as of July 1, 1997
Xx. Xxxxxx X. Xxxxxxx
00 Xxxxx Xxxxx
Xxxx, Xxxxxxxxxxxxx 00000
CONSULTING AGREEMENT ("AGREEMENT")
Dear Xx. Xxxxxxx:
This letter, when signed by you, will confirm, and set forth the terms of, the
agreement between Xxxxxxx Radio Corp. ("Xxxxxxx" or "the Company") and you,
effective as of July 1, 1997 ("effective date"), regarding the services you
shall be performing for Xxxxxxx. Accordingly, in consideration of the mutual
covenants and agreements contained herein and for other good and valuable
consideration, Xxxxxxx and you mutually agree as follows:
1. Xxxxxxx engages you as a non-exclusive independent contractor to provide
consulting services for the design, development, specification and marketing of
products employing the proprietary technology ("Licensed Technology") to which
Xxxxxxx has secured rights under the licensing agreement with REP Investment
LLC, made as of August 23, 1996 ("License Agreement"). You agree to devote your
best efforts, skills, abilities and such time as is necessary for the successful
performance of the services as hereinafter defined, subject to the provisions
set forth in this Agreement.
2. The objectives of the work to be performed shall be for you to assist
Xxxxxxx and Emerson's engineering-manufacturing vendor personnel in establishing
a profitable high-growth new business venture based on the Licensed Technology
and to (1) devise variations of the Micro-10 product to prevent early saturation
of sales by expanding into diverse markets, and (2) facilitate development of a
comprehensive matrix of products, based on the Licensed Technology, to build and
grow a profitable business over a multi-year horizon. Your duties shall
include, but not be limited to, the following:
A. Advise and assist Xxxxxxx'x CinemaSurround(Trademark) product
line manager (presently Xxxx Xxxxxxxx, Vice President - Product Development
of Xxxxxxx Radio Consumer Products Corporation) in matters relating to
audio technology, engineering application and product design and
evaluation, working in collaboration with Xxxxxxx'x designated engineering-
manufacturing vendor(s) (presently known to be ATLM). Such duties may
include on-site consulting at Xxxxxxx'x, or its vendor's(s'), engineering-
production facilities, including those in the Far East.
B. Provide general technical support, product line conceptual
design, feature and benefit recommendations, application engineering
assistance, prototype evaluation and trouble shooting, design defect
identification and product improvement design recommendations.
It is understood by the parties that the services to be provided under this
agreement are to be performed as needed by the market and development status of
the Licensed Technology and, therefore, shall not generally be delivered
uniformly over time. Periods of both high and low demands are anticipated.
However, it is agreed that generally you shall provide the services on an
average of three (3) days per week. Moreover, notwithstanding any provision of
this Agreement to the contrary, you shall not be required to provide services on
more than one hundred fifty-six (156) days, with not more than twenty (20) days
outside the continental United States, during the term of this Agreement.
Travel time and time spent in preparing reports shall be included for purposes
of such time limits.
All services to be provided under this agreement are collectively referred to
hereinafter as "Services".
3. You represent that to the best of your knowledge you are not aware of any
certificates or licenses which you are required to obtain in order to perform
the Services. You agree that you will use reasonable efforts to keep current on
any such requirements and will so comply when, and if, necessary. You also
agree to comply with all applicable International, Federal, State and Local
laws, rules and regulations of which you are aware, in performing the Services,
and to confirm such compliance upon request by Xxxxxxx. You further warrant
that in performing your Services you shall not violate or in any way infringe
upon any third party's property, contractual, employment, trade secrets,
proprietary information, non-disclosure, trademark, copyright or patent rights
of which you have knowledge.
4. In the performance of your Services, you shall cooperate fully with all
officers, employees and agents of Xxxxxxx as Xxxxxxx'x Chief Executive Officer,
Board of Directors, President of Xxxxxxx Radio Consumer Products Corporation or
Vice President - Product Development of Xxxxxxx Radio Consumer Products
Corporation may direct. Xxxxxxx shall designate from time to time a
representative to serve as your primary contact with Xxxxxxx. You may rely upon
any instructions or information given to you by such representative. In the
event you receive any conflicting instructions or information given by such
representative, officers, employees or agents of Xxxxxxx, you shall advise such
representative of the conflict and such representative shall resolve same
internally with the Company and advise you of the final instructions. The
representative initially designated by Xxxxxxx is Xxxx Xxxxxxxx, Vice President-
Product Development of Xxxxxxx Radio Consumer Products Corporation. The
representative may be changed from time to time by written notice to you from
the Chairman of the Board of Directors of Xxxxxxx or the President of Xxxxxxx
Radio Consumer Products Corporation.
5. You agree that the relationship between you and Xxxxxxx under this
Agreement is one of independent contractor. In performance of the Services, you
shall have no authority, and shall not represent or hold yourself out as having
such authority, to enter into any agreement on behalf of Xxxxxxx or bind or
commit Xxxxxxx in any way unless otherwise agreed to in writing between Xxxxxxx
and you. Your engagement under this agreement is limited solely to providing
the Services as set forth herein. Since you are not an employee, you shall not
be entitled to receive any employee benefits or be entitled to participate in
any medical, health or other plan available to employees of the Company.
6. The term of this agreement commenced as of July 1, 1997 and it shall be in
full force and effect for a period of one year (1) from the effective date.
During the six (6) month period commencing as of the effective date of this
agreement, either party may terminate this agreement if the other party breaches
this agreement and such breach is not cured within thirty (30) days after
written notice and demand. After such six (6) month period, either party may
terminate this agreement at any time for any reason or no reason upon giving the
other party thirty (30) days' prior written notice. Upon expiration or
termination of this agreement, you shall promptly return to Xxxxxxx all
inventory, reports, documents, catalogs, literature, materials and tangible
property (whether in electronic, paper or any other format or medium) supplied
by Xxxxxxx or created or supplied by you or third parties arising from the
Services and any other confidential information in your possession, custody or
control related to the Services. Xxxxxxxxxx 0, 0X, 0X, 0X, 0X, 0, 00, 16, 17,
19, 20 and 22 shall survive any termination or expiration of this agreement.
7. [redacted]
8. You represent that you are not subject to any restrictions (contractual or
otherwise) which prevent you from accepting this engagement. You covenant and
agree that, provided Xxxxxxx is not in default under the terms of this
agreement, for the period you are receiving payments under Paragraph 7.A, you
shall not render any services to any third parties which would conflict with any
of your responsibilities hereunder or create a conflict of interest. In
addition, for the period you are receiving payments as set forth in Paragraph
7.A, you also agree that you shall not represent, consult to, or become a
principal or owner in any entity attempting to develop or sell products
incorporating the Licensed Technology, whether directly or indirectly, alone or
as a member of a partnership or as an officer or stockholder of any corporation
or as an employee or agent thereof be engaged in or concerned with any business
engaged in such activities during such period, in any such case without
Xxxxxxx'x prior written approval. Your interest in REP Investment Limited
Liability Company, your representation of its interests under the License
Agreement and your supervision of its activities shall not be deemed to conflict
with your obligations under this Agreement.
9. You shall use diligent efforts to perform the Services in accordance with
prevailing industry standards and you agree to indemnify, defend and hold
Xxxxxxx harmless from and against all demands, claims, damages, losses and
defenses (including reasonable costs, fees of attorneys, accountants and expert
witnesses) arising out of or resulting from your performance of, or omission to
perform, the Services due to gross negligence or willful misconduct. No
settlement shall be made without Xxxxxxx'x prior written consent. Xxxxxxx
acknowledges that you are not warranting the achievement of any particular
results.
Xxxxxxx agrees to indemnify, defend and hold you harmless from and against
all demands, claims, damages, losses and defenses (including reasonable costs,
fees of attorneys, accountants and expert witnesses) for any claims arising out
of or resulting from the Services other than those based upon your gross
negligence or willful misconduct.
10. In the event any provisions contained in the License Agreement with respect
to rights to, or obligations in respect of, the Licensed Technology are
inconsistent with the provisions of this agreement, the terms of the License
Agreement shall govern.
11. This agreement is the complete agreement between the parties regarding the
Services. This agreement may not be changed orally but only by an agreement in
writing, signed by the party against whom enforcement of any waiver, change,
modification or discharge is sought.
12. The failure of either party to insist upon strict compliance with any of
the terms, covenants or conditions hereof shall not be deemed a waiver of such
terms, covenants or conditions, nor shall any waiver or relinquishment of any
right or power hereunder at any one time or more times be deemed a waiver or
relinquishment of such right or power at any other time or times.
13. The invalidity or unenforceability of any provision of this agreement shall
in no way affect the validity or enforceability of any other provisions.
14. Any notice or process shall be in writing and shall be deemed to have been
duly given to you if the same is 1.) delivered personally; 2.) received by
overnight delivery service; 3.) received by registered or certified mail, return
receipt requested; or, 4.) received by facsimile, with a copy to Jaffe, Raitt,
Heuer & Xxxxx, Professional Corporation, Xxx Xxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx
00000, Attention Xxxx X. Xxxxxx, to the location set forth above or to such
other location as you may designate by a notice given in like manner. In the
case of notice or service of process to Xxxxxxx, it shall be duly given if same
is 1.) delivered personally; 2.) received by overnight delivery service; 3.)
received by registered or certified mail, return receipt requested; or 4.)
received by facsimile, to the President, Xxxxxxx Radio Consumer Products
Corporation, with a copy to the Company's Law Department, at Nine Xxxxx Xxxx,
Xxxxxxxxxx, Xxx Xxxxxx 00000 or to such other location as it may designate by a
notice given in like manner. Notices by counsel on behalf of a party shall be
effective as if given by the party.
15. This agreement shall be binding upon and inure to the benefit of the
parties, their heirs, legal representatives, successors and assigns.
16. This agreement shall be deemed to have been made, executed and delivered in
and shall be governed by and enforced in accordance with the laws of, the State
of New Jersey, United States of America. Any controversy or claim arising out of
or relating to this contract, or the breach thereof, shall be governed by and
enforced in accordance with the laws of the State of New Jersey regardless of
the choice of law rules and conflict of law principles. Any dispute arising as
to the legal nature of this agreement shall be settled in the courts of the
State of New Jersey, in Xxxxxx County, which shall have exclusive jurisdiction
over all controversies that may arise under or in relation to this Agreement,
especially with respect to its validity, execution, interpretation, enforcement,
or compliance, the parties hereby consenting to service, jurisdiction, and venue
of such courts for any litigation arising from this agreement and waiving any
other venue to which they may be entitled to by virtue of domicile, residence,
or otherwise.
17. The Company may periodically request various reports from you on the
Services during the term of this Agreement. You agree to submit the reports
within the specified time provided by Xxxxxxx, which timing shall be reasonable.
You also agree to keep and maintain all records of your Services for not less
than six (6) years following expiration or earlier termination, as provided
herein, of this agreement and to permit any duly authorized employee, agent or
representative of the Company to inspect and copy any and all such books and
records upon telephone notice.
18. This agreement is non-assignable unless agreed to in writing by the
parties.
19. You shall use your own name in all dealings and may not use any trademarks
or tradenames or rights to use same belonging to the Company and/or its
subsidiaries or affiliates ("Brand Names and Marks") without the Company's prior
written consent in each instance. To the extent the Company gives such consent,
you may use such trademarks only in connection with the performance of its
Services. The Company may withdraw such consent at anytime. Thereafter, no
advertising or other use of the Brand Names and Marks may be made by you without
the Company's prior written approval in each instance. All use of the Brand
Names and Marks and all goodwill associated therewith shall inure to the benefit
of the Company. You shall have no interest in or rights to the Brand Names or
Marks or any of them nor shall you have or accrue any interest in or to the
goodwill associated therewith. Upon expiration or earlier termination of this
agreement, you shall discontinue all use of the Brand Names or Marks in
advertising or otherwise, and shall remove all signs and displays relating
thereto and shall return to the Company at the Company's expense, all signs,
displays and other writings and materials relating thereto. You are not and
this agreement does not constitute you as being a holder of a license or permit
to use the Brand Names or Marks nor shall this Agreement be deemed to make you a
franchisee.
20. All ideas, written materials, and other developments or improvements
conceived by you, alone or with others, during the term of this agreement, that
are within the scope of the Services of this agreement and are for the Company,
are the exclusive property of the Company, subject to the terms of the License
Agreement. You agree to use reasonable efforts to assist the Company, at its
expense, to obtain copyrights or any other applicable proprietary rights
("rights") on any such ideas, written materials, and other developments, and you
agree to execute such documents and to take such actions at no cost to you as
the Company may reasonably request in order to obtain such rights in its name.
Nothing in this Paragraph 20 or elsewhere in this Agreement shall affect the
rights of REP Investment Limited Liability Company under the License Agreement.
21. This agreement and the rights and obligations hereunder do not and shall
not confer any rights to any third parties and no third parties shall have any
rights under this Agreement.
22. During the course of your engagement, you will have access to confidential
information relating to the business, methods and practices of the Company,
including its rights to and efforts to sell, products with the Licensed
Technology, its plans for new products, its pricing policies, and its
relationships with vendors, accounts, customers, employees, etc. You
acknowledge that all the foregoing is confidential and that disclosure or
threatened disclosure of any of such confidential and proprietary information
would have a material adverse effect upon the business and prospects of the
Company. Accordingly, you agree to keep confidential and not to disclose all or
any part of the foregoing information. Should you violate or threaten to
violate the terms of this paragraph or those of paragraphs 5, 19 and 20, you
acknowledge that the Company could be irreparably injured and that it will not
have an adequate remedy at law. Accordingly, you agree that in any such event,
the Company may seek and obtain a temporary restraining order, injunction or
other appropriate equitable relief without proof of actual damages or the
posting of a bond or other security.
If the above terms conform with your understanding, kindly sign this letter
in the appropriate space below.
Very truly yours,
Xxxxxxx Radio Consumer Products Corporation
by: /s/ Xxxxxx Xxxxxxxx
President
Acknowledged, agreed and accepted
this 16th day of October, 1997 Xxxxxxx Radio Corp.
by: /s/ Xxxxxxxxx X. Xxxxxxxxx
/s/ Xxxxxx X. Xxxxxxx Vice President
Xxxxxx X. Xxxxxxx
