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EXHIBIT 10.40
CONSULTING AGREEMENT
Effective Date: April 30, 1997
THIS CONSULTING AGREEMENT (the "Agreement") is made by and between
ChemTrak, Inc. ("Company"), a Delaware corporation, Parent's Alert, Inc., a
Georgia corporation ("Parent's Alert") and Sunny Cloud, an individual
("Consultant").
1. ENGAGEMENT OF SERVICES. The Company hereby engages Parent's Alert to
provide such consulting services as the Company may request from time to time in
connection with the promotion, marketing, distribution and sale of home drug
test kits. Parent's Alert shall provide such services through Consultant.
Consultant agrees to make herself available to the Company to perform such
services, at times and places to be mutually agreed upon, for up to twenty (20)
hours per week during the first 6 months after the Effective Date of this
Agreement, and for up to fifteen (15) hours per week thereafter. Consultant
agrees to perform such services in a professional manner consistent with the
directions of the Company.
2. COMPENSATION. Company will pay Parent's Alert a monthly consulting
fee of [*]. Payment of Parent's Alert's fees will be made within ten (10) days
after the end of each calendar month during the term of this Agreement (and be
prorated for the first and last month hereunder). If Consultant performs
services at the request of the Company for more than [*] per quarter during the
term of this Agreement, the Company shall pay Consultant at a rate of [*] for
each hour over [*]. Consultant shall be responsible for documenting her time
spent performing services and reporting such time to the Company on a monthly
basis. Any report submitted by Consultant, which the Company does not reject
within ten (10) business days of receipt shall be deemed accepted. Reported
compensable time may include, but shall not be limited to, travel time,
preparation time, phone time and time spent on administration.
3. EXPENSES. Consultant will be reimbursed for travel and other
expenses incurred while performing services. The Company shall establish and
maintain an expense account of [*] from which Consultant may draw expense
advances, for expenses pre-approved by the Company. The Company shall replenish
the expense account upon submission by Consultant of verification of approved
expenses actually incurred.
4. OWNERSHIP OF WORK PRODUCT. Parent's Alert and Consultant hereby
assign to the Company all right, title and interest in and to any work product
(the "Work Product") created by Consultant, or to which consultant contributes,
which is related to the Products (as defined in the License Agreement between
Company and Parent's Alert of even date herewith (the "License Agreement"),
including all copyrights, trademarks and other intellectual property rights
contained therein. Notwithstanding the foregoing, Parent's Alert and Consultant
shall own all right title and interest in and to any work product unrelated to
the Products, including all copyrights, trademarks and other intellectual
property rights contained therein.
* Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has
been requested with respect to the omitted portions.
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5. INDEPENDENT CONTRACTOR RELATIONSHIP. The relationship of Parent's
Alert and Consultant with Company is that of independent contractors, and
nothing in this Agreement is intended to, or should be construed to, create a
partnership, agency, joint venture or employment relationship. Consultant will
not be entitled to any of the benefits which Company may make available to its
employees, including, but not limited to, group health or life insurance,
profit-sharing or retirement benefits. Neither Parent's Alert nor Consultant is
authorized to make any representation, contract or commitment on behalf of
Company unless specifically requested or authorized in writing to do so by a
Company officer. Parent's Alert is solely responsible for, and will file, on a
timely basis, all tax returns and payments required to be filed with, or made
to, any federal, state or local tax authority with respect to the performance of
services and receipt of fees under this Agreement. Parent's Alert and Consultant
are solely responsible for, and must maintain adequate records of,
expenses.incurred in the course of performing services under this Agreement. No
part of Parent's Alert's compensation will be subject to withholding by Company
for the payment of any social security, federal, state or any other employee
payroll taxes. Company will regularly report amounts paid to Parent's Alert by
filing Form 1099-MISC with the Internal Revenue Service as required by law.
6. NO CONFLICT OF INTEREST. During the term of this Agreement, Parent's
Alert and Consultant will not engage in any activities independently, accept
work, enter into a contract, or accept an obligation from any third party
relating to the marketing and sale of products for in-home testing for use of
drugs of abuse including but not limited to, [*] ("Home Drug Testing Products").
Consultant warrants that there is no other contract or duty on its part
inconsistent with this Agreement, including but not limited to any contract with
or duty to Parent's Alert, Inc.
7. TERM AND TERMINATION.
7.1 TERM. The initial term of this Agreement is for three (3)
years from the Effective Date set forth above, unless earlier terminated as
provided in this Agreement. This Agreement shall be renewed automatically for
successive one-year terms unless either Parent's Alert or the Company gives the
other written notice of its intent to terminate the Agreement sixty (60) days
prior to the expiration of the initial term or any renewal term; and further
provided that the fees payable under paragraph 2 above shall be increased by [*]
in year four of the Agreement and by an additional [*] in year five of the
Agreement and [*] thereafter.
7.2 TERMINATION BY COMPANY. The Company may terminate this
Agreement at any time if the License Agreement is terminated by either party
pursuant to Section 8 of the License Agreement. Company also may terminate this
Agreement: (i) upon forty-five (45) days written notice in the event of a
material breach by Consultant of this Agreement, provided that, such breach
remains uncured at the end of such forty-five (45) day period; or (ii)
immediately upon Consultant's material breach of Section 8 ("Noninterference
with Business"). The Company
* Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has
been requested with respect to the omitted portions.
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also may terminate this Agreement at any time for any other reason, provided
that Company makes the [*] payments to Parent's Alert provided for in Section 2
for [*].
7.3 TERMINATION BY PARENT'S ALERT. Parent's Alert may
terminate this Agreement if the License Agreement is terminated pursuant to
Section 8(a) of the License Agreement as a result of a material breach by the
Company provided that such breach remains uncured at the end of the forty-five
(45) day cure period, or in the event that the License Agreement is terminated
by the Company pursuant to Section 8(f) thereof. In either such event, Company
shall be obligated to make the [*] payments to Parent's Alert provided for in
Section 2 for [*].
7.4 SURVIVAL. The rights and obligations contained in Section
2 ("Ownership of Work Product"), 5 ("Confidential Information.) and 8
("Noninterference of Business") will survive any termination or expiration of
this Agreement.
8. NONINTERFERENCE WITH BUSINESS. During this Agreement, and for a
period of two years immediately following its termination, each party agrees not
to disparage the business of any other party or its products or services in any
manner.
9. CONFIDENTIAL INFORMATION
9.1 CONFIDENTIAL INFORMATION. During the term of this
Agreement, and for a period of five (5) years after expiration or termination
thereof, Consultant will maintain all Confidential Information in trust and
confidence and will not disclose any such Confidential Information to any third
party or use any Confidential Information for any unauthorized purpose.
"Confidential Information" shall mean all information provided by ChemTrak to
Consultant that is identified in writing as confidential, including but not
limited to ChemTrak sales information. Consultant may use such Confidential
Information only to the extent required to accomplish the purposes of this
Agreement. Confidential Information shall not be used for any purpose or in any
manner that would constitute a violation of any laws or regulations, including
without limitation, the export control laws of the United States. Confidential
Information shall not be reproduced in any form except as required to accomplish
the intent of this Agreement. No Confidential Information shall be disclosed to
any employee, agent, or consultant who does not have a need for such
information. To the extent that disclosure is authorized by this Agreement,
Consultant will obtain prior agreement from her employees, agents, consultants,
or other parties to whom disclosure is to be made to hold in confidence and not
make use of such information for any purpose other than those permitted by this
Agreement. Consultant will promptly notify ChemTrak upon discovery of any
unauthorized use or disclosure of the Confidential Information.
9.2 EXCEPTIONS. Confidential Information shall not include any
information which:
* Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has
been requested with respect to the omitted portions.
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(a) is now, or hereafter becomes, through no act or
failure to act on the part of Consultant, generally known or available, or
(b) is the subject of a written permission to disclose
provided by ChemTrak.
Consultant agrees that the material financial terms of this Agreement will be
considered Confidential Information of both parties. Notwithstanding the
foregoing, Parent's Alert may disclose both the existence of this Agreement and
the terms thereof to bona fide prospective investors, corporate partners,
lenders and bona fide potential Sublicensees; in connection with any such
disclosure, Parent's Alert will use its best efforts to secure confidential
treatment of such information.
9.3 Authorized Disclosure. Notwithstanding any other Provision
of this Agreement, Consultant may disclose Confidential Information if such
disclosure:
(a) is in response to a valid order of a court or other
governmental body of the United States or any political subdivision thereof;
provided, however, that Consultant shall first have given notice to ChemTrak and
shall have made a reasonable effort to obtain a protective order requiring that
the Confidential Information so disclosed be used only for the purposes for
which the order was issued; or
(b) is otherwise required by law.
10. SUCCESSORS AND ASSIGNS. Parent's Alert may not subcontract or
otherwise delegate its obligations under this Agreement without Company's prior
written consent. Subject to the foregoing, this Agreement will be for the
benefit of Company's successors and assigns, and will be binding on Consultant's
assignees.
11. GOVERNING LAW AND DISPUTE RESOLUTION. This Agreement shall be
governed in all respects by the laws of the State of California, as such laws
are applied to agreements entered into and to be performed entirely within
California between California residents. The parties agree that personal
jurisdiction and venue shall be proper in state and federal courts in Xxxx and
Xxxxxx Counties, Georgia, in all lawsuits relating to or arising out of this
Agreement. The parties hereby waive any defense of improper personal
jurisdiction or venue in these courts.
12. SEVERABILITY. Should any provisions of this Agreement be held by a
court of law to be illegal, invalid or unenforceable, the legality, validity and
enforceability of the remaining provisions of this Agreement shall not be
affected or impaired thereby.
13. WAIVER. The waiver by Company of a breach of any provision of this
Agreement by Consultant shall not operate or be construed as a waiver of any
other or subsequent breach by Consultant.
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14. NOTICES. Any notice or other communication required or which may be
given hereunder shall be in writing and shall be delivered personally,
telegraphed, telexed or sent by facsimile, or sent by certified, registered or
express mail, postage prepaid and shall be deemed given when so delivered
personally, telegraphed or telexed or sent by facsimile or computer
transmission, or if mailed, five (5) days after the date of mailing, as follows:
If to Company to:
ChemTrak Inc.
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000-0000
ATTN: Xx. Xxxxxx X. Xxxxxx
President and Chief Executive Officer
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With a copy to:
Xxxxxx Godward LLP
Five Palo Alto Square
0000 Xx Xxxxxx Xxxx
Xxxx Xxxx, Xxxxxxxxxx 00000-0000
ATTN: Xxxx X. Xxxxxxxxx. Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to Parent's Alert:
Parent's Alert
Xxxxx 000, 0000 Xxx Xxxxxxxx
Xxxxxxx, Xxxxxxx 30339-2022
ATTN: Xx. Xxxxx X. Xxxxxx, Xx., Vice President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
and
Parent's Alert, Inc.
X.X. Xxx 000000
Xxxxxxx, Xxxxxxx 00000-0000
ATTN: Ms. Sunny L. Cloud, President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
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With a copy to:
Paul, Hastings, Xxxxxxxx & Xxxxxx LLP
Suite 2400, 000 Xxxxxxxxx Xxxxxx, XX
Xxxxxxx, Xxxxxxx 00000-0000
ATTN: W. Xxxxxx Xxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
15. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties relating to this subject matter and supersedes all prior or
contemporaneous oral or written agreements concerning such subject matter.
Company and Consultant acknowledge that certain other rights and obligations
relating to the home drug test kit have been agreed to between Company and
Parent's Alert, Inc. in the License Agreement. The terms of this Agreement will
govern all services undertaken by Consultant for Company. This Agreement may
only be changed by mutual agreement of authorized representatives of the parties
in writing.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
CHEMTRAK, INC.
SUNNY CLOUD
By:_________________________________ Signature:____________________________
Name:_______________________________ Address:______________________________
Title:______________________________ ______________________________________
Address: 000 X. Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000-0000 PARENT'S ALERT, INC.
By:___________________________________
Name:_________________________________
Title:________________________________
