CONSULTING AGREEMENT
EXHIBIT
10.2
THIS
CONSULTING AGREEMENT (this “Agreement”) is entered as of April 28, 2008
by and between xXxxxx.xxx, Inc. and Alexander Adegan (each a
“Consultant” and together the “Consultants”) and U.S. Auto
Parts Network, Inc. (the “Company”).
RECITALS
The
Company desires to engage Consultants, as independent contractors, to perform
the services described in this Agreement and Consultants desire to perform
such
services for the Company and its customers and/or clients, in accordance
with
the terms and conditions set forth in this Agreement. This Agreement
is not an employment agreement, nor does there exist any intent between
the
Consultant and Company to create an employment relationship between the
Company
and Consultant’s employees.
AGREEMENT
NOW,
THEREFORE, in consideration of the mutual covenants and agreements contained
in
this Agreement, the parties agree as follows:
1. Consulting
Services. Consultants agree to provide technology development
services and such other services as may be agreed to by the parties hereto
(collectively, the “Consulting Services”). Consultants will
be available on a weekly basis for up to 10 hours per
week. Consultants shall utilize the highest professional standards of
practice in performing services for the Company. The Company shall
not dictate the work hours of Consultants and, except as otherwise specified
herein, shall not have the right to control the manner, means or method
by which
Consultants perform the Consulting Services. Rather, the Company
shall be entitled only to direct Consultants with respect to the results
to be
derived by the Consultants and the due dates for such results to be delivered
to
the Company. Consultants agree that Mr. Adegan shall be designated to
personally provide or oversee the services to be provided by the Consultants
under this Agreement.
2. Term. This
Agreement shall terminate on February 28, 2010, unless earlier terminated
by the
Company for Cause. “Cause” shall mean (i) the commission of
any act of fraud, embezzlement or dishonesty by one or both Consultants,
(ii)
the breach by one or both Consultants of any obligation under this Agreement,
including obligations relating to the Confidential Information (as defined
below), or (iii) any other misconduct by one or both Consultants adversely
affecting the business or affairs of the Company (or any affiliate) in
any
manner. Consultants’ obligations described in Sections 4 through 8
shall survive termination of this Agreement. In the event the applicable
circumstance set forth in subparagraphs (ii) or (iii) above is capable
of cure
by the Consultants, then the Company shall not terminate this Agreement
“with
cause” without having first given the Consultants written notice of the
circumstance, such notice stating details thereof and the Company’s allegation
of the Consultants breach with respect thereto and affording Consultants
ten
(10) business days after the Consultants receipt of such notice to cure
such
circumstance, breach or default.
3. Fees
and
Expenses.
(a) The
Company shall pay xXxxxx.xxx, Inc. (or Mr. Adegan, if so designated by
Mr.
Adegan or xXxxxx.xxx, Inc. by written notice to the Company) three initial
monthly fees of $45,000 on May 28, 2008, June 28, 2008 and July 28, 2008,
followed by equal monthly fees of $6,397 for 19 months starting on August
28,
2008 and ending on February 28, 2010.
(b) Subject
to approval of the Company’s board of directors or its Compensation Committee,
the Company shall grant to Mr. Adegan an option to purchase up to 120,000
shares
of the Company’s common stock under the Company’s 2007 Omnibus Incentive Plan
(the “2007 Plan”), which option shall be immediately exercisable but
shall vest in equal monthly installments over the next twenty-two (22)
months.
The exercise price of the Consultant’s options will be set at the closing price
of the Company’s common stock on NASDAQ on April 28, 2008. The vesting of such
options shall accelerate in full upon a Change in Control of the Company,
as
such term is defined in the 2007 Plan.
(c) The
Company shall pay or reimburse reasonable costs and expenses specifically
incurred by Consultants in providing the Consulting Services in accordance
with
the Company’s expense reimbursement guidelines. Any single expense
which will exceed $250.00 must be approved in advance by the Company’s Chief
Executive Officer, President or Chief Financial Officer, or the Company
may
elect at its sole discretion not to reimburse Consultants for that
expense. The Company owns all property and equipment for which
Consultants are reimbursed. The Company retains the right to
determine the reasonableness of any submitted expense and to deny unreasonable
expenses in its sole discretion. The Company will not reimburse
Consultants for basic office expenses including, but not limited to, a
laptop
computer, meals, office space, equipment, telephone, postage, copying,
stationery and business cards. Consultants agree to submit all bills
for Consulting Services monthly and all requests to reimburse expenses
within
thirty (30) days of incurring the expense.
4. Confidential
Information.
(a) Each
Consultant acknowledges that Consultant may acquire information and materials
about the Company, including but not limited to information about the Company’s
operations, services, computer programs, algorithms, application programming
interfaces, technology, ideas, know-how, processes, formulas, compositions,
data, techniques, improvements, inventions (whether patentable or not),
works of
authorship, business and product development plans, customers, customer
information, and other information concerning the Company’s actual or
anticipated business, or which is received in confidence by the Company
or for
the Company from any other person or entity, and that all such information
and
materials are and shall be the trade secret and confidential and proprietary
information of the Company (hereinafter referred to as “Confidential
Information”). At all times, both during the term of this
Agreement and after its termination, each Consultant, including all employees
of
such Consultant assigned to work on projects for the Company, will keep
in
confidence and trust and will not use any Confidential Information without
the
prior written consent of an officer of the Company except as may be necessary
and appropriate in the ordinary course of performing the Consulting Services
under this Agreement. Each Consultant acknowledges that any disclosure
or
unauthorized use of Confidential Information will constitute a material
breach
of this Agreement. Each Consultant hereby acknowledges and agrees that
all such
Confidential Information shall be the sole and exclusive property of the
Company. Confidential Information does not include information
that: (i) is now, or hereafter becomes, through no act or failure to
act on the part of one or both Consultants, generally known or available
to the
public; (ii) was known by the Consultants without restriction as to use
or
disclosure before receiving such information from the Company; or (iii)
is
hereafter rightfully furnished to Consultant on a non-confidential basis by
a third party.
(b) Mr.
Adegan acknowledges and agrees that the obligations under his Confidential
Information and Invention Assignment Agreement with the Company dated May
22,
2006 (the “Prior Confidentiality Agreement”) which are effective as of
the date of this Agreement shall remain in full force and effect in accordance
with its terms and shall not be deemed to be modified by this
Agreement.
5. Consultants’
Employees. Each Consultant agrees that every employee of Consultant
who works on projects for the Company or who has access to the Company’s
proprietary information, will execute the Company’s standard proprietary
information and inventions agreement, or a substantially similar document,
before having access to any of the Confidential Information.
6. Company
Materials. Each Consultant agrees as follows:
(a) All
Company Materials (as defined below) shall be the sole and exclusive property
of
the Company. Neither Consultant nor any of Consultant’s employees
will remove any Company Materials from the business premises of the Company
or
deliver any Company Materials to any person or entity outside the Company,
except as required in connection with performance of the Consulting Services
under this Agreement. Neither Consultant nor any of Consultant’s
employees will copy or download to any computer or other equipment owned
by
Consultant any Confidential Information unless prior written consent to
such
copying or downloading is obtained from the Company. Should the
Company authorize downloading or copying of Confidential Information to
Consultant’s computer systems or other equipment, such Consultant agrees and
warrants that such information will be kept in a separate file(s), segregated
from all other information belonging to Consultant or any other
entity. For purposes of this Agreement, “Company Materials”
are documents or other media or tangible items that contain or
embody
Confidential Information or any other information concerning the business,
operations or plans of the Company, whether such documents have been prepared
by
Consultant or by others. “Company Materials” include, but are not limited to,
software, code, drawings, photographs, charts, graphs, notebooks, customer
lists, computer media or printouts, sound recordings and other printed,
typewritten or handwritten documents, as well as samples, prototypes, models,
products and the like. For the purposes of this Agreement,
“Results” means any and all deliverables or results of the Consulting
Services including, without limitation, all Assigned Invention
Ideas.
(b) Upon
termination of this Agreement, Consultant will immediately erase all files
containing Company information in their entirety. Consultant further
agrees that, immediately upon the Company’s request and in any event upon
completion of the Consulting Services, Consultant shall deliver to the
Company
all Company Materials, any document or media that contains Results, apparatus,
equipment and other physical property or any reproduction of such property,
excepting only Consultant’s copy of this Agreement. In addition,
Consultant will remove from any equipment that belongs to Consultant, including
any computer or hard drive that belongs to Consultant, all Confidential
Information and will allow the Company to inspect all computers and hard
drives
used by Consultant to insure that all material has been removed.
7. Inventions. Each
Consultant further agrees as follows:
(a) Consultant
agrees to assign, and does hereby assign, to the Company without further
consideration all right, title, and interest that Consultant may acquire
(throughout the United States and in all foreign countries), free and clear
of
all liens and encumbrances, in and to each Assigned Invention Idea (as
defined
below), which was developed by Consultant specifically for the Company
pursuant
to this Agreement (such specific development to be evidenced by a writing
describing the Company’s development request and Consultant’s acceptance of such
request in writing, which may consist of electronic mail). All such
“Assigned Invention Ideas” shall be the sole property of the
Company, whether or not patentable. Without limiting the foregoing,
Consultant agrees that any such original works of authorship shall be deemed
to
be “works made for hire” and that the Company shall be deemed the author of them
under the U.S. Copyright Act (Title 17 of the U.S. code), provided that
in the
event and to the extent such works are determined not to constitute “works made
for hire” as a matter of law, Consultant irrevocably assigns and transfers to
the Company all right, title and interest in such works, including but
not
limited to copyrights. The term “Assigned Invention
Ideas” means any and all ideas, processes, trademarks, service marks,
inventions, technology, computer programs, original works of authorship,
designs, formulas, discoveries, patents, copyrights, and all improvements,
rights, and claims related to the foregoing that are conceived, developed,
or
reduced to practice or authored by Consultant or Consultant’s agents, employees,
or independent contractors, either solely or jointly with others, resulting
from
the work performed by Consultant under this Agreement or from the use of
proprietary information, materials or facilities of the Company during
the
period in which Consultant is retained by the Company or its successor
in
business, under this Agreement or any previous agreements or any extensions
or
renewals thereof. The Company acknowledges that Consultant previously disclosed
prior inventions to the company which Consultant claimed was created by
Consultant prior to the term of such Agreement and before the period of
employment of consultant as an employee of the Company prior hereto (“Prior
Invention”). In this regard, the Company agrees that the Prior
Invention, as well as any updates thereto, are not property of the Company
and
shall remain the sole and exclusive property of their owners.
(b) In
the
event any Assigned Invention Idea shall be determined by the Company to
be
patentable or otherwise registerable, Consultant will assist the Company
(at its
expense) in obtaining letters patent or other applicable registrations,
and
Consultant will execute all documents and do all other things (including
testifying at the Company’s expense) necessary or proper to obtain letters
patent or other applicable registrations and to vest the Company with full
title
to them. Consultant’s obligation to assist the Company in obtaining
and enforcing patents, registrations or other rights for such inventions,
shall
continue beyond the termination of the consulting and/or contracting
arrangement, but the Company shall compensate Consultant at a reasonable
rate
after such termination for the time actually spent by Consultant at the
Company’s request for such assistance. Should the Company be unable
to secure Consultant’s signature on any document necessary to apply for,
prosecute, obtain, or enforce any patent, copyright, or other right or
protection relating to any Assigned Invention Idea, Consultant hereby
irrevocably designates and appoints the Company and each of its duly authorized
officers and agents as Consultant’s agent and attorney-in-fact, to act on
Consultant’s behalf, to execute and file any such document, and to do all other
lawfully permitted acts to further the prosecution, issuance, and enforcement
of
patents, copyrights, or other rights of protections with the same force
and
effects as if executed and delivered by Consultant.
(c) Consultant
agrees to maintain adequate and current written records on the development
of
all Assigned Invention Ideas and to disclose promptly to the Company
all Assigned Invention Ideas and relevant records, which records will
remain the sole property of the Company.
8. Noncompetition. Mr.
Adegan agrees that, during the term of this Agreement, he shall not engage
in
any commercial activities or endeavors that are in direct competition with
the
Company. However, this section excludes the business of sourcing parts
for
repair facilities, mechanics, service-centers, collision-repair-centers
utilizing Consultants’ previously developed technologies and all of their
derivitives and enhancements.
9. Nonsolicitation. Each
Consultant agrees that during the term of this Agreement (and in any event
through the one year anniversary of the termination date of this Agreement),
such Consultant will not (a) directly or indirectly solicit, induce, encourage
or attempt to solicit or induce any Company employee to discontinue his
or her
employment with the Company; (b) usurp any opportunity of the Company that
such
Consultant becomes aware of during the term of this Agreement or which
is made
available to the Consultant on the basis of Consultant’s relationship with the
Company; or (c) directly or indirectly interfere with, solicit, induce
or
attempt to influence any person or business that is an account, customer
or
client of the Company for the purpose or with the result of adversely impacting
the Company’s relationship with the account, customer or client.
10. Independent
Contractor. Each Consultant agrees, acknowledges and understands
that:
(a) Consultant
shall act in the capacity of an independent contractor with respect to
the
Company. Consultant shall not have any authority to enter into
contracts or binding commitments in the name or on behalf of the
Company. Consultant will not use the Company’s logo or marks without
prior written approval, and then such use shall be only for the benefit
of the
Company and at the direction of the Company. Consultant shall not be,
nor represent itself as being, an agent of the Company, and shall not be,
nor
represent itself as being, authorized to bind the Company.
(b) Consultant
and its employees shall not be employees of the Company and shall not
participate in any employee benefit plans or group insurance plans or programs
(including, but not limited to salary, bonus or incentive plans, or plans
pertaining to retirement, deferred savings, disability, medical or dental)
regardless of whether Consultant or any of Consultant’s employees are classified
as an employee for any other purpose or is otherwise eligible to participate
pursuant to the terms of such plans. The exclusion of Consultant and
his employees, if any, from benefit programs maintained by the Company
is a
material component of the terms of compensation negotiated by the parties,
and
is not premised on Consultant’s status as a non-employee with respect to the
Company. Except for the stock option to be provided pursuant to
Section 3(b) or any other stock-based award specifically granted by the
Company’s board of directors or its Compensation Committee, to the extent that
Consultant may become eligible for any benefit programs maintained by the
Company (regardless of timing or reason for eligibility), Consultant hereby
waives his right to participate in the programs and will indemnify and
hold the
Company harmless from any claim by Consultant or any of Consultant’s employees
against the Company for benefits pursuant to any of the Company’s employee
benefit plans.
(c) Consultant
understands and agrees that consistent with his independent contractor
status,
neither he nor his employees, if any, will apply for any government-sponsored
benefits intended only for employees of the Company, including, but not
limited
to, unemployment benefits and all such benefits will be provided solely
by or
through Consultant. Consultant is solely responsible for all taxes,
withholdings, and other similar statutory obligations, including, but not
limited to, Workers’ Compensation, Unemployment or State Disability Insurance
for Consultant and/or his employees; and Consultant agrees to defend, indemnify
and hold Company harmless from any and all claims made by any entity on
account
of an alleged failure by Consultant to satisfy any such tax or withholding
obligations.
11. Consultant’s
Representations. Each Consultant agrees, represents and warrants
that:
(a) Consultant’s
performance of the Consulting Services or of any term of this Agreement
will not
breach any agreement or understanding that Consultant has with any other
person
or entity and that there is no other contract or duty now in existence
inconsistent with the terms of this Agreement;
(b) During
the term of this Agreement, Consultant shall not be bound by any agreement,
nor
assume any obligation, which would in any way be inconsistent with the
Consulting Services to be performed by Consultant under this
Agreement;
(c) In
performing the Consulting Services, Consultant will not use any confidential
or
proprietary information of any other person or entity or infringe the
intellectual property rights (including, without limitation, patent, copyright,
trademark or trade secret rights) of any other person or entity nor will
Consultant disclose to the Company, or bring onto the Company’s premises, or
induce the Company to use any confidential information of any person or
entity
other than the Company or Consultant;
(d) During
the term of this Agreement, Consultant will not disclose to the Company,
or use,
or induce the Company to use, any proprietary information or trade secrets
of
others. Consultant represents and warrants that Consultant has
returned all property and confidential information belonging to all prior
entities for whom Consultant has provided services, including, without
limitation, all files, records, documents, laboratory notebooks, drawings,
prototypes, plans, specifications, computer disks, sources codes, manuals,
books, forms, receipts, notes, reports, memoranda, studies, data, calculations,
recordings, catalogues, compilations of information, correspondence, and
all
copies, abstracts, and summaries of the foregoing, instruments, tools,
and
equipment, and all other physical items related to the business of the
prior
entities. Consultant further represents and warrants that
Consultant’s performance of the terms of this Agreement will not breach any
agreement to keep in confidence proprietary information acquired by Consultant
in confidence or in trust prior to or concurrent with this Agreement with
the
Company. Consultant has not entered into, and agrees not to enter
into, any oral or written agreement in conflict with this one;
(e) Consultant
will abide by all applicable laws and the Company’s safety rules in the course
of performing the Consulting Services; and
(f) Consultant
will not use or retain any other individual(s) or employee(s) in performing
services for the Company except in compliance with all of the following
conditions:
(i) All
individual(s) or employees used have acknowledged, in writing, that they
are not
employees, agents or subcontractors of the Company for any
purpose. Consultant hereby assumes full responsibility for all
actions of all such individuals, and agrees to indemnify and hold the Company
harmless from any and all claims by such individuals, by Consultant or
by any
federal state or local government agency relating to services performed
in
conjunction with this Agreement.
(ii) Consultant
agrees and assumes full liability and responsibility for payment of
compensation, taxes and other legal obligations (including, but not limited
to,
withholding, reporting of income, social security, unemployment and workers’
compensation). Consultant agrees to indemnify and hold the Company
harmless from any claims by federal, state or local government entities
or
agencies relating to the payment of compensation, taxes, unemployment
contributions, tax withholding, insurance or other legal obligations arising
out
of or relating to services performed under this Agreement.
(iii) All
individual(s) or employees have signed a standard proprietary information
agreement and inventions agreement of the Company, or a substantially similar
document.
12. Indemnification. Consultants
will jointly defend, indemnify and hold the Company harmless against any
and all
losses, liabilities, damages, claims, demands, suits, costs and expenses
(including, without limitation, reasonable attorneys’ fees and court costs)
arising or resulting, directly or indirectly, from (a) any act or omission
of a
Consultant or a Consultant’s breach of any term or condition of this Agreement,
or (b) infringement by a Consultant’s performance of the Consulting Services of
any third party intellectual property rights or (c) any failure (alleged
or
actual) by a Consultant to satisfy any of tax or withholding obligations
resulting from his services to the Company.
13. Miscellaneous
Provisions.
(a) Any
dispute in the meaning, effect or validity of this Agreement shall be resolved
in accordance with the laws of the State of California without regard to
the
conflict of laws provisions thereof. All parties hereto further agree
that any dispute between them may be determined only by a state or federal
court
of competent jurisdiction in Los Angeles County, California, and all parties
hereby consent to venue and jurisdiction in that forum, based on the fact
that
this Agreement has been made and executed in that county, and will be at
least
partially performed there.
(b) If
one or
more provisions of this Agreement are held to be illegal or unenforceable,
such
illegal or unenforceable portion(s) shall be limited or excluded from this
Agreement to the minimum extent required and the balance of the Agreement
shall
be interpreted as if such portion(s) were so limited or excluded and shall
be
enforceable in accordance with its terms.
(c) This
Agreement shall be binding upon, and inure to the benefit of, the parties
hereto
and their respective heirs, successors and assigns; provided, however,
that this
Agreement and its rights and obligations are not assignable by Consultants
without the Company’s prior written consent.
(d) Any
notice required under this Agreement shall be deemed effectively given
(i) upon
personal delivery to the party to be notified, (ii) when sent by confirmed
facsimile or electronic mail if sent during normal business hours of the
recipient (if not sent during normal business hours, then on the next business
day), (iii) three (3) days after having been sent by registered or certified
mail, return receipt requested, postage prepaid, if sent within the United
States (but seven (7) days after having been sent by similar mail service
if
sent from, or to, an address outside the United States) or (iv) one (1)
day
after deposit with a nationally recognized overnight courier, specifying
next
day delivery, with written verification of receipt. All such notices
shall be sent to the party entitled to such notice at the address indicated
below such party’s signature line on this Agreement or at such other address as
such party may designate by ten (10) days advance written notice under
this
section to all other parties to this Agreement.
(e) This
Agreement contains the entire understanding of the parties regarding its
subject
matter and supersedes all prior understandings or agreements between the
parties
with regard to its subject matter, except with respect to agreements
incorporated by reference in this Agreement or specifically deemed not
to be
modified by this Agreement (including the Prior Confidentiality
Agreement). This Agreement can only be modified by a subsequent
written agreement executed by both parties.
(f) This
Agreement may be signed in counterparts, each of which shall be deemed
an
original.
[Signature
Page Follows]
IN
WITNESS WHEREOF, this Consulting Agreement is entered into on the date first
set
forth above.
|
COMPANY:
|
CONSULTANTS:
|
| U.S. Auto Parts Network, Inc. | Alexander Adegan |
| By: /s/XXXXXXX X. XxXXXXX | By: /s/ALEXANDER ADEGAN |
| Name: Xxxxxxx X. XxXxxxx | Address: ********************** |
| Title: Chief Financial Officer |
Fax
No.:
**********
|
| E-mail: ********** | |
| xXxxxx.xxx, Inc. | |
| By: /s/ALEXANDER ADEGAN | |
| Title: President & C.E.O | |
| Address: ************************ | |
| Fax No.: ************ | |
| Email: ************ | |
