**Exhibit10.4**

 

INDEPENDENT CONSULTINGAGREEMENT

 

THIS INDEPENDENT CONSULTING AGREEMENT (the “*Agreement*”) is made effective as of December 27, 2003 (the “*Effective Date*”),between Trestle Holdings,Inc., a Delaware corporation with a principal place ofbusiness at 151 Shipyard Way, Newport Beach, California 92663 (“*Trestle*”), on the one hand, and CrosbyHaffner (“*Consultant*”), on theother hand.  Trestle and Consultant maybe referred to herein as the “*Parties*”collectively, or as Trestle or Consultant,individually.

 

WHEREAS, Trestle is engagedin the business of developing, owning, using, licensing, marketing, and sellingon a worldwide basis a series of microscopy and telemedicine products andservices, including without limitation, (i) MedMicroscopy RTTM, MedMicroscopySLTM, MedMicroscopy CLTM and other products developed from the same technologyfor microscopy applications, (ii) MedReachTM and other products developed fromthe same technology for telemedicine applications, (iii) MedScanner, (iv)Digital Slide, (v) MedWorkflow, (vi) High Throughput Scanner, (vii) QualityControl Image Analysis, and (viii) Tox Screen Image Analysis (the “*Business*”);and

 

WHEREAS, Consultant wishesto provide independent consulting services necessary to support management ofthe underlying the Business, and Trestle wishes to hire Consultant as anindependent contractor in accordance with the terms and provisions of thisAgreement.

 

NOW THEREFORE, inconsideration of the mutual promises contained herein, as well as othervaluable consideration, the receipt and sufficiency of which are herebyacknowledged, the Parties agree as follows:

 

1.                                       ConsultingServices.  Consultanthereby agrees to provide Trestle with the consulting services specified in theDescription of Work attached hereto as Appendix A (the “*Services*”).  Consultant shall provide the Services as an independentcontractor.  Nothing contained hereinshall be considered to create the relationship of employer and employee, partnership,joint venture or other association between the Parties.  Subject to Trestle’s indemnificationobligations in Section 6 below, Trestle shall not be liable for anyacts or omissions of Consultant made in connection with the Services.  Consultant shall be solely responsible forthe payment of all income, sales, employment, excise, withholding, and othertaxes imposed on or with respect to compensation and other amounts receivedpursuant to this Agreement.  Trestleshall make no social security, workers compensation or unemployment insurancepayments on behalf of Consultant. Consultant will not be entitled to any workers’ compensation, disabilitybenefits or unemployment insurance benefits coverage from Trestle. Consultantshall have no authority to act for or on behalf of, or otherwise bind, Trestleexcept as expressly authorized by Trestle.

 

2.                                       Term.  This Agreement shall commence on theEffective Date and continue until March 31, 2004 (the “*Initial**Term*”), unless terminated by mutualagreement in writing by the Parties, or terminated in accordance with theprovisions of this Agreement.

 

3.                                       Compensation.  In consideration of the Services, Trestleshall pay Consultant in accordance with the payment terms described in AppendixA hereto (the “*Fees*”).  In addition,

 

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Trestle shall pay Consultant’s reasonable expenses incurred inconnection with the Services (the “*Expenses*”),provided, however, that the Expenses must fall within the accepted categoriesdescribed in Appendix A, and provided further thatany single expense over $200.00 must be pre-approved by Trestle in writing.

 

4.                                       Confidentiality and InventionsAgreement.  Consultantagrees to be bound by, the terms ofthat certain Confidentiality and Inventions Agreement (the “*Inventions Agreement*”) executed on orabout September 2, 2003, a form of which is attached hereto as Appendix B.

 

5.                                       Representationsand Warranties.  Consultantrepresents and warrants that: (i) Consultant is able to render the Servicesdescribed in Appendix A without interfering with any obligation, includingwithout limitation any obligation of confidentiality, which Consultant may owea third party; (iii) Consultant owns or has properly obtained all applicablerights in and to the Inventions and Works and Materials (as such terms are definedin the Inventions Agreement) devised, developed, designed, discovered, reducedto practice or otherwise utilized by Consultant in the course of providing theServices described in Appendix A, and such Inventions and Works andMaterials do not, and shall not, infringe upon, or otherwise violate any rightsof, any third party; (iv) this Agreement does not conflict with any otheragreement or term of employment applicable to or binding upon Consultant andConsultant will promptly notify Trestle in the event that any such conflictdoes arise during the term hereof.

 

6.                                       Indemnification.  Consultant shallindemnify, defend and hold harmless Trestle from and against any and allliability, loss, damage, expense, claims or suits arising out of: (i)Consultant’s breach of this Agreement, including any representation or warrantycontained herein; or (ii) any grossly negligent or willful misconduct byConsultant or its employees, associates, consultants, agents, representatives,assignees or successors in interest, which occurs pursuant to or in connectionwith this Agreement or the relationship or relationships contemplated by thisAgreement; provided, however, that a) Consultant’s indemnification of Trestleshall be limited by the amount of compensation, in fees and warrants, receivedby Consultant under this Agreement; and b) any indemnification claim by Trestleagainst Consultant must be asserted by Trestle in writing, via certified mailto Consultant, within six (6) months of the Term of this Agreement.  Trestle shall indemnify, defend and holdharmless Consultant from and against any and all liability, loss, damage,expense, claims or suits arising out of: (i) Trestle’s breach of thisAgreement, including any representation or warranty contained herein; or (ii)the Services provided by Consultant, provided such claim does not in any mannerarise from Consultant’s, or its employees, associates, consultants, agents,representatives, assignees or successors in interest, grossly negligent orwillful act or omission.

 

7.                                       Termination.This Agreement may be terminated by either Party for any reason upon givingthirty (30) days’ advance written notice thereof to the other Party.  In addition, this Agreement may beterminated immediately byeither Party upon a material breach by the other Party.  For purposes of this Agreement, a materialbreach shall include Trestle’s failure to timely pay Consultant’s Fees andExpenses in accordance with the Description of Work in Appendix A.  A material breach by Consultant shall include,without limitation: (i) failure to adhere to the material terms and conditions of this Agreement; (ii) any conduct byConsultant that (in the good faith determination of Trestle)would materially injure the goodwill or reputation of Trestle and which has not been cured by Consultant withinfive (5) days of written notice of such conduct; and (iii)Consultant’s breach of any representation or warranty.

 

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8.                                       Effect ofTermination.  In theevent of any termination of this Agreement prior to completion of the Term, and in accordance with thespecifications of Section 8 hereof, Trestle agrees to payConsultant any unpaid balance due for work performed up to and including thedate of termination.  Upon termination,Consultant will return to Trestle all material containing ConfidentialInformation (as defined in the Inventions Agreement) and all records, data,notes, reports, printouts, sketches, material, equipment and other documents orproperty, and all reproductions of any of the foregoing, furnished by Trestleor developed or prepared by Consultant in connection with the Services.

 

9.                                       Notices.  Any and all notices or other communicationsrequired or permitted to be given by either Party to the other shall be inwriting and may be transmitted either by personal delivery by a nationalcourier service or by mail, certified postage prepaid, with return receiptrequested.  Notices shall be deemed dulyserved and given when personally delivered to the Party to whom directed or anyof its officers, or, in lieu of such personal service, three days after beingdeposited in the United States Mail, certified mail, return receipt requested,postage prepaid, addressed as follows:

 
| To Trestle:    |   | Trestle Acquisition Corp.      |
|----------------|--------|--------------------------------|
|           |   | 151 Shipyard Way               |
|           |   | Newport Beach, CA 92663        |
|           |   | Facsimile: (949) 673-1058      |
|           |   | Attention: Jack Zeineh, C.S.O. |
|           |   |                           |
| To Consultant: |   | Crosby Haffner                 |
|           |   | 1401 Lucile Ave.               |
|           |   | Los Angeles, CA 90026          |
|           |   | Facsimile: (213) 477-2031      |

 

10.                                 Entire Agreement.  This Agreement, together with the Appendiceshereto, and the Inventions Agreement, shallconstitute the entire agreement between the Parties hereto with respect to theretention of Consultant by Trestle, and contains all of the covenants andagreements between the Parties with respect to that retention in any mannerwhatsoever.  Each Party acknowledgesthat no representations, inducements, promises, or agreements, orally orotherwise, have been made by any Party, or anyone acting on behalf of anyParty, which are not embodiedherein, or in the InventionsAgreement, and that no other agreement, statement, orpromise not contained in this Agreement, or theInventions Agreement, shall be valid or binding.

 

11.                                 Modification.  This Agreement may not be amended except bya written agreement modifying the appropriate document duly executed byConsultant and an officer of Trestle.

 

12.                                 Successors and Assigns.  This Agreement shall be binding on theparties hereto and their respective successors and permitted assigns.  Consultant’s duties, obligations, rights andprivileges hereunder may not be delegated or assigned in any manner withoutTrestle’s prior written consent, which shall be provided or withheld inTrestle’s sole discretion.  The benefitshereunder with respect to the rights of Trestle may be assigned by Trestle toany other corporation or other business entity which succeeds to all orsubstantially all of the business of

 

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Trestle through merger, consolidation, corporate reorganization or byacquisition of all or substantially all of the assets of Trestle.

 

13.                                 Effect or Waiver.  Waiver by either of the parties of anybreach of any provision of this Agreement shall not operate or be construed asa waiver of any prior or subsequent breach of the same or any other provisionhereof.

 

14.                                 Severability.  If any provision of this Agreement is orbecomes or is deemed invalid, illegal or unenforceable in any jurisdiction suchprovision shall be deemed amended to conform to the applicable laws of suchjurisdiction so as to be valid and enforceable or, if it cannot be so amendedwithout materially altering the intention of the parties, it will be stricken,but the validity, legality and enforceability of such provision shall not in anyway be affected or impaired thereby in any other jurisdiction and the remainderof this Agreement shall remain in full force and effect.

 

15.                                 Governing Law and Venue.  This Agreement shall be governed by andconstrued in accordance with the law of the State of California, without reference to the conflict of laws principlesthereof.  Anyconflict or dispute arising under this Agreement or the relationship betweenthe Parties shall be resolved exclusively before a court of competentjurisdiction in Orange County, California.

 

16.                                 Construction.  Each party to this Agreement has had theopportunity to review this Agreement with legal counsel.  This Agreement shall not be construed orinterpreted against any party on the basis that such party drafted or authoreda particular provision, parts of or the entirety of this Agreement.

 

17.                                 Survival.  Sections 4, 5, 6 and 8-19 willsurvive the expiration or termination of this Agreement.

 

a.                                       Attorney’sFees.  The prevailing party in anylitigation instituted under this Agreement shall, in addition to otherremedies, be entitled to be reimbursed by the other party for all expenses ofsuch litigation, including reasonable attorneys’ fees.

 

18.                                 Headings.  The headings to the sections and Appendicesof this Agreement are included merely for convenience of reference and do notaffect the meaning of the language included therein.

 

19.                                 Counterparts. ThisAgreement may be executed in counterparts, each of which will be deemed anoriginal, but both of which together will constitute one and the sameinstrument.

 

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IN WITNESS WHEREOF, the Parties have enteredinto this Agreement as of the Effective Date written above.

 
|   | TRESTLE HOLDINGS, INC. |
|--------|------------------------|
|   |                   |   |
|   |                   |   |
|   | By:                    | /s/ GARY FREEMAN |   |
|   |                   | Gary Freeman |
|   |                   | CFO |
|   |                   |   |
|   |                   |   |
|   | By:                    | /s/ CROSBY HAFFNER |   |
| :      | Name:                  | Crosby Haffner |   |
|   | Its:                   |   |   |

 

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**APPENDIX ATO INDEPENDENT CONSULTING AGREEMENT**

 

**Description of Work**

 

1.                                       DETAILEDDESCRIPTION OF WORK:

 

Consultantshall serve as Interim President.

 

2.                                       START DATE:  December 31, 2003

 

3.                                       COMPLETIONDATE:  March 31, 2004

 

4.                                       PERSON(S) WHOARE TO PERFORM THE WORK:

 

CrosbyHaffner.

 

5.                                       AUTHORIZEDREPRESENTATIVE OF THE TRESTLE:

 

The character of Consultant’s Services shall be subject to theassignment and direction of Michael Doherty (“Director”) or otherrepresentative of Trestle as directed by Trestle to the Consultant. Further,the character and scope of Consultant’s Services may be revised by mutualagreement between Consultant and Trestle and such revision will be evidenced bya formal bilateral modification to the Consulting Agreement or this Descriptionof Work signed between Consultant and an officer of Trestle. The Director orthe Chief Financial Officer of Trestle shall be the only individual authorizedto direct the activities of Consultant.

 

6.                                       SCHEDULE PERFORMANCE:

 

If at any time during theperformance of this contract any phase of the required tasks appear to beimpossible of execution or if any phase cannot be completed on schedule, it isagreed that Consultant will notify Trestle within one (1) day of suchdetermination.  At the time of suchnotification Consultant shall explain to Trestle why a particular task isimpossible to complete and propose alternative procedures for achieving thedesired result.

 

7.                                       REPORTSCHEDULE:

 

Consultant shall reportregularly to Director Consultant’s progress on the various projects and tasksenumerated above.

 

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8.                                       PAYMENTTERMS:

 

Consultant’sonly compensation will be $20,000 per month paid on or before the 15thof such month and 37,500 warrants described in Appendix C.

 

9.                                       EXPENSES:

 

Trestle agrees to reimburse Consultant for the following:

 
|                                                                                  |   | **Yes** |   | **No** |
|---------------------------------------------------------------------------------------|--------|---------|--------|--------|
| •  Routine  out-of-pocket expense                                      |   | ý  |   | o      |
| •  Local  travel (to and from home and Newport Beach)                  |   | ý  |   | o      |
| •  Long  distance travel at the direction of the Director or President |   | ý  |   | o      |
| •  Other  - as approved in advance                                     |   | ý  |   | o      |

 

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**APPENDIXB**

 

**CONFIDENTIALITY AND INVENTIONS AGREEMENT**

 

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**APPENDIXC**

 

WARRANT TO PURCHASE COMMON STOCK OF TRESTLEHOLDINGS, INC.

 

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