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EXHIBIT 10.19
CONSULTING AGREEMENT
This Agreement is entered into as of the 30th day of August, 1999 by
and between ZLand, Inc., a Delaware corporation ("XXxxx.xxx") and Xxxx Xxxxxxx
("Consultant").
In consideration of the mutual promises contained herein, XXxxx.xxx and
Consultant agree as follows:
1. SERVICES.
XXxxx.xxx hereby retains Consultant as an independent contractor, and
not as an employee, to perform consulting services for XXxxx.xxx and to carry
out the project or projects specified on the Description of Work attached hereto
as Exhibit A, on the terms and conditions set forth herein and on such
Description of Work (Consultant's "Services"). Exhibit A, the Description of
Work, is hereby incorporated by reference.
2. PAYMENT FOR SERVICES.
In consideration for Consultant's Services, XXxxx.xxx shall pay
Consultant the fees set forth on Exhibit A, subject to the limitations, terms
and conditions therein.
3. TERM AND TERMINATION.
This Agreement shall commence on the date first written above and shall
continue for the period described on the Description Work, unless sooner
terminated by either party, with or without cause, for any reason whatsoever,
upon 90 days written notice. In addition, this Agreement may be terminated by
XXxxx.xxx immediately upon written notice to Consultant if Consultant is not
performing in compliance with the Description of Work, if performance is
unsatisfactory to XXxxx.xxx's standards or in the event of any breach hereof.
Upon termination of this Agreement for any reason, each party shall be
released from all obligations and liabilities to the other occurring or arising
after the date of such termination, except as provided in Section 10(e) and
except that any termination of this Agreement shall not relieve Consultant or
XXxxx.xxx from any liability arising from any breach of this Agreement.
4. RELATIONSHIP OF PARTIES.
It is agreed that Consultant's Services are made available to XXxxx.xxx
on the basis that Consultant shall retain Consultant's individual professional
status and is an independent contractor to XXxxx.xxx and not a XXxxx.xxx
employee. Consultant shall use Consultant's own discretion in performing the
tasks assigned, subject to the general direction of XXxxx.xxx and subject to the
express condition that Consultant shall at all times comply with applicable law.
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Consultant will not be eligible for any XXxxx.xxx employee benefits and
XXxxx.xxx will not make deductions from its fees to Consultant for taxes,
insurance, bonds or any other subscription of any kind.
Consultant acknowledges and agrees that it is obligated to report as
income and pay all applicable taxes in a timely manner on all compensation
received by Consultant pursuant to this Agreement, and Consultant agrees to
indemnify, hold harmless and defend XXxxx.xxx to the extent of any obligation
imposed on XXxxx.xxx to pay any withholding taxes, social security, workers'
compensation, unemployment or disability insurance or similar items, including
interest and penalties thereon, in connection with any payments made to
Consultant by XXxxx.xxx pursuant to this Agreement or imposed upon XXxxx.xxx if
Consultant is determined not to be an independent contractor.
If required by law or upon request of XXxxx.xxx, Consultant shall
maintain workers compensation and state disability insurance, as well as
adequate insurance to protect itself from and indemnify XXxxx.xxx against claims
giving rise to any indemnification under this Section 4.
5. CONFIDENTIALITY.
Consultant agrees that Consultant shall keep in confidence all
information relating to the products, product plans, methods of manufacture,
trade secrets, secret processes, customers, partners, partner products and
markets of XXxxx.xxx and all other confidential knowledge, data and information
related to the business or affairs of XXxxx.xxx (collectively, "Confidential
Information") that may be acquired pursuant to or in connection with this
Agreement or the relationship or relationships contemplated by this Agreement.
During and after the term of this Agreement, Consultant will not, without the
prior written consent of an officer of XXxxx.xxx, publish, communicate, divulge
or disclose any of such Confidential Information. If any portion of the work
performed pursuant to this Agreement is of a classified nature, or develops into
such, Consultant agrees to preserve the secrecy of such work in compliance with
all applicable rules and regulations of the United States. Upon termination of
this Agreement and at the request of XXxxx.xxx, Consultant will return to
XXxxx.xxx all records, data, notes, reports, sketches, material, equipment and
other documentation and other property, and all reproductions of the same,
furnished by XXxxx.xxx or developed or prepared pursuant to the relationship or
relationships hereunder.
Notwithstanding the foregoing, it is agreed that Confidential
Information shall not include any information which: (a) is known to Consultant
at the time of disclosure to Consultant by XXxxx.xxx; (b) has become publicly
known through no wrongful act of Consultant; (c) has been rightfully received by
Consultant from a third party without restriction on disclosure and without
breach of any agreement with XXxxx.xxx; (d) has been independently developed by
Consultant; (e) has been approved for release by written authorization executed
by an authorized officer of XXxxx.xxx; or (f) is required to be disclosed by
Consultant pursuant to a requirement of law.
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6. PROPRIETARY INFORMATION.
Consultant shall not remove any XXxxx.xxx property from XXxxx.xxx's
premises without the prior written consent of XXxxx.xxx. All intellectual
property that is produced in whole or in part by Consultant in the course of the
relationship or relationships established by this Agreement, including without
limitation notes, reports, documentation, drawings, computer programs (source
code, object code and listings), customer lists, inventions, creations, works,
devices, masks, mask works, models, work-in-progress and deliverables
(collectively, "Proprietary Information") shall be the sole property of
XXxxx.xxx, and Consultant hereby assigns to XXxxx.xxx all right, title and
interest in and to the Proprietary Information, including but not limited to all
patent rights, copyrights (including audiovisual copyrights), mask work rights,
trade secret rights and other proprietary rights therein. During and after the
term of this Agreement, Consultant and its associates shall assist XXxxx.xxx and
its nominees in every reasonable way, at XXxxx.xxx's expense, to document,
secure, maintain and defend for XXxxx.xxx's own benefit in any and all countries
all copyrights (including audiovisual copyrights), patent rights, mask work
rights, trade secret rights and other proprietary rights in and to the
Proprietary Information.
7. OTHER PROPRIETARY RIGHTS.
Not Applicable
8. NO CONFLICTS; NON-COMPETITION.
Consultant represents and warrants that Consultant is free to enter
into this Agreement and that the performance of this Agreement by Consultant
will not conflict with or constitute a breach under any other agreement to which
Consultant is bound. XXxxx.xxx and Consultant agree that Consultant is free to
engage in other employment or consulting activity during the term of this
Agreement, provided that Consultant does not during the term of this Agreement
engage in any such employment or consulting services or enter into any agreement
inconsistent with or in conflict with any provision hereof. Without limiting the
foregoing, Consultant agrees that Consultant shall not at any time during the
term of this Agreement, as an officer, director, employee, consultant, principal
or trustee on behalf of any other person, firm, corporation or other entity,
engage in any business or activity that competes with the business of XXxxx.xxx
as now conducted or as conducted as of the time Consultant ceases to provide
Services to XXxxx.xxx, nor shall Consultant solicit or actively assist any
person, firm, corporation or other entity in soliciting, any customer of
XXxxx.xxx for purposes competitive with the business of XXxxx.xxx.
9. SOLICITATION OF EMPLOYEES.
In consideration for the mutual promises contained herein, Consultant
agrees not to solicit the services of or employ any of XXxxx.xxx's employees
during the term of this Agreement and for a period of twelve (12) months
thereafter without XXxxx.xxx's prior written consent.
10. MISCELLANEOUS.
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(a) ASSIGNMENT. The rights and liabilities of the parties hereto shall
bind and inure to the benefit of their respective successors, executors and
administrators, as the case may be; provided however that, since XXxxx.xxx has
specifically contracted for Consultant's Services, Consultant may not assign or
delegate its obligations under this Agreement either in whole or in part without
the prior written consent of XXxxx.xxx. XXxxx.xxx may in its discretion assign
this Agreement in whole or in part.
(b) EQUITABLE RELIEF. Because Consultant shall have access to and
become acquainted with Confidential Information and Proprietary Information of
XXxxx.xxx, Consultant acknowledges that breach of any of the provisions of this
Agreement by Consultant shall result in irreparable harm to XXxxx.xxx, and
Consultant agrees that XXxxx.xxx shall have the right to enforce this Agreement
and any of its provisions by injunction, specific performance or other equitable
relief without prejudice to any other rights and remedies that XXxxx.xxx may
have.
(c) GOVERNING LAW; SEVERABILITY. This Agreement shall be governed by
and construed and enforced in accordance with the laws of the State of
California. Both parties agree that any litigation or arbitration between the
parties shall take place in Orange County, California, and both parties waive
any objection to personal jurisdiction or venue in any forum located in that
County. If any provision of this Agreement other than those provisions relating
to the assignment of rights to XXxxx.xxx is found by a court of competent
jurisdiction to be unenforceable for any reason, the remainder of this Agreement
shall continue in full force and effect.
(d) NOTICES. Any notice required or permitted hereunder shall be given
to the appropriate party at the address specified beneath such party's signature
below or at such other address as the party may hereafter specify in writing.
Such notice shall be deemed given upon personal delivery to the appropriate
address, three (3) business days after the date of mailing if sent by certified
or registered mail, or one (1) business day after the date of deposit with
Federal Express or similar overnight courier.
(e) SURVIVAL OF TERMS. The provisions of Sections 5, 6, 7, 8, 9 and 10
shall survive termination of this Agreement.
(f) COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one instrument.
(g) WAIVER. No waiver or modification of any of the terms or provisions
of this Agreement shall be valid unless contained in writing and signed by both
parties.
(h) ENTIRETY. This Agreement, including Exhibit A, contains the entire
understanding of the parties with respect to the subject matter hereof, and
there are no representations, warranties, promises or undertakings other than
those contained herein. This Agreement supersedes and cancels all previous
agreements between the parties.
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IN WITNESS WHEREOF, the parties hereto have entered into this Agreement
as of the date first set forth above.
"XXXXX.XXX" "CONSULTANT"
ZLAND, INC. XXXX XXXXXXX
00000 Xxxxx Xxxxx Xx.
Xxxxx Xxxxx, XX 00000
By: /s/ XXXXX XXXXX /s/ XXXX XXXXXXX
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Xxxxx X. Xxxxx, President Xxxx Xxxxxxx
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EXHIBIT A
DESCRIPTION OF WORK
1. NAME OF CONSULTANT: Xxxx Xxxxxxx
2. TERM OF CONSULTING AGREEMENT.
The Consulting Agreement shall continue for 24 months from the date
hereof, unless earlier terminated in accordance with Section 3 of the Consulting
Agreement.
3. SERVICES TO BE PROVIDED.
Consultant shall render such services as XXxxx.xxx may from time to
time request in writing in connection with the projects described below.
Description of project and general description of work to be done:
Provide assistance to ZLand's CEO and COO to establish strategic relationships
with ISPs, equipment manufacturers and telecom providers.
Provide assistance to ZLand's CEO and COO in connection with any private or
public financings conducted by ZLand during the term of this Agreement.
4. FEE SCHEDULE.
a. FEES
In consideration for the Services to be provided by Consultant hereunder,
XXxxx.xxx shall pay Consultant a retainer in the amount of $108,000 for the
first 6 months of the contract. Consultant shall be paid monthly in the amount
of $18,000 per month. Thereafter, the stock options referred to below shall be
considered full and complete compensation for Consultant's work for the
remainder of the contract.
Consultant shall receive 246,000 shares of ZLand non-statutory options with an
exercise price of $9.00 per share (current fair market value). 210,000 of these
options will vest at a rate of 1/24 of 210,000 shares per month beginning
September 30, 1999 and at the end of each month thereafter. The remaining 36,000
shall vest at the rate of 2,000 shares per month beginning February 28, 2000 and
on the last day of each month thereafter. If Consultant's Services are
terminated without cause by XXxxx.xxx, or if there is a change of control of
XXxxx.xxx, the options shall vest immediately upon such termination or change of
control and be exercisable for one year thereafter. For purposes hereof, a
"change of control" shall mean an Ownership Change in which the stockholders of
XXxxx.xxx before such Ownership Change do
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not retain, directly or indirectly, at least a majority of the beneficiary
interest in the voting stock of the Company after such transaction or in which
XXxxx.xxx is not the surviving corporation. For purposes of this Agreement an
"Ownership Change" shall be deemed to have occurred if any of the following
occurs with respect to XXxxx.xxx:
(i) the direct or indirect sale or exchange by the shareholders of
XXxxx.xxx of all or substantially all of the stock in XXxxx.xxx;
(ii) a merger or consolidation in which XXxxx.xxx is a minority
party;
(iii) the sale, exchange, or transfer of all or substantially all of
the assets of XXxxx.xxx; or
(iv) a liquidation or dissolution of XXxxx.xxx.
B. EXPENSES
Consultant shall be entitled to receive reimbursement for any reasonable
expenses incurred in connection with performance of the Services as long as
prior approval of XXxxx.xxx is obtained in the manner specified by the
Consulting Agreement and appropriate receipts are presented.
5. EQUIPMENT.
Consultant shall supply all equipment required to be used by Consultant
and his associates to complete the Services pursuant to the Consulting
Agreement.
6. CONSULTING AGREEMENT.
This Exhibit A is part of and incorporated by reference into the
Consulting Agreement referred to in paragraph 2 above.
"XXXXX.XXX" "CONSULTANT"
Z LAND, INC. XXXX XXXXXXX
By: /s/ XXXXX XXXXX /s/ XXXX XXXXXXX
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Xxxxx X. Xxxxx, President Xxxx Xxxxxxx
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