Exhibit 10.2
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CONSULTING SERVICES AGREEMENT
THIS AGREEMENT entered into as of the 2nd day of November, 1998, by and between
AM Communications, Inc., a Delaware corporation, having its principal address at
000 Xxxxxxxx Xxxxxxxxx, Xxxxxxxxxx, XX 00000-0000 ("AM" or "Company") and
Network Systems and Technologies (P) Ltd. ("NeST"), having its principal address
in Trivandrum, India.
WHEREAS, NeST desires to provide and AM desires to obtain from time to time
certain technical services; and
WHEREAS, the parties intend that this Agreement shall constitute a basic
agreement the terms and conditions of which shall apply to each Task Order
issued by Company and accepted by NeST.
NOW THEREFORE, in consideration of the mutual covenants and premises contained
herein and the compensation to be paid by AM to NeST hereunder, the parties
hereto convenant and agree as follows:
1. DEFINITIONS
As used in this Agreement and all Task Orders, the terms set forth in this
Section 1 shall have those meanings indicated below or in the referenced
Section.
Consultant-An individual employee (or independent contractor) of NeST who
performs services for Company pursuant to this Agreement and any related
Task Order.
Disclosed Information - Section 5.1
Discloser - Section 5.1
Key Consultant - Section 2.4
NeST Materials - Section 5.2
Task Order - Section 2.2
Work Product - Section 5.2
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2. SERVICES
2.1 Services Provided. NeST agrees to provide to AM under the terms and
conditions of this Agreement technical engineering services including
hardware and software design. Said services shall be provided in
accordance with Task Orders which reference this Agreement, are issued
from time to time by Company to NeST, and are accepted by NeST. The
parties anticipate that certain Task Orders will be issued as set out in
Schedule A. NeST agrees to have sufficient resources available to perform
the anticipated Task Orders set out in Schedule A.
2.2 Task Orders.
(a) Each Task Order shall be governed by the terms and conditions of this
Agreement and the terms and conditions of the Task Order. In the event of
a conflict between the terms and conditions of this Agreement and the
terms and conditions of any Task Order, the terms and conditions of the
Task Order shall govern and Supersede those of this Agreement with
respect to that Task order only.
(b) NeST acknowledges AM's right to make Task Orders subject to (i) NeST's
right to refuse to accept (in writing within five (5) business days
following its receipt of Company's proposed changes) material changes,
and (ii) the parties agreeing on appropriate increases or decreases to
the charges under the applicable Task Order for material changes.
(c) Company may terminate any Task Order for convenience at any time by
giving NeST prior written notice. Upon its receipt of such notice of
termination, NeST will immediately discontinue all further services on
behalf of Company under the applicable Task Order and will use reasonable
efforts to mitigate all costs to Company from that date forward. In no
event shall Company be required to pay for any consulting fees incurred
beyond a date which is (5) business days following NeST's receipt of such
notice.
2.3 Time and Place. The parties hereto will perform their respective
obligations hereunder in accordance with the time schedule set out in
each Task Order. TIME IS OF THE ESSENCE. Notwithstanding the foregoing
two sentences, neither party shall be deemed to have breached the
provisions of this Section 2.3 for any reasonable delay due to the
prolonged incapacitation of a Key Consultant or delays which are caused
solely by Company.
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2.4 Key Consultants. The Key Consultants of NeST who will provide programme
management services will be designated as "Key Consultants" in each Task
Order. Unless they cease to be directly or indirectly employed or
retained by NeST, these Key Consultants shall not be replaced by NeST for
services designated under the applicable Task Order without Company's
prior approval, not to be unreasonably withheld. In the event of
prolonged illness, resignation, discharge for cause or other causes
beyond NeST's control, a Key Consultant may be replaced by another person
of equal expertise, competence and level, and said replacement by NeST
shall be made within a reasonably feasible time following reasonable
knowledge by NeST of the necessity for such replacement.
2.5 Termination of Consultants by Company NeST shall immediately reassign any
Consultant with whom Company, in its sole opinion, is dissatisfied for
any reason.
2.6 Tools NeST shall provide at its expense all working space, tools and
other items as it considers appropriate for the services to be performed
at its location in India. AM will provide the same for any work done at
its facility in Quakertown.
2.7 Relationship Manager. Each party shall assign one individual as
relationship manager who shall be the primary liaison between the parties
during the terms of this Agreement. The NeST relationship manager shall
be located at the AM facility.
2.8 Progess Reports. NeST shall prepare reports on the first and fifteenth
day of each calendar month (or such times as may be mutually agreed upon
by the parties) during the Term of any Task Order. The progress reports
shall address the following primary areas: (i) work accomplished during
the period covered by the report, (ii) new problems encountered during
the period covered by the report and solutions effected or recommended,
(iii) work schedule for the period to be covered by the next report, (iv)
old problems that have been resolved and old problems that have not been
resolved and the anticipated date of resolution, (v) status of the
project relative to the Time Schedule, and (vi) the amount of permissible
expenses for reimbursement for the preceding period and the aggregate
total of the reimbursable expenses to the date of the report.
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2.9 Consultant Standards.
(a) NeST represents and warrants that its consultants will be of a high
caliber and will meet the highest professional standards for the type of
work assigned to such Consultant hereunder. NeST further represents,
warrants and covenants that the services performed by each Consultant
will be reasonably acceptable to Company.
(b) Any services performed by Consultants under proper technical direction by
NeST which are determined by Company to be of a caliber below that
warranted by NeST pursuant to Section 2.9 (a) above, shall be corrected
by NeST without charge to Company provided that Company informs NeST
thereof within three (3) months of the time it knew of such below
warranted caliber services.
3. COMPENSATION
3.1 Payments by AM for the NeST engineering services shall be based on the
rate of $20.00 per hour based on the number of hours incurred on each
specific Task Order. NeST shall be responsible for paying all expenses
related to consultants. NeST shall invoice AM monthly for services
performed. NeST is responsible for any and all taxes applicable to this
Agreement or which are measured by payments made under it.
3.2 AM shall pay invoices within thirty (30) days of receipt. Upon
termination of this Agreement for any reason, any compensation accrued
but unpaid at the time of termination shall be paid in accordance with
this Section.
3.3 In lieu of making cash payments on invoices, AM shall have the right to
make payment against invoices by issuing warrants to purchase AM common
stock under the following terms:
(a) The purchase price of warrants to be issued shall be $.01 per share.
(b) The number of the shares of AM Common Stock which warrants shall be
entitled to purchase shall be based on the invoice value of the services
performed divided by AM per share price based on the 30 days average
(based on average of bid and ask price) of the AM stock during the
respective month in which the services were performed.
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(c) warrants shall be exercisable for a period of five (5) years after
issuance.
(d) The maximum number of shares represented by warrants shall not exceed 10
million shares.
3.4 The terms of the warrants shall be outlined in a separate warrant
agreement to be negotiated between the parties.
4. TERM
4.1 Term of Agreement. The term of this Agreement shall commence on the date
of execution of this Agreement and shall continue until all Task Orders
issued by Company prior to termination as provided in the immediately
following sentence have expired by their terms. This Agreement may be
terminated by either party upon ninety (90) days prior written notice to
the other.
4.2 Termination for Default. Company shall have the right to immediately
terminate this Agreement and / or any Task Order in the event the
occurrence of any one of the following is not remedied within thirty (30)
days of receipt of written notice; (I) NeST neglects or fails to perform
or observe any of its obligations hereunder orb pursuant to any other
Agreement with Company, or (ii) if any assignment is made of NeST's
business for the benefit of creditors, or if a petition in bankruptcy is
filed by or against NeST, or if a receiver, trustee in bankruptcy or
similar officer is appointed to take charge of all part of its property
or if NeST is adjudicated as bankrupt.
5. CONFIDENTIALITY AND PROPRIETARY RIGHTS
5.1 The parties agree to abide by the Mutual Confidentiality Agreement
attached as Schedule C.
5.2 Assignment of Work Product.
(a) NeST agrees that all inventions, improvement, discoveries, or
developments including, but not limited to, computer software authored by
NeST ("Work Product") which NeST may make or conceive during the term
hereof and for one (1) year thereafter, either solely or jointly with
others, whether arising from NeST's own efforts or suggestions received
from any other source, which arise out of the services provided pursuant
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to this Agreement or exposure to Disclosed Information, are a work make
for hire and are the exclusive property of Company free from any claim or
retention of rights thereto on the part of NeST (including for the
purposes of copyright). In addition to the immediately preceding sentence
and other than where the Work Product is considered a work made for hire.
NeST farther agrees to (and, as appropriate, will in the future), and
here does, grant, convey and assign to Company absolutely and exclusively
all such Work Product and all intellectual property rights therein.
(b) NeST agrees to fully disclose all Work Product to Company.
(c) NeST agrees that at the request and expense of Company and without charge
or compensation beyond the charges provided pursuant to this Agreement,
to execute all instruments and documents and to do all things which may
be reasonably necessary to protect the rights of Company and vest in it
and its assigns all such Work Product and all intellectual property
rights therein.
(d) NeST may identify portions of the Work Product as proprietary to NeST at
the time of delivery of the Work Product to Company, if those portions
pre-existed this agreement ("NeST Materials"). The parties agree that the
NeST Materials will remain the property of NeST, but Company is hereby
granted a permanent, non-revocable, non-exclusive, royalty free license
with the right to sublicense to make, have made, use, sell, reproduce,
distribute, perform, display and prepare derivative works of NeST
Materials.
5.3 Consultant Confidentiality Agreements. NeST represents and warrants that
NeST has appropriate agreements with its employees and / or any
Consultant to whom Disclosed Information may be disclosed, or others
whose services it may require, sufficient to enable it to comply with all
of the terms of this Agreement.
5.4 Standard of Care. In connection with NeST's obligations hereunder, NeST
agrees to use the standard of care, which is consistent with the highest
industry standards in continuously controlling the use and disclosure of
Disclosed Information in a manner that fully protects Company's rights
therein.
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5.5 Representations, Warranties, Covenants and Indemnities.
(a) NeST represents, warrants and covenants that all Work Product is original
to NeST, that NeST is the sole creator of the Work Products, that no Work
Product has been published; that NeST has not made any commitment for the
use or publication of the Work Product; and that no such Work Product nor
the use thereof does or will violate or infringe upon any patent,
copyright, trademark, trade secret or other property right of any other
person, whether or not similar to any of the foregoing, nor entitle any
third party to make a claim against Company for the unlawful use of
confidential information or trade secrets. NeST further represents and
warrants that the Work Product contains no matter which is libelous or
otherwise contrary to law. NeST agrees that NeST will indemnify and hold
Company harmless from any and all losses, costs, claims, demands,
expenses (including attorney's fees), and liabilities whatsoever arising
from its breach of any warranty or any misrepresentation with respect to
the provisions of this Section 5.5, and at NeST's own expense will defend
with legal counsel acceptable to Company, or, Company, at its option, may
defend with its legal counsel at its cost and NeST will assist in such
defense, providing, however, that NeST has received reasonably prompt
notice of any matter of which Company has knowledge which gives rise to a
right of indemnity hereunder. During the pendency of any claim against
NeST with respect to infringement, Company may withhold payment of any
sums otherwise required to be paid hereunder.
(b) If, in any suit such work or any portion thereof is held to constitute
any infringement and its use enjoined, NeST will, at its sole cost,
undertake one of the following courses of action; (i) procure the right
to continue to use such work or such infringing portion, (ii) upon the
consent of Company, modify such work or such infringing portion to render
it non-infringing, or (iii) upon the consent of Company replace such work
or such infringing portion with a non-infringing replacement.
5.6 Survival. The provisions of this Section 5 and all subsections thereunder
shall survive the completion and any termination or expiration of any
Task Order or this Agreement.
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6. EMPLOYEES
6.1 Non-Solicitation of Employees. NeST agrees that without the prior written
content of Company, it will not hire or cause to be hired or induce any
of Company's employees who are assigned full or part time to any endeavor
related to a Task Order to leave his / her employment from the expiration
of said Task Order through a date two (2) years thereafter.
7. INSURANCE AND INDEMNITIES
7.1 Insurance for NeST and Consultants. NeST represents, warrants and
covenants that during the term of this Agreement, NeST will maintain at
NeST's expense all the necessary insurance for NeST and Consultants,
including but not limited to workmen's, compensation, disability, and
unemployment insurance, and to provide Company with certification thereof
upon request. NeST agrees to indemnify and hold harmless Company and its
employees from any and all loss, costs, damages, expenses and liabilities
(including attorney's fees), arising as a result of the breach by NeST of
the provisions of this Section 7.1
7.2 Injury or Damages to Persons or Property. NeST agrees to indemnify and
hold harmless Company and its employees from any and all loss, costs,
damages, expenses and liabilities (including attorney's fees) by reason
of personal injury or property damage of whatsoever nature or kind
arising, in whole or in part, out of, as a result of, or in connection
with the acts or omissions of NeST or Consultants. Furthermore, NeST
agrees to maintain public liability insurance covering NeST's obligations
contained herein.
7.3 Company Regulations.
(a) NeST agrees that it and its employees will at all times comply with all
reasonable regulations regarding security, usage of Company equipment,
facilities and personnel and safety generally applicable to Company's
employees and invitees, in effect from time to time at company's
premises, and externally for material belonging to Company. Further NeST
agrees that it and its employees will be subject to reasonable
restrictions imposed by Company in connection with areas of their
premises at which Consultants may be present during the course of the
performance of this Agreement.
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(b) NeST will indemnify and hold harmless Company and its employees, from any
and all loss, costs, damages, expenses and liabilities (including
attorney's fees) with respect to: (i) any injury to, or death of any
employee of NeST while such person is present on the premises of Company,
and (ii) any damage to NeST property or that of any of its employees
which may occur while at the premises of Company, unless and except to
the extent that such injury, death, loss, or damage is caused by the
gross negligence or willful misconduct of Company, its employees or
agents.
8. GENERAL
8.1 Compliance with Laws. Each party agrees to perform its obligations
hereunder in accordance with all applicable laws, rules, and regulations
now or hereafter in effect.
8.2 Modification. This Agreement can only be modified by a written agreement
duly signed by the persons authorised to sign agreements on behalf of
Company and NeST, and variance from the terms or conditions of this
Agreement or any order or other written notification from the Company
will be of no effect.
8.3 Severability of Provisions. If any provision or provisions of this
Agreement shall be held to be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall
not in any way be affected or be impaired thereby.
8.4 Choice of Law; Choice of Forum. This Agreement shall be construed
according to the laws (other than the laws on conflicts of laws) of the
Commonwealth of Pennsylvania. The parties hereto agree to accept the
exclusive jurisdiction of the courts of the Commonwealth of Pennsylvania,
and those of the United States of America situated in Pennsylvania, for
the adjudication of any dispute arising here from. The parties hereby
waive their right, if any, to have any dispute arising under this
Agreement determined by a jury proceeding.
8.5 Entire Agreement. This Agreement is the complete and exclusive statement
of the agreement between the parties as to the subject matter hereof
which supersedes all proposals or agreements, oral or written, and all
other communications between the parties related to the subject matter of
this Agreement.
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8.6 Waivers. A waiver of a breach or default under this Agreement shall not
be a waiver of any other or subsequent breach or default. The failure or
delay by either party in enforcing compliance with any term or condition
of this Agreement shall not constitute a waiver of such term or condition
unless such term or condition is expressly waived in writing.
8.7 Captions. Captions contained in this Agreement are for reference purposes
only and do not constitute part of this Agreement.
8.8 Equity. In the event of a breach or threatened breach by NeST or any
Consultant of any of the provisions of this Agreement, Company, in
addition to any other remedies available to it under law, shall be
entitled to an injunction restraining NeST from the performance of acts
which constitute a breach of this Agreement, and NeST agrees not to raise
adequacy of legal remedies as a defense thereof.
8.9 Assignments. This Agreement and NeST's rights, duties, and obligations
under this Agreement are not transferable, delegable, or assignable by
NeST without the prior written consent of Company. Any attempt by NeST to
transfer, delegate or assign this Agreement or any of its rights, duties,
or obligations under this Agreement with such prior consent is void.
Company may assign this Agreement or any of its rights or
responsibilities hereunder.
8.10 Notices. All notices which are required to be given or submitted pursuant
to this Agreement shall be in writing and shall be hand delivered or sent
by certified mail or reputable overnight carrier (e.g. - Federal Express)
return receipt requested, to the address set forth herein or to such
other address as Company or NeST may from time to time designate and
shall be deemed given upon receipt.
8.11 Compliance With Other Agreements. NeST represents and warrants to Company
that in entering into this Agreement and carrying out its provisions,
neither NeST nor any Consultant will be violating any Agreement or
obligation it may have with any other party.
8.12 Non-use of Names and Marks. NeST agrees that it will not directly or
indirectly, without the prior written consent of Company, use for the
purposes of advertising, promotion, or publicity, or otherwise, the name
of Company or any of its divisions, subsidiaries, affiliates, vendors or
customers, or any trademarks of Company or of any of its divisions,
subsidiaries, affiliates, vendors or customers.
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8.13 Independent Contractors. NeST agrees that NeST and its consultant
employees shall be considered an independent contractor and that neither
NeST nor the consultants shall be deemed to be employees of Company.
Consultants shall not be entitled to any employee benefits of Company.
NeST wi11 be solely responsible for the payment of all compensation owed
to Consultants including payment, if any, of employment related taxes,
all benefits and workmen's compensation insurance. NeST warrants and
represents that it has complied, is in compliance with, and covenants
that during the term of this Agreement or any Task Order hereunder, NeST
will comply with all laws, rules, and regulations required by appropriate
government authorities of independent contractors, including the
appropriate withholding, reporting and payment of all required taxes.
NeST agrees to indemnify and hold harmless Company and its employees from
any and all loss, costs, damages, expenses or liabilities (including
attorney's fees) arising as a result of the breach by NeST of the
provisions of this Section 8.13.
8.14 Schedules. All Schedules to this Agreement referred to herein are
incorporated herein by reference.
8.15 Authority. Each party represents that it has full power and authority to
enter into and perform this Agreement, and the person signing this
Agreement on behalf of it has been properly authorised and empowered to
enter into this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement effective
the day and year first above written,
AM COMMUNCIATIONS, INC. NETWORK SYSTEMS &
TECHNOLOGIES (P) LTD.
Name /s/ /s/
Title President Title
