EXHIBIT 10 TO FORM 10-Q
(Material Contracts)
Exhibit Page
No. No. Description
- ------- ---- -----------
10.1 * Lease with Capitol Properties Four, L.C.
10.2 * 1998 Incentive Stock Option Plan
10.3 * Security Agreement with Michael and Barbara Feaster
10.4 * Employment Agreement with Robert H. Reback, President and
Chief Executive Officer
10.5 * Employment Agreement with David P. Faulkner, Executive Vice
President and Managing Director of Machine Control Products
10.6 * Employment Agreement with Michael D. Feaster, Vice
President of Software Development
10.7 * Employment Agreement with Steven K. Sorensen, Vice
President and Chief Technical Officer
10.8 * Employment Agreement with Riley G. Astill, Vice President
of Finance, Chief Financial Officer, Treasurer and Secretary
10.9 * Amendment 1 to 1998 Incentive Stock Option Plan
10.10 * Amendment 2 to 1998 Incentive Stock Option Plan
10.11 E-10.1 Form of Indemnification Agreement with directors and
officers
10.12 E-10.8 Settlement Agreement and Mutual Release with Peter Manley
and Jana Manley
- --------------------------------------------------------------------------------
*Incorporated by reference (See exhibit listing above in ITEM 6. Exhibits and
Reports on Form 8-K.)
<page>
Exhibit 10.11
(Form of Indemnification Agreement)
Each director and officer of Cimetrix has executed an Indemnification
Agreement in the form attached as Exhibit 10.11, each of the agreements being
made effective June 21, 2001.
INDEMNIFICATION AGREEMENT
THIS INDEMNIFICATION AGREEMENT (the "Agreement") is made and entered into
this ______ day of _______, 200__, by and between CIMETRIX INCORPORATED, a
Nevada corporation (the "Company"), and _________________ ("Indemnitee").
W I T N E S S E T H :
WHEREAS, the Company and Indemnitee recognize the increasing difficulty in
obtaining directors' and officers' liability insurance, the significant
increases in the cost of such insurance and the general reductions in the
coverage of such insurance;
WHEREAS, the Company and Indemnitee further recognize the substantial
increase in corporate litigation in general, subjecting officers and directors
to expensive litigation risks at the same time as the availability and coverage
of liability insurance has been severely limited;
WHEREAS, Indemnitee does not regard the current protection available as
adequate under the present circumstances, and Indemnitee and other officers and
directors of the Company may not be willing to continue to serve as officers and
directors without additional protection; and
WHEREAS, the Company desires to attract and retain the services of highly
qualified individuals, such as Indemnitee, to serve as officers and directors of
the Company and to indemnify its officers and directors so as to provide them
with the maximum protection permitted by law.
NOW, THEREFORE, the Company and Indemnitee hereby agree as follows:
1. Indemnification
---------------
1. Third Party Proceedings. The Company shall indemnify Indemnitee if
Indemnitee is or was a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (except an action by or in the right
of the Company) by reason of the fact that Indemnitee is or was a director or
officer of the Company, or any subsidiary of the Company, by reason of any
action or inaction on the part of Indemnitee while an officer or director, or by
reason of the fact that Indemnitee is or was serving at the request of the
Company as a director or officer of another corporation, partnership, joint
venture, trust or other enterprise, against expenses, including attorneys' fees,
judgments, fines and amounts paid in settlement actually and reasonably incurred
by Indemnitee in connection with such action, suit or proceeding if Indemnitee
acted in good faith and in a manner Indemnitee reasonably believed to be in or
not opposed to the best interests of the Company, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe Indemnitee's
conduct was unlawful. The termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon plea of nolo contendere or its
equivalent, shall not, of itself, create a presumption that Indemnitee did not
act in good faith and in a manner which Indemnitee reasonably believed to be in
or not opposed to the best interests of the Company, and that, with respect to
any criminal action or proceeding, had reasonable cause to believe that
Indemnitee's conduct was unlawful.
E-10.1
2. Proceedings by or in the Right of the Company. The Company shall
indemnify Indemnitee if Indemnitee is or was a party or is threatened to be made
a party to any threatened, pending or completed action or suit by or in the
right of the Company or any subsidiary of the Company to procure a judgment in
its favor by reason of the fact that Indemnitee is or was a director or officer
of the Company, or any subsidiary of the Company, by reason of any action or
inaction on the part of Indemnitee while an officer or director, or by reason of
the fact that Indemnitee is or was serving at the request of the Company as a
director or officer of another corporation, partnership, joint venture, trust or
other enterprise against expenses, including amounts paid in settlement and
attorneys' fees actually and reasonably incurred by Indemnitee in connection
with the defense or settlement of such action or suit if Indemnitee acted in
good faith and in a manner which Indemnitee reasonably believed to be in or not
opposed to the best interests of the Company. Indemnification shall not be made
for any claim, issue or matter as to which Indemnitee shall have been adjudged
by a court of competent jurisdiction, after exhaustion of all appeals therefrom,
to be liable to the Company or for amounts paid in settlement to the Company,
unless and only to the extent that the court in which such action or suit was
brought or other court of competent jurisdiction determines upon application
that, in view of all the circumstances of the case, Indemnitee is fairly and
reasonably entitled to indemnity for such expenses as the court deems proper.
3. Mandatory Payment of Expenses. To the extent that Indemnitee has been
successful on the merits or otherwise in defense of any action, suit or
proceeding referred to in Subsections (a) and (b) of this Section 1, or in
defense of any claim, issue or matter therein, the Company shall indemnify
Indemnitee against expenses, including attorneys' fees actually and reasonably
incurred by Indemnitee in connection with the defenses. Expenses of Indemnitee
incurred in defending a civil or criminal action, suit or proceeding must be
paid by the Company as they are incurred and in advance of the final disposition
of the action, suit or proceeding, upon receipt of an undertaking by or on
behalf of Indemnitee to repay such amounts advanced only if, and to the extent
that, they are ultimately determined by a court of competent jurisdiction that
Indemnitee is not entitled to be indemnified by the Company.
2. Expenses; Indemnification Procedure
-----------------------------------
1. Advancement of Expenses. The Company shall advance all expenses incurred
by Indemnitee in connection with the investigation, defense, settlement or
appeal of any civil or criminal action, suit or proceeding referenced in
Sections 1(a) or (b) hereof. Indemnitee hereby undertakes to repay such amounts
advanced only if, and to the extent that, it shall ultimately be determined by a
court of competent jurisdiction that Indemnitee is not entitled to be
indemnified by the Company as authorized hereby The advances to be made
hereunder shall be paid by the Company to Indemnitee within twenty (20) days
following delivery of a written request therefor by Indemnitee to the Company.
E-10.2
2. Notice; Cooperation by Indemnitee. Indemnitee shall, as a condition
precedent to his right to be indemnified under this Agreement, give the Company
notice in writing as soon as practicable of any claim made against Indemnitee
for which indemnification will or could be sought under this Agreement. Notice
to the Company shall be directed to Cimetrix Incorporated, 6979 South High Tech
Drive, Salt Lake City, Utah 84047-3757 (or such other address as the Company
shall designate in writing to Indemnitee). Notice shall be deemed received on
the third business day after the date postmarked if sent by domestic certified
or registered mail, properly addressed; otherwise, notice shall be deemed
received when such notice shall actually be received by the Company. In
addition, Indemnitee shall give the Company such information and cooperation as
it may reasonably require and as shall be within Indemnitee's power.
3. Procedure. Any indemnification and advances provided for in Section 1
and this Section 2 shall be made no later than twenty (20) days after receipt of
the written request of Indemnitee. If a claim under this Agreement, under any
statute, or under any provision of the Company's Articles of Incorporation or
Bylaws providing for indemnification, is not paid in full by the Company within
twenty (20) days after a written request for payment thereof has first been
received by the Company, Indemnitee may, but need not, at any time thereafter
bring an action against the Company to recover the unpaid amount of the claim
and, subject to Section 12 of this Agreement, Indemnitee shall also be entitled
to be paid for the Expenses (including reasonable attorneys' fees) of bringing
such action. It shall be a defense to any such action (other than an action
brought to enforce a claim for Expenses incurred in connection with any
Proceeding in advance of its final disposition) that Indemnitee has not met the
standard of conduct which make it permissible under applicable law for the
Company to indemnify Indemnitee for the amount claimed, but the burden of
proving such defense shall be on the Company and Indemnitee shall be entitled to
receive interim payments of Expenses pursuant to Subsection 2(a) unless and
until such defense may be finally adjudicated by court order or judgment from
which no further right of appeal exits. It is the parties' intention that if the
Company contests Indemnitee's right to indemnification, the question of
Indemnitee's right to indemnification shall be for the court to decide, and
neither the failure of the Company (including its Board of Directors, any
committee or subgroup of the Board of Directors, independent legal counsel, or
its stockholders) to have made a determination that indemnification of
Indemnitee is proper in the circumstances because Indemnitee has not met such
applicable standard of conduct, shall create a presumption that Indemnitee has
or has not met the applicable standard of conduct.
4. Notice to Insurers. If, at the time of the receipt of a notice of a
claim pursuant to Section 2(b) hereof, the Company has director and officer
liability insurance in effect, the Company shall give prompt notice of the
commencement of such Proceeding to the insurers in accordance with the
procedures set forth in the respective policies. The Company shall thereafter
take all necessary or desirable action to cause such insurers to pay, on behalf
of the Indemnitee, all amounts payable as a result of such Proceeding in
accordance with the terms of such policies.
E-10.3
5. Selection of Counsel. In the event the Company shall be obligated under
Section 2(a) hereof to pay the Expenses of any Proceeding against Indemnitee,
the Company, if appropriate, shall be entitled to assume the defense of such
Proceeding, with counsel approved by Indemnitee, upon the delivery to Indemnitee
of written notice of its election to do so. After delivery of such notice,
approval of such counsel by Indemnitee under this Agreement, the Company will
not be liable to Indemnitee under this Agreement for any fees of counsel
subsequently incurred by Indemnitee with respect to the same Proceeding,
provided that (i) Indemnitee shall have the right to employ his counsel in any
such Proceeding at Indemnitee's expense; and (ii) if (A) the employment of
counsel by Indemnitee has been previously authorized by the Company; (B)
Indemnitee shall have reasonably concluded that there may be a conflict of
interest between the Company and the Indemnitee in the conduct of any such
defense; or (C) the Company shall not, in fact, have employed counsel to assume
the defense of such Proceeding, then the fees and Expenses of Indemnitee's
counsel shall be at the expense of the Company.
3. Additional Indemnification Rights; Nonexclusivity
-------------------------------------------------
1. Scope. Notwithstanding any other provision of this Agreement, the
Company hereby agrees to indemnify Indemnitee to the fullest extent permitted by
law, notwithstanding that such indemnification is not specifically authorized by
the other provisions of this Agreement, the Company's Articles of Incorporation,
the Company's Bylaws, or by statute. In the event of any change, after the date
of this Agreement, in any applicable law, statute, or rule which expands the
rights of a Nevada corporation to indemnify a member of is board of directors or
an officer, such changes shall be, ipso facto, within the purview of
Indemnitee's rights and Company's obligations, under this Agreement. In the
event of any change in any applicable law, statute, or rule which narrows the
right of a Nevada corporation to indemnify a member of its board of directors or
an officer, such changes, to the extent not otherwise required by such law,
statute, or rule to be applied to this Agreement shall have no effect on this
Agreement or the parties' rights and obligations hereunder.
2. Nonexclusivity. The indemnification provided by this Agreement shall not
be deemed exclusive of any rights to which Indemnitee may be entitled under the
Company's Articles of Incorporation, its Bylaws, any agreement, any vote of
stockholders or disinterested directors, the Nevada Revised Statutes, or
otherwise, for either an action in Indemnitee's official capacity and as to
action in another capacity while holding such office, except that
indemnification, unless ordered by a court pursuant to Section 5.1 of this
Article or for the advancement of expenses made pursuant to Section 5.2 of this
Article, may not be made to or on behalf of Indemnitee if a final adjudication
establishes that Indemnitee's acts or omissions involved intentional misconduct,
fraud or a knowing violation of the law and was material to the cause of action.
The indemnification provided under this Agreement shall continue as to
Indemnitee for any action taken or not taken while serving in an indemnified
capacity even though he may have ceased to serve in such capacity at the time of
any Proceeding.
4. Partial Indemnification
-----------------------
If Indemnitee is entitled under any provision of this Agreement to
indemnification by the Company for some or a portion of the Expenses, judgments,
fines, or penalties actually or reasonably incurred by him in the investigation,
defense, appeal or settlement of any Proceeding but not, however, for the total
amount thereof, the Company shall nevertheless indemnify Indemnitee for the
portion of such Expenses, judgments, fines or penalties to which Indemnitee is
entitled.
5. Mutual Acknowledgment
---------------------
Both the Company and Indemnitee acknowledge that in certain instances,
Federal law or public policy may override applicable state law and prohibit the
Company from indemnifying its directors and officers under this Agreement or
otherwise. For example, the Company and Indemnitee acknowledge that the
Securities and Exchange Commission (the "SEC") has taken the position that
indemnification is not permissible for liabilities arising under certain federal
securities laws, and federal legislation prohibits indemnification for certain
ERISA violations. Indemnitee understands and acknowledges that the Company has
undertaken or may be required in the future to undertake with the SEC to submit
the question of indemnification to a court in certain circumstances for a
determination of the Company's right under public policy to indemnify
Indemnitee.
E-10.4
6. Officer and Director Liability Insurance
----------------------------------------
The Company shall, from time to time, make the good faith determination
whether or not it is practicable for the Company to obtain and maintain a policy
or policies of insurance with reputable insurance companies providing the
officers and directors of the Company with coverage for losses from wrongful
acts, or to ensure the Company's performance of its indemnification obligations
under this Agreement. Among other considerations, the Company will weigh the
costs of obtaining such insurance coverage against the protection afforded by
such coverage. In all policies of director and officer liability insurance,
Indemnitee shall be named as an insured in such a manner as to provide
Indemnitee the same rights and benefits as are accorded to the most favorably
insured of the Company's directors, if Indemnitee is a director; or of the
Company's officers, if Indemnitee is not a director of the Company but is an
officer. Notwithstanding the foregoing, the Company shall have no obligation to
obtain or maintain such insurance if the Company determines in good faith that
such insurance is not reasonably available, if the premium costs for such
insurance are disproportionate to the amount of coverage provided, if the
coverage provided by such insurance is limited by exclusions so as to provide an
insufficient benefit, or if Indemnitee is covered by similar insurance
maintained by a parent or subsidiary of the Company.
7. Severability
------------
Nothing in this Agreement is intended to require or shall be construed as
requiring the Company to do or fail to do any act in violation of applicable
law. The Company's inability, pursuant to court order, to perform its
obligations under this Agreement shall not constitute a breach of this
Agreement. The provisions of this Agreement shall be severable as provided in
this Section 7. If this Agreement or any portion hereof shall be invalidated on
any ground by any court of competent jurisdiction, then the Company shall
nevertheless indemnify Indemnitee to the full extent permitted by any applicable
portion of this Agreement that shall not have been invalidated, and the balance
of this Agreement not so invalidated shall be enforceable in accordance with its
terms.
8. Exceptions
----------
Any other provision herein to the contrary notwithstanding, the Company
shall not be obligated pursuant to the terms of this Agreement:
1. Fraud, Recklessness or Willful Misconduct. To indemnify Indemnitee for
Expenses incurred on account of the Indemnitee's conduct that is finally
adjudged by a court to have constituted intentional misconduct, fraud,
recklessness, or a knowing violation of the law and was material to the cause of
action;
2. Unlawful. If a final decision by a court having jurisdiction in the
matter determines that such indemnification is not lawful.
9. Construction or Definition of Certain Phrases or Terms
------------------------------------------------------
1. For purposes of this Agreement, references to the "Company" shall
include, in addition to the resulting corporation, any constituent corporation
(including any constituent of a constituent) absorbed in a consolidation or
merger which, if its separate existence had continued, would have had power and
authority to indemnify its directors, officers, and employees or agents, so that
if Indemnitee is or was a director, officer, employee or agent of such
constituent corporation, or is or was serving at the request of such constituent
corporation as a director, officer, employee, or agent of another corporation,
partnership, joint venture, trusts or other enterprise, Indemnitee shall stand
in the same position under the provisions of this Agreement with respect to the
resulting or surviving corporation as Indemnitee would have with respect to such
constituent corporation if its separate existence had continued.
E-10.5
2. For purposes of this Agreement, references to "other enterprises" shall
include employee benefit plans; references to "fines" shall include any excise
taxes assessed on Indemnitee with respect to an employee benefit plan; and
references to "serving at the request of the Company" shall include any service
as a director, officer, employee, or agent of the Company which imposes duties
on, or involves services by, such director, officer, employee or agent with
respect to an employee benefit plan, its participants, or beneficiaries; and if
Indemnitee acted in good faith and in a manner Indemnitee reasonably believed to
be in the interest of the participants and beneficiaries of an employee benefit
plan, Indemnitee shall be deemed to have acted in a manner "not opposed to the
best interests of the Company" as referred to in this Agreement.
3. The term "Proceeding" as used herein shall include any threatened,
pending or completed action, suit or proceeding or any inquiry or investigation,
whether brought by or in the right of the Company or otherwise and whether of a
civil, criminal, administrative, or investigative nature, in which the
Indemnitee was, is, or is threatened to be involved as a party or otherwise, by
reasons of the fact that he is or was a director or officer of the Company, or
by reason of the fact that he is or was serving at the request of the Company as
a director, officer, employee, or agent of another corporation, partnership,
joint venture, trust or other enterprise, or by reason of any action taken by
him or any inaction on his part while acting in any such capacity, in each case
whether or not he is acting or serving in any such capacity at the time any
liability or expense is incurred for which indemnification or reimbursement can
be provided under this Agreement.
4. The term "Expenses" as used herein shall include, without limitation,
expenses of investigations, judicial or administrative proceedings or appeals,
judgments, fines and penalties, amounts paid in settlement by the Indemnitee,
attorneys' fees (including fees and expenses of counsel selected by the
Indemnitee) and disbursements, and any expenses of establishing a right to
indemnification under Section 2 hereof.
10. Counterparts
------------
This Agreement may be executed in one or more counterparts, each of which
shall constitute an original
11. Successors and Assigns
----------------------
This Agreement shall be binding upon the Company and its successors and
assigns, and shall inure to the benefit of Indemnitee and Indemnitee's estate,
heirs, legal representatives, and assigns.
12. Attorneys' Fees
----------------
In the event that any action is instituted by Indemnitee under this
Agreement to enforce or interpret any of the terms hereof, Indemnitee shall be
entitled to be paid all court costs and Expenses, including reasonable
attorneys' fees, incurred by Indemnitee with respect to such action, unless as a
part of such action, a court of competent jurisdiction determines that each of
the material assertions made by Indemnitee as a basis for such action were not
made in good faith or were frivolous. In the event of an action instituted by or
in the name of the Company under this Agreement or to enforce or interpret any
of the terms of this Agreement, Indemnitee shall be entitled to be paid all
court costs and Expenses, including attorneys' fees, incurred by Indemnitee in
defense of such action (including with respect to Indemnitee's counterclaims and
cross-claims made in such action), unless as a part of such action the court
determines that each of Indemnitee's material defenses to such action were made
in bad faith or were frivolous.
E-10.6
13. Notice
------
All notices, requests, demands, and other communications under this
Agreement shall be in writing and shall be deemed duly given (i) if delivered by
and receipted for by the party addressee, on the date of such receipt, or (ii)
if mailed by domestic certified or registered mail with postage prepaid, on the
third business day after the date postmarked. Addresses for notice to either
party are as shown on the signature page of this Agreement, or as subsequently
modified by written notice.
14. Consent to Jurisdiction
-----------------------
The Company and Indemnitee each hereby irrevocably consent to the
jurisdiction of the courts of the State of Utah for all purposes in connection
with any Proceeding which arises out of or relates to this Agreement.
15. Choice of Law
-------------
This Agreement shall be governed by and its provisions construed in
accordance with the laws of the State of Utah, as applied to contracts between
Utah residents entered into and to be performed entirely within Utah.
16. Contribution
------------
If the full indemnification provided in Section 1 may not be paid to the
Indemnitee because such indemnification is prohibited by law, then in respect of
any actual or threatened Proceeding in which the Company is jointly liable with
the Indemnitee (or would be if joined in such Proceeding), the Company shall
contribute to the amount of Expenses incurred by the Indemnitee for which
indemnification is not available in such proportion as is appropriate to reflect
(a) the relative benefits received by the Company on the one hand, and the
Indemnitee on the other hand from the transaction from which such Proceeding
arose and (b) the relative fault of the Company and the Indemnitee, as well as
any other relevant equitable considerations. The relative fault of the Company,
which shall be deemed to include its other directors, officers and employees, on
one hand, and of the Indemnitee, on the other hand, shall be determined by
reference to, among other things, the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent the circumstances
resulting in such Expenses. The Company agrees that it would not be just and
equitable if contribution pursuant to this section were determined by any method
of allocation that does not take into account the foregoing equitable
considerations.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
CIMETRIX INCORPORATED
By:------------------
Its:-----------------
AGREED TO AND ACCEPTED BY
INDEMNITEE:
- --------------------------------------
(Signature)
- --------------------------------------
(Printed Name)
- --------------------------------------
(Address)
E-10.7
Exhibit 10.12
(Settlement Agreement and Mutual Release with Peter Manley and Jana Manley)
SETTLEMENT AGREEMENT AND MUTUAL RELEASE
THIS SETTLEMENT AGREEMENT AND MUTUAL RELEASE ("Agreement") is entered into
effective as of June 26, 2001, ("Effective Date") by and between Peter Manley
and Jana Manley (the "Manleys") and Cimetrix Incorporated ("Cimetrix").
RECITALS
A. On or about August 6, 1998, the Manleys commenced an action against
Cimetrix and Paul Bilzerian ("Bilzerian") in the Third Judicial District
Court in and for Salt Lake County, State of Utah, Civil No. 980907797 (the
"Lawsuit").
B. In the Lawsuit, Cimetrix filed an answer and counterclaims against the
Manleys. Bilzerian has also filed counterclaims against the Manleys.
C. The parties hereto now desire to avoid the further burden and expense of
time-consuming litigation and desire to resolve the disputes existing
between them on the terms set forth below.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:
1. Neither this Agreement nor any of the terms hereof or payments made
pursuant hereto nor any of the negotiations of proceedings in connection
herewith shall constitute or be construed as or be deemed to be evidence of an
admission on the part of any of the parties of any liability or wrongdoing
whatsoever, or the truth of any of the claims made by any of the parties in the
Lawsuit or the lack of any merit of any of the defenses thereto or that any
party has suffered any injury by reason of any alleged act of any other party or
otherwise.
E-10.8
<page>
2. With the exception of the Manleys' obligations created herein, Cimetrix
absolutely and unconditionally releases all claims it has against the Manleys
that exist up through and including the Effective Date and 42 days thereafter,
including, but not limited to, those claims asserted in the Lawsuit.
3. With the exception of Cimetrix's obligations created herein, the Manleys
absolutely and unconditionally release all claims they have against Cimetrix
that exist up through and including the Effective Date and 42 days thereafter,
including, but not limited to, those claims asserted in the Lawsuit.
4. If Cimetrix obtains a dismissal with prejudice of all claims Bilzerian
asserted in the Lawsuit against the Manleys ("Bilzerian Claims"), or if Cimetrix
obtains a release of the Manleys from Bilzerian of the Bilzerian Claims, or if
Cimetrix satisfies in full its obligation to indemnify the Manleys for the
Bilzerian Claims as set forth in this Agreement, then the Manleys will release
Bilzerian for the claims the Manleys ("Manley Claims") asserted against
Bilzerian in the Lawsuit. If Cimetrix breaches any of its obligations under this
Agreement, the Manleys may again reassert the Manley Claims against Bilzerian in
any forum.
5. The parties agree to cause their counsel to file a motion to dismiss the
following claims with prejudice, all parties to bear their own respective costs
and attorneys' fees: (i) all claims asserted by the Manleys against Cimetrix;
and (ii) all claims asserted by Cimetrix against the Manleys. The Manleys will
cause their counsel to file a motion to dismiss the Manleys Claims in the
Lawsuit against Bilzerian without prejudice.
6. Commencing September 30, 2001, and ending December 31, 2002, the Manleys
will advise Cimetrix in writing of the number of shares of Cimetrix stock held
by the Manleys and their assigns within ten business days after receipt of
Cimetrix's written request for such information, but no more frequently then on
a quarterly basis. Cimetrix may not use the Manleys' failure to comply with this
obligation as a defense to Cimetrix's obligation to redeem the Manleys', or any
of their assigns', Cimetrix Stock set forth in paragraph 7. Cimetrix's sole
remedy for the breach of this covenant shall be specific enforcement of this
covenant.
E-10.9
<page>
7. During the period of time from December 1, 2002 through December 31,
2002, ("Option Period"), the Manleys and their assigns Parr Waddoups Brown Gee &
Loveless ("Parr Waddoups") in their respective sole discretion, shall have the
right to require Cimetrix to redeem from them at any time during the Option
Period ("Option") up to 80,000 shares of the Cimetrix common stock that they now
own (or, in the case of an assignee, shares assigned to such assignee) ("Manley
Stock") at the redemption price of two dollars and eighty cents ($2.80) per
share (the "Option Purchase Price"). The Manleys or their assigns, as the case
may be, shall make this redemption request in writing specifying the number of
shares to be redeemed. Cimetrix shall have 30 days from the receipt of said
notice within which to pay the Manleys or their assigns, as the case may be, the
Option Purchase Price. In exchange for the Option Purchase Price, the Manleys or
their assigns, as the case may be, agree to deliver to Cimetrix the certificates
evidencing such shares, duly endorsed in blank, or accompanied by executed stock
powers. The Manleys represent and warrant to Cimetrix, with the understanding
that Cimetrix is relying upon such representations and warranties, that, except
with respect to any Bilzerian Claims, they have good and marketable title to any
Manley Stock to which the Option is exercised by them, and such stock is free
and clear of any and all liens, charges, security interest, encumbrances,
exceptions or adverse claims of any nature whatsoever and that the Manley Stock
transferred to Parr Waddoups is free and clear of any liens, charges, security
interest, encumbrances, exceptions or adverse claims of any nature whatsoever.
If Bilzerian becomes an officer, director, employee or agent of Cimetrix prior
to the Option Period, then Cimetrix shall notify the Manleys and their assigns
in writing as soon as Cimetrix is aware that such appointment of Bilzerian will
occur and after receipt of said notice by the Manleys or their assigns, as the
case may be, the Option Period will be advanced and begin to run on the date
that such notice was received by the Manleys or any assigns, as the case may be,
and the Manleys and their assigns shall be entitled to require Cimetrix to
purchase the Manleys' or their assigns' Manley Stock immediately thereafter at
the Option Purchase Price.
E-10.10
<page>
If Cimetrix's average daily cash balance computed on a monthly basis is at
or below one million two hundred fifty thousand dollars ($1,250,000), Cimetrix
shall notify the Manleys and their assigns in writing within five (5) business
days after Cimetrix's average daily cash balance is at or below one million two
hundred fifty thousand dollars ($1,250,000). The average daily cash balance
shall be computed on a monthly basis based upon Cimetrix's monthly bank
statements. The computation of the average daily cash balance shall be made by
adding together the daily closing balances of Cimetrix' bank or other financial
accounts for the prior month, and then dividing the total by the number of days
in that month. After receipt of said notice by the Manleys or their assigns, as
the case may be, the Option Period will be advanced and begin to run on the date
that such notice was received by the Manleys or their assigns, as the case may
be, and the Manleys and their assigns shall be entitled to require Cimetrix to
purchase the Manleys' or their assigns' Manley Stock immediately thereafter at
the Option Purchase Price. If Cimetrix fails to notify the Manleys within five
business days after its average daily cash balance is at or below one million
two hundred fifty thousand dollars ($1,250,000) and the Manleys or their assigns
elect to exercise the Option for some or all of the Manley Stock, the Option
Purchase Price shall bear interest at eight percent (8%) per annum compounded
monthly, and shall begin to accrue from and after the last day of the month in
which the average daily cash balance is at or below one million two hundred and
fifty thousand dollars ($1,250,000). The Manleys or their assigns may request in
writing copies of Cimetrix's bank statements ("Bank Statements") for the three
months preceding the period of time covered by each Cimetrix quarterly report
filed with the Securities and Exchange Commission. Cimetrix shall provide the
Manleys or their assigns with copies of the Bank Statements within ten (10) days
of the date of Manleys' or their assigns' request.
E-10.11
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8. Cimetrix hereby agrees to indemnify and hold the Manleys harmless from
and against the Bilzerian Claims whether asserted in the Lawsuit or in any other
forum by Bilzerian and any successors and/or assigns to the Bilzerian Claims,
and from all claims, damages and causes of action asserted directly or
indirectly by Bilzerian arising out of the parties entering into this Agreement.
The forgoing indemnification includes, but is not limited to, payment, when
incurred, of the Manleys' attorneys' fees and costs in connection with their
defense of the Bilzerian Claims asserted in the Lawsuit or in any other forum by
Bilzerian or any of his successors and/or assigns, and the cost of defending
against any claims asserted directly or indirectly by Bilzerian or his
successors and assigns that arise out of or relate to this Agreement, including
attorneys' fees. Cimetrix shall retain the right to appoint counsel for the
Manleys and control their defense in a manner that is in the Manleys' best
interest. Upon execution of this Agreement, Cimetrix shall immediately appoint
counsel to defend the Manleys against the Bilzerian Claims.
9. The Cimetrix Board of Directors shall pass a resolution rescinding that
portion of its August 10, 1993, consent resolution ("Consent Resolution")
requiring Peter Manley to offer a first right of refusal on the sale of any
block of Cimetrix stock larger than 3,000 shares to W. Keith Seloas, Lincoln M.
Dastrup, and W. Edward Red, their assigns or estates, and that portion of the
August 10, 1993, Board Resolution requiring Peter Manley, prior to the sale of
more than 10,000 shares of Cimetrix common stock, to notify the Board of
Directors of Cimetrix of such sale. Cimetrix agrees to deliver to the Manleys,
Lincoln M. Dastrup's release of any of his claims related to a right of first
refusal to purchase the Manley Stock.
10. Cimetrix hereby acknowledges and agrees that the Manleys are entitled
to ownership of all shares awarded to Peter Manley under the Stock Agreement
dated October 16, 1989, the Stock Option Agreement dated August 12, 1993, the
Stock Option Agreement dated December 21, 1994, any other Cimetrix stock at
issue in the Lawsuit, and any other Cimetrix stock owned by the Manleys.
Cimetrix agrees not to, directly or indirectly, interfere with the Manleys' sale
or assignment of any of their Cimetrix stock, and to provide any documents
necessary for them to freely trade their shares of Cimetrix stock.
E-10.12
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11. The parties agree that the terms of this Agreement shall be and remain
confidential, to be disclosed only as required by law or by Cimetrix also as is
reasonably necessary in the ordinary course of its business affairs. Cimetrix
may not use the Manleys' failure to comply with this obligation as a defense to
Cimetrix's obligation to redeem the Manleys' or their assigns' Manley Stock set
forth in paragraph 7. Cimetrix's sole remedy for the breach of this covenant
shall be specific enforcement of this covenant.
12. Each of the parties agrees to execute and deliver all documents,
provide all information, and take or forebear from all such action as may be
necessary and appropriate to achieve the purposes of this Agreement.
13. If any action is commenced to enforce any of the terms hereof, the
successful party in such action shall be entitled to recover all necessary and
reasonable attorneys' fees and costs in connection with such action.
14. The parties hereto represent and warrant that they have been
independently represented by counsel of their own choice and that each party has
made a full investigation into the facts surrounding the matter and the
settlement reflected in this Agreement and that each enters into this Agreement
based upon his/her or its own investigation and the advice of counsel.
15. Each party hereto acknowledges that such party has read and understands
the effect of the above and foregoing instrument and executes the same of
his/her or its free will and accord for the purposes and consideration set
forth. None of the parties, nor anyone on their behalf has made any
representation of fact, opinion or promise to induce the other to enter into
this Agreement other than as set forth herein.
E-10.13
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16. This Agreement contains the entire agreement between the parties and
supersedes any and all prior agreements, arrangements, or understandings between
the parties on all subjects in any way related to the transactions or
occurrences described in or related to this Agreement. No oral understandings,
statements, promises or inducements contrary to or inconsistent with the terms
of this Agreement exist. This Agreement may be modified, amended, waived or
supplemented only by means of a writing signed by all of the parties.
17. The parties have participated jointly in the negotiation and drafting
of this Agreement. In the event an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly
by the parties and no presumption or burden of proof shall arise favoring or
disfavoring any party by virtue of the authorship of any of the provisions of
this Agreement.
18. This Agreement and each other document contemplated hereby will be,
when duly executed and delivered, legal, valid and binding obligations of such
party, enforceable in accordance with the terms thereof.
19. This Agreement and each other document contemplated hereby are and
shall be binding upon and enure to the benefit of each of the parties hereto and
their respective heirs, successors and assigns.
20. This Agreement shall be governed and construed according to the laws of
the State of Utah.
21. Cimetrix hereby consents to the assignment by the Manleys of 26,786
shares of Cimetrix common stock to Parr Waddoups as compensation for certain
services performed by Parr Waddoups for the Manleys in connection with the
Lawsuit. Cimetrix hereby agrees that during the Option Period, as provided
herein, Parr Waddoups shall have the right to require Cimetrix to redeem such
shares from Parr Waddoups at the Option Purchase Price and that Cimetrix shall
make payment with respect to such redemption within thirty (30) days after
receipt by Cimetrix of notice from Parr Waddoups of its exercise of the
foregoing right.
E-10.14
<page>
Notwithstanding anything contained in paragraph 7 hereto, Cimetrix hereby
agrees that with respect to such redemption by Cimetrix of the Parr Waddoups
Cimetrix stock, Parr Waddoups shall not be obligated to represent and warrant to
Cimetrix that it has good and marketable title to the Parr Waddoups Cimetrix
shares, free and clear of any and all liens, charges, security interest,
encumbrances, exceptions or adverse claims of any nature whatsoever; provided
that Parr Waddoups shall represent and warrant to Cimetrix that it is
transferring to Cimetrix such title to the Parr Waddoups Cimetrix shares as
received by Parr Waddoups from the Manleys. Cimetrix further agrees that with
respect to acceleration of the Option Period due to Bilzerian's involvement with
Cimetrix or Cimetrix's average daily cash balance being at or below one million
two hundred fifty thousand dollars ($1,250,000) as set forth in paragraph 7
hereof, Parr Waddoups shall have the same rights as those granted the Manleys
and that Cimetrix shall provide Parr Waddoups notice as required therein.
Cimetrix agrees to execute such documents as may be reasonably requested by Parr
Waddoups with respect to the transfers contemplated herein and to properly
reflect such transfers on the records of Cimetrix.
22. Any notice or directive hereunder by any party intended for any other
party shall be in writing and shall be physically delivered or sent by
registered or certified mail, return receipt requested with postage prepaid, to
such other party at the address set forth below, unless such other party shall
have previously designated a different address by due notice hereunder:
To Cimetrix: To the Manleys: To Parr Waddoups
CIMETRIX, INC. C/o Stephen E. W. Hale C/o Stephen E. W. Hale
Robert H. Reback PARR WADDOUPS BROWN PARR WADDOUPS BROWN
6979 South High Tech Drive GEE & LOVELESS GEE & LOVELESS
Midvale, Utah 84047 P. O. Box 11019 P. O. Box 11019
Salt Lake City, Salt Lake City,
Utah 84147 Utah 84147
E-10.15
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23. This Agreement may be executed in separate counterparts. Each
counterpart, when so executed and delivered, shall be an original, and all
counterparts together shall constitute one and the same instrument. A copy of a
signature page sent by facsimile shall be treated the same as an original
signature. This Agreement shall become effective as of the day set forth above.
PETER MANLEY JANA MANLEY
- ---------------------------------- ------------------------------------
CIMETRIX INCORPORATED
By: ----------------
Robert H. Reback
Its: President
E-10.16