EXHIBIT 10.17
CONSULTING AND DEVELOPMENT
AGREEMENT
1. Agreement
This is an agreement, effective 10/27/98, between AltiGen Communications, Inc.
("ALTIGEN") and Sollecon, Inc., a Delaware Corporation ("SOLLECON"), both
referred in this Agreement as the "PARTIES".
2. Background
SOLLECON is in the business of designing and creating computer software,
providing consulting services in this particular area and custom software
development for the clients. ALTIGEN desires to retain the services of SOLLECON
to advise and consult for the design and development of software in accordance
with the specifications set forth in Exhibit A - Software Development
Specifications (the "SPECIFICATIONS"). SOLLECON is willing to render such
services and the parties agree as follows:
3. The Project
SOLLECON agrees to perform for ALTIGEN services and make all reasonable efforts
to design and develop computer software in accordance with the SPECIFICATIONS
(the "PROJECT").
4. Rate of Payment
ALTIGEN agrees to pay SOLLECON for services in accordance with the SOLLECON's
standard hourly rates as specified in the Exhibit B - Rate of Pay (the "RATES")
plus all charges for travel and materials purchased specifically for the
PROJECT, including all sales and use taxes on equipment and services provided by
SOLLECON.
5. Invoicing
All work is to be done on an accrued charge basis. SOLLECON will invoice ALTIGEN
bi-weekly for all accrued charges, and those invoices shall be payable within
fifteen (15) days after the invoice date. Invoices shall include the hours
worked, the hourly rate, and a brief description of the services rendered and
work done. A late payment charge of two percent (2%) per month shall apply to
all overdue invoices. SOLLECON shall be under no obligation to continue work
when the account is overdue.
6. Independent Contractor Status
SOLLECON is an independent contractor and developer, so neither SOLLECON nor
SOLLECON's staff is, or shall be deemed to be employed by ALTIGEN. Both PARTIES
agree that working relations should be organized in a way to be fully qualified
as of Independent Contractor and Developer with relation to the Section 1706 of
1986 Tax Reform Act as amended and according to the Part IV of the IRS SERVICE
MANUAL dated 5/6/86.
7. Traveling
For travel necessary in connection with the PROJECT outside the Bay Area, a
special hourly rate will be applied, calculated as half (1/2) of the normal
RATES for every hour spent outside the Bay Area plus the normal hourly RATES for
the actual time used for the PROJECT. Prior written consent by both PARTIES
shall be required for all travel outside the Continental United States.
8. Work Terms
The Project shall be done by the personnel selected by SOLLECON and approved in
advance by ALTIGEN. All such personnel, if any, shall be directly supervised by
SOLLECON, which reserves the right to determine the method, manner and means by
which the PROJECT is done, including the choice of place, equipment, available
time allocation, subject to ALTIGEN's normal business hours and security
requirements. SOLLECON shall not be required to devote its full time and/or
staff to the PROJECT and it is acknowledged that SOLLECON has other clients and
offers services and products to the general public. Except to the extent that
work on the PROJECT must be performed on or with the ALTIGEN's current computers
or software, all materials used shall be provided by SOLLECON.
9. Additional Work
After receipt of a work order which adds to the PROJECT, SOLLECON may, at its
discretion, take reasonable action and expend reasonable amounts of time and
money, or bring additional staff, subject to provisions of Section 8 of this
Agreement, based on such order. ALTIGEN agrees to pay SOLLECON for such action
and expenditure using normal RATES.
10. Employees
Both PARTIES hereto agree that, while performing services and providing
development under this Agreement, and for a period of six (6) months following
the termination of this Agreement, neither PARTY will solicit or offer
employment to the other PARTY's employees or staff engaged in any efforts under
this Agreement, except with the other PARTY's prior written approval.
11. Use of Work Product
Except as specifically set forth in writing and signed by both PARTIES, SOLLECON
shall have all copyright and patent rights with respect to all materials
developed under this Agreement, and ALTIGEN is hereby granted a Non-exclusive
license to use and employ such materials within the ALTIGEN's business. Such
grant of the license shall occur only after the full payment, as set forth in
Section 5, is received by SOLLECON.
12. Termination by ALTIGEN
The PROJECT shall be carried out in phases and according to a timetable as set
forth in the SPECIFICATIONS. ALTIGEN shall have the right, by written notice, to
terminate the PROJECT at the end of any phase. If ALTIGEN terminates at any
other time, SOLLECON will make reasonable efforts to reassign scheduled labor to
other projects, but to extent that SOLLECON is unable to do so, ALTIGEN shall be
responsible for scheduled labor charges until such reassignment can be made, but
in no event for a period longer than fifteen (15) days from the day of the
notice of termination. Upon termination, ALTIGEN agrees to pay SOLLECON for all
accrued PROJECT charges including any non-cancelable commitments for equipment,
services, materials and travel.
13. Termination by SOLLECON
SOLLECON shall have the right, by written notice, to terminate the PROJECT if
the ALTIGEN's account is overdue as set forth in Section 5 of this Agreement.
Upon completion of work authorized under any work order for one or more phases,
ALTIGEN shall have thirty (30) days to authorize the next subsequent phase or
phases. If no such authorization is received by SOLLECON within such thirty (30)
day period, the PROJECT shall be deemed to be terminated. If within any thirty
(30) day period the amount of billable time accrued is less than twenty (20)
hours, the SOLLECON shall have the right to terminate the PROJECT by written
notice, provided, in the event ALTIGEN shall within such thirty (30) day period
place sufficient work orders with SOLLECON to bring the total for the previous
and next thirty (30) days to the minimum amounts set forth above, such notice
shall be of no effect.
14. Conflict of Interest
SOLLECON warrants that it is under no obligation to any other entity whereby
conflicts of interest are or may be created by entering into this Agreement.
SOLLECON agrees that it will not, during the term of this Agreement and six (6)
months following the termination of this Agreement, perform services or develop
products for direct competitors of ALTIGEN listed in the Exhibit C - Direct
Competitors.
15. Proprietary Information
In the event either PARTY discloses information, of any sort whatever, to the
other that it considers to be secret or proprietary ("PROPRIETARY INFORMATION"),
the receiving PARTY agrees to make reasonable efforts, for a period of one (1)
year after the completion of all work under this Agreement, to maintain the
PROPRIETARY INFORMATION in confidence and to treat the PROPRIETARY INFORMATION
with at least the same degree of care and safeguards that it takes with its own
proprietary information. PROPRIETARY INFORMATION shall be used by the receiving
PARTY only in connection with this Agreement and shall be disclosed only to
employees as reasonably necessary for the performance under this Agreement.
PROPRIETARY INFORMATION shall be limited to information disclosed in writing and
suitably marked as "Confidential" or "Proprietary", or if disclosed orally,
reduced to writing and delivered, appropriately marked, to the receiving PARTY
within twenty (20) days. PROPRIETARY INFORMATION shall not be deemed to include
any information that:
(a) is in or becomes in the public domain without violation of this Agreement by
the receiving PARTY; or
(b) is already in the possession of the receiving PARTY, as evidenced by written
documents, prior to the disclosure thereof by the other PARTY; or
(c) is rightfully received from a third entity having no obligation to the
disclosing PARTY and without violation of this Agreement by the receiving PARTY.
The provisions of this Section 15 shall survive any termination of this
Agreement.
16. Disputes
All claims and disputes that arise between the PARTIES in connection with this
Agreement, which have not been resolved by good faith negotiations between the
PARTIES, shall be submitted to binding arbitration by the American Arbitration
Association, to be determined and resolved by said Association under its rules
and procedures then in effect, and the PARTIES agree to share equally the costs
of said arbitration. The arbitrators shall have no power to modify any of the
terms of this Agreement or attached exhibits. Any award rendered in such
arbitration may be enforced by either PARTY in either the courts of State of
California or in a United States District Court of the same State, to whose
jurisdiction each PARTY irrevocably agrees to submit.
LIMITED WARRANTY
17. Warranties and Liability
SOLLECON warrants to ALTIGEN that the material, data, programs and services to
be delivered or rendered hereunder, will be of the kind and quality designated
and made according to SPECIFICATIONS and will be performed by qualified
personnel. SOLLECON makes no other warranties, whether written, oral or implied,
including without limitation warranty of fitness for purpose of merchantability.
In no event shall SOLLECON be liable for special or consequential damages,
either in contract or tort, whether or not the possibility of such damages has
been disclosed to SOLLECON in advance or could have been reasonably foreseen by
SOLLECON, and in the event this limitation of damages is held unenforceable then
the Parties
agree that by reason of the difficulty foreseeing possible damages all liability
to ALTIGEN shall be limited to Five Hundred dollars ($500.00) as liquidated
damages and not as a penalty.
18. Complete Agreement
This Agreement contains the entire Agreement between the PARTIES with respect to
the matters covered herein. No other agreements, representations, warranties or
other matters, oral or written, shall be deemed to bind the PARTIES with respect
to the subject of this Agreement. This Agreement shall be attached to, or
otherwise made part of, each work order issued by ALTIGEN to SOLLECON and shall
be in lieu of all printed terms on the face or reverse of the work order.
19. Applicable Law
SOLLECON shall comply with all applicable laws during work on the PROJECT but
shall be held harmless for violation of any governmental procurement regulation
to which it may be subject but to which reference is not made in SPECIFICATIONS.
This Agreement shall be construed in accordance with the laws of the State of
California.
20. Assignment
This Agreement may not be assigned by either PARTY without the prior written
consent of the other PARTY.
21. Notices
(i) Notices to SOLLECON should be sent to:
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(ii) Notices to ALTIGEN should be sent to:
AltiGen Communications, Inc.
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22. Execution
Each individual executing this Agreement on behalf of the PARTY to this
Agreement represents and personally warrants that he or she has authority to
enter into this Agreement on behalf of such PARTY and that Agreement is binding
on such PARTY.
AltiGen Communications, Inc. Sollecon, Inc., a Delaware Corporation
By /s/ Signature Illegible^^11/06/98 By /s/ Signature Illegible^^ 11/06/98
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Title Director of Digital Engr. Title President/CEO
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23. Any software or firmware owned by AltiGen as code base shall remain
exclusive property of AltiGen and Sollecon shall have no rights to reuse it in
it's further designs.
Exhibit A - Software Development Specifications
Exhibit B - Rate of Pay
$150/hour
Exhibit C - Direct Competitors
Dialogic
Netphone Inc.
Vertical
Shoreline Telecom