M-WAVE, INC. CONSULTING AGREEMENT
Exhibit
10.2
M-WAVE,
INC.
This
Consulting Agreement (the “Agreement”) is made by and between M-Wave, Inc., (the
“Company”), and Xxx Xxxxx, doing business as Smallcap Advisory Services LLC, at
the address set forth on the signature page hereto (collectively, the
“Consultant”). This Agreement shall commence and become effective
immediately upon the Effective Date of the Separation Agreement (as defined in
that agreement) referenced under paragraph 13 below and subject to the terms and
conditions of the Separation Agreement (including paragraph 16 of that
agreement). The Company desires to retain Consultant as an
independent contractor to perform consulting services for the Company and
Consultant is willing to perform such services, on terms set forth more fully
below. In consideration of the mutual promises contained herein, the
parties agree as follows:
1. SERVICES
AND COMPENSATION
(a) Consultant
agrees to perform for the Company the services (“Services”) described in Exhibit 1
attached hereto.
(b) The
Company agrees to pay Consultant the compensation set forth in Exhibit 1 for
the performance of the Services.
2. CONFIDENTIALITY
(a) Definition. “Confidential
Information” means any Company proprietary information, technical data, trade
secrets or know-how, including, but not limited to, research, product plans,
products, services, customers, customer lists, markets, software, developments,
inventions, processes, formulas, technology, designs, drawings, engineering,
hardware configuration information, marketing, finances or other business
information disclosed by the Company either directly or indirectly in writing,
orally or by drawings or inspection of parts or equipment.
(b) Non-Use and
Non-Disclosure. Consultant will not, during or subsequent to
the term of this Agreement, use the Company’s Confidential Information for any
purpose whatsoever other than the performance of the Services on behalf of the
Company or disclose the Company’s Confidential Information to any third
party. It is understood that said Confidential Information shall
remain the sole property of the Company. Consultant further agrees to
take all reasonable precautions to prevent any unauthorized disclosure of such
Confidential Information including, but not limited to, having each employee of
Consultant, if any, with access to any Confidential Information, execute a
nondisclosure agreement containing provisions in the Company’s favor identical
to Section 2 of this Agreement. Confidential Information does not
include information which: (i) is known to Consultant at the time of disclosure
to Consultant by the Company as evidenced by written records of Consultant; (ii)
has become publicly known and made generally available through no wrongful act
of Consultant; or (iii) has been rightfully received by Consultant from a third
party who is authorized to make such disclosure. Without the
Company’s prior written approval, Consultant will not directly or indirectly
disclose to anyone the existence of this Agreement or the fact that Consultant
has this arrangement with the Company.
(c) Third Party Confidential
Information. Consultant recognizes that the Company has
received and in the future will receive from third parties their confidential or
proprietary information subject to a duty on the Company’s part to maintain the
confidentiality of such information and to use it only for certain limited
purposes. Consultant agrees that Consultant owes the Company and such
third parties, during the term of this Agreement and thereafter, a duty to hold
all such confidential or proprietary information in the strictest confidence and
not to disclose it to any person, firm or corporation or to use it except as
necessary in carrying out the Services for the Company consistent with the
Company’s agreement with such third party.
(d) Other Consultant
Confidential Information. Consultant agrees that Consultant
will not, during the term of this Agreement, improperly use or disclose any
proprietary information or trade secrets of any third party with which
Consultant has an agreement or duty to keep in confidence information acquired
by Consultant, if any, and that Consultant will not bring onto the premises of
the Company any unpublished document or proprietary information belonging to
such party unless consented to in writing by such party. Consultant
will indemnify the Company and hold it harmless from and against all claims,
liabilities, damages and expenses, including reasonable attorneys fees and costs
of suit, arising out of or in connection with any alleged or actual violation or
misappropriation of a third party’s rights resulting in whole or in part from
the Company’s use of the work product of Consultant under this
Agreement.
(e) Return of
Materials. Upon the termination of this Agreement, or upon
Company’s earlier request, Consultant will deliver to the Company all of the
Company’s property or Confidential Information that Consultant may have in
Consultant’s possession or control.
3. OWNERSHIP
(a) Assignment. Consultant
agrees that all copyrightable material, notes, records, drawings, designs,
inventions, improvements, developments, discoveries and trade secrets
(collectively, “Work Product”) conceived, discovered, developed or reduced to
practice by Consultant, solely or in collaboration with others, during the term
of this Agreement which relate in any manner to the business of the Company that
Consultant may be directed to undertake, investigate or experiment with, or
which Consultant may become associated with in work, investigation or
experimentation in the Company’s line of business in performing the Services
hereunder, are the sole property of the Company. Consultant further
agrees to assign (or cause to be assigned) and does hereby assign fully to the
Company all Work Product and any copyrights, patents, mask work rights or other
intellectual property rights relating thereto. Consultant hereby
waives any and all moral rights.
(b) Further
Assurances. Consultant agrees to assist the Company, or its
designee, at the Company’s expense, in every proper way to secure the Company’s
rights in the Work Product and any copyrights, patents, mask work rights or
other intellectual property rights relating thereto in any and all countries,
including the disclosure to the Company of all pertinent information and data
with respect thereto, the execution of all applications, specifications, oaths,
assignments and all other instruments which the Company shall deem necessary in
order to apply for and obtain such rights and in order to assign and convey to
the Company, its successors, assigns and nominees the sole and exclusive right,
title and interest in and to such Work Product, and any copyrights, patents,
mask work rights or other intellectual property rights relating
thereto. Consultant further agrees that Consultant’s obligation to
execute or cause to be executed, when it is in Consultant’s power to do so, any
such instrument or papers shall continue after the termination of this
Agreement.
(c) Pre-Existing
Materials. Consultant agrees that if in the course of
performing the Services, Consultant incorporates into any Work Product developed
hereunder any invention, improvement, development, concept, discovery or other
proprietary information owned by Consultant or in which Consultant has an
interest: (i) Consultant shall inform Company, in writing before
incorporating such invention, improvement, development, concept, discovery or
other proprietary information into any Work Product; and (ii) the Company is
hereby granted and shall have a nonexclusive, royalty-free, perpetual,
irrevocable, worldwide license to use, perform, display, make, reproduce, make
derivative works, import, sell, offer for sale, license, distribute, and
otherwise dispose of such invention, improvement, development, concept,
discovery or other proprietary information as part of or in connection with such
Work Product, with the right to license such rights to
others. Consultant shall not incorporate any invention, improvement,
development, concept, discovery or other proprietary information owned by any
third party into any Invention without Company’s prior written
permission.
(d) Attorney in
Fact. Consultant agrees that if the Company is unable because
of Consultant’s unavailability, dissolution, mental or physical incapacity, or
for any other reason, to secure Consultant’s signature to apply for or to pursue
any application for any United States or foreign patents or mask work or
copyright registrations covering the Work Product assigned to the Company above,
then Consultant hereby irrevocably designates and appoints the Company and its
duly authorized officers and agents as Consultant’s agent and attorney in fact,
to act for and in Consultant’s behalf and stead to execute and file any such
applications and to do all other lawfully permitted acts to further the
prosecution and issuance of patents, copyright and mask work registrations
thereon with the same legal force and effect as if executed by
Consultant.
4. WARRANTIES
(a) Consultant
Warranty. Consultant shall perform the obligations described
herein in a good and workmanlike manner with due diligence and in full
compliance with the terms and conditions of this Agreement and all mutually
agreed to specifications, statements of work, and acceptance
criteria. Consultant, at its expense, shall use reasonable efforts to
correct any Services or Work Product performed by or delivered by Consultant
that do not conform to the foregoing warranty.
(b) Further Warranties.
Consultant further warrants that: (i) the Work Product is or will be
original to Consultant; (ii) Consultant has not previously granted and will
not grant any rights in the Work Product to any third party that are
inconsistent with the rights granted to Company herein; (iii) each of
Consultant’s employees, consultants, contractors, partners, or agents who has
been or will be involved in the performance of the Services has or will have
signed an agreement with Consultant conveying all proprietary and intellectual
property rights in or relating to the Work Product to Consultant and agreeing to
maintain in confidence all trade secrets and non-Consultant proprietary
information embodied in the Work Product or acquired while performing the
Services or having access to Work Product; (iv) all Work Product, and the
intended uses thereof, shall be free of any third party claims with respect to
intellectual property or other proprietary rights and shall be free of any third
party liens, encumbrances, security interests, or any similar restrictions;
(v) unless
provided by Company, Consultant will provide all
necessary personnel, facilities, and materials to facilitate efficient and
effective completion of the Services; (vi) Consultant will exert Consultant’s
best efforts to use a repeatable and proven process to design, develop, test,
deliver, and document the Work Product, or any part thereof; and
(vii) Consultant has full power and authority to enter into this Agreement,
to carry out its obligations under this Agreement and to grant the rights
granted to Company hereunder.
(c) Warranty
Indemnity. Consultant shall indemnify and hold the Company
harmless from and against any claims, damages, or liabilities resulting from
Consultant’s breach of the foregoing warranties.
5. CONFLICTING
OBLIGATIONS
(a) Consultant
certifies that Consultant has no outstanding agreement or obligation that is in
conflict with any of the provisions of this Agreement, or that would preclude
Consultant from complying with the provisions hereof, and further certifies that
Consultant will not enter into any such conflicting agreement during the term of
this Agreement.
(b) In
view of Consultant’s access to the Company’s trade secrets and proprietary
know-how, Consultant further agrees that Consultant will not, without Company’s
prior written consent, design identical or substantially similar designs as any
that may be developed in connection with this Agreement for any third party
during the term of this Agreement and for a period of twelve (12) months
after the termination of this Agreement. Consultant acknowledges that the
obligations in this Section 5 are ancillary to Consultant’s nondisclosure
obligations under Section 2.
6. REPORTS
Consultant
agrees that he will from time to time during the term of this Agreement or any
extension thereof keep the Company advised as to Consultant’s progress in
performing the Services hereunder and that Consultant will, as requested by the
Company, prepare written reports with respect thereto. It is
understood that the time required in the preparation of such written reports
shall be considered time devoted to the performance of Consultant’s
Services.
7. TERM AND
TERMINATION
(a) Term. This
Agreement will commence on the date first written above and will continue until
August 15, 2008 ; or (ii) termination as provided below.
(b) Termination. The
Company may terminate this Agreement immediately and without prior notice if
Consultant: (i) refuses to or is unable to perform the Services, or (ii) is in
breach of any material provision of this Agreement or the Separation
Agreement. Any determination of whether the Consultant has met the
termination requirements of 7(b) shall be made by the Company in its sole
discretion.
(c) Survival. Upon
termination of this Agreement pursuant to Section 7(a) or (b), all rights and
duties of the parties toward each other shall cease except:
(i) that
the Company shall be obliged to pay, within thirty (30) days of the effective
date of termination, all amounts owing to Consultant for Services completed and
accepted by the Company prior to the termination date and related expenses, if
any, in accordance with the provisions of Section 1; and
(ii) Sections 2
(Confidentiality), 3 (Ownership), 4 (Warranties), 5 (Conflicting
Obligations), 9 (Independent Contractor), and 11 (Arbitration and Equitable
Relief) shall survive termination of this Agreement.
8. ASSIGNMENT
Neither
this Agreement nor any right hereunder or interest herein may be assigned or
transferred by Consultant without the express written consent of the
Company. The Company may assign this Agreement in its
discretion.
9. INDEPENDENT
CONTRACTOR
(a) Nature of
Relationship. It is the express intention of the parties that
Consultant is an independent contractor. Nothing in this Agreement
shall in any way be construed to constitute Consultant as an agent, employee or
representative of the Company, but Consultant shall perform the Services
hereunder as an independent contractor. Consultant agrees to furnish
(or reimburse the Company for) all tools and materials necessary to accomplish
this contract, and shall incur all expenses associated with performance, except
as expressly provided on Exhibit 1 of
this Agreement. Consultant acknowledges and agrees that Consultant is
obligated to report as income all compensation received by Consultant pursuant
to this Agreement, and Consultant agrees to and acknowledges the obligation to
pay all self-employment and other taxes thereon.
(b) Independent Contractor
Indemnification. Consultant agrees to indemnify and hold
harmless the Company and its directors, officers and employees from and against
all taxes, losses, damages, liabilities, costs and expenses, including
attorneys’ fees and other legal expenses, arising directly or indirectly from or
in connection with: (i) any negligent, reckless or intentionally wrongful
act of Consultant or Consultant’s assistants, employees or agents; (ii) a
determination by a court or agency that the Consultant is not an independent
contractor; (iii) any breach by the Consultant or Consultant’s assistants,
employees or agents of any of the covenants contained in this Agreement; (iv)
any failure of Consultant to perform the Services in accordance with all
applicable laws, rules and regulations; or (v) any violation or claimed
violation of a third party’s rights resulting in whole or in part from the
Company’s use of the work product of Consultant under this
Agreement.
10. BENEFITS
Consultant
acknowledges and agrees and it is the intent of the parties hereto that neither
Consultant nor any employees or contractors of Consultant receive any
Company-sponsored benefits from the Company either as a consultant or
employee. Such benefits include, but are not limited to, paid
vacation, sick leave, medical insurance, and 401(k) participation. If
Consultant is reclassified by a state or federal agency or court as an employee,
Consultant will become a reclassified employee and will receive no benefits
except those mandated by state or federal law, even if by the terms of the
Company’s benefit plans in effect at the time of such reclassification
Consultant would otherwise be eligible for such benefits.
11. ARBITRATION
AND EQUITABLE RELIEF
(a) Disputes. Except
as provided in Section 11(d), the Company and Consultant agree that any
dispute or controversy arising out of, relating to or in connection with the
interpretation, validity, construction, performance, breach or termination of
this Agreement shall be settled by binding arbitration to be held in [Insert
County], Illinois, in accordance with the rules then in effect of the American
Arbitration Association. The arbitrator may grant injunctions or
other relief in such dispute or controversy. The decision of the
arbitrator shall be final, conclusive and binding on the parties to the
arbitration. Judgment may be entered on the arbitrator’s decision in
any court of competent jurisdiction.
(b) Consent to Personal
Jurisdiction. The arbitrator(s) shall apply Illinois law to
the merits of any dispute or claim, without reference to conflicts of law
rules. Consultant hereby consents to the personal jurisdiction of the
state and federal courts located in DuPage County, Illinois for any action or
proceeding arising from or relating to this Agreement or relating to any
arbitration in which the parties are participants.
(c) Costs. The
Company and Consultant shall each pay one-half of the costs and expenses of such
arbitration, and each shall separately pay its counsel fees and expenses unless
otherwise required by law.
(d) Equitable
Relief. The parties may apply to any court of competent
jurisdiction for a temporary restraining order, preliminary injunction, or other
interim or conservatory relief, as necessary, without breach of this arbitration
agreement and without abridgment of the powers of the arbitrator.
(e) Acknowledgment. CONSULTANT
HAS READ AND UNDERSTANDS SECTION 11, WHICH DISCUSSES
ARBITRATION. CONSULTANT UNDERSTANDS THAT BY SIGNING THIS AGREEMENT,
CONSULTANT AGREES TO SUBMIT ANY CLAIMS ARISING OUT OF, RELATING TO, OR IN
CONNECTION WITH THIS AGREEMENT, OR THE INTERPRETATION, VALIDITY, CONSTRUCTION,
PERFORMANCE, BREACH OR TERMINATION THEREOF, TO BINDING ARBITRATION, EXCEPT AS
PROVIDED IN SECTION 11(d), AND THAT THIS ARBITRATION CLAUSE CONSTITUTES A
WAIVER OF CONSULTANT’S RIGHT TO A JURY TRIAL AND RELATES TO THE RESOLUTION OF
ALL DISPUTES RELATING TO ALL ASPECTS OF THE RELATIONSHIP BETWEEN THE
PARTIES.
12. GOVERNING
LAW
This
Agreement shall be governed by the internal substantive laws, but not the choice
of law rules, of the State of Illinois.
13. ENTIRE
AGREEMENT
This
Agreement is the entire agreement of the parties and supersedes any prior
agreements between them, whether written or oral, with respect to the subject
matter hereof, with the exception of the Separation Agreement and Release
between Consultant and the Company (the “Separation Agreement”), and any
agreement expressly survived under the Separation Agreement. No
waiver, alteration, or modification of any of the provisions of this Agreement
shall be binding unless in writing and signed by Consultant and a designated
representative of the Company upon written authorization via a resolution of the
Company’s Board of Directors.
14. ATTORNEY’S
FEES
In any
court action at law or equity which is brought by one of the parties to enforce
or interpret the provisions of this Agreement, the prevailing party will be
entitled to reasonable attorney’s fees, in addition to any other relief to which
that party may be entitled.
15. SEVERABILITY
The
invalidity or unenforceability of any provision of this Agreement, or any terms
thereof, shall not affect the validity of this Agreement as a whole, which shall
at all times remain in full force and effect.
16. NOTICES
Any
notice shall be addressed to the party being notified at the address set forth
in this Agreement or such other address as either party may notify the other of
and shall be deemed given upon delivery if personally delivered or transmitted
via facsimile or reliable overnight carrier (with tracking capability), or
forty-eight (48) hours after being deposited in the United States mail, postage
prepaid, registered or certified mail, return receipt
requested.
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day
and year first above written.
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Company:
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Consultant:
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M-Wave,
Inc.
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By:
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Print
Name:
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Print
Name:
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Title:
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Date:
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Date:
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Address:
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Address:
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EXHIBIT
1
SERVICES AND
COMPENSATION
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1.
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Contact. Consultant’s
principal Company contact:
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(a) Name: Xxx
Xxxxx
(b) Title: Chairman
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2.
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Services. Consultant
will render to the Company the following
Services:
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Consultant
will perform the services requested by the Company, including any assistance
with the transition of Consultant’s responsibilities as the former Chief
Executive Officer of the Company and assistance regarding business matters of
the Company. Consultant shall also perform such other duties and
responsibilities as the Company’s CEO and/or the Board of Directors shall from
time to time assign to him.
Consultant
shall provide a written report to the Company, weekly, of all Services performed
under this Agreement.
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3.
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Compensation. Consultant
will receive the following compensation for the
Services:
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(a) Payment: Consultant
shall receive Fifteen Thousand Dollars and No/Cents ($15,000.00) per
thirty (30) day period for the Services provided under this Agreement (not
to exceed $60,000.00 dollars total for all Services provided hereunder and
subject to the terms and conditions of this Agreement). Any
such payment may be pro-rated as necessary for a partial thirty (30) day
period of service by Consultant. Consultant shall provide
invoices for all Services performed under this Agreement, which shall be
provided at the end of the thirty (30) day period in which the relevant
Services were provided. The Company shall provide payment for such
Services within five (5) business days from receipt of the invoice from
Consultant.
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(b) Expenses: The Company
shall provide reimbursement of certain pre-approved expenses incurred by
Consultant with the prior written consent of the Company’s Board of
Directors, in its sole discretion, in connection with the performance of
the Services hereunder. The Company shall provide reimbursement
for such expenses within five (5) business days from receipt of the
expense report and any required supporting documentation (as requested by
the Company) from Consultant.
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(c) Records and Reports:
Consultant agrees to keep accurate and complete records regarding the
performance of all Services for the Company and to provide such detailed
records in his weekly report .
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CONSULTING
AGREEMENT
COMPANY CONFIDENTIAL
9
