CONSULTING AGREEMENT
This Consulting Agreement is made and entered into effective August
2, 2001, between Sonus Corp. ("Sonus"), a Yukon Territory corporation, and
Xxxxxxx X. Xxxxxxxxxx ("Xxxxxxxxxx").
RECITALS
Sonus, formerly known as HealthCare Capital Corp., has employed
Xxxxxxxxxx under a written employment agreement dated November 14, 1997
("Employment Agreement").
The parties wish to modify and replace the Employment Agreement by
providing for continued consulting services by Xxxxxxxxxx to Sonus on a limited
basis through August 2003 and to compensate Xxxxxxxxxx for those consulting
services.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants and
agreements contained herein, the parties agree as follows:
1. MODIFICATION EMPLOYMENT AGREEMENT.
a. This Consulting Agreement modifies and replaces each and every
provision of the Employment Agreement, except Section 4.3 Stock Options. Sonus
expressly agrees that all stock options granted to Xxxxxxxxxx pursuant to the
Employment Agreement will remain in effect and exercisable throughout the term
of this Consulting Agreement in accordance with the terms pursuant to which such
stock options were granted. Xxxxxxxxxx expressly agrees that all stock options
granted to him will expire on August 1, 2003, and may not be exercised after
that date. Xxxxxxxxxx also acknowledges and agrees that he will not be eligible
to receive additional options notwithstanding any additional options that may be
granted in the future with respect to full-time employees of Sonus. Xxxxxxxxxx
will be eligible to participate on the same basis as other Sonus employees in
any blanket "re-pricing" of existing options that may be undertaken by Sonus.
x. Xxxxxxxxxx will continue his current employment through August
1, 2001, under the Employment Agreement. On August 1, 2001, Sonus will pay
Xxxxxxxxxx $8,633.66 in full satisfaction of all earned and unpaid compensation
as an employee of Sonus, including accrued vacation and bonuses, to and
including such date, with the exception of $1,875 that Xxxxxxxxxx may be
entitled to as a bonus for meeting certain financial objectives during the
fiscal quarter ended July 31, 2001 (the "Fourth Quarter Bonus"). In the event
that such financial objectives are met, Sonus will pay Xxxxxxxxxx the Fourth
Quarter Bonus in accordance with its customary practice.
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2. CONSULTING SERVICES.
a. From August 2, 2001 through August 1, 2003, Xxxxxxxxxx agrees
to provide no less than 48 hours each month of consulting services to Sonus at
mutually agreed times and places.
b. The relationship between Sonus and Xxxxxxxxxx during the
period August 2, 2001 to August 1, 2003 intended by this Consulting Agreement
with respect services under this Section 2 is that of employer and employee
under the laws of the state of Oregon.
3. COMPENSATION.
a. In consideration of the consulting services for the period
beginning August 2, 2001 and ending August 1, 2003 as described above, Sonus
agrees to pay Xxxxxxxxxx $7,083.33 per month, less applicable employee
deductions for taxes and benefits, on the scheduled payroll dates of Sonus.
b. In the event that any of the 48 hours of consulting services
each month requires overnight travel, Sonus will pay Xxxxxxxxxx an additional
$75 per hour for each hour of consulting (travel time not included) performed
during the overnight trip, payable on the next scheduled payroll date of Sonus
in the following month.
c. In the event Sonus requests and Xxxxxxxxxx agrees to provide
consulting services to Sonus in excess of 48 hours each month, Sonus agrees to
compensate Xxxxxxxxxx for such additional hours of consulting at $75 per hour,
payable on the next scheduled payroll date of Sonus in the following month.
4. ADDITIONAL PAYMENTS.
As additional compensation, Sonus agrees to pay Xxxxxxxxxx
$2,315.34 on January 2, 2002, $5,556.82 on January 2, 2003, and $3,241.48, on
August 2, 2003.
5. REIMBURSEMENT OF EXPENSES.
a. Sonus agrees to reimburse Xxxxxxxxxx for reasonable travel
expenses incurred in accordance with Sonus company policy.
b. Sonus agrees to pay Xxxxxxxxxx $230.77 each pay period as a
car allowance.
6. LIMITED NON-COMPETITION AGREEMENT.
a. Sonus acknowledges that during the period August 2, 2001 to
August 1, 2003, Xxxxxxxxxx will engage in consulting and other business
activities in
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addition to his consulting service to Sonus. Sonus consents to such activities
so long as they do not interfere with Xxxxxxxxxx'x service to Sonus, described
above.
x. Xxxxxxxxxx agrees that during the period of August 2001
through August 2003, he will not engage in consulting services with Hearx Ltd,
Helix Hearing Care of America, Inc., Sounds of Life, Inc., Newport Audiology, or
any affiliates of the foregoing companies.
7. CONSULTING FOR SONUS NETWORK MEMBERS.
a. The parties agree that Xxxxxxxxxx may provide consulting
services to Sonus Network Members as requested by Sonus for fees as mutually
agreed for each such engagement.
b. Sonus agrees to pay Xxxxxxxxxx a fee of $500 (the "Network
Fee") for each person or entity that becomes a Sonus Network member as a direct
result of the efforts of Xxxxxxxxxx. Xxxxxxxxxx will promptly reimburse Sonus
for each Network Fee paid if the Sonus Network member for which the Network Fee
was paid does not remain a Sonus Network member for at least 6 months. Sonus
shall also pay Xxxxxxxxxx a finder's fee of 1.5 percent of net revenues
recognized by each hearing care business acquired by Sonus (an "Acquired
Business") during the last full fiscal year of the Acquired Business prior to
its acquisition by Sonus, provided that the Acquisition of the Acquired Business
was as a direct result of the efforts of Xxxxxxxxxx as determined by the Chief
Executive Officer of Sonus in his sole discretion.
c. The relationship between Sonus and Xxxxxxxxxx during the
period August 2, 2001 to August 1, 2003 intended by this Consulting Agreement
with respect services under this Section 7 is that of independent contractor and
not employer and employee. Xxxxxxxxxx will pay all required taxes and file all
required tax forms as a result of his status as an independent contractor and
will defend, hold harmless, and indemnify Sonus from any claim, suit, or action
of any kind arising out of his relationship with Sonus in performing consulting
services under this Section 7.
8. HOLD HARMLESS.
Sonus agrees to defend, hold harmless, and indemnify Xxxxxxxxxx from
any claim, suit, or action of any kind arising out of his relationship with
Sonus under the Employment Agreement, as a shareholder of Sonus, and as an
employee under this Consulting Agreement.
9. WAIVER, ALTERATION, OR MODIFICATION.
Any waiver, alteration, or modification of any of the terms of this
Consulting Agreement will be valid only if made in writing and signed by the
parties to this Consulting Agreement. No waiver by either of the parties of its
rights under this Consulting Agreement will be deemed to constitute a waiver
with respect to any
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subsequent occurrence or transaction hereunder unless the waiver specifically
states that it is to be construed as a continuing waiver.
10. CONSTRUCTION OF CONSULTING AGREEMENT.
The validity, interpretation, construction, and performance of this
Consulting Agreement will be governed by and construed in accordance with the
laws of the state of Oregon. Any provision of this Consulting Agreement that is
prohibited or unenforceable will be ineffective only to the extent of that
prohibition or unenforceability without invalidating the remaining provisions of
this Consulting Agreement.
11. ARBITRATION.
Any dispute or claim that arises out of or that relates to this
Consulting Agreement or to the interpretation, breach, or enforcement of this
Consulting Agreement, shall be resolved by mandatory arbitration in accordance
with the then effective arbitration rules of the Arbitration Service of
Portland, Inc., and any judgment upon the award rendered pursuant to such
arbitration may be entered in any court having jurisdiction thereof.
12. ATTORNEY FEES.
In the event of any suit, action, or arbitration proceeding to
enforce or interpret any provision of this Consulting Agreement (or which is
based on this Consulting Agreement), the prevailing party will be entitled to
recover, in addition to other costs, reasonable attorney fees in connection with
such suit, action, arbitration, and in any appeal.
13. ENTIRE AGREEMENT.
This Consulting Agreement constitutes and embodies the entire
understanding and agreement of the parties hereto relating to the matters
addressed in this Consulting Agreement. Except as otherwise provided in this
Consulting Agreement, there are no other agreements or understandings, written
or oral, in effect between the parties relating to the matters addressed herein.
14. RELEASE OF CLAIMS.
Xxxxxxxxxx hereby releases and forever discharges Sonus and its
related entities, including subsidiaries, and parent entities, and their
respective predecessors, successors, assigns, and representatives, officers,
shareholders, directors, agents, and employees and all of their past, present,
and future officers, shareholders, directors, agents, and employees and their
respective successors, assigns, executors, and administrators, of any and all
claims, including but not limited to tort, contract, or statutory claims,
including but not limited to claims under Title VII of the Civil Rights Act of
1964, federal Fair Labor Standards Act, the Americans with Disabilities Act, the
Age Discrimination in Employment Act, 29 USC ss. 621, and any state or federal
law, and
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any regulations under such law, up to and including the date of this Agreement,
whether known or unknown, foreseen or unforeseen, asserted or unasserted.
Nothing in this Agreement shall operate or be interpreted as an admission of
liability as to any of the claims, charges, actions and lawsuits released
hereby. Both Xxxxxxxxxx and Sonus (and each of Sonus' directors, officers,
employees, agents and insurers and their successors individually and
collectively), expressly deny any such liability. Neither this Agreement nor any
of its terms may be offered or admitted into evidence other than in an action by
one of the parties to enforce its terms.
15. CONFIDENTIALITY.
Except as specifically provided below, Xxxxxxxxxx will keep the fact
of this Agreement and its terms confidential. This promise of confidentiality
extends to all terms of this Agreement. Xxxxxxxxxx will not disclose the terms
of this agreement to any firm, person or entity; provided, however, that:
(a) To the extent necessary to receive professional advice,
Xxxxxxxxxx may disclose the terms of this Agreement to his spouse,
attorney, accountant, tax preparer, tax consultant, and financial planner;
and
(b) The terms of this Agreement may be disclosed if compelled
under a court or administrative order or to enforce any of its terms in a
court or administrative proceeding or arbitration, or as required by law,
or to regulatory authorities, including self-regulating bodies.
16. CONSTRUCTION OF AGREEMENT.
Each of the parties has reviewed, revised, and negotiated or had the
opportunity to negotiate the terms, conditions, and language of this Agreement.
The rule of construction that ambiguities are to be resolved against the
drafting party shall not be applied in interpreting this Agreement. Section and
paragraph titles in this Agreement are used for convenience only and are not
intended to and shall not in any way enlarge, define, limit, or extend the
rights or obligations of the parties or affect the interpretation of this
Agreement. If any provision of this Agreement is found to be illegal or legally
unenforceable, the remaining provisions shall continue in full force and effect.
IN WITNESS WHEREOF, the parties hereto have entered into this
Consulting Agreement this 31st day of July 2001.
/s/ Xxxxxxx X. Xxxxxxxxxx
------------------------- SONUS CORP.
Xxxxxxx X. Xxxxxxxxxx
/s/ Xxxxxx X. Xxxx
By: ---------------------------------------
Xxxxxx X. Xxxx, Chief Executive Officer
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