1
EXHIBIT 10.14
CONSULTING SERVICES AGREEMENT
This Consulting Services Agreement ("Agreement") is made by and between
Adaptec, Inc., a Delaware corporation, with a place of business at ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ("Consultant"), and Jaycor Networks,
Inc., a Delaware Corporation, with a place of business at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ (the "Company"), and is effective as of the 12th day
of November, 1998 ("Effective Date").
The Company desires to engage Consultant as an independent contractor,
and not as an employee, to perform certain services on the terms and conditions
set forth herein.
NOW, THEREFORE, the parties agree as follows:
1. SCOPE OF SERVICES.
1.1 Duties. Consultant shall perform the consulting services
requested by the Company and outlined on the Statement of Work attached hereto
as Exhibit A ("Statement of Work"), as it may be amended by the Company and
Consultant from time to time (the "Services"). The Statement of Work includes a
listing of those Consultant employees who will perform the Services, and the
required minimum time commitment and term of service for each such employee.
Consultant will use reasonable commercial efforts to make such Consultant
employees available to perform the designated Services during the Term of this
Agreement.
1.2 Performance. Consultant shall use reasonable commercial
efforts to perform the Services in accordance with the Statement of Work. All
Services shall be performed at such facilities as the Company and Consultant
may agree. Consultant agrees, while working on the Company's premises, to
observe the Company's rules and policies relating to conduct, health and
safety and security of, access to or use of the Company's premises or any of
the Company's properties, including proprietary or Confidential Information (as
that term is defined below). All Services are performed on an "AS IS" basis
without any warranty whatsoever, except for Consultant's contractual
commitments hereunder. CONSULTANT EXPRESSLY DISCLAIMS ANY WARRANTY WITH RESPECT
TO THE RESULTS OF THE SERVICES, AND DISCLAIMS ANY IMPLIED WARRANTIES OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND NON-INFRINGEMENT OF SUCH
SERVICES, THE RESULTS OF SUCH SERVICES, CONSULTANT TECHNOLOGY AND ANY COMPANY
WORK PRODUCT.
1.3 Project Management. Consultant's initial Project Manager
shall be ▇▇▇ ▇▇▇▇▇▇▇. The Company's initial Project Manager shall be ▇▇▇
▇▇▇▇▇▇. Each Project Manager shall be empowered to make any necessary decisions
concerning the scope, performance or timetable of the Services. A party's
Project Manager may be changed upon written notice to the other party.
2
1.4 Employees, Subcontractors and Third Parties. Except as
specified in Exhibit A, Consultant may use employees, subcontractors or other
third parties to perform the Services (collectively, "Subcontractors"). With
respect to any Subcontractors, Consultant shall be responsible for: (i) payment
of all salaries or other compensation or expenses payable or reimbursable to
such Subcontractor; and (ii) effecting any necessary payroll tax withholding.
1.5 Independent Contractor. The parties agree that Consultant is
an independent contractor in the performance of the Services and is not an
employee of the Company. The Company shall take no deductions from any
compensation paid to Consultant for taxes or related payroll deductions, and
Consultant agrees to file all such forms and pay all such taxes as may be
required by virtue of Consultant's status as an independent contractor. Nothing
herein or in the performance hereof shall imply a joint venture or principal
and agent relationship between the parties. Neither party shall have any right,
power or authority to create any obligation, express or implied, on behalf of
the other.
2. TERM AND TERMINATION.
2.1 Term. This Agreement shall commence on the date and year
first above written and shall continue until the earlier of one (1) year from
the Effective Date or the completion of all Services hereunder, unless earlier
terminated in accordance with the provisions of this Section 2 or upon the
mutual agreement of the parties.
2.2 Termination for Convenience. Company may terminate this
Agreement by delivering written notice to Consultant at least fourteen (14)
days in advance of the desired termination date. In the event of such
termination, the Company shall pay Consultant its accrued but unpaid
compensation for Services rendered through the termination and shall reimburse
Consultant for expenses properly incurred and documented in accordance with the
provisions of Section 3.2.
2.3 Termination for Breach. If either party defaults in the
performance of any material provision of this Agreement, the non-defaulting
party may terminate this Agreement upon notice thereof.
2.4 Unavailability of Consultant Subcontractors. In the event a
Subcontractor assigned to perform Services ceases to be available to perform
Services as a consequence of death, disability, illness, voluntary resignation,
termination for cause or otherwise (but not as a consequence of Consultant's
re-assignment of such Subcontractor for Consultant's convenience)
("Unavailability Event"), the parties will use good faith efforts to agree
upon a suitable replacement. In the event no agreement is reached within five
(5) business days of the Unavailability Event, either party may terminate this
Agreement, upon notice given to the other party, with respect to the Services
performed by the unavailable Subcontractor. In the event of such termination,
the performance of the remainder of this Agreement will continue unimpaired.
2.5 Return of Materials; Cooperation. Upon termination of this
Agreement for any reason, Consultant shall promptly return to the Company (i)
all records, materials, equipment, drawings and document which are owned,
leased or licensed by the Company; and
2
3
(ii) any data of any nature pertaining to or incorporating any Confidential
Information of the Company, including any copies thereof, provided to
Consultant in connection with its performance of the Services.
2.6 Survival. The termination of this Agreement for any reason
shall not terminate the obligations or liabilities of the parties under
Sections 3, 4 and 5 and the applicable portions of Section 6, below, and under
this Section 2, each of which shall survive any such termination.
3. COMPENSATION.
3.1 Compensation. In consideration of the Services, the Company
agrees to pay Consultant as set forth on the Statement of Work. Consultant will
invoice the Company monthly for the Services, and shall include with such
invoice a detailed summary of hours incurred for which payment is due, and the
Company shall pay such invoices within thirty (30) days of receipt of invoice.
3.2 Expense Reimbursement. The Company shall reimburse Consultant
for all reasonable expenses incurred in connection with the performance of the
Services. Reimbursable expenses shall be invoiced to the Company on a monthly
basis, together with all supporting documentation reasonably required by the
Company, and the Company shall pay such invoices within thirty (30) days of
receipt of invoice.
4. PROPRIETARY INFORMATION; CONFIDENTIALITY; WARRANTY
4.1 Definition of Confidential Information. "Confidential
Information" as used in this Agreement shall mean any and all technical and
non-technical information, including but not limited to (i) techniques,
sketches, drawings, models, inventions, know-how, processes, apparatus,
equipment, algorithms, software programs, software source documents, APIs, and
formulae related to the current, future and proposed products and services of
the Company; (ii) the Company's respective information concerning research,
experimental work, development, design details and specifications, engineering,
financial information, procurement requirements, purchasing, manufacturing,
customer lists, business forecasts, sales and merchandising and marketing plans
and information; and (iii) proprietary or confidential information of any third
party who may disclose such information to the Company or Consultant in the
course of the Company's business. Confidential Information should be designated
in writing as "confidential" (or words of similar import) or should be of such
nature or sensitivity that Consultant should clearly understand that the
information is disclosed in confidence.
4.2 Exclusions from Nondisclosure and Non-Use Obligations.
Consultant's obligations under Section 4.3 ("Nondisclosure and Non-Use
Obligations") with respect to Confidential Information shall terminate when
Consultant can document that: (i) the information was in the public domain or
commonly known in the fibre channel industry at or subsequent to the time it
was communicated to Consultant by the Company through no fault of Consultant;
or (ii) the information was rightfully in Consultant's possession free of any
obligation of confidence
3
4
to the Company at or subsequent to the time it was communicated to Consultant
by the Company.
4.3 Nondisclosure and Non-use Obligations. Except as permitted in
this paragraph, Consultant shall neither use nor disclose the Confidential
Information. Consultant may use the Confidential Information solely to perform
under the Statement of Work for the benefit of the Company. Consultant agrees
that Consultant shall treat all Confidential Information of the Company with
the same degree of care as Consultant accords to Consultant's own Confidential
Information, but in no case less than reasonable care. If Consultant is not an
individual, Consultant agrees that Consultant shall disclose Confidential
Information only to those of Consultant's employees who need to know such
information, and Consultant certifies that such employees have previously
agreed, either as a condition of employment or in order to obtain the
Confidential Information, to be bound by terms and conditions substantially
similar to those terms and conditions applicable to Consultant under this
Agreement. Consultant agrees not to communicate any information to the Company
in violation of the proprietary rights of any third party. Consultant will
immediately give notice to the Company of any unauthorized use or disclosure of
the Confidential Information of which Consultant learns. Consultant agrees to
assist the Company in remedying any such unauthorized use or disclosure of the
Confidential Information, to the extent such use or disclosure is by a current
or past Subcontractor who gained access to such Confidential Information
through work for Consultant.
4.4 Ownership of and Licenses to Consultant Technology. Excluding
the Purchased Assets (as that term is defined in that certain Asset Acquisition
Agreement between the Company and Consultant dated November 12, 1998 (the
"Asset Acquisition Agreement")) and subject to the Fibre Channel Cross-License
Agreement between Company and Consultant, dated November 12, 1998, Consultant
owns, or will own, certain pre-existing intellectual property rights in
technology or proprietary data which may be used in the performance of the
Services or be incorporated in the Company Work Product (the "Consultant
Technology"). Consultant expressly retains all right, title and interest in and
to the Consultant Technology and any underlying intellectual property rights.
Provided the Company has complied with all payment obligations set forth in
Section 3.1 hereof, Consultant will provide to the Company a fully-paid,
worldwide, non-exclusive license to use the Consultant Technology solely in
connection with the use and exploitation of the results of the Services and the
Company Work Product, if any.
4.5 Ownership of Company Work Product. Subject to the provisions of
Section 4.4, all right, title and interest in and to the following shall belong
exclusively to the Company: programs, systems, data, materials, processes,
machines, compositions of matter, improvements, inventions (whether or not
protectable under patent laws), works of authorship, information fixed in any
tangible medium of expression (whether or not protectable under copyright
laws), moral rights, mask works, trademarks, trade names, trade dress, trade
secrets, know-how, ideas (whether or not protectable under trade secret laws),
and all other tangible or intangible subject matter protectable under patent,
copyright, moral right, mask work, trademark, trade secret or other laws, that
Consultant, solely or jointly with others, conceives, reduces to practice,
creates, derives, develops or makes (a) within the scope of the Statement of
Work, or
4
5
(b) using Company materials and which relate to the RIO chip or MAC software
(collectively the "Company Work Product"). Consultant hereby assigns and
transfers to the Company in perpetuity all of Consultant's worldwide rights,
title and interest in and to the Company Work Product, including, but not
limited to, all copyrights, trade secret rights and other proprietary rights
therein. Consultant agrees to execute such copyright and other documents of
assignment, transfer or registration as the Company may reasonably request, at
the Company's expense, in order to assist the Company in obtaining, perfecting,
evidencing or protecting its rights.
4.6 Maintenance of Records. Consultant agrees to keep and maintain
current written records of all Company Work Product (in the form of notes,
sketches, drawings and as may be specified by the Company), which records shall
be available to and, subject to Section 4.4, shall remain the sole property of
the Company at all times. Consultant agrees to promptly disclose to the Company
all Company Work Product.
4.7 Injunctive Relief for Breach. Consultant's breach of its
obligations under this Section 4 may result in irreparable and continuing
damage to the Company for which there will be no adequate remedy at law. In the
event of such breach and damage, the Company will be entitled to injunctive
relief and/or a decree for specific performance, and such other and further
relief as may be proper.
5. LIMITATION OF LIABILITY.
IN NO EVENT WILL EITHER PARTY LIABLE FOR ANY INDIRECT, CONSEQUENTIAL OR
INCIDENTAL DAMAGES ARISING OUT OF ITS PERFORMANCE UNDER THIS AGREEMENT,
INCLUDING, BUT NOT LIMITED TO LOST PROFITS, EVEN IF THE OTHER PARTY HAS BEEN
APPRISED OF THE POSSIBILITY OF SUCH DAMAGES, IN NO EVENT SHALL EITHER PARTY'S
LIABILITY HEREUNDER EXCEED THE TOTAL COMPENSATION PAID TO CONSULTANT BY THE
COMPANY FOR THE SERVICES.
6. MISCELLANEOUS.
6.1 Notices. Any notice, demand, request or other communications
hereunder shall be in writing and shall be deemed sufficient when delivered
personally or sent by facsimile (with prompt confirmation of receipt) or upon
deposit in the U.S. mail, as certified or registered first class mail, with
postage prepaid, and addressed, if to the Company, at Company's place of
business set forth above; and if to Consultant, at Consultant's place of
business set forth above, attention: General Counsel, in the case of
Consultant, and Chief Financial Officer, in the case of Company, unless another
address shall have been designated for notice.
6.2 No Conflict of Interest. Consultant warrants that there is no
other contract or duty on its part inconsistent with this Agreement, and that
Consultant will not, during the term of this Agreement, accept work, enter into
a contract, or accept an obligation, inconsistent or incompatible with
Consultant's obligations under this Agreement.
5
6
6.3 Assignment. Except as provided in Section 1.4, neither party
shall assign its rights and obligations hereunder, or any portion thereof,
without the prior written consent of the other party.
6.4 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of California, without
regard to its conflict of law provisions.
6.5 Severability. If any provision of this Agreement is held by a
court of competent jurisdiction to be invalid, void or unenforceable, the
remaining provisions shall continue in full force and effect.
6.6 Expenses. Except as provided in Section 3.2, each party
hereto shall pay the expenses incurred (including, without limitation, the fees
of counsel) on each party's behalf in connection with this Agreement or any
transactions contemplated by this Agreement.
6.7 Entire Agreement. This Agreement embodies the entire
agreement and understanding of the parties hereto, and supersedes all prior or
contemporaneous written or oral communications or agreements between the
Company and Consultant, regarding the subject matter hereof. This Agreement may
only be amended by written agreement between the Company and Consultant.
6.8 Waivers. No waiver of any provision of this Agreement shall
be effective, except pursuant to a written instrument signed by the party
waiving compliance, and any such waiver shall be effective only in the specific
instance and for the specific purpose stated in such writing.
6.9 Counterparts. This Agreement may be executed in one or two
counterparts each of which shall be an original and all of which together shall
constitute one and the same instrument.
6
7
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first set forth above.
ADAPTEC, INC. JAYCOR NETWORKS, INC.
("Consultant") ("Company")
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------ -------------------------------------
Title: Title:
--------------------------- ----------------------------------
7
8
EXHIBIT A
STATEMENT OF WORK
I. DESCRIPTION OF PROJECTS AND TASKS
A. Rio Product
Provide architectural design and black implementation for the Rio Chip
B. Support for Avid
Supporting MAC software and interface as required by the customer.
C. Other
II. REQUIRED EMPLOYEES
1. ▇▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ shall perform those services described under
Section I(A) above, on an as needed basis and as requested by Company in its
discretion (which could include up to 40 hours per week in any given week),
until the later of Successful Rio Product Introduction, as that term is defined
in Section 2.5(a) of the Asset Acquisition Agreement, or one (1) year.
2. Mr. ▇▇▇ ▇▇▇ shall perform those support services Company must
perform for Avid, on an as needed basis and as requested by Company in its
discretion (which could include up to 40 hours per week in any given week) for
a period of six (6) months from the Effective Date of this Agreement
III. COMPENSATION
Company shall pay to Consultant the following hourly rates for actual
Services rendered:
▇▇. ▇▇▇▇▇: Adaptec regular rate of pay to ▇▇. ▇▇▇▇▇, plus 34%. (Any
travel expenses will be reimbursed in accordance with Section 3.2.)
▇▇. ▇▇▇: $100 per hour. (Any travel expenses will be reimbursed in
accordance with Section 3.2.)
Any other Subcontractor: TBD upon agreement upon such Subcontractor.
8
