Local Office Doc No.SDILIB1\JAK\424089.02Doc
PathC:\NrPortbl\SDILIB1\JAKOrig Doc Path Doc Name Addressee(s) Signer(s) Cause
No. Parties Client No.029280Matter No.0003Client NameBPHMatter Name Caption Bank
Document Date FooterStore DocumentType CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT is made and entered into this 8th day of January
2002 by and among Path 1 Network Technologies Inc., a California corporation
(the "Company") and Xxxx X. Xxxxx, (the "Consultant").
RECITAL
The Company desires to engage Consultant in order to take advantage of his
experience, knowledge and abilities in the Company's business, and Consultant
desires to be so engaged, on the terms and conditions set forth in this
Agreement.
AGREEMENT
Accordingly, in consideration of the mutual covenants set forth below, the
parties agree as follows:
1. ENGAGEMENT
1.1 Engagement. The Company hereby engages Consultant and Consultant hereby
accepts such engagement to perform during the term of this Agreement the
services described in Section 1.2.
1.2 Duties. Consultant will hold himself available for the term of this
Agreement to render consultation and advice to the Company in regard to all
aspects of its business.
1.3 Relationship. Consultant's relationship to the Company under this
Agreement shall be solely that of an independent contractor and the parties
shall conduct themselves accordingly. This Agreement is not intended to create
an employment relationship, nor do the parties intend to create a partnership or
joint venture. The Consultant is not authorized to obligate the Company to any
third party through any contractual agreement or obligation, without the express
written consent of the Company.
2. TERM OF ENGAGEMENT AND TERMINATION
2.1 Term. Unless sooner terminated pursuant to Section 2.2, the term of
engagement under this Agreement shall commence January 9, 2002 and shall
continue until July 8, 2002 (the "Consulting Period").
2.2 Termination. Consultant's engagement under this Agreement shall
terminate prior to the expiration of its term upon the happening of any of the
following events:
(a) The mutual agreement of the Company and Consultant;
(b) The death of Consultant;
(c) At the Company's option, in the event of a material breach of this
Agreement by Consultant;
(d) At Consultant's option, in the event of a material breach of this
Agreement by the Company; or
(e) In the event that this agreement is superseded by another agreement
between the Company and the Consultant.
2.3 Duties Upon Termination. In the event that engagement under this
Agreement is terminated pursuant to Section 2.2, neither the Company nor
Consultant shall have any remaining duties hereunder, except that (i) the
Company shall pay to Consultant such compensation as is due pursuant to Section
3 as and when it is due and (ii) Consultant shall continue to be bound by
Section 6.
3. COMPENSATION
3.1 Cash Compensation. The Consultant shall be paid the sum of US$42,938.88
in consideration for the services to be rendered by him during the first ninety
(90) days of his Consulting Period, from January 8, 2002 through April 8, 2002.
This sum shall be paid to Consultant on the Effective Date of the Employment
Separation and General Release Agreement, executed concurrently herewith. During
the second ninety (90) days of the Consulting Period, Consultant shall be paid
at the rate of US$6,250.00 per month, paid bi-weekly or semi-monthly, at PATH
1's election.
3.2 Expenses. Consultant shall bear all expenses incurred in the
performance of his duties hereunder. Reasonable expenses incurred by Consultant
in performing his duties under this Agreement will be reimbursed by the Company
within thirty (30) days of Consultant's submission of receipts for same.
3.3 Withholding. Since Consultant is an independent contractor and not an
employee, no amounts shall be withheld from any payments hereunder for federal,
state, local, FICA, FUTA or other taxes unless required by applicable law.
Consultant undertakes to pay all taxes due with respect to the amounts received
hereunder as and when due, and agrees to hold PATH 1 harmless from all claims by
federal, state and/or local taxing authorities for taxes due.
4. STOCK OPTIONS.
4.1 Prior Option Grant. The parties acknowledge that Consultant has
previously been granted options to purchase shares of PATH 1's Class A common
stock, and that at the commencement of the term of this Agreement, Consultant
had vested in options to purchase up to 74,000 shares of such stock. The parties
further acknowledge that pursuant to the terms of the EMPLOYMENT SEPARATION AND
GENERAL RELEASE AGREEMENT executed concurrently herewith, REMEN's vesting in an
additional 35,000 options was accelerated. The parties agree that except for
such those options in which REMEN had acquired vested interests as of January 8,
2002, and such options as were accelerated, REMEN shall acquire no other vested
rights in options, notwithstanding his continued work for PATH 1 as its
consultant.4.3 Time for Exercise of Vested Options. All rights to exercise
vested options shall cease ninety (90) days from the expiration of this
AGREEMENT. Consultant understands that the time limits within which he may
exercise vested stock options are discussed in the Company's stock option plan
documents, and warrants that he has copies of the same and has had the
opportunity to seek independent legal advice concerning the same. Consultant
warrants that the Company has not provided him with advice concerning the timing
of exercise of vested options.
5. MEDICAL AND DENTAL COBRA PREMIUMS.
If Consultant has timely elected to continue his and his dependents'
coverage under the Company's group medical and dental insurance plans, the
Company shall pay the COBRA premiums on behalf of Consultant and his covered
dependents until the earlier of:
(a) Ninety (90) days from the date of this Agreement; or
(b) The date upon which Consultant becomes eligible for coverage under
another company's group medical and/or dental insurance plans.
6. TRADE SECRETS, ETC.
6.1 Trade Secrets. Consultant shall not, without the prior written consent
of the Company, disclose or use in any way, any confidential business or other
information relating to methods and policies, customer lists and marketing plans
of the Company of which Consultant has knowledge, whether or not conceived of or
prepared by Consultant ("Trade Secrets"), other than information which is
generally known in the industry in which the Company transacts business or
acquired from public sources, all of which Trade Secrets are the exclusive and
valuable property of the Company.
6.2 Tangible Items. Other than merely personal items, all files, records,
documents, plans, specifications, manuals, books, forms, receipts, notes,
reports, memoranda, studies, data, calculations, recordings, catalogues,
software storage media or other compilations of information, correspondence and
all copies, abstracts and summaries of the foregoing and all physical items
related to the business of the Company (collectively, "Property") and owned by
the Company, whether of a public nature or not, and whether prepared by
Consultant or not, are and shall remain the exclusive property of the Company,
and no Property, whether owned by the Company or by another, shall be retained
by Consultant after the termination of this Agreement, without the prior written
consent of the Company.
6.3 Injunctive Relief. Consultant acknowledges and agrees that it would be
difficult to fully compensate the Company for damages resulting from the breach
or threatened breach of the foregoing provisions of this Section 4 and,
accordingly, that the Company shall be entitled to temporary and injunctive
relief, including temporary restraining orders, preliminary injunctions and
permanent injunctions, to enforce such provisions upon proving that it has
suffered or that there is a substantial probability that it will suffer
irreparable harm.
7. MISCELLANEOUS
7.1 Severability. The invalidity or unenforceability of any particular
provision of this Agreement shall not affect the other provisions, and this
Agreement shall be construed in all respects as if any invalid or unenforceable
provision were omitted.
7.2 Headings. The Section and other headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
7.3 Governing Law. The validity, construction and performance of this
Agreement shall be governed by the laws, without regard to the laws as to choice
or conflict of laws, of the State of California.
7.4 Entire Agreement. This embodies the entire agreement and understanding
between the parties pertaining to the subject matter of this Agreement, and
supersedes all prior agreements, understandings, negotiations, representations
and discussions, whether verbal or written, of the parties, pertaining to that
subject matter. There are no promises, terms, conditions or obligations of the
parties pertaining to that subject matter other than as contained in this
Agreement.
7.5 Assignment. Neither this Agreement nor any rights under this Agreement
may be assigned by Consultant without the prior written consent of the Company.
7.6 Binding Effect. The provisions of this Agreement shall bind and insure
to the benefit of the parties and their respective successors and permitted
assigns.
7.7 Notices. Any notice or communication required or permitted by this
Agreement shall be deemed sufficiently given if in writing and when delivered
personally or 72 hours after deposit with the U.S. Postal Service as registered
or certified mail, postage prepaid, and addressed as follows:
If to the Company:
Path 1 Network Technologies Inc.
0000 Xxxxx Xxxxx #000
Xxx Xxxxx, XX 00000
Attention: Xx. Xxxxx X. Xxxxxxxxx
If to the Consultant:
Xxxx X. Xxxxx
00000 Xxxxxxxx Xx.
Xxxxx, XX 00000
or to such other address as a party to whom notice is to be given has
furnished to the other party in the manner provided above.
7.8 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute a single agreement.
7.9 Amendment and Waiver. This Agreement may be amended, modified or
supplemented only by a writing executed by each of the parties. Any party may in
writing waive any provision of this Agreement to the extent such provision is
for the benefit of the waving party. No action taken pursuant to this Agreement,
including any investigation by or on behalf of any party shall be deemed to
constitute a waiver by that party of its or any other party's compliance with
any representations or warranties or with any provisions of this Agreement. No
waiver by any party of a breach of any provision of this Agreement shall be
construed as a waiver of any subsequent or different breach, and no forbearance
by a party to seek a remedy for noncompliance or breach by another party shall
be construed as a waiver of any right or remedy with respect to such
noncompliance or breach.
7.10 Nondelegable Duties. Consultant's duties under this Agreement are
personal and may not be delegated, nor may his rights under this Agreement be
assigned.
7.11 Arbitration. Any dispute, action, suit or proceeding arising out of or
relating to this Agreement or the interpretation, performance or breach of this
Agreement shall, if demanded by any party, be determined and settled by binding
arbitration before a single arbitrator, to be held in the County of San Diego,
State of California, in accordance with the rules of the American Arbitration
Association. Any award rendered by the arbitrator shall be final and binding
upon each party to the arbitration and judgment on the award may be entered in
any court.
7.12 Attorneys' Fees. The prevailing party in any suit, arbitration or
other proceeding brought to enforce any provisions of this Agreement, shall be
entitled to recover all costs and expenses of the proceeding and investigation
(not limited to court costs), including attorneys' fees at the hourly rates
usually charged by that party's attorneys.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
THE COMPANY
PATH 1 NETWORK TECHNOLOGIES INC.
By
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Xxxxx X. Xxxxxxxxx
CONSULTANT
By
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Xxxx X. Xxxxx
