CONSULTING AGREEMENT
This CONSULTING AGREEMENT (the "Agreement") made as of this 20th day of July,
2002 ("Effective Date") by and between Path 1 Network Technologies Inc., a
Delaware corporation ("Company"), and Xxxxxx Xxxxxx ("Consultant").
WHEREAS, Company desires consulting and similar services relating to
Company's business; and
WHEREAS, Consultant desires to contract with the Company to perform
such services.
NOW, THEREFORE, in consideration of the mutual covenants hereinafter
recited, the sufficiency of which is hereby acknowledged, the parties agree as
follows;
1. Consultancy. The Consultant shall serve as a consultant to the
Company on a month-to-month basis for a period of up to ONE (1) year unless
earlier terminated in accordance with Section 7 of this Agreement. Consultant
agrees that he will perform under this agreement for a period of at least 90
days.
2. Scope of Work. The Consultant shall perform the services set forth
in Exhibit A attached hereto (the "Services"). Any additions to or modifications
of the Services shall be set forth in writing and shall be signed by both
parties. The performance of services and compensation therefore necessary to the
completion of such additions or modifications shall be governed by this
Agreement unless otherwise described in the written agreement of the parties.
3. Consulting Fees. Consultant shall be paid for services on a monthly
basis, for services of not less than 2 days or to exceed 5 days of work for any
monthly period. Consultant shall receive $1,000 in cash compensation and Path 1
stock options representing $1,000 value based upon the closing price of Path 1
stock on the date of payment, for each day of service. (if Path 1 stock closed
at $2 per share on the record due date of payment to Consultant, he would
receive 500 options for each day worked).
4. Additional Payments. The Company shall reimburse the Consultant for
out-of-pocket expenses reasonably incurred by the Consultant in the performance
of the Services upon the Consultant's submission of any request for
reimbursement in a format consistent with the Company's policies from time to
time in effect.
5. Confidentiality. The Consultant acknowledges that Confidential
Information (as defined in Section 6 of this Agreement) is of great value to the
Company. Accordingly, the Consultant agrees not to divulge to anyone, either
during or after the term of this Agreement, any Confidential Information
obtained or developed by the Consultant during the term of this Agreement. Upon
the expiration or earlier termination of this Agreement, the Consultant agrees
to deliver to the Company all documents, papers, drawings, tabulations, reports
and similar documentation which are furnished by the Company to the Consultant
or were prepared by the Consultant in performance of the Services for the
Company. Upon the expiration or termination of this Agreement, the Consultant
agrees to make no further use or utilization of any Confidential Information.
6. Confidential Information. "Confidential Information," as used in
this Agreement, shall mean information regarding the business affairs,
operations, business opportunities, price and cost information, finances,
customer names, prospects and customer lists, business plans, sales techniques,
manuals, letters, notebooks, procedures, reports, products, processes, services,
inventions, research and development, and other confidential information and
knowledge concerning the Company. The term "Confidential Information" shall not
include information that (a) is or becomes generally available to the public
through no violation of this Agreement, (b) was available to Consultant on a
non-confidential basis prior to disclosure to Consultant by the Company or 3dfx,
or (c) becomes available to the Consultant on a non-confidential basis from a
source other than the Company.
7. Termination. The Company and Consultant shall have the right to
terminate this Agreement at any time after the initial 90 day period upon 15
days prior written notice to the Consultant. In addition, in the event either
party fails to cure a breach of this Agreement within fifteen (15) days after
receiving written notice thereof, then the non-breaching party may terminate
this Agreement upon written notice to the breaching party. In the event of any
termination of this Agreement, the Company shall make payments to the Consultant
for all work performed in accordance with the terms and conditions of this
Agreement up to the date of termination, and the Consultant shall immediately
return to the Company, without limitation, all correspondence, reports,
documents, drawings and any other items of whatever nature supplied to the
Consultant by the Company or owned by the Company pursuant to this Agreement.
8. Independent Contractor/Taxes. The Consultant is not an agent or
employee of the Company and is not authorized to act on behalf of the Company.
Except as required by a final determination by the Internal Revenue Service or
state taxing authority and upon due notice to the other party, the Consultant
and the Company each agrees that it will treat the Consultant as an independent
contractor for tax purposes and file all tax and information returns and pay all
applicable taxes on that basis.
9. Assignment. The Consultant shall not assign this Agreement or any
interest herein, nor delegate any obligation hereunder, without the prior
written consent of the Company. The Company shall not assign its rights and
obligations under this Agreement to any third party without the written consent
of the Consultant, except that the Company may assign this Agreement to a
subsidiary, parent, successor or affiliate of the Company without the consent of
the Consultant.
10. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of California applicable to contracts made
between California residents and wholly to be performed in California.
11. Headings. The headings in this Agreement are intended principally
for convenience and shall not, by themselves, determine the rights and
obligations of the parties to this Agreement.
12. Notices. All notices, requests, demands, and other communications
required by, or made in connection with, this Agreement or the transactions
contemplated by this Agreement, shall be in writing and shall be deemed to have
been duly given on the date of delivery, if delivered in person, or three days
after mailing if mailed by certified or registered mail, postage prepaid, return
receipt requested.
13. Severability. If any provision of this Agreement is held to be
unenforceable for any reason, it shall be adjusted rather than voided, if
possible, in order to achieve the intent of the parties to the extent possible.
In any event, all other provisions of this Agreement shall be deemed valid and
enforceable to the full extent possible.
14. Waiver. The waiver of any term or condition contained in this
Agreement by any party to this Agreement shall not be construed as a waiver of a
subsequent breach or failure of the same term or condition or a waiver of any
other term or condition contained in this Agreement.
15. Entire Agreement. This Agreement, together with the Note and
Confidential Information and Inventions Agreement to be executed concurrently
herewith, contain all of the terms and conditions agreed upon by the parties
relating to its subject matter and supersedes any and all prior and
contemporaneous agreements, negotiations, correspondence, understandings and
communications of the parties, whether oral or written, respecting the subject
matter herein.
16. Counterpart Execution. This Agreement may be executed by facsimile
and in counterparts, each of which shall be deemed an original and all of which
taken together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
Path 1 Network Technologies Inc. Consultant: Xxxxxx Xxxxxx
By:
/s/ Xxxxxxxxx X. Xxxx /s/ Xxxxxx Xxxxxx
------------------------- -------------------------
Name: Xxxxxxxxx X. Xxxx Xxxxxx X. Xxxxxx
Title: President and CEO Xxxxxx Associates
Tax ID: 00-0000000
EXHIBIT A
Objectives
To expand the level of awareness about Path1 within the target
cable-related organizations for the objective both of working towards a
commercial relationship and a potential Q3, 02 strategic investment
To solicit information and opinions about cable distribution network
challenges that might effect the Path1 products being developed.
Discussion
Path1 is developing IP transport product for Hybrid Fiber Coaxial (HFC)
cable networks. The cable industry's distribution suppliers have historically
been a duopoly with Motorola and Scientific Atlanta. The use of optical fibers,
the development of Video on Demand (VOD), Interactive Television (iTV), cable
telephony service, and high speed IP delivery modems, in addition to the growing
list of typical entertainment and information channels has created an
opportunity for other product developers to enter the field as the technologies
required expand at a rapid rate. However, successful new technologies,
especially in the distribution area tend to work within the existing
distribution structure. The Path1 product is an early stage IP solution that
needs champions within the MSOs, trade associations, and traditional transport
manufacturers.
Methodology
This activity will involve the following components;
Review of the company's plans, especially for Marketing, Sales, and
Business Development to ensure that they are appropriate to the cable industry
and reasonable to investors looking at this round.
Source potential resources to implement position searches, industry
relationships, and marketing expertise.
Develop a list of contacts and begin to establish key relationships in
the industry Modify the Company's presentation for other audiences such as cable
operators (MSOs), US venture firms, industry panels and conferences, etc.
Target specific individuals in equipment and technology companies for
meetings, including VOD suppliers
Establish initial meetings with cable operators to validate
assumptions and introduce concepts consistent with the advantages of the Path1
products.
Secure awareness for Path1 through targeted public relations with the
trade press, trade associations, as well as operators and other manufacturers.
Scope
This initial activity will involve at 3-4 month window with Consultant
providing 2-5 days per month of support. The outcomes should be the following:
Comfort with the Business Plan and presentations
Expansion of the network of contacts that the company has in the
industry
Specific meetings with targeted companies and MSOs as agreed,
including the Western Show
Familiarization with the industry's communications vehicles, events,
and conferences.
Business relationships leading to product sales.
Exploration of other concepts from the June retreat including DSL
relationships and Competitive analysis.
Compensation
Company and Consultant agree to an arrangement as is fully stated
above, with a minimum of 2 days per month and a maximum of 5 days per month. If
strategic investments or relationships are achieved in this process, Consultant
will receive an appropriate finders fee to be negotiated on a case-by-case
basis.
