EXHIBT 10.16
CONSULTING AGREEMENT
This Consulting Agreement ("Agreement") is effective as of
February 1, 2003 ("Effective Date"), by and between Xxxxxx X. Xxxxxxx,
("Consultant") and Sorrento Networks Corporation, 0000 Xxxx Xxx Xxxx, Xxx
Xxxxx, XX ("Company").
RECITALS:
WHEREAS, Consultant is currently a director of Company and Chairman of
the Compensation Committee;
WHEREAS, Consultant currently performs consulting services for the
Company;
WHEREAS, Company has placed substantially increased demands upon
Consultant's available time for a wide variety of services, including the
establishment and implementation of an equity incentive plan, assistance in
Company's capital restructure, litigation support, intellectual property
protection and other matters;
WHEREAS, Company desires that Consultant commit to make available to
Company at least 20 hours per week at the rates specified in this Agreement; and
WHEREAS, Company and Consultant wish to enter this Agreement evidence
each parties rights and obligations with respect to consulting services.
NOW, THEREFORE, the parties agree as follows:
1. Agreement to Act as Consultant. Consultant agrees to make available
to Company not less than 20 hours per week during the term of this Agreement to
provide assistance to Company on matters as may be agreed from time to time
between Company's Chief Executive Officer ("CEO") and Consultant.
2. Duties. Consultant's duties under this Agreement shall consist of
providing advice and counsel to Company's CEO or his designee, as requested by
Company's CEO or his designee during the term of this Agreement. Consultant
shall be responsible for providing his own office, supplies and clerical support
necessary for the performance of his duties; however, Company shall reimburse
Consultant for any out-of-pocket expenses incurred by Consultant with the prior
consent of Company in furtherance of the performance of his duties hereunder.
3. Cash Retainer. Commencing March 1, 2003, Company shall pay to
Consultant 6 monthly installments of $20,000.00 per month. The subsequent 5
payments shall be made on the first of each month thereafter.
4. Payment for Services. Services performed by Consultant shall be paid
at a rate of $175.00 per hour. Payments for services shall be made upon receipt
of Consultant's invoice. Services shall be performed at the Company's request;
there is no commitment by the Company as to the number of hours of services to
be requested.
5. Term and Termination. This Agreement shall become effective on the
Effective Date and shall remain in effect for a period of 12 months; it being
understood that Company's fixed payment obligations shall be for 6 months only,
in accordance with the provisions of Article 3 hereof. Upon receipt by
Consultant of all 6 payments referenced in Article 3, this Agreement may be
terminated by either party, with or without cause, upon 5 days written notice to
the other. In the event of such termination by Company, neither party shall have
any obligations or liability to the other, including the retention obligations
under Article 3.
6. Confidential and Proprietary Information. Consultant acknowledges
that in the course of his activities pursuant to this Agreement he may receive
non-public information related to the products, technologies, procedures,
customers, sales, prices, contracts, strategies, operations, and the like.
Consultant agrees not disclose or divulge to anyone that is not an employee of
Company or any subsidiary thereof at the time of such disclosure, any non-public
information of Company or any of its subsidiaries or any Trade Secret as that
term is defined by the Uniform Trade Secrets Act (California Civil Code section
3426 et seq. ("UTSA")), including but not limited to any information relating to
Company's (or any subsidiary thereof) patents or patent applications, formulae
or processes, customer relationships, sales strategies, forecasts, business
marketing or sales plans. This paragraph is intended to be interpreted as
broadly as possible under applicable law, and is intended to supplement, not
restrict or limit, any rights Company or any subsidiary thereof may already have
under the UTSA, or any prior agreements signed by Consultant in connection with
his employment by, or separation from, Company, or any predecessor, or
subsidiary thereof. This term is intended by the parties to survive the
termination of other obligations of the parties pursuant to this Agreement.
7. Liability and Indemnity. Consultant's total liability relating to
this Agreement shall in no event exceed the cash compensation Consultant
receives hereunder for the portion of the work giving rise to liability, or
include any special, consequential, incidental or exemplary damages or loss (nor
any lost profits, savings or business opportunity). As Consultant is performing
the Services solely for the benefit of Company, Company will indemnify
Consultant against all costs, fees, expenses, damages and liabilities (including
all attorneys' fees and other defense costs) associated with any third party
claim, relating to or arising as a result of the services performed hereunder or
this Agreement. The provisions of this Article are intended to apply in all
circumstances, regardless of the grounds or nature of any claim asserted
(including contract, statute, any form of negligence, whether of Company,
Consultant, or others, tort, strict liability or otherwise) and whether or not
the party seeking indemnification was advised of the possibility of the damage
or loss asserted, to the extent not contrary to applicable law. Any action
against Consultant must be brought within 6 months after the cause of action
arises.
8. Resolution of Disputes. Any and all disputes or claims that may
arise between Consultant and Company, or any employee or subsidiary thereof,
concerning the application, interpretation or enforcement of this Agreement (but
excluding claims under the UTSA) must be resolved by binding arbitration before
a single arbitrator, to be held in San Diego. Such arbitration shall be
conducted in accordance with the Employment Dispute Resolution Rules of the
American Arbitration Association. Any party may petition any court having
jurisdiction for an order enforcing any arbitration award pursuant to this
paragraph. Following any arbitration or other proceeding pursuant to this
paragraph, the court or arbitrator shall have the authority to award the party
it determines to be the prevailing party its costs and reasonable attorneys'
fees incurred in connection with the proceeding.
9. Severability. Should any arbitrator, court or other body determine
that a term of this Agreement is unenforceable, then that term shall be deemed
to be deleted. However, the
validity and enforceability of the remaining terms shall not be affected by the
deletion of the unenforceable term.
10. Modification. This Agreement may be modified only by a writing
signed by Consultant and by a duly authorized officer of Company.
11. Approval. The obligations of Company and Consultant under this
Agreement are subject to Company obtaining the approval of Company's board of
directors.
12. Entire Agreement. This Agreement contains the entire agreement
between Consultant and Company with respect to the subject matters covered
herein, and supersedes all of the parties' rights and obligations under prior
agreements concerning the same subject matter. The parties agree that they have
no other agreements, expressed or implied, on these subjects, except as
expressly referenced herein.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the Effective
Date stated above.
CONSULTANT SORRENTO NETWORKS CORPORATION
By: __________________________ By: _______________________________
Xxxxxx X. Xxxxxxx Xxxxxxx X. Xxxxxxx
Chairman, CEO & President
By: _______________________________
Xxx Xxxxxxxxx
Chief Financial Officer
