Exhibit 10.4
 
 
CONFIDENTIALITY, DEVELOPMENT AND NON-INTERFERENCE AGREEMENT
 
THIS AGREEMENT ("Agreement") is by and between Internetworking Sciences
Corporation, a Delaware corporation with principal offices at 6401 Southwest
Freeway, Houston, Texas 77074 ("Company") and Mark T. Hilz, an individual
residing at 210 Canyon Oaks Drive, Argyle, Texas 76226 (Employee'') and is
effective July 5, 2000.
 
In consideration of Employee's employment or continued employment by Company and
any additional compensation or benefits that Company may now or from time to
time bestow upon Employee, Employee and Company agree as follows:
 
1.            Company Shall Provide Confidential Information. To the extent
necessary to perform his or her duties hereunder, Company shall provide to
and/or will give Employee access to pertinent Confidential Information (defined
below) of Company. In addition, because of the nature of Employee's duties and
responsibilities to Company, Employee from time to time will have access or be
exposed to certain other Confidential Information of Company.
 
2.            Employees Who Sell Company's Products and Services. As used in
this Agreement, the word "Employee" shall be deemed to include, but not be
limited to, Company's Sales Agents and Sales Managers. In the event Employee
deals, in any way, with Company's customers, Employee agrees that the empathy,
rapport and goodwill (collectively "goodwill") he/she develops with Company's
customers are extremely valuable and necessary for the sale(s) of Company's
products and services to such customers and shall be deemed to be protectable
and proprietary interests of Company and not of Employee.
 
3.            Company's Confidential Information. Employee agrees that all of
Company's Confidential Information, whatever its nature and/or form and whether
obtained by Employee orally, by observation, by exposure to customers or other
persons, from written materials or otherwise, shall at all times be the
exclusive and confidential property of Company and shall be at all times
regarded, treated and protected as such by Employee in accordance with this
Agreement. Further, Employee agrees that Company's Confidential Information of
which he/she learns at any time shall be deemed to have been provided by Company
to Employee, in confidence, irrespective of whether or not Company provided same
to Employee or whether prepared, discovered, developed or contributed to, wholly
or in part, by Employee or any other individual or entity during Employee's
employment with Company or prior to such employment with Company. Employee
agrees that such Confidential Information is not only the proprietary and
protectable property of Company, but that it shall be treated and kept as secret
by Employee at all times and any unauthorized use and/or disclosure of same, or
any part thereof, will constitute a breach(es) of this Agreement and will
constitute a breach(es) of Employee's fiduciary duty to Company regarding the
Confidential Information and will constitute a breach(es) of the confidential
relationship between Company and Employee regarding the Confidential
Information. Employee agrees that all of Company's Confidential Information,
including but not limited to, the specific items listed in paragraph 3, below,
is not known to Company's competitors and such competitors do not use such
specific information in their business. Employee further agrees that none of the
specific items listed in paragraph 3, below, are matters of public knowledge or
of general knowledge in the industry in which Company conducts its business;
Employee agrees that none of such specific items are readily ascertainable by
any competitor of Company by reasonable and ordinary means; Employee agrees that
Company's Confidential Information is proprietary to, about or created by
Company and gives Company some competitive business advantage or the opportunity
of obtaining such advantage. Employee agrees that the unauthorized disclosure or
use of Company's Confidential Information might be detrimental to the interests
of Company. Employee agrees that Company's Confidential Information is not
typically disclosed by Company to, or known by third parties who are not
employed by Company. Employee agrees that Company's Confidential Information
also includes, but is not limited to, information known by Employee to be
considered confidential by Company, or from all the relevant circumstances
considered confidential by Company, or from all the relevant circumstances
should reasonably be assumed by Employee to be confidential and proprietary to
Company. Employee agrees that Company utilizes continuing and effective means of
preserving the secrecy of its Confidential Information items, such as, but not
limited to, having its Employees enter into confidentiality agreements such as
this Agreement, provided, however, that failure to mark any document
"confidential," or with word(s) of similar import, shall not affect the
confidential nature of such document or the information contained thereon.
Employee agrees that Company's Confidential Information, which may be written,
oral or otherwise, includes, but is not limited to:
 
 
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(a)            Work product resulting from or related to work or projects
performed or to be performed for Company or for customers or clients of Company,
including but not limited to data bases, draft and other non-public written
documents, the interim and final lines of inquiry, hypotheses, research and
conclusions related thereto and the methods, processes, procedures, analyses,
techniques and audits used in connection therewith;
 
(b)            Computer software of any type or form in any stage of actual or
anticipated research and development, including but not limited to programs and
program modules, routines and subroutines, processes, algorithms, design
concepts, design specifications (design notes, annotations, documentation,
flowcharts, coding sheets, and the like), source codes, object codes and load
modules, programming, program patches and system designs;
 
(c)           Information relating to the Company's proprietary rights prior to
any public disclosure thereof, including but not limited to the nature of the
proprietary rights, production data, technical and engineering data, test data
and test results, the status and details of research and development of products
and service, and information regarding acquiring, protecting, enforcing and
licensing proprietary rights (including, without limitation, patents, copyrights
and trade secrets);
 
(d)           Internal Company personnel and financial information, lists or
other documents which identify vendor names and other vendor information
(including vendor characteristics, services and agreements), information
concerning the identification and nature of goods or services provided by
vendors, purchasing and internal cost information, internal service and
operational manuals, and the manner and methods of conducting Company's
business;
 
(e)            Business, marketing and development plans, price and price
discounting policies and practices, price and cost data, price and fee amounts,
pricing and billing policies, quoting procedures, marketing techniques and
methods of obtaining business, forecasts and forecast assumptions and volumes,
and future plans and potential strategies of Company which have been or are
being discussed;
 
(f)            Names, lists or compilations of customers or clients and their
representatives, contracts and their contents and parties, customer or client
services, and the type, quantity, specifications and contents of products and
services purchased, leased, licensed or received by customers or clients of
Company;
 
(g)            Information provided to Company by any individual or entity;
 
(h)            Contracts with, or developed by Company for use with customers,
agents, vendors of Company, or any other individual or entity, including without
limitation, the terms and conditions thereof;
 
(i)              Any and all materials printed by or for Company and utilized by
Company in any manner in the conduct of its business;
 
(j)            All information generated by computer software utilized by
Company in the conduct of its business;
 
(k)           Company's computer data bases and any information going into or
coming out of Company's computers;
 
 
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(l)             Information concerning Company's customers, including but not
limited to customer identity, customer needs and products and/or services
requirements, specific products and quantities of same purchased by customers,
specific prices paid for Company's products and services by customers, specific
quantities of Company's products and services purchased by customers,
commissions paid on the sales made to customers, payment history of customers,
identification of and all information concerning the buyers (purchasing agents)
employed by the customers, histories of customer purchases, all notes or
memoranda containing any customer information, and all information concerning
customers, customer lists (which shall be deemed to mean any printed material
containing, relating to or referring to any customer or customer information),
price books, prices, price lists, price calculations, i.e., any information
having to do with the prices Company charges its customers for Company's
products;
 
(m)          Any and all information concerning Company's personnel, whether
sales or in-house personnel; any and all information concerning commissions
and/or other compensation and/or bonuses paid to Employees; any and all
information concerning the effectiveness of, volume of sales made by, and
profitability of sales made by each Company Employee responsible for making
sales; Company's sales strategies, sales procedures, promotion of sales and
sales proposals and/or bids and/or any information concerning Company's
solicitation for and sales of its products and services; general price lists,
special price lists, e.g., for "national accounts" or other favored customer
accounts; all other information and/or data relating in any manner to Company
and/or its business which is learned of and/or which comes into the possession
of Employee and/or any other Company employee while employed by Company; all
information utilized by Employee and/or any other Company employee while
employed by Company, irrespective of when or through what or whom learned of.
Company's Confidential Information includes, but is not limited to, information
that Employee would not have learned of but for his/her employment by Company.
 
Employee agrees that each, every and all of the above listed specific items of
Company's Confidential Information are and shall be deemed trade secrets in
accordance with the definitions of trade secrets stated in comment b to the
Restatement (First) of Torts § 757 ("Restatement") and the Uniform Trade Secrets
Act ("UTSA"). Employee further agrees that such trade secrets are and shall be
deemed to be Company's Confidential Information. Employee agrees that such
Confidential Information shall be protectable by Company as its trade secret(s)
and/or confidential information notwithstanding that, technically, any given
specific item of Confidential Information, at issue, may not satisfy the
definition(s) of trade secrets as stated above or as contained in the
Restatement or UTSA. Employee agrees that it is the intent of this Agreement and
is the intent of Employee, and in light of the consideration paid by Company to
Employee for his/her entering into this Agreement, that this Agreement shall be
fully enforceable and the specific items of Confidential Information as stated
herein shall be protectable by injunctive relief, among other remedies, even
though such items do not rise to the dignity of trade secret(s) as defined by
the Restatement, UTSA or by any other law(s) of the State of Texas. Confidential
Information shall not include information publicly known other than as a result
of a disclosure by Employee in breach of this Agreement. The phrase "publicly
known" shall mean readily accessible to the public, or others engaged in the
industry(ies) in which Company engages, in a written publication and shall not
include information which is only available by a substantial searching of the
published literature or information the substance of which must be pieced
together from a number of different publications and sources, or by focused
searches of literature guided by Confidential Information. The burden of proving
that information is not confidential or secret shall be on the party asserting
such exclusion. For purposes of this Agreement, the following definitions shall
apply: (a) "Company" shall be deemed to mean and refer to the entity named in
the first paragraph hereof; (b) "Parent" shall be deemed to mean and refer to
any corporation which, directly or indirectly, controls Company or the referred
to subsidiaries through ownership or control of at least 80% of the authorized,
issued and outstanding shares of the common voting stock of Company or each of
such subsidiaries; (c) the word "Affiliates" includes Company's Parent (if any)
and subsidiaries of Company or Company's Parent (if any). The obligations of
Employee as to paragraphs 3, 4, 5, 6 and 7 hereof shall apply to Company and its
Affiliates, in which case such Affiliates shall be deemed to be third party
beneficiaries of such paragraph. The obligations of Company under this Agreement
shall not apply to such Affiliates.
 
 
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4.            Covenants of Employee. As a consequence of Employee's acquisition
or anticipated acquisition of Confidential Information, Employee will occupy a
position of trust and confidence with respect to Company's affairs and business.
Employee acknowledges that Company's Confidential Information is/are valuable,
special and unique assets of Company, which Company uses in its business to
obtain competitive advantage over its competitors that do not know or use such
information. In view of the foregoing and of the consideration being provided to
Employee by Company for the execution of this Agreement, Employee agrees that it
is reasonable and necessary that Employee make the following covenants. Employee
does hereby covenant and agree as follows:
 
(a)           That he/she will at all times keep in strict confidence, and will
not, either directly or indirectly (other than in the regular course of
Company's business), copy, transfer, make known, divulge, reveal, furnish, make
available for use, disclose, publish, make available to others, misappropriate
or use, at any time, any of Company's Confidential Information; and
 
(b)          That he/she will safeguard all of Company's Confidential
Information at all times so that it, or any of it, is not exposed to, or taken
by, unauthorized persons, and Employee shall exercise his/her best efforts at
all times to assure such Confidential Information's safekeeping, confidentiality
and secrecy; and
 
(c)           That the prohibitions against Employee regarding Company's
Confidential Information contained in this paragraph 4, include but are not
limited to, disclosing the fact that any similarity exists between the
Confidential Information and information independently developed by any third
party, and Employee understands that such similarity does not excuse Employee
from abiding by his or her covenants or other obligations under this Agreement.
 
(d)           That the prohibitions against Employee's use, copying or transfer
of Confidential Information includes, but is not limited to, selling, licensing
or otherwise exploiting, directly or indirectly, any products or services
(including data bases, written documents and software in any form) which embody
or are derived from Confidential Information, or exercising judgment in
performing analyses based upon knowledge of Confidential Information.
 
(e)           That the certain Employment Agreement entered into by and between
Company and Employee (as of dates below) is incorporated herein and hereat by
reference for all pertinent purposes and such Employment Agreement and all of
its terms and provisions shall be ancillary to this Agreement and shall be
deemed a part hereof and shall be enforceable hereunder separate and distinct
from its enforceability as a separate agreement, e.g., it shall be enforceable
as a separate and distinct agreement as well as being enforceable as a part
hereof and shall be deemed to be ancillary to this Agreement.
 
5.            Return of Confidential Material. Employee shall turn over to
Company all originals and copies of materials containing Confidential
Information in the Employee's possession, custody, or control upon request or
upon termination of the Employee's employment with Company. Upon termination of
his/her employment with Company, Employee agrees to attend a termination
interview with one of Company's executive officers to confirm turnover of such
materials and to discuss any questions Employee may have about his/her
continuing obligations under this Agreement.
 
6.            Inventions. Any and all inventions, products, discoveries,
improvements, copyrightable works, trademarks, service marks, ideas, processes,
formulae, methods, designs, techniques or trade secrets (collectively
hereinafter referred to as "Inventions") made, developed, conceived or resulting
from work performed by Employee (alone or in conjunction with others, during
regular hours of work or otherwise) while Employee is employed by Company and
which may be directly or indirectly useful in, or related to, the business of
Company (including, without limitation, research and development activities of
Company), or which are made using any equipment, facilities, Confidential
Information, materials, labor, money, time or other resources of Company, shall
be promptly disclosed by Employee to one of Company's executive officers, and
shall be deemed Confidential Information for purposes of this Agreement, and
shall be Company's exclusive property. Employee shall, upon Company's request,
execute any documents and perform all such acts and things which are necessary
or advisable in the opinion of Company to cause issuance of patents to,
copyrights for, or otherwise obtain recorded protection of rights to
intellectual property for, Company with respect to Inventions that are to be
Company's property under this Section, or to transfer to and vest in Company
full and exclusive right, title and interest in and to such Inventions;
provided, however, that the expense of securing any such protection of right to
Inventions shall be borne by Company. In addition, Employee shall, at Company's
expense, assist Company in any proper manner in enforcing any inventions that
are to be or become Company's property hereunder against infringement by others.
Employee shall keep confidential and will hold for Company's sole use and
benefit any invention that is to be Company's exclusive property under this
Section for which full recorded protection of right has not been or cannot be
obtained.
 
 
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7.            Non-Interference With Company's Employees. During Employee's
employment with Company, and for a period of 18 months immediately following
Employee's termination (voluntary or otherwise), Employee shall not, directly or
indirectly: (a) induce, or aid others to induce, any Company employee to
terminate his or her employment with Company; (b) induce any Company employee to
do, or not do, as the case may be, anything which violates his/her oral or
written employment agreement with Company; (c) hire, attempt to hire, contact or
solicit with respect to hiring any employee of Company. Moreover, in recognition
of the status of the compensation and effectiveness of Company employees as
Confidential Information, Employee shall not solicit or aid others to solicit
Company employees for, or offer to them, competitive employment. Additionally,
Employee agrees not to interfere with the business of Company in any manner
including, without limitation, inducing any consultant or independent contractor
to terminate or modify such person's relationship with Company. For purposes of
this paragraph 7, "Employee" shall be deemed to mean agents, servants,
representatives and other individuals having an employer/employee relationship
with Company or who had such a relationship with Company within the 12 months
preceding the commencement of the restricted activities of Employee as stated
above.
 
8.            Consideration For This Agreement. In addition to the employment,
or continued employment, of the Employee by Company, and in addition to the
mutual covenants and promises of the parties contained herein, Company shall,
contemporaneous with the execution of this Agreement by Employee, or within
thirty days thereafter, pay to Employee additional and special consideration of
a one-time cash payment of $1,000.00 as additional and special consideration to
support the covenants and agreements of Employee contained herein. Such
$1,000.00 is paid for both this Agreement and the Confidentiality Agreement.
 
9.             Employee's Certification. Employee HEREBY CERTIFIES THAT:
 
(A)              
EMPLOYEE RECEIVED A COPY OF THIS AGREEMENT AND THE EMPLOYMENT AGREEMENT FOR
REVIEW AND STUDY BEFORE HE/SHE WAS ASKED TO EXECUTE THEM;

 
(B)               
EMPLOYEE HAS READ SUCH AGREEMENTS CAREFULLY;

 
(C)               
EMPLOYEE HAS HAD SUFFICIENT OPPORTUNITY BEFORE HE/SHE EXECUTED SUCH AGREEMENTS
TO ASK QUESTIONS ABOUT NOT ONLY COMPANY, BUT ALSO THE PROVISIONS OF SUCH
AGREEMENTS AND THAT IF HE/SHE ASKED SUCH QUESTIONS HE/SHE RECEIVED COMPLETE AND
SATISFACTORY ANSWERS TO SAME;

 
(D)               
EMPLOYEE HAS BEEN AFFORDED THE OPPORTUNITY TO DISCUSS AND REVIEW THIS AGREEMENT
AND THE EMPLOYMENT AGREEMENT WITH AN ATTORNEY OF HIS/HER CHOICE;

 
 
 
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(E)               
EMPLOYEE UNDERSTANDS WHAT HIS/HER RIGHTS ARE UNDER THE AGREEMENTS AS WELL AS
HIS/HER OBLIGATIONS, ESPECIALLY THE ANCILLARY COVENANTS; AND

 
(F)               
EMPLOYEE HAS READ AND UNDERSTANDS EACH AND EVERY PROVISION OF THE AGREEMENTS AND
DOES HEREBY ACCEPT AND AGREE TO THE SAME.

 
IN WITNESS WHEREOF, Employee herewith affixed his/her hand and Company has
caused this Agreement to be executed by a duly authorized officer, all on the
day and year below mentioned.
 

      Employee:            
Date: 07/24/00
   
/s/ Mark Hilz
 
 
   
Signature
           
 
   
Mark T. Hilz
 

      Printed Name                             Company:            
Date                
   
/s/ James H. Long
 
 
   
James H. Long,
Chairman Of The Board Of Directors
 

 
 
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