CONSULTING AGREEMENT
This CONSULTING AGREEMENT (this "Agreement") dated February 12, 2002,
is entered into by and between Xxxxxx Xxxxxxxx ("Consultant") whose address is
_____________________________________, and Sensar Corporation, a Nevada
corporation (the "Company") whose address is 000 Xxxx Xxxxx Xxxxxx, Xxxxx 0000,
Xxxx Xxxx Xxxx, Xxxx 00000.
RECITALS:
WHEREAS, the Company has entered into an Agreement and Plan of Merger
dated February 12, 2002 (the "Merger Agreement"), pursuant to which VitalStream
Operating Corporation, a Delaware corporation and wholly-owned subsidiary of the
Company ("Merger Sub") has agreed to merge (the "Merger") with and into
VitalStream, Inc. ("VitalStream"); and
WHEREAS, Consultant is an officer of the Company and has experience in,
and knowledge regarding, the corporate management and the resolution of
transition issues following a consolidation transaction; and
WHEREAS, the Company desires to obtain, and Consultant desires to
provide, certain services as provided in this Agreement;
AGREEMENT:
NOW, THEREFORE, in consideration of the mutual covenants, conditions
and promises set forth herein, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Company and
Consultant hereby agree as follows:
1. TERMINATION OF EMPLOYMENT; COMMENCEMENT OF CONSULTANT SERVICES.
(a) RESIGNATION OF CONSULTANT. Effective as of the time the Merger
becomes effective (the "Effective Time"), Consultant hereby resigns from all
positions Consultant holds with the Company, including the positions of Chief
Operating Officer, Chief Financial Officer, employee and director. Effective as
of the Effective Time, the Company and Consultant hereby mutually terminate any
and all employment agreements that Consultant has with the Company, including
all agreements, if any, under which Consultant was to receive severance or other
benefits in connection with the termination of his service with the Company.
(b) ENGAGEMENT AS CONSULTANT. Commencing on the Effective Time,
Consultant is hereby engaged as an outside consultant to the Company, and, as
requested by the Company, subject to the terms and conditions of this Agreement,
Consultant shall provide advice and information to the Company regarding general
operations, management and transitions issued following the consummation of the
Merger (the "Services") throughout the Term (as defined below). Consultant shall
provide the Services when and as reasonably requested by the Company, up to a
maximum of 14 hours per month. Consultant shall not be obligated to travel
outside of Salt Lake City, Utah in order to perform the Services and shall
receive reasonable prior notice of each time Consultant is being asked to
perform Services.
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2. TERM. This Agreement shall be valid and binding on the parties hereto
as of the date first set forth above; provided, however, none of the affirmative
covenants hereunder shall be effective unless and until the Merger is
consummated. If (a) the Merger Agreement is terminated pursuant to Article VII
thereof, or (b) the Merger is not consummated by June 30, 2002, the affirmative
covenants in this Agreement shall not become effective, and this Agreement shall
be void ab initio. If the Merger Agreement is consummated, the affirmative
covenants of this Agreement shall be effective during the period commencing at
the Effective Time and continuing until December 31, 2002 (the "Term").
3. COMPENSATION.
(a) CONSULTING FEE. The Company shall pay to Consultant a
consulting fee (the "Fee") of $8,000 per month (pro rated for any partial
months) during the Term. The Fee shall be payable (i) 40% of the aggregate Fee
immediately prior to the Effective Time (together with all accrued and unpaid
salary of Consultant through the Effective Time), and (ii) $4,800 per month
(prorated for any partial month) on the last day of each month during the Term.
(b) OPTIONS. In consideration of Consultant's service as an
officer and director, and in anticipation of Consultant's future service as a
consultant, the Company shall execute and deliver to Consultant on the date
hereof a Stock Option Agreement in the form attached hereto as EXHIBIT A.
4. MANNER OF SERVICES. Consultant shall provide the Services to the
Company in the highest quality manner and shall adhere to professional standards
customary for other professionals performing similar functions. Consultant
agrees to devote such time and attention, up to a maximum of 14 hours per month,
as is necessary and appropriate to perform the Services on a timely basis and in
a professional manner.
5. INDEPENDENT CONTRACTOR.
(a) Following the Effective Time, Consultant will not be an
employee of the Company for any purpose whatsoever, but will be an independent
contractor for all purposes, including with respect to workers' compensation
laws, unemployment insurance laws, Social Security laws, and the United States
Internal Revenue Code. For that reason, no payroll deductions or payments will
be made by the Company for unemployment insurance, workers' compensation, Social
Security, or taxes. Consultant understands and agrees that Consultant shall be
responsible for his federal, state and local income taxes, self-employment
taxes, Social Security taxes, and any other taxes and that the Company may be
required to report its payments to Consulting to taxing authorities.
(b) Following the Effective Time, Consultant shall act as and be
an independent contractor and shall not be subject to the supervision or control
of the Company and shall generally have control and responsibility for when,
where and how the Services are to be performed, so long as the Services are
performed within the reasonable time constraints set by the Company consistent
with the needs of the Company for the Services as contemplated under this
Agreement. The Company shall not have any obligation to provide office space,
equipment, support staff, supplies, or facilities to enable Consultant to
perform the Services under this Agreement (except that the Company shall
reimburse Consultant for all pre-approved travel expenses incurred in connection
with the Services).
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(c) Following the Effective Time, Consultant shall not be an agent
of the Company and shall have no right or authority to act on behalf, bind or
incur any obligations whatsoever on behalf or in the name of the Company.
6. MODIFICATION; WAVIER; DISCHARGE. No provisions of this Agreement may be
modified, waived or discharged unless such waiver, modification or discharge is
agreed to in writing signed by each of the parties hereto. No waiver by either
party hereto at any time of any breach by the other party hereto of, or
compliance with, any condition or provision of this Agreement to be performed by
such other party shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time.
7. CONFIDENTIALITY.
A. Consultant recognizes that during the course of providing the
Services, Consultant shall review, receive and otherwise obtain confidential or
proprietary information and materials from the Company, including information
relating to inventions, patent, trademark and copyright applications,
improvements, know-how, source code, specifications, drawings, cost and pricing
data, process flow diagrams, bills, customer and vendor lists, ideas, business
plans and/or any written material or electronic storage mediums referring to or
containing same (the "Confidential Information"). Notwithstanding the foregoing,
the Confidential Information shall not include any information that (i) is made
public by an act or omission of the Company or its authorized representative,
(ii) is received from an unrelated third party that (after due and reasonable
inquiry) Consultant determines is not bound by an obligation of confidentiality,
or (iii) is required to be disclosed pursuant to a court order (provided that
Consultant shall give the Company five days prior written notice prior to making
a disclosure under this subsection (iii)).
B. Consultant covenants and agrees that during the term of this
Agreement and forever after its termination or expiration, Consultant (1) shall
not disclose the Confidential Information to any person or entity other than
employees of the Company in the course of providing the Services, (2) shall not
use such Confidential Information for the benefit of Consultant's own business
or for the benefit of any person or entity other than the Company, and (3) upon
request, shall promptly return to the Company any materials, including all
memoranda, computer disks or other storage media, drawings, patent, trademark
and copyright applications, specifications and process or flow diagrams,
including any copies, notes, or memoranda made by Consultant, that in any way
relate to the Confidential Information.
8. BINDING EFFECT; ASSIGNMENT. This Agreement shall be binding upon and
inure to the benefit of the successors and permitted assigns of Consultant and
the Company. Neither party may assign this Agreement or the rights granted
hereunder without the prior written consent of the other party.
9. COMPLETE AGREEMENT. The Company and Consultant acknowledge that this
Agreement, including EXHIBIT A attached hereto, contains the full and complete
agreement between the parties with respect to the subject matter contained
herein and that there are no oral or implied agreements or other modifications
not specifically set forth herein or therein.
10. COUNTERPARTS. This Agreement may be executed in counterparts and by
facsimile, each of which
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shall be deemed to be an original but all of which together will constitute
one and the same instrument.
11. HEADINGS. The headings contained herein are for reference purposes only
and shall not in any way affect the meaning or interpretation of this Agreement.
12. GOVERNING LAW. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the State of
Nevada without regard to its conflicts-of-law principles, and each party hereby
expressly submits themselves to the exclusive, personal jurisdiction of the
courts situate in the State of Nevada, with respect to any and all claims
demands and/or causes of action asserted or filed by any party in any way
relating to, or arising out of, this Agreement or the subject matter hereof.
[intentionally left blank; signature page follows]
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IN WITNESS WHEREOF, Consultant and the Company have executed this
Consulting Agreement as of the date first above written.
COMPANY:
Sensar Corporation
By: /s/ Xxxxxx Xxxxxxxxxx
------------------------------
Its: Chief Financial Officer
-----------------------------
CONSULTANT:
/s/ Xxxxxx Xxxxxxxx
-----------------------------------
Xxxxxx Xxxxxxxx
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EXHIBIT A
TO
CONSULTING AGREEMENT
STOCK OPTION AGREEMENT
[see attached]
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