EXHIBIT 10.3
Form of Consulting Agreement
Between
Protosource Corporation and
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CONSULTING AGREEMENT
BY AND BETWEEN
PROTOSOURCE CORPORATION
AND
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THIS AGREEMENT (THE "AGREEMENT"), DATED THE 3RD DAY OF NOVEMBER, 1999,
AND EFFECTIVE AS OF THE 1ST day of November, 1999, by AND BETWEEN PROTOSOURCE
CORPORATION, A CALIFORNIA CORPORATION WITH PRINCIPAL OFFICES AT ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (the "Company"), and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
former Chief Executive Officer of the Company (the "Consultant").
WHEREAS, the Consultant has developed expertise in providing strategic
business advice and consulting services, particularly in the field of Internet
services; and
WHEREAS, the Company desires to engage the services of the Consultant,
and the Consultant desires to provide services to the Company as set forth
below, upon the terms and subject to the conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing and for such other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. ENGAGEMENT. Effective upon the execution hereof, the Company hereby
engages the Consultant to render to it, for a period of six months from
the date hereof (the "Term"), the services described herein. The Term
hereof may be extended or renewed upon the written agreement of the
Company and the Consultant prior to the expiration of the Term hereof,
upon such terms as the parties hereto may negotiate at the time of such
extension or renewal.
2. SERVICES. For the Term of this Agreement, the Consultant shall render
the Company management consulting advice in areas which shall include
but not be limited to strategic planning, business strategy,
acquisition planning, administration and such other related management
services as shall reasonably be requested by the Company in connection
with the operation of the business of the Company.
3. COMPENSATION. In consideration for the performance of the services
described above, the Company shall deliver and/or pay to Consultant the
following:
(a) A monthly fee equal to the number of hours which Consultant devotes
to the performance of services hereunder in such calendar month
multiplied by one-hundred dollars ($100.00) (the "Consultant's Fee"),
which shall be payable upon the first day of each calendar month, the
first payment to be made on the first day of February, 1999. The
Company shall make such payments by the delivery to the Consultant of
cash, a check drawn from an account of the Company or by means of a
wire transfer to an account number and depository designated by the
Consultant.
(b) The Company shall reimburse the Consultant for all out-of-pocket
travel expenses, printing expenses, delivery fees, and third party
service fees incurred in connection with this agreement. Such expenses
will be billed by the Consultant to the Company within 30 days of the
date such expenses are incurred, and the Company will reimburse the
Consultant within ten (10) business days thereafter. Consultant will
not incur any expense in excess of $500 without Company's prior
approval.
4. REPRESENTATIONS AND WARRANTEES OF THE COMPANY. The Company hereby
represents and warrants to the Consultant that:
(a) The execution, delivery and performance of this Agreement and
consummation of the transactions contemplated hereby have been duly
authorized, adopted and approved by the Company. The Company has taken
all necessary corporate action and has all the necessary corporate
power and authority to enter into this Agreement and to consummate the
transactions contemplated hereby. This Agreement has been duly and
validly executed and delivered by an authorized officer of the Company
on its behalf and is the valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, except as
such enforcement may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, or other similar laws now or hereafter in
effect, or by legal or equitable principles, relating to or limiting
creditors' rights generally and except that the remedy of specific
performance and injunctive and other forms of equitable relief are
subject to certain equitable defenses and to the discretion of the
court before which any proceeding therefor may be brought;
(b) The Company is a corporation duly organized, validly existing and
in good standing under the laws of the State of California. The Company
has the corporate power and authority to own and lease its properties
and assets and to carry on its business as it is now being conducted
and is duly qualified to do business as a foreign corporation in each
jurisdiction where it owns or leases real property or conducts
business, except where failure to be so qualified would not have a
material adverse effect on the business, operations or condition
(financial or otherwise) of the Company.
(c) Neither the execution and delivery of this Agreement by the
Company, nor consummation of the transactions contemplated hereby, does
or will: (i) violate or conflict with any provision of the certificate
of incorporation or bylaws or similar organizational document or
operating agreement of the Company.
5. CONFIDENTIAL INFORMATION. By reason of performance under this
Agreement, the Consultant may have access to and may obtain
specialized knowledge, trade secrets and confidential information
about the business and operation of the Company, its subsidiaries and
divisions thereof. Therefore, the Consultant hereby agrees that it
shall keep secret and retain in confidence and shall not use, disclose
to others, or publish, other than in connection with the performance
of services hereunder and in accordance herewith, any information
relating to the business, operation or other affairs of the Company,
its subsidiaries and divisions thereof, which information is acquired
in the course of providing services for the Company. To the extent
that any such information may be deemed from time to time to be
"material non-public information" as construed under the Exchange Act
of 1934, the Consultant hereby agrees not to purchase or sell (or
offer to purchase or sell) any of the Company's securities while in
possession of information may be so deemed to be "material non-public
information."
6. INDEMNIFICATION. The Consultant and the Company hereby agree as follows
(a) The Company hereby agrees to indemnify and hold harmless
the Consultant against and in respect of all damages, claims, losses
and expenses (including, without limitation, attorneys' fees and
disbursements) reasonably incurred (all such amounts may hereafter be
referred to as the "Damages") by the Consultant arising out of: (i) any
misrepresentation or breach of any warranty made by the Company
pursuant to the provisions of this Agreement or any statement,
certificate or other document furnished by the Company pursuant to this
agreement, and (ii) the nonperformance or breach of any covenant,
agreement or obligation of the Company contained in this Agreement
which has not been waived by the Consultant;
(b) The Company shall be obligated to indemnify the Consultant
with respect to claims for Damages as to which the Consultant shall
have given written notice to the Company on or before the close of
business on the sixtieth day following the first anniversary hereof;
(c) In any case where the Company has indemnified the
Consultant for any Damages and the Consultant recovers from third
parties all or any part of the amount so indemnified by the Company,
the Consultant shall promptly pay over to the Company the amount so
recovered;
(d) With respect to claims or demands by third parties,
whenever the consultant shall have received notice that such claim or
demand has been asserted or threatened which, if valid, would be
subject to indemnification hereunder, the Consultant shall as soon as
reasonably possible and in any event within thirty (30) days of receipt
of such notice, notify the Company of such claim or demand and of all
relevant facts within its knowledge which relate thereto. The Company
shall then have the right at its own expense to undertake the defense
of any such claims or demands utilizing counsel selected by the Company
and approved by the Consultant, which approval shall not be
unreasonably withheld. In the event that the Company should fail to
give notice of the intention to undertake the defense of any such claim
or demand within thirty (30) days after receiving notice that it has
been asserted or threatened, the Consultant shall have the right to
satisfy and discharge the same by payment, comprise or otherwise and
shall give written notice of any such payment, compromise or settlement
to the Company;
(e) The Consultant hereby agrees to indemnify and hold
harmless the Company against and in respect of all Damages reasonably
incurred by the Company arising out of: (i) any misrepresentation or
breach of any warranty made by the Consultant pursuant to the
provisions of this Agreement, and (ii) the nonperformance or breach of
any covenant, agreement or obligation of the Consultant which has not
been waived by the Company;
(f) The Consultant shall be obligated to indemnify the Company
for Damages as to which the Company shall have given notice to the
Consultant on or before the close of business on the sixtieth day
following the first anniversary hereof;
(g) In any case where the Consultant has indemnified the
Company for any Damages and the Company recovers from third parties all
or any part of the amount so indemnified by the Consultant, the Company
shall promptly pay over to the Consultant the amount so recovered;
(h) With respect to claims or demands by third parties,
whenever the Company shall have received notice that such a claim or
demand has been asserted or threatened, which, if valid, would be
subject to indemnification hereunder, the Company shall as soon as
reasonably possible and in any event within thirty (30) days of receipt
of such notice, notify the Consultant of such claim or demand and of
all relevant facts within its knowledge which relate thereto. The
Consultant shall have the right at its expense to undertake the defense
of any such claim or demand utilizing counsel selected by the
Consultant and approved by the Consultant, which approval shall not be
unreasonably withheld. In the event the Consultant should fail to give
notice of its intention to undertake the defense of any such claim or
demand within thirty (30) days after receiving notice that it has been
asserted or threatened, the Company shall have the right to satisfy and
discharge the same by payment, compromise or settlement to the
Consultant.
7. RELATIONSHIP. Nothing herein shall constitute the Consultant as an
employee or agent of the Company, except to such extent as might
hereinafter be agreed upon for a particular purpose. Except as might
hereinafter be expressly agreed, the Consultant shall not have the
authority to obligate or commit the Company in any manner whatsoever.
8. APPLICABLE LAW. This Agreement shall be construed and enforced in
accordance with the laws of the State of California without regard to
the principles of conflicts of laws thereof and shall inure to the
benefit of and be binding upon the Consultant and the Company and their
respective legal successors and assigns.
9. ARBITRATION. The Company represents, warrants, covenants and
agrees that any controversy or claim brought in any capacity by the
Company against the Consultant or any members, officers, directors,
agents, affiliates, associates, employees or controlling persons of
the Consultant shall be settled by expedited arbitration under the
Federal Arbitration Act in accordance with the commercial arbitration
rules of the American Arbitration Association ("AAA") and judgment
upon the award rendered by arbitrators may be entered in any court
having jurisdiction thereof. Any controversy or claim brought by the
Consultant against the Company or its securityholders, officers,
directors, agents, affiliates, associates, employees or controlling
persons shall be settled by arbitration under the Federal Arbitration
Act in accordance with the commercial arbitration rules of the AAA and
judgment rendered by the arbitrators may be entered in any court
having jurisdiction thereof. In arbitration proceedings under this
section, the parties shall be entitled to any and all remedies that
would be available in the absence of this section and the arbitrators,
in rendering their decision, shall follow the substantive laws of the
State of New York. The arbitration of any dispute pursuant to this
paragraph shall be held in the State of New York.
Notwithstanding the foregoing, in order to preserve the status
quo pending the resolution by arbitration of a claim seeking relief of
an injunctive or equitable nature, any party, upon submitting a matter
to arbitration as required by this section, may simultaneously or
thereafter seek a temporary restraining order or preliminary injunction
from a court of competent jurisdiction pending the outcome of the
arbitration. This section is intended to benefit the members, managers,
agents, affiliates, associates and employees of the Consultant, each of
whom shall be deemed to be a third party beneficiary of this section,
and each of whom may enforce this section to the full extent that the
Consultant could do so if a controversy or claim were brought against
it.
10. NO CONTINUING WAIVER. The waiver by any party of any provision or
breach of this Agreement shall not operate as or be construed to be a
waiver of any other provision hereof or of any other breach of any
provision hereof.
11. NOTICE. Any and all notices from either party to the other which may be
specified by, or otherwise deemed necessary or incident to this
Agreement shall, in the absence of hand delivery with return receipt
requested, be deemed duly given when mailed if the same shall be sent
to the address of the party set out on the first page of this Agreement
by registered or certified mail, return receipt requested, or express
delivery (e.g., Federal Express).
12. SEVERABILITY OF PROVISIONS. The provisions of this Agreement shall be
considered severable in the event that any such provisions are held by
a court of competent jurisdiction to be invalid, void or otherwise
unenforceable. Such invalid, void or otherwise unenforceable provisions
shall be automatically replaced by other provisions which are valid and
enforceable and which are as similar as possible in term and intent to
those provisions deemed to be invalid, void or otherwise unenforceable.
Notwithstanding the foregoing, the remaining provisions hereof shall
remain enforceable to the fullest extent permitted by law.
13. ASSIGNABILITY. This Agreement shall not be assignable without the prior
written consent of the non-assigning party or parties hereto and shall
be binding upon the inure to the benefit of any heirs, executors, legal
representatives or successors or permitted assigns of the parties
hereto.
14. ENTIRE AGREEMENT; AMENDMENT. This Agreement contains the entire
agreement among the Company and the Consultant with respect to the
subject matter hereof. This agreement may not be amended, changed,
modified or discharged, nor may any provision hereof be waived, except
by an instrument in writing executed by or on behalf of the party
against whom enforcement of any amendment, waiver, change, modification
or discharge is sought. No course of conduct or dealing shall be
construed to modify, amend or otherwise affect any of the provisions
hereof.
15. HEADINGS. The paragraph headings contained in this Agreement are for
reference purposes only and shall not in any way affect the meaning or
interpretation of the provisions of this Agreement.
16. SURVIVAL. Sections 4-18, shall survive the termination for any reason
of this Agreement (whether such termination is by the Company, upon the
expiration of this Agreement by its terms or otherwise).
17. COUNTERPARTS. This Agreement may be executed in one or more counter
parts, each of which shall be deemed an original, but all of which
shall together constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have caused this Agreement to
be executed and delivered by their duly authorized officers as set forth below
and have caused their respective corporate seals to be hereunder affixed as of
the date first above written.
PROTOSOURCE CORPORATION
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By: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Chief Executive Officer
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Consultant
