedies hereunder, Landlord shall be
entitled to accelerate all Base Rental remaining unpaid hereunder,
the entirety of which shall, at the option of Landlord be immediately
due and payable.
(b) Landlord may enter upon and take possession of the Leased
Premises and expel or remove Tenant and any other person who may be
occupying all or any part of the Leased Premises (without being
liable for prosecution or any claim for damages therefor) and relet
the Leased Premises on behalf of Tenant and receive directly the rent
of the reletting. Tenant agrees to pay Landlord on demand any
deficiency that may arise by reason of any reletting of the Leased
Premises and to reimburse Landlord on demand for any losses, costs,
and expenses, including without limitation, reconfiguration expenses,
rental concessions and other inducements to new tenants, advertising
costs or broker's commissions, which Landlord may incur or suffer as
a result of Tenant's default or in reletting the Leased Premises.
Tenant further agrees to reimburse Landlord for any expenditures made
by it for remodeling or repairs necessary in order to relet the
Leased Premises. In the event Landlord is successful in reletting the
Leased Premises at a rental in excess of that agreed to be paid by
Tenant pursuant to this Lease, Landlord and Tenant agree that Tenant
shall not be entitled, under any circumstances, to such excess
rental, and Tenant does hereby specifically waive any claim to such
excess rental.
(c) Landlord may enter upon the Leased Premises (without being
liable for prosecution or any claim for damages therefor) and do
whatever Tenant is obligated to do under the terms of this Lease.
Tenant agrees to reimburse Landlord on demand for any losses, costs
and expenses which Landlord may incur in effecting compliance with
Tenant's obligations under this Lease. Tenant further agrees that
Landlord shall not be liable for any damages resulting to Tenant from
effecting compliance with Tenant's obligations under this
subparagraph, whether caused by the negligence of Landlord or
otherwise.
(d) Landlord may pursue any remedy provided at law or in equity.
(e) Landlord shall have no duty to relet the Premises, and the
failure of Landlord to do so shall not release or affect Tenant's
liability for Rentals and other charges due hereunder or for damages.
(f) No re-entry or reletting of the Premises or any filing or
service of an unlawful detainer action or similar action shall be
construed as an election by Landlord to terminate Tenant's right to
possession under this Lease unless a written notice of such intention
is given by Landlord to Tenant. Notwithstanding any such reletting
without termination. Landlord may at any time thereafter elect to
terminate this Lease and Tenant's right to possession hereunder.
28. TERMINATION OF OPTIONS: If there exist any options or special rights
which Landlord may have granted Tenant under this Lease including, but not
limited to, options or rights regarding extensions of the Lease term,
expansion of the Leased Premises, or acquisition of any other interest in
the Leased Premises or the Building, then all such options and rights are
independent of the leasehold estate hereby granted to Tenant by Landlord.
Landlord and Tenant agree and acknowledge that the negotiated consideration
for any such options or special rights is Tenant's entry into this Lease and
that no portion of any sums due and payable by Tenant to Landlord hereunder
is attributable thereto. In addition to, and not in lieu of, the above
remedies of Landlord for Tenant's default, any and all such options or
special rights shall be automatically terminated upon the occurrence of the
following events:
(a) Tenant shall have failed to pay when due any installment of
Rent or other sums payable under this Lease for any three (3)
consecutive months during the Lease term or any renewal or extension
thereof, or for any five (5) months during the Lease term or any
renewal or extension thereof, unless said defaults are cured by
Tenant; or
(b) Tenant shall have received two (2) or more notices of
default under Paragraph 26(c) above with respect to any other
covenant of this Lease, unless such default(s) is/are cured; or
(c) Tenant shall have committed or suffered to exist any other
event of default described under Paragraph 26 above, unless such
default is cured by Tenant.
29. WAIVER OF DEFAULT OR REMEDY: Failure of Landlord to declare a default
immediately upon its occurrence, or delay in taking any action in
connection with an event of default, shall not be waiver of the
default. Landlord shall have the right to declare the default at any
time and take such action as is lawful or authorized under this
Lease. Pursuit of any one or more of the remedies set forth in
Paragraphs 27 or 28 above shall not preclude pursuit of any one or
more of the other remedies provided therein or elsewhere in this
Lease provided by law, nor shall pursuit of any remedy be a
forfeiture or waiver of any Rent or damages accruing to Landlord by
reason of the violation of any of the terms of this Lease. Failure by
Landlord to enforce one
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or more of its remedies upon an event of default shall not be
construed as a waiver of the default or of any other violation or
breach of any of the terms contained In this Lease.
30. ATTORNEY'S FEES: In the event any litigation arises hereunder,
it is specifically stipulated that this Lease shall be interpreted
and construed according to the laws of the State in which the Leased
Premises are located. Further, the prevailing party in any such
litigation between the parties shall be entitled to recover, as a
part of its judgement, reasonable attorney's fees.
31. HOLDING OVER: Tenant will, at the termination of this Lease by
lapse of time or otherwise, surrender immediate possession to
Landlord. If Landlord agrees in writing that Tenant may hold over
after the expiration or termination of this Lease and if the parties
do not otherwise agree, the hold over tenancy shall be subject to
termination by Landlord at any time upon not less than five (5) days
advance written notice, or by Tenant at any time upon not less than
thirty (30) days advance written notice. Further, all of the terms
and provisions of this Lease shall be applicable during the hold over
period, except that Tenant shall pay Landlord from time to time upon
demand, as Base Rent for the period of any hold over, an amount equal
to one and one-half times (1-1/2) the Base Rent in effect on the
termination date, computed on a daily basis for each day of the hold
over period, plus all additional rental and other sums due hereunder.
If Tenant shall fail immediately to surrender possession of the
Leased Premises to Landlord upon termination of this Lease, by lapse
of time or otherwise, and Landlord has not agreed to such continued
possession as above provided, then, until Landlord can dispossess
Tenant under the terms hereof or otherwise, Tenant shall pay Landlord
from time to time upon demand, as Base Rent for the period of any
such holdover, an amount equal to twice the Base Rent in effect on
the termination date, computed on a daily basis for each day of the
hold over period, plus all additional rental and other sums due
hereunder. No holding over by Tenant, whether with or without consent
of Landlord, shall operate to extend this Lease except as otherwise
expressly agreed by the parties. The preceding provisions of this
Paragraph shall not be construed as Landlord's consent for Tenant to
hold over.
32. RIGHTS OF MORTGAGEE: Tenant accepts this Lease subject and
subordinate to any recorded mortgage, deed of trust or other lien
presently existing or hereafter to exist with respect to the Leased
Premises. Landlord is hereby irrevocably vested with full power and
authority to subordinate Tenant's interest under this Lease to any
mortgage, deed of trust or other lien hereafter placed on the Leased
Premises, and Tenant agrees upon demand to execute such additional
instruments subordinating this Lease as Landlord or the holder of any
such mortgage, deed of trust, or lien my require. If the interests of
Landlord under this Lease shall be transferred by reason of
foreclosure or other proceedings for enforcement of any mortgage on
the Leased Premises. Tenant shall be bound to the transferee
(sometimes called the "Purchaser") under the terms and conditions of
this lease for the balance of the remaining Lease term, including any
extensions or renewals, with the same force and effect as if the
Purchaser were Landlord under this Lease. Tenant further agrees to
attorn to the Purchaser, including the mortgagee under any such
mortgage if it be the Purchaser, as its Landlord. Such attornment
shall be effective without the execution of any further instruments
upon the Purchaser succeeding to the interest of Landlord under this
Lease. The respective rights and obligations of Tenant and the
Purchaser upon the attornment, to the extent of the then remaining
balance of the term of this Lease, and any extensions and renewals,
shall be and are the same as those set forth in this Lease. Each such
holder of any mortgage, deed of trust, or lien, and each such
Purchaser, shall be a third-party beneficiary of the provisions of
this Paragraph.
33. ESTOPPEL CERTIFICATES: Tenant agrees to furnish within ten (10)
days, from time to time, upon request of Landlord or Landlord's
mortgagee, a statement certifying that Tenant is in possession of the
Leased Premises; the Leased Premises are acceptable; the Lease is in
full force and effect; the Lease is unmodified; Tenant claims no
present charge, lien, or claim of offset against Rent; the Rent is
paid for the current month, but is not paid and will not be paid for
more than one month in advance; there is no existing default by
reason of some act or omission by Landlord; and such other matters as
may be reasonably required by Landlord or Landlord's mortgagee.
34. SUCCESSORS: This Lease shall be binding upon and inure to the
benefit of Landlord and Tenant and their respective heirs, personal
representatives, successors and assigns. It is hereby covenanted and
agreed that should Landlord's interest in the Leased Premises cease
to exist for any reason during the term of the Lease, then
notwithstanding the happening of such event this Lease shall
nevertheless remain unimpaired and in full force and effect and
Tenant hereunder agrees to attorn to the then owner of the Leased
Premises.
35. REAL ESTATE COMMISSION: Tenant represents and warrants that it
has dealt with no broker, agent, or other person in connection with
this transaction and that no other broker, agent, or other person
brought about this transaction other then Dillon Corporate Services
and JSC Realty Services. Inc.; and Tenant agrees to indemnify and
hold Landlord harmless from and against any claims by any other
broker, agent, or other person claiming a commission or other form of
compensation by virtue of having dealt with Tenant with regard to
this leasing transaction. The provisions of this paragraph shall
survive the termination of this Lease.
36. EXPANSION: If during the term of this Lease, Tenant occupies,
under a new written Lease with Landlord, space of a size
substantially larger than the present Leased Premises within any
development owned by Landlord, this Lease shall be terminated upon
execution of the Lease for such substitute space. Notwithstanding the
above-stated, Tenant &hall remain obligated to pay for any Rents or
other sums due Landlord as a result of Tenant's tenancy hereunder,
and such obligation shall survive the termination of this Lease
pursuant to this Paragraph 36.
37. MECHANIC'S LIENS: Tenant shall have no authority, express or
implied, to create or place any lien or encumbrance of any kind or
nature whatsoever upon, or in any manner to bind, the interest of
Landlord in the Leased Premises or to charge the Rentals payable
hereunder for any claim in favor of any person dealing with Tenant,
including those who may furnish materials or perform labor for any
construction or repairs. Each such claim shall affect and each such
lien shall attach to, If at all, only the Leasehold interest granted
to Tenant by this Lease. Tenant covenants and agrees that it will pay
or cause to be paid all sums legally due and payable by it on account
of any labor performed or materials furnished in connection with any
work performed on the Leased Premises on which any lien is or can be
validly and legally asserted against its leasehold interest in the
Leased Premises or the Improvements thereon. Tenant further agrees to
save and hold Landlord harmless from any and all loss, cost, or
expense based on or arising out of asserted claims or liens against
the leasehold estate or against the right, title and interest of the
Landlord In the Leased Premises or under the terms of this Lease.
Under no circumstances shall Tenant be or hold itself out to be the
agent or representative of Landlord with respect to any alteration of
the Leased Premises whether or not consented to or approved by
Landlord hereunder.
38. ENTIRE AGREEMENT, AND LIMITATION OF WARRANTIES: It Is expressly
agreed by Tenant, as a material consideration for the execution of
this Lease, that this Lease is the entire agreement of the parties
and that there are and were no verbal representations, warranties,
understandings, stipulations, agreements, or promises pertaining to
this Lease not incorporated in this Lease. Landlord and Tenant
expressly agree that there are and shall be no implied warranties of
merchantability or fitness or of any other kind arising out of this
Lease and that Tenant's acceptance of the Leased Premises shall be
"as is". it Is likewise
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agreed that this Lease may not be altered, waived, amended, or
extended except by an instrument in writing signed by both Landlord
and Tenant. Not in limitation upon the foregoing, Landlord agrees
that to the extent assignable, all warranties, if any shall exist,
from contractors or suppliers with respect to the improvements to the
Leased Premises hereunder are hereby assigned to Tenant.
39. MISCELLANEOUS:
(a) Words of any gender used in this Lease shall be held and
construed to include any other gender; and words in the singular
number shall be held to include the plural, unless the context
otherwise requires.
(b) Each party agrees to furnish to the other, promptly upon
demand, a corporate resolution, proof of due authorization by
partners, or other appropriate documentation evidencing the due
authorization and power of such party to enter into this Lease.
(c) The captions inserted in this Lease are for convenience
only and in no way define, limit, or otherwise describe the scope or
intent of this Lease or any provision hereof, or in any way affect
the interpretation of this Lease.
(d) If any clause or provision of this Lease is illegal,
invalid, or unenforceable under present or future laws effective
during the term of this Lease, then and in that event, it is the
intention of the parties hereto that the remainder of this Lease
shall not be affected thereby; and it is also the intention of the
parties to this Lease that in lieu of each clause or provision of
this Lease that is illegal, invalid, or unenforceable there be added
as a part of this Lease a clause as similar in terms to such illegal,
invalid, or unenforceable clause or provision as may be possible and
be legal, valid, and enforceable.
(e) Because the Leased Premises are on the open market and are
presently being shown, this Lease shall be treated as an offer to
lease only. Unless and until this Lease is accepted by Landlord and
Tenant in writing and a fully executed copy delivered to both
parties, this offer is subject to withdrawal or non-acceptance by
Landlord and the Leased Premises may be leased to another party or
used for another purpose by Landlord without notice.
(f) All references in this Lease to "the date hereof" or
similar references shall be deemed to refer to the last date, in
point of time, on which all parties hereto have executed this Lease.
(g) If the Commencement Date shall be determined under
Paragraphs 4(b) or (c) of this Lease, Landlord and Tenant shall enter
into an agreement in recordable form setting forth the Commencement
Date and Termination Date of the Lease term.
(h) In the event that Tenant shall fail to perform any duty
or obligation hereunder, whether maintenance, repair or
replacement of the Leased Premises, maintenance of insurance, or
otherwise, then Landlord may, but shall in no event be obligated to,
without notice of any kind, take such actions as Landlord deems
necessary or appropriate to remedy such Tenant failure, and any sums
expended by Landlord and fair and just compensation for the time
and effort of Landlord shall be deemed additional Rental hereunder
due and payable by Tenant on demand.
(i) If Tenant shall fail to pay, when the same is due and
payable, any Rent, any additional Rent, or any other sum due
hereunder, such unpaid amount shall bear interest from the due date
thereof to the date of payment at the highest non-usurious rate
permitted by applicable law.
(j) Landlord does not in any way or for any purpose become a
partner of Tenant in the conduct of its business or otherwise, nor a
member of a joint venture with Tenant.
(k) Tenant shall not record this Lease without the prior
written consent of Landlord. However, upon the request of either
party hereto, the other party shall join in the execution of a
memorandum or so-called "short form" of this Lease for the purposes
of recordation.
(l) Time is of the essence in the performance of all the
covenants, conditions, and agreements contained in this Lease.
(m) Any duty, obligation, or debt and any right or remedy
arising hereunder and not otherwise consummated and/or extinguished
by the express terms hereof at or as of the time of termination of
this Lease, whether at the end of the term hereof or otherwise, shall
survive such termination as continuing duties, obligations, and debts
of the obligated party to the other or continuing rights and remedies
of the benefitted party against the other.
(n) This Agreement may be executed in one or more counterparts,
each of which counterparts shall for all purposes be deemed to be an
original; but all such counterparts together shall constitute but one
instrument.
(o) Attached hereto, marked Exhibit "A" through Exhibit "D",
are certain exhibits to this Lease all (of which are hereby
incorporated herein by reference.
(p) Tenant shall be allowed early occupancy of the Leased
Premises upon substantial completion of the Leasehold improvements as
described in Exhibit "B" and Tenant obtaining a Certificate of
Occupancy from the City of Farmers Branch. All terms and conditions
of the Lease shall be in full force and effect upon Tenant taking
occupancy with the exception of Base rent. Base Rent shall begin on
the Commencement Date as stated in Paragraph 4.
40. NOTICE:
(a) All Rent and other payments required to be made by Tenant
shall be payable to Landlord at the address set forth below or any
other address Landlord may specify from time to time by written
notice delivered to Tenant.
(b) All payments, if any, required to be made by Landlord to
Tenant shall be payable to Tenant at the address set forth below or
at any other address within the United States as Tenant may specify
from time to time by written notice.
(c) Any notice or document required or permitted to be
delivered by this Lease shall be deemed to be delivered (whether or
not actually received) when deposited in the United States Mail,
postage prepaid, certified mail, or return receipt requested,
addressed to the parties at the respective addresses set out below or
such other address as hereinafter specified by notice given in
accordance with this paragraph.
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LANDLORD: TENANT:
TDC Dallas Partners No. 2, Ltd. One Up Corporation
621 Via Alondra 12801 Stemmons Freeway, Suite 710
Camarillo, CA 93012 Farmers Branch, TX 75234
EXECUTED by Landlord and Tenant on the date below stated as their respective
Dates of Execution.
LANDLORD: TENANT:
TDC Dallas Partners No. 2, Ltd. One Up Corporation
By: /s/ MARK M. ANDERSON By: /s/ H. WAYNE SANDERSON
------------------------- -----------------------------
Mark M. Anderson H. Wayne Sanderson
Its: Vice President Its: Director/Administrator
------------------------- -----------------------------
TOLD Corporations
General Partner
Date: 4/4/97 Date: 4/3/97
------------------------ ----------------------------
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EXHIBIT "A"
LEGAL DESCRIPTION
PROPERTY
BEING a tract of land situated in the Thomas Keenan Survey, Abstract
No. 733, in Dallas County, Texas and also being part of Block 2 of Valley
View Addition, Fourth Installment, and Addition to the City of Farmers
Branch as recorded in Volume 74187, Page 0415 of Deed Records of Dallas
County, Texas, and being more particularly described as follows:
BEGINNING at an iron pin for corner at the intersection of the North line
of Springlake Road (a 60 foot Right-of-way); with the West line of
Interstate Highway 35-E (a variable width Right-of-way);
THENCE North 89 degrees, 48 minutes and 00 seconds West, 320.12 feet along
the said North line of Springlake Road to an iron pin for corner;
THENCE North 0 degrees, 30 minutes and 00 seconds East, 140.00 feet to an
iron pin for corner;
THENCE North 89 degrees, 48 minutes and 00 seconds West, 75.00 feet to an
iron pin for corner;
THENCE North 9 degrees, 58 minutes and 46 seconds West, 313.81 feet to an
iron pin for corner;
THENCE North 71 degrees, 46 minutes and 00 seconds East, 549.80 feet to an
iron pin for corner on the said West line of Interstate Highway 35-E, said
point also being in a curve to the right running in a Southerly direction
and having a central angle, of 6 degrees, 30 minutes and 10 seconds a
radius of 937.93 feet and a tangent bearing South 0 degrees, 49 minutes and
15 seconds West;
THENCE along said curve, and said West line of Interstate Highway 35-E,
106.45 feet to an iron pin for corner;
THENCE South 7 degrees, 19 minutes and 25 seconds West, 520.58 feet
continuing along the said West line of Interstate Highway 35-E to the POINT
OF BEGINNING AND CONTAINING 5.327 acres (232,026 square feet) of land.
Also known as Valley View Tech Center, III, a Resubdivision of Part of
Block 2 Valley View Place Addition Fourth Installment, An addition to
Farmers Branch, Texas recorded in Volume 84192, Page 73, amended in
Volume 84226, Page 2921, Map Records, Dallas County, Texas.
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EXHIBIT "B"
LEASEHOLD IMPROVEMENTS
1. There are no leasehold improvements to be provided by the Landlord. Tenant
accepts the Leased Premises on an "as is" "where is" basis.
2. Tenant is responsible for making application for a Certificate of Occupancy
for the premises and paying all fees associated with such application.
[MAP]
[BLUEPRINT]
No warranty or representative, expressed or implied, is made as to the
accuracy of information contained herein and same is submitted subject to
errors, omissions, change of price or other conditions, or withdrawal
without notice. Dimensions shown on drawing are approximate. Purchaser
should verify measurements if and where room dimensions are critical.
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EXHIBIT "C"
RULES AND REGULATIONS
The following Rules and Regulations are prescribed by Landlord in
order to provide and maintain, to the best of Landlord's ability, orderly,
clean and desirable Leased Premises, building and parking facilities for the
tenants therein and to regulate conduct in and use of Leased Premises, the
building and parking facilities in such a manner as to minimize interference by
others in the proper use of Leased Premises by Tenant. In the following Rules
and Regulations, all references to Tenant include not only the Tenant, but,
also, Tenant's agents, servants, employees, invitees, licensees, visitors,
assignees, and/or sublessees:
1. Tenant shall not block or obstruct any of the entries, passages, doors,
hallways, or stairways of building or parking area, or place, empty, or throw
any rubbish, litter, trash, or material of any nature into such areas, or
permit such areas to be used at any time except for ingress or egress of
Tenants.
2. Lardlord will not be responsible for lost or stolen personal property,
equipment, money, or any article taken from the Leased Premises, building, or
parking facilities regardless of how or when loss occurs.
3. The plumbing facilities shall not be used for any other purpose than that
for which they are constructed, and no foreign substance of any kind shall be
placed therein, and the expense of any breakage, stoppage, or damage resulting
from a violation of this provision shall be borne by Tenant.
4. Tenant shall permit Landlord, during the six (6) months prior to the
termination of this lease to show Leased Premises during business or
non-business hours to prospective lessees and to advertise Leased Premises for
rent.
5. Any additional keys required by Tenant during the term of this lease shall
be requested from Landlord and shall be paid for by Tenant upon delivery of
keys to premises. In the event new locks are requested by Tenant, then all
costs associated with such request (including hardware, installation and keys)
shall be paid by Tenant.
6. The common parking facilities are available for use by any and all Tenants.
Landlord reserves the right to assign or allocate parking in the event of
conflicts, abuse or improper use of these common parking facilities. It is
generally understood that any Tenant should utilize only those parking spaces
immediately adjacent to that Tenant's specific Leased Premises. Tenant
acknowledges that its pro rata share of the parking during normal business
hours is 40 parking spaces (twenty six (26) parking spaces in the front of the
Leased Premises and fourteen (14) parking spaces in the rear of the Leased
Premises) Tenant agrees not to violate it's pro rata share of the parking.
Proper use of the common parking facilities is deemed to be that use which
is occasioned by the normal in and out traffic required by the Tenant, in the
normal course of the Tenant's business operations.
Vehicles that are abandoned, disabled, have expired registration stickers,
obstructing any means of ingress or egress to any Leased Premises, or in any
way a general nuisance or hazard are subject to removal, without notice by
Landlord's designated wrecker and towing service. All costs associated with
such removal shall be at the Tenant's/Vehicle Owner's expense.
7. Tenant shall not use the building, Leased Premises, or parking
facilities for housing, lodging, or sleeping purposes without express consent
of Landlord in writing.
8. No birds or animals shall be brought into or kept in or about the
Premises or any other part of the Building.
9. No sign, placard, picture, advertisement, name or notice shall be
inscribed, displayed or printed or affixed on or to any part of the outside of
the Building without the written consent of Landlord. Landlord shall have the
right to remove any such sign, placard, picture, advertisement, name or notice
without notice to, and at the expense of Tenant.
Tenant shall not place anything, or allow anything to be placed, near the
glass of any window, door, partition, or wall which may appear unsightly from
outside the Leased Premises; Tenant shall not, without prior written consent of
Landlord, cause or otherwise sunscreen any window.
10. Tenant shall not use or keep in the Leased Premises or in the Building,
any kerosene, gasoline or inflammable or combustible fluid or material, or
use any method of heating or air conditioning other than that supplied by
Landlord.
11. Tenant shall not use, keep or permit to be used or kept, any foul or
noxious gas or substance in the Leased Premises, or permit or suffer the
Leased Premises to be occupied or used in a manner offensive or
objectionable to the Landlord or other occupant of the Building by reason of
notice, odors, and/or vibrations, or interfere in any way with other tenants
or those having business therein, nor shall any animals or birds brought in
or kept in or about the Leased Premises or the Building.
12. The following acts shall not be allowed or suffered to be done or conditions
to exist upon the Leased Premises or any part thereof:
a. Any violation of any federal, state, or municipal statute or ordinance
or any regulation, order, or directive, of a governmental agency, as
such statutes, ordinances, regulation, orders, or directives now exist
or may hereafter provide, concerning the use and safety of the Leased
Premises.
b. Any violation of any certificate of occupancy covering or affecting the
use of the Leased Premises or any part hereof.
c. Any public or private nuisance.
d. The display or distribution of drug paraphernalia, or sexual
paraphernalia, except as the same may be legally dispensed by a
physician or surgeon, dentist or pharmacist, duly licensed to practice
such profession.
e. The sale or dispensing of alcoholic beverages, except as the same may be
incidental to the permitted use of the Leased Premises, as provided in
the Lease Agreement.
f. The sale or dispensing of alcoholic beverages on all other portions of
the real property conveyed hereunder, except as the same shall be only
incidental to any business, including restaurants, hotels or
delicatessens which may be hereafter located on said other portions of
the real property hereby conveyed.
g. The showing, displaying, viewing, renting or selling of movie films
which would be classified rated as "X-rated" under present standards or
criteria for such classification and rating; and provided, that insofar
as movie films, whether present or future are shown, displayed, viewed,
rented, or sold upon the said real property, preference shall be given
to those films which meet the standards and criteria presently existing
for classification and rating as "G rated" or "PG rated".
h. Gambling.
i. The establishment or maintenance of a bawdy house, bar, nightclub or
tavern.
j. Any other act or condition which shall be lewd, obscene or licentious.
<PAGE> 14
EXHIBIT "D"
HAZARDOUS SUBSTANCES, TENANT'S COMPLIANCE WITH APPLICABLE REQUIREMENTS
AND COMPLIANCE WITH LAW
1.0 Hazardous Substances
(a) Reportable Uses Require Consent. The term "Hazardous Substance" as
used in this Lease shall mean any product, substance, chemical, material or
waste whose presence, nature, quantity and/or intensity of existence, use,
manufacture, disposal, transportation, spill, release or effect, either by
itself or in combination with other materials expected to be on the Leased
Premises, is either; (i) potentially injurious to the public health, safety or
welfare, the environment, or the Leased Premises; (ii) regulated or monitored
by any governmental authority; or (iii) a basis for potential liability of
Landlord to any governmental agency or third party under any applicable statute
or common law theory. Hazardous Substance shall include, but not be limited to,
hydrocarbons, petroleum, gasoline, crude oil or any products or by products
thereof, Tenant shall not engage in any activity in or about the Leased
Premises which constitutes a Reportable Use (as hereinafter defined) of
Hazardous Substances without the express prior written consent of Landlord and
compliance in a timely manner (at Tenant's sole cost and expense) with all
Applicable Requirements (as defined in Paragraph 2.0). "Reportable Use" shall
mean (i) the installation or use of any above or below ground storage tank,
(ii) the generation, possession, storage, use, transportation, or disposal of
Hazardous Substance that requires a permit from, or with respect to which a
report, notice, registration or business plan is required to be filed with any
governmental authority, and (iii) the presence in, on or about the Leased
Premises of a Hazardous Substance with respect to which any Applicable Laws
require that a notice be given to persons entering or occupying the Leased
Premises or neighboring properties. Notwithstanding the foregoing, Tenant may,
without Landlord's prior consent, but upon notice to Landlord and in compliance
with all Applicable Requirements, use any ordinary and customary materials
reasonably required to be used by Tenant in the normal course of the permitted
use (as specified in paragraph 11), so long as such use is not a
Reportable Use and does not expose the Leased Premises or neighboring
properties to any meaningful risk of contamination or damage or expose Landlord
to any liability therefor. In addition, Landlord may (but without any
obligation to do so) condition its consent to any Reportable Use of any
Hazardous Substance by Tenant upon Tenant's giving Landlord such additional
assurances as Landlord, in its reasonable discretion, deems necessary to protect
itself, the public, the Leased Premises and the environment against damage,
contamination or injury and/or liability therefor, including but not limited to
the installation (and, at Landlord's option, removal on or before Lease
expiration or earlier termination) of reasonably necessary protective
modifications to the Leased Premises (such as concrete encasements) and/or the
deposit of an additional Security Deposit under Paragraph 5 hereof.
(b) Duty to inform Lessor, if Tenant knows or had reasonable cause to
believe, that a Hazardous Substance has come to be located in, on, under or
about the Leased Premises or the Building, other than as previously consented
to by Landlord, Tenant shall immediately give Landlord written notice thereof,
together with a copy of any statement, report, notice, registration,
application permit, business plan, license, claim, action or proceeding given
to or received from, any governmental authority or private party concerning the
presence, spill, release, discharge of, or exposure to, such Hazardous
Substance including but not limited to all such documents as may be involved in
any Reportable Use involving the Leased Premises, Tenant shall not cause or
permit any Hazardous Substance to be spilled or released in, on, or under or
about the Leased Premises (including, without limitation, through the plumbing
or sanitary sewer system).
(c) Indemnification. Tenant shall indemnify, protect, defend and hold
Landlord, its agents, employees, lenders and ground Landlord, if any and the
Leased Premises, harmless from and against any and all damages, liabilities,
judgements, costs claims, liens, expenses, penalties, loss of permits and
attorneys' and consultants' fees arising out of or involving any Hazardous
Substance brought onto the Leased Premises by or for Tenant or by anyone under
Tenant's control. Tenant's obligations under this Paragraph 1.0(c) shall
include, but not be limited to, the effects of any contamination or injury to
person, property or the environment created or suffered by Tenant, and the cost
of investigation (including consultant's and attorneys' fees and testing),
removal, remediation, restoration and/or abatement thereof, or of any
contamination therein involved and shall survive the expiration or earlier
termination of this Lease. No termination, cancellation or release agreement
entered into by Landlord and Tenant shall release Tenant from its obligations
under this Lease with respect to Hazardous Substances, unless specifically so
agreed by Landlord in writing at the time of such agreement.
2.0 Tenants' Compliance with Requirements. Tenant shall, at Landlord's
sole cost and expense, fully, diligently and in a timely manner, comply with
all "Applicable Requirements", which term is used in this Lease to mean all
laws, rules, regulations, ordinances, directives, covenants, easements and
restrictions of record, permits, the requirements of any applicable fire
insurance underwriter or rating bureau and the recommendations of Landlord's
engineers and/or consultants, relating in any manner to the manner to the
Leased Premises (including but not limited to matters pertaining to (i)
industrial hygiene, (ii) environmental conditions on, in, under or about the
Leased Premises, including soil and groundwater conditions and (iii) the use,
generation, manufacture, production, installation, maintenance, removal,
transportation, storage, spill or release of any Hazardous Substance), now in
effect or which may hereafter come into effect, Tenant shall, within five (5)
days after receipt of Landlord's written request, provide Landlord with copies
of all documents and information, including but not limited to permits,
registration, manifests, applications, reports and certificates, evidencing
Tenant's compliance with any Applicable Requirements specified by Landlord, and
shall immediately upon receipt, notify Landlord in writing (with copies of any
documents involved) of any threatened or actual claim, notice, citation,
warning, compliant or report pertaining to or involving failure by Tenant or
the Leased Premises to comply with any Applicable Requirements. Notwithstanding
anything to the contrary stated above, Tenant shall not be liable hereunder for
anything relating to the conditions that preexisted before Tenant's occupancy
of the Premises in January, 1995 under the sublease with CTX International; nor
with any conditions not caused by tenant.
3.0 Inspection; Compliance with Law. Tenant, Landlord's agents,
employees, contractors and designated representative, and the holders of any
mortgages, deeds of trust or ground leases on the Leased Premises ("Lenders")
shall have the right to enter the Leased Premises at any time in the case of an
emergency, and otherwise at reasonable times, for the purpose of inspecting the
condition of the Leased Premises and for verifying compliance by Tenant with
this Lease and all Applicable Requirements (as defined in Paragraph 2.0) and
Landlord shall be entitled to employ experts and/or consultants in connection
therewith to advise Landlord with respect to Tenant's activities, including but
not limited to Tenant's installation, operation, use, monitoring, maintenance,
or removal of any Hazardous Substance on or from the Leased Premises. The costs
and expenses of any such inspections shall be paid by the party requesting
same, unless a Default or Breach of this Lease by the inspection is requested
or ordered by a governmental authority as the result of any such existing or
imminent violation or contamination, in such case, Tenant shall upon request
reimburse Landlord or Landlord's Lender, as the case may be, for the costs and
expenses of such inspections.
14
<PAGE> 1
EXHIBIT 10.3
EMPLOYMENT AGREEMENT
AGREEMENT entered into as of April 10, 1997 by and between One Up
Corporation, a Texas corporation with its principal offices at 12801
Stemmons Freeway, Suite 710, Farmers Branch, Texas 75234, the "Employer" or
"One Up" and Curtis Overstreet, an individual residing at 5005 LBJ Freeway,
#700, Dallas, Texas 75244 (the "Employee").
WHEREAS, the Employee has been accepted for employment by One Up as a
President, which position shall be deemed by One Up to be a key position
within the corporation; and,
WHEREAS, One Up desires to have the Employee make their services
available to One Up; and,
WHEREAS, One Up shall employ the Employee on the condition that, in so
doing, it shall have protected its goodwill, trade secrets and other
proprietary or confidential information, business accounts and patronage;
and,
WHEREAS, the Employee desires to render such services on the terms and
conditions set forth herein and agrees to protect One Up's goodwill, trade
secrets and other proprietary or confidential information, business accounts
and patronage.
NOW, THEREFORE, in consideration of the mutual promises set forth
herein and for other good and valuable consideration, the sufficiency of
which is hereby acknowledged, the parties hereto agree as follows:
1. DUTIES, COMPENSATION, VACATION, TRAVEL AND EXPENSES
(a) The Employee shall be responsible to perform the duties of a
President and such other activities as One Up may, from time
to time, reasonably assign to him/her. The Employee agrees to
perform such duties to the best of their ability and to
exclusively devote their energies and skill to the
performance of their duties during business hours and for
such additional time as may be necessary to perform such
duties. During the Term of Employment, the Employee shall be
governed by the terms of this Agreement and subject to the
supervision and direction of the Board of Directors of One
Up.
Employment Agreement by and Between One Up and Curtis Overstreet
1
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(b) One Up agrees to employ the Employee and the Employee agrees
to accept employment by One Up on a full time basis at a
starting annual salary of $90,000, which salary shall be paid
in semi-monthly installments on the 15th and last day of each
month or such other pay periods established from time to time
by One Up pursuant to its standard employment practices
during the term of Employment as hereinafter defined;
(c) The Employee shall be eligible under one or more group
policies of health insurance, life insurance and disability
insurance on the same terms and conditions as the benefits
normally provided to its employees by One Up;
(d) Such other compensation including Participation in Stock
Option Plan and Cash Bonus as defined in Exhibit A hereto and
such other incentives as One Up's Board of Directors may,
from time to time, in its sole discretion, determine;
(e) Each year the salary payable to the Employee shall be
reviewed and may be adjusted as One Up may deem reasonable
and warranted by the efforts of the Employee on behalf of One
Up, provided, however, that this provision shall not be
construed as creating any obligation on the part of One Up to
award or pay any salary increase or bonus to the Employee;
(f) The Employee shall receive a paid vacation of 10 business
days during each year of the Term of Employment as published
in the One Up Employee Manual and,
(g) The Employee, throughout the term of this Agreement, shall be
reimbursed for reasonable travel and other expenses incurred
and accounted for in the conduct of One Up business pursuant
to, and in accordance with, One Up's normal practice.
2. TERM OF EMPLOYMENT
(a) The "Term of Employment" as used herein means that period
during which One Up will employ the Employee in its business,
and the Employee will work for One Up beginning from the date
hereof and for a period of 1 year thereafter. After the
expiration of the term described above, the Term of
Employment shall continue from year to year unless or until:
(i) such employment shall have been terminated as hereinafter
provided (ii); this Agreement shall have been renewed or
replaced by mutual agreement of the parties hereto; or, (iii)
the Employee shall have resigned their position; (iv) or upon
thirty (30) days written notice by either party at the end of
the term of employment (initial or renewal term);
Employment Agreement by and Between One Up and Curtis Overstreet
2
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(b) Notwithstanding any provision of the Agreement, the
employment of the Employee shall be terminated upon: (i)
resignation of the Employee from employment, (ii) the death
or inability of the Employee to continue to provide his
services by reason of permanent disability, or, (iii) for
just cause upon notice of such termination of the Employee.
The term "just cause" as used in this Agreement means a
determination of cause for termination by the Board of
Directors of One Up based on one or more of the following
reasons: That the Employee is unable to fulfil their duties
under this Agreement because of the continued abuse of
alcohol or use of controlled substance; That the Employee has
become unable to perform their duties under this Agreement
for a period of at least three consecutive calendar months as
a result of illness or otherwise; The commission by the
Employee of an act of fraud or embezzlement against One Up;
The Employee having been convicted of a felony involving
moral turpitude.
(c) It is agreed and acknowledged that in the event Employee
voluntarily terminates their employment with Employer or
Employer terminates Employee for "just cause," the Employer's
obligation to pay any compensation (base salary or
commission, if any) to Employee shall cease upon the
effective date of such termination.
3. NONDISCLOSURE COVENANTS
The Employee, during the Term of Employment under this
Agreement, shall have access to and become familiar with
various trade secrets consisting of, but not limited to,
processes, computer programs, compilations of information,
records, sales procedures, customer requirements, pricing
techniques, customer lists, methods of doing business and
other confidential information (collectively referred to as
the "Trade Secrets"), which are owned by Employer and
regularly used in the operation of its business. Employee
shall not use in any way or disclose any of the Trade
Secrets, directly or indirectly, either during the term of
the Agreement or at any time thereafter, except as required
in the course of their employment under this Agreement. All
files, records, documents, information, data, and similar
items relating to the business of Employer, whether prepared
by Employee or otherwise coming into their possession, shall
remain the exclusive property of the Employer and shall not
be removed from the premises of the Employer under any
circumstance without the prior written consent of an
authorized officer of the Employer (except in the ordinary
course of business
Employment Agreement by and Between One Up and Curtis Overstreet
3
<PAGE> 4
during Employee's period of active employment under this
Agreement), and in any event shall be promptly delivered to
the Employer (without Employee retaining any copies) upon
termination of the Agreement.
4. NONCOMPETITION COVENANTS
(a) Without the prior written consent of the Employer, the
Employee shall not, during the term of employment with
Employer, directly or indirectly, as a director, officer,
agent, employee, consultant, or independent contractor, or in
any other individual or representative capacity, (i) invest
(other than investments in publicly owned companies which
constitute not more the 1% of the outstanding securities of
any such company) or engage in any business or activity that
is in competition with the business of Employer or any of its
affiliates, (ii) accept employment with, or render services
to, a competitor of the Employer or any of its affiliates, or
(iii) take any action inconsistent with the fiduciary
relationship of an employee to an employer. As used in this
Agreement, "affiliates" shall mean persons or entities that,
directly or indirectly through one or more intermediaries,
control or are controlled by, or are under common control
with, the Employer;
(b) Upon termination of the Employee's employment with the
Employer for any reason whatsoever, and for a period of three
(3) years thereafter, the Employee shall not, directly or
indirectly, as a director, officer, agent, employee,
consultant, or independent contractor, or in any other
individual or representative capacity, (i) invest (other than
investments in publicly-owned companies which constitute not
more that 1% of the outstanding securities of any such
company) or engage as an owner or equity participant in any
business or activity that is competition with the business of
Employer or any of its affiliates, (ii) accept employment
with or render services to a competitor or intending to
compete with the Employer or any of its affiliates, or
(iii) while or for the purpose of engaging in competition
with the Employer or any of its affiliates in any area
whatsoever, contact, solicit, or attempt to solicit or accept
business from any of the customers of the Employer or any of
its affiliates during the term of the Employee's employment
with the Employer or the Employee's termination or cessation
of employment with the Employer, or from any person or entity
whose business the Employer or any of its affiliates were
actively soliciting as such time without the written consent
of the Employer. The Employer shall provide the Employee with
the names of such
Employment Agreement by and Between One Up and Curtis Overstreet
4
<PAGE> 5
customers of the Employer an its affiliated described in
clause (iii) of this paragraph 4 upon request therefore, or
(b) upon termination of the Employee's employment (but
failure to do so shall not release Employee for obligations
under this Section); such names shall be for all purposes and
at all times be considered Trade Secrets subject to the
covenants set forth in Section 4 hereof. As used herein, a
person or entity is in "competition" with or is a
"competitor" of Employer or any of its affiliates if such
person or entity is in the business of migration, conversion,
or porting software, assistance or services, or providing,
or planning to provide the same or similar services,
products, or systems as the Employer.
5. COVENANT NOT TO HIRE
For a period of two (2) years after the termination of
employment with the Employer for any reason whatsoever, the
Employee shall not, on their behalf or on behalf of any other
person, partnership, association, corporation, or other
entity, hire, or solicit any employee of Employer or any of
its affiliates, or in any manner attempt to influence or
induce any employee of Employer or any of its affiliates, to
leave the employment of the Employer or its affiliates, nor
shall the Employee use or disclose to any person,
partnership, association, corporation, or other enmity any
information obtained while an employee of the Employer
concerning the names and addresses of the Employer's or any
of its affiliates' employees.
6. SEVERABILITY
Notwithstanding anything to the contrary herein, or in any
exhibit hereto the Employee agrees that the noncompetition
covenants, nondisclosure covenants, and covenant not to hire
set forth above each constitute separate agreements
independently supported by good and adequate consideration,
the actual receipt and adequacy of which are hereby
acknowledged by the Employee, and shall be severable from
other provisions of, and shall survive, this Agreement. The
existence of any claim or cause of action of the Employee
against the Employer, whether predicated on the Agreement or
otherwise, shall not constitute a defense to the enforcement
by the Employer of the covenants and agreements of the
Employee contained in the noncompetition, nondisclosure, or
non-hiring covenants. If any provision of this Agreement is
held to
Employment Agreement by and Between One Up and Curtis Overstreet
5
<PAGE> 6
be illegal, invalid, or unenforceable under present or future
laws effective during the term hereof, such provision shall
be fully severable and this Agreement shall be construed an
enforced as if such illegal, invalid, or unenforceable
provision never comprised a part of this Agreement; and the
remaining provisions of this Agreement shall remain in full
force an effect and shall not be affected by the illegal,
invalid, or unenforceable provision or by its severance
herefrom. Furthermore, in lieu of such illegal, invalid, or
unenforceable provision, there shall be added automatically
as part of this Agreement a provision as similar in its term
to such illegal, invalid or unenforceable provisions may be
possible and be legal, valid, and enforceable.
7. INVENTIONS
The Employee shall promptly disclose, grant, and assign to
Employer for its sole use and benefit any and all inventions,
improvements, technical information, and suggestions relating
in any way to the products of the Employer or any of its
affiliates or capable of beneficial use by the Employer or
any of its affiliates, which the Employee has in the past
conceived, developed, or acquired, or may conceive, develop,
or acquire during the term hereof (whether or not during
usual working hours), together with all patent applications,
letters patent, copyrights, and reissues thereof that may at
any time be granted for or upon any such inventions,
improvement, or technical information. In connection
therewith, Employee shall promptly at all times during and
after the term hereof:
(a) Execute and deliver such applications, assignments,
descriptions, and other instruments as may be necessary or
proper in the opinion of Employer to vest title to such
inventions, improvements, technical information, suggestions,
patent applications, patents, copyrights and reissues thereof
in Employer and to enable it to obtain and maintain the
entire right and title thereto throughout the world; and
(b) Render to the Employer, at its expense, all such assistance
as it may require in the prosecution of applications
aforesaid patents, copyrights, and reissues thereof, in the
prosecution or defense of interference which may be declared
involving any said applications, copyrights, or patents, and
in any litigation in which the Employer may be involved
relating to any such inventions, improvements,
Employment Agreement by and Between One Up and Curtis Overstreet
6
<PAGE> 7
technical information, suggestions, patent applications,
patents, copyrights and reissues thereof.
8. AFFILIATES
The Employee will use their best efforts to ensure that no
relative of the Employee or the corporation of which such
relative is an officer, director or shareholder, or other
affiliate, shall take any action that the Employee could not
take without violating any provision of this Agreement.
9. REMEDIES
The Employee acknowledges and recognizes that a violation of
the restrictions, agreements, or covenants contained in
Sections 3, 4, 5 and 7 of this Agreement will cause such
damage to Employer as will be irreparable and that Employer
will have no adequate remedy at law for such violation or
threatened violation. Accordingly, the Employee agrees that
the Employer shall be entitled, as a matter of right, to seek
and obtain an injunction from any court of competent
jurisdiction, restraining any further violation or threatened
violation of such restrictions, agreements, or covenants and
granting mandatory relief compelling Employee to carry out
obligations hereunder. Such right to injunctive and mandatory
relief shall be cumulative and in addition to whatever other
remedies the Employer may have at law or in equity.
10. ACKNOWLEDGMENTS
The Employee acknowledges and recognizes that (i) the
enforcement of this Agreement by the Employer is necessary to
protect the legitimate interest of the Employer in protecting
its goodwill, trade secrets and other confidential or
proprietary information, business, accounts, and patronage
(collectively in this Section, "Employer's Interests") and
will not interfere with Employee's ability to pursue a proper
livelihood in the country of residence or elsewhere, and (ii)
the restraints imposed by the covenants of and restrictions
on Employee in this Agreement are not greater that necessary
to protect Employer's Interest. Employee agrees that due to
the nature of Employer's business, the noncompetition
restrictions set forth in this Agreement are reasonable as to
scope of activity, time, and geographic area.
Employment Agreement by and Between One Up and Curtis Overstreet
7
<PAGE> 8
11. MISCELLANEOUS
(a) NOTICES. Any notices, consents, demands, requests, approvals,
and other communications to be given under this Agreement by
any party to the other shall be deemed to have been duly
given if given in writing and personally delivered or sent by
mail, registered or certified, postage prepaid with return
receipt requested, at the address specified beside each
party's signature at the end of this Agreement. Notices
delivered personally or by telegram, telex, or telecopy shall
be deemed communicated as of actual receipt; mailed notices
shall be deemed communicated as of 10:00 a.m. on the third
business day after mailing. Any party may change its address
for notice hereunder by giving notice of such change in the
manner provided in this paragraph.
(b) ENTIRE AGREEMENT. This Agreement supersedes any and all other
agreements, either oral or written, between the parties
hereto with respect to the subject matter hereof and contains
all of the covenants and agreements between the parties with
respect thereto.
(c) MODIFICATION AND WAIVER. No change or modification of this
Agreement shall be valid or binding upon the parties hereto,
nor shall any waiver of any term or condition in the future
be so binding, unless such change or modification or waiver
shall be in writing and signed by the party against whom or
which such waiver is sought to be enforced. The waiver by the
Employer of a breach of any provision of this Agreement by
the Employee shall not operate or be construed as a waiver of
any subsequent breach by the Employee.
(d) GOVERNING LAW. This Agreement, and the rights and obligations
of the parties hereto, shall be governed by and construed in
accordance with the laws of the State of Texas and shall be
performable in Dallas, Texas. Venue of any litigation arising
hereunder shall be in a court of competent jurisdiction in
Dallas, Texas.
(e) COUNTERPARTS. This Agreement may be executed in counterparts,
including facsimile, each of which shall constitute an
original, but all of which shall constitute one and the same
document.
(f) COST. If any action at law or in equity is necessary to
enforce or interpret the terms of this Agreement, the
prevailing party shall be entitled to reasonable attorneys'
fees, costs, and necessary disbursements in addition to any
other relief to which it may be entitled.
(g) ASSIGNMENT. Employer shall have the right to assign this
Agreement to its successors or assigns. The terms
"successors"
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<PAGE> 9
and "assigns" shall include any person, corporation,
partnership, or other entity that buys all or substantially
all of Employer's assets or a contrasting interest of its
stock, or with which the Employer merges of engages in a
share exchange. The rights and duties of Employee hereunder
are personal, and no such right may be assigned or duty
delegated by One Up or its successor in interest.
(h) BINDING EFFECT. This Agreement shall be binding upon the
parties hereto, together with their respective executors,
administrators, successors, personal representative, heirs,
and permitted assigns.
(i) ESTATE. If Employee dies prior to the expiration of the term
of employment, any moneys that may be due from Employer under
this Agreement as of the date of death shall be paid to the
estate.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
EMPLOYER:
Address: ONE UP CORPORATION
12801 Stemmons Freeway, Suite 710 By: /s/ WAYNE SANDERSON
--------------------------------- ------------------------------
Farmers Branch, Texas 75234 Title: Vice President
-------------------------------- ---------------------------
Address: EMPLOYEE
5005 LBJ Freeway, #700 /s/ CURTIS OVERSTREET
-------------------------------- ---------------------------------
Signature
Dallas, Texas 75244 CURTIS OVERSTREET
-------------------------------- ---------------------------------
Print Name
Employment Agreement by and Between One Up and Curtis Overstreet
9
<PAGE> 10
EXHIBIT "A"
TO THE EMPLOYMENT AGREEMENT BY AND BETWEEN
CURTIS OVERSTREET AND ONE UP CORPORATION
OTHER COMPENSATION
(1) ADDITIONAL COMPENSATION: Provided the Employee is still employed by the
Employer under the terms of this Agreement, the Employee shall be
eligible for participation in the following:
(a) Base Salary Adjustment: the Employee will become eligible for an
increase in annual base salary of $30,000 once the Company has
realized three (3) consecutive months of profitability and positive
cash flow.
(b) Key Employee Cash Bonus Plan: The Employee shall be eligible for a
bonus. The bonus basis is $60,000 for the 1997 fiscal year based
upon the following criteria:
o Profitability of $100,000 net income before taxes, allocation
percentage 30% of total bonus or $18,000, minimum performance
eligibility 60%, may earn greater than 100% of the bonus.
o Order backlog (firm bookings) as of December 31, 1997 of $3.2 mill
for fiscal 1998, allocation percentage 20% of total bonus or
$12,000, minimum performance eligibility 80%, may earn greater than
100% of the bonus.
o Positive Cash Flow for the six-month period starting July 1, 1997
and ending December 31, 1997, allocation percentage 40% of the
total bonus, minimum performance eligibility 100%, may not exceed
100% of the bonus.
o Strategic Alliances, one alliance approved by the board of
Directors, allocation percentage 10% of the total bonus, minimum
performance eligibility 100%, may not exceed 100% of the bonus.
(c) Key Employee Stock Option Plan: The Employee will be granted
options to purchase 10% of the total amount of Shares outstanding
(27,446,164 currently outstanding) as of the date of this
Agreement. The options will vest according to the following vesting
schedule: 25% or 686,154 options after six (6) months, 25% or
686,154 options after twelve (12) months, 25% or 686,154 options
after eighteen (18) months and 25% or 686,154 options after
twenty-four (24) months of the date of this Agreement.
Options exercise price will be determined by the average closing bid price
per share for the period starting February 24, 1997 and ending one day prior
to the execution of this Agreement. Options are for a term of four years
from the date of vesting. Dilution protection for recapitalizations, stock-
splits, stock dividends and for issuance of stock or derivative securities
at below fair market value. Options terminate, whether vested or not, at the
end of thirty (30) days following the resignation of Employee, and at the
end of twelve months, whether vested or not, in the event of death or
disability as described in this Agreement. All options become fully vested
upon the sale of the Company. All options terminate immediately in the event
Employee is terminated for "just cause" as described in this Agreement.
<PAGE> 11
EXHIBIT "A"
TO THE EMPLOYMENT AGREEMENT BY AND BETWEEN
CURTIS OVERSTREET AND ONE UP CORPORATION
PAGE 2
OTHER COMPENSATION
(d) Employee may participate in sales commission at his discretion
as outlined in the Company's business plan as accepted by the
Board of Directors of the Company.
<PAGE> 1
EXHIBIT 10.4
EMPLOYMENT AGREEMENT
AGREEMENT entered into as of June 1, 1997 by and between One Up
Corporation, a Texas corporation with its principal offices at 12801
Stemmons Freeway, Suite 710, Farmers Branch, Texas 75234, the "Employer" or
"One Up" and Joe Meredith, an individual residing at 4515 Shenandoah,
Dallas, Texas 75205 (the "Employee").
WHEREAS, the Employee has been accepted for employment by One Up as
Vice President, Sales, which position shall be deemed by One Up to be a key
position within the corporation; and,
WHEREAS, One Up desires to have the Employee make their services
available to One Up; and,
WHEREAS, One Up shall employ the Employee on the condition that, in so
doing, it shall have protected its goodwill, trade secrets and other
proprietary or confidential information, business accounts and patronage;
and,
WHEREAS, the Employee desires to render such services on the terms and
conditions set forth herein and agrees to protect One Up's goodwill, trade
secrets and other proprietary or confidential information, business accounts
and patronage.
NOW, THEREFORE, in consideration of the mutual promises set forth
herein and for other good and valuable consideration, the sufficiency of
which is hereby acknowledged, the parties hereto agree as follows:
1. DUTIES, COMPENSATION, VACATION, TRAVEL AND EXPENSES
(a) The Employee shall be responsible to perform the duties of
Vice President, Sales and such other activities as One Up
may, from time to time, reasonably assign to him/her. The
Employee agrees to perform such duties to the best of their
ability and to exclusively devote their energies and skill to
the performance of their duties during business hours and for
such additional time as may be necessary to perform such
duties. During the Term of Employment, the Employee shall be
governed by the terms of this Agreement and subject to the
supervision and direction of the Board of Directors of One
Up. One Up reserves the right to reasonably change, from time
to time, the nature and scope of the Employee's duties and
the place where such duties shall be performed;
Employment Agreement by and Between One Up and Joe Meredith
1
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(b) One Up agrees to employ the Employee and the Employee agrees
to accept employment by One Up on a full time basis at a
starting annual salary of $75,000.00, which salary shall be
paid in semi-monthly installments on the 15th and last day of
each month or such other pay periods established from time to
time by One Up pursuant to its standard employment practices
during the term of Employment as hereinafter defined;
(c) The Employee shall be eligible under one or more group
policies of health insurance, life insurance and disability
insurance on the same terms and conditions as the benefits
normally provided to its employees by One Up;
(d) Such other compensation including participation in Cash Bonus
and the Employee Stock Option Plan as defined in Exhibit A
hereto and such other incentives as One Up's Board of
Directors may, from time to time, in its sole discretion,
determine;
(e) Each year the salary payable to the Employee shall be
reviewed and may be adjusted upward as One Up may deem
reasonable and warranted by the efforts of the Employee on
behalf of One Up, provided, however, that this provision
shall not be construed as creating any obligation on the part
of One Up to award or pay any salary increase or bonus to the
Employee;
(f) The Employee shall receive a paid vacation of 10 business
days during each year of the Term of Employment as published
in the One Up Employee Manual and,
(g) The Employee, throughout the term of this Agreement, shall be
reimbursed for reasonable travel and other expenses incurred
and accounted for in the conduct of One Up business pursuant
to, and in accordance with, One Up's normal practice.
2. TERM OF EMPLOYMENT
(a) The "Term of Employment" as used herein means that period
during which One Up will employ the Employee in its business,
and the Employee will work for One Up beginning from the date
hereof and for a period of one year thereafter. After the
expiration of the term described above, the Term of
Employment shall continue from year to year unless or until:
(i) such employment shall have been terminated as hereinafter
provided; (ii) this Agreement shall have been renewed or
replaced by mutual agreement of the parties hereto; or, (iii)
the Employee shall have resigned their position; (iv) or upon
thirty (30) days written notice by either party at the end of
the term of employment (initial or renewal term);
(b) Notwithstanding any provision of the Agreement, the
employment of the Employee shall be terminated upon: (i)
resignation of the
Employment Agreement by and Between One Up and Joe Meredith
2
<PAGE> 3
Employee from employment, (ii) the death or inability of the
Employee to continue to provide his services by reason of
permanent disability, or, (iii) for just cause upon notice of
such termination of the Employee. The term "just cause" as
used in this Agreement means: That the Employee is unable to
fulfill their duties under this Agreement because of the
continued abuse of alcohol or use of a controlled substance;
That the Employee has become unable to perform their duties
under this Agreement for a period of at least three
consecutive calendar months as a result of illness or
otherwise; The commission by the Employee of an act of fraud
or embezzlement against One Up; The Employee having been
convicted of a felony involving moral turpitude; or the
Employee shall resign from employment or the Employee and One
Up shall mutually agree to terminate this Agreement.
(c) It is agreed and acknowledged that in the event Employee
voluntarily terminates their employment with Employer or
Employer terminates Employee for "just cause," the Employer's
obligation to pay any compensation (base salary or
commission, if any) to Employee shall cease upon the
effective date of such termination.
3. NONDISCLOSURE COVENANTS
The Employee, during the Term of Employment under this
Agreement, shall have access to and become familiar with
various trade secrets consisting of, but not limited to,
processes, computer programs, compilations of information,
records, sales procedures, customer requirements, pricing
techniques, customer lists, methods of doing business and
other confidential information (collectively referred to as
the "Trade Secrets"), which are owned by Employer and
regularly used in the operation of its business. Employee
shall not use in any way or disclose any of the Trade
Secrets, directly or indirectly, either during the term of
the Agreement or at any time thereafter, except as required
in the course of their employment under this Agreement. All
files, records, documents, information, data, and similar
items relating to the business of Employer, whether prepared
by Employee or otherwise coming into their possession, shall
remain the exclusive property of the Employer and shall not
be removed from the premises of the Employer under any
circumstance without the prior written consent of an
authorized officer of the Employer (except in the ordinary
course of business during Employee's period of active
employment under this Agreement), and in any event shall be
promptly delivered to the Employer (without Employee
retaining any copies) upon termination of the Agreement.
Employment Agreement by and Between One Up and Joe Meredith
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<PAGE> 4
4. NON-COMPETITION COVENANTS
(a) Without the prior written consent of the Employer, the
Employee shall not, during the term of employment with
Employer, directly or indirectly, as a director, officer,
agent, employee, consultant, or independent contractor, or in
any other individual or representative capacity, (i) invest
(other than investments in publicly owned companies which
constitute not more the 1% of the outstanding securities of
any such company) or engage in any business or activity that
is in competition with the business of Employer or any of its
affiliates, (ii) accept employment with, or render services
to, a competitor of the Employer or any of its affiliates, or
(iii) take any action inconsistent with the fiduciary
relationship of an employee to an employer. As used in this
Agreement, "affiliates" shall mean persons or entities that,
directly or indirectly through one or more intermediaries,
control or are controlled by, or are under common control
with, the Employer;
(b) Upon termination of the Employee's employment with the
Employer for just cause or upon voluntary resignation, and
for a period of one year thereafter, the Employee shall not,
directly or indirectly, as a director, officer, agent,
employee, consultant, or independent contractor, or in any
other individual or representative capacity, (i) invest
(other than investments in publicly-owned companies which
constitute not more that 1% of the outstanding securities of
any such company) or engage as an owner or equity participant
in any business or activity that is competition with the
business of Employer or any of its affiliates, (ii) accept
employment with or render services to a competitor or
intending to compete with the Employer or any of its
affiliates, or (iii) while or for the purpose of engaging in
competition with the Employer or any of its affiliates in any
area whatsoever, contact, solicit, or attempt to solicit or
accept business from any of the customers of the Employer or
any of its affiliates during the term of the Employee's
employment with the Employer or the Employee's termination or
cessation of employment with the Employer, or from any person
or entity whose business the Employer or any of its
affiliates were actively soliciting as such time without the
written consent of the Employer. The Employer shall provide
the Employee with the names of such customers of the Employer
and its affiliates described in clause (iii) of this
Paragraph 4 upon request therefore, or upon termination of
the Employee's employment (but failure to do so shall not
release Employee from obligations under this Section); such
names shall be for all purposes and at all times be
considered Trade Secrets subject to the covenants set forth
in
Employment Agreement by and Between One Up and Joe Meredith
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Section 4 hereof As used herein, a person or entity is in
"competition" with or is a "competitor" of Employer or any
of its affiliates if such person or entity is in the
business of migration, conversion, or porting software,
assistance or services, or providing, or planning to provide
the same or similar services, products, or system as the
Employer.
5. COVENANT NOT TO HIRE
For a period of two (2) years after the termination of
employment with the Employer for any reason whatsoever, the
Employee shall not, on their behalf or on behalf of any other
person, partnership, association, corporation, or other
entity, hire, or solicit any employee of Employer or any of
its affiliates, or in any manner attempt to influence or
induce any employee of Employer or any of its affiliates, to
leave the employment of the Employer or its affiliates, nor
shall the Employee use or disclose to any person,
partnership, association, corporation, or other entity any
information obtained while an employee of the Employer
concerning the names and addresses of the Employer's or any
of its affiliates as employees.
6. SEVERABILITY
Notwithstanding anything to the contrary herein, or in any
exhibit hereto the Employee agrees that the non-competition
covenants, nondisclosure covenants, and covenant not to hire
set forth above each constitute separate agreements
independently supported by good and adequate consideration,
the actual receipt and adequacy of which are hereby
acknowledged by the Employee, and shall be severable from
other provisions of, and shall survive, this Agreement. The
existence of any claim or cause of action of the Employee
against the Employer, whether predicated on the Agreement or
otherwise, shall not constitute a defense to the enforcement
by the Employer of the covenants and agreements of the
Employee contained in the non-competition, nondisclosure, or
non-hiring covenants. If any provision of this Agreement is
held to be illegal, invalid, or unenforceable under present
or future laws effective during the term hereof, such
provision shall be fully severable and this Agreement shall
be construed as enforced as if such illegal, invalid, or
unenforceable provision never comprised a part of this
Agreement; and the remaining provisions of this Agreement
shall remain in full force and effect and shall not be
affected by the illegal, invalid, or unenforceable provision
or by its severance herefrom. Furthermore, in lieu of such
illegal, invalid, or
Employment Agreement by and Between One Up and Joe Meredith
5
<PAGE> 6
unenforceable provision, there shall be added automatically
as part of this Agreement a provision as similar in its term
to such illegal, invalid or unenforceable provisions may be
possible and be legal, valid, and enforceable.
7. INVENTIONS
The Employee shall promptly disclose, grant, and assign to
Employer for its sole use and benefit any and all inventions,
improvements, technical information, and suggestions relating
in any way to the products of the Employer or any of its
affiliates or capable of beneficial use by the Employer or
any of its affiliates, which the Employee has in the past
conceived, developed, or acquired, or may conceive, develop,
or acquire during the term hereof (whether or not during
usual working hours), together with all patent applications,
letter patents, copyrights, and reissues thereof that may at
any time be granted for or upon any such inventions,
improvement, or technical information. In connection
therewith, Employee shall promptly at all times during and
after the term hereof:
(a) Execute and deliver such applications, assignments
descriptions, and other instruments as may be necessary or
proper in the opinion of Employer to vest title to such
inventions, improvements, technical information, suggestions,
patent applications, patents, copyrights and reissues thereof
to Employer and to enable it to obtain and maintain the
entire right and title thereto throughout the world; and
(b) Render to the Employer, at its expense, all such assistance
as it may require in the prosecution of applications,
aforesaid patents, copyrights, and reissues thereof, in the
prosecution or defense of interference which may be declared
involving any said applications, copyrights, or patents, and
in any litigation in which the Employer may be involved
relating to any such inventions, improvements, technical
information, suggestions, patent applications, patents,
copyrights and reissues thereof.
8. REMEDIES
The Employee acknowledges and recognizes that a violation of
the restrictions, agreements, or covenants contained in
Sections 3, 4, 5 and 7 of this Agreement will cause such
damage to Employer as will be irreparable and that Employer
will have no adequate remedy at law for such violation or
threatened violation. Accordingly, the Employee agrees that
the Employer shall be entitled, as a matter of
Employment Agreement by and Between One Up and Joe Meredith
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<PAGE> 7
right, to seek and obtain an injunction from any court of
competent jurisdiction, restraining any further violation or
threatened violation of such restrictions, agreements, or
covenants and granting mandatory relief compelling Employee
to carry out obligations hereunder. Such right to injunctive
and mandatory relief shall be cumulative and in addition to
whatever other remedies the Employer may have at law or in
equity.
9. MISCELLANEOUS
(a) NOTICES. Any notices, consents, demands, requests, approvals,
and other communications to be given under this Agreement by
any party to the other shall be deemed to have been duly
given if given in writing and personally delivered or sent by
mail, registered or certified, postage prepaid with return
receipt requested, at the address specified beside each
party's signature at the end of this Agreement. Notices
delivered personally or by telegram, telex, or telecopy shall
be deemed communicated as of actual receipt; mailed notices
shall be deemed communicated as of 10:00 a.m. on the third
business day after mailing. Any party may change its address
for notice hereunder by giving notice of such change in the
manner provided in this paragraph.
(b) ENTIRE AGREEMENT. This Agreement supersedes any and all other
agreements, either oral or written, between the parties
hereto with respect to the subject matter hereof and contains
all of the covenants and agreements between the parties with
respect thereto.
(c) MODIFICATION AND WAIVER. No change or modification of this
Agreement shall be valid or binding upon the parties hereto,
nor shall any waiver of any term or condition in the future
be so binding, unless such change or modification or waiver
shall be in writing and signed by the party against whom or
which such waiver is sought to be enforced. The waiver by the
Employer of a breach of any provision of this Agreement by
the Employee shall not operate or be construed as a waiver of
any subsequent breach by the Employee.
(d) GOVERNING LAW. This Agreement, and the rights and obligations
of the parties hereto, shall be governed by and construed in
accordance with the laws of the State of Texas and shall be
performable in Dallas, Texas. Venue of any litigation arising
hereunder shall be in a court of competent jurisdiction in
Dallas, Texas.
(e) COUNTERPARTS. This Agreement may be executed in counterparts,
including facsimile, each of which shall constitute an
original, but all of which shall constitute one and the same
document.
Employment Agreement by and Between One Up and Joe Meredith
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(f) COST. If any action at law or in equity is necessary to
enforce or interpret the terms of this Agreement, the
prevailing party shall be entitled to reasonable attorneys'
fees, costs, and necessary disbursements in addition to any
other relief to which it may be entitled.
(g) ASSIGNMENT. Employer shall have the right to assign this
Agreement to its successors or assigns. The terms
"successors" and "assigns" shall include any person,
corporation, partnership, or other entity that buys all or
substantially all of Employer's assets or a controlling
interest of its stock, or with which the Employer merges or
engages in a share exchange. The rights and duties of
Employee hereunder are personal, and no such right may be
assigned or duly delegated by One Up or its successor in
interest.
(h) BINDING EFFECT. This Agreement shall be binding upon the
parties hereto, together with their respective executors,
administrators, successors, personal representative, heirs,
and permitted assigns.
(i) ESTATE. If Employee dies prior to the expiration of the term
of employment, any moneys that may be due from Employer under
this Agreement as of the date of death shall be paid to the
estate.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
EMPLOYER:
Address: ONE UP CORPORATION
12801 Stemmons Freeway, Suite 710 By: /s/ CURTIS OVERSTREET
---------------------------------- ------------------------------
Farmers Branch, Texas 75234 Title: President/CEO
---------------------------------- ---------------------------
Address: EMPLOYEE:
4515 Shenandoah /s/ JOE B. MEREDITH
---------------------------------- ---------------------------------
Signature
Dallas, TX 75205 Joe B. Meredith
---------------------------------- ---------------------------------
Print Name
Employment Agreement by and Between One Up and Joe Meredith
8
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EXHIBIT "A"
To the Employment Agreement By and Between
Joe Meredith and One Up
OTHER COMPENSATION
(1) Additional Compensation: Provided the Employee is still employed by the
Employer under the terms of this agreement, the Employee shall be
eligible for participation in the following:
(a) Sales Commission: Employee may participate in sales commissions as
outlined in the Company's business plan as accepted by the Board of
Directors of the Company.
(b) Key Employee Stock Option Plan: The Employee will be granted options to
purchase 2% of the total amount of shares outstanding (currently
27,446,164) as of the date of this agreement. The exercise price will be
the closing bid price on the day this agreement is signed. The options
will vest 1/24th each month for 24 months beginning on the date this
agreement is signed. Dilution protection exists for recapitalizations,
stock splits, stock dividends, and for issuance of stock or derivative
securities at below fair market value. Options terminate, whether vested
or not, at the end of the thirty days following the resignation of the
employee, and at the end of twelve months, whether vested or not, in the
event of death or disability as described in this agreement. All options
become fully vested upon sale of the Company. All options terminate
immediately in the event the Employee is terminated for "just cause" as
described in this agreement.
/s/ JOE B. MEREDITH /s/ C. OVERSTREET
6/1/97 6/1/97
<PAGE> 1
EXHIBIT 10.5
EMPLOYMENT AGREEMENT
AGREEMENT entered into as of July 1, 1997 by and between One Up
Corporation, a Texas corporation with its principal offices at 12801
Stemmons Freeway, Suite 710, Farmers Branch, Texas 75234, the
"Employer" or "One Up" and Rick J. Johnson, an individual residing at
1535 Ginger Drive, Carrollton, Texas 75007, (the "Employee").
WHEREAS, the Employee has been accepted for employment by One Up
as Chief Operating Officer, which position shall be deemed by One Up to
be a key position within the corporation; and,
WHEREAS, One Up desires to have the Employee make their services
available to One Up; and,
WHEREAS, One Up shall employ the Employee on the condition that,
in so doing, it shall have protected its goodwill, trade secrets and
other proprietary or confidential information, business accounts and
patronage; and,
WHEREAS, the Employee desires to render such services on the terms
and conditions set forth herein and agrees to protect One Up's
goodwill, trade secrets and other proprietary or confidential
information, business accounts and patronage.
NOW, THEREFORE, in consideration of the mutual promises set forth
herein and for other good and valuable consideration, the sufficiency
of which is hereby acknowledged, the parties hereto agree as follows:
1. DUTIES, COMPENSATION, VACATION, TRAVEL, AND EXPENSES
(a) The Employee shall be responsible to perform the duties of
Chief Operating Officer and such other activities as One Up
may, from time to time, reasonably assign to him/her. The
Employee agrees to perform such duties to the best of their
ability and to exclusively devote their energies and skill to
the performance of their duties during business hours and for
such additional time as may be necessary to perform such
duties. During the Term of Employment, the Employee shall be
governed by the terms of this Agreement and subject to the
supervision and direction of the Board of Directors of One
Up. One Up reserves the right to reasonably change, from time
to time, the nature and scope of the Employee's duties and
the place where such duties shall be performed;
Employment Agreement by and Between One Up and Rick Johnson
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(b) One Up agrees to employ the Employee and the Employee agrees
to accept employment by One Up on a full time basis at a
starting annual salary of $125,000.00, which salary shall be
paid in semi-monthly installments on the 15th and last day of
each month or such other pay periods established from time to
time by One Up pursuant to its standard employment practices
during the term of Employment as hereinafter defined;
(c) The Employee shall be eligible under one or more group
policies of health insurance, life insurance and disability
insurance on the same terms and conditions as the benefits
normally provided to its employees by One Up;
(d) Such other compensation including participation in Cash Bonus
and the Employee Stock Option Plan as defined in Exhibit A
hereto and such other incentives as One Up's Board of
Directors may, from time to time, in its sole discretion,
determine;
(e) Each year the salary payable to the Employee shall be
reviewed and may be adjusted upward as One Up may deem
reasonable and warranted by the efforts of the Employee on
behalf of One Up, provided, however, that this provision
shall not be construed as creating any obligation on the part
of One Up to award or pay any salary increase or bonus to the
Employee;
(f) The Employee shall receive a paid vacation of 10 business
days during each year of the Term of Employment as published
in the One Up Employee Manual; and,
(g) The Employee, throughout the term of this Agreement, shall be
reimbursed for reasonable travel and other expenses incurred
and accounted for in the conduct of One Up business pursuant
to, and in accordance with, One Up's normal practice.
2. TERM OF EMPLOYMENT
(a) The "Term of Employment" as used herein means that period
during which One Up will employ the Employee in its business,
and the Employee will work for One Up beginning from the date
hereof and for a period of one year thereafter. After the
expiration of the term described above, the Term of
Employment shall continue from year to year unless or until:
(i) such employment shall have been terminated as hereinafter
provided; (ii) this Agreement shall have been renewed or
replaced by mutual agreement of the parties hereto; or,
(iii) the Employee shall have resigned their position; (iv)
or upon thirty (30) days written notice by either party at
the end of the term of employment (initial or renewal term);
(b) Notwithstanding any provision of the Agreement, the
employment of the Employee shall be terminated upon: (i)
resignation of the Employee from employment, (ii) the death
or inability of the
Employment Agreement by and Between One Up and Rick Johnson
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<PAGE> 3
Employee to continue to provide his services by reason of
permanent disability, or, (iii) for just cause upon notice of
such termination of the Employee. The term "just cause" as
used in this Agreement means: That the Employee is unable to
fulfill their duties under this Agreement because of the
continued abuse of alcohol or use of a controlled substance;
That the Employee has become unable to perform their duties
under this Agreement for a period of at least three
consecutive calendar months as a result of illness or
otherwise; The commission by the Employee of an act of fraud
or embezzlement against One Up; The Employee having been
convicted of a felony involving moral turpitude; or the
Employee shall resign from employment or the Employee and One
Up shall mutually agree to terminate this Agreement.
(c) It is agreed and acknowledged that in the event Employee
voluntarily terminates their employment with Employer or
Employer terminates Employee for "just cause," the Employer's
obligation to pay any compensation (base salary or
commission, if any) to Employee shall cease upon the
effective date of such termination.
3. NONDISCLOSURE COVENANTS
The Employee, during the Term of Employment under this
Agreement, shall have access to and become familiar with
various trade secrets consisting of, but not limited to,
processes, computer programs, compilations of information,
records, sales procedures, customer requirements, pricing
techniques, customer lists, methods of doing business and
other confidential information (collectively referred to as
the "Trade Secrets"), which are owned by Employer and
regularly used in the operation of its business. Employee
shall not use in any way or disclose any of the Trade
Secrets, directly or indirectly, either during the term of
the Agreement or at any time thereafter, except as required
in the course of their employment under this Agreement. All
files, records, documents, information, data, and similar
items relating to the business of Employer, whether prepared
by Employee or otherwise coming into their possession, shall
remain the exclusive property of the Employer and shall not
be removed from the premises of the Employer under any
circumstance without the prior written consent of an
authorized officer of the Employer (except in the ordinary
course of business during Employee's period of active
employment under this Agreement), and in any event shall be
promptly delivered to the Employer (without Employee
retaining any copies) upon termination of the Agreement.
Employment Agreement by and Between One Up and Rick Johnson
3
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4. NON-COMPETITION COVENANTS
(a) Without the prior written consent of the Employer, the
Employee shall not, during the term of employment with
Employer, directly or indirectly, as a director, officer,
agent, employee, consultant, or independent contractor, or in
any other individual or representative capacity, (i) invest
(other than investments in publicly owned companies which
constitute not more the 1% of the outstanding securities of
any such company) or engage in any business or activity that
is in competition with the business of Employer or any of its
affiliates, (ii) accept employment with, or render services
to, a competitor of the Employer or any of its affiliates, or
(iii) take any action inconsistent with the fiduciary
relationship of an employee to an employer. As used in this
Agreement, "affiliates" shall mean persons or entities that,
directly or indirectly through one or more intermediaries,
control or are controlled by, or are under common control
with, the Employer;
(b) Upon termination of the Employee's employment with the
Employer for just cause or upon voluntary resignation, and
for a period of one year thereafter, the Employee shall not,
directly or indirectly, as a director, officer, agent,
employee, consultant, or independent contractor, or in any
other individual or representative capacity, (i) invest
(other than investments in publicly-owned companies which
constitute not more that 1% of the outstanding securities of
any such company) or engage as an owner or equity participant
in any business or activity that is competition with the
business of Employer or any of its affiliates, (ii) accept
employment with or render services to a competitor or
intending to compete with the Employer or any of its
affiliates, or (iii) while or for the purpose of engaging in
competition with the Employer or any of its affiliates in any
area whatsoever, contact, solicit, or attempt to solicit or
accept business from any of the customers of the Employer or
any of its affiliates during the term of the Employee's
employment with the Employer or the Employee's termination or
cessation of employment with the Employer, or from any person
or entity whose business the Employer or any of its
affiliates were actively soliciting as such time without the
written consent of the Employer. The Employer shall provide
the Employee with the names of such customers of the Employer
and its affiliates described in clause (iii) of this
Paragraph 4 upon request therefore, or upon termination of
the Employee's employment (but failure to do so shall not
release Employee from obligations under this Section); such
names shall be for all purposes and at all times be
considered Trade Secrets subject to the covenants set forth
in Section 4 hereof. As used herein, a person or entity is in
Employment Agreement by and Between One Up and Rick Johnson
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<PAGE> 5
"competition" with or is a "competitor" of Employer or any of
its affiliates if such person or entity is in the business of
migration, conversion, or porting software, assistance or
services, or providing, or planning to provide the same or
similar services, products, or systems as the Employer.
5. COVENANT NOT TO HIRE
For a period of two (2) years after the termination of
employment with the Employer for any reason whatsoever, the
Employee shall not, on their behalf or on behalf of any other
person, partnership, association, corporation, or other
entity, hire, or solicit any employee of Employer or any of
its affiliates, or in any manner attempt to influence or
induce any employee of Employer or any of its affiliates, to
leave the employment of the Employer or its affiliates, nor
shall the Employee use or disclose to any person,
partnership, association, corporation, or other entity any
information obtained while an employee of the Employer
concerning the names and addresses of the Employer's or any
of its affiliates' employees.
6. SEVERABILITY
Notwithstanding anything to the contrary herein, or in any
exhibit hereto the Employee agrees that the non-competition
covenants, nondisclosure covenants, and covenant not to hire
set forth above each constitute separate agreements
independently supported by good and adequate consideration,
the actual receipt and adequacy of which are hereby
acknowledged by the Employee, and shall be severable from
other provisions of, and shall survive, this Agreement. The
existence of any claim or cause of action of the Employee
against the Employer, whether predicated on the Agreement or
otherwise, shall not constitute a defense to the enforcement
by the Employer of the covenants and agreements of the
Employee contained in the non-competition, nondisclosure, or
non-hiring covenants. If any provision of this Agreement is
held to be illegal, invalid, or unenforceable under present
or future laws effective during the term hereof, such
provision shall be fully severable and this Agreement shall
be construed as enforced as if such illegal, invalid, or
unenforceable provision never comprised a part of this
Agreement; and the remaining provisions of this Agreement
shall remain in full force and effect and shall not be
affected by the illegal, invalid, or unenforceable provision
or by its severance herefrom. Furthermore, in lieu of such
illegal, invalid, or unenforceable provision, there shall be
added automatically as part
Employment Agreement by and Between One Up and Rick Johnson
5
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of this Agreement a provision as similar in its terms to such
illegal, invalid or unenforceable provisions may be possible
and be legal, valid, and enforceable.
7. INVENTIONS
The Employee shall promptly disclose, grant, and assign to
Employer for its sole use and benefit any and all inventions,
improvements, technical information, and suggestions relating
in any way to the products of the Employer or any of its
affiliates or capable of beneficial use by the Employer or
any of its affiliates, which the Employee has in the past
conceived, developed, or acquired, or may conceive, develop,
or acquire during the term hereof (whether or not during
usual working hours), together with all patent applications,
letter patents, copyrights, and reissues thereof that may at
any time be granted for or upon any such inventions,
improvement, or technical information. In connection
therewith, Employee shall promptly at all times during and
after the term hereof:
(a) Execute and deliver such applications, assignments,
descriptions, and other instruments as may be necessary or
proper in the opinion of Employer to vest title to such
inventions, improvements, technical information, suggestions,
patent applications, patents, copyrights and reissues thereof
to Employer and to enable it to obtain and maintain the
entire right and title thereto throughout the world; and
(b) Render to the Employer, at its expense, all such assistance
as it may require in the prosecution of applications,
aforesaid patents, copyrights, and reissues thereof, in the
prosecution or defense of interference which may be declared
involving any said applications, copyrights, or patents, and
in any litigation in which the Employer may be involved
relating to any such inventions, improvements, technical
information, suggestions, patent applications, patents,
copyrights and reissues thereof.
8. REMEDIES
The Employee acknowledges and recognizes that a violation of
the restrictions, agreements, or covenants contained in
Sections 3, 4, 5 and 7 of this Agreement will cause such
damage to Employer as will be irreparable and that Employer
will have no adequate remedy at law for such violation or
threatened violation. Accordingly, the Employee agrees that
the Employer shall be entitled, as a matter of right, to seek
and obtain an injunction from any court of competent
Employment Agreement by and Between One Up and Rick Johnson
6
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jurisdiction, restraining any further violation or threatened
violation of such restrictions, agreements, or covenants and
granting mandatory relief compelling Employee to carry out
obligations hereunder. Such right to injunctive and mandatory
relief shall be cumulative and in addition to whatever other
remedies the Employer may have at law or in equity.
9. MISCELLANEOUS
(a) NOTICES. Any notices, consents, demands, requests, approvals,
and other communications to be given under this Agreement by
any party to the other shall be deemed to have been duly
given if given in writing and personally delivered or sent by
mail, registered or certified, postage prepaid with return
receipt requested, at the address specified beside each
party's signature at the end of this Agreement. Notices
delivered personally or by telegram, telex, or telecopy shall
be deemed communicated as of actual receipt; mailed notices
shall be deemed communicated as of 10:00 a.m. on the third
business day after mailing. Any party may change its address
for notice hereunder by giving notice of such change in the
manner provided in this paragraph.
(b) ENTIRE AGREEMENT. This Agreement supersedes any and all other
agreements, either oral or written, between the parties
hereto with respect to the subject matter hereof and contains
all of the covenants and agreements between the parties with
respect thereto.
(c) MODIFICATION AND WAIVER. No change or modification of this
Agreement shall be valid or binding upon the parties hereto,
nor shall any waiver of any term or condition in the future
be so binding, unless such change or modification or waiver
shall be in writing and signed by the party against whom or
which such waiver is sought to be enforced. The waiver by the
Employer of a breach of any provision of this Agreement by
the Employee shall not operate or be construed as a waiver of
any subsequent breach by the Employee.
(d) GOVERNING LAW. This Agreement, and the rights and obligations
of the parties hereto, shall be governed by and construed in
accordance with the laws of the State of Texas and shall be
performable in Dallas, Texas. Venue of any litigation arising
hereunder shall be in a court of competent jurisdiction in
Dallas, Texas.
(e) COUNTERPARTS. This Agreement may be executed in counterparts,
including facsimile, each of which shall constitute an
original, but all of which shall constitute one and the same
document.
(f) COST. If any action at law or in equity is necessary to
enforce or interpret the terms of this Agreement, the
prevailing party shall be
Employment Agreement by and Between One Up and Rick Johnson
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entitled to reasonable attorneys' fees, costs, and necessary
disbursements in addition to any other relief to which it may
be entitled.
(g) ASSIGNMENT. Employer shall have the right to assign this
Agreement to its successors or assigns. The terms
"successors" and "assigns" shall include any person,
corporation, partnership, or other entity that buys all or
substantially all of Employer's assets or a controlling
interest of its stock, or with which the Employer merges or
engages in a share exchange. The rights and duties of
Employee hereunder are personal, and no such right may be
assigned or duly delegated by One Up or its successor in
interest.
(h) BINDING EFFECT. This Agreement shall be binding upon the
parties hereto, together with their respective executors,
administrators, successors, personal representative, heirs,
and permitted assigns.
(i) ESTATE. If Employee dies prior to the expiration of the term
of employment, any moneys that may be due from Employer under
this Agreement as of the date of death shall be paid to the
estate.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
EMPLOYER:
Address: ONE UP CORPORATION
12801 Stemmons Freeway, Suite 710 By: /s/ CURTIS OVERSTREET
--------------------------------- -----------------------------
Farmers Branch, Texas 75234 Title: President/CEO
--------------------------------- --------------------------
Address: EMPLOYEE:
1535 Ginger Drive /s/ RICKY J. JOHNSON
--------------------------------- --------------------------------
Signature
Carrollton, TX 75007 Ricky J. Johnson 6/13/97
--------------------------------- --------------------------------
Print Name
Employment Agreement by and Between One Up and Rick Johnson
8
<PAGE> 9
EXHIBIT "A"
To the Employment Agreement By and Between
Rick Johnson and One Up
OTHER COMPENSATION
(1) Additional Compensation: Provided the Employee is still employed by the
Employer under the terms of this agreement, the Employee shall be eligible
for participation in the following:
(a) Key Employee Cash Bonus Plan: The Employee shall be eligible for an
annual bonus of $30,000. The prorated bonus for the last half of 1997 is
$15,000. Additionally the employee shall be eligible for a similar bonus in
1998. The employee is eligible for the 1997 bonus if he is an employee as of
12-31-97.
The 1997 bonus will be based upon the following criteria:
Profitability of $100,000.00 net income before taxes for the period of May
1, 1997 through December 31, 1997. The 1998 profitability number will be
determined during the budget process in November 1997. Allocation percentage
50% of the total bonus or $7,500.00. Minimum performance eligibility 60%.
May earn greater than 100% of the bonus by exceeding the goal of
$100,000.00.
Positive Cash Flow of at least $150,000.00 for the last six months of 1997.
Allocation 50% of the total bonus. May not exceed 100%.
A minimum of 80% of the earned bonus will be paid no later than 1-31-98,
with the balance to be paid no later than upon completion of the audit of
the year end financial results.
(b) Key Employee Stock Option Plan: The Employee will be granted options to
purchase 2% of the total amount of shares outstanding (currently
27,446,164) as of the date of this agreement. The exercise price will be
the closing Bid price on the day this agreement is signed. The options
will vest 1/24th each month for 24 months beginning on the date this
agreement is signed. Dilution protection exists for recapitalizations,
stock splits, stock dividends, and for issuance of stock or derivative
securities at below fair market value. Options terminate, whether vested
or not, at the end of the thirty days following the resignation of the
employee, and at the end of twelve months, whether vested or not, in the
event of death or disability as described in this agreement. All options
become fully vested upon sale of the Company. All options terminate
immediately in the event the Employee is terminated for "just cause" as
described in this agreement.
(c) Special Situation: In that the Company is currently in a state of
financial uncertainty, the company will escrow the Employee's first
years annual salary. In the event of business failure the employee will
be entitled to the balance of the escrow account.
(d) Severance Pay: In the event that the Company and the employee do not
reach agreement to renew the Employee's contract at the end of the
initial term or in the event, Employee is terminated without "just
cause" during the initial term, Employee is entitled to receive payment
of salary for the remaining period of the Employment term. Additionally,
Company will pay Employee a severance equal to three months base pay and
pay all normal benefits for a period of three months.
/s/ RICKY J. JOHNSON /s/ CURTIS OVERSTREET
----------------------------- -------------------------------
6/13/97 6/13/97
<PAGE> 1
EXHIBIT 10.6
EMPLOYMENT AGREEMENT
AGREEMENT entered into as of April 1, 1998 by and between MigraTEC,
Inc., a Florida corporation with its principal offices at 12801 Stemmons
Freeway, Suite 710, Farmers Branch, Texas 75234, the "Employer" or "MigraTEC"
and Mark C. Myers, an individual residing at 1913 Deerfield Drive, Plano, Texas
75023 (the "Employee").
WHEREAS, the Employee has been accepted for employment by MigraTEC as
Chief Financial Officer and General Counsel, which position shall be deemed by
MigraTEC to be a key position within the corporation; and,
WHEREAS, MigraTEC desires to have the Employee make their services
available to MigraTEC; and,
WHEREAS, MigraTEC shall employ the Employee on the condition that, in
so doing, it shall have protected its goodwill, trade secrets and other
proprietary or confidential information, business accounts and patronage; and,
WHEREAS, the Employee desires to render such services on the terms and
conditions set forth herein and agrees to protect MigraTEC's goodwill, trade
secrets and other proprietary or confidential information, business accounts and
patronage.
NOW, THEREFORE, in consideration of the mutual promises set forth
herein and for other good and valuable consideration, the sufficiency of which
is hereby acknowledged, the parties hereto agree as follows:
1. DUTIES, COMPENSATION, VACATION, TRAVEL AND EXPENSES
(a) The Employee shall be responsible to perform the duties of
Chief Financial Officer and General Counsel and such other
activities as MigraTEC may, from time to time, reasonably
assign to him/her. The Employee agrees to perform such duties
to the best of their ability and to exclusively devote their
energies and skill to the performance of their duties during
business hours and for such additional time as may be
necessary to perform such duties. During the Term of
Employment, the Employee shall be governed by the terms of
this Agreement and subject to the supervision and direction
of the Board of Directors of MigraTEC. MigraTEC reserves
the right to reasonably change, from time to time, the nature
and scope of the Employee's duties and the place where such
duties shall be performed;
Employment Agreement by and Between MigraTEC and Mark C. Myers
1
<PAGE> 2
(b) MigraTEC agrees to employ the Employee and the Employee
agrees to accept employment by MigraTEC on a full time basis
at a starting annual salary of $125,000, which salary shall
be paid in semi-monthly installments on the 15th and last day
of each month or such other pay periods established from time
to time by MigraTEC pursuant to its standard employment
practices during the term of Employment as hereinafter
defined;
(c) The Employee shall be eligible under one or more group
policies of health insurance, life insurance and disability
insurance on the same terms and conditions as the benefits
normally provided to its employees by MigraTEC;
(d) Such other compensation including Participation in the Key
Employee Cash Bonus and the grant of a stock option as
defined in Exhibit A hereto and such other incentives as
MigraTEC's Board of Directors may, from time to time, in its
sole discretion, determine;
(e) Each year the salary payable to the Employee shall be
reviewed and may be adjusted upward as MigraTEC may deem
reasonable and warranted by the efforts of the Employee on
behalf of MigraTEC, provided, however, that this provision
shall not be construed as creating any obligation on the part
of MigraTEC to award or pay any salary increase or bonus to
the Employee;
(f) The Employee shall receive a paid vacation of ten (10)
business days during each year (fifteen (15) after two years)
of the term of Employment as published in the MigraTEC
Employee Manual and,
(g) The Employee, throughout the term of this Agreement, shall be
reimbursed for reasonable travel and other expenses incurred
and accounted for in the conduct of MigraTEC business
pursuant to, and in accordance with, MigraTEC's normal
practice.
2. TERM OF EMPLOYMENT
(a) The "Term of Employment" as used herein means that period
during which MigraTEC will employ the Employee in its
business, and the Employee will work for MigraTEC beginning
from the date hereof and for a period of one (1) year
thereafter. After the expiration of the term described above,
the Term of Employment shall continue from year to year
unless or until: (i) such employment shall have been
terminated as hereinafter provided (ii); this Agreement
shall have been renewed or replaced by mutual agreement of
the parties hereto; or, (iii) the Employee shall have
resigned their position; (iv) or upon thirty (30) days
written notice by either party at the end of the term of
employment (initial or renewal term);
Employment Agreement by and Between MigraTEC and Mark C. Myers
2
<PAGE> 3
(b) Notwithstanding any provision of the Agreement, the
employment of the Employee shall be terminated upon: (i)
resignation of the Employee from employment, (ii) the death
or inability of the Employee to continue to provide his
services by reason of permanent disability, or, (iii) for
just cause upon notice of such termination of the Employee.
The term "just cause" as used in this Agreement means: That
the Employee is unable to fulfill their duties under this
Agreement because of the continued abuse of alcohol or use of
a controlled substance; That the Employee has become unable
to perform their duties under this Agreement for a period of
at least three consecutive calendar months as a result of
illness or otherwise; The commission by the Employee of an
act of fraud or embezzlement against MigraTEC; The Employee
having been convicted of a felony involving moral turpitude;
or the Employee shall resign from employment or the Employee
and MigraTEC shall mutually agree to terminate this
Agreement.
(c) It is agreed and acknowledged that in the event Employee
voluntarily terminates their employment with Employer or
Employer terminates Employee for "just cause," the Employer's
obligation to pay any compensation (base salary or
commission, if any) to Employee shall cease upon the
effective date of such termination.
3. NONDISCLOSURE COVENANTS
The Employee, during the Term of Employment under this
Agreement, shall have access to and become familiar with
various trade secrets consisting of, but not limited to,
processes, computer programs, compilations of information,
records, sales procedures, customer requirements, pricing
techniques, customer lists, methods of doing business and
other confidential information (collectively referred to as
the "Trade Secrets"), which are owned by Employer and
regularly used in the operation of its business. Employee
shall not use in any way or disclose any of the Trade
Secrets, directly or indirectly, either during the term of
the Agreement or at any time thereafter, except as required
in the course of their employment under this Agreement. All
files, records, documents, information, data, and similar
items relating to the business of Employer, whether prepared
by Employee or otherwise coming into their possession, shall
remain the exclusive property of the Employer and shall not
be removed from the premises of the Employer under any
circumstance without the prior written consent of an
authorized officer of the Employer (except in the ordinary
course of business during Employee's period of active
employment under this Agreement), and in any event shall be
promptly delivered to the
Employment Agreement by and Between MigraTEC and Mark C. Myers
3
<PAGE> 4
Employer (without Employee retaining any copies) upon
termination of the Agreement.
4. NON-COMPETITION COVENANTS
(a) Without the prior written consent of the Employer, the
Employee shall not, during the term of employment with
Employer, directly or indirectly, as a director, officer,
agent, employee, consultant, or independent contractor, or in
any other individual or representative capacity, (i) invest
(other than investments in publicly owned companies which
constitute not more than 1% of the outstanding securities of
any such company) or engage in any business or activity that
is in competition with the business of Employer or any of its
affiliates, (ii) accept employment with, or render services
to, a competitor of the Employer or any of its affiliates, or
(iii) take any action inconsistent with the fiduciary
relationship of an employee to an employer. As used in this
Agreement, "affiliates" shall mean persons or entities that,
directly or indirectly through one or more intermediaries,
control or are controlled by, or are under common control
with, the Employer;
(b) Upon termination of the Employee's employment with the
Employer for just cause or upon voluntary resignation, and
for a period of one year thereafter, the Employee shall not,
directly or indirectly, as a director, officer, agent,
employee, consultant, or independent contractor, or in any
other individual or representative capacity, (i) invest
(other than investments in publicly-owned companies which
constitute not more that 1% of the outstanding securities of
any such company) or engage as an owner or equity participant
in any business or activity that is competition with the
business of Employer or any of its affiliates, (ii) accept
employment with or render services to a competitor or
intending to compete with the Employer or any of its
affiliates, or (iii) while or for the purpose of engaging in
competition with the Employer or any of its affiliates in any
area whatsoever, contact, solicit, or attempt to solicit or
accept business from any of the customers of the Employer or
any of its affiliates during the term of the Employee's
employment with the Employer or the Employee's termination or
cessation of employment with the Employer, or from any person
or entity whose business the Employer or any of its
affiliates were actively soliciting as such time without the
written consent of the Employer. The Employer shall provide
the Employee with the names of such customers of the Employer
and its affiliates described in clause (iii) of this
Paragraph 4 upon request therefore, or upon termination of
the Employee's employment (but failure to
Employment Agreement by and Between MigraTEC and Mark C. Myers
4
<PAGE> 5
do so shall not release Employee from obligations under this
Section); such names shall be for all purposes and at all
times be considered Trade Secrets subject to the covenants
set forth in Section 4 hereof. As used herein, a person or
entity is in "competition" with or is a "competitor" of
Employer or any of its affiliates if such person or entity is
in the business of migration, conversion, or porting
software, assistance or services, or providing, or planning
to provide the same or similar services, products, or systems
as the Employer.
5. COVENANT NOT TO HIRE
For a period of two (2) years after the termination of
employment with the Employer for any reason whatsoever, the
Employee shall not, on their behalf of any other person,
partnership, association, corporation, or other entity, hire,
or solicit any employee of Employer or any of its affiliates,
or in any manner attempt to influence or induce any employee
of Employer or any of its affiliates, to leave the employment
of the Employer or its affiliates, nor shall the Employee use
or disclose to any person, partnership, association,
corporation, or other entity any information obtained while
an employee of the Employer concerning the names and
addresses of the Employer's or any of its affiliates'
employees.
6. SEVERABILITY
Notwithstanding anything to the contrary herein, or in any
exhibit hereto the Employee agrees that the non-competition
covenants, nondisclosure covenants, and covenant not to hire
set forth above each constitute separate agreements
independently supported by good and adequate consideration,
the actual receipt and adequacy of which are hereby
acknowledged by the Employee, and shall be severable from
other provisions of, and shall survive, this Agreement. The
existence of any claim or cause of action of the Employee
against the Employer, whether predicated on the Agreement or
otherwise, shall not constitute a defense to the enforcement
by the Employer of the covenants and agreements of the
Employee contained in the non-competition, nondisclosure, or
non-hiring covenants. If any provision of this Agreement is
held to be illegal, invalid, or unenforceable under present
or future laws effective during the term hereof, such
provision shall be fully severable and this Agreement shall
be construed as enforced as if such illegal, invalid, or
unenforceable provision never comprised a part of this
Agreement; and the remaining provisions of this
Employment Agreement by and Between MigraTEC and Mark C. Myers
5
<PAGE> 6
Agreement shall remain in full force and effect and shall not
be affected by the illegal, invalid, or unenforceable
provision or by its severance herefrom. Furthermore, in lieu
of such illegal, invalid, or unenforceable provision, there
shall be added automatically as part of this Agreement a
provision as similar in its terms to such illegal, invalid or
unenforceable provisions may be possible and be legal, valid,
and enforceable.
7. INVENTIONS
The Employee shall promptly disclose, grant, and assign to
Employer for its sole use and benefit any and all inventions,
improvements, technical information, and suggestions relating
in any way to the products of the Employer or any of its
affiliates or capable of beneficial use by the Employer or
any of its affiliates, which the Employee has in the past
conceived, developed, or acquired, or may conceive, develop,
or acquire during the term hereof (whether or not during
usual working hours), together with all patent applications,
letter patents, copyrights, and reissues thereof that may at
any time be granted for or upon any such inventions,
improvement, or technical information. In connection
therewith, Employee shall promptly at all times during and
after the term hereof:
(a) Execute and deliver such applications, assignments,
descriptions, and other instruments as may be necessary or
proper in the opinion of Employer to vest title to such
inventions, improvements, technical information, suggestions,
patent applications, patents, copyrights and reissues thereof
to Employer and to enable it to obtain and maintain the
entire right and title thereto throughout the world; and
(b) Render to the Employer, at its expense, all such assistance
as it may require in the prosecution of applications,
aforesaid patents, copyrights, and reissues thereof, in the
prosecution or defense of interference which may be declared
involving any said applications, copyrights, or patents, and
in any litigation in which the Employer may be involved
relating to any such inventions, improvements, technical
information, suggestions, patent applications, patents,
copyrights and reissues thereof.
8. REMEDIES
The Employee acknowledges and recognizes that a violation of
the restrictions, agreements, or covenants contained in
Sections 3, 4, 5 and 7 of this Agreement will cause such
damage to Employer as
Employment Agreement by and Between MigraTEC and Mark C. Myers
6
<PAGE> 7
will be irreparable and that Employer will have no adequate
remedy at law for such violation or threatened violation.
Accordingly, the Employee agrees that the Employer shall be
entitled, as a matter of right, to seek and obtain an
injunction from any court of competent jurisdiction,
restraining any further violation or threatened violation of
such restrictions, agreements, or covenants and granting
mandatory relief compelling Employee to carry out obligations
hereunder. Such right to injunctive and mandatory relief
shall be cumulative and in addition to whatever other
remedies the Employer may have at law or in equity.
9. MISCELLANEOUS
(a) NOTICES. Any notices, consents, demands, requests, approvals,
and other communications to be given under this Agreement by
any party to the other shall be deemed to have been duly
given if given in writing and personally delivered or sent by
mail, registered or certified, postage prepaid with return
receipt requested, at the address specified beside each
party's signature at the end of this Agreement. Notices
delivered personally or by telegram, telex, or telecopy shall
be deemed communicated as of actual receipt; mailed notices
shall be deemed communicated as of 10:00 am. on the third
business day after mailing. Any party may change its address
for notice hereunder by giving notice of such change in the
manner provided in this paragraph.
(b) ENTIRE AGREEMENT. This Agreement supersedes any and all other
agreements, either oral or written, between the parties
hereto with respect to the subject matter hereof and contains
all of the covenants and agreements between the parties with
respect thereto.
(c) MODIFICATION AND WAIVER. No change or modification of this
Agreement shall be valid or binding upon the parties hereto,
nor shall any waiver of any term or condition in the future
be so binding, unless such change or modification or waiver
shall be in writing and signed by the party against whom or
which such waiver is sought to be enforced. The waiver by the
Employer of a breach of any provision of this Agreement by
the Employee shall not operate or be construed as a waiver of
any subsequent breach by the Employee.
(d) GOVERNING LAW. This Agreement, and the rights and obligations
of the parties hereto, shall be governed by and construed in
accordance with the laws of the State of Texas and shall be
performable in Dallas, Texas. Venue of any litigation arising
hereunder shall be in a court of competent jurisdiction in
Dallas, Texas.
Employment Agreement by and Between MigraTEC and Mark C. Myers
7
<PAGE> 8
(e) COUNTERPARTS. This Agreement may be executed in counterparts,
including facsimile, each of which shall constitute an
original, but all of which shall constitute one and the same
document.
(f) COST. If any action at law or in equity is necessary to
enforce or interpret the terms of this Agreement, the
prevailing party shall be entitled to reasonable attorneys'
fees, costs, and necessary disbursements in addition to any
other relief to which it may be entitled.
(g) ASSIGNMENT. Employer shall have the right to assign this
Agreement to its successors or assigns. The terms
"successors" and "assigns" shall include any person,
corporation, partnership, or other entity that buys all or
substantially all of Employer's assets or a controlling
interest of its stock, or with which the Employer merges or
engages in a share exchange. The rights and duties of
Employee hereunder are personal, and no such right may be
assigned or duly delegated by MigraTEC or its successor in
interest.
(h) BINDING EFFECT. This Agreement shall be binding upon the
parties hereto, together with their respective executors,
administrators, successors, personal representative, heirs,
and permitted assigns.
(i) ESTATE. If Employee dies prior to the expiration of the term
of employment, any moneys that may be due from Employer under
this Agreement as of the date of death shall be paid to the
estate.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
EMPLOYER:
Address: MIGRATEC CORPORATION
12801 Stemmons Freeway, Suite 710 By: /s/ CURTIS OVERSTREET
- ------------------------------------- ------------------------------------
Farmers Branch, Texas 75234 Title: President/CEO
- ------------------------------------- ---------------------------------
Address: EMPLOYEE:
1913 Deerfield Drive, Plano, TX 75023 /s/ MARK C. MYERS
- ------------------------------------- ----------------------------------------
Signature
MARK C. MYERS
- ------------------------------------- ----------------------------------------
Print Name
Employment Agreement by and Between MigraTEC and Mark C. Myers
8
<PAGE> 9
EXHIBIT A
TO THE EMPLOYMENT AGREEMENT BY AND BETWEEN
MIGRATEC, INC. AND MARK C. MYERS
1. Additional Compensation: Provided the Employee is still employed by the
Employer under the terms of this Agreement, the Employee shall be eligible for
participation in the following:
a. Key Employee Cash Bonus Plan: The Employee shall be eligible for an
annual bonus of $25,000. The prorated bonus for the calendar year 1998 is
$18,750. Additionally, the Employee shall be eligible for a similar bonus in
1999. The Employee is eligible for the 1998 bonus if he is an employee as of
12-31-98.
b. Key Employee Stock Option Plan: The Employee is hereby granted an
option to purchase 900,000 shares of common stock of the Employer at a price of
$.20 (Twenty Cents) per share. The option will vest 1/24th each month for 24
months beginning April 1, 1998. Any unexercised portion of the option will
terminate, whether vested or not, either 1) at the end of the thirty (30) days
following the resignation of the Employee or 2) at the end of twelve (12) months
after the Employee's death or disability as described in this Agreement. It is
agreed that in the event Employer registers shares or options owned by any other
officer of Employer, Employer shall simultaneously register all shares or
options owned by Employee.
c. Severance Pay: In the event that the Company and the Employee do not
reach agreement to renew the Employee's contract at the end of the initial term
or in the event the Employee is terminated without "just cause" during the
initial term. Employee is entitled to receive payment of salary for the
remaining period of the Employment term. Additionally, in such event, the
Employer will pay the Employee a severance equal to three (3) month's base pay
and pay all normal benefits for a period of three (3) months.
Agreed and Executed this 1st day of April, 1998.
MigraTEC, Inc. Mark C. Myers, Employee
By: /s/ CURTIS OVERSTREET /s/ MARK C. MYERS
---------------------------------- --------------------------------------
Curtis Overstreet Signature
Its: President & CEO
----------------------------------
<PAGE> 1
EXHIBIT 10.7
AGREEMENT
This agreement ("Agreement") is made by and between MigraTEC, Inc.,
formerly One Up Corporation (hereinafter "MigraTEC"), a corporation at 12801
Stemmons Freeway, Suite 710, Farmers Branch, Texas, 75239 and Richard G. Dews
(hereinafter "Dews"), located at HC-57, Box 520, Reed Point, Montana, 59069.
Whereas, the parties agree and acknowledge that there are outstanding
issues related to matters which have occurred prior to the date of this
Agreement concerning possible claims which MigraTEC may have against Dews and
possible claims which Dews may have against MigraTEC; and
Whereas, the parties agree and acknowledge that they wish to resolve
and settle any and all of the outstanding issues and claims which either party
might have against the other related to or arising out of the employment of Dews
by MigraTEC or the duties of Dews as President and a director of MigraTEC; and
Whereas, in addition to settling all issues and claims between the
parties, the parties desire to arrange for the purchase by MigraTEC and sale by
Dews of certain shares of common stock in MigraTEC Corporation owned by Dews;
and
Whereas, the parties agree and acknowledge that the settlement of all
outstanding issues and claims which either party might have against the other
pursuant to the terms and conditions of this Agreement is fair, equitable and in
the best interests of both parties,
Now, in exchange for the mutual promises and obligations contained
herein, MigraTEC and Dews agree according to the terms of this Agreement which
follow:
1. Purchase And Sale Of Shares. MigraTEC agrees to purchase from Dews and
Dews agrees to sell to MigraTEC Nine Million Four Hundred Thousand
(9,400,000) shares of common stock in MigraTEC (hereinafter "the
Shares") pursuant to the terms of this Agreement.
2. Payment For Shares. MigraTEC agrees to pay Dews for the Shares the
amount of Seven Hundred Forty Thousand Dollars ($740,00.00) in the form
of cash or cashier's check at Closing as provided hereunder.
3. Registration Obligation. The parties hereby acknowledge and agree that
Dews will continue to own two million one thousand nine hundred
seventy-six (2,001,976) shares of unregistered common stock of MigraTEC
(the "Remaining Stock") after MigraTEC's purchase of the Shares as set
forth above. It is
1
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agreed that MigraTEC, at its own cost, will file a registration
statement including the registration of such Remaining Stock, or will
take other appropriate and necessary steps including but not limited to
obtaining an attorney's opinion letter as required by the SEC rules and
regulations to allow free trading of such Remaining Stock, no later
than May 1, 1998. MigraTEC will use its best efforts to see that such
stock registration or free trading status becomes effective as soon as
practicable after the filing of said registration statement or the
issuance of said opinion letter. It is expressly understood and agreed
that MigraTEC shall be barred from selling, conveying, or assigning, by
private placement or otherwise, any and all shares purchased by
MigraTEC hereunder unless and until Dews' said Remaining Stock shall be
registered, if necessary, and free trading. In no event shall MigraTEC,
after the effective date of this Agreement, undertake the registration
of any common stock in MigraTEC which does not include the registration
of the Remaining Stock.
4. Stock Option. As additional consideration to Dews for Dews' release of
MigraTEC as set forth herein below, MigraTEC hereby grants Dews a
transferable option to purchase up to Six Hundred Thousand (600,000)
shares of unrestricted and free trading common stock in MigraTEC at the
price of Twenty-Five Cents ($.25) per share. Such option shall become
effective on the effective date of this Agreement and shall expire at
5:00 P.M. on the two year anniversary of the effective date of this
Agreement. In order to exercise such option, in whole or in part, it is
agree that MigraTEC must receive payment from Dews, prior to the
expiration of the option, in the form of a cashier's check in the
correct amount for the number of shares being purchased. It is agreed
by the parties that the option covered by this section shall be
transferable by Dews subject to the exercise terms of the option.
5. Payment of Promissory Note. MigraTEC agrees to pay Dews the amount of
Sixty Thousand Dollars ($60,000.00) to Dews at Closing as provided
hereunder, in the form of cash or cashier's check, in full and complete
settlement of all obligations related to the Promissory Note from
MigraTEC to Dews, a copy of which is attached hereto as Attachment A to
Exhibit C.
6. Mutual Releases. The parties agree that they will execute the
applicable releases attached hereto as Exhibit B and Exhibit C at the
closing along with delivery of such other items as set forth
hereinafter in Section 9 below.
7. Marilyn Johnson Issues. As further consideration for the obligations of
Dews hereunder, MigraTEC agrees to pay to Marilyn Johnson the amount of
$68,250.00 pursuant to the terms of the Promissory Note attached hereto
as Exhibit D.
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8. Indemnification. With respect to the purchase of the Shares pursuant to
sections 1 and 2 of this Agreement, MigraTEC hereby agrees to indemnify
and hold Dews harmless with regard to any obligations which Dews might
have, as well as any rights or claims which MigraTEC, EAI Partners,
Inc., and/or Noble International Investments, Inc. might have pursuant
to that certain Stock Option Agreement, dated November 12, 1996, by and
among Dews, MigraTEC and EAI Partners, Inc.
9. Closing. The parties hereto agree that a mutually acceptable place,
time and date shall be selected by the parties for closing (hereinafter
the "Closing"). At the Closing, MigraTEC shall deliver to Dews the
following: (1) payment by cash or cashier's check in the amount of
Seven Hundred Forty Thousand Dollars ($740,000.00) referenced in
Section 2 hereinabove; (2) payment by cash or cashier's check in the
amount of Sixty Thousand Dollars ($60,000.00) referenced in Section 5
hereinabove; (3) a common stock certificate evidencing Two Million One
Thousand Nine Hundred Seventy-Six (2,001,976) shares of common stock in
MigraTEC, which stock certificate represents the remaining stock of
Dews in accordance with Section 3 hereinabove; and, (4) the original
release referred to in Section 6 hereinabove. At the Closing, Dews
shall deliver to MigraTEC the following: (1) common stock certificates
no. 2559, 2560, 2561, 2562, and 2563, collectively representing and
evidencing Six Million (6,000,000) shares of common stock in MigraTEC,
duly executed for transfer to MigraTEC by Dews, and expressly subject
to the above-referenced Option Agreement dated November 12, 1996, among
Dews, MigraTEC and EAI Partners, Inc. as noted on the face of each said
stock certificate; (2) common stock certificate no. 2565 representing
and evidencing Five Million Four Hundred One Thousand Nine Hundred
Seventy-Six (5,401,976) shares of common stock in MigraTEC duly
executed for transfer to MigraTEC by Dews, in exchange for which
MigraTEC shall contemporaneously deliver to Dews a common stock
certificate evidencing Two Million One Thousand Nine Hundred
Seventy-Six (2,001,976) shares of common stock in MigraTEC, which stock
certificate represents the Remaining Stock of Dews in accordance with
Section 3 hereinabove; and, (3) the original release referred to in
Section 6 hereinabove.
10. Notices. Any notice, payment, demand, or communication, required or
permitted to be given by any provision of this Agreement shall be
deemed to have been sufficiently given or served for all purposes if
delivered personally to the party or to an officer of the party to whom
the same is sent or directed or sent by registered or certified mail,
postage and charges prepaid, addressed as follows:
3
<PAGE> 4
If to Dews: Richard G. Dews
HC-57, Box 520
Reedpoint, MT 59069
If to MigraTEC, Inc: MigraTEC, Inc.
12801 Stemmons Freeway
Suite 710
Farmers Branch, TX 75239
11. Severability. The provisions of this Agreement are severable and, if
any of these provisions shall be held by any Court of competent
jurisdiction to be unenforceable, such holding shall not affect the
validity or impair the remainder of this Agreement. In the event of any
claim or holding regarding the invalidity or illegality of any
provision of this Agreement, it is expressly understood and agreed that
Dews shall have no liability whatsoever in such event and that Dews
shall be held harmless and be indemnified by MigraTEC for any liability
or loss suffered by Dews.
12. Sole Agreement. This Agreement constitutes the entire understanding of
the parties hereto with respect to the subject matter hereof, and no
amendment, modification, or authorization of the terms hereof shall be
binding unless the same shall be in writing, dated subsequent to the
date hereof, and duly approved and executed by the parties hereto.
13. Escrow Agent. It is understood and agreed by the parties that Gregory
Paul Johnson, Attorney at Law and counsel for Dews in this matter,
shall be the designated escrow agent, to whom the parties shall deliver
all payments, stock certificates, and releases as provided in Section 9
hereinabove. Furthermore, the parties authorize said escrow agent to
deliver all such payments, stock certificates, and releases to each
respective party, only upon full and complete compliance with the
provisions in Section 9 hereinabove.
14. Attorney's Fees. In the event that either party commences an action to
enforce, interpret, or modify any term(s) or provision(s) of this
Agreement, the prevailing party shall be awarded his or its reasonable
attorney's fees and expenses incurred therein.
15. Assignability. Subject to the limits of transferability contained
herein, each and all of the covenants, terms, provisions, and
agreements herein contained shall be binding upon and inure to the
benefit of the successors and assigns of the respective parties hereto.
4
<PAGE> 5
IN WITNESS WHEREOF, the respective parties have executed this Agreement
effective as of this 25th day of March, 1998.
MigraTEC, Inc. Richard G. Dews
By: /s/ CURTIS OVERSTREET /s/ RICHARD G. DEWS
--------------------------- ------------------------------------
Print Name: Curtis Overstreet Print Name: Richard G. Dews
------------------- -------------------------
Title: President
------------------------
Effective Date: March 25, 1998
---------------
STATE OF MONTANA )
: ss.
County of Yellowstone )
On this 25th day of March, 1998, before me, a Notary Public for the State
of Montana, personally appeared Richard G. Dews, known to me to be the person
whose name is subscribed to the within instrument, and acknowledged to me that
he executed the same.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my Official
Seal on the day and year in this certificate first above written.
/s/ [ILLEGIBLE]
--------------------------------------
Notary Public for the State of Montana
(SEAL) Residing at Billings
My Commission Expires: December 21, 2001
STATE OF TEXAS )
: ss.
County of Dallas )
On this 31st day of March, 1998, before me, a Notary Public for the State
of Texas, personally appeared Curtis Overstreet, known to me to be the
President of MigraTEC, Inc., a Florida corporation, the corporation that
executed the foregoing instrument, and acknowledged to me that such corporation
executed the same.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my Official
Seal on the day and year in this certificate first above written.
/s/ JAMI SKIDMORE
------------------------------------
Notary Public for the State of Texas
[SEAL] Residing at ________________________
My Commission Expires: 03/17/99
5
<PAGE> 6
EXHIBIT A
PROMISSORY NOTE
$56,000.00 Date: August 15, 1996
For value received, the undersigned One Up Corporation, Westlake, Texas (the
"Promisor") promises to pay to the order of Richard G. Dews (the "Payee"), at
HC-57, Box 520, Reedpoint, MT 59067, (or at such other place as the Payee may
designate in writing) the sum of $56,000.00 with interest from August 15, 1996,
on the unpaid principal at the rate of 8.00 percent annually.
The unpaid principal and accrued interest shall be payable on demand. All
payments on this Note shall be applied first in payment of accrued interest and
any remainder in payment of principal.
If any payment obligation under this Note is not paid when due, the Promisor
promises to pay all costs of collection, including reasonable attorney fees,
whether or not a lawsuit is commenced as part of the collection process.
If any of the following events of default occur, this Note and any other
obligations of the Promisor to the Payee, shall become due immediately, without
demand or notice:
1) the failure of the Promisor to pay the principal and any accrued interest in
full on or before the Due Date;
2) the death of the Promisor(s) or Payee(s);
3) the filing of bankruptcy proceedings involving the Promisor as a Debtor;
4) the application for appointment of a receiver for the Promisor;
5) the making of a general assignment for the benefit of the Promisor's
creditors;
6) the Insolvency of the Promisor; or
7) the misrepresentation by the Promisor to the Payee for the purpose of
obtaining or extending credit.
If any one or more of the provisions of this Note are determined to be
unenforceable, in whole or in part, for any reason, the remaining provisions
shall remain fully operative.
All payments of principal and interest on this Note shall be paid in the legal
currency of the United States. Promisor waives presentment for payment,
protest, and notice of protest and nonpayment of this Note.
No renewal or extension of this Note, delay in enforcing any right of the Payee
under this Note, or assignment by Payee of this Note shall affect the liability
of the Promisor. All rights of the Payee under this Note are cumulative and
may be exercised concurrently or consecutively at the Payee's option.
This Note shall be construed in accordance with the laws of the State of Texas.
Signed this 15th day of August, 1996 at
Westlake, Texas
- --------------------------------------------------
One Up Corporation, Westlake, Texas
By: /s/ WAYNE SANDERSON
-----------------------------------------------
One Up Corporation, Westlake, Texas
Wayne Sanderson, Vice President
-2-
<PAGE> 7
EXHIBIT B
GENERAL RELEASE
For and in consideration of good and valuable consideration, including
without limitation the release of even date herewith from Richard G. Dews
(hereinafter "Dews"), the receipt and sufficiency of which is hereby
acknowledged, MigraTEC, Inc., formerly One Up Corporation (hereinafter referred
to as "MigraTEC"), releases Richard G. Dews, his successors and assigns
(hereinafter referred to as the "Releasees") of and from any and all actions,
causes of action, suits, charges and obligations, debts, sums of money,
accounts, contracts, controversies, agreements, promises, damages, claims, and
demands whatsoever, in law, or equity which MigraTEC ever had, now has, claims
to have or hereinafter can, shall or may for any reason have, against the
Releases arising out of any matter or event occurring contemporaneously with or
before the execution of this General Release, including, without limiting the
generality of the foregoing, all such claims arising from or related to the
employment of Dews by MigraTEC or related to Dews' duties as an officer and
director of MigraTEC.
IN WITNESS WHEREOF, this General Release has been executed as of the
Effective Date set forth below.
MigraTEC, Inc.
By: /s/ CURTIS OVERSTREET
-----------------------------
Print Name: Curtis Overstreet
---------------------
Title: President
--------------------------
Secretary: /s/ RICK JOHNSON
----------------------
Print Name: Rick Johnson
---------------------
Corporate Seal:
<PAGE> 8
EXHIBIT C
GENERAL RELEASE
For and in consideration of good and valuable consideration, including
without limitation the release of even date herewith MigraTEC, Inc., formerly
One Up Corporation (hereinafter "MigraTEC"), the receipt and sufficiency of
which is hereby acknowledged, Richard G. Dews (hereinafter referred to as
"Dews"), releases MigraTEC, Inc., its officers, directors, employees,
successors and assigns (hereinafter referred to as the "Releasees") of and from
any and all actions, causes of action, suits, charges and obligations, debts,
sums of money, accounts, contracts, controversies, agreements, promises,
damages, claims, and demands whatsoever, in law, or equity which Dews ever had,
now has, claims to have or hereinafter can, shall or may for any reason have,
against the Releases arising out of any matter or event occurring
contemporaneously with or before the execution of this General Release,
including, without limiting the generality of the foregoing, all such claims
arising from or related to the employment of Dews by MigraTEC or the promissory
note from MigraTEC to Dews, a copy of which is attached hereto as Attachment A.
IN WITNESS WHEREOF, this General Release has been executed as of the
Effective Date set forth below.
Richard G. Dews
Signature: /s/ RICHARD G. DEWS
-------------------------------
Print Name: Richard G. Dews
------------------------------
Closing Date of Agreement, Dated march 25, 1998,
Effective Date: Between the Parties Hereto
--------------------------
Witnessed By: /s/ GREGORY PAUL JOHNSON
----------------------------
Print Name: Gregory Paul Johnson
------------------------------
<PAGE> 9
EXHIBIT D
PROMISSORY NOTE
$68,250.00 March 30, 1998
The undersigned, for value received, promise to pay to the order of
Marilyn Johnson at 9060 W. Oklahoma #201, W. Allis, WI 53227, the sum of
SIXTY-EIGHT THOUSAND TWO HUNDRED FIFTY AND NO/100 DOLLARS ($68,250.00), with no
interest thereon as hereinafter provided.
Payments of ONE THOUSAND AND NO/100THS DOLLARS ($1,000.00) shall be made
on or before the 10 day of each month with the first of such payments being due
and payable on or before April 10, 1998, and like payments being due on or
before the ___ day of the next sixty-seven months thereafter with the remaining
$250.00 balance of such this Promissory Note being due and payable on or before
December 10, 2003.
Payments are to be made in lawful money of the United States in the form
of cashier's checks.
In addition to, and not in limitation of, the foregoing, the undersigned
further agrees, subject only to any limitation imposed by applicable law, to
pay all expenses, including reasonable attorney's fees and reasonable legal
expenses, incurred by the holder of this Promissory Note in endeavoring to
collect any amounts payable hereunder which are not paid when due, whether by
acceleration or otherwise.
The undersigned hereby waives diligence, presentment, protest and demand,
and also notice of intent to accelerate and of acceleration, notice of default,
notice of protest, demand, dishonor or nonpayment of this Promissory Note.
The undersigned shall have the right to prepay in whole or in part the
unpaid balance of the principal amount of this Promissory Note at anytime or
from time to time.
If any part of this Promissory Note shall be declared invalid, the
remainder thereof shall, nevertheless, remain in full force and effect.
MigraTEC, Inc,
(formerly One Up Corporation)
By: /s/ CURTIS OVERSTREET /s/ RICK JOHNSON
---------------------------- ----------------------------
Curtis Overstreet, President Secretary
<PAGE> 1
JEFF MILNE EXHIBIT 10.8
MIGRATEC
Strategic Product Assessment
Performed By Jeff Milne
Practice Manager for Business Intelligence
April 6, 1998
DELOITTE & TOUCHE CONSULTING
Group
----------
DRT SYSTEMS
ASSESSMENT TECHNIQUE
o 4 Days of interviews with:
o Curtis Overstreet - CEO
o Joe Meredith - VP Sales/Marketing
o Sheldon Travis - VP R&D
o Rick Johnson - COO
o Scott Segell - Migration Product Manager
o Bob Perkins - Development and Delivery Manager
o Bill Fahle - Parser Systems Engineer
o Engaged 2 D&T resources to research competition & market factors
o Met with senior D&T technical resources
DELOITTE & TOUCHE CONSULTING
Group 6-Apr-98
----------
DRT SYSTEMS
CURRENT TECHNOLOGY ASSESSMENT
MIGRATEC FUTURE MIGRATION PRODUCT
o Works well for procedural C applications
o Has extensible parser through grammar spec file
o Has extensible API mapping tables
o Has forward and backward propagation abilities
o Collects some metrics (McCabe, keyword count, etc.)
o Has some classification of API at functional level (called "Skillset" on
interface)
o Can predict "defect density" of application (some customer
related - memory management, etc.)
DELOITTE & TOUCHE CONSULTING
Group 6-Apr-98
----------
DRT SYSTEMS
ASSESSMENT GOALS
o Review Business Plans for Migration Product and Year 2000 Product
o Review Current Technology Architecture for Migration Product and Year
2000 Product
o Review Future Technology Architecture for Migration Product
o Document Market Factors
o Document technical issues with current products
o Document technology recommendations for next generation products
DELOITTE & TOUCHE CONSULTING
Group 6-Apr-98
----------
DRT SYSTEMS
CURRENT TECHNOLOGY ASSESSMENT
MIGRATEC 2000
o Works well on desktop C applications
o Has clean, functional interface
o Flexible, robust, and performs quickly
o Provides input into a project plan
o Lacks team approach for source code management (version control)
o Does not map data by address space - may miss some date transformations
o Does not parse embedded SQL code and can miss date functions
o Does not address regression testing of remediated application which is a
(or the) major part of the overall effort
o Adding C++ will require parser extensions (probably not a re-write)
o Adding Visual Basic won't address 3rd party components (no source)
DELOITTE & TOUCHE CONSULTING
group 6-Apr-98
----------
DRT SYSTEMS
CURRENT TECHNOLOGY ASSESSMENT
MIGRATEC FUTURE MIGRATION PRODUCT
o Works primarily for changing/re-mapping APIs
o Adding C++ to parser will require extensions (templates - context
dependencies)
o Does not map data by address space - may miss some data transformations
o Does not parse embedded SQL code - may miss some data transformations
o Need to parse resource files (RC & DLG) to capture navigation and
application context
o Parsing Visual Basic won't address 3rd party components (no source)
o Lacks team approach for source code management (version control)
o Does not address regression test of migrated application which is a
major part of the overall effort
o Needs generic "environment parameter" input ability
DELOITTE & TOUCHE CONSULTING
Group 6-Apr-98
----------
DRT SYSTEMS
1
Technology Leadership
<PAGE> 2
JEFF MILNE
CURRENT TECHNOLOGY ASSESSMENT
MIGRATEC FUTURE MIGRATION PRODUCT
o VB is current front-end and tightly coupled to analysis component
o Will require rework to enable browser access
o Have not proven translation of one language to another
o Do not have code generation from parse tree yet
o Migration of Smalltalk to JAVA may be obtainable
o Migration from C++ to JAVA/Smalltalk more challenging
o Migration from C to C++ or JAVA may be impractical
o Doesn't address application partitioning - presentation, business logic
communications, data access
o Doesn't address object discovery and mapping - technical object,
business object
o Multiple inheritance reconciliation between C++ & JAVA
DELOITTE & TOUCHE CONSULTING
Group 6-Apr-98
----------
DRT SYSTEMS
MARKET ANALYSIS - ENABLERS
o Abstraction - business rules in a declarative form (statement of policy)
associated back to the physical technology components which make them
function
o Application independence through indirection and abstraction (time,
location and application independence)
o Inter-application communication with guaranteed semantic integrity
o Knowledge mining (data warehouse/farming)
o Application management for reuse
o System wide impact analysis
o Change management
o Model management
DELOITTE & TOUCHE CONSULTING
Group 6-Apr-98
----------
DRT SYSTEMS
USER PROFILES
o End user organizations (Texas Instruments, Frito Lay, Dr Pepper,
Deutsche Bank/ITT Financial, etc.)
o Hardware manufacturer/integrators who manage and support their products
with proprietary software (Cabletron, DSC, Micros POS's, etc.)
o Software vendors (Oracle, Microsoft, SAP, PeopleSoft, IBM, GreatPlains
Software, Solomon, etc.)
DELOITTE & TOUCHE CONSULTING
Group 6-Apr-98
----------
DRT SYSTEMS
MARKET ANALYSIS - PROBLEM DEFINITION
o RAD tools proliferate complexity at a greater rate
o An application is "Legacy" as soon as written - undocumented,
unstructured, mods add complexity
o Business process improvements force code restructuring
o Integration of applications
o Greater emphasis on managing knowledge assets
o Population/worker distribution requires ubiquitous access and
application restructuring
o Vendors need multiplatform support - user interface and data access
DELOITTE & TOUCHE CONSULTING
Group 6-Apr-98
----------
DRT SYSTEMS
SELLABLE MARKET
o Total Available Market (TAM) and the Sellable Available Market (SAM)
o Each market opportunity is constrained by a combination of factors:
o The source platform and the language used on that platform
o The target platform and its language
o The number & size of specific application(s) or programs which will
be migrated
o The type of application to be migrated (i.e. batch vs interactive)
o The need and benefit of migration vs cost or automation level
DELOITTE & TOUCHE CONSULTING
Group 6-Apr-98
----------
DRT SYSTEMS
END USER PROFILE
o Standardizing on Windows client and Unix or NIT server
o Vendors responsible for operational systems (G/L, AP, etc.)
o Most custom applications are:
o Upwardly compatible (don't need migration)
o Written in COBOL, PL/I, IBM Assembly - or
o Written on a server in C with few API calls - or
o Were developed with a RAD tool which the vendor provides upgrade path
o Many or most migration projects seek some business process improvements
(not a straight port)
o The value-added effort would be to restructure/optimize the app to take
advantage of new features (i.e. multithreading)
DELOITTE & TOUCHE CONSULTING
Group 6-Apr-98
----------
DRT SYSTEMS
2
Technology Leadership
<PAGE> 3
JEFF MILNE
HARDWARE VENDOR PROFILE
o Created applications specific to their proprietary product
o Needed to perform quickly - so C and C++ popular
o Either perform on their product (i.e. PalmPilot) or interface through a
client
o Probably Windows if through a client and will most likely be enhanced to
take advantage of a new platform (16 - 32 bit)
o Migration and optimization would add value
DELOITTE & TOUCHE CONSULTING
Group 6-Apr-98
----------
DRT SYSTEMS
COMPETITION
o Most Y2K competitors address COBOL or Fortran
o Most migration products address COBOL or Fortran to C
o Some software vendors achieve multiplatform support through UI libraries
like Visix
o Maintenance products have been adapted to address some migration efforts
DELOITTE & TOUCHE CONSULTING
Group 6-Apr-98
----------
DRT SYSTEMS
OPPORTUNITIES
o Y2K problem for additional desktop languages
o European Monetary Union and EU currency
o Embedded SQL to ODBC/JDBC
o Database stored procedure migration
o Regression test support
o Application migration to new platform (16 to 32 to 64 bit)
o Application optimization (expert system)
o Data warehouse support (semantic analysis)
o Language to language translation
o Application partitioning/restructuring/simplification
o Application understanding & maintenance
o Business rule mining/object mining
o Repository population (Unified Modeling Language)
DELOITTE & TOUCHE CONSULTING
Group 6-Apr-98
----------
DRT SYSTEMS
SOFTWARE VENDOR PROFILE
o Need to support multiple platforms with minimal conversion and
time-to-market
o Need platform independence (user interface, communications, data access)
o Many have own scripting language and API
o Smaller vendors less likely to have logically partitioned Applications
DELOITTE & TOUCHE CONSULTING
Group 6-Apr-98
----------
DRT SYSTEMS
COMPANY ASSETS
o Depth of platform knowledge
o Migration methodology knowledgebase (processes, project experience,
project metrics)
o Language knowledge
o Tools to facilitate migration
DELOITTE & TOUCHE CONSULTING
Group 6-Apr-98
----------
DRT SYSTEMS
RISKS & REWARDS
o Risks - technical & business
o Rewards - short term and long term
DELOITTE & TOUCHE CONSULTING
Group 6-Apr-98
----------
DRT SYSTEMS
Technology Leadership
3
<PAGE> 4
Jeff Milne
FOLLOW-UP ITEMS
o Call Dataquest for additional platform and language market numbers
o Is Visual Basic self upgrading
o Provide industry analyst list and documentation from research
o Follow-up on Smalltalk market and technical issues
DELOITTE & TOUCHE CONSULTING
Group 6-Apr-98 19
----------
DRT SYSTEMS
Technology Leadership
4
<PAGE> 1
EXHIBIT 10.9
SUBCONTRACTOR:
(Company Name)
Migratec, Incorporated
----------------------------------------------------------------------------
(Address)
12801 Stemmons Freeway, Suite 710, Dallas, TX 75234
----------------------------------------------------------------------------
SERVICES SUBCONTRACTING
AGREEMENT
REASONING, INC.
This Software Services Agreement is by and between Reasoning, Inc.,
with a place of business at 700 East El Camino Real, Mountain View, CA
94040 ("Reasoning") and the subcontractor named above ("Subcontractor").
The effective date of this Agreement shall be the date last signed below
(the "Effective Date").
1. Engagement of Services. Under the terms of this Agreement, Reasoning may
periodically request that Subcontractor perform software services for
Reasoning (which may be on behalf of Reasoning customers) by placing
service orders using the form attached to this Agreement as Exhibit B
("Service Orders"). Subcontractor will make all reasonable efforts to
render the services and return deliverables as scheduled in the Service
Orders, or promptly if no schedule is set in a Service Order. Subcontractor
will promptly confirm receipt of all new Service Orders by returning a
signed Service Order to Reasoning, noting any required schedule changes.
2. Reports, Invoicing and Compensation. Within 5 days of receipt of source
code pursuant to any Service Order, Subcontractor will provide Reasoning a
line count inventory report of the source code ("Inventory") and will comply
with all reasonable requests from Reasoning for status reports.
Subcontractor will invoice Reasoning for the services rendered upon
completion of the services and delivery of final work product, except that
on a case by case basis for lengthy projects Subcontractor and Reasoning
may agree upon monthly invoicing of work in progress. Reasoning will pay
Subcontractor the fees set forth in Exhibit A within thirty (30) days of
receipt of a valid invoice. Subcontractor will also be reimbursed for
expenses which are expressly provided for in the applicable Service Order
or which have been approved in advance in writing by a Reasoning manager.
Upon termination of this Agreement for any reason, Subcontractor will
invoice Reasoning and be paid fees and expenses incurred to date on the
basis stated in the Service Order(s) under which work has been completed.
3. Confidential Information. "Confidential Information" as used in this
Agreement shall mean any and all information related to software source
code provided by Reasoning to Subcontractor, which may include source code
of third parties held in confidence by Reasoning. Subcontractor will use
Reasoning's Confidential Information solely to perform the services for
Reasoning and will not disclose any Confidential Information to any third
parties except as Reasoning may hereafter authorize in writing. Reasoning
agrees not to communicate any information to Subcontractor in violation of
the proprietary rights of any third party and warrants that Reasoning has
the right to grant the licenses granted to Subcontractor herein for the
performance of the services. The above obligations with respect to
Confidential Information shall not be applicable in any case where: (i) the
information was in the public domain at or subsequent to the time it was
communicated to Subcontractor by Reasoning through no fault of
Subcontractor; (ii) the information was rightfully in Subcontractor's
possession free of any obligation of confidence at or subsequent to the
time it was communicated to Subcontractor; or (iii) the information was
independently developed by Subcontractor.
4. Deliverables. Reasoning will make all reasonable efforts to deliver the
source code necessary for Subcontractor to perform the requested services
(as described in each Service Order) to Subcontractor on or before the
dates on which the services have been scheduled to commence. Reasoning
hereby grants Subcontractor a limited license to make any copies of the
source code necessary to perform the services and to prepare any derivative
works necessary to create the applicable reports and/or deliverables.
Subcontractor agrees to promptly deliver the original and any copies or
derivatives of the source code to Reasoning upon completion of the
services, and to take appropriate action to delete and destroy the source
code from Subcontractor's electronic storage media.
5. Scope of the Services. Subcontractor agrees that all services provided
will be of professional quality and that Subcontractor will make all
reasonable efforts to perform the services pursuant to individual Service
Orders agreed on by the parties and/or the remediation instructions of
Reasoning's customers as applicable. Reasoning acknowledges that except
for date handling or as otherwise specified in a Service Order,
Subcontractor is not responsible for correcting any errors in or
otherwise improving the source code provided by Reasoning.
CONFIDENTIAL
1
<PAGE> 2
For a Warranty Period of one hundred and twenty (120) days after delivery
of the respective remediated software, inspection reports, or other
deliverables, Subcontractor warrants that such deliverables will perform or
otherwise be accurate to individual Service Orders agreed on by the parties
and/or the remediation instructions of Reasoning's customers, as
applicable, in accordance with the specifications set forth above and that
inspection reports will accurately assess the compliance of the submitted
source code against the chosen compliance standards. For any failure of the
remediated software or inspection reports to comply with the foregoing
sentence, which is reported by Reasoning during the above Warranty Period
and for which Reasoning provides reasonable cooperation in identifying
problems as reasonably requested by Subcontractor, Subcontractor shall, at
its expense, work promptly and diligently to provide a correction or
workaround. Beyond the limited warranty set forth above, Subcontractor does
not warrant the absolute accuracy of the remediated software or inspection
reports, or the output or the results of the remediated software when used.
6. Term and Termination. The initial term of this Agreement is for one (1)
year from the Effective Date, unless earlier terminated as provided in this
Agreement. Thereafter this Agreement will automatically renew on its
anniversary date for successive one (1) year terms, unless either party
provides written notice of termination at least thirty (30) days prior to
any such renewal anniversary date. Either party may terminate this
Agreement with or without cause upon at least thirty (30) days prior
written notice to the other party, and in the case of a notice of breach,
subject to the opportunity for the breaching party to cure during the
notice period.
7. Independent Contractor Relations. The relationship of the parties is
that of independent contractors and nothing in this Agreement is intended
to, or should be construed to, create a partnership, agency, joint venture
or employment relationship.
8. Survival. The rights and obligations contained in Paragraphs 3
("Confidential Information"), and 5 ("Scope of the Services") will survive
any termination or expiration of this Agreement.
9. Governing Law; Waiver; Severability. This Agreement shall be governed by
the laws of the State of California, without giving effect to conflict of
law principles. This Agreement may not be changed, altered or modified
except by an instrument in writing, specifically referencing this
Agreement, signed by a duly authorized representative of Reasoning and of
Subcontractor. The parties have agreed that faxed signature copies will be
legally binding. Any waiver by a party of any provision herein shall not be
construed as a consent to or waiver of any other breach of the same or any
other provision. If any provision of this Agreement is held invalid, such
invalidity shall not affect any other provisions hereof.
10. Limitation of Liability. IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE
OTHER PARTY FOR ANY INCIDENTAL, CONSEQUENTIAL, PUNITIVE OR SPECIAL DAMAGES
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ITS TERMINATION.
11. Entire Agreement. Each party acknowledges that it has read this
Agreement, understands this Agreement and agrees to be bound by its terms,
and further agrees that this Agreement constitutes the entire agreement
between Subcontractor and Reasoning with respect to the subject matter
hereof and supersedes all previous agreements, promises, or representations,
oral or written.
IN WITNESS WHEREOF, the corporate officer of Subcontractor and
authorized representative of the Reasoning have executed this Agreement.
Reasoning:
By: /s/ THOMAS H. DOYLE
----------------------------------
Print Name: THOMAS H. DOYLE
--------------------------
Title: Vice President Worldwide Sales
-------------------------------
Date: 8/4/98
--------------------------------
Subcontractor:
By: /s/ MARK C. MYERS
----------------------------------
Print Name: Mark C. Myers
--------------------------
General Counsel &
Title: Chief Financial Officer
-------------------------------
Date: 7/30/98
--------------------------------
<PAGE> 3
EXHIBIT A
GENERAL SERVICES
The general services to be provided are:
Impact Assessment
Impact Assessment is the identification of, and location of, "date aware"
symbols based on pattern recognition and propagation.
Inspection Review
Inspection Review is the identification of, and location of, "date aware"
symbols based on pattern recognition and propagation and the determination
as to whether particular "date aware" symbols are not Year 2000 compliant
based on code inspection.
Remediation
Remediation is the identification of, and location of, "date aware" symbols
based on pattern recognition and propagation and the application of client
specified remediation solutions to source code.
Inventory Assemblage
Inventory Assemblage is the labor required to assemble a complete work
unit to be delivered for processing by MigraTEC's MigraTEC2000 software
tool.
PRICING
The pricing for the above services shall be:
Impact Assessment $0.10 USD per line of code
Inspection Review $0.15 USD per line of code
Remediation $0.22 USD per line of code
Inventory Assemblage $125 USD per hour plus any related out of
pocket expenses
Line of Code
A line of code is defined as all lines of code processed by the
MigraTEC2000 tool other than blank lines and comment lines.
<PAGE> 4
EXHIBIT B
This Service Order is governed by the terms of the Services Agreement in
effect between Reasoning and Subcontractor (the "Agreement") and upon
execution by the parties is deemed incorporated therein. All the terms used
in this Service Order shall retain the same meaning as defined in the
Agreement and such definitions are incorporated herein by reference. In the
case of a conflict between any item in this Service Order and the
Agreement, the terms of the Agreement will govern.
Description of the source code to be analyzed:
C++ code provided by Reasoning account Southern Cal Edison specifically the
MDMA, O-Space and Roguewave modules.
Number of lines of code:
To be determined upon acceptance of complete inventory.
Description of the services to be performed:
Inspection Review
Payment of Fees: If different than as specified in the Agreement, the fees
for the services will be:
$0.12 USD per line of code
Expenses: Reasoning will reimburse Subcontractor for the following expenses
incurred in connection with this Service Order:
Not applicable
IN WITNESS WHEREOF, the authorized representatives of the parties have
executed the Service Order, with an effective date as of the date last
signed below.
REASONING MIGRATEC, INC.
By:/s/ THOMAS H. HOLMES By:/s/ MARK C. MYERS
------------------------------- -------------------------------
Print Name: Thomas H. Holmes Print Name: Mark C. Myers
-------------------- -----------------------
Title: VP, Supports & Services Title: CFO & General Counsel
------------------------- ----------------------------
Date: 8/4/98 Date: 7/30/98
-------------------------- -----------------------------
<PAGE> 1
EXHIBIT 10.10
MASTER SOFTWARE LICENSE AGREEMENT
BETWEEN
ELECTRONIC DATA SYSTEMS CORPORATION
AND
MIGRATEC, INC.
<PAGE> 2
TABLE OF CONTENTS
FOR
MASTER SOFTWARE LICENSE AGREEMENT
<TABLE>
<CAPTION>
ARTICLE I. AGREEMENT, TERM, AND DEFINITIONS
<S> <C> <C>
1.1 Agreement and Term ............................................. 1
1.2 Certain Definitions ............................................ 1
ARTICLE II. PURCHASE ORDERS
2.1 Preparation of Purchase Orders ................................. 2
2.2 Issuance and Acceptance of Purchase Orders ..................... 3
2.3 Purchase Order Alterations ..................................... 3
2.4 Evaluation Purchase Orders ..................................... 3
2.5 Cancellation of Purchase Orders ................................ 4
ARTICLE III. PROVISION OF LICENSED SOFTWARE AND SERVICES
3.1 General ........................................................ 4
3.2 Transportation of Licensed Software ............................ 4
3.3 Risk of Loss ................................................... 4
3.4 Installation of Licensed Software .............................. 4
3.5 Right to Cancel for Delays ..................................... 4
3.6 Time and Materials Services .................................... 5
3.7 Services in General ............................................ 6
3.8 Ownership of Intellectual Property Rights ...................... 7
3.9 Use of Existing Materials ...................................... 8
3.10 Further Acts .................................................. 8
3.11 Time of Performance ........................................... 8
3.12 EDS Business Practices ........................................ 8
3.13 Training Services ............................................. 8
3.14 Development Services .......................................... 8
ARTICLE IV. PROVISION OF LICENSED SOFTWARE
4.1 Acceptance of Licensed Software ................................ 8
4.2 Grant of License ............................................... 9
4.3 Transfer of Licensed Software .................................. 10
4.4 Ownership of Licensed Software and Modifications ............... 10
4.5 Proprietary Markings ........................................... 10
4.6 Duplication of Documentation ................................... 10
4.7 Non-Disclosure ................................................. 11
4.8 Licensed Software Support Services ............................. 11
4.9 Licensed Software Support Services Options ..................... 12
4.10 Provision of Source Code ...................................... 12
4.11 Acquisition of Third Party Software ........................... 13
4.12 Software from an Authorized Third Party ....................... 14
4.13 Ownership of Imbedded Code .................................... 14
ARTICLE V. WARRANTIES, INDEMNITIES, AND LIABILITIES
5.1 Warranty ....................................................... 14
5.2 Proprietary Rights Indemnification ............................. 15
5.3 Cross Indemnification .......................................... 15
5.4 Limitation of Liability ........................................ 15
5.5 Insurance ...................................................... 16
5.6 Survival of Article V .......................................... 16
ARTICLE VI. PAYMENTS TO SUPPLIER
6.1 Charges, Prices, and Fees for Licensed Software and Services ... 16
6.2 Modifications to Charges ....................................... 17
6.3 Auto Payment ................................................... 17
6.4 Payment Through Invoicing ...................................... 18
6.5 Software Fee Payment for Line of Source Code Charges ........... 19
6.6 Taxes .......................................................... 19
</TABLE>
i
<PAGE> 3
<TABLE>
<CAPTION>
ARTICLE VII. TERMINATION
<S> <C>
7.1 Termination for Cause ................................................ 20
7.2 Termination for Insolvency or Bankruptcy ............................. 20
7.3 Termination for Non-Payment .......................................... 20
7.4 Termination of Software License ...................................... 20
7.5 Rights Upon Termination .............................................. 21
ARTICLE VIII. MISCELLANEOUS
8.1 Binding Nature, Assignment, and Subcontracting ....................... 21
8.2 Counterparts ......................................................... 21
6.3 Headings ............................................................. 21
8.4 Authorized Agency .................................................... 21
8.5 Relationship of Parties .............................................. 22
8.6 Confidentiality ...................................................... 22
8.7 Media Releases ....................................................... 22
8.8 Dispute Resolution ................................................... 23
8.9 Electronic Communications ............................................ 23
8.10 Proposals and Special Projects ...................................... 23
8.11 Governmental Customers .............................................. 23
8.12 International Business .............................................. 23
8.13 Compliance with Laws ................................................ 23
8.14 Labor ............................................................... 24
8.15 Export .............................................................. 24
8.16 Notices ............................................................. 24
8.17 Force Majeure ....................................................... 24
8.18 Severability ........................................................ 25
6.19 Waiver .............................................................. 25
8.20 Remedies ............................................................ 25
8.21 Survival of Terms ................................................... 25
8.22 Nonexclusive Market and Purchase Rights ............................. 25
8.23 GOVERNING LAW ....................................................... 25
8.24 Entire Agreement .................................................... 25
</TABLE>
ii
<PAGE> 4
LIST OF EXHIBITS
EXHIBIT A
EDS BUSINESS PRACTICES
EXHIBIT B
CHARGES, PRICES, AND FEES
EXHIBIT C
THIRD PARTY SYSTEM ACCESS AGREEMENT
EXHIBIT D
NON-DISCLOSURE AGREEMENT
EXHIBIT E
TRAINING SERVICES
EXHIBIT F
DEVELOPMENT SERVICES
iii
<PAGE> 5
MASTER SOFTWARE LICENSE AGREEMENT
THIS MASTER SOFTWARE LICENSE AGREEMENT (the "Agreement"), dated
September 1, 1998 (the "Effective Date"), is between MIGRATEC, INC., a Texas
corporation ("MigraTEC"), and ELECTRONIC DATA SYSTEMS CORPORATION, a Delaware
corporation ("EDS").
W I T N E S S E T H:
WHEREAS, EDS desires to have the right to license computer software
programs and to obtain services from MigraTEC from time to time; and
WHEREAS, MigraTEC is willing to provide computer software programs and
services to EDS in accordance with the terms and conditions set forth in this
Agreement;
NOW, THEREFORE, in consideration of the premises, and other good and
valuable consideration received and to be received, MigraTEC and EDS agree as
follows:
ARTICLE I. AGREEMENT, TERM, AND DEFINITIONS
1.1 Agreement and Term. The parties agree that the terms and conditions of this
Agreement apply to the provision of computer software programs and services
to EDS by MigraTEC. The initial term of this Agreement shall be five (5)
years commencing on the Effective Date. The Agreement shall automatically
renew for successive two (2) year renewal terms thereafter unless either
party provides the other party written notice of its intent not to renew
not less than six (6) months prior to the expiration of the initial or any
renewal term.
1.2 Certain Definitions. The following definitions apply to this Agreement:
(a) "Applicable Specifications" means the functional, performance,
operational, compatibility, and other specifications or
characteristics of a Product described in applicable Documentation and
such other specifications or characteristics of a Product agreed upon
in writing by the parties.
(b) "Documentation" means user guides, operating manuals, education
materials, product descriptions and specifications, technical manuals,
supporting materials, and other information relating to the Products
or used in conjunction with the Services, whether distributed in
print, magnetic, electronic, or video format, in effect as of the date
(i) a Product is shipped to or is accepted by EDS, as applicable, or
(ii) the Service is provided to EDS.
(c) "Employee" means those employees, agents, subcontractors, consultants,
and representatives of MigraTEC provided or to be provided by MigraTEC
to perform Services pursuant to this Agreement.
(d) "Licensed Software" means computer programs in object code (including
micro code) and/or source code, as applicable, provided or to be
provided by MigraTEC pursuant to this Agreement. The definition of
Licensed Software also includes any enhancements, translations,
modifications, updates, releases, or other changes to Licensed
Software which are provided or to be provided as part of MigraTEC's
performance of warranty Service obligations or pre-paid support
Services pursuant to this Agreement.
1
<PAGE> 6
(e) "Line of Source Code" ("LOSC") is defined as:
(i) Any line of code terminated by an end of line character and
appearing in a source file or copy book listing (i.e., include
file) excluding comment and/or blank lines. A copy book is
counted only once, even if it is used in multiple programs (i.e.,
the copy book is counted ONLY the first time it is encountered).
(ii) Any line of code which includes both code and comments shall be
counted.
(iii) A copy book or macro content is counted ONLY the first time it
is encountered.
(iv) Rework which is not creating additional revenue for EDS shall not
be counted.
(v) Rework which does create additional revenue for EDS shall be
counted.
(vi) Source code processed for reasonable internal testing of the
Licensed Software, internal proof of concept and/or other
internal non-revenue related activities; and/or code processed
for prospect and/or customer demonstration purposes shall not be
counted.
(vii) Source code belonging to EDS and processed by EDS for purposes
of analyzing or remediating such source code for EDS's benefit
shall be counted.
(viii) A line of source code is considered to be "processed" if either
1) the line of source code has been searched for data fields of
interest or 2) the line of source code has been modified. A line
of source code that has been processed pursuant to both 1) and 2)
herein will only be counted once.
(f) "Products" means, individually or collectively as appropriate,
Licensed Software, Documentation, and Work Products (as later defined
in this Agreement), provided or to be provided by MigraTEC pursuant to
this Agreement.
(g) "Services" includes, but is not limited to, installation, education,
acceptance testing, support, development, warranty, and time and
materials services, provided or to be provided by MigraTEC pursuant to
this Agreement.
(h) "Site" means geographically contiguous buildings, each of which, in
whole or in part, is occupied or accessed by EDS or a customer of EDS.
"Geographically contiguous" means adjacent tracts or parcels of real
property separated, if at all, only by publicly dedicated rights of
way or private easements.
(i) "Warranty Period" means the period specified in Section 5.1(e) of this
Agreement during which MigraTEC is obligated to perform its warranty
obligations.
ARTICLE II. PURCHASE ORDERS
2.1 Preparation of Purchase Orders. MigraTEC agrees that computer software
programs and services which MigraTEC generally makes available to other
customers shall be made available to EDS under the terms and conditions of
this Agreement. EDS may request information about computer software
2
<PAGE> 7
programs and services in order to prepare purchase orders and MigraTEC
shall promptly provide to EDS, at no charge, sufficiently detailed
information which is responsive to EDS' request. From time to time and/or
at EDS' request, MigraTEC shall provide written information to EDS about
computer software programs and services, and new releases, versions or
options related thereto, available or to be available from MigraTEC.
2.2 Issuance and Acceptance of Purchase Orders. References in this Section to
purchase orders also apply to alterations to Purchase Orders (as later
defined in this Section). The following governs the issuance and acceptance
of purchase orders under this Agreement:
(a) EDS may issue to MigraTEC written purchase orders identifying the
Licensed Software and Services EDS desires to obtain from MigraTEC.
Each purchase order may include other terms and conditions applicable
to the Licensed Software and Services ordered; such other terms shall
be consistent with the terms and conditions of this Agreement, or
shall be necessary to place a purchase order, such as billing and
shipping information, required delivery dates, installation locations,
the LOSC to be processed and Charges (as later defined in this
Agreement).
(b) MigraTEC shall promptly accept purchase orders by providing to EDS a
written or an oral acceptance of such purchase order, or by commencing
performance pursuant to such purchase order. MigraTEC shall accept
purchase orders which do not establish new or conflicting terms and
conditions from those set forth in this Agreement, except purchase
orders for training, consulting, or MigraTEC factory Services must
have a mutually agreed upon schedule for such training, consulting, or
MigraTEC factory Services or MigraTEC may reject said purchase order
for training, consulting, or MigraTEC factory Services. MigraTEC shall
also accept purchase orders incorporating terms and conditions which
have been separately agreed upon in writing by the parties.
(c) MigraTEC may reject a purchase order which does not meet the
conditions described in subsection (b) above by promptly providing to
EDS a written explanation of the reasons for such rejection. MigraTEC
shall accept an alteration to the originally issued purchase order if
such alteration remedies the items set forth in MigraTEC's written
rejection.
Purchase orders accepted in accordance with this Section are referred to as
"Purchase Orders." EDS shall have no responsibility or liability for
Licensed Software or Services provided without a Purchase Order.
2.3 Purchase Order Alterations. EDS may issue an alteration to a Purchase Order
in order to, without limitation, (i) change a location for delivery, (ii)
modify the quantity or type of Licensed Software and Services to be
delivered or performed, (iii) implement any change or modification as
required by or permitted in this Agreement, (iv) correct typographical or
clerical errors, or (v) order Licensed Software or Services which are of
superior quality, or are enhancements to or are new releases or new options
of the Licensed Software or Services set forth in the Purchase Order.
2.4 Evaluation Purchase Orders. EDS may issue a purchase order to MigraTEC for
Licensed Software evaluation by EDS at no charge for an evaluation period
agreed upon by the parties. MigraTEC shall provide the Licensed Software
listed in the evaluation Purchase Order to EDS and shall pay all related
transportation and insurance costs. Such Licensed Software shall be
protected by EDS in accordance with the non-disclosure requirements
specified in this Agreement which are applicable to Licensed Software. At
the conclusion of the evaluation period, EDS shall have the option to
acquire such Licensed Software pursuant to this Agreement or to return such
Licensed Software to MigraTEC at MigraTEC's expense without obligation to
3
<PAGE> 8
MigraTEC. Licensed Software which MigraTEC and EDS agree to be the subject
of beta testing by EDS shall be subject to a separate agreement between the
parties containing applicable beta test terms and conditions.
2.5 Cancellation of Purchase Orders. Except as otherwise agreed upon by the
parties, EDS may cancel all or a portion of a Purchase Order relating to
Licensed Software, without charge or penalty at any time prior to the
scheduled delivery date of the affected Licensed Software. Purchase Orders,
or portions thereof, for Services may be canceled as specified in the
applicable sections of this Agreement.
ARTICLE III. PROVISION OF LICENSED SOFTWARE AND SERVICES
3.1 General. EDS is entitled to obtain Licensed Software and Services for the
benefit of and use by affiliates of EDS. Such affiliates and their
respective employees are entitled to use the Licensed Software and Services
in accordance with this Agreement and have and are entitled to all rights,
benefits, and protections granted to EDS pursuant to this Agreement with
respect to such Licensed Software and Services. However, an affiliate of
EDS shall only be entitled to obtain Licensed Software and Services
directly from MigraTEC pursuant to this Agreement if EDS so provides
written notice to MigraTEC. EDS is responsible for compliance by its
affiliates with the terms and conditions set forth in this Agreement. EDS
and its affiliates have the right to transfer (in accordance with the terms
and conditions of the Section of this Agreement titled "Transfer of
Licensed Software") or promote the use of the Licensed Software and
Services to third parties through EDS.
3.2 Transportation of Licensed Software. MigraTEC shall deliver Licensed
Software to EDS on the delivery date set forth in the applicable Purchase
Order or as otherwise agreed upon by the parties. Charges for
transportation of Licensed Software shall be paid by MigraTEC. The method
and mode of all transportation shall be those selected by MigraTEC.
3.3 Risk of Loss. All risk of loss of, or damage to, Licensed Software shall be
borne by MigraTEC until receipt of delivery of such Licensed Software by
EDS. MigraTEC agrees to insure Licensed Software until receipt of delivery
of such Licensed Software by EDS. If loss to or damage of Licensed Software
occurs prior to receipt of delivery by EDS, MigraTEC shall immediately
provide a replacement item or, if Licensed Software is not immediately
replaceable, MigraTEC shall give EDS highest priority for the provision of
replacement Licensed Software.
3.4 Installation of Licensed Software. If installation is set forth in the
governing Purchase Order or is included in the Charge for Licensed
Software, MigraTEC shall install Licensed Software in good working order at
the designated location on or before the installation date set forth in the
applicable Purchase Order or as otherwise agreed upon by the parties.
Installation Services shall include performance of MigraTEC's usual and
customary diagnostic tests to determine the operational status of the
Licensed Software. MigraTEC shall inform EDS of any education Services
which are included with installation, and such education may be performed
at a time mutually agreed upon by MigraTEC and EDS.
3.5 Right to Cancel for Delays. In the event of a delay in delivery of all or
any portion of Licensed Software listed on a Purchase Order or Licensed
Software listed on a series of Purchase Orders which relate to a specific
project or request for proposal (the Licensed Software listed on such
series of Purchase Orders referred to as "Related Licensed Software"), or
in the event of a delay in the performance of Services which is not excused
in this Agreement, EDS may cancel without charge all or any portion of the
Licensed Software, Related Licensed Software or Services for which delivery
or performance has been so delayed. If, in EDS' opinion, the delivered
4
<PAGE> 9
Licensed Software or Related Licensed Software are not operable without the
remaining undelivered Licensed Software or Related Licensed Software, EDS
may, at MigraTEC's expense, return any delivered Licensed Software or
Related Licensed Software to MigraTEC. EDS shall not be liable for any
expenses incurred by MigraTEC for canceled, undelivered, or returned
Licensed Software or Related Licensed Software. EDS shall receive a refund
of all amounts paid to MigraTEC with respect to the canceled and/or
returned Licensed Software, Related Licensed Software and Services.
3.6 Time and Materials Services. If available from MigraTEC, EDS may obtain on
a time and materials basis from MigraTEC consulting, development and other
Services (excluding support Services which are provided pursuant to other
sections of this Agreement) agreed upon by the parties in accordance with
the terms and conditions set forth below.
(a) EDS may specify on a purchase order the names, required number and
skill levels of Employees to perform Services.
(b) During the course of performance of Services, EDS may request
replacement of an Employee or a proposed Employee. In such event,
MigraTEC shall, within five (5) working days of receipt of such
request from EDS, provide a substitute Employee of sufficient skill,
knowledge, and training to perform the applicable Services. If, within
the first thirty (30) days after an Employee's commencement of
Services, EDS notifies MigraTEC (i) such Employee's level of
performance is unacceptable, (ii) such Employee has failed to perform
as required, or (iii) such Employee, in EDS' sole opinion, lacks the
skill, knowledge or training to perform at the required level, then
EDS shall not be required to pay for Services provided by such
Employee during such period and MigraTEC shall refund to EDS all
amounts paid for such Employee's Services. If EDS requests replacement
of an Employee for the above-referenced reasons after such thirty (30)
day time period, or at any time for a reason other than the reasons
indicated above, EDS shall not be required to pay for, and shall be
entitled to a refund of, any sums paid to MigraTEC for such Employee's
Services after the date of EDS' requested replacement of such
Employee.
(c) MigraTEC shall not replace, without EDS' consent, an Employee then
currently performing Services until the governing Purchase Order
expires or is terminated; however, MigraTEC may replace, without EDS'
consent, an Employee for reasons relating to the Employee's
termination with MigraTEC, promotion, illness, death, or causes beyond
MigraTEC's control.
(d) EDS shall reimburse MigraTEC for reasonable expenses incurred by
Employees in the performance of Services (if requested by MigraTEC in
advance and approved by EDS) which are related to travel, lodging, and
meals; such expenses shall be reimbursed in accordance with EDS'
guidelines for its own employees.
(e) MigraTEC shall establish and shall retain, for a period of three (3)
years following the performance of time and materials Services,
records which adequately substantiate the applicability and accuracy
of Charges for such Services and related expenses to EDS. Upon receipt
of reasonable advance notice from EDS, MigraTEC shall produce such
records for audit by EDS.
(f) Purchase Orders for Services provided or to be provided under this
Section may be canceled at any time without charge or penalty, upon
written notice to MigraTEC.
5
<PAGE> 10
3.7 Services in General. In connection with the performance of any Services
pursuant to this Agreement:
(a) Unless a specific number of Employees is set forth in the governing
Purchase Order, MigraTEC warrants it will provide sufficient Employees
to complete the Services ordered within the applicable time frames
established pursuant to this Agreement or as set forth in such
Purchase Order.
(b) MigraTEC warrants that Employees shall have sufficient skill,
knowledge, and training to perform Services and that the Services
shall be performed in a professional and workmanlike manner.
(c) Employees performing Services in the United States must be United
States citizens or lawfully admitted in the United States for
permanent residence or lawfully admitted in the United States holding
a visa authorizing the performance of Services on behalf of MigraTEC.
(d) MigraTEC warrants that all Employees utilized by MigraTEC in
performing Services are under a written obligation to MigraTEC
requiring Employee: (i) to maintain the confidentiality of information
of MigraTEC's customers, and (ii) if such Employee is not a full-time
employee whose work is considered a "work for hire" under Section 101
of the United States Copyright Code, to assign all of Employee's
right, title, and interest to MigraTEC in and to any Work Product
which is developed, prepared, conceived, made, or suggested by such
Employee while providing Services on behalf of MigraTEC.
(e) MigraTEC shall require Employees providing Services at an EDS location
to comply with applicable EDS security and safety regulations and
policies.
(f) MigraTEC shall provide for and pay the compensation of Employees and
shall pay all taxes, contributions, and benefits (such as, but not
limited to, workers' compensation benefits) which an employer is
required to pay relating to the employment of employees. EDS shall not
be liable to MigraTEC or to any Employee for MigraTEC's failure to
perform its compensation, benefit, or tax obligations. MigraTEC shall
indemnify, defend and hold EDS harmless from and against all such
taxes, contributions and benefits and will comply with all associated
governmental regulations, including the filing of all necessary
reports and returns.
(g) MigraTEC shall allow EDS or its designated third party to conduct a
background investigation and drug screening ("Investigation") of any
Employee performing Services in the United States, Canada and Mexico
if EDS intends to provide the Employee with unescorted access to an
EDS location. In connection with such Investigation EDS shall provide
to MigraTEC a standard form authorizing the Investigation and MigraTEC
shall promptly secure the completion of such form by the Employee. Any
and all information obtained in connection with an Investigation of
any Employee or acquired or made known during such Investigation shall
be deemed confidential and shall not be revealed to persons without a
bona fide need to know. If, after reviewing the results of an
Investigation, EDS elects not to accept an Employee for performance of
Services under this Agreement, MigraTEC agrees to not utilize such
Employee in the performance of Services. EDS shall waive the
Investigation for an Employee if MigraTEC provides EDS with written
confirmation that: (i) MigraTEC has conducted a background and drug
screening investigation of such Employee with satisfactory results, or
(ii) the Employee has been employed with MigraTEC for at least five
(5) years in good standing.
6
<PAGE> 11
3.8 Ownership of Intellectual Property Rights. (a) For purposes of this
Agreement, the following definitions apply:
(i) "Work Product(s)" means (in any form including source code) any and
all ideas, processes, methods, programming aids, formulas,
manufacturing techniques, mask works, reports, programs, manuals,
tapes, card decks, listings, software, flowcharts and systems and any
improvements, enhancements, or modifications to any of the foregoing,
which are developed, prepared, conceived, made, or suggested by any
Employee or by MigraTEC as part of, in connection with, or in
relationship to the performance of Services pursuant to this
Agreement. Work Products also means all such developments as are
originated or conceived during the term of this Agreement but are
completed or reduced to practice thereafter. Notwithstanding the
foregoing or any other provisions of this Agreement, Work Product(s)
shall not include existing proprietary technology and/or software of
MigraTEC, or enhancements thereto, developed by MigraTEC during the
term of this Agreement related to or in connection with 1) MigraTEC's
performance of warranty Service obligations, 2) Licensed Software
support Services, 3) MigraTEC's further development efforts undertaken
independent of this Agreement or 4) a separate written agreement by
the parties prior to the commencement of Services, related to such
separate agreement, that specifies payment is being made by EDS to
MigraTEC to expedite the release of specific maintenance related
Updates and/or Improvements to the Licensed Software. MigraTEC shall
retain all right, title and interest in and to its existing
proprietary technology and/or software, including any enhancements
thereto developed pursuant to 1), 2), 3) or 4) as set forth in this
section hereinabove.
(ii) "Existing Materials" means any confidential or proprietary materials
which belong to third parties or in which MigraTEC has a pre-existing
intellectual property interest.
(iii) "Ownership Rights" includes: (A) all rights, title and interests, and
all United States and foreign intellectual property rights such as,
but not limited to, patent, trade secret, and copyright; (B) the right
to use, duplicate, and disclose Work Products and Work Product data,
in whole or in part, in any manner and for any purpose and to
authorize others to do so; (C) the exclusive right to prepare
derivative works of Work Products and of any portion thereof, with
full rights to authorize others to do the same; (D) the right to
exploit Work Product, whether or not for profit; (E) the right to use,
market or take any other measures without attribution to Employee or
MigraTEC; (F) the right to register ownership interest in a Work
Product without contest or assertion of a competing ownership interest
in such Work Product by MigraTEC and/or any Employee; and, (G) all
"moral rights" in and to Work Products.
(b) MigraTEC shall disclose promptly and cause Employees to disclose
promptly in writing to EDS all Work Products; as to each such
disclosure, such Employee and/or MigraTEC shall specifically describe
to EDS the features or concepts considered new or different.
(c) It is the intent of the parties that EDS shall have all Ownership
Rights in and to Work Products. In order to accomplish such intent,
MigraTEC (i) shall make and shall ensure that each Employee makes,
without reservation, a non-terminable, irrevocable assignment to EDS
of any and all Ownership Rights that Employees and/or MigraTEC may
have in or to such Work Product or any tangible media embodying such
Work Product, and (ii) shall provide to EDS and shall ensure that each
Employee provides such assignment prior to or concurrently with the
provision of the affected Work Product to EDS. If MigraTEC and/or
Employees have any termination rights under law, then upon exercise of
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such termination rights, MigraTEC shall automatically grant and
MigraTEC shall ensure that Employee grants, and EDS shall have an
irrevocable, royalty-free, paid-up, worldwide, perpetual license to use
the Work Product in the same manner, and for the same purposes as EDS
did and was entitled to do prior to such termination. Except as
necessary to perform Services or as agreed upon by the parties in a
supplemental agreement entered into in accordance with this Agreement,
MigraTEC and Employees shall not exercise any Ownership Rights in and
to the Work Product, and hereby waive and agree not to assert any or
all "moral rights" in and to the Work Product, even after the
termination or expiration of this Agreement.
3.9 Use of Existing Materials. To the extent that Work Product(s) under
development may incorporate or require the use of Existing Materials, or to
the extent MigraTEC intends, in its performance of Services, to utilize any
such Existing Materials (except as such are utilized by MigraTEC in the
performance of warranty Service obligations or pre-paid Licensed Software
support Services), MigraTEC shall: (i) notify EDS of such intent prior to
commencement of performance of Services; (ii) identify to EDS the ownership
of such Existing Materials; (iii) describe the use to which MigraTEC
intends to put such Existing Materials; and (iv) explain MigraTEC's ability
to proceed with performance of the Services without the use of such
Existing Materials. EDS may require that MigraTEC perform Services without
the use of such Existing Materials. If any such Existing Material is owned
by a third party and/or is used in the performance of Services, MigraTEC
warrants that it has acquired all licenses and authorizations necessary to
utilize the Existing Material in the manner and for the purpose intended by
MigraTEC in its actual use of such Existing Material in the performance of
Services. To the extent that Existing Materials are incorporated in Work
Products, MigraTEC grants to EDS and its affiliates a royalty-free,
irrevocable, worldwide, non-exclusive, perpetual right to use, modify and
prepare derivative works of such Existing Materials and to use and display
such Existing Materials, with full rights to authorize others to do the
same but only to the extent required to utilize the Work Product in
accordance with the Ownership Rights granted in this Agreement.
3.10 Further Acts. During and subsequent to the term of this Agreement, MigraTEC
shall do, or cause to be done, all such further acts and shall execute,
acknowledge, and deliver, or cause to be executed, acknowledged, and
delivered, any and all further documentation or assignments as EDS may
reasonably require to evidence or perfect EDS' right to use, or Ownership
Rights in, as the case may be, Licensed Software or Work Products.
3.11 Time of Performance. Time is expressly made of the essence with respect to
each and every term and provision of this Article.
3.12 EDS Business Practices. MigraTEC shall comply with the EDS Business
Practices set forth in Exhibit A.
3.13 Training Services. Training Services (as later defined) provided or to be
provided by MigraTEC pursuant to this Agreement shall also be subject to
the terms and conditions set forth in Exhibit E.
3.14 Development Services. Development Services provided or to be provided by
MigraTEC pursuant to this Agreement shall also be subject to the terms and
conditions set forth in Exhibit F.
ARTICLE IV. PROVISION OF LICENSED SOFTWARE
4.1 Acceptance of Licensed Software. EDS shall accept delivered copy(ies) of
Licensed Software on the date (the "Acceptance Date") when all necessary
Documentation has been received and the Licensed Software performs in
accordance with and/or conforms to its Applicable Specifications. In the
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event Licensed Software does not so perform, EDS may (i) continue to test
the Licensed Software with the assistance of MigraTEC, (ii) permit MigraTEC
to repair or replace the Licensed Software at no additional expense to EDS,
or (iii) return the Licensed Software and Documentation to MigraTEC, at
MigraTEC's expense and without liability to MigraTEC, and any amounts paid
by EDS for the Licensed Software and Documentation shall be refunded by
MigraTEC to EDS. Acceptance of Licensed Software does not waive any
warranty rights provided in this Agreement for the Licensed Software.
4.2 Grant of License. For each item of Licensed Software received by EDS,
MigraTEC grants EDS and EDS has a worldwide, nonexclusive, irrevocable,
perpetual license to use, execute, store, and display the object code
version of the Licensed Software, on behalf of EDS and customers of EDS (a
"License") in accordance with the type of License selected and in
accordance with the terms and conditions of this Agreement. A Purchase
Order shall designate the type of License which is selected; if a Purchase
Order fails to designate the type of License desired, then such License
shall be deemed to be a Corporate Software License (as later defined in
this Section) if Licensed Software is subject to LOSC Charges; all others
will default to a CPU Software License.
(a) A "CPU Software License" permits EDS to use the Licensed Software on
any single computer (which may include more than one central
processing unit) or item of equipment ("CPU") and to copy the Licensed
Software as necessary for archival, maintenance, disaster recovery
testing, or back-up purposes. If EDS desires to run parallel
operations in the process of conducting a disaster recovery test or
transferring operations from one CPU to another CPU, EDS may operate
the Licensed Software on two (2) CPUs for the period of time
reasonably necessary to complete the disaster recovery test or
transfer.
(b) A "Site Software License" permits EDS to use the Licensed Software at
the Site designated in the Purchase Order and to copy the Licensed
Software as necessary for dissemination at the Site and for archival,
maintenance, disaster recovery testing, or back-up purposes.
Notwithstanding the foregoing, the Licensed Software may be used at
other than the designated Site, if (i) the designated Site cannot be
used, (ii) the designated Site is replaced or changed by EDS, or (iii)
EDS provides MigraTEC with prior written notice. If EDS desires to run
parallel operations in the process of conducting a disaster recovery
test or transferring operations from one Site to another Site, EDS may
operate the Licensed Software at two (2) Sites for the period of time
reasonably necessary to complete the disaster recovery test or
transfer.
(c) A "Network Software License" permits EDS to use the Licensed Software
on any single computer, file server, or item of equipment which may be
accessed by multiple, networked devices (collectively hereinafter
referred to as the "Network"). Portions of the Licensed Software may
be downloaded as appropriate for use by the devices on the Network. If
EDS desires to run parallel operations in the process of conducting a
disaster recovery test or transferring operations from one Network to
another Network, EDS may operate the Licensed Software on two (2)
Networks for the period of time reasonably necessary to complete the
disaster recovery test or transfer.
(d) A "Corporate Software License" permits EDS to use the Licensed
Software at any EDS or EDS customer location and on any items of
equipment and to make and use unlimited copies of the Licensed
Software.
(e) Any License granted under this Agreement permits EDS to (i) use
Licensed Software for its corporate purposes including, but not
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limited to, providing services to or processing data of customers of
EDS, providing remote access to the Licensed Software, and performing
disaster recovery, disaster testing, and backup as EDS deems necessary,
and (ii) use and copy Licensed Software; and use, copy, and modify
Documentation for the purpose of creating and using training materials
relating to the Licensed Software, which training materials may include
flow diagrams, system operation schematics, or screen prints from
operation of the Licensed Software. Access to and use of the Licensed
Software by customers of EDS shall be considered authorized use under
this Section so long as such use is in conjunction with EDS' provision
of services to, or EDS' processing the data of, such customers, and so
long as any such customers are bound by obligations of confidentiality.
The governing License also includes the right to use the source code
version of Licensed Software in accordance with the terms and conditions of
the Section of this Agreement titled "Provision of Source Code."
4.3 Transfer of Licensed Software. During the performance or upon termination
of a contract with an EDS customer or upon any transfer of equipment
incorporating Licensed Software to a third party (such customers and third
parties referred to as "Transferee"), upon request by EDS, the Licensed
Software will be licensed directly by MigraTEC to such Transferee in
accordance with the terms and conditions of MigraTEC's standard software
license agreement or as agreed upon by MigraTEC and Transferee. Any
assignment of Licensed Software in accordance with this Section shall be at
no additional charge to EDS or Transferee, and EDS shall have no further
liability or responsibility with respect to Licensed Software.
4.4 Ownership of Licensed Software and Modifications. The Licensed Software
shall be and remain the property of MigraTEC or third parties which have
granted MigraTEC the right to license the Licensed Software and EDS shall
have no rights or interests therein except as set forth in this Agreement.
EDS shall be entitled to (i) modify the Licensed Software and to develop
software derivative of the Licensed Software provided EDS has access to the
source code as per this Agreement, or (ii) develop interfaces with the
Licensed Software. All modifications of and software derivative of the
Licensed Software developed by EDS, pursuant to EDS' access to the source
code pursuant to the Section of this Agreement titled "Provision of Source
Code", shall be and remain the property of EDS, and MigraTEC and its
Employees shall have no rights or interests therein. Except in connection
with MigraTEC's performance of warranty Service obligations, pre-paid
Licensed Software support Services, development efforts of MigraTEC which
are independent of this Agreement or written agreement by the parties prior
to the commencement of Services that specifies payment is being made by EDS
to MigraTEC to expedite the release of specific maintenance related Updates
and/or Improvements to the Licensed Software, all modifications of and
software derivative of the Licensed Software developed at EDS' expense by
MigraTEC and its Employees, pursuant to the terms of this Agreement, shall
be considered Work Product and EDS shall have rights in such Work Product
as established in the Section titled "Ownership of Intellectual Property
Rights" elsewhere in this Agreement.
4.5 Proprietary Markings. EDS shall not remove or destroy any proprietary
markings or proprietary legends placed upon or contained within the
Licensed Software.
4.6 Duplication of Documentation. EDS may duplicate Licensed Software
Documentation, at no additional charge, for EDS' use or for use by a
customer of EDS in connection with the provision of Licensed Software so
long as all required proprietary markings are retained on all duplicated
copies.
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4.7 Non-Disclosure. During the term of a License, EDS will treat the Licensed
Software with the same degree of care and confidentiality which EDS
provides for similar information belonging to EDS which EDS does not wish
disclosed to the public, but not less than reasonable care. This provision
shall not apply to Licensed Software, or any portion thereof, which is (i)
already known by EDS without an obligation of confidentiality, (ii)
publicly known or becomes publicly known through no unauthorized act of
EDS, (iii) rightfully received from a third party without obligation of
confidentiality, (iv) disclosed without similar restrictions by MigraTEC to
a third party, (v) approved by MigraTEC for disclosure, or (vi) required to
be disclosed pursuant to a requirement of a governmental agency or law so
long as EDS provides MigraTEC with timely prior written notice of such
requirement. It will not be a violation of this Section if (A) EDS provides
access to and the use of the Licensed Software to third parties providing
services to EDS so long as EDS secures execution by such third parties of a
confidentiality agreement as would normally be required by EDS, or (B) EDS
independently develops software which is similar to Licensed Software, so
long as such independent development is substantiated by written
documentation.
4.8 Licensed Software Support Services. The support Services set forth below
for the Licensed Software shall be provided by MigraTEC to EDS during the
Warranty Period at no charge to EDS. Thereafter, such support Services
shall be provided by MigraTEC, upon EDS' request, for either a fixed or
open-ended term, at the applicable Charges set forth in Exhibit B, upon the
terms contained in the next Section. EDS may discontinue such support
Services at any time by providing thirty (30) days' advance written notice
to MigraTEC. If such support Services were provided by MigraTEC for an
open-ended term, EDS shall promptly receive a refund of pre-paid support
Charges which reflects the amount for discontinued support Services after
the effective date of the notice.
(a) MigraTEC shall promptly notify EDS of any defects, errors or
malfunctions ("Defects") in the Licensed Software or Documentation of
which MigraTEC becomes aware from any source and shall promptly
provide to EDS modified versions of Licensed Software or Documentation
which incorporate corrections of any Defects ("Corrections"). MigraTEC
shall also provide to EDS all operational and support assistance
necessary to cause Licensed Software to perform in accordance with its
Applicable Specifications and remedial support designed to provide a
by-pass or temporary fix to a Defect until the Defect can be
permanently corrected. MigraTEC shall use its best efforts to respond
to requests from EDS for Licensed Software support in a manner and
time frame which are reasonably responsive considering the nature and
severity of the Defect which gave rise to such request.
(b) MigraTEC shall provide to EDS all upgrades, modifications,
improvements, enhancements, extensions, and other changes to Licensed
Software developed by MigraTEC ("Improvements") and all updates to the
Licensed Software necessary to cause the Licensed Software to operate
under new versions or releases of the Licensed Software's current
operating system(s) ("Updates") which are generally made available to
other customers of MigraTEC. EDS shall have the option to implement
any Improvement or Update and any failure by EDS to so implement shall
not affect EDS' right to continue to receive support and maintenance
Services.
(c) MigraTEC shall provide toll-free telephone hot-line support between
8:00 a.m. and 5:00 p.m. Central Standard Time. For locations outside
of North America, EDS may provide MigraTEC with an e-mail or fax
description of the problem. MigraTEC will acknowledge receipt of said
problem by the next business day. In addition, MigraTEC shall provide
to EDS, at the request of EDS and at MigraTEC's then current
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established charges therefor, additional telephone hot-line support
for up to twenty-four (24) hours per day, seven (7) days per week.
(d) MigraTEC shall provide to EDS any revisions to the existing
Documentation developed for the Licensed Software or necessary to
reflect all Corrections, Improvements, or Updates.
(e) MigraTEC shall make Licensed Software training available to persons
designated by EDS to the extent agreed upon by the parties.
(f) If the applicable Charge for Licensed Software is payable on a
periodic basis, and such Charge includes provision of support
Services, then if an Event of Default as described in the Section of
this Agreement titled "Provision of Source Code" occurs or an event
described in the Section of this Agreement titled "Termination for
Insolvency or Bankruptcy" occurs and if MigraTEC fails to provide the
support Services described above, then EDS' Charge for the affected
Licensed Software shall be immediately reduced to reflect such failure
by subtracting that portion of the Charge allocable to the provision
of support Services.
4.9 Licensed Software Support Services Options. EDS may obtain the support
Services described in the previous Section for Licensed Software on a
central site support basis and/or on an individual site support basis. In
the absence of a designation of central or individual site support in a
Purchase Order, such support shall be deemed to be individual site support.
The Charges for each option shall be as set forth in Exhibit B or as
otherwise agreed upon by the parties. Where "central site support" is
requested, support Services shall be provided by MigraTEC to and shall be
requested by EDS through a single point of contact identified by EDS on a
Purchase Order. To the extent necessitated by geographic diversity or where
required in order to support multiple time zones, EDS may designate
multiple central site support locations. With respect to central site
support, MigraTEC shall provide to EDS one master disk and one copy of all
Documentation relating to each Correction, Improvement, or Update. EDS
shall be entitled to copy the disk and Documentation and distribute the
copies or electronically transmit the copied information to each location
supported by the central site. A designation of central site support shall
not prevent an individual user of Licensed Software from contacting
MigraTEC in the event of an emergency. Where "individual site support" is
requested, support Services shall be provided by MigraTEC to the applicable
licensed CPU, Site, or Network, or, in the case of a Corporate Software
License, to a licensed user.
4.10 Provision of Source Code. EDS' ability to utilize adequately Licensed
Software will be seriously jeopardized if MigraTEC fails to maintain or
support such Licensed Software unless complete Licensed Software source
code and related Documentation is made available to EDS for EDS' use in
satisfying EDS' maintenance and support requirements. Therefore, MigraTEC
agrees that if an "Event of Default" occurs, then MigraTEC will provide to
EDS one copy of the most current version of the source code for the
affected Licensed Software and associated Documentation in accordance with
the following:
(a) An Event of Default shall be deemed to have occurred if MigraTEC: (i)
ceases to market or make available maintenance or support Services for
the Licensed Software during a period in which EDS is entitled to
receive or to purchase, or is receiving or purchasing, such
maintenance and support and MigraTEC has not promptly cured such
failure despite EDS' demand that MigraTEC make available or perform
such maintenance and support, (ii) becomes insolvent, executes an
assignment for the benefit of creditors, or becomes subject to
bankruptcy or receivership proceedings, (iii) ceases business
operations generally or (iv) has transferred all or substantially all
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of its assets or obligations set forth in this Agreement to a third
party which has not assumed all of the obligations of MigraTEC set
forth in this Agreement.
(b) MigraTEC will promptly and continuously update and supplement the
source code as necessary with all revisions, Corrections,
enhancements, and other changes developed for the Licensed Software
and Documentation. Such source code shall be in a form suitable for
reproduction and use by computer and photocopy equipment, and shall
consist of a full source language statement of the program or programs
comprising the Licensed Software and complete program maintenance
Documentation which comprise the pre-coding detail design
specifications, and all other material necessary to allow a reasonably
skilled programmer or analyst to maintain and enhance the Licensed
Software without the assistance of MigraTEC or reference to any other
materials.
(c) The governing License for the Licensed Software includes the right to
use source code received under this Section as necessary to modify,
maintain, and update the Licensed Software.
(d) Upon request by EDS, MigraTEC will deposit in escrow with an escrow
agent acceptable to EDS and pursuant to a mutually acceptable escrow
agreement supplemental to this Agreement, a copy of the source code
which corresponds to the most current version of the Licensed Software
in use by EDS. MigraTEC shall pay all fees of the escrow agent for
services provided. If MigraTEC currently maintains or enters into an
escrow agreement for the Licensed Software source code for the benefit
of other customers of MigraTEC, then MigraTEC shall provide to EDS a
current copy of such escrow agreement within ten (10) days of EDS'
request and if such existing escrow agreement is acceptable to EDS,
MigraTEC shall include EDS as a third party beneficiary of such escrow
agreement at no charge to EDS. In such case, the existing escrow
agreement shall be considered a supplemental agreement to this
Agreement. If such existing escrow agreement is not acceptable to EDS,
and EDS and MigraTEC elect not to enter into a separate escrow
agreement, EDS and MigraTEC shall enter into an amendment to such
existing escrow agreement which provides mutually acceptable terms and
conditions; at a minimum, such terms and conditions shall allow EDS to
conduct an audit of, or shall require that the escrow agent conduct an
audit of, the copy of source code in escrow to ensure that such copy
meets the requirements established in this Section. MigraTEC's entry
into, or failure to enter into, an agreement with an escrow agent or
to deposit the described materials in escrow shall not relieve
MigraTEC of its obligations to EDS described in this Section.
(e) If, as a result of an Event of Default, MigraTEC fails to provide
required support Services, then any periodic license fee which EDS is
required to pay under this Agreement for Licensed Software shall be
reduced to reflect such lack of support Services. At such time as
MigraTEC commences offering the support Services described in this
Agreement for Licensed Software, EDS may obtain such support Services
as provided for elsewhere in this Agreement.
4.11 Acquisition of Third Party Software. If EDS has acquired software products
from a third party and rights to such software products are subsequently
acquired by MigraTEC (whether through purchase of the third party in whole
or in part, through purchase of the software products, through acquisition
of the rights to market the software, or through any other means), then EDS
shall have the option of (i) continuing to use the software products under
the original license agreement with such third party at no additional
charge to EDS other than applicable fees identified in such license
agreement, or (ii) using the software products under the terms and
conditions of this Agreement.
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4.12 Software from an Authorized Third Party. If EDS acquires MigraTEC's
software products from a value added reseller, dealer, distributor, or
other MigraTEC authorized third party provider or if the Licensed Software
is embedded in software products acquired from a third party, MigraTEC
agrees that, at EDS' option, such software products shall be deemed to have
been acquired under this Agreement.
4.13 Ownership of Imbedded Code. To the extent the Licensed Software creates
code to embed into or be linked with the source code being processed
("Embedded Code"), such Embedded Code (both object and source) is owned by
the entity whose code has been processed by the Licensed Software;
therefore MigraTEC has no claim on any of the processed code and/or
Embedded Code and the entity which owns the processed code and associated
Embedded Code can, but is not limited to, use, copy, modify, distribute or
sell such Embedded code as they choose.
ARTICLE V. WARRANTIES, INDEMNITIES, AND LIABILITIES
5.1 Warranty. MigraTEC represents and warrants that:
(a) MigraTEC has not and will not enter into agreements or commitments
which are inconsistent with or conflict with the rights granted to EDS
in this Agreement;
(b) The Products are and shall be free and clear of all liens and
encumbrances, and EDS shall be entitled to use the Products without
disturbance;
(c) No portion of the Products contain, at the time of delivery, any "back
door," "time bomb," "Trojan horse," "worm," "drop dead device,"
"virus," or other computer software routines or hardware components
designed to (i) permit access or use of either the Products or EDS'
computer systems by MigraTEC or a third party not authorized by this
Agreement, (ii) disable, damage or erase the Products or data, or
(iii) perform any other such actions;
(d) The Licensed Software contains a key system comprised of encrypted
program files, and an encrypted line of code counter. The line of code
counter shall be set to the LOSC expected to be processed unless
otherwise agreed to by the parties. Such LOSC volume will be
designated on the Purchase Order. The Products and the design thereof
shall not contain any additional preprogrammed preventative routines
or similar devices which prevent EDS from exercising the rights set
forth in Article IV of this Agreement or from utilizing the Products
for the purpose for which they were designed;
(e) Each Product and its media (i) shall be new and shall be free from
defects in manufacture, materials, and design, (ii) shall be
manufactured in a good and workmanlike manner using a skilled staff
fully qualified to perform their respective duties, and (iii) shall
function properly under ordinary use and operate in conformance with
its Applicable Specifications and Documentation from the date of
receipt until the date one (1) year from the applicable Acceptance
Date of such Product;
(f) The Products are, and shall continue to be, data, program, and upward
compatible with any other Products available or to be available from
MigraTEC so that data files created for a Product can be utilized
without adaptation with other Products and Products will operate with
other Products and will not result in the need for alteration,
emulation, or other loss of efficiency. MigraTEC shall provide to EDS
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at least ninety (90) days prior written notice to discontinue any
Product; and
(g) Neither the performance nor the functionality of the Products will be
affected by any changes to the date format or date calculations within
any part of the Product either before, during or after the year 2000.
During the Warranty Period, MigraTEC will provide warranty Service to EDS
at no additional cost and will include all Services or replacement Products
or Product media necessary to enable MigraTEC to comply with the warranties
set forth in this Agreement. MigraTEC shall pass through to EDS any
manufacturers' warranties which MigraTEC receives on the Products and, at
EDS' request, MigraTEC shall enforce such warranties on EDS' behalf.
MigraTEC agrees that EDS shall be entitled to pass through to Product end
users any warranties received from MigraTEC for such Products pursuant to
this Agreement.
5.2 Proprietary Rights Indemnification. MigraTEC represents and warrants that
(i) at the time of delivery to EDS, no Product provided under this
Agreement is the subject of any litigation ("Litigation"), and (ii)
MigraTEC has all right, title, ownership interest, and/or marketing rights
necessary to provide the Products to EDS and that each License, the
Products and their sale, license, and use hereunder do not and shall not
directly or indirectly violate or infringe upon any copyright, patent,
trade secret, or other proprietary or intellectual property right of any
third party or contribute to such violation or infringement
("Infringement"). MigraTEC shall indemnify and hold EDS and Product end
users and their respective successors, officers, directors, employees, and
agents harmless from and against any and all actions, claims, losses,
damages, liabilities, awards, costs, and expenses (including legal fees)
resulting from or arising out of any Litigation, any breach or claimed
breach of the foregoing warranties, or which is based on a claim of an
Infringement and MigraTEC shall defend and settle, at its expense, all
suits or proceedings arising therefrom. EDS shall inform MigraTEC of any
such suit or proceeding against EDS and shall have the right to participate
in the defense of any such suit or proceeding at its expense and through
counsel of its choosing. MigraTEC shall notify EDS of any actions, claims,
or suits against MigraTEC based on an alleged Infringement of any party's
intellectual property rights in and to the Products. In the event an
injunction is sought or obtained against use of the Products or in EDS'
opinion is likely to be sought or obtained, MigraTEC shall promptly, at its
option and expense, either (A) procure for EDS and Product end users the
right to continue to use the infringing Product as set forth in this
Agreement, or (B) replace or modify the infringing Products to make its use
non-infringing while being capable of performing the same function without
degradation of performance.
5.3 Cross Indemnification. In the event any act or omission of a party or its
employees, servants, agents, or representatives causes or results in (i)
damage to or destruction of property of the other party or third parties,
and/or (ii) death or injury to persons including, but not limited to,
employees or invitees of either party, then such party shall indemnify,
defend, and hold the other party harmless from and against any and all
claims, actions, damages, demands, liabilities, costs, and expenses,
including reasonable attorneys' fees and expenses, resulting therefrom. The
indemnifying party shall pay or reimburse the other party promptly for all
such damage, destruction, death, or injury.
5.4 Limitation of Liability. Neither party shall be liable to the other
pursuant to this Agreement for any amounts representing loss of profits,
loss of business or indirect, consequential, exemplary, or punitive damages
of the other party. The foregoing shall not limit the indemnification,
defense and hold harmless obligations set forth in this Agreement.
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5.5 Insurance. MigraTEC shall, at MigraTEC's sole expense, maintain the
following insurance:
(a) Commercial General Liability Insurance including contractual coverage:
The limits of this insurance for bodily injury and property damage
combined shall be at least:
<TABLE>
<S> <C>
Each Occurrence Limit $1,000,000
General Aggregate Limit $2,000,000
Products-Completed Operations Limit $1,000,000
Personal and Advertising injury Limit $1,000,000
</TABLE>
(b) Business Automobile Liability Insurance: Should the performance of
this Agreement involve the use of automobiles, MigraTEC shall provide
comprehensive automobile insurance covering the ownership, operation
and maintenance of all owned, non-owned and hired motor vehicles.
MigraTEC shall maintain limits of at least $1,000,000 per occurrence
for bodily injury and property damage combined.
(c) Workers' Compensation Insurance: Such insurance shall provide coverage
in amounts not less than the statutory requirements in the state where
the work is performed, even if such coverage is elective in that
state.
(d) Employers Liability Insurance: Such insurance shall provide limits of
not less than $1,000,000 per occurrence.
The insurance specified in (a) and (b) above shall: (i) name EDS, its
directors, officers, employees and agents as additional insureds, and, (ii)
provide that such insurance is primary coverage with respect to all
insureds and additional insureds.
The above insurance coverages may be obtained through any combination of
primary and excess or umbrella liability insurance. EDS may require higher
limits or other types of insurance coverage(s) as necessary and appropriate
under the applicable purchase order.
MigraTEC shall provide at EDS' request certificates evidencing the
coverages, limits and provisions specified above on or before the execution
of the Agreement and thereafter upon the renewal of any of the policies.
MigraTEC shall require all insurers to provide EDS with a thirty (30) day
advanced written notice of any cancellation, nonrenewal or material change
in any of the policies maintained in accordance with this Agreement.
5.6 Survival of Article V. The provisions of this Article V shall survive the
term or termination of this Agreement for any reason.
ARTICLE VI. PAYMENTS TO SUPPLIER
6.1 Charges, Prices, and Fees for Licensed Software and Services. Charges,
prices, and fees ("Charges") and discounts, if any, for Licensed Software
and Services shall be determined as set forth in Exhibit B, in a Purchase
Order, or as otherwise agreed upon by the parties, unless modified as set
forth in this Agreement. Upon EDS' request, MigraTEC shall: (i) provide to
EDS current copies of MigraTEC's standard published prices, and (ii)
records which substantiate that EDS has received the Charges and discounts
to which EDS is entitled to under this Agreement. In no event shall Charges
exceed MigraTEC's then current established charges, prices and fees. if
promotional discounts or programs are extended to other customers, dealers,
or distributors of MigraTEC, EDS shall be entitled to participate in such
promotional discounts or programs. All purchases which utilize any such
discounts shall be deemed for all purposes including, without limitation,
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for purposes of calculating accumulated purchases and any discounts
hereunder, to have been purchased or licensed under this Agreement.
6.2 Modifications to Charges. Where a change in an established Charge for
Licensed Software or Services is provided for in this Agreement, MigraTEC
shall give to EDS at least ninety (90) days' prior written notice of such
change excluding LOSC Charges.
(a) The LOSC Charges (excluding MigraTEC's factory Services) are at
predetermined amounts through December 31, 1999 as listed in Exhibit
B. MigraTEC may increase the LOSC Charge after December 31, 1999, by
no more than twenty percent (20%) over the then current Charge;
thereafter, any increase in a Charge shall not occur unless a minimum
of twelve (12) months has elapsed since the effective date of the
previously established Charge, and not exceed twenty percent (20%) of
such Charge. For any increase in the LOSC Charge effective after
December 31, 1999, MigraTEC must provide EDS at least ninety (90) days
prior written notice.
If such LOSC Charge increase occurs during an EDS billing period, then
the increase will not go into effect, as it relates to that billing
period, until the start of the next billing period. For example if an
EDS billing period goes from February 16th to March 15th and the LOSC
Charge increase goes into effect on March 1st; then for all of the
said EDS billing period the Charge will remain at $0.05, and will
increase to $0.075 starting March 16th, the start of the next billing
period.
Any increase in a Charge for Products not based upon the LOSC Charge
shall not occur during the first six (6) months of this Agreement, or
during the term of the applicable Purchase Order, whichever period is
longer. Thereafter, any increase in a Charge shall (i) not occur
unless a minimum of six (6) months has elapsed since the effective
date of the previously established Charge, and (ii) not exceed ten
percent (10%) of such Charge.
(b) Any increase in a Charge for Services (including MigraTEC's factory
Services) shall not occur during the first six (6) months of this
Agreement, or during the specified period for performance of Services,
whichever period is longer. Thereafter, any increase in a Charge shall
(i) not occur unless a minimum of six (6) months has elapsed since the
effective date of the previously established Charge, and (ii) not
exceed fifty percent (50%) of such Charge.
(c) All purchase orders issued by EDS prior to the end of the required
notice period will be honored at the then current Charges so long as
the scheduled delivery date of the applicable Licensed Software or
Services is within ninety (90) days after the effective date of the
increase.
(d) If MigraTEC's established Charge, less any applicable discount or
promotion, on the scheduled delivery date is lower than the
established Charge for such Licensed Software or Service stated in the
applicable Purchase Order, then EDS shall be entitled to obtain such
Licensed Software or Service at such lower Charge, less any applicable
discount or promotion.
6.3 Auto Payment. This Section shall apply to Purchase Orders identified as
being subject to automatic payment by EDS.
(a) Single Payment for Recurring Charges. All Charges which are due and
payable on a monthly, annual or other periodic basis for Licensed
Software and Services ("Recurring Charges") shall be paid by EDS on
the same date of the month for each month that such Charges are due
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(the "Remit Date"). The initial payment for a Recurring Charge shall
be made on the first Remit Date after the Applicable Event provided
that such Applicable Event occurs at least five (5) days prior to the
first Remit Date. An "Applicable Event" is the event set forth in a
Purchase Order that initiates payment of Charges (such as the
installation, receipt, or acceptance of the Licensed Software; or the
commencement or completion of Services). If the Applicable Event
occurs less than five (5) days prior to the first Remit Date, the
initial payment for such Recurring Charge shall be made on the
following Remit Date, and EDS shall not be subject to interest or
penalties as a result of such late payment.
(b) Payment for Other Charges. Except for Recurring Charges, or unless
otherwise agreed to by the parties in writing, all payments due
MigraTEC for Licensed Software and Services shall be paid within
thirty (30) days after the date of the Applicable Event.
(c) Invoices Required Under Auto Payment. MigraTEC must send EDS an
invoice to receive payment for any amounts due for any Charges which
are payable and have not been identified on the applicable Purchase
Order which is subject to automatic payment.
(d) Reconciliation. From time to time, at either party's request, the
other party shall assist with the reconciliation of the payments made
by EDS to MigraTEC.
(e) Taxing Jurisdictions. MigraTEC shall provide EDS with the list of
states and taxing jurisdictions, and their respective registration
numbers where MigraTEC is qualified and registered to collect
sales/use taxes in all of the taxing jurisdictions within that state.
If such written notification is not received by EDS from MigraTEC,
then EDS shall remit the appropriate tax directly to the taxing
authority. MigraTEC shall promptly notify EDS of any additional
jurisdictions to which MigraTEC may qualify and register to collect
sales/use taxes.
6.4 Payment Through Invoicing. This Section applies to Purchase Orders issued
by EDS which are not identified as being subject to automatic payment or to
any invoice received by EDS from MigraTEC as permitted by this Agreement.
(a) Except as otherwise set forth in this Agreement, any undisputed sum
due to MigraTEC pursuant to this Agreement shall be payable within
thirty (30) days after receipt by EDS of a correct invoice therefor
from MigraTEC. MigraTEC shall invoice EDS on or after the applicable
Acceptance Date for the Licensed Software covered by such invoice.
Periodic payments, if any, due to MigraTEC pursuant to this Agreement
shall be invoiced at the beginning of the period to which they apply.
Payment for any other Services shall be invoiced as agreed upon by the
parties or, in the absence of an agreement, upon completion of such
Services.
(b) A "correct" invoice shall contain (i) MigraTEC's name and invoice
date, (ii) the specific Purchase Order number if applicable, (iii)
description including serial number as applicable, price, and quantity
of the Licensed Software or Services actually delivered or rendered,
(iv) credits (if applicable), (v) name (where applicable), title,
phone number, and complete mailing address of responsible official to
whom payment is to be sent, and (vi) other substantiating
documentation or information as may reasonably be required by EDS from
time to time. A correct invoice must be submitted to the appropriate
invoice address listed on the applicable Purchase Order.
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6.5 Software Fee Payment for Line of Source Code Charges.
(a) On or before the end of each calendar month, EDS shall submit to
MigraTEC a purchase order setting forth the Lines of Source Code
processed during the previous month's billing cycle, and the Line of
Source Code Charges due for such Lines of Source Code. For example,
some EDS billing cycles run from the 16th of one month to the 15th of
the next month, so for the August 16th through September 15th billing
cycle, an invoice would be sent to MigraTEC no later than September
30. A purchase order will not be issued if no billable LOSC were
processed during the previous months billing cycle. Such Lines of
Source Code processed shall be determined by EDS independent of the
line counter associated with the Licensed Software key. It is
anticipated there will be discrepancies between the line counter
associated with the Licensed Software and the Lines of Source Code
listed on the Purchase Order because there are differences in the
respective equations for counting lines. EDS will calculate the Lines
of Source Code based upon the Lines of Source Code definition
contained in this Agreement. Upon receipt of such purchase order
MigraTEC will invoice EDS for such amount due to MigraTEC.
(b) EDS shall establish, maintain and retain, for a period of fifteen (15)
months following the performance of year 2000 services utilizing the
Licensed Software, complete, clear and accurate records of source code
processed by the Licensed Software for each Site where EDS or its
Affiliates use the Licensed Software. Such records will adequately
substantiate the accuracy of the Purchase Order(s) for Line of Source
Code royalties set forth above in Section 6.5(a) of this Agreement.
(c) Upon sixty (60) days advance notice from MigraTEC, and no more often
than once in any twelve (12) month period, EDS shall produce such
records maintained by EDS pursuant to Section 6.5(b) of this Agreement
for audit. Said audit will be conducted by a certified public
accountant (the "Auditor") selected by MigraTEC with the prior written
consent of EDS, which consent shall not be unreasonably withheld.
MigraTEC shall be responsible for all the fees and costs of such
Auditor. Such Auditor must enter into a non-disclosure agreement with
provisions at least as restrictive as those set forth in Section 8.6.
If the audit finds a discrepancy in the royalty amounts paid MigraTEC
then EDS will be invoiced or credited for the difference, as
applicable.
6.6 Taxes.
(a) Unless EDS provides evidence of exemption, EDS shall pay or reimburse
MigraTEC, where EDS is liable under applicable tax statute, amounts
equal to taxes which are imposed upon EDS' acquisition of Products or
Services including federal excise taxes, or sales or use taxes;
provided, however, EDS shall not be obligated to pay or reimburse
MigraTEC for any taxes attributable to the sale of any Products or
Services which are imposed on or measured by net or gross income,
capital, net worth, franchise, privilege, any other taxes, or
assessments, nor any of the foregoing imposed on or payable by
MigraTEC.
(b) MigraTEC agrees to reasonably cooperate with EDS in the audit or
minimization of any applicable tax and shall make available to EDS,
and any taxing authority, all information, records, or documents
relating to any audits or assessments attributable to or resulting
from the payment process under this Agreement, and the filing of any
tax returns or the contesting of any tax.
EDS shall not be obligated to pay or reimburse MigraTEC for additions
to taxes, penalties, interest, fees, or other expenses or costs, if
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any, incurred by EDS as a result of, or attributable to, (i)
MigraTEC's failure to verify taxability of a purchase, (ii) MiqraTEC's
failure to correctly calculate or remit taxes in a timely manner, or
(iii) MigraTEC's negligence, misconduct or failure to file properly
any required returns or reports, or other required documents.
(c) Upon written notification by EDS and subsequent verification by
MigraTEC, MigraTEC shall reimburse or credit, as applicable, EDS in a
timely manner, for any and all taxes erroneously paid by EDS.
(d) EDS shall provide MigraTEC with, and MigraTEC shall accept in good
faith, resale, direct pay, or other exemption certificates, as
applicable. MigraTEC agrees to separately identify on the invoice the
taxable and non-taxable purchases, the types of tax and the taxing
authorities.
(e) Where Products are destined or Services are performed internationally,
then at EDS' direction, payment may be made by EDS or its affiliate
(i) in country to the local affiliate, (ii) in the United States, or
(iii) in a country mutually agreed upon by the parties.
(f) If EDS or an affiliate of EDS is required by law to make any deduction
or to withhold from any sum payable hereunder, then the sum payable by
EDS or such affiliate of EDS upon which the deduction is based shall
be paid to MigraTEC net of such deduction or withholding. EDS or such
affiliate of EDS shall pay the applicable tax authorities any such
required deduction or withholding.
ARTICLE VII. TERMINATION
7.1 Termination for Cause. Except as provided below by the Section of this
Agreement titled "Termination for Non-Payment," in the event that either
party materially or repeatedly defaults in the performance of any of its
duties or obligations set forth in this Agreement, and such default is not
substantially cured within thirty (30) days after written notice is given
to the defaulting party specifying the default, then the party not in
default may, by giving written notice thereof to the defaulting party,
terminate the applicable License or Purchase Order relating to such default
as of a date specified in such notice of termination.
7.2 Termination for Insolvency or Bankruptcy. Either party may immediately
terminate this Agreement and any Purchase Order by giving written notice to
the other party in the event of (i) the liquidation or insolvency of the
other party, (ii) the appointment of a receiver or similar officer for the
other party, (iii) an assignment by the other party for the benefit of all
or substantially all of its creditors, (iv) entry by the other party into
an agreement for the composition, extension, or readjustment of all or
substantially all of its obligations, or (v) the filing of a meritorious
petition in bankruptcy by or against the other party under any bankruptcy
or debtors' law for its relief or reorganization.
7.3 Termination for Non-Payment. MigraTEC may terminate a Purchase Order, or
any portion thereof, if EDS fails to pay when due any undisputed amounts
due pursuant to such Purchase Order and such failure continues for a period
of sixty (60) days after the last day payment is due, so long as MigraTEC
gives EDS written notice of the expiration date of the aforementioned sixty
(60) day period at least thirty (30) days prior to the expiration date.
7.4 Termination of Software License. EDS may terminate any License for any
reason by providing written notice to MigraTEC. If EDS elects to so
terminate a License, EDS shall return to MigraTEC or, at EDS' option,
destroy, all copies of the Licensed Software and Documentation in EDS'
possession which are the subject of the terminated License, except as may
be
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necessary for archival purposes. In such event, MigraTEC shall refund to
EDS a prorated amount of any prepaid charges for support Services for the
Licensed Software.
7.5 Rights Upon Termination. Unless specifically terminated as set forth in
this Article, all Licenses (and EDS' right to use the Licensed Software in
accordance with such Licenses) and Purchase Orders which require
performance or extend beyond the term of this Agreement shall, at EDS'
option, be so performed and extended as necessary to complete the
performance of such Purchase Orders and shall continue to be subject to the
terms and conditions of this Agreement.
ARTICLE VIII. MISCELLANEOUS
8.1 Binding Nature, Assignment, and Subcontracting. This Agreement shall be
binding on the parties and their respective successors in interest and
assigns, but MigraTEC shall not have the power to assign this Agreement
without the prior written consent of EDS. If MigraTEC subcontracts or
delegates any of its duties or obligations of performance in this Agreement
or in a Purchase Order to any third party, MigraTEC shall remain fully
responsible for complete performance of all of MigraTEC's obligations set
forth in this Agreement or in such Purchase Order and for any such third
party's compliance with the non-disclosure and confidentiality provisions
set forth in this Agreement.
8.2 Counterparts. This Agreement may be executed in several counterparts, all
of which taken together shall constitute one single agreement between the
parties.
8.3 Headings. The Article and Section headings used in this Agreement are for
reference and convenience only and shall not enter into the interpretation
hereof.
8.4 Authorized Agency. From time to time and at any time, EDS may assume
operational responsibility for computer software programs acquired directly
or indirectly from MigraTEC by third parties which become customers or
affiliates, or which are acquired by EDS, after the Effective Date.
(a) With respect to such customers, and immediately upon execution of a
contract between EDS and a customer, the computer software programs
acquired from MigraTEC by such customer shall be governed by the terms
and conditions of this Agreement except for pricing amounts which will
be governed by the agreement between the customer and MigraTEC, and
EDS may use such computer software programs in accordance with this
Agreement at no additional charge to EDS or its customer, provided,
however, that such computer software programs may only be used by EDS
on behalf of that customer. With respect to each such customer,
MigraTEC, EDS and the customer shall execute an access agreement
authorizing EDS' use of the computer software programs. Such access
agreement shall be in a form substantially similar to the Third Party
System Access Agreement attached to this Agreement as Exhibit C.
(b) With respect to any such affiliate, and upon MigraTEC's receipt of
written notice from EDS and such affiliate, the license or other
agreement governing the use and support of such computer software
programs shall automatically be deemed to have been assigned to EDS,
provided, however, that such assigned license or other agreement shall
be superseded by, and the use and support of the computer software
programs shall be governed by, the terms and conditions of this
Agreement.
(c) With respect to any third party with which EDS either (i) buys,
leases, or otherwise acquires all or a substantial part of the assets
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or business of such third party, or (ii) consolidates with or merges
with said third party, the license or other agreement governing the
use and support of such computer software programs shall automatically
be deemed to have been assigned to EDS. At that time, EDS may
supersede such assigned license or other agreement with the terms and
conditions of this Agreement, in which case the use and support of
such computer software programs shall be governed by the terms and
conditions of this Agreement, or EDS may elect to have the assigned
license or other agreement continue to govern the use of such computer
software programs.
8.5 Relationship of Parties. MigraTEC is performing pursuant to this Agreement
only as an independent contractor. MigraTEC has the sole obligation to
supervise, manage, contract, direct, procure, perform or cause to be
performed its obligations set forth in this Agreement, except as otherwise
agreed upon by the parties. Nothing set forth in this Agreement shall be
construed to create the relationship of principal and agent between
MigraTEC and EDS. MigraTEC shall not act or attempt to act or represent
itself, directly or by implication, as an agent of EDS or its affiliates or
in any manner assume or create, or attempt to assume or create, any
obligation on behalf of, or in the name of, EDS or its affiliates.
8.6 Confidentiality. MigraTEC acknowledges that in the course of performance of
its obligations pursuant to this Agreement, MigraTEC may obtain
confidential and/or proprietary information of EDS or its affiliates or
customers. "Confidential Information" includes: information relating to
development plans, costs, finances, marketing plans, equipment
configurations, data, access or security codes or procedures utilized or
acquired, business opportunities, names of customers, research, and
development; the terms, conditions and existence of this Agreement; the
pricing provisions included within or incorporated into this Agreement; any
information designated as confidential in writing or identified as
confidential at the time of disclosure if such disclosure is verbal or
visual; and any copies of the prior categories or excerpts included in
other materials created by the recipient party. MigraTEC hereby agrees that
all Confidential Information communicated to it by EDS, its affiliates, or
customers, whether before or after the Effective Date, shall be and was
received in strict confidence, shall be used only for purposes of this
Agreement, and shall not be disclosed by MigraTEC, its agents or employees
without the prior written consent of EDS. This provision shall not apply to
Confidential Information which is (i) already known by MigraTEC without an
obligation of confidentiality, (ii) publicly known or becomes publicly
known through no unauthorized act of MigraTEC, (iii) rightfully received
from a third party (other than an EDS customer or an EDS affiliate) without
obligation of confidentiality, (iv) disclosed without similar restrictions
by EDS to a third party (other than an EDS customer or an EDS affiliate),
(v) approved by EDS for disclosure, or (vi) required to be disclosed
pursuant to a requirement of a governmental agency or law so long as
MigraTEC provides EDS with timely prior written notice of such requirement.
Except with respect to Licensed Software, which shall be governed by the
Section of this Agreement titled "Non-Disclosure," information received by
EDS from MigraTEC shall only be considered proprietary and/or confidential
after a separate agreement in the form of Exhibit D, attached hereto, has
been executed by a duly authorized representative of each party for the
specific purpose of disclosing such information. The provisions of this
Section shall survive the term or termination of this Agreement for any
reason.
8.7 Media Releases. Except for any announcement intended solely for internal
distribution by MigraTEC or any disclosure required by legal, accounting,
or regulatory requirements beyond the reasonable control of MigraTEC, all
media releases, public announcements, or public disclosures (including, but
not limited to, promotional or marketing material) by MigraTEC or its
employees or agents relating to this Agreement or its subject matter, or
including the name, trade name, trade mark, or symbol of EDS or any
affiliate of EDS,
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shall be coordinated with and approved in writing by EDS prior to the
release thereof. MigraTEC shall not represent directly or indirectly that
any Licensed Software or Service provided by MigraTEC to EDS has been
approved or endorsed by EDS or include the name, trade name, trade mark, or
symbol of EDS or any affiliate of EDS on a list of MigraTEC's customers
without EDS' express written consent.
8.8 Dispute Resolution. In the event of any disagreement regarding performance
under or interpretation of this Agreement and prior to the commencement of
any formal proceedings, the parties shall continue performance as set forth
in this Agreement and shall attempt in good faith to reach a negotiated
resolution by designating a representative of appropriate authority to
resolve the dispute.
8.9 Electronic Communications. If MigraTEC and EDS mutually agree, business
communications between the parties, including, but not limited to, purchase
orders, invoices, and payment may be submitted electronically. In such
case, the parties shall mutually agree in writing upon supplemental terms
and conditions, including technical standards, for the electronic exchange
of such items.
8.10 Proposals and Special Projects. EDS may request a written proposal, quote,
or bid from MigraTEC for the provision of Licensed Software and/or Services
for a specific EDS project which may be governed by separately negotiated
terms and conditions. In such event, any Licensed Software and Services
obtained for such project shall be deemed for purposes of calculating
accumulated purchases and any discounts set forth in this Agreement, to
have been obtained pursuant to this Agreement.
8.11 Governmental Customers. This Agreement shall apply to the acquisition of
Licensed Software or Services for use in or in support of the performance
of, or resale under, a contract with a state, county, or local governmental
entity (a "Governmental Customer"). MigraTEC and EDS may negotiate in good
faith a supplemental agreement incorporating required flow-down provisions
or other provisions relating to, applicable to, or required by such
Governmental Customer or the proposed contract between EDS and such
Governmental Customer. All Licensed Software and Services obtained pursuant
to this Section shall be deemed for purposes of calculating accumulated
purchases and any discounts set forth in this Agreement, to have been
obtained pursuant to this Agreement, including purchases made by EDS in
support of the United States Federal Government under a separate contract
with MigraTEC.
8.12 International Business. This Agreement shall apply to the acquisition of
Licensed Software and Services for use in or in support of the performance
or remarketing of Licensed Software and Services in countries outside the
United States and its territories. MigraTEC and EDS and/or their respective
agents, distributors, or affiliates authorized to conduct business in such
countries may negotiate in good faith supplemental agreements incorporating
further terms and conditions required by local law. All Licensed Software
and Services obtained pursuant to this Section shall be deemed for purposes
of calculating accumulated purchases and any discounts set forth in this
Agreement, to have been obtained pursuant to this Agreement.
8.13 Compliance with Laws. In the performance of Services or the provision of
Licensed Software pursuant to this Agreement, MigraTEC shall comply with
the requirements of all applicable laws, ordinances, and regulations of the
United States or any state, country, or other governmental entity. In
particular, MigraTEC agrees to comply with the United States Export
Administration Act, Executive Order No. 11246, as amended by Executive
Order No.11375, the Vietnam Era Veterans Readjustment Assistance Act of
1974, the Rehabilitation Act of 1973, the Immigration Reform and Control
Act of 1986, and the Americans With Disabilities Act. This Section
incorporates by reference all provisions required by such laws, orders,
rules, regulations,
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and ordinances. MigraTEC shall indemnify, defend, and hold EDS harmless
from and against any and all claims, actions, or damages arising from or
caused by MigraTEC's failure to comply with the foregoing.
8.14 Labor. MigraTEC shall comply with any labor jurisdictions applicable to
MigraTEC's performance pursuant to this Agreement and shall cooperate with
EDS in resolving any disputes resulting from any jurisdictional or labor
claims or stoppages. Upon request by MigraTEC, EDS shall provide to
MigraTEC clarification and guidelines regarding relationships with labor
and MigraTEC's responsibilities with respect thereto.
8.15 Export. Neither party shall export any Licensed Software or information
protected hereunder by an obligation of confidentiality from the United
States, either directly or indirectly, without first obtaining a license or
clearance as required from the U.S. Department of Commerce or other agency
or department of the United States Government.
8.16 Notices. Wherever one party is required or permitted to give notice to the
other pursuant to this Agreement, such notice shall be deemed given when
delivered in hand, when mailed by registered or certified mail, return
receipt requested, postage prepaid, or when sent by a third party courier
service where receipt is verified by the receiving party's acknowledgment,
and addressed as follows:
In the case of EDS:
Electronic Data Systems Corporation
5400 Legacy Drive
Plano, Texas 75024
Attn: Manager, Contracts Administration
In the case of MigraTEC:
MIGRATEC, INC.
12801 Stemmons Frwy.
Suite 710
Dallas, TX 75234
Attn: Contracts Administrator
Either party may from time to time change its address for notification
purposes by giving the other party written notice of the new address and
the date upon which it will become effective; first class, postage prepaid,
mail shall be acceptable for provision of change of address notices.
8.17 Force Majeure. The term "Force Majeure" shall be defined to include fires
or other casualties or accidents, acts of God, severe weather conditions,
strikes or labor disputes, war or other violence, or any law, order,
proclamation, regulation, ordinance, demand, or requirement of any
governmental agency.
(a) A party whose performance is prevented, restricted, or interfered with
by reason of a Force Majeure condition shall be excused from such
performance to the extent of such Force Majeure condition so long as
such party provides the other party with prompt written notice
describing the Force Majeure condition and takes all reasonable steps
to avoid or remove such causes of nonperformance and immediately
continues performance whenever and to the extent such causes are
removed.
(b) If, due to a Force Majeure condition, the scheduled time of delivery
or performance is or will be delayed for more than thirty (30) days
after the scheduled date, the party not relying upon the Force Majeure
condition may terminate, without liability to the other party, the
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Purchase Order or any portion thereof covering the delayed Products or
Services.
(c) If a Force Majeure condition or other delay by MigraTEC causes EDS to
terminate its business relationship with a third party for whom
delayed Products were ordered and EDS has no alternative use for the
Products after using reasonable efforts to relocate or otherwise
utilize the Products, then EDS may terminate the applicable Purchase
Order and MigraTEC shall refund to EDS all amounts paid thereunder.
8.18 Severability. If, but only to the extent that, any provision of this
Agreement is declared or found to be illegal, unenforceable, or void, then
both parties shall be relieved of all obligations arising under such
provision, it being the intent and agreement of the parties that this
Agreement shall be deemed amended by modifying such provision to the extent
necessary to make it legal and enforceable while preserving its intent. If
that is not possible, another provision that is legal and enforceable and
achieves the same objective shall be substituted. If the remainder of this
Agreement is not affected by such declaration or finding and is capable of
substantial performance, then the remainder shall be enforced to the extent
permitted by law.
8.19 Waiver. Any waiver of this Agreement or of any covenant, condition, or
agreement to be performed by a party under this Agreement shall (i) only be
valid if the waiver is in writing and signed by an authorized
representative of the party against which such waiver is sought to be
enforced, and (ii) apply only to the specific covenant, condition or
agreement to be performed, the specific instance or specific breach thereof
and not to any other instance or breach thereof or subsequent instance or
breach.
8.20 Remedies. All remedies set forth in this Agreement, or available by law or
equity shall be cumulative and not alternative, and may be enforced
concurrently or from time to time.
8.21 Survival of Terms. Termination or expiration of this Agreement for any
reason shall not release either party from any liabilities or obligations
set forth in this Agreement which (i) the parties have expressly agreed
shall survive any such termination or expiration, or (ii) remain to be
performed or by their nature would be intended to be applicable following
any such termination or expiration.
8.22 Nonexclusive Market and Purchase Rights. It is expressly understood and
agreed that this Agreement does not grant to MigraTEC an exclusive right to
provide to EDS any or all of the Licensed Software and Services and shall
not prevent EDS from developing or acquiring from other suppliers computer
software programs or services similar to the Licensed Software and
Services. MigraTEC agrees that acquisitions by EDS pursuant to this
Agreement shall neither restrict the right of EDS to cease acquiring nor
require EDS to continue any level of such acquisitions. Estimates or
forecasts furnished by EDS to MigraTEC prior to or during the term of this
Agreement shall not constitute commitments.
8.23 GOVERNING LAW. THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS
AGREEMENT SHALL NOT BE GOVERNED BY THE PROVISIONS OF THE 1980 UNITED
NATIONS CONVENTION ON CONTRACTS FOR THE INTERNATIONAL SALE OF GOODS. RATHER
THESE RIGHTS AND OBLIGATIONS SHALL BE GOVERNED BY THE LAWS, OTHER THAN
CHOICE OF LAW RULES, OF THE STATE OF TEXAS.
8.24 Entire Agreement. This Agreement constitutes the entire and exclusive
statement of the agreement between the parties with respect to its subject
matter and there are no oral or written representations, understandings or
agreements relating to this Agreement which are not fully expressed in the
Agreement. This Agreement shall not be amended except by a written
agreement signed by both parties. All exhibits, documents, and schedules
25
<PAGE> 30
referenced in this Agreement or attached to this Agreement, and each
Purchase Order are an integral part of this Agreement. In the event of any
conflict between the terms and conditions of this Agreement and any such
exhibits, documents, or schedules, the terms of this Agreement shall be
controlling unless otherwise stated or agreed. In the event of a conflict
between the terms and conditions of this Agreement and a Purchase Order
issued in accordance with Article II, the Purchase Order shall be
controlling with respect to those transactions covered by that Purchase
Order. Any other terms or conditions included in any shrink-wrap license
agreements, quotes, invoices, acknowledgments, bills of lading, or other
forms utilized or exchanged by the parties shall not be incorporated in
this Agreement or be binding upon the parties unless the parties expressly
agree in writing or unless otherwise provided for in this Agreement.
IN WITNESS WHEREOF, MIGRATEC and EDS acknowledge that each of the
provisions of this Agreement were expressly agreed to and have each caused this
Agreement to be signed and delivered by its duly authorized officer or
representative as of the Effective Date.
ELECTRONIC DATA SYSTEMS CORPORATION MIGRATEC, INC.
By: /s/ JOE B. DORFMEISTER By: /s/ CURTIS OVERSTREET
---------------------------------- --------------------------------
Printed Name: JOE B. DORFMEISTER Printed Name: CURTIS OVERSTREET
------------------------ ----------------------
Title: CONTRACT MANAGER Title: PRESIDENT
------------------------------- -----------------------------
Date: 9/15/98 Date: 9-16-98
-------------------------------- ------------------------------
Fed. Tax ID #: 65-0125664
26
<PAGE> 31
EXHIBIT A
EDS BUSINESS PRACTICES
EDS' suppliers have played a key role in our continuous growth and success.
We sincerely appreciate your support. In order to avoid any conflict of interest
between our suppliers and EDS employees and to keep business relationships on a
professional basis, EDS has established and briefed its employees on the
following business practices. Please review these business practices carefully
and give a copy of this Exhibit to any of your associates who have a need to
know.
1. EDS expects its suppliers to provide a quality product or service for which
they will be fairly paid.
2. In selecting suppliers, EDS will test the market to assure quality of
service and fairness of price.
3. No EDS employee is to ask for anything of value from a supplier. Gifts from
a supplier such as tickets to athletic events, concerts or the theater,
personal travel, or any type of personal item are discouraged by our
business practices.
4. If any EDS employee is offered or accepts an item of value from a supplier,
the employee is to report it to the appropriate EDS management.
5. If any EDS employee engages in any type of unethical behavior such as
requesting anything of value from a supplier, the supplier is requested to
report the incident to the Director of Purchasing or the General Counsel of
EDS.
6. Occasional meals during visits to a supplier's facilities or a customer's
location during which a supplier incurs normal and reasonable marketing
expenses are acceptable. The EDS employee is required to report such meal
expenses to their management.
EDS appreciates your cooperation in complying with these business
practices.
A-1
<PAGE> 32
EXHIBIT B
CHARGES, PRICES, AND FEES
A. Purchase Order for Licensed Software
Upon issuance of a Purchase Order for Licensed Software by EDS to MigraTEC
in the amount of zero dollars ($0.00), EDS will receive:
(a) A Corporate Software License for the Licensed Software (and any
associated third party software); and
(b) Support Services, as set forth in Section 4.8 of this Agreement are at
no charge.
B. LOSC Charges for Processed Code
The software Charge per LOSC will be based upon the aggregate number of
LOSC processed by EDS and shall be:
<TABLE>
<S> <C>
a) Initial LOSC Charge - For the first six (6) months from the Effective
Date the LOSC Charge is (i.e., through February 28, 1999 or $0.05/LOSC
the completion of the effected billing period, whichever is later.)
b) From the expiration of the initial price ((a) above) through December
31, 1999 the LOSC Charge is $0.075/LOSC
c) Thereafter LOSC Charges can escalate as provided in the Section of amount to
this Agreement titled Modifications to Charges be determined
</TABLE>
EDS will use the LOSC definition contained in this Agreement to calculate
the LOSC processed. This will be done independent of the line counter
contained in the Licensed Software. The Licensed Software counter's purpose
is to limit the useful life of the software.
C. Services
All service rates assume services will be performed in the continental
United States. The Charges for any services required by EDS to be provided
outside the continental United States will be mutually agreed upon by the
parties.
(a) Training Services
Description - MigraTEC will provide on-site training in the use of
MigraTEC2000. This training will include an overview and detailed walk
through of the Product. This will be followed by a tutorial exercise,
with the participants utilizing the Product on a sample set of source
code provided by MigraTEC. Training sessions will follow the
guidelines established in Exhibit E, Training Services.
Cost - MigraTEC will provide a total of three training sessions (as
described above) at an EDS' facility at no charge to EDS except travel
expenses in accordance with EDS' guidelines for its own employees.
Additional training services can be obtained from MigraTEC at $1,500
per day for the instructor plus travel expenses (in accordance with
EDS' guidelines for its own employees).
B-1
<PAGE> 33
Any training customization can be obtained at a rate of $125 per hour
plus travel expenses (in accordance with EDS' guidelines for its own
employees).
(b) Product Support:
Description- MigraTEC will provide on-site consulting services, based
upon specific requirements and scheduling constraints at any point in
time. MigraTEC consultants include project managers, technical team
leaders, data base administrators for all supported databases,
programming consultants in all languages we support, etc.
Cost- MigraTEC consulting services are charged at $125 per hour plus
expenses (in accordance with EDS' guidelines for its own employees).
(c) Development:
Description- MigraTEC will develop capabilities and enhancements,
based upon the request of EDS and the joint definition of project
scope.
Cost- MigraTEC personnel costs for the development of additional
Licensed Software capabilities will be charged at a 25% discount from
the then current per-hour rates published by MigraTEC.
(d) Installation Services:
Description- MigraTEC will install their Products at EDS' request.
Cost- The cost of such installation will be based upon a rate of $125
per hour plus expenses (in accordance with EDS' guidelines for its own
employees).
(e) MigraTEC Factory Services
Description- MigraTEC will provide conversion Services for certain
types of source code sent to it by EDS.
<TABLE>
<S> <C>
Cost-
C and C++ $0.35/ LOSC
Other languages as agreed to by MigraTEC in
writing prior to a purchase order being issues $0.40/ LOSC
</TABLE>
D. Other MigraTEC Products
For Products other than those based upon a LOSC Charge, EDS shall be
entitled to acquire a software license from MigraTEC at a minimum of a
thirty percent (30%) discount off of MigraTEC's then current published
price list or as agreed upon by the parties.
B-2
<PAGE> 34
EXHIBIT C
THIRD PARTY SYSTEM ACCESS AGREEMENT
AMONG
{CUSTOMER},
MIGRATEC, INC.
AND
ELECTRONIC DATA SYSTEMS CORPORATION
THIS Third Party System Access Agreement (the "Access Agreement") effective
as of {Effective Date}, is by and among CUSTOMER LEGAL NAME ("Customer"),
MIGRATEC, INC. ("MigraTEC") and ELECTRONIC DATA SYSTEMS CORPORATION ("EDS").
W I T N E S S E T H:
WHEREAS, MigraTEC owns certain software products (hereinafter referred to
as "Software") more specifically described in the {"MigraTEC/Customer Agreement
Name}, dated {MigraTEC/Customer Agreement Date}, between Customer and MigraTEC
(the "License Agreement"); and
WHEREAS, MigraTEC and EDS have entered into a {EDS/MigraTEC Agreement
Name}, dated {EDS/MigraTEC Agreement Date}, pursuant to which EDS may obtain
certain software products and services from MigraTEC (the "Master Agreement");
WHEREAS, Customer and EDS have entered into an information technology
services agreement (the "ITS Agreement") pursuant to which EDS will provide data
processing and other services ("Services") requiring that EDS have access to the
Software; and
WHEREAS, the parties desire that EDS undertake appropriate contractual
commitments to assure that the Software will be used only in accordance with and
subject to the terms and conditions of the Master Agreement and this Access
Agreement;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, Customer, MigraTEC and EDS hereby
agree as follows:
1. MigraTEC hereby grants EDS the right to use, execute, store and display
(collectively "Access") the Software set forth in Attachment 1 to this
Access Agreement for the purpose of performing its obligations pursuant to
the ITS Agreement. The parties agree that payment amounts will be governed
by the existing license between MigraTEC and customer; however, EDS' Access
of such Software, and MigraTEC's support and maintenance obligations with
respect to the Software, shall be governed by the terms and conditions of
the Master Agreement; provided, however, EDS may Access the Software for
the sole and exclusive purpose of providing Services on behalf of Customer.
2. Customer shall be entitled to all protections under the Master Agreement,
including, but not limited to, proprietary rights indemnification as
defined in the Master Agreement.
3. The parties agree that EDS shall be Customer's agent for payment of any
fees due to MigraTEC under the Master Agreement from the date of this
Access Agreement until MigraTEC is notified otherwise. In the event of a
conflict between this Access Agreement and the License Agreement, this
Access Agreement will prevail.
C-1
<PAGE> 35
4. This Access Agreement shall commence as of the date first set forth above
and shall continue in effect until the earlier of (i) the termination of
the ITS Agreement, (ii) MigraTEC's receipt of written notice from EDS that
EDS' need to Access the Software has ceased, or (iii) the termination of
the License Agreement. Upon termination of this Access Agreement, EDS shall
discontinue all use of the Software and; provided that the License
Agreement has not terminated, Customer's continued use of and MigraTEC's
support and maintenance obligations with respect to the Software shall be
governed by the terms and conditions of the License Agreement. At such
time, EDS shall have no further liability or responsibility with respect to
such Software.
IN WITNESS WHEREOF, the parties have caused this Access Agreement to be
executed as of the dates indicated.
MIGRATEC, INC. {CUSTOMER}
By: By:
------------------------------------ --------------------------------
Printed Name: Printed Name:
------------------------- ----------------------
Title: Title:
-------------------------------- -----------------------------
Date: Date:
--------------------------------- ------------------------------
ELECTRONIC DATA SYSTEMS CORPORATION
By:
------------------------------------
Printed Name:
-------------------------
Title:
--------------------------------
Date:
---------------------------------
C-2
<PAGE> 36
ATTACHMENT 1
SOFTWARE
This Attachment 1 shall automatically be deemed to include any and all
software products obtained by Customer from MigraTEC after the effective date of
the ITS Agreement.
C-3
<PAGE> 37
EXHIBIT D
NON-DISCLOSURE AGREEMENT
THIS NON-DISCLOSURE AGREEMENT, dated |D|, is between ELECTRONIC DATA
SYSTEMS CORPORATION ("EDS") and MIGRATEC, INC. ("MigraTEC").
W I T N E S S E T H:
WHEREAS, MigraTEC may provide information to EDS in connection with the
business purposes described in Schedule A, attached hereto, (the "Business
Purpose") and MigraTEC desires EDS to keep certain of such information
confidential; and
WHEREAS, in consideration of the disclosure of such information to EDS, EDS
is willing to keep such information confidential in accordance with the terms
and conditions set forth in this Non-Disclosure Agreement;
NOW, THEREFORE, EDS and MigraTEC hereby agree as follows:
1. Information. As used herein, "Information" shall mean both (i) written
information received by EDS from MigraTEC which is marked or identified as
confidential, and (ii) oral or visual information identified as
confidential at the time of disclosure which is summarized in writing and
provided to EDS by MigraTEC in such written form promptly after such oral
or visual disclosure.
2. Confidentiality. EDS may use Information received under this Non-Disclosure
Agreement, and may provide such Information to its affiliates and their
respective employees for their use, only in connection with the Business
Purpose. EDS agrees that, for a period of one (1) year from receipt of
Information, EDS will treat the Information with the same degree of care
and confidentiality which EDS provides for similar information belonging to
EDS which EDS does not wish disclosed to the public, but not less than
reasonable care. The foregoing shall not prevent EDS from disclosing
Information which is (i) already known by EDS without an obligation of
confidentiality, (ii) publicly known or becomes publicly known through no
unauthorized act of EDS, (iii) rightfully received from a third party
without obligation of confidentiality, (iv) independently developed by EDS
without use of the Information, (v) disclosed without similar restrictions
by MigraTEC to a third party, (vi) approved by MigraTEC for disclosure, or
(vii) required to be disclosed pursuant to a requirement of a governmental
agency or law so long as EDS provides MigraTEC with timely prior written
notice of such requirement.
3. Return of Information. Upon completion of the Business Purpose and upon the
written request of MigraTEC, EDS shall return all copies of the Information
to MigraTEC or certify in writing that all copies of the Information have
been destroyed. EDS may return the Information, or any part thereof, to
MigraTEC at any time.
4. Disclaimer of Warranty and Limitation of Liability. MigraTEC makes no
warranty, express or implied, with respect to the Information. Neither
party shall be liable to the other hereunder for amounts representing loss
of profits, loss of business, or indirect, consequential, exemplary, or
punitive damages of the other party in connection with the provision or use
of the Information hereunder.
5. No Further Rights. Nothing contained in this Non-Disclosure Agreement shall
be construed as granting or conferring any rights by license or otherwise
in the Information except as provided hereunder.
D-1
<PAGE> 38
6. No Commitment. The parties expressly agree that the provision of
Information under this Non-Disclosure Agreement and discussions held in
connection with the Business Purpose shall not prevent EDS from pursuing
similar discussions with third parties or obligate EDS to continue
discussions with MigraTEC or to take, continue or forego any action
relating to the Business Purpose. Any estimates or forecasts provided by
EDS to MigraTEC shall not constitute commitments.
7. Media Releases. All media releases and public announcements or disclosures
by MigraTEC relating to this Non-Disclosure Agreement, its subject matter
or the Business Purpose shall be coordinated with and approved by EDS in
writing prior to the release thereof.
8. Miscellaneous. Any notices required by this Non-Disclosure Agreement shall
be given in hand or sent by first class mail to the applicable address set
forth in Schedule A. The parties agree that this Non-Disclosure Agreement
and any attachments hereto (i) are the complete and exclusive statement
between the parties with respect to the protection of the confidentiality
of the Information, (ii) supersede all related discussions and other
communications between the parties, (iii) may only be modified in writing
by authorized representatives of the parties, and (iv) SHALL BE GOVERNED BY
THE LAWS, OTHER THAN CHOICE OF LAW RULES, OF THE STATE OF TEXAS.
IN WITNESS WHEREOF, EDS and MigraTEC have each caused this Non-Disclosure
Agreement to be signed and delivered by its duly authorized officer or
representative, all as of the date first set forth above.
ELECTRONIC DATA SYSTEMS CORPORATION MIGRATEC, INC.
By: By:
------------------------------------ --------------------------------
Printed Name: Printed Name:
------------------------- ----------------------
Title: Title:
-------------------------------- -----------------------------
Date: Date:
--------------------------------- ------------------------------
D-2
<PAGE> 39
SCHEDULE A
BUSINESS PURPOSE AND NOTICES
Business Purpose:
[ ]
Addresses for Notices:
EDS:
Electronic Data Systems Corporation
5400 Legacy Drive
Plano, Texas 75024
Attention: Manager, Contracts Administration
MigraTEC:
MIGRATEC, INC.
12801 Stemmons Frwy.
Suite 710
Dallas, TX 75234
Attention: Contracts Administrator
D-3
<PAGE> 40
EXHIBIT E
TRAINING SERVICES
1. Certain Definitions. The following definitions apply to this Exhibit:
(a) "EDS Students" means employees of EDS and employees of EDS' customers
or suppliers who receive Training Services and participate as
students.
(b) "Training Services" includes, but is not limited to, student and
instructor training, and time and material services provided or to be
provided by MigraTEC pursuant to the Agreement and this Exhibit.
(c) "Location" means the place where Training Services are performed or
are to be performed and/or where Documentation for Training Services
is to be delivered.
2. Supplemental MigraTEC Obligations. MigraTEC will provide to EDS the
Training Services specified in each Purchase Order in accordance with the
terms and conditions set forth in this Agreement and this Exhibit and will:
(a) Designate an individual who will be EDS' contact person at MigraTEC
during the term of this Agreement and who shall have the authority and
power to make management decisions relating to Training Services on
behalf of MigraTEC. Such individual shall provide, at the request of
EDS and within a reasonable period of time, any requested management
decisions. MigraTEC may change the contact person upon notice to EDS.
(b) Provide sufficient Documentation for each EDS Student at no charge to
EDS. EDS Students may retain all such Documentation after completion
of the Training Services to which such Documentation applies.
(c) Provide necessary education aids, such as references, films,
overheads, or other similar instructional aids for use with Training
Services.
(d) If Training Services are to occur at an EDS Location, request in
writing in advance, any education or audiovisual materials or
equipment which should be present at the EDS Location for use in
teaching. Such materials or equipment may include, but shall not be
limited to, overhead projectors, film projectors, flip charts, boards
and markers, personal computers for EDS Students' use, etc. ("Training
Aids").
(e) For Training Services which occur at an EDS Location, allow for the
substitution or cancellation of EDS Students at no additional charge.
(f) Provide to EDS, within thirty (30) days of the end of each calendar
quarter, a written report for the previous quarter indicating the
Location, the dates, the aggregated Charges paid by EDS, and the
number of EDS Students in attendance for all Training Services
provided by MigraTEC during the previous quarter.
(g) Provide sufficient Employees for each Training Service offering to
maintain a maximum student-to-instructor ratio of eight (8) students
to one (1) instructor, unless otherwise agreed.
3. Supplemental EDS Obligations. EDS will, at its own cost and expense,
provide classroom facilities and reasonable and necessary Training Aids,
based on availability and discretion, for classes at an EDS Location.
4. Open and Closed Training Services. A Purchase Order shall indicate if a
course is "open," which means that EDS Students and other commercial
E-1
<PAGE> 41
students may attend the course, or "closed," which means the course is
only available to EDS Students. Public classes at MigraTEC's Location shall
always be considered open.
5. Charges. Where EDS is paying for Training Services on a flat fee per class
basis, EDS shall not be required to pay any additional sums in the event of
student substitution or the student fails to attend the class without
notice. Where EDS is paying for the Training Services on a flat fee per
student basis, EDS shall be required to pay only for those EDS Students
actually in attendance.
E-2
<PAGE> 42
EXHIBIT F
DEVELOPMENT SERVICES
1. Developed Software. "Developed Software" means computer software programs,
including Development Documents (as later defined in this Agreement),
developed or to be developed by MigraTEC and/or Employees pursuant to this
Agreement. The parties agree that the definition of Work Product(s) shall
be modified to include Developed Software.
2. Provision of Development Services. MigraTEC shall perform development
Services to the extent agreed upon by the parties for a particular EDS
project (the "Project"). With respect to each Project, the parties shall
agree in writing upon supplemental terms and conditions applicable to the
performance of the Project including, for example and without limitation,
(i) a price and milestone payment schedule, (ii) a Project performance
schedule, including the appropriate work steps and phases, (iii) Applicable
Specifications, (iv) functional and detailed design specifications, and (v)
a schedule of those items or tasks to be performed by MigraTEC which must
be approved by EDS or performed to the satisfaction of EDS
("Deliverables"). The terms and conditions established for a Project shall
be incorporated in this Agreement, and may be amended upon the mutual
written agreement of the Project Managers (as later defined in this
Agreement). The Section of this Agreement titled "Time and Materials
Services" shall also apply to the Project if the development Services are
performed on a time and materials basis.
3. Project Management. For each Project, MigraTEC and EDS shall each designate
a project manager (the "Project Managers") who shall have the
responsibilities set forth in this Exhibit and as otherwise agreed upon by
the parties. Each Project Manager shall be responsible for providing timely
management decisions as required or requested relating to the Project. From
time to time at the request of the EDS Project Manager, the MigraTEC
Project Manager shall provide to the EDS Project Manager a written report
of the status of the Project.
4. Approval of Deliverables. The supplemental Project terms and conditions
shall establish time frames for the acceptance process of Deliverables; any
reference to dates or time periods in this Section shall mean the dates
mutually agreed upon by the parties in, or determined in accordance with,
such terms and conditions. The MigraTEC Project Manager shall submit each
Deliverable to the EDS Project Manager on or before the specified delivery
date. Within the established time frame, EDS shall approve or disapprove
the Deliverable by providing written notice to MigraTEC. EDS shall describe
in any disapproval the ways in which the Deliverable fails to conform to
the established requirements and/or the Applicable Specifications for the
Project or portion thereof; EDS may also suggest corrections or
improvements which may cause the Deliverable to meet such standard.
MigraTEC shall resubmit the Deliverable to EDS for approval as provided in
this Section, within the established cure period. EDS may extend the period
of time for resubmission of the Deliverable if MigraTEC submits a written
request outlining the specific reasons why MigraTEC cannot comply with the
requirements together with MigraTEC's proposed alternative schedule for
resubmission of the Deliverable. MigraTEC may submit draft versions of a
Deliverable prior to the required date for the informal comment of the EDS
Project Manager. EDS' approval of a Deliverable only indicates that EDS has
reviewed the Deliverable and detected no errors or omissions sufficient
enough to warrant the withholding or denial of payment, if any, for such
Deliverable. EDS' approval of a Deliverable does not discharge MigraTEC's
obligation to provide a completed Developed Software that as a whole
conforms to the Applicable Specifications.
5. Acceptance Testing Procedures. In connection with each Project, the parties
shall mutually agree upon appropriate acceptance testing criteria and
F-1
<PAGE> 43
procedures for the Developed Software. The applicable acceptance testing
criteria and procedures must be successfully satisfied and performed prior
to EDS' acceptance of the Developed Software. If any defects or
deficiencies are discovered during acceptance testing, EDS shall so notify
MigraTEC, and MigraTEC shall have thirty (30) days from receipt of such
notice to correct the deficiencies. If necessary, MigraTEC and EDS may
mutually agree upon an additional time period in order to continue
acceptance testing of the corrected Developed Software. For purposes of an
item of Developed Software, the term "Acceptance Date" shall mean the date
when the Developed Software successfully satisfies the applicable
acceptance testing criteria. Acceptance of an item of Developed Software
does not waive any warranty rights provided in this Agreement for Developed
Software.
6. Change Orders. By providing written notice to the MigraTEC Project Manager,
EDS may request MigraTEC to perform additional work or changes within the
general scope of the Project and MigraTEC agrees to perform such work or
changes. If a change causes an increase or decrease in the price or time
required for performance as mutually determined by the Project Managers, a
negotiated adjustment shall be made in the Project price and/or performance
schedule. Changes outside the general scope of the Project shall be
governed by the following Section.
7. Additional Work. By providing written notice to the MigraTEC Project
Manager, EDS may request MigraTEC to perform additional Services outside
the general scope of a Project. At its option, MigraTEC may submit, at no
charge to EDS, a written proposal for such Services including a price/cost
proposal, expenses related to travel, lodging and meals, a delivery
schedule, and any other information reasonably related to such request.
Within a reasonable time period requested by MigraTEC, EDS shall accept or
reject such proposal. If MigraTEC chooses not to provide a proposal in
response to EDS' request, MigraTEC shall promptly notify EDS.
8. Ownership of Developed Software. EDS shall have Ownership Rights in and to
all Developed Software, whether completed or partially completed, and all
documents developed or exchanged during or in support of a Project, whether
completed or partially completed (the "Development Documents") as set forth
in the Section titled "Ownership of Intellectual Property Rights" elsewhere
in this Agreement. To the extent that Existing Materials are required in
order to use the Developed Software as contemplated in this Agreement,
MigraTEC shall grant to EDS, its subsidiaries and affiliates rights as set
forth in the Section titled "Use of Existing Materials" elsewhere in this
Agreement.
9. Remedies for Failure to Perform. If MigraTEC defaults in the performance of
a Project EDS may, in its sole discretion, elect to (i) terminate the
Project, return to MigraTEC all Development Documents and receive a refund
from MigraTEC of all amounts paid to MigraTEC with respect to the Project,
(ii) enter into a joint development effort with MigraTEC to complete the
Project at no additional charge to EDS, (iii) extend the time for MigraTEC
performance at no additional charge to EDS, (iv) continue development
itself or in connection with a third party, and/or (v) terminate the
Project. The foregoing remedies do not constitute exclusive remedies. In
the event EDS elects to continue development efforts itself, or to continue
development efforts with the involvement of a third party, MigraTEC shall
provide to EDS all MigraTEC proprietary or other information reasonably
required to complete such development. EDS agrees that any third parties
pursuing such development with EDS shall agree to comply with
non-disclosure and confidentiality provisions to protect MigraTEC's
information. EDS may use the information as necessary in order to complete
the Project.
10. Rights Upon Project Completion. Upon completion or termination of a Project
for any reason, MigraTEC shall provide to EDS all copies of all Developed
Software and Development Documents, whether completed or partially
completed, (except if EDS elects (i) in the previous Section) and shall
F-2
<PAGE> 44
return to EDS any and all copies of all information provided by EDS to
MigraTEC in connection with the Project. EDS shall be entitled to obtain
maintenance and support Services for Developed Software under the Sections
governing support of Licensed Software.
F-3
<PAGE> 1
CONSENT FOR INDEPENDENT CERTIFIED PUBLIC ACCOUNTS
We consent to the use in the Post-Effective Amendment No. 1 to Form SB-2,
Registration Statement under the Securities Act of 1933, of MigraTEC, Inc. and
Subsidiary, of our report dated April 1, 1998, on the financial statements of
MigraTEC, Inc. and Subsidiary as of December 31, 1997 and 1996, accompanying
the financial statements contained in Form SB-2, and to the use of our name and
the statements with respect to us as appearing under the heading "Experts" in
Form SB-2.
KING GRIFFIN & ADAMSON P.C.
Dallas, Texas
May 7, 1999
