REPRINTED WITH PERMISSION FROM VOLUMES ONE AND TWO OF The Emerging Growth Companies Series From Glasser Legal Works Order From 1-800-308-1700
CONSULTING AGREEMENT Effective ___________, ___, ____________________________ ("Consultant") and ________________ ("Company") agree as follows: 1. Services and Payment. Consultant agrees to undertake and complete the Services (as defined in Exhibit A) in accordance with and on the schedule specified in Exhibit A. As the only consideration due Consultant regarding the subject matter of this Agreement, Company will pay Consultant in accordance with Exhibit A. 2. Ownership; Rights; Proprietary Information; Publicity. a. Company shall own all right, title and interest (including patent rights, copyrights, trade secret rights, mask work rights, trademark rights [, sui generis database rights] and all other [intellectual and industrial property] rights [of any sort] throughout the world) relating to any and all inventions (whether or not patentable), works of authorship, mask works, designations, designs, know-how, ideas and information made or conceived or reduced to practice, in whole or in part, by Consultant [during the term of this Agreement that relate to the subject matter of, or arise out of, the Services] [in connection with Services] or any Proprietary Information (as defined below) (collectively, "Inventions") and Consultant will promptly disclose and provide all Inventions to Company. [All Inventions are work made for hire to the extent allowed by law and, in addition,] Consultant hereby makes all assignments necessary to accomplish the foregoing ownership [; provided that no assignment is made that extends beyond what would be allowed under California Labor Code Section 2870 (attached as Exhibit B) if Consultant was an employee of Company]. Consultant shall further assist Company, at Company's expense, to further evidence, record and perfect such assignments, and to perfect, obtain, maintain, enforce, and defend any rights assigned. Consultant hereby irrevocably designates and appoints Company as its agents and attorneys-in-fact to act for and in Consultant's behalf to execute and file any document and to do all other lawfully permitted acts to further the foregoing with the same legal force and effect as if executed by Consultant. [COMMENT: The bracketed "work made for hire" language will, for limited categories of work, cause the company to be considered the original author (rather than an assignee) of the work for copyright purposes. This is beneficial because assignments may be subject to certain subsequent assignments and/or to termination by (and reversion to) the author or his/her successor after several decades. However, in California many companies forego the "work made for hire" language because California Labor Code Section 3351.5(c) and California Unemployment Insurance Code Sections 621(d) and 686 treat anyone subject to such a clause as an employee for unemployment and disability insurance purposes. The references to California Labor Code Section 2870, although required only for employees, may be appropriate if there is some question as to whether the contractor may be legally considered an employee. If so, lack of reference to Section 2870 may compromise the Company's rights.] (b) Consultant agrees that all Inventions and all other business, technical and financial information (including, without limitation, the identity of and information relating to customers or employees) Consultant develops, learns or obtains [during the period over which it is (or is supposed to be) providing Services that relate to Company or the business or demonstrably anticipated business of Company] [in connection with Services] or that are received by or for Company in confidence, constitute "Proprietary Information." Consultant will hold in confidence and not disclose or, except in performing the Services, use any Proprietary Information. However, Consultant shall not be obligated under this paragraph with respect to information Consultant can document is or becomes readily publicly available without restriction through no fault of Consultant. Upon termination and as otherwise requested by Company, Consultant will promptly return to Company all items and copies containing or embodying Proprietary Information, except that Consultant may keep its personal copies of its compensation records and this Agreement. [Consultant also recognizes and agrees that Consultant has no expectation of privacy with respect to Company's telecommunications, networking or information processing systems (including, without limitation, stored computer files, e-mail messages and voice messages) and that Consultant's activity, and any files or messages, on or using any of those systems may be monitored at any time without notice.] [COMMENT: See the comment in Section 4 of the Proprietary Information and Inventions Agreement in Chapter 7.] (c) As additional protection for Proprietary Information, Consultant agrees that during the period over which it is (or is supposed to be) providing Services [(i)] and for one year thereafter, Consultant will not encourage or solicit any employee or consultant of Company to leave Company for any reason [and (ii) Consultant will not engage in any activity that is in any way competitive with the business or demonstrably anticipated business of Company, and Consultant will not assist any other person or organization in competing or in preparing to compete with any business or demonstrably anticipated business of Company]. [COMMENT: See the comment in Section 6 of the Proprietary Information and Inventions Agreement in Chapter 7.] (d) To the extent allowed by law, Section 2.a [and any license to Company hereunder] includes all rights of paternity, integrity, disclosure and withdrawal and any other rights that may be known as or referred to as "moral rights," "artist's rights," "droit moral," or the like. [Furthermore, Consultant agrees that notwithstanding any rights of publicity, privacy or otherwise (whether or not statutory) anywhere in the world and without any further compensation, (i) Company may and is hereby authorized to use Consultant's name in connection with promotion of its business, products and services and to allow others to do so and (ii) if the Services include (or Consultant otherwise provides) any acting, singing, dancing, voice, modeling, posing or similar activity, Company also may and is hereby authorized to (and to allow others to) use, reproduce, disseminate, alter and otherwise exploit any results of such activity (including, without limitation, any manner in which such activity may be recorded or remembered or modified) or derivatives or extensions or imitations thereof in any manner Company sees fit.] To the extent any of the foregoing is ineffective under applicable law, Consultant hereby provides any and all ratifications and consents necessary to accomplish the purposes of the foregoing to the extent possible. Consultant will confirm any such ratifications and consents from time to time as requested by Company. If any other person provides any Services [or provides services similar to any of those referred to in clause (ii) above in this paragraph in connection with the Services], Consultant will obtain the foregoing ratifications, consents and authorizations from such person for Company's exclusive benefit. [COMMENT: Regarding "moral rights," see the comment in Section 3 of the Technology Assignment Agreement in Chapter 6. The bracketed language in the above paragraph is intended to deal with the situation where the contractor is providing acting, modeling, vocal or similar services.] (e) [If any part of the Services or Inventions is based on, incorporates, or is an improvement or derivative of, or cannot be reasonably and fully made, used, reproduced, distributed and otherwise exploited without using or violating technology or intellectual property rights owned or licensed by Consultant and not assigned hereunder, Consultant hereby grants Company [and its successors] a perpetual, irrevocable, worldwide royalty-free, non-exclusive, sublicensable right and license to exploit and exercise all such technology and intellectual property rights in support of Company's exercise or exploitation of the Services, Inventions, other work performed hereunder, or any assigned rights (including any modifications, improvements and derivatives of any of them).] [COMMENT: The above bracketed language is intended to ensure that the company has rights to use any technology beyond the scope of the assignment that the contractor may include in the work he or she does for the Company.] 3. Warranty. Consultant warrants that: (i) the Services will be performed in a professional and workmanlike manner and that none of such Services or any part of this Agreement is or will be inconsistent with any obligation Consultant may have to others; (ii) all work under this Agreement shall be Consultant's original work and none of the Services or Inventions or any development, use, production, distribution or exploitation thereof will infringe, misappropriate or violate any intellectual property or other right of any person or entity (including, without limitation, Consultant); and, (iii) Consultant has the full right to allow it to provide the Company with the assignments and rights provided for herein. 4. `Termination. If either party materially breaches a material provision of this Agreement, the other party may terminate this Agreement upon days' notice unless the breach is cured within the notice period. Company also may terminate this Agreement at any time, with or without cause, upon days' notice, but, if (and only if) without cause, Company shall upon termination pay Consultant all unpaid amounts due for Services completed prior to [notice of] termination. Sections 2 (subject to the limitations on Section 2.c stated therein) through 8 of this Agreement and any remedies for breach of this Agreement shall survive any termination or expiration. Company may communicate such obligations to any other (or potential) client or employer of Consultant. 5. Relationship of the Parties. Notwithstanding any provision hereof, for all purposes of this Agreement each party shall be and act as an independent contractor and not as partner, joint venturer, or agent of the other and shall not bind nor attempt to bind the other to any contract. Consultant is an independent contractor and is solely responsible for all taxes, withholdings, and other statutory or contractual obligations of any sort, including, but not limited to, Workers' Compensation Insurance; and Consultant agrees to defend, indemnify and hold Company harmless from any and all claims, damages, liability, attorneys' fees and expenses on account of (i) an alleged failure by Consultant to satisfy any such obligations or any other obligation (under this Agreement or otherwise) or (ii) any other action or inaction of Consultant. If Consultant is a corporation, it will ensure that its employees and agents are bound in writing to Consultant's obligations under this Agreement. 6. Assignment. This Agreement and the services contemplated hereunder are personal to Consultant and Consultant shall not have the right or ability to assign, transfer, or subcontract any obligations under this Agreement without the written consent of Company. Any attempt to do so shall be void. 7. Notice. All notices under this Agreement shall be in writing, and shall be deemed given when personally delivered, or three days after being sent by prepaid certified or registered U.S. mail to the address of the party to be noticed as set forth herein or such other address as such party last provided to the other by written notice. 8. Miscellaneous. Any breach of Section 2 or 3 will cause irreparable harm to Company for which damages would not be a adequate remedy, and, therefore, Company will be entitled to injunctive relief with respect thereto in addition to any other remedies. The failure of either party to enforce its rights under this Agreement at any time for any period shall not be construed as a waiver of such rights. No changes or modifications or waivers to this Agreement will be effective unless in writing and signed by both parties. In the event that any provision of this Agreement shall be determined to be illegal or unenforceable, that provision will be limited or eliminated to the minimum extent necessary so that this Agreement shall otherwise remain in full force and effect and enforceable. This Agreement shall be governed by and construed in accordance with the laws of the State of California without regard to the conflicts of laws provisions thereof. [In any action or proceeding to enforce rights under this Agreement, the prevailing party will be entitled to recover costs and attorneys fees.] Headings herein are for convenience of reference only and shall in no way affect interpretation of the Agreement. ____________________________________ (Consultant)________________________________ (Company)By:_________________________________ ____________________________________ Printed (Name, Title and Address)By: ____________________________ _______________________________ Printed (Name, Title and Address)